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Biotech Roundup: Hellos, Goodbyes, “Cures” Delays And Trial News

Xconomy National — 

The week started on a reflective note. Our San Diego editor Bruce Bigelow penned a personal goodbye to entrepreneur Larry Bock, who died last week of pancreatic cancer at the age of 56.

And then the news flowed, from a fast reprieve for Juno Therapeutics to no mercy for Elizabeth Holmes. There were other goodbyes: Peter DiLaura said so long to Second Genome, the microbiome company he led for six years. And hellos: Third Rock Ventures brought in a well-traveled biotech veteran, Steven Holtzman, to run its hearing-loss startup Decibel Therapeutics.

And perhaps most important, there was the U.S. Senate’s kiss-off of the “Cures” vote—the package of bills that was approved in the House of Representatives last year. The Senate might come back to it after summer break. Or not. The package includes money for the fight against the Zika virus, the precision medicine initiative, Joe Biden’s cancer moonshot program, and a lot of other stuff. So, yeah—worth watching.

The only biomedical bill the Senate passed was to fight opioid abuse; the White House wasn’t thrilled but said the president would sign it because “some action is better than none.” That’s the very definition of a backhanded compliment, or, as Phil Collins once said, “hello, I must be going.”

Shalom, aloha, ahoj, and ciao, baby. Let’s get to the roundup.

—Juno Therapeutics (NASDAQ: JUNO) was on hold…and then it wasn’t. After last week’s revelation of three patient deaths in its leading cancer immunotherapy trial, the FDA suspended the study. But five days later, the green light came back on. Then Juno paid $10 million to buy Boston startup RedoxTherapies, getting rights to an experimental immuno-oncology drug it may use in tandem with its own treatments.

—The federal group that runs Medicare and Medicaid banned Theranos CEO Elizabeth Holmes from running a lab for two years, throwing into question the viability of the company. All eyes are on Holmes, who is scheduled to present data from the company’s technology at a medical conference on August 1. It would be the first time Theranos has shared data with the world.

—Cambridge, MA-based Sage Therapeutics (NASDAQ: SAGE) unveiled positive Phase 2 data for postpartum depression from a 21-woman trial. While small, the trial could have an impact not only on women who suffer from the condition but also on the direction of Sage itself. CEO Jeff Jonas told Xconomy previously that positive results could encourage Sage to dive deeper into studying mood disorders—from panic attacks to post-traumatic stress disorder.

—Enough good trial news. Time for the bear report: Los Angeles-based CytRx (NASDAQ: CYTR) reported negative data in a Phase 3 trial for its cancer treatment aldoxorubicin…and Xconomy’s David Holley got an interview with XBiotech (NASDAQ: XBIT) CEO John Simard, who aggressively defended the much-criticized Phase 3 colorectal cancer data the firm released July 2 at the European Society of Medical Oncology. A UCSF cancer expert called XBiotech’s data release “bogus.”

—Company funding news: Tesaro (NASDAQ: TSRO) of Waltham, MA, said it took advantage of positive Phase 3 data to raise $409 million in a secondary stock sale…Protagonist Therapeutics, based in Milpitas, CA, has filed for a $75 million initial public offering. The company began a Phase 1 trial last year for an irritable bowel disease treatment…Gene therapy developer Audentes Therapeutics said it would try for a $75 million IPO…Scarsdale, NY-based Sapience Therapeutics raised a $22.5 million Series A to develop a drug, licensed from Columbia University, for the brain cancer glioblastoma…Lyndra, a Cambridge startup working on oral drug delivery technology, has received $5.4 million in funding, according to a regulatory filing. Polaris Partners venture partner Amy Schulman is Lyndra’s CEO…San Francisco-based tissue analyzer 3Scan raised a $14 million Series B round from Lux Capital and Data Collective…and Magnolia Medical Technologies of Seattle, maker of a diagnostic tool for sepsis, rounded up nearly $14 million.

—Big Merck shuffle: The drug giant will open new labs later this year in Cambridge focused on microbiome research, and another site in South San Francisco focused on cardiometabolic disease and oncology discovery. Layoffs will hit two New Jersey sites and one in Pennsylvania, resulting in a loss of less than 10 percent of its “discovery, preclinical and early development” staff, a spokeswoman said via e-mail.

—In other Merck news, U.K.-based MRC Technology sold a portion of its royalty stake in Merck’s cancer immunotherapy drug pembrolizumab (Keytruda) to DRI Capital for $150 million.

—With $1.25 million in funding from five drug companies, the Massachusetts Life Sciences Center and Massachusetts General Hospital are launching an Alzheimer’s drug R&D center in Boston. Called the Massachusetts Center for Alzheimer Therapeutics Science (MassCATS)—not to be confused with this group—AbbVie, Biogen, Janssen Pharmaceuticals, Merck, and Sunovion Pharmaceuticals are the backers. Bradley Hyman, a professor of neurology at Harvard Medical School, will be the director.

—The FDA told Switzerland’s Santhera Pharmaceuticals to run a second Phase 3 trial for its experimental Duchenne muscular dystrophy drug before filing for approval. Shares of Sarepta Therapeutics (NASDAQ: SRPT) slid on the news, which analysts speculated dimmed the approval chances of Sarepta’s Duchenne drug eteplirsen. Sarepta’s drug is currently under an FDA review.

—South San Francisco-based Second Genome hired a new CEO and president. Glenn Nedwin is the former CEO of Taxon Biosciences, a microbiome company that was acquired by Dupont last year. He is replacing Peter DiLaura, the company’s CEO since 2010. Second Genome also said it has added $8 million more to its Series B round.

—San Antonio, TX-based StemBioSys inked its second distribution deal in as many months, announcing plans to bring its stem cell production products to South Korea. Korean life science equipment distributor SeouLin Bioscience Co. will begin selling StemBioSys products in the country, with products going on the market in the next few weeks, says CEO Bob Hutchins.

—Eleven Biotherapeutics (NASDAQ: EBIO), based in Cambridge, could be in line for $22.5 million from partner Roche after an experimental eye treatment hit an early milestone on the path toward clinical trials.

—Evelo Biosciences, also of Cambridge, absorbed its sister company Epiva Therapeutics and will pursue bacteria-based treatments of both cancer and immune-related disease. Trials in each field should begin next year, Evelo CEO Simba Gill told Xconomy.

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