January 26, 2024

The need-to-know this morning

Advisers to the European regulatory agency reaffirmed a previous recommendation to withdraw from the market Translarna, a treatment for a certain type of Duchenne muscular dystrophy made by PTC Therapeutics, because its efficacy could not be confirmed. Translarna was granted European conditional approval in 2014, but subsequent studies designed to confirm the drug's benefit were negative.
European regulatory advisers also recommended an expanded approval for Abecma, the CAR-T therapy made by Bristol Myers Squibb, to cover treatment of patients with less advanced stages of multiple myeloma.

Markets

IPOs can pop in 2024

The year's first biotech IPO, from CG Oncology, got off to a good start when the company up-sized its offering and priced its shares above its expected range. And then, as if it were 2021 again, CG Oncology actually traded up.

The company opened at $29 a share, about 50% above its offering price, and then rose to as high as $40 before closing at $37. CG Oncology, now valued at about $2 billion, raised $380 million in its IPO, money that will fund the development of its late-stage treatment for bladder cancer. (If you want to find a half-full glass in the story, the company left quite a bit of money on the table, as the market was clearly willing to pay for its shares more than bankers advised.)

CG Oncology's one-day success bodes well for the growing queue of biotech companies planning to go public in the early weeks of 2024, including ArriVent Biopharma, Metagenomi, and Kyverna Therapeutics.

Podcast

Are bolt-ons good for business?

And when is it safe to say someone overpaid?

We cover all that and more this week on "The Readout LOUD," STAT's biotech podcast. We discuss how biotech's downturn has made life difficult not just for startups but also the venture capitalists they rely on for much-needed funding. We also take a look at Gilead Sciences' struggle to turn itself into an oncology company and the latest biotech to get bought out by a major pharma firm.

Listen here.

Markets

Lilly > Tesla

At least, as of yesterday, in terms of market value. Eli Lilly, which has more than doubled in value since 2022, is now worth about $600 billion, eclipsing Elon Musk's electric car company, which has fallen about 25% since the start of the year.

There's only so much one can read into the fates of two completely unrelated companies, but here's a thought: For years, biotech specialists have pointed out that if generalist investors reallocated even 2% of their tech investments into the drug industry, it would make a massive difference for the comparatively small pond that is biotech.

Through that lens, Lilly overtaking Tesla, to the extent it has any meaning at all, points to a future in which fund managers consider treating obesity and Alzheimer's disease to be a better use of capital than making cars that sometimes don't work when it's cold, which would benefit biotech as a whole.

Washington

Pharma's messaging could use some work

The CEO of Merck, among the pharmaceutical executives called to testify before Sen. Bernie Sanders' health committee, offered a curious reason for declining the invitation: As a trained attorney, he is not an expert in drug pricing.

Sanders, as STAT's Rachel Cohrs reports, knows a slow pitch over home plate when he sees one. "Well, maybe, just maybe, the CEOs of these pharmaceutical companies should become experts on why they are ripping off the American people," he said yesterday. (Merck said the head of its U.S. business, who leads the company's pricing strategy, would be available to testify.)

Sanders' comments come as the Senate health committee prepares to vote on whether to subpoena the CEOs of Merck and Johnson & Johnson to testify on drug prices, which would mean exercising an authority it hasn't used in more than 40 decades.

What's unclear is why Merck and J&J haven't just said yes to the committee's invitation. The heads of Eli Lilly, Sanofi, Novo Nordisk, and Moderna have all appeared at Sanders-led hearings, and they came out just fine. Is the prospect of fielding some theatrically phrased questions really worse than looking like you're afraid of a senator?

Read more.

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