| |   | Good morning! Damian here, reminding you that today is the last day you can submit nominations for STAT Madness, our annual bracketed competition in which colleges, universities, and institutions compete to have their biomedical research named the best innovation of the year. Here's where to put your nomination. | | | Will a $2 billion deal improve biotech’s standing? With biotech stocks sputtering in the early days of 2022, yesterday’s news read like wish-fulfillment: A big drug company, in this case UCB, was buying a smaller biotech in the form of Zogenix for a sizable premium, in this case 66%. But is that enough to change the narrative for a flagging industry?
As STAT’s Adam Feuerstein reports, the jewel for UCB is Fintepla, Zogenix’s FDA-approved treatment for a severe form of epilepsy. The deal values Zogenix at $26 per share plus another $2 per share if Fintepla wins approval in Europe by the end of 2023. The total transaction adds up to nearly $2 billion.
Whether the news will affect biotech sentiment remains to be seen. The closely watched XBI biotech index was about flat yesterday, which is about as positive as one could hope for. The same index has fallen about 18% in 2022 after losing about 20% of its value over the previous year.
Read more. | FDA Kremlinology gets a little more interesting Eric Bastings may not quite be a headline name in the pharmaceutical world, but he amassed quite a bit of influence in his 20-year career at the FDA, eventually serving as second-in-command at the agency’s neuroscience division. And yesterday, we learned that he’s quit the agency for an industry, a departure that could shape what will likely be a momentous 2022 for the FDA.
The news is that Bastings has joined Ionis Pharmaceuticals, inventor of the spinal muscular atrophy treatment Spinraza and developer of RNA-targeting therapies. But the implications are more interesting. Bastings served as deputy to Billy Dunn, the FDA’s head of neuroscience and the face of the agency’s polarizing approval of Aduhelm, the Alzheimer’s disease treatment from Biogen.
That same division will soon decide on whether to approve Eli Lilly’s competing donanemab, which is up for the same accelerated clearance that put Aduhelm on the market despite its equivocal benefits. Basting’s absence leaves a vacuum at the top of the FDA’s neuroscience department, one that could change the course of Alzheimer’s treatment in the U.S. | Early Bird Access Extended: The Breakthrough Science Summit For one more week only, access our best rates! On March 31, we're gathering knowledgeable insiders - from pharma executives to cutting-edge researchers - to hear their takes on the innovations in tech and procedures that are set to change the face of health and medicine. Early bird pricing ends Friday, Jan. 21 so get your pass now! | Consider the ‘walking dead’ Biotech’s protracted downturn is a headache for investors, but for some small companies, it’s an existential threat.
About 20% of biotech companies have total valuations below $100 million, according to Evercore ISI analyst Josh Schimmer, and 40% are trading under $250 million. With drug development being a famously expensive business, the vast majority of those firms are going to need to raise cash in the next year or so.
“We’re looking at hundreds of walking dead biotechs which are facing a potential purge,” Schimmer wrote in a note to clients yesterday. The ones that can’t raise cash the normal way might have to resort to issuing warrants, Schimmer noted. And, if valuations continue to fall, a few might drift into reverse-merger territory. | More reads - Senate Finance chair investigates Bristol Myers over an allegedly abusive overseas tax shelter. STAT+
- Djokovic has 80% stake in biotech firm developing Covid drug. The Guardian
- This HIV prevention medicine is for everyone. Why do so few people take it? STAT
- A George Church spinout fighting the viral vector bottleneck in cell and gene therapy lands $55 million. Endpoints
| Thanks for reading! Until tomorrow,  | | | |
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