#JPM20: ‘The NPV is always wrong.’ Takeda preps another spinout this time on psych – Endpoints News

Posted: January 15, 2020 at 1:46 pm

Editors Note: Endpoints News is reporting live from #JPM20 after kicking things off with an action-packed event, which you can replay here. What follows is a stream of tidbits we have collected while wandering around Union Square in San Francisco. Check back in throughout the week for updates by John Carroll and Jason Mast.

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SAN FRANCISCO A year ago Takeda CEO Christophe Weber and R&D chief Andy Plump arrived at JP Morgan right on the heels of closing their big Shire buyout. Now theyre back after shaking up the portfolio, boosting R&D spending by about 50% to $4.5 billion and adjusting the pipeline a task which isnt quite finished yet.

In an interview on Tuesday, Plump told me that Takeda is preparing the latest in a long string of spinouts after setting aside a package of psych drugs that would be better suited to the hands of some specialists. Like a lot of the major R&D outfits, its not one of their core fields of expertise.

These Takeda drugs including therapies for depression and schizophrenia are very interesting but still difficult, involving 3 clinical-stage programs and a handful of preclinical efforts, which Plump is quick to concede offer plenty of challenges to developers.

Spinouts are something that Takeda is good at. Theyve been doing these deals for several years now in the US, Europe and Asia creating up to 25 companies where they typically hand off drugs to entrepreneurs and retain a chunk of equity of around 25% to 30% of the biotech involved.

Their decisions on what to keep and what to deal out, adds Plump and Weber, have nothing to do with projected revenue.

The key aspect is innovation, says Weber. Are they innovative therapies? And its not because you shouldnt do it on projected revenue so much as you cant do it that way.

You cant do it on NPV, adds Plump, because then NPV becomes the driver of the decision and the NPV is always wrong.

The two Takeda execs spent considerable time and effort in revamping Takeda into a global, top 15 player with scale.

We were lacking scale to sustain our R&D investment, says the CEO. The Shire buyout gave us scale that allows us to compete with anyone. John Carroll

#JPM20: Catalent CEO John Chiminski isnt going anywhere important without his lucky boots

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In my one-on-one with Catalent CEO John Chiminski I was drawn to the cowboy boots he was wearing not exactly the kind of standard Brooks Brothers attire you often see at JP Morgan and asked him how many miles he had put on the boots as he traveled the world managing a global CDMO.

Heres part of the response, and its priceless:

In advance of the IPOour owners, Blackstone, went to the investment bankers and they said, Hey, before Chiminski goes out on the road show, hes got to shave his beard and he cant wear the boots. So I told the investors and I would just say, I used a couple of hand gestures and I said, look, you might as well shave my head, because Ill have about that much confidence. And I will tell you right now, if I didnt show up with my boots, which is a little harder nowadays cause Ive got arthritic hips, if I didnt show up with my boots, Id had some investors that are selling. So these boots have about a million miles and 165 million shares of Catalent were sold with these babies

Boots arent going anywhere guys. John Carroll

#JPM20: Considered New Pfizer yet? The CEO says hes whipping it into shape and getting more focused in R&D

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SAN FRANCISCO Albert Bourla isnt a fan of the Old Pfizer. Or of the analysts who are ignoring the New Pfizer.

Bourla, giving his second JP Morgan presentation as Pfizer CEO after over 25 years at the US drug-making giant, continued the rebrand he had been tapped to lead: Positioning Pfizer as a company that had been bloated for years but was now set for a streamlined future.

Phase II success rates the industry is at 30%. Pfizer for many years was at 15%, Bourla told JP Morgan analyst Christopher Scott on stage. We were taking an approach of very little rigor.

Bourla said Pfizer would further pare down on non-R&D expenses, continuing a trend they began by spinning off their Upjohn division and combining their consumer health business into a joint venture with GlaxoSmithKline. The GSK venture will move to an IPO within 3 or 4 years, he said, echoing previous comments from the British pharma.

Within research, Bourla said, they would focus on 6 areas, rather than the 12 they had long developed. Asked which parts of the pipeline were exciting but overlooked, Bourla dove for a minute through the R&D assets he thought Wall Street had ignored, including their vaccines, gene therapies, and inflammation drugs.

We do have five different JAKS that we are starting in more than 10 different indications, and only one of them I have seen minor projections for, he said. I can go on and on.

Bourla said they would focus on licensing small add-ons to the pipeline in those 6 areas and wouldnt move toward a larger merger or acquisition. It was a discouraging comment for a JP Morgan crowd watching for the next major deal, but also one Pfizer has made in the past months before acquiring Array in an $11.4 billion deal.

We never say never, Bourla said. Jason Mast

#JPM20: Consummate dealmaker Vivek Ramaswamy bags a record regional upfront in latest deal this time focused on Japan

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SAN FRANCISCO At the start of my panel on dealmaking on Monday I joked that consummate negotiator Vivek Ramaswamy was probably making a deal as we spoke, texting terms on the mobile.

Today he tells me I wasnt far off the mark. A deal was cooking right off stage.

On Day Three of JP Morgan Ramaswamy has completed what his team is calling the largest ever regional licensing deal for a derm product prior to Phase III data and one of the largest upfront payments ever for a Japanese licensing deal prior to Phase III data across any indication.

And this one was signed late Tuesday night after they put the finishing touches to the contract.

I almost laughed when you said that, Ramaswamy tells me about the panel comment. If I had not put my phone on flight mode that would have been true.

His dermatology play Dermavant has licensed out exclusive rights to develop, register and market tapinarof in Japan to Japan Tobacco, which is passing on the license to its subsidiary, Torii Pharmaceutical. The Japanese company is paying $60 million and up to $53 million in development milestones for tapinarof, in development for psoriasis and atopic dermatitis.

Dermavant CEO Todd Zavodnick is clearly stoked about the numbers for his drug, and the shot of working on this with JTs company.

Its not just a licensing deal, he says, its the right partner.

Ramaswamy bought the drug from GSK for up to $324 million. The pharma giant had been revamping its pipeline as R&D chief Hal Barron took aim at a comeback. The nonsteroidal anti-inflammatory topical cream which activates the aryl hydrocarbon receptor hasnt been a high-profile agent. But researchers have highlighted promising mid-stage data to underscore its potential. Now its in Phase III for psoriasis, with plans to tee up atopic dermatitis.

Not surprisingly, any mention of AD immediately spark comparisons to the marketing juggernaut Regeneron and Sanofi have created for Dupixent. But Dermavants drug is a topical, and Zavodnick says that in AD, patients typically get an injectable and a topical. So he believes that patients will start with the topical and then move to the combination, leaving plenty of room for his drug in the market.

Ramaswamy also notes that its rare to see two significant dermatology deals at one JP Morgan. Eli Lilly got the party started with their $1.1 billion Dermira buyout, which gave them lebrikizumab. Dermavants deal makes for a nice book end to that package of news.

Says Ramaswamy: Dermatology is back. John Carroll

#JPM20 Two biotech legends talk about gene therapys past and future

SAN FRANCISCO I had a chance on Tuesday to moderate a discussion on gene therapy R&D at the huge WuXi conference at the Hilton with Fraziers Tachi Yamada ex-CSO at GSK and Takeda and James Wilson from Penn, two big figures in the field who started a new biotech a little under a year ago to focus on monogenic diseases of the CNS. I did a bow to both of them for everything theyve pioneered in the last 2 decades, which spurred Yamada to give Wilson credit for the science work. As for Wilson, he got the biggest response from the audience with a remark that Tachi is always just called by his first name, making him the Beyonce of biotech. John Carroll

#JPM20: Biogen CEO Michel Vounatsos offers a smile of confidence as he presents aducanamab

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SAN FRANCISCO Biogen isnt softening its rhetoric.

Two months after research chief Al Sandrock all-but dared the FDA not to approve its Alzheimers drug, CEO Michel Vounatsos told an overflowing ballroom at JP Morgan that the success of a drug that operates like aducanumab is a dream.

Some of you were at CTAD and saw the data, Vountsos said, referring to the controversial subgroup analysis they presented their aducanumab trial at the Clinical Trials for Alzheimers Disease conference. Who in the room doesnt know someone who has been demented?

That analysis, coming months after the company first announced the drug had failed, relied on believing how late changes called protocol amendments to one of two identical trials made one succeed and the other fail.

Without all the protocol amendments, I would not be here, today, standing with a smile of confidence on the way forward, Vounatsos said, not quite smiling.

Still, Biogen has heard the criticism from investors, most notably Bairds Brian Skorney, that their big ambitions have left them with few assets in their pipeline likely to raise revenue soon. Vounatsos walked through the other parts of their pipeline, including a lupus drug, an ALS drug, a new MS drug and, of course, another new Alzheimers drug with a different approach: Tau. Jason Mast

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#JPM20: Gilead launches new T cell engineering player with help from familiar players at Vida and Westlake

SAN FRANCISCO After making its mark in cancer cell therapies with the Kite buyout, Gilead has allied itself with a pair of venture investors to hunt for new therapies that can address the flip side of that therapeutic coin. And theyre chipping into the launch round while adding more cash and milestones for a research collaboration to get things underway.

The new biotech theyre showing off around JP Morgan this week is Kyverna Therapeutics, which is being gifted with some cutting-edge T cell engineering tech as well as a $25 million Series A to fund work on the discovery of new drugs for autoimmune disease braking the immune system instead of organizing an attack. Gilead signed off on a collaboration that starts with a $17.5 million upfront and a full slate of research and commercial milestones that can go up to $570 million.

The startup brings together some high-profile figures and technology.

Dominic Borie, a Genentech vet and the former head of external research for Horizon Therapeutics, is heading the new venture as CEO. While at Stanford, Borie was credited with playing a part in validating JAK inhibition for rheumatoid arthritis a breakthrough tech that a bevy of drug developers would like to leapfrog with new and better drugs. Jeffrey Greve, formerly at Delinia ahead of their Celgene buyout, is CSO.

Theyre being backed by Fred Cohen at Vida Ventures and Beth Seidenberg, who founded Westlake Village BioPartners in LA after jumping from Kleiner Perkins, where she specialized in biotech for years. Cohen kickstarted Vida along with a group of experienced venture players, with a big role for Arie Belldegrun, who sold Kite to Gilead and retains some A list contacts at the big biotech.

The upstart will be using synNotch technology from Kite, which picked it up in Gileads acquisition of Wendell Lims Cell Design Labs a couple of years ago, which Belldegrun had backed as well, sitting on the board with Seidenberg.

These are the relationships that breed trust and companies. John Carroll

#JPM20: BioMarin chief Bienaime is building a gene therapy pipeline, and the manufacturing needed to control markets

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SAN FRANCISCO JJ Bienaimand his team arent just running as fast as possible to stay in the lead in the race to the first marketing OK for a gene therapy for hemophilia A. Theyre building a pipeline, and the manufacturing capacity needed to dominate their markets.

In a chat just ahead of the firing gun at JP Morgan, the BioMarin CEO told me that the biotech had obtained official sanctions in the US and UK to launch a Phase I/II study of BMN 307 this quarter for phenylketonuria (PKU). Now they will set out to see if a single dose of their gene therapy can restore natural Phe metabolism, normalize plasma Phe levels and enable a normal diet in patients with PKU.

Next up in the gene therapy portfolio, he tells me, is HAE.

Whats more, he adds, BioMarin has completed work at a facility in Novato that doubles their gene therapy capacity jumping from 5,000 to 10,000 patients a year. That could handle the hemophilia A market and the rest of the markets to come for some time. It also gets them around the bottleneck of gene therapy production that has been holding back some of the new players in the field.

Its not our intent to turn into a pure gene therapy company, but it will play an important role in BioMarin, says Bienaim.

For now, the story around gene therapy at BioMarin is centered on a simple theme: BioMarin has the first shot at an upcoming approval in hemophilia A, but a waning level of response leaves a few analysts wondering whether Sangamo, in particular, can catch up with a better therapy. The reasoning is built around the assumption that patients would prefer to wait for a better gene therapy, as they can only be dosed with an AAV product once.

Bienaim, though, doesnt believe thats true. He points to new work on next-gen gene therapies skirting AAV that can be repeatedly dosed, and that opens the door to a re-up down the road if their product stops working. Patients will take a prospective cure, he says, with a 4-year update coming up that he believes will show a continued protection against bleeds.

One other point: The CEO believes that given the high cost of treating hemophilia patients now, payers will accept a drug that costs $2 million to $3 million. (Not that that is the price they expect to charge. That decision comes later.)

But will they want some assurances that it will work long enough to make it less expensive in the long run? John Carroll

#JPM20: Vertex lays out post-CF ambitions as Gilead demurs on acquisition

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SAN FRANCISCO Vertex laid out a vision for a post-CF and a post-Jeffrey Leiden future at their investor presentation Monday morning. It looks a lot like the past.

That future, the outgoing CEO Leiden said, will center on other fields like cystic fibrosis: Specific niches where few life-altering drugs exist, including sickle cell and a rare lung disease. Those are also fields where Vertex could stand to charge the high prices theyre becoming known for.

You will never see a me-too drug from us, Leiden said, a day after Alexis Borisy sparked widespread buzz with a new biotech aimed at lowering drug prices through me-too drugs. We think transformative medicines are of the highest value for patients.

This year was all but destined to mark a new chapter for Vertex. Nearly 20 years after starting their CF program, the company introduced their capstone last year in Trikafta, a drug that covers 90% of patients. Leiden celebrated the news by leaving the CEO spot to become executive chairman.

Leiden may or may not have been referring to Borisys startups with his comments, but the reference is fitting. Vertexs drugs have made cystic fibrosis a livable disease, but it comes at a price tag over $300,000 for Trikafta payers like the NHS have balked at.

With the Vertex changes and Gilead sitting on both a wealth of cash and a shaky pipeline, rumors swirled the big California biotech could pursue a massive buyout. But early Monday morning, Gilead CEO Daniel ODay threw cold water on that, telling investors that the company was looking to expand but any changes would be bolt-on acquisitions.

In what was billed as a fireside chat, incoming Vertex CEO Reshma Kewalramani detailed the pipeline she would lead. Those assets include marketing an expanded indication for Trikafta (its not yet approved for children under 12), a drug for alpha-1 antitrypsin deficiency a lung disorder similar to cystic fibrosis their gene therapy program for sickle cell and beta thalassamia, and the potential cell therapy cure for diabetes they acquired with the $950 million Semma buyout.

The water-cooler has also buzzed with talk that Vertex could acquire CRISPR Therapeutics, their partner on the gene therapy program.

Kewalramani didnt address that. Instead, she offered a target for Vertexs most recent acquisition: bringing the cell therapy into the clinic.

Weve set an ambitious goal for ourselves with Semma, Kewalramani said. Jason Mast

#JPM20: 'The NPV is always wrong.' Takeda preps another spinout this time on psych - Endpoints News

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