Roche bags full con­trol of Foun­da­tion Med­i­cine in $2.4B fol­low-up buy­out

What­ev­er Foun­da­tion Med­i­cine has been do­ing since Roche threw its weight be­hind an R&D col­lab­o­ra­tion three years ago, both part­ners are lik­ing it. And now, Roche wants all of it, putting $2.4 bil­lion more on the ta­ble.

The val­u­a­tion of Cam­bridge, MA-based Foun­da­tion has grown quite a bit since Roche ac­quired a ma­jor­i­ty stake in Jan­u­ary 2015 at $50 a share — a hefty pre­mi­um then — with each share now cost­ing the Swiss phar­ma gi­ant $137. That’s 29% more than its clos­ing price on Mon­day. Roche’s as­sess­ment of the com­pa­ny val­ue: $5.3 bil­lion.

Daniel O’Day

With per­son­al­ized med­i­cine writ­ten all over it, this ac­qui­si­tion fol­lows that of Flat­iron, a tech start­up build­ing an elec­tron­ic health record sys­tem used by on­col­o­gists. There, Roche al­so bought a stake in the com­pa­ny and cul­ti­vat­ed a re­la­tion­ship be­fore swoop­ing in for a buy­out. And last De­cem­ber they swooped in to buy Igny­ta $RXDX for $1.7 bil­lion, putting the phar­ma gi­ant in di­rect com­pe­ti­tion with Loxo On­col­o­gy $LOXO, with its work in ROS1 and NTRK fu­sion-pos­i­tive tu­mors.

While Foun­da­tion Med­i­cine does have an FDA-ap­proved di­ag­nos­tic called Foun­da­tionOne CDx, Roche is choos­ing to high­light its broad­er po­ten­tial in com­pre­hen­sive ge­nom­ic pro­fil­ing of can­cers, which can both guide de­vel­op­ment of treat­ments and match pa­tients with the ap­pro­pri­ate ther­a­pies. Mean­while, Roche has carved out a place for it­self in di­ag­nos­tics, in­vest­ing 12% of its en­tire R&D bud­get on the area.

“We will pre­serve FMI’s au­ton­o­my while sup­port­ing them in ac­cel­er­at­ing their progress,” said Daniel O’Day, CEO of Roche Phar­ma­ceu­ti­cals and for­mer di­ag­nos­tics chief, in a state­ment.

It’s a big win for Foun­da­tion Med­i­cine ex­ecs, who now get to op­er­ate as a “sep­a­rate and au­tonomous” unit.

Troy Cox

“Join­ing forces with Roche as an in­de­pen­dent op­er­at­ing com­pa­ny al­lows Foun­da­tion Med­i­cine to con­tin­ue its col­lab­o­ra­tion with Roche, as well as our bio­phar­ma part­ners, to dri­ve ubiq­ui­tous ac­cess to CGP test­ing and in­no­v­a­tive da­ta ser­vices,” said Foun­da­tion Med­i­cine CEO Troy Cox.

The deal is ex­pect­ed to close in sec­ond half of 2018. Citi and Davis Polk & Ward­well are the fi­nan­cial ad­vis­ers and le­gal coun­sel to Roche, re­spec­tive­ly, while Gold­man Sachs and Good­win Proc­ter ad­vised and coun­seled for Foun­da­tion Med­i­cine.

UP­DAT­ED: Clay Sie­gall’s $614M wa­ger on tu­ca­tinib pays off with solid­ly pos­i­tive piv­otal da­ta and a date with the FDA

Back at the beginning of 2018, Clay Siegall snagged a cancer drug called tucatinib with a $614 million cash deal to buy Cascadian. It paid off today with a solid set of mid-stage data for HER2 positive breast cancer that will in turn serve as the pivotal win Siegall needs to seek an accelerated approval in the push for a new triplet therapy.

And if all the cards keep falling in its favor, they’ll move from 1 drug on the market to 3 in 2020, which is shaping up as a landmark year as Seattle Genetics prepares for its 23rd anniversary on July 15.

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UP­DAT­ED: The FDA sets a reg­u­la­to­ry speed record, pro­vid­ing a snap OK for Ver­tex's break­through triplet for cys­tic fi­bro­sis

The FDA has approved Vertex’s new triplet for cystic fibrosis at a record-setting speed.

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IM­brave150: Roche’s reg­u­la­to­ry crew plans a glob­al roll­out of Tecen­triq com­bo for liv­er can­cer as PhI­II scores a hit

Just weeks after Bristol-Myers Squibb defended its failed pivotal study pitting Opdivo against Nexavar in liver cancer, Roche says it’s beat the frontline challenge with a combination of their PD-L1 Tecentriq with Avastin. And now they’re rolling their regulatory teams in the US, Europe and China in search of a new approval — badly needed to boost a trailing franchise effort.
Given their breakthrough and Big Pharma status as well as the use of two approved drugs, FDA approval may well prove to be something of a formality. And the Chinese have been clear that they want new drugs for liver cancer, where lethal disease rates are particularly high.
Researchers at their big biotech sub, Genentech, say that the combo beat Bayer’s Nexavar on both progression-free survival as well as overall survival — the first advance in this field in more than a decade. We won’t get the breakdown in months of life gained, but it’s a big win for Roche, which has lagged far, far behind Keytruda and Opdivo, the dominant PD-1s that have captured the bulk of the checkpoint market so far.
Researchers recruited hepatocellular carcinoma — the most common form of liver cancer — patients for the IMbrave150 study who weren’t eligible for surgery ahead of any systemic treatment of the disease.
Roche has a fairly low bar to beat, with modest survival benefit for Nexavar, approved for this indication 12 years ago. But they also plan to offer a combo therapy that could have significantly less toxicity, offering patients a much easier treatment regimen.
Cowen’s Steven Scala recently sized up the importance of IMbrave150, noting:

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That $335M JV Bay­er set up on CRISPR/Cas9? They’re let­ting the biotech part­ner car­ry on

Bayer committed $300 million to set up a joint venture on CRISPR/Cas9 tech with CRISPR Therapeutics $CRSP. But they’re handing off control now to the smaller biotech while retaining a couple of opt-ins for programs nearing an IND.

Bayer $BAY made much of the fact that they were going all-in on gene editing when they did their deal 3 years ago with CRISPR Therapeutics, which pitched $35 million in on their end. This was the cornerstone of their plan to set up new JVs that could make some serious leap forwards in hot new R&D spaces. Now CRISPR will have full management control of Casebia as they pursue programs in hemophilia, ophthalmology and autoimmune diseases.
Samarth Kulkarni, the CEO at CRISPR, made it sound like a natural progression.

J&J's block­buster Ste­lara wins US ap­proval for ul­cer­a­tive col­i­tis

J&J’s Stelara, which is set to be in the top ten list of blockbusters come 2025, is now cleared by the FDA for use in ulcerative colitis (UC), an inflammatory disease of the large intestine.

The biologic targets interleukin (IL)-12 and IL-23 cytokines, which are known to play a key role in inflammatory and immune responses. Stelara, which generated about $4.7 billion in the first nine months of 2019, is a key player in the crowded marketplace of drugs to treat autoimmune disorders such as psoriasis, rheumatoid arthritis and Crohn’s disease. AbbVie’s star therapy, Humira, continues to dominate, despite its looming patent cliff in the United States, while others including J&J’s $JNJ own anti-IL23 Tremfya, Lilly’s $LLY anti-IL-17 Taltz and AbbVie’s $ABBV recently approved anti-IL-23 antibody Skyrizi carve out a slice of market share.

Drug com­pa­nies reach $260M set­tle­ment just ahead of opi­oid tri­al; Oys­ter Point set terms for $85M IPO

→ Hours before the first federal opioid trial was set to begin, three drug distributors and an opioid manufacturer agreed to a $260 million agreement settlement, the Wall Street Journal was the first to report. The deal — which will see McKesson, Cardinal Health and AmerisourceBergen pay $215 million to Summit and Cuyahoga counties, and Teva deal out $35 million in cash and addiction treatments — does not resolve the pending, nationwide litigation that may result in a settlement worth upwards of $40 billion. Negotiators in that case, brought by 2,300 tribes, counties and cities nationwide and led by several states’ attorneys general, worked through much of Friday without success. Josh Stein, the attorney general for North Carolina, said they were trying to put together a $48 billion deal.

GSK of­floads two vac­cines in $1.1B deal as it works to re­vive the pipeline

GlaxoSmithKline is leaving the deep dark woods and its viruses behind.

GSK has agreed to divest its vaccines for rabies, RabAvert, and tick-born encephalitis vaccine, Encepur, to Bavarian Nordic, part of the company’s broader efforts to narrow its pipeline and focus on oncology and immunology.

The deal is worth up to nearly $1.1 billion, with a $336 million upfront payment. GSK acquired the vaccines from Novartis as part of an exchange for their late-stage oncology programs in 2015 under former chief Sir Andrew Witty.

Pfiz­er gets some en­cour­ag­ing PhI­II news on a fran­chise sav­ior, but is a dos­ing ad­van­tage worth the $295M up­front?

Close to 3 years after Opko tried to defend itself as shares tumbled on the news that its long-acting growth hormone had failed to outperform a placebo, the Pfizer partner $PFE is back. And this time they’re pitching Phase III data that demonstrate their drug is non-inferior — or maybe a tad better — than their well-known but fading standard in the field.
The comparator drug here is Genotropin, which earned a marginal $142 million for Pfizer last year — down 9% from the year before. Approved 24 years ago, biosimilars are now in development that Pfizer would like to stay out in front of. The market leader here is Norditropin, a growth hormone from Novo Nordisk that uses the same basic ingredient as Genotropin, which the Danish company sells with a kid-friendly self-injectable pen. That would also present some big competition if the new therapy from Opko/Pfizer makes it to the market.
The new data, says researchers, underscore that a weekly injection of somatrogon performed as well or slightly better than Genotropin (somatropin) in young children with growth hormone deficiency. Investigators tracked height velocity at 10.12 cm/year, edging out the older drug’s 9.78 cm/year. That 0.33 difference may not prove compelling to payers, though, who have been known to overlook dosing advantages in favor of lower costs.
That message may have weighed on the stock reaction this morning, with a 30%-plus hike $OPK giving way to more marginal gains.
Back in late 2016, Opko had to defend itself against a devastating Phase III setback as their initial late-stage trial failed against a sugar pill. Opko later blamed that setback on outliers in the study, though it wasn’t able to expunge the failure.

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As­traZeneca's Farx­i­ga scores FDA nod to cut risk of hos­pi­tal­iza­tion for heart fail­ure in di­a­bet­ics

While the FDA recently spurned an application to allow AstraZeneca’s blockbuster drug Farxiga for type 1 diabetes that cannot be controlled by insulin, citing safety concerns — the US regulator has endorsed the use of the SGLT2 treatment to reduce the risk of hospitalisation for heart failure in patients with type-2 diabetes and established cardiovascular disease or multiple CV risk factors.