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- [00:00]
A
You're listening to the Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry with a group of biotech insiders and experts. I'm Eric Schmidt and my co hosts today are Josh Schimmer, Brian Scorney and Brad Loncar. For more information about our hosts and guest speakers, Please go to biotechhangout.com thanks everyone for joining. We'll start with capital raising in biotech in particular. We had one of the first early stage IPOs in quite some time. We've also continued to see some companies go public via maybe less traditional reverse merger route. And Brian, I know you flagged a colossal private potential offering in the space as well, which we'll catch a bunch of industry news this week that of course will deserve our commentary, including some drama, I would say, and also some progress. We're going to talk about the FDA environment as well, this in advance of two very important ADCOM meetings next week. And maybe we'll close with the topic of whether the FCC is going to begin to change how companies are permitted or allowed to do their quarterly into semiannual filings for Pews. So we lot to cover. Brian, I think it's just still you and I, let's start with the IPOs and the capital raising we did just last night. Price for this morning See Scribe go public. This is probably the first very early stage company to go public since the COVID era. I guess we can't quite call it a pre clinical IPO because according to Scribe's prospectus, they are using their gene silencing technology in the clinic.
- [01:55]
B
Now.
- [01:55]
A
They just recently got approval in Australia I believe to begin to interrogate their lead candidate, which is a PCSK9 targeted therapy for hypercholesterolemia. But since that clearance of the Australian TGA just happened maybe less than two months ago, certainly this is an early stage ipo. Again, maybe not a preclinical ipo, but something that we haven't really seen much about from the last, you know, five, four, five years. Now it was a bit of a modest sized deal priced at over $100 million, but it was upsized and we'll see how well received it is. So I guess the first question that we'd like to take on is what this means for the broader biotech sector. Are we slip sliding away into an era where we're going to start to see earlier and early stage companies go public? And what do you make of that, Brian?
- [02:57]
C
Yeah, look, I mean I think and we sort of addressed this multiple times.
- [03:00]
D
Right.
- [03:01]
C
There's just a cycle and I've never seen the cycle, not at peak, absorb very early stage things. But I think I've also commented I haven't really seen the durability of the cycle allow for preclinical assets, preclinical companies to kind of hold valuation as you see a retreatment. Right. So you know, it's sort of, you know, there's always this dynamic of FOMO in the markets and, and you know, as, as money is available and you're looking for new ideas and people are, you know, pushing valuations, you have to sometimes reach earlier and earlier to find companies. Right. There's only, you know, a fixed amount of drugs that are in phase three development or phase two development or phase one development. And look, I mean I don't think we haven't, we haven't gone through an IPO cycle anywhere near some of the prior peaks. So like, I don't necessarily, you know, I wouldn't necessarily say this is like a bearish signal, but it's certainly a signal of an increasing risk tolerance in the market that, you know, once that risk tolerance goes away, and it will a year or two years or three years, you know, if things are out that are, that are early stage and haven't gotten to proof of concept, they, you know, they go through troubling times as the cycle unwinds. So you know, what inning are we, are we in right now? Tough to say. I certainly don't see a, you know, all low quality or all super early companies coming out right now. But you know, we've certainly seen a big, big move in the market and, and we've certainly seen that window open up pretty meaningfully in the last year.
- [04:44]
A
Yeah, I agree. I mean, I think maybe another thing to point out is that the valuation and the capital raised by Scribe this week was still a far, far cry from what we saw happening five years ago. In fact, back in 2021, the biggest ever IPO in the history of biotech at that time was a pre political company that was Santa Biotechnologies, which I think raised over $600 million despite being at the time maybe about a year or so away from an IND and it had a pre money valuation about $4.5 billion. So as we mentioned, Scribe was able to raise 100, $120 million or so on a much, much smaller valuation base. Clearly we're not where we were five years ago in terms of the over excitement and ebullience toward pre clinical stage. Companies. But Brian, I agree with you. It's a little bit kind of be careful what you wish for. Right. There's this fine line for these companies when they consider to go public between being able to access capital at good valuation in the very near term, but potentially sacrificing their longer term future. Take a look at SANA today. That company struggled. It's a fraction of the valuation that it was when it went public. Yes, they benefited from being able to bring in a lot of capital, but today they're kind of at the whim of the public markets and their valuation is still very much in the eye of the beholder. It's still an uphill slog for them. And that may be the case for Scribe and other earlier stage companies that aren't able to kind of create enough of a following, enough of a fundamental clinical story when the markets do eventually turn.
- [06:32]
C
I mean maybe one of the questions just kind of thinking to stick on that theme of when to go public, when not to go public. Right. I think you look at Santa's stock price and it's clearly like hasn't been a good reward for public investors. But you know, something you kind of brought up that piqued my interest is like from management standpoint, does that necessarily mean it's the wrong decision? And what would SANA be if they, if they didn't raise capital in the public markets? Because could the private side have continued to fund them? You know, they're alive as a company today and I don't know if that would have been the case if they weren't able to take advantage of, of the market.
- [07:14]
D
Well, not, not all companies even have the luxury of choosing if they IPO or not because many companies are at the end of the line for raising funds from private investors for one reason or another and they want to continue they ipo. Otherwise they're at.
- [07:31]
A
Yeah, that, that's a fair point. I think it's not just up to the company management teams, but in many cases it is the VCs that are pushing these companies to go public as soon as possible. We always hear that, we've heard that from other hosts, co hosts of Biotech Hangout, that the world is set up to push companies out and there is no break on the system. There is no ability to pull on the reins and stop that from happening. So yeah Brian, to your comments earlier, I think we are seeing the evolution of a biotech IPO window. It's certainly opening greater and greater in terms of the aperture and there's nothing Anyone can do, including ourselves, other than stand by and watch. Speaking of that aperture, Josh, I know you flagged yet another reverse merger that happened this week. And the Wall Street Journal also commented on this sort of way of backing into the public markets with companies raising money through pipe transactions. The Mentari deal or more generally broadly this phenomena that is also increasingly evident in the marketplace.
- [08:39]
D
Yeah, it's kind of like reverse mergers. Finally figured out how to approximate an IPO with the benefits of the IPO and the capital raise of an ipo. Hindsight doesn't seem like rocket science. You have your reverse merger with a very sizable pipe with a strong group of institutional investors supporting you. The most recent one, Venturi reverse emerging into inmed concomitant with nearly $300 million pipe. There's a company that's developing antibodies against pig cap and a bispecific pig cap CGRP antibody for migraine. Lundbeck recently validated this mechanism with this IV approach. Not clear if Lundbeck's going to be able to or interested in shifting that to a sub Q option, but Mentari seems to be well positioned to do so. This is another Fairmont Paragon product profile. There's another company called Slate Therapeutics, very very similar setup. Obviously we have quite a number of successful CGRP targeting programs in this space. So no reason to think you can't have number of multiple successful pay cap targeting approaches. This is actually now the sixth reverse merger in biotech that's been accompanied by a $200 million plus financing. Last year is about 3, the year before that one, and prior to that very little. So we're really seeing this new parallel process that companies are taking advantage of. And we track IPOs, we also track reverse mergers and have historically have treated them separately. But this new reverse merger framework is very IPO esque. So interesting innovation in this space.
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A
So how do you guys feel about this growing trend of backing into public markets through the reverse mergers? Are there pros and cons that companies or investors should consider?
- [10:45]
D
That's a good question. I'll get your take on it. I think one of the challenges with the reverse merger approach is that sometimes it's hard to accompany that with good sell side research in the way that you might get with a traditional ipo. That may be one of the drawbacks, perhaps offsetting that is that the fees to Wall street may also be a little bit lower from what I understand. I don't think dramatically but a little bit of a give take there. But others may have More informed perspectives on this particular point.
- [11:15]
A
Well, it seems like many of these pipes that are being done are being done with Wall street sponsorship with investment banks as part of the transaction. And, and seemingly that there is at least some research coverage, some analysts following that is baked into the financing arrangements. So many of these companies are not being completely orphaned by Wall street out the gate. They seem to have some following, but they don't go through the traditional multiple months or weeks long process where they're doing all of these test the water meetings and, and meeting in many cases tens of different mutual funds scattered all over the world. So that seems to be what's being left on the cutting room floor that when you do go public, yeah, you go public with a handful maybe of backers who truly believe in you. But at least on the buy side, I get the sense that the story is quite narrowly told now that's an opportunity for us as analysts. I, I love the fact that sometimes you can be first to a fresh piece of meat or you can be first to a new story and there's a obvious imbalance of information and opportunity. But from a company standpoint. Yeah, sometimes it seems like it takes them six or 12 months to make up for the lack of pre IPO activities and test the water meetings and IPO roadshow interactions. But Brian, I don't know if you have any views here.
- [12:45]
C
Yeah, no, I mean, I think, you know, I'd reiterate much of what you and Josh said. I think you're, you're trading, you know, efficiency and, and speed and reduced cost for, you know, a longer, more diligent, more exposed process. Right. So it can happen fast. You can, you can get it done. You can get, and, and you know, that's a benefit in, in many respects. But you, you definitely do it at the trade off of you are not as exposed, gets through this type of process.
- [13:17]
A
Yeah, you know, that's a great point. It does seem like these deals happen in lightning quick fashion in order to access public markets that are ripe for cap. So is the fact that we have seen more and more of these transactions over the last couple of months, is that a negative sign in your opinion?
- [13:37]
C
You know, I don't feel that way. I mean, I think, you know, valuations jumping up and quality going down and reaching earlier, whether it's through, you know, pipes, whether it's through reverse mergers, whether it's through IPOs, you know, they're all sort of the similar signals. But I don't know if I like would necessarily recognize, you know, I think even in like the biggest bear markets, I think we probably see almost we've seen a step up in reverse mergers because it's just been a little bit of an easier process. So I haven't run the data, but like, you know, my knee jerk reaction would be that there's not a great correlation between, you know, increasing reverse mergers and you know, a end of cycle issue.
- [14:26]
D
Okay.
- [14:27]
A
So no sign that people are getting greedy while they can or have to and that folks are expecting lesser times ahead and who really knows anyway, right? I mean, we all know how unpredictable these markets can be. Well, why don't we continue with our thoughts on accessing capital. And Brian, you pointed out a very interesting media report on Colossal Biosciences. I don't know that a lot of our listeners are familiar with this one, so we'll need a little bit of background.
- [14:56]
C
Oh well, it's really easy. If you hear my background music, you totally can encompass this. So Colossal is essentially the de Extinction company. That's what they're billed as. You know, internally we joke that it's basically like Biosyn from Jurassic Park. And a lot of people would probably maybe saw the headline I think last year where there was an attempt to sort of resurrect dire wolves from genetic material and fossils. And you know, that's Basically this company's M.O. they're looking to kind of recreate extinct species, something that John Hammond did very well in Jurassic Park 35 years ago. But the interesting thing is Axios is reporting this year that they are looking for a new funding round at 20 to $30 billion valuation, which is a very, very large funding round. And I guess it goes back to the question of is this a end of cycle signal? And we could probably talk about this, but the question is, would we even consider this biotech at all? And in sort of our precursor to this discussion to today, I said, well, it really is kind of like very, very classical biotech because it's like biotechnology engineering. It's not biopharma, which is what biotech has really evolved to be synonymous with, but it really is sort of a biotechnology effort that's ongoing, totally distinct from sort of providing therapeutic benefits more akin to what we've seen in sci fi fiction. But then the question becomes the enthusiasm here, is it justified by the technology? Are they actually capable of doing what they propose to ultimately do? And we could debate that. My question is, even if they could do it, I wonder if what is the actual revenue business opportunity here? And you know, reading some of the papers about how they've sort of engineered the dire wolf. You know, strikes me more that they're engineering some genetic material into gray walls. More akin to like sort of a transgenic animal. And, you know, I was talking about this with my wife, who's a physician last night, and she was like, well, you know, the Jackson Labs doesn't carry a 20, $30 billion valuation. I just wonder, is there, like, a modable technology here that, like, you know, any major transgenic animal laboratory wouldn't have some ability to do if this truly turned out to be a very profitable venture? So I guess. I guess with that, I'd love to hear anyone's thoughts on. On Colossal biosciences and our attempt to recreate the velociraptor.
- [17:41]
D
Yeah. My understanding of the business model, and if others have a better sense, please chime in, is that there's like, over 10,000 zoos in the world and, you know, nearly a billion people who visit zoos. So if you sell wolverine, mammoth to a zoo for a million or $2 million a pop, you know, those numbers can get pretty, pretty big. I'm not sure what the other revenue streams are in terms of maybe informing, you know, biology and leading to new potentially therapeutic interventions or breakthroughs or whatever. That my understanding is, at least in the first generation, selling animals to zoos. I have no idea what the cost of goods of those animals are going to be or how R D intensive or scallop it is. But it'll be interesting to. To see if someday we're all going to the zoo and checking out the woolly mammoth exhibit and then heading over to the dodo bird exhibit and then the direwolf, et cetera, et cetera, et cetera. It is fascinating.
- [18:39]
A
We got you. Brad. Anything to add on our colossal bioscience discussion and whether this business model makes sense or whether we should even be considering Colossal as a biotechnology company?
- [18:54]
B
To be honest, I didn't fully hear it, but here's what I think about Colossal that I think is a takeaway for all of us. So, you know, when they've raised money, I've heard a lot of resentment from, like, drug developers and looking down on it. But what Colossal has that many of us don't is a great story, and it actually resonates outside of our industry very well. And it clearly resonated with investors. And so I would say if you're in the camp of people who's, like, struggling to raise money for your own company right now, and you're thinking, gosh like I'm trying to cure cancer and what is this like vanity project going on that's like, you know, raising all this money and getting all this attention? I would say like, rather than being jealous, like try to package your what you're doing into a story that resonates more with investors and maybe even beyond that.
- [19:51]
A
Well, that's a fair point. Narratives sell and hopefully they can turn that narrative into a viable business too. I mean, there were great narratives in the history of biotech. The human genome sequencing milestone was a great narrative that took a lot of companies to similarly sky high valuations. And some were able to turn that capital into real programs and persist today. And others never figured it out. So much like our discussion on some of the earlier stage preclinical companies, Scribe and Sana, when you have access to capital, you got to take advantage of it. But what about this point of defining a biotech company? If Colossal goes public or are guys like us going to cover it? Are we going to feel comfortable covering it? Do we want to cover it? Is it going to be in the biotech index? Should biotech investors view it as part of this industry? Josh, I know you had some views on this.
- [20:47]
D
Yeah. Can we plug our control arm podcast, Very, very different type podcast that literally gets into these types of questions and debates. It's not super relevant for the day to day biotech sector, but it is important. As you think about how's the XBI constructed? Why are some life science tools companies in the XBI whereas others are in the life sciences index? Why are some pharma companies in the XBI and some biotech companies in the pharma index? It all kind of starts to matter. Gets to the point of the way that we've been defining biotech has evolved over the years in a very unusual way. In a way that's kind of semantic creep, right? Like we used to carve out spec pharm as its own separate worlds. But perhaps after the saga with Valiant, nobody wanted to be a spec farm company. It used to be a great thing to be a spec farm company, meaning discipline and profitability and cash flow and probably lower risk type drug development and innovation. But it just became this four letter word. And we didn't have anything to do with these companies. We didn't have another nomenclature that evolved in lieu of spec pharma. So we just called them biotech. And perhaps with some rationale, right, like we're all analysts who follow drugs through the NDA or the BLA process. Some companies do both. How do you draw a line and say, oh, this company is absolutely biotech, but that one is absolutely not biotech. And what do you call it? Especially when no one wants to be that old thing. And so I think it's been a very effective semantic creep of the nomenclature. But to be honest, been doing this for two decades. I dread the question that anyone might ask me, which is, what's biotech? What is the sector that you cover? Because it's a very difficult question to answer.
- [22:54]
A
Well, I dread the question of will you cover colossal biosciences? Because I know that I am woefully and inadequately prepared to look at a business model that's anything other than the therapeutic business model. Your point about industry creep is an interesting one. Back in the late 1990s, early 2000s, there were a lot of tools companies, lab instrumentation companies that were going public around the genomic bubble and being covered by biopharmaceutical or biotech analysts at the time. And I was unfortunate enough to be gifted a few of those. And it's a completely different business model and that's just tools and lab supplies, which at least scientifically, are somewhat related to the drug discovery efforts. So going outside of drug discovery into zoos or, I don't know, other popular media opportunities with technology of this sort, I don't think that's where we ought to be. I'd go back to the foundation of our industry, Genentech. It was started by a venture capitalist and by a scientist. And those two folks got together for the first time and decided that the science was so cool, that it was deserving of venture money, and that venture money was oriented at putting drugs into the marketplace that couldn't get there through other means. So to me, at least, biotech always was this perfect mix of venture backing with a therapeutic focus. And you need both. You need the science, you need, you know, the, the novelty, the innovation. I, I didn't like it either when spec pharma kind of crept into our industry and we were talking about moving a twice a day drug into a once a day formulation. But, but I think you also need the venture backing. And, and those two requirements have created, you know, everything that we love and, and hold near and dear. But Brian or Brad, do you guys want to have the last word on.
- [24:55]
C
I'm good.
- [24:56]
A
Well said. Okay, let's move on then. And Brad, you hosted a big biotech TV science summit this week, so tell us about that.
- [25:07]
B
Yeah, thanks a lot. It's the first event that biotech TV has ever had, and we had it in Kendall Square at MassBio. And I want to thank MassBio for not only giving us a space to do this, but being like a top sponsor and also Bio, the Biotechnology Innovation Organization. And I should thank Daphne for that because she put me in touch with them. And the idea was to put on an event that like supports the whole biotech sector. You know, something that we talk about here a lot is just it feels like our country is starting to pull back from science at a time when others like China and other places are doubling down. And so we just wanted to like bring together a summit. And we had a few themes, but like a major theme was like, how do we better explain the work that we're doing to the general public? Because we need the support of just ordinary people, like the American people, so to speak, if we want to keep, you know, NIH funding growing and if we want to keep, you know, more people going into science as a career and all of that. So, so we had like a half day event and we had some really great speakers. So like speaking of the nih, we had Elias Zerhouni, the former NIH director. We had New Baran. We had a lot of, you know, companies that are at the forefront of great technologies. Nello Minolfi from Chimera, Sam Kulkarni from CRISPR Therapeutics, Jason Kelly from Ginkgo. And they kind of talked about, you know, how they were able to do the work of these, of this generation of new technologies, you know, right here in Boston, and what we need to do to make sure that the next generation of future technologies, that this area is competitive in them. And the, you know, I always try to have like a different angle to everything. And the thing that was, I think, really unique and innovative and fun and cool about this conference was in addition to like it being like a normal conference with like, you know, biotech crowd, we invited and literally flew out and put up In a hotel 20 of the most highly followed, what we call psy commerce. So these are like young people who are science advocates, who, you know, are at the start of their career, who, you know, most of them recently received, earned a PhD or they're working on it or something. And these are young people that have in many cases like four or five hundred thousand followers on social media, on Instagram or TikTok. And the ones that we invited are the ones who are doing it right. You know, these are not like crazy people who are pushing something or like alternative medicine. These are people who work in a lab and have done research and just happen to be young and really good communicators. So they were there and they, you know, we, we learned from them and, and they learned from us because I feel like these two groups of people live on different planets and they don't really have access to, or at least not until today, you know, didn't really have exposure to the corporate biotech world. And and so it was really cool to have them. And like for that group of people we actually gave like our conference was like a, like a Tuesday half day conference. We gave them a whole three days experience in Boston and Kendall Square. So like Scott Kerzner gave them a walking tour of Kendall Square. And then really cool. Greg Verdine was a guest of honor at a dinner we had and he talked about how he became a scientist and all the things that he's worked on with Raz and Beta Katina and everything. And we also took this group of 20 young communicators and after our conference was over on Tuesday, we sent them out to biotech companies. And I am amazed at the companies that opened their doors and rolled out the red carpet to this. Like, I'm really proud of it. So like Moderna for example, took all 20 of them and they gave our group a talk and a lab tour and then they gave them all chances to do one on one interviews with top Moderna scientists. And you know, it was exactly what I'd hoped it would be. It was like a young person like asking a Moderna scientist like hey, we hear in the news that like this vaccine, you know, causes harm or, or you know, didn't work or whatever, like what do you have to say from that? And they're right there at Moderna's headquarters. Like Moderna had a chance to explain to a very broad audience through these science communicators what the truth is. And we had a breakfast at Al Nylam where Yvonne Greenstreet gave a talk about rnai and we sent them out to like six or seven others, you know, medium and small sized biotech companies too where they saw robotics and everything. And also John Maragonore did a dinner with them as well where he talked about how, you know, Alnylam almost went broke a bunch of times and didn't become profitable until, you know, just like a year ago. And so they, they really heard the story of biotech. And you know, I, I'm a big believer that, and we see this through biotech tv, like when you show our industry for what it really is and when you show the people of our industry for who they really are. It really resonates with a wide audience. And so we wanted to start a conversation where we introduced ourselves to these younger people that can be a conduit to a much bigger audience than we're currently reaching. So I feel like a lot of times we only talk to ourselves. You know, if a biotech company has news, you put out a press release and you only care about that press release like reaching investors or other people in the biotech sector. And if there was another take home message, I hope that it's, it matters. We're doing great things that are exciting and like, the public should know about it because at the end of the day, if the public doesn't support us, and you know, ours is a very misunderstood industry today, if the public doesn't support us, that makes our lives more difficult and that ultimately makes it more challenging to help patients. And so this conference, the theme of it was how do we start to turn that tide? And it was a lot of fun and I learned a lot about putting on a conference and everything. And I'm, I'm really thankful to everybody who from far and wide traveled to be there that day. I think it was a lot of fun and it was a really unique conference.
- [32:13]
A
Well, thanks for sharing that, Brad, and thanks for hosting the conference. You're 100% correct that science education and awareness in this company, in this country, put aside just our biotech community, but more broadly in America is woefully lacking. And anything we can do to improve scientific acumen is welcoming you look at what's going on at the FDA this week with the MAHA oriented reviews of peptides and the hope that maybe we'll have some time to talk about this or not. But I think in summary, many of our listeners are aware that the FDA just voted 8 to 6 yesterday to allow compounding pharmacies to approve a peptide that really hasn't been shown to be either safe or efficacious. I don't quite understand where the MAHA fascination has come with peptides, but it's a completely unscientific pursuit. And you do think that, well, if we had people in the country that were able to better communicate what is science and what's not science, maybe we wouldn't have to be watchful of such episodes as we're seeing right now. But let's get to other topics or unless anyone else wants to comment on that. Not sure we're actually going to have much time for the peptide discussion anyway. So any Takers.
- [33:34]
B
I'll just really quick, Eric, respond and say thank you for what you said. And like, another thing that I'd say about it is that I think a challenge that we have is like, like the conspiracy theories and like the junk science and everything. One reason it's so prevalent is because, um, that's like highly organized. Like the people who believe in that stuff are like a tight knit, like very organized community. And so that messaging spreads very quickly. And, and one thing I would say to like, keep our, you know, keep our head up is I think people who believe and trust in science is actually a much bigger community. And like, we do have all of those voices, but it's all very fragmented. And so like. So a goal of this conference was to start to solidify that fragmentation so that we can start speaking more as a group because our interests are aligned, but we just are living in different worlds.
- [34:41]
D
Great point.
- [34:41]
A
And again, thank you for all your efforts and, and the efforts at the conference this week to try and do just that. Bring, bring folks together who can, can really matter and work in a more concerted fashion. Let's move on to the next topic. Josh, I think maybe you're going to introduce the IMIX biopharma debacle that we unfortunately had to deal with this week. Maybe we've lost Josh. Brian, you want to take it?
- [35:14]
C
Yeah, sure. So, I mean, I.
- [35:17]
B
By the way, I can take this, Brian, if you'd like to. I know all about it and I feel strongly about it.
- [35:21]
D
Oh.
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C
I mean, I was going to split it with Josh anyway, so I'm prepped too. But if you want to start off and then we can talk more in depth about it. But go ahead, Brian.
- [35:30]
B
Yes. So the background on this is there was a guy who, a coup, so 20 years ago, seemed to have been a legitimate doctor. I think he was a radiologist or an anesthesiologist. And he assaulted. And he lived in Rhode island and he assaulted a woman. And there was a. He got. He was arrested and went to court. And in the middle of the court case, he fled and he literally wrote his lawyer a note that said, I think I'm innocent, but I can't stand the possibility of being found guilty. So I'm going to flee the country and you're never going to hear from me again. It was nice to meet you. Thanks for representing me. And in absence, in absentia, he was convicted of this terrible crime. And so he literally just quote, unquote, you know, he literally disappeared for a couple of decades and somehow The Rhode Island FBI and U.S. marshals got a tip 20 years later, like, a week ago, learning that this guy might be in the United States. And he was actually on a sailboat, like, off the coast of New Jersey. And they tracked him down and they arrested him. And it turned out that he was, I don't know about the full 20 years, but at least for a handful, like the last handful of years, he was living under an, an alias. And he recently in March was hired as the chief medical officer for IMIX Biopharma, like a publicly traded biotech company, and also had some, like, worked at another biotech company previously. So. So if you haven't seen the news, Adam wrote an amazing story and everything, and I'll just very quickly jump in with an opinion that I thought was beyond ludicrous. So imex, all they did from this, like, story is they put out an 8k saying that this guy was fired and that they didn't believe it was a material event for their company. And, like, that's it. And I thought that that was about as ludicrous as a way you could handle this from like a PR and communications and all that standpoint, because, like, this guy was literally their chief physician. And I, I know it was only for three months, but, like, what does it say about you as a company that you literally hired a con art? Because there was a whole, obviously to get hired for the company. He, he appears to have had a whole fake backstory. He said he worked at Merck and Sanofi and all this stuff, and he said he was an oncologist. And, you know, I, I don't want to get in trouble by saying the wrong thing, but it seems like all that was just, like, flat out false. And so it seems that this company had had as their chief physician, a con man. And if, if I'm a physician working for them, you know, that's going to have. Have their therapy in my trial if I'm a patient that's receiving one of their therapies. Like, I think it's a pretty material thing that your chief physician was literally a con man. And so it's, it's a fascinating story. Like, I hope Adam, like, literally writes a book about this one day just to learn all the crazy facts. But I think it also does say something about, like, crisis management and how to handle situations like this. And in my opinion, I thought amex handled it about as poorly as you could handle it. It basically made IMEX look like an amateur hour company, and they were okay with that.
- [39:28]
A
Brian, what do you have?
- [39:29]
C
Yeah, I mean it's, it's fascinating. Brad really covered it. Well, you know, I think it sharply contrasts with what we were talking about earlier of how, you know, we really are doing great things in biotech and biopharma and you know, it winds up being very misunderstood and sometimes because there are these cases of kind of craziness that occur in the sector. And I mean, this reminded me like the Serha Gamruko case of the Enochian Biosciences co founder who hired a guy to kill another guy. Maybe was this like six or seven years ago? Right. So these periodically pop up and it's very bad press for biotech, even though, you know, I'd argue a lot of these companies, you know, aren't really companies that are necessarily followed by any of us or given a ton of credence. But you know, when it happens, it really kind of like sticks out as a case. But yeah, to your point, I mean, how did this guy get hired out of Tosa back in 2022? Like, where was the first hire that this guy was able to like reemerge into a, you know, a senior leadership role as a physician with like an entirely created background.
- [40:40]
D
Right.
- [40:41]
C
Like, it's just so strange to me how someone who, you know, spent all this time becoming a physician, getting convicted of crime, disappearing from the US and then reemerging in the US under a totally different name is able to kind of create that narrative that no one really checks on. And you know, I totally agree on the IMEX EK
- [41:06]
D
look.
- [41:07]
C
And you know, this is probably an extreme case that that's not normal. But bad things happen in this sector. Right? Like drugs fail, safety issues occur. And you know, I always try to encourage people, you gotta like get ahead of that. Like, don't try to hide when things like this happen. You know, even if you're gonna take a blow, it's gonna be a worse blow to try to hide behind an 8k and not make any commentary about the materiality or what happened than it will be to, to say, hey, look, this is what happened. It's crazy, like you know, give kind of the true story of what happened to the public.
- [41:43]
D
Yeah.
- [41:44]
A
I mean, one thing you said, Brian, kind of resonated with me. We sitting from the outside as investors sometimes look at these companies and the executives of these companies and almost have this perception that these are legitimate, high level operating organizations. And yet we have seen this time and time again. You think about IMEX, this was a $2 stock a year ago and it was maybe a sub $200 million company at the time. I don't know, maybe they had 30 or 40 employees. I mean, it shouldn't be the default that we look at organizations of this sort that are kind of on the fringe in biotech and we say, well, they must have gotten their ducks in a row, they must have checked all the boxes, they must have done their background checks, they must have done this, that or the other. My at least perception and experience dealing with many of these smaller and less well resourced companies is that they are cutting a lot of corners in order to just, just persist, just survive, just try and make payroll, just try and get to the next milestone. So you know, that's, that's something we need to accept as analysts and investors when we're fishing in these shallower pools of water. But to point the finger at ourselves too, our own industry, the investment industry has certainly had the wool pulled over our eyes with similar con men type experiences. You guys will all remember, of course, Matt Martoma, the 0.72 SAC analyst who, who went to jail for basically paying off Alzheimer's physician for information around their phase three trial. Matt's whole backstory was much like this guy's. He feigned that he had graduated from these illustrious institutions and had an A plus resume. And when he was finally caught red handed for bribing an official, at least bribing a Kol, all that stuff came out. So yeah, be careful and, and be somewhat skeptical about what you, you were told by people.
- [43:55]
C
You said you weren't going to be the skeptic today, Eric.
- [43:59]
A
Couldn't hurt, couldn't help but talk about that story. I'm sure you, you lived it just as vividly as I did, Brian.
- [44:06]
C
I do remember those days.
- [44:08]
A
Yeah. So let's move on to better news and I think, Brian, you wanted to chat about the dying BLA acceptance for their DMD drug. Z Rostodirsen is what they're calling these days.
- [44:22]
C
Yeah. So yeah, I mean, I think thematically we're going to now move into a bunch of regulatory stuff and nothing really embodies the regulatory debate as much as drugs for Duchenne muscular dystrophy, which has been a source of a lot of controversy for half my career now. So dying therapeutics submitted their BLA for a drug that is basically, and this goes back to sort of the original controversy with Sarepta and Exondus 51 or a Teplarson, which is a PMO that is in a subset of DMD patients called Exon 51amenable. It's able to sort of skip the broken part of the gene and create almost full length dystrophin. Teplersen does this in a very, very small amount. It, it was approved on the basis of being able to show increases in dystrophin expression. Three other drugs were subsequently approved that do similar things on different exons. And that was a very controversial decision in the FDA at the time. There was an internal debate that went all the way up to the commissioner's level. What Dyna's doing is they have a, basically a very similar model, but what they're using is they're using an antibody to make the PMO go directly to the muscle. And what you're seeing is higher expression of dystrophin than what you see with just sort of a naked PMO like Sarepta. It also winds up with a more favorable dosing interval. So like axondase51 is dosed weekly, this is dosed monthly. So, you know, is a little bit better in terms of dosing convenience for patients, certainly better dystrophin expression. And the question is, you know, will the FDA approve something that's better than a Teplersin? Despite the controversies around a Teplersin, I think that's, you know, what's notable is in the background here, and this company has a PDUFA date in late January. What's notable in the background here is Sarepta has also filed an NDA to look for full approval of their drugs Viandas fatigue and a Mondis 45, which were the subject of a large two year phase three study in DMD patients that ultimately failed to achieve its primary endpoint. And you know, there's a big question, as you know, does this validate, as I think Sarepta would make an argument for that, it that despite missing the primary endpoint, there's enough there to validate that this drug is doing something. Or does it, you know, kind of recreate the original controversy that even though this is making a small amount of dystrophin, that dystrophin may not be doing anything clinically at all. So it'd be very interesting to have effectively the same Division of Neurology 1 reviewing both of these applications simultaneously. Having a phase 3 data set showing that, let's call it a little less than 1% of normal dystrophin is not clearly providing a robust clinical benefit over a two year, 200 plus patient study. But does this version of it, which makes a materially larger amount of dystrophin and is a much more convenient dosing interval for patients. You know, does it meet the metric for substantial evidence of effectiveness? It's really hard to think that the FDA could give Amandas and Viondas full approval based on the Essence Phase 3 dataset and not very, very clearly approve Dyn Xeros for dmd, given that on pretty much every metric it's better than a Tupperson. So, you know, expect people to follow this very, very closely and it'll be a, you know, again, another good indication of like where we lie at right now in terms of FDA flexibility. And I know we've obviously had a lot of changeover at the FDA in the recent months that we talk about a lot here, but you know, this is definitely one to watch. You know, I think it's going to get approved. I think it's very hard to try to make a case to pull any of the PMOs from the market. The community and advocacy groups are very powerful. They really believe that these drugs do work. And in that background it's hard to say that this isn't a, at least a better mousetrap than what's available.
- [48:41]
A
Oh, I agree 100% with you. This is definitively, I would say a better mousetrap than Axondas in terms of everything, right? In terms of dystrophin expression, in terms of some of the functional data that they have put forth, which at least is intriguing and as you mentioned also the convenience factor. So given the very, very, very low benchmark that was set by the FDA and by Sarepta years ago, it's pretty hard to see how this doesn't get approved. I don't even understand honestly what the debate in investor circles is, as you point out, Brian, like what's the counter to this should be approved, that we should withdraw every DMD from the market, every DMD drug from the marketplace. No, that's obviously not going to happen. The other thing I just wanted to say is congrats to the Dyn team. I mean, this team had been kind of beaten up over the last couple years in investment circles given some of the turnover they've had at the company and some of the delays in executing around their other program. But in this case they killed it, right? That Avidity and their Del Za was going to be the first muscle targeted oligo to come to the market for dmd. And the DYN guys were able to file about a month or so ahead of Novartis and now they have this Priority review pupidate. So this should in many ways become the first of its kind in terms of a new drug class. And the execution's been nothing but crisp around this program. Brad, anything you want to add or should we move to next week's activities at the fda?
- [50:15]
B
Move on.
- [50:16]
A
All right, so two, I would argue, very important ADCOM panels shaping up for next week. We've got replimune and their RP1 drug for refractory melanoma patients, which is going to be reviewed I think on Thursday the 30th, is it? And then next week also we have Capricor's Daramisolis cell therapy oriented product also for Duchenne muscular dystrophy. Both of these drugs have been in the news a lot. I know we've covered both of these drugs on the hangout in the past, so probably no need to go through the past history and the controversy around these approvals. Both have been, I'd say, following a very torturous route through the agency and to these upcoming panels. And maybe to me, the most interesting about the thing about next week is whether the outcome of these two panels is going to change our broader perception to the fda. I guess, are we going to be looking at the thumbs up or thumbs down votes on these two drugs and saying, okay, that's very specific to these factors, these idiosyncratic variables around these programs. And it may be a good thing or a bad thing that neither of these drugs or both of these drugs or one of these drugs gets through, but it has no broader read through to the fda or are we going to be looking at this as a litmus test, really? The first very, very public decision making under the new commissioner, Kyle Diamantes, and saying, wow, we've got a whole new tone one way or another at the FDA that we didn't appreciate before. So we'd love to hear your views on this. Brad, you want to chime in?
- [52:01]
B
Yeah, I'll jump in and just say that I strongly believe that we need more ADCOMs, not less. And I think that's been a bad trend lately over multiple administrations. I don't, I don't think it's just something that's going on today. It has been much sparser today because it literally represents what our country is like. The FDA and government agencies like it are supposed to serve the people. And the biggest mistake that Vinay made or having Vinay in the position that he was at at the FDA was he was a my way or the highway type of person. He had very strong opinions and he wanted to change the way the drugs individual reviews were done based off of his own opinions. And if I'm being honest, I think sometimes Rick Pazder has had the same approach to things. And in our country, those government agencies are supposed to represent the will of the people. And you know, we have that very broad term safe and effective, and that means different things to different people. And the best way to show that like anything got a fair shot is to have a public hearing about it and allow the experts of whatever that is. So in this case melanoma oncology community to talk about it from a professional medical way. And also if anyone from the community had, like literally any person, I've gone to a meeting like that and as a just a citizen, I've, you know, said something and asked a question and you can do that. And so I think it's a good thing that those are happening. And regardless of the outcome, at least now you can say that more things were aired out in public and it will be less controversial. So, so that's my two cents.
- [53:56]
A
I think that's very lucid analysis and, and agree with you both about Dr. Pastor as well as Dr. Prasad. It's nice to get this stuff aired out in public. But if I press you, Brad, you know, if both of these drugs get approved, or let's say both of these drugs are unfortunate fortunate enough to be rejected, are you going to translate that outcome to the broader FDA or are you willing to say, you know what, these are just two idiosyncratic events.
- [54:30]
B
It's hard to forecast. I mean, it would, I, I, I think it would only be newsworthy if we have one of these rare situations where an ADCOM totally goes against it and you know, FDA approves it or vice versa. Like it, you know, gets a unanimous yes vote and then FDA ultimately rejects it, which you know, has happened on under like more normal circumstances in the past. So we'll have to see.
- [54:59]
A
Fair point. Brian, what are your thoughts on the fda?
- [55:02]
C
Yeah, I mean, I think, I think, you know, I would reiterate Brad's point. I mean, I love ADCOMs. I mean one of probably not the most efficient use of time, but one of my favorite things to do is going down to the FDA campus and seeing these ADCOMs live. You know, now I, you know, have done many more just watching them virtually even when they are actual events that are held down on the campus. But I totally agree. I mean, this is, you know, the opportunity to be transparent in your views, your Thesis to kind of air everything out in public over a full day event. And I think this is the way to properly handle sort of scientific debate. And you know, look, I think Van eye and I think Macri their arguments were like, well you can just, you know, you could do whatever you want with the panel, you could stack the panel, you could like put briefing documents out to say whatever you want. So like, are they just kind of like a waste of time and resources? And I would still argue even if you're going to stack the panel or even if, you know the FDA is going to just really, really be very aggressive in their specific view around what should happen, it's still airing that out, right? And you see cases like Aducanumab where the FDA like very clearly put out their view which was you should approve this and the panel was not having any of it. It was like a full on rejection of the data. Right. And then the FDA wound up approving it and it's still like a very controversial decision or the less controversial on subsequent amyloid plaque removers so showing effects. But I still think like this is, you know, this is sort of the best way to go about the scientific review process, to do it publicly. So I'm very excited for it. Does it wind up showing, you know, is this a more flexible tone of the fda? Look, if they're both yeses. Like if both of these briefing documents are benign briefing documents and the FDA reviewers are like, yeah, we kind of think it should be approved and like we're looking for panel guidance on, on who or you know, under what, what format it should get approved. I think that's extremely positive for FDA flexibility. It's, I, I, I definitely think it's more than a one off an event. And if both of these applications, and look, we've seen, you know, complete response letters on some applications, so we have a little bit of some of the point of at least some people on the fda. But I mean if these briefing documents are just unearthing negative thing after negative thing and basically saying hey, like you have to reject this because like these are the problems, then you know, that's a new tone too. Or that, you know, not necessarily new tone, but it gives us insight into that tone. And I think, you know, that's what we don't really know like what is the tone for the FDA under Kyle? It's hard to imagine that it's more stringent than FDA under Vinai as an example, but we don't know exactly where this FDA currently sits either.
- [57:52]
A
Yeah, I mean, I think you guys both make great points. I will be looking at some sense of direction from the fda, from these votes and these briefing documents, but the point you make on transparency is critical for these two products in particular. So much of the past history for both Dermycel as well as RP1 has been kept out of the public eye. We really don't know, you know, through the torturous path that these drugs have followed, what what happened and why. So it'd be really great to air that out publicly. But that is it for us. We are out of time. It's top of the hour. Let me just conclude by thanking Brad and Brian and Josh, who I know had to hop off for a wonderful episode of Biotech Hangout.