Reimag­in­ing med­i­cine? No­var­tis wraps phar­ma’s first big glob­al pot deal

In a wa­ter­shed mo­ment for med­ical cannabis ad­vo­cates in the Unit­ed States, Swiss gi­ant No­var­tis’ $NVS San­doz AG unit has tied up with Cana­di­an med­ical cannabis pro­duc­er Tilray, mark­ing the first big en­dorse­ment of the con­tro­ver­sial plant by a large, multi­na­tion­al phar­ma­ceu­ti­cal com­pa­ny.

The deal ex­em­pli­fies chang­ing at­ti­tudes in the US, where more Amer­i­cans live in states that have le­gal­ized the sale of med­ical and/or recre­ation­al cannabis than in an­ti-cannabis ju­ris­dic­tions. Tilray, which sup­plies cannabis flower and ex­tract prod­ucts to pa­tients, physi­cians, health­care fa­cil­i­ties and re­searchers in 12 coun­tries, has an ex­ist­ing al­liance with San­doz Cana­da.

Un­der the so-called frame­work agree­ment, San­doz AG may sup­port Tilray in com­mer­cial­iz­ing and brand­ing the Nanaimo, British Co­lum­bia-based com­pa­ny’s non-smok­able/non-com­bustible prod­ucts; the Cana­di­an pot pro­duc­er may sup­ply and/or li­cense such prod­ucts to and from San­doz AG; and sig­nif­i­cant­ly, the two may col­lab­o­rate in de­vel­op­ing such prod­ucts.

“The (ex­pand­ed) part­ner­ship al­so helps le­git­imize cannabis in in­ter­na­tion­al mar­kets, which could im­pact preva­lence with­in ex­ist­ing mar­kets as well as help in­flu­ence coun­tries con­sid­er­ing med­ical cannabis le­gal­iza­tion,” Cowen’s Vivien Az­er wrote in a note.

The land­mark FDA ap­proval of GW Phar­ma’s $GW­PH cannabis-de­rived med­i­cine Epid­i­olex ear­li­er this year paved the way for a pletho­ra of small and mid-sized drug de­vel­op­ers — in­clud­ing In­sys Ther­a­peu­tics $IN­SY, Zyner­ba $ZYNE, In­Med Phar­ma, Kan­nal­ife and Ax­im Biotech $AX­IM — that are hop­ing to hitch their wag­on to the cannabis star, ei­ther by de­vel­op­ing syn­thet­ic or nat­ur­al cannabis-de­rived ther­a­peu­tics or de­vis­ing nov­el de­liv­ery mech­a­nisms for its ab­sorp­tion.

Two big deals over the course of this year have al­so un­der­scored the lu­cra­tive po­ten­tial of the plant, with al­co­hol gi­ant Con­stel­la­tion Brands $STZ spend­ing a mam­moth $4 bil­lion to se­cure a 38% stake in Cana­di­an cannabis com­pa­ny Canopy Growth $CGC, and cig­a­rette mak­er Al­tria $MO fork­ing out $1.8 bil­lion to take a 45% stake in an­oth­er Cana­di­an pot com­pa­ny Cronos $CRON.

Marc Feld­mann

Mean­while, the US fed­er­al gov­ern­ment con­tin­ues to con­sid­er cannabis as a sched­ule 1 sub­stance — on par with LSD and hero­in — with no med­ical val­ue, in­fu­ri­at­ing re­searchers who con­tend the clas­si­fi­ca­tion has dra­mat­i­cal­ly slowed the sci­en­tif­ic and med­ical in­ves­ti­ga­tion of the plant. Nev­er­the­less with House De­moc­rats tak­ing back seats this No­vem­ber, pro-mar­i­jua­na leg­is­la­tion is ex­pect­ed to heat up.

“There is am­ple ev­i­dence that the cannabis plant has nu­mer­ous use­ful ap­pli­ca­tions in med­i­cine and the law is ob­so­lete,” said Marc Feld­mann, an Ox­ford pro­fes­sor and im­mu­nol­o­gist whose work  led to the dis­cov­ery and sub­se­quent com­mer­cial­iza­tion of the world’s largest sell­ing drug class, an­ti-TNF. “This clas­si­fi­ca­tion is chang­ing around the world – it has al­ready hap­pened in Cana­da and will hap­pen in more states in the US in due course,” he said in a pre­vi­ous in­ter­view with End­points News. Feld­mann al­so serves as CEO of CannBioRex, a Cana­da-based com­pa­ny that is de­vel­op­ing syn­thet­ic cannabis-de­rived med­i­cines.

Vlad Coric (Biohaven)

In an­oth­er dis­ap­point­ment for in­vestors, FDA slaps down Bio­haven’s re­vised ver­sion of an old ALS drug

Biohaven is at risk of making a habit of disappointing its investors. 

Late Friday the biotech $BHVN reported that the FDA had rejected its application for riluzole, an old drug that they had made over into a sublingual formulation that dissolves under the tongue. According to Biohaven, the FDA had a problem with the active ingredient used in a bioequivalence study back in 2017, which they got from the Canadian drugmaker Apotex.

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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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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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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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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H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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