Amgen Inks $240 Million Autoimmune Deal with EVOQ Therapeutics

 Amgen is partnering with Ann Arbor, Michigan-based EVOQ Therapeutics for a license and collaboration deal to discover and develop drugs for autoimmune disorders. Amgen is paying EVOQ $240 million up front in addition to royalties on subsequent sales.

EVOQ’s focus is on autoimmune diseases, although its original intent was targeting oncology. It is a spinoff from the University of Michigan (U of M) in 2016. It was co-founded by James Moon and Anna Schwendeman, both from U of M. Moon is the chief scientific officer and Schwendeman is the vice president of preclinical development. William Brinkerhoff is also a co-founder and acts as the chief executive officer. Their technology platform is called NanoDisc, a high-density lipoprotein platform, that they believe can be used to deliver peptides directly into the lymph nodes.

The two companies will work together to use dendritic cells to develop immune tolerance. The company’s in-house pipeline includes two compounds that target MOG antibody disease, a new condition that results in neuro-spinal swelling and is typically misdiagnosed as multiple sclerosis (MS), and type 1 diabetes.

A big driver of Amgen’s autoimmune portfolio is Otezla (apremilast). Amgen acquired Otezla for moderate-to-severe plaque psoriasis and psoriatic arthritis in November 2019 from Celgene. Bristol Myers Squibb acquired Celgene, but was forced by the U.S. Securities and Exchange Commission (SEC) to divest Otezla because of a competing product in their pipeline, deucravacitinib (BMS-986165). In fact, in November 2020, deucravacitinib beat out Otezla in the POETYK PSO-1 Phase III clinical trial in one of the key secondary endpoints. The drug otherwise hit the co-primary endpoints on psoriasis.

Amgen paid $13.4 billion in cash for access to Otezla, which is approved in the U.S. for moderate-to-severe plaque psoriasis patients who are candidates for phototherapy or systemic therapy; adults with active psoriatic arthritis; and adults with oral ulcers associated with Behcet’s disease. The drug is approved in more than 50 markets outside the U.S. and has patent protection through at least 2028 in the U.S. In 2018, Otezla sales were $1.6 billion.

In other news, Amgen announced new data from its oncology pipeline in lung cancer will be presented at the 2020 World Conference on Lung Cancer (WCLC) from January 28-31, 2021. That will include Phase II data from the CodeBreaK 100 clinical trial of sotorasib in KRAS G12C-mutated advanced non-small cell lung cancer (NSCLC). They will also describe updated Phase I data from AMG 757, a first-in-class BiTE molecule that targets delta-like ligand 3 (DLL3) in small cell lung cancer (SCLC).

“We are incredibly excited to present the first complete Phase II non-small cell lung cancer data set for an investigational KRAS G12C inhibitor, including novel biomarker analyses,” said David M. Reese, executive vice president of Research and Development at Amgen. “This is an historic moment not only for us, but for the scientific community working on the 40-year quest to target KRAS, one of cancer research’s toughest challenges. Additionally, following recent regulatory submissions to the FDA and European Medicines Agency, we remain focused on rapidly bringing this potential foundational KRAS G12C therapy to patients with advanced non-small cell lung cancer harboring this mutation.”

https://www.biospace.com/article/amgen-partners-with-evoq-to-develop-therapies-for-autoimmune-disorders/

Harpoon Granted Orphan Drug Tag for Treatment of Multiple Myeloma

  Harpoon Therapeutics, Inc. (NASDAQ: HARP), a clinical-stage immunotherapy company developing a novel class of T cell engagers, today announced that the U.S. Food and Drug Administration (FDA) has granted Orphan Drug Designation for HPN217 for the treatment of multiple myeloma. HPN217, a tri-specific T cell activating recombinant protein construct (TriTAC^®) targets B-cell maturation antigen (BCMA), a well-validated antigen expressed on malignant multiple myeloma cells. Harpoon has four drug product candidates in clinical development for the treatment of solid and hematologic malignancies based on its proprietary TriTAC platform.

“Orphan Drug Designation for multiple myeloma represents a significant milestone in the development of HPN217 and recognizes its potential to address a significant unmet medical need for the patients suffering from this condition,” said Jerry McMahon, Ph.D., President and Chief Executive of Harpoon Therapeutics. “I am pleased with the clinical progress we are making with this program and we are planning to present interim data from the ongoing Phase 1/2 dose escalation trial later this year.”

The FDA's Orphan Drug Designation program provides orphan status to drugs defined as those intended for the safe and effective treatment, diagnosis or prevention of rare diseases that affect fewer than 200,000 people in the United States. Orphan Drug Designation qualifies the sponsor of the drug for certain development incentives, including tax credits for qualified clinical testing, prescription drug user fee exemptions and seven-year marketing exclusivity upon FDA approval.

About the Phase 1/2 Trial for HPN217

In April 2020, Harpoon announced dosing of the first patient with HPN217 (BCMA TriTAC) in a Phase 1/2 clinical trial focused on relapsed/refractory multiple myeloma (RRMM). HPN217 is covered by a global development and option agreement with AbbVie Inc. (NYSE: ABBV). Dose escalation for HPN217 in the Phase 1/2 clinical trial is progressing rapidly. HPN217 has been well tolerated, and no DLTs had been observed as of the most recent December 1, 2020 data cutoff date. A presentation of interim data is anticipated in 2021, with initiation of a dose expansion cohort in the second half of 2021.

For additional information about the trial, please visit clinicaltrials.gov using the identifier NCT04184050.

https://www.globenewswire.com/news-release/2021/01/13/2157810/0/en/Harpoon-Therapeutics-Granted-Orphan-Drug-Designation-from-FDA-for-HPN217-for-Treatment-of-Multiple-Myeloma.html

AbbVie's Allergan Enters Into Option to Acquire Cypris Medical

 -- Agreement Includes Development of Xact Device, a Minimally-Invasive Alternative Option for Performing Face and Neck Lifts --

-- Allergan Aesthetics & Cypris to Partner on Clinical Trial --

https://www.prnewswire.com/news-releases/allergan-aesthetics-enters-into-option-to-acquire-cypris-medical-301206886.html

PacBio, Invitae to Develop Ultra-High-Throughput Whole Genome Sequencing Platform

  Pacific Biosciences of California, Inc. (Nasdaq: PACB), a leading provider of high-quality, long-read sequencing platforms, today announced a multi-year collaboration with Invitae Corporation (NYSE: NVTA), a leading medical genetics company, to begin development of a production-scale high-throughput sequencing platform leveraging the power of PacBio’s highly accurate HiFi sequencing to expand Invitae’s whole genome testing capabilities.

“Whole genome sequencing has the ability to significantly improve diagnosis for a wide range of diseases and guide healthcare throughout life. This collaboration is aimed at developing the technology to make it affordable and accessible to all patients who can benefit from in-depth, full genome information," said Sean George, co-founder and Chief Executive Officer of Invitae. “Our work with PacBio to date has demonstrated the increased diagnostic yield and clinical utility of using information from high-quality, long-read genomes to guide patient care. We believe this world-class sequencing technology combined with our clinical capabilities will uniquely position us to deliver those benefits cost effectively at scale. We look forward to working with the PacBio team to develop a new generation of innovative whole genome-based offerings.”

Identifying the many underlying genetic influences on human health is becoming increasingly critical to overall clinical care and prognosis and whole genome sequencing offers the most comprehensive view of medically relevant variations. As whole genome sequencing continues to grow into a preferred method for genetic testing, it is expected by the Global Alliance for Genomics and Health that by 2025 as many as sixty million genomes will be sequenced. With the development of a new sequencing platform, Invitae and PacBio aim to enable a new class of cost-effective assays that could be used to accelerate the accessibility of a more comprehensive whole genome sequencing approach in areas including carrier screening, immune system response, and other heritable diseases.

https://www.biospace.com/article/releases/pacific-biosciences-and-invitae-to-develop-ultra-high-throughput-clinical-whole-genome-sequencing-platform-/

J&J may not meet U.S. COVID-19 vaccine supply target by spring

 Johnson & Johnson is facing unexpected delays in the manufacturing of its coronavirus vaccine and may not be able to supply the doses it promised the federal government by spring, the New York Times reported on Wednesday.

U.S. federal officials have been told that J&J has fallen as much as two months behind the original production schedule and will not catch up until the end of April, when it was supposed to have delivered more than 60 million doses, the NYT reported, citing people familiar with the situation. (nyti.ms/38EX4n9)

The company and the U.S. Department of Health and Human Services did not immediately respond to Reuters requests for comment.

Earlier this week, J&J’s chief executive officer said the company was on track to have close to a billion COVID-19 vaccine doses by 2021-end.

https://www.reuters.com/article/us-health-coronavirus-vaccines-johnson-j/jj-may-not-meet-u-s-covid-19-vaccine-supply-target-by-spring-nyt-idUSKBN29I18I

As China COVID-19 cases rise, millions more placed under lockdown

  China posted its biggest daily jump in COVID cases in more than five months on Wednesday, stepping up containment measures that have seen four cities put under lockdown, as the world’s second biggest economy scrambles to head off a new wave of infections.

Most of the new cases were reported near the capital Beijing, but a province in far northeast China also saw a rise in infections, official data showed, amid a resurgence that has seen more than 28 million people placed under home quarantine.

While the Chinese city of Wuhan was the initial epicenter of the coronavirus pandemic, which first emerged there in late 2019, China had in recent months largely kept COVID-19 at bay.

On Wednesday, the National Health Commission reported a total of 115 new confirmed cases on the mainland, compared with 55 a day earlier, the highest daily increase since July 30.

It said 107 of the new cases were local infections. Hebei, the province that surrounds Beijing, accounted for 90 of the cases, while northeastern Heilongjiang province reported 16 new cases.

The wave of infecttions comes ahead of next month’s Lunar New Year holiday, when hundreds of millions of Chinese typically travel to their home towns. Far fewer people are expected to hit the road this year, and many provinces have asked migrant workers to stay put during the break.

A “massive” resurgence is unlikely during the holiday if control and prevention measures are enforced properly, Feng Zijian, deputy director of the Chinese Center for Disease Control and Prevention, told a media briefing on Wednesday.

The spike in new cases comes as a World Health Organization team of experts probing the origins of the pandemic is set to arrive on Thursday in Wuhan. The team will undergo a 14-day quarantine, NHC spokesman Mi Feng said.

Much remains unknown about the origins of the coronavirus and China has been sensitive about accusations of a cover-up that delayed its initial response and allowed the virus to spread. A health expert affiliated with the WHO said previously that expectations should be “very low” that the team would reach a conclusion from its trip to China.

Hebei province has put three cities - Shijiazhuang, Xingtai and Langfang - into lockdown as part of the efforts to keep the virus from spreading further, while Beijing city authorities have stepped up screening and prevention measures to prevent another cluster from developing there.

China has administered more than 10 million vaccine doses, NHC official Wang Bin said on Wednesday, and has ramped up testing capacity to 12.55 million people per day, or ten times the level last March.

Heilongjiang province on Wednesday declared a COVID-19 emergency. The city of Suihua, which borders the provincial capital Harbin, put its 5.2 million people under lockdown.

Most of the cases in Heilongjiang have been found in Wangkui county, under Suihua’s jurisdiction. Tieli, a city of about 300,000 that borders Suihua, said on Wednesday it will ban people and vehicles from leaving for three days as part of new COVID-19 prevention measures.

The number of new asymptomatic cases, which China does not classify as confirmed cases, fell to 38 from 81 cases a day earlier. Seven of those were reported in Jilin, a northeastern province bordering Heilongjiang.

The total number of confirmed COVID-19 cases in mainland China now stands at 87,706, while the death toll remained unchanged at 4,634.

https://www.reuters.com/article/us-health-coronavirus-china-cases/as-china-covid-19-cases-rise-millions-more-placed-under-lockdown-idUSKBN29I03G

Delayed Vaccine Rollout Spells Risk For Debt Investors

 Delays in administering Covid-19 vaccine shots pose a fresh risk to investors who bet on a speedy vaccination process to help risky U.S. companies bounce back from the pandemic.

The approval of coronavirus vaccines made by Pfizer Inc. and Moderna Inc. last year propelled rescue financing packages for several cash-strapped companies, supplying them with what investors thought would be enough liquidity to keep them afloat until widespread immunity took hold. Cineworld Group PLC, AMC Entertainment Holdings Inc., Carnival Corp. and other companies with bleak outlooks because of the pandemic found financial lifelines to tide them over.

These deals continued a trend dating back months before the vaccines were approved, as actions taken by the Federal Reserve and Congress, coupled with investors' eagerness to continue lending, kept the corporate default rate well below analysts' expectations.

But the sluggish rollout of the vaccines is now undermining the timeline that investors projected when extending emergency credit. The U.S. government fell well short of its goal of vaccinating 20 million Americans in 2020, having administered just 2.8 million doses by the end of last year, according to federal figures, in part due to differing state policies that have led to confusion and shipment delays. The emergence of the more-contagious U.K. coronavirus mutation in the U.S. has also raised the likelihood of further government restrictions and consumers being more cautious about leaving their homes.

So far, more than 25.4 million doses of vaccine have been distributed, but only 8.9 million Americans have received a shot, according to the Centers for Disease Control and Prevention.

Dan Zwirn, founder and chief executive of asset management firm Arena Investors LP, said many investors willing to prop up struggling companies "are making a bet on the duration of the vaccine comeback."

"It baffles us. You're running a ton of risk that it will take longer than you thought," said Mr. Zwirn, whose firm during the pandemic has focused on making investments that are fully covered by the underlying asset value.

Federal Reserve Bank of Boston leader Eric Rosengren said Tuesday the inoculation rate " has been disappointing, which likely will impact public health and the economy in the near term," though he predicted "a robust recovery starting in the second half of the year."

Companies in hard-hit industries such as movie theaters, retail and live entertainment have largely subsisted though the pandemic on borrowed money. Speculative-grade debt issuance surged to near-record levels last year as the Federal Reserve kept rates low, amounting to roughly $694 billion, blowing past the $559 billion issued in 2019 and $573 billion in 2018, according to Barclays PLC.

AMC, the world's largest movie theater chain, has so far survived temporary shutdowns of virtually all its theaters with several rounds of debt financing and sales of stock to risk-hungry equity investors. Cineworld, owner of Regal cinemas, also landed a rescue from lenders in November.

Cosmetics maker Revlon Inc., whose recent struggles stemmed from less demand for its products as women stayed home and eschewed makeup, swapped out debt in November and received a new investment from its private equity owner to relieve an impending bond maturity and avert a bankruptcy filing. Others, such as fashion retailer Express Inc., are still seeking the financing they need to outlast Covid-19.

Carnival was able to raise billions of dollars of debt during the pandemic, even while the cruise industry has been incapacitated, having been identified as the source of numerous infections.

In a sign of confidence that a post-pandemic future is in sight, Live Nation Entertainment Inc. in December landed a low interest rate of 3.75% on a secured bond sale, even though its live-events business is effectively frozen. Live Nation's revenues plunged to $184 million in the third quarter, compared with $3.8 billion over the same period the prior year.

While many companies that obtained debt financing in 2020 did so to avoid running out of cash and needing to seek bankruptcy protection, much of the surge in debt issuance in 2020 was due to companies opportunistically taking advantage of low interest rates to either refinance existing debts or pad their balance sheets with liquidity in case they might need it. Many of these companies are keeping such "rainy day funds" as cash on the balance sheet and are expected to use it to repay their debts if the economy recovers, investors said.

However, doubts about whether some of those debts will be repaid even after consumers return to theaters and malls, are fueling projections by analysts and investors of a steady march of corporate defaults. Whether the debts taken on during the pandemic can be paid off or refinanced depends largely on sustaining the frenetic market activity of 2020.

Barclays expects bond defaults to decline in 2021, but still be elevated compared with more benign years. The bond default rate for full-year 2021 is expected to be 5%-6%, down from a recent high of 8% in October, according to Barclays.

However, the added debt issued during the pandemic, much of which has a four to five-year lifespan, could be the source of defaults in years to come especially if companies struggle with changed consumer behavior following the pandemic, investors said.

Martha Metcalf, head of U.S. credit at asset management firm Schroders PLC, said the high volume of sub-investment-grade debt added on during the pandemic will mean that "idiosyncratic risk will remain elevated," as certain companies and industries have trouble servicing their obligations.

"The challenge now is to make that distinction, which industries and companies got access to capital that they didn't deserve," Ms. Metcalf said. "You need to be careful about those companies that got access to capital markets when they probably shouldn't have."

There will be an increasing rate of credit defaults heading into the spring as certain companies struggle while waiting for the vaccine rollout, but "we're getting into the neighborhood of peak defaults," according to Ms. Metcalf.

Damian Schaible, co-head of the restructuring practice at law firm Davis Polk & Wardwell LLP, said that history suggests the music eventually stops.

"Many capital structures will suddenly tumble," he said. "The layers of debt accumulated during both the easy times and through the pandemic will lead to more complicated restructurings."

https://www.marketscreener.com/quote/stock/PFIZER-INC-23365019/news/Delayed-Vaccine-Rollout-Spells-Risk-For-Debt-Investors-32184952/