Biotech Roundup: Deals Gone Wrong, Ethical Red Flags & Bay Goodbyes

Xconomy National — 

It was fitting this week that, in the lead-up to two of biomedicine’s biggest self-celebrations, we were served ample reminder of the industry’s expensive decisions gone wrong. This weekend, much of academia and industry involved in cancer will gather in Chicago for the annual American Society of Clinical Oncology conference. Thousands of others will head to San Francisco for BIO, which has a distinct international flavor.

But billions of dollars in acquisitions will be left by the side of the road. Leading the way was BioMarin Pharmaceutical’s decision to shelve its Duchenne muscular dystrophy drug drisapersen (Kydrisa), two years after paying $680 million for it. Merck also saw some expected fruits of its 2014 big-ticket acquisition of Cubist Pharmaceuticals wither away this week, as the Supreme Court wouldn’t reverse a decision that shaved years off the patent life of the top-selling antibiotic daptomyicin (Cubicin). Bad FDA news for Teva Pharmaceutical and AstraZeneca also threw outsized acquisitions into question.

Meanwhile, Sarepta Therapeutics saw its stock take a wild ride Thursday, a project to create a synthetic human genome took more flack, and the Bay Area biotech scene saw a couple old schoolers call it quits. To find out more, dive into this week’s roundup.

—A team led by Jef Boeke of New York University, George Church of Harvard University, Andrew Hessel of software maker Autodesk, and Nancy Kelley proposed in the journal Science to build a synthetic human genome. Last month, news of their closed-door meeting at Harvard stirred fierce debate, which continued this week. NIH director Francis Collins said in a statement that the type of project proposed raised “numerous ethical and philosophical red flags.” The project leaders are seeking $100 million in funding.

—Considering the biopharma acquisitions that led to buyers’ remorse this week, $100 million seems like pocket change. BioMarin Pharmaceutical (NASDAQ: BMRN) of San Rafael, CA, said it would not try to gain European approval of drisapersen, four months after U.S. regulators rejected the Duchenne muscular dystrophy drug. The decision shelves a program that BioMarin bought two years ago for $680 million.

—When Merck (NYSE: MRK) bought Cubist Pharmaceuticals for $9.5 billion in December 2014, it counted on blockbuster sales of Cubist’s skin-infection antibiotic daptomycin (Cubicin) for years. But the U.S. Supreme Court this week refused to reinstate four disputed patents related to daptomycin, according to Reuters. The only remaining daptomycin patent will expire in June, clearing the way for generic competition years earlier than expected.

—The FDA also made regulatory decisions that cast a pall on recent buyouts. Last Friday, it rejected AstraZeneca’s ZS-9, meant to lower dangerous blood potassium levels in patients with heart or kidney disease. AstraZeneca got the drug when it bought ZS Pharma in late 2015 for $2.7 billion. Shares of competitor Relypsa (NASDAQ: RLYP) are up more than 25 percent since the ZS-9 decision.

—This week the FDA said no to deutetrabenazine, a drug to treat symptoms of Huntington’s disease owned by Teva Pharmaceutical Industries. The agency wants more data about the drug, but not necessarily more clinical testing. Teva nabbed deutetrabenazine in its $3.2 billion acquisition of San Diego’s Auspex Pharmaceuticals last year.

—And the FDA giveth… After more than a decade of twists and turns, Cranbury, NJ-based Amicus Therapeutics (NASDAQ: FOLD) tallied its first drug approval, as the European Medicines Agency cleared migalastat (Galafold), a treatment for Fabry disease. A company official told Xconomy the drug would be priced in line with standard of care enzyme replacement therapy, which costs around $300,000 per patient, per year. The FDA also approved obeticholic acid (Ocaliva), a drug from New York-based Intercept Pharmaceuticals (NASDAQ: ICPT) for the rare liver disease primary biliary cirrhosis. The drug has a list price of $69,350 per patient, per year.

—Jazz Pharmaceuticals (NASDAQ: JAZZ) agreed to pay $1.5 billion for Ewing, NJ, and Vancouver-based Celator Pharmaceuticals (NASDAQ: CPXX) and its leukemia drug CPX-351, a reformulation of the oft used chemotherapy combination of cytarabine and daunorubicin. Celator planned to file for regulatory approval in the U.S. and Europe later this year.

—A Bay Area biotech warhorse is cashing it in. StemCells of Newark, CA, said this week it would wind down operations after a Phase 2 trial of its lead product, a spinal cord injury therapy, didn’t do enough to help patients.

—Another Bay Area old timer is stepping aside. Richmond, CA-based Sangamo Biosciences (NASDAQ: SGMO), the only gene editing firm to advance a treatment into clinical trials, said its founder president and CEO Edward Lanphier would hand over the reins but keep his board seat. Sandy Macrae, most recently the chief medical officer of Takeda Pharmaceutical, is now CEO and president.

—More cash for life sciences venture teams: 5am Ventures of Menlo Park, CA, announced its fifth fund, topping it off at $285 million. And Boston and London-based venture firm SV Life Sciences has raised $274 million towards its sixth fund, according to a regulatory filing.

—Edison, NJ-based Contravir Pharmaceuticals (NASDAQ: CTVR) acquired privately held Ciclofilin Pharmaceuticals of San Diego to add another experimental drug for hepatitis B to its portfolio. Contravir will pay $17 million in cash and 10 percent of its equity to Ciclofilin shareholders, but only if the company’s lead drug, CPI-431-32, hits certain milestones.

—The nonprofit Boston-based T1D Exchange and med tech startup incubator M2D2 have launched what’s being called the “Diabetes Innovation Challenge,” a competition to help find and fund new ideas—devices, drugs, and diagnostics—for diabetes research. Two winners will be chosen in October and get up to $150,000 in cash and other prizes.

—Let’s finish with funding: San Mateo, CA-based Vium—formerly known as Mousera—raised $33 million to build its high-tech vivarium business…Ann Arbor, MI-based Strata Oncology reeled in $12 million to build out its tumor sequencing and clinical-trial referral service….Boston startup Antera got $1.7 million in seed funding from RA Capital Management and others to help sell a liquid formula for infants to help prevent the onset of peanut allergies.

Xconomy Deputy Biotech Editor Ben Fidler contributed to this week’s roundup.