What happens to Amylyx if a rival ALS trial works?

Amylyx Pharmaceuticals is in a strange situation. There's a pivotal study, with data expected any day now, that will determine whether a treatment that would rival the company's approved ALS drug can slow the progression of the disease. But the results, whether positive or negative, have more complicated implications for Amylyx than one might expect.

As STAT's Adam Feuerstein writes, that's because the ongoing study is testing one of the two main ingredients in Relyvrio, Amylyx's approved drug, on its own. If the trial is positive, it could bode well for Amylyx's own pivotal study, slated to read out later this year. But if the results are too positive, it might persuade patients and physicians to reach for the single ingredient, which is cheap and widely available, rather than going for Relyvrio.

Where things would get even more complicated is if the study fails entirely. On the one hand, that would eliminate a near-term threat to Amylyx's market share, but on the other, it would likely be read as a bad omen for the company's own trial.

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Markets

Biotech is still at the mercy of macro

An emerging theme for biotech stocks in 2024 is that no matter how many mergers, clinical successes, and FDA approvals, nothing moves the market like macroeconomics.

On Tuesday, the closely watched XBI biotech index fell more than 5% on the news that inflation isn't declining at quite the rate economists had forecast. That means Fed cuts to interest rates, widely expected among investors, probably aren't coming as quickly or frequently as predicted. And, trickling all the way down to biotech, it means risky asset classes — like shares of companies trying to invent new drugs — are that much less attractive in the eyes of the market.

Biotech went on to recover nearly 3% yesterday amid a market-wide sense that perhaps Tuesday's reaction was a little overcooked. But the whole affair is another reminder to biotech's many specialists that the sector is a small school of fish prey to the whims of a massive ocean.

M&A

No one wanted to buy Aurinia

Aurinia Pharmaceuticals, maker of an FDA-approved lupus treatment, fell 20% this morning after disclosing that its six-month strategic review resulted in little more than a bunch of fruitless meetings.

The company talked to more than 60 potential partners or acquirers, according to a statement, which led to a single, non-binding "expression of interest." That expression progressed to a due diligence process, and at that point the interest apparently dissipated.

Aurinia's disclosure ends any speculation that a buyout was in the offing, and it dispels a particularly imaginative rumor involving Gilead Sciences and a private jet. Now, without a deal, Aurinia is instituting austerity. The company will cut at least 25% of its staff and discontinue development in two pipeline drugs, focusing solely on the commercialization of Lupkynis, its approved treatment.

Financials

Pharma's contractors might finally be on the rebound

IQVIA, a multibillion-dollar firm that sells services to the drug industry, saw its share price rise 5% yesterday after reporting financial results that beat Wall Street's estimates, bucking months of declines and revisions among its peers.

Most encouraging was an increase in demand for IQVIA's contract research services, with requests for proposals up double digits and new bookings coming in higher than analysts' expectations.

Biotech's lengthy downturn has been particularly difficult for companies that count on the industry for clientele. Thermo Fisher Scientific, Lonza, and Revvity have all curtailed their financial projections over the past year to account for declining demand. IQVIA's strong quarter, coupled with biotech's recovery in the fall, could be a leading indicator of better days ahead.

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