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The Readout Damian Garde

Why did the FDA come down so hard on Novartis?

Among the unanswered questions from last week’s Novartis data scandal is why the normally buttoned-up FDA chose to publicly castigate the company and raise the specter of civil and criminal penalties.

Writing in STAT, former FDA Commissioner Robert Califf said: “I have no special insight into the motivation for the FDA’s specific aggressive public statements regarding the [Novartis] case, but I suspect the key issue of trust in the face of overwhelming complexity is driving the stern warning and possible consequences.”

Beyond the specifics, the whole Novartis is affair is a reminder that mistakes and misdirections are fairly common when it comes to data on new medicines, according to Califf. But there's also the possibility of outright cheating. Within the industry, he writes, "complex incentives are in play." 

Read more.

Yesterday’s unicorn is today’s $11 stock


Remember Rubius Therapeutics? The company had an intriguing approach to red blood cells, some creative marketing, and enough investor confidence to go public at a roughly $2 billion valuation last summer.

A year and change later, Rubius is worth about $900 million, below its last private valuation before the IPO. 

The company is behind schedule enrolling its first clinical trial, on an engineered red blood cell to treat the rare metabolic disorder phenylketonuria. That was supposed to start last quarter, but instead Rubius has been “working closely with its contract manufacturer to improve its ability to consistently produce product.” Initial data will still be ready some time this year, according to the company, and those results will shed light on just how much promise there is in Rubius’s platform approach.

In the meantime, at least in valuation terms, life outside the enchanted forest has been difficult for this former unicorn.

This could be Regeneron's next product

The latest data on Regeneron Pharmaceuticals’ treatment for ultra-high cholesterol suggest the intravenous medicine could have an easy path to approval. But the actual number of eligible patients has already raised concerns that the company’s latest impressive science could have little commercial impact.

The news: Regeneron’s evinacumab significantly lowered bad cholesterol for patients with homozygous familial hypercholesterolemia, a genetic disease that causes dangerously high cholesterol. And it was pretty dramatic: On average, patients who got evinacumab saw their cholesterol fall by 47%, while those on placebo saw it rise 2%. That’s all on top of maximum-tolerated therapy.

The context, however, is that the disease affects roughly 1 in 1 million births, and there are therapies — including Regeneron’s own Praluent — approved to treat it. That means evinacumab would likely be limited to only the most severe of patients, a small population that analysts say will make it difficult to turn the treatment into a revenue driver.

Read more.

Need money? Why wait?

Developing drugs is a cash-intensive business, which is to say biotech companies pretty much always need money. For publicly traded companies, the easiest way to raise cash is by selling shares, and the best time to do that is when those shares are particularly valuable. That’s why it’s pretty common to see good news — a positive clinical trial, usually — followed within a few days by an announcement of a fundraise.

But why wait so long? Yesterday, at 7 a.m. ET, Deciphera Pharmaceuticals told the world that its investigational drug made a difference for patients with stomach cancer, news that nearly doubled the stock price. Exactly nine hours and one minute later, the company put out a press release to say it was raising $200 million in a stock price.

That beats Allakos, which last week waited nine hours and 29 minutes between good news and cashout. And it easily tops the old standard of letting at least 24 hours elapse before raising money. However it does leave room for some real innovation: announcing the good news and the stock offering in the same press release.

More reads

  • One health care startup at a time, this venture capitalist wants to harness the investing power of women. (STAT)
  • Ancestry plans to get into healthcare. (Business Insider)
  • Trump’s Canada drug import plan can’t happen without Big Pharma. (Bloomberg)
  • Memo to the Novartis CEO: When in doubt, give the FDA a heads-up. (STAT)

Thanks for reading! Until tomorrow,


Wednesday, August 14, 2019


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