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Notes from the JPM19 Vortex: Price Apocalypse, Celgene Fallout & More

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lead drug JTX-2011 is designed to stimulate a patient’s cancer-killing T cells by latching on to a protein called ICOS. (Observers were not impressed with an update last year at ASCO, and Jounce shares have not recovered.)

In 2016, Celgene paid $225 million upfront for opt-in rights to JTX-2011 and more; it has yet to exercise them. Bristol has its own ICOS program, not quite as advanced as JTX-2011. CEO Richard Murray characterized the decision essentially as a yes or no from Bristol, if the merger goes through. “It’s nonmaterial to us at the moment because Celgene paid us upfront.”

SYNERGY WATCH

We asked investor Brad Loncar, who runs a fund dedicated to the immuno-oncology space, about the post-merger fallout. He focused in part on the $2.5 billion in “synergies” (read: programs to cut, people to lay off) that Celgene and Bristol highlighted in their pitch. While some big-cap biotechs have fine-tuned their R&D engines like Teslas, Celgene, relying on price hikes for its multiple myeloma treatment lenalidomide (Revlimid), “is like an old 1970s Buick,” Loncar said. (Never mind that some people would kill for one of these.)

Loncar’s prediction: Celgene’s $10 billion bet on Seattle’s Juno Therapeutics is going to blow up and “be worth zero one day.” CAR-T cell therapy, where Juno has fallen behind rivals Kite Pharma (now part of Gilead Sciences) and Novartis, is proving to be complicated business, as Xconomy explained last week. Even if Juno shows that its still-experimental lymphoma CAR-T is better than the approved products from Gilead and Novartis, the logistics of the treatment, which requires weeks to produce, special onsite training, and safety precautions, could make it hard for hospitals to switch. That’s the near-term danger.

Longer-term, all the first-generation CAR-T players are at risk of getting lapped by newer technology. If other developers figure out how to make allogeneic cell therapies from pools of healthy donors—a big if—they will deliver treatments faster and more cheaply. Loncar made another prediction: That his Juno prediction would be controversial.

YEAR OF THE FEMALE EXECUTIVE?

Three years ago at J.P. Morgan, the life-science industry’s gender gap was exposed in ugly fashion. A now-notorious cocktail party sparked not just anger but action, including a new women’s mentoring network, and penance on the part of the party’s sponsor, now deeply involved in recruiting women for biotech boards—no easy task, thanks to the systematic imbalance perpetuated by venture capitalists.

California recently mandated that its public companies have at least one woman on their boards by the end of 2019, boosting the debate about the need for quotas. Legal challenges haven’t surfaced yet, but life-science executives aren’t waiting around, recruiter Robin Toft told Xconomy this week. She’s calling 2019 “the year of the female executive.”

“A lot of people are not aligned with the fact it had to be legislated, but at the same time appreciative that it’s the only way it’s really going to change,” said Toft.

For the last 12 years, Toft’s firm, the San Diego, CA-based Toft Group, has tried to help; 40 percent of its 2018 recruits were female. Historically, biopharma companies have filled their boards with people their top executives already know: middle-aged white men. But things are changing, Toft said. “I have people at public companies coming up to me saying, ‘I’m very embarrassed that my entire board is white men, and I have to change this immediately.'”

Studies continue to reinforce the financial and cultural advantages of a more diverse workforce, and Toft, who is moving headquarters to South San Francisco, is hopeful that this realization will finally pay off for aspiring female executives. “These women are amazing, they just lack confidence to compete or are not plugged into the right networks. They are going to shine if given the opportunity to interview. But if you’re never given the opportunity, you won’t win the job.”

ONE-CHEEK SNEAK

Outrageous prices were all the talk this week, amplified by Stat’s preview piece that described how the biopharma world comes to town every year, despite the litany of San Francisco’s ills. Hey, the world gets to complain about life-saving drugs that parents can’t afford for their kids. Drug companies get to complain about $170 gallons of coffee. Seems fair.

The shameless gouging did seem more egregious this year. Adaptimmune (NASDAQ: ADAP) CEO James Noble said his firm’s $1,000-a-night rented room, at a hotel known for its rock-and-roll memorabilia, smelled like it hadn’t been aired out in many weeks—a suspicion confirmed, he said, when a handyman mentioned that the room was on his list of fixer-uppers.

More examples: A bar-and-grill joint called Jasper’s imposed a 1.5 hour limit on tables; anything more would rack up a $50 charge per half hour. Hotels like the JW Marriott and Nikko turned their posh lobbies into rented affairs. A few minutes early for a meeting at the Nikko one morning, we went looking for a place to type out a few sentences on our laptops. The chairs were roped off at $30 an hour. So we opted for a very cheap staircase, all the while waiting for a tap on the shoulder. Any minute, we feared, we could get a warning that we were running up a tab of $5 per 15 minutes. Just in case, we were careful to sit on only one cheek, figuring we could argue for a 50 percent discount.

WORDS MATTER

At J.P. Morgan presentations, every word you say—or don’t say—matters.

During his Monday talk, Sarepta Therapeutics (NASDAQ: SRPT) CEO Doug Ingram said his company had FDA permission to start a pivotal, placebo-controlled study of its experimental gene therapy for Duchenne muscular dystrophy. That’s big news. Sarepta’s gene therapy is the furthest along of three such treatments.

But Ingram said something else, too: Sarepta must also run a separate study to test the gene therapy in much larger batches as if it were a commercial product. To make an approval decision, the FDA wants to see … Next Page »

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