Originally Published as The Niche Podcast
BeiGene’s oncology machine, China oncology pipelines, COVID costs, two new FDA approvals, $5B life science merger, and Hong Kong joins US SPAC party
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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.
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, BeiGene’s oncology machine, China oncology pipelines, COVID costs, two new FDA approvals, $5B life science merger, and Hong Kong joins US SPAC party.
Disclaimer
The views expressed on The Niche Podcast are those of the host and guests. They do not necessarily reflect the opinions of any organizations or companies with which they are affiliated.
BeiGene’s Brukinsa Earns Second FDA Approval in September
BeiGene’s major oncology product Brukinsa has earned a new FDA approval this week for patients with relapsed or refractory marginal zone lymphoma. This comes just two weeks after the approval to treat Waldenstrom’s macroglobulinemia, a rare form of non-Hodgkin’s lymphoma. The back-to-back approvals bring the therapy to four approved conditions in the US across lymphoma and leukemia with more indications approved at home in China.
Marketed as Brukinsa, zanubrutinib is a Bruton’s tyrosine kinase (BTK) inhibitor. BTKs play an important role in B cell development and function and can be disrupted in certain cancers. BeiGene is certainly happy to be broadening the reach of one of their leading products. But BeiGene’s pipeline extends well past a single therapy with up-and-coming treatments, including their PD-1 Inhibitor Tislelizumab, which is already marketed for five conditions in China with dozens more in clinical trials.
BeiGene’s wins over the last year are not just riding on the backs of approved therapies. They have made big partnership deals. In Episode 003, we covered their registered direct offering of $2.1B with Amgen maintaining a 20% stake in the company. Then, in January Novartis paid $650M upfront in a deal worth north of $2B to licenses Tislelizumab in North America. First approvals of the PD1 inhibitor are expected end of 2021 or 2022, with more than a dozen potential indications in clinical trial.
Normally, a company with that rich of an oncology portfolio would be acquired by a pharma giant. But I think that will not happen, and not just because BeiGene has a mature and financially stable position. BeiGene is a leader in the burgeoning Chinese oncology pharma space. And oncology is going to be big business in China for a long time to come for a lot of socioeconomic and demographic reasons. Serving China as a Chinese company is a major logistical and approval win, and remaining a Chinese company matters. In the broader political context, big-pharma is probably better off gaining licenses to sell BeiGene’s therapies (like Novartis) or just owning a profitable minority stake of the company (like Amgen). With more approvals rolling in and a rich pipeline, I also expect to see BeiGene look to license or acquire other therapies. They are in a strong position to act as the Chinese face of North American oncology products through strict licensure or co-development.
Everest Inks $550M BTK Inhibitor Deal
Speaking of BTK inhibitors from China, Everest Medicines has signed a deal with Suzhou Sinovent and SinoMab to develop their BTK inhibitor. The deal sees Everest pay $12M upfront with $550M in milestones. Unlike BeiGene’s Brukinsa, this BTK inhibitor is currentl y being targeted at Kidney diseases. Based on the framing of the deal, it appears likely that Everest will lead by developing SN1011 in China first and then exploring global opportunities based on population responses during Phase II trials.
The Cost of COVID? Add another $2.9B
Regeneron has struck a $2.9B deal with the United States Government to deliver 1.4 million doses of REGEN-COV. The COVID19 antibody has been shown in clinical studies to reduce COVID19 related hospitalizations and death by 70%. While not FDA approved, the therapy has been given emergency use authorization (EAU) in at-risk populations. The US government is looking at the numbers of COVID19 as the diseases continues to spread, primarily among unvaccinated populations, and has determined to ensure a supply of therapeutic options. Unfortunately current trends suggest this is a good move as COVID19 numbers will remain high across the United States in the coming year. Vaccination rates continue to rise slowly but steadily, though if FDA approvals emerge for children later this year, there may be an increase across the winter months.
Two Oncology FDA Approvals
Takeda has received FDA approval to treat patients with EGFR Exon 20+ non-small cell lung cancer with their therapy EXKIVITY. EXKIVITY is a first in class oral tyrosine kinase inhibitor (TKI) that treats this rare lung cancer. Unfortunately for Takeda, their drug may be first in class, but it’s not first to target, with J&Js RYBREVANT receiving approval earlier this year. This takes a small population of <4000 patients/year and shrinks it further through market competition. Additionally, it’s not clear that EXKIVITY would beat RYBREVANT head-to-head.
Exelixis has earned FDA approval to treat a rare thyroid cancer with CABOMETYX. The therapy already has a number of approvals, but this latest is for those with Radioactive Iodine-Refractory Differentiated Thyroid Cancer. While this approval is only for a sub-population of thyroid cancer patients, CABOMETYX produced a 6x increase in progression free survival compared to placebo. Since this approval is for patients who have already been treated and have limited remaining options the placebo-controlled trial results are quite promising.
Exelixis stocks have moved up and down over the last 18 months, but their revenue stream and EPS are on track for a strong year, beating revenue targets by 28% in Q2. If this trend continues in Q3, I wouldn’t be surprised to see bigger buy-in from investors.
PerkinElmer Completes $5.25B Acquisition of BioLegend
The life sciences have not suffered through the pandemic. Testing and re-agent companies continue to turn over robust profits, while new technologies rapidly become acquisition targets. In an effort to expand their capabilities in antibodies and testing, PerkinElmer has completed the $5.25B acquisition of BioLegend. With a revenue stream of $380M/year, the price tag is fairly steep, but PerkinElmer is also getting a large technology and client pool that can be mixed with their own tools to increase revenue. Their expect to add $100M to that revenue line just through synergies with BioLegend. But whenever you sell a 19-year-old company for 14x your revenue stream, you’ve probably made a decent sale.
HK-Based Medtech, Prenetics, Gets $1.7B Valuation Through SPAC
This episode we’ve mostly highlighted a number of companies in and around Asia. We close with a Medtech SPAC coming to the US out of Hong Kong.
Prenetics Group is a medical diagnostics startup that made a big splash with their COVID19 rapid diagnostics. They will go public on the Nasdaq with a valuation of $1.7B through a SPAC under the ticker PRE. The deal will put $459M in their coffers to focus on M&A activities that get them into the American Market. There are huge opportunities in clinical diagnostic testing, from the rise of direct-to-consumer at-home products to the significant need for accurate and rapid tests for numerous niche oncology treatments, there is plenty of room for new players in the market. That being said, testing is a complex market and growing a billion-dollar organization in that space often requires a large and diversified pipeline. For their part, this is not a no-revenue unicorn. They are projecting $205M in revenue this year, a tripling of 2020 numbers. As with BeiGene, they are in the complex and more rare position of emerging from China into the west, but with a strong Asia-centric financial foundation. Prenetics plans to turn their windfall into a tailwind and they are hinting that North America is key to that strategy. I’m definitely excited to see how capital and technology become bidirectional between the East and West over the next decade in these industries.
Closing Credits
Thanks for joining me on The Niche Podcast; your weekly summary of top news in the biotech, pharma clinical research, 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.