Welcome to the latest edition of our weekly EuroBiotech Report. AstraZeneca ($AZN) continued to make progress with its pipeline this week, with the antibiotic it is developing with Actavis' ($ACT) Forest Laboratories the latest to impress in clinical trials. Data on the antibiotic and particularly some oncology compounds have burnished AstraZeneca's pipeline in recent months, a development that means the Anglo-Swedish drugmaker may now be too expensive to be attractive to Pfizer ($PFE). Santhera Pharmaceuticals (SIX:SANN) has also progressed over the first half of 2014. And the Swiss pharma has now edged further away from the abyss that it was looking into at the start of 2014 by raising CHF 13.4 million ($14.8 million). KalVista Pharmaceuticals swelled its coffers with £5.4 million, cash existing investors SV Life Sciences and Novo A/S put forward to fund a Phase I trial of the British biotech's diabetic macular edema candidate. Another of Novo A/S' investments, Orexo (STO:ORX), was in the news too. The Swedish company is rethinking its R&D and production model, a process that could lead to layoffs at its headquarters and increased reliance on partnerships. Fellow Scandinavian biotech NeuroSearch (CPH:NEUR) has decided to appeal its conviction for share price manipulation. And more. Nick Taylor (email | Twitter)
1. Pipeline progress could put AstraZeneca beyond Pfizer's reach
2. KalVista bags £5.4M from Novo A/S, SV Life Sciences for DME trial
3. Santhera raises $15M to hit gas on regulatory filing strategy
4. Orexo to rely more on partnerships after tweaking R&D model
5. NeuroSearch to appeal conviction for share price manipulation
And more >>
Pipeline progress could put AstraZeneca beyond Pfizer's reach
With the date at which AstraZeneca ($AZN) and Pfizer ($PFE) can re-enter takeover talks edging ever closer, speculation about a potential deal has intensified. And while Bloomberg reports that AstraZeneca is still at the top of Pfizer's shopping list, pipeline progress and other events over the past three months could make the Anglo-Swedish drugmaker too expensive.
Since United Kingdom takeover rules brought a temporary stop to Pfizer's pursuit, AstraZeneca has begun to deliver on some of its R&D promises, raised its sales forecast and struck a $2.1 billion (€1.6 billion) deal to buy Almirall's (BME:ALM) respiratory franchise. The upshot is that some analysts think Pfizer will have to offer considerably more than its last £69.5 billion offer if it is to get AstraZeneca to the negotiating table.
"Astra will ask for much more, and they have proven they are building a very solid pipeline," Helvea analyst Odile Rundquist told Bloomberg. "My impression is that the deal will never go through, because it is too expensive for Pfizer." Other analysts have suggested GlaxoSmithKline ($GSK) as an alternative target, but even after its recent share price drop its market cap is near £70 billion. And the political opposition to a buyout of GSK could dwarf the furor over the bid for AstraZeneca.
Pfizer is reportedly weighing up a bid for Actavis ($ACT), which could provide an easier route to a low tax rate. The Ireland-based drugmaker was buoyed this week by the news an antibiotic being developed by its Forest Laboratories and AstraZeneca improved cure rates in two Phase III trials. The result positions AstraZeneca to file for regulatory approval next year, a move that could make it an even pricier proposition for Pfizer. - read Bloomberg's article and the antibiotic news
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KalVista bags £5.4M from Novo A/S, SV Life Sciences for DME trial
KalVista Pharmaceuticals has raised £5.4 million ($9.0 million) from existing investors SV Life Sciences and Novo A/S. And having secured the cash injection, the British biopharma is forging ahead with clinical development of its diabetic macular edema (DME) candidate, which entered Phase I this month.
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| KalVista CEO Andy Crockett |
The fresh funding and Phase I trial come almost exactly two years after researchers from Harvard Medical School co-founded KalVista and secured an £8 million Series A investment by SV Life Sciences and Novo A/S. In the intervening two years the Southampton, U.K.-headquartered biopharma--which also has an office in Boston--has worked to advance its plasma kallikrein inhibitors through preclinical development.
An open-label, single-ascending-dose study of its lead candidate is now underway in the U.S. And with the trial adding to KalVista's overheads, the company has again tapped SV Life Science Partners and Novo A/S for cash. "The new funding will enable us to complete our early clinical trial work for our intravitreal compound, KVD001," KalVista CEO Andy Crockett told FierceBiotech. Crockett expects to have Phase I data in the second quarter of 2015.
The clinical-stage candidate is delivered via direct injection into the eye, enabling a high dose to be given without affecting other parts of the body. KalVista also sees value in oral delivery of kallikrein inhibitors, notably because patients are likely to be more accepting of this route than an intravitreal injection. A 2012, £2.4 million grant from the U.K. government kick-started the oral program, which will use some of the new funding for candidate selection and preclinical toxicology studies. - read the release
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Santhera raises $15M to hit gas on regulatory filing strategy
After suffering a series of setbacks over the past 5 years, Santhera Pharmaceuticals (SIX:SANN) has regained a little momentum in 2014. And the partial recovery is continuing, with the Swiss biopharma raising CHF 13.4 million ($14.8 million) through the sale of treasury shares to lessen its financial concerns.
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| Santhera CEO Thomas Meier--Courtesy of Treat-NMD |
The fundraising ends Santhera's near-term worries about running out of money, which intensified as the company's cash reserves fell to CHF 5 million at the end of 2013. Having added the cash the Swiss biopharma is ready to push ahead with filings of its lead candidate in the U.S. and Europe. The regulatory process is already underway, with Santhera responding to the 2013 disappointment of a European Medicines Agency (EMA) rejection by adding data and resubmitting its application in May.
The filing covers use of the drug--known as Catena in North America and Raxone in Europe--in people with Leber's hereditary optic neuropathy (LHON). If the EMA returns a positive decision next year, Santhera will seek to extend use of the drug to Duchenne muscular dystrophy (DMD), a disease for which the company has Phase III data. A DMD filing is also planned if the EMA rejects its LHON application, BioWorld reports. Talks with FDA about a filing in DMD are in the pipeline, too.
Resubmitting the LHON filing and publishing the DMD data earlier this year brought Santhera out of a downward spiral and triggered a 20-fold increase in its share price. The 20-fold increase came off a very low base, with Santhera's stock being beaten down over the past 5 years by the failure of a Phase III trial of Catena in patients with Friedreich's ataxia and setbacks in LHON. The stock is now trading at prices last seen in 2008.
"Four U.S. specialist healthcare funds have bought into the stock, and there are more in the works," Santhera CEO Thomas Meier told BioWorld. The funds--ATP Early Harvest Fund, Consonance Capital Management, Pura Vida Investments and RTW Investments--now hold around one-fifth of Santhera. But having seen its stock fall from CHF 130 to CHF 2 during its life as a public company, Santhera knows biotech fortunes can turn quickly. - read the BioWorld article and press release
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Orexo to rely more on partnerships after tweaking R&D model
Orexo (STO:ORX) is to rethink its R&D model and move production of Zubsolv to partners in the U.S. as part of a restructuring that threatens 15 jobs at its headquarters in Uppsala, Sweden. The changes will result in Orexo being more reliant on external partnerships.
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| Orexo CEO Nikolaj Sørensen |
Novo A/S-backed Orexo is aiming to complete the restructuring in the fourth quarter at a cost of SEK 7 million ($1 million). And the drugmaker expects to start realizing the financial benefits of the cuts soon after, with annual savings of up to SEK 15 million forecast from the start of 2015. The effect of the changes on R&D--which Orexo said are intended to "increase flexibility and agility"--will take longer to assess.
The model now being pursued by the specialty pharma company echoes the approach taken by bigger drugmakers, with Orexo putting increased emphasis on the role of third parties. "This new operating model will build more on external partnerships to ensure we complement our excellent and proven internal development team with leading international expertise," Orexo CEO Nikolaj Sørensen said in a statement.
While the performance of opioid-dependence drug Zubsolv is picking up--Orexo reported a 64% sales increase over the past four weeks, causing its market share to grow from 2.3% to 3.9%--the company has a fairly thin pipeline. Pain treatment OX51 completed a Phase II trial last summer, and Boehringer Ingelheim returned the rights to anti-inflammatory OX-MPI earlier this month. A dormant cancer pain project and a hay fever treatment licensed to Meda (STO:MEDA-A) round out the pipeline. - read the release
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NeuroSearch to appeal conviction for share price manipulation
NeuroSearch (CPH:NEUR) has again expressed its disbelief at the decision of a Danish court to convict it of share price manipulation, saying that the ruling provoked "wonder and surprise" at the company. And the company feels strongly enough about the ruling to fight back, with management committing to appealing the decision.
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| NeuroSearch chairman Karin Garre |
The appeal will see the case escalate through the court system, with the initial decision by the City Court of Copenhagen now set to be reviewed by the Eastern High Court of Denmark. While fighting the case will push back the date on which NeuroSearch can finally make a decision about what to do with the business, the company thinks the chance to free itself from the DKK 5 million ($0.9 million) fine imposed by the court makes an appeal the best option for shareholders.
NeuroSearch chairman Karin Garre revealed the decision in a statement, in which she also expressed the company's surprise at the court's ruling. "The board of directors is of the opinion that there is no evidence for convicting the company of share price manipulation or for ordering the company to pay a fine," Garre wrote in a statement. NeuroSearch's former CEO, Flemming Pedersen, also plans to appeal his conviction.
As the NeuroSearch board sees it, the company thought its trial had met its primary endpoint and issued a press release to convey the news. Then, when it became clear the conclusion "was based on a statistical correction that was not described in the study protocol," management issued a second press release to inform investors the trial actually missed the endpoint. - read the statement
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A Dutch biotech co-founded by former Genzyme CEO Henri Termeer filed its papers for a $75 million (€56 million) IPO. The company, ProQR Therapeutics, is developing a cystic fibrosis treatment that it plans to move into the clinic over the next year. FierceBiotech
The U.S. Department of Justice closed its investigation of AstraZeneca's ($AZN) 18,000-person Brilinta trial. Concerns about the number of Eastern European patients in the trial and an alleged difference in the outcomes of people monitored by AstraZeneca and its CRO triggered the probe. FierceBiotech | Reuters
Danish financial regulators fined Novo Nordisk ($NVO) $90,000 (€68,000) for taking the weekend to evaluate the FDA's complete response letter for Tresiba before issuing a press release. Novo accepted the fine but defended its actions. The Danish drugmaker also gave its take on the diabetes market, with CEO Lars Rebien Sørensen revealing he thinks Eli Lilly's ($LLY) dulaglutide is a good product. FierceBiotech | More
Israel's Compugen ($CGEN) bought back Baize Investments' stake in some of its pipeline candidates. Baize invested $13 million (€10 million) to acquire a stake in the drugs, but has now decided to convert its interest in specific products into shares in Compugen. Release
The will-they-or-won't-they saga involving Novartis ($NVS) and Gamida Cell has reached a conclusion, with the Swiss pharma paying $35 million (€26 million) for a 15% stake in the Israeli biotech. And while the deal is considerably smaller than the buyout that was on the cards last year, it could turn into a $600 million takeover if Novartis is sufficiently impressed by Gamida's progress. FierceBiotech
Zealand Pharma (CPH:ZEAL) trimmed its portfolio of preclinical projects, a move the Danish drugmaker thinks will allow it to accelerate the progress of the most promising candidates into clinical trials. Release
MorphoSys (ETR:MOR) struck a $183 million (€138 million) deal for Emergent BioSolutions' ($EBS) early-stage prostate cancer treatment. FierceBiotech
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Read previous editions of the EuroBiotech Report here.