Recent IPOs show investor appetite is strong for biotechs

Investor appetite is strong for biotechs. Adaptive Biotechnologies (ADPT) is up on its second day of trading, after soaring more than 95% yesterday. The Seattle-based company, founded in 2009, reads and translates genetic code to develop personalized diagnostics and therapeutics for patients.

The company’s long-term vision is to become an integral part of primary care. ”You go in once a year, you get your blood drawn, we you look at your immune system. And we diagnose many diseases at one time,” said CEO and co-founder Chad Robins.

Microsoft (MSFT) is an investor in the company, which Robins describes an immune medicine information platform. “It’s a convergence play between a kind of biotech, and technology and machine learning with our Microsoft collaboration.”

Adaptive Biotechnologies currently has two commercial products used by researchers and pharmaceutical companies. One is a tool for monitoring minimal residual disease in certain blood cancers. “We can look at whether a drug has worked or not on the patient. And next we can determine whether that patient is potentially going to relapse from a molecular level before they relapse clinically, before they go into a doctor’s office and present with symptoms,” said Robins.

Biotech market

On the same day Adaptive went public, so did Change Healthcare (CHNG), Morphic Holdings (MORF), and BridgeBio Pharma (BBIO), which opened more than 80% above its IPO price.

BridgeBio Pharma focuses on medicines targeting diseases that arise from defects in a single gene, as well as cancers with clear genetic drivers.

“Most diseases are just black boxes, you don’t understand what’s going on,” CEO Neil Kumar told Yahoo Finance. “For the diseases we go after it is very clear, it is that single mutation, and what that enables us to do is to say, how do we counteract exactly what that mutation is doing,” he added.

BridgeBio Pharma highlights that rather than investing in one drug, the company is focusing on 15 development programs, which fall into three categories: Mendelian, Oncology and Gene Therapy.

As with a number of unicorns this year, Morphic, Adaptive Biotechnologies and BridgeBio Pharma fall into the ‘not profitable yet’ category.

Even though BridgeBio Pharma has not generated revenue from product sales, Kumar says his company has a timeline. “Certainly the only way to build something that’s reasonable and sustainable is to get to the point where you have commercial products, where you’re really making a difference for patients,” said Kumar. “Having cash flowing products, I think is a big deal and I think we should be able to get there in the next four to five years,” he added.

Despite the warm IPO reception and recent biotech acquisitions, overall market performance in biotech has lagged the S&P (^GSPC). Biotech companies in particular run the unpredictable risk of trials which may or may not meet endpoints. Earlier this year Biogen (BIIB) plunged 25% when it discontinued its clinical trial for an Alzheimer’s treatment.

https://finance.yahoo.com/news/recent-ipos-show-investor-appetite-is-strong-for-biotechs-191456609.html

Codiak BioSciences withdraws IPO

Citing market conditions, Codiak BioSciences (CDAK) has withdrawn its planned IPO.

https://seekingalpha.com/news/3475070-codiak-biosciences-withdraws-ipo

FDA OKs Foundation Med’s FoundationOne CDx Lynparza companion

The FDA has approved Roche (OTCQX:RHHBY +0.7%) unit Foundation Medicine’s FoundationOne CDx molecular test as a companion diagnostic for AstraZeneca’s Lynparza (olaparib) for first-line maintenance therapy in BRCA mutation-positive ovarian cancer.

The companies and Merck are also collaborating on developing companion diagnostics for Lynparza in prostate cancer.

https://seekingalpha.com/news/3475097-fda-oks-foundation-meds-foundationone-cdx-companion-dx-lynparza

Teva launches 1% sodium hyaluronate in U.S.

Teva Pharmaceutical Industries (NYSE:TEVA) commences the U.S. commercial launch of 1% sodium hyaluronate for the treatment of pain associated with osteoarthritis of the knee in patients who have failed to adequately respond to non-drug therapy and simple painkillers (e.g., acetaminophen).

https://seekingalpha.com/news/3474888-teva-launches-1-percent-sodium-hyaluronate-u-s

Thermo Fisher to manufacture gene therapies being developed by Amicus

Amicus Therapeutics has already forked over $100 million for 10 gene therapies. It is building a new R&D operation to advance them. But when it comes to manufacturing, it is turning to a CDMO.

The New Jersey-based biotech today announced it has an arrangement with Thermo Fisher Scientific’s gene therapy unit to provide clinical supply and commercial production of its gene therapies to cure intrathecal AAV Batten diseases, as it works to get them to the market.

“As we advance one of the industry’s leading gene therapy pipelines, our partnership with Brammer Bio, now part of Thermo Fisher, is a significant next step in fulfilling our manufacturing strategy so that we can deliver novel gene therapies to more people living with rare genetic diseases as quickly as possible, especially in devastating diseases like Batten’s, where time is of the essence,” Amicus CEO John F. Crowley, said in a statement.

He said the company will “embed” its team and strategic partners in the tech transfer process to Thermo Fisher.

New Jersey’s Amicus has been working on drugs to stabilize lysosomal storage disorders (LSDs) like Fabry disease and Pompe disease for a few years. Last year it nabbed FDA approval last for Galafold to treat Fabry disease. But with the $100 million deal with Celenex, it has a chance to cure the rare conditions.

Celenex has been working on gene therapies for lysosomal disorder Batten disease. Among the programs Amicus bought are gene therapies that target the CLN6 and CLN3 forms of Batten.

Earlier this year, Amicus said it will build a 75,000-square-foot facility in Philadelphia to serve as the global headquarters for Amicus’ scientific work and the home of its gene therapy leadership team.

Thermo Fisher is new to gene therapies as well. The company earlier this year ponied up $1.7 billion to nab viral vector producer Brammer Bio, giving it entry into the field. It acquired manufacturing locations in Cambridge, Massachusetts and Florida, along with 600 employees in the deal.

https://www.fiercepharma.com/manufacturing/thermo-fisher-to-manufacture-gene-therapies-being-developed-by-amicus

Array played Pfizer’s eagerness to land a deal on time—and got itself a better offer

When it comes to buying an experienced cancer drug specialist, a bidding war is naturally expected. But in the case of Pfizer’s $11 billion deal for Array BioPharma, that didn’t happen. Still, it didn’t stop the two companies from pressing each other.

Pfizer was the only one who’d ever made an offer for Array, even though two other firms also expressed interest, Array disclosed in a recent securities filing. That makes the deal the second recent one in the targeted cancer realm that took shape without much drama—Eli Lilly’s $8 billion buyout of Loxo Oncology didn’t emerge from a bidding war, either.

Despite the absence of competition, Array investors shouldn’t worry, as the documents suggest that “Pfizer was proactively willing to pay a substantial premium that exceeded Array’s threshold,” SVB Leerink analysts said in a Monday note to clients, adopting the same tone they had for Lilly-Loxo a few months ago.

In January 2017, Array hired Centerview Partners to advise it in a possible strategic transaction. However, of the four parties Centerview contacted, including Pfizer, none came forward with a proposal of any kind—partnership or acquisition.

Almost two years later, in October 2018, the CEO of a multinational biopharma company approached Array’s CEO Ron Squarer about a potential merger. But after running an internal review, the Array board decided not to sell the company at that time. During the meeting, the board formed a new committee that excluded one director, who had a relationship with that potential buyer, Party A.

Party A’s CEO reassured Squarer of the company’s interest in a transaction twice in the following November and January, only short of offering any financial terms.

In the meantime, another company, Party B, showed some interest in making a deal with Array. The two signed a confidentiality agreement for a potential research team-up and amended it in May to allow for M&A-related discussions.

Things also turned cozy with Pfizer. In February, Array’s Chief Operating Officer, Andrew Robbins, visited Pfizer’s offices in New York City. He met with the Big Pharma’s business development executives to discuss Array’s commercialization of MEK-BRAF combo inhibitor Mektovi and Braftovi, as well as its research platform. In exchange, Pfizer’s management visited Array’s headquarters in Boulder, Colorado in May.

Array and Pfizer had held talks even before 2017, which in some cases involved “exchanging confidential information,” according to the Array document.

One data set likely helped make up Pfizer’s mind to make a formal move. Array unveiled interim results from the phase 3 Beacon trial, showing a combination of Array’s Braftovi, Mektovi and the anti-EGFR drug Erbitux could significantly extend lives in certain patients with metastatic colorectal cancer. SVB Leerink analysts at that time called the data “extremely compelling,” as it marked the first randomized, controlled trial to show an overall survival benefit in the patient population.

A week after the positive results, Array’s Robbins and Chief Scientific Officer Nicholas Saccomano met with an expanded, C-Suite-level team of Pfizer executives to discuss a deal.

The next day, on May 29, Pfizer CEO Albert Bourla reached out to Squarer, offering to buy Array at $44 per share, which represented a 62% premium to Array’s previous closing price. Pfizer sounded eager, making clear that it would like to publicize the deal on June 17.

But Array didn’t take Pfizer up on its first offer. Array’s special committee decided that the $44-apiece offer “was insufficient to allow Pfizer access to additional diligence or for Array to commit to Pfizer’s timeline of a June 17 announcement,” the company described in the filing. Capitalizing on Pfizer’s keenness to close a deal, however, Array’s board said it would be interested on that date if Pfizer came up with a higher price.

Pfizer quickly responded, upping its offer to $48 per share. But it also provided Array little time for additional back-and-forth, linking that proposal with the target June 17 date. That meant just two weeks for Array to decide, refine the merger agreement and execute.

Meanwhile, Array’s discussions with Party B didn’t go anywhere, despite a meeting between Array’s advisers and representatives of Party B in Chicago during this year’s American Society of Clinical Oncology annual meeting, plus two conference calls afterward to discuss Array’s programs.

On June 11, as its last try, Centerview told Party B that Array had already made meaningful progress toward a transaction. Party B said “it would not likely be in a position to submit a formal proposal to acquire Array in the near term” and also suggested that it wouldn’t be able to offer an attractive price, according to the Array document.

At that, Array decided to accept Pfizer’s $48-per-share offer on June 14, a Friday. And the two unveiled the deal on June 17.

The Array disclosure also provided a glimpse into the company’s internal financial forecasts for the years to come. As of June 14, the company expected its total revenue could reach $452 million in 2020, growing all the way to $2.57 billion in 2031.

https://www.fiercepharma.com/pharma/array-played-pfizer-s-eagerness-to-land-a-deal-time-and-got-itself-a-better-offer

Roche closes on EU approval for Tecentriq in breast cancer

Roche is heading for EU approval of Tecentriq as first-line therapy for triple-negative breast cancer (TNBC), ahead of its checkpoint inhibitor rivals.

The Committee for Medicinal Products for Human Use (CHMP) backed the use of the PD-L1 inhibitor in patients with locally-advanced or metastatic TNBC that cannot be treated with surgery and who haven’t previously received chemotherapy. The EMA typically approves drugs a few weeks after a positive CHMP opinion.

The new indication – which was approved by the FDA in March – is seen as a big commercial opportunity for Tecentriq (atezolizumab) as it is the first checkpoint inhibitor to be cleared for use in any form of breast cancer.

It not only represents a sizeable patient population, affecting around 15% of the 2 million women diagnosed with breast cancer each year worldwide, but also has no competition yet from other cancer immunotherapies such as Merck & Co/MSD’s market leading Keytruda and Bristol-Myers Squibb’s Opdivo.

The CHMP positive opinion applies to women whose tumours express PD-L1 but lack receptors for oestrogen, progesterone or HER2 – effectively preventing treatment with hormonal therapies or anti-HER2 drugs like Roche’s Herceptin.

TNBC is a particularly aggressive form of breast cancer with treatment options that until recently were mostly limited to surgery, radiotherapy and chemotherapy, depending on the stage of the disease. AstraZeneca’s Lynparza and Pfizer’s Lynparza can be used in TNBC, but only in patients whose cancers express the BRCA biomarker.

Five-year survival rates tend to be much lower with TNBC than with other breast cancer types, so Tecentriq is a welcome new addition to the treatment options for this form of the disease.

Analysts have also suggested that Roche has a lead of at least a year over other checkpoint inhibitors in TNBC, with Keytruda considered to be closest behind with phase 3 results due later this year.

The EU positive opinion is for Tecentriq in combination with Celgene’s chemotherapy drug Abraxane (nab-paclitaxel) and is based on the results of the IMpassion130 trial, which showed adding Tecentriq to Abraxane reduced the risk of progression or death by 38% compared with Abraxane alone in this patient population.

Tecentriq is already approved to treat bladder cancer and non-small cell lung cancer (NSCLC), and the new indication is expected to help accelerate growth for the product, which made around $766 million in sales last year.

Roche has suggested in the past that breast cancer could eventually add another $500 million to $1 billion in revenues for the drug as it chases after Keytruda and Opdivo, which are predicted to top $9 billion and $7 billion in sales respectively this year.

To try to maintain its lead in TNBC the company has no fewer than seven phase 3 trials ongoing, including studies in patients with early and advanced stages of the disease.

Roche closes on EU approval for Tecentriq in breast cancer