As gene edit­ing ex­plodes, a new re­port from Gold­man says Chi­nese groups are seiz­ing the lead on CRISPR and CAR-T stud­ies

Con­trary to what you might be­lieve, bio­phar­ma com­pa­nies in the US are not the lead­ers in clin­i­cal tri­als us­ing gene edit­ing tech. While a slate of US/Eu­ro­pean pi­o­neers have been lin­ing up their first hu­man tri­als, in­ves­ti­ga­tors in Chi­na are al­ready well ahead in test­ing CRISPR-edit­ed cells in hu­mans, ac­cord­ing to a deep dive on gene ther­a­pies from Gold­man Sachs an­a­lyst Salveen Richter.

“As of the end of Feb­ru­ary 2018,” Richter and her team re­port­ed, “there were nine reg­is­tered clin­i­cal stud­ies test­ing CRISPR-edit­ed cells to treat var­i­ous can­cers and HIV in­fec­tion in Chi­na, vs. on­ly one study in the U.S. All of the stud­ies were ini­ti­at­ed / spon­sored by top-tier pub­lic hos­pi­tals across Chi­na, and >80 pa­tients were re­port­ed as be­ing treat­ed by these in­ves­ti­ga­tion­al genome med­i­cines.”

Last year alone, Richter adds, the Na­tion­al Nat­ur­al Sci­ence Foun­da­tion of Chi­na pro­vid­ed fund­ing for more than 90 CRISPR projects — more than 270 over the last 4 years. With no reg­u­la­tions on these gene edit­ing projects, hos­pi­tals in Chi­na in par­tic­u­lar have been quick to ac­cel­er­ate their CRISPR work, a sit­u­a­tion that might change soon if Chi­na’s main drug agency steps in and ap­plies the brakes, as Gold­man ex­pects will hap­pen.

And Chi­nese in­ves­ti­ga­tors are al­ready ri­val­ing the US in the to­tal num­ber of CAR-T stud­ies that are be­ing done. As of Feb­ru­ary, Gold­man Sachs count­ed 153 CAR-T tri­als in Chi­na, com­pared to 164 in the US, 73 in Eu­rope and 56 in all of the rest of the world com­bined.

The one com­pa­ny fur­thest out in front is Leg­end Biotech­nol­o­gy, which J&J paid $350 mil­lion to part­ner with as it en­tered the glob­al race to de­vel­op new ther­a­pies in the wake of his­toric ap­provals for Kym­ri­ah (No­var­tis) and Yescar­ta (Gilead/Kite). And if these com­pa­nies and tri­als hit pay-dirt da­ta, as they promise to, Gold­man be­lieves that Chi­na will reap a con­sid­er­able ben­e­fit by sell­ing these ther­a­pies at a much low­er rate than the pi­o­neers on the mar­ket, spurring a sig­nif­i­cant amount of med­ical tourism.

What is this kind of mar­ket worth for the ri­vals look­ing to com­pete in it?

That de­pends on the sup­ply of pa­tients.

If your new genome med­i­cine ei­ther promis­es to cure a dis­ease or de­lay any fur­ther ther­a­py for a lengthy pe­ri­od of time, notes the Gold­man re­port, then your mar­ket could play out quick­ly as you race through the pa­tient pool that is avail­able. That’s what Gilead ex­pe­ri­enced when it came up with a pain­less cure for he­pati­tis C.

Not on­ly did the drugs from Gilead shrink the pool, Gold­man re­ports in a cold analy­sis of the num­bers, they al­so re­duced the num­ber of car­ri­ers present to keep spread­ing the dis­ease, fur­ther shrink­ing the mar­ket. From the re­port:

The po­ten­tial to de­liv­er “one shot cures” is one of the most at­trac­tive as­pects of gene ther­a­py, ge­net­i­cal­ly-en­gi­neered cell ther­a­py and gene edit­ing. How­ev­er, such treat­ments of­fer a very dif­fer­ent out­look with re­gard to re­cur­ring rev­enue ver­sus chron­ic ther­a­pies, par­tic­u­lar­ly in cer­tain dis­eases where it is pos­si­ble to cure a large pro­por­tion of the preva­lent pa­tient pool (or at least pre­vent an ad­di­tion­al dose from be­ing re­quired for an ex­tend­ed pe­ri­od). While this propo­si­tion car­ries tremen­dous val­ue for pa­tients and so­ci­ety, it could rep­re­sent a chal­lenge for genome med­i­cine de­vel­op­ers look­ing for sus­tained cash flow. Gilead is a case in point, where the suc­cess of its he­pati­tis C fran­chise has grad­u­al­ly ex­haust­ed the avail­able pool of treat­able pa­tients. 

The most lu­cra­tive dis­eases for these new cu­ra­tive ther­a­pies, Richter adds, would be big fields like he­mo­phil­ia or ar­eas where there’s a large sup­ply of new pa­tients each year — like can­cer. Spinal mus­cu­lar at­ro­phy, which af­flicts a stan­dard set of in­fants each year, is al­so vi­able. 

That may not be the kind of math that bio­phar­ma ex­ecs like to dis­cuss in pub­lic, but it’s cer­tain­ly the kind of equa­tions they re­view care­ful­ly while de­cid­ing how to spend R&D bud­gets.

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Tasly Bio­phar­ma pitch­es long-await­ed IPO — will it trig­ger an­oth­er $1B gold rush on HKEX?

In the run up to the Hong Kong stock ex­change’s an­tic­i­pat­ed rule change — open­ing the door for Chi­nese pre-rev­enue biotechs to go pub­lic clos­er to home — more than a year ago, Tasly Bio­phar­ma was one of the big play­ers whose ru­mored in­ter­est helped stoke en­thu­si­asm for the new list­ing venue. The com­pa­ny has since kept the drum­roll rum­bling in the back­ground, rais­ing a pre-IPO round and con­vinc­ing part­ner Trans­gene to swap own­er­ship in a joint ven­ture for eq­ui­ty. Now the oth­er shoe has fi­nal­ly dropped as ex­ecs out­line plans for a pipeline dom­i­nat­ed by car­dio­vas­cu­lar drugs.

Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three ma­jor buy­outs an­nounced: Take­da/Shire; Bris­tol-My­ers/Cel­gene and now Ab­b­Vie/Al­ler­gan. And with this lat­est deal it’s in­creas­ing­ly clear that the sharp fall from grace suf­fered by high-pro­file play­ers which have seen their share prices blast­ed has cre­at­ed an open­ing for the growth play­ers in big phar­ma to up their game — in sharp con­trast to the pop­u­lar bolt-on deals that have been dri­ving the growth strat­e­gy at No­var­tis, Mer­ck, Roche and oth­ers.

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SQZ, Ery­tech kick off $57M cell ther­a­py part­ner­ship; Jean-Paul Kress lands new CEO gig at Mor­phoSys

→ In a mar­riage of two tech­nolo­gies meant to make cell ther­a­pies more pow­er­ful, SQZ Biotech is team­ing up with France’s Ery­tech Phar­ma for a col­lab­o­ra­tion, with $57 mil­lion re­served for the first project and $50 mil­lion for each sub­se­quent ap­proval (prod­uct or in­di­ca­tion). Hav­ing ac­cess to Ery­tech’s method of fash­ion­ing ther­a­peu­tics from red blood cells, the Cam­bridge, MA-based com­pa­ny said, will am­pli­fy SQZ’s cell en­gi­neer­ing ca­pa­bil­i­ties and al­low them to de­vleop a new class of im­munomod­u­la­to­ry ther­a­pies. Its own tech — so far ap­plied in can­cer but al­so has po­ten­tial in di­a­betes — tem­po­rary dis­rupts the cell mem­brane by squeez­ing the cell, thus cre­at­ing a brief win­dow for tar­get ma­te­ri­als such as anti­gens to en­ter.

FDA re­jects Ac­er's rare dis­ease drug, asks for new tri­al — shares crater

Ac­er Ther­a­peu­tics’ bid to re­pur­pose celipro­lol — a be­ta-block­er on the mar­ket for hy­per­ten­sion — as a treat­ment for a rare, in­her­it­ed con­nec­tive tis­sue dis­or­der has hit a se­vere set­back. The New­ton, Mass­a­chu­setts-based com­pa­ny on Tues­day said the FDA re­ject­ed the drug and has asked for an­oth­er clin­i­cal tri­al.

The com­pa­ny’s shares $AC­ER cratered near­ly 77% to $4.47 in Tues­day morn­ing trad­ing.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

With 4 more biotech IPOs due to wrap up Q2, how is the class of 2019 far­ing?

With 22 biotech IPOs on the books and four more set to price in the last week of June, in­vest­ment ad­vis­er Re­nais­sance Cap­i­tal has tak­en the pulse of the re­cent rush.

By the IPO ex­perts’ count, 25 out of 32 health­care of­fer­ings this year have been from biotechs — dif­fer­ing slight­ly from Brad Lon­car’s tal­ly — and the over­all pic­ture is one of un­der­per­for­mance. While they av­er­aged a first-day re­turn of 9.0%, col­lec­tive­ly they have trad­ed down to a 5.9% re­turn. Turn­ing Point $TP­TX and Cor­texyme $CRTX emerged on top at the half-year mark, ris­ing 135% and 109% re­spec­tive­ly.

Dean Hum. Nasdaq via YouTube

Gen­fit goes to Chi­na with a deal worth up to $228M for NASH drug

Fresh off the high of its Nas­daq IPO de­but, and the low of com­par­isons to Cymabay — whose NASH drug re­cent­ly stum­bled — Gen­fit on Mon­day un­veiled an up to $228 mil­lion deal with transpa­cif­ic biotech Terns Phar­ma­ceu­ti­cals to de­vel­op its flag­ship ex­per­i­men­tal liv­er drug — elafi­bra­nor — in Greater Chi­na.

The deal comes weeks af­ter Gen­fit $GN­FT is­sued a fiery de­fense of its dual PPAR ag­o­nist elafi­bra­nor, when com­peti­tor Cymabay’s PPARδ ag­o­nist, se­ladel­par, fiz­zled in a snap­shot of da­ta from an on­go­ing mid-stage tri­al. The main goal at the end of 12 weeks was for se­ladel­par to in­duce a sta­tis­ti­cal­ly sig­nif­i­cant im­prove­ment in liv­er fat con­tent, but da­ta showed that pa­tients on the place­bo ac­tu­al­ly per­formed bet­ter.