An­a­lysts as­sess the dam­age — and next steps — af­ter Re­gen­eron/Sanofi get slammed in court

A fed­er­al judge’s de­ci­sion to or­der Re­gen­eron and Sanofi to pull their PC­SK9 drug Pralu­ent from the mar­ket man­aged to stun some of the most griz­zled ob­servers of the biotech world.

These patent dis­putes are not at all un­usu­al and are al­most al­ways set­tled with a share of the roy­al­ties when there’s a case to be made. And the court ac­knowl­edged that cre­at­ing a mo­nop­oly here was not in the pub­lic’s best in­ter­est. But the judge came down square­ly for Am­gen, say­ing:

(P)lain­tiffs have demon­strat­ed ir­repara­ble harm, as well as the in­ad­e­qua­cy of mon­ey dam­ages.

In­vestors clear­ly didn’t like the sound of any of this. Re­gen­eron’s shares $REGN dropped 7% — about $3 bil­lion in mar­ket cap — and Sanofi saw its stock slide 3%, about the same in mar­ket cap. Am­gen’s stock, mean­while, jumped 4.5%.

The first re­sponse, which every­one an­tic­i­pat­ed, was word from Re­gen­eron/Sanofi that the part­ners would ap­peal the de­ci­sion. But the very re­al pos­si­bil­i­ty ex­ists that an ap­peals court may not be quick to over­turn a rul­ing that came af­ter Re­gen­eron/Sanofi’s los­ing ar­gu­ment was flat­tened by the court. And the pos­si­bil­i­ty that Am­gen will pre­vail here got some top an­a­lysts think­ing over­time about the im­pli­ca­tions and pos­si­ble out­comes. We’ve gath­ered a few be­low.

Ge­of­frey Porges, Leerink

Sales of these new cho­les­terol drugs have not been im­pres­sive. But de­spite the slow take­off, a num­ber of an­a­lysts still be­lieve that these drugs will grad­u­al­ly build up a mar­ket worth bil­lions. Ge­of­frey Porges at Leerink crunched the num­bers if Am­gen’s win sticks:

As­sum­ing that AMGN cap­tures the ma­jor­i­ty of the fu­ture ~$2bn US Pralu­ent sales and main­tains a sim­i­lar mar­gin struc­ture with these in­cre­men­tal sales, our DCF val­ue for AMGN in­creas­es by $13, or 8%. This rep­re­sents a cash flow in­crease of $600mm in 2020E grow­ing to a $950mm ben­e­fit in 2025E, which AMGN could use for con­tin­ued div­i­dend growth, share buy­backs, or fu­ture ac­qui­si­tions.

Bri­an Sko­r­ney, Baird an­a­lyst

Bri­an Sko­r­ney at Baird be­lieves a roy­al­ty deal is the most like­ly out­come. He writes:

Though the rul­ing does in­di­cate that if Sanofi/Re­gen­eron do not file to ap­peal the de­ci­sion with­in 30 days, Pralu­ent will be pulled from the mar­ket, we doubt that will be the re­al­i­ty in the long run. The U.S. Court sys­tem is clear­ly cre­at­ed to in­still com­pe­ti­tion, not cre­ate mo­nop­o­lies. The Judge’s opin­ion clear­ly notes that “the pub­lic gen­er­al­ly is bet­ter served by hav­ing a choice of avail­able treat­ments. There­fore, the court finds it­self be­tween a rock and a hard place…tak­ing an in­de­pen­dent­ly de­vel­oped, help­ful drug off the mar­ket does not ben­e­fit the pub­lic.” The Judge al­so clear­ly hopes fur­ther pro­ceed­ings with “en­cour­age the par­ties to each an ap­pro­pri­ate busi­ness res­o­lu­tion.” As a re­sult, we think a hefty set­tle­ment is like­ly, pos­si­bly to the tune of 20%+ roy­al­ties to Am­gen. As a re­sult, we are rais­ing our price tar­get to $165.

If it does go to an ap­peals court, Biren Amin at Jef­feries doesn’t like the odds for Sanofi/Re­gen­eron.

Re­call in Ju­ly, we wrote about AMGN’s fil­ing an ap­peal case WBIP v. Kohler in­volv­ing low-emis­sion house­boat gen­er­a­tors in which the Ap­peals Court va­cat­ed the judg­ment of the Dis­trict Court deny­ing WBIP a per­ma­nent in­junc­tion. In this case, the Dis­trict Court felt that a PI would de­prive the con­sum­ing pub­lic “a po­ten­tial­ly life-sav­ing prod­uct.” The Ap­peals Court ar­gued that the pub­lic in­ter­est ar­gu­ment alone was not suf­fi­cient to de­ny a PI for a life-sav­ing good and specif­i­cal­ly cit­ed phar­ma­ceu­ti­cal drugs as an ex­am­ple in its rul­ing. If the Ap­peals Court is con­sis­tent with the WBIP v. Kohler rul­ing, it would mean a low like­li­hood that an ap­peal will be grant­ed.

 

Donald and Melania Trump watch the smoke of fireworks from the South Lawn of the White House on July 4, 2020 (via Getty)

Which drug de­vel­op­ers of­fer Trump a quick, game-chang­ing ‘so­lu­tion’ as the pan­dem­ic roars back? Eli Lil­ly and Ab­Cellera look to break out of the pack

We are unleashing our nation’s scientific brilliance and will likely have a therapeutic and/or vaccine solution long before the end of the year.

— Donald Trump, July 4

Next week administration officials plan to promote a new study they say shows promising results on therapeutics, the officials said. They wouldn’t describe the study in any further detail because, they said, its disclosure would be “market-moving.”

— NBC News, July 3

Something’s cooking. And it’s not just July 4 leftovers involving stale buns and uneaten hot dogs.

Over the long weekend observers picked up signs that the focus in the Trump administration may swiftly shift from the bright spotlight on vaccines being promised this fall, around the time of the election, to include drugs that could possibly keep patients out of the hospital and take the political sting out of the soaring Covid-19 numbers causing embarrassment in states that swiftly reopened — as Trump cheered along.

So far, Gilead has been the chief beneficiary of the drive on drugs, swiftly offering enough early data to get remdesivir an emergency authorization and into the hands of the US government. But their drug, while helpful in cutting stays, is known for a limited, modest effect. And that won’t tamp down on the hurricane of criticism that’s been tearing at the White House, and buffeting the president’s most stalwart core defenders as the economy suffers.

We’ve had positive early-stage vaccine data, most recently from Pfizer and BioNTech, playing catchup on an mRNA race led by Moderna — where every little sign of potential trouble is magnified into a lethal threat, just as every advance excites a frenzy of support. But that race still has months to play out, with more Phase I data due ahead of the mid-stage numbers looming ahead. A vaccine may not be available in large enough quantities until well into 2021, which is still wildly ambitious.

So what about a drug solution?

Trump’s initial support for a panacea focused on hydroxychloroquine. But that fizzled in the face of data underscoring its ineffectiveness — killing trials that aren’t likely to be restarted because of a recent population-based study offering some support. And there are a number of existing drugs being repurposed to see how they help hospitalized patients.

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Shoshanna Shendelman, Applied Therapeutics CEO (Applied Therapeutics)

A lit­tle biotech slaps back at a 'crim­i­nal' short at­tack, vow­ing to pur­sue a pros­e­cu­tion of their case

As short attacks go, Biotech Research Partners’ assault on Applied Therapeutics’ “cherry picked” data and a variety of so-called red flags didn’t cause a whole lot of damage. Ahead of the July 4 holiday, its shares $APLT were dinged and showed signs of quick recovery.

But that didn’t stop an incendiary response, as the biotech swung into action bright and early Monday morning.

Applied Therapeutics accused the authors of the short report of manipulating graphs and figures, misrepresenting data and included factual misrepresentations — all of which added up, in their view, to fraud.

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Cel­lec­tis slammed af­ter pa­tient dies and FDA slaps a hold on their tri­al for an off-the-shelf CAR-T for mul­ti­ple myelo­ma

Cellectis was slammed after the market close on Monday as the biotech reported that the FDA demanded it hit the brakes on their MELANI-01 trial for their off-the-shelf cell therapy UCARTCS1A after one of the patients in the study died of treatment-related cardiac arrest.

The multiple myeloma patient had previously been treated unsuccessfully with various therapies, noted the biotech, and had been given dose level two (DL2) of their allogeneic CAR-T.

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UP­DAT­ED: Im­munomedics spells out PFS ben­e­fit of Trodelvy in mTNBC, hunt­ing a full OK just weeks af­ter ac­cel­er­at­ed ap­proval

By the time the FDA finally granted an accelerated OK for Immunomedics’ Trodelvy, we already got a very strong hint that their confirmatory Phase III study in metastatic triple-negative breast cancer was a success.

That’s because the independent data safety monitoring committee recommended that the trial be stopped early. But just what pointed them to the conclusion was still unclear.

“We do not know the totality of their decision other than it’s pretty evident that the primary endpoint was met; otherwise they could not request to halt the study,” Behzad Aghazadeh, the executive chairman, told Endpoints News at the time.

Bill Haney, Dragonfly CEO (Dave Pedley/Getty Images for SXSW)

A boom­ing Drag­on­fly is tak­ing its TriN­KETs to Copen­hagen as the lat­est Bris­tol My­ers pact spurs ex­pan­sion plans — out­side the US

Bristol Myers Squibb is making a habit out of collaborating with the crew at Dragonfly, adding their 3rd deal in a series that now will take them into newly charted R&D territory. And the fast-growing team at the Cambridge-based biotech is adding a facility in Copenhagen for its next growth spurt, where the government is making it easy to recruit scientists internationally as the U.S. throttles back.

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Covid-19 roundup: Teamed up with NIH, Re­gen­eron launch­es PhI­II pre­ven­tion tri­al for an­ti­body cock­tail

As Regeneron moves its antibody cocktail into Phase II/III trials testing REGN-COV2 as a treatment for both hospitalized and non-hospitalized patients with Covid-19, the biotech is also starting a Phase III in the prevention setting.

The National Institute of Allergy and Infectious Diseases — which orchestrated the large, randomized study for remdesivir that produced positive results — will jointly run the study.

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Douglas Love, Annexon CEO (Annexon)

IPO bound? Ac­tu­al­ly, An­nex­on was al­ready prepped and primed to toss its S-1 to Wall Street as in­vestors ral­lied

The Wall Street IPO shuffle generally calls for a little distance between the crossover ante and the Wall Street double, but with the window on the street wide open and biotech sizzling hot, who’s waiting?

The crew at Annexon didn’t leave anyone in suspense for long about their IPO plans. A day after the Bay Area biotech with clinical plans to target neurodegeneration quietly unveiled a $100 million raise, they were back with an S-1 outlining a pitch to double that — or more.

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Jean-Paul Clozel, Idorsia CEO (Patrick Straub/Keystone via AP Images)

Sec­ond PhI­II study for Idor­si­a's sleep drug re­turns pos­i­tive re­sults, but al­so rais­es new ques­tions

Following a successful Phase III study in April showcasing the safety and potential of its new sleep drug, Idorsia posted some mixed news in the second Phase III study, but that won’t stop a planned filing aimed at regulatory approval.

The drug, a dual orexin receptor antagonist (DORA) called daridorexant, was found to significantly improve sleep maintenance and subjective total sleep time in 25 mg doses, replicating results from the first Phase III study. However, improvements in sleep onset and daytime functioning narrowly missed statistical significance, despite numerical consistency with the April study.

Pfiz­er re-ups on Mis­sion Ther­a­peu­tics col­lab­o­ra­tion, lead­ing a $15M round and grab­bing first dibs on DUBs

Seven years after Pfizer first invested in Mission Therapeutics, a biotech that researches selectively inhibiting deubiquitylating enzymes (DUBs), the pharma giant is re-upping its commitment to the company in another sign of confidence in the field of protein degradation.

Pfizer’s VC arm is heading up a $15 million round, announced Monday morning, and increasing its overall stake in Mission. Pfizer is also entering into a licensing agreement that would give it first dibs at negotiating exclusivity after accessing certain DUB inhibitors and screening them for their potential as drugs.