第198期｜2026年10月2日

You're listening to "Biotech Hangout," a live and unedited weekly discussion of all the latest news in our industry with a group of biotech leaders and experts. I'm Graig Suvannavejh, and my co-hosts today are Sam Fazeli, Eric Schmidt, and Brian Skorney. For more information about our hosts and guest speakers, or to listen to the most recent episode, please go to biotechhangout.com. So happy Friday, everyone. It's the first Friday of October—just 3 more months until the end of the year. Through the first 9 months of 2026, I'd say the year for biotech continues to be generally a good one.

Our show today will be structured as follows. We'll first revisit where we stand on the public biotech markets. Next, we'll discuss this week's BD deals, other company-specific news, and some more notable data disclosures, and then provide, hopefully, a concise review of recent higher-profile medical conferences and perhaps touch upon some upcoming medical conferences in what typically is a very busy fall medical conference season.

1. Biotech Outperforms The Broader Market

To start off, let's talk about biotech sector performance through the first 3 quarters of this year. At a high level, generally speaking, we continue to have, in my opinion, a very good year in biotech, and by that I specifically mean the public markets. The XBI, which is an ETF, is up 27% for the year, meaningfully ahead of the XLV, which is a broader healthcare ETF, up just 7% year to date.

Bigger picture, when we think about investing in the market here in the U.S., the XBI is handily outperforming the S&P 500, which is up 13% year to date, and even the tech-rich Nasdaq, which is up 17% year to date. That said, it has been quite choppy over the past couple of months. Recall that we hit a high in the XBI in late August at the $169 level, which means we are down about 9% or so since then.

While I think overall biotech fundamentals are very much intact, given increasing macro uncertainty—with the potential for rising interest rates here in the U.S., continued risk of rising energy prices, and geopolitical uncertainty more broadly speaking—I think it's important to be mindful that the higher-reward, but also higher-risk, biotech sector could be impacted.

2. The IPO Window Stays Open

I'm just going to touch upon the biotech IPO market. By my unofficial count, I think we're at 23 biotechs that have made their debut this year. Maybe I missed 1 or 2, but we're almost at 25, with several more coming, including T-Rex Bio, Ambic Therapeutics, and City Therapeutics, a company we've mentioned on a previous Biotech Hangout podcast earlier this year.

It's looking like we could easily end up somewhere in the 30-plus range for U.S. biotech IPOs, a bit above, admittedly, my prediction on this podcast sometime late last year. While I won't comment that much further on this, we're also seeing new private companies coming in the form of reverse mergers. I don't have the stats in front of me, but certainly 2026 seems to be setting up to be a banner year for reverse mergers.

I do want to double-click on my biotech IPO market comments, and I want to bring in Eric here, who has some comments on the recently pulled Oura IPO and its potential ramifications. Eric, do you want to comment there?

Thanks, Graig, for that overview. Maybe first, a slightly different view on the XBI overall. As you noted, we've essentially treaded water for the last 3 months. I think the XBI was essentially flat in Q3.

But that flattish performance, in many ways, belies what's going on underneath the XBI in terms of its components. In particular, I think all of us who talk to the buy side have been feeling their pain of late because it's really the under-owned stocks—in some cases, the heavily shorted stocks, either diagnostics-oriented names that are in the XBI or names like Moderna, Iovance, and Summit that very few of our specialist fund clients own—that have propped up the index and maintained that kind of treading-water pace of performance in Q3.

Meanwhile, the companies that everyone owns are just getting hammered. There was actually something from Morgan Stanley out this week—I guess they're a prime broker to many of the specialist funds in our sector—and it showed massive dispersion in performance across good-performing names, such as the names I just mentioned that have been heavily shorted, and stocks that generally are much more broadly owned by our clients in biotech.

It all started, of course, with the Moderna vaccine news back in August. We're treading water, coming down the home stretch here with a pretty good year under our belts from an XBI perspective. But it has been a really tough last 6 months for many clients. I'll pause there. I don't know if Brian wants to add on, or if anyone else wants to add to that thought.

No, not really. I think that encompasses it well. I would just say my prediction for the number of IPOs back in December on this podcast was 23. I think Paul was at 15 and Josh was at 50. So no more IPOs. We've got to stop here so I can be right.

Very funny. I think what Graig did want me to comment on—so apologies for that sidebar—was the Oura IPO. Obviously, this is the maker of the ring that people are using to measure sleep, exercise, and other biometrics. Oura is a tech company that probably isn't very related to biotech in any way, shape, or form.

They had tried to go public earlier this week. I think they were supposed to price on Tuesday, and they were looking to raise over $2 billion but ended up pulling their IPO. Is that a signal to us in biotech? I did talk to one of the bankers involved with that transaction. Honestly, he doesn't think so. He thinks there was a deal to be had just at a slightly lower price than maybe the company would have liked.

In the tech world, it's either go big or go home. He's not seeing a lot of read-through into our space. That said, we've seen somewhat mixed performance from the 20-odd companies that have gone public, and many of those companies have taken it on the chin over the last 6 weeks or so as that index performance has diverged across names that were owned or not owned by specialist funds.

You may be right, Brian. You may be spot on, and we'll see what the next 3 months brings.

Thanks for that commentary, Eric. Sam, I think you wanted to mention something that had to do with Moderna, which could be an important thing to highlight. But go ahead.

3. Moderna Faces A Valuation Test

If you just piggyback on what Eric just said, a lot of this issue that's been caused for investors has to do with Moderna because of the weight it has in the XBI, and it's a very under-owned name—or has been, at least, by specialists. Of course, this morning we got the news that it's potentially being added to the Nasdaq-100.

I thought this might help drive the stock a little bit further, but it's flat on the day. Maybe it's because it's much more important that it's in the XBI than that it's representing the Nasdaq-100. I don't know.

It's also possible that the pressure is related to at least 1 solid downgrade to a sell recommendation in the past week, so that might have brought it down. But the sell recommendation did what most people felt already, which is that there's a lot being assumed in the current valuation, as reflected in a lot of investors' views.

The company needs a lot of success in its various upcoming trials, and the next one due is the RCC, or kidney cancer, data. I didn't check today. Are we at a $70 billion market cap at the minute? We will talk about Sanofi later today, and that's sitting at just around $90-odd billion.

On the one hand, you have a company with such a deep business as Sanofi—or bring in Regeneron, if you like, into that equation—and another one that's sitting at this market cap. That's what I think a lot of people are feeling in terms of the valuation setup here.

Going to RCC, I just want to highlight something that I think different people, when I talk to investors, read differently. When Dean Li, head of R&D at Merck, spoke at the Morgan Stanley conference, I'm not sure he was characterizing the RCC trial—the kidney cancer trial—in necessarily the best light possible.

I think he was talking about it being a lower TMB, meaning tumor mutational burden, in the tumor and still unresponsive to IO, and referred to this and the bladder cancer trial as bookends on the range of data that they would expect.

I don't know if that was helping me get more convinced or less convinced about the RCC readout that's coming out, the kidney cancer readout that's coming out. I read it as negative. Others were just saying that this is Merck, which is always conservative and never really pushes too hard until you get the data.

So let’s see what happens there. Perhaps some of these headwinds are not helping them perform today on the back of this Nasdaq-100 news.

4. Big Deals Rebuild Biotech Pipelines

Thanks, Sam. We’re going to pivot now to deals that we saw this week, and 4 deals in particular that we’re going to talk about. We’ll start off with Brian on news of a new collaboration between Regeneron and Sanofi in the I&I space. Then we’ll talk about 2 deals announced this week between Summit and AstraZeneca, with both Eric and Sam commenting, and then we’ll have Sam finish our deals section of the podcast by commenting on Novo’s new partnership with Chinese biotech Hengrui. With that, Brian, I’m going to hand it over to you to discuss Regeneron and Sanofi.

Yeah. This was a pretty big deal. You wouldn’t know it, really, by looking at the stock moves for either company. Sanofi and Regeneron have been in a partnership dating back 20 years now, when Regeneron was an unprofitable company. They did this antibody collaboration that really became the hallmark, in many ways, of Regeneron outside of EYLEA.

The major product that came from this collaboration is DUPIXENT, which we all know is one of the best drugs in the world and one of the top-selling drugs in the world. It’s been a behemoth and a big moneymaker for both companies. As we see with all companies, as big products get to maturity and you get closer and closer to LOEs, everyone asks, “What are you going to do next?” Both of these companies have faced that investor pressure over the last couple of years to outline a better DUPIXENT lifecycle strategy.

It’s been interesting because this relationship, which started really well and was a hallmark biotech deal, soured in the past couple of years when Paul Hudson was CEO at Sanofi. They ran into a pretty significant issue in terms of how DUPIXENT was being sold, how Sanofi was booking sales, and how it was leading payer negotiations. Regeneron felt that some of the deals Sanofi was striking around discounting were more favorable to Sanofi than to Regeneron, and that led to a falling-out.

People really had questions as to whether both of these companies, which are in the same position and need an answer for DUPIXENT as it gets closer to the end of its lifecycle, were going to permanently fracture the relationship or move forward as a collaborative group. It seemed like both companies were evolving toward announcing something like this. I actually thought it was going to come when they had back-to-back earnings calls last month. It didn’t happen, but they announced this sizable deal to extend the relationship they’ve had through another 4 antibodies, all related to the same pathway.

There’s a lead one, IL-13, that’s in the clinic, and they’re planning on moving into pivotal studies in the not-too-distant future. There’s an IL-13/IL-4Rα bispecific, an IL-4 receptor alpha antibody that they called the “Super DUPIXENT,” and another long-acting IL-4Rα antibody. All of these are on the heels of companies that have started developing longer-acting antibodies to try to get less frequent dosing.

DUPIXENT is dosed every 2 weeks or every 4 weeks. We know there are a number of companies right behind it, chasing down Phase 3 studies with much longer-acting drugs and pushing toward dosing every 3 months or every 6 months. Regeneron and Sanofi are doing the same thing. Given that the lead one is in very early-stage studies and the other 3 are just moving into the clinic in the next couple of months, people still have questions: How rapidly can they move these programs forward? Can the combined might of Regeneron and Sanofi leapfrog into pivotal studies and get through them to ultimately reach commercialization, switch ahead of the competition, or switch ahead of the LOEs around DUPIXENT?

It’s a pretty sizable deal. It’s $1 billion up front to Regeneron, with up to $7 billion in future milestone payments. The companies will continue sharing P&L on a 50/50 global basis. That’s it.

Thanks, Brian. It’s just another reminder to me that the I&I space continues to be a super-hot space. We’ve got so many public and private companies working in I&I. I think it goes back to this concept of pipeline and product, large markets with unmet medical need, and the dollars that are going into the I&I space, which continue to be quite large. Let’s see what comes out of that collaboration, but there are also a lot of exciting things coming from smaller companies as well.

Hey, group.

Yes.

Just a very quick one on this. The stock price is down for Sanofi. I think Brian did mention this, and I wanted to share what a friend on the buyside said to me this morning: “The deal was like an old married couple driving their car, taking their foot off the gas, and coming to a stop in the middle of the road in silence. The end.”

A lot of us—I don’t know if I want to endorse that or not—but it was a funny way of looking at it. I think a lot of the buyside is sitting there thinking, “Well, we knew this was coming, and it came. Okay, that’s it.” I think there are some people who are thinking that maybe, at least on the Sanofi side, Sanofi paid a bit too much. We had loads of questions on it this morning. Maybe they overpaid. Who knows?

At the end of the day, I think it’s the right thing for them to have done, as you’ve said. One other thing I wanted to highlight: The CFO on the call said that they believe they would be pushing out generic competition a few years beyond the 2031 composition-of-matter date. We published the results of our patent group’s analysis of the DUPIXENT patent back in May, and we think it can be pushed to late 2037 from 2031. It’s interesting that now the CFO—or at least the company—is beginning to potentially hint at that. If anyone wants to have a look at that, you can contact me separately.

Okay. Thanks, Sam. I’m going to have the conversation pivot to 2 deals between Summit and AstraZeneca this week. The first was a strategic equity investment by Astra and a collaboration. Then, crossing my news wires this morning when I woke up, I saw an extension of a collaboration where Daiichi Sankyo got involved with AstraZeneca and Summit. Eric, do you want to lead off on that, or should I turn it over to Sam?

Yeah, sure. Let me take a crack at it. I guess if Regeneron and Sanofi are like an old couple cruising to a slow stop, maybe I’m hopeful that Summit and AstraZeneca are a young couple on a raging honeymoon. We’ll see.

There’s a lot of excitement in this space around the VEGF/PD-1 bispecifics and ivonescimab. The Summit-Akeso product continues to lead the charge here. By now, our listeners have probably seen the headlines: Astra is making a $2 billion equity investment here. In addition to that strategic equity investment at a premium, which does give Summit a major—and I’d say much-needed—cash infusion to keep up with the Joneses as this bispecific class becomes increasingly competitive, Summit is also gaining access to AZ’s pipeline of some very interesting ADCs, including SV, their CLDN18 targeted drug.

As we saw today, there’ll be other combination partners in the mix. AZ is generous enough to sponsor many of these trials, allowing Summit to begin to benefit from the pharma company’s established development scale. That’s another thing that I think is very valuable and was potentially lacking at Summit.

The stock was up almost 10% this week. Honestly, the thing I found most interesting from a Summit standpoint was that just a few months ago, this company tried to raise about $500 million in the public markets.

I remember that. Mm-hmm.

They were looking at a lower equity valuation, and they came up short. So here’s AZ giving them $2 billion at a premium, along with all this access to combination drugs and clinical expertise. I think that just begs the question: Has Astra seen any public data?

Obviously, we’re looking forward to one of the bigger binary events in the industry, the HARMONi-3 readout, which is going to come late this year from a PFS standpoint and then early next year on OS.

What Summit tells me is, no, definitively not. The public markets have seen everything that Sanofi has seen. So it just seems like there’s a bit of a disconnect between what a strategic is willing to pay and what an investor is willing to pay in terms of the equity value here. But, Sam, over to you.

Yeah. So let me take the other side. First of all, I don’t think you can paint this in a negative way. But I have to tell you that during the past 4 days, I’ve had so many varieties of theses thrown back at me from investors. It just shows how unsure people are about this potential outcome, at least the near-term HARMONi-3 readout. You and I can talk till we’re blue in the face, but I think there’s still a lot of uncertainty about how we think it’s going to pan out.

So let me read it from the other side. These are all pontifications, by the way. I have no idea what AstraZeneca was thinking. But AZ wanted to have some skin in the PD-1/VEGF game. Remember, there was a rumor about a year or so ago that there was a $15 billion deal—or at least, that Summit wanted or didn’t want it and Astra wanted or didn’t want it—and nothing happened, right?

So here we are. You’re looking around. A whole bunch of these deals have come out. Four OS readouts have come out. A variety of people are running with PD-1/VEGF or PD-L1/VEGF. And so Astra wanted to have some skin in the game. The most advanced asset out there is obviously ivonescimab.

Summit was running out of cash. I mean, I don’t know where they were on cash, but they’re definitely running out of cash now. There’s only so much that Bob can keep funding the company, and I suppose at one point it would end up being privatized if it carried on. The only way for Astra to keep them alive and viable is to give them the cash so that they can continue to operate and do the deals, which is where I think a lot of people go, “Hmm, so how much of a tick in the box is that?” That’s what I keep hearing back, right?

Anyhow, Astra did that: 10% company ownership now. And the deal allows AZ—this is the next point—to test out a few hypotheses without really committing much more than $2 billion. I mean, it’s not a small number. I mean, I can’t afford that, right? And so they get 50% or more of the R&D funded by the cash they’ve given Summit, right?

The difference with these deals is that I track—we track—we have a deals database that we create ourselves. I went back and looked at a whole bunch of these supply and collaboration deals. I couldn’t find one—not that there isn’t one out there—where the provider of the drug, say, if it’s Merck with Keytruda or whatever it is, is actually paying anything for the conduct of the R&D or the trials.

Here, though, if you look at it, they are funding some of the trials. So in the GI one that they announced on Tuesday, it’s 50-50, I think, or they’re both putting money in. I don’t know what the proportions are. And today, Daiichi, Astra, and Summit are investing in the trials. That is a novel thing that I’ve not seen very often. I’m sure folks on Twitter or X will tell us this deal and that deal happened, but there aren’t many.

The other thing I think people got a bit confused about was this memorandum of understanding. I haven’t seen that phrase used in partnerships and licensing deals very often, and I think it just sounded as if Astra was saying, “Look, we’re interested in doing these things. We’re not quite sure. Let’s just sign this deal and see whether we can get something done.”

And of course, 4 days or 3 days later, you get the Datroway news today, which is the next one. So I suspect we’re going to hear a few more in the next few months in terms of the combinations. For me, this is a positive for Summit, clearly. You can’t argue with $2 billion in the bank and a partner called AstraZeneca.

But the market, I think, is going to have a tough time making a bet until HARMONi-3 headline news comes out. And by the way, Eric, some folks are telling me they think it’s going to be delayed till next year, and others are telling me it’s any day now, which—I love the diversity here.

Yeah. I mean, just on that one point, it can’t be any day, and it’s something that I did talk to Summit about. I think this would be very, very awkward for both Summit and Astra if we turned around next week and got the news on HARMONi-3.

Right.

So my take is, you’re right, Sam. It could be delayed potentially late this quarter or maybe even early next year.

And Eric and Sam, do you want to comment on the newest news coming out of that collaboration, where now Daiichi Sankyo is going to be contributing its TROP2 ADC?

I’ll make a quick point. The headline indication they were going after is TNBC, which is where I think we’ve seen some pretty decent data. In TNBC, we’ve seen good data out of BioNTech with their PD-L1/VEGF bispecific. So the theory is kind of looking positive in terms of combining those things.

I think they nodded to non-small-cell lung cancer, but of course Astra has got AVANZAR reading out soon. I don’t know whether they wanted to avoid people thinking—because that’s one of the other things I’m hearing—that Astra is doing this because they know AVANZAR is a fail, which, again, I doubt is actual knowledge, because if they knew that, they would have to announce it. So I think it is nice to see, and then let’s see what other indications they expand into. Eric, anything?

No, nothing to add. I think you covered it, Sam. Look, these are just to maybe emphasize a point you made earlier. These are absolutely high-risk trials, and it is certainly possible that HARMONi-3 may not work.

But boy, from a Summit standpoint, if this drug class is the next PD-1 class, is the next backbone of immunotherapy, is potentially addressing not just lung cancer, but triple-negative breast, renal, BTC, and other indications where we’ve seen very good Phase 2 data, there’s a lot of upside in Summit shares. So this is, as we’ve called out before, potentially the biggest binary event I’ve ever seen in the history of biotechnology.

Oof.

That’s behind us.

I thought that was Moderna. Well, that’s behind us. That’s fine.

That’s behind us.

Can I just add one little thing here in terms of HARMONi-3? The key thing that I think everyone’s going to be looking for is a hit on PFS, obviously, and a directional comment on OS. If they come out and say OS is immature, I think people will take that as them not seeing a directional positive in there. I think the words in there will be very, very important whenever that press release comes out.

I agree 100%.

And then, Sam, maybe a quick comment on Novo-Hengrui.

Yeah. I think what I’ll do is, Graig, wrap it into China deals. We have 3 China deals this week.

Novo-Hengrui: $300 million upfront, $2.6 billion for HRS-1596, a Phase 1-ready GLP-1/GIP dual agonist. Novo used to have one. They haven’t been in this dual-agonist world. They had one, and it kind of disappeared off the pipeline. So here they are with a Phase 1-ready asset that is still preclinical. It’s taking them into the world of completing that portfolio of approaching obesity through these different indications, which of course is tirzepatide for Lilly.

Merck Cybranch: $400 million upfront, $2.13 billion total, also with a Chinese company. SPR-2015, investigational and preclinical again, is an oral KRAS G12D inhibitor. So really going for pancreatic cancer, and possibly the second of the mutations in lung cancer too, in terms of KRAS. At some point, taking on Revolution Medicines. But again, an interesting China deal.

And then Novartis-Abogen today: $575 million upfront, up to $7.2 billion, and it’s for ABO-2203, as well as the program as a whole, which is an mRNA for a CD19/CD3 T-cell engager. We can one day debate why you need an mRNA to create an antibody, as opposed to just give the antibody, but let’s have that discussion another time. So, 3 China deals this week.

5. Rare Diseases Drive New Approvals

Thanks, Sam and team, for the great commentary on a lot of deals that happened this week. Next, let’s turn to new product approvals we’ve recently seen. And Brian, I know you wanted to comment on Mirum Therapeutics. This is a company that I really don’t know, so maybe if you could briefly introduce Mirum to our audience, and then discuss the company’s FDA approval of Xylurgitcertib, if I pronounced that correctly, which has now been branded as Atebrios for another mouthful of a condition to pronounce: fibrodysplasia ossificans progressiva, or FOP. Brian.

Yeah. Thanks, Graig. Mirum’s a cool little company. They IPO’d, oh God, maybe it’s pushing a decade ago, developing an IBAT inhibitor for pediatric cholestatic liver diseases. The hallmark of what IBAT inhibitors are capable of doing is interfering with bile-acid recirculation.

In these cholestatic liver diseases, the bile acids that build up and cause cholestasis have a number of negative liver effects, but the most profound symptomatic effect is you wind up with very severe pruritus.

They've moved in and have been very successful launching Livmarli in a couple of pediatric cholestatic liver diseases: Alagille syndrome and PFIC. They've developed another IBAT inhibitor that they're moving through Phase 3 and may actually have a regulatory submission next year in PBC and PSC. They've also been very smart about doing some small deals to complement their top line and bring in some late-stage products that are very interesting. So they're really turning into a nice little specialty pharma story here.

They did an interesting deal where they licensed this ALP2 inhibitor, now at Atabriyuz, from Insight. It was kind of surprising that this drug was under FDA review when they did the deal with Incyte. Obviously, Incyte is fully capable of commercializing products, but I think Incyte maybe felt it was too small for them to be very interested in.

FOP is the disease that they're targeting: fibrodysplasia ossificans progressiva, or FOP. It's a really severe, profoundly disabling, irreversible, life-shortening disease where soft tissue progressively forms bone outside of the normal skeleton, resulting in locked joints and severely restricted movement. There have been a few novel drugs approved here. One was approved 2 years ago and is marketed by Epson, called Sahunos.

Regeneron just a couple of weeks ago got approval for an injected drug, Pasatru. This is the third drug approved for this indication. It's a small indication—there are maybe 900 people worldwide with this—but it's very severe.

All of these drugs are now very expensive. Regeneron priced garetosmab at about $1.5 million to $2 million, depending on dosing. Mirum's drug is an oral drug, so they're pricing it at more of a fixed price of about $1.7 million gross. They're really pushing the orphan drug pricing model to very high levels.

Again, this is a very severe disease with very few patients. It's probably not going to be a huge indication, but Mirum has done very well making things a little more successful commercially in these under-the-radar indications that aren't big drivers of revenue for large pharma but have wound up being pretty meaningful to Mirum. We kind of like the deal. We were curious as to whether there would be regulatory risk here, but it seems to have a pretty clean label and a pretty good efficacy dataset. I'm pretty confident that they'll be able to perform decently well commercially.

Well, for a disease like FOP that has 900 patients worldwide, I think it's pretty remarkable that there are now 3 approved drugs. The rare-orphan model has at least been a success for patients, so it's great to see that.

I also wanted to briefly comment on news that came, I believe, late last Friday: an FDA approval for AbbVie's tavapadon, which, from a brand-name perspective, is now known as Juvmo and is approved for treating Parkinson's disease. There are several reasons I wanted to flag this news. First, we unfortunately haven't seen a lot of progress in terms of new treatments for Parkinson's disease, so this is very welcome news for the Parkinson's community.

Second, while the bigger unmet medical need in Parkinson's is, in my opinion, disease-modifying therapies that address the root cause of the disease, Juvmo is a new symptomatic therapy, as I'll call it. Unlike many other dopamine receptor modulators approved for treating Parkinson's symptoms, which act on the D2 and D3 receptor subtypes, Juvmo is a novel D1 and D5 dopamine receptor subtype modulator. So it is novel and differentiated, and perhaps it can bring some differentiated efficacy and safety there.

Third, and last, on the bigger picture, Juvmo came from AbbVie's $9 billion acquisition in December 2023 of Cerevel Therapeutics, which was a CNS-focused biotech. That was a very high-profile deal, as many of you may recall. The crown jewel of Cerevel was a drug called emraclidine, a novel muscarinic receptor modulator for schizophrenia and other psychiatric conditions.

Key Phase 2/3 data were reported less than a year after that deal was announced, and they were negative. That really set back the program. I think AbbVie is still working on emraclidine, but tavapadon, or now Juvmo, was always furthest along from a clinical development timeline perspective. It was kind of lost in the shuffle of all the market excitement around the muscarinics.

It's nice to see that at least AbbVie is able to get something out of that $9 billion acquisition. We'll see what happens with emraclidine or any of the other pipeline programs, but I thought that was something to flag on this week's hangout.

We're a little more than halfway through today's program. We're going to pivot to some new data coming out from various public biotechs. I'm going to turn it over to Brian again to discuss some new data from Dyne Therapeutics from the 31st Annual World Muscle Society Conference taking place in Hiroshima, Japan, and then additional news this week from Mirum, which we just spoke about and which came a couple of days after news of their FOP drug approval. So, Brian?

I'll start with Dyne. I think Eric may have some comments on it, too. They had data on their DM1 program at the World Muscle Society this week. This was more extensive data from the patients in their Phase 1/2 study who were on placebo. After 6 months, they were given the option to go on to treatment, so there are 8 new patients' worth of 1-year data here.

The long and short of it is that it's pretty consistent in terms of vHOT, which is the main measure people are focused on. That is a potentially submittable endpoint when the company reports registrational cohort data next year. The big focus is whether they can replicate that vHOT data.

The stock took a hit last month, and we talked about it on this podcast, when Novartis announced the failure of their DM1 program, Evidity. These 2 programs were on similar, parallel timelines and had a similar hypothesis about what they're doing. They're trying to knock down mutant DMPK utilizing muscle-targeted antibodies, or an antibody fragment in this case.

They've both shown mixed sets of data, but there has been a focus on vHOT. Both companies, in their Phase 1/2 studies, have shown an improvement in vHOT, which is a measurement of how long it takes patients to open their fingers. Obviously, the Avidity data, when they announced that failure, were very negative in investors' minds for Dyne. Dyne went down substantially because it brings up the whole hypothesis of whether you're getting drug to the target, whether the target is resulting in a downstream effect that's ultimately going to provide a clinical benefit, and whether it's measurable on these endpoints.

These are noisy datasets. vHOT is kind of a noisy endpoint, and a lot of these secondary endpoints can be particularly noisy, as we know with all of these muscle diseases. They can be highly variable. The dataset was not a game changer, but I think it reinforced that you continued to see improvements in vHOT when you moved these 8 placebo patients to active drug.

I think it's important as we start looking at next year's readout to determine whether there's a shot here or whether these programs are total write-offs at this point. I don't think the Street is giving a very high probability of success here, and certainly some caution is warranted. But given the value that has been attributed to DM1, which is a very big orphan indication, there would certainly be very meaningful upside if they come up with an approvable dataset this year. I think, again, the WMS data reinforces that there's plausibility to this card turning over and being a positive. Eric, I don't know if you had any thoughts on it.

Eric, you might be on mute.

My bad. Thanks for that, Graig.

It's okay.

Brian, I think we're going to agree on this one. I think the debate post the Avidity delpacibart etedesiran data, and the read-through of that trial to Dyne, is really about whether Avidity and delpacibart etedesiran failed because of the drug or because of the endpoint. Maybe it's a little bit of both, right? I think you're right to call out that vHOT is a subjective measure of hand opening and has a lot of variability.

I probably got more questions than anything on the comment that Dyne made: They’re seeing a pretty high degree of standard deviation on vHOT, or hand opening, and the baseline criteria for their pivotal cohort study. There’s going to be some noise in that endpoint; there’s no doubt about it. On the other hand, I don’t know if you feel this way too, but the more I look at the deldiseran data that we had from a year or 2 ago—the Phase I/II data—the more holes I see in it. Dyne has, one by one for the most part, filled in many of those holes, whether it’s mechanistic, some of the functional data they have, or even the vHOT analyses, which I think are a little more rigorous these days at Dyne. It seems like they’ve got a better data package. I wouldn’t be surprised if this did work, and I agree with you: If it does, the stock’s going to rip.

Maybe moving on to the other side of Mirum, we didn’t address this in the earlier comment because it was part of the regulatory comments, but they also had a very impressive data set in a Phase III study in hepatitis D virus, or HDV. We’ve seen a lot of different programs and targets for chronic treatment or chronic cure, and certainly hepatitis B and hepatitis C were pretty sizable opportunities. Hepatitis D is interesting in that it’s actually reliant on hepatitis B to replicate, so it’s a virus that is a coinfection. It’s much more progressive, and you wind up with much worse outcomes in terms of liver health when a patient is coinfected with both hepatitis B and hepatitis D.

Gilead does have a drug that just got approved in hepatitis D. It’s been on the market for a few years in Europe, but the FDA approved it a few months ago. It’s called Hepcludex. There are a couple of companies, Mirum and Vir, that are both pursuing a targeted therapy aimed at stopping or blocking the binding of hepatitis D to the surface antigen, which is what it relies on to ultimately replicate.

Both companies have shown very positive results. They show very rapid resolution in a large percentage of patients they treat in terms of ALT elevations. They show very rapid declines in hepatitis D RNA, and those seem to be durable across all the data sets we’ve seen in Phase II. Mirum announced its full Phase III data set for a study called AZURE-1, and 153 patients met the primary endpoint, which is a composite of virologic response and ALT normalization across 2 arms. Everything we’ve seen so far suggests that you continue to see benefit as patients are treated for longer.

Management also indicated that they’re seeing improvements in liver stiffness on FibroScan—real measures of liver health. We argue that ALT normalization and viral response are meaningful in and of themselves, but you certainly want to see those other measurements move positively as well. They’re waiting on another Phase III data set, and when they have that data set, they’re going to go to the FDA and file for approval. Hepatitis D is, again, probably the most severe version of viral hepatitis and has been a relatively poorly treated infection so far. But it looks like you have a couple of meaningful advancements here.

Okay, thanks, Brian. I’m going to briefly run through 3 data sets, 2 from companies I follow closely and then 1 in the gene-therapy space, and hopefully we can use that as a springboard for a broader team discussion.

On Monday, shares of Kodiak, an ophthalmology-focused biotech, more than doubled after the company announced positive top-line Phase III data for a combination of its lead asset called Zencuda, along with its KSI-501 drug, in the setting of wet AMD. I don’t cover Kodiak currently, but I used to cover it several years ago, and it was great to see the company report better-than-expected Phase III data after experiencing some setbacks a few years ago. I think, as Eric mentioned before, the buy-side community wasn’t positioned well for this data event.

The importance of these data, I think, is twofold. First, it sets up a potential brand-new challenger in the first-line treatment setting in wet AMD, for which I’ll remind you there are roughly 1 to 1.5 million patients here in the US. Wet AMD is the leading cause of blindness particular to those in their 60s and beyond, and it’s a market that has historically been dominated by anti-VEGF-based products, which collectively comprise a US commercial market of about $15 billion in product sales. Look to Kodiak as a potential disruptive entrant.

Second, it’s a reminder that we’re seeing a ton of innovation from biotechs, especially in ophthalmology, a space that has become a favorite of mine. We’ve got private and public companies in retinal, or so-called back-of-the-eye, diseases, but also private and public companies working on front-of-the-eye diseases. There’s just a lot going on in ophthalmology.

I also wanted to briefly mention remarkable data this Tuesday morning from an emerging company based in Southern California called Immix Biopharma. Immix is advancing a BCMA CAR-T therapy for relapsed and refractory amyloid light-chain, or AL, amyloidosis, for which there are no approved therapies. This is a condition caused by the abnormal buildup of amyloid light chains in the blood and then in the heart and kidneys, and it can lead to organ failure and potential mortality. It’s an orphan condition affecting fewer than 50,000 people in the US.

This Tuesday, we saw what I would consider stellar interim pivotal Phase II data for its NX-C201 product, where the company reported a stunning 89% overall complete-response rate in a trial of 45 patients. Not only does an 89% CR rate compare very favorably with current standard-of-care treatments, which give anywhere between 5% and 35% CR rates, but given that patients who are currently MRD-negative in the study—and keeping in mind that MRD-negative patients have been shown in this setting to ultimately convert to complete responses—the company is saying that it’s possible there could ultimately be a 98% complete-response rate by the time the final update from the study is expected in March of next year.

Immix was able to raise $125 million on the data, but in an atypical fashion, the company announced a follow-on financing concurrent with the data-news announcement that morning. Instead of the stock being able to move on that data throughout the trading session, with the financing already announced and the price set, this essentially choked off the ability for the stock to run on the data. Despite this fantastic news, the stock ended up closing down almost 10% on the day on what, in my opinion, was truly spectacular data.

That was really interesting, and maybe sometimes companies need to announce financings with data. My guess is there was a wall cross a couple of days prior, and given uncertain market conditions, they were just looking to lock down certainty with the financing. Investors who were long the stock on this data were certainly frustrated that the stock really didn’t participate in the good news.

Lastly, while I don’t cover the company, I wanted to mention 4-year Phase I/II study data from uniQure on its Huntington’s disease gene therapy. That product is called AMT-130. The 4-year data showed a 44% slowing of disease progression in Huntington’s disease. Interestingly, uniQure shares fell 37% on the day of the news and have fallen about 5% further. It appears that the stock weakness really boils down to the fact that the prior data update a year before showed that this gene therapy slowed disease by 75%. So that’s a pretty big diminution in the efficacy seen for its gene therapy.

I know the company submitted its BLA for approval last month and requested a priority review given the unmet medical need. As we’ve covered on this podcast on several occasions, this has been a very topsy-turvy story, so we’ll see how that review goes. I just wanted to ask the team: Gene therapy—the promise is supposed to be one-and-done, and we’ve got several gene products on the market now, but many are still in clinical development. What do you guys think expectations should be for a gene therapy? I’ll open it up to anyone who wants to comment.

I think the problem with gene therapies is that there are gene therapies that work very well and have provided profound benefits. But it’s a very complicated thing to get a construct that can get to the cells you really want to target and produce protein in sufficient quantities to move the needle.

In a lot of these diseases that are being targeted, they're frankly just hard studies to do, even if you are effectively replacing protein. We've seen a lot of data to suggest that we don't even know, even when you do show protein production, whether it's resulting in a clinical benefit or not. Sarepta is sort of the hallmark example of this: it's making microdystrophin in a meaningful amount, but it has not demonstrated efficacy on prospective endpoints in pivotal studies, right?

So I think there are a lot of question marks as to where we are in the technology. I think there's no question that, for hemophilia B, Bektez definitely works, right? If you need to make factor B in blood, you can do it pretty easily. They wind up not being commercially viable because there are so many good ways to treat that. But from a scientific experiment, I don't think anyone would argue that it's not doing what it needs to do in the clinic.

So we do have examples where it's very clearly working, and we're just moving in between trying to find the right pathways and the best constructs to be able to get targeted delivery and adequate expression. I think it'll continue to evolve. I think it's been slower than I expected. I've been covering a lot of these gene therapy names for a while, and I thought we were going to have more of a renaissance earlier. It's been harder, but science is a hard thing.

Thanks, Brian. Sam, did you want to comment, given where you sit and especially from a large-cap pharma perspective?

No. All I would say is that I've just had a pre-panel conversation with some VCs—I’m doing a panel with them—and they seem to be still quite gung-ho in trying to solve what Brian just referred to. Their expectation is that the science will eventually prevail, and you will get over these issues, whether through a vector, a gene construct, or a delivery mechanism—brain crossing, shuttles, et cetera—at least for CNS diseases.

So there seems to be still quite a lot of interest in trying to finance this. From a pharma side, I don't know. I suspect they'll go cold for a while. Pharma's story is usually hot and cold, and then somebody gets a hit and they all jump back in again. That's the only thing I can add here.

6. Conference Data Resets Expectations

Okay. We've got about 10 minutes left, and I'm going to have Sam and Brian split those 10 minutes talking about 2 conferences that just took place. Sam, do you want to start with WCLC, and then, Brian, I'll have you talk about EASD?

Yeah, sure. WCLC was obviously very heavily lung-cancer-focused. This was in Korea, and we came back with a whole bunch of material that we wrote about. A lot of it was across both non-small-cell lung cancer, from the PD-1/VEGF world, and small-cell lung cancer, which is beginning to see quite a lot of movement, particularly in the ADC and DLL3/CD3 engager space.

I think it might actually be worthwhile, given that EASD was live, to postpone most of that conversation until we talk about ESMO, because the biggest data set that's coming out is DeLLphi-305 from Amgen, which is coming out at ESMO. We know it's hit, and it has the potential, along with DeLLphi-312, to reset the bar—or the standard of care—in this patient population in the first line, which then impacts the whole class.

The key thing that I would say, when I look at the 5 notes that we wrote from the conference, is: guess what? They were all China-associated assets. I don't want to have a particular penchant for continuing to talk about China; I'm just observing here, right? It's possible that there was more of a focus on China because this was in Korea. Nevertheless, the GSK and Roche data in small-cell lung cancer were both China assets. The PD-1, PD-L1, and VEGF assets were Chinese, BioNTech's Cutistobart is also a China asset, and the other B7-H3 assets are mostly China assets.

I would say that what we need to do is wait and see what Amgen shows us. I'm expecting a doubling of overall survival with DeLLphi-305, but let's leave that for next week and move to EASD, which is obviously live. If I get a chance, I might make a little comment there, too, after you guys have covered it.

Yeah. In the last 5 minutes, there's a bunch of data at EASD, the European Association for the Study of Diabetes. We could probably spend a whole call just talking about new data sets. Obviously, in the GLP-1 obesity and diabetes space, it's very hot and very competitive. There's data every day.

From my perspective, the 2 data points that are most top of mind are both from Lilly. The first is the TRIUMPH-2 data for retatrutide, showing 21% weight loss in diabetics at 80 weeks. That's a very significant impact, and the safety profile continues to look pretty tolerable on retatrutide. It's the next GLP-1 drug that Lilly is pushing forward after tirzepatide, and it's very good data that's raising the bar.

It's always notable in diabetics because it's much harder to show weight loss. There's usually a pretty significant delta between what weight loss will look like in nondiabetic obese patients and diabetic patients. Crossing a 20% boundary here is very meaningful.

The other data point was their amylin combination with tirzepatide, or TZP. This also showed really good 48-week data in diabetics, showing 23.3% weight loss. The discontinuations were notably higher—27% versus 3% with tirzepatide alone—with high rates of nausea and vomiting. But it's certainly just another set of assets that Lilly has in the GLP-1 space. The market sees them as the leader, and it seems like they're going to remain that way for some time to come.

Regeneron also had some data for one of its drugs that it's hoping to develop to show retention of muscle mass. One of the big potential problems with the GLP-1 obesity drugs is that you lose weight, but it's very broad weight loss: you're losing fat, but you're also losing muscle. One concept out there is to try to find ways to retain the muscle while losing the fat.

Regeneron has taken a couple of shots here. It has a drug called Tre-trovogrmab, which is an anti-myostatin antibody that it's been developing for a while. It showed pretty decent MRI data in combination with semaglutide. While semaglutide is reducing overall weight, the use of Tre-trovogrmab seems to be retaining more or less all of the muscle, based on MRI.

But I think there are a lot of questions as to how you can actually reach an endpoint that's not something like a long-term outcome endpoint. Is there some sort of interim way to demonstrate something that's approvable with these myostatin antibodies, under the assumption that the FDA probably isn't going to accept MRI as a clinically validated endpoint? Sam, you had something to say. I'd love to hear your thoughts on the conference.

No, you did a fantastic job, of course. The only thing I would add is that I've already got friends asking me, “When is this triple thing coming to market?” These are not people who are super-obese, so I think Lilly is already doing a fantastic job of getting that news out there.

I think the Laura TZP was particularly interesting, because I don't think we'd ever seen 23% weight loss at that time point. Obviously, the discontinuation rate was quite high, but I don't think we've ever seen anything like that. What it does is complement a very nice portfolio here. You get a GLP-1, a GLP-1/glucagon, and a GLP-1/amylin. Lilly is firing on all cylinders here, so hats off to them for developing this platform.

The last thing to say is that pretty much every other data point was a bit of a meh. Everything had some questions; it leaves you with some questions in terms of the data that we saw. Let's not forget that, at the beginning of the week, Roche discontinued essentially developing its anti-myostatin product—or candidate—probably because it wasn't seeing the efficacy it was expecting. But the drug profile is tough, especially given what Brian just said.

How do you get this through the regulators? What is your endpoint? What are you going to show? That's going to be tough. I think it applies to all these guys, in terms of the myostatin-targeting folks.

Thanks. We also have other modalities in obesity. I cover a company called Corbus Pharmaceuticals, which has a CB1 receptor modulator, a class that probably has been thrown out by investors. But they actually had pretty good data a couple of weeks back for their CB1. Obviously, Novo's Mounluna band set the stage, but there was differentiated safety and tolerability, which was really important.

The company got no credit for it, but we'll see how this obesity market develops. Obviously, there is continued high interest, particularly from the industry side. That's all the time we have for today. Thanks to my esteemed cohosts, Sam, Eric, and Brian, for making today's hangout really fun for me. And of course, many thanks to those of you who tuned in live, and many thanks in advance for those of you who might have dialed in on the replay. Have a great rest of your day, everyone, and we hope you'll join us for our next Biotech Hangout.