Cel­gene scoops up fresh­man au­toim­mune start­up Delinia in $775M buy­out

Four months ago, At­las Ven­ture part­ner Saurabh Sa­ha set up shop at the new­born Delinia with a pre­clin­i­cal au­toim­mune drug, $35 mil­lion in start­up cash and a skele­ton crew. To­day, Cel­gene says it struck a deal to buy the start­up for $300 mil­lion up front and up to $475 mil­lion in mile­stones, adding a new drug for its au­toim­mune and in­flam­ma­tion pipeline.

Cel­gene is get­ting a pre­clin­i­cal lead pro­gram in the deal, which cen­ters pri­mar­i­ly on DEL106, as well as re­lat­ed sec­ond gen­er­a­tion pro­grams. DEL106 is an IL-2 mutein Fc fu­sion pro­tein de­signed to up­reg­u­late reg­u­la­to­ry T cells (Tregs), im­mune cells that are crit­i­cal to main­tain­ing nat­ur­al self-tol­er­ance — and avoid­ing au­toim­mune dis­eases.

There’s a long list of dis­eases trig­gered when the bal­ance of Tregs and T ef­fec­tor cells is dis­rupt­ed and the im­mune sys­tem starts to at­tack healthy tis­sue. By ex­pand­ing Tregs, amp­ing up ac­tiv­i­ty, Sa­ha set out be­liev­ing that Delinia’s drug can re­store im­mune tol­er­ance and home­osta­sis, stop­ping dis­eases like lu­pus, Type 1 dis­eases and fi­brot­ic dis­eases like scle­ro­der­ma.

The deal clear­ly comes with a big cash pay­out to At­las — which has nev­er been re­luc­tant to take a good mul­ti­ple for ear­ly-stage as­sets like this — as well as Sofinno­va Part­ners, the Paris-based VC group that co-led the round. And there’s al­so plen­ty of up­side left if the tech works as hoped. For Cel­gene, it’s yet an­oth­er ac­qui­si­tion for a deal team that has been strik­ing a broad range of pacts over the years.

In a blog post this morn­ing, At­las’ Bruce Booth wrote:

Over the past decade, Cel­gene has built an im­pres­sive I&I port­fo­lio of both in­ter­nal­ly-dis­cov­ered and ex­ter­nal­ly-sourced pro­grams. Ote­zla (apremi­last) is their flag­ship I&I med­i­cine to­day (fastest pso­ri­a­sis drug to hit $1B in sales from launch) and was dis­cov­ered at Cel­gene; be­hind it are sev­er­al ad­di­tion­al home­grown pro­grams ear­li­er in de­vel­op­ment (e.g., im­munomod­u­la­tor CC-220 and an­ti-fi­brot­ic CC-90001). Cel­gene’s I&I pipeline al­so has sev­er­al high pro­file ex­ter­nal­ly-sourced ther­a­pies, in­clud­ing mon­gersen/GED-0301 (via a li­cense with No­gra Phar­ma) and ozan­i­mod (via ac­qui­si­tion of Re­cep­tos). They’ve al­so been at the fore­front of chang­ing the au­toim­mune treat­ment par­a­digm, such as with the re­cent deal with Anokion on tol­er­ance in­duc­tion. The Delinia pro­grams fit nice­ly in­to this grow­ing port­fo­lio, and com­ple­ment sev­er­al of these I&I ap­proach­es – which was a big dri­ver for Cel­gene’s over­all in­ter­est in the sto­ry.

Delinia ex­ecs Sa­ha and Jeff Tong, chair­man, told me in a fol­low-up in­ter­view that the ear­ly buy­out came up as they be­gan to strike up in­tro­duc­to­ry con­tacts aimed at es­tab­lish­ing some longterm talks with key play­ers in the field. Their sto­ry of a new tech­nol­o­gy that could have a pro­found im­pact on au­toim­mune dis­eases — even though it was still pre­clin­i­cal — at­tract­ed keen at­ten­tion from sev­er­al play­ers, in­clud­ing an un­ex­pect­ed in­bound call from one com­pa­ny that helped get the bid­ding go­ing for far more than what At­las had in­vest­ed in seed and ear­ly A cash.

“It was not a for­mal auc­tion,” Tong tells me, “but there was a very com­pet­i­tive lev­el of in­ter­est.”

Not yet de­cid­ed is what hap­pens with the Delinia team. Sa­ha says those dis­cus­sions are con­tin­u­ing with Cel­gene.

Co-founder and the new chief sci­en­tif­ic of­fi­cer at Delinia, Jef­frey Greve, is cred­it­ed with much of the dis­cov­ery work for their cy­tokine. Com­pa­ny co-founder Michael Rosen­blum is the as­sis­tant pro­fes­sor of der­ma­tol­ogy at the UCSF School of Med­i­cine.

“Delinia is at the fore­front of ad­vanc­ing new ap­proach­es to treat­ing pa­tients with se­vere and de­bil­i­tat­ing au­toim­mune dis­eases,” said Ru­pert Vessey, FR­CP DPhil, Pres­i­dent of Re­search and Ear­ly De­vel­op­ment for Cel­gene Cor­po­ra­tion. “We look for­ward to pro­gress­ing DEL106 in­to the clin­ic next year.”

RWE chal­lenges for to­day's bio­phar­ma

The rapid development of technology — and the resulting avalanche of data — are catalysts for significant change in the biopharmaceutical industry. This translates into urgent pressures for today’s biopharma, including a need to quickly and affordably develop products with proven therapeutic efficacy and value. This urgency is expedited by the growth of value-based contracting, where access to reimbursement and profit depends on these abilities.

UP­DAT­ED: In a stun­ning turn­around, Bio­gen says that ad­u­canum­ab does work for Alzheimer's — but da­ta min­ing in­cites con­tro­ver­sy and ques­tions

Biogen has confounded the biotech world one more time.

In a stunning about-face, the company and its partners at Eisai say that a new analysis of a larger dataset on aducanumab has restored its faith in the drug as a game-changer for Alzheimer’s and, after talking it over with the FDA, they’ll now be filing for an approval of a drug that had been given up for dead.

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As shares suf­fer from a lin­ger­ing slump, a bruised Alk­er­mes slash­es 160 jobs in R&D re­struc­tur­ing

With its share price in a deep slump after suffering through a regulatory debacle over their depression drug ALKS 5461, Alkermes CEO Richard Pops is taking the ax to its R&D organization in a restructuring aimed at cutting costs ahead of its next attempt at a rollout in a tough field.

Richard Pops, Endpoints via Youtube

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Acor­da's Ron Co­hen brings the ax back out as new drug sales on­ly trick­le in while cash cow is led to the slaugh­ter

With its new drug earning meager sums and its one-time cash cow reduced to a bony shadow of its former self, Acorda Therapeutics today is rolling out a new restructuring aimed at slashing the staff and cutting costs to get through the hard times ahead.

The biotech is chopping a quarter of its staff today, carving back R&D as well as SG&A expenses. And CEO Ron Cohen is cutting deep.

Under the new austerity budget, Acorda’s R&D expenses for the full year 2019 are expected to be $55 – $60 million, reduced from $70 – $80 million. SG&A expenses for the full year 2019 are expected to be $185 – $190 million, reduced from $200 – $210 million. R&D expenses for the full year 2020 are expected to be $20 – $25 million and SG&A
expenses for the full year 2020 are expected to be $160 – $165 million.

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RAPT Ther­a­peu­tics re­turns to Wall Street to re­vive IPO bid

On May 24, FLX Bio, a small cancer and inflammation biotech with backing from GV, changed its name to RAPT Therapeutics and filed confidentially for an IPO. On July 5th, they filed to raise up to $86 million. On July 22, they announced the IPO with a $75 million goal.  And on August 1, they abruptly and without explanation called it all off.

Now, without explanation, they’re reviving the bid, filing again for a $75 million IPO, this time with a new bookrunner and a new drug candidate in the clinic. The terms will be the same: 5 million shares at $14-$16 per share. It would give them a diluted market value of $351 million.

EY vet set to re­place re­tir­ing Am­gen CFO Meline

Ahead of its third-quarter results next week, Amgen on Tuesday disclosed the planned retirement of David Meline, who has served as the company’s chief financial officer since 2014.

Meline will be replaced by Ernst & Young vet, Peter Griffith, as CFO come January 1, 2020 — but until then Griffith will serve as executive vice president, finance.

“Over the last 5 years at Amgen, Meline instituted many major changes that led to operational efficiencies and margin expansion while successfully returning cash to shareholders. Now that Amgen is on solid footing, it was a good time to step away,” Cowen’s Yaron Werber wrote in a note. “We do not anticipate any major changes to strategy or operations immediately due to this transition as Amgen is on solid footing.”

Eli Lil­ly’s USA, di­a­betes chief En­rique Con­ter­no is head­ing out af­ter 27 years, and he’s be­ing re­placed by a com­pa­ny in­sid­er

Close to 3 years after Eli Lilly CEO Dave Ricks added the title of president of the US operations to Enrique Conterno’s resume, which included his helmsmanship of the diabetes franchise, the Peruvian born exec is set to retire after a 27-year run at the pharma giant.

Lilly put out the news just as it was posting Q3 results, with a mix of upbeat and downbeat results in the latest set of numbers from Lilly.
Conterno — a grizzled, deeply experienced and sometimes gruff veteran of the pharma world — was a high-profile figure at Lilly, stepping up to expanded duties as the company was forced to deal with intense pricing pressure on the diabetes side of the business. He had replaced outgoing US president Alex Azar, who later popped up as head of Health and Human Services in the Trump administration.
As head of the diabetes unit, Conterno had to deal with an extraordinarily competitive field as payers demanded bigger discounts. Trulicity’s success helped generate new revenue for the company, but Q3’s miss on revenue had a lot to do with the need for discounting the drug ahead of Novo Nordisk’s rival therapy, Rybelsus, which was priced on the wholesale level at an almost identical rate.

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No­var­tis hands off $80M in cash to part­ner up with a top biotech play­er in the fi­bro­sis sec­tor

Never underestimate the power of a good showing at a scientific conference.
In a presentation late last year, the researchers at Pliant Therapeutics launched a series of discussions about the preclinical data they were pulling together around their work on their small-molecule integrin inhibitor aimed at transforming growth factor beta, or TGF-β, a key pathway involved in fibrosis.
And they got some serious attention for the work.
“We got interest from pharma partners and at the end Novartis basically made it,” says Pliant CEO Bernard Coulie.

Is there a recipe for M&A suc­cess? The best and worst buy­out deals in the past decade of­fer some keys to suc­cess — and fail­ure

It’s not easy achieving a solid win in M&A in this industry. But if you follow a few simple guidelines, you may be able to increase your odds of success.
Geoffrey Porges and the team at SVB Leerink went about the “notoriously difficult” task of scoring the biopharma buyout of 2009 to 2019. Sizing up current and expected revenue from the products that were gained, they came up with the 5 winners:
Merck/Schering Plough
Bristol/Medarex
Gilead/Pharmasset
Sanofi/Genzyme
AstraZeneca/Acerta
It says a lot about the field that it’s much easier sorting out the 5 worst deals, though there’s also a lot more competition for that title, notes Porges. As picked by the analysts:
J&J/Actelion
Merck/Cubist
Alexion/Synageva
AbbVie/Stemcentrx
Gilead/Kite

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