Craig Parker, Surrozen CEO

The world of Wnt heads to Nas­daq as Sur­rozen an­nounces a $212M SPAC deal

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An­oth­er day, an­oth­er SPAC merg­er in the world of biotech.

Less than 24 hours af­ter Tan­go Ther­a­peu­tics an­nounced its own leap to Nas­daq through the blank check route, Sur­rozen has de­cid­ed to take a sim­i­lar step. The Wnt path­way-fo­cused biotech is re­verse-merg­ing with Con­so­nance Cap­i­tal Man­age­ment’s SPAC in a $212 mil­lion deal, which in­cludes $92 mil­lion from the shell com­pa­ny and $120 mil­lion in PIPE fi­nanc­ing.

The trans­ac­tion is ex­pect­ed to close in the third quar­ter, with Sur­rozen tak­ing on the tick­er $SRZN when it of­fi­cial­ly hits the mar­ket.

Sur­rozen is work­ing on a pipeline of ex­per­i­men­tal drugs that mod­u­late the Wnt path­way, which plays a role in the main­te­nance and self-re­new­al of stem cells in a va­ri­ety of tis­sues. Prod­ucts that af­fect Wnt sig­nal­ing, whose name com­bines Wing­less and Int-1, can be dif­fi­cult to man­u­fac­ture be­cause the process is high­ly un­sta­ble.

The goal, then, is to de­vel­op drugs that are flex­i­ble enough to ad­dress in­suf­fi­cient en­doge­nous Wnt or in­suf­fi­cient re­cep­tors that have the po­ten­tial to re­pair dam­aged tis­sue. So far, that’s tak­en the form of two lead pro­grams, one for in­flam­ma­to­ry bow­el dis­ease and an­oth­er to treat se­vere al­co­holic he­pati­tis.

Both pro­grams are ex­pect­ed to en­ter the clin­ic thanks to Thurs­day’s raise, Sur­rozen said, with funds tak­ing them through Phase Ib tri­als.

First, there’s SZN-1326, a bi-spe­cif­ic an­ti­body tar­get­ing Fzd5/8 and Lrp6 for IBD. Pre­clin­i­cal da­ta have shown the mol­e­cule can bind to Friz­zled re­cep­tors — where Wnt pro­teins sig­nal through — di­rect­ly and should stim­u­late re­gen­er­a­tion of in­testi­nal ep­ithe­lial cells.

Then there’s SZN-043, the se­vere al­co­holic he­pati­tis can­di­date, which is a he­pa­to­cyte-tar­get­ed R-spondin mimet­ic. Rather than bind­ing to the Friz­zled re­cep­tors as the IBD pro­gram does, this can­di­date sta­bi­lizes them to stim­u­late liv­er cell pro­lif­er­a­tion and re­duce fi­bro­sis.

Sur­rozen is hop­ing to uti­lize the two Wnt mod­u­lat­ing plat­forms that helped cre­ate these com­pounds to ex­pand in­to oth­er dis­eases, such as those in the eye, lung, kid­ney, cochlea, skin, pan­creas and cen­tral ner­vous sys­tem.

SPACs have cre­at­ed a whirl­wind on Wall Street, with the num­ber of blank check com­pa­nies pric­ing their IPOs in 2021 hav­ing al­ready sur­passed the to­tal from the last two years com­bined, ac­cord­ing to fig­ures from SPACIn­sid­er. The flur­ry has al­so drawn the eyes of in­ves­ti­ga­tors, with the SEC say­ing last month they have start­ed vol­un­tar­i­ly re­quest­ing in­for­ma­tion from banks in­to how they’re polic­ing the deals in­ter­nal­ly.

All the ac­tiv­i­ty has al­so prompt­ed con­cerns that there will soon be too many SPACs and not enough com­pa­nies with which to merge. Sur­rozen marks the 6th life sci­ences com­pa­ny to an­nounce its in­tent to merge in 2021, but there have been more than 30 that have priced this year, per an End­points News tal­ly.

For biotech, though, the SPAC wave has meant a whole new stack of cash for the com­pa­nies that do de­cide to es­chew the tra­di­tion­al IPO route. In­clud­ing Tan­go’s an­nounce­ment for sim­i­lar plans with Box­er Cap­i­tal’s blank-check com­pa­ny just yes­ter­day, the to­tal SPAC raise for these six com­pa­nies now equals about $2.9 bil­lion.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

UP­DAT­ED: Boehringer nabs FDA's first in­ter­change­abil­i­ty des­ig­na­tion for its Hu­mi­ra com­peti­tor — but will it mat­ter?

The FDA late Friday awarded Boehringer Ingelheim the first interchangeability designation for its Humira biosimilar Cyltezo, meaning that when it launches in July 2023, pharmacists will be able to automatically substitute the Boehringer’s version for AbbVie’s mega-blockbuster without a doctor’s input.

The designation will likely give Boehringer, which first won approval for Cyltezo in 2017, the leg up on a crowded field of Humira competitors.

Bio­gen hit by ALS set­back with PhI­II fail­ure for tofersen — but fol­lows a fa­mil­iar strat­e­gy high­light­ing the pos­i­tive

Patients and analysts waiting to hear Sunday how Biogen’s SOD1-ALS drug tofersen fared in Phase III didn’t have to wait long for the top-line result they were all waiting for. The drug failed the primary endpoint on significantly improving the functional and neurologic decline of patients over 28 weeks as well as the extension period for continued observation.

In fact, there was very little difference in response.

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Scott Struthers, Crinetics CEO

Cri­net­ics spins out ra­dio­phar­ma ef­forts in­to a new com­pa­ny, high­light­ing the grow­ing field­'s al­lure

Largely known for its nonpeptide small molecule research, Crinetics has been keeping its radiopharma work comparatively under wraps. But that changed Monday afternoon as the California biotech spun out a new company focused solely on the burgeoning field.

Crinetics launched Radionetics after the closing bell Monday, the company announced, seeding the new entity with $30 million raised from 5AM Ventures and Frazier Healthcare Partners. Radionetics will start with its own radiopharma-centric platform and a pipeline of 10 programs aimed at solid tumors.

Two drug­mak­ers hit with PDU­FA date de­lays from FDA amid back­log of in­spec­tions

As the FDA is weighed down with more and more pandemic responsibilities, the agency is beginning to miss PDUFA dates with more frequency too. Two different companies on Monday said they received notices that the FDA has not completed their drug reviews on time.

The review of an NDA for Avadel Pharmaceuticals’ candidate treatment for narcolepsy is not coming this month, the company said, and the review of UCB’s BLA for bimekizumab, used to treat moderate to severe plaque psoriasis, will miss its target date as well.

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Reshma Kewalramani, Vertex CEO (YouTube)

Ver­tex gets much-need­ed win with ‘ex­tra­or­di­nary’ first pa­tient re­sults on po­ten­tial di­a­betes cure

Vertex said Monday that the first patient dosed with its cell therapy for type 1 diabetes saw their need for insulin injections vanish almost entirely, a key early step in the decades-long effort to develop a curative treatment for the chronic disease.

The patient, who had suffered five potentially life-threatening hypoglycemic — or low blood sugar — episodes in the year before the therapy, was injected with synthetic insulin-producing cells. After 90 days, the patient’s new cells produced insulin steadily and ramped up their insulin production after a meal like normal cells do, as measured by a standard biomarker for insulin production.

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Covid-19 vac­cine boost­ers earn big thumbs up, but Mod­er­na draws ire over world sup­ply; What's next for Mer­ck’s Covid pill?; The C-suite view on biotech; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

You may remember that at the beginning of this year, Endpoints News set a goal to go broader and deeper. We are still working towards that, and are excited to share that Beth Snyder Bulik will be joining us on Monday to cover all things pharma marketing. You can sign up for her weekly Endpoints MarketingRx newsletter in your reader profile.

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No­var­tis de­vel­op­ment chief John Tsai: 'We go deep in the new plat­form­s'

During our recent European Biopharma Summit, I talked with Novartis development chief John Tsai about his experiences over the 3-plus years he’s been at the pharma giant. You can read the transcript below or listen to the exchange in the link above.

John Carroll: I followed your career for quite some time. You’ve had more than 20 years in big pharma R&D and you’ve obviously seen quite a lot. I really was curious about what it was like for you three and a half years ago when you took over as R&D chief at Novartis. Obviously a big move, a lot of changes. You went to work for the former R&D chief of Novartis, Vas Narasimhan, who had his own track record there. So what was the biggest adjustment when you went into this position?

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Amit Etkin, Alto Neuroscience CEO (Alto via Vimeo)

A star Stan­ford pro­fes­sor leaves his lab for a start­up out to re­make psy­chi­a­try

About five years ago, Amit Etkin had a breakthrough.

The Stanford neurologist, a soft-spoken demi-prodigy who became a professor while still a resident, had been obsessed for a decade with how to better define psychiatric disorders. Drugs for depression or bipolar disorder didn’t work for many patients with the conditions, and he suspected the reason was how traditional diagnoses didn’t actually get at the heart of what was going on in a patient’s brain.