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Altered Trajectory for Life Science R&D

In the midst of the global pandemic, some biotech companies have adapted to meet the growing crisis through acquisitions, special programs and pipeline shifts. Westlake Village-based MannKind Corp. was the first to announce such a shift last month – the company plans to collaborate with Immix Biopharma Inc. to create a dry powder treatment for “acute respiratory distress syndrome, a complication of COVID-19,” according to a statement. Immix is a Los Angeles-based biotech focused on developing cancer therapies. Afrezza, MannKind’s flagship product, is an inhalable insulin that uses a dry powder formula in the lungs. “We believe our pulmonary delivery technology may have a role to play in addressing the public health crisis caused by a respiratory viral infection,” Michael Castagna, chief executive of MannKind, said in a YouTube video to stakeholders on March 25. “We are being prudent with our financial resources during this time of market turmoil. The global economy is entering a period of considerable uncertainty and we intend to manage our business conservatively throughout.” The company cited an excess in manufacturing capacity as a plus in addition to its dry powder formula and delivery system, with Afrezza having been marketable for more than seven years now. MannKind hinted at other collaborations to combat coronavirus, although nothing new has been announced as of press time. Amgen partnership Pharma powerhouse Amgen Inc. announced a similar strategy with its Adaptive Biotechnologies partnership on April 1. The Thousand Oaks company and Seattle-based Adaptive plan to work together on a treatment for COVID-19. Financial details still need to be finalized, Amgen said, so terms of the agreement were not disclosed, but work on a treatment has already begun. Researchers from both companies will use Adaptive’s immune medicine platform and Amgen’s immune system therapy to develop a SARS-CoV-2-targeting antibody. “Our strong history of collaboration with Adaptive gives us the ability to immediately mobilize our combined resources to help address the urgency in controlling the COVID-19 pandemic,” Robert Bradway, chief executive of Amgen, said in a statement. “After swiftly obtaining viral gene sequences from hundreds of patients, Amgen was motivated to use these insights and quickly pair them with our drug development and manufacturing capabilities.” Amgen also finalized its purchase of the remaining 49 percent of Amgen Astellas BioPharma early this month, the result of a 2013 joint venture with Japanese company Astellas Pharma. The buyout, which appears to be business as usual amid a pandemic, mirrors the company’s decision in October to purchase a 20.5 percent stake in Chinese company Beigene for $2.7 billion in cash. Both purchases deepen Amgen’s presence in Asia. Lancaster medical software company Simulations Plus teed off its pandemic strategy with a fast-track program for its clients researching coronavirus treatment at the end of March, followed by the acquisition one week later of French company Lixoft for an undisclosed amount. The program, StrategiesPlus COVID-19 ACT, allows biopharma companies to use Simulations’ predictive software to quickly and safely develop a drug, and a mode to deliver that drug, to treat the virus. Lixoft’s Monolix Suite helps researchers test drugs from first data exploration up to clinical trial simulations which is perfect for biopharma companies looking to collect proof of a drug’s viability early on. “Pharmaceutical and biotech companies are working 24/7 in a new and cooperative way that has never been seen before,” said Dan O’Connor, director of business development for Simulation Sciences at Simulations Plus in an email to the Business Journal. “The critical contribution of modeling and simulation in drug development has advanced to ‘center stage’ offering greater understanding, speed and safety for new drugs.” While trials for COVID-19-related drugs are understandably accelerated, other drug development trials will likely be delayed due to social distancing impacting healthy volunteers, O’Connor added. “The FDA said (coronavirus) may impact clinical trials for companies because they may give priority to companies that are working on some type of vaccine or drug related to coronavirus over other trials,” said Brent Reinke, chairman of Conejo Valley’s BioScience Alliance and a partner at the law firm Musick Peeler in Westlake Village. “Because of what we’re dealing with, a virus, biotech pharma companies are going to get even more focus and people are going to realize why we have to have good companies out there developing drugs for things that we need to protect ourselves against.” “Biotech companies are doing a phenomenal job. Across the globe they are stepping up their research efforts and applying creative solutions to their business operations during these difficult times,” O’Connor added. Medical device casualty Biotech companies that don’t have products or R&D that coincide with the current pandemic are waiting out the storm as best they can, but impending staff cuts may prove fatal for some companies. For example, Second Sight Medical Products Inc. in Sylmar reacted to the coronavirus crisis with a surprise announcement of laying off 84 of its 108 employees on March 30. The company plans to terminate its existence, news that caused its stock to drop of more than 50 percent that day. “Against a background of unprecedented economic shock caused by the COVID-19 pandemic and inability to secure additional financing, the company’s board of directors has evaluated strategic alternatives and decided to pursue an orderly wind down of the company’s operations,” Second Sight said in a statement. The company will bring in a consulting firm to help leadership with its wind down of operations. The visual prosthetics company – like MannKind – was a brainchild of late billionaire inventor Alfred Mann. Second Sight was founded 22 years ago and recently went through two chief executives, with Gregg Williams replacing longtime leader Will McGuire early March on an interim basis and Matthew Pfeffer assuming the role at the end of last month. Pfeffer previously held the chief executive title at MannKind before the board hired Castagna. Another former Second Sight chief executive, now chairman of the Al Mann Foundation in Valencia, told the Business Journal that the coming months will be challenging for biotech companies, especially startups. “We’re working on a sleep apnea product that we’re hoping to spin off as a company,” said Dr. Robert Greenberg. “We were actually planning on doing that soon, but with COVID-19 it’s probably going to get pushed back six months, maybe longer. … The (companies) that raised capital before this are going to be much better off than the ones that are now faced with how to raise capital.” Startups in the industry will need to conserve their capital, which Greenberg considers the “lifeblood” of budding companies, and prepare to cut back staff if they haven’t done so already, he added.

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