Shoot­ing for $100M IPO, Schrödinger takes the wraps off its five in­ter­nal drugs and dis­clos­es deal de­tails

Just be­fore last year’s JP Mor­gan con­fab kicked off, Schrödinger un­veiled its first ven­ture round fea­tur­ing in­sti­tu­tion­al in­vestors be­fore lat­er clos­ing the Se­ries E at $110 mil­lion. This time around, the com­pu­ta­tion­al drug dis­cov­ery ex­perts are in­sert­ing them­selves in­to the queue at the Nas­daq, gun­ning for a $100 mil­lion IPO.

Ramy Farid Schrödinger

Hav­ing honed its soft­ware ex­per­tise and built out its client base over three decades, Schrödinger boasts of a rev­enue stream that to­taled $66.6 mil­lion in 2018. But as it de­votes more of its at­ten­tion to its in­ter­nal pipeline, the New York com­pa­ny said it want­ed to in­crease their cap­i­tal­iza­tion and fi­nan­cial flex­i­bil­i­ty by en­ter­ing the pub­lic mar­ket. There’s al­so a hint of M&A plans to come.

The S-1 fil­ing shines a bright light on its hith­er­to stealthy pipeline, as well as the col­lab­o­ra­tion deals that it’s inked with mul­ti­ple bio­phar­ma play­ers.

Schrödinger’s en­try in­to pop­u­lar biotech con­scious­ness had a lot to do with Nim­bus and Mor­phic, two high-pro­file star­tups it’s helped launch and still holds stakes in. Nim­bus, in par­tic­u­lar, snagged a $1.2 bil­lion deal to sell fir­so­co­stat, an in­hibitor of acetyl-CoA car­boxy­lase with po­ten­tial in NASH, to Gilead. Of the $601.3 mil­lion that Nim­bus has ac­crued, $46 mil­lion has gone to Schrödinger, the fil­ing re­vealed.

“As our col­lab­o­ra­tion strat­e­gy has evolved, we are seek­ing to take more di­rect con­trol and re­spon­si­bil­i­ty for all as­pects of a drug dis­cov­ery project and own a high­er per­cent­age of the val­ue gen­er­at­ed in the com­plet­ed pro­grams,” Schrödinger, led by CEO Ramy Farid, wrote.

Karen Akin­sanya Schrödinger

One ex­am­ple of that is the pact with Take­da, where Schrödinger is keep­ing all the IP rights un­til their Japan­ese phar­ma part­ner de­cides to ex­er­cise its op­tion to li­cense the pro­grams. While the duo ini­tial­ly start­ed with three pro­grams in schiz­o­phre­nia, on­col­o­gy, and neu­rode­gen­er­a­tive dis­ease — Take­da has washed its hands of the schiz­o­phre­nia pro­gram. Then there’s Fax­i­an Ther­a­peu­tics, Schrödinger’s 50/50 joint ven­ture with Chi­nese CRO pow­er­house WuXi, and Bright An­gel Ther­a­peu­tics, the Cana­di­an biotech it found­ed with MaRS In­no­va­tion to fight fun­gal in­fec­tions and kept 33% own­er­ship of.

But nowhere is the de­sire to chart their own ther­a­peu­tic path more ful­ly ful­filled than in their in­ter­nal drug dis­cov­ery group, which is flour­ish­ing un­der the guid­ance of chief bio­med­ical sci­en­tist Karen Akin­sanya with 70 staffers and five pro­grams. We knew that all of them are geared to­wards can­cer, but Schrödinger fi­nal­ly re­vealed the tar­gets for the IPO:

  • SD­GR1: CDC7 in­hibitor to dis­rupt DNA repli­ca­tion ini­ti­a­tion in can­cer cells for sol­id tu­mors;
  • SD­GR2: WEE1 in­hibitor to trig­ger DNA break­age and apop­to­sis in sol­id tu­mor cells;
  • SD­GR3: MALT1 in­hibitor to block onco­genic ac­ti­va­tion of NF-kB among pa­tients with non-Hodgkin’s lym­phoma and chron­ic lym­pho­cyt­ic leukemia who are re­sis­tant to or have re­lapsed on BTK drugs;
  • SD­GR4: HIF-2 al­pha in­hibitor to treat re­nal cell car­ci­no­ma;
  • and SD­GR5: SOS1/KRAS in­hibitor, its can­di­date for the hot KRAS field.
Cony D’Cruz Schrödinger

David E. Shaw and the Gates Foun­da­tion, which pro­vid­ed the first fi­nanc­ing round and the sub­se­quent three, re­spec­tive­ly, re­main the biggest stock­hold­ers, al­though their stakes aren’t spelled out.

CEO Farid took home a $633,101 pay pack­age in 2019, about half of his com­pen­sa­tion in 2018, which in­clud­ed an $80,000 bonus. Chief busi­ness of­fi­cer Cony D’Cruz was re­ward­ed $587,601 for his deal­mak­ing hus­tle while chief le­gal of­fi­cer Yvonne Tran re­ceived $547,618.

2019 Trin­i­ty Drug In­dex Eval­u­ates Ac­tu­al Com­mer­cial Per­for­mance of Nov­el Drugs Ap­proved in 2016

Fewer Approvals, but Neurology Rivals Oncology and Sees Major Innovations

This report, the fourth in our Trinity Drug Index series, outlines key themes and emerging trends in the industry as we progress towards a new world of targeted and innovative products. It provides a comprehensive evaluation of the performance of novel drugs approved by the FDA in 2016, scoring each on its commercial performance, therapeutic value, and R&D investment (Table 1: Drug ranking – Ratings on a 1-5 scale).

How to cap­i­talise on a lean launch

For start-up biotechnology companies and resource stretched pharmaceutical organisations, launching a novel product can be challenging. Lean teams can make setting a launch strategy and achieving your commercial goals seem like a colossal undertaking, but can these barriers be transformed into opportunities that work to your brand’s advantage?
We spoke to Managing Consultant Frances Hendry to find out how Blue Latitude Health partnered with a fledgling subsidiary of a pharmaceutical organisation to launch an innovative product in a
complex market.
What does the launch environment look like for this product?
FH: We started working on the product at Phase II and now we’re going into Phase III trials. There is a significant unmet need in this disease area, and everyone is excited about the launch. However, the organisation is still evolving and the team is quite small – naturally this causes a little turbulence.

UP­DAT­ED: FDA’s golodirsen CRL: Sarep­ta’s Duchenne drugs are dan­ger­ous to pa­tients, of­fer­ing on­ly a small ben­e­fit. And where's that con­fir­ma­to­ry tri­al?

Back last summer, Sarepta CEO Doug Ingram told Duchenne MD families and investors that the FDA’s shock rejection of their second Duchenne MD drug golodirsen was due to some concerns regulators raised about the risk of infection and the possibility of kidney toxicity. But when pressed to release the letter for all to see, he declined, according to a report from BioPharmaDive, saying that kind of move “might not look like we’re being as respectful as we’d like to be.”

He went on to assure everyone that he hadn’t misrepresented the CRL.

But Ingram’s public remarks didn’t include everything in the letter, which — following the FDA’s surprise about-face and unexplained approval — has now been posted on the FDA’s website and broadly circulated on Twitter early Wednesday.

The CRL raises plenty of fresh questions about why the FDA abruptly decided to reverse itself and hand out an OK for a drug a senior regulator at the FDA believed — 5 months ago, when he wrote the letter — is dangerous to patients. It also puts the spotlight back on Sarepta $SRPT, which failed to launch a confirmatory study of eteplirsen, which was only approved after a heated internal controversy at the FDA. Ellis Unger, director of CDER’s Office of Drug Evaluation I, notes that study could have clarified quite a lot about the benefit and risks associated with their drugs — which can cost as much as a million dollars per patient per year, depending on weight.

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UP­DAT­ED: Eli Lil­ly’s $1.6B can­cer drug failed to spark even the slight­est pos­i­tive gain for pa­tients in its 1st PhI­II

Eli Lilly had high hopes for its pegylated IL-10 drug pegilodecakin when it bought Armo last year for $1.6 billion in cash. But after reporting a few months ago that it had failed a Phase III in pancreatic cancer, without the data, its likely value has plunged. And now we’re getting some exact data that underscore just how little positive effect it had.

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Stephen Hahn, AP

The FDA has de­val­ued the gold stan­dard on R&D. And that threat­ens every­one in drug de­vel­op­ment

Bioregnum Opinion Column by John Carroll

A few weeks ago, when Stephen Hahn was being lightly queried by Senators in his confirmation hearing as the new commissioner of the FDA, he made the usual vow to maintain the gold standard in drug development.

Neatly summarized, that standard requires the agency to sign off on clinical data — usually from two, well-controlled human studies — that prove a drug’s benefit outweighs any risks.

Over the last few years, biopharma has enjoyed an unprecedented loosening over just what it takes to clear that bar. Regulators are more willing to drop the second trial requirement ahead of an accelerated approval — particularly if they have an unmet medical need where patients are clamoring for a therapy.

That confirmatory trial the FDA demands can wait a few years. And most everyone in biopharma would tell you that’s the right thing for patients. They know its a tonic for everyone in the industry faced with pushing a drug through clinical development. And it’s helped inspire a global biotech boom.

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UP­DAT­ED: New play­ers are jump­ing in­to the scram­ble to de­vel­op a vac­cine as pan­dem­ic pan­ic spreads fast

When the CNN news crew in Wuhan caught wind of the Chinese government’s plan to quarantine the city of 11 million people, they made a run for one of the last trains out — their Atlanta colleagues urging them on. On the way to the train station, they were forced to skirt the local seafood market, where the coronavirus at the heart of a brewing outbreak may have taken root.

And they breathlessly reported every moment of the early morning dash.

In shuttering the city, triggering an exodus of masked residents who caught wind of the quarantine ahead of time, China signaled that they were prepared to take extreme actions to stop the spread of a virus that has claimed 17 lives, sickened many more and panicked people around the globe.

CNN helped illustrate how hard all that can be.

The early reaction in the biotech industry has been classic, with small-cap companies scrambling to headline efforts to step in fast. But there are also new players in the field with new tech that has been introduced since the last of a series of pandemic panics that could change the usual storylines. And they’re volunteering for a crash course in speeding up vaccine development — a field where overnight solutions have been impossible to prove.

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Wuhan virus out­break trig­gers in­evitable small-biotech ral­ly

Every few years, a public health crisis (think Ebola, Zika) spurred by a rogue pathogen triggers a small-biotech rally, as drugmakers emerge from the woodwork with ambitious plans to treat the mounting outbreak. In most cases, that enthusiasm never quite delivers.

Things are no different, as the coronavirus outbreak in Wuhan, China takes hold. There have been close to 300 confirmed human infections in China, and at least four deaths. Coronaviruses are a large family of viruses, which include MERS and SARS. On Tuesday, the CDC reported the virus was detected in a US traveler returning from Wuhan.

Mer­ck KGaA spin­out gets first fund­ing to bring dual-act­ing can­cer mol­e­cules in­to the clin­ic

Two and a half years after launch, Merck KGaA spinout iOnctura is getting its first major round of funding.

The oncology startup raised €15 million ($16.6 million) to put its lead drug into the clinic and get its second drug past IND-enabling tests. INKEF Capital and VI Partners co-led the round and were joined by the biotech’s longtime backer M Ventures, an arm of Merck KGaA, and Schroder Adveq.

Am­gen aug­ments Asia foothold by tak­ing over Astel­las joint ven­ture in Japan

California-based Amgen, which does the bulk of its business in the United States, made its ambition to reinvigorate its growth prospects by expanding its presence in Asia clear at the sidelines of the JP Morgan healthcare conference in San Francisco earlier this month.

The Thousand Oaks-based company on Thursday executed its plan to dissolve the joint venture with Astellas — created in 2013 — to operate the unit independently in Japan. With its rapidly aging population, the region represents an appealing market for Amgen’s osteoporosis treatments Prolia and Evenity as well as a cholesterol-lowering injection Repatha.