第194期 - 2026年8月28日

So it's been a great run for biotech. I haven't looked today; I think it's down, but overall, the XBI was up around 80% over the past 12 months, massively outperforming the S&P, which was up only around 20% over the same period. Despite all the noise around China, MFN, tariffs, FDA leadership, and general policy uncertainty, biotech capital markets have been pretty strong. We've already seen 20 IPOs this year versus just 9 in 2025, including some of the largest biotech IPOs on record with Parabilis and Kymera. Part of this is driven by the M&A momentum, which doesn't look like it's anywhere near slowing down.

We've already passed 2025's full-year deal total, with more than 30 billion-plus deals and roughly $138 billion announced year to date. A lot of that is being driven by big pharma's patent cliff. We've talked a lot about that: an estimated $180 billion of impact through 2032. So they need the growth, and they're increasingly willing to compete for it. There are more bidders per deal and less patience to wait around for data. Interestingly, premiums have actually been compressing a bit, even as the bidding gets more competitive. I assume some of that is because M&A expectations are already priced into public stocks.

One interesting side note is that, if you look at XBI's membership since the last peak in February 2021, of the 169 components back then, only 74 are still in the index today, so that's roughly half. Roughly a quarter of those exits were the good kind—acquisitions—but a third fell out by dropping below the market-cap threshold. One of the things that I think is really important to note is that the mix underneath this rally looks pretty different.

If you look back to the last peaks, mid-cap biotech M&A was about $67 billion, and $66 billion was equity issuance. So issuance and M&A were balanced. This past year, mid-biotech M&A has run around $143 billion, which is more than double the 2020 and 2021 pace, and there's only been about $59 billion of equity issuance, so M&A is running well ahead of issuance now. IPOs, while coming back, are much more selective. I don't know if you guys know of one, but I don't think there's been a preclinical IPO this cycle versus 19 in the year before the last peak.

1. Moderna Reignites Biotech Interest

This week was also a bit of a throwback, with Moderna driving generalist interest in the sector. Eric and Sam, can you comment on the Moderna news and its broader impact on the sector? We'll start with Eric.

Well, I think Sam's going to talk about the news itself, but let's talk about the influx of generalist interest that you just noted, Daphne. Not only has it been a great year for biotech, but it's been a great month for biotech. We're taking it on the chin today, as you've noted, down a few percent, but I think we're up about 7% in the month of August. I think a great majority of that performance was probably driven by the big headline news Sam will discuss: how an mRNA vaccine was able to prevent recurrence of cancer in melanoma.

Everything Moderna does always gets exaggerated, and everything with mRNA vaccines adds another level of interest. We saw the indices up meaningfully—about 7%—on the day of the news. We saw Moderna go up almost 200% on the day of the news, and it wasn't just this stock; it was anything and everything around cancer vaccines that also went higher, and really anything to do with biotech went higher that day.

Conversely, Sam and I were emailing about this. You might think that, with all the success we've had in biotech over the past year, which you very keenly noted, and then topping it off in August with another great few weeks of performance, biotech investors would be on cloud nine. Yet, conversely, a lot of people have been bitching over the last couple of weeks. They've been bitching about the somewhat unsophisticated influx of investment that they perceive to be coming into the space, with generalist interest overwhelming specialist interest and generalist funds going into “all the wrong stocks.”

A lot of people, of course, were short Moderna. A lot of people who are using the XBI benchmark to judge their performance did not own Moderna. Long-only funds, as a result, were very unhappy about the Moderna influx. I think we were both picking up on that, Sam. Is that correct?

Yeah, absolutely. The stock was trading around the $50–$60 range for about 6 months, and then, on August 19, we were looking at $170. It closed at just over $170, which was a very tough one if you were short. And now it's settled around the $140 range. Shall I keep going on the news itself, Eric?

Yep.

On August 19, Daphne, news came out that Moderna's melanoma trial with its cancer vaccine—I apologize that I'm going to call it a cancer vaccine; it just rolls off the tongue a lot easier than intismeran autogene, or individualized neoantigen therapy cancer vaccine. The world's decided that's what it is. The INTerpath-001 trial is a phase 3, very well-designed trial looking at a vaccine generated per patient.

Each patient goes in after their surgery, and the tumor is used with their algorithm—which is an important point—to identify the neoantigens. I don't know—20 or 30; I can't remember the exact number—and that goes into an mRNA machine. mRNA is produced, and then you inject that into the patients over several weeks, along with Merck's Keytruda. It was being tested against the standard of care in this setting, which is Keytruda. These are patients with completely resected tumors, stage 2B to 4.

Apparently, it worked—that's the headline news. Recurrence-free survival hit its endpoint, as did the key secondary endpoint of distant metastasis-free survival. Quite a key one there, because that means you're potentially also impacting microtumors, or whatever you want to call them, that are elsewhere and not just the primary tumor area. Merck said it was clinically meaningful, although we did a quick AI check, and Merck does use that phrase regularly in its trial readouts.

And of course, the market has now decided—at least, the share-price reaction suggests—that this is worth a lot more than what we come up with, despite our having done a deep analysis of every indication they have ongoing. Obviously, our pricing assumptions may be wrong or whatever, but we get to about $12 billion if everything worked, not risk-adjusted.

Eric, I'm pretty sure someone at Cantor has done something similar, or other houses have. I don't know what the range will be, but it's a good number, and remember, half of that is shared by Moderna in some fashion.

That was the news. And now, of course, we have another trial coming out in kidney cancer, also adjuvant. I think Moderna has been very clever about the way they've done these trials with Merck. It's a measured, calculated approach, with no cold tumors, which, of course, is the problem that maybe BioNTech has faced.

That's where we are. They've just led with a $2.6 billion convertible offering today, a relatively smart deal. It has a conversion price meaningfully above the current share price. A $2.6 billion equity raise would have been tough to get specialists going for, so well done to them. It pushes the cash runway well beyond 2030–2031, assuming everything works out in terms of COVID vaccines.

This one hasn't been owned by some of the usual specialists. Do you think they participated in this offering? Are you guys hearing anything about that?

Eric, do you want to have a go at that?

Well, I think they participated only if they were looking to cover their shorts somehow through some other currency. But no, I think a lot of people, even though, as Sam mentioned, the stock has pulled back meaningfully, are still struggling to see how so much value was created in this stock based on this one melanoma result, and whether it'll translate at all into other tumor types.

Sam, I assume you're going to talk about BioNTech as well. Maybe I'll just add one thing that I thought was very interesting about this announcement, which was the algorithm. Sam, you did mention this, but we don't know exactly how these neoantigens are chosen by Moderna. I assume they're going to keep that a trade secret.

And if that's the case, there will never be a generic form of this vaccine, right? So this is going to be a forever franchise that lasts and lasts and lasts as long as nothing better comes along. From that standpoint, durability could be an extremely valuable franchise.

Absolutely right, and that is where I think the models can be a bit more confusing. Although our model goes out to 2040, I don't particularly know what the time value of money would do to whatever we calculate past that.

But then BioNTech—we know that BioNTech had a failure once in metastatic melanoma. Most people put that down to very large tumors, which are very hard for the immune system to deal with. But of course, that's not quite true, because immunotherapy does work there. So they've had that failure.

Then today, actually, I was telling Eric in the middle of a webinar we were running, talking through our Moderna numbers, they announced that the colorectal cancer trial—which is perhaps not the best trial to have done—failed. Or at least, we knew it had failed, but it has been stopped now. It failed for futility back in October 2025. The company decided to continue in case separation came later. Apparently, there was another interim look, with no safety issues in April, and then suddenly today's announcement came out that there was actually an imbalance in survival. It's a phase 2. Why there's an imbalance, I don't know.

Remember, this trial is vaccine-only in ctDNA-positive patients who've had surgery, versus watchful waiting. So it's maybe not the most potentially positive trial, or the trial with the highest probability of success, that you could have done in this setting. But credit to them: they're going after a very tough tumor where it's cold, and colorectal is at the very cold end in terms of immunotherapy. So I'm not going to read too much into BioNTech on this, just to say that it begins to create a bracket for you, with melanoma having worked—the hottest tumor—and colorectal having a problem—the coldest tumor. What happens in the middle? Time will tell over the next few years, starting with RCC by the end of this year. Over.

2. Revolution Wins Pancreatic Approval

Mm-hmm. Right. So big news: another big story in cancer has been Revolution Medicines, and it just got FDA approval for pancreatic cancer. Eric, were you on the board there in the past?

I was.

Oh.

So very proud to have been able to serve with such a wonderful company that is now bringing a remarkable therapy to patients.

That's amazing. Congrats. Maybe you can walk us through why this has been such a big deal clinically, and then Sam, I know you wanted to get into the speed of review and the pricing.

Well, it's a big deal clinically because this is a very substantial tumor type. Pancreatic cancer is, as everyone knows, responsible for about 40,000 or 50,000 deaths in the U.S. per year, one of the top killers, and we've had nothing. We've really had no good therapy, and average survival in the second-line setting, where daraxonrasib, or RMC-6236, is now approved, is only 6 or 7 months. I think everyone's quite familiar with the RAS(ON)2 data that showed essentially a doubling of survival and justified this very rapid approval. The drug was approved with just over a month of review at the FDA. So congrats not only to the RevMed team for some terrific execution, but also to the FDA for getting this to patients as quickly as possible.

In terms of what's a little bit interesting or remarkable going forward, I think we've all now seen the data that was presented at ASCO, and that's certainly remarkable. But one thing about the label and the approval is that it was approved in part for patients who were ineligible for multi-agent systemic therapy—that is, ineligible for chemotherapy, which has been the front-line standard of care. So if you're too old or too frail or don't tolerate chemotherapy, you don't need to go through chemotherapy. You could just get daraxonrasib as a front-line agent, and that is going to be very, very interesting to watch.

Certainly, if I or a loved one were unfortunate enough to have pancreatic cancer, I'd be asking for daraxonrasib as a front-line agent, not a second-line agent. So we'll have to see what physicians do, and this has implications for the development of agents that are coming behind daraxonrasib. If this drug is increasingly used in a first-line type of setting, it's going to be very, very difficult to do clinical trials in either the first- or second-line setting, so there are huge implications for the development space.

Fortunately, there are a lot of great new therapies that are potentially coming to the market behind daraxonrasib for pancreatic cancer—not just the RAS isoform inhibitors, but also the PRMT5 inhibitors. So there's a lot of great stuff going on. But Sam, I'll turn it over to you for any thoughts on pricing and whatnot.

The speed was great because, of course, they had the special voucher that the FDA has started. I don't know what the status of it will be, is, or is going to be. I think most people expected approval this quickly—not necessarily this quick. It's been available free of charge for folks since April, I would say. So that's going to be interesting as they roll over into the paid group.

As Eric said, two things happened here to explain why Revolution Medicines—although it's down today, and I can't quite fathom that except that it's with the XBI, maybe. It changed our numbers because we had assumed pricing that was kind of in the middle of the range of recently approved small-molecule drugs for small populations of patients—not particularly that small, but mostly focused on cancer. We ended up with something like $275,000 as our estimate, and of course it came out much higher than that. So that makes a difference to our model. We've gone up to $12 billion potentially in PDAC.

That, of course, depends on whether there's a gross-to-net adjustment, which we know some drugs have. A Novartis drug is dealing with that; they have a gross-to-net. Their drug pricing came out at $478,000, which is not the highest today in terms of an annual cost. Vitrakvi, which is the NTRK fusion drug, is at about a $518,000 cost based on our math. So $478,000 puts it massively above the one next to it, which is $302,000—Retevmo for RET-mutant tumors. It's a big number.

Our assumption is that we're going to end up with a gross-to-net of, we assume, 20%, and I don't know how Europe is going to be able to manage this. It doesn't fall under MFN, as far as I know. Then, of course, you've got this additional patient population that might benefit from it, which is the frail, I would say, ECOG 3-plus. On the other hand, this drug isn't a walk in the park either. So let's see. Over.

3. Heidi Overton Faces the FDA

Yeah. It's interesting. I heard a lot of negative pushback regarding this and the financial toxicity that cancer patients face. So I guess we'll see. I'm not really sure how much of it gets covered by insurance. So let's move on to the regulatory side. Heidi Overton was officially nominated by Trump to be the next FDA commissioner. And Graig, I think you've been tracking this closely, so I'd love to hear what you think and how you think she'll run the agency.

Yeah, thanks, Daphne. Thanks to everyone for the invitation back as a contributor. Last Wednesday, President Trump nominated Dr. Heidi Overton as the new permanent FDA commissioner. Recall, everyone, that following the departure of Marty Makary in May, Kyle Diamantas, if I'm pronouncing that correctly—the current deputy commissioner for food at the FDA—has been serving as acting FDA commissioner on an interim basis. So we've been waiting to see who President Trump was going to nominate.

Maybe just in terms of Dr. Overton's background, she is a medical doctor. She earned her degree from the University of New Mexico School of Medicine. She's also earned a PhD from Johns Hopkins. She completed her training and residency at Johns Hopkins. She's also board-certified in public health and preventive medicine, so someone who clearly is in the medical field.

She first served in the first Trump administration, from 2019 to 2020, working in what is called the Office of American Innovation and also the Domestic Policy Council. After leaving, when the first Trump administration moved on, she joined the America First Policy Institute, a Trump-aligned think tank, and served there as chief policy officer. She led its Center for a Healthy America. She returned to the Trump second administration and has served as a deputy assistant to the president, focusing on health policy. So she's got a total of about 3 to 4 years of experience working in the government, but again, only during the Trump years.

Confirmation hearings are expected when the summer recess for the U.S. Senate is finished. Interestingly, dates have not been set just yet, and the date will be set by the chair of the Senate Health, Education, Labor, and Pensions Committee. That's Senator Bill Cassidy, who is relatively outspoken, and he has already expressed some concerns publicly about both Dr. Overton's management experience and her role in recent vaccine policy initiatives under RFK Jr. So it'll be another interesting confirmation hearing for a Trump nominee.

Now, for the purposes of our Biotech Hangout, though, and with our audience in mind, I think the most significant and meaningful thing we want to know is if Dr.

If Dr. Overton is indeed confirmed, what could this mean for the biotech sector in terms of the FDA's views, biases, or policies? Based on some work I did in preparation for today's podcast—with the help of AI—I'm going to highlight some potential pluses and minuses when it comes to how we think about Dr. Overton and what she stands for. Then maybe I'll also talk about therapeutic areas that could benefit or face challenges based on what we know. Again, we won't know her official views until she is confirmed, if she is confirmed.

From a bull-case perspective, she appears to be pro-innovation in terms of what the FDA should be doing, so that is good for all of us. She does seem to be supportive of faster cures. She is likely to be supportive of clinical-trial modernization efforts. Again, she is a physician with public-health credentials, and given her prior experience at the White House or in the Trump administration, perhaps her influence could help push reforms relatively quickly.

In terms of things that have been highlighted that perhaps present a little bit of a bear case, she does have limited management experience. The FDA is a huge organization, and she doesn't seem to have a lot of experience managing large organizations. She has less direct FDA experience than past commissioners. We will obviously question the potential independence that she might have from White House politics.

Again, this is speculative. There are some vaccine controversies that might come about if she does indeed get confirmed as FDA commissioner, so we'll just have to see how the Senate confirmation hearings progress and whether she does get confirmed.

In terms of potential areas that could benefit if she is confirmed, it does seem that rare diseases potentially could be the biggest winner. Again, this is based on the emphasis around faster cures, innovation, and clinical-trial reform. So gene therapies could particularly benefit. We also think—or at least I think—that maybe the neuro space could be another area.

It's a place that's near and dear to me, given my background and areas of focus. Neurology has long clinical trials, difficult endpoints, large placebo effects, and some high failure rates, and so clinical-trial reform could be helpful, especially around things like biomarkers and streamlined study designs. I think neuro could potentially benefit.

Interestingly, AI has also highlighted cell therapy as an area that could benefit, and we know that the cell-therapy space has very challenging manufacturing, CMC requirements, and post-approval commitments. So cell therapy might benefit. I think the last 2 areas I'll briefly mention are psychedelics. We know RFK Jr. has been very instrumental in highlighting and promoting faster development of psychedelics, and I would say the other is precision oncology.

Very briefly, on areas that could face some challenges, I did mention vaccines. This is an area of uncertainty, but she has played a role in vaccine-related White House initiatives. And again, as I mentioned, Senator Bill Cassidy, who will chair the confirmation hearings, has already made some public comments.

One last area is reproductive health or women's health companies. Again, this is perhaps around abortion pills or reproductive-health regulations. Those are just some of the areas I think about when we think about Dr. Heidi Overton—the pluses and minuses, areas that could benefit, and areas that might face some challenges.

Thanks, Graig. That's very helpful. There are a few other regulatory-related, policy-related news items. I'm going to hit them really quickly, and then I want to open it up for discussion.

You talked a little bit about reform in terms of—and I think one area that we've all been focused on is how the US can be more competitive and less slow to get new medicines into the clinic. Alex Harding wrote a nice piece in response to Operation Trailblazer, which HHS announced in June to try to keep early trials in the US. One statistic that Alex mentioned that stuck with me is that US INDs are down more than 10% since 2020, while China's Phase I trial count nearly doubled over the same period, from about 600 to over 1,100.

My own take is that we, like most of our peers, still run Phase I and IIa trials outside the US. In our case, we've chosen Australia before bringing the program to the US for Phase IIb and beyond. The policy conversation is the right one to have, but it seems to me that a lot of these well-intentioned initiatives, like Trailblazer, become almost like sound bites, but then are very slow on implementation. My perspective is that until the FDA divisions actually embrace some of these talking points, sponsors have to keep planning conservatively.

For example, one area they've talked a lot about is that only 1 pivotal study is needed for approval, but we're not necessarily seeing that embraced yet by the divisions more broadly. So I think there are a lot of great efforts. I'll maybe pause for a second, then we can talk a little bit about China, because there's a new push to reject clinical data from China. We'll talk about that in a moment.

Does anybody want to comment on either Heidi Overton or this push to improve the efficiency of getting new drugs to market—new drugs to the clinic—in the US?

Maybe I'll just comment on Dr. Overton. Graig gave a terrific summary and overview of her qualifications and background. It does appear that she is essentially a mentee of Dr. Makary's, and in many ways maybe a bit of a Dr. Makary clone. She's a physician-scientist, but someone who doesn't have a lot of expertise at the FDA and maybe, in other ways, not a lot of qualifications to run a big organization. I think that's going to be problematic, to be honest.

The other big strike against her is RFK Jr., and she is very much associated with the MAHA contingent, as Graig discussed. Just this week, we saw a couple of deaths due to measles in Pennsylvania, something that should never, ever be happening in the modern day and age. I thought the comments from RFK Jr. about vaccinations were more tone-deaf: about the need or lack thereof to get vaccinated, about why some people are vaccine hesitant—something that he's not been accountable for or is unwilling to rally against. It's just sad. I would hate to see yet another health-care leader appointed who shares any of those views.

Yeah. Bill Cassidy talked a lot before the RFK appointment but ended up supporting it afterward. I don't really put a lot of weight into what he says. Let's talk a little bit about China.

4. China Data Fuels a Policy Fight

Republican lawmakers John Moolenaar and Ben Cline are asking the FDA to reject clinical data from China unless a trial site has been recently audited by the agency. The backdrop here that I don't think is getting enough attention is that this letter follows reporting on 3 deaths. Endpoints had a good article about this: 3 deaths across 3 separate investigator-initiated trials in China. So Moolenaar and Cline are saying that offshoring early trials to China risks rewarding a system that has shown it's willing to treat children's deaths as an acceptable cost.

They want the FDA to reject China-generated data for INDs, NDAs, or BLAs alike, unless the site has been audited within the prior year. This is a high bar, given that FDA staffing and access constraints are already quite challenging. What's interesting here is that Moolenaar has been on this for a while. He chairs the Select Committee on China and already got similar language into the FDA appropriations bill.

But Cline is more interesting to me because he's part of the Biotech Caucus, which has generally been more industry-friendly on China. So having him cosign suggests this isn't just the usual China hawks anymore. I know there's been a ton of debate. I've talked a lot with Peter Kolchinsky and all the folks who are pro-China, and I've also heard from others who are not supportive at all of the push toward China. I know we've talked about it here, but does anyone want to comment on this?

Yeah, definitely. I'll jump in. A lot of people have been to China recently. I'm actually going back again in a couple of weeks, just before the World Conference on Lung Cancer.

But I am hearing that trials, or at least products that are manufactured in China and not outside of China, are not making it through. Clearly, clinical data out of China is not going to be enough to get approval. I mean, that's been something that's been said for a while.

So asking companies to bring drugs out of China, manufacture them in the US or the West for use in the region, and conduct the clinical trials in the West and the US, I don't think that's anti-competitive. I think that should be the case, given the current geopolitics. But going beyond that to try to crimp the ability to do deals with Chinese biotech companies just does not make any sense to me.

So I’m still very strongly of the view that that would be absolutely the wrong thing to do. Just let the market make its decisions. When you look at these IPOs that, Daphne, you just suggested, look at the—we’ve just done it, just published today—look at the year-to-date China and Korea IPOs, their performance, how much money they’ve raised versus the US. It’s chalk and cheese. The US still leads by far if the science is allowed to flourish, if the science is allowed to be converted to companies, and the scientists are left to do their job. And that’s the problem that I think we’re dealing with here.

So I think that momentum is still there, and that’s what we need to make sure we continue to keep—not try to destroy another country and stop people from getting access to other assets elsewhere.

Yeah. Since we’re on the topic of China, Sam, do you want to talk about Akeso and Summit?

Oh, that’s a good segue. Yeah. So, a bit of news. I think, a little bit like Moderna—and I think Eric talked about this—there’s so much emotion involved when you’ve decided that a company has something that you don’t like about them, and that just keeps playing on you. Therefore, that colors your judgment. Now, a lot of very good professional investors can overcome that. But as an analyst, I also feel that I sometimes get drawn by that. To a degree, I’ve always sat on the fence, or on the negative side of the fence.

And I think this last event that happened, which is Akeso showing efficacy—although, again, it’s a headline story—in terms of progression-free survival and OS in biliary tract cancer in China with ivonescimab, which is their PD-1/VEGF bispecific, obviously partnered with Summit in the US, kind of pushed me over the line to the positive side of the fence. I think something’s going on here that is different. It has to be something other than PD-1 plus VEGF.

Remembering that in IMbrave151—the Roche trial—Tecentriq plus Avastin failed to show any OS benefit. The Kaplan–Meier curve was like 2 lines on top of each other. Now, that was a PD-L1, it was Avastin, it was a little while ago, but it just didn’t work, and it was phase 2. But it was a randomized phase 2 of meaningful size, so it just failed.

Currently, the standard of care is durvalumab plus chemo. So here you show a benefit in a tumor that had failed before. Nobody’s running a trial with these bispecifics in the West in BTC. But it just gave me that little extra help to start thinking maybe we really do have something different going on here.

Sam, welcome to the club. That’s wonderful.

Took a while.

Yeah. Well, good for you for having the flexibility of thought to change your mind here. Look, I agree. This is yet another brick in the wall, right? We’ve now had multiple studies of ivonescimab working where you would not expect a PD-1 to work and where you would not expect a PD-1 plus a VEGF combination to work. So it’s getting really hard, I think, to make the case that this new class—the VEGF bispecifics, the PD-1/VEGF bispecifics—is not doing something that’s a little bit special.

And yet you’re right. The majority of our clients are still remaining kind of glass-half-empty in their views toward this drug. I don’t think anyone should be surprised if the HARMONi-3 study reads out positively. Of course, we need to wait another 6 or so, maybe 9 months for that data. But if that trial does work, it will be the clear and deciding variable, and this stock, Summit, is going to go through the roof because people are still so skeptical—much like Moderna shares have gone through the roof on similar entrenched skepticism.

5. EyePoint Tests Long Acting Care

Yeah. So there was a lot of regulatory news this week. We won’t get to all of it. A rough one was EyePoint; their phase 3 data missed the primary endpoint on maintaining vision in wet AMD, and the stock fell 70%. Graig, you cover the name. Do you think the reaction was justified, and do you want to take the other side of this one?

Yeah, thanks for giving me the opportunity to talk about EyePoint. It’s a name we do cover and one that we’ve historically liked a lot, and we still do. The phase 3 data were negative. The primary endpoint was trying to prove noninferiority versus the current standard-of-care treatment, which is Eylea 2 mg.

Remember, wet AMD is this blinding condition that mainly affects the elderly. There are probably over 1 million patients in the US. We have a very large and established anti-VEGF market that is about $15 billion in totality. In terms of branded sales, there are some very well-known brands in the space, but these treatments are given once every 2 or 3 months.

The uniqueness of what EyePoint is trying to do, as well as what a competitor company called Ocular Therapeutix—which I don’t cover—is trying to do, is introduce the very first maintenance treatment. They’re trying to get patients off treatments given once every 2 or 3 months. These are direct injections in the eye. Who wants that? What EyePoint and Ocular Therapeutix are trying to do is develop treatments that are given once every 6 months. It’s basically trying to relieve patients of that treatment burden and relieve the system of frequent visits to a retinal specialist’s office.

The data were negative. Daphne, as you mentioned, the stock is down about 70% or more in the time since. There is some controversy with the data, though. The company did acknowledge missing the primary endpoint, but they also identified 9 patients that they consider to represent a cohort of patients that skewed the data. Now, no one—including myself—likes seeing companies cherry-pick data, especially if it’s from a post hoc analysis, let alone an ad hoc analysis.

But there were definite signals of efficacy, with very strong data on secondary efficacy endpoints. The drug generally seems to be well tolerated and safe. There is a second bite of the apple, though, and while the market has spoken, the second phase 3 set of data is expected in October. If investors had completely written off this drug, instead of the stock being down 70% to 75%, it would probably be down 90% or so. I think that is a reflection that some investors are still potentially optimistic that the second trial will work.

It is a large study. Each of the studies was over 200 patients, and we’ll just have to see. There is precedent in ophthalmology: the FDA has approved drugs even though the standard is 2 positive phase 3 studies for wet AMD or other retinal diseases. There are 2 precedent cases where the FDA actually accepted and approved 2 products. One was the Apellis Pharmaceuticals product for geographic atrophy, Syfovre. The other, more recently, was for a small biotech called Outlook Therapeutics, which got a branded Avastin approved.

So we’ll just have to see. It’s still an interesting one. It’s a name that we still like, but we completely understand if the market and investors have spoken and have, for the most part, voiced their skepticism that the second trial can work. But we’ll see.

Yeah. Thank you. So another story that’s generating a ton of discussion is data from AstraZeneca and Ionis. The CARDIO-TTRansform study, presented at ESC this morning, showed that their ATTR cardiomyopathy drug added no cardiovascular benefit on top of a stabilizer. While it’s not Alnylam’s data, it seems to be impacting them, as it raises the question of whether gene-silencing drugs meaningfully provide benefit over oral stabilizers at all. So there’s a lot of discussion about this. Eric, I don’t know if you had a chance to look at this one and if you have any commentary.

Yes, the CARDIO-TTRansform data were presented at ESC today and also published in The New England Journal of Medicine, so the full dataset is now available. We knew this trial had failed because the topline results were announced, I think, back in June. This study did test eplontersen, an antisense molecule from AstraZeneca and Ionis, on top of a population that, for the most part, was on a stabilizer—mostly tafamidis from Pfizer. I think about 80% of the patients in the study were on a stabilizer.

What you saw is that when you add a silencer on top of a stabilizer, there was no benefit. In fact, patients on the combination did a little bit worse. So, number 1, that was surprising. Perhaps we didn’t expect to see massive benefit because stabilizers certainly are very good drugs. Don’t let the stabilization moniker convince you that somehow a gene silencer is necessarily better than a stabilizer. Stabilizers have been shown to be very, very successful on their own at preventing death and cardiovascular morbidity. So it’s not necessarily shocking that we didn’t see massive benefit, but it was surprising that we saw potential harm.

I think that was the number 1 conclusion. Then, of course, today, as you referenced, Daphne, everyone's trying to figure out what this means for the silencer class. Despite the wonderful name of gene silencing, does it really do much, if anything, on top of a stabilizer, which most patients are on today?

Our friend John Maraganore would certainly argue that this dataset today from CARDIO-TTRansform is very specific to an antisense molecule, which is eplontersen, and it does not necessarily have read-through to vutrisiran. Vutrisiran, of course, is Alnylam's RNAi-based therapy for ATTR, and I think there's some validity to that. We just don't have as much data on vutrisiran in this setting on top of a stabilizer.

There had been a fair bit of use in the commercial setting where patients on stabilizers were adding these silencers on top, in particular vutrisiran, which is commercially available. I think, for better or for worse, doctors no longer have any evidence to do that. I would expect that we're going to see less combination therapy in the market until proven otherwise. But anyone else, please feel free to comment here.

That's one that's got very active discussion. We shared some posts, and maybe we'll share some more. You did a really good summary here.

6. Amylyx Stages a Comeback

Another story that generated a lot of excitement last week was Amylyx. We were out last week, and we can come back to that one. There was positive data, and then that was followed by an upsized $500 million raise.

That one is really interesting, I think, also in terms of the company and its journey, and the management team, who gained, in my opinion, tremendous credibility when they shut down their previous program and reported on it honestly. I'm really happy for them and would love to have Graig walk us through what happened there.

Yeah, thanks, Daphne. Amylyx Pharmaceuticals—many people might remember this company as an ALS-focused company. It's been a neurodegenerative disease-focused company. They brought a drug to market several years ago called Relyvrio.

We know how awful ALS is. We don't have very many treatments at all, and the treatments we have are modest at best. It's just a huge unmet medical need. With a lot of fanfare, several years ago, Amylyx was able to get a drug approved based on positive phase 2 data. The drug was called Relyvrio, and it was a conditional approval.

The company launched the product. It had a very sharp uptake, and I think it was annualizing at close to $400 million. But there was another, confirmatory phase 3 study called the PHOENIX study that was ongoing. In March 2024, that study read out negatively.

As you mentioned before, the co-CEOs—and it's a remarkable story—were 2 classmates in college who, in essence, thought up Relyvrio while in college and remarkably got this drug approved. But when the confirmatory study did not work, they took the high road. They pulled the drug off the market and earned high praise, I think universally, from market observers for that courageous decision, when typically you might see biotech companies resist at all costs going down that route.

The company did reinvent itself and brought in an asset called avexitide. This is a GLP-1 antagonist. It's not an agonist, as we all know from the obesity headlines, and it's for this rare orphan condition called post-bariatric surgery-related hypoglycemia, for which there are no FDA-approved drugs. A phase 3 LUCIDITY study read out last Tuesday.

The stock had been running up into the data, and many times the market interprets that as confidence that the trial will work. In this case, it actually did work, and it worked remarkably well. The p-value on the primary endpoint had 4 zeros before it. It might have even been 5.

The drug was able to reduce the rates of level 2 and level 3 hypoglycemic events. These are very serious hypoglycemia events, which could make a patient lose consciousness. Again, there are no approved therapies.

The stock reacted quite nicely. Leading into the data, the stock was in the 20s; it's now closer to the 40s. With that in mind, they were successful in raising over $500 million. Kudos to the Amylyx team there, and we'll just wait for approval.

Yeah, it's a great story. I'm really happy for them. Eric, you flagged a story that I think points to a general thing that we've been seeing with Generation Bio. They had some draft posters for 3 studies leak out early via an EDGAR filing ahead of the embargo for a conference.

This is something we're seeing a lot. We're seeing these leaks in different areas. Do you want to talk about this one and then maybe zoom out as to how often these are happening and any implications?

Yeah, sure. I'll give it a shot. It does seem like, every 3 or 6 months now, some medical conference is breaking its own embargo by maybe mistakenly posting or allowing investors to access information ahead of the embargo.

In this case, that's exactly what happened. I think we woke up on Tuesday and Generation Bio stock was going a little bit wild. It was up about 15% or 20% at one point, and news came out that an abstract that was to be presented at the European Respiratory Society meeting, ERS, was available. A few of our investor clients had access to it.

The data in the abstract were honestly not that remarkable. They were about what I would have expected, but perhaps because they were selectively disclosed, it took on a bit of a life of its own, and the stock reacted quite meaningfully. The next day, the company did put out an 8-K through EDGAR saying, “Here are the abstracts. We know they were leaked, and now everyone had access to them.”

The stock almost immediately came back down to earth, giving up its gains. For the most part, no harm, no foul, except that it was a bit of a fire drill, and there could have been some selective disclosure that cost some folks some money and allowed others to make some gains.

I don't know why these medical conferences are having so much trouble protecting their own data and information, and their own URLs and websites. I don't know; maybe the others have a view on this. It's annoying for all of us in this space to have to go through this.

We want a fair playing field. I think all investors prefer full, fair, widespread disclosure, and the fact that certain organizations—maybe they're not as sophisticated or attuned to the needs of investors—can't get their act together is just unfortunate. I'm happy to have the others chime in on this.

Yeah, I remember this happened also with Pfizer, I think at ASCO, about a year ago. Anybody else want to comment? No? All right.

We've got a bunch of other news stories. I don't know if anybody wants to jump in, but we have a number of different things that we still have to get to. Let me see. We have AstraZeneca discontinuing a phase 3 trial. We have REGENXBIO. We have Ultragenyx and Takeda.

Yeah, maybe I'll jump in because I wanted to comment on a couple of approvals that we saw in the space. One in particular that just recently happened is an approval for an anti-FcRn antibody-based treatment that J&J calls IMAAVY. I believe I'm pronouncing that correctly.

IMAAVY was approved for a second indication. This is a drug that was first approved in 2025 for myasthenia gravis. For those who are following the MG space, we're all very aware of the remarkable success that argenx—a very successful European biotech that I used to cover some time ago—has had with the launch of Vyvgart, which is now approved in multiple indications.

Vyvgart, remarkably, had reported sales in 2025 of over $4 billion. That was the first anti-FcRn antibody that was approved. There have been 2 others approved since then, with J&J's IMAAVY initially approved in 2025 for myasthenia gravis.

But they just got an approval for an indication called warm autoimmune hemolytic anemia, or wAIHA, as I will call it for short. That is the second indication for IMAAVY. J&J hasn't disclosed sales of IMAAVY since the drug was approved. It was approved last April for myasthenia gravis, but this adds a second indication that builds on another product getting approved as well.

So now we have 3 anti-FcRn therapies. It has been a very interesting and well-followed space among investors. Roivant, through its Immunovant company, has an anti-FcRn. They've had some mixed success with their anti-FcRn efforts, but it is an important and, I think, exciting new mechanism of action. I wouldn't be surprised if there are others behind it.

And with that said, it's always great to see a treatment for a condition for which we haven't really had treatments approved previously. So kudos to Johnson & Johnson on getting IMAAVY approved.

Yeah. On the topic of Roivant, their Priovant subsidiary just got FDA approval, and that's a nice win for Roivant and our colleague, Matt Gline. So what are your thoughts on that one, Graig?

Yeah. So that's a JAK1/TYK2 inhibitor for dermatomyositis. I don't know the condition, but I think it's also the very first FDA-approved therapy for that condition. It's an oral small molecule. The JAK/TYK2 inhibitor class is one where there's been very good commercial success, but the JAK inhibitors do have a black box warning for cardiovascular complications and blood-clotting complications.

With that in mind, it's always great to see a brand-new product. Again, I don't know this particular one—I'm assuming it's a rare orphan disease. But certainly from a Roivant perspective, it's great to see them get a drug approved, and I'm sure it will be very welcome by the medical and patient community. But kudos to the Roivant team there.

And the other thing to add on top of Graig's comments there: Brepocitinib did get approved with a black box, so it is similar to other members in the class—the JAK class, that is. But what's different about it is the pricing. I know we just talked about Daraxanras[?], BRESRIEK[?], and Rasankue[?], and the very premium pricing at which they came out. Brepocitinib is priced at a little over $400,000 per year. That's probably 2 times or more the higher pricing than the nearest JAK inhibitor.

So yet again, another example of a new drug coming to market being priced at a premium. Potentially, at some point, this is something that the system is going to need to figure out whether or not it can handle.

7. Drug Pricing Tests Industry Credibility

Yeah. I wonder what goes into it. I think there's obviously the commercial opportunity and the ability to generate revenues and all of that, but the blow to our industry from something like this, I think, is really significant. During a time when it feels like the industry is finally climbing out of a lot of negative sentiment, it's not helpful at all.

I don't know if anybody wants to talk more about pricing. We only have a couple of minutes left, so I would suggest we keep it open for the next few minutes and just talk about general topics as we wrap up.

I'm going to comment just on pricing. I didn't know what the pricing was, and again, I don't know dermatomyositis very well, or what patients experience and the severity of the disease. But for those of us who are observing approvals, companies launching new products, and the pricing approaches that they're taking, I would agree on some level that it is serving as a little bit of a black eye to the industry.

I don't know what the median household income is here in the United States, but it's certainly nowhere close to $400,000 a year. Sure, insurance picks up a lot of it if you do have insurance, and not everyone has insurance. But even if it's out-of-pocket, the amount that someone has to come up with is tough.

Obviously, companies do offer patient assistance programs, and that's very helpful, and I think that is a credit to our industry that we do that. But bigger picture, there's the pressure on biotech companies, many of which are publicly traded and have investors who are looking for a return on their investment.

As Eric and I do, we build out our models. We project revenue, take assumptions on peak market share and pricing considerations, and try to be thoughtful about the unmet medical need. I'm sure companies are as well. But it seems more and more that these new drug approvals are coming at more premium pricing versus what we might have assumed.

Companies usually don't say what they're going to price a drug at until the drug is actually approved, because you need to see what the label is, and you need to know what you can claim. We talked about Amylyx before with their post-bariatric hypoglycemia drug, and we initially had a $200,000-a-year base-case pricing assumption.

But if we looked at a more recent analysis that we did, and looked at the last 8 or so rare endocrine disease drugs that got approved, the average is closer to $280,000 or $285,000. So we just said, "Look, we don't know what they're going to price this at, but if we just took the average, we're now closer to $300,000." I want to make sure there's good market access for patients, but pricing is very challenging.

I'll just jump into that conversation a bit. Remember, I sit in Europe, where we're very price-conscious, and quite rightly so, because we don't have endless GDP. Most of the countries in Europe are public healthcare systems. There is some insurance if you're lucky enough to be able to pay for it, but not across the board.

So the issue ends up being that I do wonder—I know this sounds a bit Machiavellian to a degree—whether some pharma companies or biotech companies think, "Well, this is what I need in terms of revenue. I'm going to divide it by the number of patients and assume a relatively okay penetration. That's what I need to sell it at to get to my number." I can't imagine any other way.

I don't want to have a go at the TAR-200 from Johnson & Johnson. It's a great drug, a great product, because it's a formulation for non-muscle-invasive bladder cancer. But I can't imagine how they came up with a—I don't know—$650,000-a-year or $700,000-a-year price for this.

Aside from, say, thinking they've got a $5 billion market that they want to get to, or sales they want to get to, how many patients are there? I know that sounds probably not real, but I can't imagine how you get to that number for that sort of price. And nobody cares about what ICER says or anybody like that, but those are just crazy numbers, right?

Well, I will say, Sam, as someone who spent time on the corporate side at Biogen and AbbVie and had the benefit of seeing how the sausage is made, of sorts, I mean, companies do try to be thoughtful about the market access and pricing strategies that they take. I know they hire third-party consultants to try to understand the cost of the medical system.

And look, many times companies are bringing out innovation. They are improving on the standard of care. If you can—and this is every company's responsibility—prove to the payers that what you're bringing in terms of your new product does represent an advancement to whatever's out there now, and if you can find a way—and it's up to companies, again, to demonstrate this—to save the healthcare system money in the longer term, then I think companies can craft a very objectively thoughtful and rational pricing strategy that can be justifiable.

Again, the rubber will hit the road because healthcare and drug costs to this U.S. system are, in my opinion, a ticking time bomb. But we'll just have to see how all industry participants are able to figure this all out.

Yep. So our industry is balancing the best interests of patients with the fact that you need to raise money to be able to bring these drugs to patients, and that whole business element. But I think this is a great discussion, and we'll continue it next time. We're out of time. So thank you all.