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.

De­vel­op­ment of the Next Gen­er­a­tion NKG2D CAR T-cell Man­u­fac­tur­ing Process

Celyad’s view on developing and delivering a CAR T-cell therapy with multi-tumor specificity combined with cell manufacturing success
Transitioning potential therapeutic assets from academia into the commercial environment is an exercise that is largely underappreciated by stakeholders, except for drug developers themselves. The promise of preclinical or early clinical results drives enthusiasm, but the pragmatic delivery of a therapy outside of small, local testing is most often a major challenge for drug developers especially, including among other things, the manufacturing challenges that surround the production of just-in-time and personalized autologous cell therapy products.

Paul Hudson, Getty Images

UP­DAT­ED: Sanofi CEO Hud­son lays out new R&D fo­cus — chop­ping di­a­betes, car­dio and slash­ing $2B-plus costs in sur­gi­cal dis­sec­tion

Earlier on Monday, new Sanofi CEO Paul Hudson baited the hook on his upcoming strategy presentation Tuesday with a tell-tale deal to buy Synthorx for $2.5 billion. That fits squarely with hints that he’s pointing the company to a bigger future in oncology, which also squares with a major industry tilt.

In a big reveal later in the day, though, Hudson offered a slate of stunners on his plans to surgically dissect and reassemble the portfoloio, saying that the company is dropping cardio and diabetes research — which covers two of its biggest franchise arenas. Sanofi missed the boat on developing new diabetes drugs, and now it’s pulling out entirely. As part of the pullback, it’s dropping efpeglenatide, their once-weekly GLP-1 injection for diabetes.

“To be out of cardiovascular and diabetes is not easy for a company like ours with an incredibly proud history,” Hudson said on a call with reporters, according to the Wall Street Journal. “As tough a choice as that is, we’re making that choice.”

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Roger Perlmutter, Merck

#ASH19: Here’s why Mer­ck is pay­ing $2.7B to­day to grab Ar­Qule and its next-gen BTK drug, lin­ing up Eli Lil­ly ri­val­ry

Just a few months after making a splash at the European Hematology Association scientific confab with an early snapshot of positive data for their BTK inhibitor ARQ 531, ArQule has won a $2.7 billion buyout deal from Merck.

Merck is scooping up a next-gen BTK drug — which is making a splash at ASH today — from ArQule in an M&A pact set at $20 a share $ARQL. That’s more than twice Friday’s $9.66 close. And Merck R&D chief Roger Perlmutter heralded a deal that nets “multiple clinical-stage oral kinase inhibitors.”

This is the second biotech buyout pact today, marking a brisk tempo of M&A deals in the lead-up to the big JP Morgan gathering in mid-January. It’s no surprise the acquisitions are both for cancer drugs, where Sanofi will try to make its mark while Merck beefs up a stellar oncology franchise. And bolt-ons are all the rage at the major pharma players, which you could also see in Novartis’ recent $9.7 billion MedCo buyout.

ArQule — which comes out on top after their original lead drug foundered in Phase III — highlighted early data on ‘531 at EHA from a group of 6 chronic lymphocytic leukemia patients who got the 65 mg dose. Four of them experienced a partial response — a big advance for a company that failed with earlier attempts.

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Paul Hudson, Sanofi

Paul Hud­son promis­es a bright new fu­ture at Sanofi, kick­ing loose me-too drugs and fo­cus­ing on land­mark ad­vances. But can he de­liv­er?

Paul Hudson was on a mission Tuesday morning as he stood up to address Sanofi’s new R&D and business strategy.

Still fresh into the job, the new CEO set out to convince his audience — including the legions of nervous staffers inevitably devoting much of their day to listening in — that the pharma giant is shedding the layers of bureaucracy that had held them back from making progress in the past, dropping the duds in the pipeline and reprioritizing a more narrow set of experimental drugs that were promised as first-in-class or best-in-class.  The company, he added, is now positioned to “go after other opportunities” that could offer a transformational approach to treating its core diseases.

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Am­gen puts its foot down in shiny new South San Fran­cis­co hub as it re­or­ga­nizes R&D ops

Amgen has signed up to be AbbVie’s neighbor in South San Francisco as it moves into a nine-story R&D facility in the booming biotech hub.

The arrangement gives Amgen 240,000 square feet of space on the Gateway of Pacific Campus, just a few minutes drive from its current digs at Oyster Point. The new hub will open in 2022 and house the big biotech’s Bay Area employees working on cardiometabolic, inflammation and oncology research.

Ab­b­Vie, Scripps ex­pand part­ner­ship, for­ti­fy fo­cus on can­cer drugs

Scripps and AbbVie go way back. Research conducted in the lab of Scripps scientist Richard Lerner led to the discovery of Humira. The antibody, approved by the FDA in 2002 and sold by AbbVie, went on to become the world’s bestselling treatment. In 2018, the drugmaker and the non-profit organization signed a pact focused on developing cancer treatments — and now, the scope of that partnership has broadened to encompass a range of diseases, including immunological and neurological conditions.

South Ko­rea jails 3 Sam­sung ex­ecs for de­stroy­ing ev­i­dence in Bi­o­Log­ics probe

Three Samsung executives in Korea are going to jail.

The convictions came in what prosecutors had billed as “biggest crime of evidence destruction in the history of South Korea”: a case of alleged corporate intrigue that was thrown open when investigators found what was hidden beneath the floor of a Samsung BioLogics plant. Eight employees in total were found guilty of evidence tampering and the three executives were each sentenced to up to two years in prison.

Nick Plugis, Avak Kahvejian, Cristina Rondinone, Milind Kamkolkar and Chad Nusbaum. (Cellarity)

Cel­lar­i­ty, Flag­ship's $50M bet on net­work bi­ol­o­gy, mar­ries ma­chine learn­ing and sin­gle-cell tech for drug dis­cov­ery

Cellarity started with a simple — but far from easy — idea that Avak Kahvejian and his team were floating around at Flagship Pioneering: to digitally encode a cell.

As he and his senior associate Nick Plugis dug deeper into the concept, they found that most of the models others have developed take a bottom-up approach, where they assemble the molecules inside cells and the connections between them from scratch. What if they opt for a top-down approach, aided by single-cell transcriptomics and machine learning, to gauge the behavior of the entire cellular network?

Sanofi’s big week in­cludes a promis­ing PhI­II for an or­phan dis­ease drug, with plans for a pitch to the FDA

The biopharma R&D food chain is paying off with a plan at Sanofi to pitch regulators on a new drug for an orphan disease called cold agglutinin disease.

The pharma giant ushered out a statement Tuesday morning — after it spelled out plans to radically restructure the company, abandoning cardio and diabetes research altogether — saying that their C1s inhibitor sutimlimab had cleared the pivotal study.