Eye­ing an IPO, Sutro re­tools its $1B I/O deal with Cel­gene but stays fo­cused on BC­MA

Bill Newell

In the three years that Sutro and Cel­gene have been work­ing un­der the um­brel­la of a bil­lion-dol­lar deal, Sutro CEO Bill Newell ex­pects his re­search crew has ex­plored 15 dif­fer­ent tar­gets, in­clud­ing the im­muno-on­col­o­gy stand-outs PD-1 and PD-L1. And the biotech has grown with Cel­gene’s help, mov­ing from about 90 staffers to 130 as the biotech pushed its own lead pro­grams to­ward the clin­ic.

Now, they’re re­tool­ing their pact. Cel­gene is adding an op­tion to ac­quire world­wide rights on a sec­ond pro­gram, one of four that the South San Fran­cis­co-based biotech will spot­light in the re­vised col­lab­o­ra­tion. On­ly one of those – an an­ti­body drug con­ju­gate tar­get­ing B-Cell mat­u­ra­tion anti­gen (BC­MA) – is in pub­lic view as the part­ners stay un­der cov­er on the rest.

Cel­gene’s deal with Sutro on BC­MA rep­re­sents a key part of the big biotech’s high-stakes plan to sur­round the mul­ti­ple myelo­ma mar­ket, com­ple­men­tary to the bril­liant re­sults they’ve been see­ing at blue­bird bio with new CAR-T da­ta from bb2121 as well as their $625 mil­lion buy­out (the full deal pack­age weighed in at more than $3 bil­lion) of En­gMab, a sto­ry we broke back in Sep­tem­ber, which cen­ters on a T-cell bis­pe­cif­ic pro­gram for BC­MA.

By us­ing three dif­fer­ent ther­a­peu­tic strate­gies, Cel­gene hopes to con­tin­ue to dom­i­nate mul­ti­ple myelo­ma, where its block­buster treat­ment Revlim­id con­tin­ues to over­shad­ow the mar­ket.

“We are ex­cit­ed about that tar­get for myelo­ma,” Newell tells me. “Three dif­fer­ent modal­i­ties gives them dif­fer­ent pa­tients for whom dif­fer­ent ther­a­pies might be ap­pro­pri­ate. CAR-T is ex­cit­ing, but not all pa­tients will be el­i­gi­ble for CAR-T. They want to fo­cus on dif­fer­ent modal­i­ties.”

As part of the re­cal­i­bra­tion with Sutro, which nar­rows the fo­cus of the part­ner­ship, Cel­gene is giv­ing up its op­tion to buy the com­pa­ny, a fa­vorite tool of Cel­gene deal­mak­er George Golumbes­ki, leav­ing Newell free to go on an in­de­pen­dent path that he says may well lead to an IPO some­time next year – de­pend­ing on how the pub­lic mar­kets are lin­ing up.

There aren’t any big num­bers to re­port to­day. Yes, Cel­gene is pay­ing an un­spec­i­fied up­front, with more cash due to ac­quire the world­wide rights once they hit an IND for the sec­ond pro­gram. But the specifics are stay­ing un­der wraps – at least un­til the S-1. Cel­gene has rights to buy stock in the com­pa­ny, whether it stays pri­vate or when it goes pub­lic. And Sutro will keep US com­mer­cial rights to the third and fourth pro­grams in the deal, leav­ing Cel­gene with ex-US rights to any prod­uct that comes out of it.

“The cap­i­tal avail­able in pri­vate and pub­lic mar­kets we think is pret­ty at­trac­tive,” says Newell. “We raised over $100 mil­lion in ven­ture cap­i­tal, $200 mil­lion in non-di­lu­tive cap­i­tal.”

An IPO is one way for the com­pa­ny to con­tin­ue to move ahead on its own, with Cel­gene as a big part­ner. And that’s the way Newell be­lieves may be best for Sutro.

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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