第176期——2026年3月13日

You're listening to Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry. And of course, I say all, and I don't think we ever manage to get there. But we're a group of biotech leaders, experts. I'm Sam Fazeli, and my co-hosts today are Josh Schimmer, Paul Matteis, and Graig Suvannavejh. For more information about our hosts and guest speakers, or to listen to the most recent episodes, as I often do when I miss them, please go to biotechhangout.com.

Now, we’ve had a pretty interesting week. We were trying to figure out the main conversation pieces that we wanted to look through. I’m going to start off by getting everyone to talk through the key thing that happened from a regulatory basis this week. But I’m going to come back to that for a minute.

I do recall listening to last week’s call, which I felt like was a really nice, bullish, warm, fuzzy feeling for the biotech sector. I don’t think any of you guys were there. I think it was just Yaron, Eric, and Michael, of course. I don’t want to take away from that.

By definition, to be a biotech analyst, I think you need to have a large dose of overexpression of optimism genes in your body, because otherwise you wouldn’t be able to cope. However, I just want to bring one thing to the discussion point, and maybe the others can talk about it. If you recall when we were talking about the bad days of biotech—the 3 or 4 years before the big turn in August—we kept blaming one of the things we kept blaming: high interest rates, which, of course, kept people away from the high-risk space. That was one of the issues.

Now we’ve got a situation where, unfortunately, there’s a war raging in more than 1 area of the world. The particular one that I’m referring to is the Iran-Israel-United States war in the Middle East, which has led to a very sharp rise in oil prices, which doesn’t seem to want to go down. I think we’re hovering around $100 again. This leads to inflation through many mechanisms. In this particular case, because it’s the area that has been impacted, where a large amount of urea fertilizer production and liquefied natural gas come from, it’s likely to feed through to fertilizers, to food production issues and costs, and therefore all of them go up. Of course, this leads to higher interest rates as a result of inflation.

So I’m beginning to worry a little bit that if this carries on longer and sticks a bit, then, as well as the uncertainty that war brings, we might get some conversation coming back again saying, “Well, look, interest rates are high or going back up again. We’re going to take a break on the sector.”

I want to throw this back to the team. Are you at all worried—not about the war directly itself, obviously, but about this rate-rise issue? If there is a worry, what do you think is going to give first—IPOs? I don’t even know if there’s anyone actively marketing an IPO right now because of the war, et cetera. I’m going to throw it back to the team to see what your reflections are, or maybe you hate me for being a little bit negative here in such a great time for the sector. Anyone can pick it up.

Well, Sam, I don’t know. I’ll try. I’m the opposite of an expert on the macro piece. I think this was a good week for the sector in the sense that we saw data readouts get really rewarded and end up in big fundraising. There was also, outside of mid-cap, a large-cap data readout for Vertex that was really rewarded, even though the data weren’t even the bull case.

I guess on the rate side, I’d be curious: Is that what Bloomberg is forecasting? My sort of thought—and this might be super ignorant—was that if the war in the Middle East drags on and we actually start getting some recessionary indicators, maybe that actually attenuates the risk of a rate increase. If anything, maybe there’s pressure to go in the opposite direction.

By no means am I saying that the sector is immune from some of this stuff. I think the biggest real issue for biotech is just that it’s super high-beta and it’s a risk-off sector. But it does feel like maybe it’s more uncorrelated, and I’m having a harder time seeing the rate risk unless I’m missing something. How are you guys thinking about it?

Josh? Graig?

Yeah, I think—I’m not a macroeconomist. I’d personally be a little surprised if high oil prices drove so much inflation that culminated in a rate hike, as opposed to just stabilization of rates.

The good thing about biotech is that, fundamentally, it’s insulated from all of this. It’s insulated from oil prices. It’s insulated from what’s going on in the AI and software world. So it still becomes a somewhat defensive sector.

By the way, biotech isn’t what it used to be. Biotech is no longer the casino-type speculative sector, with all the value really coming from products that aren’t going to be on the market until 10 years from now. It’s a much more mature sector. I personally suspect it’ll be proved to be much more insulated against all of this than folks might believe, because it’s a sector that’s becoming cash-flow-positive in a way that we’ve never seen before. It’s just less speculative, more mature, and more GARP-y.

Graig, last word?

Yeah, sure. What I’ll add is that I would agree with what was said. I do think it’s a very different sector, and importantly, I think that at the biotech company level, provided funding is available for them, they’re still innovating. There’s still an opportunity for investors to make money and for companies to raise capital on good data.

So, yes, while in the near term we’ve got market volatility, there’s always market volatility. Obviously, we can’t predict what’s going to happen geopolitically, particularly as it relates to what’s happening in the Middle East and, heaven forbid, things spread somewhere else.

But I do think that even with oil and gas prices rising, biotech, as Josh mentioned, is fairly insulated. You could argue that stocks always go down as they go up. I like what we’re seeing in biotech. I don’t know how the IPO pipeline is going to get impacted, but on balance, I do think it’s going to be a pretty good year for biotech. Again, we don’t know what the future is going to have in store for us on a macro stage, but I think it’s still going to be a pretty good year for biotech.

Well, that’s great to hear because, at the end of the day, as Paul said, is that what Bloomberg is forecasting? It’s so difficult to forecast at the minute. You can build so many different scenarios based on the duration of this conflict. Even if the U.S. or Israel or somebody declares victory and the immediate hostilities against each other stop, what does that then result in? Does the Strait of Hormuz open or not? Is it a risky place? It’s very difficult to tell.

But I’m really happy to hear that you’re all still seeing positive momentum in the sector, especially as Paul highlighted with the deals this week. Of course, one other thing that I’ve always thought was a hindrance for the sector, but is a positive, is the news that Vinay Prasad is departing from the FDA in April.

We’ve had several discussions and conversations about whether Vinay Prasad is a good thing or a bad thing, or whether having 1 person at the FDA is a good thing or a bad thing for the sector. Once this news came out, I don’t particularly recall a major bounce in the sector, because I think the first time Dr. Prasad left, there was a bounce in stocks. I’m just wondering whether everyone has gotten used to the ups and downs at the FDA and is just getting on with it.

Did you guys have a particular feel for whether this is going to be a positive? Do we have a clue as to who’s going to be taking over, and whether that person is going to be positive or negative for the sector? I just wanted to touch on that before we move on.

No clue who’s taking over. I think the angle that I would maybe point people to is: let’s see how some of the next events play out in the rare-disease FDA flexibility arena.

We’ve got a PDUFA for DNL310 in Hunter syndrome on April 5. That’s for a blood-brain barrier enzyme product that has outstanding data, but open-label data on biomarkers. We always thought that was one of the better datasets across the rare-disease flexibility realm, but it’s still the next test of FDA flexibility.

We won’t know what would have happened if Vinay was still at the FDA, but I think that’s important. The other question, too, is what happens with uniQure? Does this lead them to have some sort of dialogue and a path to refiling? I think we’re going to learn over the next year.

Sorry, not a next year—excuse me—the next 3 to 4 months, right? Is there a new equilibrium before we get someone at CBER? Josh, I think I saw maybe a Bloomberg headline about something you wrote arguing for someone at the FDA who was perhaps more intermediate versus Peter Marks or Vinay. Am I putting words in your mouth? I thought that was an interesting comment.

I got to it first and had flagged that, and I agree with the view that many of us felt Peter Marks, who really did have patients’ best interests at heart, might have been a little too lenient in terms of the requirements for drug approvals going through CBER. I think many feel that Vinay Prasad was too stringent. I think that’s actually a debatable point and a very interesting debatable point.

We had our own recent debate about whether Vinay Prasad was a good regulator versus a good leader. He seemed to fail as a leader at the agency, and morale had really deteriorated, at least based on many of the reports, including the great work from the STAT News group. Perhaps that, more than anything, might have cost him his role there.

But the regulatory decisions and the bar that he was setting for approvals were defensible. It was always going to be controversial, right? Peter Marks was controversial in his way by being lenient, and Vinay was controversial in his way by being stringent, but there was a case to be made for his views.

So, as a regulator—and, by the way, he was incredibly astute and sharp. He sees through all of the games that get played by companies. From that regard, he was a very competent regulator, but not necessarily the most appropriate leader for the organization.

There’s a lot of debate to have. It’s all in the past now. The question is, who’s going to come in and fill that role? What are the implications going to be for where that bar gets set? Are drugs that Vinay Prasad had felt were below that line now going to be viewed as above the line? I don’t think we have any good sense right now as to what those answers are until we find out who’s going to be heading up CBER.

I’ll keep my comments relatively short. I don’t have insight as to who might be coming next, and sometimes it’s better to have the devil you know versus the devil you don’t know. But I’m hopeful and optimistic that we have someone who perhaps brings some stability to the FDA, where industry and investors feel that there is more predictability and reliability. But that’s TBD, and we’ll just see how the next few months play out, as Paul mentioned.

Well, I always thought—maybe I was being very naive here—that the 2 individuals you spoke to, Peter Marks and Vinay Prasad, did not underscore this thought that I had: that the FDA employed experts, reviewers, scientists, and clinicians to review data sets and the safety and efficacy of products that came along, and take them to a committee of experts, often, though not always, through AdComs. The director was there to make sure that they were doing their job correctly, not to intervene and say, “All that work you’ve done, I disagree with it,” in a positive or negative way.

Maybe I was being naive, but that’s what I thought the regulator was supposed to be. Otherwise, what is the point of having all those people in place doing all that review work? That’s the bit that really got me a little bit about perhaps both, right, Josh? I remember all the discussions we had about the approval of the DMD drug.

Look, it’s happened now, and we’ll find out. As Paul said, we have a few events coming up to see whether the FDA is genuinely putting its money where its mouth is with regard to all the positive commentary about rare diseases and getting drugs for rare diseases. Let’s see how this comes out. Of course, N equals 1. It’s a data set that’s going to be reviewed, and maybe there’s something else they found in the findings there. But we’ll keep our fingers crossed.

Any other comments on that before I move on to the next FDA discussion point? I’m not sure what this means for us, but any other comments? Mm. Okay.

This is one that Graig brought up as a possible discussion. I don’t know what it means in terms of how we do our job: the FDA merging the adverse-event trackers into 1 database, so that the VAERS one is coming into the FAERS one. Does this make any difference, or is it just a formality that they’re going through? Do any of you guys have any insight into that? Graig?

I’ll maybe just recap the news first, and we can opine on it. Earlier this week, the FDA announced that it was launching a new adverse-event reporting system. It’s technically called the FDA Adverse Event Monitoring System, so the acronym is AEMS.

What’s notable here is that they’re basically combining 3 databases. Many of us in the investment world have been particularly keen to look at the FAERS safety database, which contains reports for drugs and biologics. But there’s also a VAERS database, which is really more related to vaccines, and then there’s another database that relates to animal drugs and animal foods.

These 3 are legacy systems that are being combined and will now be under this new AEMS system. In its official press release, the FDA mentioned that the 3 different platforms cost about $37 million a year to operate. Given expected efficiencies, the FDA expects to save about $120 million over the next 5 years.

I can see that, from an efficiency perspective, it makes sense. I’m not quite sure necessarily how it impacts the industry. I think the view is that it will actually make finding information much more seamless, and perhaps this is a positive development, whereas many times we think that news from the FDA is creating headaches. I think this is actually a good thing.

Great. Thanks for that, Graig. The other topic that you want to talk about is—I don’t know how people measure an anniversary. Births are quite easy because you come into the world. How did we find that it is the 50th anniversary of the biotech industry? Do you want to talk to us about that?

I think this is on the back of a piece by John Crowley, who features in our discussions sometimes on the Biotech Hangout, in STAT. I’m curious to hear about it. I haven’t read it, to be honest with you. What did he think of the sector, and what it would look like in the next 50 years? That’s one hell of a crystal ball.

This was an opinion piece that John Crowley, who heads BIO, the trade organization, authored. He did align on those 50 years, Sam, just so you know. He correlated the 50 years with the year in which Genentech was founded, so that was his definition of why we’re at the 50-year mark.

I thought he very nicely articulated all of the accomplishments that have been achieved by the biotech industry. He threw out statistics in terms of what percentage of drugs have been approved here in the U.S. I think he says that, between 2012 and 2021—obviously, there might be a little cherry-picking there—a large percentage of drugs came particularly from U.S. biotech.

He also talks about all the jobs that have been created. He talks about $3.2 trillion in economic activity that’s been generated from the U.S. biotech industry. But I think where he’s going with this is really talking about what the future has in store.

He doesn’t really make predictions per se, but where he goes with this opinion piece is really about pricing and the idea that, as we’re now in an era where the current administration would like prices in the U.S. to more closely mirror prices seen outside the U.S., what John Crowley tries to highlight is that this is not necessarily a good thing, and that we need to continue to protect U.S. biotech and U.S. pharmaceutical pricing.

I don’t think he necessarily defends high pricing, but he talks about the role of PBMs, the middlemen, so to speak, and the rebates there. This is really not about prognosticating what we’re going to see in the next 50 years, but about identifying some of the challenges that we’re facing here in the U.S.

Pricing does have an impact on the viability of the industry because if we can’t find ways to recoup the investment, then that does create some challenges for the industry. That was basically the piece. I don’t know if anyone else has a view around making predictions about the next 50 years. That could be interesting, but I just wanted to highlight the pricing. He didn’t really go into foreign competition.

I know everyone is maybe worried, so to speak, about the potential role of, for example, Chinese biotech, but this article did not specifically go there.

Yeah. That’s an interesting segue, actually, Graig, and I’m pretty sure you meant it, because I’ve just come back from China—4 days there, meeting many companies and attending a couple of events, with discussions, et cetera. I’ve been going to China for over 20 years now, visiting companies. When I first went in 2005, I think it was, there were probably 1 or 2 or 3 companies that you could label as new-drug-development companies.

One of them we developed a relationship with when I was at Piper Jaffray in those days, called HUTCHMED, which of course is well known now. It’s probably one of the 2 companies you could call multinational corporations, by the fact that they’ve got assets and drugs they’re directly selling themselves in different regions, the other one, of course, being BeiGene. Over these 20 years, I’ve been watching the sector evolve, and in the past 5 to 10 years, it’s completely taken off. There are many correlates as to why that happened, and a large part of it is that the management had been trained by either multinational corporations in the West or biotechs, going back to run companies within China.

The point about pricing, however, is an interesting one. It’s something I’m itching to do with my colleagues at Bloomberg, if I have a bit of time to sit down and talk through it: We need to consider how AI plays into this. If, as many industries expect, there’s increased productivity, that productivity should automatically walk through to the bottom line. If that’s the case, then maybe companies can start not increasing the prices of drugs. In fact, some of the new drugs that come to market may be lower-priced.

Of course, that really upsets the cart when it comes to what happens with the old drugs that are already on the market at a higher price for the same indication. But it’s something that I think is worth thinking about. I’ve just put out a podcast with Marc Tessier-Lavigne, I’m sure you all know him, who’s now CEO of Xaira, and we talked about what he believes could happen to the time it takes to develop a drug. If you could bring down the time it takes to develop a drug, which equals cost, then maybe there is an opportunity to reduce prices and keep your profitability high.

That’s something that’s interesting to talk about as time goes on. If nobody wants to make any further comments on this, we can move on to a couple of deals we’ve had this week. Paul, Josh, am I good to go to deals?

We haven’t had a couple of deals; we’ve had 1 deal, and another one that was a regular rumor that seems to come up. I don’t know—I haven’t quite measured its cadence—but it’s not the first time. The deal was Servier, a private French pharma company. This is perhaps not on too many people’s radar, but the company has annual revenue of around €7 billion. So multiply that by something in the region of 1.1–1.3, and you get to about $8–$8.5 billion.

They say—it all depends how you measure things—that they’re the 35th-largest pharma company. Anyway, they bought Day One. I don’t think any of you guys covered Day One. I did have a look. Is that right? No.

What they’ve bought is an oncology business that fits very nicely with Servier’s oncology business. It’s a rare-disease business centered on OJEMDA, which is tovorafenib, a drug in a class that’s already relatively well known. It’s the first FDA-approved drug for relapsed/refractory patients who have BRAF fusions or rearrangements, V600 mutations, et cetera. So that’s approved, and it’s growing.

I think the last number that they reported was $155 million for 2025. Guidance is between $225 million and $250 million. So it’s a good deal to see. What’s interesting is that the drug outside the U.S. is licensed to another French company called Ipsen. So, of course, Servier appears to have perhaps bigger firepower, or, for whatever reason, Ipsen didn’t feel like it wanted the broader indication. It’s another M&A deal, but it’s not the multibillion-dollar one we’re all looking for.

A couple of days ago, Bloomberg interviewed Eric Tokat about M&A in the sector, and he was saying there’s lots of M&A coming; $20 billion-plus is still expected. We’re all keeping our fingers crossed, because that is a good positive thing in our sector when the cash comes back into play. Did any of you want to comment on the Day One acquisition?

Yeah.

I’d just point out that it was Servier that acquired the Agios Oncology assets about half a decade ago or so, which included Voranigo, I guess, for another brain tumor. So there are probably some synergies they saw with the Day One acquisition. The launch of Voranigo has actually gone quite well, according to at least some of the reports. But Servier doesn’t break out its individual product sales.

No, the IDH world has become a lot more exciting as well in the glioma space. I think that makes a very nice package, as you rightly say, Josh.

And, of course, the other one was the rumor this time. Abivax is a French company that has had some exciting data in ulcerative colitis, I think, back in August, when the share price went absolutely ballistic. There have been several rumors, all reported by the same journal, I think—a journal in France called La Lettre. This time, apparently, they had given AstraZeneca a period of exclusive access to the data, after which they would seek other buyers or continue talking to other potential buyers. It turned out the company itself turned around and said, “That’s not true.” I don’t really know what’s going on here, but this has made the rounds several times. Do any of you think that one day we wake up and actually see a deal for Abivax, or am I pushing it too far from speculating?

Well, I’ll just chime in. I think Abivax plays in the cytokine space, which just seems very tantalizing for an acquirer, given the pipeline and product potential. Whether Abivax actually gets taken out, I don’t know. But for the data they’ve presented and for the profile of the type of company that it is, I wouldn’t put it past anyone that it might be taken out at some point, whether it’s this year or next year. I’m not quite sure when the next clinical data are.

It certainly falls within the sweet spot, I think, for where the larger-cap pharmas, which are facing—I don’t know the numbers—whether $150 billion or $200 billion in potential revenue at risk over the next 5 years, are going to have to solve for that. I think many of us think it’s probably going to be primarily through what we call external sources of revenue or innovation.

Yeah. But Graig, you’ve got the mic, so do you want to talk to us about IDEAYA? They’ve got some data coming up that we like in Bloomberg Intelligence. Talk us through that, please.

Yeah, sure. They’re a really interesting company based in California called IDEAYA Biosciences. It’s a company that I cover. They have a small molecule called darovasertib, which is an oral PKC inhibitor. They’ve got top-line data coming out at the end of this month.

It will be phase 2/3 data, and the efficacy endpoint will be median progression-free survival, or PFS. The drug is in combination with another TKI, crizotinib, and the view is that there’s potential utility in uveal melanoma. We don’t have too many drugs for uveal melanoma. Many people know about skin or cutaneous melanoma, and I would say there are certainly a lot of drugs already for skin or cutaneous melanoma, with many more in the pipeline.

Here, there’s only 1 approved drug right now, KIMMTRAK, which was the very first TCR-based therapeutic ever approved. It’s a drug by Immunocore, another company that we cover. KIMMTRAK has done very well as a drug. It’s probably in its 5th year on the market, and it’s annualizing at about $400 million.

Interestingly, patients who are on KIMMTRAK may not have very high response rates. Median PFS may not be great, but at the same time there is a proven overall survival benefit, and patients are staying on the drug even though their tumors may be progressing. It’s been a very nice drug.

The limitation of KIMMTRAK is that, for the type of therapy it is—the TCR-based therapeutics—they’re restricted by HLA status.

And so this is not a drug that would be amenable to all patients with uveal melanoma, and therein lies a potential opportunity for other companies. So here we have IDEAYA with its darovasertib. They've got data coming. Phase 1/2 data showed a 7-month benefit. We're talking about patients with existing other standards of care, again, in a non-HLA-restricted setting, only getting 2 to 3 months.

Checkpoint inhibitors don't work here, although they do work well in skin melanoma. And so anything above 2 to 3 months obviously would be tremendous for patients. As I mentioned, we did see 7 months before, in an earlier study, and these data are coming at the end of this month. I think what we're looking for is anything better than perhaps 5.5 months, with 7 months seen in a prior clinical trial.

So, it's anticipated that these data will come at the end of the month, and this is a big event for IDEAYA, which has a very broad and diverse pipeline. They're really focused, more broadly, on synthetic lethality, so very novel mechanisms of action. They're well-funded, but this is the first real big—I would call it chunky—late-stage data event for the company. We actually did a call for clients earlier this morning, and a KOL that we spoke with predicted that perhaps there could be as high as an 80% probability of success. We're at, I think, 65% or so, but this would be a very welcome addition for patients who have uveal melanoma. Patients sometimes need to get their eye removed, and no one wants to lose an eye, literally. So, it's something that we're all looking forward to.

And Graig, is it approvable? Is it a submittable data set on a PFS number?

Yes. I think, obviously, the proof will be in the strength of the data, but the company, IDEAYA, has suggested that if they do see the results that they want to see, there is an accelerated-approval pathway that they would pursue. With that in mind, I think we could see this drug potentially on the market next year if these data were indeed positive.

And then, just lastly, if you had a situation with KIMMTRAK, which was kind of the opposite—the PFS wasn't that great, and then OS turned out to be a lot better, and of course, there's been lots of discussions about that in the past—could you see a situation? Did you ever worry about the reverse situation here? You get a decent PFS, but it doesn't translate to a big OS signal. I'm not suggesting—

Well—

—anything here. I'm just actually asking, given that we've lived through this with KIMMTRAK—

Sure.

Yeah. So, I think we would agree with all of that. We've got pretty deep research in melanoma, so that's a cool one. Now, talking about data, I think we need to—we want to talk about the opposite, the negative data that came out of Roche's trial, persevERA. Graig, did you want to take that? And then I'm going to ask Josh to comment as well.

Yeah, I'll just quickly comment here. Roche reported what I thought were pretty highly anticipated data for an oral selective estrogen receptor degrader, or SERD, called giredestrant. This was a phase 3 study looking in first-line, estrogen receptor-positive, HER2-negative metastatic breast cancer patients. This is one of several trials that Roche is running for giredestrant.

The results, unfortunately, were negative. I do think that this may take a little bit of the luster off giredestrant. That being said, there are read-throughs for several companies. With that said, I cover one company called Sermonix Pharmaceuticals. It's an interesting one where they previously were a CNS company, but then brought in a breast cancer asset just late last year. Their drug is in phase 3, and that's the old SERM for osteoporosis. Many people may remember lasofoxifene, and lasofoxifene is being evaluated in a phase 3 study called the ELAINE III study in a second-line setting.

The view was that we're seeing more patients with a certain type of mutation, and the view was that if the giredestrant results were positive, this might shrink the opportunity for lasofoxifene. It is believed that continued use of aromatase inhibitors will increase the number of patients with a certain mutation, and perhaps giredestrant, if the data were positive, might reduce potential use of aromatase inhibitors. But we don't have to worry about that right now—unfortunate for patients—but it does look like, from a Sermonix Pharmaceuticals perspective, their market is still a good market opportunity.

Their view is it didn't really make a difference anyway, because aromatase inhibitors are so ingrained and very effective, especially when you combine them with other drugs. So, with that said, it's an unfortunate result for patients. Obviously, the breast cancer market is a very large one. I believe the number that's thrown out there is about $55 billion as the size of the breast cancer therapeutics market. With that said, maybe I'll stop here and pass it along to Josh.

Yeah. Josh?

Yeah. I guess I'd just point out that the lidERA study in the adjuvant setting did show a benefit for giredestrant. The oral SERDs have generally struggled in the first-line setting. They do seem to work in the refractory setting in the ESR1-mutant patient population.

But I think the signal here that we're seeing is one that suggests that it becomes more of an either/or with the CDK4/6 inhibitors, because lidERA was not on a CDK4/6 background, and so it beat placebo. Whereas persevERA was on top of, I believe, palbociclib, and it did not show an incremental benefit there.

I think that's the challenge it now sets up: How do you carve out space in earlier-line settings where CDK4/6 inhibitors are not used, because they are used in certain adjuvant settings? Now, there may be some safety advantages to using an oral SERD over a CDK4/6 inhibitor in some of those patients. It'll make for an interesting battle in the adjuvant setting, but obviously not necessarily one in the first line. Kind of an unusual setup.

And I think that's why Roche's share price reacted so much, because everybody, after having seen the adjuvant data in lidERA—including Kay Uzzo [?], whom we spoke to—had come to the conclusion that it's going to work. So that surprised everybody. So, Josh, whilst you've got the mic there—and just Paul, sorry, just to be sure—do you want to make any comments on what we've just talked about before I ask Josh to talk about a couple of stories?

Nope.

Okay, cool. Josh, do you want to take it away on GSK and the other topics you want to pick up on?

Sure, yeah. GSK has a late-stage IBAT inhibitor for PBC, linerixibat, that I think we had heard they were looking to out-license, and they found a partner, Alfasigma, who's acquired the drug for around $300 million upfront, a bunch of biobucks as well, and royalties. Not a huge sum given the size of the PBC market, which I think is interesting.

What's also interesting, though, is if Alfasigma is a familiar name, it's because it was the company that acquired Intercept, picked up Ocaliva before Ocaliva was ultimately pulled from the market for not having a favorable risk-benefit profile with subsequent data. So, at least they do have some familiarity with the PBC community.

It's relevant for a company I cover, Mirum, because Mirum is developing its own IBAT inhibitor. They're trailing, particularly for the PBC indication, by a couple of years. But I think, choosing between a commercial rival of Alfasigma and GSK, one might feel that Mirum's got a little bit more breathing room relative to Alfasigma.

And Mirum's drug, as we await full data sets for it, may potentially have been dosed at a higher relative exposure level and so may actually have greater efficacy. There are actually some signals that might be the case. So, an interesting update in a somewhat competitive space.

Yeah, and you've got 2 other companies, Benitec and Relmada, that actually look—

Yeah, a couple of other data—

Yeah, looking at the share-price charts—

Yeah.

—they're completely contrasting stories.

So talk us through those, please.

Happy to cover those. Benitec's a really interesting company, in part because the CEO is a former investor on the West Coast, Jerel Banks, just an absolutely wonderful individual. It's one of those circumstances where essentially one individual came into a company, really turned it around, and got it on track. Just yeoman's work by Jerel to get this program moving forward.

What it is is an AAV gene therapy, locally injected into the throat muscles of patients with oculopharyngeal muscular dystrophy. They've been providing regular data updates, and they gave us another update—now 2 years of follow-up for patients in the low-dose arm. They continued to look quite good in terms of improvement in swallow function.

Jerel put a ton of effort into figuring out how to actually measure swallowing for regulatory purposes. Lots and lots of work was done there. They dosed 1 patient with a high dose, and that patient has done very well also. It's a very important unmet need for patients, so it's an exciting story—in part because of the important unmet need, and in part because it's just nice to see this one wonderful individual advance the program.

He's now got a full team with him to do all this, but it's nice to see that going, and I'm happy for Jerel and the success that they've had thus far. Obviously, there's still a ways to go before this is a drug with a clearly approvable profile, but they seem to be well on their way.

And then Relmada—an interesting update. The NMIBC, or non-muscle-invasive bladder cancer, space is starting to get quite competitive. There are a number of late-stage programs. Relmada isn't one of the later-stage programs, but they're moving into pivotal trials.

Their phase 2 data for their combination gel therapy, which incorporates the gemcitabine and docetaxel combination, showed that these are 2 drugs often used for NMIBC on a more ad hoc basis. They're not approved for this type of use, so it can be a little difficult to procure and administer these drugs. Basically, Relmada has licensed from a company in Israel a unique formulation of these 2 drugs that you can deliver simultaneously and move into a more proper development path.

They presented a data update showing that the 1-year complete response rate for that combination in high-risk NMIBC is close to 80%. It's a small data set, but it still looks like it's meaningfully above where some of the other competitors are that are further ahead. That includes ImmunityBio, J&J, and CG Oncology. CG is a name that we do cover.

I would note, though, that CG is working on its own combination product. It has an oncolytic virus, and they're in the midst of a rolling BLA for approval in high-risk NMIBC, but they're also now combining it with gemcitabine. I think what we're seeing, potentially, is a shift already in this very early, evolving NMIBC market away from monotherapy options to doublets. That's a common theme you see in oncology: Doublets and triplets often do better than monotherapy.

We'll be watching all of these programs as they evolve. There are a lot of different nuances to the space, but it was a good week for Relmada. The stock is up about 40% or so over the last week, and more notably over the last year. This is what you've got to love about biotech, because in biotech this happens on a not-too-infrequent basis. Relmada is up about 2,200% over the last year. It obviously started with a very, very small market cap.

$0.25—$0.25 was the share price in April last year.

Yeah.

It's the same team that was trying to thread the needle on this whole opioid, non-opioid, and depression issue?

They had a depression program. I forget exactly what the nature of it was.

Oh, I think it's still Sergio.

It's the same team.

It is Sergio.

Yeah.

Yeah.

So, Josh, look, we cover the MIBC and NMIBC markets really in depth, and we've been looking at this data and really like it. The question that we keep going around in our heads is: CG Oncology, them, and so on—somebody's got to be partnering with them. Do you think they can go up against J&J in the urology market on their own?

Yeah, I don't see why they can't. To their credit, CG has terrific relationships in this space. The CEO, Arthur Kuan, is—it's actually ironic that we just were talking about Benitec and what Jerel Banks has done for that company. Essentially, Arthur Kuan has done exactly the same for CG Oncology.

He came in when the company was really floundering—I believe it's been about a decade—and honed in on this asset, advancing it specifically for NMIBC. He's really been able to develop deep relationships in the urology community, which tends to be dominated by these large urology groups, these very large centers. There aren't that many of them, so you can actually be very influential and have a significant reach as a small company.

They brought in Amba Bell, who's also just incredible. It's a wonderful management team, and Amba also has very deep relationships as a former urologist.

Most importantly, it all comes down to product profile and differentiation. The J&J product and the CG product are very, very different in terms of how they're administered, the side-effect profile, and so on. The last point to make is that, when you look at the 12-month complete response rate, at least for monotherapy, it's about 50%, which means half your patients after a year are going to need something else.

Whether you're after BCG, frontline, second-line, or even third-line, there's still going to be multiple lines of therapy for this patient population. That creates a very sizable unmet medical need, and it means that multiple companies can coexist and have very important products for patients. It's not an either-or.

And J&J has set a very healthy price with TAR-200, so I'm sure that's going to help these companies be able to get some pretty good, profitable businesses out of it.

Yeah. If you've been watching this space, it's been a very interesting one because there are more entrants now, such as Relmada, enGene, Protara, and ImmunityBio. But for a period of time, it was kind of like J&J and CG Oncology as the 2 leading horses in this race to watch.

J&J would really go after CG Oncology any chance they had, with unfavorable commentary about their competitors in a way that, just knowing J&J and their general credo and how they're supposed to be behaving, felt a little bit uncomfortable.

Yeah, it didn't make sense.

A little uncomfortable. And, by the way, a lot of the things that J&J was claiming early on about having a major advantage over CG Oncology in terms of the data set completely fizzled. It's a very unusual situation to see this Goliath of a pharma company almost going after a very small emerging biotech company—and not only going after them, but being wrong.

Yeah, well, trying to second-guess data, clinical data, and biology often trumps us all. Paul's got his own fair share of wonderful-looking share-price charts in Dianthus and Xenon. Do you want to talk to us about those, Paul?

Sure. Maybe I'll start with Vertex. I think the Vertex data, Xenon, and Dianthus—I mean, these were some of the biggest biotech news items of the week. We did a lot of pharma on this call, but these were the big biotech news items.

With Vertex, it would be interesting to hear others' views, because I'm sure Josh and Graig might cover some of the stuff in the IgAN space. Basically, Vertex had interim data for povetacicept, their APRIL/BAFF antibody for IgAN, which showed a highly statistically significant change in proteinuria.

The interesting thing, though, and I think this raises a question of where sentiment is in the sector and whether there's just a general appetite to own more high-quality biotech companies broadly speaking, is that these data were probably not as good as some people expected. I think the hope was that the APRIL/BAFF dual combination could generate maybe a greater efficacy punch than what we've seen from Otsuka and Vera with the anti-APRIL antibodies.

Yet they really didn't see much differentiation. Safety seems clean, which was good to see. But the stock had a very big move for a large-cap company. It was up 10% at one point in the day, which, for a company with over $100 billion in market capitalization on news that was, quote-unquote, expected, was a big deal.

The other interesting offshoot in the IgAN conversation that I'd be interested in hearing others think about is that this is a category that I think the Street has become more bullish on over time for a couple of reasons.

One, because physician feedback on these biologics has been good and implies widespread use. But the other reason is just that Otsuka, who’s first here with this class, priced it at maybe twice as high as expectations. I feel like one thing we haven’t complained about a lot on this call in the past year is drug pricing. We’re seeing a lot of just price-to-the-upside trades and not a lot of pushback on it. I would just be curious if any others have thoughts on Vertex, IgAN, or this whole pricing thing, which, again, I really feel like maybe doubled the TAM here versus what people were thinking a year ago.

Well, I don’t have big exposure to the kidney space. But that being said, there is a lot of interest given the still-high medical need. As far as drug pricing, I do think that as I talk to more companies, it does seem that they’re getting—perhaps, I don’t want to say more aggressive with pricing—but I think they feel that they have the flexibility to price higher. Some of that is interesting. I think some of that reflects perhaps what’s happening more globally, where some companies feel that perhaps their desire to launch ex-US is getting smaller and smaller. Given the system where it is today, still in place, they feel that there is room for them to perhaps take pricing higher than we might have expected.

Yeah, Paul, do you want to carry on talking about these 2 companies?

Makes sense.

Yeah, sure. I think we only have a minute or 2 left. On Xenon, they had their phase 3 data for azetukalner. It was an interesting data set because I think the context was that there was a lot of discussion and debate around what the effect size needed to be for this drug. Our view was always that if you look at the biggest antiepileptic drugs, efficacy is a weak correlate of commercial success.

Vimpat was the last big drug in this category. I used to joke with people that if Xenon had the Vimpat effect size, the market cap would be cut in half, and yet if Xenon has the Vimpat commercial outcome, that would be a great outcome because it was a couple-billion-dollar drug. Nonetheless, Xenon’s efficacy data actually was better in phase 3 than phase 2, which is extremely rare in CNS, but kind of an artifact of how epilepsy drug arms often hold up if you run a good study and maybe you can get a little lucky with placebo or a better-managed placebo, which is what they did in phase 3. The long story short is they raised over $700 million, which, again, going back to our original conversation, shows that this is still a healthy market where companies can raise a lot of capital on great data and investors can get rewarded.

Similar deal with Dianthus. They had some interim data in CIDP, obviously a really big IVIG market—crowded, but a big TAM. They were also able to finance and raise $700 million and had a nice stock reaction on their data. If anyone else wants to comment on these, happy to discuss.

Josh?

No, nothing specific on this one for me.

No, I mean, look, the point is what we started with: Is there a risk for the sector given all the stuff that’s going on around the world? As Paul highlighted, the share price reactions to these data releases and the fundraisers that come behind them are clearly indications of a very positive environment for the sector. So I’m really glad that we’re finishing on this.

Paul, you also wanted to touch on the leucovorin FDA news. We have a bit of time, so did you want to do that?

Sure. I think it just shows that the FDA is still in an odd, unpredictable place, right? I feel like every other week I’ve come on here and hammered the FDA. Even though I understand Josh makes the good point that maybe Vinay Prasad is an extremely intelligent regulator and makes good, data-driven points about a lot of these drugs, I’ve still been more bummed out by a lot of the flip-flops and a few of the products or things that I’ve covered that I really do believe in.

I think this one is just weird, right? The long story is this is something that seems to have some political pressure behind getting approval for autism. It’s very limited data, right? I’m not even a super expert in the data, but I think the perceived risk with this drug by those who are around it is not very high. So maybe that’s the feeling or part of the risk-benefit calculus. But it’s strange to me that something like this could happen and that some of these rare disease products couldn’t even get their own fair share of a review.

Yeah, I don’t see the logic in it. I don’t know, Josh, did you want to comment on that, or can we move on?

I think we’re close to the end. I don’t have anything to add.

We are close to the end. There isn’t a week when something happens in biotech that doesn’t have to do with obesity, and this week was no different. There’s no time left to go through them, but just to make sure that folks know that we’ve noticed them.

The Roche-Zealand data was quite an interesting setup, which, I have to say, gets back to the point that’s beginning to wind me up personally: these percentages of weight loss when you don’t have the details. The share price of Zealand was significantly impacted, and maybe for the right reasons or not, but you don’t know how many women were in the control group in terms of gender balance. Women tend to respond better to drugs. We don’t know what the background BMI was.

There’s a lot of data that’s needed here, and we’ve had this data, we’ve had the AbbVie-Gubra data, and we’ve had some data from China, among others. There’s plenty of data coming out that’s showing that the space is getting super competitive. But, of course, the ones who are currently on the market and taking the whole share continue to be Lilly and Novo, and it’ll be very interesting to see, when these others come to market, where the pricing in this market is.

We also had some news from BioNTech, which caught people by a little bit of a surprise: management moving on. I’m going to wrap up there. I think we are 1 minute over. So thank you very much for joining us again. All the details are on the, uh, biotechhandbook.com.

Thanks.