Porges: Gilead’s hep C bash is wind­ing down and it doesn’t have a cure for the hang­over

Ge­of­frey Porges, Leerink

Leerink an­a­lyst Ge­of­frey Porges has of­ten been will­ing to pre­scribe harsh med­i­cine to big bio­phar­ma play­ers that need to wake up fast. This morn­ing, he took a hard poke at a slum­ber­ing Gilead, which he be­lieves is in for a wicked fall as its mon­u­men­tal hep C fran­chise faces rapid­ly drop­ping pa­tient num­bers.

Porges down­grad­ed the stock $GILD – which dropped 1.5% this morn­ing – af­ter he turned open­ly bear­ish on hep C rev­enue fore­casts. The an­a­lyst writes:

Put sim­ply HCV is turn­ing out to be a “flash-in-the-pan” mar­ket, just as it has been in past cy­cles, and de­spite the large pool of “treat­able” pa­tients, and we be­lieve the mar­ket vol­ume could po­ten­tial­ly de­cline all the way from last year’s ~270,000 pa­tients treat­ed in the US (to­tal mar­ket) to the long-term av­er­age vol­ume of 60-70,000 treat­ment pre­sen­ta­tions per year with a sim­i­lar or low­er num­ber in Eu­rope.

Once it be­came clear that Gilead was quick­ly mov­ing past its peak on hep C, a num­ber of an­a­lysts quick­ly be­gan to stoke ex­pec­ta­tions for a ma­jor M&A deal. Af­ter all, Gilead made the big score in cur­ing he­pati­tis C by buy­ing Phar­mas­set in a jaw-drop­ping $11 bil­lion buy­out. And it’s sit­ting on a moun­tain of cash. But de­spite some deal­mak­ing and a big li­cens­ing pact with Gala­pa­gos, it hasn’t done near­ly as much as many had hoped to see.

You can in­clude Porges in that group, with a vengeance. He de­scribes Gilead’s ex­ec­u­tive team as stand­ing in the way of an on­rush­ing stam­pede of bears.

As to the com­pa­ny’s much her­ald­ed busi­ness de­vel­op­ment strat­e­gy and op­por­tu­ni­ties, we fear that the com­pa­ny has be­come par­a­lyzed by its size and good for­tune, and the un­cer­tain­ty about its out­look and its ca­pa­bil­i­ties. Its com­mu­ni­ca­tions about its strat­e­gy and in­tent have been con­fus­ing, and the com­pa­ny ap­pears un­will­ing to match the mar­ket’s price for high qual­i­ty as­sets, or to in­vest the cash nec­es­sary to build a pipeline, and a fu­ture, for a com­pa­ny of its size. When deals do come (which they un­doubt­ed­ly will), we fear that there may be a re­sound­ing cho­rus of dis­ap­point­ment, based on be­ing too lit­tle and too late, to off­set the $5bn in rev­enue ero­sion we now fore­cast be­tween 2015 and 2020. In our opin­ion Gilead needs to be con­tem­plat­ing the type of large trans­ac­tions that di­ver­si­fy it away from these an­tivi­ral fran­chis­es, and of­fer the prospect of sub­stan­tial in­cre­men­tal rev­enue, and a re­turn to growth, in a rea­son­ably fore­see­able fu­ture. While the in­ter­nal pipeline has some promise, it seems to us to be no more than a drop in the buck­et for a com­pa­ny of its present size and val­u­a­tion.

Of course, Porges’ ad­vice has al­so been ig­nored. He want­ed Am­gen to spit up, but that nev­er hap­pened. Some­thing has to hap­pen at Gilead, though. And Porges leads us to be­lieve that it had bet­ter be quick and im­pres­sive.

Paul Hudson, Sanofi CEO (Getty Images)

Sanofi CEO Paul Hud­son has $23B burn­ing a hole in his pock­et. And here are some hints on how he plans to spend that

Sanofi has reaped $11.1 billion after selling off a big chunk of its Regeneron stock at $515 a share. And now everyone on the M&A side of the business is focused on how CEO Paul Hudson plans to spend it.

After getting stung in France for some awkward politicking — suggesting the US was in the front of the line for Sanofi’s vaccines given American financial support for their work, versus little help from European powers — Hudson now has the much more popular task of managing a major cash cache to pull off something in the order of a big bolt-on. Or two.

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The Advance Clinical leadership team: CEO Yvonne Lungershausen, Sandrien Louwaars - Director Business Development Operations, Gabriel Kremmidiotis - Chief Scientific Officer, Ben Edwards - Chief Strategy Officer

How Aus­tralia De­liv­ers Rapid Start-up and 43.5% Re­bate for Ear­ly Phase On­col­o­gy Tri­als

About Avance Clinical

Avance Clinical is an Australian owned Contract Research Organisation that has been providing high-quality clinical research services to the local and international drug development industry for 20 years. They specialise in working with biotech companies to execute Phase 1 and Phase 2 clinical trials to deliver high-quality outcomes fit for global regulatory standards.

As oncology sponsors look internationally to speed-up trials after unprecedented COVID-19 suspensions and delays, Australia, which has led the world in minimizing the pandemic’s impact, stands out as an attractive destination for early phase trials. This in combination with the streamlined regulatory system and the financial benefits including a very favourable exchange rate and the R & D cash rebate makes Australia the perfect location for accelerating biotech clinical programs.

Pablo Legorreta, founder and CEO of Royalty Pharma AG, speaks at the annual Milken Institute Global Conference in Beverly Hills, California (Patrick T. Fallon/Bloomberg via Getty Images)

Cap­i­tal­iz­ing Pablo: The world’s biggest drug roy­al­ty buy­er is go­ing pub­lic. And the low-key CEO di­vulges a few se­crets along the way

Pablo Legorreta is one of the most influential players in biopharma you likely never heard of.

Over the last 24 years, Legorreta’s Royalty Pharma group has become, by its own reckoning, the biggest buyer of drug royalties in the world. The CEO and founder has bought up a stake in a lengthy list of the world’s biggest drug franchises, spending $18 billion in the process — $2.2 billion last year alone. And he’s become one of the best-paid execs in the industry, reaping $28 million from the cash flow last year while reserving 20% of the cash flow, less expenses, for himself.

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Dan O'Day, Gilead CEO (Andrew Harnik, AP Images)

UP­DAT­ED: Gilead leas­es part­ner rights to TIG­IT, PD-1 in a $2B deal with Ar­cus. Now comes the hard part

Gilead CEO Dan O’Day has brokered his way to a PD-1 and lined up a front row seat in the TIGIT arena, inking a deal worth close to $2 billion to align the big biotech closely with Terry Rosen’s Arcus. And $375 million of that comes upfront, with cash for the buy-in plus equity, along with $400 million for R&D and $1.22 billion in reserve to cover opt-in payments and milestones..

Hotly rumored for weeks, the 2 players have formalized a 10-year alliance that starts with rights to the PD-1, zimberelimab. O’Day also has first dibs on TIGIT and 2 other leading programs, agreeing to an opt-in fee ranging from $200 million to $275 million on each. There’s $500 million in potential TIGIT milestones on US regulatory events — likely capped by an approval — if Gilead partners on it and the stars align on the data. And there’s another $150 million opt-in payments for the rest of the Arcus pipeline.

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Bryan Roberts, Venrock

Ven­rock sur­vey shows grow­ing recog­ni­tion of coro­n­avirus toll, wan­ing con­fi­dence in ar­rival of vac­cines and treat­ments

When Venrock partner Bryan Roberts went to check the results from their annual survey of healthcare leaders, what he found was an imprint of the pandemic’s slow arrival in America.

The venture firm had sent their form out to hundreds of insurance and health tech executives, investors, officials and academics on February 24 and gave them two weeks to fill it out. No Americans had died at that point but the coronavirus had become enough of a global crisis that they included two questions about the virus, including “Total U.S. deaths in 2020 from the novel coronavirus will be:”.

Roger Perlmutter, Merck R&D chief (YouTube)

UP­DAT­ED: Backed by BAR­DA, Mer­ck jumps in­to Covid-19: buy­ing out a vac­cine, part­ner­ing on an­oth­er and adding an­tivi­ral to the mix

Merck execs are making a triple play in a sudden leap into the R&D campaign against Covid-19. And they have more BARDA cash backing them up on the move.

Tuesday morning the pharma giant simultaneously announced plans to buy an Austrian biotech that has been working on a preclinical vaccine candidate, added a collaboration on another vaccine with the nonprofit IAVI and inked a deal with Ridgeback Biotherapeutics on an early-stage antiviral.

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David Hoey (Vaxxas)

In for the long vac­cine game, Mer­ck buys in­to patch de­liv­ery tech with pan­dem­ic po­ten­tial

When Merck dived into the R&D fray for a Covid-19 vaccine earlier this week, execs made it clear that they’re not necessarily looking to be first — with CEO Ken Frazier throwing cold water on the hotly-discussed 12- to 18-month timelines. But when it does emerge from behind, the pharma giant clearly expects to play a significant part.

Part of that will depend on next-generation delivery technology that reshapes the world’s imagination of a vaccine.

No­var­tis jumps in­to Covid-19 vac­cine hunt, as Big Phar­ma and big biotech com­mit to bil­lions of dos­es

After spending most of the pandemic on the sidelines, Novartis is offering its aid in the race to develop a Covid-19 vaccine.

AveXis, the Swiss pharma’s gene therapy subsidiary, has agreed to manufacture the vaccine being developed by Massachusetts Eye and Ear and Massachusetts General Hospital. The biotech will begin manufacturing this month, while the vaccine undergoes further preclinical testing. They’ve agreed to provide the vaccine for free for clinical trials beginning in the second half of 2020, but have not disclosed financials for after.

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De­nali un­veils new way of cross­ing blood brain bar­ri­er as the big neu­ro­science bet en­ters its clin­i­cal years

Five years ago, as much of pharma began leaving neuroscience, three big-name scientists from Genentech and some A-list investors, including ARCH and Flagship, made a $217 million bet that new genetic insights and a reliance on biomarkers could bring them success. They called it Denali Therapeutics.

Still, Denali faced the problem that neuroscience developers have faced for decades: How do you get a large molecule across the blood-brain barrier, a natural defense evolved precisely to keep them out? Enzyme replacement therapy, for instance, would be a great candidate to treat several neurological disorders, but enzymes can’t cross the barrier.