Ginkgo, Neumora, Pfizer, GSK, Intergalactic, Voyager

Less than spiffy SPACs, big brains big money, Malaria buzz, vaccines, tests, series A, and Voyager gets a renewed lease on life

Originally Published as The Niche Podcast.

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About the Show
Life Science Today is your source for stories, insights, and trends across the life science industry. You can expect 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, less than spiffy SPACS, big brains big money, Malaria buzz, vaccines, tests, series A, and Voyager gets a renewed lease on life.

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.


SPACs Not So Spiffy

Special Purpose Acquisition Companies (SPACs) have been around in some form or another for a while. The basic idea is that a company is set up, just to raise money, and then uses that money to acquire an existing company that wants to go public. Historically, they play a relatively small role in the market. They accounted for 0-14% of total IPO capital raised in the years 2003-2016. And this wasn’t a linear trajectory. It faded up and down. Then in 2018 the total numbers of SPACs in the USA began to raise to 46, then 59, then a whopping 248 in 2020. This year there have been 461, and they accounted for 62% of US IPOs. 

One of the reasons SPACs can be so useful is that they can circumvent the complex regulatory processes required for a traditional IPO. During that process, fast moving companies may have to put significant endeavors on hold while the IPO is processed. The end result is, more often then not, a well vetted company that is reasonably likely to have not totally deceived investors. I’m not saying this doesn’t happen, but the processes in place are there to protect investors and ensure the general veracity of a likely risky expenditure – investing in a newly public company.

This week, allegations emerged that Ginkgo Bioworks (ticker DNA) has utilized questionable accounting to raise capital and maintain their value. We reported when Ginkgo announced plans to raise $2.5B through a SPAC back in May. That process was finalized in September. A portion of their $15B valuation was based on existing revenue streams and the promise of more to come. Now, certain whistle blowers and saying “hey these numbers don’t add up.” Core to the allegations is that 72% of Ginkgo’s reported revenue is from related parties. This is basically a financial loop where Ginkgo backs companies and those companies use Ginkgo’s services with the money they (or related parties) invested and that is then looped back to Ginkgo as revenue to shore up the sense of progress. There are a lot of other claims around this that make it sound a bit iffy.  

Whether these allegations will stand the test of time is yet to be determined. And of course, Scorpion Capital, the company making the allegations, holds a short position in Ginkgo. So, maybe it’s a big old cycle of everyone trying to make a buck. I am certainly not the best source to evaluate the veracity of financial claims. What I can say is that science is extremely hard and Ginkgo’s fundamental claim at this point is that they’ve got the fast-track to synthetic biology. We’ll see. Perhaps the more pressing issue is a question: is a market dominated by SPACs as the primary vehicle for companies to go public is a safe or stable market?


Go Big or Go Brain

Neumora Therapeutics has launched with $500M in Capital including a $100M strategic partnership with Amgen. This latest company diving into the neuroscience space is positioned to “redefine Neuroscience R&D.” They plan to do this by bringing data-driven precision into their pipeline and presumably to the clinical development process. Specifically the idea is that Neumora can target patient populations. So it’s not about identifying better candidates but more precisely mapping candidates to patients. Amgen has provided major capital investment but has also licensed several assets to Neumora for development. Integrating multiple data-streams to identify patient populations sounds enticing. My suspicion is there will be significant challenges ahead to actualize this solid approach into a clinical pipeline. One reason is that recruiting the right participants to clinical trials is perennially difficult. Adding a multiplexed data algorithm from numerous assessments to inclusion/exclusion criteria will be a meaningful obstacle. Conversely, without the convenience of biomarker testing, how are we going to advance precision medicine in neuroscience? We’ll watch this effort to see what happens in 2022 and ‘23.


Latest Malaria Buzz

The World Health Organization (WHO) recommended broad deployment of GSK’s Malaria vaccine in sub-Saharan Africa this week. The mosquito born illness has a dramatic impact across the region, and is particularly deadly to children, with more an ¼ million under the age of 5 dying to the disease annually. This is a major advancement in the treatment of Malaria, and when combined with other treatments there was a 70% reduction in severe cases and deaths. Vaccines against parasites are notoriously challenging to create, so these lower numbers compared to say, a COVID19 vaccine are actually very difficult to achieve. It’s a big move. However, this is probably not the last word on Malaria. But with the WHO’s endorsement, GSK will move forward with distributing millions of doses.


Pfizer for Children

Speaking of vaccines that impact young people. Pfizer has advanced an application to the FDA for emergency use authorization to utilize their COVID19 vaccine in children 5-12 y/o. Currently the vaccine is approved in individuals 16+, and has EAU for children 12-15. This latest advance comes on the back of significant additional data from Pfizer’s ongoing clinical trials. Generally, EUA is anticipated sometime in November, though the FDA could push back and ask for additional data. 

The White House is also out to combat COVID this week, but through a string of significant investments into testing. Broad and early testing are critical to controlling any pandemic. This latest move sees $1B moving to at-home testing companies to increase their testing pipeline. With the pandemic slowly transition to the next phase, rapid and available testing is seen as a necessary step.


Intracellular via Intergalactic $75M Series A

Intergalactic Therapeutics launched this week with a $75M series A to develop non-viral gene therapy technologies. Based on their announcement it sounds like they are basically electroporating circular DNA into humans. DNA derived from bacteria are of course circular, and they have been used for years in animal studies. In the case of Intergalactic, they are using non-bacterial derived DNA, but with the same circular structure and probably some other special sauce to drive long-term stability. The delivery system, called COMET, sounds like glorified electroporation. I used this technique extensively in graduate school. It involves first injection some circular DNA near the desired tissue and then pulsing electricity across the region. The electric field pokes tiny temporary holes into cells and draws the DNA in. Cells that uptake the DNA can then produce proteins. This could be an excellent technique for places where targeted delivery may be required, whether it’s tissue specific modifications or even tumor-based oncology. I’m not sure which direction in the galaxy they are heading, but Intergalactic does have Michael Ehlers, the former CSO for Neuroscience at Pfizer, at the helm. In a crowded market of nano technology and viral vector delivery techniques, Intergalactic has a unique approach. It will be interesting to see if their COMET system provides the reproducibility and precision needed for human therapies.


Voyager’s Lease on Life, via Pfizer

Speaking of going intergalactic, Starship Voyager just got a second shot at life. A second chance is not common in the biotech startup space. You make one run to warp speed, or you crash. Voyager Therapeutics has beaten the odds, with a new deal worth up to $630M from Pfizer. 

Once a rising star with a promising Parkinson’s and Huntington’s treatment, Voyager hit major snags and an FDA hold for odd MRI images in their Parkinson’s study. Then their $1.8B partnership deal fell through as Neurocrine dropped out. All of this lead to a long decline in stocks from close to $30/share in 2019 down to just $2.47 last Tuesday. But Pfizer has stepped in and licensed two AAV vectors for $20M in cash and up to $600M in milestones. 

As we mentioned in the previous story, AAV and nano-technology delivery systems have been hot commodities the last couple of years as hundreds of companies search for the safest and most effect mechanisms of delivery for the burgeoning gene-therapy market. Voyager has decided that if they can’t transform Parkinson’s, maybe they can be the best AAV technology company.