July 11, 2023

The need-to-know this morning

Eisai said Tuesday that Ivan Cheung, chairman of the Japanese drugmaker's U.S. operations and global head of its Alzheimer's unit, was retiring. The surprise announcement comes just days after Eisai won full approval in the U.S. for the Alzheimer's drug Leqembi. Keisuke Naito, son of CEO Haruo Naito, is taking over the company's Alzheimer's duties. Eisai shares fell in Japanese trading.
Swiss-based ADC Therapeutics paused a mid-stage clinical trial of its blood cancer drug Zynlonta due to reports of serious respiratory-related side effects and patient deaths.
Novartis terminated a licensing agreement with Beigene for a TIGIT-targeted antibody in clinical development for lung cancer. Rights to the drug, called ociperlimab, were returned to Beigene.

IPOs

Biotech warms up to pragmatism

Back in 2020, biotech companies were going public with 10-figure valuations on the promise of potentially curative science projects that hadn't been tested on anything larger than a mouse, much less a human being. Three years and a few market resets later, pragmatism is winning out over disruption.

Take for instance Apogee Therapeutics, a company angling to raise $250 million in an IPO this month. The idea is not to reprogram a cell or permanently edit the genome but rather to just one-up established medicines by making their effects last longer. Apogee employs what it calls a half-life extension technology, which involves tinkering with a therapeutic antibody such that it lingers in the body longer (and, crucially, becomes a patentable new invention). The company's lead treatment binds to the same target as lebrikizumab, a late-stage Eli Lilly treatment for inflammatory disease, and the next one is comparable to Dupixent, Regeneron Pharmaceuticals' blockbuster autoimmune medicine.

Apogee's debut comes as the rate of successful biotech IPOs has slowed to a trickle, and the company's foundational goals harken back to the early 2010s, when risk-aversion prevailed and investors prized practicality over sweeping ambition.

Obesity

The EMA is investigating Ozempic

European drug regulators are investigating Novo Nordisk's blockbuster metabolic medicines following two reported cases of suicidal thoughts among patients.

The European Medicines Agency said yesterday it is looking into reports that two Icelandic patients on either Saxenda or Ozempic, two of Novo Nordisk's GLP-1-targeting medicines for weight loss and type 2 diabetes, experienced suicidal ideation. A third person taking Saxenda reported thoughts of self-harm.

GLP-1 treatments have been widely available for nearly two decades, and data from clinical trials and real-world use have not revealed increased risks of suicidal thoughts. But the sudden scrutiny calls to mind the yesteryear controversy over a class of medicines called CB1 antagonists, whose potential for psychiatric side effects derailed years of promising development.

M&A

Big buyouts bounced back

In the first half of this year, drug companies spent more money on acquisitions than in the entirety of 2021, a sign that biotech's protracted slump is finally leading to an increase in buyouts.

That's according to William Blair's recap of the second quarter, which notes that there's been about $82 billion worth of M&A in biopharma in 2023. That dwarfs 2021's $76 billion and nearly matches the $88 billion spent in all of last year. If the trend persists, 2023 is on pace to surpass the $123 billion worth of deals done in 2020.

Notably, pharmaceutical buyouts appear to be getting both bigger and further in between one another. There were just 28 recorded deals in the first half, compared to 55 in 2022, but a spike in the median acquisition price more than made up for lost ground.

Covid-19

Novavax is getting paid to not ship vaccines

Shares of Novavax, the embattled maker of vaccines for Covid-19, rose about 30% yesterday on news that Canada would pay the company $350 million to amend its supply agreement.

Under the agreement, Canada is forfeiting some vaccine doses already scheduled for delivery, reducing its total order, and changing the schedule for future deliveries, Novavax said in a filing with the SEC. The company will get its money in two installments: one right away and the second when Novavax provides booster shots later this year.

In general, it is not good news when a major customer wants less of your product than previously agreed. But for Novavax, which has warned that there are substantial doubts its business can survive the year to come, the influx of cash can only be positive.

More around STAT