Bax­al­ta in hand, Shire dumps drug pro­grams in hunt for $210M in R&D cuts

Now that Shire has closed on its buy­out deal for Bax­al­ta, the com­pa­ny has al­ready trimmed a slate of drug de­vel­op­ment pro­grams as it seeks to chop out a to­tal of $210 mil­lion in R&D costs from the com­bined op­er­a­tion over three years. And among the first to go was a mid-stage he­pati­tis B gene ther­a­py that didn’t make the cut in an in­creas­ing­ly com­pet­i­tive field.

Shire CEO Flem­ming Orn­skov

The ex­ec­u­tive team — led by CEO Flem­ming Orn­skov — laid out a new, big­ger tar­get for cut­ting costs, up­ping the ante from the $500 mil­lion in “syn­er­gies” pegged at the time the deal was an­nounced to $700 mil­lion now that they’ve had a chance to con­sid­er all the prospects. And 30% of that — rough­ly $210 mil­lion – is com­ing straight out of re­search.

That’s the kind of mes­sage that plays well on Wall Street, where Shire’s shares surged 4% by the end of the day.

Speak­ing to an­a­lysts on Tues­day morn­ing, the ex­ec­u­tive team talked up the com­bined pipeline of 40 pro­grams as Orn­skov high­light­ed “the gems in the pipeline” that would con­tin­ue to get close at­ten­tion.

Those gems in­clud­ed three late-stage pro­grams: SHP643 for HAE;  SHP620 for CMV, which starts in H2; and SHP647, an IBD drug re­cent­ly in-li­censed from Pfiz­er, which dubbed it PF-00547659.

R&D chief Phil Vick­ers not­ed that their pipeline re­view un­veiled 8 pro­grams for the chop­ping block. Most of those are in ear­ly stage de­vel­op­ment, he added, but Shire spot­light­ed three Phase II pro­grams that were cut out, in­clud­ing one for SHP625 (the old LUM001) in adults. 625 has won break­through drug sta­tus at the FDA, but Shire has had to con­tend with dis­cour­ag­ing da­ta from the drug and will fo­cus on the pe­di­atric pop­u­la­tion.

Shire is al­so cut­ting the gene ther­a­py pro­gram for he­mo­phil­ia B in­her­it­ed from the Bax­al­ta ac­qui­si­tion. And that will come as wel­come news to Spark ($ONCE) and its ri­vals as they hus­tle along their own he­mo­phil­ia B drugs. Bio­Marin an­nounced stel­lar re­sults from a proof-of-con­cept study in he­mo­phil­ia A a few days ago, high­light­ing the com­pe­ti­tion for best re­sults.

Vick­ers ex­plained the de­ci­sion in the call with an­a­lysts.

“For the lead com­pound, which was Bax 335, there was ex­cel­lent ex­pres­sion, ac­tu­al­ly. Ex­cel­lent ex­pres­sion seen with that par­tic­u­lar vec­tor. It’s an AAV8 vec­tor, so the ade­n­ovi­ral vec­tor. We were very pleased to get ac­cess to. So the ex­pres­sion was good but it was a lit­tle in­con­sis­tent be­tween dif­fer­ent pa­tients, and with time for some pa­tients, the lev­el of ex­pres­sion de­creased. And we think that’s a very im­por­tant thing to fac­tor in when con­sid­er­ing all gene ther­a­pies, is the ex­pres­sion go­ing to go down over time.

“So it did go down and we think it’s very im­por­tant for the com­mu­ni­ty out there for us to bring for­ward the high­est qual­i­ty as­set we think we pos­si­bly can in this space. So we went over some of the tech­ni­cal rea­sons why we might be see­ing that in­con­sis­ten­cy and some­what of a de­crease in ex­pres­sion over time. And, have some fac­tors that we think could ac­count for that and we’re build­ing those in­to the de­sign and the con­structs that we’re us­ing for the gene ther­a­py. So it’s re­al­ly not any de­crease in our com­mit­ment to the pro­gram. It’s just that we’re go­ing to change the mol­e­cule and move for­ward for the com­pound that’s now in pre­clin­i­cal. And the fac­tor VI­II gene ther­a­py pro­gram goes for­ward un­af­fect­ed.”

Leerink’s Michael Schmidt had this to say:

“This is in­cre­men­tal­ly pos­i­tive for QURE, since com­pe­ti­tion in he­mo­phil­ia B has formed a ma­jor over­hang on the stock. While sev­er­al oth­er gene ther­a­py pro­grams are cur­rent­ly in clin­i­cal dev’t (e.g. ONCE, DMTX, SG­MO), and ONCE’s has gen­er­at­ed high­ly im­pres­sive clin­i­cal da­ta to date we be­lieve that it is un­like­ly that one sin­gle gene ther­a­py prod­uct will be used to treat all he­mo­phil­ia B due to the prod­uct-spe­cif­ic lim­i­ta­tions (e.g. neu­tral­iz­ing an­ti­bod­ies).”

Asked whether the com­pa­ny could still ex­pect to make a big splash in im­muno-on­col­o­gy, where there’s been a fren­zy of deal mak­ing and de­vel­op­ment work, Orn­skov was clear that Shire would take a very mea­sured, “step-by-step” ap­proach to build­ing a new fran­chise.

(So don’t look for any dra­mat­ic ac­tions in that field.)

“I think that this is not a com­mit­ment at this stage for Shire to be spend­ing sig­nif­i­cant re­sources on re­search or com­mer­cial­ly,” Orn­skov not­ed.

Shire has un­der­gone a painful pipeline re­view be­fore, tak­ing a hard look at its ex­per­i­men­tal as­sets when the com­pa­ny was put through his “One Shire” ini­tia­tive in­volved in bet­ter in­te­grat­ing work at the com­pa­ny. And Shire down­sized op­er­a­tions in Penn­syl­va­nia as Orn­skov con­cen­trat­ed a larg­er share of its re­search in Mass­a­chu­setts.

Con­quer­ing a silent killer: HDV and Eiger Bio­Phar­ma­ceu­ti­cals

Hepatitis delta, also known as hepatitis D, is a liver infection caused by the hepatitis delta virus (HDV) that results in the most severe form of human viral hepatitis for which there is no approved therapy.

HDV is a single-stranded, circular RNA virus that requires the envelope protein (HBsAg) of the hepatitis B virus (HBV) for its own assembly. As a result, hepatitis delta virus (HDV) infection occurs only as a co-infection in individuals infected with HBV. However, HDV/HBV co-infections lead to more serious liver disease than HBV infection alone. HDV is associated with faster progression to liver fibrosis (progressing to cirrhosis in about 80% of individuals in 5-10 years), increased risk of liver cancer, and early decompensated cirrhosis and liver failure.
HDV is the most severe form of viral hepatitis with no approved treatment.
Approved nucleos(t)ide treatments for HBV only suppress HBV DNA, do not appreciably impact HBsAg and have no impact on HDV. Investigational agents in development for HBV target multiple new mechanisms. Aspirations are high, but a functional cure for HBV has not been achieved nor is one anticipated in the forseeable future. Without clearance of HBsAg, anti-HBV investigational treatments are not expected to impact the deadly course of HDV infection anytime soon.

No­var­tis is ax­ing 150 ear­ly dis­cov­ery jobs as CNI­BR shifts fo­cus to the de­vel­op­ment side of R&D

Novartis is axing some 150 early discover jobs in Shanghai as it swells its staff on the drug development side of the equation in China. And the company is concurrently beefing up its investment in China’s fast-growing biotech sector with a plan to add to its investments in local VCs.

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Elizabeth Warren speaks during the Nevada Democrats' "First in the West" event at Bellagio Resort & Casino on November 17, 2019 in Las Vegas, Nevada (Getty Images)

Eliz­a­beth War­ren pro­pos­es us­ing com­pul­so­ry li­cens­ing, an­titrust ac­tions to break bio­phar­ma’s con­trol of drug pric­ing — and here are the block­busters she’s tar­get­ing first

Nancy Pelosi’s drug pricing bill may have sparked some industrial strength headaches on the money side of biopharma, but Elizabeth Warren seems determined to become biopharma’s Nightmare on Pennsylvania Avenue.

Warren, one of the top-ranked candidates for the Democratic presidential nomination backing Medicare for all, is circulating a new plan that promises to break the industry’s grip on drug prices — and she has some very specific examples of how she would do it.

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Mer­ck’s $1B cash gam­ble pays off with a sur­pris­ing PhI­II car­dio suc­cess for Bay­er’s heart drug veri­ciguat

More than 3 years after Merck stepped up and paid $1 billion in cold, hard cash to gain the US commercial rights to Bayer’s high-risk heart drug vericiguat in a broad-ranging cardio alliance, the partners say their Phase III study has come through with promising data and a date with regulators.
We don’t have the data, and won’t until they put it out at an upcoming scientific session, but Merck touted the results, saying that their big Phase III VICTORIA study hit the primary endpoint  — with vericiguat combined with available therapies reducing “the risk of the composite endpoint of heart failure hospitalization or cardiovascular death in patients with worsening chronic heart failure with reduced ejection fraction (HFrEF) compared to placebo when given in combination with available heart failure therapies.”
Depending on the hard data, and how it breaks out with the combinations used, this drug could pose a threat to Novartis’ blockbuster drug Entresto, currently at $1.6 billion while analysts expect peak sales to hit $4 billion.
The drug is a soluble guanylate cyclase (sGC) stimulator, which Bayer and Merck have had high hopes for. Evidently, so did cardiologists. Cowen’s last analysis set potential sales at $400 million in 2024, but that number could go up significantly now.
Cowen’s Steve Scala noted this morning:
Vericiguat could be a lucrative product for Merck, and one with potentially under-appreciated value. At Cowen’s Therapeutics Conference in September 2019, 80% of specialists anticipated a positive result from VICTORIA whereas only 51% of investors shared this optimism.
Investigators recruited more than 5,000 patients at more than 600 centers in 42 countries for this study — one of the most expensive propositions in R&D. Millions of people in the US suffer from heart failure with reduced ejection fraction when the failing heart fails to contract properly to eject blood into the system. Bayer holds ex-US rights to the drug and also stands to earn cash from the $1.1 billion in milestones Merck agreed on for their collaboration.
Remarkably, the drug was pushed into Phase III despite failing the mid-stage trial — though investigators flagged a success at the high dose of 10 mg. In VICTORIA, researchers started patients at 2.5 mg and then titrated up to 5 and then 10 mg.

Alk­er­mes forges $950M biotech buy­out deal in a bold bet on an ear­ly-stage CNS drug plat­form

Alkermes $ALKS is investing $100 million cash and committing up to $850 million more in milestones in a big wager on a very early-stage CNS discovery platform. And the biotech is adding $20 million more to fund next year’s new research work on the platform it’s acquiring in today’s buyout with an eye to expanding the research work in oncology.

The biotech, helmed by Richard Pops, is buying Rodin Therapeutics, which had focused early on Alzheimer’s disease. Pops’ buyout, though, isn’t focused solely on the most troublesome sector in pharma R&D.

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(Image: Associated Press)

Amarin emerges from an ex­pert pan­el re­view with a clear en­dorse­ment for Vas­cepa and high odds of suc­cess when the FDA weighs in for­mal­ly

Several FDA experts who gathered Thursday to consider the landmark approval of Vascepa to reduce cardio events in an at-risk population voiced their unease about various aspects of the efficacy and safety data, or ultimately the population it should be used to treat. But the overwhelming belief that the data pointed to the drug’s benefit and clearly outweighed risks carried the day for Amarin.

The panel voted unanimously (16 to 0) to support the company’s positive data presentation — backing an OK for expanding the label to include reducing cardio risk. The vote points Amarin $AMRN down a short path to a formal decision by the FDA, with the odds heavily in its favor. Chances are the rest of the questions about the future of this drug will be hashed out in the label’s small print.

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Left to right: Arthur Pappas, Robert Nelsen, Peter Kolchinsky Doug Cole and David Beier

In rare po­lit­i­cal for­ay, top biotech in­vestors urge Con­gress to re­ject drug pric­ing bill

Thirteen of the top biotech venture capitalists in the country wrote a letter last week warning lawmakers that if Congress passes a drug pricing bill House Speaker Nancy Pelosi has put before lawmakers, they won’t be able to invest in biomedical research at their current rate, and patients will suffer.

“If policies such as those included within H.R. 3, the Lower Drug Costs Now Act, are passed, our ability to continue to invest in future biomedical innovation will be severely constrained, thus crushing the hopes of millions of patient waiting for the next breakthroughs to treat or cure their cancers, rare genetic diseases, Alzheimer’s, or other serious and life-threatening conditions,” they wrote in a letter addressed to the highest-ranking Democrats and Republicans in the House and Senate and acquired by Endpoints News. 

Dicer­na scores broad, 'rest of liv­er' deal with No­vo Nordisk, bag­ging $225M in cash to hit some 30 tar­gets with RNAi plat­form

Turns out Dicerna wasn’t done with deals yet after locking in $200 million upfront from Roche for a hepatitis B cocktail two weeks ago.

Novo Nordisk has signed on as the latest partner to its GalXC RNAi platform, handing over $175 million in cash to claim any and all targets of interest in liver-related cardio-metabolic diseases that are not already reserved in previous pacts. The Danish drugmaker — which has signaled its interest to expand considerably beyond its core diabetes franchise into areas like NASH — is also purchasing $50 million worth of Dicerna’s equity at a 25% premium of $21.93 per share. More research payments and milestones extending to the billions are on the line.

Gene ther­a­py wins the in­side track at EMA; PPD files for IPO

→ Gene therapy maker Orchard Therapeutics has been granted an accelerated assessment for OTL-200 by the EMA’s Committee for Medicinal Products for Human Use (CHMP). The gene therapy — in development in partnership with the San Raffaele-Telethon Institute for Gene Therapy (SR-Tiget) in Milan, Italy — being used towards the treatment of metachromatic leukodystrophy.

→ Pharmaceutical Product Development has announced that its parent company, PPD, Inc has submitted a draft to the SEC relating to the proposal of an IPO of the parent company’s common stock. Number of shares and price range have not yet been determined.