De­nali grabs an­oth­er megaround while ink­ing a flur­ry of neu­rode­gen­er­a­tion R&D pacts


South San Fran­cis­co-based up­start De­nali Ther­a­peu­tics has been busy. A lit­tle more than a year af­ter mak­ing a splash with its $217 mil­lion start­up round de­signed to fund a new breed of neu­rode­gen­er­a­tion drug de­vel­op­er, the biotech is back with an­oth­er megaround fi­nanc­ing and a string of deals topped by a move in­to the clin­ic for its lead drug.

De­nali is go­ing big, ear­ly on. The sec­ond chap­ter in De­nali’s sto­ry starts with a $130 mil­lion Se­ries B, bring­ing its to­tal close to $350 mil­lion. And it’s lin­ing up a Phase I study for a small mol­e­cule RIP1 in­hibitor tar­get­ing glial dys­func­tion, where De­nali hopes to start es­tab­lish­ing a track record for suc­cess against ALS and Alzheimer’s.

Start­ing from scratch, the team at De­nali — large­ly ex-Genen­tech staffers who have struck out on their own — has set out to build a com­pa­ny that they be­lieve can suc­ceed af­ter many of the gi­ants in the in­dus­try have paid heav­i­ly for more than a decade of fail­ure.

“We’ve looked at part­ner­ing as a means to build­ing the port­fo­lio,” Chief Op­er­at­ing Of­fi­cer Alex Schuth tells me, high­light­ing a first set that in­cludes two fo­cused on con­quer­ing the blood-brain bar­ri­er, which has thrown a host of ear­li­er drugs off tar­get. Here they are, in se­quence:

  • De­nali has ac­quired San Diego-based In­cro Phar­ma­ceu­ti­cals, a vir­tu­al, sin­gle-as­set af­fair that de­liv­ers a RIP1 drug out of Har­vard. And just days ago the biotech filed a tri­al ap­pli­ca­tion with Eu­ro­pean of­fi­cials with plans to start hu­man test­ing, con­cen­trat­ing on a ki­nase that reg­u­lates in­flam­ma­to­ry sig­nal­ing.

  • They struck a deal with their al­ma mater Genen­tech to de­vel­op and com­mer­cial­ize LRRK2 in­hibitors for the treat­ment of Parkin­son’s dis­ease.

  • There’s an­oth­er pact with Wash­ing­ton Uni­ver­si­ty School of Med­i­cine in St. Louis for the de­vel­op­ment and com­mer­cial­iza­tion of an­ti­bod­ies tar­get­ing ApoE, a big tar­get for Alzheimer’s.

  • Cam­bridge, UK-based F-star, mean­while, is bring­ing its bis­pe­cif­ic an­ti­body de­vel­op­ment ex­per­tise to the ta­ble, as De­nali looks to break through the blood-brain bar­ri­er. That deal in­cludes an op­tion to buy out a new­ly formed group for $450 mil­lion, with an ear­ly-stage trig­ger on the de­ci­sion.

  • Seat­tle-based Blaze Bio­science, mean­while, is work­ing on some ther­a­peu­tics that F-star’s bis­pecifics can hus­tle across the BBB.

There’s more. Deals have been signed with the ALS Ther­a­py De­vel­op­ment In­sti­tute (ALS TDI), Ap­tu­it, Evotec, Mass­a­chu­setts Gen­er­al Hos­pi­tal, The Michael J. Fox Foun­da­tion, Pa­tients­LikeMe and the Uni­ver­si­ty of Cal­i­for­nia San Diego School of Med­i­cine.

The staff at De­nali, mean­while, has swelled to 80, says CEO Ryan Watts, who adds that that num­ber will con­tin­ue to grow as the biotech signs up with more col­lab­o­ra­tors and builds its first 10 pro­grams for the clin­ic.

Chief Med­ical Of­fi­cer Ca­r­ole Ho says she’s been re­view­ing hun­dreds of pa­pers and some 80 failed stud­ies in this field to prep for the com­ing de­vel­op­ment work, look­ing to avoid the same pit­falls.

“This may sounds like Drug 101,” she says, but De­nali’s suc­cess af­ter so many fail­ures will get down to its abil­i­ty to en­gage the tar­get, with the right kind of bio­mark­ers in place to track their suc­cess. De­vel­op­ing bio­mark­ers ear­ly, she adds, is crit­i­cal. And the bi­ol­o­gy of these dis­eases is be­com­ing more clear through the rapid ad­vance of ge­net­ics re­search.

RIP1, ApoE and LRRK2 have nev­er re­al­ly been test­ed be­fore, adds the CEO, giv­ing De­nali a “much bet­ter start­ing point.”

The deal with F-star starts small, but could wind up in the big leagues. De­nali is pay­ing $6 mil­lion to get a new op­er­a­tion dubbed F-star Gam­ma off the ground, F-star CEO John Hau­rum tells me. De­nali will al­so fund the re­search work, head­ing to a cross­roads where De­nali can ei­ther pick up an op­tion to buy the op­er­a­tion for $450 mil­lion or ink a li­cens­ing pact for the rights to its bis­pecifics. The op­tion de­ci­sion falls ahead of Phase I, says Hau­rum, and if the biotech choos­es to go the li­cens­ing route, the mile­stones could add up to more than $1 bil­lion.

This isn’t the first of these kinds of deals for F-star, which has col­lab­o­ra­tions un­der­way with Bris­tol-My­ers Squibb and Ab­b­Vie. Hau­rum’s been im­pressed with the De­nali crew, which came to him af­ter de­cid­ing that F-star’s abil­i­ty to cre­ate both bis­pe­cif­ic as well as bi­va­lent an­ti­bod­ies gave it the best shot at hit­ting the tar­gets lined up once they get through the blood-brain bar­ri­er — a ma­jor ob­sta­cle in neu­rode­gen­er­a­tive re­search work.

“They bring as­pects of the Genen­tech cul­ture that every­one has re­spect­ed for years,” says Hau­rum.

Bail­lie Gif­ford, a UK-based mu­tu­al fund, led the round, with all of De­nali’s orig­i­nal in­vestors com­ing back in along with some un­named in­sti­tu­tion­al in­vestors. The found­ing in­vestors in­clude ARCH Ven­ture Part­ners, F-Prime Bio­sciences, Flag­ship Ven­tures and the Alas­ka Per­ma­nent Fund.

The in­ten­tion here is to get the right syn­di­cate to­geth­er to back a com­pa­ny that has years of ex­pen­sive re­search work ahead be­fore it can es­tab­lish a clear proof-of-con­cept case that its on the right track, says CFO Steve Krognes.

So is an IPO in sight? De­nali’s ex­ec­u­tive team will on­ly say that it has plen­ty of re­sources at this stage, and more than enough of time to con­sid­er all the ways to con­tin­ue to fund the work, whether that means more mon­ey from the syn­di­cate, an IPO at some point, or a part­ner­ship or two with a ma­jor al­ly that could al­so sup­port their work.

The way they’re go­ing, De­nali may take every­thing on the ta­ble.

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Overview
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

Paul Hudson, Getty Images

UP­DAT­ED: Sanofi CEO Hud­son lays out new R&D fo­cus -- chop­ping di­a­betes, car­dio and slash­ing $2B-plus costs in sur­gi­cal dis­sec­tion

Earlier on Monday, new Sanofi CEO Paul Hudson baited the hook on his upcoming strategy presentation Tuesday with a tell-tale deal to buy Synthorx for $2.5 billion. That fits squarely with hints that he’s pointing the company to a bigger future in oncology, which also squares with a major industry tilt.

In a big reveal later in the day, though, Hudson offered a slate of stunners on his plans to surgically dissect and reassemble the portfoloio, saying that the company is dropping cardio and diabetes research — which covers two of its biggest franchise arenas. Sanofi missed the boat on developing new diabetes drugs, and now it’s pulling out entirely. As part of the pullback, it’s dropping efpeglenatide, their once-weekly GLP-1 injection for diabetes.

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Roger Perlmutter, Merck

#ASH19: Here’s why Mer­ck is pay­ing $2.7B to­day to grab Ar­Qule and its next-gen BTK drug, lin­ing up Eli Lil­ly ri­val­ry

Just a few months after making a splash at the European Hematology Association scientific confab with an early snapshot of positive data for their BTK inhibitor ARQ 531, ArQule has won a $2.7 billion buyout deal from Merck.

Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

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Left top to right: Mark Timney, Alex Denner, Vas Narasimhan. (The Medicines Company, Getty, AP/Endpoints News)

In a play-by-play of the $9.7B Med­Co buy­out, No­var­tis ad­mits it over­paid while of­fer­ing a huge wind­fall to ex­ecs

A month into his tenure at The Medicines Company, new CEO Mark Timney reached out to then-Novartis pharma chief Paul Hudson: Any interest in a partnership?

No, Hudson told him. Not now, at least.

Ten months later, Hudson had left to run Sanofi and Novartis CEO Vas Narasimhan was paying $9.7 billion for the one-drug biotech – the largest in the string of acquisitions Narasimhan has signed since his 2017 appointment.

The deal was the product of an activist investor and his controversial partner working through nearly a year of cat-and-mouse negotiations to secure a deal with Big Pharma’s most expansionist executive. It represented a huge bet in a cardiovascular field that already saw two major busts in recent years and brought massive returns for two of the industry’s most eye-raising names.

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Paul Hudson. Sanofi

New Sanofi CEO Hud­son adds next-gen can­cer drug tech to the R&D quest, buy­ing Syn­thorx for $2.5B

When Paul Hudson lays out his R&D vision for Sanofi tomorrow, he will have a new slate of interleukin therapies and a synthetic biology platform to boast about.

The French pharma giant announced early Monday that it is snagging San Diego biotech Synthorx in a $2.5 billion deal. That marks an affordable bolt-on for Sanofi but a considerable return for Synthorx backers, including Avalon, RA Capital and OrbiMed: At $68 per share, the price represents a 172% premium to Friday’s closing.

Synthorx’s take on alternative IL-2 drugs for both cancer and autoimmune disorders — enabled by a synthetic DNA base pair pioneered by Scripps professor Floyd Romesberg — “fits perfectly” with the kind of innovation that he wants at Sanofi, Hudson said.

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Jake Van Naarden, Josh Bilenker, Nisha Nanda (Credit: Loxo, Aisling Capital)

Josh Bilenker and his Loxo crew are tak­ing the reins on on­col­o­gy R&D at Eli Lil­ly, culling the weak and map­ping a new path

Josh Bilenker, Jake Van Naarden and Nisha Nanda came out of Eli Lilly’s $8 billion Loxo Oncology buyout with a bundle of cash and plenty of choices on what they could do next. Start a new company, go public. Live on the beach in 5-star luxury. Contemplate the stars — in their own observatory.

So what are they doing?

They formed a new executive team that is taking over the management of Eli Lilly’s hundreds-strong oncology R&D group — essentially using Loxo as a base for a bold new experiment in Big Pharma R&D in an attempt to create a true biotech environment with the deep pockets of a top-15 industry player. They’ve recruited David Hyman from Memorial Sloan Kettering to join the team as chief medical officer. And the mandate includes culling out the oncology pipeline, highlighting their star prospects and going after new programs wherever they can find the best prospects.

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Game on: Re­gen­eron's BC­MA bis­pe­cif­ic makes clin­i­cal da­ta de­but, kick­ing off mul­ti­ple myelo­ma matchup with Bris­tol-My­ers

As J&J attempts to jostle past Bristol-Myers Squibb and bluebird for a landmark approval of its anti-BCMA CAR-T — and while GlaxoSmithKline maps a quick path to the FDA riding on its own BCMA-targeting antibody-drug conjugates — the bispecifics are arriving on the scene to stake a claim for a market that could cross $10 billion per year.

The main rivalry in multiple myeloma is shaping up to be one between Regeneron and Bristol-Myers, which picked up a bispecific antibody to BCMA through its recently closed $74 billion takeover of Celgene. Both presented promising first-in-human data at the ASH 2019 meeting.

FDA lifts hold on Abeon­a's but­ter­fly dis­ease ther­a­py, paving way for piv­otal study

It’s been a difficult few years for gene and cell therapy startup Abeona Therapeutics. Its newly crowned chief Carsten Thiel was forced out last year following accusations of unspecified “personal misconduct,” and this September, the FDA imposed a clinical hold on its therapy for a form of “butterfly” disease. But things are beginning to perk up. On Monday, the company said the regulator had lifted its hold and the experimental therapy is now set to be evaluated in a late-stage study.

Roche faces an­oth­er de­lay in strug­gle to nav­i­gate Spark deal past reg­u­la­tors — but this one is very short

Roche today issued the latest in a long string of delays of its $4.3 billion buyout of Philadelphia-based Spark Therapeutics. The delay comes as little surprise — it is their 10th in as many months — as their most recent delay was scheduled to expire before a key regulatory deadline.

But it is notable for its length: 6 days.

Previous extensions had moved the goalposts by about 3 weeks to a month, with the latest on November 22 expiring tomorrow. The new delay sets a deadline for next Monday, December 16, the same day by which the UK Competition and Markets Authority has to give its initial ruling on the deal. And they already reportedly have lined up an OK from the FTC staff – although that’s only one level of a multi-step process.

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