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.

The Big Phar­ma dis­card pile; Lay­offs all around while some biotechs bid farewell; New Roche CEO as­sem­bles top team; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

With earnings seasons in full swing, we’ve listened in on all the calls so you don’t have to. But news is popping up from all corners, so make sure you check out our other updates, too.

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Sen. Ron Wyden (D-OR) (Francis Chung/E&E News/Politico via AP Images)

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Senate Finance Chair Ron Wyden (D-OR) this week sent a letter to the head of the Centers for Medicare & Medicaid Services seeking an update on how and when new inflation-linked rebates will take effect for drugs that see major price spikes.

The newly signed Inflation Reduction Act requires manufacturers to pay a rebate to Medicare when they increase drug prices faster than the rate of inflation.

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Trodelvy notch­es a win in most com­mon form of breast can­cer

Following a promise last year to go “big and fast in breast cancer,” Gilead has secured a win for Trodelvy in the most common form.

The drug was approved to treat HR-positive, HER2-negative breast cancer patients who’ve already received endocrine-based therapy and at least two other systemic therapies for metastatic cancer, Gilead announced on Friday.

Trodelvy won its first indication in metastatic triple-negative breast cancer back in 2020, and has since added urothelial cancer to the list. HR-positive HER2-negative breast cancer accounts for roughly 70% of new breast cancer cases worldwide per year, according to senior VP of oncology clinical development Bill Grossman, and many patients develop resistance to endocrine-based therapies or worsen on chemotherapy.

Sanofi scraps PhI­II tri­al for Prin­cip­ia drug af­ter re­view­ing com­pe­ti­tion

Months after the FDA placed Phase III trials of Sanofi’s BTK inhibitor on hold, the company is winding down one of the studies.

Sanofi reported in its Q4 earnings that the URSA study “was discontinued after careful evaluation of the emerging competitive treatment landscape in” myasthenia gravis, a rare disease that causes muscle weakness.

The Phase III, placebo-controlled trial was testing tolebrutinib in patients with the moderate-to-severe form of the disease. It started in late 2021, according to records on clinicaltrials.gov, and was originally designed to recruit 154 participants who were receiving the standard of care.

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Raymond Stevens, Structure Therapeutics CEO

Be­hind Fri­day's $161M IPO: A star sci­en­tist, GPCR drug dis­cov­ery and a plan to chal­lenge phar­ma in di­a­betes

What does it take to pull off a $161 million biotech IPO these days?

In Structure Therapeutics’ case, it means having a star scientist co-founder paired with the computational drug discovery company Schrödinger, $198 million in private funding from blue-chip investors, almost six years of research work on G protein-coupled receptors and a slate of oral, small-molecule drugs, with an eye on the huge and growing diabetes and weight-loss market.

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Af­ter 13 years, Ramy Mah­moud steps in­to CEO seat at Opti­nose; Ru­pert Vessey set to ex­it Bris­tol My­ers in Ju­ly

After 13 years as president and COO at Optinose, Ramy Mahmoud has stepped into a new role as its CEO. He is taking the place of Peter Miller, who stepped down earlier this week, though Miller is still staying with the company as a consultant.

In 2010, the two business partners joined Optinose to take it in a new direction, transforming it from a delivery platform to product company. They previously worked together at Johnson & Johnson, when Miller was president at Janssen and Mahmoud headed medical affairs. Miller said after he learned about Optinose, “I did what I always do, which is find people smarter than me to talk with about the idea. And the first person I called was Ramy … and I said, ‘Hey, Ramy, what do you think of this technology?’”

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Ma­gen­ta halts stem cell work and may sell it­self fol­low­ing pa­tient death, clin­i­cal hold

Magenta Therapeutics said it is halting work on its stem cell transplant drug pipeline and may sell itself, a week after the company reported the death of a patient in an early stage trial of its antibody-drug conjugate.

The Cambridge, MA-based company said it will conduct a “review of strategic alternatives,” and that could include an “acquisition, merger, business combination, or other transaction.”

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How to use ex­ter­nal con­trols: FDA spells out think­ing in new draft guid­ance

The use of real-world evidence to inform the FDA’s decision-making continues apace, with the agency releasing new draft guidance yesterday on how sponsors can compare outcomes of trial participants receiving a test treatment with outcomes in a group of people external to the trial.

The practice of externally controlled trials is common, particularly in oncology or other difficult areas where it’s not ethical or feasible to use internal controls.

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The Big Phar­ma axe: Mer­ck cuts chikun­gun­ya vax, Bris­tol My­ers drops Cy­tomX-part­nered pro­gram, and more

As fourth quarter earnings come in, Big Pharmas are disclosing changes to their pipelines during their investor calls, and sometimes more quietly in presentation appendices.

Merck dropped its chikungunya vaccine candidate, which completed a Phase II study. Merck acquired the vaccine through its purchase of Themis Bioscience in 2020. In developing a vaccine for chikungunya, a mosquito-borne virus, Valneva is the frontrunner, as it submitted its vaccine to the FDA at the end of December.

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