Mental health problems were mounting heading into this pandemic.

Now, the challenges are bigger and coming in waves.

There’s the grief. Think about all the family and friends of the more than 520,000 people who have died.

There’s anxiety about getting infected. There’s depression, and loneliness, that stems from social distancing. Addictions to alcohol and drugs are on the rise as people seek ways to cope. Post-traumatic stress disorder is a concern among our healthcare workers. The social media platforms are designed to maximize engagement — they keep us angry and outraged and ultimately exhausted by efforts to sell us stuff.

Data are starting to tell a story.

Depression rates have tripled during the pandemic, according to one study published in JAMA in September. Suicidal thinking among young people was rising before 2020, and surged last year to the point where one in four young adults in the US contemplated suicide, according to the CDC. Heavy drinking episodes shot up 41 percent among women, according to a RAND Corp. study.

Biotech has sprung into action like never before against the virus. Incredible progress has been made there.

What can industry do about mental health?

This week, some of you may have heard my interview with Bob Nelsen of ARCH Venture Partners on The Long Run podcast. The longtime VC, known for being ahead of the curve, spoke of increasing investment in mental health. This isn’t exactly new for him. Nelsen previously invested in schizophrenia drug developer Karuna Therapeutics and depression drug developer Sage Therapeutics.

What struck me most was that Nelsen wasn’t speaking exclusively about the next Karuna and other “hard science” approaches. He also spoke of the “soft” kind of interventions that incorporate some combination of other elements like, presumably, talk therapy, cognitive behavioral therapy, more convenient access, maybe some passive data collection from smartphones equipped with useful analytical capabilities, and maybe some pharmacologic therapy. He didn’t specifically mention the term “digital therapeutics” but there’s a lot of room to re-think mental health treatment in a broader way.

Thinking about those comments, I called a friend.

D.A. Wallach is a general partner at Time BioVentures, a biotech investment firm in the Los Angeles area. He’s curious about science and startups, and a longtime TR subscriber. He’s a successful recording artist. He kindly gave me one of his unpublished songs to start The Long Run podcast in 2017.

That music still fills me with joy each episode.

I wanted to check in with D.A. partly for his thoughts on mental health investing, but moreso for his personal experience with the system.

He suffered a death in the family last year and has sought grief counseling.

Grief, like death, is something our society doesn’t like to talk about. “Nobody knows what to say to you,” D.A. told me.

“Grief isn’t a mental illness, but it’s sort of the equivalent of a mental injury,” he added. “I’d think of it almost like rehab. If you have an injury to your leg, you go to rehab. If you have an injury to your brain, you should go to rehab.”

Like so many people in America, he discovered that it’s a lot easier to get rehab for a leg injury.

First off, it was hard to find someone qualified to talk to. It didn’t take long to figure out why. A market failure was staring him in the face.

Healthcare insurance reimbursement rates are so low in greater Los Angeles that all the best providers refuse to take insurance, D.A. said. They take cash only. Some of the best charge up to $400 an hour.

That means they end up serving primarily wealthy clientele, leaving the average and the below-average practitioners for everyone else with insurance. “You’d have to be a saint to be an incredibly talented therapist and take insurance. You’re choosing to make less money,” D.A. said.

D.A. ended up finding a counselor. He said he’s satisfied with the quality of care he’s been getting via telemedicine.

What’s gnawing him now is the broken system. Los Angeles has developed what amounts to a two-tiered system – high-quality cash-only mental healthcare for the wealthy and lower-quality, insurance-based mental healthcare for everyone else.

That might be too generous of a description. It assumes people who aren’t wealthy can even get access to mental health services at all.

Limited access is the downstream manifestation of deeper ills. Our social-cultural stigma around mental health issues feeds directly into a political system that, as a result, provides only the most parsimonious support for mental healthcare. Naturally, we are left with this narrow funnel of qualified professionals attempting to grapple with millions of people in need.

The gap is enormous. One pre-pandemic study, conducted by the Cohen Veterans Network, a national nonprofit, and National Council for Behavioral Health, attempted to get its arms around this access problem with its inaugural “America’s Mental Health” report in 2018. (Full report).

According to the report:

• 42 percent of the population considers cost and inadequate insurance coverage as a barrier to accessing mental healthcare.
• Nearly one in five Americans, 17%, said they have had to choose between getting treatment for a physical health condition and a mental health condition because of their insurance.
• Almost two-thirds of Americans, 64%, who have sought mental health treatment believe the U.S. government needs to do more to improve mental health services.
• More than one-third of Americans, 38%, have had to wait longer than one week for mental health treatments.
• Almost half of Americans, 46%, have had to or know someone who has had to drive more than an hour roundtrip to seek treatment.

These numbers were disturbing in 2018. One year into the COVID-19 pandemic, we need an update.

Jonathan Shaywitz, a board-certified psychiatrist in Los Angeles with a medical degree from Harvard Medical School, said the demand for mental health services is “the highest it has been for some time.” (If the name’s familiar, he’s the younger brother of TR healthtech columnist David Shaywitz.)

Jon Shaywitz currently handles outpatient services, as well as inpatient services at five facilities. He’s busy. Despite efficiency gains that make it easier to accommodate new patients through telemedicine, Shaywitz said the waiting list for new patients extends out for three months.

Even with increasing awareness of the need, mental healthcare still doesn’t get reimbursed at the same level as physical healthcare. As Jon Shaywitz said:

“This is an area that still needs work — while the law has attempted to create parity between physical and mental health — we are still lacking regarding parity of reimbursement for mental health. Due to the lack of procedures in mental health, our currency is time and talking and unfortunately insurance companies don’t reimburse for time/talking as they do for procedures or imaging. While some of my colleagues still do private practice, the majority are leaving practice and joining large organizations/companies (community psychiatry/Kaiser) where they are salaried and who take insurance.”

With 520,000 dead from COVID-19, how many family members and friends of the deceased out there could use some help coping with their grief? How many people could use help for depression and anxiety?

What can biotech do that might make a difference?

D.A. hasn’t yet invested in mental health, but he’s been studying the opportunities. It’s an area that can’t simply be addressed with pharmacologic solutionism, where the pill is everything, he says.

A more integrated approach that might involve some combination of tech-enabled diagnostic data, behavioral coaching, new treatments, and the empathetic touch from skilled professionals is more likely to succeed. Smoking cessation is one potential model, where the drug is just one tool. Psychedelic therapies for mood disorders are another potential arena for integrated investigation (see in-depth TR coverage of psychedelic drug R&D, September 2020).

Those of us who aren’t neuroscientists or psychiatrists or venture capitalists can do a few things, too.

We can create situations in our companies when it’s OK for people to take a break when they need it. We can lean on our health insurance providers to improve access to mental health services. We can pressure elected officials to raise awareness and provide more funding for reimbursement.

We can support more basic research, from people like Harmit Malik, a member of the National Academy of Sciences. He bravely admitted in a public forum — see below — that many scientists are struggling.  

We can make ourselves aware of the suffering of our friends and colleagues that’s often buried beneath the surface. We can choose to uplift. We can be kind.

We can do more for mental health.

TR readers can continue on for a roundup of the deals and financings and other major developments of the week in biotech.

Vaccines

Delayed Large Local Reactions to mRNA-1273 Vaccine against SARS-CoV-2. NEJM. Mar. 3. (Kimberly G. Blumenthal et al Mass General Brigham)

Fauci: U.S. must stick with two-shot strategy for Pfizer-BioNTech, Moderna vaccines. Washington Post. Mar. 1. (Dan Diamond)

India-based Bharat Biotech reports vaccine trial results from 25,800-volunteer study with 81 percent efficacy against COVID-19. (Bharat Biotech statement)

Science of SARS-CoV-2

High resolution profiling of MHC-II peptide presentation capacity, by Mammalian Epitope Display, reveals SARS-CoV-2 targets for CD4 T cells and mechanisms of immune-escape. BioRxiv. Mar. 2. (Jan Kisielow et al Repertoire Immune Medicines in Cambridge, Mass.)

Estimated transmissibility and impact of SARS-CoV-2 lineage B.1.1.7 in England. Science. Mar. 3. (Nicholas Davies et al London School of Hygiene and Tropical Medicine)

Science Features

• When Will It End? How a Changing Virus is Reshaping Scientists’ Views on COVID-19. Reuters. Mar. 3. (Julie Steenhuysen and Kate Kelland)
• COVID-19 Can Derange the Immune System in Strange Ways. Kaiser Health News. Mar. 2. (Liz Szabo)
• The short-term, middle-term, and long-term future of the coronavirus. STAT. Mar. 4. (Drew Joseph and Helen Branswell)

Data That Mattered

San Francisco-based VIR Biotechnology and GSK had some bad news from the NIH-sponsored ACTIV-3 clinical trial that evaluated its therapeutic neutralizing antibody against COVID-19 in hospitalized patients. The Data Safety Monitoring Board recommended enrollment in the drug arm be closed after seeing data “that raised concerns about the magnitude of the benefit.” There were no reported safety signals, the companies said. VIR shares fell 28 percent on the news. (NIH Statement on ACTIV-3, which includes antibodies from VIR and Durham, NC and Beijing-based Brii Biosciences.)

Financings

Cambridge, Mass.-based eGenesis said it raised $125 million in a Series C financing. The company uses CRISPR to engineer animal tissues for transplant into humans – starting with kidneys for kidney failure and islet cells for type 1 diabetes.

Foresite Capital raised $969 million in its Fund V and Opportunity Fund.

Paris-based Sofinnova Partners, a European-focused life science fund, raised a new $540 million late-stage crossover fund.

Berkeley, Calif.-based Caribou Biosciences raised $115 million in a Series C financing to use its CRISPR technology to further advance work on allogeneic, off-the-shelf engineered immune cell therapies for cancer. Farallon Capital Management, PFM Health Sciences, and Ridgeback Capital Investments co-led.

Philadelphia-based Century Therapeutics raised $160 million in a Series C financing. The company is developing induced pluripotent stem cell-derived therapies for cancer. Casdin Capital led. (Listen to Century chief strategy officer Janelle Anderson on The Long Run podcast, Aug. 2019).

Waltham, Mass.-based Morphic Therapeutic seized upon its surging stock price to put together a new offering of shares at $70 apiece. The company, the developer of oral small molecule integrin inhibitors, took home a fresh $245 million from the offering. (See Tuesday’s TR coverage of Morphic’s proof-of-concept clinical data).

San Diego-based Janux Therapeutics raised $56 million in a Series A financing led by Avalon Ventures. The company is developing “Tumor Activated T Cell Engager” technology.

South San Francisco-based Amunix Pharmaceuticals said it raised $117 million in a Series B financing led by Viking Global Investors. The company is developing protease-activated T cell engagers and cytokines for the treatment of solid tumors.

UK-based Exscientia, an AI drug discovery company, said it raised $100 million in a Series C financing that included Blackrock funds, Novo, Bristol Myers Squibb and others.

MassBio released a report this week finding that Massachusetts biotech companies raised a record-breaking $5.8 billion combined in venture capital in 2020. That shattered the previous record of $4.8 billion from 2018. A remarkable 21 biotech companies from Massachusetts alone went public last year, raising another $3.9 billion, the trade group said. (Summary and link to full report).

Access and Manufacturing

Merck, likely suffering from a bruised corporate ego after its COVID-19 vaccine candidates failed, agreed to help Johnson & Johnson manufacture its adenoviral vaccine that was just authorized for distribution by the FDA. The Biomedical Advanced Research and Development Authority (BARDA) agreed to provide $269 million to Merck to set up the necessary processes to make the J&J vaccine. President Biden later said the plan is to make enough vaccine to vaccinate all American adults by May 31. Previously, Novartis and Sanofi said they would help produce the Pfizer / BioNTech vaccine.

WuXi Apptec completed its acquisition of Oxgene, a UK-based contract manufacturer of cell and gene therapies.

San Diego and Boston-based Resilience acquired two new biotech drug manufacturing facilities. One is the 310,000-square foot landmark along the Charles River in Boston, originally developed by Genzyme and now part of Sanofi. The other is a 136,000-square foot facility in Mississauga, Ontario. Resilience said it has now assembled a network of factories with 750,000 square feet in North America. It will continue to invest in upgrading and adapting the facilities for production. (Bob Nelsen of ARCH Venture Partners, co-founder of Resilience, discussed the company in my latest Long Run podcast).

Cambridge, Mass.-based Biogen said it plans to build a new gene therapy manufacturing plant in Research Triangle Park, North Carolina. It’s planning to scale up future gene therapies for neurological disorders. Biogen plans to hire 90 new workers there, and invest $200 million.

Germany-based CureVac, a less-known mRNA vaccine and therapeutics developer, agreed to work with Novartis to help scale up production of its mRNA vaccine candidates in the second quarter of 2021. The companies said they expect to be able to make 50 million doses at a Novartis facility in Austria in 2021, and another 200 million in 2022.

Deals

Amgen agreed to pay $1.9 billion to acquire South San Francisco-based Five Prime Therapeutics, a company that’s been on a 20-year odyssey in biologic drug discovery and development. Amgen pointed to its interest in bemarituzumab, an anti-FGFR2b antibody being prepped for Phase III study in gastric cancer. (Five Prime founder Lewis T. “Rusty” Williams is a member of my Everest Base Camp trekking expedition to benefit Fred Hutch. It’s been on hold because of the pandemic, and now looks like a Spring 2022 event. Can’t wait to ask him about Five Prime on the trails of Nepal).

Takeda Pharmaceuticals took back full rights to soticlestat (TAK-935/OV935) for developmental and epileptic encephalopathies, including Dravet syndrome and Lennox-Gastaut syndrome. New York-based Ovid Therapeutics had been its development partner since 2017, and helped drive the asset through Phase II testing. To get back full global rights, Takeda agreed to pay Ovid $196 million at closing and another $660 million in milestones, plus royalties. Ovid stock, beaten down after a clinical failure with its candidate for Angelman syndrome, jumped back up 37 percent on the news that it was getting the cash infusion.

AbbVie obtained an exclusive option to acquire San Francisco-based Mitokinin once it completes IND-enabling studies. Mitokinin is developing drugs to increase the activity of PINK1 a master regulator of mitochondria. The company, spun out of work at UCSF by Nicholas Hertz and Kevan Shokat, is betting that by increasing the activity of PINK1, it can address one of the underlying problems that contributes to Parkinson’s disease. Terms weren’t disclosed. The startup was backed by Mission Bay Capital.

Santa Clara, Calif.-based Agilent Technologies agreed to pay $550 million in cash at closing, plus $145 million in milestones, to acquire Kirkland, Wash.-based Resolution Bioscience, which uses liquid biopsies and next-gen sequencing technology for the diagnosis of cancer.

The Defense Advanced Research Projects Agency (DARPA), the government agency that made a visionary investment in mRNA vaccines for pandemic preparedness in 2013, awarded a grant to Georgia Tech Research Institute to develop technology to detect SARS-CoV-2 in the air in real-time. San Diego-based Cardea Bio is a subcontractor on the deal. If successful, the detectors could conceivably be used in schools, offices, restaurants and other indoor environments where people might wonder about whether the virus is circulating.

Seattle-based Presage Biosciences said it raised $13 million in a round that included $7 million from new investors LabCorp Venture Fund, Bristol Myers Squibb, and InHarv Partners Ltd. Presage also said it established new research agreements with Merck and Maverick Therapeutics. The company uses intratumoral microdosing to evaluate several cancer drugs simultaneously in Phase O trials.

Grail, the Menlo Park, Calif.-based developer of next-gen sequencing enabled tests for early detection of cancer, said it struck an agreement with Providence, a major West Coast hospital network, to offer Grail’s Galleri test that’s scheduled to become available in the second quarter of 2021. It’s not a surprise that Providence would be an early adopter of this next-gen sequencing enabled healthcare application – it acquired the Institute for Systems Biology, led by DNA sequencing pioneer Leroy Hood, in Mar. 2016. (Read “Hood: Trailblazer of the Genomics Age”).

Our Shared Humanity

The California Life Sciences Association (CLSA) published a Racial & Social Equity Plan, which includes specific actions and a $1 million commitment over three years to get the ball rolling.

Regulatory Action

The FDA released its Data Modernization Action Plan, about 18 months in the making. There are three main elements – identifying valuable demonstration projects, developing consistent and repeatable data practices across the agency, and build up and sustain a stronger talent network (internally and with external partners). (Executive Summary)

Merck said it’s voluntarily withdrawing one of its approved indications for the PD-1 inhibitor pembrolizumab (Keytruda). It’s for metastatic small cell lung cancer. The drug was granted accelerated approval by the FDA in 2019 on a surrogate endpoint – tumor response – but full approval was supposed to be contingent on demonstrating an Overall Survival benefit. The drug failed to clear that higher bar of evidence in January 2020, and now the indication is being taken out of the prescribing label.

The FDA, in an unusual public statement, waded into a mess around Brainstorm Cell Therapeutics and its experimental NurOwn treatment for amyotrophic lateral sclerosis. The company announced Feb. 22 what looked like unequivocal bad news – that the FDA said it doesn’t have enough evidence of efficacy to submit a Biologics License Application. The company, however, appeared to muddy the waters and perhaps stir some false hope by adding that “FDA advised that this recommendation does not preclude Brainstorm from proceeding with a BLA submission.”

The FDA — under pressure for years to release full Complete Response Letters to investors, doctors and patients so that companies can’t engage in one-sided and misleading communications about new drug applications – decided to clear things up. The agency said:

Although FDA generally cannot provide confidential information about unapproved products, given the tremendous public interest in this product, we have concluded that it is important to provide high-level information about the status of the NurOwn development program.

With the recent completion of a randomized phase 3 controlled clinical trial comparing NurOwn to placebo, it has become clear that data do not support the proposed clinical benefit of this therapy. Data indicated that none of the primary or secondary endpoints were met in the group of patients who were randomized.

The agency got into some more specifics in case anyone is wondering if this is a close call, or the agency is being wishy-washy. The take-home lesson: the FDA has to step up its communications game in the age of transparency, especially with companies who are leaving people with misleading impressions.

The FDA granted a label expansion to Pfizer to start marketing lorlatinib (Lorbrena) as a treatment for patients with newly diagnosed ALK-positive non-small cell lung cancer. The FDA also converted an accelerated approval from 2018 into a full approval, based on results from the CROWN study which showed a 72 percent reduced risk of disease worsening or death for ALK-positive patients on the medicine.

Personnel File

Cambridge, Mass.-based Fulcrum Therapeutics said CEO Robert Gould is retiring at the end of March, and will remain on the board of directors and function as an advisor. The rare disease drug developer is promoting chief operating officer Bryan Stuart to president and CEO. (TR coverage of Fulcrum, Sept. 2018).

Cambridge, Mass.-based Solid Biosciences, the developer of gene therapy for Duchenne Muscular Dystrophy, said Erin Powers Brennan was hired as chief legal officer and Joel Schneider was promoted to chief operating officer.

Dilawar Syed was nominated by President Biden to be the deputy administrator of the Small Business Administration. He’s currently CEO at Lumiata, an AI-for-healthcare company.

Waltham, Mass.-based Dyne Therapeutics, the developer of treatments for muscle diseases, said it hired Wildon Farwell as chief medical officer. He was VP of neuromuscular at Biogen.

Cambridge, Mass.-based eGenesis, the CRISPR for xenotransplantation company that recently raised $125 million in a Series C financing and is almost surely getting dressed up for an IPO, hired Sapna Srivastava as chief financial officer. She previously worked as chief financial and strategy officer at Abide Therapeutics, and before that had a similar job at Intellia Therapeutics.

Chicago-based OMX Ventures, a new fund that says it’s investing in companies “at the intersection of biology, big data and engineering,” hired Jamie Kasuboski as a vice president on its team of investing professionals. Jamie previously worked at RA Capital, and Boehringer Ingelheim Venture Fund. Kevin Ness, former CEO of Inscripta, also agreed to become an advisor to OMX.

San Diego-based Viracta Therapeutics, a company working on treatment for viral-associated cancer, added Stephen Rubino and Barry Simon to its board of directors. The company also announced a series of promotions in operating roles.

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Vaccine news keeps getting better by the day. The number of new people being diagnosed with COVID-19 has been plummeting for weeks.

That’s the good news. Read on and synthesize the most important financings, deals, and scientific developments of the week in biotech.

Vaccines

Let’s start with the best news of the week. Researchers from Israel reported on the Pfizer / BioNtech vaccination campaign in the real world – a potentially chaotic and messy situation under the best of circumstances. Even so, they found that the vaccine’s performance delivered more than 90 percent protection against severe disease after two doses. That’s no small feat, as it’s on par with what was seen in well-controlled clinical trials. New England Journal of Medicine. Feb. 24. (Ran Balicer, Ben Reis, Marc Lipsitch and colleagues).

The second-best news of the week was for the Pfizer / BioNTech vaccine among 23,000 healthcare workers in the UK. See The Lancet Preprint, Feb. 22, by Victoria Jane Hall. Sek Kathiresan, a recent guest on The Long Run podcast, succinctly summarized a key finding about the vaccine’s ability to curtail asymptomatic spread of the virus.

Some of the most vulnerable people to COVID-19 are elderly people in nursing homes. They were among the first to get vaccinated, and now we can start to see the results. Deaths in this group are coming way down. (See NYT graphic).

Cambridge, Mass.-based Moderna said in its quarterly and year-end financial report that it has advance purchase agreements worth $18.4 billion in sales for its COVID-19 vaccine in 2021.

That windfall will surely cue up critics howling about profiteering. It is a lot of money, and it’s legitimate to ask questions in good faith about what the fair price ought to be. The companies, if they are smart and thinking about the long-term, will exercise restraint on this point, as advised by John LaMattina in Forbes. Some of the insider stock sales from executives at the companies last year were ham-fisted and regrettable, and some of the corporate communications were premature and undermined public confidence.

Then again, they — Moderna and Pfizer/BioNTech — are moving heaven and Earth to scale up production (140 million extra doses for the US in 5 weeks) beyond anything previously conceivable with the new mRNA and lipid nanoparticle delivery vehicles. They have done, and are doing, herculean work everyone thought impossible a year ago. The value to the world from this vaccine vastly exceeds what we’re paying. The total, cumulative cost of COVID-19 is estimated at $16 trillion in the US by Harvard University economists David Cutler and Larry Summers. We should remember to reward and incentivize achievements of this magnitude. Our willingness to pay today supports capital investments and further incentivizes future work against SARS-CoV-2 variants and other threats like flu.

Today (Feb. 26) is the long-awaited day when the FDA advisory committee reviews the safety and efficacy profile of J&J’s adenoviral vaccine candidate for COVID-19. Reasonable people can debate the merits of the evidence, but the full protection against severe disease and death, conducted in more than 40,000 subjects around the world under fast-changing conditions against tough new viral variants – I think J&J has a compelling new tool to offer the world. Add up the practicalities of a single-shot, refrigeration-only, low-cost, scalable-to-manufacture vaccine, and you have an essential new intervention to help vaccinate a world with more than 7 billion people. (FDA briefing document). See also Derek Lowe’s positive review at In The Pipeline.

Speaking of what it will take to crush COVID-19, let’s not forget about Novavax. The little company from Gaithersburg, Maryland, left for dead not long ago, has risen from the ashes in the most spectacular “only in biotech” way. Its protein-and-adjuvant vaccine has shown 90 percent efficacy in a study of 15,000 subjects in the UK, and its 30,000-subject study has now completed enrollment in the US and Mexico. While we wait for those results with bated breath, partnerships are in place for Novavax to scale up and deliver more than 1 billion doses of its vaccine to the world. Read this inspiring WSJ story about a remarkable comeback.

Diagnostics

Seattle-based Adaptive Biotechnologies, the company that sequences B and T cells of the adaptive immune system to develop diagnostics and treatments, said this week it has started offering the first T-cell based test to tell people if they’ve had COVID-19 recently or in the further past. Adaptive is offering the test with its partner, LabCorp, which has 2,000 sites where it can take the necessary blood draw. Adaptive is seeking an Emergency Use Authorization from the FDA for the test, but is able to market its test in the meantime as a CLIA-certified lab, a company spokeswoman said.

Treatments

The WHO Solidarity Trial, a massive study of 11,000 randomized participants conducted in the frenzied early days of the pandemic, looked at a lot of different repurposed antiviral therapies. The outcomes were not good. The latest NEJM paper is withering. “These remdesivir, hydroxychloroquine, lopinavir, and interferon regimens had little or no effect on hospitalized patients with Covid-19, as indicated by overall mortality, initiation of ventilation, and duration of hospital stay,” the authors wrote.

Science of SARS-CoV-2

The new tools of biology allow for incredible precision and speed. See this paper based on single-cell sorting technology used to identify the most potent neutralizing antibodies from COVID-19 survivors. “Extremely potent human monoclonal antibodies from COVID-19 convalescent patients.” Cell. Feb. 23. (Emanuele Andreano et al colleagues in Italy and London)

A couple of new variants are circulating. This time they are not being associated with some faraway place – it’s a place like many others in the US with long-festering, uncontained community transmission. “A Novel SARS-CoV-2 Variant of Concern, B.1.526, Identified in New York.” MedRxiv. Feb. 23. (Medini Annavajhala et al Columbia University). See also the latest on the CAL.20C variant, now known as B.1.427/B.1.429 and described by Carl Zimmer in the NYT.

How does the B.1.351 variant – aka the South Africa variant – appear to escape from neutralizing antibodies? An Oxford University team that did structure-function analysis on antibodies from convalescent sera and vaccine-induced antibodies found that receptor binding domain mutations provide tighter binding to ACE2. Cell. Feb. 17. (Daming Zhou et al Oxford University).

From China, researchers looked at the 501.Y.V2 variant and found no higher rate of infectivity, but they also saw a higher rate of escape from neutralizing antibodies. Again, they pointed to mutations affecting the receptor binding domain. Cell. Feb. 18. (Qianqian Li et al)

What is AI good for in the pandemic? Apparently, it’s being put to work hoovering up adverse event reports from people getting the COVID-19 vaccine to help researchers understand the real-world/real-time safety profile and put things in context. MedRxiv. Feb. 23. (Reid McMurry et al nFerence Labs)

The National Institutes of Health announced a call for scientific applications to tear into the many unknowns around Long COVID. In December, Congress allocated $1.15 billion over four years to help scientists explore what’s going on with the brain fog, fatigue, shortness of breath and other symptoms that so many people are suffering from. The scope and severity of this condition are only beginning to come into focus. Researchers at the University of Washington led by Helen Chu – who were remarkably well-positioned to respond to COVID-19 because of pre-existing infrastructure from the Gates Foundation-funded Seattle Flu Study – reported this week in JAMA on what they’ve learned about Long COVID since they pivoted in that direction in early 2020. According to 234 COVID-19 survivors who answered a research questionnaire, a full one-third (32.4 percent) reported at least one persistent symptom of COVID between 3 and 9 months after the original infection. If those numbers are a close approximation of the national incidence of Long COVID, then we are looking at an enormous toll of long-term chronic disease with perhaps 30 million cases of Long COVID (using a conservative estimate of 100 million infections).

Deals

Cambridge, Mass.-based Beam Therapeutics, the company developing base-edited gene therapies, used the leverage from its sky-high market capitalization (more than $5 billion) to acquire a little company to help with delivery. Beam agreed to pay $120 million upfront with its stock, plus another $320 million in milestones to acquire Guide Therapeutics. Guide is focused on nonviral delivery mechanisms of gene therapy, specifically with screening technology to identify lipid nanoparticles that can be delivered in vivo with “novel biodistribution and high selectivity for target cells,” the company said in a statement. Biomatics Capital, GreatPoint Ventures, and GV were the early backers of GuideTx.

Merck agreed to pay up to acquire another small company with a sky-high valuation – Watertown, Mass.-based Pandion Therapeutics. The price was $1.85 billion, or $60 a share. That’s more than double the previous day’s closing share price of $25.63. Pandion secured a $58 million Series A financing in January 2018 co-led by Polaris Partners, Versant Ventures and Roche Venture Fund. SR One and BioInnovation Capital also participated. See Timmerman Report coverage of the Series A about its approach to flip some of the learnings from immuno-oncology toward the treatment of autoimmune disease. Three years later, the company’s named lead candidate is an engineered IL-2 mutein fused to a protein backbone that’s supposed to selectively activate and expand regulatory T cells (Tregs) to tamp down overactive immune responses. Ulcerative colitis is the lead indication. Pandion also has PD-1 agonists in development for autoimmunity – obviously an area of interest at Merck, the maker of the market-leading PD-1 inhibitor for cancer.

South San Francisco-based Day One Biopharmaceuticals has told me on two occasions (the Series A financing and its recent $130 million Series B financing) that it planned to in-license another program to develop as a cancer drug specifically for kids. This week, it followed through. Day One worked with Merck KGaA to in-license pimasertib and another oral, highly-selective small molecule allosteric inhibitor of MEK 1/2, a key enzyme in the MAPK signaling pathway. Pimasertib has been through 10 clinical trials in about 900 patients with different tumor types. Day One said it believes there’s a scientific rationale to combine the MEK inhibitors with its existing pan-RAF inhibitor.

Somerset, NJ-based Catalent agreed to acquire Belgium-based Delphi Genetics, a plasmid DNA cell and gene therapy contract development and manufacturing organization. Financial terms weren’t disclosed.

Menlo Park, Calif.-based Grail agreed to work with Quest Diagnostics to collect the blood samples necessary for its Galleri product for blood-based early detection of cancer. Grail plans to start marketing in the second quarter. Quest has a network of 2,200 blood collection sites.

Financings

Waltham, Mass.-based Xilio Therapeutics, the developer of tumor-selective cancer therapies, raised $95 million in a Series C financing. Rock Springs Capital led. A tumor-selective version of IL-2, and a tumor-selective anti-CTLA-4, are being teed up to enter clinical trials in 2021.

San Diego-based Truvian Sciences raised $105 million in a Series C financing to push through to FDA approval for its benchtop blood diagnostic instrument that’s supposed to rival the capabilities central labs have for routine blood work. (TR coverage).

Cambridge, Mass.-based Orna Therapeutics raised $80 million in a Series A financing to advance work on circular RNA therapies, as opposed to the traditional linear kind. It’s based on research from the MIT lab of Dan Anderson, and was seeded and incubated by MPM Capital. (TR coverage).

Cambridge, Mass.-based Cellarity said it raised $123 million in a Series B financing to advance work on computational modeling of cell behavior for drug discovery. Flagship Pioneering founded the company, and was joined in the new round by BlackRock, The Baupost Group, Banque Pictet among others.

San Diego-based Vividion Therapeutics, the developer of precision medicines against previously undruggable targets for cancer and immune disorders, raised $135 million in a Series C financing. Logos Capital and Boxer Capital of Tavistock Group co-led.

San Francisco-based Miroculus completed a $45 million Series B round to develop lab automation tools. Cota Capital and Section32 joined the round.

San Diego-based Halozyme, the company that turns IV biologics into subcutaneous formulations, said it agreed to borrow $700 million in a convertible note offering due in 2027. The debt converts to equity if Halozyme stock reaches $77.17 a share. It’s at $47.17 now.

Beijing-based YishengBio, the developer of cancer and infectious disease therapies, raised $130 million in a Series B financing. Oceanpine and OrbiMed co-led.

Shanghai-based WuXi Diagnostics secured a $150 million Series B financing. Thermo Fisher joined the round. WuXi Diagnostics said in a statement that it is “the first platform company in China focusing on integrated diagnostics.”

FDA Leadership

Who will be the next FDA commissioner, and what will it mean for industry? The former president of R&D at Pfizer and a board member at Puretech Health looks at the contrasts between candidates Janet Woodcock and Joshua Sharfstein. Forbes. Feb. 24. (John LaMattina)

Our Shared Humanity

Too many Americans don’t learn our country’s history, and don’t want to grapple with the long-term consequences. It’s important for people to know that things like the infamous Tuskegee experiment happened. It harmed African Americans. It left an understandable legacy of mistrust.

Even those who are aware sometimes take home the wrong lesson. Tuskegee can sometimes unwittingly be used for blame-shifting onto African Americans. We would do better by acknowledging there are reasons why so many people are mistrustful of the healthcare system in the urgent now, and that racism in healthcare isn’t a thing of the past.

We would do better by asking ourselves: Are there things our healthcare systems can do to foster more trust in vaccines?

As USC social work professor Karen Lincoln put it in an interview with San Francisco public radio KQED:

If you continue to use it as a way of explaining why many African Americans are hesitant, it almost absolves you of having to learn more, do more, involve other people – admit that racism is actually a thing today.

Why might some people still be mistrustful of those urging use of the vaccine? Sadly, we have to listen to reports like this from NPR about San Francisco-based One Medical, which has allowed its well-to-do concierge medicine clients to skip ahead in the vaccine line. It’s more healthcare inequity in real-time.

Racial inequity is not a thing of the past. It’s not someone else’s problem. It will not resolve itself with time. We all pay a price for failing to fix this. Biopharma has a part to play, and some companies are busy doing the work. It will require vigilance.

Science

“Muscarinic Cholinergic Receptor Agonist and Peripheral Antagonist for Schizophrenia.” NEJM. Feb. 25. (Stephen K. Brannan, Sharon Sawchak, Andrew C. Miller, Jeffrey A. Lieberman, Steven M. Paul, and Alan Breier) For the backstory on xanomeline-trospium, being developed as KarXT by Boston-based Karuna Therapeutics, listen to Karuna CEO Steve Paul on The Long Run podcast.

“Phage-assisted evolution of botulinum neurotoxin proteases with reprogrammed specificity.” Science. Feb. 19. (David Liu et al Broad Institute and Harvard University). (See TR coverage of the latest spinout from Liu’s lab, Exo Therapeutics, December 2020).

“Idecabtagene Vicleucel in Relapsed and Refractory Multiple Myeloma.” This is the paper describing the BMS-Bluebird cell therapy directed at the BCMA antigen. The companies are seeking FDA approval. NEJM. Feb. 25. (Nikhil Munshi et al)

“Risdiplam in Type 1 Spinal Muscular Atrophy.” Genentech’s risdiplam (Evrysdi) helped 19 of 21 infants with spinal muscular atrophy Type 1 survive without permanent ventilation. One-third of the infants, 7 out of 21, were able to sit without support for at least five seconds – not normal in the natural course of disease. NEJM. Feb. 24. (Giovanni Baranello et al FIREFISH Working Group)

Book Review

The Genome Odyssey. From Code to Clinic. WSJ. Feb. 24. (David Shaywitz)

Personnel File

Cynthia Pussinen joined Philadelphia-based Spark Therapeutics, the Roche gene therapy unit, as chief technical officer.

Heidi Hagen was named interim CEO of Boston-based Ziopharm Oncology, a cancer immunotherapy company. She replaces Laurence Cooper effective immediately. James Huang was named executive chairman. Hagen, a cell therapy expert and co-founder of Vineti, was the lead independent director at Ziopharm.

Jerry Cacia joined South San Francisco-based Graphite Bio, a gene editing company, as chief technical officer. (TR coverage, Sept. 2020)

New York-based Intercept Pharma, the NASH drug developer, said Jason Campagna, the chief medical officer is resigning effective Mar. 5.

Waltham, Mass.-based Tscan Therapeutics hired Brian Silver as chief financial officer. He will step down from the board of directors to take the operating job. He’s a former investment banker, so you can probably set you can set the over/under date for when this company goes public.

Regulatory Action

The FDA placed two Bluebird Bio clinical trials for sickle cell disease on clinical hold. It was a formality, after the Cambridge, Mass.-based company already voluntarily paused the studies after learning of two cases of patients on its treatment who developed cancer. The investigation is ongoing into what caused the cases of cancer, and whether it’s related at all to the treatment. The world of gene therapy is watching.

AbbVie won another FDA label expansion for the aging franchise of adalimumab (Humira). This one is for pediatric patients with moderate to severe ulcerative colitis.

Restoring Honest Public Discourse

While we are busy trying to crush the pandemic, we have to stitch back together the fabric of a society ripped apart by 24/7 information war.

There is such a thing as honest inquiry and debate that doesn’t devolve into ad hominem attacks and bottomless nihilism for fun and profit.

Carl Bergstrom, a University of Washington professor and co-author of “Calling Bullshit” offers a glimpse of how to dig ourselves out of this ditch. It’s OK for people to disagree. It’s OK to change one’s mind based on new data. There isn’t *always* some sinister hidden agenda or dishonest subterfuge going on with people we disagree with on one issue or another.

That’s true for COVID-19, for drug pricing, and for a thousand other issues we need to be able to think about and discuss like intelligent adults.

There has to be a way forward to discuss issues without constant thermonuclear infowarfare. I’ve seen some encouraging signs. I hope to see more. Otherwise, the infowar will never end, and no one will win.

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Biotech has always depended on the ideas and energy of young people.

But it’s time to think more broadly about how biotech and young people relate.

Let’s start with young people.

Recall the column from two weeks ago, which cited a 2017 Pentagon study. That study found that a full 71 percent of Americans between the ages of 18-24 aren’t eligible to serve in the US military. Three main reasons stand out as disqualifiers – obesity, criminal records, and lack of a high school diploma.

Let that sink in for a minute.

Think about how many millions of young people whose lives were going off the rails in the 2010s, because of long-simmering societal ills.

That was clear before the pandemic.

Now, consider how many young people are struggling, especially with mental health issues exacerbated by the pandemic.

All of us need hope. This is a hard time. But young adults need to be especially optimistic when making some of the big choices in life — what career to pursue, where to live, who to marry, how to maybe someday buy a home. Maybe some young people would make different life choices, and be more attractive to employers, if they had more hope.

What does any of this have to do with biopharma?

Consider manufacturing.

We are in the early phase of a cell and gene therapy revolution.

About 900 Investigational New Drug (IND) applications for cell and gene therapies were on file with the FDA as of February 2020. More are coming. Every week, more capital flows into startups aspiring to churn out more of these valuable next-generation medicines.

The opportunity for growth is obvious. There are more than 1,000 clinical trials for cell and gene therapies that could enroll as many as 60,000 patients worldwide, according to the Alliance for Regenerative Medicine. The FDA says it anticipates approving 10-20 such cell and gene therapies per year by 2025.

Whatever the numbers are, some of these specialized therapies will pan out. Some will get FDA approved. Some will need to scale up to meet global demand.

Jobs will have to be created in specialized, customized manufacturing plants to make these cell and gene therapies. Advanced biologics aren’t going away, either. The making of these medicines can’t be completely automated, and shouldn’t be entirely shipped offshore. There are national security reasons, national competitive advantage reasons, logistical shipping reasons, and workforce development reasons to keep most of this work on US soil.

There are large swaths of the map outside of San Francisco, New York and Boston where this work can be done inexpensively.

Biotech can choose to invest in people, equipment, and places to get ready for this manufacturing boom.

Actually getting this done will require a shift in employer mindset. Not everyone needs a 4-year degree to work in a cell therapy manufacturing plant. Some of these jobs are better suited to people with 2-year community college training.

These can be high-salary/good-benefits/steady paycheck blue collar jobs. As biotech matures as an industry, it will depend on more of these jobs. When the industry invests in people to do this skilled work, it makes good long-term economic sense to pay high wages to keep people motivated and productive and loyal.

I grew up in the industrial and agricultural economy of the Upper Midwest. The high salaries and good benefits offered by companies like John Deere were considered the ticket to middle-class life. There was pride and dignity in this work for people like my Dad. He got a community college certificate to become a welder. He got a job with that skill at John Deere in Dubuque, Iowa. He thought he had it made.

He lost that job in a round of layoffs when I was in preschool.

Jobs like that today are scarce. My Dad had to reinvent himself a couple times to provide for our family.

Now I live in Seattle. It’s a tech metropolis. But before the tech boom, it was put on the map by Boeing. Tens of thousands of blue-collar, union workers built Seattle. They earned good wages and solid benefits. They took pride in work assembling “the best airplanes in the world.” That’s what Boeing commercial airplanes chief Alan Mulally, a boy from Kansas, used to say.

Like any for-profit industry, of course, biotech isn’t in the business of creating jobs just for the sake of creating jobs. But it is an industry on the upswing. It needs to think long-term about people to meet long-term business needs.

Young people seeking purpose could step up for this line of work, whether they aspire to be scientists or blue-collar machine operators.

What if biotech were to open up to more people without 4-year or advanced college degrees? What kinds of manufacturing jobs, in particular, might be doable for people with community college training? Would it make sense to invest in apprenticeship programs, and then continue to invest in training people to keep skills updated over an entire career?

Might some of these people become longtime, loyal, productive employees? Might some rise through the ranks to make even greater contributions to their companies? Might the kids of manufacturing workers grow up to be scientists and executives of tomorrow?

Biotech can be the new Boeing, the new John Deere. It will require extending a hand to young people. It will require taking chances on people who might not otherwise get one.

It will take some imagination. But the potential is clear. Biotech, as I wrote here a few weeks ago, is radiant at a dark time.

Let’s make biotech into a beacon of hope for young people.

An Ominous Development at Bluebird

Cambridge, Mass.-based Bluebird Bio, the cell and gene therapy company, is experiencing a nightmare. The company said it halted clinical trials of its Lentiglobin gene therapy for sickle cell disease after seeing a report of a patient dosed five years ago now coming down with acute myeloid leukemia. Around the same time, the company said it learned of another case of a patient getting myelodysplastic syndrome (MDS), a pre-leukemia syndrome. The company hasn’t been able to confirm whether the cancerous conditions are related to its lentiviral vector. But because that possibility can’t be ruled out, and because its only marketed therapy uses the same vector, it shut down sales and marketing of that other treatment for beta-thalassemia in Europe and the UK.

Shares in Bluebird crashed, down 41 percent in value from $45.76 last Friday to $26.95 at yesterday’s close. Many investors have to be wondering about the decision Bluebird recently announced to split into two companies – one focused on genetic diseases, and the other focused on cancer. The future for genetic diseases will hinge on what investigators uncover in days and weeks ahead about what might have caused the severe adverse events.

Analyst Raju Prasad of William Blair downgraded the stock immediately, as many investors surely aren’t going to hang around long to find out. At best, the situation means Bluebird will suffer from a significant delay. At worst, if the vector ends up looking like the culprit, it could be devastating to the company and send a chill through investor sentiment in other gene therapy companies. It’s too early to say yet what the answer will be. “While there is precedent of [sickle cell disease] patients to have an increased risk of leukemia compared with the general population, we believe the complexity of the issue is likely to lead to a thorough investigation and potentially a significant delay to trial timelines and/or change to trial design,” Prasad wrote in a note to clients.

Vaccine Access and Distribution

Moderna said it expects to deliver 100 million doses of its mRNA COVID-19 vaccine to the US government by the end of March, another 100 million by the end of May, and another 100 million by the end of July. Those are faster timelines than the company had agreed to previously, and enough for this company alone to fully vaccinate almost half of the US population with a two-shot regimen. The company also agreed to provide an additional 150 million doses to the European Union, bringing the total doses ordered there to 310 million in 2021. The European Commission also secured an option for another 150 million doses in 2022. It’s all pretty breathtaking to consider, knowing the pressure to move this fast with global-scale manufacturing of a novel mRNA vaccine technology with lipid nanoparticle delivery.

Pfizer and BioNTech said they will supply 200 million extra doses of its mRNA COVID-19 vaccine to the European Union, bringing its total supply agreement there to 500 million doses. The plan is to deliver by the end of 2021. The European Commission obtained an option to request another 100 million doses. Last week, the companies said they upped their commitment to the US government by 100 million doses, bringing its total commitment to the US government to 300 million doses.

Novavax reached an agreement with GAVI to provide 1.1 billion cumulative doses of its protein-adjuvant vaccine for COVID-19 through the COVAX facility, to provide vaccine access to people in low-income, middle-income, and high-income countries. Gaithersburg, Maryland-based Novavax is working in partnership with Serum Institute of India to boost manufacturing output.

Johnson & Johnson, the developer of a single-shot vaccine for COVID-19 that’s due to go before an FDA advisory committee for review Feb. 26, is still planning to supply 100 million doses to the US government in the first half of 2021. But it’s unclear how many doses will be available in March and April, assuming it wins Emergency Use Authorization from the FDA. Tony Fauci told CNN he’s “a little disappointed” in the expected number of doses available from J&J this spring.

While the race is on to vaccinate in wealthy countries, Science magazine reporter Kai Kupferschmidt notes that not a single healthcare worker in Africa has been vaccinated, until South Africa started this week.

Science of SARS-CoV-2

Reduced Neutralization of SARS-CoV-2 B.1.1.7 Variant by Convalescent and Vaccine Sera. This study isn’t quite as bad as the headline suggests. The authors write, “widespread escape from monoclonal antibodies or antibody responses generated by natural infection or vaccination was not observed.” Cell. Feb. 18. (Piyada Supasa et al Oxford University)

Transmission of COVID-19 in 282 clusters in Catalonia, Spain. This study shows that people with high viral loads of SARS-CoV-2 are main drivers of transmission. The Lancet. Feb. 2. (Michael Marks et al).

Densely sampled viral trajectories suggest longer duration of acute infection with B.1.1.7 variant relative to non-B.1.1.7 SARS-CoV-2. Why does the new variant seem so concerning? One reason, according to this Harvard study, is that it appears to last longer, naturally creating more opportunities for transmission. Digital Access to Scholarship at Harvard. Feb. 10 preprint. (Stephen Kissler et al)

Science

Inhibitory CD161 receptor identified in glioma-infiltrating T cells by single-cell analysis. Cell. Feb. 15. (Kai Wucherpfennig et al Broad Institute). Researchers at the Broad Institute analyzed tumor-infiltrating T-cells with single-cell analysis, and identified the gene that encodes for CD161 which appears on NK cells and T cells. It’s the basis for cell therapy work being done at Waltham, Mass.-based Immunitas, which raised a $39 million Series A financing in 2019. (Company statement).

Vaccines

Neutralizing Activity of BNT162b2-Elicited Serum — Preliminary Report. NEJM. Feb. 17. (Pfizer / BioNTech research teams). The mRNA vaccine showed in vitro that it can neutralize the SARS-CoV-2 virus with the B.1.351 variant to the spike protein (more widely known as the South Africa variant). (Pfizer statement).

Brazil is trying to answer one of the key outstanding questions about the COVID-19 vaccines. Do they help reduce transmission of the virus? It’s difficult to run such a study, but the Brazilians are trying a pilot project – vaccinate an entire town of 45,000 people to see what happens. (WSJ coverage).

Vaccine Hesitancy

The myth of ‘good’ and ‘bad’ Covid vaccines. This article discusses how false perceptions about the next batch of vaccines could complicate the vaccine hesitancy story, especially in communities of color. STAT. Feb. 17. (Helen Branswell)

Therapeutics

UK-based Synairgen said it started enrolling in a Phase II/III study with an inhalable interferon beta treatment for mild-to-moderate COVID-19 patients who aren’t hospitalized.

South Plainfield, NJ-based PTC Therapeutics said it started the second stage of a Phase II/III trial of an oral therapy it developed against a cellular enzyme, dihydroorotate dehydrogenase (DHODH). By targeting this enzyme instead of a protein on SARS-CoV-2, PTC hopes to inhibit viral replication and calm down the excessive inflammatory responses that result from infection. CEO Stu Peltz noted in a statement that the drug could be taken at home, as well as in the hospital, and that if it’s effective, it ought to work against wildtype virus as well as the variants.

Diagnostics

Thermo Fisher Scientific said it secured FDA Emergency Use Authorization for the TaqPath RT-PCR diagnostic test, which can tell the difference between COVID-19, Flu A and Flu B in a single sample. It’s for CLIA lab use.

Financings

New York and San Francisco-based Adjuvant Capital, founded in 2019 but quiet until this week, announced its initial $300 million fund to invest in public health needs that deliver social and financial returns. Merck, Novartis, IFC, the Bill & Melinda Gates Foundation, Children’s Investment Fund Foundation, and Dalio Philanthropies are among the LPs supporting the team led by Glenn Rockman and Jenny Yip. (TR coverage by Anika Gupta).

Cambridge, Mass.-based Centessa Pharmaceuticals raised $250 million in a Series A, to roll up 10 Medicxi Ventures-backed asset-centric virtual biotech companies into an umbrella organization. Saurabh Saha, formerly of Bristol-Myers Squibb, is the CEO, while Moncef Slaoui, the former chief scientific advisor of Operation Warp Speed, is the CSO. (Timmerman Report coverage).

Durham, NC-based Humacyte went public through a SPAC deal that brought in $255 million in cash proceeds to advance its work in making universally implantable, off-the-shelf human tissues for transplant at large commercial scale. Fresenius Medical Care, OrbiMed, Monashee Investment Management, and Alexandria Venture Investments were among the participants in the related PIPE deal.

Cambridge, Mass.-based Elicio Therapeutics, an immunotherapy company targeting the lymph nodes, raised $73 million in a Series B financing. It didn’t name the investors, but said there were “multiple strategic and international investors.”

San Francisco-based Excision Biotherapeutics said it raised $60 million to develop CRISPR-based antiviral therapies. Greatpoint Ventures led.

Cambridge, Mass.-based Immune ID raised a $17 million seed financing led by Longwood Fund, and which included Arch Venture Partners, Pitango HealthTech, In-Q-Tel and Xfund. The company is working to identify therapeutic targets based on antibody interactions that drive immune diseases.

New York and Guilford, Conn.-based Quantum Si, a proteomics company founded by Jonathan Rothberg, went public through a SPAC transaction with HighCape Capital. The deal involves $540 million of gross proceeds to the company, including a $425 million private investment in a public equity (PIPE) that included Foresite Capital Management and Redmile Group, among others.

Boston-based Gamida Cell, a cell therapy company, raised $75 million in a convertible debt offering with Highbridge Capital Management. The cash is supposed to keep the company going into the second half of 2022.

Seattle-based Ozette raised $6 million in a seed financing to advance AI for immune system monitoring. Madrona Venture Group led, and was joined by the Allen Institute for Artificial Intelligence (AI2) and Vulcan Capital.

Houston-based Iterion Therapeutics pulled in $17 million in a Series B financing led by Lumira Ventures to develop a potent and selective nuclear beta-catenin inhibitor for desmoid tumors.

Deals

Charles River Labs agreed to acquire Cognate Bioservices, a cell and gene therapy contract manufacturing organization, for $875 million in cash.

Novartis and the Bill & Melinda Gates Foundation agreed to work on a more affordable, globally accessible in vivo gene therapy for sickle cell disease. The Gates Foundation has agreed to fund “a research team within NIBR wholly dedicated to developing an approach to delivering this potential treatment.” Terms weren’t disclosed.

Cambridge, Mass.-based Cytovia Therapeutics agreed to work with Cellectis on TALEN-engineered iPSC-derived Natural Killer cell therapies. Cellectis will get either $15 million in equity in Cytovia, or $15 million in cash, by the end of 2021.

GSK and San Francisco-based VIR Biotechnology agreed to expand the collaboration that started in April 2020 to work on neutralizing antibody therapies for COVID-19. The expanded deal now includes other viral infectious diseases, including influenza. GSK will partner on development of an intramuscular injection that’s supposed to work as a universal prophylactic for influenza A, and that has completed a Phase 1 trial. Next-generation antibodies to prevent or treat flu are also part of a three-year research collaboration. GSK is agreeing to pay $225 million upfront, plus make an additional $120 million equity investment.

Eli Lilly agreed to pay $125 million upfront to South San Francisco-based Rigel Pharmaceuticals to co-develop Rigel’s receptor-interacting serine/threonine-protein kinase 1 (RIPK1) inhibitor. The deal is global, exclusive, and covers all therapeutic indications.

San Francisco-based Nektar Therapeutics said it will receive as much as $150 million from SFJ Pharmaceuticals, a company backed by Abingworth and Blackstone Life Sciences, to develop bempegaldesleukin (BEMPEG), an IL-2 agonist in combo with Merck’s pembrolizumab (Keytruda) for head and neck cancer. Nektar will serve as the sponsor of the Phase II/III study. It has agreed to pay milestones over 7-8 years to SFJ, if it wins regulatory clearance.

Data That Mattered

Merck and AstraZeneca said they were planning to halt a Phase III trial early, at an interim analysis, because a data monitoring committee reported the drug has demonstrated superiority over placebo. The drug, olaparib, (Lyparza), is a PARP inhibitor being tested in the adjuvant setting for germline BRCA mutated, high-risk HER2 negative breast cancer after local treatment and neoadjuvant or adjuvant chemotherapy. Data will be presented at a medical meeting.

Personnel File

Sara Nayeem joined New York-based Avoro Ventures as a partner. She was previously with NEA for 12 years. She will source and manage biotech investments from early-stage to late-stage to crossover, the firm said in a statement.

Kizzmekia Corbett, the mRNA vaccine scientist at the NIH, was named to the TIME100. Read about her contribution in this essay by Tony Fauci.

Salt Lake City-based Recursion, the company using AI and other tech tools for drug discovery, hired Louisa Daniels as chief legal officer and general counsel. She was a vice president at Pfizer. (TR coverage of Recursion, Sept. 2020).

BIO hired Shaye Mandle as chief operating officer. He comes to the biotech trade association with experience in restructuring and rebranding Minnesota’s Medical Alley Association.

Westlake Village Biopartners hired Peter Calveley as chief operating officer.

South San Francisco-based Day One Biopharmaceuticals, the developer of treatments for kids with cancer, hired Charles York as chief operating and chief financial officer. (TR coverage of Day One’s $130m Series B round, Feb. 2021).

Boston-based Dewpoint Therapeutics added Regina Barzilay, Distinguished Professor for AI and Health at MIT, to its board of directors. (TR coverage of Dewpoint, Apr. 2019)

Cambridge, Mass.-based Evelo Biosciences, a microbiome-based therapeutics company, named John Hohneker to its board of directors. (The Long Run podcast with Evelo CEO Simba Gill, Nov. 2020).

Regulatory Action

Amgen said the FDA has granted Priority Review status to its application to market sotorasib, the KRAS G12C-directed small molecule drug for non-small cell lung cancer. The PDUFA review deadline is Aug. 16, but it wouldn’t be a surprise if the FDA acted sooner to approve this potentially pathbreaking medicine against one of the classic hard targets of oncology.

South San Francisco-based Cortexyme said its atuzaginstat Phase II/III trial for Alzheimer’s disease is on partial clinical hold, following an FDA review of “hepatic adverse events” – aka liver toxicity. The events were reversible and didn’t appear to cause long-term damage, the company said.

Novartis secured an expanded label from the FDA for sacubitril/valsartan (Entresto). The drug’s prescribing information is now thought to cover about 5 million of the estimated 6 million people in the US with forms of chronic heart failure.

Genomic Surveillance

The CDC, newly empowered to lead in the pandemic, pledged a $200 million “down payment” on improved genomic surveillance of SARS-CoV-2 and its increasingly troubling variants. For the world leader in genomics, this is an embarrassing late date to get moving in a nationally coordinated way to help us adapt our behavior as the virus evolves. We are sequencing fewer than 1 percent of samples, and expert say we need to get to 5 percent, and do it with samples from around the country, if we’re going to have an adequate surveillance system.

See below this Twitter exchange with a genomic surveillance expert, explaining why so little sequencing of viral samples was being done as recently as December. We late to the game, and have some serious catching up to do.