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.

Qual­i­ty Con­trol in Cell and Gene Ther­a­py – What’s Re­al­ly at Stake?

In early 2021, Bluebird Bio was forced to suspend clinical trials of its gene therapy for sickle cell disease after two patients in the trial developed cancer. As company scientists rushed to assess whether there was any causal link between the therapy and the cancer cases, Bluebird’s stock value plummeted – as did those of multiple other biopharma companies developing similar therapies.

While investigations concluded that the gene therapy was unlikely to have caused cancer, investors and the public may be more skittish regarding the safety of gene and cell therapies after this episode. This recent example highlights how delicate the fields of cell and gene therapy remain today, even as they show great promise.

Chris Gibson (Photo By Vaughn Ridley/Sportsfile for Web Summit via Getty Images)

Re­cur­sion founders gin for­tunes as IPO back­ers show­er $436M on one of the biggest boasts in AI -- based on some very small deals

In the AI drug development world, boasting often comes with the territory. Yet few can rival Recursion when it comes to claiming the lead role in what company execs like to call the industrialization of drug development, with promises of continued exponential growth in the number of drugs it has in the pipeline.

On Friday, the Salt Lake City-based biotech translated its unicorn-sized boasts into a killer IPO, pricing more than 24 million shares at the high end of its range and bringing in $436 million — with a large chunk of that promised by some deep-pocket backers.

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UP­DAT­ED: New Kaiser analy­sis shows how lim­it­ing price ne­go­ti­a­tions to tar­get­ed drugs may bet­ter fo­cus up­com­ing leg­is­la­tion

As Congress considers whether to adopt sweeping new legislation to lower prescription drug prices across the board, the Kaiser Family Foundation is out with a new report on Monday showing how a more targeted approach on a subset of drugs might be a more efficient way to save government funds.

“This analysis shows that Medicare Part D and Part B spending is highly concentrated among a relatively small share of covered drugs, mainly those without generic or biosimilar competitors,” wrote Juliette Cubanski, deputy director of the program on Medicare policy at KFF, and Tricia Neuman, SVP of KFF. “Focusing drug price negotiation or reference pricing on a subset of drugs that account for a disproportionate share of spending would be an efficient use of administrative resources, though it would also leave some potential savings on the table.”

Tillman Gerngross (Adagio)

Till­man Gern­gross' Covid-19 an­ti­body moon­shot scores $336M with the help of new ace CFO. Is an IPO next?

Less than a year into its existence, serial biotech entrepreneur Tillman Gerngross’ antibody play Adagio has raced ahead into a pivotal trial for its lead drug for Covid-19 on the back of some very promising preclinical data. Now, crossover investors led by Peter Kolchinsky at RA are rolling up the Brinks truck — and that could spell an IPO in the offing for Adagio.

Adagio has bagged $336 million as part of a Series C round led by RA Capital to advance lead single-shot antibody ADG20 through a pivotal Phase I/II/III trial for the treatment of mild to moderate Covid-19 patients at high risk of infection, the biotech said Monday.

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When is a drug re­al­ly a de­vice? Court knocks down FDA ap­peal in try­ing to sort that grey area

It’s always a surprise when a court has to step in to tell the FDA that it erred in performing one of its main duties: classifying whether a medical product is drug or a device.

But that’s what the US Court of Appeals for the District of Columbia did on Friday, making clear to the world’s top drug regulator that Genus Medical Technologies’ contrast agent barium sulfate (also known as Vanilla SilQ) should not be considered a drug, as the FDA had said, but a medical device.

Q1: A flood of in­vestor cash drove biotech's num­bers to new record highs, and the tor­rent of cash is mov­ing up­stream fast

If you thought biotech was booming last year, wait until you get a load of the numbers from Q1 2021.

On virtually every level, with one exception, the money engine was working around the clock in the first 3 months of this year. Venture capital has reached such a fever peak that the average B round now weighs in at an average mega-weight value of $100 million. The money flow is also finding its way to the mouth of the R&D river, where discovery work now merits the big bucks instead of cautionary seed funds.

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Jami Rubin (EQRx)

Ja­mi Ru­bin, once fa­bled for grilling bio­phar­ma ex­ecs, de­camps to head fi­nance at drug pric­ing dis­rupter

As Goldman Sachs’ top pharmaceutical analyst, Jami Rubin was known for asking the tough questions. Now, as she takes the lead on EQRx’s mission to rewrite the rules of drug pricing, we’ll see how good her answers are.

Rubin made the jump to biotech on April 5, becoming EQRx’s new CFO, the company said Monday. She’s coming from PJT Partners, where she’s been a partner providing strategic guidance for biotech and pharmaceutical companies for the last couple years. With EQRx’s recent $500 million Series B round in the books, it wouldn’t be a surprise if she was already lining up a public debut.

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Seagen gets Au­gust PDU­FA for Pad­cev ex­pan­sions; Adap­tate pulls in new cash for gam­ma delta T cell an­ti­bod­ies

Seagen is riding the wave of two new priority reviews straight to the FDA.

The Bothell, WA-based biotech and their partners at Astellas announced Monday that two supplemental BLAs for Padcev had been accepted by US regulators. FDA has set Aug. 17 as the PDUFA date for the reviews.

“With our recent regulatory submissions, we intend to provide the highest level of clinical evidence supporting Padcev use — overall survival data from a randomized Phase III trial — and expand availability in multiple countries where there is unmet medical need,” said Astellas oncology chief Andrew Krivoshik.

Ben Carson (Evan Vucci, AP Images)

UP­DAT­ED The doc­tor is in: Trump in­sid­er Ben Car­son joins NASH play­er Galectin as a 'spe­cial con­sul­tant,' part-time spokesman

In the few short months since President Donald Trump left office, his former department heads are reportedly having a difficult time finding employment. But for Ben Carson, Trump’s former housing secretary, that’s not a problem anymore after biotech came calling.

Carson, a former GOP presidential candidate and erstwhile HUD head, has joined Galectin Therapeutics as a “special consultant” the biotech hopes will help raise its profile and provide an entrée to key business partnerships, the company said Monday.