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.

A New Fron­tier: The In­ner Ear

What happens when a successful biotech venture capitalist is unexpectedly diagnosed with a chronic, life-disrupting vertigo disorder? Innovation in neurotology.

That venture capitalist was Jay Lichter, Ph.D., and after learning there was no FDA-approved drug treatment for his condition, Ménière’s disease, he decided to create a company to bring drug development to neurotology. Otonomy was founded in 2008 and is dedicated to finding new drug treatments for the hugely underserved community living with balance and hearing disorders. Helping patients like Jay has been the driving force behind Otonomy, a company heading into a transformative 2020 with three clinical trial readouts: Phase 3 in Ménière’s disease, Phase 2 in tinnitus, and Phase 1/2 in hearing loss. These catalysts, together with others in the field, highlight the emerging opportunity in neurotology.
Otonomy is leading the way in neurotology
Neurotology, or the treatment of inner ear neurological disorders, is a large and untapped market for drug developers: one in eight individuals in the U.S. have moderate-to-severe hearing loss, tinnitus or vertigo disorders such as Ménière’s disease.1 With no FDA-approved drug treatments available for these conditions, the burden on patients—including social anxiety, lower quality of life, reduced work productivity, and higher rates of depression—can be significant.2, 3, 4

Joe Jimenez, Getty

Ex-No­var­tis CEO Joe Jimenez is tak­ing an­oth­er crack at open­ing a new chap­ter in his ca­reer — and that in­cludes a new board seat and a $250M start­up

Joe Jimenez is back.

The ex-CEO of Novartis has taken a board seat on Century Therapeutics, the Versant and Bayer-backed startup focused on coming up with a brand new twist on cell therapies for cancer — a field where Jimenez made his mark backing the first personalized CAR-T approved for use.

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Can we make the an­tibi­ot­ic mar­ket great again?

The standard for-profit model in drug development is straightforward. Spend millions, even billions, to develop a medicine from scratch. The return on investment (and ideally a tidy profit) comes via volume and/or price, depending on the disease. But the string of big pharma exits and slew of biotech bankruptcies indicate that the model is sorely flawed when it comes to antibiotics.

The industry players contributing to the arsenal of antimicrobials are fast dwindling, and the pipeline for new antibiotics is embarrassingly sparse, the WHO has warned. Drugmakers are enticed by greener pastures, compared to the long, arduous and expensive path to antibiotic approval that offers little financial gain as treatments are typically priced cheaply, and often lose potency over time as microbes grow resistant to them.

Eye­ing a trio of tri­al ini­ti­a­tions, Jim Wilson's gene ther­a­py start­up woos Bruce Gold­smith from Deer­field as CEO

Passage Bio — Jim Wilson’s self-described “legacy company” — has wooed a seasoned biotech executive to steer the clinical entry of its first three gene therapy programs.

Bruce Goldsmith jumps to the helm of Passage after a brief CEO stint at Civetta, a cancer-focused startup he helped launch while a venture partner at Deerfield. He takes over from OrbiMed partner and interim chief Stephen Squinto, who will now lead the R&D team.

Amber Saltzman (Ohana)

Flag­ship's first ven­ture of 2020 is out, and it's all about sperm

A couple years ago, Amber Salzman got a call as she was returning East full-time after a two-year stint running a gene therapy company in California.

It was from someone at Flagship Pioneering, the deep-pocketed biotech venture firm. They had a new company with a new way of thinking about sperm. It had been incubating for over a year, and now they wanted her to run it.

“It exactly fit,” Salzman told Endpoints News. “I just thought I had to do something.”

Pfiz­er ax­es 6 ear­ly to late-stage can­cer stud­ies from the pipeline — with one oth­er cut for sick­le cell dis­ease

Pfizer trimmed a group of 3 R&D programs using their PD-L1 Bavencio — partnered with Merck KGaA — in their latest pipeline cull.

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UP­DAT­ED: In­cyte scores much need­ed PhI­II suc­cess — and of course it’s de­liv­ered by rux­oli­tinib

Incyte’s efforts to breathe a second life into ruxolitinib — its JAK inhibitor sold in pill form as Jakafi — has been greeted with clear, if preliminary and unsurprising, Phase III success.

Topline data from the TRuE-AD2 cements ruxolitinib’s foundational importance for Incyte, and gives analysts hope that there might yet be room for growth in a pipeline that’s suffered multiple R&D setbacks.

Stephen Hahn, AP

The FDA un­veils a new reg­u­la­to­ry frame­work to speed along gene ther­a­pies, re­ward­ing the lead­ing play­ers

Bioregnum Opinion Column by John Carroll

The emphasis at the FDA over the past 5 years or so has been on assisting drug developers as much as they can to speed up regulatory reviews and push more drugs into the market. And they are now crafting a final set of regulations aimed at flagging through a whole new generation of gene therapies in clinical testing at a rapid clip.

In a set of 6 prospective guidances posted on the FDA web site Tuesday morning, FDA commissioner Stephen Hahn committed the agency to staying flexible in handing out designations that are critical to gaining early approvals for drugs that claim to be once-and-done but don’t have anything close to the data needed to prove it.

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Mike Bloomberg (AP IMAGES)

Mike Bloomberg joins a grow­ing cho­rus of De­mo­c­ra­t­ic pres­i­den­tial can­di­dates threat­en­ing to go af­ter drug patents

As the mayor of New York City, Mike Bloomberg had a few modest ideas about lowering prescription drug prices in the Big Apple that gained little traction. Now on the campaign trail on a faint hope of clinching the Democratic presidential nomination, the billionaire has some bigger plans — including one that would alter the patent system central to the biopharma business.

In a barebones drug pricing plan posted on Monday, Bloomberg came out blasting President Donald Trump for failing to deliver his promise to lower drug prices, and then making misleading claims about them. The price of over 3,000 drugs still increased at a rate five times higher than inflation in the first six months of 2019, he wrote.