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.

IDC: Life Sci­ences Firms Must Em­brace Dig­i­tal Trans­for­ma­tion Now

Pre-pandemic, the life sciences industry had settled into a pattern. The average drug took 12 years and $2.9 billion to bring to market, and it was an acceptable mode of operations, according to Nimita Limaye, Research Vice President for Life Sciences R&D Strategy and Technology at IDC.

COVID-19 changed that, and served as a proof-of-concept for how technology can truly help life sciences companies succeed and grow, Limaye said. She recently spoke about industry trends at Egnyte’s Life Sciences Summit 2022. You should watch the entire session, free and on-demand, but here’s a brief recap of why she’s urging life sciences companies to embrace digital transformation.

FDA ap­proves one of the prici­est new treat­ments of all time — blue­bird's gene ther­a­py for be­ta tha­lassemia

The FDA on Wednesday approved the first gene therapy for a chronic condition — bluebird bio’s new Zynteglo (beti-cel) as a potentially curative treatment for those with transfusion-dependent thalassemia.

The thumbs-up from the FDA follows a unanimous adcomm vote in June, with outside experts pointing to extraordinary efficacy, with 89% of subjects with TDT who received beti-cel having achieved transfusion independence.

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Kate Haviland, Blueprint Medicines CEO

Blue­print met all its end­points in bid for ex­pand­ed Ay­vak­it la­bel — but stock trends low­er any­way

Blueprint Medicines announced this morning that the second part of its study on Ayvakit in non-advanced systemic mastocytosis (SM) — a rare disease in which a type of white blood cells known as mast cells builds up — met all endpoints, but the biopharma left key questions unanswered.

In 212 patients, with 141 in the treatment arm and 71 in the control arm, patients who got Ayvakit saw an average 15.6-point decrease in their symptom scores compared to a 9.2-point decrease in the placebo arm at 24 weeks. In an extension study, those on Ayvakit saw their symptom scores drop by 20.2 points by week 48.

James Sabry, Roche global head of pharma partnering

Roche, Genen­tech plunk down $60M up­front to part­ner with Chi­nese phar­ma on PRO­TAC-based prostate can­cer drug

Roche and Genentech are always on the hunt for deals, and on Thursday they found their newest partner.

The pair will team up with the Chinese pharma company Jemincare to push forward a new program for prostate cancer, the companies announced. Roche is ponying up $60 million upfront to get its hands on the candidate and promising up to $590 million in biobucks, plus royalties, down the line.

In return, Genentech will get a worldwide license to develop the program, known as JMKX002992, and bring it to market.

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Andrew Hopkins, Exscientia CEO

Ex­sci­en­tia ter­mi­nates Bay­er pact half a year ear­ly, col­lect­ing small por­tion of €240M promised

Bayer and Exscientia are winding down their three-year collaboration, leaving the big German pharma to take the AI-designed compounds born out of the pact further.

London-based Exscientia revealed in its Q2 update that the partners have “mutually agreed to end” their collaboration, which kicked off in early 2020, after recently achieving a drug discovery milestone. In an SEC filing, Exscientia said it terminated the pact on May 30, about six months early.

Paul Hudson, Sanofi CEO (Eric Piermont/AFP via Getty Images)

Up­dat­ed: Hit by an­oth­er PhI­II flop, Sanofi culls breast can­cer drug — sound­ing alarm for the class

Sanofi is officially giving up on its oral SERD.

The French drugmaker put out word Wednesday morning that it will discontinue the global development program of amcenestrant, the selective estrogen receptor degrader once billed as a top late-stage prospect. Having already failed a Phase II monotherapy test earlier this year, a combo with the drug also missed the bar in a second trial for breast cancer, triggering the decision to drop the whole program.

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Bayer's first DTC ad campaign for chronic kidney disease drug Kerendia spells out its benefits

Bay­er aims to sim­pli­fy the com­plex­i­ties of CKD with an ABC-themed ad cam­paign

Do you know the ABCs of CKD in T2D? Bayer’s first ad campaign for Kerendia tackles the complexity of chronic kidney disease with a play on the acronym (CKD) and its connection to type 2 diabetes (T2D).

Kerendia was approved last year as the first and only non-steroidal mineralocorticoid receptor antagonist to treat CKD in people with type 2 diabetes.

In the TV commercial launched this week, A is for awareness, B is for belief and C is for cardiovascular, explained in the ad as awareness of the connection between type 2 and kidney disease, belief that something can be done about it, and cardiovascular events that may be reduced with treatment.

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James Mock, incoming CFO at Moderna

Mod­er­na taps new CFO from PerkinElmer af­ter for­mer one-day CFO oust­ed

When Moderna hired a new CFO last year,  it didn’t expect to see him gone after only one day. Today the biotech named his — likely much more vetted — replacement.

The mRNA company put out word early Wednesday that after the untimely departure of then brand-new CFO Jorge Gomez, it has now found a replacement in James Mock, the soon-to-be former CFO at diagnostics and analytics company PerkinElmer.

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Etleva Kadilli, director of UNICEF’s supply division

GSK lands first-ever UNICEF con­tract for malar­ia vac­cine worth $170M

GSK has landed a new first from UNICEF the first-ever contract for malaria vaccines, worth up to $170 million for 18 million vaccine doses distributed over the next three years.

The vaccine, known as Mosquirix or RTS,S, won WHO’s backing last October after a controversial start, but UNICEF said these doses will potentially save thousands of lives every year.

“We hope this is just the beginning,” Etleva Kadilli, director of UNICEF’s supply division, said. “Continued innovation is needed to develop new and next-generation vaccines to increase available supply, and enable a healthier vaccine market. This is a giant step forward in our collective efforts to save children’s lives and reduce the burden of malaria as part of wider malaria prevention and control programmes.”