| | | |   | Hello, all. Damian here with a look at the puzzling path of new gene therapies, the promise of a $100 genome, and the many biotechs worth less than their checking accounts. | | | What does the FDA want from a gene therapy? The long-awaited FDA approval of BioMarin’s gene therapy for hemophilia A will be further delayed, the company said yesterday, because the agency wants more information and analysis before making a decision. BioMarin’s submission, once expected in June, will now wait until September, the company said.
The delay, while apparently minor, underlines years of confusion as to just what kind of data the FDA wants before approving a gene therapy. BioMarin has seen the issue first-hand: In 2020, that same hemophilia A therapy looked poised for FDA approval, only for the agency to reject its application and request longer-term data on safety and efficacy.
Next week could bring some clarity. Starting June 9, the agency will hold a two-day public meeting of its independent advisers to examine two gene therapies from Bluebird Bio, the first time in five years the FDA has hosted such a hearing for any gene therapy. The results, while specific to Bluebird, could have implications for the whole industry. | The ‘dark horse’ claiming a $100 genome A slew of companies have tried to unseat Illumina with technologies that promise sequence genomes faster, more completely, or at a lower cost, and yet the company still maintains a near monopoly on the market. The latest contender has raised about $600 million on a mission to compete on price.
As STAT’s Jonathan Wosen reports, the firm is called Ultima Genomics, and its pitch is simple: It can sequence an entire human genome for $100. The company didn’t specify just how it calculated that price, but if it holds up, Ultima's offering would substantially undercut the roughly $560-per-genome cost of modern sequencing.
The company put out a few preprint papers on its performance metrics, and they appear to live up to the hype, according to Evercore ISI analyst Vijay Kumar. “Investors had suspected Ultima to be the dark horse,” Kumar wrote in a note to clients, and if its early work is eventually validated by external users, “Ultima has the potential to disrupt the market.”
Read more. | Healthcare remains a top sector for M&A activity The healthcare sector saw a record $600B worth of M&A activity in 2021. About 50% of deal volume came from biopharma, but medtech and services also played important roles. Looking ahead, a slowdown in activity is anticipated, but M&A prospects remain strong. Learn what’s next for healthcare M&A. | More and more biotechs are worth less than their checking accounts Biotech’s 2021 swoon has settled into a 2022 malaise, with the closely watched XBI index now down 40% for the year. That has pushed more than 200 public companies into the unwanted territory of running a business that’s worth less than the cash they have in the bank.
The analysts at Evercore ISI trawled the numbers to find the industry’s most dire cases, companies whose enterprise value — which is market cap plus debt and minus cash — is $100 million or more below zero. There are about 30 of them, and when you add it all up, these companies have about $14 billion in cash and a cumulative market cap of $8 billion, according to Evercore ISI.
If you’re a shareholder, that suggests there’s a lot of money that could be put to better use than propping up a struggling biotech company. But actually extracting cash from foundering firms is easier said than done, both because management teams are loath to face the music and because actually winding down a public company is an expensive proposition. According to Evercore ISI’s Josh Schimmer, relief could come from reverse mergers, as private companies might look askance at IPOs and SPACs and decide instead to buy up one of biotech’s many value-negative hangers-on. | ‘New GSK’ is doubling down on vaccines GSK, beset by activist investors and striving to modernize, sees a bright future in vaccines, committing up to $3.3 billion to buy the biotech firm Affinivax.
The deal, disclosed yesterday, breaks down to $2.1 billion in cash and another $1.2 billion in potential milestone payments tied to Affinivax’s pipeline of pneumococcal vaccines. The company’s most advanced candidate is in Phase 2 development, and like each of Affinivax’s vaccines, it relies on proprietary technology designed to increase the number of antigens presented in a single vaccine.
Meanwhile, GSK is about a month away from spinning off its consumer health business and becoming what management calls “New GSK.” The company promised to increase revenue from vaccines and drugs by 5% over five years and 38% by 2031, and its two recent acquisitions — yesterday’s deal for Affinivax and April’s buyout of Sierra Oncology — dovetail with that goal. Activist investors, led by the hedge fund Elliott Management, are less than sold on the plan and have spent months agitating for changes to GSK’s leadership. | More reads - Costly Alzheimer’s treatment is spreading around the world, with virtually no science to back it up. STAT
- Theranos whistleblower Tyler Shultz on lessons learned, venture capital, and shutting down his own business. STAT+
- Documents show problems at Novartis facility where cancer drug production was halted. STAT+
| Thanks for reading! Until tomorrow,  | | | |
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