Day Two: J.P. Morgan Roundup for January 14, 2020

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Although there were some deals announced at the ongoing JPMorgan Healthcare Conference, biotech stocks appeared to slide slightly at the overall lack of deals, at least in the first day or two. In fact, the overall lack of deals has become news itself.

“I think the pendulum always swings,” Bill Maris, founder of life science venture capital fund Section 32, told Barron’s. “There’s a lot of disruption politically, there’s an election coming…. There’s a lot of people sitting on the sidelines thinking, waiting for a shoe to drop.”

And, in fact, Josh Schimmer, an analyst with Evercore ISI, wrote in a note to clients last week that although January is usually the busiest month of the year for biotech M&A, there is one exception—election years. It was quite slow in January 2016 as well.

Here’s a look at some of the more recent news coming out of the JPM.

Roche and Illumina Enter 15-Year Collaboration Deal

At the JPM, Illumina’s chief executive officer, Francis deSouza, announced a 15-year, non-exclusive deal with Roche. The deal will increase the availability of next-generation sequencing-based in vitro diagnostic (IVD) tests on Illumina’s diagnostic sequencing systems. In addition, the two companies will collaborate to complement Illumina’s pan-cancer assay TruSight Oncology 500 (TSO 500) with new companion diagnostic (CDx) claims.

As part of the deal, Illumina grants Roche rights to develop and distribute IVD tests on Illumina’s NextSeq 550Dx System, in addition to its future portfolio of Dx sequencing systems, including the soon-to-be-released NovaSeqDx. Roche, on its part, will collaborate on the TSO 500.

Agilex Biolabs Officers Pharmacodynamics Services

Australia-based Agilex Biolabs announced a broad range of new pharmacodynamics services for biopharma clients running preclinical and clinical trials in the U.S., Asia, European Union and Australia. The services are in new labs in Australia and include immunology, cell biology and mode of action assays, including immunophenotyping, receptor occupancy, cytokine release assays, cytokine/biomarker profiling, PBMC assays and cellular mechanism of action assays. Agilex is the only FDA-inspected laboratory of its type in the Asia-Pacific.

Roche to Undercut on SMA Therapy Price

In an interview at JMP, Roche chief executive officer William Anderson indicated the company’s plans to compete in the spinal muscular atrophy (SMA) market is to cost less. There are currently two approved therapies for spinal muscular atrophy (SMA), Biogen’s Spinraza and Novartis’ gene therapy Zolgensma. Spinraza is priced at $750,000 for the first year and $375,000 each year afterward. Novartis’s Zolgensma, which is believed to be a one-shot cure, is priced at $2.1 million. Roche is expecting the U.S. Food and Drug Administration (FDA) to approve its own SMA therapy, risdiplam, by May 24. And the company has suggested that it plans to undercut both Biogen and Novartis on price in order to make up for being third-to-market.

Biogen Positive about Aducanumab Approval and Launch

Despite analysts and other researchers having doubts about the likelihood of Biogen’s aducanumab being approved by the FDA for Alzheimer’s disease, the company is staying positive. In a Q&A, company chief executive officer Michel Vounatsos said they were assembling “top talent” for its rolling teams, building up its manufacturing capabilities and discussing price with various economists and thought leaders. The company already decided to build a new facility in Switzerland, which will go live earlier this year, and its North Carolina plant will be the first site able to produce aducanumab for the U.S. and other markets. All this for a drug that hasn’t even been sent to the FDA for approval yet. Meanwhile, the company spent some time defending the rest of its pipeline.

GlaxoSmithKline Expects Approval of 6 Drugs in Next 12 Months

At JPM, GlaxoSmithKline’s chief executive officer Emma Walmsley told CNBC that the company expects to seek approval for six drugs in the next 12 months. In an interview with “Mad Money’s Jim Cramer, Walmsley said, “We’ve had a lot of positive data for patients, whether that be on the Tesaro acquisition … or our new drug in multiple myeloma. We have a lot of data coming through for HIV patients, in terms of these pioneering two-drug regimens, and we hope that this data among others is going to give us at least six approvals of new medicines or new indications” this year.

BioMarin Looking to Head into Human Testing

BioMarin announced two plans for the year at JPM. The first was that regulators in the U.S. and UK had given the company the go-ahead to begin human testing for its gene therapy for phenylketonuria, a rare metabolic disorder. The company expects to treat the first patient before the end of March. The company also said that it had more than doubled its capacity at its manufacturing site in California that will make both the PKU gene therapy and another, Valrox, for hemophilia A. It will be able to manufacture up to 10,000 doses of either of the product annually.

Bristol-Myers Squibb Plans to Cut $2.5 Billion in Costs

A year ago, Bristol-Myers Squibb was the talk of the 2019 JPM because of its $74 billion deal to acquire Celgene. Now that the deal just closed, the company’s chief executive officer, Giovanni Caforio told reporters at his JPM presentation that he feels “even better about our opportunity” than he did then. He indicated they have made “great progress” in integrating Celgene into BMS, and expects to cut $2.5 billion in costs by 2022, with about a third of it coming this year alone.

Amgen Plans to Expand on Otezla that it Just Picked Up from Bristol-Myers Squibb

As part of its acquisition of Celgene, the Federal Trade Commission required Bristol-Myers Squibb to sell its Otezla, which it did, to Amgen for $13.4 billion. In a presentation on Tuesday, Amgen’s chief executive officer Bob Bradway said the drug would help round out the company’s immunology portfolio in the upcoming years. “In biopharma, the focus is on innovation, innovation, innovation, and Amgen is execution, execution, execution,” he said.

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