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The Readout Damian Garde & Meghana Keshavan

Why is everyone enamored with SPACs?


Wall Street’s hottest new trend is a 1980s retread: Private firms are merging with so-called blank-check companies in order to go public without the pains and payments that come with a traditional IPO. Those companies, called SPACs, have proliferated since last year, raising billions of dollars on the promise of win-win transactions for investors and entrepreneurs alike. But are the claims too good to be true?

The latest episode of “The Facts, STAT!” dives into the details of SPACs, short for special-purpose acquisition companies. Once a disreputable means for penny stocks to go public, SPACs have become blue-chip investments, endorsed by the likes of Shaquille O’Neal and Alex Rodriguez. They’re particularly popular in biotech, where virtually every name-brand investment fund has launched a blank-check firm on the hunt for promising startups.

But the sudden glut of SPACS — about 250 of them went public last year, and 2021 is on pace to double that — creates more than a little risk.

Watch the video.

To approve Aduhelm, FDA took a page from oncology

In the months of deliberation that led up to its polarizing approval of Biogen’s Alzheimer’s disease treatment Aduhelm, the FDA consulted an unlikely source: the agency’s leading expert on cancer.

Richard Pazdur, director of the FDA's Oncology Center of Excellence, told STAT that he advised the Aduhelm review team. He’s not a neurologist and, by his own admission, doesn’t know much about amyloid, tau, or any other biological hallmarks of Alzheimer’s. But he has years of experience approving cancer treatments based on their ability to shrink tumors, regardless of whether they’ve proved to prolong survival. Through that lens, approving Aduhelm for its effect on amyloid plaque in the brain made perfect sense, Pazdur said. 

“If you believe that this amyloid reduction is a potential marker — or surrogate, if you want to use that word, which i hate — then accelerated approval would be appropriate,” he said. “End of discussion.”

Watch the full conversation.

CureVac’s Covid-19 vaccine remains confusing

When last we heard from CureVac, developer of a third-place mRNA vaccine for Covid-19, the company was publicly replying to an anonymous Twitter account in defense of its progress. Now, there’s a German newspaper article claiming the vaccine is further delayed, which the company denies, and yet more confusion over when we might actually see data.

It starts with Augsburger Allgemeine, a Bavarian newspaper, which quoted a CureVac spokesperson yesterday saying that the company had completed the second interim analysis in its study and was still running the trial. That would be a bad thing. CureVac’s trial is designed to stop if the vaccine shows at least 65% efficacy in that second analysis. If that milestone came and went, it wouldn't bode well for CureVac’s vaccine.

CureVac hasn’t tweeted since that initial incident, but a spokesperson said the company has yet to reach its second interim analysis. Evercore ISI analyst Umer Raffat said in a note to investors that he had spoken with CureVac and that it had “categorically denied” the Augsburger Allgemeine story, saying the paper “completely misquoted” its spokesperson.

Whatever the case, it's still unclear when the company will have data. On Tuesday, Reuters reported that the European Medicines Agency doesn't expect to be able to approve the vaccine until August, something CureVac also disputed to Raffat. Ideally, when the results are ready, they will arrive through normal channels, rather than a tweet or an analyst-mediated statement.

Don’t forget biotech’s other potential June surprises

The FDA’s decision on Biogen’s treatment for Alzheimer’s disease has predictably dominated the conversation around biotech this week, but there are a few other June events poised to further roil the sector.

Any day now, Vertex Pharmaceuticals will have data on VX-864, a second-generation treatment for the rare disease alpha-1 antitrypsin deficiency, which has become a proving ground for the company’s ambitions outside of cystic fibrosis. Likewise, Sage Therapeutics is expected to have results from a pivotal trial on its once-failed treatment for depression, a massive binary event that also has implications for Biogen, which owns a stake in the drug.

Neither will have the impact of the Aduhelm decision, but each promises to further shape investor sentiment in what has already been a volatile year for biotech.

More reads

  • WTO members agree to step up talks about Covid-19 intellectual property proposals. (STAT+)
  • Vertex cystic fibrosis treatment gets U.S. approval for use in 6-11 year olds. (Reuters)
  • ‘Some very noble, some less than noble’: The growing health data marketplace sparks privacy concerns. (STAT+)
  • Will Biogen ever publish the trial results for its new Alzheimer’s drug? (Endpoints)

Thanks for reading! Until tomorrow,

Thursday, June 10, 2021


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