Chica­go biotech ar­gues blue­bird, Third Rock 'killed' its ri­val, pi­o­neer­ing tha­lassemia gene ther­a­py in law­suit

Blue­bird bio $BLUE chief Nick Leschly court­ed con­tro­ver­sy last week when he re­vealed the com­pa­ny’s be­ta tha­lassemia treat­ment will car­ry a jaw-drop­ping $1.8 mil­lion price tag over a 5-year pe­ri­od in Eu­rope — mak­ing it the plan­et’s sec­ond most ex­pen­sive ther­a­py be­hind No­var­tis’ $NVS fresh­ly ap­proved spinal mus­cu­lar at­ro­phy ther­a­py, Zol­gens­ma, at $2.1 mil­lion. A Chica­go biotech, mean­while, has been fum­ing at the side­lines. In a law­suit filed ear­li­er this month, Er­rant Gene Ther­a­peu­tics al­leged that blue­bird and ven­ture cap­i­tal group Third Rock un­law­ful­ly prised a vi­ral vec­tor, de­vel­oped in part­ner­ship with the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter (MSK), from its grasp, and thwart­ed the de­vel­op­ment of its sem­i­nal gene ther­a­py.

Nick Leschly Linkedin

Er­rant Gene Ther­a­peu­tics was for­mal­ly es­tab­lished in Oc­to­ber 2003 by Patrick Giron­di, whose son Roc­co was two years old when he was di­ag­nosed with a se­vere form of the rare, in­her­it­ed blood dis­or­der. In 2000, Er­rant con­tact­ed an MSK sci­en­tist, Michel Sade­lain, who had pub­lished a pa­per ex­hibit­ing the po­ten­tial of his gene ther­a­py tech­nol­o­gy in mice — and be­gan to fund Sade­lain’s re­search. Five years lat­er, Er­rant pur­chased from MSK the ex­clu­sive, glob­al rights to har­ness Sade­lain’s tech­nol­o­gy to work on gene ther­a­pies for blood dis­or­ders: be­ta-tha­lassemia and sick­le cell dis­ease. In the years that fol­lowed, Er­rant worked with MSK to cre­ate a vec­tor — which was then patent­ed by the com­pa­ny in the Unit­ed States in 2009,  the law­suit said.

Michel Sade­lain Can­cer Re­search In­sti­tute

In late 2016, Er­rant al­leged it dis­cov­ered that blue­bird and Third Rock — a firm which Leschly was a found­ing mem­ber and a for­mer part­ner of — were in ca­hoots to ob­struct its gene ther­a­py from reach­ing the mar­ket by en­gag­ing in a de­lib­er­ate pat­tern of fraud and de­cep­tion, and in­dica­tive of “a trou­bling pat­tern of tor­tious busi­ness prac­tices un­der­tak­en by phar­ma­ceu­ti­cal com­pa­nies to se­cret­ly and sys­tem­at­i­cal­ly ‘kill’ com­pet­ing med­ical treat­ments.”

Back in 2010, Er­rant was ready to ini­ti­ate clin­i­cal tri­als with MSK and the NIH. At the time, the oth­er drug de­vel­op­er with an ex­per­i­men­tal tha­lassemia gene ther­a­py was Genetix Phar­ma­ceu­ti­cals. That year, Third Rock in­vest­ed in Genetix, in­stalled Leschly as chief, and switched the com­pa­ny’s name to blue­bird bio.

Ac­cord­ing to the law­suit, Third Rock then met with MSK and “ad­mit­ted” that the Er­rant vec­tor out­shined blue­bird’s vec­tor — and was ad­vised to ap­proach Er­rant about buy­ing its tech­nol­o­gy. When Third Rock did not agree to aban­don the blue­bird vec­tor in fa­vor of Er­rant’s, the plain­tiff as­sert­ed that blue­bird and Third Rock moved to snuff the de­vel­op­ment of the Er­rant vec­tor by ac­cess­ing the tech­nol­o­gy via a “se­cret agree­ment” with MSK. In ad­di­tion, blue­bird and Third Rock re­lied up­on their re­la­tion­ships with new­ly crowned MSK chief Craig Thomp­son to fur­ther stall the de­vel­op­ment of Er­rant’s gene ther­a­py, the law­suit added.

Craig Thomp­son MSK

Lat­er in 2010, MSK de­mand­ed that Er­rant find a com­mer­cial part­ner as a con­di­tion be­fore start­ing clin­i­cal tri­als — but de­spite Er­rant ful­fill­ing that con­di­tion, MSK re­ject­ed the con­tract and in­stead ini­ti­at­ed ar­bi­tra­tion against Er­rant, the drug de­vel­op­er claimed in the law­suit. Even­tu­al­ly by 2011, Third Rock and MSK “con­vinced” Er­rant to give MSK its vec­tor in ex­change for a 50% roy­al­ty for any prod­uct de­vel­oped us­ing it, Er­rant said, sug­gest­ing it is owed di­rect dam­ages to the tune of “hun­dreds of mil­lions of dol­lars.”

A Third Rock spokesper­son said it had no com­ment, while a blue­bird spokesper­son said the com­pa­ny does not com­ment on lit­i­ga­tion.

This is not the first time Er­rant’s Giron­di has lashed out at MSK. A re­port by the New York Times in 2015 chron­i­cles Giron­di’s pre­vi­ous at­tempt. MSK was forced to take back con­trol of the project be­cause Giron­di — a high school dropout who was ar­rest­ed var­i­ous times in his youth, but dodged prison by join­ing the Air Force — lacked the”nec­es­sary mon­ey and the ex­per­tise,” the re­port said, cit­ing An­drew Maslow, the di­rec­tor of in­dus­tri­al af­fairs at MSK un­til ear­ly 2012.

End­points News has con­tact­ed MSK for com­ment.

Ear­li­er this month, blue­bird’s Zyn­te­glo — a one-shot gene ther­a­py en­gi­neered to re­place a life­time of trans­fu­sions and med­ica­tion for pa­tients aged 12 years and old­er — was ap­proved in Eu­rope. While the Cam­bridge, Mass­a­chu­setts-based com­pa­ny has pro­duced per­sua­sive da­ta — dra­mat­i­cal­ly re­duc­ing the need for blood trans­fu­sions in a 22-pa­tient study — the gene ther­a­py has fall­en short of a cure in se­vere pa­tients. Phase III tri­als de­signed to con­firm Zyn­te­glo’s ben­e­fit are on­go­ing, and US ap­proval is an­tic­i­pat­ed next year.

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.

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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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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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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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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