Cal­lid­i­tas bets up to $102M on a biotech buy­out, snag­ging a once-failed PBC drug

Af­ter spend­ing years de­vel­op­ing its oral for­mu­la­tion of the cor­ti­cos­teroid budes­onide, Swe­den’s Cal­lid­i­tas now has its sights set on the pri­ma­ry bil­iary cholan­gi­tis field.

The com­pa­ny will buy out France-based Genky­otex, and it’s will­ing to bet up to €87 mil­lion ($102 mil­lion) that Genky­otex’s failed Phase II drug, GKT831, will do bet­ter in late-stage tri­als.

Un­der the cur­rent agree­ment, Cal­lid­i­tas $CALT will ini­tial­ly pay €20.3 mil­lion in cash for 62.7% of Genky­otex (or €2.80 a piece for 7,236,515 shares) in ear­ly Oc­to­ber, then cir­cle back for the rest of Genky­otex’s shares un­der the same terms. If noth­ing changes, the whole buy­out will cost Cal­lid­i­tas €32.3 mil­lion, plus up to  €55 mil­lion in con­tin­gent rights.

Renée Aguiar-Lu­can­der

“We be­lieve this trans­ac­tion rep­re­sents an ex­cit­ing ex­pan­sion of our pipeline in or­phan dis­eases re­lat­ed to in­flam­ma­tion and fi­bro­sis,” Cal­lid­i­tas CEO Renée Aguiar-Lu­can­der said in a pre­pared state­ment. “We be­lieve Genky­otex’s nov­el NOX in­hi­bi­tion tech­nol­o­gy may have broad clin­i­cal util­i­ty not just in PBC, but as a plat­form ther­a­py with the po­ten­tial to tar­get oth­er fi­brot­ic in­di­ca­tions, in­clud­ing Pri­ma­ry Scle­ros­ing Cholan­gi­tis (PSC), se­lect­ed kid­ney dis­eases and Id­io­path­ic Pul­monary Fi­bro­sis (IPF), in which an in­ves­ti­ga­tor led Phase 2 tri­al is ex­pect­ed to start re­cruit­ment lat­er this year.”

Last year, Genky­otex set out to mea­sure gam­ma glu­tamyl transpep­ti­dase re­duc­tion in a Phase II tri­al for PBC. Re­searchers not­ed a 19% re­duc­tion in GGT, but deemed it sta­tis­ti­cal­ly in­signif­i­cant af­ter 24 weeks. GKT831 (se­tanax­ib) did, how­ev­er, meet sec­ondary end­points. The drug led to a re­duc­tion in al­ka­line phos­phatase, and a 22% re­duc­tion in liv­er stiff­ness for a sub­group of pa­tients who had more se­vere fi­bro­sis, com­pared to a 4% in­crease in place­bo.

At the time, Genky­otex CEO Elias Pa­p­atheodor­ou said the re­sults were good enough to ad­vance GSK831 in­to late-stage tri­als for PBC and oth­er fi­brot­ic liv­er dis­eases. Now Cal­lid­i­tas will seek to prove Pa­p­atheodor­ou right. It plans to push GSK831 in­to late-stage de­vel­op­ment for PBC, and al­so be­gin a Phase II tri­al for Id­io­path­ic Pul­monary Fi­bro­sis lat­er this year.

If the drug wins cer­tain reg­u­la­to­ry ap­provals or mar­ket­ing au­tho­riza­tions with­in 10 years of the buy­out, block sell­ers and Genky­otex share­hold­ers stand to pock­et up to €55M, in­clud­ing:

  • €30M on FDA ap­proval for a first in­di­ca­tion
  • €15M on EC ap­proval for a first in­di­ca­tion
  • €10M on FDA or EC ap­proval for ei­ther IPF or type 1 di­a­betes (un­less the mile­stone was al­ready paid out for such in­di­ca­tion by the FDA or the EC)

Cal­lid­i­tas’ steroid Ne­fe­con is cur­rent­ly in Phase III tri­al for IgA nephropa­thy. In June, the com­pa­ny raised $90 mil­lion in an IPO, at $19.50 a share.

“We look for­ward to lever­ag­ing our strong late stage clin­i­cal team, CMC and reg­u­la­to­ry ex­per­tise as well as our learn­ings from our Phase 3 Ne­fe­con pro­gram to nav­i­gate and ex­e­cute an ef­fi­cient path for­ward for se­tanax­ib. We con­tin­ue to de­liv­er on our strat­e­gy fo­cus­ing on adding late stage as­sets with an or­phan fo­cus and en­cour­ag­ing da­ta in pa­tients to build a com­pa­ny fo­cused on de­liv­er­ing so­lu­tion for pa­tients with dis­eases with high un­met needs,” Aguiar-Lu­can­der added lat­er.

Secretary of health and human services Alex Azar speaking in the Rose Garden at the White House (Photo: AFP)

Trump’s HHS claims ab­solute au­thor­i­ty over the FDA, clear­ing path to a vac­cine EUA

The top career staff at the FDA has vowed not to let politics overrule science when looking at vaccine data this fall. But Alex Azar, who happens to be their boss’s boss, apparently won’t even give them a chance to stand in the way.

In a new memorandum issued Tuesday last week, the HHS chief stripped the FDA and other health agencies under his purview of their rule making ability, asserting all such power “is reserved to the Secretary.” Sheila Kaplan of the New York Times first obtained and reported the details of the September 15 bulletin.

#ES­MO20: Push­ing in­to front­line, Mer­ck and Bris­tol My­ers duke it out with new slate of GI can­cer da­ta

Having worked in parallel for years to move their respective PD-1 inhibitors up to the first-line treatment of gastrointestinal cancers, Merck and Bristol Myers Squibb finally have the data at ESMO for a showdown.

Comparing KEYNOTE-590 and CheckMate-649, of course, comes with the usual caveats. But a side-by-side look at the overall survival numbers also offer some perspective on a new frontier for the reigning checkpoint rivals, both of whom are claiming to have achieved a first.

President Donald Trump (via AP Images)

Signs of an 'Oc­to­ber Vac­cine Sur­prise' alarm ca­reer sci­en­tists

President Donald Trump, who seems intent on announcing a COVID-19 vaccine before Election Day, could legally authorize a vaccine over the objections of experts, officials at the FDA and even vaccine manufacturers, who have pledged not to release any vaccine unless it’s proved safe and effective.

In podcasts, public forums, social media and medical journals, a growing number of prominent health leaders say they fear that Trump — who has repeatedly signaled his desire for the swift approval of a vaccine and his displeasure with perceived delays at the FDA — will take matters into his own hands, running roughshod over the usual regulatory process.

UP­DAT­ED: Two wild weeks for Grail end in $8B Il­lu­mi­na buy­out

Grail’s whirlwind two weeks have ended in the wealthy arms of its former founder and benefactors.

Illumina has shelled out $8 billion to reacquire the closely-watched liquid biopsy startup they spun out just 5 years ago and sold off much of its shares just 3 years ago. The deal comes nearly two weeks after the well-heeled startup filed for a potentially massive IPO — one that was disrupted just a week later when Bloomberg reported that Illumina was in talks to buy their former spinout for up to $8 billion.

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Roche vaults to the front of the NL­RP3 clin­i­cal race, pay­ing $448M up­front to bag In­fla­zome

Roche is going all in on NLRP3.

The pharma giant is putting down $448 million (€380 million) upfront to snatch Novartis-backed Inflazome, which makes it a clinical player in the space overnight.

Dublin and Cambridge, UK-based Inflazome is the second NLRP3-focused biotech Roche has acquired in less than two years, and although no numbers were disclosed in the Jecure buyout, this is almost certainly a much larger deal.

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#ES­MO20: Bris­tol My­ers marks Op­di­vo's sec­ond ad­ju­vant win — eye­ing a stan­dard of care gap

Moving into earlier and earlier treatment lines, Bristol Myers Squibb is reporting that adjuvant treatment with Opdivo has doubled the time that esophageal or gastroesophageal junction cancer patients stay free of disease.

With the CheckMate-577 data at ESMO, CMO Samit Hirawat said, the company believes it can change the treatment paradigm.

While a quarter to 30% of patients typically achieve a complete response following chemoradiation therapy and surgery, the rest do not, said Ronan Kelly of Baylor University Medical Center. The recurrence rate is also high within the first year, Hirawat added.

Clay Siegall (Life Science Washington via YouTube)

#ES­MO20: Seat­tle Ge­net­ics eyes 4th ap­proval with new da­ta in a crowd­ed field

Does Seattle Genetics have another approval on its hands?

The last 12 months, not so great for the world, has been great for Seattle Genetics. The company landed two separate FDA approvals, signed a $4.5 billion deal with Merck and watched antibody-drug conjugates — the technology they spent years developing to broad industry skepticism — emerge suddenly as one of the most popular approaches in oncology. And on Monday at ESMO, the company and their partners at Genmab unveiled the data behind the ADC it hopes will provide its next major FDA approval.

Jonathan Rigby, Immune Regulation group CEO

Im­mune Reg­u­la­tion, tak­ing two clin­i­cal pro­grams to 're­set' the im­mune sys­tem, nets $53M+ Se­ries B

A little under two years after a company rebranding, Immune Regulation is taking an even bigger step toward advancing its goals.

Formerly known as Peptinnovate, the British biotech announced a $53.4 million Series B early Monday morning, helping to further advance two clinical programs in rheumatoid arthritis and asthma. Though those are the two initial indications the company is focusing on, CEO Jonathan Rigby told Endpoints News he hopes the candidates can be applied to a broad swath of autoimmune disorders.

Israel Lowy (Regeneron)

#ES­MO20: 'As good as any PD-1 out there': Re­gen­eron flash­es PD-(L)1 lung can­cer da­ta to ri­val Mer­ck

Regeneron entered the PD-(L)1 game late, so they devised a two-pronged strategy to catch up with Big Pharma rivals: They would push it into cancers where PD-1s had yet been tested, and they would prove that it’s as powerful in the big indications as any other on the market.

They cleared a hurdle on the first goal Friday, showing a 31% response in patients with the rare skin cancer basal cell carcinoma. And with the data they’re rolling out Monday, Regeneron cancer chief Israel Lowy is ready to declare success on the second.