The Biotech Beat: 8.12-8.18.24
by Joey Bose and Aruesha Srivastava
🌟Upshot
In a whirlwind of biotech and healthcare developments, the industry is undergoing seismic shifts that promise to reshape the landscape. From Ascendis Pharma's 🧪F DA approval of Yorvipath, a new hypoparathyroidism treatment, to 💸 Crown Laboratories' $924 million acquisition of Revance Therapeutics, makers of Botox rival Daxxify, companies are making bold moves. However, the journey isn't without hurdles: 🚨 Amgen's Imdelltra faced significant safety data issues in its SCLC trial, raising red flags just as AstraZeneca’s 🩺 Imfinzi secured FDA approval for perioperative lung cancer treatment amidst ongoing debates over timing. Meanwhile, 🔄 Metagenomi is reshuffling its pipeline, dropping its ALS program due to industry setbacks, and 📉 Actuate Therapeutics navigated a challenging IPO market, raising $22.4 million, half its initial target. The pricing of life-saving drugs is also under the microscope, with 💊 Medicare's negotiations slashing costs by $6 billion for the first 10 drugs, while 🔥 Mark Cuban's Cost Plus Drugs takes aim at PBMs, vowing to disrupt the U.S. healthcare system. Amidst these transformations, 💼 an academic study defends PBMs, challenging claims they inflate drug costs, and sparking a critical conversation on the future of healthcare reform. This compelling narrative of innovation, challenges, and market dynamics invites readers to delve deeper into the forces driving change in biotech and healthcare.
🔬 Research, Development & Drug Approvals 💊
🧪 Ascendis Pharma Wins FDA Approval After Rocky Road, Challenging Takeda's Market Exit
The Facts
Ascendis Pharma has secured FDA approval for Yorvipath, a hypoparathyroidism drug, after overcoming a series of setbacks, including a rejection in May 2023 and concerns about manufacturing control. Yorvipath, a once-daily injectable prodrug of parathyroid hormone, now offers a new option for patients left without treatment since Takeda’s Natpara was pulled from the market due to manufacturing issues. Yorvipath is already approved in Germany and Austria, with a list price of €105K per patient per year, generating €1.5 million in Q1 2024. Ascendis anticipates launching the drug in the U.S. market by early 2025.
Our Opinion
The FDA's approval of Yorvipath is a significant milestone, not just for Ascendis but for the hypoparathyroidism community, which has been underserved since Takeda’s Natpara exit. While this approval highlights Ascendis' resilience in navigating regulatory challenges, it also underscores the persistent risks associated with manufacturing complexities in the biotech industry. The lengthy approval process, marred by regulatory hurdles, raises questions about the industry's ability to swiftly bring essential treatments to market. Moreover, the high cost of Yorvipath could limit its accessibility, potentially stifling the broader impact of this much-needed therapy.
Your Turn
Given the high cost of Yorvipath and the manufacturing challenges faced by both Ascendis and Takeda, how can the biotech industry innovate to reduce production costs and improve the affordability and accessibility of critical therapies like Yorvipath?
🌿 Lykos Fights Back: Appeals FDA’s Rejection of MDMA Therapy for PTSD Amid Urgent Need
The Facts
After the FDA denied approval for Lykos Therapeutics' MDMA-assisted therapy for PTSD, citing insufficient data and requesting an additional Phase 3 trial, Lykos has announced plans to appeal the decision. The rejection follows a disappointing outcome at an FDA advisory committee meeting where experts overwhelmingly voted against the treatment's efficacy and safety. Despite these setbacks, Lykos remains committed to pushing forward, arguing that existing data and scientific literature could address the FDA’s concerns.
Lykos insiders remained political despite their clear disdain for the FDA reviewers. Rick Doblin, Founder of the non-profit MAPS entity that later became Lykos, remains committed to his goal of globalizing psychedelic therapy and achieving "world net zero trauma by 2070" despite setbacks, criticizing the FDA for moving the goalposts in the regulatory process for MDMA-assisted therapy. He stated, "I think the FDA is not really responding to the science, or upholding its agreements." Lykos' CEO Amy Emerson believes she can steer the company through its current challenges, focusing on restructuring and engaging with the FDA to ensure the company's future, stating, "I take accountability by making these difficult decisions...to make sure that we do the right thing, that we talk to the FDA, and that we keep working to bring this forward."
Our Opinion
Lykos' decision to appeal the FDA's rejection of its MDMA therapy for PTSD reflects the company's determination to challenge regulatory barriers in the pursuit of groundbreaking treatments. While the FDA's concerns about trial design and safety are valid, the urgency of addressing the PTSD crisis—especially among veterans—warrants a more flexible and adaptive regulatory approach. Lykos' persistence could pave the way for a more nuanced understanding of how to safely integrate psychedelic therapies into mainstream medicine. However, the appeal process also risks delaying access to a potentially life-saving treatment for those in desperate need.
Your Turn
In light of Lykos’ appeal, how can the biotech industry and regulatory bodies collaborate to develop more adaptive frameworks that balance innovation with safety, particularly for emerging therapies like MDMA-assisted treatment for PTSD?
🌍 Galderma’s Nemluvio Receives FDA Approval, Sets Stage for Blockbuster Potential in Chronic Skin Diseases
The Facts
Galderma has secured FDA approval for Nemluvio, a first-in-class anti-IL-31 monoclonal antibody developed for prurigo nodularis, a chronic skin condition characterized by intense itching and nodules. The drug, licensed from Chugai Pharmaceutical in 2016, will be available as a prefilled pen for monthly subcutaneous injection. Nemluvio’s approval is based on Phase 3 trial results showing significant reductions in itch intensity compared to placebo. Analysts project global peak sales of $2.1 billion, with $1.5 billion driven by its potential in treating atopic dermatitis, pending further FDA review in December.
Our Opinion
The FDA’s approval of Nemluvio represents a significant advancement in the treatment of chronic skin diseases, particularly prurigo nodularis, where therapeutic options are limited. Galderma’s strategic positioning of Nemluvio as a more convenient, monthly alternative to existing biweekly treatments like Sanofi’s Dupixent could capture substantial market share, accelerating its path to blockbuster status. However, the drug’s ultimate success will hinge on its forthcoming FDA decision for atopic dermatitis, a much larger market. While the approval is promising, the intense competition and high stakes in dermatology require Galderma to execute flawlessly to realize Nemluvio’s full potential.
Your Turn
With Nemluvio’s approval for prurigo nodularis and its potential in atopic dermatitis, how might Galderma navigate the competitive landscape of dermatology, particularly against established treatments like Sanofi’s Dupixent, to secure and expand its market share?
🤖 AI Fails to Impress in Biotech: Leash Bio's Competition Exposes Weakness in Predictive Modeling
The Facts
Leash Bio's recent competition, aimed at testing AI models' ability to predict molecule binding to protein targets, revealed disappointing results. Out of nearly 2,000 teams, none performed well, indicating that AI models are better at memorizing data than they are at reasoning through novel chemical spaces, which is required for predicting ligand-receptor and protein-protein interactions. Despite utilizing a dataset 1,000 times larger than the largest publicly available one, the competition highlighted significant limitations in current AI approaches to drug discovery. Leash Bio plans to release its data publicly in September to encourage further development, while acknowledging that more data, not just better models, is needed for AI to make meaningful strides in the field.
Our Opinion
The sobering results from Leash Bio's AI competition underscore the gap between the hype surrounding AI in biotech and the current reality. While AI is often touted as the next big thing in drug discovery, this competition reveals that existing models struggle with the very tasks they are supposed to revolutionize. The reliance on memorization rather than true reasoning in AI models is a critical flaw that could limit the technology's potential impact on the biotech industry. Leash Bio's focus on generating more data is a step in the right direction, but it also raises questions about whether the industry is overly reliant on data quantity at the expense of quality and innovation.
Your Turn
In light of the competition's results, how can the biotech industry balance the need for vast datasets with the development of more sophisticated AI models that can truly innovate in drug discovery, rather than just memorizing patterns from existing data?
💊 Gilead's $4.3 Billion Bet Pays Off: Seladelpar Approved for Rare Liver Disease Amid Intense Competition
The Facts
Six months after acquiring CymaBay Therapeutics for $4.3 billion, Gilead has secured accelerated FDA approval for Livdelzi (seladelpar), a treatment for primary biliary cholangitis (PBC). Priced at $12,606 for a 30-day supply, Livdelzi enters a competitive market alongside Ipsen’s Iqirvo and Intercept’s Ocaliva, both of which are priced lower. The approval, based on Phase 3 trials showing a 61.7% reduction in PBC biomarkers and significant itch symptom relief, positions Gilead to strengthen its liver disease portfolio. Peak sales for Livdelzi are projected between $500 million and $1.5 billion.
Our Opinion
Gilead’s successful approval of Livdelzi validates its $4.3 billion acquisition of CymaBay Therapeutics, signaling a strategic move to dominate the liver disease market. While the drug's high price point is justified by its superior efficacy in reducing PBC biomarkers and itch symptoms, Gilead faces formidable competition from established players like Ipsen and Intercept. The challenge now lies in convincing prescribers and payers of Livdelzi’s added value, especially given the aggressive pricing strategies of its rivals. Gilead’s deep relationships with hepatologists and its reputation in liver disease treatment will be crucial in driving adoption, but the road to market dominance will be anything but easy.
Your Turn
With Livdelzi entering a competitive market for PBC treatment, how might Gilead leverage its existing relationships with physicians and its broader liver disease portfolio to outmaneuver established competitors like Ipsen and Intercept?
🚨 Amgen's Imdelltra Approval Raises Red Flags: FDA Uncovers Significant Safety Data Issues in SCLC Trial
The Facts
Amgen's T-cell engager, Imdelltra, recently gained FDA approval for treating small cell lung cancer (SCLC), marking a significant breakthrough as the first DLL3-targeting therapy. However, the approval process was marred by the discovery of nearly 400 underreported adverse events (AEs) from the pivotal DeLLphi-301 trial, including critical data omissions from a South Korean trial site. Despite these issues, which included unreported grade 3 and serious AEs, the FDA concluded that the updated safety data did not alter the trial’s overall results. Amgen now faces scrutiny as it continues its Phase 3 trials, with concerns about data integrity persisting.
Our Opinion
The FDA’s approval of Imdelltra, despite uncovering substantial safety data reporting failures, raises serious questions about the integrity of clinical trial processes in the biotech industry. While the drug’s potential to treat SCLC is undeniably significant, the underreporting of adverse events—particularly in a field as delicate as oncology—cannot be overlooked. This incident highlights the risks of accelerating drug approvals without fully transparent and reliable data, which could undermine trust in both the drug and its developer. Amgen must address these lapses decisively to ensure that future trials and ongoing treatments meet the highest standards of safety and accuracy.
Your Turn
Given the data integrity issues discovered during Imdelltra’s trial, how should regulatory bodies and pharmaceutical companies collaborate to enhance oversight and ensure rigorous data reporting standards, particularly in the accelerated approval process for high-stakes therapies?
🩺 AstraZeneca’s Imfinzi Wins FDA Approval for Lung Cancer Surgery, But Questions Linger Over Treatment Timing
The Facts
The FDA has approved AstraZeneca’s checkpoint inhibitor Imfinzi for use in early-stage non-small cell lung cancer, both before and after surgery. This approval follows an advisory committee’s unanimous recommendation that future studies on cancer drugs around surgery should be more informative, though it stopped short of requiring AstraZeneca to conduct a new trial for Imfinzi. In the AEGEAN clinical trial, Imfinzi, combined with chemotherapy before surgery and as a solo treatment after, reduced the risk of cancer recurrence by 32% compared to chemotherapy alone. However, concerns persist about the potential for over-treatment and the unclear contribution of each treatment phase to patient outcomes.
Our Opinion
The FDA’s approval of Imfinzi for perioperative use in lung cancer represents a significant step forward in expanding the role of immunotherapy in early-stage disease. However, the decision to approve without requiring more detailed studies on the timing and dosage of treatment raises important questions about the balance between innovation and patient safety. The lack of clarity on how much each phase of treatment—pre- or post-surgery—contributes to the overall benefit leaves the door open for potential over-treatment, which could expose patients to unnecessary risks. As the cancer field evolves, the need for more nuanced and comprehensive clinical trials becomes increasingly critical.
Your Turn
With the FDA and advisory committees pushing for more informative studies in perioperative cancer treatment, how can pharmaceutical companies design future trials to effectively balance the need for rapid innovation with the imperative to avoid over-treatment and ensure patient safety?
🔄 Metagenomi Reshuffles Pipeline, Drops ALS Program Amid Industry Setbacks
The Facts
Metagenomi is reconfiguring its pipeline, opting to deprioritize its primary hyperoxaluria type 1 program after regaining rights from Moderna, and discontinuing its ALS program following disappointing results from a competitor's clinical trial. The decision to halt the ALS program comes after Biogen and Ionis reported lackluster Phase 1/2 data targeting Ataxin-2. Metagenomi is focusing its resources on its hemophilia A program, with 12-month data in nonhuman primates expected ahead of schedule in September 2024. The biotech also plans to nominate one or two cardiometabolic candidates by the end of 2025 as part of its strategic shift.
Our Opinion
Metagenomi's decision to drop its ALS program and seek a partner for its hyperoxaluria project reflects the harsh realities of drug development in the biotech industry. With the high cost of R&D and the pressure to deliver results, companies are forced to make difficult choices, often influenced by setbacks in the broader industry landscape. While refocusing on more promising areas like hemophilia A may safeguard Metagenomi's resources, the discontinuation of the ALS program is a reminder of the challenges in developing effective treatments for complex neurodegenerative diseases. This strategic pivot underscores the importance of adaptability but also raises concerns about the long-term viability of less established biotech firms in a volatile market.
Your Turn
In light of Metagenomi's decision to drop its ALS program following competitor setbacks, how can smaller biotech companies navigate the risks of early-stage R&D while maintaining a diversified and innovative pipeline?
💰 Investment, M&A, and IPOs 📈
💸 Revance Therapeutics Acquired for $924 Million: Botox Rival Daxxify Changes Hands Amid Legal Battles
The Facts
Revance Therapeutics, the company behind Botox competitor Daxxify, has been acquired by Crown Laboratories for $924 million, with each share valued at $6.66, representing an 89% premium on its closing price. Revance's stock surged 86% following the announcement. The acquisition is expected to expand Revance's provider network and product portfolio. Daxxify, initially approved for aesthetic use in 2022 and for treating cervical dystonia in 2023, has been marketed as a longer-lasting alternative to Botox. However, Revance's efforts to develop a Botox biosimilar have faced legal challenges from Allergan, which has accused the company of poaching employees with trade secrets.
Our Opinion
The acquisition of Revance Therapeutics by Crown Laboratories marks a significant shift in the competitive landscape of aesthetic and therapeutic neurotoxins. While the hefty premium paid for Revance underscores the potential of Daxxify as a Botox rival, the ongoing legal disputes with Allergan could cast a shadow over the deal's long-term success. Crown Laboratories' ability to navigate these legal challenges while leveraging Revance's innovative products will be crucial in determining whether this acquisition lives up to its lofty valuation. The biotech sector, already fraught with competition and legal risks, will be closely watching how this acquisition unfolds, particularly given the stakes involved in the lucrative neurotoxin market.
Your Turn
With Revance's ongoing legal battles over its Botox biosimilar, how might Crown Laboratories strategically position Daxxify and other assets to mitigate legal risks and maximize market share in the highly competitive aesthetic and therapeutic neurotoxin space?
📉 Actuate Therapeutics' Scaled-Back IPO Raises $22.4 Million Amid Challenging Market Conditions
The Facts
Actuate Therapeutics joined the Nasdaq with a reduced IPO, raising $22.4 million—less than half of its initial $45.1 million target. The company sold 2.8 million shares at $8 each, the lower end of its expected range. Actuate’s stock, listed under the ticker "ACTU," initially rose by 19% to $9.15 but showed volatility thereafter. The proceeds will primarily fund a Phase 2 trial for Actuate’s lead drug, elraglusib, in pancreatic cancer. However, the company has postponed several other clinical trials, including a Phase 2 study in refractory metastatic melanoma, due to the reduced IPO proceeds.
Our Opinion
Actuate Therapeutics' scaled-back IPO reflects the ongoing difficulties biotech companies face in securing adequate funding amidst a volatile market. While the initial post-IPO stock bump suggests some investor confidence, the reduced capital raises concerns about the company's ability to advance its ambitious clinical pipeline. The delay of key trials, particularly in challenging oncology areas like pancreatic cancer, highlights the precarious position smaller biotechs find themselves in as they balance innovation with financial constraints. Actuate's future success will hinge on its ability to leverage the limited funds effectively while seeking additional investments to sustain its development efforts.
Your Turn
In light of Actuate Therapeutics' scaled-back IPO and postponed clinical trials, how can biotech companies strategically manage their pipelines and investor relations to navigate the financial challenges of going public in a turbulent market?
⚖️ Politics & Policy 🏛️
⚖️ Wealthy Donors Target FTC's Lina Khan, Sparking Debate Over Antitrust and PBM Reform
The Facts
Wealthy Democratic donors are publicly criticizing FTC Chair Lina Khan, urging Vice President Kamala Harris to remove her if elected. This pressure stems from Khan’s aggressive stance on antitrust enforcement, particularly her scrutiny of pharmacy benefit managers (PBMs). Khan’s term expires in September, but she may remain in her position depending on the outcome of the 2024 presidential election. The debate over Khan’s effectiveness is intensifying, with critics arguing her approach to antitrust is too aggressive, while supporters praise her efforts to tackle corporate monopolies and protect consumers.
Our Opinion
The mounting pressure from influential Democratic donors to oust Lina Khan as FTC Chair highlights the deepening divide within the party over the direction of antitrust policy. While Khan’s assertive actions against PBMs and tech giants have earned her praise from progressives and some conservatives, her critics argue that her aggressive stance could stifle business growth and innovation. The controversy surrounding Khan's leadership underscores the complex balancing act between enforcing fair competition and fostering a business-friendly environment, a challenge that will shape the future of U.S. antitrust policy and its impact on industries like healthcare.
Your Turn
As the debate over Lina Khan's leadership intensifies, how might the outcome of the 2024 presidential election influence the future of antitrust enforcement and the regulatory landscape for industries like healthcare and technology?
💊 Medicare Drug Price Negotiations Slash Costs by $6 Billion, But Critics Question Long-Term Impact
The Facts
The Centers for Medicare & Medicaid Services (CMS) announced that the first round of Medicare drug price negotiations would have saved an estimated $6 billion in 2022, cutting costs on 10 key drugs by 22%. The reductions ranged from 38% to 79%, with Merck's Januvia seeing the steepest drop from $527 to $113 for a 30-day supply. The new prices will take effect in January 2026, potentially saving Medicare beneficiaries $1.5 billion in out-of-pocket costs. However, while lawmakers praise the initiative, critics argue that it fails to address issues with pharmacy benefit managers (PBMs) and may disrupt pharmaceutical innovation.
Our Opinion
The $6 billion in savings from Medicare's drug price negotiations is a significant victory for American seniors, but the initiative’s long-term impact on the healthcare system remains uncertain. While the price cuts are a welcome relief, especially for patients relying on expensive medications like Januvia, the program's focus solely on drug manufacturers may inadvertently stifle innovation by reducing incentives for R&D. Moreover, the omission of PBMs from these negotiations raises concerns about whether these cost reductions will translate into real savings for patients. The challenge now lies in balancing cost control with the need to foster a competitive and innovative pharmaceutical landscape.
Your Turn
With Medicare's drug price negotiations achieving significant savings, how can policymakers ensure that these cost reductions do not stifle pharmaceutical innovation or allow PBMs to undermine the benefits for patients at the pharmacy counter?
🔥 Mark Cuban’s Cost Plus Drugs Takes Aim at PBMs, Promises to Disrupt U.S. Healthcare
The Facts
Mark Cuban, the billionaire entrepreneur and founder of Mark Cuban Cost Plus Drug Company, expressed his ambition to radically transform the U.S. healthcare system by making it more affordable. In an interview with Jon Stewart, Cuban highlighted his company's efforts to bring transparency and lower prices to the drug market by bypassing traditional pharmacy benefit managers (PBMs). Since its launch in 2022, Cost Plus has sold 2,500 medications and partnered with major health systems and insurers. Cuban’s company is also venturing into manufacturing its own generics and short-supply drugs, with plans to publish all customer contracts online to further increase transparency.
Our Opinion
Mark Cuban's bold approach to disrupting the U.S. healthcare system through his Cost Plus Drug Company is a refreshing counter to the entrenched power of PBMs and the opaque pricing practices that have long plagued the industry. By focusing on transparency and cutting out middlemen, Cuban is not only challenging the status quo but also setting a new standard for how medications should be priced and distributed. However, while his efforts have garnered significant attention and partnerships, the true test will be whether Cost Plus can sustain its impact and drive broader industry-wide change, especially as major players like CVS and Walgreens begin to adopt similar strategies.
Your Turn
As Mark Cuban’s Cost Plus Drug Company pushes for greater transparency and lower prices in the pharmaceutical market, how might traditional pharmacy benefit managers and large healthcare companies adapt to this new competitive landscape, and what challenges could arise in maintaining these lower prices long-term?
💼 In Defense of PBMs: Academic Study Challenges Claims That PBMs Inflate Drug Costs
The Facts
Pharmacy benefit managers (PBMs) have been under intense scrutiny, accused of driving up prescription drug prices. However, a recent academic study published in JAMA Health Forum offers a counter-narrative, arguing that PBMs play a critical role in managing prescription benefits for insurers and employers. The study outlines three key facts: PBMs exist because insurers demand their services, Congress-created safe harbors and patent laws contribute to high drug prices, and every player in the drug supply chain is driven by profit. The authors suggest that eliminating PBMs could disrupt the delicate balance of the prescription drug ecosystem, potentially leading to higher costs and reduced access.
Our Opinion
The ongoing vilification of PBMs in media and government reports paints an oversimplified picture of a complex system where every player, not just PBMs, is motivated by profit. While it's true that PBMs wield significant influence in the drug pricing landscape, the study argues that they also provide essential services that help manage prescription benefits effectively. Removing PBMs from the equation could create unintended consequences, such as higher drug prices and reduced access for patients. Instead of focusing solely on PBM regulation, policymakers should consider broader reforms that address the root causes of high drug prices, including patent laws and the overall structure of the healthcare system.
Your Turn
Given the critical role PBMs play in the prescription drug supply chain, how can policymakers design reforms that address concerns about drug pricing without disrupting the benefits that PBMs provide to insurers, employers, and patients?
Disclaimer: The contents of this article are not to be construed with investment advice. The information presented in this article is a compilation of current events, technical analyses, corporate press releases, and the author's personal viewpoints about the biotechnology industry. While efforts have been made to provide accurate and timely information, there may be inadvertent errors, omissions, or inaccuracies. Therefore, investment decisions should not be made solely based on the content of this article. The article may contain statements that are forward-looking in nature, encompassing predictions and future expectations that are subject to inherent risks and uncertainties; as such, actual outcomes may significantly deviate from those expressed or implied herein. This article serves purely as an informational and entertainment resource, and should not be construed as an endorsement to purchase or sell any financial securities. Prior to engaging in any investment activities, it is imperative that you conduct comprehensive due diligence and consult with a qualified financial advisor.