With debt loom­ing, brow­beat­en di­et pill mak­er Orex­i­gen goes bank­rupt -- shares slide

Di­et pill mak­er Orex­i­gen Ther­a­peu­tics is wav­ing the white flag Mon­day morn­ing af­ter a years-long bat­tle to bring its fi­nances in­to the black. With crush­ing debt loom­ing, the com­pa­ny is fil­ing Chap­ter 11 bank­rupt­cy in a last-ditch ef­fort to set­tle its ac­counts.

This is not the first time the com­pa­ny has tried to right the ship. Back in Oc­to­ber, Orex­i­gen $OREX an­nounced it was seek­ing bid­ders for the com­pa­ny’s as­sets. The last straw for the drug­mak­er’s suf­fer­ing bal­ance sheet was a mas­sive debt pay­ment that came due thanks to slow sales of Orex­i­gen’s lead prod­uct, Con­trave. The San Diego-based com­pa­ny was sup­posed to reach $100 mil­lion in sales by the end of 2017, but came in shy at just un­der that fig­ure. As part of the loan terms, that fail­ure trig­gered a pay­ment Orex­i­gen could not af­ford.

Michael Narachi

“While we have been work­ing close­ly with our note­hold­ers and have the sup­port of a con­trol­ling num­ber of se­nior se­cured note­hold­ers, our debt covenant re­quire­ments and near-term cash flow needs have ne­ces­si­tat­ed the pro­tec­tion af­ford­ed by a court-dri­ven process,” said Michael Narachi, Orex­i­gen’s CEO, in a state­ment.

The past few years have been tu­mul­tuous for Orex­i­gen, with the com­pa­ny’s stock plum­met­ing 96% since its height in 2015. De­spite a best-sell­ing weight­loss drug on the mar­ket among its brand­ed com­peti­tors, the com­pa­ny has faced hur­dle af­ter hur­dle, in­clud­ing a le­gal fight to de­fend its patent rights and a lack­lus­ter mar­ket for di­et pills in gen­er­al.

The com­pa­ny’s sole rev­enue dri­ver is Con­trave, which came on the mar­ket in 2014. It quick­ly snagged the biggest share of sales among brand name di­et pills, cap­tur­ing 52% and sur­pass­ing Qsymia, Sax­en­da, and Belviq. The com­pa­ny has been inch­ing — al­beit slow­ly — to­wards prof­itabil­i­ty for the past 15 years. It wasn’t enough.

Late last year, Narachi told me he hoped a merg­er or sale would get the com­pa­ny back on track with the abil­i­ty to share costs with an­oth­er or­ga­ni­za­tion. Plus, the com­pa­ny re­cent­ly won its long patent bat­tle with gener­ic drug­mak­er Ac­tavis, giv­ing Orex­i­gen mar­ket ex­clu­siv­i­ty un­til 2030. Narachi was hope­ful that this de­vel­op­ment would sweet­en the pot for po­ten­tial buy­ers.

No dice, ap­par­ent­ly.

In a state­ment, Orex­i­gen said a con­trol­ling num­ber of its se­nior se­cured note­hold­ers made a $35 mil­lion com­mit­ment to the com­pa­ny, pro­vid­ing Orex­i­gen with “suf­fi­cient liq­uid­i­ty to con­duct its busi­ness in an un­in­ter­rupt­ed man­ner, fund its chap­ter 11 case, in­clud­ing the sale of its as­sets, and to con­tin­ue to meet its op­er­a­tional and fi­nan­cial oblig­a­tions.”

Orex­i­gen’s stock is down 17% in pre-mar­ket trad­ing, sell­ing at $1.16 per share.

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Mathai Mammen (Rob Tannenbaum, Endpoints News at BIO 2018)

Math­ai Mam­men makes an abrupt ex­it as head of the big R&D group at J&J

In an after-the-bell shocker, J&J announced Monday evening that Mathai Mammen has abruptly exited J&J as head of its top-10 R&D group.

Recruited from Merck five years ago, where the soft-spoken Mammen was being groomed as the successor to Roger Perlmutter, he had been one of the top-paid R&D chiefs in biopharma. His group spent $12 billion last year on drug development, putting it in the top 5 in the industry.

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John Quisel, Disc Medicine CEO

Disc Med­i­cine goes pub­lic in re­verse merg­er with strug­gling Gem­i­ni Ther­a­peu­tics

After licensing a failed Roche schizophrenia drug last year, Disc Medicine is going public via a reverse merger with Gemini Therapeutics.

The combined company, while still named Disc Medicine, will trade under the stock symbol $IRON, in reference to Disc’s lineup of therapies for blood iron disorders. Alongside the merger, Disc has secured $53.5 million in another financing round, building on the $90 million Series B it raised in September.

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Amid mas­sive re­struc­tur­ing, Bio­gen looks to re­duce phys­i­cal pres­ence in Boston

Biogen is putting a sizable chunk of office and research space in Kendall Square and Weston, MA up for sublease, marking another big change as the biotech grapples with the aftershock of a disastrous and controversial rollout for its Alzheimer’s drug.

The company calls it “part of Biogen’s overall implementation of the ‘Future of Work,’ which is allowing us to optimize our footprint and reduce the amount of space we occupy, taking into consideration new elements such as the hybrid work model,” the Boston Globe reported, quoting a spokesperson.

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Robert Califf, FDA commissioner (Tom Williams/CQ Roll Call via AP Images)

Hop­ing to ex­pand mon­key­pox vac­cine sup­ply, US paves the way for new route of ad­min­is­tra­tion

After making it clear that the US’ current monkeypox vaccine supply is insufficient, the FDA on Tuesday authorized a new route of administration that should increase the number of available doses by five-fold.

Regulators cleared Bavarian Nordic’s Jynneos vaccine for intradermal injection in adults older than 18. Unlike subcutaneous injection — the current method by which vaccine is delivered under the skin — an intradermal jab goes directly into the skin. It’s believed that this method requires less vaccine, since the dermis is rich in dendritic cells which specialize in taking up foreign antigens and presenting them to the immune system, according to Daniel Kuritzkes, chief of infectious diseases at Brigham and Women’s Hospital in Boston.

Illustration: Kim Ryu for Endpoints News

Why non-opi­oid pain drugs keep fail­ing — and what's next for the field

In 1938, Rita Levi-Montalcini was forced to move her lab into her bedroom in Turin, as Mussolini’s facist government expelled Jewish people from studying or working in schools in Italy. Levi-Montalcini, then just a few years out of medical school and using sewing needles as scalpels in her makeshift lab, would soon discover nerve growth factor, or NGF, in chicken embryos.

Her discoveries formed the basis of our understanding of the peripheral nervous system and how cells talk to each other, and Levi-Montalcini went on to win the Nobel Prize in 1986. Much later, NGF was hailed as a promising target for new pain therapies, with some analysts quoting an $11 billion market. However, the latest anti-NGF candidate, Pfizer and Eli Lilly’s tanezumab, was rejected by the FDA last year because of a side effect that dissolved bone in some of its patients.

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Samantha Du, Zai Lab CEO

Any­one still look­ing for a CD47? Zai Lab shelves PhI pro­gram af­ter re­view­ing 'com­pet­i­tive land­scape'

Over the past few years, the promise of blocking CD47 — a “don’t eat me” signal co-opted by cancer cells — has sent drugmakers big and small into a frenzy. But one biotech is now bowing out.

Zai Lab is deprioritizing ZL-1201, its CD47 inhibitor, scrapping plans for a Phase II trial. It will now “pursue out-licensing opportunities,” the company said in its Q2 update. The decision was based on a review of the competitive landscape, it added, without going into further details.

Steve Paul, Karuna Therapeutics CEO (Third Rock)

Karuna's schiz­o­phre­nia drug pass­es a close­ly-watched PhI­II test, will head to FDA in mid-2023

An investigational pill that combines a former Eli Lilly CNS compound with an overactive bladder drug was better than placebo at reducing a scale of symptoms experienced by patients with schizophrenia in a Phase III trial.

Karuna Therapeutics’ drug passed the primary goal in EMERGENT-2, the Boston biotech said early Monday morning, alongside quarterly earnings. The study is the first of Karuna’s four Phase III clinical trials to read out in schizophrenia and will provide the backbone to the biotech’s first drug approval application, slated for mid-2023.

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HHS Secretary Xavier Becerra (Patrick Semansky/AP Images)

US weighs new route of ad­min­is­tra­tion for mon­key­pox vac­cine as cas­es climb — re­port

Less than a week after HHS Secretary Xavier Becerra declared monkeypox a national health emergency, reports have emerged that the US plans to extend its vaccine supply by opting for a different route of administration.

Officials are expected to call for intradermal injection of Bavarian Nordic’s Jynneos vaccine — the only shot approved specifically for monkeypox in the US — as opposed to subcutaneous injection, unnamed sources told both the New York Times and Washington Post on Tuesday.