After being in the doldrums for majority of the year, public biopharmaceutical companies have turned the corner and are now on a major upswing. Following a 10% increase in value in October, the BioWorld Biopharmaceutical index repeated the performance in November, with the sector’s elite companies posting significant gains in their share prices. Once again, the sector outperformed the general market, with the Dow Jones Industrial average gaining 4% in the period and the Nasdaq Composite index posting a 4.5% gain. Year-to-date, the index is tracking up a respectable 11%. 

The positive investor environment spilled over to newly minted public companies, with Karuna Therapeutics Inc. leading the charge with a 349% increase in stock price since its June first day public debut. Its share price skyrocketed in the last month following positive top-line phase II data of Karxt in acute psychosis in patients with schizophrenia, providing a potential read-through to larger indications such as Alzheimer’s disease and pain. A BioWorld analysis of the 53 IPOs completed on U.S. exchanges year-to-date shows an overall average increase of 26% in their stock prices, with 36 currently trading above their IPO prices, while 17 are trading below.  

Gene therapy is hot 

Investors have certainly gravitated to companies in the cell and gene therapy field, a move that will be reinforced by news that Audentes Therapeutics Inc. is being acquired by Astellas Pharma Inc., which is paying $60 per share in cash for an equity value of about $3 billion. The companies aim to create a stronghold in gene therapy, where each firm holds expertise. The deal is expected to close in the first quarter of next year. 

Deals of the week 

In its second large deal of the year, Neurocrine Biosciences Inc. acquired the rights to Xenon Pharmaceutical Inc.’s selective sodium channel inhibitor for treating epileptic encephalopathy. Xenon receives $30 million up front and $20 million in equity, and downstream milestones could total up to $1.7 billion.  

Gatehouse Bio is collaborating with Astrazeneca plc to explore identification of new targets for respiratory and cardiovascular diseases using Gatehouse Bio’s artificial intelligence-powered platform. GI Innovation Inc. has licensed to Simcere Pharmaceutical Co. Ltd. the rights to its immunotherapy drug candidate, G1-101, a bispecific CD80/interleukin2 variant fusion protein, to undertake clinical development, regulatory approval and commercialization of the drug in mainland China, Hong Kong, Macau and Taiwan. GI Innovation will receive an up-front payment of $6 million and will be eligible to receive up to $790 million in milestone payments. Resonant Therapeutics Inc. inked an agreement with Janssen Research and Development LLC, a unit of Johnson & Johnson, to discover and validate tumor and immunological targets and to validate certain therapeutic candidates. The collaboration will leverage the capabilities of Resonant’s Impact tumor microenvironment model and target validation platform and Janssen’s oncology organization to speed development in emerging targets and therapeutic opportunities. Seattle Genetics Inc. and Astellas Pharma Inc. have agreed to work with Merck & Co. Inc. to evaluate a combination of the antibody-drug conjugate enfortumab vedotin and Merck's anti-PD-1 therapy, Keytruda (pembrolizumab), in patients with previously untreated metastatic urothelial cancer. Under the terms of the agreement, the three companies will conduct and fund a global, registrational phase III trial to be initiated in the first half of next year under the leadership of Seattle Genetics. 

Fighting infectious diseases 

The public-private Innovative Medicines Initiative (IMI) AMR Accelerator has launched the Collaboration for Prevention and Treatment of Multi-Drug Resistant Bacterial Infections (COMBINE) to accelerate efforts to combat antimicrobial resistance. COMBINE will be funded by IMI, a joint initiative between the European Commission, which will supply €8 million (US$8.9 million), and the European Federation of Pharmaceutical Industries and Associations, which will provide in-kind contributions totaling €17 million. 

The FDA has launched CURE ID, an internet-based repository designed to allow the clinical community to report their experiences treating difficult-to-treat infectious diseases with novel uses of existing FDA-approved drugs through a website, a smartphone or other mobile device. The platform enables the crowdsourcing of medical information from health care providers to guide potentially life-saving interventions and facilitate the development of new drugs for neglected diseases. The repository is a collaboration between the FDA and the National Center for Advancing Translational Sciences (NCATS), part of the NIH. 

Cash flow 

Several companies priced and completed public offerings this week including: 

Arrowhead Pharmaceuticals Inc., which raised gross proceeds of approximately $232 million; Kodiak Sciences Inc., which generated gross proceeds of approximately $276 million; Immunomedics Inc., which raised approximately $250 million; Ardelyx Inc., which priced an upsized underwritten public offering for gross proceeds of $125 million; Relmada Therapeutics Inc., which raised $100 million; and Revance Therapeutics Inc., which brought in $110.5 million. 

Notable venture funding deals included: 

Tumor-agnostic therapy developer Black Diamond Therapeutics Inc., which completed an oversubscribed series C financing of $85 million. Imcheck Therapeutics SAS raised €48 million (US$53.2 million) in a series B financing round to move a pipeline of antibodies targeting gamma delta T cells into the clinic. Clover Biopharmaceuticals Inc. closed a series B financing round to inject another $43 million into its drug development and manufacturing operations, with a focus on biologic candidate SCB-313, developed with its Trimer-Tag technology platform. On the heels of positive phase IIb data, Opthea Ltd. announced a private placement of AU$50 million (US$33.87 million) from institutional investors in Australia and the U.K. to advance lead candidate OPT-302 to phase III trials in wet age-related macular degeneration. 

Regulatory news 

An FDA review of Enzyvant Inc.'s RVT-802, a tissue-based therapy for children born without a thymus, has drawn a complete response letter from the agency over concerns about chemistry, manufacturing and controls, scuttling hopes it would become the first FDA-designated regenerative medicine advanced therapy (RMAT) to win approval from the agency. No new trials will be required. 

The FDA finalized its 2018 draft guidance on adaptive designs for clinical trials of drugs and biologics. The guidance describes the principles the FDA considers important for designing, conducting and reporting effectiveness and safety results from an adaptive trial. It also discusses the types of information sponsors should submit to facilitate the agency’s evaluation of trials with adaptive designs, including Bayesian adaptive and complex trials that rely on computer simulations. In addition to revisions to the Bayesian subsection, the final guidance clarifies the prespecification principle for adaptive design and cross-references the agency’s newly published draft guidance on interacting with the FDA on complex innovative trial designs. The agency anticipates that about 40 sponsors per year will submit documented plans for clinical trials containing a proposed adaptive design and 15 will submit 20 marketing applications that rely on a trial with an adaptive design, according to a notice published in Monday’s Federal Register

The FDA is issuing a draft guidance on establishing the effectiveness of drugs intended to treat interstitial cystitis/bladder pain syndrome, a complex, poorly understood syndrome of unknown cause. Incorporating the recommendations that the FDA received at a December 2017 advisory committee meeting on trial design features, the draft discusses key considerations such as enrollment criteria and efficacy endpoint selection. It also provides general recommendations on trial design features, statistical considerations and the use of patient-reported outcome in 

The Senate Health, Education, Labor and Pensions Committee (HELP) voted 18-5 to send Stephen Hahn’s nomination to the full U.S. Senate, the oncologist who currently serves as chief medical officer at the MD Anderson Cancer Center is just one step away from being confirmed as the next FDA commissioner. 

Word on the Street: BioWorld's favorite quotes of the week

“Honestly, this is probably the best time to be in neuroscience that I can imagine. There is so much creativity, so much great science coming forward.” 
Kevin Gorman, CEO, Neurocrine Biosciences Inc., which has acquired the rights to Xenon Pharmaceutical Inc.’s selective sodium channel inhibitor for treating epileptic encephalopathy 

“Strategies to test and treat infants immediately after birth may improve outcomes. We find that ART initiated within hours after birth is doable and translates into multiple benefits.”  
Mathias Lichterfeld, of the Division of Infectious Diseases at Brigham and Women’s Hospital, Boston, leader of a study, published in Science Translational Medicine, showing that initiating antiretroviral treatment (ART) as soon as infants who are positive for HIV-1 infection are born has significant protective effects, with fewer viral reservoir cells and improved immune system development 

"Those who stuck with the sector through the famine of Q3 have feasted on a cornucopia of returns during the first two months of Q4." 
Cowen and Co. analysts, writing in their monthly Biotech Thermometer 

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