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.”

As­traZeneca trum­pets the good da­ta they found for Tagris­so in an ad­ju­vant set­ting for NSCLC — but many of the ex­perts aren’t cheer­ing along

AstraZeneca is rolling out the big guns this evening to provide a salute to their ADAURA data on Tagrisso at ASCO.

Cancer R&D chief José Baselga calls the disease-free survival data for their drug in an adjuvant setting of early stage, epidermal growth factor receptor-mutated NSCLC patients following surgery “momentous.” Roy Herbst, the principal investigator out of Yale, calls it “transformative.”

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Paul Hudson, Sanofi CEO (Getty Images)

Sanofi CEO Paul Hud­son has $23B burn­ing a hole in his pock­et. And here are some hints on how he plans to spend that

Sanofi has reaped $11.1 billion after selling off a big chunk of its Regeneron stock at $515 a share. And now everyone on the M&A side of the business is focused on how CEO Paul Hudson plans to spend it.

After getting stung in France for some awkward politicking — suggesting the US was in the front of the line for Sanofi’s vaccines given American financial support for their work, versus little help from European powers — Hudson now has the much more popular task of managing a major cash cache to pull off something in the order of a big bolt-on. Or two.

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David Chang, Allogene CEO (Jeff Rumans)

Head­ed to PhII: Al­lo­gene CEO David Chang com­pletes a pos­i­tive ear­ly snap­shot of their off-the-shelf CAR-T pi­o­neer

Allogene CEO David Chang has completed the upbeat first portrait of the biotech’s off-the-shelf CAR-T contender ALLO-501 at virtual ASCO today, keeping all eyes on a drug that will now try to go on to replace the first-wave personalized pioneers he helped create.

The overall response rate outlined in Allogene’s abstract for treatment-resistant patients with non-Hodgkin lymphoma slipped a little from the leadup, but if you narrow the patient profile to treatment-naïve patients — removing the 3 who had previous CAR-T therapy who didn’t respond, leaving 16 — the ORR lands at 75% with a 44% complete response rate. And 9 of the 12 responders remained in response at the data cutoff, offering a glimpse on durability that still has a long way to go before it can be completely nailed down.

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The Avance Clinical leadership team: CEO Yvonne Lungershausen, Sandrien Louwaars - Director Business Development Operations, Gabriel Kremmidiotis - Chief Scientific Officer, Ben Edwards - Chief Strategy Officer

How Aus­tralia De­liv­ers Rapid Start-up and 43.5% Re­bate for Ear­ly Phase On­col­o­gy Tri­als

About Avance Clinical

Avance Clinical is an Australian owned Contract Research Organisation that has been providing high-quality clinical research services to the local and international drug development industry for 20 years. They specialise in working with biotech companies to execute Phase 1 and Phase 2 clinical trials to deliver high-quality outcomes fit for global regulatory standards.

As oncology sponsors look internationally to speed-up trials after unprecedented COVID-19 suspensions and delays, Australia, which has led the world in minimizing the pandemic’s impact, stands out as an attractive destination for early phase trials. This in combination with the streamlined regulatory system and the financial benefits including a very favourable exchange rate and the R & D cash rebate makes Australia the perfect location for accelerating biotech clinical programs.

Af­ter star­ring at ASH last fall, Gilead’s new Forty Sev­en crew col­ors in more promis­ing da­ta for ma­grolimab at AS­CO

We now know the full, early-stage story behind the drug that inspired Gilead CEO Dan O’Day’s recent $5 billion acquisition of Forty Seven.

Following up on their ASCO abstract from a couple of weeks ago, the team at Forty Seven is making their return appearance this week holding clearly promising early-stage data on their lead drug magrolimab as they ponder whether they should roll on a quest to obtain an accelerated approval.

Pablo Legorreta, founder and CEO of Royalty Pharma AG, speaks at the annual Milken Institute Global Conference in Beverly Hills, California (Patrick T. Fallon/Bloomberg via Getty Images)

Cap­i­tal­iz­ing Pablo: The world’s biggest drug roy­al­ty buy­er is go­ing pub­lic. And the low-key CEO di­vulges a few se­crets along the way

Pablo Legorreta is one of the most influential players in biopharma you likely never heard of.

Over the last 24 years, Legorreta’s Royalty Pharma group has become, by its own reckoning, the biggest buyer of drug royalties in the world. The CEO and founder has bought up a stake in a lengthy list of the world’s biggest drug franchises, spending $18 billion in the process — $2.2 billion last year alone. And he’s become one of the best-paid execs in the industry, reaping $28 million from the cash flow last year while reserving 20% of the cash flow, less expenses, for himself.

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Pfiz­er, Mer­ck KGaA ce­ment Baven­cio blad­der can­cer win with OS da­ta — while carv­ing an­oth­er niche in rare can­cer

Pfizer and Merck KGaA have detailed the Phase III data that inspired FDA regulators to designate Bavencio a “breakthrough” for first-line advanced bladder cancer and offered an early glance at how the PD-L1 can help patients with a rare gynecological cancer — carving out niches in the checkpoint space for itself after being shut out of numerous others.

In JAVELIN Bladder 100, Bavencio led to a 31% reduction in risk of death compared to standard care alone. It also extended median survival by more than seven months — a historic feat in this setting, according to investigators at Queen Mary University of London.

Sanofi brings in 4 new ex­ec­u­tives in con­tin­ued shake-up, as vac­cines and con­sumer health chief head out the door

In the middle of Sanofi’s multi-pronged race to develop a Covid-19 vaccine, David Loew, the head of their sprawling vaccines unit, is leaving – part of the final flurry of moves in the French giant’ months-long corporate shuffle that will give them new-look leadership under new CEO Paul Hudson.

The company also said today that Alan Main, the head of their consumer healthcare unit, is out, and they named 4 executives to fill new or newly vacated positions, 3 of whom come from both outside both Sanofi and from Pharma.

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Iron­wood, Ab­b­Vie kick de­layed-re­lease Linzess for­mu­la­tion to the curb af­ter tri­al fail­ure

The delayed-release formulation of Ironwood and Allergan’s bowel drug Linzess will not see the light of day.

The experimental drug, MD-7246, failed to help patients with abdominal pain associated with irritable bowel syndrome with diarrhea (IBS-D) in a mid-stage study, prompting the partners to abandon the therapy.

First approved in 2012, Linzess (known chemically as linaclotide) enhances the activity of the intestinal enzyme guanylate cyclase-C to increase the secretion of intestinal fluid and then transit through the intestinal tract, as well as reduce visceral pain, to relieve pain and constipation associated with IBS.