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.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

Endpoints News

Basic subscription required

Unlock this story instantly and join 55,100+ biopharma pros reading Endpoints daily — and it's free.

Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

Endpoints News

Basic subscription required

Unlock this story instantly and join 55,100+ biopharma pros reading Endpoints daily — and it's free.

Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

Endpoints News

Basic subscription required

Unlock this story instantly and join 55,100+ biopharma pros reading Endpoints daily — and it's free.

Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

Endpoints News

Basic subscription required

Unlock this story instantly and join 55,100+ biopharma pros reading Endpoints daily — and it's free.

On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

Endpoints News

Basic subscription required

Unlock this story instantly and join 55,100+ biopharma pros reading Endpoints daily — and it's free.

Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.