July 25, 2023

The need-to-know this morning

Fibrogen CEO Enrique Conterno resigned due to personal reasons. He will be replaced on an interim basis by Thane Wettig, the company's chief commercial officer.
Humanigen is considering bankruptcy or other insolvency proceedings.

Financials

Biogen's chance to turn the page

Biogen on Tuesday announced a new expense-reduction plan that will result in net savings of $700 million by 2025, including layoffs of 1,000 employees. The company's second-quarter earnings and revenue both beat Wall Street consensus estimates.

Reducing Biogen's expenses has been a strategic focus of CEO Chris Viehbacher since he took the reins of the storied biotech last year — and one welcomed by Wall Street as a way to close the book on a volatile period in the company's history. But since last month's boardroom controversy, Biogen's share price has fallen more than 10%, signaling that "investors are clearly concerned it is a continuation of a less-than-ideal track record," Baird analyst Brian Skorney wrote in a note to clients, previewing today's earnings announcement.

This morning, Viehbacher gets a chance to reset the narrative, as Biogen will host its quarterly earnings call.

The majority of the questions will be about Leqembi, the Eisai-partnered Alzheimer's disease treatment that won full FDA approval earlier this month. But analysts will also probably try to get Viehbacher to address the credibility issue, too. His hiring, coupled with the departure of a few long-tenured members of the board, was supposed to be a much-needed refresh. Investors would like to hear Viehbacher explain how Biogen, a company historically hamstrung by discord between its board and CEO, really is entering a new era.

Biotech

Stoke's seizure drug disappoints in data update

Treatment with a novel epilepsy treatment from Stoke Therapeutics led to disappointing benefits in data from an ongoing trial, the company said today, forcing management to reconsider how best to dose its investigational medicine.

As STAT's Adam Feuerstein reports, three monthly injections of Stoke's drug resulted in a median 18% reduction in convulsive seizure activity among 16 patients with Dravet syndrome, a rare form of epilepsy. That's a marked decline from an earlier cut of data, from just six patients, in which the drug showed a median 55% reduction in seizure activity.

A higher dose might solve the problem. In a separate study, eight Dravet patients given a more than 50% larger dose showed a median 42% reduction in seizure activity. For three of those patients, followed for six months, seizure reductions fell by 89%.

Read more.

Diagnostics

Why is testing for Alzheimer's so arduous?

By next year, neurologists will likely be able to prescribe two disease-modifying therapies for Alzheimer's disease, choosing between a pair of medicines that can modestly but meaningfully delay the advance of dementia. But between the brain scans, spinal taps, and patient interviews, figuring out which patients will benefit from those medicines is shaping up to be a debacle.

As STAT's Brittany Trang reports, that's where blood tests could revolutionize the process. As it stands, patients who want a new medicine like Eisai's Leqembi have to first test positive for the Alzheimer's-related brain plaque called beta amyloid, which requires either a PET scan or a lumbar puncture to extract cerebrospinal fluid. Because there are only so many PET centers in the U.S., and few people want a needle to the spine, neurologists are worried about a potential bottleneck that will waste patients' valuable time before figuring out whether they'd benefit from treatment.

Companies including Roche and Quanterix are working on tests that would diagnose Alzheimer's with a draw of blood rather than a brain scan. It's a complicated task, in part because blood is more difficult to parse than cerebrospinal fluid, but scientists are optimistic they can in time make diagnosing Alzheimer's a faster and cheaper process.

Read more.

Markets

Biotech companies are collapsing as often as getting bought

That's according to an analysis from Stifel, which looked at all the biotech companies that have disappeared from the public markets this year and found that the same number have functionally gone out of business as have sold themselves to a larger firm.

Of the 26 biotech companies departing the Nasdaq in 2023, 13 were acquired and 13 either declared bankruptcy, liquidated, or merged into a privately held firm, according to Stifel's latest sector update.

While a buyout deal is preferable to bankruptcy for a given company's shareholders, that culling of the herd is undoubtedly good for biotech at large. Biotech is up about 2% for the year, following a massive drop in 2022. And the number of biotech companies with a negative enterprise value — meaning their shares are worth less than their cash reserves — has fallen from an October high of 230 to 165, by Stifel's count.

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