This Week in Biotech #35
Catch up on the latest biotech breakthroughs and upcoming trends (Jan 10-16).
Welcome to This Week in Biotech by Biotech Blueprint!
THIS WEEK’S KEY TAKEAWAYS 🔑
As anticipated, several high profile mergers were announced at the J. P. Morgan conference this week in San Francisco. This week many companies are also reporting their Q4 2024 and 2024 total earnings and there were both disappointing and good results.
Here is a quick recap:
Merger mania: Biogen made an unsolicited bid for Sage Therapeutics, Eli Lilly acquired Scorpion Therapeutics’ cancer therapy STX-478 for up to $2.5B, GSK snagged IDRx for its gastrointestinal tumor drug for up to $1.15B, and J&J made a major move to bolster its neuroscience portfolio with the acquisition of Intra-Cellular Therapies for $14.6B.
Moderna’s struggle: Moderna’s stock plummeted after the company announced disappointing 2025 sales guidance. The shift from pandemic to endemic Covid demand is hitting hard, raising concerns about Moderna’s near-term profitability.
Atara’s setback: Atara faced a major setback with the FDA’s rejection of its Ebvallo therapy. While the rejection was related to manufacturing issues and not clinical data, it highlights the regulatory hurdles companies face. Atara is now exploring strategic alternatives, including potential mergers or asset sales.
Lilly’s diabetes dominance challenged: Despite strong sales of its diabetes and obesity drugs Mounjaro and Zepbound, Eli Lilly had to reduce its 2024 revenue forecast. This underscores the increasingly competitive landscape in this therapeutic area.
Breakthrough in Huntington’s Disease: A study published yesterday in Cell revealed that the genetic mutation responsible for Huntington’s disease doesn’t directly cause harm but slowly morphs over time. This discovery opens up new avenues for developing therapies that could delay or even prevent the disease.
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MARKET UPDATES
🔹 Sage Therapeutics stock surged 40% after Biogen offered to buy the remaining shares it doesn’t already own for $7.22 per share. Biogen currently owns a 10.2% stake in Sage. The unsolicited offer represents a 30% premium over Sage’s closing price on Friday. Sage’s board will evaluate the proposal to determine the best course of action for shareholders.
🔹 On Jan. 13, Moderna’s stock plummeted 21% after the company announced disappointing sales guidance for 2025. While Moderna ended 2024 with $3B in sales, it projects 2025 sales to fall significantly to $1.5B to $2.5B. This decline reflects the shift from pandemic to endemic demand for COVID-19 vaccines. Despite planned cost cuts, analysts are concerned about Moderna’s profitability in the coming years, with some not expecting a return to profitability until 2029.
🔹 Despite a recent stock decline, Moderna remained the most shorted healthcare stock in the S&P 500 in December 2024. Short interest in the biotech sector overall decreased slightly. J&J and Eli Lilly were the least shorted healthcare stocks.
🔹 Eli Lilly is acquiring Scorpion Therapeutics’ experimental cancer therapy, STX-478, for up to $2.5B. STX-478 is an oral therapy currently in early-stage trials for breast cancer and other solid tumors. As part of the deal, Scorpion will spin out its non-PI3K pipeline assets into a new company, with Lilly holding a minority stake.
🔹 Morgan Stanley upgraded Gilead to Overweight from Equal weight, citing the potential of its HIV drug lenacapavir. The bank believes lenacapavir could be a significant growth driver for Gilead, particularly in the HIV prevention market. They raised their price target for Gilead’s stock to $113 from $87.
BIOTECH NEWS
🔹 Eli Lilly announced that the FDA approved Omvoh (mirikizumab) for moderately to severely active Crohn’s disease in adults. Already approved for ulcerative colitis in 2023, Omvoh targets the IL-23p19 protein to reduce intestinal inflammation. In the phase 3 VIVID-1 trial, Omvoh showed significant improvement, with 53% of patients achieving clinical remission and 46% showing endoscopic healing at one year. Nearly 90% of those in remission at one year maintained it with two years of treatment. Common side effects include upper respiratory infections and joint pain.
🔹 On Jan. 16, Atara Biotherapeutics’s Ebvallo (tabelecleucel) was rejected by the FDA, related to issues found during an inspection of a third-party manufacturing facility. The complete response letter did not raise concerns over clinical efficacy or safety data. Atara is working with the FDA and its partners to resolve the issues and plans to resubmit the application within six months. The company is exploring strategic alternatives, including potential mergers or asset sales, and has secured a non-binding term sheet with Redmile Group for up to $15M in funding. Despite these efforts, Atara’s stock is down 41%. As of year-end 2024, Atara reported approximately $43M in cash, and if additional funding isn’t secured by Q1 2025, it plans to scale back its CAR-T programs and focus on Ebvallo.
🔹 At the J. P. Morgan conference this week, Eli Lilly announced a $400M reduction in its 2024 revenue forecast, primarily due to unexpected market dynamics in the diabetes and obesity drug market. Despite strong sales of its incretin-based drugs Mounjaro and Zepbound, the company missed its October 2024 guidance. Lilly’s CEO acknowledged the challenges of predicting growth in this rapidly evolving market, which was impacted by drug shortages and competition from compounding pharmacies. The company plans to significantly increase production in 2025 to meet the surging demand for its GLP-1 receptor agonist therapies. The company stock dipped 7% following the announcement.
🔹 GSK has agreed to acquire IDRx, a privately held clinical-stage biopharmaceutical company, for up to $1.15B. The deal includes IDRx-42, a promising drug candidate for the treatment of gastrointestinal stromal tumors, a rare type of cancer. This acquisition strengthens GSK’s oncology portfolio and aligns with its strategy of investing in areas with high unmet medical need. The deal is expected to close later this year, pending regulatory approvals. This move also reflects GSK’s broader efforts to expand its presence in the cancer treatment market, particularly as its vaccine business faces challenges.
🔹 J&J is acquiring Intra-Cellular Therapies for $14.6B, a move that significantly bolsters its neuroscience portfolio. The deal includes Caplyta, a treatment for schizophrenia and bipolar depression, which has the potential to become a standard of care for major depressive disorder. This acquisition is J&J’s largest in over two years and signals a strategic focus on expanding its presence in the neuroscience market. The deal is expected to close later this year and contribute to J&J’s long-term sales growth, exceeding analyst expectations. This acquisition also marks a potential trend of increased M&A activity in the pharmaceutical sector in 2025.
🔹 IGM Biosciences saw its stock plummet by 68% on Jan. 10 after announcing it was halting development of its key autoimmune disease drug programs due to poor clinical trial results. The company is also drastically cutting its workforce by 73% in a bid to save money while it explores strategic options for its future.
🔹 Former Tesla board member and an ally of Elon Musk, Antonio Gracias, is seeking to take control of Lykos Therapeutics, a psychedelic drugmaker developing an ecstasy-based treatment for PTSD. Gracias’s plan involves a significant financial investment in exchange for a controlling stake in the company. This move comes amidst renewed optimism in the psychedelic sector due to RFK Jr.’s favorable stance on the medical use of psychedelics. Lykos requires financial support to continue its efforts to gain FDA approval for its treatment after an initial rejection. Gracias’s proposal is facing competition from Lykos’s main shareholder, who aims to distance the company from its non-profit origins. The Lykos board will meet to decide on the company’s future direction.
CLINICAL TRIAL UPDATES
🔹 Boehringer Ingelheim announced that its phase 3 CONNEX program for iclepertin (BI 425809) in cognitive impairment due to schizophrenia failed to meet primary and secondary endpoints. No significant improvements in cognition or functioning were observed compared to placebo, though iclepertin was well tolerated. The program, involving 1,840 participants, has been discontinued.
🔹 On Jan. 15, Keros Therapeutics announced that it has voluntarily halted all dosing in its phase 2 TROPOS trial of cibotercept in combination with background therapy in patients with PAH due to new observations of pericardial effusion adverse events. The company will continue to monitor patients enrolled in the trial and expects to present topline data from all treatment arms in Q2 2025.
🔹 On Jan. 13, Regeneron announced positive results from its phase 3 C-POST trial, where Libtayo significantly improved disease-free survival in patients with high-risk cutaneous squamous cell carcinoma after surgery. Libtayo is the first immunotherapy to show a statistically significant benefit in this setting, reducing the risk of disease recurrence or death by 68% compared to placebo. Regeneron plans to submit these results to the FDA in the first half of 2025.
🔹 On Jan. 10, Dyne Therapeutics announced positive clinical data for its myotonic dystrophy type 1 drug, DYNE-101, showing improvements in muscle function and other key measures. Based on these results, the company plans to initiate a trial with the goal of seeking accelerated approval in the U.S. in the first half of 2026. DYNE-101 is designed to target muscle tissue and reduce the toxic RNA that causes the disease. This news is particularly encouraging for DM1 patients, as there are currently no approved disease-modifying therapies available. Dyne’s (DYN) stock is 31% down since the announcement.
SCIENCE SPOTLIGHT
🔹 A study published today in Cell has revolutionized our understanding of Huntington’s disease. Scientists at the Broad Institute, Harvard Medical School, and McLean Hospital have discovered that the inherited genetic mutation responsible for the disease doesn’t directly cause harm. Instead, it slowly morphs over decades, eventually reaching a critical point where it becomes toxic to brain cells. This finding explains the delayed onset of symptoms and has significant implications for developing new therapies. Researchers are now focusing on strategies to slow or prevent this genetic expansion, potentially delaying or even preventing Huntington’s disease altogether. This discovery could also impact our understanding and treatment of other neurodegenerative disorders caused by similar genetic mutations.
ON THE HORIZON
🔹 January 2025 FDA PDUFAs:
Jan. 15: Atara Bio’s tab-cel, a potential treatment for a rare complication affecting transplant patients, is awaiting FDA approval by January 15th. If approved, it would be the first therapy in the U.S. for this condition. The drug has shown promising results in clinical trials and has already been approved in Europe. ❌ REJECTED
Jan. 17: The FDA has delayed its decision on Amgen’s application for sotorasib plus panitumumab in patients with KRAS G12C-mutated metastatic colorectal cancer. The target action date moved from Dec. 24, 2024 to Jan. 17, 2025. This delay allows the FDA more time to review recently submitted data. The application is based on the CodeBreaK 300 trial, which showed the combination improved progression-free survival compared to standard therapies. ✅ APPROVED
Jan. 29: Stealth BioTherapeutics is awaiting decision on its New Drug Application for elamipretide, a potential treatment for Barth syndrome. If approved, elamipretide would be the first therapy available for this rare genetic condition, which causes severe heart and muscle problems.
Jan. 29: AstraZeneca and Daiichi Sankyo have submitted a new application for accelerated approval of datopotamab deruxtecan in the U.S. for patients with previously treated advanced EGFR-mutated non-small cell lung cancer. This new application is based on results from the TROPION-Lung05 phase 2 trial and replaces a previous application that has been withdrawn. The companies made this decision based on feedback from the FDA, suggesting a more targeted approach for this specific lung cancer subtype.
Jan. 30: Vertex also awaits an FDA decision on suzetrigine, a potential non-opioid pain medication, by Jan. 30. If approved, suzetrigine would be the first new pain drug in over two decades, offering a non-addictive option for acute pain.
Jan. 31: Axsome Therapeutics expects an FDA decision by Jan. 31 on its resubmitted application for AXS-07, a new oral treatment for acute migraine. The drug offers a potential non-opioid option for migraine relief by inhibiting CGRP release and providing sustained pain freedom. If approved, AXS-07 would be a valuable addition to Axsome’s growing portfolio of neurological treatments.
Have a wonderful rest of your week and thanks for reading Biotech Blueprint!
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