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.

 

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Joe Jimenez, Getty

Ex-No­var­tis CEO Joe Jimenez is tak­ing an­oth­er crack at open­ing a new chap­ter in his ca­reer — and that in­cludes a new board seat and a $250M start­up

Joe Jimenez is back.

The ex-CEO of Novartis has taken a board seat on Century Therapeutics, the Versant and Bayer-backed startup focused on coming up with a brand new twist on cell therapies for cancer — a field where Jimenez made his mark backing the first personalized CAR-T approved for use.

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Can we make the an­tibi­ot­ic mar­ket great again?

The standard for-profit model in drug development is straightforward. Spend millions, even billions, to develop a medicine from scratch. The return on investment (and ideally a tidy profit) comes via volume and/or price, depending on the disease. But the string of big pharma exits and slew of biotech bankruptcies indicate that the model is sorely flawed when it comes to antibiotics.

The industry players contributing to the arsenal of antimicrobials are fast dwindling, and the pipeline for new antibiotics is embarrassingly sparse, the WHO has warned. Drugmakers are enticed by greener pastures, compared to the long, arduous and expensive path to antibiotic approval that offers little financial gain as treatments are typically priced cheaply, and often lose potency over time as microbes grow resistant to them.

Eye­ing a trio of tri­al ini­ti­a­tions, Jim Wilson's gene ther­a­py start­up woos Bruce Gold­smith from Deer­field as CEO

Passage Bio — Jim Wilson’s self-described “legacy company” — has wooed a seasoned biotech executive to steer the clinical entry of its first three gene therapy programs.

Bruce Goldsmith jumps to the helm of Passage after a brief CEO stint at Civetta, a cancer-focused startup he helped launch while a venture partner at Deerfield. He takes over from OrbiMed partner and interim chief Stephen Squinto, who will now lead the R&D team.

Amber Saltzman (Ohana)

Flag­ship's first ven­ture of 2020 is out, and it's all about sperm

A couple years ago, Amber Salzman got a call as she was returning East full-time after a two-year stint running a gene therapy company in California.

It was from someone at Flagship Pioneering, the deep-pocketed biotech venture firm. They had a new company with a new way of thinking about sperm. It had been incubating for over a year, and now they wanted her to run it.

“It exactly fit,” Salzman told Endpoints News. “I just thought I had to do something.”

Pfiz­er ax­es 6 ear­ly to late-stage can­cer stud­ies from the pipeline — with one oth­er cut for sick­le cell dis­ease

Pfizer trimmed a group of 3 R&D programs using their PD-L1 Bavencio — partnered with Merck KGaA — in their latest pipeline cull.

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UP­DAT­ED: In­cyte scores much need­ed PhI­II suc­cess — and of course it’s de­liv­ered by rux­oli­tinib

Incyte’s efforts to breathe a second life into ruxolitinib — its JAK inhibitor sold in pill form as Jakafi — has been greeted with clear, if preliminary and unsurprising, Phase III success.

Topline data from the TRuE-AD2 cements ruxolitinib’s foundational importance for Incyte, and gives analysts hope that there might yet be room for growth in a pipeline that’s suffered multiple R&D setbacks.

Stephen Hahn, AP

The FDA un­veils a new reg­u­la­to­ry frame­work to speed along gene ther­a­pies, re­ward­ing the lead­ing play­ers

Bioregnum Opinion Column by John Carroll

The emphasis at the FDA over the past 5 years or so has been on assisting drug developers as much as they can to speed up regulatory reviews and push more drugs into the market. And they are now crafting a final set of regulations aimed at flagging through a whole new generation of gene therapies in clinical testing at a rapid clip.

In a set of 6 prospective guidances posted on the FDA web site Tuesday morning, FDA commissioner Stephen Hahn committed the agency to staying flexible in handing out designations that are critical to gaining early approvals for drugs that claim to be once-and-done but don’t have anything close to the data needed to prove it.

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Mike Bloomberg (AP IMAGES)

Mike Bloomberg joins a grow­ing cho­rus of De­mo­c­ra­t­ic pres­i­den­tial can­di­dates threat­en­ing to go af­ter drug patents

As the mayor of New York City, Mike Bloomberg had a few modest ideas about lowering prescription drug prices in the Big Apple that gained little traction. Now on the campaign trail on a faint hope of clinching the Democratic presidential nomination, the billionaire has some bigger plans — including one that would alter the patent system central to the biopharma business.

In a barebones drug pricing plan posted on Monday, Bloomberg came out blasting President Donald Trump for failing to deliver his promise to lower drug prices, and then making misleading claims about them. The price of over 3,000 drugs still increased at a rate five times higher than inflation in the first six months of 2019, he wrote.