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Raleigh-Durham Roundup: Quintiles, BDSI, BioCryst, & More

Xconomy Raleigh-Durham — 

Here are the headlines from the last week in North Carolina biotech news.

—Pharmaceutical services provider Quintiles (NYSE: Q) is teaming up with lab testing company Quest Diagnostics (NYSE: DGX) to provide clinical trial laboratory services around the world. Durham, NC-based Quintiles will own 60 percent of the joint venture while Quest will own the remaining 40 percent.

The companies say the new business entity, which combines Quest’s and Quintiles’ existing clinical trials lab operations, would have generated approximately $575 million in 2014 revenue. No other financial details were disclosed, though the companies say they expect to close the deal in the third quarter. Quintiles and Quest say that their joint venture will be the world’s second-largest provider of central laboratory services. It will be managed by a management team appointed from both companies.

The Quintiles-Quest deal follows another alliance between a lab testing giant and a contract research organization. Burlington, NC-based LabCorp (NYSE: LH) closed on its acquisition of Covance in February, in a deal that expands the combined company’s reach in providing clinical trial services.

—BioDelivery Sciences International’s (NASDAQ: BDSI) treatment for diabetic neuropathy failed in a Phase 3 clinical trial. BDSI’s clonidine topical gel did not produce a statistically significant reduction in pain in the study, which the Raleigh, NC, company said was surprising considering that an interim analysis had shown positive results. Andrew Finn, BDSI’s vice president of product development, attributes the outcome to patients added to the trial following the interim analysis. Finn now says that the study gives the company information to adjust how it selects patients and chooses sites for its clinical trials.

BDSI isn’t giving up on clonidine gel. CEO Mark Sirgo notes that the company encountered similar challenges for a buprenorphine patch for chronic pain, which it salvaged from a Phase 3 failure and licensed to Endo Pharmaceuticals (NASDAQ: ENDP) in 2012. At the time, Sirgo attributed the chronic pain treatment’s failure to an unexpected placebo response. But in partnership with Endo, BDSI reported positive clinical trial results in a new set of Phase 3 trials. The drug is now up for FDA approval. Sirgo now says that BDSI is “optimistic that we can achieve a similar outcome” with the clonidine gel.

—More government money is on the way to BioCryst Pharmaceuticals (NASDAQ: BCRX), which is continuing clinical testing of its experimental drug to fight the family of viruses, including Ebola, that cause hemorrhagic fever. The Biomedical Advanced Research and Development Authority awarded the Durham, NC, company a base contract of $12.1 million to support manufacturing of its antiviral, called BCX4430.

Depending on BioCryst’s progress, the government could award up to $22.9 million in additional funds. BioCryst started a Phase 1 clinical trial of BCX4430 last December, and expects to report results from that trial in the third quarter. The firm has been developing the antiviral under a $29.1 million contract from the National Institute of Allergy and Infectious Disease; so far it has collected $25.8 million of that cash.

—Argos Therapeutics (NASDAQ: ARGS) is also set to receive additional government funding. The National Institutes of Health’s division of AIDS approved $6.6 million for the Durham company’s Phase 2a study of an experimental HIV immunotherapy, AGS-004. Argos is trying to see if its treatment can prompt the immune system to eradicate HIV in the body.

The new study follows the failure of Argos’s HIV treatment in a mid-stage clinical trial whose main goal was lowering patients’ viral load. But when Argos released those results in January, it said they did show that the immune system response may have impacted the reservoir of HIV that remains dormant in the body. That is what led Argos to this new study, which will see if the Argos immunotherapy, in combination with other therapies, can eradicate the viral reservoir.

—-Salix Pharmaceuticals is now part of Valeant Pharmaceuticals (NYSE: VRX). Valeant closed its $11.3 billion acquisition of the Raleigh, NC-based gastrointestinal drugs company on April 1, just as it said it would when it countered an unsolicited competing bid from Endo Pharmaceuticals (NASDAQ: ENDP).

Valeant wasted no time starting the integration process. Shortly after closing the acquisition, the Canada-based pharmaceutical company notified North Carolina commerce officials that it would lay off 258 Salix employees in Raleigh, where the company once employed about 300 out of a workforce of 900, the Raleigh News & Observer reported.