Are­na sheds ties to weight drug Belviq, com­plet­ing a makeover

Amit Mun­shi, Are­na

From now on, you can scratch any lin­ger­ing rep Are­na Phar­ma­ceu­ti­cals $AR­NA had as an obe­si­ty-fo­cused biotech. Four-and-a-half years af­ter the FDA ap­proved its weight drug Belviq for mar­ket­ing, and long af­ter vi­sions of block­buster sales van­ished like a mi­rage, the biotech has sold off rights to the drug to its part­ner Ei­sai and backed away from any re­main­ing fi­nan­cial com­mit­ment for fur­ther tri­al work.

Right on cue, Are­na al­so filed a $50 mil­lion ATM Wednes­day af­ter­noon.

In its place Are­na will take a promise for up to $26 mil­lion in com­mer­cial mile­stones and redi­rect about $80 mil­lion it es­ti­mates were ear­marked for Belviq. That mon­ey will now be put it in ser­vice of three mid-stage drugs in its pipeline. There’s an­oth­er $23 mil­lion in sup­port pay­ments and a 31.5% roy­al­ty will be re­placed with roy­al­ty pay­ments of 9.5% on an­nu­al glob­al net sales of lor­caserin less than or equal to $175 mil­lion, 13.5% on an­nu­al glob­al net sales greater than $175 mil­lion but less than or equal to $500 mil­lion and 18.5% on an­nu­al glob­al net sales greater than $500 mil­lion.

Quar­ter­ly sales and roy­al­ties for the drug, though, have been in de­cline.

The move com­pletes a shift set in mo­tion by CEO Amit Mun­shi, who stepped in last spring just as his for­mer biotech — the biosim­i­lar man­u­fac­tur­er Epirus —  was about to crash and burn. Mun­shi has al­ready re­or­ga­nized Are­na, lay­ing off 120 full time po­si­tions; the biotech now has about 50 staffers for its de­vel­op­ment mis­sion. And Mun­shi’s set to look to four da­ta read­outs on Are­na’s whol­ly-owned or part­nered as­sets.

Their top clin­i­cal pro­gram is for etrasi­mod (APD334), which Mun­shi de­scribes as the “sec­ond S1P mod­u­la­tor be­hind Re­cep­tos (ozan­i­mod),” bought out by Cel­gene for more than $7 bil­lion. Phase II da­ta is due in late 2017. Ra­linepag (ADP811) will de­liv­er mid-stage da­ta on pul­monary ar­te­r­i­al hy­per­ten­sion lat­er in the year. And their cannabi­noid 2 re­cep­tor ag­o­nist for Crohn’s pain wraps the in-house pipeline. Nelotanserin, a 5-HT2A in­verse ag­o­nist, is part­nered with Ax­o­vant for de­men­tia as­so­ci­at­ed psy­chosis.

If you look back at the wave of obe­si­ty drugs near­ing the FDA at the same time in 2012, Mun­shi tells me, each was linked by “some an­a­lyst with bil­lion-plus peak sales. Each are sub-$50 mil­lion to­day.” Lin­ger­ing safe­ty con­cerns from an ear­li­er gen­er­a­tion of weight drugs cre­at­ed an over­hang of con­cerns that Are­na and Ei­sai were nev­er able to shake, says the CEO. Pay­ers nev­er stepped up with a com­mit­ment to re­im­burse for the drugs. But he says he still be­lieves that Ei­sai can turn it around, look­ing for more da­ta from a longterm car­dio out­come tri­al.

Now, though, the new, slimmed down mis­sion at Are­na will be mi­nus the weight of Belviq.

In­vestors pony up $476M for the lat­est round of biotech IPOs to hit the Street

Three biotechs — and a genome se­quenc­ing play­er — have caught the lat­est tide to the Gold Coast of IPOs, round­ing out the first half of 2019 with 23 new drug de­vel­op­ers mak­ing it on Nas­daq.

Most of these com­pa­nies filed their IPOs al­most si­mul­ta­ne­ous­ly, though we’re still wait­ing on word of fel­low class­mate Bridge­Bio’s pric­ing af­ter CEO Neil Ku­mar set the terms at $14 to $16 a share on Mon­day in search of a $240 mil­lion (or so) wind­fall. If he’s suc­cess­ful, that would take the one-week haul past the $700 mil­lion mark, a fresh sign that in­vestors’ en­thu­si­asm for new­ly coined pub­lic biotechs hasn’t cooled.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

Robert Forrester, Verastem

Ve­rastem CEO For­rester steps to the ex­it as the board hunts com­mer­cial-savvy ex­ec for the be­lea­guered biotech

Robert For­rester is step­ping down as CEO of Ve­rastem On­col­o­gy $VSTM just 8 months af­ter the com­pa­ny nabbed an ap­proval for du­velis­ib, a PI3K drug with a sto­ried past — and what ap­pears as not much of a fu­ture.

The biotech put out word this morn­ing that For­rester will take an ad­vi­so­ry role with Ve­rastem while COO Dan Pa­ter­son steps up to take charge of the lead­er­ship team and the board looks around for a new CEO.

In starved an­tibi­ot­ic field, Melin­ta soars as FDA grants speedy drug re­view

Such is the state of af­fairs in an­tibi­ot­ic land that the FDA agree­ing to pri­or­i­ty re­view an ap­pli­ca­tion to ex­pand the use of an an­tibi­ot­ic can rock­et up a stock more than two-fold.

On Wednes­day, Melin­ta Ther­a­peu­tics said its ap­proved an­tibi­ot­ic Baxdela had been grant­ed pri­or­i­ty re­view for use in com­mu­ni­ty-ac­quired bac­te­r­i­al pneu­mo­nia (CAPB). The FDA is ex­pect­ed to make its de­ci­sion by Oc­to­ber 24. Shares of the Con­necti­cut drug­mak­er $ML­NT cat­a­pult­ed, clos­ing up near­ly 224% at $6.41.

Ken Frazier appears before the Senate Committee on Finance for a hearing on prescription drug pricing on Capitol Hill in Washington, DC, February 26, 2019. Chris Kleponis for CNP via AP Images

Who’s next in line to suc­ceed Ken Fra­zier as CEO of the Keytru­da-blessed Mer­ck?

When Merck waved off a looming forced retirement for Ken Frazier last September, the board cited flexibility in CEO transition as a key factor in the decision. Having Frazier — who’s also chairman of the company — around beyond his 65th birthday in 2019 would ensure they install the best person at the best time, they said.

The board has evidently begun that process with a clear preference for internal candidates, sources told Bloomberg. CFO Robert Davis, chief marketing officer Michael Nally, and chief commercial officer Frank Clyburn are all in the running, according to an insider.

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Brent Saunders at an Endpoints News event in 2017 — File photo

An­a­lyst call with Al­ler­gan ex­ecs stokes an­tic­i­pa­tion of a plan to split the com­pa­ny in ‘a month or two’

So what’s up at Al­ler­gan?

Ear­li­er this week the ubiq­ui­tous Ever­core ISI an­a­lyst Umer Raf­fat was on the line with com­pa­ny ex­ec­u­tives to probe in­to the lat­est on the num­bers as well as CEO Brent Saun­ders’ re­cent de­c­la­ra­tion that he’d be do­ing some­thing de­fin­i­tive to help long-suf­fer­ing in­vestors who have watched their shares dwin­dle in val­ue.

He came away with the im­pres­sion that a sig­nif­i­cant com­pa­ny split is on the way. And not on some dis­tant time hori­zon.

In­vestor day prep at Mer­ck in­cludes a new strat­e­gy to pick up the pace on M&A — re­port

Mer­ck’s re­cent deals to buy up two bolt-on biotechs — Ti­los and Pelo­ton — weren’t an aber­ra­tion. In­stead, both ac­qui­si­tions mark a new strat­e­gy to beef up its dom­i­nant can­cer drug op­er­a­tions cen­tered on Keytru­da while look­ing to ad­dress grow­ing con­cerns that too many of its eggs are in the one I/O bas­ket for their PD-1 pro­gram. And Mer­ck is go­ing af­ter more small- and mid-sized buy­outs to calm those fears.