No­var­tis’ CAR-T chief Azam is leav­ing, but phar­ma gi­ant de­nies any ‘re­treat’ is un­der­way


No­var­tis re­spond­ed to a re­port in End­points News this morn­ing which out­lines the com­pa­ny’s de­ci­sion to purge most of the ex­ec­u­tive team in­volved in its pi­o­neer­ing cell and gene ther­a­py unit. Ac­cord­ing to the com­pa­ny, the de­ci­sion to cut up to 120 staffers as it re­de­ployed most of the 400 staffers back in­to its on­col­o­gy di­vi­sion does not sig­ni­fy any kind of a “re­treat.”

No­var­tis is still on track to nab the first FDA OK for a CAR-T to treat pe­di­atric acute lym­phoblas­tic leukemia, as­serts a com­pa­ny state­ment. In ad­di­tion, the com­pa­ny said that Us­man “Oz” Azam, the glob­al chief for this unit, has de­cid­ed to leave the com­pa­ny, while oth­er team ex­ecs in­volved in the cut­back still have a chance to land new jobs at the phar­ma gi­ant.

Ear­li­er this week End­points broke the sto­ry that No­var­tis is dis­band­ing the unit, which had been charged with de­vel­op­ing No­var­tis’s CAR-T pipeline, backed with con­sid­er­able hoopla two years ago in a cov­er sto­ry on CEO Joe Jimenez in Forbes.

This morn­ing, we fol­lowed up with a new re­port af­ter gain­ing ac­cess to the full memo that Azam had writ­ten. In it, he not­ed:

Un­for­tu­nate­ly a num­ber of col­leagues will be im­pact­ed by this change as many po­si­tions are be­ing elim­i­nat­ed. Im­pact­ed US-based as­so­ciates are be­ing no­ti­fied in meet­ings to­day. As­so­ci­ates based in Basel will learn more about their in­di­vid­ual cir­cum­stances on Thurs­day. The ma­jor­i­ty of the CG­TU Lead­er­ship Team mem­bers, who are among the best I have worked with, are al­so im­pact­ed.

The com­pa­ny’s re­sponse, though, is not like­ly to change the grow­ing per­cep­tion that the com­pa­ny is pulling back from the field just as the first CAR-T drugs are be­ing prepped for the FDA. Kite is now the wide­ly rec­og­nized leader af­ter a re­cent set­back at Juno, with plans to hus­tle an ap­pli­ca­tion to the FDA lat­er this year. And a num­ber of oth­er com­pa­nies are in the hunt to fol­low up with new drugs of their own.

Here’s the full re­sponse:

No­var­tis is seek­ing to clar­i­fy mis­in­for­ma­tion in the lat­est End­points re­port on the re-in­te­gra­tion of the Cell & Gene Ther­a­pies Unit (CG­TU) in­to the broad­er No­var­tis or­ga­ni­za­tion.

Con­trary to your head­line that we are “re­treat­ing from CAR-T,” our com­mit­ment to CAR-T and CRISPR tech­nolo­gies re­mains strong.  As we have pre­vi­ous­ly stat­ed, CTL019 is on track to be filed with the FDA ear­ly next year and with the EMA lat­er in 2017.  In fact, we ex­pect CTL019 will be the first chimeric anti­gen re­cep­tor T-cell (CAR T) ther­a­py to be ap­proved for pe­di­atric acute lym­phoblas­tic leukemia.

Dr. Us­man Azam along with his lead­er­ship team helped to de­sign the en­tire re-in­te­gra­tion plan. Ac­tions like re-in­te­gra­tion in­to oth­er parts of busi­ness­es can cause re­dun­dan­cies in roles, e.g. HR, fi­nance, le­gal, and that is why some peo­ple will leave our or­ga­ni­za­tion.  Dr. Azam de­cid­ed that as part of the re-in­te­gra­tion he would like to use this tran­si­tion to look at new op­por­tu­ni­ties out­side of the com­pa­ny. The CG­TU lead­er­ship team, along with ap­prox­i­mate­ly 120 oth­er as­so­ciates who will be im­pact­ed, have the op­por­tu­ni­ty to stay at No­var­tis if there is a role that is avail­able or suit­able for them.  It is im­por­tant to note that most of the CG­TU em­ploy­ees will be re­de­ployed to oth­er parts of the com­pa­ny.

At No­var­tis, we are trans­form­ing the com­pa­ny to be more fo­cused with a less-com­plex, more ag­ile struc­ture. While the CG­TU struc­ture was crit­i­cal to ramp up our ca­pa­bil­i­ties in cer­tain ar­eas like man­u­fac­tur­ing, clin­i­cal tri­als and com­mer­cial­iza­tion for a com­plete­ly new way of treat­ing can­cer, now that the com­pa­ny has re-or­ga­nized un­der a new op­er­at­ing mod­el, the re-in­te­gra­tion of CG­TU is the log­i­cal next step in our evo­lu­tion.

The No­var­tis en­ter­prise has all of the ca­pa­bil­i­ties we need to ef­fi­cient­ly re-in­te­grate CG­TU in­to the broad­er or­ga­ni­za­tion: lead­er­ship in on­col­o­gy and hema­tol­ogy specif­i­cal­ly, a glob­al com­mer­cial and de­vel­op­ment foot­print, a strong en­ter­prise man­u­fac­tur­ing or­ga­ni­za­tion, as well as sup­port func­tions to en­able a suc­cess­ful tran­si­tion.

No­var­tis is proud that we have played a lead­er­ship role in ad­vanc­ing the sci­en­tif­ic con­cept of CAR-T to the point where this com­plex way of treat­ing can­cer can be­come a re­al­i­ty for pa­tients. We look for­ward to con­tin­u­ing to ad­vance the sci­ence and our ca­pa­bil­i­ties in this ex­cit­ing area of med­i­cine.

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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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.

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.

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.