A Nobelist's cancer startup makes waves in immunotherapy

Stanford University biochemist Carolyn Bertozzi won the Nobel Prize in chemistry last year after inventing a new field of study to get a closer look at the thicket of sugars that encase some cancer cells. Now, the startup she co-founded is pressing forward to translate her lab's work into tumor-killing drugs.

As STAT's Angus Chen reports, the company, Palleon Pharmaceuticals, is targeting those sugars, called glycans, which often help tumors evade detection by the immune system. The idea is to strip cancer of its defenses, exposing it to T-cells and potentially helping the many patients who don't respond to existing immunotherapies.

Palleon presented an early glimpse at its progress at the American Association of Cancer Research meeting this week, with results from a Phase 1/2 clinical trial showing preliminary signs of activity and safety.

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Blockbusters

Just saying 'GLP-1' is good for business

Shares of Teladoc, a telehealth company in steady decline, rose more than 10% yesterday after the company said it would start prescribing novel weight-loss treatments like Novo Nordisk's Wegovy, the latest illustration of investor confidence in what is expected to grow into a $100 billion market.

The news is that, starting next quarter, Teladoc will expand its provider-based care business to include weight management and diabetes prevention, giving customers access to GLP-1-targeting drugs like Wegovy and Eli Lilly's Mounjaro.

Prescribing GLP-1 drugs is only going to translate to 1% growth for Teladoc's 2025 revenue, SVB Securities analyst Stephanie Davis wrote in a note to clients, which makes the stock reaction look a little overblown. But investor exuberance over the next generation of weight-loss medicines is such that any exposure to the market seems to create outsize value. Last month, WeightWatchers saw its share price double after paying $106 million for a telehealth company that specializes in weight management and prescribes GLP-1 drugs.

Earnings

As goes J&J

Because Johnson & Johnson is the largest health care company in the world, its financial fortunes tend to be a bellwether for the industry at large. And parsing J&J's positive results from the last quarter, released yesterday, analysts see hope that the pharmaceutical business is in good shape despite a difficult macroeconomic environment.

J&J beat Wall Street's estimates on both sales and profits in the first quarter, driven largely by its pharma division, which grew about 7% over the same period last year. The company also raised the midpoint of its 2023 revenue growth projections from 4% to 5%.

That bodes well for the rest of the earnings season. And it supports the idea that despite inflation and mounting fears of a recession, people still go to their doctors and fill their prescriptions, an encouraging note for health care as a whole.

Supply chain

Mark Cuban is targeting PBMs

Mark Cuban's discount drug company, which recently expanded from generics to branded medicines, is stitching together a network of retail pharmacies in an effort that could eventually challenge pharmacy benefit managers.

As STAT's Ed Silverman reports, the Mark Cuban Cost Plus Drug Company has recruited three dozen pharmacies around the U.S. that will accept a card that consumers can use to purchase prescription medicines at lower prices. In the short term, it would compete with popular discount websites like GoodRx, but if it grows large enough, Cuban's company could contend with PBMs, which use their large networks of pharmacies to extract rebates from drug manufacturers.

Cuban's company expects to entice pharmacies to join the program by offering them an option to purchase medicines at lower prices than those they would pay wholesale suppliers. The pharmacy would get an $8 dispensing fee, which includes what would otherwise be the $5 shipping fee consumers pay when ordering from the Cuban company's website.

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