BioCentury This Week

Ep. 366 - Europe's need for speed: Bio€quity takeaways

• BioCentury • Season 7 • Episode 366

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0:00 | 43:35

China’s speed in generating first-in-human data has catalyzed a race across the globe to reshape regulatory requirements to compete. BioCentury’s analysts, along with special guests Detlev Mennerich, head of Boehringer Ingelheim Venture Fund, and Mehdi Ainouche, partner at Jeito Capital, discussed where Europe fits in that landscape and other takeaways from the 26th annual Bio€quity Europe conference in Prague. This special episode of BioCentury This Week has been brought to you by Jeito Capital.

View full story: https://www.biocentury.com/article/659450

#EuropeanBiotech #ClinicalDevelopment #BiopharmaInnovation #DrugDevelopment #LifeSciencesStrategy

00:01 - Sponsor Message: Jeito Capital 
03:14 - China’s Speed Challenge
04:08 - Europe’s Clinical Trial Opportunity
11:48 - Speed vs. Capital Efficiency
15:52 - Takeaways from Richard Pazdur
19:58 - FDA Uncertainty and Global Alternatives
26:50 - Biopharma M&A Outlook
33:34 - The Next Wave of Science

To submit a question to BioCentury’s editors, email the BioCentury This Week team at podcasts@biocentury.com.

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[Autogenerated Transcript]

Voice Talent:

BioCentury This Week is brought to you by Jeito Capital, a leading global independent private equity fund with a patient-benefit driven approach, aimed at financing, and accelerating the development of ground-breaking medical innovation. Jeito’s unique investment strategy combines significant capital and collective expertise to support biopharma companies and their management teams-ranging from clinical development to market access for cutting-edge innovations—with one main objective: go faster for the patient. Learn more at jeito.life

Stephen Hansen:

Welcome to a special edition of the BioCentury This Week podcast. I'm Stephen Hansen, director of Biopharm Intelligence here at BioCentury, and we are coming to you from beautiful Prague in the Czech Republic, where we are wrapping up the 26th edition of our Bio€quity Europe conference. Joining me to discuss key takeaways from the event are Detlev Mennerich head of Boehringer Ingelheim Venture Fund, Mehdi Ainouche.

Mehdi Ainouche:

That's correct.

Stephen Hansen:

I spent five minutes practicing that this morning 'cause I wanted to make sure I got it right. Uh, partner at Jeito Capital. and then from BioCentury we have the venerable VP and Editor in Chief uh Simone Fishburn Steve Usdin, Washington Editor, and our Head of BD, Josh Berlin.

Steve Usdin:

I- I'm not venerable?

Simone Fishburn:

No.

Stephen Hansen:

It's, it's kind of become a running joke. I come up with a different superlative to describe-

Simone Fishburn:

His-... Stephen Hansen: Simone each- His, his salary is tied to it, yes... Stephen Hansen: so we've-- You were illustrious, then you were renowned, and now you're venerable. It-- There was an alliteration that I like to play with there. Uh, so thank you to our sponsors again for a tremendous conference over the past few days. Before we start diving into the topics, just, you know, been a beautiful weather this week. Has everyone enjoyed Prague? Have you guys gotten out? Have you seen some sights? Mehdi, Detlev, did you have a nice time here for a couple days?

Mehdi Ainouche:

Yeah, absolutely. I mean um beautiful weather uh kind of warm in the hotel rooms. Uh- ... I guess we all share that. and uh I mean uh we'll probably come back to that but, leaving Paris with the plane and getting in, you know, with the current uh M&A buying spree, and some- somehow, you know, waiting for the news of the coming week and not even barely leaving the plane and ar- arriving at the airport in Prague, you know, already seeing the Candid deal And here we are at the last day of the edition, and another one, announced this morning in ophthalmology and I saw two hours ago, I think, a, a novel-

Stephen Hansen:

Yeah

Mehdi Ainouche:

licensing deal from GSK. We'll have the time.

Stephen Hansen:

We will get to this.

Mehdi Ainouche:

But-

Stephen Hansen:

We will get to this.

Mehdi Ainouche:

Yeah.

Stephen Hansen:

We will, uh-

Mehdi Ainouche:

Yeah, the weather is- Yeah ... let's say, sunny everywhere.

Stephen Hansen:

Very good. Right. Well I think to kick things off Simone, I'd like to start with you. I know you've spent days preparing this, so, why don't you give me a couple of your major takeaways from this

Simone Fishburn:

event? Okay. I just want to clarify, I haven't spent days preparing for the podcast. But I did spend days preparing for the scene setter analysis, which I'm gonna go into in a minute. But I want to just say, I mean, there's been... there always is, every time, amazing energy and buzz at the conference. A lot of the value in this and other BioCentury conferences is in the hallway conversations, and I have to start off with a quote that I think kind of captures where we are today. And somebody said to me, and I'm not allowed to say who it was, but somebody said to me, "If I had a dollar for every time I heard China at this conference, I could fund our next round." So I thought that was... that pretty much captured it. So before I get to China, w- in our scene setter analysis this year we started actually from the premise that China has completely changed the conversation around the speed to clinical trials or to first in human data, and that is tied directly to valuations, to funding, to biotech success. And so what we looked at was clinical trials based on clinicaltrials.gov focusing in particular on phase one from 2021 to '25, and looked at where Europe is in that landscape, and that was a very interesting and dynamic um opening scene setter plenary session. So there are two or three sort of things that came out of the data and the conversations that I just wanted to, to highlight. One It came out of our data, and it also came out of the McKinsey data that Spain is really emerging as a new center within Europe, but even without Europe uh outside of Europe, I mean. So, so clinical trials, real hotspot there in Spain, in particular in cancer, not just within Europe, but globally. They're rising in funding, and so there's definitely something going on there that we've uh not only because Bio€quity Europe was in Spain a couple of years ago, though I'm sure it was catalyzed by that. Sure

Stephen Hansen:

there's a direct connection, yes, right.

Simone Fishburn:

The other thing is looking locally really Central Europe seems to be quite rich in I and I immunology and inflammation trials, and there were a few reasons behind that that came out in Steve Usdin's-- one of Steve Usdin's panels th-that he might want to reflect on it in a few minutes. And then sort of at a higher level, I just wanna talk about a current from there and through the other conversations, a current that goes via Steve inasmuch as we're really at a pivotal moment and th-there's a lot of changes in the US both at a policy front, which means drug pricing and at FDA. there's obviously this rise of China, huge talk about China.

Stephen Hansen:

Mm-hmm.

Simone Fishburn:

And, again, the hallway conversations and the other meetings I've had, there's really a sense actually that Europe is getting close to China, and it's good to spend some time outside of the US because there really is a feeling among some of the Europeans that I've spoken to that th-the US might actually be missing, missing out on what's actually the conversation here, which is that, you know, maybe the US won't always be the only partner and place that, Europe can go to, and that there are, you know, opportunities. There's obviously concerns, but, you know, China is certainly an, an alternative partner, and I think it's gonna be interesting to see how that conversation unfolds.

Stephen Hansen:

Yeah, no, I, and I think that's a good, opportunity now for us to Detlev, I wanted to bring you in maybe to the conversation here'cause we were talking a bit, and yeah, I think you had some thoughts on, on China and kind of that dynamic there. So maybe could you share a little bit on what you, you know, some of your takeaways about, about that China perspective?

Detlev Mennerich:

Yeah. Th-thank you, Stephen. Yes, definitely. So we are on the ground in China. Um, I, myself, I was traveling eight times since January last year to China. On upcoming Monday, we go to our IC to make two proposals for Chinese investments. So I don't see China as a threat I see it as an opportunity also for Europe to find partners who have a common vision, and it's nothing against US or it's nothing against China. So we in Europe, we need to be uh self-assured or saying there is great science. We need partnerships. they can be in the US, they can be in China, they can be anywhere Australia, to bring concepts to prototypes to first amend to clinical proof of concepts. And so China was not there, and Antoine said it in the opening lecture, they didn't appear out of nothing. They didn't come out of nowhere. There is a sustained plan, and what we see today is this is unfolding since two, three years with a huge deal-making. This is not the end, so there are still gaps. They were closing it, and we in Europe and, and in US, so US is high on capital, maybe shifting a bit. Europe was high on science but low on capital. But if we look back the last ten years, also years in development, and China now brings everything together. The capital is there, the talents are there, and so the CMC costs and time efficiency is, mind-blowing. Maybe they will close the gap in the next five years also from the first-in-class new therapeutic concepts, and then it's an ecosystem where we need to play and to find our way. We in Europe, so now coming to your question, maybe because missing of larger funds, looking at you, Mehdi- ... because I'm representing a very small fund, a pharma corporate fund. So there is great science, great ideas, great concepts. Sometimes we sell our companies at proof of technology, but not where the main product is unfolding the value. And then it goes where the capital sits, and the multinational companies are for global exploitation. Because at the end of the day, we are here also for making money, yes. But we are here to provide new solutions to patients, and these drugs will be exploited globally. So at the end, we all want the same. In, in China, Europe, US, you talked about the regulatory authorities changes. Maybe we park this for a moment. It's a complex context on its own, but I see a lot of opportunities.

Stephen Hansen:

Mm.

Mehdi Ainouche:

Absolutely, and if I th-thank you, Detlev um comment on that. This is back to the core you know, vision of our fund and raising so much of capital because we believe that exactly as you say, you know, you don't just identify great science, try to throw it however in the clinic, try to hunt for a signal, and then hope for somebody to acquire. you have to be more, let's say- bullish and put the means on the table, which means a lot more money to push to meaningful clinical data for what that means, meaning, you know, well-powered Phase IIb dose range finding, you know, high pharma standard being able to really get to either the next late stage development phase or, if there's the right partnering option, you know, really being plug and play for those type of quality. Now, maybe back to the um comment on China and Europe and our strength in Europe was that, as you rightly said, you know maybe the, the novelty of science, you know, first in class opportunities are definitely a shot which we have in Europe. However, during the conference, actually I took a note from uh you know, one of the panelists rightly pointing out that, there's been a shift there from even, you know, the traditional small molecule biologics which they are able to get full speed until the, you know, Phase I and then partner-- By the way, we see more and more that they're keeping the jewels a little more 'cause same comment for the Chinese partners. They try to sell it later and try to unfold the value later. Um, but the interesting part is that even for, let's say, pure novel or more complex let's say modalities um let's take siRNA for example complex chemistry or even multi-specific next gen biologics, long acting there's almost one deal popping up every week on those type of, you know, next gen. So they're-- I think they're good on the innovation piece and the next gen type of modalities as well which is kind of interesting. And b- back to uh you know, the, the news today, you know, GSK has been doing this deal with that uh siRNA company, so it proves out, that they also have a shot. So It's good to be first in class uh but then, you know, execution is key and, well, I guess we have our uh our role in the play here, Jeito uh to finance through the, the next challenges in Europe.

Stephen Hansen:

Yeah. I mean, I wanted to-- So obviously you mentioned, I mean, you guys raised over a billion euros in your fund to help, really, you know, supercharge finance a lot of these growth companies as they get later. found it interesting because we spent-- a lot of the conference was talking about speed, speed, speed. How can we try and be as fast as China and that sort of thing? But there was a discussion this morning at one of the um the panels this morning where I think what was noted was the fact that one of Europe's, maybe historical norms was capital efficiency and being very efficient with outputs. And I, I think one of the arguments was that, well, if you wanna try and increase the speed, like you have to spend a lot more capital, and so you kind of lose some of that, maybe that historical capital efficiency. And so Is it-- is that the right way to think about it? Should, should companies be asking for twenty-- should it be asking for twenty-five percent more when they're raising because they're gonna be saying, "Well, we need to try and catch up to China"? Uh, h- or, you know, how, how should companies be thinking about that?

Mehdi Ainouche:

I think there's a right middle uh and sorry for the normal response. A little bit in the middle. That's

Stephen Hansen:

okay.

Mehdi Ainouche:

Um. It's a

Stephen Hansen:

good dodge.

Mehdi Ainouche:

Yeah. I, I think um y- you know, we as investors have a practice which is to tranche deals, and so that enable us to commit a lot of money right away. But at the same time, you know, you really put the big beans once you have unlocked a certain level of de-risking. So that enables, you know, to be cost efficient on one way, i- in one-- on one hand, sorry. And at the same time, you know, whenever you try to-- I mean, you reach those milestones, you know, a, a true clinical signal in the clinic on one first patient population where the bar is low, you could have an accelerated path. Then we're here to deploy much more capital on a, a first program full speed to the, you know- patients and at the same time deploying different indications. And so I think there's the, the right pace, I would say um keeping the discipline of cost efficiency which we do see here. And I mean, that's directly related to our, investment s-strategy and uh practice- and ... style.

Simone Fishburn:

I mean, I, I think to some degree, I don't want to say it's a canard, but, you know, cost efficiency, first of all, it doesn't help you to be extremely cost efficient if it means you end up being tenth in class, right? So when you talk about the efficiency, it really depends on what are you shaving off, right? So if that money that you're actually spending is going to value driving data or value driving um I don't know, what, what are the other forms of payment? You know, that, that's not a question of efficient-- that is part of what you need to spend the money on. I think the idea is, are you spending money on things you don't need to be spending on? What's the pace at which you spend money? And one of the things that I actually thought was very encouraging that came out in the scene setter deck, and Jeito is part of that, is the fact that Europe-- Well, two things. One is the fact that Europe has now got several billion-dollar-plus funds for growth capital, and that's something that hasn't been here in the past. And it may take a few years for that to start changing the conversation around, "Oh, we must have more growth capital," but there certainly seems to be more money in Europe for growth. And then the other part of that is seeing more and more European companies with the, say, fifty million-plus kind of A rounds, even C... you know, early-stage funding. So I think the tranching may still continue to some degree, but I really feel like the financing is bolder, let's say, than it was five to ten years ago.

Stephen Hansen:

More, more ambitious.

Mehdi Ainouche:

Absolutely. And yeah uh more ambitious. And uh you know, i-in that let's say trajectory our capital is there to be spent on, you know, pipelines uh multiple programs, multiple patient populations, and TPPs to be tested in the clinic. and so that's part of the, you know, acceleration of, validation of the quality science we have in here to be tested not only in the single program, but to be deployed in many different possible directions and optimizing the business case also for the potential future acquirer and not wasting time, you know, doing things sequentially. So fully agree with that.

Stephen Hansen:

Yeah. Wonderful. Um, so I wanna transition now 'cause we had another uh what at least I thought was one of the most highly anticipated fireside chats ever, probably, that I-- at least that I can recall from Bio€quity. and so that was Steve. I wanna turn to you, Steve Usdin, who you were the uh the moderator of that chat with Dr. Richard Pazdur.

Steve Usdin:

Yeah. So, so it was a really fascinating talk with Dr. Richard Pazdur. I think as everybody knows he was, for a very short period of time, the director of the um center for-

Stephen Hansen:

How many days? Do we, do we have it in days?

Steve Usdin:

It, it was about 10 Scaramucci's. I

Simone Fishburn:

was gonna say, do we measure it in Scaramucci's? Yeah. Right, yeah.

Steve Usdin:

Yeah. So uh he was the director of the Center for Drug Evaluation and Research. Before that, he was the founding head of the uh Oncology Center of Excellence, and before that, he was the head of oncology at CDER at FDA. and real- really an icon, really somebody who has done more to shape the regulatory environment that's enabled advances in cancer, I think over the last two decades than, than anyone. So, you know, I came away from that discussion, you know, kind of with three points, right? So one was He said, you know, "People have short memories and they forget all the things that have happened over the last year." But he said that they left lasting, a lasting mark at FDA, you know? So he goes, went back about a year ago when there was a kind of traumatic purge, firing at random of FDA staff, and he said that has had echoes that have gone down till today. Look, we've had five, I think directors of CDER over the last year in the past, you know, that's a position that's open, usually people had it for a decade or more, right? Um, the, the... About 20% of FDA staff has left morale is in the toilet and those things are ongoing challenges. he also had some interesting things to talk about some of the kind of signature announcements that have come out of FDA recently. And he said basically that the, the press releases, the announcements that are coming out are unhinged from, well, from reality, from the, the steps that would need to be taken to implement them. That in the past the process would have been to socialize things among FDA's career staff and then develop a plan and then go out and announce it. He said over the last year, it's really been the opposite. Things have been announced, FDA staff have learned about them from the press releases, and then scramble to try to how to figure them out. He gave an uh one, for example, the most recent one was the real-time review program that's been announced.

Stephen Hansen:

Right.

Steve Usdin:

And, and he had some cautions about that. And he said, you know, the name of it is based on something that he had at the Office of Oncology the Oncology Center of Excellence which was intended to allow FDA staff to review the final results of trials, pivotal trials, when they've been finished, but before companies had actually submitted all the documentation to FDA. The way that it's being interpreted now, FDA staff are going to be getting access to clinical trial data as the trials are going on. And he said, "You know-" You really want to think about that. Do you really want FDA reviewers who have never conducted a clinical trial looking at your data on an ongoing basis?

Stephen Hansen:

Three patients, four patients, six patients.

Steve Usdin:

Well, somebody... There's, there's this adverse event. Maybe we should blow the whistle, you know? So, so-

Simone Fishburn:

This is like me editing your story as you're writing it.

Stephen Hansen:

As I'm writing, yeah. Yeah. That's a terrifying, that's the terrifying idea is like you suddenly-

Simone Fishburn:

Yeah.

Stephen Hansen:

Putting a chair behind my desk and just watching me type over my shoulder.

Steve Usdin:

What, what was that comment? So, so, so the, the, the, and the, and the third thing that he talked about, which was really fascinating to me, so he's been out of FDA for a while now, so we kind of talked about what, well, what does it look like from the outside looking in? And one of the things he said which I think is not a, not a surprise to most people who've been in drug development, is a real concern about a lack of consistency at FDA, and he's seeing that even more when he's on the outside. he says that there's a real need for more external engagement. FDA has throttled back its use of advisory committees and other forums for getting external engagement. and he talked about possibilities and real potential for clinical trial innovation and regulatory innovation that he sees going forward.

Simone Fishburn:

So Steve, I'm gonna ask you a question. Some of the other panelists may weigh in as well. But one of the things that I've been hearing is this idea, look, everything is bad there. You know, we, we keep getting this drumbeat of negative signals. FDA is not the only place we can go, right? And there's, you know, different regulators we can go to different places we can run our trials. What do you think? You think the, the U.S. is, like, the U.S. is still so big, ultimately you need to get your-

Steve Usdin:

Well, I think it's possible-... Simone Fishburn: drug approved there. How, how, how should people think about that? I think it's possible to over-index on um the difficulties and the challenges, because the fact is, is that drugs still are getting reviewed. Things still are getting through. It's just that there's been uh more of an element of inconsistency, of kind of randomness. There's some areas that are kind of like no-go areas, obviously vaccines, mRNA, things like that. But it's not like nothing is getting through there or everything is bad. It's more that it's just gotten to be a lot more challenging and unpredictable, and I think that it's still a reality that the U.S. market is far and away the most important, and n- I don't think that anybody's seriously gonna say, "Oh, well, we can have a viable ecosystem that kind of goes around the United States." It's still the center of everything, or of a lot of things.

Stephen Hansen:

Detlev, do you want to comment?

Detlev Mennerich:

Yeah, I agree. So Steve, we had a pre-discussion about this. So disclaimer, by far I'm not a regulatory expert, but I have a view on things, and I see so the FDA is and was and remain the gold standard for any regulatory advice and, and getting approval. But certainly in the Phase I, let me say from first in man to first clinical proof of concept, there is a new market and there, I wouldn't say a new standard, but there are other marketplaces where we can be very fast and cost efficient to get to the point. When it goes into a pivotal trial and uh the first confirmatory trial in oncology, for example, for sure every biotech, big pharma will and remain staying in the U.S. because with the MFN, there's a new reality now, I would say, because the launch sequence will drive the clinical strategy already now, and this will and remain in, in the U.S. FDA regulated. But the early piece, what we actually see in partially very little in Europe but in Australia and China, there's a new normal, and this is outside of the U.S. It's without the FDA. They are reacting on it now. They made the announcement. They want to change. But from the announcement until the operational execution on it, they need another nine months, a year now. That's a prediction and, and, uh-

Steve Usdin:

Well, well, yeah, most of the announcements that have been made in the United States from FDA and from the administration trying to... 'Cause they recognize the issue, and they're trying to streamline access to first-in-human trials. They're trying to create incentives for companies to do trials in the United States. But I haven't heard of anything that's actually gonna move the needle on that very much. It, it, it may be that we see first-in-human trials being launched in some fashion in the United States to kind of like have your toe in the, in the water there so you can get some kind of incentive for doing it there, but but really doing it somewhere else. but I don't think there's anything that's gonna change the, the dynamics that we've been talking about this meeting for the last two days.

Stephen Hansen:

Wonderful. Well, thank you, Steve. so we're gonna take a short break, and uh we will be right back.

Voice Talent:

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Stephen Hansen:

Welcome back to a special episode of the BioCentury This Week podcast, as we're live from this year's Bio€quity Europe conference in Prague. so for our live podcast, we have started a bit of a tradition, which thankfully Steve has remembered to do this time, which was fantastic. Uh, so we encourage our guests to wear some colorful or extravagant socks for the show so our audience can see them. But for the podcast listeners, I'm gonna kinda go around and see what we've got. let's see. Steve, you wanna start us off? What are you, uh...

Steve Usdin:

I actually got them here. So these are socks that say Prague. They should've said Praha. I don't know why they say Prague. Anyway, they say Prague, but they also have dachshunds. Okay. So I have the dachshund socks. a little bit of personal information, I do have two dachshunds waiting for me at

Stephen Hansen:

home. Oh, that's, that's a good, that's a good explanation. Wonderful. Mehdi, what do you uh what do you got? You said you had a little special surprise for us. What do you got?

Mehdi Ainouche:

it looks sober like this uh so perfect for a suit for a conference. Right. But then if you closely look, there's the daddy cool sign here. Uh, not only because I love disco, but also because I also have a personal story there. I'm just a young daddy. That's it.

Stephen Hansen:

Okay. Very good. Very good. Simone?

Simone Fishburn:

Well, I'm flying the BioCentury flag- we have ... BioCentury This Week socks.

Stephen Hansen:

I think that's two live pods in a row where you've worn the same socks, which-

Simone Fishburn:

I, I didn't know we were doing this ... is

Stephen Hansen:

a little bit lazy. So that's okay. Okay. That's fine. Josh, did you uh did you make an effort?

Josh Berlin:

Yeah, I'm trying to get as much ROI out of our sock budget as possible. So went, went the same way.

Stephen Hansen:

That's very on-brand.

Steve Usdin:

That's cap- capital efficiency.

Josh Berlin:

That's right.

Stephen Hansen:

That's very good for you. Um, I've got, uh... I was gonna do what you did. I was gonna buy some socks when I got here, but I did not find a place to buy them. And so my fallback was I've got some socks with T rexes on them, which are my youngest son's favorite dinosaur. So I just figured I'd rock the, rock the T. rexes. Detlev uh do, do I need to put you on the spot here?

Detlev Mennerich:

Yeah, I got some socks from my son. They were colorful, but I forgot to put them on this morning. So now I have simply boring, dark blue socks.

Steve Usdin:

What, what would they have been if you had put them on?

Stephen Hansen:

Tell us what they would've been had you remembered.

Detlev Mennerich:

It was some leaves, wheat on it. Um.

Stephen Hansen:

Weed?

Detlev Mennerich:

Wheat.

Stephen Hansen:

Wheat. Oh,

Steve Usdin:

Wheat. Wheat. Not weed. Not weeds. Okay.

Simone Fishburn:

All right.

Stephen Hansen:

All right.

Simone Fishburn:

Next time I'll do

Stephen Hansen:

We gotta clarify that. Okay. Good, good, good. Excellent. all right, well, let's, get back into our, our discussion, kind of recapping what, uh... You know, I think it's been a, a wonderful couple days of conversations here in Prague. Mehdi, I wanted to turn to you. You already kind of previewed for us what you would like to talk about earlier, but I think you had some, some ideas about, you know, what your expectations are for M&A. Can you, can you maybe expand on that a little bit?

Mehdi Ainouche:

Yeah. So actually and by the way, that comes from reception discussion with a banker who I will not personally quote. but, gave some truly interesting insights about uh you know, the uh 2026 uh you know, M&A trends. and, you know, we've seen what's been going on since, you know, almost uh a year now. I think year to year, i- if we take Q1 '25 to now, if you compare just in terms of total deal value, this has almost doubled or nearing it. and, taking a step back and looking at the big picture, if you try to explain a little bit what's happening. So we all are very well aware of, you know, the uh loss of revenues, the 2035 horizon. So we're talking about the famous$350 billion uh loss of revenues. and if you took just a different angle of view, and that's what I got um which was really interesting, is a five-year horizon between now to 2031. Actually, you have some of the main pharma concerns. if they wanna go for the, you know, very usual 4% compounded annual growth rate that they wanna communicate on-

Stephen Hansen:

Mm-hmm

Mehdi Ainouche:

they need to take over$69 billion accumulated sales by then.

Stephen Hansen:

Of new, of new revenue?

Mehdi Ainouche:

Correct.

Stephen Hansen:

Okay.

Mehdi Ainouche:

And that's interesting because... And that's what I got from, from this banker, is that if you closely look at taking the listed companies because, you know, they're at this stage of maturity, very close from the market. There are a number of very identified companies that can actually fill this gap. It looks like there's an imbalance between supply and demand because actually we're talking about 28 identified listed players that could fill up the gap. Interestingly, out of those 28, so we're talking about the Argenx, Sandoz Pharma of this world-

Stephen Hansen:

Right.

Mehdi Ainouche:

profitable companies, and it could, can go down to, you know, 2 billion type of early revenues, early revenues, which is al- already quite good, right? Cytokinetics as well type of um players. Talking about those 28, 10 have already been acquired in the last two years. Mm. Which means, I mean, from now, you know, retrospectively in two, two years before. The last one was Apellis uh acquired by Biogen.

Stephen Hansen:

Right.

Mehdi Ainouche:

So it looks like there's another 18 left. Let's see what's gonna be, you know, the next big move, but that was an interesting part of the play. now we all see that things are getting more competitive. Um, so pharma are definitely acquisitive. Despite all of these acquisition, all of these numbers, you still see that there's this strong dry powder, almost a trillion out there. It's getting more competitive. Now you have mid-size pharma that are super active. big biotech, Genmab is in the play. Argenx could when you look at the, the amount of cash that they have. So let's see. By the way, some of these folks are both targets for big acquirers as well as acquirers themselves.

Stephen Hansen:

Yeah.

Simone Fishburn:

Yeah, so that's what's been really interesting to see is that you've got this whole new class of acquirers. We saw Genmab become an acquirer itself, and so we know that also the number of biotechs taking products to market themselves is growing. So how do you think that plays out? Do you think that that just becomes a permanent part of the ecosystem? Would you think those sort of what we call biotech acquirers or big biotech acquirers will themselves just get swallowed up?

Mehdi Ainouche:

So interesting. Let's see what the future reserves, but all I can say is that for, especially in Europe and uh you know, for talking about our perspective at Jeito and our portfolio companies, it just opens a new set of opportunities and optionality for, you know, BD partnering discussions with the different players. and, it must be almost a reflex, you know, not to put away any phenotype of acquirer and you must not forget those uh you know, let's say new players out there that have appetite that are coming to the market who you can speak with. Obviously each one has its own constraints. For example, we know that pharma can go big uh in terms of check size, can go fast, and can put 80 people in the data room to review all the data and put uh you know, an offer on the table within days. But, you know, I, I had an interesting discussion with, here again I won't quote, but let's-- a global head of a mid-size BD pharma who told me that one of their latest billion-dollar acquisition, they, they were able finally to, to change their habits and move within three weeks and find-- ultimately win the bid. And that to me is new, and I learned it right here. So, you know, it, it seems like it's a new type of dynamic area. It's, it's super exciting.

Stephen Hansen:

I wanted to get you guys' perspective on one of those deals that, that we saw this year, which was the, the Organon takeout. In particular because as Simone just mentioned, they were one of these companies that had sort of grown into being a acquirer, and we kind of had started to view them as an aggregator of women's health assets. And with them being taken out, you know, I think we talked about this internally at the time, like is this a good thing for women's health? Is this a bad thing for women's health products, like in the advancements there? Do, do you have a perspective on That and where that might be going?

Mehdi Ainouche:

So y-you could look at things in, you know, the two different angles and the, you know, the half empty, half full glass. I'd say that, when I, when I saw the news myself, well, it, it was quite known that Organon was probably looking at, you know, different sort of optionality. so now let's say being backed or, as you say, swallowed by a different player, you, you could think of, okay, there's a more solid player now for women's health acquisition, which honestly is I think going in the di- in the direction, but the good direction. But y- you know, we're still having this very identified, I don't wanna say small number, but very identified number of acquirers in the women's health space. Nevertheless, Lilly is in the game. They've been announcing-

Stephen Hansen:

Big.

Mehdi Ainouche:

Yeah. Uh uh their chief scientific officer is in. Um, they have an internal task force now. We, Jeito, have our own play from an investor perspective. We've been scouting assets, scouting teams. By the way, that's the first asset we're looking for is to build around teams, and we have a uh clinical stage company called ReproNovo, which is addressing fertility, endometriosis, adenomyosis, embryo, um uh implantation. And we know that the key take home here is probably that for women's health partnering, you're gonna have to push it to commercial stage to be, you know, a plug-and-play franchise for potential acquirers.

Detlev Mennerich:

Glad hearing this. So if I talk about what do I see and inhale, get inspired here, I think our industry was not able to deliver on, on women health, and we were not able to delivering on neurodegeneration. And being here in Prague these days, I see early ideas, concepts which are outside of the established pathways in neurodegeneration, also women health, endometriosis, osteoporosis, and this really inspires me because if we look what is the next wave, because the science, the data first, then we can talk about M&A, the data are driving this. If I look, I think you had it in one of your other podcasts. There is a silent revolution, siRNA and ASOs was approved in niche indications established modality. But there will be in the next six, seven months, five major Phase III readouts for acquired diseases, Lp(a), PCSK9, Huntington’s. This will establish a completely new modality. Also in the context of China, if you go to Suzhou, they are only on one campus. There are more than two dozens of siRNA companies, different chemistry, different approaches. So this is inspiring. So the science, and also there's a, not perhaps a silent shift, but it's a seismic shift, I would even say. All the deals also you were reporting on, on the in vivo CAR T for autoimmunity as well as in cancer, this will change the, the CAR T pioneering work, establishing this as a modality into completely new heights, and this is not working on symptoms. It's a B cell repertoire reset. First time we can talk about curation of autoimmune diseases. This is a revolution of our industry where we should be proud of so yes. So, so many companies I saw it, I know everything. No, by far not. Really great ideas, concepts. This is inspiring me.

Stephen Hansen:

Yeah. No, that's good. It's a really good review. And Josh, I'm sorry to have left you for so long, but in actual, you know, I thought I was gonna try and do you a bit of a favor because you've been pretty much emceeing every panel or thing for the last two days, that your voice was maybe getting a bit hoarse. And so I was gonna give you a, a break before I brought you in.

Josh Berlin:

Appreciate it.

Stephen Hansen:

So I hope, I hope you've recovered that for now. But can you give me a few uh you know, takeaways, maybe just from like the regional kinda like vibe perspective on how it's gone this week?

Josh Berlin:

Yeah. Uh, thanks uh Stephen. So um you know, a lot of energy this week but I think also a lot of recognition and discussion that essentially innovation can happen anywhere. A lot of discussion obviously about China. you know, BioCentury's been-

Stephen Hansen:

It's another topic... Josh Berlin: going out to Uh, and when we first started going out 13, 14 years ago, there weren't a whole lot of people that, at least in the West, that really believed there was a lot of innovation going on in China or that there would ever be a lot of innovation going on China. You know, there's discussion about the Organon buyout. I mean, Sun Pharma, I was at an US-Indian uh conference last week in Boston when that news broke and uh it was the talk of the room about Sun Pharma becoming a global player essentially via this deal. and here, you know, in, in Prague, where, you know, there's been so much energy and we've had just a great regional host a committee chaired by Prague.bio, IOCB Tech and a few others. and we had the good fortune on Sunday night to uh get invited to a uh a local play that was um put on by, uh... the play was one that had been launched a while ago, but it was put on-- Special edition was put on for a few of the guests in town for Bio€quity and was called The Elegance of the Molecule. And I'm based in the US um I certainly think I know a lot about Gilead, think I know a lot about HIV medications, and in fact, I had forgotten That um the story of Gilead really in many parts started here in Prague with some molecules that were, you know, licensed in by Gilead by John Martin, who was head of R&D at Gilead. He had first started looking at the molecules when he was at Bristol, and I think it just, to me it was very inspiring to hear how you know, a Professor Holy here was able to develop something discover something that uh you know, became one of the most important drugs really over the last 30 years, right? I mean, all the-- look at all the folks that have been impacted by uh you know, that had HIV, Hep B as well. To me that was really in- inspiring and so really wanted to thank our regional host for that, and I, I think it's, it's something that BioCentury really believes in, and hopefully uh we'll continue to see innovation coming from places not only where we expect, but also where we don't expect.

Simone Fishburn:

I just wanna second that, and I would say if people get the opportunity to see the play, The Elegance of the Molecule, it's really worth it. I think uh a lot of people in the US you know, in the-- especially this gen, don't necessarily know the foundational story of it and John Martin's incredible contribution there.

Stephen Hansen:

Well said. well, I think that's all we have time for. well, we have 33 seconds left, but I need to kinda get this, get this going, and I don't think there's enough time. I had a trivia question that I'd drawn up before. Okay, come on,

Simone Fishburn:

let's do it. We can go over.

Stephen Hansen:

It's a bit-- Well, but without the context, it's not as, as good.

Simone Fishburn:

Well, what's the context? Try us.

Stephen Hansen:

The context. So the context, this was-

Simone Fishburn:

Everyone loves a trivia question... Stephen Hansen: meant to come yesterday, but um someone-- we didn't get around to that topic. I won't, I won't name names. But what I'd wanted to discuss was sort of this growing sense, at least in the conversations I've had with people about Europe and its sense of needing to try and be more self-reliant in some ways. Not every way, but in some ways, in terms... And I think a lot of that was coming out of this idea of can Europe provide more capital to its own companies? So rather than VCs raising billion pound, you know, billion euro funds where the vast majority of that LP capital is coming from outside of Europe, can you have those funds being majority funded by insurance providers, pension funds, these sorts of things? So that was context of some of these conversations I've been having. Okay. I was sure this was gonna be about the Eurovision Song Contest.

Stephen Hansen:

It's not.

Simone Fishburn:

Oh.

Stephen Hansen:

I promise. But it just got me thinking-

Simone Fishburn:

ABBA. ABBA was in it... Stephen Hansen: a- then so what flows there other ways that Europe can become more self-reliant, and that gets into, like, capital markets, and I'm not gonna have that discussion about whether we need to build a NASDAQ in Europe yet. But it did make me wonder when was the last, like, looking back 10 years, and this is, so this is-- comes to the trivia question. Don't look at the answers. In the last 10 years- How many European biotechs, and I'm using biotech very loosely here, how many European biotechs raised more than 100 million in an IPO on a European exchange? So 10 years, going back to the beginning of 2016, I believe. I'm gonna give each of you a guess.

Mehdi Ainouche:

At the IPO?

Stephen Hansen:

You wanna guess first?

Mehdi Ainouche:

At the IPO or follow on?

Stephen Hansen:

At the IPO.

Mehdi Ainouche:

At the IPO.

Stephen Hansen:

Yep.

Mehdi Ainouche:

Wow.

Detlev Mennerich:

From Euronext.

Stephen Hansen:

From any EU exchange.

Simone Fishburn:

10 years. I think we should poll the audience.

Stephen Hansen:

Yeah. Let's, let's get, let's get some answers.

Simone Fishburn:

Eric's got his hand One.. Eric's saying one.

Stephen Hansen:

Wow. Okay.

Simone Fishburn:

Dave, Karen?

Josh Berlin:

Sounds like an auction. Anyone-

Simone Fishburn:

Yeah.

Josh Berlin:

We get two from anyone.

Simone Fishburn:

No, no raises on the one.

Mehdi Ainouche:

I, I, I literally started my career 10 years ago, so I should-... you know, have the visi- the visibility.

Stephen Hansen:

Just be-- I-- Remember, I said very loosely. I said the loose definition of biotech, so.

Mehdi Ainouche:

Um, I, I would be in, in a line o- one or two. One? Yeah.

Stephen Hansen:

Steve have you got any guess?

Steve Usdin:

Since it's coming from you, I would guess the answer is zero. Guess it's probably a trick question.

Stephen Hansen:

Well, this is gonna end on a very positive note then, 'cause it's not. It's actually-- The answer's actually three. Um, yeah.

Simone Fishburn:

I was gonna say three.

Stephen Hansen:

But again, I'm, I'm gonna go- It

Steve Usdin:

doesn't count if you say it now.

Stephen Hansen:

So it was Galderma quite recently, which you can debate whether that was really a biotech IPO. That's why I said loosely. Uh, one was Nightingale, which was a healthcare services company in London, which I was not familiar with to begin with. And then Polyphor, which was a Swiss anti-infectives uh back in, I think, 2017, 2018.

Detlev Mennerich:

yeah.

Stephen Hansen:

So um point being, there were three, so more than you guys thought, but then there were 27 European biotechs that did IPOs on Nasdaq during that same period and raised more than 100 million. So still quite a bit of dependency there from uh from Europe.

Simone Fishburn:

All right. Well, next time let's do a Eurovision song contest-

Stephen Hansen:

Next time we can dig more into that... Simone Fishburn: because I think But for the time being, we now are over time so I think we should wrap it up. So thank you to our audience for joining us for this special edition of the BioCentury This Week podcast. thanks to our listeners for tuning in. We will catch you next week wherever you get your podcasts. Or if, for the audience, if you wanna come join us live again next month we are at Grand Rounds conference in Seattle. we are then at our Grand Rounds Europe conference in Amsterdam in September, and then next year we will be in Copenhagen for our Bio€quity 2027

Simone Fishburn:

Absolutely. Copenhagen, we're looking forward to it. Josh, any last words about Copenhagen?

Josh Berlin:

Yeah, just um lot of energy already. We've already opened up early bird or super early bird registration, and we hope you'll all come out in May uh 2027 and have a great regional host committee uh chaired by, uh-

Stephen Hansen:

Who are those-- who are the regional hosts, Josh? Just remind me. I've, I've forgotten..

Josh Berlin:

Cue me up. Cue me up.

Stephen Hansen:

Who, who are those regional hosts, Josh?

Josh Berlin:

Let me, let me tell you, Stephen.

Stephen Hansen:

Thank you. Uh uh chaired by uh Novo Holdings and Lundbeckfonden and uh quite a few others in the ecosystem there. So we hope all of you will uh come back uh for our 27th Bio€quity, and uh we look forward to seeing you in May 2027.

Simone Fishburn:

I think what we should do is start inviting uh people to send in their requests for the trivia question of the podcast next year.

Stephen Hansen:

Okay. All right, let's do it. All right. Thanks everyone for joining us. Have a great week. Thank you.

Mehdi Ainouche:

Thank you

Josh Berlin:

Thank you.

Detlev Mennerich:

Thank you. Bye-bye

Voice Talent:

BioCentury would like to thank Jeito Capital for its continued support of our BioCentury This Week podcast and our 26th annual Bio€quity Europe conference this May in Prague, Czech Republic.

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