May 10, 2023

The need-to-know this morning

Syneos Health, a provider of contract research and consulting services, said it will be acquired by a consortium of private investment firms for $7.1 billion, or $43 per share. Investors in the acquisition group include Elliott Investment Management, Patient Square Capital, and Veritas Capital.
Swedish drugmaker Sobi said it will acquire CTI Biopharma, the Seattle-based maker of an approved drug for myelofibrosis, for $1.7 billion. The deal values CTI at $9.10 per share, or an 89% premium to its Tuesday closing price. The CTI treatment for myelofibrosis, called Vonjo, was approved last February. Sales last year were $54 million.
The Food and Drug Administration has raised concerns about the efficacy and safety of Sarepta Therapeutics' experimental gene therapy for Duchenne muscular dystrophy, according to briefing documents released this morning. The agency is convening a meeting of outside experts on Friday to review the data and vote on whether to recommend approval.

Financials

Can Amylyx surprise Wall Street again?

Back in March, Amylyx Pharmaceuticals surprised analysts with the news that about 1,300 patients were already taking its recently approved treatment for ALS, leading to $22 million in fourth-quarter revenue. And that number was "probably going to double, closer to triple" in the first three months of 2023, according to the company's chief financial officer.

Tomorrow, we'll find out whether that's true. Amylyx will report its first-quarter sales after the market close on Thursday, and Wall Street will be listening not only for the dollar figure but for just how close Amylyx gets to its goal of having 10,000 ALS patients in the U.S. on its medicine.

The company's confidence is already baked into expectations. The analyst consensus for first-quarter revenue is about $59 million, according to Mizuho, meaning if Amylyx did not in fact nearly triple its sales in 2023, the company's stock price is likely to suffer.

Intellectual property

Gilead prevails over HHS in patent suit

A federal court jury sided with Gilead Sciences in the company's dispute with the Department of Health and Human Services yesterday over the rights to a pair of groundbreaking and lucrative HIV prevention pills.

As STAT's Ed Silverman reports, the jury decided that Gilead did not infringe on patents held by the CDC in marketing Truvada and Descovy, two blockbuster medicines used for PrEP, or pre-exposure prophylaxis. The jury deemed those patents invalid, concurring with Gilead that while the government helped fund academic research into HIV prevention that later formed the basis for the pills, the concept of using those medicines for PrEP was well-known by the time CDC filed for its own patents.

HHS's case, filed in 2019, drew outsized attention as the first time the U.S. government had filed a patent infringement lawsuit against a pharmaceutical company, inflaming the debate over the extent to which taxpayer-funded research may be used by the drug industry to reap sizable profits.

Read more.

Covid-19

Novavax promises to do more with less

Novavax, the company whose potent Covid-19 vaccine all but missed the pandemic market, saw its share price rise as much as 50% yesterday after unveiling a plan that involves roughly halving its expenses while significantly increasing revenue.

The company said it will reduce its spending by as much as 50% by 2024 and cut its global workforce by 25%. At the same time, Novavax said it expects to book about $1.5 billion in revenue in 2023, representing only a 22% decline from last year despite cratering demand for Covid-19 vaccine doses. For context, Moderna, a company with a larger commercial footprint and track record of success, expects its 2023 revenue to fall by nearly 75%.

Despite the stock reaction, Novavax might struggle to meet its revenue targets. For one, the company has a history of scaling back its ambitions in the face of delays and disappointments. Then there's the math. The spending cuts "are critical steps in the right direction that unfortunately come at the exact time Novavax is preparing to compete against two entrenched commercial franchises in the Covid-19 vaccine space," TD Cowen analyst Brendan Smith wrote in a note to clients. "... The company is in the position of scaling back at a record pace right when their competitive edge requires the biggest boost."

Regulatory

Sarepta elicits some gene therapy solidarity

Friday's FDA hearing on a Sarepta Therapeutics gene therapy has such importance for biotech that even the company's competitors are pulling for it.

Writing in STAT, the CEO and former chief medical officer of Ultragenyx argue that denying accelerated approval to Sarepta's one-time treatment for Duchenne muscular dystrophy would both deprive patients with that disorder and slow the progress of gene therapies for other rare diseases. There's a misperception that relying on biomarkers for such approvals lowers the scientific bar, they write, but "the truth is that the science behind many of these rare diseases and their treatments is far more compelling and predictive than many larger population diseases — but the evaluation process for rare diseases does not adequately take that into account."

The Ultragenyx op-ed arrives as biotech looks to an apparently divided FDA for clues on the future of gene therapy. Sarepta's medicine, SRP-9001, appeared headed for approval until March 16, when the FDA told the company it would hold Friday's hearing despite previous assurances it would not. STAT subsequently reported that agency reviewers were preparing to recommend rejecting the drug before a top official intervened and scheduled a public evaluation.

Read more.

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