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Bio Roundup: Generic Drugs Graft, ASCO Ahead, ElevateBio Rises & More

Xconomy National — 

Generic drugs are supposed to give consumers more choices and a counterweight to more costly branded medications. During his tenure as FDA commissioner, Scott Gottlieb often spoke about generics as a market force that could help tame climbing drug prices. But such tools only work when companies play fair.

A lawsuit is now claiming that many top generic drug makers routinely conspired to avoid competition. In a more than 500-page complaint filed in federal court in Connecticut, 44 states allege that 18 generic drug companies divvied up the market so each one had a “fair share,” and then agreed to keep their drug prices artificially high. Teva Pharmaceutical (NYSE: TEVA) figures prominently in the complaint, which alleges that the Israeli company colluded with a small group of its generics competitors to “lead and follow each other’s price increases… resulting in many billions of dollars of harm to the national economy over a period of several years.”

Speaking this week at an investor conference, Teva CFO Michael McClellan said that the lawsuit is a civil case, not a criminal one, and the company will defend itself. But he did not address specific allegations. Let’s get to that story and more in this week’s news roundup.

THIS WEEK IN DRUG POLICY

—Filed last Friday, 44 state attorneys general have joined a massive lawsuit charging 18 generic drug makers of price fixing. Connecticut AG William Tong told Politico that phone records—an uptick of communications between the companies around the time of price hikes—“broke the case wide open.”

—The US Department of Justice (DOJ) issued a memo stating that drugs intended for capital punishment aren’t subject to FDA oversight. A spokesperson told Regulatory Focus that the agency will follow the opinion but drugs “that are not intended for use in lethal injection remain subject to FDA regulation.”

—The FDA released final rules for developers of “interchangeable” biosimilars, off-patent versions of biologic drugs that can be swapped out by pharmacists without a prescriber’s permission, the way generic chemical drugs can. None have yet been approved in the US, MedCityNews explains.

LET’S MAKE A DEAL

—Vertex Pharmaceuticals (NASDAQ: VRTX) paid Kymera Therapeutics $70 million to develop a group of drugs that harness protein degradation, a way of getting after disease-causing proteins that are untouchable via other methods. The move continues Vertex’s plan to diversify while protecting its core cystic fibrosis business, something it wasn’t able to do with its once-promising hepatitis C franchise.

—Synthetic biology firm Ginkgo Bioworks added genome mining technology and antibiotics research to its growing life sciences portfolio. The Boston company acquired those assets by buying a part of Warp Drive Bio from Revolution Medicines.

—Nestlé reached a preliminary $10.1 billion deal to sell its skin health business to a group led by private equity firm EQT Partners, Reuters reported.

DRUG DEVELOPMENTS

—Data presented each year at the American Society of Clinical Oncology meeting, the world’s biggest cancer conference, can change medical practice and make or break companies whose drugs are under the microscope. And each year a few weeks ahead of the meeting, “abstracts,” or snippets of data are revealed. Xconomy rounded up noteworthy data from this year’s abstracts and grouped them into two areas: precision cancer drugs and advances in breast cancer treatments.

—Roche once again delayed its $4.8 billion planned purchase of gene therapy developer Spark Therapeutics (NASDAQ: ONCE) to give the Federal Trade Commission more time to review the deal. Stockholders now have until June 14 to tender their shares.

—Already struggling to keep pace with Sarepta Therapeutics (NASDAQ: SRPT) in the race to develop a gene therapy for Duchenne muscular dystrophy, Solid Biosciences (NASDAQ: SLDB) reported another setback. A patient treated with its Duchenne muscular dystrophy gene therapy suffered a transient decline in platelet levels from the gene therapy, and a serious GI infection that wasn’t related to the treatment. The patient recovered and the trial continues, but shares nonetheless fell 40 percent.

—Agios Pharmaceuticals (NASDAQ: AGIO) said its cancer drug ivosidenib (Tibsovo) succeeded in a Phase 3 study in patients with cholangiocarcinoma, a rare cancer of the bile ducts. Agios will seek approval of ivosidenib in  cholangiocarcinoma by the end of the year. The drug is already approved for a subset of acute myeloid leukemia patients.

—Insys (NASDAQ: INSY) shares plunged below $1 after the opioid maker said its legal woes might drive it to file for bankruptcy. The firm settled with the DOJ on charges that it bribed doctors to prescribe its fentanyl product. Executives including founder John Kapoor were convicted this month of racketeering.

—Minerva Neurosciences (NASDAQ: NERV) reported positive Phase 2 results for its depression drug seltorexant, but skeptics shot holes in the company’s rationale. Investors sent shares on a rollercoaster ride the rest of the week. At Thursday’s close the stock sat at $6.28, about 9.5 percent below the mark before the data release.

—Myovant Sciences (NYSE: MYOV) reported positive Phase 3 results for its uterine fibroid drug relugolix. A second Phase 3 study is due to report in the third quarter. If successful, Myovant said it would file for FDA approval by the end of the year.

—A panel of FDA advisors recommended by an 8-3 vote that the agency reject quizartinib, an acute myleoid leukemia drug from Daiichi Sankyo. Daiichi fared better with pexidartinib, a treatment for a rare cancer. The same panel voted 12-3 in favor of approval. The FDA is due to decide by August.

CASH GRABS

ElevateBio unveiled $150 million in Series A funding to back its plans to invest in cell and gene therapy startups, and build a shared facility in Waltham, MA, that will manufacture their experimental treatments.

–Applied Therapeutics (NASDAQ: APTX) raised $40 million in a downsized IPO priced at $10 per share, well below the New York company’s $14 to $16 per share price target. Applied’s lead drug candidate AT-001 is being prepared for pivotal studies in diabetic cardiomyopathy, a fatal scarring of the heart.

—Microbiome drug developer Vendanta Biosciences raised $18.5 million in financing, an extension of a Series C round of funding that now totals $45.5 million.

—Phathom Pharmaceuticals of Menlo Park, CA, launched with $90 million in funding and US, Canadian, and European rights to the Takeda Pharamceutical (NYSE: TAK) drug vonoprazan. Takeda has commercialized the acid-blocking drug in several Asian markets.

—CinCor Pharma of Cincinnati launched with $50 million in Series A financing and a deal for the global rights to CIN-107, a Roche drug in early-stage testing for hypertension and primary aldosteronism, a hormonal disorder that leads to high blood pressure.

PEOPLE ON THE MOVE

—Two Novartis Institutes for Biomedical Research executives left for chief scientific officer posts at biotech startups… Bavarian Nordic’s Christopher Heery joined Precision BioSciences (NASDAQ: DTIL) as chief medical officer… and Robert Clarke, CEO of Pulmatrix (NASDAQ: PULM) for the past seven years, stepped down.

Alex Lash and Ben Fidler contributed to this report.

Photo by Flickr user Ajay Suresh via a Creative Commons license