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The Readout Damian Garde

Good morning! We're taking Monday off in the name of Labor Day, but The Readout will be back in your inbox come Tuesday.

When is $500 million a small amount of money? 

What does Dr. Richard Sackler sound like? And what will come of the drug companies at the heart of the opioid crisis?

We discuss all that and more on the latest episode of “The Readout LOUD,” STAT’s biotech podcast. We're devoting the entire episode to what has been a massive week of news on the opioid crisis. First, we'll break down Purdue Pharma's reported proposal to settle a host of lawsuits for upward of $8 billion and the implications of a state court ruling that went against Johnson & Johnson. Then, STAT managing editor Gideon Gil joins us to discuss a three-year legal fight with Purdue that will soon result in unsealed documents on the company's opioid marketing. Finally, we'll talk about what comes next in the opioid saga.

You can listen to the episode here. To listen to future episodes, be sure to sign up on iTunes, Stitcher, Spotify, or wherever you get your podcasts.

Biotech completed a round trip 2019


As The Wall Street Journal’s Charley Grant pointed out, the much-watched XBI biotech index is basically where it was back at the J.P. Morgan Health Care Conference in January. The year began with a runup tied to Bristol-Myers Squibb’s $74 billion offer for Celgene, but the XBI has since given back all of its subsequent gains.

What’s notable is that the stuff that usually drives biotech stocks upward — big acquisitions and successful clinical trials — has been abundant in 2019. AbbVie is paying $63 billion for Allergan. Novartis developed a particularly effective gene therapy. Targeted cancer drugs are having a renaissance.

And yet here the sector sits, no better than it was eight months ago.

Another pharma-born biotech is going public

Back in 2017, AstraZeneca gazed upon its pipeline and saw six molecules that did not fit with its strategy. And thus Viela Bio was born, a biotech startup led by ex-AstraZeneca executives with the goal of turning those six molecules into products.

Now Viela wants to raise $150 million in an IPO. The company’s most advanced treatment, for a rare autoimmune disease, is already under FDA review, and it has two more in early clinical development.

Viela’s Wall Street debut would mark another public test case for the idea that drugs that found little quarter inside a major pharma company can be made valuable by smaller spinout. Pfizer did the same thing in 2017 when it created SpringWorks Therapeutics to develop a handful of drugs sitting idly in its pipeline, and now that company is out to raise $115 million in an IPO.

What’s the lesson of Rova-T?

Yesterday, AbbVie made official what long seemed inevitable: The company ended all research in Rova-T, a cancer treatment for which it paid no fewer than $5.8 billion in 2016.

This news, like all recent Rova-T news, was met with tut-tutting tweets from biotech types. That’s because Stemcentrx, the company AbbVie bought to obtain Rova-T, was not a typical biotech startup. It had an out-of-vogue approach to treating cancer, and its investors were not usual biotech suspects but rather Silicon Valley software VCs, including Peter Thiel and his Founders Fund. “Our theory was that it was a biotech company that looked a little more like a software company,” Thiel said in 2015, a sentence that seemed diamond-cut to irk drug developers.

And thus each Rova-T bruise on the way to this final resting place got spun as a vindication of proper biotech VCs and a sign that the tech barbarians at the gate simply couldn’t cut it when it came to the business of biology.

But is that entirely fair? Biotech companies fail all the time, regardless of the names embroidered on their investors’ fleeces. And, in strict terms, Stemcentrx’s backers succeeded the second AbbVie’s check cleared. Rova-T’s fate was someone else’s problem.

More reads

  • Amyloid's last hope? Prevention studies next big test for Alzheimer's research. (BioPharma Dive)
  • Biotech executive draws on his career experience (literally, for cartoons). (Boston Globe)
  • In a first, cerebral organoids produce complex brain waves similar to newborns’, reviving ethical concerns. (STAT)

Thanks for reading! Until next week,


Friday, August 30, 2019


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