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State of Biotech 2022: How's the Biotechnology Business?
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State of Biotech 2022: How's the Biotechnology Business?
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Language: EN.
Segment:1 Introduction to GEN Edge.
KEVIN DAVIES: GENEDGE is the premium content channel of genetic engineering and biotechnology news. The magazine that's been covering the twists and turns of the biotech industry for four decades. GENEDGE offers exclusive in-depth reports from the front lines of biotech delivered right to your inbox focusing on business trends and opportunities, and spotlighting the most exciting startups and funding rounds shaping the industry.
KEVIN DAVIES: GENEDGE features the brilliant reporting and journalism of the GEN editorial team led by Alex Phillippidis, senior business editor in New York. And Jonathan Grinstein in San Diego.
ALEX PHILIPPIDIS: We deliver a lively authoritative curated set of stories each week profiling dynamic new biotech companies. Sitting down with founding CEOs and other key executives, researchers, and analysts from the leading edge of biotech.
KEVIN DAVIES: Subscribers to GENEDGE also enjoy exciting exclusive video content. Close to the Edge features 60 minutes interviews with outstanding biotech CEOs. And our Front Row series offers a deep dive into subjects such as Alzheimer's therapies and AI in drug development.
ALEX PHILIPPIDIS: If you sign up, you'll have instant access to two years of this exclusive material. And GENEDGE will be home to full length versions of the interviews and panels featured here in the State of Biotech forum.
KEVIN DAVIES: GENEDGE offers personal subscriptions and various options for group subscriptions for organizations and companies. Stay on the bleeding edge of biotech with GENEDGE.
Segment:2 How's the biotechnology business?.
KEVIN DAVIES: [MUSIC PLAYING]
KEVIN DAVIES: Moving along here at the State of Biotech. I'm Kevin Davies, executive editor of The CRISPR journal and GEN Biotechnology. The new marquee peer review journal offering original research and perspectives across all aspects of biotech. We'd love to consider your research today at www.genbiotechjournal.com
ALEX PHILIPPIDIS: I'm Alex Philippidis, senior business editor with GEN. Our next guests know a thing or two about the state of biotech so much so that they've been hosting their own show, Biotech Clubhouse, the Sunday Hangout and Weekly Review as they call it biotech news and analysis broadcasting live every Sunday at 4:00 PM Eastern, 1:00 PM Pacific on the Clubhouse app. We're pleased to welcome Daphne Zohar. The founder and CEO of PureTech Health, which has built a pipeline of 27 therapeutics and drug candidates, including two drugs approved in the US and Europe.
ALEX PHILIPPIDIS: Also, Brad Loncar, CEO of Loncar Investments and a longtime watcher of the biotech markets in the US and China. And Chris Garabedian, the CEO of Xontogeny, the life sciences accelerator that collaborates with entrepreneurs, scientific founders, and first time CEOs to offer investment, operational support, network access, and mentorship. Daphne, Brad, and Chris, welcome and thanks for spending some time with us.
DAPHNE ZOHAR: Thank you for having us.
ALEX PHILIPPIDIS: We look forward to turning the tables a bit. You've been hosting Biotech Clubhouse interviewing some fascinating guests. Now, we have you in the hot seat. First off, how did you three get together to launch Biotech Clubhouse? Had you work together before?
CHRIS GARABEDIAN: Yeah. Maybe I'll start. And we all knew each other from the industry. And so I think we had good interactions and working relationships. But the genesis of Biotech Clubhouse was the three of us were invited within a one- or two-day period back in early 2021 by Ethan Perlstein who's also well known in biotech. And he was an early investor in the Clubhouse app.
CHRIS GARABEDIAN: And so he was trying to generate more interest from the biotech community to be on Clubhouse. I had never heard of it. I accepted it. And when you first log on and you realize it's audio-only app, it's actually pretty cool. And you realize that, OK, this is a different way of communicating on social media without needing to be in front of your computer on Zoom, like we are now and on video.
CHRIS GARABEDIAN: And so it really provided a lot of flexibility. So I saw that Brad had-- it tells you who else you know that has joined. And I said, wow, this is pretty cool. And I think Brad got on a chat. And I said, hey, why don't we try to do a post-JP Morgan review. And if nobody shows up, maybe just and I will talk about it and what we thought.
CHRIS GARABEDIAN: And so that's how it started. And to our surprise, we had over 150 people show up to listen to us chat about post-JP Morgan and what was the news of the week. And we realized that wow, there is interest here. And we did a little bit of work to try to promote to try to get more people on the app. We got free passes. We could extend invites.
CHRIS GARABEDIAN: And Daphne was also learning about the app around the same time. And I think she realized this. She maybe listened to us. You can describe, Daphne. But within a month or two, she's like, hey, guys. I'd love to help you guys out. I'd love to join you. And we're like, wow, that'd be great to have another moderator.
CHRIS GARABEDIAN: And really we feel that we each bring something complementary from an experience standpoint to the table. We each have different levels of expertise, different experiences. And so we just thought Daphne would be a great addition. It also helped to have some diversity and have a woman on the panel. But ultimately, that's how it started.
CHRIS GARABEDIAN: And she was so good that we're like, OK, this is the permanent moderator team. And it just grew from there and built momentum. Brad, because you were the next one on. And then Daphne can share her experience.
BRAD LONCAR: Yeah I'll give credit where credit is due. I think more experimenting. Chris was really the driving force behind. Let's do something regular and official. I think he saw the magic even before I did. And it's just fun. Biotech news, there's so many experts in our industry on Twitter and just around. And so many people have expertise to contribute. And the written form on Twitter only goes so far.
BRAD LONCAR: You only have so many characters. And to be able to hear these experts actually vocally educate us on topics is just a really powerful medium. So I think it's taking what's always already been great on Twitter for the last decade or so and just taking it to a next level in a new format. And I'll also add the timing was perfect. This was still a year into the pandemic, like in the winter when we were all stuck in our houses and not really able to enjoy weekends out.
BRAD LONCAR: And so it just worked. And I think people really latched on to it because it's educational. And people like to learn. And we've been able to keep up the momentum over that time. So as a host, I feel like I do it because I learn. We do a lot of research beforehand to try to make it seem like we know what we're talking about. And I learn a lot through that.
BRAD LONCAR: And I learn a lot through our guests. So it's been a great experience for me. Daphne, how about you?
DAPHNE ZOHAR: So the first time I showed up, I think what's nice is you get pinged when people you know are in a room. So I showed up and it felt a little bit like going to JP Morgan or whatever. And walking into one of the parties where everyone. So it was really cool because there was this almost like a social aspect to it. But I agree with Brad. The educational piece of it is really important.
DAPHNE ZOHAR: So what happens is every week, we go over deals, FDA, data. And we split it up. And so what happens is you start reading about the data, but then you're thinking about the competitors, and you're following threads. And it's just a lot of fun learning the back stories for many of the companies in the industry that you might have just looked at on the surface before. So I really enjoyed that part of it.
ALEX PHILIPPIDIS: Now, who are you aiming to reach through Biotech Clubhouse? And do you have a sense of who tunes in each week? Are these executives, or investors, or researchers, or who?
CHRIS GARABEDIAN: It's funny. I have a companion app that tracks like the demographics and all that. It doesn't give much information, but male, female, age, and all of that. But really, we can look at some of the profiles of the people who are in the audience. And I think for me, the thing that surprised me the most is we knew that this was an audience that it skewed a little bit West Coast because it was started in Silicon Valley.
CHRIS GARABEDIAN: Everybody knew about Clubhouse. So the first people who came on were more Silicon Valley West Coast as opposed to East Coast biotech hub, et cetera. The other thing was there was a large international presence. And that surprised us how many international people were on Clubhouse. And I thought originally that we would get most of our audience that were young, early in their career looking to learn.
CHRIS GARABEDIAN: And we still have a large body that tunes in every week to just learn and feel like they get some real-time education from experienced people in the industry. But what surprises me every week is how many esteemed colleagues that we all know, they enjoy it. And it's on a Sunday. So they don't always come up on stage. They're sometimes having it on in the background, while they work.
CHRIS GARABEDIAN: But the fact that people are tuning in who we think could easily pontificate about industry issues as easily as we could, it keeps me motivated. And it keeps us on our toes to make sure we keep the content really sharp. Daphne, what do you think? Or Brad?
BRAD LONCAR: I was just going to say, one thing that I think has really been like the highest complement is every week, we aim to have a newsmaker as a special guest. And one thing I've noticed is that over time, sometimes, you'll see those people the following week or the week after in our audience. And I think that's the ultimate compliment that it's a rich discussion. And it's helpful even to those people that are at the highest levels of our industry.
ALEX PHILIPPIDIS: Now, what have been some of your personal highlights in that vein? I know you've had some noteworthy guests. Martin Shkreli comes to mind and some others.
DAPHNE ZOHAR: I'll be happy to address. We've had some great guests. So for example, John Maraganore, when he left Alnylam, came on. Jan Skvarka after he did the deal with Trillium and Pfizer. Bob Nelson was an amazing guest. He's so forward looking. And he's a good friend. Paul Hastings, I thought was really also really informative and just so thoughtful. And Derek Lowe is great.
DAPHNE ZOHAR: And we get people every week, certain investors and analysts like Josh Zimmer. Brian [? Skorney, ?] they sometimes show up in the audience. And when we see them, we'll pull them up. Mike Eke has come on a few times and giving high level impressions of the industry. Actually, the Martin Shkreli thing was interesting because people gave us feedback saying, why are you giving him a platform, and all of this?
DAPHNE ZOHAR: But honestly, he showed up in the audience. And I think people were interested to hear from him. So during the QA, we brought him up. And he started talking about some of the AI things that he's doing. And it was, I thought, very interesting. And I think people were interested to understand what was going on, and what did it feel like to be banned from biotech.
DAPHNE ZOHAR: But he wasn't necessarily somebody that we invited on as a guest.
CHRIS GARABEDIAN: And I'll just say, it was disappointing a little bit because he was more focused than some of the questions that were based on his new interest in crypto and all of this. Look, he's a newsmaker in biotech. And so we made the decision. Hey, let's have him up. It was like three days or so after he got released. So it was his first, I think, appearance. And we just didn't want to be in the role of censoring where there was some interest, as Daphne said, people wanted to.
CHRIS GARABEDIAN: But just to add to Daphne's list of attendees. So besides Bob Nelson, we do have other investors like Bruce Booth, Peter [? Kuczynski. ?] He's been on before. And we also have reporters who come on from some of the major media outlets. The fun thing about John Marganore's visit is that we had Adam Feuerstein and Damian Garde on when they just broke the Aduhelm news.
CHRIS GARABEDIAN: And so it was pretty neat to hear John and the interplay there. And just even in the last couple of weeks, we had the CEO of Bluebird, the CEO of Kite on notable news. So and I got to give credit to Brad and Daphne. They're always on top of it before I am of who should we invite this week? What are the newsmakers? And between the three of us, we usually can land somebody decent.
CHRIS GARABEDIAN: And a lot of, it's late notice. And they have plans for the Sunday. And so we fall short. And we still get a good audience even when we don't have a special guest, even though that's the goal every week. But Brad, what's your feeling about the best highlights of the guest we've had?
BRAD LONCAR: So I normally don't single people out. But I actually do have a favorite and somebody who you all will know very well. When Intellia had their first in-vivo CRISPR data, we had Theodore Erna from UC Berkeley on. And he's not only mega insightful. As you know, he's so charismatic and fun. And that's what I think Clubhouse is about too. We do have a lot of college students and post-docs and people like that in the audience.
BRAD LONCAR: And so to be able to talk about something that heavy but also make it fun and entertaining, to me, he was the perfect guest.
CHRIS GARABEDIAN: And I just to add--
KEVIN DAVIES: That's why we have him in the State of Biotech as well. So you're clearly having fun. Do you plan to keep the show going until you--
CHRIS GARABEDIAN: Yeah. It's tough because we're all so busy. And it is a Sunday. And I'm sure all of our families and friends are looking for time. It's a train. But I think, look, we're going to try to live up to the spirit of Biotech Clubhouse moving forward and try to figure out a way to continue to provide content and forums.
CHRIS GARABEDIAN: Look, there's other great forums out there. STATS podcasts, they do a great job. Luke Timmerman does interviews and all of that. I just have to comment on the [INAUDIBLE].. I always mispronounce his name. But that one got more Twitter shoutouts saying, it was like the gem and the best. Because it went like over two hours, I think, Brad. And it was really a deep exchange.
CHRIS GARABEDIAN: And we would love to achieve that, but it's partly the dynamic of the guest, what they're willing to talk about, the audience interaction. We had a lot of audience interaction. And the only disappointing thing that I've had is that there's a lot of shy folks. And they started this chat room where people are more comfortable writing things in the chat instead of raising their hand to come on stage, which allowed a little bit more of a dynamic interaction when people are on stage.
ALEX PHILIPPIDIS: Well, for the-- oh, before we move to the State of Biotech, which is really why we invited you to get your opinions on where things are and where things are going, so if anyone wants to tune in to your program, they just open-- they need the Clubhouse app or they can view this on a desktop? How do they find you?
DAPHNE ZOHAR: We might experiment with Twitter spaces, by the way. I think the best way to find us is there's a Biotech Clubhouse avatar whatever on Twitter. Of course, Brad and Chris always tweet out where it's going to be. But it's usually
4: 00 PM on a Sunday.
4: And if you just go to Biotech Clubhouse, biotechch on Twitter, you get the update.
CHRIS GARABEDIAN: And it's a free app. So anybody can download it on Android.
KEVIN DAVIES: You're going to be part of some special club now. It's a joy and anyone can walk in. And potentially, get elevated to speaker if this trio likes the [INAUDIBLE]
DAPHNE ZOHAR: You'll get pulled up if we see you. Yeah, we'll pull you up.
KEVIN DAVIES: That's great. Look forward to it. So let's talk about the state of the business of biotech. It's been very interesting, to say the least, 12 or 18 months. And I'm sure you all have opinions as to how healthy the sector is right now, given the pretty significant declines that we've seen. And we're still seem to be struggling. I'm not sure if you think we've bottomed out and things are going to get rosier, or if we're still in for some pretty dark days.
KEVIN DAVIES: Chris, let's start with you. How would you view the sector right now?
CHRIS GARABEDIAN: And I'll just say each of us have such a different perspective on this. I spent the first 25 years of my career in operating companies. But the last five years as an investor. So we do seed in series A investments. I run the venture funds for perceptive advisors. And then I have an accelerator that does seeds. And I can tell you while we are all looking for the bright spots, and I think we've seen a lot of good news events and some movement and some deals in the last few weeks, I think coming out of the real exuberant times over the last five years, it's going to take some time to work through that.
CHRIS GARABEDIAN: And I guess the way I would describe it is, I think we have bottomed out. Meaning that other than a macro event, World War III or something like that, that's going to take all of the markets down, I think biotech most feel-- it's not going to be able to go much lower. There's public companies trading still around cash, et cetera. So the question is, are we going to have some more bearish moves?
CHRIS GARABEDIAN: But I think are we going to go sideways for a while and for how long? Because I think it could take a while before we get back to the very, I'll call it, hyper bull market we were in. And I think that the other factor that's contributing to that is that-- and I would say going back to 2017, when we started to see more company creation and venture investment followed with much larger investments.
CHRIS GARABEDIAN: Record setting almost year after year. And what that did is it stayed up, it moved off of the steady state where biotech probably has a good equilibrium of being able to support new companies, a good level of investment, a good quality to bring to IPO. And so we have an inventory now of both public and private companies that is unprecedented.
CHRIS GARABEDIAN: And now, we have to see how we bleed off that inventory through consolidation, through M&A, through bankruptcy. All of those things need to happen. We've always had a challenge with talent pool that can successfully move these companies forward. We've really never had an issue with there's not enough money or there's not enough good science and technology. So we've just ramped both of those up.
CHRIS GARABEDIAN: Great technologies that we've ever seen before. More money than we know what to do with. But we need to make sure that we're thoughtful, disciplined. We prioritize, and we don't get carried away with bigger and bigger rounds. But Daphne had a company that was started recently that we just highlighted the co-founders of Karuna. We need more and more of those types of successes to give the broader investment community confidence that there's more and more of these.
CHRIS GARABEDIAN: Biotech is not going away. Let me be clear that the industry will always attract investment because you can still take an asset from preclinical, get to a clinical proof of concept, and it could be bought by a pharma company for billions. And as long as that stays true, we're going to be fine. It's just how do we work out some of the excess that we've seen over the last five years.
CHRIS GARABEDIAN: But I'll let the others comment as well.
KEVIN DAVIES: Brad, let's go to you.
BRAD LONCAR: Sure. So since I'm a stock market person, I do ETFs. I'll tackle this from a stock market perspective. So biotech peaked in February of last year. And it was actually the first sector of the stock market to turn down. And I think if we realistically-- I agree with everything that Chris said. The fundamentals today are very sound. I'll talk a little bit more about that in a second.
BRAD LONCAR: But I think if we look back on things realistically, we were in a bubble a year and a half ago. And I think that with the pandemic and biotech being front and center every single day, that money was just of thrown indiscriminately at our sector. And it caused the current crop of existing biotech companies to get out of control. And that's even some good things. I know you all focus on CRISPR a lot.
BRAD LONCAR: CRISPR is real. CRISPR is here. And it's going to have a huge impact on many diseases. But the valuations a year and a half ago just got out of control. Because people wanted to throw money at the word, CRISPR, without really understanding drug development, and the timelines, and the risks, and things. And then in conjunction with that, we've had an unprecedented number of IPOs.
BRAD LONCAR: There have been a lot of great companies like Karuna and others. But the bar was very low to go public in 2020 and 2021. And you had a lot of early stage, many preclinical, unproven, not passed the proof of concept yet type of companies that were able to go public that probably shouldn't have. And as Chris was describing, that's starting to sort itself out.
BRAD LONCAR: And it's still going to take a lot of time to sort out. Now, I agree I think that we've bottomed. And the things that fundamentally determine our sector, all of the arrows are pointed in the right direction right now. You have big clinical trial successes. You had Karuna reinventing how to treat schizophrenia and other types of psychosis. Alnylam proving that RNA and AI can reach a broader population.
BRAD LONCAR: So some of these really key data releases have been positive. And that's the most important thing. What value are we delivering to patients? You're starting to see M&A finally wake up. Bristol bought Global Blood.
KEVIN DAVIES: Pfizer.
BRAD LONCAR: I'm sorry. Yeah, Pfizer. Bristol bought Turning Point. You're seeing those multibillion dollar deals start to happen. And that's starting to excite things. And I also think from a regulatory standpoint, there's been a turn for the positive. And I think this was really underappreciated. But the two-day AdCom for the Bluebird gene therapies, I think is a boon for the entire gene therapy sector because it really validated from outside expert perspectives the risk-reward proposition for gene therapies.
BRAD LONCAR: And then ultimately, the beta thalassemia one was just approved recently. And that's the medicine of the future. I don't know what's going to happen with Bluebird specifically. But there's dozens and dozens of companies that are going to benefit from the positive regulatory outcome from that. So a couple of years ago, I saw stocks that had bad news trading up just because there was so much money flowing into them.
BRAD LONCAR: And today, sometimes I see because the stock market's having a terrible day, stocks that have good news, not participating, I'd much rather be where we are today than where we were two years ago. So like Chris, I don't know how long it's going to really take to get like a really strong bull market again. We're definitely not there. And probably won't be for a while.
BRAD LONCAR: But at least, fundamentally, all of the arrows are starting to point in the right direction. And it feels good to wake up in the morning and have good news. We had a year long stretch where it felt like bad news after bad news.
KEVIN DAVIES: Yes. Following you on Twitter, Brad, can be a rather dispiriting experience.
DAPHNE ZOHAR: Actually, Brad has a really nice thread of all the positive news. And he's started that back when we were really in the deep doldrums. And I agree. I think that what happened was there was something like 80% of data readouts were negative over a period of I think it was around six months. And when you have negative data readouts-- and then I just would add some of the macro things, both macro generally but also macro for biotech.
DAPHNE ZOHAR: So macro for biotech, a lot of concerns about drug pricing, patents, FTC scrutiny. These are things that we've been tracking and talking a lot about. And I think at the end of the day, all of those concerns are probably overblown. They're issues. But they're not industry disrupting issues. I think the industry is going to find ways around them, at least, as they're panning out right now.
DAPHNE ZOHAR: And then the macro issues like today, they were talking about-- Powell was talking. So you have all kinds of macro issues around inflation and things like that can really affect the sentiment more broadly. But I think that a few other things that you might see more of is there was this almost gluttony of companies that both Chris and Brad were talking about.
DAPHNE ZOHAR: But you see companies doing creative deals. So in addition to big M&A deals, and we're also seeing a lot of big pharma companies doing discovery and early research deals with significant upfront payments. So you're seeing a lot of that. But also companies doing things with each other. These royalty players coming in. So biotech to biotech deals, people doing creative financings.
DAPHNE ZOHAR: And I think that as a result of that over too many biotech companies, that piece of it is going to sort itself out. And the ones that make it through this tough period are really going to be very high quality companies.
KEVIN DAVIES: So Chris, picking up on that. Despite the difficulties of the public markets, you and your other investors still eager to invest in private early stage biotech companies?
CHRIS GARABEDIAN: The short answer is yes. But I think it's tricky because I think what the industry doesn't need right now is another 300 companies to add to the pile. So I think what a lot of early private equity investors are doing, they're first focusing on their current portfolio. So do we need to extend the runways? Are we going to get to a true value inflection? Do we have enough money to get to a clinical proof of concept readout?
CHRIS GARABEDIAN: Number two, they're starting to syndicate more and starting to get other people around the table even where maybe they've closed the series A, and they want to invite new investors into the series B, and maybe even a flat round or a down round. So I think there's more flexibility to keep those companies that they like going forward. So we're seeing that. And then thirdly, VC, when times are really great, they deploy capital very quickly.
CHRIS GARABEDIAN: And they go out and raise the next fund. So we were seeing a lot of VCs raise, every year, a new fund. And that's easy to do when they're like, oh, look at this portfolio we just did. We've already taken five companies public. And look at their mark. When times are tough, it's exactly the opposite. They're going to say, well, wait, how many exits do you have from the last fund?
CHRIS GARABEDIAN: Well, none. How are those that you took public doing? Oh, they're trading below the IPO price. So what happens is most VCs have a-- venture funds have a four-year investment window. And so we could easily find enough good companies to deploy that capital in a year, if for our fund. We want to make sure we extend that out. So you're starting to see a slower pace of private investing, keeping more of that dry powder there longer.
CHRIS GARABEDIAN: But also, what that means is the bar goes up. It's more discerning. We might say no to a company that maybe two years ago, we would have said yes to. And I think overall, that is good for the industry that discernment and choosing the best of the lot and not just deploying capital because we have money and times are good.
KEVIN DAVIES: Yeah. Alex, let me pass it back to you.
ALEX PHILIPPIDIS: Sure. Thanks, Kevin. Chris, just to follow up. You've talked about the effect on private financing. What effect has the market had on the ramp up of companies, which I know is Xontogony specializes in? Do they mature slower as a result?
CHRIS GARABEDIAN: No. It's an interesting question. We call ourselves an accelerator. And the reason we do that is that we think drug development can be done more successfully, more efficiently, and more quickly than industry average. So we really prioritize getting into that clinical proof of concept study. From the time we invest, when we don't even haven't even done IND enabling work, we have our eyes set on that's the goal and everything we do from planning to pre-IND meeting, et cetera.
CHRIS GARABEDIAN: So we take our companies play a very active management role. But drug development, it's like you can't speed up pregnancy. There's only so much you can do to squeeze the time. So it does take a while. Most of our seed investments take a couple of years before they're ready for a series A. But I do believe and I'm a big advocate for we need to call out the inefficiency in our industry.
CHRIS GARABEDIAN: Because that is where we're culpable. We can do a better job, I believe, as an industry to be more thoughtful about creative drug development, working with the FDA on problems to accelerate development, being more capital efficient. We can have leaner teams. We can do more outsourcing. You don't need a preclinical asset and build out a C-suite of 10 people and a team of 50 when you can do that on a smaller team.
CHRIS GARABEDIAN: So I think that is where the industry is starting to shift. It's easy when you've got $1,000,000,000 fund. And you put $100 million into a series A. But when times are tough, I think people go back to the austerity, and to really being thoughtful about what do we actually need to drive this program forward for value. And Daphne, I think you do-- PureTech shares a lot of that theme, if you want to talk to that.
KEVIN DAVIES: Yeah. Daphne, how does that affect PureTech Health? For more or fewer entities as a result of the market change.
DAPHNE ZOHAR: And we grew PureTech up during an age of austerity. So we're very used to being frugal. In fact, when we were first getting off the ground, we had no resources. We built PureTech from scratch. So the idea that you make do with what you have, you figure it out, and you do the experiments that are going to drive the most value, you don't build an empire.
DAPHNE ZOHAR: That's in our DNA. So in this type of environment, we feel really comfortable. And I think the key thing for us is we're trying to really change the treatment paradigm for patients in areas where they don't have options. And in doing so, that gives you a focus. And you say, OK, well, what's it going to take to be convinced that we have something real here? And if we don't, let's kill it.
DAPHNE ZOHAR: Let's not do any more work on it. So let's try to set up experiments that kill the project early. And, of course, you need to learn also to accelerate at the right time. So once you have something and you know that it's real, then you go all in. But that ability to go between being really frugal and really focused to going all in and accelerating is something that I think as an entrepreneur, you pick up-- either it comes to you, or you pick it up.
DAPHNE ZOHAR: But I don't think that you can just do a one-size-fits-all. When you're in tough times, you can't just spend like crazy. Austerity is good. It makes you go back and look and say, what are we most excited about? And to focus resources on that.
ALEX PHILIPPIDIS: Brad, just more of a macro question. How has COVID and economic challenges affected the growth of biotech in China, especially but also, to a degree, Asia-Pacific?
BRAD LONCAR: So before like 2018, there was no biotech in China. And that's what's so exciting about it, is that what's going on in China today is like if you went back in time, when Genentech was just [? IPO-ing, ?] and Amgen was just [? IPO-ing, ?] and biotech here was just getting started, that's what's been happening in China over the last four or five years. And I think one really exciting shift that's happened over the last year is for the first few years of this, most China companies were in licensing assets.
BRAD LONCAR: And while they were doing that, they were starting their own discovery work. And amazing thing is you see in the news today that the direction has reversed. You see a lot of Western companies in licensing in assets from China companies, a lot of antibody drug conjugates. The legend J&J BCMA CAR-T was just approved that's revolutionizing multiple myeloma.
BRAD LONCAR: So you're starting to see China innovation be taken from China to the outside world. So in a very short period of time, you went from a group of companies that were really just in licensing and doing fast follower type medicines to developing things that matter for the world. And as bullish as I am on China, I don't know that I would have expected it to happen that quickly.
BRAD LONCAR: But it's definitely happening today. And I think it's going to have a big impact on our entire industry globally.
ALEX PHILIPPIDIS: Kevin, over to you.
KEVIN DAVIES: Thank you. Well, let's look forward and ahead. Based on the previous answers you've given, you seem semi-optimistic that things are going to brighten. So we want to ask, how do you feel the biotech industry is looking as we head into the fall of this year in 2023? And are there any technologies or sectors in particular that you're really excited about? Chris, we'll start with you.
CHRIS GARABEDIAN: Sure. I want to give a meta theme here. So beginning with COVID, we saw a lot of new money enter the space because they were fleeing all of those sectors that were going to be impacted by COVID. And so that probably contributed to the bubble, probably contributed to the exuberance with more funds being closed, more IPOs than we've ever seen per year. And so I think what we're hearing is that it's less about the excited optimism and more about we're getting back to where it was, which was this is a specialty sector that requires specialty talent, specialty investors, people who understand how to move these programs forward.
CHRIS GARABEDIAN: And as Brad was mentioning earlier, we've seen some good readouts. And that's what we're going to need. I think it's interesting. The negative streak we were in, it reminds me a little bit of being at the blackjack table, and you're losing, losing, losing. And then it shifts. And you win, win, win.
CHRIS GARABEDIAN: And there's a little bit of that that has gone on in biotech. And so over time, it'll work itself out. There'll be some winners and losers. And we can't be too focused on those trends. But I think you need to look at the technology spaces and which ones have promise, which ones have some challenges. And I think one of the reasons we talked about on the Biotech Clubhouse, the most popular one was the [INAUDIBLE] data and [INAUDIBLE] coming on is because that was probably some of the most compelling data on a new technology that we've seen over the last few years.
CHRIS GARABEDIAN: And so there's a lot of excitement even though [? Beam ?] just had a hold. But there's a lot of excitement that this new generation of genetic editing and genetic technologies is there. However, we've also seen some challenges with AAV vector gene therapy and traditional where there's been a lot of FDA clinical holds. There's been some safety issues. We still are only looking at outside of the cancer.
CHRIS GARABEDIAN: Well, we now have the Bluebird. But we don't have that many gene therapies approved relative to the number that are in the pipeline and that have been advancing. However, on the positive side, we've seen more innovation across all treatment modalities in terms of antibodies from ADCs and bispecifics and multi-specifics. We've seen genetic technologies.
CHRIS GARABEDIAN: How many RNA technologies have moved forward in different ways? Alnylam, we've talked about. These take a long time to mature. I think even with some of the drug screening and the AI machine learning and trying to do better with small molecule. So we're just seeing a lot of innovation around a lot of these modalities. And I think for the first time in the last five or 10 years, we've seen a disease that could be conquered with multiple modalities that are all competing against each other.
CHRIS GARABEDIAN: So I just say all of that to say, I'm incredibly optimistic about where these technologies can go to treat medicine that is less about the market's going to be on fire next year. That's harder to predict and is really going to be based on data.
KEVIN DAVIES: Brad, what technologies or sectors are you most excited about?
BRAD LONCAR: So I'm always a big oncology person. And what's happening in oncology today is hugely exciting. So Chris mentioned bispecifics. The first bispecific in oncology will be approved by the end of the year. And the data has been a lot stronger than I would have ever envisioned. They're putting patients who are CAR-T relapsers back into complete responses. And to be able to do that with a late stage cancer is very special.
BRAD LONCAR: So look for bispecifics to make a lot of progress. In cell therapy, we've always wondered what's going to be the follow-up to CD19. And what J&J and others have done with BCMA and multiple myeloma is some of the best cancer data I've ever seen in my whole life. It's amazing. They have almost 100% response rate. And it's looking to be a lot more durable than we expected.
BRAD LONCAR: So I expect cell therapy to revolutionize multiple myeloma just like it did in the lymphomas and leukemias. And then an under the radar thing, we've been very disappointed on how cell therapies haven't really succeeded in solid tumors. But there was a lot of exciting things at ACR this year. So for example, BioNTech has a CAR-T. And they artificially amplified an antigen to make it stronger.
BRAD LONCAR: And so companies are starting to do a lot of interesting things like that. And on the TCR space, Immunocore had the first ever TCR approved in the US for uveal melanoma. So a lot of cool stuff happening in oncology. And then the in-vivo gene editing stuff gives me goosebumps. Intellia, their data just looks so strong. They actually did in their last earnings report mentioned that some patients had elevated liver enzymes.
BRAD LONCAR: So that's something to watch. But that's what you expect with the new technology to have starts and stops. And I'm really excited about Verv using a technology like that in something as important and as broad as heart disease. So a lot of good stuff like that.
KEVIN DAVIES: Great. Thank you. Daphne?
DAPHNE ZOHAR: Yes. I'll make two comments. I think one comment has to do with areas that I think the industry can really build on. And the second has to do with people. So I'll start with the areas that the industry can build on. So one thing that we've really enjoyed doing is to look at areas where the industry has spent a lot of money and has had successes in terms of human efficacy data.
DAPHNE ZOHAR: But the particular class was held back by some issue, whether it be a tolerability issue in the case of muscarinic agonists and [INAUDIBLE] and what we were able to do there with the CAR-T program or other areas where the industry goes all in, but they're missing, for example, a way to address, for example, delivery. And you see what kind of an impact lipid nanoparticles had in both CRISPR and also in mRNA.
DAPHNE ZOHAR: So the idea that you can take and build on existing classes of medicine to unlock them is something that we're personally very excited about. I'm personally very excited about. We at PureTech are doing a lot of work in. And then in terms of people, one thing I wanted to say is when you go through these hard times, you get really good people who get caught up in just the environment.
DAPHNE ZOHAR: And I personally, would far rather have people around me that have gone through hell in terms of being through a really tough time maybe not having all the successes rather than having somebody who just happened to be there at the right place, at the right time. And so what I'll just say about our industry is we've got so many amazing people. And some of them are going through tough times right now.
DAPHNE ZOHAR: But I, personally, think those are the people that I'm most excited about working with in the future.
KEVIN DAVIES: That's great. Alex, we don't have a lot of time left. But I know we have a rapid fire round we'd like to try to squeeze in here. So let's do that.
ALEX PHILIPPIDIS: Sure. Just some topics in the news in recent weeks that have caught our attention. First with Moderna suing Pfizer and BioNTech over patent rights to the mRNA technology. What effect, if any, do you see on RNA vaccine development? Does this slow down the field or affect COVID vaccines in development?
BRAD LONCAR: I'll jump in and take this one. As an investor, I have never once cared about a patent fight. Every major technology that comes about, there is a patent fight. There was one with CAR-T. There's still one ongoing with CRISPR. Now, there's happening with mRNA. What happens is these things get tons of media attention. And we talk incessantly about them on Twitter.
BRAD LONCAR: And then 10 years later, some like minuscule license is agreed to. And you say to yourself, what did I just spend the last decade arguing about this for? So my guess is that mRNA will probably follow that path as well.
ALEX PHILIPPIDIS: On gene therapy, Bluebird bio won FDA approval for Zynteglo. How is its list price of $2.8 million viable or justified? And how much of a challenge is that for gene therapy development given in light of the clinical success?
CHRIS GARABEDIAN: Brad, do you want to take that?
BRAD LONCAR: Well, I'll say, the jury is still out. But one thing that I think is super interesting about that is it was approved in Europe a couple of years ago. And they couldn't get payer support. And because of their financial position, literally had to shut down and leave Europe. So I think our field should be pulling for a smooth US launch even with that high price because it's really the best case study possible of the US underwriting medical innovation.
BRAD LONCAR: We as a biotech industry, I think, need to see this succeed. Because if this succeeds, future gene therapies will succeed as well. And the last thing I'll say about that is I'm not sure that price is going to be the biggest barrier to success for them. I think one thing that is underappreciated and under talked about with some of these new technologies.
BRAD LONCAR: For Bluebird, for beta thalassemia, and, ultimately, sickle cell, if it's approved, if you're a patient, you have to sign up for some pretty intense things. The myeloablation, the chemotherapy that's used for that causes infertility and hair loss. And a lot of things that would be really hard to get a teenager or college age person to sign up for you. You have to have very serious severe disease to really make that trade off.
BRAD LONCAR: And so I would watch that as well because we always talk about these things as great concepts. It's one and done. Of course, what a no-brainer. But these things are actually much more complicated when you really look at them closely.
ALEX PHILIPPIDIS: Yeah. Go ahead.
CHRIS GARABEDIAN: I'm just going to add on the Bluebird. The interesting thing about the Bluebird price [? ISIR, ?] which is the independent body that says what these products are worth, came out with the highest ever 2.1 million that they believed the drug was worthwhile. They could be justified. So I look at that, and just this past week, I think they had a couple of ALS drugs that said weren't barely worth 50,000.
CHRIS GARABEDIAN: So I think in some ways, we do have to look at each of these independently. And I know Daphne has done a lot of work just on the pricing. Because I think, Alex, part of your question was more not just Bluebird, but just the broader pricing issue around this. And I know Daphne has done a lot of work with Peter [? Kuczynski ?] on this. Do you want to just comment on that, Daphne?
DAPHNE ZOHAR: Yeah. By the way, we have an epic storm in Boston right now. So it's like thunder, lightning, rain. It's crazy. So I think that our industry in general hasn't done the best job of getting ahead of the pressures around pricing. And there's a perception issue where everybody thinks it's all the drug companies raising prices. And it's really not.
DAPHNE ZOHAR: It's the middlemen. But at the end of the day, what's happening is there is going to be more discipline around pricing. And I think that the model that has existed in the past is going to get tweaked. And we're going to have to find a way to deal with it. I think some of the drug pricing legislation is just stupid because it comes from people who don't understand the industry.
DAPHNE ZOHAR: And that's what we've been trying to do. It's almost like a third group. So there's pharma. There's bio. Then there's a group of entrepreneurs like myself and investors like Peter [? Kuczynski ?] and others who have been trying to educate lawmakers about the industry and how important it is to be able to create incentives for entrepreneurs or investors to spend the time in extremely risky decades long process.
DAPHNE ZOHAR: Because if you take away the end upside, you're going to affect probably not the biotechs that exist right now. So I actually don't think it's going to have a huge impact on the market right now. But what it's going to affect, and it's going to happen very soon, is that translation of academic innovation what's called the Valley of Death. There's going to be less academic innovations that are advanced.
DAPHNE ZOHAR: And stupidly, they've put in this negotiation that kicks in earlier for small molecules, which are actually less expensive and easier to develop. So there's a whole bunch of really uninformed pieces of this legislation that we're trying to influence. But I think that the industry did the wrong thing because they didn't interact. They came back and said, oh, what we're doing is important. And you cost $1,000,000,000 or whatever.
DAPHNE ZOHAR: They didn't realize that this was coming. And I think if they had engaged a little bit more directly understanding that this was coming, they might have had more influence on the legislation. Like I said, I don't think it affects the market in the next five years or so. In fact, it might even be better for M&A. I think it will affect that translation. And that means less new medicines in the future.
KEVIN DAVIES: That really is an epic storm, Daphne. It's the rumbling through--
DAPHNE ZOHAR: Do you see it? I don't know if you see the lights flashing. [INTERPOSING VOICES]
ALEX PHILIPPIDIS: We hear it for sure. Yes.
KEVIN DAVIES: Before we go, can we just talk about monkeypox much in the news? Do we think that vaccine development for monkeypox is going to be, maybe not on the COVID scale, but is that going to be a big deal? And if so, who are the entities we should be watching?
CHRIS GARABEDIAN: I'll just weigh in. To be perfectly honest, I didn't pay much attention to the vaccine markets until COVID hit. And for the most part, there were a lot of vaccines that continue that were on the pediatric schedule or the HPV vaccine and that have done well. And so it's not an insignificant market. It tends to be an easier pathway because of the surrogate markers in terms of investment.
CHRIS GARABEDIAN: And so I think that COVID reoriented everybody to think more deeply about vaccines, the technologies that can produce vaccines, and what that looks like for the industry. But Brad, I know you've thought about this a lot. But outside of the Moderna, Pfizer, BioNTech-- and we saw. It reminded me a little bit of Gilead when they had the HCV cure.
CHRIS GARABEDIAN: And it was lots of revenue. And then it just crashed. And they still had to figure out how they had a sustained growth over the long term. So I don't want to get too enamored and obsessed with each infectious disease. And is it going to be as big as COVID or the next COVID where there's going to be a big big vaccine play. I'm going to stick to what I know well, which is drug development and leave vaccines to the other experts.
CHRIS GARABEDIAN: But Brad, you've thought about this a lot.
BRAD LONCAR: Yeah, I have to admit. I actually don't have an opinion on monkeypox specifically. My only comment on vaccines is it's been hugely disappointing with how politically charged our country and our world is, how nonsense about vaccines has been amplified. And in some respects, been accepted by a much broader swath of the general public than I think any of us would have ever believed.
BRAD LONCAR: And just as Daphne was saying, I think our industry hasn't done a great job articulating the financial benefit of some of these drugs. I think that the mRNA vaccine save the world. I remember when they were literally digging-- there were freezer trucks outside of hospitals in every major city. It was so bad. And now, people talk about the mRNA vaccines as if they're completely useless.
BRAD LONCAR: And it's just shocking to me that it hasn't-- that that narrative has caught on as much as it has. And so I don't know what the solution to that problem is. But I just think we need a lot more science education in general in our society. And I think there's been a lot of good things that have happened over the last couple of years through science. But I think we've done a bad job of really explaining to the public how all of this works and why it's important.
KEVIN DAVIES: Yeah. Alex, we'll have Peter Hotez on tomorrow. So we'll obviously be pursuing that in more detail. Daphne, we'll give you the last word.
DAPHNE ZOHAR: I think that emerging infections and infectious disease is going to be a huge area for our industry. And I don't necessarily think monkeypox is the one that everyone's going to be really worried about. But I think that what we've learned is our public health infrastructure is not in good shape. And I do think there will be an increasing focus. And we've now seen that there's financial returns around that.
DAPHNE ZOHAR: I hope that some financial mechanisms are put into place around antibiotics and antibiotic resistance. Because I think that's another area that is really a huge threat for the world.
KEVIN DAVIES: Thank you. Alex.
ALEX PHILIPPIDIS: And just like Biotech Clubhouse, there's more to talk about. And there's time to discuss it. Daphne, Brad, and Chris, thank you so much for gifting us with your time and perspective on so many topics moving the biotech world. And thanks to you for watching. For Kevin Davies, I'm Alex Philippidis. Stay tuned for our next session on aging research and reversal as the State of Biotech rolls on.
ALEX PHILIPPIDIS: [MUSIC PLAYING]
Segment:1 Introduction to GEN Edge.
KEVIN DAVIES: GENEDGE is the premium content channel of genetic engineering and biotechnology news. The magazine that's been covering the twists and turns of the biotech industry for four decades. GENEDGE offers exclusive in-depth reports from the front lines of biotech delivered right to your inbox focusing on business trends and opportunities, and spotlighting the most exciting startups and funding rounds shaping the industry.
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ALEX PHILIPPIDIS: We deliver a lively authoritative curated set of stories each week profiling dynamic new biotech companies. Sitting down with founding CEOs and other key executives, researchers, and analysts from the leading edge of biotech.
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Segment:2 How's the biotechnology business?.
KEVIN DAVIES: [MUSIC PLAYING]
KEVIN DAVIES: Moving along here at the State of Biotech. I'm Kevin Davies, executive editor of The CRISPR journal and GEN Biotechnology. The new marquee peer review journal offering original research and perspectives across all aspects of biotech. We'd love to consider your research today at www.genbiotechjournal.com
ALEX PHILIPPIDIS: I'm Alex Philippidis, senior business editor with GEN. Our next guests know a thing or two about the state of biotech so much so that they've been hosting their own show, Biotech Clubhouse, the Sunday Hangout and Weekly Review as they call it biotech news and analysis broadcasting live every Sunday at 4:00 PM Eastern, 1:00 PM Pacific on the Clubhouse app. We're pleased to welcome Daphne Zohar. The founder and CEO of PureTech Health, which has built a pipeline of 27 therapeutics and drug candidates, including two drugs approved in the US and Europe.
ALEX PHILIPPIDIS: Also, Brad Loncar, CEO of Loncar Investments and a longtime watcher of the biotech markets in the US and China. And Chris Garabedian, the CEO of Xontogeny, the life sciences accelerator that collaborates with entrepreneurs, scientific founders, and first time CEOs to offer investment, operational support, network access, and mentorship. Daphne, Brad, and Chris, welcome and thanks for spending some time with us.
DAPHNE ZOHAR: Thank you for having us.
ALEX PHILIPPIDIS: We look forward to turning the tables a bit. You've been hosting Biotech Clubhouse interviewing some fascinating guests. Now, we have you in the hot seat. First off, how did you three get together to launch Biotech Clubhouse? Had you work together before?
CHRIS GARABEDIAN: Yeah. Maybe I'll start. And we all knew each other from the industry. And so I think we had good interactions and working relationships. But the genesis of Biotech Clubhouse was the three of us were invited within a one- or two-day period back in early 2021 by Ethan Perlstein who's also well known in biotech. And he was an early investor in the Clubhouse app.
CHRIS GARABEDIAN: And so he was trying to generate more interest from the biotech community to be on Clubhouse. I had never heard of it. I accepted it. And when you first log on and you realize it's audio-only app, it's actually pretty cool. And you realize that, OK, this is a different way of communicating on social media without needing to be in front of your computer on Zoom, like we are now and on video.
CHRIS GARABEDIAN: And so it really provided a lot of flexibility. So I saw that Brad had-- it tells you who else you know that has joined. And I said, wow, this is pretty cool. And I think Brad got on a chat. And I said, hey, why don't we try to do a post-JP Morgan review. And if nobody shows up, maybe just and I will talk about it and what we thought.
CHRIS GARABEDIAN: And so that's how it started. And to our surprise, we had over 150 people show up to listen to us chat about post-JP Morgan and what was the news of the week. And we realized that wow, there is interest here. And we did a little bit of work to try to promote to try to get more people on the app. We got free passes. We could extend invites.
CHRIS GARABEDIAN: And Daphne was also learning about the app around the same time. And I think she realized this. She maybe listened to us. You can describe, Daphne. But within a month or two, she's like, hey, guys. I'd love to help you guys out. I'd love to join you. And we're like, wow, that'd be great to have another moderator.
CHRIS GARABEDIAN: And really we feel that we each bring something complementary from an experience standpoint to the table. We each have different levels of expertise, different experiences. And so we just thought Daphne would be a great addition. It also helped to have some diversity and have a woman on the panel. But ultimately, that's how it started.
CHRIS GARABEDIAN: And she was so good that we're like, OK, this is the permanent moderator team. And it just grew from there and built momentum. Brad, because you were the next one on. And then Daphne can share her experience.
BRAD LONCAR: Yeah I'll give credit where credit is due. I think more experimenting. Chris was really the driving force behind. Let's do something regular and official. I think he saw the magic even before I did. And it's just fun. Biotech news, there's so many experts in our industry on Twitter and just around. And so many people have expertise to contribute. And the written form on Twitter only goes so far.
BRAD LONCAR: You only have so many characters. And to be able to hear these experts actually vocally educate us on topics is just a really powerful medium. So I think it's taking what's always already been great on Twitter for the last decade or so and just taking it to a next level in a new format. And I'll also add the timing was perfect. This was still a year into the pandemic, like in the winter when we were all stuck in our houses and not really able to enjoy weekends out.
BRAD LONCAR: And so it just worked. And I think people really latched on to it because it's educational. And people like to learn. And we've been able to keep up the momentum over that time. So as a host, I feel like I do it because I learn. We do a lot of research beforehand to try to make it seem like we know what we're talking about. And I learn a lot through that.
BRAD LONCAR: And I learn a lot through our guests. So it's been a great experience for me. Daphne, how about you?
DAPHNE ZOHAR: So the first time I showed up, I think what's nice is you get pinged when people you know are in a room. So I showed up and it felt a little bit like going to JP Morgan or whatever. And walking into one of the parties where everyone. So it was really cool because there was this almost like a social aspect to it. But I agree with Brad. The educational piece of it is really important.
DAPHNE ZOHAR: So what happens is every week, we go over deals, FDA, data. And we split it up. And so what happens is you start reading about the data, but then you're thinking about the competitors, and you're following threads. And it's just a lot of fun learning the back stories for many of the companies in the industry that you might have just looked at on the surface before. So I really enjoyed that part of it.
ALEX PHILIPPIDIS: Now, who are you aiming to reach through Biotech Clubhouse? And do you have a sense of who tunes in each week? Are these executives, or investors, or researchers, or who?
CHRIS GARABEDIAN: It's funny. I have a companion app that tracks like the demographics and all that. It doesn't give much information, but male, female, age, and all of that. But really, we can look at some of the profiles of the people who are in the audience. And I think for me, the thing that surprised me the most is we knew that this was an audience that it skewed a little bit West Coast because it was started in Silicon Valley.
CHRIS GARABEDIAN: Everybody knew about Clubhouse. So the first people who came on were more Silicon Valley West Coast as opposed to East Coast biotech hub, et cetera. The other thing was there was a large international presence. And that surprised us how many international people were on Clubhouse. And I thought originally that we would get most of our audience that were young, early in their career looking to learn.
CHRIS GARABEDIAN: And we still have a large body that tunes in every week to just learn and feel like they get some real-time education from experienced people in the industry. But what surprises me every week is how many esteemed colleagues that we all know, they enjoy it. And it's on a Sunday. So they don't always come up on stage. They're sometimes having it on in the background, while they work.
CHRIS GARABEDIAN: But the fact that people are tuning in who we think could easily pontificate about industry issues as easily as we could, it keeps me motivated. And it keeps us on our toes to make sure we keep the content really sharp. Daphne, what do you think? Or Brad?
BRAD LONCAR: I was just going to say, one thing that I think has really been like the highest complement is every week, we aim to have a newsmaker as a special guest. And one thing I've noticed is that over time, sometimes, you'll see those people the following week or the week after in our audience. And I think that's the ultimate compliment that it's a rich discussion. And it's helpful even to those people that are at the highest levels of our industry.
ALEX PHILIPPIDIS: Now, what have been some of your personal highlights in that vein? I know you've had some noteworthy guests. Martin Shkreli comes to mind and some others.
DAPHNE ZOHAR: I'll be happy to address. We've had some great guests. So for example, John Maraganore, when he left Alnylam, came on. Jan Skvarka after he did the deal with Trillium and Pfizer. Bob Nelson was an amazing guest. He's so forward looking. And he's a good friend. Paul Hastings, I thought was really also really informative and just so thoughtful. And Derek Lowe is great.
DAPHNE ZOHAR: And we get people every week, certain investors and analysts like Josh Zimmer. Brian [? Skorney, ?] they sometimes show up in the audience. And when we see them, we'll pull them up. Mike Eke has come on a few times and giving high level impressions of the industry. Actually, the Martin Shkreli thing was interesting because people gave us feedback saying, why are you giving him a platform, and all of this?
DAPHNE ZOHAR: But honestly, he showed up in the audience. And I think people were interested to hear from him. So during the QA, we brought him up. And he started talking about some of the AI things that he's doing. And it was, I thought, very interesting. And I think people were interested to understand what was going on, and what did it feel like to be banned from biotech.
DAPHNE ZOHAR: But he wasn't necessarily somebody that we invited on as a guest.
CHRIS GARABEDIAN: And I'll just say, it was disappointing a little bit because he was more focused than some of the questions that were based on his new interest in crypto and all of this. Look, he's a newsmaker in biotech. And so we made the decision. Hey, let's have him up. It was like three days or so after he got released. So it was his first, I think, appearance. And we just didn't want to be in the role of censoring where there was some interest, as Daphne said, people wanted to.
CHRIS GARABEDIAN: But just to add to Daphne's list of attendees. So besides Bob Nelson, we do have other investors like Bruce Booth, Peter [? Kuczynski. ?] He's been on before. And we also have reporters who come on from some of the major media outlets. The fun thing about John Marganore's visit is that we had Adam Feuerstein and Damian Garde on when they just broke the Aduhelm news.
CHRIS GARABEDIAN: And so it was pretty neat to hear John and the interplay there. And just even in the last couple of weeks, we had the CEO of Bluebird, the CEO of Kite on notable news. So and I got to give credit to Brad and Daphne. They're always on top of it before I am of who should we invite this week? What are the newsmakers? And between the three of us, we usually can land somebody decent.
CHRIS GARABEDIAN: And a lot of, it's late notice. And they have plans for the Sunday. And so we fall short. And we still get a good audience even when we don't have a special guest, even though that's the goal every week. But Brad, what's your feeling about the best highlights of the guest we've had?
BRAD LONCAR: So I normally don't single people out. But I actually do have a favorite and somebody who you all will know very well. When Intellia had their first in-vivo CRISPR data, we had Theodore Erna from UC Berkeley on. And he's not only mega insightful. As you know, he's so charismatic and fun. And that's what I think Clubhouse is about too. We do have a lot of college students and post-docs and people like that in the audience.
BRAD LONCAR: And so to be able to talk about something that heavy but also make it fun and entertaining, to me, he was the perfect guest.
CHRIS GARABEDIAN: And I just to add--
KEVIN DAVIES: That's why we have him in the State of Biotech as well. So you're clearly having fun. Do you plan to keep the show going until you--
CHRIS GARABEDIAN: Yeah. It's tough because we're all so busy. And it is a Sunday. And I'm sure all of our families and friends are looking for time. It's a train. But I think, look, we're going to try to live up to the spirit of Biotech Clubhouse moving forward and try to figure out a way to continue to provide content and forums.
CHRIS GARABEDIAN: Look, there's other great forums out there. STATS podcasts, they do a great job. Luke Timmerman does interviews and all of that. I just have to comment on the [INAUDIBLE].. I always mispronounce his name. But that one got more Twitter shoutouts saying, it was like the gem and the best. Because it went like over two hours, I think, Brad. And it was really a deep exchange.
CHRIS GARABEDIAN: And we would love to achieve that, but it's partly the dynamic of the guest, what they're willing to talk about, the audience interaction. We had a lot of audience interaction. And the only disappointing thing that I've had is that there's a lot of shy folks. And they started this chat room where people are more comfortable writing things in the chat instead of raising their hand to come on stage, which allowed a little bit more of a dynamic interaction when people are on stage.
ALEX PHILIPPIDIS: Well, for the-- oh, before we move to the State of Biotech, which is really why we invited you to get your opinions on where things are and where things are going, so if anyone wants to tune in to your program, they just open-- they need the Clubhouse app or they can view this on a desktop? How do they find you?
DAPHNE ZOHAR: We might experiment with Twitter spaces, by the way. I think the best way to find us is there's a Biotech Clubhouse avatar whatever on Twitter. Of course, Brad and Chris always tweet out where it's going to be. But it's usually
4: 00 PM on a Sunday.
4: And if you just go to Biotech Clubhouse, biotechch on Twitter, you get the update.
CHRIS GARABEDIAN: And it's a free app. So anybody can download it on Android.
KEVIN DAVIES: You're going to be part of some special club now. It's a joy and anyone can walk in. And potentially, get elevated to speaker if this trio likes the [INAUDIBLE]
DAPHNE ZOHAR: You'll get pulled up if we see you. Yeah, we'll pull you up.
KEVIN DAVIES: That's great. Look forward to it. So let's talk about the state of the business of biotech. It's been very interesting, to say the least, 12 or 18 months. And I'm sure you all have opinions as to how healthy the sector is right now, given the pretty significant declines that we've seen. And we're still seem to be struggling. I'm not sure if you think we've bottomed out and things are going to get rosier, or if we're still in for some pretty dark days.
KEVIN DAVIES: Chris, let's start with you. How would you view the sector right now?
CHRIS GARABEDIAN: And I'll just say each of us have such a different perspective on this. I spent the first 25 years of my career in operating companies. But the last five years as an investor. So we do seed in series A investments. I run the venture funds for perceptive advisors. And then I have an accelerator that does seeds. And I can tell you while we are all looking for the bright spots, and I think we've seen a lot of good news events and some movement and some deals in the last few weeks, I think coming out of the real exuberant times over the last five years, it's going to take some time to work through that.
CHRIS GARABEDIAN: And I guess the way I would describe it is, I think we have bottomed out. Meaning that other than a macro event, World War III or something like that, that's going to take all of the markets down, I think biotech most feel-- it's not going to be able to go much lower. There's public companies trading still around cash, et cetera. So the question is, are we going to have some more bearish moves?
CHRIS GARABEDIAN: But I think are we going to go sideways for a while and for how long? Because I think it could take a while before we get back to the very, I'll call it, hyper bull market we were in. And I think that the other factor that's contributing to that is that-- and I would say going back to 2017, when we started to see more company creation and venture investment followed with much larger investments.
CHRIS GARABEDIAN: Record setting almost year after year. And what that did is it stayed up, it moved off of the steady state where biotech probably has a good equilibrium of being able to support new companies, a good level of investment, a good quality to bring to IPO. And so we have an inventory now of both public and private companies that is unprecedented.
CHRIS GARABEDIAN: And now, we have to see how we bleed off that inventory through consolidation, through M&A, through bankruptcy. All of those things need to happen. We've always had a challenge with talent pool that can successfully move these companies forward. We've really never had an issue with there's not enough money or there's not enough good science and technology. So we've just ramped both of those up.
CHRIS GARABEDIAN: Great technologies that we've ever seen before. More money than we know what to do with. But we need to make sure that we're thoughtful, disciplined. We prioritize, and we don't get carried away with bigger and bigger rounds. But Daphne had a company that was started recently that we just highlighted the co-founders of Karuna. We need more and more of those types of successes to give the broader investment community confidence that there's more and more of these.
CHRIS GARABEDIAN: Biotech is not going away. Let me be clear that the industry will always attract investment because you can still take an asset from preclinical, get to a clinical proof of concept, and it could be bought by a pharma company for billions. And as long as that stays true, we're going to be fine. It's just how do we work out some of the excess that we've seen over the last five years.
CHRIS GARABEDIAN: But I'll let the others comment as well.
KEVIN DAVIES: Brad, let's go to you.
BRAD LONCAR: Sure. So since I'm a stock market person, I do ETFs. I'll tackle this from a stock market perspective. So biotech peaked in February of last year. And it was actually the first sector of the stock market to turn down. And I think if we realistically-- I agree with everything that Chris said. The fundamentals today are very sound. I'll talk a little bit more about that in a second.
BRAD LONCAR: But I think if we look back on things realistically, we were in a bubble a year and a half ago. And I think that with the pandemic and biotech being front and center every single day, that money was just of thrown indiscriminately at our sector. And it caused the current crop of existing biotech companies to get out of control. And that's even some good things. I know you all focus on CRISPR a lot.
BRAD LONCAR: CRISPR is real. CRISPR is here. And it's going to have a huge impact on many diseases. But the valuations a year and a half ago just got out of control. Because people wanted to throw money at the word, CRISPR, without really understanding drug development, and the timelines, and the risks, and things. And then in conjunction with that, we've had an unprecedented number of IPOs.
BRAD LONCAR: There have been a lot of great companies like Karuna and others. But the bar was very low to go public in 2020 and 2021. And you had a lot of early stage, many preclinical, unproven, not passed the proof of concept yet type of companies that were able to go public that probably shouldn't have. And as Chris was describing, that's starting to sort itself out.
BRAD LONCAR: And it's still going to take a lot of time to sort out. Now, I agree I think that we've bottomed. And the things that fundamentally determine our sector, all of the arrows are pointed in the right direction right now. You have big clinical trial successes. You had Karuna reinventing how to treat schizophrenia and other types of psychosis. Alnylam proving that RNA and AI can reach a broader population.
BRAD LONCAR: So some of these really key data releases have been positive. And that's the most important thing. What value are we delivering to patients? You're starting to see M&A finally wake up. Bristol bought Global Blood.
KEVIN DAVIES: Pfizer.
BRAD LONCAR: I'm sorry. Yeah, Pfizer. Bristol bought Turning Point. You're seeing those multibillion dollar deals start to happen. And that's starting to excite things. And I also think from a regulatory standpoint, there's been a turn for the positive. And I think this was really underappreciated. But the two-day AdCom for the Bluebird gene therapies, I think is a boon for the entire gene therapy sector because it really validated from outside expert perspectives the risk-reward proposition for gene therapies.
BRAD LONCAR: And then ultimately, the beta thalassemia one was just approved recently. And that's the medicine of the future. I don't know what's going to happen with Bluebird specifically. But there's dozens and dozens of companies that are going to benefit from the positive regulatory outcome from that. So a couple of years ago, I saw stocks that had bad news trading up just because there was so much money flowing into them.
BRAD LONCAR: And today, sometimes I see because the stock market's having a terrible day, stocks that have good news, not participating, I'd much rather be where we are today than where we were two years ago. So like Chris, I don't know how long it's going to really take to get like a really strong bull market again. We're definitely not there. And probably won't be for a while.
BRAD LONCAR: But at least, fundamentally, all of the arrows are starting to point in the right direction. And it feels good to wake up in the morning and have good news. We had a year long stretch where it felt like bad news after bad news.
KEVIN DAVIES: Yes. Following you on Twitter, Brad, can be a rather dispiriting experience.
DAPHNE ZOHAR: Actually, Brad has a really nice thread of all the positive news. And he's started that back when we were really in the deep doldrums. And I agree. I think that what happened was there was something like 80% of data readouts were negative over a period of I think it was around six months. And when you have negative data readouts-- and then I just would add some of the macro things, both macro generally but also macro for biotech.
DAPHNE ZOHAR: So macro for biotech, a lot of concerns about drug pricing, patents, FTC scrutiny. These are things that we've been tracking and talking a lot about. And I think at the end of the day, all of those concerns are probably overblown. They're issues. But they're not industry disrupting issues. I think the industry is going to find ways around them, at least, as they're panning out right now.
DAPHNE ZOHAR: And then the macro issues like today, they were talking about-- Powell was talking. So you have all kinds of macro issues around inflation and things like that can really affect the sentiment more broadly. But I think that a few other things that you might see more of is there was this almost gluttony of companies that both Chris and Brad were talking about.
DAPHNE ZOHAR: But you see companies doing creative deals. So in addition to big M&A deals, and we're also seeing a lot of big pharma companies doing discovery and early research deals with significant upfront payments. So you're seeing a lot of that. But also companies doing things with each other. These royalty players coming in. So biotech to biotech deals, people doing creative financings.
DAPHNE ZOHAR: And I think that as a result of that over too many biotech companies, that piece of it is going to sort itself out. And the ones that make it through this tough period are really going to be very high quality companies.
KEVIN DAVIES: So Chris, picking up on that. Despite the difficulties of the public markets, you and your other investors still eager to invest in private early stage biotech companies?
CHRIS GARABEDIAN: The short answer is yes. But I think it's tricky because I think what the industry doesn't need right now is another 300 companies to add to the pile. So I think what a lot of early private equity investors are doing, they're first focusing on their current portfolio. So do we need to extend the runways? Are we going to get to a true value inflection? Do we have enough money to get to a clinical proof of concept readout?
CHRIS GARABEDIAN: Number two, they're starting to syndicate more and starting to get other people around the table even where maybe they've closed the series A, and they want to invite new investors into the series B, and maybe even a flat round or a down round. So I think there's more flexibility to keep those companies that they like going forward. So we're seeing that. And then thirdly, VC, when times are really great, they deploy capital very quickly.
CHRIS GARABEDIAN: And they go out and raise the next fund. So we were seeing a lot of VCs raise, every year, a new fund. And that's easy to do when they're like, oh, look at this portfolio we just did. We've already taken five companies public. And look at their mark. When times are tough, it's exactly the opposite. They're going to say, well, wait, how many exits do you have from the last fund?
CHRIS GARABEDIAN: Well, none. How are those that you took public doing? Oh, they're trading below the IPO price. So what happens is most VCs have a-- venture funds have a four-year investment window. And so we could easily find enough good companies to deploy that capital in a year, if for our fund. We want to make sure we extend that out. So you're starting to see a slower pace of private investing, keeping more of that dry powder there longer.
CHRIS GARABEDIAN: But also, what that means is the bar goes up. It's more discerning. We might say no to a company that maybe two years ago, we would have said yes to. And I think overall, that is good for the industry that discernment and choosing the best of the lot and not just deploying capital because we have money and times are good.
KEVIN DAVIES: Yeah. Alex, let me pass it back to you.
ALEX PHILIPPIDIS: Sure. Thanks, Kevin. Chris, just to follow up. You've talked about the effect on private financing. What effect has the market had on the ramp up of companies, which I know is Xontogony specializes in? Do they mature slower as a result?
CHRIS GARABEDIAN: No. It's an interesting question. We call ourselves an accelerator. And the reason we do that is that we think drug development can be done more successfully, more efficiently, and more quickly than industry average. So we really prioritize getting into that clinical proof of concept study. From the time we invest, when we don't even haven't even done IND enabling work, we have our eyes set on that's the goal and everything we do from planning to pre-IND meeting, et cetera.
CHRIS GARABEDIAN: So we take our companies play a very active management role. But drug development, it's like you can't speed up pregnancy. There's only so much you can do to squeeze the time. So it does take a while. Most of our seed investments take a couple of years before they're ready for a series A. But I do believe and I'm a big advocate for we need to call out the inefficiency in our industry.
CHRIS GARABEDIAN: Because that is where we're culpable. We can do a better job, I believe, as an industry to be more thoughtful about creative drug development, working with the FDA on problems to accelerate development, being more capital efficient. We can have leaner teams. We can do more outsourcing. You don't need a preclinical asset and build out a C-suite of 10 people and a team of 50 when you can do that on a smaller team.
CHRIS GARABEDIAN: So I think that is where the industry is starting to shift. It's easy when you've got $1,000,000,000 fund. And you put $100 million into a series A. But when times are tough, I think people go back to the austerity, and to really being thoughtful about what do we actually need to drive this program forward for value. And Daphne, I think you do-- PureTech shares a lot of that theme, if you want to talk to that.
KEVIN DAVIES: Yeah. Daphne, how does that affect PureTech Health? For more or fewer entities as a result of the market change.
DAPHNE ZOHAR: And we grew PureTech up during an age of austerity. So we're very used to being frugal. In fact, when we were first getting off the ground, we had no resources. We built PureTech from scratch. So the idea that you make do with what you have, you figure it out, and you do the experiments that are going to drive the most value, you don't build an empire.
DAPHNE ZOHAR: That's in our DNA. So in this type of environment, we feel really comfortable. And I think the key thing for us is we're trying to really change the treatment paradigm for patients in areas where they don't have options. And in doing so, that gives you a focus. And you say, OK, well, what's it going to take to be convinced that we have something real here? And if we don't, let's kill it.
DAPHNE ZOHAR: Let's not do any more work on it. So let's try to set up experiments that kill the project early. And, of course, you need to learn also to accelerate at the right time. So once you have something and you know that it's real, then you go all in. But that ability to go between being really frugal and really focused to going all in and accelerating is something that I think as an entrepreneur, you pick up-- either it comes to you, or you pick it up.
DAPHNE ZOHAR: But I don't think that you can just do a one-size-fits-all. When you're in tough times, you can't just spend like crazy. Austerity is good. It makes you go back and look and say, what are we most excited about? And to focus resources on that.
ALEX PHILIPPIDIS: Brad, just more of a macro question. How has COVID and economic challenges affected the growth of biotech in China, especially but also, to a degree, Asia-Pacific?
BRAD LONCAR: So before like 2018, there was no biotech in China. And that's what's so exciting about it, is that what's going on in China today is like if you went back in time, when Genentech was just [? IPO-ing, ?] and Amgen was just [? IPO-ing, ?] and biotech here was just getting started, that's what's been happening in China over the last four or five years. And I think one really exciting shift that's happened over the last year is for the first few years of this, most China companies were in licensing assets.
BRAD LONCAR: And while they were doing that, they were starting their own discovery work. And amazing thing is you see in the news today that the direction has reversed. You see a lot of Western companies in licensing in assets from China companies, a lot of antibody drug conjugates. The legend J&J BCMA CAR-T was just approved that's revolutionizing multiple myeloma.
BRAD LONCAR: So you're starting to see China innovation be taken from China to the outside world. So in a very short period of time, you went from a group of companies that were really just in licensing and doing fast follower type medicines to developing things that matter for the world. And as bullish as I am on China, I don't know that I would have expected it to happen that quickly.
BRAD LONCAR: But it's definitely happening today. And I think it's going to have a big impact on our entire industry globally.
ALEX PHILIPPIDIS: Kevin, over to you.
KEVIN DAVIES: Thank you. Well, let's look forward and ahead. Based on the previous answers you've given, you seem semi-optimistic that things are going to brighten. So we want to ask, how do you feel the biotech industry is looking as we head into the fall of this year in 2023? And are there any technologies or sectors in particular that you're really excited about? Chris, we'll start with you.
CHRIS GARABEDIAN: Sure. I want to give a meta theme here. So beginning with COVID, we saw a lot of new money enter the space because they were fleeing all of those sectors that were going to be impacted by COVID. And so that probably contributed to the bubble, probably contributed to the exuberance with more funds being closed, more IPOs than we've ever seen per year. And so I think what we're hearing is that it's less about the excited optimism and more about we're getting back to where it was, which was this is a specialty sector that requires specialty talent, specialty investors, people who understand how to move these programs forward.
CHRIS GARABEDIAN: And as Brad was mentioning earlier, we've seen some good readouts. And that's what we're going to need. I think it's interesting. The negative streak we were in, it reminds me a little bit of being at the blackjack table, and you're losing, losing, losing. And then it shifts. And you win, win, win.
CHRIS GARABEDIAN: And there's a little bit of that that has gone on in biotech. And so over time, it'll work itself out. There'll be some winners and losers. And we can't be too focused on those trends. But I think you need to look at the technology spaces and which ones have promise, which ones have some challenges. And I think one of the reasons we talked about on the Biotech Clubhouse, the most popular one was the [INAUDIBLE] data and [INAUDIBLE] coming on is because that was probably some of the most compelling data on a new technology that we've seen over the last few years.
CHRIS GARABEDIAN: And so there's a lot of excitement even though [? Beam ?] just had a hold. But there's a lot of excitement that this new generation of genetic editing and genetic technologies is there. However, we've also seen some challenges with AAV vector gene therapy and traditional where there's been a lot of FDA clinical holds. There's been some safety issues. We still are only looking at outside of the cancer.
CHRIS GARABEDIAN: Well, we now have the Bluebird. But we don't have that many gene therapies approved relative to the number that are in the pipeline and that have been advancing. However, on the positive side, we've seen more innovation across all treatment modalities in terms of antibodies from ADCs and bispecifics and multi-specifics. We've seen genetic technologies.
CHRIS GARABEDIAN: How many RNA technologies have moved forward in different ways? Alnylam, we've talked about. These take a long time to mature. I think even with some of the drug screening and the AI machine learning and trying to do better with small molecule. So we're just seeing a lot of innovation around a lot of these modalities. And I think for the first time in the last five or 10 years, we've seen a disease that could be conquered with multiple modalities that are all competing against each other.
CHRIS GARABEDIAN: So I just say all of that to say, I'm incredibly optimistic about where these technologies can go to treat medicine that is less about the market's going to be on fire next year. That's harder to predict and is really going to be based on data.
KEVIN DAVIES: Brad, what technologies or sectors are you most excited about?
BRAD LONCAR: So I'm always a big oncology person. And what's happening in oncology today is hugely exciting. So Chris mentioned bispecifics. The first bispecific in oncology will be approved by the end of the year. And the data has been a lot stronger than I would have ever envisioned. They're putting patients who are CAR-T relapsers back into complete responses. And to be able to do that with a late stage cancer is very special.
BRAD LONCAR: So look for bispecifics to make a lot of progress. In cell therapy, we've always wondered what's going to be the follow-up to CD19. And what J&J and others have done with BCMA and multiple myeloma is some of the best cancer data I've ever seen in my whole life. It's amazing. They have almost 100% response rate. And it's looking to be a lot more durable than we expected.
BRAD LONCAR: So I expect cell therapy to revolutionize multiple myeloma just like it did in the lymphomas and leukemias. And then an under the radar thing, we've been very disappointed on how cell therapies haven't really succeeded in solid tumors. But there was a lot of exciting things at ACR this year. So for example, BioNTech has a CAR-T. And they artificially amplified an antigen to make it stronger.
BRAD LONCAR: And so companies are starting to do a lot of interesting things like that. And on the TCR space, Immunocore had the first ever TCR approved in the US for uveal melanoma. So a lot of cool stuff happening in oncology. And then the in-vivo gene editing stuff gives me goosebumps. Intellia, their data just looks so strong. They actually did in their last earnings report mentioned that some patients had elevated liver enzymes.
BRAD LONCAR: So that's something to watch. But that's what you expect with the new technology to have starts and stops. And I'm really excited about Verv using a technology like that in something as important and as broad as heart disease. So a lot of good stuff like that.
KEVIN DAVIES: Great. Thank you. Daphne?
DAPHNE ZOHAR: Yes. I'll make two comments. I think one comment has to do with areas that I think the industry can really build on. And the second has to do with people. So I'll start with the areas that the industry can build on. So one thing that we've really enjoyed doing is to look at areas where the industry has spent a lot of money and has had successes in terms of human efficacy data.
DAPHNE ZOHAR: But the particular class was held back by some issue, whether it be a tolerability issue in the case of muscarinic agonists and [INAUDIBLE] and what we were able to do there with the CAR-T program or other areas where the industry goes all in, but they're missing, for example, a way to address, for example, delivery. And you see what kind of an impact lipid nanoparticles had in both CRISPR and also in mRNA.
DAPHNE ZOHAR: So the idea that you can take and build on existing classes of medicine to unlock them is something that we're personally very excited about. I'm personally very excited about. We at PureTech are doing a lot of work in. And then in terms of people, one thing I wanted to say is when you go through these hard times, you get really good people who get caught up in just the environment.
DAPHNE ZOHAR: And I personally, would far rather have people around me that have gone through hell in terms of being through a really tough time maybe not having all the successes rather than having somebody who just happened to be there at the right place, at the right time. And so what I'll just say about our industry is we've got so many amazing people. And some of them are going through tough times right now.
DAPHNE ZOHAR: But I, personally, think those are the people that I'm most excited about working with in the future.
KEVIN DAVIES: That's great. Alex, we don't have a lot of time left. But I know we have a rapid fire round we'd like to try to squeeze in here. So let's do that.
ALEX PHILIPPIDIS: Sure. Just some topics in the news in recent weeks that have caught our attention. First with Moderna suing Pfizer and BioNTech over patent rights to the mRNA technology. What effect, if any, do you see on RNA vaccine development? Does this slow down the field or affect COVID vaccines in development?
BRAD LONCAR: I'll jump in and take this one. As an investor, I have never once cared about a patent fight. Every major technology that comes about, there is a patent fight. There was one with CAR-T. There's still one ongoing with CRISPR. Now, there's happening with mRNA. What happens is these things get tons of media attention. And we talk incessantly about them on Twitter.
BRAD LONCAR: And then 10 years later, some like minuscule license is agreed to. And you say to yourself, what did I just spend the last decade arguing about this for? So my guess is that mRNA will probably follow that path as well.
ALEX PHILIPPIDIS: On gene therapy, Bluebird bio won FDA approval for Zynteglo. How is its list price of $2.8 million viable or justified? And how much of a challenge is that for gene therapy development given in light of the clinical success?
CHRIS GARABEDIAN: Brad, do you want to take that?
BRAD LONCAR: Well, I'll say, the jury is still out. But one thing that I think is super interesting about that is it was approved in Europe a couple of years ago. And they couldn't get payer support. And because of their financial position, literally had to shut down and leave Europe. So I think our field should be pulling for a smooth US launch even with that high price because it's really the best case study possible of the US underwriting medical innovation.
BRAD LONCAR: We as a biotech industry, I think, need to see this succeed. Because if this succeeds, future gene therapies will succeed as well. And the last thing I'll say about that is I'm not sure that price is going to be the biggest barrier to success for them. I think one thing that is underappreciated and under talked about with some of these new technologies.
BRAD LONCAR: For Bluebird, for beta thalassemia, and, ultimately, sickle cell, if it's approved, if you're a patient, you have to sign up for some pretty intense things. The myeloablation, the chemotherapy that's used for that causes infertility and hair loss. And a lot of things that would be really hard to get a teenager or college age person to sign up for you. You have to have very serious severe disease to really make that trade off.
BRAD LONCAR: And so I would watch that as well because we always talk about these things as great concepts. It's one and done. Of course, what a no-brainer. But these things are actually much more complicated when you really look at them closely.
ALEX PHILIPPIDIS: Yeah. Go ahead.
CHRIS GARABEDIAN: I'm just going to add on the Bluebird. The interesting thing about the Bluebird price [? ISIR, ?] which is the independent body that says what these products are worth, came out with the highest ever 2.1 million that they believed the drug was worthwhile. They could be justified. So I look at that, and just this past week, I think they had a couple of ALS drugs that said weren't barely worth 50,000.
CHRIS GARABEDIAN: So I think in some ways, we do have to look at each of these independently. And I know Daphne has done a lot of work just on the pricing. Because I think, Alex, part of your question was more not just Bluebird, but just the broader pricing issue around this. And I know Daphne has done a lot of work with Peter [? Kuczynski ?] on this. Do you want to just comment on that, Daphne?
DAPHNE ZOHAR: Yeah. By the way, we have an epic storm in Boston right now. So it's like thunder, lightning, rain. It's crazy. So I think that our industry in general hasn't done the best job of getting ahead of the pressures around pricing. And there's a perception issue where everybody thinks it's all the drug companies raising prices. And it's really not.
DAPHNE ZOHAR: It's the middlemen. But at the end of the day, what's happening is there is going to be more discipline around pricing. And I think that the model that has existed in the past is going to get tweaked. And we're going to have to find a way to deal with it. I think some of the drug pricing legislation is just stupid because it comes from people who don't understand the industry.
DAPHNE ZOHAR: And that's what we've been trying to do. It's almost like a third group. So there's pharma. There's bio. Then there's a group of entrepreneurs like myself and investors like Peter [? Kuczynski ?] and others who have been trying to educate lawmakers about the industry and how important it is to be able to create incentives for entrepreneurs or investors to spend the time in extremely risky decades long process.
DAPHNE ZOHAR: Because if you take away the end upside, you're going to affect probably not the biotechs that exist right now. So I actually don't think it's going to have a huge impact on the market right now. But what it's going to affect, and it's going to happen very soon, is that translation of academic innovation what's called the Valley of Death. There's going to be less academic innovations that are advanced.
DAPHNE ZOHAR: And stupidly, they've put in this negotiation that kicks in earlier for small molecules, which are actually less expensive and easier to develop. So there's a whole bunch of really uninformed pieces of this legislation that we're trying to influence. But I think that the industry did the wrong thing because they didn't interact. They came back and said, oh, what we're doing is important. And you cost $1,000,000,000 or whatever.
DAPHNE ZOHAR: They didn't realize that this was coming. And I think if they had engaged a little bit more directly understanding that this was coming, they might have had more influence on the legislation. Like I said, I don't think it affects the market in the next five years or so. In fact, it might even be better for M&A. I think it will affect that translation. And that means less new medicines in the future.
KEVIN DAVIES: That really is an epic storm, Daphne. It's the rumbling through--
DAPHNE ZOHAR: Do you see it? I don't know if you see the lights flashing. [INTERPOSING VOICES]
ALEX PHILIPPIDIS: We hear it for sure. Yes.
KEVIN DAVIES: Before we go, can we just talk about monkeypox much in the news? Do we think that vaccine development for monkeypox is going to be, maybe not on the COVID scale, but is that going to be a big deal? And if so, who are the entities we should be watching?
CHRIS GARABEDIAN: I'll just weigh in. To be perfectly honest, I didn't pay much attention to the vaccine markets until COVID hit. And for the most part, there were a lot of vaccines that continue that were on the pediatric schedule or the HPV vaccine and that have done well. And so it's not an insignificant market. It tends to be an easier pathway because of the surrogate markers in terms of investment.
CHRIS GARABEDIAN: And so I think that COVID reoriented everybody to think more deeply about vaccines, the technologies that can produce vaccines, and what that looks like for the industry. But Brad, I know you've thought about this a lot. But outside of the Moderna, Pfizer, BioNTech-- and we saw. It reminded me a little bit of Gilead when they had the HCV cure.
CHRIS GARABEDIAN: And it was lots of revenue. And then it just crashed. And they still had to figure out how they had a sustained growth over the long term. So I don't want to get too enamored and obsessed with each infectious disease. And is it going to be as big as COVID or the next COVID where there's going to be a big big vaccine play. I'm going to stick to what I know well, which is drug development and leave vaccines to the other experts.
CHRIS GARABEDIAN: But Brad, you've thought about this a lot.
BRAD LONCAR: Yeah, I have to admit. I actually don't have an opinion on monkeypox specifically. My only comment on vaccines is it's been hugely disappointing with how politically charged our country and our world is, how nonsense about vaccines has been amplified. And in some respects, been accepted by a much broader swath of the general public than I think any of us would have ever believed.
BRAD LONCAR: And just as Daphne was saying, I think our industry hasn't done a great job articulating the financial benefit of some of these drugs. I think that the mRNA vaccine save the world. I remember when they were literally digging-- there were freezer trucks outside of hospitals in every major city. It was so bad. And now, people talk about the mRNA vaccines as if they're completely useless.
BRAD LONCAR: And it's just shocking to me that it hasn't-- that that narrative has caught on as much as it has. And so I don't know what the solution to that problem is. But I just think we need a lot more science education in general in our society. And I think there's been a lot of good things that have happened over the last couple of years through science. But I think we've done a bad job of really explaining to the public how all of this works and why it's important.
KEVIN DAVIES: Yeah. Alex, we'll have Peter Hotez on tomorrow. So we'll obviously be pursuing that in more detail. Daphne, we'll give you the last word.
DAPHNE ZOHAR: I think that emerging infections and infectious disease is going to be a huge area for our industry. And I don't necessarily think monkeypox is the one that everyone's going to be really worried about. But I think that what we've learned is our public health infrastructure is not in good shape. And I do think there will be an increasing focus. And we've now seen that there's financial returns around that.
DAPHNE ZOHAR: I hope that some financial mechanisms are put into place around antibiotics and antibiotic resistance. Because I think that's another area that is really a huge threat for the world.
KEVIN DAVIES: Thank you. Alex.
ALEX PHILIPPIDIS: And just like Biotech Clubhouse, there's more to talk about. And there's time to discuss it. Daphne, Brad, and Chris, thank you so much for gifting us with your time and perspective on so many topics moving the biotech world. And thanks to you for watching. For Kevin Davies, I'm Alex Philippidis. Stay tuned for our next session on aging research and reversal as the State of Biotech rolls on.
ALEX PHILIPPIDIS: [MUSIC PLAYING]
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