第184期——2026年5月29日

You're listening to Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry with a group of biotech leaders and experts. I'm Chris Garabedian, and my co-hosts today are Brian Skorney, Graig Suvannavejh, and our special guest, the co-founder and CEO of Ginkgo Bioworks, Jason Kelly. For more information about our hosts and guest speakers or to listen to the most recent episode, please go to biotechhangout.com. So, first of all, we always like to touch on market overview. We saw another IPO filing, Cardigan, following last week’s Parabelis IPO. Cardigan is the latest filing. It’s about the 11th biotech filing this year, already beating or matching the total number we saw in 2025. Cardigan is led by the former CEO and management team of MyoKardia, so Tasos Gianakakos is the CEO. He brought on his former CMO and CSO from MyoKardia, which was acquired by BMS for $13 billion.

They’ve assembled and acquired several clinical-stage products. They have 3 unique products with different mechanisms in Phase 2b studies, going after genetic cardiomyopathy, severe hypertension, and aortic valve atherosclerosis, among other conditions. They’ve raised more than $500 million in their Series A and Series B in less than the last 18 months. By going public, this will be one of those record-setting amounts raised for a company on track to IPO within 18 months that we’ve seen.

So, again, I think we’re all watching. So far, the IPOs have held pretty well. I wanted to ask Graig and Brian: As we sit here about to enter June, the 6th month of the year, with 11 IPOs, how are you reading this? At the beginning of the year, we were all looking at IPOs as a marker of how healthy the current state of biotech was. How do you guys see it, where we are today at the end of May?

1. The IPO Window Reopens

I’ll jump in first, and Graig, feel free to correct me with your thoughts. I think it’s good. Certainly, capital markets are a big driver. These companies all consume a lot of cash, so being able to raise at decent valuations, raise a lot of money, and have an IPO window open makes everyone happy, right?

I think IPOs—and as things move earlier and earlier, that’s also somewhat of a signal of moving to bubble territory. I don’t really think it’s there yet, but there’s certainly been an acceleration. Earlier in the year, maybe January, we talked about this a lot on one of these with Matias and Shimmer and me. I think Shimmer said he was looking at 50-plus IPOs. I don’t remember exactly what Matias’ number was; I think it was maybe 13. I said I was sort of in the middle.

He was at 15. I remember being on that one—15.

15, all right. So, unless things go really south, Paul’s going to wind up undershooting that number.

I think it’s healthy. I think the follow-ons have looked really healthy, right? Strong companies with strong data have done really well and been able to trade up. I think capital markets overall look healthy for biotech. I get the question of whether it’s past healthy—whether we’re getting past the point where too many companies are raising too much money.

We all remember—and everyone’s been in this game long enough to remember—the peaks of COVID and the dearth of IPOs that followed as the market cratered after that. But I don’t think we’re anywhere near that, right? This is not a frothy biotech market to any extent.

I’ll just say, Brian, my comment is that I think this collection of IPOs is a little bit different—later-stage and clinical. We see companies that have had clinical data, like Avalon, that have gone out. If this were a preclinical company with ideas and a bunch of drugs moving into the clinic, even with a great management team that has a proven track record like Cardurion does, I’d be much more worried than I am about having 3 Phase 2b shots on goal. It makes it a little less frothy, in my opinion.

Let me just continue with Endpoints, which does these quarterly biopharma sentiment indexes. It’s a nice way to track where things are going with different stakeholders. They just released one this past week, and the overall index—with 100 being the standard average—moved from 78 across all stakeholders in Q4 2025 to 90 in Q1 2026 to 96 in Q2 2026, in this latest survey.

Again, that is an average among various stakeholders. When they break it out by investors and the finance and investment group, they have different levels within that, but those basically moved pretty considerably from Q1 to Q2. Business conditions moved 50 points to 120 on the index. The overall average among finance and investment went to 120, even though the overall average was 96.

It seems that the investment community and finance are definitely feeling more bullish in this second quarter. They rate subcategories like business conditions, which I mentioned moved 50 points, and the funding climate, which moved 54 points. They also look at the 12-month outlook, and that moved 26 points.

They look at the regulatory environment over the next 12 months, and that moved 53 points in terms of expectations for the regulatory policy environment. It’s not clear whether this was surveyed before or after McMurry’s departure. I think the survey might have gone out before Makary’s departure, and they might have collected more responses afterward. Whether that would have gone down knowing that the commissioner had left, or gone up because he did leave, I don’t know.

Anyway, the overall sentiment is shifting across all stakeholders, including biotech CEOs, CROs, and CDMOs that they poll. Those are still tracking below the 100 index, but they’re all moving in the right direction. Overall, things are looking pretty positive. Again, on the venture side, we’re still seeing good deal flow on the private side.

2. China Becomes A Strategic Battleground

We wanted to move to our special guest, Jason Kelly, co-founder and CEO of Ginkgo Bioworks. China has been a main topic for our industry for at least the last 1 to 2 years, in terms of the increasing reliance of pharma and biotech on access to drugs in China. This has sparked quite a debate on social media. Peter Kolchinsky and Tess Cameron from RA Capital put out a white paper taking an anti-protectionist stance.

Jason, I wanted to thank you for coming on and speaking about your position. I will mention something I want to ask about. Besides being co-founder and CEO of Ginkgo Bioworks, your profile on the website says you served as chair of the U.S. National Security Commission on Emerging Biotechnology, which oversees how advancements in emerging biotechnology will shape current and future activities of the U.S. Department of Defense.

I’m trying to understand how much that has colored your lens. If there are things you have insight into about China and the threat of biotech working with China, we’d love to understand that better, because you have a unique vantage point having served in that role. But I also want to challenge the idea that we’ve been “outsourcing” for a long time now. We’ve outsourced chemistry to India and China, and so many of us view this as just a natural extension of what has gone on for decades in terms of outsourcing globally, even going to Australia for a Phase 1. There are many different ways that we access other markets. Anyway, I wanted to set that up for our audience. What’s your perspective on it all?

Yeah, and I think all that complexity in the supply chain that goes into both the discovery of a drug, the clinical trials associated with the drug, and the ultimate manufacturing and commercialization of the drug—it’s very complicated, right? That’s why it makes this a pretty tricky topic to talk about. So, I will try to drill down on what I’m specifically worried about, and it is informed by my experience with the NS ETB, right?

I chaired that for 2 years, and now Senator Young is the chair of that commission. To give a little bit of background, there was a commission like this about 6 or 7 years ago that Eric Schmidt chaired, which was focused on AI. Before that, way back in the day, there was one focused on cyber, right?

The idea is that there are these strategic technologies that ultimately matter to national security, and we want to make sure that the U.S. is the leader in those technologies. We don’t have to be the only place that does them, but we want to make sure the frontier is happening here, right?

You can kind of feel this viscerally. If Anthropic and OpenAI and all of that energy were happening in China right now, and we were here in the U.S. deciding if we wanted to use a Chinese model, that would be a very different situation. To me, the power of that technology is such that we know it’s going to be deployed for military purposes, both for economic and national security reasons. I certainly feel a lot better that that technology is centered here in the United States.

Yep.

Okay. And so I think we have this question: How do we feel about biotechnology? What's weird about biotech—and again, this is a call very much focused on the therapeutics industry—is that I think part of the reason I was asked to be the chair of that commission was that we had actually done a lot of work over the years in industrial biotechnology. This is the development of enzymes and things like that for the production of chemicals, also in agricultural biotechnology, and we did work in therapeutics. So we cross-cut.

What I would say is that I believe we're very much at the infancy of biotech. It's sort of like if you rewind the clock on computers: We look at computers today, but they were really invented in the '40s and '50s. Then IBM got them off the ground in the '60s and '70s in a big way with mainframes, and we all noticed them as consumers in the 1980s and '90s, when they were fully 60 years into computation moving to machines.

Sure.

Right? And you know, genetic engineering really began in 1978, with Genentech in the early '80s and Monsanto in the '90s. So here we are, kind of 40 years into our journey. All right, so it's still early, and we're still seeing what the first uses of this technology are. But to me, the engineering of a cell and the designing of DNA are our other programmable substrate alongside computers, and we should not assume the only use of this technology is to make protein therapeutics.

Sure.

Okay, that feels really short-sighted—

Yeah—

—about genetic engineering.

Yeah, and I—

Considering—

Let me—

All of our food is made with genetic engineering. The atmosphere—sorry—is made with biology; the atmosphere is produced by biology, and our human bodies are made out of biology. The idea that genetic engineering and biotechnology is just therapeutics, in terms of what it could be used for, is naive, or people are just saying that because they have other motivations.

To me, ultimately, it is very clearly a technology that has dual use. It's very clearly a strategic technology. We experienced with COVID that a single RNA virus can shut whole countries down, right? We cannot be complacent. I think it's time for the biotech industry to grow up a little bit and appreciate that this technology has great potential and great power, and thus it is strategic. Countries will treat it that way.

My experience with the NSB was just looking and noticing how strategic China was being about it. I'll pause there for a second before I dive into drugs. The weird thing about genetic engineering today is that 90% of the market for cell engineering is basically therapeutics. It's proteins, cell therapies, gene therapies, and RNA, right? But that whole line of designing nucleic acids, and having the talent and the technology base, all sits downstream of basically 1 application area at the moment. Whoever controls that application area ultimately controls genetic engineering.

It's a little bit like controlling computers in the '60s and '70s. What's woken me up is watching us offshore that to China, and watching US investors and US pharmaceutical companies actively support the offshoring of what I consider to be a strategic technology that will ultimately be more important than computers. I'm just not going to watch it happen. So I'll follow—

Yeah, let me provide a different counter. Look, I think it's a healthy debate, especially as you look at longer-term, more existential, I'll call them meta-narratives around technology, and who will control and own that. But the real issue—and the reason this was elevated recently—was the idea of the Coins Act, which, depending on your interpretation and the reading of it, and I'm not an expert in the legislation, is really going to curtail this activity of licensing drugs and finding opportunities to advance and accelerate human therapeutics for real disease applications.

When I was a public company CEO, I was partnering with the Department of Defense. This was when Sarepta was called AVI BioPharma, and we were definitely working on medical countermeasures, bioterror threats, and all of that. So there is definitely a place for understanding how to protect our country from misuse, or from using those technologies against us and the people in the United States.

But in the cases that I think are being brought up, it really is about this: Why curtail our ability when most would argue that the US is best practice in terms of drug development? Why curtail our ability to take something that might be found preclinically, wherever it may come from, or to design a drug de novo and work with an India supplier or China supplier, taking the next step of, all right, let's see a well-characterized asset—or even one that has entered the clinic in China and is even more well-characterized—before it's brought over? Having had to do the clinical trials and the pivotal studies, that makes it a real therapeutic.

So the idea is, aren't we really just arguing over the next incremental step of outsourcing that the industry has come to rely upon? I'll just add that I didn't read the entire detailed white paper, but RA Capital came up with this idea of Euro-washing, which is the idea that you're incorporating unintended circumstances. Just like when we were offshoring to Ireland and domiciling there for tax benefits, are you going to see the same thing happening because we can have European multinationals? We already see this with deals with China, with GSK, a UK-based company, but BMS, and even today Pfizer, right? Another announcement from China.

I don't think we're going to be able to put the toothpaste back in the tube. Aren't we just hurting the US by trying to restrict ourselves from being able to have that free-market capacity?

Yeah, so there are 2 questions embedded in there, and I'll get to both. Maybe I'll go quickly through the first one, and we can circle back to the second point you just brought up.

On the first one, from my perspective, I think it's a bit simplistic to say that this is just about the therapeutic uses of this technology. I think it is about an industrial capability in the area of biotechnology. It's fine if other places are going to have it. All I insist on is that the US is the frontier. I don't agree with you that we are assured of that. I think we are in the process of offshoring the innovation engine of biotechnology right now.

You see this reflected here in Massachusetts. For the first time since MassBio has tracked it, we saw a decrease of 1,100 R&D jobs in 2024. These are US scientists who cannot get work anymore in the biopharma industry because that work is now happening in China. These are discovery scientists. These are the people who lead the frontier. We have 1/3 of our lab space here in the Massachusetts area empty right now. This is not cyclical, in my opinion; this is a consequence of offshoring.

My point number 1 is that I do think what we are starting to lose here is not that I'm handing off to a chemist to make a molecule that was designed here in the United States. Rather, I'm actually just moving the science of genetic engineering offshore.

And to your second point, yes, Peter Kolchinsky, I think the article is long enough; it's convincing. But the Euro-washing thing doesn't make any sense. The basic reason is that if you look at the market for drugs, it is not a free market. You can tell because 70% of the profits for therapeutics originate with US consumers, who make up 4% of the world's population. We are not operating in a free-market environment here at all.

The question is just what we want to do about that. We could go to a scenario where we spread the cost of R&D across a wider set of countries. Or we could say, “Hey, the cost—if you want to have the national security and strategic value of a biotechnology industry with high-quality scientist jobs and movement at the frontier of technology, if you want that.” By the way, I think it's really valuable to have that, as I already said at the beginning. Well, then you better have a domestic therapeutics industry to support it.

Yeah, I'm sorry, Jason, but why is—

You don't get the industry. What we're doing right now is paying for all the R&D that is going to create a capability in China, even though the US voter and the US consumer are the ones paying for everything. There is no Euro-washing. That's a nonsense term that just got made up.

The US can obviously block whatever it wants. We can control our market, and we are uniquely positioned to do so. Unlike cars, electronics, or software, where there's a large ex-US market, quite simply, we are the market for drugs. The rules we set matter. I do not believe that you'll see some magical merger of Europe and China, because who will they sell to?

Yeah, yeah, but Jason, I'm sorry.

It sounds like your argument is that the U.S. is the beneficiary of the profits, right? Which Peter Kolchinsky has talked largely about.

No, you’re mischaracterizing it. Not the beneficiary of the profits. Go ahead. Finish your comment.

No, but you just said 75% of the profit that’s made is in the U.S.

No, no. Who is buying the drugs?

I know, but how does China benefit from that when we’re talking about multinationals that sell these drugs, or even U.S. biotechs that are able to commercialize them successfully? Even if they license the drug from China and are hugely successful, China might have a small equity position that gets diluted over time, but I’m not clear on how that benefits China if we license a drug from China, successfully commercialize it, pay the R&D, and become the disproportionate beneficiary of the revenues and profits relative to the rest of the world.

Yeah, and again, I’ll focus back on what I said at the beginning. The thing I consider to be national-security-relevant is who has the capability to do the frontier of biotechnology.

But are you talking about new tools and new technologies that are emerging, like CRISPR and base editing as they evolve?

Yeah, that kind of stuff. Absolutely. All those types of things—DNA synthesis, whatever it might be. There are new technologies all the time.

I just think that’s a narrow view, and part of the Coins Act seems to want to overreach and make it overly restrictive. I would argue that, with drug discovery, we already know that 99% or more of drugs that look good in a rodent model never make it to approval.

This is an industry that lives with failure. The latest data, when BIO did its annual review, was that 97% of products entering the clinic don’t make it to FDA approval. This is not going to be an easy game, and I think the argument is that we need to figure out how to access those technologies wherever they might be coming from.

I understand your idea about biodefense and existential threats. But if we’re talking about trying to develop a technology for a disease with an unmet need—and that’s why I brought up human therapeutics—I don’t see how it’s a problem to be overly restrictive about licensing an antibody from a Chinese company.

I’ll be honest: I’ve spoken about this. I think the bigger risk is that pharma bypasses U.S. biotech and goes straight to China to do the deals that GSK has done with Hengrui, BMS has done, and Pfizer is doing with Innovent. That is a bigger threat. They don’t need U.S. biotech or the financing behind it; they’ll just go direct.

That is exactly what I’m talking about. Yes.

Yeah, well, all right, but that’s different from the biotech industry, right? The idea that biotech can thrive—and actually, I would argue that Ginkgo, again, just reading your website—I don’t know your business model fully, but with autonomous labs, you speak about protecting jobs.

With robots, that’s easy.

Yeah, but still, if you’re worried about U.S. jobs, isn’t Ginkgo contributing to eliminating jobs? I don’t think that’s bad. I think we need to get more efficient.

We’re not, actually. It’s a good question. I’ll speak to a couple of things, but let me—let’s see.

Okay, so autonomous labs aren’t going to eliminate human jobs.

Here’s an example. There’s a great ad from a 1952 IBM ad—it talks about the IBM mechanical calculator. I’ll post it on Twitter after this. It shows this refrigerator-sized electronic device and says, “Does the work of 150 extra engineers.” It shows 150 old men, of course, holding slide rules.

You might have imagined that the IBM electronic calculator would be bad for engineering jobs, considering those engineers would be out of work moving the slide rules. Now, of course, that’s the opposite of what happened. As we made the ROI on what was in the heads of those engineers more valuable, we made the work no longer manual.

Yeah, I understand the debate that AI—

Jobs for engineers. And so, I think the only way in the long run that we are able to—because I do agree: no one fights about making U.S. R&D more efficient. No one fights that we should make our clinical trials more efficient. Everyone just gets upset when I talk about things we should do to slow down China.

This is a thing in the bucket of making us more efficient, and I think it would expand the number of jobs, just like it did in the past. But we can move to it.

And Jason, I appreciate it, because I think the reason we wanted to have you on was to allow you to articulate your view more precisely, right? Nicholas Tillemans was also representing more of the view you’re describing online, so people can check out his X threads and posts and read Peter Kolchinsky’s to get a better sense of this.

I think, at the end of the day, the argument as I see it is that when you start to impose specific controls, incentives, and disincentives, it invites unintended consequences. Oftentimes, those are actually worse than the original intent.

Yeah, and again, I just really think it’s not appreciating how unique our position is. This is the thing I don’t want to lose here.

Yeah.

The reason I’m bringing up 70% of the profits is not that U.S. companies make that money. It’s that the U.S. consumer pays for it.

Yep.

The U.S. voter pays for the profits of the drug industry, period. If the U.S. voter wants to have this industry operate in a certain way because it’s in our national-security interest, because it’s good for jobs for the U.S. voter, or whatever it might be, they can decide that. There isn’t some weaselly way to get around that. When you are 70% of the market, you can set the rules.

Yeah, I understand what you’re saying about Medicaid, Medicare, and the payment there. You’ve got a lot of private pay. You’ve got investors who are the ones putting capital at risk to try to benefit.

Look, we’re all agreeing that we need Europe and other countries to pay their fair share, and that we’ve been carrying the brunt of the profitability of this industry. Otherwise, it’s going to go away completely, and I think it hurts the entire industry.

Well, I appreciate you giving me your time. It was fun to chat.

Yeah, and I know we had to go, which is why we covered this topic first. Jason, I appreciate your time. I know you’ve got to run at the half hour, and we’ve got a lot more to cover here. Thank you.

By the way, I appreciate you guys doing this, Biotech Hangout. I’ll put in a plug that people should be listening—I listen to it frequently. I just think we need more people talking about our industry on social media and things like this.

You got it. All right, Jason, thanks so much for joining.

Yeah.

Okay, so let’s move on. Hopefully, the audience enjoyed that, because it has been a kind of raging back-and-forth on social media. I mentioned the Pfizer deal. Again, this is just another continuation of China.

I’ll also mention that WuXi announced a deal with Veridian, a biotech company, for a manufacturing deal. WuXi also announced that it grew in 2025; its numbers grew despite concerns about the Coins Act. There are still a lot of biotechs outsourcing to China, and that doesn’t seem to be going away.

We’ll have to see what ultimately happens with the Coins Act and the final provisions around that. Anyway, it’s something. Graig or Brian, do you want to cover the Pfizer deal or add any further comments on that? Again, this follows the BMS deal with Hengrui. These are bio dollar deals, so this was only $650 million up front. Do you have any different perspectives on licensing from China, whether it’s pharma or biotech?

3. Lilly Builds A Vaccine Portfolio

All right, let’s move to a Lilly deal. Lilly has been bolstering the M&A numbers for 2026 and has been very active. In this case, it bought 3 vaccine companies, announced in 1 day, for up to—again, these are bio dollar deals with milestones—$3.8 billion.

Very specifically, Lilly bought CureVac for up to $1.5 billion for a shingles vaccine. It bought Vaccine Company for an Epstein-Barr virus vaccine for another $1.55 billion. It also bought Limitless for a staph aureus vaccine, which is used to prevent hospital-based infections associated with surgery, for $780 million.

Notably, Lilly hired Peter Marks, who was the FDA official in charge of vaccine approvals. We talked a lot about migration from the FDA to industry, but presumably he shared his expertise about vaccines and vaccine approvals. So, it seems like Lilly is solidly in the vaccine business with these 3 acquisitions.

Brian, why don't we go to some of the antiviral stuff? I know you've covered Gilead for a long time. Do you want to cover the HBV data that came out, which had some of the best functional cure rates that we've seen, and then Biohaven R&D Day? Are you good to cover that?

4. Hepatitis B Cure Remains Elusive

Yeah, of course. Hepatitis B is a fun disease area. I covered all the hep C companies, and it was a big change in the standard of care. Pharmasset—well, first Vertex, then Pharmasset, then ultimately Gilead—wound up being the big winner alongside AbbVie. For years, at the peak of that, people were looking to HBV as the next place to go from chronic, or very low, rates of cure to a shorter oral-therapy cure, eventually.

That's always been the goal: to get patients with hep B, who right now will be on antiviral therapy that just chronically suppresses them. As long as they're on the therapy, they don't have the virus really inflaming the liver and causing liver damage. Ultimately, like in hep C, we want people to just be cured—some short, easy-to-take regimen, and the virus goes away.

It has been a very long, slow development path. A number of companies have come and gone trying to do this. Glaxo, just the other day, announced data from 2 Phase 3 studies of their treatment, bepirovirsen, which is actually one of my oldest drugs, I believe. It's an injectable targeted agent. They showed not fantastic functional cure rates, but functional cure rates in these studies. They got about a 19% functional cure rate.

A functional cure is when you have both undetectable levels of DNA and surface antigen in the blood for at least 6 months after all therapy is stopped. This is a very, very long treatment course. Patients will stop all treatment after 48 weeks if they meet a specific secondary endpoint, and of those patients, about 19% were able to maintain those markers without seeing a relapse.

This is arguably better than what we've seen. There is data in publications to indicate that pegylated interferon combination therapy with Vayurad can maybe drive 5% to 10% functional cure rates after a very, very long time. I haven't heard people particularly enthusiastic about this, but I wonder if it brings back interest into the hep B realm once again, knowing and seeing that we can maybe push the functional cure rates higher.

As we evolve scientifically, maybe we'll get to that point that we were hoping for 10 years ago, at the peak of hep C, to be replicated shortly thereafter with hep B. It's not the case, but science often moves a lot slower than we anticipate.

Well, I'm dating myself, but I remember cccDNA was the really hard-to-crack code. Have they just figured out mechanistically how to generate that more sustained S-antigen clearance? I know it was very, very hard, much harder than in HDV. So, was that kind of what we're seeing? Obviously, it creates the unmet need.

Then maybe just speak a little to the HDV approval that Gilead got. This is a subset: you have to have HBV in order to have HDV, which is a more severe phenotype. Maybe you want to speak to that at all?

Yeah, sure. This isn't specifically targeted to cccDNA, but the presence of cccDNA and its latency within hepatocytes is thought to be one of the primary reasons why you see relapse of hepatitis B. It just sits around in those hepatocytes and isn't subject to viral inhibition or viral clearance. You get rid of HBV, but eventually the cccDNA can produce HBV, and you wind up with a rebound.

This isn't targeted to cccDNA directly. This is targeted at inhibiting a number of the RNA components of the hepatitis B virus. It's an antisense oligonucleotide. I think the mechanism by which very long, sustained inhibition of parts of the virus ultimately leads to functional cure is still unclear. People believe maybe there's an immunomodulatory approach. Maybe if you just keep it sustainably down long enough, the hepatocytes with cccDNA ultimately turn over, and the cccDNA isn't there to source virus anymore.

Whatever it is, it seems like if you really throw the kitchen sink at this virus for a long time, some patients will wind up with functional cures. But I think we have a long way to go and a lot more to understand about the biology of the virus and how to really turn that over.

As for HDV, Gilead got accelerated approval of Hepcludex. This is a product that they bought in an acquisition a number of years ago. They wound up getting approval in Europe. Hep D is also a very interesting virus. It basically lives off S antigen, so it's a prerequisite to have hepatitis B to effectively have infection with Hep Delta.

These patients are very severe. The Hep D virus is kind of slow; it can take a decade, even untreated, to really lead to liver impairment or liver failure. Patients with coinfection of Hep D progress very rapidly, so there's definitely a significant need for Hep Delta treatments.

This is the first treatment for chronic HDV infection. The data are okay. I think there are a number of companies that have been working on products to substantially improve upon this. I actually follow one of these companies, Mirum Pharmaceuticals, where they're targeting S antigen specifically to prevent HDV from utilizing and binding to S antigen, ultimately preventing viral replication.

This has been a long time coming in the approval. Gilead doesn't break out Hepcludex sales in Europe right now, so it's not a very big drug. I don't think there are high expectations that Hepcludex is going to be a big driver for Gilead. But I think it's a very severe disease, and even though it's mostly in third-world countries, I think you see a lot of pricing power here.

Yeah, and Gilead continues to create a strong foothold in the antiviral space and hepatitis. Graig, are you back with us? Can you—I want to make sure we test out your voice.

Yeah, can you hear me okay now?

Yeah, you sound great. Great to hear you.

Okay, I'm so sorry about that.

No worries. You were going to touch on the Apogee-Blackstone deal, and then you've got a lot of cancer updates to cover. We might have to go a little more rapid-fire, but why don't you go ahead and start?

5. Apogee Finds Alternative Financing

Again, apologies to the audience for my technical issues. Apogee reported some very positive top-line Phase 2 data earlier this week for its lead asset, which is called zamilon, kibart, if I'm saying that correctly. It's an antibody for atopic dermatitis. The data were positive, although there was some debate as to what they saw with the dose response, where the high dose did not work as well as the middle dose. In any case, they are moving that program into Phase 3.

What's really interesting here is that while most of us assume the standard playbook for a biotech is that you raise capital post-good data via a follow-on, equity-based financing, instead, concurrent with the data release, Apogee announced a financing with the folks at Blackstone Life Sciences in what looks to be a pretty creative deal structure.

There's up to $1.3 billion available in a nondilutive deal, with $800 million available in what's being called a synthetic royalty financing and another $500 million available as a more traditional senior debt offering that can be elected to be used at a time in the future when both parties agree. It's a very interesting structure.

We've seen Blackstone become more active in the space. Certainly, we've seen Royalty Pharma get involved, but I think most of us thought that, on good data, there'd be a big capital raise and all the banks would be jockeying to see who could get in on the deal. Instead, I guess no banks got paid, and Blackstone came in and provided the financing. Very creative structure there.

Great. Just a new player, I guess. If they got comfortable around another royalty buyout, maybe we'll see more coming out of Blackstone on that, because they just closed their large fund again this year.

They've got a lot of fresh powder.

Yeah. With that, maybe I'll go into a bit of an ASCO preview. Part of my technical issues is that I just landed in Chicago about 2 hours ago and headed over to my hotel to be able to do this podcast. Again, apologies for my technical issues, but let's talk about ASCO.

As we all know, ASCO, the annual ASCO cancer conference, which takes place in Chicago, officially kicks off today. ASCO is the largest cancer conference in the world, with an estimated 35,000 to 45,000 people from all over the world attending. There are doctors, cancer care providers and caregivers, researchers, and, of course, pharma and biotech companies here to present their latest data and hear the latest and greatest happening in the oncology space. There's also a small army of people from the investment community, like myself, attending as well.

With that said, as we think about ASCO this year from an investment community perspective, I think it's relatively light in terms of the major data sets that we think could really move stocks. That being said, I still think there's so much to be excited about at ASCO this year. I decided to make the trip, obviously, with some really great advances in the field and innovations that will be presented. With so much going on over the next 5 days, it's really hard to capture everything that will take place.

Some of the key technologies and asset classes that have been gaining traction and the attention of investors include bispecific antibodies, antibody-drug conjugates, and cell therapies like CAR T, which have had great success in the human hematology-oncology space but are trying to make their way into solid tumors. Then there's this class of drugs called RAS inhibitors. We've probably spoken about RAS inhibitors a lot over these past several podcasts, but the plenary sessions take place on Sunday, and there are a couple of presentations that I think a lot of people will want to listen to.

Speaking about RAS inhibitors, Revolution Medicines, which has a drug for pancreatic cancer called adagrasib, will be presenting the results of its phase 3 RESOLUTE 302 study. Recall that back in April, the company announced second-line data showing that patients who received adagrasib in the second-line setting achieved a median overall survival of 13.2 months. That compares with 6.7 months for standard chemotherapy. You're talking about practically a doubling of the survival benefit, but that was just topline data.

On Sunday here at ASCO, we'll get more details from that phase 3 RESOLUTE 302 study. Importantly, we'll all be looking at the overall survival data on a patient-by-patient basis, progression-free survival, duration of response, duration of treatment, and, notably, safety, tolerability and adverse events.

I'm sure some of you on the podcast may have seen the New York Times video-based interview with former Senator Ben Sasse, who unfortunately has late-stage pancreatic cancer. He was very brave in coming out to show everyone how he's living with his disease. He's being treated with adagrasib and doing relatively well. That being said, the rash that some of you may have seen, particularly on his face, is something that's undesirable.

With that said, we're going to try to get more of a view on the overall safety and tolerability of adagrasib. They are going to be sharing data at some point later this year, I think, in a first-line setting. These RAS inhibitors are really exciting.

There are several companies right behind Revolution Medicines that are working on other flavors of RAS inhibitors. This isn't meant to be an exclusive or exhaustive list, but it includes Mirati Therapeutics, which we cover at Mizuho, and Verastem, which is a company that I cover. These are earlier-stage programs, but clearly Revolution Medicines, with its pan-RAS inhibitors, set an impressive efficacy bar.

That said, I think right after that we're going to have data from Summit Therapeutics. Summit in-licensed a PD-1/VEGF bispecific from a Chinese company, so this is very topical. They're presenting late-stage study data from a Chinese study called the Harmony 6 study, if I've got that correctly. We'll be very interested in seeing how that data evolves.

A lot of excitement among investors has been about the potential of this PD-1/VEGF bispecific being perhaps a better Keytruda-like drug. Remember, last year Keytruda generated some $32.5 billion in sales. All eyes will certainly be on that plenary session.

In my own coverage universe, we've got 3 companies in particular that will have interesting data. One that I'll mention is Corbus Pharmaceuticals. They're advancing a nectin-4-targeting antibody-drug conjugate for several cancers. In particular, treatment with their CRB-701 drug, for which the company announced data last week, led to a 43% response rate in patients with a certain type of head and neck cancer called oropharyngeal cancer. That compares with response rates in the teens that you see with the current standard of care. That's one company we'll be paying close attention to.

Another smaller-cap company is called Immuneering. They have a novel mech pathway inhibitor with what we consider to be very tantalizing data in a first-line pancreatic cancer setting. They just announced 17 months of median overall survival in patients, and depending on which chemotherapy-based standard of care you're comparing it with, that's more than double what patients usually see.

Lastly, a company that I'll briefly mention is Immatics. Immatics has a presence in Germany, but they're Houston-based, and they are tackling PRAME, which is an antigen expressed in over 50 cancers. Immatics has a broad portfolio of therapeutics to hopefully attack PRAME, which is highly expressed in melanoma.

I think ASCO is going to be very important for this company because not only will they show the power of their platform, but they have both cell therapies and bispecifics that can go after PRAME. I think the key here at this conference is also to show that they can go beyond melanoma.

Those are some of the companies we're paying close attention to, but there's so much happening at ASCO. Hopefully, those are just some high-level snippets.

Well, it sounds like you've got a busy week ahead with as many companies as you're covering (laughs). I'm glad we got you back online; otherwise, we might have had to end Biotech Hangout this week (laughs).

I'll also just mention that there was phase 3 data with me domide in multiple myeloma. This is from BMS, extending its strong multiple myeloma franchise that it acquired from Celgene. Just briefly, in a phase 3 trial, adding me me domide helped keep cancer at bay for roughly 10 months longer than the standard treatment of carfilzomib and dexamethasone alone.

The study was conducted in patients with relapsed or refractory multiple myeloma. In addition, the treatment led to a higher response rate of 80.2%, compared with 53.4% with the standard treatment alone. Again, it's a follow-on to Revlimid and Pomalyst for the BMS multiple myeloma franchise.

Brian, let's go to you. You had a Biohaven R&D Day that you covered, and then you can speak to Dine as well.

6. Biohaven Broadens Its Pipeline

Yeah, that sounds great. I want to comment on the mezagitamod side of things, too. I covered solriamfetol back in the day. I actually have the protein structure in a little deal toy that they gave out probably a decade ago.

I think it's notable that they didn't have another IMiD in there that they were comparing it to. I just wonder whether something like lenalidomide or pomalidomide plus carfilzomib and dexamethasone would really be the second-line standard of care. I'd wonder how that would fare versus mezagitamod, because pomalidomide and Revlimid have both shown good results in the indication.

Moving on to Biohaven, that's a highly debated name—one of the most hotly debated names that I cover on the Street. It's a company with a very big pipeline. Sometimes that's a bit of its downfall because it does spend a lot of capital. One of the criticisms I hear from investors is the dilution.

They updated us on a number of things that I thought were all interesting. People really focus on their KCNQ seven channel mod mod channel opener, which is in phase 3 for focal-onset seizures. They provided some interesting updates from the open-label extensions of their phase 3 studies. We're going to see the full phase 3 data later this year.

Everyone's really looking to compare it with ezogabine, a program also KCNQ seven that is from Xenon, which had really great phase 3 data earlier this year. We felt like it was a little bit of a positive incremental update, just in terms of producing some data that people hadn't seen before, particularly some of the reductions in seizure frequency.

The obesity side of the story is that they have a drug called tel daf alpha, which is a myostatin antibody. One of the big debates in the obesity space is that, because you lose so much weight, a lot of that weight on GLP-1s is actually muscle mass. Myostatin-targeted therapies have been shown to work. In the case of an Atlas Venture company that was bought by Lilly, their drug bimagrumab showed about 10% weight loss as a monotherapy.

What it really does in combination with semaglutide, versus the data they presented last year, is change the body composition. Patients are losing weight, but they're primarily losing fat, and they're maintaining or even increasing muscle mass. This is a big concern if everyone's going to lose 40% of their weight and it's all half muscle, half fat, particularly for patients who wind up gaining that weight back. They usually gain all the weight back, and there are concerns that it's going to lead to significant problems, as people will take much longer to rebuild muscle.

Biohaven's going to have phase 2 data, and one of the knocks on bimagrumab was that it had a pretty hairy tolerability profile in that Lilly data. It doesn't seem like it's moving forward. So, if they could replicate the bimagrumab data in combination with semaglutide, ultimately, I think that becomes a really important piece of the puzzle for treating obesity.

But the thing that I care the most about at Biohaven is that they have, I think, this molecular degrader and trap program that utilizes the asialoglycoprotein receptor on hepatocytes to really turn over extracellular proteins quickly. They showed some very interesting IgAN data in IgA nephropathy, in which pathogenic autoantibodies targeting the kidney lead to very significant morbidity and mortality. There are a lot of patients out there who will ultimately go on to progressive kidney failure as a result of IgA nephropathy.

This really targets the exact underlying pathogenic factor, which is Gd-IgA1. They showed very good proteinuria-reduction data and very good hematuria-resolution data. I think there are a number of companies that are involved in this space, targeting broad B cells and lowering all immunoglobulins. We have a launch in IgAN from Otsuka, and Vertex and Vera have submitted applications for more B-cell-targeted therapies.

But I think this is really a very, very targeted, specific therapy that doesn't really suppress the immune system. I think it's really interesting, and they're planning to start a pivotal program in the next couple of weeks. So, I thought that was an interesting update.

I mentioned the Dyne thing, but I think there's a broader FDA story. I've gotten a lot of questions about the FDA all the time, really. Biohaven has a piece of this, Dine has a piece of this, but there are a number of things.

With the turnover of this most recent guard at the FDA—Marty Makary, Anna Forsythe, Tracy Bethge—all of these people were viewed by industry as maybe talking out of both sides of their mouths in terms of having the flexibility that the GOP wants, but perhaps a level of rigor that's more characteristic of MAHA, certainly in pharmaceutical products. There have been a lot of CRLs. Whether they're fair or not, we could debate those, but there were a lot of places where Makary was saying, “Oh, we're going to be super flexible, and we're going to approve anything, even on a theoretical mechanism.”

The reality was that there were a number of CRLs. With him gone, the interim FDA commissioner is actually someone who's been at the agency for a little bit, Kyle D’Amato. He was actually under Scott Gottlieb previously, and he's evidently good friends with Trump. We're hearing kind of nice-ish things about him. I think he's very reserved, and he faces a really tough job. There's a lot of conflict between the GOP and MAHA in terms of what they want the FDA to do.

He's going to have to work in that dynamic, but what we're really seeing is that there's been a lot of turnaround in terms of these companies that were sort of pushed aside at least getting a second chance. Just this morning, Reata announced an agreement to resubmit the BLA for its melanoma therapy. Earlier this week, Outlook announced that they're resubmitting their application for bevacizumab in ophthalmology.

This is interesting because, in their press release, they're basically saying, “The FDA agreed that we have demonstrated substantial evidence of effectiveness, and it's going to be a Class 1 submission.” So, if all of that's true, it's almost like the FDA is guaranteeing an approval if manufacturing is okay.

Dine has announced that they submitted their BLA. This is on time. This is not necessarily a surprise, but covering Dyne, there's a lot of debate—and, Chris, you kind of know this—as to what the FDA is going to do with next-generation exon skippers. You sort of have this precedent that was started with a Teplerson: If you show dystrophin expression with an exon skipper, then that's an approved drug.

Dyne's drug certainly does more, I think, in every measure. It shows more production of dystrophin than any of the naked PMOs have. So, it has better data there. Just on precedent, you would think this would be a layup, but obviously it's been super controversial. I'm sure if Vinay Prasad were still there, he would have said some pretty mean things about your ex-company.

Yeah. And the risk profile would have gone up if he was still there, for sure.

For sure.

For approval. So, yeah, that's great. Brian, that's a great overview. The hard part is that I don't know that we were really seeing the full potential fruits of the reforms of Makary, and there was this kind of schizophrenic perspective. But let's hope that this is a harbinger of more positivity and predictability, most importantly, at the FDA.

We're at the hour, so I just want to say thanks to our co-hosts, Brian and Graig. Thanks to Jason, who signed off earlier as a special guest, and thank you all for tuning in to this episode of Biotech Hangout.