| |   | Good morning, everyone. Damian here with some green shoots for biotech, a warning for gene therapy researchers, and the latest on a megadeal. | | | Maybe that was the bottom for biotech  After nearly 18 months of consistent decline, the XBI biotech index has risen about 30% over the last three weeks, providing at least a glimmer of hope that the correction — or crash or crisis or whatever you want to call it — has at last found its nadir.
“Biotech was the canary in the coal mine on the way down, but with some equity market stability in the last few weeks, it looks now like a phoenix on the rise,” Baird analyst Brian Skorney wrote in a note to clients Friday. That has led to rebound in investor interests, multiple analysts have noted, suggesting that biotech is finally starting to look cheap to the major moneychangers on Wall Street.
“During June, biotech investors were like Punxsutawney Phil emerging from his hole on Groundhog Day to tentatively assess his surroundings and predict if winter weather will continue,” analysts at Cowen wrote. And based on recent returns, there’s some reserved optimism that it won’t. | Macrogenics trial shut down over safety concerns Macrogenics suffered a significant setback Friday with one of its two most-advanced cancer drug candidates. A mid-stage clinical trial involving the company’s antibody treatment enoblituzumab was shut down by safety monitors after bleeding events caused the deaths of seven patients with advanced head and neck cancer.
Enoblituzumab is an immunotherapy that blocks a protein called B7-H3 found on some types of solid tumors and that acts like a brake on the immune system. Like other so-called checkpoint inhibitors, blocking B7-H3 may help a patient’s own immune system recognize and kill cancer cells. Several other drugmakers are also developing cancer drugs that target B7-H3.
Macrogenics said it’s still unsure if enoblituzumab played a direct role in the fatal bleeding events, but the risk to patients was too great to allow the study to continue. The company will continue to develop a second B7-H3-targeted cancer treatment called MGC018 that consists of an antibody coupled with a chemotherapy payload. | From trials to triumph: The 2022 STAT Summit Join us as we host silo-breaking discussions on the most important topics in health care. Over two days this November, you’ll hear from some of the leading minds in the industry. Don’t miss out, and enjoy early-bird pricing on your pass until July 22. | A demon of gene therapy’s past threatens its future In 1999, when a clinical trial patient died after receiving an experimental gene therapy, the resulting investigation concluded that the investigators had failed to disclose earlier alarming side effects, a misguided commitment to secrecy that stifled the field for years. Now, with genetic medicine reaching unprecedented heights, scientists are at risk of repeating old mistakes by again withholding vital details on their research.
That’s according to Eric Kmiec, leader of the ChristianaCare Gene Editing Institute. “Exciting work to translate gene therapy advances into safe, effective, and commercially viable treatments are at risk of being undermined by a reluctance to share data,” Kmiec writes in STAT. While the field is not on the verge of a tragedy like the one in 1999, “the road to such extremes can be paved with a series of lesser nondisclosures that inhibit the free flow of scientific data essential for assessing potential risks long before treatments are given to people,” according to Kmiec.
Read more. | What are the odds Merck actually buys Seagen? Merck’s reported interest in buying Seagen at a sizable premium is exactly the kind of news the beleaguered biotech industry could use in 2022. But based on Seagen’s stock price, investors are plainly skeptical that a deal might ever come to fruition.
Seagen is trading about 12% below the roughly $200 a share Merck is reportedly offering for the company, a spread analysts attribute to regulatory uncertainty. The FTC has repeatedly promised to take a hard look at pharmaceutical mergers that might stifle competition, and Merck, maker of the top-selling cancer treatment Ketruda, buying the oncology-focused Seagen could attract scrutiny. The government has already blocked chipmaker Nvidia’s $40 billion bid for a rival and Lockheed Martin’s $4 billion offer for another rocket manufacturer.
None of Seagen’s marketed treatments directly competes with Keytruda, but consolidating cancer medicines would theoretically give Merck greater pricing power. And with Democrats pushing for action on drug prices ahead of the midterm elections, a Merck-Seagen merger could fall through the cracks. | More reads - Health tech funding is down. Here’s what investors make of the market. STAT
- ‘No big company is coming to the city’: biotech developer bemoans New York’s status. Financial Times
- Pfizer pill prescribing power spurs pharmacist calls to Medicare. Bloomberg
| Thanks for reading! Until tomorrow,  | | | |
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