Screen Shot 2017 11 07 at 9.48.38 AMNEW HAVEN: Achillion Pharmaceuticals, Inc. [Nasdaq:ACHN]  announced that the U.S. Food and Drug Administration (FDA) has granted orphan drug designation to ACH-4471 for the treatment of paroxysmal nocturnal hemoglobinuria [PNH]. The European Medicines Agency (EMA) Committee for Orphan Medicinal Products (COMP) issued a positive opinion on ACH-4471 for orphan status in the European Union (EU) for the treatment of PNH, as well.

The orphan drug news comes on the heels of a decision by Johnson & Johnson [NYSE: JNJ] to discontinue a development partnership with Achillion for its Hepatitis C Drugs. The outcome of clinical trials for the Achillion drugs in combination with J&J proved effective in curing certain varieties of Hep C. The Hep C market has existing drugs that also cure the disease.

Achillion stock soared to $15.90 in 2015 on the status of the treatment and prior to news of the collaboration in 2015 which brought more than $250 million in cash into the company. Currently the company has a market capitalization of $586 million and  a $4 share price. The company lost just under $20 million in the third quarter but still has more than $350 million in cash and securities.

25thAnniversary logoBy Mitchell Young

Analysis and Opinion:

NEW HAVEN: Alexion’s [NYSE: ALXN] New CEO Ludwig Hantson may hope to exit one college town for another [Boston], but investors appear to be giving Hantson and his board of directors a little schooling in the ways of the stock market.

On September 14 two days after Hantson, announced the company would be cutting employment by 25% and relocating its headquarters to Boston, the company stock traded as high as $149 per share.

Along with the announcement, the CEO provided what some investors may have seen as especially negative comments about the company’s approach and its prospects.

Forty-five days later the stock has dropped like a stone, trading at just above $115 per share on November 1, a loss of more than $7 billion in value.  

The plan proposed by Hantson was presented as a way to free up $100 million a year for new research, the question is –  can that really occur in hyper-inflating Boston, or is it simply a talking point and a way to show investors a new plan and direction for the company.  

If it is, at least for now, it is not selling.

In early October Sema 4 a fast growing bioscience genomics’ company, spun out of  the Mount Sinai Health System based in New York, decided to expand in Stamford, citing the growing expense of the New York market. In an unrelated move, SEMA 4 and Alexion agreed to a strategic partnership last August to enhance tools for drug discovery.

The stock price drop comes in spite of new uses for Alexion’s flagship drug Soliris being approved by regulators in the US and Europe and an increase in sales and profits for the most recent quarter.

Meanwhile, the stock market has been making new highs and analysts following the company are still recommending purchase with price targets as high as $170 per share. Hantson himself proved he was bullish on the company when he bought $1.16 million of stock in June at $116 per share, his investment grew to as much as $1.5 million before his recent announcement.

As part of his reorganization explanation, Hantson questioned the future prospects of the company, suggesting that the move to Boston was necessary to acquire new building blocks for the company well beyond its current portfolio. Research for the existing drugs will stay in New Haven, for now.

Expanding the company’s portfolio can take lots of time however, will be expensive and as previous experience demonstrates, risky.  Hantson's task will be made a lot more difficult if the stock price doesn’t recover to provide acquisition currency.

Perhaps the leading reason Hantson is the CEO, wasn’t an accounting kerfuffle as is generally assumed, but one of Alexion’s previous attempts to expand its portfolio and to become more than a one hit wonder.

The company under then CEO David Hallal and then board chair and founder Leonard Bell, acquired the Lexington, Mass. based Synageva and its lead drug Kanuma for $8.4 billion in 2015.

“Synageva is an ideal strategic and operational fit for Alexion as we strengthen our global leadership in what we know well and do well,” said Hallal, who went on to promise $1 billion in sales from the drug.

Alexion expanded research on the drug and guided the drug through FDA approvals and began marketing it in late 2015.  Those efforts have largely failed to date, with expected sales under $100 million in 2017.

The company took an $85 million write off last February [2017] and stopped researching another drug acquired with Synageva. Hantson, posed a potential write-off in an investor’s conference for Kanuma as well. Alexions hasn't thrown in the towel yet however, the company released positive results on November 3, from a Phase 2 trial showing survivability for infants that would have otherwise died from the condition, lysosomal acid lipase deficiency.

Stock investors did not appear to respond to the good news with an end to the selling pressure..

Whether Alexion’s new team can do better in building or acquiring a pipeline is nothing more than speculation. Hantson is an experienced bioscience executive, but licensing, acquisitions and drug development remains a strategy that fails more often than it succeeds.

Hantson most recent CEO experience prior to joining Alexion was at Baxter International  [Nasdaq: BAX].where he had a stint running a small biomedical division [$50 million] and was then put in charge of Baxalta, a $6 billion Baxter spin-off.  Within less than a year Baxter which retained just under 20% of the company engineered a $32 billion sale.

Whatever vision Hantson and his team had about building up Baxalta went out the door, along with him and presumably a good bonus.

Four of Baxalta’s executives now form the core of Alexion’s management, including its EVP and Director of Research John Orloff, who was Chief Science Officer at Baxalta.

Orloff a Dartmouth grad likes Boston, he was at a small biotech tech start up in Cambridge before Hantson hired him for Alexion.

Orloff moved Baxalta’s research to Cambridge from Indiana, saying at the time, "we looked at over 30 locations, we focused on Cambridge because it's the heart of the biotech community."

Baxalta like Alexion was a rare disease company and apparently, that was good enough for Alexion’s board which itself had a limited background in both bioscience and Alexion.  While the company is celebrating twenty-five-years, only three directors had more than three years with the company, and only three had any real bioscience background, when they hired Hantson.

Perhaps more to the point, the Board of Directors that approved the $8.4 billion troubled acquisition is essentially the same group “guiding” the company today.  David Brennan the current Chairman and the director with the most pharma experience, was on board at the time.

Brennan was made interim CEO after the well publicized accounting problem resulted in the resignation of Hallal. Brennan had been CEO of pharma giant AstraZeneca for six years when he was forced out [quit] of the company by disgruntled investors in 2014.

The move of the headquarters and the non-Soliris research to Boston has of course caused concern and anger in New Haven and Connecticut, the common refrain, “they just want to live in Boston.” The state of Connecticut is saying more – demanding $20 million back from the company that it provided to facilitate its headquarters’ move to downtown. If they agree, writing the check is no biggie for the company, even with the stock drop, it is still worth more than $25 billion. Losing politically connected friends in Connecticut where it is a “big fish” however, may not be such a good deal for the company. Alexion is perennially under attack over pricing and its practices to identify and acquire new patients

And Boston may not be Nirvana anymore either. One very successful Connecticut bio-science tech executive commenting on the announcement told us that many of his colleagues in Boston think the bloom is off the rose in Beantown. Expenses to operate in the region, like New York are great and accelerating and accessing the software talent needed for a modern biotech has become highly competitive.

GE’s Jeff Immelt and his board presented a similar vision about relocating GE headquarters to Boston, guiding the company from its peaceful and  low coast campus to building a new high tech headquarters in Boston.

Immelt sold his country estate, bought the Back Bay townhouse and soon a litany of GE problems came to light. The same board that approved all his big plans unceremoniously showed him the door. His reputation has been so sullied he didn’t get a job running the “taxi” company, Uber. The first move by new  CEO John Flannery was slowing down the move and buildout of the super expensive Boston headquarters.

The Boston region is certainly one of the leading edge places for drug development in the world, but in the global picture, the industry sees the Boston to Philadelphia corridor as, essentially one place “Pharma Country.”

For now the re-organization most needed at Alexion is a socially aware, bioscience experienced and less compliant board.of directors.

By Mitchell Young

 

 semaSTAMFORD: Sema4, a genomic testing company with operations in Branford and Stamford and Connecticut’s newest expanding biotech company announced what could be a major breakthrough in the treatment of brain cancer.

Unlike many of the state’s bioscience company Sema4 doesn’t have its roots at Yale, UConn, or a big pharma, instead it was spin out of Mount Sinai Health System in New York, MSHS remains the sole investor. SEMA4 has announced it will seek additional investment for its data services divison in the future.


The company opened a 28,000 square foot office at 333 Ludlow Street,in Stamford in September where it is employing nearly 75 people. Sema4 also has a laboratory in Branford where it employs approximately 50 people as well, the rest of its nearly 400 employees are based in Manhattan..

Costs were one factor that had the company move to Stamford, according to Eric Schadt founder and CEO, told the Stamford Advocate,

“We were born and raised at Mount Sinai, and what we were doing got pretty successful and grew to a pretty good size, to a point where we felt like it’d be better to move that outside, expanding dramatically in New York City is very difficult and expensive, so Stamford topped the list as being in this corridor.”

Sema4 provides genetic, cancer and pre-pregnancy testing but its announcement this week is making headlines. The company has found a “biomarker” that it says is a brain cancer breakthrough.

The effort included researchers at Mount Sinai, Sema4, Colorado State University and the Fred Hutchinson Cancer Center in Seattle.

According to the company’s study published October 15 in Cancer Research,  the biomarker is ”indicative of a patient's prognosis and likely response to specific therapies.”

The company’s release says, that up to now identifying the molecular makeup of glioblastoma tumors [the type that Senator John McCain is inflicted with] subtypes that would guide treatment have been largely unsuccessful.

Mount Sinai and Sema4, scientists say they have developed an “innovative computational method to classify tumors based on their dependency on a molecule called BUB1B that some glioblastomas need to survive.”

The research uncovered new tumor subtypes and found that BUB1B-sensitive tumors had significantly worse prognoses. The good news was that the tumors were more likely to respond to many drugs already in clinical use.

"It was truly remarkable to see our predictive model yield a new set of molecular subtypes, which appear to be far more indicative of prognosis and therapeutic response than existing subtypes," noted Jun Zhu, head of Data Sciences at Sema4 and professor of Genetics and Genomic Sciences at Mount Sinai, and senior author of the study. "For patients who receive the grim diagnosis of glioblastoma, this signals new hope for tailored treatment more likely to be effective against their cancer.”

Screen Shot 2017 10 13 at 10.43.07 AMVancouver, British Columbia & Guilford, Bioasis Technologies, Inc . [OTCQB:BIOAF; TSX.V:BTI], a biopharmaceutical company  announced that it has traveled more than 3,000 miles from its home base to open a U.S. office on Water Street in Guilford, to house five local employees.

Bioasis focuses on the “delivery of therapeutics across the blood-brain barrier (BBB) and into the central nervous system for the treatment of neurological diseases and disorders.”

“Establishing a strong presence in the U.S. is an important next step in the evolution of Bioasis,” said Mark Day, Ph.D., president and chief executive officer.”

Day has gotten the message from the region’s boosters saying, “the greater New Haven area is in close proximity to both Boston and New York. The new U.S. office provides a physical location that is at the cross roads of pharma, biotech and academia. It will increase the exposure of our company and provide access to a broad pool of talent and strategic resources.”

Portrait KrystalJ

Chairman of Advisory Board, Yales Dr. John H. Krystal M.D.

 

The small public biotech with 12 employees has a current market cap of approximately $35 million and has been presenting at several investor conferences recently.

The company established a scientific advisory board in September to help it develop technology licensed from the University of British Columbia and apparently it formed the link to the local presence.

Chairman of the advisory panel is Professor John H. Krystal, M.D., the Robert L. McNeil, Jr. Professor of Translational Research at Yale, chair of the Department of Psychiatry and professor of neuroscience at the Yale University School of Medicine and Chief of Psychiatry at Yale-New Haven Hospital.

According to his bio, Krystal has published extensively on the neurobiology and treatment of schizophrenia, alcoholism, post-traumatic stress disorder (PTSD) and depression. The company  says, “Krystal led the discovery of the rapid antidepressant effects of Ketamine in humans.”

Dr. Krystal is the director of the National Alcohol Abuse and Alcoholism Advisory Council Center for the Translational Neuroscience of Alcoholism and the Clinical Neuroscience Division of the VA National Center for PTSD.

 

biohavenBy Mitchell Young

NEW HAVEN: Connecticut’s newest bio-tech star just ran full force into a brick wall.

Biohaven, [NYSE: BHVN] went public in May at $17 raising $168 million in its IPO. Three months later the stock hit $37, and a $1 billion dollar plus valuation in part on expectations of positive results from an Phase 3clinical trial and its strategy of licensing existing drugs in need of further clinical trials and development

Biohaven unique business plan has it licensing rights to drugs from a variety of sources, including Yale, Rutgers, Bristol Myers, AstraZeneca, Mass General Hosptial, creating hopefully a quick route to a diverse pipeline in an industry where a single drug can take a decade or more to develop.

Unfortunately the first study our of the gate, a Phase II/III study of trigriluzole, which was given Fast Track status from the FDA showed that that it didn’t work as well as the placebo in treating spinocerebellar ataxia, a rare genetically generated disease that effects the brains ability to properly control body movements.

The company’s stock initially dropped 28% on the news, but recovered somewhat and still remains at double it’s IPO price.

In September the company announced that it was going to test the drug for Alzheiemers with thes Alzheimer's Disease Cooperative Study [ADCS, an Alzheimer's disease (AD) clinical trials research consortium that receives major support from the U.S. National Institute on Aging (NIA), a part of the US National Institutes of Health.

Biohaven which recently announced in late September it was establishing its headquarters at the former Liberty Bank building on Church Street. Along with the negative results the company said that it has more than $200 million in cash in its coffers, to fund its immediate operations and trials.

Vlad Coric
Biohaven CEO:" Disapointed in the results."

Biohaven CEO Vlad Coric commented on the results saying, “we are obviously disappointed that today’s topline clinical results do not support continued development of trigriluzole as a symptomatic agent for patients with SCA, a devastating neurologic disorder for which novel treatments are urgently needed. This was the largest SCA clinical trial performed to date and important knowledge has been generated — we plan to share our data with the ataxia clinical leaders and the National Ataxia Foundation to help refine clinical trials in this therapeutic area.”

215churchstreet2By Mitchell Young

NEW HAVEN: A newly public Bio-tech holding company Biohaven [ NYSE: BHVN] has chosen a high profile former bank building in the city’s Central Business District for its new headquarters. The moves comes as the company is reporting amazing results in the stock market amid positive announcements in its drug development efforts.

Biohaven is organized as a biotech holding and development company, and has raised funds to invest in New Haven biotech Kleo Pharmaceuticals. The company also is organized to conduct clinical trials and develop drugs it has purchased the rights for from a variety of organizations and companies including; Bristol-Myers Squibb Company, AstraZeneca AB, Yale University, Catalent, RutgersALS Biopharma LLC and Massachusetts General Hospital.

Biohaven went public this past May raising $168 million at approximately $17 per share and the stock has taken a rocket ride to $37 a share in just three months. Its current market value of $1.3 billion, makes it the second most valuable biotech in the state.

The 11,500-square foot free standing building is at 215 Church Street, next to the Quinnipiac Club was previously headquarters for the Bank of New Haven, the Bank of Southern Connecticut and most recently a branch of Liberty Bank.

The building is owned by Netz USA LLC a U.S. subsidiary of Netz Group Ltd., a publicly traded Israeli  company. Nezt, has more than $100 million of real estate investments in the US Capitalize 360 LLC run by Frank Micali is its contracted asset management firm, that negotiated the lease. .

Micali is a long-term Connecticut realtor with deep roots in New Haven’s CBD, including a long-term stint at the C.A. White company and in the commercial leasing of 900 Chapel Street.

Micali said “this is a strategic site for Biohaven’s headquarters which will allow it to take full advantage of the area’s talent and intellectual resources including Yale University, its labs and research, Yale New Haven  and the many biotech firms established in New Haven.”

Biohaven’s stock has grown steadily from its IPO, but took off on the release of information on August 14, about its drug development activities

The company said that it’s clinical trials for a treatment of migraine headaches was moving into a Phase 3 clinical trial, another drug was given Fast Track status by the FDA and was expecting some Phase 2/3 results before the end of the year. A third drug for BHV-5000 to treat Rett syndrome received Orphan Drug Designation from the FDA as well.

melinta therapeutics largeNEW HAVEN: Melinta Therapeutics is merging with Cempra, Inc. [Nasdaq: CEMP],of Chapel Hill, NC. a clinical-stage pharmaceutical company with a $161 milion market value, also focused on serious bacterial infections. The new company will be named Melinta, and current Melinta shareholders will receive 52% of the stock of the combined companies, the merger release said that a new CEO will be named, but did not indicate who. 

The combined companies will have an expanded drug pipeline and the $175 million in cash on Cempra’s balance sheet and a $90 million debt and equity investment will be available to develop Melinta’s recently FDA approved drug.