Adrian Gottschalk, Foghorn CEO

Mer­ck dan­gles up to $425 mil­lion to team with Flag­ship’s Foghorn Ther­a­peu­tics on drug­ging the shape of DNA

Two years af­ter it first emerged from stealth mode, Flag­ship’s Foghorn Ther­a­peu­tics has nabbed its first Big Phar­ma part­ner as Mer­ck signs on to the biotech’s vi­sion of drug­ging the very shape of DNA.

The deal, worth up to $425 mil­lion but with the up­front cash undis­closed, comes as Foghorn nears a piv­ot to a clin­i­cal stage biotech. The Cam­bridge-based com­pa­ny has added near­ly 60 staffers from the 25 it had when it first emerged out of Flag­ship and, CEO Adri­an Gottschalk said, they have fi­nal­ly re­fined the screen­ing tech­nol­o­gy at the heart of the com­pa­ny, with plans to file their first IND to­wards the end of the year.

“In the last 6 months, ac­tu­al­ly pri­or to the con­ver­sa­tions with Mer­ck, we had in­dus­tri­al­ized our abil­i­ty to in­ter­ro­gate the bi­ol­o­gy,” Gottschalk told End­points News. “We’ve made some very nice progress, re­al­ly start­ing from scratch sev­er­al years ago.”

First found­ed in 2016, Foghorn is one of a spate of re­cent biotechs that try to treat can­cer by tar­get­ing how genes are ex­pressed, as op­posed to try­ing to change the genes them­selves or in­hib­it the pro­teins they code for. Michael Gilman’s Ar­rakis Ther­a­peu­tics is built, like Foghorn, on drug­ging DNA reg­u­la­tors called tran­scrip­tion fac­tors and ear­li­er this year got $190 mil­lion up­front and “sev­er­al bil­lion” in mile­stones for a deal with Roche. Sy­ros, an­oth­er Flag­ship-backed com­pa­ny, at­tract­ed con­sid­er­able buzz sev­er­al years ago by go­ing af­ter so-called “su­per-en­hancers,” though they have since strug­gled to find trac­tion in the clin­ic. More broad­ly, the still-ju­ve­nile field has yield­ed few ma­jor in-hu­man suc­cess­es.

Mer­ck has al­ready sig­naled its be­lief in the ap­proach, at least in cer­tain man­i­fes­ta­tions. Last year, they bought up Pelo­ton Ther­aepeu­tics and its late-stage, kid­ney can­cer tran­scrip­tion fac­tor drug for $1 bil­lion in cash and an­oth­er $1 bil­lion in mile­stones.

Foghorn’s twist, Gottschalk said, is look­ing at how these fac­tors in­ter­act with these spher­i­cal struc­tures on top of DNA, called chro­matin re­mod­el­ing com­plex­es. Ba­si­cal­ly, hu­man DNA con­tains bil­lions of genes, not all of which are turned on at any point in time or in any cell. That DNA sits in tight­ly com­pact­ed strands called chro­matin at the nu­cle­us at the cen­ter of the cell, and one of the ways the body can de­cide which genes need to be turned on is to open and close those strands.

The mol­e­c­u­lar thing that de­ter­mines whether and where genes are turned on is the in­ter­ac­tion be­tween those tran­scrip­tion fac­tors that car­ry in­struc­tions and the chro­matin re­mod­el­ing com­plex that does the open­ing and clos­ing. Foghorn com­pares it to air traf­fic con­trol, the two types of pro­teins telling the genes where to launch and where not to launch. And Gottschalk cit­ed da­ta that sug­gest around 25% of can­cers can be chalked up in part to those bi­o­log­i­cal con­trollers get­ting their sig­nals crossed.

For the last four years, Foghorn has de­vel­oped a high-through­put screen­ing sys­tem to al­low their sci­en­tists to mod­el both the tran­scrip­tion fac­tors and the re­mod­el­ing com­plex­es and fig­ure out which mol­e­cules can mod­u­late each. Though “high-through­put screen­ing” is about as com­mon a word in the drug in­dus­try these days as “pan­cakes” are in the din­er in­dus­try, Gottschalk said that was no easy feat. The chro­matin re­mod­el­ing com­plex­es are just that — com­plex — and they need­ed to set up a sys­tem that could han­dle pro­teins as much as ten times as large as the ones most screens han­dle.

Un­der the new deal, Mer­ck has es­sen­tial­ly li­censed one of the fac­tors Foghorn has just be­gun test­ing, buy­ing ex­clu­siv­i­ty on any po­ten­tial drugs that emerge to tar­get it. In­ter­nal­ly, mean­while, Gottschalk said that af­ter years build­ing their sys­tems, the com­pa­ny is prepar­ing to soon bring a few of its 10 pre­clin­i­cal and un­named pro­grams in­to the clin­ic for sev­er­al ge­net­i­cal­ly-de­fined can­cers that cur­rent­ly have few good treat­ment op­tions.

“I think this bi­ol­o­gy has been un­ex­plored and un­ex­ploit­ed as drug, and I think the time is right,” Gottschalk said.

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.

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.

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.

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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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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Ryan Watts, Denali CEO

Bio­gen hands De­nali $1B-plus in cash, $1B-plus in mile­stones to part­ner on late-stage Parkin­son’s drug

Biogen is handing over more than a billion dollars cash to partner with the up-and-coming neurosciences crew at Denali on a new therapy for Parkinson’s. And the big biotech is ready to pile on more than a billion dollars more in milestones — if the alliance is a success.

For Biogen $BIIB, the move on Denali’s small molecule inhibitors of LRRK2 puts them in line to collaborate on a late-stage program for DNL151, which is scheduled to start next year.

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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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Vi­da Ven­tures co-leads Dyne's $115M megaround for next-gen oli­go ther­a­pies aimed square­ly at mus­cles

Dyne Therapeutics started out last April with a modest $50 million to mine targeted muscle disease therapies from its in-house conjugate technology. The biotech has now convinced more investors that it’s got gems on its hands, closing $115 million in fresh financing to push its next-gen oligonucleotide drugs into the clinic.

Vida Ventures and Surveyor Capital led the round, joined by a group of other new backers including Wellington Management Company, Logos Capital and Franklin Templeton.