Es­ca­lat­ing R&D woes spur fresh M&A chat­ter for cash-rich Gilead

Gilead CSO Nor­bert Bischof­berg­er

Four years af­ter Gilead ac­quired mo­melo­tinib in its $510 mil­lion buy­out of YM Bio­Sciences, the big — and what ap­pears to be in­creas­ing­ly un­lucky — biotech was forced to re­port that the drug per­formed poor­ly in its two Phase III myelofi­bro­sis tri­als. And the fourth straight pipeline flop quick­ly spurred fresh spec­u­la­tion that Gilead will soon have to tap in­to its big cash re­serves for a ma­jor ac­qui­si­tion.

The JAK in­hibitor scored on a non-in­fe­ri­or­i­ty show­down with Jakafi (In­cyte’s rux­oli­tinib) in spleen re­duc­tion, but blew the key sec­ondary end­point of non-in­fe­ri­or­i­ty for the to­tal symp­tom score that was used to mea­sure the drugs. And it failed a sep­a­rate Phase III su­pe­ri­or­i­ty com­par­i­son against best avail­able treat­ment at week 24.

It all adds up to a fresh pipeline mess at Gilead, which saw its shares $GILD de­cline 1.25% Thurs­day morn­ing, shav­ing off more than a bil­lion dol­lars of its $100 bil­lion mar­ket cap. In­cyte {IN­CY}, mean­while, saw its shares shoot up 7% on the news, as spec­u­la­tion mount­ed that Gilead may now be pressed hard to make a bid for the com­pa­ny.

By the num­bers: mo­melo­tinib: 6.7%; BAT: 5.8%; 95 per­cent CI: -8.9% to +10.2%; p=0.90. And be­cause it didn’t suc­ceed on su­pe­ri­or­i­ty on the pri­ma­ry score, in­ves­ti­ga­tors didn’t run the num­bers on sec­ondary end­points.

That’s not what the com­pa­ny want­ed or need­ed to see. But af­ter high­light­ing some pos­i­tive trends from the two late-stage stud­ies, Gilead plans to see if reg­u­la­tors are feel­ing gen­er­ous about its prospects.

“The re­sults from both the SIM­PLI­FY-1 and SIM­PLI­FY-2 stud­ies in­di­cate that mo­melo­tinib pro­vides some treat­ment ben­e­fit, in­clud­ing ben­e­fit on ane­mia-re­lat­ed end­points,” said Nor­bert Bischof­berg­er, PhD, Ex­ec­u­tive Vice Pres­i­dent of Re­search and De­vel­op­ment and Chief Sci­en­tif­ic Of­fi­cer. “We plan to dis­cuss these re­sults with reg­u­la­to­ry au­thor­i­ties to de­ter­mine the next steps.”

The set­back on mo­melo­tinib comes near the end of what has turned in­to a grim year for Gilead. A re­cent run­down of its work on the NASH drug GS-4997 sparked con­sid­er­able skep­ti­cism from an­a­lysts, who want to see much more com­pelling num­bers be­fore they buy in.

Gilead re­cent­ly wrote off sim­tuzum­ab, along with the late-stage drug GS-5745 for ul­cer­a­tive col­i­tis and Crohn’s. And it’s top car­dio prospect — ele­clazine (GS-6615) — failed a late-stage study as well, sig­nif­i­cant­ly re­duc­ing its chances of be­com­ing the big new drug that Gilead needs as hep C wanes.

As the R&D hole keeps get­ting deep­er, some won­der if Gilead will be forced back to the deal ta­ble to buy some­thing big. Its hep C fran­chise may be wan­ing, but it cre­at­ed a huge wind­fall in cash re­serves. And Leerink’s Ge­of­frey Porges be­lieves that this lat­est black cloud comes with a sil­ver lin­ing, adding In­cyte to the list of big takeover tar­gets. On Thurs­day morn­ing he not­ed:

GILD in­di­cat­ed that they plan to dis­cuss these re­sults with reg­u­la­to­ry au­thor­i­ties to de­ter­mine the next steps, but it seems like­ly that mo­melo­tinib, which has been in de­vel­op­ment since 2009, will be writ­ten off, end­ing the po­ten­tial of yet an­oth­er small “bolt on” ac­qui­si­tion. One con­se­quence of this dis­ap­point­ment, how­ev­er, is that it does re­store IN­CY to the list of fea­si­ble can­di­dates for ac­qui­si­tion by Gilead, since they would no longer face the oblig­a­tion to di­vest one of the over­lap­ping JAK pro­grams.

The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

In­vestor day prep at Mer­ck in­cludes a new strat­e­gy to pick up the pace on M&A — re­port

Mer­ck’s re­cent deals to buy up two bolt-on biotechs — Ti­los and Pelo­ton — weren’t an aber­ra­tion. In­stead, both ac­qui­si­tions mark a new strat­e­gy to beef up its dom­i­nant can­cer drug op­er­a­tions cen­tered on Keytru­da while look­ing to ad­dress grow­ing con­cerns that too many of its eggs are in the one I/O bas­ket for their PD-1 pro­gram. And Mer­ck is go­ing af­ter more small- and mid-sized buy­outs to calm those fears.

John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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Right back at you, Pfiz­er: BeiGene and a Pfiz­er spin­out launch a new­co to de­vel­op a MEK/BRAF in­hibitor that could ri­val $11.4B com­bo

A day af­ter Pfiz­er bought Ar­ray and its ap­proved can­cer com­bo, BeiGene and Pfiz­er spin­out Spring­Works have part­nered in launch­ing a new biotech that has an eye on the very same mar­ket the phar­ma gi­ant just paid bil­lions for. And they’re plan­ning on us­ing an ex-Pfiz­er drug to do it.

In a nut­shell, Chi­na’s BeiGene is toss­ing in a pre­clin­i­cal BRAF in­hibitor — BGB-3245, which cov­ers both V600 and non-V600 BRAF mu­ta­tions — for a big stake in a new, joint­ly con­trolled biotech called Map­Kure with Bain-backed Spring­Works.

Sanofi aligns it­self with Google to stream­line drug de­vel­op­ment

Tech­nol­o­gy is bleed­ing in­to health­care, and big phar­ma is rid­ing the wave. Sanofi $SNY ap­point­ed its first chief dig­i­tal of­fi­cer this Feb­ru­ary, fol­low­ing the foot­steps of its peers. By May, the French drug­mak­er and some of its big phar­ma com­pa­tri­ots joined forces with Google par­ent Al­pha­bet’s Ver­i­ly unit to aug­ment clin­i­cal tri­al re­search. On Tues­day, the Parisian com­pa­ny tied up with Google to ac­cess its cloud com­put­ing and ar­ti­fi­cial in­tel­li­gence tech to spur the de­vel­op­ment of new ther­a­pies.

UP­DAT­ED: Roche fields first ap­proval for Ro­z­lytrek in the run-up to a show­down with Bay­er, Pfiz­er

While it’s wait­ing to hear back from FDA reg­u­la­tors, Roche is be­gin­ning the vic­to­ry lap for en­trec­tinib in Japan.

Roche is giv­ing Bay­er a run for their mon­ey with this tu­mor-ag­nos­tic drug, which tar­gets NTRK gene fu­sions. Now dubbed Ro­z­lytrek, it’s sanc­tioned to treat adult and pe­di­atric pa­tients in Japan with neu­rotroph­ic ty­ro­sine re­cep­tor ki­nase fu­sion-pos­i­tive, ad­vanced re­cur­rent sol­id tu­mors.

Arc­turus ex­pands col­lab­o­ra­tion, adding $30M cash; Ku­ra shoots for $100M raise

→  Rare dis­ease play­er Ul­tragenyx $RARE is ex­pand­ing its al­liance with Arc­turus $ARCT, pay­ing $24 mil­lion for eq­ui­ty and an­oth­er $6 mil­lion in an up­front as the two part­ners ex­pand their col­lab­o­ra­tion to in­clude up to 12 tar­gets. “This ex­pand­ed col­lab­o­ra­tion fur­ther so­lid­i­fies our mR­NA plat­form by adding ad­di­tion­al tar­gets and ex­pand­ing our abil­i­ty to po­ten­tial­ly treat more dis­eases,” said Emil Kakkis, the CEO at Ul­tragenyx. “We are pleased with the progress of our on­go­ing col­lab­o­ra­tion. Our most ad­vanced mR­NA pro­gram, UX053 for the treat­ment of Glyco­gen Stor­age Dis­ease Type III, is ex­pect­ed to move in­to the clin­ic next year, and we look for­ward to fur­ther build­ing up­on the ini­tial suc­cess of this part­ner­ship.”