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Wednesday, February 17
4:00 PM
Market Outlook: Breaking More Records or Expecting a Releveling?

Last year’s meteoric rise in biotech is here to stay, according to experts on a market outlook panel. 

 Steve Rowles, Partner, Morrison & Foerster, LLP, led a discussion with: 

  • Marianne De Backer, PhD, Member of the Executive Committee, Executive Vice President and Head of Strategy, Business Development and Licensing, Bayer Pharmaceuticals, Bayer AG
  • Allison DeAngelis, Senior Healthcare Reporter, Business Insider
  • Anh Do, Partner, Indus Capital Partners
  • Dennis Purcell, MBA, Founder, Aisling Capital LLC
  • Philip Ross, Vice Chairman, Investment Banking, J.P. Morgan

The year 2021 begins with biotech well-positioned for significant gains because innovation is continuing, capital is available, and investors are interested, says Do. 

“Everybody has come to see that biotech is important, science is important, and it’s an answer to today’s problems and tomorrow’s problems,” says De Backer.

Funds are likely to begin being deployed across a broader spectrum of disease and prevention, boding well for the volume of innovation, the speed at which the innovation can be transformed into something meaningful for patients, as well as result in a positive outcome for the market, De Backer continues. 

The releveling risks: COVID sparked interest from traditional investors but also from “generalists” who do not typically invest in the space. The question is if these first-time investors will be “fair-weather friends, or if they’ll stick with the industry in 2021,” says Purcell.

3:00 PM
Turning RNA Research into Medicines

RNA research has catapulted to the forefront with early demonstrations of success in COVID-19 vaccines development touting 90%+ efficacy. But this was not an overnight success. 

Canaccord Genuity’s Principal, Michelle Gilson, and Managing Director, Arlinda Lee, PHD, led a discussion around the advantages, challenges and the future of the technology with: 

  • Peter Berglund, CEO of HDT BIO
  • David Lockhart, PHD, CEO of ReCode Therapeutics, Inc.
  • Sahm Nasseri, CEO of PYC Therapeutics
  • Francois Vigneault, PHD, President and CEO of Shape Therapeutics, Inc.

“We’ve all seen with the COVID outbreak here, the specific advantages RNA can bring to the vaccine field. It has a nimbleness to it. It’s an ease and speed from discovery to GNP manufacture that is more shortened compared to what we see with many other platforms and technologies that allows this tremendous rapid response,” said Berglund.

Vigneault spoke about more advantages of RNA technology including bypassing DNA damage and its ability to be highly tunable. Nasseri also spoke to the precision and flexibility of the technology yet noted that we don’t “have a hole in one yet with respect to delivery across all the different areas we could go.”

Delivery continues to be the biggest challenge for this technology. Immunogenicity is another challenge. Lockhart explained: “The body recognizes foreign agents like RNA and mounts an immune response.” 

What’s Next? What’s encouraging on the vaccine front is that the mRNA vaccines developed for COVID-19 were meant to be delivered through IV. Lockhart sees a lot of room for improvement with the technology given their efficacy when delivered via shot.

2:00 PM
Policy Outlook: Reviewing the Pathway for Advancing Biopharma Goals in Congress and the White House

Margaret Anderson, Managing Director for Deloitte Consulting LLP, led a conversation with experts in the biotechnology and biopharmacy fields to evaluate the changing policy environment amid a global pandemic and a new White House administration, and its impacts on their industries.

Panelists included:

  • Richard Pops, Chairman and CEO of Alkermes, Inc.
  • Phyllis Arthur, Vice President, Infectious Diseases and Diagnostics Policy for BIO
  • Julie Gerberding, Executive Vice President and & Chief Patient Officer at Merk
  • Rai Downs, Co-founder of Tarplin, Downs & Young LLC

Anderson began by addressing COVID-19, and prompting the panelists to speak on the lessons they’ve learned through their industries during the pandemic.

“Pandemics happen,” Merck's Gerberding began. “And they have devastating consequences in this globally connected world we live in, and we are not sufficiently prepared.” Being ready for handling similar global health crises in the future needs to be a focus of policy reform, she added.

The U.S. is facing an “incredible hurdle of vaccine hesitancy” as the country tries to fight the pandemic, Gerberding added. 

"Trust is probably as difficult as vaccine distribution," she added.

Arthur chimed in to note that community leaders have stepped in to boost confidence, especially among populations that have been disproportionately influenced by the pandemic. There’s been an uptick of people who want to get the vaccine in African American and Latin American communities lately.

 

COVID-19’s devastation is not limited to people who get the virus, Pops argued. Many underlying problems in the U.S. healthcare system, including addiction and mental health issues, have worsened as a result of the pandemic.

 

How do we tackle health equity?

“There’s a whole underlying health dysfunction in our healthcare system,” Downs said. COVID-19 vaccines have been developed faster than most scientists anticipated, but that hasn’t solved the pandemic due to issues like access and vaccine hesitancy.

“We’re definitely advocating and championing for using COVID as a model of access to medicine,” Arthur noted. This includes making sure people can get vaccines for free. Policymakers need to evaluate people’s access to healthcare, including the cost of doctors’ visits, transportation, time off work, etc.

"Let's think first about what our patients need most," said Gerberding. They need to be able to take the medicines they need without fearing "financial catastrophe." 

Another area that needs increased focus is creating more diversity within clinical trials.

What can we expect from the Biden administration, on drug pricing or other issues of importance to biopharma?

"There is a real commitment to the process" with this administration, said Downs.

The Biden administration has been "very clear that they believe drug pricing is an issue that's fundamental to future reform of the health care system,” said Downs.

However, tackling budgetary problems will be hard as long as the “toxic partisan environment” remains, she added.

Gerberding called on company CEOs to step forward and become more involved in policy decisions. 

“We have really big challenges and I think it’s going to take more than government leadership to solve them," she said.

“I think you’re going to see a really, really interesting focus on health equity with this administration," added Arthur.

“Partnership between government and the private sector and partnership between all elements of the healthcare system are an absolute essential for moving forward," Downs said to conclude.

11:30 AM
Investors’ Reactions to Reference Pricing, Part 2: What to Expect on Drug Pricing

BIO’s Bernard Fallon continued the conversation on drug pricing proposals with three expert speakers:

Craig Garthwaite, PhD, Professor of Strategy, Herman Smith Research Professor in Hospital and Health Services Management, Director of Healthcare at Kellogg at Northwestern

John A. Murphy III, Vice President and Deputy General Counsel at BIO

Ipsita Smolinski, MBA, Managing Director of Capitol Street and Faculty, Healthcare Finance at Johns Hopkins University Carey Business School

The speakers discussed the Most Favored Nation drug reimbursement proposal, which Garthwaite said was a “poorly written” rule that “doesn’t take into account the way the drugs come into market.”

Learn more about the Most Favored Nation proposal and how we got there.

Does the proposal disappear with the Biden administration?

It doesn’t, says BIO’s Murphy—but there was a “ton of litigation” as a result of the policy, with 3 of 4 judges seeing “so many process fouls” that they said the administration had to go back to the drawing board.

But don’t let down your guard yet. The “concept is not going to go away,” though “this idea of MFN as saddled with the Trump administration moniker may not be the most advantageous avenue to pursue,” Murphy continued.

Something like MFN/IPI is “in the realm of possibility,” said Smolinski—though the Biden administration is likely to want to use more science versus just a pricing mechanism. We might see something happen through Centers for Medicare and Medicaid Services (CMS) in the form of a pilot program or certain classes of drugs. However, because we are talking about reimbursement cuts to hospitals and physicians, we are likely to see significant lobbying activity against it, too.

Garthwaite noted the possibility of legislation like H.R. 3—though this lacks “sophistication about what it means to bring drugs to market”—as well as state-level legislation, as well.

What’s next? The judge in BIO’s lawsuit is expected to release a status report at the end of April—so stay tuned.

If we do end up with a drug pricing proposal, what does this mean for investment?

Revenue has shrunk because of tweeting and Trump administration messaging around drug pricing, said Smolinski.

“Every one of these policies just layers complexity to the system, which adds cost,” said Murphy.

“We are going to have a lot of educational opportunities in this new Congress to try to explain” how drug R&D and investment works, and why we need innovation in order to tackle problems ranging from COVID-19 to diabetes, Murphy continued.

Biotech investors “are critical to getting a lot of these smaller, new therapies to the next level and I don’t think Congress gets that,” he concluded. “They need to hear it from the investor community.”

 

10:30 AM
Investors’ Reactions to Reference Pricing, Part 1: Price Controls Kill (Investment)

So, how do we kill all of these great conversations we’re having about drug R&D and investment? “By introducing price controls,” said Peter Kolchinsky, PhD, Managing Partner of RA Capital Management, LLC, kicking off a session on investors’ reactions to reference pricing.

He walked attendees through the math on how investors make decisions about whether to invest in a new drug—and it’s worth watching the whole thing if you want to understand the process.

But some policymakers are “convinced that drugs are overpriced” and run what Kolchinsky calls “flawed math to prove it”—such as by ignoring the fact that drugs go generic or missing the collective value of a new antibiotic—instead of reforming insurance to lower out-of-pocket costs, which is what patients actually need.

The result? Investors invest in other industries.

“Precedents matter—so does talk of the future,” he said.

“Society’s willingness to pay for current drugs is evidence that it might pay similarly for future drugs,” he continued. “Credible talk of price controls is unnerving and reduces investment.”

“What companies charge for drugs is not the problem Congress and the public think it is,” said Kolchinsky. The reality is that the market is working and prices are where they need to be to fund investment in biomedical innovation—because the key to innovation is offering a high-enough reward.

“Price controls are an absolute conversation killer—no innovation possible” with them.

If there were price controls, there would also need to be price guarantees (like BARDA contracts) to get investors to take risks—and no one is proposing that, explained Kolchinsky.

What is the key to affordability? Proper insurance—and lower out-of-pocket costs. In the long run, this will allow the system to save money by keeping people out of hospitals.

As we learned earlier today, drug development is hard.

“Occasionally we get lucky and it’s not a single or a double, but a homerun,” concluded Kolchinsky. However: “You can’t just pay a baseball team only for home runs. You have to pay them to show up to the plate and keep swinging—and those singles and doubles accumulate on top of one another.”

Learn more about No Patient Left Behind, an initiative led by Kolchinsky and BIO’s former president and CEO Jim Greenwood (among others) to make medicine affordable for everyone in America.

 

10:15 AM
A few things we learned on Day 1...

Did you miss Day 1 of the BIO CEO & Investor Digital Conference? Well, you missed a lot! Luckily, you can catch up right here – and read the highlights below.

Another thing you might have missed: 

Yesterday, several California Assemblymembers introduced the Golden State Innovation Act (Assembly Bill 593), which would restore the R&D tax credit and net operating loss (NOL) deductions for life sciences companies in California.

“Biopharmaceutical companies are leading the charge in the fight against the coronavirus. These innovators are making life saving discoveries through research and development, including for treatments and vaccines for COVID-19 and future pandemics," said Patrick J. Plues, BIO’s VP of State Government Affairs. 

"California’s research and development tax credit helps incentivize biotechnology companies to invest in these activities and generate increased employment opportunities in science and engineering."

Want more content like this? Sign up to get Good Day BIO in your inbox every morning at 10 AM ET!

10:00 AM
CRISPR’s Progress for Patients: Clinical Development of Therapies

Dr. Mary Haak-Frendscho is the CEO of Spotlight Therapeutics, a three-year-old gene-editing company attempting to solve the delivery problem for CRISPR gene-editing.

She sat down for a chat with Lauren Martz, Senior Editor, Translational & Clinical Development for BioCentury.

WHY IS CRISPR DELIVERY A PROBLEM?

“It’s very technically challenging” explained Haak-Frendscho. “These are large molecules. The challenge is having the ability to select the desired cell type safely and efficiently in-vivo. What we have currently that is demonstrating promise, is cell therapy with viral and nano particle delivery which is working for certain indications but lacks the cell selectivity. 

"Where we come in, is we are working from a different angle—a white space and developing programmable ribonucleoprotein (RNP) which is a new class of biologics," she continued.

However, those were achieved with a cell therapy that required the patients to undergo a very arduous procedure at major medical centers over the course of months with significant side effects. 

“If this could all be replaced with a biologic that’s an injectable that is centrally manufactured and distributed it would allow patients to be treated on an out-patient procedure, increasing the level of access and decreasing the level of side effects and discomfort associated with cell transplant. If that can be avoided, it opens up patient access."

"We think about this as democratizing gene editing.”

SPOTLIGHT THERAPEUTICS and PARTNERSHIPS, COLLABORATIONS

“We selected indications initially that proved our platform and lent themselves to a sustained biologics effect. As we mature and further develop the platform, we will go to other areas and we would like to partner with companies that have a deep commitment and understanding of those therapeutic areas.”

As biotech companies venture into these collaborations, the issue of IP is always there.

“We are mindful [of IP] but we don’t let it interfere with our learning,” said Haak-Frendscho. “We believe that if we are successful in solving the delivery problem that we will be able to negotiate a relationship with those parties that own or control the key IP. We feel like we have a big enough piece of that puzzle that it would put us in a reasonable position.”

M&A FOR CRISPR COMANIES

Dr. Haak-Frendscho offered her thoughts on whether there will be a move towards mergers and acquisitions as  these companies move products to the clinical stage. “There are so many advances being made and it’s moving so quickly. Emerging companies in this space have raised a lot of funding, allowing them to turn over more cards and maybe make M&A less attractive so maybe we will see a lot more enduring companies that will carve out and focus on a specific therapeutic area. That remains to be seen.”

“The big winners here are going to be the patients if we solve some of the gene editing problems well, it will be transformative for how medicine is practiced and what it means for patients in the future and not just a select group with access to major medical centers.”

9:00 AM
Clinical Success Rates and What is Driving Them

“We have published the long anticipated update to our 2016 report on clinical trial success rates. It’s been five years since BIO, Biomedtracker and Amplion co-published our findings on success rates and a lot has changed since that time,” began David Thomas, BIO’s Vice President of Industry Research and discussion co-moderator.

He along with Michael Hay, General Manager of Informa, led a discussion on the findings of this new report, Clinical Development Success Rates and Contributing Factors 2011 – 2020 and what they mean for the biotechnology sector. It was co-published by BIO in conjunction with Informa Pharma Intelligence and QLS Advisors LLC.

Panelists included:

  • Andrew Lo, Co-Founder, QLS Advisors
  • Shomsesh Chaudhuri, CTO, QLS Advisors
  • Daniel Chancellor, Thought Leadership Director, PharmaIntelligence
  • Sara Lafever, Director, Research Support & Biomedtracker, Pharmaintelligence
  • Ari Brettman, Managing Director, Blackstone Life Sciences

 

Healthcare Finance and Probability of Success

To understand healthcare finance and drug development, it is necessary to comprehend the importance Probability of Success (PoS), “in thinking about the value of various biomedical projects,” according to Andrew Lo, Co-Founder, QLS Advisors. The reason that it is so important to understand the PoS is because healthcare finance is best understood through the equation:

Expected Net Present Value = Present Value [Profits] x PoS – Costs

According to Lo – an economist by training – the data in this report is built around understanding PoS which is determined by scientists in the biotechnology sector while the other factors in the equation are determined by economists.

Historical Perspective from 2000 to 2018

“In the year 2000, if you were to list the top 30 drugs bestselling drugs around the world … of the top 30 bestselling drugs … 4 of them … were developed either by biotech or academic medicine … 26 out of the top 30 drugs came out of Big Pharma,” according to Lo. He went on to show the same table in 2018, the last year for which there is a complete dataset, “24 out of the top 30 [bestselling drugs were developed by biotech or academic medicine] … 9 of the top 10 came out of biotech.”

Key takeaways:

  • On average, it takes 10.5 years for a Phase I program to progress to regulatory approval.
  • From 2011–2020, a drug in a Phase 1 clinical trial had a 7.9% likelihood of approval (LOA).
  • Of the 14 major disease areas, hematology therapies had the highest LOA from Phase I (23.9%). This is seven times greater than the least-successful group, urology (3.6%).
  • Rare disease therapies were also notably successful with an overall LOA of 17.0%.
  • Immuno-oncology therapies provide a rare pocket of success in oncology R&D with an overall LOA of 12.4%, compared to 5.3% for all oncology approaches.
  • Development programs with trials employing patient preselection biomarkers are twice as likely to be approved (15.9%). Nearly one in two that reach Phase II are successful.

This decrease in the LOA can be attributed to two main factors: greater participation from smaller firms participating in drug candidate development and their willingness to disclose early failures.

Drug development remains difficult

Even in infectious disease, the timelines are typically long. It typically takes 10 years/10.5 years on average. However, there is a range in development timelines as pointed out by Chancellor: 9.2 years for allergy drugs and 12.2 years for urology drug development.

Less than 1 in 10 drugs make it. Success requires having many shots on goal.

BIO's David Thomas explains why you need "shots on goal"

To sign up to receive the full report, click here.

6:00 AM
Day 2 of the BIO CEO & Investor Digital Conference

Here's what we'll be watching today:

9:00 AM ET/6:00 AM PT

Clinical Success Rates and What's Driving Them, featuring BIO's VP of Industry Research David Thomas launching a new report

10:00 AM ET/7:00 AM PT

CRISPR's Progress for Patients: Clinical Development of Therapies

10:30 AM ET/7:30 AM PT

Investors' Reactions to Reference Pricing Models, featuring BIO's Deputy General Counsel John Murphy + investors talking about what MFN or IPI would do to investment

2:00 PM ET/11:00 AM PT

Policy Outlook: Reviewing the Pathway for Advancing Biopharma Goals in Congress and the White House, featuring BIO's VP of Infectious Diseases and Diagnostics Policy Phyllis Arthur and Former CDC Director Dr. Julie Gerberding

3:00 PM ET/12:00 PM PT

Turning RNA Research into Medicines

4:00 PM ET/1:00 PM PT

Market Outlook: Breaking More Records or Expecting a Releveling?