Episode 154 - September 12, 2025

You're listening to Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry with a group of biotech insiders. I'm Chris Garabedian and my co-host today are Tess Cameron, Eric Schmidt, Sam Fazeli, and Brad Loncar. For more information about our hosts and guest speakers or to listen to the most recent episode, please go to biotechout.com.

1. Biotech Funding Finds Its Footing

All right, so we’ll start with the market environment. We had our first biotech IPO yesterday: LB Pharmaceuticals, a company developing a schizophrenia drug that’s in the clinical stage. It was pretty good and well received by the market. I’d say there was good price discovery there. It wasn’t a high-flying, highly valued IPO like we saw in the high times, but it’s held today and went up on the IPO yesterday. So I think it’s overall a good signal.

Then we saw a bunch of PIPEs and follow-on offerings this week of a large variety. Maze did a $150 million PIPE. Rapport, following some phase 2 epilepsy data, raised $250 million in a follow-on. CAMP4 did a PIPE of $50 million, up to $100 million. That was mostly a recapitalization; they changed out the board to get enough money to continue going. They were in that micro-cap area.

Amylyx raised $175 million to fund commercialization of its post-bariatric hypoglycemia drug, avexitide. Maybe what got the most attention is Avidity, which, on the heels of its DMD data, did a follow-on offering. The market was hoping that they would be acquired before raising a large amount of capital, so I think the market responded negatively to the dilution and felt like M&A was off the table. These are always tricky to read. Sometimes they’re doing that to have negotiating leverage or to be able to show that they can go alone.

Again, there’s a lot going on in the markets. Before we move to M&A, any comments from the group—Brad, Eric, Tess, Sam—on just the market environment that we’re seeing this week?

I’ll just jump in with my usual story. I’m hoping that a lot of this is driven by a slightly more positive mood because of the potential direction of interest rates, which is really weird to talk about when we talk about biotech, but it is what it is. Data has been positive, and share-price reactions to good data have been great. It all sounds and feels like we’re in a relatively, dare I say, normal environment. So I’d love to hear what the other folks think.

Yeah. I want to highlight that it makes sense that when sentiment changes like that, everybody rushes, and especially some of these were on data catalysts to raise. But it’s always been difficult to predict how sustained this is and whether this is just one of those short windows where everybody raises a bunch and then we pull back. Brad, do you have any thoughts on this?

Yeah. I was at the H.C. Wainwright conference for BiotechTV, and I interviewed the head of banking there. They traditionally bank smaller-type companies, and he had a golden quote about what’s going on right now. He said, “Look, for the last 2 years, our companies have been in survival mode, and now they’re actually thriving. They’re aggressive about, ‘We want to add to our pipeline,’ or, ‘We have important data, and we think we can raise.’”

For the first time in years, the mood was not just, “How do we survive this?” It was, “You know what? Let’s go after it,” basically.

Yeah, that was a good interview. Richard Gormley, who’s been a banker for many, many years. The XBI also—I know we know it’s not the best representative of the broader market—is in the 90s, teetering on that $100 mark. We need it to break out beyond that.

Eric, Tess, do you guys have any comments on this?

Well, maybe just that I would agree with both Brad and Sam that things feel a lot better, certainly a hell of a lot better than they did 6 months ago. But it’s still a touch-and-go kind of marketplace, right? I mean, Chris, the names that you mentioned for the most part are companies that were either recapping, which is certainly not a great thing to do, or companies that are at the upper half of the mid-cap spectrum with good data.

So, yes, we’re seeing companies with good data and good results able to tap into the public markets. But I’d be a little bit cautious in thinking that it’s game on for fundraising. Hopefully, it’s not game on for fundraising. Hopefully, the market has a strong filter toward quality companies. We don’t want to see what we saw 3 or 4 years ago, and I don’t think we’re going to see that anytime soon, by the way.

Yeah. I think private companies going IPO—I think LB is one data point of one. I think we’re going to need to see some more trend lines for good companies that are deserving to go public and that can pull off a healthy IPO.

Tess, any comments before we go back to Eric on M&A?

Yeah, I guess I just echo what Sam was sharing in terms of the environment for rates. We’ll see where they go. We’re not out of the woods yet on inflation, right? I think everyone was positive on the not-good employment report, right? Then CPI came out, and it wasn’t looking good, right?

I think the Fed is definitely in a tough spot, and we’ll have to see how that plays out in terms of rates. But at least that’s a world that biotech is kind of used to, right? We were living for several years with the macro thing being interest rates, the jobs report, and the inflation report.

Then we had this brief hiatus where it was, “No, no, no, it’s everything else that could happen policy-related.” So if we get back to a world that is really more focused on rates, at least that’s going to be a world that feels more normal for us.

Yeah, and I’ll just add that it’s a little bit two sides of the coin because, besides interest rates being high and keeping other investors away from biotech because it is a risky sector—one that’s probably most mystifying to a lot of generalist investors—the track record hasn’t been great other than the COVID bubble.

If you go back 3, 5, or 10 years, we still don’t have a great track record to show that, yes, it’s high risk, but investors want to see the reward for putting allocations into the sector. Obviously, there are going to be investors who are in private and public biotech no matter what, in every season: the endowments, the pension funds, the foundations that have tens and hundreds of billions of dollars under management.

But I think interest rates are a key factor, and I also think we need to show performance before everybody realizes they’re going to be missing out on biotech. Obviously, the other big area is M&A that can bolster our sector.

Eric, do you want to talk about one of the big M&As we saw this week?

2. Tourmaline Lands A Novartis Deal

Hopefully, there is at least a little bit of FOMO around this one. Chris, what you’re referencing is Tourmaline being acquired by Novartis for $1.4 billion. I think that was announced on Tuesday. There’s a healthy premium here, and the stock went up almost 90%.

Maybe not a lot of people were that familiar with Tourmaline. They went public through a reverse merger back in 2023, so their profile and perhaps even their ownership wasn’t as broad as some of the other venture-backed companies we’ve seen in the space. Kudos to my partner Josh, who was recommending this name as one of his key picks. It looks like a good outcome.

Maybe there are 2 things in particular to note here. Tourmaline is another spinout from Pfizer. The asset here is an IL-6 antibody, pacibekitug. I don’t know how to pronounce these antibodies. I thought all antibodies were supposed to end in “mab,” but pacibekitug is a tough one. Someone’s got to explain to me why it’s not a “mab.”

It was an asset that Pfizer was developing for autoimmune disease, and they decided to shelve it. Kudos to the team at Tourmaline, who found this and developed it through to phase 3 readiness for atherosclerotic disease. This is going to go much the way of, say, SpringWorks or Cerevel assets from Pfizer that have then been monetized by others.

The other thing to note here is the acquirer, Novartis. Novartis has been really keen and interested in tying inflammation to atherosclerosis for many years. Of course, they had canakinumab, their IL-1 beta antibody, and the CANTOS study results. They were hopeful many years ago—I’m sure Sam will remember this—and they got a CRL back in 2018 despite positive data tying inflammation to a reduction in MACE.

They’re coming back to the well, it seems, and looking at a slightly different mechanism. Hopefully, they’re going to take this into phase 3 with maybe a better ending.

Excellent. I want to shift to something else. Tess, you mentioned that there have been a lot of other macro issues besides interest rates holding the sector back. To name a few, you’ve had the FDA changes, most-favored-nation policies, tariffs, and the IRA before that.

But I think the most talked-about issue recently has been China. I want to open this up to the broader group here. There have obviously been a lot more deals with Chinese companies.

There’s been a lot more development programs coming out of China, and then the executive order. So this is kind of an open discussion on all of those things. Brad, you’ve followed the China market for a long time, probably more deeply than any of us over the years. Do you want to kick this off for us, and then we’ll go to Sam and Eric and others?

3. China Biotech Faces New Restrictions

Yeah. Rebecca Robbins and her colleagues at The New York Times wrote a story that dropped a couple of days ago. Basically, what it said was that the Trump administration has been drafting an executive order relating to China biotech, and The New York Times actually had a copy of it.

The gist is that there are 2 warring factions. As we all know, the whole China biotech story—the dealmaking and how quickly Chinese companies are able to do discovery and early clinical work—is hugely beneficial to large pharmaceutical companies. They’re able to get assets very cheaply and derisk them in ways they couldn’t if they did all of the early work here in the United States.

So they’re lobbying the government not to rock the boat on China biotech. On the other side, you have a handful of investors who are lobbying to tighten the screws, saying that it’s going to keep hurting our biotech sector and jobs and, ultimately, hurt their investments and everything.

That’s kind of where it is right now. The White House responded to The New York Times and said that this isn’t immediately happening right now. They made it sound like it was still a back-burner executive order. But the point is that these 2 polar-opposite views of the world are lobbying the Trump administration.

At the harshest end of it, one thing that was mentioned as a possible proposal is that licensing deals would be required to go through CFIUS. To me, depending on exactly how they write it, that has the potential to kill all of these deals. You could make it so time- and resource-burdensome to go through that process that it would really slow down deals like that.

That would be the worst-case scenario if you’re an advocate for keeping things the way they are. There are all kinds of other proposals in various shades in between. For example, even though you need China data for late-stage drug development, and even though the FDA doesn’t allow China data to file or for very late-stage studies, you still can start a Phase 2 study in the U.S. if you have China data showing that a drug is safe and looks to be effective in Phase 1.

They could make the FDA choose to ignore China data altogether at all stages of drug development. There are various things that could happen. We don’t know the timing of this, and we don’t know which side is going to win that argument, but I think it was a big, newsworthy article that made it public that this debate is happening and that an executive order had actually been drafted. We’ll see what happens.

Yeah, I thought it was a well-written article that gave the bigger-picture view and covered the different factions. You were quoted in it, Brad. It is interesting: the tech billionaires, if you will. Peter Thiel, who co-founded Palantir, has been vocal about it on Twitter. You’ve got Jared Kushner, the Koch brothers, and Sergey Brin—not necessarily all from the conservative side of the aisle—going up against pharma, which seems to be very favorable toward being able to do this.

Sam, let me go to you with a non-U.S. perspective. What’s your take on all this?

Yeah. Chris, let’s call me a global guy. I’m ex-U.S., but I love the U.S., and I come there as much as I can. I’m obviously sitting in the U.K., and I’m in awe of U.S. biotech.

But I want to take an angle here that I think is worthwhile considering. If you’re suffering from innovation, or lack thereof, for whatever reason—which I don’t think U.S. biotech is suffering—it’s not because someone else is better at innovation than you are. If you’ve lost that power or the ability to do trials quickly, it doesn’t change anything by shutting down somebody else and just carrying on the way you’re doing. What we need is to speed things up in Europe and in the U.K. in terms of getting the trials through.

I also want to highlight that it’s a disservice to patients if we block the entry of novel drugs. There’s no rhyme or reason why the best drug for a disease has to be the one found in the U.S., Belgium, or France. Why is it not possible that the best drug is found in China, which of course we’ve seen examples of? Carvykti ended up being that case. Brukinsa has ended up being that case, if you want to call it that.

One of the ones I’ve just recently seen is this PD-1 inhibitor. You go, “PD-1, Sam? Surely that can’t be right.” It’s serplulimab from Henlius. They developed it in China, conducted a trial in Europe, and it was approved in Germany for first-line treatment of extensive-stage small-cell lung cancer. It was approved in the U.K. based on European data.

In the ESMO guidelines, it ranks above Roche’s drug and durvalumab, which is AstraZeneca’s drug, in terms of clinical decision-making. They’re now doing a head-to-head comparison with Tecentriq in the U.S. only, to show whether it’s better or not in a head-to-head trial.

If it shows that it’s better—which the data seems to suggest when you do cross-trial comparisons—why would we not want that for our patients? Whatever happens here, there has to be some control to prevent curbing patients’ access to the best drugs. If that’s kept, then whatever the U.S. needs to do and Europe needs to do, they should do it. That’s where it starts.

Can I jump in?

Yeah, please. Brad.

Sorry to jump right back in, but Sam, I see both sides of this issue. I’ve spent a lot of time in China, I’ve invested in China, and I created a China fund. I get it.

But I will say this: Everyone in our industry is doing what’s in their best interest, and our industry’s job is to further human health and medicine. That’s obvious. But every time we have this discussion, nobody brings up the obvious counterargument.

The obvious counterargument is: What happened in China this week? China held a military parade that was attended by and celebrated by Putin and the North Korean dictator. It’s a communist nation, which many of us would argue is unethical and evil. Many people around the world, especially in the United States, would describe China as our adversary in the world.

The counterargument has nothing to do with human health. The counterargument is: Do we want to fund the scientific advancement and growth of the biotech sector in a place that’s contrary to our way of life, potentially not just promoting it and helping it grow, but doing so to the detriment of science, jobs, and biotech in our own country?

That’s not an insignificant counterargument. Especially if you’re outside of our industry—if you’re a politician whose job is to think about everything, including those factors, while our job is to think about human health—it’s not an insignificant thing to think about.

But I guess, just to build on some of the points that you raised, Sam, the U.S. sets standards. The U.S. says, “Here is what the FDA will accept. Here is the bar that you need to meet in order to be sold in the U.S.”

There are a lot of worthwhile regulations in place, and being considered, related to manufacturing. That would also mean there’s less ability for any one nation to turn off the switch on manufacturing drugs that Americans rely on.

When we look at what the U.S. is doing to basically ensure what would be bad for American citizens, what would be bad is if there were good drugs that they couldn’t get. It’s bad if they can’t get them because they can’t access those medications because they’re made by a foreign adversary that says, “We aren’t going to sell these drugs in the U.S. because we don’t want U.S. citizens to benefit from them.”

Similarly, to Sam’s point, U.S. citizens also don’t benefit from them if our government makes that decision. I do push back on the point about jobs because we have a lot of super-qualified biotech people here.

But think about the new life, employment, and work that are created when our drug doesn’t work and we can bring another asset in. Our company can have this new life as a result of being able to access innovation from around the world.

So I think those are the counterarguments to your point, which I think are important points and important considerations to make.

Yeah, that makes me wonder about those.

Chris, I know you want to move on.

One small comment.

Well, no, I want to add some elements that we're not talking about, but Sam, go ahead.

Let me just do this.

It's okay, though, Brad, that NVIDIA and AMD can sell chips to China now if they pay 15% of that revenue back to the US? What happened there? I think there needs to be some consistency.

Suppose this executive order turns around and says, “Sure, you can bring drugs here from China. Once you develop them, I want 10% of the revenues.” I don't know. I'm just making it up. So, I can't disagree with you. I'm not going into politics, but I'm still of the view that we have to let innovation happen where it is.

By doing this, we're not going to change China's system and attitude. In fact, by not giving them the chips, you're going to force them to develop their own, and then we end up in a completely different world. So, look, it's very tough. Again, patients first.

Yeah. I'd like to highlight an area that we're not talking about, which I think is actually bigger than the whole geopolitical issue. I think there are good arguments that we're hearing on both sides of this.

Look, innovation: I'm not concerned that the US can't compete with China on innovation. What we've seen in our industry in recent times is a crowding around validated targets—maybe too many products against validated targets moving into development. We've talked a lot about venture capitalists. I'll count myself in that. We tend to want to have more best-in-class fast followers, better development strategies, bio-better products to move into the clinic to differentiate.

But when it comes to real innovation—and I'm talking first-in-class, on the cutting edge—I'm not concerned right now that the US can't compete on innovation. The challenge is what I saw most concerning recently. As a sector, when the IPO window is open, great, we're all pretty happy. But when it's not, we have to rely on M&A, and big pharma has relied almost predominantly on buying US biotech for the most part for 20-plus years to feed its pipeline, to the tune of 50% or more of its pipeline.

Now we're starting to see deals where pharma is saying, “Wow, do we even need to go through US biotech? Why don't we go straight to China? Let's do a collaboration like GSK-Hengrui.” Where does that push us in venture capital? That means the US has to really focus more on the innovation curve—the first-in-class opportunities that are higher risk and higher reward if you get them right. But we know that discovery research is not easy.

I think the big concern for our sector is that pharma decides that, if it can go right to China, it doesn't really need US biotech. We're still outsourcing our pipeline, but it's not to US venture-backed biotech. What we've seen in the last year is that US venture capitalists have been licensing in these Chinese drugs, but then we see pharma saying, “Well, we can go straight to them.”

So, I think that's a big issue. If you were to stop that ability to license in those Chinese drugs, I don't necessarily think we're going to see a scenario where the US won't have access to any good drugs and they'll all be locked up in China. I think they're very good opportunistically. They're executing.

The other side of this equation that was in the New York Times article—which I absolutely hope FDA officials listen to—is that we need to reform our ability to get into the clinic fast. I can't tell you how many companies we're looking at that are definitely going to Phase 1 and, increasingly, going to Phase 2 outside of the US because the FDA is the most inflexible when it comes to getting drugs into the clinic quickly and efficiently. That's where China has been eating our lunch.

If we can change that, I think you may see a different scenario play out, with more clinical trials in the US and maybe some of that balance pulled back. I just think there are a lot of dynamics at play here other than, “Oh no, we can't restrict innovation.” These are structural issues affecting our sector that I think we need to take seriously.

And of course, it's not just a US issue. Look at the news that happened in the UK 2 days ago. Merck just canceled its mega R&D facility in London, and a month ago GSK signed that huge R&D partnership with Hengrui. So, right there, literally thousands of R&D jobs in the UK that tangibly do not exist today but would have existed.

You like making me cry, don't you, Brad? Exactly.

All right. Well, look, this is a story that's going to continue to play out. We have to watch this executive order and see how it plays out, but I think it's very nuanced, with different opinions on both sides.

All right, let's move to the data side of the ledger. There's a lot of data this week as well. Tess, do you want to cover Revolution and what they announced this week?

4. Revolution Raises Pancreatic Hopes

Yes, absolutely. Revolution Medicines came out with data on its pan-RAS inhibitor in first-line PDAC, or pancreatic ductal adenocarcinoma, and posted a really impressive overall response rate of 55%, which is quite remarkable in a very challenging setting.

I think the comparators that everyone was looking at were FOLFIRINOX and NALIRIFOX, which have response rates in the high 30s for FOLFIRINOX and the low 40s for NALIRIFOX. Both of those regimens have pretty significant safety and tolerability challenges.

What Revolution Medicines is talking about going into Phase 3 with is Gem/Nab, which has a lower response rate but is still in pretty broad use simply because of its tolerability. That's the regimen they're talking about for Phase 3.

I think this is just an exciting area. It's great to see some real progress in a very difficult, historically difficult-to-treat cancer. Hopefully, we'll be getting more data soon. We're still waiting on PFS and duration of response, but it's certainly really impressive to see such a strong response rate posted.

I'll just highlight that first-line is always risky and challenging, but if you win, you win big. It's always nice to see companies taking chances on first-line data. I think Genentech did that very well in creating the whole cancer landscape. So, yeah, that was really impressive to see.

Brad, the narcolepsy market is competitive, and there have been data releases from a couple of competitors. Do you want to cover that one?

Yeah. I actually just came back from Takeda, where I interviewed Christophe Weber. That interview will be up in about half an hour. This is really cool science. This is a story that more people should know about because it really illustrates the best of our industry.

Narcolepsy, which I think everyone knows, is a condition where you can't really stay awake during the day, and there's also a muscular element to it. It was discovered around 2000 that it's caused by something called orexin. That's a neuropeptide, and people who have this condition have damage to their neurons and don't make it. That's what causes this condition.

Up until this point, people with this disease have really only been able to try to help with the symptoms and not the underlying condition. There were 2 people who discovered that. One was a Japanese scientist, and he started working with Takeda 25 years ago. Together, they created an orexin agonist.

They tried once with one of these and failed, and they developed another one that was a little more specific to something called the orexin-2 receptor. They successfully announced 2 Phase 3 trials at a big conference called World Sleep Congress earlier this week.

The gist of it is that, essentially, 80% of the patients who were on the drug were returned to a normal lifestyle and weren't struggling with this. It's a huge achievement of science. It took a long time to figure out what the cause was, and it took 25 years to figure out how to drug it, but it seems they've been able to do that.

From a stock market and biotech competitive standpoint, everyone's also talking about and comparing Takeda with Alkermes. Alkermes is farther behind. They presented Phase 2 data at the same conference, and the big difference is that Takeda's drug is twice a day and Alkermes' is once a day.

Alkermes still has to run and succeed in a Phase 3 trial, but I think the big debate is whether being first to market will be the winning factor here or, depending ultimately on what Alkermes' Phase 3 profile is, whether once a day would make a big difference competitively.

The bottom line is that this was an intractable disease literally up until a week ago, and Takeda seems to have a really good drug here. Another thing that's cool about it is that everything was developed at Takeda from the start. As Chris was just talking about with China, we often criticize big pharma companies for outsourcing their science.

Well, this is a good example where, over decades, the science was right there in this big pharmaceutical company, and they've ultimately succeeded. That's great. Brad, how big are these drugs projected to be in peak sales?

So, it's technically a rare disease, but in the U.S., it's like 150,000. So, it's a more common rare disease, for lack of a better term. The numbers I've seen are between $1.5 billion and $3 billion.

It's a big needle-mover. I've interviewed Christophe Weber in the past, before this succeeded, and whenever we went over his pipeline, he always highlighted this as essentially the most important thing they were working on. So, it's a big deal even for a big company like that.

Great. All right. We touched on Revolution, and Eric, I realize now that you may have some comments on that. We had the World Conference on Lung Cancer this week, and there were some other developments, particularly on Summit. Eric, do you want to comment anything more on Revolution, and then we can move to Summit?

Well, no, thank you, Chris, for the opportunity. Revolution Medicines is just real simple: as Tess describes, they've got a wonderful drug. It's been 30 years of almost nothing working in pancreatic cancer, and, yes, they're taking on some risk by going in frontline, but these drugs of theirs flat-out work.

I have every bit of confidence in the world that they will read out very positively. The other wonderful thing about pancreatic cancer is that we have a whole new set of mechanisms. PRMT5 inhibitors—Bristol Myers Squibb, Amgen, and Tango are leading that charge—and they also look like they're going to work much better than anything we've ever seen in this indication. So, finally, some hope for patients.

But I'll turn it over to Sam, because I know that he was actually sacrificing his weekend last weekend to attend World Lung, and he can start there.

5. Lung Cancer Data Tests Summit

The sacrificing in Barcelona is a very easy thing to do, as you all know, I'm sure. Look, I love this conference and these types of conferences. I'm going to the International Myeloma Workshop next week in Toronto because you get completely focused on one tumor. You don't end up having to tear yourself apart like at ASCO or ESMO, which, of course, are also must-attend conferences.

The sorts of things that we saw there were obviously Summit data, but I think we'll talk about that last, and I know Eric's got some thoughts there, too. This is a conference where we saw quite a lot of new early-stage data—sometimes updated data, sometimes new trials.

Small-cell lung cancer is an area I was particularly focused on. Of course, there are ADCs being developed against B7-H3, DLL3, and SEZ6. ABBV-706, a SEZ6 ADC, showcased data for the first time in second-line small-cell lung cancer. All these drugs—and, of course, Daiichi Sankyo updated their data with a relatively large, 137-patient data set for ifinatamab deruxtecan, which is the B7-H3 ADC—were among the larger early-stage data sets that came out.

You see similar ranges of PFS. Of course, you've got chemotherapy here, which helps, so it's in line with what you get with topotecan and carboplatin, which is the standard of care—maybe a little bit better. But in the end, you've got more side effects associated with them, which are still important.

The challenge for all of these is that you've got Amgen's tarlatamab in the second line to compete with, where you've got an immune angle to the therapy that you're dealing with. Whereas with ADCs, perhaps the hope is that you get some immune reaction because of the focused toxicity within the tumor.

With Amgen, as they updated some of their data at the conference, you see really strong efficacy, particularly in some of the phase 1/2 data in first-line small-cell lung cancer. A lot of these drugs need to think about where they fit when tarlatamab, which is IMDELLTRA from Amgen—a DLL3×CD3 BiTE—moves into first line.

Where do they fit? None of them really had data that showed how well they performed in patients post-IMDELLTRA therapy, because I think a lot of these trials have been going on at a time when, of course, IMDELLTRA wasn't being used in first line or even at second line. They didn't catch very many of those patients. So, the jury in my mind is still out on where these ADCs are going.

There's a whole bunch of them, right? Hengrui and IDEAYA have one that looks—I have to say—really good, with a PFS of 6.7 months, which is one of the strongest ones I've seen. AbbVie's looks that strong, too, so we have to wait and see how these go.

Then, of course, in first-line, we had an update from DeLLphi-303, which is Amgen's trial of adding tarlatamab to the standard of care, which is either durvalumab or atezolizumab. In the atezolizumab arm, we had a readout of 25.3 months of overall survival in 48 patients. That's a pretty hefty overall-survival signal. They're doing Phase 3 trials with it, particularly with AstraZeneca's IMFINZI.

Lastly, we saw updates from BioNTech in the first-line setting. They had a trial where they took some patients outside of China. It wasn't what Summit did, which is an extension of a Chinese study. They just recruited a group of different patients outside of China with a slightly lower dose of BNT327, which is a PD-L1×VEGF bispecific and, of course, a peer to Summit's ivonescimab in non-small-cell lung cancer.

Here, in small-cell lung cancer, they're seeing some nice first-line efficacy as a single agent with etoposide and carboplatin. They're seeing decent response rates—really, really decent data—but it's a very early readout. We had a median follow-up of 6.5 months, so there's a lot more to go there. I'm going to keep my eye on that.

I'm more of a fan of a PD-L1 approach for these VEGF bispecifics than PD-1. Let's see if they work out. Maybe I'll pass it on to Eric to talk about Summit, and I can chip in a little bit afterward.

Well, I guess the big news from Summit—and many of our listeners have probably seen this—is that the stock was quite weak on Monday, down about 25% or so. That's a big move. This is a $20 billion company, so 25% down is a loss of $5 billion in value.

I get that this stock moves in big increments and is very volatile and heavily insider-owned, but I'm not so sure the market has it right in this case. What we were looking for from the HARMONi study—and this is a small market opportunity for ivonescimab—is second-line EGFR-positive lung cancer. It's too small a market to move the needle for the company, but what we wanted to see was geographic consistency.

It's the first study in which non-Asian patients were enrolled. We have some Western patients, some U.S. patients, and some North American patients. Honestly, there were a lot of different lenses through which you could have looked at these data sets. You could look at PFS, you could look at overall survival, you could look at benchmark data, you could look at hazard ratios, and so on. Again, you could look across all those geographies.

To my eye, at least, I thought there was more consistency than inconsistency. Obviously, the market voted with its feet and came to a different conclusion.

Sam, one thing you're going to have to explain to me is this fascination of the media with whether or not they can file on these data in the U.S. I honestly think it's completely off the mark. If Summit had to choose, I think they'd choose not to file, because filing only starts the IRA clock a year or two in advance, shortens their window of exclusivity, and would probably be net-present-value-destroying, in my opinion.

I don't think the company has any interest in filing, but still, many of the media articles out there are about, “Wow, they can't file because they just missed on their primary endpoint of overall survival.” I'll shut up, Sam, and let you join.

So, Eric, wasn't that the message they may have put out there, sometimes in talking to some people, that this could potentially be registrational?

Certainly, they thought it could be. Yes.

Right.

And they're not sure yet. Yeah.

No, of course not. You have to wait and see. They've got a very serious chief medical officer in charge there, Jack West, who I think has been one of the big advocates of the idea that you need overall-survival signals for anything to be approved.

I think the issue is that you look at the data and go, “This is premature.” If you look at the forest plot for Western patients and subtract the U.S. patients out, which you can do, you end up with a zero—that is, no benefit—in Europe. Why? Because the follow-up is very short.

They show this data. There's a press release that says a 0.7 hazard ratio in the U.S. on a very small number of patients. All you have to do is switch those patients around, and you get a completely different hazard ratio. I don't know whether they were pushed to do it. Is it the need to raise money? I don't know what the story here is.

I went around the conference and asked whoever I could grab, “What do you think?” People said, “I'm not so sure now that I've seen this data.” Of course, the discussant really didn't do them any favors. He literally said that he thinks pretty much most of the efficacy is coming from VEGF, not PD-1. You go, “Wow, that's a big statement.”

A lot of people thought that was too harsh. But if you ask them, “Do you want this drug on the market?” the answer is, “Well, yeah.” Remember, these conferences are for physicians, not Wall Street, right?

I think it might have been a bit of an own goal. It might have been better just to wait 6 or 12 months, get that solid data, get the nice follow-up, and tell us what the answer is.

We’ll get there, of course. Yeah. Hey, Brad, I’m curious about your thoughts because I remember when you did the breaking-news interview with Bob Duggan a year ago, when the initial data came out. I haven’t heard you comment on this kind of roller coaster that Summit’s been on. Any thoughts?

I have to admit I didn’t get a chance to look at World Conference on Lung Cancer closely, so I probably shouldn’t comment.

Yep. All right. Hey, Eric, there was other news—data news. Do you want to cover myasthenia gravis?

Yeah, we can be quick here, Chris. I think what’s interesting here is just that there’s a new mechanism in town. This is from Dianthus. They had Phase 2 data on a C1s inhibitor, while existing therapies for MG are FcRn and C5 inhibitors.

So we’ve got another compound that’s shown pretty good data. The stock reacted well. I think you already mentioned that they raised some capital, and this will be fighting for share in what is probably becoming a very large, perhaps even $10 billion or so, market. I’m not sure I’ve got much else to add other than that.

6. FDA Transparency Raises Safety Questions

All right. We’ll move to regulatory and safety updates. There have been quite a few this week, and maybe we’ll do a few of them rapid-fire.

Intercept has had its own roller coaster. This was the product that got approved for primary biliary cholangitis, got accelerated approval, and was rejected for full approval. This was the company that was public and then acquired by Alfasigma, I think, the Italian company. Basically, they just had news this week that they pulled the drug from the market, even though it’s treating a kind of rare liver disease that’s also causing liver and organ damage and injury.

Also, on the gene-therapy side of things, we just continue to wait for other shoes to drop. This was Capsida, which had engineered novel capsids to develop gene therapies. Their lead program, which is for genetic pediatric epilepsy, dosed its first patient, who died within a few days, I believe. So they’ve basically put that trial on hold.

That’s always tough when you’re dealing with a pediatric patient and you have a death in the first patient dosed. But I think anytime we think there might be a removal of some of the headwinds around gene therapy, it seems we still aren’t out of the woods on some of the safety risks and concerns that we see in that space.

Eric, speaking of just safety, Soleno was in the news as well with the FAERS release. Do you want to talk about that?

Yeah, I mean, this is a broader issue. Maybe we should all chime in on this note because, as you know, I think it was covered maybe last week on the show, FAERS is going to have much more frequent data releases. It used to be once a quarter, and now the FDA says that they’re going to release adverse events from this database on an almost daily basis.

The latest company to get caught up in that disclosure was Soleno. We had to deal just last month with something on Iovance and its drug Amtagvi for melanoma and cervical patients. So we’re now seeing these fires erupt when FAERS results suggest that patients on these drugs are being harmed.

Of course, correlation is not causation. That’s not something that MAHA always understands. This, to me, is very much a MAHA-driven moment to try and showcase all the potential pitfalls of drug therapy.

The problem here is that it’s not just bad for investors. It doesn’t just cause volatility in Soleno shares. Yes, Soleno was down 25% on an event that does not seem to be drug-related. Specifically, the company has called out the fact that the clinical investigator does not deem this to have been an adverse event attributable to the drug, and FAERS is not an accurate enough database to come up with that potential causality link.

So it’s not just bad for investors; it’s bad for patients. It causes commotion, concern, and distress, and maybe it even prevents patients from getting access to good medicine. So my view, at least, is that this is not the right thing that we should be doing. But I’d really love to hear what others think.

Hey, Eric, I just have a question. Isn’t this one of those companies that was subject to a short report, and somebody tried to raise this issue independently, and then the company was trying to—or at least analysts were trying to—refute that? Is that correct?

Very much so. They’re under attack by a hedge fund, Chris, and that is adding to the volatility. But again, I think this issue goes maybe beyond volatility in our world, unfortunately.

It’s impacting patient lives. Yeah. Any other comments on this?

I would just add that you can see better signals when you have more N, right, and a larger sample size. I agree with what Eric says, especially when a drug first launches. Certainly, there are types of events where maybe it is worthwhile to have everyone broadly made aware of them.

But I think there can be a lot of misinterpretation when you’re dealing with a very small N, to know what an event means, particularly with FAERS, where there’s very little context around what some of these events are and truly what is drug-related or not. So I do think that there’s typically just a lot more context in putting these in with a release that’s a bit richer and has a larger sample size.

The other thing I’d say is just an interesting kind of contrast, right? So we have, on the one hand, this: “Hey, there’s more transparency. There are more real-time AE reports, more background on CRLs, particularly for drugs that were never approved.” But at the same time, we’re seeing a lot of adcoms get canceled.

We saw an adcom get canceled with the Biohaven drug. We saw an adcom get canceled for Travere’s drug Filspari for FSGS. That’s the other side here, right? This is a type of transparency that I think was really valuable for drug developers and also a great opportunity for patients and physicians to really have a voice around patient care. We’re seeing fewer of those.

So I think this question about transparency and what transparency is good for—I think transparency is good when it helps you better understand what to do with a certain piece of information. I do think CRLs are helpful, and I do think adcoms are really helpful. I hope we get back to a world where those are more normal.

Yeah. Well, on that point, Capricor was in the news a lot this year because an adcom was canceled, but then a CRL was issued. There was some debate about why the adcom was canceled. It was scheduled and then canceled.

When the CRL was released by the FDA, Capricor put out a statement saying they were aware of the CRL, obviously, but they were not aware that the FDA was going to post it. They came back and said, “Hey, we had a response to the CRL, and you didn’t post that, so we’re going to communicate what our response was.”

Which is pretty common, right? When there are FDA communications to a company, the company’s going to respond and say, “Hey, we think you got this wrong,” or, “Hey, we want to have a further discussion about X, Y, or Z,” and you kind of continue that dialogue. Obviously, the FDA doesn’t have the right to post company communications.

But it does raise the issue of how these get adjudicated in the public domain. If the FDA is just sharing its view, it’s going to invite more company communication, which most companies don’t like to air out—their disagreements with the FDA—in public. But it looks like we’re going to have to see more of that if the FDA is going to do this, especially without notice to the company, and negotiate how that communication would play out.

So, yeah, this definitely cuts both ways. Any other comments about this whole transparency, safety, adcoms, and communications?

Well, I would just add that I think you said it very well, Chris. There’s an argument to be made for more transparency and publishing CRLs as soon as possible. But what you’re seeing, right, in this first example of that, is how it could get out of hand quickly. It’s like every communication between the company and the FDA turns into a public press release. Is that really healthy?

Exactly.

Yeah, and I’ll just say, I mean, look, partly from the Sarepta experience, but adcoms can be politicized as well in how they craft the questions and the briefing documents. So I definitely am in the camp that adcoms can be good if they are used appropriately and objectively, right, to have a good discussion and debate among independent advisers.

It’ll be interesting to see where the FDA’s stance evolves. It might be that they feel the adcom process needs some reengineering and that they come back out, but I think time will tell what that ends up looking like.

I’ll just add also that there’s the SEC action. Part of this is keeping biotech companies honest.

There was some chatter on Twitter saying, “Hey, it was a good thing that the SEC took action against a former FibroGen chief medical officer who manipulated data. The company had communicated that data to investors, and they had to come out and recant it, saying that it was manipulated data.” Again, I only highlight this because we need these types of actions to keep all of the biotech companies honest and to try to dissuade and discourage any kind of misrepresentation or manipulation of data. Obviously, manipulation of data is more and more egregious.

Sam, I want to ask you about BridgeBio. This is not really a regulatory issue, but Bloomberg—and I know this is not your group that writes up on the industry—accused Alnylam and Pfizer of not playing fair in the ATTR cardiomyopathy market. Do you have any insight on that?

Well, Chris, this is not my group. It's my colleague Anne Hunter who covers Alnylam, at least. She has a view that the stabilizers are not going to be able to stand up to the silencers in the long run, and she has a view that it's going to be tough. I know Josh in particular has been a fan of BridgeBio's drug, and I don't have a position in this, but Pfizer's drug is going off patent in 2020.

When you look at the consensus numbers, Vyndaqel kind of disappears, or peaks in 2027 and then starts crashing from 2028 onward. So, of course, are we surprised that Pfizer is fighting tooth and nail to protect and grow this drug? They need things that are growing.

On the other hand, are the allegations correct? Some of the things in that article were that Pfizer essentially said there was an error. Pfizer said that a video they had showing that their drug was the only approved drug in this class was played in error at a conference or something. But BridgeBio is saying that they're using these kinds of tactics all the time.

Look, I don't know what's right or wrong here, or what's fact or not fact. I'm not saying anybody's lying, but I wouldn't be surprised if a company under pressure, trying to maintain a revenue line, uses all the methods it's got to try and maintain that. Does it mean that they would cross the line? I'm assuming not, but it's a cutthroat business out there, as you know. These 2 drugs use the same kind of approach, but as you said, I didn't write this thing, so I don't know the details exactly.

I don't know if anybody else has commented or read the article. I did not read it. Brad, I know you've interviewed a lot of the players in this space and clarified some of that, but any other comments on the BridgeBio dynamic?

No, not really.

All right, great. Another interview you did this past week was with Harvey Berger, who took over as CEO of Arena Bioworks, which had a lot of money put in and was looking at an alternative kind of private approach to discovery from the big institutions—Whitehead, the Koch Institute, the Broad—and really trying to get discovery researchers to develop, again going back to the innovation curve. Harvey kind of went to work with his old collaborator, Stuart Schreiber, to take the CEO role at Arena. Brad, in that interview, were there any insights that you uncovered that you wanted to highlight on that move?

Well, I really like Harvey. I've gotten to know him pretty well, and I would put him under the category of people who could be sitting on a beach right now. He doesn't have to do this, and his excitement about it is palpable and genuine. So, I give it credibility and credence for that reason alone.

I will say that they've disclosed essentially nothing about what they're working on, and so it's hard to really say anything about any of that because they—

Yeah.

—haven't really said anything.

Yeah. They're modality-agnostic, so they haven't really said anything.

It's not too surprising because of early discovery. They don't want to tip their hand too much and have a bunch of fast followers if they are working on stuff that's truly innovative.

We're close to wrapping here, but Sam, do you want to just highlight the Novo layoffs to close out this week?

7. Novo Faces A GLP One Reckoning

Yeah, sure. I think this was a shock because no one noticed from the analysis that Novo has never laid off people at this sort of scale. It's 11% of its workforce—9,000 people, 5,000 of them in Denmark. They've told people to come back to work every day, and in the press release they said that we're going to be a more performance-led culture, which of course makes you wonder what it was before.

The company said they want to spend money on R&D, right, and are also facing changing dynamics in terms of selling their drug, particularly. I wonder whether this is signaling that direct-to-consumer sales are not as straightforward as they seem. I don't know how much that's signaling, but share prices reacted positively, at least mostly. I think the company does need to catch up with Lilly, which currently has the better drugs.

I tweeted something about this that a lot of people reacted to, which I thought was interesting. It's like the old saying: History doesn't always repeat, but it rhymes, or whatever that saying is. I feel like the GLP-1s are going through the exact same thing that the PD-1s went through.

For a while, remember, Bristol was the king of the hill. In that case, they messed up how they developed it, and Merck was able to—and Merck did a really great strategic job of developing Keytruda and eventually pulled ahead. Look at the sales difference between Keytruda and Opdivo.

In the next mega-category, you've seen something a little similar, although I think it's less of a strategic error on Novo's part and more just that Zepbound seems to be a better drug. They're going to have to grapple with that. I think it's interesting how the company that was out in front ultimately got overtaken by somebody else.

Chris, I know we're out of time. Just one last thing: I don't know how Lilly got here. I don't know whether it was fortuitous or what. The mechanism they used to combine GLP-1 with GIP—I don't think many people thought that was going to actually work the way it did. So, kudos to them. They did it.

But let's not forget that Novo has been innovating in this space for years. GLP-1s came out of Novo, and all the effort that they put in. It doesn't mean anything except that they are in a place where they can get back into that position. So, let's hope they—