| |   | Hello, everyone. Damian here with the latest on a certain major holder of Cambridge, Mass., office space, words from a few seasoned investors, and a look at how even 12-figure revenue projections can disappoint Wall Street. | | | Biogen is hitting reset Nearly a year after Aduhelm won a shocking FDA approval, Biogen is pulling the plug on the drug’s launch and replacing the CEO who led its development.
The company said Tuesday that it is “substantially eliminating” all spending on Aduhelm, a concession that the drug has become a financial liability following a Medicare decision to restrict patient access and payment. And it’s parting ways with CEO Michel Vounatsos, who will stick around until the board can find a replacement.
The news caps a volatile 12 months for Biogen, which traded near all-time highs last June after Aduhelm overcame seemingly long odds to win over the FDA. The company’s share price has been cut in half in the ensuing year, as physicians, scientists, and regulators picked apart Aduhelm’s supporting evidence, sapping demand for a drug once considered a blockbuster in the making.
Read more. | Now what? Biogen’s decision on Aduhelm will stop the company from throwing good money after bad, and the departure of Vounatsos should appease investors who had long since given up on his leadership. But the company is far from out of the woods.
Looking to the rest of 2022, the storied company is moving forward with a lame-duck CEO, an interim chief scientist, and a board with a long history of gridlock. It needs to recruit a leader who can right the ship and win back confidence on Wall Street. It needs to cut costs without inadvertently persuading key employees that their talents would be better suited elsewhere. And it needs to spend money wisely on new ideas that might restore growth.
But Biogen’s biggest binary in 2022 is its chance to succeed where Aduhelm failed. Lecanemab, another treatment for Alzheimer’s disease, will have Phase 3 data in the fall. Its fate will determine whether Biogen can pivot away from the Aduhelm debacle or be forced into yet another restructuring.
Read more. | May 24 | The STAT Health Tech Summit Join us virtually, or in San Francisco, as we convene experts from Amazon Lab126, Ascension, Google Health, and more to discuss the next big innovations in health tech. We’ll cover everything from patient data to AI to telemedicine. Get your ticket here. | Dating pharma, finding talent, and living with too many biotechs With biotech in a protracted slump, investors are facing an over-supply of companies, a scramble for talent, and paucity of big-money deals. At the Milken Institute Global Conference in Los Angeles, STAT’s Kate Sheridan gathered a bunch of thoughtful people who do deals for a living to talk about the interesting business of biotech investing in 2022. Here are some highlights.
What happened to all the deals? Like a lot of people, Vida Venture founder Arie Belldegrun expected the year to kick off with a slew of multibillion-dollar pharmaceutical acquisitions. The fact that they never came suggests that “pharma somehow changed to dating before marrying,” Belldegrun said. “Before buying you, they have to date you for a while, and it’s a step-wise approach.”
How many biotechs are too many? Thanks to a two-year boom in IPOs, “there’s around 700 public biotechs today, of which maybe half are under $500 million in market cap, trading at around cash levels,” said Christopher Hite, executive vice president at Royalty Pharma. “And the question is: Should some of these companies come together?”
How can the industry diversify its talent pool? “We just need to open our view of what an entrepreneur looks like,” said Kathryne Cooper, partner at Jumpstart Nova, a venture firm focused on Black-founded health care startups. Investors tend to back serial entrepreneurs, which means writing checks to usual suspects from insular networks. Looking to founders outside that ecosystem is key to diversifying the industry, Cooper said.
Just how bad is it out there? Bob Nelsen, co-founder of Arch Venture Partners, survived the biotech crash of the early millennium, and he believes there’s no comparison. “In 2000, there was a lot more crap," Nelsen said. “Now there's crappy management, but there’s a lot of cool technology.” | Pfizer, where even $100 billion can disappoint Pfizer, by virtue of selling a vaccine and a treatment for Covid-19, has emerged as a bellwether for analysts trying to figure out how long the pandemic will keep minting billions in pharmaceutical revenue. And the company’s latest earnings statement, in which it again predicted $100 billion in sales for 2022, sounded some alarms on Wall Street.
The focus fell on Paxlovid, Pfizer’s oral treatment for Covid-19, whose quarterly sales for $1.5 billion came in nearly $1 billion short of consensus. Comirnaty, Pfizer’s vaccine, managed to beat analyst estimates with about $13 billion in revenue, but the company didn’t update its projection of $32 billion in full-year sales.
That suggests demand might be waning for vaccine doses, SVB analyst Mani Foroohar wrote in a note to clients. If that’s the case, Moderna’s competing vaccine may have already peaked, and late-comers like Novavax and GlaxoSmithKline might never see their share of the Covid-19 windfall. | More reads - Former AstraZeneca oncology head to help All Blue in Zymeworks takeover bid. Reuters
- Spero Therapeutics stock plummets after biotech to cut 75% of its workforce. MarketWatch
- The FDA’s Rob Califf on importing drugs from Canada, on Aduhelm, and on opioids. STAT
| Thanks for reading! Until tomorrow,  | | | |
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