Dems fire off a sil­ly pric­ing bill; What's wrong with No­var­tis?

End­points as­sess­es the big bio­phar­ma sto­ries of the week, with a lit­tle added com­men­tary on what they mean for the in­dus­try.

The De­moc­rats field few good ideas in a drug pric­ing bill that is DOA

Any Sen­ate bill that re­lies on a long list of De­moc­rats for its sup­port doesn’t have much chance of be­com­ing law. But the Dems’ pro­posed law does help il­lus­trate what Par­ty lead­ers are think­ing these days, and where Pres­i­dent Trump may find com­mon ground if the ul­tra con­ser­v­a­tive wing of the Re­pub­li­can Par­ty can’t be brought back in­to the fold.

At the top of the list of things-phar­ma-com­pa­nies-hate is a re­quire­ment to break out de­vel­op­ment costs for each new drug. The un­end­ing de­bate over the cost of R&D gen­er­al­ly re­volves around glob­al R&D bud­gets com­pared to ap­provals. The De­moc­rats want to see some hard num­bers for each new pro­gram, prob­a­bly so they can start sham­ing man­u­fac­tur­ers for ex­ces­sive pric­ing.

Medicare ne­go­ti­a­tions are back, of course. Al­ready sup­port­ed by Trump, gov­ern­ment an­a­lysts have con­clud­ed that Medicare price ne­go­ti­a­tions as such wouldn’t like­ly cre­ate much in the way of sav­ings. That would take a for­mu­la­ry, and the threat of kick­ing off drugs priced too high, an idea which caus­es angst in phar­ma cir­cles.

In this new bill Medicare would be al­lowed to use VA prices or a price list from some oth­er agency if of­fi­cials can’t ne­go­ti­ate a “fair” price. We al­ready know from the Cal­i­for­nia bill that drug­mak­ers would fight this to the last lob­by­ist. There’s al­so a spe­cial ex­cise tax in the event a phar­ma com­pa­ny push­es up the price of drug more than med­ical in­fla­tion.

In­ter­est­ing­ly, there’s $2 bil­lion “prize” mon­ey for new an­tibi­otics. Giv­en the need here, and the low cost, it’s un­like­ly to spur much op­po­si­tion. And there’s $10 bil­lion to pay for drug tri­als at the NIH. Al­so, not so con­tro­ver­sial, but right now the fo­cus in the new ad­min­is­tra­tion is on cut­ting the NIH bud­get, not adding to it.

Bot­tom line: Aside from Medicare ne­go­ti­a­tions, there isn’t much here for a bi­par­ti­san ap­proach. It’s DOA, like most every­thing else in the Capi­tol these days.

Num­bers be­fore peo­ple. It’s the in­dus­try stan­dard.

Over the past week we’ve cov­ered sev­er­al new re­or­ga­ni­za­tion sto­ries. Am­gen led the way, with its planned move push­ing about 10% of its Thou­sand Oaks staff out of HQ. The cuts or re­lo­ca­tions in­volve mov­ing po­si­tions and re­searchers to the two big hubs of the Bay Area and Cam­bridge/Boston. Ver­tex, we learned from an SEC fil­ing, is shut­ter­ing its Cana­di­an R&D fa­cil­i­ty in a con­sol­i­da­tion. R&D sources tell us they’ve al­so been root­ing out pock­ets of the “Old Guard” in what are re­ferred to as “stealth lay­offs.” And Take­da gave us an ex­am­ple of the M&A va­ri­ety of job cuts, with their de­ci­sion to ax 180 of about 300 jobs at the new­ly ac­quired Ari­ad (with some axed staffers go­ing to a CRO).

With biotech val­u­a­tions be­ing what they are, it shouldn’t sur­prise any­one to see buy­ers cut as deep as they pos­si­bly can af­ter an ac­qui­si­tion. It’s one way to make num­bers work. That’s a sim­ple, though painful, re­al­i­ty.

Am­gen, for all its biotech his­to­ry, is now a Big Phar­ma and it will look for ef­fi­cien­cies wher­ev­er it can find them. Like all the Big Phar­mas, the on­ly con­stant in R&D is change.

Ver­tex gets a black star next to its name. Not for the Cana­di­an re­treat — every­body is con­sol­i­dat­ing in des­ig­nat­ed hubs — but for its re­fusal to be hon­est about the stealth lay­offs. You don’t have to be down­siz­ing to note when you are lay­ing peo­ple off from their jobs.

I was asked by a Roche em­ploy­ee at Nut­ley a few years ago what I thought about job se­cu­ri­ty in R&D. I told her I didn’t see much of it. The fact is com­pa­nies will do what’s in the best in­ter­est of their share­hold­ers every time. For rank-and-file em­ploy­ees, that takes a will­ing­ness to stay flex­i­ble and move as need­ed and de­sired.

The con­stant churn helps with new com­pa­ny cre­ation, but the me­chan­ics of this new re­al­i­ty are un­for­giv­ing at a per­son­al lev­el.

You can’t fight a trend like this. But you can de­ter­mine the best way to man­age a ca­reer in which job se­cu­ri­ty is a thing of the past — if it ever ex­ist­ed.

What’s wrong with No­var­tis?

I have no in­side knowl­edge why Karen Walk­er is leav­ing her se­nior po­si­tion in charge of cell ther­a­py man­u­fac­tur­ing for No­var­tis. Seat­tle is a nice place to live, or so I hear, and for all I know Seat­tle Ge­net­ics made her an of­fer she couldn’t refuse. That’s her busi­ness.

But her tim­ing, leav­ing two days af­ter the FDA ac­cept­ed No­var­tis’ ap­pli­ca­tion for its pi­o­neer­ing CAR-T, couldn’t have been worse for the com­pa­ny. Man­u­fac­tur­ing is a crit­i­cal el­e­ment in this field, more than most oth­ers, and she would have played a key role in its re­view.

It’s an­oth­er ex­am­ple of the ex­o­dus of tal­ent from No­var­tis over the past year. Some of that is self-in­flect­ed, like No­var­tis’ ques­tion­able de­ci­sion to dis­solve an in­de­pen­dent cell and gene ther­a­py unit, which led Oz Azam to leave the com­pa­ny. But bleed­ing tal­ent the way No­var­tis has is in­dica­tive of deep prob­lems.

The up­side here is that lots of these ex­pe­ri­enced ex­ecs — like Azam and Walk­er — are tak­ing new jobs in a boom­ing biotech sec­tor. But what’s wrong with No­var­tis?

Third Rock’s lat­est start­up launch­es in style, with an am­bi­tious set of goals

While turnover re­mains high, the in­dus­try re­mains vi­brant be­cause new com­pa­ny cre­ation in biotech is strong. One of our top sto­ries this week fo­cused on a clas­sic Third Rock start­up, Tan­go Ther­a­peu­tics. I en­joyed cov­er­ing the sci­ence they will be ex­plor­ing, as the team grows in­to the mid-20s.

This com­pa­ny has every­thing a start­up wants: Brains, mon­ey and am­bi­tion. And it’s carv­ing out new ter­ri­to­ry in drug de­vel­op­ment, go­ing big.

It’s com­pa­nies like these that make my job fun. Whether it works or not, it cer­tain­ly looks like they de­serve a shot. And it keeps the big hubs like Boston/Cam­bridge teem­ing with new ideas for old, im­pos­si­ble tar­gets. Thumbs up, in­deed.

Regeneron CEO Leonard Schleifer speaks at a meeting with President Donald Trump, members of the Coronavirus Task Force, and pharmaceutical executives in the Cabinet Room of the White House (AP Photo/Andrew Harnik)

OWS shifts spot­light to drugs to fight Covid-19, hand­ing Re­gen­eron $450M to be­gin large scale man­u­fac­tur­ing in the US

The US government is on a spending spree. And after committing billions to vaccines defense operations are now doling out more of the big bucks through Operation Warp Speed to back a rapid flip of a drug into the market to stop Covid-19 from ravaging patients — possibly inside of 2 months.

The beneficiary this morning is Regeneron, the big biotech engaged in a frenzied race to develop an antibody cocktail called REGN-COV2 that just started a late-stage program to prove its worth in fighting the virus. BARDA and the Department of Defense are awarding Regeneron a $450 million contract to cover bulk delivery of the cocktail starting as early as late summer, with money added for fill/finish and storage activities.

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The home run count: The $100M+ mega-round boom in biotech in­spired a $7.3B feed­ing fren­zy — so far this year

Over the last 6 months there’s been a blizzard of money piling up drifts of the green stuff through the biotech landscape. And the forecast calls for more cash windfalls ahead.

Even as a global pandemic has killed more than half a million people, blighted economies and divided nations over the proper response, it’s also helped ignite an unprecedented burst of big-time investing. And not just in Covid-19 deals, as we’ve looked at before.

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UP­DAT­ED: Bio­gen shares spike as ex­ecs com­plete a de­layed pitch for their con­tro­ver­sial Alzheimer's drug — the next move be­longs to the FDA

Biogen is stepping out onto the high wire today, reporting that the team working on the controversial Alzheimer’s drug aducanumab has now completed their submission to the FDA. And they want the agency to bless it with a priority review that would cut the agency’s decision-making time to a mere 6 months.

The news drove a 10% spike in Biogen’s stock $BIIB ahead of the bell.

Part of that spike can be attributed to a relief rally. Biogen execs rattled backers and a host of analysts earlier in the year when they unexpectedly delayed their filing to the third quarter. That delay provoked all manner of speculation after CEO Michel Vounatsos and R&D chief Al Sandrock failed to persuade influential observers that the pandemic and other factors had slowed the timeline for filing. Actually making the pitch at least satisfies skeptics that the FDA was not likely pushing back as Biogen was pushing in. From the start, Biogen execs claimed that they were doing everything in cooperation with the FDA, saying that regulators had signaled their interest in reviewing the submission.

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Daniel O'Day, Gilead CEO (Kevin Dietsch/UPI/Bloomberg via Getty Images)

A new study points to $6.5B in pub­lic sup­port build­ing the sci­en­tif­ic foun­da­tion of Gilead­'s remde­sivir. Should that be re­flect­ed in the price?

By drug R&D standards, Gilead’s move to repurpose remdesivir for Covid-19 and grab an emergency use authorization was a remarkably easy, low-cost layup that required modest efficacy and a clean safety profile from just a small group of patients.

The drug OK also arrived after Gilead had paid much of the freight on getting it positioned to move fast.

In a study by Fred Ledley, director of the Center for Integration of Science and Industry at Bentley University in Waltham, MA, researchers concluded that the NIH had invested only $46.5 million in the research devoted to the drug ahead of the pandemic, a small sum compared to the more than $1 billion Gilead expected to spend getting it out this year, all on top of what it had already cost in R&D expenses.

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Andrew Kruegel, Kures president and co-founder (Columbia Tech Ventures via Vimeo)

Af­ter psilo­cy­bin and ke­t­a­mine, a new biotech comes along de­vel­op­ing a drug Scott Got­tlieb fought

Andrew Kruegel was six years into his chemistry work at Columbia University, when, one day in August 2016, he learned he might have only 30 days before the government made him destroy his research.

Kruegel had been studying kratom, a leaf long used in Southeast Asia as a stimulant or for pain. It had opioid-like properties, he found, but seemed to offer pain relief without the addictive potential or respiratory side effects of traditional opioids — a riddle that might help illuminate how human opioid receptors work.

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Nello Mainolfi (Kymera via YouTube)

Out to re­vive R&D, a resur­gent Sanofi pays $150M cash to part­ner up with a pi­o­neer­ing pro­tein degra­da­tion play­er

Frank Nestle was appointed Sanofi’s global head of immunology and inflammation research therapeutic area just days before dupilumab, the blockbuster-to-be IL-4 antibody, would be accepted for priority review. After four years of consolidating immunology expertise from multiple corners of the Sanofi family and recruiting new talents to build the discovery engine, he’s set eyes on a Phase I-ready program that he believes can grow into a Dupixent-sized franchise.

Atul Deshpande, Harbour BioMed chief strategy officer & head, US operations (Harbour BioMed)

An­oth­er biotech IPO set-up? Multi­na­tion­al biotech leaps from round to round, scoop­ing up cash at a blis­ter­ing pace

A short four months after announcing a $75 million haul in Series B+ fundraising, the multinational biotech Harbour BioMed pulled in another round of investments and eclipsed the nine-digit mark in the process.

Harbour completed its Series C financing, the company announced Thursday morning, raising $102.8 million and bringing its total investment sum to over $300 million since its founding in late 2016. The biotech plans to use the money to transition early-stage candidates from the discovery phase, fund candidates already in the clinic, and prep late-stage candidates for commercialization.

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Covid-19 roundup: CDC de­bat­ing who should get first avail­able vac­cines; EU in Gilead talks af­ter US gob­bled first remde­sivir dos­es

The federal government has now spent billions of dollars accelerating the development of a Covid-19 vaccine, and yet they’ve remained hush-hush on who, precisely, would actually get inoculated once the first doses are approved and available. Internally, though, they have been debating it.

The CDC and an advisory committee of outside health experts have been working since April to devise a ranking system that would determine who receives a vaccine and when, The New York Times reported. The question of who is first in line for inoculation is important because no matter how many doses developers can make or how quickly they can make them, doses will still come out in batches; 300 million inoculations will not appear overnight.

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Donald and Melania Trump watch the smoke of fireworks from the South Lawn of the White House on July 4, 2020 (via Getty)

Which drug de­vel­op­ers of­fer Trump a quick, game-chang­ing ‘so­lu­tion’ as the pan­dem­ic roars back? Eli Lil­ly and Ab­Cellera look to break out of the pack

We are unleashing our nation’s scientific brilliance and will likely have a therapeutic and/or vaccine solution long before the end of the year.

— Donald Trump, July 4

Next week administration officials plan to promote a new study they say shows promising results on therapeutics, the officials said. They wouldn’t describe the study in any further detail because, they said, its disclosure would be “market-moving.”

— NBC News, July 3

Something’s cooking. And it’s not just July 4 leftovers involving stale buns and uneaten hot dogs.

Over the long weekend observers picked up signs that the focus in the Trump administration may swiftly shift from the bright spotlight on vaccines being promised this fall, around the time of the election, to include drugs that could possibly keep patients out of the hospital and take the political sting out of the soaring Covid-19 numbers causing embarrassment in states that swiftly reopened — as Trump cheered along.

So far, Gilead has been the chief beneficiary of the drive on drugs, swiftly offering enough early data to get remdesivir an emergency authorization and into the hands of the US government. But their drug, while helpful in cutting stays, is known for a limited, modest effect. And that won’t tamp down on the hurricane of criticism that’s been tearing at the White House, and buffeting the president’s most stalwart core defenders as the economy suffers.

We’ve had positive early-stage vaccine data, most recently from Pfizer and BioNTech, playing catchup on an mRNA race led by Moderna — where every little sign of potential trouble is magnified into a lethal threat, just as every advance excites a frenzy of support. But that race still has months to play out, with more Phase I data due ahead of the mid-stage numbers looming ahead. A vaccine may not be available in large enough quantities until well into 2021, which is still wildly ambitious.

So what about a drug solution?

Trump’s initial support for a panacea focused on hydroxychloroquine. But that fizzled in the face of data underscoring its ineffectiveness — killing trials that aren’t likely to be restarted because of a recent population-based study offering some support. And there are a number of existing drugs being repurposed to see how they help hospitalized patients.

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