May 25, 2023

The need-to-know this morning

The leadership of Illumina, the embattled maker of DNA sequencing technology, is up for grabs today. At the company's annual meeting, shareholders will be voting on who should be on its board of directors. Carl Icahn, the billionaire activist investor who launched a proxy fight earlier this year, may win enough votes to install at least one of his three nominees to the board, according to Reuters.
The annual ritual known as the ASCO abstract drop kicks off at 5 p.m. ET. For those less familiar, this is the highly anticipated moment when the American Society of Clinical Oncology posts online the cancer research abstracts that will be presented at its annual meeting, opening on June 2. If you're interested in receiving STAT's pop-up ASCO newsletter, click here.

biotech

Annexon claims a silver lining in clinical failure

In a mid-stage study, Annexon Biosciences' treatment for the eye disease geographic atrophy had no effect on the retinal lesions that characterize the disorder, meaning the study failed to meet its primary endpoint. But the company believes its drug is salvageable thanks to a curious finding on a secondary goal.

As STAT's Adam Feuerstein reports, Annexon enrolled 270 participants with geographic atrophy, administering regular injections of its drug, ANX007, or placebo into the eye over the course of a year. In the end, ANX007 had virtually no effect on the lesions that eventually lead people with the disease to lose their vision.

But in a separate analysis conducted by Annexon, 8% of participants treated with ANX007 for one year couldn't read at least 15 letters, or three lines, on a standardized eye chart. By comparison, 21% of participants treated with sham injections reported the same vision loss. That, according to the company, suggests the drug somehow preserves vision despite having no effect on the lesions that destroy it.

Read more.

Regulatory

What the Aduhelm debacle teaches us about Medicare

Medicare's polarizing decision to withhold coverage of Alzheimer's disease treatment Aduhelm was, depending on whom you ask, a victory for sensible policy or a shocking regulatory overreach.

But as Kerry Dooley Young writes in STAT, it also revived longstanding questions about how the federal program determines whether it will pay for new drugs and devices. It all comes back to Medicare's foundational mandate, to cover products that are "reasonable and necessary" for the diagnosis or treatment of an illness or injury.

Precisely defining those two words has sparked debate for decades. And now, as Medicare moves to revisit its Aduhelm ruling in light of positive clinical data from similar medicines, the issue is certain to come under renewed scrutiny.

Read more.

M&A

A pandemic starlet circles the drain

Back in 2021, Atea Pharmaceuticals rose to a roughly $6 billion valuation on the promise of its oral treatment for Covid-19. Then that drug failed in a mid-stage trial, and a series of related delays made it such that Atea missed the entire pandemic market. The company has lost 94% of its value in the past two years.

But Atea still has its Nasdaq listing, and, with IPOs few and far between in 2023, that's apparently enough to elicit takeover interest. The privately held Concentra Biosciences submitted a bid to buy Atea for $5.75 a share, a 55% premium to its previous trading price, and an 80% cut of any proceeds from selling off the company's remaining pipeline. In March, Concentra tried and failed to acquire Jounce Therapeutics, another publicly traded biotech company that had fallen on hard times.

In one sense, the Atea situation is a downbeat referendum on just how far the industry has fallen in the eyes of the financial markets, which were once eager to underwrite even the most speculative of biotech IPOs. But in another, it's a heartening sign for the many publicly traded biotech companies barely staying afloat. Even in the worst-case scenario, you can always auction off that Nasdaq listing.

Chart of the day

What was that about?

D3 vis exported to PNG (59)

Moderna, a company expecting a dramatic decrease in annual revenue, saw its share price soar about 13% on Tuesday, adding about $5 billion to its valuation despite disclosing no data, deals, or news of any kind. And then, yesterday, it sharply declined, giving up most of the gains as quickly as they arrived.

Curiously, its mRNA rival BioNTech traded in tandem, rising 12% on Tuesday only to dip the next day. And so did CureVac, a firm famous for failing to develop a Covid-19 vaccine. The only discernible cause is reports of rising Covid-19 rates in China, but it's difficult to imagine how that could benefit three Western biotech companies that do not currently market their products in that country. As Bloomberg notes in its coverage of the spike, China is working quickly to deploy domestically developed vaccines against the latest variant, not reaching out to foreign manufacturers.

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