Sanofi Shutters Principia’s San Francisco Labs After BTK Failure

When Sanofi acquired Principia Biopharma in 2020 for $3.68 billion, many analysts were skeptical, with Kerrisdale Capital calling Principia’s pipeline “worthless.” Not much has happened since to change their minds. On September 9, the company announced that its Phase III PEGASUS trial of rilzabrutinib for pemphigus flunked the study, failing to meet primary or key secondary endpoints. The drug was part of the Principia acquisition.

According to a California WARN notice, Sanofi is shuttering Principia’s laboratories in San Francisco and laying off about three dozen employees. The pink slips will take effect on October 8. And according to a Sanofi spokesperson, they are re-evaluating their plan for the South San Francisco location after high turnover rates. The labs will be completely vacated by April 2022.

The Principia deal was largely around its Bruton tyrosine kinase (BTK) inhibitors. BTK is found in the signaling pathways of key innate and adaptive cell types in the immune system. Inhibiting or blocking these pathways has the potential of halting inflammation and tissue damage caused by autoimmune diseases. The pipeline also included ’168, which Sanofi had previously licensed from Principia in 2017. In addition to rilzabrutinib, it also picked up PRN473, a topical BTK inhibitor.

On September 8, Sanofi acquired New York-based Kadmon Holdings for about $1.9 billion. The deal is intended to grow Sanofi’s General Medicines core assets. Kadmon has a recently approved drug, Rezurock (belumosudil), a first-in-class drug for chronic graft-versus-host disease (cGVHD) for adults and pediatric patients 12 years and older who have failed at least two previous lines of systemic therapy.

“We are excited that Sanofi has acknowledged the value of Rezurock and the deep potential of our pipeline,” said Harlan Waksal, M.D., president and chief executive officer of Kadmon. “By leveraging Sanofi’s global resources and long-standing expertise in developing and commercializing innovative medicines, Rezurock is now well-positioned for global accessibility, faster. I want to thank the entire Kadmon team, including management and the Board of Directors, and the Sanofi organization, for their ongoing commitment to patients and their caregivers.”

Kadmon’s pipeline compounds include drugs for immune and fibrotic diseases and immuno-oncology treatments.

And on September 14, Sanofi announced it had completed its acquisition of Translate Bio for about $3.2 billion. Translate Bio has an mRNA technology platform, one of the hot new areas for development not just for vaccines, such as those for COVID-19 developed by Pfizer, BioNTech and Moderna, but potentially cancer and other indications.

Although the future of rilzabrutinib is in question, the multiple sclerosis drug tolebrutinib is being evaluated in four pivotal clinical trials, although data is not expected until 2023. Sanofi is undoubtedly hoping the drug is worth the money they invested in it, particularly since in March 2021, the U.S. Food and Drug Administration (FDA) approved Janssen, a Johnson & Johnson company, MS drug Ponvory (ponesimod), which, in a head-to-head Phase III trial, proved to be superior to Sanofi’s MS drug Aubagio (teriflunomide). The FDA first approved Aubagio for MS in 2012.

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In April 2020, tolebrutinib met both the primary and secondary endpoints in a Phase IIb trial in relapsing forms of MS, significantly reducing disease activity associated with MS as measured by magnetic resonance imaging (MRK). That sounds promising, but the data isn’t quite as clear-cut since they used a surrogate endpoint, and other critics have noted its complex trial design and the low number of patient participants.

As Jacob Plieth, writing for Evaluate Vantage, noted in February 2020, “SAR442168’s mid-stage study had such a convoluted design that a detailed analysis is needed to tease out its real benefit. … The study toplined today enrolled only 128 subjects with relapsing multiple sclerosis, yet had no fewer than eight cohorts, comprising four different doses given either before or after placebo. Moreover, its primary endpoint did not relate to relapse rates or MS progression, but the number of new Gd-enhancing T1 hyperintense lesions. Investors should ask themselves on what basis a trial with such a complex design, measuring an MRI surrogate endpoint, can be said to have yielded a positive result.”