NEW HAVEN: Alexion Pharmaceuticals, Inc. [NASDAQ: ALXN] is adding some bioscience chops to its board appointing Francois Nader, M.D.
The company says “Nader is an accomplished leader in the biopharmaceutical industry with a proven track record of building and transforming companies, launching rare disease therapies, and creating significant shareholder value.”
Just last week in an editorial recognizing the gaps in Alexion’s board, Business New Haven, Conntact.com called for an expansion of bioscience experience on the board, as the company seeks to create a new drug pipeline, dependent on licensing and or acquisitions.
|Melinta new CEO Daniel Wechsler was appointed in late October to helm the newly public company.|
NEW HAVEN: Melinta Therapeutics Inc. [NASDAQ:MLNT], is now a public company it began trading on the Nasdaq on November 6 and the stock priced opened at $12.80 per share, with a company valuation of approximately $130 million. The company went public in a merger with the previous public Cempra of Chapel Hill, NC, also a bioscience company focusing on antibiotics.
Melinta is a “commercial-stage company” developing “novel" antibiotics to treat serious bacterial infections. Dan Wechsler was appointed as Melinta’s new president and chief executive officer on October 31. The company says the company’s executive leadership team is comprised of seven executives from Melinta and two executives from Cempra.
|John Houston former Chief Science Officer was appointed CEO in September as the company prepares to head into a clinical trial.|
NEW HAVEN: Arvinas LLC, founded by Chief Scientific Officer Yale bioscience researcher and Business New Haven Health Care Hero Dr. Craig Crews announced the selection of its first candidate for clinical development as a novel treatment for metastatic castration-resistant prostate cancer (mCRPC).
ARV-110 is an orally bioavailable small molecule PROTAC (PROteolysis TArgeting Chimera) designed to target and induce the degradation of the androgen receptor (AR) protein, which plays a prominent role in the development of mCRPC.
John Houston, Ph.D., President and Chief Executive Officer of Arvinas, said "we believe that our first clinical candidate from our protein degradation platform will offer a novel therapeutic modality to patients with mCRPC, adding “we are on track to initiate a clinical study of the AR PROTAC in mCRPC patients in the second half of 2018."
According to the company “ARV-110 works by hijacking the cancer cell's natural and selective process for controlling protein levels to efficiently target androgen receptor proteins for degradation and elimination. In contrast to the traditional competitive process of target inhibition, degradation by PROTACs is iterative and can overcome increases in endogenous ligand and target expression, or mutations in the target.”
NEW 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.
By 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  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
STAMFORD: 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.”
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