Greetings, readers. This is Sy with your daily roundup.
Valeant Pharmaceuticals can’t seem to catch a break. The troubled drug maker’s stock hit a 52-week low in Wednesday trading, falling into the single digits. That’s a stunning fall from grace for a firm that was trading at more than $200 per share just two years ago and puts Valeant’s market value at about $3.2 billion—a more than 95% cut since April 2015.
The latest investor revolt appears to center on news that Valeant didn’t get the kinds of bids that it wanted for one of its pharmaceutical units, iNova, which sells and distributes over-the-counter and prescription medications in Australia, New Zealand, and a few other countries outside the U.S. The drug maker bought the company for $625 million upfront in late 2011—and it’s been a pretty good performer, bringing in about $100 million in annual sales.
But as Valeant continues to struggle with regulatory probes, dour finances, and a variety of lawsuits (including a recent one launched by its own former CEO Michael Pearson), it’s trying desperately to raise some much needed cash. So the firm decided to start looking for suitors for iNova last fall, seeking more than $1 billion for the unit.
So far, the bids have come up short, according to the Australian Business Review, with various private parties offering around $900 million. And that adds to a trend that’s wreaking havoc on Valeant’s turnaround strategy, which will require the firm to get a big cash jolt from somewhere or other.
“To us, [the iNova bids are] another disappointment in what was promised to be $8 billion worth of asset sales that so far has only been approximately $2 billion,” writes Wells Fargo’s David Maris in a note.
Read on for the day’s other news.
Amino raises $25 million for its patient-doctor pairing platform. Digital health upstart Amino has raised $25 million in Series C venture funding from groups such as Highland Capital, Accel, Aspect Ventures, and Northwestern Mutual Future Ventures. The company’s tech allows users to suss out doctors who are best for treating their various conditions and accommodating their financial situations through a transparency tool launched last summer. As Amino CEO David Vivero told me back then, the firm’s platform is “based on insurance claims data from both public and private players,” allowing for a more accurate depiction of how much medical care costs. The company is ramping up its services by striking alliances with health insurers and employer and medical provider groups. (TechCrunch)
Takeda makes some serious moves in dengue, microbiome spaces. Japan’s Takeda Pharmaceuticals, the largest drug maker in that country, has been on a mission to reinvent itself and become a truly global player with a large footprint in the U.S. by focusing on acquisitions and building out its drug pipeline, including in the bowel disorder and other spaces. To that end, the firm made a pair of notable announcements Wednesday: 1) a global collaboration with privately-held biotech Finch Therapeutics, which is among the companies working on “microbiome”-based treatments (therapies involving the various organisms that reside within the human body); and 2) the enrollment of more than 20,000 children in a massive late-stage clinical trial for an experimental dengue fever vaccine. The first move sets Takeda up to work on development of FIN-524, a preclinical therapy that contains cultured bacteria strains and which could theoretically be used to treat gut diseases. The second is a far more advanced process and could eventually set Takeda up to compete with Sanofi, which has the only approved dengue vaccine in the world approved in more than 10 countries. That drug, Dengvaxia, has been on the market for a couple of years now, and Takeda says it won’t have data from the phase 3 trial until 2018. But depending on the study results, Sanofi’s treatment could be in for a rival.
In crisis mode, Acorda plans to layoff 20% of its workforce. Acorda Therapeutics is taking a chainsaw to its workforce after a string of devastating patent defeats for its multiple sclerosis medication Ampyra. The biotech plans to shed 20% of its nearly 600 employees in order to secure yearly cost-savings of about $21 million—money which can then be used to double down on late-stage clinical trials for its experimental Parkinson’s drug. The layoffs come in the wake of a federal judge’s decision last week to strike down Ampyra patents, which is a big victory for rivals like Mylan and Roxane Laboratories with cheaper generic copycats of the treatment. (Reuters)
THE BIG PICTURE
Trump FDA pick stares down the Senate HELP Committee. At 10 A.M. this morning, Trump FDA Commissioner nominee Dr. Scott Gottlieb began testifying before the Senate Health, Education, Labor and Pensions (HELP) Committee. The hearing wrapped up about a half hour ago (you can watch it on C-SPAN), but Senators skeptical of his nomination questioned Gottlieb’s close financial ties to the health care and biopharma industries, which have paid him millions in speaking and consulting fees over the years. Gottlieb has said he will recuse himself from any decisions involving the 20-odd companies with which he has a financial relationship if confirmed. Other pain points included drug pricing and how approving more generics may affect costs (Gottlieb parried that question by noting the FDA doesn’t have the authority to negotiate prices or consider pricing when approving a drug) and his alleged softness on opioid drug makers due the aforementioned financial ties and pro-industry ideology (the nominee noted that he considers opioid addiction and overdoses a public health crisis “on the order of Ebola and Zika”). Drug makers cheered Trump’s nomination of Gottlieb, who the industry views as someone who will remove regulatory red tape at the FDA without making drastic, potentially harmful changes to the agency. (C-SPAN)
BIO CEO celebrates JOBS Act’s effect on biotech. Former Republican Congressman Jim Greenwood, who is now the president and CEO of biotech’s largest trade association and lobbying outfit, BIO, is out with an editorial in The Hill celebrating the five-year anniversary of the JOBS Act becoming the law of the land. “When it comes to regulating the biopharmaceutical industry, partisans have been known to earnestly invoke life and death in their arguments. Regulations are necessary to prevent unsafe products from killing people; regulations are killing small life sciences companies and the patients they might have otherwise saved. Both sides have a point, yet common ground is seldom found,” he wrote. “That is what makes today’s anniversary worth celebrating. Exactly five years ago, the JOBS Act became law after an overwhelming bipartisan vote in Congress. It was a rare triumph of compromise and regulatory sanity in the nation’s capital — a law that recognized regulations are both necessary and frequently overbroad.” While the JOBS Act wasn’t specifically targeted at drug makers, it has undoubtedly had an outsized (positive) effect on the biotech sector, especially when it comes to venture funding. As David Thomas, the senior director of industry research at BIO, explained to me a while back, one the law’s major provisions ensured that “companies could go and talk to investors more than one time, and not in a very formal setting like it had been structured before.” Since it takes several rounds of discussions to understand something as complicated as drug development, this was a boon to fledgling biopharma companies, and VC funding in the space was booming by 2013. (The Hill)
‘Science Guy’ Bill Nye’s New Mission, by Kacy Burdette
|Produced by Sy Mukherjee|
Find past coverage. Sign up for other Fortune newsletters.