BIO tells SEC: do away with quar­ter­ly re­ports for small biotechs

Pres­i­dent Don­ald Trump last Au­gust asked the SEC to look in­to the fea­si­bil­i­ty of abol­ish­ing the quar­ter­ly re­port­ing re­quire­ment in fa­vor of a six-month sys­tem. The reg­u­la­tor re­cent­ly posed this ques­tion to BIO — the largest trade or­ga­ni­za­tion rep­re­sent­ing bio­phar­ma — whether a less fre­quent re­port­ing regime would work for its mem­bers, some of whom spend a for­tune over a decade be­fore their prod­ucts hit the mar­ket… if they ever do.

BIO re­spond­ed with a re­sound­ing yes. “(T)he cur­rent quar­ter­ly re­port­ing frame­work places an un­healthy em­pha­sis on meet­ing or ex­ceed­ing short-term fore­casts, which en­gen­ders an in­ef­fi­cient out­look on short-term re­sults. Due to the lengthy time­line for po­ten­tial­ly life-sav­ing drug dis­cov­ery, which av­er­ages 10-15 years, biotech com­pa­nies and their in­vestors would be bet­ter served by a less fre­quent (e.g. semi­an­nu­al) re­port­ing regime that pri­or­i­tizes long-term val­ue cre­ation,” the or­ga­ni­za­tion said in ear­li­er this month.

Bri­an Sko­r­ney

Baird’s Bri­an Sko­r­ney took is­sue with BIO’s claim that quar­ter­ly re­ports fo­cus on the short-term over the long term. “A myr­i­ad of com­pa­nies in the in­dus­try have shown time and again that they need to held to short term oblig­a­tions and mile­stones or will oth­er­wise sac­ri­fice share­hold­er cap­i­tal on garbage un­der the guise of long-term strat­e­gy. In many ways I think biotech com­pa­nies are not held to a high enough stan­dard of dis­clo­sure and at least, in some re­spect, manda­to­ry quar­ter­ly fil­ings re­quire com­pa­nies to go through the ex­er­cise of rig­or­ous­ly do­ing some in­ter­nal checks and re­port­ing those to the pub­lic. I wor­ry that re­lax­ing SEC dis­clo­sure stan­dards could lead to more shenani­gans as com­pa­nies feel less over­sight.”

Small­er re­port­ing com­pa­nies and emerg­ing growth com­pa­nies, BIO sug­gest­ed, should re­port on a “less fre­quent (e.g. semi­an­nu­al) ba­sis while pre­serv­ing the flex­i­bil­i­ty to adopt more fre­quent (e.g. quar­ter­ly) re­port­ing as they ad­vance to­ward com­mer­cial stage.”

In­stead, Sko­r­ney ar­gued in fa­vor of elim­i­nat­ing quar­ter­ly fi­nan­cial fil­ings:

In ex­change, they should be re­quired to dis­close full clin­i­cal da­ta sets with­in 45 days of re­ceipt and com­plete reg­u­la­to­ry com­mu­ni­ca­tions with­in 45 days of re­ceipt. This is what we re­al­ly want in­fo-wise any­way, and frankly, com­pa­nies are held to a very min­i­mal stan­dard in terms of rig­or of these dis­clo­sures.

Since 2013, the Eu­ro­pean Com­mis­sion has erad­i­cat­ed the re­quire­ment of quar­ter­ly re­ports, say­ing it posed an un­jus­ti­fied bur­den on small and medi­um-sized com­pa­nies. In the Unit­ed States, it has re­mained in­tact since its in­tro­duc­tion in 1970.

The re­sis­tance to quar­ter­ly re­port­ing in the US is hard­ly new.

Crit­ics have long ar­gued that the process is ar­du­ous, cost­ly and de­tracts com­pa­nies from fo­cus­ing on the long term, and dis­in­cen­tivize firms from go­ing pub­lic. In 2016, a coali­tion of in­flu­en­tial busi­ness lead­ers in­clud­ing JP Mor­gan’s Jamie Di­mon and Black­rock’s Lar­ry Fink, as­sert­ed that a “com­pa­ny should not feel ob­lig­at­ed to pro­vide quar­ter­ly earn­ings guid­ance – and should de­ter­mine whether pro­vid­ing quar­ter­ly earn­ings guid­ance for the com­pa­ny’s share­hold­ers does more harm than good.”

Mean­while, sup­port­ers of quar­ter­ly re­ports ar­gue that they en­hance trans­paren­cy, and that longer du­ra­tions be­tween re­ports in­crease the like­li­hood of in­sid­er trad­ing.

BIO’s strat­e­gy won the en­dorse­ment of Jon­ah Meer, chief and CFO of Qrons — a small biotech de­vel­op­ing a ther­a­py for trau­mat­ic brain in­jury.

Jon­ah Meer

“While I am a be­liev­er in trans­paren­cy…there is no need to have a quar­ter­ly re­port, which is very repet­i­tive to pri­or re­ports and does not add much — to those who in fact read the re­port — a mi­nus­cule num­ber of in­vestors. Bear in mind there is of­ten no an­a­lyst cov­er­age for our type of stock — so it’s not even be­ing pro­duced to be an­a­lyzed by the street. A com­pa­ny will know if in­vestors are look­ing for more in­fo and quar­ter­lies and would adapt on their own vo­li­tion.”

For John Maxwell, CFO of drug de­liv­ery com­pa­ny Aque­s­tive Ther­a­peu­tics, quar­ter­ly re­ports set up un­re­al­is­tic ex­pec­ta­tions. “What we’ve ob­served is that quar­ter­ly re­port­ing can some­times cre­ate the ex­pec­ta­tion that ma­jor com­pa­ny de­vel­op­ments should hap­pen quar­ter by quar­ter…doing se­mi-an­nu­al re­port­ing would re­duce the fo­cus on quar­ter­ly num­bers and put more fo­cus on pipeline de­vel­op­ments. That could make sense for both us and our in­vestors.”


Im­age: Kristi Blokhin Shut­ter­stock

Nick Leschly via Getty

UP­DAT­ED: Blue­bird shares sink as an­a­lysts puz­zle out $1.8M stick­er shock and an un­ex­pect­ed de­lay

Blue­bird bio $BLUE has un­veiled its price for the new­ly ap­proved gene ther­a­py Zyn­te­glo (Lenti­Glo­bin), which came as a big sur­prise. And it wasn’t the on­ly un­ex­pect­ed twist in to­day’s sto­ry.

With some an­a­lysts bet­ting on a $900,000 price for the β-tha­lassemia treat­ment in Eu­rope, where reg­u­la­tors pro­vid­ed a con­di­tion­al ear­ly OK, blue­bird CEO Nick Leschly said Fri­day morn­ing that the pa­tients who are suc­cess­ful­ly treat­ed with their drug over 5 years will be charged twice that — $1.8 mil­lion — on the con­ti­nent. That makes this drug the sec­ond most ex­pen­sive ther­a­py on the plan­et, just be­hind No­var­tis’ new­ly ap­proved Zol­gens­ma at $2.1 mil­lion, with an­a­lysts still wait­ing to see what kind of pre­mi­um can be had in the US.

Ted Love. HAVERFORD COLLEGE

Glob­al Blood Ther­a­peu­tics poised to sub­mit ap­pli­ca­tion for ac­cel­er­at­ed ap­proval, with new piv­otal da­ta on its sick­le cell dis­ease drug

Global Blood Therapeutics is set to submit an application for accelerated approval in the second-half of this year, after unveiling fresh data from a late-stage trial that showed just over half the patients given the highest dose of its experimental sickle cell disease drug experienced a statistically significant improvement in oxygen-wielding hemoglobin, meeting the study's main goal.

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Gene ther­a­pies seize the top of the list of the most ex­pen­sive drugs on the plan­et — and that trend has just be­gun

Anyone looking for a few simple reasons why the gene therapy field has caught fire with the pharma giants need only look at the new list of the 10 most expensive therapies from GoodRx.

Two recently approved gene therapies sit atop this list, with Novartis’ Zolgensma crowned the king of the priciest drugs at $2.1 million. Right below is Luxturna, the $850,000 pioneer from Spark, which Roche is pushing hard to acquire as it adds a gene therapy group to the global mix.

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News­mak­ers at #EHA19: Re­gen­eron, Ar­Qule track progress on re­sponse rates

Re­gen­eron’s close­ly-watched bis­pe­cif­ic con­tin­ues to ring up high re­sponse rates

Re­gen­eron’s high-pro­file bis­pe­cif­ic REGN1979 is back in the spot­light at the Eu­ro­pean Hema­tol­ogy As­so­ci­a­tion sci­en­tif­ic con­fab. And while the stel­lar num­bers we saw at ASH have erod­ed some­what as more blood can­cer pa­tients are eval­u­at­ed, the re­sponse rates for this CD3/CD20 drug re­main high.

A to­tal of 13 out of 14 fol­lic­u­lar lym­phomas re­spond­ed to the drug, a 93% ORR, down from 100% at the last read­out. In 10 out of 14, there was a com­plete re­sponse. In dif­fuse large B-cell lym­phoma the re­sponse rate was 57% among pa­tients treat­ed at the 80 mg to 160 mg dose range. They were all com­plete re­spons­es. And 2 of these Cars were for pa­tients who had failed CAR-T ther­a­py.

Neil Woodford, Woodford Investment Management via YouTube

Un­der siege, in­vest­ment man­ag­er Wood­ford faces an­oth­er in­vest­ment shock

Em­bat­tled UK fund man­ag­er Neil Wood­ford — who has con­tro­ver­sial­ly blocked in­vestors from pulling out from his flag­ship fund to stem the blood­let­ting, af­ter a slew of dis­ap­point­ed in­vestors fled fol­low­ing a se­ries of sour bets — is now pay­ing the price for his ac­tions via an in­vestor ex­o­dus on an­oth­er fund.

Har­g­reaves Lans­down, which has in the past sold and pro­mot­ed the Wood­ford funds via its re­tail in­vest­ment plat­form, has re­port­ed­ly with­drawn £45 mil­lion — its en­tire po­si­tion — from the in­vest­ment man­ag­er’s In­come Fo­cus Fund.

J&J gains an en­thu­si­as­tic en­dorse­ment from Pres­i­dent Don­ald Trump for their big new drug Spra­va­to

Pres­i­dent Don­ald Trump has lit­tle love for Big Phar­ma, but there’s at least one new drug that just hit the mar­ket which he is en­am­ored with.

Trump, ev­i­dent­ly, has been read­ing up on J&J’s new an­ti-de­pres­sion drug, Spra­va­to. And the pres­i­dent — who of­ten likes to break out in­to a full-throat­ed at­tack on greedy drug­mak­ers — ap­par­ent­ly en­thused about the ther­a­py in a meet­ing with of­fi­cials of Vet­er­ans Af­fairs, which has long grap­pled with de­pres­sion among vet­er­ans.

In a boost to Rit­ux­an fran­chise, Roche nabs quick ap­proval for po­latuzum­ab ve­dotin

Roche’s lat­est an­ti­body-drug con­ju­gate has crossed the FDA fin­ish line, gain­ing an ac­cel­er­at­ed ap­proval a full two months ahead of sched­ule.

Po­livy, or po­latuzum­ab ve­dotin, is a first-in-class drug tar­get­ing CD79b — a pro­tein promi­nent in B-cell non-Hodgkin lym­phoma. It will now be mar­ket­ed for dif­fuse large B-cell lym­phoma as part of a reg­i­men that al­so in­cludes the chemother­a­py ben­damus­tine and a ver­sion of rit­ux­imab (Rit­ux­an).

An in­censed Cat­a­lyst Phar­ma sues the FDA, ac­cus­ing agency of bow­ing to po­lit­i­cal pres­sure and break­ing fed­er­al law

Af­ter hint­ing it was ex­plor­ing the le­gal­i­ty of the FDA’s ap­proval of a ri­val drug from fam­i­ly-run com­pa­ny Ja­cobus Phar­ma­ceu­ti­cals, Cat­a­lyst Phar­ma­ceu­ti­cals on Wednes­day filed a law­suit against the health reg­u­la­tor — ef­fec­tive­ly ac­cus­ing the agency of bow­ing to po­lit­i­cal pres­sure sur­round­ing sky­rock­et­ing drug prices.

Be­fore Cat­a­lyst’s Fir­dapse (which car­ries an av­er­age an­nu­al list price of $375,000) was sanc­tioned for use in Lam­bert-Eaton myas­thenic syn­drome (LEMS) by the FDA, hun­dreds of pa­tients had been able to ac­cess a sim­i­lar drug from com­pound­ing phar­ma­cies for a frac­tion of the cost, or Ja­cobus’ for free, as part of an FDA-rat­i­fied com­pas­sion­ate use pro­gram. But the ap­proval of the Cat­a­lyst drug — ac­com­pa­nied by mar­ket ex­clu­siv­i­ty span­ning sev­en years — ef­fec­tive­ly pre­clud­ed Ja­cobus and com­pound­ing phar­ma­cies from sell­ing their ver­sions.

Plagued by de­lays, As­traZeneca HQ costs soar to £750M as it edges to­ward 2020 com­ple­tion

In the lat­est up­date on As­traZeneca’s de­lay-prone HQ project, the phar­ma gi­ant re­vealed that the cost of con­struc­tion has swelled to £750 mil­lion ($956 mil­lion) — more than dou­ble the orig­i­nal es­ti­mate in 2013.

The move-in date is still in 2020, a spokesper­son con­firmed, af­ter As­traZeneca pushed pro­ject­ed com­ple­tion from 2016 to 2017, and then to the spring of 2019. While the ini­tial plan called for a £330 mil­lion (then $500 mil­lion) in­vest­ment, the cost bal­looned to £500 mil­lion ($650 mil­lion), and more in the most re­cent up­date.