Insys Therapeutics Files for Bankruptcy Following Legal Trouble

Days after agreeing to pay nearly $225 million in additional fines to the U.S. government for its fraudulent marketing schemes to boost sales of Subsys, Arizona-based Insys Therapeutics has filed for bankruptcy.

This morning the beleaguered company said it entered into bankruptcy protection in order to facilitate the sale of all of the company’s assets following its extensive legal problems stemming from past practices over the fraudulent practices the company used to increase the sales of its powerful opioid Subsys. Insys said it will continue to operate its business in the ordinary course of things while it pursues a court-supervised sale. Investors were not happy with the announcement. Shares of Insys plunged in premarket trading by nearly 69% to 90 cents per share. The stock had closed at $1.31 on Friday, a jump of nearly 14%.

The company predicted it might run out of cash several months ago. In March, Insys announced in a filing with the U.S. Securities and Exchange Commission that it did not have the assets to cover its legal obligations and would likely have to resort to the sale of its assets to cover those debts. Only weeks ago, Insys noted in its quarterly report that it had available cash of $87.6 million, which was well below what the company owed from the Subsys litigation, the $225 million it agreed to pay last week, as well as a $150 million agreement with the U.S. Department of Justice the company struck last fall. That announcement came after company founder John Kapoor and four co-defendants were found guilty of orchestrating kickback schemes to encourage doctors to boost prescriptions of Subsys.

Insys has sought to divest Subsys and other opioid-related products in its pipeline as the company hoped to reinvent itself to become a leader in pharmaceutical cannabinoids. Since 2016, the company had invested more than $200 million to effect that change.

As the company goes through the bankruptcy process, Insys said it will use existing cash on hand, as well as cash generated from operations, to continue its regular business practices, including the payment of all employee wages and benefits without interruption, as well as continuing programs offered to customers. The company said it also intends to pay its vendors and suppliers in full under normal terms while the bankruptcy proceedings are ongoing.

“After conducting a thorough review of available strategic alternatives, we determined that a court-supervised sale process is the best course of action to maximize the value of our assets and address our legacy legal challenges in a fair and transparent manner,” Insys Chief Executive Officer Andrew G. Long said in a statement.

Long added that the company has an assortment of compelling assets, as well as a “highly talented team.” He said the Chapter 11 process will provide the company the forum to “negotiate an equitable resolution” with its creditors and represents the best opportunity for the company.

Over the past year, Insys had sought several cost-cutting measures due to declining revenues. In July 2018, the company slashed 45 positions, 30 of which were part of the sales and marketing team. Insys cut another 48 employees in November 2018. The cuts in November were also primarily to the sales and marketing team, with 36 positions eliminated there.

https://www.biospace.com/article/insys-therapeutics-files-for-bankruptcy/

Merck Buys Tilos for Up to $773 Million to Expand Oncology Pipeline

Kenilworth, NJ-based Merck & Co. is buying Lexington, Mass.-based Tilos Therapeutics in a deal that could hit $773 million.

Tilos focuses on developing drugs that target the latency-associated peptide (LAP)-TGF beta complex to treat cancer, fibrosis and autoimmune diseases. TGF beta stands for transforming growth factor beta. The company was founded based on the research of Galina Gabriely and Howard Weiner at the Brigham and Women’s Hospital. Weiner’s work focused on serious autoimmune diseases, which led to LAP and the expression of LAP on suppressive cell populations. The laboratory developed antibodies to LAP, which have an effect on tumor growth.

“At Merck we continue to enhance our robust pipeline through active execution of our business development strategy,” stated Dean Li, Senior Vice President of Discovery and Translational Medicine at Merck Research Laboratories. “Tilos has developed a compelling portfolio of candidates that employ a novel approach to modulating the potent signaling molecule TGF beta by binding to latency-associated peptide, with potential applications across a range of disease indications.”

Under the terms of the deal, a Merck subsidiary is buying all outstanding shares of Tilos for a total of up to $773 million, including an upfront payment and various potential milestone payments.

Tilos was founded by Boehringer Ingelheim Venture Fund and Partners Innovation Fund. Additional investment was by ShangPharma Innovation Fund.

TGF beta is secreted with LAP. LAP creates a cage around TGF beta, holding it in an inactive state until it is needed. Research has indicated that anti-LAP antibodies block the release of TGF beta from the TGFB-LAP complex.

“We are proud that the Tilos team has advanced the discoveries of our scientific founders by developing a portfolio of anti-LAP antibodies designed to realize the full potential of TGFB-modulating therapeutics,” stated Barbara Fox, chief executive officer of Tilos. “This agreement with Merck, an industry leader in biopharmaceutical research and development, provides meaningful validation for our therapeutic approach and best positions our pipeline for broad clinical and commercial success.”

TGF beta is produced by a broad spectrum of immune cells. When activated, it can promote cancer by several different mechanisms, including angiogenesis and metastasis and by stimulating the development and differentiation of Tregs (T regulatory cells) and other immunosuppressive cell types. Tilos’ approach is to prevent the activation and release of mature TGF beta.

The primary focus has been in cancer with testing of the anti-TGFB antibodies with checkpoint inhibitors. The antibodies are being investigated in melanoma, glioblastoma and colorectal cancer. Other cancers include renal, hepatocellular, lung, breast and pancreatic cancers. It also has potential for treatments for various autoimmune diseases and fibrosis.

Merck is interested in ways of broadening the potential of its checkpoint inhibitor Keytruda (pembrolizumab). Although in many ways a miracle drug, only a small percentage of patients respond to checkpoint inhibitors like Keytruda. Anti-TGFB may help with the effectiveness of checkpoint inhibitors.

This deal is the third cancer-focused deal Merck has made recently. It acquired Immune Designin February for $300 million and in May bought Peloton Therapeutics for $2.2 billion.

https://www.biospace.com/article/merck-buys-tilos-in-potential-773-million-deal/

EHealth to announce guidance boost in Q2 call

In a regulatory filing, eHealth (EHTH -1.1%) discloses that it intends to announce an upward revision to its 2019 guidance during its Q2 earnings call (~July 25).

Current guidance: Revenue: $315M – 335M; Medicare segment revenue: $281M – 297M; EPS: $0.60 – 0.79; non-GAAP EPS: $1.54 – 1.73; non-GAAP EBITDA: $55M – 60M; cash consumption by operations: $20M – 25M.

Sell Side rating is Outperform. Quant rating is Neutral.

https://seekingalpha.com/news/3470112-ehealth-announce-guidance-boost-q2-call

Evolus Nuceiva nod in Europe may be extended 90 days

Evolus (EOLS -1.4%) reports that the expected approval of Nuceiva (prabotulinumtoxinA-xvfs)(branded as Jeuveau in the U.S.) by the European Commission may be delayed 90 days to allow it to review supplementary information that it requested from the European Medicines Agency and its advisory group CHMP.

In late April, CHMP adopted a positive opinion backing approval.

https://seekingalpha.com/news/3470122-nuceiva-nod-europe-may-extended-90-days

Prevail Therapeutics readies $125M IPO

Prevail Therapeutics (PRVL) has filed a prospectus for an IPO of 7,353,000 common shares at $16 – 18.

The New York City-based biotech develops AAV-based gene therapies for patients with neurodegenerative disorders who have particular genetic profiles. Lead candidate is PR001 for the treatment of GBA1 mutation-positive Parkinson’s disease (about 7 – 10% of total cases) and neuronopathic Gaucher disease (about 6% of all cases).

2019  Financials (Q1): Operating Expenses: $10.3M (+442.1%); Net Loss: ($9.9M) (-209.4%); Cash Burn: ($12.3M) (-999%).

https://seekingalpha.com/news/3470133-prevail-therapeutics-readies-125m-ipo

BioXcel Pharmaceuticals CEO On Drug Pipeline, How AI Is Changing Sector

A biotech that’s using artificial intelligence to identify neuroscience and immuno-oncology medicines received FDA approval for an investigational new drug application this week, and Benzinga connected with its CEO for more insight on the company’s innovation efforts.

New Haven, Connecticut-based BioXcel Pharmaceuticals announced Monday that its IND was accepted by the FDA to initiate a clinical trial for the triple immuno-oncology combination of BXCL701, bempegaldesleukin and avelumab for the treatment of pancreatic cancer as a second-line therapy.

BioXcel is collaborating with partners including Nektar Therapeutics NKTR 1.12% and Pfizer Inc. PFE 0.28% for the trial.

In addition, BioXcel announced that the United Kingdom’s Medicines and Healthcare products Regulatory Agency granted a clinical trial authorization for a Phase 1b/2 trial evaluating the combination of BXCL701 and pembrolizumab in treatment emergent neuroendocrine prostate cancer.

BioXcel Pharmaceuticals CEO Dr. Vimal Mehta updated Benzinga on the company’s pipeline in a Q&A session, and his answers have been edited for length and clarity.

Benzinga: BioXcel is an AI-driven biotech, and your company is the first to use AI to identify compounds and bring them into the clinic. Can you give us some insight on the industry and the difference than AI can make?   

Mehta: AI has a different definition for different people, but primary AI in our opinion is when we look at how it augments the intelligence of our drug development team. So we use AI machine learning to understand millions of data points in the publication. There are 5,000 applications being published per day. And it is very difficult for the human mind to be able to absorb all that information.

We use machine learning, and once we have defined a problem, we try to identify compounds that have the potential to meet medical needs. BXLC-501 has received fast track designation from the FDA. It’s focused on the treatment of acute agitation.

Agitation is a large health care burden in the hundreds of millions of dollars. There aren’t many treatment options for these patients.

It is a pretty large social problem, and we are trying to address that by developing a BXLC-501 supplement that is put under the tongue. It’s minty in taste and will start working very rapidly.

The diseases we are targeting for this product [include] agitation and dementia from opium withdrawal symptoms. That’s a national crisis, and patients need to get off opium.

Benzinga: The two lead programs that the company is working on using AI are neurology and immuno-oncology. What are some of the latest Phase 1 results from the neurology BXCL-501 program? Any readthrough from these results? 

Mehta: The data shows a high level of confidence that drug is being delivered in order to provide benefits for the patient, and we have initiated a Phase 2 trial.

We will be dialing in the dose needed for schizophrenia. Once we have the data, it will allow us to move this program into the registration trial in schizophrenia and agitation as well as bipolar. We expect to have it by the end of 2019.

The trial will be completed in the first half of 2020, and we expect we will be able to file our first new drug application with the FDA in the second half of 2020. We continue our focus on AI technologies to identify patients.

Benzinga: What are some of the next steps for clinical development moving into Phase 2 and on to Phase 3? What are some of BXCL-501’s strengths? 

Mehta: Phase 2 is designed to make sure that we understand what the response rates are and how effective it is with different doses. We have an understanding of the highest dose and the lowest effective dose and are utilizing that information to power our Phase 3 trial so we can get a significant response in our Phase 3 trial.

In Phase 3, it is expected to be about 300-350 patients for schizophrenia and similarly about 300-350 for bipolar. So it will be a total of 600-700 patients. We are very confident based on what we have already seen, and we have announced this data previously with the current form of the drug.

With a small trial population of 14 patients — 10 on treatment and four on placebo — we saw a 90-percent response rate.

Benzinga: What’s the latest news on the immuno-oncology BXCL-701 program? What can we expect in the near future?

Also: the largest oncology meeting in the world, ASCO, is around the corner — is BioXcel planning on attending? 

Mehta: We are focusing on the immunity of the body. There are two types of immunity — one is innate. When you get an infection with anything in your body, it immediately reacts. The second is adaptive, where you have a response kicking in later on. So we are primarily focusing on immunity.

We are developing a product for neuro prostate cancer a product for pancreatic cancer. For the second, we have a partnership with Pfizer and Merck Serono in Europe. Four companies are working together to crack the problem of pancreatic cancer. We are using three different agents and sharing the cost of development.

In terms of neuro prostate cancer, it will come out at the end of this year. We have an ongoing trial where we are combining BXCL-701 with Keytruda.

https://www.benzinga.com/general/biotech/19/06/13869147/bioxcel-pharmaceuticals-ceo-on-drug-pipeline-how-ai-is-changing-sector

FDA Recommends Novavax Conduct Added Phase 3 Trial On ResVax

Novavax, Inc. NVAX 7.52%, which develops vaccines for infectious diseases, announced updates on its licensure for ResVax. The U.S. Food & Drug Administration has recommend the company conduct an additional Phase 3 trial.

What To Know

ResVax is a late-stage study of Novavax’s respiratory syncytial virus vaccine and has failed to hit its main goal.

Novavax has held meetings with several European national regulatory agencies to solicit input on the prepare trial and possible pathways to licensure in Europe. The next step will be to seek formal scientific advice this fall from the European Medicines Authority (EMA), the agency responsible for licensing vaccines for the European Union.

Why It’s Important

The Bill & Melinda Gates Foundation provided an $89.1 million grant in support of the Prepare trial and will continues to work with Novavax to introduce ResVax to low and middle income countries.

“We remain encouraged by the ResVax efficacy observed with more severe RSV disease and hospitalizations,” said Novavax CEO Stanley Erck in a press release. “These data, coupled with the favorable safety profile of ResVax, demonstrate a positive public health benefit that warrants continued development to address the global unmet medical need in preventing serious RSV disease.”

https://www.benzinga.com/news/19/06/13894301/fda-recommends-novavax-conduct-added-phase-3-trial-on-resvax