Macro­Gen­ics touts a PhI­II win in a head-to-head with best-sell­er Her­ceptin — shares rock­et high­er

Macro­Gen­ics $MGNX has claimed suc­cess in their Phase III tri­al of their drug mar­ge­tux­imab for metasta­t­ic breast can­cer, putting them on the path to a BLA fil­ing. But they’re not of­fer­ing a lot of de­tail.

The top-line num­ber cleared the bar for sta­tis­ti­cal sig­nif­i­cance, but not by a wide mar­gin.

Scott Koenig

In a head-to-head with Her­ceptin (trastuzum­ab), the biotech re­ports that their drug won out in pro­long­ing pro­gres­sion-free sur­vival among heav­i­ly treat­ed third- and fourth-line HER2+ pa­tients. The p-val­ue on the pri­ma­ry end­point was 0.033 with a 24% risk re­duc­tion for dis­ease pro­gres­sion. A much bet­ter score of 0.005, though, was record­ed for the ma­jor­i­ty of pa­tients in the tri­al who were car­ri­ers of the CD16A (FcγRI­I­Ia) 158F al­lele, which is linked to re­sis­tance to Her­ceptin.

This was a close­ly watched cat­a­lyst for Macro­Gen­ics. Its shares shot up 166% on the top-line re­port Wednes­day morn­ing. Jonathan Chang at Leerink not­ed:

Many in­vestors we have spo­ken with ex­pect­ed the study to be neg­a­tive and we be­lieve lit­tle val­ue for Her2+ mBC was baked in­to the MGNX stock. We mod­eled a 60% prob­a­bil­i­ty of suc­cess.

We don’t know yet how those num­bers trans­late to months of added PFS, or the over­all sur­vival rate. Re­searchers are still pon­der­ing OS. The more ex­act da­ta, which will tell an­a­lysts a lot more about the mar­ket po­ten­tial for this drug, will be un­veiled at a lat­er can­cer con­fer­ence.

Re­searchers will be tak­ing the da­ta from the SOPHIA study, which en­rolled 536 pa­tients, to reg­u­la­tors some­time in the sec­ond half of this year.

The com­pa­ny has been tout­ing their an­ti­body’s en­gi­neer­ing, say­ing the bet­ter Fc do­main can en­gage the im­mune sys­tem. The drug is de­signed to tar­get the HER2 on­co­pro­tein. And there’s a long way to go on the de­vel­op­ment ef­fort.

“We look for­ward to ad­di­tion­al op­por­tu­ni­ties to de­vel­op mar­ge­tux­imab in oth­er HER2-pos­i­tive breast and gas­tric can­cer pop­u­la­tions,” Macro­Gen­ics CEO Scott Koenig re­marked. 

A side ben­e­fi­cia­ry in to­day’s news is Zai Lab, $ZLAB the Chi­nese biotech that in-li­censed re­gion­al rights to the drug for a low up­front pay­ment. Jef­feries not­ed:

Re­call, ZLAB in-li­censed marge 12/2/18 for an up­front of $25M for rights to breast and gas­tric can­cer in Chi­na (our note here). Ex­pec­ta­tions for the SOPHIA ph.III read­out were low, and we be­lieve ZLAB took a cal­cu­lat­ed risk/ben­e­fit ap­proach w/ marge that led to best-case sce­nario, giv­en to­day’s news.

The biotech hit a stum­bling block at the end of last year. Leery about signs of liv­er tox­i­c­i­ty among pa­tients tak­ing a B7-H3 × CD3 bis­pe­cif­ic un­der de­vel­op­ment at Macro­Gen­ics, the FDA slapped a par­tial hold on the ear­ly-stage pro­gram.

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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FDA re­jects Ac­er's rare dis­ease drug, asks for new tri­al — shares crater

Ac­er Ther­a­peu­tics’ bid to re­pur­pose celipro­lol — a be­ta-block­er on the mar­ket for hy­per­ten­sion — as a treat­ment for a rare, in­her­it­ed con­nec­tive tis­sue dis­or­der has hit a se­vere set­back. The New­ton, Mass­a­chu­setts-based com­pa­ny on Tues­day said the FDA re­ject­ed the drug and has asked for an­oth­er clin­i­cal tri­al.

The com­pa­ny’s shares $AC­ER cratered near­ly 77% to $4.47 in Tues­day morn­ing trad­ing.

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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SQZ, Ery­tech kick off $57M cell ther­a­py part­ner­ship; Jean-Paul Kress lands new CEO gig at Mor­phoSys

→ In a mar­riage of two tech­nolo­gies meant to make cell ther­a­pies more pow­er­ful, SQZ Biotech is team­ing up with France’s Ery­tech Phar­ma for a col­lab­o­ra­tion, with $57 mil­lion re­served for the first project and $50 mil­lion for each sub­se­quent ap­proval (prod­uct or in­di­ca­tion). Hav­ing ac­cess to Ery­tech’s method of fash­ion­ing ther­a­peu­tics from red blood cells, the Cam­bridge, MA-based com­pa­ny said, will am­pli­fy SQZ’s cell en­gi­neer­ing ca­pa­bil­i­ties and al­low them to de­vleop a new class of im­munomod­u­la­to­ry ther­a­pies. Its own tech — so far ap­plied in can­cer but al­so has po­ten­tial in di­a­betes — tem­po­rary dis­rupts the cell mem­brane by squeez­ing the cell, thus cre­at­ing a brief win­dow for tar­get ma­te­ri­als such as anti­gens to en­ter.

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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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.

Tasly Bio­phar­ma pitch­es long-await­ed IPO — will it trig­ger an­oth­er $1B gold rush on HKEX?

In the run up to the Hong Kong stock ex­change’s an­tic­i­pat­ed rule change — open­ing the door for Chi­nese pre-rev­enue biotechs to go pub­lic clos­er to home — more than a year ago, Tasly Bio­phar­ma was one of the big play­ers whose ru­mored in­ter­est helped stoke en­thu­si­asm for the new list­ing venue. The com­pa­ny has since kept the drum­roll rum­bling in the back­ground, rais­ing a pre-IPO round and con­vinc­ing part­ner Trans­gene to swap own­er­ship in a joint ven­ture for eq­ui­ty. Now the oth­er shoe has fi­nal­ly dropped as ex­ecs out­line plans for a pipeline dom­i­nat­ed by car­dio­vas­cu­lar drugs.

Suf­fer­ing No­var­tis part­ner Cona­tus grabs the ax and packs it in on NASH af­ter a se­ries of set­backs

The NASH par­ty is over at No­var­tis-backed Cona­tus. And this time they’re turn­ing off the lights.

More than 2 years af­ter No­var­tis sur­prised the biotech in­vest­ment com­mu­ni­ty with its $50 mil­lion up­front and promise of R&D sup­port to part­ner with the lit­tle biotech on NASH — ig­nit­ing a light­ning strike for the share price — Cona­tus $CNAT is back with the lat­est bit­ter tale to tell about em­ri­c­as­an, which once in­spired con­fi­dence at the phar­ma gi­ant.

With 4 more biotech IPOs due to wrap up Q2, how is the class of 2019 far­ing?

With 22 biotech IPOs on the books and four more set to price in the last week of June, in­vest­ment ad­vis­er Re­nais­sance Cap­i­tal has tak­en the pulse of the re­cent rush.

By the IPO ex­perts’ count, 25 out of 32 health­care of­fer­ings this year have been from biotechs — dif­fer­ing slight­ly from Brad Lon­car’s tal­ly — and the over­all pic­ture is one of un­der­per­for­mance. While they av­er­aged a first-day re­turn of 9.0%, col­lec­tive­ly they have trad­ed down to a 5.9% re­turn. Turn­ing Point $TP­TX and Cor­texyme $CRTX emerged on top at the half-year mark, ris­ing 135% and 109% re­spec­tive­ly.