第133期｜2025年3月7日

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

The IPO market is also at a standstill. The 2024 IPO class has 16 out of 18 companies trading below IPO price, with a median drop of 61%. Looking at 2025 IPOs, 3 out of 4 are trading below IPO price, and MSERA is the only exception, basically, perhaps because it's one of the few with a near-term catalyst. Some biotech and health care funds have been shutting down due to poor performance and redemptions, forcing them to sell indiscriminately, and long-short biotech funds are already down over 10% this year. On the positive side, Stifel put out a report last week saying that the time period for redemptions is behind us.

Jake Becraft, what are you hearing on the investor side? Any reason to be optimistic as a biotech specialist investor?

1. The Biotech Opportunity Set

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

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

As a society, we are not getting any younger. As we get older and older, we are going to continue to need more health care, and drugs are one of the most efficient ways of delivering that care. That's not going to change.

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

2. The M&A Dependence Problem

Well, I don't know that I would argue it's too dependent on M&A, but certainly the focus on M&A is probably as substantial as it's ever been. When we're in a market like we're in, as you eloquently laid out, where there's so much going against us—so many stocks are down every week, every day, every month—the ones that shine are the ones that are acquired, right? It's natural, when you have just a few stocks in the green on your screen, to focus on those names and say, “Wow, the only way I'm getting paid is through M&A.” That's certainly the case right now.

I do think there are maybe some broader considerations. I agree with Jake Becraft in general that there's a lot to be optimistic about. We've seen this before; we've been here before. There's still a demand for drugs, and the way we create, reimburse, and get paid for drugs really hasn't changed. I do think the business model of biotech is maybe potentially slightly different than it used to be.

As soon as a drug is successfully launched, for those companies that elect to go at it alone, there's this intense focus on, “Okay, what are you going to do for me next? What is your long-term strategy? How are you going to evolve? How are you going to prevent having a patent cliff years down the road?” From that standpoint, maybe the investment outlook for these go-it-alone companies is more severe or more skeptical than it's ever been, and M&A seems like a great way out for those companies that are able to take it.

It's an interesting contrast, though, because we've had a lot of companies that have done it alone that have performed super well. I'll just highlight Madrigal as one, with Bill Sibold at the helm there, and obviously a very experienced commercial leader. Verona has had exceptional performance as well. I'm just curious: When does it go from, “Hey, wow, cool, you're actually doing a launch well; that's unique for a small biotech; bid the stock up,” to, “All right, what are you going to do for me next?” When does that transition happen?

Yeah, that's a great point, Jake Becraft. That's the wrong transition that you want to get caught up in, right? If you're an independent biotech, we have unfortunately seen many companies do just that—try to persist potentially too long. You're correct: I think the industry is launching more drugs successfully, potentially, than ever before. We've had some of the better winners in the industry go it alone and prove investors wrong—that they can launch a drug and reach that profitability threshold.

But what happens shortly thereafter? It's usually within 1 or 2 years. I'd love to hear Brian's views on this, too. The Street gets very skeptical and says, “Okay, great. We'll give you credit for your cash flow. We can discount that out into the future, but we understand that that cash flow will soon hit a cliff, and you're no more valuable than every penny that you can save between now and then.”

Yeah. We all know the buy-side favorite phrase is “short the launch,” right? Another commonly said phrase is that the most value-destructive thing a biotech company can do is launch a drug. Look, I think that way overstates the situation, but commercializing drugs is really hard. Some are fantastically successful, and others really struggle.

For better or worse, it really ties the company to actual financial fundamentals. Prior to launch, things are so ambiguous as to what the company's ultimate value is going to be. These stocks are all story stocks until that day. That's why I think M&A becomes very important, right? Since the birth of the sector, the thought process has always been that pharma is bad at R&D, but they're good at commercialization; biotech is bad at commercialization, but it's good at R&D. Therefore, there is a marriage that creates that constant view that M&A is going to be, at least to some extent, a driver of the sector.

I kind of agree with Yaron Werber right now. I think it's a little bit too much of a hope for the sector, and there may be a little bit of an overreliance on M&A—that it's going to come and save the day somehow—rather than just focusing on the fundamentals.

Well, maybe I can tie in because Yaron Werber mentioned that maybe we need the industry, or the sector, to change the fundamentals of the strategy. Biotech is not great at launching me-too products, right? But biotech is fairly good at launching badly needed, differentiated assets that really create new markets or really address a need.

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

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

3. Pharma Deal Signals

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

Sentiment, as we said, was poor. One of the key things is how much companies are talking about how much they can stretch their cash and how many programs they're cutting, which is good to see. Another clear situation is that we saw—and I know Eric might talk about it—

The Jazz-Chimerix deal, let's say, is representative of a broader trend. There are a lot of oncology assets that are ready to launch or are in Phase 3, with products that are expected to be niche, and someone probably needs to consolidate them. They're all trading at cash. It's kind of a self-fulfilling prophecy. The good news is that it's all upside at this point.

To answer your question about Pfizer, because they talked specifically about oncology, they said capacity for BD—and this is coming from Steve Scala, who is our colleague—is going to be higher than it was last year. So this year it's going to be 10 or 15; next year it's going to be even higher. There's a little bit of a hint there.

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

Clearly, what they're going to be focusing on is internal medicine and I&I. I&I is obviously a huge theme for us and many people. There's so much going on now in the neuro space between MMN, CIDP, and gMG. These markets are really growing. Some of them are totally new, with multiple competitors now, but all new biology. It's not just a me-too theme with an FcRn; there's a lot of new biology.

Then you're seeing a lot going on now in myositis, Sjögren's, TED, all sorts of humoral rejection, and Graves' disease. There's a lot going on in COPD and, obviously, a lot going on in asthma, with new modalities and inhaled biologics. It's really incredible. That's kind of a huge theme for us.

Another theme that's clearly emerging—and it's not new, but it's going to become more biotech-centric in a very competitive way—is obesity. This is not going to be the Lilly-Novo show. It's probably going to be more of the biotech show.

Amgen is going to have a lot of data, including its go-fast, low-escalation approach, which it is convinced will be much better tolerated. It has now started its Phase 3 trials; it announced that earlier this week. Metsera is going to have a lot of data. Kailera, the new Bain, Atlas, and RTW spinout out of Hengrui, has pretty impressive data, and it's going to show Phase 3 and Phase 2 data this year as it moves to Phase 3. Of course, there will also be data from some of the traditional biotechs that have been out there. There's actually a lot going on, which leads us to be fairly optimistic. Valuations cannot go any lower. Knock on wood.

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

Let's talk about some deals. Small deals this week: Jazz Pharmaceuticals announced that it's acquiring Chimerix for about $935 million, a 72% premium. What are your thoughts on this deal?

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

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

They subsequently received priority review. Congratulations to the management team for executing around that value creation. We do think that Jazz has done similar deals of this nature before. I think Jazz has really been built on an acquisition strategy where it's looking for singles and doubles, not necessarily home runs.

Chimerix, with its 10-plus-year public-market history, had a lot of that time be a struggle. Again, good for them. This is really a deal where one plus one can equal three. It's not going to turn too many heads. As you mentioned, it's a sub-$1 billion transaction, but it seems like the right thing to put dordaviprone into the hands of someone who already has an oncology franchise and can drive better margins from the product economically. This is just a financial transaction, and it makes sense. I'll pause and see if others want to comment.

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

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

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

One of the things that's interesting that they highlighted about the Gubra compound is that it has a pretty long half-life, about 270 hours. That can perhaps enable less frequent dosing. Some analysts noted that AbbVie is looking for weight loss of about 15% to 20% on a standalone basis for Gubra's amylin product. I think that's pretty interesting because that is probably a bit higher than what I think we've observed from other amylins in the past.

It's an interesting entry into the field, and I would not be surprised to see this followed by perhaps some smaller deals to continue building a portfolio in this space.

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

Yep. Can I just add something on top of that? It's interesting because I don't think it's ever too late for something that's different. What Yaron was saying about obesity not just being a big pharma game, but really being a biotech game, is important.

We're seeing that with the work several biotechs are doing. Metsera is coming out with a monthly product, and it's working on the oral peptide. Those have the potential to be differentiated. We see other companies also working on an oral peptide that has a long half-life and could potentially improve tolerability.

I think it's important to remember that these are big markets. When we've seen such big markets in the past, there's a lot of room to make solutions that are better than the first generation, and so I think this continues to be a big biotech opportunity even with good products on the market.

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

4. The Fallen Angel Reckoning

A few weeks ago, you were on this episode when we talked about these so-called zombie biotechs, or what I prefer to call fallen angels. These are companies that have a significant amount of cash but had a pipeline setback and are now trading at a negative enterprise value. There are 1 or 2 obesity companies in that mix, but broadly, there are a lot of companies like that out there.

We talked about ways that these could return value to shareholders, which include reverse mergers, acquiring new assets, and another option that's been less popular: liquidating and returning cash to shareholders. Tang Capital has been very active in identifying these opportunities and has been, in many ways, an unlikely white knight for shareholders in these companies, offering them a way to cash out.

Adam Feuerstein was on a few weeks ago when we talked about this. He wrote another piece this week about Tang. The news this week was that Tang had offered Pliant an unsolicited $3-per-share acquisition offer, but Pliant announced this week that it's sticking with its planned merger with Alumis and turning down that offer.

Pliant’s stock dropped 13% after the news, showing some investor skepticism about the merger. Ultimately, time and trial results are going to tell us whether the merger is a smart move or not. But it sounds like there’s more pressure from shareholders to take these types of cash deals and less patience for reverse mergers, or for just seeing how these different theses play out. Brian, I’d love to hear what you think about this generally and then also talk a little bit about one of these fallen angels, Pliant Therapeutics. Let’s start with any commentary you have generally, and then we’ll talk about Pliant.

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

That’s resulted in a lot of structural changes to companies. You see a lot of reverse mergers occur, and some shareholders have been activists with some of these names, trying to force capital to be returned to shareholders instead. Obviously, the Pliant deal is one example of that with Tang Capital.

I cover Alumis, and I do think it’s a really, really good deal for Alumis. I think it’s a fantastic infusion of capital. The shareholders of Pliant have confidence in the TYK2 program at Alumis, so I think they’re getting a good deal there. But that’s obviously a point for debate.

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

It started last month, when the DSMB initially recommended pausing enrollment in the study. The company then assembled an outside expert panel to review unblinded data from the study. This week just marked the end of the program, but now the company is sitting at $350 million in cash at the end of the year. As of today, it’s sitting at about $100 million in market cap, so we’re talking about $250 million in net cash above market cap.

It’s now part of this very long list of negative-EV names in the sector. Not to go on a tangent, but Biogen actually had a drug in development for IPF with a similar target. That was αvβ6, while Pliant’s was αvβ1, but both utilized αv integrin subunits. Targeting αv has been a bit of a rough road.

The company has a number of other αv-targeting drugs, so I think that negative-EV sentiment implies that the market is reading this as an indication that the target, or at least this subunit, might have some broader issues. I would just say that IPF has been a very tough disease overall, and clinical trials here have been particularly difficult to run. I don’t know if anyone else has any thoughts there.

Yeah, one of the things that was interesting about Pliant was that the stock traded down sharply before the original DSMB announcement. Apparently, they had updated something on ClinicalTrials.gov about recruiting status in the U.S., and I don’t know who picked up on it, but the stock traded down quite a lot. I think it was about 40% before the announcement came out.

So this has been, as you said, a slow train wreck. I’m conflicted in the area of IPF, so I won’t comment specifically. I do think there are some interesting programs, but I’d love to hear from anyone else about Pliant or IPF more generally.

It’s a really challenging space with a very big unmet need. Sam, I assume you’re talking about all the work that the PureTech team is doing on IPF and really coming back with a better version of Esbriet, which is one of the approved drugs.

Part of the challenge here is that there are really just a few mechanisms that we have seen work in IPF. There’s a lot of room to improve, primarily on the tolerability profile of some of the drugs that are currently approved for IPF, and it’s good that there’s important work continuing on that.

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

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

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

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

I agree with you 100%, and kudos to the board and the team for being willing to do that. Switching gears, we had talked a little bit about biotechs and their ability to launch drugs. Biohaven, in its former form, was one of the few successful biotechs launching a drug. New Biohaven had some news this week, so I’d love to hear from you, Brian, on the Biohaven news.

5. Biohaven's Degrader Bet

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

Updating individual programs is very hard, but periodically they provide a number of program updates at once, and that’s what we had this week. One of the things that initially jumped off the page for people was that they had a bipolar disorder study that did not hit the primary endpoint. This was for their Kv7 channel activator.

I actually think expectations here were pretty much zero. I really didn’t have many calls on it. The only calls I really had were to gauge what it would mean for Xenon, which also has a Kv7 lead program in a number of indications.

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

For Biohaven investors, the controversy really sprung up around their molecular degrader program. They have a lead program targeting IgG, and they’re trying to go head-to-head with the FcRns out there in terms of rapidly lowering IgG.

The debate here has been multifold. The data has trickled out very slowly, but it does have very robust reductions in IgG. They announced this week that, at 1,000 milligrams, they’re seeing an 84% reduction following 4 doses.

That’s numerically better than what we’ve seen for the FcRns. I think a big part of the argument is that it’s not quite up to par with what the preclinical modeling was showing at Biohaven, and it’s not really a standard deviation beyond what the FcRns are showing.

I think if you look at the multiple ascending-dose study for efgartigimod, it was about a 75% reduction over 4 weekly doses. So the argument now is: coming to market years afterward, is maybe a 5%–10% relative improvement in IgG reductions going to be meaningful? I sort of love this degrader story overall.

While this is the lead drug, they have a robust pipeline of other degraders. At J.P. Morgan, they had IgA nephropathy data for a Gd-IgA1 degrader that showed what I think is a game-changing ability to rapidly reduce this pathogenic factor. They're really going after many different programs.

I think this IgG data, while competitive in and of itself, really highlights the ability to do this to extracellular proteins. I think you're going to hear more and more about these extracellular protein degrader programs. Biohaven is sort of the main public one, but there are a number of others that are private and have very strong backing: Carolyn Bertozzi's Lycia, and I know, Jake Becraft, you're on the board of Avilar. I'd love to hear any thoughts that you have on the subject as well.

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

If we have a second, maybe let me chime in, because I think this is very apropos. And Brian, by the way, we were complimenting you in our little chat because we love the fact that you have controversial stocks, because you have opinions and you take them on. So kudos to you.

On the comment on IgG, we're all waiting for the Immunovant data, which is going to test more potent IgG reductions. We saw our good friend Medline[?], who's a frequent guest here at our conference, and that data is expected imminently. I don't think they know the data yet, but clearly they're expecting a dose response. It's probably not going to be completely linear like a graph, but it's going to be fairly evident.

The placebo effects—and I think this is exactly what Brian is talking about—mean there is not necessarily linearity between IgG reduction and clinical outcomes, because these are complicated disorders. What's going on in gMG now is that you can see the data, and I think this is what argenx and Immunovant are intimating: The placebo effect has gone up in gMG.

So the delta between active and placebo is shrinking, even if you can achieve a higher reduction, let's say, in MG-ADL, the clinical endpoint, with slightly higher IgG reduction. So it's a little complicated. The good news is that I think there's some data suggesting that you can go fairly low on IgG without impacting infections. That was also discussed at our conference.

This might be getting to the point, as you said, where we're getting fairly potent, and then it's up to the clinical trial design to work it out.

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

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

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

I think this, along with PRMT5, which so far has been a little disappointing as a class—but potentially Amgen's and Mirati's compounds might not be best in class; there are some other ones coming behind—has disappointed a little bit, certainly on the commercial side. Despite the expectation that Mirati would win the market, Amgen's Lumakras is still the number-one brand in the market.

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

Thank you. I want to switch gears and move toward some of the new administration-related news. We'll start with RFK Jr. I heard there was a second death in the Texas measles outbreak today. I don't know if that's been confirmed yet.

I was interested to see that RFK Jr. put out a statement earlier this week that sounded very pro-vaccination, but there were some mixed messages in there. Jake Becraft, what are your thoughts on RFK Jr. and, more generally, the outbreak and vaccines?

6. Vaccines Under RFK

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

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

Rather than a more full endorsement of vaccines as the solution to this, it was really emphasizing, "Hey, there's an importance of individual choice, and you've got to understand you need a very balanced view on safety and efficacy." That's kind of like, "Okay, does that mean that the view now is imbalanced? What's the layer behind these statements that are maybe not quite as robust?"

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

Yeah, I definitely had the same impression. The headlines were definitely very pro-vaccination, and then if you read down, it said things about fish oil. It was definitely a mixed message.

I was curious actually to hear from you, Yaron Werber, because you were following the Makary hearing. He was asked about vaccines, and it seemed very similar in terms of the messaging: directionally positive, but not as definitive as what most in our industry would like. I'd love to hear your thoughts generally.

Yeah, maybe just first, another comment on RFK Jr. and Tess's analysis, which I agree wholeheartedly with. How could you not read anything from the NIH, the NCI, the CDC, or other HHS-related agencies these days with a little bit of a prejudiced eye?

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

Moving to the question of Marty Makary's hearing, I thought it was pretty boring, to be honest. Daphne, I didn't think we learned anything. He sort of played the game not to lose.

I think it's a foregone conclusion that both he and Jay Bhattacharya are going to be confirmed to their respective positions as FDA commissioner and head of the NIH. They knew that, and especially in terms of the commentary that we heard around vaccines and what they may or may not do, I thought Marty Makary kind of took the Fifth.

He just said, "Look, I'll deal with it when I get into office. I don't really have a view now. I'll take an analysis-based approach and follow at least the data."

So maybe, from that standpoint, it was a little bit better than what we've heard from prior confirmation hearings from this administration, but I don't think we learned a thing.

Can I throw out a quick, unscripted question? I think I might have asked this a few months ago. A year from now, are things better, the same, or worse than we're thinking they're going to be now at the FDA-HHS level?

I think that's a great question, Jon [?]. I'd be really curious as to how people feel. Obviously, when Marty Makary does get into the FDA, he's going to inherit some troubles, right? A low-morale agency that feels like it's been pushed around and deprioritized.

So how he deals with that in the first few months of his administration, I think, is going to be extraordinarily telling. I'm just not sure what the outcome will be.

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

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

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

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

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

Yeah, I certainly have opinions on this. Our weekly recap note to clients was actually titled “Revolving Regulatory Door Triggers Synchronous Face-Palms.”

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

Now you have Scott Gottlieb there as a director. You have Cavazzoni as chief medical officer. There's certainly a ton of criticism about the revolving door between regulatory agencies and industry. We all use consultants who are ex-FDA people. They do very well. They're some of the most highly paid consultants that we use.

Certainly, there's no shortage of them who have gone inside companies themselves. I could probably rattle off a dozen or so former office or division directors who are now within industry. That closeness has led to a lot of criticism, right? If you're looking for a job at Pfizer, are you going to cozy up too much to the people internally there as you're reviewing their drug? There very much is that risk.

That's been a big criticism of the administration in particular, those on the healthcare side of the administration. But there's also value, too, right? I want to use these people because I want to understand what the FDA is thinking and what this division is thinking.

If you can truly be unbiased and truly eliminate conflicts of interest and any sort of quid pro quo, then it's enormously valuable, right? If you're Pfizer, you want to know what the regulators want in terms of clinical trial design, what endpoints they really care about, what's going to sink a program, and what's going to make it successful.

It's important, and I find it very hard to go back and forth with that ethical dilemma and really understand it. The other funny thing that we were saying internally—and I think this is not to poke fun at Trump—is that there's a lot of inconsistency in the administration, right?

On one hand, on the healthcare side of things, they're very much against industry and regulatory interaction, or coziness to that extent. But there are other areas where they're completely deregulatory.

I said, “Well, on one hand, you kind of have really bad PR to hire Cavazzoni.” There's probably at least a 20% chance that in the next 6 months we hear that the FDA is going to be completely eliminated and Pfizer will just handle regulation of drugs from here on out.

It was definitely a controversial thing to see happen last week.

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

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

He and I got into a discussion about this because that would essentially be removing the most highly regarded oncologists who participate in clinical trials and have a broad perspective on new treatments. My concern is that people have other types of conflicts.

For example, in the case of Prasad, he gets subscription fees and benefits from making controversial statements. Sometimes conflicts may be less apparent. Some experts might be perceived as conflicted, but in the case of oncologists, they're usually very dedicated and caring people who want what's best for patients.

Oh my gosh. I'm so with you, Sam Fazeli. Also, look, what are you doing when you're accepting money from pharma as an oncologist? What is the typical way you're doing that? It's because you were part of a clinical trial where you were thinking, “I would like to see if this drug works and can help patients.”

Are you saying that doctors shouldn't do that because it's a conflict? What does that mean? We shouldn't have clinical trials, or doctors have to choose between patient care and clinical trials? I think you can really go too far.

I think a key thing about conflicts is disclosure, right? People should be aware: Here's where I come from, these are the drugs being studied, and the purpose of studying them is XYZ.

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

So I agree with you. I think it's really important to separate out what we're really worried about with conflicts and how we ensure appropriate disclosure and appropriate controls.

Brian, you were talking about Patrizia leaving the FDA. There are very strict rules about her ability to reach out to people at the FDA. I agree that this is really not a good look for our sector, but there are actually quite a lot of controls in terms of what she's able to do to call a review team and tell them to make a certain decision.

For one, she's not their boss anymore, and two, I think there are actual rules that say she's not allowed to do that. We need to address this whole issue with a lot more nuance so that we don't lose the value of the collaboration required to get a drug to market.

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

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

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

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

7. Better Biotech Networking

Yeah, I think what stimulated this is our back-channel discussion of your very eloquent post on X, where you provided some feedback to folks on how to reach out. I think all of us on this call get pinged on social media, email, or other channels all the time, probably with requests from younger people to network.

First, I’d say, keep those requests coming. None of us are so old that we don’t remember how difficult it is to break into the biotech industry. I know we’re all, on some level, flattered that when we do get pinged, it’s because we’re viewed as trustworthy enough to be sought after for our advice or our help.

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

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

Then, on the other hand, you get people who reach out to you. I was thinking about how, earlier in your career, you want to network for the sake of networking, but as some people get busier, there’s less interest in networking for the sake of networking.

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

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

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

What I was saying on this thread was that doing some research can help. Sometimes, understanding this principle of hurting your connection and protecting your network makes the connections you do have more powerful. There are other best practices, like the double opt-in, meaning you ask the receiving party if it’s okay to make the introduction. That takes the onus off of them, so they’re not having to reject someone they don’t know, and I think it also preserves the relationship.

I’d love to hear from others, just to open it up. I got some positive feedback on my thread, and I also got people pushing back because I think they thought there was a perception that it’s like, “Oh, you’re too busy to take these connections.” But I think the point is really that there’s a way to do this and be effective and build and strengthen your network, and there’s a way to do this where it actually hurts your network. So I’ll open it up and see if anybody wants to comment.

Can you guys hear me?

We can definitely hear you. I think it’s a really good question. A lot of it also just depends on the closeness of the individual asking. There are so many factors at play. I do think that the specificity of “Hey, here’s what I’m looking to understand” is important. I think your best-practice example is a very good example.

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

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

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

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

Definitely. I agree with a lot of what you said—it resonated. One element, as you said, is that if you’re more direct, the person they might be reaching out to may want to talk to you, but you might actually have a friend or colleague who is probably better suited to specifically discuss what they’re interested in.

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

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

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

It sounds terrible, but it shouldn’t actually change too much, because I would expect that what’s happening overnight is probably very low volume. I’m not sure if others have a standpoint, but we currently have premarket and postmarket, right? You see stuff move around, certainly when there’s a data event or something like that. Sometimes those moves can be more significant.

But I would be surprised if we see very high volume starting at 3:00 in the morning under this new policy. I, for one, am very much looking forward to the 3:00 a.m. call from a client asking, “Why is stock XXX up 10% right now?”

That’s—

On 5 shares.

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

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

I gotta tell you, for me, I don't know. I kind of love innovation and technology, and I feel like you could have argued back in Israel, we all used to meet up underneath the tree to trade stocks, and now it's all computers trading with computers. That's going to lead to innovation. It's going to lead to more complexity, for sure. Probably going to need two Brian Skorneys at every firm, right? One in the morning, one at night. But I think that could be interesting. There'll probably be mayhem in the beginning, but things will sort out. I don't know.