This Week in Biotech #26
Catch up on the latest biotech breakthroughs and upcoming trends (Nov 5-7).
Welcome to the Friday edition of This Week in Biotech by Biotech Blueprint!
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🗳️ WHAT DO THE U.S. ELECTION RESULTS MEAN FOR BIOTECH & SCIENCE?
With Donald Trump’s return to the White House following the 2024 election, the biotech and pharmaceutical industries are preparing for potential shifts in policy that may impact regulation and business dynamics. Given the strong feelings surrounding this election, I will aim to neutrally discuss what these changes could mean for the biotech landscape, examining the positive, negative and mixed outcomes ahead.
Mixed
In the past several years there has been a bipartisan push to reduce drug pricing, albeit with very different approaches employed by each party. Trump’s administration has historically focused on reducing drug prices—a central campaign promise and a recurring theme in his policy discussions. This time around, he has proposed ending “global freeloading,” where other countries pay less for U.S.-developed drugs. By prioritizing a “best-price” policy, Trump aims to leverage U.S. purchasing power to demand lower domestic prices while encouraging other countries to bear a fairer share of pharmaceutical costs. The policies could benefit U.S. consumers but may reduce biotech margins potentially reducing reinvestment in research and development, which in the long run may have unintended consequences.
Experts also anticipate a likely review of pharmacy benefit managers (PBMs), intermediaries that manage prescription drug benefits for insurers. Trump has voiced criticism of PBMs, which some view as obstructing fair pricing and transparency. Under his leadership, policies to increase PBM accountability or even regulate their practices could gain momentum. However, the Trump administration’s stance will likely be less restrictive than the potential Harris administration would have been. As a result, the developments are positive for companies which own the largest PBMs such as United Health Group (UNH) and CVS. However, how that relates to Biotech is unclear. Arguments can be made either way regarding how increased PBM regulation could benefit or hurt biotech companies.
Positives
Trump’s criticism of the Inflation Reduction Act could influence the industry’s regulatory landscape. Unlike Biden, who supports expanding Medicare’s drug price negotiation program, Trump is likely to instead focus on transparent pricing regulation and possibly reduce bureaucratic oversight, which some believe may simplify drug access and encourage innovation in rare disease research and high-cost drug development. These policies may bode favorable for biotech as more competitive Medicare pricing inevitably would lead to lower margins for drug companies.
Trump’s administration could pursue deregulatory strategies within the FDA, similar to his first term’s “Right to Try” initiative, which allowed terminally ill patients access to experimental drugs without full FDA approval. Streamlining the drug approval process may be a focus again, potentially accelerating time-to-market for new treatments. This would align with the administration’s broader goal of fostering a more innovation-friendly environment while balancing safety and patient needs.
In a broader economic context, Trump’s proposed tax cuts and deregulation could stimulate mergers and acquisitions within the biotech sector. Analysts suggest that a less interventionist FTC, combined with lower corporate tax rates, may drive consolidation, leading companies to pursue larger, potentially innovative projects that require extensive capital and regulatory support.
Negatives
In terms of leadership appointments, Trump’s potential selection of Robert F. Kennedy Jr. raises concerns, particularly regarding Kennedy’s controversial stance on vaccines and his embrace of conspiracy theories. Kennedy, who has long promoted misinformation about vaccines, including unfounded claims linking them to autism, is a deeply polarizing figure. At a recent rally, Trump stated that if re-elected, he would allow Kennedy to “go wild on health” and reshape pharmaceutical policies. The prospect of giving someone with such a contentious and scientifically unsupported viewpoint significant influence over the direction of health policy could undermine decades of progress in evidence-based medicine.
The Trump administration’s approach to science policy and regulation could also potentially hinder scientific progress by reducing funding for critical research areas. For example, potential cuts to agencies like the NIH under his administration may limit resources available for public health research. Trump administration’s restrictions on fetal tissue research and emphasis on promoting certain ideologies over established scientific consensus disrupted progress in areas such as stem cell research and reproductive health. This environment, combined with downplaying expert guidance during crises like the COVID-19 pandemic, highlights a pattern that places regulatory rollback and economic considerations above scientific advancement and public health.
MARKET UPDATES
🔹 Following Trump’s win, financial markets have shown a strong, positive response, which is typical of a republican victory. The S&P 500 and other major indices surged, with the S&P 500 gaining as much as 2.2% on the day after the election, while cryptocurrency markets also reacted positively, with Bitcoin reaching record highs. The U.S. dollar strengthened against major currencies, including the euro, pound, and yen, appreciating by approximately 1%.
The biotech industry similarly experienced gains, fueled by investor optimism around potential policy shifts. Markets were buoyed by expectations of tax cuts, reduced regulatory pressures, and a pro-business climate, which could encourage investment in sectors such as big pharma.
🔹 On Nov. 6, Tango Therapeutics (TNGX) reported its Q3 2024 financial results, disclosing a net loss that widened from last year, driven largely by increased R&D expenses as the company advances its pipeline. Tango also announced it was discontinuing the TNG908 clinical trial for glioblastoma because the drug could not achieve the necessary brain penetration for effective treatment. Instead, the company is prioritizing its resources toward TNG462, a PRMT5 inhibitor showing promising efficacy in other solid tumors, and TNG456, a next-generation brain-penetrant PRMT5 inhibitor that will begin trials in early 2025. Despite Tango’s cash reserves of $293M and a projected cash runway into Q3 2026, these developments triggered a sharp 38% decline in the stock price.
BIOTECH NEWS
🔹 On Nov. 5, Massachusetts voters rejected a proposal to legalize natural psychedelic substances, including psilocybin mushrooms, for adults over 21. The proposal aimed to allow licensed facilities to offer these substances for therapeutic use and permit individuals to grow small amounts at home. Supporters argued that psychedelics could treat conditions like depression and PTSD, while opponents, including medical groups, raised concerns about potential harms, particularly for those at risk of mental health issues, and the creation of a black market. This rejection follows similar legalization efforts in Oregon and Colorado.
🔹 Sarepta Therapeutics reported strong Q3 2024 financials, with total revenue up 41% year-over-year to $467.2M, driven by Elevidys sales and royalties. The company discontinued its Duchenne therapy SRP-5051 (vesleteplirsen) due to an unfavorable risk-benefit profile, FDA feedback, and advances in alternative therapies. Sarepta is now focusing on its gene therapy pipeline, including SRP-9001, which showed promising long-term muscle stability and safety data in Duchenne patients. Additionally, Sarepta is advancing its Limb-girdle muscular dystrophy programs, expecting to submit a biologics license application by mid-2025.
🔹 Moderna provided updates on its RSV vaccine, mRESVIA, reporting $10M in sales during the Q3 2024. Although sales were lower than anticipated, the shortfall was attributed to the vaccine’s later approval and recommendation, which came after many customer orders had already been placed for the season. Moderna’s RSV vaccine has now been approved in the U.S., European Union, and additional countries, indicating expansion into international markets. The company shared positive phase 3 data for the RSV vaccine in high-risk adults aged 18-59, which demonstrated efficacy and safety, and plans to file for approval in 2024.
🔹 Aurinia Pharmaceuticals announced a strategic restructuring plan as part of its Q3 2024 financial results. The restructuring includes a 45% reduction in the company’s workforce, focusing on streamlining operations and sharpening its emphasis on Lupkynis (for lupus nephritis) and the development of its pipeline product, AUR200. This move is expected to result in annualized savings of more than $40M in operating expenses. This reduction follows earlier cost-cutting measures in the first quarter of 2024, including a decrease in headcount and related expenses, particularly within R&D and SG&A.
🔹 Genmab reported strong financial and operational growth for the first nine months of 2024, with a 29% revenue increase, primarily due to rising royalties from Darzalex and Kesimpta. The European Commission granted conditional approval for Tepkinly (epcoritamab) for treating relapsed or refractory follicular lymphoma, marking a key regulatory success. Genmab also took sole responsibility for developing and potentially commercializing acasunlimab, another promising therapy in their pipeline. Operating expenses rose by 29%, driven by product pipeline expansion and increased R&D costs, including expenses for ProfoundBio’s Rina-S.
🔹 Denali Therapeutics reported a net loss of $107.2M for Q3 2024, reflecting increased R&D investments in its clinical-stage programs. Key updates include plans to submit a biologics license application for tividenofusp alfa (DNL310) for MPS II in early 2025, supported by positive FDA feedback and promising phase 1/2 data. The company is expanding its oligonucleotide and antibody platforms for Alzheimer’s and Parkinson’s diseases.
🔹 Mustang Bio announced that the FDA granted Orphan Drug Designation for MB-108, an HSV-1 oncolytic virus, for treating malignant glioma, a rare brain cancer. This designation offers incentives like tax credits and seven years of market exclusivity if approved, encouraging Mustang’s development efforts. MB-108 is currently in a phase 1 trial for recurrent glioblastoma and shows promise as it is well tolerated and effective. Mustang is exploring MB-108 in combination with MB-101, a CAR-T cell therapy, which could be the first trial of this type in malignant glioma. Preclinical studies suggest MB-108 enhances the immune response in tumors, potentially improving MB-101’s efficacy by transforming the tumor environment to allow better T-cell infiltration and activation. Mustang plans to further develop this combination (designated MB-109) but may need additional funding or a strategic partner to advance trials.
🔹 Avid Bioservices, a biologics contract development and manufacturing organization, has agreed to be acquired by GHO Capital Partners and Ampersand Capital Partners in an all-cash deal worth approximately $1.1B. Under the agreement, Avid shareholders will receive $12.50 per share, a 13.8% premium over its last closing price. The acquisition, expected to complete in early 2025, aims to leverage GHO and Ampersand’s healthcare expertise to expand Avid’s market reach, services, and capacity. Avid’s board unanimously approved the deal, and once completed, the company will become privately held.
🔹 On Nov. 7, Altimmune announced it has successfully completed an end-of-phase 2 meeting with the FDA for its obesity drug candidate, pemvidutide, and has aligned on a phase 3 trial design. This pivotal phase 3 program will test pemvidutide’s efficacy and safety across four clinical trials involving approximately 5,000 participants, targeting obesity and related health conditions like high cholesterol, liver fat, and sarcopenia. Pemvidutide is a GLP-1/glucagon dual agonist, showing promise in reducing weight, liver fat, and LDL cholesterol with lean mass preservation.
🔹 On Nov. 6, Plus Therapeutics partnered with SpectronRx to manufacture its radiotherapeutic, Rhenium (186Re) Obisbemeda, for CNS cancer treatment. This Manufacturing Services Agreement aims to bolster Plus Therapeutics’ supply chain as it prepares for late-stage clinical trials and future commercial demand. SpectronRx, a prominent radiopharmaceutical manufacturer with extensive production capacity, will provide clinical and commercial-scale production of Rhenium (186Re) Obisbemeda. The partnership is designed to ensure supply chain stability and meet anticipated product demand, reinforcing Plus’s readiness for its clinical programs targeting glioblastoma and leptomeningeal metastases.
ON THE HORIZON
🔹 Nov. 2024 FDA PDUFAs:
Nov. 4: Journey Medical is expecting decision on DFD-29, a modified-release capsule of minocycline hydrochloride, aimed at treating inflammatory lesions and erythema in adults with rosacea. — APPROVED on Nov. 4 ✅
Nov. 13: PTC Therapeutics is awaiting FDA decision on its biologics license application for Upstaza (eladocagene exuparvovec), a gene therapy for AADC deficiency. The application has been granted Priority Review.
Nov. 29: BridgeBio Pharma’s acoramidis, an investigational treatment for transthyretin amyloid cardiomyopathy, has a set target action date of Nov. 29. The FDA has indicated that no advisory committee meeting is planned for this application.
Nov. 29: Jazz Pharmaceuticals is awaiting FDA’s decision on zanidatamab, a bispecific antibody targeting HER2, for the treatment of metastatic HER2-positive biliary tract cancer. The FDA has granted the application priority review.
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DISCLAIMER: This content is for informational purposes only. It should not be taken as legal, tax, investment, financial, or other advice. The views expressed here are my own and do not reflect the opinions of any company or institution.
DISCLOSURE: I have no business relationships with any company mentioned in this article.