An­oth­er cheap, old drug is be­ing fresh­ened up for brand pric­ing in the US — and shares soar, briefly

BioReg­num, the view from John Car­roll

When the ex­ecs at Fortress went about set­ting up their pain drug biotech Av­enue Ther­a­peu­tics $ATXI, they went to some ex­tremes to avoid R&D risk. In­stead of try­ing some­thing new, they tweaked a Eu­ro­pean IV for­mu­la­tion for tra­madol — nev­er ap­proved in the US, where oral tra­madol has been pre­scribed for 23 years — and took a shot at a piv­otal pro­gram.

To get start­ed, the com­pa­ny paid a grand to­tal of $3 mil­lion — in two stag­gered pay­ments — for the rights to an old, well un­der­stood and quite pow­er­ful gener­ic pain med, with mile­stones at­tached to their suc­cess.

That qual­i­fies as lunch mon­ey in the bio­phar­ma busi­ness.

Lucy Lu

More ex­pen­sive — but still rel­a­tive­ly cheap — was a piv­otal de­vel­op­ment pro­gram they reck­oned would cost $30 mil­lion when Av­enue pitched its S-1 to in­vestors. Rolled out at a pro­posed $10 a share, they took $6 at the pric­ing, raised $33 mil­lion for the re­search and saw the price surge to about $8 be­fore grad­u­al­ly de­scend­ing to a lit­tle more than $4 a share.

The mar­ket cap closed at a mi­cro lev­el of $44 mil­lion on Fri­day.

Which brings us to to­day. 

Av­enue is an­nounc­ing that the first piv­otal study, com­par­ing IV tra­madol to a place­bo, was a suc­cess, with a p-val­ue of 0.005 for the 50 mg dose. Three sec­ondary end­points al­so hit on the 50 mg. They’re hold­ing back the de­tails on the da­ta for a con­fer­ence and plan to start the sec­ond, con­fir­ma­to­ry Phase III lat­er this year.

Av­enue’s ex­ecs went in­to the study with the odds on their side. Tra­madol’s ef­fec­tive­ness is so well un­der­stood, it’s be­gun rais­ing con­cerns about be­com­ing the poor man’s opi­oid in oth­er coun­tries. The DEA des­ig­nat­ed the syn­thet­ic anal­gesic as a Sched­ule IV drug in 2015. So I asked Av­enue CEO Lucy Lu about that by email, and whether the com­pa­ny was sim­ply set­ting up a shot at charg­ing a pre­mi­um in the US for an­oth­er old gener­ic run by the reg­u­la­tors — al­beit af­ter a fair­ly sig­nif­i­cant de­vel­op­ment pro­gram.

Her re­sponse:

The FDA re­quires two place­bo-con­trolled stud­ies be­cause it’s not nec­es­sar­i­ly easy to beat place­bo in a pain study and on­ly tru­ly ef­fi­ca­cious drugs can do that. In our case, IV tra­madol beat place­bo not on­ly on the pri­ma­ry end­point, but al­so all of the key sec­ondary end­points, in­clud­ing pa­tient glob­al as­sess­ment, in a very con­sis­tent and dose de­pen­dent man­ner. In com­bi­na­tion with what we know about oral tra­madol, it points to a very ef­fec­tive IV drug.

We have not done a de­tailed pric­ing study. How­ev­er, all of the spon­sors in our space that have dis­cussed pric­ing of new drugs have men­tioned around $100 per day. I think that pro­vides a use­ful bench­mark.

Gener­ic tra­madol pills cost about $1.50 each.

In­vestors liked the sound of it all. Av­enue’s shares jumped 29% in pre-mar­ket trad­ing. But then peo­ple be­gan to think about it, and the shares end­ed down the day about 4%. It is, af­ter all, not the kind of sto­ry that peo­ple are at­tract­ed to.

There’s noth­ing new about grab­bing an old drug OK’d in Eu­rope and then bring­ing it in cheap years lat­er for the US mar­ket. Marathon did that with a steroid, de­vel­oped specif­i­cal­ly for Duchenne, which it then rolled out as an ex­pen­sive rare dis­ease drug — un­til the whole sit­u­a­tion blew up in­to a con­tro­ver­sy that forced the com­pa­ny to sell it to PTC. Marathon ex­ecs were Mar­tin Shkre­li’s role mod­el in drug de­vel­op­ment.

You can de­cide for your­self if Av­enue is gam­ing the sys­tem.

Fangliang Zhang, AP Images

UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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Bris­tol My­ers is clean­ing up the post-Cel­gene merg­er pipeline, and they’re sweep­ing out an ex­per­i­men­tal check­point in the process

Back during the lead up to the $74 billion buyout of Celgene, the big biotech’s leadership did a little housecleaning with a major pact it had forged with Jounce. Out went the $2.6 billion deal and a collaboration on ICOS and PD-1.

Celgene, though, also added a $530 million deal — $50 million up front — to get the worldwide rights to JTX-8064, a drug that targets the LILRB2 receptor on macrophages.

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Leen Kawas, Athira CEO (Athira)

Can a small biotech suc­cess­ful­ly tack­le an Ever­est climb like Alzheimer’s? Athi­ra has $85M and some in­flu­en­tial back­ers ready to give it a shot

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.

GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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