Brent Saun­ders’ team gets hit with a PhI­II dis­as­ter — and a grow­ing mob of Al­ler­gan crit­ics seizes the mo­ment

Usu­al­ly when a large cap bio­phar­ma com­pa­ny has a big Phase III dis­as­ter, the top ex­ecs give it a quick mid­night bur­ial, is­sue a brief press re­lease, put up with a few head­lines, watch the mar­ket cap erode a bit and move on down the pipeline.

For Al­ler­gan $AGN, it’s a lot more com­pli­cat­ed than that.

Al­ready un­der pres­sure from the hedge fund Ap­paloosa to split the roles of CEO and chair­man in Brent Saun­ders’ shop, the ac­tivists point­ed to the de­ba­cle with ra­pastinel — Saun­ders’ $560 mil­lion de­pres­sion drug that flat failed a full slate of piv­otal tri­als — as an­oth­er sign that some­one needs to set things right at the com­pa­ny. And that no longer stops with a new chair­man to help steer a bet­ter course. Ap­paloosa wants to put a re­vamp of the man­age­ment team on the ta­ble, along with a sale, breakup or merg­er.

The Board’s mis­placed fear of “dis­rupt­ing” Al­ler­gan is wear­ing thin as an ex­cuse for in­ac­tion and can on­ly per­pet­u­ate fur­ther ero­sion in the share­hold­ers’ in­vest­ment. In fact, dis­rup­tive ac­tion is en­tire­ly war­rant­ed un­der these cir­cum­stances.” (Their em­pha­sis.)

But that’s not all. Af­ter steer­ing in­to the red on the set­back — the nor­mal, ra­tio­nal mar­ket re­sponse — Al­ler­gan’s shares are up 5% mid-day Thurs­day. And that’s be­cause the calls for ma­jor change at Al­ler­gan could gain re­al steam now. 

Ever­core ISI’s Umer Raf­fat spot­light­ed the pos­si­bil­i­ty of a break in­to the green ear­ly to­day.

It seems that in­vestors seem ex­treme­ly fo­cused on un­lock­ing the val­ue of aes­thet­ics busi­ness amidst the phar­ma busi­ness (which has had a few years of un­der­per­for­mance: on the patent side on base biz and on pipeline pro­duc­tiv­i­ty).

RBC’s Ran­dall Stan­icky has been ad­vo­cat­ing a breakup for more than a year. So count him in on the crowd of­fer­ing a thumbs up to fail­ure, which will just dri­ve more calls for quick change.

And SVB Leerink’s Marc Good­man al­so pre­dict­ed the switch to green to­day:

Re­gard­ing the stock, in­vestors have in­di­cat­ed to us that if ra­pastinel fails there could be (and should be) in­creased pres­sure on man­age­ment and/or the Board to im­ple­ment some type of change.

There’s al­so been some spec­u­la­tion that the man­age­ment team may have held back the first fail­ures to get an­oth­er read­out on the drug. Some­thing like that would on­ly fur­ther fu­el the al­ready blis­ter­ing feed­back Saun­ders’ been get­ting from some quar­ters.

Saun­ders may find the lat­est roast­ing was just a mod­est pre­lude to what comes next.


Im­age: Brent Saun­ders.

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 costs in com­pa­ny-wide re­org

Earlier on Monday, new Sanofi CEO Paul Hudson baited the hook on his upcoming strategy reveal tomorrow 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, 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.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 67,200+ biopharma pros reading Endpoints daily — and it's free.

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.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 67,200+ biopharma pros reading Endpoints daily — and it's free.

Left top to right: Mark Timney, Alex Denner, Vas Narasimhan. (The Medicines Company, Getty, AP/Endpoints News)

In a play-by-play of the $9.7B Med­Co buy­out, No­var­tis ad­mits it over­paid while of­fer­ing a huge wind­fall to ex­ecs

A month into his tenure at The Medicines Company, new CEO Mark Timney reached out to then-Novartis pharma chief Paul Hudson: Any interest in a partnership?

No, Hudson told him. Not now, at least.

Ten months later, Hudson had left to run Sanofi and Novartis CEO Vas Narasimhan was paying $9.7 billion for the one-drug biotech – the largest in the string of acquisitions Narasimhan has signed since his 2017 appointment.

The deal was the product of an activist investor and his controversial partner working through nearly a year of cat-and-mouse negotiations to secure a deal with Big Pharma’s most expansionist executive. It represented a huge bet in a cardiovascular field that already saw two major busts in recent years and brought massive returns for two of the industry’s most eye-raising names.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 67,200+ biopharma pros reading Endpoints daily — and it's free.

Paul Hudson. Sanofi

New Sanofi CEO Hud­son adds next-gen can­cer drug tech to the R&D quest, buy­ing Syn­thorx for $2.5B

When Paul Hudson lays out his R&D vision for Sanofi tomorrow, he will have a new slate of interleukin therapies and a synthetic biology platform to boast about.

The French pharma giant announced early Monday that it is snagging San Diego biotech Synthorx in a $2.5 billion deal. That marks an affordable bolt-on for Sanofi but a considerable return for Synthorx backers, including Avalon, RA Capital and OrbiMed: At $68 per share, the price represents a 172% premium to Friday’s closing.

Synthorx’s take on alternative IL-2 drugs for both cancer and autoimmune disorders — enabled by a synthetic DNA base pair pioneered by Scripps professor Floyd Romesberg — “fits perfectly” with the kind of innovation that he wants at Sanofi, Hudson said.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 67,200+ biopharma pros reading Endpoints daily — and it's free.

Game on: Re­gen­eron's BC­MA bis­pe­cif­ic makes clin­i­cal da­ta de­but, kick­ing off mul­ti­ple myelo­ma matchup with Bris­tol-My­ers

As J&J attempts to jostle past Bristol-Myers Squibb and bluebird for a landmark approval of its anti-BCMA CAR-T — and while GlaxoSmithKline maps a quick path to the FDA riding on its own BCMA-targeting antibody-drug conjugates — the bispecifics are arriving on the scene to stake a claim for a market that could cross $10 billion per year.

The main rivalry in multiple myeloma is shaping up to be one between Regeneron and Bristol-Myers, which picked up a bispecific antibody to BCMA through its recently closed $74 billion takeover of Celgene. Both presented promising first-in-human data at the ASH 2019 meeting.

FDA lifts hold on Abeon­a's but­ter­fly dis­ease ther­a­py, paving way for piv­otal study

It’s been a difficult few years for gene and cell therapy startup Abeona Therapeutics. Its newly crowned chief Carsten Thiel was forced out last year following accusations of unspecified “personal misconduct,” and this September, the FDA imposed a clinical hold on its therapy for a form of “butterfly” disease. But things are beginning to perk up. On Monday, the company said the regulator had lifted its hold and the experimental therapy is now set to be evaluated in a late-stage study.

Roche faces an­oth­er de­lay in strug­gle to nav­i­gate Spark deal past reg­u­la­tors — but this one is very short

Roche today issued the latest in a long string of delays of its $4.3 billion buyout of Philadelphia-based Spark Therapeutics. The delay comes as little surprise — it is their 10th in as many months — as their most recent delay was scheduled to expire before a key regulatory deadline.

But it is notable for its length: 6 days.

Previous extensions had moved the goalposts by about 3 weeks to a month, with the latest on November 22 expiring tomorrow. The new delay sets a deadline for next Monday, December 16, the same day by which the UK Competition and Markets Authority has to give its initial ruling on the deal. And they already reportedly have lined up an OK from the FTC staff – although that’s only one level of a multi-step process.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 67,200+ biopharma pros reading Endpoints daily — and it's free.

KalVis­ta's di­a­bet­ic mac­u­lar ede­ma da­ta falls short — will Mer­ck walk away?

Merck’s 2017 bet on KalVista Pharmaceuticals may have soured, after the UK/US-based biotech’s lead drug failed a mid-stage study in patients with diabetic macular edema (DME).

Two doses of the intravitreal injection, KVD001, were tested against a placebo in a 129-patient trial. Patients who continued to experience significant inflammation and diminished visual acuity, despite anti-VEGF therapy, were recruited to the trial. Typically patients with DME — the most frequent cause of vision loss related to diabetes — are treated with anti-VEGF therapies such as Regeneron’s flagship Eylea or Roche’s Avastin and Lucentis.