Af­ter promis­ing Trump new US jobs, Eli Lil­ly sets out to chop 200 R&D staffers

David Ricks, Lil­ly

Eli Lil­ly is bring­ing out the cor­po­rate ax and aim­ing it at its R&D op­er­a­tions.

Just weeks af­ter the com­pa­ny an­nounced plans to lay off 485 staffers that had been in­volved in the failed solanezum­ab pro­gram, the com­pa­ny spread word on Fri­day that it’s look­ing for 200 re­searchers to take a “vol­un­tary ex­it.”

A spokesper­son for Lil­ly tells me that this amount to about 3% of the com­pa­ny’s to­tal re­search staff. And the cuts aren’t be­ing aimed at any par­tic­u­lar unit.

“Lil­ly is fo­cus­ing its in­vest­ment in new R&D ca­pa­bil­i­ties to en­sure port­fo­lio sus­tain­abil­i­ty,” she added. “We plan to in­crease our in­vest­ment and hire in strate­gic ar­eas, in­clud­ing mol­e­cule-mak­ing ca­pa­bil­i­ties, im­munol­o­gy and Alzheimer’s dis­ease, across our U.S. re­search sites lat­er this year.”

In re­sponse to a fol­lowup query, the spokesper­son said that this is not a buy­out and that it won’t tar­get ex­ec­u­tives, then said she had no oth­er in­for­ma­tion to of­fer in re­ply to my query whether any fur­ther lay­offs are be­ing planned.

The cuts were an­nounced in­ter­nal­ly two days af­ter Lil­ly CEO Dave Ricks as­sured Pres­i­dent Trump that Lil­ly is in a hir­ing mode on the man­u­fac­tur­ing front — a big is­sue for the new ad­min­is­tra­tion. “We’re hir­ing man­u­fac­tur­ing jobs as I speak,” Ricks told Trump. “Some of the poli­cies you’ve sug­gest­ed — tax, dereg­u­la­tion — those are things that could re­al­ly al­low us to ex­pand op­er­a­tions.”

But Ricks and his Big Phar­ma brethren have be­come ex­perts at rein­ing in em­ploy­ment over the last five years, rather than adding head count. And there’s noth­ing un­usu­al about these kinds of R&D re­align­ments in Big Phar­ma. As­traZeneca, No­var­tis and Mer­ck, among oth­ers, have been do­ing the same thing over the past year. And Pfiz­er said years ago that it ex­pects to see a con­stant chang­ing line­up as it fo­cus­es on new pro­grams and drops its duds.

Lil­ly an­nounced dur­ing its Q4 call late last week that it is shut­ter­ing Ex­pe­di­tion Pro, its sole re­main­ing Phase III study for the one-time megablock­buster hope­ful solanezum­ab. Solanezum­ab failed Ex­pe­di­tion 3, mark­ing a painful­ly ex­pen­sive flop — the third straight clin­i­cal fail­ure. Ex­pe­di­tion Pro, said Ricks, was head­ed for yet an­oth­er fail­ure. The phar­ma gi­ant en­dured a se­ries of set­backs dur­ing a long and painful R&D drought, but it’s been re­ward­ed by some ma­jor ap­provals in the last cou­ple of years. And this year an­a­lysts have high hopes that baric­i­tinib will fol­low up with an ap­proval on its way to block­buster sta­tus.

At the end of 2015, Eli Lil­ly em­ployed 41,275 peo­ple, in­clud­ing ap­prox­i­mate­ly 23,425 em­ploy­ees out­side the US. But it’s al­so been ship­ping jobs over­seas. Five years ear­li­er Lil­ly em­ployed 40,360 peo­ple, in­clud­ing ap­prox­i­mate­ly 20,300 em­ploy­ees out­side the Unit­ed States.

Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors. 

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

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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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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H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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