第133期 - 2025年3月7日

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 Daphne Zohar, and my co-hosts today are Eric Schmidt, Tess Cameron, Brian Skorney, and Yaron Werber. For more information about our hosts and guest speakers, or to listen to the most recent episode, please go to biotechhangout.com.

The broader market remains under pressure, driven at least in part by tariff threats and concerns over a potential trade war. The S&P 500 is down 6% over the last month, with this week's losses wiping out all post-election gains. Biotech seems to be in a really dark place. The XBI is down 5% this year, and small caps are down 17% in the last 3 months.

The IPO market is also at a standstill. The 2024 IPO class has 16 out of 18 companies trading below IPO price, with a median drop of 61%. Looking at 2025 IPOs, 3 out of 4 are trading below IPO price, and Becerra is the only exception, perhaps because it's one of the few with a near-term catalyst. Some biotech and healthcare funds have been shutting down due to poor performance and redemptions, forcing them to sell indiscriminately, and long-short biotech funds are already down over 10% this year.

On the positive side, Stifel put out a report last week saying that the period of redemptions is behind us. Tess, what are you hearing on the investor side? Any reason to be optimistic as a biotech specialist investor?

1. Biotech Finds A Bright Side

Great question, Daphne. I think the reason to be optimistic is that companies that have made a lot of great fundamental progress are cheaper than they were a few months ago, right? For investors who are in a position to be deploying capital, it's a really rich opportunity set, both on the public side and among private companies that have made exceptional progress and are really focused on how they get to as meaningful an inflection point as they can with their capital.

That means the opportunity set is really great. I think we've seen markets like this before. It's really not unprecedented, and nothing has really changed in terms of fundamentals. Pharmaceutical companies are still going to need to fill their pipelines. Of course, we have increased competition from China, but I think that can honestly make us all better and, in addition to helping to refine the opportunity set, can create new company opportunities for a lot of investors.

I think that's the bright side, Daphne. As a society, we are not getting any younger, and as we get older and older, we are going to continue to need more healthcare. Drugs are one of the most efficient ways of delivering that care. That's not going to change.

You make some good points about the fundamentals and the need for biopharma innovation. You also pointed out that M&A is still very much on the horizon, with big pharma companies needing to fill their pipelines and patent expirations coming up. M&A is important to helping biotech investors get returns and liquidity and bringing generalists into the sector, and we're going to talk about a couple of small deals this week in a moment.

But Eric, you've said that the sector is too dependent on M&A. Can you say more about that?

2. The Go It Alone Problem

I don't know that I would argue it's too dependent on M&A, but certainly the focus on M&A is probably as substantial as it's ever been. When we're in a market like the one we're in, as you eloquently laid out, Daphne, where there's so much going against us and so many stocks are down every week, every day, every month, the ones that shine are the ones that are acquired, right?

It's natural, when you have just a few stocks in the green on your screen, to focus on those names and say, “Wow, the only way I'm getting paid is through M&A.” That's certainly the case right now. I do think there are maybe some broader considerations, and I agree with Tess in general that there's a lot to be optimistic about. We've seen this before. We've been here before, and she put it well: There's still a demand for drugs, and the way we create, reimburse, and get paid for drugs really hasn't changed.

But I do think the business model of biotech is potentially slightly different than it used to be. As soon as a drug is successfully launched, for those companies that elect to go at it alone, there's this intense focus on, “Okay, what are you going to do for me next? What is your long-term strategy? How are you going to evolve? How are you going to prevent having a patent cliff years down the road?”

From that standpoint, maybe the investment outlook for these go-it-alone companies is more severe or more skeptical than it's ever been, and M&A seems like a great way out for those companies that are able to take it.

It's an interesting contrast, though, Eric, right? We've had a lot of companies that have done it alone that have performed super well. I'll just highlight Madrigal as one. Bill Sibble is at the helm there, and obviously he's a very experienced commercial leader. Verona has had exceptional performance as well.

I'm just curious, Eric: When does it go from, “Hey, wow, you're actually doing a launch well. That's unique for a small biotech,” and the stock bids up, to, “All right, what are you going to do for me next?” When does that transition happen?

That's a great point, Tess. That's the wrong transition to get caught up in if you're an independent biotech. Unfortunately, we have seen many companies do just that—try to persist potentially too long.

You're correct that I think the industry is launching more drugs successfully, potentially, than ever before. We've had some of the better winners in the industry stay on their own and prove investors wrong—that they can launch a drug and reach that profitability threshold. But what happens shortly thereafter? It's usually within 1 or 2 years, right?

I'd love to hear Brian's views on this, too. The Street gets very, very skeptical and says, “Okay, great. We'll give you credit for your cash flow. We can discount that out into the future, but we understand that cash flow will soon hit a cliff, and you're no more valuable than every penny that you can save between now and then.”

Brian, do you have any thoughts on that?

The buy-side favorite phrase is “short the launch,” right? Another one that's commonly said is that the most value-destructive thing a biotech company can do is launch a drug.

Look, I think that way overstates the situation, but commercializing drugs is really hard. Some are fantastically successful, and others really struggle. For better or worse, it really ties the company to actual financial fundamentals prior to launch. Things are so ambiguous in terms of what the company's ultimate value is going to be. These stocks are all story stocks until that day.

That's why I think M&A becomes very important, right? Since the birth of the sector, the thought process has always been that pharma is bad at R&D, but they're good at commercialization. Biotech is bad at commercialization, but they're good at R&D. Therefore, there's the marriage that creates that constant view that M&A is going to be, at least to some extent, a driver of the sector.

I agree with Eric. Right now, I think it's a little bit too much of a hope for the sector, and there may be a little bit of an overreliance on M&A coming to save the day somehow, rather than just focusing on the fundamentals.

Maybe I can tie in, because Eric mentioned that maybe the industry, or the sector, needs to change the fundamentals of its strategy. Biotech is not great at launching me-too products, but biotech is fairly good at launching badly needed, differentiated assets that really create new markets or address a need.

Maybe that's the clincher here: Maybe we need to accept higher-risk programs that are really going to make a difference. We probably need to invest in a lot fewer me-toos.

3. Pharma Rebuilds Its Pipeline

That's an interesting point. Yohan, this week was the Cowen Healthcare Conference. Lots of investors and lots of people were in Boston this week. I know that Pfizer CEO Albert Bourla talked a little bit about their perspective on M&A. Can you tell us what the takeaways were from the conference, including any pharma commentary on BD and M&A?

Maybe I'll start with the broad strokes. I have to tell you that the Cowen Conference—and it's been great to see—is really gaining momentum each year. It's making new highs each year in attendance, and it's becoming a little bit more of an industry conference, at least a Wall Street conference, than just a firm conference.

Sentiment, as we've said, was poor. One of the key things is how much companies are talking up how much they can stretch their cash and how many programs they're cutting, which is good to see. Another clear situation is the Jazz–Chimerix deal, let's say. There are a lot of oncology assets that are ready to launch products or are in Phase 3 with products that are expected to be niche, and someone probably needs to consolidate them.

They're all trading at cash. It's kind of a self-fulfilling prophecy. The good news is that it's all upside at this point.

To answer your question about Pfizer, they talked specifically about oncology. They said capacity for BD, according to our colleague Steve Scalla, is going to be higher than it was last year. This year it's going to be 10 to 15. Next year it's going to be even higher, so there's a little bit of a hint there.

As you know, they're in oncology, vaccines, internal medicine, and I&I. In vaccines, they really don't see a lot of BD opportunities. They have a fairly robust internal pipeline. In oncology, obviously, they just acquired Seagen, so they have a lot going on. They don't need a lot of external innovation other than smaller assets that can be combined with an ADC, so there's a big hint there. Clearly, where they're going to be focusing is internal medicine and I&I.

It's not going to be a shocker. I&I is obviously a huge theme for us and many people. There is so much going on now, first of all in the brain, with MMN, CIDP, and gMG. I mean, these markets are really growing. Some of them are totally nascent.

There are multiple competitors now. Yes, there is a me-too theme with an FcRn, but there's a lot of new biology. Then you're seeing a lot going on now in myositis, in Sjögren's, in TED, in all sorts of humoral rejection, and in Graves' disease. There's a lot going on in COPD and, obviously, a lot going on in asthma as well, including new modalities and inhaled biologics. It's really incredible. That's a huge theme for us.

Another one that's clearly emerging—which isn't new, but is going to become maybe more biotech-centric in a very competitive way—is obesity. This ADA is not going to be the Lilly/Novo show. It's probably going to be more of the biotech show. Amgen's going to have a lot of data, including its go-slow-and-low dose-escalation strategy, which it really is convinced will be much better tolerated.

They've now started their Phase 3 trials. They announced that earlier this week. Mirsera is going to have a lot of data. Kylera, the new Bain Atlas RTW spinout out of Hangray, has pretty impressive data, and they're going to show Phase 3 and Phase 2 data this year, and they're moving to Phase 3. Of course, there's going to be data from some of the traditional biotechs that have been out there. There's actually a lot going on that leads us to be fairly optimistic. Valuations cannot go any lower, knock on wood.

Yeah, and it's interesting what you said about the Cowen Conference. I think of it like there are 3 conferences in the industry where other banks show up, where there are a lot of industry events generally, so Cowen is now one of them. There's the Jefferies Conference in London and, of course, JPMorgan. It's great to see that.

Let's talk about some deals—small deals this week. Jazz Pharmaceuticals announced it's acquiring Chimerix for about $935 million, a 72% premium. Eric, what are your thoughts on this deal?

Well, Yaron just mentioned that there are a lot of companies out there, especially in oncology, that have niche products and would be better as part of another, larger entity or organization. I think this deal speaks exactly to that type of trend.

Chimerix came out of nowhere with a drug called dardabaprone. This was just a $1 stock 3 or 4 months ago, and the trigger for them was that they gained alignment with the FDA on an accelerated-approval strategy in a fairly rare subset of pediatric glioma. This is not a large patient population, maybe 1 to 2,000 patients in the US Of course, you can expect premium pricing, and I think they will make this into a multihundred-million-dollar opportunity.

It was a big deal when they were able to align with the FDA to file for approval based on Phase 2 data. They subsequently received priority review. Congratulations to the management team for executing around that value creation.

We do think that Jazz has done similar deals of this nature before. I think Jazz really has been built on an acquisition strategy where they're looking for singles and doubles, and not necessarily home runs. Chimerix, with its 10-plus-year public-market history, had a lot of struggle. Again, good for them.

This is really a deal where I think 1 plus 1 can equal 3. It's not going to turn too many heads. As you mentioned, Daphne, it's a sub-$1 billion transaction. But it seems like the right thing to put dardabaprone into the hands of someone who already has an oncology franchise and can drive better margins from this product economically. This is just a financial transaction, and it makes sense. I'll pause and see if others want to comment.

It seems to have been a well-received deal on all sides. There was another small deal, the AbbVie–Gubra deal, which includes $350 million up front and $1.87 billion in Biobox. I'd love to hear from Tess on what you think about the deal and AbbVie's move into the obesity space.

Yeah, absolutely. First, it's really not a surprise that this is a space that's very relevant for AbbVie, right? Recall that they have a leading aesthetics portfolio. Obviously, GLP-1s do a lot more than aesthetics, but there are many ways in which it's really complementary with their business and their portfolio.

I think this was an interesting move into obesity because it's taking a very different approach than most of the BD deals that we've seen, where companies are really leading with a GLP-1 and building on that. AbbVie chose to lead with an amylin.

One of the things that's interesting that they highlighted about the Gubra compound is that it has a pretty long half-life, about 270 hours, so that can perhaps enable less frequent dosing. Some analysts noted that AbbVie is looking for weight loss of about 15% to 20% on a standalone basis for Gubra's amylin product.

I think that's pretty interesting because I think that is probably a bit higher than what we've observed from other amylins in the past. So it's an interesting entry into the field, and I would not be surprised to see this followed by perhaps some smaller deals to continue building a portfolio in this space.

Yeah. Thank you for summarizing that. It's interesting that some of these companies have been slower to get into obesity, and I know Pfizer also said something recently about it being almost too late for them to get in. It's just interesting to see how different pharma companies are looking at what has been a very hot space.

Sorry, just to add something on top of that.

Sure.

I'd just say it's interesting because I don't think it's ever too late for something that's different, right? What Yaron was saying about obesity not just being a big pharma game, but really being a biotech game, we're seeing that with the work that several biotechs are doing. Metsera is coming out with a monthly product, and they're working on an oral peptide; those have the potential to be differentiated, right?

We see other companies, for example, also working on an oral peptide that has a long half-life and could potentially improve tolerability. I think it's important to remember that these are big markets, and when we've seen such big markets in the past, there's a lot of room to make solutions that are better than the first generation. So I think that continues to be a big biotech opportunity, even with good products on the market.

Yeah, for sure, and it seems like the opportunity has shifted toward tolerability, muscle sparing, and other areas as opposed to increasing efficacy. But it's a really interesting space to continue to watch.

4. Fallen Angels Face A Reckoning

A few weeks ago, actually, you were on this episode when we talked about the so-called zombie biotechs, or what I prefer to call fallen angels. These are companies that have a significant amount of cash but had a pipeline setback and are now trading at a negative enterprise value.

There are, I think, one or two obesity companies in that mix, but we're now talking broadly—there are a lot of companies like that out there. We talked about ways these could return value to shareholders, which include reverse mergers, acquiring new assets, and another option that's been less popular: liquidating and returning cash to shareholders. Tang Capital has been very active in identifying these opportunities and has been, in many ways, an unlikely white knight for shareholders in these companies, offering them a way to cash out.

Adam Feuerstein was on a few weeks ago when we talked about this. He wrote another piece this week about Tang, and the news this week was that Tang had offered Celren an unsolicited $3 per share acquisition offer. But they announced this week that they're sticking with their planned merger with Illumis, and they're turning down that offer. Acellerant's stock dropped 13% after the news, showing some investor skepticism about the merger, which ultimately—time and trial results are going to tell if the merger is a smart move or not. But it sounds like there's more pressure from shareholders to take these types of cash deals, and less patience for reverse mergers or just seeing how these different theses play out.

Brian, I'd love to hear what you think about this generally and then also if you could talk a little bit about one of these fallen angels, which is Pliant Therapeutics. Let's start with any commentary you have generally, and then we'll talk about Pliant.

Thanks. In general, this is obviously a big problem for the sector. I don't know what the latest count is, but for the last several years, there have generally been somewhere around at least 100, and upward of—I think at one point—200 names that were negative NPV. That really indicates that shareholders are valuing the company as if the cash it has in the bank is just going to be invested to 0, right? The assets themselves hold no value, and you'll just burn.

That has resulted in a lot of structural changes to companies, where you see a lot of reverse mergers occur. Some shareholders have been activists with some of these names, trying to force capital to get returned to shareholders instead. Obviously, the Illumis, Celren deal is one example of that, with Tang Capital. I cover Illumis, and I do think it's a really, really good deal for Idera. It's a fantastic infusion of capital. If the shareholders of Celren have confidence in the Take 2 program out of Illumis, I think they're getting a good deal there. But that's obviously a point for debate.

When we talk about zombie companies with a lot of cash, Pliant Therapeutics had a setback this week. They wound up discontinuing a Phase 2b study in idiopathic pulmonary fibrosis called the BEACON-IPF study. This came following a DSMB recommendation due to an imbalance of unadjudicated IPF-related adverse events. The stock is down about 40% this week, but this has been a slow car crash over the last month. It's down 80% over the last month. This was just the final nail put in the coffin for the study.

It started last month when the DSMB initially recommended pausing enrollment in the study. The company then assembled an outside expert panel to review unblinded data from the study. This week marked the end of the program. Now the company is sitting at $350 million in cash at the end of the year, and as of today, it's sitting at about $100 million in market cap. So we're talking about $250 million in net cash above market cap. It's now part of this very long list of negative EV names in the sector.

Not to go on a tangent, but Biogen actually had a drug in development for IPF with a similar MOA, αVβ8. Pliant's was αVβ6, but both utilized αV integrin subunits, and Biogen discontinued it after also seeing an imbalance in IPF exacerbations a few years ago. Both utilize αV integrin subunits, so targeting αV has been a bit of a rough road. The company has a number of other αV-targeting drugs, so I think that negative EV sentiment implies that the market is reading that this target, or at least the subunit, might have some broader issues. I would just say that IPF has been a very tough disease overall, and clinical trials here have been particularly difficult to run. I don't know if anyone else has any thoughts there.

One of the things that was interesting about Pliant was that the stock traded down sharply before the original DSMB announcement. Apparently, they had updated something on ClinicalTrials.gov about recruiting status in the US, and I don't know who picked up on it, but the stock traded down quite a lot. I think it was about 40% before the announcement, and then that announcement came out. So this has been, as you said, a slow train wreck.

I am conflicted in the area of IPF, so I won't comment specifically. I do think there are some interesting programs, but I'd love to hear from anyone else about Pliant or IPF more generally.

Really challenging space. Very big unmet need, right? Daphne, I assume you're talking about all the work that the PurTech team is doing on IPF, really coming back with a better version of Esbriet, which is one of the approved drugs. I think part of the challenge here is that there are really just a few mechanisms that we have seen work in IPF, right? There's a lot of room to improve, primarily on the tolerability profile of some of the drugs that are currently approved for IPF, and it's good that important work is continuing on that.

Maybe if I could just go back to the Alnylam-Acceleron merger that Teng Capital Group tried to thwart earlier this week. Like Brian, I cover Idera, and I think this is a good deal from their standpoint, but I also want to give a big shout-out to the board and management team at Acceleron. They had the potential to become a biotech zombie, Daphne, as you mentioned, and they took very quick and swift, thoughtful action, in my opinion, to prevent that from happening, right?

Whether it's Teng or Alnylam that in the end ends up merging with Acceleron, the easy thing to do if you were Acceleron would be to take the money you raised that was initially dedicated to what's now a failed project and reinvest it into pipeline drugs that previously you didn't think were deserving of capital and had prioritized accordingly. They chose not to do that. Instead, they chose to essentially lay off the workforce, seek an alternative route to deploy the capital, and I think it's going to be a more efficient route than throwing good money after bad.

We don't see this happen enough, in my opinion, and again, I just want to give a positive shout-out to a team that took quick action to try and make the most out of its unfortunate lot in our industry.

That's a great point, and I agree with you 100% that boards have a responsibility to think about how they create the most value for shareholders. Sometimes there's a conflict between management and the board, and there's a sort of bias to continue doing and spending. It does take a lot to look at things differently and make a big strategic shift such as this, or such as returning cash to shareholders. I agree with you 100%, and kudos to the board and the team that they were willing to do that.

5. New Modalities Face Hard Tests

Switching gears, we had talked a little bit about biotechs and their ability to launch drugs. Biohaven, in its former form, was one of the few successful biotechs launching a drug. New Biohaven had some news this week, so I'd love to hear from you, Brian, on the Biohaven news.

Great, thanks. I don't know what it is about me that draws coverage of controversial names, but this is certainly one of them. They had news this week. They have an interesting, somewhat differentiated PR strategy. They provide very general updates—or, I should say, they'll update multiple core programs at once—and that may be due to the fact that at any given time they're running 15 or 16 different programs. So updating individual programs is very hard.

Periodically, they provide a number of program updates at once, and that's what we had this week. One of the things that initially jumped off the page to people was that they had a bipolar disorder study that they announced did not hit the primary endpoint for their Kv7 channel activator. I actually think expectations here were pretty much 0. The only calls I really had on it were to gauge what it would mean for Xenon, which also has a Kv7 lead program in a number of indications.

I think the reason here is this was in acute mania episodes in bipolar disorder, and there really wasn't a lot of preclinical or clinical evidence that Kv7 would have an impact here. I think the majority of Kv7 programs, including the rest of Biohaven's phase 2 and phase 3 studies, are not in mania but are more focused on epileptic seizures or depression. That seems to be where the focus is.

But I think for Biohaven investors, where the controversy really sprung out is their molecular degrader program. They have a lead program targeting IgG, and, Yaron, you mentioned this in terms of the FcRn space, but they're sort of trying to go head-to-head with the FcRns out there in terms of rapidly lowering IgG. The debate here has really been multifold. The data has trickled out very slowly, but it does have very robust reductions in IgG.

They announced this week that at 1,000 milligrams, they're seeing an 84% reduction following 4 doses. So this is numerically better than we've seen for the FcRns. I think a big part of the argument is it's not quite up to par with what the preclinical modeling was showing at Biohaven, and there's not really a standard deviation beyond what the FcRns are showing. I think if you look at the multiple-ascending-dose study for efgartigimod, it was about a 75% reduction over 4 weekly doses. So the argument now is: coming to market years afterward, is maybe a 5% to 10% relative improvement in IgG reductions going to be meaningful?

I love this degrader story overall. While this is the lead drug, they have a robust pipeline of other degraders. At J.P. Morgan, they had IgA nephropathy data for a GD-IgA. One degrader that showed what I think is a game-changing ability to rapidly reduce this pathogenic factor. They're really going after many different programs, and I think this IgG data, while I do think it is competitive in and of itself, really highlights the ability to do this to extracellular proteins. I think you're going to hear more and more about these extracellular protein degrader programs, with Biohaven as the main public one, but there are a number of others that are private and have very strong backing. Carolyn Bertozzi's Lycia, and I know, Tess, you're on the board of Avilar, so I'd love to hear any thoughts that you have on the subject as well.

Yeah, absolutely. A really important space and certainly encouraging to see such a strong profile coming out of Biohaven. So, as you say, more to come.

If we have a second, maybe let me chime in, because I think it's very apropos. Brian, by the way, we were complimenting you in our little chat: We love the fact that you have controversial stocks, because you have opinions and you take them on, so kudos to you.

On the comment on IgG, we're all waiting for the immune event data, which is going to test more potent IgG reductions. We saw everyone's good friend, Matt Klein, who's a guest here frequently at our conference. That data is expected imminently. I don't think they know the data yet, but clearly they're expecting a dose response. It's probably not going to be completely linear like a graph, but it's going to be fairly evident.

The placebo effects—and I think this is exactly what Brian is talking about—there is not necessarily linearity between IgG reduction and clinical outcomes, because these are complicated disorders. What's going on in gMG now is, if you can see the data, and I think this is what Roy event and immune event are intimating, the placebo effect has gone up in gMG, so the delta between active and placebo is shrinking. Even if you can achieve a higher reduction, let's say, on an MG-ADL clinical endpoint with slightly better IgG reduction, it's a little complicated.

The good news is I think there is some data suggesting that you can go fairly low on IgG without impacting infections. That was also discussed at our conference. This might be getting to the point, as you said, that we're getting fairly potent, and then it's up to the clinical trial design to work out.

Thanks, Yaron, and I want to stay with you. We were talking about M&A, and obviously one impact on M&A is when M&A goes south. BMS decided to discontinue a program they acquired via a $4.8 billion purchase of Mirati Therapeutics this week. So, Yaron, what are your thoughts on this decision and any implications beyond BMS?

This is really interesting, and this is real innovation. We used to cover Mirati, and then our colleague Tyler covered it. MRTX1133 was essentially the first G12D inhibitor. As we all know, it's highly expressed and involved in pancreatic cancer and some of the other solid tumors—a huge unmet need.

The challenge with that compound—and many remember this—was that it was originally IV, and the PK was fairly challenging, so they made it into a liposomal formulation, which is always tough but may be acceptable for pancreatic cancer. Then they took that different formulation, which they really don't comment much about, into an oral formulation. It failed. The compound always looked very good preclinically in terms of potency, but it failed because of PK.

I think this, along with PRMT5, which so far has been a little disappointing as a class, suggests that potentially Amgen's and Mirati's compounds might not be best in class. There are some others coming behind. That acquisition has disappointed a little, certainly on the commercial side, despite the expectation that Mirati would win the market. Amgen is still the No. 1 brand in the market.

It just shows that M&A, as we know, is complicated. We always advise going earlier and taking clinical risk as opposed to buying something later that's, quote-unquote, more de-risked but fairly expensive.

6. Healthcare Enters A Political Crossfire

Thank you. I want to switch gears and move toward some of the new administration-related news. We'll start with RFK. I heard there was a second death in the Texas measles outbreak today. I don't know if that's been confirmed yet. I was interested to see that RFK put out a statement earlier this week that sounded very pro-vaccination, but there were some mixed messages in there. Tess, what are your thoughts on RFK and, generally, the outbreak? Any thoughts on vaccines in general?

Yeah. It's obviously very unfortunate to see that the outbreak continues to grow. I think the CDC updated cases today. I think it's at around 225 cases, and, as you said, we've seen multiple deaths at this point. I think the CDC has 1 confirmed and 1 that they are checking on.

Daphne, the Fox News op-ed that RFK wrote was interesting, because if you looked at the headlines, I think the headlines looked very positive. Then you read through it, and it was like, “Ooh, I don't know. It doesn't really sound like your full endorsement,” because it was a little wishy-washy to me. I'd love others' impressions, because maybe I'm reading this with the history of other statements that he's made.

To me, it was a little wishy-washy around just, rather than a fuller endorsement of vaccines as the solution to this, really emphasizing, “Hey, there's an importance of individual choice, and you need a very balanced view on safety and efficacy.” It's like, okay, does that mean that the view now is imbalanced? What's the layer behind these statements that are maybe not quite as robust?

Individual choice is obviously a really important factor here, but it needs to be informed by a very robust understanding of just how important it is and how lifesaving it can be to have access to something as fundamental as the MMR vaccine. It struck me as strong headlines and then a little fuzzier beneath the surface, especially when we consider some of the other statements and some of the actions around ACIP. I'm certainly interested if others have a view that's maybe a little rosier than mine.

Yeah, I definitely had the same impression. The headlines were definitely very pro-vaccination, and then if you went and read down, it said things about—I think it was fish oil. It was definitely a mixed message. I was curious to hear from you, Eric, because you were following the Makary hearing.

He was asked about vaccines, and it seemed very similar in terms of the messaging: directionally positive, but probably not as definitive as most in our industry would like. I'd love to hear your thoughts generally.

Maybe just another comment on RFK Jr. and Tess's analysis, which I agree wholeheartedly with. How could you read anything from the NIH, the NCI, the CDC, or other HSS-related agencies these days without a little bit of a jaundiced eye?

Actually, just as we were talking on this webcast, there's a report from Reuters saying that the CDC is planning a large study into the link between vaccines and autism—a link that many of us believe has already been completely debunked. With those types of headlines out there, what's next? Is NASA going to plan a study into whether the Earth is round? This is just getting to be a little bit absurd, and it's very unfortunate for those of us who feel that public health and safety are at risk here.

Moving to the question of Marty Makary's hearing, I thought it was pretty boring, to be honest, Daphne. I didn't think we learned anything. He sort of played the game not to lose. I think it's a foregone conclusion that both he and Shalala are going to be confirmed to their respective positions of FDA commissioner and head of the NIH.

To me, they knew that, and especially in terms of the commentary that we heard around vaccines and what they may or may not do, I thought Makary kind of took the Fifth. He just said, "Look, I'll deal with it when I get into office. I really don't have a view now. I'll take an analysis-based approach and follow at least the data." So maybe from that standpoint, it was a little bit better than what we've heard from prior confirmation hearings from this administration. But I don't think we learned a thing.

Same, and then it can kind of go both ways on the vaccine stuff, right? I guess there's a bear case that things get worse because there's a lot more attention on things that we think have actually been appropriately debunked in the past, like this link to autism.

But there's also the potential for things to go the other way, right? It's like, "Oh my gosh, this crazy measles outbreak. Why did so many people die? Let's not do that again." Who wants to be an outbreak president, right?

It's hard for me to gauge where that could go. I can really see equivalent arguments for how things could get worse and also how things could get better. Unfortunately, I think the way that things get better is through reminders that vaccines are really important for public health, and unfortunately, those reminders tend to come at the expense of public health at some point.

Yep. These are all good points, and we're going to have John Crowley, who's the CEO of BIO, on next week. He's been a little bit closer to the administration, so I think he can comment. I have heard generally that Marty Makary is viewed as somebody the industry can work well with. We'll stay tuned on this.

But related to this topic, we were on break last week when Pfizer announced that former FDA director Patrizia Cavazzoni had joined the company as CMO. The move sparked some mixed feedback, including criticism of the "revolving door" between the FDA and big pharma, on the one hand, and positive feedback from others who note the importance of cross-pollination and expertise. Brian, I'd love to hear your perspective on this.

I certainly have opinions on this. Our weekly recap note to clients was actually titled "Revolving Regulatory Door Triggers Synchronous Facepalms."

At the surface, given the Trump administration's current positioning and some of the people high up in health, whether it be RFK Jr. or Calley Means, the idea of Pfizer hiring Cavazzoni directly from the FDA just seems like really bad PR. I would think RFK and Calley Means' heads are exploding just hearing about this.

Now you have Scott Gottlieb there as a director and Cavazzoni as chief medical officer. There's certainly a ton of criticism about the revolving door between regulatory agencies and industry. We all use consultants who are former FDA people. They do very well; they're some of the highest-paid consultants that we use. There's certainly no shortage of them who have gone inside companies themselves. I could probably rattle off a dozen or so former office or division directors who are now within industry.

That closeness has led to a lot of criticism, right? If you're looking for a job at Pfizer, are you going to cozy up too much to the people there as you're reviewing their drug? There very much runs that risk, and that's been a big criticism of the administration, in particular those on the healthcare side of the administration.

But there's value, too. I want to use these people because I want to understand what the FDA is thinking and what a particular division is thinking. If you can truly be unbiased and eliminate conflicts of interest and any sort of quid pro quo, then it's enormously valuable, right? If you are Pfizer, you want to know what the regulators want in terms of clinical trial design, what endpoints they really care about, what's going to sink a program, and what's going to make it successful.

So it's important, and I find it very hard to go back and forth with that ethical dilemma and really understand it. The other funny thing that we were saying internally—and I think this is not to poke fun at Trump, but there's a lot of inconsistency in the administration, right? On the one hand, on the healthcare side of things, they're very much against industry and regulatory interaction or coziness to that extent. But there are other areas where they're completely deregulatory.

I said, "While on one hand you kind of have really bad PR to hire Cavazzoni, it's probably at least a 20% chance that in the next 6 months we hear that the FDA is going to be completely eliminated and Pfizer will just handle regulation of drugs from here on out." But yeah, it was definitely a controversial thing to see happen last week.

Yeah, it's interesting. She was criticized when she joined the FDA because she worked at Lilly and Pfizer, and now she's criticized for going back to industry. But the whole idea of what constitutes a conflict is interesting to discuss.

For example, I got into a discussion with Vinay Prasad. I'm not sure if you guys are familiar with him, but he's very prominent on social media. He came out with a statement saying, "If your oncologist has ever taken any money from pharma, you should fire them and find another oncologist if a family member has cancer," or something like that.

He and I got into a discussion about this because that would essentially mean removing the most highly regarded oncologists who participate in clinical trials and have a broad perspective on new treatments. My concern is that people have other types of conflicts. For example, in the case of Prasad, he gets subscription fees and benefits from making controversial statements.

Sometimes conflicts may be less apparent. Some experts might be perceived as conflicted, but in the case of oncologists, they're usually very dedicated and caring people who want what's best for patients. So this whole topic—

Oh my gosh. I'm so with you, Daphne.

Also, what are you doing when you're accepting money from pharma as an oncologist? What's the typical way you're doing that? It's because you are part of a clinical trial where you're saying, "I would like to see if this drug works and can help patients."

Are you saying that doctors shouldn't do that because it's a conflict? What does that mean? We shouldn't have clinical trials, or doctors have to choose between patient care and clinical trials? It just—

I think you can really go too far. A key thing about conflicts is disclosure, right? I think the key is just people being aware of, “Here’s where I come from, and these are drugs that are being studied.” The purpose of studying them is X, Y, Z, and yes, it’s helpful to have patients aware.

You don’t want a physician who’s actively encouraging patients to go on a trial where they may get randomized to a drug that has a very high toxicity profile, with a very limited chance of benefit, and with a poor standard-of-care arm. But what ethics committee is really going to approve that trial in the first place?

So I agree with you. I think it’s really important to separate out what we’re really worried about with conflicts, and how we ensure appropriate disclosure and appropriate controls, right? So, Brian, you were talking about Patricia leaving the FDA. There are very strict rules about her ability to reach out to people at the FDA.

I think, you know, I agree—this is really not a good look for our sector—but there are actually quite a lot of controls in terms of what she’s able to do to really call a review team and tell them to make a certain decision. One, she’s not their boss anymore, and two, I think there are actual rules that say she’s not allowed to do that.

So I think we need to address this whole issue with a lot more nuance so that we don’t lose the value of collaboration that’s required to get a drug to market.

The other control that’s on this system here is moral character, and I think most of us are scientists—all of us are scientists on this call—and many of us know many scientists. Generally speaking, scientists are wonderful people who get into the business of science, or just the nature of science, by virtue of being curious, analytical, and driven by the truth.

And yet there seems to be, in some circles, distrust—this underlying, almost bias against the culture that is science right now—and that’s really disheartening to me, and I’m sure many of you as well. I’m not sure quite where it’s coming from or what we can do to fight it. Maybe more science education is something that we need to pay more attention to.

Is it—

Yeah, it’s a good point. I think there’s a lot of blowback from everything that happened during COVID, and some perceptions of the scientific community being dismissive and also a little bit arrogant, I think, toward the rest of the world. So we’re dealing with a little bit of that as well.

But hopefully it’s going to be more balanced going forward. We’re almost at time. I think we had a couple more topics that we wanted to touch on. Eric, you and I were going to talk a little bit about networking best practices, and I don’t know if you want to kick it off, and then I can comment as well.

7. Networking Requires A Specific Ask

Yeah, I think what stimulated this is our back-channel discussion, Daphne, on your very eloquent post on X, where you provided some feedback to folks on how to reach out.

I think all of us on this call get pinged on social media, email, or other channels all the time, probably with requests from younger people to network. First, I’d say keep those requests coming. None of us are so old that we don’t remember how difficult it is to break into the biotech industry, and I know we’re all flattered on some level that, when we do get pinged, it’s because we’re viewed as trustworthy enough to be sought after for our advice or our help.

Oftentimes, I’m very impressed, by the way, at the way some of the younger generation approaches networking, with a maturity and professionalism that I never had at that stage of my career. But every now and then, we get a request, Daphne, that might fall a little bit short of the mark. So why don’t you continue with a quick summary of your thoughts?

Yeah, I think what prompted me to post was actually a positive interaction. I had somebody reach out to me and say, “This amazing person who worked with me just applied for a job, and if you want to talk, give me a call.” I went and talked to our HR person, and it prompted me to say, “I just got unsolicited feedback on one of the candidates,” and it sort of moved that person up.

On the other hand, you get people who reach out to you. Earlier in your career, you want to network for the sake of networking, but as you get busier, there’s less interest in networking for the sake of networking, and there are some unwritten rules that seem worthwhile talking about.

One piece of advice that I put out there, and I’m happy to get feedback on it, is to be very straightforward and specific about what you want when getting introduced. People sometimes get connected to a CEO or someone senior within pharma or an investor, like Tess, and they say, “I want to pick your brain,” or, “I want to ask for career advice,” or, “I want to hear about your company or your journey,” when what they really want is a job, or they really want to expand their network and get to know more people.

But if someone’s busy, it’s better to come with a specific ask or a goal—a goal that you want coming out of it.

I was also thinking about the concept of helping or being polite. As you mentioned, Eric, a lot of us want to help others and make introductions, but if somebody asks you to make an introduction to a high-powered person you know—and I’m not talking about myself; I’m saying if somebody asks me to make an introduction to somebody else I know—you may initially feel like it’s impolite or unhelpful to say no.

But every time you introduce someone to another party, if that party—let’s just say it’s somebody at a big pharma company—views that introduction as uninteresting or low-value, you’ve now taken an ax to your relationship with that person. It hurts you, and it also hurts your ability to make other connections in the future.

What I was saying on this thread was that doing some research can help. Sometimes understanding this principle of hurting your connection and protecting your network makes the connections you do have more powerful.

There are other best practices, like dual opt-in, meaning you ask the receiving party if it’s okay to make the introduction. That takes the onus off of them, so they’re not having to reject someone they don’t know, and I think it also preserves the relationship.

So I’d love to hear from others and just open it up. I got some positive feedback on my thread, and I also got people pushing back because I think they thought—

There was a perception that it was like, “Oh, you’re too busy to take these connections.” But I think the point is really that there’s a way to do this and be effective and build and strengthen your network, and there’s a way to do this where it actually hurts your network.

So I’ll open it up and see if anybody wants to comment. Can you guys hear me?

We can. We can definitely hear you.

Okay, great.

I think it’s a really good question. A lot of it also just depends on the closeness of the individual asking. There are so many factors at play.

I do think that specificity—“Hey, here’s what I’m looking to understand”—is important. I think your best-practice example is a very good example.

What can be hard is people who maybe aren’t quite sure what they’re looking for yet. They’re like, “I’m at a big pharma company. I’m kind of interested in learning about small biotech and understanding, is that something that I want to do someday? I’d just like to get to know some biotech people to understand what that career path looks like.”

I think if you actually spell that out and make that intent clear, there’s a lot of openness to having a more open-ended discussion. So, Daphne, I don’t take your advice to mean that you have to be very specific about, “I’m looking for a job,” or, “I’m looking for this.” It doesn’t need to be this kind of transactional thing.

I think you can have these networking conversations that are more open-ended questions. But I think sharing the motivation can often be really helpful so that the other person can direct their conversation with you and also potentially help facilitate introductions with people who may be even more relevant for them to talk with.

Yeah, and also consider who might be open to that kind of more open-ended networking versus who you might want to come to with a specific request. That’s actually an important piece of it.

Yeah—

Any—

Definitely, yeah. I agree with a lot of what you said; it resonated, and I think one element, as you said, is that if you're more direct, the person might be reaching out wanting to talk to you, but you might actually have a friend or a colleague who is probably better suited to specifically discuss what they're interested in.

The one thing that I find resonates a little bit more is if you get one of those, “Hey, I want to hear about your company,” or, “I want to hear about your career.” That's certainly one way to do it. Another one that I find maybe a little more compelling is when they say something very specific: “We know you work at XYZ, and XYZ does...” When they show an effort and an interest, or they touch on something you've done and double-click on that, there's some effort and proactiveness. I think that just shows more diligence and a little more seriousness, and that might lead people to be more inclined to take the meeting.

Yeah, that was actually one of the points that a lot of people who were responding to the thread said: “Do some research.” I think that's a really great point, because if you do a little more research, you're more likely to get good results. It's also viewed as being polite, because you've spent the time to really understand the person you're asking to meet with, or the person who's making the introduction.

I think we're out of time, but I'd like to just ask one last question. I just heard that Nasdaq is announcing plans to move to 24-hour trading. Anybody want to comment on that? Then we'll close out the room.

It sounds terrible, but it shouldn't actually change too much, because I would expect that what's happening overnight is probably very low volume. I'm not sure if others have a standpoint, but we currently have pre-market and post-market, right? You see stuff move around, certainly when there's a data event or something like that. Sometimes those moves can be more significant. But I would be surprised if we see very high volume starting at 3:00 in the morning under this new policy.

For one, I am very much looking forward to the 3:00 a.m. call from a client asking, “Why is stock XXXX up 10% right now?”

On 5 shares.

Great.

Well, Brian, that's when ChatGPT takes the call and answers it for you.

You're going to put us all out of business, Yaron.

I gotta tell you, for me, I don't know. I kind of love innovation and technology, and I feel like you could have argued back in the days when we all used to meet up under a tree to trade stocks, and now it's all computers trading with computers. That's going to lead to innovation. It's going to lead to more complexity, for sure.

Yeah, probably going to need 2 Brian Skorneys at every firm, right? One in the morning, one at night. But I think that could be interesting. There'll probably be mayhem in the beginning, but things will sort out, no?

Okay. Well, thank you, everyone, for an excellent discussion. It was a pleasure speaking with all of you. Thanks to everyone who joined, and we wish you all a great weekend. See you next week on Biotech Hangout.

Thank you, Daphne.