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The Readout

What to watch for in biotech this quarter


(Alex Hogan/STAT)

It’s July, which means it’s the third quarter, which means we’ve created an emoji-powered scorecard to track the biggest binaries in biotech.

This quarter, we’re looking out for data from Spark Therapeutics, Amarin, and Esperion Therapeutics; FDA decisions for Alnylam Pharmaceuticals, Insmed, and Regeneron Pharmaceuticals; and a whole bunch of other stuff.

Check out the scorecard, replete with explanations of what’s at stake for each company, here. And stay tuned all quarter as we fill in each box with the appropriate rocket ship, grimace face, bulging bicep, or broken heart — whatever captures the mood.

Things are getting dark on the biotech sell-side

Imagine you’re a biotech sell-side analyst. You cover a company. You read over its scientific literature, its filings with the SEC. And then, poring over the resulting spreadsheets, you make a recommendation — buy, sell, whatever — that you aver before the law is your actual opinion.

Now imagine finding out that work was all in vain.

The analysts at Leerink looked at four years of sell-side recommendations and compared them with actual stock performance. “Unfortunately (for our job security and sense of self-worth), we find that over the last four years there was overall an inverse correlation between sell-side ratings and rating changes and the performance of biotechnology stocks,” the group wrote yesterday.

On average, stocks with lower consensus ratings beat those with high ones, and stocks that were recently upgraded lagged behind those that were just downgraded, the analysts said.

“These data suggest that sell-side ratings are on average contraindicators, or at best not useful, in predicting biotech stock performance,” they wrote, presumably between stultifying pangs of self-doubt and bleak ontological questions. “We conclude that a non-consensus investment strategy that goes against the consensus sell-side opinion could generate superior returns.”

Navigating challenges around fast-acting antidepressants

The current treatment paradigm for depression is clunky and inexact: Your standard antidepressant simply doesn’t work quickly, or all that well. So companies are racing to develop a fast-acting antidepressant — ranging from Janssen’s nasal esketamine spray combined with a standard oral antidepressant, to Sage Therapeutics’ GABA-targeting drug. 

But the clinical trial design for a drug that doesn’t yet exist is proving tricky. So, for the first time since 1977, the FDA put out a draft guidance meant to help direct companies on how to design better trials for these next-gen mental health drugs. 

Read more.

A company first for Regeneron

Regeneron Pharmaceuticals CEO Leonard Schleifer is not a fan of his industry’s penchant for price hikes, once saying, quite famously, that “you can’t say you’ve set a drug at a fair price [when it’s launched] and then have price increases — you can’t have it both ways.”

He can make this point in public because Regeneron, unlike its peers, has not once raised the price of a drug. That was until this week, when a Regeneron drug up and got more expensive.

The drug is Dupixent, and it treats severe eczema, and it now costs 3 percent more than when it was approved in 2017. Asked why, Regeneron pointed out that its commercial partner, Sanofi, “has final decisionmaking on pricing matters” for the drug and left it that.

To be fair to Schleifer, the price increase doesn’t exactly make him a hypocrite. One, if it was solely Sanofi’s decision, then Regeneron can't be blamed. And two, Schleifer’s fiery past rhetoric decried “arbitrarily every year increasing prices by egregious amounts.” The price hike on Dupixent is arguably arbitrary, but 3 percent — roughly the rate of inflation — probably doesn’t qualify as “egregious” in the context of pharma’s commonplace double-digit price hikes.

Still it remains to be seen whether a sense of guilt by association will make Schleifer, who does not shy away from criticizing his own industry, a little less vociferous next time the issue of pricing comes up. 

Obama's Valley visit

A slight plurality of y’all (33 percent) think President Barack Obama made an appearance last week at Silicon Valley venture firm Andreessen Horowitz to network — and perhaps fundraise for his private foundation. The remainder of votes were split evenly between thinking he’s interested in pursuing a post-presidency investment career in tech or biotech, respectively — or that he’s simply stopping by to say hello.

More reads

  • The online gene test finds a dangerous mutation. It may be wrong. (New York Times)
  • Lundbeck looks to boost drug range with new CEO. (Reuters)
  • Anatomy of a 97,000% drug price hike: One family's fight to save their son. (CNN)
  • AbbVie and its partner ordered to pay $448 million over a pay-to-delay case. (STAT Plus)

Thanks for reading! We're observing the July 4 holiday, so until Thursday,


Tuesday, July 3, 2018


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