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The Biotech Hall of Shame
FierceBiotech has issued its picks for 2016’s nine worst biotech companies. The list presents a sobering panorama of deaths in clinical trials, falling share prices wiping out value and confidence, deal-making blunders, epic fails, trillion-dollar opportunities lost, and fundamental technology falling short.
- Juno Therapeutics
Juno was among the leaders in the race to become the first company to market a new type of cancer therapy using chimeric antigen receptor T cells (CAR-T). But three deaths due to cerebral edema in its key phase 2 test of JCAR015 changed all that. The FDA slapped a clinical hold on the trial.
Juno blamed a preconditioning drug, fludarabine, for the deaths, and the FDA allowed the company to proceed with its study. Then two more deaths occurred, again from cerebral edema. Juno promptly cancelled the trial and scrapped JCAR015.
Questions remain as to why the FDA allowed Juno to resume its study when it was still unclear what had caused the initial deaths.
- Biotrial and Bial
The contract research organization Biotrial and its Portuguese pharma partner Bial were also involved in a controversial patient death. The two companies were testing an anxiety drug, BIA 10-2474, in France. After six trial participants took a higher dose of the treatment, one became brain-dead and later died, and the others became acutely ill. France’s health minister declared that both companies “lacked common sense,” and did not stop the trial quickly enough when it became apparent that things were going wrong. Even after the first subject was hospitalized, the other five were given the drug the next day.
British biotech company Circassia, once seen as a pioneer in the allergy field, met its Waterloo with an investigational cat allergy immunotherapy that was aimed at not just alleviating symptoms, but also treating the heart of the condition by helping patients’ immune systems tolerate the allergens. In the summer of 2016, a pivotal phase 3 trial of the therapy flopped, sending Circassia’s stock into a tailspin. The company’s shares now trade at half their value. Circassia said it would stop its studies of treatments for grass and ragweed allergies, and would review the data from the cat-allergy study for factors that could have led to the disappointing results.
By now, the Theranos fiasco has become the stuff of legends. The company’s original idea was to work on drug-delivery patches, but then it moved on to finger-prick diagnostics, which it sold directly to consumers. The tests were designed as a pain-free “solution” that could analyze dozens of markers and deliver results to a consumer in a few hours, all at a price cheaper than other suppliers.
On paper, it sounded like a great plan––but then cracks started to appear. A Wall Street Journal exposé on questionable lab results led to a hard fall from grace for Theranos and its CEO, Elizabeth Holmes, who was banned from owning or operating a medical laboratory for at least two years. In October 2016, Theranos announced that it would abandon its finger-prick blood tests to focus on a new table-top blood-testing system.
- Gilead Sciences
With its $11 billion purchase of Pharmasset in 2011, Gilead Sciences gained access to what became some of the biggest-selling drugs in the world—drugs able to cure hepatitis C in large numbers of patients. But, inevitably, sales dropped off, which was to be expected for medications that effectively helped stop a disease.
Gilead’s blood cancer drug idelalisib (Zydelig) won an FDA nod in 2014 for three kinds of blood cancer, but serious adverse effects, including death, halted six trials that used the drug in combination with a variety of others as a first-line therapy. Then Gilead posted subpar data from two phase 3 studies of the Janus kinase inhibitor momelotinib in patients with myelofibrosis, continuing its struggles in the clinic.
Apart from cancer, Gilead also delivered weak data from trials of its cardiovascular candidate eleclazine; the ulcerative colitis hopeful GS-5745; selonsertib in pulmonary arterial hypertension and diabetic kidney disease; and simtuzumab. In 2016, the company’s share price fell from a high of more than $100 to less than $72 by the end of December.
“Gilead has been guilty of resting on its laurels, and investors have punished the biotech for this approach,” FierceBiotech observed. “Its pipeline became littered with increasing setbacks and failures last year, but it simply stood back and carried on when it needed to do something to stop the rot.”
- Bind Therapeutics
After a series of trial failures, dropped deals, and major staff cuts, Bind Therapeutics went bankrupt last year, and its assets were sold off to Pfizer. In 2014, Amgen walked away from a $180 million collaboration with Bind after trial results didn’t go its way. Then, in 2016, the biotech's nanoparticle candidate Bind-014 didn’t perform up to standard in a pivotal trial. The treatment was designed to deliver a toxic payload to tumors with limited damage to nearby healthy tissue. Out of money, Bind called it quits.
FierceBiotech saw it as a case of “a management team that failed to make a deal [that was] better for shareholders, and its workers, than a bankruptcy-court asset sale.”
- Northwest Biotherapeutics
For years, Northwest Biotherapeutics has been sitting on phase 3 data for its cancer vaccine candidate DCVax, doggedly avoiding the question, “Does it work?” There have also been allegations of inappropriate financial dealings between Northwest and Cognate, a cell-based specialist manufacturer. Cognate was created by the venture group Toucan Capital Fund III, an entity controlled by Northwest’s CEO and president Linda Powers and her husband.
In November 2016, Arrowhead posted the news that its hepatitis B candidate, ARC-520, was placed under a clinical hold by the FDA after a number of nonhuman primate deaths occurred during testing. A few weeks later, this drug candidate, along with a host of others, was dumped, along with the vaccine’s EX1 delivery vehicle and 30% of Arrowhead’s staff. ARC-520 had been touted as a potential cure for hepatitis B infection.
“Ditching work on a drug that had been hyped as a cure and having to admit you cannot use your leading drug delivery tech, while scaling back staff and development timelines by years and hitting the reset button, is one of those worst-case scenarios for a biotech,” FierceBiotech observed.
While many analysts see Novartis as the safest European biopharma company around right now, the firm hemorrhaged executive and scientific talent in 2016 while rolling back its cutting-edge science. Top execs David Epstein, Usman “Oz” Azam, Alessandro Riva, and Hugh O’Dowd all exited for jobs with other companies.
FierceBiotech sized up the situation with the comment: “Novartis is clearly a strong, R&D-led company, but it gains a dishonorable mention …given the loss of some serious talent in such a short period of time.”
Source: FierceBiotech; March 7, 2017.