Play­ing catch-up, Eli Lil­ly swoops in with $1.6B cash deal for Ar­mo Bio and its promis­ing PhI­II can­cer drug

Eli Lil­ly’s BD team is on the march, and as promised they’re stay­ing care­ful­ly fo­cused on on­col­o­gy.

This morn­ing Lil­ly $LLY an­nounced that it has ac­quired Ar­mo Bio­Sciences $AR­MO for $1.6 bil­lion in cash — just a few months af­ter their suc­cess­ful IPO de­but on Nas­daq. This is a biotech that in­de­pen­dent in­vestor Brad Lon­car re­cent­ly dubbed as the “next Nek­tar,” com­par­ing Ar­mo to one of the dar­lings in im­muno-on­col­o­gy which al­so has a strat­e­gy in­volv­ing cy­tokine im­muno-stim­u­la­to­ry ther­a­pies.

Levi Gar­raway

Lil­ly is pay­ing $50 a share, which im­me­di­ate­ly trig­gered a 67% spike on the stock this morn­ing as in­vestors rushed in to take ad­van­tage of the lat­est bolt-on deal.

The jew­el in the crown for Lil­ly here is pegilode­cakin, a PE­Gy­lat­ed IL-10 that is now in a piv­otal study af­ter demon­strat­ing ear­ly-stage suc­cess in sev­er­al tu­mor types. The Phase III is for pan­cre­at­ic can­cer, with tri­als un­der­way for lung and re­nal cell can­cer, melanoma and oth­er sol­id tu­mor types. Lil­ly al­so high­light­ed some pre­clin­i­cal can­di­dates it’s pick­ing up.

The big idea here falls right in the sweet spot of the cur­rent I/O rave. The lead drug is de­signed to spur the pro­lif­er­a­tion of CD8+ T cells in pa­tients, im­prov­ing prog­no­sis and length­en­ing the sur­vival of can­cer pa­tients. 

An­a­lysts fol­low­ing Lil­ly have been track­ing the ex­ec­u­tive team’s keen in­ter­est in plung­ing di­rect­ly in­to I/O af­ter get­ting left be­hind by lead­ers like Mer­ck and Bris­tol-My­ers Squibb. Just a few days ago the com­pa­ny added to the grow­ing ev­i­dence of a break­out move by re­cruit­ing Leena Gand­hi, an in­ves­ti­ga­tor at the Perl­mut­ter Can­cer Cen­ter at NYU Lan­gone Health and a Dana-Far­ber vet, to head up its im­muno-on­col­o­gy re­search work. Gand­hi played a big role in one re­cent Keytru­da pro­gram and she’ll now be putting her know-how to use for Lil­ly.

Lil­ly could eas­i­ly af­ford a string of these bolt-on deals, adding to a string of M&A pacts topped by Take­da’s $62 bil­lion Shire buy­out. Af­ter a lengthy drought of deals, big play­ers are clear­ly will­ing to fork over ma­jor pre­mi­ums to beef up their pipelines and add cat­a­lysts to their cal­en­dars.

And Lil­ly sig­naled it’s on­ly be­gun to wheel and deal.

“As we de­vel­op our im­muno-on­col­o­gy port­fo­lio, Lil­ly will pur­sue med­i­cines that use the body’s im­mune sys­tem in new ways to treat can­cer,” added Levi Gar­raway, se­nior vice pres­i­dent, glob­al de­vel­op­ment and med­ical af­fairs, Lil­ly On­col­o­gy. “We be­lieve that pegilode­cakin has a unique im­muno­log­ic mech­a­nism of ac­tion that could even­tu­al­ly al­low physi­cians to of­fer new hope for many can­cer pa­tients.”


Im­age: SHUT­TER­STOCK

Nick Galakatos, Blackstone global head of life sciences

Nick Galakatos and the Black­stone team now have a record $4.6B to in­vest in bio­phar­ma, with a big fo­cus on push­ing com­pa­nies over the top

Nick Galakatos and his team at Blackstone Life Sciences have seen their biggest opportunities swell up in mostly established players who don’t have all the money they need to accomplish everything on the to-do list. And right now, with the industry booming, that’s a long list with some hefty needs.

The Blackstone team has neatly tied up the largest private fund ever raised in life sciences for making big dreams come true in biopharma. Late Thursday, Blackstone put out word that they had closed their highly anticipated fund with the projected $4.6 billion all in.

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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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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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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.

Gilead boasts of pos­i­tive remde­sivir da­ta on mor­tal­i­ty — but their analy­sis pro­vokes the skep­tics

Gilead is surging again off data that suggest its antiviral remdesivir might improve survival.

The new data come from an analysis Gilead conducted comparing the death rate and recovery time of patients in one of its remdesivir trials to a group of 800 patients “with similar baseline characteristics and disease severity” who received only standard-of-care around the same time. The result, they said, suggested that patients who received remdesivir had a 62% better chance at surviving than those who did not.

Hal Barron, GSK

Win or lose on the mar­ket­ing OK, the FDA just gunned down GSK’s bright hopes for their BC­MA ther­a­py

The FDA’s ODAC — the Oncologic Drugs Advisory Committee — has a well-known bias in favor of adding new cancer drugs to the market, even if efficacy is at best marginal and serious safety issues demand careful management.

Doctors want as many arrows in their quiver as they can get. And when patients are dying after failing multiple drugs, why not give it a go one more time?

GlaxoSmithKline, though, is about to test out how their new BCMA antibody drug conjugate belantamab mafodotin can do after being mauled in an in-house FDA review, ahead of the Tuesday expert panel discussion. Even if the agency goes ahead with an expected green light, this drug will likely be constrained to a small niche — icing any plans they may have for making waves in oncology anytime soon.

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Covid-19 roundup: BioN­Tech go­ing head-to-head with Mod­er­na as PhI­II mR­NA launch looms; Tri­al on Shin­zo Abe’s once-fa­vorite an­tivi­ral is in­con­clu­sive

It’s a race to the Phase III finish line now for the 2 leading mRNA vaccines in the pipeline for Covid-19.

BioNTech chief Ugur Sahin told the Wall Street Journal that his company will start Phase III testing of their vaccine later this month, setting them up to lateral the data to regulators before the end of this year.

That puts them essentially on the exact same schedule as Moderna is dedicated to. The Massachusetts rival to BioNTech also expects to launch Phase III this month. Lots of rumors have circulated about delays and conflict among the scientists advancing the Moderna jab, but the biotech has consistently stuck to its plan to start a late-stage pivotal this month.

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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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Mer­ck ex­pands scope of Zymeworks an­ti­body al­liance, adding close to $900M in mile­stones

Nearly a decade after first partnering with Merck, Vancouver-based biotech Zymeworks has expanded its collaboration with the pharma giant once again.

Zymeworks re-upped with Merck in a new licensing agreement, granting the New Jersey pharma giant the right to develop up to 3 additional multispecific antibody candidates. In exchange, the biotech will receive an undisclosed upfront payment — Merck is always loath to discuss cash terms — and nearly $900 million in combined regulatory ($411 million) and commercial ($480 million) milestones.

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