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The Readout Damian Garde & Meghana Keshavan

Ginkgo Bioworks is going to the moon

At least according to the investor presentation it delivered yesterday, which projects a 17-fold increase in revenue by 2025 and a future in which the company launches 10 times as many programs in a year as it has done in its entire history.

These numbers came to light because Ginkgo Bioworks is merging with a SPAC in a deal that values the firm at $15 billion, before accounting for the $2.5 billion in cash it’ll get once the process concludes. That valuation might sound a little rich when you consider that the company did $64 million in revenue last year and $54 million the year before. But Ginkgo, according to Ginkgo, is about to grow massively.

The company’s business is based on programming cells to manufacture just about anything, including drugs, building materials, and food. And according to its internal estimates, the world is going to really want those manufacturing services, and Ginkgo will be booking $1 billion in revenue at a $25 billion valuation in four years.

Regardless of whether that comes true, Ginkgo’s presentation illustrates why quite a few people, including those employed by the SEC, are nervous about SPACs. In a traditional IPO prospectus, companies are legally constrained when it comes to projections about future growth, which is why the documents they file are mostly backward-looking and contain pages and pages of “risk factors.” The SPAC process, in which a private firm merges with a public shell company, does not impose such constraints, and that could be bad for investors.

Illumina CEO: Letting us buy Grail ‘will save lives’

Illumina, stifled by federal regulators in its quest to pay $7 billion for the liquid biopsy firm Grail, has crafted a pretty direct pitch: If the FTC clears the acquisition, fewer people will die.

“We believe that acquiring Grail will save lives because it accelerates getting that test into the hands of people around the world,” CEO Francis deSouza said at the STAT Health Tech Summit yesterday. “And the way we can accelerate that by integrating [Grail] into Illumina is we can get that test into the hands, for example, of our commercial salesforce.”

The logic makes sense. Illumina already sells tests in about 140 countries, and it’s been through the process of regulatory clearance enough times to ensure that it could work faster than Grail could on its own. The problem is that that’s exactly what the FTC is worried about. The agency objected to the acquisition in part because merging with Illumina could give Grail an unfair competitive advantage over its rivals in the nascent market for cancer blood tests. And Illumina, the world’s premier supplier of genomics tools, could be incentivized to give Grail priority over its other clients.

But deSouza argues that the deal would actually be pro-competitive. Yes, merging with Illumina would accelerate Grail’s path to market, he said, but then that path would be cleared for other companies developing liquid biopsies. That’s what happened back in 2013, when Illumina invested heavily into prenatal genetic testing. Over the ensuing years, more companies entered the space, which drove down prices and helped the technology proliferate, deSouza said.

Watch the conversation.

Biogen’s FDA limbo makes life awkward for Lilly

Consider Eli Lilly CEO David Ricks. His company is developing a treatment for Alzheimer’s disease, now in Phase 3, that would go before the FDA in 2024 or so. Biogen has a rival Alzheimer’s treatment that will be approved or rejected this summer. If you’re Ricks, do you want Biogen to win approval, because it would mean the FDA will be amenable to your drug, or do you want it to get rejected, because having that treatment on the market will complicate your future?

CNBC’s Meg Tirrell asked him a similar question at the Healthy Returns Summit yesterday, and he quite deftly avoided answering it outright. Alzheimer’s is devastating for patients and their families, and investing in new treatments “hasn't been particularly rewarding or practical for a lot of companies, particularly those with less financial capability than Lilly,” he said, and so “I am hopeful that the FDA will begin to approve drugs here.” As for Biogen itself, “there's been controversy with that [data] package, and the company sponsoring that can talk about it,” Ricks said.

The controversy boils down to it not being overwhelmingly clear that Biogen’s treatment, aducanumab, helps patients. What complicates things for Lilly is that the company has a vested interest in the FDA being flexible when its own treatment, donanemab, is up for review. But if the FDA is so flexible as to approve aducanumab, the drug will be available to patients while Lilly is running a placebo-controlled Phase 3 trial, which could lead patients to drop out of the study and make gathering clear data on donanemab that much more difficult.

Why Amgen is betting ‘undruggable’ will become a relic of history

The vast majority of drugs invented by the pharmaceutical industry rely on latching onto some protein or other in order to treat disease. The problem is that the vast majority of human proteins lack the cracks and crevices necessary for that to happen, leading to a widely understood and persistently vexing issue called “undruggability.”

But that doesn’t have to be the case, according to Raymond Deshaies, senior vice president of global research at Amgen. Writing in STAT, Deshaies points to two advances that promise a more druggable future. For one, the world’s understanding of cell biology has advanced to where scientists have discovered new ways to target proteins without relying on tried-and-true bonding to their surfaces.

One of those ways, about which Deshaies is particularly optimistic, is called induced proximity. It’s the process of calling for biological reinforcements for dealing with undruggable proteins. Instead of designing molecules aimed the protein itself, these treatments would hijack the body’s garbage-collecting mechanisms and mark those proteins for disposal, bypassing the question of druggability altogether.

Read more.

More reads

  • Telehealth companies are fueling a lobbying frenzy to protect their Covid boom. (STAT+)
  • Novavax reports more delays for its Covid-19 vaccine. (New York Times)
  • AIDS virus used in gene therapy to fix ‘bubble baby’ disease. (Associated Press)
  • From big tech to small tech: A health care visionary pushes for a patient-centric approach to technology. (STAT+)

Thanks for reading! Until tomorrow,

Wednesday, May 12, 2021


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