Citi hires top dealmaker Jeff Stute from Perella to bolster healthcare M&A ranks

 Jeff Stute, a veteran investment banker with a career spanning three decades at Perella Weinberg Partners and JPMorgan Chase, is joining Citigroup as a vice chair focused on healthcare mergers in North America, according to a memo seen by Reuters. 

The move is expected to bolster Citi's healthcare investment banking franchise and is part of the Wall Street bank's push to win more market share from rivals including Centerview Partners, JPMorgan and Goldman Sachs. 

Stute, who is based in New York, will join Citi in December and report to Kevin Cox, the bank's interim global head of M&A. In his new role, Stute will also work closely with Torrey Browder, head of healthcare M&A at Citi. 

Stute, who has advised on several large pharmaceutical transactions during his career, joined Perella in 2019 as a partner focused on healthcare deals. Prior to his stint at Perella, Stute spent 25 years at JPMorgan where he was co-head of North America M&A and later served as global head of healthcare investment banking. 

"Our healthcare M&A market share has increased significantly over the last few years, and we expect that Jeff's addition to the healthcare M&A team will strengthen our position and continue to drive growth," Cox said in the memo.

A Citi spokesperson confirmed the contents of the memo. Perella did not respond to a request for comment.

In October, Citi promoted three senior healthcare investment bankers - Sumit Khedekar, Nishant Jadav and Michael Guarino - as part of its broader effort to win more roles on large transactions amid a slowdown in pharma dealmaking. 

Big Pharma players have focused on smaller private targets in 2024, after splurging tens of billions of dollars last year to gobble up expensive biotech targets to boost their drug pipelines with new promising medicines. 

Global healthcare deal volumes have declined 13% to $247.4 billion so far this year, according to data from Dealogic.

Citi has worked on some notable healthcare deals over the past year. In February, Citi advised on Catalent's $16.5 billion sale to the parent company of Novo Nordisk, which is the maker of the popular obesity drug Wegovy. 

https://www.marketscreener.com/quote/stock/CITIGROUP-INC-4818/news/Citi-hires-top-dealmaker-Jeff-Stute-from-Perella-to-bolster-healthcare-M-A-ranks-48247343/

Boston Scientific to Buy Medical-Technology Company Cortex

 Boston Scientific has agreed to buy privately held medical- technology company Cortex from medical-device investor Ajax Health in a deal that bolsters its electrophysiology portfolio.

Boston Scientific on Monday said it will pay an undisclosed amount for Cortex, which is developing a diagnostic mapping solution that may identify triggers and drivers outside of the pulmonary veins that are foundational to atrial fibrillation, a heart rhythm disorder that affects nearly 38 million people around the world.

The Marlborough, Mass., medical-technology company said Cortex received Food and Drug Administration approval for its OptiMap System, which uses a basket catheter and proprietary algorithm to identify potential active atrial fibrillation sources, in 2023.

Boston Scientific said it expects to complete the acquisition in the first half of 2025, adding that it expects the deal to be immaterial impact to adjusted per-share earnings next year.

Ajax Health, which operates as a platform for investing in and operating medical-device companies, established Cortex last year with a $90 million funding led by KKR and Hellman & Friedman.

https://www.marketscreener.com/quote/stock/BOSTON-SCIENTIFIC-CORPORA-11935/news/Boston-Scientific-to-Buy-Medical-Technology-Company-Cortex-48246547/

'WA Activates National Guard, OR "Standing Ready", Heading Into Election Day'

 Washington Governor Jay Inslee is activating the Washington National Guard ahead of election day, according to KING 5, and neighboring state Oregon isn't far behind. 

The action by the governor follows two recent ballot box arsons in Portland and Vancouver, Washington, in late October, which destroyed hundreds of ballots. Officials are still seeking a suspect.

Governor Inslee announced that some National Guard members will assist local law enforcement and the State Patrol, with the exact number yet to be decided.

Homeland Security has warned of potential political violence and threats to election infrastructure ahead of the 2024 General Election. Guard members will be on standby from Monday through Thursday night.

Wash. National Guard (Photo: CNN) 

“The southwest region of Washington state has already experienced specific instances of election-related unrest," Inslee commented according to CNN. 

“Based upon general and specific information and concerns regarding the potential for violence or other unlawful activity related to the 2024 general election, I want to ensure we are fully prepared to respond to any potential additional civil unrest,” he continued. 

Oregon is taking similar measures, with its National Guard "standing ready". In a statement, Gov. Tina Kotek said: “The governor’s office is closely monitoring and coordinating with local, state and federal agencies to ensure Oregon voters can safely cast their ballot.”

Meanwhile, Portland Mayor Ted Wheeler noted there’s "no current information to suggest unrest" but acknowledged community tension. Oregon State Police, Portland law enforcement, and the Department of Emergency Management are coordinating efforts, with Portland increasing police staffing on Tuesday as a precaution.

In 2020, Oregon deployed the National Guard and a unified command for election security, and recently, states have increasingly activated the Guard for cybersecurity during elections, the report concluded. 

https://www.zerohedge.com/markets/washington-activates-national-guard-oregon-standing-ready-heading-election-day

7 Alzheimer’s and Parkinson’s Programs Discarded in 2024

 

This year has seen several biopharma companies drop Alzheimer’s and Parkinson’s disease programs, but experts say plenty are still chasing these multi-billion-dollar markets.

There’s no question that the approvals of Eisai and Biogen’s Leqembi and Eli Lilly’s Kisunla generated momentum in the Alzheimer’s disease treatment space. However, this year has seen attrition in the pipelines for both Alzheimer’s and Parkinson’s disease.

Roche in particular has parted with several assets for Alzheimer’s disease, recently terminating a partnership with UCB. This is the second Alzheimer’s cut this year for the Swiss pharma, which in January returned two failed assets to AC Immune.

Several other companies, including Johnson & Johnson, Sage Therapeutics and Otsuka Pharmaceuticals, have also dropped programs targeting Alzheimer’s and/or Parkinson’s.

But Graig Suvannevejh, senior biopharmaceuticals and biotechnology equity research analyst at Mizuho Americas, said this is not an indication of any major shifts in the R&D landscape but rather a “coincidence.” These decisions are “really dependent on data,” he told BioSpace. Several discarded Alzheimer’s and Parkinson’s programs, including AC Immune’s crenezumab, failed to produce positive data in clinical trials. “Maybe it’s also a reflection, sometimes, of what’s happening on the competitive landscape.”

In terms of anti-amyloid antibody programs, such as crenezumab, Suvannevejh noted that despite the approvals of Leqembi and Kisunla, as well as Eisai and Biogen’s Aduhelm, this class has struggled to gain traction in the market. So companies may “have an evolving view of the commercial opportunity in Alzheimer’s disease,” he said.

Overall, Suvannevejh said the pipelines of companies focused on Alzheimer’s disease are “okay.” While acknowledging that large pharmaceutical companies in this space do not have the “very rich, late-stage” pipelines they had three to five years ago, he said “there’s still a presence, because it is one of the few areas that could represent easily for any drug that gets approved, at least on paper, a multi-billion-dollar annual sales potential type of product.”

The Alzheimer’s treatment space is projected to be worth $15.5 billion by 2031, according to iHealthcareAnalyst.

As for Parkinson’s, Suvannevejh said there are around 20 therapies on the market that address the symptoms of the disease. There currently are none, however, that are disease-modifying because the underlying cause the disease is still unclear. While alpha-synuclein is the current candidate du jour, “we don’t have data yet,” he said.

The global market for Parkinson’s disease drugs is currently valued at $5.56 billion and is expected to reach $6.63 billion by 2029. Parkinson’s is “still viewed as a very big commercial opportunity,” Suvannevejh said, “but so far, it’s been equally a difficult market to tap into.”

Here, BioSpace takes a closer look at four companies that have recently discontinued programs for these two intractable neurodegenerative diseases.

Roche

Indication: Alzheimer’s disease

Assets: Bepranemab, crenezumab, semorinemab

In July 2020, Roche’s Genentech inked a collaboration with UCB to develop an anti-tau antibody treatment, bepranemab (UCB0107) for Alzheimer’s disease. Roche handed over $120 million upfront to UCB, with the Belgian company eligible for $2 billion based on certain regulatory approvals and other milestones.

Four years later, that partnership is over. UCB revealed Roche’s decision while announcing the acceptance of an abstract for a Phase IIa study of bepranemab at the 2024 Clinical Trials on Alzheimer’s Disease conference, saying that the rights to the program had been handed back. No further details were provided.

UCB isn’t the first company to receive a return from Roche this year. In January, the pharma ended its long-term collaboration with AC Immune, handing back two Alzheimer’s assets—anti-amyloid beta antibody crenezumab and anti-tau antibody semorinemab. In 2020, topline results from a Phase II trial of semorinemab showed the candidate failed to hit its primary endpoint, as well as two secondary endpoints, while crenezumab failed Phase II and III clinical trials in 2019 and 2022, respectively, according to Fierce Biotech.

Long devoted to Alzheimer’s, Roche has struggled to gain a foothold in the space. A particular blow fell when gantenerumab, an investigational antibody, failed two Phase III studies in November 2022. This was the company’s second setback that year, following crenezumab’s failure to hit its co-primary endpoints in a Phase III for people with a specific gene mutation that causes early-onset Alzheimer’s.

Despite all the bumps, Roche isn’t backing away from Alzheimer’s. Two other assets, RG6289 and trontinemab, are in Phase II studies. Roche touted positive data in March 2024 from a small Phase Ib/IIa study of trontinemab, reporting “rapid and robust” amyloid plaque reduction.

Johnson & Johnson

Indication: Alzheimer’s disease and Parkinson’s disease

Assets: Seltorexant and JNJ-0376

A week before Roche parted ways with UCB, Johnson & Johnson slashed several pipeline programs in the neurology and psychiatry spaces, including seltorexant for Alzheimer’s disease and JNJ-0376 for Parkinson’s disease.

Seltorexant, a human orexin-2 receptor blocker intended for the treatment of agitation or aggression in Alzheimer’s, was being studied in a Phase II trial. While a pipeline document on J&J’s website indicates it will no longer develop the drug for this indication, it will continue to evaluate seltorexant as a treatment for major depressive disorder with insomnia symptoms.

Also on the chopping block was JNJ-0376, a Phase I Parkinson’s candidate the company had previously touted in a 2023 business overview presentation as having “novel mechanisms to modify, treat and/or prevent neurodegenerative disorders.” J&J did not provide further details on this program.

Sage Therapeutics

Indication: Alzheimer’s disease and Parkinson’s disease

Asset: Dalzanemdor

It hasn’t been a good year for Sage Therapeutics’ dalzanemdor. In April, the Cambridge, Mass.–based biopharma announced it would discontinue development of dalzanemdor in Parkinson’s disease after the oral drug candidate, which is intended to treat cognitive disorders associated with NMDA receptor dysfunction, failed a mid-stage trial.

In the Phase II PRECEDENT study, which included 86 patients with Parkinson’s, dalzanemdor was found to be safe, but did not show any meaningful differences over placebo in any of the exploratory endpoints, including a cognition test.

Six months later, dalzanemdor suffered another defeat, missing the primary endpoint in the Phase II LIGHTWAVE study in Alzheimer’s disease. According to Sage, trial data “did not demonstrate a statistically significant difference from baseline in participants treated with dalzanemdor versus placebo” on the same cognition test. Sage will halt further development of the asset in Alzheimer’s, according to an Oct. 8 press release.

Sage has one remaining shot on goal with dalzanemdor. A Phase II study of the embattled candidate is ongoing in Huntington’s disease, with early data expected later this year.

Otsuka Pharmaceutical

Indication: Alzheimer’s-related agitation

Asset: AVP-786

The pipeline of Japanese neuro player Otsuka Pharmaceutical is one candidate lighter after AVP-786 failed to improve agitation associated with dementia due to Alzheimer’s disease in a Phase III trial.

Topline Phase III results in February 2024 showed the asset, which came to Otsuka in late 2014 in the $3.5 billion acquisition of Avanir Pharmaceuticals, did not show improvement over placebo in patients’ condition. The company announced in May it would end development of AVP-786.

Otsuka is still developing brexpiprazole for agitation associated with dementia due to Alzheimer’s, which has been filed with regulatory authorities in Japan, according to the company’s pipeline document. Otsuka’s current pipeline includes candidates for schizophrenia, major depressive disorder and generalized anxiety disorder, among other psychiatric diseases, but does not list any other programs for Alzheimer’s.

https://www.biospace.com/drug-development/7-alzheimers-and-parkinsons-programs-discarded-in-2024

Viking Touts Promising Phase I Weight Loss Data for Obesity Pill Candidate

 

Jefferies analyst Roger Song in an investor note said that Viking Therapeutics’ readout for its investigational therapy VK2735 exceeded expectations, with “class-leading” weight loss. Patients on 100-miligram doses of the pill lost 8.2% of their body weight after 28 days.

Viking Therapeutics on Sunday unveiled early data from the first-in-human study of its investigational oral obesity drug VK2735, touting strong weight loss in healthy adults and an encouraging safety profile.

After 28 days of once-daily dosing, 40-mg VK2735 lowered body weight by up to 5.3% from baseline, an effect that was statistically significant versus placebo. Weight loss was more pronounced among patients who were treated with 100 mg of VK2735—the highest dose level—which elicited an average weight reduction of 8.2%.

Relative to placebo, the 100-mg VK2735 dose cut 6.8% of participants’ body weight, a statistically significant effect with a p-value less than 0.001, according to Viking’s presentation at The Obesity Society’s ObesityWeek 2024 meeting in San Antonio, Texas.

In an investor note, Jefferies analyst Roger Song said that Viking’s readout “exceeds expectations” with VK2735 achieving “class-leading weight loss.” The oral obesity pill “has likely exceeded the best scenario, showing highest [weight loss] among all oral pipeline,” all while maintaining a clean safety profile, Song wrote.

BMO Capital Markets analyst Evan Seigerman in an investor note pointed out that there seemed to be no weight loss plateau in the 100-mg dose group through 28 days of treatment, and that VK2735’s effects were maintained for another four weeks after stopping treatment.

In the early-stage study, Viking reported that all treatment-emergent adverse events were either mild or moderate in severity, with the majority being mild. Gastrointestinal side effects were likewise broadly manageable, with nearly 80% being mild in severity. There was no clinically meaningful difference in gastrointestinal toxicities between participants in the VK2735 and placebo arms.

Despite being early and from a relatively small study, Sunday’s results put Viking slightly ahead of Structure Therapeutics, which in June 2023 reported that its investigational obesity pill GSBR-1290 resulted in a placebo-adjusted 6.2% weight loss in a Phase IIa study. Phase I data in October 2023 demonstrated 4.9% placebo-adjusted weight reduction.

While there have yet to be head-to-head comparisons, and despite the difficulties of comparing two studies with different designs and different samples, “expect investors to directly compare ‘1290’s Ph 1 4.9% placebo-adjusted data to VK2735’s 6.8%,” Seigerman said.

Also at ObesityWeek 2024, Viking unveiled Phase IIa data for its subcutaneous formulation of VK2735, demonstrating that a weekly shot of the obesity candidate resulted in up to 14.7% weight loss from baseline after 13 weeks. The effect of the subcutaneous drug was “progressive” throughout the study and showed no plateau, according to Viking’s abstract.

However, pharmacokinetic data from the mid-stage trial showed that the subcutaneous formulation had a half-life of 171 days, which according to Truist Securities analyst Joon Lee is “supportive of once-a-month maintenance dosing.” This could help differentiate VK2735 from Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound—the current market leaders in the weight loss space—which are dosed weekly.

Despite the mounting interest in—and investment in—oral obesity drugs, “we think [subcutaneous] will continue to dominate obesity [market] with orals coming in as adjunctive therapy,” Joon wrote, referencing the firm’s survey which showed that more patients are on injectable therapies and most of the interest in oral treatments observed in younger patients.

https://www.biospace.com/drug-development/viking-touts-promising-phase-i-weight-loss-data-for-obesity-pill-candidate

Journey Medical Nets Rosacea Approval

November 4

Product: Journey Medical’s Emrosi

Indication: Inflammatory lesions of rosacea

Emrosi’s journey to FDA approval is complete after the FDA approved the oral medicine to treat inflammatory lesions of rosacea on Monday.

“Rosacea is a difficult to treat skin condition and based on the favorable results from our Phase 3 clinical trials, Emrosi has potential to become the best-in-class oral medication to treat the condition,” Claude Maraoui, CEO of Arizona-based Journey Medical said in a statement.

Emrosi’s approval is supported by two Phase III trials, in which the treatment met all co-primary and secondary endpoints. Emrosi demonstrated “statistically significant superiority” over the current standard-of-care treatment (Oracea 40-mg capsules) and placebo for Investigator’s Global Assessment treatment success and reduction in total inflammatory lesion count in both trials, Journey Medical reported.

https://www.biospace.com/biospace-fda-decision-tracker

FDA Action Alert: Journey, Merus, PTC and Autolus

 

The FDA is set to decide on four promising therapies in the next two weeks, including a CAR T for acute lymphoblastic leukemia.

In the coming weeks, the FDA has four big decisions lined up. Among these are verdicts for a gene therapy for a rare disease and another for a lung cancer biologic therapy under Priority Review.

Read below for more.

Journey’s Rosacea Drug Awaits FDA Verdict

By November 4, the FDA will release its decision on Journey Medical Corporation’s DFD-29 (minocycline hydrochloride modified release capsules), which the company is proposing as an oral treatment for inflammatory lesions and erythema in adults with rosacea.

Journey is backing its New Drug Application (NDA) with data from two Phase III studies, both of which hit all co-primary and secondary endpoints. Compared with the current standard of care—40-mg Oracea (doxycycline) capsules—DFD-29 showed significant superiority in treatment success, as per the Investigator’s Global Assessment.

DFD-29 was likewise better than Oracea at reducing total inflammatory lesion count and erythema in rosacea patients. Both trials also found that DFD-29 significantly outperformed placebo.

If approved, DFD-29 would be “the only oral medication to address both inflammatory lesions and erythema” in rosacea “and will be a preferred treatment option by physicians and their patients,” Journey president and CEO Claude Maraoui said in a company statement alongside the FDA’s acceptance of its NDA.

Rosacea is an inflammatory dermatologic condition that affects around 16 million people in the U.S. The disease manifests as red, pus-filled bumps on the skin, alongside redness in the face.

Merus Seeks Approval for Bispecific Antibody in NSCLC, Pancreatic Cancer

Netherlands-based Merus is advancing the investigational bispecific antibody zenocutuzumab for the treatment of non-small cell lung cancer (NSCLC) and pancreatic ductal adenocarcinoma (PDAC) patients positive for fusions of the NRG1 gene.

The FDA accepted Merus’ Biologics License Application (BLA) on May 6, 2024, and granted it Priority Review, which shortens the usual review period from 10 months to six months. In keeping with this schedule, the regulator is expected to release its decision no later than November 6.

The NRG1 gene encodes for the HER3 ligand neuregulin. Though rare, fusion mutations between NRG1 and partner genes result in cancer-causing genomic events that are typically observed in certain malignancies, such as NSCLC and PDAC.

Zenocutuzumab utilizes Merus’ proprietary Dock & Block technology to bind to HER2 and disrupt the interaction between the HER3 receptor and neuregulin or NRG1-fusion proteins. Preclinical studies have confirmed that zenocutuzumab effectively blocks the formation of HER2/HER3 heterodimers, in turn preventing cancer cell proliferation and survival.

Merus’ data package for zenocutuzumab includes results from the Phase I/II eNRGy study, an October 2023 readout from which demonstrated a 37% objective response rate in NSCLC patients positive for NRG1 fusions. In PDAC patients carrying the same biomarker status, zenocutuzumab elicited a 42% objective response rate.

Will FDA Follow Europe in Approving PTC’s Gene Therapy for AADC Deficiency?

PTC Therapeutics is seeking U.S. approval for its gene therapy Upstaza (eladocagene exuparvovec) for the treatment of the ultrarare disease aromatic L-amino acid decarboxylase (AADC) deficiency in pediatric patients aged 18 months and up. The FDA’s decision is due on November 13.

AADC deficiency is a genetic disorder caused by a mutation in the DDC gene, which leads to insufficient levels of the AADC protein. In turn, AADC deficiency is characterized by compromised production of dopamine, serotonin and other neurotransmitters, resulting in its key symptoms of developmental delays, muscle stiffness, movement problems and lethargy.

Most patients with AADC deficiency need lifelong care, and the disease can be fatal. AADC deficiency affects between 1 in 64,000 and 1 in 90,000 births in the U.S.

Upstaza targets the underlying cause of AADC deficiency by delivering a functional copy of the DDC gene. The gene therapy is delivered straight into the brain through a minimally invasive procedure and is meant to be a one-time treatment.

In July 2022, the European Commission granted the gene therapy is Marketing Authorization, allowing its use in all 27 European Union member states, plus Iceland, Norway and Liechtenstein. The U.K.’s Medicines and Healthcare Products Regulatory Agency followed suit in November 2022.

In March 2023, England’s National Institute for Health and Care Excellence recommended the use of Upstaza for the treatment of AADC deficiency, ensuring that the National Health Service will make the gene therapy available for patients who need it.

FDA to Decide on Autolus’ CAR T Therapy for Acute Lymphoblastic Leukemia


By November 16, the FDA will release its verdict for Autolus Therapeutics’ investigational CAR T therapy obecabtagene autoleucel (obe-cel) for the treatment for adult patients with relapsed or refractory B cell acute lymphoblastic leukemia (ALL).

The London-based biotech is backing its BLA, which the FDA accepted in January 2024, with data from the pivotal Phase II FELIX study. An interim readout in December 2022 showed that the next-generation CAR T therapy could induce a 70% overall remission rate, alongside promising expansion and initial persistence at a median follow-up of 6.4 months.

Obe-cel was also well-tolerated overall, with 3% of patients developing grade 3 or higher cytokine release syndrome, and 8% experiencing grade 3 or higher immune effector cell-associated neurotoxicity syndrome.

If approved, obe-cel will join the limited roster of approved CAR T therapies alongside others such as Bristol Myers Squibb’s Abecma and Breyanzi and Gilead’s Tecartus and Yescarta.

Obe-cel previously won the FDA’s Orphan Drug and Regenerative Medicine Advanced Therapy designations.

https://www.biospace.com/fda/fda-action-alert-journey-merus-ptc-and-autolus