GSK and Novartis reshape EU biotech, Celgene and Hyperion in Euro deals, U.K. cell therapy grows

Welcome to the latest edition of our weekly EuroBiotech Report. On Tuesday, European biotechs woke up to a new drug industry landscape, with the card shuffling at GlaxoSmithKline ($GSK) and Novartis ($NVS) raising questions about the future of several companies. We take a look at what is in store for ThromboGenics and Valneva now that their partners have swapped assets. Celgene ($CELG) made the big-money week even bigger by stumping up $710 million upfront to snag an Irish asset, while Hyperion ($HPTX) moved for an Israeli company in a more back-loaded deal. The U.K. reported growth in its cell therapy pipeline. Across the channel in France, a top political adviser resigned over alleged past links to Lundbeck. More Israeli biotechs and med techs are mulling U.S. listings. Payer demands are reshaping development. And more. -- Nick Taylor (email | Twitter)

1. Biotechs adjust to new landscape created by GSK-Novartis asset swap
2. Celgene, Hyperion head to Europe to buy clinical candidates
3. U.K. cell therapy pipeline expanded over the past year
4. Buzz: Israeli botanical drug biz planning to merge its way onto U.S. markets
5. Adviser to French president resigns over alleged links to Lundbeck
6. Payer demands force rethink at unpartnered biotechs

And more >>

Biotechs adjust to new landscape created by GSK-Novartis asset swap

GlaxoSmithKline ($GSK) and Novartis' ($NVS) multibillion-dollar asset swap raised numerous questions for European biotechs this week. Is a Novartis bid for ThromboGenics (EBR:THR) possible? Will Valneva (EPA:VLA) be affected by the vaccine deal? Concrete answers will have to wait, perhaps until after the deal closes next year, but several of the players gave early hints this week.

Novartis CEO Joe Jimenez took time out from discussing the GSK deal on Tuesday to tell Bloomberg he is still "optimistic" about ThromboGenics' Jetrea, an ophthalmic drug the Swiss pharma has the rights to outside the U.S. Belgian biotech ThromboGenics indicated a willingness to listen to offers in February after posting weak Jetrea sales. Observers installed Novartis as the front-runner, but the distraction of the GSK deal--and the $7.6 billion (€5.5 billion) outlay it involves--raised doubts about its interest in more acquisitions. Jimenez downplayed these doubts in a conference call to discuss the GSK deal.

Novartis CEO Joe Jimenez

The CEO told investors Novartis is still in the market for bolt-on acquisitions that improve its three core businesses. With an eye-care focus and reported sale price of up to €1.3 billion, ThromboGenics fits the description. Jimenez thinks Jetrea's slow start is due to the new treatment pathways it requires and that its long-term prospects are good. "All you have to do is look at demographics and the aging population. It's going to be an area of increased demand well into the future, which is why we are building one of our three big pillars around eye-care," Jimenez said. ThromboGenics' shares closed up 2% on the day of Novartis' news.

Valneva also had a good day, with its shares climbing 8%. The French biotech has relationships with GSK and Novartis. A spokesperson told the company views the GSK-Novartis deal as a positive for its business, particularly because there is a possibility it can recover the rights to Ixiaro, a Japanese encephalitis vaccine the Swiss pharma licensed from a company that is now part of Valneva. - here's the Bloomberg interview and piece (French)

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Celgene, Hyperion head to Europe to buy clinical candidates

Celgene ($CELG) and Hyperion Therapeutics ($HPTX) both ventured into Europe to acquire assets this week but returned with very different deals. While Celgene splurged $710 million (€514 million) upfront to license a Crohn's disease candidate, Hyperion made a back-loaded deal to buy a Type 1 diabetes drug.

Hyperion's acquisition will see it pay $12.5 million in cash and $7.9 million in stock to buy Israel-based Andromeda Biotech. If Andromeda's lead candidate--a Phase III Type 1 diabetes immune therapy--hits regulatory and commercial milestones, the value of the deal could swell beyond $500 million. With enrolment in a second Phase III trial already complete and data due early next year, Hyperion thinks it is a good deal for a late-stage orphan drug.

"We think it represents the first step in our thoughtful and rational expansion through deal making. [It also] illustrates how Hyperion is prepared to look beyond the U.S. for products," Hyperion SVP Natalie Holles said in a conference call with investors to discuss the deal.

Celgene has also been looking beyond the U.S. for products and found a Crohn's disease candidate in Ireland. The company behind the drug, Ireland-based Nogra Pharma, has licensed it to Celgene for an upfront payment of $710 million. Regulatory and development milestones could add $815 million. - read FierceBiotech's Hyperion story and Celgene story

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U.K. cell therapy pipeline expanded over the past year

The pipeline of preclinical and clinical cell therapy candidates in the United Kingdom has grown over the past 12 months, with 86 candidates now in development. And with a £55 million ($92 million) cell therapy manufacturing center due to come online by 2017, the U.K. is bullish about its ability to move the candidates through late-phase trials and onto the market.

Cell Therapy Catapult, a government-backed innovation center, collects the pipeline data to keep tabs on development of the nascent sector. The latest figures show the U.K. has 45 cell therapies in late preclinical--defined as being less than two years from human trials--compared to 37 last year. The number of clinical-phase candidates also grew, with Catapult reporting that there are 41 cell therapy trials ongoing in the U.K. Most of the drugs are being developed by research institutions and have yet to advance past Phase II.

Cell Therapy Catapult CEO Keith Thompson

A 2012 analysis of the European cell therapy landscape published in Molecular Therapy put the U.K., Germany and Spain at the forefront of the sector, a position the British government is keen to retain. Having listed regenerative medicine as one of 8 future technologies in which the U.K. can lead the world, the government is ponying up £55 million for a manufacturing center. "This will ensure that there will be support for firms to take products all the way to commercialization, leveraging the investment in early stage research," Cell Therapy Catapult CEO Keith Thompson told FierceBiotech.

The importance of capitalizing on the U.K.'s decent start in cell therapies was shown by figures from the Office for National Statistics reported in The Guardian this week. In 2012 the U.K. pharmaceutical industry spent £4.2 billion on R&D, more than any other sector. - here's the Catapult update and Guardian article

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Buzz: Israeli botanical drug biz planning to merge its way onto U.S. markets

Israeli botanical drug developer Se-cure Pharmaceuticals is planning to list on a U.S. stock exchange through a merger with a shell company, with Globes reporting that talks about a deal are underway with several possible targets.

The company has taken an unusual path to market since setting up shop in 1997, with candidates in its clinical pipeline already available as dietary supplements. Taking this approach, which is open to Se-cure because its drugs have botanical origins, has allowed the company to gather real-world safety and efficacy data while bringing in cash to fund clinical trials. Globes reports Se-cure's lead candidate, a soybean-based product for treating menopause symptoms, already racks up global annual sales of tens of millions of dollars.

Se-cure's website outlines its strategy to use data from over-the-counter sales of its drugs to support marketing applications under FDA's botanical drug pathway. FDA created the pathway in 2004 but in the first 8 years approved just two plant-derived drugs. Se-cure hopes to add to this tally and lists clinical development programs for several of its candidates on its website.

If the merger goes ahead Se-cure could be joining its Israeli neighbor Neovasc on the Nasdaq. Neovasc has filed a preliminary prospectus to raise $200 million (€144 million) on either the Nasdaq or Toronto Stock Exchange. The Israeli cardiology med tech is already listed in Toronto and could join the Nasdaq if the proposed offering goes ahead. - check out Globes' Se-cure article and its Neovasc coverage

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Adviser to French president resigns over alleged links to Lundbeck

A French political adviser who wrote many of the president's speeches has resigned amid reports of a conflict of interest. Investigative news website Mediapart alleged the adviser did private consultancy work for Danish drugmaker Lundbeck while employed at the national social affairs inspectorate.

The adviser, Aquilino Morelle, has denied any wrongdoing, writing in a Facebook post that he received authorization from his employer to take on the Lundbeck contract in 2007. Yet the employer, Igas, is unaware of any authorizations of collaborations with drugmakers in recent years. With Morelle as yet unable to find the proof of approval that would clear his name, he has resigned as President Francois Hollande's chief communications adviser.

André Nutte, the head of Igas at the time of the alleged incident, has criticized Morelle. "At the very least, it sounds like a conflict of interests. Someone cannot be tasked with an inspection and control while at the same time offering assistance to a company that is part of the control," Nutte told French radio station RTL, The Guardian reports. Morelle is alleged to have received €12,500 ($17,270) from Lundbeck for arranging meetings with people involved with drug pricing in France.

The allegations come several years after the scandal over Servier's weight-loss drug Mediator, in which the French regulator and the government were accused of being too close to biopharma companies. Morelle commented on the scandal in 2011: "It is not forbidden for doctors to have a relationship with the pharmaceutical industry, but it is necessary that they make this publicly known. What we hope is that these links are known. When you make known your relationship, you are transparent." - read the Mediapart article, Guardian coverage and Reuters' take

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Payer demands force rethink at unpartnered biotechs

The path to market for unpartnered biotechs has always been dotted with hurdles, and shifts in the requirements of European payers have added to their workloads over the past decade. With budgets and timelines tight, how can smaller companies meet growing demands for comparative effectiveness evidence?

OHE's Jorge Mestre-Ferrandiz--Courtesy of OHE

A report by the Office of Health Economics (OHE) and the Center for Medical Technology Policy looked at the responses of larger companies this week, with Amgen ($AMGN), Eli Lilly ($LLY), GlaxoSmithKline ($GSK), Novartis ($NVS) and Sanofi ($SNY) contributing their experiences and funding. Smaller biotech companies lack the resources of these businesses, but equally their size gives them some advantages when it comes to designing a path to market that is tailored to today's regulatory and reimbursement landscape.

For biotech companies, rethinking internal structures is an important first step. "They need to start thinking about how to better integrate the commercial and research environments," OHE Director of Consulting Jorge Mestre-Ferrandiz told FierceBiotech. For Big Pharma this is a major undertaking, but smaller companies should be able to adapt more quickly. And while clinical-stage biotechs may lack internal experience in designing programs to meet payer demands, such expertise is available--for a price--at consultants and service providers. - get the OHE report

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Of Note:

Shares in Dutch biotech Prosensa jumped 6% on Monday after its rival for the Duchenne muscular dystrophy market agreed a path forward with FDA. The rival, Sarepta Therapeutics, plans to submit a marketing application to FDA later this year and could win approval in the second half of 2015. FDA had previously said Sarepta's plans to submit were premature, in part because of doubts raised by the failure of Prosensa's candidate in a late-phase trial. Reuters | FierceBiotech

A British court has sentenced a spokesperson for Stop Huntingdon Animal Cruelty (Shac) to 6 years in jail. Shac was set up to oppose preclinical CRO Huntingdon Life Sciences (HLS). As part of this mission the group falsely accused HLS employees of being pedophiles, sent hoax bombs and damaged homes and cars, Cambridge News reports. Shac also targeted HLS' customers, notably Novartis ($NVS) and its then-chairman, Dan Vasella. Cambridge News

Roche ($RHHBY) has made the first milestone payment in its biomarker collaboration with Evotec. FierceDiagnostics

U.K. diagnostics developer Quotient has cut the proposed range for its Nasdaq IPO for the second time. Quotient originally planned to sell 5 million shares for $14 to $16 each, bringing in up to $80 million (€58 million). However, the company cut its range to $9 to $11 earlier this month and has now lowered expectations again. Quotient now plans to offer 5 million shares at $8, plus attached warrants to buy 4 million shares at $8.80 each. Renaissance Capital

Positive Phase I data has convinced Germany's immatics biotechnologies to push on with development of its vaccine against glioblastoma. In a trial run by nonprofit Cancer Research UK, the vaccine met its two primary endpoints of safety and immunogenicity. Cancer Research UK ran the trial as part of its Clinical Development Partnerships program, in which it does early clinical work in exchange for licensing fees, milestones and royalties. Release

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Read previous editions of the EuroBiotech Report here.