Ep. 15 - Vaccine Hopes, the Shifting Biopharma Workplace & Blueprint's Dx Deal

BCTW Ep. 15 - 20JUL2020
[00:00:00] Jeff Cranmer: Welcome to BioCentury This Week. I'm Jeff Cranmer, Executive Editor, and I'm joined by my colleagues
[00:00:06]Lauren Martz: Lauren Martz, Senior Editor, and I head translation and clinical development,
[00:00:10]Simone Fishburn: Simone Fishburn, Editor in Chief,
[00:00:12]Steve Usdin: Steve Usdin, Washington Editor,
[00:00:14]Stephen Hansen: Stephen Hansen, Associate Editor.
[00:00:16]Jeff Cranmer: Last week was another busy week in biotech. We saw a flurry of biotech IPOs including the year's second largest by a company called Relay Therapeutics. Those deals push 2020's tally of money raised in IPOs past $13 billion. We saw the 56th company of the year get out on Friday. We also had a couple of interesting deals next week, which we'll speak about a little bit later.
[00:00:42]  One of those deals featured the largest upfront payment in a licensing deal so far this year. That was Blueprint, who partnered with Roche. But first the week is starting off with a bang. We have new data on the Oxford-AstraZeneca COVID-19 vaccine and we also have data on a Chinese COVID vaccine candidate from a company called Cansino.
[00:01:06] Lauren, I know you've jumped on this early. What are you finding out so far?
[00:01:11] Lauren Martz: Yeah, so it's still really early. We just are starting to see this data over the past couple hours and for the AstraZeneca and Oxford data, I think the important take-homes here are that, first of all, there is an antibody response.
[00:01:24] And that's a response that they're seeing in all of the patients who are treated with a prime end of boost dose of the vaccine. And secondly, I think the fact that we need two doses is an important thing to note too. It wasn't completely clear if that was going to be necessary. For the mRNA vaccines that we've seen come before this, I think it was pretty clear that we were going to have a prime end of boost.
[00:01:45] In this case, it looks like that's going to be the path forward. So in terms of manufacturing, that does have implications and that will affect how many patients this can reach.
[00:01:56] Steve Usdin: Doesn't it also have implications for how quickly the trials can get done? And also how quickly -- ultimately -- we can get vaccines authorized and approved?
[00:02:06] Lauren Martz: Absolutely, yeah. So, AstraZeneca is saying that the biggest factor in how quickly the trials can get done is going to be the infection rates in the regions where they're doing the big Phase III trials. And so, while the infections are rising in some places they're also falling in others like the U.K., where the initial studies are being done.
[00:02:23] But, the fact that you'll need to dose patients twice will certainly impact that. And I think originally they were looking at September for some of the big readouts and now they're guiding more towards sometime in the fall -- September to November.
[00:02:36] Simone Fishburn: Does it literally halve the number of doses that you can use?
[00:02:40] Lauren Martz: It sounds like it does. They said they are not completely set on what it's going to be for the Phase III trials but they're looking at high doses and two doses per patient. So, it's not like you're going to cut the dose in half and split it up between the two different months.
[00:02:56] Steve Usdin: And the thing that it seems to me... [what] this whole thing kind of highlights is this tremendous risk that the companies are running of a backlash because  they're over promising and they're at risk of under delivering on the vaccines and it's also happening on the therapies. I think in the United States the Administration and some of the CEOs have set up expectations that a vaccine and new therapies are going to be available in the early fall in quantities large enough to completely change the environment in the United States.
[00:03:24] And, Ken Frazier from Merck has already warned that that's really a disservice because it can cause people to avoid taking some of the public health steps that they need to contain the virus now. But I think it also creates this expectation. And, when it isn't met and it's increasingly sounding to me like it's not going to be met that there's going to be a backlash.
[00:03:45] Simone Fishburn: Steve, I think Frazier actually is pretty much the only one doing that. I don't think the industry has done a very good job of managing the message or of owning it. They've handed it to public health officials and others, who've clearly not done a great job of communicating to the public. So they've allowed a certain amount of hype.
[00:04:02] Frazier is the only one trying to temper that. At the same time they haven't been really been giving an honest assessment of what they're doing and how long it's going to take. So I think that there's really a lot of room for other pharma CEOs to be stepping up to the plate and publicly saying we're on this case but this is how long it's going to take realistically.
[00:04:23] Steve Usdin: The other thing I think  is it extends beyond the vaccines. I think that the place where it's going to hit the hardest first is going to be on the monoclonal antibodies because even if there are good readouts from the clinical trials, there's going to be such a limited capacity to manufacture them that people... there's going to be disappointment. They're not going to be available in the tens or hundreds of millions of doses that would be needed to  basically shut down transmission of the virus.  And again, I think there's this danger of a backlash. People are going to be disappointed because the companies aren't following through on the things that they seem to be promising now.
[00:04:56] Simone Fishburn: So having said that, I don't think we should put too much of a damper on this. I mean they're good data. They got T cell and antibody responses and in a way, could AstraZeneca have asked for better data?
[00:05:09]Stephen Hansen: I mean, that's what I found most interesting about this data was from previous trials, if you look back at what we saw from Moderna, they had pretty good antibody responses, but there was fairly limited T cell response. And so, at least what we're seeing from the Oxford vaccine and from BioNTech as well today is at least you're seeing a response on both the antibody titers and on the T cell, which I think is reason to at least have a glimmer of hope that these could provide a better immune response then maybe people have been sort of expecting just a couple of weeks ago.
[00:05:41]Simone Fishburn: Lauren, we've discussed this before but maybe you can just explain why the T cell response is important for our listeners.
[00:05:48] Lauren Martz: Sure, so it actually isn't clear why it's important. We don't know which type of immune response is going to be the correlate for efficacy for actually preventing the vaccine but antibodies are only part of that. And that there is some thought that the T cells might be more durable than the antibody response. And there's also some thought that T cells might actually enhance the antibody response. So,  you know, we'll have to see what happens from Phase III. But I also wanted to bring up a point about the AstraZeneca data.
[00:06:13] They had good data after a single dose. And this goes to Steve's point about being able to meet expectations. think it's clear that they had to weigh do we go forward with this potentially slightly riskier... maybe the data won't look quite as good if we do one dose or do we go forward with this high level two-dose strategy just to make sure that we are as effective as possible. I don't know if that strategy would look the same if it weren't in a pandemic.
[00:06:39]  Jeff Cranmer: I am very excited to read what we end up posting today. We'll have, obviously a story on the Oxford data as well as Cansino and a few other things coming out  as well. So be sure to check in on biocentury.com to read what Lauren comes up with. We'd also now like to preview the results of our most recent survey.
[00:07:00] It polled member pharmas in the COVID R&D Alliance on how they believe the biopharma workplace will shake out. Simone, you've been digging into that. What are you finding?
[00:07:11] Simone Fishburn: So it wasn't really on how they believe it'll shake out. It was on how they're managing back to work, what they're seeing in their workforce and how they're managing productivity.
[00:07:23] And I think the take-home is actually that this period might really preface a big change in how business in fact gets done. So the upside -- the good news of what they're seeing is the efficiencies of virtual work.   With everybody working remotely, there is a much bigger connectivity. Everybody's in the room where it happens, right?
[00:07:48]  And what you end up with is much less emphasis on whether you're in headquarters or not in headquarters. Traditionally, you know, the remote sites sort of feel like second class citizens or whatever. But here, everybody is feeling a lot more connected. I think there's another really important consequence of that, which is that you can expand the talent pool and they talked about this. It means that now you can start hiring people outside of commuter distance. That could end up reducing the dependence on living in a hub and really broadening the talent pool. Those are the good things about what they're seeing.   Productivity is looking fairly good, actually business development has not taken a hit at all is what they're saying. Regulatory interactions and payer negotiations are very healthy.
[00:08:32]  Lab work in clinical trials and sales and marketing are lagging for obvious reasons. You can't get into the lab and we know that clinical trials have been held up. But, I think the more concerning thing to them is employee welfare.
[00:08:45]  People are working incredibly long hours.  Everybody knows this, your workday... you don't know when it starts and you don't know when it ends.  There's Zoom fatigue. The flip side of the connectivity is the loss of human interactions. And so they are really worried about stress levels in the employee workforce.
[00:09:03] And what they're doing about it is they're increasing communication. They say the biggest thing they can do is be flexible. Flexible at-work hours. And that they're very aware that people have kids. They need to fit that into the work day. Some companies are arranging for online childcare, online exercise classes... there are various different things they're doing. But managing that stress level, enabling flexible hours and really focusing on the projects that matter -- they're being a lot harsher on what they continue with and what they dump, or put in the backburner let's say. And I think that that's a really important message probably for employees as well.
[00:09:48]  Going forward, if they can manage to find a way, I think we might see a much more semi-virtual workplace. Flexibility of work hours is going to be really important. And I think one of the overriding messages regarding going back to work is the amount of employee choice that's involved. So they're really handing employees.
[00:10:08] It's not traditionally been that way. Traditionally companies think of working at home as a privilege, right? And there's sort of been a you'll work where I tell you to when I tell you to -- and not just in our industry and all industries. Now what they're saying is, you know, employees won't be made to go back to work if they're not comfortable... they are instituting all kinds of measures. All of them are either requiring or recommending masks. I was actually surprised that not all of them are requiring it, but they are all at least requiring or recommending masks and there are other measures. So, I think it's an interesting take.
[00:10:41] These are, you know, 10 to 13 of the top pharmaceutical companies. And as one last note, there is no travel for most of them  -- nothing through the end of the year, some of them not even through Q1 next year. So don't expect to see them at conferences, even JP Morgan.
[00:10:56] Steve Usdin: One of the things that I think is really interesting that's related to this. I talked to a of a biopharma company last week and what he was emphasizing is that the interactions with regulators, especially with FDA, have improved during this crisis because it's possible now to get all the people from his team and from FDA onto a call -- onto a virtual call -- much, much easier than it was in the past when they had to have everybody coordinate flying in from out of town and coordinate all the schedules of their team and FDA. And I think that's going to be a lasting positive benefit.
[00:11:32] Jeff Cranmer: Another thing that's interesting is there's been no shortage of deals this year and clearly the pandemic hasn't disrupted that. I think we're seeing deals being done over Zoom and Roche is foremost among these companies.
[00:11:47] I think it gets done at least three or four deals with very interesting small biotechs. Last week, they partnered with Blueprint in a deal that gives Blueprint basically independence to sustain itself financially as well as tap into Roche's diagnostic capabilities. Now, that deal brought Blueprint a $675 million up front payment that tops the charts for this year, along with the $100 million equity investment that they got.
[00:12:20]Stephen, I know you have been tucking into this. Why did Blueprint pick Roche for a partnership?
[00:12:25]Stephen Hansen: Well, I think you touched on it, Jeff. I mean, those are the two main drivers there. One being sort of a trend that we're starting to see I think more frequently amongst some of these well-funded biotechs is that they can look at these partnership deals that really set them up, you know, to really grow the company without sort of having to give up their freedom.
[00:12:43] So that was one of the main drivers for Blueprint...  maintaining that financial independence while still actually being able to retain U.S. rights to pralsetinib, which is already under review. It's a RET inhibitor. And being a RET inhibitor that is going after genetically defined populations... that was sort of the other main driver for them in partnering with Roche.
[00:13:03] Roche has one of its subsidiaries, Foundation Medicine, where you can easily run panels that include testing for RETs alterations. And so that component was quite critical for them in this deal... having access to Roche's diagnostic capabilities and being able to... Not really for clinical trials, but really for that commercial setting. Being able to pair their therapy with Roche's diagnostic capabilities to identify those patients more quickly.
[00:13:29]Jeff Cranmer: Was a takeout ever on the table?
[00:13:31]Stephen Hansen: No and that sort of points to the trend, I think that we've seen amongst other companies. If you look at the deals Gilead has done with Galapagos or with Arcus, where basically these biotechs a lot of times are foregoing takeout and instead going after these sort of big partnership deals [where] they're able to maintain the independence.
[00:13:47]Simone Fishburn: Stephen, do you know that they're foregoing, rather than that they're not, you know, who's leading that who's making that decision?
[00:13:53] Stephen Hansen: Well, I know in several of these instances that is for sure. For sure Galapagos was definitely not wanting this. And in speaking to Blueprint, they said that they didn't even entertain a discussion of M&A, this was purely about the deal for this RET inhibitor.
[00:14:08] I mean, they already had $750 million in the bank at the end of the first quarter. So, this puts them well over a billion dollars in cash.
[00:14:15]Simone Fishburn: So, it's going to be interesting to see because I think we've seen that M&A deals this year are a little bit down while everything else is going on.
[00:14:23]  One of the questions is whether that's the environment or actually whether there's a trend to companies starting to prefer the partnering deal and the maybe ability to go the distance themselves. Are we entering a new phase with smaller companies wanting to stay independent for longer?
[00:14:41] Stephen Hansen: Well, I think so. And part of that is because of -- I mean we talked about this last week -- because of the access to capital that they have. You know, they're no longer sort of being backed into a corner to where, they don't have a lot of other options out. When you can raise a couple hundred million dollars overnight, that gives you that optionality to where you don't have to sort of give in to any deal unless it blows you away.
[00:15:03]Jeff Cranmer: Stephen, you mentioned Gilead there. The last deal I just wanted to touch on today was they partnered with a relative newcomer -- Kronos. How did that deal come together?
[00:15:14]Stephen Hansen: Well, it's an interesting one because Kronos is now led by Norbert Bischofberger, who was the long-term CSO for Gilead and really what he's done is he's taken this program that basically had been stopped at Gilead  -- their SYK inhibitors --and sort of brought them in. And, I think it's interesting for Kronos because, you know, they were just founded last year with a pretty large $105 million series A round, and they were working on mostly preclinical programs looking at transcription factors for cancer and this really volts them into being sort of a Phase III ready company so it really transforms the profile of that company.
[00:15:50] Jeff Cranmer: Yeah, certainly a company to watch in the years ahead. Well, that's all we have time for. Very interesting discussion today. Looking forward to reading everything that Lauren has to say about this Oxford data later.
[00:16:00]And, if you want to read that as well, you can log onto biocentury.com/coronavirus.  Our COVID-19 stories are available for free. And all of our podcasts can be found on our website  as well as Spotify, Stitcher, Apple and Google.