The Biotech Beat: 11.4-11.10.24
by Joey Bose and Aruesha Srivastava
🌟Upshot
The biotech and healthcare landscape is undergoing seismic shifts, marked by major drug developments, strategic pivots, and sweeping political changes. 🚀 Viking Therapeutics is leading the charge in obesity treatment with its GLP-1/GIP dual agonist VK2735, showing 6.8% weight loss in just four weeks in Phase 1 trials and advancing quickly to Phase 3. 🏋️♀️ Beam Therapeutics, meanwhile, navigates both promise and tragedy with its sickle cell therapy BEAM-101, which triggered strong fetal hemoglobin expression but saw a patient fatality, rattling investor confidence. 💉 Sanofi’s rilzabrutinib targets immune thrombocytopenia (ITP) with promising results—23% of patients achieving platelet count targets—positioning it as a blockbuster hopeful. 💊 Novo Nordisk’s once-daily etavopivat reduced sickle cell pain crises by 46% in Phase 2, set to begin Phase 3 trials in December. 💊 In DMD, Sarepta has abandoned its PPMO platform, citing safety issues with SRP-5051, an exon-skipping drug, as they recalibrate future ambitions. 🚫 Startup Archon Biosciences promises a leap in computational protein design, debuting “antibody cages” and launching with $20 million in funding, eyeing breakthrough drug applications. 🧬 Amid industry headwinds, Avid Bioservices is going private in a $1.1 billion deal, while CVS grapples with Aetna’s 95.2% medical loss ratio, prompting an urgent restructuring effort. 💸 Overarching it all is the U.S. political climate: Trump’s return to the presidency brings "Make America Healthy Again," with RFK Jr. promising to reshape healthcare regulation, challenging everything from Big Pharma to food additives, with $4.5 million in MAHA Alliance funding fueling the movement. 🇺🇸 Together, these stories signal an industry both empowered and challenged by innovation, safety risks, market volatility, and looming regulatory overhaul. 📊
🔬 Research, Development & Drug Approvals 💊
🔥 On the Brink of Big Pharma Showdown: Viking Therapeutics Sprints Ahead with Promising Anti-Obesity Pill
The Facts
Viking Therapeutics’ oral anti-obesity drug, VK2735, posted a promising placebo-adjusted weight loss of 6.8% at the 100 mg dose after just four weeks, surpassing the typical 3-6% weight loss seen in other early-stage oral treatments. This readout, presented at ObesityWeek, attracted a large audience eager to witness results that may position Viking near the top in the competitive obesity field. The Phase 1 study, involving 92 patients, showed dose-dependent efficacy with the highest dose delivering the most significant results. In Phase 2 trials with injectable VK2735, patients on the highest dose achieved a placebo-adjusted 13.1% weight loss after 13 weeks. While the company will initiate a 13-week Phase 2 trial for the oral formulation this quarter, speculation of a potential acquisition swirls as they pursue an accelerated commercial timeline.
Our Opinion
Viking Therapeutics’ ambitious progress in the obesity drug landscape is both a bold leap and a cautionary tale for the biotech sector. The drug’s impressive short-term efficacy positions Viking as a strong competitor, but comparisons to heavyweight companies like Eli Lilly and Novo Nordisk highlight the steep climb ahead. Viking’s decision to skip Phase 2b for VK2735’s injectable formulation speaks to its confidence—and perhaps to the pressure of capturing market share in a crowded field. Yet, without a direct head-to-head Phase 3 trial against established products, it’s uncertain if VK2735 will meet the efficacy and safety expectations set by the likes of Wegovy or Zepbound. Still, Viking’s progress energizes the biotech field and injects fresh competition into the burgeoning obesity therapeutics market, making it a biotech player to watch.
Your Turn
Considering the rising prominence of GLP-1-based therapies in obesity management, how might Viking Therapeutics' entry with VK2735 impact the market, especially if they avoid direct comparison trials against major players like Wegovy?
🧬 A New Hope or Just Another Hurdle? Beam Therapeutics' Gene-Edited Sickle Cell Therapy Shows Mixed Early Results
The Facts
Beam Therapeutics revealed early findings for BEAM-101, its gene-edited therapy targeting sickle cell disease, with initial data from six severely affected patients. While the treatment induced fetal hemoglobin levels over 60% and reduced sickle hemoglobin by up to 36%, a patient tragically passed away due to respiratory failure, possibly related to the necessary busulfan conditioning. Beam’s shares fell by 10% following the news. The trial reported faster engraftment times (17 days for neutrophils and 20 for platelets) compared to Vertex’s Casgevy, potentially reducing hospital time and infection risk. However, with competitors like Vertex and bluebird bio already in the market, questions arise about the commercial appetite for a third gene therapy in this niche.
Our Opinion
Beam Therapeutics’ early-stage data underscores both the promise and pitfalls of emerging gene therapies for sickle cell disease. BEAM-101’s efficacy in inducing fetal hemoglobin is promising, yet the risk associated with intense chemotherapy conditioning highlights the pressing need for safer alternatives. The faster engraftment times may offer advantages in terms of patient recovery, but whether these differences are meaningful enough to secure Beam’s commercial success remains to be seen. With two established gene therapies already on the market, Beam faces an uphill battle; without a less risky approach, its “gentler” base editing may still struggle for traction. The real impact of BEAM-101 lies in its potential to evolve base editing as a safer, next-gen solution in gene therapy—a narrative that could transform not only sickle cell treatments but the biotech landscape at large.
Your Turn
Given the established presence of Casgevy and Lyfgenia in the sickle cell gene therapy market, how might Beam’s faster engraftment times and base editing approach influence patient choice, especially in light of the conditioning-related risks?
💉 Sanofi's BTK Inhibitor Rilzabrutinib Shakes Up Rare Disease Treatment with Promising Platelet Boost
The Facts
Sanofi’s rilzabrutinib, a BTK inhibitor, achieved a 23% success rate in helping adults with immune thrombocytopenia (ITP) reach target platelet counts in a Phase 3 trial, while none in the placebo group met the same milestone. Of the 133 rilzabrutinib-treated patients, 31 maintained platelet levels of 50,000/μL or higher over an eight-week period, marking a promising step as Sanofi prepares a U.S. regulatory filing. The trial also showed a 53% decrease in rescue therapy needs and improvements in fatigue. Despite some adverse events, including a Grade 3 embolism, Sanofi projects rilzabrutinib as a potential blockbuster with peak sales estimated between $2.2 billion and $5.5 billion, following its $3.7 billion acquisition of Principia Biopharma in 2020.
Our Opinion
Sanofi’s rilzabrutinib offers a ray of hope in the challenging realm of autoimmune blood disorders, where treatment options are sparse, and patient outcomes often bleak. While the 23% efficacy rate in platelet elevation may seem modest, it represents a breakthrough for individuals who have exhausted multiple therapies, with nearly half of the trial patients having cycled through five or more treatments. Yet, rilzabrutinib’s potential is tempered by the safety profile; adverse events like the Grade 3 embolism warrant careful consideration, especially given the long regulatory road still ahead. Sanofi’s investment and commitment to broad indications for rilzabrutinib may also solidify its position in hematology, potentially influencing broader adoption of BTK inhibitors in autoimmune diseases. The biotech industry will be watching closely as rilzabrutinib advances, both as a specific ITP therapy and as a possible frontrunner in BTK-targeted autoimmune treatments.
Your Turn
With rilzabrutinib’s mixed safety profile, how might patient advocacy groups and regulatory agencies balance the need for new ITP treatments against the risks, especially considering that many ITP patients are already heavily pretreated?
🌅 Novo Nordisk Targets Sickle Cell Pain with Game-Changing Daily Pill
The Facts
Novo Nordisk’s etavopivat, a once-daily treatment for sickle cell disease, demonstrated a significant reduction in pain crises in a Phase 2 trial, with patients experiencing around 46% fewer vaso-occlusive crises (VOCs) compared to placebo. In the HIBISCUS trial, which included 60 participants over one year, patients on etavopivat's high (400 mg) and low (200 mg) doses reported an average of 1.06 and 1.07 pain episodes annually, respectively, versus 1.97 episodes for those on placebo. Novo Nordisk, which acquired etavopivat through its $1.1 billion acquisition of Forma Therapeutics, plans to commence a Phase 3 trial in December. Adverse events were mostly mild, though some serious cases involved liver enzyme increases, hemoglobin decreases, and insomnia in the high-dose group.
Our Opinion
Novo Nordisk’s foray into sickle cell treatment with etavopivat highlights its commitment to expanding beyond its diabetes and obesity stronghold, aiming to address unmet needs in blood disorders. The 46% reduction in VOCs is particularly noteworthy, as pain management in sickle cell disease remains a persistent challenge. While the mild adverse events offer reassurance, the serious events, particularly liver enzyme elevations, underscore the risks in drug development for such a delicate condition. As Novo embarks on Phase 3 trials, the industry should watch if etavopivat can maintain this efficacy and safety profile over longer periods and in larger populations. If successful, etavopivat could set a new standard in sickle cell pain management, potentially attracting further investment in once-daily therapies within hematology.
Your Turn
Given the chronic and painful nature of sickle cell disease, how might etavopivat’s once-daily dosing and efficacy impact patients’ adherence and quality of life compared to existing treatment options, especially if long-term safety remains favorable?
🚫 Sarepta Halts Duchenne Muscular Dystrophy Drug Development Amid Safety Setback, Ending PPMO Platform
The Facts
Sarepta Therapeutics has terminated development of its Duchenne muscular dystrophy (DMD) candidate SRP-5051 due to persistent safety concerns, specifically hypomagnesemia, marking the end of its phosphorodiamidate morpholino oligomer (PPMO) platform. Initially halted in 2022 over low magnesium levels, the drug faced additional regulatory challenges, as the FDA indicated it was uncomfortable with accelerated approval based on SRP-5051’s profile. Despite promising dystrophin expression, Sarepta’s decision was driven by a risk-benefit analysis that deemed long-term safety unmanageable in a chronic treatment setting. With this, Sarepta will discontinue all PPMO-based programs, which were intended to enhance dystrophin production with a cell-penetrating peptide.
Our Opinion
Sarepta’s decision to abandon SRP-5051 and its entire PPMO platform underscores the significant hurdles of balancing efficacy with safety in genetic therapies for chronic conditions like DMD. While SRP-5051 showed encouraging efficacy in dystrophin expression, the persistence of hypomagnesemia poses a formidable challenge that Sarepta’s current strategy couldn’t overcome. This move also reveals the FDA’s increasing scrutiny over safety profiles in accelerated approvals, especially for drugs with novel delivery mechanisms. Although Sarepta’s PPMO platform had unique potential, this setback will likely shift focus and funding within the DMD research landscape, potentially slowing down innovation. Nevertheless, this tough decision illustrates a responsible, albeit disappointing, approach to drug development in complex diseases where patient safety is paramount.
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Your Turn
With Sarepta discontinuing its PPMO platform, how might this impact the broader DMD treatment landscape, especially as emerging therapies with different mechanisms gain regulatory traction?
💰 Investment, M&A, and IPOs 📈
🌐 Revolutionizing Antibodies: Archon Biosciences Enters with Nobel Prize Power and "Antibody Cages"
The Facts
Archon Biosciences, a Seattle-based biotech startup, recently launched with $20 million in seed funding and $7 million in grants. Co-founded by Nobel laureate David Baker, Archon aims to transform antibody therapeutics through "antibody cages," a technology that adjusts antibody nanostructures without altering their amino acid sequences. This "bolt-on solution" allows antibodies to retain their original therapeutic properties while optimizing their binding and distribution characteristics. With 17 employees and a financial runway through 2026, Archon intends to select a lead program and launch clinical trials, though details about its disease targets remain undisclosed.
Our Opinion
Archon’s ambitious entry into the biotech landscape could redefine antibody therapeutics, potentially accelerating drug development timelines while maintaining efficacy. Their approach to manipulating antibody structure with computational protein design aligns well with current trends in precision medicine, yet the lack of disclosed targets raises questions about the immediate applicability of "antibody cages." The technology’s ability to preserve antibody functionality while enhancing drug-like properties could set a new standard in biologic drugs, though it must first prove scalable in clinical settings. Archon’s Nobel-backed credibility and strong financial backing certainly elevate its promise, but without clearer therapeutic applications, the company’s value remains speculative—a gamble on high-tech protein manipulation that could reshape the industry or fall prey to overly complex execution.
Your Turn
Given the transformative potential of “antibody cages,” how might this technology compare with traditional methods of antibody optimization, especially in the context of diseases requiring targeted and long-acting treatments?
💸 Avid Bioservices Goes Private Amid Biologics Turbulence in $1.1 Billion Deal
The Facts
Avid Bioservices, a biologics CDMO, will be acquired and taken private by GHO Capital Partners and Ampersand Capital Partners for $1.1 billion, with shareholders receiving a $12.50 per-share payout—a 13.8% premium over its recent closing price. Avid, with 350 employees and four facilities in Orange County, faced financial struggles over the past year due to reduced demand from early-stage pharma clients. Despite a recent 6% revenue uptick, Avid’s board accepted the acquisition to ensure immediate cash value for investors. This first public-to-private move for GHO Capital is expected to conclude in Q1 2024.
Our Opinion
This acquisition underscores the volatility facing CDMOs as shifting dynamics in the biotech sector compel companies to adapt or exit. Avid Bioservices’ revenue challenges highlight how the trend of pharma clients pulling back on early-stage projects for cash conservation is reverberating through the supply chain. Going private may provide Avid with the flexibility to recalibrate without public market pressures, a move that could stabilize its services portfolio and potentially streamline operations for long-term growth. Yet, the modest premium over recent trading prices and the general sentiment of “disappointment” among shareholders reflect the challenging climate for CDMOs. While GHO and Ampersand have high hopes, they face an uphill task in rejuvenating Avid in an uncertain biologics market.
Your Turn
With many biotech firms reducing early-stage investments, how might private ownership affect Avid’s strategy in capturing future growth opportunities within the biologics and gene therapy manufacturing sector?
⚖️ Politics & Policy 🏛️
⚖️ CVS Grapples with Aetna Woes as Medicare Costs Surge and Star Ratings Fall
The Facts
Facing substantial headwinds in its insurance arm, CVS did not provide formal guidance for 2024 in its recent earnings call. CEO David Joyner explained that Aetna’s Medicare Advantage missteps—specifically underpricing amidst rising utilization and underperforming star ratings—have strained financials. Aetna’s medical loss ratio (MLR) rose sharply to 95.2% in Q3 2024, compared to 85.7% last year, with the first nine months averaging a high 91.7% MLR. In response, CVS is revamping Aetna’s leadership team, recently appointing Steve Nelson as Aetna’s CEO and Andreana Santangelo in a financial oversight role, in hopes of stabilizing performance. CVS CFO Tom Cowhey noted that while 2025 will be a "transition year," the company remains optimistic about a long-term earnings recovery.
Our Opinion
CVS’s challenges with Aetna illustrate the risks insurers face when market missteps collide with volatile healthcare costs. The sharp rise in Aetna's MLR, driven by elevated utilization, reflects an industry-wide trend that’s particularly punishing for plans that underestimated cost structures. Leadership restructuring may signal a proactive approach, yet CVS’s non-committal stance on 2024 guidance suggests a longer recovery horizon and cautious optimism. CVS’s pivot to experienced leaders like Steve Nelson could bring much-needed discipline to Aetna’s operations, but the inherent unpredictability in healthcare utilization will continue to challenge Aetna’s ability to stabilize. For CVS, balancing rapid membership growth with sustainable cost management will be crucial to restoring investor confidence.
Your Turn
Given the challenges with Medicare Advantage costs and utilization rates, how might CVS’s strategic focus shift in other areas, such as its pharmacy operations, to offset the financial strain within Aetna’s insurance business?
🎉 Biopharma Braces for Change: Trump’s Return and Kennedy’s "Wild" Healthcare Vision Add Uncertainty
The Facts
With Donald Trump’s re-election, the biopharma industry faces both promise and ambiguity. Trump has yet to outline detailed healthcare plans, but his past drug pricing initiatives and Project 2025 policy hints could influence his approach. The GOP’s control of the Senate and House may support Trump’s rollback of the Inflation Reduction Act (IRA), potentially reducing pharmaceutical pricing constraints. Adding intrigue, Trump has tapped controversial figure Robert F. Kennedy Jr. to lead health regulation reform, promising sweeping changes across agencies like the FDA and CDC. Initial market responses view the Republican win as a “modest positive” for biopharma, but Kennedy’s anti-vaccine stance could disrupt industry relations and influence key regulatory policies.
Our Opinion
Trump’s return and Kennedy’s proposed role represent a volatile mix for the biopharma sector. On one hand, Trump's skepticism toward the IRA and potential relaxation of FTC scrutiny could reduce regulatory pressures, a positive development for companies seeking stability in drug pricing and M&A activity. However, Kennedy’s anti-vaccine rhetoric and proposed “transformation” of health agencies could severely challenge existing public health initiatives and breed regulatory unpredictability. The notion of “letting Kennedy go wild” on healthcare could risk derailing ongoing efforts in vaccine development and drug approval processes, unsettling a biopharma landscape already navigating pricing and innovation challenges. Industry players are right to be cautious, as policy shifts under Kennedy’s influence may reverberate beyond regulatory changes, potentially altering public trust in science and health agencies themselves.
The “Make America Healthy Again” (MAHA) initiative, led by Robert F. Kennedy Jr., promises a controversial shift in U.S. healthcare. Kennedy's agenda includes restricting direct-to-consumer pharmaceutical ads, cracking down on ultra-processed foods, and removing health officials with industry ties. The MAHA team features influential figures like Vani Hari, known for her anti-additive stance, physician Casey Means, and wellness entrepreneur Mark Hyman. This alliance pushes for significant FDA reforms and a focus on wellness and chronic disease prevention, a pivot that could challenge pharmaceutical and food industry norms. Key MAHA advocates, including Senator Ron Johnson and influencer Jessica Reed Kraus, have rallied public support, amplifying Kennedy’s message across social media and conservative platforms.
Your Turn
With Kennedy potentially at the helm of the FDA and CDC, how might pharmaceutical companies need to adapt their communication strategies to address both public concerns over vaccines and potential shifts in regulatory oversight?
Disclaimer: The contents of this article are not to be construed with investment advice. The information presented in this article is a compilation of current events, technical analyses, corporate press releases, and the author's personal viewpoints about the biotechnology industry. While efforts have been made to provide accurate and timely information, there may be inadvertent errors, omissions, or inaccuracies. Therefore, investment decisions should not be made solely based on the content of this article. The article may contain statements that are forward-looking in nature, encompassing predictions and future expectations that are subject to inherent risks and uncertainties; as such, actual outcomes may significantly deviate from those expressed or implied herein. This article serves purely as an informational and entertainment resource, and should not be construed as an endorsement to purchase or sell any financial securities. Prior to engaging in any investment activities, it is imperative that you conduct comprehensive due diligence and consult with a qualified financial advisor.