The top 10 biopharma pipeline blowups, setbacks and snafus for H2 2019

Bioregnum Opinion Column by John Carroll

Every 6 months, as longtime followers will know, I like to list the top 10 disasters in clinical R&D. And it seems like every new round-ups the ante a little more on just what qualifies for a top blooper of the year.

H2 2019 is certainly a standout, with a Big Pharma data scandal, a couple of blockbuster M&A busts and a whole run of Alzheimer?s setbacks to contemplate as we watch the Biogen saga play out. Not only does the Alzheimer?s field continue to crater, but we watched antibiotics come apart in the last 6 months of 2019.

Can anyone view that as anything but a disaster in the making, easily foretold but seemingly impossible to remedy?

I?ll allow that the usual run of schadenfreude makes these regular assessments among Endpoints News? most popular running series. But there are some important lessons to be absorbed here as well for anyone interested professionally in drug development.

If that?s not you, you?re reading the wrong publication.

1. Novartis? epic AveXis scandal will leave a permanent scar

Vas Narasimhan

This is not your run-of-the-mill industry R&D disaster. It is an over-the-top cautionary tale that everyone needs to pay close attention to.

When Novartis put up a red flag last August that their AveXis sub had included manipulated data in their application for Zolgensma, currently the world?s most expensive one-off therapy, the issue wasn?t what had been manipulated, but why the pharma $NVS executive team under Vas Narasimhan chose to stay mum about it until after the FDA had approved it.

That, to put it mildly, spurred one of the most critical public statements in FDA history as regulators announced a probe that could lead to criminal and civil sanctions. So far, nothing has come of that. But Novartis immediately went into damage control mode, shifting blame to AveXis? founders ? who were fired ? and vowing never to do it again. This is straight out of their Michael Cohen playbook, and all the ethics scandals that seem to come home to roost at Novartis.

Is it culture or coincidence that Novartis was home to the 2 biggest industry scandals of the past 3 years?

The kicker to all this is that it was entirely an unforced error. All they had to do at Novartis was report the manipulation to the FDA in a timely fashion, explain it away and in this regulatory environment likely get a quick pass on the way to the market. As it stands, the therapy is performing well, indicating that a large number of the parents of the infants afflicted with SMA are good to go.

2. Eli Lilly?s Armo disaster leaves a number of scientists wondering why anyone would pay $1.6B for it

This is one collapse that a number of scientists saw coming from a mile down the pipeline.

Eli Lilly $LLY squandered $1.6 billion buying Armo and its IL-10 cancer program for pegilodecakin. Added to chemo, it flopped badly in pancreatic cancer. That setback took a bite out of Lilly?s blockbuster expectations for this immunotherapy approach, which had already been discounted by some of the vets in the field. The data hit in January, showing just how bad it was.

Then along with the Q4 news Lilly unceremoniously dumped it after conceding that the drug had also failed in lung cancer.

Josh Bilenker

For Lilly, it was the crowning failure that underscored a troubled oncology effort. Earlier, Lartruvo had failed its confirmatory study and had to be pulled. And their standard late arrival in the CDK 4/6 market put them far behind the market leader.

Lilly, to its credit, isn?t just inviting more problems. By the time the Armo disaster occurred, Dave Ricks had already turned the oncology group over to the Loxo team ? as Levi Garraway headed to Roche ? that delivered real products. Now Josh Bilenker and crew are in charge of pushing ahead after slashing a round of weak projects. The stage has been cleared for new deals to come.

3. The antibiotics field is collapsing just when it should be starting to fly

This isn?t about 1 major blowup, but a series of collisions that mark a major debacle for a field. And it couldn?t have happened at a worse time.

When Melinta filed for Chapter 11 a few days after Christmas, it became the latest of several painful biotech failures in 2019, with the bankruptcy filing coming after Achaogen hit the wall. Over the past few years, the pullback has been hard to ignore. Novartis dropped its whole unit in 2018. AstraZeneca had bowed out several years ago. Merck?s first move after the Cubist acquisition: Kill the discovery work.

The crucial yardstick for any development program is unmet medical need ? and there?s no shortage of that commodity here. Drug-resistant infections are increasingly common, but as antibiotic vet Isaac Stoner made clear in his column, there?s still no money in the business. And investors won?t back a certain loser.

We?ve had lots of suggestions for finding new ways to pay for antibiotics, but no hard action. Unless something changes fast, this field will continue to wither and die.

4. Incyte?s latest failure underscores a bleak reality: Aside from Jakafi, meaningful success is largely MIA

Officially, the failure was reported on the first business day of the New Year, but we?re calling it for the H2 roundup, as the flop on itacitinib brewed in Incyte?s $INCY pipeline.

For analysts, the Phase III failure in graft vs host disease with a homegrown drug underscored a litany of setbacks for everything outside of Jakafi, their cash cow. Who can forget the legendary issues with IDO in 2018 that hammered the stock?

The rep here for a lack of innovation only made their CD19 deal with Morphosys on tafasitamab all that much harder for analysts to love, as it was clearly not the Big One they were hoping for.

Jakafi, of course, has continued to pile up wins in the clinic, but Incyte CEO Herv? Hoppenot has never proved he can pull off a second franchise that the big biotech needs to succeed in the future. That?s a bad way to start the year. And it adds to the pressure to do something dramatic to encourage investors.

5. Biogen?s Alzheimer?s failures go much, much deeper than aducanumab. When do we start to learn from experience?

The fixation on aducanumab at Biogen is so dominant now that virtually nothing else can interrupt that controversial storyline. So when Biogen $BIIB and Eisai wrapped the latest, and worst, BACE study, it was easy to overlook while the market stayed focused on the controversial amyloid beta survivor.

Months after a host of experts said it was dangerous, the partners dropped elenbecestat ? after the independent monitoring board raised concerns about?safety.

BACE ? aimed at choking off the production of amyloid beta ? has been the most thoroughly disproven approach in all of Alzheimer?s R&D, with decisive Phase III failures at Merck, Eli Lilly/AstraZeneca, J&J and then Amgen/Novartis. And for some reason, everyone thinks it?s important to see these trials through to a conclusion.

We hear over and over again how important these Alzheimer?s studies are to patients. But persisting in a trial that you know is an odds-on fav for hurting people is not admirable. Will we learn from this?


6. Amgen joins the Big Pharma migration out of an ailing neurodegeneration field

Antibiotics have been a wasteland for little biotechs, but neurodegeneration has proven a bitter arena for Big Pharma.

After squandering vast sums of money on failed efforts to tame Alzheimer?s, the major players have been steadily exiting the neurodegeneration field over the years.

GSK. Pfizer. They got out while the getting was good.

In other companies like AstraZeneca and Merck, their efforts have dwindled to a shred of what they had been. It?s no surprise these same players prefer oncology by far, where the commercial pickings are so much richer and chances of success so much greater.

So it was no great surprise last fall to see Amgen $AMGN ? which sticks to what it knows is most likely to deliver ? drop out as well. The decision to chop 180 jobs and exit neuro followed yet another pivotal BACE failure in July. We would have called that as a big snafu in itself, but at this stage, BACE as a targeted approach in Alzheimer?s has been thoroughly trashed. It was just one more nail in a coffin already solidly sealed.

Right now the last big play in the top 20 is in Biogen?s uncertain hands, which is playing with some cherry-picked post hoc data to try and get their Alzheimer?s drug over the approval line at the FDA. After Sarepta showed that you can skirt the old gold standard, some analysts give that a real shot.

Maybe something like an approval for a failed drug would inspire some of these big players back in. But that?s doubtful. Until someone demonstrates they are on a clear path with a basic understanding of the biology involved, neuro will continue to suffer.

Unmet medical need is one thing, but few CEOs publicly invite failure.

7. Novartis goes 0-for-2 on their big H2 catalysts ? but they?ll survive

In Big Pharma land, building expectations on blockbuster efforts is the go-to position for all the top CEOs. And no one plays this game more effectively than Novartis $NVS CEO Vas Narasimhan.

Last year, Narasimhan and his team boasted a major league slate of wins with 5 important new drug approvals. But that didn?t expunge the sting for their 2 big trial failures in H2.

Just before Christmas came the news that its home run swing at a pivotal program for fevipiprant had fanned out. Back in October Novartis buried the news that fevipiprant had failed the first 2 Phase III studies in their Q3 report, noting a lack of success in scoring an improvement in FEV1 among moderate patients. But the pharma giant immediately shifted focus to LUSTER 1 and 2 in moderate to severe patients, noting that they were the core studies needed for registration and a blockbuster future.

So that was a nonstarter, quickly relegated to the graveyard.

That followed a setback for the PARAGON-HF study of Entresto for heart failure with preserved ejection fraction. In July, the Swiss drugmaker said the therapy ?narrowly missed? the composite main goal of (first and recurrent) heart failure hospitalizations and cardiovascular death. But the company said the ?totality of evidence? underpinning the drug suggests a ?potential clinically important benefit? ? without disclosing further detail.

This is the cardio group, though, where blockbuster hopes spring eternal and the pharma giant continues to hunt the megablockbuster success execs believe they deserve. So we?ll see, but the commercial prospects are thin.

8. A Solid collapse ? 2 holds and a high profile farewell put this biotech under a pall

Generally, we stick with the big players for our twice-annual look at landmark failures. Big Pharma takes the big swings, typically, and should get called when their best efforts strikeout. But we?ll make an exception for Solid Bio $SLDB.

Once a high flyer despite waiting to the 11th hour to tell investors in its IPO that they had suffered a hold by the FDA on safety issues surrounding their gene therapy for Duchenne muscular dystrophy, the biotech has subsequently suffered one setback after the next.

Penn investigator James Wilson bowed off the advisory board as he gloomily assessed the risks associated with their kind of AAV gene therapy given at a high dose. And then 3 months ago the FDA was back, dropping another hold on the company after the safety risks they assured everyone they could guard against reappeared.

One patient in a tiny cohort of 3 receiving a 2E14 vg/kg dose just weeks ago was hit with ?complement activation, thrombocytopenia, a decrease in red blood cell count, acute kidney injury, and cardio-pulmonary insufficiency.?

Chief medical officer Jorge Quiroz along with the COO departed in early January, ostensibly to help extend the cash runway. At this point, Solid has dug a deep hole in terms of credibility. It will take quite a lot to win it back.

9. Nektar CEO Howard Robin manages to damage his company again as development strategy derails

Howard Robin

One truth holds true in biotech as in every other industry. When you find yourself in a hole, for your investors? sake, stop digging.

Nektar $NKTR helped underscore that with its woeful explanation of why its drug NKTR-214 ?softened up? in terms of efficacy over time. Nothing disenchants investors, or spurs the shorts, like evidence that a drug?s efficacy is short-lived. And Nektar was suffering from that in the worst sort of way.

CEO Howard Robin used their Q2 call to point the figure at two production lots for the less-than-optimal results, an explanation that caused considerable hooting among the analysts who follow the stock.

Their shares, already suffering, took a hit ? the latest of several.

Robin?s credibility overall has been repeatedly hit. At one point he promised a deal for their opioid NKTR-181, then switched it to a subsidiary operation to commercialize when nothing materialized. An expert panel at the FDA voted against this sure thing of Nektar?s by a vote of 27 to 0.

Nektar then killed it, and the sub.

Back in the spring of 2018, Nektar?s shares sold for well over $100 a share. On Friday they closed at $22.61.

10. AbbVie finally dispatches a colossal disappointment after breaking another leg in a trial

My top 10 on high profile clinical failures in H2 wouldn?t be complete without a few shovels of dirt for Rova-T, the cancer drug that AbbVie $ABBV paid $5.8 billion when it bought out Stemcentrx.

The final insult was a failure for small cell lung cancer, putting the 3-time loser in the grave once and for all. No doubt this is one program no one wants to hear about ever again at AbbVie.

Remarkably, like Armo?s IL-10, this was one widely anticipated flop. Practically no one would agree with AbbVie that it was worth a blockbuster unicorn deal, with $4 billion in milestones tied in to boot. This one backs the assertion that there?s too much money hunting too few top assets. But even that can?t explain a loser like this.