A Cal­i­for­nia biotech’s can­di­date has flunked a late-stage tri­al in pul­monary sar­coido­sis, send­ing its shares ATYR crash­ing about 80% at mar­ket open on Mon­day.

Though aTyr Phar­ma aimed to re­as­sure in­vestors that there could still be a path for­ward for the drug, which is called ef­zofiti­mod, Wall Street an­a­lysts re­main skep­ti­cal.

The com­pa­ny was test­ing ef­zofiti­mod in a Phase 3 study of 268 pa­tients with pul­monary sar­coido­sis, a rare dis­ease that caus­es short­ness of breath and per­sis­tent dry cough. It’s cur­rent­ly treat­ed with oral cor­ti­cos­teroids, and the tri­al’s pri­ma­ry end­point as­sessed how much pa­tients could cut their steroid use when tak­ing ef­zofiti­mod com­pared with place­bo.

No­var­tis is on a deal­mak­ing tear, and the Swiss phar­ma gi­ant is re­turn­ing to Monte Rosa Ther­a­peu­tics for a deal worth more than $5.7 bil­lion in biobucks.

The tie-up with the Boston biotech comes with $120 mil­lion up­front. It re­volves around an undis­closed dis­cov­ery tar­get and the op­tion to li­cense two pre­clin­i­cal im­munol­o­gy pro­grams, the com­pa­nies said Mon­day morn­ing.

Monte Rosa's shares GLUE were up about 30% af­ter the open­ing bell.

No­var­tis was al­ready part­nered with the de­vel­op­er of mol­e­c­u­lar glue de­graders. The duo signed a deal worth $150 mil­lion up­front and $2.1 bil­lion in mile­stones in Oc­to­ber, and they de­liv­ered the first Phase 1 da­ta out of the part­ner­ship in March. The newest deal is sep­a­rate from the one an­nounced last year.

Lila Sci­ences said Mon­day that it raised $235 mil­lion to build "sci­en­tif­ic su­per­in­tel­li­gence" by bring­ing AI in­to the re­search lab­o­ra­to­ry.

The raise was co-led by Braid­well and Col­lec­tive Glob­al, fol­low­ing Lila's $200 mil­lion spring de­but. The Cam­bridge, MA-based start­up plans to use the funds to scale up, in­clud­ing open­ing hubs in San Fran­cis­co and Lon­don.

On Sat­ur­day, End­points News re­port­ed that Lila was clos­ing in on a Se­ries A megaround at a $1 bil­lion-plus val­u­a­tion. A source fa­mil­iar with the mat­ter, who spoke on con­di­tion of anonymi­ty, said Lila was ex­pect­ed to raise $300 mil­lion or more. Ad­di­tion­al in­vestors could close in a lat­er, sep­a­rate tranche, boost­ing the size of the round past $235 mil­lion, the source said.

A Lila spokesper­son de­clined to com­ment Mon­day on the pos­si­bil­i­ty of ex­pand­ing the A round.

Plus, news about Revvi­ty, Ocu­gen and Kwang­dong:

🏛️ FDA ex­pands la­bel for Krys­tal Biotech’s gene ther­a­py: Vyju­vek, which is used to treat a skin con­di­tion called dy­s­troph­ic epi­der­mol­y­sis bul­losa, is now ap­proved for pa­tients from birth. It was al­ready ap­proved for those six months old and old­er. The dis­ease caus­es very frag­ile “but­ter­fly” skin, which can lead to fre­quent wound­ing and pain. The gene ther­a­py, which is ap­plied to the skin and reap­plied reg­u­lar­ly, can al­so now be used at home by pa­tients and care­givers. The up­dat­ed la­bel al­so gives pa­tients more flex­i­bil­i­ty when it comes to man­ag­ing wound dress­ings. — Lei Lei Wu