Al­ler­gan shows how you can de­stroy your rep and get mobbed by law­mak­ers in 4 easy steps

The view from End­points
John Car­roll, Ed­i­tor

First came the on­slaught of me­dia re­ports. Then came the out­raged let­ter from the US Sen­a­tors fol­lowed by the launch of a House probe and a bi­par­ti­san de­mand for doc­u­ments. Now, a few weeks in, comes the first piece of leg­is­la­tion aimed at killing the source of the out­rage.

Al­ler­gan’s Mo­hawk gam­bit on the patent front is fast be­com­ing a text­book study in how to shoot your­self in the foot while at­tract­ing a large and un­sym­pa­thet­ic crowd.

Claire Mc­Caskill, the De­mo­c­ra­t­ic Sen­a­tor from Mis­souri, has fol­lowed up a scold­ing let­ter to PhRMA chief Stephen Ubl about how Al­ler­gan was gam­ing the sys­tem, and her plans for leg­is­la­tion that would ban com­pa­nies from us­ing trib­al im­mu­ni­ty laws to pro­tect them­selves from in­ter partes re­view patent chal­lenges.

Al­ler­gan man­aged to cap­ture every­one’s at­ten­tion with a nifty lawyer’s trick. They paid the Saint Reg­is Mo­hawk Tribe $13.75 mil­lion for a deal that trans­ferred its patents for the $1.5 bil­lion drug Resta­sis to the tribe, then es­sen­tial­ly leased them back for roy­al­ties. And the tribe vir­tu­al­ly hung a big ban­ner say­ing it was open for busi­ness for the rest of the phar­ma in­dus­try and any­one else that would like them to claim im­mu­ni­ty against the IPR process and guard against gener­ics.

I’m doubt­ing that any oth­er phar­mas will fol­low, no mat­ter how bad­ly tempt­ed they may feel. This is how you can dam­age your com­pa­ny’s rep­u­ta­tion at con­sid­er­able ex­pense and an­tag­o­nize law­mak­ers with­out ben­e­fit­ing at all — not an ap­pe­tiz­ing prospect.

Mc­Caskill’s state­ment, re­port­ed by Reuters, neat­ly sum­ma­rizes Al­ler­gan’s dilem­ma.

Any think­ing per­son would look at what this com­pa­ny did and say, ‘That should be il­le­gal.’ Well, I agree. Con­gress nev­er imag­ined tribes would al­low them­selves to be used by phar­ma­ceu­ti­cal com­pa­nies to avoid chal­lenges to patents, and this bill will shut the prac­tice down be­fore oth­ers fol­low suit.

Al­ler­gan CEO Brent Saun­ders has been try­ing might­i­ly hard to make this in­to a con­tro­ver­sy over the IPR process, which they say is in­her­ent­ly un­fair, forc­ing them to fight si­mul­ta­ne­ous­ly on two le­gal fronts.

He may be right. But no one is pay­ing much at­ten­tion. He’s giv­en Con­gress too much to dis­tract them.

The Saint Reg­is Mo­hawk Tribe says it’s “out­raged” that law­mak­ers would sin­gle out strug­gling In­di­an tribes while al­low­ing state uni­ver­si­ties to re­tain their own im­mu­ni­ty.

The Tribe re­mains com­mit­ted to work­ing with all Mem­bers of Con­gress to dis­cuss how its re­cent eco­nom­ic di­ver­si­fi­ca­tion ef­forts ben­e­fits the Tribe, its mem­bers, and the sur­round­ing com­mu­ni­ties with­out harm­ing com­pe­ti­tion among phar­ma­ceu­ti­cal com­pa­nies (both pri­vate and gener­ic) or ar­ti­fi­cial­ly in­flat­ing drug prices.

The Mo­hawks al­ready made it clear that their casi­no isn’t enough. But it’s un­like­ly that the eco­nom­ic di­ver­si­fi­ca­tion ar­gu­ment will be a big win­ner in Con­gress, where high drug prices and ac­cess to cheap gener­ics re­main a source of con­sid­er­able pub­lic rage.

This doesn’t end well for Al­ler­gan. The ques­tion is, can they stop dig­ging and climb out of the hole they’re in.

Im­age: Brent Saun­ders AP Im­ages

Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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UP­DAT­ED: With loom­ing ‘apoc­a­lypse of drug re­sis­tance,’ Mer­ck’s com­bi­na­tion an­tibi­ot­ic scores FDA ap­proval on two fronts

Merck — one of the last large biopharmaceuticals companies in the beleaguered field of antibiotic drug development — on Wednesday said the FDA had sanctioned the approval of its combination antibacterial for the treatment of complicated urinary tract and intra-abdominal infections.

To curb the rise of drug-resistant bacteria and maintain the efficacy of the therapy, Recarbrio (and other antibacterials) — the drug must be used to treat or prevent infections that are proven or strongly suspected to be caused by susceptible gram-negative bacteria, Merck $MRK said.

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John McHutchison in 2012. Getty Images

The $1.1M good­bye: Gilead CSO John McHutchi­son is out as Daniel O’Day shakes up the se­nior team

Just a little more than a year after John McHutchison grabbed a promotion to become CSO at Gilead in the wake of Norbert Bischofberger’s exit, he’s out amid a shakeup of the senior team that is also triggering the departure of two other top execs.

Gilead stated that McHutchison “has decided to step down” from the job as of August 2nd. And their SEC filing notes that he’ll be getting a $1.1 million check to settle up on his contract.

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Thomas Gajewski, David Steinberg. (CRI, Pyxis)

Bay­er, Long­wood back star re­searcher's deep dive in­to the tu­mor mi­croen­vi­ron­ment for new I/O tar­gets

From PD-1 targeting to the RAS pathway to the STING complex, Thomas Gajewski has spent the past two decades of his career decoding the various ways the immune system can be unleashed to defend against cancer. So when the University of Chicago professor comes around to putting all his findings into a new platform for finding new targets, VCs and pharma groups alike pay attention.

“He’s been studying T cells for 20 years, plus he’s one of the world’s leaders if not the world leader in the space,” David Steinberg, partner at Longwood Fund, said. “Furthermore, let me add he did a lot of the foundational research and also some of the seminal clinical trials in the existing set of I/O agents. He understands the space really well, he understands the current strengths, and I think he understood really well what was missing, so he knew where to look.”

Kamala Harris speaking yesterday at the Des Moines Register Iowa Presidential Candidate Forum [via Getty]

Who’s the tough­est on drug prices? A game of po­lit­i­cal one-up­man­ship is dri­ving the pol­i­cy de­bate in Wash­ing­ton

Earlier this week we got a look at Senator Kamala Harris’ position on drug prices. She’s proposing that HHS take an average price from single-payer systems like the UK, Germany and Canada — which leverage market access for lower prices — and use that to set the US price. Anything drug companies collect above that would be taxed at a rate of 100%.

And the rhetoric is scathing:
While families struggle to make it to the end of the month, pharmaceutical companies are turning record profits. They’re spending nearly as much on advertising as R&D. They’re manipulating their market power to hike prices on lifesaving generic drugs. They’re making twice the profit of the average industry in America and still increased drug prices by 10.5% over the past six months alone. Meanwhile, they are charging dramatically higher prices to American consumers.
That’s an escalation on Joe Biden’s plan, which includes drug importation from those cheaper markets as well as allowing Medicare to negotiate prices — something that virtually all Dems agree on now.

SJ Lee [File photo]

Go­ing in­side cells, Sung Joo Lee has sketched some big goals for his small — but glob­al — team of drug hunters

For a small biotech based in South Korea with a research arm in Cambridge, MA, Orum Therapeutics has sketched out some big goals aimed at developing antibodies for intracellular targets. And now they have a new $30 million round to push the work forward, aiming at a slate of currently undruggable quests.

Orum has been working on a platform tech out of Ajou University that relies on endocytosis to smuggle antibodies and their cargo inside a cell. They’ve published work in Nature that illustrates its preclinical potential in RAS mutations, and KRAS is on their list of targets. 

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Astel­las buys in­to Fre­quen­cy's re­gen­er­a­tive med strat­e­gy with a $625M al­liance on hear­ing loss

The executive team at Frequency Therapeutics never oversold the results of their maiden Phase I/II study for a new drug to rectify hearing loss. It was, they said back in April, primarily about safety and tolerability, where their drug FX-322 performed as they had hoped. 

That early glimpse of efficacy everyone searches for in their first try on humans? 

(I)mprovements in hearing function, including audiometry and word scores, were observed in multiple FX-322 treated patients.

We don’t know exactly what that means. But whatever the details, Astellas found enough in the data to jump in with a sizable collaboration deal.

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