Don't let a slump in bio­phar­ma deals get you down — yet; The con­tro­ver­sy on drug prices is tak­ing a toll

End­points as­sess­es the big bio­phar­ma sto­ries of the week, with a lit­tle added com­men­tary on what they mean for the in­dus­try.


Hey, what about that big up­swing pre­dict­ed for bio­phar­ma M&A?

Deal­mak­ers in bio­phar­ma are end­ing April with a con­sid­er­able amount of grum­bling. This was the year that M&A was sup­posed to take off, with a new pres­i­dent bull­ish­ly as­sert­ing plans to re­form tax­es in a way that would free up bil­lions in Big Phar­ma cash held over­seas.

Didn’t hap­pen. Don­ald Trump is so far bogged down on Oba­macare re­form and not able to de­liv­er a much bal­ly­hooed tax re­form pledge — for now.

“Most peo­ple would say they are dis­ap­point­ed with the pace of M&A,” Ge­of­frey Hsu, a part­ner at the deal-ori­ent­ed Or­biMed Ad­vi­sors, told Bloomberg. “Frankly, we were ex­pect­ing more to hap­pen by this time.”

The newswire ser­vice con­clud­ed that Q1 deals were down 13% cash-wise, com­pared to the same pe­ri­od a year ago.

True, deal­mak­ers are hard to please. It’s a feast or famine world in M&A, and lean pick­ings cause a lot of dis­sat­is­fac­tion.

The year, though, is a long way from over. Don’t let a Q1 re­port make you too un­hap­py. Con­cerned, yes. Un­hap­py, no.



Drug­mak­ers face a turn­ing point on pric­ing — putting the fo­cus where it be­longs

An­oth­er big trend that is draw­ing con­sid­er­able at­ten­tion these days is the im­mense pres­sure be­ing put on drug mak­ers to rein in prices. Pay­ers in the US are get­ting bet­ter at ap­ply­ing pres­sure right on the most sen­si­tive parts of the in­dus­try, and Pres­i­dent Trump start­ed his ad­min­is­tra­tion stomp­ing on the in­dus­try’s rep for stick­er shock.

Cred­it Su­isse put its thumb right on the pulse, though, with a new re­port this week show­ing just how im­por­tant an­nu­al price hikes are to the big play­ers. Their an­a­lysts con­clude:

Ar­guably, this is the most im­por­tant is­sue for a Phar­ma in­vestor to­day. De­spite pub­lic scruti­ny, we es­ti­mate US net price ris­es con­tributed c$8.7bn in 2016 to net in­come, 100% of sec­tor EPS growth. US net price growth was >100% of Bio­gen, Lil­ly, and Ab­b­Vie’s to­tal net in­come growth. Bio­Marin, Gilead, No­vo and Re­gen­eron were the least re­liant on US net price ris­es.

In this brave new world, on­ly the in­no­v­a­tive can thrive. And that means more part­ner­ing with biotech — the true source of in­no­va­tion in the drug world. I sus­pect we’ll see a grow­ing scram­ble for the best ex­per­i­men­tal drugs lat­er in the year. And that means val­u­a­tions should con­tin­ue to point north.


A con­tro­ver­sial Marathon is mar­gin­al­ized

We just learned that Marathon has been es­sen­tial­ly forced out at PhRMA, fol­low­ing a res­ig­na­tion by Mallinck­rodt — an­oth­er de­vel­op­er that has been dogged by a drug pric­ing scan­dal.

Ku­dos to PhRMA, which has been mak­ing life more un­com­fort­able for the com­pa­nies that set the pace for Mar­tin Shkre­li. Far too many com­pa­nies have found it easy to get cheap drugs and jack up the price by as­tro­nom­i­cal amounts.

In this new bio­phar­ma world we’re liv­ing in, that kind of con­duct won’t fly. You can’t be in the club now un­less you’re dead se­ri­ous about in­vest­ing in im­por­tant new ther­a­pies. That’s not enough, but it is a healthy start. And PTC Ther­a­peu­tics may want to think over their strat­e­gy one more time.


You have a pho­to op com­ing up Sat­ur­day morn­ing. Don’t miss it.

To­mor­row Mass­Bio and some of the top lead­ers of the Boston area biotech sec­tor want to cre­ate a mo­ment for every­one to reg­is­ter their op­po­si­tion to some of the re­cent moves from Pres­i­dent Trump on im­mi­gra­tion, H1B visas and NIH fund­ing.

It has come to no sur­prise to me that the vast ma­jor­i­ty of the in­dus­try hates what it’s been see­ing over the last few months. Biotech thrives when it can re­cruit the best and the bright­est from all over the world, and the US is home to the most dy­nam­ic drug de­vel­op­ment sec­tor in the world be­cause of it.

NIH fund­ing, mean­while, cre­ates the sci­en­tif­ic foun­da­tion that bio­phar­ma rests on. Cut­ting fund­ing sig­nif­i­cant­ly now would mean lay­ing waste to a gen­er­a­tion of young sci­en­tists look­ing to make their mark.

So at 10am on Sat­ur­day every­one is be­ing asked to give up some of their free time and join the crowd on Kendall Square for an aer­i­al shot to cap­ture a pic­ture of the in­dus­try’s sol­i­dar­i­ty on this is­sue. Too bad it’s not a week­day, when most peo­ple would on­ly have to walk over from their of­fices. But that might have stopped traf­fic.

A gen­er­al view of the bronze and glass pub­lic art sculp­ture “Nerve Cen­ter” by artist Chris Williams in Kendall Square on Ju­ly 1, 2016 in Cam­bridge, Mass­a­chu­setts. Pho­to by Paul Marot­ta/Get­ty Im­ages

 

Hal Barron, GSK

Break­ing the death spi­ral: Hal Bar­ron talks about trans­form­ing the mori­bund R&D cul­ture at GSK in a crit­i­cal year for the late-stage pipeline

Just ahead of GlaxoSmithKline’s Q2 update on Wednesday, science chief Hal Barron is making the rounds to talk up the pharma giant’s late-stage strategy as the top execs continue to woo back a deeply skeptical investor group while pushing through a whole new R&D culture.

And that’s not easy, Barron is quick to note. He told the Financial Times:

I think that culture, to some extent, is as hard, in fact even harder, than doing the science.

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UP­DAT­ED: Stay tuned: Bio­gen’s num­bers are great — it’s their wor­ri­some fu­ture that leaves an­a­lysts skit­tish

Biogen came out with an upbeat assessment of their Q2 numbers today, discounting the arrival of a key rival for its blockbuster Spinraza franchise. But the top execs remain grimly determined to not say much anything new about the sore points that have dragged down its stock, including the future of its big investment in Alzheimer’s or how it plans to invest the considerable cash that the big biotech continues to reap.

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Why wait? Cel­gene re­struc­tures a big Jounce pact — ze­ro­ing in on new I/O path­way with $530M deal and bump­ing ICOS

Celgene’s business team isn’t waiting for the big merger with Bristol-Myers Squibb to go through before syncing its strategy with the new mother ship.

Tuesday evening the big biotech unveiled a $530 million deal — $50 million in upfront cash — to amend their alliance with Jounce Therapeutics $JNCE to gain worldwide rights to JTX-8064, an antibody that targets the LILRB2 receptor on macrophages. Their old, $2.6 billion deal is being scrapped, leaving Jounce with a pipeline that includes the lead drug, the ICOS-targeting vopratelimab.

PACT Phar­ma says it's per­fect­ed the tech to se­lect neoanti­gens for per­son­al­ized ther­a­py — now on­to the clin­ic

At PACT Pharma, the lofty goal to unleash a “tsunami” of T cells personalized for each patient has hinged on the ability to correctly identify the neoantigens that form something of a fingerprint for each tumor, and extract the small group of T cells primed to attack the cancer. It still has a long way to go testing a treatment in humans, but the biotech says it has nailed that highly technical piece of the process.

UP­DAT­ED: My­ovan­t's uter­ine fi­broid drug looks com­pet­i­tive in PhI­II — but can they van­quish mighty Ab­b­Vie?

Vivek Ramaswamy’s Myovant $MYOV has closely matched its positive first round of Phase III data for their uterine fibroid drug relugolix, setting up a head-to-head rivalry with pharma giant AbbVie as the little biotech steers to the market with a planned filing in Q4.

Here’s how Myovant plans to prevail over the AbbVie $ABBV empire.

In the study, 71.2% of women receiving once-daily relugolix combination therapy achieved the clinical response they were looking for, compared to only 14.7% in the control arm. The data comfortably reflected the same outcomes in the first Phase III — 73.4% of women receiving once-daily oral relugolix combination therapy achieved the responder criteria compared with 18.9% of women receiving placebo — which will reassure regulators that they are getting the carefully randomized data that qualifies for the FDA’s gold standard for success.

Lit­tle Mar­i­nus sees its shares eclipsed as the Sage ri­val fails to com­pare on PPD in PhII

The executive team at Sage $SAGE have skirted another potential pitfall on its way to racking up a big future for its depression drug Zulresso.

Little Marinus Pharmaceuticals $MRNS had sought to challenge the Sage drug with an IV formulation — followed by an oral version — of ganaxolone for postpartum depression. But researchers say their Phase II study failed to positively differentiate itself from a placebo at 28 days — leaving them to hold up “clinically meaningful” data within the first day of administration compared to the control arm.

Roche cuts loose Tam­i­flu OTC rights, hand­ing Sanofi the keys as the phar­ma gi­ant dou­bles down on Xofluza

Roche set out to make a better flu medicine than Tamiflu as that franchise was headed to a generic showdown. Now they’ll see just how well Xofluza stacks up against the mainstay drug after handing off over-the-counter rights in the US to Sanofi.

Sanofi $SNY says it will now step in to negotiate a deal with the FDA to steer Tamiflu into the OTC market, a role that could well involve new studies to ease passage of the drug out of doctor’s hands and into the consumer end of the market. And the French pharma giant will have first dibs over “selected” OTC markets around the world as they push ahead.

Aca­dia is mak­ing the best of it, but their lat­est PhI­II Nu­plazid study is a bust

Acadia’s late-stage program to widen the commercial prospects for Nuplazid has hit a wall. The biotech reported that their Phase III ENHANCE trial flat failed. And while they $ACAD did their best to cherry pick positive data wherever they can be found, this is a clear setback for the biotech.

With close to 400 patients enrolled, researchers said the drug flunked the primary endpoint as an adjunctive therapy for patients with an inadequate response to antipsychotic therapy. The p-value was an ugly 0.0940 on the Positive and Negative Syndrome Scale, which the company called out as a positive trend.

Their shares slid 12% on the news, good for a $426 million hit on a $3.7 billion market cap at close.

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Some Big Phar­mas stepped up their game on da­ta trans­paren­cy — but which flunked the test?

The nonprofit Bioethics International has come out with their latest scorecard on data transparency among the big biopharmas in the industry — flagging a few standouts while spotlighting some laggards who are continuing to underperform.

Now in its third year, the nonprofit created a new set of standards with Yale School of Medicine and Stanford Law School to evaluate the track record on trial registration, results reporting, publication and data-sharing practice.