第153期——2025年9月5日

I'm PaulMatteis. I'm a biotech analyst at Stifel, and my co-hosts today are John Maraggonor, Sam Fazeli, and Greg Savanovich. Greg, did I say your last name correctly?

You nailed it. Thanks so much, Paul. For more information about our hosts and guest speakers or to listen to the most recent episodes, please go to biotech hangout.com.

We have a lot to talk about today. Sam, you wanted to kick it off with a more positive outlook on the biotech space trading well. Maybe you can give a few thoughts on some of the fundamental factors. I have a quick view, and I'd love to hear from the others as well, but Sam, please take it away.

Yeah, sure, Paul. Hello, everybody. It's been a bit of an August hiatus, so it's nice that we're all back—back to school. Look, I'm looking at the S&P versus XBI right now: XBI is up 11.9% in the past month, versus 2% for the S&P 500. That's not a normal scenario for us to be living in.

We've had 2 or 3 years where we've underperformed the S&P. Now the S&P, of course, is in a very interesting situation where it's driven mostly by a few companies, but even there, some of them seem to be running out of steam. At least there's competition between a Broadcom story versus an NVIDIA story versus an Advanced Micro Devices story, et cetera. So that's looking great.

We also had the fact that, for the past 2 or 3 years, we've been driven by macro factors in terms of higher interest rates making it tougher for people to bring cash into higher-beta stocks and sectors such as biotech. At the same time, we were dealing with a glut of too-early-stage IPOs that happened in 2019, 2020, and 2021. So there was a confluence of factors.

We've been around this a few times, and we've ended up talking about this only to have it thrown back in our faces, but it looks positive. Nonfarm payrolls just came in at 22,000, much lower than the consensus of 75,000. The range was 30,000 to 100,000, so that's kind of cemented a rate cut for September at 0.25%, and some people are talking about half a percentage point. That's pretty significant. It's good for biotech, right? I think—yeah, go ahead.

Well, no, I mean, they're all great points. I think it's interesting to see the decoupling from the S&P 500 because one factor—and I'm already over my skis bringing this up—is what I hear from some investors who work at mutual funds that don't just focus on healthcare. We're seeing the tech craze and the AI craze come back to earth a little bit, right? I think that makes our sector relatively more attractive.

We've talked about this in other podcasts, too, but unlike other years, where we have a big bounceback driven by M&A, there's been a little bit of M&A, but M&A has actually been more underwhelming with the premiums. I think we're seeing a lot of smaller and midsize companies have a bunch of successful drug launches, and I think that's been unique as well. What are you hearing from investors? And then maybe I'd love your perspective, too.

Yeah. We have a great healthcare-sector sales analyst. His name is Jared Holz, and he provides market commentary. I think it's very consistent with what we're hearing as well. We've got a couple of big healthcare conferences taking place in New York this week, and generally speaking, sentiment is pretty decent right now in terms of how investors are thinking about the biotech space.

It appears that the negatives we've been dealing with—uncertainty with what's happening, maybe with the FDA, HHS, and CDC, and all of that—are being appreciated. Certainly, we're still in the interest-rate environment that we're in, but at least the negatives are being appreciated. I'm not saying we're totally out of the clear just yet, but it does seem that, on balance, there is a view that maybe we understand what the issues are.

I think it's really a positive thing if you think about where we are in the biotech markets. If you look at where we've been since May, over the past decade—and take out the COVID euphoria we've had—we've had the largest upward trend in over a decade in biotech right now. Again, who knows what next week will bring, but I do think sentiment does appear to be turning, at least at this stage. At least that's the sentiment we're hearing coming out of the conferences in New York right now.

No, I have nothing different. But I'll triple down on the sentiment of what you guys have said. I hear from a lot of investors and a lot of companies that people are feeling there are some green shoots here. I think it's very correlated with the anticipation around the Fed working on interest rates now, which I think is really the driver of some of this recovery, beyond some of the fundamental points that you brought up, Paul, which also helps enormously.

If the Fed does cut rates meaningfully, I think people are shrugging off all the uncertainty on the FDA, tariffs, and MFN side of it. People are shrugging that off, believing that companies will figure their way through it, which I tend to agree with as well. I think we could finally be getting to a better place here. It's been a long time, so I don't want to jinx it, but it feels better than it's been for a while.

Yeah. There's been a lot of financings, too. No IPOs, but secondaries that seem to have done well.

Maybe let's go through some of the news from the past week—or I guess the past couple of weeks. We've got 5 or 6 news items to talk about, and then we're going to talk about some catalyst previews and other macro things. Sam, do you want to talk a little bit about OX40 and the setup for Sanofi, and just the implications going forward?

Yeah, sure. This is one of those situations where you don't usually see large pharma trading down 10%. We have seen it with Lilly and Novo in their back-and-forth on obesity drugs, but here it was Sanofi yesterday. The stock was down 10% at one point, maybe a bit higher or a bit lower, and they had a drug with a positive readout, which I'll get to in a minute.

Why was the stock down so much? Dupixent, the drug that they share with Regeneron through a partnership, is expected to have 2030 sales of $2.5 billion. That easily beats Humira, and that's 38% of revenues in 2030. In 2031, based on current knowledge, the product loses patent protection. So Sanofi needs something to fill it back with a variety of things. I mean, $25 billion is a tough thing to fill out.

The stock was down 10% on the initial Phase 3 data from the COAST 1 trial of amlitelimab, which is an OX40L antibody in atopic dermatitis. The trial met its primary endpoint, right? But the efficacy is the problem, in that it fell short of what would make it interesting compared with Dupixent. We have to see the detailed data—the baseline characteristics, the background treatment, et cetera—but cross-trial comparisons honestly show it to be pretty similar to Amgen's competitor, rocatinlimab.

So we do need to see the more detailed data, but it does look like it's trailing the gold standard, which is currently Dupixent. Only 1 in 3 patients who go on Dupixent are optimally controlled, so there is room for cycling, just as there often is in these types of diseases, as we always knew with the TNFs.

But there is Ebglyss out there on the market already, so maybe amlitelimab ends up being a third- or second-line option. It definitely has raised the question of how Sanofi is going to manage that patent expiry. They have other drugs that we like, like tolebrutinib and rilzabrutinib, but currently the jury is out as to what this looks like for them in that timeframe and whether this is going to entice more M&A for drugs that will make a difference in that time period.

Yeah, I mean, it's interesting how, in large-cap biotech, you can have these big, complicated companies that still, at the end of the day, feel like they trade like small caps, where only 1 or 2 products matter to people. A competitor emerges, and suddenly there's this big new bear case. Something to watch.

Speaking of companies growing into large caps, you wanted to talk a little bit about Insmed, where there was a big week here, too. I'll leave that to you.

Yeah, thanks, Paul. I do want to take a few minutes to talk about one of the most exciting companies in my coverage universe. That's a New Jersey-based company called Insmed. It's probably more of a mature, later-stage commercial pharmaceutical company, but for those who don't know Insmed, it is a respiratory-disease company. It's got a drug called Arikayce. That drug has been on the market for 7 years now.

It treats a specific lung disease caused by MAC bacterial infection, and it is on track to generate, by our estimates, over $400 million in revenue this year. But the company has had just a monster of a year. The stock is up over 100%; it has more than doubled. Now it has a market cap of, incredibly, over $30 billion. That’s really no small feat when you double your market cap and you’re that big already.

Although it’s a commercial-stage company, our excitement as investors really lies not necessarily in the prospects of the approved drug, Arikayce, which I just mentioned, but in 2 new products. First, there’s a drug called brensocatib, for which positive Phase 3 data were announced last year, and the stock since that data readout is up over 500%. Brensocatib just got approved last month and is now known as Brinsupri. It’s for a condition called bronchiectasis. There were no FDA-approved drugs for this condition, and the company is projecting peak sales in this indication of at least $5 billion. That has been a main reason for the excitement in the market about Insmed.

Again, it’s a drug that’s just launching now. Secondly, Insmed has another drug, a pipeline drug called TPIP. It’s a much better version of United Therapeutics’ Tyvaso, which has been on the market for over 20 years now. This year, in June, Insmed reported positive Phase 2 data in the setting of pulmonary arterial hypertension, or PAH. Those data were far better on efficacy than we and the buy side had anticipated, and that provided yet another positive catalyst for the stock.

The shares moved about 30% higher back in June when those data were announced. There have been some other recent catalysts for the company that have helped move the stock. Again, the approval of brensocatib, now called Brinsupri, was a catalyst just last month. The label was really clean, and product pricing was well received by the market.

Then, just last week, we talked about United Therapeutics’ Tyvaso product. United had tested, or just ran, a first Phase 3 study for Tyvaso in the setting of idiopathic pulmonary fibrosis, or IPF. There were a lot of questions about whether Tyvaso would work in IPF, but it did in a first Phase 3 study. There’s a second study that’s ongoing, and I think that’s going to read out perhaps early next year.

That data sent United Therapeutics’ stock up 30% or more. Again, that’s no small company, and there were positive read-throughs for Insmed. With the view that wherever Tyvaso might work, Insmed’s TPIP drug, which works very similarly, is likely to work there as well, Insmed shares moved up another 7% on that positive read-through. Overall, it’s just been a really great run for Insmed.

Yeah, fascinating, and a big week recently, too. Good stuff. Thank you. Do you want to talk about—does anyone want to add anything there? Okay, maybe let’s keep going because we have a lot of news. Do you want to talk about the APOC3 data, the big readout from Ionis, and the Arrowhead update?

I think you’re the most topical, or one of the most topical people, to talk about this, given that we’ve got another ASO-versus-RNAi cage match emerging in a big cardiometabolic indication. I’ll leave it to you to start it off.

Yeah, it seems like RNAi and ASOs want to arm-wrestle all the time, but it’s all linked to the same phenomenon of delivery, of course, at the end of the day. Ionis presented Phase 3 data from their CORE studies with olezarsen, which is their APOC3-targeting antisense oligonucleotide. It’s a GalNAc-conjugated ASO that’s given once a month.

The data were fantastic. They really were. My hat’s off to my friends over at Ionis. The triglyceride lowering ranged between 50% and 70%. They tested 2 different doses, and depending on the dose, the patient population, and the 2 different studies, there was meaningful triglyceride lowering.

I think most importantly, though, was the reduction in acute pancreatitis events. This has been the real question in the field of triglyceride lowering, especially with the APOC3 mechanism: will you get a signal on acute pancreatitis? That’s obviously a clinical endpoint that would be very meaningful, not only from an unmet patient-need perspective, but because pancreatitis is a very severe condition or event and could be life-threatening as well.

The fact that you can potentially develop a drug in the severe hypertriglyceridemia setting without having to go to an outcome study, which would be challenging—Vascepa did it, obviously, with Amarin, but it would be challenging. I think, by all accounts, even the Vascepa story itself was controversial. Olezarsen looks very promising, and that’s a Phase 3 study. I’m sure this product will get on the market.

We’ll have to see what the safety data really look like; we haven’t seen very much from that yet, but that does look encouraging. Then our friends at Arrowhead are developing an siRNA targeting APOC3, which is a couple of years behind olezarsen. In this case, they had open-label data from their PALISADE Phase 2 study, where they showed sustained reductions in pancreatitis events.

Over a 2-year period, the event rate was around 20% for the placebo group, and it was reduced down to 4% for the zodasiran group. This drug is going to be given once a quarter, so it looks like another showdown between these 2 mechanisms. zodasiran is associated with a more significant reduction in triglycerides by far compared to olezarsen.

This is setting up the same type of story we’re going to see with Lp(a) in about 1 or 2 years, between the HORIZON study being run by Novartis with an Ionis-derived Lp(a) drug called pelacarsen, as well as the olpasiran drug that Amgen is developing, which also came out of Arrowhead. That will be another showdown. That, too, is one where the ASO is a little bit ahead of the siRNA, but it will be interesting to see the pharmacology and clinical results with that product as well.

That’s the story. It’s great to see the innovation happening on this target with APOC3, and it’s wonderful to see the consistency of reduced pancreatitis events across the 2 different drugs.

Yeah. Maybe some questions for you, given that you’ve spent a lot of time in the cardiometabolic space and obviously know these drugs well. Do you feel like this is a market that small companies can tackle well independently? I think the one thing that I’ve struggled with, as someone who covers Ionis and obviously follows Arrowhead out of competitive interest here, is that it feels like this is not a KOL market. The KOLs love these drugs, but to make this a big class, you probably have to go a lot broader. Is that a fair depiction of the space? What do you think?

I think so. I think that’s going to be the commercial challenge that both Ionis and Arrowhead will have to face as they bring these products closer to market. How will they commercialize them? It’s going to be a different type of commercialization effort compared to other drugs that they’ve commercialized—not Arrowhead, but Ionis now, at the beginning of their work in familial chylomicronemia syndrome, which is an ultra-orphan condition linked to APOC3 and triglycerides.

That’s very different when you think about expanding into this severe hypertriglyceridemia market and recurrent pancreatitis, which is really more of a prevalent-disease-type setting. I think those companies are going to have to make decisions around their go-to-market strategy, how they do it, if they do it, and how they partner eventually.

Yeah. To add some context on the stock, Ionis had a huge move this week. The data were a lot better than expected, and I think one thing the investment community is assuming is that, with this outcomes benefit on pancreatitis, maybe the price in the model goes up significantly. I think they’ve been talking about the $20,000 range, but perhaps that could be really conservative.

I think we’re all assuming the event rates for pancreatitis in these studies are low. So even though you’ve got this big reduction, we’re not talking about 100 events here, probably not even 50, right? Do you feel like that kind of data, if it’s on the label, adds significant pricing power to this class?

It certainly does, but it’s also going to be associated with a narrowing of the patient population that gets treated. You’re going to have a trade-off if there’s significant change on the pricing side into the 5 digits. I don’t think it’s going to get much higher than 5 digits, but certainly into the 5-digit level, you’re going to have a significant reduction in the patient population that ultimately gets treated with the drug. That trade-off would have to be considered. But I think the access and go-to-market strategy will still require some good thinking. I mean, this is going to be beyond just a KOL, lipid-specialist-type market at the end of the day.

Yep. Yep. Okay, very interesting. And I guess, John, do you know when we're going to get the Arrowhead phase readout?

I don't. I believe there's been no guidance on it so far. I feel like it's in the next year or something like that.

I think it might even be a little bit longer.

Okay. Okay. All right, very good. Well, Sam, you wanted to talk a little about obesity readouts, and then I'm just very interested in a broader discussion around how the investment community has been reacting to some of the obesity data sets. I have no skin in the game. I don't cover any obesity stocks, but I'm highly interested, and I've been meeting with companies in the space.

I recently met a private company, Kailera. My buddy Ron Renaud is the CEO. So I'm very interested, and I guess I'm a little surprised, as an outsider looking in, at how sensitive these stocks are when a drug misses a bogey on weight loss by 2% or 3%. I just can't think of any market for drugs—outside of oncology or these kinds of life-threatening diseases—where these tiny differences in efficacy actually drive the almost existential question of whether a drug is commercially viable.

That's the broader conversation I wanted to have here. But, Sam, maybe you can review, and I would love your perspective, too, on just how trigger-happy investors seem to be about whether data hit the bogey or not, and the perceived implications.

Yeah, Paul, we're dealing with companies that were sitting at valuations that were never seen in the large pharma world, right? Johnson & Johnson perhaps always led the market-cap range for large pharma, and then we had Eli Lilly heading toward a trillion dollars. Could it be the first trillion? So when you have situations like that, you do end up in these kinds of swings.

Of course, Novo Nordisk was sitting up there in the 7800 Danish-kroner range. Sorry, I look at the European name. So, is it a zero-sum game? It kind of looks like it, right, in terms of when you add up all these market caps and see where things are. At the end of the day, there's a population out there that needs to get treated. There's a bunch of drugs out there that are supply-constrained, most of them, although that's being addressed.

A lot of these things are trading on what it's going to look like in 2028, 2029, and 2030. What sort of data have we seen in the past 3 weeks? The massive moves have calmed down a little bit, but Novo came out with a real-world-type study—although, honestly, I'm not sure it's real-world—showing that their 2.5-milligram and 4-milligram doses had a 57% greater reduction in the risk of heart attacks and strokes, et cetera—MACE—than tirzepatide.

I'm sitting there thinking, how can that be possible? We never saw that in the RCTs, in the randomized controlled trials. The reality is, the follow-up was short, et cetera. But it all points in the direction of their doing everything they can to give themselves some kind of marketing edge or power to be able to fight each other, which speaks to your zero-sum game.

In the end, it all came down to the share price being up a little bit and down a little bit, and I think people realized that you have to take this with a pinch of salt. It was a retrospective database analysis, not really a real-world study. We really have no idea what doses people were on for tirzepatide. So, there are quite a lot of unknowns in there, although it caught the headlines.

Then, of course, just before that, we'd had the 2 oral data sets. 1 was from Lilly. This time, their share price didn't tank because I think they set expectations correctly. This was in obese diabetics, and the pill showed a 10.5% weight loss versus 2.2% for placebo.

Remember, a whole bunch of people have gotten used to the 22%, 23%, and 25% targets that people are talking about for the injectables. So it seems that folks are now getting to accept that the oral drugs—at least these small-molecule orals—aren't going to give you that sort of level of weight loss. Maybe you don't need that. It's always been our view, and I think a few others are chiming in on this as well, that those weight-loss levels are just crazy high and you probably don't need that, especially if you're thinking about a maintenance setting.

The problem was that the tolerability wasn't great, but it's very clear that they've got a product they can get to market that doesn't need a peptide. It's a true small molecule. So they should have good positioning versus oral semaglutide from Novo, which is coming to market probably just a few months before it. Oral semaglutide does need to be taken in a fasting state, which is a particular drawback.

The last thing I'll say on this is that Viking then had the VK2735 oral data, which was a Phase 2 study and also a pill. That came out with a 12% weight loss at 13 weeks, which is probably the best in class we've seen. The problem is they also had a best-in-class—that's not quite right—worst-in-class, if you want to say that, tolerability profile, with a pretty hefty 28% of patients on the drug stopping treatment versus 18% on placebo.

They need to do some work there on the dosing, but there certainly seems to be skin in the game for Viking in terms of oral drugs. All this adds up to a bunch of drugs coming along. Tirzepatide and semaglutide are still the key drugs out there, and everything else that comes in is going to have to figure out where it's going to fit. Is it maintenance? Is it cycling? That still has to be worked out.

Sam, how big are you guys now estimating this category to be at peak? And have you guys lowered those numbers at all in the past year?

No. I'm just looking at my colleague's note: “Eli Lilly to outpace Novo as obesity sales hit $100 billion in 2030.” It has not changed. We've done an enormous amount of work on our Epi, to the point where I think the poor guy—this is Mike Shaw, my colleague—is now modeling country by country in Europe, which, of course, you can't follow, but he's done that effort.

Yeah, that's always fun until the reported results come in and you can't update the model. I did that.

I know. I know, but it's still—

But that's awesome.

He's done the work.

Yeah, I respect that. Brian, you cover a couple of stocks in this space, and John, if you have any views, too. I mean, if you're thinking about a small company in this area, where's the room for differentiation, and can a small company even really compete with these big guys?

Yeah, Paul, that's a great question. We do know—you talked about mentioning a private company, Kailera. There are a host of smaller companies that are obviously looking at the huge TAM involved in the obesity game. Sam just mentioned $100 billion in sales for perhaps 1 product.

I don't cover Eli Lilly, and I don't cover Novo, but I do cover a couple of smaller companies that have some earlier-stage programs. 1 in particular is called Terns Pharmaceuticals. They're a Bay Area company that has an oral GLP-1. We're going to have Phase 2 data in Q4, so that's an upcoming catalyst and data event for folks to pay attention to.

Then I cover another small company called Corbus Pharmaceuticals, and they're interrogating the old CB1 mechanism of action. Those who may have been around way back when will remember Sanofi's rimonabant and the saga that was rimonabant back in the mid-2000s.

We just did a call for clients last week with 2 obesity KOLs, just to get their sense of where we are in the current GLP-1 market. There are a lot of investor debates around the tirzepatide-versus-semaglutide battle, and we spent some time on what the need is, if there is indeed a need.

I would say some of the high-level points are that the GLP-1s certainly have been revolutionary. Obviously, they were in diabetes first and obesity second. On the obesity side, because of greater potency, tirzepatide is probably being used a little bit more right now, although there are some reimbursement challenges. Certainly, semaglutide is doing well enough, and it's not necessarily a dynamic where we're seeing patients getting switched off semaglutide if they're already doing relatively well.

I do think that the reimbursement issue right now is probably the biggest challenge. At least that's what the KOL we spoke with said, particularly on the obesity side of things. We've also got, down the road, potential cuts to Medicare and Medicaid spending here in the U.S., and they highlighted that as a particular challenge.

These aren't terribly inexpensive drugs. We do have compounded versions, and I know each of the companies is trying to introduce or promote its own direct-to-patient services. That is lowering the cost, but I think that's where the excitement and promise of the oral versions of the drugs will come in.

They are small molecules, so they should be much cheaper to manufacture. You would argue that should provide the companies introducing orals—and obviously Lilly is in the lead right now with orforglipron—with the ability to price these GLP-1s, at least the oral versions, more attractively and really drive much broader uptake, particularly here in the U.S.

I think that gives some reason for excitement in the oral GLP-1 space. Sam did highlight the fact that perhaps the efficacy isn't as great as it is with the injectables.

Interestingly, the side effects do appear worse. I think some of the biological reasons that might be happening are still under some debate, but it's really going to be a much lower cost that's going to drive uptake. I think this perspective is really important as we think about the potential future of the orals.

A lot of obesity is probably treated at the front line by your GPs or PCPs, and PCPs like writing prescriptions for things that patients can just pick up at their local pharmacy, whether it be a CVS or Walgreens or whatever the case may be here in the US. They typically don't write for a lot of injections, and typically they will refer these patients to endocrinologists, who are much more comfortable with injections. So, yes, there are debates around the efficacy and safety and tolerability of the orals, but I do think there is a growing consensus view that whenever the orals do come out, they, from a pure dollar perspective, are likely to generate more dollars than the injectables, just because of the broader uptake that you could see in a broader patient population because of the lower cost.

Where there is an opportunity to differentiate is going to be very interesting. Again, we've got Phase 2 data for Terns' oral GLP-1 coming next month. We've got some initial data from Corbus and its CB1 later this year, but really we probably won't get a real read on efficacy until next year.

Again, we won't go into details as to the issues around, or legacy issues with, the CB1s. But I do think that there are reasons to believe that doctors are looking for other things, particularly on the muscle-sparing side. So, I do think that there is room for other medicines. It's not just a race.

Awesome. Great overview, John. Anything else?

I would just maybe push back a little bit on Greg's views on the pricing side of it. First of all, I do think the verdict is still out on the orals vis-à-vis tolerability and the degree of efficacy, and I think that's going to be challenging when you think about going to an expanded population with the orals.

But I also wonder how—and would find it challenging if I were in Dave Ricks's shoes, or the CEO of Novo Nordisk, whose name I forget—how likely they would be to think dramatically differently on pricing with an oral in a market that is such a huge, growing segment for their business. So, I think it's a little bit more complicated than Greg painted it to be. But let's see how it all plays out.

Just a quick thing, for the avoidance of doubt: the $100 billion wasn't just Lilly and Wegovy. There are a whole bunch of drugs that we've modeled in there—CagriSema, retatrutide, survodutide, other GLP-1s and orals.

And just one last point on the oral pricing thing, John: the only thing is that they are not the only game in town in terms of orals. Maybe some of the new ones coming along would play the pricing game, but I don't remember that being the way that new drugs come to market or folks using pricing.

Not last time I remembered. Yeah.

Well, very good. A lot to follow here. Let's see what we've got next on the docket. John, we wanted to hear from you on your new company, Corsera, with Clive. So, take it away.

Yeah. No, just a quick comment on it, real briefly. I don't want to toot my own horn on this call, but first of all, Clive and I have worked together for 30 years now. The original deal that I did with him back in 1997 was for Angiomax, which I invented and then licensed to Clive. He built a medicines company largely on the foundation of Angiomax.

Then, in 2013, we did a deal when I was at Alnylam with Clive on what became Leqvio. He sold The Medicines Company for about $10 billion to Novartis, and we actually turned around and monetized half the royalties for a couple billion dollars. So, we've had a strong track record of getting stuff done.

This is our third act together, which is always the best act, as I'm told by my theater friends. We're excited about it. It's focused on cardiovascular prevention, and it's really based on the increasing recognition that ASCVD—atherosclerotic cardiovascular disease—is really a problem of cumulative exposure, not exposure at one point in time.

It's not that somebody has elevated blood pressure on a given day or elevated LDL, but the fact that their lifelong exposure to elevated levels of LDL and blood pressure, along with other factors, really drives atherosclerosis and the development of plaque. By lowering LDL and blood pressure much earlier in life, you can have a profound impact on improving cardiovascular health span.

Essentially, it's taking cardiovascular disease off of your tombstone if you start early enough, especially for those people who are at higher risk. So, it's super cool and super important. It could be, frankly, the most important thing I've ever gotten involved with from a public health perspective.

The basic approach is to use a tool that we're building using AI and large data sets like UK Biobank, working together with Brian Ference, who is an expert cardiologist but also an expert in causal AI, to predict people who are at elevated risk. We call that Clotho Health, which is a nod to the Greek fate that determines people's lifespan.

We'll combine that predictive tool with an annual shot that targets both PCSK9 and angiotensinogen for LDL and blood-pressure lowering, respectively. Of course, we think about how this gets to market from a commercial perspective and think a lot about the emerging channels that we were all talking about earlier, including consumer-based channels, but maybe conventional channels as well.

The pricing would be consistent with a prevention-type approach, not a treatment-type approach. Look at pricing in the flu vaccine space, for example, as an example of how you would imagine this. But it's super cool. The first program will start in the clinic in a month, so we're already pretty advanced. We've been doing this stealthily for the last 2 years.

John, how do you think about this versus a gene-editing type approach, which has some of the same public health ambitions?

Yeah. Look, I think gene editing is going to take a while, in my opinion, to get to the prevalent population that we're talking about. We're really targeting people who are in their 40s and 50s and are otherwise healthy. They wouldn't yet be at guideline-recommended levels to start treating with a statin or an antihypertensive drug, but they can be predicted to be at risk of future ASCVD and future heart attack.

There's just no way I'd think that somebody with that phenotype would consider a gene-editing approach, at least not for a while, which requires intravenous infusion and a high cost of treatment and so forth. I just don't see that as being competitive.

I'm very excited about where gene editing can go in more morbid populations, maybe in the treatment of people with heterozygous FH, which is obviously itself a very important opportunity. But we want to go upstream with a treatment—a therapy that can cost hundreds of dollars per annual dose, not what they would have to charge at the end of the day.

No, I mean, look, I think a really good analogy to what you're saying is to look at the time from when RNAi led to a Nobel Prize versus the time when inclisiran was approved, right? It takes time to figure this kind of stuff out. So—

It sure does. Paul, John, can you just double-click on this pricing ambition? It's very rare that companies at this stage of their development talk about their ambitions with regard to pricing, and you're not talking about anywhere near even what I suppose an oral PCSK9 would be or whatever.

Yeah.

But does this need a companion diagnostic that is coming out of the Biobank study?

Well, we're certainly not looking to make it a companion diagnostic, and we want to think about how we introduce this AI tool commercially.

You know, probably in advance of phase 1.

In advance of—oh, I'm hearing some background. Anyway, it would be in advance of the drug getting to market, but we definitely want to stay away from making it a companion diagnostic.

On the pricing side, Sam, the bottom line is we want to develop this as a primordial prevention medicine. It's hard not to talk about pricing when you're talking about a concept that would be used in otherwise well people. So, it is vaccine-like. I know the vaccine word is a bad word these days. I don't think it is, but it is vaccine-like in terms of how you think about it from a public health perspective, which is very, very different from a therapeutic.

Very good. I think I'm going to shuffle things around a bit because I want to make sure we do have time to cover some of the more topical news. Speaking of the word vaccine, just as it relates to Trump's Truth Social post and RFK in front of Congress, maybe we can have a 5-minute discussion on that before—before maybe, Sam, you can preview World Lung, and Greg and I can talk about some neuro events coming in September.

But do you want to just introduce this topic for us?

Yeah. I actually got a heads-up on it from Matt Herper, who called me because he was writing a story on Trump’s Truth Social. I don’t follow Trump on Truth Social, thankfully, but it was an interesting post because he commented on the amazing data he was seeing from Pfizer and others, and called it extraordinary.

You really get the sense that there’s some anxiety in the MAGA world, I guess, and the MAHA world as well, on this topic, and on the CDC being “ripped apart,” as he calls it. He also talks about Operation Warp Speed, which is absolutely—I’ll give him all the credit in the world for Operation Warp Speed and what it did to bring COVID vaccines to the market. I applaud him in a very, very strong manner for what happened there.

But you really get the sense from this Truth Social post that all of this is coming to a head in a big way. Then, of course, we had Kennedy’s testimony in the Senate Health Committee just yesterday, and you certainly get the sense of increasing anger toward what’s going on at the CDC and with vaccines in general.

Who knows where it goes? We’ll have to see, but I think a lot of this is coming to a head for good reasons. I think a lot of the public is very concerned about access to vaccines. I can’t get my COVID vaccine yet in Massachusetts, and I think that’s ridiculous. People are seriously concerned.

Yep. We’ve talked about this on a number of episodes, right, and how this flows through to behavior, too. My recent experience of having another child and seeing the way the vaccine decisions were framed early on was so different to me from what we had experienced the first time around.

Sam, you wanted to comment just a little bit on vaccine development paths. I think there was some news around things that the FDA has been communicating to certain companies, and we’re all wondering if that’s going to be extrapolated more broadly. Do you want to chime in here?

Sure. Just on the previous point, though, Paul, what’s strange here is that these ACIP meetings, which I think have been significantly changed by the shifts that RFK, or Secretary Kennedy, has made in the makeup of the ACIP, always had plenty of data showing how good these COVID vaccines have been, even 3 years after Operation Warp Speed. The president only needs to look at his secretary’s own ACIP meetings to find that data, economic analysis, and everything.

I don’t know exactly what was there, but I’d be interested to see if this changes back at the FDA. I just literally heard Marty Makary talk about how children have died due to the vaccine on CNN. It’s this clip that he posted himself on X.

What’s interesting is that there’s this constant to-and-fro between what the administration wants, what the people want, what the companies need to do, and what the CDC and others are asking for. Then the FDA, through Vinay Prasad, has put out requests for postmarketing trials and tests, and placebo-controlled trials, which the companies are having to do to prove that their vaccines are still effective on a placebo-controlled basis in the booster setting, and to prove that there’s no circulating spike protein after mRNA vaccination.

I don’t see why circulating spike protein is going to tell us anything at all, but we’ll find out. This, of course, makes it difficult because revenue is going down for these companies due to the pressure on vaccines, while costs are going to go up because they have to keep doing these trials. I don’t know how many times this has to happen every year, but it’s all in the letters that came out for all 3 vaccine makers: Novavax, Moderna, and BioNTech.

Then, of course, what does this mean for other vaccines? We do have ACIP coming up next, on the 18th. In the meantime, we’re going to have this report come out on what’s causing autism. I’ll give you a choice as to what you think is going to be in that research. I’d be shocked if vaccines are not mentioned.

Yeah. Whatever you think, I don’t think it’s going to take a big, bold guess to guess what the conclusion of some of this stuff is. Fun times, I guess.

Sam, do you want to talk about World Lung? Then Eric and I are going to talk about how, this fall, we have a bunch of readouts coming up in the neurology space.

I’ll make sure you’ve got plenty of time for that. There are 2 key data sets that we’re looking at, of course, in the world of biotech, and I think maybe even investors in Merck are highly focused on what’s going to happen with ivonescimab in the HARMONi trial that’s reading out. The headline of the abstract is “Ivonescimab versus placebo plus chemotherapy, phase 3, in patients with EGFR-mutated non-small-cell lung cancer that have progressed,” essentially.

What are we looking for here? Obviously, we’re looking for overall survival, with a confidence interval that doesn’t cross 1, and hopefully a hazard ratio in the 0.75 to 0.8 region. The more critical element here is the split between China and ex-China data. This trial that Summit conducted had, at the last count, about 38% of patients who were ex-China.

The critical thing here is for us to continue to see similarity between those data sets. Obviously, this would be a subgroup analysis, so it’s not really meaningful aside from making us feel comfortable that you can take China data and translate it directly to the United States. It’s in a plenary presidential session, so all the hopes are that it’s going to be looking good. Let’s wait and see. It’s Sunday morning.

From a commercial perspective, it’s not particularly relevant—or maybe for Summit and Akeso, it’s relevant—but there are other competitors out there. Johnson & Johnson is in this post-progression setting, you’ve got TROP2 ADCs coming along, and there are other bispecifics.

The other thing is AstraZeneca’s overall-survival readout for its FLAURA 2 trial, which is first-line Tagrisso plus chemotherapy. That’s important for Astra because it’s being pressured perhaps a little bit by Johnson & Johnson’s Rybrevant plus Lazcluze, which is also Rybrevant subcutaneous in the first-line setting. Our hope is that—I think the company said—a statistically and clinically meaningful improvement will be seen. We’re looking for a meaningful, chunky hazard ratio here.

That’s also in the same presidential session, and there are a whole bunch of biotech readouts there. Nuvalent is one of them. Its share price is up 18% today. Nuvalent data, et cetera. I’m looking forward to all of that.

Okay, excellent. Thank you, Sam. Eric and I both cover a good deal of stuff in the neurology space, and neuro is close to my heart since I was a lab tech right out of college in a sleep lab in Boston. I’ve been covering this space for a long time.

Eric has some readouts, too. I think maybe I’ll kick it off, Eric, and we can just take turns. One thing that we’re focused on is how big of a 6- to 9-month period it may be for Alzheimer’s. The anti-amyloid antibody launches from Biogen/Eisai and Lilly have been a big disappointment, and there are a lot of reasons for that.

I think one readout that investors are looking toward, where there’s a debate about whether it could really boost this class, is Lilly’s prevention study. For context, both Biogen/Eisai and Lilly are running trials for lecanemab and donanemab in patients who are essentially presymptomatic. The premise is that if you treat earlier, you can have a bigger clinical effect.

For Lilly, we don’t know when we’re going to get the readout, but there is potentially an interim analysis at some point. It could theoretically come at any time. From our perspective, we think these studies are fairly likely to work.

If you look at the history of beta-amyloid antibody drug development, we had some early setbacks, but once we found the right patients—patients who were earlier-stage and biomarker-positive—and once companies were comfortable pushing the dose of these antibodies high enough that they could dose through ARIA, we were able to see significant efficacy. I know the efficacy is debated, but it feels likely that going even earlier will be beneficial.

The overarching question here is still whether this model is commercially viable. It’s already hard, from a capacity perspective, to treat patients who have the disease. There are already questions around the risk-benefit profile with ARIA, and I think those questions, even if the rates are lower, could still be salient with earlier-stage patients.

The other question is simply how you find people who are presymptomatic. If you look at what Lilly has disclosed around its trial and the screen rates, or screen-failure rates, it’s screening out almost 90% of patients. I still think we might be in a situation where these data could be good, but the tangible impact may take time to come to fruition. That is something that’s very interesting.

And then the other 2 this year that I think are high-profile, and I will be more brief, are Bristol Myers Squibb's Alzheimer's psychosis readout for KarXT. I covered Karuna, and we've been pretty optimistic that the drug should work. The whole question is whether you can get to a tolerable dose in a population that may be more sensitive to side effects.

And then Novo's GLP-1 readout, which I'm sure Sam is closer to than me. From my perspective, from a neuro perspective, we're somewhat more cautious here. I feel like there's a lot of data out there showing GLP-1s may impact the probability of getting dementia. I don't know how that translates to patients who already have Alzheimer's, and I don't know whether you can decouple some of the data so far from just the broader impact that GLP-1s have on other conditions in these studies, like diabetes and things like that.

Maybe that's one that's a little bit higher risk, but certainly a big deal. If that actually did work, it could mean more problems for the anti-amyloid antibodies. So, Eric, I know you're watching some other stuff in Alzheimer's too, so maybe I'll turn it over to you.

Yeah, thanks so much, Paul. I also love the neuro space. I have a PhD in neuroscience. I had an opportunity to do BD and strategy at Biogen and AbbVie on their neuro efforts, and I do spend a lot of my time—not so much looking from an Alzheimer's perspective at the DMT side of things, but I do end up spending a lot of my time looking at symptomatics for Alzheimer's disease.

I think it's always been interesting to hear about the potential of symptomatics. It seems like the industry and investor focus has always been on the DMTs, and yes, that is probably the biggest unmet medical need. But just because we've now got a couple of DMTs, it does not mean that these patients still won't have symptoms like psychosis and agitation.

On the agitation side of things, I covered 2 companies in particular. I want to talk about Axsome Therapeutics first. Axsome is a New York City-based commercial-stage company. They've already got 3 drugs on the market: 1 for depression, 1 for treating excessive daytime sleepiness, and 1 for migraine.

The real investor excitement around Axsome is around the ability to take their antidepressant—that drug is called Auvelity—and expand the label to treat agitation episodes for those who have Alzheimer's disease. Agitation is a really big problem in Alzheimer's patients. It's the number 1 reason why family members move their parents or loved ones who have Alzheimer's out of the home setting into some sort of supervised setting.

Until about 2 years ago, we had no approved therapies for treating agitation specifically. We now have 1 drug. It is an atypical antipsychotic from Teva and Otsuka, and that's Rexulti. But, as some of you may know, atypical antipsychotics all have a black-box warning around increased risk of mortality in the elderly with dementia. We've got this paradox where we have 1 approved drug to treat agitation, but there's a black-box warning that is almost contraindicating its use in Alzheimer's patients.

The excitement here for Axsome is that they have run 4 late-stage studies for their antidepressant, which has been on the market for about 2.5 years. They have positive datasets from 3 of those 4 late-stage studies, and they are about to file—or the guidance is that they're going to file—an sNDA for its potential use in Alzheimer's disease patients who experience agitation. We do think that's going to be a catalyst for the stock because there is some debate around the strength of the data.

But I do think, on balance, there's enough data. I think this is a division that's interested in getting more therapies for patients with Alzheimer's disease. We know that this neuro division has exercised a certain regulatory flexibility when reviewing drugs, particularly for neurodegenerative diseases. With that said, we could have another drug on the market for Alzheimer's disease agitation sometime next year.

I think acceptance of the sNDA will be an important catalyst for Axsome stock. But that's also going to be something that, for patients and families and caregivers, over the next year hopefully will give us some newer symptomatics.

And then the last thing that I'll mention, since we're talking about readouts, is that I also cover a company called Neumora Therapeutics. They are based in the Boston area, and they do have a program for Alzheimer's disease agitation. It's a very interesting mechanism of action. It works very differently, on vasopressin receptors, and so it's quite novel and unique in that way. But we've got a proof-of-concept, proof-of-signal readout that's expected by the end of this year.

With that said, I think there's again a lot of unmet medical need in Alzheimer's disease. We're going to get readouts, as Paul mentioned, on the DMT side, but also on the symptomatic side.

Yeah, thanks, Eric. I know we're out of time, but some of the other ones we wanted to mention were Rapport's upcoming data in epilepsy. I know Daphne had a point there around this being a biomarker study and how much investors ascribe value to biomarkers. What's interesting about this readout is that it was originally framed purely as a biomarker readout, but as we've learned more about the population—and this is in refractory epilepsy—the Street has become much more focused, I think, on the actual clinical seizure data there, given that they've shown the baseline frequency is relatively high. That's a drug we think has a good chance at success.

Lastly, uniQure's Huntington's data is coming out this month as well. They just had data from another program today, but that's a big one for the gene therapy space. If it is positive and they file it, it will be another big one to help us figure out where we're at with CBER as it relates to flexibility, and whether or not a lot of the things they've been saying lately that sound a lot like the Peter Marks doctrine will become true. So, 2 other ones to watch.