Buzz: Will Brent Saun­ders split up Al­ler­gan if he los­es the Resta­sis patent fight?

With its stock trad­ing south of $200 af­ter the big Resta­sis set­back on the patent front, you can hear the grow­ing buzz of an­a­lysts ea­ger­ly spec­u­lat­ing about the chance that Al­ler­gan $AGN may soon be forced to break up the com­pa­ny to de­liv­er for in­vestors.

Brent Saun­ders, CEO Al­ler­gan

As you may have heard, a fed­er­al judge re­cent­ly in­val­i­dat­ed the Resta­sis patents for ob­vi­ous­ness, the kind of slap down that has a high like­li­hood of stand­ing up un­der ap­peal. So with its $1.5 bil­lion fran­chise ther­a­py tee­ter­ing on the brink, it’s easy to see how hiv­ing off Al­ler­gan’s sta­ble and prof­itable aes­thet­ics busi­ness — built around Botox — could work in its fa­vor.

Ron­ny Gal took a look at the num­bers, chat­ted about it with Al­ler­gan CEO Brent Saun­ders, and con­clud­ed that “if 2018 does not go well, split­ting the com­pa­ny will be­come a re­al op­tion.”

To be sure, Saun­ders cau­tioned that the dis­cus­sion is way too pre­ma­ture at this point, but Gal says it seems ob­vi­ous that he’s giv­en it some thought.

The eco­nom­ics of a split cen­ters on the share price. A split may well fo­cus a lot more at­ten­tion on the val­ue of the aes­thet­ics di­vi­sion, giv­ing in­vestors a big pay­back.

Al­ler­gan, mean­while, just out-li­censed a port­fo­lio of small mol­e­cules to Syn­dax af­ter a long run­ning deal spree in which it ab­sorbed a pipeline of new ex­per­i­men­tal prod­ucts, so the phar­ma side of the busi­ness with the pipeline has a good shot at stand­ing on its own two feet quite well.

I’ll add here that Saun­ders has been a stand­out on the deals front for sev­er­al years now. He cre­at­ed Al­ler­gan in a se­ries of ac­qui­si­tions, sell­ing off the gener­ics busi­ness to Te­va at just the right time. While he was de­nied a chance at com­plet­ing a merg­er with Pfiz­er, he’s a rest­less wheel­er-and-deal­er at heart. And if a strate­gic split at the right time makes sense, he won’t be sen­ti­men­tal about it.

It hasn’t helped Saun­ders that the patent rul­ing came with a se­vere dress­ing down from the judge on the com­pa­ny’s deal with the Saint Reg­is Mo­hawk Tribe for “rent­ing” its sov­er­eign im­mu­ni­ty. That deal, pay­ing the tribe to hold the patents and then leas­ing back the rights, has trig­gered a tem­pest in Wash­ing­ton DC, where it’s very much open sea­son on any phar­ma com­pa­nies that look like they’re try­ing to pro­tect high brand­ed drug prices at the ex­pense of their con­stituents.

Phar­ma is in the busi­ness of do­ing good, pro­vid­ed it can make a con­sid­er­able amount of mon­ey in the process. And Al­ler­gan has the same pres­sure to per­form on the rev­enue and prof­it side of the busi­ness as any­one else sell­ing a prod­uct. They can just ex­pect to get held to a dif­fer­ent stan­dard for how they go about it.

This dis­cus­sion about split­ting Al­ler­gan is just start­ing. But an­a­lysts can’t spec­u­late of­ten enough about a big po­ten­tial break up. So ex­pect to hear a lot more about this in the months to come.

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan

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.

AbbVie $ABBV has agreed to pay $188.24 a share — cash and stock — for the troubled Allergan, reflecting a 45% premium as investors bid up shares in anticipation of a much buzzed about company split. That price — with each share of Allergan worth 0.8660 AbbVie shares and $120.30 in cash — reflects a sharp fall from the $330 peak for Allergan and Saunders 4 years ago — but much better than anything shareholders had in mind for the near future.

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UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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With 4 more biotech IPOs due to wrap up Q2, how is the class of 2019 far­ing?

With 22 biotech IPOs on the books and four more set to price in the last week of June, in­vest­ment ad­vis­er Re­nais­sance Cap­i­tal has tak­en the pulse of the re­cent rush.

By the IPO ex­perts’ count, 25 out of 32 health­care of­fer­ings this year have been from biotechs — dif­fer­ing slight­ly from Brad Lon­car’s tal­ly — and the over­all pic­ture is one of un­der­per­for­mance. While they av­er­aged a first-day re­turn of 9.0%, col­lec­tive­ly they have trad­ed down to a 5.9% re­turn. Turn­ing Point $TP­TX and Cor­texyme $CRTX emerged on top at the half-year mark, ris­ing 135% and 109% re­spec­tive­ly.

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.

Eye­ing a $500M peak sales pot, Almi­rall dou­bles down on le­brik­izum­ab as Der­mi­ra lines up PhI­II

With eyes on what it be­lieves is a $500 mil­lion peak rev­enue op­por­tu­ni­ty in Eu­rope, Barcelona-based Almi­rall has stepped up with $50 mil­lion in cash to take up the op­tion on Der­mi­ra’s IL-13 an­ti-in­flam­ma­to­ry drug le­brik­izum­ab just ahead of the start of Phase III. And there’s an­oth­er $30 mil­lion due as the late-stage pro­gram gets geared up.

That shouldn’t be long from now, as Der­mi­ra ex­pects to be­gin the late-stage tri­al work for atopic der­mati­tis be­fore the end of this year as it fol­lows a trail that ex­ecs in­sist leads to block­buster re­turns. Along the way, they’ll need to take on the 600-pound go­ril­la in atopic der­mati­tis: the IL-13/IL-4 drug Dupix­ent, from Re­gen­eron and Sanofi. Ri­vals al­so in­clude Leo Phar­ma, in its piv­otal with tralok­izum­ab, and Anap­tys­Bio in the hunt with a mid-stage pro­gram for etokimab, pre­vi­ous­ly re­ferred to as ANB020.

Suf­fer­ing No­var­tis part­ner Cona­tus is pack­ing it in on NASH af­ter a se­ries of un­for­tu­nate tri­al events

The NASH par­ty is over at No­var­tis-backed Cona­tus. And this time they’re turn­ing off the lights.

More than 2 years af­ter No­var­tis sur­prised the biotech in­vest­ment com­mu­ni­ty with its $50 mil­lion up­front and promise of R&D sup­port to part­ner with the lit­tle biotech on NASH — ig­nit­ing a light­ning strike for the share price — Cona­tus $CNAT is back with the lat­est bit­ter tale to tell about em­ri­c­as­an, which once in­spired con­fi­dence at the phar­ma gi­ant.

Bet­ter than Am­bi­en? Min­er­va soars on PhI­Ib up­date on sel­torex­ant for in­som­nia

A month af­ter roil­ing in­vestors with what skep­tics dis­missed as cher­ry pick­ing of its de­pres­sion da­ta, Min­er­va is back with a clean slate of da­ta from its Phase IIb in­som­nia tri­al.

In a de­tailed up­date, the Waltham, MA-based biotech said sel­torex­ant (MIN-202) hit both the pri­ma­ry and sev­er­al sec­ondary end­points, ef­fec­tive­ly im­prov­ing sleep in­duc­tion and pro­long­ing sleep du­ra­tion. In­ves­ti­ga­tors made a point to note that the ef­fects were con­sis­tent across the adult and el­der­ly pop­u­la­tions, with the lat­ter more prone to the sleep dis­or­der.

Gene ther­a­py biotech sees its stock rock­et high­er on promis­ing re­sults for rare cas­es of but­ter­fly dis­ease

Shares of Krys­tal Biotech took off this morn­ing $KRYS af­ter the lit­tle biotech re­port­ed promis­ing re­sults from its gene ther­a­py to treat a rare skin dis­ease called epi­der­mol­y­sis bul­losa.

Fo­cus­ing on an up­date with 4 new pa­tients, re­searchers spot­light­ed the suc­cess of KB103 in clos­ing some stub­born wounds. Krys­tal says that of 4 re­cur­ring and 2 chron­ic skin wounds treat­ed with the gene ther­a­py, the KB103 group saw the clo­sure of 5. The 6th — a chron­ic wound, de­fined as a wound that had re­mained open for more than 12 weeks — was par­tial­ly closed. That brings the to­tal so far to 8 treat­ed wounds, with 7 clo­sures.

Ab­b­Vie gets a green light to re­sume re­cruit­ing pa­tients for one myelo­ma study — but Ven­clex­ta re­mains un­der a cloud

Three months af­ter reg­u­la­tors at the FDA forced Ab­b­Vie to halt en­rolling pa­tients in its tri­als of a com­bi­na­tion us­ing Ven­clex­ta (vene­to­clax) to treat drug-re­sis­tant cas­es of mul­ti­ple myelo­ma, the agency has green-light­ed the re­sump­tion of one of those stud­ies, while keep­ing the rest on the side­lines.

The CANO­VA (M13-494) study can now get back in busi­ness re­cruit­ing pa­tients to test the drug for a pop­u­la­tion that shares a par­tic­u­lar ge­net­ic bio­mark­er. To get that per­mis­sion, Ab­b­Vie — which is part­nered with Roche on this pro­gram — was forced to re­vise the pro­to­col, mak­ing un­spec­i­fied changes in­volv­ing risk mit­i­ga­tion mea­sures, pro­to­col-spec­i­fied guide­lines and an up­dat­ed fu­til­i­ty cri­te­ria.