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What Three Biotechs Could Tell Us About The Pfizer-Allergan Merger

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$80 million upfront, was promised far more if their joint efforts came to market, and saw Pfizer take a 10 percent stake in the company.

Pfizer took the plunge because Cellectis’s version of CAR-T therapy—juicing up human T cells to help a patient’s own immune system fight off cancer—is considered less complicated than those in development from Juno Therapeutics (NASDAQ: JUNO), Kite Pharma (NASDAQ: KITE), and Novartis (NYSE: NVS). Those firms are working on autologous therapies, which require T cells taken from a patient, altered outside the body, then reintroduced. My colleague Ben Fidler reported recently on some of the hurdles, outlined by experts at an immunotherapy conference.

Cellectis is going “off the shelf”—harvesting T cells and modifying them so they work in a range of patients. To do so, Cellectis is using a gene editing technology called TALEN to alter the cells in a few ways, including a genetic change to keep them from attacking the patients who receive the treatment.

Off-the-shelf might be easier to mass-produce, but what seems like a deep commitment from Pfizer now must run the gauntlet of committees and inside politics, all while well-heeled competitors Juno, Novartis, and Kite (with its partner Amgen) march deeper into the clinic with their lead products. Speaking after Read and Saunders revealed they would be the one-two punch of the new Pfizer, Choulika said Read was a “champion of the deal” and also praised the “chemistry” between Cellectis and Pfizer scientists: “When you have an external view of Pfizer, it’s hard to believe, but it’s a very human company from the inside.”

The second partner I’ll profile, Second Genome, is also on the Pfizer side, and also providing the pharma giant with an expertise in a cutting-edge field of research: the microbiome.

Obesity, diabetes, and other metabolic diseases are a massive health problem, and a new crop of weight-loss drugs, based on traditional drug chemistry, have proven disappointing.

The combined Pfizer-Allergan would have zero metabolic drugs under its roof, according to slides presented at the merger press conference. They’re still a top area of interest, however. Despite cutting back its therapeutic areas after the Wyeth deal, Pfizer has maintained a research group for cardiovascular and metabolic disease, run by Morrie Birnbaum, a diabetes expert who came from the University of Pennsylvania.

Could the microbiome be Pfizer’s way in? Second Genome of South San Francisco was originally founded to pursue microbe-based environmental cleanup, but the biotech is now developing traditional small molecules that alter the way microbes interact with the gut to create or exacerbate diseases. Beyond its nascent clinical program for Crohn’s disease, Second Genome has been working on metabolic research with Pfizer. Announced in May 2014, the two are studying 900 people recruited by Massachusetts General Hospital whose metabolic profiles—of varying states of disease or wellness—are well known. To the patients’ existing profiles, Pfizer and Second Genome have added information about the bugs in their guts, the proteins the bacteria are secreting, and more. It’s not part of a clinical study, but it’s a deep dive to “understand what the bugs are doing in the context of disease,” Second Genome CEO Peter DiLaura told me lsat year.

And now? DiLaura declined to give updates on the project or comment on the merger.

(DiLaura is appearing with Whole Biome CEO Colleen Cutcliffe at our Dec. 10 EXOME event, the Bay Area’s Life Science Disruptors, to talk about building their microbiome therapeutic startups—two of the few so far to emerge from the new field.)

Considering how projects—especially centered on early stage, high risk science—can enter a state of limbo during the long merger process, it would be notable if in coming months Pfizer committed more resources to the collaboration. But if Pfizer punts, it wouldn’t likely be a big blow to Second Genome, which has already secured a deal with the Big Pharma most dedicated to microbiome work, Johnson & Johnson.

The third partner I’ll highlight has built what seems to be more crucial ties to the new Pfizer. Medicines360 of San Francisco is trying something new, and it needs the Allergan sales force to succeed. The nonprofit gained FDA approval this year for an interuterine contraceptive device, or IUD, on the strength of a huge Phase 3 trial funded by an anonymous donor. But Medicines360 wants to be self-sustaining as it pursues its goal of bringing more contraception, and fewer unwanted pregnancies, to young, lower income women in the U.S. and abroad. I described the unique business model here; Allergan’s key role is to sell the device, branded as Liletta, to private clinics at market rates.

The first sales began in April. Medicines360 CEO Jessica Grossman declined to give specifics but said sales have beaten Allergan’s initial forecast.

Medicines360 is using its cut of those sales to offer the IUD to public health clinics for a flat $50. They typically cost hundreds of dollars, said Grossman. The lower price lets the clinic pass savings to their clients or even offer the IUDs for free. But there’s a second benefit: It also allows the clinics to stock the IUDs in advance so women requesting them don’t have to come back—crucial for women with limited resources or working more than one job. “Our price is all about having an affordable product on the shelves of the clinic,” said Grossman.

Medicine360’s original collaboration was with Actavis, which bought Allergan in June and adopted the name. When Liletta launched in February, an Actavis spokesman told Xconomy it had seven women’s health products and sales contacts with 25,000 U.S. healthcare providers.

According to Allergan’s latest financial reports, women’s health is its fourth-largest revenue generator in the U.S., with $767 million in net sales the first three quarters of 2015.  Pfizer has its own women’s health business, led by its Premarin estrogen pills.

Grossman said Allergan has been “a terrific partner.” It’s hard to forecast what happens when two massive organizations collide, but she thinks Liletta’s nonprofit side will boost the new Pfizer’s for-profit sales, based on anecdotes from doctors that their patients “want [the device] immediately” after hearing about “the mission.”

“We feel comfortable there will be a continued commitment,” said Grossman.

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