Life Science Today 087 – Arcellx, Intellia + Rewrite, Navitor + Janssen, ViiV
Introduction
Welcome to Life Science Today, your source for stories, insights, and trends across the life science industry. I’m your host, Dr. Noah Goodson. This week, dragons over unicorns, to CRISPR and beyond, spin-out-and-sell, and expanded approvals.
Disclaimer
The views expressed on Life Science Today are those of the host and guests. They do not necessarily reflect the opinions of any organizations with which they are affiliated.
CART IPO for Arcellx and Dragons over Unicorns
The IPO market for biotech companies continues to face challenges rolling into 2022. The drivers of this are complex and include the larger markets’ behavior, the response to the pandemic over the last few years, and the types of investors heading into the space. But overarching it all is the reality that biotechnology remains a challenging industry for investment. Scientific timelines are inherently long, and any company who plans to make money through a clinical pipeline is still looking at years of investment before commercialization is possible. Biotech unicorns like Moderna aren’t really unicorns in my mind. A unicorn makes sense in the technology world where rare and mystical beast can emerge and take the to the skies with rainbows on its heels, capturing a market at scale. But biotech companies that do this are more like dragons. Yes Moderna or Bio-N-Tech emerged to the spotlight, but under the hood were years of quietly hoarding solid evidence in the cave under the mountain. This drying up of IPO money could be challenging for some companies who imagine heady billions, but it’s not all bad news in the market. Numerous major pharma companies are looking to restructure their pipelines with fresh investment and orient to new therapeutic targets and approaches. This means there are definitely viable mechanisms to drive funding across this year. But you’ll need a lot more than a dream in your heart and some IP in your pocket.
And by the way, I’m not sure if this change to less extravegent funding can be considered bad at all. There is a huge risk for a sector like biotech when money gets to easy people get greedy and that can lead to poor decisions that impact the entire industry. The long-term value of this industry hinges on the ethical and intelligent production of real scientific products that can be meaningfully incorporated into a value chain. A modicum of caution in the approach to challenges like this is wise. Dragons can take years to mature, but they are pretty robust and wealthy creatures once they do.
In line with this more moderate and strategic approach is the IPO last week of the CART biotech Arcellx. As I’m sure you know, CART therapy is an approach to oncology that involves extract a patients T cells, modifying them to specifically target the cancer and then returning the immune cells back into the body. With consistent and robust results in a number of cancers, CART continues to provide optimistic treatment options in previously hopeless circumstances. And by the way, I have family members who are alive today because of CART. Now Arcellx made a really smart choice and decided to go public right as the 10 year anniversary of the first clinical trials in CART emerged. So what do you see in the press? Lot’s of news about 2 people who are still alive and cancer free after a decade. Major news outlets ask, is CART a cure for cancer? By the way, did you know there is a CART company with an IPO this week?
Let’s be clear, I’m not scoffing at Arcellx strategy. It’s smart. Plus, they do have a genuinely strong early stage clinical and pre-clinical pipeline. And on the scale of valuations over the last few years, I would list them as appropriate. They are not short changed, nor are they overly optimistic. But this all serves to underline my point. A company like Arcellx might have seen shares skyrocket on IPO a year ago and listed them at a higher price as well. In early 2022, just to maintain status quo, a relatively solid company on paper needs a thoughtful strategy to run the gauntlet.
If unicorns are made on valuation, dragons are made on value. In 2022, we are continuing to see a return to value-based investments in this space. The companies that hauled in billions since 2020 will be asked by investors and buyers to ensure that money isn’t spent on cool advertising but on products and solutions that make an impact and are turned into true sustainable revenue streams.
Intellia Expands CRISPR through Acquisition of Rewrite
Speaking of revenue and value-based movements. That’s exactly what we saw last week with Intellia Therapeutics acquisition of Rewrite Therapeutics. The deal $200M deal included $45M upfront in Cash and $155M in stocks/cash mixed milestones. Intellia is currently one of the industry front-runners in bringing CRISPR/Cas9 gene editing technologies into humans. With strong in vivo and ex vivo pipelines and robust partnerships with Novartis and Regeneron, Intellia is on a solid path with first-in-human CRISPR trials ongoing today. This latest acquisition brings tools developed by Rewrite that according to reports open up the possibility of making single nucleotide precision edits without the need for complete double stranded DNA slicing that is required by traditional CRISPR technologies. Now Rewrite was basically completely under the radar before this, but this deal comes through their development of a valuable technology, and their willingness to sell rather than run the clinical-development gauntlet on their own. At Intellia’s stage of development this is likely a move to provide an additional pipeline of candidates using an alternative approach that can be leveraged into independent deals with additional pharma partners.
Pipeline Acquisitions Navitor and Janssen
How does a company with a lead candidate antidepressant sell a kidney disease therapeutic to a big pharma company?
In a spin-out-and-sell move, Navitor Therapeutics created Anakuria Therapeutics to hold AT-20494, a small molecule first-in-class treatment for autosomal dominant polycystic kidney disease. The therapy is ready to move into phase I trials. The spun-out company Anakuria was fully acquired by Janssen. This kind of rapid spin out of a holding company to sell a specific asset has not been common over the last few years but is certainly one solution to offloading specific assets that do not align with your core pipeline. Janssen is expected Anakuria’s asset into their kidney portfolio and move forward with clinical trials.
Expanded Label for HIV Antiviral ViiV Healthcare
CABENUVA made history last year when it was approved as the first long-acting HIV antiviral to be approved by the FDA. The combination therapy is gaining steam with good clinical efficacy, manageable side effects, and long-lasting positive outcomes. More good news has dropped for patients and pharma alike last week when the FDA approved expanded use to doses once every two months. This continues a string of positive developments in HIV treatment and prevention. One of the drugs within CABENUVA, cabotegravir was approved back in December for the prevention of HIV infection as bi-monthly injection. With increased availability among at-risk populations and improved treatment early among those infected there are positive outlooks for HIV going forward in wealthy countries. Long run, an effective high-quality vaccine is still needed in many parts of the world.
Closing Credits
Thanks for joining me for Life Science Today, your source for stories, insights, and trends across the life science industry. Learn more at LifeScienceTodayPodcast.com. If you like what you hear, please tell a friend. Once again, I’m Dr. Noah Goodson, I’ll see you next week.
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Story References
Arcellx
Intellia + Rewrite
Navitor + Janssen
ViiV
About the Show
Life Science Today is your source for stories, insights, and trends across the life science industry. Expect weekly highlights about new technologies, pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to biotech IPOs. Life Science Today also explores trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed and approved. It’s news, with a dash of perspective, focused on the life science industry.