Black­stone bags Clarus, stak­ing out a grow­ing PhI­II niche for it­self in a rapid­ly chang­ing bio­phar­ma in­dus­try

Black­stone likes life sci­ences. And now it’s div­ing in deep.

The pri­vate eq­ui­ty gi­ant has com­plet­ed a deal to buy Clarus, a busy life sci­ences in­vestor with an ex­ten­sive his­to­ry of gam­bling on late-stage drug de­vel­op­ment. 

Nick Galakatos

With $2.6 bil­lion un­der man­age­ment, Clarus is a peanut on Black­stone’s $440 bil­lion plate. But with $19 bil­lion in health­care deals com­plet­ed and a vast port­fo­lio of biotech fa­cil­i­ty space on its books, Black­stone has the re­sources to go much big­ger in a field that has been ex­plod­ing with new ac­tiv­i­ty over the last few years.

Clarus man­ag­ing di­rec­tor and co-founder Nick Galakatos will now be­come head of Black­stone Life Sci­ences, bring­ing his port­fo­lio of 50 life sci­ences com­pa­nies with him.

Joseph Barat­ta

Clarus has been a keen play­er in late-stage rounds, a high­ly com­pet­i­tive field where in­vestors like to scale down risk as much as pos­si­ble. That strat­e­gy was on dis­play just days ago, when Clarus spear­head­ed a $150 mil­lion raise for Galera so it could com­plete a piv­otal Phase III study on GC4419, which tar­gets the tox­ic ef­fect of ra­di­a­tion ther­a­py as su­per­ox­ide swift­ly builds up in pa­tients, af­flict­ing the sen­si­tive tis­sue in their mouths.

The big op­por­tu­ni­ty for Black­stone, though, is to do more of the spe­cial­ty Phase III deals that Clarus has been ink­ing with Big Phar­ma and Big Biotech, fund­ing Phase III stud­ies that can’t fit in­to their bud­gets or the band­width of their R&D groups — tak­ing the risk and get­ting a pay­back through a mix of cash mile­stones and roy­al­ty streams.

These are deals you rarely hear about in de­tail.

“We think there’s a sig­nif­i­cant un­met need on the part of Big Phar­ma… to de­vel­op more of their R&D pipeline,” says Joe Barat­ta, head of pri­vate eq­ui­ty at Black­stone.

Clarus raised a $910 mil­lion fund for this niche last fall, and Black­stone has the as­sets nec­es­sary to go deep­er. 

“For the most part the R&D bud­get of the ma­jor phar­ma com­pa­nies is con­strained,” Galakatos told me last fall. “They have a very ex­cit­ing pipeline and frankly they can­not fund their ex­ist­ing bud­get.”

In a call with re­porters to­day, Galakatos says they’ve done a string of a dozen deals like this rang­ing from $50 mil­lion to $300 mil­lion, not­ing that late-stage de­vel­op­ment costs have dou­bled in the past 10 years.

Their ar­rival comes as the in­dus­try is un­der­go­ing a trans­for­ma­tion. In­stead of be­ing picked off one by one by Big Phar­ma, more com­pa­nies — like Al­ny­lam or Agios — are pur­su­ing a fu­ture in which they re­main in­de­pen­dent com­pa­nies with com­mer­cial op­er­a­tions. As these com­pa­nies grow in­to mid-cap com­pa­nies, they’ll need sig­nif­i­cant amounts of mon­ey to make the changeover, more like­ly to see an ad­van­tage in do­ing de­vel­op­ment deals the new Black­stone op­er­a­tion has in mind.

Black­stone ev­i­dent­ly plans to be ready to work for that busi­ness.

Jon Gray

“This is a unique mo­ment where rapid ad­vance­ments in sci­ence and tech­nol­o­gy are cre­at­ing un­prece­dent­ed in­no­va­tion and un­par­al­leled im­pact on hu­man health,” not­ed Jon Gray, Black­stone’s CEO. “Pri­vate cap­i­tal can play an im­por­tant role in ac­cel­er­at­ing the lengthy clin­i­cal de­vel­op­ment process to help bring vi­tal, but un­der­fund­ed, drugs to mar­ket. Build­ing on the foun­da­tion of the world-class Clarus team, Black­stone Life Sci­ences is unique­ly suit­ed to pro­vide much need­ed cap­i­tal and ex­per­tise to this sec­tor.”

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Turned back at the FDA, Im­muno­Gen is ax­ing 220 staffers, sell­ing pro­grams and hun­ker­ing down for a new PhI­II gam­ble

After being stymied by FDA regulators who were unconvinced by ImmunoGen’s $IMGN desperation shot at an accelerated OK based on a secondary endpoint, the struggling biotech is slashing its workforce, shuttering R&D projects and looking for buyers to pick up some of its experimental cancer assets as it goes back into a new Phase III with the lead drug.

We found out last month that the FDA had batted back their case for an accelerated approval of their antibody-drug conjugate mirvetuximab soravtansine, which had earlier failed a Phase III study for ovarian cancer. Now the other shoe is dropping.

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Bridge­Bio takes crown for biggest biotech IPO of 2019, as fel­low uni­corn Adap­tive rais­es of­fer­ing size and price

Bridge­Bio Phar­ma and Adap­tive Biotech­nolo­gies have not just up­sized IPO of­fer­ings — the pair of uni­corns have al­so raised their of­fer­ing prices above the range, haul­ing in a com­bined $648.5 mil­lion.

Neil Ku­mar’s Bridge­Bio Phar­ma, found­ed in 2015, has a sta­ble of com­pa­nies fo­cused on dis­eases that are dri­ven by de­fects in a sin­gle gene — en­com­pass­ing der­ma­tol­ogy, car­di­ol­o­gy, neu­rol­o­gy, en­docrinol­o­gy, re­nal dis­ease, and oph­thal­mol­o­gy — and can­cers with clear ge­net­ic dri­vers. The start­up mill birthed a pletho­ra of firms such as Ei­dos, Navire, QED Ther­a­peu­tics and Pelle­Pharm, which func­tion as its sub­sidiaries.

As­traZeneca chal­lenges Roche on front­line SCLC af­ter seiz­ing an in­ter­im win — and Mer­ck may not be far be­hind

The crowded playing field in the PD-1/L1 marketing game is about to get a little more complex.

This morning AstraZeneca reported that its CASPIAN study delivered a hit in an interim readout for their PD-L1 Imfinzi combined with etoposide and platinum-based chemotherapy options for frontline cases of small cell lung cancer, a tough target which has already knocked back Bristol-Myers’ shot in second-line cases. The positive data  — which we won’t see before they roll it out at an upcoming scientific conference — give AstraZeneca excellent odds of a quick vault to challenging Roche’s Tecentriq-chemo combo, approved 3 months ago for frontline SCLC in a landmark advance.

“This is the first trial offering the flexibility of combining immunotherapy with different platinum-based regimens in small cell lung cancer, expanding treatment options,” noted AstraZeneca cancer R&D chief José Baselga in a statement.

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Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Top an­a­lyst finds a sil­ver lin­ing in Ab­b­Vie’s $63B Al­ler­gan buy­out — but there’s a catch

After getting beat up on all sides from market observers who don’t much care for the latest mega-deal to arrive in biopharma, at least one prominent analyst now is starting to like what he sees in the numbers for AbbVie/Allergan.

But it’s going to take some encouragement if AbbVie execs want it to last.

AbbVie’s market cap declined $20 billion on Tuesday as the stock took a 17% hit during the day. And SVB Leerink’s Geoffrey Porges can see a distinct outline of an upside after reviewing the fundamentals of the deal.

Key to this bullish position is Porges’ belief that AbbVie can slice more than $2 billion in “synergies” post-merger while crediting the pharma giant with an industry-leading commercial team that can handle these new products — primarily Botox and medical aesthetics — even better than Allergan.

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Image: Chris Varma. Frontier

UP­DAT­ED: Chris Var­ma un­veils MP­M's lat­est start­up — eye­ing 'un­drug­gable' can­cer tar­gets and pow­ered by ma­chine learn­ing, $67M

Two years af­ter MPM Cap­i­tal en­list­ed Chris Var­ma on its busy on­col­o­gy team, the for­mer en­tre­pre­neur-in-res­i­dence is un­veil­ing his first ven­ture project out of his new stomp­ing grounds in the Bay Area: Fron­tier Med­i­cines.

For Var­ma, who’s al­so co-found­ed Blue­print Med­i­cines and built com­pa­nies at Third Rock and Flag­ship, this marks an­oth­er op­por­tu­ni­ty to ap­ply some cut­ting-edge sci­ence to “sev­er­al of the most im­por­tant and dif­fi­cult tar­gets in can­cer” — tar­gets that oth­ers have tried to tack­le with more clas­si­cal meth­ods and failed. The launch round comes in at $67 mil­lion, which should go some way in scaf­fold­ing a pre­clin­i­cal pipeline and push one or more as­sets in­to the clin­ic three years from now, he tells me.