Cel­gene’s $710M deal on mon­gersen im­plodes as Phase III Crohn's study flops

Cel­gene’s $710 mil­lion cash roll of the dice on the in­flam­ma­to­ry bow­el dis­ease drug mon­gersen (GED-301) has come up snake eyes.

The big biotech $CELG an­nounced Thurs­day evening that it is ter­mi­nat­ing the Phase III on Crohn’s af­ter it failed to pass muster in an in­ter­im fu­til­i­ty analy­sis. An­oth­er planned Phase III study is be­ing scrapped, and the team there will make a fi­nal de­ter­mi­na­tion if there’s any fu­ture left for this drug af­ter they com­plete an analy­sis of Phase II da­ta on ul­cer­a­tive col­i­tis.

Cel­gene’s stock plunged 7% on the news, tear­ing out a $7 bil­lion-plus chunk of its mar­ket cap.

Scott Smith, Cel­gene

Cel­gene COO Scott Smith presided over the brief last rites, say­ing that “while we are dis­ap­point­ed with the re­sults of RE­VOLVE, we re­main com­mit­ted to ad­vanc­ing our port­fo­lio of nov­el med­i­cines for pa­tients suf­fer­ing from this dis­ease and oth­er in­flam­ma­to­ry bow­el dis­or­ders.”

Al­most ex­act­ly three years ago to the day, the biotech spelled out promis­ing mid-stage da­ta for Crohn’s, ex­plain­ing why Cel­gene’s then CEO (now ex­ec­u­tive chair­man) Bob Hug­in had com­mit­ted to a deal worth up to $2.6 bil­lion with the lit­tle known Irish com­pa­ny No­gra.

Leerink’s Ge­of­frey Porges wrote it off as an un­for­tu­nate out­come trig­gered by an in­ex­pe­ri­enced team of deal­mak­ers at Cel­gene who rushed in­to this three years ago with way too much mon­ey up front. Notes Porges:

This dis­ap­point­ment is like­ly to cost the com­pa­ny up to $2bn in long-term rev­enue, and up to 4-5% in val­ue; it is al­so a painful re­minder of the costs of a “shots on goal” ap­proach to busi­ness de­vel­op­ment, and the per­ils of heav­i­ly front-loaded in­vest­ments in­to cat­e­gories where the or­ga­ni­za­tion lacks tech­ni­cal and com­mer­cial ex­per­tise.

The com­pa­ny now will shift all of its fo­cus to ozan­i­mod af­ter of­fer­ing a peek at the Phase II re­sults for Crohn’s and ul­cer­a­tive col­i­tis post­ed at the World Con­gress of Gas­troen­terol­o­gy at ACG2017 in Or­lan­do.

For Cel­gene, the mon­gersen deal helped il­lus­trate its will­ing­ness to bet big on clin­i­cal-stage as­sets. Mon­gersen is the biotech’s most ad­vanced ex­per­i­men­tal drug in its in­flam­ma­tion and im­munol­o­gy pipeline, where the com­pa­ny had high hopes for some block­buster break outs.

This one proved an ex­pen­sive fail­ure.

Hal Barron and Rick Klausner (GSK, Lyell)

Ex­clu­sive: GSK’s Hal Bar­ron al­lies with Rick Klaus­ner’s $600M cell ther­a­py start­up, look­ing to break new ground blitz­ing sol­id tu­mors

LONDON — Chances are, you’ve heard little or nothing about Rick Klausner’s startup Lyell. But that ends now.

Klausner, the former head of the National Cancer Institute, former executive director for global health at the Gates Foundation, co-founder at Juno and one of the leaders in the booming cell therapy field, has brought together one of the most prominent teams of scientists tackling cell therapy 2.0 — highlighted by a quest to bridge a daunting tech gap that separates some profound advances in blood cancers with solid tumors. And today he’s officially adding Hal Barron and GlaxoSmithKline as a major league collaborator which is pitching in a large portion of the $600 million he’s raised in the past year to make that vision a reality.

“We’ve being staying stealth,” Klausner tells me, then adding with a chuckle: “and going back to stealth after this.”

“Cell therapy has a lot of challenges,” notes Barron, the R&D chief at GSK, ticking off the resistance put up by solid tumors to cell therapies, the vein-to-vein time involved in taking immune cells out of patients, engineering them to attack cancer cells, and getting them back in, and more. “Over the years Rick and I talked about how it would be wonderful to take that on as a mission.”

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First place fin­ish: Eli Lil­ly just moved to fran­chise leader with their sec­ond mi­graine drug OK in 1 year

In a rare twist for Eli Lilly’s historically slow-moving R&D group, the pharma giant has seized bragging rights to a first-in-class new drug approval. And all signs point to an aggressive marketing followup as they look to outclass some major franchise rivals hobbled by internal dissension.

The FDA came through with an OK for lasmiditan on Friday evening, branding it as Reyvow and lining it up — once a substance classification comes through from the DEA — for a major market release. The oral drug binds to 5-HT1F receptors and is designed to stop an acute migraine after it starts. That makes it a complementary therapy to their CGRP drug Emgality, which has a statistically significant impact on preventing attacks.

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Court green-lights Clo­vis case af­ter de­tail­ing ev­i­dence the board ‘ig­nored red flags’ on false safe­ty and ef­fi­ca­cy da­ta

Clovis investors have cleared a major hurdle in their long-running case against the board of directors, with a Delaware court making a rare finding that they had a strong enough case against the board to proceed with the action.

In a detailed ruling at the beginning of the month that’s been getting careful scrutiny at firms specializing in biotech and corporate governance, the Delaware Court of Chancery found that the attorneys for the investors had made a careful case that the board — a collection of experts that includes high-profile biotech entrepreneurs, a Harvard professor and well-known investigator as well as Clovis CEO Patrick Mahaffy — repeatedly ignored obvious warnings that Mahaffy’s executive crew was touting inflated, unconfirmed data for their big drug Roci. Serious safety issues were also reportedly overlooked while the company continued a fundraising campaign that brought in more than a half-billion dollars. And that leaves the board open to claims related to their role in the fiasco.

The bottom line:

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Allogene HQ Open House on September 17, 2019 in South San Francisco. (Jeff Rumans, Endpoints News)

The next 10 years: Where is biotech head­ed?

The last 10 years have seen a revolution in drug development. Timelines have shortened, particularly in oncology. Regulators have opened up. Investment has skyrocketed. China became a player. Biotechs have multiplied as gene and cell therapy has exploded — offering major new advances in the way diseases are treated, and sometimes cured.

So where are we headed from here? I journeyed out to San Francisco in September to discuss the answer to that question at Allogene’s open house. If the last 10 years have been an eye-opener, what does the next decade hold in store?

George Scangos / Credit: Cornell University

ARCH, Soft­Bank-backed Vir Biotech­nol­o­gy un­der­whelms with $143 mil­lion IPO

George Scangos went back to Wall Street, and came back 700 million pennies short.

Scangos’ vaunted startup Vir Biotechnology raised $143 million in an IPO they hoped would earn $150 million. Shares were priced at $20, the low-end of the $20-$22 target.

Launched with backing from ARCH Venture’s Robert Nelsen, Masayoshi Son’s SoftBank Vision Fund, and the Bill & Melinda Gates Foundation, the infectious disease startup was one of a new wave of well-resourced biotechs that emerged with deep enough coffers to pursue a full R&D line rather than slowly build their case by picking off a single lead program.

Ex-Ab­b­Vie part­ner Prin­cip­ia posts en­cour­ag­ing PhII re­sults for its BTK-in­hibitor

Months after their breakup with high-profile partner AbbVie, Principia announced positive preliminary results from the second half of a Phase II trial on their lead drug.

The San Francisco biotech announced data from part B of its Phase II open-label trial testing the BTK inhibitor PRN1008 on patients with pemphigus vulgaris, a rare autoimmune disease affecting the skin and mucous membranes. Of 15 enrolled patients, 6 achieved complete responses and 4 remain on the therapy.

Roche vice-chair: Let's re­pair the dam­age that short-term prof­it dri­ve has done to the plan­et

In his latest push for environmental advocacy, the vice chairman of Roche’s board of directors has told a group of business executives that “short-term profit maximization has destroyed the planet, environmentally and socially.”

Andre Hoffman
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In re­ver­sal, NICE backs Rubra­ca af­ter Clo­vis agrees to a price cut

NICE has changed its mind, agreeing to cautiously endorse Clovis Oncology’s Rubraca after the drugmaker agreed to cut its price — about two months after the UK cost-effectiveness agency’s initial rejection.

Rubraca, known chemically as rucaparib, is approved for use in the EU as monotherapy for the maintenance treatment of adult patients with high-grade epithelial ovarian, fallopian tube, or primary peritoneal cancer who have relapsed after platinum-based chemotherapy.

Bill Gates backs Gink­go Biowork­s' $350M raise to fu­el the buzzy syn­thet­ic bi­ol­o­gy 'rev­o­lu­tion'

If you want to understand Ginkgo Bioworks, the name should suffice: Bioworks, a spin off “ironworks,” that old industrial linchpin devoted to leveraging scale as a wellspring for vast new industries capable of remaking society. Ginkgo wants to be the ironworks for the revolution it’s heralded with as much fanfare as they can, playing off of one of the buzziest technologies in biotech.

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