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.

Fangliang Zhang, AP Images

UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.

President Donald Trump (left) and Moncef Slaoui, head of Operation Warp Speed (Alex Brandon, AP Images)

UP­DAT­ED: White House names fi­nal­ists for Op­er­a­tion Warp Speed — with 5 ex­pect­ed names and one no­table omis­sion

A month after word first broke of the Trump Administration’s plan to rapidly accelerate the development and production of a Covid-19 vaccine, the White House has selected the five vaccine candidates they consider most likely to succeed, The New York Times reported.

Most of the names in the plan, known as Operation Warp Speed, will come as little surprise to those who have watched the last four months of vaccine developments: Moderna, which was the first vaccine to reach humans and is now the furthest along of any US effort; J&J, which has not gone into trials but received around $500 million in funding from BARDA earlier this year; the joint AstraZeneca-Oxford venture which was granted $1.2 billion from BARDA two weeks ago; Pfizer, which has been working with the mRNA biotech BioNTech; and Merck, which just entered the race and expects to put their two vaccine candidates into humans later this year.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Mer­ck wins a third FDA nod for an­tibi­ot­ic; Mereo tack­les TIG­IT with $70M raise in hand

Merck — one of the last big pharma bastions in the beleaguered field of antibiotic drug development — on Friday said the FDA had signed off on using its combination drug, Recarbrio, with hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia. The drug could come handy for use in hospitalized patients who are afflicted with Covid-19, who carry a higher risk of contracting secondary bacterial infections. Once SARS-CoV-2, the virus behind Covid-19, infects the airways, it engages the immune system, giving other pathogens free rein to pillage and plunder as they please — the issue is particularly pertinent in patients on ventilators, which in any case are breeding grounds for infectious bacteria.