# Episode 144 - June 6, 2025 Biotech Hangout · 2025-06-10 · 59 min · https://podcasters.spotify.com/pod/show/biotechhangout/episodes/Episode-144---June-6--2025-e342hkq ## Transcript Brad Loncar I don't know if the Biotech Hangout crew tweeted or teased this, but John Crowley was actually supposed to join us today, so we had a lot of policy issues to talk about. Sadly, he had a scheduling change and won't be with us today. But there is a lot to talk about. ### Sanofi Buys Blueprint Sam and Eric, it's always nice when we get M&A. It's been lacking, at least in a big way, ever since January, when we had the big J&J neuro deal. Sanofi announced that they're going to acquire Blueprint Medicines for over $9 billion. That's a pretty good deal. I'll kick it over to you guys to comment. Sam Fazeli Eric, you go first. Eric Schmidt Sure. Big picture, you're right, Brad. It's always great to have M&A in this space. This is, I think, the second-largest deal we've seen after Intra-Cellular Therapies this year, so it's sizable. The premium wasn't all that big, coming in at about 27% or so. I guess from my standpoint, I've been involved with Blueprint Medicines for a while. I had the good fortune of taking them public, and I think what's great about this acquisition is this is kind of the way that biotech success stories really should play out. This company went public about 10 years ago. I think the IPO price was $18 per share. At the time, not very many of us had ever even heard of the diseases they were going after. Systemic mastocytosis sounded like Greek to me. We came to learn that there were certainly a lot of patients suffering from this disease, both the advanced and indolent forms. Kudos to the team at Blueprint. At the time, it was led by Jeff Albers. Kate Haviland has followed Jeff in his CEO role, and of course, Alexis Borisy has been a longtime chairperson there. They identified that there were these patients in need, they created solutions, and I think they really executed to a T. They built a ton of shareholder value, almost a 10-bagger over 10 years. What a great ride. This is the way that biotech should play out: You should invest wisely, you should treat patients, and you should bring better solutions to the world. We're going to lose Blueprint, but the world is probably a better place because of this company's existence. That's what I would say here. Sam Fazeli Yeah, Eric, I was listening to our friend Adam Feuerstein on the podcast that they do on Thursdays, and he was lamenting a little bit—or I don't know if you could call it lamenting—that we're going to lose, again, another company that could have been more of a success story and therefore not gotten to be one of the future Amgens. Frankly, we seem, in the biotech world, to want our cake and eat it. We ask for M&A deals, and when the little ones get done, we go, “Oh, well, that's too little. It doesn't really count.” When big ones get done, we go, “Oh, see this? It could have been an Amgen in the future.” I'm not having a go at Adam, but God forbid. It is something that I think is exactly the right thing to happen. Hopefully, fingers crossed, some of that cash gets redeployed back into the sector. I don't know, but I'm assuming that would be the case. I'm hoping that a lot—at least some of the specialists—will have to do that still. I think you're right. I've counted 11 deals on our database since the beginning of the year, and the next-largest one was Lilly's acquisition of Scorpion Therapeutics. That was also a cancer indication, although these guys have a cancer indication, but this is not the main driver for this asset. What about from the perspective of Sanofi? It fits rare diseases. It fits in the immunology space, where they want to be the world leader, and that is a stated hope. It gives them a possible $2 billion drug by 2030, if consensus is right. You're paying $9.1 billion, and that's not ridiculously stretched. I can't imagine this is a low-margin product in terms of the need, the way you sell it, and how you find the patients. I don't know; you could probably speak better to that. It fits well in the general story, but it's not a game changer for Sanofi. I suppose M&A deals generally of this size will not be a game changer for large pharma, right? Brad Loncar That's actually the thing that stood out to me, Sam. I hate to say this, but Sanofi has a reputation for paying a lot for risky things, many of which have blown up in the past, and I feel like this is a really mature deal for them. I think it's probably a really good thing, and I think the timing is right as well. All companies, even good ones like this that have a lot of meat on the bones, have been affected by lower valuations. If you can strike for a pretty big deal like this at a time like this, I think it's probably pretty smart. Sam Fazeli Yeah. It would be interesting to see if there were lots of other bidders out there, because the multiple, or the premium, wasn't eye-watering, right? On the other hand, $10 billion or $9.1 billion isn't bad. This is one time where the CVRs kind of don't matter. It's $120.29 per share and a $2 CVR for development milestones and a $4 CVR for regulatory milestones. I'm assuming most of them are achievable, given how low they are. But you almost wonder why they're even there. ### The VEGF PD1 Deal Race Brad Loncar All right. Let's move on to the other deal. We could probably talk for an entire hour about all the VEGF/PD-1 deals, and of course, Bristol struck a deal and has partnered with BioNTech on theirs. We recently had the Pfizer and 3SBio deal. They paid $1.25 billion upfront and up to $5 billion more. We saw some of 3SBio's data at ASCO this past week. We also had the huge Summit-Akeso news, which was pretty controversial, I think. There was something for both bulls and bears in there. Maybe I'll start with Eric. I know I read a report that you put out really questioning the sell-off in Summit after the Akeso news. Let's maybe start with that. What was your reaction when you saw that? Of course, the headline was that the PFS hazard ratio looked fantastic. I think it was 0.52, but we still don't have a win on overall survival yet. Eric Schmidt Thanks, Brad. Maybe just to step back for the bigger picture here: Summit and Akeso are partners. They're kind of the granddaddy of them all in the PD-1/VEGF bispecific space. They're in the lead, running multiple Phase 3 studies, and this is the drug, ivonescimab, that really started it all and got people excited about the field. As many of you know, it's Summit and Akeso that have now worked on 2 head-to-head Phase 3 studies against pembrolizumab, the world's largest pharmaceutical product today, and beaten pembrolizumab head-to-head in lung cancer. That's why the excitement is here. One remaining piece of the puzzle that we had just not seen at all before was whether the Akeso head-to-head data were going to translate into the United States. All of the big, key studies have been done in China, and I thought this was by far the biggest bear case on the stock—and a reasonable one to boot. We've definitely had KOLs note that Chinese patients have different genetics, different cancer genetics in particular, and that translation from a China population to a U.S. population cannot be assured. The news from late Friday last week, Brad, as you know, was the HARMONi study. It was the first dataset that included not just a Chinese population, but a U.S. population. In my opinion, Summit really went out of its way to tell us that the 2 geographical subsets in the study had consistent data. We got to see them at the ASCO conference and spent some time with the management team. They're pretty adamant that they've checked this box, that translation, at least in this case, is consistent. The HARMONi study is not the largest of markets. We're talking about a second-line subset of lung cancer—those that are EGFR-positive. But at least in this HARMONi trial, management was quite adamant that there's consistency across the geographic subsets, which is what I thought investors really wanted to see. As you noted, the stock sold off—not up, but down. I think that was because, in the second-line EGFR-positive population, which to me is a fairly small market, the company acknowledged that it may not be able to submit for FDA approval because they've barely missed their overall survival endpoint. The P-value was 0.057, which is not statistically significant. They've spent all of their alpha at this time point, so the P-value will never be statistically significant. Even if, as the data mature, the P-value crosses 0.05, it will still be a nominal P-value going forward. The Street is really keen to see a survival result. I'm curious, Brad, about your views here. I get that survival's important, but when we talk to people, if you have a hazard ratio for survival that's anywhere in the 0.8 range, that seems like a strong trend. It seems like a drug that's going to be used based on very strong PFS and borderline OS. But please tell me what I'm missing. Brad Loncar What we're missing is that there's still no real, conclusive hypothesis for why this combo in a bispecific should work. Roche studied VEGF and PD-1 as 2 separate things in combination and never really succeeded. There's always that hypothesis out there that VEGF can shrink tumors initially but accelerate metastases over the long term. Without a clear hypothesis for why the bispecific would be better than 2 things together, and with nobody actually hitting on OS yet, I think it's still a legitimate risk. I'm in the camp that this is all going to succeed in the end, but I do think that we're not there yet. I do think it's a legitimate risk that's still on the table. Sam Fazeli Look, I watched this, and I was going into it thinking the key value of this trial was not the potential to get approval and get some sales, because there's an incumbent from Johnson & Johnson with a different regimen for post-EGFR patients. It's approved, and in fact, it's approved without an overall survival signal. Even on the second interim read, they haven't hit it yet, but it's out and it's approved. There are other drugs coming. AstraZeneca's working on a TROP2 drug, and there are other ways that people are trying to treat this particular patient group. So commercially, even if it doesn't get approved, all I was looking for was this read-across from China to, as Eric said, the West, if you like, the US. I also heard a few people say—and I don't know whether you want to call it misinformation or just wanting to be a bear—that even that patient group was so immature they couldn't possibly have made a difference to the hazard ratio. You look at the events and think, “Hang on, how is that possible?” The last patient treated was in, recruitment closed in August, and it had been open for roughly 2 years, or a year and a half or so. So it's very possible that, at least on the PFS hazard ratio, a lot of the US patients were already counted. Maybe on OS you haven't had enough events in that latter group, and perhaps it doesn't work out in the end for OS. I was standing there listening to someone telling me this, and I was thinking, “These people are just looking for excuses,” which is natural. It was the same as what people did in the early days of Krazati, if you remember. They were just trying to find reasons why it wouldn't work. I'm not just here trying to parallel it to yet another Chinese asset. The issue then also ends up being that you just have to wait until you see the actual detail. It was 0.52, Eric, versus 0.47 or 0.46, depending on which data point you want to look at back in China. You can start doing some magic math, which I hate doing because it's pretty much always wrong, to see what the hazard ratio was in the US population. Let's say it's 0.62. Why is that bad, right? I was also a bit agog at the share-price reaction. Brad Loncar Do you guys have any thoughts on Bristol partnering with the BioNTech asset specifically? Sam Fazeli Sure. I'll kick that off, and then Eric is pretty sure to have some meaningful thoughts on it, too. One of the things that I always worried about with the BioNTech asset—and there's another company that's got a PD-L1/VEGF bispecific, and that's Instil Bio—is that, on the one hand, if you took a vote around the conference and asked anyone you bumped into, “Is PD-1 better than PD-L1?” they would say yes, because of the history of what we know: Keytruda and Opdivo versus durvalumab and atezolizumab. Then you ask them, “Do you think a PD-L1/VEGF would be better than a PD-1/VEGF?” and they start getting all hypothetical. Hypothetically, PD-L1 should really be the thing that you use to target things to a tumor, because it's expressed on the tumor. But it always made me worry that, in the background, people are eventually going to find that this ends up going down the road of other PD-L1s. The deal kind of takes some of that risk away. I don't think it clarifies the situation, but it takes some of that risk away. Now you have the opportunity, partnered with Bristol and taking some of that cash—$3.5 billion pretty much guaranteed through 2028—to possibly do a combo with a PD-1. I know initially you think, “What, Sam?” But if you think about it, if you're using the PD-L1 as a targeting molecule and you've got the PD-1 to do its job on the T cell, there is some kind of logic. But I'm not going to be designing those trials. That's what I thought about it, and I think it was really good for BioNTech. Eric Schmidt Sam's touching on something that's really important in this debate. There's just so much that we don't yet know about these drugs, these bispecifics. We know that they're interesting and active. I think we know that they're differentiated. Brad, I'll take you up on your prior point that this could be a VEGF plus PD-1 monovalent antibody combination. It's possible, but I think we're seeing some differentiated properties here, too. We're not seeing the side effects that you'd expect from systemic VEGF. We're seeing activity in squamous tumors that you wouldn't expect from VEGF on a safety-profile basis. We're seeing head-to-head activity versus pembrolizumab that we wouldn't expect. We're seeing activity in second-line EGFR-positive patients where you wouldn't expect PD-1s to have an impact. There's a lot going on here, right? That's why there is all this interest, whether it's from Merck, Bristol, Pfizer, or others. I just think that we're going to need to be a little bit patient. We'll probably need to buckle up, because the world has shown us that Summit is going to be extraordinarily volatile as a security as we turn over some of these cards. Over time, data will win. Brad Loncar Did you guys have a chance to see the 3SBio poster? I didn't, but it looked like from Twitter that everything was pretty positive and genuinely impressive. Sam Fazeli I did, and we wrote on it, Brad. One of the first things that you look at as an analyst when you see data updates is to compare them to the last data update. We've got a little table that follows it from the J.P. Morgan Healthcare Conference 2025 to the ASCO abstract. They went from 24 patients to 25 patients in the ASCO abstract, and then, at ASCO itself, the data went up to 34 patients. The overall response rate did soften a bit, from about the 70% range to the 67.5% range. Is that even fair to call it softening a little bit as you add more patients? The cutoff is March, so there's room for some of those responses. Maybe some of the stable patients might become responders. The disease-control rate remained at the top end, so nearly 100%. What I liked about the spider plot is that one of the things people always say about VEGF is that it's a first-scan effect, so you're potentially getting that vasculature impact on the first scan. When you look at the Summit-Akeso PFS curve, it does give you that little hint, possibly. You get a big drop on the first scan, and there is a parallel line on the Kaplan-Meier PFS curve. When you look at this data and other data from presentations in this area in general, you see that, in the spider plot, the responses keep getting deeper. This is not just about the first-scan effect in the same patient, right? It's not just the first-scan effect. I'm pretty sure somebody much more knowledgeable than me can explain that in a different way and say, “Actually, no, Sam, it's still a first-scan effect. You're wrong.” I don't think so. It just looks pretty good. It looks like it could be one of the best out there. When you look at it in terms of AEs, one thing I do worry about is that I always look at proteinuria and hypertension in these trials, because that's the VEGF signal, right? It's not low: 17% grade 3 hypertension. There was no proteinuria, but 17% had grade 3 hypertension. This compares with a much larger dataset for SMT112, at 5% grade 3 hypertension. These molecules are different. They're not all doing the same thing. Of course, when you start looking at the BioNTech one, BNT327, you see even higher numbers, but it's often combined with chemo. We haven't seen many single-agent BNT327 datasets, so that gets a bit complicated to try to understand. Frankly, it looked pretty decent. ### Vera Enters the IgAN Race Brad Loncar All right. We'll get back to ASCO in a second, but let's talk about some other really interesting non-oncology data that came out this week. The first one, Eric, is Vera. So that's the IgAN space, and we just had some news from a competitor company about that today at EULAR as well, right? Eric Schmidt Yeah. What a round trip so far this week for the Vera guys. I can imagine their heads spinning. You're right: They came out on Monday this week with what we thought were some fantastic data in the IgAN space—the IgA nephropathy space. For those less familiar with what's going on here, IgAN has been sort of an untreatable disease for decades. The standard of care is essentially symptomatic management, or nondisease-modifying therapies that allow the kidney to function a little bit better but don't reverse, retard, or slow the downward progression. All of the therapies we're about to talk about, and others, are operating on B cells, which appear to be fundamentally causative agents in this disease. The folks at Vera have a drug called atacicept, and it's a BAFF/APRIL inhibitor. The phase 3 data that they put forth earlier in the week showed wonderfully strong reductions in proteinuria, placebo-adjusted, kind of in the low 40s. We already know from previous datasets that atacicept also slows, if not completely retards, the degradation of kidney function in patients. So they've got a very comprehensive dataset, and with this phase 3 result that came out on Monday, they intend to file for approval toward the end of the year. Meanwhile, a competitor just came out on the tape today: Otsuka, with their drug sibeprenlimab. This is an APRIL-only inhibitor, so it's very related in its mechanism. We're not quite sure whether there's a benefit to inhibition of both BAFF and APRIL in addition to APRIL alone, but at least in preclinical models, the dual inhibitor does look a little bit better. Nonetheless, Otsuka has some very solid data of its own. If anything, they're showing proteinuria data that's a little bit better in terms of the absolute magnitude of reduction than atacicept from Vera. I don't think you can make a comparative efficacy claim on that. I'll take issue with our friend at STAT News, who published that the Otsuka data were better. I don't see that in the database. I think there are some baseline variables that confound any such analysis. Honestly, what kidney patients care about, and what doctors care about, isn't whether you have lower protein in the urine. It's whether, over time, your disease is more stable in terms of the downward progression of kidney function. Again, that's data that Vera has, and so far at least, Otsuka doesn't. Bottom line, these are both going to be very quickly embraced and widely embraced therapies for IgAN patients. We think this is a huge market. We think it's probably a $15 billion-plus kind of opportunity. I feel for the folks at Vera, who had some wonderful data and now are maybe playing defense in an area where, again, we've talked about this before on this show, there is no usual winner-take-all phenomenon in biotech. We're probably going to talk about this when we talk about Bicara and Merus in a few minutes. This IgAN space is certainly big enough for 2 players, and I think both companies are going to make a lot of money here. But Brad, Sam, I don't know if you guys have additional thoughts. Brad Loncar I would just say that I always want to be careful about talking about M&A, but that's kind of the Vera story. As you pointed out, this is a huge market. When I see data like this that's trying to compare 2 different companies, I think about what this drug could look like commercially one day in the hands of a much bigger pharmaceutical company, especially given what a huge market that is. I think Vera's having a pretty good week. I don't know what will happen with them, of course, but I would say that being as competitive as they are in this space puts them in a really good position. As you know, there have been a lot of deals in the nephrology space over the last couple of years. It's definitely an area of increased focus for the larger companies. Sam Fazeli Yeah, Brad, I just wanted to add something, not specifically on this. I know how I feel. I can almost sense that you two are exhausted from ASCO, but I'm not going to say that is the case. We've actually had a pretty exciting week, and I don't know if others are hearing us as enthusiastic and enthused. I just want to make sure that folks listening are not thinking that we've had a bad week because it started with 2 deals, essentially—one much bigger than the other. We've had a ton of good data, some share-price moves in the wrong direction, but some on the upside. The XBI, for however much we love it or hate it, is meaningfully up in the week and also since its low. I just want to make sure people don't walk away thinking that we're all down in the mouth. ### Protein Degradation Breaks Through Brad Loncar Well, yeah. I'll take that handoff real quick and transition to our next piece of data that I thought was super exciting. One thing that biotech always needs is a new technology to get really excited about. I think the PD-1 × VEGF and the whole bispecific space is turning into that. One new technology that I'm really excited about, if you think about it, is really in the first inning: protein degradation. Arvinas, weeks ago, had the first-ever phase 3 trial readout of a PROTAC, and the market viewed it as disappointing because it was a breast cancer trial in which they degraded the estrogen receptor, and it only worked in a subset of patients. But it was a successful phase 3 trial for 40% of this particular breast cancer group. Then I think Kymera had a really exciting announcement on Monday. This is just healthy-volunteer data, but they're big believers in the STAT6 target. The whole idea of this class is to have a new modality that can potentially make a simple oral therapy. The idea here is a once-daily oral competitor to Dupixent. They had data from healthy volunteers, so we have to see how it translates into people with actual inflammatory diseases. From doses of 1.5 mg and up—they went to 200 mg, some huge number—from 1.5 mg and up, they had 90% degradation and a really clean safety profile. Even in biomarkers that you look at for potentially treating diseases—which is pretty tricky in healthy volunteers because, by definition, they don't have the disease—they saw really nice reductions in T2/Th2 biomarkers, TARC, eotaxin-3, and other biomarkers that would suggest that this might work in actual patients. They've already moved to the phase 1b portion of this, so we'll see actual atopic dermatitis patient data sometime in the 4th quarter, toward the end of the year. Now they're moving it into other things like asthma. I think protein degradation is going to be a technology that could add some real excitement to the biotech sector over the coming years. It's very early, and like any technology, there are going to be ups and downs. I guess you could argue that we saw that with the Arvinas data. But in terms of something new around the corner, I think it's something to be excited about. Sam Fazeli Yeah, look, Brad, I think you're absolutely right because it gives you a whole new set of targets to work with that may not be amenable to standard enzyme inhibition, if you like. It just opens such a big window of opportunity, assuming you can get the molecule design right and the pharmacology right. I think it's going to be an absolute cornerstone of future drug development. Brad Loncar For sure. Ironically, on the exact same day, Nurix struck a STAT6 deal with Sanofi. Nurix will have BTK data at EHA next week, and we already saw BeiGene have BTK data at the last ASH. I think it's something to watch closely. ### ASCO Reveals New Cancer Targets But let's go back to ASCO. Eric, I'm going to start with you. What were your overall impressions? Was this an up year, a down year, or kind of middle of the road? Eric Schmidt Yeah. I'll come back to Sam's comments. I hope that our tiredness—I mean, I'm just exhausted. It seems like this week won't ever end. But I hope that our listeners are not interpreting that as anything but a wonderful week for biotech and a wonderful week for oncology. I think in terms of ASCO, maybe you could say it was a down year in terms of there not being any major headlines or big, game-changing clinical trial results that we were previously unaware of. Certainly, there were some game-changing results. I'm sure Sam might want to talk about Trodelvy, et cetera. But what I thought was the real theme here was just how much innovation was ongoing. Maybe a lot of that was in small-cap biotech, maybe a lot of it in earlier-stage data sets. This innovation kind of creeps up on you. I think both of you are old enough to know that when we used to talk about pancreatic cancer or melanoma, or some of these really, really difficult-to-treat tumors, we used to say, “Wow, this company’s got a 7% response rate, a 12% response rate. That’s the best we’ve ever seen. That’s an active drug.” And now, in some of these tumor types, like pancreatic cancer or melanoma, we’re kind of sticking our nose up at response rates in the 20s, 30s, even 40% on occasion. So things have changed. Even at this ASCO in particular, I’ll point out some newer targets in pancreatic cancer and melanoma that I think are going to continue to be game-changers. Everyone knows that in pancreatic cancer, with the KRAS inhibitors, Revolution Medicines is kind of leading the charge there. But a new target I think is emerging that we’re increasingly excited about: PRMT5. It’s being pioneered by Bristol Myers Squibb and Amgen, to a certain extent. Maybe Tango could be one of the emerging leaders in this space as well. The data from Bristol at ASCO were showing about a 25% response rate in pancreatic cancer, which, again, is a tumor type that’s never really seen any meaningful success other than the KRAS inhibitors. So that’s highly, highly encouraging, and I think we’d love to see that combined with a KRAS inhibitor—a PRMT5-plus-KRAS combination—and just see how far this presumably fairly well-tolerated targeted combination can go. On the melanoma side, one thing that struck me was the Immatics data. This is a European company that’s pioneering a PRAME-directed TCR cell therapy. Brad, I know you love the cell therapy space, and I’m sure you were very, very happy to see that they’ve got response rates in refractory melanoma. Again, an indication where we’re used to saying something in the 20% range might be interesting, they’ve got a 55% response rate in those patients. It looks quite durable now, with follow-up out to over a year, and there’s a lot of excitement and enthusiasm for their phase 3. All of the KOLs were really raving about this candidate, at least those that we spoke to. So it’s great to see that innovation, and it does sneak up on you. Sometimes, being away from ASCO, you come back after a few years and say, “Wow, this is why we do this job.” Brad Loncar Sam, I think if you had to declare a winner of ASCO, probably most people’s bets would have been on AstraZeneca. Of course, Enhertu, with its partner Daiichi Sankyo, had another important year in breast cancer. Tell us about AstraZeneca’s ASCO. Sam Fazeli Yeah. Brad, I hear people go, “Oh, this is not a very exciting ASCO to go to.” And then we all come back with all these new molecules—PRMT5, which Eric just spoke about, and the evolving data for KRAS G12D, which I’m sure we’ll talk about in a little bit. Here you get trials that are going into tumors that have not necessarily had the best of luck so far, pancreatic cancer being one of them. I’ll start off by saying this felt like another AstraZeneca ASCO, or at least one of the key players was AstraZeneca. Seven years in a row they’ve gotten a plenary, and they’re very happy to keep highlighting that. No standing ovation, though. I was sitting next to a friend of ours who’s on the buy side, and they were looking for a standing ovation. They didn’t get it this time, but there was lots of clapping. So what did we get? We got Imfinzi in the MATTERHORN study in gastric cancer—a really unprecedented event-free survival benefit. That was really, I think, pretty much ready to give you that practice-changing setup. Then you went into Enhertu for the first-line HER2-positive setting in the DESTINY-Breast09 trial. That also seemed to suggest that it’s opening up another significant patient population or opportunity. And, of course, as Eric highlighted, Trodelvy in the ASCENT-04 trial: first-line PD-L1-positive triple-negative breast cancer combined with Keytruda, with a really pretty impressive PFS hazard ratio of 0.65. You add that to the ASCENT-03 data that we had in PD-L1-negative patients, and the results really do suggest a meaningful opportunity here for Gilead’s Trodelvy in that space. When I want to talk to folks outside the field and say, “Look, cancer is—” everyone says, “Is there a cure?” I’m just saying there are now people with myeloma or breast cancer who live long enough to die of something else. If you can’t call that a cure, I don’t know what you’re looking for, right? I’m just hoping melanoma is the same, right? I’m just hoping that the same will start happening with some of these other tumors, and the early data that we see at ASCO is what gives us hope that we’re going to get there. Brad Loncar I would echo that. I think Gilead had a really good ASCO. This is their biggest ASCO in years and years, and Trodelvy’s really starting to bloom. These breast cancer indications that they’re succeeding in now are a really big deal. Let’s not forget that cell therapy is cooking, too. Kite now has about $2 billion a year in revenue for them, which is really amazing. A lot of critics would never have predicted that. I’d also say that I don’t feel like we talked a lot about cell therapy at this year’s ASCO, but they had some interesting brain cancer data that I thought was kind of fascinating. Getting back to Trodelvy, one thing that really stood out to me as I was thinking about that is to look at all the investments they’ve made. They bought that asset for over $20 billion, and look at the roller coaster that it’s been. One thing that I thought of was the long road of how they’ve taken it from where it was to where it is now, really accelerating. I don’t think a smaller company could have done that. With some of the clinical trial setbacks and the changes that they had to make, and the amount of money that they’ve invested in a development program like that, I think it really makes an argument for the value of scale and big companies for certain assets. I think they deserve a lot of credit for always being full speed ahead on Trodelvy when a lot of critics, maybe us included, at times were really critical of that deal and their development program. Sam, speaking of AstraZeneca, one of the companies that I interviewed for BiotechTV was Arcus, and they had their HIF-2α data at ASCO. But I know one thing that we were talking about on the sidelines is the whole TIGIT field and all of the disappointments that we’ve seen there lately. Roche, of course, had the big SKYSCRAPER miss. A lot of companies have divested their programs. BeiGene did recently. We just had iTeos literally close shop about a week ago. Interestingly, there are 2 companies that are full speed ahead on TIGIT. One of them is AstraZeneca, and they’re specifically doing bispecifics; the other one is Arcus. I think it’s setting up to be potentially a fascinating story because there’s something that those 2 things have in common: both of those programs are Fc-silent. I know both companies strongly believe that that’s a huge factor that makes them night-and-day different. What’s your take on that? I think AstraZeneca now has— Sam Fazeli Yep. Brad Loncar AstraZeneca now has 10 key studies going full steam ahead, right? Sam Fazeli Yep, yep. Brad, I’m a simple person, so when I think about having an Fc-active region on a molecule that binds to a T cell, it just worries me a little bit, right? You think, “Well, why would I want antibody-directed cytotoxicity against the T cell?” That’s the only argument I find against having the Fc, and maybe you can also manage the side effects a bit better if you didn’t have the Fc active. In terms of AstraZeneca, they’re really putting their money where their mouth is, right? They’ve got 10 trials. What have I got here? 1, 2, 3, 4, 5 in non-small-cell lung cancer, 2 in biliary tract, 1 in HCC—hepatocellular carcinoma—1 endometrial, and 1 gastric. What’s interesting here is that this adds up to about 8,000 patients, all phase 3 trials, right? 10 trials. So they have seen a signal, and Susan Galbraith talks about this signal that they had a poster on at SITC, which, unfortunately, is the one conference I didn’t go to this year and the one that probably had that one little interesting nugget. They’re seeing an interferon-gamma signature response in some of the patients. I don’t know the full story; I need to see the poster. The reality is that they presented 2 sets of data. And, just by the way, out of these 10, only 1 of them is monotherapy. This is not monotherapy, right? This is a bispecific. This is PD-1/TIGIT. So the rest are Dato-DXd, which is the TROP2 drug, so it brings you back to thinking about how that could play out for Gilead, given that they've got access to the Arcus drug. As far as I remember, they must have given up, right? I don't know if they've given up. You'd remind me. I'm getting a blank here. Brad Loncar They have not. Sam Fazeli They have not given up. There you go. Brad Loncar Yeah. Sam Fazeli So, can you imagine a combination of Trodelvy plus TIGIT if one of these trials reads out? And they have T-DXd also in HER2 combinations. They've got chemotherapy, and they've got bevacizumab plus tremelimumab. In fact, that's their answer. Every time somebody asks them, “Why don't you get a PD-1/VEGF?” they go, “Well, we're actually doing tremelimumab plus bevacizumab in the hepatocellular carcinoma setting.” So the data they presented was on this drug called rilvegostomig. I have to say, it looked pretty decent when I was looking at the lung cancer data they showed—I think it was TROPION-Lung04. We had 71% ORR in the PD-L1-high patients and 40% in the negative patients. All the cuts surpassed the monotherapy results that we saw—surpassed the rilvegostomig monotherapy results that we saw. Of course, you have to watch out for adverse events, right? As soon as you put TROP2 in there, a whole bunch of new adverse events come along, stomatitis being the one that really upsets people. Fifty-three percent was the rate in the trial. So how this pans out into the phase 3 trials, I don't know. And then they had the biliary tract cancer trial, the GEMINI data, which was a combination with chemotherapy versus Imfinzi. They showed a slightly higher objective response rate here—31%—versus, I think, the TOPAZ trial, if I remember correctly. So, again, another positive signal on pretty much every line. And now BTC is in 2 phase 3 trials. The signals are there. AstraZeneca is going for it, and we're going to see the real outcome of all this from 2026 to 2027, I think, as the trials read out. Eric Schmidt Maybe this is how AZ is going to win ASCO 2026, 2027, 2028, and beyond. Who knows? Sam Fazeli Well, no, I think— Eric Schmidt Brad, I— Sam Fazeli I think 2026 will probably be AVANZAR, right? Which is TROP2 plus, yeah, IO. Eric Schmidt Brad, love your thoughts on the Arcus HIF-2α that you mentioned. It looked pretty good to me. Do you think it's differentiated? Brad Loncar Yeah. Well, I think it's almost like the IgAN discussion we just had. I think it's potentially such a huge market that, if they're second and even just comparable, I think it's a huge market and a huge opportunity for them. I do think that their data looks slightly better than Merck's right now. People really like this asset because, of course, you have a validated target that's on the market right now. If we were talking 2 years ago, everyone would've said that TIGIT was Arcus's main program. Given all the volatility it has had and how Merck has succeeded with HIF-2α, I think for sure that HIF-2α is now Arcus's main program, and I think it's super interesting. I'm going to move on to— Sam Fazeli Brad, can I just correct myself very quickly here, just for perfection's sake? The GEMINI trial is rilvegostomig plus chemotherapy in HER2-negative BTC. That's it. Brad Loncar Right. I'm going to move on. Eric alluded to it earlier, but something that was a really interesting bull-bear debate at ASCO. I always preface this by saying we're rooting for everyone's success. Obviously, in our industry, everyone—the companies themselves—we want patients to succeed. But the reality of our business is that we do have competition. I think the big competition at this year's ASCO was Merus versus Bicara. This is head and neck cancer, which traditionally is a very difficult cancer to treat, and the checkpoint inhibitors by themselves have very low response rates. We definitely need something new, and these 2 programs are slightly different. Bicara is a fusion protein that's EGFR × TGF-β, and Merus is more of a traditional bispecific antibody that's EGFR × LGR5. Eric, I'll pass it over to you. I don't know if you cover both of these companies or just one, but I'm interested to know what your thoughts are on this potential competition. Eric Schmidt Yeah, and thanks, Brad. We cover just Bicara, and I think the theme of our discussion today is this fight-to-the-death competitive match between drugs in the same class. On Wall Street, we always like to pick a winner. We always like to think we're capable of picking a winner, and we always like to think that it's a winner-take-all battle. That's rarely how these markets play out. We can go back to our discussion of IgAN or the discussion we just had on HIF-2α. Now we're heading into a similar discussion on the frontline head and neck cancer marketplace, which is a big market, probably a $3 billion or $4 billion market. There's a real disconnect here between what the doctors are saying and what investors are saying. Physicians are much more even-handed in their views toward these 2 molecules. They're saying that both are pretty much off the charts, better than anything we've seen before. We've got response rates in the 50%–60% range for both of these molecules on top of Keytruda in the frontline head and neck cancer setting, and that's about 3 times the response rate you would expect from Keytruda alone. So this is, coming back to our other theme of the day, major, major innovation in the cancer space. Both companies are now in phase 3. Merus is a little bit ahead, and Merus certainly has some potential competitive differentiation that might become an advantage for it. On the other hand, the Street has accorded Merus essentially winner-take-all status in this battle. Merus has a market valuation of around $4 billion-plus. And Bicara, much like Arcus—I think, Brad, Arcus is trading a little bit below its cash balance. Bicara is trading a little bit above its cash balance. But generally, these 2 companies are getting very little credit for having competitive entrants in the space. We think the Bicara molecule, ficerafusp alfa, which, as you called out, hits not just EGFR but TGF-β, is looking differentiated itself in ways that might be positive from a competitive standpoint. The depth of response and duration of response here look very good to me. So, sure, you can certainly buy the class, and the class is probably undervalued in some of these competitive battles. But markets have a way of evening out over time, and we're hopeful that Bicara will get its due. What are your thoughts? Brad Loncar Well, I think, Eric, one of the things people are questioning about Bicara is that the Merus one seems to be working in both HPV-negative and HPV-positive disease. I know HPV-positive is a much smaller indication, but people are maybe using that as a benchmark for comparing the 2. If one is working in both patient populations and one company seems to have pretty much abandoned that HPV-positive group, maybe that says something about the strength of their assets. What do you think about that argument? Eric Schmidt That's a great point to make. Thank you for bringing it up. Interestingly, we talk about head and neck cancer as head and neck cancer, but physician experts these days increasingly think about it as, as you just parsed out, HPV-positive and HPV-negative disease. They almost view these 2 disease states as very different, as if they're different histologies, different tumor types altogether. You're right. It is true that Bicara has selected the HPV-negative subset. It actually has very good biologic rationale for pursuing HPV-negative patients. That's based on preclinical data and now increasingly translational data in the clinic to support the use of not only the EGFR aspect of the molecule but also the TGF-β aspect, and why, molecularly and mechanistically, this makes sense to go after HPV-negative tumors. So I'm a big believer that they've actually turned what could be a negative into a positive by selecting out the patients that are most appropriate for their therapy. This may be where we do see some differences. The Merus molecule doesn't work through TGF-β. It may be active in HPV-positive patients, but it also may not be as active in HPV-positive patients. So, again, we've got something to learn here, and it's probably not going to be a one-size-fits-all market. Brad Loncar I just want to mention, I did 15 interviews throughout the 4 days of ASCO for BiotechTV, and the one I did with the CEO of Bicara, Claire Mazumdar, was actually my favorite. This is—you know, I've always been a big believer that the best CEOs, just like the best leaders in our industry, period, everyone wants to do media when things are terrific and going great. And not to say that she had a bad ASCO, or even that the competitive... As you're hearing now, there's a strong argument to be made for this. But it was controversial, and especially doing video is a whole different thing, too. People get nervous about maybe saying the wrong thing on video or whatever. She came and really stood up for herself, her company, and her data, and we had a good, I think, balanced discussion about it. I brought up a lot of the bear arguments, and I'll let viewers decide on the substance of the answers and everything. But I thought she did just a terrific job of being out there and being visible at a time when her stock price wasn't so great after they put out the abstracts, and some analysts were really being hard on this comparison and everything. So I just want to give her credit and point out that that's what true leaders do. Credit to her for doing that, and I thought it was a great discussion. ### The FDA Turns Toward Innovation We only have a couple of minutes left. Sadly, it would have been great to have him on, but as I mentioned at the start, we almost had John Crowley on today. Given everything that we've talked about, I don't know how we would have fit in all of the policy stuff that's been going on. But I think maybe we'll just briefly touch on one. So there was a big cell and gene therapy meeting, and of course everyone is wondering, with Vinay Prasad, given some of the previous things that he said about some gene therapies like Sarepta and things like that, what the FDA's stance is going to be on some of those types of emerging technologies. Did either of you guys see any of that meeting or any of the comments out of it, and do you have any thoughts? Eric Schmidt Well, I guess I'll start. I actually had the benefit of speaking with John this week. We hosted Mr. Crowley on a Cantor webinar, so I know he was at the meeting. For those of us who were listening in, I think we all came to the same conclusion, which is that right now we're hearing great things from the FDA. I want to emphasize “hearing” because talk is cheap, and we still need to see the follow-through. There are still, in my opinion, some concerns about staff and resourcing that need to be addressed. But wow, I don't think the FDA could have had a better week either, right? They came out not just at that meeting, Brad, but the day before, Dr. Makary made some comments that were well received. I know he was also at a conference on Wall Street, saying pretty much exactly what investors wanted to hear: he's pro-innovation, he's for an efficient registration and regulatory body, and we're not going to be going back into the dark ages as far as rolling back some of the progress that we made under the prior administrations. Brad Loncar I saw a comment in the news, too. I think it might have actually been his own tweet. I saw RFK commented on the base-editing treatment for the UPenn baby who happily went home this week as well. So I thought that was, like you said, words, but a good vote of confidence in the whole gene-editing field, so maybe that's a positive. And then, of course, I'm sure everyone's seen this: the FDA also had their first meeting with CEOs of companies in the industry. They had their first one in the DC area. I know they're headed to the Bay Area and San Diego, and around BIO time, they're going to have one here in Boston as well. I'm sure some details of those meetings will start trickling out as they start happening. So maybe we'll get a little more clarity on their relationship with the industry and our industry's ability to give them feedback on what's really affecting us and what's important to us. Eric Schmidt And not to end today's session on a down note, because it has been so wildly positive in so many different ways this week, Sam—you were right to call that out earlier in the call—but John did mention that we're still not in a good place with MFN. We may be in a better place with the FDA. I think we're all feeling pretty good about that. But where biotech really does need our support, and where I hope all of our listeners will stand up, join hands, and fight for the industry that we all love and believe in, is on the drug-pricing side, where unfortunately things have not progressed as favorably as they have with the regulatory bodies or on the other topics that we're talking about this week. Sam Fazeli I guess, Eric and Brad, I think we're also all holding our breaths, hopefully not for much longer, on the tariff front, right? I don't know how much longer that would take. I don't know how much time a Section 232 investigation has. It might take several months, from what I understand. So you've got that still hanging over our heads, but MFN is the bigger one and how it gets implemented. Let's just remember that we've had a week of great cancer data, and some pancreatic cancer patients hopefully in a few years will be sitting in a world where they're looking at second-line and third-line therapies that are active. That would be great.