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.

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.

Rohan Palekar, 89bio CEO

89bio’s PhII da­ta add to quick suc­ces­sion of NASH read­outs as field seeks turn­around

89bio said its drug was better than placebo at lessening fibrosis without worsening nonalcoholic steatohepatitis, or NASH, in two of three dose groups.

The San Francisco biotech said it thinks the Phase IIb data pave the way for a potential Phase III, following in the footsteps of another biotech in its drug class, Akero Therapeutics. To fund a late-stage study, CEO Rohan Palekar told Endpoints News 89bio “would need to raise additional capital,” with the company having about $188 million at the end of last year.

Roche and Lil­ly team up to de­vel­op blood test to de­tect ear­ly signs of Alzheimer's

Eli Lilly is teaming up with Roche to help develop a blood test to detect early signs of Alzheimer’s disease and determine whether a patient should go for further confirmatory testing.

Roche’s Elecsys Amyloid Plasma Panel (EAPP) measures pTau 181 protein assay and APOE E4 assay in human blood plasma – elevations in pTau 181 are present in the early stages of Alzheimer’s, while the presence of APO E4 is the most common genetic risk factor for the disease.

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FDA in­di­cates will­ing­ness to ap­prove Bio­gen ALS drug de­spite failed PhI­II study

Ahead of Wednesday’s advisory committee hearing to discuss Biogen’s ALS drug tofersen, the FDA appeared open to approving the drug, newly released briefing documents show.

Citing the need for flexibility in a devastating disease like ALS, regulators signaled a willingness to consider greenlighting tofersen based on its effect on a certain protein associated with ALS despite a failed pivotal trial. The documents come after regulatory flexibility was part of the same rationale the agency expressed when approving an ALS drug last September from Amylyx Pharmaceuticals, indicating the FDA’s openness to approving new treatments for the disease.

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Flare Therapeutics biochemists Yong Li (L) and Valerie Vivat

A $123M Flare will get Third Rock on­col­o­gy biotech in­to the clin­ic this year

Flare Therapeutics will start its first human trial this year with an investigational urothelial cancer drug after pulling together a $123 million Series B from Big Pharmas, VCs and its incubator, Third Rock Ventures.

Launched in 2021 on the idea that a biotech could finally succeed at drugging the much-sought-after but stubborn transcription factor, Flare Therapeutics said Wednesday it is now primed for the clinic after closing its large financing haul earlier this year. The raise is a relatively stark figure in a tough startup financing environment but further buoys the upbeat signals coming out of other Third Rock biotechs in recent weeks, including the $200 million CARGO Therapeutics and $100 million Rapport Therapeutics rounds.

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Francesco Marincola, newly-appointed Sonata Therapeutics CSO

Kite's head of re­search leaves for Flag­ship start­up Sonata

Another leader is departing Kite Pharma, and will to spend the “last part” of his career exploring how cancer evades the immune system.

Kite’s senior VP and global head of cell therapy research Francesco Marincola left the Gilead CAR-T unit last week for Sonata Therapeutics. Flagship last May unveiled the startup, which was pieced together from two fledgling biotechs Inzen and Cygnal Therapeutics. As CSO, Marincola will lead Sonata’s push to reprogram cancer cells to make them more immunogenic.

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Vipin Garg, Altimmune CEO

Al­tim­mune’s shares halved af­ter in­ter­im look at PhII weight loss drug da­ta

Altimmune’s attempt to catch up to Novo Nordisk and Eli Lilly’s GLP-1 drugs hit an investor snag Tuesday after the biotech shared interim Phase II weight loss data.

The Maryland biotech’s pemvidutide is a GLP-1/glucagon dual receptor agonist meant to activate GLP-1 receptors to squash appetite and glucagon to ramp up energy use. The 2.4 mg dose showed a placebo-adjusted weight loss of 9.7% at week 24 of 48, which Jefferies analysts said would be comparable to Novo Nordisk’s semaglutide (Wegovy) and Eli Lilly’s tirzepatide (Mounjaro).

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Josep Bassaganya-Riera, NImmune Biopharma

Ex­clu­sive: Af­ter get­ting his drug back, Lan­dos founder as­sem­bles new start­up for the big PhI­II test

By the time Josep Bassaganya-Riera stepped down as founding CEO of Landos Biopharma in 2021, the company had racked up Phase II data for its top autoimmune program, completed what he called a positive end-of-Phase-II meeting with the FDA and plans to launch pivotal Phase III trials.

Since then, though, the new leaders at Landos have reshuffled their plans for the drug, omilancor, first announcing they will run a Phase IIb ahead of a Phase III and eventually shelving it altogether.

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Andy Plump, Takeda R&D chief (Jeff Rumans for Endpoints News)

What kind of PhI­Ib da­ta is worth $4B cash? Take­da’s Andy Plump has some thoughts on that

A few months back, when Takeda caused jaws to drop with its eye-watering $4 billion cash upfront for a mid-stage TYK2 drug from Nimbus, it had already taken a deep dive on the solid Phase IIb data Nimbus had assembled from its dose-ranging study in psoriasis.

Now, it’s rolling that data out, eager to demonstrate what inspired the global biopharma to go long in a neighboring, but new, disease arena for the pipeline. And the most avid students of the numbers will likely be at Bristol Myers Squibb, who will have a multi-year head start on pioneering the TYK2 space with Sotyktu (deucravacitinib) as Takeda makes its lunge for best-in-class status.

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