As cri­sis deep­ens, Teva's board sees off CEO Erez Vigod­man and an ac­tivist urges a split in­to two com­pa­nies


The re­volv­ing door out­side Te­va’s ex­ec­u­tive suite is spin­ning again. A lit­tle more than three years af­ter Je­re­my Levin was un­cer­e­mo­ni­ous­ly pushed out of the CEO’s job, his suc­ces­sor is fol­low­ing in the same path, just days af­ter back-to-back set­backs on sales pro­jec­tions and the loss of some key patents. And an ac­tivist in­vestor says the lat­est signs of tur­moil at Te­va should spur a move to split the com­pa­ny be­tween its gener­ic op­er­a­tions and the brand­ed group backed by a pipeline.

Te­va says that Erez Vigod­man is gone by “mu­tu­al agree­ment.” Chair­man Yitzhak Pe­ter­burg is step­ping up to the helm while the hunt be­gins for a new CEO. And Cel­gene co-founder and biotech en­tre­pre­neur Sol Bar­er is tak­ing the chair­man’s job.

The Is­raeli com­pa­ny has been a per­pet­u­al dis­ap­point­ment over the past year to many an­a­lysts. Vigod­man has been crit­i­cized for pay­ing too much in its gener­ics deal with Al­ler­gan. And his rep for tak­ing the wrong step was re­in­forced at the be­gin­ning of this year when Te­va was forced to slash a bil­lion dol­lars off its 2017 sales fore­cast af­ter its rev­enue from new prod­ucts fell dras­ti­cal­ly short of ear­li­er pro­jec­tions for 2016.

The tur­moil has caused Wells Far­go’s David Maris to ques­tion whether Te­va — the world’s largest gener­ics play­er which al­so has a pipeline of ex­per­i­men­tal drugs — had the right team in place. For ac­tivist in­vestor Ben­ny Lan­da, though, the re­al ques­tion is whether the com­pa­ny needs to split its op­er­a­tions.

“I hope that this vi­sion in­cludes split­ting Te­va in­to two com­pa­nies,” Lan­da told Globes. “When you look at the suc­cess­ful com­pa­nies in the world, the key word is fo­cus. Com­pa­nies split so that each com­pa­ny af­ter the split will be able to fo­cus on its sec­tor. Te­va should be split in­to a gener­ics com­pa­ny and a sep­a­rate brand­ed drug com­pa­ny. Te­va has re­cent­ly fo­cused on gener­ics to the ex­tent that it lost di­rec­tion, and didn’t re­al­ize that it should in­vest in the in­no­v­a­tive field for the sake of its fu­ture. These are ac­tu­al­ly two sec­tors with al­most no con­nec­tion be­tween them.”

“On my end, in­vestor feed­back track­ing 60-40 in fa­vor of split in­to brand­ed vs gener­ics,” notes Ever­core ISI’s Umer Raf­fat in re­sponse. “ A split wouldn’t cre­ate val­ue out of thin air … but in­vestors point out that it would al­low a brand­ed and gener­ics biz to run sep­a­rate­ly with a laser fo­cus … with nei­ther side tap­ping in­to the re­sources of the oth­er side and with full cost cut ex­e­cu­tion on gener­ics side. Hav­ing said that, in­vestors ac­knowl­edge a split isn’t im­mi­nent, and may like­ly take some time to ex­e­cute (as­sum­ing it hap­pens).”

I asked Levin what he thought about Vigod­man’s ex­it. His re­ply:

The com­pa­ny has a lot of work to do and the Board will have to make de­ci­sions to re­build man­age­ment, so­lid­i­fy the strate­gic di­rec­tion and pro­vide con­fi­dence to the share­hold­er base.  Te­va is an im­por­tant com­pa­ny and it has a ma­jor role to play in de­liv­er­ing med­i­cines to pa­tients and so­ci­eties around the world.

Vigod­man’s sud­den fall al­so came on the heels of some un­usu­al­ly blunt crit­i­cism from Kite Phar­ma CEO Arie Bellde­grun, who just re­cent­ly re­signed his seat on the board at Te­va. Bellde­grun ze­roed in on Te­va’s chron­ic prob­lems with ad­vanc­ing new drugs through the pipeline.

“Every drug com­pa­ny has to change con­stant­ly,” Bellde­grun told Globes, just days af­ter Te­va lost a court fight to pro­tect the patents on its flag­ship prod­uct, Co­pax­one. “Te­va was very com­fort­able with Co­pax­one, but it should have al­ready pre­pared 8-10 years ago for its sub­se­quent life, and no such prop­er prepa­ra­tions were made. You can’t ac­cuse the com­pa­ny; it grew so fast. Now it is in­vest­ing in its fu­ture de­vel­op­ment, but a tem­po­rary hole has been left, and must be sur­vived. Te­va’s fu­ture will come from Prof. Michael Hay­den’s de­part­ment (the in­no­v­a­tive de­part­ment, G.W.). Every­one is sor­ry that (for­mer gener­ics di­vi­sion head) Sig­gi (Sig­ur­dur) Olaf­s­son left, but Sig­gi wasn’t work­ing on Te­va’s fu­ture.”

“The Com­pa­ny is fo­cus­ing on ex­e­cut­ing its strate­gic pri­or­i­ties to trans­form Te­va, with im­me­di­ate fo­cus on re­al­iz­ing the cost syn­er­gies and strate­gic ben­e­fits of the Ac­tavis Gener­ics ac­qui­si­tion,” said Pe­ter­burg in a state­ment. “I look for­ward to work­ing with the en­tire Te­va team to con­duct a thor­ough re­view of the busi­ness to find ad­di­tion­al op­por­tu­ni­ties to en­hance val­ue for share­hold­ers. Te­va has a deep bench of tal­ent­ed lead­ers and to­day’s an­nounce­ment has no im­pact on our abil­i­ty to ex­e­cute go­ing for­ward. With the strength of our gener­ics pipeline, unique R&D ca­pa­bil­i­ties and un­par­al­leled foot­print, cou­pled with our ex­ist­ing as­sets and grow­ing pipeline in spe­cial­ty med­i­cines, I be­lieve in Te­va and the Com­pa­ny’s long-term growth prospects.”

https://twit­ter.com/Arm­strong­Drew/sta­tus/828737610235379713

Chas­ing Roche's ag­ing block­buster fran­chise, Am­gen/Al­ler­gan roll out Avastin, Her­ceptin knock­offs at dis­count

Let the long battle for biosimilars in the cancer space begin.

Amgen has launched its Avastin and Herceptin copycats — licensed from the predecessors of Allergan — almost two years after the FDA had stamped its approval on Mvasi (bevacizumab-awwb) and three months after the Kanjinti OK (trastuzumab-anns). While the biotech had been fielding biosimilars in Europe, this marks their first foray in the US — and the first oncology biosimilars in the country.

Seer adds ex-FDA chief Mark Mc­Clel­lan to the board; Her­cules Cap­i­tal makes it of­fi­cial for new CEO Scott Bluestein

→ On the same day it announced a $17.5 million Series C, life sciences and health data company Seer unveiled that it had lured former FDA commissioner and ex-CMS administrator Mark McClellan on to its board. “Mark’s deep understanding of the health care ecosystem and visionary insights on policy reform will be crucial in informing our thinking as we work to bring our liquid biopsy and life sciences products to market,” said Seer chief and founder Omid Farokhzad in a statement.

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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Francesco De Rubertis

Medicxi is rolling out its biggest fund ever to back Eu­rope's top 'sci­en­tists with strange ideas'

Francesco De Rubertis built Medicxi to be the kind of biotech venture player he would have liked to have known back when he was a full time scientist.

“When I was a scientist 20 years ago I would have loved Medicxi,’ the co-founder tells me. It’s the kind of place run by and for investigators, what the Medicxi partner calls “scientists with strange ideas — a platform for the drug hunter and scientific entrepreneur. That’s what I wanted when I was a scientist.”

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Af­ter a decade, Vi­iV CSO John Pot­tage says it's time to step down — and he's hand­ing the job to long­time col­league Kim Smith

ViiV Healthcare has always been something unique in the global drug industry.

Owned by GlaxoSmithKline and Pfizer — with GSK in the lead as majority owner — it was created 10 years ago in a time of deep turmoil for the field as something independent of the pharma giants, but with access to lots of infrastructural support on demand. While R&D at the mother ship inside GSK was souring, a razor-focused ViiV provided a rare bright spot, challenging Gilead on a lucrative front in delivering new combinations that require fewer therapies with a more easily tolerated regimen.

They kept a massive number of people alive who would otherwise have been facing a death sentence. And they made money.

And throughout, John Pottage has been the chief scientific and chief medical officer.

Until now.

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Daniel O'Day

No­var­tis hands off 3 pre­clin­i­cal pro­grams to the an­tivi­ral R&D mas­ters at Gilead

Gilead CEO Daniel O’Day’s new task hunting up a CSO for the company isn’t stopping the industry’s dominant antiviral player from doing pipeline deals.

The big biotech today snapped up 3 preclinical antiviral programs from pharma giant Novartis, with drugs promising to treat human rhinovirus, influenza and herpes viruses. We don’t know what the upfront is, but the back end has $291 million in milestones baked in.

Vas Narasimhan, AP Images

On a hot streak, No­var­tis ex­ecs run the odds on their two most im­por­tant PhI­II read­outs. Which is 0.01% more like­ly to suc­ceed?

Novartis CEO Vas Narasimhan is living in the sweet spot right now.

The numbers are running a bit better than expected, the pipeline — which he assembled as development chief — is performing and the stock popped more than 4% on Thursday as the executive team ran through their assessment of Q2 performance.

Year-to-date the stock is up 28%, so the investors will be beaming. Anyone looking for chinks in their armor — and there are plenty giving it a shot — right now focus on payer acceptance of their $2.1 million gene therapy Zolgensma, where it’s early days. And CAR-T continues to underperform, but Novartis doesn’t appear to be suffering from it.

So what could go wrong?

Actually, not much. But Tim Anderson at Wolfe pressed Narasimhan and his development chief John Tsai to pick which of two looming Phase III readouts with blockbuster implication had the better odds of success.

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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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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.