After a bullish period in the final quarter of the year, investors have started to get worried about the prospects for blue chip biopharmaceutical companies going forward, particularly as unfavorable political rhetoric on drug pricing will certainly be dialed up during this U.S. election year. As a result, the BioWorld Biopharmaceutical Index closed January down almost 6%, in lock step with the performance of the Nasdaq Biotech index in the period.
Now it’s an emergency
With news about the 2019-nCoV coronavirus outbreak changing almost hourly and the estimated numbers of those infected increasing, the U.S. Department of Health and Human Services (HHS) has declared a public health emergency in the U.S. over the coronavirus in part because a government diagnostic for the virus yields inconsistent results, a fact that may spur the life sciences to provide a solution. HHS is also saying it may need more money to help it be as proactive and aggressive as possible in detecting the virus and containing an outbreak.
The World Health Organization (WHO) had initially declined to act on the spread of the latest mutation of the coronavirus, but reversed that decision Jan. 30, emphasizing the need for therapies and diagnostics to combat the pathogen.
The number of studies searching for therapies to combat the infection is also on the rise. For example, China will kickstart a phase III trial to determine whether patients with 2019-nCoV can be treated with Gilead Sciences Inc.’s NUC inhibitor, remdesivir, which was originally developed for Ebola, four days after a U.S. patient was said to have recovered by using the drug candidate. The trial will enroll 270 patients and be conducted in Beijing.
The FDA issued two new approvals last week, one for a cell-based pandemic influenza A (H5N1) vaccine and the other as the first approval for a drug to treat peanut allergy. Seqirus Inc. received approval for Audenz to protect people ages 6 months and older against H5N1. It’s the first adjuvanted, cell-based influenza vaccine to be approved. Aimmune Therapeutics Inc. received the agency’s green light for Palforzia, the first approved treatment for patients with peanut allergy. The drug, an oral biologic immunotherapy, is designed to mitigate allergic reactions, including anaphylaxis, that come with an accidental exposure to peanut.
An interim analysis of the phase III Recovery study of TNX-102 SL (cyclobenzaprine HCl sublingual tablets) for treating post-traumatic stress disorder (PTSD) compelled Tonix Pharmaceuticals Holding Corp. to halt enrollment in the clinical trial.
Deals this week
Anika Therapeutics Inc. completed the acquisition of Arthrosurface Inc. by acquiring the company’s outstanding shares in exchange for an up-front payment of approximately $60 million in cash. Atreca Inc. entered a strategic research collaboration with Merck & Co. Inc. to identify the antigenic targets of select antibodies discovered by the company that could be focused on oncology. Biomotiv LLC, a drug development accelerator, and Bristol-Myers Squibb Co. (BMS) said they launched Anteros Pharmaceuticals to pursue development of a class of drugs to treat fibrotic and other inflammatory diseases based on intellectual property developed at Yale University, in-licensed by BMS and subsequently assigned to Anteros. Eyepoint Pharmaceuticals Inc. licensed the right to develop vorolanib, a tyrosine kinase inhibitor, for the treatment of wet age-related macular degeneration, diabetic retinopathy and retinal vein occlusion from Equinox Science LLC. Navrogen Inc. and Levena Biopharma Co. Ltd. are collaborating to develop antibody-drug conjugates targeting humoral immunosuppressed cancers.
The pace of financing deals picked up last week with transactions including:
Public offerings: Albireo Pharma Inc. raised $46 million; Arcutis Biotherapeutics Inc. closed its IPO for gross proceeds of about $183.3 million; Beam Therapeutics Inc., a company developing precision genetic medicines through base editing, priced its IPO for proceeds of about $180 million; Black Diamond Therapeutics Inc. closed its IPO for gross proceeds of approximately $231.3 million; DBV Technologies SA closed its global offering generating about $153.7 million; Denali Therapeutics Inc. generated $207 million from its offering; Kezar Life Sciences Inc. received gross proceeds of $56.8 million; Rapt Therapeutics Inc. priced its public offering for gross proceeds of about $75 million; and, Ziopharm Oncology Inc. priced its offering with gross proceeds expected to be about $90.4 million
Private transactions: Azafaros BV raised €25 million (US$27.5 million) to develop orally available azasugar drugs with potential application to multiple lysosomal storage diseases. Maat Pharma SA closed an €18 million (US$19.9 million) series B round to continue development of its standardized, off-the-shelf fecal microbiota transplant therapy, MaaT-013. Novelty Nobility Inc. has attracted ₩10 billion (US$9 million) in series A funding to develop therapeutic antibodies inhibiting the stem cell factor (SCF)/c-KIT pathway. Orphazyme A/S completed an offering raising gross proceeds of about DKK745 million (US$109.2 million). Sonoma Biotherapeutics Inc. plans to take its newly raised $40 million series A financing to develop regulatory T-cell therapies to control inflammatory responses in autoimmune diseases such as rheumatoid arthritis, inflammatory bowel disease and multiple sclerosis.
Cancer genomes under the microscope
The genomes of 38 different tumor types and the 47 million mutations that fostered their growth are revealed in unprecedented detail in 23 studies published in Nature and other journals on Feb. 6, 2020. The work is the culmination of a decade-long project to sequence the complete genomes of 2,600 tumors, creating the basis for investigating multiple aspects of their causes, progression and classification. The Pan-Cancer Project, involving more than 1,300 researchers across three continents, concludes the cancer genome “is finite and knowable, but enormously complicated.”
The FDA and Federal Trade Commission (FTC) are working together to strengthen their efforts to discourage and stop anticompetitive behavior that could interfere with the development of a robust U.S. biosimilars market. In a joint statement, the FDA and FTC said they would coordinate their efforts to deter manufacturer behavior that impedes access to samples of a reference biologic needed to develop biosimilars, take appropriate action against false or misleading communications about the follow-ons and review patent settlement agreements involving biosimilars.
The FDA issued a draft guidance on developing drugs to treat mucopolysaccharidosis type III, also known as Sanfilippo syndrome. It gives recommendations on trial design considerations, eligibility criteria and efficacy endpoints to enhance the quality of trial data and foster greater efficiency in drug development programs. Comments should be submitted by April 3, 2020.
Word on the Street: BioWorld's favorite quotes of the week
“Remdesivir is not a well-proven drug in either the U.S. or China. Since 2019-nCoV is a new virus, we’ll just try it. There are good scientific reasons for us to believe it could be safe and efficacious. I believe this is the best chance we have for now.”
He Gongxin, former chief representative of the Shanghai office at Gilead Sciences Inc., on the starting of a phase III trial to determine whether patients with 2019-nCoV can be treated with Gilead’s NUC inhibitor, remdesivir, which was originally developed for Ebola
“Investors cite deal fatigue and grouse about the magnitude of new paper, but IPOs and secondary offerings continue to be executed and in fact are generally trading well.”
Cowen & Co. analysts writing on the current investing environment in their January Biotechnology Thermometer report
“I am calling for bipartisan legislation that achieves the goal of dramatically lowering prescription drug prices. Get a bill to my desk, and I will sign it into law without delay.”
President Donald Trump during his State of the Union address Feb. 4.