Bris­tol-My­ers makes a de­ci­sive move to fix its R&D prob­lem; Let's not un­der­es­ti­mate Trump now

End­points as­sess­es the big bio­phar­ma sto­ries of the week, with a lit­tle added com­men­tary on what they mean for the in­dus­try.


Bris­tol-My­ers steps up to fix a de­railed R&D or­ga­ni­za­tion. But ques­tions linger

No big bio­phar­ma has suf­fered a big­ger set­back than Bris­tol-My­ers Squibb’s back­ward march on Op­di­vo. Over­reach­ing in lung can­cer, they have for­feit­ed their lead role on one of the biggest new drug fran­chis­es in the in­dus­try. In a busi­ness where not screw­ing up is half the game, they blew it. And this is a com­pa­ny that has had one of the most in­no­v­a­tive and pro­duc­tive R&D op­er­a­tions of the past decade.

Com­pa­ny ex­ecs have been keep­ing a stiff up­per lip about it all, but heads had to roll, and chief sci­en­tist Fran­cis Cuss was a nat­ur­al choice for the chop­ping block. In his place, the com­pa­ny turned to a very dis­tin­guished gen­tle­man on the board, Tom Lynch, a Mass Gen­er­al vet­er­an.

Lynch has had an ex­tra­or­di­nary ca­reer, but turn­ing to a board mem­ber with such a long re­sume has to raise ques­tions about just how long he plans to stay and what he hopes to ac­com­plish. Bris­tol-My­ers now has to fight back at a time the R&D group — a top-15 group that con­sumes $5 bil­lion a year – is un­der­go­ing a re­vamp.

Wrestling with Bris­tol-My­ers’ R&D chal­lenges is a mighty task. The stakes are enor­mous. Let’s hope Lynch is up to the task.

This is not the time to stop tak­ing Trump se­ri­ous­ly

Bloomberg’s Max Nisen to­day writes that “Trump’s tweets are still dan­ger­ous, but it ap­pears in­creas­ing­ly like­ly he’s just cry­ing wolf.” And he fol­lows up with the lat­est, more mut­ed re­sponse by in­vestors to Trump’s lat­est war cry for drug price re­form.

It’s too ear­ly, though, to pooh-pooh what Trump has in mind. Rep. Eli­jah Cum­mings came out of his meet­ing with Trump this week clear­ly pumped that the pres­i­dent had cheered his bill for a fed­er­al for­mu­la­ry for Medicare. And Trump ap­par­ent­ly sug­gest­ed that he was fine with diss­ing many Re­pub­li­cans in the process, look­ing to sat­is­fy the base with an open­ly pop­ulist po­si­tion.

These next few months are go­ing to be ab­solute­ly crit­i­cal for bio­phar­ma. I was chat­ting with a biotech CEO a few weeks ago who was clear­ly steamed at the idea that the full force of the fed­er­al gov­ern­ment could be brought to bear on drug prices. A for­mu­la­ry, threat­en­ing to leave out drugs in or­der to lever­age low­er prices, was un­ac­cept­able to him.

At the time, I dis­count­ed the no­tion that Medicare price ne­go­ti­a­tions would be dra­con­ian, es­pe­cial­ly with a Re­pub­li­can in the White House. But Trump is push­ing hard to de­liv­er on a fre­quent­ly re­peat­ed promise now. And dra­con­ian is ex­act­ly how he sounds. Com­bined with a promise to dereg­u­late drug de­vel­op­ment, what­ev­er that means, Trump does not in­spire con­fi­dence or clar­i­ty in what’s in store for the in­dus­try.

It’s time to tread care­ful­ly on these is­sues. Writ­ing Trump off now as a blowhard would be a ter­ri­ble mis­cal­cu­la­tion. In Wash­ing­ton DC, the dev­il is al­ways in the de­tails of new leg­is­la­tion. Let’s pay care­ful at­ten­tion to what law­mak­ers are ham­mer­ing out.

A new re­view com­par­ing R&D bud­gets to US pre­mi­um pric­ing stokes an un­end­ing ar­gu­ment

Some­times, you know ear­ly on when you’ve hit a nerve with a sto­ry. And so it was with my piece on a new study about the dis­con­nect be­tween R&D bud­gets and the pre­mi­um prices that Amer­i­cans pay for drugs.

An­a­lysts at Memo­r­i­al Sloan-Ket­ter­ing took a look at just how big US pre­mi­ums are com­pared to the rest of the de­vel­oped world and de­ter­mined that they more than paid for the top com­pa­nies’ to­tal R&D bud­gets. Then they called the in­dus­try out for its pi­ous protests about need­ing high prices to pay for in­no­va­tion.

Quite a few of the peo­ple in the Twit­ter­verse ob­ject­ed, for the ob­vi­ous rea­son that these com­pa­nies are in busi­ness to make a prof­it, not cov­er costs. And then both sides were off and run­ning, snip­ing back and forth about what drug com­pa­nies are about.

The de­bate — a healthy one, I think — sim­ply un­der­scores the in­her­ent con­flict with­in Big Phar­ma. These com­pa­nies con­stant­ly in­sist to the pub­lic that their chief mis­sion is to help pa­tients. And then they turn around and cheer big prof­its to Wall Street.

As one an­a­lyst point­ed out to me in an email ex­change, Ap­ple has a much big­ger prof­it mar­gin than Big Phar­mas. Ap­ple sells a prod­uct, though, which con­sumers want but don’t have to have, so no one chal­lenges what they charge or its re­la­tion to the R&D bud­get. The bet­ter the drug, the more it’s ab­solute­ly re­quired, and the more it costs.

At some point the bio­phar­ma busi­ness may fig­ure out how to re­solve the con­flict, but I doubt it.

The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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Af­ter watch­ing its share price soar on a Bloomberg re­port and heat­ed ru­mors, Bio­haven stock takes a bil­lion-dol­lar bath

Back in April, Biohaven Pharmaceutical became one hot biotech stock $BHVN based on a report in Bloomberg that some “potential bidders” had been kicking the tires at the biotech, which has a lead drug for migraines. Then the rumor mill really started to smoke when execs canceled a presentation at an investor conference a little more than a week ago.

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Arc­turus ex­pands col­lab­o­ra­tion, adding $30M cash; Ku­ra shoots for $100M raise

→  Rare dis­ease play­er Ul­tragenyx $RARE is ex­pand­ing its al­liance with Arc­turus $ARCT, pay­ing $24 mil­lion for eq­ui­ty and an­oth­er $6 mil­lion in an up­front as the two part­ners ex­pand their col­lab­o­ra­tion to in­clude up to 12 tar­gets. “This ex­pand­ed col­lab­o­ra­tion fur­ther so­lid­i­fies our mR­NA plat­form by adding ad­di­tion­al tar­gets and ex­pand­ing our abil­i­ty to po­ten­tial­ly treat more dis­eases,” said Emil Kakkis, the CEO at Ul­tragenyx. “We are pleased with the progress of our on­go­ing col­lab­o­ra­tion. Our most ad­vanced mR­NA pro­gram, UX053 for the treat­ment of Glyco­gen Stor­age Dis­ease Type III, is ex­pect­ed to move in­to the clin­ic next year, and we look for­ward to fur­ther build­ing up­on the ini­tial suc­cess of this part­ner­ship.”

UP­DAT­ED: Chica­go biotech ar­gues blue­bird, Third Rock 'killed' its ri­val, pi­o­neer­ing tha­lassemia gene ther­a­py in law­suit

Blue­bird bio $BLUE chief Nick Leschly court­ed con­tro­ver­sy last week when he re­vealed the com­pa­ny’s be­ta tha­lassemia treat­ment will car­ry a jaw-drop­ping $1.8 mil­lion price tag over a 5-year pe­ri­od in Eu­rope — mak­ing it the plan­et’s sec­ond most ex­pen­sive ther­a­py be­hind No­var­tis’ $NVS fresh­ly ap­proved spinal mus­cu­lar at­ro­phy ther­a­py, Zol­gens­ma, at $2.1 mil­lion. A Chica­go biotech, mean­while, has been fum­ing at the side­lines. In a law­suit filed ear­li­er this month, Er­rant Gene Ther­a­peu­tics al­leged that blue­bird and ven­ture cap­i­tal group Third Rock un­law­ful­ly prised a vi­ral vec­tor, de­vel­oped in part­ner­ship with the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter (MSK), from its grasp, and thwart­ed the de­vel­op­ment of its sem­i­nal gene ther­a­py.

Neil Woodford. Woodford Investment Management via YouTube

Wood­ford braces po­lit­i­cal storm as UK fi­nan­cial reg­u­la­tors scru­ti­nize fund sus­pen­sion

The shock of Neil Wood­ford’s de­ci­sion to block with­drawals for his flag­ship fund is still rip­pling through the rest of his port­fo­lio — and be­yond. Un­der po­lit­i­cal pres­sure, UK fi­nan­cial reg­u­la­tors are now tak­ing a hard look while in­vestors con­tin­ue to flee.

In a re­sponse let­ter to an MP, the Fi­nan­cial Con­duct Au­thor­i­ty re­vealed that it’s opened an in­ves­ti­ga­tion in­to the sus­pen­sion fol­low­ing months of en­gage­ment with Link Fund So­lu­tions, which tech­ni­cal­ly del­e­gat­ed Wood­ford’s firm to man­age its funds.

Gilead baits new al­liance with $45M up­front, div­ing in­to the busy pro­tein degra­da­tion field

Gilead is jump­ing on board the pro­tein degra­da­tion band­wag­on. And they’re turn­ing to a low-pro­file Third Rock start­up for the ex­per­tise. But if you were look­ing for a trans­for­ma­tion­al deal to kick up fresh en­thu­si­asm for Gilead, you’ll have to re­main pa­tient.

This one will have a long way to go be­fore they get in­to the clin­ic.

The big biotech said Wednes­day morn­ing that it is pay­ing $45 mil­lion up­front and re­serv­ing a whop­ping $2.3 bil­lion in biotech bucks if San Fran­cis­co-based Nurix can point the way to new can­cer ther­a­pies, as well as drugs for oth­er, un­spec­i­fied dis­eases.