Up­dat­ed: Acor­da shares surge as a big in­vestor push­es it to the auc­tion block

Look­ing to score a quick re­turn, one of Acor­da’s biggest share­hold­ers $ACOR wants to call a time-out on the biotech’s death de­fy­ing high wire act and roll out a safe­ty net — for in­vestors.

Scopia Cap­i­tal Man­age­ment filed no­tice with the SEC to­day that it has sent Acor­da CEO Ron Co­hen a let­ter out­lin­ing its call for a strate­gic re­view — in­clud­ing a hard push for a com­pa­ny auc­tion. While count­ing it­self a long­time ad­mir­er of Acor­da, Scopia con­clud­ed that while the com­pa­ny has the cash need­ed to move for­ward “con­tin­u­ing to pur­sue an in­de­pen­dent strat­e­gy presents sig­nif­i­cant risk for share­hold­ers.”

Ron Co­hen

Scopia con­trols 16.5% of Acor­da’s shares, which surged 5% this morn­ing as the buy­out buzz word cir­cu­lat­ed. And Scopia added more than a mil­lion shares as the news about a pos­si­ble sale hit.

Acor­da was re­cent­ly forced to re­struc­ture af­ter the com­pa­ny lost a key patent de­ci­sion cov­er­ing its cash cow, the MS drug Ampyra. It’s ap­peal­ing the de­ci­sion, but with the dis­tinct pos­si­bil­i­ty that gener­ic com­pe­ti­tion is loom­ing, the biotech slashed more than 100 jobs in April and cir­cled the wag­ons around CVT-301, now un­der re­view at the FDA.

The idea at Acor­da is that if they do lose patent pro­tec­tion next sum­mer, the sales force can move seam­less­ly on to the new drug. But even in the best of all pos­si­ble worlds, few de­vel­op­ers can re­ly on any­thing be­ing seam­less in R&D and at the FDA. And Scopia doesn’t like this po­si­tion at all.

From the let­ter:

While we have been sup­port­ive of the Com­pa­ny’s strat­e­gy to this point, we be­lieve it is now time to sell the Com­pa­ny. Had the Com­pa­ny pre­vailed in the Ampyra lit­i­ga­tion, Acor­da would have been a unique com­pa­ny with a path to $1B in rev­enues and sig­nif­i­cant stand­alone val­ue. Un­for­tu­nate­ly, the Com­pa­ny was un­suc­cess­ful, and it has now crossed the Ru­bi­con. In 2018 the busi­ness will re­vert to burn­ing cash with a lev­ered bal­ance sheet and no clear time­line to re­turn to prof­itabil­i­ty. These are treach­er­ous wa­ters. At the same time, re­cent ac­qui­si­tions of both Cy­nap­sus ($624M) and Neu­ro­Derm ($1.1B) speak to the strate­gic val­ue of late stage as­sets in Parkin­son’s dis­ease. Acor­da is a more valu­able ac­qui­si­tion can­di­date than ei­ther of these com­pa­nies.

In­bri­ja (for­mer­ly CVT-301) should launch next year and treat a re­al un­met need in ad­vanced Parkin­son’s dis­ease. While we be­lieve in the val­ue of this drug, it will take time to launch and will like­ly on­ly re­place Ampyra rev­enues. Tozadenant may suc­ceed in Phase 3 next year, or it might fail. The path to a high­ly prof­itable, mul­ti-prod­uct in­de­pen­dent com­pa­ny will be sole­ly de­ter­mined by this bi­na­ry event. That is a lot of de­vel­op­ment risk for share­hold­ers to bear.

Acor­da, though, says it doesn’t agree. In a re­ply post­ed with the SEC, the com­pa­ny said a sale now would sim­ply desta­bi­lize the com­pa­ny and leave share­hold­ers short­changed.

Acor­da has a mar­ket cap to­day of a lit­tle more than a bil­lion dol­lars.

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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While Ako­rn works to re­vive its for­tunes, the FDA hits it with an­oth­er warn­ing let­ter

Ako­rn just can’t dig it­self out of its hole.

The spe­cial­ty gener­ic drug­mak­er has re­ceived yet an­oth­er warn­ing let­ter from the FDA this year. With­out dis­clos­ing any specifics, the Lake For­est, Illi­nois-based drug­mak­er on Wednes­day said the US reg­u­la­tor had is­sued the let­ter, cit­ing an in­spec­tion of its Som­er­set, New Jer­sey man­u­fac­tur­ing fa­cil­i­ty in Ju­ly and Au­gust of 2018. The com­pa­ny’s shares $AKRX dipped about 1.7% to $4.65 be­fore the bell.

Image: Chris Varma. Frontier

UP­DAT­ED: Chris Var­ma un­veils MP­M's lat­est start­up — eye­ing 'un­drug­gable' can­cer tar­gets and pow­ered by ma­chine learn­ing, $67M

Two years af­ter MPM Cap­i­tal en­list­ed Chris Var­ma on its busy on­col­o­gy team, the for­mer en­tre­pre­neur-in-res­i­dence is un­veil­ing his first ven­ture project out of his new stomp­ing grounds in the Bay Area: Fron­tier Med­i­cines.

For Var­ma, who’s al­so co-found­ed Blue­print Med­i­cines and built com­pa­nies at Third Rock and Flag­ship, this marks an­oth­er op­por­tu­ni­ty to ap­ply some cut­ting-edge sci­ence to “sev­er­al of the most im­por­tant and dif­fi­cult tar­gets in can­cer” — tar­gets that oth­ers have tried to tack­le with more clas­si­cal meth­ods and failed. The launch round comes in at $67 mil­lion, which should go some way in scaf­fold­ing a pre­clin­i­cal pipeline and push one or more as­sets in­to the clin­ic three years from now, he tells me.

Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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The top 15 mega-deals in bio­phar­ma: Ab­b­Vie and Bris­tol-My­ers ac­qui­si­tions stir fresh de­bate over what's too big to buy

The debate over what’s too big to buy in biotech is back. A number of top analysts went right after AbbVie’s rationale for the Allergan deal today, just as Bristol-Myers Squibb stirred immediate debate over the worth and wisdom of acquiring Celgene.

To help provide some added context to this discussion, we asked DealForma chief Chris Dokomajilar to look over the past decade of major M&A in biopharma to decipher the top 15 plays.

The new numbers, unadjusted for inflation, harken back to the days of the Pfizer-Wyeth buyout and Merck’s decision to absorb Schering-Plough — both triggered in 2009. The heat over those acquisitions made the big pharma mega-deal highly unpopular for most everyone — except Pfizer — as industry leaders swore off almost all but the handy bolt-on acquisition.

Until recently.

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SQZ, Ery­tech kick off $57M cell ther­a­py part­ner­ship; Jean-Paul Kress lands new CEO gig at Mor­phoSys

→ In a mar­riage of two tech­nolo­gies meant to make cell ther­a­pies more pow­er­ful, SQZ Biotech is team­ing up with France’s Ery­tech Phar­ma for a col­lab­o­ra­tion, with $57 mil­lion re­served for the first project and $50 mil­lion for each sub­se­quent ap­proval (prod­uct or in­di­ca­tion). Hav­ing ac­cess to Ery­tech’s method of fash­ion­ing ther­a­peu­tics from red blood cells, the Cam­bridge, MA-based com­pa­ny said, will am­pli­fy SQZ’s cell en­gi­neer­ing ca­pa­bil­i­ties and al­low them to de­vleop a new class of im­munomod­u­la­to­ry ther­a­pies. Its own tech — so far ap­plied in can­cer but al­so has po­ten­tial in di­a­betes — tem­po­rary dis­rupts the cell mem­brane by squeez­ing the cell, thus cre­at­ing a brief win­dow for tar­get ma­te­ri­als such as anti­gens to en­ter.