Five months, $98.5M and a PhII drug from No­var­tis lat­er, Ma­gen­ta Ther­a­peu­tics is floor­ing it

Last No­vem­ber, Ma­gen­ta Ther­a­peu­tics end­ed a year of self-im­posed start­up si­lence with a hefty $48.5 mil­lion Se­ries A and a bur­geon­ing team of in­ves­ti­ga­tors fo­cused on cord blood stem cell ther­a­pies. To­day, just a lit­tle more than 5 months lat­er, it’s adding $50 mil­lion in Se­ries B cash from some mar­quee in­vestors that in­cludes the ven­ture group for­mer­ly known as Google and in-li­cens­ing a mid-stage drug that No­var­tis clear­ly thinks high­ly of for en­hanc­ing cord blood stem cells as a treat­ment.

Oh, and some of that ven­ture cash is from crossover in­vestors, spurring some added think­ing in this fledg­ling biotech about the right tim­ing on a po­ten­tial IPO.

The drug is HSC835, which is now be­ing rechris­tened as MG­TA-456. And the ther­a­py comes with da­ta from some small tri­als, help­ing ad­vance Ma­gen­ta with a full-fledged clin­i­cal pro­gram which fits neat­ly in­to Ma­gen­ta’s R&D strat­e­gy.

No­var­tis has spot­light­ed this drug for its abil­i­ty to im­prove the ther­a­peu­tic pow­er of um­bil­i­cal cord trans­plants, amp­ing up the stem cells need­ed for the en­graft­ment process to cre­ate in­fec­tion-fight­ing cells. And that’s right in Ma­gen­ta’s wheel­house.

It’s a great fit for Ma­gen­ta, CEO Ja­son Gard­ner tells me. The biotech hired in a pair of the ear­ly in­ves­ti­ga­tors on this pro­gram. And when they went to No­var­tis to sound out their in­ter­est man­ag­ing its clin­i­cal fu­ture, de­clar­ing a com­mit­ment to hus­tling it through the clin­ic, the mes­sage res­onat­ed well at the phar­ma gi­ant, which re­tains an un­spec­i­fied in­ter­est in the drug.

Ma­gen­ta is keep­ing those terms to it­self — which is gen­er­al­ly how No­var­tis likes to keep things.

The ex­tra $50 mil­lion that just ar­rived in an ac­cel­er­at­ed Se­ries B will al­so help the biotech ex­pand its fo­cus on can­cer, ge­net­ic dis­eases and au­toim­mu­ni­ty.

GV (for­mer­ly Google Ven­tures) led the round, with par­tic­i­pa­tion from all ex­ist­ing in­vestors, in­clud­ing At­las Ven­ture, Third Rock Ven­tures, Part­ners In­no­va­tion Fund and Ac­cess In­dus­tries. The fi­nanc­ing al­so in­clud­ed Cas­din Cap­i­tal and oth­er crossover in­vestors, as well as Be The Match Bio­Ther­a­pies, a sub­sidiary of Na­tion­al Mar­row Donor Pro­gram. And Be The Match Bio­Ther­a­pies — with its 178 US trans­plant cen­ters — is al­ly­ing with the biotech as it push­es ahead with new clin­i­cal tri­als.

We’re a long way from the 2014 biotech IPO boom, which was the last time you could flip a start­up in­to Nas­daq. But the CEO is hap­py to con­cede that the sub­ject has come up in­side the com­pa­ny.

“We have dis­cussed that op­tion,” says Gard­ner. “We like that op­tion.” But there are lots of op­tions to con­sid­er right now, he adds, in­clud­ing do­ing some non-di­lu­tive deals.

Says Gard­ner: “We like to have all the op­tions avail­able to the com­pa­ny.”

Out-li­cens­ing is not a new strat­e­gy for No­var­tis. Just last March No­var­tis de­cid­ed to spin out a pair of an­ti-ag­ing ther­a­peu­tics to a PureTech start­up, the lat­est in a se­ries of out-li­cens­ing deals for a com­pa­ny that has been care­ful to fo­cus on the core strat­e­gy un­der Chair­man Jo­erg Rein­hardt, who’s keen­ly in­ter­est­ed in main­tain­ing a rel­a­tive­ly con­ser­v­a­tive re­search fo­cus at the phar­ma gi­ant as rev­enue flat­tened and then de­clined.

For Gard­ner, a GSK vet who was sent to Cam­bridge to help scout new ther­a­pies for the phar­ma gi­ant and wound up get­ting sucked in­to At­las’ start­up world, the ac­cel­er­a­tion at Ma­gen­ta feels fine.

By the end of this year, says Gard­ner, he ex­pects the 26-mem­ber team at Ma­gen­ta to grow to about 40. And along the way will come more da­ta and a clear out­line of de­vel­op­ment time­lines that will put this biotech way ahead of most any fledg­ling to pop up in the Boston hub.

Has the mo­ment fi­nal­ly ar­rived for val­ue-based health­care?

RBC Capital Markets’ Healthcare Technology Analyst, Sean Dodge, spotlights a new breed of tech-enabled providers who are rapidly transforming the way clinicians deliver healthcare, and explores the key question: can this accelerating revolution overturn the US healthcare system?

Key points

Tech-enabled healthcare providers are poised to help the US transition to value, not volume, as the basis for reward.
The move to value-based care has policy momentum, but is risky and complex for clinicians.
Outsourced tech specialists are emerging to provide the required expertise, while healthcare and tech are also converging through M&A.
Value-based care remains in its early stages, but the transition is accelerating and represents a huge addressable market.

Lat­est on ul­tra-rare dis­ease ap­proval; Pos­i­tive, if mixed, signs for Bio­gen's ALS drug; Clay Sie­gall finds a new job; and more

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FDA spells out how can­cer drug de­vel­op­ers can use one tri­al for both ac­cel­er­at­ed and full ap­provals

The FDA’s Oncology Center of Excellence has been a bright spot within the agency in terms of speeding new treatments to patients. That flexibility was on full display this morning as FDA released new draft guidance spelling out exactly how oncology drug developers can fulfill both the accelerated and full approval’s requirements with just a single randomized controlled trial.

While Congress recently passed legislation that will allow FDA to require confirmatory trials to be recruiting and ongoing prior to granting an accelerated approval, the agency is now making clear that the initial trial used to win the AA, if designed appropriately, can also serve as the trial for converting the accelerated approval into a full approval.

Clay Siegall, Morphimmune CEO

Up­dat­ed: Ex-Seagen chief Clay Sie­gall emerges as CEO of pri­vate biotech

Clay Siegall will be back in the CEO seat, taking the helm of a private startup working on targeted cancer therapies.

It’s been almost a year since Siegall resigned from Seagen, the biotech he co-founded and led for more than 20 years, in the wake of domestic violence allegations by his then-wife. His eventual successor, David Epstein, sold the company to Pfizer in a $43 billion deal unveiled last week.

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FDA ad­vi­sors unan­i­mous­ly rec­om­mend ac­cel­er­at­ed ap­proval for Bio­gen's ALS drug

A panel of outside advisors to the FDA unanimously recommended that the agency grant accelerated approval to Biogen’s ALS drug tofersen despite the drug failing the primary goal of its Phase III study, an endorsement that could pave a path forward for the treatment.

By a 9-0 vote, members of the Peripheral and Central Nervous System Drugs Advisory Committee said there was sufficient evidence that tofersen’s effect on a certain protein associated with ALS is reasonably likely to predict a benefit for patients. But panelists stopped short of advocating for a full approval, voting 3-5 against (with one abstention) and largely citing the failed pivotal study.

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No­vo Nordisk oral semaglu­tide tri­al shows re­duc­tion in blood sug­ar, plus weight loss

Novo Nordisk is testing higher levels of its oral version of its GLP-1, semaglutide, and its type 2 diabetes trial results released today show reductions in blood sugar as well as weight loss.

In the Phase IIIb trial, Novo compared its oral semaglutide in 25 mg and 50 mg doses with the 14 mg version that’s currently the maximum approved dose. The trial looked at how the doses compared when added to a stable dose of one to three oral antidiabetic medicines in people with type 2 diabetes who were in need of an intensified treatment.

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Steven James, Pionyr Immunotherapeutics CEO

Gilead pass­es on ful­ly ac­quir­ing Pi­o­nyr, as eyes now turn to Tizona, a fel­low sum­mer 2020 buy­out op­tion

Gilead and Pionyr Immunotherapeutics, a biotech trying to follow up on the first generation of checkpoint inhibitors, have “mutually agreed” on a rewrite to their 2020 terms, with Gilead deciding not to buy out the company.

The California biopharma waived its option to acquire the remaining 50.1% of Pionyr, which would have triggered a $315 million upfront payment and up to $1.15 billion down the road. Had Gilead waited to decide, the drugmaker would have had a potential payment to make in the near term under their agreement, a spokesperson said in an email to Endpoints News.

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Sijmen de Vries, Pharming CEO

FDA ap­proves Pharm­ing drug for ul­tra-rare im­mun­od­e­fi­cien­cy dis­ease

US regulators cleared an ultra-rare drug from Pharming Group, by way of Novartis, on Friday afternoon.

The Dutch biotech said the FDA greenlit leniolisib for an immunodeficiency disease known as activated phosphoinositide 3-kinase delta (PI3Kδ) syndrome, or APDS. People 12 years and older can receive the oral drug, to be marketed as Joenja, beginning early next month, Pharming said, five days ahead of the decision deadline set by the FDA as part of a priority review.

Eu­ro­pean doc­tors di­al up dig­i­tal com­mu­ni­ca­tion with phar­mas, but still lean to­ward in-per­son med meet­ings, study finds

As in-person sales rep access declines in the big five European countries, a corresponding uptick in virtual rep access is happening. It’s not surprising, but it does run counter to pharma companies’ assessment – along with long-held sales rep sway in Europe – that in-person access hadn’t changed.

CMI Media Group and Medscape’s recent study reports that 75% of physicians in the EU5 countries of Spain, Germany, Italy, France and the UK already limit engagements with pharma sales reps, and 25% of those surveyed plan to decrease time with reps.

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