Gur­net Point-backed Boston Phar­ma­ceu­ti­cals su­per­charges pipeline with twin deals grab­bing top cast-offs from GSK, No­var­tis

The ex­ec­u­tive crew at Boston Phar­ma­ceu­ti­cals has been busy.

In one 48-hour stretch they com­plet­ed two big in-li­cens­ing deals with a pair of the world’s phar­ma gi­ants — No­var­tis and GSK — which will dou­ble the size of their clin­i­cal pipeline with 4 new ther­a­pies and a slate of late-pre­clin­i­cal ef­forts that should bring the to­tal num­ber of pro­grams in hu­man tri­als to a dozen by the end of next year.

In the process, they’ve been adding just slight­ly to the small team at the com­pa­ny, which was gift­ed with a $600 mil­lion bankroll by Gur­net Point Cap­i­tal, whose chief — ex-Sanofi CEO Chris Viehbach­er — stepped in as chair­man of the board.

Right now, the staff tal­ly is just un­der 30, says Rob Arm­strong, the Eli Lil­ly vet who runs the com­pa­ny. 

They’ve al­ready divvied up these new as­sets, which in­cludes some of the top pro­grams out of No­var­tis’ trans­la­tion­al med group NI­BR, which punt­ed its an­tibac­te­r­i­al and an­tivi­ral re­search pro­grams in Emeryville, CA. last Ju­ly. For GSK, the drugs in­clude a se­lec­tion from the 30 ther­a­pies that CEO Em­ma Walm­s­ley put on the auc­tion block as she cleaned house ahead of an R&D re­vamp.

There are no num­bers in this deal, though Arm­strong notes that No­var­tis end­ed up tak­ing some eq­ui­ty in a sub­sidiary built for the deal, along with an up­front and mile­stones and a roy­al­ty sched­ule. As for GSK, he’s just not say­ing — though typ­i­cal­ly Big Phar­ma doesn’t ask for a lot of cash for the drugs it casts off from time to time. In GSK’s case, they all but hand­ed off their gene ther­a­py work, look­ing on­ly for a con­tin­ued fi­nan­cial in­ter­est.

In this case Boston Phar­ma’s haul in­cludes:

  • GSK3352589, a small mol­e­cule RET in­hibitor ready for a Phase II tri­al in ir­ri­ta­ble bow­el syn­drome with di­ar­rhea.
  • GSK3008356, a DGAT 1 drug that is be­ing re­pur­posed from NASH to ac­ne.
  • GSK3183475, a BET BD2 “which as a top­i­cal for­mu­la­tion has ther­a­peu­tic po­ten­tial to treat vi­tili­go and/or pso­ri­a­sis and is Phase 1-ready. “

On the No­var­tis side they are gain­ing:

  • LYS228, which Boston Phar­ma­ceu­ti­cals be­lieves is a po­ten­tial best-in-class monobac­tam in Phase II clin­i­cal de­vel­op­ment that has “demon­strat­ed ac­tiv­i­ty against CRE with re­sis­tance caused by ser­ine be­ta-lac­ta­mases (SBLs) and/or met­al­lo be­ta-lac­ta­mases (MBLs).”
  • IID572, a nov­el be­ta-lac­ta­mase in­hibitor that may be used in com­bi­na­tion with LYS228 or oth­er be­ta-lac­tam an­tibi­otics to ex­pand their use against dif­fi­cult-to-treat in­fec­tions caused by a broad­er spec­trum of CRE.
  • MAK181, an oral, first-in-class LpxC in­hibitor for Pseudomonas in­fec­tions.

“This is part of a longterm strat­e­gy,” ven­tures a cau­tious Arm­strong, forged 3 years ago when they set out to build a pipeline with 20 drugs in it. “This is a very lean trans­la­tion­al med­i­cine plat­form.” 

Keep­ing the team small, while re­ly­ing on a sup­port­ing cast of out­side ex­perts to han­dle a lot of the load — was al­ways part of that game plan. With top ex­ecs com­ing out of com­pa­nies like Lil­ly and Sanofi, Boston Phar­ma­ceu­ti­cals likes the agili­ty of a small, ex­tra­or­di­nar­i­ly well fi­nanced com­pa­ny. And it doesn’t sound like they’re blow­ing any of the ex­cess on par­ties and danc­ing girls.

Al­so part of the game plan: They are cov­er­ing the wa­ter­front on dis­eases and drugs, se­lect­ing from a broad range to come up with the ther­a­pies they like. One um­brel­la team cov­ers every­thing — there’s on­ly one CMO at the com­pa­ny — and they’re steer­ing clear of busi­ness mod­els like Roivant, which is es­tab­lish­ing ful­ly staffed com­pa­nies un­der the guid­ance of the moth­er ship.

Long term, the group plans to start sell­ing off most of its as­sets ahead of Phase III, or in late-stage de­vel­op­ment if that makes sense.

Oth­ers can do the com­mer­cial work, once the biotech has plumbed the full val­ue of what’s there.

Im­age: Rob Arm­strong File Pho­to

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Top an­a­lyst of­fers a rare, up­beat in­ter­pre­ta­tion of Ab­b­Vie’s $63B Al­ler­gan deal — but there’s a catch

Af­ter get­ting beat up on all sides from mar­ket ob­servers who don’t much care for the lat­est mega-deal to ar­rive in bio­phar­ma, at least one promi­nent an­a­lyst now is start­ing to like what he sees in the num­bers for Ab­b­Vie/Al­ler­gan.

But it’s go­ing to take some en­cour­age­ment if Ab­b­Vie ex­ecs want it to last.

Ab­b­Vie’s mar­ket cap de­clined $20 bil­lion on Tues­day as the stock took at 17% hit dur­ing the day. And SVB Leerink’s Ge­of­frey Porges can see a dis­tinct out­line of an up­side af­ter re­view­ing the fun­da­men­tals of the deal.

Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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While Ako­rn works to re­vive its for­tunes, the FDA hits it with an­oth­er warn­ing let­ter

Ako­rn just can’t dig it­self out of its hole.

The spe­cial­ty gener­ic drug­mak­er has re­ceived yet an­oth­er warn­ing let­ter from the FDA this year. With­out dis­clos­ing any specifics, the Lake For­est, Illi­nois-based drug­mak­er on Wednes­day said the US reg­u­la­tor had is­sued the let­ter, cit­ing an in­spec­tion of its Som­er­set, New Jer­sey man­u­fac­tur­ing fa­cil­i­ty in Ju­ly and Au­gust of 2018. The com­pa­ny’s shares $AKRX dipped about 1.7% to $4.65 be­fore the bell.

Image: Chris Varma. Frontier

UP­DAT­ED: Chris Var­ma un­veils MP­M's lat­est start­up — eye­ing 'un­drug­gable' can­cer tar­gets and pow­ered by ma­chine learn­ing, $67M

Two years af­ter MPM Cap­i­tal en­list­ed Chris Var­ma on its busy on­col­o­gy team, the for­mer en­tre­pre­neur-in-res­i­dence is un­veil­ing his first ven­ture project out of his new stomp­ing grounds in the Bay Area: Fron­tier Med­i­cines.

For Var­ma, who’s al­so co-found­ed Blue­print Med­i­cines and built com­pa­nies at Third Rock and Flag­ship, this marks an­oth­er op­por­tu­ni­ty to ap­ply some cut­ting-edge sci­ence to “sev­er­al of the most im­por­tant and dif­fi­cult tar­gets in can­cer” — tar­gets that oth­ers have tried to tack­le with more clas­si­cal meth­ods and failed. The launch round comes in at $67 mil­lion, which should go some way in scaf­fold­ing a pre­clin­i­cal pipeline and push one or more as­sets in­to the clin­ic three years from now, he tells me.

Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

UP­DAT­ED: In sur­prise switch, Bris­tol-My­ers is sell­ing off block­buster Ote­zla, promis­ing to com­plete Cel­gene ac­qui­si­tion — just lat­er

Apart from revealing its checkpoint inhibitor Opdivo blew a big liver cancer study on Monday, Bristol-Myers Squibb said its plans to swallow Celgene will require the sale of blockbuster psoriasis treatment Otezla to keep the Federal Trade Commission (FTC) at bay.

The announcement — which has potentially delayed the completion of the takeover to early 2020 — irked investors, triggering the New York-based drugmaker’s shares to tumble Monday morning in premarket trading.

Celgene’s Otezla, approved in 2014 for psoriasis and psoriatic arthritis, is a rising star. It generated global sales of $1.6 billion last year, up from the nearly $1.3 billion in 2017. Apart from the partial overlap of Bristol-Myers injectable Orencia, the company’s rival oral TYK2 psoriasis drug is in late-stage development, after the firm posted encouraging mid-stage data on the drug, BMS-986165, last fall. With Monday’s decision, it appears Bristol-Myers is favoring its experimental drug, and discounting Otezla’s future.

The move blindsided some analysts. Credit Suisse’s Vamil Divan noted just days ago:

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The top 15 mega-deals in bio­phar­ma: Ab­b­Vie and Bris­tol-My­ers ac­qui­si­tions stir fresh de­bate over what's too big to buy

The debate over what’s too big to buy in biotech is back. A number of top analysts went right after AbbVie’s rationale for the Allergan deal today, just as Bristol-Myers Squibb stirred immediate debate over the worth and wisdom of acquiring Celgene.

To help provide some added context to this discussion, we asked DealForma chief Chris Dokomajilar to look over the past decade of major M&A in biopharma to decipher the top 15 plays.

The new numbers, unadjusted for inflation, harken back to the days of the Pfizer-Wyeth buyout and Merck’s decision to absorb Schering-Plough — both triggered in 2009. The heat over those acquisitions made the big pharma mega-deal highly unpopular for most everyone — except Pfizer — as industry leaders swore off almost all but the handy bolt-on acquisition.

Until recently.

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