Saurabh Saha at Endpoints News' #BIO19

On the heels of $250M launch, Centes­sa barges ahead with an IPO to fu­el its 10-in-1 Medicxi pipeline

Francesco De Ru­ber­tis made no se­cret of IPO plans for Centes­sa, his 10-in-1 lega­cy play. Bare­ly two months lat­er, the S-1 is in.

Francesco De Ru­ber­tis

The hot-off-the-press fil­ing de­picts the same grand vi­sion that the long­time VC tout­ed when he did the rounds in Feb­ru­ary: Take the as­set-cen­tric mind­set that he’s been preach­ing at Medicxi over the years, and roll up a bunch of biotech up­starts, with un­re­lat­ed risk pro­files, in­to 1 phar­ma com­pa­ny that can car­ry on the de­vel­op­ment at scale.

They will be do­ing it with­out Mon­cef Slaoui, who was fea­tured promi­nent­ly in the ini­tial press re­lease as chief sci­en­tif­ic of­fi­cer and ad­vi­sor. Eject­ed from a promi­nent Glax­o­SmithK­line-af­fil­i­at­ed board seat and all biotech po­si­tions fol­low­ing a “sub­stan­ti­at­ed” case of sex­u­al ha­rass­ment (for which he apol­o­gized), the re­tired Op­er­a­tion Warp Speed chief was nowhere to be seen in the S-1.

Mon­cef Slaoui (AP)

In the doc­u­ment, Centes­sa — helmed by Saurabh Sa­ha, the for­mer glob­al head of trans­la­tion­al re­search at Bris­tol My­ers Squibb — spelled out the nit­ty grit­ty de­tails of fit­ting all the puz­zle pieces to­geth­er. As it turned out, it took 11 Medicxi sub­sidiaries to make Centes­sa (in­clud­ing 2 that even­tu­al­ly merged), and the man­age­ment teams at each one were promised their own in­cen­tiviza­tion arrange­ments for stay­ing on to steer the fleet.

The ini­tial ask for the Nas­daq de­but is $100 mil­lion, but giv­en the $250 mil­lion Se­ries A, you can al­most be cer­tain they’re eye­ing a much larg­er fig­ure than the in­creas­ing­ly un­re­li­able place­hold­er.

Not that Centes­sa is strapped for cash. Of­fi­cial­ly formed last Oc­to­ber, it’s on­ly burned through $3.1 mil­lion by the end of 2020. The deep-pock­et­ed in­vestor syn­di­cate fea­tures Gen­er­al At­lantic, Vi­da Ven­tures, Janus Hen­der­son In­vestors, Box­er Cap­i­tal, Cor­morant As­set Man­age­ment, T. Rowe Price, Ven­rock Health­care Cap­i­tal Part­ners, Welling­ton Man­age­ment Com­pa­ny, BVF Part­ners, EcoR1 Cap­i­tal, Franklin Tem­ple­ton, Lo­gos Cap­i­tal, Sam­sara Bio­Cap­i­tal and LifeSci Ven­ture Part­ners.

So why the rush? The com­pa­ny’s IPO dis­clo­sure sug­gests it was a key part of De Ru­ber­tis’ pitch to the biotech en­tre­pre­neurs as he con­vinced them to come on board.

Di­rect in­cen­tiviza­tion is achieved through two prin­ci­ple fi­nan­cial in­cen­tives: first, through each founder-sub­ject mat­ter ex­pert hav­ing a sig­nif­i­cant eq­ui­ty stake in Centes­sa and, there­by, com­pen­sat­ed com­men­su­rate­ly with the Com­pa­ny’s per­for­mance; sec­ond, they dis­pro­por­tion­ate­ly share in up­side through cer­tain agreed mile­stones pay­ment of a pre-agreed amount payable up­on de­fined events such as reg­u­la­to­ry ap­proval of an ap­plic­a­ble drug or the pay­ment of a pre-agreed per­cent­age of the net ag­gre­gate cash pro­ceeds from cer­tain strate­gic trans­ac­tions (in­clud­ing part­ner­ships / out-li­cens­ing agree­ments and/or a sale) con­cern­ing the rel­e­vant Centes­sa Sub­sidiary.

In to­tal, the mile­stone pay­ment for a giv­en sub­sidiary can add up to some­where in the “low eight fig­ure range,” to be di­vid­ed among the top ex­ecs and em­ploy­ees.

They in­clude In­ex­ia, a 3-year-old biotech whose as­sets were trans­ferred ear­li­er this year to Orex­ia, which was sim­i­lar­ly fo­cused on nar­colep­sy and now boasts of both oral and in­tranasal orex­in re­cep­tor ag­o­nists to di­rect­ly ad­dress the un­der­ly­ing pathol­o­gy of orex­in neu­ron loss, as well as oth­er neu­ro­log­i­cal dis­or­ders char­ac­ter­ized by ex­ces­sive day­time sleepi­ness.

Of the 16 pro­grams now in the Centes­sa pipeline, the four clin­i­cal-stage as­sets will re­ceive the largest chunk of cash from the IPO raise. That means fund­ing two Phase III stud­ies for Pal­la­dio’s kid­ney drug lix­i­vap­tan, Apcin­teX’s Ser­pin­PC for he­mo­phil­ia, Pe­gaOne’s an­ti-EGFR im­gatuzum­ab and Z Fac­tor’s ZF874 for al­pha-1-an­tit­rypsin de­fi­cien­cy.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

UP­DAT­ED: Boehringer nabs FDA's first in­ter­change­abil­i­ty des­ig­na­tion for its Hu­mi­ra com­peti­tor — but will it mat­ter?

The FDA late Friday awarded Boehringer Ingelheim the first interchangeability designation for its Humira biosimilar Cyltezo, meaning that when it launches in July 2023, pharmacists will be able to automatically substitute the Boehringer’s version for AbbVie’s mega-blockbuster without a doctor’s input.

The designation will likely give Boehringer, which first won approval for Cyltezo in 2017, the leg up on a crowded field of Humira competitors.

Bio­gen hit by ALS set­back with PhI­II fail­ure for tofersen — but fol­lows a fa­mil­iar strat­e­gy high­light­ing the pos­i­tive

Patients and analysts waiting to hear Sunday how Biogen’s SOD1-ALS drug tofersen fared in Phase III didn’t have to wait long for the top-line result they were all waiting for. The drug failed the primary endpoint on significantly improving the functional and neurologic decline of patients over 28 weeks as well as the extension period for continued observation.

In fact, there was very little difference in response.

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Scott Struthers, Crinetics CEO

Cri­net­ics spins out ra­dio­phar­ma ef­forts in­to a new com­pa­ny, high­light­ing the grow­ing field­'s al­lure

Largely known for its nonpeptide small molecule research, Crinetics has been keeping its radiopharma work comparatively under wraps. But that changed Monday afternoon as the California biotech spun out a new company focused solely on the burgeoning field.

Crinetics launched Radionetics after the closing bell Monday, the company announced, seeding the new entity with $30 million raised from 5AM Ventures and Frazier Healthcare Partners. Radionetics will start with its own radiopharma-centric platform and a pipeline of 10 programs aimed at solid tumors.

Two drug­mak­ers hit with PDU­FA date de­lays from FDA amid back­log of in­spec­tions

As the FDA is weighed down with more and more pandemic responsibilities, the agency is beginning to miss PDUFA dates with more frequency too. Two different companies on Monday said they received notices that the FDA has not completed their drug reviews on time.

The review of an NDA for Avadel Pharmaceuticals’ candidate treatment for narcolepsy is not coming this month, the company said, and the review of UCB’s BLA for bimekizumab, used to treat moderate to severe plaque psoriasis, will miss its target date as well.

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Reshma Kewalramani, Vertex CEO (YouTube)

Ver­tex gets much-need­ed win with ‘ex­tra­or­di­nary’ first pa­tient re­sults on po­ten­tial di­a­betes cure

Vertex said Monday that the first patient dosed with its cell therapy for type 1 diabetes saw their need for insulin injections vanish almost entirely, a key early step in the decades-long effort to develop a curative treatment for the chronic disease.

The patient, who had suffered five potentially life-threatening hypoglycemic — or low blood sugar — episodes in the year before the therapy, was injected with synthetic insulin-producing cells. After 90 days, the patient’s new cells produced insulin steadily and ramped up their insulin production after a meal like normal cells do, as measured by a standard biomarker for insulin production.

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Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; 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.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Jeffrey Nau, Oyster Point Pharma CEO

FDA OKs an in­haled ver­sion of smok­ing ces­sa­tion drug Chan­tix — for a com­mon eye dis­ease

Oyster Point Pharma now has its first FDA-approved product — Tyrvaya. And the biotech has taken a unique route to get there by using an old drug with a storied past.

The New Jersey biotech announced this morning that the FDA has approved their nasal spray product for dry eye disease on Friday — the first nasal spray to be approved for the disease. The product’s active ingredient is 0.03 mg of varenicline, also known as smoking cessation aid Chantix.