Ep. 8 - Financing Flurry & Purchasing Pools

[00:00:00] Simone Fishburn: Hello and welcome to this week's edition of BioCentury This Week. I'm Simone Fishburn, Editor in Chief, and I'm joined today by...
[00:00:08] Steve Usdin: Steve Usdin, Washington editor.
[00:00:10]Jeff Cranmer: And Jeff Cranmer, executive editor.
[00:00:12]Simone Fishburn: So this week, busy week in biotech and national news, but we're going to start by looking at biotechs and the economy. So Jeff, there seems to be only bad news on unemployment and sort of macro levels of the economy, but biotech is really telling a different story. Tell us a little bit about what we're seeing in terms of IPOs and secondaries.
[00:00:35] Jeff Cranmer: Yes, Simone, you're absolutely right.  Last week in particular was a real race to the end of a great May for secondary financings. We saw a massive $9 billion in secondaries raised for life sciences companies, which was more than the four previous months combined.
[00:00:56]Simone Fishburn: And that we talking about NASDAQ here?
[00:00:58] Jeff Cranmer: Mostly NASDAQ -listed companies.
[00:01:01] Simone Fishburn: So, any standouts, among those companies?
[00:01:05] Jeff Cranmer: Definitely. In fact, in the last two weeks, we've seen the five biggest secondaries of the year. The real standout was Moderna, which has captured the spotlight lately, as it's one of the leading companies developing a vaccine against COVID-19. It raised $1.3 billion in its second secondary of the year. That came about two months after it raised over $500 million in secondary. The other companies that, raised quite a bit of money. All where I think on the back of catalysts. There was Argenx, MyoKardia, both of which had positive data. Bluebird and Iovance, they all raised secondaries north of $500 million.
[00:01:55] Steve Usdin: So Jeff, I'm curious on Moderna, are people piling money into it in the anticipation that the COVID-19 vaccine is going to be highly profitable, or is it that progress and the COVID-19 vaccine suggests that their whole platform is kind of validating their platform.
[00:02:12] Jeff Cranmer: That's a great question, Steve. And I know that the company has really caught the eye of retail investors.  But we're starting to see the first data this year that I think does validate their platform.
[00:02:25]Simone Fishburn: Right? I think, Steve, that that's gotta be the case. I mean, what I was going to point out, Jeff, is that I think of the ones that you mentioned and the catalyst you mentioned, the only one that related to COVID was actually Moderna. Is that correct?
[00:02:30] Jeff Cranmer: Yes
[00:02:39] Simone Fishburn: The others are based on catalysts that are in their regular drug development pipelines, and so, you know, good for them.
[00:02:47]In Moderna's case, Steve, I think you're absolutely right to focus on that. I think it's a mix. I think that there's obviously a lot of hope bound up in their molecule, in their vaccine. But I also think that it's tremendously validating for their platform, which is a new platform, MRNa therapies and MRNa as a vaccine.
[00:03:07]And so I think that it will be a really interesting place to watch because, you know, we've talked a lot about the fact that we might need, and we'll get into that a little bit afterwards, we might need multiple vaccines, we might need therapies, but even if Moderna's vaccine is one of a slate of vaccines you could see that investors could see that as a validation of the technology. So it'd be interesting to see how much is actually bound up in their molecule getting to the finish line. So Jeff, what about some private financing? Does that look equally healthy?
[00:03:41]Jeff Cranmer: Yes, it definitely does. I mean, the one thing that really surprised me in early April, and I can't remember this happening the last decade or so, but we saw four funds -- venture funds -- of more than $800 million launch. There was Atlas, Flagship, and a few others, including Deerfield.
[00:04:04]So that was pretty impressive in terms of  stand out venture raises. Last week we saw the company that I know, Steve, you're closely watching,  raise a mega round, and that's AbCellera, which is flying a bit under the radar. They have a deal with Lilly and they raised about $105 million in a series B round.
[00:04:26] What are your thoughts on that company, Steve?
[00:04:28] Steve Usdin: Well, I find it really interesting because AbCellera, I think it is exemplifies two trends that people don't pay enough attention to. The first is the role of government, and in this case, DARPA, the U.S. military, in funding high risk, high reward, early stage technologies. And the second is the role of small biotechs in response to pandemics.
[00:04:53] So, we saw in Ebola, we saw, a little tiny biotech company that developed an Ebola vaccine that was picked up by Merck. And that had a tremendous impact. Here we're seeing this small company that very few people have heard about developing a monoclonal antibody against COVID19. It's the first one to get into the clinic.
[00:05:12] That's what they announced today. And they did it as part of a program that DARPA launched several years ago to develop exactly this, to develop pandemic responses.
[00:05:23]Simone Fishburn: That's true. And we actually did a piece on all of the things DARPA has funded, but I do appreciate your point about the small companies. I think it's a really important one that often gets overlooked because people look at the headlines of the Pharma because they often have to partner with Pharma to get it there.
[00:05:39] But, talking of small companies, Jeff, what about IPOs? I mean, this is how small companies that this is where they come from, right? They start and then they go public. What are we seeing on the IPO front?
[00:05:50] Jeff Cranmer: Well, this week in particular is expected to be the busiest  week for U.S. IPOs since February. Broadly speaking, Warner Music -- I know they're not in our space -- but they're expected to lead a group of four companies that could raise over $3 billion this week. In biotech, the one to watch is Legend.
[00:06:11] That's a company that has spun out of GenScript, a Chinese company, and it's very closely watched because of its partnership for a CAR T therapy with Johnson & Johnson. They revealed their financing plans last week. They're looking to raise $350 million on NASDAQ for a valuation of about $2.5 billion.
[00:06:39]The other companies coming out this week are a bit smaller. Lantern and Pliant are the other two, but the one to watch is definitely Legend.
[00:06:49]Simone Fishburn: So Steve, this helps me pivot to one of the other issues that I wanted to talk about this week.  Companies, biotech, pharmas, really, they all make money on the back of IP, but the world of COVID that's a really complicated landscape with the importance of getting molecules out there. So I know there was talk of a purchasing pool. Maybe you can tell us what the conversation was, and who's where in that debate.
[00:07:15] Steve Usdin: We did a webinar last week. One of the people on the webinar was Dr. Nicole Lurie, who is an advisor to the CEO of CEPI, and she's a former assistant secretary of health, the United States, whose responsibilities included pandemic response under the Obama administration. She said that there's a lot of discussion that's going on, a lot of work going on behind the scenes to create a purchasing pool that would allow countries to make advanced commitments for purchasing vaccines.
[00:07:43]They would make these commitments before anybody knows which vaccines are actually going to work, which gives them a little bit more leverage. So to make these commitments and an important thing to note about it is that it includes a component, a commitment to equitable global distribution, it's going to include commitments to subsidized or free vaccines for the world's poorest countries, and, equitable distribution, among other countries.
[00:08:11]The United States isn't likely to be part of it. We don't know whether China's going to be a part of it, but, European countries and certainly organizations in the United States like the Gates Foundation, will be part of it. It's likely to be announced this week. It could be announced, at the Gavi pledging event, on June 4th.
[00:08:30] Simone Fishburn: So a couple of questions, Steve. One is how meaningful is it going to be if the United States doesn't participate? Do you think that will create pressure for the U.S. to do so?
[00:08:40]Steve Usdin: No, I don't think it will create pressure for the United States to do so. I think that the, the U.S. government has been more proactive in investing in manufacturing, research, development, and especially manufacturing than anywhere else in the world. And the, the U.S. government seems to be taking the view that, you know, that they can manage without the rest of the world and that they have to assume that that's what they're going to do. They haven't really tipped their hand at all about what the U.S. policy will be about a distribution of vaccines to the U.S. population or populations around the world. This still could be very significant even without the United States because, there's a great deal of manufacturing and R&D happening outside the United States in Europe and in Asia and there's tremendous demand. There's going to be tremendous demand. Everybody in the world, potentially it's going to need access to a vaccine.
[00:09:29]Simone Fishburn: I want to go back to something we raised earlier, which is antibodies, there's a lot of talk always about vaccines, but we have written and talked about before the fact that the vaccine might actually not be the, the way out of this, may not get one antibody therapies to the first is going into the clinic today.
[00:09:48] Any chance, any reason to think that there might be sort of some kind of patent pool or something on non-vaccine kind of countermeasures.
[00:09:56] Steve Usdin: There's been discussion about it. The WHO, I had a meeting last week and created a patent pool, there are a lot of countries that expressed an interest in it. Again, the United States isn't, isn't one of them. Yeah. There was pushback from the companies, from the vaccine manufacturers in particular.
[00:10:16]Some of the therapeutics manufacturers who said that they don't see any reason for an IP -- for IP pooling-- for patent pooling, and it isn't clear that that's really the bottleneck that needs to be cleared in order to get massive distribution and access to therapies and vaccines.
[00:10:35] Jeff Cranmer: I think if I could just jump in here real quick. Some of these executives, I mean, we're talking about some of the top Pharmas, in the world GSK, AstraZeneca, Pfizer they had some pretty choice words, I think, the CEO of Pfizer called it nonsense and dangerous, to launch an IP pool.
[00:10:58] And, Emma Walmsley I think also, had some, pretty choice words, she noted that IP is fundamental to the biopharma industry. She said, I think to your point, Steve, there isn't enormous evidence that IP is a barrier.
[00:11:12]Simone Fishburn: And that's, Emma Walmsley who's the CEO of GSK, of course. So we're certainly seeing the top Pharmas, pushing back on that notion. It's going to be something that we'll have to continue to watch. Steve, I just want to end with one last note regarding the WHO and the U.S. pulling out of that.
[00:11:33]Do you have any comments on that?
[00:11:34] Steve Usdin: Yeah. Well, we can have a whole podcast about that. Stupid is the best word for it, nobody says that the WHO is perfect. But pulling out of it is, it's a self inflicted wound to the United States, and it's a devastating blow for the world's poor. It eliminates U.S. influence over the organization. The U.S. government has said that it's complaints about the WHO are that, countries that it doesn't view as allies have disproportionate influence.
[00:11:59]Well, withdrawing from the organization ensures that those countries will have even more influence over it and the U.S. will have none. It potentially disrupts global pandemic response and it's going to damage the WHO's work on others.
[00:12:11] The WHO has led the way in almost eradicating polio around the world. It's work, fighting malaria, AIDS, many of the diseases for much of the world, the who is the only regulatory agency and the only public health agency that governments recognize. For the United States to just abandon it, particularly in the midst of an epidemic is worse than irresponsible.
[00:12:36] Well, I'm gonna end there, some sobering notes, of course. We'll be back next week with probably another huge week of news is every week is in this era of a Coronavirus. This podcast and all our others are available at BioCentury's website, biocentury.com. Our Coronavirus coverage, much of which is in front of the paywall, includes lists of vaccines, therapies, clinical trial readouts, and more.
[00:13:03] That is available at biocentury.com/coronavirus. Podcasts are also available via Apple, Google, Spotify, and Stitcher.