Welcome to the latest edition of our weekly EuroBiotech Report. Roche ($RHHBY) took another step back into RNA this week, striking a $450 million (€335 million) deal to acquire Santaris Pharma and committing to making the Danish biotech's lab its RNA therapeutics research unit. The deal comes weeks after the Swiss Big Pharma cancelled one of its large bets from last year, the $600 million biobuck deal it inked with Israel's Chiasma Pharma for a Phase III acromegaly candidate. Chiasma has now spoken out about the deal, framing the decision as having more to do with Roche's unwillingness to get deep into hormone-based drugs than the strength of the Phase III data. Either way it means Chiasma has reversed its decision to wind down the business and it is now looking for a new partner to commercialize the drug. Sarepta Therapeutics ($SRPT) and Prosensa ($RNA) are also turning their attention to commercialization plans, but must continue to deal with their patent interference case too. The latest batch of European biotechs to trail Netherlands-based Prosensa on to the Nasdaq followed up their lackluster IPOs with a tough start to trading. Israel's BioBlast Pharma ($ORPN) led the group down, with its stock falling almost 35% over the first two days of trading. Imperial College London moved ahead with its plans to create a R&D site where startups, academia and established companies can work side by side. And more. Nick Taylor (email | Twitter)
1. Roche to set up Danish innovation center in $450M Santaris buyout
2. Work set to start on London's £3B academia-startup-industry R&D campus
3. Newly public Euro biotechs slump after Nasdaq IPOs
4. Chiasma revives solo plans after Roche backs out of $600M deal
5. Prosensa and Sarepta's patent case rolls on as both race for approval
And more >>
Roche ($RHHBY) continued to move back into RNA this week by striking a $450 million (€335 million) deal to buy Denmark's Santaris Pharma. And instead of shedding Santaris' infrastructure, Roche is to turn the biotech's lab in Copenhagen, Denmark, into the centerpiece of its RNA R&D efforts.
|Santaris CEO Donald deBethizy|
Santaris--a 2008 Fierce 15 company--set up shop at the lab when it was founded in 2003 through the merger of Danish biotechs Cureon and Pantheco. The biotech that emerged from the deal had DKK 135 million ($24 million) in the bank, a lab in Hørsholm courtesy of Pantheco and LNA (locked nucleic acid) technology from Cureon. Both assets attracted Roche, with a spokesperson for the Swiss pharma telling FierceBiotech the Hørsholm lab will become its RNA therapeutics research unit. The focus will now shift to integrating the unit and retaining key employees.
"It is critical to keep the scientific talent intact," the spokesperson said. Santaris employs 50 people, many of whom will now be integrated along with the Hørsholm lab into Roche's Pharma Research and Early Development (pRED) unit. The fate of Santaris' San Diego site is less clear. Roche will "assess how to accommodate Santaris employees in San Diego," the spokesperson said.
Roche signaled its interest in the Danish biotech in January when it paid $10 million upfront and committed to up to $138 million in milestones per product to collaborate on the discovery of LNA drugs. That deal came 9 months after the Swiss pharma put itself back in the RNA game by inking a $392 million RNA agreement with Isis Pharmaceuticals ($ISIS), a Carlsbad, CA-based company that filed a patent infringement lawsuit against Santaris in 2011. In March a court rejected Santaris' attempt to have the case dismissed.
While fighting the case Santaris has continued to strike deals, inking new or expanded agreements with Bristol-Myers Squibb ($BMY), GlaxoSmithKline ($GSK), Shire ($SHPG) and others in 2013 and 2014. Having helped to fund Santaris through this period, Dutch VC shop Forbion Capital Partners is set to add another name to its list of portfolio company exits. Forbion also invested in Belgium-based arGEN-X (EBR:ARGX) and Netherlands-based uniQure ($QURE), both of which went public this year. - read Roche's release, FierceBiotech's take and Forbion's news
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Imperial College London has awarded a building contract for the 48,000-square-meter research center it plans to fill with spinouts, startups and established businesses. And with work now slated to start next month, construction of the centerpiece of the £3 billion ($5 billion) campus extension is due to be completed in 2016.
The university is pitching the campus as a bridge between its scientific research, the spinouts this work creates and established business that can help fund and commercialize the innovation. Data science is a core focus of the venture, with Imperial hoping the local mix of startups, hospitals and other groups will lead to advances in healthcare and other industries. The model envisaged for the West London site--and in particular its location--differs from the science hubs of previous decades.
|Imperial VP David Gann|
"Back in the 1970s, people were building science parks on out-of-town campuses. [Imperial West] is an inner city innovation district, a hubbub of activity, well connected and with good access to London's financial centre and venture funding. We have good transport links to our research partners in Oxford and Cambridge [universities] and also to China," Imperial's VP for development and innovation, professor David Gann, told the Financial Times.
If startups agree with Gann's views about the benefits of city sites over suburban campuses, it could create difficulties for groups that are trying to turn former Big Pharma facilities into R&D hubs. Last month the FT quoted property experts as saying out-of-town campuses are struggling to compete with city center sites. And with space at AstraZeneca's ($AZN) Alderley Park becoming available soon and Pfizer's ($PFE) Sandwich site still filling up, there is plenty of out-of-town capacity. - read the FT article
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Having priced at the low end or below their ranges, the batch of European biotechs that listed on Nasdaq last week got off to a bad start as public companies. Israeli biotech BioBlast Pharma ($ORPN) led the group's downward spiral, with its stock price falling almost 35% over its first two days of trading.
Fellow Israeli biotechs Macrocure ($MCUR) and VBL Therapeutics ($VBLX) also found the first 48 hours heavy going, with their shares dropping 8% and 7%, respectively. Irish-headquartered Innocoll ($INNL), the fourth European biotech to go public last week, also suffered, with its stock declining almost 6% over the first two days. Each of the stocks recovered, to some extent, from Monday onwards, but their experience suggests the market's attitude to European biotechs has hardened.
Jason Kolbert, an analyst at Maxim Group, framed the frosty reception as a consequence of IPO investors becoming more discerning. "There's a difference between a hot market where you can do anything, and a smart market that says, is there a catalyst behind this, is there an unmet medical need? The market is beginning to differentiate between just anything, which is where we were in January to March, to selective," Kolbert told Bloomberg.
With the IPO market now winding down for the summer, European biotechs that missed the boat are left wondering whether they will be more warmly received in September. Having planned to list two weeks ago, Mapi Pharma could be the first in line when the IPO market gets going again. Globes reports that Israeli biopharma companies NeuroDerm, Foamix Pharmaceuticals and PolyPid are also looking into listing. - read the Bloomberg article and Globes' piece
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While one part of Roche ($RHHBY) was striking a $450 million (€335 million) deal with Santaris Pharma to get deeper into RNA, another was backing away from its $600 million biobuck play in the hormone-based drug sector. The decision leaves Israel-based Chiasma Pharma with Phase III data in hand but no partner with which to prepare a marketing application.
|Daniel O'Day, COO of Roche's pharmaceuticals division|
In February 2013, Roche paid Chiasma $65 million upfront for the exclusive worldwide license to an acromegaly candidate, oral octreotide, which was already in Phase III at the time of the agreement. Roche also committed to $530 million in milestones, but Chiasma will only receive a fraction of this potential windfall now that the Swiss drugmaker has cancelled the agreement. The decision follows the completion of a Phase III trial.
"We had some additional Phase III data plus some regulatory interactions in the second quarter and we decided to not move that program ahead," Roche COO Daniel O'Day said. O'Day made the comments late last month on a conference call to discuss Roche's second-quarter results. Globes has since uncovered more details of the decision from Chiasma. The Israeli biotech is presenting the decision as a symptom of Roche not wanting to get deeper into endocrinology.
Regardless of why Roche made the decision, the outcome for Chiasma is the same. Having planned to wind down the company after handing the drug over to Roche--it had already begun laying off staff--Chiasma must now prepare a FDA submission and find a new partner. And instead of spinning off its other candidates, the company will now raise money and restart R&D. The next candidate could enter clinical trials within 18 months. - read the Globes article and Roche transcript
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While Dutch biotech Prosensa ($RNA) and its U.S. rival Sarepta Therapeutics ($SRPT) are both now preparing for the final leg of the race to bring a Duchenne muscular dystrophy (DMD) drug to market, their long-running patent dispute is still bubbling away in the background. And Sarepta revealed a new development in the saga in its second-quarter results.
|Sarepta CEO Chris Garabedian|
Last month the U.S. Patent and Trademark Office declared two of Sarepta's patents covering its DMD drug, eteplirsen, as interfering with one of Prosensa's patents. Sarepta CEO Chris Garabedian declined to provide further details of the development on a conference call with investors but downplayed its significance. "It doesn't impact any of our development or submission plans," Garabedian said.
The situation in Europe is more complicated for Sarepta, where Prosensa controls patents for its DMD drug drisapersen. This case is still evolving though, with a fresh batch of documents added to the European Patent Register in January and again in June. Sarepta's first priority is to work out a plan for approval with the European Medicines Agency, after which it will try to find a way to avoid a situation in which patents prevent patients in the region from receiving eteplirsen.
"Once we have clarity on whether or not eteplirsen could be approved [in Europe] on the existing data set, we would look to figure out how to resolve those issues in a variety of ways," Garabedian said. - here's the Sarepta filing
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Analysts passed the time waiting for data on Novartis' ($NVS) potential blockbuster drug LCZ696 by speculating on the two numbers that will shape its future: the drop in risk of cardio death it causes and the sales this will enable it to rack up. FierceBiotech
Novimmune reported on the completion of a Phase I trial of its rheumatoid arthritis candidate. The monoclonal antibody is now set to advance to a Phase II proof-of-concept study, in which the Swiss biopharma will assess its viability as a targeted therapy for rheumatoid arthritis. Release
Servier paid out several milestones after its partnerships with Galapagos (AMS:GLPG) and Vernalis (LSE:VER) both advanced. Galapagos received an undisclosed payment in relation to a preclinical osteoarthritis candidate. Servier also paid €0.75 million ($1.0 million) to Vernalis after the companies' oncology drug discovery collaboration passed two milestones. Galapagos | Vernalis
The organization tasked with turning Pfizer's ($PFE) Sandwich, England, site into a thriving science park received £4.6 million ($7.8 million) to improve power lines, roads and sewerage. Kentcentric
The British government clarified the purpose of its newly created life science position, with R&D at the National Health Service, genomics and regulation of medicines all covered by the brief. Post
Sweden's Medivir (STO:MVIR-B) licensed a respiratory syncytial virus program from Boehringer Ingelheim. The deal gives Medivir an exclusive global license to develop and commercialize drugs resulting from the program. Release
Israel's Kadimastem (TASE:KDST) struck a drug screening deal with Merck Serono. Kadimastem will use its technology--which it is also applying to an in-house pipeline--to help Merck Serono screen potential treatments for multiple sclerosis and other neurodegenerative diseases. Release
Boehringer Ingelheim returned the rights to a pain and inflammation project to Orexo. Having worked with Boehringer since 2005, Sweden's Orexo must now decide whether to find a new partner for the program. FierceBiotech
Danish biotech Symphogen advanced two recombinant antibody mixtures through the clinic, triggering milestone payouts from its partner Merck Serono. The more advanced of the two trials is a Phase IIb study in people with metastatic colorectal cancer. Release
Auris Medical ($EARS) joined the ranks of European biotechs that have priced their IPOs well below initial targets, with the Swiss biotech selling shares at $6, half of the top end of its range. The company made up some of the fundraising shortfall by selling more shares. FierceBiotech
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Read previous editions of the EuroBiotech Report here.