Atlas Venture raises $250M for later-stage investments

Atlas Venture has raised $250 million to invest in existing portfolio companies. The fund, the first of its kind operated by Atlas, will enable the VC shop to support its startups through series B and beyond.

Massachusetts-based Atlas made its name creating, incubating and investing in biotechs out of its space in Kendall Square. The early-stage operation has supported a string of startups, such as Padlock and Unum Therapeutics, to IPOs and trade sales. But the focus of the fund rendered Atlas unable to keep bankrolling its biotechs as their financial requirements ramped up.

Atlas Venture Opportunity Fund I (AVOF I) is the VC shop’s remedy for that problem. Having wrapped up an oversubscribed fundraise, Atlas Venture has $250 million to support its portfolio companies as they get to series B and beyond.

By moving into later-stage investing, Atlas Venture is making use of the resources that have served it well in new company formation. That means the five investing partners responsible for building biotechs—Kevin Bitterman, Bruce Booth, Jean-François Formela, David Grayzel and Jason Rhodes—will also oversee the investment of AVOF I.

The creation of AVOF I follows similar moves by two funds that lead the early-stage space in Europe, namely Medicxi and Sofinnova Partners. Like Atlas, Medicxi and Sofinnova Partners built their reputations on seed and series A investments. Medicxi moved beyond that niche in 2017 when it raised a $300 million growth fund. Sofinnova followed in 2018 with a $340 million crossover fund.

In each case, the funds give the organization a chance to maintain a sizable stake in its portfolio companies as they advance and need more money to support their operations. Without such financial support, biotechs can be forced to accept partnering and buyout deals that offer suboptimal returns for investors.

https://www.fiercebiotech.com/biotech/atlas-venture-raises-250m-for-later-stage-investments

Celgene invests in Chinese biotech Antengene again

China’s Antengene has raised another $120 million in a second-round financing, with partner Celgene contributing to the tally.

The series B comes after an initial $21 million opener in mid-2017 and a licensing deal with Celgene that gave Antengene East and Southeast Asian rights to ATG-008, a TORC1/2 inhibitor in late-stage testing for the treatment of hepatitis B virus-positive hepatocellular carcinoma.

The latest investment was led by Chinese VCs Boyu Capital and FountainVest, with Celgene, WuXi Corporate Venture Fund, Taikang, Qiming Venture Partners and TF Capital also joining the round.

Antengene said in an update that it will use the proceeds for the development of ATG-008—which is known by Celgene as CC-223 but doesn’t appear in the U.S. biotech’s current pipeline listing—as well as ATG-010 (selinexor), originally developed by Karyopharm and licensed in Asian markets by Antengene last May, along with “other clinical-stage assets.”

The latter include two other selective inhibitor of nuclear export (SINE) drugs—AGT-016 (eltanexor) and ATG-527 (verdinexor)—and a PAK4/NAMPT dual inhibitor (AGT-019), all of which are also licensed from Karyopharm.

ATG-010, billed as a first-in-class SINE, is in late-stage clinical trials for a range of blood cancers and solid tumors, including multiple myeloma, diffuse large B-cell lymphoma and liposarcoma.

Jay Mei, founder and CEO of Antengene—who has also seen stints at Celgene, Novartis and Johnson & Johnson—said: “This round of financing is critical for Antengene’s growth. We will continue to maintain and advance rigorous, science-driven, and patient-centered R&D, while actively preparing for the commercialization of our lead products in China and the Asia-Pacific region.”

The company is in the process of building a manufacturing and research facility in Shaoxing to provide clinical and commercial supply of its pipeline drugs.

Celgene has said previously it views its arrangement with Antengene as the foundation for a possible strategic partnership between the two companies, and its participation in the latest funding round suggests that is still in the cards. Celgene has suggested Antengene could operate as a conduit to bring some of its other novel drugs to Asian markets.

https://www.fiercebiotech.com/biotech/celgene-invests-chinese-biotech-antengene-once-again

How heat and salt may contribute to multiple sclerosis

Worldwide, about 3 million people are afflicted by multiple sclerosis (MS), an incurable autoimmune disease in which the immune system attacks the fatty membrane (myelin sheath) that insulates the long extensions of nerve cells.

Damaged myelin prevents nerves from communicating with the brain properly, causing symptoms such as blurred vision, difficulty in walking, dizziness and muscular weakness.

Although there are therapies that can slow the progression of the disease — including the drug Copaxone developed at the Weizmann Institute of Science in Israel — the causes for MS onset are still not fully known.

Researchers from Prof. Roy Beck-Barkai’s lab at Tel Aviv University’s School of Physics, in collaboration with researchers from the Technion and the Weizmann Institute (including Prof. Ruth Arnon, one of Copaxone’s co-developers), set out to find how small structural changes in the membranes affect the myelin layer’s function.

In a previous study done in 2016, they found that the myelin sheath’soptimal function as an insulating layer depends on how these membranes are organized.

When functioning at their best, myelin membranes are stacked on top of one another like layers of puff pastry. But sometimes myelin membranes instead are shaped like tubes, and this abnormal structure disrupts function and potentially leads to diseases such as MS.

“After discovering that structural changes in the membranes can affect disease development, we attempted to unveil the factors that may lead to these changes,” Beck explained.

Heat and salt

As physicists, the researchers already knew that temperature and salt concentration may affect the membranes’ molecular structure. They found additional clues supporting this theory, and took them in new directions.

The first clue came from studies showing a possible connection between a high-salt diet and disease progression, and the widely accepted recommendations to MS patients to maintain a balanced diet.

Another clue was found in the work of German doctor Wilhelm Uhthoff. As early as 1890, he observed that MS patients experience vision problems following hot showers or physical exercise. Unthoff therefore used hot baths as a tool for diagnosing the disease.

To test their hypotheses, the researchers used electron microscopy and x-ray diffraction to examine how changes such as temperature and salt concentrations in the cellular environment affected the structure of the myelin membranes isolated from pig and sheep brains.

They found that a high salt concentration or high temperature (42 degrees Celsius or 107.6 Fahrenheit) in the cellular environment indeed caused the membranes to shift from the normal stacked structure to the deformed tube-like structure.

The researchers believe that this structural change exposes the proteins important for maintaining the normal myelin structure to the immune system, which attacks them and damages the myelin itself.

The study was published in the journal Proceedings of the National Academy of Sciences (PNAS)

Though the experiments were conducted on membranes in a test tube, their results may mirror the cell changes that take place in a living organism, said Beck.

“These are directions that researchers have not previously looked into,” he said.

“While the cause for the disease is still not completely clear, the new finding takes us one step further to a deeper understanding of its mechanisms. Discoveries like ours further our understanding of the cellular mechanisms that may contribute to the development of diseases like MS, and can form the basis for the search for novel drugs and treatments.”

The study was led by PhD student Rona Shaharabani, and was conducted in collaboration with Prof. Yeshayahu Talmon and PhD student Maor Ram-On from the Technion.

https://www.israel21c.org/how-heat-and-salt-may-contribute-to-multiple-sclerosis/?fbclid=IwAR3sVto-BRyO2IpFXMFnXT-7YHHeeiKr-aOjVNAjdMq5aAvMCfZQ8qDGbBc

Promethera looks to Asia with €10m investment

Belgium-based liver disease specialists Promethera Biosciences have received a leg-up for the Asian market in the form of a €10 million investment from Japanese business conglomerate ITOCHU Corporation.

ITOCHU is the first lead investor in Promethera’s Series D round, which the company expects to close in Q1 2019. Following the transaction, Tajio Enoki, manager, medical business team, chemicals division, energy & chemicals company, ITOCHU Corporation, will join the company’s Board of Directors as a director.

Beyond the investment, ITOCHU intends to support Promethera to advance its product and business development strategy in Asia. The scope of the relationship includes R&D support for Promethera’s HepaStem development program in acute-on-chronic liver failure (ACLF), non-alcoholic steatohepatitis (NASH) and urea cycle disorder (UCD) in selected Asian markets.

“We are very honored to have ITOCHU Corporation a premier Japanese conglomerate with a strong outreach to the wider Asian hemisphere, come in as the first lead investor in our next fundraising effort,” said John Tchelingerian, Promethera’s president and CEO.

“With HepaStem at the core of our relationship with ITOCHU, we expect to make important progress in our plan to develop the world’s first cell-based treatment for severe chronic and acute liver diseases as a tangible alternative to liver transplantation,” added Proffesor Etienne Sokal, CMO and founder of Promethera.

HepaStem consists of liver-derived Mesenchymal Stem Cells that are obtained from ethically healthy donated human organs and expanded in the lab. The product candidate is currently being evaluated in a phase 2a clinical trial in the indication ACLF with safety and initial efficacy results expected to be available early 2019. The initiation of clinical trials in NASH is expected for 2019.

In addition to the first tranche of the Series D round, Promethera has recently raised €14.6 million through the issuance of convertible bonds to existing and new investors, bringing the total amount raised in by the company to date to more than €90 million.

https://pharmaphorum.com/news/promethera-looks-to-asia-with-e10m-investment/

Pharma firms face shake-up with China’s plan to bulk-buy drugs

• Pilot programme involves major cities clubbing together to purchase certain medicines, driving down prices
• Chinese companies that have invested heavily in R&D stand best chance of survival

China’s plan to drive down generic drug prices through a centralised bulk procurement programme is set to redraw the industry by forcing its thousands of small generic drug makers to streamline and consolidate after decades of enjoying outsized profit margins.

“There won’t be a second act for traditional generic drug makers in China,” said Dai Ming, Shanghai-based fund manager at Hengsheng Asset Management.

“In the past, there was hope that these companies would benefit from more government investment in health care due to the ageing population, but now these health care stocks will be further hurt by policy and undergo a greater correction.”

To survive the shifting landscape and rely less on generics – drugs whose patents have expired – many companies are scrambling to pump money into research and development.

Discovering a new medicine allows companies to earn high profits for as long as the new drug is covered by a patent, balancing out the loss of revenue from the fall in generic drug prices.

Chinese companies had been in a sweet spot. Among the top 100 generic drug makers, Chinese firms had a 74 per cent gross margin and an 18 per cent profit margin in the third quarter, compared with a global average of 55 per cent and 9.5 per cent, respectively, according to data compiled by Bloomberg.

The privileged position was due to the quirks of China’s regulatory system. While multinational giants had to wait years for approval to import their new drugs, the domestic generic makers could do a thriving business in copying, testing and getting local permission for the medicines.

At the same time, the industry benefited because of the lack of a centralised system for quality control. Multinationals like Pfizer and AstraZeneca could win more hospital tenders for their off-patent drugs, as they could more easily offer quality assurances for their higher-cost medicines. That kept prices elevated throughout the pharmaceutical sector.

Now, China has embarked on a pilot programme in which major cities bulk-buy certain drugs together, forcing companies to bid for contracts and driving down prices by an average of 52 per cent, one by as much as 90 per cent. Last week, Chinese Vice-Premier Sun Chunlan said China would be expanding the programme to cover more cities and drugs, as medicine prices must fall for health care to be affordable for the people.

Chinese companies that are already heavily invested in research and development (R&D) stand the best chance of surviving the new landscape. Among mainland shares, Jiangsu Hengrui Medicine has invested the most in research by far, amounting to 16 per cent of revenue in the latest quarter.

Guangzhou-based Yipinhong Pharmaceutical is in second place with 8.4 per cent. Zhejiang Jingxin Pharmaceutical, Chengdu Kanghong Pharmaceutical Group and Tianjin Lisheng Pharmaceutical have invested about 8 per cent of sales into research.

Among Hong Kong-traded shares, CSPC Pharmaceutical Group has 8.14 per cent of sales invested in research and Sino Biopharmaceutical has 6.23 per cent.

At present, Jiangsu Hengrui gets 20 per cent of its revenue from novel drugs and 80 per cent from generics, a ratio it wants to flip, according to Lianshan Zhang, its president of global R&D.

But a successful novel drug can take decades to develop, and the Chinese pharmaceuticals are up against the deep pockets and research talent of the multinationals, who are now enjoying rapid approval from Chinese regulators for their new medicine.

And since their investment funds came from revenue generated by generics, the plunge in prices might set off a vicious circle, analysts said.

“With generic drug revenue being compressed, there’s a chance that it can’t cover the necessary investment to transition to novel drugs,” Huarong Securities analyst Zhang Keran said. “The market does worry whether or not there will be sustainable cash flow going forward.”

https://www.scmp.com/news/china/society/article/2180378/chinas-new-drug-procurement-plan-set-hit-its-pharma-firms-profit

Prana Biotechnology gains on raising US$31.4M

Prana Biotechnology (NASDAQ:PRAN) has entered into a securities purchase agreement with Life Biosciences LLC to raise up to ~A$44.5M (~US$31.4M).

Life Biosciences will initially invest US$7.5M (~A$10.6M), with the agreement allowing Prana to raise an additional US$2M. A further amount of up to ~US$21.9M (~A$31M) would be invested by Life Biosciences and other investors on exercise of short-term warrants being issued as part of the transaction.

The transaction involves an issue of ~272M new fully paid ordinary shares in the capital of Prana. The Ordinary Shares would be issued at A$0.0390 (3.9 cents) and the Warrants would have an exercise price of A$0.0450 (4.5 cents).

https://seekingalpha.com/news/3419973-prana-biotechnology-plus-84-percent-raising-us-31_4m

Pharmacies to Stop Selling Tobacco Products Citywide in January

The New York City Health Department announced today that cigarettes and other tobacco products will be banned from sale in all pharmacies across the five boroughs, including supermarkets and big-box stores with a pharmacy section, come January 1.

The policy is part of Mayor de Blasio’s package of bills, signed into law in 2017, aimed at reducing tobacco use among New Yorkers—something the city reports still causes 12,000 deaths each year.

While smoking rates have declined, more than 860,000 adults and 13,000 youth still smoke in New York City, putting themselves at risk of stroke, diabetes, heart disease, lung disease and several types of cancer, the health department said.

“Tobacco use remains of one of the leading causes of preventable death in New York City, and reducing its availability is key to protecting the health of New Yorkers,” said Dr. Herminia Palacio, Deputy Mayor for Health and Human Services, in a statement. “People trust pharmacies to help them stay well—they should be helping smokers quit, not the opposite.”

National drugstore magnate CVS voluntarily stopped selling tobacco products in 2015, and was soon joined by several independent pharmacies. About 500 pharmacies across the city, however, still sell tobacco.

The new policy is predicted to reduce the number of smokers in New York City by 160,000 over the next three years by cutting the number of cigarette retailers in half, said Council Member Brad Lander.

“Strong evidence shows that just being exposed to nearby tobacco retailers make kids twice as likely to smoke,” Lander said.

The tobacco ban follows legislation that banned e-cigarette sales in pharmacies, which went into effect in August 2017, and other signed laws meant to curb tobacco use, like the price hike on tobacco products and a cap on the number of tobacco retailers citywide.

Cigarettes and tobacco products can only be sold in the city with a valid tobacco retail dealer license. Selling these products with a license is a misdemeanor, and those caught selling without a valid license two times in three years can see their stores temporarily closed.

https://ridgewoodpost.com/pharmacies-to-stop-selling-tobacco-products-citywide-in-january