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The Readout Damian Garde & Meghana Keshavan

How Pfizer plans to turn around its R&D and win over investors

Since the start of 2020, companies developing Covid-19 vaccines have seen their stock prices double, triple, or, in one case, rise 40-fold. But not Pfizer, whose shares are flat on the year despite its stake in a coronavirus vaccine now in Phase 3.

As STAT’s Matthew Herper reports, the pharma giant has a plan to change that. Pfizer, which is soon to spin off its slower-growing businesses, is betting the future on a pipeline of novel therapies the company believes can change the standard of care and deliver returns in the process.

Pfizer is particularly bullish about its efforts in gene therapy, targeted cancer drugs, and medicines for autoimmune disease. In each case there’s plenty of competition. But Mikael Dolsten, the company’s chief scientific officer, believes Pfizer can succeed by “really taking the game to a new level, and integrating breakthrough technology with novel science.”

Read more.

Here comes the first psychedelic biotech IPO

Compass Pathways isn’t the first company to fashion FDA-regulated therapies out of psilocybin, but this week it intends to be the first one to go public.

This week, the British company is seeking to raise about $100 million at a $570 million valuation. Compass, which counts Thiel Capital among its private investors, intends to sell 6.7 million shares for between $14 and $16 each. The funds will support an ongoing Phase 2b trial intended to prove that psilocybin-based therapy can help patients with treatment-resistant depression.

Just how well the IPO performs will be closely watched in the nascent community of companies turning psychedelics into therapies. Firms like Compass, Field Trip Psychedelics, and CaamTech have so far succeeded in raising money from funds outside the financial mainstream but received less interest from buttoned-up Wall Street types.

What will it take for Gilead to break even on its $21 billion deal?

For years, investors have pestered Gilead Sciences with the same question in myriad phrasings: When are you going to buy something big? Now, 24 hours after the company committed to a $21 billion acquisition, they’re wondering just how Gilead can justify that price.

The deal, which gives Gilead control of Immunomedics, came at a more than 100% premium to the company’s most recent stock price, making it the most expensive large acquisition in 10 years of biotech history, according to the analysts at SVB Leerink. Gilead management said it expects the deal to pay for itself by 2023, but that depends on quite a few things breaking in the company’s favor. 

In monetary terms, that would require Immunomedics’ lead drug, IMMU-132, to bring in about $5 billion a year. To get there, the treatment will need to confirm its promise in a host of tumor types. But even if it does, competition could get in Gilead’s way. Partners AstraZeneca and Daiichi Sankyo have a similar medicine in development that could prove superior, and there are ongoing studies of older cancer treatments that might encroach on Gilead’s intended markets.

Trump’s latest pricing move could be more about polls than patients

President Trump’s 11th-hour move to cap certain drug prices based on what other countries pay is almost certainly going nowhere in the short term. But with 50 days to go before the 2020 election, it could still have political benefits.

As STAT’s Lev Facher and Nicholas Florko report, Trump’s executive order to cap how much Medicare pays for drugs based on lower prices in foreign countries can’t realistically be implemented before Nov. 3, and any attempt to expedite it would get delayed by a legal challenge from the pharmaceutical industry. But campaign experts said the president’s effort, even if it comes to nothing, could prove to be a savvy ploy to appeal to voters who consider drug costs to be a pressing issue.

And it may well pay off. To date, none of Trump’s attempts to rein in drug prices has had a significant effect, but recent polling suggests the so-called most favored nations policy has bipartisan popularity, suggesting the idea, however unlikely to come to fruition, could win over some voters.

Read more.

More reads

  • Early research from 23andMe strengthens link between blood types and Covid-19. (STAT)
  • AstraZeneca COVID-19 vaccine trial in U.S. on hold until at least midweek. (Reuters)
  • Bill Gates slams ‘mismanaged’ U.S. response to Covid-19 pandemic. (STAT)
  • Eli Lilly arthritis drug helped hospitalized Covid-19 patients recover faster. (Wall Street Journal)

Thanks for reading! Until tomorrow,

Tuesday, September 15, 2020


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