| Sponsored by  | | |  | Greetings from the final day of the 2021 J.P. Morgan Healthcare Conference! Thanks for tuning in all week. The Readout will return to its early-morning schedule starting tomorrow. We’ll see you — whether literally or virtually — next year. | | | Biogen has a shopping list Wall Street might have all but written off Aduhelm, but there’s one topic that can still make Biogen’s flagging stock price rise: M&A.
Biogen rose about 6% yesterday after CEO Michel Vounatsos said the company is “engaging very closely with our board on tactical short-term measures but also strategic options” — which is corporate jargon for “We’re talking about deals.”
And STAT has seen a Biogen shopping list. The company, whose stock price is down nearly 50% since Aduhelm’s June approval, is working with Goldman Sachs to find potential buyout targets, according to a person familiar with the companies’ relationships who would share internal discussions only on the condition of anonymity.
Read more. | Alnylam’s next act Alnylam’s new CEO, Yvonne Greenstreet, joined STAT for our mid-J.P.-Morgan virtual event to answer questions from our reporters and the audience.
One big point: Greenstreet does not think investors should be reading through the recent failure of a drug being tested by BridgeBio for ATTR amyloidosis-related cardiomyopathy for Alnylam’s studies of its own drugs in that same indication. Greenstreet noted that, in the BridgeBio study, endpoints that usually are matched with the study’s main goal, the six minute walk test, did not line up with it. She noted that Alnylam has a lot of experience designing trials for this disease.
She also sounded eager to take over Alynylam, which was founded in 2002 and now has $662 million in annual sales and an $18 billion market capitalization. She said that the company, which is starting to go beyond rare disease to explore drugs for heart disease and Alzheimer’s, is well positioned no matter what happens to the industry at large.
“The medicines that we’ve develop at Alnylam are really transformative medicines,” Greenstreet said. “These are not medicines that provide incremental benefits to patients, they provide substantial benefits to the patients they have an impact on.” | Sponsor content by ICON How can a co-development partner help emerging biotech secure funding? ICON is committed to helping biotechnology companies launch their therapies throughout the drug development process by facilitating partnerships with venture capital firms. Once these biotechs receive funding, ICON applies its expertise to assist them in accelerating their assets, including clinical trial planning and execution, regulatory assistance, consulting, and commercialisation. Learn more about funding for emerging biotechs, and how a co-development partner can help. | Talkspace’s transition Despite underwhelming financial performance and a spate of C-suite departures last year, mental health platform Talkspace’s interim CEO Doug Braunstein didn’t express the slightest concern for the company’s future at JPM.
He promised that Talkspace’s balance sheet had enough cash on it to get through 2023, though he dodged providing a timeline for profitability.
Braunstein sought to show how the company was navigating the transition from a service primarily sold to consumers to one sold to businesses with large populations, like health plans and employers. He detailed Talkspace’s goals of adding more business partners and increasing use among members who’ve given the service a try.
He also took the opportunity to spin the company’s preliminary Q4 earnings, released in advance of its proper announcement next month. The company estimates $28 million in quarterly revenue — up from $26 million the year before, but shy of the $30 million analyst target. Meanwhile, Talkspace’s covered lives, which can be seen as a pool of untapped revenue, increased from 39 million in 2020 to an estimated 69 million last year — also below analyst estimates. Ouch.
A generous interpretation of trend lines below the surface might indicate that things are heading in the right direction. In 2020’s fourth quarter, Talkspace made $19 million selling to consumers and $6 million selling to businesses. In 2021, it made $17 million selling to consumers and $11 million selling to businesses. (Braunstein attributed the drop in consumer revenue to spending less on advertising.)
If the goal is to focus on selling to businesses, nearly doubling your revenue in that category doesn’t look so bad. With continued growth in that B2B category and executing on a strategy of adding more covered lives it later converts into dollars, the business transformation might just work. It will just take time.
With two years of runway in the bank, Talkspace has the luxury of some time. But given an army of well-funded competitors and the company’s current vacancies at the top, will it be enough? | Understanding EQRx’s memos The last time J.P. Morgan was in person, a new startup, EQRx, unveiled a plan to build a business model out of taking on high drug prices.
Now EQRx has gone public, via a SPAC, and it has $1.7 billion in cash. CEO Melanie Nallicheri presented at J.P. Morgan Monday, talking about memo of understanding it has reached with CVS, the health insurer and benefits manager, and Geisinger Health, a major health system.
Reminder: EQRX’s business model will aim to develop new drugs that compete with old ones in part because they are inexpensive. They will not be less effective or safe. “Nobody wants to make that trade off,” Nallicheri said. The problem is in the drug market, lowering prices doesn’t usually actually increase market share, for reasons that are complex and brain-twisting.
“The reason we wanted to share these is to show that if you really put your heart and your mind to it there is a way to create a true partnership both so you can align the economic incentives,” Nallicheri said. Investors, however, are likely trying to figure out exactly how they will know when and if EQRx has managed that feat. | Affina-what? Phil Greenberg, the wiry-mopped head of immunology at the Hutch, is back with a new company, Affini-T Therapeutics, founded out of his lab.
Greenberg was previously one of the co-founders of Juno Therapeutics, which developed the CAR-T cancer therapy now sold by Bristol-Myers Squibb, which now owns Juno. But Juno had a whole other line of research around engineered T-cell receptors, or TCRs, as a way to fight cancer.
“Since most of those are derived from normal proteins, T-cells are naturally trained to say, ‘that’s normal. That’s OK,’” Greenberg told STAT’s Angus Chen. “Now when you have one that’s different from a normal cell, the T-cell says, ‘oh, that’s different.’” | The CRISPR stock boom is over, but Editas is still toiling At last year’s JPM, when genome-editing stocks were hitting all-time highs, Editas Medicine was a $5 billion company at the cutting edge of everyone’s favorite technology. Twelve months and one clinical disappointment later, Editas has lost about 70% of its value, and its CRISPR peers are nowhere near their 2021 heights.
But the work continues at Editas. At its JPM presentation this week, the company outlined a plan to make 2022 brighter than the prior year. The company has increased the dose of its lead CRISPR treatment, targeting a genetic disease that leads to blindness, and expects initial data in the second half of this year. Editas is also planning to present data on its genome-editing treatment for sickle cell disease on the same timeframe.
In valuation terms, Editas is firmly in last place among its cohort of CRISPR companies, and its relatively slow path to generating data isn’t helping matters. But 2022 brings an opportunity for the company to make up some ground and recapture at least some of the exuberance that made 2021 such a banner year for editing DNA. | Thanks for reading! More tomorrow. | |
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