August 11, 2025 • 39 mins
Phase III data from Lilly’s orforglipron in obesity fell short of investor expectations, but they appear to be enough to obtain approval and wide use. On the latest BioCentury This Week podcast, BioCentury’s analysts discuss why the first-in-class oral small molecule GLP-1R agonist’s clean safety profile and clear manufacturing advantage over oral peptides give the product a leg-up in the market.
They then discuss Vinay Prasad’s return to FDA after a brief hiatus, the revamped strategy of 32-year-old San Diego biotech Acadia Pharmaceuticals, and an attempt in the Senate to revive the Biosecure Act targeting China biotechs.
Finally, the analysts preview this year’s Back to School package, which reimagines FDA. At a time of unprecedented change in government agencies, BioCentury’s 33rd Back to School asks what FDA could look like if it were reorganized from the ground up to create the regulator patients deserve and industry needs.
View full story: https://www.biocentury.com/article/656727
#orforglipron #CBER #VinayPrasad #AcadiaPharmaceuticals
00:00 - Introduction
00:49 - Prasad
07:09 - Back to School
12:29 - Lilly Obesity
21:58 - Acadia's Comeback
28:50 - Biosecure Act
To submit a question to BioCentury’s editors, email the BioCentury This Week team at podcasts@biocentury.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
[ AI-generated transcript ]
Jeff Cranmer (00:02):
Eli Lilly released new obesity data last week.
It did not impress investors,but was it all that bad?
On the latest BioCentury?
This week podcast will discusswhy Lilly's oral GLP-1 should
have a leg up in the market.
(00:22):
Plus we will talk aboutrevamping a 30-year-old biotech
Acadia, the return of theBiosecure Act, and we'll touch
on Vene Prasad's return to FDA.
Joining me to discussall of this are.
Simone Fishburn (00:41):
Simon Fishburn, editor-in-chief.
Stephen Hansen (00:43):
Steven Hanson, director of.
Biopharm intelligence.
Selina Koch (00:46):
And Selina Koch, executive editor.
Jeff Cranmer (00:49):
All right.
The whirlwind, year at FDAcontinues, our colleague, Steve,
would normally be all over this,but he has, uh, skipped town to
enjoy his usual August vacation.
And so Simone, why don't youfill us in on what is happening
in your neck of the woods?
Simone Fishburn (01:07):
Yeah, never a dull moment here in
DC in this particular era.
so as you pointed out, VenePrasad is back, head of CBER.
That's the Center for Biologicsand Evaluation Research.
I got that right.
Some words in that order,like that CBER and um.
Jeff Cranmer (01:28):
Put a D in there then.
Then
Simone Fishburn (01:30):
so therein lies the story, right?
Because he is basically, as I'msure all our listeners know, we
won't get into that much detail.
He is and was, the head of theunit that regulates biologics,
like cell and gene therapies inaddition, of course to vaccines.
A highly charged topic in thisparticular administration.
(01:53):
I don't think we'llknow and ever know.
He really went, went on behindthe scenes, but he tended his
resignation, what is it, Jeff?
Two weeks ago?
Jeff Cra (02:01):
something around then.
Simone Fishburn (02:02):
two weeks ago.
And then,
Stephen Hansen (02:04):
He tendered.
He tendered it longenough ago to go to
Italy and then come back.
Simone Fishburn (02:08):
So, you know, now he's back and there's
really a lot of conversations.
'cause he actually went to spendmore time with his family as
somebody who's about to spend alot of time with their family.
I'm kind of wondering, witha lot of family, I'm kinda
wondering whether he waslike, you know what, running
CBER is easier than this.
Jeff Cranmer (02:25):
Yeah.
Yeah.
My mom's like will comevisit me, she begs me
to live closer than she.
Visits and she's like, youknow, It's like fish three
days and it starts to stink.
You know?
It's like, mom,but mom, I'm your
Simone Fishburn (02:36):
Well, I gotta tell you, I'm trying to put
together just to get somepeople together of my family
coming from all over the world.
Find a time where we canall celebrate a very, you
know, happy engagement and,really running CBER easier.
I, I gotta say that runningeven in this time, but I do know
that there are other theories.
Steven, do you wanna giveone of the other theories?
Stephen Hansen (02:57):
Yeah.
Well, so as I sort of alludedto, I think one of the theories
was that he just hadn't earnedenough of his PTO time, and
so this was sort of a way to.
Uh, be able to get off on anice little vacation and then,
uh, and then come right back.
So, uh, yeah, I mean it's,it's actually something
I might, might consider.
Maybe, I don't know.
Simone Fishburn (03:12):
Well try it.
Just try it, Stephen.
Go ahead.
Just try it.
I, I may not be as lovingas the people, you know.
They were desperate,Makary was very keen for
him to come back.
Stephen Hansen (03:22):
You're not going to be my Marty, not to
be my Marty Makary, Simone,uh, beg me to come back and.
Simone Fishbur (03:27):
go ahead Selina.
You wanna bring us back
Selina Koch (03:30):
Gonna,
Simone Fishbu (03:30):
Earth, don't you?
the big, uh, the bigdownside here, right?
Which is that constant upheaval,one thing after another.
It could probably be the worstpart of this for the industry.
Yeah, I think that's it.
You know, and Steve iscertainly gonna get into
this when he comes back,but let's just go through
a few of the things thathave happened, which is.
(03:50):
Prasad beforehand had beenvery, very critical of Peter
Marks his predecessor foroverruling, decisions made
by the staff under him,right, in terms of approvals.
Prasad then came in and didexactly the same thing himself.
In addition to that, whatactually happened is the
Replimune cases one, butthere were a couple of others.
(04:12):
We talked about itpreviously on the pod.
There were CBER decisionsor CRLs that basically
reversed what the formerFDA guidance had been.
And now after he went, all thebiopharmas were like, well, what
does this mean going forward?
Now he's back, they'restill like, what does
this mean going forward?
(04:32):
so to your point of uncertainty,Selina, you know, I think
there's a certain level ofuncertainty, but there might
be people going, hang on,we were just getting used to
Prasad beginning to understandand not everybody disagreed
with everything he did.
Just to be very clear.
there's that sort of, we don'tknow what the uncertainty,
we are uncertain aboutthe uncertainty level is
what I'm trying to say.
Selina Koch (04:52):
Yeah.
Like how long is he backis Makary, you know?
I dunno.
Jeff Cranmer (04:57):
I, I, I think as we were talking about
earlier, Simone, like, you weresaying on our, morning editorial
call that you know, you,you're out talking to CEOs and.
The one thing they wanna knowis when will this biotech winter
end and, and now you've gottalump in this turmoil at FDA.
The constant changingas part of that.
'cause biotechsjust need to plan.
(05:17):
They need to know what theregulatory pathways are.
Simone Fishburn (05:21):
I mean, I think a couple of things,
um, are becoming clear.
So the administration'spullback on mRNA funding,
is part of this big picture.
It is just impossible seeingPrasad, for me to see Prasad
take a stance that is verypro-vaccine that is gonna push
back and say, no mRNA vaccinesactually have saved many lives.
(05:44):
That's not what hesaid in the past.
So I think that, havinghim there, or even anyone
under this administrationin that particular.
Part of drug development.
I think we all know that thatis, a, I would say a big cloud.
I think many people feelit's, it's really a bad
situation for FDA to be inand public health to be in.
But there's another thing thatis kind of becoming clear,
(06:06):
which is that he, even thoughPeter Marks had a pretty high
profile, it wasn't a higherprofile than the head of CDA,
and right now Prasad is getting.
More ink, should we say moreheadlines, more attention
than the head of CDER.
And it sort of suggests thathe might have more power there.
Now he's back.
(06:27):
He's actually gottremendous power, arguably.
And so, it'll be veryinteresting as we pointed
out and discussed on ourcall before, Jeff, because
what he's in charge of, whichis sort of cell and gene
therapies, is really not themajority of drug development.
And yet that's where alot of the attention is.
Selina Koch (06:44):
Is he back as Chief Scientific and
Medical Officer over FDA.
And does he also like thethe commissioner's prior
new priority voucher?
Is he still in chargeof that as well?
Simone Fishburn (06:54):
we don't know that yet.
at least the last thing Isaw, at least before coming
on this pod, I, I hadn't seenanything confirming that.
But we do know that the FDACommissioner, Marty Makary
is a big fan of Prasad's.
Jeff Cranmer (07:07):
That is true.
That is true.
Alright, well, Steve, uh, asSimone said, he'll be back,
he'll dig into this and, uh,
Simone Fishburn (07:14):
To say it with fancier words and just a lot
more insight, let's be honest,PTO.
You
Jeff Cranmer (07:20):
bet.
Well, this all fits nicely intoour annual Back to School issue,
the theme of Back to School and.
As we believe in equity hereat BioCentury, many of our
longtime readers know, we alwayspublish Back to School right
around Labor Day when kidson the east coast of America
(07:42):
are going Back to School.
But hey, Selina and I arealready starting to make,
those, delicious sandwichesfor our kids' lunch this
week as they're headingBack to School this week.
So what better to do than to.
Publish Back to School thisweek and then return once our
friends in Europe are back fromvacation and double dip and
(08:03):
release, the package once againcomplete with a podcast as well.
And so if you're newer toBioCentury and you don't know
what Back to School is, wellwe've been doing it every
year since BioCentury, David.
Flores and Karen Bernsteinfounded BioCentury more
than three decades ago.
It is a forward lookingpackage that looks at a
(08:26):
broad issue critical tothe biopharma industry.
Here to give us asneak peek is Simone.
Simone F (08:33):
Well, thank you, Jeff.
First of all, I wouldsay I really hated making
those school lunches somuch that I didn't do it.
Either my husband did it orthey did it themselves, so
that's my advice to people.
Get your spouse or yourkids to make their own.
But if you don't wantparenting advice from me,
I'm here to help tell you.
and mine turned out prettygood actually, I have to say.
But anyway, I'm here to tellyou about, um, Back to School.
(08:55):
And now that he's not here,I can say really incredibly
good things about Steve Den.
I know that he doesn'tlisten to the pod afterwards,
but he has written thisyear's Back to School.
It's really phenomenal andit really shows the deep.
Insights he has and the manyyears experience, he has
like literally decades ofcovering FDA and his deep
(09:19):
sources in FDA and XFDA.
And you'll understand thatmany of them will not want
to have been, identified.
But I also wanna make it veryclear what this Back to School.
Is about, and we would'vewritten it actually that same
topic, any administration,any environment.
It's really about how wouldyou build FDA from scratch
(09:41):
if you could redo it.
Most people understand andknow, and there've been
moves afoot to redesign andreorganize, FDA I think maybe
that's just become heightenednow, but that's really been a.
Priority for a lot ofpeople for a long while.
And so what we did is wesort of said, okay, let's
do the thought exercise.
It's just you've gota, a blank slate.
How would you buildFDA for today and the
(10:04):
future of medicines?
And I'll let Selinaweigh in with a few more
thoughts in a minute.
Just to let you knowthat that is the main
topic, reimagining FDA.
It is not about today's FDA.
It is about what itshould look like.
We do go down the history.
We have a pretty nice historyand some good graphics, and
Steve talks about how it shouldbe structured and brings up
(10:25):
some provocative concepts.
Selina, do you wannaadd anything to that?
Selina Koch (10:30):
Hmm.
Well on the historical pieceof it, I think people are often
surprised when they learn thatthere was a day when drugs were
approved first in Europe, sooutside the US and US was sort
of a secondary destination.
some of the policies andthe, the developments
along the timeline thatgot us to how we are.
(10:50):
you know where we are todayand how FDA also came to
be a place that regulatedtobacco, and cosmetics
and all of these things.
there's a lot of interestingstuff in there that helps
you understand the currentkind of state of play.
But yeah, going forward, Imean, do we wanna get into the
prescriptions he has in thereor leave it for readers to read?
Simone Fishburn (11:10):
We'll leave it for readers to read,
Jeff Cranmer (11:12):
Well, we'll have goodies for
you every day this week.
Either one or more stories.
starting Monday, runningthrough Friday, and then once
we come back from the LaborDay vacation in the US that's,
September 1st this year, We'll,put out the whole package in
one go and we'll follow upwith the podcast and, uh, we
(11:34):
look forward to having youread it as it's the biggest
thing we publish every year.
We're going to take a quickbreak and then we're gonna
take a look at Lilly'sobesity data and more.
Alanna Farro (11:46):
BioCentury This Week is brought to you by
BioCentury Grand Rounds Europe.
Grand Rounds, BioCentury'sR&D conference, will make
its European debut in 2025.
Join us to debate keytranslational bottlenecks and
unlock scientific breakthroughswith commercial potential.
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(12:07):
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Jeff Cranmer (12:29):
We are back and well, last week, Phase III,
data from Lilly's oral GLP-1in obesity fell well short
of investors expectations.
Steven, did theyexpect too much?
Stephen Hansen (12:46):
Jeff, yeah, so as you say, the, uh, headline
news was that, orforglipronthe name for their small
molecule, GLP-1, showedabout 11.5% placebo adjusted
efficacy on weight loss.
this resulted in literallylosing what is the equivalent
of a Vertex pharma in marketcap they lost about $95 billion.
(13:07):
The worry from the buyside stems from two things.
first, in Phase II, that samedose of orforglipron showed
about 11.2% placebo adjustedweight loss at 36 weeks.
in that data, the trendline didn't really
appear to be plateauing.
So, you can understand whyyou would kind of hope that
those responses would'vebeen stronger after 72 weeks.
secondly, I saw a lot ofchatter about concerns
(13:30):
of other oral therapiesthat are gonna be coming.
That now they would expect,will show better efficacy.
So that's Vikings VK2735, which has Phase II data
coming this quarter, forthe oral formulation.
and then also, uh, oralamycretin from Novo Nordisk,
which is heading intoPhase III testing soon.
so I just wanna say a fewthings on each of those
points, to base solely onthe Phase II data readout.
(13:53):
I think it's entirelyfair to call the data
the Phase III data.
disappointing.
What I think investors mayhave gotten given a little bit
too low of a credence to wasthe signal or what you could
maybe say, the red flag thatwe got in June from the Phase
III data in Type 2 diabetes.
what's pretty well establishednow is that GLP-1s don't
provide as much weight lossin diabetic patients as
(14:15):
they do in obesity patients.
And if you go back and look atsome of the other, semaglutide,
tirzepatide, other moleculesthat have been further
along and have had PhaseIII data in both settings.
What you typically see isthat, for both those programs,
it's about 40 to 50% lessweight loss in diabetic
patients than obese patients.
So when we saw 6% placeboadjusted weight loss in
(14:36):
the Phase III diabetesstudy for orforglipron.
That could have been a bitof a warning to investors
that maybe their expectationswere a little overwrought.
' cause if you extrapolate,if you kind of apply the
same assumptions that you'regonna see, 40 to 50% less
weight loss in diabetes foror that basically points you
to an 11 to 12% readout inobesity, which is what we got.
(15:00):
so that's the first point.
secondly.
There are gonna probably beother oral obesity therapies
that are gonna come outwith better efficacy data.
I think that's, that'sa perfectly fair
assumption to have.
what I think people need tostill take into consideration
is, the advantage youhave is a small molecule
relative to a peptide.
the first, uh, you know,I mentioned Viking and
(15:22):
amycretin, but really thefirst competitor is gonna be.
Novo is 25 milligramoral dose of semaglutide.
So that's already under review.
Probably gonna get approvedbefore orforglipron
is gonna get approved.
that showed 13.9% placeboadjusted weight loss in
their Phase III study.
the issue is, orforglipron,showed numerically better GI
(15:42):
tolerability than semaglutidein the Phase III setting.
small molecule didn't showany liver to, which is a
known sort of problem with thesmall molecule GLP-1 programs.
And again, being a smallmolecule, Lilly has a
clear advantage in termsof scaling up manufacturing
and meeting patient demand.
Selina Koch (16:00):
And what about, the manufacturing advantage
of a, I mean, there's oral,but there's oral peptide and
there's oral small molecule.
Stephen Hansen (16:08):
that's right.
Yeah, no, that's a good point,Slee, and I think that's, I
guess I would say I'm stillskeptical about when it
comes to the oral peptidesand their ability to really,
dominate the obesity market.
So just using the 25 milligramsemaglutide as an example.
So for the 25 milligramonce daily dose, that's
now under review.
That's 73 times the amountof API needed to treat an
(16:30):
obesity patient for one week,as compared to Novos once a
weekly Wegovy, that's a lotmore peptide that they would
need to manufacture to meet.
Patients on an oral dose,then they would need to
meet on an injectable dose.
And it's a similar thing as youget into some of the other ones.
So we're saying 25 milligramsfor semaglutide, they had
(16:50):
an efficacious dose at50 milligrams that they
chose not to submit forregulatory approval because
of concerns about beingable to meet manufacturing
capacity and scale.
and I think some of the otherpeptides, the later ones
like Viking and like oralamycretin, those are a hundred
milligrams a day being tested.
So that's an even largeramount of API peptide, API
(17:11):
that would be required.
So that scalability issue, Ithink is still a major barrier
for an oral peptide therapy,you know, taking a leadership
position in this market.
It's not to say that theycan't get approved, and it's
not to say that they can't becommercialized, but I don't
think an oral peptide therapyis gonna have the ability to,
sort of steal, start stealingthe market and steal demand
(17:34):
when you have an oral, smallmolecule that has much better
scalability, much better cogs.
And I think that's theother thing that people
are maybe discountingwith the small molecule.
I mean, I think Lilly's gonnahave a lot more pricing power
and ability to potentiallyprice other people out of the
market if they really wanted to.
so that's, you know, from mymind, I think that is just
something that maybe investorsweren't giving as much, uh,
(17:57):
attention to as they maybeshould have when all they
were worried about was sort ofwhat the headline number was.
Simone Fishburn (18:02):
Steven, this is maybe a naive question, but.
the obesity medications havejust made this massive impact.
I know we're gonna havea lot of, uh, funds
unintended here and reallyshaping reshaping society.
Lily is.
Literally laughing onthe way to the bank.
I think Novo Well'sdone pretty well.
Novo, I know we talked aboutlast week, I sort of wonder,
(18:24):
are investors getting greedy inas much as their expectations?
I mean, we talked aboutthis offline, right?
I mean, the results were inany normal world quite good.
They just weren't amazing.
is investor expectationjust unrealistic or is that
just the way of the world?
You make this far and nowyou've just always gotta,
Stephen Hansen (18:45):
I think, I think that's part of it Part of it is
that I think Lilly is one of themost closely followed and most
closely covered from a sell sideperspective, you know, biopharma
companies that we have.
And so I think when you havethat and you keep hitting,
you know, price target barsand these sorts of things,
and I'm not calling out anyspecific, you know, specific
signal on this, but you mighthave situations where like,
(19:06):
okay, well how are we gonna getmore growth out of this stock?
We know, what do we needto see, you know, they
hit 700, they hit 800.
Well, if, if our new pricetarget's $950, what sort of,
you know, growth metrics do weneed to see in the future or
peak sales metrics do we need tosee to be able to justify that?
And you plug it into yourmodel and all of a sudden, you
have this sort of consensusthat, orforglipron was gonna
(19:26):
be a $40 to $50 billiona year peak sales drug.
And that's whatexpectations were at.
And so then when you seethis sort of a number.
they have to downgradeexpectations to just $25 billion
a year, That's where I thinksometimes these can kind of
run a bit out of hand becauseI mean, my overall takeaway
is that, the data weren't tohome run, but they're fine.
(19:49):
I mean, this is anapproval of drug.
It's gonna get used and inthe context of how I think the
obesity market's going to sortof evolve here, I think that
there's gonna be a segmentof patients where really high
levels of efficacy are whatthey're gonna be needing.
And so you're gonna have thesehigh efficacy injectables
that are gonna fit, a smallportion of the population.
But then there's gonna be amajority of patients who aren't
(20:09):
gonna need 20% weight loss.
They're gonna befine with 10 to 15%.
that's where somethinglike this, I think
could, could really work.
You get patients downto a healthy weight.
and so I think you combine thatwith the scalability advantage,
the cogs, you know, potentialprice pricing advantage
that you can have here.
I don't see why this isn'tgonna do really well for them.
Jeff Cranmer (20:28):
Steven, what's next as far as,
uh, data milestones?
Stephen Hansen (20:32):
Yeah.
So I think the next reallyimportant one will be data
that should be coming upeither end of this year,
could be early next year,but it's, um, Phase III data
from their maintenance study.
so here Lilly is looking atpatients who actually completed
treatment in the, SURMOUNT-5study, which was the study
of, tirzepatide, Zepbound.
Head to head versus, Wegovy.
(20:52):
And then they essentially wereimmediately enrolled into this
study where they're takingorforglipron or placebo for
a year to see whether theycan maintain their weight
loss after having basicallycome off an injectable.
And so this is a segment of theobesity market that there are
a lot of people are aiming for.
So I know, you know, when peopletalk about amylin monotherapy
(21:15):
or Activin's myostatin, siRNAs,all of them are really excited
and really hyped about the ideaof a maintenance setting where
you can, basically, peopleare on an injectable, they get
their weight down and then theytransition to something else to
help them keep that weight offso they don't have the rebound.
And this is whatLilly's testing.
So they're seeing whethertheir oral GLP-1 can help
(21:37):
keep that weight off,long-term post injection.
And so I think this will bereally interesting to see
what the data reads out like,and I think it'll be really
interesting to give us a senseas to how Lilly is thinking
about in terms of positioning,this product going forward.
But, um, that's, that's sortof the next big shoe to drop,
I think, for this program,towards the end of the year.
Jeff Cranmer (21:56):
Excellent.
Thanks for that update, Steven.
Let's turn to Acadia.
This is one of my favoritetypes of story in biotech.
We have a company that is,well, they're as old as
BioCentury, about 32 years old.
and they are onthe comeback path.
They've made a pivot torare disease and they've.
(22:19):
Rebuilt the management teamand Selina took a closer look.
Selina, what did you learn?
Selina Koch (22:24):
Let's be cautiously optimistic here.
They got a long way togo, but, Yeah, this is
a classic biotech story.
so they got an approvalback in 2016, for a
drug called Nuplazid.
It treats, psychosis relatedto Parkinson's disease.
So a lot of people thinkof that as a motor disease,
which it is, but it also canhave, psychosis associated
with it and it's mechanism.
(22:46):
It's a inverse agonist forthe serotonin 5-HT2A receptor
for the aficionados out there.
they thought it could be usefulFor a wide variety of things.
So psychosis and othersettings, such as in dementia
at large or Alzheimer's, morespecifically, in schizophrenia.
And then outside of psychosis,even in depression, which
is a very large indication.
And they started, youknow, marching through
(23:08):
them, running the trials.
And then it was justkind of one, let down
after another there.
slashing, you know,their market cap.
Quite a lot.
And they started their kindof retooling, a while ago.
and their kind of big first steptoward, you know, if we can call
it a comeback, the beginningsof a comeback, um, was an
(23:29):
approval in a rare disease.
so then near the endof the middle of 20
24, they got a new CEO.
and they had just got a new headof R&D and the new CEO brought
on kind of new managers forthe commercial side of things,
because she had saw a bigopportunity in their new drug,
their new rare disease drug,Daybue, which was the first,
and I think remains still theonly, therapy for Rett syndrome.
(23:52):
and we've seen somewins on that front.
they have beengrowing those sales.
Modernizing the way theygo about commercialization,
and I think the next stepfor them is really showing
that they can have moreprograms behind this one.
Simone Fishburn (24:07):
Yeah, I think it's always interesting,
you know, we talk a lotabout new companies, but
there's a lot of very good,veteran companies, longer
standing companies, maybe.
I think it looks to me like theboard is doing its job, right?
The board is saying,bring in new management.
Let's look at what we've got.
Let's, let's work out howwe maximize value here.
(24:28):
So they've sort of pivoted toa focus on rare disease and
they say they've expandingsort of beyond just neuro.
most of their products arestill within the neuro area.
Right.
If I got that right.
And can you just talk a littlebit about how much they're
building versus licensingin to, create the pipeline?
Selina Koch (24:49):
so I wouldn't say that they've like
pivoted wholesale to rare.
I think what they're doing isdiversifying their pipeline in a
way that diversifies their risk.
Like they certainly feelthat rare disease is
an area where they can.
play and win is theway they talk about it.
they're also, you know,reasonably sized opportunities
for a company of theirsize to go after alone.
(25:12):
and some of those are comingin through deals, but they also
have some large indication, bigrisk, but big opportunity that's
in their pipeline as well.
So they have a Nuplazid.
Follow on compound, thatthey've inherited from the
former management team.
That it was designed in-housethrough the use of contractors
(25:34):
and whatnot, to solve some ofthe issues of the, of Nuplazid.
So dial down the QT elongationthat was preventing them from
pushing the dose or whatever.
And so they're takingthat now into Alzheimer's.
It's in Phase II and Alzheimer'spsychosis, about to be in Phase
II for Lewy body, psychosis.
(25:54):
that could bequite a large drug.
but then some of theother like things they're
bringing in through deals.
Yeah.
Stephen Hansen (26:00):
Selina, I was just wondering, does
this in some ways alsojust kind of highlight the.
higher risk that comes withbeing a neuro only focused
company, because I, I feellike I see a lot of parallels
though between what Acadiais doing and for instance,
like what Biogen did, right?
Because Biogen made that pivotto being a neuro only focused
company, and that eventuallyproved to be too much from a
(26:21):
risk perspective and they had tore diversify essentially and get
more into immunology and stuff.
And so I'm wondering if there's.
I, I just feel like I seea lot of parallels here
between the two of them.
Selina Koch (26:29):
Yeah.
More than that.
I think we're seeing the longtime neuro focus companies
diversify their risk.
Before that was also UCB,which also brought, like
Biogen brought in neurology.
There was Lundbeck, who'sa good maybe comparator to
Acadia, a psych company thatnow also is doing rare disease.
(26:50):
Some neurology that'srare, I think they, we see
all the long time players.
I think neuro is still hard.
Yeah, we've madea lot of progress.
There is a newbiomarker toolkit.
There are some, targets thathave some genetic rationale
behind them, even if they're notcausative in their own right.
And so these are all stepsin the right direction, but
it's still a high risk area.
Stephen Hansen (27:12):
I think that's a great takeaway.
Just neuro is still really hard.
Selina Koch (27:15):
Yeah.
Jeff Cranmer (27:16):
Selina, one thing you got into in your piece is
how, the new CEO Catherine OwenAdams has rebuilt the team.
She, took over thetop job 10 months ago.
She's a commercial leader withexperience at BMS and j and j.
she is, uh, added some people.
She's added Thomas Garneras Chief Commercial.
(27:38):
the new SVP of Rare Disease.
that's AllysonMcMillan-Youngblood and
a new head of RD too.
Uh, Elizabeth Thompson.
she actually joined right beforeOwen Adams and has since brought
on a new VP of TranslationalSciences, Rachael, Hawtin.
Selina Koch (28:00):
And now they have, a new role for them
as part of this like wholemodernizing, company and
how they make decisions.
They have a chief dataand information officer.
Jeff Cranmer (28:10):
Uh, yes, that's right.
Selina Koch (28:11):
and I think.
Jeff Cranmer (28:11):
last week, right?
Selina Koch (28:13):
Yeah, that was, that was very
recently last week.
Yeah.
Just before their earnings.
Um, and, and what they keepsaying with their messaging
right, is by having, much closercontact between commercial
and r and d and now, you know,this data and information
role and commercial and rand d, they wanna be, making
decisions in a way that reallyoptimizes, spots where this
(28:35):
company can sort of uniquelyplay and bring something
differentiated, to patients.
Jeff Cranmer (28:40):
Excellent.
Well Selina's, piece upon BioCentury dot com.
I'll drop a link in the shownotes, company to watch.
We'll be watchingwhat they get up to.
now we'll turn to Bio Secure.
It's back.
originally, uh, launchedin January of 2024.
it has been introduced asan amendment in a must pass
(29:04):
defense bill, and I caughtup with Steve on Friday to
discuss this, right beforehe skedaddled, for vacation.
so we'll turn to Steve nowand my conversation with him.
Steve, let's get right to it.
You broke the news on Fridaythat the Biosecure Act is back.
(29:24):
What's the deal?
Steve Usdin (29:26):
so it's not called the Biosecure Act, it's
an amendment to the NationalDefense Authorization Act.
but it's very similarto the Biosecure Act.
It actually was introducedas an amendment in the Senate
on July 31st by Senators BillHagerty, the Republican of
Tennessee, and Gary Peters,a Democrat of Michigan.
Jeff Cranmer (29:46):
Steve, let's back up a bit.
As you always like to sayto me, Biosecure Act when
did it first come out?
Again, I, I'mrecalling early 2024.
And what happened to it?
Steve Usdin (29:57):
So actually the first, introduction was in 2023.
and it was introduced atthat time, like this time as.
An amendment to the NationalDefense Appropriations bill.
It, didn't get alot of publicity.
It didn't get, enactedas part of the bill.
It kind of went away, andthen it came roaring back
(30:18):
in 2024 as a standalonepiece of legislation.
It went through alot of iterations.
Uh, we certainly talked aboutit on the podcast a lot.
I wrote a lot about it.
The core idea is that it'sintended to, basically to
drive a wedge between, the USbiopharmaceutical industry and
companies in China that provideservices and, uh, development
(30:41):
services and manufacturing.
There are big differences,however, between what's
been introduced this timeand the Biosecure Act that,
was narrowly defeated.
At the end of the session lasttime, and the differences look
like they're intended to make itmore likely to pass this time.
Jeff Cranmer (31:00):
What are those differences, Steve?
Steve Usdin (31:02):
Okay, so the, big complaint that Senator Rand Paul
had and that House Democrats hadabout the Biosecure Act was that
it was unfair that it violated,principles of due process
because it named specificcompanies as biotechnology
companies of concern.
Those are the companiesthat the act would apply to
without giving them a chanceto, present any evidence.
(31:22):
To the contrary,
Jeff Cranmer (31:24):
and just quickly, Steve, I recall it
hit two companies quite hard.
WuXi Apptec WuXi Biologicslost billions in market cap.
Their stocks only reallyrebounded, uh, this past spring.
Steve Usdin (31:36):
That's right.
hit them particularly hard.
BGI also, was affected.
its stock wasn't as affectedbecause it doesn't rely on the
United States nearly as much asWuXi AppTec and WuXi Biologics.
There's another companycalled Complete Genomics,
which is a unit of MGI tech,a Chinese company that would
also be severely, impactedby the Biosecure Act.
(32:01):
So this time.
In order to avoid the, theaccusations that the bill
didn't, provide due process, thenew version of it, the version
of it that was introducedon July 31st basically says,
okay, well here's a processfor determining what's a
biotechnology of concern.
And then it allows the companiesthat have been identified
(32:23):
to rebut those claims.
It even provides, in some casesfor companies an opportunity
to mitigate the concernsthat have led the process to
identify them as biotechnologycompanies of concern.
Now of course, there's an addedlayer of complexity or several
because there always is there.
So one, how a layerof complexity is
(32:45):
that, the bill has.
Two different kinds ofbiotechnology companies or
concerns, or two bucketsthat it puts them in.
Right?
One is the one that I justdescribed that goes through an
administrative process, wherebycompanies are identified, they
have the opportunity to rebutthe, allegations and even, in
some cases to mitigate them.
There's a secondcategory of companies.
These are companies that theDepartment of Defense lists as
(33:10):
Chinese military companies thatare operating in the U.S. Those
companies are automaticallylabeled biotechnology
companies of concern.
And the prohibitions in thebill would apply to them.
they don't have anability to appeal that.
The DOD for 2025 includes BGIGenomics, Forensic Genomics
(33:31):
International, MGI, and so byextension, Complete Genomics.
And Shanghai OrigincellBiological Cryo Equipment Co.
Jeff Cranmer (33:40):
and of course, speaking of, uh, you know,
companies like WuXi AppTec,WuXi Biologics, MGI, Complete
Genomics . the other, companiesthat were affected by the bill
were US biotechs who were leftto scramble to figure out an
alternative to the servicesof Global CDMOs, as those
companies provide a broadrange of, services, resources
(34:04):
to thousands of company inthe west and and the east.
So, Steve, I'm curious,what's the likely impact?
Of this bill and,grandfathering,
how will that work?
Steve Usdin (34:16):
Okay, so first the impact the bill as as it's
been introduced, and again,one, we don't know whether
it's gonna be enacted andtwo, we don't know whether
if it is enacted, it will bechanged between now and then.
But as it's drafted now, itlooks to me like it would
prevent NIH grants to anyof the companies that are
considered to be biotechnologycompanies of concern.
(34:38):
It would prevent theVeterans Administration from
purchasing drugs that weremanufactured, as a result
of ties to the biotechnologycompanies of concern.
And it would probably preventMedicaid from purchasing
those kinds of drugs.
It probably wouldn't haveany impact on Medicare.
Okay.
So that's impact.
(34:58):
There's a timeline.
It's complicated.
Within one year ofenactment of the law.
The OMB Director, the Officeof Management and Budget
director, has to publish aninitial list of biotechnology
companies of concern.
That list is generated inconsultation with a bunch of
other, government departments.
Within 180 days of thepublication of that list,
(35:20):
OMB has to publish guidancefor executive agencies
on how to implement it.
Within a year of the publicationof that guidance, the Federal
Acquisition Regulatory Councilmust update, acquisition
laws to incorporate thoserequirements for companies
that are on the DOD list ofChinese military companies
operating the United States.
The prohibitions ongovernment contracts and
(35:41):
grants take effect 60 daysafter federal acquisition
regulatory, changes are made.
For companies that aredesignated as of concern
using the processes ledby OMB, the prohibitions
would take effect 180 daysafter the far is revised.
But as you mentioned,grandfathering, the amendment
(36:02):
includes a five-year grandfatherclause starting from the
time of the FAR revisions forthose companies that OMB has
designated as biotechnologycompanies of concern.
My reading of it isthat it doesn't apply.
The grandfathering doesn'tapply to the companies
that are on the DOD list ofChinese military companies.
Now, if all of this hasn'tgotten you really confused,
(36:25):
you're really very good atfollowing my voice, I would
suggest that you go and lookat the story that I wrote
because it's all spelledout in there and it's a lot
easier to understand when yousee it in black and white.
Jeff Cranmer (36:35):
And I'll drop a link, in the show notes.
It'll also be available,at BioCentury podcast.com.
And of course, subs can,uh, just find it in their
usual spot where you find,uh, things from Mr. Den.
All right, Steve,enjoy your vacation.
We'll see you soon.
Steve Usdin (36:52):
A lot.
Jeff Cranmer (36:53):
All righty.
That is it for this week'sBioCentury this week podcast.
but we'll be having a specialepisode focused on China
and East West deals, howthey're changing, what's
happening in the Hong Kong.
Stock market.
We'll have, a consultant oncross border deals, Ji Li.
(37:16):
we'll have Mike Patten fromtop deal maker, top East-West
deal maker, Harbour Biomed,and of course, Franck Le Deu.
One of the big names at McKinseyin Asia, who's been on the
pod quite a few times before.
And we'll have a classic rewindepisode of the BioCentury Show,
(37:38):
available on podcast only.
David Altshuler from Vertex.
He's the CSO.
Uh, the company announcedthat he would be retiring
next year, so we thoughtit would be a great time to
revisit his conversation with.
Simone, which, uh,took place in March.
He told us all about,his lifelong, fanboy
(37:59):
status of Doug Flutie.
he has a box of Flutie Flakeson his bookshelf behind him,
and he is, uh, very happyto talk to you about that.
And, uh, Simone pressedhim on that a little bit.
And the BioCentury showwill return with its,
Latest new episode.
Annalisa Jenkins.
Simone, what'd y'all talk about?
Simone Fishburn (38:19):
We talked about the state of U.K. biotech.
We talked about the incoming.
Well kind of already wouldcome in and new head of MHRA,
the U.K. regulator who, uh,BioCentury we'll be talking to
soon, and the U.K. government'splan for creating life sciences
(38:40):
as part of the cornerstoneof its life strategy.
Stephen Hansen, of course,has written about this in
biotech, Annalisa and I talkedabout why would this time
be different from others andis it different from others.
and we just shut thebreeze about a few things.
Jeff Cranmer (38:55):
Excellent.
Well look out for that.
That'll be coming outin the third week of
August, for tuning in.
If you like what you'rehearing, please, Give us
a thumbs up or whatever wehave on the on the site.
Leave us a comment,drop us a question.
We'd love to hear from you.
And we appreciate Kendall SquareOrchestra, which produces the
(39:15):
music for all of Bios podcasts.
[ AI-generated transcript ]
Jeff Cranmer (00:02):
Eli Lilly released new obesity data last week.
It did not impress investors,but was it all that bad?
On the latest BioCentury?
This week podcast will discusswhy Lilly's oral GLP-1 should
have a leg up in the market.
(00:22):
Plus we will talk aboutrevamping a 30-year-old biotech
Acadia, the return of theBiosecure Act, and we'll touch
on Vene Prasad's return to FDA.
Joining me to discussall of this are.
Simone Fishburn (00:41):
Simon Fishburn, editor-in-chief.
Stephen Hansen (00:43):
Steven Hanson, director of.
Biopharm intelligence.
Selina Koch (00:46):
And Selina Koch, executive editor.
Jeff Cranmer (00:49):
All right.
The whirlwind, year at FDAcontinues, our colleague, Steve,
would normally be all over this,but he has, uh, skipped town to
enjoy his usual August vacation.
And so Simone, why don't youfill us in on what is happening
in your neck of the woods?
Simone Fishburn (01:07):
Yeah, never a dull moment here in
DC in this particular era.
so as you pointed out, VenePrasad is back, head of CBER.
That's the Center for Biologicsand Evaluation Research.
I got that right.
Some words in that order,like that CBER and um.
Jeff Cranmer (01:28):
Put a D in there then.
Then
Simone Fishburn (01:30):
so therein lies the story, right?
Because he is basically, as I'msure all our listeners know, we
won't get into that much detail.
He is and was, the head of theunit that regulates biologics,
like cell and gene therapies inaddition, of course to vaccines.
A highly charged topic in thisparticular administration.
(01:53):
I don't think we'llknow and ever know.
He really went, went on behindthe scenes, but he tended his
resignation, what is it, Jeff?
Two weeks ago?
Jeff Cra (02:01):
something around then.
Simone Fishburn (02:02):
two weeks ago.
And then,
Stephen Hansen (02:04):
He tendered.
He tendered it longenough ago to go to
Italy and then come back.
Simone Fishburn (02:08):
So, you know, now he's back and there's
really a lot of conversations.
'cause he actually went to spendmore time with his family as
somebody who's about to spend alot of time with their family.
I'm kind of wondering, witha lot of family, I'm kinda
wondering whether he waslike, you know what, running
CBER is easier than this.
Jeff Cranmer (02:25):
Yeah.
Yeah.
My mom's like will comevisit me, she begs me
to live closer than she.
Visits and she's like, youknow, It's like fish three
days and it starts to stink.
You know?
It's like, mom,but mom, I'm your
Simone Fishburn (02:36):
Well, I gotta tell you, I'm trying to put
together just to get somepeople together of my family
coming from all over the world.
Find a time where we canall celebrate a very, you
know, happy engagement and,really running CBER easier.
I, I gotta say that runningeven in this time, but I do know
that there are other theories.
Steven, do you wanna giveone of the other theories?
Stephen Hansen (02:57):
Yeah.
Well, so as I sort of alludedto, I think one of the theories
was that he just hadn't earnedenough of his PTO time, and
so this was sort of a way to.
Uh, be able to get off on anice little vacation and then,
uh, and then come right back.
So, uh, yeah, I mean it's,it's actually something
I might, might consider.
Maybe, I don't know.
Simone Fishburn (03:12):
Well try it.
Just try it, Stephen.
Go ahead.
Just try it.
I, I may not be as lovingas the people, you know.
They were desperate,Makary was very keen for
him to come back.
Stephen Hansen (03:22):
You're not going to be my Marty, not to
be my Marty Makary, Simone,uh, beg me to come back and.
Simone Fishbur (03:27):
go ahead Selina.
You wanna bring us back
Selina Koch (03:30):
Gonna,
Simone Fishbu (03:30):
Earth, don't you?
the big, uh, the bigdownside here, right?
Which is that constant upheaval,one thing after another.
It could probably be the worstpart of this for the industry.
Yeah, I think that's it.
You know, and Steve iscertainly gonna get into
this when he comes back,but let's just go through
a few of the things thathave happened, which is.
(03:50):
Prasad beforehand had beenvery, very critical of Peter
Marks his predecessor foroverruling, decisions made
by the staff under him,right, in terms of approvals.
Prasad then came in and didexactly the same thing himself.
In addition to that, whatactually happened is the
Replimune cases one, butthere were a couple of others.
(04:12):
We talked about itpreviously on the pod.
There were CBER decisionsor CRLs that basically
reversed what the formerFDA guidance had been.
And now after he went, all thebiopharmas were like, well, what
does this mean going forward?
Now he's back, they'restill like, what does
this mean going forward?
(04:32):
so to your point of uncertainty,Selina, you know, I think
there's a certain level ofuncertainty, but there might
be people going, hang on,we were just getting used to
Prasad beginning to understandand not everybody disagreed
with everything he did.
Just to be very clear.
there's that sort of, we don'tknow what the uncertainty,
we are uncertain aboutthe uncertainty level is
what I'm trying to say.
Selina Koch (04:52):
Yeah.
Like how long is he backis Makary, you know?
I dunno.
Jeff Cranmer (04:57):
I, I, I think as we were talking about
earlier, Simone, like, you weresaying on our, morning editorial
call that you know, you,you're out talking to CEOs and.
The one thing they wanna knowis when will this biotech winter
end and, and now you've gottalump in this turmoil at FDA.
The constant changingas part of that.
'cause biotechsjust need to plan.
(05:17):
They need to know what theregulatory pathways are.
Simone Fishburn (05:21):
I mean, I think a couple of things,
um, are becoming clear.
So the administration'spullback on mRNA funding,
is part of this big picture.
It is just impossible seeingPrasad, for me to see Prasad
take a stance that is verypro-vaccine that is gonna push
back and say, no mRNA vaccinesactually have saved many lives.
(05:44):
That's not what hesaid in the past.
So I think that, havinghim there, or even anyone
under this administrationin that particular.
Part of drug development.
I think we all know that thatis, a, I would say a big cloud.
I think many people feelit's, it's really a bad
situation for FDA to be inand public health to be in.
But there's another thing thatis kind of becoming clear,
(06:06):
which is that he, even thoughPeter Marks had a pretty high
profile, it wasn't a higherprofile than the head of CDA,
and right now Prasad is getting.
More ink, should we say moreheadlines, more attention
than the head of CDER.
And it sort of suggests thathe might have more power there.
Now he's back.
(06:27):
He's actually gottremendous power, arguably.
And so, it'll be veryinteresting as we pointed
out and discussed on ourcall before, Jeff, because
what he's in charge of, whichis sort of cell and gene
therapies, is really not themajority of drug development.
And yet that's where alot of the attention is.
Selina Koch (06:44):
Is he back as Chief Scientific and
Medical Officer over FDA.
And does he also like thethe commissioner's prior
new priority voucher?
Is he still in chargeof that as well?
Simone Fishburn (06:54):
we don't know that yet.
at least the last thing Isaw, at least before coming
on this pod, I, I hadn't seenanything confirming that.
But we do know that the FDACommissioner, Marty Makary
is a big fan of Prasad's.
Jeff Cranmer (07:07):
That is true.
That is true.
Alright, well, Steve, uh, asSimone said, he'll be back,
he'll dig into this and, uh,
Simone Fishburn (07:14):
To say it with fancier words and just a lot
more insight, let's be honest,PTO.
You
Jeff Cranmer (07:20):
bet.
Well, this all fits nicely intoour annual Back to School issue,
the theme of Back to School and.
As we believe in equity hereat BioCentury, many of our
longtime readers know, we alwayspublish Back to School right
around Labor Day when kidson the east coast of America
(07:42):
are going Back to School.
But hey, Selina and I arealready starting to make,
those, delicious sandwichesfor our kids' lunch this
week as they're headingBack to School this week.
So what better to do than to.
Publish Back to School thisweek and then return once our
friends in Europe are back fromvacation and double dip and
(08:03):
release, the package once againcomplete with a podcast as well.
And so if you're newer toBioCentury and you don't know
what Back to School is, wellwe've been doing it every
year since BioCentury, David.
Flores and Karen Bernsteinfounded BioCentury more
than three decades ago.
It is a forward lookingpackage that looks at a
(08:26):
broad issue critical tothe biopharma industry.
Here to give us asneak peek is Simone.
Simone F (08:33):
Well, thank you, Jeff.
First of all, I wouldsay I really hated making
those school lunches somuch that I didn't do it.
Either my husband did it orthey did it themselves, so
that's my advice to people.
Get your spouse or yourkids to make their own.
But if you don't wantparenting advice from me,
I'm here to help tell you.
and mine turned out prettygood actually, I have to say.
But anyway, I'm here to tellyou about, um, Back to School.
(08:55):
And now that he's not here,I can say really incredibly
good things about Steve Den.
I know that he doesn'tlisten to the pod afterwards,
but he has written thisyear's Back to School.
It's really phenomenal andit really shows the deep.
Insights he has and the manyyears experience, he has
like literally decades ofcovering FDA and his deep
(09:19):
sources in FDA and XFDA.
And you'll understand thatmany of them will not want
to have been, identified.
But I also wanna make it veryclear what this Back to School.
Is about, and we would'vewritten it actually that same
topic, any administration,any environment.
It's really about how wouldyou build FDA from scratch
(09:41):
if you could redo it.
Most people understand andknow, and there've been
moves afoot to redesign andreorganize, FDA I think maybe
that's just become heightenednow, but that's really been a.
Priority for a lot ofpeople for a long while.
And so what we did is wesort of said, okay, let's
do the thought exercise.
It's just you've gota, a blank slate.
How would you buildFDA for today and the
(10:04):
future of medicines?
And I'll let Selinaweigh in with a few more
thoughts in a minute.
Just to let you knowthat that is the main
topic, reimagining FDA.
It is not about today's FDA.
It is about what itshould look like.
We do go down the history.
We have a pretty nice historyand some good graphics, and
Steve talks about how it shouldbe structured and brings up
(10:25):
some provocative concepts.
Selina, do you wannaadd anything to that?
Selina Koch (10:30):
Hmm.
Well on the historical pieceof it, I think people are often
surprised when they learn thatthere was a day when drugs were
approved first in Europe, sooutside the US and US was sort
of a secondary destination.
some of the policies andthe, the developments
along the timeline thatgot us to how we are.
(10:50):
you know where we are todayand how FDA also came to
be a place that regulatedtobacco, and cosmetics
and all of these things.
there's a lot of interestingstuff in there that helps
you understand the currentkind of state of play.
But yeah, going forward, Imean, do we wanna get into the
prescriptions he has in thereor leave it for readers to read?
Simone Fishburn (11:10):
We'll leave it for readers to read,
Jeff Cranmer (11:12):
Well, we'll have goodies for
you every day this week.
Either one or more stories.
starting Monday, runningthrough Friday, and then once
we come back from the LaborDay vacation in the US that's,
September 1st this year, We'll,put out the whole package in
one go and we'll follow upwith the podcast and, uh, we
(11:34):
look forward to having youread it as it's the biggest
thing we publish every year.
We're going to take a quickbreak and then we're gonna
take a look at Lilly'sobesity data and more.
Alanna Farro (11:46):
BioCentury This Week is brought to you by
BioCentury Grand Rounds Europe.
Grand Rounds, BioCentury'sR&D conference, will make
its European debut in 2025.
Join us to debate keytranslational bottlenecks and
unlock scientific breakthroughswith commercial potential.
Connect with VCs, academicinnovators, and biopharma
(12:07):
R&D and BD leaders to explorecutting edge advancements
in early stage R&D as wedive into disease biology,
therapeutic modalities,and enabling technologies.
Join us for the inauguralBioCentury Grand Grounds
Europe in Cambridge.
U.K. the September 17th to 19th.
Register and learn more atBioCenturyGrandRoundsEurope.com.
Jeff Cranmer (12:29):
We are back and well, last week, Phase III,
data from Lilly's oral GLP-1in obesity fell well short
of investors expectations.
Steven, did theyexpect too much?
Stephen Hansen (12:46):
Jeff, yeah, so as you say, the, uh, headline
news was that, orforglipronthe name for their small
molecule, GLP-1, showedabout 11.5% placebo adjusted
efficacy on weight loss.
this resulted in literallylosing what is the equivalent
of a Vertex pharma in marketcap they lost about $95 billion.
(13:07):
The worry from the buyside stems from two things.
first, in Phase II, that samedose of orforglipron showed
about 11.2% placebo adjustedweight loss at 36 weeks.
in that data, the trendline didn't really
appear to be plateauing.
So, you can understand whyyou would kind of hope that
those responses would'vebeen stronger after 72 weeks.
secondly, I saw a lot ofchatter about concerns
(13:30):
of other oral therapiesthat are gonna be coming.
That now they would expect,will show better efficacy.
So that's Vikings VK2735, which has Phase II data
coming this quarter, forthe oral formulation.
and then also, uh, oralamycretin from Novo Nordisk,
which is heading intoPhase III testing soon.
so I just wanna say a fewthings on each of those
points, to base solely onthe Phase II data readout.
(13:53):
I think it's entirelyfair to call the data
the Phase III data.
disappointing.
What I think investors mayhave gotten given a little bit
too low of a credence to wasthe signal or what you could
maybe say, the red flag thatwe got in June from the Phase
III data in Type 2 diabetes.
what's pretty well establishednow is that GLP-1s don't
provide as much weight lossin diabetic patients as
(14:15):
they do in obesity patients.
And if you go back and look atsome of the other, semaglutide,
tirzepatide, other moleculesthat have been further
along and have had PhaseIII data in both settings.
What you typically see isthat, for both those programs,
it's about 40 to 50% lessweight loss in diabetic
patients than obese patients.
So when we saw 6% placeboadjusted weight loss in
(14:36):
the Phase III diabetesstudy for orforglipron.
That could have been a bitof a warning to investors
that maybe their expectationswere a little overwrought.
' cause if you extrapolate,if you kind of apply the
same assumptions that you'regonna see, 40 to 50% less
weight loss in diabetes foror that basically points you
to an 11 to 12% readout inobesity, which is what we got.
(15:00):
so that's the first point.
secondly.
There are gonna probably beother oral obesity therapies
that are gonna come outwith better efficacy data.
I think that's, that'sa perfectly fair
assumption to have.
what I think people need tostill take into consideration
is, the advantage youhave is a small molecule
relative to a peptide.
the first, uh, you know,I mentioned Viking and
(15:22):
amycretin, but really thefirst competitor is gonna be.
Novo is 25 milligramoral dose of semaglutide.
So that's already under review.
Probably gonna get approvedbefore orforglipron
is gonna get approved.
that showed 13.9% placeboadjusted weight loss in
their Phase III study.
the issue is, orforglipron,showed numerically better GI
(15:42):
tolerability than semaglutidein the Phase III setting.
small molecule didn't showany liver to, which is a
known sort of problem with thesmall molecule GLP-1 programs.
And again, being a smallmolecule, Lilly has a
clear advantage in termsof scaling up manufacturing
and meeting patient demand.
Selina Koch (16:00):
And what about, the manufacturing advantage
of a, I mean, there's oral,but there's oral peptide and
there's oral small molecule.
Stephen Hansen (16:08):
that's right.
Yeah, no, that's a good point,Slee, and I think that's, I
guess I would say I'm stillskeptical about when it
comes to the oral peptidesand their ability to really,
dominate the obesity market.
So just using the 25 milligramsemaglutide as an example.
So for the 25 milligramonce daily dose, that's
now under review.
That's 73 times the amountof API needed to treat an
(16:30):
obesity patient for one week,as compared to Novos once a
weekly Wegovy, that's a lotmore peptide that they would
need to manufacture to meet.
Patients on an oral dose,then they would need to
meet on an injectable dose.
And it's a similar thing as youget into some of the other ones.
So we're saying 25 milligramsfor semaglutide, they had
(16:50):
an efficacious dose at50 milligrams that they
chose not to submit forregulatory approval because
of concerns about beingable to meet manufacturing
capacity and scale.
and I think some of the otherpeptides, the later ones
like Viking and like oralamycretin, those are a hundred
milligrams a day being tested.
So that's an even largeramount of API peptide, API
(17:11):
that would be required.
So that scalability issue, Ithink is still a major barrier
for an oral peptide therapy,you know, taking a leadership
position in this market.
It's not to say that theycan't get approved, and it's
not to say that they can't becommercialized, but I don't
think an oral peptide therapyis gonna have the ability to,
sort of steal, start stealingthe market and steal demand
(17:34):
when you have an oral, smallmolecule that has much better
scalability, much better cogs.
And I think that's theother thing that people
are maybe discountingwith the small molecule.
I mean, I think Lilly's gonnahave a lot more pricing power
and ability to potentiallyprice other people out of the
market if they really wanted to.
so that's, you know, from mymind, I think that is just
something that maybe investorsweren't giving as much, uh,
(17:57):
attention to as they maybeshould have when all they
were worried about was sort ofwhat the headline number was.
Simone Fishburn (18:02):
Steven, this is maybe a naive question, but.
the obesity medications havejust made this massive impact.
I know we're gonna havea lot of, uh, funds
unintended here and reallyshaping reshaping society.
Lily is.
Literally laughing onthe way to the bank.
I think Novo Well'sdone pretty well.
Novo, I know we talked aboutlast week, I sort of wonder,
(18:24):
are investors getting greedy inas much as their expectations?
I mean, we talked aboutthis offline, right?
I mean, the results were inany normal world quite good.
They just weren't amazing.
is investor expectationjust unrealistic or is that
just the way of the world?
You make this far and nowyou've just always gotta,
Stephen Hansen (18:45):
I think, I think that's part of it Part of it is
that I think Lilly is one of themost closely followed and most
closely covered from a sell sideperspective, you know, biopharma
companies that we have.
And so I think when you havethat and you keep hitting,
you know, price target barsand these sorts of things,
and I'm not calling out anyspecific, you know, specific
signal on this, but you mighthave situations where like,
(19:06):
okay, well how are we gonna getmore growth out of this stock?
We know, what do we needto see, you know, they
hit 700, they hit 800.
Well, if, if our new pricetarget's $950, what sort of,
you know, growth metrics do weneed to see in the future or
peak sales metrics do we need tosee to be able to justify that?
And you plug it into yourmodel and all of a sudden, you
have this sort of consensusthat, orforglipron was gonna
(19:26):
be a $40 to $50 billiona year peak sales drug.
And that's whatexpectations were at.
And so then when you seethis sort of a number.
they have to downgradeexpectations to just $25 billion
a year, That's where I thinksometimes these can kind of
run a bit out of hand becauseI mean, my overall takeaway
is that, the data weren't tohome run, but they're fine.
(19:49):
I mean, this is anapproval of drug.
It's gonna get used and inthe context of how I think the
obesity market's going to sortof evolve here, I think that
there's gonna be a segmentof patients where really high
levels of efficacy are whatthey're gonna be needing.
And so you're gonna have thesehigh efficacy injectables
that are gonna fit, a smallportion of the population.
But then there's gonna be amajority of patients who aren't
(20:09):
gonna need 20% weight loss.
They're gonna befine with 10 to 15%.
that's where somethinglike this, I think
could, could really work.
You get patients downto a healthy weight.
and so I think you combine thatwith the scalability advantage,
the cogs, you know, potentialprice pricing advantage
that you can have here.
I don't see why this isn'tgonna do really well for them.
Jeff Cranmer (20:28):
Steven, what's next as far as,
uh, data milestones?
Stephen Hansen (20:32):
Yeah.
So I think the next reallyimportant one will be data
that should be coming upeither end of this year,
could be early next year,but it's, um, Phase III data
from their maintenance study.
so here Lilly is looking atpatients who actually completed
treatment in the, SURMOUNT-5study, which was the study
of, tirzepatide, Zepbound.
Head to head versus, Wegovy.
(20:52):
And then they essentially wereimmediately enrolled into this
study where they're takingorforglipron or placebo for
a year to see whether theycan maintain their weight
loss after having basicallycome off an injectable.
And so this is a segment of theobesity market that there are
a lot of people are aiming for.
So I know, you know, when peopletalk about amylin monotherapy
(21:15):
or Activin's myostatin, siRNAs,all of them are really excited
and really hyped about the ideaof a maintenance setting where
you can, basically, peopleare on an injectable, they get
their weight down and then theytransition to something else to
help them keep that weight offso they don't have the rebound.
And this is whatLilly's testing.
So they're seeing whethertheir oral GLP-1 can help
(21:37):
keep that weight off,long-term post injection.
And so I think this will bereally interesting to see
what the data reads out like,and I think it'll be really
interesting to give us a senseas to how Lilly is thinking
about in terms of positioning,this product going forward.
But, um, that's, that's sortof the next big shoe to drop,
I think, for this program,towards the end of the year.
Jeff Cranmer (21:56):
Excellent.
Thanks for that update, Steven.
Let's turn to Acadia.
This is one of my favoritetypes of story in biotech.
We have a company that is,well, they're as old as
BioCentury, about 32 years old.
and they are onthe comeback path.
They've made a pivot torare disease and they've.
(22:19):
Rebuilt the management teamand Selina took a closer look.
Selina, what did you learn?
Selina Koch (22:24):
Let's be cautiously optimistic here.
They got a long way togo, but, Yeah, this is
a classic biotech story.
so they got an approvalback in 2016, for a
drug called Nuplazid.
It treats, psychosis relatedto Parkinson's disease.
So a lot of people thinkof that as a motor disease,
which it is, but it also canhave, psychosis associated
with it and it's mechanism.
(22:46):
It's a inverse agonist forthe serotonin 5-HT2A receptor
for the aficionados out there.
they thought it could be usefulFor a wide variety of things.
So psychosis and othersettings, such as in dementia
at large or Alzheimer's, morespecifically, in schizophrenia.
And then outside of psychosis,even in depression, which
is a very large indication.
And they started, youknow, marching through
(23:08):
them, running the trials.
And then it was justkind of one, let down
after another there.
slashing, you know,their market cap.
Quite a lot.
And they started their kindof retooling, a while ago.
and their kind of big first steptoward, you know, if we can call
it a comeback, the beginningsof a comeback, um, was an
(23:29):
approval in a rare disease.
so then near the endof the middle of 20
24, they got a new CEO.
and they had just got a new headof R&D and the new CEO brought
on kind of new managers forthe commercial side of things,
because she had saw a bigopportunity in their new drug,
their new rare disease drug,Daybue, which was the first,
and I think remains still theonly, therapy for Rett syndrome.
(23:52):
and we've seen somewins on that front.
they have beengrowing those sales.
Modernizing the way theygo about commercialization,
and I think the next stepfor them is really showing
that they can have moreprograms behind this one.
Simone Fishburn (24:07):
Yeah, I think it's always interesting,
you know, we talk a lotabout new companies, but
there's a lot of very good,veteran companies, longer
standing companies, maybe.
I think it looks to me like theboard is doing its job, right?
The board is saying,bring in new management.
Let's look at what we've got.
Let's, let's work out howwe maximize value here.
(24:28):
So they've sort of pivoted toa focus on rare disease and
they say they've expandingsort of beyond just neuro.
most of their products arestill within the neuro area.
Right.
If I got that right.
And can you just talk a littlebit about how much they're
building versus licensingin to, create the pipeline?
Selina Koch (24:49):
so I wouldn't say that they've like
pivoted wholesale to rare.
I think what they're doing isdiversifying their pipeline in a
way that diversifies their risk.
Like they certainly feelthat rare disease is
an area where they can.
play and win is theway they talk about it.
they're also, you know,reasonably sized opportunities
for a company of theirsize to go after alone.
(25:12):
and some of those are comingin through deals, but they also
have some large indication, bigrisk, but big opportunity that's
in their pipeline as well.
So they have a Nuplazid.
Follow on compound, thatthey've inherited from the
former management team.
That it was designed in-housethrough the use of contractors
(25:34):
and whatnot, to solve some ofthe issues of the, of Nuplazid.
So dial down the QT elongationthat was preventing them from
pushing the dose or whatever.
And so they're takingthat now into Alzheimer's.
It's in Phase II and Alzheimer'spsychosis, about to be in Phase
II for Lewy body, psychosis.
(25:54):
that could bequite a large drug.
but then some of theother like things they're
bringing in through deals.
Yeah.
Stephen Hansen (26:00):
Selina, I was just wondering, does
this in some ways alsojust kind of highlight the.
higher risk that comes withbeing a neuro only focused
company, because I, I feellike I see a lot of parallels
though between what Acadiais doing and for instance,
like what Biogen did, right?
Because Biogen made that pivotto being a neuro only focused
company, and that eventuallyproved to be too much from a
(26:21):
risk perspective and they had tore diversify essentially and get
more into immunology and stuff.
And so I'm wondering if there's.
I, I just feel like I seea lot of parallels here
between the two of them.
Selina Koch (26:29):
Yeah.
More than that.
I think we're seeing the longtime neuro focus companies
diversify their risk.
Before that was also UCB,which also brought, like
Biogen brought in neurology.
There was Lundbeck, who'sa good maybe comparator to
Acadia, a psych company thatnow also is doing rare disease.
(26:50):
Some neurology that'srare, I think they, we see
all the long time players.
I think neuro is still hard.
Yeah, we've madea lot of progress.
There is a newbiomarker toolkit.
There are some, targets thathave some genetic rationale
behind them, even if they're notcausative in their own right.
And so these are all stepsin the right direction, but
it's still a high risk area.
Stephen Hansen (27:12):
I think that's a great takeaway.
Just neuro is still really hard.
Selina Koch (27:15):
Yeah.
Jeff Cranmer (27:16):
Selina, one thing you got into in your piece is
how, the new CEO Catherine OwenAdams has rebuilt the team.
She, took over thetop job 10 months ago.
She's a commercial leader withexperience at BMS and j and j.
she is, uh, added some people.
She's added Thomas Garneras Chief Commercial.
(27:38):
the new SVP of Rare Disease.
that's AllysonMcMillan-Youngblood and
a new head of RD too.
Uh, Elizabeth Thompson.
she actually joined right beforeOwen Adams and has since brought
on a new VP of TranslationalSciences, Rachael, Hawtin.
Selina Koch (28:00):
And now they have, a new role for them
as part of this like wholemodernizing, company and
how they make decisions.
They have a chief dataand information officer.
Jeff Cranmer (28:10):
Uh, yes, that's right.
Selina Koch (28:11):
and I think.
Jeff Cranmer (28:11):
last week, right?
Selina Koch (28:13):
Yeah, that was, that was very
recently last week.
Yeah.
Just before their earnings.
Um, and, and what they keepsaying with their messaging
right, is by having, much closercontact between commercial
and r and d and now, you know,this data and information
role and commercial and rand d, they wanna be, making
decisions in a way that reallyoptimizes, spots where this
(28:35):
company can sort of uniquelyplay and bring something
differentiated, to patients.
Jeff Cranmer (28:40):
Excellent.
Well Selina's, piece upon BioCentury dot com.
I'll drop a link in the shownotes, company to watch.
We'll be watchingwhat they get up to.
now we'll turn to Bio Secure.
It's back.
originally, uh, launchedin January of 2024.
it has been introduced asan amendment in a must pass
(29:04):
defense bill, and I caughtup with Steve on Friday to
discuss this, right beforehe skedaddled, for vacation.
so we'll turn to Steve nowand my conversation with him.
Steve, let's get right to it.
You broke the news on Fridaythat the Biosecure Act is back.
(29:24):
What's the deal?
Steve Usdin (29:26):
so it's not called the Biosecure Act, it's
an amendment to the NationalDefense Authorization Act.
but it's very similarto the Biosecure Act.
It actually was introducedas an amendment in the Senate
on July 31st by Senators BillHagerty, the Republican of
Tennessee, and Gary Peters,a Democrat of Michigan.
Jeff Cranmer (29:46):
Steve, let's back up a bit.
As you always like to sayto me, Biosecure Act when
did it first come out?
Again, I, I'mrecalling early 2024.
And what happened to it?
Steve Usdin (29:57):
So actually the first, introduction was in 2023.
and it was introduced atthat time, like this time as.
An amendment to the NationalDefense Appropriations bill.
It, didn't get alot of publicity.
It didn't get, enactedas part of the bill.
It kind of went away, andthen it came roaring back
(30:18):
in 2024 as a standalonepiece of legislation.
It went through alot of iterations.
Uh, we certainly talked aboutit on the podcast a lot.
I wrote a lot about it.
The core idea is that it'sintended to, basically to
drive a wedge between, the USbiopharmaceutical industry and
companies in China that provideservices and, uh, development
(30:41):
services and manufacturing.
There are big differences,however, between what's
been introduced this timeand the Biosecure Act that,
was narrowly defeated.
At the end of the session lasttime, and the differences look
like they're intended to make itmore likely to pass this time.
Jeff Cranmer (31:00):
What are those differences, Steve?
Steve Usdin (31:02):
Okay, so the, big complaint that Senator Rand Paul
had and that House Democrats hadabout the Biosecure Act was that
it was unfair that it violated,principles of due process
because it named specificcompanies as biotechnology
companies of concern.
Those are the companiesthat the act would apply to
without giving them a chanceto, present any evidence.
(31:22):
To the contrary,
Jeff Cranmer (31:24):
and just quickly, Steve, I recall it
hit two companies quite hard.
WuXi Apptec WuXi Biologicslost billions in market cap.
Their stocks only reallyrebounded, uh, this past spring.
Steve Usdin (31:36):
That's right.
hit them particularly hard.
BGI also, was affected.
its stock wasn't as affectedbecause it doesn't rely on the
United States nearly as much asWuXi AppTec and WuXi Biologics.
There's another companycalled Complete Genomics,
which is a unit of MGI tech,a Chinese company that would
also be severely, impactedby the Biosecure Act.
(32:01):
So this time.
In order to avoid the, theaccusations that the bill
didn't, provide due process, thenew version of it, the version
of it that was introducedon July 31st basically says,
okay, well here's a processfor determining what's a
biotechnology of concern.
And then it allows the companiesthat have been identified
(32:23):
to rebut those claims.
It even provides, in some casesfor companies an opportunity
to mitigate the concernsthat have led the process to
identify them as biotechnologycompanies of concern.
Now of course, there's an addedlayer of complexity or several
because there always is there.
So one, how a layerof complexity is
(32:45):
that, the bill has.
Two different kinds ofbiotechnology companies or
concerns, or two bucketsthat it puts them in.
Right?
One is the one that I justdescribed that goes through an
administrative process, wherebycompanies are identified, they
have the opportunity to rebutthe, allegations and even, in
some cases to mitigate them.
There's a secondcategory of companies.
These are companies that theDepartment of Defense lists as
(33:10):
Chinese military companies thatare operating in the U.S. Those
companies are automaticallylabeled biotechnology
companies of concern.
And the prohibitions in thebill would apply to them.
they don't have anability to appeal that.
The DOD for 2025 includes BGIGenomics, Forensic Genomics
(33:31):
International, MGI, and so byextension, Complete Genomics.
And Shanghai OrigincellBiological Cryo Equipment Co.
Jeff Cranmer (33:40):
and of course, speaking of, uh, you know,
companies like WuXi AppTec,WuXi Biologics, MGI, Complete
Genomics . the other, companiesthat were affected by the bill
were US biotechs who were leftto scramble to figure out an
alternative to the servicesof Global CDMOs, as those
companies provide a broadrange of, services, resources
(34:04):
to thousands of company inthe west and and the east.
So, Steve, I'm curious,what's the likely impact?
Of this bill and,grandfathering,
how will that work?
Steve Usdin (34:16):
Okay, so first the impact the bill as as it's
been introduced, and again,one, we don't know whether
it's gonna be enacted andtwo, we don't know whether
if it is enacted, it will bechanged between now and then.
But as it's drafted now, itlooks to me like it would
prevent NIH grants to anyof the companies that are
considered to be biotechnologycompanies of concern.
(34:38):
It would prevent theVeterans Administration from
purchasing drugs that weremanufactured, as a result
of ties to the biotechnologycompanies of concern.
And it would probably preventMedicaid from purchasing
those kinds of drugs.
It probably wouldn't haveany impact on Medicare.
Okay.
So that's impact.
(34:58):
There's a timeline.
It's complicated.
Within one year ofenactment of the law.
The OMB Director, the Officeof Management and Budget
director, has to publish aninitial list of biotechnology
companies of concern.
That list is generated inconsultation with a bunch of
other, government departments.
Within 180 days of thepublication of that list,
(35:20):
OMB has to publish guidancefor executive agencies
on how to implement it.
Within a year of the publicationof that guidance, the Federal
Acquisition Regulatory Councilmust update, acquisition
laws to incorporate thoserequirements for companies
that are on the DOD list ofChinese military companies
operating the United States.
The prohibitions ongovernment contracts and
(35:41):
grants take effect 60 daysafter federal acquisition
regulatory, changes are made.
For companies that aredesignated as of concern
using the processes ledby OMB, the prohibitions
would take effect 180 daysafter the far is revised.
But as you mentioned,grandfathering, the amendment
(36:02):
includes a five-year grandfatherclause starting from the
time of the FAR revisions forthose companies that OMB has
designated as biotechnologycompanies of concern.
My reading of it isthat it doesn't apply.
The grandfathering doesn'tapply to the companies
that are on the DOD list ofChinese military companies.
Now, if all of this hasn'tgotten you really confused,
(36:25):
you're really very good atfollowing my voice, I would
suggest that you go and lookat the story that I wrote
because it's all spelledout in there and it's a lot
easier to understand when yousee it in black and white.
Jeff Cranmer (36:35):
And I'll drop a link, in the show notes.
It'll also be available,at BioCentury podcast.com.
And of course, subs can,uh, just find it in their
usual spot where you find,uh, things from Mr. Den.
All right, Steve,enjoy your vacation.
We'll see you soon.
Steve Usdin (36:52):
A lot.
Jeff Cranmer (36:53):
All righty.
That is it for this week'sBioCentury this week podcast.
but we'll be having a specialepisode focused on China
and East West deals, howthey're changing, what's
happening in the Hong Kong.
Stock market.
We'll have, a consultant oncross border deals, Ji Li.
(37:16):
we'll have Mike Patten fromtop deal maker, top East-West
deal maker, Harbour Biomed,and of course, Franck Le Deu.
One of the big names at McKinseyin Asia, who's been on the
pod quite a few times before.
And we'll have a classic rewindepisode of the BioCentury Show,
(37:38):
available on podcast only.
David Altshuler from Vertex.
He's the CSO.
Uh, the company announcedthat he would be retiring
next year, so we thoughtit would be a great time to
revisit his conversation with.
Simone, which, uh,took place in March.
He told us all about,his lifelong, fanboy
(37:59):
status of Doug Flutie.
he has a box of Flutie Flakeson his bookshelf behind him,
and he is, uh, very happyto talk to you about that.
And, uh, Simone pressedhim on that a little bit.
And the BioCentury showwill return with its,
Latest new episode.
Annalisa Jenkins.
Simone, what'd y'all talk about?
Simone Fishburn (38:19):
We talked about the state of U.K. biotech.
We talked about the incoming.
Well kind of already wouldcome in and new head of MHRA,
the U.K. regulator who, uh,BioCentury we'll be talking to
soon, and the U.K. government'splan for creating life sciences
(38:40):
as part of the cornerstoneof its life strategy.
Stephen Hansen, of course,has written about this in
biotech, Annalisa and I talkedabout why would this time
be different from others andis it different from others.
and we just shut thebreeze about a few things.
Jeff Cranmer (38:55):
Excellent.
Well look out for that.
That'll be coming outin the third week of
August, for tuning in.
If you like what you'rehearing, please, Give us
a thumbs up or whatever wehave on the on the site.
Leave us a comment,drop us a question.
We'd love to hear from you.
And we appreciate Kendall SquareOrchestra, which produces the
(39:15):
music for all of Bios podcasts.
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