Rock­well's CEO re­fus­es to be fired, kick­ing up brawl with board that halts the com­pa­ny's stock

There’s an episode of Se­in­feld that ran in the late 90s in which George Costan­za tries — un­suc­cess­ful­ly — to break up with his girl­friend Mau­ra. “I refuse to give up on this re­la­tion­ship,” she says. “It’s like… launch­ing mis­siles from a sub­ma­rine. Both of us have to turn our keys.” When George urges her to “turn her key,” Mau­ra re­spect­ful­ly de­clines.

Robert Chioi­ni

The same sce­nario is play­ing out to­day at a mid-sized biotech just out­side of De­troit. Rock­well Med­ical’s board has vot­ed to fire its CEO Robert Chioi­ni. But the CEO won’t turn his key. He’s… un­fired him­self, al­leg­ing that Rock­well Med­ical’s board mem­bers may have vi­o­lat­ed fed­er­al se­cu­ri­ties laws by vot­ing him out. That’s be­cause the pur­pose of this par­tic­u­lar meet­ing was to dis­cuss al­le­ga­tions of breach­es of fidu­cia­ry du­ties, not to vote on fir­ing the CEO.

“As that ac­tion was not the pur­pose of the spe­cial meet­ing, the ter­mi­na­tion of the CEO, in the opin­ion of the non-con­flict­ed in­de­pen­dent di­rec­tors, was not ef­fec­tive,” writes Chioi­ni in a let­ter to share­hold­ers.

If that wasn’t enough, Rock­well Med­ical al­so fired its CFO Thomas Kle­ma, who they said was col­lud­ing with the CEO. But that’s OK, be­cause Chioi­ni al­so re­ject­ed that de­ci­sion, un­fir­ing Kle­ma short­ly af­ter via a let­ter to share­hold­ers.

“The chair­man of board is­sued a sec­ond con­flict­ing 8K this morn­ing,” Chioi­ni wrote. “There­in is ref­er­enced a board meet­ing in which it is as­sert­ed that the CFO, Thomas Kle­ma, was ter­mi­nat­ed. I have no in­for­ma­tion to sug­gest the gov­er­nance re­quire­ments to call such a meet­ing were fol­lowed. The same 8K states that the board cre­at­ed a Spe­cial Tran­si­tion Com­mit­tee com­prised of Ben­jamin Wolin, Lisa Coller­an, and John Coop­er, to pro­vide board-lev­el over­sight of the com­pa­ny’s strate­gic di­rec­tion and day-to-day op­er­a­tions dur­ing the com­pa­ny’s tran­si­tion. I have no in­for­ma­tion to sug­gest that the gov­er­nance re­quire­ments for the cre­ation of such a com­mit­tee were fol­lowed.”

This bizarre sto­ry is par­tic­u­lar­ly in­ter­est­ing in light of Chioi­ni’s salary — $850,000 an­nu­al­ly for the past three years, with to­tal com­pen­sa­tion top­ping $12 mil­lion. That’s pret­ty de­cent for a com­pa­ny that hasn’t scored any com­mer­cial sales for two prod­ucts it won FDA ap­proval for in 2014 and 2015, as not­ed by STAT colum­nist Adam Feuer­stein yes­ter­day.

The com­pa­ny’s stock $RMTI has been halt­ed due to the dra­ma.

Rock­well Med­ical’s sit­u­a­tion re­minds us of an­oth­er biotech duk­ing it out with its ex-CEO. Arc­turus Ther­a­peu­tics has been in a very pub­lic bat­tle with its for­mer chief Joe Payne, who’s been work­ing hard to un­do the work of its board. It will be in­ter­est­ing to see if these ex-CEOs can el­bow their way back in­to board rooms in the com­ing months.

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Novavax site in Gaithersburg, MD. Novavax

Beef­ing up its new gene ther­a­py unit, Catal­ent inks $18M deal to snap up No­vavax fa­cil­i­ties

Catal­ent’s hunt for rapid growth on the gene ther­a­py front — ce­ment­ed with a $1.2 bil­lion ac­qui­si­tion of Paragon Bio­sciences two months ago — has led them to the vac­cine mak­ers at No­vavax.

With an $18 mil­lion pay­ment, Paragon is tak­ing over two No­vavax sites in Gaithers­burg, MD, in­clud­ing more than 100 of the em­ploy­ees al­ready work­ing there. That’s in ad­di­tion to a sig­nif­i­cant re­duc­tion in op­er­at­ing costs, says the com­pa­ny, as No­vavax shifts to re­ly on Paragon for GMP ma­te­ri­als in clin­i­cal tri­als and, even­tu­al­ly, com­mer­cial sup­ply of their prod­ucts.

Zo­genix plans quick re­turn to the FDA with their spurned ap­pli­ca­tion on Dravet syn­drome drug — shares spike

Zo­genix shares are claw­ing back some of the val­ue they lost 2 months ago af­ter the FDA hit the biotech with a refuse-to-file no­tice on their ex­per­i­men­tal ther­a­py for Dravet syn­drome. 

Com­pa­ny ex­ecs said this morn­ing that they worked out reg­u­la­tors’  is­sues with the ap­pli­ca­tion for Fin­tepla, which cen­tered on a pair of big prob­lems: the ab­sence of non-clin­i­cal stud­ies need­ed to al­low as­sess­ment of the chron­ic ad­min­is­tra­tion of fen­flu­ramine and the in­clu­sion of an in­cor­rect ver­sion of a clin­i­cal dataset. Now they plan to re­sub­mit in Q3 af­ter get­ting off the hook on both scores — which trig­gered a sigh of re­lief among in­vestors.

Turned back at the FDA, Im­muno­Gen is ax­ing 220 staffers, sell­ing pro­grams and hun­ker­ing down for a new PhI­II gam­ble

After being stymied by FDA regulators who were unconvinced by ImmunoGen’s $IMGN desperation shot at an accelerated OK based on a secondary endpoint, the struggling biotech is slashing its workforce, shuttering R&D projects and looking for buyers to pick up some of its experimental cancer assets as it goes back into a new Phase III with the lead drug.

We found out last month that the FDA had batted back their case for an accelerated approval of their antibody-drug conjugate mirvetuximab soravtansine, which had earlier failed a Phase III study for ovarian cancer. Now the other shoe is dropping.

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Bridge­Bio takes crown for biggest biotech IPO of 2019, as fel­low uni­corn Adap­tive rais­es of­fer­ing size and price

Bridge­Bio Phar­ma and Adap­tive Biotech­nolo­gies have not just up­sized IPO of­fer­ings — the pair of uni­corns have al­so raised their of­fer­ing prices above the range, haul­ing in a com­bined $648.5 mil­lion.

Neil Ku­mar’s Bridge­Bio Phar­ma, found­ed in 2015, has a sta­ble of com­pa­nies fo­cused on dis­eases that are dri­ven by de­fects in a sin­gle gene — en­com­pass­ing der­ma­tol­ogy, car­di­ol­o­gy, neu­rol­o­gy, en­docrinol­o­gy, re­nal dis­ease, and oph­thal­mol­o­gy — and can­cers with clear ge­net­ic dri­vers. The start­up mill birthed a pletho­ra of firms such as Ei­dos, Navire, QED Ther­a­peu­tics and Pelle­Pharm, which func­tion as its sub­sidiaries.

As­traZeneca chal­lenges Roche on front­line SCLC af­ter seiz­ing an in­ter­im win — and Mer­ck may not be far be­hind

The crowded playing field in the PD-1/L1 marketing game is about to get a little more complex.

This morning AstraZeneca reported that its CASPIAN study delivered a hit in an interim readout for their PD-L1 Imfinzi combined with etoposide and platinum-based chemotherapy options for frontline cases of small cell lung cancer, a tough target which has already knocked back Bristol-Myers’ shot in second-line cases. The positive data  — which we won’t see before they roll it out at an upcoming scientific conference — give AstraZeneca excellent odds of a quick vault to challenging Roche’s Tecentriq-chemo combo, approved 3 months ago for frontline SCLC in a landmark advance.

“This is the first trial offering the flexibility of combining immunotherapy with different platinum-based regimens in small cell lung cancer, expanding treatment options,” noted AstraZeneca cancer R&D chief José Baselga in a statement.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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