M&A
Will Novartis' latest deal actually happen?
STAT's Adam Feuerstein is betting no, based on reporting that points to a doubtful path forward for MorphoSys and its late-stage treatment for blood cancer.
The backstory is this: Novartis signed an agreement to purchase MorphoSys for nearly $3 billion, largely to acquire pelabresib, a treatment for myelofibrosis. In its pivotal study, pelabresib met its primary goal but missed a key secondary endpoint.
That's where the problems start. As Adam reports, the FDA has been clear on the approval standards for myelofibrosis treatments, and MorphoSys' drug doesn't meet them. The merger with Novartis is expected to close in the next four months, during which time MorphoSys is slated to meet with the FDA. If that meeting doesn't go well — and Adam believes it will not — odds are Novartis will terminate the transaction and walk away.
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MASH
The GLP-1 panic is alive and well
Yesterday, Eli Lilly said its GLP-1-targeting medicine met its primary goal in mid-stage study enrolling patients with MASH, the obesity-related liver disease formerly known as NASH. And then biotech companies working in MASH, including one weeks away from an expected FDA approval, fell by double digits.
The news is that tirzepatide, which Lilly sells as Mounjaro and Zepbound, led to resolution of MASH for 74% of patients in a Phase 2 trial. Lilly said the drug also had a "clinically meaningful" effect on liver fibrosis, one of the hallmarks of MASH, but the company did not say whether that difference met the threshold of statistical significance.
What's curious is how this datapoint could so dramatically affect the fortunes of a company like Madrigal Pharmaceuticals, which lost as much as 17% of its value yesterday. Madrigal's drug, up for approval on March 14, has demonstrated a significant improvement in liver fibrosis in a Phase 3 study.
There's a compelling theory that medicines like Zepbound and Wegovy, by virtue of their ability to reduce body weight, will shrink the market for MASH therapies by preventing patients from developing the disease in the first place. But until one of them can demonstrate a reduction in fibrosis, there will almost certainly be demand for drugs like Madrigal's.
Pharma
Lilly and the weight of impossible expectations
Eli Lilly's stock price is up more than 15% in 2024, and it has doubled over the past 12 months, driven higher by its aforementioned GLP-1 treatment and a creeping consensus that the roughly 150-year-old company has entered a sort of drug development renaissance.
But when a company reaches such rarified heights — Lilly is now valued at about $670 billion — is there anywhere to go but down?
As STAT's Matthew Herper writes, Lilly's stock price is arguably getting ahead of itself, and the latest evidence came with the company's fourth-quarter earnings. The company's headline financial success was in part driven by an accounting change, and the data in MASH, while positive enough to roil the biotech market, didn't quite measure up to the outsized expectations placed on Lilly.
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