Five Lists of Five: An End of 2023 Recap
To recap the end of a wild 2023 I’ve put together five lists of five items (and maybe a couple extra) that encapsulated 2023 for me. Hope you enjoy.
This the time of the year that Biotech enters its shutdown period and goes mostly quiet. I find it to be a great part of the calendar to reflect on the year and have that reflection inform what may happen in the coming period.
Below I’ve put together five different lists of five items (in no particular order) that I feel in totality provide a nice summary of 2023 in BioPharma. There is an extra list or two in there too and one that even looks forward into 2024.
Hope you enjoy this recap/mini look-ahead! BPS will be off until the new year (unless some crazy news drops). I wish all my subscribers a smooth transition into 2024 – Happy Holidays and Happy New Year to all.
☝🏾Interesting Deals in 2023
1💨AbbVie acquires Immunogen for $10.1B – I profiled Immunogen as a hot biotech buyout target in an earlier post and provided a high level analysis of AbbVie’s purchase towards the end of this other earlier post. Overall, I thought this was the right sort of deal for AbbVie – highly de-risked asset, meaningful revenue upside to be tapped into via commercial execution and gives AbbVie a meaningful stake in the game in solid tumors.
🥳TL1A Deals – 2023 saw three deals related to anti-TL1A antibodies, set to be the next big thing in inflammatory bowel disease. Roche acquired Televant ($7.1B), Merck acquired Prometheus ($10.8B), and Sanofi & Teva announced a collaboration for Teva’s TEV-574. This class is setting up to be another Big Pharma battle ground.
🎯BMS acquires Mirati for $4.8B – I wrote about this deal in more detail here. The short story is that this seems like a solid deal for BMS overall. Paired with withs prior acquisition of Turning Point Therapeutics, the pharma giant is building a strong presence in targeted oncology to pair with its significant footprint in I/O and cell therapy, all in front of a backdrop of a nearing nivolumab patent cliff.
💰Merck and Daiichi sign $5.5B upfront collaboration for ADCs – Merck, with its back nearing a pembrolizumab patent cliff, ponied up a HUGE upfront in a $22B collaboration with leading ADC maker, Daiichi, for three clinical stage ADCs. This put Merck squarely in the ADC game and solidified Daiichi as the partner of choice in this space, on the back of an already successful collaboration with AstraZeneca.
🧜♂️Pfizer acquires Seagen for $43B – This one happened in March, before Big Pharma Sharma got its start, so I didn’t have a separate space to discuss this. The condensed version of how I feel about this deal is that $43B feels like a lot for a company that will generate about $2.5-$3B in revenue for FY’23. I think there is a lot of pressure on PADCEV and TIVDAK to drive this NPV into the green. PADCEV (as I discuss later) clearly seems like a transformative therapy in bladder cancer and it’s too early to tell with TIVDAK. There could be pipeline programs that pop later that justify this price tag too, but for now it still feels like a huge price to pay for a lot of blockbusters to be named later. In any case, I always preach not judging the success or failure of a deal so soon, and I’ll withhold definitive judgement on that until we see how all of the Seagen assets play out.
Nonetheless, this is a huge dollar figure, and emblematic of Pfizer’s broader effort to reinvest COVID-19 related windfalls into new companies and assets. You could make the argument that had they just stood put in the past, especially with assets that they divested that have now been acquired (Televant and Cerevel most notably), perhaps Pfizer would be in an even better position now.
✌🏾Impactful Data Readouts, Catalysts, and Events
❤️🩹P3 STEP-HFpEF and P3 SELECT | semaglutide in HFpEF and CV outcomes data – in the year that was marked by GLP-1s, it’s hard not to start off with GLP-1 data for this list. Semaglutide showing benefit in patients with obesity and HFpEF gives a peak into the development path of this class of therapies beyond just diabetes and obesity, into other massive indications like HFpEF and HFrEF. That expansion is further buttressed by data from the SELECT study, which demonstrated cardiovascular outcomes benefit in obese/overweight (non-diabetic) patients, potentially paving the way for better reimbursement of these medicines, now that data showing extension of life is in hand.
🔥CD19 CAR-T Cells in Refractory Systemic Autoimmune Disease (ASH #220) – You can read a deeper dive about these data here. In short, the same drugs that are curing leukemia and lymphoma patients are (maybe) curing patients with autoimmune disease too? That’s pretty impressive, and has caused many CD19 CAR-T companies to pivot into this space and away from the very crowded field in heme/onc.
📉Pfizer and Moderna missing COVID vaccine sales numbers – As of this writing Moderna is down 52% YTD and Pfizer is down 46% YTD. If you’ve been a reader of BPS from the beginning you know that this wasn’t a surprise to us, but perhaps it was a surprise to the industry at-large. Both companies touted updated COVID booster sales projections for 2023 and missed the mark significantly. The companies oversold the appetite of the market for additional boosters, especially ones that were not updated to the dominant strain at the time of peak season. Now both are scrambling to pick up the pieces. Pfizer and (reportedly) Moderna have initiated layoffs and leadership reorganization and will look for brighter days and new opportunities in 2024.
⏪Sanofi reverses deal with Maze following FTC challenge – This one sent shockwaves throughout the biotech sector. The FTC has been heavily scrutinizing M&A from Big Pharma, but has been very focused on big deals, notably Amgen’s acquisition of Horizon and Pfizer’s acquisition of Seagen. The FTC’s challenge of Sanofi-Maze came as a huge surprise as this was a seemingly harmless licensing deal between a Big Pharma and small biotech. Rather than go through a protracted legal battle with the FTC, Sanofi opted to back out of the deal with Maze. Actions by both the FTC and Sanofi here call into the question the forward-looking viability of even small licensing deals now. Will Big Pharma companies bend the knee the next time something like this happens? Will the FTC scrutinize even more small licensing deals in the future? Analysis of this topic and how both small biotech and Big Pharma assess the regulatory risk of doing deals with one another are going to be a key topic of discussion going into 2024, no doubt.
🪟IPO Window Creeping Open – In the second half of the year we saw a flurry of large IPOs from mid-to-late stage companies with clinically de-risked assets. Notably Cargo Therapeutics ($281M), Abivax ($236M), RayzeBio ($250M), Neumora ($250M), and Apogee ($300M), and Acelyrin ($540M). Many investors and biotech executives have taken this as a positive sign headed into 2024, especially for companies who fit the “mid-to-late stage clinically de-risked” bucket. Hopefully we see more parts of the sector bounce back in 2024, as the predominance of positivity in 2023 was focused on a few key areas like, GLP-1s, autoimmune disease, and ADCs.
🤟🏾Major Drug Approvals and Filings
🧠 LEQEMBI (lecanamab), Alzheimer’s Disease | Eisai and Biogen – It’s still shocking to me that we have an effective (albeit mildly) treatment for Alzheimer’s disease. Hopefully this is just a first step towards more development in this space. The field is awaiting approval of Eli Lilly’s donanemab (Q1’24) too, which would be the second Alzheimer’s drug to hit the market. It took decades for the beta-amyloid targeting to result in an approved drug, and now we are on the verge of having two approved drugs in this class. More than ever, exploration and execution against other targets are needed to advance the field.
😇 CASGEVY (exa-cel), Sickle Cell Disease | Vertex and CRISPR Tx – CASGEVY capped off the year with approval of this potentially curative treatment for SCD. It was such a milestone that even Saturday Night Live did a sketch about it. Jokes aside, this is a transformative therapy for many people suffering from SCD. We will see if Vertex and CRISPR can meet the massive demand for this drug right away. My guess is, like pretty much every other cell therapy, the ramp will be slow with the companies needing more time to mitigate capacity constraints and early manufacturing failures before the process is “humming”.
♸ TALVEY (talquetamab), 5L+ Multiple Myeloma | J&J – GPRC5D is the next target in Multiple Myeloma. This is a space that regularly cranks out new targets to address relapse. GPRC5D was much needed after the approval of BCMA therapies. As BCMA CAR-Ts move into earlier lines of treatment, rescuing eventual relapse in these patients will fall to TALVEY until more options are made available.
👏🏾 PADCEV (enfortumab vedotin) + KEYTRUDA (pembrolizumab), locally advanced or metastatic urothelial cancer | Pfizer/Seagen and Merck – At this year’s ESMO, these data received a standing ovation after demonstrating a 55% reduction in the risk of disease progression or death. The data were quickly deemed practice-changing and pushed swiftly across the approval finish line.
🐌 Lifileucel (TIL therapy), 2L+ melanoma | Iovance – After so many ups, downs, and delays, it seems like Iovance will finally get the first cell therapy product for solid tumors over the finish line. The FDA extended the PDUFA data for lifileucel in September out to February because of internal resource constraints. That’s the best regulatory news Iovance has had in a while, after several delays due to faults of their own stemming from misalignment on potency assay requirements and other issues with the FDA. We’ll have our eyes peeled for this approval decision in 2024, which if it comes true, will be a big weight lifted off the shoulders of Iovance executives and shareholders. In the meantime, check out this handy review article from Nature on TIL therapies.
✌🏾✌🏾Things to Lookout for in 2024
↪️CD19 Bispecific antibodies pivot into autoimmune disease - we’ve talked about this a few times on the substack, but it’s worth mentioning again. Remarkable efficacy has been generated by autologous CD19 CAR-T therapies in patients with treatment refractory autoimmune conditions, like SLE, lupus nephritis, and systemic sclerosis. The mechanism behind this seems to be a complete reset of the patients B-cell compartment because of CAR-T driven B-cell depletion. We learned at ASH this year that long-persisting cells may not be necessary to achieve this, so perhaps shorter-lived and more easily administered allogeneic CAR-Ts and bispecific antibodies could do the trick. We’ve seen some allo’ CAR-T companies move into this space (notably CRISPR therapeutics), but I think the data here is just too obvious for CD19xCD3 (or CD19/20/22xCD3) companies not to move these products into autoimmune disease as well. Look for companies like AstraZeneca, Amgen, and others to begin clinical studies in this space.
🔮 2024 will be the year of psychiatry - Multiple data readouts for novel psych drugs are expected throughout 2024. We saw Karuna (KRTX) therapeutics file an NDA in Schizophrenia at the end of 2023. Psychiatry was once a Big Pharma playground, but lack of innovation, reduced investment, and many failed trials (PBO-effect is real y’all!) have stagnated much needed development of new drugs in this space.
🛍️ Pfizer acquires a GLP-1 - One constant year over year is Big Pharma FOMO. GLP-1s are set to become a massive class of therapies across cardiovascular-metabolic indications (and perhaps beyond). Pfizer’s own program, danuglipron, was recently discontinued due to inadequate efficacy (relative to competitors) and a high discontinuation rate. White its stock price tumbling and loads of gunpowder to deploy, I can’t imagine Pfizer sitting quietly on the sidelines while its closest competitors divide up the GLP-1 market.
📈 Vertex becomes a top 10 BioPharma by market cap – Vertex has been on a roll for a while, and they are on the verge of successfully diversifying their business – going from being a Cystic Fibrosis company to one that is also in Pain and Sickle Cell Disease (SCD). CASGEVY was just approved for SCD and projects to a be a blockbuster, potentially curative product. All eyes will be on the company’s P3 studies in acute pain, set to read out early 2024. I am anticipating these data to be positive, and the FDA to red carpet approval of VX-548 given both the physical and political realities of the opioid crisis in the US. Vertex could end 2024, well positioned to be the market leader in three different categories. With a long-term future looking ever brighter, don’t be surprised if we see Vertex’s market cap double into the $200B range in 2024.
➗Bayer breaks up and becomes a fully focused therapeutics company - Bayer has kind of fallen by the wayside in Big Pharma land. With the relatively recent hire of a Big Pharma CEO, former Roche Pharma CEO Bill Anderson, I see the company doubling down on innovative medicines, and to do so, unlocking capital via spinouts of their non-drug business units. In 2024, I think we will see Bayer become a standalone BioPharma company, with either a divestiture or spinout of its Crop Sciences and Consumer Health businesses.
👋🏾Favorite posts I’ve written this year (check them out if you haven’t!)
Amazon Should Buy a Generic Drug Manufacturer – Amazon has tried (and failed) many things in healthcare, but here I try and outline why Amazon entering generics manufacturing could be massively disruptive and maybe even a positive for the system overall.
Priority Review Voucher (PRV) Database: Trends, Analysis, Insights, and Future Strategies
The Limited Speed of Fast CARs – this was a closer look into the fast vein-to-vein turnaround time claims that some novel manufacturing CAR-T approaches are claiming, and how these may have an inherent lower limit of how short they can actually be.
BioPharma Buyout Targets (BBT): ImmunoGen (IMGN) Presents an Interesting Path to ADC Leadership