Scan­dal-prone Sub­sys mak­er In­sys falls as au­di­tor flags go­ing con­cern doubt

Af­ter hir­ing Lazard in the fourth quar­ter for coun­sel on cap­i­tal plan­ning and strate­gic al­ter­na­tives, the au­di­tor of the con­tro­ver­sial opi­oid painkiller mak­er In­sys Ther­a­peu­tics has raised doubts on the drug­mak­er’s abil­i­ty to con­tin­ue as a go­ing con­cern.

In­sys has a con­tentious past it is now pay­ing for in mil­lions with le­gal fees — its for­mer ex­ec­u­tives are em­broiled in court for al­leged­ly brib­ing doc­tors to pre­scribe its po­tent, ad­dic­tive fen­tanyl spray Sub­sys off-la­bel, by win­ing and din­ing them, pay­ing them to speak at “ed­u­ca­tion­al events” and in one case even a lap dance. Mean­while, the drug­mak­er’s bil­lion­aire founder and chief John Kapoor is on tri­al for rack­e­teer­ing and con­spir­a­cy as­so­ci­at­ed with Sub­sys sales.

Un­der fire for the role in played in the cri­sis of opi­oid abuse, mis­use and ad­dic­tion in the Unit­ed States, the com­pa­ny in No­vem­ber said it was look­ing to di­vest its ar­se­nal of opi­oid as­sets — in­clud­ing Sub­sys, which it has sold since 2012 — to sharp­en its fo­cus on its pipeline of cannabis-de­rived ther­a­peu­tics. How­ev­er, its track record is trou­bling. In 2016, the Ari­zona-based com­pa­ny re­port­ed­ly do­nat­ed $500,000 to a cam­paign against the le­gal­iza­tion of cannabis in Ari­zona, out­rag­ing mar­i­jua­na ac­tivists who ac­cused the com­pa­ny of try­ing to sti­fle com­pe­ti­tion. That skep­ti­cism was war­rant­ed when the fol­low­ing March In­sys’ cannabi­noid oral so­lu­tion Syn­dros — was resched­uled by the DEA (at the fed­er­al lev­el cannabis is strict­ly con­trolled in the same sched­ule LSD and hero­in is, and any de­rived prod­uct must be rel­e­gat­ed to low­er cat­e­go­ry be­fore it can be sold) and thus primed for launch.

On Wednes­day, the com­pa­ny warned in a fil­ing that af­ter re­view­ing its fi­nan­cial state­ments for the end­ed De­cem­ber 31, 2018, its au­di­tor had flagged that “loss­es and neg­a­tive cash flows from op­er­a­tions and un­cer­tain­ty in gen­er­at­ing suf­fi­cient cash to meet our le­gal oblig­a­tions and set­tle­ments and sus­tain our op­er­a­tions raise sub­stan­tial doubt about our abil­i­ty to con­tin­ue as a go­ing con­cern”.

If In­sys is un­able pro­cure more fund­ing, the com­pa­ny will need to sig­nif­i­cant­ly cut back op­er­a­tional­ly, and “cur­tail some or all of our prod­uct de­vel­op­ment, com­mer­cial­iza­tion and strate­gic plans.”

Shares of the drug­mak­er $IN­SY fell more than 25% on Wednes­day, clos­ing at $4.25.

In­sys is hard­ly the on­ly opi­oid drug mak­er in fi­nan­cial trou­ble. Pur­due Phar­ma — the mak­er of one of most wide­ly abused pre­scrip­tion opi­oid painkiller Oxy­con­tin — is re­port­ed­ly con­sid­er­ing bank­rupt­cy.


Im­age: In­sys Ther­a­peu­tics founder John Kapoor de­parts fed­er­al court, in Boston, Jan. 30, 2019. AP IM­AGES

On a glob­al romp, Boehringer BD team picks up its third R&D al­liance for Ju­ly — this time fo­cused on IPF with $50M up­front

Boehringer Ingelheim’s BD team is on a global deal spree. The German pharma company just wrapped its third deal in 3 weeks, going back to Korea for its latest pipeline pact — this time focused on idiopathic pulmonary fibrosis.

They’re handing over $50 million to get their hands on BBT-877, an ATX inhibitor from Korea’s Bridge Biotherapeutics that was on display at a science conference in Dallas recently. There’s not a whole lot of data to evaluate the prospects here.

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Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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Servi­er scoots out of an­oth­er col­lab­o­ra­tion with Macro­Gen­ics, writ­ing off their $40M

Servier is walking out on a partnership with MacroGenics $MGNX — for the second time.

After the market closed on Wednesday MacroGenics put out word that Servier is severing a deal — inked close to 7 years ago — to collaborate on the development of flotetuzumab and other Dual-Affinity Re-Targeting (DART) drugs in its pipeline.

MacroGenics CEO Scott Koenig shrugged off the departure of Servier, which paid $20 million to kick off the alliance and $20 million to option flotetuzumab — putting a heavily back-ended $1 billion-plus in additional biobuck money on the table for the anti-CD123/CD3 bispecific and its companion therapies.

Den­mark's Gen­mab hits the jack­pot with $500M+ US IPO as small­er biotechs rake in a com­bined $147M

Danish drugmaker Genmab A/S is off to the races with perhaps one of the biggest biotech public listings in decades, having reaped over $500 million on the Nasdaq, as it positions itself as a bonafide player in antibody-based cancer therapies.

The company, which has long served as J&J’s $JNJ key partner on the blockbuster multiple myeloma therapy Darzalex, has asserted it has been looking to launch its own proprietary product — one it owns at least half of — by 2025.

FDA over­rides ad­comm opin­ions a fifth of the time, study finds — but why?

For drugmakers, FDA advisory panels are often an apprehended barometer of regulators’ final decisions. While the experts’ endorsement or criticism often translate directly to final outcomes, the FDA sometimes stun observers by diverging from recommendations.

A new paper out of Milbank Quarterly put a number on that trend by analyzing 376 voting meetings and subsequent actions from 2008 through 2015, confirming the general impression that regulators tend to agree with the adcomms most of the time — with discordances in only 22% of the cases.

Norbert Bischofberger. Kronos

Backed by some of the biggest names in biotech, Nor­bert Bischof­berg­er gets his megaround for plat­form tech out of MIT

A little over a year ago when I reported on Norbert Bischofberger’s jump from the CSO job at giant Gilead to a tiny upstart called Kronos, I noted that with his connections in biotech finance, that $18 million launch round he was starting off with could just as easily have been $100 million or more.

With his first anniversary now behind him, Bischofberger has that mega-round in the bank.

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Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

UP­DAT­ED: With loom­ing ‘apoc­a­lypse of drug re­sis­tance,’ Mer­ck’s com­bi­na­tion an­tibi­ot­ic scores FDA ap­proval on two fronts

Merck — one of the last large biopharmaceuticals companies in the beleaguered field of antibiotic drug development — on Wednesday said the FDA had sanctioned the approval of its combination antibacterial for the treatment of complicated urinary tract and intra-abdominal infections.

To curb the rise of drug-resistant bacteria and maintain the efficacy of the therapy, Recarbrio (and other antibacterials) — the drug must be used to treat or prevent infections that are proven or strongly suspected to be caused by susceptible gram-negative bacteria, Merck $MRK said.

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John McHutchison in 2012. Getty Images

The $1.1M good­bye: Gilead CSO John McHutchi­son is out as Daniel O’Day shakes up the se­nior team

Just a little more than a year after John McHutchison grabbed a promotion to become CSO at Gilead in the wake of Norbert Bischofberger’s exit, he’s out amid a shakeup of the senior team that is also triggering the departure of two other top execs.

Gilead stated that McHutchison “has decided to step down” from the job as of August 2nd. And their SEC filing notes that he’ll be getting a $1.1 million check to settle up on his contract.

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