Opinion and Analysis
By Mitchell Young
|Alexion Board Chair
Paul Elliott Singer
NEWHAVEN: Things are looking better at Alexion Pharmaceuticals [NASDAQ: Alxn] as the New Year begins. The collapse of the company’s stock from $149 to $105 has abated with a rise back to $125 a share as the year started.
The company announced on January 4th that it has made peace with activist investor Elliot Management. Elliot reportedly made a sizable investment in the company and according to a report in the New York Times wanted to see the company do more to increase the stock price including the possible sale of the company [see Activist Investor Targets Alexion].
Elliot also questioned the level of bioscience expertise on the board, a criticism we raised about the company’s board as well in early November 2017 in Alexion Sent On Market Tailspin Since Relocation, Reorganization Announcements.
HARTFORD: Connecticut Children's Medical Center has made an investment in a small Massachusetts based biotech company Biostage, Inc. [OTCQB: BSTG/BSTGD]. The Center’s investment was part of a $4.2 million private placement. The current company’s market value is approximately $2.5 million. The hospital has reportedly made a $100,000 investment in the placement.
CCMC has several locations in Connecticut and at the Shriners Hospital and Baystate Medical [hospital] in Springfield, Mass.
Biostage says it is developing “bioengineered organ implants to treat cancers and other life-threatening conditions of the esophagus, bronchus and trachea.” According to the company, the Children’s Medical Center was joined by a “group of investors from China.”
In October the company reduced its workforce by 71% [17 employees], in response to problems with another investment that didn’t materialize.
NEW HAVEN: The privately owned biotech Arvinas LLC, based on research by Yale’s Craig Crews, entered a license agreement and research collaboration with Pfizer Inc. [NYSE: PFE] potentially worth more than $830 million. The agreement is for the discovery and development of drug candidates using Arvinas' proprietary PROTAC (PROteolysis TArgeting Chimeras) Platform. The technology developed by Crews is what the company calls, “a novel technology used to create small molecule therapeutics aimed at degrading disease-causing cellular proteins.”
Crews was recognized by Business New Haven in 2014 as the Researcher of the Year, Healthcare Hero. Company Chairman Tim Shannon led the founding investment for the company, he was recognized as a 2014 Healthcare Hero, Person of Merit as well.
NEW HAVEN: Melinta Therapeutics, Inc. [Nasdaq: MLNT], a commercial-stage company discovering, developing, and commercializing novel antibiotics to treat serious bacterial infections, today announced the appointment of Lisa DeFrancesco as senior vice president of investor relations (IR) reporting to Dan Wechsler, president and chief executive officer.
DeFrancesco is a seasoned healthcare industry executive, with 18 years of experience in investor relations, finance and communications. She joins Melinta from Allergan [NYSE: AGN] where she served most recently as vice president of IR.
NEW HAVEN: The US Federal Drug Administration FDA has awarded Achillion Pharmaceuticals, Inc. [Nasdaq:ACHN], orphan drug designation for it development drug ACH-4471 for the treatment of patients with C3 Glomerulopathy (C3G).
According to the company, C3G is a “devastating renal disease for which there is no approved therapy.” Adding, “there are estimated to be approximately 4,000 C3G patients in the United States, approximately 4,000 in Europe, and more than 1,000 patients in Japan.
The FDA Orphan Drug Designation program provides incentives for the development of potentially promising drugs to treat, diagnose or prevent orphan diseases and disorders that affect fewer than 200,000 people in the U.S. This designation may provide, under specified conditions, for a seven-year marketing exclusivity period, as well as certain incentives, including federal grants, tax credits and a waiver of PDUFA filing fees.
On November 14, 2017, Achillion announced interim data from the first two patients in an on-going Phase 2 study in C3G patients demonstrated that the current formulation of ACH-4471 achieved “complement alternative pathway inhibition resulting in greater than 50% reduction in proteinuria over the 14-day treatment period and a favorable tolerability profile.”
“We are pleased that the FDA has granted orphan drug designation to ACH-4471 for treatment of C3G, and we look forward to additional data from the ongoing extended release formulation study. We are keenly aware of the unmet need for patients and we are committed to advancing ACH-4471 for C3G as we believe we have an opportunity to develop a potentially disease-modifying therapy, based on the unique mechanism of action, for ACH-4471,” commented Milind Deshpande, Ph.D., President and CEO.
By Mitchell Young
NEW YORK and LONDON: Akari Therapeutics, Plc [NASDAQ:AKTX], a biopharmaceutical company in clinical development of a drug competitive to Alexion Pharmaceuticals [NYSE: ALXN] flagship drug Soliris, announced that the Phase II COBALT trial of CoversinTM in paroxysmal nocturnal hemoglobinuria [PNH], met its primary goals.
Akari is a public company but tiny when compared to Alexion. Akari’s market capitalization is approximately $68 million, Alexion $24 billion.
Clinical trials for drugs competing with Alexion’s Soliris typically have very small patient enrollments. Akari’s trial consisted of a total of only 9 patients. New Haven’ Achillion Pharmaceuticals [ Nasdaq: ACHN] also has a drug in development to treat [PNH], and has met its goals in a Phase II trial as well.
“We are encouraged by the results from the Phase II trial, especially the lower mean LDH value observed in the last three patients enrolled into the trial treated with 45 mg daily compared to the patients treated with 30 mg daily,” commented Dr. David Solomon, Chief Executive Officer of Akari Therapeutics.
Solomon added, “we are on track to progress into Phase III clinical trials in the first quarter of 2018 with the revised dosing regimen of 45 mg, as discussed with the FDA.”
According to the company, “the Phase II data suggest that Coversin is a potential alternative to existing therapy for patients with PNH, and could allow independence from intravenous infusions through self-administration.”
Soliris is administered via infusion, Alexion announced a licensing deal with Halozyme Therapeutics, Inc. [Nasdaq:HALO] of San , technology that will allow Alexions Soliris replacement drug ALXN1210 [ in clinical trials] to also be available to patients by self-administration without infusion, [see licensing].
Akaris expects it Phase III trial will include patients that have not been treated with Soliris as well as patients that have been on the Alexion drug. Alexion’s Soliris generates more than $3 billion annually in sales and at more than $440,000 per patient per year is considered the most expensive drug on the market today.
In reporting last week the New York Times disclosed that activist investor Elliot Management is seeking changes to Alexion’s board and a revised strategic plan, [see Activist Investor Targets Alexion].
|Billionaire Paul Elliott Singer of Elliot Investment has been described as one of the country's toughest money managers and a vulture investor. His firm has targeted Alexion for changes or a possible sale.|
By Mitchell Young
NEWHAVEN: All bets may be off at Alexion Pharmaceuticals [ NYSE: ALXN] as an activist investor announced it has taken a position in the company and is seeking major changes and potentially force a sale of the company.
According to the news site Fiercebiotech, Leerink Partners analyst Geoffrey Porges has called Alexion “one of the rare, once or twice per decade, activist investment situations in the biopharmaceutical industry.”
Apparently activist investor Elliott Management agrees, with the analyst, the New York Times, reports that Elliot has taken a position in the company and will likely press the company to do more to boost its share price.
In mid September the company’s stock price was $149 per share and analysts were recommending that it could reach $170 this year. New Alexion CEO Ludwig Hantson announced a new direction for the company on September 12 including a re-location of its headquarters to Boston and a restructuring of the company reducing the workforce by 20%.
The market reaction to the company’s financial guidance and new direction was not positive and the stock traded at just above $105 per share on December 7th.
The Times wrote that Elliot was seeking a more aggressive plan for the company including the potential sale of the company. The current market value of the company is approximately $25 billion. Revenue for the company and profits for the company have continued to grow, but Hantson’s guidance suggested it could slow down. Several companies have been working on new drugs that would target the same disease, paroxysmal nocturnal hemoglobinuria [PNH], that drives Alexion’s sales, including New Haven based Achillion Pharmaceuticals [Nasdaq: ACHN].
Reaction to the Elliot investment sent Alexion stock up 6% so far today [ December 8].
According to the Times, Elliot met with Alexion management in October and presented a list of four new potential board members for the company, a deadline for adding board members is imminent.
Alexion has responded to press inquiries saying, “Alexion believes in active and constructive dialogue with all of our shareholders, and we value their perspectives.”
Hantson’s restructuring already was cutting more than $250 million per year in expenses, even as the company’s drug development efforts in its core franchise were continuing to meet new success with regulators and the marketplace.
The relocation to Boston was proffered by Hantson to allow the company to access that city’s biotech community to help develop new drug candidates. On December 7 the company announced a licensing deal with a down payment of $40 million [see Licensing] that would bolster the company’s core franchise’s ability to fend off competitors.
Early last month we wrote that the company needed to add more bioscience savvy executives to its Board, the Times reports that Elliot made that a demand as well at their meeting.
The company announced the addition of rare disease bio-science executive Francois Nader, M.D. on November 11, soon after the meeting with Elliott.
While the stock performance of the company has been very bad in the past few months, the company has received regulatory approvals for new uses of its franchise drug Soliris and has reported positive results on multiple clinical trials for its sales' challenged Kanuma drug and for its next generation Soliris replacement.