The Biotech Beat

Week of 10/30 - 11/5/23

by Joey Bose and Alex Crombie

??Upshot

• Sarepta Therapeutics' gene therapy for Duchenne muscular dystrophy, Elevidys, showed encouraging trial results but missed the primary endpoint, causing stock prices to plummet despite CEO Doug Ingram's positive outlook.
• Amgen's biosimilar to Johnson & Johnson’s Stelara, Wezlana, raises questions about its impact on Medicare price negotiations due to the Inflation Reduction Act's provisions on drug competition.
• Novartis' $3.2 billion acquisition of Chinook Therapeutics shows promise as the phase 3 trial of atrasentan, a treatment for IgA nephropathy, meets its primary endpoint, signaling potential for FDA accelerated approval.
• Merck KGaA invests in Jiangsu Hengrui Pharmaceuticals' PARP1 inhibitor, HRS-1167, aiming to offer a more targeted cancer treatment with fewer side effects compared to existing drugs like Lynparza and Zejula.
• Neumora Therapeutics, leveraging a strong financial position from a recent IPO, is looking to expand its neuroscience drug pipeline through acquisitions and partnerships, with a focus on psychiatric and neurodegenerative diseases.
• The FDA's approval of an interchangeable biosimilar for Stelara, Amgen's Wezlana, could influence Medicare's drug price negotiations and raises questions about the definition of "meaningful competition."
• Novartis plans to seek FDA accelerated approval for atrasentan, a drug for chronic kidney disease, after phase 3 trials showed significant improvement in proteinuria, a key indicator of kidney health.
• Merck KGaA's deal with Jiangsu Hengrui Pharmaceuticals for a PARP1 inhibitor, HRS-1167, aims to improve on existing treatments with a focus on reducing hematologic toxicity.
• Neumora Therapeutics is exploring additional acquisitions to enhance its seven-drug pipeline, with a strong financial backing and a focus on psychiatric and neurodegenerative disorders.
• The FDA's approval of Amgen’s biosimilar to Stelara, Wezlana, may affect Medicare price negotiations and raises questions about the criteria for "meaningful competition" in the market.

?? Research, Development & Drug Approvals ??

Sarepta's Gene Therapy for Duchenne Muscular Dystrophy Faces Scrutiny Amid Trial Uncertainties

The Facts

Sarepta Therapeutics' recent trial data for its Duchenne muscular dystrophy (DMD) gene therapy, Elevidys, has stirred a complex mix of optimism and skepticism. CEO Doug Ingram expressed confidence in the EMBARK trial results, suggesting substantial evidence of effectiveness and potential FDA approval for a broader patient population. His optimism was not shared. The trial missed its primary endpoint, leading to a significant drop in Sarepta's stock value. Despite meeting key secondary endpoints, the results were not statistically significant, raising questions about the therapy's efficacy. Pfizer, with its own DMD gene therapy in development, sees an opportunity in Sarepta's ambiguous results. The situation highlights the influence of patient advocacy groups in drug approvals for diseases with limited treatment options. The FDA's flexibility in accelerated approvals for such conditions is now under the spotlight as Sarepta seeks full approval and label expansion for Elevidys, priced at $3.2 million per treatment.

Our Opinion

The EMBARK trial's inconclusive results reflect the inherent challenges in developing gene therapies for complex diseases like DMD. While the FDA's historical leniency with accelerated approvals offers some hope for Sarepta, the missed primary endpoint cannot be overlooked. The reliance on patient advocacy and the FDA's willingness to consider the totality of evidence are critical factors in this scenario. However, the high cost of Elevidys and the potential for payer-imposed restrictions underscore the need for clear, statistically significant clinical benefits to justify such investments. The outcome of Sarepta's pursuit of full approval will be a pivotal moment for the gene therapy field, setting precedents for regulatory standards and market dynamics.

Your Turn

1. How should the FDA balance the urgent medical needs of DMD patients with the necessity for clear and statistically significant trial results when considering full approval for therapies like Elevidys?
2. What impact will the FDA's decision have on future approval of gene therapies, particularly in diseases with significant unmet needs?
3. Given the high cost of gene therapies, how might payer restrictions influence the accessibility and affordability of these treatments for patients?

Genetic Breakthrough or Biotech Rivalry? Prime Editing's Leap Forward in Primate Trials

The Facts

Prime Medicine has achieved a significant milestone by successfully employing prime editing to modify liver cells in monkeys, as revealed at the European Society of Gene & Cell Therapy meeting. This innovative genetic surgery, akin to a molecular Swiss army knife, was used to target glycogen storage disease type 1b (GSD1b), demonstrating up to 50% correction in hepatocytes—surpassing the 10% correction threshold suggested to alleviate key symptoms. Despite the promising results, there's a cloud of controversy as Tessera Therapeutics, another biotech firm, claims similar achievements with their secretive technology. Prime's approach, which involves lipid-nanoparticles for targeted delivery, was well tolerated in primate trials, with no off-target genetic modifications observed. The company is preparing for clinical trials through a novel "platform" approach, aiming to streamline FDA applications for multiple genetic targets using the same delivery system.

Our Opinion

The advancement in prime editing technology showcased by Prime Medicine is not just a triumph of scientific ingenuity; it represents a paradigm shift in the treatment of genetic diseases. The ability to correct genetic mutations in vivo with high precision and minimal off-target effects could revolutionize the biotech industry, offering hope for conditions previously deemed untreatable. This leap is particularly significant given the potential to streamline the regulatory process, which could accelerate the path to treatment for rare genetic disorders. The underlying competition between Prime and Tessera underscores the fierce race to innovate in the biotech sector, which, while contentious, drives the industry forward at an unprecedented pace.

Your Turn

1. How do you perceive the impact of prime editing technology on the future of genetic disease treatment?
2. In light of the competitive dynamics between Prime Medicine and Tessera Therapeutics, what are your thoughts on the balance between proprietary technology and scientific collaboration?
3. Considering the potential of prime editing, what ethical considerations should be at the forefront as this technology approaches clinical trials

CRISPR's Biggest Milestone: FDA Panel Nods to Exa-cel's Precision in Sickle Cell Therapy

The Facts

FDA advisers have expressed confidence in the thoroughness of CRISPR Therapeutics and Vertex Pharmaceuticals' investigation into off-target effects of their CRISPR-based gene therapy, exa-cel. The Cellular, Tissue, and Gene Therapies Advisory Committee, led by acting chair Taby Ahsan, Ph.D., acknowledged the robustness of the methods used to identify potential off-target edits. This endorsement is pivotal as the FDA's approval decision for exa-cel, aimed at treating sickle cell disease, approaches on December 8, with a subsequent decision for beta thalassemia expected by March 30, 2024. The companies utilized in silico and cellular-based assays, referencing the 1,000 Genomes Project, and narrowed their analysis to 61 datasets specific to their patient population. Despite suggestions for additional in vitro testing, experts deemed the current analysis sufficient. Vertex plans extensive 15-year follow-ups, incorporating real-time gene edit analysis. Clinical evidence is compelling, with 88.9% of patients achieving transfusion independence and 94.1% avoiding vaso-occlusive crises for over a year post-treatment. Market analysts from RBC Capital and J.P. Morgan have emerged from the committee meeting with a reinforced positive outlook on exa-cel's approval chances.

Our Opinion

The advisory committee's satisfaction with the off-target analysis of exa-cel signifies a momentous advance in gene therapy, potentially setting a new standard for CRISPR-based treatments. The meticulous approach to safety, combined with the impressive clinical outcomes, exemplifies the maturation of gene editing technologies and their readiness for clinical application. This progress is crucial for the biotech industry, as it demonstrates a growing confidence in gene therapies' safety and efficacy, potentially leading to a more streamlined approval process for future treatments. The proactive long-term follow-up strategy further reflects a commitment to patient safety and may become a benchmark for gene therapy monitoring, reinforcing the industry's dedication to ethical and responsible innovation.

Your Turn

1. How do you evaluate the balance between the need for exhaustive off-target effect studies and the urgency to approve potentially life-saving therapies?
2. What implications do you foresee for the future of gene therapy if exa-cel is approved, considering the rigorous safety measures and positive clinical outcomes?
3. How should the biotech industry integrate long-term follow-up studies into the development and post-approval phases of gene therapies to ensure patient safety without hindering access to treatments?

AI-Powered CAR-T Cell Therapies: Generate:Biomedicines' Bold Move Against Solid Tumors

The Facts

Generate:Biomedicines, a leading startup in generative AI for protein-based therapies, has joined forces with Roswell Park Comprehensive Cancer Center to develop CAR-T cell therapies aimed at solid tumors, including ovarian cancer. The collaboration, which involves an equal cost and profit-sharing agreement, leverages Generate's AI-driven capability to design and test thousands of CAR proteins rapidly—a process that could significantly shorten the development timeline. With $743 million in funding and a robust drug pipeline, Generate aims to accelerate the transition from concept to Phase I clinical trials within one to two years. The partnership reflects a strategic shift in academic centers seeking to translate research into clinical applications and financial gains, with Roswell Park investing heavily in manufacturing facilities to support such initiatives.

Our Opinion

The strategic alliance between Generate:Biomedicines and Roswell Park represents a cutting-edge approach to one of the most challenging frontiers in cancer therapy: the treatment of solid tumors with CAR-T cells. The application of generative AI to design CAR proteins is a game-changer, potentially reducing years of research to mere months and propelling these therapies into clinical trials at an unprecedented pace. This collaboration is a testament to the transformative power of combining AI with biomedicine, which could lead to breakthroughs in treatments that have long eluded researchers. The success of this venture could catalyze a new era in cancer treatment, where the convergence of technology and biology delivers personalized, effective therapies to patients who currently have limited options.

Your Turn

1. How do you think the integration of AI in the development of CAR-T cell therapies will impact the speed and efficiency of bringing new cancer treatments to market?
2. Considering the unique challenges of treating solid tumors with CAR-T cells, what are the potential implications for patient outcomes if Generate:Biomedicines' approach proves successful?
3. What role do you foresee for academic cancer centers in the future of drug development, especially in light of the move towards partnerships that blend clinical research with commercial aspirations?

Dupixent: Poised to Pioneer Biologic Treatment for COPD Amidst Regeneron's Revenue Rise

The Facts

Regeneron Pharmaceuticals has announced promising interim Phase III study results for Dupixent as a potential treatment for COPD, with the possibility of FDA filing for approval based on an upcoming data review. Dupixent, co-developed with Sanofi and approved for eczema and asthma, has already shown a 33% sales increase to $3.1 billion in Q3, contributing to Regeneron's overall revenue boost of 15% to $3.3 billion. The biologic, which reduced exacerbations by 30% over placebo in the BOREAS study, targets the estimated 300,000 U.S. COPD patients with type 2 inflammation. Analysts project that Dupixent could reach annual sales of over $20 billion by 2027-2028, factoring in the COPD market. Meanwhile, Regeneron's Eylea faces competition from Roche's Vabysmo, leading to an 11% decline in its Q3 sales, despite the successful launch of Eylea HD, which exceeded expectations.

Our Opinion

The interim analysis of Dupixent for COPD treatment represents a significant milestone in respiratory medicine, potentially offering a new biologic option for a condition largely managed by symptomatic treatments. The financial metrics underscore the drug's robust performance and Regeneron's strategic acumen in a competitive biotech landscape. Dupixent's success is not just a win for Regeneron and Sanofi but could be a beacon of hope for COPD patients, who have had limited advancements in therapeutic options. The potential expansion into the COPD market could cement Dupixent's status as a blockbuster drug, demonstrating the power of biologics to transform patient care across various indications.

Your Turn

1. How might Dupixent's entry into the COPD treatment market change the management of the disease and impact patient quality of life?
2. Considering the projected sales growth, what does Dupixent's success tell us about the market potential for biologics in chronic disease treatment?
3. With Eylea facing increased competition, how should Regeneron balance its portfolio to maintain growth and support innovation in its pipeline?

?? Politics & Policy ???

FDA Approval of Amgen’s Stelara Biosimilar Sparks Debate on Medicare Price Negotiations

The Facts

The FDA's approval of Amgen's Wezlana, a biosimilar to Johnson & Johnson’s Stelara, has initiated discussions on its impact on Medicare price negotiations. Stelara, a treatment for inflammatory conditions, is a high-cost drug for Medicare, and under the Inflation Reduction Act, it is subject to price negotiations if lacking competition. The concept of "meaningful competition" is central to determining whether Stelara will remain on the negotiation list, with factors like market share and pricing trends being considered. The launch of Wezlana, however, is delayed until 2025 due to a patent settlement, which may affect the assessment of competition. The industry is scrutinizing the CMS's criteria for "bona fide marketing," seeking clarity on its definition and implications for both biosimilar and branded biologic manufacturers.

Our Opinion

The FDA's approval of Wezlana introduces a critical test case for the implementation of the Inflation Reduction Act's drug price negotiation provisions. The delay in Wezlana's market entry due to patent settlements raises important questions about the strategic behaviors of biopharmaceutical companies and their impact on healthcare costs. The CMS's challenge will be to operationalize the concept of "meaningful competition" in a way that encourages market entry of lower-cost biosimilars while ensuring that the intent of the legislation—to reduce drug costs for Medicare—is fulfilled. This situation underscores the complex interplay between patent law, market dynamics, and healthcare policy, which requires careful navigation to balance innovation incentives with cost containment.

Your Turn

1. How should the CMS define and assess "meaningful competition" in the context of biosimilar market entry to ensure fair price negotiations without stifling innovation?
2. What are the potential consequences for Medicare beneficiaries and the healthcare system if patent settlements delay the launch of lower-cost biosimilars like Wezlana?
3. In what ways can policy makers and industry stakeholders work together to reconcile the objectives of the Inflation Reduction Act with the realities of biopharmaceutical patent settlements and market dynamics?

?? Investment, M&A, and IPOs ??

Novartis' Acquisition of Chinook Therapeutics Shows Promise with Atrasentan's Phase 3 Success

The Facts

Novartis' strategic acquisition of Chinook Therapeutics for $3.2 billion is proving fruitful as top-line phase 3 data indicates that atrasentan, an oral endothelin A receptor antagonist, has significantly improved proteinuria in patients with IgA nephropathy (IgAN). The phase 3 trial, which met its primary endpoint at a 36-week interim analysis, sets the stage for Novartis to seek accelerated FDA approval next year. The long-term kidney function of participants will continue to be monitored over 136 weeks to support a full approval application, with confirmatory endpoint analysis results expected in Q1 2026. This development follows positive phase 3 results for another Novartis IgAN drug, iptacopan, and a second Chinook asset, zigakibart, also in phase 3 trials.

Our Opinion

The success of atrasentan in phase 3 trials is a significant milestone for Novartis and the broader nephrology field. It demonstrates the potential of targeted therapies in treating chronic kidney diseases like IgAN, which have limited treatment options. Novartis' proactive approach in acquiring Chinook Therapeutics and its promising pipeline exemplifies a strategic move to bolster its portfolio in a specialized therapeutic area. The alignment with FDA recommendations to adjust the primary endpoint timing further reflects Novartis' commitment to regulatory compliance and scientific rigor. The continued investment in long-term data collection underscores the importance of not only achieving accelerated approval but also ensuring sustained efficacy and safety for full approval.

Your Turn

1. How does the success of atrasentan impact the competitive landscape for treatments of IgA nephropathy?
2. What are the implications of Novartis' dual-track development of iptacopan and atrasentan for patients and the healthcare system?
3. In light of these developments, how might Novartis' strategy influence the broader biopharmaceutical industry's approach to acquisitions and pipeline development?

Merck KGaA Invests in PARP Inhibitor HRS-1167 to Enhance Cancer Treatment Portfolio

The Facts

Merck KGaA has invested 160 million euros for the rights (excluding China) to HRS-1167, a PARP1 inhibitor developed by Jiangsu Hengrui Pharmaceuticals, with potential milestone payments up to 1.4 billion euros. This move positions Merck KGaA in the competitive PARP inhibitor landscape, currently led by AstraZeneca's Lynparza and GSK's Zejula. HRS-1167 aims to address the hematologic toxicity associated with first-generation PARP inhibitors, which inhibit both PARP1 and PARP2. By focusing on PARP1-specific inhibition, Merck KGaA anticipates a more favorable safety profile, potentially enhancing the suitability of HRS-1167 for combination therapies in cancer treatment. The deal also includes an option on SHR-A1904, an antibody-drug conjugate targeting Claudin18.2, further diversifying Merck's oncology pipeline.

Our Opinion

Merck KGaA's strategic investment in HRS-1167 reflects a calculated risk to capture a share of the lucrative PARP inhibitor market. By targeting PARP1 selectively, they are betting on a differentiated product profile that could offer a competitive advantage over existing therapies. This approach aligns with the industry's trend towards precision medicine, where the goal is to maximize therapeutic efficacy while minimizing adverse effects. The potential to combine HRS-1167 with other DNA damage response targets could lead to more effective cancer treatments, addressing an unmet need in oncology. Additionally, the inclusion of SHR-A1904 in the agreement showcases Merck's commitment to expanding its presence in the ADC space, which is rapidly becoming a cornerstone of targeted cancer therapy.

Your Turn

1. How might the development of a PARP1-specific inhibitor like HRS-1167 change the treatment paradigm for patients with advanced solid tumors?
2. What are the potential implications for the market dynamics of PARP inhibitors with the introduction of a more targeted and potentially less toxic option?
3. Considering the ongoing research into DNA damage response targets, how could Merck KGaA's broader DDR strategy synergize with its latest investment in HRS-1167 and SHR-A1904?

Neumora Therapeutics Expands Neurological Drug Portfolio Amidst Strong Financial Position

The Facts

Neumora Therapeutics, a biotech company specializing in brain diseases, is leveraging its robust financial standing, with a $520 million balance sheet post-IPO, to expand its drug pipeline. The company is actively engaged in discussions to acquire late preclinical or early clinical assets, particularly in psychiatry and neurodegenerative diseases. With a current focus on major depressive disorder, bipolar depression, schizophrenia, Alzheimer’s disease agitation, and an upcoming IND in ALS, Neumora is strategically positioned for growth. CEO Henry Gosebruch, with a notable background in M&A from his tenure at AbbVie and JP Morgan, is steering the company towards becoming a major neuroscience entity. Neumora's key asset, navacaprant, a kappa opioid receptor antagonist, is anticipated to be ready for FDA filing in 2025, with the company considering both partnership opportunities and a solo launch.

Our Opinion

Neumora Therapeutics' strategy to augment its pipeline through strategic acquisitions and partnerships is a prudent approach to solidify its presence in the neuroscience field. The company's financial health, combined with the leadership's expertise in deal-making, positions it well to capitalize on emerging opportunities in both psychiatry and neurodegenerative disease treatment. The focus on navacaprant as a potential treatment for major depressive disorder could fill a significant treatment gap and offer a new mechanism of action compared to existing therapies. Neumora's proactive expansion plans, supported by a strong balance sheet, reflect a forward-thinking approach that could potentially lead to breakthroughs in the treatment of complex brain diseases.

Your Turn

1. How does Neumora Therapeutics’ approach to building its drug pipeline through acquisitions compare to traditional R&D models in the biotech industry?
2. What are the potential benefits and challenges of Neumora's plan to manage a solo launch of navacaprant for major depressive disorder?
3. Given the complexity of brain diseases, how might Neumora's expansion into neurodegenerative diseases complement its existing focus on psychiatric disorders?