Danaher strikes again with Cepheid buy

Danaher strikes again with Cepheid buy

Source EP Vantage
Company DanaherCepheid 
Tags Comment, Company Strategy, Diagnostic, Acquisition, Free Content
Date September 06, 2016


And like that, the holiday season is over. With a shark’s instinct for wounded prey, Danaher  is to take out the poorly performing molecular diagnostics group  Cepheid  for $4bn in cash and debt. At $53 per share the offer is a 54% premium to  Cepheid ’s closing price on Friday, but the company’s shares have sunk badly over the past year: last September Cepheid ’s stock was worth just shy of the takeout price.

Danaher  clearly believes that it can wring more value out of the company than  Cepheid 's current management. But it is also a serial acquirer, keeping itself growing through deals big and small. Cepheid  is  Danaher ’s 13th purchase in five years, and its fourth worth over $1bn.

Vision

Despite a nearly doubling of revenues over the last five years Cepheid  has sunk ever further into losses - it reported a net loss of $48.5m in 2015 and as of December 31, 2015 it had an accumulated deficit of approximately $342.2m. Last year, it reported a 15% jump in its top line sales, to $539m.

Speaking on a conference call today, Danaher ’s chief executive Thomas Joyce said that his company would benefit from Cepheid ’s sales into small and medium -size hospitals and an increasing push into point-of-care testing. On the other side, Danaher  will be able to bring  Cepheid ’s products to new, high-growth markets such as China.

Danaher  also believes it can improve  Cepheid ’s “efficiency and profitability”. Cepheid  had already instituted an efficiency drive in the hope of, if not attaining profitability, at least staunching its losses.  Danaher  will build on this and reckons it can squeeze $100m in cost synergies and another $100m revenue synergies out of the acquisition over the next five years.

That is a lot of cuts. But Danaher  execs pointed to a prior acquisition as a potential model for how its incorporation of  Cepheid  might play out. In 2007 it bought Australian diagnostics group Vision Systems, and while this was a smaller deal – worth $520m – it had similar metrics and provides a “clear analogy” for  Cepheid , according to Mr Joyce. He said that as part of Danaher , Vision Systems is an $800m business with 20% operating margins.

“It was a smaller business but the same type of opportunity,” he said on the call.

US vs Europe

There appears to be some advantage in combining the companies’ respective molecular diagnostics instruments. Cepheid  is US-facing, and its GenXpert instrument has the largest installed base and most extensive test menu in the molecular diagnostics arena, running tests for viral infections such as HIV and hepatitis as well as hospital-acquired infections and tuberculosis, and also offering companion diagnostics for cancer drugs.  Cepheid  is “underpenetrated” in Europe,  Danaher  management believes.

Conversely, Danaher  has CE mark for its Veris system and is building sales in Europe, but US approval could still be some way off.

Danaher 's acquisitions of the past five years 
Date  Target  Target company focus  Value ($m) 
September 6, 2016  Cepheid   In vitro diagnostics  4,000 
August 31, 2015  Pall  Anaesthesia & respiratory; blood; drug delivery; endoscopy; general & plastic surgery; healthcare IT  13,800 
June 8, 2015  Bioptigen   Diagnostic imaging; healthcare IT; ophthalmics 
December 11, 2014  Nobel Biocare  Dental; diagnostic imaging; general & plastic surgery; orthopaedics  2,200 
December 4, 2014  Devicor Medical Products   Diagnostic imaging; general & plastic surgery 
June 27, 2014  DUX Dental   Dental; general hospital & healthcare supply 
May 2, 2014  Unfors RaySafe   Diagnostic imaging; healthcare IT; patient monitoring 
August 1, 2013  Flow Cytometry business of ReaMetrix India  In vitro diagnostics 
July 8, 2013  Kreatech Diagnostics   In vitro diagnostics 
April 9, 2013  HemoCue   In vitro diagnostics  300 
November 16, 2012  Aribex   Dental; Diagnostic imaging 
November 1, 2012  IRIS International  In vitro diagnostics  338 
June 30, 2011  Beckman Coulter   In vitro diagnostics  6,800 

Molecular diagnostics is a fast-growing segment, but that is a threat as much as a promise: once a company has an instrument it can be reasonably easy to add new tests and thus competition in this space is fierce.

Danaher  made great play of its ability to improve  Cepheid ’s efficiency. It will have much work to do if it is to drag it into profitability. Still, if it cannot manage to turn its new acquisition’s fortunes around, it can surely just move on to the next one.

 

Event – Celgene takes a deeper look in Crohn’s

Event – Celgene takes a deeper look in Crohn’s

Source EP Vantage
Company CelgeneNogra PharmaReceptos 
Tags Analysis, Company Strategy, USA, Trial Results, Phase II, Phase III, Immunology, Gastro-Intestinal, Free Content, Event - Open
Date September 07, 2016


Celgene  expects its inflammation and immunology drugs to become big growth drivers in the coming years. One of these, the Crohn’s disease candidate  mongersen , faces a data readout soon that could determine whether it was worth its hefty price tag – something that is still in doubt.

Celgene  acquired  mongersen , also known as GED-0301, for $710m up front from Nogra Pharma  on the back of impressive phase II data. But there is some doubt about whether the high response rate was a true reflection of the project's efficacy or was down to confounding factors. The new data, from a phase II endoscopy trial, could help answer these questions, and a positive outcome is far from assured.

The 63-patient study, requested by the FDA, will measure patients’ baseline disease using endoscopy, which visualises the digestive tract to assess the ulcers that are characteristic of Crohn’s. It will then evaluate whether their disease improves after 12 weeks' treatment versus placebo, with a primary endpoint of change in the SES-CD, the simple endoscopic score for Crohn's disease.

Company  Celgene  
Product  Mongersen /GED-0301 
Market cap  $82.0bn 
Product NPV  $6.3bn 
% of market cap  8% 
Event type  Phase II trial results 
Date  Q3 2016 

Celgene  expects data in the third quarter, and plans to present them at a medical meeting in the second half. A contender could be United European Gastroenterology Week, being held on October 15-19 in Vienna; the company announced its previous phase II results at the same meeting in 2014 (Celgene Crohn’s focus turns to phase III, October 20, 2014). 

That earlier study found remission rates of 55-65% with  mongersen  – above the 40-50% typically seen with anti-TNF biologicals.  Mongersen  also had a favourable safety profile and has the advantage of being oral, while TNF inhibitors are injected. This could help explain the bullish sellside consensus, which puts 2022  mongersen  sales at $1.2bn.

Subjective vs objective

Several issues with the original phase II trial prompted scepticism. One is that remission was measured using the Crohn’s disease activity index (CDAI), a subjective patient-reported measure. In addition, patients were not screened at baseline using endoscopy, and many are believed to have mild disease, if they had Crohn’s at all.

The latest study could address these issues by using a more objective endpoint and confirming disease pathology  at baseline.

Celgene  will be looking for around a 25% improvement in SES-CD score after 12 weeks. This could then reach 50% at week 24, and endoscopic remission after a year, said Scott  SmithCelgene ’s president of global inflammation and immunology, during the company’s second-quarter earnings call.

Leerink analysts, for one, are not convinced that data will live up to those from the previous trial – in July note they said they expected “tepid” results, forecasting remission rates of 20-30%. They pointed to a mixed biomarker response in the earlier study, writing: “It is difficult to conclude that mongersen  is indeed modulating the disease as designed.”

Celgene  has already forged ahead into phase III, but the primary endpoint of that study is the subjective CDAI. Mr  Smith  did not rule out amendments to the phase III trial.

Failure in the endoscopy study could call into more doubt the reliability of the subjective phase III endpoint and push mongersen , an antisense oligonucleotide , even further down the company’s list of priorities – it had already looked to be slipping down the pecking order  with  Celgene ’s acquisition of Receptos  and its multiple sclerosis/ulcerative colitis candidate  ozanimod  (Celgene strikes again with Receptos acquisition, July 15, 2015). 

An unexpected trial win, meanwhile, would pave the way for a new drug class – there are no other Smad7 -targeting products on the market or in late-stage development. After its setback with Revlimid  in July,  Celgene  could do with some good news.

Study  Details  Trial ID 
CD-001  Phase II endoscopy trial  NCT02367183 
CD-002  Phase III pivotal trial in Crohn’s disease  NCT02596893 

 

 

Interview – Immodulon rises from the ashes of SR Pharma

Interview – Immodulon rises from the ashes of SR Pharma

Source EP Vantage
Company Immodulon TherapeuticsCelgeneSilence Therapeutics 
Tags Analysis, Free Content, Trial Results, Phase II, Vaccine, Oncology, Private Placement, Licensing, Interview
Date September 08, 2016


Biotechs never die, they just get reincarnated with a new name and a slightly different focus. This is probably too simplistic a view of Immodulon, the private UK group that emerged from obscurity this week, but the debt it owes to SR Pharma is significant none the less.

SR crashed when its mycobacterium -based lead, SRL172 , flunked a major lung cancer study back in 2001. Undeterred, Immodulon is pursuing the same theme, and armed with phase II data and backed by one of SR’s founders it is taking an unorthodox route to raising funds for pivotal studies.

“We have a big philanthropic bent in the company – we’d love to become another Wellcome, that’s the plan. That’s why we’re sticking to philanthropic money,” Immodulon’s chairman, Dr Charles Akle, tells EP Vantage. He has raised £35m ($47m), mainly from private, high-net-worth individuals, and now wants to raise another £35m.

Rejection of the typical venture capital funding structure makes Immodulon unusual, as does targeting cancer with an inactivated bacterium. But then Immodulon is not your typical biotech.

And Dr Akle has a new bargaining chip: data from Image-1, a phase II pancreatic cancer trial of Immodulon’s lead, IMM-101 , have just been published in the British Journal of Cancer. The main purpose of the trial – safety – was demonstrated, but it is an efficacy hint that particularly excites Dr Akle.

More than a hint?

“It’s more than a hint," he states. "If the primary endpoint had been based on metastatic disease alone we’d be home and dry.”

Pancreatic cancer, a graveyard for biopharma development, is at least capable of giving a survival result quickly, and in all-comers median overall survival was 6.7 months for IMM-101  plus  gemcitabine  versus 5.6 months for  gemcitabine  alone.

This was not statistically significant, and moreover the hazard ratio's upper bound exceeded 1.0. But in metastatic patients, a prespecified subgroup, the 2.6-month benefit hit p=0.01.

IMM-101  is a naturally occurring, heat-killed bacterium,  Mycobacterium  obuense, which Dr Akle says acts as an immune system modulator: “Firstly it induces in the immune system a tuning effect; it also acts as an immunoadjuvant ... functioning heavily on both innate and adaptive  immunity.”

He also makes much of its effect on multiple pathways, in contrast to single-target strategies, which cancers usually end up evading. “Think of the London Underground,” he argues. “If you knock out Oxford Circus you’ll cause chaos for a week, but very quickly people will go around [it].”

It is true that the importance of bacteria in oncology is only now starting to be appreciated – witness the interest generated by studies of the gut microbiome. But does it not all sound a little unscientific?

Dr Akle reckons enough is known for regulators to be satisfied. “We know which pattern recognition receptors we trigger in the initial immune response ... we know about a trigger on gamma-delta T cells, we know about triggers that turn T cells into cytotoxic T lymphocytes .”

Déjà vu

Seasoned UK biotech watchers who remember SR Pharma might at this point feel a sense of déjà vu; SR had tried and failed with the same approach, its lead, SRL172  flunking studies  first in tuberculosis and  then in lung cancer.

SRL172  was based on a closely related bacterium,  vaccae , and here too Dr Akle sees a silver lining: “Nobody understood at the time the difference between a vaccine and an immunomodulator. If you look at patients [in the lung cancer trial] who had five or more doses they actually did far better; the results were astounding.”

After SRL172  failed SR switched focus to RNAi and was renamed Silence Therapeutics. One of its founders, Dr John  Stanford , founded Immodulon together with Dr Akle, focusing on IMM-101  – a separate mycobacterial idea of Dr  Stanford 's. Initial money was donated by one of Dr Akle’s patients.

Immodulon also now owns SRL172 , and is developing it as IMM -201 for tuberculosis prevention in Aids patients in sub-Saharan Africa – on a philanthropic basis, of course.

Caveat emptor

Yet despite the optimism there are caveats about the Image-1 data, most obviously the fact that its design predated two now established first-line options, Folfirinox and Abraxane .

It is possible therefore that IMM-101  numerically beating  gemcitabine  does not reflect the real world. Dr Akle disagrees, pointing to Folfirinox and  Abraxane  toxicity, as well as the fact that  Abraxane  is unavailable or not reimbursed in many jurisdictions.

Another problem is that after IMM-101  treatment some patients in Image-1 went on to receive  Abraxane . While this would not have affected the one-year statistical analysis it could have helped one patient survive three years.

Phase III will aim to recruit 350 metastatic patients in Europe and the US, similarly adding IMM-101  on top of  gemcitabine . Combinations could be a future aim, since "gemcitabine  plus  IMM-101  is very good, but we can improve on it dramatically”.

First the money has to come in, neither from a venture capitalist – “the valuation would be intolerable” – nor flotation; “We’re not at IPO, nor do we particularly want to go for IPO,” says Dr Akle.

How about a pharma licensing deal? “Absolutely. We’ll sup  with the devil, even if we have to use a long spoon.”

Selected IMM-101  studies 
Indication  Trial ID  Note 
Pancreatic cancer  Image-1, NCT01303172  110 pts, IMM-101  on top of  gemcitabine . 2.6mth OS benefit in metastatic subgroup. 
Melanoma  NCT01308762  18 end-stage pts. Possible publication at SITC conference in Nov 2016. 
Melanoma  NCT01559818  Named-pt, long-term extension; 6/18 pts alive after 6 years. 
Colorectal cancer  NCT01539824  18-pts, short study aiming to demonstrate antigen release.  

 

 

Snippet roundup: Gilead’s Parp interest, Futura and Retrophin get data boost

Snippet roundup: Gilead’s Parp interest, Futura and Retrophin get data boost

Source EP Vantage
Company Gilead SciencesAbbVieAllerganAngion BiomedicaAstraZenecaBeiGeneBioMarin PharmaceuticalClovis OncologyEisaiEli LillyFortress BiotechFutura MedicalGlaxoSmithKlineIMPACT TherapeuticsJeil PharmaceuticalJiangsu Hengrui MedicineJohnson & JohnsonKanion PharmaceuticalMedivationMedtronicMerck & CoMitsubishi Tanabe PharmaNerviano Medical SciencesNewgenpharmPenumbraPfizerRetrophinRetroSense TherapeuticsSSLStrykerTESAROTeva Pharmaceutical Industries 
Tags Comment, Trial Results, USA, Full Approval, Medtech, Gene Therapy, Sensory Organs, Oncology, Genito-Urinary, Central Nervous System, Cardiovascular, Acquisition, Free Content
Date September 09, 2016


Welcome to your weekly roundup of EP Vantage’s snippets – short takes on smaller news items.

This week, September 5-9, 2016, we had thoughts on the following: Parp for the course for Gilead ?; Futura shoots up with erectile dysfunction gel success; Retrophin ’s Duet hits a flat note; if Allergan  buys into gene therapy, is gene therapy mainstream?; and Trevo approval is a masterstroke for  Stryker .

These snippets were previously published daily via twitter.

Parp for the course for Gilead ?

September 9, 2016

It is looking increasingly likely that Gilead  had tried and failed to buy  Medivation , which as well as having the blockbuster Xtandi  boasts a phase III Parp inhibitor,  talazoparib , but which ultimately fell for $14bn to Pfizer . And judging by comments at the Wells Fargo conference yesterday Gilead  is still on the lookout for a Parp inhibitor. “We would absolutely be willing to take the risk and enter [the Parp] area,” said  Gilead ’s chief scientific officer, Norbert Bischofberger, as long as the chemistry, biology and toxicology were clear, and the asset was “meaningfully differentiated”. Two late-stage Parp developers, Tesaro  and Clovis, spiked on the statement, closing yesterday up 7% and 15%  respectively . Clovis was additionally helped by confirmation from the US FDA that there would be no advisory panel meeting to consider its rucaparib  filing – presumably because the mechanism of action is known and  AstraZeneca ’s Lynparza  is already on the market.

Futura shoots up with erectile dysfunction gel success

September 8, 2016

It’s been a long time coming but Futura Medical  is finally firming up its erectile dysfunction strategy with a phase III win for its  MED2002  gel. The data could support approval of the gel, also known as Eroxon – which seems to get to work faster than existing oral drugs like Lilly’s  Cialis  and  Pfizer ’s Viagra . In the MED2002  study, 82% of men with mild ED had onset of action within 10 minutes and 54% within five. Existing ED pills can take around an hour to take effect. The  glyceryl trinitrate  gel also appears to be safe in ED patients taking other nitrate drugs, which are commonly used in angina and cannot be taken alongside the likes of  ViagraMED2002  has been in late-stage studies since 2006 and along the way lost  GlaxoSmithKline  and  SSL  as partners. Although Futura will be celebrating a long-fought victory, it faces a battle against generic  PDE5 inhibitors , which are set to make the branded ED market increasingly flaccid in the coming years. Futura claims that the overall sector is worth around $5bn.

Retrophin ’s Duet hits a flat note

September 7, 2016

Topline data from the phase II Duet study of Retrophin ’s sparsentan  in focal segmental glomerulosclerosis are in and looking good – good enough to drive  Retrophin ’s stock up 40% so far today. The primary endpoint, reduction in proteinuria  compared with  irbesartan  at eight weeks, was met when all three doses of  sparsentan  were pooled. However, none of the doses individually showed a significant improvement. Investors seeking clarity on whether there was a dose response, or whether the data would be good enough for an early FDA filing, were none the wiser after a conference call earlier. Management said they had hoped to see a 50% improvement in  proteinuria  and in fact the results were substantially better than that, and insisted that  Retrophin  had the data to make a case for advanced filing. The lack of therapy options for this rare disease might improve its chances with the regulator.

If Allergan  buys into gene therapy, is gene therapy mainstream?

September 6, 2016

Allergan ’s $60m ante into the gene therapy game through a takeout of RetroSense Therapeutics  will take the speciality pharma group out of its comfort zone, but at least it is familiar with the therapy area. Michigan-based RetroSense has been working on restoring vision in patients with  retinitis  pigmentosa  and dry age-related macular degeneration, and  ophthalmological  drugs are a focus of  Allergan ’s. The lead project, RST-001 , employs the gene channelrhodopsin-2 to regenerate photoreceptors in retinal cells. In August the group completed a low-dose cohort  in  retinitis  pigmentosa  patients in which no inflammation or ocular adverse events were seen and biological activity was confirmed – a mid-dose  cohort  was planned. For  Allergan  this is a big technological leap forward: Its ophthalmology portfolio consists of steroids, immunomodulators and anti-inflammatories.

Trevo approval is a masterstroke for Stryker

September 5, 2016

Stryker  has reiterated its position as the leader in the niche space of clot retrieval products for ischaemic stroke with the  de novo FDA clearance of two Trevo devices. The transcatheter devices are indicated for the retrieval of a blood clot in the brain to reduce paralysis, speech difficulties and other stroke disabilities. The Trevo products were previously cleared in the US for the treatment of patients unable to receive or unresponsive to tissue  plasminogen  activator (t-PA), and may now be used along with t-PA, reaching a broader group of patients.  Stryker  came by the devices through its $135m 2011 acquisition of  Concentric Medical , and now has more such products on the US market than the other two players combined.

 

 

Upcoming events – Migraine data for Amgen while Neurocrine looks to Tourette’s

Upcoming events – Migraine data for Amgen while Neurocrine looks to Tourette’s

Source EP Vantage
Company AmgenNeurocrine Biosciences 
Tags Analysis, Central Nervous System, Phase II, Phase III, Monoclonal Antibody, Free Content, Event - Open
Date September 09, 2016


Welcome to your weekly digest of approaching regulatory and clinical readouts. Phase III data are expected in the fourth quarter for Amgen ’s CGRP -targeting antibody erenumab  in episodic migraine, and with a marginally positive result already accomplished in the chronic form of the disease,  Amgen  needs to move fast to stay ahead of the competition.

And Neurocrine is expecting readouts from phase II trials of valbenazine  in Tourette’s syndrome. While this would add another string to  valbenazine ’s bow the main focus remains on its use in tardive  dyskinesia , where the big forecasts lie, and which could determine whether a partner will hop aboard.

Migraine

Amgen ’s erenumab , also known as AMG 334 , is in two phase III episodic migraine trials called Strive and Arise in 955 and 577 patients, respectively . Patients have four to 15 migraine days per month and fewer than 15 headache days per month.

Strive is testing once-monthly 70mg and 140mg subcutaneous erenumab  doses versus placebo. The Arise trial is again placebo controlled, but tests one dose of  erenumab  followed by an open-label phase. The primary outcome for both trials is change in mean monthly migraine days. Secondary measures include the proportion of subjects with at least 50% reduction from baseline in monthly migraine days.

Phase II results in the chronic form showed a small benefit, with the project cutting the number of monthly migraine days to about 11.4, just 2.4 days better than placebo. A high placebo response is not unusual in migraine trials, and Amgen  and its ex-US partner  Novartis  said the results were statistically significant, but at the time did not reveal the level of significance.

Although cross-study comparisons cannot really be relied on, a similar benefit has been reported from competitors AlderTeva  and Lilly  (Marginal migraine benefit puts Amgen and Novartis in pole position, 9 June, 2016).

Further data will be presented at the European Headache and Migraine Trust International Congress in Glasgow, UK, on September 15-18. The company has previously said it would file all the available chronic and episodic data in one package.

2022 worldwide sales of erenumab  are forecast to reach $475m, according to sellside consensus from  EvaluatePharma. With analysts pegging Teva ’s CGRP  inhibitor to be the big seller by 2022  Amgen  needs to play on its first-mover advantage.

CGRP  inhibitors in phase III development 
Project  Company  Approval expected  2022e sales ($m) 
TEV-48125   Teva   2018  1,069 
ALD403   Alder  Biopharmaceuticals   2018  993 
Galcanezumab   Eli Lilly   2017  484 
Erenumab /AMG  334  Amgen /Novartis  2017  475 

Tourette’s

Neurocrine’s valbenazine tosylate , previously called NBI-98854 , is now branded Ingrezza. Two phase II placebo-controlled trials, T-Forward and T-Force Green, are under way respectively  in adults and children with Tourette’s syndrome.

The studies are recruiting up to 90 subjects each, and data are expected before the end of the year. Two doses, given once daily for six weeks in the paediatric trial or eight weeks in the adult study, are being tested versus placebo. The primary endpoint is the severity of tic symptoms assessed by a global scale.

An open-label study for those completing the two trials has also been launched. Ingrezza is a VMAT2  inhibitor also in phase III for  tardive  dyskinesia , its more valuable indication. It is solely owned by Neurocrine, and has some hefty forecasts attached to it with 2022 sales expected to reach $1.3bn, according to EvaluatePharmaconsensus.

74% of 2022 forecasts are assigned to its dyskinesia  indication, which was recently filed with the FDA. With a breakthrough therapy designation attached approval could come as early as the second quarter of next year, and potential buyers will be watching with interest.

Project  Study  Trial ID 
Erenumab   Strive
Arise 
NCT02456740
NCT02483585 
Ingrezza  Adult trial
Paediatric
Open-label 
NCT02581865
NCT02679079
NCT02879578