Galapagos' quest to turn things around

MIKE REDDY FOR STAT

Galapagos NV, the Belgian biotech company, has the worst enterprise value in biotech. The number is close to negative $2 billion, meaning that its liquid assets, mostly cash, are worth more than the company itself and that, according to the market, every dollar Galapagos puts toward inventing new drugs would be better spent doing pretty much anything else.

That fact, driven by a series of late-stage failures, has made it a source of befuddlement, fascination, and, to some investors, hope for a massive return. That last part is due entirely to Paul Stoffels, a 61-year-old biotech eminence in his native Belgium. Last year, he became CEO of Galapagos after a lengthy career at Johnson & Johnson in which he cemented a reputation as one of the industry's premier drug hunters. Now the company's future, in the eyes of investors, will depend on just how Stoffels Galapagos' ample cash.

"There is no magic formula to create value in one bang," Stoffels said in an interview. "You have to get the trust back. You have to have a product portfolio. You have to show progress, and you have to show results. And while I'm very impatient to grow that value, you have to do it on solid grounds."

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Closer Look

NASH history will be made

Intercept Pharmaceuticals' decade-long campaign to win a pioneering FDA approval for NASH, a prevalent liver disease, will come to a head tomorrow at an agency meeting with implications for a host of biotech companies.

A panel of FDA advisers will convene to discuss the risks and benefits of obeticholic acid, or OCA, a treatment shown to modestly reduce NASH's characteristic liver scarring but with potentially disqualifying side effects. In briefing documents released ahead of the meeting, FDA staff took a dim view of Intercept's drug, sending the company's share price down as much as 25% yesterday.

While the panel's vote has the most immediate impact on OCA, it will be closely watched by Intercept's many competitors looking for insight on just what's required to win approval in NASH. Madrigal Pharmaceuticals expects to file its rival treatment later this quarter, while Viking Therapeutics, Gilead Sciences, Akero Therapeutics, and others are also developing NASH drugs.

FTC

PBMs might be next

A day after suing to block a pharmaceutical merger and roiling an entire industry in the process, the FTC is expanding its inquiry into the middlemen drug companies detest.

The agency is investigating two so-called group purchasing organizations, which negotiate drug rebates on behalf of the pharmacy benefits managers who dictate which medicines appear on formularies. The FTC's action builds on its 2022 probe into the six largest PBMs, including CVS Caremark, Express Scripts, and OptumRx. The goal is "shedding light on several PBM practices," the agency said in a statement, including "negotiating rebates and fees with drug manufacturers that may skew the formulary incentives and impact the costs of prescription drugs to payers and patients."

The FTC's widening investigation of PBMs follows years of drug makers pointing to them as poorly regulated actors in the pharmaceutical supply chain and accusing them of opaque business practices that result in higher out-of-pocket costs for patients.

Regulatory

How an obscure Supreme Court case could hamper the FDA

The FDA could take significantly longer to write regulations and make decisions if the Supreme Court rules against a longstanding legal doctrine governing federal agencies.

As STAT's John Wilkerson reports, the debate is over the Chevron doctrine, which directs judges to defer to reasonable federal agency interpretations of ambiguous or technically challenging aspects of the law. The Supreme Court has agreed to hear a lawsuit regarding the Commerce Department's regulation over fishing, but if the high court strikes the doctrine, it will affect all federal agencies.

That would potentially expose the FDA to lawsuits over in-the-weeds regulations, which would likely lead the agency to devote extra resources to the meticulous crafting of its policy — and that "could really slow things down at FDA," said Will Schultz, a former general counsel at the Health and Human Services Department .

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