| | | |   | Good morning, all. Damian here with an update on Illumina's mounting issues, news of an enviable return, and SEC trouble for a banner hedge fund. | | | Illumina’s win-win strategy is losing Back in 2020, when Illumina began its regulatorily risky effort to buy Grail for $8 billion, there was some “heads you lose, tails I win” logic at work. If antitrust authorities didn’t spike the deal, Illumina would be buying into the high-potential market for early cancer detection. And if they did force Illumina to sell Grail, it would be poised to make a tidy return.
But that’s not how things have played out. As STAT’s Matthew Herper writes, Illumina said yesterday that despite its appeals, the company might be unable to stop the European Commission from forcing it to divest Grail. And the odds of doing so profitably appear to be long.
Finding a buyer for Grail would likely be difficult. And spinning the company out in an IPO — something Grail considered on its own before agreeing to the merger — would almost certainly lead to a valuation below the $8 billion Illumina paid.
Read more. | A preclinical deal with an eight-fold return Good Therapeutics, a private company that raised just $30 million in venture financing since its 2016 foundation, said this morning it had signed a deal to sell itself to Roche for $250 million.
That spells a roughly eight-fold return for Good’s investors, and it marks an encouraging datapoint in what remains a difficult market for biotech startups, which have struggled to maintain their valuations in the face of sharp decline in initial public offerings. Good, which was still in the preclinical stage of development, is also spinning out its technology into new company funded by the same syndicate.
“We’ve gone from basically an idea on a napkin to a program Roche was willing to spend $250 million for for $30 million,” said John Mulligan, Good’s founder and CEO. “I think that’s how biotech companies should work: super focused, really efficient.”
Read more. | Learn how to Support the Patient from all Angles MassBio's 2022 Patient Advocacy Summit showcases the best practices and cutting-edge examples of how life sciences companies can more fully incorporate the patient voice into the work they do throughout the drug development cycle. Join the patient advocacy community on September 15 at the MassBioHub as we explore this topic with keynote addresses, a panel discussion, and a professional development workshop for patient advocates. This is a hybrid event, register here. | A banner biotech fund runs into SEC trouble Perceptive Advisors, a brand-name biotech hedge fund with more than $10 billion under management, settled with the SEC over charges that it failed to properly disclose conflicts of interest related to multiple blank-check companies.
The charges, disclosed yesterday, claim Perceptive invested clients’ money into SPACs without adequately explaining that the firm’s personnel owned stakes in those same entities. That created a conflict of interest, according to the SEC: Because SPAC sponsors only make money when the company finds a merger target, Perceptive could have an incentive to recommend mergers that were not necessarily in the interest of its clients.
The settlement, which does constitute an admission of guilt, added up to just a $1.5 million fine and a censure. But in the competitive world of running a hedge fund, having “SEC charges” and your name in a press release is never good for business. | Should pharma do business with Philip Morris? The innocently named Vectura Fertin Pharma is a multibillion-dollar pharmaceutical outfit whose list of partners includes Novartis and GSK. But its owner, Philip Morris International, is a purveyor of tobacco products that kill millions of people each year, raising ethical alarms among researchers.
As STAT’s Olivia Goldhill reports, Philip Morris’ acquisitions of Vectura, Fertin, and, more recently, OtiTopic have helped the company diversify its business. Embracing health care also gives the company access to regulators and policymakers that have long since been denied to tobacco companies.
“They’re adopting the tactics of the pharmaceutical industry,” said Louis Laurence, researcher at the University of Bath’s Tobacco Control Research Group. “They’re putting on the cloak of Big Pharma.”
Read more. | More reads - Pharma donations to patient charities may violate the ‘spirit’ of anti-kickback laws. STAT
- Bharat Biotech's Covid-19 nasal vaccine approved for restricted use in India. Reuters
- White House signals most people will only need annual Covid booster. STAT
| Thanks for reading! Until tomorrow,  | | | |
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