Life Science Today 026 – Top Trends from 2020

Originally Published as The Niche Podcast

Trends in science from investors and immune-oncology to decentralized trials and basic research, we look back on 2020



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Music by Luke Goodson
https://www.soundcloud.com/lukegoodson

Life Science Today is your source for stories, insights, and trends across the life science industry. Expect weekly highlights about new technologies, pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to biotech IPOs. Life Science Today also explores trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed and approved. It’s news, with a dash of perspective, focused on the life science industry.

Transcript

Introduction

Welcome to The Niche Podcast – Your weekly rundown of the biotech, clinical research, and life science industries. I’m your host, Dr. Noah Goodson. This week, trends in science from investors and immune-oncology to decentralized trials and basic research, we look back on 2020.

2020 has been a fascinating year across the science world. Huge transitions have occurred in typically cumbersome fields and there have been winners and a few losers. However, the suit of healthcare-associated industries, as a whole, have done very well. There are a lot of simple and complex reasons for this. For example, heading into this pandemic there were a lot of investors with cash stockpiles in need of investment, the pharma-related industries have received more press which has been generally positive, and governments around the world have surged stimulus money into economies which to date has staved off any global recession. But those are just broad economics. There are also industry-specific changes that have occurred while navigating a global pandemic. I want to take a look back on some of the biggest trends that shaped 2020 in our industry. While this is no definitive guide on the year, my hope is that it gives you a few peaks and valleys to carry forward into next year.


Investor Capital and Market Interest

82 biotech companies went public on the Nasdaq this year raising more than $15 billion. This is money like has never been seen in this industry. The second closest year on record was 2018 where 72 companies went public, raising just $8.4 billion. There were not only more companies this year, but they almost doubled the amount raised. That’s just an absurd amount of money. But keep in mind, there was also billions raised in private and venture capital funding. Money has flowed into the industry. Now, this is biotech and not all companies will survive the gauntlet of the next couple of years, but the capital is invested and there will be value created as a result. Years like this create the opportunity for output across the next half-decade or more.


Immuno-oncology

The success of mega-blockbusters like Merck’s Keytruda has continued to drive interest in monoclonal antibodies and other immune-related direct oncology treatments. Several companies raising massive series C or D rounds or going through mergers and acquisitions have products in this space and numerous major players have reiterated their interest in developing these therapies. I doubt every top 50 biotech company thinks they’ll win in the PD-1 inhibitor space. Instead, I think they are “virtue signaling” to investors. Some will get blockbusters, but others will convince investors they are trying long enough that they can develop something else that does work. Perhaps a good way to think of this immuno-oncology super-therapy chasing is as the first round in the fight to win at personalized medicine.


COVID Testing

A small story from episode 17 highlights what I think is a huge trend in 2020: COVID19 testing is incredibly profitable. Thermo-fisher, the scientific supply company made $2 billion in COVID-related sales in Q3 alone. With close to a billion COVID19 tests performed globally, all those supplies have to come from somewhere. Whether it’s a novel at-home kit, a drive-through with a nasal swab for PCR or an antibody kit, those require supplies. In fact, supply shortages are one of the reasons that tests are often delayed or can be hard to get. There is no sign of a slow down in 2021. While vaccines role out and infection rates may drop in summer 2021, testing will remain high through much of the year.


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Decentralized Clinical Research

Decentralized clinical trials have been a catchphrase in the CRO world for years. However, they have historically been sparsely implemented. 2020 has likely changed that forever. Major companies, like Covance came out and said in effect “we are building our whole business model around decentralized trials.” The pandemic accelerated two major factors that allowed this to happen. Consumer readiness and institutional regulation. The consumers of clinical research, being both the public who volunteer and participate and the sponsor, who wants the product to succeed have been drafted into a world where a more decentralized remote model has a greater appeal that an in-person model. By not seeing participants, risk is decreased, rather than the other way around. Centralized hubs (like major research hospitals) have been on hardcore lockdown and getting people in the doors for an unnecessary visit is harder than ever. Along side these changes, new guidance from the FDA allowed trials to shift, mid-stream if needed to continue during the pandemic. While the largest players are not likely to go fully decentralized like Covance soon, expect this trend to be implemented in force in 2021 and beyond.


Basic Science Research

Basic science, like all “non-essential” industries, has been impacted by COVID19. Significant portions of basic research are completed at research institutions and universities in the US and Europe. These institutions are largely conservative in their responses to crisis, meaning significant social distancing protocols and delayed opening as a result of the pandemic. While large portions of a scientific workflow can be completed from a distance (writing, reading, and designing experiments) there are major time-consuming portions that happen at the bench. Any in-person collaborative project will have seen delays, and the natural exchange of ideas that happens through non-socially distanced science is a huge part of what drives innovation. It is often scientists brainstorming over lunch or at a happy hour that drives eureka, not a genius in an ivory tower.

Through personal relationships it’s my impression that basic scientists worked through a backlog of papers that needed to be edited and submitted, and then rolled up their sleeves and re-wrote some major grants. After that, the delays begin to really kick in. Some fields that require isolated work did fine, but more collaborative projects suffered in unpredictable ways because of interactions that just didn’t happen. My guess is there will be “dip” in basic research productivity that won’t be felt. It’ll just be a slow slope down and then back up again. Real economic loss of productivity happened, but because this change is so broad and so decentralized it will be hard to pinpoint. Additionally, many Universities are navigating major identity crisis around what education is, how it should work, and how much it should cost going forward. And don’t be fooled, these crisis in identity, specifically the financial kind will have real and lasting implications for the research labs at these institutions. Counteracting this loss may be a renewed public and congressional interest in supporting basic science research.


Accelerant

More than any other single word, I believe 2020 acted as an accelerant on pharma-related industries. Yes, some specifics completely changed, but much of what has happened has pushed business models forward in a direction they were trending. More opportunities for remote work, flexibility for workers dealing with families, and increased digital communication across the space. Cumbersome and slowly evolving institutions like the FDA showed a robust transition into this new time, rolling out improved guidance for remote trials and creating generally sensible guidance for test kits, therapies, and vaccines. The movement into decentralized clinical research gained real traction with companies like Covance saying that will define their model going forward. At the early stage, billion and billions of dollars in capital have been raise by early, mid, and late-stage startups and more than 80 companies have gone public in the space - an unprecedented number. Investors have a solid interest in mid-term investments in biotech, not just short runway technology companies. In basic science “pre-prints” are now getting national news coverage and clinical trial design is discussed openly in public spaces.

Most of these trends are not new. They’ve been happening in fits and starts and small ways. But 2020 has accelerated them, driving us forward into a fully 21st century industry. Will there be dinosaurs in how research is conducted? Absolutely! Will review boards have absurd expectations and backwards questions for decentralized trial designed? You betcha! Will clinical science be less complex? Hardly. But I believe much of the digitalization and mobilization is here to stay. Flexible hours and work from home options are hard to renege after a year. And there is one industry wide trend that will impact every one of us and it doesn’t take a PhD identify it: You’ll be have zoom meetings for years to come.


Closing Credits

Thanks for joining me on The Niche Podcast; your weekly summary of top news in the biotech, clinical trials, and life science industries. You can learn more at thenichepod.com or find us on your favorite podcast app. Like, comment, subscribe, and most of all share with your friends. If you like what you hear, please rate and review, it really helps us. Once again, I’m Dr. Noah Goodson, I’ll see you next week.