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

Hal Barron, GSK

Break­ing the death spi­ral: Hal Bar­ron talks about trans­form­ing the mori­bund R&D cul­ture at GSK in a crit­i­cal year for the late-stage pipeline

Just ahead of GlaxoSmithKline’s Q2 update on Wednesday, science chief Hal Barron is making the rounds to talk up the pharma giant’s late-stage strategy as the top execs continue to woo back a deeply skeptical investor group while pushing through a whole new R&D culture.

And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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UP­DAT­ED: Stay tuned: Bio­gen’s num­bers are great — it’s their wor­ri­some fu­ture that leaves an­a­lysts skit­tish

Biogen came out with an upbeat assessment of their Q2 numbers today, discounting the arrival of a key rival for its blockbuster Spinraza franchise. But the top execs remain grimly determined to not say much anything new about the sore points that have dragged down its stock, including the future of its big investment in Alzheimer’s or how it plans to invest the considerable cash that the big biotech continues to reap.

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Why wait? Cel­gene re­struc­tures a big Jounce pact — ze­ro­ing in on new I/O path­way with $530M deal and bump­ing ICOS

Celgene’s business team isn’t waiting for the big merger with Bristol-Myers Squibb to go through before syncing its strategy with the new mother ship.

Tuesday evening the big biotech unveiled a $530 million deal — $50 million in upfront cash — to amend their alliance with Jounce Therapeutics $JNCE to gain worldwide rights to JTX-8064, an antibody that targets the LILRB2 receptor on macrophages. Their old, $2.6 billion deal is being scrapped, leaving Jounce with a pipeline that includes the lead drug, the ICOS-targeting vopratelimab.

PACT Phar­ma says it's per­fect­ed the tech to se­lect neoanti­gens for per­son­al­ized ther­a­py — now on­to the clin­ic

At PACT Pharma, the lofty goal to unleash a “tsunami” of T cells personalized for each patient has hinged on the ability to correctly identify the neoantigens that form something of a fingerprint for each tumor, and extract the small group of T cells primed to attack the cancer. It still has a long way to go testing a treatment in humans, but the biotech says it has nailed that highly technical piece of the process.

UP­DAT­ED: My­ovan­t's uter­ine fi­broid drug looks com­pet­i­tive in PhI­II — but can they van­quish mighty Ab­b­Vie?

Vivek Ramaswamy’s Myovant $MYOV has closely matched its positive first round of Phase III data for their uterine fibroid drug relugolix, setting up a head-to-head rivalry with pharma giant AbbVie as the little biotech steers to the market with a planned filing in Q4.

Here’s how Myovant plans to prevail over the AbbVie $ABBV empire.

In the study, 71.2% of women receiving once-daily relugolix combination therapy achieved the clinical response they were looking for, compared to only 14.7% in the control arm. The data comfortably reflected the same outcomes in the first Phase III — 73.4% of women receiving once-daily oral relugolix combination therapy achieved the responder criteria compared with 18.9% of women receiving placebo — which will reassure regulators that they are getting the carefully randomized data that qualifies for the FDA’s gold standard for success.

Lit­tle Mar­i­nus sees its shares eclipsed as the Sage ri­val fails to com­pare on PPD in PhII

The executive team at Sage $SAGE have skirted another potential pitfall on its way to racking up a big future for its depression drug Zulresso.

Little Marinus Pharmaceuticals $MRNS had sought to challenge the Sage drug with an IV formulation — followed by an oral version — of ganaxolone for postpartum depression. But researchers say their Phase II study failed to positively differentiate itself from a placebo at 28 days — leaving them to hold up “clinically meaningful” data within the first day of administration compared to the control arm.

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Roche set out to make a better flu medicine than Tamiflu as that franchise was headed to a generic showdown. Now they’ll see just how well Xofluza stacks up against the mainstay drug after handing off over-the-counter rights in the US to Sanofi.

Sanofi $SNY says it will now step in to negotiate a deal with the FDA to steer Tamiflu into the OTC market, a role that could well involve new studies to ease passage of the drug out of doctor’s hands and into the consumer end of the market. And the French pharma giant will have first dibs over “selected” OTC markets around the world as they push ahead.

Aca­dia is mak­ing the best of it, but their lat­est PhI­II Nu­plazid study is a bust

Acadia’s late-stage program to widen the commercial prospects for Nuplazid has hit a wall. The biotech reported that their Phase III ENHANCE trial flat failed. And while they $ACAD did their best to cherry pick positive data wherever they can be found, this is a clear setback for the biotech.

With close to 400 patients enrolled, researchers said the drug flunked the primary endpoint as an adjunctive therapy for patients with an inadequate response to antipsychotic therapy. The p-value was an ugly 0.0940 on the Positive and Negative Syndrome Scale, which the company called out as a positive trend.

Their shares slid 12% on the news, good for a $426 million hit on a $3.7 billion market cap at close.

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Some Big Phar­mas stepped up their game on da­ta trans­paren­cy — but which flunked the test?

The nonprofit Bioethics International has come out with their latest scorecard on data transparency among the big biopharmas in the industry — flagging a few standouts while spotlighting some laggards who are continuing to underperform.

Now in its third year, the nonprofit created a new set of standards with Yale School of Medicine and Stanford Law School to evaluate the track record on trial registration, results reporting, publication and data-sharing practice.