This Week in Biotech #30
Catch up on the latest biotech breakthroughs and upcoming trends (Nov 23-28).
Welcome to This Week in Biotech by Biotech Blueprint!
THIS WEEK’S KEY TAKEAWAYS 🔑
This Thanksgiving week in biotech and healthcare was quieter but far from sleepy. Applied Therapeutics and Outlook Therapeutics both experienced severe stock drops after regulatory setbacks. Applied Therapeutics received a complete response letter from the FDA for govorestat, a galactosemia treatment, causing an 85% stock plunge. Similarly, Outlook Therapeutics saw over a 65% stock decline after its wet AMD clinical trial failed to meet primary endpoints.
Neurodegenerative research also continued to face challenges. Alector’s Alzheimer’s treatment and PTC Therapeutics’ ALS drug both failed to demonstrate significant efficacy, underlining the tremendous difficulty in developing treatments for these devastating conditions. CervoMed’s FDA orphan drug designation for frontotemporal dementia treatment offers a glimmer of hope in this challenging field.
The most intriguing development might be Roche’s $1.5B acquisition of Poseida Therapeutics, signaling a continued bet on genetic medicine. This move suggests that despite repeated setbacks in complex treatments, big pharma remains convinced that genetic approaches hold promise.
The public health landscape saw potentially significant implications with Donald Trump’s proposed NIH and FDA leadership picks. Jay Bhattacharya and Marty Makary, known for their controversial COVID-19 stance, could represent a radical shift in federal health policy if appointed. The potential politicization of health institutions adds another layer of complexity to the healthcare landscape.
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MARKET UPDATES
🔹 On Nov. 27, Applied Therapeutics announced that the FDA issued a complete response letter for its new drug application for govorestat, a treatment for classic galactosemia. The FDA cited deficiencies in the clinical application, preventing approval in its current form. The company plans to address the FDA’s concerns and potentially resubmit the application. Following this news, Applied Therapeutics’ stock plunged 85% in after-hours trading.
🔹 On Nov. 27, Outlook Therapeutics (OTLK) announced preliminary topline results from its NORSE EIGHT clinical trial for ONS-5010, its ophthalmic formulation of bevacizumab for treating wet AMD. The trial failed to meet its primary non-inferiority endpoint at week 8, though the drug showed some improvement in vision and a favorable safety profile. The company plans to analyze final efficacy data, expected in January 2025, and resubmit its biologics license application to the FDA in Q1 2025. Despite ongoing efforts to launch in the EU and UK markets, the announcement led to an over 65% plunge in Outlook’s stock price.
🔹 On Nov. 26, RBC Capital initiated coverage of Dyne Therapeutics (DYN) and Avidity Biosciences (RNA) with outperform ratings, citing their innovative approaches to treating myotonic dystrophy type 1 (DM1). While Avidity is ahead with three derisked assets and a promising phase 3 trial, Dyne’s Fab-ASO conjugate drug has potential for accelerated approval and higher efficacy. RBC set price targets of $67 for Avidity and $45 for Dyne, noting both companies could succeed in the DM1 space despite competition.
🔹 Amgen’s investigational treatment for obesity, MariTide (formerly AMG 133), demonstrated promising results in a phase 2 trial, achieving significant weight loss over 52 weeks. Non-diabetic participants experienced an average weight loss of ~20%, with no evidence of plateauing, while those with type 2 diabetes saw reductions of ~17%, along with HbA1C improvements of up to 2.2 percentage points. The treatment also improved cardiometabolic health markers, including blood pressure, triglycerides, and hs-CRP, without affecting bone density or increasing free fatty acids. The most common side effects were mild, transient gastrointestinal issues that resolved with dose escalation, leading to a low discontinuation rate of under 8%. Following the announcement, Amgen’s stock fell 8%.
🔹 Poseida Therapeutics (PSTX) announced it will be acquired by Roche for up to $13.00 per share. The deal includes $9.00 per share in cash at closing and a non-tradeable contingent value right of up to $4.00 per share, contingent on achieving specific milestones. The total equity value of the transaction could reach $1.5B. The acquisition, unanimously approved by Poseida’s board of directors, will enhance Roche’s capabilities in allogeneic cell therapy and genetic medicines, particularly in CAR-T therapies for hematologic cancers, solid tumors, and autoimmune diseases. Following the announcement, Poseida’s stock surged 240%.
BIOTECH NEWS
🔹 The FDA is investigating the blood cancer risks associated with bluebird bio’s gene therapy, Skysona, which is used to treat cerebral adrenoleukodystrophy (CALD). Approved in 2022 and priced at $3M, Skysona already includes warnings for blood cancers in its prescribing information. The FDA advises patients to consider alternatives like stem cell transplants before opting for Skysona. Bluebird stated that the FDA’s review was not triggered by new safety incidents. Analysts believe the FDA will likely weigh the therapy’s risks against its benefits given CALD’s poor prognosis. Bluebird, facing financial challenges, continues to develop other gene therapies.
🔹 On Nov. 27, CervoMed announced FDA orphan drug designation for its investigational drug, neflamapimod, to treat frontotemporal dementia (FTD), a rare and untreatable neurodegenerative disease. The designation provides development incentives and highlights unmet medical needs. Neflamapimod, an oral drug targeting synaptic dysfunction, showed promise in earlier trials for dementia with Lewy bodies (DLB). A phase 2b DLB trial is underway, with results expected in December 2024, and a phase 3 trial planned for mid-2025 if successful. FTD affects 50,000–60,000 people in the U.S., with no current FDA-approved treatments.
🔹 On Nov. 26, PTC Therapeutics announced the results of its phase 2 CardinALS trial evaluating utreloxastat in patients with amyotrophic lateral sclerosis (ALS). Unfortunately, the trial did not meet its primary endpoint of slowing disease progression, as measured by ALSFRS-R scores and mortality, nor did it achieve statistical significance for secondary efficacy endpoints. Although modest numerical benefits were observed, the results (p = 0.52) were not sufficient to support efficacy. The therapy was found to be safe and well-tolerated, but due to the lack of demonstrated efficacy and biomarker improvements, PTC has decided not to continue its development. CEO Matthew Klein expressed gratitude to participants while acknowledging the disappointment in failing to address ALS’s significant unmet medical needs.
CLINICAL TRIAL UPDATES
🔹 On Nov. 25, Alector announced results from its phase 2 INVOKE-2 trial evaluating AL002 for early Alzheimer’s disease, revealing that while the treatment achieved target engagement and microglial activation, it failed to meet the primary endpoint of slowing clinical progression and showed no benefits on secondary clinical endpoints, Alzheimer’s biomarkers, or brain amyloid levels. Additionally, MRI changes resembling amyloid-related imaging abnormalities and infusion-related reactions were observed in participants treated with AL002. Based on these findings, Alector is discontinuing the long-term extension study but remains committed to advancing its progranulin-elevating programs and preclinical candidates targeting neurodegenerative diseases. Despite reducing its workforce by 17% to align resources, Alector maintains a strong financial position, with $457.2M, providing runway through 2026.
🔹 On Nov. 25, Biohaven provided an update on the development of taldefgrobep alfa, a treatment targeting spinal muscular atrophy (SMA) and obesity. In the RESILIENT SMA trial, taldefgrobep showed clinically meaningful motor function improvements at all timepoints on the MFM-32 scale but did not achieve statistical significance on the primary outcome at week 48. Subgroup analyses revealed stronger efficacy in certain populations, particularly Caucasians with measurable baseline myostatin levels. Key findings include improved body composition, with reductions in fat mass and increases in lean muscle mass and bone density, suggesting potential applications for obesity treatment. Taldefgrobep demonstrated robust target engagement by reducing myostatin levels below detection and was well-tolerated, with no treatment-related serious adverse events and 97% of participants continuing into the extension phase. Biohaven plans to engage with the FDA to discuss the trial results and will present data at a future scientific meeting. The company intends to advance a phase 2 study for obesity in late 2024.
PUBLIC HEALTH SPOTLIGHT
🔹 Donald Trump has selected Stanford academic Jay Bhattacharya and Johns Hopkins physician Marty Makary to lead the NIH and the FDA, respectively, in a potential future administration. Both Bhattacharya and Makary gained prominence during the COVID-19 pandemic for their critical stance on lockdown measures, mask mandates, and vaccine policies, positioning themselves as vocal opponents of the mainstream pandemic response. Their potential appointments would signal a significant shift in federal health policy, suggesting Trump aims to install leaders who challenged the public health approach during the coronavirus crisis.
🔹 The CDC has confirmed the first U.S. child case of avian H5N1 influenza (bird flu) in California. The child experienced mild symptoms, recovered after receiving flu antivirals, and later tested negative for H5N1 but positive for common respiratory viruses. Household members tested negative for H5N1 but shared similar respiratory infections. There is no evidence of person-to-person H5N1 transmission. This case is part of ongoing CDC surveillance amidst widespread H5N1 outbreaks in California’s wild birds, poultry, and dairy herds since 2022. To date, 55 human H5 cases have been reported in the U.S. in 2024, with 29 in California. The CDC assesses the general public’s risk as low but advises caution around sick or dead animals. Further updates will follow as investigations continue.
🔹 Mpox, caused by two viral clades (clade I and clade II) with several subclades, continues to circulate globally. Clade I outbreaks are concentrated in Central and Eastern Africa, spreading through contact with infected wild animals, household transmission, or intimate contact, with travel-associated cases now reported in Canada, Germany, India, Sweden, Thailand, the UK, Zambia, and Zimbabwe. Clade II, particularly subclade IIb, has caused over 100,000 cases across 122 countries but circulates at low levels. In the U.S., the first clade I mpox case was reported on Nov. 15, linked to travel from Africa, with the patient recovering and no additional cases identified. Clade II cases remain limited, and modeling suggests that household transmission of clade I is unlikely to cause large outbreaks in the U.S., given better hygiene, smaller households, and access to medical care compared to endemic regions. The JYNNEOS vaccine, FDA-approved for all clades, and enhanced surveillance by the CDC and global partners aim to mitigate risks, particularly in non-endemic areas.
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