Life Science Today 055 – Kidney Foundation, Elanco + Kindred Bio, Danaher + Aldevron, Verve, Lyell

Originally Published as The Niche Podcast

Kidney research, pet health, manufacturing is valuable, and a couple of biotech IPOs

Sponsors
https://www.thescopemethod.com

Story References
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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, pharma, clinical research, and life science industries. I’m your host, Dr. Noah Goodson. This week, kidney research, pet health, manufacturing is valuable, and a couple of biotech IPOs.


Kidney Foundation and Evolving Recruitment

An often-quoted statistic in clinical research is that most trials that fail, do so because of recruitment issues. Data suggests as much as 80% of trials fail to meet recruitment deadlines. There are multiple and complex reasons for this, including trial design and site-specific challenges. One of the slowly changing aspects of clinical research is a new suite of relationships between sites, site networks, CROs/pharma, and patient advocacy groups. Many of these advocacy groups have vast contact webs and major weight to throw around in patient specific circles, from rare disease to much broader support organizations. Patient advocacy groups often spend significant donor dollars on advancing research and have a vested interest in clinical trials succeeding so that those afflicted have new opportunities for health and wellbeing. There is a complex interplay here where patients do indeed benefit from access to clinical trials that may suit their interests and be relevant to their disease state. It’s also clear that companies stand to significantly benefit from a willing and specific base of potential study participants.

The National Kidney Foundation announced a new mechanism to directly link kidney patients and care-givers to potential kidney donors and researchers. The NKF Kidney Research Connect will help investigators identify potential patients and speed the rate of research while enabling patients to become participants if they wish. There is a real ethical quagmire here. Obviously it benefits kidney patients to have the power to participate in trials that may help them and will advance potentially life-changing therapies. But this also creates a mechanism to directly solicit individuals into trials, which massively advantages organizations that make money from running clinical trials. It is the patients who opt into the NKFs network, so it’s hard to argue there is coercion. But the big data and health data landscape is rapidly evolving. Even Google and Apple are recognizing that clinical research is one of the most pragmatic places to leverage these resources, rather than across all of healthcare. I’m not sure where this is headed in the future. There is so much money flowing in and around health data, and specific business attention is circling clinical trial recruitment pipelines. I almost expect new legislation to be drafted in the next few years that defines novel legal frameworks. As patient advocacy groups, data powerhouses, trial sponsors, and site networks vie for the best mechanisms to recruit participants, the most effective and ethical route forward is anything but clear.


Pet Health M&As

Animal health pharma accounts for around $45B annually and is expected to grow at up to 7.05% through 2026. Well known companies like Merck, and Zoetis largely dominate the space. One of the leading companies, Elanco, is expanding through a new acquisition. Elanco has agreed to acquire Kindred Biosciences for $440M. KindredBio has a range of available products and some potential major contributions to the pet health space emerging in the coming years.

Product identification presents equal challenges to pet health as it does to human health, but clinically validating products is significantly more affordable and differentially regulated, for obvious reasons. In this case, KindredBio has some enticing pet dermatology products in the pipeline that are anticipated to add $100M/year to current sales by 2025.

The terms of the deal have Elanco using a debt structure to acquire all of the Kindred’s shares at $9.25/share. At less than $0.5B this is hardly the biggest deal from Elanco who acquired Novartis Animal Health for $5.4B in 2012 and Bayer’s Animal Health for $7.6B in 2020. Elanco has updated 2021 guidance up $40M to 4.71B. At this point, they may be running out of acquisitions targets.


Sponsor

Developing a new product in the biopharma space is incredibly challenging. There are design barriers, capital to raise, and regulatory hurdles. The Scope Method provides consultative solutions to navigate industry specific challenges. We’ve helped companies pivot into new therapeutic spaces, designed and run decentralized clinical trials, and empowered CEOs with tools that turns their data into stories that raise capital. Find out more at thescopemethod.com.


Life Science Manufacturing Acquisition

Danaher is acquiring the privately held Aldevron for $9.6B in cash. Aldevron provides a suite of scientific manufacturing solutions including plasmids,    proteins, and mRNA. The production of high-quality products for the life science industry is a booming business. The fundamental levers of scientific need continue to be cranked up as biotech startups move into the market and big-pharma investment in development reaches the highest levels recorded. The technologies of the future require sophisticated mechanisms of resource supply. Sure, there is big investment into emerging CMDO spaces, but these facilities take years to get up in running. A well-oiled production machine is extremely valuable. Danaher plans to run Aldevron as an independent subsidiary. With Danaher’s broader business interests, Aldevron may benefit from their reach while Danaher can funnel other customers across their various platforms to solve a greater number of specific manufacturing needs. While Aldevron’s sales figures are not available, my suspicion is they will grow significantly in the coming years based on the broader life science landscape.


Verve Is Hot Stuff

Verve Therapeutics went public with a $267M IPO. Their lead candidate, VERVE-101 is a single-course in vivo liver gene editing tool that employees CRISPR technology to inactivate a gene, PCSK9, which ultimately decreases LDL-C levels. Their approach is extremely cool and potentially part of the future of medicine. This is not just gene editing for rare diseases though that is where it starts. It is potentially gene editing for chronic diseases. There are obviously major risk factors in pushing this technology forward, from both a safety as well as approval perspective. But on the back of their $94M series-B last summer (see episode 030), Verve has advanced their pipeline and is aiming for an IND in 2022. Investors were optimist and shares rose 68% on opening day placing Verve in a strong position moving forward. There is a long road ahead, and having done a fair amount of in vivo CRISPR, I can personally attest to the meaningful challenges their team will need to surmount, even pre-IND. Now, with cash in hand, Verve is off to the races.


Lyell Underperforms

If Verve was the hot biotech stock of the week, Lyell was the cold one. Lyell went public and sold 25M shares at $17 each, raising $425M. But on opening, the company valued just north of $4B, dropped in value. So why the mediocre response? Actually I have no idea because I’m not that sophisticated of a market analyst, but if you want to know why I think their interesting check out episode 052. Basically they have a strong diversified approach that lets them pipeline their products, self-produce, and potentially pivot as a CMDO to create  a stream of cash. This all means pivot options and durability. At least from my limited perspective I’d say they have a good stable long-term trajectory when compared to other similar biotech startups.


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.