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Thursday, September 28, 2017

The Readout by Damian Garde & Meghana Keshavan

Welcome to The Readout, where we keep you on top of the latest in biotech. We want to wish a very happy second birthday to our sister newsletter, Morning Rounds! Sign up here for a daily dose of health and medical news.

Careful what you wish for

The industry can’t stop singing the praises of the FDA's Scott Gottlieb. PhRMA CEO Stephen Ubl gives him high marks, and his every utterance seems to draw cheers from biotech types on Twitter.

But that’s “a bit weird,” Leerink analyst Geoffrey Porges said, “because he’s not doing it to help the industry.” 

In the short term, speedy approvals and broad labels are good for profits, “but after two or three years of this, the competitiveness of just about every category is going to increase exponentially,” Porges said in part 2 of STAT’s sit-down with Leerink analysts. “Once you get three more-or-less substitutable products, your contracting leverage starts to unravel. Net pricing comes under pressure” — and that, in the long term, is bad for biopharma.

Read the Q&A on STAT Plus.

When success itself is a peril

Swiss pharmaceutical giant Novartis is joining the ranks of companies with ambitions to drug the undruggable target — just maybe don't call it that.

"In truth, I hate the term 'undruggable,'" said Dr. Jay Bradner, head of the Novartis Institutes for Biomedical Research, "because it hamstrings the creative mindset necessary to hit a previously unaccessible target."

So let's just say that Novartis is pairing up with the University of California, Berkeley, to create a joint effort focused on the wealth of plainly important disease targets that have heretofore vexed traditional drug development. 

And the plan is to be as transparent as possible, Bradner said, publishing every discovery in keeping with his promise to bring his long-established affinity for open science to the sometimes cloistered confines of multinational pharmaceuticals. 

Big Pharma has often shied away from such partnerships because, "historically, the greatest perceived challenge is, ironically, success," he said. "If we make drugs, who will own them? If we make new disease insights, who will have access to them?"

Novartis doesn't claim to have solved all those issues, but joining forces with Berkeley, Bradner said, is a start.

Lawmakers are not happy with Allergan

Allergan’s patent shenanigans with the Mohawk tribe have rubbed four U.S. senators the wrong way — and now, they’ve asked the Senate Judiciary Committee to investigate.

In a letter to Sen. Chuck Grassley, chairman of the judiciary committee, the senators wrote that Allergan’s deal is “a blatantly anti-competitive attempt to shield its patents from review and keep drug prices high.” 

And lawmakers aren't the only unhappy parties: Allergan’s stock might suffer for this. “We have been surprised,” one analyst wrote, “by the degree of questions around the agreement, including comments from some investors who mentioned they are currently unable to invest in Allergan as their firm reviews whether an investment… would meet their standards for socially responsible investing.” 

Read more on STAT Plus.

A second farewell to Gilead's COO

Gilead Sciences Chief Operating Officer Kevin Young is retiring — for the second time.

Young is best known as the brains behind the commercial success of Gilead’s dominant HIV drug franchise. When he retired for the first time in 2014, Gilead had only just secured approval for its first hepatitis C drug, sparking investor worries about the trajectory of the commercial launch. Those worries turned out to be silly. 

Young re-joined Gilead in May 2016 as a corporate strategist, which on the surface mostly involved smiling and saying nothing when investors inquired about the company’s M&A wish list. But behind the scenes, Young played an important role in Gilead’s $12 billion acquisition of Kite Pharma.

“Having helped chart a path for Gilead’s future, Kevin is choosing to retire and return permanently to Southern California, where his home is,” a Gilead spokesperson explained. 

Nonetheless, Young's short second stint will once again raise investor concerns that something is amiss in Gilead-land.

Our most pressing question: Do you get cake at a second going-away party? 

A bio-unicorn takes a manufacturing hit

As further evidence that diabetes is just plain hard, a drug/device combo from unicorn Intarcia was rejected yesterday evening by the FDA. The company’s been developing a subcutaneous implant that releases the blood sugar-modulating drug exenatide. 

But Intarcia received a complete response letter from FDA that took issue with its manufacturing practices, which Intarcia says it now plans to address. It doesn’t expect it’ll need to conduct any further trials. 

The company, which last year was valued around $3.5 billion, brought in $600 million in just its latest funding round. 

More reads

  • Former Zacks biotech analyst Jason Napodano charged with fraud after settling insider trading cases. (Endpoints)
  • After 19 die, Intercept CEO insists drugmaker is still on track. (Bloomberg)
  • President Trump is not happy with HHS Secretary Tom Price. (Associated Press)

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Thanks for reading! Until tomorrow,

Damian & Meghana

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