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Bio Roundup: Lung Cancer Showdown, Gene Therapy Deals, IPO Busts

Xconomy National — 

This weekend, cancer immunotherapy will once again take biopharma’s center stage. At one of the year’s big cancer meetings, investors, researchers, and many others will have a close eye on a group of presentations touting new lung cancer regimens that combine immunotherapies with other treatments. The presentations could shift the dynamics of the fast-moving landscape, where up until recently, chemotherapy was the only option for most patients.

Elsewhere this week, Novartis bet heavily on gene therapy while GlaxoSmithKline asked out, the Theranos saga rolled on, and a few biotechs to go public since 2015 crashed and burned. Let’s round it all up.

CANCER HEADLINES

—This year’s American Association for Cancer Research meeting, which kicks off this weekend in Chicago, features three Phase 3 studies from Bristol-Myers Squibb (NYSE: BMY), Merck (NYSE: MRK), and Roche (SWX: RO), that could encourage immunotherapy as a mainstay for people newly diagnosed with advanced lung cancer. Xconomy asked several lung cancer specialists for their thoughts on each and on frenetic pace of change in their field. We will follow up next week with a story that explains the study results.

—Meanwhile, ahead of the meeting, Merck disclosed the results of another study, Keynote-042, that could have its own ripple effects on the lung cancer field. Merck’s immunotherapy pembrolizumab (Keytruda) not only beat chemotherapy head to head in a lung cancer study, but it was effective in patients with various different levels of the protein PD-L1 expressed by their tumors. Pembrolizumab is already approved as a monotherapy for lung cancer, but only for people with particularly high PD-L1 levels.

—Merck did suffer a recent setback, however. Pembrolizumab, when combined with Incyte’s (NASDAQ: INCY) epacadostat in melanoma patients, failed to best pembrolizumab alone. The news was a stinging failure for an emerging class of cancer treatments called IDO inhibitors, and Incyte shares fell 22 percent.

—Roche also had immunotherapy problems. The Swiss firm said it halted a Phase 2 colorectal cancer study of atezolizumab (Tecentriq) combined with cobimetinib (Cotellic) from Exelixis (NASDAQ: EXEL) because of an “imbalance” of fourth deaths in the treatment arm, according to FiercePharma.

—Loxo Oncology (NASDAQ: LOXO) unveiled two diagnostics deals this week. It is partnering with sequencing giant Illumina (NASDAQ: ILMN) to develop a companion test for two of Loxo’s drugs that aim to treat cancers based on their genetic defects, not on their location in the body. Loxo’s larotrectinib, the more advanced of the two treatments, could be approved next year. Loxo also said it would work with Veracyte (NASDAQ: ILMN) and its Afirma thyroid test.

GENE THERAPY DEALS

—In a major bet on the commercial potential of a gene therapy for spinal muscular atrophy, Novartis agreed to pay $8.7 billion—a roughly 88 percent premium—for Chicago-based AveXis (NASDAQ: AVXS) and its experimental AVXS-101. The AveXis therapy is currently in late-stage testing and could come to market next year and begin a commercial battle with Biogen’s (NASDAQ: BIIB) SMA drug nusinersen (Spinraza).

—GlaxoSmithKline (NYSE: GSK), meanwhile, exited the gene therapy field. The British pharma giant handed its gene therapy assets—which include Strimvelis, approved in Europe to treat a rare immune disease—to the U.K.’s Orchard Therapeutics in return for an equity stake. Strimvelis, one of the few approved gene therapies, has struggled commercially so far.

DATA DUMPS & IPO BUSTS

—Azeliragon, an Alzheimer’s drug from vTv Therapeutics (NASDAQ: VTVT), fared no better than a placebo in Phase 3 studies, joining a long list of efforts to treat the disease that ended with a late-stage failure. Shares of vTV, which went public at $15 per share in 2015, fell 78 percent.

—Less than three months after Menlo Therapeutics (NASDAQ: MNLO) raised $119 million in an IPO to fund development of its atopic dermatitis drug, the Redwood City, CA, company announced the treatment, serlopitant, failed a Phase 2 study.  Shares plunged 72 percent.

—Adynxx’s pain drug brivoligide flunked a Phase 2 study in knee replacement surgery patients. But the San Francisco biotech—which was once almost bought by Cubistwill bring brivoligide to a Phase 3 trial anyway, pointing to a strong response in a subset of patients.

—Former Axovant Sciences CEO (NASDAQ: AXON) David Hung, whose tenure saw a Phase 3 failure in Alzheimer’s disease, is scrubbing that experience from his professional work history. STAT reported that Hung’s LinkedIn profile omits his role at Axovant, and he can’t discuss the company due to a non-disparagement agreement.

CASH CALLS

—Alexion Pharmaceuticals (NASDAQ: ALXN) bought privately held Swiss biotech Wilson Therapeutics for $885 million, grabbing an experimental drug for Wilson disease, a rare genetic disorder. Wilson’s disease has been part of the national drug pricing debate for a few years now: Valeant Pharmaceuticals jacked up the price of generic drug for the disease, Spyrine, in 2015 to $21,267 and Teva Pharmaceutical followed this year with a copycat version only slightly cheaper.

—Citing unnamed sources, the Financial Times reported that Celgene (NASDAQ: CELG) is weighing deals to buy two of its cancer drug partners, Agios Pharmaceuticals (NASDAQ: AGIO) and Jounce Therapeutics (NASDAQ: JNCE).

—Unity Biotechnology, which is developing drugs to treat diseases of aging, filed for an IPO to bring two of its compounds into clinical testing.

—One month after settling federal fraud charges, Theranos laid off most of its employees in an effort to avert bankruptcy, the Wall Street Journal reported this week. CEO Elizabeth Holmes also sent investors a letter asking for emergency funding, according to BuzzFeed News. The company is trying to develop a test for Zika virus infection, but delays could trigger a default on its loan from a hedge fund.

—Cambridge, MA-based Constellation Pharmaceuticals continued its strategic retrenching by raising a new $100 million round from a variety of crossover investors. Constellation eyed an IPO under previous management, but hasn’t attempted to go public yet.

—CAR-T developer Cellectis (NASDAQ: CLLS) raised more than $163 million in a stock sale one week after a new company, led by CAR-T veterans from Kite Pharma, said it would take over U.S. development of Cellectis’s lead product, a CAR-T cell therapy for leukemia.

—Magenta Therapeutics raised a $52 million C round, led by Casdin Capital, to push ahead with a suite of products to improve bone marrow transplants. The Cambridge, MA-based firm has now raised at least $150 million.

—AstraZeneca (NYSE: AZN) paid Ionis Pharmaceuticals (NASDAQ: IONS) $30 million up front for the rights to an experimental RNA-based drug for nonalcoholic steatohepatitis (NASH), a fatty liver disease.

AND LASTLY…

—Four congressional committees held hearings this week offering different approaches to combat the growing opioid epidemic. The Senate Health, Education, Labor, and Pensions committee aims to bring a bipartisan measure to the Senate floor by the end of the month, according to USA Today. Similar legislation could be voted on in the House by Memorial Day.

Alex Lash and Frank Vinluan contributed to this report.