Thumbs Up/Down

Puma’s fresh shiner, what the biotech IPO surge tells us, and the trouble with cancer R&D

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


Puma gets another shiner as BioTwitter chews on another morsel of information

One thing you don’t want to see in the final few days leading up to an FDA panel review of your big drug is trouble on the regulatory team. This, after all, is where the rubber hits the road for regulatory as they steer the application toward a group of people at the FDA and their chosen advisers who will offer their expert opinions on what you’ve been hoping to sell for badly needed revenue.

Pointed questions will be raised. Pointed answers need to be supplied. And the regulatory head is supposed to be your guide for what’s ahead, helping shore up your argument in the company’s favor. They may not do a lot of talking in public, or qualify as a top biotech exec, but strategy and prep from your regulatory liaison is key to a good panel presentation and defense.

So when Puma Biotechnology $PBYI briefly noted on Thursday that their regulatory head — Senior VP Robert Charnas — had decided to leave the company “for health reasons” in 11 days, 9 days ahead of their panel review, BioTwitter swung into action and began to offer a variety of conspiracy theories to fill the information gap.

Did he, perhaps, know that Puma had already been torpedoed in the FDA’s drug review?

It sounded bad, and Puma’s stock, which was trading at $200 a share a year ago, took another hit, costing it about 10% of its share price. And this after the stock closed at $36.55.

It didn’t help that the reason cited in their 8-K for Charnas’ departure may have been a little after-the-fact. Credit Suisse says they talked to CEO Alan Auerbach, and he told analysts that there was some friction between the regulatory chief and the team at Puma. The CEO suggested a month and a half ago that Charnas start considering what he’d like to do next with his career, and the health reason was cited in the regulatory chief’s resignation last Friday. That all happened before he could have seen the FDA’s docs.

So case closed?

Not a chance. There are other analysts notes and more conjecture. The debate over Puma’s chances at the FDA — with a drug that has been both praised and pummeled for efficacy as well as some severe side effects — is just reaching red-hot temperatures as a sure-fire catalyst approaches. So it’s a natural for Twitter, where small investors flock for tips and cues. Money will be made and lost in a war of words where motivation and identity are the first casualties in the fog of blog war.

It’s not ideal, but it is the new reality. For biotech CEOs looking to go public, that’s something you’ll want to keep front of mind.

Biotech IPOs flare again, and the bright light spotlights a new company-building strategy

Speaking of biotech stocks.

Biohaven got its pipeline the new fashioned way. It found a promising therapy on the shelf at Bristol-Myers Squibb, bagged it for a small amount and put it at the top of the pipeline. Hesto presto and you have a company ready to go public, Axovant style.

That’s a little flip, to be sure, but not too extreme. Anyway, what makes it important is that Biohaven pulled off an upsized $168 million IPO over the range at $17 a share this week. That’s not something you see very often in biotech circles, where the biotech boom of 2014 is now something of a distant echo. Add that with an upsized IPO for UroGen and a solid score by Ovid, and we have the makings of a biotech IPO resurgence — at least for a brief period.

I’m not a stock picker and there are plenty of people who are better at sorting out these trends than I am, but a market that’s ready to embrace biotech again — even as insiders shore up the price and problems abound with the ultra risk involved in drug development — would prove helpful to keeping the food chain tuned up.

What you shouldn’t overlook in this is the role bigger players in biopharma have in setting up this next wave of biotech companies. And not just at Biohaven. Ovid got its lead in a creative 50/50 deal with Takeda, which is wide open to new ideas and relationships. In a related move, Magenta, which brought its venture tally to $98.5 million this week, gained a lead drug from their contacts at Novartis.

So as the big organizations reorganize and reevaluate, new opportunities are being made for new companies.

These IPO trends can turn on a dime. So let’s say congrats to the winners and keep an eye on this. It’s been a good week. Picking up R&D assets like this may turbo charge a company’s growth. But not all of these rediscovered diamonds in the rough will sparkle in Phase III.

Cancer is the king of all pipeline strategies — so be careful

Congrats to AstraZeneca for their approval of durvalumab this week. Yes, it was expected. Yes, they were fifth to the party with the third OK for bladder cancer. No, that’s not going to win any prizes in R&D work, particularly for a pharma giant that faces multiple pipeline issues at a time it’s still struggling to mount a turnaround.

AstraZeneca, though, has scored some important wins in cancer under CEO Pascal Soriot and this trophy can be added to the blockbuster showcase.

AstraZeneca CEO Pascal Soriot

But there are some bigger trends at work here that deserve some attention.

It’s clear from the latest forecast from QuintilesIMS that cancer is going to be the big focus in biopharma R&D over the next five years. AstraZeneca went after checkpoints because the biology is well understood and you can make some money here. But their late arrival also underscores just how extraordinarily competitive this field can become almost overnight. Money is being poured into a whole pipeline of PD-1 and PD-L1 checkpoints. In the near future you’ll see approvals targeting particular countries, like China. Companies with a cancer vaccine or a next-gen CTLA-4, related checkpoints, etc., will want their own checkpoint. Like Incyte.

And why not? We know how to make these therapies.

The FDA, which has helped usher in a revolution in cancer R&D by encouraging accelerated applications, will have little problem reviewing and approving these new meds.

Payers aren’t blind to this. Competition will force prices down with formularies as the weapon of choice. Biotech’s role here is to look beyond where drugs are now and on to the new cocktails of the future, like CytomX is doing. And out of all the churning, there will be a few winners and many losers.

This is not work for the weak of heart; winning isn’t always going to be enough to be successful.


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