Clarus read­ies a slate of big PhI­II risk-shar­ing bets with a new $910M fund

About 8 years ago, the crew at Clarus Ven­tures had a sit down with a phar­ma com­pa­ny they were look­ing to sell one of their port­fo­lio biotechs to. The talks went well, the com­pa­ny want­ed the as­sets. But there was a big ob­sta­cle.

The buy­er they were talk­ing to couldn’t af­ford to just ac­quire the com­pa­ny and fit in an­oth­er late-stage drug pro­gram un­der its R&D bud­get. Those num­bers couldn’t change willy nil­ly — no mat­ter how good the new late-stage drug looked.

So Clarus got cre­ative. They agreed to come in with fund­ing for the Phase III, work­ing a deal on their pay­back for tak­ing on the risk. That cre­ative deal be­came a busi­ness at Clarus, and a good one at that, to hear them tell the sto­ry. They fol­lowed up with a string of deals with a line­up of top-20 phar­mas and now Clarus has raised $910 mil­lion more to fund the next wave.

“Over the past 7 years, half of our in­vest­ment strat­e­gy has been fo­cused on risk shar­ing,” Clarus Man­ag­ing Di­rec­tor Nick Galakatos tells me. Clarus IV — which broke well past its ini­tial $750 mil­lion goal — will al­low them to grow these kinds of struc­tured in­vest­ments past the top 20 with enough cash to fund rough­ly 12 to 14 more deals at $50 mil­lion to $300 mil­lion apiece.

This is a far cry from the clas­sic kind of ven­ture in­vest­ments that VCs make in life sci­ences. And Galakatos says it’s the kind of deal that should do well in the cur­rent re­strict­ed fi­nan­cial en­vi­ron­ment that phar­mas have to work with.

“For the most part the R&D bud­get of the ma­jor phar­ma com­pa­nies is con­strained,” says Galakatos. “They have a very ex­cit­ing pipeline and frankly they can­not fund their ex­ist­ing bud­get.” The risk-shar­ing deals pro­vide the added cash for the phar­mas to take more shots on goal, and there’s sub­stan­tial Phase II da­ta for Clarus to con­sid­er be­fore mak­ing a bet.

Not too sur­pris­ing­ly, can­cer deals are at the heart of this strat­e­gy, with red-hot im­muno-on­col­o­gy pacts as the cen­ter­piece. Phar­ma com­pa­nies in gen­er­al are loathe to pub­licly de­tail the num­bers be­hind deals like this and Galakatos knows the val­ue of re­main­ing dis­crete.

But he did of­fer that Clarus worked one struc­tured deal on ibru­ti­nib that was un­veiled, buy­ing a roy­al­ty stream from Roy­al­ty Phar­ma along­side Ais­ling Cap­i­tal when that drug was un­der re­view in 2013 by J&J and Phar­ma­cyclics. And of the 8 drugs they fi­nanced that made it through Phase III, he says, 5 are ap­proved and 3 more are be­ing po­si­tioned for a reg­u­la­to­ry de­ci­sion.

Clarus is ready for more.

Cell and Gene Con­tract Man­u­fac­tur­ers Must Em­brace Dig­i­ti­za­tion

The Cell and Gene Industry is growing at a staggering 30% CAGR and is estimated to reach $14B by 20251. A number of cell, gene and stem cell therapy sponsors currently have novel drug substances and products and many rely on Contract Development Manufacturing Organizations (CDMO) to produce them with adherence to stringent regulatory cGMP conditions. Cell and gene manufacturing for both autologous (one to one) and allogenic (one to many) treatments face difficult issues such as: a complex supply chain, variability on patient and cellular level, cell expansion count and a tight scheduling of lot disposition process. This complexity affects quality, compliance and accountability in the entire vein-to-vein process for critically ill patients.

A lab technician works during research on coronavirus at Johnson & Johnson subsidiary Janssen Pharmaceutical in Beerse, Belgium, Wednesday, June 17, 2020. (Virginia Mayo/AP Images)

UP­DAT­ED: End­points News ranks all 28 play­ers in the Covid-19 vac­cine race. Here's how it stacks up to­day

(This piece was last updated on August 13. Endpoints News will continue to track the latest developments through the FDA’s marketing decisions.)

The 28 players now in or close to the clinical race to get a Covid-19 vaccine over the finish line are angling for a piece of a multibillion-dollar market. And being first — or among the leaders — will play a big role in determining just how big a piece.

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FDA's ODAC shrugs off ob­jec­tions to Mesoblast's GVHD drug for chil­dren, vot­ing 8-2 in fa­vor and im­prov­ing the odds of an ap­proval

The FDA’s Oncologic Drugs Advisory Committee once again waved through an investigational drug, clearing the potential final hurdle before the agency’s decision.

Thursday’s winner was Mesoblast $MESO, an Australian stem-cell company that submitted its Ryoncil drug for the treatment of steroid refractory acute graft-versus-host disease in children younger than 12. ODAC gave Ryoncil the thumbs up by an 8-2 vote, shrugging off concerns about trial design and pushing aside the need for an additional study.

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Inside FDA HQ (File photo)

The FDA just ap­proved the third Duchenne MD drug. And reg­u­la­tors still don’t know if any of them work

Last year Sarepta hit center stage with the FDA’s controversial reversal of its CRL for the company’s second Duchenne muscular dystrophy drug — after the biotech was ambushed by agency insiders ready to reject a second pitch based on the same disease biomarker used for the first approval for eteplirsen, without actual data on the efficacy of the drug.

On Wednesday the FDA approved the third Duchenne MD drug, based on the same biomarker. And regulators were ready to act yet again despite the lack of efficacy data.

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Stéphane Bancel speaks to President Donald Trump at the White House meeting on March 2 (AP Images)

UP­DAT­ED: Mod­er­na of­fers steep dis­count in US sup­ply deal — but still takes the crown with close to $2.5B in vac­cine con­tracts

The US pre-order for Moderna’s Covid-19 vaccine is in.

Operation Warp Speed is reserving $1.525 billion for 100 million doses of Moderna’s Phase III mRNA candidate, rounding out to about $15 per dose — including $300 million in incentive payments for timely delivery. Given that Moderna has a two-dose regimen, it’s good for vaccinating 50 million people. The US government also has the option to purchase another 400 million doses for a total of $6.6 billion, or $16.5 per dose.

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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.

Qi­a­gen in­vestors spurn Ther­mo Fish­er’s takeover of­fer, de­rail­ing a $12B+ deal

Thermo Fisher Scientific had announced an $11.5 billion takeover of Dutch diagnostics company Qiagen back in March, but the deal apparently did not sit well with Qiagen investors.

After getting hammered by critics who contended that Qiagen $QGEN was worth a lot more than what Thermo Fisher wanted to spend, investors turned thumbs down on the offer — derailing the buyout even after Thermo Fisher increased its offer to $12.6 billion in July. Qiagen’s share price has been boosted considerably by Covid-19 as demand for its testing kits surged.

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Xuefeng Yu in Hong Kong, 2019 (Imaginechina via AP Images)

CanSi­no reaps $748M wind­fall from Shang­hai IPO — as it warns Covid-19 vac­cine won't be a huge mon­ey mak­er

CanSino began the year with a clear goal to secure a secondary listing on Shanghai’s STAR market. Then something more urgent came along: As a rising vaccine developer on a mission to bring global standard immunizations to China, it heeded the call to make a vaccine to protect against a virus that would paralyze the whole world.

Xuefeng Yu and his team managed to keep doing both.

More than a month after CanSino’s Covid-19 vaccine candidate is authorized for military use in China, the Hong Kong-listed company has made a roaring debut in Shanghai. It fetched $748 million (RMB$5.2 billion) by floating 24.8 million shares, and soared 88% on its first trading day.

James Wilson, WuXi Global Forum at JPM20

FDA puts up a red light for Pas­sage Bio’s first gene ther­a­py pro­gram, de­lay­ing a pro­gram from James Wilson's group at Penn

Gene therapy pioneer James Wilson spearheaded animal studies demonstrating the potential of new treatments injected directly into the brain, looking to jumpstart a once-and-done fix for an extraordinarily rare disease called GM1 gangliosidosis in infants. His team at the University of Pennsylvania published their work on monkeys and handed it over to Passage Bio, a Wilson-inspired startup building a pipeline of gene therapies — with an IND for PBGM01 to lead the way.

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