SynBioBeta recently shared some numbers illustrating the increasing allure of synthetic biology to investors. During the first half of 2020, total financing in the sector reached $3.041 billion (among 56 companies). During the first half of 2019, it was $1.9 billion (among 65 companies). The largest financing, $700 million, was raised by Sana Biotechnology, a developer of therapies that are based on engineering cells.
The synthetic biology money train continued into the second half. In September, Zymergen raised $300 million intended to propel its expansion into the $3 trillion chemical and materials industries; accelerate the manufacture of its biofabricated Hyaline film for electronics applications; and commercialize additional products with applications in electronics, agriculture, consumer care, and healthcare.
One of the most closely watched drug development stories in 2021 will be whether the FDA approves aducanumab, the Alzheimer’s disease candidate that Biogen is co-developing with Eisai. Aducanumab is being evaluated under priority review, with a target action date of March 7, 2021.
In November, aducanumab ran into an unexpected obstacle on the road to FDA approval after an advisory panel recommended against approving the drug. The FDA’s Peripheral and Central Nervous System Drugs Advisory Committee balked at endorsing aducanumab. In March, Biogen halted EMERGE and ENGAGE, each a Phase III trial of the drug, after analyses indicated that the trials were unlikely to meet their primary endpoints. Then, in October, Biogen reported that a larger dataset for the EMERGE trial had become available, and that analysis of this dataset had showed a significant reduction in clinical decline. Biogen also indicated that in the ENGAGE trial, data from a subset of patients supported the new conclusions about the EMERGE trial.
“We think aducanumab will get a complete response letter in early 2021 requesting another large trial ahead of approval. We assume a 40% probability of approval in 2024,” Andersen said. “If Biogen gets a complete response letter, they will have to decide if they want to continue investing in aducanumab, or focus efforts on a similar antibody, BAN2401, that is already in a couple of Phase III studies with partner Eisai.”
Andersen added that aducanumab will either lead to more attention and higher valuations for Alzheimer’s programs, such as the programs at Roche and Eli Lilly, or dampen the enthusiasm for therapies that are based on clearing amyloid plaques: “Either way, we expect continued investment in other mechanisms of action, especially tau, and other modalities that can better cross the blood-brain barrier, like Denali’s small molecule inhibitors of leucine-rich repeat kinase 2 (licensed by Biogen), or RNA-based therapies, like those of Ionis Pharmaceuticals partnered with Biogen.”
According to Andersen, drug developers also continue to see progress in oncology. She cited antibody-drug conjugates, like those of Seagen (formerly Seattle Genetics), and two therapies with breast cancer indications—AstraZeneca’s Enhertu® (fam-trastuzumab deruxtecan-nxki) and Trodelvy™ (sacituzumab govitecan-hziy), which Gilead Sciences will inherit when it finishes acquiring Immunomedics. She added, “We expect more combination data with PD-1/PD-L1 antibodies for multiple bispecific antibody programs and other antibodies as well.”
Private equity isn't the only potential roadblock for big pharma buyers.
Biotech companies have been raising exceptionally large amounts of money from both venture capitalists and public investors. Data from Pitchbook and SVB Leerink show that venture deals in this space came close to $25 billion last year, an increase of more than 50% from 2019. Biotechs also conducted a record-breaking number of initial public offerings in 2020, with at least 31 raking in $200 million or more, according to data compiled by BioPharma Dive.
While the influx of cash does create new biotechs, and consequently more targets, it can also allow these companies to operate longer without needing to entertain a deal with a larger drug company.
"The principal argument that big pharma makes is: 'We'll give you plenty of money to develop your drug.' Well, guess what, there's plenty of money elsewhere," Cable said.
"Their competition," Cable added, "for the most part is not necessarily one another. It's not like it's Pfizer against Bristol Myers Squibb, or Merck against Sanofi. Their competition is continuing independence."
Buyers therefore may have to adjust how they work with and court biotechs.
That was the case for Gilead, which last year deployed tens of billions of dollars in pursuit of becoming a leader in cancer drug development. Gilead's chief financial officer recently detailed to BioPharma Dive how, to get certain deals done, his team had to be open to less conventional terms.
Big pharma firms have truly warmed to gene therapy to expand their pipelines in 2021 and beyond. Bayer agreed to acquire Asklepios BioPharmaceutical (AskBio) for up to $4 billion in October, followed two days later by Novartis purchasing ocular gene therapy developer Vedere Bio for up to $280 million. Roche agreed to spend up to $1.8 billion to use Dyno Therapeutics’ CapsidMap™ platform to develop next-generation adeno-associated virus (AAV) vectors for gene therapies for central nervous system diseases and liver-directed therapies.
Pfizer invested $60 million in Homology Medicines three days after Homology presented positive data from a Phase I/II trial (NCT03952156) for pheNIX, a gene therapy for adults with phenylketonuria (PKU). Among biotech giants, Biogen and Sangamo Therapeutics are developing and commercializing Sangamo gene regulation therapy candidates through a collaboration that could generate $2.7 billion-plus for Sangamo.
A continuing challenge in 2021 will be preventing tragedies arising from gene therapy clinical trials. In October, Lysogene disclosed that a five-year-old girl with mucopolysaccharidosis type IIIA (MPS IIIA) died in a Phase II/III trial (NCT03612869) designed to evaluate the company’s LYS-SAF302.
Between May and July, Audentes Therapeutics, which was acquired by Astellas Pharma for $3 billion in January 2020, acknowledged the deaths of three patients in a Phase I/II trial (NCT03199469) assessing its X-linked myotubular myopathy (XLMTM) candidate AT-132. The 3 were among 17 patients who received AT132 at the trial’s high dose of 3 × 1014 vg/kg. Audentes said all three patients who died showed notable features that included older age, heavier weight, and evidence of preexisting hepatobiliary disease.
“That is definitely a wake-up call for the field to really consider dose escalation more carefully, and to put much more emphasis on CMC [chemistry, manufacturing and control] than simply making a higher potency,” said Guangping Gao, PhD, the Penelope Booth Rockwell Professor in Biomedical Research at the University of Massachusetts Medical School, the director of the Horae Gene Therapy Center and Viral Vector Core, and the co-director of the Li Weibo Institute for Rare Diseases Research.
Despite the deaths, gene therapy did not see the disruption that followed the death of 17-year-old Jesse Gelsinger in 1999. According to the Alliance for Regenerative Medicine, gene therapy financing nearly tripled year over year, rising 178% to $3.5 billion in the third quarter of 2020. Between January and September 2020, financing jumped 114% to $12 billion.
The alliance recorded 373 gene therapy trials during the third quarter of 2020—up 4% from 359 in the second quarter but barely above the 370 reported in the third quarter of 2019. Of those trials, 115 were in Phase I, 223 in Phase II, and 32 in Phase III.
Startups are reliant on clinical research organizations (CROs) to bring a novel drug to the market. However, many CROs have no formal methods to assess the risk to budget. As a result, this leads to a large number of drug trials failing because of a lack of funding. It leads to millions in sunk costs, as well as the loss of potential drugs. BioTech startups are developing clinical trial financial management solutions that address this gap.
The US-based startup Auxilius develops a data-driven, clinical trial financial management platform. The platform helps biotech companies ensure that outsourced partners meet the contract terms, budgets, and milestones. The solution performs proactive scenario modeling to adjust costs and timelines throughout the clinical trials. By managing financial risk, Auxilius’ platform improves the success of clinical trials.
Capital flowed into biopharma companies, as shown by record-high VC investment. That trend is expected to continue in 2021, as are strong if not equally impressive gains in M&A activity, IPOs, and the broader stock market.
The quarterly MoneyTree Report, issued by PwC and CB Insights, showed a record-high $5.9 billion invested during the third quarter of 2020 in biopharma-related industries, dominated by $3.9 billion in 104 deals invested in biotech alone—more than double the $1.9 billion in 74 deals reported for the third quarter of 2019.
“It seems like the biotech and life sciences industry has been pretty much agnostic to COVID-19,” Ousmane Caba, partner, U.S. Pharmaceuticals and Life Sciences, PwC US, told GEN. “COVID hasn’t stopped IPOs, transactions, and M&A. The industry hasn’t been that impacted by the pandemic.”
Two factors have been driving financing in recent months, Caba said. One is the ability to apply data to biology. The third quarter’s largest VC recipient was Recursion, a digital biology company that completed a $239 million oversubscribed Series D financing led by Leaps by Bayer. The other is the longtime interest by drug developers and investors in fighting cancer, especially through technologies applicable to multiple forms of the disease.
Caba observed that the targeting of cancer helped drive a series of big-dollar M&A deals during 2020. Gilead Sciences in October completed its $21 billion acquisition of Immunomedics, which bolstered the buyer’s oncology portfolio with a first-in-class breast cancer treatment that received an accelerated approval from the FDA in April. Illumina plans to buy cancer blood test developer Grail for $8 billion, a deal set to close in 2021. Grail’s ability to apply data also made the company attractive, Caba said.
Also showing strength in 2020 was the market for first-time public stocks. During the first three quarters of 2020, biopharma firms raised a combined $9.32 billion in 51 IPOs, more than double the $3.6 billion garnered in 41 IPOs during the first three quarters of 2019, according to EvaluatePharma.
Overall, biotech stocks enjoyed healthy gains during 2020. As of November 20, the NASDAQ Biotechnology Index stood at $4,364.15, up 22% from $3,581.05 the same date a year ago.
“We do see pharma and biotech as undervalued as we approach the end of 2020,” said Karen Andersen, a healthcare strategist at Morningstar. “Overall, we’re seeing progress with several therapeutic areas. In neurology, even beyond aducanumab, we could see data in 2021–2022 to support new drugs against Huntington’s, amyotrophic lateral sclerosis, Parkinson’s, and Alzheimer’s.”
Genome editing showed in November that it, too, can spark big-money collaborations. Eli Lilly committed up to $2.7 billion toward using Precision BioSciences’ ARCUS® genome editing platform to research and develop potential in vivo therapies for genetic disorders, starting with Duchenne muscular dystrophy. Bayer’s investment arm Leaps by Bayer co-led a $65 million Series A financing for Metagenomi, a developer of CRISPR-based gene editing systems for developing cell and gene therapies.
CRISPR Therapeutics and Vertex Pharmaceuticals continue to study CTX001, the CRISPR-Cas9 gene edited therapy that in June showed proof of concept in two patients with transfusion-dependent β-thalassemia, and effectiveness in another patient with sickle-cell disease, in two Phase I/II trials that are the first clinical studies of a gene editing candidate sponsored by U.S. companies.
A market report issued November 20 by the Business Research Company projected the global CRISPR technology market will grow from $1.65 billion this year to $2.57 billion by 2023, then leap to $6.7 billion by 2030.
That market is expected to grow faster once the ongoing legal wrangle is resolved over who invented CRISPR-Cas9. The bitter dispute is at the center of a second interference proceeding winding its way through the Patent Trial and Appeal Board (PTAB).
In September, the PTAB redeclared the interference by designating the Broad Institute of MIT and Harvard the senior party, and according junior party status to the Regents of the University of California, CRISPR Nobel Laureate Emmanuelle Charpentier, PhD, and the University of Vienna, collectively called CVC. The PTAB also held off immediately deciding which party offered the strongest evidence of being first to show CRISPR’s effectiveness in eukaryotic cells.
Efforts to tackle diseases often long before the drug development process. Patient advocacy groups (PAGs) ensure patient rights and generate support for certain drugs, particularly for unmet clinical needs and rare and orphan diseases. Moreover, disease intelligence allows startups to keep track of infectious disease outbreaks and efforts to tackle them. Although a relatively recent development, BioTech startups are increasingly turning to disease intelligence to identify opportunities.
Adnexi is a US-based startup that offers a disease intelligence platform for biopharma. The platform discovers patient advocacy groups (PAGs) and key opinion leaders (KOLs). With strategic intelligence, the platform connects these stakeholders to the drug development process. The platform keeps track of the treatment ecosystem for a disease to track all organizations developing treatments.
For years, the attention of biopharma dealmakers has centered on a select few areas of drug development — cancer, rare and immune diseases, as well as technologies like cell and gene therapy. Now, another area is gaining traction.
Big pharma had largely pulled back from research into the brain and central nervous system because so many drugs ended in failure. But in recent years, a better understanding of these systems has brought reasons for optimism in diseases like ALS, depression and movement disorders, in turn reigniting the interest of acquirers.
"The shift that I'm seeing the most is that more companies are going into CNS," said Marya Postner, head of the life sciences partnering practice at Cooley.
Postner said companies fighting neurodegenerative conditions such as Parkinson's disease and Alzheimer's disease are especially in demand. Indeed, last summer saw Biogen wager $560 million up front and potentially more than $1 billion total on some experimental treatments for Parkinson's. Then, in December, Eli Lilly agreed to spend nearly $900 million to buy Prevail Therapeutics, a gene therapy company with clinical-stage programs targeting inherited forms of Parkinson's and dementia.
Public and private investments are giving rise to more of these brain-focused biotechs, too. Just this week, Atalanta Therapeutics, a company trying to treat neurodegenerative disorders by silencing genes, launched with $110 million in funding from the venture capital firm F-Prime Capital. Atalanta already has collaborations in place with Biogen and Roche.
Ton rapport Magma | Dark stores, Frénésie de l'astrologie, Électroménager mini...
5 trends in biotech dealmaking to watch in 2021
3 biotech trends to watch in 2021 - STAT