Thursday, January 18, 2018

The Readout by Damian Garde & Meghana Keshavan

Welcome to The Readout, where we keep you on top of the latest in biotech. For more in-depth coverage of biopharma, subscribe to STAT Plus. On Twitter: @damiangarde and @statnews. Also: A belated congrats to STAT’s own @megkesh, who is now a new mom! She’ll be on hiatus for a short period but we look forward to her returning to the Readout soon.

Biotech is developing a unicorn problem

What to do when you’re a so-called startup with a 10-figure valuation and a need for cash? Your charismatic CEO has sold the world on a beautiful dream that seems unlikely to come true any time soon, and now the well-worn paths to funding — an IPO, a VC raise that isn't a down round — are too narrow for your valuation.

Oh, and all of biotech is watching, anxious that a high-profile blowup at one of the billion-dollar startups could have industry-wide effects.

Join us for a look at how big-money private biotechs might preserve that much-desired horn. Read more in STAT Plus.

That Celgene-Juno didn't exactly set the world on fire

Well, that was mildly disappointing. We’re speaking of the tepid market reaction to the Wall Street Journal report that Celgene is negotiating an acquisition of Juno Therapeutics. Juno’s stock price jumped on the unconfirmed news, naturally, but the biotech sector as a whole pretty much shrugged it off. The Nasdaq Biotechnology Index closed Wednesday higher by about 1 percent — surprising after all the confident chatter about how an uptick in M&A flow would set biotech stocks on fire. 

A single trading day isn't enough to draw conclusions, but Wednesday’s ho-hum reaction suggests M&A might not be the single fix for what’s been ailing biotech stocks since last fall. Or, investors might simply be waiting for confirmation of a Celgene-Juno deal before jumping back into the sector. 

One thing that would definitely help: Companies other than just Celgene on the buy side of the takeout flow. We’ll be more confident in the M&A rally thesis once Amgen, Gilead Sciences, Biogen or any of the Big Pharma get into the mix.

Sponsor content by MilliporeSigma

Bio-logic: A new way of thinking is disrupting the life sciences

In an "armchair interview" during the official opening of MilliporeSigma's M Lab™ Collaboration Center, executives Stefan Oschmann and Udit Batra discussed the more collaborative, biological paradigm that's sweeping the life sciences. The two touched on topics including cell-based therapies, greater cooperation between researchers and regulators and the importance of enabling "by-chance interaction" among scientists. Read here.

That liquid biopsy study doesn't exactly dent Exact

Exact Sciences has generally excelled at selling Cologuard, a stool-based genetic test to detect colon cancer, far better than Wall Street has forecast. Still, the company loses money, mostly because marketing Cologuard is expensive. For this reason, short sellers see Exact Sciences as overvalued and hover around the company even though the stock’s outperformance has been a losing trade for them. 

But on Wednesday, CellMax, a Taiwanese diagnostics company, presented new data from a blood-based test that could also detect colon cancer. Exact Sciences bears pounced on the news from a potential competitor, suggesting Cologuard days were done. Shares of Exact Sciences fell 10 percent. 

Not so fast. Blood-based colon cancer tests are a potential threat to Cologuard, but CellMax’s offering isn’t there yet. The study presented Wednesday, in particular, was conducted at a single site in Taiwan and enrolled an unreliably small number of patients, most of whom were already diagnosed with colon cancer or precancerous lesions. Under these skewed conditions, showing colon cancer detection rates that looked superficially equivalent to Cologuard was far too easy and unlikely to be confirmed with a larger and more rigorously designed study.

We love a good short thesis but the Exact Sciences bears need to come up with something better than Wednesday’s CellMax data.

What happens to the FDA if the government shuts down?

So the federal government could just, like, close pretty soon. And while that would have loads of implications, here's one: The FDA would be in bad shape.

The agency would have to furlough about 45 percent of its staff. That means advisory committee meetings would be canceled, and while industry-funded things like drug reviews would technically continue as planned, the FDA would be working with fewer staff and thus be slower and less responsive.

The 2013 shutdown “was a very challenging time,” said Dr. Margaret Hamburg, who was FDA commissioner at the time. “[It was] extremely disruptive to the critical, unique, and essential work of the FDA. … Important programs dramatically slowed or halted without the needed staff. Even for those essential time-urgent activities, available staff — professional and support — were stretched dangerously thin.”

Read more.

More reads

  • Celgene needs a boost, but Juno isn't it. (Bloomberg)
  • Third Rock Ventures' Abbie Celniker discusses her career path and gender inequities in biotech. (Timmerman Report)
  • FDA to experiment with releasing clinical trial summary reports. (STAT Plus)
  • J&J attracts Chinese interest for diabetes business in potential $3 billion deal. (Reuters)

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Thanks for reading! Until tomorrow,

Damian & Meghana

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