Rest­less Seat­tle Ge­net­ics snaps up a piv­otal-stage can­cer drug with $614M Cas­ca­di­an buy­out pact

Clay Sie­gall

Af­ter get­ting snubbed last year on a ma­jor col­lab­o­ra­tion with Im­munomedics, Seat­tle Ge­net­ics $SGEN CEO Clay Sie­gall has bounced back with a $614 mil­lion deal to ac­quire crosstown biotech Cas­ca­di­an Ther­a­peu­tics $CASC, now in a piv­otal Phase II with a new breast can­cer ther­a­py.

Cas­ca­di­an stock, which closed yes­ter­day at $5.90, im­me­di­ate­ly soared 68% for $9.90 in pre-mar­ket trad­ing.

You may re­mem­ber this com­pa­ny bet­ter un­der its old name, On­cothyre­on, af­ter it ex­e­cut­ed a se­ries of painful mis­steps — Stimu­vax, for ex­am­ple, one of sev­er­al can­cer vac­cine duds — that made a new name and a new CEO in Scott My­ers log­i­cal.

Cas­ca­di­an CEO Scott My­ers

Un­der My­ers, the biotech has been mak­ing fast progress with tu­ca­tinib — for­mer­ly known as ONT-380 in the pre-makeover days. It’s a HER2 in­hibitor that has been matched up with Her­ceptin and Xelo­da in com­bat­ting treat­ment-re­sis­tant breast can­cer. The pill is in­tend­ed to get through the blood-brain bar­ri­er to help some des­per­ate­ly ill pa­tients.

In a Phase Ib tri­al, the triplet scored a me­di­an pro­gres­sion-free sur­vival rate of 7.8 months, an over­all re­sponse rate of 61% and a me­di­an du­ra­tion of re­sponse of 10 months.

With that da­ta in hand, My­ers went back to the FDA and got them to agree to let Cas­ca­di­an in­crease en­roll­ment in the mid-stage study to 480 and make it a reg­is­tra­tional tri­al in the process. The tri­al got un­der­way in the US and Cana­da, then start­ed adding sites in Eu­rope, Aus­tralia and Is­rael.

Now Sie­gall is step­ping in to scoop it up, bag­ging one of the few oth­er biotechs to be based in Seat­tle. And he has plans for the Cas­ca­di­an pro­gram that ex­tend far past the first in­di­ca­tion.

Says Sie­gall:

Tu­ca­tinib would com­ple­ment our ex­ist­ing pipeline of tar­get­ed can­cer ther­a­pies, pro­vide a third late-stage op­por­tu­ni­ty for a com­mer­cial prod­uct in sol­id tu­mors and ex­pand our glob­al ef­forts in breast can­cer. It al­so lever­ages our broad ex­per­tise and re­sources to ad­vance and ex­pand the tu­ca­tinib pro­gram for pa­tients. Be­yond breast can­cer, we be­lieve there may be op­por­tu­ni­ties for tu­ca­tinib in oth­er tu­mor types, such as HER2-pos­i­tive metasta­t­ic col­orec­tal can­cer. Cas­ca­di­an’s pipeline al­so in­cludes a pre­clin­i­cal im­muno-on­col­o­gy agent. We look for­ward to wel­com­ing the team at Cas­ca­di­an Ther­a­peu­tics and con­tin­u­ing the mo­men­tum of the tu­ca­tinib de­vel­op­ment pro­gram.

Right on the heels of the an­nounce­ment Seat­tle Ge­net­ics said it would push through a $550 mil­lion of­fer­ing to help pay for the deal. And Cas­ca­di­an ac­knowl­edges in an SEC fil­ing that in the event the deal falls though for cer­tain rea­sons, it will have to hand over $17 mil­lion to Seat­tle Ge­net­ics.

Sie­gall has had plen­ty of ups and downs over the past year at Seat­tle Ge­net­ics, which has been steadi­ly push­ing its way to block­buster sta­tus for its fran­chise drug Ad­cetris, adding new in­di­ca­tions along the way. Their $2 bil­lion deal on Im­munomedics fell apart last spring, leav­ing Sie­gall rest­less­ly look­ing for new ways to ex­pand the pipeline.

It won’t go un­no­ticed that this is the lat­est in a string of M&A deals in the biotech sec­tor. Now that tax re­form is out of the way, Big Phar­ma has been step­ping up, with Sanofi an­nounc­ing two deals and Cel­gene buy­ing Juno. This new ac­qui­si­tion un­der­scores an ap­petite for as­sets that is like­ly to dri­ve ad­di­tion­al deals in 2018 af­ter a lengthy drought.

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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Pfizer, South San Francisco — Jeff Rumans for Endpoints News

UP­DAT­ED: Pfiz­er takes aim at a flag­ship fran­chise at Sanofi and Re­gen­eron — and scores a few di­rect hits

Count Pfizer in as a top player in the blockbuster game of JAK1 inhibitors.

Over the weekend the pharma giant posted some stellar Phase III efficacy data for their heavyweight contender abrocitinib in atopic dermatitis (eczema) that lines up ahead of a booming Dupixent (dupilumab), a blockbuster in the portfolios of Regeneron and Sanofi. And they put some real distance ahead of Eli Lilly’s trailing Olumiant, which made a delayed initial arrival on the market for rheumatoid arthritis after the FDA hobbled it with some additional hurdles on safety concerns.

JADE-MONO-1 scores well for Pfizer, teeing up what will be an intensely followed breakdown of the JADE MONO-2 data, which the pharma giant recently top-lined as “similar” to the first Phase III when tested against a placebo — a control group that has been easily outclassed by all the drugs in this market niche.

As of now, Pfizer looks to be equipped to run into the review stage — advantaged by a breakthrough therapy designation that is intended to speed up the regulatory process.

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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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