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The Readout Damian Garde & Meghana Keshavan

Wall Street still believes in biotech

Or at least that’s a reasonable takeaway from the resounding success of Royalty Pharma’s IPO yesterday, which traded up about 60% the second it debuted.

The company, which makes money by buying royalty stakes in other people’s medicines, raised $2.2 billion in its offering and closed the day at a valuation above $25 billion. That made for the largest IPO in drug industry history, beating Moderna’s record-setting listing from 2018.

Royalty Pharma’s popularity among investors is an affirmation of the company’s business model, which depends on picking winning drugs and negotiating accretive deals. But it’s also a good sign when it comes to market sentiment about biotech. Buying into Royalty Pharma is buying into the idea that the industry will continue to invent superlatively lucrative products. The company’s ascendant valuation suggests the market is still bullish on biotech’s future.

Read more.

Lilly’s breast cancer drug gets an edge over Pfizer’s, for now

In a large study, Eli Lilly’s Verzenio decreased the risk of relapse in early-stage breast cancer, making it the first drug of its type to do so and giving it an edge over the market-leading treatment from Pfizer.

But, as STAT’s Matthew Herper reports, that benefit could be short-lived. Lilly’s successful study focused on a select group of high-risk breast cancer patients. Last month, Pfizer’s competing Ibrance failed in a trial that recruited a more diverse group of patients. That means Lilly’s perceived superiority could be a matter of trial design, not having a better drug.

Read more.

The smart pill might be a business school case study

Proteus Digital Health, an early adopter at the nexus of technology and medicine, has filed for bankruptcy, the latest turn in a cautionary tale for a nascent sector.

As STAT’s Rebecca Robbins reports, the bankruptcy filing comes on the heels of a lost partnership, sweeping layoffs, and a struggle to stay solvent. Proteus, once valued at $1.5 billion, is reorganizing to stay afloat as it tries to sell itself.

Things weren’t always so dire. In 2017, Proteus won a pioneering FDA approval for a so-called smart pill, equipped with sensors that could determine whether patients were following their prescriptions. But sales were sluggish, and Proteus’s ambitions to expand the use of its technology never took off.

Read more.

Maybe Covid-19 will save the antibiotics business

The novel coronavirus outbreak has galvanized an unprecedented response from the drug industry, with countries around the world working to develop therapies and vaccines that might halt a global crisis. And all that work underlines a longstanding problem: Society doesn’t have enough treatments for infectious diseases.

The issue is well-understood. Making money on anti-infective products, especially antibiotics, is exceedingly difficult, and thus companies see little incentive to invent them. Repeat that over a few decades and the U.S.’s anti-infective medicine chest is alarmingly bare.

It’s still early to be talking about lessons of the pandemic, but one of the “silver linings” could be a renewed focus on fixing that system, said Alexander Hardy, CEO of Genentech.

“This topic of anti-infectives and the broken business model is going to be something I think we’ll come out of this with a determination to tackle, because it’s gone on too long,” Hardy said in a panel discussion hosted by PhRMA yesterday. Stephen Ubl, CEO of the lobbying group, said there’s a bipartisan congressional effort to address the issue that could move forward this year.

More reads

  • Major study finds common steroid reduces deaths among patients with severe Covid-19. (STAT)
  • Neurocrine bets $2B on Takeda's psychiatry drugs. (BioPharma Dive)
  • Biotech share gains on virus leave some investors skeptical. (Bloomberg)
  • As quality concerns rise, FDA report shows Indian drug plants inspected more often — and had more problems. (STAT Plus)

Thanks for reading! Until tomorrow,

Wednesday, June 17, 2020


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