Con­sti­pa­tion drug mak­er Syn­er­gy looks to rene­go­ti­ate bloat­ed loan agree­ment — shares tum­ble

Grap­pling with the slow up­take of its con­sti­pa­tion drug Tru­lance, Syn­er­gy Phar­ma­ceu­ti­cals $SGYP has prac­ti­cal­ly thrown in the tow­el say­ing that it does not an­tic­i­pate re­ceiv­ing any takeover of­fers that sit well with its cur­rent mar­ket val­ue and is thus hop­ing to rene­go­ti­ate its hefty loan agree­ment.

Two years pri­or to the ap­proval and launch of Tru­lance in 2017, Syn­er­gy said, it was eval­u­at­ing strate­gic op­tions, in­clud­ing part­ner­ships and a sale. Hav­ing re­ceived no of­fers that met its ex­pec­ta­tions, the New York-based drug­mak­er elect­ed to go it alone. This May, how­ev­er, Syn­er­gy said it was un­der­go­ing a strate­gic re­view and in par­al­lel try­ing to rene­go­ti­ate its term loan agree­ment with CRG, which was an­nounced in Sep­tem­ber 2017 as $300 mil­lion in debt fi­nanc­ing struc­tured as se­nior se­cured loans.

So far, Syn­er­gy has failed to amend its agree­ment with CRG. The loan deal con­tains “a min­i­mum liq­uid­i­ty covenant that ab­sent re­lief from CRG may not be sat­is­fied. Syn­er­gy is con­tin­u­ing dis­cus­sions with CRG for covenant re­lief and in par­al­lel the com­pa­ny is cur­rent­ly pur­su­ing fi­nanc­ing al­ter­na­tives…but there is no as­sur­ance that the com­pa­ny can se­cure CRG’s con­sent or oth­er­wise ob­tain any such fi­nanc­ing…in which case the com­pa­ny could de­fault un­der the term loan agree­ment and may have to pur­sue or oth­er­wise ac­cel­er­ate strate­gic al­ter­na­tives, in­clud­ing the pos­si­bil­i­ty of seek­ing bank­rupt­cy pro­tec­tion,” Syn­er­gy said in a state­ment on Fri­day.

Shares plunged 67% af­ter Syn­er­gy put out the re­lease at mar­ket close Thurs­day.

Tru­lance se­cured FDA ap­proval in Jan­u­ary 2017 for chron­ic id­io­path­ic con­sti­pa­tion (CIC), and brought in a pal­try $16.8 mil­lion over the course of the year, in which Syn­er­gy al­so launched Poop Troop — a se­ries of an­i­mat­ed emo­jis de­signed to en­cour­age con­ver­sa­tion about the im­pact of CIC.

Af­ter win­ning ap­proval for the drug in ir­ri­ta­ble bow­el syn­drome with con­sti­pa­tion (IBS-C) this Jan­u­ary, sales were ex­pect­ed to perk up. But Iron­wood Phar­ma’s $IR­WD 2012-ap­proved Liz­ness has re­mained in its pole po­si­tion, and Tru­lance failed to per­form in line with Syn­er­gy’s ex­pec­ta­tions.

Now, Syn­er­gy is pro­ject­ing Tru­lance net sales for 2018 in the range of $42 mil­lion to $47 mil­lion, well be­low the min­i­mum rev­enue covenant of $61 mil­lion in its term loan agree­ment with CRG. In fact, things could get worse for Syn­er­gy come 2019, as com­peti­tor Arde­lyx’s $ARDX drug tena­panor, which is cur­rent­ly un­der FDA re­view, is ex­pect­ed to hit the mar­ket.

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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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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On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.