You're listening to Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry with a group of biotech leaders and experts and the rest of us. I'm Josh Schimmer. My co-hosts today are Paul Matias, Eric Schmidt, Yaron Warber, and special guest Alison D'Angeles. For more information about our hosts and guest speakers who listened to the most recent episode, please go to biotechhangout.com. And please note that any commentary we have should not be construed as investment advice because, as we all know, investing in biotech is very, very difficult, even for the experts and very tricky this week. It was a bananas week. Holy smoke. I'm literally still clearing out emails from earlier in the week because we had so much going on, earnings, earnings, M&A, data, analyst events, et cetera. Let's dig in maybe on the markets. Eric, we'll We'll start with you. We have a number of pretty big secondary raises. And I guess the question is, is too much capital being infused at once? You know the lore that the best way to kill a biotech rally is by bankers just printing too many new issuances. Are we in danger of that? Yeah, I'd love to start this discussion off. Thank you, Josh. Thanks, everyone. Great to participate with you all again this week um so you know let's put a little bit of context around it another very very substantial week of secondary offerings many of the companies that were raising hundreds of millions dollars cytokinetics avalo uh today josh or artiva these are just names that are coming to mind i haven't done the math or done the statistics on it but but these are all companies that are having good data and are deserving to raise capital um it seems like we've now reached the point where it's an automatic raise and a very large raise for anyone who has good results in this space. Q1, as we've heard from others on this show, was a record year for biotech secondaries. Let me say that again. Q1 was a record year for a record quarter for biotech secondaries. That was an amazing statistic to me and one that was surprising given how much money was raised in. well did i is it just me who's lost eric or am i the one no i lost eric too i lost eric yep i lost him as well he went ahead and went on he he called it a friday early all right well i'll i'll take over he's in the office next to me but um maybe to kind of carry on the discussion of of just this incredible amount of secondary offerings it's context dependent, right? Like when generalists are coming into the sector, they dwarf everyone and provide more than enough capital to both fund the companies and contain the momentum of the sector. But when we don't have enough generalist interest, like we've started to generate, the question is, can we keep it? And maybe that'll be our next discussion topic. If we don't have enough generalist interest, then yeah, paper can kill a biotech rally in my view. But I'd love to hear others' perspectives. I'm just going to wander into Eric's office and see if he's still talking. I'll chime in for a second, and then we can hear from others too. I think there's a couple dynamics in play. One is there's just been a lot of M&A. I think that a number of the specialist funds and long-onlys have cash to deploy. I guess it's case dependent, but if people are just putting more money into the next thing because they can, theoretically, that's not a good thing. But I also think we are acknowledging here, too, that a lot of these mega raises are coming off of data that's really good and better than expected. And so it doesn't feel like we're seeing big time opportunistic raises for like no reason. Right. I think that's where maybe things get a little bit like FOMO-ish, you know, and I don't feel like we've seen all that much of that. So and I guess the last thing I'll say and Josh, you know, it'd be interesting maybe if we revisit kind of our conversation we had a while ago about IPOs and stuff, because it's looking more and more like you could be right on the number this year. But I mean, I do think that, you know, there are we've had some M&A and I think there's I think investors I talk to are ready to like kind of they're ready for new ideas. Right. So stuff that gets de-risked, like I think they're expanding their investor bases. I guess what I'm trying to say is long story short, I don't feel like anything like that unhealthy is happening yet. This does not feel at all like 2020. Maybe it's the best way to say it. Agreed. Jaron? Yeah, I mean, to me, you know, we've all seen these cycles. This is continue to be healthy early cycle sort of biotech recovery. Good data gets remunerated with new interest and they capture kind of a lion's share of the interest. But the stocks are doing well and they're carrying through. So I don't think it's drying out the demand. And I think there is a lot of capital. And investors, even generalists, are kind of willing to go a little bit down into kind of mid-cap biotech land in the sort of platform companies like an Inzmed, or we'll talk about that on like Royvent, like an Ionis, Arrowhead. So I think there's a healthy amount of interest. I actually think it's still very good. Yaron, let me ask to you as a former operator, what the impact of raising a lot of capital is on a company? Do you think it changes the way they act and perceive or redeploy capital? Is that a risk that we need to be mindful of? I mean, to be honest, Eric, you would know more than me in that sense. I think it really depends on the plan, on the size of the ambition, whether it's a platform or not, how much of this is going to be committed capital to manufacturing. that's when things can really get obviously get pretty risky. You're really much better at to answer that because you raise substantial capital in that sense. It really depends on how focused and the scope of the studies. I mean, if it's really to you know, power up studies based on good biology, that's one thing. But if it's kind of carte blanche to go broader and pretty ambitious and ahead of yourself, probably not. Why don't we bring Alison into the conversation now and talk a little bit about some of the M&A updates. I'm always a little ambivalent about M&A being a headwind or a tailwind for a sector, especially when we pull out companies that have really strong long-term prospects, or we pull out companies that are generating cash flow, because amazingly, cash generation actually matters as we think about valuations. Alison, catch a sub for this week. Oh, well, as the startups person, I'm always really paying attention to M&A because, I mean, it's one of the only ways that you see money really flow out of this sector for young biotechs and go kind of back into the hands in terms of financial returns of venture capitalists and LPs and then get recycled back into our ecosystem. So, you know, everybody that I've talked to is on the private side is very pleased with the amount of M&A that we're seeing. Q1 was very healthy. And this week we got three more deals added to the roster. Angelini Pharma is acquiring rare disease drug maker Catalyst Pharmaceuticals for $4.1 billion. Bayer is doing a little bit of a smaller deal. They're buying perfused therapeutics and its pipeline of ocular disease programs. that's about 300 million up front and then we've got you know two point close to 2.5 in in biobucks and uh the one that really caught my attention and made me chuckle this week was ucb buying candid therapeutics for two billion dollars up front um candid is working on t-cell engagers and this is just the the second time that ken song has tried to be ceo of like a public biotech company and it the universe just won't allow it uh the first company obviously was acquired raised bio something like two or three months after its IPO and then uh candid had been planning to do a reverse merger and that's now off because it's getting acquired so you know one day one day we'll see ken as a public company ceo but not not today i i've known ken for for some time and i was kind of early meeting with him just when Rays was getting off the ground early meeting with him just when Candid was getting off the ground and he is phenomenal like his ability to to dive into a new field size it up go deep see the big picture I can't wait to see uh what he's got planned for us next so congrats to Ken congrats to Irvin as well uh and the and the Candid team that that turned around quickly. And by the way, assets pulled out of China. Maybe a theme to quickly touch upon, I don't think it was kind of necessarily part of the intended schedule, but it's hard to talk about Candid and this rapid success without acknowledging that they got some very compelling cheap assets out of China and they quickly turned it into a huge payday. So not sure how others are thinking about China innovation. I know it's come up fairly often on Hangout in the past, but boy, this is, it's all coming on pretty strong and fast. I was with my colleague a couple of weeks ago on a China biotech pastor, Lee Watzek, who hosted it, and it was so eye-opening, so eye-opening for me. This is a really interesting point of conversation and one that I spend a lot of time on these days. I would be curious, I mean, Candid was kind of part of this early wave of licensing drug candidates out of China and forming a new company around them. From what I gather, I mean, the premiums that companies, whether it's venture capital companies or kind of New Coast, are paying for assets out of China has risen. So, like, I wonder how some of the companies that are being formed today, you know, how their kind of financials look compared to, say, a Candid Therapeutics. And, you know, it's an area where there's certainly, from what I gather, a lot of offerings. But, you know, there's the kind of the eternal debate of are you getting the best things first? Who's able to get in and really get on the ground? you really have to kind of do a lot of work to look under the hood of these companies to find the best and brightest things. And I hear some inklings from venture capitalists who are on the ground that, you know, there's a concern that there are still assets around there that are not kind of up to snuff. and that the one challenge that the Chinese ecosystem will face over the coming years is that the incentive structure there is to do a lot and produce a lot. And will they kill bad programs? Will they shelve things that are not working? Will the quality continue to be robust in China is an outlying question. Yeah, my sense of it is that the innovation there is almost too fast, right? Because Alison, you kind of hinted at this, like, okay, you go to China, you may think you're pulling out the best looking asset, but there's so much innovation so quick, so fast that the next day, the next week, the next year, there might be something better that someone else pulls out. And then how on earth do you invest when you're not quite sure what, you know, how that landscape is evolving, there should be a natural, healthy, cadenced innovation. And if you accelerate it, investors don't know what to do with it. And that can be a little bit dangerous. So we'll see how it all evolves. Maybe moving on to another topic, a number of commercial stage biotechs reporting earnings this week. Paul, give us your sense in terms of investor interest and appetite in in investing in these names. Yeah, I would love to hear everyone else's perspective here too, because my, I mean, look like a company, like a rhythm that's, you know, doing their sort of big drug launch and it's just taking off. I mean, certainly there's interest there, but I mean, taking a step back, it feels like 2025 was the commercial biotech year, right? When you look at the leading companies like Almilam and InSmed and Argenix and Verona. And this year, a number of those names have been laggards. And it feels like it's been the year of developmental stage biotech, right? And I even was to go as far to say as when we entered this year, I cover some large caps, but not all of them. The two that people were the most interested in were Vertex and Biogen, two companies that couldn't have commercial businesses that are really any more different. But the reason why they were in favor is because they both had pipeline events. So I think in the context of that, I do wonder if we start to see some rotation back into some of the commercial biotechs that are more value-y. You saw a really good quarter from Neurocrin in the backdrop of lower expectations. But I think the interest from investors is still pretty mixed. I cover Biomarin. I think there's a real case that Biomarin on an actual conservative valuation methodology is not expensive. And yet, because there isn't sort of this immediate golden pipeline ticket, I think the investor interest there is a lot more muted. And I've been having conversations with more people on sort of could something flip this, right? I mean, maybe it would take like a sort of big old school type M&A, like an Alexion type acquisition where a strategic is like, hey, this just got too cheap. And then maybe people start extrapolating that. But yeah, I mean, earnings this week, I thought was good for a number of our companies. But the investor receptivity to these types of stories still feels very, very hit or miss. Do you guys agree? Eric, you're on? Yeah, maybe. Well, I actually, I would agree. I mean, I just throw in another name. I have Vagios that's launching a drug for thalassemia. These guys actually reported last week, not this. But the launch could not be going better. They crushed expectations. My guess is that consensus estimates for this drug in 2026 are probably going to be about threefold too low relative to where it ends up. And stock was up like $2. So they've got some other issues at the company. But yeah that a launch that seems to be falling on deaf ears There are a couple others that come to mind too I sure you guys can all chime in So I think you right Paul we in a bit of a buy the dream phase with regard to developmental stage biotechs And everyone wants that open five to 10 bagger upside associated with a readout pipeline event as opposed to, hey, let's grant higher with 20% earnings upward revisions. Your own question for you. You know, the generalists have... Yeah, hopefully you can hear me. I think I'm glitching. I might be glitching a little bit. So I think, Paul, it's very interesting what you said. And sometimes I kind of zoom out and whether a drug beats or not is really a function of the quality of the data. Obviously, competitive positioning, formula replacement, obviously the price of the drug. We'll come back to that in a second. But really, investor expectations slash sell side expectations, which I think a lot of times emanate from the actual market cap of the company. When it's low, numbers are low. When it goes high, numbers get revised upwards. And so you're right. I think we're seeing this year a catch-up effect of the great launches from last year now getting revised upwards. Also, having a hard time beating estimates because of that. And that's kind of giving it a little bit of the chilling effect. We're also definitely seeing a Q1 effect. that is very real. We're definitely seeing seasonality and usually now a big sort of bounce back in Q2. So I think that's kind of been giving some of these stocks pauses and a lot of them have really had fairly dramatic moves downwards into the Q1 print for even starting in January in anticipation of kind of weak prints. But I think that these companies are still very healthy. It is, I think, jolting the generalists who've gone into like the onyelums, Innsmeds, you know, Argenixes, UCBs even a little bit. UCBs, you can argue, were there already. But I think that's giving it probably fueling a lot of the pronounced volatility in the stocks. They're in and they're like, what the hell did we just buy? And why is this down 15%, you know, in the last two weeks? So I think there's an element of that. But, you know, it's definitely kind of start moving downstream. And what's really amazing is, you know, two years ago, I didn't think we're going to have a huge innovation cycle now. And that was clearly wrong. We've flipped a lot of positive data cards, like, you know, again, you know, kind of things that come to mind, bridge by or Royvan immediately ascend this. But also these launches are now doing really well. And we think we'll continue to do well, because drug pricing on up so much. These launches are now becoming fairly meaningful drugs a lot faster than when we all started kind of growing up, you know? I would just add many biotech companies still run their companies for specialists. And the more companies run their companies for generalists, the better the sector is going to do. All right, let's move on to regulatory updates. Allison, trying to wrap my head around what happened with this Tiblizumab commissioner voucher withdrawal from Sanofi, maybe catch us up on what's going on there and what the implications are? Yeah, there's still some information to be learned here, but what we know is what my colleague Lizzie Lawrence reported this week, that Sanofi has asked the FDA to pull its type 1 diabetes drug, Tiblizumab, out of the commissioner's voucher program. It had been accepted into the program and the agency was supposed to deliver a decision on the drug by April 21st. That's that date has obviously come and gone. What Lizzie has heard is that the move comes after Tracy Beth Hogue who is now the acting head of Cedar disagreed with a staff decision to approve the drug and now this decision date has has passed so it seems like sanofi might be uh waning on its enthusiasm for for this commissioner's program and look it kind of speaks to some of the larger issues that are percolating both around this program which you know sources have told Lizzie and other folks at STAT that the drugs in this program are vulnerable to political influence. And just kind of within some different areas of the FDA, the question of how drug makers kind of work through the agency right now in certain sectors of the agency here is really challenging. Yeah. Richard Pazder's recent comments, if you saw that, he's saying he didn't leave the FDA, the FDA left him, points to ongoing disarray at the agency. Very, very frustrating. Eric, maybe before we get to the topic of McCary and the outlook for him, talk a little bit about what's been going on with Replimune, that's been one of the most amazing whipsawing names of regulatory prospects I think I've ever seen. Well, yeah, I mean, first great reporting on the part of Stat News and the Santa Fe Commissioner's voucher story. I find that story to be highly ironic the same week that Dr. Macari, who we're going to be talking about in a moment, is essentially fighting for his job and going on CNBC to defend himself and his agency around the criticism that the agency has been too conservative in terms of the approval of Rep. Lin's RP1 for melanoma. I think many of you know this drug was rejected now twice by the agency despite having clear activity in melanoma and despite having the support of many in the community. Dr. Macari's defense was all based around the fact that senior FDA officials should not intervene in review staff decisions. They obviously didn't intervene with regard to the Reprimand, or it appears they did not intervene with regard to the Reprimand application. But certainly, as was just pointed out, senior administration officials have intervened in many decisions under this administration. So, the irony that he's defending himself and saying it's, quote, disastrous when senior your administration officials do intervene and review staff decisions. And yet this very same week, we have one more example of this. And that also, I guess maybe Josh brings us to the Atara news this week too. For those of you who don't know, Atara now seemingly with their partner, Pierre Febrey has an opportunity to bring their EBV cell therapy to the market this after it having been also rejected. That rejection seemingly was all about Vinay Prasad, And I actually wrote a piece in JAMA about how he thought that cell therapy drugs should not be approved on single arm studies and then subsequently went and rejected the Atara product. Now it looks like Atara and Pierre Febre are gonna have an opening opportunity to refile despite not having any new data. So great to see that reversal, but again, again, highlights another example of senior administration officials interfering with the agency. I feel like once we get to a point of stability, reliability, and transparency from the FDA, we're going to be so appreciative having gone through this era of almost the opposite. Very, very frustrating, very, very challenging. But I think the other thing that Richard Pazder has noted is that he's optimistic that there's still enough appropriately oriented decision makers left at the FDA, that the wheels have not fully fallen off the agency's bus, and that things actually can continue and hopefully feel far less choppy and volatile. But I guess speaking of that, Allison, catch us up on, I guess, the point that Eric's alluded to, what's gone with Dr. McCary and his tenure at the FDA. Yeah, I mean, first, one of I think the comments that Eric made, I have heard from folks, investors on the private side who are dealing with the agency these days that there are certain segments of the agency that are kind of functioning as normal. Things are moving through the system. And there are other areas where they are experiencing contradictory guidance. And we are seeing some of these seemingly play out in public examples as with the Tara. And I think that kind of brings us to this week. It seems like there's really been kind of a fever pitch of conversation around Commissioner McCurry's tenure at the FDA and what the agency looks like now after a little over a year of his leadership. I think this is something that Statt has been covering since the get-go, but we also saw a lot of reporting this week from Bloomberg, from the Wall Street Journal, talking about the personnel issues inside of the agency, the pressure that apparently the White House and President Trump have put on Commissioner McCurry to approve fruit flavored vapes, which he, according to a Wall Street Journal story, Commissioner McCurry had initially opposed the approval because of the public health concerns that if you're introducing, you know, lollipop flavored or not lollipop, grape flavored vapes that appeals to children and what's the public health concern about that? But this week we did see those actually get approved. And there's been a lot of other conversation about what's been going on with the agency. Even, you know, Lizzie this week, noting in this great piece that Josh, I think that you quoted, quoted Rick Pazder saying that, you know, he didn't leave the agency. The agency let him. In Lizzie's piece this week, looking at what we've lost over the last year, The agency, after having laid off 3,500 people last year, is now aiming to hire 3,200 people. So it seems like still big questions kind of swirling about the agency. And the tenor of conversation is that patience with Commissioner McCurry might be wearing a little thin. I mean, the Wall Street Journal in an op-ed said as much as it's time for President Trump to pull the plug on Macari. And we did see, you know, Commissioner Macari on CNBC this week. He was at Milken defending his leadership. Hey, Allison, can I can I ask a question? You guys are so well connected. Who do you guys think is picking the head of CBER? And what do you think the criteria is that they're weighing between rare disease flexibility versus someone that maybe is still a little bit unorthodox on vaccines or COVID? this is you know i haven't gotten into this myself but i know from my colleagues reporting and the conversations that we've been having kind of internally that there's a question about whether commissioner mccari is the one who will ultimately make that pick or whether the white House is going to be asserting more control over that decision. And I do find myself wondering if we're going to land in the latter stage given, I mean, just everything that we saw, you know, with between Prasad and Tidmarsh and, you know, some other, and then, you know, Rick Pasver leaving the agency in a very high profile way. There's been reporting out there that also the White House's confidence in Commissioner Macari, I think, to kind of set up a leadership team is also on the ice. But that's my, not my direct knowledge. That's just kind of what I'm hearing. So I'm kind of, I think, I'm just going to say, I think Kalshi is saying that the odds of Dr. Macari making it through the end of the month are about 50-50. So we'll see, but that's very interesting oh no we're getting we're putting call sheet bets on this i gotta drop that so i i feel like i need to start a call sheet account like i feel like i'm way i'm a late adopter i will note that uh it's stat policy that we do not bet on any of these topics By the way, that was a joke for the record. That was a very poorly delivered joke. The FDA has always made controversial decisions, approving drugs, not approving drugs, issuing CRLs, and then eventually turning them into approvals without necessarily requiring new clinical data. So here's some questions for the group. why is it different now? Is it the way that these decisions are being made or communicated? Is it because CRLs are now being published and we get to see some of the FDA concerns that we never got to see in the past? Is it because we no longer agree with the agency's decisions on some of these more subjective judgment calls? Why is there so much scrutiny to this FDA's decision-making process compared to prior FDA leadership? I think the way they've drawn attention to themselves or gone on TV and the whole thing with whatever you think about Unicure, the whole thing of going on TV and talking about morbidity with the procedure and the way they defended themselves has definitely been more more defiant and specific than I think I've ever seen. And we can see it in the markets. Did we lose me? We can hear you both. Oh, I've lost call. Yeah, I can hear you both. Okay. I was just saying the way that they... So I think the way they've communicated publicly has been really different. I think the second thing, at least from the rare disease side, is there been such a crazy contrast between what some of the companies were saying what the FDA own guidelines were saying and then what actually happened right Because I can remember with this whole Unicure situation that has been really close to me right that they had their data and there was their three-year data. And then a week later, there were published guidelines from the FDA around open-label studies, natural history controls, right? That was Vinay Prasad's CBER, Right. Maybe that was drafted months ago and was almost like published, but not actually indicative of what the current agency was thinking. But I've never seen like you guys have done this like longer than me, but I've never seen this many real time contradictions in a matter of weeks or months. And then maybe the last thing I'll say is like, at least I generally thought of, you know, a Republican administration. obviously there's many sort of complexities to kind of how different parties view healthcare in general, but at least as it relates to the regulatory environment is like somewhat more libertarian. And this has been the opposite. So I mean, those would be my factors. I I'm shocked how much the wall street journal like publishes on it. Right. Like not because I don't think they do good work, but because I didn't even realize how like broadly the world outside of our bubble, you know, really would care about this. Well, thanks for referring to us as the old timers calls with the gray or no hair. But I remember a time that, you know, I look up to all of you still. No, no, that's right. Yeah, I remember when Rick Pastor came in and really disrupted the oncology division, really raising the bar for innovation. And, you know, he rattled some cages and ruffled some feathers. But at the end of the day, you know, it was a very defensive position expecting oncology innovators to generate stronger data sets and better drugs, but he never came under fire like this. So Paul, I really like the point you're making, which is, well, they came in and shifted the goalposts in the blink of an eye, and maybe if they just hadn't shifted them so rapidly and nudged them, we wouldn't have so much drama. But on the other hand, I mean, didn't work past or kind of get away with it without this kind of attention innovation? Maybe it was before social media. Maybe that's part of the difference. I'd love to hear others' thoughts. You know, one, I love the question. I think you're right, Josh. I love the question. We could probably spend a whole episode on this and follow on some great initial thoughts. The one thing I would add is science. At the end of the day, this is a scientific organization. And when the public has trust that decisions are being made in a rigorous way, analytically based on the best science, you get the benefit of the doubt. Unfortunately, under this administration, whether it started with the anti-vax stuff or even the CNPVs, which have their own political angle to them, we're not always talking about science. And when you lose that credibility, it's a very slippery slope. Well, for the most, I'm going to push back on that. I hear what you're saying. We've definitely lost some of the scientific rigor in certain realms. But many of these CRLs were, I mean, Vinay Prasad's, I mean, to his credit, brilliant, really very thoughtful. Maybe the way that he led the agency was far from brilliant, but he had robust rationale for each of these decisions. Many are actually judgment calls, not clear science calls. So I'm going to push back that these were anti-scientific decisions, but would love to hear if you disagree on these CRLs in particular. Well, I don't know if it's, well, look, on vaccines, I think we can all agree that it is anti-scientific. We're still, I think there was an article just this week saying that they have suppressed, the FDA has suppressed an internal report on the safety of vaccines. They won't see the light of the day because the safety has been supported in the vaccines that have been approved for public use. So that's very, very concerning. I mean, on other hard CRL-type decisions, sure, it's a judgment call. I do think that when you have a leader at the FDA, maybe this isn't Bede Prasad, but potentially more Macari, who has said and done things that are abjectly political, it undercuts the entire tone from the top. And I think that's what's happened. Well, do you blame them? I mean, they report to HHS leadership, and they either have a job or they don't have a job. And if you're not going to play that ball, you have no job. Is there anyone who's going to fill that role and be able to withstand pressure from senior administration? So again, it's like, what's the root cause? And I think these are all great points that we're bringing up to create like a bigger picture, maybe to explain the nuances. Well, I think, Josh, I think that there's a couple of things going on in the way I guess we see it. And I think you just nailed one on the head. I think that there was a sea change in a way that is from outsiders, which is not necessarily a negative. But the way it was redacted to practice was fairly uphazard in a way that really was a little bit of a scorched earth. We're going to go in a very different direction and tear down an organization that was very successful, mostly in its history. And then brought in outside that are not experienced managers, certainly in organizations of that size. and then put together policies which seemed to have been crafted aspirationally very quickly and then very poorly redacted to practice and consistently immediately, on top of a lot of political overtones that were concerning. And that's why I think it's drawn so much scrutiny. I mean, Pazder, look, Pazder was a maverick. Pazder, the first thing it did was drive accelerated approvals, right? We all remembered Velcade and the magical 20%, which actually expedited very quickly therapies to the market. But they also made very good scientific judgment. And the things that got approved very much deserve to get approved, at least the vast, vast majority of them. So I think it was maybe their track record and the way they went about it was also very different. Allison, were you going to hop on? Yeah, I was going to say, I mean, from my perspective, I like Deon's comments about, you know, the manner in which things are being approved. I mean, one, the introduction of this commissioner's voucher program as a new avenue for, you know, drug approval was naturally always going to get everybody asking a lot of questions. Like, how are people, how are companies being selected for this program? What is the criteria on which they're being judged? Why were they not, you know, a candidate for a more traditional drug approval? That's just like one example. But I think, I mean, just I'm going to go back to like the fundamental concept of when, when this administration, you know, started very quickly, they laid out, there were big, big changes coming to this agency. And just from a journalist perspective, anytime that, you know, any sort of organization says we are going to lay off thousands of people and we are going to change the way that this agency does some things, that's going to make us look and say, okay, well, how is that process of change going? What does that look like? And there have been areas, I think rightly so, where this, there are contradictions that are raising questions. I mean, even we're getting the CRL letters, but now where are all of the ad pom's? The flow of information out of the agency has also changed. And I don't think that is helping the situation. Yeah. I guess in hindsight, probably not a good idea to let anyone run wild on healthcare. It's not a framework that you can run wild on without dismantling it in very negative ways. All right. Well, why don't we move on to some of the data updates this week? There's a whole bunch of cooking. Paul, cytokinetics, really interesting update for their non-obstructive cardiomyopathy program. Yeah. And I'm assuming others have coverage in this area, so I can kick it off and then maybe others can chime in a bit. But yeah, Cytokinetics had data this week from the Acacia trial, which was for Avicampton and non-obstructive HCM. The setup here was that I think this was a study and a catalyst that a lot of investors were positioned positively for. Mavicampton, the Bristol compound, did not work in non-obstructive. But when the full data came out, it showed that it was pretty close, which I think made people at least cautiously optimistic that cytokinetics could thread the needle. Some of the discussion coming out of the data, and then there's some laterals, and then I'd love to hear others chime in. One, how strong is the efficacy? The endpoints here are KCCQ and peak VO2. KCCQ, the effect size wasn't huge in the grand scheme of things, but maybe good enough. Some debate around safety and EF and things like that. And there's other companies in this area too. There's Edgewise, which as I understand it, I don't cover it, but my colleague does is a pretty polarizing company as to whether or not they have something that is better than Affichampton and could be safer or something that actually might have its own issues with AFib. There's Braveheart, there's a private company in this space. So huge market, though, right, and huge catalyst. And I think an important catalyst for sentiment because Cytokinetics had some coverage in the media. We can't really verify if it's right or wrong, right? But it was in sort of M&A discussions a number of years ago that was reported on that fell through. Stock went down a lot. It's back up well over 100% off the bottom. They were able to raise a lot of money. So yeah, interesting data and a lot of offshoots and implications for others. Would love to hear your guys' perspective as well. Yeah. Anyone else follow in the space? No, if not, that's okay. We've got a bunch of other updates to go through. Maybe I'll cover Arteva data this morning for their allo-NK platform combined with fluid aerobin cyclophosphamide and rituxan showing some very good data in rheumatoid arthritis with ACR50 scores in the 70% range. One really interesting observation is that the responses seem to deepen over time. A lot of the CAR-T programs and biospecific programs kind of have the opposite dynamic where they start strong and then give up some of the efficacy, but still finish with robust product profiles. The Artiva product profile actually got better as they followed patients longer. So we'll see how that evolves. They also came out with a pivotal path forward in agreement with the FDA for trial in rheumatoid arthritis, comparing against Rituxan with what looks like a fairly sizable difference in ACR 50 rates relative to what Rituxan has reported. So kudos to Fred Aslan for the work he's done at Arteva for advancing this platform, for kind of finding within a very crowded space of B-cell depletors, some pretty significant room to navigate leveraging the strengths of their platform, much of which is really around tolerability and not having cytokine release syndrome or ICANs to worry about that can make the protocol much more amenable to use in the rheumatology community setting because those specialists can't really handle even low rates of CRS or eye cancer. It's not really equipped to deal with it. And there are a fairly sizable number of treatment refractory rheumatoid arthritis patients. So, and Fred had been fairly modest and humble along the way, quietly just executing and enrolling and delivering not only just a really meaningful set of data, but also all the way to a rate agreement with the FDA on the path forward for them. So not sure if folks are following this general B cell depleting space or have thoughts on Artiva or Fred. I'll just say that this is a space that I'm following. I think there's a lot of really exciting, potentially game-changing treatments that are in development here for patients. So I think it's an area where there's a lot of conversation. And as we get more and more data, we will see that become very competitive very quickly. Yeah. But like just so many patients, as we've seen in the INI space, there's so much room for so many successful products, even if they're only modestly differentiated and if they're meaningfully differentiated. So nice to see that for Fred. Josh, I was going to ask you, you're the rheumatologist here, right? Fred's one of the few that seems to be going after RA as a first indication. Probably not the area of greatest unmet need. I don't know what your thoughts are there, but does it make sense to do rheumatoid arthritis? Are there other areas where you see this going in the future? Obviously, others are doing myositis and MG and everything other than RA. Maybe also comment on Sjogren's because the Sjogren's data, I thought, was what caught my attention. And scleroderma, systemic sclerosis. So I think the challenge right now is that there are a lot of really promising programs and it's the subtleties and the evolution of each program that'll determine the niche that it fits. And it's nearly impossible at this stage to have precision, right? To say, well, this product, this class, this modality is going to get this percent of share in this setting. And from the big picture perspective, you just kind of have to have to step back and again, acknowledge like, oh, Tesla is still a multi-billion dollar drug in psoriasis right Like the big picture here is just such a huge amount of unmet medical need that there should be a seat at the table for differentiated products and that they not all the same That means different specialists will gravitate towards different options. Different patients will gravitate towards different options. The error bars are huge. There is still a lot to sort out. First mover advantage, going to be super important. Yeah. And in terms of RA and the unmet need there, I think the answer is, yeah, there's still important unmet medical need, but you got to have the right product, right? If you're coming with an ACR 50 score of 20%, probably not a lot of room for you in the treatment armamentarium. But if you can come with a much more meaningful um acr 50 score and by the way acr acr scoring itself is kind of a quagmire of of challenging data sets to to interpret for nuances that are probably too too too um expensive to get into at this stage but yeah like i'm i'm tracking a lot of it it's hard to know who's going to be left out it's hard to know who's going to be in but having a first mover advantage and a strong data set and a differentiated profile is a pretty good start. Paul, I'm going to jump towards to a different topic because I know you're going to care about this one. And this was the CLEAN update, regulatory update for their ALS program. Allison, your colleague, Adam Feuerstein wrote a pretty scathing note about his perspective of CLEAN, but irrespective of... What? Adam? I know. Old Adam. Old Adam. Back. Biotech is back and old sassy Adam. Sassy Adam. Paul, so path forward now, based on neurofilament data, this seems like a major shift in the agency's willingness to consider this biomarker. Well, yeah. I mean, it's interesting. the clean data is, you know, the one drug to first and from Biogen and Ionis, you know, failed in a placebo controlled study. But that study for ALS, I think it's widely viewed whether or not you believe in that drug or not, but that study was too short, right? I think it was like six months placebo controlled, which is insane for disease modification and neurodegeneration. And then over time, as they followed patients for a longer patients on drug look like they were, theoretically doing better than natural history, but also they reduce neurofilament pretty substantially. Now, the NFL reductions that they were seeing were closer to like 40%. And I think, I'm glad you called on me, right? Because I could just nerd out on neurofilament. I really, really hugely believe that if you reduce neurofilament beyond the signal to noise ratio, it'd mean something. I think neurofilament is like a metabolite of dead or damaged neurons. I think the evidence is so strong across 10 different conditions. You know, as it relates to clean, I'm not super in the weeds on their data. Right. But, you know, it's not clear if the reductions they're sort of pointing to are, you know, maybe as unequivocal. Are you as close to that data, Josh? I mean, yeah, I understand Adam's perspective, too. I mean, the kind of the mechanism, you know, whatever. Right. We can we can kind of get into it. But as it relates to neurofilament, I mean, I thought the Toferson example with SOD1 showed that the FDA kind of agrees with our view. I think the challenge is that no one else across neurodegeneration really has been able to show much on neurofilament. But, you know, Denali had NFL data that was supportive for their Hunter program. And to be honest, when the Denali NFL data became really meaningful at 18 months, I mean, that really made me a true believer that drug is having a big impact. yeah but denali i think was pretty clear that the fda would not consider the neurofilament data they focused exclusively on the on the heparin sulfate data that was the personal part to me right like all of a sudden like for for denali which just got approved not because of the neurofilament data to toggle over now and say clean oh yeah well we'll look it is different divisions though like to be like it is like like denali's dealing with the group that's approved like all the biomarin drugs who just really haven't done nearly as much in neuroscience. It's a fair point. I mean, I guess this FDA has set some precedent for accelerated approval with Tilpherson, right? The SOD1 drug that, again, did not beat placebo, but lowered neurofilaments. So maybe because of that, this has to be at least reviewable. I don't know. Are you aware of other data Clean has, josh that suggests the drug is working i'm not close to the story i've just like you covered denali and have have also like you've nerded out on on neurofilaments as a biomarker and always wondered why the fda was not amenable to considering them and so i don't think it's inappropriate that they're considering them now i just wonder what changed between like a year ago in today they're like oh yeah they'll file on neurofilament and we'll consider is this yeah is this c burr or they're both at neuro and c dur dur c dur which yeah toffer as well that was yeah totally yeah same division yeah um i don't know i think neurofilament is i think the biggest issue with it is like we just don't know how much you need to lower it to be clinically significant but But if you remember the Huntington's program from Roche that did worse than placebo in a phase three, neurofilament was way elevated on drug versus placebo too. So there's even like in very different neurodegenerative diseases, there's like bidirectional support of it. I think it's pretty good, but I don't know how unequivocal this clean data is. I'm just not as in the weeds. All right, cool. A couple of other topics to get through. Allison, coming back to you and into the INI space, J&J had some interesting IBD data for its combo. Yeah, and Josh, I'll be interested to hear what you thought of this data, which was kind of a closely watched follow-up to a 2022 trial that Johnson & Johnson read out for what is like the first combination therapy in development for ulcerative colitis and Crohn's disease. their initial study a few years ago had shown that this could potentially double the the effect in patients which is great because so many patients with those two forms of inflammatory bowel disease just cannot find relief from the treatments currently on the market this study which tested their drugs from FIA and Symfony together didn't meet statistical significance It didn't meet that primary endpoint, but the company was pleased enough with the data that they are going to move it into phase three testing. They're going to move it forward specifically for highly refractory patients, patients who have tried two or more treatments for IBD and have failed to find relief with them. That's where, you know, looking through the data, Johnson & Johnson said that there's really nice signals in the data for that group, and that could still be a nice market opportunity for them. Josh, what did you think of the data? I've been a little perturbed at the way J&J has been reporting some of their clinical trial data and maybe painting it in a brighter light than it should be. I think we saw this routinely within Lexo in a head-scratching way that, to be honest, has made me wonder if they continue to really follow the credo of really putting patients first and not profits first, just given some of those, the dialogue and watching them go, you know, try to bash CG oncology in the NMIBC space. We're going to come back to that in a second if we have time. It was quite off-putting, especially because at the end of the day, J&J was just way off base with what they were saying their drug was going to do. So again, And I'm with you on what looks like a clearer benefit in the refractory patients. I'm not sure there's much to do beyond that. And to me, I would have preferred a press release that perhaps was a little bit truer to the data. I don't know if you agree or disagree with the back comment. You know, Josh, it's funny that you mentioned that. Speaking to the team, they really were very much viewing this as a positive and pitching this as a very positive outcome for this data. And I'll play some anecdotes offline. But no, they were really pitching this as like very good outcome for this duet study. That's the name of the clinical trial. And that this was overwhelmingly positive. But at the end of the day, it didn't meet statistical significance. it didn't meet their primary endpoint. And while they are advancing it, it is in a subgroup of patients. So, you know, it's not a total loss, but I do think that this maybe, you know, it would make me look at, you know, other, some of the other companies that are working on combination therapies to see if they fare better than particularly some of the companies that are working with not just existing drugs, but drug can't, you know, new candidates that they are folding into combination therapies, which we're seeing at the Inspire Therapeutics both do. Yeah, I guess I find J&J communicates often like a small cap biotech company rather than very mature pharma company. And I don't know, it just seems a little misaligned relative to what I might expect from J&J. But that might just be my own perception and biases or not. But it is, yeah, good. Yeah, and I was just to chime i mean i think that the the we've been doing a fair amount of work in ibd and talking to a lot of care was into this for for other reasons and i think this data is not what was expected i think people expected a much better data set um pnf is sort of the weaker of the new mechanism so i would say the weaker of the mechanisms and there's obviously a lot more interest in sort of newer mechanisms um so interesting i don't think it puts to rest the concept of combo but i think the newer sort of regimens are potentially going to be a lot more interesting. Yeah. I had asked one of the vice presidents over at J&J about something like, are you guys thinking of some of these newer mechanisms and folding that in, licensing one of those or requiring one of those and trying to create a new combination therapy around that? Because it seems, I mean, particularly coming out this clinical study and the discussion that their IL-23 is not the best IL-23 out there, that the components might be not the strongest out there. And they were very entertained that I tried to ask that question and basically like, we're not even going to go there. We're not going to tell you anything about our plans for potentially a next-gen approach with some newer mechanisms of action. And this is by the way, a space that China is very active in. And so you always have to keep eyes open 24 hours a day, front and back of your eyes to see what China has. They move fast. They move with speed, obviously low cost and now with real excellence. And so in the race to figure out what's going to be the best, China, especially areas and fields that China's focused on, INI being one, we've got to be cognizant that there might be things happening there that we're a little bit blind to and can come out of the blue and surprise. Maybe last topic, kind of the segue from discussion of J&J in the NMIBC space. NGENE providing an update for their data in NMIBC for their immune stimulant. The previous cut of data looked like it might have have been a little bit more competitive with the leaders that include J&J and Lexo and CJ Oncology. Kudos to Arthur and Amba on the team there for just doing an exemplary job with Curtis Dimagine and navigating in this ever shifting NMIBC landscape. But it looks like the update for NG now has fallen a little bit short of expectations and the stock is now a little today. we'll see what path forward there may be. And also, keep in mind that in theory, there may be multiple lines of therapies that NMIBC patients are able to receive. I think the question that many of us are struggling with is how many before ultimately physicians say, we've tried enough medical options and it's time to move to a cystectomy, which is not a fun procedure by far, high rate of morbidity and mortality. But I think also highlights this world of innovation that we're in. The bar keeps getting set higher and higher because of the quality of products that are coming along from this really incredible industry. And as a result, when that bar gets set higher, you have to stay competitive. And if you can't stay competitive, figure out exactly where you're going to fit in. I think we're at the top of the hour. Unless anyone have any closing remarks or topics that you wanted to quickly touch upon before we close up? I had a question for Eric from Adam. This was a special request. We will make time for this. We'll make as much time as needed for this. Eric, should we just say happy Mother's Day to all and end the call right now, please? Eric, what do you think about these Ivanessimab flyers that are so related? Oh boy, Adam and I have been talking, spending, both of us have been spending way too much time on this discussion. So fortunately, ASCO is, what, about two and a half, three weeks away. We're going to see the data there. And I can't wait. My guess is it'll be quite good on the overall survival endpoint. But yes, the flyers have been causing much discussion and scuttlebutt on the street. And Adam's article was terrific. I was hoping it was going to be so much juicier than that. Oh, I'm sorry. Don't worry. Next time, get something really juicy. All right, folks. I'm curious, who made these flyers that make it look like this is like the drug to end all drugs? Well, that's the $64,000 question. And so far, no, but well, again, my sources suggested that Kesso is in fact the originator of the artwork that you referenced, and it is quite juicy once you get into it.
