Somebody always has to announce a monster acquisition, or gee-whiz biotech/pharma partnership, on the eve of the JP Morgan Healthcare Conference in San Francisco. Everyone wants to be the center of attention at the annual biotech investing and networking frenzy.
With a full business week to get ready, biotech executives and all their PR handlers were working overtime in the early days of 2014. It seemed like just about every biotech company last week was channeling its inner Bonnie Raitt, trying to “Give Them Something to Talk About.”
So what’s left to announce this week? Probably not much. It almost feels like the JP Morgan news cycle reached its peak, before the show even started. So sit back in your meetings, nibble on your favorite energy bar between meetings, enjoy the fellowship of colleagues, and read the highlights from the JP Morgan prep week, which is what people will be chirping and gossiping about for days.
Intercept Pharmaceuticals. For about five minutes last week, it looked San Diego-based Neurocrine Biosciences (NASDAQ: NBIX) might be the belle of the ball at JP Morgan, after it released positive clinical results for its drug against tardive dyskinesia, a movement disorder.
Who? This little 45-person company in New York has kept a pretty low profile the past couple years, even though it was one of the first biotechs to successfully take advantage of the IPO market rebound in October 2012. But Intercept burst into the big-time last week, and when I say ‘burst,’ I mean exploded. Intercept surprised everyone last week when it said its drug for a non-alcohol induced form of liver damage was a clear winner. The drug was so effective in a study of 283 patients sponsored by the National Institutes of Health, that an independent study monitoring board recommended the trial be stopped early. Intercept shares quadrupled to more than $275 a share on Thursday. The next day, after the market fully absorbed the news, the company merely gained another $170 a share, closing at $445.83. Intercept now has a market valuation of $8.6 billion.
If you see Jonathan Silverstein of Orbimed Advisors at the conference, get that man to buy you a drink. OrbiMed had a 17 percent ownership stake in the company at the time of its IPO, when it priced at just $15! Bloomberg News also helpfully noted that billionaire Steven A. Cohen’s investment firm—the guy who pleaded guilty to securities fraud last year—made another $370 million fortune, give or take a few million, on his holdings in Intercept. Yet another reminder that it’s good to be king.
Renal Denervation Failure. One of the hyped-up stories in medical devices of the past couple years has been about renal denervation. This is for the treatment of high blood pressure that resists conventional therapy with generic drugs. Medtronic paid a whopping $800 million for a Mountain View, CA-based startup called Ardian in November 2010 to get into this hot field.
The idea, for those unfamiliar, is to develop a catheter-guided device that uses radio-frequency to shut down overactive nerves around the kidneys. Preliminary data, published in the Lancet in 2010, looked remarkable. Imitators came out of the woodwork, and raised real money. Then, this past week, Medtronic (NYSE: MDT) said its new system failed in a pivotal clinical study, the most rigorous test to date. This is a high-profile flop that is sending shock waves through the device world. As Nimesh Shah, a VC at Domain Associates, said on Twitter: “Disappointing. Industry needs success stories to drive earlier exits. Lesson Big Device will take is don’t buy early.”
Which VCs won’t be here next year? One of the favorite parlor games in venture capital will continue for at least another year. Which of the well-known VC firms will be unable to raise a new fund, and enter the zombie zone? Which partners will win internal power struggles, and which ones will be voted off the island?
Pharma/VC musical chairs. What do some of the recent personnel moves say? A couple of … Next Page »
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