Sanofi's Elias Zer­houni says his R&D group is ready to stand alone — but big M&A and part­ner­ships still loom large

Sev­en years ago, when then Sanofi CEO Chris Viehbach­er named for­mer NIH chief Elias Zer­houni as the French phar­ma gi­ant’s R&D chief, his new boss of­fered a big shout out for his role as an ear­ly ad­vis­er in the trans­for­ma­tion of Sanofi’s R&D group.

Zer­houni, he said, had been “cen­tral in im­ple­ment­ing what is now one of the most promis­ing R&D mod­els in health­care.”

Lat­er, Viehbach­er would tell me that he didn’t think any or­ga­ni­za­tion as big as Sanofi’s could be tru­ly in­no­v­a­tive. And Zer­houni would go on to re­ly large­ly on Sanofi’s close part­ner Re­gen­eron — as well as the Gen­zyme buy­out — to pro­vide the new drugs that the phar­ma gi­ant des­per­ate­ly need­ed. (And just look at what Sanofi part­ner Al­ny­lam ac­com­plished to­day.) Mis­steps on the can­cer side led to a re­struc­tur­ing in the US while en­trenched forces stub­born­ly re­sist­ed Viehbach­er’s ef­forts to pull off a ma­jor re­or­ga­ni­za­tion in Eu­rope. Then Viehbach­er was fired.

Chris Viehbach­er

Now Zer­houni in­sists that Sanofi’s in-house R&D group, long one of the worst lag­gards in Big Phar­ma, is ready to stand on its own two feet — plant­ed on two con­ti­nents. But be­hind that po­si­tion you can still see a heavy re­liance on biotech part­ners — Re­gen­eron and Al­ny­lam in par­tic­u­lar — with a bad itch to es­tab­lish a rep for R&D in­no­va­tion that has so far proved elu­sive.

Leerink’s Sea­mus Fer­nan­dez cap­tured Zer­houni’s think­ing at a re­cent meet­ing. He notes:

If Dr. Zer­houni em­pha­sized one thing from our dis­cus­sion is was that “We’re so much more than just an­oth­er way to own Re­gen­eron.” De­spite his en­thu­si­asm for Dupix­ent and the com­pa­ny’s IO ef­forts with REGN (OP), it is in­creas­ing­ly clear that SNY’s ef­forts are shift­ing to­ward in­ter­nal­ly de­vel­oped and owned as­sets.

There’s more:

Among the most in­ter­est­ing in­sights, in our view, was Dr. Zer­houni’s be­lief that SNY’s bi­o­log­ics and an­ti­body de­vel­op­ment ca­pa­bil­i­ties have ad­vanced far enough that it no longer makes sense to con­tin­ue the dis­cov­ery col­lab­o­ra­tion with REGN; hence why SNY ex­it­ed the agree­ment and moved to­ward the IO col­lab­o­ra­tion, where REGN’s fo­cus is on de­vel­op­ing check­points, in­clud­ing the PD1 an­ti­body, and SNY is fo­cused on com­bin­ing oth­er po­ten­tial IO agents like its an­ti-CD38 or an­ti-TGF agents, both “po­ten­tial­ly core mech­a­nisms of re­sis­tance”.

In par­tic­u­lar, Zer­houni high­light­ed new obe­si­ty re­search that could pay off.

Zer­houni high­light­ed the com­pa­ny’s in­ter­nal­ly de­vel­oped GLP1/Glucagon and GLP1/GIP dual ag­o­nists in Phase IIb obe­si­ty stud­ies. These stud­ies should have da­ta in 1H18 with the po­ten­tial to meet or ex­ceed the ben­e­fits on Vic­toza on blood glu­cose and sub­stan­tial­ly ex­ceed its im­pact on weight. Dr. Zer­houni not­ed that weight loss in ex­cess of 5% vs. con­trol would war­rant a move in­to Phase 3 in his view.

And just be­cause Sanofi got beat out in the bid­ding war for Medi­va­tion and Acte­lion doesn’t mean it has giv­en up on big time M&A. Zer­houni tells Fer­nan­dez that Sanofi is prepped to pay any­where from $20 bil­lion to $30 bil­lion to get some­thing it wants.

That brings up an­oth­er point that Zer­houni once made to me. He told me at JP Mor­gan a few years ago that any Big Phar­ma com­pa­ny that buys a plat­form com­pa­ny will on­ly kill it. If he stays true to form, Sanofi will re­serve its big mon­ey for drug as­sets that are on or near the mar­ket — and that won’t come cheap.

Im­age: Elias Zer­houni, Sanofi’s pres­i­dent of glob­al R&D, speaks in Paris last year Vin­cent Isore/IP3/Get­ty

Ryan Watts, Denali CEO

Bio­gen hands De­nali $1B-plus in cash, $1B-plus in mile­stones to part­ner on late-stage Parkin­son’s drug

Biogen is handing over more than a billion dollars cash to partner with the up-and-coming neurosciences crew at Denali on a new therapy for Parkinson’s. And the big biotech is ready to pile on more than a billion dollars more in milestones — if the alliance is a success.

For Biogen $BIIB, the move on Denali’s small molecule inhibitors of LRRK2 puts them in line to collaborate on a late-stage program for DNL151, which is scheduled to start next year.

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Michel Vounatsos, Biogen CEO (via YouTube)

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Biogen scored a big win at the FDA today as regulators accepted their application for the controversial Alzheimer’s drug aducanumab and gave it a priority review.

The PDUFA date is March 7, 2021.

Significantly, Biogen says it did not use its priority review voucher to win special treatment at the FDA. The agency handed that out gratis.

That’s the ideal scenario Biogen was looking for as disappointed analysts wondered aloud about the delayed application earlier in the year.

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Levi Garraway, Roche CMO (Source: Genentech)

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US regulators handed Roche and Genentech a big win Friday afternoon, one that has market-shaping potential for its high-priced rivals from Novartis and Biogen.

The FDA has green-lit the companies’ spinal muscular atrophy drug risdiplam, which will be marketed as Evrysdi in the US, for use in patients two months and older. It’s the first SMA drug that can be taken orally, as Biogen’s Spinraza is injected into the spine while Novartis’ Zolgensma is a gene therapy.

Moncef Slaoui, Getty Images

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In an interview with a pair of sympathetic podcasters at the conservative American Enterprise Institute, Slaoui provides an education to listeners on how any drug or vaccine can be sped through trials. And he leaves the door wide open to the notion that the leading vaccine developers can demonstrate efficacy and safety in a compelling fashion as early as October — or as late as the end of this year.

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Biohaven just added nearly $1 billion to their balance sheet.

On Friday morning, the neuroscience biotech announced a pair of creative agreements with Royalty Pharma and the investment firm Sixth Street to bolster the commercial launch of their new migraine drug, Nurtec. Biohaven will sell a sliver of its royalties on Nurtec and 3% of the royalties on their experimental migraine drug zavegepant to Royalty Pharma as part of a larger agreeement that will pay $450 million. At the same time, the company announced they took out a $500 million loan from Sixth Street.

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By CEO and scion Adar Poonawalla’s estimation, the Serum Institute in India has already poured hundreds of millions of dollars into scaling up the unproven Covid-19 vaccine being developed by AstraZeneca and Oxford for use in low and middle income countries. It’s meant taking on a risk that other companies, including AstraZeneca, have mitigated with huge amounts of government funding.

Now, for the first time, Poonawalla is getting some outside help. The Gates Foundation has agreed to pay the institute $150 million to supply 100 million vaccines to India and other emerging economies next year, Reuters reported. That includes both the vaccine being developed by AstraZeneca and the one being developed by Novavax. Those vaccines will be available in 92 countries and be priced at $3 per dose.

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UP­DAT­ED: No­vavax her­alds the lat­est pos­i­tive snap­shot of ear­ly-stage Covid-19 vac­cine — so why did its stock briefly crater?

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Their adjuvanted Covid-19 vaccine was “well-tolerated and elicited robust antibody responses numerically superior to that seen in human convalescent sera,” the company noted. According to the biotech:

All subjects developed anti-spike IgG antibodies after a single dose of vaccine, many of them also developing wild-type virus neutralizing antibody responses, and after Dose 2, 100% of participants developed wild-type virus neutralizing antibody responses. Both anti-spike IgG and viral neutralization responses compared favorably to responses from patients with clinically significant COVID‑19 disease. Importantly, the IgG antibody response was highly correlated with neutralization titers, demonstrating that a significant proportion of antibodies were functional.

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AbbVie has resolved a California lawsuit alleging insurance fraud in the promotion of its cash cow Humira, paying $24 million to settle things with the state’s insurance regulator.

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There’s no sign that the windfall of cash dropping biotech’s way on Wall Street is abating. Three more biopharmas priced IPOs on Thursday and Friday morning, riding a historic boom with a $364 million payoff.

London-based biotech Freeline Therapeutics took home the lion’s share of the cash with $159 million after pricing 8,823,529 shares at $18 a pop. Checkmate Pharmaceuticals, of Cambridge, MA, raised $75 million with an offer of 5 million shares at $15 — right at the midpoint of its range. And Arya Sciences Acquisition Corp III, the third in a series from Perceptive, priced 13,000,000 shares at $10 per share.