BCTW - Ep. 18 - 10AUG2020
[00:00:00] Jeff Cranmer: BIO’s newly announced BIOEquality Agenda looks to chart a path for biopharmaceutical companies to both change themselves and to help improve the life sciences ecosystem. The aspirations of the initiative range from diversifying the biotech workforce to ensuring the clinical trials reflect the societies that they serve.
[00:00:21] Michelle McMurry Heath: "The question of can we keep both the faucet open to innovation -- the faucet open to new inventions -- that really produce new solutions and ideas and at the same time, ensure access to those inventions. That is -- to me -- the most pressing social justice issue we face. Because without science -- without those technological breakthroughs -- those communities, those vulnerable communities that today suffer from the biggest health concerns, the biggest environmental challenges and the poorest nutrition will continue to suffer."
[00:00:57]Jeff Cranmer: That was BIO’s CEO, Michelle McMurry-Heath. We'll be talking about the trade groups' new initiative that calls on biopharma companies to put their pledges on social justice into practice. We'll also discuss the results from our latest survey, which finds drug developers cautiously optimistic on the state of M&A for the second half of the year as well as the unprecedented level of data sharing among biopharmaceutical companies.
[00:01:26] Welcome to BioCentury This Week. I'm Jeff Cranmer, Executive Editor of BioCentury and I'm joined by my colleagues
[00:01:33] Simone Fishburn: Simone Fishburn, Editor in Chief,
[00:01:35]Amanda Micklus: Amanda Micklus, Senior Biopharma Analyst.
[00:01:39] Jeff Cranmer: Simone, what is BIO actually going to do with this initiative?
[00:01:43] Simone Fishburn: Thanks, Jeff. So BIO has -- and credit to them for doing this -- they've acknowledged that everybody jumped up. There were lots and lots of highly commendable statements by biopharma companies In response to the death of George Floyd but what that they're really looking for is more than lip service. And you know, at BioCentury we have talked about this, we've covered this, and you're going to see us continue to cover this because it is really important.
[00:02:14] And Bio, I think I would say they're looking at it from two perspectives. One is enrollment in clinical trials and what are companies doing and what can they do? And the other is regarding the workforce and making sure that there are actual paths for not just educational and training programs -- which actually already exist -- but paths to go from those training programs actually into biotechs and leadership positions.
[00:02:46] And one of the things they bring up is that Biogen has trained more than 250 minority scientists in the Boston area in the last decade, but there's no easy way for companies to find and recruit these scientists if they actually even want to balance their workforce.
[00:03:02] But I want to just go back to the clinical trials part for a moment because this is actually something that came up in an interview that I had with Kate Bingham, who is chair of the UK Vaccine Taskforce. And it's really important that clinical trials reflect the population that they're going to serve -- both in the U.K. and in the U.S. and probably in several other countries. There's also a need to get beyond some of the worst chapters in both countries' histories that have led to a lot of skepticism and distrust in black communities and in the U.K. In what they call BAME -- black, Asian, and ethnic minority communities -- where those populations aren't really trustful of public health.
[00:03:50] And so there needs to be an active outreach. In the U.K., they're actually doing this using celebrities in those communities and in the U.S., it looks like BIO really wants to take active steps to earn the trust of those communities and bring them into clinical trials. Having said that -- it is really on pharma companies. This isn't really just -- that's not actually the biggest problem in recruiting people. The fact is that there actually hasn't been an active effort to do that. And so we'll be watching to see how well BIO’s efforts succeed -- presumably they'll be tracking this and so on. But, there's a new leadership at the head of BIO and it's continuing lots of initiatives that began before she joined. But Michelle McMurry-Heath has really picked up the mantle and she's running with it.
[00:04:43] Jeff Cranmer: Yeah, she hasn't been on the job for very long but I already sense that there's a big change in tone at Bio. So, they've not let any dust gather -- they've just jumped out with these initiatives.
[00:04:54] Simone Fishburn: The question's going to be Jeff -- I mean, at the moment she's able to focus on this and this is also really important for COVID-19. But soon will be election season and after that wIll be post-election season and we can expect to see a lot more conversation around drug pricing and healthcare. And so, I think it's going to be important to see how much does BIO retain this front of mind when they're going to have to be battling things on that front as well.
[00:05:22] Jeff Cranmer: Among the barriers broken by biopharmas during the pandemic is the concept of data sharing. Now, that's an idea that's quite far from standard practice in the industry. But, we've been hearing some of the CEOs and R&D heads on our podcast talking about essentially going over to Takeda and borrowing a cup of sugar. Companies sharing compounds in ways in which they've never had before, sharing advice. And this is really gaining a fresh life due to the gravity and urgency of the pandemic.
[00:05:55] Now Simone, last week you spoke with Takeda's Anne Heatherington. She is leading the data sharing subgroup within the COVID R&D Alliance. What were some of the takeaways from your conversation with Anne?
[00:06:07] Simone Fishburn: Well Jeff, one of the things I'm learning is that I can answer one question and take it in the direction I want with another.
[00:06:14] So there's actually two things I want to talk about regarding sharing that we covered last week. One is a conversation I had with Anne and I encourage people to listen to that podcast because Anne really says it a whole lot better than I can. But there's a very important initiative coming out through the COVID R&D Alliance, where they want to share not only summary level data but patient level data. And that really allows for a much more informed way of using the data, which they want to be able to do to accelerate drug development specifically for COVID-19. Some of their analysis is already being used to help them design endpoints and so on.
[00:06:56] But you know, one other aspect that Lauren Martz covered in a story is actually around a different form of sharing, which is preclinical harmonization. And what we've seen with the vaccine companies is that they've all come up with different assays -- different assays for measuring neutralizing antibodies. And what that means is that you can't compare from one vaccine to another until you actually get efficacy data regarding prevention. And that's a long way off because that has to go through 30,000 patient trials. So what there really is a call for here is to be able to use the same protocol.
[00:07:36] And at the moment, what they have to do is do that retroactively. So each company started with its own protocol and they're going to see that through to the end. But Operation Warp Speed has now said as a condition of funding, those companies have to contribute clinical samples and there all going to be run through the same assay at NIH's NIAID. And so, there is going to be a way to normalize.
[00:08:03] And one more point that's kind of interesting is this concept of immunobridging. So the first company whose molecule is approved, you would then have both the neutralizing antibody data for it and you would have how that relates to protection. And what that means is the other companies who are further behind -- if they could use the same assay -- they'd be able to figure out how do they stack up against the front-runner company and what does that mean for their level of protection that they're gonna provide?
[00:08:38] So there's some sort of bridging going on there and there's a little bit of game theory. But the sense that I'm getting from Anne and from -- it's actually -- Mathai Mammen at J&J who's a leading voice in that conversation, is this idea that companies really need to get together and share this information if they're going to accelerate this drug development.
[00:09:00]Amanda Micklus: Simone, you mentioned that it's more common for companies to share summary level data. Are there any kinds of issues or limitations or privacy issues when you're sharing data at the patient level? I was wondering if that came up in any conversations?
[00:09:20]Simone Fishburn: Right -- so a lot. Very good question. First of all when I say more common, summary level data is always eventually shared, right? I think the idea is to share it a lot faster. So just to be clear on that front. There's a lot of issues. The data would be anonymized -- in a way that they hoped to get it not de-anonymized -- and they are looking at platforms to do that and enable that kind of sharing. And there's certainly a lot of sign-offs that companies need to do to be able to access this data. But it's -- yeah, it's a thorny issue and at the moment the real way of going about it is by looking at real world data -- that's the main tool they have at the moment.
[00:10:00]But clinical data -- a lot of people feel that clinical data really adds a completely different component to real world data that is also extremely valuable and sooner. So yes, patient privacy is a big deal.
[00:10:13]Jeff Cranmer: So Amanda you've just spent quite a bit of time on our most recent survey, in which we teamed up with investment bank PJT partners, querying about 40 biotechs during the last week of July. Drug developers -- we found in the survey -- are seeing opportunities for dealmaking that have been created by COVID-19 as well as some challenges. Now historically, cancer has been a top priority for most deal-makers but the survey suggests a change might be on the horizon. What did you find out Amanda?
[00:10:45] Amanda Micklus: One of the most interesting findings from the survey was that COVID-19 outbreak is causing priorities and dealmaking to shift to infectious diseases. We asked the respondents which therapeutic areas offer the best risk-reward opportunities today and 73% of them said infectious diseases. And that was put ahead of oncology, which 65% of respondents selected -- and as you mentioned, oncology has been the most active area of dealmaking. Among the top five disease areas selected by respondents, inflammation and pulmonary were also in that top five and those encompass symptoms related to COVID-19.
[00:11:35] So it's a renewed interest in infectious diseases, which has been an area that hasn't gotten a lot of attention and that many pharmas have deprioritized over the last several years because of the lower commercial potential and [the] shifting [of] resources to areas like cancer or rare diseases that have more growth potential.
[00:11:59] So I think the survey reflects an urgency to develop therapies and vaccines in infectious disease that we could even see extend beyond the outbreak.
[00:12:09] Simone Fishburn: So that's the question, Amanda. I mean I have to say, I was surprised to see that people thought infectious disease was even more of a sweet spot than cancer. But do you think if we do this in a year, we'd get the same result?
[00:12:22]Amanda Micklus: I think we might, it depends on how much progress has been made in therapy and therapy development and vaccine development and if we see any approvals. I think it could actually extend to a year.
[00:12:36]Simone Fishburn: Alright, I'm a little more skeptical than you so that's going to be one to watch.
[00:12:41] Jeff Cranmer: How about predictions for dealmaking in the second half?
[00:12:44] Amanda Micklus: So just to put things into perspective, according to BioCentury's BCIQ database there was a 35% decrease in M&As from the first half of 2019 to the first half of 2020. And according to the survey respondents, they are expecting M&A to rebound in the second half of 2020. So 60% of the companies predict that M&As will increase compared with the first half of the year. About a third believe that the volume will stay the same as the first half and there was a small proportion -- 5% -- who said that M&A will slow down.
[00:13:26] Another thing that we asked was what size deal values are you expecting and are companies anticipating the deal values to range in the $1 to $5 billion size -- 58% of companies said that and then another 30% said that they expect deals in the less than $1 billion range as opposed to deals that are in the $5 billion to $10 billion or over $10 billion range.
[00:13:58]Jeff Cranmer: What are the thoughts on megadeals? We had recently AbbVie, Allergan, Bristol Myers and Celgene -- are these megadeals expected to continue?
[00:14:07] Amanda Micklus: Yes, quite an overwhelming majority -- 73% of the survey respondents -- said that they do expect those mega deals -- that large cap consolidation -- to continue. And we had a number of write-in responses to that question, which were really interesting. For those who think that those big deals will continue, they believe that those types of transactions bring more revenue, they work as a defense mechanism against patent expirations.
[00:14:38] But, one of the historically big complaints about these big deals are that they slow down R&D productivity. We asked about that and even though we had 73% of companies say that they do expect large cap consolidation to continue, 63% of the respondents said that these types of deals decrease R&D productivity.
[00:15:02] Jeff Cranmer: Were any names named in the responses? Simone? Are you hearing any chatter?
[00:15:07] Simone Fishburn: No, but I think one thing to put in perspective is this was like 40 biotechs -- so these weren't investors who responded, it was 40 biotechs. They were split down the middle as to public / private, they were split three ways equally as to whether their lead product was on the market, clinical or preclinical. So you know, this is how biotechs are looking at it.
[00:15:30] The question of big cap consolidation is probably one that's always -- at least for a long while -- going to be around. I think one of the other things that we look at at BioCentury -- and will continue to do so -- is the growth of the new class -- right -- as the we call them big biotechs. So Gilead and Amgen and Biogen -- those are big biotechs -- Regeneron maybe now. And then watching this next class of things come through as they get products on the market, as they actually have multiple things in their pipeline -- the question really is are we going to grow a new class of big caps and some of the ones that you talked about -- actually, I think the ones you talked about -- were really acquisitions of really big biopharmas like Allegan and Celgene and things. So you know, I think it's probably the case that that will continue but Amanda help me out here, are we seeing like one a year -- is that what we've seen?
[00:16:24]Amanda Micklus: Yes, I think we looked at the past three or four years and I think there were maybe four total in the past three or four years. So it's about one year that we have seen.
[00:16:35] Jeff Cranmer: Well if you're curious to dig into the details of Amanda's story, you can turn to Biocentury.com. There you'll also find all our coronavirus coverage, which is in front of the paywall -- that's biocentury.com/coronavirus -- and all of our podcasts are available at our website, including Simone's conversation with Anne Hetherington from Takeda. You can also find these on Spotify, Stitcher, Apple and Google.