Lonnel Coats, Lexicon president and CEO

Lex­i­con bids farewell to top sell­er Xer­me­lo in re­or­ga­ni­za­tion to­ward R&D pipeline

Three years ago, Lex­i­con Phar­ma­ceu­ti­cals was fly­ing high fol­low­ing the FDA ap­proval and com­mer­cial launch of its Xer­me­lo drug, which treats car­ci­noid syn­drome di­ar­rhea.

But now the com­pa­ny is say­ing good­bye to its top sell­er as it pares down debt and re­or­ga­nizes to fo­cus on its R&D pipeline. In what CEO Lon­nel Coats de­scribed as a “bit­ter­sweet” mo­ment, Lex­i­con an­nounced Thurs­day the sale of Xer­me­lo to TerSera for $155 mil­lion in up­front pay­ments and $4 mil­lion in ex­ist­ing in­ven­to­ry. Lex­i­con can re­ceive an ad­di­tion­al $65 mil­lion in mile­stone pay­ments re­lat­ing to bil­iary tract can­cer and roy­al­ties on fu­ture Xer­me­lo sales.

“The sale of our com­mer­cial prod­uct, Xer­me­lo, to TerSera pro­vides a home for an im­por­tant treat­ment for pa­tients with can­cer,” Coats said in a state­ment.

TerSera will al­so as­sume an on­go­ing Phase II tri­al of Xer­me­lo in bil­iary tract can­cer pa­tients and can hire 20 em­ploy­ees from Lex­i­con who work on the drug.

Coats out­lined the re­or­ga­ni­za­tion in a con­fer­ence call with in­vestors ear­ly Thurs­day morn­ing de­tail­ing the com­pa­ny’s sec­ond quar­ter fi­nan­cials. Though Xer­me­lo sales were up 21 per­cent to $9 mil­lion in the quar­ter com­pared with 2019 Q2, Lex­i­con end­ed the three-month pe­ri­od at a net loss of $69.1 mil­lion.

The com­pa­ny ini­ti­at­ed the sell-off to pay back all $150 mil­lion of an ex­ist­ing loan and will now fo­cus on its LX9211 can­di­date for the treat­ment of di­a­bet­ic pe­riph­er­al neu­ro­path­ic pain. Thanks to the sale, LX9211 will en­ter Phase II and Lex­i­con will have enough run­way to op­er­ate such tri­als through the end of 2021.

Though Xer­me­lo had been a boon for Lex­i­con, Thurs­day’s sale is the lat­est in a long line of set­backs. The Texas-based com­pa­ny had part­nered with Sanofi for $300 mil­lion up­front to de­vel­op a di­a­betes drug, the SGLT1/2 in­hibitor so­tagliflozin. But the FDA re­ject­ed the drug in March 2019, and af­ter mul­ti­ple Phase III fail­ures in type 2 di­a­betes, Sanofi ex­it­ed the deal, pay­ing an­oth­er $260 mil­lion and caus­ing Lex­i­con stock to drop as much as 70 per­cent. US reg­u­la­tors re­ject­ed so­tagliflozin for a sec­ond time last De­cem­ber and Lex­i­con has filed an ap­peal.

At is­sue was the high risk of di­a­bet­ic ke­toaci­do­sis in type 1 di­a­betes, which caused the FDA to split its vote 8-8 in the first re­jec­tion in­ci­dent. It’s a con­di­tion that can be hard to spot, rais­ing the chances of hos­pi­tal­iza­tion for pa­tients who are un­aware that they ur­gent­ly need to take in­sulin. Oth­er SGLT in­hibitors, such as As­traZeneca’s Farx­i­ga, ran in­to sim­i­lar trou­ble.

LX9211 it­self is a small mol­e­cule in­hibitor of adap­tor as­so­ci­at­ed ki­nase 1 (AAK1) and Lex­i­con is ex­plor­ing mul­ti­ple treat­ments for neu­ro­path­ic pain with the can­di­date. Tak­en oral­ly, LX9211 showed a fa­vor­able safe­ty pro­file in Phase I stud­ies, Lex­i­con said, and the com­pa­ny is plan­ning fur­ther Phase II stud­ies.

Phase III read­outs spell dis­as­ter for Genen­tech’s lead IBD drug

Roche had big plans for etrolizumab. Eyeing a hyper-competitive IBD and Crohn’s market where they have not historically been a player, the company rolled out 8 different Phase III trials, testing the antibody for two different uses across a range of different patient groups.

On Monday, Roche released results for 4 of those studies, and they mark a decided setback for both the Swiss pharma and their biotech sub Genentech, potentially spelling an end to a drug they put over half-a-decade and millions of dollars behind.

Cell and Gene Con­tract Man­u­fac­tur­ers Must Em­brace Dig­i­ti­za­tion

The Cell and Gene Industry is growing at a staggering 30% CAGR and is estimated to reach $14B by 20251. A number of cell, gene and stem cell therapy sponsors currently have novel drug substances and products and many rely on Contract Development Manufacturing Organizations (CDMO) to produce them with adherence to stringent regulatory cGMP conditions. Cell and gene manufacturing for both autologous (one to one) and allogenic (one to many) treatments face difficult issues such as: a complex supply chain, variability on patient and cellular level, cell expansion count and a tight scheduling of lot disposition process. This complexity affects quality, compliance and accountability in the entire vein-to-vein process for critically ill patients.

Eric Shaff (Seres)

UP­DAT­ED: Af­ter a 4-year so­journ, strug­gling mi­cro­bio­me pi­o­neer Seres claims a break­out PhI­II come­back. And shares re­spond in fren­zied spike

Almost exactly 4 years ago, Seres Therapeutics $MCRB experienced one of those soul-crunching failures that can raise big questions about a biotech’s future. Out front in their pursuit of a gut punch to C. difficile infection (CDI), the Phase II test was a flat failure, and investors wiped out a billion dollars of equity value that never returned in the years that followed.

Seres, though, pressed ahead, changing out CEOs a year ago — bidding Merck vet Roger Pomerantz farewell from the C suite — and pushing through a Phase III, hoping that amping up the dosage would make the key difference. And this morning, they unveiled a claim that they had aced the Phase III and positioned themselves for a run at a landmark FDA OK.

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Warren Huff, Reata CEO

Rea­ta sug­gests Friedre­ich's atax­ia pro­gram could be de­layed, send­ing stock plung­ing

Reata Pharmaceuticals $RETA made waves last October when its drug omaveloxolone produced positive trial results in treating a rare neurological disorder, but the candidate’s path forward became much murkier Monday.

In a report of quarterly earnings, the biotech divulged that the FDA is considering delaying omaveloxolone’s NDA pending completion of a second trial. That could push back approval by at least a year given that the target population, individuals with Friedreich’s ataxia, is limited and progression of the hard-to-treat illness is notoriously slow. The Covid-19 pandemic would also hinder Reata’s ability to complete an additional trial.

Brian Stuglik, Verastem CEO

The du­velis­ib hot pota­to is tossed to a new own­er as Ve­rastem looks to re­or­ga­nize around the pipeline

When Infinity put up duvelisib for a no-money-down instant deal, the biotech was looking for a quick exit from a clinical disaster. AbbVie had walked away from their alliance after looking at how the data stacked up in a crowded field.

And while it was approvable, it wasn’t looking pretty to anyone who thought in commercial terms.

One Big Pharma’s trash, though, was seen as a biotech treasure as a deeply troubled Verastem stepped up to grab the PI3K-delta/gamma — promising to run it across the goal lines at the FDA. And they did just that, only with little to show for it.

Michel Vounatsos, Biogen CEO (via YouTube)

UP­DAT­ED: Bio­gen scores a pri­or­i­ty re­view for its Alzheimer's drug ad­u­canum­ab, mov­ing one gi­ant leap for­ward in its con­tro­ver­sial quest

Biogen scored a big win at the FDA today as regulators accepted their application for the controversial Alzheimer’s drug aducanumab and gave it a priority review.

The PDUFA date is March 7, 2021.

Significantly, Biogen says it did not use its priority review voucher to win special treatment at the FDA. The agency handed that out gratis.

That’s the ideal scenario Biogen was looking for as disappointed analysts wondered aloud about the delayed application earlier in the year.

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In­novent and Eli Lil­ly chal­lenge Mer­ck­'s mega-block­buster Keytru­da in non-small cell lung can­cer field

China-based Innovent Biologics and its multinational ally Eli Lilly shared Phase III evidence that their PD-1 inhibitor combo can delay the progression of nonsquamous non-small cell lung cancer.

But the drugmakers will face stiff competition in China from Merck’s Keytruda, the ruling PD-1 which is already approved to treat both squamous and nonsquamous NSCLC and boasts positive overall survival rates.

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Anap­tys­Bio's etokimab pro­vides more dis­ap­point­ing re­sults, rais­ing ques­tions about com­pound's fu­ture

The lead program for AnaptysBio’s in-house pipeline has hit another setback.

Etokimab, an IL-33 inhibitor, did not achieve statistically significant improvement in a Phase II trial for patients suffering from chronic rhinosinusitis with nasal polyps. Researchers measured the individuals’ bilateral nasal polyps score and sino-nasal outcome test, finding that neither improved upon a placebo after both four- and eight-week time markers, though they did demonstrate improvement over baseline levels of the examinations.

DFC CEO Adam Boehler and Kodak CEO Jim Continenza (Kodak)

Covid-19 roundup: Cure­Vac beefs up its uni­corn IPO dreams as bil­lion­aire own­er takes this Covid-19 mR­NA play­er on a forced march to Nas­daq; Ko­dak's $765M deal is put on hold

When CureVac initially jotted down $100 million for its IPO raise a couple of weeks ago, it seemed small. The German mRNA player, after all, had jumped into a Covid-19 race that swelled the sails of Moderna and BioNTech by tens of billions. And after raising $640 million in a slate of deals, $100 million in a hot market like this seemed like a pittance in the bigger scheme of things.

Today, we got a look at a figure that probably comes closer to the game-changing number the top execs probably have in mind. Selling 15.3 million shares at the high end of their $14 to $16 range would net a $243 million bounty. Majority owner Dietmar Hopp is putting in another €100 million, bringing the total to around $350 million. And what are the chances they want to do even better than that?

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