AstraZeneca offers some reassurance on China challenges 

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Good morning. We get into more earnings today and an in-depth report on the rise and fall of CRISPR companies — take some time today to read it.

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The collapse of the CRISPR promise

CRISPR gene editing was supposed to revolutionize medicine. Billions of dollars were spent chasing that goal, with ambitions to discover therapies for a range of disease, from cancer to HIV. 

But over the last few years, the industry has suffered a massive downturn. Layoffs have been widespread, affecting over a dozen biotechs. Most stocks of CRISPR companies are down over 80% from their 2021 peak, when low interest rates fueled a gene-editing bubble.

My colleague Jason Mast walks us through how hype, scientific setbacks, and growing investor demands led to where we are today. He spoke with over 75 investors, academics, executives, analysts, and employees, who describe a once-swaggering industry that’s suddenly and deeply humbled.

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Read more.

Lilly’s guidance in line with estimates, while Bristol’s misses

This morning, Eli Lilly provided 2025 guidance that fell in line with analysts’ estimates, a report that investors viewed favorably after previous financial updates had disappointed. Lilly’s stock was up about 1% in pre-market trading.

The company said it expects full year revenue of $58 to $61 billion and adjusted earnings per share of $22.50 to $24.00, both bracketing Wall Street consensus.

Lilly reported $13.5 billion in overall revenue in the fourth quarter, also coming in line with estimates. Its diabetes GLP-1 drug Mounjaro brought in $3.53 billion in sales in the fourth and the sister obesity drug Zepbound brought in $1.91 billion, both slightly lower than estimates.

Meanwhile, Bristol Myers Squibb announced another $2 billion in cost cuts by the end of 2027 and said that sales and earnings for 2025 would fall below analysts’ forecasts. The company’s stock dropped about 4% in pre-market trading.

Last year, the drug giant announced $1.5 billion in cost cuts through the end of 2025. The company is facing the loss of patent expiration on key medicines, including the blood thinner Eliquis and the cancer drugs Revlimid, Pomalyst, Sprycel, and Abraxane.

Bristol said that in 2025, it expects sales of about $45.5 billion and earnings per share excluding special items between $6.55 and $6.85. According to Visible Alpha, analysts on average forecast sales of $46.3 billion and earnings per share of $6.94. The company’s earnings for the fourth quarter beat expectations.

AstraZeneca offers some reassurance on China challenges 

From my colleague Drew Joseph: The ongoing investigations that AstraZeneca and its employees have been facing in China have been acting as a drag on the company’s share price, even as investors remain optimistic about the firm’s pipeline and outlook. 

But in an update today tied to earnings, AstraZeneca provided some reassurance that whatever challenges it’s dealing with in China, they might be resolved without a major headache. In one investigation over allegations of illegal drug importation, AstraZeneca said that it had received notice from Shenzhen officials that there were suspected unpaid importation taxes amounting to $900,000, which the company believes are tied to its cancer drugs Imfinzi and Imjudo. If the company is found liable, it may have to pay a fine of only up to $4.5 million. 

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At an event with reporters in London, CEO Pascal Soriot said it was possible a similar issue might be raised with Enhertu imports, which he said could be “potentially a bit bigger, but not that much bigger” than the tax issues with the other drugs. But he said the company was waiting for more information from Chinese authorities and that it was cooperating with the investigation. 

Company shares were up more than 4% midday in London, as investors reacted both to the update in China and the report showing sales and earnings per share outpaced analysts’ forecasts for 2024. 

“We think this update suggests that the magnitude of the fines may [be] lower than many investors feared,” analysts at Leerink Partners wrote in a note. 

AstraZeneca did not have much of an update on Leon Wang, its former top executive in China who is now on leave as he remains in detention. Soriot said the company has not been allowed to speak to him.

Pfizer names a new cancer drug boss

From my colleague Matt Herper: Pfizer has named Jeffrey Legos as its new chief oncology officer, reporting to CSO Chris Boshoff. Legos comes to Pfizer from Novartis, where he was global head of oncology and hematology development. He joined Novartis in 2015 from GSK, where he was the development leader in oncology.

Pfizer has made cancer drugs central to its plans for growth and its pitch to investors, having bought the oncology-focused biotech Seagen for $32 billion.

Initially, the role of chief oncology officer was created for Boshoff, and was meant to combine oversight of both cancer drug research and development and marketing under one role. Boshoff was promoted to be Pfizer’s chief scientific officer in November, replacing Mikael Dolsten, who had been head of R&D for 15 years. Roger Dansey, who took on the oncology role on an interim basis, will retire.

Personalized vaccine shows potential in kidney cancer

Nine patients with advanced kidney cancer who received an experimental vaccine tailored to their tumors’ specific mutations mounted an immune response to their disease and remained cancer-free for three years, a Phase 1 trial showed.

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The vaccine, developed by scientists at Dana-Farber Cancer Institute and the Yale Cancer Center, is based on peptides, while other cancer vaccines employ mRNA to rev up an immune response.

The new findings demonstrate the potential of personalized vaccines to change the course of certain cancer types, but larger, longer trials are needed to confirm this approach.

Read more from STAT’s Liz Cooney.

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