As the coronavirus pandemic rages on, biopharma companies are being forced to respond to multiple challenges that could derail their existing business plans. Already companies are reporting that, in therapeutic indications not involving COVID-19, their ongoing and planned clinical trials are being interrupted or delayed by the pressures now being imposed on global health care systems. Also, on the financial front, there is mounting evidence that access to follow-on financings is drying up for public companies, and a prolonged economic downturn as a result of the pandemic could eventually strain the existing cash resources of pre-cash flow companies.
The race to find suitable therapeutics and vaccines continues: Three different vaccine technologies are being deployed in the desperate global effort to combat the SARS-CoV-2 virus, but Rino Rappuoli, chief scientist at the GSK Vaccines arm of Glaxosmithkline plc, said he sees traditional protein-based adjuvanted subunit vaccines, the trusted workhorse of infectious disease prevention, as offering the best bet for delivering a safe and effective vaccine at scale, within the tight timescales necessitated by the present crisis.
Altimmune Inc. and the University of Alabama at Birmingham said they created AdCOVID, a single-dose, intranasal COVID-19 vaccine candidate, and are preparing for immunogenicity studies and manufacture of phase I trial material. Initially, the firm will work with university investigators on preclinical animal studies and characterization of the vaccine immunogenicity with the goal of enabling a phase I trial in the third quarter. Amgen Inc. and Adaptive Biotechnologies Inc. said they will combine expertise to discover and develop fully human neutralizing antibodies targeting SARS-CoV-2 to potentially prevent or treat COVID-19. Brii Biosciences Ltd., along with Tsinghua University and the 3rd People’s Hospital of Shenzhen, agreed to collaborate to discover, develop, manufacture and commercialize fully human neutralizing monoclonal antibodies to address the COVID-19 pandemic. Capricor Therapeutics Inc. said it is providing CAP-1002, its cell therapy for treating advanced COVID-19, under the compassionate use act, allowing the FDA to immediately collect data on experimental treatments and then make decisions about safety and efficacy. Clover Biopharmaceuticals Inc. has teamed up with Dynavax Technologies Corp. on a research collaboration to develop a vaccine candidate to prevent COVID-19. The partnership will draw on Clover’s protein-based coronavirus vaccine candidate, COVID-19 S-Trimer, which is in the preclinical stage. Dynavax will contribute its TLR9 agonist adjuvant, CpG 1018, and technical expertise to the initiative. Cobra Biologics Ltd. and the Karolinska Institutet in Sweden said they were awarded €3 million (US$3.3 million) in emergency funding by Horizon 2020 for research and development, and phase I testing of a DNA vaccine against COVID-19, as part of the OPENCORONA consortium to support global efforts tackling the pandemic. Cytodyn Inc. said the three-day effect of leronlimab in eight severely ill COVID-19 patients demonstrated a significant improvement in several important immunologic biomarkers. Diffusion Pharmaceuticals Inc. has started a cooperative research effort with the University of Virginia Health and the Integrated Translational Research Institute of Virginia, to evaluate Diffusion’s small molecule in patients with acute respiratory distress syndrome associated with COVID-19 infection. Gigagen Inc. said it has been developing a recombinant polyclonal antibody therapy, rCIG (recombinant anti-coronavirus 19 hyperimmune gammaglobulin), designed to reproduce whole antibody repertoires of recovered COVID-19 patients, including high concentrations of those antibodies that target and prevent further replication of the COVID-19 virus. Immunitybio Inc. said it is collaborating with Microsoft to leverage the company’s Azure platform to perform a highly detailed computational analysis of the spike protein structure of the SARS-CoV-2. The protein is the key to the mechanism the virus uses to invade cells in the body and cause an infection. Incyte Corp. said it is working with the FDA to initiate a phase III trial to evaluate the efficacy and safety of ruxolitinib (Jakafi) plus standard-of-care (SoC), compared to SoC therapy alone, in patients with COVID-19-associated cytokine storm. La Jolla Pharmaceutical Co. is providing Giapreza (angiotensin II) for emergency use in patients with septic shock due to COVID-19 at Guy’s and St Thomas’ NHS Foundation Trust in London. Noveome Biotherapeutics Inc. has launched a program to evaluate ST-266, its lead product candidate, as a potential treatment of the severe inflammatory cytokine storm response frequently observed in the lungs of patients with COVID-19. VBI Vaccines Inc. is collaborating with the National Research Council of Canada to develop a pan-coronavirus vaccine candidate targeting COVID-19, severe acute respiratory syndrome and Middle East respiratory syndrome.
Biopharma equities recover
After plunging dramatically at the beginning of the month, biopharmaceutical equities appear to be recovering some of the valuation they originally lost when the financial markets cratered. As the curtain closed on a very turbulent month that most investors will want to forget, the BioWorld Biopharmaceutical index finished up 0.75%, but down about 2% for the year. The Dow Jones Industrial Average did rally at the end of the month but still dropped almost 14%, contributing to a 23% loss in value for the year.
Deals of the week
Alphamab Oncology Co. Ltd. said subsidiary Jiangsu Alphamab Biopharmaceuticals Co. Ltd. established a partnership with Simcere Pharmaceuticals Group and 3D Medicines (Beijing) Co. Ltd. to advance the development and commercialization of KN-035 (also known as envafolimab), a checkpoint inhibitor for PD-L1, for oncology indications in mainland China.
Cytomx Therapeutics Inc. hit a clinical milestone in its CX-2029 program, triggering a $40 million payment from Abbvie Inc. In April 2016, the two companies entered a co-development and licensing agreement for the Probody drug conjugate against CD71, also called the transferrin receptor 1, a cell surface protein needed for iron uptake in dividing cells that is highly expressed in several solid and hematologic cancers.
Fate Therapeutics Inc. inked a multiyear, global collaboration worth up to $3 billion with Janssen Biotech Inc., which calls for the latter to contribute antigen binding domains for up to four tumor-associated targets. Fate receives $50 million in cash and another $50 million from the purchase by Johnson & Johnson Innovation – JJDC Inc. of newly issued shares of Fate’s common stock at $31 per share. Fate will receive up to $1.8 billion if it hits the agreement’s development and regulatory milestones. Plus, there is another $1.2 billion available if commercial milestones are met.
Hoth Therapeutics Inc. said it entered a nonbinding letter of intent with Isoprene Pharmaceuticals Inc. to acquire the full licensing rights of VNLG-152 retinamides (retinoic acid metabolism blocking agents, or RAMBAs) for the treatment of dermatological diseases.
Horizon Therapeutics plc has agreed to pay $45 million up front plus milestones to acquire stealth startup Curzion Pharmaceuticals Inc., the developer of a potential therapy for diffuse cutaneous systemic sclerosis (dcSSc). The asset, an oral selective lysophosphatidic acid 1 receptor antagonist, showed initial evidence of potential benefit in an exploratory phase II test among people with dcSSc in 2014, but will now face a tougher trial in what Horizon envisions as a pivotal phase IIb study expected to begin in the first half of 2021.
Lifemax Laboratories Inc. has formed Ammax Bio Inc., with an exclusive license from Amgen Inc. for the right to develop, manufacture and commercialize AMG-820, a monoclonal antibody against the colony-stimulating factor 1 receptor, which has completed phase I/II studies in solid tumors.
Immunometabolism specialist Sitryx Ltd. signed a licensing agreement in autoimmune disease with Eli Lilly and Co. involving up to four preclinical programs, for which it is receiving $50 million up front, $10 million as equity investment and up to $820 million in development milestones. Should any product reach the market, it would also receive undisclosed commercial milestones and sales royalties in the mid- to high-single-digit-percentage range.
Regenxbio Inc. granted Ultragenyx Pharmaceutical Inc. an exclusive worldwide license, with rights to sublicense, to its NAV AAV8 and AAV9 vectors for use as gene therapy treatments for an undisclosed rare metabolic disorder.
Public offerings: Keros Therapeutics Inc. disclosed terms for its IPO. The firm plans to raise $75 million by offering 5 million shares at a price range of $14 to $16. Shares of cancer drug developer Zentalis Pharmaceuticals Inc. (NASDAQ:ZNTL) shot up 29% to $23.20 on April 3 after an upsized IPO to sell 9.2 million shares at a top-of-range $18 each. The New York-based company expected to gross $165.2 million in the offering.
Other public offerings: Bellerophon Therapeutics Inc. closed its registered direct offering of 1.275 million shares priced at $12 apiece for gross proceeds of $15.3 million.
Venture funding: Affinia Therapeutics Inc. closed an oversubscribed $60 million series A financing. Ampersand Capital Partners closed its latest oversubscribed fund, Ampersand 2020 LP, with $690 million in limited partner commitments. Aspen Neuroscience Inc. closed its series A funding round of $70 million. Dynacure SAS closed a €50 million (US$54.2 million) series C financing led by Perceptive Advisors. Elevatebio LLC has triple-pronged plans for its $170 million series B round, which the company said will be directed toward manufacturing cell and gene therapies. Immuno-oncology specialist Iteos Therapeutics Inc. raised $125 million in the second tranche of its series B, bringing the total for the round to $175 million and fueling clinical development of a pipeline of drugs targeting PD-1 resistance. Rgenta Therapeutics Inc., a new biotechnology company focusing on developing RNA-targeting medicines for historically undruggable disease-relevant targets, said it closed a $20 million seed investment, co-led by Boehringer Ingelheim Venture Fund and Matrix Partners China. Zucara Therapeutics Inc. closed a $21 million series A financing.
Flagship Pioneering Inc. and Arch Venture Partners collectively raised a massive $2.56 billion to fund new company creation and growth. Flagship closed a $1.1 billion capital raise for its seventh Origination Fund to create companies originating and operating in its Flagship Labs unit, and Arch closed two new funds, its Venture Fund X and Venture Fund X Overage, with a combined $1.46 billion, both for investing in early stage companies. Venbio Partners LLC closed on about $394 million in a capital raise that included new and existing investors, with a broad range of institutional concerns in the mix.
The FDA has implemented the Coronavirus Treatment Acceleration Program, a comprehensive public-private approach to swiftly bring coronavirus treatments to market. "As part of this new program, the FDA is cutting red tape, redeploying staff and working day and night to review requests from companies, scientists and doctors who are working toward therapies,” U.S. Health and Human Services Secretary Alex Azar said. Under the accelerator program, FDA staff from the Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research will provide regulatory advice, guidance and technical assistance to sponsors as fast as possible.
The FDA, in collaboration with other federal agencies and the Institute for Genome Sciences at the University of Maryland, developed quality-controlled reference sequence data for the SARS-CoV-2 reference strain for the U.S. The availability of traceable and quality-controlled data will help COVID-19 test developers and vaccine developers expedite the development of medical countermeasures, identify new or more stable targets for future tests, enable in silico confirmation of targets, support the development of synthetic reference material and enable viral population/quasi species analysis, the agency said.
Word on the Street: Industry responses to the issues of the week
“Both the scientific approach as well as the vectors are unique to Affinia. The vectors are identified from rationally designed adeno-associated vector [AAV] libraries using the Smartlibrary approach.” The libraries are “subjected to a multiparametric screen to identify AAVs with a unique set of properties optimally matching the required target profile for each indication in terms of tissue tropism, pre-existing immunity and manufacturing yield.”
Affinia Therapeutics Inc.’s scientific co-founder, Luk Vandenberghe. The company closed an oversubscribed $60 million series A financing
“We are working to provide as much relief as possible to our stakeholders, consistent with our ability to maintain the USPTO’s fee-funded operations. We are especially mindful of the outsized impact on small businesses and independent inventors and have provided additional relief for these groups. Ultimately, our goal is to ensure not only that inventors and entrepreneurs can weather the storm, but that they can hit the ground running once it passes.”
USPTO Director Andrei Iancu, commenting on the U.S. Patent and Trademark Office (USPTO) extending the deadlines for filing certain patent documents and paying some required fees
“We certainly are in the middle of a crisis, so it’s difficult to look ahead very much just because in the world we operate in there are always extreme uncertainties. I’ve always had the view we’re in the business of known uncertainties. You don’t know if a product will work, and on and on. But once in a while there are uncertain uncertainties. You can’t act with confidence and you take mitigation steps. Hopefully, in time we’ll come out of that.”
Noubar Afeyan, founder and CEO, Flagship Pioneering Inc., which closed a $1.1 billion capital raise