Episode 10

Back from their travels, Luisa and Kerry “provide an update” after a jam-packed week of East Coast investor meetings. They discuss the obesity pill launches (Wegovy pill versus Foundayo), latest M&A trends (with a focus on Alumis as a potential target on immunology following impressive psoriasis data) and the start of the Q1 reporting season.

Transcript

SPEAKER_00 0:00

Hi, I'm Louisa Hector.

SPEAKER_01 0:02

And I'm Kerry Holford.

SPEAKER_00 0:03

Welcome to Over the Pill, the weekly podcast on the latest hot topics in pharma investing. So, Kerry, we're back. We've had a few weeks off. Holidays, US marketing. How are you feeling?

SPEAKER_01 0:18

Rather a little jaded this morning, if I'm honest. It's been busy.

SPEAKER_00 0:22

Yeah, we had a really busy week last week. We were East Coast, three days in New York, a day in Toronto, and then a day in Boston. But obviously we got stuck in Toronto. That was fun. Yeah. Boarding the plane to be told that we have to jump off and then had nowhere to stay. But we solved it. Indeed. And I think overall, at least 30 meetings. We've never had such a busy schedule.

SPEAKER_01 0:46

No, I think that's our best yet. And it's interesting that there is very much demand to speak farmer, although I'm not sure we detected huge love of it.

SPEAKER_00 0:56

No, still tricky. And we had to divide and conquer. I went to do some meetings alone.

SPEAKER_01 1:01

Yeah.

SPEAKER_00 1:02

Which left me a little bit exposed on obesity from time to time. But I coped.

SPEAKER_01 1:08

Yeah, so on obesity, maybe we start there because the battle of the pills is here. So the chat last week centered on the arrival of Lily's oral orthoglepron, now known as Foundaio. Some debate on that name. And so, yeah, actually, Nova and Audis came up a great deal in the discussions, essentially, how they will now fend off the competition from Lily in that oral space. But essentially, we're thinking about this is a good old-fashioned battle now. Both companies in market with the aurals. Clearly, the star for Wagovy Pill has exceeded expectations. But Lily coming in now as the sort of strongest incumbent, particularly in that DTC space. So it's going to be super interesting to see how this pans out this quarter. More broadly as well, I guess we were having a little bit more discussion on obesity and interesting to see an IPO last week, Kyle, which seemed to be hugely oversubscribed. Obesity perhaps coming back in vogue in the US. In particular, that one's interesting to follow because they have two shots on aurals as well in the pipeline: an oral GLP1 and an oral GLP1 JIP. So another pill or two to keep an eye on.

SPEAKER_00 2:32

Yes, and interesting perhaps that the three weakest performers year to date are the obesity names. So that's Lily, Novo, and Zealand. Yet there appeared to be great demand for Kylira, and it was coming up in most of the meetings, wasn't it? But yeah, MA. So I think you've also had a little couple of bits of MA news flow from your companies.

SPEAKER_01 2:53

I mean, I think it's hotting up across the sector in general, but interesting for us. Back into the last week, we had UCB make a move proposal to acquire Neurona for a $650 million upfront. So this is a single-dose regenerative neural cell therapy in phase one, two for drug resistance missile, temporal load epilepsy. So it fits in the therapeutic category focus, but somewhat unusual to see them making a move into this form methodology space and a reasonably high upfront, I would say. And it does knock a couple of percentage points off the 2026 EBITDA growth guidance, which we've had some commentary on this morning. So, all in all, I think it is a decent fit but somewhat surprising angle to come from for UCB. But you know, we were debating the likelihood that they would return to MA in what is a relatively quiet period. And Lily's still spending plenty, and I'm, you know, struggling to keep up, if I'm honest, with tracking all of these early stage deals. Today the rumour is that they're close to acquiring Kelow therapeutics for around $2 billion. So CART therapy, multiple myeloma, phase one. So again, a nice strategic fit for them, and they can obviously afford to spend an awful lot on this and many more deals.

SPEAKER_00 4:30

Yeah. And I think overall we're seeing a very positive attitude towards deal making. Some requests last week that to see more from Merck. Definitely investors want to see something from Abvi, from Sanafi, probably Novo Nordis because we're all right.

SPEAKER_01 4:49

Exactly. Diversification important. Yes.

SPEAKER_00 4:53

The companies that got a mention this time round, Abivax already in the running earlier in this year. Spire came up and Illumis. So I was listening into the replay of the Illumis call. So this is super interesting as well. So it had phase three data for its oral pill for psoriasis. It's a TIC-2. They've done everything they can to design the molecule to be superior to CIC2, the Bristol Myers drug that has commercially not done so well. I'm still listening, but this is TIC TIC 2 coming through, acting on the pathway that will impinge on IL-23, IL-17, IL-12. And the data look really good. So we're still only seeing data to 16 weeks. They've got extension out to 24 weeks, but certainly very compelling on efficacy. There didn't seem to be any side effects of concern. So it looks like it could get a really nice label. And it means that we potentially have three new aurals launching in a relatively short time period. So we have JJ's icotide, just launched very recently, and then we could have two new TIC2 inhibitors coming through. And actually also thinking about the unmet need, but also market shares and patient pool. So the doctor on the Illumis Corps was flagging that there are so many patients still treated with what he calls last millennium's drugs.

SPEAKER_01 6:32

Yeah.

SPEAKER_00 6:33

You know, the really old stuff, even methotrexate there. So that's a source of new patients coming in, particularly for the orals. And then he also talked about how these three aurals might be positioned and flagging that the role of TIC2 in psoriatic arthritis PSA actually would be kind of the obvious patient because I think you get quite a lot of overlap there with psoriasis and psoriatic arthritis. So lots to play for an opportunity for all the molecules, and great to see some high-efficacy aurals coming on the scene.

SPEAKER_01 7:10

Good. Okay, so we'll do a bit more digging on that space. But as you mentioned, results season is upon us. So we had JJ last week. This week we have Q1 results for Roche and Sanafi. And we also have for Roche the AAN conference ongoing now. They're hosting a call on Wednesday, right? Yep.

SPEAKER_00 7:35

The data's on Tuesday.

SPEAKER_01 7:36

Okay.

SPEAKER_00 7:37

And so we expect press release. And then this is one of those battles of the pills where we'll see whether we even have one. So can Roche get approved this year? I note that Fenabrutinib filing that I think that's still to be confirmed, but we assume that's in process of filing. Yet it's Jiradestrant, the LyDERA trial adjuvant, the big trial LIDERA, where they have also filed with their priority review voucher. So that's how they've chosen to deploy that on the oral CERD rather than the BTK. And we'll see whether Roche gets the BTK over the line, the first one to mark, but obviously you've got Novartis close behind, right? Exactly. And that data is due.

SPEAKER_01 8:23

Second half of the year.

SPEAKER_00 8:24

Okay. Yeah. So we'll see how that battle proceeds. Yeah.

SPEAKER_01 8:29

And so All right, so plenty to keep us busy. And with that, we should get back to the desk. Lots to catch up on. We would love to hear your feedback, requests, please do email us at Kerry.