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Good morning. This is my last newsletter this year. Meghana will be writing the one tomorrow, and then we will be off for the next two weeks. Wishing everyone happy holidays and I’ll see you in the new year.
Vertex pain drug disappoints in sciatica study
Vertex Pharmaceuticals said this morning that its closely watched drug, suzetrigine, reduced pain compared to baseline but did not outperform a placebo in a Phase 2 study, raising doubts about the medicine’s potential in the lucrative market for treating chronic pain.
The company said in a press release that it’s still planning to move suzetrigine into a Phase 3 study, and it believes that better designing the trial to address variability among responses in placebo patients could allow the drug to succeed.
Vertex shares dropped almost 13% in pre-market trading. In the lead-up to the announcement, analysts had framed the trial results as a major moment for the company’s stock, and for the millions of people who struggle with uncontrolled chronic pain.
Read more from STAT’s Matt Herper and Jonathan Wosen.
Biotech stocks hammered after Fed rate projections
Yesterday, the Federal Reserve cut interest rates by a quarter percentage point as expected, but officials also projected higher inflation next year and forecasted two rate cuts next year (two fewer than they previously expected).
The XBI, a closely watched index of biotech stocks, sunk 5% on the news.
Inflation has proven sticky, and economists are also bracing for further price increases next year once Donald Trump takes office, as he’s threatened to levy sweeping tariffs. That kind of economic environment of persistent inflation and high interest rates could especially hurt the biotech industry, which has already been reeling from a prolonged downturn and layoffs.
Sangamo gets a lifeline with new licensing deal
From my colleague Jason Mast: Astellas is licensing a gene therapy virus from Sangamo Therapeutics, giving the gene-editing company a bit more lifeline as it struggles to stay afloat.
Sangamo is one of a number of companies that in the last couple of years invested in engineering commonly used gene therapy viruses — technically, adeno-associated viruses — to more easily enter the brain, an organ that’s historically been hard to reach. Astellas will now have the right to use the virus for up to five neurological targets.
Sangamo has attracted a cult following among certain retail investors, but they may be disappointed by how much Astellas is paying: just $20 million upfront, with $1.3 billion in milestones. Other deals for new viruses have gone for more.
Right now, the company can use all the cash it can get. It only has enough money to last into next quarter and is banking on a large milestone payment from Pfizer and the sale of another gene therapy program to stay in business.
Another PD-1/VEGF program sees hefty funding
From my colleague Drew Joseph: Just a few months after its unveiling, the startup Ottimo Pharma said Thursday it had raised a $140 million Series A round, a hefty sum that reflects the biopharma’s industry excitement around the targets Ottimo’s going after with its experimental cancer therapy.
The financing was led by OrbiMed, Avoro Capital, and Samsara BioCapital, with other investors, including Medicxi, which had backed the pre-clinical development of Ottimo’s medicine, also pitching in.
Ottimo’s antibody, called jankistomig, is designed to work by targeting two proteins, PD-1 and VEGF, both rallying the body’s own immune fighters to attack tumors while preventing cancer cells from spurring the growth of new blood vessels. The industry’s interest in the approach exploded earlier this year when Summit Therapeutics and Akeso reported that their bispecific antibody outperformed Merck’s Keytruda in a head-to-head trial. Since then, Merck has licensed its own bispecific. Other companies are also working on their own versions of the approach.
Ottimo, which is based in London and Boston, is headed by David Epstein, a longtime Novartis executive who most recently led Seagen as it was acquired by Pfizer. Epstein has been upfront about the company’s goal to generate such promising early clinical data that it can attract a larger company to scoop it up.
More reads
- Novartis, BioAge take on age-related diseases in $550M pact, Fierce Biotech
- U.S. spent $450B on drugs last year, CMS says, with new obesity and diabetes drugs adding to total, Endpoints
- CDC confirms first known severe case of H5N1 bird flu in the U.S., STAT
- ‘I was almost forced to do it’: One sickle cell patient’s story of sterilization, pressure, and regret, STAT