Ep. 345 - TAC to the Future. Plus: GSK Deal, MFN

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<v Jeff Cranmer>Welcome to the BioCentury this week podcast.

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<v Jeff Cranmer>I hope our listeners who came out to San Francisco last weekend for the JP Morgan Healthcare Conference had a productive and fun week.

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<v Jeff Cranmer>San Francisco itself certainly showed up for the party with sunny skies.

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<v Jeff Cranmer>Meetings in oddball spaces.

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<v Jeff Cranmer>A lot of pink on JPM Tuesday, and live music.

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<v Jeff Cranmer>And uh, dare I say, even a foosball table in the middle of Union Square.

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<v Jeff Cranmer>We'll talk about some of our takeaways from JPM.

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<v Jeff Cranmer>Plus, GSK is buying RAPT for $2.2 billion, eyeing a food allergy opportunity.

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<v Jeff Cranmer>And after a decade of industry focus on PROTACs, next generation induced proximity technologies are coming of age will go TAC to the future with Senior Biopharma Analysts, Danielle Golovin.

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<v Jeff Cranmer>And we'll get the update from Steve Usdin, our Washington Editor, on what's happening in the politics and policy world, uh, among other things, president Donald Trump is seeking to  codify his Most Favored Nation drug pricing policy as part of his healthcare plan, And the house spending bill includes reauthorization of priority review vouchers.

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<v Jeff Cranmer>I'm Jeff Cranmer, executive editor here at BioCentury, and joining me to discuss all of this are my colleagues.

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<v Simone Fishburn>Simone Fishburn, Editor in Chief.

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<v Steve Usdin>Steve Usdin, Washington Editor.

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<v Danielle Golovin>And Danielle Golovin, Senior Biopharma Analyst.

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<v Jeff Cranmer>Alright, Danielle, welcome to the podcast, making your debut from the sunny east coast of Florida.

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<v Danielle Golovin>Yes.

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<v Danielle Golovin>Home of the famous Dune Dog.

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<v Jeff Cranmer>oh yes, Dune Dog.

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<v Jeff Cranmer>Danielle and I, uh, are big fans of Dune Dog, which I can't recommend  highly enough.

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<v Jeff Cranmer>It is over in Jupiter Florida and has some of the best dogs and milkshakes around, there's kind of a mini biotech hub near you, Danielle.

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<v Jeff Cranmer>Isn't that the case or?

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<v Danielle Golovin>A little bit, little bit.

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<v Jeff Cranmer>A little bit happening.

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<v Jeff Cranmer>Alright, well, you yourself, you know,

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<v Danielle Golovin>I need to start it.

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<v Jeff Cranmer>You need to start it.

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<v Jeff Cranmer>Okay, well, before we get started this March,  BioCentury is headed to Seoul to host its 5th East-West East-West Summit.

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<v Jeff Cranmer>Once again, coordinating the event with BayHelix and McKinsey.

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<v Jeff Cranmer>Learn how to source innovation from Asia.

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<v Jeff Cranmer>Or accelerate your own pipeline by finding the right Asia partner at the three day event.

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<v Jeff Cranmer>Presenting company slots are just about sold out, but delegate tickets are still available.

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<v Jeff Cranmer>Get yours today, go to BioCenturyEastWest.com.

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<v Jeff Cranmer>And coming up later this week, we will have a special edition of the BioCentury This Week podcast, featuring Stephen Hansen with his 2026 Public Markets Preview.

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<v Jeff Cranmer>All right, Simone, it was good to see you last week.

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<v Jeff Cranmer>Thanks for coming out my way.

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<v Jeff Cranmer>Did you have a good meeting?

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<v Simone Fishburn>I did a good meeting.

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<v Simone Fishburn>There's a lot of talk about the weather being good.

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<v Simone Fishburn>I came back via Houston actually for another meeting, whether the weather was good.

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<v Simone Fishburn>I'm now in the nation's capital where it's good to be back though temperatures are in the minus range, I think on almost every scale, except maybe Kelvin.

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<v Simone Fishburn>And despite all of that, I'm going to get back at my colleagues now and tell the whole world how you make me sit with a heating off for this podcast.

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<v Simone Fishburn>So there you go.

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<v Simone Fishburn>The things I do for this podcast, sitting in the cold.

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<v Jeff Cranmer>Who is Kelvin, is he, is he one of the The Minions?

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<v Simone Fishburn>Look it up, Lord.

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<v Simone Fishburn>Lord.

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<v Jeff Cranmer>Oh, oh yeah.

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<v Jeff Cranmer>That always sends me off to,

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<v Simone Fishburn>whole scale.

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<v Simone Fishburn>He's, he's got his own whole scale, so, um, yeah.

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<v Simone Fishburn>You know, I think there's been so much written and spoken about, just say two or three things.

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<v Simone Fishburn>Definitely there's a feeling, I feel like we've said this before, but there's still a feeling that this time it's different and the recovery is real, there's also very much of a feeling of yes but, for example, IPO window not gonna slam wide open straight away, it's gonna be a while.

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<v Simone Fishburn>And I think, you know, we all know that we, we didn't get any major consolidation or major takeouts or anything.

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<v Simone Fishburn>So I think it's sort of a, an interesting place.

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<v Simone Fishburn>Everybody I met said that they had, they, and all the people they met had incredibly productive interactions.

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<v Simone Fishburn>Yet it really was a lot emptier or less full I should say, than other years.

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<v Simone Fishburn>And I think there are two things going into this based on my own observations and what other people sort of seem to say.

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<v Simone Fishburn>One is that the London Life Sciences Week Jefferies conference in London in November has taken some of the air out of this.

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<v Simone Fishburn>And the other I think is really part of the I dunno if we're gonna call it culling or downturn or whatever, there are a fewer companies, and more companies with not so much money.

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<v Simone Fishburn>And so you don't go to JP Morgan now if you don't have actual meetings set up that are likely to be very productive.

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<v Simone Fishburn>It's expensive.

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<v Simone Fishburn>So in a way, I think this is sort of where the ecosystem needs to be, that it's more focused, it's more real conversations and a little bit less, I'm, I'm there for the fomo.

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<v Simone Fishburn>As for us, I sat down with Vas Narasimhan the CEO of Novartis, and we'll be running a Q&A interview very soon that I had with him.

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<v Simone Fishburn>We had a range of other conversations and these will also be featuring in our coverage.

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<v Simone Fishburn>So there are a few themes within those conversations, obviously, and Steve is gonna talk about that, MFN Most Favored Nation drug pricing and policy is a big part of that.

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<v Simone Fishburn>Actually, Danielle's gonna talk another part of that, which is, you know, as we look at the innovation front targeted targeted protein degradation is a very big theme right now, we'll, we'll get into that  on this podcast.

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<v Simone Fishburn>and then another theme that will be big throughout the year, of course, is speed to first in human trials.

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<v Simone Fishburn>So, those are some of the conversations we had and we'll be covering.

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<v Simone Fishburn>How about you, Jeff?

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<v Jeff Cranmer>I, well, focused a lot of my conversations on meeting companies from Asia.

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<v Jeff Cranmer>It turned out even some of the companies not from Asia, such as Sier, wanted to talk to me about Asia.

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<v Jeff Cranmer>So I had a good conversation, with David Lee, the US CEO of Servier.

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<v Jeff Cranmer>Servier wasn't even in the US eight years ago, and now they're very much in the US and they are doing a lot of deals in China, and are planning to really accelerate their commercial launches in Japan.

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<v Jeff Cranmer>So, you know, big focus on Asia there.

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<v Jeff Cranmer>I had the chance once again to moderate a panel  the Global IR mini conference, which we put on with KoreaBio and Sidley, it was a lot of fun.

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<v Jeff Cranmer>Uh, Mazi Z from Kurma, June Lee, uh, Noel Jee from Novo Holdings, joined me.

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<v Simone Fishburn>I did hear they were like mixing it up a bit there Jeff.

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<v Jeff Cranmer>They mixed it up at, at one point.

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<v Jeff Cranmer>I mean, apparently Mazi and June are friends, but, uh, at one point Mazi said, I'm gonna take the gloves off now.

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<v Jeff Cranmer>And, uh, it was the easiest or slash most embarrassing moderating experience I've ever had because I asked one question, and that was how can Korean biotechs attract foreign VCs let's just say Mazi and June didn't really see eye to eye, and it was a really great conversation, which I hope to write up, this week or next, and just put in some thoughts there about what's going on.

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<v Jeff Cranmer>I think Mazi really feels like Korean biotechs, aren't setting themselves up from the earliest stages stages to succeed on the global stage.

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<v Jeff Cranmer>They're, they're sort of developing their products for the Korea market rather than the global market.

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<v Jeff Cranmer>And then hoping to sell them on the global market.

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<v Jeff Cranmer>He feels like, they need a lot of handholding, whereas,

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<v Simone Fishburn>Yeah, I spoke to June actually

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<v Jeff Cranmer>Yeah.

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<v Jeff Cranmer>Yeah.

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<v Jeff Cranmer>What did June have to say to you?

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<v Simone Fishburn>Yeah, pretty similar.

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<v Simone Fishburn>But she, I mean, I think that I, I think this is important because I think we do this a lot.

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<v Simone Fishburn>I think she feels that many of the criticisms that were leveled are also true of U.S.

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<v Simone Fishburn>innovators, and I think that that's a really important thing for us to think about as we say, well, are they really this or are they really that, actually those criticisms or comments, not always criticisms, are true.

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<v Simone Fishburn>Like how many US companies really start with a global view and so on.

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<v Simone Fishburn>I think, I think that sort of carries through in lots of ways.

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<v Simone Fishburn>So yeah, I think that that's gonna be an interesting space to watch.

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<v Jeff Cranmer>Excellent.

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<v Jeff Cranmer>Yeah.

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<v Jeff Cranmer>we'll have a, a series of stories coming to you over the coming weeks and months, that we got at JP Morgan.

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<v Jeff Cranmer>A lot of company updates, some big picture pieces as well, some Q&As, and more.

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<v Jeff Cranmer>GSK company from your motherland, Simone, uh, doing a little deal today.

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<v Jeff Cranmer>What'd you think?

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<v Simone Fishburn>Yeah, interesting days, Jeff, when we're talking about a $2.2 billion takeout as a little deal, I think, uh, I wouldn't mind that kind of money.

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<v Simone Fishburn>I know Paul Bonanos, our, our colleague, he's gonna have a story in BioCentury today.

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<v Simone Fishburn>For me, I'm looking at this as this is the beginning of Luke Miels tenure as Chief Executive officer as CEO of GSK, it's a new chapter in that company story.

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<v Simone Fishburn>Let's be honest, the company's not done great recently, but it has done a few interesting deals roughly of this size.

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<v Simone Fishburn>I have seen seen analyst reports and, you know, Paul's analysis.

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<v Simone Fishburn>This could bring a significant or non-trivial revenue stream to GSK, which is, I think, important.

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<v Simone Fishburn>It's sort of in their sweet spot.

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<v Simone Fishburn>I think we'll, we'll see, I, I don't think this alone is gonna solve GSK's problems.

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<v Simone Fishburn>It's not a massive sort of shot in the arm to GSK.

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<v Simone Fishburn>I expect it to be one in a stream of deals.

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<v Simone Fishburn>I think that, you know, Tony Wood as the Chief Scientific officer there, knows what he's doing.

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<v Simone Fishburn>So I think that once they get a program like this, they'll be able to execute, as needed.

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<v Simone Fishburn>But yeah, we'll, we'll see.

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<v Simone Fishburn>It will be all eyes on GSK to see how it manages to build from here.

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<v Jeff Cranmer>Couple more things about the deal.

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<v Jeff Cranmer>The program at the center of the deal, RAPT had inlicensed most global rights, uh, late in 2024, from China.

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<v Jeff Cranmer>And so that's a 13 month turnaround here.

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<v Jeff Cranmer>The product is in Phase IIB.

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<v Jeff Cranmer>And let's see, prophylaxis against food allergy and GSK I would imagine believes it can be a best in class therapy with a dosing advantage over Xolair, results are due in about a year from that study.

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<v Jeff Cranmer>And the premium, 65% over RAPT's close  on Friday, net of cash the deal is worth about $ 1.9 billion.

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<v Simone Fishburn>I just wanna add one thing, Jeff, you're absolutely right, I should have mentioned the source of this molecule from China.

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<v Simone Fishburn>And by the way, you know, every single conversation I had at JPM involved China, but this one is, got a particular point because as you noted, and as we've started to note, there's a lot of China innovation.

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<v Simone Fishburn>In fact, Danielle will talk about that also for her targeted degradation conversation.

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<v Simone Fishburn>But here's something that was taken a year ago and then this company gets bought and all the conversations, and Steve you might have a comment on this, sort of seem to indicate that partnering and licensing products from China is one thing, but very little expectation that there will be takeouts by Western companies of China companies.

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<v Simone Fishburn>That sort of seems like a whole new geopolitical barrier.

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<v Simone Fishburn>Steve, I don't know if you wanna weigh in here.

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<v Steve Usdin>I think there's several issues.

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<v Steve Usdin>You know, I think, you said that all of your conversations at JPM involved China, many of the conversations in Washington around biotech and the life sciences also involve China.

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<v Steve Usdin>I think that there's, there's sensitivity, there's concern on Capitol Hill about entanglements between US life sciences companies and companies in China that are closely associated with the Chinese government or with the Chinese military.

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<v Steve Usdin>But it's a real question of how those concerns are going to be translated into action, if at all.

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<v Steve Usdin>And, I think that really remains  completely unclear.

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<v Steve Usdin>So I think that my read on it is that industry is just going full speed ahead and assuming that they'll be able to navigate around any kind of restrictions, that the Congress or the Trump administration impose on Dealmaking between China and the United States at this level.

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<v Jeff Cranmer>Yeah, and James Huang, who was on our JPM Special podcast podcast touched on this and he said, there's a whole host to reasons why you wouldn't see a western company take out a China company.

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<v Jeff Cranmer>the bottom line.

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<v Jeff Cranmer>He is just like, why do you want the headache when you can just take the asset?

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<v Jeff Cranmer>and speaking of this asset RAPT paid $35 million up front in the deal, with the Chinese company Jeyou, eligible for almost $700 million in milestones plus royalties.

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<v Jeff Cranmer>We're gonna take a quick break and we'll come back and talk a little TAC.

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<v Alanna Farro>BioCentury This Week is brought to you by The 5th East-West Biopharma Summit in South Korea.

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<v Alanna Farro>An arc of innovation is emerging across Asia, and Western biopharma leaders are taking note-from cross-border deals to newcos.

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<v Alanna Farro>In March, 2026, The 5th BioCentury-BayHelix East-West BioPharma Summit visits South Korea for the first time.

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<v Alanna Farro>Meet the biopharma leaders putting Korea innovation on the global map.

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<v Alanna Farro>Learn why Korea has become a clinical trial in manufacturing hub.

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<v Alanna Farro>Discover if Korea is the next hotspot for NewCo formation.

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<v Alanna Farro>Plus, meet biopharma innovators from India to Singapore, to China and Japan.

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<v Jeff Cranmer>All righty, we are back.

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<v Jeff Cranmer>Danielle, welcome to the pod.

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<v Danielle Golovin>Hello.

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<v Jeff Cranmer>So why now, four part series on TACs what triggered you to write about this at this time?

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<v Danielle Golovin>Yeah, so one of my jobs at BioCentury's is to scan and publish literature, identify translational trends.

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<v Danielle Golovin>I would say the first reason is just the sheer mass of publications piling up.

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<v Danielle Golovin>I keep a list of, you know, whenever the word TAC is in the title or the abstract, and it was hitting critical mass of what I could really wrap my head around.

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<v Danielle Golovin>So I figured, you know, now's the time in that regard.

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<v Danielle Golovin>And this includes innovations on, you know, classical PROTACs, like improving tox or PK.

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<v Danielle Golovin>And by the way that list ended up being being entirely Chinese.

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<v Danielle Golovin>I mean, the innovations coming out of China for formulations delivery is very much Chinese, and that'll probably be a topic for another day, just delivery in general the innovations coming outta China for that category.

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<v Danielle Golovin>But it's also, it's showing up in this TACs base too.

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<v Simone Fishburn>So Danielle, let me break it down a bit with you, it reached critical mass and you wrote us an article and maybe that's what you intended to do, but it actually ended up as a trilogy, if not quadrilogy.

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<v Simone Fishburn>This is kind of like reaching Harry Potter levels of a number of books here, but maybe not, but, uh, um, but pretty fantastic I would say.

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<v Simone Fishburn>But I, I wanted to break it down because you did break down this field and let's talk about them.

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<v Simone Fishburn>You can sort of outline'cause maybe not all of our listeners really know how targeted degradation works and what the classical the classical constructs were, but the classical constructs were getting at intracellular targets.

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<v Simone Fishburn>And now you, you've broken it down so that some of the innovation is getting at lysosomal degradation, which allows it to get an extracellular targets.

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<v Simone Fishburn>So you've increased the target space.

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<v Simone Fishburn>Some of it's using autophagy, so you've increased the targets to sort of of intracellular aggregates, let's say.

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<v Simone Fishburn>And then you are seeing it go even beyond proteins to RNA degradation and even beyond degradation to this is sort of induced proximity right to phosphorylation.

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<v Simone Fishburn>So let's break them down one by one.

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<v Simone Fishburn>First of all, just talk about how the basic premise works and then how you flip from intracellular to extracellular targets.

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<v Danielle Golovin>Yeah.

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<v Danielle Golovin>So the sort of classical PROTAC, when I say that is what I mean it's a hetero bifunctional small molecule.

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<v Danielle Golovin>So one side binds to your target of interest that you wanna degrade.

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<v Danielle Golovin>The other side recruits an E3 ligase.

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<v Danielle Golovin>It recruits that machinery to then tag your protein of interest with ubiquitin, which then sends it to the proteasome for degradation.

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<v Danielle Golovin>And those two sides are linked together.

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<v Danielle Golovin>So there's a linker involved.

00:17:32.050 --> 00:17:36.055
<v Danielle Golovin>that's sort of the classic, yeah, it uses the E3 ligases to do so.

00:17:36.555 --> 00:17:49.801
<v Danielle Golovin>And on that front, the intracellular target front, what we're seeing is  using new E3 ligases, so almost all the ones in the clinic use Cereblon and it just limits the target space.

00:17:49.968 --> 00:17:56.107
<v Danielle Golovin>So if you wanna get a targets outside of what Cereblon can touch, then you need to go to new classes of E3 ligases.

00:17:56.107 --> 00:18:01.380
<v Danielle Golovin>Well, there's hundreds in the genome, when I asked, you know companies how many, 600.

00:18:01.846 --> 00:18:03.048
<v Danielle Golovin>But they're not characterized.

00:18:03.048 --> 00:18:04.883
<v Danielle Golovin>We don't know what targets they naturally hit.

00:18:05.150 --> 00:18:16.994
<v Danielle Golovin>I mean, people were talking about this a couple years ago now, but it was like kind of theory, like yeah, we would love to tap into those, but nobody really was, or we didn't have hints of like which ones were actually working, you know.

00:18:17.528 --> 00:18:31.375
<v Danielle Golovin>Yeah, in this story I highlighted one called TRIM21, which I think is super interesting, it's activation requires clustering, if you have one TRIM21 that binds to a single protein it doesn't do anything.

00:18:31.742 --> 00:18:44.021
<v Danielle Golovin>But if you have an aggregated protein, you know, especially in this case pathologic, right, like tau, tau aggregates, then multiple TRIM21s will be binding and activate each other, so it's like cross activation.

00:18:44.123 --> 00:18:53.231
<v Danielle Golovin>And so then you get degradation of an aggregate protein sparing the monomers, so that's just like a, an example example of an E3 ligase that it's unique, right.

00:18:53.231 --> 00:18:59.938
<v Danielle Golovin>That we didn't know about before and this was several publications and now a company Trimtech is exploiting this idea for therapeutics.

00:19:00.838 --> 00:19:06.478
<v Simone Fishburn>So we're still waiting to see whether and in what situations degrading is better.

00:19:07.211 --> 00:19:10.382
<v Simone Fishburn>Than inhibiting, 'cause it's probably target by target.

00:19:10.382 --> 00:19:16.622
<v Simone Fishburn>And maybe that's the reason, Danielle, that we need these new targets and new ways of degrading things.

00:19:16.821 --> 00:19:22.728
<v Simone Fishburn>So we've really really talked about small molecules until now, but tell us just a little bit about the bispecific degraders.

00:19:23.929 --> 00:19:28.432
<v Danielle Golovin>Yeah, so last year I wrote a story about degrading extracellular targets.

00:19:28.432 --> 00:19:35.707
<v Danielle Golovin>So this is a departure from the classical PROTAC where they're going after intercellular targets, and the first company in that field is Lycia.

00:19:36.174 --> 00:19:48.720
<v Danielle Golovin>they're using molecules where one side binds the target of interest, and that was using some sort of biologic and then it was attached  to some ligand that would bind to a lysosome targeting receptor.

00:19:48.720 --> 00:19:51.957
<v Danielle Golovin>So this is an internalizing receptor that will pull the target into the lysosome.

00:19:52.156 --> 00:19:57.261
<v Danielle Golovin>So again, a departure from the classical PROTAC which would use the proteasome, in this case they use the lysosome.

00:19:57.695 --> 00:20:02.968
<v Danielle Golovin>Well now there are two companies that actually both just got fresh capital, Epi biologics and Laigo.

00:20:03.268 --> 00:20:17.950
<v Danielle Golovin>And they're going to develop classic bispecific antibodies that degrade but  one side targets a target membrane protein or soluble protein, and the other side of the bispecific binds a membrane E3 ligase.

00:20:18.150 --> 00:20:28.492
<v Danielle Golovin>That's kind of going back a step to the classical PROTACS, like using the E3 ligase, but these ones are transmembrane and so that represent, I told you there were 600 E3 ligases in the genome.

00:20:28.492 --> 00:20:34.700
<v Danielle Golovin>There's about 30 to 35 Laigo told me that they're focusing on, that are sit at the membrane.

00:20:34.900 --> 00:20:40.605
<v Danielle Golovin>And actually I just learned this, that that pathway can utilize the proteasome or the lysosome for degradation.

00:20:41.105 --> 00:20:43.942
<v Danielle Golovin>So that's super interesting new biology that we're waiting to see unfold.

00:20:44.509 --> 00:20:46.044
<v Simone Fishburn>So I think it's really interesting.

00:20:46.044 --> 00:20:54.252
<v Simone Fishburn>I think this area's exploding actually what you and I talked about is probably like 10% of all the stuff that's in your articles, you know.

00:20:54.786 --> 00:20:57.556
<v Simone Fishburn>So, uh, definitely recommend people check that out.

00:20:57.556 --> 00:21:10.067
<v Simone Fishburn>It's really an interesting field that you're right, it's been around a while and it's had a, you know, I dunno if I would say fits and starts, but it's sort of still discovering its way, but it really seems to be poised to go in lots of directions.

00:21:10.769 --> 00:21:11.369
<v Danielle Golovin>Absolutely.

00:21:11.502 --> 00:21:22.580
<v Danielle Golovin>Yeah, we didn't even really touch on the going beyond, you know, degradation with J&J's acquisition of Halda for $3 billion, that sort of underscore the rise of these TACs that are doing things other than degrading.

00:21:22.580 --> 00:21:28.953
<v Danielle Golovin>You can stabilize, you can alter post-translational modifications, you can alter what a protein's doing, where it's going.

00:21:29.354 --> 00:21:32.156
<v Danielle Golovin>Yeah, the field is just really starting to mature.

00:21:32.923 --> 00:21:40.798
<v Jeff Cranmer>All right, and you can find Danielle's excellent piece on BioCentury.com BioCenturypodcast.com.

00:21:41.365 --> 00:21:46.505
<v Jeff Cranmer>Let's head to Washington, Steve, woo, MFN, where are we at?

00:21:47.204 --> 00:21:56.013
<v Steve Usdin>MFN so President Trump put out a statement last week saying that he wants Congress to codify MFN in legislation.

00:21:56.381 --> 00:22:02.019
<v Steve Usdin>This is leading to some really awkward conversations for pharmaceutical CEOs.

00:22:02.253 --> 00:22:06.692
<v Steve Usdin>They're calling members of Congress to ask them urgently, not to codify MFN.

00:22:07.358 --> 00:22:16.835
<v Steve Usdin>Even the hope they have, a lot of them have publicly praised the policies in meetings with Trump and Trump administration Officials in the White House.

00:22:17.234 --> 00:22:19.136
<v Steve Usdin>So why, why, are they doing that?

00:22:19.671 --> 00:22:20.538
<v Steve Usdin>A few reasons.

00:22:20.705 --> 00:22:29.847
<v Steve Usdin>One, the deals that they've negotiated with the Trump administration last three years, legislation is not so likely to fade away that quickly.

00:22:30.082 --> 00:22:35.453
<v Steve Usdin>Another reason legislation's gonna require a public definition of exactly what MFN means.

00:22:35.453 --> 00:22:41.759
<v Steve Usdin>Remember, all the deals that have been negotiated with the White House have been private, the details haven't been disclosed.

00:22:42.027 --> 00:22:47.531
<v Steve Usdin>If there's a public definition of MFN, it may be worse for pharmaceutical companies.

00:22:47.798 --> 00:22:49.567
<v Steve Usdin>Than the deals that have been negotiated.

00:22:49.567 --> 00:22:57.875
<v Steve Usdin>Remember the deals that have been negotiated use a definition that is the second lowest price out of eight industrialized countries.

00:22:58.143 --> 00:23:07.652
<v Steve Usdin>There are a lot of other ways to define MFN, and all of them are basically worse for pharmaceutical companies than the one that has been included in the private deals that they've done.

00:23:08.319 --> 00:23:17.695
<v Steve Usdin>And of course, legislation would apply MFN policy to the entire industry, not just big multinational companies that did deals with the White House.

00:23:18.396 --> 00:23:25.002
<v Steve Usdin>It's likely that it would have a much more chilling effect on smaller companies that are less able to navigate around it.

00:23:25.136 --> 00:23:31.009
<v Steve Usdin>And those small companies, of course, are really the engines of innovation that drive the entire, the entire industry.

00:23:31.442 --> 00:23:37.481
<v Steve Usdin>Having said all of that, okay, so you're, the question you're gonna ask me, Jeff, is, well, is this legislation gonna pass?

00:23:37.816 --> 00:23:39.750
<v Steve Usdin>And my answer is, I don't know.

00:23:39.817 --> 00:23:40.786
<v Steve Usdin>Nobody knows.

00:23:40.951 --> 00:23:56.101
<v Steve Usdin>betting against things passing in this environment is probably wise simply because Republicans have such a narrow margin in the House, that it's gonna be very, very difficult for them to do anything controversial.

00:23:56.401 --> 00:24:06.678
<v Steve Usdin>On the other hand, the impacts of MFN legislation would be enormous, and saying that something is unlikely to happen doesn't mean it's impossible.

00:24:07.011 --> 00:24:17.422
<v Steve Usdin>And that's why you've got the CEOs of the biggest pharmaceutical companies in the world scrambling to try to prevent Congress from doing what the President has asked them to do.

00:24:17.823 --> 00:24:20.291
<v Steve Usdin>Trump feels he has the political headwinds behind him.

00:24:20.491 --> 00:24:36.775
<v Steve Usdin>He's said publicly to members of the House, look to the Republicans, look you, you need to have an issue around healthcare affordability to run on in the fall, and MfN and bashing the pharmaceutical companies is your best way to to do that.

00:24:36.942 --> 00:24:43.347
<v Steve Usdin>So we'll see what happens, I think that whatever happens, this isn't the last that we're going to hear of this.

00:24:43.781 --> 00:24:57.828
<v Steve Usdin>One of the things that's interesting about efforts to impose price controls on the United States or to benchmark U.S. prices to prices that are paid by other industrialized countries is that there is, uh, bipartisan support for that.

00:24:58.195 --> 00:25:02.666
<v Steve Usdin>So even if it doesn't get through now, it's an idea that isn't going away.

00:25:03.902 --> 00:25:09.340
<v Simone Fishburn>Yeah, just, just two follow ups from my conversation with Novartis, CEO, Vas Narasimhan.

00:25:09.340 --> 00:25:16.914
<v Simone Fishburn>So, you know, another CEO had told me earlier in the day how bad this MFN policy would be for Europe.

00:25:17.548 --> 00:25:20.352
<v Simone Fishburn>And he said the pharmas are just not going to bother launching there.

00:25:20.352 --> 00:25:27.424
<v Simone Fishburn>And I asked Vas about that and he said he thinks it's always gonna be a, he used the word nuance, I think he says it's be a bit more nuanced.

00:25:27.726 --> 00:25:31.962
<v Simone Fishburn>He says clearly there's places where they're going to be able to launch, like with orphan drugs.

00:25:32.364 --> 00:25:39.703
<v Simone Fishburn>And you know, he says there are markets where the price differentials are more manageable and working with governments to find solutions.

00:25:39.703 --> 00:25:48.747
<v Simone Fishburn>But, he said that you'll see launches either just in the private market or self-pay, or if those countries that don't enable that, you just won't see launches at all.

00:25:48.747 --> 00:25:56.288
<v Simone Fishburn>So he thinks that there are some countries where that'll happen, and he said that that just has to lead to a rethink in how Europe approaches this.

00:25:56.288 --> 00:25:58.757
<v Simone Fishburn>Which is something you and I have talked about.

00:25:58.757 --> 00:26:14.905
<v Simone Fishburn>It's a really difficult one that, so, you know, I don't know if you got a comment on that, but I wanted just to say one more thing related to your, um, final comment, which is that,  I asked him whether this was a sort of way of thinking that they need to get through the next three years and take it from there.

00:26:15.373 --> 00:26:23.414
<v Simone Fishburn>And he said, our assumption is that this, the approach we've agreed to or something similar will be continued for the foreseeable future.

00:26:23.781 --> 00:26:26.651
<v Simone Fishburn>And that's what they, their assumption is that this is the new normal.

00:26:27.885 --> 00:26:29.788
<v Steve Usdin>And I think that's, that's exactly right.

00:26:29.788 --> 00:26:41.766
<v Steve Usdin>This is the new normal, as to whether or not they're gonna be able to use this as leverage to compel European countries to pay higher prices and especially higher launch prices.

00:26:42.067 --> 00:26:42.733
<v Steve Usdin>for drugs.

00:26:43.101 --> 00:26:44.501
<v Steve Usdin>That's really an open question.

00:26:44.501 --> 00:26:55.246
<v Steve Usdin>Of course, multinational pharmaceutical CEOs love the idea that MFN would be a stick that they can use to tell countries in Europe well, you, you have to raise your prices.

00:26:55.246 --> 00:27:03.320
<v Steve Usdin>Uh, if you don't, then we won't launch in your countries, we won't sell into your countries because doing so would jeopardize our pricing in the United States.

00:27:03.788 --> 00:27:13.565
<v Steve Usdin>The European countries don't have huge amounts more money to spend on anything, and they're not going to be enthusiastic about spending more on pharmaceuticals.

00:27:14.164 --> 00:27:18.036
<v Steve Usdin>If I had to guess, I think that what's likely to happen, there'll be a combination of things.

00:27:18.036 --> 00:27:21.306
<v Steve Usdin>There'll be some drugs launches that won't happen in some countries in Europe.

00:27:21.640 --> 00:27:27.244
<v Steve Usdin>There'll be some drug launches that will happen later in Europe than they would've otherwise.

00:27:27.578 --> 00:27:31.950
<v Steve Usdin>And then there'll be some ways that companies and countries can kind of fudge things.

00:27:31.950 --> 00:27:42.160
<v Steve Usdin>They'll be looking for ways to fudge things around the margins, to still provide access to drugs without jeopardizing US pricing that's benchmarked against European prices.

00:27:42.559 --> 00:27:45.063
<v Simone Fishburn>Maybe that's BioCentury's speak for nuanced.

00:27:46.530 --> 00:27:46.998
<v Steve Usdin>Yes, it is.

00:27:49.200 --> 00:27:59.277
<v Jeff Cranmer>Steve, uh, another thing you've been closely following is the Priority Review Voucher saga, it's become a saga now, uh, where, what's the latest?

00:28:00.111 --> 00:28:01.846
<v Steve Usdin>Okay, so some good news.

00:28:01.945 --> 00:28:02.313
<v Steve Usdin>Probably,

00:28:02.380 --> 00:28:03.147
<v Jeff Cranmer>wait what?,

00:28:04.249 --> 00:28:06.684
<v Steve Usdin>probably, I said I, I did hedge it there probably.

00:28:07.051 --> 00:28:20.230
<v Steve Usdin>Over the weekend the House included reauthorization of Pediatric Priority Review Vouchers, through September 30, 2029 in a spending bill that's intended to keep the government open for the rest of the year.

00:28:20.632 --> 00:28:22.567
<v Steve Usdin>It's not quite a done deal.

00:28:22.567 --> 00:28:28.105
<v Steve Usdin>Its fate is linked to the passage of that bigger spending bill that's aimed at preventing a government shutdown.

00:28:28.373 --> 00:28:31.009
<v Steve Usdin>And it's not completely certain that that's gonna happen.

00:28:31.276 --> 00:28:33.978
<v Steve Usdin>I think personally, I think it will happen if it doesn't happen.

00:28:34.179 --> 00:28:45.056
<v Steve Usdin>I think that whatever legislation is passed eventually to reopen the government, if there is a shutdown, we'll probably have the Pediatric Priority Review Voucher extension in it.

00:28:45.757 --> 00:28:49.193
<v Steve Usdin>You know, I've mentioned, Pediatric PRVs before on this podcast.

00:28:49.760 --> 00:28:51.863
<v Steve Usdin>I think they're an almost perfect public policy.

00:28:52.163 --> 00:28:56.500
<v Steve Usdin>It's a transfer of money, usually from big pharma to tiny biotech.

00:28:56.934 --> 00:29:01.538
<v Steve Usdin>That makes it possible to create therapies for the most vulnerable people in society.

00:29:02.106 --> 00:29:07.612
<v Steve Usdin>Patients usually children with very rare diseases, and it doesn't cost the taxpayers a dime.

00:29:08.113 --> 00:29:17.654
<v Steve Usdin>Reauthorization of Pediatric PRVs is an essential precondition for the development of gene and cell therapies for ultra rare conditions.

00:29:17.654 --> 00:29:19.958
<v Steve Usdin>So I think it will be something for patients.

00:29:19.990 --> 00:29:25.763
<v Steve Usdin>And for the industry and for people who appreciate good public policy to celebrate if it does happen.

00:29:26.663 --> 00:29:27.198
<v Jeff Cranmer>All righty.

00:29:27.231 --> 00:29:30.335
<v Jeff Cranmer>Uh, anything else interesting in the spending bill, Steve?

00:29:31.502 --> 00:29:32.269
<v Steve Usdin>Yeah, there's a lot.

00:29:32.269 --> 00:29:40.577
<v Steve Usdin>But one thing, again, on the positive side, it looks like Congress will reject the Trump Administration's request to slash NIH funding.

00:29:40.944 --> 00:29:44.648
<v Steve Usdin>Instead there's likely to be a 1% increase in NIH funding.

00:29:45.182 --> 00:29:53.892
<v Steve Usdin>That doesn't address all of the challenges to the basic research enterprise, that have happened, this year, but it is a positive development again, if it happened.

00:29:54.759 --> 00:29:59.396
<v Jeff Cranmer>Okay, Steve, always good to end on a positive note when we can.

00:29:59.596 --> 00:30:24.021
<v Jeff Cranmer>If you like what you're hearing, follow us, subscribe to the podcast, whether you're on Apple, Spotify, or wherever you catch your podcast, drop us line, ask us a question, and we'll catch you on Thursday for a Special Edition of the podcast, as I mentioned at the top, with Stephen Hansen, and his 2026 Public Markets Preview.

00:30:24.154 --> 00:30:28.026
<v Jeff Cranmer>and special thanks to Kendall Square Orchestra, which provides the music.

00:30:28.526 --> 00:30:30.361
<v Jeff Cranmer>For BioCentury This Week.