The Readout Damian Garde & Meghana Keshavan

Good morning! We're taking a break for the holidays, but the Readout will back in your inbox bright and early Monday, Jan. 4.

How 2020 became biotech’s year of the SPAC

Over the past 12 months, a financial instrument once considered a disreputable relic of the 1980s became a Wall Street craze. SPACs, or special purpose acquisition companies, were everywhere you looked in 2020, and biotech was no exception.

Here are some stats: Since January, 33 health care-focused SPACs have gone public, raising $6.3 billion from investors. That’s more than the roughly $4 billion drug companies raised through traditional IPOs in all of 2019, and there are another eight health care SPACs lined up to go public, potentially adding another $1.4 billion to the year’s tally.

Why is everyone suddenly enamored with blank checks? To the sponsor, SPACs create an immediate paper return with the potential for a huge payday. To investors, they promise a less risky means of getting in on hot startups. And to private companies, they present a way to go public without the costly travails of an IPO. But there are plenty of potential pitfalls in the future that will determine whether 2020’s blank-check boom will be a replicable success or a cautionary tale.

Read more.

AstraZeneca’s misfortune muddies the water for asthma treatments

A new asthma treatment from partners AstraZeneca and Amgen is almost certain to win FDA approval, but yesterday’s news of a failed clinical trial suggests the drug’s commercial future might be dimmer than expected.

The news is that tezepelumab, a monthly injection, couldn’t beat placebo at reducing asthma patients’ need for steroids. An earlier, successful study showed that tezepelumab reduced the frequency of asthma attacks when added to standard treatment and curbed asthma attacks in patients with low levels of white blood cells called eosinophils. AstraZeneca and Amgen plan to submit those data to regulators next year.

Here’s where it gets complicated. Regeneron Pharmaceuticals’ blockbuster treatment Dupixent has proved to reduce asthma attacks but doesn’t work as well for low-eosinophil patients, an advantage for tezepelumab. However, Dupixent did help reduce steroid use, which tezepelumab could not. That, combined with Regeneron’s three-year commercial head start, could lower expectations for AstraZeneca and Amgen’s drug.

Let’s call it CovidVax

Earlier this week, the European Union authorized Pfizer and BioNTech’s Covid-19 vaccine, which brought us the news that it would be marketed as Comirnaty (the apparent sum of “Covid-19 + mRNA + community + immunity,” according to this corporate deck).

Moderna’s rival vaccine is about two weeks behind in the same process, suggesting we’ll learn its brand name in early January. Ahead of that reveal, we asked readers: Which of Moderna’s registered vaccine trademarks will be the final moniker? It was a runaway race.

About 67% of respondents picked CovidVax, which has the undeniable advantage of maximal literalism. About 14% opted for SpykeVax, and just 12% chose its more pedestrian relative SpikeVax. Rounding out the race with 7% of the vote was Covid mVax. So there’s that.

The mysterious CRISPR boom is apparently here to stay

On Monday, the three publicly traded CRISPR genome editing companies added a combined $5 billion to their market values, rising between roughly 20% and 50% despite an absence of news and an otherwise flat market for biotech.

Perhaps more surprising, they pretty much held onto those valuations in yesterday’s trading, suggesting that a critical mass of investors simply woke up and concluded that CRISPR had been markedly undervalued and then stood by that conclusion.

That or it’s a credit to Wall Street’s 2020 breakout star. Cathie Wood, who runs the advisory firm ARK Invest, told Bloomberg on Friday that “the next 'FAANG' [stocks] are in the genomic age,” using the acronymic shorthand for Facebook, Amazon, Apple, Netflix, and Google. (The company formerly known as Google now goes by Alphabet, but "FAAAN" is plainly less fun to say so no one changed it.) Wood manages a hugely popular ETF called ARK Innovation, which has returned about 150% this year and happens to include CRISPR Therapeutics and Editas Medicine among its 10 largest holdings.

More reads

  • A neighborly visit turns into a bidding war: How Dan Skovronsky secured Eli Lilly's latest $1 billion buy. (Endpoints)
  • STAT+ Conversations: A conversation with Nobel laureate Charles Rice. (STAT+)
  • These breakthroughs will make 2021 better than 2020. (Bill Gates)

Thanks for reading! Until next year,

Wednesday, December 23, 2020


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