Close­ly al­lied with (both) Mer­cks and Cel­gene, Sutro CEO Bill Newell is lay­ing out all his cards in a new IPO

Sutro CEO Bill Newell didn’t hide his in­ter­est in an IPO last year, af­ter he re­tooled a pact with Cel­gene that elim­i­nat­ed their buy­out op­tion and left the com­pa­ny free to pur­sue its own des­tiny. And with tens of mil­lions of Mer­ck dol­lars back­ing him af­ter their new can­cer drug part­ner­ship last month, he’s go­ing for it.

Bill Newell

South San Fran­cis­co-based Sutro filed for a $75 mil­lion IPO last night, spelling out in con­sid­er­able de­tail how he’s been able to raise cash to grow the com­pa­ny from his plat­form part­ner­ships. In­vestors added an $85 mil­lion round a few days ago to top up the num­bers, bring­ing Sutro’s VC to­tal to $175 mil­lion.

There’s lots of cash and bil­lions in mile­stones to con­sid­er here.

We know now that in ad­di­tion to Mer­ck’s $60 mil­lion up­front in Ju­ly, the phar­ma gi­ant al­so bought $30 mil­lion in stock while com­mit­ting to $1.6 bil­lion in mile­stones. That of­fers a key Big Phar­ma en­dorse­ment for a plat­form that con­cen­trates heav­i­ly on a new gen­er­a­tion of can­cer-tar­get­ing an­ti­body-drug con­ju­gates and bis­pecifics. 

In the first three years of the 2014 Cel­gene deal, Sutro earned $167 mil­lion, then bagged an­oth­er $12.5 mil­lion in cash a year ago to fo­cus on four key pro­grams, an an­ti­body-drug con­ju­gate for BC­MA that leads the group. Cel­gene is us­ing their al­liance to sur­round mul­ti­ple myelo­ma from sev­er­al sides with dif­fer­ent part­ners. There are sev­er­al bis­pecifics in the deal, which are still not com­plete­ly in view, with an­oth­er $12.5 mil­lion due on the first IND clear­ance.

“We are ex­cit­ed about that tar­get for myelo­ma,” Newell told me last sum­mer. “Three dif­fer­ent modal­i­ties gives them dif­fer­ent pa­tients for whom dif­fer­ent ther­a­pies might be ap­pro­pri­ate. CAR-T is ex­cit­ing, but not all pa­tients will be el­i­gi­ble for CAR-T. They want to fo­cus on dif­fer­ent modal­i­ties.”

Mile­stones range from $295 mil­lion to $393.7 mil­lion, de­pend­ing on the drug.

An­oth­er set of IND-en­abling stud­ies is planned next year for their third strate­gic part­ner, Mer­ck KGaA, which has rights to six dif­fer­ent can­cer tar­gets. That pact has de­liv­ered $27 mil­lion in pay­ments and re­search sup­port.

While the part­ner­ships have helped the com­pa­ny grow, Sutro has been spot­light­ing the ear­ly clin­i­cal de­vel­op­ment of a lead ther­a­py dubbed STRO-001, an an­ti­body-drug con­ju­gate tar­get­ing CD74, which is ex­pressed on B cell ma­lig­nan­cies. And the com­pa­ny in­tends to con­tin­ue to build up its own pipeline.

Al­to­geth­er Sutro has nine dif­fer­ent in­vestors who own more than 5% of the stock, with Mer­ck on top with 12.5%. The rest of the group in­cludes Al­ta Part­ners, Cel­gene, Lil­ly and Sky­line Ven­tures as well as Vi­da Ven­tures.

A spin­out of theirs, SutroVax, is pur­su­ing a clin­i­cal quest aimed at con­quer­ing the pneu­mo­coc­cal con­ju­gate vac­cine busi­ness.


UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Mike Grey. Mirum

In $86M IPO pitch, Mirum spells out plans to turn Shire dis­cards in­to or­phan liv­er drug suc­cess­es

Mike Grey doesn’t have any time to waste. Hav­ing re­gained con­trol of two liv­er dis­ease drugs from Shire and po­si­tioned them for piv­otal stud­ies — five years af­ter first hand­ing them off in a deal to sell Lu­me­na, where he was CEO — Grey is steer­ing Mirum straight in­to an IPO with a $86 mil­lion ask.

Not that Mirum has spent much of its $120 mil­lion Se­ries A cash since launch­ing last No­vem­ber. Ac­cord­ing to the S-1, the Cal­i­forn­ian biotech has burned through $23.3 mil­lion as of March, but ex­pects ex­pens­es to pick up once their clin­i­cal work gath­ers steam.

Fol­low­ing news of job cuts in Eu­ro­pean R&D ops, Sanofi con­firms it’s of­fer­ing US work­ers an 'ear­ly ex­it'

Ear­li­er in the week we learned that Sanofi was bring­ing out the bud­get ax to trim 466 R&D jobs in Eu­rope, re­tool­ing its ap­proach to car­dio as re­search chief John Reed beefed up their work in can­cer and gene ther­a­pies. And we’re end­ing the week with news that the phar­ma gi­ant has al­so been qui­et­ly re­duc­ing staff in the US, tar­get­ing hun­dreds of jobs as the com­pa­ny push­es vol­un­tary buy­outs with a fo­cus on R&D sup­port ser­vices.

Suf­fer­ing No­var­tis part­ner Cona­tus is pack­ing it in on NASH af­ter a se­ries of un­for­tu­nate tri­al events

The NASH par­ty is over at No­var­tis-backed Cona­tus. And this time they’re turn­ing off the lights.

More than 2 years af­ter No­var­tis sur­prised the biotech in­vest­ment com­mu­ni­ty with its $50 mil­lion up­front and promise of R&D sup­port to part­ner with the lit­tle biotech on NASH — ig­nit­ing a light­ning strike for the share price — Cona­tus $CNAT is back with the lat­est bit­ter tale to tell about em­ri­c­as­an, which once in­spired con­fi­dence at the phar­ma gi­ant.

Dean Hum. Nasdaq via YouTube

Gen­fit goes to Chi­na with a deal worth up to $228M for NASH drug

Fresh off the high of its Nas­daq IPO de­but, and the low of com­par­isons to Cymabay — whose NASH drug re­cent­ly stum­bled — Gen­fit on Mon­day un­veiled an up to $228 mil­lion deal with transpa­cif­ic biotech Terns Phar­ma­ceu­ti­cals to de­vel­op its flag­ship ex­per­i­men­tal liv­er drug — elafi­bra­nor — in Greater Chi­na.

The deal comes more than a week af­ter Gen­fit $GN­FT is­sued a fiery de­fense of its dual PPAR ag­o­nist elafi­bra­nor, when com­peti­tor Cymabay’s PPARδ ag­o­nist, se­ladel­par, fiz­zled in a snap­shot of da­ta from an on­go­ing mid-stage tri­al. The main goal at the end of 12 weeks was for se­ladel­par to in­duce a sta­tis­ti­cal­ly sig­nif­i­cant im­prove­ment in liv­er fat con­tent, but da­ta showed that pa­tients on the place­bo ac­tu­al­ly per­formed bet­ter.

Alex­ion wins pri­or­i­ty re­view for Ul­tomiris' aHUS in­di­ca­tion; FDA ex­pands ap­proval of Ver­tex's Symdeko

→ Alex­ion $ALXN has scored a speedy re­view for Ul­tomiris for pa­tients with atyp­i­cal he­molyt­ic ure­mic syn­drome (aHUS) af­ter post­ing pos­i­tive da­ta from a piv­otal study in Jan­u­ary. The drug is the rare dis­ease com­pa­ny’s shot at pro­tect­ing its block­buster blood dis­or­der fran­chise that is cur­rent­ly cen­tered around its flag­ship drug, Soliris, which is a com­ple­ment in­hibitor typ­i­cal­ly ad­min­is­tered every two weeks. Ul­tomiris has a sim­i­lar mech­a­nism of ac­tion but re­quires less-fre­quent dos­ing — every eight weeks. The de­ci­sion date has been set to Oc­to­ber 19. Late last year, Ul­tomiris se­cured ap­proval for noc­tur­nal he­mo­glo­bin­uria (PNH) pa­tients.

Bet­ter than Am­bi­en? Min­er­va soars on PhI­Ib up­date on sel­torex­ant for in­som­nia

A month af­ter roil­ing in­vestors with what skep­tics dis­missed as cher­ry pick­ing of its de­pres­sion da­ta, Min­er­va is back with a clean slate of da­ta from its Phase IIb in­som­nia tri­al.

In a de­tailed up­date, the Waltham, MA-based biotech said sel­torex­ant (MIN-202) hit both the pri­ma­ry and sev­er­al sec­ondary end­points, ef­fec­tive­ly im­prov­ing sleep in­duc­tion and pro­long­ing sleep du­ra­tion. In­ves­ti­ga­tors made a point to note that the ef­fects were con­sis­tent across the adult and el­der­ly pop­u­la­tions, with the lat­ter more prone to the sleep dis­or­der.

Gene ther­a­py biotech sees its stock rock­et high­er on promis­ing re­sults for rare cas­es of but­ter­fly dis­ease

Shares of Krys­tal Biotech took off this morn­ing $KRYS af­ter the lit­tle biotech re­port­ed promis­ing re­sults from its gene ther­a­py to treat a rare skin dis­ease called epi­der­mol­y­sis bul­losa.

Fo­cus­ing on an up­date with 4 new pa­tients, re­searchers spot­light­ed the suc­cess of KB103 in clos­ing some stub­born wounds. Krys­tal says that of 4 re­cur­ring and 2 chron­ic skin wounds treat­ed with the gene ther­a­py, the KB103 group saw the clo­sure of 5. The 6th — a chron­ic wound, de­fined as a wound that had re­mained open for more than 12 weeks — was par­tial­ly closed. That brings the to­tal so far to 8 treat­ed wounds, with 7 clo­sures.