No­var­tis takes a $200M hit to write off a flop as ex­ecs spell out a cau­tious R&D strat­e­gy

With its top line locked in­to a hold­ing pat­tern as its sales teams strug­gle to ex­pand fran­chise rev­enue, No­var­tis has out­lined its near-term R&D strat­e­gy, tak­ing a $200 mil­lion hit to write off the dis­ap­point­ing heart drug sere­lax­in (RLX030) while look­ing be­yond a de­ci­sion lat­er in the year on its pi­o­neer­ing CAR-T drug as it shoots for new FDA fil­ings.

Joe Jimenez. No­var­tis

The phar­ma gi­ant said re­cent­ly that it has wrapped its ini­tial FDA ap­pli­ca­tion for CTL019. And in a new note out from Biren Amin the Jef­feries an­a­lyst pre­dicts that we’ll be see­ing the close­ly-watched fol­lowup da­ta from the JULI­ET study at the In­ter­na­tion­al Con­fer­ence on Ma­lig­nant Lym­phoma on June 14 in Lugano, Switzer­land.

Fol­low­ing a hoped-for ap­proval in CAR-T, No­var­tis re­vealed this morn­ing that its dis­cus­sions with reg­u­la­tors is en­cour­ag­ing the com­pa­ny to aim for a 2018 fil­ing for SEG101 (crizan­l­izum­ab) for sick­le cell pain crises af­ter it wraps the PK/PD com­pa­ra­bil­i­ty study to fi­nal man­u­fac­tur­ing process. Right along­side the phar­ma gi­ant’s R&D team will an­gle for an FDA ap­proval of BAF312 (sipon­i­mod) for re­laps­ing mul­ti­ple scle­ro­sis.

What you shouldn’t look for: Any big M&A pacts. Like a num­ber of its ma­jor league ri­vals, No­var­tis ex­ecs say that val­u­a­tions in biotech have reached a for­bid­ding high. No­var­tis CEO Joe Jimenez adds that the com­pa­ny’s BD team plans to move up­stream, to ear­li­er-stage as­sets and deals, as the com­pa­ny stays fo­cused on what you can get in a $2 bil­lion to $5 bil­lion bolt-on.

“The price of some of these as­sets has in­creased to the point that we don’t feel like we can cre­ate val­ue for No­var­tis share­hold­ers,’’ Chief Ex­ec­u­tive Of­fi­cer Joe Jimenez said on a con­fer­ence call Tues­day, ac­cord­ing to a re­port from Bloomberg.

Net in­come for No­var­tis slid 15% in the first quar­ter, which the com­pa­ny large­ly at­trib­uted to the $200 mil­lion charge on sere­lax­in. The write off for its one-time block­buster hope can’t come as any kind of sur­prise. A month ago No­var­tis said that its 4-year study of the heart drug flubbed the pri­ma­ry end­point, fail­ing to sig­nif­i­cant­ly cut the rate of car­dio­vas­cu­lar death or re­duce wors­en­ing heart fail­ure among pa­tients with acute heart fail­ure.

No­var­tis is left mak­ing slow progress with En­tresto, which has been grap­pling with wide­spread pay­er re­sis­tance. In the mean­time, its big flag­ship drug Gleevec is be­ing ham­mered by gener­ic com­pe­ti­tion.

No­var­tis gained an edge with the March ap­proval of Kisqali (ri­bo­ci­clib), a CDK 4/6 drug which looks like it will have to square off against Pfiz­er as well as Eli Lil­ly. And it re­worked its com­mer­cial­iza­tion pact with Am­gen on their late-stage mi­graine drug. But it’s al­so suf­fered oth­er set­backs in late-stage re­search, in­clud­ing the Phase III fail­ure last fall of Fo­vista for wet AMD, which has crimped its pipeline plans.

No­var­tis is in an awk­ward po­si­tion, un­will­ing or un­able to gam­ble big on new ef­forts and main­tain­ing a very care­ful ap­proach to the top line with­out a megablock­buster able to cap­ture grow­ing sales to fu­el its growth. The com­pa­ny is be­com­ing one of the most pre­dictable play­ers in Big Phar­ma, and that’s not nec­es­sar­i­ly a good thing.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.