Good­bye, San Fran­cis­co. Stan­ford spin­out heads to Hous­ton af­ter bag­ging a $20M CPRIT grant

Ray Tabib­i­azar

Two years ago an as­so­ciate pro­fes­sor of bio­engi­neer­ing at Stan­ford named Jen­nifer Cochran and co-au­thor Am­a­to Gi­ac­cia came up with a new ap­proach for throw­ing a mon­key wrench in­to the me­chan­ics of metas­ta­sis. Pick­ing up on the role that a pair of Gas6 pro­teins play when they link to two Axl pro­teins — a sub­fam­i­ly of re­cep­tor ty­ro­sine ki­nas­es found on the sur­face of can­cer cells, al­low­ing them to roam from a tu­mor — they de­vel­oped a de­coy pro­tein that harm­less­ly binds to Gas6 and scram­bles the un­teth­er­ing process, ef­fec­tive­ly tak­ing it out of the bi­o­log­ic loop.

The ap­proach worked to blunt metas­ta­sis in mice, and a low-pro­file start­up named Ru­ga Cor­po­ra­tion land­ed the rights — one of a wave of biotech star­tups in the Bay Area.

And this one came with a very promi­nent en­dorse­ment.

“It is a beau­ti­ful piece of bio­chem­istry and has some nu­ances that make it par­tic­u­lar­ly ex­cit­ing,” not­ed Glenn Dra­noff. At the time Dra­noff was a Dana-Far­ber in­ves­ti­ga­tor. Dra­noff joined NI­BR last year to run their im­muno-on­col­o­gy work.

To­day, Ru­ga Corp. is of­fi­cial­ly chang­ing its name to Ar­a­vive, and it’s mak­ing an un­usu­al switch in lo­cales, chang­ing its Bay Area ad­dress in the heart of a top biotech hub for Hous­ton, with a $20 mil­lion in­jec­tion from the Lone Star state’s Can­cer Pre­ven­tion & Re­search In­sti­tute of Texas, bet­ter known as CPRIT.

Gi­ac­cia is now the CSO and co-founder at Ar­a­vive. Ray Tabib­i­azar, a for­mer VC part­ner at Bay City Cap­i­tal, is the CEO. To­geth­er, they’re fo­cused on get­ting their drug in­to the clin­ic for acute myeloid leukemia.

“It’s un­usu­al in that this is the largest amount giv­en (by CPRIT) to one com­pa­ny,” Tabib­i­azar tells me

In the com­ing months the CEO says we should look out for new pub­li­ca­tions spelling out a sec­ond-gen ap­proach to what the Stan­ford team put out in 2014. That’s what is point­ed to the clin­ic in 2017, he adds. And Tabib­i­azar is putting to­geth­er a new fi­nanc­ing round to ful­ly fund the ear­ly stages of de­vel­op­ment work.

As of now, the com­pa­ny has a staff of about 15, adds the CEO, which will grow to a max­i­mum of about 20 for this stage of the game. As for the move to Texas, Tabib­i­azar adds, it makes a lot of sense to get clos­er to in­ves­ti­ga­tors at Bay­lor and MD An­der­son, where they’ve al­ready been do­ing work on this tar­get.

CPRIT has been rais­ing the ante on its biotech bet this month af­ter a four-year bout of on-again, off-again con­tro­ver­sies.

Hous­ton-based Bel­licum Phar­ma­ceu­ti­cals just won a rec­om­men­da­tion for a $16.9 mil­lion CPRIT grant to sup­port its clin­i­cal work for BPX-501 in pe­di­atric AML. And that was part of $93 mil­lion in grants is­sued No­vem­ber 16.

The state set up the $3 bil­lion CPRIT bond ini­tia­tive to sup­port can­cer re­search back in 2007, and it’s been in and out of the head­lines over ac­cu­sa­tions of fa­voritism and bias re­lat­ed to some of the biotechs it’s backed as well as its ties to three promi­nent in­sti­tu­tions: MD An­der­son in Hous­ton, UT South­west­ern in Dal­las, and Bay­lor — which have col­lec­tive­ly snared close to half of the cash hand­ed out so far.

While the state project has played a promi­nent role in aca­d­e­m­ic re­search, the de­vel­op­ment of a biotech hub has ad­vanced in fits and starts, with MD An­der­son step­ping up and help­ing with a se­ries of spin­outs and col­lab­o­ra­tions over the past year.

J&J In­no­va­tions al­so pro­vid­ed a big as­sist of its own, adding a JLabs in­cu­ba­tor in Hous­ton to help fos­ter biotech star­tups. Ar­a­vive can help Texas make the case that it’s al­so bring­ing in new com­pa­nies.

Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors. 

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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