Welcome to the latest edition of our weekly EuroBiotech Report. A court convicted NeuroSearch (CPH:NEUR) of stock price manipulation and imposed a fine of DKK 5 million ($0.9 million) on the Danish biotech. The decision comes more than four years after NeuroSearch published the clinical trial results--and subsequent reappraisal--that caused its stock to surge and slump. VBL Therapeutics is a player in another unusual biotech story. Having seemingly gone public two weeks ago, the failure of a key investor to pay up means the Israeli biotech is now a private company once again. And with the $65 million VBL thought it had raised going back to investors, the company needs cash to advance its Phase III plans. Prosensa ($RNA) topped up its account in a new arrangement with nonprofit CureDuchenne. Some of the €5 million will support an FDA filing for drisapersen, which Prosensa plans to follow up with a submission in Europe. Having spent the start of 2014 planning and executing a capital raise to pay off debt, Skyepharma (LON:SKP) is now using its newfound financial flexibility to push ahead with new projects. The first is a chronic obstructive pulmonary disease (COPD) drug Skyepharma has just acquired from Pulmagen Therapeutics. Genmab (CPH:GEN) discussed plans to use its cash reserves to up its involvement in R&D alliances, with immune checkpoint projects among those being considered. And more. Nick Taylor (email | Twitter)
1. Danish court convicts NeuroSearch of stock price manipulation
2. Prosensa gunning for back-to-back FDA, EMA filings after raising €5M
3. VBL Therapeutics misses out on fresh funds after $65M IPO unravels
4. Genmab mulls using newfound wealth to up stake in R&D alliances
5. Skyepharma adds clinical-stage COPD drug in Pulmagen deal
And more >>
Danish court convicts NeuroSearch of stock price manipulation
More than four years after NeuroSearch (CPH:NEUR) published a press release that sent its stock up more than 165% in a single day, a Danish court has convicted the company of share price manipulation. But the long-running saga still has legs, with the company's then-CEO deciding to appeal his conviction.
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| Flemming Pedersen--Courtesy of ALK-Abelló |
The court made two rulings, one related to the company and another to its then-CEO Flemming Pedersen. In a statement, NeuroSearch Chairman Karin Garre said he was "very surprised and deeply disappointed" by the court's decision. NeuroSearch must now decide whether to appeal the ruling or accept the decision and pay the DKK 5 million ($0.9 million) fine. The company has two weeks to make a decision.
Pedersen, who is now chief financial officer at ALK-Abelló (CPH:ALK-B), has already made his decision, telling Jyllands-Posten he will appeal the ruling. The executive said that while it would be easier to pay the fine and move on--and the ruling cleared him of manipulating the stock price for personal gain--he views the ruling as unfair. One of the issues is the extent to which a CEO should be responsible for decisions that involve the input of multiple people.
The decision in question dates back to February 2010 when NeuroSearch published top-line data from a Phase III trial of its Huntington's disease candidate Huntexil. NeuroSearch said the trial met its primary endpoint, triggering a jump in its stock price. But in April the company posted another press release to report that further analysis of the data had revealed the study missed its primary endpoint. NeuroSearch's stock tanked and its legal troubles began. - read NeuroSearch's release and the Jyllands-Posten article (Danish)
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Prosensa gunning for back-to-back FDA, EMA filings after raising €5M
The ever-active Duchenne muscular dystrophy (DMD) patient community has struck a deal to fund R&D, with nonprofit CureDuchenne agreeing to give Prosensa ($RNA) up to €5 million ($7 million). Some of the cash is allocated to the anticipated year-end FDA filing for drisapersen, putting Prosensa in a position to target a submission in Europe "shortly" thereafter.
"We expect to be in a position to file for conditional approval in Europe following our NDA submission," Prosensa CMO Giles Campion said on a conference call with investors. Exactly how quickly Prosensa can get an application to the EMA is unclear, with the company so far only saying it plans to file in Europe "shortly" after getting its paperwork to the FDA. Prosensa is still in talks with the EMA to establish whether studies it is running for the FDA can be used to win conditional approval in Europe.
With DMD rival Sarepta Therapeutics ($SRPT) also nearing a submission date, a crucial period for both companies and patients is approaching. Prosensa is also looking beyond its lead candidate though, with the CureDuchenne funding supporting a Phase II extension study of its second exon-skipping DMD candidate, PRO044. The Dutch biotech thinks PRO044 could help 6% of DMD patients. Drisapersen targets a bigger patient population.
The rest of the CureDuchenne money is allocated to another two DMD candidates, both of which are in early-phase clinical trials and target 8% of the patient population. - read the CureDuchenne release, financial results and call transcript
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VBL Therapeutics misses out on fresh funds after $65M IPO unravels
It became clear weeks ago that the European biotechs that sneaked in IPOs before the August lull would face a tough time on Wall Street, with below-par offerings being followed by first-day slumps. But nobody foresaw how things would turn out for VBL Therapeutics, which joined the very short list of companies that have gone public only to have their IPO canceled within days.
Israeli biotech VBL appeared to have gone public two weeks ago when it said it had sold 5.4 million shares for $12 (€9) each. The stock traded for the next week, initially slumping but then rising back towards the $12 offer price. Its progress was stopped on Aug. 7 when trading was halted. The next day VBL published a statement saying no shares were being issued because an investor that had promised to buy stock had backed out of the deal.
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| VBL Therapeutics CEO Dror Harats |
Over the past week officials at the National Securities Clearing have worked to reverse the week's trading and refund investors, The Wall Street Journal reports, while others have tried to figure out what happened. Many of the key players are staying silent, meaning one of the few certainties is the oddness of the situation. "We've never seen anything like this happen before. It could be considered a failure of the underwriters," Renaissance Capital analyst Matt Kennedy told the WSJ.
Regardless of who is at fault the outcome for VBL is the same: The $65 million it thought it had raised is no more. Around half of the cash injection was earmarked for development of its lead candidate VB-111, with a Phase III trial in patients with recurrent glioblastoma multiforme scheduled to start early next year. As of June 30, VBL had $9.8 million in cash and other accessible funds. - read the WSJ article (sub. req.)
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Genmab mulls using newfound wealth to up stake in R&D alliances
Having raised DKK 972 million ($174 million) through a private placement in January, Genmab (CPH:GEN) is sitting on a healthy pile of cash. And the Danish biopharma plans to start putting the money to work, with the conversion of some of its closed research collaborations into 50-50 partnerships one option under consideration.
Genmab discussed its plans for the money on its results call in response to a question about its immune checkpoint projects. The drugmaker is working in the field with Agenus ($AGEN) and BioNovion--the latter of which employs researchers who were involved with Merck's ($MRK) PD-1 drugs--but as it stands its role in both alliances is limited. This could change as Genmab begins to invest some of its DKK 2.5 billion cash reserves into R&D.
"We did an extra funding round in January in order to give us ammunition to actually buy into programs very actively. I can tell you that we very much foresee that we would step into these collaborations very proactively. Several of them would probably move to a 50-50 type agreement," Genmab CEO Jan van de Winkel told investors on the conference call.
Genmab could realize more immediate gains from its alliance with Johnson & Johnson ($JNJ), which is now working on four Phase III trials of daratumumab. News of the latest study was published this week, with Genmab revealing that J&J plans to start a trial in patients with multiple myeloma in the first half of next year. - here are the financial results, call transcript and daratumumab update
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Skyepharma adds clinical-stage COPD drug in Pulmagen deal
British biopharma Skyepharma (LON:SKP) has expanded its pipeline of clinical stage respiratory products through a deal with Pulmagen Therapeutics. And having struck the deal Skyepharma has a clear plan: Spend £14 million ($23 million) to generate Phase II data and then outlicense the chronic obstructive pulmonary disease (COPD) drug.
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| Skyepharma CEO Peter Grant |
The strategy builds on work already done by Pulmagen, which ran a Phase II study in patients with moderate to severe COPD in 2008. Skyepharma was sufficiently encouraged by the data and emboldened by its recent capital raise to take a punt on the drug, an inhaled, ultralow dose of theophylline now known as SKP-2075. "Pulmagen has already demonstrated better lung function with a nebulised form of SKP-2075 compared with [inhaled corticosteroid] alone," Skyepharma CEO Peter Grant said in a statement.
In the 2008 trial Pulmagen--which was then known as Argenta Discovery--administered its drug in combination with AstraZeneca's ($AZN) Rhinocort to the experimental treatment arm of a 91-person study. Argenta struck a COPD deal with AstraZeneca the year before the trial began, receiving $21 million upfront and potentially around $480 million more in milestones. The financial details of the Skyepharma acquisition are a secret, but the buyer has discussed the general structure.
Skyepharma will pay Pulmagen, at most, a "substantial minority" of any licensing income it earns from the acquired technology. How substantial depends on the amount of work Skyepharma has done on the planned clinical trial. Work on development is set to start later this year, with Skyepharma targeting a 2017 completion date for the Phase II trial. - read the release
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British researchers began trying to raise funds for development of a stem cell stroke therapy after an early-stage clinical trial delivered encouraging results. The trial--which was partly funded by British biotech OmniCyte--took CD34+ cells from patients' bone marrow and administered them to an artery that feeds blood to the brain. Release
Therapix Biosciences (TASE:TRPH) moved to buy 49% of medical cannabis developer Lara Pharm for $1.5 million (€1.1 million). This is the second time Therapix has bought a slice of Lara, with the last transaction netting it 26% of the company for $800,000. Article
Forward Pharma filed for a $200 million (€150 million) IPO to bankroll a Phase III trial of its multiple sclerosis drug, FP187. The Danish biotech will also allocate some of the cash to a possible patent fight with Biogen Idec ($BIIB). FierceBiotech
BBC published an upbeat feature on bioscience in the East of England, in which an executive compares the Cambridge life science hub to Boston, MA. "Our trajectory is the same direction and the same scale," Dr. Andy Richards said. BBC
Dutch biotech uniQure ($QURE) expanded its pipeline by acquiring Germany's InoCard for €3 million ($4 million) upfront, plus milestones. The takeover gives uniQure a new gene therapy candidate, a treatment for congestive heart failure that is due to enter the clinic in 2016. FierceBiotech
The Flemish Agency for Innovation by Science and Technology awarded Ablynx €2.1 million ($2.8 million) to advance an eye disease program through preclinical development. Release
Merck KGaA continued to talk takeovers but has yet to pull the trigger. The German pharma first began discussing its dealmaking ambitions months ago. FierceBiotech
The Financial Times dubbed Neil Woodford the "'Pied Piper' of AIM" after observing the effect his fund's investment in small companies has had on stock prices. 4D Pharma (AIM:DDDD)--which received an orphan drug status from FDA this week--is up more than 50% since Woodford invested in the company. "People follow Neil Woodford--he is the rock star of the fund management world," an analyst at Numis Securities said. FT I Release
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Read previous editions of the EuroBiotech Report here.