Friday, June 10, 2016

The Readout by Damian Garde & Meghana Keshavan

Welcome to The Readout, your daily rundown of what's happening in biotech. BIO is over, but we've got a recap of this year's vibe, a look at Silicon Valley's newest biotech darling, and your chance to name the Theranos movie. Need more? Follow @statnews.

Silicon Valley hubris watch

Marc Andreessen, who once said people will someday feel "naked and lonely" without a Google Glass, is backing a new biotech. (Andreessen Horowitz)

As the industry chews over whether a glitzy, Google-backed upstart is properly respecting the rigors of science, another monied Silicon Valley institution is wading into biotech. Andreessen Horowitz, a roughly $4 billion VC, has backed a company in the burgeoning world of liquid biopsies, promising to diagnose cancers from a simple blood draw.

The firm is called Freenome, and it’s developing technology that trawls patients’ blood for the tell-tale fragments of tumors in hopes of detecting and decoding cancers.

It’s a neat idea, but not a new one. There are roughly 40 companies in the liquid biopsy field already, including Grail, which spun out of world-dominant genomic sequencing company Illumina and is supported by Bill Gates and Jeff Bezos.

What makes Freenome stand out is the patina of Silicon Valley optimism that pervades its branding. Instead of a cut-and-dry press release, Freenome announced its funding with a narrative Medium post, and the company is led not by MDs in suits but by young men in hoodies. Andreessen Horowitz, whose founder is prone to navel-gazing futurism, heralded its investment with the declaration that “software is healing the world.”

There is a crushing and humbling rate of failure in biotech, one that industry VC’s openly acknowledge and trade groups use for political leverage. And thus when tech-rich magnates barrel into the field with promises of revolutionary discoveries — as with the embattled Theranos and Google’s blustery Verily — eyebrows tend to inch upward.

That doesn’t mean the company is bound to fail, of course. Anything’s possible. And if Freenome investor Peter Thiel is reading: Please don’t sue this newsletter out of business.

Wall Street crassness watch

More than one-third of Americans are obese, according to the CDC. All that extra poundage costs the country roughly $147 billion each year. Now, thanks to investment firm Janus Capital, you can profit from it.

Yesterday, the asset management outfit debuted its Nasdaq obesity index, winkingly traded under the ticker “SLIM,” which pools companies Janus says are tied to the world’s expanding waistlines. That basically means it’s a biotech and medtech fund, and thus buying into SLIM means betting on an escalating need for diabetes drugs, kidney dialysis, and insulin pumps.

If getting rich on the decline of global health feels a little icky, Janus is also offering FITS, a fitness-focused fund whose holdings include Lululemon, Nike, and Herbalife.


Fighting words

We head home from BIO with our brains crammed with buzzwords... and two good reads for your flight home. Rebecca Robbins has a smart look at how the drug industry is fighting efforts to curb drug prices. (A fight that launched just as Pfizer raised its prices an average of 9 percent, on top of a 10 percent hike six months ago.) And Meghana serves up an analysis of how women intend to seize more clout in biotech. Step one: Rise to power in the VC world.

Merck spends $500 million on cough medicine

Back in 2009, Afferent Pharmaceuticals of San Mateo, Calif. started down a common path in biotech: Buy a drug languishing on a pharma shelf, raise some venture cash, and hope for the best. 

In this case, it worked. Last night, Merck signed a deal to buy the company for $500 million up front and as much as $750 million more if everything goes according to plan. The big get is a mid-stage treatment for severe coughing that can’t be treated through other means — a drug Afferent licensed from Roche at its foundation. Also included is an early-stage project with potential in hypertension and migraine, according to Merck.

The deal is a big success for Afferent’s investors, who put in about $78 million and are getting at least $500 million back. And it’s an affirmation of the old cliche that small, focused biotech companies are better suited to handle early research than their plodding pharma counterparts. Whether they can do late-stage work and fulfill the Ramaswamy Hypothesis remains to be seen, however.

Your chance to name the Theranos movie

Theranos CEO Elizabeth Holmes will soon join a shape-shifting mutant and a TV huckster among people portrayed by Jennifer Lawrence. (JEFF CHIU/AP)

First Martin Shkreli gets a musical. Now Elizabeth Holmes is getting a major motion picture.

According to Hollywood gossip site Deadline, Jennifer Lawrence has signed on to play the precocious and perhaps penniless Theranos CEO in a movie from “The Big Short” director Adam McKay. Presumably it will follow Holmes from collegiate obscurity to front-page fraud accusations. Mercifully, neither David O. Russell nor Bradley Cooper is involved.

But what should the movie be called? That’s where you come in. Submit your best idea(s) via this Google form, and next week we’ll round them up and put it to a vote.

BIO readies for a brawl

it's a wrap for the 2016 bio international convention. until next year, flamenco dancers.

BIO conventioneers head home today from San Francisco with their bags stuffed with tchotchkes and with an admonition from BIO CEO Jim Greenwood ringing in their ears: Fight back against the depiction of drug makers as greedy and heartless price-hikers. We wanted to know what industry insiders thought of all the political pressure to curb prices. So we asked. And you answered:

"This is a sore point for most of the industry. The truth is that the vast majority of the healthcare spend is on healthcare services.... We’re getting a bad rap." — Grace Colon, partner, New Science Ventures and president & CEO, Incarda Therapeutics

"To bring a new drug on market costs on average somewhere between $1 billion and $2 billion. Most drugs that hit the market don’t recoup that. Some do, and some recoup a hell of a lot more than that. But it seems balanced, from my perspective." 
— John Dimos, vice president, Mavericks Capital

"Well, drug pricing is an international problem.... We know that for infectious disease, there are many patients in Africa that cannot afford treatments from the US or Europe, because they’re too expensive. So it’s a real concern." — Hélène Gournier, director of partnerships & business development, Bioaster

"Vanderbilt University, which I work for, is one of the biggest providers of indigent care in the state, so we’re taking on a lot of debt, and a lot of hits.... So from our perspective, the issue is not so much 'big bad pharma.' It’s not 'big bad anybody.' We’re just in a tough situation across the board."  
— Hassan Naqvi, licensing officer, Center for Technology Transfer and Commercialization at Vanderbilt University

More reads

  • Adam Rosenberg, CEO of Rodin Therapeutics, takes a look at how newfangled technologies are changing clinical trials. (LifeSciVC)
  • Dr. Jim Allison, inventor of the blockbuster cancer treatment Yervoy, got the chance to sit in with Willie Nelson, one of his musical idols. (NPR)
  • Sarepta Therapeutics is using some recent optimism about its odds of FDA approval to raise $37.5 million. (Press release)
  • Fusion's Jason O. Gilbert has taken the liberty of penning some suggested numbers for the forthcoming Martin Shkreli musical. (Fusion)

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Thanks for reading! Until tomorrow,

Damian & Meghana

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