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Wednesday, January 29, 2014
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Will 2014 Be The Year For RNA Companies?

January 29, 2014

By Karl Thiel for

It's been a remarkable month...and a remarkable year...for RNA. Companies focused on manipulating RNA messages—by RNA interference (RNAi), antisense, or other techniques—have been white hot in an already sizzling biotech sector.

The Nasdaq Biotechnology Index is up nearly 75 percent since the beginning of 2013. But, look at RNA companies like Alnylam over the same period (up 340 percent), or Isis Pharmaceuticals (up 355 percent). Even small, early stage companies like More...

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This was the month of big surprises—as in, clinical results that caught the market off-guard and sent the stocks of companies soaring. I mentioned Sarepta in the introduction, but both ArQule and Intercept found big success with liver drugs-—with Intercept's stock more than quintupling in the course of two trading sessions after the company's treatment for nonalcoholic steatohepatitis worked so well the clinical trial was halted. The company's market cap shot up to over $8 billion before it came back down to earth.

Aduro Biotech, meanwhile, got unexpectedly strong results right next door at the pancreas. Aduro isn't public, but it made a splash by showing that a combination of two cancer vaccines—each pretty much abandoned after failing individually—could do impressive things in combination, significantly extending survival in a mid-stage study of patients with pancreatic cancer, a very tough illness indeed. It's a great reminder that combinations and cocktails can make a big contribution to progress. And if Aduro is successful, it will be a great story—they paid next to nothing for these assets. -KT
ArQule, Inc. (ARQL) Soars As FDA Panel Favors Continuation Of Liver Cancer Drug Study, Stock Up +6.78% At Market Close (January 17, 2014)

Sarepta (SRPT) Surges Following Results Of Phase 2b Eteplirsen Therapy

As Big Biotech Talks Cancer Vaccines, Bay Area's Aduro Biotech Nails Mid-Stage Pancreatic CA Study

Intercept Pharma (ICPT) Falls As CEO Says It May Need Help Big Pharma's Help

Neurocrine (NBIX) Rockets On Positive Ph2 Movement Disorder Drug Data; Stock Up +75.56% At Market Close (January 7, 2014)

More Bench To Clinic News
Biotech is a young industry, but it's been around long enough to create some seasoned veterans who choose to enjoy the fruits of their labor in retirement. Gilead Sciences' head of commercial operations, Kevin Young, is stepping down, after a 10-year stint at the company that saw a 9-fold increase in revenues. The aptly named Young is only 56, however, and will stay with the company in an advisory role. Amgen CFO Jonathan Peacock, meanwhile, is leaving to pursue "broader career opportunities." Exactly what that means and how he will add breadth to an already successful career is not yet clear, but the LA Times reports that he hasn't yet accepted a position elsewhere.

Meanwhile, troubled Teva Pharmaceuticals gets a new CEO effective February 11. Erez Vigodman will fill a seat left empty since Jeremy Levin's ouster last October. Vigodman is current chief executive at Makhteshim Agan Industries, a leading generic agrochemical company, and is considered a turnaround specialist. And Incyte landed the president of Novartis Oncology as its new CEO. Herve Hoppenot will be leaving behind one of the more envied oncology pipelines in the industry. -KT
Novartis (NVS) Head, Herve Hoppenot, Flys The Coop To Become CEO Of Incyte (INCY)

Lexicon Pharma (LXRX) Axes 45 Percent Of Jobs, CEO To Step Down

First Gilead (GILD), Now Amgen (AMGN) Loses A Top Exec

Teva (TEVA) Confirms Rumor, Picks Turnaround Specialist As New CEO

Gilead (GILD)'s Head Of Commercial Operations To Step Down

More Career Track News
I mentioned a number of RNA-focused deals from the past month in the introduction...but wait, there's more! Santaris Pharma inked a deal with Roche covering its "locked nucleic acid" technology, which targets mRNA and microRNA. Santaris says its platform overcomes limitations of other RNA-targeting technologies like siRNA and antisense due to the small size of their molecules and their high binding affinity. According to the company, they can work in a variety of tissues without special delivery vehicles. Roche was intrigued enough to pay $10 million upfront and a further $138 million in potential milestones, plus research funding.

Sangamo BioSciences is earning $20 million upfront—and up to $300 million more, plus double-digit royalties and a co-promotion option—under a co-development agreement with Biogen Idec aimed at a potentially curative approach to sickle cell disease and beta-thalassemia. This of course, involves Sangamo's very cool-sounding zinc finger technology. -KT
Nantbioscience Scores $75M CA Deal With Celgene Corporation (CELG)

Regeneron (REGN), Bayer HealthCare (BAY) Forge Pact Worth $65M+ To Co-develop Wet AMD Drug

Jazz (JAZZ) Forges Pact Worth $397M For Aerial BioPharma's Sleepiness Drug

Santaris, Roche (RHHBY) Strike $148M+ Alliance To Design And Develop RNA-Targeted Drugs

Biogen (BIIB) May Pay Sangamo BioSciences, Inc. (SGMO) As Much As $320M For Blood Drugs; SGMA Soars +38.32% At Market Close (January 9, 2014)

More Golden Handshakes News

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Juno Therapeutics has quite a storied history, and it's brand new company. Having now raised over $145 million in a Series A round (yes, that's Series A), Juno attracted investments not just from A-list VCs but also's Jeff Bezos. The company's cancer vaccine programs have produced some very promising looking results, but it has also spawned a legal dispute. Juno took a license to chimeric antigen receptor technology from St. Jude Children's Research Hospital, which is now in a dispute with the University of Pennsylvania and its licensee Novartis. With Juno saying it will pay 80% of the legal expenses, it sees the stakes as being fairly high. Luckily, it's flushed with cash.

Glycomimetics, meanwhile, becomes the first biotech IPO of 2014, while Alkermes fills up its coffers with a PIPE offering (private investment in public entity) to Invesco. That gives the company quite a warchest as it looks to bring a long-acting version of the antipsychotic Abilify to market next year. -KT
Already-Rich Startup, Juno Therapeutics, Expands Series A Funding Round To $145M

Sanofi (SAN.PA) Pays $700M For 12 Percent Of Alnylam (ALNY)

Alkermes (ALKS) Hauls In $250M It Doesn't Need, But It May Prevent It From Being Swallowed Up

GlycoMimetics (GLYC) Finally Prices Upraised IPO At $8 Per Share

Amgen (AMGN)'s Bay Area Spinoff, Atara Biotherapeutics, Hauls In $52M Series B Financing

More Money Talk News

Actavis CEO Paul Bisaro told the crowd at the JP Morgan Healthcare Conference something they already knew: that China does not have a business-friendly climate, especially for Western companies. But more surprising was his conclusion, that the massive potential market China represents just isn't worth the hassle. As a leading generic manufacturer, Actavis has a lot to gain in China, but the company is in the process of pulling out of the country. That raises the question of whether other companies might eventually follow suit, but it should be pointed out that Actavis hadn't made massive investments in the region, so withdrawing is a relatively modest affair. -KT
Actavis (ACT) To Exit China As Unfriendly Government Not Worth It

Gentium Shareholders Sue Over $1B Jazz (JAZZ) Deal

Doc Admits He Leaked Secret ALZ's Trial Information To "Friend" At SAC

Teva (TEVA) Asks Supreme Court To Review Copaxone Ruling

Whistleblower Lawsuit Costs Genzyme (GENZ) $22M

More Legal Briefs News
Johnson & Johnson and partner Bayer have been hoping to expand the use of Xarelto to patients with acute coronary syndrome, but narrowly failed to convince an FDA advisory panel back in 2012. Their second attempt to address the concerns previously raised again, failed to sway the panel this time by unanimous vote (with one abstention). But another blood-thinner, Merck's Vorapaxar, did get a positive vote. Assuming it is eventually approved, the first-in-class drug will likely be engaged in an epic, high-stakes battle with Xarelto, which is on track to top $1 billion in sales this year.

AstraZeneca and Bristol-Myers Squibb's Farxiga (dapagliflozin), meanwhile, becomes the first new chemical entity approved in 2014. This diabetes drug is soon to be AstraZeneca's alone, as the company will complete its acquisition of BMS' interest in their diabetes alliance sometime this quarter. -KT
FDA Panel Once Again Rejects Wider Use Of J&J (JNJ) Drug

Merck (MRK)'s Blood Thinner, Vorapaxar, Gets "Yes" Vote From FDA Panel

Astra (AZN), Bristol (BMY)'s New Approach Diabetes Drug, Farxiga™, Wins FDA Approval

United Therapeutics (UTHR) Hits All-Time High As FDA OKs Lung Disease Drug; Stock Up +30.36% At Market Close (Dec. 23, 2013)

Glaxo (GSK)'s Malaria Drug Wins FDA "Breakthrough" Status

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Karl Thiel is an analyst for The Motley Fool and a longtime follower of the biotech industry. He lives in Austin, Texas.

You may contact Karl Thiel at

BioSpace, Inc.
6465 South Greenwood Plaza, Suite 400
Centennial, Colorado 80111 U.S.A.
Phone: 877-277-7585
Fax: 800-595-2929
BioSpace, Inc.
90 New Montgomery Street, Suite 414
San Francisco, California 94105 U.S.A.
Phone: 877-277-7585
Fax: 415-576-9217

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