Investors are beginning to show confidence in the financial markets, once again believing that the worst of the ravages caused by the COVID-19 pandemic are behind us and that the stringent restrictions on business activity and personal behavior currently in place will be slowly lifted. As a result, stocks in all sectors rallied in April from their March meltdowns. Against that positive backdrop, the BioWorld Biopharmaceutical index gained more than 10% during April to climb into positive territory for the first time this year. With biopharmaceutical companies working feverishly on unlocking cures for the deadly COVID-19 infection, promising results from their research was handsomely rewarded by investors.
Although the appetite for biopharma IPOs in the U.S. slowed during the meltdown of the financial markets in March, the flow of new offerings has been steady this year, according to BioWorld, with 11 companies graduating to the public stage and listing on U.S. exchanges by the end of April, collectively raising $1.774 billion along the way.
Japan has approved Veklury (remdesivir), Gilead Sciences Inc.’s experimental drug, to treat COVID-19. The fast approval was based on U.S. data and that country’s emergency use of the drug to tackle the pandemic. Japan’s Ministry of Health, Labour and Welfare (MHLW) approved remdesivir to treat COVID-19 using an exceptional approval pathway. An MHLW source said the approval was granted using a “special process under the pharmaceutical law for overseas-developed products in times of emergency.” The MHLW took its cues from the FDA granting emergency use authorization for the drug on May 1.
In one of the latest Sino-foreign collaborations formed to find a cure for the pandemic, Junshi Biosciences Co. Ltd. and Eli Lilly and Co. will co-develop therapeutic antibodies for preventing and treating COVID-19. Junshi has granted Lilly an exclusive license, outside of greater China, to conduct R&D, manufacture and distribute the SARS-CoV-2 JS-016 neutralizing antibodies developed by Junshi. Lilly will pay $10 million up front and milestone payments of up to $245 million for a particular derivative neutralizing antibody or combination of derivative antibodies corresponding to the same product, as well as double-digit royalties on the net sales of the product.
Anixa Biosciences Inc., which is focused on the treatment, prevention and diagnosis of cancer and infectious diseases, said that, together with partner Ontochem GmbH, it has identified its first therapeutic candidate against COVID-19, and has advanced the compound into biological testing. Applied DNA Sciences Inc., with its COVID-19 vaccine development partner, Takis Biotech Srl, said the first injections of DNA vaccine candidates against the Spike protein (product of the S gene) of the SARS-CoV-2 virus have produced neutralizing antibodies in test animals. The studies were completed at the Lazzaro Spallanzani National Institute for Infectious Diseases in Rome. Cohbar Inc. initiated testing of its CB-5064 analogues in preclinical models of acute respiratory distress syndrome (ARDS) to assess their potential as therapeutics for COVID-19-associated ARDS. Researchers at Utrecht University, Erasmus Medical Center and Harbour Biomed Therapeutics Ltd. said they identified a fully human monoclonal antibody that prevents the SARS-CoV-2 virus from infecting cultured cells. The antibody could alter the course of infection in the infected host, support virus clearance or protect an uninfected individual that is exposed to the virus, the researchers said. Preveceutical Medical Inc. is working on developing a water-based cannabidiol sol-gel formulation and nasal applicator to reduce the possibility of coronavirus infections. With its acquisition of Soluble Therapeutics Inc., Predictive Oncology Inc. will use its vaccine technology to develop a COVID-19 vaccine. The technology is based on its self-assembling nanoparticle, Non-Specific Protein 10, using another self-assembling protein, ferritin, an iron storage protein. Sinovac Biotech Ltd. said the first challenge study of its SARS-CoV-2 vaccine candidate on animals shows it induced SARS-CoV-2-specific neutralizing antibodies in mice, rats and nonhuman primates, specifically the rhesus macaque. The results, the company added, show the candidate offered safe and complete protection in rhesus macaques against SARS-CoV-2 strains. Tonix Pharmaceuticals Holding Corp. and the University of Alberta formed a new research collaboration and exclusive licensing agreement for three new vaccines for the prevention of COVID-19. The potential vaccines, TNX-1810, TNX-1820 and TNX-1830, will be based on a horsepox vector platform but designed to express different SARS-CoV-2 antigens than TNX-1800, which is designed to express SARS-CoV-2 Spike protein, Tonix said. Vir Biotechnology Inc. and Alnylam Pharmaceuticals Inc. said they selected a development candidate for VIR-2703 (also referred to as ALN-COV), an investigational RNAi therapeutic targeting the SARS-CoV-2 genome. They plan to advance VIR-2703 as an inhalational formulation for the potential treatment and/or prevention of COVID-19. Zyus Life Sciences Inc., a company collaborating with the Vaccine and Infectious Disease Organization-International Vaccine Centre (VIDO-Intervac) at the University of Saskatchewan, said it will leverage its plant technology platform to develop and express a protein that VIDO-Intervac has identified as a potential antigen for a COVID-19 vaccine. The protein will be isolated by Zyus in its plant expression system and will provide insights into whether plants can produce antigens that are usable in a COVID-19 vaccine.
Shares of Newron Pharmaceuticals SpA (SIX:NWRN) fell more than 71% last week on news that sarizotan, its experimental therapy for the rare neurodevelopmental disorder Rett syndrome, failed to meet both the primary and secondary efficacy endpoints of the company's pivotal STARS study, leading it to terminate the program. In March, Newron CEO Stefan Weber called sarizotan's development part of an important year for the company. Now it will continue to advance a pipeline led by evenamide in schizophrenia, he said, though progress of a phase III trial of that drug has been delayed amid the COVID-19 pandemic.
Rebiotix Inc. said RBX-2660, its standardized, non-antibiotic, microbiome-based therapy designed to reduce Clostridioides difficile (C. diff) infection recurrences, notched positive preliminary results on the primary efficacy endpoint of its ongoing pivotal phase III trial. The primary endpoint was the absence of C. diff diarrhea without the need for treatment as assessed by a subject interview and a physical exam in the first, fourth and eighth week following the treatment’s administration by enema.
TG Therapeutics Inc. got a dose of good news when the independent data safety monitoring board recommended that the UNITY-CLL study be stopped early for superior efficacy after an interim analysis showed its umbralisib and ublituximab combination helped patients with chronic lymphocytic leukemia.
With new FDA approval for a years-old type 2 diabetes drug, Astrazeneca plc's Farxiga (dapagliflozin) has become the first sodium-glucose co-transporter 2 (SGLT2) inhibitor to be approved to reduce the risk of cardiovascular (CV) death and hospitalization for heart failure patients with reduced ejection fraction, a measure of how much blood the left ventricle pumps out with each contraction.
Novartis AG won accelerated FDA clearance for Tabrecta (capmatinib, formerly INC-280), an oral MET inhibitor, for adult patients with metastatic non-small-cell lung cancer whose tumors have a mutation that leads to MET exon 14 skipping as detected by a companion diagnostic, also given the green light. The drug was discovered by Incyte Corp. and licensed to Novartis in 2009. The deal included more than $500 million in potential milestone payments as well as royalties of between 12% and 14% on global sales.
Deals of the week
Acadia Pharmaceuticals Inc. and Vanderbilt University negotiated an exclusive worldwide license agreement to develop and commercialize new drug candidates targeting the muscarinic M1 receptor with the potential to treat a range of central nervous system disorders.
Alexion Pharmaceuticals Inc. will diversify its portfolio beyond its top-selling Soliris (eculizumab) and C5 inhibitor Ultomiris (ravulizumab) by acquiring Portola Pharmaceuticals Inc. for $1.4 billion. The acquisition adds Portola’s Andexxa (coagulation factor Xa [recombinant], inactivated-zhzo) to Alexion’s existing suite of hematology and neurology therapies. Andexxa is the only FDA-approved factor Xa inhibitor reversal agent in severe and uncontrolled bleeding.
The Menarini Group, a privately held Italian pharma and diagnostics company, is acquiring Stemline Therapeutics Inc. in a deal worth up to $677 million. Stemline’s shareholders will be offered $12.50 per share, with $11.50 of it in cash up front along with one non-tradeable contingent value right for $1 in cash per share on the first sale of Elzonris (tagraxofusp) after its EMA approval, which could come this year. Elzonris is FDA-approved for treating adults and pediatric patients, ages 2 and older, for blastic plasmacytoid dendritic cell neoplasm, a rare and aggressive disease of the bone marrow and blood. Elzonris launched in the U.S. in January 2019 and generated $11.8 million in net revenue in the fourth quarter of 2019.
Santen Pharmaceutical Co. Ltd. has negotiated a $252 million ex-U.S. licensing deal for Jcyte Inc.'s Jcell, a human retinal progenitor cell therapy initially aimed at treating retinitis pigmentosa. The agreement includes $50 million in up-front cash for Jcyte plus potential milestone payments and royalties.
Public offerings: Avadel Pharmaceuticals plc, a company focused on developing FT-218, an investigational, once-nightly formulation of sodium oxybate for treating excessive daytime sleepiness and cataplexy in patients with narcolepsy, priced an underwritten public offering with gross proceeds expected to be about $125 million. Ayala Pharmaceuticals Inc. priced its IPO with gross proceeds expected to be $55 million, excluding any exercise of the underwriters’ option to purchase additional shares. Immunomedics Inc. closed its underwritten public offering with net proceeds estimated to be approximately $459 million. Insmed Inc. closed a public offering for gross proceeds of approximately $259.4 million. Kura Oncology Inc. priced an underwritten public offering for gross proceeds of approximately $125.1 million. Lyra Therapeutics Inc. closed its IPO of approximately 4 million common shares priced at $16 apiece, including full exercise by underwriters of their option to purchase up to 525,000 additional shares, for gross proceeds of approximately $64 million.
Other public offerings: Apellis Pharmaceuticals Inc. entered subscription agreements with institutional investors for a private placement of $300 million of 3.5% convertible senior notes due 2026 for an aggregate purchase price of $328.9 million. Bergenbio ASA raised gross proceeds of NOK500 million (US$48.7 million) through an oversubscribed private placement using an accelerated book-building process. IMV Inc. completed a nonbrokered private placement for gross proceeds of approximately CA$25.1 million (US$17.93 million). Pluristem Therapeutics Inc. entered definitive agreements with two institutional investors in connection with a registered direct offering, providing for the issuance of about 1.6 million shares of its common stock at a price of $9.45 per share. Net proceeds are expected to be about $15 million. TG Therapeutics Inc. raised gross proceeds of approximately $60 million through its at-the-market facility.
Venture funding: Oberland Capital Management LLC closed the Oberland Capital Healthcare Solutions Fund and affiliated funds with $1.05 billion of capital commitments at the fund's hard cap. Ventus Therapeutics Inc. has emerged with $60 million in series A funding and big ambitions to bring insights from structural biology to bear on two key aspects of innate immunity, inflammasome activation and cGAS-Sting signaling.
While many biopharma companies are holding the line on U.S. drug prices during the COVID-19 pandemic, a few are providing more fuel to fire up lawmakers over prescription drug prices. The latest flames were stoked by last month’s 220% increase in the price of Jaguar Health Inc.’s Mytesi (crofelemer), a botanical drug used to treat the gastrointestinal side effects of HIV antiretroviral treatments. Two days after the FDA denied an emergency use authorization (EUA) for the drug to be used to treat diarrhea in COVID-19 patients who were given antivirals, Jaguar raised the price of Mytesi from $688.52 per bottle to $2,206.52 per bottle. Rep. Carolyn Maloney (D-N.Y.), chair of the U.S. House Committee on Oversight and Reform, wrote to Jaguar CEO Lisa Conte Monday, urging the San Francisco-based company “to reverse this drastic price increase to ensure everyone who may need Mytesi is able to access it.”
A bipartisan group of senators is pushing for the next COVID-19 stimulus package to include $26 billion to help U.S. researchers who have had their work disrupted by the coronavirus. “Although COVID-19-related research is now in overdrive, most other research has slowed or stopped due to closures of campuses and laboratories,” the senators said in a letter to Senate leadership.
Word on the Street: Industry responses to the issues of the week
“The results of a cost-recovery approach and a cost-effectiveness approach are going to produce very different pricing estimates. … We are releasing these estimates now, despite the fact that the evidence is highly uncertain and evolving, because now is the time when the public and policymakers should be actively debating how to link pricing to an overall platform to develop treatments for COVID-19. The consequential discussion about the tradeoffs and priorities involved with different pricing approaches cannot wait. All share the common goal of achieving rapid discovery, development, production and distribution of effectiveness treatments. All share the understanding that treatments must be affordable in order for this goal to be realized.”
ICER President Steven Pearson, commenting on the Institute for Clinical and Economic Review (ICER) releasing its initial analysis of pricing for remdesivir and other potential treatments for the coronavirus
“It has a durable profile with regulatory exclusivity through 2030 in the U.S. and 2028 in EU. It has demonstrated transformative clinical value by rapidly reversing the anticoagulant effects of factor Xa inhibitors rivaroxaban and apixaban in the event of life-threatening or uncontrolled bleeding and has the potential to be the global standard of care. In 2019, more than 16 million patients used factor Xa inhibitor. And of those, approximately 3% to 5% experienced major or life-threatening bleeds.”
Ludwig Hantson, CEO, Alexion Pharmaceuticals Inc., on acquiring Portola Pharmaceuticals Inc. and bringing in-house Andexxa (coagulation factor Xa [recombinant], inactivated-zhzo), the only FDA-approved factor Xa inhibitor reversal agent in severe and uncontrolled bleeding
“All along our guidance has been that, look, we are doing multiple open-label studies with the intent of picking a winner. Today, we have picked a winner by a huge margin.”
Dinesh Patel, CEO, Protagonist Therapeutics Inc., during a conference call with investors commenting on PTG-300, an injectable hepcidin mimetic for the rare blood cancer polycythemia vera. Initial data from an ongoing phase II study with PTG-300 showed treatment at individualized doses ranging from 10 mg to 80 mg for up to 28 weeks provided control of hematocrit levels and eliminated the need for phlebotomy in all six patients; a seventh, on the drug for 12 weeks, had an unintended dose interruption, received a single phlebotomy and remains on the study.