J.P. Morgan 2015: Notes, Thoughts, And Conversations From the Vortex

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the American Society of Hematology’s annual meeting in December, when some 160 abstracts out were related to products Celgene had some degree of control over.

“That’s awesome,” Pops says. “That’s a force multiplier, you could never do that out of your own labs.”

It’s something we’ve profiled at length in Xconomy; it’s also something Pops hopes to eventually emulate should Alkermes keep growing.

Widening the regenerative medicine niche. Sangamo Biosciences (NASDAQ: SGMO) CEO Ed Lanphier is now chairman of the Alliance for Regenerative Medicine and lead cheerleader for everything that fits under the wide regen-med umbrella, from his own company’s “zinc finger” gene-editing technology to wound-healing programs to cell-based immunotherapy. With his new hat on, he began ARM’s annual update at the Biotech Showcase, a satellite conference during the week, by touting the field’s variety and promise, including of course CRISPR/Cas9, a popular way to edit genomes in research labs but still unproven in therapeutics. (He also made reference to the public radio show Prairie Home Companion’s Powdermilk Biscuits sponsorship song—talk about a niche audience.)

It was a stark difference from one year ago, when Lanphier sat down with a reporter on the final day of the J.P. Morgan scrum to explain, point by point, why zinc fingers outclassed CRISPR/Cas9 as a tool to create new therapies. He didn’t dismiss CRISPR’s potential out of hand, but he did his best to blunt the hype instead of fuel it.

He also hinted that Sangamo would do its best to block CRISPR’s therapeutic use through patent maneuvers. Here are his words from January 2014: “We file patents, we do it early, and we do it in a clever way. We believe we have fundamental patent in TALENs”—another type of genome editing technology—“that will be required to use TALENs in therapeutic settings. I won’t say what we may or may not have done in CRISPR, but shame on us if we haven’t been equally thoughtful.”

The nonprofit crowd. Ros Deegan of Trevena, a Philadelphia-area biotech with a pain and migraine pipeline, was in town for a second reason. She’s trying to launch a new nonprofit crowdfunding platform called Be Impatient. It aims to connect donors with for-profit biotechs that need funding for Phase 2, proof of concept trials—the kind that show the world whether a drug has a serious chance of becoming a real product. She needs to raise seed capital to get the bones of it together.

Donors who participate would get in return only the satisfaction of helping drugs to market. If that happens, some amount of royalties would be pledged back to support low-income access to those drugs. Xconomy will soon post a guest column from Deegan with more explanation, and you can decide for yourself if it’s a viable model.

Making the case for more HCV transformation. Regulus Therapeutics (NASDAQ: RGLS) CEO Kleanthis Xanthopoulos argued a big stock bump for biotechs based on tiny clinical sample sizes, as was the case for Regulus in October and Bluebird in December, can be a sign of rational exuberance. In Regulus’s case—14 patients in a hepatitis C study—early infectious disease data are often predictive of later, larger results (whereas cancer and neurology data are often not).

The next test of investor sentiment comes next month, when Regulus will release more early-stage data from its hep C program, this time based on patients receiving a larger dose of the company’s RNA-based medicine. Xanthopoulos said he has not yet talked to payers and formulary negotiators, who have shaken up the HCV world by demanding price cuts from competitors Gilead Sciences (NASDAQ: GILD) and AbbVie (NYSE: ABBV).

Life at the early end of the venture spectrum. Jay Lichter, the top biotech guy at San Diego’s Avalon Ventures, said the firm’s investors are happy with the lower-risk, lower-return approach of Avalon’s collaboration with GlaxoSmithKline, which they unveiled nearly two years ago.

Avalon, which has kept its tech and biotech investors under the same roof for a long time, will be raising a new fund this year, Lichter said, and the same risk-sharing scheme—whether with GSK or another pharma—should be part of the structure. So far Avalon has created three tiny startups, with a couple more yet to be announced, that GSK has the option to acquire when they reach the milestone of choosing a clinical candidate. “It was two years ago at this meeting that we finalized the term sheet, and we were basically right in how we constructed it,” Lichter said.

Those collaborations aren’t built to go public, at least not in the premeditated way early stage investors like Third Rock, Arch Venture Partners, and Flagship Ventures often launch companies.

“The stage where I invest, I mainly can’t build for an IPO,” said Lichter. “The fact that the public markets are there is pretty much irrelevant. Even though public investors are reaching farther back into the pipeline, no one’s going back to an early-stage target without any chemical matter. And when that happens, that’s the end, because they’re going to get burned.”

Microbiome moves and high-fives. The lead bacterial-cocktail product from Vedanta Biosciences of Boston is now in the hands of Johnson & Johnson (NYSE: JNJ) division Janssen Biotech, as we reported here.

As Janssen moves it toward clinical trials in either Crohn’s disease or ulcerative colitis, Vedanta will turn to other as-yet-undisclosed programs, said David Steinberg and Bernat Olle, the two PureTech people who built Vedanta. During our 30-minute conversation, the pair received congratulations on the deal from a couple passers-by, including Forma Therapeutics CEO Steve Tregay. But Steinberg is ready to step aside and work on other PureTech projects; a search for a new CEO is underway. Olle, the chief operating officer, will stay with the microbiome company.

Pfizer’s Dolsten contemplates bugs. J&J has been the most aggressive pharma company in the microbiome space, but Pfizer (NYSE: PFE) also has a research deal around the role of the gut microbiome in obesity with South San Francisco, CA-based Second Genome (which also had clinical news to share this week).

When asked about Pfizer’s approach to the microbiome, head of worldwide research and development Mikael Dolsten chose his words carefully: “In the longer term, understanding the interplay between the microbiome and human tissues will be important, but we see it more on a longer time horizon.”

Dolsten said it was still “very early days” for the Second Genome collaboration. “It’s still about collecting data and trying to understand correlations.”

Any there any other programs inside Pfizer? “Pilot explorations. If you look at our small molecules, antibodies, vaccines and even gene therapy, and precision delivery of drugs to the brain, beyond that comes the microbiome given its complexity.”

Second Genome is developing small molecules. Seres Health is producing bacterial spores. Vedanta has handed to Janssen a live bacterial cocktail. What does Pfizer think is the best kind of material to treat microbiome-related disease? “I expect the microbiome landscape will evolve with a continuum of small and large molecules and complex organisms,” Dolsten said. “But if you had to choose you’d always prefer for the patient the most simple, well controlled product.”

Ben Fidler contributed to this report 

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