Ep. 311 - The Asia Deals Landscape, U.K. Biotech & More

This transcript is auto-generated by AI and may contain inaccuracies. For authoritative information, please consult the original audio.
Alanna Farro:
[00:00:00] BioCentury this week is brought to you by IQVIA Biotech. For biotech companies striving to bring innovative therapies to market and maximize patient impact, IQVIA. Biotech is the trusted CRO of choice backed by 25 years of unparalleled experience and deep therapeutic expertise. Our full service clinical development solutions are purpose-built to accelerate success.
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Jeff Cranmer:
another day, another mega deal between Western and China. Biopharmas. We'll discuss JSU Hung Raise deal for 12 assets with GSK [00:01:00] on the latest BioCentury this week podcast, GSK is a prime example of how. Western players have begun to recognize the innovation and opportunities being fostered in China and how it is no longer just about fast followers in China, We'll take a deep dive into the deal landscape in China and beyond in what is drawing more and more Western [00:01:30] companies. Plus a look at Steve Bates, the CEO of the U.K.
Trade Association, BIA, and what his role has been in building the U.K. biotech hub and why wanna be biotech hubs around the world should pay attention to what the U.K. has fostered. Over the past decade and Vinne Prasad, he's [00:02:00] your man overseeing FDA's new priority voucher program. What companies need to know about the Commissioner's National Priority Voucher Pilot program? more shoes. Drop at Sarepta. We'll catch you up from last week's pod. And finally, up. Lots to talk about this week.
I know it's, it's summer, but It was a good week for biotech VC funds as Brandon Capital and Ellos [00:02:30] Stacia's Omega funds raise new vehicles. I'm Jeff Cranmer and joining me today on the BioCentury Podcast are my colleagues.
Simone Fishburn:
Simon Fishburn, editor in chief.
Paull Bonanos:
Paul Bonanos, director of Biopharma Intelligence.
Steve Usdin:
And Steve Oden, Washington editor.
Jeff Cranmer:
Okay. Simone. Well, we just dropped your big analysis into deals among Western and Asia biotechs. It's a sweet, downloadable, PDF deck. [00:03:00] And to put an exclamation point on it, today, we have, Jsu Unre partnering with GSK, jsu. Unre is, uh, has been around for a long time. generics player. originally just a generics player.
they've long had ambitions, to globalize. They, also have become quite a player in innovative medicines. You, we've talked a lot about the NewCo model here. [00:03:30] they are behind, a few of those deals today we have them, licensing, what, GSK believes is a best in class PDE three four inhibitor that's in development for COPD plus an additional 11 programs.
we'll be writing up this deal, for BioCentury. Simone, how do you see, this deal? $500 million up front? one thing that also caught. My [00:04:00] eye, uh, royalties. We didn't used to see a lot of royalties in these China deals. To me, it suggests that maybe, China biotechs, are getting a little more leverage now that, uh, a lot of Western companies are knocking on their doors.
Simone, curious how you see, this deal kind of reflecting the various trends that you, dug into in your analysis.
Simone Fishburn:
Jeff, thank you for that. Well, I have to say on a very personal level, you know, we published our analysis, last week and this announcement came out [00:04:30] today, and I'm a little bit secretly pleased that it didn't come out beforehand because this $12 billion potential deal value would've messed all my charts up.
And so, but, but at the, and that's what I care about, right? How long does it take me to make these charts right? But at the same time, it taps into. Several of these themes. So this deal kind of encapsulates this analysis that I did in lots of ways and on steroids. one of [00:05:00] them that you just referred to is deal terms and the ability of the seller, the licenseor, to command significant deal terms and values.
And you talked about that in terms of royalties. So I don't have all the royalties for all the deals, but let me just, encapsulate this. Our analysis went back to the beginning of 2023 and we found just shy of 200 deals in that time involving a [00:05:30] western. Licensee that could have been a biotech or a farmer and a Asia based licenseor. So seller. obviously most of those were from China. you talk about NewCo and they are significant, but NewCo were only 14 of the deals. So there was like a lot of deals that were not NewCo in that time. and what we saw, like this year, there's a bunch of obesity deals, for example, that became a trend this [00:06:00] year and they are commanding significant value.
So it's certainly an accelerating pace Accelerating deal values or potential deal values because, you know, it's unlikely that everything gets paid for in all of these deal values, and many of them don't disclose the terms. But we are seeing sort of very, very significant deal terms and More than half of those that did disclose deal terms were billion dollar plus deals and another 18% were $2 billion plus [00:06:30] deals. yeah, this really, as I said, taps that trend. In this case, the buyer was a farmer, was GSK, which is done, I think, rather, a lot of deals. They're number two on our leaderboard after AstraZeneca.
But what I thought was very significant actually across the board was the number of deals that had a biotech licensee, so biotechs in the west, licensing assets from innovators in Asia. I'm gonna come back to that in a minute 'cause I just wanted [00:07:00] to talk about one more thing you talked about, which is innovation.
Right? So we are really seeing, you know, and in fact you say they started out as a, Generics company. Well, I think a lot of people still hang on to this idea that it is me toos or fast followers in China, but actually we had something like north of 40 deals that were potential first in class assets.
I know they've positioned this one as a potential best in class, and so I think the idea that China's not gonna be a first [00:07:30] order innovator is completely out of date. I wanna take one thing to Steve from the analysis though, and ask him, because. When I looked at the timeline of deals from the beginning of 2023 to now, you really saw that last year in 2024, there was this kind of chilling that a total slowdown of deal making, both from pharmas and from us biotechs, after the bio secure bill was introduced.
And then when that seemed to be [00:08:00] not a thing, which is roughly the same time as the US election deal flow, I mean, deal flow started to pick up a little bit before that, and then it really started to take off. Now I think, Steve, you've talked about the fact that on this podcast, you've talked about the fact that really, you know, there's still an overhang.
There's still a sort of a lot of potential. Geopolitical risk and issues between the US and China, and yet the deal making seems to think that that's not going to happen [00:08:30] or either have built that risk in. How do you think about that?
Steve Usdin:
it's unpredictable. there isn't anything that I'm aware of that's moving through Congress Now that's similar to Bio Secure. there's a, a deep seated sense, that the United States advantage in life sciences is slipping away. and there's also a sense, a growing sense. That the life sciences and, biomedicine in particular are what people in Congress call a national security imperative. that's [00:09:00] interpreted by the Trump administration largely to mean that they want to see manufacturing happening in the United States. And I'm not sure how much that's going to extend. to sourcing innovation in China, in, you know, in acquiring, assets there. actually don't see anything that's happening in Washington that's going to interrupt, this model.
And, you know, honestly looking at it, it, it reminds me a lot. It's like the relationship between Europe and the United States starting in the late eighties and 19, early [00:09:30] 1990s. When, you know, the, basically the baton for innovation and, new technologies and so on, you know, got passed to the United States.
The United States became the, uh, the best place in the world to do, drug development and to do innovation. So I think that there is a, there's a, an angst, there's a concern in Washington, in the administration, in Congress that that's happening.
That things are slipping, slipping away from the United States and, heading toward China. I'm not sure that there's a real clear [00:10:00] sense of what to do about it. I mean, my, my personal view, it's pretty obvious what to do about it. What the United States needs to do is, to redouble, the things that it was doing in the 1990s and the early two thousands that made the United States the best place to do, r and d, you know, to invest more heavily in basic research, to have, the world's, uh, best regulatory agency to take steps that, don't inhibit, um, capital formation, things like that. I'm not sure that those things are happening. I'm sure that they're, they're not happening. and, and that's what really should be happening in [00:10:30] response to this. though, in terms of, um, trying to make a disconnect between the United States, and China in terms of, investing in r and d, I don't think that there's a, as big a mood for that now as there was last year.
I think that that the moment for that, for Bio Secure and things like that seems to have pass.
Simone Fishburn:
thanks Steve. that, that I think makes a lot of sense. I think there's another part of this, I wanna sort of bring it a little bit back to today's deal that was announced. So, I wanna emphasize that. 63% of the deals involved a biotech and [00:11:00] not a farmer. We tend to think of the bio pharmas as being the ones that are licensing these things, but this is actually all the way down. This tuttles all the way down, right? This is actually biotechs in the west that are, doing the, the licensing.
So two thirds of the deals gave over worldwide rights. in about a third of the deals, or 29% actually, there were worldwide X Asia rates, meaning that in those cases a lot of the innovator companies, were retaining [00:11:30] rights to commercialize the drug in their own territory. And so I think that, I'm not really sure how.
You know, people are thinking about the geopolitics in terms of where they commercialize their drugs. The other thing that comes back to what you were saying about innovation engine, Steve, Today's deal is what we would classify as an eye and ideal immunity and inflammation, and that is something where there's been a lot of innovation.
So, you know, cancer's long been a mainstay in [00:12:00] China, but now we are seeing though, that you can really see when you look at the pace of deals. At the beginning in 2023, there weren't that many iron ideals. There's more and more and more now, they just pointed out. Obesity deals really just picked up in the last few months, and so any new area, if you think neuro is gonna be big.
my bet would be that China would start innovating in that area as well. And so, you know, Steve, to your point about, retaining primacy, of innovation, it's very clear that any of these new [00:12:30] areas, just even from the deals, we're not even look sort of talking about new co-creation and other things.
Just from the deals alone. You can really see China becoming big players there. Jeff, how do you think about that?
Jeff Cranmer:
Yeah, I, I think that's one thing that really, uh, jumped out to me about your analysis is. just how the innovators in China in particular are able to enter hot areas fast and quickly reap the rewards. And, on the other side of the equation for a Western company, if you're looking to catch up [00:13:00] quickly, partner with a China company, you'll be able to tap into, an asset and quickly, catch up.
Or, you know, there's the example of ESO Biotech. we did a big story on them. the CEO came to our, our, Bio Equity Europe, conference to talk about his experience launched with like a $14 million seed round, ran trials in China.
And taken out in a matter of years. that is something that, western companies should, really investigate. [00:13:30] and Simone, antibodies, that's long been the prowess. can you talk a little bit about the modalities you're seeing in these deals?
Simone Fishburn:
Yeah, I, I thought this was interesting. So, you know, the vast majority, about 90, 85, 90% of the deals are really for a product rather than a technology. Okay. An enabling technology. And, you know, more than half of the deals are about antibodies or antibody derivatives. But what's really interesting to me is when you think about [00:14:00] new modalities, so there were more deals for bispecific antibodies than for.
Standard monoclonals, like 50% more deals for for that. And there were a DC deals actually more a DC deals than monoclonal antibodies and bispecific ADCs. And so, China really has this sort of backbone of, expertise in antibody technologies and antibody engineering. I mean, there was still a lot of small molecules.
I don't deals, I don't, I don't wanna [00:14:30] suggest that they won't. But I'm gonna go back to what we said before. If you think that another area is going to be big, be it gene therapy or molecular glues or something, my bet would be on people there being able to, come up and innovate and compete and learn fast.
and I think, going into this, I've sometimes asked, well, okay, so they're good at antibodies and they can create innovative products, let's say by a new modality. So, if you are thinking about somewhat whether a small molecule [00:15:00] dominates and they'd come in with an antibody or a bispecific.
But actually what we're also seeing is a, a fair amount of target risk. So there are a bunch of new targets or deals where this is the only target in our database, or they are the furthest ahead against that target. So both the buyers and the sellers are willing to take target risk. This is not just antibodies are big, Jeff is what I'm saying, but it's not just an antibody play.
There's a lot of biology, and pathway analysis that's [00:15:30] going in there as well.
Jeff Cranmer:
well, deep, deep Analysis by Simone. I'll drop a link into the show notes and This is an analysis that we're going to update, as we get into the fall, for our China Healthcare Summit. BioCentury and Bay Helix present the summit.
It's our 12th. It will be in Shanghai, October 22nd through the 24th. McKinsey once again, returning as our thought partner, will be digging [00:16:00] into this analysis and it'll be a forum for, western companies to come be a presenting company. Get on stage, tell your story. Two potential partners in Asia.
and likewise, China companies, uh, will have an opportunity, also to get on stage. I am currently recruiting companies, so reach out to me directly if you're interested in learning more, and we'll have loads of panels, digging into, the latest, most important topics. in [00:16:30] China and Asia Biotech.
the time to meet in China is now. Join us in Shanghai. There's my plug. And we'll go to a quick break and we'll come back and we will talk about Steve Bates in the U.K. We Biotech hub. We'll talk about the new, priority voucher program out of FDA, as well as the latest shoes to drop. In the Sarepta situation?
Alanna Farro:
By Century this week is brought to you by the 12th China Healthcare Summit in [00:17:00] Shanghai. From in-licensing to New cos cross-border deals from Asia are transforming global biopharma. Meet top decision makers and investors at the 12th China Healthcare Summit. To explore emerging opportunities and tackle key challenges in this rapidly evolving landscape. Join us in Shanghai, October 22nd to 24.
To get a firsthand look at China's dynamic life sciences ecosystem, register and learn more at BioCentury China [00:17:30] summit.com.
Jeff Cranmer:
we are back and we're headed to the U.K. uh, place close to your heart, Simone. and not just for the tennis.
Simone Fishburn:
Now for the football.
Jeff Cranmer:
now for the football too. Yeah, it's, uh, tell us a little bit about the football. I, I saw a few highlights on my screen yesterday.
Simone Fishburn:
Ah, the girl's done well there, you know, leave it to the women. They will bring it home.
Jeff Cranmer:
Hmm. but we have a man to discuss who, uh, did indeed bring it home? Steve. [00:18:00] Bates, he is the, uh, longtime, CEO of the UK's, BIA, he was there for I think over 10 years. and he is moving on to the Office of Life Sciences, a newly created U.K. government position. Simone, you've been following, uh, what Steve's been doing.
what, stands out to you?
Simone Fishburn:
Well, okay, first of all, Jeff, I wanna say that English people do not really like saying [00:18:30] unqualified good things about, especially other English people. I am one of those people, and all the people I spoke to would normally fall into that category. So when you ask people about, you know, an individual and their contribution and all you hear are positive things and you have people telling you positive things, even when you don't ask them, you're like, this is a pretty unusual situation.
So, because I've said all these things about Steve Bates, there is a, Law of equilibrium in the universe that I have to counter that with something, right? [00:19:00] So I will go into the good things, but I will just say it's not entirely a surprise to see Steve Bates move on. He's done great things at BIA, but he has been there a long time and you know, a refresh is sometimes good.
but I think that, to be honest, and Steve, I'm gonna come to you in a minute. You know I am about, bio. the person who's there very early on it, it's a hard act to follow and, It's a pretty difficult job to do well, and you know, as, as an area grows, you inevitably get more critics.
[00:19:30] But basically I think if you look back over the, period that Steve Bates has been there when he joined, there were lots of sort of competing little biotech or little life science organizations and he really unified them, galvanized them. one person said to me, you know, he really created the idea that there's a biotech sector in the U.K.
And after that, the area, the, the scene has grown. I mean, we've done chart after chart after chart. They're way ahead of the European [00:20:00] peers in the U.K. for company formation and series A rounds and just really, especially on the early stage, none of our European friends will be happy that I've said that, but it is true.
what did he do right? What did he do to contribute to any of this? Well, there were just like a series of things that could have been body blows for the U.K. Not just Brexit, but the collapse of the Woodford Empire, the. Pandemic, the Silicon Valley Bank collapse, even the downward market.
[00:20:30] And he really two or three times stepped in very, very fast. he did it with the HSBC rescue of Silicon Valley Bank. He did it, in the pandemic, bringing people together even before Cape Bingham took over. And she's the one who told me that. So, um, there's really just a lot of appreciation for what he's done in that ecosystem.
And Steve, you know, Carl Feldbaum was probably. The closest thing I could think of because [00:21:00] he was really there at the beginning of bio, maybe, I don't know if the organizations were a similar size back then you know, BioCentury, I looked at it, BioCentury at the times wrote, here are all the things as he moved on, here are all the things that bio needs to do.
And the, you know, and they pick the next one. And I would argue this many years later, that bio doesn't have the. Status and standing among its community that it had then, and I don't know if, if you see parallels with Carl fba, if you've got [00:21:30] thoughts about it.
Steve Usdin:
Well, there, there, there are some. Of course, you know the interesting thing, what you said is there were these. Little, organizations, trade associations, and nobody represented the industry as a whole. That was very much the, the situation in the United States. There were two competing, trade associations representing the biotech industry.
One smaller companies, one larger companies, they merged together and they created bio. So there's that similarity. But I also think there's a similarity that, Carl Felba, he, he was remarkable and he was, he was a good friend of mine, still is. He also had a [00:22:00] benefit though, which is that most of the biotech companies for most of the time that he was heading Bio, were not profitable and they weren't large companies. Everybody loves the underdog. Right? They were definitely the underdogs. Now, you know, the industry has exploded, since then. And, it's no longer the cute little puppy, you know, it's, it's, it's a big dog. and so that. Uh, some of the, appreciation for the industry, some of the, kind of the, [00:22:30] benefit of the doubt that it got, when it was much smaller, it doesn't enjoy that anymore.
So it's a much, much more difficult job, to be bio, to run bio, than it was. when Carl was doing it, but also like Steve Bates, you know, Carl he was the face of biotech in the United States. nobody wrote an article, would've considered about writing an article in the, in the press or, um, talking about biotech on tv.
without consulting him, he really was. Kind of personified the industry, which again, was much smaller at the time. And, [00:23:00] for that reason, considered, more lovable politically and and in terms of public opinion than it is now.
Simone Fishburn:
Quick question there. And certainly the u the UK's, companies are still in the lovable, not so yet profitable stage. The puppy, the puppy, uh, the puppy love, should we call it? I thought about this a fair amount, and I think you could see this with world leaders as one. So you know, how much do you think is down to the individual?
I'm not saying that, you know, Cole Felbam would have it easy today or be able to do the same thing 'cause there are [00:23:30] some structural differences. But as people look to the next one, I mean, how much is it about an absolute individual and their ability to make a difference? And to me, that just seems to be something that Bates has done.
He's just. Worked out a way which not many people can do to talk both to government and to investors and to small companies, and even to large companies, and carry credibility with them. And I don't even know how you search for that when you look for the next person. So what do, to what degree do you think [00:24:00] that Feldbaum as an individual was really influential in establishing the biotech community?
Steve Usdin:
Oh, I think tremendously. You know, as you're saying with, with Steve Vates, he had, credibility, with everyone. and he had a. Ability to talk to people in the, in the spheres in government and science and business and, and so on like that. So I, I do think a lot of it comes down to the individual and I think it's like a lot of things in life Also, I think that the first [00:24:30] impression, of whoever gets into a job like that. Tends to define them in people's minds, and it's really hard to move people's opinion, especially to move people's opinion in a favorable direction once they've, made up their mind about somebody. So I think that the, the critical thing in these kind of jobs is to find somebody who embodies the values of the members of the trade association and can communicate them in ways that the public and that, politicians find credible, and they have self-confidence and the [00:25:00] ability to make that impression right out of the box, right out of the get go because they need to do that.
the. first impressions that people are gonna have of whoever, takes over after, Steve Bates is really, likely to define that person going forward for a long time.
Jeff Cranmer:
Okay, well, you can meet some of these lovable, puppies at Bio. Entries, grand rounds, which will be in Cambridge September 17th, 19th. we'll have many, [00:25:30] young U.K. biotechs, presenting, and you'll also be able to find out whether Simone can somehow summon the energy to say something nice about Sean Grady or perhaps Kate Bingham, or whether she used it all up.
On Steve Bates. Okay. Vinne p is going to oversee, the new, voucher pilot program out of FDA, Steve. more details, release last week [00:26:00] and yet. still feel like we don't have a lot of details about this program. quickly, what did you learn and, and what's there still left to be clarified.
Steve Usdin:
So I, I don't think we're gonna get a lot of clarity on it. I think that's, that's built into it. Fundamentally, the way I think about this, it's called The commissioner's National Priority voucher, program, right? It is a reward. It's not an incentive, okay? An incentive causes decisions to be made or actions to be taken that wouldn't have happened the [00:26:30] absence of the incentive. For that to happen, you need to have predictability. You know that if you do something, say you invest in an ultra rare disease therapy, you'll get something, say a priority review voucher. The criteria for receiving the commissioner's voucher are extremely broad. There's no way to know in advance if a product or a company will receive one.
There's no decision that you can take as a CEO to make you more confident that you're gonna receive one. On the other hand, you can be pretty sure that there are things you could [00:27:00] do to reduce your chances of getting one, like criticizing the FDA Commissioner or the HHS secretary or the president. So that gets to another reason why I call this a reward rather than an incentive. The name says it, it's the commissioner's voucher. It's his personal discretion, which he has delegated to Vin a Psad to decide who gets this reward. And that's consistent with the view of the Trump administration on so many things, the way that the government's operating now. You know that that speeding up FDA reviews or [00:27:30] awarding NIH grants, they're gifts that are bestowed by individuals who are in power and can be withdrawn by individuals in power. One more element of this rant before I go on to, to, to what it is and what it isn't. You know, max Faber wrote a hundred years ago, he, he really, created the term bureaucracy and it wasn't considered pejorative.
The idea was that government officials should be subject to hierarchical authority, and they should adhere to formal rules and procedures. That way everybody's treated fairly [00:28:00] that way. Everything's done according to a logic that can be understood and advanced by the people who are subject to government. The essence of the commissioner's priority voucher is that McCarey or Prasad, they can prioritize a product. They can give a company an undesignated voucher that allows them to select a product for prioritization in the future. And the criteria is so broad, as I said, of the criteria is, is that a, a product has to be innovative and it has to be doing something important for public health. I think that [00:28:30] every CEO who's. Got a new, um, drug or biologic, a new medical product, thinks that they're doing something innovative that's gonna be good for public
Jeff Cranmer:
For unmet, medical needs.
Steve Usdin:
Yeah. So that, that's just about everything, right? so what are they gonna get for these vouchers? There's supposed to be a super fast review one to two months versus 10 to 12 months that happen now. That's gonna be speeded up by going, around the normal procedures and having a committee that's run by Prasad make very fast decisions. There's gonna be a [00:29:00] rolling review with the, CMC, and theoretically the labeling decisions made before the final clinical data packages submitted. We'll see how that really works in practice. If the reward is given early in the development process, there'll also be intense interaction between reviewers and sponsors that's intended to speed things along. It's called a voucher, but it can't be transferred or sold like a priority review voucher. It will though convey if a company or a product is acquired. One of the things that's important [00:29:30] to remember about this, it wasn't really highlighted in FDA's materials, is that they can give an undesignated voucher to a company. and if that company is acquired, the acquiring company would, get this un designated voucher. Unlike all other FDA expedited pathways, this one can be awarded based on economic criteria. Including if a company reduces us prices to match European prices, or if it invests in domestic manufacturing, that puts FDA in a place where it's never been before and it raises a [00:30:00] lot of questions, how's it going to determine what the US and the European prices are? Is it gonna use net? Is it gonna use gross?
It's considered discounts? Is it gonna consider rebates? What happens if the US price has increased after the voucher has been awarded? And then there's the question of whether the awards will be limited to us companies or not. That's what McCarey said. when it was first, uh, announced, he said this was gonna be for US companies. And I asked HHS at the time about it. The HHS press Secretary confirmed to me. She said, it's really gonna be [00:30:30] just for us companies, but that isn't spelled out in the information that was released last week. So it isn't clear whether it's gonna be US companies or not, but here's a bet.
There's not gonna be any Chinese companies getting this.
Jeff Cranmer:
All right. Thanks for that, Steve. the details, as they are, you can read about them in Steve's story, up to five. You can apply now, apparently, you have 350 words to describe why you should be getting this program, and we'll be looking out [00:31:00] for, which company gets the first one. All right. Uh, and we have Paul, now he is been waiting patiently, to tell us about some of these, venture funds that emerged last week.
Paul, I know, uh, you, you got the chance to speak with Otello, I believe, and our colleague Steven Hanson spoke with, Brandon Capital. what did we learn about these funds?
Paull Bonanos:
Sure. Yeah. So two new funds. Um, I can tell you about Brandon Capital Partners first, shall I? that firm is headquartered in [00:31:30] Melbourne, Australia. Uh, I think it's, it's gotta be the biggest and most prolific life sciences firm, in that country and really that part of the world. and they've got a new sixth fund.
It's closed at 9 million Australian dollars. which is in the 2 85 US range, 285 million. in their case it's much bigger than their last fund. 75% bigger in fact, fund six compared to fund five. And you know, we've seen and we've talked about here, on this podcast about how some VCs have been going bigger and some have shied away from bigger [00:32:00] funds.
in this case, Brandon has gone larger. part of that may be due to bigger opportunities in Australia and New Zealand. We wrote had a, a story a few years ago about, the forces that have helped catalyze the biotech ecosystems in that part of the world. government investment is one thing, and when Steven spoke with them last week, the partner there noted that there are a lot of global companies that are doing clinical research in Australia.
and also research in that country has been, presenting opportunities for company creation. this is a bet on [00:32:30] that. and another thing about Brandon is that it has offices in the US and Europe beyond, um, it's headquarters in Melbourne, and I think they have an office in Sydney as well.
they do plenty of deals away from down under, uh, I think it's about 50 50. but also once the firm has backed an Australian company, those beachhead elsewhere and their contacts with VCs all over, help those companies draw capital from European sources and US sources, which really goes a long way to building, a startup and preparing it for its future, [00:33:00] especially if it's in a relatively far-flung part of the world.
like Australia?
Jeff Cranmer:
How about Omega funds? It's their eighth fund. changing anything up with strategy. I know a lot of VCs are going bigger or smaller given the current environment.
Paull Bonanos:
Yeah. Not, not that different in and not that different in size. Uh, we mentioned going bigger or not. In this case, it is just about the same size as the previous fund. It came in 647 million compared with the last fund at six 50. I did speak with Otello, as you mentioned. That's Otello, [00:33:30] Stacia at Omega.
he's of course been doing this for decades. and he said that the firm aimed higher this time, so they set their target at 600 million, whereas the previous fund had been targeting 500 million. They're both oversubscribed just a bit less. So this time. so Omega will have more dry powder for deals.
They're a multi-stage firm. They do company creation, they do, uh, kind of classical series a, b. C deals and then also later stage deals, including public companies. And one [00:34:00] thing I thought was interesting that he brought up, he mentioned the possibility that in some cases the time may be right, for some public companies and some of its public investments to be part of syndicates that take the company's private.
to paraphrase his language, he said certain companies, could benefit from having a private share price instead of a public one. I believe you used the phrase a, a pipe, but with board seats, if I remember correctly. So they may be looking at some deals like that. That's symptomatic of the environment we're in. either way, yes, [00:34:30] two new funds, hundreds of millions of dollars to go to life sciences companies. Brandon has made a few investments already. They're named in our story. from their new fund.
And we'll be watching for.
Jeff Cranmer:
Yeah. And.
Simone Fishburn:
So just a note there, Jeff. I mean, you know, companies are really hurting right now. I think it's just great news to know that VCs can still raise money in these times. Good VCs, that have backed successful companies, both of those firms. And, I think that it's, just welcome news, I guess, that the money is [00:35:00] starting to flow.
Jeff Cranmer:
Yeah, it is definitely Well, thanks for that, Paul. Uh, links to your stories in the show notes. We'll also have a story this week on one of the largest Japanese focused.
Biotech VC funds. I spoke with Ken Horn, who leads the fund and has become really a bridge between the West and Japan, along with his colleagues at On Ventures and Ventures. so look out for that. all righty. Last, but [00:35:30] certainly not least, uh, Sarepta. It is still in the spotlight and unfortunately not for the right reasons.
Steve, what did you learn since last week's pod?
Steve Usdin:
always. Is a lot of drama around, Sarepta 6:00 PM on Friday, FDA put out a press release. They announced that they were investigating a death of a patient in a trial of Avius. that's, uh, Sarepta's, DMD gene Therapy. It's kind of strange. They didn't [00:36:00] really say anything else about it. I dug around about it.
Other, reporters, dug around about it. we found out that it was an 8-year-old boy in Brazil who had received the, uh, DMD patient who had received, the gene therapy who died from influenza. The company Sarepta and Roche, distributes, the Sarepta's gene therapy, DMD gene therapy outside the United States.
Both said that the physician who treated the boy said that the, death was not related to the gene therapy. Patient advocates who I spoke with [00:36:30] were concerned. They said, a death for influenza in the presence of an immunosuppressant, which is the way that. They understand, the death was recorded, gives them something to be concerned about, but the advocates are even more concerned.
They're really extraordinarily upset. They're upset with FDA, they're upset with Sarepta. They feel that, uh, the leaks that came out of, FDA last week, were very, very unhelpful and disturbing for the companies. The, kind of, snap judgment that FDA had on the one hand, they knew [00:37:00] about the third death, in the limb girdle muscular dystrophy trial for a couple of weeks and did nothing about it.
And then it was reported in the media starting with BioCentury, and then all of a sudden FDA slams the brakes, not only on the non-ambulatory population, but the entire population, the gene therapy.
Simone Fishburn:
Steve. Well, going back to the vein of needing to redress good things I may have said before with some negative things, I have had feedback that we were not harsh enough on [00:37:30] the company leadership.
in our previous podcast, and I'm wondering if you wanna weigh in on, you know, our perspective perhaps, but also what you are hearing. we've seen investors say, well, the companies, you know, maybe I think this and this about the particular product, but. They were very annoyed some of the things we read with the company leadership, but not disclosing that other death under the guise that it wasn't materially relevant.
What are you hearing also from the patient community [00:38:00] about their response to the company's leadership?
Steve Usdin:
So the patients are saying the same thing in this case as the investors, which is that they, have lost all confidence in the integrity of Doug Ingram to put a, a name on it, the, the CEO of Sarepta. and the company itself, they believe that, The third death of a non-ambulatory patient in the limb girdle, trial should have been disclosed promptly. To the public and to the patient community. And they also believe that the comments that were made after, [00:38:30] this came out, from the company were extraordinarily in insensitive saying that this is basically kind of minimizing the significance of these deaths and saying that this is a very rare, fatal event and it's something that, you know, could have been expected and so on. and it certainly isn't the way that it feels to the, uh, mothers of these boys and the people who know the families. they're very upset about that. And they also feel that the, um, the lack of disclosure, from the company has created a backlash, which, on the [00:39:00] one hand is going to prevent them from getting access for their ambulatory patients.
So I heard from advocates who know other advocates who have. Two children one child has received, sarepta gene therapy. the parents know it's not a magic cure. They know it's not going to, make the disease go away, but they believe that some of the boys are benefiting from it, dramatically. And they're extraordinarily upset now by the prospect of losing access to it entirely. Which they attribute to the [00:39:30] company's lack of, disclosure, about things that they should have talked about and that, so this backlash that's making it possible. And again, their parents have two children.
One child, has received the gene therapy. The parents believe that that child has benefited from it. They have another child who they were expecting was going to be able to get, um, the gene therapy. And now it looks like that may not be possible, and they're extraordinarily upset about that.
Jeff Cranmer:
Understandable, Steve. Uh, what do the parents think should happen next?
Steve Usdin:
[00:40:00] what the parents think should happen next. And I, I think that they're entirely right, is that there should be. some way of convening the scientific community, the regulators, academic researchers, researchers from companies including from Sarepta, to talk about what's happened, to get a consensus around what the risk factors are here, and to understand going forward what, what research needs to be done, what analyses need to be done to characterize the safety. [00:40:30] Of, this gene therapy and other gene therapies for DMD and for other diseases to be able to characterize that, safety. What is the research that needs to be done to improve the safety of those therapies? And we've talked about that on this podcast and I've talked about it, in articles. So what they really want is they want, the whole community to come together and plot a path forward. And to do it in a transparent way, not through leaks, not through abrupt regulatory, actions that don't seem to be [00:41:00] hinged on, evidence. And really to, come up with a, an agreement on a, on a path forward that's going to really characterize the safety and the efficacy, improve the safety, and improve the efficacy to the extent that that can be done. and to do it and move forward. The thing that they're worried about the most is that regulators and investors will just abandon them. They felt like they were on the verge of getting therapies that would really help their children, and now they feel like they're on [00:41:30] the verge of being abandoned.
Jeff Cranmer:
Alright, Steve, thanks for that update. obviously, tough words to digest, my heart certainly goes out to the patient community, very difficult time. we'll continue to follow this and, uh, hopefully there will be, some progress made in terms of. Getting the right people in the room to discuss next steps.
You've been listening to the BioCentury this week podcast. thank you Steve Simone, and Paul. And as always, thanks [00:42:00] to our production director Travis and of course, Kendall Square Orchestra, which provides the music for BioCentury Podcast. Would like to thank IQVIA Biotech for supporting the bio this week podcast. To learn more about how IQVIA Biotech can help you turn your vision into venture capital. Go to IQVIA biotech.com/visionaries. [00:42:30]