No­var­tis sac­ri­fices its top at­tor­ney in an at­tempt to quell clam­or over $1.2M in Co­hen pay­ments — while ex-CEO Jimenez strug­gles to ex­plain

BioReg­num — The view from John Car­roll


Faced with a grow­ing cri­sis over its $1.2 mil­lion in pay­ments to Pres­i­dent Don­ald Trump’s per­son­al at­tor­ney Michael Co­hen, No­var­tis an­nounced ear­ly Wednes­day that the com­pa­ny’s top lawyer has abrupt­ly re­signed in hopes of bring­ing the whole tawdry af­fair to an end.

“Al­though the con­tract (with Co­hen) was legal­ly in or­der, it was an er­ror,” said Fe­lix Ehrat, group gen­er­al coun­sel of No­var­tis, in a state­ment. “As a co-sig­na­to­ry with our for­mer CEO, I take per­son­al re­spon­si­bil­i­ty to bring the pub­lic de­bate on this mat­ter to an end.”

The chances of that hap­pen­ing, though, are ze­ro. If any­thing, this move will on­ly height­en pres­sure on No­var­tis to ful­ly ex­plain why it agreed to pay $1.2 mil­lion to an at­tor­ney whose on­ly rel­e­vant at­trac­tion to the phar­ma gi­ant was his close per­son­al tie to the pres­i­dent. That re­mains the bot­tom line af­ter ex-CEO Joe Jimenez gave an in­ter­view to Forbes’ Matthew Her­p­er, where he strug­gled to ex­plain why the com­pa­ny hired Co­hen.

“If we were the ex­perts on pol­i­cy, he was the ex­pert on the way that they think, to­geth­er as a team it could be a way for us to bet­ter nav­i­gate what was go­ing to be a pret­ty sticky Af­ford­able Care Act Re­peal-and-Re­place,” Jimenez told Her­p­er in the in­ter­view.

Jimenez al­so took “full re­spon­si­bil­i­ty,” say­ing that his re­place­ment, Vas Narasimhan, was not in­volved. And he re­peat­ed­ly em­pha­sized the un­cer­tain­ty around Trump’s elec­tion for the move to gain some clar­i­ty.

“He was one of the very few num­ber of peo­ple who knew peo­ple in the ad­min­is­tra­tion,” Jimenez not­ed.

Ehrat’s sud­den ex­it — as well as the Jimenez in­ter­view — un­der­score how deeply the com­pa­ny has been bat­tered by the con­tro­ver­sy and the grow­ing list of ques­tions Narasimhan still faces. Com­pa­ny ex­ecs had pri­vate­ly been pin­ning the blame on Jimenez, who stepped down from the CEO’s job at the end of Jan­u­ary. Adding the gen­er­al coun­sel to the list of re­spon­si­ble play­ers — and send­ing him through the ex­its — does noth­ing to ad­dress the many ques­tions the com­pa­ny faces , while clum­sy at­tempts to apol­o­gize and re­fo­cus on the busi­ness un­der­score its in­abil­i­ty to man­age events.

The 41-year-old Narasimhan — who has nev­er ex­plained when he first heard about the Co­hen deal — is still fac­ing a drum­beat of omi­nous news.

We now hear that Switzer­land’s Of­fice of the At­tor­ney Gen­er­al has been dis­cussing the pos­si­bil­i­ty of launch­ing their own probe in­to the pay­ments, though the of­fi­cials there say that no for­mal probe is now un­der­way. And two promi­nent De­mo­c­ra­t­ic sen­a­tors, Eliz­a­beth War­ren and Richard Blu­men­thal, joined Ron Wyden and Pat­ty Mur­ray in scold­ing the com­pa­ny and ask­ing some point­ed ques­tions about ex­act­ly why it paid Co­hen that much and what it got in re­turn.

“Giv­en these on­go­ing mat­ters, the un­usu­al se­ries of pay­ments.by No­var­tis to the Pres­i­dent’s per­son­al at­tor­ney raise ob­vi­ous ques­tions about cor­rup­tion and whether No­var­tis and the Trump Ad­min­is­tra­tion were en­gaged in a pay-for-play op­er­a­tion,” War­ren and Blu­men­thal wrote, ahead of their list of queries.

Joe Jimenez

While the din of dis­ap­proval rose around the Basel head­quar­ters, Narasimhan him­self re­port­ed­ly took to the phone to tell thou­sands of the com­pa­ny’s man­agers that No­var­tis needs to clean up its act. Ac­cord­ing to a re­port from Bloomberg, Narasimhan told his man­agers by phone that the com­pa­ny had to move to re­think its re­la­tion­ship with lob­by­ists and re­gain the pub­lic’s trust.

Com­pa­ny ex­ecs knew back in No­vem­ber that they could face a hue and cry, when Robert Mueller’s team came in to ask ques­tions about the re­la­tion­ship. Co­hen him­self has been at the cen­ter of a me­dia cir­cus sur­round­ing the rev­e­la­tion that he had paid porn star Stormy Daniels $130,000 to keep qui­et about an al­leged af­fair with Trump — writ­ing a check from the same shell com­pa­ny that No­var­tis paid in­to. But No­var­tis nev­er dis­closed any­thing about the fed­er­al in­ves­ti­ga­tion in pub­lic fil­ings.

Ex­act­ly how Narasimhan plans to re­spond while re­main­ing hun­kered down in­side the com­pa­ny’s walls, though, re­mains to be seen. Does the CEO — now stout­ly de­fend­ed by a pha­lanx of me­dia con­tacts who in­sist the com­pa­ny will co­op­er­ate with all in­ves­ti­ga­tions — sub­mit to a Q&A with a friend­ly or per­haps high­ly rep­utable me­dia out­let? Does he start to pub­licly ad­dress the per­sis­tent ques­tions sur­round­ing No­var­tis pay­ments? Does some­one else get the ax?

No­var­tis rec­og­nizes it faces a cri­sis. But for now, there’s still no clear plan to deal with it in any kind of pub­lic way.


Im­age: Vas Narasimhan. GET­TY IM­AGES

Hal Barron and Rick Klausner (GSK, Lyell)

Ex­clu­sive: GSK’s Hal Bar­ron al­lies with Rick Klaus­ner’s $600M cell ther­a­py start­up, look­ing to break new ground blitz­ing sol­id tu­mors

LONDON — Chances are, you’ve heard little or nothing about Rick Klausner’s startup Lyell. But that ends now.

Klausner, the former head of the National Cancer Institute, former executive director for global health at the Gates Foundation, co-founder at Juno and one of the leaders in the booming cell therapy field, has brought together one of the most prominent teams of scientists tackling cell therapy 2.0 — highlighted by a quest to bridge a daunting tech gap that separates some profound advances in blood cancers with solid tumors. And today he’s officially adding Hal Barron and GlaxoSmithKline as a major league collaborator which is pitching in a large portion of the $600 million he’s raised in the past year to make that vision a reality.

“We’ve being staying stealth,” Klausner tells me, then adding with a chuckle: “and going back to stealth after this.”

“Cell therapy has a lot of challenges,” notes Barron, the R&D chief at GSK, ticking off the resistance put up by solid tumors to cell therapies, the vein-to-vein time involved in taking immune cells out of patients, engineering them to attack cancer cells, and getting them back in, and more. “Over the years Rick and I talked about how it would be wonderful to take that on as a mission.”

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First place fin­ish: Eli Lil­ly just moved to fran­chise leader with their sec­ond mi­graine drug OK in 1 year

In a rare twist for Eli Lilly’s historically slow-moving R&D group, the pharma giant has seized bragging rights to a first-in-class new drug approval. And all signs point to an aggressive marketing followup as they look to outclass some major franchise rivals hobbled by internal dissension.

The FDA came through with an OK for lasmiditan on Friday evening, branding it as Reyvow and lining it up — once a substance classification comes through from the DEA — for a major market release. The oral drug binds to 5-HT1F receptors and is designed to stop an acute migraine after it starts. That makes it a complementary therapy to their CGRP drug Emgality, which has a statistically significant impact on preventing attacks.

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Allogene HQ Open House on September 17, 2019 in South San Francisco. (Jeff Rumans, Endpoints News)

The next 10 years: Where is biotech head­ed?

The last 10 years have seen a revolution in drug development. Timelines have shortened, particularly in oncology. Regulators have opened up. Investment has skyrocketed. China became a player. Biotechs have multiplied as gene and cell therapy has exploded — offering major new advances in the way diseases are treated, and sometimes cured.

So where are we headed from here? I journeyed out to San Francisco in September to discuss the answer to that question at Allogene’s open house. If the last 10 years have been an eye-opener, what does the next decade hold in store?

Patrick Mahaffy, Getty Images

Court green-lights Clo­vis case af­ter de­tail­ing ev­i­dence the board ‘ig­nored red flags’ on false safe­ty and ef­fi­ca­cy da­ta

Clovis investors have cleared a major hurdle in their long-running case against the board of directors, with a Delaware court making a rare finding that they had a strong enough case against the board to proceed with the action.

In a detailed ruling at the beginning of the month that’s been getting careful scrutiny at firms specializing in biotech and corporate governance, the Delaware Court of Chancery found that the attorneys for the investors had made a careful case that the board — a collection of experts that includes high-profile biotech entrepreneurs, a Harvard professor and well-known investigator as well as Clovis CEO Patrick Mahaffy — repeatedly ignored obvious warnings that Mahaffy’s executive crew was touting inflated, unconfirmed data for their big drug Roci. Serious safety issues were also reportedly overlooked while the company continued a fundraising campaign that brought in more than a half-billion dollars. And that leaves the board open to claims related to their role in the fiasco.

The bottom line:

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Bill Gates backs Gink­go Biowork­s' $350M raise to fu­el the buzzy syn­thet­ic bi­ol­o­gy 'rev­o­lu­tion'

If you want to understand Ginkgo Bioworks, the name should suffice: Bioworks, a spin off “ironworks,” that old industrial linchpin devoted to leveraging scale as a wellspring for vast new industries capable of remaking society. Ginkgo wants to be the ironworks for the revolution it’s heralded with as much fanfare as they can, playing off of one of the buzziest technologies in biotech.

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UCB bags a ri­val to Soliris in $2.1B buy­out deal — but will an in­creas­ing­ly vig­i­lant FTC sign off?

UCB is buying out Ra Pharma $RARX, announcing an acquisition deal that rings up at $48 a share, or $2.1 billion net of cash, and puts them toe-to-toe with Alexion on a clinical showdown.

Ra shares closed at $22.70 on Wednesday.

There’s a small pipeline in play at Ra, but UCB is going for the lead drug — a C5 inhibitor called zilucoplan in Phase III for myasthenia gravis (MG) looking to play rival to Alexion’s Soliris. Soliris has the market advantage, though, with a much earlier approval in MG in late 2017 that UCB feels confident in challenging.

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A new play­er is tak­ing the field in a push for a he­mo­phil­ia A gene ther­a­py, and it’s a big one

BioMarin, the execs at Spark (and buyer-to-be Roche) as well as the Sangamo/Pfizer team have a new rival striding onto the hemophilia block. And it’s a big one.

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Stuck with a PhI­II gene ther­a­py fail­ure at 96 weeks, Gen­Sight prefers the up­beat as­sess­ment

Two years after treatment, the best thing that GenSight Biologics $SIGHT can say about their gene therapy for vision-destroying cases of Leber Hereditary Optic Neuropathy is that it’s just a bit better than a placebo — just maybe because one treatment can cover both eyes.

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George Scangos / Credit: Cornell University

ARCH, Soft­Bank-backed Vir Biotech­nol­o­gy un­der­whelms with $143 mil­lion IPO

George Scangos went back to Wall Street, and came back 700 million pennies short.

Scangos’ vaunted startup Vir Biotechnology raised $143 million in an IPO they hoped would earn $150 million. Shares were priced at $20, the low-end of the $20-$22 target.

Launched with backing from ARCH Venture’s Robert Nelsen, Masayoshi Son’s SoftBank Vision Fund, and the Bill & Melinda Gates Foundation, the infectious disease startup was one of a new wave of well-resourced biotechs that emerged with deep enough coffers to pursue a full R&D line rather than slowly build their case by picking off a single lead program.