Feds of­fer up a new bonus plan for the R&D work they of­ten pay for

As the near­ly 1,000-page 21st Cen­tu­ry Cures Act is im­ple­ment­ed in phas­es, the full im­pact of the law is just be­gin­ning to be re­al­ized, and for one pro­vi­sion, the law has cre­at­ed a new pro­gram that re­wards bio­phar­mas for de­vel­op­ing prod­ucts that the gov­ern­ment pur­chas­es and of­ten pays to de­vel­op.


Un­der sec­tion 3086 of the Cures Act, the FDA must es­tab­lish a new pri­or­i­ty re­view vouch­er pro­gram for ma­te­r­i­al threat med­ical coun­ter­mea­sures — or MCMs — which are prod­ucts that may be used in the event of a po­ten­tial pub­lic health emer­gency, like an an­thrax or ricin at­tack, or a nat­u­ral­ly emerg­ing dis­ease like SARS or oth­er nat­ur­al dis­as­ter.

If a com­pa­ny wins ap­proval for such a ma­te­r­i­al threat MCM, FDA will award the com­pa­ny a pri­or­i­ty re­view vouch­er that can be used or sold to an­oth­er spon­sor to ex­pe­dite by four months FDA’s re­view of an­oth­er prod­uct that would oth­er­wise not re­ceive pri­or­i­ty re­view from the reg­u­la­tor.

The vouch­ers and ex­pe­dit­ed re­views are a hot com­mod­i­ty for com­pet­i­tive phar­ma­ceu­ti­cal com­pa­nies try­ing to bring their prod­ucts to mar­ket first — some have al­ready been sold for as much as $350 mil­lion.

This is the third PRV pro­gram cre­at­ed by Con­gress — the oth­er two were de­signed to in­cen­tivize the de­vel­op­ment of new rare pe­di­atric and trop­i­cal dis­ease treat­ments. And al­though all three pro­grams are dis­tinct, all the vouch­ers award­ed by FDA com­pete with one an­oth­er, mean­ing that gen­er­al­ly the val­ue of the vouch­ers can go down if there more be­come avail­able for sale.

But what makes this pro­gram unique is that the US gov­ern­ment — usu­al­ly via the Bio­med­ical Ad­vanced Re­search and De­vel­op­ment Au­thor­i­ty (BAR­DA), Na­tion­al In­sti­tutes of Health and FDA grants — fre­quent­ly pays for such prod­ucts to be de­vel­oped and of­ten is the on­ly pur­chas­er of such prod­ucts along­side oth­er gov­ern­ments. Ob­vi­ous­ly, no con­sumer mar­ket ex­ists for ma­te­r­i­al threat med­ical coun­ter­mea­sures.

FDA says it in­tends to is­sue guid­ance to ad­dress MCM-spe­cif­ic is­sues and the agency has al­ready is­sued guid­ance to ad­dress ques­tions re­lat­ed to the trop­i­cal dis­ease PRV pro­gram and the rare pe­di­atric dis­ease PRV pro­gram.


No MCM pri­or­i­ty vouch­ers have been award­ed by FDA yet, but Soli­genix, a com­pa­ny with no FDA-ap­proved prod­ucts mar­ket­ed, is de­vel­op­ing an MCM vac­cine, known as Ri­Vax, to pre­vent the ef­fects of ex­po­sure to the dan­ger­ous poi­son known as ricin.

On Mon­day, the com­pa­ny an­nounced that NIH’s Na­tion­al In­sti­tute of Al­ler­gy and In­fec­tious Dis­eases has ex­er­cised an op­tion to fund GMP-com­pli­ant Ri­Vax bulk drug sub­stance and fin­ished drug prod­uct man­u­fac­tur­ing, which is re­quired for fu­ture pre­clin­i­cal and clin­i­cal safe­ty and ef­fi­ca­cy stud­ies.

To date, Soli­genix has re­ceived $21.2 mil­lion from NI­AID, and if all con­tract op­tions are ex­er­cised, the com­pa­ny and the Uni­ver­si­ty of Texas South­west­ern, where the vac­cine pro­tein orig­i­nat­ed, will have re­ceived al­most $25 mil­lion to de­vel­op Ri­Vax thanks to a se­ries of grants from both NI­AID and FDA. A spokes­woman from Soli­genix con­firmed to Fo­cus: “De­vel­op­ment of heat sta­ble Ri­Vax, which in­cludes man­u­fac­ture, has been ful­ly fund­ed to date by NI­AID.”

If ap­proved by FDA, Ri­Vax, which has al­ready re­ceived an or­phan drug des­ig­na­tion, would like­ly be pur­chased by the US Cen­ters for Dis­ease Con­trol for its $7 bil­lion Strate­gic Na­tion­al Stock­pile and the com­pa­ny would win a cov­et­ed PRV.

An­oth­er ex­am­ple of a prod­uct that would have won such an MCM PRV if the pro­gram had been cre­at­ed ear­li­er and was al­so de­vel­oped with the help of BAR­DA and NI­AID funds is Emer­gent BioSo­lu­tions’ an­thrax vac­cine, known as Bio­Thrax. Last De­cem­ber, Emer­gent signed a $911 mil­lion con­tract with CDC to sup­ply the Strate­gic Na­tion­al Stock­pile with al­most 30 mil­lion dos­es of the vac­cine through 2021.

An Emer­gent spokesman told Fo­cus that the com­pa­ny does in­vest in re­search and de­vel­op­ment and has four prod­uct can­di­dates in its pipeline that could have PRV po­ten­tial, in­clud­ing a dengue ther­a­peu­tic in Phase 1, a Zi­ka ther­a­peu­tic, a broad-spec­trum an­tibi­ot­ic be­ing de­vel­oped for burk­holde­ria pseudo­ma­llei and a ther­a­peu­tic for pan-filovirus­es.

First pub­lished here. Reg­u­la­to­ry Fo­cus is the flag­ship on­line pub­li­ca­tion of the Reg­u­la­to­ry Af­fairs Pro­fes­sion­als So­ci­ety (RAPS), the largest glob­al or­ga­ni­za­tion of and for those in­volved with the reg­u­la­tion of health­care and re­lat­ed prod­ucts, in­clud­ing med­ical de­vices, phar­ma­ceu­ti­cals, bi­o­log­ics and nu­tri­tion­al prod­ucts. Email news@raps.org for more in­for­ma­tion.


Zachary Brennan

managing editor, RAPS

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Top an­a­lyst of­fers a rare, up­beat in­ter­pre­ta­tion of Ab­b­Vie’s $63B Al­ler­gan deal — but there’s a catch

Af­ter get­ting beat up on all sides from mar­ket ob­servers who don’t much care for the lat­est mega-deal to ar­rive in bio­phar­ma, at least one promi­nent an­a­lyst now is start­ing to like what he sees in the num­bers for Ab­b­Vie/Al­ler­gan.

But it’s go­ing to take some en­cour­age­ment if Ab­b­Vie ex­ecs want it to last.

Ab­b­Vie’s mar­ket cap de­clined $20 bil­lion on Tues­day as the stock took at 17% hit dur­ing the day. And SVB Leerink’s Ge­of­frey Porges can see a dis­tinct out­line of an up­side af­ter re­view­ing the fun­da­men­tals of the deal.

While Ako­rn works to re­vive its for­tunes, the FDA hits it with an­oth­er warn­ing let­ter

Ako­rn just can’t dig it­self out of its hole.

The spe­cial­ty gener­ic drug­mak­er has re­ceived yet an­oth­er warn­ing let­ter from the FDA this year. With­out dis­clos­ing any specifics, the Lake For­est, Illi­nois-based drug­mak­er on Wednes­day said the US reg­u­la­tor had is­sued the let­ter, cit­ing an in­spec­tion of its Som­er­set, New Jer­sey man­u­fac­tur­ing fa­cil­i­ty in Ju­ly and Au­gust of 2018. The com­pa­ny’s shares $AKRX dipped about 1.7% to $4.65 be­fore the bell.

Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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Image: Chris Varma. Frontier

UP­DAT­ED: Chris Var­ma un­veils MP­M's lat­est start­up — eye­ing 'un­drug­gable' can­cer tar­gets and pow­ered by ma­chine learn­ing, $67M

Two years af­ter MPM Cap­i­tal en­list­ed Chris Var­ma on its busy on­col­o­gy team, the for­mer en­tre­pre­neur-in-res­i­dence is un­veil­ing his first ven­ture project out of his new stomp­ing grounds in the Bay Area: Fron­tier Med­i­cines.

For Var­ma, who’s al­so co-found­ed Blue­print Med­i­cines and built com­pa­nies at Third Rock and Flag­ship, this marks an­oth­er op­por­tu­ni­ty to ap­ply some cut­ting-edge sci­ence to “sev­er­al of the most im­por­tant and dif­fi­cult tar­gets in can­cer” — tar­gets that oth­ers have tried to tack­le with more clas­si­cal meth­ods and failed. The launch round comes in at $67 mil­lion, which should go some way in scaf­fold­ing a pre­clin­i­cal pipeline and push one or more as­sets in­to the clin­ic three years from now, he tells me.

The top 15 mega-deals in bio­phar­ma: Ab­b­Vie and Bris­tol-My­ers ac­qui­si­tions stir fresh de­bate over what's too big to buy

The debate over what’s too big to buy in biotech is back. A number of top analysts went right after AbbVie’s rationale for the Allergan deal today, just as Bristol-Myers Squibb stirred immediate debate over the worth and wisdom of acquiring Celgene.

To help provide some added context to this discussion, we asked DealForma chief Chris Dokomajilar to look over the past decade of major M&A in biopharma to decipher the top 15 plays.

The new numbers, unadjusted for inflation, harken back to the days of the Pfizer-Wyeth buyout and Merck’s decision to absorb Schering-Plough — both triggered in 2009. The heat over those acquisitions made the big pharma mega-deal highly unpopular for most everyone — except Pfizer — as industry leaders swore off almost all but the handy bolt-on acquisition.

Until recently.

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