With hep C fran­chis­es lan­guish­ing, Mer­ck’s MK-3682 goes from block­buster to bomb

A lit­tle less than three years af­ter ac­quir­ing the he­pati­tis C drug MK-3682 (up­ri­fos­bu­vir) in its $3.85 bil­lion buy­out of Idenix, Mer­ck’s prospects in the field have cooled dra­mat­i­cal­ly, and its once great hopes for the drug have been re­duced to near­ly noth­ing.

Af­ter the mar­ket closed on Thurs­day, Mer­ck says it is tak­ing a pre-tax $2.9 bil­lion “in­tan­gi­ble as­set im­pair­ment charge” for the drug and re­duc­ing it on the books to a mar­gin­al $240 mil­lion — and even that may not last long.

Its 8-K filed to­day at the SEC notes:

The Com­pa­ny de­ter­mined that re­cent changes to the prod­uct pro­file, as well as changes to its ex­pec­ta­tions for pric­ing and the mar­ket op­por­tu­ni­ty, tak­en to­geth­er con­sti­tut­ed a trig­ger­ing event that re­quired the Com­pa­ny to eval­u­ate the up­ri­fos­bu­vir in­tan­gi­ble as­set for im­pair­ment. Uti­liz­ing mar­ket par­tic­i­pant as­sump­tions, and con­sid­er­ing dif­fer­ent sce­nar­ios, the Com­pa­ny con­clud­ed that its best es­ti­mate of the cur­rent fair val­ue of the in­tan­gi­ble as­set re­lat­ed to up­ri­fos­bu­vir was $240 mil­lion….The Com­pa­ny con­tin­ues to eval­u­ate op­tions with re­spect to the up­ri­fos­bu­vir clin­i­cal de­vel­op­ment pro­gram and will mon­i­tor the re­main­ing $240 mil­lion in­tan­gi­ble as­set for fur­ther im­pair­ment.

Back in 2014 when Mer­ck bought Idenix, hep C was one of the hottest dis­eases in bio­phar­ma. New cock­tails in de­vel­op­ment at the mar­ket leader Gilead as well as Ab­b­Vie had made the field a deal­mak­er’s par­adise, and as­set val­u­a­tions soared. Even in late 2015 Mer­ck was talk­ing up the drug, used in a cock­tail aimed at faster cures.

To­day, though, hep C has been pain­less­ly cured with a num­ber of very ef­fec­tive, and in­creas­ing­ly cheap cock­tails. Gilead’s for­tune is ex­pect­ed to melt away by as much as half this year, as com­pe­ti­tion and cure rates have be­gun to evis­cer­ate a flag­ship port­fo­lio. And Mer­ck’s great ex­pec­ta­tions are a bust.

Ac­cord­ing to Leerink, Mer­ck ex­ecs point­ed out last night that “a de­clin­ing ad­dress­able pa­tient pop­u­la­tion and a more dif­fi­cult pric­ing en­vi­ron­ment since the Idenix ac­qui­si­tion.” But there is al­so a ques­tion about tim­ing now, as Mer­ck’s de­vel­op­ment pro­gram has been se­ri­ous­ly de­layed.

Mer­ck has been in­formed by reg­u­la­tors that it will need to com­plete sep­a­rate tri­als, and show an added ben­e­fit, with the triple, over its high dose dou­blet of MK3682 + MK8408. This sug­gests that com­pa­ny will need to wait for da­ta from the high-dose dou­blet (which is fur­ther be­hind in Phase 2) and de­lays the tim­ing of the triple ma­te­ri­al­ly.

That doesn’t mean, though, that the phar­ma gi­ant is stop­ping any of the on­go­ing tri­als for the drug. Late Thurs­day Mer­ck sent me a state­ment say­ing that the write down had noth­ing to do with the drug’s ef­fi­ca­cy or safe­ty. Mer­ck added:

We’ve had a com­mit­ment to he­pati­tis C for sev­er­al decades.   En­roll­ment in the cur­rent clin­i­cal tri­als for up­ri­fos­bu­vir will con­tin­ue. We al­so re­main en­cour­aged by our progress with the launch of ZEPATI­ER, in­clud­ing our abil­i­ty to gain ac­cess across pub­lic and pri­vate pay­ers in the Unit­ed States and ini­tial up­take in the Eu­ro­pean Union and Japan.

Albert Bourla appears before the Senate Committee on Finance for a hearing on prescription drug pricing on Capitol Hill in Washington, DC, February 26, 2019. Chris Kleponis for CNP via AP Images

UP­DAT­ED: Pfiz­er CEO Al­bert Bourla is back in the M&A game, but why is he pay­ing $11.4B for Ar­ray?

Pfiz­er $PFE has cut short its time on the side­lines of bio­phar­ma M&A.

Mon­day morn­ing the phar­ma gi­ant un­veiled an $11.4 bil­lion deal to ac­quire Ar­ray Bio­Phar­ma, beef­ing up its on­col­o­gy work and adding a new re­search hub in Boul­der, Col­orado to its glob­al op­er­a­tions.

At $48 a share, Ar­ray $AR­RY in­vestors will be get­ting a 62% pre­mi­um off the Fri­day close of $29.59.

Pfiz­er, which has strug­gled to gain all the up­side promised in past buy­outs like Medi­va­tion, high­light­ed the ac­qui­si­tion of 2 ap­proved drugs in the deal — Braftovi (en­co­rafenib) and Mek­tovi (binime­tinib).

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Gene ther­a­py R&D deals turn red hot as Big Phar­ma steps up to play

This September will mark the 20th anniversary of the death of Jesse Gelsinger, a young man suffering from X-linked genetic disease of the liver. He was killed in a gene therapy study conducted by Penn’s James Wilson, and the entire field endured a lengthy deep freeze as the field grappled with the safety issues inherent in the work.

Some thought gene therapy R&D would never survive. But it did. And this year marked a landmark approval for Zolgensma, a new gene therapy for spinal muscular atrophy Novartis priced at $2.1 million.

“Gene therapy is the hottest item on the block now. But there was a time when we first got into this trial, where there wasn’t a person in the world who believed that gene therapy would work. We have to remember that,” noted gene therapy investigator Jerry Mendell told SMA News Today.

We’re still right on the pioneering frontier when it comes to getting approvals for gene therapies and launching marketing campaigns with the European green light for bluebird's leading program last Friday underscoring the nascent nature of the field. But gene therapy R&D is booming, and has been for several years now.

The rapid growth of gene therapy clinical development is well known, but we decided to put some numbers on it, to quantify what’s going on. DealForma chief Chris Dokomajilar took a lot over the past 10 years, as the number of deals, R&D partnerships and buyouts steadily gained steam, spiking last year and on track to maintain the surge in 2019.

The upfronts and totals for the dollars on deals so far in 2019 is already close to the 2018 mark, underscoring a new phase of negotiations as the major players step up to gain a piece of the late-stage and commercial action.

Once again, we’re looking at an “overnight” biotech success story, decades in the making.

At some point, that may start to brake the numbers we’re seeing. But for now, as rivals line up to compete for frontline prominence across a range of diseases, the arrows are all pointed north.

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A uni­corn stalks Wall Street in search of IPO cash; CASI Phar­ma in-li­cens­es CD19 ther­a­py from Chi­na’s Ju­ven­tas

→ A herd of up­start biotechs will look to Wall Street for some ma­jor wind­falls this week as a burst of new of­fer­ings con­tin­ues to feed cash in­to the R&D sys­tem. To­day we learned that Bridge­Bio will look to raise in the neigh­bor­hood of $225 mil­lion by of­fer­ing 15 mil­lion shares for $14 to $16 each. And they have a string of joint bookrun­ners: J.P. Mor­gan, Gold­man Sachs, Jef­feries, SVB Leerink, KKR, Piper Jaf­fray, Mizuho Se­cu­ri­ties, BMO Cap­i­tal Mar­kets and Ray­mond James. If suc­cess­ful, Bridge­Bio will emerge with a mar­ket cap of around $1.7 bil­lion. There are 5 biotechs look­ing to IPO this week, in­clud­ing Akero and Pre­vail.

UP­DAT­ED: Sanofi Gen­zyme deserts gene ther­a­py de­vel­op­er Voy­ager Ther­a­peu­tics

While gene ther­a­py com­pa­nies re­joice as the sec­tor gains trac­tion with ap­provals and a flur­ry of M&A ac­tiv­i­ty, one play­er is feel­ing the heat.

Back in 2015, Voy­ager Ther­a­peu­tics joined forces with Sanofi Gen­zyme in a deal worth up to $845 mil­lion ($100 mil­lion up­front + a po­ten­tial $745 mil­lion in mile­stones) to co-de­vel­op gene ther­a­pies for se­vere cen­tral ner­vous sys­tem dis­or­ders. But two years lat­er, the French drug­mak­er re­treat­ed, elect­ing to not pick up the op­tion to work on Voy­ager’s Parkin­son’s dis­ease pro­gram. (Last year, the FDA dis­ap­point­ed Voy­ager, telling the com­pa­ny that it was not open to an ac­cel­er­at­ed fil­ing on the Parkin­son’s drug on the ba­sis of Phase II da­ta — in­stead of re­quir­ing an ad­di­tion­al piv­otal study.)

In­vestors fret as VBI's hep B vac­cine fails key sec­ondary PhI­II study goal

Sobered by mount­ing costs, Dy­navax $DVAX last month made the de­ci­sion to fo­cus all its re­sources on its 2017-ap­proved he­pati­tis B vac­cine Hep­lisav-B, which ri­vals and su­per­sedes the ef­fi­ca­cy and con­ve­nience pro­file of GSK’s $GSK es­tab­lished En­ger­ix-B. The Cal­i­for­nia-based com­pa­ny will be on the look­out for an­oth­er com­peti­tor — VBI Vac­cines, which on Mon­day un­veiled late-stage da­ta on its hep B vac­cine: Sci-B-Vac.

John Oyler, Founder & CEO of BeiGene, at the US-China Biopharma Innovation and Investment Summit in Shanghai on October 23, 2018; Credit: Endpoints News, PharmCube

UP­DAT­ED: As Bris­tol-My­ers/Cel­gene tie up loose ends, BeiGene pock­ets $150M from PD-1 breakup

As soon as Bristol-Myers Squibb announced its $74 billion buyout for Celgene, BeiGene emerged as a prominent example of a player whose pact with the big biotech could sour, as its PD-1 candidate seems to overlap with Opdivo. After six months of suspense, the partners say they are finally bringing the 2-year-old deal to an amicable end.

BeiGene $BGNE gets $150 million for the termination in addition to full global rights to tislelizumab. In 2017 Celgene had paid $263 million in upfront license fees to develop the PD-1 inhibitor for solid cancers in the US, Europe, Japan and the rest of the world outside Asia. It also threw in a $150 million equity investment in exchange for BeiGene handling its commercial operations — think Abraxane, Revlimid and Vidaza — in China.

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Exterior of the 1 million square foot Discovery Labs in Upper Merion, PA (PR Newswire)

Philadel­phia cham­pi­ons life sci­ences 'co-work­ing,' re­viv­ing for­mer GSK cam­pus in $500M makeover

In a boost to Philadel­phia’s thriv­ing life sci­ences scene, a for­mer Glax­o­SmithK­line cam­pus and a near­by site has been turned in­to what its de­vel­op­er calls “the largest cowork­ing ecosys­tem” for health­care com­pa­nies in the coun­try.

The Dis­cov­ery Labs, a com­pa­ny spawned by MLP Ven­tures, has se­lect­ed two lo­ca­tions in the King of Prus­sia area as the $500 mil­lion test case for its strat­e­gy of ac­quir­ing and con­vert­ing old phar­ma­ceu­ti­cal R&D fa­cil­i­ties world­wide. The sites add up to 1.64 mil­lion square feet.

Gene ther­a­pies seize the top of the list of the most ex­pen­sive drugs on the plan­et — and that trend has just be­gun

Anyone looking for a few simple reasons why the gene therapy field has caught fire with the pharma giants need only look at the new list of the 10 most expensive therapies from GoodRx.

Two recently approved gene therapies sit atop this list, with Novartis’ Zolgensma crowned the king of the priciest drugs at $2.1 million. Right below is Luxturna, the $850,000 pioneer from Spark, which Roche is pushing hard to acquire as it adds a gene therapy group to the global mix.

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Glob­al Blood Ther­a­peu­tics poised to sub­mit ap­pli­ca­tion for ac­cel­er­at­ed ap­proval, with new piv­otal da­ta on its sick­le cell dis­ease drug

Global Blood Therapeutics is set to submit an application for accelerated approval in the second-half of this year, after unveiling fresh data from a late-stage trial that showed just over half the patients given the highest dose of its experimental sickle cell disease drug experienced a statistically significant improvement in oxygen-wielding hemoglobin, meeting the study's main goal.

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