What’s ahead for UK biotechs in the wake of Brex­it? It's not a pret­ty pic­ture

Seem­ing­ly al­most overnight the sen­ti­ment in the UK over Brex­it changed from Re­main to Leave. That sud­den switch-up leaves the UK’s bio­phar­ma in­dus­try fac­ing a lengthy pe­ri­od of fi­nan­cial and reg­u­la­to­ry un­cer­tain­ty. And biotech, where every­thing is un­cer­tain, hates un­cer­tain­ty.


Of­fi­cial­ly, the biotech in­dus­try quick­ly adopt­ed a clas­sic British at­ti­tude to a cri­sis: Keep calm and car­ry on.

“The life sci­ences sec­tor is a re­silient com­mu­ni­ty, un­fazed by new chal­lenges and staffed by great man­age­ment teams used to work­ing in a glob­al en­vi­ron­ment,” not­ed the UK BioIn­dus­try As­so­ci­a­tion, with con­sid­er­able phlegm. “The fun­da­men­tals of UK bio­science re­main strong. In terms of po­ten­tial new ther­a­pies in the pipeline, the UK is by far the strongest in Eu­rope. But sev­er­al key is­sues for our sec­tor are now in flux.”

These key is­sues in­clude an abrupt change in po­lit­i­cal lead­er­ship, a bank­ing and fi­nan­cial cri­sis, a like­ly eco­nom­ic con­trac­tion with in­fla­tion as the pound drops in val­ue and a brand new reg­u­la­to­ry/re­search sup­port struc­ture to con­sid­er.

In fact, the UK biotech in­dus­try is any­thing but un­fazed. The sec­tor is like­ly to feel the bit­ter winds of po­lit­i­cal change much more than their Big Phar­ma brethren at Glax­o­SmithK­line and As­traZeneca. The glob­al gi­ants are al­ready op­er­at­ing on the world stage, where the FDA and the EMA will con­tin­ue to play the big roles in reg­u­la­to­ry ap­provals (un­less this vote pre­cip­i­tates the end of the EU as more coun­tries go their own way).

That ex­plains why GSK and AZ en­joyed an in­crease in their stock prices to­day. In­vestors love a good port in a storm. The vast ma­jor­i­ty of pub­lic British biotech com­pa­nies, though, wit­nessed sharp drops in their share price as in­vestors fret­ted about their fu­ture.

And there are oth­er con­sid­er­a­tions as well.

One of the key ob­jec­tives of British politi­cians like George Free­man has been to make the UK a bet­ter place for big play­ers to do drug re­search. But that re­quires a pre­dictable reg­u­la­to­ry and re­search en­vi­ron­ment, and that just van­ished. British sci­en­tists are al­so sig­nal­ing deep fears that a ma­jor source of fund­ing is about to van­ish.

The UK biotech in­dus­try is not strong. It has been in re­cov­ery mode for sev­er­al years. But since a se­ries of dis­as­ters af­flict­ed the in­dus­try about 7 years ago, blight­ing gen­er­al­ist in­ter­est in the sec­tor, biotech has been slow­ly on the mend.

More in­vest­ment cash, in­clud­ing a mod­est­ly swelling flow of transat­lantic VC cash along with new in­vest­ments by Neil Wood­ford’s funds, etc, has been back­ing the im­pres­sive aca­d­e­m­ic and in­dus­try spin­outs that have been pop­ping up in re­cent years. Com­pa­nies like Adap­ti­m­mune have gone pub­lic on Nas­daq and the LSE. As­traZeneca, mean­while, has com­mit­ted to keep­ing a large R&D or­ga­ni­za­tion in place around Cam­bridge, af­ter some sig­nif­i­cant down­siz­ing.

Good biotech VCs, mean­while, are built to with­stand an eco­nom­ic down­turn and ques­tions over longterm ex­its. And there are some very deep pock­ets that play in the Gold­en Tri­an­gle, in­clud­ing New En­ter­prise As­so­ci­ates. The LSE had al­ready been large­ly benched as Nas­daq played the court that re­mained in the wake of a sav­age biotech bear mar­ket.

The end of a sin­gle con­ti­nen­tal reg­u­la­to­ry group for drug de­vel­op­ers may ac­tu­al­ly wind up a pos­i­tive for the UK, if they can keep it sim­ple and sup­port­ive.

But there’s no cer­tain­ty about that, and some two years of ne­go­ti­a­tions lie ahead in sep­a­rat­ing the UK from the rest of Eu­rope. Dur­ing that time, you can ex­pect the in­dus­try con­cen­trat­ed in Lon­don, Cam­bridge and Ox­ford to fo­cus more than ever on the U.S. mar­ket, where the reg­u­la­to­ry en­vi­ron­ment has im­proved marked­ly for drug de­vel­op­ers and in­vest­ment mon­ey con­tin­ues to flow.

“In the longer term, it is my view that the tra­jec­to­ry of the UK econ­o­my, and more im­por­tant­ly the world econ­o­my, will not be in­flu­enced sig­nif­i­cant­ly by to­day’s out­come,” not­ed Neil Wood­ford con­fi­dent­ly in a blog post. “Con­se­quent­ly, the port­fo­lio strat­e­gy will not change.”

Wood­ford al­so didn’t change course when his in­vest­ment in North­west Bio ($NWBO) and more re­cent­ly Cir­cas­sia (LSE: $CIR) went sour. But Brex­it is one more dev­il­ish headache that it like­ly to cause the cel­e­brat­ed in­vestor some sec­ond thoughts about mak­ing biotech a cen­tral fo­cus of his funds.

Crises do end. And not all dis­rup­tion is bad. But Brex­it came at a bad time for the UK biotech in­dus­try.

Fol­low­ing news of job cuts in Eu­ro­pean R&D ops, Sanofi con­firms it’s of­fer­ing US work­ers an 'ear­ly ex­it'

Ear­li­er in the week we learned that Sanofi was bring­ing out the bud­get ax to trim 466 R&D jobs in Eu­rope, re­tool­ing its ap­proach to car­dio as re­search chief John Reed beefed up their work in can­cer and gene ther­a­pies. And we’re end­ing the week with news that the phar­ma gi­ant has al­so been qui­et­ly re­duc­ing staff in the US, tar­get­ing hun­dreds of jobs as the com­pa­ny push­es vol­un­tary buy­outs with a fo­cus on R&D sup­port ser­vices.

Why would the FDA ap­prove an­oth­er con­tro­ver­sial drug to spur a woman’s li­bido with these da­ta? And why no ex­pert pan­el re­view?

AMAG Pharmaceuticals’ newly approved drug for spurring women’s sexual desire may never make much money, but it’s a big hit at sparking media attention.

The therapy — Vyleesi (bremelanotide) — got the green light from regulators on Friday evening, swiftly lighting up a range of stories around the world, from The New York Times to The Guardian. Several headlines inevitably referred to it as the “female Viagra,” invoking Pfizer’s old erectile dysfunction blockbuster.

But the two drugs have little in common.

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Which top 10 big phar­mas have the most to gain — or lose — over the next 5 years?

When Evaluate Pharma crunched the likely drug sales numbers for the big 10, 2 stood out. 

Takeda, with its big Shire buyout under its belt, is set to almost double its worldwide sales record for 2018 over 5 years, putting it in the big 10 — the 9th spot, to be exact — which is exactly where CEO Christophe Weber wants to be. 

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Roger Perlmutter. Merck via webcast

'Our lega­cy mat­ter­s': Mer­ck maps out Keytru­da king­dom while spot­light­ing ad­vances in vac­cines, hos­pi­tal care

“You can for the mo­ment stop tak­ing notes. You can put down your pens and your pad. I have no slides. I have no sub­stan­tive da­ta. I have no pitch.”

So be­gan Roger Perl­mut­ter’s brief ap­pear­ance on­stage at Mer­ck’s first in­vestor day in five years, where he dived in­to the com­pa­ny’s his­to­ry dat­ing back to 1933. The first em­ploy­ees at Mer­ck Re­search Lab­o­ra­to­ries, hand­picked by founder George W. Mer­ck, were crit­i­cal to Mer­ck’s abil­i­ty to achieve clin­i­cal and com­mer­cial suc­cess.

How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

J&J's Es­ke­t­a­mine, at cur­rent price, is 'low val­ue for mon­ey' — ICER

For John­son & John­son’s $JNJ phar­ma­ceu­ti­cal ver­sion of the hal­lu­cino­genic anes­thet­ic ke­t­a­mine — es­ke­t­a­mine — to be cost-ef­fec­tive for use in treat­ment-re­sis­tant de­pres­sion in the long term, its list price must be cut by up to half, ICER con­clud­ed in its fi­nal re­port on Thurs­day.

Cog­nizant of the myr­i­ad of ap­proved an­ti­de­pres­sants that of­ten don’t work, the US reg­u­la­tor en­dorsed J&J’s es­ke­t­a­mine, brand­ed as  — Spra­va­to — in March for treat­ment-re­sis­tant de­pres­sion, con­scious that the orig­i­nal cat tran­quil­iz­er is fre­quent­ly used off-la­bel for se­vere de­pres­sion.

In starved an­tibi­ot­ic field, Melin­ta soars as FDA grants speedy drug re­view

Such is the state of af­fairs in an­tibi­ot­ic land that the FDA agree­ing to pri­or­i­ty re­view an ap­pli­ca­tion to ex­pand the use of an an­tibi­ot­ic can rock­et up a stock more than two-fold.

On Wednes­day, Melin­ta Ther­a­peu­tics said its ap­proved an­tibi­ot­ic Baxdela had been grant­ed pri­or­i­ty re­view for use in com­mu­ni­ty-ac­quired bac­te­r­i­al pneu­mo­nia (CAPB). The FDA is ex­pect­ed to make its de­ci­sion by Oc­to­ber 24. Shares of the Con­necti­cut drug­mak­er $ML­NT cat­a­pult­ed, clos­ing up near­ly 224% at $6.41.

Brent Saunders at an Endpoints News event in 2017 — File photo

An­a­lyst call with Al­ler­gan ex­ecs stokes an­tic­i­pa­tion of a plan to split the com­pa­ny in ‘a month or two’

So what’s up at Al­ler­gan?

Ear­li­er this week the ubiq­ui­tous Ever­core ISI an­a­lyst Umer Raf­fat was on the line with com­pa­ny ex­ec­u­tives to probe in­to the lat­est on the num­bers as well as CEO Brent Saun­ders’ re­cent de­c­la­ra­tion that he’d be do­ing some­thing de­fin­i­tive to help long-suf­fer­ing in­vestors who have watched their shares dwin­dle in val­ue.

He came away with the im­pres­sion that a sig­nif­i­cant com­pa­ny split is on the way. And not on some dis­tant time hori­zon.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.

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