Tetraphase has two suit­ors, de­spite strug­gling mar­ket for an­tibi­otics

The mar­ket for an­tibi­otics may be “bro­ken,” but one small an­tibi­ot­ic com­pa­ny is seem­ing­ly in de­mand: Tetraphase Phar­ma­ceu­ti­cals. In March, the com­pa­ny said it had agreed to be ac­quired by Acel­Rx in an all-stock deal val­ued at $14.4 mil­lion. But this week, an­oth­er drug­mak­er ap­pears to be court­ing Tetraphase — La Jol­la Phar­ma­ceu­ti­cals sub­mit­ted a non-bind­ing pro­pos­al to swal­low Tetraphase for $22 mil­lion.

At the heart of ei­ther deal is Tetraphase’s an­tibi­ot­ic er­ava­cy­cline (brand­ed as Xer­a­va), which was ap­proved in 2018 for com­pli­cat­ed in­tra-ab­dom­i­nal in­fec­tions, some four years af­ter the com­pa­ny re­port­ed its first batch of piv­otal tri­al da­ta. Last year, the drug gen­er­at­ed a mere $3.6 mil­lion in net sales.

Akin to Acel­Rx, La Jol­la is al­so of­fer­ing Tetraphase stock­hold­ers one con­tin­gent val­ue right (CVR), which would en­ti­tle the hold­ers to re­ceive ag­gre­gate pay­ments of up to $12.5 mil­lion for Xer­a­va in net sales mile­stones start­ing in 2021.

La Jol­la, which has an ap­proved drug for sep­tic or oth­er dis­trib­u­tive shock and an­oth­er ther­a­py un­der FDA re­view for malar­ia, has $77.2 mil­lion of cash which it plans to use to fund the trans­ac­tion, it said in a fil­ing.

Tetraphase in­vestors cheered the deal — shares of the Wa­ter­town, Mass­a­chu­setts-based com­pa­ny soared more than 56% to $2.12 in Thurs­day pre­mar­ket trad­ing.

The Acel­Rx deal was ap­proved by both sets of share­hold­ers and is ex­pect­ed to close in the sec­ond quar­ter. La Jol­la said its deal could be com­plet­ed by May 11, sub­ject to due dili­gence.

Tetraphase, like peers Achao­gen and Melin­ta, has seen its val­ue go up in smoke as fee­ble sales frus­trat­ed growth, as doc­tors who are con­fined by hos­pi­tal bud­gets are steered to use old­er, cheap­er an­tibi­otics in their first re­sponse, re­serv­ing fresh, more tar­get­ed al­ter­na­tives for acute cas­es.

The in­dus­try play­ers con­tribut­ing to the ar­se­nal of an­timi­cro­bials are fast dwin­dling, and the pipeline for new an­tibi­otics is em­bar­rass­ing­ly sparse, the WHO has warned. Drug­mak­ers are en­ticed by green­er pas­tures, com­pared to the long, ar­du­ous and ex­pen­sive path to an­tibi­ot­ic ap­proval that of­fers lit­tle fi­nan­cial gain as treat­ments are typ­i­cal­ly priced cheap­ly, and of­ten lose po­ten­cy over time as mi­crobes grow re­sis­tant to them.

As it stands, the an­tibi­ot­ic mar­ket is cursed — it har­bors the stink of mul­ti­ple bank­rupt­cies, a dearth of in­no­va­tion and is con­se­quent­ly bare­ly whet­ting the vo­ra­cious ap­petites of ma­jor phar­ma­ceu­ti­cal com­pa­nies and most ven­ture cap­i­tal­ists. The Tetraphase an­nounce­ment comes months af­ter bank­rupt an­tibi­ot­ic com­pa­ny Ar­a­digm turned to old part­ner/in­vestor Gri­fols for a fi­nal $3 mil­lion fire sale.

Bris­tol My­ers is clean­ing up the post-Cel­gene merg­er pipeline, and they’re sweep­ing out an ex­per­i­men­tal check­point in the process

Back during the lead up to the $74 billion buyout of Celgene, the big biotech’s leadership did a little housecleaning with a major pact it had forged with Jounce. Out went the $2.6 billion deal and a collaboration on ICOS and PD-1.

Celgene, though, also added a $530 million deal — $50 million up front — to get the worldwide rights to JTX-8064, a drug that targets the LILRB2 receptor on macrophages.

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José Basel­ga finds promise in new class of RNA-mod­i­fy­ing can­cer tar­gets, lock­ing in 3 pre­clin­i­cal pro­grams with $55M

Having dived early into some of the RNA breakthroughs of the last decades — betting on Moderna’s mRNA tech and teaming up with Silence on the siRNA front — AstraZeneca is jumping into a new arena: going after proteins that modify RNA.

Their partner of choice is Accent Therapeutics, which is receiving $55 million in upfront payment to steer a selected preclinical program through to the end of Phase I. After AstraZeneca takes over, the Lexington, MA-based startup has the option to co-develop and co-commercialize in the US — and collect up to $1.1 billion in milestones in the long run. The deal also covers two other potential drug candidates.

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UP­DAT­ED: Leg­end fetch­es $424 mil­lion, emerges as biggest win­ner yet in pan­dem­ic IPO boom as shares soar

Amid a flurry of splashy pandemic IPOs, a J&J-partnered Chinese biotech has emerged with one of the largest public raises in biotech history.

Legend Biotech, the Nanjing-based CAR-T developer, has raised $424 million on NASDAQ. The biotech had originally filed for a still-hefty $350 million, based on a range of $18-$20, but managed to fetch $23 per share, allowing them to well-eclipse the massive raises from companies like Allogene, Juno, Galapagos, though they’ll still fall a few dollars short of Moderna’s record-setting $600 million raise from 2018.

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As it hap­pened: A bid­ding war for an an­tibi­ot­ic mak­er in a mar­ket that has rav­aged its peers

In a bewildering twist to the long-suffering market for antibiotics — there has actually been a bidding war for an antibiotic company: Tetraphase.

It all started back in March, when the maker of Xerava (an FDA approved therapy for complicated intra-abdominal infections) said it had received an offer from AcelRx for an all-stock deal valued at $14.4 million.

The offer was well-timed. Xerava was approved in 2018, four years after Tetraphase posted its first batch of pivotal trial data, and sales were nowhere near where they needed to be in order for the company to keep its head above water.

Por­tion of Neil Wood­ford’s re­main­ing in­vest­ments, in­clud­ing Nanopore, sold off for $284 mil­lion

It’s been precisely one year and one day since Neil Woodford froze his once-vaunted fund, and while a global pandemic has recently shielded him from the torrent of headlines, the fallout continues.

Today, the California-based patent licensing firm Acacia Research acquired the fund’s shares for 19 healthcare and biotech companies for $284 million.  Those companies include shares for public and private companies and count some of Woodford’s most prominent bio-bets, such as Theravance Biopharma, Oxford Nanopore and Mereo Biopharma, according to Sky News, which first reported the sale. It won’t include shares for BenevelontAI, the machine learning biotech once valued at $2 billion.

Drug man­u­fac­tur­ing gi­ant Lon­za taps Roche/phar­ma ‘rein­ven­tion’ vet as its new CEO

Lonza chairman Albert Baehny took his time headhunting a new CEO for the company, making it absolutely clear he wanted a Big Pharma or biotech CEO with a good long track record in the business for the top spot. In the end, he went with the gold standard, turning to Roche’s ranks to recruit Pierre-Alain Ruffieux for the job.

Ruffieux, a member of the pharma leadership team at Roche, spent close to 5 years at the company. But like a small army of manufacturing execs, he gained much of his experience at the other Big Pharma in Basel, remaining at Novartis for 12 years before expanding his horizons.

Covid-19 roundup: Ab­b­Vie jumps in­to Covid-19 an­ti­body hunt; As­traZeneca shoots for 2B dos­es of Ox­ford vac­cine — with $750M from CEPI, Gavi

Another Big Pharma is entering the Covid-19 antibody hunt.

AbbVie has announced a collaboration with the Netherlands’ Utrecht University and Erasmus Medical Center and the Chinese-Dutch biotech Harbour Biomed to develop a neutralizing antibody that can treat Covid-19. The antibody, called 47D11, was discovered by AbbVie’s three partners, and AbbVie will support early preclinical work, while preparing for later preclinical and clinical development. Researchers described the antibody in Nature Communications last month.

Is a pow­er­house Mer­ck team prepar­ing to leap past Roche — and leave Gilead and Bris­tol My­ers be­hind — in the race to TIG­IT dom­i­na­tion?

Roche caused quite a stir at ASCO with its first look at some positive — but not so impressive — data for their combination of Tecentriq with their anti-TIGIT drug tiragolumab. But some analysts believe that Merck is positioned to make a bid — soon — for the lead in the race to a second-wave combo immuno-oncology approach with its own ambitious early-stage program tied to a dominant Keytruda.

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Leen Kawas, Athira CEO (Athira)

Can a small biotech suc­cess­ful­ly tack­le an Ever­est climb like Alzheimer’s? Athi­ra has $85M and some in­flu­en­tial back­ers ready to give it a shot

There haven’t been a lot of big venture rounds for biotech companies looking to run a Phase II study in Alzheimer’s.

The field has been a disaster over the past decade. Amyloid didn’t pan out as a target — going down in a litany of Phase III failures — and is now making its last stand at Biogen. Tau is a comer, but when you look around and all you see is destruction, the idea of backing a startup trying to find complex cocktails to swing the course of this devilishly complicated memory-wasting disease would daunt the pluckiest investors.