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- [00:00]
A
You're listening to Biotech hangout, a live and unedited weekly discussion of all the newest and best in our industry with a group of biotech leaders and experts. I'm Jeroen Werber with my co host today, John Morganori who's going to join in a minute Sam Faselli and Matt Glein. For more information about our host and guest speaker or to listen to the most recent episode, please go to biotechhangout.com so we have literally an action packed agenda and I think we're going to be remiss if we're not going to start off by talking about the most important news in the world in the opinion of n of 1 myself. And that's the upcoming third and fourth place for the men's World cup soccer final tomorrow and then of course the World cup soccer final on Sunday. And we, we have with us today we're very lucky to have Sam who is very close to both England and France. And so Sam, what's your prediction first of all for that game? And I don't know if you want to share with us who you're actually rooting for.
- [01:07]
B
Yeah, well, remember your own. I'm, I'm kind of perfectly hedged here because I, I love both countries very much and I live in both countries so I can't lose. However, I think if England play the same way they've played in the Argentina game then I don't think they, they have much of a chance in surviving this particular one tomorrow night. But it could be close because France didn't do that well against Spain either. I mean it was a pretty, pretty abysmal performance with Spain being really solid and tight. So very hard to call. I don't know. I mean you probably, I don't know, I really can't to be honest with you. A whole bunch of people are saying what's the point? Who cares, right?
- [01:56]
A
Well, I gotta be honest. So my, that's my, you know, my, some of my family members, my daughter, my. And was asking me what's the point of the game? And I was like, well you clearly don't live in the UK or France. I mean this is still very important game. Okay, Matt, what, what do you think? I don't know if you have a view UK or France.
- [02:12]
C
I, we have a close family friend who's Senegalese en routed in order for Senegal and then France and then England and so I've asked her who to bet against on the basis that maybe I can make some money that way. I don't have an ax in the England versus France game. My son who's four has decided he's for Argentina. I'm not sure why but I guess I'll support his judgments.
- [02:35]
A
Yeah, he's a very smart, he's a very, he's, he's going to be an amazing biotech investor if he's supporting Argentina.
- [02:42]
C
I think he's, as with many biotech investors has alighted on the right answer at random.
- [02:51]
A
John, what, what do you think?
- [02:52]
D
Who's your favorite for, for the 3 versus 4? I think it's going to be France. I think, I think they've just got, I think they've got a stronger team although I'm sure England wants to, to do it more than France and I think Argentina is going to take it, you know, three to two on Sunday. That's my, that's my prediction.
- [03:12]
B
I love the accuracy there. Well done John. This is why you're a successful CEO and we're still here judging Biote.
- [03:20]
C
Sam, what you're looking for is precision, not accuracy, precision.
- [03:24]
B
Precision. Yes. Sorry, sorry. Because accuracy is only post, post event. Right?
- [03:29]
D
Exactly.
- [03:30]
A
So three, two and is it going overtime or not?
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D
Oh yeah, overtime for sure.
- [03:35]
A
Oh yeah, yeah, yeah, totally overtime. Three, two. Sam, what do you think for the final?
- [03:42]
B
I, I, I, I do fancy Argentina but then you know my close colleague Javier is from Spain so I'm going to have and we have a Spain Spanish flag hanging off his back of his chair next to me. So I, I, I, I have to bear that in mind if I want to my life to be worth living for the next year.
- [04:05]
A
The and Matt, what, what do you, who are you picking for the final?
- [04:09]
C
Well, like I said, I think I've got to, I've got to follow my son's judgment. I'm for Argentina and have no idea what to score.
- [04:16]
A
Yeah. So I'm okay, so I'm going, I'm taking friends. They've looked way too good. I don't know if you saw this, the, the statistics. I mean we probably all watched the games for the last 20 minutes. 21 minutes of the Argentina against the UK game. Literally there were 8 shots and goal from Argentina. They called, they controlled 93 of the possession. They completed like 180 passes versus 7 for England. I mean it's mind boggling how, how well they did. I think it's a function of the strategy for the uk.
- [04:53]
D
Yeah.
- [04:54]
B
Can you bet on the games through Kalshi as well? Probably.
- [04:59]
D
I'm sure you can.
- [05:00]
A
Well, I'm bad Enough doing my day job.
- [05:02]
C
And I don't bet on anything.
- [05:04]
B
No, not you specifically, but through that. Because that's a topic that I think we might touch on later.
- [05:08]
A
Yeah, anyway, and I'm, anyway, I'm picking Argentina 2 to 1. And I'm, I'm worried about, I'm a
- [05:14]
D
little worried about that game.
- [05:15]
A
I think Spain looked extremely good. Yeah. Okay, well, let's now shift over and let's start kind of, we're going to do macro. We're going to start from the top and kind of dive in. Matt, maybe give us a little bit of a sense, kind of. What are you saying? There's been a lot of volatility in biotech. What kind of questions are you getting from investors? And obviously you're running a pretty stable, promising company at this point, so the whims of the markets are a little bit less important to you right now. But how does impact your ability to execute?
- [05:49]
C
Thanks. Stability is all relative. I, I, I was, you know, I was sitting around last Friday, and, you know, you're CEO, you check the market at some point and you realize Your stock's down 4 or 5%. Your first thought is like, shoot, what did I say? And then, and then you realize that, or what did a competitor do? Or something like, what happened that I'm missing? And then you realize that the index is down and everyone's down. You're like, okay, so like, this is a Hillary Clinton tweet situation. Like some public official said something about MFN pricing or, or, or whatever. And then, and then that's not true. And you're like, okay, it must be the Fed or interest rates, and that's not true. And finally you throw up your hands and you call an investment bank and you're like, what's happening? And they say, oh, it's factor driven. And you know, so this, this happened to me on Friday and I was like, well, what does that mean? And they were like, it's Jane Street. Blame Jane Street. So I called my friend at Jane street and he was like, it's not us. And I was led to believe that. And this is, it's like an interesting lesson about the markets at this stage. Like, I think I am probably, or like me and my team are the people who know the most about the trading dynamics in Roman stock. We talked to all the investors, et cetera. I think it's just impossible to know some days. And I found that, like an almost Zen thought as I went around my job. So that's been sort of my experience the last week and investors all have pat explanations like SpaceX is down or whatever. But I think the honest answer is sometimes you just got to throw up your hands.
- [07:04]
A
Yeah. So much of it is the momentum in RSI indicators. Right. 4% is like nothing these days obviously any, but any, you know, in general, are you seeing anything in the macro environment that, that you're, you're spending time on the board is thinking about
- [07:23]
D
for us?
- [07:23]
C
Not really. Honestly, for us, I think our view is we've been on it on a good run and have a lot to do and I think mostly we're focused on stuff that's specific to us. I'm interested in like whether the market dynamic around companies like ours is going to change at some point and that could have sort of read through effects strategy, but there's not much for us to do about it in advance.
- [07:45]
A
Okay, makes sense. We'll come back to you because you're uniquely suited. You're hopefully, knock on wood, should be launching a drug pretty soon over literally the next two months, two and a half months or so. So we'll come back to you in a minute maybe. John, let me go to you next. So we're going to shift over and talk about. Lilly is continuing. It's, I'm going to misspelled, I'm going to mispronounce it the Amazonification of pharma acquiring variety of different companies. They just literally bought a Thai Beckley for 2.8 million billion upfront plus over 1 billion CVR. That's a psychedelic company. And then in general there's also an Economist article where Lily's now really reinventing the pharma business. What are your thoughts on that?
- [08:30]
D
Yeah, no, I think, look, Lily is just a fascinating story right now and, and you know, you know, we've heard a lot from Dave Ricks on a number of podcasts that he's done and, and so forth. And I mean they're really paving completely new territory as our industry's first trillion dollar business. So it's just fascinating to watch what they're doing. The, I thought the Economist article that, that came out this week was, was really interesting. It was about Lily reinventing the pharma business was I think the title of the, of the article. And it, it talks about Dave's, you know, real conviction to, to remake Lilly, go from something that's a traditional drug maker to something that's frankly closer to a tech company at some level. And a big part of that is their shift to focusing on prevention of disease. As opposed to treatment of disease, which I think is absolutely the right direction of travel for them to make and others to make as well. And they're borrowing a lot of playbook ideas from Silicon Valley which I think is super, super interesting as well. I mean one dimension of this of course is they're getting a lot closer to the patient and the consumer. And they've you know, launched a really interesting effort for commercializing their medicines with Lilly Direct which integrates telehealth and a direct to consumer based strategy, effectively going around the PBMs in that regard. And it just shows, you know, how they're thinking about digital in, in building their business. So that, that was the one thing, that one article this week that I thought was super interesting, people should take a close read. But the news this week for Lily was around the a Thai acquisition again, a 3.8 billion dollar acquisition, 2.8 billion up front and 1 billion linked to a, to a CBR. And you know a tie is a, is, is one of these psychedelics companies. They've sort of been, you know, arguably on the fringe of some of what we all think is you know, biotech because it's, you know, psychedelics. But of course it's a category that is proving to be pretty important for people with, with treatment resistant depression which is a major, major, major, major problem. And felite acid here is a, is a nasally administered treatment, you know, for depression. It, it's currently in pivotals. So they're buying ahead of, of the readout which, which you know is, is a strong and aggressive bet on their part. But arguably, you know, what is the right way to do it if, if they have conviction in the mechanism, in the pathway. The other thing about the deal that I, I sort of find interesting because I, I know her personally is it's one of the first deals under Carol Hose leadership of Lilly's neuroscience franchise. Carol is a terrific physician, scientist leader and somebody that Lily poached out of Denali where she was the chief medical officer I believe it was earlier this year. But anyway, it's good to see Lilly continuing their remarkable transformation, their continued buying spree in the industry looking for innovation consistently in many different places. And you know, at a personal level it's great to see Carol taking the lead on this acquisition here from Lilly. But Lily is I'm sure going to be a frequent topic for this hangout.
- [12:08]
A
Yeah, Sam, what do you think?
- [12:11]
B
Yes, so that Amazonification comment came partly from me and I think the reason I use that is that they seem to be going in every possible area of pharma. Now, I'm pretty sure they're not in every single therapeutic category, but if you remember a few, a couple of months ago they did three deals almost back to back in infectious diseases and then now here, this is the third PNS type disease that's outside of, let's call it the neurodegeneration. And I think it speaks volumes to how they're thinking about the future, which will inevitably include some kind of plateau or pressure on their obesity franchise. Plateau if they continue to keep innovating and replacing or pressure if someone else gets a meaningful position in here and at some point there's some patent expiry or something that puts, and I'm talking 10 years down the road here, right. So I think the more I see this, and John's comments were really fantastic on this, particularly his insight on who's in charge in the neuroscience part of Lilly. So that's the way I see Lilly going. And I think that probably is the only way to be managing such a massive future dilemma that will come. I don't know what else to call it. Potential risk that will come up so over.
- [13:42]
D
What I love is that. What I love is that they're just being so proactive about it. I mean, you know, a lot of companies would say, ah, we got, you know, we got 10 years of amazing growth in front of us and we can, you know, we could let, let it ride and take our time and sort of in sort of being urgent about it. But boy, they're just showing nothing less than incredible urgency around, around, you know, that future build and the future product opportunities that they need to have to be able to, you know, bridge the gap of just ginormous amounts of revenues. And that's smart. It's just so smart and, and the proactivity is, is just remarkable. So kudos to that team for doing what they're doing.
- [14:19]
A
Yeah, absolutely. Let's move over to biotech. Biocenturies actually had a very nice article Yesterday reporting that 40% of new COs originating from China are now first in class, which is actually a departure from last year. I think this year there's been 14 or 15 new coves. I think it's more or less in line with last year. But of course four of them are, I think it's like four out of the 14 or so, it's about 36 to, you know, 40% are now novel. Matt, maybe. I know your, your, your team is constantly on the hunt for assets. What's what's changing in China?
- [15:02]
C
Yeah, I mean, I'm on the record in a bunch of different settings as saying, I think that China is a little bit of a smoke screen or a red herring for other dynamics that are changing pretty quickly on the technology side around the commodification of antibody development, around certain kinds of even small molecule chemistry, either with or without AI getting easier and more reproducible. And about that stuff getting pushed to places that can do it cheaper, places that can do it faster. Obviously China, the current leader there. Although I think to the question of politically what would happen if we closed off innovation from China, I think it would just happen somewhere else. But I think it's pretty remarkable the speed with which we can now move things. We collectively globally can move things from an idea to an experiment. And I think it's a great thing that there's more novel targets coming more now. I'm not particularly biased toward the novel targets. More drugs of any kind coming through the pipeline ready to be tried. And some of the best drugs we have are sixth generation on the same target. And some of the best drugs we have are the first of their kind. And I think they're all, they're all great. I do think we, like everybody else, look to China, among many other places for new assets. And I'll say, you know, if you compare the sort of surface area of where you find things now to 10 years ago, it is radically different in that, you know, I think like, whatever, if there's been a lot less in licensing deals by US companies from Japan for example, and obviously just like way, way, way more from China. The one thing that we still have going for us as an industry in the US is what does everyone who invents a new drug anywhere in the world want for that drug? They want it to be studied in late stage trials in the US and approved for use here. And to be honest, a lot of that has to do with our high pricing for drugs. But nonetheless it means that innovation around the world winds up benefiting us. And so I think it's a pretty exciting moment.
- [16:58]
D
Yeah, I completely agree with Matt on this issue. As you guys probably know. I think, you know, for patients and for what our industry really focuses on, which is, which is bringing medicines to patients, you know, having the sparks or the initial sparks of that innovation coming out of anywhere in the world is great. And ultimately we bring it here to this, to this population, in this market because it is the, it is the greatest place for reward of that innovation. And that's what, that's what attracts it all here at the end of the day. So the, you know, the American patient does benefit enormously. I, I thought the, I thought the Biocentury article, you know, was, was, was interesting. I mean it wasn't, you know, they had, they called it the Asia to West New coast and it turns out that they, they include Japanese, a couple Japanese assets out of the 14 or 15 that they were, that they studied. So it wasn't only just China per se, but I, I do think that it, it probably reflects the, the, the, you know, Matt's comments about just the forgetting the exact words you use map, but the sort of the, the, the breadth of where things are coming from and, and you know, obviously more and more coming from China, which you know, is an opportunity. And so anyway, something to watch in this, in the big China debate, which of course is a bit of a polarizing topic for, for people, but one to continue to, to reflect on is,
- [18:25]
A
is the data by and large completely reliable now from China? I mean, right. Five to ten years ago there was a sentiment that it's not reliable. I think now it's a lot more reliable. But we still hear from bigger companies that are very active in, in that area and are actively in licensing. So they're there and they're believers, but they're very much saying that not all data are created equal, not all data are trustworthy. Any thoughts about that?
- [18:53]
D
I think that's true, by the way. I think that's true.
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A
There was a big study recently, John, you might know, the study testing Keytruda. Whether you gave Keytruda in the morning or whether you gave it at night.
- [19:03]
C
Yeah, right.
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A
Ended up being then debunked. Debunked.
- [19:07]
D
Yeah.
- [19:07]
C
Yep.
- [19:08]
D
Yeah, yeah, yeah, totally. Yeah. No, look, I, I think there's still, you know, I mean there's still gaps in quality of data from different groups. And I, and I think it is a bit of a, it is a bit of a Wild west. And so you have to be super careful about understanding the qual of, of anything. That's true here too. But I think it's, you know, because of the volume, you know, and sort of the, the, you know, the speed aspect of things in China, which, which is a, which is a positive feature in some ways but also a negative feature when people are cutting corners to try to get things done quickly. So it just, you know, it's a, it's a, you know, you have to take all these things and balance and, and buyer, buyer beware or people, people should be diligent, need to be diligent to make sure that they're getting quality at the end of the day. Well, well Matt, what do you think on that?
- [19:59]
C
Look, I, I, I often think these sweeping statements about the data is good or bad from X place or X people are good or bad at respecting IP or whatever are mostly you got to look at the person saying it. But I, I think they have other incentives behind them in almost every instance. But I do think like there will in life be trade offs between regulatory speed and clinical trial speed and manufacturing speed and cost and quality. And the thing you hope is that you can advance along that curve such that what was possible in six months at low quality before is now possible in six months at high quality and whatever. But those trade offs are going to exist and some of the very same things that make China faster are probably also things that would contribute towards, you know, just like a little bit more variability. Just like, you know, if you want to, if you run a big study, you're going to get less variability through on a small study at some level. And so I think like you know, all that's going to obtain. But my personal view is, look, I think the proof's in the pudding. There's lots of great drugs invented in China, studied in China that are now being studied in large studies here. And first of all in many cases the data has panned out and second of all it doesn't really matter because the phase three study is going to be the answer that goes on the label.
- [21:14]
D
Yeah, bet.
- [21:16]
A
Maybe let's tuck in. We have a regulatory and policy section later on but I think this would be a good tuck in here. Maybe we could be brief about it just given how much we got. There's a company out of China was advised by FDA not to file because the drug is manufactured in China. Any thoughts about that?
- [21:39]
B
I'll pitch onto that because that's what I heard and obviously I can't tell you the company was but it was a very, you know, I double checked the fact and that's exactly what it was. It's so I don't know if how new this is. This is not about data. Is the data is being generated in the U.S. it's not, it's not even some of the patients are in the U.S. u.S. Trial being conducted. So the question ends up being why would manufactured product in China not be acceptable? Is this a completely new thing? Have you guys heard this before? Or how does this fit with what you know and what you think?
- [22:19]
D
Well, you know, Sam, I wondered, I mean I thought, I don't know any of the details here whatsoever, but I mean, it's not unusual that, you know, a given site in a given country or state or whatever as a manufacturer does not meet FDA standards and that would lead to a, you know, could lead to an RTF if the FDA is aware of it in advance of a filing or it could lead to a crl. That happens all the time. Right. So, but I, I don't know the specifics in this case.
- [22:55]
C
Dozens of approved drugs in the US are manufactured in part in China. So it's certainly not the case that the current view of the US regulators is that drugs that are manufactured in China are not eligible for sale in the U.S. beyond that, I think it's like really hard to interpret without more detail. And this could be as extreme as a strong political commentary by political appointees at HHS that could have drastic implications or it could be that simply a specific manufacturing site wasn't up to snuff and for various reasons people are choosing to describe that as an anti China stance in order to achieve some objectives.
- [23:30]
B
So something to watch.
- [23:33]
D
Yeah, but I agree with Matt. I don't think there's any reason to think there's a broader theme here given just the larger numbers of drug products that are manufactured out of China.
- [23:45]
A
Okay, all right, perfect. Matt, let me maybe put you here on the spot and then John, I'd love for you to comment as well, just given your extensive experience kind of launching drugs. So Matt, your royvance is expected and we're certainly expecting berpacitinib to get approved for dermatomyositis. For the audience, many of you know the drug, it's a JAK1 tick two oral inhibitors that showed very, very nice positive valor phase three data. Our consultants and all our work suggest this is going to be one of the, the best launches in the sector. The PDUFA is coming up, the guidance is to launch in September. So in the next two, you know, two and a half, one and a half, two and a half months. And we, we, we, we're modeling several billions. I think we've been consistently saying we think this is between 6 and 12 billion dollar product because it's got four different indications now in pivotal testing. The next one, we're expecting non infectious uveitis 2 phase 3 data by the end of this year and which should be positive on the heels of the positive phase 2 data. So this is going to be probably the next big launch in biotech. What's interesting is about 20 to 40% of patients are taking JAK inhibitors off label. So physicians are already warehousing. Physicians want to switch and there's obviously a high met need because currently standard care is ivig, which is extremely inconvenient. So the question is this is going to be. This is not the first drug that Royvin's gonna launch, right? You've launched another drug in the past, but I think this is certainly gonna be the biggest one. Question is how do you price IVIG? Is 1 barometer 225 grand. The next drug that's gonna have data is Vivgard. Vivgard on a gross basis with Weekly dosing is 870 before gross to net. So maybe how do you position Royvin to launch? How do you think about pricing with the first launch, first indication and three more to come.
- [25:46]
C
Yeah, thanks. Thanks, Jerome. We've said lots of times we're not going to give much in the way of specific launch guidance because you all are mean to companies that do. But look, I think you gave two bookends on pricing. I think we've basically said those are our bookends as well. And that will be somewhere in that range. Probably frame the way you just framed it closer to the lower end of that range than the top end of that range. But that still leaves a pretty broad range. You know, I think when. When we've talked about Vivgart pricing in the past, it's been more of a sort of a 5, $600,000 number and I think we'll fall between those bookends. Look, I think it's a privilege to launch a drug with great data. It's a privilege to launch a drug that doctors care about and that we think patients will care about. Obviously. You know, I made a comment earlier about how sometimes the best drugs available are late in class or not the first in class. Obviously JAK inhibitors have been around in different forms for different purposes for a while. And I think Brevacitinib is a phenomenal example of a sort of current or next generation JAK inhibitor. And I'm really excited. The last drug we launched was a topical in psoriasis. And I think our experience there, among other things, convinced us that we want to launch a lot more drugs like prepacitinib. The other thing I'll say is we're coming at a moment where we get to watch or have gotten the privilege of watching a number of other companies, including Alnylam, launch drugs extremely successfully, especially in this kind of orphan Zone. And so I think we're trying to soak that all up, learn every lesson that we possibly can and stand on the shoulders of giants, so to speak.
- [27:23]
A
Yeah, no, super, super interesting. And of course that's the you know, as you think even launching a drug these days in terms of getting formular replacement, getting on guidelines, how are things maybe different now and John chime in than they were they were 10 years ago.
- [27:46]
C
I mean I'm happy to speak and then John can speak for you.
- [27:48]
D
Yeah, you start man.
- [27:50]
C
Look, I think first of all to all of the payers listening, I'll remind you dramatic is not a large patient population. This is not going to be a huge budget impact. Look, this is an orphan disease. This is a relatively small number of patients in the grand scheme of things. These are patients with high m that need high medical burden. And I think access, as with every one of these launches, what every company in our position says and what I think the industry is largely delivering on at this moment in time is every patient that needs this drug should have access to it. We are committed to that and our job is to get drug to patients and then work with them to navigate the US healthcare system to get it paid for. And the honest answer is in these markets in orphan and orphanish indications with high morbidity in general that seems to work. That is, it's not. Look, I think payers have a job to do and that job is to make sure that these patients need drug and I think we have to work with them to make sure they're doing that job effectively. But in general I think what the world will find is that these patients need this drug and they're going to be able to get access to it. So I think a lot of techniques have arisen in the past half decades to make this work. I think these are not generally when they're not sort of by definition not highly competitive markets. It's not like there's four big pharma companies competing with rebates in this dermatomyositis space. And so I think these are generally not rebate intensive markets. And what you wind up doing is you have good bridge programs and great patient support people and you work with the payers to get it done.
- [29:15]
D
You know the one thing, the one thing that I think you know, we experienced in launching many of our drugs, all of our drugs was working very proactively with payers and even setting up, you know, pro value based agreements at the beginning and, and that turned out to be, that turned out to be really positive in terms of reducing, you know, what ordinarily could be headwinds. But you know, as one, one of the reasons we were able to do that is we had outstanding data like, like Matt does as well, which is really important. And then on top of it, you know, we, we, we had a way that we could engage with the payer in a, in a setting where the budget impact was not going to be enormous for them. Right. And that helps as well. It's one of the benefits in the rare disease space in some ways. So I'm sure, you know, Matt and his team are doing those type of things but those are, those are changes in the system that are I think positive and do enable smaller companies to be very successful in doing launches, which is great.
- [30:19]
A
All right, well, fantastic. All right, John, let's stay with you. Can you talk about Bayer's response to the OMB proposal regarding to the political influence on federal grants and kind of. What's the latest there?
- [30:32]
D
Yeah, look, I was really happy to see Bayo come out with a statement on the issue. You know, I think we've all heard of, you know, the proposal to have political decision, political operatives make decisions around either continuing grant funding or authorizing a new grant to be funded. And you know, I think all of us have been hoping the industry associations would make some, you know, some statement around this because nobody finds it as being good policy. Bio's response was a, was a pretty sharp rebuke of the OMB proposal, you know, stating amongst other things that, that you know, it would destabilize the research ecosystem, that it would weaken merit based funding decisions that would weaken U.S. competitiveness, undermine U.S. health security among among other concerns. And it's just great to see our industry association making comments in defense of our academic research enterprise which again is the top of the funnel for biomedical innovation and so important as well as the top of the funnel for training of our future scientists. And it is important that that gets done in a merit based manner like, like it has traditionally and that political influence is not part of that part of that picture. It is also a reminder that you know, we all need to be vocal on some of policies for any administration, not just this one, but you know, previous ones that can weaken innovation and we must all be, you know, part of the process of making sure that you know, we defend our, defend our industry and defend what's important for getting medicines to patients.
- [32:18]
A
Well, let's go to next into a very juicy topic and Sam, I'm going to maybe call on you First, Kalshi has recently announced, literally in the last two days that they're going to be opening a new venue to bet on clinical trials, outcomes and regulatory approvals. They are going to put guardrails to make sure, preclude any inside trading, preclude anybody with non public information from participating.
- [32:47]
D
Teleprompter people.
- [32:49]
A
Teleprompter people. It's going to be later stage clinical studies. It's going to be restricted to companies with market cap about 500 million. And this led to a lot of questions, both frankly supporting it and also on the negative side. Some of the supporters said that this is a free market. These are going to be a great way to play clinical studies and not play stocks. Maybe it's going to lead to less volatility in stocks. Some people even thought that potentially based on this, patients will be able to kind of look at what clinical studies are given a high chance of success and you know, on a personal basis might want to enroll in those studies and opposed to the other ones that are like less likely to work. Of course the, the drawback to all of this is then how do you enroll the other clinical studies if that becomes norm? Concerns about integrity of data, concerns about more volatility in the stock market and obvious ethical issues and regulatory issues, etc. So Sam, maybe with you, one of the companies that is a partner is Applied Excel, which obviously at Bloomberg you guys have had a relationship with. What's your thoughts about all of this?
- [34:04]
B
Yeah, so just Jaron for disclosure. We do have a partnership with Applied Excel. They are an excellent team with whom we are doing some exciting stuff. So I mean all the things that you've just listed are all, I would say, fair. The criticisms and the positives. And I think it's something that this market needs to figure out as it happens because unless the regulators get in the way in terms of stopping it from happening, then I think it's going to be something that will become part of our lives. We have to see how big a driver it becomes for it to become a way for patients to decide which trials to go to. This is going to have to become a very major source of information flow with regards to the numbers of bits that are put on, if you want to call it that, or the number of positions that are taken for or against the trial, et cetera. And so I think that a lot of times I say to my team, and I think we all, let's have those problems when they occur. I mean, of course you have to be in front of them and be prepared for them. I think the company Calci has put quite a lot of restrictions on the types of people who can play in it. In the list that I saw, I don't think I saw patients stick it necessarily in there. But what I'm looking forward to is being able to get some kind of prediction over time, statistical analysis of whether if they actually do predict the outcome of the trials. Because that could be an interesting way of using probability of bringing another new probability of success into our calculations. So I'm sorry I'm being very academic about it here, but I mean, all I can tell you is that the group that we work with are sound and solid and very ethical. So how this pans out, I think time will tell. So I can't judge it more than that, to be honest. Over.
- [36:08]
D
I agree with you, Sam. Look, I think there are concerns that should be discussed and they are being discussed and I think that's good that they're are out there. It's interesting to me that they're selecting companies, larger companies where, you know, ordinarily one can't really generate, you know, a bet. You know, if you wanted to look at this buying stock of Sanofi or Gilead for example, which are two of the companies that are apparently face free trials that are being considered, you know, you can't necessarily enjoy the benefits of, of a prediction, you know, based on, you know, just the size of those market caps and so forth. And, and this does allow you to sort of parse out the, you know, the specific trial that's being investigated for the that purpose. So that does have an interesting, you know, flavor to how they're doing it. So we'll have to see. But I do tend to agree that let's. It might be worth. Instead of worrying about something and not allowing it to happen or permitting it might be worth seeing how it goes first.
- [37:16]
B
I mean, honestly, we do have much bigger problems potentially brewing with regards to AI and jobs and security and all that. So nobody seems to be putting a block in that. And we're worried about one thing here. Of course, that's our job. Right? But let's see how it pans out. I might give you a new probability of success measure here.
- [37:38]
C
One fun thing is you can bet on the approval of Brevitinib on Cali. Now it's one of the contracts. So there's about $3,000.
- [37:45]
A
Yeah, it is.
- [37:46]
C
According to, according to Calshi, we have an 81% chance of getting approved by the end of this year. So.
- [37:50]
B
Oh, well, that's good. Right? I like the 1% in there.
- [37:55]
A
There's about.
- [37:55]
C
Well, that's. I'm just. Well, the bid offer is. Yeah, it's 81 at 26, I think. Yes. So it looks like 81 at 74 is like really where the order book is. And it looks like there's about $3,000 staked on each side. We had a brief debate inside the company yesterday about whether our insider trading policy forbade employees from participating in this market. So, you know, what did you think?
- [38:19]
B
They forbid it?
- [38:21]
C
We haven't like issued a formal decree yet, but I would not be happy to find out that my employees were spending trading. I agree on Kalshi is the honest answer to that question. Although I have no insight. The truth is I have no inside information as to whether Brevacitinib will be approved. And really, it's the FDA that should be making these rules. To me, it's mostly an entertaining curiosity. I will say this to Sam's comment about probabilities of success. My prediction is it is a long time before anyone does a proper statistical analysis of whether this is a good or bad predictor. And frankly, it would take a lot of whatever the thing you're betting on is. It would take a lot of N to actually answer that question. So I'm not that optimistic that we're going to know for a while as to whether this is a good tool or a bad tool from that perspective,
- [39:17]
B
Matt, I intend to be doing analysis for another 20 years. Hopefully we can get some answer by then.
- [39:24]
C
In 20 years, it's going to be all like Claude betting against anthropic on the. Or Claude betting against OpenAI on these things. Right. We're not even going to have to do it. We're just going to. To watch the robots talk to each other about it.
- [39:37]
A
That's a scary, scary thought.
- [39:40]
C
They're going to write the analysis reports too, so.
- [39:42]
A
Exactly. We're still waiting for that to happen. The look, I think conceptually this is absolutely a need. So why not have. Have this tool? It's just a question. I'm more concerned on the regulatory side, to be honest. This would not be good if you're having physicians, you know, betting on this or nurses. Even in big open label studies, you. Or even in, you know, the regulatory element is, I think, is the stickler for me. Okay, let's move to another one. Exciting news, John, I'm gonna maybe call you on this one. Yeah. This is so close to your heart. Make Merck's Lip Fendra, it's the oral PCSK9 drug was just approved. It's the first one. That one does have good data. Almost, almost kind of antibody like PCSK9 reduction. I might butcher this one. But this one does have the food effect and AstraZeneca I believe does not coming right behind it. Thoughts about is this going to be a revolutionary drug? They have great data but they don't have outcomes yet. Are outcomes important or. At this point we know that the lower the better on ldl. That's no longer questionable. And do you really need outcomes? And then I'd love to if you can comment about the exciting work that Coursera is doing too.
- [41:05]
D
Yeah, no, no, absolutely. Look, I think it's fantastic, it's great, great to see this approval. You know, PCSK9 was one of the poster child undruggable targets for long time and, and you know, Merck succeeded and you know, AZ is following with a macrocyclic peptide that, that binds to PCSK9 and inhibits interaction with the LDL receptors. So it's really an exciting piece of science for starters and you know it is going to enter a market with PCSK9 inhibitors that is now, you know, multi billion dollar market with Amgen and Repatha and lead on that side of it, you know, second in the mix is Novartis and Alnylam's drug Leo, which you know, was fun to, fun to bring to market along with the medicines company. I, I think it's going to be wonderful to have another option for patients out there. It is priced, it's interestingly priced under the price of the antibodies. So $3,800 per year compared to roughly, you know, 5 to $6,000 per year for the, for the antibodies in the SRNA products that are currently on the market. And now you know, of course with all the rebateology, I don't really know what that means at a net basis but, but it's interesting that that that's where they landed on the pricing and it's also interesting that this was a drug approved under Marty, Marty's CMPV program that, that he brought forward. So I, I'm excited to see how it, how it launches. I, I'm going to predict that it will do well, but let's see if Kelshi agrees with my prediction ultimately. On a personal note, it's, it's obviously an area of interest because we're developing at Coursera, one of the companies I'm building, you know, a PCSK9 and Angiotensinogen Sirna given once a year for prevention, which is a different market than different population than where this drug is approved. I still think that in the setting of prevention, especially primordial prevention, that lowering the disutility of these type of therapies with the once a year administration compared to a daily pill is going to be important because the adherence issues are really prominent and problematic with statin based drugs. So anyway, it'll be great to see it and follow it. I'm really excited to see it come to market. Market.
- [43:41]
A
So John, quick question for you. The, the question with Coursera is path to market. And I know this is something that you're, you're, you know, you're in Clive, obviously very much pioneering with the team. Any, any updates there? And I'm not sure if that's suitable for here.
- [44:01]
D
Yeah, no, it's fine. I mean, I can, I can tell you what we, we tell everybody, which is we, we expect to run two studies for approval, one biomarker based and the other outcomes based. And so there will be an outcome study. They'll need to be, I don't think the outcomes data will be an impediment for the Fendra's initial launch. Obviously it'll be supportive when it, when the data mature enough to be made available. The same will apply with what we're doing. So now our outcome study will have to be much, much larger because of the fact that it is a primordial population with the event rate being lower. But you know, there are ways of enriching populations to make that more tractable and doing clinical studies with reduced costs, which is what we aim to do.
- [44:48]
A
Yeah. At what point are outcome studies not
- [44:51]
D
going to be required?
- [44:52]
A
I mean, we know, right? The lower the better. Even a 2020 mix per deciliter. Confirmed. This is back to when babies are born, right?
- [44:59]
D
Yeah.
- [44:59]
A
Confers.
- [45:00]
D
Yeah.
- [45:00]
A
Well, they're not, they're not required, they're
- [45:02]
D
not required for approval. I mean, they've not been required for approval for a while, which is, which is good. I think everybody believes that, you know, they, they are helpful in supporting the business case. Right. So I, I, I, you know, and I think that's why they continue to get done at some level, you know, especially in unique populations. I mean, you know, our population has not actually really been studied, you know, because we're talking primordial population, primordial prevention, which is, you know, much, much earlier in people that are predicted to have a high lifetime risk of developing ASCVD and heart attacks and strokes. So it's a bit, it's a bit of a unique population, but, you know, we do think approval can still be done with biomarkers at the end.
- [45:47]
A
Yeah. And so the natural question is, you know, do you have sort of a target LDL level? Because you can go depending on the risk patient. And obviously based on characteristic family history, do you go to 70? Do you go to 40? Do you just go below 100?
- [46:04]
D
Yeah, yeah. I mean, you know, again, we're, we're gonna, we're gonna target primordial prevention. So it doesn't even have to be, you know, over the guideline limits of, of what currently is indicated for treatment of hypercholesterolemia and also in a younger population. But that's based on the, the belief that we can predict lifetime risk using an AI enabled tool. Right. So that's the key, that's the key of what we're doing in our approach at the end of the day. Yeah. Yeah.
- [46:35]
A
Okay, terrific.
- [46:38]
B
You know, just one last thing to add here that Astra's master's ambitions is to do a combination with their oral obesity drug. That's what they've talked about. Whether that's a fixed dose combination or not, I don't know, but that's one of their ambitions over.
- [46:56]
A
And what, what's your thoughts about that? I mean, there's so much going on these days in longevity, you know, and then people.
- [47:02]
B
I don't, I don't know if you need that. If John's successful with an annual drug which is priced more achievably, then why do you need that?
- [47:12]
D
Right.
- [47:13]
A
Yeah. Okay, let's. John, let's stay in. And we do want to talk about M and A, but I think one of the. We also have a data section to talk about out Biogen along with Ionis, just unveiled two days ago, their phase two. Dear nursing. This was a, a injectable tau that goes intrathecally. It's an ASO targeting tau. This was a randomized study. Three different arms, placebo against a low dose versus high dose dosing either every 12 weeks or over 24 weeks for the audience with the ASL. So primary endpoint was at 76 weeks. They were looking at the visible significance of the higher dose versus placebo. They didn't compare the low dose versus placebo on ADIS cog, essentially CDR sumbaboxes for Alzheimer's. And technically the study failed because the primary endpoint was the high dose did not do as well against placebo, the lower dose, by the way, in the 76 week study looked better which is actually consistent with the phase 1b data. And based on all of that which was reduction in phosphoryl editor, reduction in tau imaging, there was also a slowdown of deterioration of ADAS cog and also CDR summer boxes. 0.5, 0.54 points which is considered clinically meaningful by FDA. The bogey was 0.5. So based on that Biogen is going to go into phase three. But this is fairly controversial. Biogen stock was down from an Ionis perspective. People were looking at that and thinking it's intrathecal Arrowhead is Sirna, that's IV or sub Q that's going to be easier. That's behind so maybe thoughts about this data and on the overall technology?
- [49:04]
D
Yeah, I mean look I think obviously it's a bit of a confusing data set. I'm overall net get encouraged by this for as it relates to tau as a, as a target in, in Alzheimer's and I think you know we all have to be, we all have to be mindful that this is a super tough disease. But the Wall street reaction was, was mixed and, and part of it was the inverted dose response and also the view that the, the level of efficacy that was achieved was really no better than current anti amyloid drugs like, like Leqembi and, and Kisuna. So I think that's the real nature, the real crux of the response. I think what has got to be considered here is that the nature of this inverted dose response is due once again to the poor tolerability that one sees with ASOs versus other technologies. And that's why arrowhead with what they're doing. And also Al Nyla has a program targeting tau which is intrathecal arrowheads program is a trans BBB shuttle. You know those programs. I, I'm, I'm, I'm excited to see where they'll go those go. But the ASO story in the CNS of course has been complicated and just to that point last week we saw Roche terminating their Toman Erson and another ASO program in Huntington's and we also notably saw the EP Turin fail in cardio transform last week which again a reminder ASOs have tolerability issues and they could be contributing to mixed interpretations of, of overall results. So I'm, I'm net, you know encouraged by this as it relates to t. I think a lot of the complexity around the results could be mostly tolerability and ASO related just like we've seen time and time Again, so we'll see how it plays out longer term with other approaches that target tau. But I, you know, I don't think we should damn the target just because of the aco.
- [51:16]
A
Yeah, I mean, to, to your point, the higher dose did have more AES and lower dose density than the lower dose.
- [51:22]
D
Yes, exactly.
- [51:24]
B
Can I just ask quickly there in terms of. These are. These are not targeting and offending form of tau necessarily, they're targeting tau production.
- [51:32]
C
Right.
- [51:33]
B
So what do you think is the risk that if, if you're actually reducing, I mean, the protein has a function in general, so you're not, you're not. So what do you think about the fact that you're reducing tau levels and is it a balance, do you think, between the two? Because that was one of the conversations that I heard being played out.
- [51:53]
C
What do you think?
- [51:53]
A
You.
- [51:54]
D
Well, I mean, I think that's always. So the off target or the on target rather pharmacology being at higher doses being problematic. I don't know if there's enough support for that based on the biomarker data that have been published from the study, which wouldn't support that.
- [52:14]
B
That's true, that's true. Because actually when you look at that tau level, dose response, I mean, unfortunately, I'm not looking at that chart with the reductions in tau saying, oh, look, there's a dose response here that the high dose isn't reducing tau as much as low dose. All those error bars were overlapping, et cetera. But there is a point here in that this is a difficult subject and Biogen pays the price for trying something at the edge of our understanding of biology here and I find that a bit tough to swallow a little bit. I'm not supporting, I'm not saying the share price reaction was wrong or not, but, but somebody has to do this and figure it out as the time passes.
- [52:55]
C
So Abs.
- [52:56]
D
Absolutely. And have the courage to do it as well. Absolutely, yeah.
- [53:01]
A
With, absolutely. With. Look, I've, I have a mother that's got Alzheimer's, so I've been following this very closely and I obviously follow Ionis. The, the, the, the challenge with the antibodies is they're always, you know, putting a little bit of a cork into a, you know, you know, a huge kind of fire hydrant management. They were too late, so you need to go early. So we're always very interested in the modality of actually going and preventing the propagation. Some of the challenges, again, having a family member and you got to decide do you treat someone or not? The complexity of the Therapy. The issue with ARIA with the antibodies is monitoring is extremely difficult even if you live in New York City and you have good access to care and the benefits were modest and the benefits are maybe a little bit better here, but it really is preventing deterioration with a very little city or some of boxes cognitive benefit. And it's always the challenge, you know,
- [53:57]
D
but the lack of, the lack of ARIA signal so far is encouraging your own big deal. And it's a big deal because you know the, the big challenge with the anti amyloid antibodies of course is that risk that factors into it. And, and you know, if there's only potential, not that any drug is without its toxins, tolerability issues, but if there's only potential upside then it changes the equation a little bit, doesn't it?
- [54:23]
C
Yep.
- [54:24]
A
And you have to remember when you have this disorder a lot of times you don't want to be reminded of it over and over again. And going in to get monitored over and over again is not exactly easy in terms of even convincing the patient themselves to do this, you know. Okay, Sam, we have I think about two and a half minutes left and we have three topics so I think we're going to cut it down to 2 on M and A. Let's start with the, the, I think the more interesting one, the AstraZeneca diesel deal for EGFR, Exxon 20. AstraZeneca is, you know, is marketing to Griso, the EGFR inhibitor. They're the 800 pound gorilla. Sales are over 7 billion or so and so they're now licensing another one. And Exxon 20 has been, this has been a well known class, kind of mixed results in many ways. What do you think of this deal?
- [55:16]
B
Yeah, so I mean look, remember Astra has an investment in Diesel actually. So but what was interesting is that we were wondering why it took them so long. $600 million upfront, up to $900 million development milestones, et cetera. I mean the data that we've been looking at all along, we think that as an inhibitor, Sulazirtonib, which is the drug that's not approved anywhere outside of China, does stack up. I'm looking at our charts, looking at it compared to Colinin, to Ariven's data, to Hanso's data and also of course you've got Rimavant out there, which is Johnson and Johnson's EGFR met bispecific inhibitors. So the data stacks up and the side effect profile looks easier to manage. And I think Astra is the ideal partner here to be selling this given that they have the broader EGFR space. Now this is a small indication but it's one that needs the drugs. So we're positive on the diesel product and we'll see it's marketed in China and it's doing relatively well over.
- [56:25]
A
Okay. And maybe in the last 30 seconds Irasca had data relating to RAS and then they did a $500 million raise. Thoughts about the data?
- [56:37]
B
Yeah, I mean, you know your own. There are a lot of people who are skeptical about Nerasca and in terms of where the drug came from and I think Revolution Medicine helps fan that conversation. There are some, some legal discussions, I don't want to say, I don't think they've actually taken them to court yet but about whether, whether the drug infringes revolutions IP. But I mean the 500 million raise which was upsized to about 600 something and which is, which is quite a tick in the box in a market that was looking a bit dodgy in the past week as we just talked about at the beginning of the conversation. So to me that sounds like a sign of somebody believes in this. With the data improved relative to an additional four more patients and a month more of follow up which is always a nice thing to see because we're used to the opposite it most of the time where the data deteriorates, you know, and the ORR is beginning to be to get very meaningfully in the range that you see from Revolution. And also side effect profile looks a bit better which does make me wonder sometimes with regards to drugs which show a lower AE thing and you think well how do you manage that? Which of course they have explanations for. So looks decent for now. And we have a whole bunch more catalysts coming in the next few months so it's going to be fun watching this in pancreatic cancer.
- [58:00]
A
Yeah, well, terrific. Well, amazing. Thank you John, Matt and Sam for a very insightful episode. To everybody, hope if you're watching the games, hope you enjoy them and please join all of us at Hangout again next week, same place, same time.