Biotech boards bur­dened: Bridg­ing the suc­cess gap

Based on our nu­mer­ous con­ver­sa­tions with board mem­bers and CEOs, we sur­mise that biotech boards are fac­ing busy meet­ing agen­das with a mul­ti­tude of top­ics rang­ing from gov­er­nance, fi­nan­cial au­dits, and bud­get re­views to com­pen­sa­tion and board nom­i­na­tion work. While it is the job of the CEO to out­line strat­e­gy and plans for the busi­ness, the board is tasked with pres­sure test­ing those pro­pos­als to en­sure that they are sound. Of­ten boards do not have am­ple time to re­view ma­te­ri­als in ad­vance, there is in­ad­e­quate time for dis­cus­sion or prop­er de­bate dur­ing the meet­ing, and mem­bers lend their sup­port with­out hav­ing all the in­for­ma­tion in re­al time to as­sess un­der­ly­ing as­sump­tions.

Fill­ing The Suc­cess Gap

As biotech boards are faced with chal­lenges giv­en tech­ni­cal com­plex­i­ties and bi­na­ry out­comes, over­com­ing the Suc­cess Gap re­quires ex­per­tise, trans­paren­cy and de­bate, which are not eas­i­ly ac­com­plished.

The Suc­cess Gap is the chasm be­tween the lev­el of in­for­ma­tion, da­ta, an­a­lyt­ics and as­sess­ment that is pre­sent­ed to the board rel­a­tive to the kind of analy­sis and depth of un­der­stand­ing that must be pro­vid­ed to the board when it is mak­ing de­ci­sions. This is the gap be­tween well thought-out de­ci­sions and those that are made un­der time pres­sures or with im­per­fect in­for­ma­tion. In our con­ver­sa­tions and based on our re­search on the top­ic, it is ev­i­dent that many board mem­bers feel that they are not suf­fi­cient­ly knowl­edge­able about key dri­vers and are not able to get in­de­pen­dent in­for­ma­tion about the com­pa­ny. In many ways, the board is large­ly ed­u­cat­ed on the busi­ness by the CEO and is re­liant on the ac­cu­ra­cy, in­sights and ob­jec­tiv­i­ty of the pro­pos­als that are pre­sent­ed.

Time To Take “SOCK” Se­ri­ous­ly? Be­cause Strate­gic Op­er­a­tional Items Can Be The Dif­fer­ence Be­tween Suc­cess And Fail­ure

We ar­gue that hav­ing am­ple over­sight on strat­e­gy may be the most like­ly de­ter­mi­nant of fu­ture suc­cess or lack there­of. We ad­vo­cate that a new Strate­gic Oper­a­tions Coor­di­na­tion TasKforce (fond­ly named “SOCK” as a friend­ly form of SOX) should be re­quired for each board. This will be a sub­set of the board that will ex­am­ine in de­tail the mer­its of cer­tain projects, strate­gic ini­tia­tives, po­ten­tial deals or crit­i­cal op­er­a­tional con­sid­er­a­tions such as ma­jor clin­i­cal/sci­en­tif­ic de­ci­sions. This group will not han­dle these items in lieu of the board but would rather en­sure that the board is well pre­pared to dis­cuss these is­sues when they come up for a broad­er dis­cus­sion. In essence, the role of SOCK is to vet these in­puts ahead of time to bridge the Suc­cess Gap.

Un­ques­tion­ably this idea will be con­tro­ver­sial. But boards are al­ready hir­ing ex­ter­nal ex­perts to help with au­dit and com­pen­sa­tion among oth­er items, and we ad­vo­cate that the SOCK task­force should al­so be able to hire ex­ter­nal ex­perts to help en­sure that there is care­ful over­sight of de­ci­sions that can trans­late in­to suc­cess or fail­ure of the com­pa­ny.

Ques­tions For In­vestors And Boards To Keep In Mind To Over­come Mis­con­cep­tions

In­vestors in the biotech sec­tor do not al­ways have ac­cess to boards and many board mem­bers are not nec­es­sar­i­ly ex­pe­ri­enced with how in­vestors at­tribute val­ue to com­pa­nies in the pub­lic mar­ket. Not sur­pris­ing­ly, this can lead to some mis­con­cep­tions and con­fu­sion. There are sev­er­al ques­tions that may jump-start a con­ver­sa­tion to build un­der­stand­ing be­tween the two sides. In­vestors should con­sid­er how the board is struc­tured, its lev­el of in­de­pen­dence, and its lev­el of op­er­a­tional biotech ex­per­tise.

We pro­pose that board mem­bers keep a keen eye on how in­vestors eval­u­ate their com­pa­nies, what the val­ue propo­si­tion is rel­a­tive to com­pet­i­tive tech­nolo­gies or drugs and get a clear sense of the dri­vers of the val­ue cre­ation rel­a­tive to what in­vestors are look­ing for. In cas­es where there is a wide gap be­tween the in­ter­nal and ex­ter­nal view, get­ting a deep un­der­stand­ing of why there is ex­ter­nal skep­ti­cism may help the board and man­age­ment fill in those gaps. In cas­es where it is not pos­si­ble to fill the gaps, the board may want to con­sid­er what is miss­ing from the in­ter­nal view and whether key in­ter­nal as­sump­tions have been vet­ted ad­e­quate­ly.

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Overview
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

Paul Hudson, Getty Images

UP­DAT­ED: Sanofi CEO Hud­son lays out new R&D fo­cus — chop­ping di­a­betes, car­dio and slash­ing $2B-plus costs in sur­gi­cal dis­sec­tion

Earlier on Monday, new Sanofi CEO Paul Hudson baited the hook on his upcoming strategy presentation Tuesday with a tell-tale deal to buy Synthorx for $2.5 billion. That fits squarely with hints that he’s pointing the company to a bigger future in oncology, which also squares with a major industry tilt.

In a big reveal later in the day, though, Hudson offered a slate of stunners on his plans to surgically dissect and reassemble the portfoloio, saying that the company is dropping cardio and diabetes research — which covers two of its biggest franchise arenas. Sanofi missed the boat on developing new diabetes drugs, and now it’s pulling out entirely. As part of the pullback, it’s dropping efpeglenatide, their once-weekly GLP-1 injection for diabetes.

“To be out of cardiovascular and diabetes is not easy for a company like ours with an incredibly proud history,” Hudson said on a call with reporters, according to the Wall Street Journal. “As tough a choice as that is, we’re making that choice.”

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Roger Perlmutter, Merck

#ASH19: Here’s why Mer­ck is pay­ing $2.7B to­day to grab Ar­Qule and its next-gen BTK drug, lin­ing up Eli Lil­ly ri­val­ry

Just a few months after making a splash at the European Hematology Association scientific confab with an early snapshot of positive data for their BTK inhibitor ARQ 531, ArQule has won a $2.7 billion buyout deal from Merck.

Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

This is the second biotech buyout pact today, marking a brisk tempo of M&A deals in the lead-up to the big JP Morgan gathering in mid-January. It’s no surprise the acquisitions are both for cancer drugs, where Sanofi will try to make its mark while Merck beefs up a stellar oncology franchise. And bolt-ons are all the rage at the major pharma players, which you could also see in Novartis’ recent $9.7 billion MedCo buyout.

ArQule — which comes out on top after their original lead drug foundered in Phase III — highlighted early data on ‘531 at EHA from a group of 6 chronic lymphocytic leukemia patients who got the 65 mg dose. Four of them experienced a partial response — a big advance for a company that failed with earlier attempts.

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Paul Hudson, Sanofi

Paul Hud­son promis­es a bright new fu­ture at Sanofi, kick­ing loose me-too drugs and fo­cus­ing on land­mark ad­vances. But can he de­liv­er?

Paul Hudson was on a mission Tuesday morning as he stood up to address Sanofi’s new R&D and business strategy.

Still fresh into the job, the new CEO set out to convince his audience — including the legions of nervous staffers inevitably devoting much of their day to listening in — that the pharma giant is shedding the layers of bureaucracy that had held them back from making progress in the past, dropping the duds in the pipeline and reprioritizing a more narrow set of experimental drugs that were promised as first-in-class or best-in-class.  The company, he added, is now positioned to “go after other opportunities” that could offer a transformational approach to treating its core diseases.

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Am­gen puts its foot down in shiny new South San Fran­cis­co hub as it re­or­ga­nizes R&D ops

Amgen has signed up to be AbbVie’s neighbor in South San Francisco as it moves into a nine-story R&D facility in the booming biotech hub.

The arrangement gives Amgen 240,000 square feet of space on the Gateway of Pacific Campus, just a few minutes drive from its current digs at Oyster Point. The new hub will open in 2022 and house the big biotech’s Bay Area employees working on cardiometabolic, inflammation and oncology research.

Ab­b­Vie, Scripps ex­pand part­ner­ship, for­ti­fy fo­cus on can­cer drugs

Scripps and AbbVie go way back. Research conducted in the lab of Scripps scientist Richard Lerner led to the discovery of Humira. The antibody, approved by the FDA in 2002 and sold by AbbVie, went on to become the world’s bestselling treatment. In 2018, the drugmaker and the non-profit organization signed a pact focused on developing cancer treatments — and now, the scope of that partnership has broadened to encompass a range of diseases, including immunological and neurological conditions.

South Ko­rea jails 3 Sam­sung ex­ecs for de­stroy­ing ev­i­dence in Bi­o­Log­ics probe

Three Samsung executives in Korea are going to jail.

The convictions came in what prosecutors had billed as “biggest crime of evidence destruction in the history of South Korea”: a case of alleged corporate intrigue that was thrown open when investigators found what was hidden beneath the floor of a Samsung BioLogics plant. Eight employees in total were found guilty of evidence tampering and the three executives were each sentenced to up to two years in prison.

Nick Plugis, Avak Kahvejian, Cristina Rondinone, Milind Kamkolkar and Chad Nusbaum. (Cellarity)

Cel­lar­i­ty, Flag­ship's $50M bet on net­work bi­ol­o­gy, mar­ries ma­chine learn­ing and sin­gle-cell tech for drug dis­cov­ery

Cellarity started with a simple — but far from easy — idea that Avak Kahvejian and his team were floating around at Flagship Pioneering: to digitally encode a cell.

As he and his senior associate Nick Plugis dug deeper into the concept, they found that most of the models others have developed take a bottom-up approach, where they assemble the molecules inside cells and the connections between them from scratch. What if they opt for a top-down approach, aided by single-cell transcriptomics and machine learning, to gauge the behavior of the entire cellular network?

Sanofi’s big week in­cludes a promis­ing PhI­II for an or­phan dis­ease drug, with plans for a pitch to the FDA

The biopharma R&D food chain is paying off with a plan at Sanofi to pitch regulators on a new drug for an orphan disease called cold agglutinin disease.

The pharma giant ushered out a statement Tuesday morning — after it spelled out plans to radically restructure the company, abandoning cardio and diabetes research altogether — saying that their C1s inhibitor sutimlimab had cleared the pivotal study.