No­var­tis CEO Vas Narasimhan cuts loose an old an­chor and sets sail with $8.7B AveX­is buy­out

Vas Narasimhan is start­ing his tenure as CEO of No­var­tis $NVS with a bold move on the gene ther­a­py front.

The phar­ma gi­ant has struck a deal to buy AveX­is for $8.7 bil­lion in cash, scoop­ing up the biotech as it looks to par­lay im­pres­sive ear­ly-stage re­sults for their gene ther­a­py AVXS-101 for spinal mus­cu­lar at­ro­phy in­to a swift FDA ap­proval.

The deal reg­is­ters at $218 a share $AVXS, al­most dou­ble AveX­is’ Fri­day close. And it un­der­scores a few key points about Narasimhan’s man­age­ment style.

First, the phar­ma gi­ant chief is clear­ly will­ing to jump out of its cau­tious sweet spot of $2 bil­lion to $5 bil­lion for bolt-ons, brush­ing off their well tai­lored dis­taste for pay­ing big pre­mi­ums to grab a front run­ner in drug de­vel­op­ment. And Narasimhan, at 41, is serv­ing no­tice that af­ter win­ning an his­toric CAR-T ap­proval, he in­tends to keep No­var­tis out front on cell and gene ther­a­py, come what may.

No­var­tis is play­ing R&D like a big biotech, will­ing to in­vest bil­lions in new tech­nolo­gies to leap out ahead of ri­vals. And that could prove in­flu­en­tial as ma­jor play­ers like GSK and Eli Lil­ly try to blaze new R&D paths of their own in Big Phar­ma. Biotech M&A has been rolling along this year in the wake of deals for Kite and Juno, ri­vals to No­var­tis, as well as a like­ly bid for Shire by Take­da.

No­var­tis’ spot­light­ed its in­ten­tions in lead­ing the gene ther­a­py field with a re­cent $170 mil­lion deal to li­cense ex-US rights to Spark’s Lux­tur­na, which won a land­mark FDA ap­proval for treat­ing RPE65 mu­ta­tion-as­so­ci­at­ed cas­es of reti­nal dy­s­tro­phy.

“The pro­posed ac­qui­si­tion of AveX­is of­fers an ex­tra­or­di­nary op­por­tu­ni­ty to trans­form the care of SMA…,” said Narasimhan in a state­ment. “The ac­qui­si­tion would al­so ac­cel­er­ate our strat­e­gy to pur­sue high-ef­fi­ca­cy, first-in-class ther­a­pies and broad­en our lead­er­ship in neu­ro­science. We would gain with the team at AveX­is an­oth­er gene ther­a­py plat­form, in ad­di­tion to our CAR-T plat­form for can­cer, to ad­vance a grow­ing pipeline of gene ther­a­pies across ther­a­peu­tic ar­eas.”

In­vestors liked the sound of it. No­var­tis shares surged 0.75% in ear­ly morn­ing trad­ing.

Last No­vem­ber AveX­is riv­et­ed the biotech world with da­ta from a small study on SMA. Of 15 pa­tients in Phase I, all were able to reach 20 months with­out the need for con­stant res­pi­ra­to­ry sup­port, or dy­ing. And many achieved im­prove­ments in mo­tor symp­toms, speak­ing to the po­ten­tial — though still un­proven — of this as a once-and-done ther­a­py for a rare but dire ail­ment.

AveX­is CEO Sean Nolan

AveX­is went on to forge plans to sit down with reg­u­la­tors in Q2 for a pre-BLA meet­ing as they ham­mered out a strat­e­gy to gain the fastest pos­si­ble mar­ket­ing ap­proval for their ther­a­py, which could blow Spin­raza, a new and ex­pen­sive SMA ther­a­py from Bio­gen and Io­n­is, out of the wa­ter. That dis­ap­point­ed some back­ers who had ex­pect­ed the biotech to start a rolling sub­mis­sion at the be­gin­ning of Jan­u­ary with the FDA sig­nal­ing its in­ter­est in snap ap­provals for rare dis­eases.

No­var­tis says that the com­pa­ny ex­pects their deal will close mid-year, set­ting up a BLA fil­ing in the sec­ond half and a mar­ket launch in 2019.

That’s al­so good news for Re­genxbio $RGNX, which ex­pand­ed its tech li­cens­ing deal with AveX­is a few months ago to in­clude an ex­clu­sive li­cense cov­er­ing SMA. Re­genxbio gets $140 mil­lion in cash and near-term fees, $120 mil­lion in mile­stones and roy­al­ties. That was al­so worth a 23% spike in its share price.

If AveX­is de­cides not to go through with it, they would need to pay a $284 mil­lion breakup fee, with No­var­tis on the hook for $437 mil­lion for a re­verse ter­mi­na­tion fine. And some an­a­lysts think that this could still turn in­to a bid­ding war. Notes Jef­feries’ Biren Amin:

There’s been spec­u­la­tion that Bio­gen may need to eval­u­ate Avex­is at some point and may be this will be a trig­ger that forces it to do so. Bio­gen has in­di­cat­ed it has a SMA gene ther­a­py in pre­clin­i­cal de­vel­op­ment, and plans to move in­to the clin­ic in 2018. Ad­di­tion­al­ly, we’ve al­ways felt Roche could have an in­ter­est in AVXS giv­en its de­vel­op­ment pro­gram with RG7916 (an­oth­er oral ad­min­is­tered SMN2 splic­ing mod­i­fi­er) and the fact that AVXS Chair­man Dan Welch was the CEO of In­ter­mune when Roche pur­chased In­ter­mune in 2014 for $8.3B.

For now, though, it’s full speed ahead.

“The com­mit­ment, dri­ve and ex­per­tise of the en­tire AveX­is team has cre­at­ed sig­nif­i­cant stock­hold­er val­ue, and we are pleased that No­var­tis rec­og­nizes that val­ue in the po­ten­tial of AVXS-101, our first in class man­u­fac­tur­ing ca­pa­bil­i­ties and our gene ther­a­py pipeline, all of which serve to trans­form the lives of peo­ple dev­as­tat­ed by rare and life threat­en­ing neu­ro­log­i­cal dis­eases such as SMA, Rett syn­drome and ge­net­ic ALS,” said Sean Nolan, the CEO of AveX­is. “With world­wide reach and ex­ten­sive re­sources, No­var­tis should ex­pe­dite our shared vi­sion of bring­ing gene ther­a­py to these pa­tient com­mu­ni­ties across the globe as quick­ly and safe­ly as pos­si­ble.”


Im­age: Vas Narasimhan. NO­VAR­TIS

Con­quer­ing a silent killer: HDV and Eiger Bio­Phar­ma­ceu­ti­cals

Hepatitis delta, also known as hepatitis D, is a liver infection caused by the hepatitis delta virus (HDV) that results in the most severe form of human viral hepatitis for which there is no approved therapy.

HDV is a single-stranded, circular RNA virus that requires the envelope protein (HBsAg) of the hepatitis B virus (HBV) for its own assembly. As a result, hepatitis delta virus (HDV) infection occurs only as a co-infection in individuals infected with HBV. However, HDV/HBV co-infections lead to more serious liver disease than HBV infection alone. HDV is associated with faster progression to liver fibrosis (progressing to cirrhosis in about 80% of individuals in 5-10 years), increased risk of liver cancer, and early decompensated cirrhosis and liver failure.
HDV is the most severe form of viral hepatitis with no approved treatment.
Approved nucleos(t)ide treatments for HBV only suppress HBV DNA, do not appreciably impact HBsAg and have no impact on HDV. Investigational agents in development for HBV target multiple new mechanisms. Aspirations are high, but a functional cure for HBV has not been achieved nor is one anticipated in the forseeable future. Without clearance of HBsAg, anti-HBV investigational treatments are not expected to impact the deadly course of HDV infection anytime soon.

Am­gen chops 172 more staffers in R&D, op­er­a­tions and sales amid neu­ro­science ex­it, rev­enue down­turn

Neuroscience wasn’t the only unit that’s being hit by a reorganization underway at Amgen. As well as axing 149 employees in its Cambridge office, the company has disclosed that 172 others nationwide, including some from its Thousand Oaks, CA headquarters, are being let go.

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Ahead of strate­gic up­date, new Sanofi CEO mulls op­tions for con­sumer health­care arm — re­ports

Big pharma has made moves to sharpen its focus on developing new medicines, while slow-growing consumer health divisions fall by the wayside. Looks like another large drugmaker is considering a similar move. On Thursday, reports citing sources indicated that Sanofi is reportedly mulling a joint venture, sale, or a public listing of its consumer health arm.

The French group is in discussions for options that could value the division at $30 billion, Bloomberg and Reuters reported, citing sources familiar with the matter.

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The triple crown in biotech: An all-or-noth­ing bet on an FDA ap­proval of 3 drugs over 16 months starts to­day

Bristol-Myers Squibb’s $74 billion Celgene deal closed as expected Wednesday evening. And now a new clock has begun to tick down for Celgene shareholders who came away from the deal with CVRs — contingent value rights — worth $9 or nothing. Those CVRs start trading today as $BMYRT.

The new deadline they have is the end of March 2021, a little more than 16 months from now, when Bristol-Myers will need to gain approvals on 3 late-stage drugs it’s picking up in the buyout: Ozanimod and liso-cel (JCAR017) are due up at the end of 2020, with bb2121 deadlined at the end of Q1 in 2021.

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Genap­sys fi­nal­ly un­veils vaunt­ed se­quencer, but can it dent Il­lu­mi­na?

Hesaam Esfandyarpour holds what looks like a mini-cooler up to the computer screen in his California office.

Esfandyarpour is in his late-30s, with crows feet creeping up against a youthful face. He wears a gray polo and the device in his hand — with its hard plastic-looking shell, blue-and-white pattern, and a white plastic paddle resembling a handle jutting out the front — might contain diced strawberries and peanut-butter sandwiches to meet mom and the kids at a SoCal park. Instead, Esfandyarpour tells me it’s going to change medicine and biopharma research.

Brii Bio backs in­fec­tious dis­ease start­up while ink­ing deal for its lead TB drug, dou­bling down on an­tibi­otics

Almost two years after leaving GSK to launch Brii Bio with a whopping $260 million in funding, Zhi Hong is seeing the trans-Pacific infectious disease specialist he set out to build take shape.

“Our pipeline is coming together,” he told Endpoints News, with 12 partnered assets plus some internal programs.

As its latest partner, AN2 Therapeutics, comes into the limelight for the first time with a $12 million seed round, so is Brii’s plans in the antibiotics space. Brii has obtained China rights to AN2’s antibacterial targeting mycobacterium tuberculosis for multi-drug resistant TB, which it says is in the clinical stage.

UP­DAT­ED: Make that 2 ap­proved RNAi drugs at Al­ny­lam af­ter the FDA of­fers a speedy OK on ul­tra-rare dis­ease drug

Seventeen years into the game, Alnylam’s pivot into commercial operations is picking up speed.
The bellwether biotech $ALNY has nabbed their second FDA OK for an RNAi drug, this time for givosiran, the only therapy now approved for acute hepatic porphyria. This second approval came months ahead of the February deadline — even after winning priority review following their ‘breakthrough’ title earlier.
AHP is an extremely rare disease, with some 3,000 patients in Europe and the US, not all diagnosed, and analysts have projected peak revenue of $600 million to $700 million a year. The drug will be sold as Givlaari.

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David Ricks. Eli Lilly

Eli Lil­ly touts $400M man­u­fac­tur­ing ex­pan­sion, 100 new jobs to much fan­fare in In­di­anapo­lis — even though it's been chop­ping staff

Eli Lilly is pouring in $400 million to beef up manufacturing facilities at its home base of Indianapolis. The investment, which was lauded by the city’s mayor, is expected to create 100 new jobs.

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No­var­tis, Bay­er, Long­wood back ge­nomics start­up to speed search for im­munother­a­py tar­gets

Nearly a century passed between the first proto-immunotherapy attempts in cancer — crude and obscure but nonetheless with some scientific basis — and Jim Allison’s first T cell paper. Thirty-plus years flipped between the discovery of CTLA-4 as an off-switch and the approval of Yervoy. Twenty-two rolled between PD-1’s isolation and Opdiva and Keytruda. 

Longwood co-founder Lea Hachigian is betting she can hasten that. It’s a bet on newly established single-cell genomic analysis tech and the ability to crunch endless troves of data at a rate few others can, and investors including Leaps by Bayer and Novartis Venture Fund just put $39 million behind it. They call it Immunitas.