Check­Mate-227: Bris­tol-My­ers Squibb has a MYS­TIC-sized prob­lem on its hands

Ja­mi Ru­bin, Gold­man Sachs

No­body knows how to put a top ex­ec on the spot quite like Gold­man Sach’s Ja­mi Ru­bin.

The high-pro­file an­a­lyst has a well-earned rep for go­ing straight for the jugu­lar, and that was on full dis­play Thurs­day night as she went at Bris­tol-My­ers Squibb’s lat­est po­ten­tial Achilles heel in im­muno-on­col­o­gy: Its Check­Mate 227 tri­al that in­cludes a matchup of Op­di­vo and the CT­LA-4 drug Yer­voy in front-line lung can­cer.

With the spec­tac­u­lar MYS­TIC fail on every­one’s mind Thurs­day, and the com­pa­ny’s stock fresh­ly pum­meled by the im­pli­ca­tions of As­traZeneca’s prat­fall on its own PD-L1/CT­LA-4 com­bo, she said, “it’s very hard to walk away from MYS­TIC feel­ing warm and fuzzy about 227.”

None of this, of course, was un­ex­pect­ed at Bris­tol-My­ers, which is acute­ly sen­si­tive to just how im­por­tant Op­di­vo is to its fu­ture. Bris­tol-My­ers had al­ready re­placed its R&D chief af­ter a key fail­ure of its own in lung can­cer, which gave Mer­ck a big ad­van­tage that it’s now cap­i­tal­iz­ing on with a front-line OK for a com­bi­na­tion of Keytru­da and chemo. By the time Ru­bin tack­led the ele­phant in the room, Bris­tol-My­ers CEO Gio­van­ni Caforio had al­ready drawn a dis­tinc­tion be­tween MYS­TIC and 227. He told an­a­lysts:

Gio­van­ni Caforio, Bris­tol-My­ers Squibb CEO

(O)ur Check­Mate 227 is a first-line, non-small cell lung can­cer pro­gram, not just one tri­al, in­ves­ti­gat­ing sev­er­al im­por­tant sci­en­tif­ic ques­tions. In study 227 we have at least three dis­crete op­por­tu­ni­ties for suc­cess. We will be able to eval­u­ate the com­bi­na­tion of Op­di­vo plus Yer­voy, we will eval­u­ate Op­di­vo plus chemo in PDL-1 neg­a­tive pa­tients and we will be avail­able to eval­u­ate Op­di­vo plus chemo in all com­ers. Ad­di­tion­al­ly, as you know, we are test­ing two cy­cles of chemo with the com­bi­na­tion of Op­di­vo and Yer­voy.

It’s al­so im­por­tant to rec­og­nize that MYS­TIC tri­al and Check­Mate 227 are very dif­fer­ent tri­als. First, the dose and sched­ules are dif­fer­ent. In 227, we be­lieve we have op­ti­mized the dose and the sched­ule. Sec­ond, the tri­al sizes are very dif­fer­ent. 227 en­rolled over 2,200 pa­tients, with 1,200 pa­tients in the PDL-1 pos­i­tive por­tion alone. In con­trast, MYS­TIC en­rolled rough­ly 1,100 pa­tients in all com­ers, and its pri­ma­ry end­point was eval­u­at­ed in a sub­set of that pop­u­la­tion. While the MYS­TIC re­sults are im­por­tant da­ta and we look for­ward to see­ing more, it’s very dif­fi­cult to read across tri­als.

New R&D chief Thomas Lynch went fur­ther af­ter Ru­bin’s com­ment, not­ing that Yer­voy has a proven sur­vival ben­e­fit that could log­i­cal­ly be ex­pect­ed to con­tin­ue in a com­bo with Op­di­vo. And he al­so un­der­scored the op­tions the com­pa­ny has to go in dif­fer­ent di­rec­tions, adding that there are a cou­ple of new moves in R&D to come up with a bet­ter CT­LA-4.

But Bris­tol-My­ers is now fac­ing a tough chal­lenge win­ning over an­a­lysts. Not­ed Leerink’s Sea­mus Fer­nan­dez:

While 2Q pro­vid­ed en­cour­ag­ing growth for BMY’s key fran­chis­es, we are up­dat­ing our DCF-based price tar­get to $61/shr (from $66/shr pre­vi­ous­ly) to re­flect in­creased un­cer­tain­ty fol­low­ing the fail­ure of AZN’s MYS­TIC (Imfinzi (dur­val­um­ab; an­ti-PD-L1) + treme­li­mum­ab (an­ti-CT­LA-4)) and the po­ten­tial read through to BMY’s I/O com­bo of Op­di­vo + Yer­voy (ip­il­i­mum­ab; an­ti-CT­LA-4) in the PDL1+ group in the on­go­ing Check­Mate-227 tri­al.

As­traZeneca CEO Pas­cal So­ri­ot has been plagued all year long by the in­tense fo­cus that has been cen­tered on MYS­TIC. And he’ll have to spend the rest of the year ex­plain­ing how the com­pa­ny plans to move on from the first big end­point flop.

That’s not a po­si­tion that Bris­tol-My­ers Squibb wants to be in. But ex­ecs don’t have much choice. Brad Lon­car, an in­vestor who runs the $CN­CR im­munother­a­py ETF, has been track­ing quar­ter­ly PD-(L)1 sales, and the lat­est up­date to­day shows why the fo­cus on 227 isn’t go­ing away.

Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors. 

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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