BCTW - Ep. 17 - 03AUG2020
[00:00:00]Jeff Cranmer: Big bucks continue to pour in for COVID-19 countermeasures, decentralized clinical trials have become must do in drug development and SPACs, or special-purpose acquisition companies, are back in vogue for biotech IPOs. I'm Jeff Cranmer, Executive Editor of BioCentury and I'm joined by my colleagues,
[00:00:22]Steve Usdin: Steve Usdin, Washington Editor
[00:00:24] Simone Fishburn: [and] Simone Fishburn, Editor in Chief.
[00:00:26]Jeff Cranmer: On Friday, the U.S. government has made its largest financial commitment yet to its development and manufacturing of COVID-19 vaccines. It pledged up to $2.1 billion -- as part of Operation Warp Speed -- to a preclinical vaccine from Sanofi and GlaxoSmithKline. This vaccine may be months behind other COVID-19 vaccines in development.
[00:00:52]Steve, why did they pick this one if it's far behind?
[00:00:57] Steve Usdin: It's not that far behind. I mean really, the way to look at this as not that it's a race and that one's going to get over the finish line and then everybody else is meaningless or you know, toast. There's just no way that any one vaccine manufacturer is going to be able to supply the entire world.
[00:01:14] So the first x number of vaccines to get across the finish line are all gonna have big markets. The other point of course, is that the U.S. government -- like governments all over the rest of the world -- are spreading their bets. They're spreading their bets on different manufacturing technologies, different vaccine development technologies and different clinical trial strategies.
[00:01:35] Simone Fishburn: I think one of the other things to remember is not only don't we know how well these vaccines work -- right, they're not all gonna work a hundred percent. And if you take one vaccine, what's the measure for whether it'd work for you or not and then can you take another vaccine -- a different one -- afterwards?
[00:01:50] So, you know, absolutely I agree with Steve. The race is against time, not each other. In this case that really is true. There's going to be space for more than one vaccine.
[00:01:59]Jeff Cranmer: Simone, how important is it that the government is investing in vaccines from different modalities? I think they're up to about four or five different modalities at this point.
[00:02:10] Simone Fishburn: Right and that's really important actually. One of the things I think we really need to remember is the fact that we've even got this many vaccines is because of the investment that has gone into different modalities by the biopharma industry over the last let's call it decade, but it's really longer.
[00:02:29] And so a couple of them are very untested, but the reason it's so important is that if those aren't tested once those new ones work, they could really preface a whole new way of doing vaccines that is incredibly efficient. So you've got the mRNA-based ones, nucleic acid based ones. Plus as Steve said and I'm sure he can add to this, more shots on goal is better.
[00:02:51] Steve Usdin: The other thing -- you say that there's been a lot of investment by the biopharma industry over the last decade, that's true. It's also important to acknowledge that the early investments in a lot of these technologies came from governments, particularly from the U.S. government and particularly from DARPA, the Defense Advanced Research Projects Agency. That's really important to keep in mind.
[00:03:10] I think another thing to think about the Sanofi-GSK vaccine is that it's an adjuvanted vaccine -- the GSK part of it is an adjuvant that they're supplying. And, that might be important for certain populations. The main population that's really at-risk from COVID-19, of course are the elderly. They're also the population who tend to benefit less from protective vaccines and who -- at least in theory -- could benefit from an adjuvant like the GSK adjuvant that's being added to the Sanofi vaccine.
[00:03:42] Simone Fishburn: Yeah, I want to say people who are listening can't see me nodding away to -- Steve's point is a really good one. DARPA is actually behind a fair number of the advanced technologies going on today -- the innovations. Private investment has made a big difference. Steve did a story earlier on in the pandemic about all the investments of DARPA that have actually also ended up -- Steve, if I'm not wrong -- with front runners or effective vaccines for Ebola and some of the other public health crises.
[00:04:11]Steve Usdin: Yeah, so DARPA funding was really important not only for the vaccines, but especially for the development of monoclonal antibodies for Ebola and for some other outbreaks. And for funding the initial research that led to RNA vaccines, DNA vaccines, and some of the advanced manufacturing technologies.
[00:04:29]Jeff Cranmer: So Steve, you mentioned accessibility. The other vaccine to look at here is the one from Merck, which is using oral delivery. They believe that it being oral will really help lower the barrier to vaccination, especially in elderly populations.
[00:04:46] Now we've been talking about the timing a little bit. Pfizer has continued to say that it's on track to seek approval, or at least an EUA for its vaccine in October if everything goes well. But I'm hearing Fauci say early next year is more likely.
[00:05:04] Simone Fishburn: October! Anything specific about October, Steve?
[00:05:08] Steve Usdin: It's an aspiration. I actually think it's irresponsible for them to talk about having any EUA in October. I can understand why they might think that that would generate enthusiasm, particularly from government procurement agencies. But look, that just doesn't seem realistic. And the people who I speak with who are really close to -- including some who were very close Pfizer -- say that they don't understand where that data is coming from and end of the year / beginning of next year is still phenomenally fast. That's about as early I think as it's realistic to talk about.
[00:05:42] The other thing I think that's not been talked about enough in this equation is the importance of developing trust -- trust in the regulatory process, trust in the science and medicine that's being used to develop COVID-19 vaccine candidates and developing trust in people so that they will actually take these vaccines once they're ready. And again, talking about having Emergency Use Authorization for vaccines in October -- it doesn't seem to me to be a very good way to engender trust.
[00:06:12] Simone Fishburn: And it's so important. I think that there's really been enough -- I'm going to use the word misinformation, but I really mean disinformation about certain therapies and so on. And, to rush a vaccine out, to have it not work, to have it maybe cause adverse events, it really, really could be catastrophic. We can see how hard it is for people to put a mask on, imagine if they lose faith in vaccines and spread that kind of word. And so, there is really a responsibility on the industry not to play politics and to do this right.
[00:06:47] Steve Usdin: And on the regulators.
[00:06:49] Simone Fishburn: And on the regulators.
[00:06:49] Steve Usdin: Because ultimately, Pfizer can want to do it anytime that they want, but ultimately decision is going to be made by FDA and they're going to have to be able to explain and defend that decision and persuade the American public that their decision was based on the best interests of public health and not on any political considerations.
[00:07:08]Jeff Cranmer: Well speaking of politics, about 10 days ago President Trump gave biopharma CEOs a choice: accept an international reference pricing scheme for biologics, or come up with an alternative that achieves the same goals. He then invited biotech and pharma CEOs to the White House to discuss this and they didn't show up.
[00:07:32] Steve, what's the backstory here?
[00:07:34]Steve Usdin: So it's interesting. Last week -- last Monday -- I predicted that there was a good chance that the CEOs wouldn't show up for the meeting that was scheduled on Tuesday and in fact, they didn't. What some of them told me is that first, they didn't believe that the Trump administration was negotiating in good faith and second, they were being asked to come and discuss an executive order that none of them had seen -- and as far as I know, still haven't seen. Some bits and pieces of it have leaked out because Trump held it up at the White House and a photographer took pictures of it but the pictures unfortunately didn't have the real meat of what's in the executive order.
[00:08:09]What's happening now are furious negotiations among the biopharma industry thinking about what kind of alternatives they should propose. I'm told that the White House is also working intensively on new drug pricing announcements that may come anytime unpredictably.
[00:08:25] Simone Fishburn: Steve?
[00:08:26] Steve Usdin: Yeah?
[00:08:27] Simone Fishburn: See, a question on that. I think President Trump in the middle of July announced that he would have a whole new healthcare plan within two weeks. Am I correct about that?
[00:08:37] Jeff Cranmer: Two weeks yesterday.
[00:08:38] Simone Fishburn: Right, and so my question Steve is how seriously are drug companies taking this? Are they just waiting to see if and when the White House does come up with anything or is there any sort of preemptive planning on their parts?
[00:08:52] Steve Usdin: No, no, everybody's taking this seriously. Look, the IPI -- or what Trump is calling most-favored nation because he's altered the policy to make it so that the United States doesn't pay more than any of the other countries that are in the reference pricing system -- it's a real threat. It's something that companies are taking very seriously and they're also taking very seriously the possibility that the administration could take other steps -- either by itself or [by] encouraging its allies in Congress to do so.
[00:09:20]Jeff Cranmer: So one of the big changes in drug development wrought by the pandemic has been the rise of decentralizing clinical trials. Our senior editor Lauren Martz, who is a frequent guest on our podcast, tells us that these trials are must-do rather than nice to have during the pandemic with hospital shutdowns and restricted access disrupting company programs and putting enrolled patients at risk. What are the logistical challenges that need to be solved Simone before these types of trials become mainstream?
[00:09:53] Simone Fishburn: So, I think the first thing to think about is that these trials, which are decentralizing clinical trials, isn't a new thing in COVID -- it has existed beforehand. But you know, there was no real activation energy to do that. And so these trials, in fact, solve a logistical problem that COVID created in that -- as you pointed out -- hospitals were just not available. They basically shut down operations -- clinical trials that had begun we're in danger of being suspended. New ones couldn't start. And all of this is because patients couldn't get to hospitals. So with clinical trials almost all the time, patients need to get to hospitals to receive their drug, to receive their treatment, to get monitored.
[00:10:40] And much as everybody has now found themselves digitally fluent with Zoom and the rest, they have also found a way to do virtual clinical trial recruitment and various other parts of the clinical trial process. So when they are decentralized, what that means is they don't require patients to go into hospitals in order to get their treatment. They can ship it to them, they can get monitored remotely, they can go and see a physician in an office somewhere, but they're not all centered around a specific site. So on the one hand, they solve a logistical problem. On the other hand, they do require a lot of coordination operationally, in a regulatory way, technical issues -- you know, gathering data, making sure that it is all compliant [and follows] privacy [standards].
[00:11:31] And these are really often going via you know, like iPads or other remote monitoring kind of technologies. So they're not simple and that's one of the reasons why companies weren't doing it beforehand because they just always go, you know, the easier route. But now -- again, going back to the Zoom analogy -- having greased the wheels for this and companies finding out how useful they can be, you know I think they're probably going to keep going.
[00:12:01]Steve Usdin: And the other thing that's going to happen is that regulators are going to have to -- and I think that they are ramping up to look at decentralized trials to try to figure out how to assess for example, how much variation there is in data in trials, how to compare the results from decentralized trials to traditional trials and figure out if you can bridge between the two.
[00:12:23]Simone Fishburn: I think one of the most important longterm consequences of this is that it means that many more diverse kinds of patients -- patients in remote places -- can participate. So this is a way that companies can actually get a much more representative section of society involved in their trial -- not just people who are able to get to whatever big medical center and whatever big city. But this really does take it out to all over the country or other countries as well. And it also actually opens the door to reducing disparities across socioeconomic or racial groups, because you're just increasing the access of people to these trials -- it's not only the people who have the connections to get into the hospitals.
[00:13:08] Jeff Cranmer: Sounds like a good change and it'll be interesting to see whether that sticks once we someday get on the other side of this pandemic. Turning to IPOs, we've now seen well over 60 companies go public this year. One thing that is new this year -- or back in vogue I should say -- are special-purpose acquisition companies, SPACs.
[00:13:34] These are blank check shell companies that are set up to merge with private companies after themselves going public. We spoke with JMP Securities' David Schechner last week, and he tells us that at least 10 have gone public or are in the IPO queue looking to unite with healthcare companies.
[00:13:55]Schechner tells us that these investors are looking for unicorns and well, last week we got one: Cerevel. This is the Pfizer neurology spin-out led by biotech's best-dressed CEO, Tony Coles. So. I think we're going to start seeing more of these, especially now that we have some bluechip firms like RA, Deerfield, Perceptive, rolling out these vehicles.
[00:14:23]Simone, what are you noticing about these SPACs?
[00:14:26] Simone Fishburn: First of all Jeff, what I'm noticing is that I am going to get a lot of inbound mail tomorrow from other CEOs claiming that they're wardrobe can easily match Tony Coles'. So thank you for that.
[00:14:38] You know I've been talking to investors, not actually just in the U.S. but also in the U.K. and other places and -- as you pointed out -- these are not new vehicles, but this is a resurgence. And what I'm hearing is that we should expect a lot more different financing structures.
[00:14:55] There is a lot of money around, but there's also companies going through sort of various constraints -- economic constraints -- because of the downturn and so on. And so, we should expect to see more reverse mergers, we should expect to see more SPACs and we should expect to see just more innovative financing structures. There's a lot of innovation and people really want to find different ways to get their programs forward.
[00:15:21] Jeff Cranmer: Yeah and some of the benefits here -- our writer Paul Bonanos spoke with Tony. Tony said that you inherit market risks naturally if you're doing the traditional crossover round to IPO. But there's a lot of uncertainty with the pandemic and other global events and so he said they felt that they could get it done in one step what many companies do in two steps. So that's a huge advantage. We're also seeing, you know, relatively big name private biotechs reach the public markets via reverse mergers, which typically you didn't see in the past.
[00:15:56] Well, I think that's about all that we have time for. You can find all of our coverage at biocentury.com. Our Coronavirus coverage is in front of the paywall and it's also available at biocentury.com/coronavirus. And all of our podcasts are available on our website, Spotify, Stitcher, Apple and Google.