Big Phar­ma’s busi­ness mod­el is bro­ken; New drug OKs plunged this year, high­light­ing an ug­ly re­al­i­ty

End­points as­sess­es the big bio­phar­ma R&D sto­ries of the week, with a lit­tle added com­men­tary on what they mean for the in­dus­try.

  Big Phar­ma’s busi­ness mod­el is bro­ken, so change it

When your ac­coun­tant tells you the busi­ness you’re run­ning is un­sus­tain­able, it’s a good idea to pay very, very close at­ten­tion to the de­tails. So it is with Big Phar­ma and drug de­vel­op­ment, a game which the largest play­ers in the in­dus­try have not mas­tered. De­loitte reck­ons that an al­ready bad ROI just got worse for the top 12 phar­ma com­pa­nies, and there are no signs that the num­bers are go­ing to get any bet­ter. So maybe it’s time that these big out­fits re­think how they’re run­ning R&D. What are they good at? Why in­vest heav­i­ly in ear­ly-stage re­search? Are they bet­ter at de­vel­op­ment? Aside from a few rare ex­cep­tions, there’s lit­tle ev­i­dence that any­one in this league has thought through the long-term con­se­quences of a lack of pro­duc­tiv­i­ty. It’s time to start, and come up with some­thing bold and new. The old busi­ness mod­el, where you con­tin­u­al­ly hike the price of ag­ing ther­a­peu­tics, won’t cut it go­ing for­ward.

  New drug OKs plunged this year, high­light­ing an ug­ly re­al­i­ty

Speak­ing of poor pro­duc­tiv­i­ty, we’re see­ing one of the worst years in the past decade for new drug OKs, a fact high­light­ed in John Jenk­ins’ lat­est — and last — an­nu­al re­view as head of the Of­fice of New Drugs. When a year goes by and some of your biggest de­vel­op­ers whiff on new drug ap­provals, it adds to the pres­sure for some kind of fun­da­men­tal change. The FDA in part blamed its will­ing­ness to beef up 2015 num­bers with ac­cel­er­at­ed ap­provals ahead of their 2016 PDU­FA dates, but log­ic would in­di­cate that you could make that up with some snap­py de­ci­sions at the end of 2016, and we’re not see­ing a whole lot of that. In­ter­est­ing­ly, no one can pin this short­fall on reg­u­la­tors, who have en­gi­neered a sea change in the way many drugs are re­viewed. When you re­move one pos­si­ble el­e­ment from an equa­tion, it’s eas­i­er to gain some clar­i­ty on where the prob­lem is. And at the risk of re­peat­ing my­self, that prob­lem has come home to roost.

  Sarep­ta sparked a pay­er re­volt, and the FDA needs to pay at­ten­tion

There’s fresh ev­i­dence this week that quite a few pay­ers will do every­thing pos­si­ble to avoid pay­ing for Sarep­ta’s Ex­ondys 51. And why should they cov­er an ex­per­i­men­tal drug that was giv­en an ac­cel­er­at­ed ap­proval based on the opin­ion of a sin­gle FDA ex­ec­u­tive? The FDA set the stage for a pay­er re­volt and it should think through how it plans to han­dle fu­ture cas­es — which are cer­tain to come along. I’m not op­posed to ac­cel­er­at­ed ap­provals based on lit­tle ev­i­dence when the pa­tient pop­u­la­tion faces a slow death and there are no ap­proved ther­a­pies. And there are good rea­sons for mak­ing Ex­ondys 51 avail­able. A spe­cial ap­proval cat­e­go­ry for com­pas­sion­ate use makes sense. But there’s no rea­son why com­pa­nies should be al­lowed to make mon­ey on those ap­provals. If you want to make mon­ey on drugs, you have to es­tab­lish the safe­ty/ben­e­fit pro­file first. End of sto­ry.

  Maybe the odds will ac­tu­al­ly fa­vor New York’s big gam­ble on biotech

I’ve seen state ini­tia­tives aimed at spark­ing a biotech rev­o­lu­tion come, and I’ve seen them go, usu­al­ly af­ter fail­ing woe­ful­ly at cre­at­ing any­thing like the num­ber of jobs that were promised. (Hel­lo Flori­da, Cal­i­for­nia and Texas.) This week, New York, state and city, came up with more than a bil­lion dol­lars worth of in­cen­tives to do the same thing. And maybe, just maybe, it’s dif­fer­ent this time. It’s im­por­tant to re­call that Mass­a­chu­setts saw the birth of a mas­sive biotech hub af­ter lo­cal gov­ern­ments had gained the rep for be­ing hos­tile to new busi­ness­es. When it added in­cen­tives to fos­ter the in­dus­try, the growth in life sci­ences was al­ready well en­trenched, for rea­sons that had noth­ing to do with gov­ern­ment plan­ning. The changes in at­ti­tude and pol­i­cy made a pos­i­tive, sig­nif­i­cant im­prove­ment, but they did not cre­ate Kendall Square. What I’m hop­ing is that the ba­sic el­e­ments need­ed to cre­ate a biotech re­nais­sance are al­ready in place in New York. The sci­ence is out­stand­ing. There’s space and grow­ing streams of ven­ture cash. And there’s plen­ty of tal­ent avail­able in the coun­try to helm a fleet of star­tups. So, fin­gers crossed. A ri­val hub is just what the US needs to keep the juices flow­ing.

  Biotech de­ja vu: That big R&D over­haul sto­ry isn’t go­ing away

R&D over­hauls are not a trend. They are a per­ma­nent con­di­tion, as Bris­tol-My­ers demon­strat­ed with its an­nounce­ment this week that it is rip­ping up its old struc­ture and cre­at­ing a new one. Jobs will end. Jobs will move. New jobs will be­come avail­able. And they’ll all be that much clos­er to the biggest hubs as the con­cen­tra­tion of R&D fire­pow­er con­tin­ues. I’ve been see­ing this move­ment play out for the past decade as Roche, Mer­ck, Pfiz­er and on and on all did the same thing. In some cas­es, com­pa­nies are in their sec­ond or third re­vamps. Job se­cu­ri­ty in R&D is over, un­for­tu­nate­ly. But it all makes biotech look all that much more ap­peal­ing. If you’re gam­bling every­thing on a project, it’s like­ly to be more fun and lu­cra­tive at a start­up. The tal­ent will con­tin­ue to head in­to biotech, and away from Big Bio­phar­ma. Where do you think that leads?

UP­DAT­ED: Roche bags 'break­through' an­ti-fi­bro­sis drug in $1.4B biotech buy­out deal

Roche is snapping up a “breakthrough” anti-fibrotic drug in a $1.4 billion buyout.

The pharma giant announced Friday that it is acquiring Promedior, primarily to get its hands on PRM-151, a recombinant form of human pentraxin-2 (PTX-2) protein that has nailed down mid-stage clinical data on idiopathic pulmonary fibrosis and demonstrating its potential for a range of fibrotic conditions.

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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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Federal Trade Commission commissioner Rohit Chopra testifies on Capitol Hill (AP Photo/Susan Walsh)

FTC clears Bris­tol-My­ers’ $74B deal to buy Cel­gene — but Dems sig­nal a po­ten­tial hard shift against Big Phar­ma M&A

Bristol-Myers Squibb’s record $74 billion takeover of Celgene is a done deal. And it will all be over — except for the lingering complaints from die-hard Celgene investors — on Wednesday.

Like much else that’s going on in Washington these days, the vote among the 5 FTC commissioners split along party lines, with the 3 Republicans voting to clear the way and the 2 Democrats steamed over what they see as a major M&A move that will lessen competition and innovation. And that split has big implications for the M&A side of the business if the Dems take the White House in 2020.

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No­var­tis spin­out’s first an­ti-ag­ing PhI­II is a flop, so now they’ll turn to Parkin­son’s chal­lenge as shares wilt

Novartis spinout resTORbio is grappling with the collapse of its lead clinical program this morning — an anti-aging R&D failure that will badly damage their rep in the field.

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BeiGene CEO John Oyler at an Endpoints event in Shanghai, October 2018 (Credit: Endpoints News/PharmCube)

UP­DAT­ED: In a first, FDA green-lights use of a Chi­nese built can­cer ther­a­py — and more are com­ing

Weeks after Amgen took a $2.7 billion stake in BeiGene, the Beijing-based biotech has secured its first-ever FDA approval for zanubrutinib, a BTK inhibitor, months ahead of schedule.

BeiGene’s drug, branded as Brukinsa, has secured accelerated approval for adult patients with mantle cell lymphoma (MCL) — a typically aggressive, rare, form of blood cancer — who have received at least one prior therapy.

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What does $62B buy you these days? A lot, says Take­da ex­ecs as the phar­ma play­er promis­es a block­buster R&D fu­ture

First comes the $62 billion buyout. Then comes the asset auction and reorganization to pay down debt. Now comes the detailed pledge of a bigger, brighter future in drug development.

That’s where Takeda finds itself on R&D day today, about 11 months after closing on their Shire acquisition. R&D chief Andy Plump is joining CEO Christophe Weber and other top members of the team to outline a new set of priorities in the greatly expanded pipeline at Takeda, which has jumped into the top ranks of the world’s pharma giants in the wake of the Shire deal.

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GSK's asth­ma bi­o­log­ic Nu­cala scores in rare blood dis­or­der study

GlaxoSmithKline’s asthma drug Nucala, which received a resounding FDA rejection for use in chronic obstructive pulmonary disease (COPD) last year, has shown promise in a rare blood disorder.

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Mer­ck buys a fledg­ling neu­rode­gen­er­a­tive biotech spawned by an old GSK dis­cov­ery al­liance. What’s up with that?

Avalon Ventures chief Jay Lichter has a well-known yen for drug development programs picked up in academia. And what he found in Haoxing Xu’s lab at the University of Michigan pricked his interest enough to launch one of his umbrella biotechs in San Diego.

Xu’s work laid the foundation for Avalon to launch Calporta, which has been working on finding small molecule agonists of TRPML1 (transient receptor potential cation channel, mucolipin subfamily, member 1) for lysosomal storage disorders. And that pathway, they believe, points to new approaches on major market neurodegenerative diseases like Parkinson’s, ALS and Alzheimer’s.

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No­var­tis scores its lat­est FDA OK — this time for a new sick­le cell dis­ease drug picked up in a $665M deal

Novartis’ decision to buy Oklahoma-based biotech Selexys 3 years ago for up to $665 million has paid off with an FDA approval today.

Blessed with the FDA’s breakthrough drug designation for a speedy review, the pharma giant has pinned down an approval for crizanlizumab, a new therapy designed to reduce the frequency of painful incidents of vaso-occlusive crises among sickle cell disease patients 16 or older.

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