Novo Puts $4.6B on the Line to Expand Valo Deal, Maintain Cardiometabolic Leadership

 

The investment continues a Novo dealmaking spree to cement its leadership status in the cardiometabolic space, with partnerships with Photys Therapeutics, Ascendis Pharma and two Flagship-backed start-ups.

Novo Nordisk on Wednesday announced that it will expand a 2023 contract with Boston biotech Valo Health to develop novel treatments for obesity, type 2 diabetes and other cardiometabolic conditions.

The expanded deal’s initial consideration involves a total of $190 million in an upfront payment, equity investment and milestones. The partners will be able to work collaboratively on up to 20 drug programs for which milestone payments could reach around $4.6 billion, in addition to R&D funding and potential royalties.

Novo and Valo first entered into their partnership in September 2023. At the time, the obesity leader paid $60 million upfront and pledged up to $2.7 billion for the opportunity to collaborate on 11 cardiometabolic programs. At the center of the collaboration is Valo’s AI-enabled preclinical capabilities, which allow the biotech to identify and validate druggable targets, as well as design and screen potentially therapeutic molecules against these targets.

Valo says its preclinical edge comes from its proprietary computational platform Opal, which leverages AI models built using high-quality human data. What the biotech calls its “integrated approach” to drug discovery and development generates and uses data at every stage of the process—from disease and target discovery through regulatory approval—producing a “self-reinforcing, active learning system” that improves its performance with each experiment, the company says on its website.

Valo claims its human-centric data library is “the largest and densest in the world,” and that models developed using these data can help Valo and its partners predict disease progression “and how a drug will perform before it even touches a person.”

For Novo, Valo’s approach appears to be working well. Pharma CSO Marcus Schindler said in a statement on Wednesday that the company is “very pleased with the progress” it has seen under the Valo partnership, leading to its decision to expand the agreement. Since launching in 2023, the collaboration has already identified several novel targets that could potentially serve as bases for “differentiated cardiometabolic drug” candidates, according to Wednesday’s news release.

“We are excited to expand the scope to put a stronger focus on obesity and type 2 diabetes,” Schindler added.

The expanded Valo partnership is Novo’s latest move in its quest to further entrench itself as a leader in the cardiometabolic space. Last month, the pharma put $186 million down to partner with Photys Therapeutics and potentially unlock a new drug class—the bifunctional small molecules called PHICS, which leverage specific phosphorylation kinases.

A month earlier, in November 2024, Novo linked up with fellow Danish company Ascendis Pharma to develop novel GLP-1 therapies with a lower dosing frequency, pledging $285 million in the deal. In January 2024, Novo signed back-to-back agreements with Flagship biotechs Omega Therapeutics and Cellarity, putting a total of $1 billion on the line. The companies will work on innovative treatment approaches to obesity and metabolic dysfunction-associated steatohepatitis.

https://www.biospace.com/business/novo-puts-4-6b-on-the-line-to-expand-valo-deal-maintain-cardiometabolic-leadership

Pharmas Turn to Licensing Deals as Risky Science Rises

 

Licensing deals have risen in prominence in a restrained market environment. Is it desperation, or an important part of the biotech ecosystem? 

As the biopharma world delves deeper into complex biology and new high-tech modalities, drug development is riskier than ever. At the same time, the market is particularly risk averse following the post-pandemic slump. Pharmas are therefore piling the risk onto smaller companies with small upfront licensing deals but a massive potential payday—if all goes perfectly to plan.

“The science has gotten riskier. We’re going after targets that are often in diseases where there is no treatment or few treatments, and so it does make sense to kind of put your toe in the water, see how the data comes out over the course of the trial,” Kirsten Axelsen, a nonresident fellow at the American Enterprise Institute and senior policy advisor at DLA Piper, told BioSpace.

Some companies have been inclined to strike licensing deals over more transformative M&As in a restrained biotech market, according to Thijs Spoor, CEO of radiopharma biotech Perspective Therapeutics. He’s seen a level of desperation among some biotech leaders: “They’re willing to take deals that are just to get the deal done.”

“It’s been tough for some of those innovators to really get funded in a way that makes sense,” Spoor said.

When To License vs. Buy the Whole Pig

Pharmas typically pay an upfront fee at signing, then layer the deal on the back end with payments for development, regulatory and commercial milestones. While the milestones can reach into the billions, upfront fees typically fall below $100 million—and rarely is all the additional cash paid out.

The back-loaded nature of these deals “shift[s] all the risk back [to] the person innovating,” Spoor said, making these types of deals attractive for pharma companies looking to access early candidates that have yet to show commercial success. When a licensing deal is announced, Spoor said he eyes the upfront payment to see “how much is real, how much is future potential.”

According to GlobalData, upfront payments are slowly getting bigger, growing 137%, or $55 million on average from 2021 to 2024, or 22% ($17 million) per year.

One of 2024’s biggest deals involved Novavax, which received $500 million upfront from Sanofi to work together on its COVID-19 vaccine and a combo COVID-flu shot. The deal added another $700 million in milestones for a potential total of $1.2 billion overall. But this one was an outlier. In a typical example for smaller biotechs, Prime Medicine received just $55 million upfront from Bristol Myers Squibb, with $3.5 billion possible later on in milestones.

Axelsen said the larger upfront payments suggested by GlobalData’s analysis could reflect increased demand for licensing deals in general. “Companies are pretty competitive, but they do still have this appetite to de-risk, even if they have to pay more to de-risk,” she said.

Sometimes, however, pharmas want to take a big bite and acquire a company instead. Labya said this approach is more likely when a Big Pharma wants to prevent future competition from smaller companies with drugs in high-growth areas. She noted Pfizer’s huge $43 billion buyout of Seagen for its ADC technology in December 2023. The ADC space has since exploded with licensing deals from Big Pharmas, such as Roche’s newly struck deal with China’s Innovent. GSK also recently signed two ADC deals with China-based firms, first with Hansoh Pharma, then with DualityBio.

From the biotech’s perspective, both types of transactions can be advantageous, said Zevra Therapeutics CEO Neil McFarlane, who advised an all-of-the-above approach to dealmaking. “The M&A versus licensing world, I don’t think it really matters. I think the best thing is, how can you structure a deal that allows for you to find the leverage and allows for you to be able to get a win-win for your shareholders?”

Axelsen, meanwhile, said that she is happy to see so many biotechs accepting licensing deals and continuing as independent companies, as opposed to being acquired by a larger firm, which often leads to layoffs of executives and other employees. “It’s a good trend, because you keep the entrepreneurial spirit, the smallness of the company,” Axelsen said.

On the other hand, if biotechs are acquired and their executives are cut loose, they often return quickly with a new company, just as Seaport Therapeutics’ leaders did after their previous biotech Karuna Therapeutics was bought out by Bristol Myers Squibb for $14 billion in December 2023. This, Axelsen said, is an important part of the ecosystem as well: “Who doesn’t want a big payout and to walk away?”

https://www.biospace.com/business/pharmas-turn-to-licensing-deals-as-risky-science-rises

Galapagos to Spin Out Innovative Medicines, Regain Gilead Assets

 

By mid-2025, the biotech will split into two entities: a new, as-yet-unnamed innovative medicines specialist and a cell therapy company, the latter of which will inherit the Galapagos name.

Galapagos’ most recent attempt to turn its fortunes around will see it separate into two entities—one focused on an innovative medicine pipeline and another on cell therapies. At the same time, the Belgian biotech will take back the rights to its pipeline from Gilead and cut staff.

Galapagos CEO Paul Stoffels called Wednesday’s business move a “critical step” for the company to unlock significant value for its shareholders. “The planned reorganization is a difficult but necessary step, but one that will position Galapagos for sustainable growth and value creation and for future success in its renewed focus on cell therapies,” Stoffels added in a Wednesday statement.

The new innovative medicines business, which has yet to be named, will debut with an approximately $2.5 billion infusion from Galapagos and will focus drug development efforts on oncology, immunology and/or virology. This new entity will prioritize “strategic business development transactions” to fill out its pipeline—a strategy that will be reflected in its masthead, which will include professionals with proven track-records in securing transactions.

In connection with the new entity, Galapagos on Wednesday also announced that it has amended its ongoing collaboration with Gilead, signed in 2019. Galapagos will now have full worldwide development and commercialization rights over its pipeline in exchange for single-digit royalties that will be owed to Gilead based on future potential net sales of certain products. Following the split, the 2019 deal will apply only to the new entity.

“Gaining full global development and commercialization rights from Gilead to our robust discovery and development pipeline supports our commitment to executing our strategy for accelerated growth and value creation,” Stoffels said Wednesday.

The remaining Galapagos entity will be a cell therapy specialist focusing on the lead CAR-T candidate GLPG5101, which is being tested for relapsed or refractory non-Hodgkin lymphoma.

The new Galapagos will also undergo a sweeping strategic realignment, which includes the discontinuation of its small molecule programs. Those programs will be shopped to potential partners.

Galapagos will also conduct a 40% workforce reduction, expected to affect around 300 employees across its operations in Europe. As a result of this reorganization, Galapagos plans to close down its site in France, while its business in Belgium will suffer a “meaningful” decrease in staff.

Galapagos expects to complete the spin-out by mid-2025, subject to customary conditions such as approval from shareholders and concluding consultations with relevant authorities in France, Belgium and the Netherlands. The new spinout company will also apply to be listed on Euronext, and all existing Galapagos shareholders will own shares of the new entity on a pro rata basis.

Wednesday’s strategic move comes almost three years after Stoffels assumed the top executive position at Galapagos with a mission to bring “novel modes of action medicines to patients in need of new treatment options.” Meeting that goal proved to be difficult, however, particularly as the biotech’s stocks never recovered from a December 2020 decision to abandon U.S. prospects for its rheumatoid arthritis therapy Jyseleca, which the regulator rejected months earlier.

In November 2022, just months after he took Galapagos’ reins, Stoffels announced a sweeping strategic overhaul of the biotech. Dubbed its ‘Forward, Faster’ program, the new business approach did away with target-based drug discovery and pivoted to patient-centric R&D, while also beefing up business development efforts and derisking its CAR-T program.

https://www.biospace.com/business/galapagos-to-spin-out-innovative-medicines-regain-gilead-assets

Jasper Therapeutics Skin Disorder Candidate Data Fails To Cheer Investors

 On Wednesday, Jasper Therapeutics, Inc. (NASDAQ:JSPR) reported preliminary data from the ongoing BEACON Phase 1b/2a study of subcutaneous briquilimab in adult participants with chronic spontaneous urticaria (CSU).

Chronic spontaneous urticaria is defined by the presence of hives daily or almost daily for at least six weeks.

The Urticaria Activity Score (UAS) assesses daily pruritus (itchy feeling) and the number of hives, which, when summed over a week, gives UAS7.

Substantial reductions in UAS7 were reported, with a mean change from baseline at 8 weeks of -26.6 in the 240mg (n=3) single-dose cohort and multiple dosing regimens at or above 120mg demonstrating UAS7 changes of more than -25 points.

Clinical responses were observed as early as one week after the first dose, and Complete Responses (UAS7 = 0) were achieved by patients at each therapeutic dose level (80mg, 120mg, 180mg, and 240mg). Most notably, all patients in the 240mg single-dose cohort maintained Complete Responses through the 8-week time point.

The durability of response was generally dose-dependent, and reductions in serum tryptase to levels below the lower limit of quantification were observed at multiple dose levels. Briquilimab was well tolerated in the study and had a favorable safety profile.

Tryptase levels below the lower limit of quantification were reported for 86% (6 of 7) of participants in the 180mg Q8W cohort at week 2 and for 100% (3 of 3) of participants in the 240 mg single-dose cohort at week 1.

Briquilimab was well tolerated in the study, with no dose-limiting toxicities observed.

Jasper expects to begin a registrational program in CSU, with a Phase 2b study expected to commence in the second half of 2025.

Additional data at 180mg Q8W from the open-label extension study, as well as further data from BEACON cohorts evaluating a 360mg single dose, a 240mg Q8W dose, and a 180mg Q8W dose following a 240mg loading dose, will inform the final selection of doses for the Phase 2 b study.

Data from these additional cohorts are expected to be presented by mid-2025.

William Blair reports that the top-line results show strong efficacy across different dose groups, possibly outperforming Celldex Therapeutics, Inc.’s (NASDAQ:CLDX) barzolvolimab.

However, the 180 mg dose performed below expectations, and detailed data on key adverse events by dose level is missing. Analyst Matt Phipps believes more clarity on these issues could ease investor concerns, as the stock faced significant declines.

https://www.aol.com/jasper-therapeutics-skin-disorder-candidate-172329273.html

Hoth: No plans for public or private offering

 The Company affirms that it has no plans for a public or private offering at this time.

Hoth's financial position remains robust, with a strong balance sheet that includes over $10 million in cash and no debt.

Hoth is pleased to report that enrollment in the HT-001 clinical trial is proceeding as planned, with all trial sites now active and enrolling participants.

https://www.prnewswire.com/news-releases/hoth-therapeutics-responds-to-market-rumors-and-shareholder-inquiries-302346186.html

Angiodynamics ups guidance for FY25 after FQ2 results

 AngioDynamics, Inc. (NASDAQ: ANGO), a leading and transformative medical technology company focused on restoring healthy blood flow in the body’s vascular system, expanding cancer treatment options, and improving quality of life for patients, today announced financial results for the second quarter of fiscal year 2025, which ended November 30, 2024.

Fiscal Year 2025 Second Quarter Highlights

	Quarter Ended November 30, 2024	Pro Forma* YoY Growth
Pro Forma* Net Sales	$73.0 million	9.2%
Med Tech Net Sales	$31.5 million	25.0%
Med Device Net Sales	$41.5 million	(0.4)%

• GAAP Gross margin of 54.8%
• GAAP loss per share of $(0.26)
• Adjusted loss per share of $(0.04)
• Adjusted EBITDA of $3.1 million
• Received CPT Category I Codes for Irreversible Electroporation (IRE), the primary method of action for the NanoKnife System, for the treatment of lesions in the prostate and liver, effective January 1, 2026
• Received FDA 510(k) clearance for NanoKnife Prostate Tissue Ablation in December 2024
• Announced NanoKnife hit all primary endpoints of PRESERVE clinical trial for use in Prostate Tissue Ablation in December 2024
• Raising fiscal year 2025 guidance for Adjusted EBITDA and Adjusted EPS

*Pro forma results exclude the Dialysis and BioSentry businesses divested in June 2023 and the PICC and Midline product portfolios divested in February 2024, as well as the discontinued Radiofrequency and Syntrax products in February 2024. Pro forma revenue for Q2 FY25 excludes approximately $0.2 million of returns of divested products during the quarter.

"We are very excited about our strong performance during the second quarter, and in particular the continued strength of our Med Tech segment, which grew 25% over the prior year. We also hit a number of key milestones for our NanoKnife System, with the receipt of CPT Category I Codes and FDA 510(k) clearance for prostate tissue ablation. These achievements put us in a fantastic position to drive accelerated growth for NanoKnife in coming quarters," commented Jim Clemmer, President and Chief Executive Officer of AngioDynamics, Inc. "Through a combination of strong sales results, increasing contribution from our Med Tech segment, and operating efficiency efforts, we delivered positive Adjusted EBITDA and operating cash flow in the quarter. As a result of the tremendous progress made towards our goal of achieving profitability, we now expect to be Adjusted EBITDA positive for the fiscal year.”

https://www.businesswire.com/news/home/20250108903948/en/

Vir Encouraging Data in Ongoing Trials for Dual Masked T-Cell Engagers in Solid Tumors, mCRPC

 – Compelling early clinical response signals for VIR-5818 and VIR-5500 in heavily pretreated patients with various solid tumors

○ VIR-5818: In patients receiving doses ≥400 µg/kg, tumor shrinkage observed in 50% (10/20) of participants with various HER2-expressing cancers; confirmed partial responses in 33% (2/6) of participants with HER2-positive CRC

○ VIR-5500: PSA declines in 100% (12/12) and PSA50 response confirmed in 58% (7/12) of mCRPC patients with first step dose ≥120 µg/kg

– Promising safety profile with MTD not yet reached for VIR-5818 or VIR-5500 and no dose-limiting cytokine release syndrome (CRS) observed; no CRS greater than grade 2 reported

– Initial clinical data demonstrate PRO-XTEN™ masking technology may lead to minimal systemic unmasking and unlocks expanded therapeutic index

– Investor conference call January 8, 2025, at 5:00 a.m. PT / 8:00 a.m. ET, available on https://investors.vir.bio

https://www.businesswire.com/news/home/20250108263221/en