Originally Published as The Niche Podcast
Critical intellectual property move by Biden-Harris, Pfizer goes for full approval, SPAC 1, SPAC 2, Regeneron drops big numbers, and an IPO gets punted.
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Story References
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Music by Luke Goodson
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The Niche Podcast brings you interviews with industry experts and top stories from last week in biotech, pharma, clinical research, and the life science industries. You can expect highlights about new technologies, biotech and pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to IPOs. The Niche also tries to highlight trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed, move through clinical trials, and become approved by regulatory agencies. It’s news, with a dash of perspective, focused on these Niche industries.
Introduction
Welcome to The Niche Podcast – Your weekly rundown of the biotech, pharma, clinical research, and life science industries. I’m your host, Dr. Noah Goodson. This week, critical intellectual property move by Biden-Harris, Pfizer goes for full approval, SPAC 1, SPAC 2, Regeneron drops big numbers, and an IPO gets punted.
Critical Intellectual Property Considerations
The Biden-Harris administration has signaled they may be willing to break patent laws surrounding the COVID19 vaccines. The announcement came through Katherine Tai, the United States Trade Representative. In a statement released May 5th, the representative spoke on behalf of the administration indicating they are interested in waiving intellectual property rights surrounding the COVID19 vaccinations. They further stated their willingness to continue “working with the private sector and all possible partners - to expand vaccine manufacturing and distribution.”
It should be no surprise that the move met significant praise and opposition. Proponents believe that providing the most vaccine access to the most people, particularly technologies subsidized by the American people, is of the highest good. Plus, everyone can agree the sooner a global pandemic is over, the better. There are, however, significant criticisms. At the most basic level, vaccine manufacturing, especially mRNA vaccine manufacturing is incredibly complex and very few facilities in the world have the capacity to execute at the required standards. Furthermore, a significant source in delays currently is the lack of raw materials. It’s not clear how breaking patent laws will enable meaningful increases in the speed of vaccine distribution, and it may introduce more challenges, like fake or poorly manufacturing vaccines.
The most obvious objection is that US intellectual property laws are one of the largest drivers of capital investment and innovation. The government choosing to break those laws, regardless of the reason, should be of significant concern to industries far beyond biotech and pharmaceuticals. The Biden-Harris administration has demonstrated a considerable ability to make deals, so it’s possible they form a lucrative enough agreement that the companies willfully “choose” to release their intellectual property. This would avoid the sticky waters where the government “forces” a company to release IP. It’s also possible that this is virtue signaling meant to generate a multi-year negotiation that effectively last until it is no longer a fiscally meaningfully conversation. If a deal cannot be brokered, lawsuits will occur and any case of this magnitude would rapidly progress to the supreme court.
Full FDA Approval
At the same time the United States has signaled willingness to upend patent protections for their vaccine, Pfizer/BioNTech has submitted a Biologics License Application (BLA) for their COVID19 vaccine to the FDA for individuals 16 and older. Originally approved under emergency use authorization, continued data has robustly supported the safety and efficacy of their vaccine, including robust efficacy against new variants. As one of the 170M Americans to benefit from this vaccine, I may be biased, but I suspect full FDA approval will be quick in coming. Of additional importance, they are also seeking to add 12–15 year old’s under Emergency Use Authorization.
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Roivant Announces SPAC
Roivant has remained one of the most valuable privately owned biotechnology companies on earth. From 2014 to 2018 they raised over $1.9B. This week, they announced they are going public through a SPAC, valuing the firm at $7.3B. After raising an estimated $611M through the process, they will have a robust $2.3B in cash on hand.
Roivant has been built around a primary company with subsidiaries in multiple directions, each interacting through the central hub. This model has allowed the to acquire major tools, like Silicone Therapeutics and VantAI protein degradation tracker, and then integrate these tools to identify and develop novel small molecule therapeutics. They have also utilized this model to buy, develop and sell off some subsidiaries as well as send others public through their own SPACs. While small compared to the big pharma companies, they have been really successful over the last 7 years. It will be interesting to see how having a public parent company impacts their trajectory going forward.
Science 37 SPAC
SPACs had been slowing down. But Science 37 has piled in this week with the announcement that they are also going public through a SPAC. The deal values the decentralized clinical trials company at just north of $1B and positions them with a positive balance sheet of $250M. Science 37 has been developing and distributing a centralized platform for managing decentralized and hybrid clinical trials. Just this year, they signed major deals with PPD and Syneos Health, leading CROs. Now they look to capitalize on a changing clinical research market and become a major technological force in the space. This cash will certainly be used to push forward their business development as well as technological pipelines. However, if the space continues on its current M&A trajectory, I give them 18 months before they are acquired.
Regeneron Saw 38% Year-Over-Year Q1 Growth
Regeneron posted significant increases in Q1 of 2021. They reported a 38% increase in total revenue to $2.53B year-over-year. This pairs with a 78% increase in GAAP net income and an EPS increase of 50%. So what’s driving the success? Several key products saw robust market advancement, include a 48% increase in sales of the monoclonal antibody Dupixent (partnership with Sanofi), and a moderate increase in the age-related macular degeneration product EYLEA. I don’t think this growth will slow down any time soon. First of all, the PD-1 inhibitor Libtayo (also Sanofi partnership) is starting to rack up approvals. Second, their COVID19 prevention/treatment therapy is seeing very promising results and just received authorization in India this week. All told, I’d expect significantly increased sales from multiple Regeneron products well into 2022.
An IPO Got Punted
Gyroscope Therapeutics has chosen to punt on an IPO. The clinical stage gene-therapy company hit this feed at the end of March for raising an $148M series C. A consistent trend across the industry recently has been series C, then IPO within 90 days. Gyroscope was on track to do just this, but they decided not to go forward. The statement said, “in light of market conditions.” This could be regarding global markets. But remember, there are something like 20+ companies creating gene therapies for AMD so it could also relate to their specific market. We could speculate all day about the market or internal data-driven reasons for the pivot. The truth is, we don’t know. But we will definitely watch for other companies that bail on IPOs because of the market. With more than $100M in the bank, Gyroscope has time to reposition and go public at a later date.
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.