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

John Hood [file photo]

UP­DATE: Cel­gene and the sci­en­tist who cham­pi­oned fe­dra­tinib's rise from Sanofi's R&D grave­yard win FDA OK

Six years after Sanofi gave it up for dead, the FDA has approved the myelofibrosis drug fedratinib, now owned by Celgene.

The drug will be sold as Inrebic, and will soon land in the portfolio at Bristol-Myers Squibb, which is finalizing a deal to acquire Celgene.

Endpoints News

Basic subscription required

Unlock this story instantly and join 57,400+ biopharma pros reading Endpoints daily — and it's free.

UP­DAT­ED: AveX­is sci­en­tif­ic founder was axed — and No­var­tis names a new CSO in wake of an ethics scan­dal

Now at the center of a storm of controversy over its decision to keep its knowledge of manipulated data hidden from regulators during an FDA review, Novartis CEO Vas Narasimhan has found a longtime veteran in the ranks to head the scientific work underway at AveXis, where the incident occurred. And the scientific founder has hit the exit.

Endpoints News

Basic subscription required

Unlock this story instantly and join 57,400+ biopharma pros reading Endpoints daily — and it's free.

Ab­b­Vie gets its FDA OK for JAK in­hibitor upadac­i­tinib, but don’t look for this one to hit ex­ecs’ lofty ex­pec­ta­tions

Another big drug approval came through on Friday afternoon as the FDA OK’d AbbVie’s upadacitinib — an oral JAK1 inhibitor that is hitting the rheumatoid arthritis market with a black box warning of serious malignancies, infections and thrombosis reflecting fears associated with the class.

It will be sold as Rinvoq — at a wholesale price of $59,000 a year — and will likely soon face competition from a drug that AbbVie once controlled, and spurned. Reuters reports that a 4-week supply of Humira, by comparison, is $5,174, adding up to about $67,000 a year.

The top 10 fran­chise drugs in bio­phar­ma his­to­ry will earn a to­tal of $1.4T (tril­lion) by 2024 — what does that tell us?

Just in case you were looking for more evidence of just how important Amgen’s patent win on Enbrel is for the company and its investors, EvaluatePharma has come up with a forward-looking consensus estimate on what the list of top 10 drugs will look like in 2024.

Endpoints News

Basic subscription required

Unlock this story instantly and join 57,400+ biopharma pros reading Endpoints daily — and it's free.

ICER blasts FDA, PTC and Sarep­ta for high prices on DMD drugs Em­flaza, Ex­ondys 51

ICER has some strong words for PTC, Sarepta and the FDA as the US drug price watchdog concludes that as currently priced, their respective new treatments for Duchenne muscular dystrophy are decidedly not cost-effective.

The final report — which cements the conclusions of a draft issued in May — incorporates the opinion of a panel of 17 experts ICER convened in a public meeting last month. It also based its analysis of Emflaza (deflazacort) and Exondys 51 (eteplirsen) on updated annual costs of $81,400 and over $1 million, respectively, after citing “incorrect” lower numbers in the initial calculations.

UP­DAT­ED: Sci­en­tist-CEO ac­cused of im­prop­er­ly us­ing con­fi­den­tial in­fo from uni­corn Alec­tor

The executive team at Alector $ALEC has a bone to pick with scientific co-founder Asa Abeliovich. Their latest quarterly rundown has this brief note buried inside:

On June 18, 2019, we initiated a confidential arbitration proceeding against Dr. Asa Abeliovich, our former consulting co-founder, related to alleged breaches of his consulting agreement and the improper use of our confidential information that he learned during the course of rendering services to us as our consulting Chief Scientific Officer/Chief Innovation Officer. We are in the early stage of this arbitration proceeding and are unable to assess or provide any assurances regarding its possible outcome.

There’s no explicit word in the filing on what kind of confidential info was involved, but the proceeding got started 2 days ahead of Abeliovich’s IPO.

Abeliovich, formerly a tenured associate professor at Columbia, is a top scientist in the field of neurodegeneration, which is where Alector is targeted. More recently, he’s also helped start up Prevail Therapeutics as the CEO, which raised $125 million in an IPO. And there he’s planning on working on new gene therapies that target genetically defined subpopulations of Parkinson’s disease. Followup programs target Gaucher disease, frontotemporal dementia and synucleinopathies.

But this time Abeliovich is the CEO rather than a founding scientist. And some of their pipeline overlaps with Alector’s.

Abeliovich and Prevail, though, aren’t taking this one lying down.

Endpoints News

Basic subscription required

Unlock this story instantly and join 57,400+ biopharma pros reading Endpoints daily — and it's free.

Chi­na has be­come a CEO-lev­el pri­or­i­ty for multi­na­tion­al phar­ma­ceu­ti­cal com­pa­nies: the trend and the im­pli­ca­tions

After a “hot” period of rapid growth between 2009 and 2012, and a relatively “cooler” period of slower growth from 2013 to 2015, China has once again become a top-of-mind priority for the CEOs of most large, multinational pharmaceutical companies.

At the International Pharma Forum, hosted in March in Beijing by the R&D Based Pharmaceutical Association Committee (RDPAC) and the Pharmaceutical Research and Manufacturers of America (PhRMA), no fewer than seven CEOs of major multinational pharmaceutical firms participated, including GSK, Eli Lilly, LEO Pharma, Merck KGaA, Pfizer, Sanofi and UCB. A few days earlier, the CEOs of several other large multinationals attended the China Development Forum, an annual business forum hosted by the research arm of China’s State Council. It’s hard to imagine any other country, except the US, having such drawing power at CEO level.

As dis­as­ter struck, Ab­b­Vie’s Rick Gon­za­lez swooped in on Al­ler­gan with an of­fer Brent Saun­ders couldn’t say no to

Early March was a no good, awful, terrible time for Allergan CEO Brent Saunders. His big lead drug had imploded in a Phase III disaster and activists were after his hide — or at least his chairman’s title — as the stock price continued a steady droop that had eviscerated share value for investors.

But it was a perfect time for AbbVie CEO Rick Gonzalez to pick up the phone and ask Saunders if he’d like to consider a “strategic” deal.

Endpoints News

Basic subscription required

Unlock this story instantly and join 57,400+ biopharma pros reading Endpoints daily — and it's free.

CEO Pascal Soriot via Getty Images

As­traZeneca's jug­ger­naut PARP play­er Lyn­parza scoops up an­oth­er dom­i­nant win in PhI­II as the FDA adds a 'break­through' for Calquence

AstraZeneca’s oncology R&D group under José Baselga keeps churning out hits.

Wednesday morning the pharma giant and their partners at Merck parted the curtains on a successful readout for their Phase III PAOLA-1 study, demonstrating statistically significant improvement in progression-free survival for women with ovarian cancer in a first-line maintenance setting who added their PARP Lynparza to Avastin. This is their second late-stage success in ovarian cancer, which will help stave off rivals like GSK.

Endpoints News

Basic subscription required

Unlock this story instantly and join 57,400+ biopharma pros reading Endpoints daily — and it's free.