Life Science Today 018 – Syneos Health, Apellis, and Patient Enrollment
Originally Published as The Niche Podcast
Introduction
Welcome to The Niche Podcast – Your weekly 5-minute rundown of the biotech, clinical research, and applied science industries. I’m your host, Dr. Noah Goodson. This week, Syneos Health acquires Synteract, Apellis strikes a billion-dollar deal, and clinical trial patient enrollment, but first a market update.
Biopharma Market Update
The last week and half have been tumultuous as markets fluctuate around political uncertainty, Q3 earnings reports, and a massive COVID19 spike in the United States. With the insecurity of a US presidential election Tuesday and record numbers of COVID cases dropping daily, expect the instability to continue through the next week as investors respond to perceived risk and make guesses around the consequences of US leadership.
While many of the largest companies have weathered the pandemic well from a fiscal standpoint and some have come out on top in terms of earnings, uncertainty around the future continues to keep segments of the biopharma market in check. How this may play out with post-election changes in US healthcare policy is perhaps the greatest driver of uncertainty in this sector of the market.
Syneos Acquires Synteract
Syneos Health, a leading clinical research organization (CRO) announced the acquisition of the small mid-sized CRO Synteract. Syneos functions as a global leader in the CRO space and provides a suit of contract commercial solutions as well. It was formed through the $7.4 billion merger of inVentiv and INC Research a couple of years ago and has continued to grow its footprint in the space. Syneos posted a 6.6% year-over-year Q3 revenue loss, but managed to pull a 5.9% profit increase in the same time. This can basically be thought of as an equivocal outcome. Yes, they have been impacted by the pandemic, but they’ve maneuvered to get through it with as little short-term loss to the investor as possible.
The move to acquire Synteract is an active step into a critical market. There is a lot of money flowing into the biotech space. I have said this before, but I’ll continue to reiterate that significant cash stock-piles and changes in opportunity around tech have pushed more capital into the biotech start-up space. The acquisition of Synteract by Syneos reflects their belief that this market will continue to grow in the near-mid-term.
Synteract has primarily built a business around early phase clinical trials for smaller companies. The revenue vs effort on a Phase I clinical trial varies significantly from a massive 30,000-enrollee phase III. However, with an increase in demand, it makes sense for Syneos to capture the expertise, networks, and market recognition of Synteract to empower the growth in the space. Synteract is a global CRO and boasts 700 employees in four contents. While they primarily run phase I/II trials they have run over 4,000 trials globally around 26,000 sites in more than 60 countries. The transaction for an undisclosed amount sees Synteract maintain its brand and come under the Syneos network. Presumably this will allow Synteract to funnel the most successful small companies over to Syneos for larger trials. It will also provide an opportunity for Syneos’ contract commercialization’s team to have early access to companies coming down the pipeline – it never hurts to plant seeds.
Synergistic business models are great. But the reality is, with Syneos projecting 12-16% growth in 2021, they want to acquire any company that can to capitalize on market growth. With Synteract’s specialization in a growing area of a growing field, and Syneos’ ability to increase their impact, this will likely be a positive step for both organizations.
Sponsors
The Niche is brought to you today by The Scope Method LLC. The Scope Method helps companies develop clear vision and strategic processes; Whether you need fresh eyes on your data, independent risk assessment, or are pivoting into a new therapeutic space. The Scope Method will help you focus close to re-examine what you know and look ahead to where you want to go. Find out more at thescopemethod.com
Apellis Strikes Billion Dollar Deal with Sobi
Apellis Pharma struck a collaborative agreement with Sobi for over a billion dollars. Apellis has been developing pegcetacoplan (APL-2) for a variety of indications and has dropped a series of positive reports over the last year including potential for the treatment of hematological, nephrological, and neurologic disorders. Pegcetacoplan works through binding C3 and C3b, part of the compliment signaling pathway. With multiple diseases resulting from excessive compliment signaling, pegcetacoplan has shown significant promise in providing meaningful therapeutic intervention.
The deal with Sobi gives them access to co-develop exclusive rights to C3 therapy outside the United States. This includes access to five unique indications across multiple systems but excludes ophthalmic treatment. Sobi will pay $250 million upfront, commit $80 million to developmental reimbursements and up to $915 million in regulatory and commercial milestones, plus backend royalties. If pegcetacoplan is as successful as it looks to be, Sobi will rapidly recoup their investment and then some. For Apellis, this gives them capital through Q2 of 2022. Based on the indicators I see this should be enough time for them to begin generating a revenue stream from an FDA approved drug for at least one indication. For those suffering from compliment driven diseases this is good news.
Patient Enrollment Has Been Restored
Greenphire is a company focused on the financial lifecycles of clinical trials. They provide solutions for sponsors, sites, and CROs. One of the major set-backs in clinical trials globally this year was a decrease in patient enrollment. Greenphire reported last week that enrollment has now rebounded to pre-COVID19 levels. To give you an idea of how severe the drop-off was, that’s an 85% increase over April numbers. Even in North America where COVID is currently exploding, enrollments are up 5% since January of this year. With failures in patient enrollment remaining one of the largest issues inhibiting successful clinical research this is good news for the whole industry. In order for the clinical research space to continue growing in line with increased demand from sponsors, improved recruitment and retention strategies will be necessary to drive enrollment numbers in 2021 and beyond.
Closing Credits
Thanks for joining me on The Niche Podcast; your weekly 5-minute summary of top news in the biotech, clinical trials, and applied science industries. You can find us on your favorite podcast app. Like, comment, subscribe, and most of all share with your friends. If you like what you hear, please rate and review, it really helps us. Once again, I’m Dr. Noah Goodson, I’ll see you next week.
Sponsors
https://www.thescopemethod.com
Story References
https://www.investor.syneoshealth.com/news-releases/news-release-details/syneos-health-acquire-synteract-top-cro-provider-emerging
https://www.prnewswire.com/news-releases/new-greenphire-data-indicates-clinical-trial-industrys-swift-rebound-patient-enrollment-reaches-pre-pandemic-levels-301159557.html?tc=eml_cleartime
https://investors.apellis.com/news-releases/news-release-details/apellis-and-sobi-enter-collaboration-global-co-development-and
Music by Luke Goodson
https://www.soundcloud.com/lukegoodson