The Scan­gos lega­cy: A block­buster MS record with lin­ger­ing doubts about the pipeline

Six years ago, George Scan­gos was re­cruit­ed to head a turn­around team at what was billed as a trou­bled Bio­gen. And it wasn’t long be­fore a big ap­proval for a new mul­ti­ple scle­ro­sis block­buster trig­gered a round of ap­plause—and a bull­ish surge in the com­pa­ny’s stock price—that last­ed for years.

To­day, Scan­gos says his time is up at Bio­gen, well af­ter the ap­plause pe­tered out last year and the mar­ket be­gan to grow rest­less over the CEO’s less suc­cess­ful sec­ond act in a bear­ish mar­ket. In the next few months, he’ll step aside, once his suc­ces­sor can be found to helm the in­flu­en­tial Big Biotech, an in­sti­tu­tion­al land­mark in­side the Boston/Cam­bridge hub.

In some ways, he’s leav­ing Bio­gen $BI­IB in the same shape he found it, ei­ther the tar­get of a po­ten­tial buy­out or in need of a sub­stan­tial ac­qui­si­tion or some oth­er pipeline move that can re­gen­er­ate ex­cite­ment in the com­pa­ny’s fu­ture. As Scan­gos isn’t stick­ing around to ex­e­cute an an­tic­i­pat­ed deal, you can ex­pect to hear plen­ty of spec­u­la­tion that it’s more like­ly that Bio­gen could be bought. This next CEO will step in dur­ing a tur­bu­lent, un­cer­tain phase in the com­pa­ny’s long his­to­ry.

CEO George Scan­gos

Dur­ing his tenure, Scan­gos made Tec­fidera the new top earn­ing drug at Bio­gen, build­ing up the com­pa­ny’s MS port­fo­lio and wield­ing huge in­flu­ence over that sec­tor of the mar­ket. Bio­gen was fre­quent­ly cit­ed along­side Cel­gene and Gilead as an ex­am­ple of the new breed of Big Biotech, ca­pa­ble of de­vel­op­ing im­por­tant new drugs while rack­ing up ma­jor sales growth. But the com­pa­ny’s re­lent­less in­sis­tence on suc­cess ran in­to some grum­bling last year, when erod­ing growth in the big MS fran­chise forced the man­age­ment team to lay off more than 800 staffers in a big re­or­ga­ni­za­tion.

Scan­gos leaves be­hind a pipeline that has huge po­ten­tial, but plen­ty of lin­ger­ing doubts. In a swing-for-the-fences strat­e­gy, Bio­gen tack­led Alzheimer’s, per­haps the sin­gle biggest frus­tra­tion in R&D, with a new drug called ad­u­canum­ab. That drug is now in a late-stage study af­ter scor­ing some mixed ear­ly re­sults. (In Alzheimer’s R&D, which has known lit­tle but de­feat over the past decade, mixed ear­ly re­sults for a drug that tar­gets amy­loid be­ta is con­sid­ered quite an achieve­ment.)

Bio­gen’s hopes for stir­ring some ex­cite­ment for the pipeline, though, hit a bit­ter set­back just a few weeks ago. A Phase II study of its MS drug opicinum­ab (an­ti-LIN­GO-1) failed a Phase II study and left an­a­lysts unim­pressed at Bio­gen’s seem­ing­ly far-off set of pipeline cat­a­lysts. Once again, its shares were bad­ly dam­aged.

Scan­gos is leav­ing short­ly af­ter key mem­bers of his turn­around team moved on to new projects in biotech. R&D chief Doug Williams left to start Co­di­ak last year. Steve Holtz­man, head of cor­po­rate de­vel­op­ment, jumped ship at about the same time and is now run­ning Third Rock’s start­up Deci­bel.

Scan­gos him­self re­mains an out­sized fig­ure in biotech. He has a long re­sume in drug de­vel­op­ment and will like­ly re­main an in­flu­en­tial—though low­er pro­file—play­er long af­ter his suc­ces­sor has been named. In biotech, re­tire­ment is usu­al­ly the step you take be­fore start­ing your third act.

He hint­ed at that third act in a state­ment:

“This is the right time for a new leader to take the reins and lead Bio­gen through its next stage of de­vel­op­ment, and I look for­ward to re­turn­ing to the West Coast to take on one more set of ac­tiv­i­ties and spend more time with my fam­i­ly.”

Brent Saunders [Getty Photos]

UP­DAT­ED: Ab­b­Vie seals $63B deal to buy a trou­bled Al­ler­gan — spelling out $1B in R&D cuts

Brent Saunders has found his way out of the current fix he’s in at Allergan $AGN. He’s selling the company to AbbVie for $63 billion in the latest example of the hot M&A market in biopharma.

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Two biotech uni­corns swell pro­posed IPOs, eye­ing a $600M-plus wind­fall

We’ve been wait­ing for the ar­rival of Bridge­Bio’s IPO to top off the wave of new biotech of­fer­ings sweep­ing through Nas­daq at the end of H1. And now we learn that it’s been sub­stan­tial­ly up­sized.

Ini­tial­ly pen­ciled in at a uni­corn-sized $225 mil­lion, the KKR-backed biotech has spiked that to the neigh­bor­hood of $300 mil­lion, look­ing to sell 20 mil­lion shares at $14 to $16 each. That’s an added 5 mil­lion shares, re­ports Re­nais­sance Cap­i­tal, which fig­ures the pro­posed mar­ket val­u­a­tion for Neil Ku­mar’s com­pa­ny at $1.8 bil­lion.

No­var­tis holds back the copy­cat brigade's at­tack on its top drug fran­chise — for now

A fed­er­al judge has put a gener­ic chal­lenge to No­var­tis’ block­buster mul­ti­ple scle­ro­sis drug Gilenya on hold while a patent fight plays out in court.

Judge Leonard P. Stark is­sued a tem­po­rary in­junc­tion ear­li­er this week, forc­ing My­lan, Dr. Red­dy’s Lab­o­ra­to­ries and Au­robindo Phar­ma to shelve their launch plans to al­low the patent fight to pro­ceed. He ruled that al­low­ing the gener­ics in­to the mar­ket now would per­ma­nent­ly slash the price for No­var­tis, even if it pre­vails. 

Af­ter rais­ing $158M, this up­start's founders have star back­ers and plans to break new ground in gene ther­a­py

Back in 2014, Stephanie Tagliatela opted to take an early exit out of her PhD program after working in Mark Bear’s lab at MIT, where she specialized in the synaptic connections between neuronal cells in the brain. She never finished that PhD, but she and fellow MIT student Kartik Ramamoorthi — who was on the founding team at Voyager — came away with some ideas for a gene therapy startup.

Today, fully 5 years later, she and Ramamoorthi are taking the wraps off of a $104 million mega-round designed to take the cumulative work of their preclinical formative stage for Encoded Therapeutics into human studies. They’ve now raised $158 million since starting out in Illumina’s incubator in the Bay Area, and they believe they are firmly on track to do something unique in gene therapy.

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Novotech CEO Dr. John Moller

Novotech CRO Award­ed Frost & Sul­li­van Best Biotech CRO Asia-Pa­cif­ic 2019

Known in the in­dus­try as the Asia-Pa­cif­ic CRO, Novotech is now lead CRO ser­vices provider for the grow­ing num­ber of in­ter­na­tion­al biotechs se­lect­ing the re­gion for their stud­ies.

Re­flect­ing this Asia-Pa­cif­ic growth, Novotech staff num­bers are up 20% since De­cem­ber 2018 to 600 in-house clin­i­cal re­search peo­ple across a full range of ser­vices, across the re­gion.

Novotech’s ca­pa­bil­i­ties have been rec­og­nized by an­a­lysts like Frost & Sul­li­van, most re­cent­ly with the pres­ti­gious Asia-Pa­cif­ic CRO Biotech of the year award for best prac­tices in clin­i­cal re­search for biotechs for the fifth year. See oth­er awards here.

Sanofi/Re­gen­eron mus­cle ahead of a ri­val No­var­tis/Roche team, win first ap­proval in key rhi­nos­i­nusi­tis field

Re­gen­eron and their part­ners at Sanofi have beat the No­var­tis/Roche team to the punch on an­oth­er key in­di­ca­tion for their block­buster an­ti-in­flam­ma­to­ry drug Dupix­ent. The drug team scored an ac­cel­er­at­ed FDA ap­proval for chron­ic rhi­nos­i­nusi­tis with nasal polyps, mak­ing this the first such NDA for the field.

An­a­lysts have been watch­ing this race for awhile now, as Sanofi/Re­gen­eron won a snap pri­or­i­ty re­view for what is now their third dis­ease in­di­ca­tion for this treat­ment. And they’re not near­ly done, build­ing up hopes for a ma­jor fran­chise.

FDA re­jects Ac­er's rare dis­ease drug, asks for new tri­al — shares crater

Ac­er Ther­a­peu­tics’ bid to re­pur­pose celipro­lol — a be­ta-block­er on the mar­ket for hy­per­ten­sion — as a treat­ment for a rare, in­her­it­ed con­nec­tive tis­sue dis­or­der has hit a se­vere set­back. The New­ton, Mass­a­chu­setts-based com­pa­ny on Tues­day said the FDA re­ject­ed the drug and has asked for an­oth­er clin­i­cal tri­al.

The com­pa­ny’s shares $AC­ER cratered near­ly 77% to $4.47 in Tues­day morn­ing trad­ing.

Richard Gonzalez testifying in front of Senate Finance Committee, February 2019 [AP Images]

Ab­b­Vie's $63B buy­out spot­lights the re­turn of ma­jor M&A deals — de­spite the back­lash

Big time M&A is back. But for how long?

Over the past 18 months we’ve now seen three major buyouts announced: Takeda/Shire; Bristol-Myers/Celgene and now AbbVie/Allergan. And with this latest deal it’s increasingly clear that the sharp fall from grace suffered by high-profile players which have seen their share prices blasted has created an opening for the growth players in big pharma to up their game — in sharp contrast to the popular bolt-on deals that have been driving the growth strategy at Novartis, Merck, Roche and others.

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Top an­a­lyst finds a sil­ver lin­ing in Ab­b­Vie’s $63B Al­ler­gan buy­out — but there’s a catch

Af­ter get­ting beat up on all sides from mar­ket ob­servers who don’t much care for the lat­est mega-deal to ar­rive in bio­phar­ma, at least one promi­nent an­a­lyst now is start­ing to like what he sees in the num­bers for Ab­b­Vie/Al­ler­gan.

But it’s go­ing to take some en­cour­age­ment if Ab­b­Vie ex­ecs want it to last.

Ab­b­Vie’s mar­ket cap de­clined $20 bil­lion on Tues­day as the stock took a 17% hit dur­ing the day. And SVB Leerink’s Ge­of­frey Porges can see a dis­tinct out­line of an up­side af­ter re­view­ing the fun­da­men­tals of the deal.

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