Nick Leschly at Endpoints JPM20 (Jeff Rumans)

Blue­bird spins it­self in­to two com­pa­nies, sev­er­ing gene ther­a­py and can­cer units

Blue­bird bio, once one of biotech’s flashiest com­pa­nies, is tak­ing a sweep­ing step as it looks to right the ship af­ter a se­ries of high-pro­file set­backs: split­ting the com­pa­ny in two.

The Cam­bridge-based com­pa­ny will split it­self in­to a unit fo­cused on can­cer and a unit fo­cused on rare dis­ease, sev­er­ing the cell ther­a­py and gene ther­a­py units that the biotech rode to promi­nence. CEO Nick Leschly ex­plained the move as a prac­ti­cal one, re­flect­ing the dif­fer­ent kinds of ex­per­tise in the dis­ease ar­eas.

“You don’t build an on­col­o­gy com­pa­ny by hir­ing peo­ple who are ex­perts in se­vere ge­net­ic dis­ease, nor do you do vice ver­sa,” Leschly told WSJ. “A lot of this comes down to … pri­or­i­ties and fo­cus.”

Yet the move comes as blue­bird’s stock has lost much of its ini­tial lus­ter, as blue­bird has strug­gled to turn strong da­ta in­to com­mer­cial ther­a­pies and in­vestors moved on to new­er gene ther­a­py com­pa­nies such as CRISPR Ther­a­peu­tics.

And it will ef­fec­tive­ly end Leschly’s day-to-day in­volve­ment in the biotech he has be­come syn­ony­mous with and a gene ther­a­py field where he long served as the most promi­nent CEO. Leschly will lead the as-yet-un­named new­co, while An­drew Oben­shain, their long­time Eu­ro­pean chief, will lead blue­bird bio. Leschly will hang on as blue­bird’s ex­ec­u­tive chair.

An­a­lysts were skep­ti­cal that the ap­proach was the so­lu­tion. In a note to in­vestors, Piper San­dler’s Tyler Van Bu­ren said blue­bird had strug­gled to re­plen­ish its pipeline over the years, de­spite sig­nif­i­cant fund­ing, and he wor­ried that they didn’t have enough as­sets or cash to sus­tain mul­ti­ple com­pa­nies.

“Ul­ti­mate­ly, while these two fran­chis­es are dif­fer­ent, we are not con­vinced that their re­spec­tive pipelines are ro­bust enough to sus­tain the in­de­pen­dent en­ti­ties,” he wrote, “and we be­lieve some in­vestors ap­pre­ci­at­ed the bal­ance of the two fran­chis­es.”

The com­pa­ny’s stock $BLUE, which has fall­en dra­mat­i­cal­ly from its 2018 peak, when it was worth over $11 bil­lion, re­mained flat at just un­der $49.

Af­ter com­mand­ing at­ten­tion with cu­ra­tive da­ta for a sick­le cell gene ther­a­py and nu­mer­ous re­mis­sions in tri­als for a mul­ti­ple myelo­ma cell ther­a­py, blue­bird has strug­gled to bring both past the fin­ish line.

Af­ter their most re­cent de­lay, the com­pa­ny re­mains near­ly two years away from sub­mit­ting their sick­le cell gene ther­a­py to the FDA. The FDA is now re­view­ing the mul­ti­ple myelo­ma cell ther­a­py ide-cel, now part­nered with Bris­tol My­ers Squibb, but the agency ini­tial­ly served the com­pa­ny with a refuse-to-file let­ter for sub­mit­ting in­suf­fi­cient man­u­fac­tur­ing in­for­ma­tion.

The gene ther­a­py, known as Zyn­te­glo, was ap­proved in Eu­rope for an­oth­er rare blood dis­ease, be­ta tha­lassemia. But the $1.8 mil­lion price tag blue­bird placed on it shocked an­a­lysts and in­dus­try watch­ers and, with the pan­dem­ic hit­ting short­ly af­ter their of­fi­cial launch, the com­pa­ny had yet to sell a sin­gle unit as of their No­vem­ber Q3 fil­ing.

De­spite the set­backs, the com­pa­ny still re­mains at the front of a now crowd­ed pack to com­mer­cial­ize a sick­le cell cure, and an­a­lysts peg peak sales for ide-cel as high as $900 mil­lion. Blue­bird al­so has an im­munother­a­py for Merkel cell car­ci­no­ma and a gene ther­a­py for cere­bral adrenoleukody­s­tro­phy in clin­i­cal de­vel­op­ment.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Roche's Tecen­triq cross­es the fin­ish line first in ad­ju­vant lung can­cer, po­ten­tial­ly kick­ing off gold rush

While falling behind the biggest PD-(L)1 drugs in terms of sales, Roche has looked to carve out a space for its Tecentriq with a growing expertise in lung cancer. The drug will now take an early lead in the sought-after adjuvant setting — but competitors are on the way.

The FDA on Friday approved Tecentriq as an adjuvant therapy for patients with Stage II-IIIA non small cell lung cancer with PD-(L)1 scores greater than or equal to 1, making it the first drug of its kind approved in an early setting that covers around 40% of all NSCLC patients.

Amit Etkin, Alto Neuroscience CEO (Alto via Vimeo)

A star Stan­ford pro­fes­sor leaves his lab for a start­up out to re­make psy­chi­a­try

About five years ago, Amit Etkin had a breakthrough.

The Stanford neurologist, a soft-spoken demi-prodigy who became a professor while still a resident, had been obsessed for a decade with how to better define psychiatric disorders. Drugs for depression or bipolar disorder didn’t work for many patients with the conditions, and he suspected the reason was how traditional diagnoses didn’t actually get at the heart of what was going on in a patient’s brain.

Susan Galbraith, Executive VP, Oncology R&D, AstraZeneca

As­traZeneca on­col­o­gy R&D chief Su­san Gal­braith: 'Y­ou're go­ing to need or­thog­o­nal com­bi­na­tion­s'

 

Earlier in the week we broadcast our 4th annual European Biopharma Summit with a great lineup of top execs. One of the one-on-one conversations I set up was with Susan Galbraith, the oncology research chief at AstraZeneca. In a wide-ranging discussion, Galbraith reviewed the cancer drug pipeline and key trends influencing development work at the pharma giant. You can watch the video, above, or stick with the script below. — JC

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Tillman Gerngross, Adagio CEO

Q&A: Till­man Gern­gross ex­plains why his Covid mAb will have an edge over an al­ready crowd­ed field

If anyone knows about monoclonal antibodies, it’s serial entrepreneur, Adimab CEO, and Dartmouth professor of bioengineering Tillman Gerngross.

Even the name of Gerngross’ new antibody startup Adagio Therapeutics is meant to reflect his vision behind the development of his Covid-19 mAb: slowly, he said, explaining that “everyone else, whether it’s Regeneron, Lilly, or AstraZeneca, Vir, they all valued speed over everything.”

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Susan Galbraith speaking at Endpoints News' virtual EUBIO21 summit

Imfinzi/treme­li­mum­ab com­bo scores As­traZeneca an­oth­er OS win — this time in liv­er can­cer

Is the tide turning on AstraZeneca’s battered PD-L1/CTLA4 combo?

A single priming dose of the experimental tremelimumab, followed by Imfinzi every four weeks, beat Nexavar (sorafenib) in helping a group of liver cancer patients live longer in a Phase III study, the company reported, meeting the primary endpoint.

Specifically, the two drugs extended overall survival for patients with unresectable hepatocellular carcinoma who had not received prior systemic therapy and were not eligible for localized treatment.

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FDA's vac­cine ad­comm unan­i­mous­ly sup­ports Mod­er­na's boost­er in same pop­u­la­tions as Pfiz­er's boost­er

The FDA’s vaccine advisory committee on Thursday voted 19-0 in support of expanding Moderna’s Covid-19 vaccine EUA for booster doses for certain high-risk individuals. FDA is expected to authorize the Moderna booster shortly.

Similarly to the Pfizer booster shot, Moderna’s will likely be authorized for those older than 65, adults at high risk of severe Covid-19, and adults whose frequent institutional or occupational exposure to SARS-CoV-2 puts them at high risk of serious complications of Covid-19. But unlike the Pfizer adcomm, where FDA had to scramble to get the committee to vote in favor of a booster, this committee was unanimous with the Moderna shot.