12
May
2022

Changing the Balance of Power

Amanda Banks, MD

Early in my career as a physician, I took care of a woman who died from complications of an abortion procedure.

The patient had traveled to the blue state where I practiced, from a red state where she lived that restricted abortion access, to obtain care she couldn’t find or afford at home. She had previously gotten a procedure performed by a reckless physician who ultimately went to jail for several counts of murder.

She had survived being a refugee from a country that viciously and routinely violated human rights, only to die in an ICU a few months after her arrival in the US. Our team kept her on life support until her family could arrive, when care was withdrawn at their request.

As the US Supreme Court stands on the precipice of overturning Roe vs. Wade, and multiple states consider legislation criminalizing women who decide they must terminate their pregnancies, I cannot stop thinking about this woman and her family. We are about to enter a world where tragedies like this will become far more common.

What is this world, and how did we get here?

The degree to which our country has become polarized on the issue of a women’s right to determine her own reproductive health choices is extreme, but this isn’t about political views. It is about power.

We live in a country, and in a world, where power is concentrated in the hands of  very few. While there are many powerful people who use their influence for positive change, it only takes a few to make catastrophic decisions that affect people with no power, no voice. The powerful are usually men. The powerless are disproportionately women, people of color, poor people without resources.

The women who will most feel the pain and consequence of being stripped of their rights to decide whether, when and how to have children are mainly poor women, black and brown women. If Roe vs. Wade is overturned by the Supreme Court and many states follow through with plans to ban or greatly restrict access to legal abortion, women from these red states will consider traveling long distances to obtain reproductive health services in states that still have safe, legal access to abortion.

The hurdles may be insurmountable in many cases.

Rich women in blue states will likely continue to enjoy these rights, at least for now, perhaps until the powerful reach for even more control.

Look around the world and we see this dynamic playing out on a terrifying scale: In Ukraine, where Vladimir Putin’s thirst for power has made civilian targets of women and children, who are killed, orphaned, trafficked and sold. In Afghanistan, where last weekend the Taliban government ordered women to remain covered in public or their male relatives would be jailed. The list is long.

And yet, we have power too. We have platforms to galvanize our industry as a whole to stand up for those who cannot stand up for themselves.

It is our duty.

It is in fact also our mission (or should be) to improve the health of everyone equally.

We can and should offer generous benefits to our employees living in states that are likely to restrict abortion to obtain the care they need if they have to travel.

We can choose to open subsidiaries and start companies only in locations that will continue to provide reproductive healthcare, and shift away from those that do not.

We can donate money and time to organizations providing aid inside Ukraine and to Ukrainian refugees, and to those working to lift people out of poverty in our own communities.

We can diversify our own leadership by including more women and people with different racial, ethnic and socioeconomic backgrounds on our boards and in our C suites.

We can make our medications and technologies accessible to everyone regardless of their ability to pay.

We must vote.  

These actions may seem disjointed but they are not: they are tied together by giving power and resources back to people from whom it has been denied. They matter. They will add up. They will create a power counterbalance at a time where we cannot afford to stay silent.

I think of my son and daughter, and wonder, like all mothers do, what kind of country and world they will ultimately find themselves in, and how they might use their own power to help shape a better one.

Nothing I could have done would have changed the outcome for my patient or her family all those years ago. But I remember her, and tell her story, so that we can all remember how real this is, and how perilously close we are to a world where all choice is stripped away. Stand up.

11
May
2022

The Limits of Biomedical Innovation, and Why We Should Embrace Them

Alex Harding, MD., senior vice president, Remix Therapeutics; internal medicine physician, MGH.

Last October, I wrote for this publication about the emergence of Antibody-Drug Conjugates (ADCs) for cancer, based on my father’s experience being treated with Padcev for bladder cancer. A few months later, I posted on Twitter that, while Padcev had stopped working for my father, he had since started on another ADC called Trodelvy.

His tumors had shrunk. He was taking advantage of the time he had been given to do things he enjoyed. My editorial here and subsequent tweet were celebrations of biomedical innovation and all that has been achieved in the last 20 or so years to improve and extend patients’ lives.

The celebration ended in early April. I found myself sitting in an armchair pulled up alongside my father in his hospital bed at Johns Hopkins Hospital in Baltimore. While his cancer remained in check, bacteria had gotten into his bloodstream, causing him to develop the severe weakness, confusion, and low blood pressure characteristic of septic shock. Worse, some of those bacteria had deposited onto the aortic valve of his heart, a condition called endocarditis.

Even though the team at Johns Hopkins had given him antibiotics that eradicated the bacteria from his bloodstream, my dad’s condition did not improve. His blood pressure remained low. He began to accumulate fluid in his legs and lungs, an indication that his heart was not pumping effectively. The bacteria had damaged the aortic valve so much that, while his heart pumped blood out of the heart every time it contracted, the blood rushed right back into the heart through the leaky aortic valve each time the heart relaxed.

He was hospitalized for three weeks. While he improved over the first week with antibiotics and treatment for his low blood pressure, he got worse over the next two weeks. He began to grow weaker, and as fluid filled his lungs, he needed more and more oxygen support. My dad’s heart had failed.

He was dying.

Over the preceding year and a half, Dad had been on four different anti-cancer medication regimens. The treatments came with significant side effects, but most of them also worked effectively to shrink his tumors. He tenaciously coped with side effects from his treatments and continued to lead a fulfilling life. But now, with his heart failing him, that had changed. There would be no more ADCs, no genetically-targeted anti-cancer drugs, no medicine that would miraculously restore life. After being a beneficiary of the remarkable successes of today’s biomedical innovation efforts, he now faced its limits. My dad, Rob Harding, died on April 7. He was 75.

There are a couple of things you should know about me as you read this.

First, I love drugs (the legal kind). As a physician, the main tool at my disposal to treat patients is my electronic prescription pad. As a biotechnology professional, my singular goal is to help discover and develop new drugs. While some have critiqued modern cancer drugs for offering marginal benefit to patients at the expense of debilitating side effects, those critiques don’t apply to my father. His bladder cancer responded to the treatments he received in stunning ways. While he did have major side effects from the medicines, the benefits unequivocally outweighed the downsides for him.  I am not a luddite who resists technological advances. On the contrary, I yearn for more progress that can help patients live longer, better lives.

The second thing you should know about me is that I have spent a lot of time with dying people—not only my parents (my mother died of ALS one year ago), but also the countless patients I have treated as a physician who were approaching death. That experience has given me perspective on how to care for a dying person.

Patients are cared for at the bedside, not in the lab, and that aphorism certainly applies to dying patients. Sometimes, when a patient is facing death, the doctor’s job is to find a medicine to extend their life. Sometimes, a patient facing death needs a treatment that eases their suffering. And sometimes, when death is coming, what’s needed is not a medicine at all, but an attentive ear or a gentle hand—simply being there.

As someone who loves drugs, the hardest thing for me was knowing when to stop throwing new things at the problem. There was always one more drug we could try: a new anti-cancer drug that might erase his liver metastases more completely than the current therapy; perhaps a different antibiotic could better address the infection on his heart; maybe the right medical cocktail could restore his heart’s strength.

How could I step back from my reflex to reach for a new medicine?

As I sat facing my father in his hospital room, I thought through the events over the prior three weeks. I looked at my dad as he lay still in bed. Eventually, I could see that he did not need another medicine. His hand was cool to my touch and puffy with accumulating fluid. I squeezed his hand and he squeezed mine.

All doctors live for the opportunity to save a life. It’s what we dreamed about when we started medical school, and the thrill of making the right diagnosis and giving the right treatment to a patient teetering on the precipice is what spurs most of us to keep going. Indeed, the entire artifice of the biomedical innovation machine—academic labs, biotechnology start-ups, pharmaceutical companies—revolves around the ideal of saving a life. Sure, the FDA describes “Feels, Functions, or Survives” as the key criteria to determine whether a drug should be approved. “Feels” and “function”–in other words, improved quality of life—certainly matter a great deal, but we all know that drug discovery glory goes to increasing survival.

And yet, a universal, inescapable truth will eventually confound all our efforts to preserve life. It is a fact that is both utterly obvious and rarely discussed: Everyone we love will one day die.

If you are lucky enough to live a long life, you will probably accompany people you love on their journey toward death, too. It’s worth thinking about how you will handle such a situation.

In the biomedical professions, we tend to delude ourselves into thinking that most medical decisions have been studied with sufficient precision that they can be considered a matter of science. Often, such faith in science is exaggerated. The decision on when not to continue aggressive measures, in particular, remains firmly planted under the domain of art, detached from hard data.

In a world where data is king, letting go of scientific endeavor at the end of life can feel like a loss of control. It is difficult to concede that our scientific arsenal is no match for nature. And yet, doing so can be exactly what is needed to provide someone you love with comfort and dignity as they die. It does feel like losing control. But it is also a way to bring what’s important back into focus. All the sophisticated technologies—the drugs, devices, and equipment that form the apparatus of biomedical innovation and its efforts to prolong life, dissolve away. What’s left is the person you love.

Hard as it was, I had sat with enough sick patients to know. As I sat there with my father, I saw that it was time to embrace the limits of scientific progress. It was time to sit together, me and him. No more IVs or EKGs, no more pills or blood draws. Just two people.

In that hospital room, Dad and I talked about the summer vacations our family had taken when I was a kid. He had particularly fond memories of our trip to the Grand Canyon when I was 8, and when I was older, to Brazil. He mentioned a few people he wanted to make sure my brother and I invited to his memorial service. We reminisced about going to baseball games together at Camden Yards. He had taken me to the game in 1995 when Cal Ripken, Jr. tied Lou Gehrig’s record for consecutive games played.

After we talked for almost an hour, Dad needed a break. He dozed off. I squeezed his hand a little tighter.

9
May
2022

Fighting Cancer With Food and Drugs: Lew Cantley and Sid Mukherjee on The Long Run

Today’s guests on The Long Run are Lewis Cantley and Siddhartha Mukherjee.

They are co-founders of San Francisco-based Faeth Therapeutics.

Lewis Cantley

Cantley, who recently moved to Dana Farber Cancer Institute, is a scientist well-known for his work on cancer metabolism. He discovered the PI3kinase pathway that’s an important regulator of normal cell growth, proliferation, metabolism – and which can become activated to promote the survival and proliferation of cancer cells. This work inspired many cancer drug discovery efforts across the industry over the past 15 years.

Mukherjee is a physician-scientist at Columbia University. He runs a research lab, treats cancer patients, writes bestselling science books and also finds time to start biotech companies.

Cantley and Mukherjee have joined forces recently around a provocative idea.

Siddhartha Mukherjee

They are exploring the role of nutrition in the treatment of cancer. Through this startup company, they are betting that cancer patients will live longer and better lives on carefully calibrated diets. These diets are designed to be taken in combination with a PI3kinase inhibitor, some common chemotherapy, or a common diabetes treatment that lowers blood sugar.

Essentially, they want to reprogram metabolism to slow the growth of tumors and give conventional treatments a better chance to kill the cancer.

Nutritional science is a minefield for a bunch of reasons, which we touch on in this conversation. The company has a lot of work to do to prove its hypothesis. The company is beginning to enroll patients in clinical trials. It should know within a few years whether it’s on the right track.

For those who want to read up on the science, Faeth has compiled a list of five foundational research papers that were published in Nature and Science between 2013 and 2019. If you read them all back-to-back, at a bare minimum, it really makes you wonder how the world of cancer treatment might look different if everyone were put on managed diets in combination with standard treatments. You can see a link to those papers here.

Now before we get started, a word from the sponsor of The Long Run.

 

Alpenglow sheds new light on pharmaceuticals with AI-powered, 3D spatial biology. Pathology is an essential component of drug development, yet it is stuck in archaic times by looking through 2D slides. Alpenglow has developed an end-to-end drug development solution with proprietary 3D imaging, cloud processing, and AI analysis to digitize entire 3D tissues, providing 250 times more data and deeper insights. Learn how Alpenglow can illuminate your path to breakthrough results at alpenglowbiosciences.com.

Now, please join me and Lew Cantley and Sid Mukherjee on The Long Run.

5
May
2022

An Old Idea Whose Time Has Come

Luke Timmerman, founder & editor, Timmerman Report

People are returning to the office. Many are rethinking the basics of work.

So many people are exhausted and anxious. Biotech leaders are thinking carefully about how to proceed. An R&D-based industry needs people in environments that allow them to be energized, creative, collaborative.

Here’s one simple idea: Walking meetings.

The “walk and talk” business meeting isn’t new. But we are learning more about its value in the workplace. We know from a growing body of psychological research that walking meetings spur creative thinking (see this 2014 paper from Stanford University researchers and this 2016 publication from Iowa State University psychologists). We also know sedentary lifestyles are unhealthy, and can be deadly over time (see this 2017 paper in the Annals of Internal Medicine).

The human body didn’t evolve to sit at desks, hunched over keyboards, for 10 hours a day. We are made to get outside, breathe fresh air, and get the blood flowing.

The philosopher Friedrich Nietzsche once wrote: “All truly great thoughts are conceived by walking.” Apple CEO Steve Jobs was a fan of the walking meeting. He inspired Silicon Valley leaders to follow. Some have designed campuses that encourage outdoor walking meetings, and discourage meetings in standard conference rooms.

Walking meetings might be an especially good idea at this moment in time, when so many workers have languished physically, and have been stressed emotionally by isolation.

Mostafa Ronaghi, the longtime chief technology officer of Illumina, co-founder of Grail, and now CEO of a SPAC affiliated with Senti Biosciences, has become a convert the past couple years. “I was tired of Zoom,” he said.

Mostafa Ronaghi

The realization came early in 2020, when he was still at Illumina, the DNA sequencing leader. For a dozen years, he oversaw a R&D team, which had grown to 230-240 people. The early pandemic was intense, with urgency to work on genomic surveillance of the new virus.

Instead of grinding away entirely on Zoom, he picked out long stretches of his day for walking meetings. Sometimes it would be 3 hours. Mostly, it was around his neighborhood in Silicon Valley. He’d wander around in a 4-mile loop, through a suburban cul de sac in Atherton, absorbed in conversation. Headset in place, Mute button On. Most of the time.

“There was no construction. The streets were very empty,” he said.

It was a welcome respite.

Was this a more creative and productive way to work? “I definitely listen better,” Ronaghi said. New ideas tend to flow when he’s walking outside – either with someone walking with him, or just walking and talking on a phone call. Either way, walking outside tends to focus the mind.

A big advantage is that it cuts out distractions from email, and websites clamoring for attention.

Walking meetings don’t work for every situation. Sensitive meetings, large group meetings, and board meetings that require consensus are best held elsewhere.

Zoom had its uses. Some 2-hour group brainstorm session helped bring his team out of an inventive lull. But walking became his preferred option for one-on-ones. People got the message over time that if you need to meet with Mostafa one-on-one, walking outside was the way to go.

David Shaywitz, the VP and Distinguished R&D fellow for data and digital at Takeda Pharmaceuticals in Cambridge, Mass., said he picked up the walking meeting habit years ago while at a Silicon Valley startup. The Boston biotech community doesn’t enjoy the same weather, but he’s found similar enthusiasm from East Coast walkers.

Quite a few senior leaders at Takeda like to walk and talk, including R&D president Andy Plump. “People have routes they use for 30-minute and 60-minute meetings. Love it,” Shaywitz says.

Amy Abernethy, the president of clinical studies platforms at Verily Life Sciences and former principal deputy commissioner of the FDA, is another biotech leader known for her walking meeting habit. She took it to a new level early in the pandemic. “I routinely walked 6 to 12 miles a day,” she said. Now she says she’s walking about half that much, and is back to a normal walking and exercise routine a few days a week.

Amy Abernethy

Generally, Abernethy said she tries to get outside for any meeting that doesn’t require her to be on video. “Walking allows me to focus on the conversation without getting distracted by things on my computer screen (emails, slacks, etc). I also find that I think better when I am moving,” Abernethy says.

She’s developed some habits to make it easy to get out the door on busy days. Tennis shoes and a weather-appropriate change of clothes are ready by the door, in case she needs to change between meetings. She even has practiced a 28-minute walking loop that’s the right distance for the typical 30-minute meeting.  

Some especially good ideas have emerged. The Evidence Accelerator run by Reagan Udall Foundation, in consultation with the FDA, was a byproduct of a walking meeting. In a short time at Verily, she said walking meetings have already produced new ideas for data partnerships and projects.

There are potential downsides. Abernethy shared one funny story.

With airpods in, absorbed in a conversation about efficient clinical research, she tried to tap contemporaneous notes on her phone.

Ideas were flowing. But she wasn’t watching her step.

“I heard a man yelling at me “Lady”, “Lady”, “Lady”. His voice was getting louder and louder. I turned to look at him – he was about 10 feet behind me pointing at the path and saying “LADY!!!”. He was pointing at a huge snake stretched across the whole path. I had managed to step over the snake and keep walking without even noticing.”

The moral of the story? Try not to get bit by a snake or hit by a car.

Seriously, though, walking meetings strike me as one of those old ideas whose time may have come. They are healthy. They foster creativity. They’re good for certain kinds of collaboration.

They just might be part of what could make the workplace a better place.

 

Data That Mattered

Netherlands-based Argenx said it passed a Phase III clinical trial with efgartigimod alfa-fcab (Vyvgart) for adults with Primary Immune Thrombocytopenia. The drug, a neonatal Fc receptor (FcRn) blocker, was able to help 22 percent of ITP patients boost their platelet counts, compared with 5 percent on placebo. The drug was initially approved by the FDA in December for myasthenia gravis.

AstraZeneca’s dapagliflozin (Farxiga), an SGLT2 inhibitor originally developed for diabetes, met the primary endpoint of a Phase III trial in heart failure patients. The drug was tested on a composite primary endpoint of cardiovascular death or worsening of heart failure. Data will be presented at an upcoming medical meeting.

Novartis reported that ribociclib (Kisqali), its CDK4/6 inhibitor for HER2-negative advanced breast cancer, delivered a median survival time of five and a half years (67.6 months), when given to newly diagnosed patients in combination with fulvestrant. The drug reduced the risk of dying by one-third (33 percent), when compared with patients who got the fulvestrant alone. Long-term follow up results were from the Monaleesa-3 study.

Regulatory Action

Hong Kong, Shanghai and Florham-Park NJ-based Hutchmed said it received a Complete Response Letter from the FDA. The company said it submitted an application to market surufatinib, which contained data from two positive studies from China for patients with neuroendocrine tumors, plus a bridging study from the US. The FDA responded that’s not enough. It wants to see a multi-regional clinical trial (a response in line with a new policy outlined by FDA cancer review boss Richard Pazdur).

Boston-based Vertex Pharmaceuticals said its VX-880 program, a pancreatic islet cell replacement therapy for type 1 diabetes, has been placed on Clinical Hold by the FDA because there’s not enough information to support dose escalation. The company said it was surprised.

Shanghai-based Junshi Biosciences and Coherus Biosciences of Redwood City, Calif. said they received a Complete Response Letter from the FDA. The companies are seeking to market toripalimab in combo with chemotherapy for nasopharyngeal carcinoma. The companies said in a statement that the agency is asking for a process change that they believed is “readily addressable.”

New York-based Axsome Therapeutics received a Complete Response Letter from the FDA for its application to market a treatment for acute migraine headaches. The agency is asking for more information on chemistry, manufacturing and controls. The company said it believes the questions are addressable.

Rockville, Maryland-based Supernus secured FDA clearance to market viloxazine extended-release capsules (Qelbree) for adults with attention-deficit hyperactivity disorder.

Florham Park, NJ-based Phathom Pharmaceuticals secured FDA approval for a pair of new antibiotics. One is vonoprazan, amoxicillin, clarithromycin (Voquezna Triple Pak), and the other is vonoprazan, amoxicillin (Voquezna Dual Pak) for the treatment of H. pylori infection in adults.

AstraZeneca and Daiichi Sankyo secured FDA approval to market fam-trastuzumab deruxtecan-nxki (Enhertu) as a treatment for metastatic HER2-positive breast cancer, in patients who got a prior anti-HER2-based regimen either in the metastatic setting, or in the neoadjuvant or adjuvant setting and have developed disease recurrence during or within six months of completing therapy. This approval was based on some extraordinary clinical data, which showed Enhertu reduced the risk of disease worsening or death by 72 percent when compared head-to-head with Roche/Genentech’s TDM-1 (Kadcyla). The drug was first approved in 2019 based on a different study.

Deals

Gilead Sciences agreed to a collaboration with Waltham, Mass.-based Dragonfly Therapeutics to develop engineered NK cell engaging therapies for cancer and inflammatory diseases. Gilead is paying $300 million upfront to Dragonfly, and getting an exclusive worldwide license to Dragonfly’s 5T4-targeting investigational immunotherapy program, DF7001. Gilead is also getting options to license other drug candidates that use Dragonfly’s tri-specific NK cell engaging platform.

UK-based Amphista Therapeutics struck a partnership with Bristol Myers Squibb to develop targeted protein degrading therapies. Amphista is getting $30 million upfront. The statement didn’t mention other terms, like which therapeutic areas or indications BMS has in mind. Separately, Amphista announced a deal with Merck that brings in $44 million upfront. That deal pertains to targeted protein degraders for oncology and immunology indications.

Vancouver, BC and Seattle-based Zymeworks, the multi-functional antibody developer, confirmed the board has received an unsolicited takeover bid from All Blue Falcons for $10.50 a share. The company ended trading at $6.49 Thursday.

Burlingame, Calif.-based Genesis Therapeutics, an AI for drug discovery company, pocketed $20 million upfront through a partnership with Eli Lilly. The deal covers up to five targets across a variety of therapeutic indications.

Strategy

Illumina, the leading maker of DNA sequencing instruments, said it intends to branch into the drug discovery business. It’s through a five-year partnership with Deerfield Management. (STAT coverage).

SARS-CoV-2
  • See this study from the UK that says cognitive impairment for severe COVID patients equals roughly a 10 point drop in IQ, or about what normally occurs between the ages of 50 and 70. “Multivariate profile and acute-phase correlates of cognitive deficits in a COVID-19 hospitalised cohort.” eClinicalMedicine. May 2022. (Adam Hampshire, Doris Chatfield et al from Imperial College London and University of Cambridge) Summary in New Scientist.
  • “Neurologic Manifestations of Severe Acute Respiratory Syndrome Coronavirus 2 Infection in Hospitalized Patients During the First Year of the COVID-19 Pandemic.” Critical Care Explorations. Apr. 2022. (Anna Cervantes-Arslanian et al Boston University School of Medicine)
  • WHO Study Says SARS-CoV-2 Has Killed Nearly 15 Million People. New Scientist. May 5. (Michael Le Page et al)
  • You Were Right About COVID, and Then You Weren’t. Understanding when to abandon beliefs and when to recommit to them can help us ride out this pandemic and prepare for the next one. The Atlantic. May 3. (Olga Khazan)
  • It Ain’t Over Till It’s Over. Science. May 5. (Holden Thorp)
  • 2.12.1, BA.4 and BA.5 escape antibodies elicited by Omicron infection. BioRxiv. May 2. (Yunlong Cao et al Changping Laboratory, Beijing)
Science Policy

The White House issued a summary of work on pandemic preparedness through the new Center for Forecasting and Outbreak Analytics – sometimes likened to a National Weather Service for pandemics.

The President’s Conference on Hunger, Nutrition and Health is being scheduled for September. Food companies are obviously a big piece of the puzzle. But given the magnitude of the obesity public health crisis, I hope a few people from the biopharmaceutical industry are at the table – especially given there’s a new generation of potent weight loss drugs that could be another piece of the puzzle (see last week’s Frontpoints).

Three key FDA officials – Peter Marks, Janet Woodcock and new commissioner Robert Califf – summed up a few of the key considerations in COVID-19 vaccine reviews, with an eye toward preparing for a fall surge. See “COVID-19 Vaccination—Becoming Part of the New Normal” in the May 2 edition of JAMA. The FDA always has a hard job, but consider the current situation:

They’ll need to decide on the best vaccine formula for the variants in circulation in June.

That’s the advance time needed for manufacturers to make enough doses at scale to have them ready for October, when the seasonal surge is expected, like with flu.

Problem is, we might have a new variant in circulation then, rendering the new vaccine formulation a day late and a dollar short.

Notice they mentioned the vaccine advisory committee recently expressed a desire to push for uniformity on vaccine formulation from the vaccine makers. Why? One can surmise that we are bogged down in such a misinformation cesspool that these officials are afraid that run-of-the-mill competitive differentiation from manufacturers might confuse the public. That doesn’t worry anyone in ordinary times. But we know all too well that the antivax movement is ready to pounce at a minute’s notice. They could manufacture enough phony doubt to scuttle an entire national booster campaign, especially if there’s any legitimate ambiguity whatsoever about the new vaccine’s effectiveness against the variants.

It’s going to be a high-wire act at the FDA, and for the companies, in June.

 

Personnel File

Biogen said CEO Michel Vounatsos is heading out the door. The company has begun a search for his replacement, and he will stay until the new boss arrives. Vounatsos will remembered as the leader who drove the company into the ditch, overseeing the Aduhelm regulatory controversy and the commercial disaster that damaged the credibility of the company and the industry. His exit has seemed like an inevitable result for months. See previous TR coverage — “The Biogen Debacle Continues” from January, “Biogen’s Alzheimer’s Controversy” from June, and “Biogen’s Perilous Path” and “Biogen’s Bumbling Defense” from July).

Mary Klotman, a physician-scientist at Duke University with extensive experience in HIV, is being considered as the next director of the National Institutes of Health, according to the Washington Post. The story reads like a classic trial DC trial balloon. At least one other unnamed candidate is being considered, according to the Post.

Kathrin Jansen is planning to retire from her leadership role in Pfizer’s vaccine R&D organization. Mikael Dolsten, Pfizer’s chief scientific officer, announced the move on LinkedIn.

Cambridge, Mass.-based Spero Therapeutics, the antibiotic developer, is cutting 75 percent of its workforce. The company suffered a setback in a recent meeting with the FDA, which suggested its New Drug Application for tebipenem HBr isn’t likely to be approved with the existing data package. The company is cutting commercial efforts for the program and focusing its resources on a couple of other programs in earlier development. Spero had $146 million in cash at the start of the year.

An activist investor in Bothell, Wash.-based Athira Pharma, an Alzheimer’s drug developer, issued a statement calling for the board to replace CEO Mark Litton with his preferred candidate, former GSK chief medical officer Ronald Krall.

Cambridge, Mass.-based Codiak Biosciences hired David Mauro as chief medical officer.

Philadelphia and UK-based Adaptimmune, the developer of T cell therapies for cancer, said it promoted Joanna Brewer to chief scientific officer. She most recently served as Senior Vice President, Allogeneic Research.

Watertown, Mass.-based Seismic Therapeutic, the company using machine learning for immunology drug discovery, hired Maude Tessier as chief business officer. She was most recently with Ikena Oncology. (See TR coverage of Seismic, and Tessier’s comments in a recent BD Secrets column by Vikas Goyal).

San Francisco-based Xcell Biosciences, an automation and instrumentation company for cell therapies, hired Shannon Eaker as chief technology officer. He comes from Cytiva (formerly GE Healthcare) Cell and Gene Therapy.

Earnings Corner

Moderna generated $6.1 billion in first quarter revenue, and has signed purchase agreements worth $21 billion in revenue for 2022 for its COVID vaccine. The world eagerly awaits what kind of data it can deliver with bivalent vaccine candidates, which hopefully can be scaled up in time for the anticipated fall surge, and which will be more effective against the Omicron family of variants or whatever might be circulating then.

Pfizer reported $25.7 billion in first quarter revenue. The company forecasts $32 billion in 2022 revenue from its COVID-19 vaccine, and another $22 billion in 2022 revenue for Paxlovid, the most effective antiviral treatment on the market (which ordinary people are still, tragically, finding hard to access).

Science
  • A bivalent Epstein-Barr virus vaccine induces neutralizing antibodies that block infection and confer immunity in humanized mice. Science Translational Medicine. May 4. (Gary Nabel et al Sanofi, the National Institute of Allergy and Infectious Disease and ModeX Therapeutics)
  • An Old Drug, Finally With a Structure. In the Pipeline. May 5. (Derek Lowe)
Financings

Boston-based Hillevax closed its IPO with total proceeds of $230 million. It’s a vaccine developer working to prevent moderate-to-severe acute gastroenteritis caused by norovirus infection.

Waltham, Mass.-based Dianthus Therapeutics said it raised $100 million in a Series A financing to develop more convenient complement-directed therapies. 5AM Ventures, Avidity Partners and Fidelity led. (TR coverage)

Germany-based Tubulis raised $63 million in a Series B financing led by Andera Partners, and which included Evotec and Fund+. It’s developing antibody-drug conjugates against solid tumors.

Menlo Park, Calif.-based Patient Square Capital said it’s received a $300 million commitment to invest in Enavate Sciences. It’s an entity that will provide strategic growth capital to drug developers. It’s led by James Boylan, former president and head of investment banking at SVB Leerink.

Our Shared Humanity

This one caught my eye as a Wisconsin native who left for the West Coast 20 years ago. “Our region is rich in top-notch academic research, but we struggle to develop local businesses from it.” Milwaukee Journal Sentinel. Apr. 26. (Kathleen Gallagher)

A Failure to Invest

How are nonprofits hospitals doing on their legal responsibilities to provide charity care and community investment? Not good. Not good at all. See the Lown Institute Hospitals Index for a detailed look at 275 nonprofit hospital systems around the country – and the 227 of them who spend less on charity care and community investment than they get in the value from tax breaks. H/t @bijans

3
May
2022

Ram Aiyar on Finding Deal Alignment Internally and Externally

Vikas Goyal, former SVP, business development, Pandion Therapeutics (now part of Merck)

Ram Aiyar is currently the CEO of Cambridge, Mass.-based Korro Bio, a company using RNA editing to treat genetic diseases, including Alpha-1 Antitrypsin Deficiency.

Before he took that job, he was a founder and executive vice president of corporate and business development at Corvidia Therapeutics. That company was acquired by Novo Nordisk in August 2020 for $725 million upfront, and $2.1 billion total.

The deal gave Novo access to ziltivekimab, a fully human monoclonal antibody with half-life extension technology, targeting the IL-6 ligand. The drug was in a Phase 2b trial in chronic kidney disease at the time of the acquisition, with plans to proceed into a global cardiovascular outcomes Phase 3 study. The Phase 2b data that drove the acquisition was published in The Lancet in May 2021.

Novo saw a large commercial opportunity in cardiovascular disease in chronic kidney disease patients, which would build on their existing insulin and GLP-1 driven diabetes franchise.

Aiyar spoke with me recently about that deal and some of the lessons learned.

Ram Aiyar, CEO, Korro Bio

Why did your team and board believe it was the right time to partner? Why was Novo the right partner to work with?

The science behind our drug was validated. The question was ‘did we have the money to bring ziltivekimab through approval?’ This would have required running a large cardiovascular outcome study that might cost between $300-500 million – and not to mention the investments required to support the commercial piece after that.

When you think about the likelihood of success and the amount of capital required to fully develop, we wanted to find a group that was committed to running that outcome study, and running it in a way that we thought would have a high likelihood of success.

Let’s leave money aside for a second. There were a couple of parties around the table during our acquisition. When we thought about how these companies might develop the drug themselves, we were very aligned with Novo on how we were approaching the unmet need for patients, and on how we would execute the drug development plans towards approval (assuming the science continued to play out).

There were other potential partners that wanted to go into larger patient populations. We agreed those trials could be done, but also believed conducting those trials could delay the approval and launch of ziltivekimab for CKD patients, where the unmet need was very high and where ziltivekimab’s mechanism had a very good chance of success. For example, Novartis’ CANTOS study with Paul Ridker [evaluating the anti IL-1ꞵ mAb canakinumab in patients with atherosclerosis] showed really differentiated benefit in patients with CKD. In just 1,800 patients over two years they showed a 50% mortality benefit.

Philosophically, Novo was aligned with our approach. Case in point, Novo has stuck to the timelines that we had put together back in 2020. To see large pharma move with that pace is so encouraging. I really believe the drug is in the hands of the right folks.

What was your role in building the relationship with Novo and ultimately closing the collaboration?

This is a team sport! We built our relationship with Novo over the course of three years. Initially, they were interested in one of our earlier programs which was going after acute pancreatitis. Those interactions built up a lot of goodwill. Over that time, Novo had strategic changes with new people coming in and a new desire to expand into cardiovascular disease. Our interactions shifted to ziltivekimab. We became deeply engaged on the drug’s science, where the drug needed to go, and the evidence that would be required to support approval.

I was on the frontline to a certain extent to set up those relationships – and managing a lot of back channel discussions to keep our companies aligned – but all of us played a role. Our CMO Michael Davidson played a big part in convincing Novo’s leadership of ziltivekimab’s therapeutic potential. Matt Devalaraja, our CSO and head of R&D who was responsible for all of our nonclinical, translational and CMC development, was key to convincing Novo the safety benefits our drug brought due to the low-dose and that we were at commercial stage manufacturing and ready for Phase 3. And during the final stages of the transaction, it was our CEO Marc de Garidel who played a role with Novo’s CEO [Lars Fruergaard Jørgensen] to ensure all the pieces tied together, and to remind Novo’s leadership that ziltivekimab’s had the potential to completely change Novo’s revenue trajectory.

How far into this 3-yr relationship building did you realize how serious Novo’s interest was?

I remember it very well – it was at the 2019 European Socety of Cardiology Congress [in Paris]. I knew we needed to get the right folks within Novo Nordisk educated, interested and engaged on ziltivekimab. We did two things. First, to at least start the conversation, I asked an old colleague [Marian Nakada at JJDC] who had previously worked with Novo’s head of CV [Karin Conde-Knape] to make a personal connection. At the same time, Michael [Davidson] and I reached out to one of Novo’s KOLs, [Dr. John Kastelein]. So there was this independent and positive reinforcement with Novo around the ESC Congress. That’s where the engagement really started and they got interested to dig deeper.

Over the next year as we generated more clinical data, that interest level just grew. I think we were on the top of their list for a year or so before we transacted.

It started with a small group of people at ESC 2019, but it very rapidly progressed to high level discussions with Novo’s leadership. There were maybe 10 people from Novo involved – their CSO [Mads Krogsgaard], Head of R&D [Marcus Schindler] their CV team, and the corresponding business development people. Zaki Salanti in Novo’s Search and Evaluation group led the scientific discussions. On the transactions side it was John McDonald, Novo’s head of business development.

In addition to the clinical data, what else drove Novo’s interest in partnering with you?

We had a pre-filled syringe in commercial scale manufacturing.

I think sometimes, especially with manufacturing, if a potential transaction could occur, companies may defer the investments and take a “minimal” path. We did not do that.

We started on CMC even in our Series A and that paid dividends for us. If there is any question you haven’t asked yet, it is where would I advise companies to invest early. We made a conscious investment in CMC. We were ready to go whether we were doing the study or a partner was doing it. Because if we didn’t do that, Novo wouldn’t have been able to start the outcomes study so rapidly. It would have taken a year or so of CMC work. And that would have had an impact on the transaction.

We had checked a lot of boxes for them. What was surprising for Novo was that Corvidia was a 15-person company. I remember when we went through diligence and transfer of CMC – they had 50 people on their side and we had literally 5. It was amazing to them that a 5 person team could do everything.

So you’ve got this really big clinical opportunity already with CKD, but then this even much larger opportunity with broader cardiovascular disease – how do you keep people’s eyes on the ball?

The Novo team was very pragmatic – they wanted to get the drug approved, they wanted to follow the strongest scientific evidence, and they wanted to start generating revenues. And CKD was a natural extension of Novo’s existing product mix of insulin and GLP-1 drugs for diabetes.

Diabetics are patients who have kidney and cardiovascular complications. 60% of CKD patients are diabetics.

When you think about the cardiometabolic unmet need from an anti-inflammatory standpoint, CKD really jumps out. And CKD is a very large clinical opportunity – it’s 3 million patients! And we had done enough commercial legwork on how we’d go to market, including looking at potential pricing strategies, to know that CKD was a very attractive business opportunity compared to other potential new drug opportunities.

As a small company, we made a conscious effort to provide the best benefit and long-term value to patients. There were some parties who got the huge potential across other cardiovascular indications and were only focused on that. But we were always clear about where we thought the data was strongest and where we wanted to take ziltivekimab in CKD.

We were lucky with Novo.

One, we had multiple parties at the table, including other potential industry partners and also potential investors. Novo had to at least offer us par value.

Two, we found a partner who really wanted ziltivekimab and is moving the drug like it’s their own child.

At one point, the CEO and CSO of Novo said that if Novo believes in this asset Novo should go after it and get the deal done. And so now we have the confidence that they will treat the drug well, develop it well, and turn it into a product. Even more than a year after the transaction, Lars [Novo’s CEO] mentions ziltivekimab and Corvidia in investor calls.

There’s an interesting aside here on how we approached indication selection internally. At one point in Corvidia’s history, we had considered going after anemia. But the clinical data said the mechanism could have huge benefit in CKD. And both indications would have been similar heavy lifts in terms of development costs and timelines. We as a team made a change in strategy in mid to early-2019 to follow where the data led us and committed to pursuing the cardiovascular outcomes in CKD patients. As a biotech, this decision was not for the faint of the heart, and [we were] fortunate to have the support of our board of directors.

We were in our Phase 2 is when COVID-19 was hitting. At the time, Actemra was being used off-label to treat COVID cytokine storm [Actemra (tocilizumab) is another mAb working in the IL-6 pathway, is already approved for multiple rheumatological diseases, and received an EUA for use in hospitalized COVID patients in June 2021].

The Corvidia team saw there may be an opportunity for us to approve ziltivekimab in a very rapid fashion for COVID, an indication that would not require a $400 million clinical outcomes study. But there was also a lot of frenzy about COVID at the time, and the Pfizer and Moderna vaccines were coming together. And we didn’t want to jeopardize access to ziltivekimab for CKD patients.

By the way, we were very transparent with Novo about all of this.

What other deal structures were being discussed? Did your team ever consider a co-development / co-commercialization structure?

There were some parties at the table who wanted to partner with us in Europe. But Marc had a lot of commercial experience and wanted us to be wary of slicing up the drug to multiple parties whose commercial interests may or may not be aligned in the future.

And we were pretty confident that we could get started with the Phase 3 study on our own. We had financing term sheets from investors that would have let us do this . . .

. . . wait, so Novo was competing against you raising more money and going it alone?

OK, that’s where the money part comes in. At the end of the day, when you compare a $725 million upfront cash vs a hypothetical $300+ million follow-on financing, it’s hard to ignore the tangible return that amount of capital would give our shareholders today.

Even when you’ve got access to the amount of capital you need with a nice premium on the valuation, you still have to ask the question about time to return for shareholders. Our investors had been in the company for 3-4 years already; if we kept going, how much longer would it take from here?

But yes, we had options and could say no to less attractive partnership proposals.

Any advice on how to say “no” to partners? How do you do that in a way that makes them come back with an even better offer?

Haha, that’s a good one. The balancing act is to not say “no” in an aggressive manner, to have real alternative options, and to be able to share your business situation. Most folks on the other side understand this. They wouldn’t even engage in a conversation if there was no possibility of a transaction. I think that’s also part of why it took a year plus to get here with Novo. The Novo team was really feeling us out to see where to even start the business discussion.

All of us understood that if we had done a follow-on financing, Corvidia’s valuation would significantly change. And all of us understood that we weren’t just talking about an upfront acquisition payment, we were also talking about a several hundred million dollar subsequent investment to develop ziltivekimab.

We were also transparent about how we would do the development, sharing data to help guide what pricing could be, and sharing tangible data on the relevant patient population. And we laid out for partners what we thought our worst case and upside scenarios could be, effectively setting expectations.

None of our discussions ever started at a super low-ball range, but the first offers were not the best offers. And if we did get a “low” offer, I actually spent time with the other party to explain why it was not a fair offer and to walk them through Corvidia’s perspective of the potential. If you as a company are not fully committed to a path from a patient population perspective, or not fully committed to getting the data to really support that potential, then you’re in no man’s land negotiating on opinion. By the time we launched our Phase 2b, we had all of that buttoned up.

And how did your team work out your own reservation price? How did you know what was “good enough”?

That can be hard. When there’s an interested party at the table, there can already be expectations on size of exit. As a management team, we’re in the middle aligning the interests between investors, the Board, and external parties.

What I found helpful was just laying out opportunities and risks – not necessarily putting probabilities – but just laying out the binary things that could go well or could go wrong, and then discussing with the team that we would be fine with either of those outcomes. So when you lay out the pros and cons, the opportunities and the costs, that plays itself out in terms of level-setting for everybody. And the question is an easier one at that point.

There was also an older partnership process that went through some negotiation dynamics. It was an earlier potential transaction with a separate company about 18 months before all of this with Novo, and before we had started our Phase 2b study. Corvidia had a diverse investor base including European investors, US investors, small investors, big investors, and even single LP investors.

There were some investors who were OK with lower exit numbers. There were others who, given the potential of the company, wanted more. Through that historical process, there was some level-setting in terms of what the market thought was reasonable, how Corvidia should approach a transaction, our valuation expectations, as well as an understanding of our investors’ range of intentions. So coming into the Novo discussion, there was already Board alignment about how we would move forward with a potential acquisition.

Another consideration for us was that we needed access to significant capital to fund the next cardiovascular outcomes study. Everybody loved the science, the product, and the team. But there was financing risk that would need to be removed off the table.

Should we go public? Did we need a step before that to support the IPO? We started a financing process about a potential Series C, and ended up with $350-400 million in term sheets. The Board was involved in all of those investor discussions about capital availability and the risks of running the clinical outcomes study. Let’s just say the valuation proposals from new investors were a tad bit lower than what we ultimately got in the acquisition.

I will say one thing, Vikas, outside of investors and the market, a very key alignment is internal team alignment. I cannot stress enough that it is critical the management team first knows what it wants to do. And then we can align with the other parties around the table. If there are disparate voices within the team about what to do or not to do, no matter where you end up in a negotiation, there is uncertainty. That was a learning for us in that previous transaction discussion. Some folks at Corvidia wanted to do it, others didn’t want to do it, and still other folks wanted to do something different. That also got clarified over time. If there is trust around the team, I don’t think that is necessarily a challenge. In Corvidia’s case, I truly believe that the four of us [Marc, Michael, Matt, and Ram] were tied at the hip. Sure, we had disparate opinions, but all opinions were heard and discussed, and we disagreed and committed.

In those last stages with Novo, how did the process go?

Over the year or so of our process with Novo, the drama was really around data, and that really came to a head when we were close to executing. They wanted, all of us wanted, to see what our Phase 2b data looked like. Any deal and its terms were contingent on that data. And this was during COVID [which was straining many clinical trial timelines]. Luckily, our clinical team was fantastic and we recruited faster than anticipated and got our data early. We were sharing data with Novo and other parties as the database lock came through. We were very factual about what we saw and what the safety and efficacy profile looked like. And we were fortunate that the data came out as we anticipated.

As our Phase 2b data came out, multiple parties got excited and came to the table trying to move fast. We hired a banker at the very last minute, first to have a buffer so the same information was exchanged with all parties, and to also ensure we had the right relationships around the table. And then it went very, very fast. We executed in about a week and a half.

How did you create this situation with so many people ready for your data?

An important aspect there is that it takes 3 years to build competitive tension. You have to start with the relationship and then you’ve got to update people with everything going on along the way. There is no guarantee they are actually listening and interested. Strategies change any given moment in large pharmas. So a big part is keeping everyone informed – whether they like it or not. It seems like an obvious thing to just maintain relationships over time, but it’s under-appreciated in the industry.

As an aside, the data room is a great indicator of how many people are actually digging in and how interested they really are.

[laughs]

So now you’re CEO of Korro. What are the pro’s and con’s of being the BD person vs the CEO? What advice would you share?

One difference is the BD person is in a position to get overruled, no harm no foul. But the CEO, the buck 100% stops with them. At the end of the day, it’s the CEO’s judgment that the Board has to listen to or not.

Second, the BD person is in the middle between your team, the external party, and the Board. Because you’re just a conduit to ensure that everyone is aligned. That means you can do the market check – coming back and letting the team know what is going on outside. Usually, the BD person is alone in those market check discussions, so it gives you a buffer and room to play with business terms with the other side. And you can always be overruled and go back afterwards and play the “what do I know” card.

That said, some of the best interactions in my opinion were when you had both a scientific leader and a BD person together with the external party, to bridge those two topics. It’s also a good check for yourself, too. There were times where we would come back from meetings with different perspectives. There are things that my colleague caught, and there were things that I heard and they were different. It’s important to have that check.

Lot of times, folks internally may have drunk their own Kool-Aid. They’re so focused on doing the work. They don’t go out and see what’s happening externally. So the BD person will actually have to bring the scientific team members to the table to say “OK, here’s what others externally are doing and saying. Here’s the evidence to support their position. Should we do something different?” You’re not telling people what to do – you’re just opening up the window. Sometimes it’s an under-appreciated part of the BD job, but it is critical. Whether we like it or not, whether it’s on the science side or the finance side, the market is often right. We can go in a different direction than the market, but at least we need to know that perspective. You can’t just put your head down and do the work.

2
May
2022

Biopharmas: Digitizing, But Not Quite Digital

David Shaywitz

What a difference two years makes.

In January 2020, I left my role as a senior partner at a corporate life-science venture fund to pursue my interest in what I recognized as a captivating frontier: the intersection of biopharma with emerging digital and data technology.

I set up an independent consultancy, and advised senior R&D executives in both large and small pharmas.  The need to understand digital technologies profoundly intensified with the arrival of the pandemic – as my co-authors and I documented in this National Academy of Medicine-sponsored analysis published earlier this year.

Our family moved from the Bay Area back to Boston in the summer of 2021. After a decade developing infectious disease medicines at Gilead, my wife became CEO of Allovir, a Cambridge-based public biotech company – a profoundly exciting opportunity.  In autumn of 2021, our three daughters – entering grades 7, 9, and 11 – each started the academic year in a new school. 

And in March 2022, I returned to the pharma company I left two years prior, in what feels like a tailor-made role, VP-Distinguished R&D Fellow, Data and Digital. The ambition: “to realize the future of biopharma through the thoughtful and pragmatic integration of rigorous biomedical science and emerging digital and data technologies.”

It’s been…busy.

Returning to the same company (albeit a different location) after a two-year hiatus is providing an unusual before-and-after view into the organization and the industry more generally: a lot has happened, and so much is different.

Office life: the new normal

As so many of us have discovered, the office has radically changed.  Most work is hybrid, and teams show up to the office several times a week (or less if someone is truly remote).  Moreover, many organizations, including ours, have adopted a “hoteling” system meaning that you don’t have your own office, or even your own cubicle.  In the morning, you plunk your stuff down at an available desk in your team’s designated “neighborhood,” and then you haul it away at the end of each day.

I’m not a huge fan of this approach; I like the idea of having a designated work area, which I can personalize; in my pre-pandemic life, I enjoyed stopping by my colleagues’ desks, seeing pictures of the families, knowing where to find them if I had a quick question.  It contributed to my sense of belonging and the feeling of community.  In contrast, I’m finding the flash-mob approach to office life less congenial – although our dog appreciates the extra attention he receives on the days I’m working from home.

Digital progress

Other changes I’ve noticed are surely for the better. Digital and data strategy has moved from the periphery of the organization to the core, as part of a CEO-driven digital transformation effort that seems to have really taken hold. There’s a sense of pragmatic possibility among the folks working on digital and data, driven by the palpable progress they’ve seen in a number of areas (like finally moving most compute from on-premise to the cloud, for example). 

The organization has also recruited – and retained – exceptional talent, which seems especially encouraging given the demand for these skills.

These efforts occur in the context of an industry that (as I’ve written in this space in the context of Novartis, AstraZeneca, and Lilly) is clearly making efforts to embrace digital, while also coming to terms with the challenges.

At a high level, it seems like what’s happening across the industry is what Jeanne Ross and her co-authors of Designed for Digital describe as “digitization,” which they distinguish from the higher-order ambition to develop and deliver digital offerings. 

As Ross and colleagues write:

“We distinguish these two potential impacts of digital technologies as the difference between digitized and digital. Digitizing with digital technologies involves enhancing business processes and operations with SMACIT [social, mobile, analytics, cloud, internet of things] and related technologies. For example, Internet of Things technologies can automate support of distributed equipment or operations; mobile computing can create a seamless employee experience; artificial intelligence can help automate repetitive administrative processes. The applications of digital technology can certainly benefit a company, but they digitize a company; they do not make it digital.”

The authors continue, “digitization enhances operational excellence; digital enhances the customer value proposition.” Digitization “is a prerequisite to digital transformation,” they argue, not equivalent to it.

This description of digitization seems like a perfect summary of what the industry is currently (and unevenly) attempting, an effort to improve operational efficiencies by leveraging the digital resources now available and routine in other industries.

Digital and COVID-19

As described by Pfizer CEO Albert Bourla in his captivating new book Moonshot, Pfizer’s ability to deliver a COVID-19 vaccine with such speed is attributable, at least in part, to an effort initiated prior to the pandemic to digitize operations. In the context of COVID-19, Bourla seems to have imbued the organization with a palpable, urgent, must-do culture (grounded on the premise that “time = lives”). By affording a common and up-to-date window into progress and problems, the digital dashboards enabled this culture by allowing the entire organization to align and focus. 

(It should be noted that, as this insightful 2021 McKinsey analysis points out, most of the 10-fold acceleration in vaccine development observed during the pandemic likely reflects the combination of enhanced regulatory engagement and extraordinary at-risk investment. Even so, the operational efficiencies – enabled by digitization – were also important.)

It will be interesting to see the extent to which biopharma can build on this success to further digitize, and rationalize/organize the many data flows within companies. Established biopharmas are notoriously siloed, as well as stitched together from years of successive acquisitions. This has a tendency to lead to kludged-together data solutions (see figure) that may get the job done, MacGyver-style, but are inefficient and result in missed learning opportunities.

In theory, digitally-native companies, such as Moderna, should start with an enormous advantage.  The ability of Moderna – a young company that entered the pandemic a fraction the size of Pfizer – to develop and deliver a novel vaccine in record time speaks to promise of such a foundation, as Iansiti and Lakhani argue in Competing in the Age of AI

Of course, it’s also easy to rationalize that COVID-19 was a special case, and that Moderna just happened to be in exactly the right spot at the right time. 

Hence question one: can digitally-native biotechs consistently beat pharmas at their own game?  Phrased differently, will the apparent operational efficiencies, and improved access to data (which can serve as the basis for further learnings, including those enabled by AI) enjoyed by digitally-native biotech companies represent a meaningful competitive advantage, or will experienced pharma giants manage, through selective digitization, to capture enough of the benefits to avoid disruption?

Question two, of course, is whether digitally-native biotechs – particularly those intent on building digital platforms – can potentially win at a different game, similar to how the iPhone beat Nokia; more on this later.

Lakhani, for his part, asserts that “traditional incumbent organizations have no choice but to embrace [a digital future].  Either you’re going to be competing against the platform or you’re going to be part of a platform that is going to be AI-first.”

Follow this space…

I am following progress in three areas with particular interest:

Future of evidence generation. This is a broad area that generally seeks a more complete understanding of and relationship with patient/participants, involving enhanced breadth (longitudinal data) and depth (e.g. wearables). It prioritizes both ease of participation (eg distributed/hybrid trials) and equity (diverse representation). For a phenomenal overview of this area by one of its leading lights, see this recent presentation by Dr. Amy Abernethy of Verily.

Getting beyond operational efficiency. Digital efforts to date in our industry and others have been most successful in the context of structured, high-volume data and repeatable activities. But in the big picture, what we need more than anything in biopharma are improved translational models – a way of figuring out if a molecule we put into people will actually work, and work safely. The failure rate of clinical development remains abysmal. While AI approaches are constantly hyped, the available data, as Andreas Bender eloquently discusses here, and as Derek Lowe has written here, appears to represent a poor fit for AI solutions.

Escalating security and privacy concerns. The potential insights associated with participant data are accompanied by profound responsibility for ensuring these data are managed appropriately, and always in accordance with the participant’s wishes; thus data stewardship has emerged as a critical pilar of all digital efforts. Add to this the increasing concerns related to bad actors. As FBI Director Robert Mueller said in 2012, “I am convinced that there are only two types of companies: those that have been hacked and those that will be. And even they are converging into one category: companies that have been hacked and will be hacked again.”

To these I might add a fourth topic, which could be called service-oriented architecture, but really boils down to the central premise of both the Ross book and the Iansiti and Lakhani book: will any biopharma embrace the radical digital transformation both sets of authors advocate, as captured in this figure:

The authors of both books emphasize the power of what they describe as a digital platform, constructed as shown at the right of the figure. 

Here’s the basic idea: in traditional firms, as Iansiti and Lakhani write (slightly paraphrased), the

“organization, data, and technology evolve into silos, with disparate retail focus areas largely contained in separate, disconnected units. Connections between silos are haphazard and often unpredictable, motivated by meeting immediate needs and fighting fires.”

A better approach, the authors contend, is to adopt a “modular, distributed structure” based on “a common set of building blocks that could be deployed to drive scale and scope.” At the heart of this approach is a “central, standardized set of services” and the ability to easily communicate through interfaces known as APIs. 

Consequently, “one of the seminal documents in the digital transformation of business,” according to Iansiti and Lakhani, might be a memo Jeff Bezos issued in 2002, in the early days of Amazon, mandating the use of this API-based approach throughout the company. While challenging to adopt, this approach is what ultimately enabled Amazon to scale so fast and so well.

In an industry that seems to be struggling even to digitize the information in narrow silos, such a transformation seems like a nearly impossibly heavy lift for established organizations. As Brian Bergstein has written in Technology Review, “the most common uses of AI have involved business processes that are siloed but nonetheless have abundant data.” Most work is happening within silos, not across them.

Most folks in pharma would love to do their existing jobs better, and struggle less to find and manage the data they currently need; but the idea of transforming the entire enterprise in hopes of facilitating the development of novel digital solutions may prove a prohibitively difficult sell, especially when their current objective – developing impactful new medicines — seems intrinsically worthy and consequential.

Besides, as Bergstein points out, the reports from the AI front are mixed, as “people in a wide range of industries say the technology is tricky to deploy. It can be costly. And the initial payoff is often modest.”  While he notes that technologists may be most interested in “What can the technology do,” the key question for companies is “How much will we benefit from investing in it?”

Transformation visionaries like Ross, Lakhani and their co-authors might suggest another question: “How much will you lose by not investing in disruptive technologies?” And they might suggest we speak to the good folks who used to work at Kodak and Nokia for perspective.

27
Apr
2022

The Timmerman Traverse for Life Science Cares Is Back, Fighting Poverty

Luke Timmerman, founder & editor, Timmerman Report

The biotech community has plenty of people willing to work to support vulnerable members of our society.

This year, I’m doing what I can to again mobilize the biotech community to fight poverty.

I’m happy to announce the Timmerman Traverse for Life Science Cares.

It’s a Presidential Traverse hike set for Sept. 11-14, 2022.

This expedition builds on the success of the inaugural traverse, which raised $735,000 last year for the antipoverty work of Life Science Cares. This trip is a phenomenal way to give back, enjoy nature, and make lasting friendships.

“It was amazing to see leaders across our biotech industry come together to raise funds to help bridge the unfortunately real gap between the medicines we develop, and the patients and communities who need access to them,” said Vineeta Agarwala, general partner, Andreesen Horowitz, and a veteran of the Timmerman Traverse 2021.

Highlights of the Timmerman Traverse, 2021

This year, a new group of 20 biotech leaders will hit the trails of New Hampshire. Together, we’ll cover the beautiful 20-mile hike across the peaks of Mt. Washington, Mt. Adams, and Mt. Jefferson. It’s a physically demanding trek with 8,000 feet of elevation gain.

Each member of the team will have to be in shape. The weather can be harsh, so they’ll have to be prepared. They’ll also have to dedicate themselves to fundraising. Each person is committing to raise at least $25,000. Our team’s goal is $800,000.

This year, we’ll be expanding from Boston to raise money for all four communities where LSC has operations – Boston, San Francisco, San Diego and Philadelphia.

For those unfamiliar, Life Science Cares brings the biotech community together to support nonprofits that uplift the most vulnerable members of our society.

This means providing immediate basics like food and shelter. And it goes beyond that. LSC’s network of nonprofits also provide on-ramps to better life over the long term through education and job training.

I’m proud to support this work, and to leverage the biotech community to support it in a big way.

I’ve recruited a outstanding team for this mission.

Meet the Timmerman Traverse team for 2022 (and click on their name to support their Life Science Cares campaign.)

For sponsorship opportunities of this special event, talk to me at luke@timmermanreport.com and Emily Stanford at emily@lifesciencecares.org.

Let’s show what the biotech community is made of in 2022.

Go to the Timmerman Traverse team page to donate today!

 

 

21
Apr
2022

Regeneron Buys Checkmate, Bivalent Vaccine Progress, & a Fitting Acronym

Luke Timmerman, founder & editor, Timmerman Report

Clinical trialists are always trying to come up with catchy study titles. I’m not a big fan of these acronyms, and try to avoid using them. They’re often forgettable.

But this week I saw one that stood out as especially meaningful. Yale University researchers are running a new Long COVID study. It’s called – LISTEN.

It stands for Listen to Immune, Symptom and Treatment Experiences Now.

There’s certainly interest in what’s happening biologically with so many people — potentially millions — who are reporting some symptoms of Long COVID. Lead investigators Akiko Iwasaki and Harlan Krumholz appear to have a solid plan to collect data on the many potential contributing factors to this mysterious ailment — demographic, clinical, social, and environmental factors associated with health status.

Akiko Iwasaki, Professor of Immunobiology and Molecular, Cellular and Developmental Biology, Yale University; director of Center for Infection & Immunity, Yale School of Medicine

They’re collecting blood and saliva samples, and incorporating use of a health app called Kindred that is supposed to connect patients to each other’s experiences, to their own data, and to other potentially helpful studies.

This study, and others like it, could help point the way toward more effective prevention and treatment.

Equally important, though, is the sentiment around rebuilding public trust in science. We need to do a better job of listening to accomplish this goal.

It’s important that the research participants feel like they’re being listened to, that they’re being treated respectfully, and that they are part of helping solve the medical mystery. Studies like this point the way toward how to conduct rigorous scientific investigations with the kind of respectful, two-way street of engagement that participants want and deserve. We need studies like this to encourage more people to participate, and then to foster more confidence in the knowledge that results.

Many millions of people don’t trust what the scientific community has learned the past couple years about the pandemic. Especially during moments of maximum uncertainty, way too many people have turned to charlatans and other peddlers of misinformation for answers. Many people are vulnerable to these appeals because they feel like outsiders, like they’re not being listened to by The Establishment.

Some of this feeling is understandable, especially among people suffering from Long COVID, who haven’t been taken seriously enough by policymakers and the scientific community.

A little more careful listening could go a long way.

We might learn about the virus. We might also learn a bit about how to repair some of that torn social fabric. We need to do both of these things to get the scientific enterprise on a more sustainable footing, and to be better prepared for the next big thing.

 

This Week in Drug Pricing

How much do hospitals mark up the prices of cancer drugs they administer via infusion? How much do these prices vary from place to place? How often do they follow new federal rules on price transparency? Most people have no idea, and they would be shocked to learn the answers. Read about the eye-popping markups – between 120 percent and 630 percent — in in JAMA Internal Medicine.

Financings

Boston-based Sionna Therapeutics said it raised a $111 million Series B financing led by OrbiMed. The company is working on small molecules to fully restore function of the CFTR protein in cystic fibrosis patients. RA Capital, Atlas Venture and the CF Foundation also participated in the financing. Read RA Capital partner Josh Resnick’s piece on the opportunity to go beyond what Vertex has done in the past decade to transform the treatment of CF.

Somerville, Mass.-based Tessera Therapeutics said it raised more than $300 million in a Series C financing to advance its gene writing technology for drug discovery. Abu Dhabi Investment Authority; Alaska Permanent Fund Corporation; Altitude Life Science Ventures; ARTIS Ventures; Cormorant Asset Management and Tessera’s founder, Flagship Pioneering were among the investors.

Cambridge, Mass.-based Satellite Bio came out of stealth, saying it has raised $110 million in seed and Series A funds to make programmable cell therapies. aMoon Growth led the A round. Other investors include seed co-lead Lightspeed, aMoon Velocity, Polaris Partners and Polaris Innovation Fund. New Series A investors included Section 32, Catalio Capital Management and Waterman Ventures.

San Francisco-based Unlearn raised $50 million in a Series B financing. The company is working on a machine learning platform to help companies run randomized controlled trials with a higher probability of success, and with enrolling fewer patients. Insight Partners led with participation from new investor Radical Ventures, as well as all of the company’s existing investors including 8VC, DCVC, DCVC Bio and Mubadala Capital Ventures.

Denver-based Pathware raised $7 million to develop hardware and software for digital pathology, so it can go from the central lab to the point of care. UnityPoint Health Ventures and Level Eight Ventures co-led.

Emeryville, Calif.-based Octant said it raised $80 million in a Series B financing led by Catalio Capital Management. It’s using synthetic biology and chemistry to develop precision medicines. The company said it also established a Deep Mutational Scanning partnership with Bristol Myers Squibb, and hired Dean “Rick” Artis as its first Chief Scientific Officer. Feng Zhang also joined the Scientific Advisory Board.

Framingham, Mass.-based Alzheon, an Alzheimer’s drug developer, raised $50 million in a Series D financing.

Personnel File

Cambridge, Mass.-based eGenesis, an organ transplantation company, promoted Michael Curtis to CEO. He’s been president of R&D since 2020. Outgoing CEO Paul Sekhri will remain on the board of directors.

South San Francisco-based Twist Bioscience, the DNA synthesis company, promoted Tracey Mullen to senior vice president of operations, and Nimisha Srivastava to senior vice president of R&D. Patrick Weiss is stepping down as chief operating officer.

Cambridge, Mass.-based Evelo Biosciences, the developer of single-strain microbial therapies that can be given orally for inflammatory diseases, said it added John Maraganore and Tassos Gianakakos as strategic advisors. Maraganore is the former CEO of Alnylam Pharmaceuticals and Gianakakos is the former CEO of Myokardia.

Somerville, Mass.-based Finch Therapeutics, a developer of microbiome-based therapies, said it’s cutting its workforce by 20 percent.

Deals

Tarrytown, NY-based Regeneron Pharmaceuticals agreed to acquire Checkmate Pharmaceuticals, a cancer drug developer, for $10.50 a share, or $250 million. Checkmate is the developer of vidutolimod, a CpG-A oligodeoxynucleotide Toll-like receptor 9 (TLR9) agonist delivered in a virus-like particle to stimulate the innate immune system against cancer. Some market observers hoped that the acquisition might lift the biotech stock markets out of the doldrums, providing hope to the roughly 150 public companies that are now considered by investors to be essentially worthless. (See @bradloncar tweet).

New York-based Terran Biosciences said it licensed a pair of late-stage programs for Sanofi, and plans to develop them for neurological and psychiatric diseases. The assets weren’t disclosed, and neither were the financial terms.

AbbVie terminated its partnership with Sweden-based BioArctic. The companies had been working together since 2016 on antibodies directed against alpha-synuclein for Parkinson’s disease.

Waltham, Mass.-based Dragonfly Therapeutics said it expanded its research collaboration with AbbVie to work on immune-mediated diseases. AbbVie is getting the option to license multiple new candidates that use Dragonfly’s tri-specific NK cell engaging technology. Terms weren’t disclosed.

Data That Mattered

Amgen said it passed a Phase III trial with a biosimilar version of J&J’s ustekinumab (Stelara), an IL-23 antagonist for moderate to severe plaque psoriasis.

Moderna said its bivalent COVID vaccine candidate, designed to stimulate the immune system against mutations found in the Beta variant of concern, was able to elicit higher levels of neutralizing antibodies than the original vaccine formulation. The bivalent vaccine candidate appeared superior to the original against the Beta, Delta and Omicron variants one month after administration, the company said.

San Diego-based Arcturus Therapeutics said its self-amplifying mRNA vaccine candidate against COVID-19 delivered 55 percent vaccine efficacy against symptomatic COVID, and 95 percent efficacy against severe disease or death, in a study of 19,000 adults in Vietnam. Adverse events were similar between the vaccine and placebo groups, the company said. Arcturus said it’s planning a pivotal study of the vaccine candidate as a booster.

Ponte Vedra, Florida-based Orasis Pharmaceuticals said it met the primary and secondary endpoints of a Phase III trial that evaluated its eye drop for presbyopia – the loss of the ability to see items up close, a natural part of aging. The company said it plans to submit a New Drug Application to the FDA in the second half of 2022.

Science Policy
  • Better Ventilation Would Create a Healthier Workplace, but Companies Have to Invest. NPR / Kaiser Health News. Apr. 19. (Liz Szabo)
  • Now’s Not the Time to Dispense with COVID-19 Precautions. Washington Post. Apr. 20. (Lucky Tran and Oni Blackstock)
Strategy
Annals of Manufacturing

Bothell, Wash.-based Seagen, the developer of antibody-drug conjugates for cancer, officially announced its plans to open a 270,000-square foot manufacturing facility in Everett, Wash. The company said the new facility will give it “greater control and flexibility over the production of its medicines to treat cancer.” I consider this to be a shrewd move for several reasons. (See my Frontpoints column, Feb. 2022, “Biotech’s Future Off the Beaten Path.”)

Novocure said it’s breaking ground on a new facility in Portsmouth, NH, which will house “a training and development center where partners from around the world can come to learn about Novocure’s Tumor Treating Fields (TTFields) cancer therapy.” NH Gov. Chris Sununu attended the ceremony.

Santa Monica, Calif.-based Kite Pharma received FDA clearance for a new cell therapy manufacturing facility in Frederick, Maryland. The company said it now has facilities in southern California, Amsterdam and Maryland. Kite said in a statement it has “the largest, dedicated in-house cell therapy manufacturing network in the world, spanning process development, vector manufacturing, clinical trial production and commercial product manufacturing.”

Science
  • The Future of Early Cancer Detection. Nature Medicine. Apr. 19. (Rebecca Fitzgerald et al University of Cambridge)
  • Somatic mutation rates scale with lifespan across mammals. Nature. Apr. 13. (Alex Cagan et al Wellcome Sanger Institute)
  • The Challenge of Genetic Variants of Uncertain Clinical Significance. Annals of Internal Medicine. Apr. 19. (Wylie Burke et al University of Washington)
  • Development of a clinical polygenic risk score assay and reporting workflow. Nature Medicine. Apr. 18. (Matthew Lebo et al Mass General Brigham Personalized Medicine)
Science of SARS-CoV-2
  • The Evolution and Biology of SARS-CoV-2 Variants. Cold Spring Harbor Perspectives in Medicine. Apr. 20. (Amalio Telenti of VIR Biotechnology, Emma B. Hodcroft of University of Bern, Switzerland and David L. Robertson of MRC-University of Glasgow Center for Virus Research)
  • Intramuscular AZD442 (Tixagevimab–Cilgavimab) for Prevention of Covid-19. NEJM. Apr. 20. (Myron Levin et al Provent Study Group). For people at increased risk of an inadequate response to vaccination or increased risk of exposure, AstraZeneca’s antibody cocktail (Evusheld) delivered a 77 percent relative risk reduction of coming down with symptomatic COVID, compared with placebo. Patients were followed six months. (AZ press release)
  • Increased Memory B Cell Potency and Breadth After a SARS-CoV-2 mRNA Boost. Nature. Apr. 21. (Paul Bieniasz & Michel Nussenzweig et al Rockefeller University)
  • Vaccine effectiveness against SARS-CoV-2 infection and COVID-19-related hospitalization with the Alpha, Delta and Omicron SARS-CoV-2 variants: a nationwide Danish cohort study. MedRxiv. Apr. 20. (Christian Hansen et al Statens Serum Institut)
  • Admissions to a large tertiary care hospital and Omicron BA.1 and BA.2 SARS-CoV-2 PCR positivity: primary, contributing, or incidental COVID-19. MedRxiv. Apr. 18. (Juliette Severin et al University Medical Center Rotterdam, Netherlands)
  • Hospitalizations of Children Aged 5–11 Years with Laboratory-Confirmed COVID-19 — COVID-NET, 14 States, March 2020–February 2022. CDC Morbidity and Mortality Weekly Report. Apr. 19. (Dallas Shi et al CDC)
Science Features
  • Scientists Find No Benefit to Time-Restricted Eating. NYT. Apr. 20. (Gina Kolata)
A Word on Climb to Fight Cancer

Many of you saw social media announcements about my latest Climb to Fight Cancer campaign for the Fred Hutch Cancer Center.

I want to say thanks to everyone who contributed to this campaign. It was a huge success.

The 18-person team of biotech leaders reached Everest Base Camp in Nepal (elev. 17,600 feet) on Apr. 4. We raised $1.3 million for cancer research.

We enjoyed spectacular scenery in the world’s highest mountain range, the Himalayas.

We made new friendships on the trails.

We reveled in the culture of the Sherpa, the indigenous people of the Khumbu Valley famous for their strength at high altitude, and their generous spirit.

These trips are clearly resonating with many members of the biotech community. It was evident on the Kilimanjaro climb of 2019, on the Timmerman Traverse for Life Science Cares in 2021, and again on the Everest Base Camp trek of 2022.

I’m planning more expeditions. These trips mobilize the biotech community around good causes. I believe there’s tremendous potential for good work in the biotech community. I will continue finding ways to harness it.

For today, enjoy a few photos from the Everest Base Camp trek of 2022. Click on images to view at full size.

If you are interested in participating in a future expedition, or your company is interested in sponsoring one of these campaigns for cancer research or poverty relief, see me. luke@timmermanreport.com.

19
Apr
2022

Microbiome-based Drug Development: Bernat Olle on The Long Run

Today’s guest on The Long Run is Bernat Olle.

Bernat is the CEO of Cambridge, Mass.-based Vedanta Biosciences. The company was founded in 2010 by Puretech Health, in collaboration with a handful of academic founders.

Bernat Olle, CEO, Vedanta Biosciences

At the time, the faster/cheaper tools of DNA sequencing were making it possible for immunologists and microbiologists to gain a much more fine-grained view of the complex interplay between microbes and the human immune system. Learning more about the multiple factors at work in health and disease promised to open up a treasure trove of new ideas for treatment and wellness.

Vedanta has been at this a long time, and is now at something of a turning point. It has completed a Phase II trial with a lead product candidate for the treatment of C.difficile infections. With its specifically-defined consortia of live bacteria, made into an oral therapy, Vedanta hopes to restore the microbial community balance needed to help ward off an invasion of C.diff microbes. The company has some data showing it can reduce the risk of recurrent C.diff infections, which can cause hospitalization and death. Its task is now to reproduce those findings in Phase III.

Bernat has been a stalwart of the microbiome field over the past dozen years. He’s a Catalonian immigrant who made his way to MIT, and then to the biotech industry. He has an interesting personal journey, including a stint as a hockey player. He’s passionate about the role of immigration in making the US the world leader in biotech, and we discuss that briefly at the end.

Before we get started, here’s a word from the sponsor of The Long Run.

 

Alpenglow sheds new light on pharmaceuticals with AI-powered, 3D spatial biology. Pathology is an essential component of drug development, yet it is stuck in archaic times by looking through 2D slides. Alpenglow has developed an end-to-end drug development solution with proprietary 3D imaging, cloud processing, and AI analysis to digitize entire 3D tissues, providing 250 times more data and deeper insights. Learn how Alpenglow can illuminate your path to breakthrough results at alpenglowbiosciences.com.

Now, please join me and Bernat Olle on The Long Run.

5
Apr
2022

Samantha Truex on How Getting Market Feedback Turned Into M&A for Padlock

Vikas Goyal, former SVP, business development, Pandion Therapeutics (now part of Merck)

Samantha Truex is the CEO of Upstream Bio, a stealthy developer of drugs for inflammatory diseases with $200 million in backing from a syndicate led by OrbiMed.

Before her newest venture, Sam had an impressive career as a business development executive, including as the chief business officer of Cambridge, Mass.-based Padlock Therapeutics. That company, a developer of Protein/Peptidyl Arginine Deiminase (PAD) inhibitors for autoimmune diseases, was acquired by Bristol Myers Squibb in March 2016.

Samantha Truex, CEO, Upstream Bio

The deal pre-empted Padlock’s trajectory as a growing start-up and provided investors with an unusually fast windfall return. Padlock secured a $150 million upfront payment, and was eligible for another $450 million in milestone payments.

The company was less than two years old, and had raised a $23 million Series A financing led by Atlas Venture.

With that deal now six years past, I asked Sam to talk about some of what happened behind the scenes.

Why were you pursuing a deal in the first place?

So the first point is that the deal didn’t need to happen. At the time, Padlock was a biotech focused on small molecule inhibitors of the PAD enzymes. We had the backing of excellent investors in our Series A, including Atlas Venture.We were well underway with investor discussions around a Series B which I felt quite confident could happen. Our pipeline was making great progress towards development candidate nomination in the next several months.

Given our stage, there was a clear choice facing us — should we start to build out Padlock to take our programs into the clinic, or should we partner with a larger company who could exploit the programs further than we might have on our own?

We spent a lot of time thinking about this. I really credit our investors and our management team, especially our CEO Mike Gilman, with taking a very thoughtful approach to deciding which pathway was best for us to pursue.

We had reached out to several partners to explore a collaboration. This fortunately generated quite a bit of interest and competition for our PAD inhibitors. There aren’t a lot of new and novel targets in the inflammation space and the PADs had high interest in industry. We ended up receiving term sheets from three different parties including BMS’ acquisition proposal.

Why did you end up partnering with BMS?

In fact, we had gotten quite far down the path with another company, let’s call it Company X, around a pretty different structure that included a meaningful upfront cash payment and equity investment, with an option to be acquired at the end of Ph1b. We really liked the team from Company X. They were thoughtful, creative, and really engaged on the potential to pursue PAD inhibitors in multiple clinical populations in parallel in Ph2 to de-risk the biology and try to benefit as many patients as possible. We had also spent a lot of time with them to work out the details of the research collaboration.

Behind the scenes, we were also having discussions with BMS.

Their approach was very different and much more transactional. They did not want to help grow Padlock, and wanted to pursue something more like a license where BMS would take the ball and run. For most of our BD process, this structure was not really that attractive to us and we were much more interested in the collaborative approach Company X was pursuing.

Along the way, though, we began to ask if there was some economic range whereby BMS’ proposal would be acceptable. Ultimately, we negotiated BMS to a very attractive deal range including $225M near term, of which $150M was upfront, with a total of $600M including downstream payments.

We also noted that, at least as of that time, Company X did have a track record of either renegotiating their option deals during the course of the collaboration, or not executing the options at all. As the small biotech in these types of option deals, you are beholden to the bigger company’s strategy shifts — do they decide to exit that research area, or do they end up partnering with a competitor program. So even if you achieve the technical milestones, you may not achieve the actual full goal of getting your medicine to patients. And in hindsight, Company X did end up having a major strategy change that might have impacted the outcome of our program.

What made Padlock’s program so attractive to industry? How did you convey Padlock’s innovation without giving away the “secret sauce”?

We knew that many companies had tried to develop chemical matter against the PAD enzymes and had failed. Padlock had made great progress on our chemistry and this was evident to all the parties around the table. We allowed extensive third-party chemistry diligence. We also executed an MTA with BMS so they could work with our compounds directly. This is always a little tricky to do if you have not run all of the assays the partners are going to conduct, but we felt confident that our compounds would perform well.

This was a great competitive process. How did you convey to the other parties that there was real competition?

Look I don’t make stuff up, I don’t lie, I don’t bluff, and I take the terms of CDAs very seriously. So in this case, Company X’s CDA was really broad and could be interpreted as covering even the existence of the CDA itself. So I ended up having to talk to BMS about the need for parties to move quickly, that there was a lot of energy in the process, and even sharing our decisions to focus on other strategic directions. And I could tell that several of the BMS team did not believe it was as competitive as it actually was. In fact, after the acquisition closed and I shared all of my company files, I distinctly remember exchanging  emails with my BD counterparts at BMS when they finally saw this almost fully-negotiated contract with Company X.

We also made it a point of being very responsive to all of the parties involved. One thing I note that Company X did not do was ask me if everything was still on track, if Padlock had any other considerations in the process, or if any changes to the deal structure might be worth exploring. Because we were so far down the path with Company X and the potential with BMS seemed low, we didn’t share that the competitive environment was changing when BMS came back to us. If Company X had asked us directly, we would have answered.  Since they did not ask, we waited until we had an acceptable M&A proposal from BMS before sharing that competitive reality with Company X.

They were quite unpleasantly surprised by this news. 

One can question whether we should have given them some more hints, but this was a critical business decision for Padlock with massive uncertainties along the way and two parallel confidential discussions progressing. There was no requirement for us to share our options and no exclusivity in place.

We preferred the Company X development plan, so we did give them a chance to pivot to an M&A structure with essentially the same financial investment. Ultimately, they wanted to stick with an option-based structure and didn’t make an M&A proposal.   We went with the BMS acquisition deal.

This kind of BD process is also a lot of work. How did you keep the Series B process going in parallel?

We just did a lot of work! This was definitely a time of a lot of work and not a lot of sleep. We kept building the company.We moved to bigger labs.We recruited additional senior team members.We scaled up manufacturing of our short-list development candidate leads.We were also talking to Series B investors.

As the BD person you’re bringing the team these proposals and sort of representing the outside world to your team. How did you balance that role with your responsibility as a senior member of the team to decide what was right for Padlock?

I was intimately involved with these important considerations and decisions. I tried to be as objective as possible in trying to evaluate what was best for all of our stakeholders — our patients, the investors, and the employees of the company. I give a lot of credit to Mike Gilman for involving me in this process.

We also spent a lot of time getting the senior R&D management team involved in these decisions, and helping them understand the implications on them personally because they were going to have to live with the collaboration or acquisition decision.

For example, would the scientists want to work for BMS? Would BMS want them to become employees? And because we were a small private company, we could really engage openly in these discussions with the team.

For most of the process, we really didn’t want to be bought. We turned down multiple proposals from BMS but when they came back with the economics we ultimately closed at, we were aligned it was the right deal to do. And the team was actually a little sad — we wanted to keep working together. But this was such a great return to our investors, we knew it was the right thing to do.

We also believed BMS was going to push this program aggressively. We suspected that BMS had learned a lot about the potential role of PAD inhibition in rheumatoid arthritis through their work on abatacept (Orencia). This was a company that was already set-up to immediately take the knowledge they already had and move with it. BMS was pretty different from the other companies around the table in this way.

In hindsight, would you do the deal again?

A lot of the original champions for our partnership at BMS have departed the company, presumably because of changes in strategic directions at BMS. Unfortunately, that is one of the inherent risks of transacting with a large pharma. So sometimes in retrospect I wonder if we should have kept going on our own until we got our own clinical data. And we’re now several years after Padlock’s acquisition closed, and BMS has still not disclosed a clinical stage PAD inhibitor.

But even knowing what I know now, I still think I would do this again.

First, I cannot honestly say that Padlock could have gotten these programs into the clinic if we had retained everything — I’m not privy to all of the data that BMS has generated since the acquisition. And frankly we got a substantial amount of value upfront and that was a great return to our investors at the time.

What did you learn from this process? What lessons would you share with your BD peers?

One thing I was really impressed with is how some of the pharmas approached us. As an example, early in our process Gilead brought multiple leaders from their R&D team all the way to the East Coast to meet with us. They talked to us about how interested they were in our work, and that they respected how we were approaching the science and wanted to hear from us how we would take the programs forward.

Second, I want to reiterate the importance of our not needing a deal.

I think it’s very important to always run a program as if you are the one who is going to take it all the way to market. You should never slow things down in anticipation of a deal.

First, if you slow things down it will actually hurt the momentum of any deal process. Second, partners will assume you desperately want to do a deal if you slow things down, which could hurt your valuation. And third, a deal is never done until it’s closed so you have to keep running it.

Finally, in my career, I think as interesting as the deals we do close are the deals we don’t close.

I’ve seen a lot of deals end up not closing, even some deals that were all the way through contracts. As leaders in our companies, it’s important we keep the focus on the future of the company and long-term value creation for both shareholders and patients. Even some deals with great upfronts and that would garner terrific press coverage I’ve ended up walking away from because they weren’t the right fit with the company’s goals. It’s easy to get caught up in getting a deal done, yet a deal is only a good deal if it accomplishes the long-term objectives of both companies entering into it.

16
Mar
2022

Evidation: Finding Tailwinds For Pharma Companies, and Individual Patients

Lisa Suennen

Sailors know the concept of tacking. It’s an essential way of moving forward. Without tacking, the headwinds are too strong. The boat can go wildly off track, or stall. By steering from one direction to the other, in zigs and zags, it is possible to drive into the headwinds and make progress. Do it well, and you can gradually overtake an opposing force to reach the destination.

San Mateo, Calif.-based Evidation Health, Inc. has a long history of tacking, and it’s now maneuvered itself into position to perfectly match what the market wants. This is the well-known state of “product-market fit.” And when a company reaches this stage, the tailwinds begin to take over, helping push it even faster to the planned destination of market success.

Founded originally in 2012, the predecessor company to Evidation was called The Activity Exchange (TAE). TAE was founded early in the days of the digital health revolution, long before paths to health data monetization were clear. The company originally took data from consumer wearables and applied sophisticated predictive analytics to encourage wellness and drive patient behavior, particularly for employers and insurance companies. 

In many ways, that was the right product, but it entered the market at the wrong time. It was simply much too early for customers that were just beginning to think about the role that digital data might play in encouraging better health outcomes. As such, Evidation put its boat in the water at the precise moment that the oncoming wind was strongest.

When TAE merged with the newly formed Evidation in 2014, the company made its first tack. It shifted to help the emerging digital health companies demonstrate the value and validity of their products and interventions for pharma companies, payers, and other clients.

By helping digital upstarts develop an evidence base, they posited, all boats would rise. As it turned out, the digital health startups of that period didn’t have the funds to undertake the kind of sophisticated demonstrations of efficacy that Evidation sought to manage on their behalf for that demanding set of customers – pharmaceutical companies and health insurers.   

Many digital health companies of the time hit the rocks. But Evidation noticed something that led it to tack again — that the pharmaceutical companies were coming up the learning curve in digital health. They had both money and interest to invest in understanding patients’ experience when taking medications.

In response, Evidation redirected its efforts toward becoming a digital products Clinical Research Organization (CRO) of sorts. Evidation found a new angle, helping pharmaceutical companies sort through the burgeoning array of digital products to evaluate their validity and usefulness. With Evidation’s help, pharma companies, through a series of short post-market studies, began to see a more vivid and detailed picture of patient’s everyday lives as they interacted with newly marketed biopharmaceuticals.

Suddenly, Evidation was in position to provide pharmaceutical companies with new information that could help them with their sales and marketing campaigns.   

Each of these tacks was complex. That’s not just because of the business shifts required, but because there was uncertainty among leadership and, at times, a lack of unanimity on the Board as to whether the pharma market was really the right course to pursue.

At the time Evidation made this move, the idea of real-world evidence (RWE) was gaining currency in the pharma/biotech realm, especially as it related to Phase IV post-marketing surveillance studies of new drugs.But the market sent out some mixed signals that would, on occasion, tug the company back toward its wellness roots.

But Evidation fundamentally stayed on course. As it picked up steam, it began to recognize that its pharma insights business, as designed, wasn’t going to get them all the way to their target destination. 

Instead, the Evidation team was encountering more wind than waves, and that was keeping the business from growing to its full potential. Most of the pharma contracts were for short studies (3 month “catch and release studies” as Evidation internally referred to them) that did not produce a recurring revenue model or an ongoing relationship with customers and patients. Notably, pharma and biotech companies were also becoming far more curious and sophisticated about how data and data science could inform their business at a much more profound level.

It was time to tack again. 

Ultimately, the business set its course toward gathering and analyzing patient insights over extended periods of time (not just for short bursts), developing large condition-specific cohorts drawn from its proprietary patient network (the company has built a patient network of over 4.5 million individuals willing to participate in studies for minimal compensation). This has enabled pharmaceutical companies to engage in continual and continuous learning about patient experience through longitudinal engagement with large target populations.   

Evidation’s many large and mid-sized pharmaceutical and biotech clients can now continue to develop new queries and hypotheses to test and identify emerging trends over the course of a year or more to get a more holistic picture of what it’s like for people to live with various medical conditions and to take medications over the long term. At the same time, companies can satisfy patients’ hunger for education about how to best care for themselves by sharing information and personalized content, as well as relevant and individualized data with cohort participants.

Christine Lemke, co-founder and co-CEO, Evidation

It’s early going on this course, but the coordinates appear to be correct.  As Co-Founder and Co-CEO Christine Lemke noted, “It’s fascinating to see how many use cases come out of the woodwork as you watch the population for longer periods. Trends over time are profound and many could not have been anticipated.”

Evidation and its biopharma clients have been experimenting, for example, with large cohorts of patients who opted in to allow programs to track possible signs of emerging illness. By monitoring certain vital signs, it has been possible to see subtle fluctuations that could portend signs of flu or COVID-19. When identified, the patients are engaged to take tests for both conditions, an action they deeply appreciate. Interestingly, this may send Evidation heading full circle to its original customer roots as the company identifies ways of predicting and preventing illness.

For now, Evidation is running with the pharma sector. 

With its many zigs and zags, the big learning for Evidation has been importance of staying nimble, noting it’s much harder to tack with 300 team members than 30.  

“Being ahead of the market is hard and being first is not always best,” Lemke says. “Sharks survive because they keep moving. We realized along the way that we were never going to have perfect info or judgment, so we must always watch how the wind is blowing and just keep going.”

14
Mar
2022

Structural Biology-Driven Drug Discovery: Ray Stevens on The Long Run

Today’s guest on the Long Run is Ray Stevens.

Ray is the CEO of ShouTi. It’s a company that uses advanced structural biology technologies like cryo-EM images, and computational techniques, to discover small molecule drugs. The idea is to come up with orally available medicines that can build off the biological insights gained from protein or peptide drugs, but replace them with a less expensive and more convenient oral small molecule.

Ray Stevens, CEO, ShouTi

ShouTi has operations in San Francisco and Shanghai, making it a hybrid Chinese-and-American company. The company raised a $100 million Series B financing in October.

Ray comes to this position with a long and distinguished track record in structural biology. Ray was a professor at USC, Scripps Research, and UC Berkeley. He played a role in Syrrx, which was acquired by Takeda, and later co-founded Receptos – a company acquired by Celgene for $7.2 billion. The main asset there was ozanimod. It’s an oral small molecule agonist aimed at a G-protein coupled receptor target. It’s now marketed by Bristol Myers Squibb as Zeposia for the treatment of multiple sclerosis and ulcerative colitis.

In this conversation, we talk about Ray’s journey through academia and industry, the technologies that are enabling important advances in small molecule drug discovery, and a bit on what it’s like to run a company that tries to bridge the gap between the US and China.

Now please join me and Ray Stevens on The Long Run.

1 2 3 58