Fresh from a $72M raise, Jeff Aron­in's new lead rare dis­ease drug is flagged as a fail­ure

Just a few days af­ter one of Jeff Aronin’s biotechs put out the word that they had raised $71.8 mil­lion to push their rare dis­ease drug in­to piv­otal tri­als, the com­pa­ny qui­et­ly flagged the treat­ment’s fail­ure in Phase II.

But they are go­ing for Phase III any­way.

Jeff Aronin

The clin­i­cal­tri­ page on the Phase II study of Cas­tle Creek’s on­ly drug was up­dat­ed on Oc­to­ber 22 and now reads that the tri­al was ter­mi­nat­ed af­ter an in­de­pen­dent da­ta mon­i­tor­ing com­mit­tee “sug­gest­ed that the study will not meet sta­tis­ti­cal ob­jec­tives.” The page al­so in­cludes a time­line with a wrap due in the mid­dle of Oc­to­ber.

Cas­tle Creek’s co-founder, Michael Der­by, re­spond­ed to an email query of mine to say that the tri­al “showed sev­er­al pos­i­tive trends in key ef­fi­ca­cy mea­sures and a be­nign safe­ty pro­file that strong­ly sup­port con­tin­ued phase 3 de­vel­op­ment of this po­ten­tial treat­ment, which is our plan.”

He added:

The de­ci­sion to ter­mi­nate the phase 2 study was made fol­low­ing a planned in­ter­im analy­sis by an In­de­pen­dent Da­ta Mon­i­tor­ing Com­mit­tee that in­di­cat­ed that the tri­al, as struc­tured and pow­ered, was un­like­ly to de­liv­er the lev­el of sta­tis­ti­cal ro­bust­ness need­ed to con­firm ef­fi­ca­cy as de­fined by the pri­ma­ry end­point. In light of this da­ta, we plan to use our most re­cent in­vest­ment to pur­sue the late-stage de­vel­op­ment of this in­ves­ti­ga­tion­al drug. Giv­en the un­met med­ical need for pa­tients with EBS, we are al­so al­low­ing pa­tients from the ter­mi­nat­ed phase 2 tri­al to con­tin­ue ther­a­py in an on­go­ing open-la­bel ex­ten­sion tri­al.

To be clear, all of the in­vestors in Cas­tle Creek, in­clud­ing the in­vestors in our most re­cent fi­nanc­ing, were briefed on the in­ter­im re­sults and the de­ci­sion to ter­mi­nate the tri­al. They ful­ly sup­port our plan to con­tin­ue de­vel­op­ment and to de­sign an ad­e­quate­ly pow­ered phase 3 ef­fi­ca­cy and safe­ty tri­al.

Aronin — best known for kick­ing up a ruckus af­ter cob­bling to­geth­er da­ta on an old, cheap steroid sold over­seas for around $1,000 a year and steer­ing it through an FDA ap­proval for Duchenne mus­cu­lar dy­s­tro­phy with plans to sell it for $89,000 a year — runs Paragon Bio­sciences, which in turn owns 6 sub­sidiaries in­clud­ing Cas­tle Creek.

Michael Der­by

In Cas­tle Creek’s case, they took an old drug that is mar­ket­ed in a va­ri­ety of coun­tries around the world for os­teoarthri­tis — 50 mg di­ac­ere­in — and re­for­mu­lat­ed the IL-1 be­ta an­ti-in­flam­ma­to­ry drug in­to a top­i­cal treat­ment for an ul­tra-rare frag­ile skin dis­ease called epi­der­mol­y­sis bul­losa. 

Fi­deli­ty Man­age­ment & Re­search Com­pa­ny and Val­or Eq­ui­ty Part­ners put up the mon­ey to fund late-stage de­vel­op­ment.

Back in 2014 the EMA added re­stric­tions on the use of drugs con­tain­ing di­ac­ere­in, cit­ing ad­verse events that in­cludes prob­lems with the liv­er. The FDA, in turn, pro­vid­ed the com­pa­ny with a rare pe­di­atric dis­ease des­ig­na­tion for di­ac­ere­in 1% oint­ment, just as they did when Aronin was de­vel­op­ing his steroid Em­flaza. Those des­ig­na­tions are worth quite a bit, as an ap­proval would war­rant an award of a pri­or­i­ty re­view vouch­er worth more than $100 mil­lion.

And there are some dis­tinct sim­i­lar­i­ties be­tween his lat­est rare dis­ease pro­gram and his score on DMD, which a num­ber of harsh crit­ics in Con­gress con­clud­ed was re­ward­ed for a suc­cess­ful plan to game the drug ap­proval sys­tem.

Aronin has many of his old crew at Marathon — dis­band­ed in the wake of the con­tro­ver­sy over de­flaza­cort — work­ing at Paragon. The biotech proved to be an in­spi­ra­tion for Mar­tin Shkre­li, the phar­ma bro who was cas­ti­gat­ed when he en­gi­neered a 5,000%-plus overnight price hike at Tur­ing for an old drug of his own.

“These guys in­vent­ed price in­creas­es,” Shkre­li com­ment­ed once, be­fore he was sen­tenced to 7 years in a fed­er­al prison for de­fraud­ing in­vestors at his hedge funds. “I lit­er­al­ly learned it from them.”

Fangliang Zhang, AP Images

UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

David Meline (file photo)

Mod­er­na’s new CFO took a cut in salary to jump to the mR­NA rev­o­lu­tion­ary. But then there’s the rest of the com­pen­sa­tion pack­age

David Meline took a little off the top of his salary when he jumped from the CFO post at giant Amgen to become the numbers czar at the upstart vaccines revolutionary Moderna. But the SEC filing that goes with a major hire also illustrates how it puts him in line for a fortune — provided the biotech player makes good as a promising game changer.

To be sure, there’s nothing wrong with the base salary: $600,000. Or the up-to 50% annual cash bonus — an industry standard — that comes with it. True, the 62-year-old earned $999,000 at Amgen in 2019, but it’s the stock options that really count in the current market bliss for all things biopharma. And there Meline did well.

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Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Pfiz­er’s Doug Gior­dano has $500M — and some ad­vice — to of­fer a cer­tain breed of 'break­through' biotech

So let’s say you’re running a cutting-edge, clinical-stage biotech, probably public, but not necessarily so, which could see some big advantages teaming up with some marquee researchers, picking up say $50 million to $75 million dollars in a non-threatening minority equity investment that could take you to the next level.

Doug Giordano might have some thoughts on how that could work out.

The SVP of business development at the pharma giant has helped forge a new fund called the Pfizer Breakthrough Growth Initiative. And he has $500 million of Pfizer’s money to put behind 7 to 10 — or so — biotech stocks that fit that general description.

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Leen Kawas, Athira CEO (Athira)

Can a small biotech suc­cess­ful­ly tack­le an Ever­est climb like Alzheimer’s? Athi­ra has $85M and some in­flu­en­tial back­ers ready to give it a shot

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.

GSK presents case to ex­pand use of its lu­pus drug in pa­tients with kid­ney dis­ease, but the field is evolv­ing. How long will the mo­nop­oly last?

In 2011, GlaxoSmithKline’s Benlysta became the first biologic to win approval for lupus patients. Nine years on, the British drugmaker has unveiled detailed positive results from a study testing the drug in lupus patients with associated kidney disease — a post-marketing requirement from the initial FDA approval.

Lupus is a drug developer’s nightmare. In the last six decades, there has been just one FDA approval (Benlysta), with the field resembling a graveyard in recent years with a string of failures including UCB and Biogen’s late-stage flop, as well as defeats in Xencor and Sanofi’s programs. One of the main reasons the success has eluded researchers is because lupus, akin to cancer, is not just one disease — it really is a disease of many diseases, noted Al Roy, executive director of Lupus Clinical Investigators Network, an initiative of New York-based Lupus Research Alliance that claims it is the world’s leading private funder of lupus research, in an interview.