Men­lo’s IPO hang­over be­gins with a failed PhII for an old Mer­ck castoff

Ste­va Bas­ta

Just a lit­tle more than two months af­ter Men­lo Ther­a­peu­tics went pub­lic $MN­LO, rais­ing $119 mil­lion from a suc­cess­ful IPO in the midst of a rol­lick­ing good time on Wall Street for high risk of­fer­ings, their one and on­ly drug in the clin­ic just de­ci­sive­ly failed a Phase II tri­al.

In­ves­ti­ga­tors say that ser­lop­i­tant failed to dis­tin­guish it­self from a place­bo in a pru­ri­tus study with 484 pa­tients, flunk­ing the pri­ma­ry and key sec­ondary end­points. Ex­ecs for the com­pa­ny, though, are vow­ing to hang on, not­ing some ear­li­er pos­i­tive mid-stage da­ta as well as a Phase III that is about to launch.

Many of the in­vestors, though, won’t be stay­ing for the next chap­ter. The biotech’s stock dropped more than 70% this morn­ing as a sav­age post-IPO hang­over set in.

Men­lo got the NK-1 re­cep­tor an­tag­o­nist from Mer­ck back in 2012 for on­ly $1 mil­lion up­front, an ear­ly ex­am­ple of a de­vel­op­er that bagged a drug from Big Phar­ma’s back shelves cheap. In this case the team felt that the drug could be re­pur­posed for itch as­so­ci­at­ed with der­ma­to­log­ic con­di­tions such as atopic der­mati­tis, pso­ri­a­sis and pruri­go nodu­laris. At Mer­ck this drug was known as MK0594, which was put through a cou­ple of tri­als for al­co­hol de­pen­dence (ter­mi­nat­ed) and over­ac­tive blad­der.

Men­lo based its IPO on two Phase II stud­ies that were re­port­ed out last Sep­tem­ber. In­ves­ti­ga­tors re­port­ed a bor­der­line suc­cess (p<0.05) on the re­duc­tion from base­line VAS pru­ri­tus score and a change from base­line in av­er­age-itch VAS score at 8 weeks (p<0.001).

Men­lo went pub­lic right along­side Sol­id Bio, which has seen its shares crash in the wake of an FDA hold on its Duchenne mus­cu­lar dy­s­tro­phy ther­a­py. The big ques­tion is how many nasty set­backs like this will have to oc­cur to new­ly pub­lic com­pa­nies be­fore in­vestors lose their ap­petite for high risk. And af­ter the Ax­o­vant im­plo­sion on Alzheimer’s with a cheap drug bagged from Glax­o­SmithK­line, oth­ers may be ques­tion­ing the Big Phar­ma bar­gain base­ment strat­e­gy.

Vi­vo Cap­i­tal owned the biggest chunk of shares ahead of the IPO, with 17.3% of the eq­ui­ty, fol­lowed by Remedi­tiex and Pre­sidio. Mer­ck owned 5.8% as part of its deal with the biotech, with ven­Bio and F-Prime in on the syn­di­cate.

“Re­duc­tion of pru­ri­tus has been demon­strat­ed in two pri­or Phase II stud­ies, one tri­al in pa­tients with chron­ic pru­ri­tus and one tri­al in pa­tients with pruri­go nodu­laris,” said Men­lo CEO Steve Bas­ta in a state­ment. “We are ini­ti­at­ing Phase III stud­ies in pruri­go nodu­laris this quar­ter, and we are look­ing for­ward to the Phase II re­sults in re­frac­to­ry chron­ic cough in the fourth quar­ter of this year, and the Phase II re­sults in pru­ri­tus as­so­ci­at­ed with pso­ri­a­sis by late 2018 or ear­ly 2019.”

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.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,600+ biopharma pros reading Endpoints daily — and it's free.

Turned back at the FDA, Im­muno­Gen is ax­ing 220 staffers, sell­ing pro­grams and hun­ker­ing down for a new PhI­II gam­ble

After being stymied by FDA regulators who were unconvinced by ImmunoGen’s $IMGN desperation shot at an accelerated OK based on a secondary endpoint, the struggling biotech is slashing its workforce, shuttering R&D projects and looking for buyers to pick up some of its experimental cancer assets as it goes back into a new Phase III with the lead drug.

We found out last month that the FDA had batted back their case for an accelerated approval of their antibody-drug conjugate mirvetuximab soravtansine, which had earlier failed a Phase III study for ovarian cancer. Now the other shoe is dropping.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,600+ biopharma pros reading Endpoints daily — and it's free.

As­traZeneca chal­lenges Roche on front­line SCLC af­ter seiz­ing an in­ter­im win — and Mer­ck may not be far be­hind

The crowded playing field in the PD-1/L1 marketing game is about to get a little more complex.

This morning AstraZeneca reported that its CASPIAN study delivered a hit in an interim readout for their PD-L1 Imfinzi combined with etoposide and platinum-based chemotherapy options for frontline cases of small cell lung cancer, a tough target which has already knocked back Bristol-Myers’ shot in second-line cases. The positive data  — which we won’t see before they roll it out at an upcoming scientific conference — give AstraZeneca excellent odds of a quick vault to challenging Roche’s Tecentriq-chemo combo, approved 3 months ago for frontline SCLC in a landmark advance.

“This is the first trial offering the flexibility of combining immunotherapy with different platinum-based regimens in small cell lung cancer, expanding treatment options,” noted AstraZeneca cancer R&D chief José Baselga in a statement.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,600+ biopharma pros reading Endpoints daily — and it's free.

Bridge­Bio takes crown for biggest biotech IPO of 2019, as fel­low uni­corn Adap­tive rais­es of­fer­ing size and price

Bridge­Bio Phar­ma and Adap­tive Biotech­nolo­gies have not just up­sized IPO of­fer­ings — the pair of uni­corns have al­so raised their of­fer­ing prices above the range, haul­ing in a com­bined $648.5 mil­lion.

Neil Ku­mar’s Bridge­Bio Phar­ma, found­ed in 2015, has a sta­ble of com­pa­nies fo­cused on dis­eases that are dri­ven by de­fects in a sin­gle gene — en­com­pass­ing der­ma­tol­ogy, car­di­ol­o­gy, neu­rol­o­gy, en­docrinol­o­gy, re­nal dis­ease, and oph­thal­mol­o­gy — and can­cers with clear ge­net­ic dri­vers. The start­up mill birthed a pletho­ra of firms such as Ei­dos, Navire, QED Ther­a­peu­tics and Pelle­Pharm, which func­tion as its sub­sidiaries.

Two biotech uni­corns swell pro­posed IPOs, eye­ing a $600M-plus wind­fall

We’ve been wait­ing for the ar­rival of Bridge­Bio’s IPO to top off the wave of new biotech of­fer­ings sweep­ing through Nas­daq at the end of H1. And now we learn that it’s been sub­stan­tial­ly up­sized.

Ini­tial­ly pen­ciled in at a uni­corn-sized $225 mil­lion, the KKR-backed biotech has spiked that to the neigh­bor­hood of $300 mil­lion, look­ing to sell 20 mil­lion shares at $14 to $16 each. That’s an added 5 mil­lion shares, re­ports Re­nais­sance Cap­i­tal, which fig­ures the pro­posed mar­ket val­u­a­tion for Neil Ku­mar’s com­pa­ny at $1.8 bil­lion.

No­var­tis holds back the copy­cat brigade's at­tack on its top drug fran­chise — for now

A fed­er­al judge has put a gener­ic chal­lenge to No­var­tis’ block­buster mul­ti­ple scle­ro­sis drug Gilenya on hold while a patent fight plays out in court.

Judge Leonard P. Stark is­sued a tem­po­rary in­junc­tion ear­li­er this week, forc­ing My­lan, Dr. Red­dy’s Lab­o­ra­to­ries and Au­robindo Phar­ma to shelve their launch plans to al­low the patent fight to pro­ceed. He ruled that al­low­ing the gener­ics in­to the mar­ket now would per­ma­nent­ly slash the price for No­var­tis, even if it pre­vails. 

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.

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.

Endpoints News

Basic subscription required

Unlock this story instantly and join 53,600+ biopharma pros reading Endpoints daily — and it's free.

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.