J&J hands Ar­row­head a plum $3.7B deal for hep B-plus 3 — cor­ralling a pos­si­ble game-chang­ing RNAi drug

Two years af­ter Ar­row­head Phar­ma­ceu­ti­cals $AR­WR con­ced­ed that a sub­stan­tial seg­ment of their RNAi pipeline was hope­less­ly com­pro­mised and had to be jet­ti­soned, crip­pling their stock price, the biotech is stag­ing a ma­jor come­back.

Chris An­za­lone

In the wake of an ear­ly look at pos­i­tive ear­ly re­turns for their he­pati­tis B can­di­date, J&J is step­ping up with one of their fa­mous li­cens­ing pacts, fork­ing over $250 mil­lion in cash for an up­front and eq­ui­ty stake, sea­son­ing it with a $50 mil­lion near-term plum and promis­ing much, much more for a break­through per­for­mance in a key dis­ease tar­get.

In the deal, J&J is get­ting world­wide rights to ARO-HBV, a “po­ten­tial­ly cu­ra­tive ther­a­py for pa­tients with chron­ic he­pati­tis B virus in­fec­tion.” The pact comes just weeks af­ter Ar­row­head shares rock­et­ed up on pos­i­tive da­ta from just 8 pa­tients.

But that was enough for J&J, which has a busy BD group with a long track record for scour­ing the plan­et for break­through drug can­di­dates that do great things for core dis­eases.

Here’s the break­down on the deal.

Math­ai Mam­men

Aside from the Big Phar­ma val­i­da­tion, which is worth plen­ty, Ar­row­head gets $175 mil­lion up­front plus $75 mil­lion in an eq­ui­ty stake at a pre­mi­um share price. There’s an­oth­er $3.5 bil­lion in po­ten­tial mile­stones, which has a $50 mil­lion mile­stone in goal mon­ey added for the Phase II start — which Ar­row­head had ini­tial­ly pen­cilled in for ear­ly 2019, ac­cord­ing to CEO Chris An­za­lone.

Al­most half of that mile­stone mon­ey — $1.6 bil­lion — is fo­cused sole­ly on the hep B pro­gram.

“I think we have done what no oth­er com­pa­ny could have done: go­ing from a stand­ing start to a Phase I/II read­out in less than 2 years,” says the CEO. “This is a re­al­ly good time to hand off the da­ta, go­ing for­ward to en­ter in­to a very com­pli­cat­ed, very ex­pen­sive glob­al set of stud­ies. We think that Janssen is bet­ter tooled to do that. Speed is go­ing to be crit­i­cal here; the glob­al or­ga­ni­za­tion is go­ing to be crit­i­cal.”

Mar­i­anne De Backer

What brought J&J to the ta­ble at the end?

Less than a month ago Ar­row­head saw its share price rock­et up 43% af­ter the com­pa­ny un­veiled new da­ta that it says sup­port the work they’re do­ing on an RNAi ther­a­py for he­pati­tis B. 

Their state­ment: 

The da­ta demon­strate that three month­ly dos­es of ARO-HBV led to a max­i­mum re­duc­tion in cir­cu­lat­ing HBV sur­face anti­gen (HB­sAg) of 4.0 log10, with mean re­duc­tions of ap­prox­i­mate­ly 2.0 log10 on day 85 in the 100 mg co­hort and 1.4 log10 on day 71 in the 200mg co­hort (cur­rent­ly the last com­plete da­ta point avail­able). All eight pa­tients achieved greater than 1.0 log10 re­duc­tions in cir­cu­lat­ing HB­sAg.

J&J has been on the hunt for a break­through he­pati­tis B pro­gram for years, buy­ing Novi­ra in 2015 while lat­er ink­ing pacts with Sino and Arc­turus. This deal, though, ranks as one of the biggest in the space, in­di­cat­ing that J&J wasn’t the on­ly bid­der at the ta­ble.

An­za­lone adds that J&J is al­so get­ting the rights to up to 3 ad­di­tion­al RNAi pro­grams, a help­ful en­dorse­ment from a phar­ma gi­ant that’s been known to ante up a sig­nif­i­cant amount of cash to snag the big drug can­di­dates it wants to add to its mid- and late-stage pipeline.

Across from the bar­gain­ing ta­ble, says An­za­lone, J&J was rep­re­sent­ed by R&D chief Math­ai Mam­men, who al­so bet big re­cent­ly on a BC­MA can­di­date from Chi­na’s Leg­end, and Mar­i­anne De Backer, a long­time deal­mak­er at the com­pa­ny.

J&J is well known for cre­at­ing a glob­al net­work of deal­mak­ers in­ter­est­ed in a wide va­ri­ety of de­vel­op­men­tal prod­ucts at every stage of de­vel­op­ment. But it’s the late-stage stars where it’s will­ing to go big.

That hasn’t changed.

Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

Hal Barron [File photo]

Hal Bar­ron's team at GSK scores a win with pos­i­tive Ze­ju­la PhI­II front­line study — now comes the hard part

Score one for Hal Barron and the new R&D team steering GlaxoSmithKline’s pipeline.

The pharma giant reported this morning that its recently acquired PARP, Zejula (niraparib), hit the primary endpoint on progression-free survival in a frontline maintenance setting for women suffering ovarian cancer — following chemo and regardless of their BRCA status.

GSK bet $5 billion on the Tesaro buyout primarily to get this drug, drawing the shaking heads of biopharma. Why pay a big premium for a drug like this when AstraZeneca was going from strength to strength with Lynparza, ran the argument, having won a hugely important accelerated approval to jump out ahead — way ahead — of the rest of the PARP players? Lynparza — now co-owned by a powerhouse cancer team at Merck — won the first approval in frontline maintenance in ovarian cancer.

Daniel O'Day [via AP Images]

UP­DAT­ED: Gilead un­leash­es a $5B late-stage cash al­liance with Gala­pa­gos — lay­ing out O'­Day's R&D strat­e­gy

Daniel O’Day is executing his first major development deal since taking over as CEO of Gilead $GILD. And he’s going in deep to ally himself with a longstanding partner.

O’Day announced today that he is spending $5 billion in cash to add new late-stage drugs to Gilead’s pipeline, picking up rights to Galapagos’ $GLPG Phase III IPF drug GLPG1690 alongside adoption of the biotech’s Phase IIb drug GLPG1972 for osteoarthritis. And Gilead is also putting billions more on the table for milestones, gaining options for everything else in Galapagos’ pipeline, with a shot at all rights outside of Europe.

Altogether, Gilead is gaining rights to 6 clinical-stage assets, 20 preclinical programs and everything else being hatched in translation.

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FDA bats back As­traZeneca's SGLT di­a­betes drug for Type 1 di­a­betes — block­ing a class on safe­ty fears

The FDA has just fired its latest salvo at the SGLT class of diabetes drugs, blowing up some commercial opportunity at AstraZeneca as part of the collateral damage.

The pharma giant reported early Monday that the FDA has rejected its blockbuster drug Farxiga for Type 1 diabetes that can’t be controlled by insulin. And while the pharma giant maintained its usual grim silence in the face of a setback, this one should be easy to interpret.

Jonathan Symonds [via HSBC]

GSK to tap Jonathan Symonds as chair­man, lever­ag­ing Big Phar­ma ex­pe­ri­ence for con­sumer biz deal

Six months into its search for a new board chairman, GlaxoSmithKline has apparently found the perfect candidate in a seasoned executive groomed at AstraZeneca and Novartis. Jonathan Symonds is in the final stages of being appointed, Bloomberg reports.

In January Sir Philip Hampton announced his intention to step down and make way for a new leader to oversee the consumer health joint venture GSK is setting up with Pfizer. The deal — announced a month prior — would spin out the unit formerly headed by GSK CEO Emma Walmsley and merge it with the equivalent division at Pfizer to create a new entity to be listed separately.

UP­DAT­ED: Am­gen, No­var­tis scrap Alzheimer's stud­ies — is BACE fi­nal­ly dead or will Bio­gen and Ei­sai car­ry on?

The BACE theory of controlling Alzheimer’s died with failed pivotal projects at Merck, Eli Lilly and their partners at AstraZeneca. Now Amgen and Novartis have come along to bulldoze it under a mound of safety threats — leaving only Biogen and Eisai to carry on with a less than zero chance of success — with the notable addition that they may actually be doing harm to patients.

After the market closed Thursday, Amgen and Novartis announced that they were dumping two pivotal programs underway with the Banner Alzheimer’s Institute on their BACE drug CNP520 (umibecestat) after an independent review of the data indicated that patients’ cognitive abilities were actually worsening at a faster pace than the placebo arm.

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Christi Shaw at JP Morgan 2019. Jeff Rumans for Endpoints News

Fresh out of Eli Lil­ly, Christi Shaw sur­faces as Daniel O'­Day's new CEO at CAR-T pi­o­neer Kite

Well, that didn’t take long. 

We found out Thursday evening that Christi Shaw has given up her top post as the head of the Bio-Medicines group at Eli Lilly for the helm at CAR-T pioneer Kite. New Gilead CEO Daniel O’Day, a Roche veteran, had made finding a Kite CEO a top priority on his arrival at Gilead. And he went right for a headliner.

O’Day was clearly excited about the coup.

“We conducted an extensive search for a new leader at Kite and we believe that Christi’s unique set of skills will allow us to continue to build on our leadership position in cell therapy,” he said in a prepared statement. “Christi’s vast experience across complex therapeutic areas, and particularly in oncology, will serve Kite very well. She is clearly a leader who will bring teams and individuals together and I am confident she will build upon the entrepreneurial spirit at Kite as we seek to help more people with cancer around the world.”

Christi Shaw at JP Morgan 2019. Jeff Rumans for Endpoints News

Eli Lil­ly's Christi Shaw bows out of top post at the Bio-Med­i­cines unit

Less than 3 years after Eli Lilly CEO David Ricks recruited Novartis vet Christi Shaw to run their big Bio-Medicines business, she’s out.

In a statement put out Thursday morning, Lilly said that Shaw’s last day will come at the end of August. Patrik Jonsson, currently president and general manager of Lilly Japan, will succeed Shaw once he gets the paperwork sorted out.

Lilly’s shares dropped 4% on the news.

Jeff Poulton

Al­ny­lam’s Maraganore switch­es ‘per­haps the best CFO in mid-cap biotech’ with Shire vet Jeff Poul­ton

There’s a new CFO taking charge of the numbers at RNAi pioneer Alnylam.

Alnylam chief John Maraganore says that CFO Manmeet S. Soni is leaving in the proverbial pursuit of new opportunities. And he’s being replaced by ex-Shire CFO Jeff Poulton, not long after the Takeda takeover obliterated that position.

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