(An­oth­er) ac­tivist at­tack on Alex­ion, as Paul Singer-found­ed hedge fund calls for biotech to sell it­self

In De­cem­ber, Alex­ion was forced to is­sue a high­ly un­usu­al state­ment: No, they told in­vestors, the com­pa­ny is not for sale and, no, they have not re­ceived any of­fers.

“It is high­ly un­usu­al, if not un­prece­dent­ed, for a bio­phar­ma­ceu­ti­cal com­pa­ny of our size and ma­tu­ri­ty to proac­tive­ly launch a sale process,” they wrote. “We do not be­lieve this ap­proach is the best path for dri­ving share­hold­er val­ue.”

Alex­ion’s lead­er­ship was writ­ing in re­sponse to an in­ter­nal ac­tivist at­tack from El­liott Ad­vi­sors, a hedge fund that has pres­sured the board since it took a stake in the biotech in 2017. Now El­liott is back and, for the first time, call­ing pub­licly for an out­right sale of the com­pa­ny.

The Paul Singer-led hedge fund, known for its com­pa­ny-warp­ing at­tacks in a num­ber of in­dus­tries, took par­tic­u­lar is­sue with Alex­ion’s $1.4 bil­lion ac­qui­si­tion of the blood dis­or­der biotech Por­to­la, a move that was wide­ly panned by in­vestors and led to an im­me­di­ate $1.7 bil­lion shave off the mar­ket val­ue, per El­liott’s cal­cu­la­tions. El­liott said the move was em­blem­at­ic of the mis­man­age­ment that had led to their pre­vi­ous, pri­vate bat­ter­ing of crit­i­cism at the end of 2019.

“Near­ly half a year lat­er, with height­ened ur­gency amidst a pub­lic health cri­sis and con­sid­er­able eco­nom­ic tur­moil, the mar­ket con­tin­ues to ren­der a de­ci­sive ver­dict for Alex­ion’s “go-it-alone, trust-us” ap­proach,” they wrote in a pub­lic let­ter to the board of di­rec­tors.  “The an­nounce­ment of your ac­qui­si­tion of Por­to­la – and the harsh neg­a­tive mar­ket re­ac­tion that fol­lowed – of­fers the lat­est ev­i­dence in sup­port of our view that the Board is tak­ing Alex­ion in the wrong di­rec­tion, and that the Com­pa­ny’s cur­rent strat­e­gy is un­like­ly to re­store the mar­ket’s per­cep­tions of Alex­ion’s at­trac­tive­ness and unique­ness.”

With Alex­ion hold­ing a mar­ket val­ue of over $22 bil­lion, a buy­out would like­ly be one of the largest biotech ac­qui­si­tions in re­cent mem­o­ry, and it’s un­clear who would put up the cash. Al­though the Con­necti­cut-based com­pa­ny has gen­er­at­ed con­sis­tent rev­enue by charg­ing over half-a-mil­lion dol­lars per year for its blood dis­or­der drug Soliris, patent pro­tec­tion on the drug ex­pired in 2017. The com­pa­ny’s strat­e­gy has con­sist­ed large­ly of switch­ing over pa­tients to the more con­ve­nient and sim­i­lar­ly priced Ul­tomiris, but ri­vals — such as a new drug from Apel­lis and an Am­gen biosim­i­lar — are emerg­ing.

At JP Mor­gan, short­ly af­ter the last El­liott at­tack, Alex­ion pre­dict­ed it would treat four times as many neu­ro­log­i­cal pa­tients with its drugs — a claim that raised an­a­lysts’ eyes, who won­dered where the pa­tients would come. Alex­ion is still await­ing 2021 read­outs on ALS and oth­er rare dis­or­ders.

In a note to in­vestors, SVB Leerink’s Ge­of­frey Porges echoed El­liott’s con­cerns. The com­pa­ny has ex­e­cut­ed well on its stat­ed strat­e­gy, he wrote, but its ac­qui­si­tions have been ques­tion­able and the stock has cu­mu­la­tive­ly un­der­per­formed.

“We agree that the most im­me­di­ate and ob­vi­ous val­ue cre­ation op­por­tu­ni­ty would be the sale of the com­pa­ny to a larg­er ac­quir­er, and con­cur that Alex­ion’s port­fo­lio would be a good fit with a num­ber of much larg­er com­pa­nies that have sig­nif­i­cant in­ter­ests in rare dis­ease treat­ments al­ready,” he said.

5AM Ven­tures: Fu­el­ing the Next Gen­er­a­tion of In­no­va­tors

By RBC Capital Markets
With Andy Schwab, Co-Founder and Managing Partner at 5AM Ventures

Key Points

Prescription Digital Therapeutics, cell therapy technologies, and in silico medicines will be a vital part of future treatment modalities.
Unlocking the potential of the microbiome could be the missing link to better disease diagnosis.
Growing links between academia, industry, and venture capital are spinning out more innovative biotech companies.
Biotech is now seen by investors as a growth space as well as a safe haven, fuelling the recent IPO boom.

Biohaven CEO Vlad Coric (Photo Credit: Andrew Venditti)

Pssst: That big Bio­haven Alzheimer's study? It was a bust. Even the sub­group analy­sis ex­ecs tout­ed was a flop

You know it’s bad when a biopharma player plucks out a subgroup analysis for a positive take — even though it was way off the statistical mark for success, like everything else.

So it was for Biohaven $BHVN on MLK Monday, as the biotech reported on the holiday that their Phase II/III Alzheimer’s study for troriluzole flunked both co-primary endpoints as well as a key biomarker analysis.

The drug — a revised version of the ALS drug riluzole designed to regulate glutamate — did not “statistically differentiate” from placebo on the Alzheimer’s Disease Assessment Scale-Cognitive Subscale 11 (ADAS-cog) and the Clinical Dementia Rating Scale Sum of Boxes (CDR-SB).  The “hippocampal volume” assessment by MRI also failed to distinguish itself from placebo for all patients fitting the mild-to-moderate disease profile they had established for the study.

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Janet Woodcock and Joshua Sharfstein (AP, Images)

Poll: Should Joshua Sharf­stein or Janet Wood­cock lead the FDA from here?

It’s time for a new FDA commissioner to come on board, a rite of passage for Joe Biden’s administration that should help seal the new president’s rep on seeking out the experts to lead the government over the next 4 years.

As of now, the competition for the top job appears to have narrowed down to 2 people: The longtime CDER chief Janet Woodcock and Joshua Sharfstein, the former principal deputy at the FDA under Peggy Hamburg. Both were appointed by Barack Obama.

Dan Skovronsky, Eli Lilly CSO (Lilly via Facebook)

Eli Lil­ly tees up dis­cov­ery pact worth more than $1.6B with Merus for T cell-fo­cused bis­pe­cif­ic an­ti­bod­ies

Under science chief Dan Skovronsky, Eli Lilly has taken some big swings at next-gen therapies, including trying to find the next big thing in oncology. Now, after one early failure in the field, Lilly is going back to the bispecific antibody well with a new deal with a Dutch biotech.

Lilly will pay $40 million upfront with an additional $20 million equity stake in Merus NV to identify and develop three bispecific antibodies looking to engage the CD3 antigen on T cells and redirect immune cells, the Indianapolis pharma giant said Tuesday.

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Andrew Allen (Gritstone)

As coro­n­avirus vari­ants trig­ger new alarms, the NIH is putting an un­der-the-radar ‘next-gen’ vac­cine in­to PhI

Over the past year, the world has been transfixed by the development of new vaccines to fight SARS-CoV-2. In a frenzy of activity, the new mRNA approach has delivered pioneering emergency approvals in record time. And with some setbacks, the more traditional big players are coming along with added jabs as the most affluent nations in the world begin to vaccinate large portions of their populations.

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The IPO queue adds 5 more biotechs hop­ing to ring in 2021 by blitz­ing Nas­daq

Following a record year for IPOs — in terms of both proceeds and count — there’s already a long lineup of biotechs ready to jump onto Nasdaq in the new year. The companies are likely looking for much higher raises than they initially projected on their S-1s. Now it’s time to see if investors are still hungry for another round of biotech stocks.

Sana helped set the pace early on, as its founders look to divvy up a fortune from their IPO. And late last week 5 more biotechs crowded in, looking to pick up the pace where 2020 left off. Here they are:

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News brief­ing: Beam bags a $260M pri­vate place­ment; mi­Ra­gen re­brands to Virid­i­an Ther­a­peu­tics

Agios vet John Evans has demonstrated how to raise big money for a little biotech.

The Beam Therapeutics CEO — and ARCH partner — has pieced together a $260 million private placement from a group of backers that includes Perceptive Advisors, Farallon Capital, Casdin Capital, Redmile Group and Cormorant Asset Management. And there are 3 main goals they’ll pursue with it: clinical development, strategic partnerships and general corporate purposes.

As­traZeneca keeps the ball rolling on Dai­ichi-part­nered En­her­tu, pick­ing up 2nd in­di­ca­tion in gas­tric can­cer

AstraZeneca’s big gamble on Daiichi Sankyo’s antibody-drug conjugate Enhertu has already paid off with a big approval in breast cancer more than a year ago. But the partners have big plans for their blockbuster in the making, and a new nod in gastric cancer will raise their spirits even higher.

The FDA on Friday approved Enhertu to treat locally advanced or metastatic HER2-positive gastric or gastroesophageal junction adenocarcinoma in patients who have previously undergone at least one round of treatment with a Herceptin-based regimen, AstraZeneca said in a release.

Janet Woodcock (AP Images)

Janet Wood­cock is in the run­ning for FDA com­mis­sion­er — what does that mean for the agen­cy's fu­ture?

Just a day after reports emerged that Janet Woodcock will serve as interim chief of the FDA, word has gotten out that she is also in the running for the permanent job.

The decision, as the initial wave of reactions suggest, could have dramatic implications for where the agency is headed in the next four years — if not beyond.

Woodcock, the longtime CDER director, is being vetted alongside former FDA principal deputy commissioner Joshua Sharfstein, Bloomberg reported. Already tapped as acting head of the agency, she’s set to take over from Stephen Hahn right after Biden’s inauguration next week.

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