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Hello, everyone. Damian here with an explanation of the latest trend in biotech financing, a big idea in oncology, and Novo Nordisk’s plans to make Wegovy obsolete.
The need-to-know this morning
- Happy Leap Year Day! An extra day in February allows for padding of the month’s biotech PIPE totals. Avidity Biosciences: $400 million.
- Life sciences investment firm Abingworth is providing Gilead Sciences with $210 million to fund clinical trials of Gilead’s drug Trodelvy in non-small cell lung cancer. In exchange, Abingworth will receive payments for potential expanded approvals and royalties on sales.
- Pfizer is about to make a big push in cancer. Will investors listen? In an interview, CEO Albert Bourla was insistent that investors are missing the potential of Pfizer’s acquisition of Seagen.
Where’d all these PIPEs come from?
Once upon a time, if a publicly traded biotech company needed money, it would sell shares on the open market, relying on the wisdom of the crowd to determine its valuation. But more and more biotech firms are embracing a new way of raising cash, scoring sweeter deals in exchange for a little insider information.
As STAT’s Adam Feuerstein reports, we are living in the golden age of the PIPE, short for private investment in public equity. Just this week, five biotech companies have raised nearly $1 billion combined in PIPE transactions. There have been 30 such deals so far in 2024, totaling more than $4 billion in value.
The allure of PIPEs — and the reason they’re causing some consternation — is the material, non-public information. The funds that participate in these deals learn things the general public doesn’t know. Legally, it’s not insider trading, as each PIPE comes with restrictions that prevent investors from immediately trading the shares they acquire. But it’s patently unfair to anyone not invited to participate, and that’s not exactly sitting well all over Wall Street.
The next act for a biotech rainmaker
Jean Cui’s last company, the oncology-focused Turning Point Therapeutics, got sold to Bristol Myers Squibb for $4 billion. That helped make her next venture, focused on cancer drugs that can counteract tumors’ evolution, an easy sell to investors.
As STAT’s Matthew Herper reports, the firm is called BlossomHill Therapeutics, and it just raised $100 million from a syndicate including Colt Ventures, Cormorant Asset Management, and OrbiMed. The idea, Cui said, is to break the mold of drug design, building new molecules from scratch that could be less susceptible to cancer cells developing resistance. Among her targets is a competitor to AstraZeneca’s Tagrisso, one of the best-selling cancer pills on the market.
The allure, investors said, rests on Cui’s track record. At Turning Point, she was key to the invention of the targeted therapy that eventually won FDA approval and drew Bristol’s interest. Earlier in her career, at Pfizer, she did cornerstone work on two approved cancer medicines. “It’s actually all about her,” said Cormorant’s Bihua Chen.
Read more.
Cell therapy for the brain
Just as engineered cells have led to dramatic benefits for certain cancers, scientists are working to bring a similar technology to disease of the central nervous system, potentially repairing the damage of neurodegenerative disease.
Kenai Therapeutics, a San Diego biotech startup, is working to do just that in Parkinson’s disease. As STAT’s Allison DeAngelis reports, the company raised an $82 million Series A to fund the development of off-the-shelf cell therapies crafted from donor stem cells. Kenai expects to advance its first therapy into a clinical trial later this year.
The company, whose investors include Cure Ventures, plans to build a pipeline of cell therapies for other neurological diseases. “What excited me originally, is the ability to extend this beyond Parkinson’s,” said Jeff Jonas, a partner at Cure Ventures. “Parkinson’s really is, in ways, a sentinel indication that may allow greater expansion into other CNS indications.”
Read more.
Novo’s chasing a ‘vaccine-like’ version of Wegovy
Novo Nordisk can barely make enough of Wegovy to satisfy demand for the dramatically effective obesity treatment. But scientists in the company’s research ranks are already at work on a moonshot treatment that would render that weekly injection obsolete.
As STAT’s Elaine Chen reports, Novo has set up a Boston-area science hub devoted to next-generation medicines, including obesity products that might function more like preventive therapies than weight-loss treatments.
“We have a very early think tank on: what would it take us, from a technology point of view and from an ecosystem point of view, to make long-lasting GLP-1 molecules?” Novo’s Chief Scientific Officer Marcus Schindler said in an interview with STAT yesterday. “Could we think about vaccine-like properties, where imagine you had, once a year, an injection with an equivalent of a GLP-1 that really helps you to maintain weight loss and have cardiovascular benefits?”
Read more.
More reads
- Q&A: A biotech VC leader shares her next big bets, STAT
- FDA chief very concerned about fake weight loss drugs, Reuters
- CDC advisory panel says people 65 and older should get a Covid spring booster shot, STAT
- Moderna spells out rare disease ambitions, Endpoints