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A
You're listening to Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry with a group of biotech leaders and experts. I'm Stan Fazeli and my co hosts today are my friends Josh Schimmer, Eric Schmidt and Tess Cameron. And Tess is on her way. She's not quite here yet. For more information about our hosts and guests, speakers or to listen to the most recent episodes, which I encourage you to do because they're always great for a catch up please go to biotechhangout.com now looking at this week, we've had some, not necessarily the busiest week in terms of news, etc. But we've got some events that took place that we're, we definitely are going to talk about which is of course related to the fda, but we're going to start with deals and financing which is we've had another big deal that involves a China biotech company. This one is Bristol Myers with Hengary. I'm going to call it a massive
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B
deal,
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A
but it's not the most massive because we've had bigger ones recently and continues to show the trend of outsourcing some early drug development to what I would call potentially still a cheaper and faster country for early stage drug development. So the agreement includes, includes four drugs, oncology drugs and hematology drugs from Hungary, four immunology assets from Bristol Myers and five innovative assets to be jointly developed and discovered and developed by both companies. And it uses clearly the Hungary technology platforms, et cetera. And of course some of the assets that are coming from Bristol Myers have been discovered at Bristol. So. So they gonna Henry has an option. This is an interesting aspect in this deal because I haven't seen this necessarily in other deals, although I have to say I can't remember every single detail of every single deal to co develop select assets and the potential to conduct certain commercialization activities globally with Bristol Myers. That's the interesting part that I've not seen before. I've seen these deals where the pharma partner, often US or European pharma partner, is working with the company, but the local company keeps the region, Macau, Hong Kong, China and usually leaves the global commercialization rights to others. So this is interesting to see. And of course part of the reason that these deals are happening aside from the good science that takes place in China is because early clinical development is still a little faster in China or something meaningfully faster in China than it is in the rest of the world. And of course this comes back to Our conversation that we will have later on about the FDA and the changes in leadership, etc. And the term deal terms are the Ms. Pays about 900, well, or up to $950 million to Hungary in a tranched investment or payment. $600 million upfront, 175 on the first anniversary and another 175 on the second anniversary. This reminds me of their deal with Biontech, which is interesting. Spread out over or three years. In terms of the Biontech deal was for permit to make, which is the PD L1VEGF that Bristol licensed about a year ago now. So the total potential value, of course, is a big number, $15.2 billion. With all those milestones, et cetera, thrown in. This is not the biggest China deal this year. The Astra CSPC deal was larger. That was in earlier this year, but also in 2026. So with all these details in hand, I want to pass it on to the rest of the team, starting with Josh, because Josh is relatively fresh from China. And just to get your perspective. And I'll have a couple of queries for you as well. Josh.
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C
Yeah, thanks, Sam. So our colleague Lee Watset does an annual bus tour to China. So I joined this year to get a sense of what all the hullabaloo has been about. It really is impressive seeing it kind of firsthand, including Heng Ray, and understanding the pace, speed, quality, caliber, affordability of innovation there. It really brought to life a lot of the discussions that I've been hearing about China being a competitive risk to the US which it is and is going to increasingly be for all those aforementioned reasons. In the moment, though, China still seems to be a source for high quality, validated assets, often kind of me better versions of what some of the local innovators have come up with. And then that creates its own disruptive dynamic. But often is a kind of a wealth transfer from China innovation and US domicile companies or investors who can get these cheap assets from China and then bring them to the US where they can be very lucrative. And so that's its own separate dynamic. And that creates a different type of risk for the sector where you just kind of worry, is there something better that may be licensed out of China into a pharma company, into a local biotech company. But what we also heard on the bus tour was that these companies do have plans to ultimately become global commercial entities, kind of hungry. They indicated that their timeframe may be like three to five years to be accomplishing that. So this deal very much aligns with that strategy, right? Like they're going to partner with Bristol, they're going to find lessons and develop their own capabilities of commercializing globally, including in the U.S. market. And that's where now it becomes particularly tricky, right, because now, you know, the value capture of the innovation may be increasingly shifting to China based companies. At the same time China is going to, it sounds like China is going to open up its own markets for innovation and pay more for new innovative drugs. Of course this comes at a time that who is better positioned to benefit from that other than China's own biotech companies? Right. So, so I think in the moment China remains a very attractive source for low cost, high speed, affordable, validated, top tier type innovation. And in the race to come up with the best of whatever, the best bispecific, the best monoclonal antibody, the best adc, the best dual warhead adc, China has a clear advantage but still remains an affordable, low cost source of innovation. But over time, over the five to ten year period, that's where kind of the global trade issues I think are going to be particularly problematic. And the US is going to have to figure out what strategy it ultimately deploys to protect its markets, to enable local innovators in a race that's not really a fair race at all just given where China is and, and is headed with their, their speed of innovation.
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A
Tess, you wanted to comment here, right?
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D
Yeah, yeah, yeah, no, maybe just, maybe just like extrapolating, extrapolating what Josh shared like you know, roll forward five to 10 years and let's say that you know, Hangry and Hanso and CSPC and a number of these other, you know, China innovators like really have gone global. Right. Like I think there's a question of, well, what would still like be in the US and what would like need to be in the US From a security standpoint? I think one would be manufacturing. Right? Because security of supply is really important and you know, in, you know, critical to kind of have a certain amount of, you know, onshore or like very closely allied, you know, country manufacturing and like sales reps. Right? Like you're still going to need like US sales reps, aren't you? So you know, like there's this kind of 5 to 10 year, like is that what like US biotech will be, it will basically be like, you know, manufacturing and like sales reps. I think that's kind of a bleak view. Like I like to think that, you know, US biotechs are really competitive and want to win and want to make great drugs and, you know, we'll figure out ways to do that. And maybe, maybe that means that like they're going to have to do more in China in order to be competitive. And maybe it means that they're going to have to do more in India to be competitive. And hopefully, you know, I think the big hope is that it means that the US is actually going to have to do more things like, you know, the CTN pathway legislation that's being, you know, that's being proposed. You know, there's a lot of work and a lot of, you know, a lot of changes at the IRB and other level that would have to go in to actually make a non IND path, early clinical development feasible in the United States. But let's hope it gets there and that the US can be more than manufacturing and sales reps. Josh, I'm interested in that vision of the future and how you think US biotechs can really compete in this, this new, you know, kind of new, new order.
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C
Well, it's, it's ever evolving, right? And, and China's focus right now is in certain therapeutic categories and certain modalities. And so, yeah, there are still areas where US bioinnovation is relatively insulated. Of course, the question is, how long is it going to remain insulated? You know, one of the challenging, to me, one of the most challenging dynamics is that, you know, the US innovation, just these new ideas, new concepts, is I think, far superior to anywhere else in the world where China's really excelling is building on those innovations to take them to the next level. And that actually is where innovation is, where the risk is optimizing is where the value is. And that's where Tesla kind of probably where what you're seeing is as you're kind of painting that picture and how do we find ways for the US to not just be the innovator, but also continue to optimize? And part of it will come from AI, great efforts in AI that'll help level the playing field. Part of it may come from more US companies going to engage in China for development so that they can move quickly as well to proof of concept. While we're kind of waiting for the US ecosystem to hopefully speed up as much as it can, China is always going to have a cost and scale and speed advantage. I don't think that's anything that the US will ever be able to match. And that's where it probably gets most tricky as well. The idea that we want access to the best innovation at some point, there may be tough decisions to be made in the US Market, whether that also includes innovation in China, because again, balance of trade issues are going to be very important and this is a very important sector now for both countries to defend. It's so hard to predict what the future is going to look like when it's moving so fast and there are legislative considerations down the road that may change the landscape and the dynamic.
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D
Maybe, maybe just building on that like one layer more. Right. Like if, if now optimizing is, you know, the ways that, that investors, you know, investors get paid, like, is that something that becomes more commoditized? Right. Is that something that becomes more commoditized and you know, zero to one innovators, Right. Which are kind of scarce, like, can they kind of have their choice of optimizers because it's something that's more commoditized and, you know, can be done very efficiently. You know, with the current patent system, that's. That's probably hard. Right. But that's just another, you know, kind of big picture thought to throw out there about how things could evolve.
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C
Yeah. When I got back from China, I emailed all my companies that I cover and, or work with and basically said like, you need to have a China strategy, even if there's no strategy to be had in the moment. But part of the strategy may be, you know, if, if you are the.0 to 1, if you are the original innovator, you need to think about, more so than in the past, cannibalizing yourself with, with me, better type innovation. And you can go to China. This is. There's still a window, right. Where China itself is split between the haves and the have nots, and they're very dependent on external capital and funding and validation. And so there is that. They are commoditizing innovation. Absolutely. And potentially to the advantage of the US where it does, as I said, become challenging is when China now wants to commercialize into the U.S. market at the high drug prices that we spend after having basically shut their market from high drug prices up until what may be the next coming years.
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B
You guys are both touching, I think, on a really, really important topic, which is the strength of the US Capital markets. That may actually be our best defense in terms of protecting the US biotech ecosystem. There's no capital market in the world like that in the U.S. tess, I know Ra might feel comfortable going over to China and investing in private companies, but for the great majority of funds that are willing to put literally hundreds of billions of dollars into biotech each year. They're not going to go invest in Chinese markets. Maybe. In addition, in terms of your view of the future, in addition to having manufacturing capabilities and capabilities in sales and distribution, the future of US Biotech is to have investor relations and analyst responsibilities, things like that. I know for all of our vocations we'd probably enjoy that. But, but I just wonder whether it is possible for China companies to truly penetrate the US from a capital market standpoint and whether you guys see that as evolving or changing, whether that hurdle, that bar is going to become so low in terms of fund flows from Chinese listings in the US or whether US Investors will always want the management teams to be here to speak English, to, to press the flesh to reside in the US
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C
I just say that that's why I look at it as like a five to ten year consideration. Right. Like the companies are, certain ones are really starting to thrive in China.
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D
Right.
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C
And as China pays more for drug spend, their revenue and profitability is going to improve, their resources are going to improve. They're going to be learning along the way from partners like Bristol how to commercialize. It's not rocket science. There are many different ways to approach that and that is what they're gearing up to do, but they're not there yet. And that's what creates this window where there's probably right now more opportunity than risk to license assets out of China and bring them into the US market or even globally and capture all that value in the process. But, but over, over 10 years, that, that's where it becomes hard to, hard to anticipate because China will have more and more capital to, to enable their commercial efforts and the expertise as they partner with companies like Bristol.
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D
Yeah.
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A
So just to summarize this, I'm going to take the other side of the conversation. Assume that I'm sitting in China right now and I am either in the government or, or running one of these companies. I think what I would want to watch is to make sure that my current competitive advantage, which I would classify as brute force, right, which is, you know, you could call it whatever you want, okay, it's cheaper. But also the number of companies that can iterate on the same idea of a PD1VEGF or PD1VEGF or PD1CTLA for whatever you want it to be. Right. Is so high that by, by sheer mathematics or arithmetic, they'll end up with one of the assets being one of the best potentially out there. So that's what I, if I was looking at that, of the, at the region. I would worry that that sheer force capability will eventually erode partly because the US catches up with the idea of having to be able to do science faster. You mentioned AI, Josh. And then the fact that we eventually will wake up. And I think that process started with Marty McCarry's trying to streamline clinical development so that drugs can get into early trials faster, so that we can catch up at least on that front as well. The question I have is whether there's this risk appetite and maybe some of these companies are not getting so well funded that their risk appetite goes up to do that. Hardcore innovation. No question they can do it. I mean, you know, human brains over there are as good as the human brains over in the us. Access to capital is the issue, which is what Eric brought up. So will they be able to get onto the absolute early innovation stage? I we know as a fact for a fact that they've been able to do that in the material sciences world and the chemistry world. So there's nothing stopping them. It's just this needs, this needs a different level of risk appetite and that's where I think the what needs to evolve over there in China. So great conversation here guys. Thank you. I think maybe on that particular front and talking about AI and how it can make it a change to the world, I want to just talk about one of the largest fundraisings that I've come across, which is the isomorphic. Remember this is the biotech, I would call it AI biotech company that's run by Demis Hassabis as CEO and who's also the CEO of DeepMind, which is Google's AI AI business or segment. And they just raised just over $2 billion from investors. Now this is after, this is Series B, right? And test, you tell me how many Series B's you come across that are this big. They had only just raised $579 million just March last year. So this is $2.2.58 billion of cash going in here. And I'm assuming they're seeing development or evol their assets, which is what they're talking about in the press release that they put out. But these are huge numbers. The one little thing that worries me somewhat is that there are, I don't see any biotech type investors in there. Maybe because they were excluded, maybe because they couldn't put up with the valuation that was going in here or a mix of both of these things. So. But that is where you know, I know that Zera, they Had a billion dollars that came from Arch Ventures and one other whose name I forget, of course, I'm pretty close to in Silico. They're doing relatively well in the world of AI and there's a whole host of other companies, right. So. And this is where we're going to see whether they're going to be able to really genuinely get, get the speed going. Now Isomorphic has proven part of its efforts, which is alpha fold and the alpha genome, etc. Etc. That are openly available and are, are everywhere, and pretty much every chemist that I come across is using them. So I just wondered if Tess wanted to comment on that. The number, the $2.1 billion that was raised. I'm sorry, I don't know why I'm laughing, but it's a huge amount of money for a Series B.
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D
It absolutely is. It absolutely is a huge amount of money. And I think, look, for biotech specialists, you know, we're going to be focused more on assets, right? And what is the, you know, what is the value of the assets that are being developed? You know, I think too many biotech investors, you know, including us, have, you know, been in situations where we put a lot of value on a platform and technology and, you know, it, it ends up not necessarily translating into, you know, into, into assets that can be commercialized. So I think, you know, kudos to the Isomorphic team for, you know, attracting that capital. But, you know, I do think that is, you know, much more of a tech mindset on, you know, getting a technology that is, you know, scalable and can help make drug discovery and development more efficient, which let's hope, let's hope that technology works and can help, you know, and can help, you know, our companies, our companies compete better. But very different, you know, very, certainly very different type of deal and type of underwriting than, you know, your, your biotech, your biotech specialist.
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A
Right?
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B
I mean, just to put more of a skeptical hat on it, Tess is such a nice, wonderful person. She's, she's probably a little bit less snarky than I am. But, but Sam and Tess and Josh, you all know, this isn't the first time we've seen big tech kind of wa health care waters, right? Whether it's IBM or Amazon and other initiatives in the past, they've all kind of ended well. They've started with a bang like this seems to be doing, and ended with a bit of a whimper. And it's just the divide between tech and health care, I think, is still very great. I think it takes a certain mindset to develop drugs. And as Tess mentioned, that is where the value is coming from. It's not coming from platforms. And somewhere between an interesting platform, which Isomorphic has the technology, certainly valuable, as you noted, Sam, between that and turning it into a drug development discovery business is a huge, huge gap that just hasn't been breached by anyone else before.
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A
I mean, the only thing I would say to finish on this is Demis Hassabis is actually a neuroscientist and he has surrounded himself by some true biotech type of biology, at least knowledgeable folks. So, I mean, let's hope it works out because they are good people. They're one of the, what's the right phrase here? More concerned people as it comes to AI, Right. A little bit like anthropic in terms of their, their attitudes to the safety risks of AI, et cetera. So let's hope that it works out for them. But I completely hear you and you always worry about that when this volume of money goes into a company. So with that in mind, let's talk about the other key subject of this week, which is Marty McCary's resignation. Now, I had a conversation with a good friend early in the week who said to me, I've met with Marty recently and there's no way he's leaving. So all these folks are, are, you know, or at least he's not getting fired. And then, of course, and now that's what happened. Right? The issue isn't that anyone's misinformed, etc. I think it's probably still part of the ongoing difficulty of being able to judge where the administration will land on something here or there. And, and you know, Marty was, it's. I'm gonna ask obviously all of you to comment. Did some great things, did perhaps a little too many podcasts and presentations and, and videos. I don't know. I mean, it's a value judgment that perhaps is in my place to do. There were issues with vaccines and how they were being handled that were allowed to happen, although maybe that's because his ultimate boss was in charge of all those areas. The story with Vinay Prasad was, in the end, whether you like him or not, as a scientist, etc, and Josh, I've heard you several times talking about this. In the end, it wasn't necessarily a positive. Rare diseases were supposed to be a great focus, but nothing really ever came of it. Miferpristone is something that probably was a major factor in what happened in the end. In terms of his decision to resign and this flavored vape sting. I just can't believe as a father of four that it was ever in the constant. But he did say some great things. Streamlining at least the idea of streamlining clinical trials, the rare diseases. But I spoke to it, reducing animal testing, bringing in some, you know, the plausible mechanism idea for one arm or single arm trials and faster trials and of course this new streamlining of trials which was quite important. So I'd love to hear from you all with regards to how you think this is going to play out because it just increases, it's a little bit like the leadership contest in the UK government. It just creates uncertainty. Now who's going to be in charge? We do have somebody, Kyle Diamantis, who's in charge and apparently he's a reasonably straight person in terms of how he's been engaging with folks at the fda. So Josh, you're unmuted. So I'm going to pass it on to you.
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C
That's a selection criteria. I'll take it. It's interesting, right, because what you read in the press is a little hard to interpret, right? Was this him not following all of RFK Jr. S whims and beliefs and views? In which case, why would we expect anyone better than Makary to come in to lead the agency if they still have to report in kowtow to RFK Jr which is probably where all of the problems for the most part start and finish. Even there. The frustrating part is that some of his ideas are actually very thoughtful, good ideas. Others seem to be more whims and paranoia than actual scientific merit. And then you almost have to go through on a case by case basis and figure out which is which. So on the other hand, there's also reports that maybe the White House is playing a more heavy handed role in choosing FDA leadership, recognizing that with the midterms coming up, some of the healthcare policy may actually be working against them. So they kind of have to marginalize RFK Jr. To stay in control of the house. Right. So depending on which one of those you're going to follow, it either points to really starting to stabilize the agency with new credentialed leadership testers. I think we all saw the no patient left behind advocacy to bring back pastors as head of Cedar head of the fda, I should say. And if we can start to regroup and re able the FDA with the right people in the right seats, then that should be a very good thing. But if we go down this path of more enablement of anti scientific whims et cetera. That's not a good thing. We've kind of also debated what was it that McCarry did wrong that got him in such hot water? Like, like even the same with Vinay Prasad. Like their decision making process for many of these drug approvals were relatively sound. Right. And so do we want someone who's just going to come in and approve everything no matter what? Do we want to go back to that framework that we had that we used to all complain about? How do you get the balance right? Or is it not even about any of this? And it's really just about agency morale which is obviously eroded substantially. So there's still a lot that we, we don't know. And, and we're just going to have to wait and see how it all plays out.
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A
How does this feed into your current or does it into your decision making, whether how much you worry about this when you're making investments or not. I mean, I don't know if these short term issues impact your, your processes at all.
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C
Well, for the most part, drugs are black and white, right? They, they work and they should be approved. They don't work and they shouldn't be approved. But there are in particular probably the drugs that go through CBER more than cdir, because the just smaller patient populations, it's harder to generate the same amount of substantive evidence of efficacy and safety that you do wind up in much more of a gray zone. We have to align that gray with the policy and the decision makers. And when those policy decision makers are changing, so does that gray zone and its alignment with those drugs that haven't been definitively proven to work, that are often considered for accelerated approval, that are often judgment calls as to whether the data that a company's generated really does portend a meaningful clinical benefit. And you've seen it. The sector's been incredibly volatile based on commentary and leadership, particularly with Vinay Prasad, as we're all trying to guess, how is he going to look at, we're guessing, how is he going to look at the next data set? And then whoever comes in, we're going to have to go through the same process of aligning the gray with the data and the unmet need.
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A
Right, right. Test, Eric.
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D
I would say the change really impacts our, you know, investing. Not at all. Right. I think if, if anything, you know, the extent to which, you know, Macquarie was kind of in the news and, you know, being loud about what the FDA is doing probably worked, you know, against him more than for him. And I'd Be, you know, kind of similar to what Josh shared. Like, I think a lot of the approval decisions, like they ended up being decisions that like, hey, maybe they were, you know, they were hard. And I'm sure, like, not everyone agrees with, you know, all of the decisions he made, but they're also like understandable. Right? Like the things that, you know, weren't approved are things that were, you know, where there was, you know, where there, where there really was, you know, debate about whether those met the right, you know, evidentiary standard. I would just highlight like another, you know, really important thing which is like in February, you know, Kennedy announced like several appointments to his team that included Chris Clump, that included, you know, Kyle Diamantes, that included Grace Graham, John Brooks. These are like very, you know, these are credible people, right? And they're, you know, having a really important role in managing the FDA and you know, managing succession. And I think that is, that is really important and has, you know, I think contributed to, you know, some greater level of stability within the organization. That's really important. Despite, you know, despite the change with, with Makary, you know, question will be like last, I think, I don't think that the administration wants to turn this into a, you know, Senate confirmation hearing process that could, you know, distract from the midterms. Right. So I think it'll be very interesting to see how that plays out. And you know, good news, there's some excellent candidates, you know, Rick Pastor certainly as NPLB highlighted in the letter, but there's, there's others as well. And you know, I think the prospect of a, you know, very contentious, you know, confirmation hearing, you know, is probably, is probably not one that the administration really wants to pick right now. I may regret saying that, but at least maybe that is, you know, maybe that is my hope, you know, which would suggest like a candidate who is, you know, not going to be, not going to be extremely controversial.
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B
Right.
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A
Eric, do you want to add anything before we move on?
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B
Well, just quickly. Thank you. Look, I think nobody's going to Ms. Dr. Makari. That's pretty clear. And maybe Josh is right. Maybe it's a higher level issue with HHS that, you know, we're all bemoaning here. But, but let's be clear, he didn't do anything as commissioner that he was supposed to be doing. And when we're talking about an FDA commissioner making decisions about different drugs or raising or lowering the bar to approvals, that's not what we should be talking about. We shouldn't have a guy Go on CNBC and talk about unicure or replimune or any of that stuff. The job of the commissioner is to support the review staff, to protect the agency from political intervention and, and to advocate for a stronger FDA and be a leader. And he did none of that, as far as I can tell. So I just hope whoever comes to lead this agency going forward kind of reverts back to what traditionally has been the job of the FDA commissioner, which is to run the organization, not to decide FDA review decisions.
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A
I love the fact that you guys are literally offices next to each other and you have so interestingly, not massively different, but quite different views on all this sort of stuff, especially when it comes to the regulation.
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B
Well, that's just because I'm always right.
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A
So actually, Tess, given that we're talking about this, we just had some data now moving on to the company news and data conversations we're going to have from Regenx Bio, what seemed like at least a phase three trial that worked out. They talked about the percentage of muscle fibers that had expression of microdystrophin, etc, etc, but we're not going to file because we don't know who's going to be looking at our file, which is a direct result now potentially of what's going on at the fda. Do you want to take that, tell us about the data and is that something, I mean, the share price was down. Was it because of this or was it because of the. I don't know. The news folks seem to have latched on to two side effects which the company appears to say was manageable. Over to you, Tess.
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D
Thank you. This was a very interesting one. So indeed they came out with data where they met their primary endpoint. Right. And you know, they said they were preparing for potential for accelerated approval in 2027. And what they showed is they showed a correlation in nine patients between, you know, between essentially two scores. So they were showing, you know, correlation between microdystophrin expression and then nsaa, which is the functional, you know, the functional endpoint in dmd. And their argument is that, hey, these can serve as strong evidence for accelerated approval. Now they do have more patients, right? So this is, you know, this is nine patients. I think they have, you know, I think they, they will have 30 or so in the PR. And so I think there were some questions about, well, how about everyone else? And you know, what's, what's going on with them and what was the full, you know, what would the full data package, you know, what would the Full data package look like. And then I think there was, you know, a lot of, you know, just discussion about, you know, well, how is the FDA going to be thinking about this? You know, how, you know, how about these side effects? You know, what does, what does this mean? But, you know, I think also just questions about what the, you know, what the complete, you know, what the complete data set would be. They also shared, like, when talking about messaging for the fda, you know, one point, one key point was on this correlation with clinical outcomes, right? And so they said, okay, well, we've shown that, right? We've shown that with, with the nine patients. But it's like, yeah, but like, what about the other, like, you know, 20, right? Are you going to show it with the other 20? So, like, that's one kind of key point of uncertainty. And then, you know, there's this question of, like, well, is the FDA going to recommend a randomized, controlled, you know, trial or are external controls going to be sufficient? And together with some, you know, FDA uncertainty, you know, I think that, you know, there are probably a lot of investors that are not, maybe not willing to give the benefit of the doubt and want to have more certainty on the path forward and probably, you know, want to want to see a more complete data set, you know, before they really start giving a lot of credit for accelerated approval here. Very, you know, interested in any other interpretations, interpretations of the, of the data? I think, you know, certainly, you know, strong on the correlation, you know, point, strong data with the 9 so far. But, you know, I think many investors are simply interpreting that as, you know, hey, you know, strong data on the nine patients. Maybe need to see a bit more, maybe need to understand the side effects in a bit more context, understand the regulatory path, you know, before, you know, before giving credit for accelerated approval.
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C
And I guess what makes this so tricky is that Elevidis is approved. So how do you not approve this, too? And should, well, should elevitis ever have been approved in the first place? And back when the FDA was like, really functional, we heard them talk and opine a lot about setting precedent.
- [39:58]
D
Right?
- [39:58]
C
Concern about setting precedent. Because if you approve one thing, then all of a sudden you're almost locked into approving things like it that still may or may not work. And, you know, it looks, relative to levitis, like a promising drug, but does that mean it's a promising drug for Duchenne's? But we got boxed in from a drug approval that probably shouldn't have happened in the first place. And again, now here we are criticizing the FDA for not approving everything while we're literally dealing with the consequences of what happens when you do.
- [40:33]
B
You know, there's another point here which is solid bio is coming. Solid bio, at least according to our analyst Kristin Kluska, the virus a space may have an even superior construct with superior data. I know, I know that the solid bio drug has shown some reductions in CK which I find to be a very important objective biomarker. I don't think we've seen that from Regenexx Bio yet. But you know they're, they're probably going to be there too with maybe even somewhat better data. So where do you draw that that line? It's almost like we're getting boxed in from not just one side but maybe multiple angles here.
- [41:05]
A
So it just makes you wonder whether that original on the one hand the elevates approval obviously enticed people to continue to invest and continue to develop drugs. That's one of the arguments the regulators at least at the time made on the other hand is created this now with hindsight, this, I don't know, you want to call it a vacuum or a difficulty or a hurdle or a bar for people to try and get over.
- [41:31]
B
So
- [41:33]
A
pity. I hope that at some point the best drug for these young, often very young patients, boys gets over the line because they need it. Right. So I think in the middle of all this we mustn't forget that there
- [41:48]
B
are
- [41:50]
A
these patients that are, that are potentially losing out if there is a good drug out there that's not making it through. So and actually Eric, you were the last one to have the mic so I'm going to pass it back on to you. Talk about Biogen's tau data which has been a favorite of mine instead of amyloid in the Alzheimer's space, but maybe set the scene a little bit about what's the difference between tau and amyloid time wise impact on disease and then tell us what happened and what you view on the data is please, over.
- [42:21]
B
Well, I'll be really quick on the background here Sam, because I think this is a juicy topic, certainly one that was debated to a great degree on Wall street this week and I'd love to hear your view, Tess's view, Josh's view on whether Biogen's making the right decision here. But in essence they've got an antisense oligon or ASO called BIB80. It's now shown in both the phase one study and just this week in a phase two study that has the ability to reduce tau not just in the CFS but in PET imaging as well. So the drug is working as it's designed and for the first time ever, they're starting to show, at least in smaller phase 2 studies and to the extent that you can show anything in a small phase two Alzheimer's study, they're starting to show some potential improvements in terms of slowing of disease progression, improved cognition relative to controls. I say potentially showing that because again, we've all been misled by early stage Alzheimer's drugs, drugs in the past and there's so much PTSD around this whole situation that I know we're going to talk about in a moment. Despite missing the prospectively identified primary endpoint, which was having to do with dose responsiveness, Biogen's made the decision to move into a phase three. And that's kind of where the fund started yesterday and a lot of the debate and discussion arose from it. And this company has been telling us for three or four years now post Aducanumab, that it's not going to take big, aggressive, risky bets in neurodegenerative disease. It's moving into ini, that there's a better return on invested capital in moving to more easy to de risk, yet still high value programs. And at the first sign that they've got maybe something interesting from a phase two study on a novel endpoint, we're back to potentially something that's much different in terms of the risk quotient. So I've had a tough time honestly trying to swallow that and come to groups with that. And of course we haven't seen any data yet that will be presented next month at the Alzheimer's conference. But it's a big shift or a big veering to the right for this company. And I don't know, not everyone is comfortable with it.
- [44:40]
A
Who wants to take that next test or if there's anything?
- [44:44]
D
Yeah, I think, I think we'll, I mean the drug is, is clearly having an impact on tau. Whether tau reduction will have an impact on the disease is still unknown. So I think we'll, we'll know in maybe four years. Right. Or something like that. I think there were a lot of groups hoping that this was going to unlock a lot more work in this space. Right. We've seen incredible progress on blood brain barrier shuttles and you know, kind of shuttle efficiency and how much drug you can get into the brain and like, oh, like wouldn't this be another great target to, you know, be able to, you know, apply that technology to And I think we're just, I think we're just not going to know until, you know, a few face, you know, the phase three results.
- [45:37]
C
Yeah, Eric. Eric's note on this was one of my favorite notes I've read in a long time. Just so blunt and to the point. Biogen seems to be a moth to a flame when it comes to Alzheimer's, despite getting burned multiple times by that same flame, which is interesting. The only other thing I'd add is that at the end of the day, biotech companies that are lucky enough to get drugs approved and become profitable are now businesses. And as such, at least in my view, the right strategy for these companies is for the risk tolerance in terms of innovation and capital allocation to fall substantially and act more like businesses, really thinking about driving top and bottom line growth without excessive risk, without wasting excessive capital. And that many of these companies are just kind of stuck in the. We're biotech companies, we spend a lot, we take risk, we're not thinking like a real business. And they do so at not only their own peril, but the peril of the industry in general.
- [46:38]
A
Yeah, I mean, look, the thing I would add here is that this is not the same management team that made the initial decision with regards to agile help. Right. So what I'm, and I hear you saying that, or your point about the fact that they were talking about ini, et cetera. I mean, I could be flippant and say that Alzheimer's disease is potentially an immune disease, but put that aside, it is a novel mechanism. It is one that has probably, in my view at least more scientific rigor behind it as a causative agent in the disease process. The timing is a tougher one here with regards to when tau comes on because it's very proximal to the start of symptoms. But we see what the data shows and you know, I don't cover Biogen. One of my other colleagues does. Still, again, it's a disease. Perhaps that's why this moth keeps going back to that flame. Josh, the fact that there's such a massive demand for it at the end of the day. Right. So if you get it right, you're going to be in the, remember, possibly in the same ballpark as an obesity product, potentially. I don't know, I mean, just, just commentary there right now back to Eric again. Perhaps, yes, to talk about inhibitorics. We had some data, some machinations there. This is a company who, who of. I love these stories. As I've said several times before in, in the world of biotech, where stock that was trading at 10.84 at one point in the past month or so was 14x higher. So it's like a Lazarus, a phoenix rising from the ashes. But tell us how much of a phoenix it is, Eric, in terms of the data that we saw in Head and Neck.
- [48:34]
B
Yeah, let's see. So where do we start? They've got an OX40 agonist and we've had some experience with SOX40 drugs before in the past. We've had a lot of experience with novel IO drugs in the past and they haven't really transpired into much tangible benefit. There's a good phase two study here, so give give the folks in Inhibberyx credit. They've done a randomized, controlled phase two study and head and neck cancer randomized to Keytruda and they doubled the response to rate. So that's not bad. The numbers are still, you know, a little small. Responses in head and neck cancer are a little ephemeral in that they don't always correlate with stronger endpoints like PFS and nos. So we still have a ways to go here. And maybe, you know, from my standpoint, most importantly, we've now gotten to a next level of drug development and Head and Neck, where we have companies like Maris, which was acquired by genmab and their drug Pita Centumab, and also by Cara, which is developing a drug called fiserafusp that are more than doubling response rates relative to Keytruda. So the bar is going up substantially in Head and Neck. And it's nice to see yet another mechanism and yet another positive phase two study. But relative to some of those other candidates, they're even much more advanced. Now, both the Mericen and Bicara drugs are deep into phase 3s. I just don't know what to do with the inhibit. So you're right, Sam. It's had a nice little rise. Phoenix from the ashes. That's always nice and wonderful to see. I don't know what the next steps are, to be honest.
- [50:13]
A
Yeah, I mean, look, so the sort of things that we want to look at is follow up. We don't know how long the follow up was, so maybe with further follow up the responses could deepen. We'll see. I would be interested to see the HPV stratification too, because there could be an edge there. But at the minute, to our eyes it looks potentially from a time perspective, but also from a, from a data perspective. So far, as I said, there's a lot more to be known less competitive than the GFR drugs at this stage. So let's wait and see how that comes out.
- [50:50]
C
But just on the topic of.
- [50:52]
A
Go ahead, Josh.
- [50:53]
C
Yeah, just going to say, just, just to give them credit, they're a San Diego biotech company and really wonderful people there, you know, for their Dr.5 Agonist and Chondrosarcoma, which showed a very dramatic PFS benefit in a full, proper, random, large, randomized, controlled trial, leveraging their kind of protein engineering expertise. So, you know, Dr. 5 was a very challenging target that they were able to crack. So as we think about the, the OX40 data, it's a hexavalent, it's very different approach than a number of the other OX40 agonists out there. I think just having a little bit of that perspective and acknowledgement that at least with one hard target, they were really able to get it to work. By the way, on the Dr. 5 data, fairly low response rate, but turned out to have a very meaningful PFS benefit. So there is a little bit of context I think is relevant to interpreting the OX40 data.
- [51:47]
A
Absolutely right. That's the PFS data that we're. I think they indicated it's coming at Esmo, which of course I will be there. And of course San Diego, one of my favorite cities in the United States. So that's an additional positive. I just wanted to quickly touch on Moderna story. This week we had a. And the hantavirus. I just want to hark back to the days when I couldn't talk about anything but Covid, which of course is gone. And my colleagues in Bloomberg media and news always call on me when there's pain and misery in the world, which is this was the hantavirus outbreak on this cruise ship. And the company, they said what was going on, which is that they are working with in collaboration with somebody on a hantavirus vaccine. Share price popped. I even had some professional investors asking me, you know, do we need a vaccine? When can we get a vaccine? When is the vaccine about? And I'm thinking, wow, this thing is so far from being eligible for causing a pandemic. But of course, it's a virus, it does mutate, it does cause issues if you get into enough people, allow it to jump from person to person, but it's very hard for it to jump from person to person. So it was interesting to see that. And now I think Moderna has kind of given up some of those gains. And we're back to the story of when we're going to get the data for the melanoma vaccine that they're developing or individualized new antigen therapy that we're going to get, and that's sometime potentially next this year. That is what the driving story here is. So what was also interesting was none of the other MRNA companies, which of course is the technology to deal with when it comes to wanting to be prepared for a next pandemic or another awful virus to hit this, which is the last thing we need in the middle of everything else we're dealing with. And that never goes away. That is the right technology to be going to be using and it's the easiest and most rapid to scale up and do so. I'm assuming it's not unfair to say there has to be some value ascribed to that, as long as the regulators and healthcare bodies don't keep trashing the technology. So time will tell. So that was that story. Now, for the rest of the call, if everybody's okay, we just want to. We've only got about five minutes left. ASCO's coming up. We're going to be enjoying the abstracts released on the 21st. So does anybody want to pick one thing that they're super excited by and they're looking for? Excited by? Not necessarily think the data would be superb, but they really excited to see the data. I'm going to go to Josh first and you can, you can do a hospital pass to Eric if you want.
- [54:43]
C
Oh, I pride myself on spending fairly little time in oncology because it is so hard to get ahead of anything and invest around. So I don't really have much exposure to asco, but I know Eric does, so.
- [54:55]
A
Eric?
- [54:57]
B
Yeah. Well, those of us who are a little bit more intellectually inclined, we like looking at data and trying to parse out competitive landscapes. So I don't know, Sam. I guess we're all keen to see the Summit Harmony six results. Right. This will be the survival data from a frontline study. It's being done in China and it's certainly not going to be the ultimate arbitrator where the drug works. We still need to wait for Harmony 3 and the global readout later this year for that. But certainly there'll be a lot of interest in whether, in addition to the very strong PFS benefit we saw for ivanescamab and frontline lung cancer, we may also see a strong survival benefit.
- [55:39]
A
Yeah, yeah. And then of course, we've got the pancreatic data from Evolution Medicines coming. There are a whole bunch of companies snapping at their heels, but, you know, they have a Good drug from an efficacy perspective, people can raise issues with the side effect profile, but this is, this is an awful cancer and you have to keep. Keep remembering that, which is something that comes up in other mechanisms of action. Like PRMT5 seems to be one that people keep going on about that it causes infections. But you know, a lot of drugs cause neutropenia, which is not as lymphopenia and all sorts of issues.
- [56:15]
C
So.
- [56:16]
A
And we've also got some data coming for ribrovant in head and neck cancer OS data. So that's what we're looking for. And maybe if that OS data looks really competitive with the bar that set by genmaps peto, then maybe people will start thinking a little bit more about perhaps the first line could also be good, although the data didn't look that great that we saw in the Phase 2 ish arena. And there's a bunch of myeloma data coming out, which of course, again, remember, myeloma is one of those diseases that keeps going through revolutions. Right? We had the imids and then we had the Darzalec CD38 and then we have Karvikti and the. And then by specifics. And so here we've got some combination data that's coming out that we're looking forward to, which of course will also be at iha. There's more there. So monumental three from Johnson and Johnson, who seems to be leading and owning this space. And then we have ada. Quickly, is it just. Should it not be called ADBA or adoa? So associate. I can't remember now. American Diabetes and Obesity Association. Right, we've got a bunch of data coming out there. My colleague Mike Shaw is really keen to see the data for especially the first view of AstraZeneca's oral GLP. One is coming out there. Let's see what that looks like. And Retatruzide, which of course the detailed data is going to be there. That's going to be fun to see. And lastly, we have ATS coming now. Does anyone want to highlight one or two things that they're excited about at ats? American Thoracic used to be a conference where I used to go and then after a while I think I started thinking, why am I going? Because it was all about llamas and lavas and it was combinations. And now of course, the world's changed, we have all these biologics. So Tess, do you want to take any. A stab at that or. Or Eric or Josh, given that it's not oncology?
- [58:28]
D
Well, I guess. Well, I guess I'm just gonna, you know, pick up for the, for the, the less intellectual of us, Eric, the non oncology space.
- [58:40]
B
I wasn't putting you in Josh's bucket test, just to be clear there.
- [58:44]
A
George has his own special place.
- [58:48]
D
So. Yeah, so I think, you know, there'll be, there should be some interesting, you know, data coming in IPF that we'll be looking at that will give an understanding of some different, you know, some different combinations. And we have data from AstraZeneca, you know, a drug that AstraZeneca has been developing, which is an IL33, where the abstracts looked pretty interesting. So this is a drug called Tozaracumab and This is an IL33. You know, I think everyone probably recalls Itapekamab that Sanofi had been developing that, you know, disappointed, you know, disappointed a year ago or so. And you know, Sanofi had shared that COVID 19. It was a big part of that. And you know, I think there was, there's still some, some debate about it, but it was certainly very encouraging to see the, the, some of the tozo data in the abstract. So a lot happening now in COPD and asthma and other respiratory diseases. And it's great to be following, you know, some of these, you know, some of these new targets and, and target combinations as they get unearthed.
- [60:08]
A
Yeah, Tess, it feels like it's going down the same road as psoriasis and RA and some of these other ionized spaces. So maybe I'll start going back to ATS again and have some intellectual stimulation
- [60:29]
D
and then we'll just have to have Eric do it.
- [60:31]
C
Oh, no, I'm not defending myself. Eric is the intellectual. I just focus more on generating strong returns for a portfolio. So when it comes to ipf, one thing I would flag, there's again San Diego company endeavor, John Hood, one of the legends of BioInnovation. Here's the CEO. They're showing some really incredible data. And if you're looking at IPF at all, you have to look at Fluida scans because it is probably the best signal of a real anti fibrotic effect is with the fluid of scans. Then there's also some interesting drug delivery technology that's come along as well. That's quite interesting. So there are other things happening in resped, but I think are quite fascinating.
- [61:12]
A
Right, so we need to end here. All three of the co hosts are absolutely brilliant. They're all super intelligent, which is why they're on here.