第190期——2026年7月24日

You're listening to the Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry with a group of biotech insiders and experts. I'm Eric Schmidt, and my co-hosts today are Josh Schimmer, Brian Skorney, and Brad Loncar. For more information about our our hosts and guest speakers, please go to biotechhangout.com. Thanks everyone for joining.

We’ll start with capital raising in biotech. In particular, we had one of the first early-stage IPOs in quite some time. We’ve also continued to see some companies go public via perhaps less traditional reverse-merger routes. Brian, I know you flagged Colossal’s potential private offering in the space as well, which we’ll catch.

There’s a bunch of industry news this week that deserves our commentary, including some drama, I would say, and also some progress. We’re going to talk about the FDA environment as well, in advance of 2 very important AdCom meetings next week. Maybe we’ll close with whether the SEC is going to begin changing how companies are permitted to do their quarterly-to-semiannual filings for Qs. Lots to cover.

1. The Early IPO Window

Brian, I think it’s still just you and me. Let’s start with the IPOs and the capital raising. We priced Scribe last night for it to go public this morning. This is probably the first very early-stage company to go public since the COVID era.

I guess we can’t quite call it a preclinical IPO because, according to Scribe’s prospectus, they’re using their gene-silencing technology in the clinic now. They recently got approval in Australia from the TGA, I believe, to begin investigating their lead candidate, which is a PCSK9-targeted therapy for hypercholesterolemia. But since that clearance from the Australian TGA just happened, maybe less than 2 months ago, this is certainly an early-stage IPO.

Again, maybe not a preclinical IPO, but it’s something we haven’t really seen much of in the last 4 or 5 years. It was a modest-sized deal, priced at over $100 million, but it was upsized, and we’ll see how well received it is. I guess the first question we’d like to take on is what this means for the broader biotech sector. Are we slip-sliding away into an era where we’re going to start to see earlier- and earlier-stage companies go public? What do you make of that, Brian?

I think we’ve addressed this multiple times. There’s just a cycle, and I’ve never seen a cycle at its peak not absorb very early-stage things. But I’ve also commented that I haven’t really seen the durability of the cycle allow preclinical assets and preclinical companies to hold their valuation as you see a retreat.

There’s always this dynamic of FOMO in the markets. As money becomes available, you’re looking for new ideas, and people are pushing valuations, so you sometimes have to reach earlier and earlier to find companies. There’s only a fixed number of drugs in Phase 3 development, Phase 2 development, or Phase 1 development.

I don’t think we’ve gone through an IPO cycle anywhere near some of the prior peaks, so I wouldn’t necessarily say this is a bearish signal. But it’s certainly a signal of increasing risk tolerance in the market. Once that risk tolerance goes away—and it will, a year or 2 years or 3 years from now—if there are companies out there that are early-stage and haven’t gotten to proof of concept, they go through troubling times as the cycle unwinds.

What inning are we in right now? Tough to say. I certainly don’t see all low-quality or all super-early companies coming out right now. But we’ve certainly seen a big move in the market, and we’ve certainly seen that window open up meaningfully in the last year.

Yeah, I agree. Maybe another thing to point out is that the valuation and the capital raised by Scribe this week were still a far cry from what we saw happening 5 years ago. In fact, back in 2021, the biggest-ever IPO in the history of biotech at that time was a preclinical company. That was Sana Biotechnology, which raised over $600 million despite being, at the time, maybe about a year away from an IND, and it had a pre-money valuation of about $4.5 billion.

So yes, Scribe was able to raise $120 million or so on a much smaller valuation base. Clearly, we’re not where we were 5 years ago in terms of the overexcitement and exuberance toward preclinical-stage companies. But, Brian, I agree with you: It’s a little bit like, be careful what you wish for.

There’s a fine line for these companies when they consider going public between being able to access capital at a good valuation in the very near term and potentially sacrificing their longer-term future. Take a look at Sana today. That company has struggled. It’s a fraction of the valuation it had when it went public.

Yes, they benefited from being able to bring in a lot of capital, but today they’re at the whim of the public markets, and their valuation is still very much in the eye of the beholder. It’s still an uphill slog for them. That may be the case for Scribe and other earlier-stage companies that aren’t able to create enough of a following or enough of a fundamental clinical story when the markets eventually turn.

Maybe one of the questions, sticking with that theme of when to go public and when not to go public: You look at Sana’s stock price, and it clearly hasn’t been a good reward for public investors. But something you brought up piqued my interest: From management’s standpoint, does that necessarily mean it was the wrong decision?

What would Sana be if it hadn’t raised capital in the public markets? Could the private side have continued to fund it? They’re alive as a company today, and I don’t know if that would have been the case if they hadn’t been able to take advantage of the market.

Not all companies even have that much choice about whether they IPO, because many companies are at the end of the line for raising funds from private investors for one reason or another. If they want to continue, they IPO; otherwise, they’re out of the ballgame.

Yeah, that’s a fair point. I think it’s not just up to company management teams, but in many cases it’s the VCs that are pushing these companies to go public as soon as possible. We always hear that. We’ve heard that from other hosts and co-hosts of Biotech Hangout: The world is set up to push companies out, and there’s no brake on the system. There’s no ability to pull on the reins and stop that from happening.

So yes, Brian, to your comments earlier, I think we’re seeing the evolution of a biotech IPO window. It’s certainly opening wider and wider in terms of the aperture, and there’s nothing anyone can do, including ourselves, other than stand by and watch.

2. Reverse Mergers Gain Ground

Speaking of that aperture, Josh, I know you flagged yet another reverse merger that happened this week, and the Wall Street Journal also commented on this sort of way of backing into the public markets, with companies raising money through PIPE transactions. The Xometry deal, or more broadly, this phenomenon that’s increasingly evident in the marketplace.

Yeah, it’s kind of like reverse mergers finally figured out how to approximate an IPO, with the benefits of the IPO and the capital raised in an IPO. In hindsight, it doesn’t seem like rocket science. You’re reverse-merging with a very sizable PIPE and a strong group of institutional investors supporting you.

The most recent one, Xometry, reverse-merging into InMed, came complete with a nearly $200 million PIPE. It’s a company developing antibodies against PACAP and a bispecific PACAP-CGRP antibody for migraine. Lundbeck recently validated this mechanism with its IV approach. It’s not clear if Lundbeck will be able to, or interested in, shifting that to a subcutaneous option, but Xometry seems to be well positioned to do so.

This is another Dermavant Paragon products profile. There’s another company called Slate Therapeutics, with a very similar setup. Obviously, we have quite a number of successful CGRP-targeting programs in this space, so there’s no reason to think you can’t have multiple successful PACAP-targeting approaches.

This is actually now the 6th reverse merger in biotech that’s been accompanied by a $200 million-plus financing. Last year, it was about 3; the year before that, 1; and prior to that, very little. So we’re really seeing this new parallel process that companies are taking advantage of. We track IPOs, and we also track reverse mergers. Historically, we’ve treated them separately, but this new reverse-merger framework is very IPO-esque. It’s an interesting innovation in this space.

How do you guys feel about this growing trend of backing into the public markets through reverse mergers? Are there pros and cons that companies or investors should consider?

That’s a good question. I’ll let you get your take on it. I think one of the challenges with the reverse-merger approach is that sometimes it’s hard to accompany that with good sell-side research, in the way that you might get with a traditional IPO.

That may be one of the drawbacks. Perhaps offsetting that is that the fees to Wall Street may also be a little bit lower, from what I understand—not dramatically, but a little bit. That's a good take there, but others may have more informed perspectives on this particular point.

Well, it seems like many of these PIPEs are being done with Wall Street sponsorship, with investment banks as part of the transaction. Seemingly, there is at least some research coverage and analyst following baked into the financing arrangements. Many of these companies are not being completely orphaned by Wall Street out of the gate; they seem to have some following.

But they don't go through the traditional, multiple-month or weeks-long process, right, where they're doing all of these test-the-water meetings and meeting, in many cases, tens of different mutual funds scattered all over the world. So that seems to be what's being left on the cutting-room floor. When you do go public, you go public with a handful of backers who truly believe in you, but at least on the buy side, I get the sense that the story is quite narrowly told.

Now, that's an opportunity for us as analysts. I love the fact that sometimes you can be first to a fresh piece of meat or first to a new story, and there's an obvious imbalance of information and opportunity. But from a company standpoint, sometimes it seems like it takes them 6 or 12 months to make up for the lack of pre-IPO activities, test-the-water meetings, and IPO roadshow interactions. But Brian, I don't know if you have any views here.

I think you're trading efficiency, speed, and reduced cost for a longer, more diligent, more exposed process, right? It can happen fast. You can get it done, and that's a benefit in many respects. But you definitely do it at the trade-off of not being as exposed to the public markets through this type of process.

That's a great point. It does seem like these deals happen in lightning-quick fashion in order to access public markets that are ripe for capital. Is the fact that we've seen more and more of these transactions over the last couple of months a negative sign, in your opinion?

I don't feel that way. I think valuations jumping up, quality going down, and companies reaching the public markets earlier—whether it's through PIPEs, reverse mergers, or IPOs—are all similar signals. But I don't know if I would necessarily recognize an end-of-cycle issue.

I think even in the biggest bear markets, we've probably seen a step-up in reverse mergers because it's just been a little bit of an easier process. I haven't run the data, but my knee-jerk reaction would be that there's not a great correlation between increasing reverse mergers and an end-of-cycle issue.

Okay, so no sign that people are getting greedy while they can or have to, and that folks are expecting lesser times ahead. Who really knows, anyway, right? We all know how unpredictable these markets can be.

Why don't we continue with our thoughts on accessing capital? Brian, you pointed out a very interesting media report on Colossal Biosciences. I don't know that a lot of our listeners are familiar with this one, so we'll need a little bit of background.

3. The Colossal Funding Question

It's really easy. If you hear my background music, you can totally encompass this. Colossal is essentially the de-extinction company. That's what they're billed as. Internally, we joke that it's basically like BioSyn from Jurassic Park.

A lot of people probably saw the headline last year about an attempt to resurrect dire wolves from genetic material and fossils. That's basically this company's M.O. They're looking to recreate extinct species—something that John Hammond did very well in Jurassic Park 35 years ago.

But the interesting thing is that they are reportedly looking for a new funding round at a $20–30 billion valuation, which is a very, very large funding round. I guess it goes back to the question of whether this is an end-of-cycle signal. We could probably talk about that, but the question is: would we even consider this biotech at all?

In our precursor discussion to today, I said it's very classical biotechnology because it's all biotechnology engineering. It's not biopharma, which is what “biotech” has really evolved to be synonymous with. But it really is a biotechnology effort that's ongoing, totally distinct from providing therapeutic benefits—more akin to what we've seen in science fiction.

The question becomes: is the enthusiasm here justified by the technology, or are they actually capable of doing what they propose to ultimately do? We could debate that. My question is, even if they could do it, what is the actual revenue opportunity here?

Reading some of the papers about how they engineered the dire wolves, it strikes me more that they're engineering some genetic material into gray wolves, more akin to a transgenic animal. I was talking about this with my wife, who's a physician, last night, and she was like, “Well, you know, Colossal doesn't carry a $20–30 billion valuation.”

I just wonder whether there's a moat around the technology here—whether any major transgenic animal laboratory wouldn't have some ability to do this if it truly turned out to be a very profitable venture. So, with that, I'd love to hear anyone's thoughts on Colossal Biosciences and our attempt to recreate the Velociraptor.

My understanding of the business model—and others have a better sense than I do, since I joined in—is that there are over 10,000 zoos in the world, and there are 1 billion people who visit zoos. If you sell a woolly mammoth to a zoo for $1 million or $2 million a pop, those numbers can get pretty big.

I'm not sure what the other revenue streams are in terms of maybe funding biology and leading to new, potentially therapeutic interventions and breakthroughs or whatever. My understanding is that this is the first generation: selling animals to zoos. I have no idea what the cost of goods for those animals is going to be, or how R&D-intensive or scalable it is, but it'll be interesting to see if someday we're all going to the zoo, checking out the woolly mammoth exhibit, then heading over to the dodo bird exhibit and the dire wolf exhibit. It is fascinating.

We got you, Brad. Anything to add on our Colossal Biosciences discussion and whether this business model makes sense, or whether we should even be considering Colossal a biotechnology company?

To be honest, I didn't fully hear it, but here's what I think is a takeaway for all of us. When they've raised money, I've heard a lot of resentment from drug developers looking down on it. But what Colossal has that many of us don't is a great story. It actually resonates outside of our industry very well, and it clearly resonated with investors.

If you're in the camp of people who are struggling to raise money for your own company right now and you're thinking, “Gosh, I'm trying to cure cancer, and what is this vanity project going on that's raising all this money and getting all this attention?” I would say, rather than being jealous, try to package what you're doing into a story that resonates more with investors—and maybe even beyond that.

That's a fair point. Narratives sell, and hopefully they can turn that narrative into a viable business, too. There have been great narratives in the history of biotech. The human genome sequencing milestone was a great narrative that took a lot of companies to similarly sky-high valuations. Some were able to turn that capital into real programs and persist today, while others never figured it out.

Much like our discussion on some of the earlier-stage preclinical companies, Scribe and Sana, when you have access to capital, you've got to take advantage of it. But what about this point of defining a biotech company? If Colossal goes public, are guys like us going to cover it? Are we going to feel comfortable covering it? Do we want to cover it? Is it going to be in the biotech index? Should biotech investors view it as part of this industry? Josh, I know you had some views on this.

Can we plug our Control Arm podcast? It's a very different type of podcast that literally gets into these types of questions and debates. It's not super relevant for the day-to-day biotech sector, but it is important when you think about how the XBI is constructed. Why are some life sciences tools companies in the XBI, whereas others are in the life sciences index? Why are some pharma companies in the XBI, while some biotech companies are in the pharma index?

It all starts to matter and gets to the point that the way we've been defining biotech has evolved over the years in a very unusual way.

So, in a way, that’s kind of semantic creep, right? We used to carve out spec pharma as its own separate world. But perhaps after the saga of Valeant, nobody wanted to be a spec pharma company. It used to be a great thing to be a spec pharma company. It meant discipline, profitability, cash flow, and probably lower-risk drug development and innovation, but it’s just become this four-letter word, and we wanted nothing to do with these companies. We didn’t have another nomenclature that evolved in lieu of spec pharma, so we just called them biotech.

Perhaps there was some rationale, right? We’re all analysts who follow drugs through the NDA or BLA process. Some companies do both. How do you draw a line and say, “This company is absolutely biotech, but that one is absolutely not biotech”? What do you call it, especially when no one wants to be that old thing? I think it’s been a very effective semantic creep of the nomenclature. But, to be honest, when I’ve been doing this for 2 decades, I dread the question that anyone might ask me: “What’s biotech? What is the sector that you cover?” Because it’s a very difficult question to answer.

I’m good. Well said.

4. Science Needs Better Storytelling

Okay, let’s move on, then. Brad, you hosted a big BiotechTV Science Summit this week, so tell us about that.

Yeah, thanks a lot. It’s the first event that BiotechTV has ever had, and we held it in Kendall Square at MassBio. I want to thank MassBio for not only giving us the space to do this, but also being a top sponsor, and BIO, the Biotechnology Innovation Organization. I should thank Daphne for that, because she put me in touch with them. The idea was to put on an event that supports the whole biotech sector.

Something we talk about here a lot is that it feels like our country is starting to pull back from science at a time when others, like China and other places, are doubling down. We wanted to bring together a summit. We had a few themes, but a major theme was, how do we better explain the work that we’re doing to the general public? We need the support of ordinary people—the American people, so to speak—if we want to keep NIH funding growing and more people going into science as a career.

We had a half-day event and some really great speakers. Speaking of the NIH, we had Elias Zerhouni, the former NIH director, and Noubar Afeyan. We had people from companies at the forefront of great technologies: Nello Mainolfi from Chimera, Sam Kulkarni from CRISPR Therapeutics, and Jason Kelly from Ginkgo. They talked about how they were able to develop this generation of new technologies right here in Boston, and what we need to do to make sure that this area is competitive in the next generation of future technologies.

I always try to have a different angle to everything, and the thing that was really unique, innovative, fun, and cool about this conference was that, in addition to it being a normal conference with a biotech crowd, we invited—and literally flew out and put up in a hotel—20 of the most highly followed people we call SciCommers. These are young people who are science advocates and are at the start of their careers. Most of them recently earned a PhD, or they’re working on it, and these are young people who, in many cases, have 400,000 or 500,000 followers on social media, on Instagram or TikTok.

The ones we invited are the ones who are doing it right. These are not crazy people who are pushing something like alternative medicine. These are people who work in a lab and have done research, and just happen to be young and really good communicators.

They were there, and we learned from them and they learned from us, because I feel like these 2 groups of people live on different planets. They didn’t really have access to—or, at least not until today, exposure to—the corporate biotech world. For that group of people, we gave them a whole 3-day experience in Boston and Kendall Square. Scott Kerzner gave them a walking tour of Kendall Square, and Greg Verdine was a guest of honor at a dinner we had. He talked about how he became a scientist and all of the things that he’s worked on with RAS and beta-catenin.

We also took this group of 20 young communicators and, after our conference was over on Tuesday, sent them out to biotech companies. I’m amazed at the companies that opened their doors and rolled out the red carpet for this. I’m really proud of it. Moderna, for example, took all 20 of them. They gave our group a talk and a lab tour, and then gave them all chances to do one-on-one interviews with top Moderna scientists.

It was exactly what I’d hoped it would be: a young person asking a Moderna scientist, “We hear in the news that this vaccine causes harm, or didn’t work, or whatever. What do you have to say about that?” They were right there at Moderna’s headquarters, and Moderna had a chance to explain to a very broad audience through these science communicators what the truth is.

We had a breakfast at Alnylam where you found Green Street gave a talk about RNAi. We sent them out to 6 or 7 other medium- and small-sized biotech companies, too, where they saw robotics and everything. John Maraganore also had a dinner with them, where he talked about how Alnylam almost went broke a bunch of times and didn’t become profitable until just a year ago.

They really heard the story of biotech. I’m a big believer that, when you show our industry for what it really is and when you show the people of our industry for who they really are, it really resonates with a wide audience. We wanted to start a conversation where we introduced ourselves to these younger people who can be a conduit to a much bigger audience than we’re currently reaching.

A lot of times, we only talk to ourselves. If a biotech company has news, you put out a press release and only care about that press release reaching investors or other people in the biotech sector. If there was another take-home message, I hope that it’s that this matters. We’re doing great things that are exciting, and the public should know about them, because at the end of the day, if the public doesn’t support us—and ours is a very misunderstood industry today—that makes our lives more difficult and ultimately makes it more challenging to help patients.

The theme of this conference was, how do we start to turn that tide? It was a lot of fun, and I learned a lot about putting on a conference. I’m really thankful to everybody who traveled from far and wide to be there that day. I think it was a lot of fun, and it was a really unique conference.

Well, thanks for sharing that, Brad, and thanks for hosting the conference. You’re 100% correct that science education and awareness in this country—I mean, put aside just our biotech community, but more broadly in America—is woefully lacking. Anything we can do to improve scientific acumen is welcome.

You look at what’s going on at the FDA this week with the MAHA-oriented reviews of peptides, and I hope that maybe we’ll have some time to talk about this. But I think, in summary, many of our listeners are aware that the FDA just voted 8 to 6 yesterday to allow compounding pharmacies to approve a peptide that really hasn’t been shown to be either safe or efficacious.

I don’t quite understand where the MAHA fascination with peptides has come from, but it’s a completely unscientific pursuit. You do think that, if we had people in the country who were able to better communicate what is science and what’s not science, maybe we wouldn’t have to be watchful of such episodes as we’re seeing right now.

But let’s get to other topics, unless anyone else wants to comment on that. I’m not sure we’re actually going to have much time for the peptide discussion anyway, so any takers?

I’ll just respond really quickly, Eric, and say thank you for what you said. Another thing that I’d say about it is that I think a challenge that we have is the conspiracy theories and junk science. One reason it’s so prevalent is because that’s highly organized. The people who believe in that stuff are a tight-knit, very organized community, and so that messaging spreads very quickly.

One thing I would say to keep our heads up is that I think people who believe and trust in science are actually a much bigger community. We do have all of those voices, but it’s all very fragmented. A goal of this conference was to start to solidify that fragmentation so that we can start speaking more as a group, because our interests are aligned, but we’re just living in different worlds.

Great point. And again, thank you for all your efforts and the efforts of the conference this week to try and do just that—to bring folks together who can really matter and work in a more concerted fashion.

5. The Immix Biopharma Debacle

Let’s move on to the next topic. Josh, I think maybe you were going to introduce the Immix Biopharma debacle that we unfortunately had to deal with this week. Maybe we’ve lost Josh. Brian, you want to take it?

Yeah, sure.

By the way, I can take this, Brian, if you'd like to. I know all about it and I feel strongly about it.

I was going to split it with Josh anyway, so I’m prepared, too. But if you want to start off, then we can talk more in depth about it. Go ahead, Brad.

The background on this is that there was a guy who, about 20 years ago, seemed to have been a legitimate doctor. I think he was a radiologist or an anesthesiologist. He assaulted a woman, and he lived in Rhode Island. He was arrested and went to court, and in the middle of the court case, he fled.

He literally wrote his lawyer a note that said, “I think I’m innocent, but I can’t stand the possibility of being found guilty, so I’m going to flee the country, and you’re never going to hear from me again. It was nice to meet you. Thanks for representing me.” In absentia, he was convicted of this terrible crime. So he literally disappeared for a couple of decades.

Somehow, the Rhode Island FBI and U.S. Marshals got a tip, 20 years later, about a week ago, that this guy might be in the United States. He was actually on a sailboat off the coast of New Jersey, and they tracked him down and arrested him. It turned out that he was—I don’t know about the full 20 years, but at least for the last handful of years—living under an alias.

He was recently, in March, hired as the chief medical officer for Immatics Biotechnologies like a publicly traded biotech company. He had also worked at another biotech company previously. If you haven't seen the news I don't wrote a an amazing story and everything.

I’ll just very quickly jump in with an opinion that I thought was beyond ludicrous. Immix did nothing more than put out an 8-K saying that this guy was fired and that they didn’t believe it was a material event for their company. That was it.

I thought that was about as ludicrous a way as you could handle this from a PR and communications standpoint, because this guy was literally their chief physician. I know it was only for 3 months, but what does it say about you as a company that you literally hired a con artist?

To get hired by the company, he appears to have had a whole fake backstory. He worked at Merck and Sanofi and all of this stuff, and he said he was an oncologist. I don’t want to get in trouble by saying the wrong thing, but it seems like all of that was just flat-out false. It seems that this company had a con man as its chief physician.

And if I’m a physician working for that company who’s going to have their therapy in my trial, or I’m a patient receiving one of their therapies, I think it’s a pretty material thing that your chief physician was literally a con man. It’s a fascinating story. I hope Adam literally writes a book about this one day, just to learn all of the crazy facts.

But I think it also says something about crisis management and how to handle situations like this. In my opinion, I thought Immix handled it about as poorly as you could handle it. It basically made Immix look like an amateur-hour company, and they were okay with that.

Brian, what do you have?

Yeah, it’s fascinating. Brad really covered it well. I think it sharply contrasts with what we were talking about earlier: We really are doing great things in biotech and biopharma, and it winds up being very misunderstood. Sometimes it’s because there are these cases of craziness that occur in the sector.

This reminded me of the Serhat Gumrukcu case, the Inozyme BioSciences co-founder who hired a guy to kill another guy. Maybe it was 6 or 7 years ago, right? These periodically pop up, and it’s very bad press for biotech, even though I’d argue a lot of these companies aren’t really companies that are necessarily followed by any of us or given a ton of credence. But when it happens, it really sticks out as a case.

To your point, how did this guy get hired at Atossa back in 2022? Who was the first hire that allowed this guy to re-emerge into a senior leadership role as a physician with an entirely created background? It’s just so strange to me how someone who has spent all this time becoming a physician, getting convicted of a crime, disappearing from the U.S., and then re-emerging in the U.S. under a totally different name is able to create that narrative that no one really checks on.

I totally agree on the Immix. This is probably an extreme case that’s not normal, but bad things happen in this sector, right? Drugs fail, safety issues occur, and I always try to encourage people: You’ve got to get ahead of that. Don’t try to hide when things like this happen.

Even if you’re going to take a blow, it’s going to be a worse blow to try to hide behind an 8-K and not make any commentary about the materiality or what happened than it will be to say, “Hey, look, this is what happened. It’s crazy. Give the true story of what happened to the public.”

Yeah, one thing you said, Brian, resonated with me. We, sitting from the outside as investors, sometimes look at these companies and the executives of these companies and almost have this perception that these are legitimate organizations. And yet we’ve seen this time and time again.

I think about Immix. This was a $2 stock a year ago, and it was maybe a sub-$200 million company at the time. I don’t know; maybe they had 30 or 40 employees. It shouldn’t be the default that we look at organizations of this sort, which are kind of on the fringe of biotech, and say, “Wow, they must have gotten their ducks in a row. They must have checked all the boxes. They must have done their background checks. They must have done this, that, or the other.”

My perception and experience dealing with many of these smaller and less well-resourced companies is that they’re cutting a lot of corners in order to just persist, just survive, just try to make payroll, just try to get to the next milestone. That’s something we need to accept as analysts and investors when we’re fishing in these shallower pools of water.

But it’s a point to point the finger at ourselves, too. Our own industry, the investment industry, has certainly had the wool pulled over our eyes with similar con man-type experiences. You guys will all remember, of course, Matt Martoma, the Point72/SAC analyst who went to jail for basically paying off an Alzheimer’s physician for information around their phase 3 trial.

Matt’s whole backstory was much like this guy’s. He claimed that he had graduated from these illustrious institutions and had an A+ résumé. When he was finally caught red-handed bribing an official—at least bribing a KOL—all that stuff came out.

So, yeah, be careful and be somewhat skeptical about what you were told by people. You said you weren't going to be the skeptic today, Eric.

[laughter]

Couldn't help but talk about that story. I'm sure you lived it just as vividly as I did, Brian.

I do remember those days.

Yeah. So, let's move on to better news, and I think, Brian, you wanted to chat about the Dyne BLA acceptance for their DMD drug, zylodursen, is what they're calling it these days.

6. Dyne Raises The DMD Bar

Yeah. I think thematically we're going to now move into a bunch of regulatory stuff, and nothing really embodies the regulatory debate as much as drugs for Duchenne muscular dystrophy, which has been a source of a lot of controversy for half my career now.

Dyne Therapeutics submitted their BLA for a drug that is basically—and this goes back to the original controversy with Sarepta and Exondys 51, or eteplirsen—which is a PMO that's in a subset of DMD patients called exon 51-amenable. It's able to sort of skip the broken part of the gene and create almost full-length dystrophin. Eteplirsen does this in a very, very small amount. It was approved on the basis of being able to show increases in dystrophin expression.

Three other drugs were subsequently approved that do similar things on different exons. And that was a very controversial decision at the FDA at the time. There was an internal debate that went all the way up to the commissioner's level.

What Dyne is doing is they have basically a very similar model, but what they're using is an antibody to make the PMO go directly to the muscle. What you're seeing is higher expression of dystrophin than what you see with just a naked PMO like Sarepta's. It also winds up with a more favorable dosing interval.

Exondys 51 is dosed weekly. This is dosed monthly. It's a little bit better in terms of dosing convenience for patients, and certainly better dystrophin expression. And the question is: Will the FDA approve something that's better than eteplirsen despite the controversies around eteplirsen?

I think it's notable that, in the background here, Dyne has a PDUFA date in late January. Sarepta has also filed an NDA seeking full approval of Vyondys 53 and Amondys 45, which were the subject of a large 2-year phase 3 study in DMD patients that ultimately failed to achieve its primary endpoint.

And there's a big question: Does this validate—as I think Sarepta would make an argument—that despite missing the primary endpoint, there's enough there to validate that this drug is doing something? Or does it recreate the original controversy, that even though this is making a small amount of dystrophin, that dystrophin may not be doing anything clinically at all?

It'll be very interesting to have effectively the same Division of Neurology 1 reviewing both of these applications simultaneously, having a phase 3 data set showing that, let's call it, a little less than 1% of normal dystrophin is not clearly providing a robust clinical benefit over a 2-year, 200-plus-patient study. But does this version of that—which makes a materially larger amount of dystrophin and has a much more convenient dosing interval for patients—meet the metric for substantial evidence of effectiveness?

It's really hard to think that the FDA could give Amondys and Vyondys full approval based on the Asons phase three data set and not very, very clearly approve Dyne-24 DMD, given that on pretty much every metric, it's better than eteplirsen. So, expect people to follow this very, very closely. It'll be, again, another good indication of where we lie right now in terms of FDA flexibility.

I know we've obviously had a lot of change over at the FDA in recent months that we talk about a lot here, but this is definitely one to watch. I think it's going to get approved. I think it's very hard to try to make a case to pull any of the PMOs from the market. The community and advocacy groups are very powerful. They really believe that these drugs do work. Against that background, it's hard to say that this isn't at least a better mousetrap than what's available.

Oh, I agree 100% with you. This is definitively, I would say, a better mousetrap than Exondys in terms of everything, right? In terms of dystrophin expression, in terms of some of the functional data that they had put forth, which at least is intriguing. And, as you mentioned, also the convenience factor.

So, given the very, very, very low benchmark that was set by the FDA and by Sarepta years ago, it's pretty hard to see how this doesn't get approved. I don't even understand, honestly, what the debate in investor circles is, as you point out, Brian. What's the counter to this? That this shouldn't be approved? That we should withdraw every DMD drug from the marketplace? No, that's obviously not going to happen.

The other thing I just wanted to say is congrats to the Dyne team. This team had been beaten up over the last couple of years in investment circles, given some of the turnover they've had at the company and some of the delays in executing around their other program. But in this case, they killed it, right? At the end of the day, their zylodursen was going to be the first muscle-targeted oligo to come to the market for DMD.

The Dyne guys were able to file about a month or so ahead of Novartis, and now they have this priority-review PDUFA date. So, this should in many ways become the first of its kind in terms of a new drug class, and the execution's been nothing but crisp around this program. Brad, anything you want to add, or should we move to next week's activities at the FDA?

Let's move on.

7. The FDA Faces Two Crucial Votes

All right. So, 2, I would argue, very important AdCom panels are shaping up for next week. We've got Replimune and its RP1 drug for refractory melanoma patients, which is going to be reviewed, I think, on Thursday the 30th, is it? And next week, we also have Capricor's deramiocel, a cell-therapy-oriented product, also for Duchenne muscular dystrophy.

Both of these drugs have been in the news a lot. I know we've covered both of these drugs on the Hangout in the past, so probably no need to go through the past history and the controversy around these approvals. Both have been, I'd say, following a very torturous route through the agency and to these upcoming panels.

Maybe, to me, the most interesting thing about next week is whether the outcome of these 2 panels is going to change our broader perception of the FDA. Are we going to be looking at the thumbs-up or thumbs-down votes on these 2 drugs and saying, “Okay, that's very specific to these factors, these idiosyncratic variables around these programs”?

It may be a good thing or a bad thing that neither of these drugs, or both of these drugs, or one of these drugs gets through, but it has no broader read-through to the FDA. Or are we going to be looking at this as a litmus test—really the first very, very public decision-making under the new commissioner, Kyle D Amantes—and saying, “Wow, we've got a whole new tone, one way or another, at the FDA that we didn't appreciate before”?

So, we'd love to hear your views on this. Brad, you want to chime in?

Yeah, I'll jump in and just say that I strongly believe that we need more AdComs, not less. And I think that's been a bad trend lately over multiple administrations. I don't think it's just something that's going on today, or that it's been much worse today than it was before, because it literally represents what our country is.

The FDA and government agencies like it are supposed to serve the people. And the biggest mistake that Vinay made—or, rather, having Vinay in the position that he was in at the FDA—was that he was a “my way or the highway” type of person. He had very strong opinions, and he wanted to change the way individual drug reviews were done based on his own opinions.

And if I'm being honest, I think sometimes Rick Pastor has had the same approach to things. In our country, those government agencies are supposed to represent the will of the people. And we have that very broad term—we say “safe and effective”—and that means different things to different people.

The best way to show that anything got a fair shot is to have a public hearing about it and allow the experts of whatever that is—in this case, the melanoma oncology community—to talk about it from a professional medical perspective. And also, if anyone from the community had a question, literally any person could ask it. I've gone to a meeting like that as just a citizen, and I've said something and asked a question. You can do that.

So, I think it's a good thing that those are happening, and regardless of the outcome, at least now you can say that more things were aired out in public, and it will be less controversial. So, that's my 2 cents.

I think that's very lucid analysis, and I agree with you both about Dr. Pastor as well as Dr. Prasad. It's nice to get this stuff aired out in public. But if I press you, Brad, if both of these drugs get approved—or let's say both of these drugs are unfortunate enough to be rejected—are you going to translate that outcome to the broader FDA? Are you willing to say, “You know what? These are just 2 idiosyncratic events”?

It's hard to forecast.

I think it would only be newsworthy if we have 1 of these rare situations where an AdCom totally goes against it and the FDA approves it, or vice versa. It gets a unanimous yes vote, and then the FDA ultimately rejects it, which has happened under more normal circumstances in the past. We'll have to see.

Fair point. Brian, what are your thoughts on the FDA?

Yeah, I think I would reiterate Brad's point. I love AdComs. It's probably not the most efficient use of time, but 1 of my favorite things to do is go down to the FDA campus and see these AdComs live. Now I've watched many more virtually, even when they're actual events held down on the campus. But I totally agree: This is the opportunity to be transparent in your views, your thesis, and to air everything out in public over a full-day event. I think this is the way to properly handle scientific debate.

I think the NIH and Makary—their arguments were, well, you can just do whatever you want with the panel. You could stack the panel. You could put briefing documents out to say whatever you want. So are they just a waste of time and resources? I would still argue that even if you're going to stack the panel, or even if the FDA is going to be really aggressive in its specific view around what should happen, it's still airing that out, right?

You see cases like aducanumab, where the FDA very clearly put out its view, which was: You should approve this. The panel was not having any of it. It was a full-on rejection of the data, right? Then the FDA wound up approving it, and it's still a very controversial decision, although less controversial with subsequent amyloid plaque removers showing effects. But I still think this is the best way to go about the scientific review process: Do it publicly. So I'm very excited for it.

Does it wind up showing a more flexible tone from the FDA? Look, if they're both yeses—if both of these briefing documents are benign and the FDA reviewers are saying, “Yeah, we kind of think it should be approved, and we're looking for panel guidance on who or under what format it should get approved”—I think that's extremely positive for FDA flexibility. I definitely think it's more than a one-off event.

And look, we've seen complete response letters on some applications, so we have a little bit of a sense of the point of view of at least some people at the FDA. But if these briefing documents are just unearthing negative thing after negative thing and basically saying, “Hey, you have to reject this because these are the problems,” then that's a new tone to hear. Not necessarily a new tone, but it gives us insight into that tone. It's hard to imagine that it's more stringent than the FDA under Vinai, as an example, but we don't know exactly where this FDA currently sits either.

Yeah, I think you guys both make great points. I will be looking for some sense of direction from the FDA from these votes and these briefing documents. But the points you make on transparency are critical for these 2 products in particular. So much of the past history for both Darzalex as well as RP1 has been kept out of the public eye. We really don't know, through the torturous path these drugs have followed, what happened and why. So it'd be really great to air that out publicly.

That is it for us. We are out of time. It's top of the hour. Let me just conclude by thanking Brad, Brian, and Josh, who I know I bought off, for a wonderful episode.