No­var­tis bags Mesoblast's stem cell ther­a­py for ARDS, in­clud­ing in Covid-19, in a deal worth up to $1.2B+

No­var­tis has li­censed a new stem cell ther­a­py from Mesoblast, just weeks af­ter the FDA re­ject­ed the Aus­tralian biotech’s pitch for an ap­proval on a sep­a­rate in­di­ca­tion.

The Swiss phar­ma an­nounced Thurs­day af­ter­noon it is part­ner­ing with Mesoblast $MESO to de­vel­op remestem­cel-L for the treat­ment of acute res­pi­ra­to­ry dis­tress syn­drome, in­clud­ing ARDS re­lat­ed to Covid-19. As part of the deal, No­var­tis will shell out $25 mil­lion in up­front cash and take a $25 mil­lion stake in the biotech, while of­fer­ing up to $1.255 bil­lion in po­ten­tial mile­stone pay­ments.

Mesoblast in­vestors em­braced the news, send­ing shares up 11% on the Aus­tralian stock ex­change Fri­day. The com­pa­ny’s stock was al­so up rough­ly 17% on the Nas­daq be­fore Fri­day’s open­ing bell.

The mile­stone pay­ments are split as such, per Mesoblast: $505 mil­lion will be avail­able pre-com­mer­cial­iza­tion, with an ad­di­tion­al $750 mil­lion set aside for hit­ting cer­tain sales tar­gets and dou­ble-dig­it roy­al­ties.

Remestem­cel-L, or Ry­on­cil, acts as an an­ti-in­flam­ma­to­ry and con­sists of cul­ture-ex­pand­ed mes­enchy­mal stem cells de­rived from a bone mar­row donor. Cur­rent­ly, the drug is be­ing eval­u­at­ed in a Phase III study for Covid-19-re­lat­ed ARDS with 300 pa­tients, and the first cut of da­ta is ex­pect­ed in ear­ly 2021.

Should that out­come prove suc­cess­ful, No­var­tis will launch a Phase III in non-Covid ARDS af­ter the deal clos­es. The com­pa­nies high­light­ed No­var­tis’ abil­i­ty to rapid­ly scale up cell-based ther­a­pies from the clin­ic to the com­mer­cial phase as a mo­ti­va­tor for the col­lab­o­ra­tion.

The drug had been ex­am­ined in a small com­pas­sion­ate use pro­gram for Covid-19 ARDS back in March, which in­clud­ed 12 pa­tients re­quir­ing ven­ti­la­tors. Remestem­cel-L treat­ment demon­strat­ed an 83% sur­vival rate in that pro­gram and was the ba­sis for the on­go­ing Phase III.

Thurs­day’s deal comes less than two months af­ter the FDA is­sued a CRL for remestem­cel-L in Mesoblast’s pe­di­atric acute graft-ver­sus-host dis­ease pro­gram. The re­jec­tion, which de­nied the com­pa­ny an ac­cel­er­at­ed ap­proval, came af­ter an ODAC ad­comm in Au­gust vot­ed 9 to 1 in fa­vor of ap­proval as pan­el mem­bers strug­gled to en­vi­sion what a piv­otal tri­al might look like.

Dur­ing both the ad­comm and in their CRL, reg­u­la­tors took is­sue with Mesoblast’s study de­sign giv­en that the com­pa­ny sub­mit­ted its ap­pli­ca­tion on the ba­sis of one, sin­gle-arm and open-la­bel tri­al. In the study, Remestem­cel-L demon­strat­ed a sta­tis­ti­cal­ly sig­nif­i­cant ben­e­fit in its pri­ma­ry end­point against the his­tor­i­cal con­trol rate.

But be­cause many par­ents and pe­di­a­tri­cians are re­luc­tant to risk putting chil­dren in­to the place­bo arm of a ran­dom­ized study, Mesoblast ar­gued that key opin­ion lead­ers said an ad­di­tion­al study was not fea­si­ble. The ve­to came de­spite the FDA ap­prov­ing a sim­i­lar drug — In­cyte and No­var­tis’ Jakafi — based on one sin­gle-arm tri­al, some­thing for which ODAC mem­bers chas­tised the FDA.

Ear­li­er this week, Mesoblast met with the agency for its Type A meet­ing, and the com­pa­ny re­port­ed in its third quar­ter earn­ings that it does not ex­pect the FDA to re­verse its de­ci­sion for ac­cel­er­at­ed ap­proval. Mesoblast is still wait­ing to re­ceive fi­nal meet­ing min­utes to know whether that’s in­deed the case. The CRL set back po­ten­tial ap­proval in GvHD from 2021 to 2024, per an­a­lysts.

M&A: a crit­i­cal dri­ver for sus­tain­able top-line growth in health­care

2021 saw a record $600B in healthcare M&A activity. In 2022, there is an anticipated slowdown in activity, however, M&A prospects remain strong in the medium to long-term. What are future growth drivers for the healthcare sector? Where might we see innovations that drive M&A? RBC’s Andrew Callaway, Global Head, Healthcare Investment Banking discusses with Vito Sperduto, Global Co-Head, M&A.

15 LGBTQ lead­ers in bio­phar­ma; Paul Stof­fels’ Gala­pa­gos re­vamp; As­traZeneca catch­es up in AT­TR; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

A return to in-person conferences also marks a return to on-the-ground reporting. My colleagues Beth Synder Bulik and Nicole DeFeudis were on-site at Cannes Lions, bringing live coverage of pharma’s presence at the ad festival — accompanied by photos from Clara Bui, our virtual producer, that bring you right to the scene. You can find a recap (and links to all the stories) below.

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Abortion-rights protesters regroup and protest following Supreme Court's decision to overturn Roe v. Wade. (AP Photo/Gemunu Amarasinghe)

Fol­low­ing SCO­TUS de­ci­sion to over­turn abor­tion pro­tec­tions, AG Gar­land says states can't ban the abor­tion pill

Following the Supreme Court’s historic decision on Friday to overturn Americans’ constitutional right to an abortion after almost 50 years, Attorney General Merrick Garland sought to somewhat reassure women that states will not be able to ban the prescription drug sometimes used for abortions.

Following the decision, the New England Journal of Medicine also published an editorial strongly condemning the reversal, saying it “serves American families poorly, putting their health, safety, finances, and futures at risk.”

AstraZeneca's new Evusheld direct to consumer campaign aims to reach more immunocompromised patients.

As­traZeneca de­buts first con­sumer cam­paign for its Covid-19 pro­phy­lac­tic Evusheld — and a first for EUA drugs

AstraZeneca’s first consumer ad for Evusheld is also a first for drugs that have been granted emergency use authorizations during the pandemic.

The first DTC ad for a medicine under emergency approval, the Evusheld campaign launching this week aims to raise awareness among immunocompromised patients — and spur more use.

Evusheld nabbed emergency authorization in December, however, despite millions of immunocompromised people looking for a solution and now more widespread availability of the drug.

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invoX Pharma CEO Ben Toogood (L) and F-star CEO Eliot Forster

F-star bought out in $161M all-cash deal as Hong Kong's Sino Bio­pharm looks to­ward in­ter­na­tion­al ex­pan­sion

After more than a decade and a half of charting its own course, F-star Therapeutics will now settle under a new umbrella company.

The UK biotech will be acquired by invoX Pharma, a subsidiary of Hong Kong’s Sino Biopharm, in a roughly $161 million all-cash deal, the companies announced Thursday morning. F-star’s buyout will value its shares $FSTX at $7.12 apiece, nearly an 80% premium above Wednesday’s closing price.

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GSK says its drug for chron­ic hep B could ‘lead to a func­tion­al cure’ — but will it be alone or in com­bi­na­tion?

GSK, newly branded and soon-to-be demerged, shared interim results from its Phase II trial on its chronic hepatitis B treatment, one that it says has the “potential to lead to a functional cure.”

At a presentation at the EASL International Liver Congress, GSK shared that in around 450 patients who received its hep B drug bepirovirsen for 24 weeks, just under 30% had hepatitis B surface antigen and viral DNA levels that were too low to detect.

De­spite a slow start to the year for deals, PwC pre­dicts a flur­ry of ac­tiv­i­ty com­ing up

Despite whispers of a busy year for M&A, deal activity in the pharma space is actually down 30% on a semi-annualized basis, according to PwC’s latest report on deal activity. But don’t rule out larger deals in the second half of the year, the consultants said.

PwC pharmaceutical and life sciences consulting solutions leader Glenn Hunzinger expects to see Big Pharma companies picking up earlier stage companies to try and fill pipeline gaps ahead of a slew of big patent cliffs. Though a bear market continues to maul the biotech sector, Hunzinger said recent deals indicate that pharma companies are still paying above current trading prices.

Joe Wiley, Amryt Pharma CEO

Am­ryt Phar­ma sub­mits a for­mal dis­pute res­o­lu­tion to the FDA over re­ject­ed skin dis­ease drug

The story of Amryt Pharma’s candidate for the genetic skin condition epidermolysis bullosa, or EB, will soon enter another chapter.

After the Irish drugmaker’s candidate, dubbed Oleogel-S10 and marketed as Filsuvez, was handed a CRL earlier this year, the company announced in a press release that it plans to submit a formal dispute resolution request for the company’s NDA for Oleogel-S10.

Kelly Martin, Radius Health CEO

VC firms take os­teo­poro­sis drug­mak­er Ra­dius Health pri­vate for al­most $900M

After attacks from activist investors and disappointing returns on share prices, Radius Health has now agreed to new ownership, a direction resulting in leaving the Nasdaq.

Radius Health, a biotech out of Massachusetts with one approved product in its arsenal, announced Thursday morning that it agreed to be acquired by two VC firms: Gurnet Point Capital and Patient Square Capital. The deal, worth around $890 million, will include debt assumption and the payout of $1 CVR per share for investors. And on top of that, OrbiMed is providing debt financing.