An IPO that actually popped

Back in biotech's mid-pandemic heyday, when scores of companies went public, investors got accustomed to what's called the IPO pop: an immediate boost to the share price the moment a given firm started trading. On average, 2020's biotech IPOs rose more than 30% on the day of their debuts. That all changed in 2022, when the number of IPOs dwindled and their immediate returns sank, and now it's 2023 and biotech companies can barely go public at all.

Then came Acelyrin, which raised $540 million in its IPO on Friday — the most since Sana Biotechnology in 2021 — and then traded up about 30%. The company now commands a roughly $2 billion valuation, meaning it's bigger than yesteryear IPO successes Sana, Verve Therapeutics, and Lyell Immunopharma.

But unlike the many preclinical platform companies that won soaring valuations during biotech's boom, Acelyrin has a late-stage drug in the form of izokibep, a subcutaneous injectable meant to compete with blockbuster anti-inflammatory medicines from Novartis and Eli Lilly. Later this year, the company will have pivotal data on whether the drug can treat the skin disorder hidradenitis suppurativa, and it's running trials in psoriatic arthritis, axial spondyloarthritis, and uveitis.

Markets

Biotech might benefit from some shrinkage

Speaking of biotech's early-Covid-19 zenith, somewhere between the umpteenth IPO and yet another preclinical pivot, it became clear that the world probably didn't need that many public biotech companies. And when the corresponding downturn left scores of biotech firms with negative enterprise values, the point became inarguable.

But that problem might be gradually getting better. The number of biotech buyouts has exceeded the number of IPOs in both 2022 and 2023, according to an analysis from Evercore ISI. Add that to the many reverse-mergers and occasional outright bankruptcies, and the supply of public biotech companies could finally approach the declining demand.

And history suggests that'll be good for the sector. According to Evercore ISI, the last time buyouts outpaced IPOs for an extended period of time, the Nasdaq Biotech Index nearly doubled over the next two years.

Genome editing

Doudna: Let's make sure CRISPR 'is not just going to make a few people rich'

Months ahead of the expected first approval of a CRISPR-based medicine, Jennifer Doudna wants to remind the world that her revolutionary discovery can only reach its potential if it reaches those who need it most.

"How do we make sure that a technology like CRISPR — you know, no offense intended — is not just going to make a few people rich?" she told a room full of executives and investors at the STAT Breakthrough Summit in San Francisco, "but it's going to actually have a broad, real-world impact in the future?"

That question will be vital later this year, when the FDA may approve Vertex Pharmaceuticals' CRISPR-based treatment for sickle cell disease. The drug appears to be curative, freeing patients from the disease's hallmark pain crises, but is expected to cost upward of $2 million. "At a price tag like that, it's really going to be a limited number of people that get access," Doudna said. "How do we deal with that?"

Read more.

ESG

Activist shareholders challenge drug industry policies on patents, prices

Investors in eight drug companies will vote on proposals challenging policies on patents, lobbying, and prices that social-activist shareholders say are responsible for inequitable access to pharmaceuticals.

The Interfaith Center on Corporate Responsibility managed to get 11 proposals aimed at promoting social change up for a vote at the annual meetings of AbbVie, Eli Lilly, Gilead Sciences, Johnson & Johnson, Merck, Pfizer, and Regeneron Pharmaceuticals, STAT's John Wilkerson reports.

Most of the proposals request that companies report on how patent practices, including patent thickets, impact patients' access to medicines. A second group of proposals, focused on Covid-19 vaccines and drugs, asks whether companies factor government funding into prices and call on companies to share vaccine intellectual property technical know-how with manufacturers in low- and middle-income countries. And one proposal challenges Eli Lilly's lobbying spending.

More around STAT