Floun­der­ing in the wake of an FDA ap­proval, Achao­gen makes a sec­ond round of deep cuts to stay alive

Suc­cess can be cost­ly in this busi­ness. Par­tial suc­cess can be a dis­as­ter.

Blake Wise, CEO

Just 3 months af­ter Achao­gen ex­ecs took out the bud­get ax and whacked around a quar­ter of its work force, with its R&D chief, CSO and CFO leav­ing in the ex­o­dus, the CEO has to cut much more. The goal now is to slash over­all costs 35% to 40% at the an­tibi­otics de­vel­op­er while post­ing a ‘for sale’ sign in the win­dow as the com­pa­ny con­sid­ers all op­tions in a scram­ble to stay afloat.

Just days ago the com­pa­ny tapped Sil­i­con Val­ley Bank for $25 mil­lion avail­able un­der its loan agree­ment, with pro­vi­sions for main­tain­ing cash re­serves. And all signs in­di­cate that the biotech is in cri­sis mode.

The first cuts came a month af­ter the FDA ap­proved Zem­dri (pla­zomicin) for com­pli­cat­ed uri­nary tract in­fec­tions but re­ject­ed their pitch for blood­stream in­fec­tions — fol­low­ing a re­vamp of the Phase III af­ter on­ly a frac­tion of the planned pa­tient group was re­cruit­ed. 

Difei Yang at Mizuho Se­cu­ri­ties called the re­struc­tur­ing a sur­prise for in­vestors, who were clear­ly not hap­py with the lat­est move to cut the bud­get. Achao­gen’s suf­fer­ing stock $AKAO dropped 12% on Mon­day. Shares are down 71% from the be­gin­ning of this year — bad­ly dam­ag­ing its abil­i­ty to raise more cash through a stock sale. 

Yang added that the move “sig­nals de­te­ri­o­rat­ing busi­ness con­di­tions as the com­pa­ny now has to lim­it the cru­cial in­vest­ment which could im­pact Zem­dri launch. As a re­sult, we ex­tend­ed the the launch up­take pe­ri­od from 5 to 8 years due to re­duced in­vest­ment.” 

Achao­gen flagged its sink­ing for­tunes in their Q2 re­port, not­ing doubts about their abil­i­ty to con­tin­ue as a “go­ing con­cern” af­ter rack­ing up a $470 mil­lion deficit, with about $100 mil­lion in cash and short-term in­vest­ments to op­er­ate with.

Over the past year we’ve seen plen­ty of ev­i­dence about the harsh busi­ness en­vi­ron­ment for new an­tibi­otics as No­var­tis joined the mi­gra­tion of Big Phar­ma out of the low mar­gin are­na. Cheap gener­ics still dom­i­nate the field, even as drug re­sis­tant in­fec­tions con­tin­ue to rise around the world. That leaves small biotechs on their own to han­dle com­mer­cial­iza­tion work with just one or two prod­ucts. It’s not a pret­ty pic­ture.

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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Atul Deshpande, Harbour BioMed chief strategy officer & head, US operations (Harbour BioMedO

An­oth­er biotech IPO set-up? Multi­na­tion­al biotech leaps from round to round, scoop­ing up cash at a blis­ter­ing pace

A short four months after announcing a $75 million haul in Series B+ fundraising, the multinational biotech Harbour BioMed pulled in another round of investments and eclipsed the nine-digit mark in the process.

Harbour completed its Series C financing, the company announced Thursday morning, raising $102.8 million and bringing its total investment sum to over $300 million since its founding in late 2016. The biotech plans to use the money to transition early-stage candidates from the discovery phase, fund candidates already in the clinic, and prep late-stage candidates for commercialization.

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UP­DAT­ED: 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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Ed Engleman, (Stanford Blood Center)

Stan­ford star on­col­o­gy sci­en­tist Ed En­gle­man helped cre­ate the im­munother­a­py field. Now he wants to shake up neu­rode­gen­er­a­tion R&D

Over the last generation of drug R&D, Ed Engleman has been a standout scientist.

The Stanford professor co-founded Dendreon and provided the scientific insights needed to develop Provenge into a pioneering — though not particularly marketable — immunotherapy. He’s spurred a slate of startups, assisted by his well-connected perch as a co-founder of Vivo Capital, and took the dendritic cell story into its next chapter at a startup called Bolt.

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Covid-19 roundup: Af­ter promis­ing US its sum­mer sup­ply, Gilead in talks with EU over remde­sivir ac­cess; First in­haled remde­sivir study un­der­way

It wasn’t lost on European journalists or European doctors that the “amazing deal” the Trump Administration said it signed with Gilead to buy up remdesivir meant that they would have severely limited access to one of only two drugs proven to treat Covid-19. “This is the first major approved drug, and where is the mechanism for access?” Andrew Hill, a research fellow at Liverpool University, told The Guardian. “Once again we’re at the back of the queue.”

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Daniel O'Day, Gilead CEO (Kevin Dietsch/UPI/Bloomberg via Getty Images)

A new study points to $6.5B in pub­lic sup­port build­ing the sci­en­tif­ic foun­da­tion of Gilead­'s remde­sivir. Should that be re­flect­ed in the price?

By drug R&D standards, Gilead’s move to repurpose remdesivir for Covid-19 and grab an emergency use authorization was a remarkably easy, low-cost layup that required modest efficacy and a clean safety profile from just a small group of patients.

The drug OK also arrived after Gilead had paid much of the freight on getting it positioned to move fast.

In a study by Fred Ledley, director of the Center for Integration of Science and Industry at Bentley University in Waltham, MA, researchers concluded that the NIH had invested only $46.5 million in the research devoted to the drug ahead of the pandemic, a small sum compared to the more than $1 billion Gilead expected to spend getting it out this year, all on top of what it had already cost in R&D expenses.

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FDA bars the door — for now — against Mer­ck’s star can­cer drug af­ter Roche beat them to the punch

Merck has been handed a rare setback at the FDA.

After filing for the accelerated approval of a combination of their star PD-1 drug Keytruda with Eisai’s Lenvima as a first-line treatment for unresectable hepatocellular carcinoma, the FDA nixed the move, handing out a CRL because Roche beat them to the punch on the same indication by a matter of weeks.

According to Merck:

Ahead of the Prescription Drug User Fee Act action dates of Merck’s and Eisai’s applications, another combination therapy was approved based on a randomized, controlled trial that demonstrated overall survival. Consequently, the CRL stated that Merck’s and Eisai’s applications do not provide evidence that Keytruda in combination with Lenvima represents a meaningful advantage over available therapies for the treatment of unresectable or metastatic HCC with no prior systemic therapy for advanced disease. Since the applications for KEYNOTE-524/Study 116 no longer meet the criteria for accelerated approval, both companies plan to work with the FDA to take appropriate next steps, which include conducting a well-controlled clinical trial that demonstrates substantial evidence of effectiveness and the clinical benefit of the combination.

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Covid-19 roundup: Mod­er­na sticks to Ju­ly for its Phase III as ru­mors swirl; Fol­low­ing US lead, EU buys up Covid-19 treat­ments

The Phase III might be delayed from its original early July goal, but Moderna says it will still kick off the pivotal study for what could ultimately be the first Covid-19 vaccine before the end of the month.

A day after Reuters reported that squabbling between the Cambridge biotech and government regulators had held up the trial by about two weeks, Moderna released a statement saying that they had completed enrollment of their 650-person Phase II trial and were on track to begin Phase III by the end of the month. The protocol for that study, which is meant to prove whether or not the vaccine can prevent people from becoming sick, has been finalized, they said.

Donald and Melania Trump watch the smoke of fireworks from the South Lawn of the White House on July 4, 2020 (via Getty)

Which drug de­vel­op­ers of­fer Trump a quick, game-chang­ing ‘so­lu­tion’ as the pan­dem­ic roars back? Eli Lil­ly and Ab­Cellera look to break out of the pack

We are unleashing our nation’s scientific brilliance and will likely have a therapeutic and/or vaccine solution long before the end of the year.

— Donald Trump, July 4

Next week administration officials plan to promote a new study they say shows promising results on therapeutics, the officials said. They wouldn’t describe the study in any further detail because, they said, its disclosure would be “market-moving.”

— NBC News, July 3

Something’s cooking. And it’s not just July 4 leftovers involving stale buns and uneaten hot dogs.

Over the long weekend observers picked up signs that the focus in the Trump administration may swiftly shift from the bright spotlight on vaccines being promised this fall, around the time of the election, to include drugs that could possibly keep patients out of the hospital and take the political sting out of the soaring Covid-19 numbers causing embarrassment in states that swiftly reopened — as Trump cheered along.

So far, Gilead has been the chief beneficiary of the drive on drugs, swiftly offering enough early data to get remdesivir an emergency authorization and into the hands of the US government. But their drug, while helpful in cutting stays, is known for a limited, modest effect. And that won’t tamp down on the hurricane of criticism that’s been tearing at the White House, and buffeting the president’s most stalwart core defenders as the economy suffers.

We’ve had positive early-stage vaccine data, most recently from Pfizer and BioNTech, playing catchup on an mRNA race led by Moderna — where every little sign of potential trouble is magnified into a lethal threat, just as every advance excites a frenzy of support. But that race still has months to play out, with more Phase I data due ahead of the mid-stage numbers looming ahead. A vaccine may not be available in large enough quantities until well into 2021, which is still wildly ambitious.

So what about a drug solution?

Trump’s initial support for a panacea focused on hydroxychloroquine. But that fizzled in the face of data underscoring its ineffectiveness — killing trials that aren’t likely to be restarted because of a recent population-based study offering some support. And there are a number of existing drugs being repurposed to see how they help hospitalized patients.

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