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The Readout Damian Garde

That's not how IPOs are supposed to work


Things are not quite going according to plan for Moderna Therapeutics. The company, whose last private valuation totaled some $7.5 billion, has lost about $1.5 billion of that since going public last week.

What went wrong? Moderna’s timing was less than ideal, what with the gathering forces of a recession on the lips of everyone on Wall Street. And, as the 59th biotech IPO in what has turned into a negative year for the sector, Moderna was arguably scraping the barrel of investor demand. 

But there was at least one unforced error: On the eve of its debut, Moderna and its bankers chose to upsize the IPO by about 20 percent, meaning they sold more shares than they had initially planned. That gave Moderna a roughly $100 million windfall, but it also meant that investors who would have bought stock on the open market got to do so directly, which might help explain why the share price faltered on Friday.

Anyway, a few days of a trading does not dictate a company’s fate, and Moderna has plenty of time to change market sentiment. What do you think will happen? By the start of next year, Moderna will trade __________.

above $23 a share
below $23 a share

What happened to Alexion’s ‘tone at the top’ team?

Last we heard from David Hallal and Vikas Sinha, they were handing in their resignations at Alexion Pharmaceuticals, as the company dealt with a scandal over its sales practices that ended with a self-administered rebuke of the “tone at the top.”

Now, as STAT’s Kate Sheridan reports, the two are back with a secretive startup called ElevateBio. The plan is to produce cell and gene therapies for a host of diseases including cancer, according to a slide deck obtained by STAT.

Despite being in the earliest stages of corporate life — ElevateBio does not yet have a website —  the company has already engendered some controversy. The advocacy group Knowledge Ecology International has spoken out against ElevateBio’s efforts to license a CAR-T technology from the National Cancer Institute, arguing that private firms shouldn’t get exclusive rights to publicly funded research.

Read more (and see the slide deck).

The future of biotech is mighty crowded

In biotech, when one company has a winning idea, it doesn’t take long for others to march in with rival products that blot out the first-mover’s advantage. And the pace of competition is only going to increase, according to an analysis from Leerink.

Looking at 15 lucrative disease areas across the industry, Leerink deduced that competitive intensity — a measure of all the products competing in a single indication — will double over the next five years. And that’s assuming just 35 percent of drugs in the pipeline actually pan out. If things go better than expected, biotech could become stiflingly competitive. 

That marks a major change from just five years ago, Leerink notes, when the 15 diseases in question had just 66 drugs between them. Today, that number is 99, and by 2023, it could be as many as 296.

If things continue at the current rate, drug companies could see the smaller windfalls — and reduced pricing power — in disease areas once considered up for grabs.

Does that controversial new opioid work as advertised?

It was, for obvious reasons, an unpopular decision: Last month the FDA approved an opioid painkiller that is 10 times more potent than fentanyl, a move critics called tone-deaf in light of a nationwide crisis that has claimed the lives of thousands.

The FDA has defended the decision, pointing out that the product, called Dsuvia, is meant for use on the battlefield, not for distribution at a local pharmacy. But STAT’s Ed Silverman dug into the drug’s clinical data and consulted experts. His conclusion: The FDA approval should give you pause.

Read more.

More reads

  • Why Gilead’s new CEO is a solid choice to help the biotech grow again. (STAT Plus)
  • Investigation of generic 'cartel' expands to 300 drugs. (Washington Post)
  • Macrogenics' safety scare could be contagious. (EP Vantage)
  • An inside look at VC's gender gap in carried interest. (Pitchbook)

Thanks for reading! Until tomorrow,


Tuesday, December 11, 2018


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