April 26, 2023

The need-to-know this morning

It's another day in a busy earnings week. Roche's total sales fell 3% in the quarter, largely due to lower demand for Covid-19 tests. But its pharma division sales grew 9%, driven primarily by higher sales of the Covid medicine Ronapreve and eye disease therapy Vabysmo. The company made no changes to its financial forecasts for the rest of the year.
In its pipeline update Wednesday, Roche also formally acknowledged that a closely watched Phase 3 study of its TIGIT-targeted immunotherapy called tiragolumab in lung cancer has continued to a final survival analysis expected in the third quarter. This is not encouraging news, because it confirms speculation that an interim look at the study conducted in February wasn't robust enough to deliver positive results. TIGIT was once the buzziest target in cancer immunotherapy; today, not so much.
Over at GSK, first-quarter sales beat consensus by 7%, led by strong performance from the vaccines business. On an adjusted basis, earnings for the quarter were 11% higher than consensus. The company reiterated its financial outlook for the remainder of the year.
The European Commission released long-awaited draft legislation to reform the way medicines are brought to market and accessed across much of Europe.

Startups

The people behind Alnylam have a new idea for RNA

A new biotech company founded by veterans of Alnylam Pharmaceuticals and Arch Venture Partners has raised a $270 million Series A round to push the limits of what RNA-based treatments can do.

As STAT's Allison DeAngelis reports, the company is called Orbital Therapeutics, and it's making therapies out of circular RNA, an approach to genetic medicines that promises to be more durable than the mRNA treatments made by Moderna and easier to deliver than the RNAi technology that made Alnylam famous.

"My vision is simple: Build another Alnylam-like company, with the power of a platform that yields real product innovation," said Orbital co-founder John Maraganore, who served as the founding CEO of Alnylam until 2021. (In case you were wondering, Alynlam's Series A totaled $2.5 million, but that was two decades of biotech inflation ago.)

Read more.

Regulatory

FDA approves Biogen's treatment for rare form of ALS

The FDA granted conditional approval to Biogen's treatment for a rare, genetic form of ALS, the company said yesterday, basing its decision on preliminary evidence that the medicine could benefit patients with the fatal neuromuscular disease.

As STAT's Adam Feuerstein reports, the drug, Qalsody, is indicated for patients with a form of ALS caused by inherited mutations in a gene called SOD1, which accounts for about 2% of all cases of the disease and affects about 300 people in the U.S.

In a pivotal study, Biogen's drug reduced patients' levels of the SOD1 protein but led to only a modest slowing of neurologic and functional decline compared to a placebo, missing its primary goal. The FDA's approval is based on Qalsody's effect on a protein called neurofilament light chain, which is believed to predict neurodegeneration.

Financials

Illumina promises better margins in its Icahn endgame

With Carl Icahn pressuring shareholders to shake up its board, Illumina said it would significantly improve its profit margins in the years to come, promising to run a leaner business as it faces an uncertain regulatory future.

Illumina plans to increase its margins from about 17% in the last quarter to 25% in 2024 and 27% in 2025, the company said in its earnings statement yesterday. The genome sequencing giant will trim about $100 million from its spending later this year, which comes on top of cuts disclosed in 2022.

What Illumina didn't commit to is cutting bait on Grail, the cancer testing company it acquired for roughly $8 billion without securing the blessing of U.S. and European antitrust authorities. Those regulators have since all but blocked Illumina from keeping the cash-burning company, leaving management in an uncomfortable situation as Icahn, demanding an immediate Grail divestiture, tries to win over shareholders. The company's annual meeting, scheduled for May 25, will determine which side wins.

Chart of the day

Remember CureVac?

D3 vis exported to PNG (52)

Here in the U.S., Novavax gets a lot of attention for fumbling a world-historic opportunity to make billions of dollars from its effective vaccine for Covid-19. But spare a thought for CureVac, a German mRNA pioneer that entered into a bake-off with peers Moderna and BioNTech only to repeatedly pivot when data didn't go its way.

CureVac has lost more than 90% of its value over the past two years as it gradually became clear that the company's Covid-19 vaccine would never become a commercial product. The more painful admission came in 2022, when CureVac pivoted to vaccines that use modified mRNA — the kind that made scientists Katalin Karikó and Drew Weissman famous, and that Moderna and BioNTech turned into blockbuster products. CureVac had spent a decade insisting that unmodified mRNA was the wiser path, allowing for lower doses and, conceivably, better efficacy.

Now CureVac, on its third CEO since 2020, is years behind its mRNA peers in the quest to develop vaccines for Covid-19 and influenza and has only enough cash to keep the business running into 2025, according to yesterday's earnings report.

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