The Readout Damian Garde & Meghana Keshavan

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Allakos gets in under the wire

Allakos, a biotech company at work on a controversial treatment for digestive disease, provided at least a partial answer to skeptics by keeping a promise.

Yesterday, the company said it started two Phase 3 trials on antolimab, a potential treatment for a group of chronic inflammatory disorders, meeting a self-imposed deadline of the end of the first quarter. Back in February, there was significant doubt that Allakos could pull that off, as the company had yet to complete a necessary FDA meeting and had mounted a previously undisclosed safety study with no explanation as to why.

But the future of antolimab, considered a potential blockbuster, is far from secure. The drug still has to work in Phase 3, and the market’s faith seems to have waned in recent months. Allakos’s share price has fallen by nearly 40% since the start of the year, and yesterday’s news didn’t provide a bounce.

Today marks the first test for Celgene’s legacy

Bristol Myers Squibb’s $74 billion acquisition of Celgene has long since closed, but to a sizable group of investors, there’s still plenty of intrigue. Every Celgene shareholder is entitled to $9 per share if three of the company’s drugs win approval on a certain timeframe, and today brings the first hurdle to clear.

The FDA has promised to decide on ozanimod, a treatment for multiple sclerosis. The drug has had a checkered regulatory path to this point, but it’s widely expected to get the green light. The next two might not be such sure things. One, a cancer treatment acquired from Juno Therapeutics, is manufactured in Washington, a state that has been ravaged by the novel coronavirus. The other, licensed from Bluebird Bio, has yet to be filed with regulators, which means it could run into pandemic-related delays down the road.

Investors seem to think it’s a risky bet. Those $9 lottery tickets are traded on the public market, and they currently go for about $3 each, implying just 33% odds of success.

Novartis might win the race in SMA

For patients with spinal muscular atrophy, there’s a gene therapy for infants with severe disease, an injectable medicine for older people, and a not-yet-approved oral treatment with promise for milder cases. But that entire dynamic might shift thanks to new data from Novartis.

The company’s gene therapy, Zolgensma, met its goals in a small study involving patients with Type 2 SMA, less severe than the indication for which it’s already approved. Novartis’s data compare favorably with the benefits of Biogen’s injectable Spinraza and Roche’s oral risdiplam, according to RBC analyst Brian Abrahams.

If Novartis can consistently outperform its rivals in more SMA sub-populations, the one-time therapy could become the best-in-class treatment, according to Abrahams, altering a market long thought to be competitive.

At least one biotech trope is pandemic-proof

Biotech investors have a habit of grasping at straws when it comes to good news for small companies. Or at least that’s among the more sensible explanations for the phenomenon in which companies’ stock prices spike after they cancel appearances at banking conferences. The thinking, however magical, is that they must be deep in negotiation for a major buyout that will line shareholders’ pockets, a wish that persists despite mostly going unfulfilled.

Nowadays, with banking conferences joining the many normal activities on hold in the name of coronavirus containment, one would think conference-cancellation trading would come to a halt. But as Iovance Biotherapeutics demonstrated yesterday, one would be wrong.

The company canceled a webcast appearance hosted by Jefferies, and then its stock price rose more than 30%. Back when investor meetings could be safely held in person, this same thing happened to BioHaven, Sarepta Therapeutics, Acadia Pharmaceuticals, and ZioPharm in recent years. As a reminder, in each case the culprit was something benign like a scheduling conflict, not 11th-hour work on a megamerger.

More reads

  • The drug trials of the century. (Wall Street Journal)
  • A call to scientists idled by shuttered labs: Share your bench skills and resources to fight Covid-19. (STAT)
  • Biotech stocks have held up better than the broader market. (MarketWatch)

Thanks for reading! Until tomorrow,

Wednesday, March 25, 2020


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