Pullan's Pieces #159
 
 
 
 
 
 
linda@pullanconsulting.com
1(805)-558-0361
 
 
 
 
Pullan's Pieces #159
May 2020
BD News and Analysis for  Biotech and Pharma
 
 
 
 
 
Dear --FNAME--,
 
 
 
 
Warm sunny days are here.  Hopefully also relief from the coronavirus and the start of economic recovery.  We are heading to the Digital BIO 2020 and hope to see many of you via video. 

We'd love to hear what you think of this issue and what you would like to see in future issues. What is your burning question that we might be able to analyze? 

Cheers,


Linda
 
 
 
 

1.  Platform Deals
2.  Infographic: Immunology Deals         
​​​​​​​3. Jessica:  Taming Cytokine Storm
4.  Trevor:  Tradewinds Changing - China and US investing
 
 
        
 
 
 
Platform Deals in 2019 - What can we see?
 
 
 
 
I thought it would be fun to take a look at platform deals and I searched GlobalData for completed 2019 alliances with "platform" in the deal-in-brief description.  I then eliminated those where the word "platform" was used as a description of the company, not the deal focus (ie, Company X who has a platform). 

Deal Stage
First, most platform deals are done with no asset yet in preclinical or in the clinic.  This surprised me.  I thought that it would be common to see a molecule with preclinical data as validating the platform and that molecule would be included in the license.  It may be that there are preclinical molecules validating these platforms but they are not generally in the deals.   There were only 2 academic deals in this list of platform deals (one from the NIH and one from Griffith University); both of these involved identified molecules at clinical stages.  




 
 
 
 
Option structure in platform deals

With most platform deals occurring at discovery stage, it is not surprising that many of the deals are structured as options, with licensing after progress.  
 
 
 
 
Focus of platform deals
  • Most of the platform deals are focused on drug discovery or target and drug discovery. 
  • There is a significant share dedicated to applying delivery platforms, and a few for ADCs (antibody drug conjugates) as a platform. 
  • There are small numbers where the technology for drug discovery is licensed (rather than applied in a collaboration). 
  • There are a few where the target is identified or a target and a biomarker is identified in the collaboration but no drug discovery is in the collaboration.  

Target IP is difficult to enforce (the drug sold does not inherently infringe it, only the perhaps invisible use of the target IP years before the drug is sold infringes).  So perhaps it is not surprising that alliances are generally focused on the more patent-defensible (and more advanced) drugs versus targets.   
 
 
 
 
Therapeutic Areas of Platform Deals

As is so often the case in deal analyses, oncology is the biggest area for these platform deals, with CNS 2nd.  But infection is a therapeutic area for 9% of the deals.  And there is a nice mix of other therapeutic areas.  One caveat is that many deals have more than 1 therapeutic area.  
 
 
 
 
Molecule Types
Not surprisingly, small molecules and antibodies are the most frequent molecule types but others are also visible.  
 
 
 
 
Deal Values
There were 69 deals with disclosed total values and 65 with disclosed upfronts.  The biggest by far was the Gilead Galapagos deal which included multiple clinical molecules.  Taking that mega-deal out, the median upfront was $4.7M and the median total was $200M.  But as often is true in deal values, this covers a wide variety of deal focuses and the ranges are huge.  

If I look only at deals focused on drug discovery and with no clinical molecules included, I can see that the median upfront is $33M and the median total deal value is $895M but there are only 6 deals with disclosed deal terms.  

There is a lot of a value in a platform that creates new drugs!  
 
 
 
 
 
 
 
Infographic:  Immunology Sales (part of May 8th Webinar)
 
 
 
 
 
Jessica:     Taming the cytokine storm
 
 
 
 

Cytokine Storm – ooh, sounds scary!  But is it?  Does it occur naturally or only in response to CAR-T therapy and COVID-19?  Is it bad, something to be avoided?  Are there drugs to induce it (if good) or attenuate or block it (if bad)?  Buckle up, we’re going into the storm.


A storm by any other name

The first use of the term “cytokine storm” was in 1993 to describe cytokine dysregulation as a mechanism of graft versus host disease (GvHD) – an adverse reaction in which a bone marrow transplant (graft) comes in kicking and screaming; rejecting the recipient (host).  So, yes, more than just a phenomenon of CAR-T.  Designations that have been tied to this type of response include (but are not limited to): cytokine release syndrome (CRS), cytokine storm (CS), secondary hemophagocytic lymphohistiocytosis (sHLH), immune reconstitution inflammatory syndrome (IRIS).  Clinicians will argue that there are nuanced differences in the clinical manifestations of the above, but ultimately, they all involve the triggering of an inflammatory response that escalates due to the presence of large quantities of pro-inflammatory cytokines.  If untreated, it can lead to multi-organ failure and can be fatal.  Initial symptoms can include some or all of the following:  fever, swelling, fatigue, or nausea. 


What are cytokines and why do they storm? 

Cytokines are small, short-lived proteins, that are secreted by various cells of the innate (kill first ask questions later) and adaptive (establishment and recall of immunological memory) response.  In truth, the sequence and blend of cytokines present at key moments in an immune response coordinate and control which cells respond and how they do so.  There is also significant redundancy in both the genetic expression and control of these powerful molecules.  Cytokines not only coordinate the immune response in order to resolve the danger, but they also direct the tissue repair process upon resolution of the ordeal.  For more information see here:  Into the Eye of the Cytokine Storm


Ven Diagram of Doom - Key Players in Cytokine Dysregulation:


















 
 
 
 

Much in the way rain showers can be good, but hurricanes are dangerous; cytokines can be good, but raging storms can unleash havoc on the body.  Below is table containing a short, and certainly non-exhaustive, list of situations in which a cytokine storm has been described to play a role in clinical outcome:


Situation


Positive

Negative

Cell Therapy:


GvHD

  • The point of BMT is to “replace” the immune system so – yay, the cells work
  • Graft versus Leukemia (GvL) = success

Pre-transplant - recipients are treated with total body irradiation or high dose chemotherapy, so they are not equipped to control the attack

CAR-T

The product cells are killing cancer cells – good!

  • On-Target/Off-Tumor Effect
  • 50-100% of CAR-T recipients experience cytokine storm – 13-48% severe
  • Advanced supportive care often required

Infections:


COVID-19/ARDS

  • In the case of infections, the innate response kicks in immediately in an attempt to contain and control – primary cytokine released
  • Later, the adaptive response is brought in via the cytokines elicited by the innate response  


Collateral damage to the lungs

Influenza

Collateral damage to the lungs

Sepsis

The magnitude of the inflammatory response can be detrimental

Ebola

Virus has phosphatidylserine (PS) on its surface – a platform for coagulation and inflammatory cascade

Sudden Infant Death Syndrome (SIDS)?

Inappropriate inflammatory response to one or more viral infection(s)?

Dysregulated cytokine response may lead to fatal cytokine storm in response to virus(s) in seemingly healthy infants


The immune response to infectious diseases contributes greatly to the morbidities and mortalities associated with those diseases.  Therefore, developing therapeutic strategies to target aspects of immune responses may be valuable.  We have seen this unfold daily in the fight against COVID-19 with many of the therapies being tested arising from those that were originally developed as immunotherapies to address oncology indications.   This is not as unrelated as it may seem, as both tumor cells and infectious agents have evolved to evade the immune response with some cancers stemming from viral infections (eg cervical cancer and human papilloma virus, HPV).  Additionally, the emerging trend of immunotherapies developed to address infectious diseases is especially relevant against the backdrop of continued spread of antibiotic resistance and paucity of new antibiotics being developed.


Drug

Sponsor

Latest Stage

Target

Molecule Type

ruxolitinib phosphate

Incyte Corp

Phase III

Tyrosine Protein Kinase JAK1 or JAK2

Small Molecule

tocilizumab

Roche (Genentech Inc)

Marketed

Interleukin 6 Receptor (IL6R)

Monoclonal Antibody

canakinumab

Novartis AG

Phase III

Interleukin 1 Beta (IL 1 Beta or Catabolin or IL1B)

Monoclonal Antibody

acalabrutinib maleate

AstraZeneca Plc

Phase I

Tyrosine Protein Kinase BTK (Bruton Tyrosine Kinase)

Small Molecule

lenzilumab

Humanigen Inc

Phase III

Granulocyte Macrophage Colony Stimulating Factor (GMCSF or Colony Stimulating Factor

Monoclonal Antibody

ST-266

Noveome Biotherapeutics Inc

Preclinical

 

Protein

TJM-2

I-Mab Biopharma Co Ltd

Phase II

Granulocyte Macrophage Colony Stimulating Factor (GMCSF or Colony Stimulating Factor

Monoclonal Antibody

ADX-629

Aldeyra Therapeutics Inc

Preclinical

 

Small Molecule

INB-03

Inmune Bio Inc

Preclinical

Tumor Necrosis Factor Receptor Superfamily Member 1A

Protein

SFA-005

SFA Therapeutics LLC

Phase 0

 

Small Molecule

CYP-002

Cynata Therapeutics Ltd

Preclinical

 

Stem Cell Therapy

Hemay-805

Tianjin Hemay Pharmaceutical Co Ltd

Preclinical

 

 

PPP-003

Panag Pharma Inc

Preclinical

Cannabinoid Receptor 1 or Cannabinoid Receptor 2

Small Molecule

Stem Cell Therapy

Immplacate

Discovery

 

Stem Cell Therapy

TBCT-92

FibroGenesis LLC

Preclinical

 

Cell Therapy


Global Data Drug Database Search for Drugs Targeting Cytokine Release Syndrome/Cytokine Storm 14May2020


There are currently 15 drugs to address Cytokine Release Syndrome, with one currently on the market - Actemra® (tocilizumab) which targets IL-6 - the bully of the cytokine world.  Actemra® has been approved for use to treat convalescing CAR-T recipients as well as vasculitis and various forms of arthritis and is in clinical development to address many conditions including COVID-19.  It is interesting to note that there are not many redundancies in the pipeline of cytokine storm-targeting therapeutics, with various cytokines and cellular signaling molecules targeted.  Therefore, it is possible to envision that countless combination therapies could be derived to address specific storms or cytokine disorders. 


A Cautionary Tale…

Interfering in the immune response can lead to cytokine release syndrome, with dangerous consequence.  In 2006 TeGenero initiated a Phase I trial of a humanized super-agonist CD28 mAb, TGN1412, in healthy volunteers.  The clinical trial was designed to test the experimental drug for the treatment of autoimmune diseases and leukemia.  Surprisingly, all of the test subjects (healthy volunteers) developed an adverse reaction/cytokine storm within 90 minutes that ultimately resulted in acute respiratory distress syndrome (ARDS), despite no respiratory infection or disease.  The clinicians hypothesize that the lung damage observed in the trial was likely attributed to the direct effects of the antibody and cytokines on the lung tissue, and not due to the co-stimulation of T-cells in the lungs by resident alveolar macrophages as those cells are known to be inefficient in their ability to stimulate T-cells that way.  In other words, ARDS, is likely attributable directly to cytokine storm and less likely to be due specifically to an infectious agent such as SARS-CoV-2 taking residence in the respiratory tract.


The intense study of the role of the immune system in the role of protection from invasion or wanton cell growth has revealed many opportunities for intervention via therapeutic targets.  The ability to modulate, coax, or divert immune responses to steer clear of cytokine storms may lead to a dawning of immunotherapies for long list of indications that disease states that extend far beyond oncology and infectious disease.  Developers must take care to remember that these molecules are extremely potent and can elicit unforeseen outcomes when the delicate balance of the immune response is tipped. 

 
 
 
 
 
Trevor:  The tradewinds are changing - China US investing
 
 
 
 
Back in March 2019 we wrote in this newsletter that we would look to “short” the chart of venture capital inflow from China to the US:  

If I were a trader and the chart below was of a stock where the blue bars represented the price and the black line was the relative strength index (RSI is a momentum indicator used to evaluate overbought and/or oversold conditions), I might think about putting on a short position in the company.

This is a graph of Chinese venture capital investment in the U.S. and it shows that 2018 was a banner year for funds flowing into the U.S. (blue bars) but with fewer deals taking place (black line). 

 
 
 
 

It would have been a nice trade.  The trend that had been up, turned over in 2019 (see chart below) and COVID-19 is almost certain to accelerate the downward slope as geopolitical tensions rise and bodies like the interagency Committee on Foreign Investment in the United States (CFIUS) are reinforced.


 
 
 
 
But, while not being spared from the down draft, life sciences has been somewhat insulated by taking a bigger piece of the pie for several years running now.  In their annual update to their ongoing research initiative studying capital flows between the U.S. and China, the Rhodium Group make clear the increased importance the life sciences sector (you’ll note that “Oncology” is a separate category from “Life Sciences” – Rhodium Group groups “cancer treatment-related technologies” under “Oncology”):

 
 
 
 
Going the other way, from the U.S. to invest in China, the trend is still in your favor if you are raising capital for a biotech startup based in China and seeking US-domiciled investors:
 
 
 
 

On a long enough investment horizon (drug development certainly qualifies for that!), one would like to believe that investors will seek out those technologies that unlock new modalities of treatment and the targets/pathways/etc against which to deploy them.  Whether it’s the green back or Renminbi, investors are going to want to go where the opportunities are for advancing and capitalizing on cutting edge technology and effective therapeutics.  So, in that context, so long as war doesn’t break out, it’s hard to think of this downtrend as anything more than a severe correction. 

 
 
 
 
 
 
 
www.Pullan Consulting.com

Pullan Consulting (www.PullanConsulting) provides advice and execution for biotech partnering and fund raising, with outreach to partners and investors, help with shaping of presentations, evaluations and market analysis, preliminary valuations and deal models, and negotiations from deal prep to term sheets to final agreements. 
 
 
 
 
We have extensive scientific and financial experience, with many deals signed. 

Send us an email or set up a call if you want to explore how Pullan Consulting might be of help!
 
 
 
 

Linda Pullan                     Linda@pullanconsulting.com 
Trevor Thompson             Trevor @pullanconsulting.com 
Jessica Carmen               Jessica@pullanconsulting.com 
 
 
 
 
 
 
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