Jef: Hello and welcome to Biospaces the Weekly. I'm your host, Jeff Axt. And while it was a bit of a slow week with the Fourth of July weekend, we do have one of the biggest biopharma acquisitions this year to discuss with you. That's Vertex's $10 billion purchase of endocrinology specialist Krinetics Pharmaceuticals. We'll also talk about some market trends from the first half of the year. On the IPO side, hair loss biotech, Viradermix, is a certainly a standout. They are up more than 650% since it debuted on the market in February. And when it comes to VC funding, we have Isomorphic Lab's $2.1 billion Series B raise from May that now ranks as the second largest biotech raise of all time. So certainly some interesting market trends to discuss. We'll also check in on the FDA. We know it's been a tumultuous year for the agency, but how do decisions so far this year compare to previous years? Let's dig in. Hi guys, how y'all doing? How was your fourth of July?

Annalee Armstrong: Hello. My Fourth of July was great. We celebrated in Canada.

Jef: Ha ha ha.

Heather: I I did as well. I took my my parents out for ice cream and I wore a white T shirt with blue stars.

Annalee Armstrong: Aww.

gabby: No.

Jef: Very patriotic for the US.

Heather: Yeah, I mean like I lived there for ten years, so I figure, you know, I like it's my adoptive country.

Annalee Armstrong: Yeah. We went down to the St. Lawrence River and waved at America, which was nice.

Jef: I love it.

gabby: Yeah.

Heather: Hmm. Okay.

gabby: I did go up north. and honestly you guys probably celebrated more than I did. I didn't really do anything special, so

Jef: So far north that you went to Canada or you stayed in Wisconsin? Okay. I do love that our two resident Canadians on the editorial team are have spent plenty of time in the US.

gabby: Not north enough, only Wisconsin.

Heather: Hmm.

Annalee Armstrong: Yes, and technically I am a I am Canadian American, I am dual citizen, so I get both.

Heather: also celebrated I also did

gabby: You get double the holidays.

Annalee Armstrong: Yeah, I get I get two Thanksgivings. I get two you know, country celebrations in July. It's great.

Heather: It's good to do both. You know, you just Mm-hmm. Yeah. Yeah. And I went to a non-barbecue barbecue. so my uncle used to be a chef and

Annalee Armstrong: Yeah. Ha ha

Jef: Yeah, 'cause you guys had Canada J Day just a few days before our fourth, right? Didn't you do something for that day as well?

Annalee Armstrong: Yeah, it's July first. Yep.

Heather: He he doesn't do burgers or hot dogs, right? Like he does gourmet meats and we we had like some sausage and then we had some pork and then we had chicken option and then we had like these salads with 18 ingredients each and yeah, it was it's very nice. It was good. Yeah. Two kinds of pie. It was just yeah, it was nice. So it was the hottest day of I think the year so far. So that was yeah.

Jef: love that. I want to go to that barbecue.

Annalee Armstrong: Gosh. Yeah, I know what I'm doing next year. I'm gonna crash heathers.

Jef: It was hot. It was blazing down here in Virginia. We cooked out all weekend. We did do traditional hot dogs and hamburgers on Friday, but we did get creative on Saturday. We smoked ribs and then we also threw a big salmon filet for the pescatarians in the family on the Traeger. So that turned out really good. So I probab I'm no chef. I can't compete with your uncle, but we had some decent food this weekend as well.

Heather: Mm-hmm. Yes.

Annalee Armstrong: I'm just over here like eating 10 gallons of potato salad that's left over from our little July 4th barbecue. It's just gonna be never ending.

Jef: Ha ha ha

Heather: I can do that all week, just eat potato salad. Mm-hmm.

Jef: All right, well, with our tummies full of potato salad, let's get to introductions. Heather, why don't you start us off this week?

Heather: All right, I am Heather Mackenzie, a senior editor at Biospace, and I curate Clinica Space, which hits your inboxes every Monday.

Jef: And Gabby, go ahead.

gabby: Yeah, I'm Gabrielle Mason. I'm the senior editor and I put together our manufacturing brief, which hits your inboxes every Tuesday, and then our daily gene pool newsletter.

Annalee Armstrong: And I am Annalie Armstrong. I do the Biofarm Executive newsletter, which goes out every Wednesday morning.

Jef: And as a reminder, I'm Jeff Axt, I'm managing editor. And with that, let's dive in. So, first up on our agenda today is of course that big Vertex buy. So, as I mentioned in the introduction, Vertex dropped $10 billion this week to pick up Krynetics Far pharmaceuticals. It is the largest pickup in Vertex's history, and it is in line with the second and third biggest deals of the first half. So we have Abby buying apogee. for 10.7 billion. We've got GSK picking up Nuvalent for 10.6 billion. So right up there in line with those two. The only one that tops these three is the Sun Pharma deal. for they bought a women's health company, Organon, for twelve point six billion, but that's not really in the traditional biopharma space. So really this vertex deal is among the biggest of the traditional biopharma deals this year.

gabby: Yeah. And so with picking up Chrinetics, which is an endocrine specialist, they're based in California. With that, Vertex gains an already approved drug. so that's Chrinics drug called Palsonify, which they got the FDA green light in September of last year. and it's a pill for acromegaly, which is a rare pituitary condition. And then another asset picked up from the buyout is a late stage candidate for. congenital adrenal hyperplasia. These kind of specialty endocrinology markets represent emerging white space blockbuster opportunities, according to Stiefle analysts. and then Vertex said that they believe the two assets together can potentially deliver over five billion in combined annual revenue at their peak. So a really interesting deal.

Annalee Armstrong: Yeah, it's really great to see Vertex doing some acquisitions. They've been really kind of laser focused on some of their you know, existing markets, like stick fibrosis and that kind of thing. So really cool to see them be one of the big players this year. They've always been kind of rumored to be a buyer, and and yet this is the first time they've really struck something very large. but this really fits in with the trends that we're seeing across pharma. As as Jeff was mentioning, that $10 billion seems to be the sweet spot for a lot of companies right now. So on the smaller side, we also had a deal from Novartis this week. it's actually their third of the year. they are now buying ADC special specialist mirics for $1.5 billion. They've been on quite a spree in oncology recently, so definitely fits in with what they've been up to. so again, third deal for Novartis that matches Gilead and GSK, which have also signed three apiece, which sounds like a lot, however. Lily has actually signed nine deals as of the end of the half, which totaled totaled $25 billion. So three deals from three different companies really pales in comparison to what Lily is up to. so MA is definitely picking up across pharma. Really great to see this kind of string of major deals. you can check out my analysis at Biospace.

Jef: Yeah, no, it's definitely a continuing trend. This uptick in MA. Everybody's really excited about it. We keep seeing more and more of these deals coming through. It's like a real kind of point of optimism in the space. but you know, one of the biggest of the year certainly keeps that trend going into the second half with gusto. So that's that is good to see. like I said, we're also gonna talk about some other trends here. IPO is another one that really that window seems to be opening more and more. We talked recently about the double header of record setting IPOs that we've had. but today let's dive in a little bit more to Veradermix. I mentioned this as like the highest performing IPO this year, up more than six hundred and fifty percent since it debuted in February. Gabby, you took a deep dive into what's going on there.

gabby: Yeah, so like you said, we've had our eyes on Varidermic since they, you know, debuted in February. and they had an opening day surge from an expected $17 per share to about 37. And then as of July 1st, the biotech shares were trading around 128 per share. So that's just behind the 650 increase. So pretty incredible. I got to speak with their CEO, Reed Waldman. and he basically said, you know, obesity paved the way for hair loss. He said the GLP one market, kind of explosion a few years ago serves essentially as the playbook for a consumer-directed market, which, you know, he believes is the future of pharmaceuticals.

Jef: I love this. Biospace did a feature must have been almost a year ago where like hair loss, is it the next weight loss? And here you go. He he seems to agree with that.

gabby: We were right. and and he thinks that the second half of this year will be just as good, if not better, for Viridermics. So the company, they're working on a late stage extended release oral version of a Rogain. and so they haven't submitted, you know, like a data package to the FDA yet. but their hope is that, you know, eventually they can win the first oral approval in male pair. pattern hair loss in 30 years. And they're also looking for the first ever oral nod for female pattern hair loss. So a very cool company, worth keeping an eye on. And then, while we're talking about IPOs, normally summer is a little slower, but two biotechs have actually filed to go public over the last few days. So one of those is scribe therapeutics, which Is especially notable because the biotechs pipeline is very early stage. only one candidate has just entered the clinic. They're developing CRISPR-based medicines. and they were co-founded by Jennifer Dudna. So they didn't share a ton of details like when they plan to IPO or how much they hope to raise, but now we know that they're pushing to go public. and then another US biotech called Calohexis, which was a spin-out of Endebica. bio earlier this year. they also said they were hoping to make, you know, the public plunge. So we'll be tracking those potential IPOs. and then I'm also, you know, working on a piece that analyzes the IPOs that we saw in the first half of this year because it was it was a pretty groundbreaking time. There are a few different records set, especially compared to the market last year. So keep your eyes out for that.

Jef: Yeah, we're gonna get to it a little bit later in the show when we talk about biofarm executive, but that seems like a similar story to the VC side of things, where it's really this have-have-not story still, where we're getting more and more raises, more and more IPOs, things seem to be moving, but it's really for a select few. And so it's really interesting to hear you talk about scribe as really an early stage. IPO. Like that would be really great to see some of that momentum trickle down into those earlier stage companies because those are the ones who are still really struggling and the ones that we need to maintain, you know, the innovation pipeline. So, like I said, we'll get back to the VC races. Right now, we are going to pivot to FDA. We always like to talk about the FDA and the chaos and the turmoil there. But this time we were just going to take a look back at the first half numbers. given all of the leadership turnover, all of the staffing cuts last year, all of the controversy and drama surrounding Frasad and McCarry. We want to see how the decisions are actually coming through. So you took a deep dive into the numbers, Heather, along with our staff writer Tristan Manilac. What did you find?

Heather: so Tristan especially is really conscientious about updating our FDA tracker and and that includes both novel approvals and supplemental approvals. so we had we came up with seventy-nine total decisions this year, down just a little bit from from last year, where there were eighty-five in the first half. novel approvals though actually ticked up. so there were 19 in the first half of last year, and we're counting 26 so far. so that's that's really good news, especially considering all the all the drama that we've had. most of these were from CEDAR. however, according to Jeffries, CEPR, that's the biologics division of the FDA, only granted two approvals in H1, those were Rocket Pharmaceuticals Creslati, and that is for the rare immune disease leukocyte adhesion deficiency one, and then Regeneron Pharmaceuticals Otarmini, which is for a genetic form of hearing loss. that was, yeah, I covered that one. I did a pre-interview with them. they're j just a great team that developed that. They seem really passionate.

Jef: Yeah, that one was big.

Heather: And this was compared to so the f over the past five years, Jeffrey's put out this report and there have been between three and nine first half approvals for Seber the past five years. So they're a little behind, but they have lots of potential decisions to catch up in the in the second half.

Jef: Yeah, we were just talking about that last week where we are seeing more and more of these decisions that have been very controversial rejections, I should say, under McCarry and Prasad coming back around to the FDA. So I guess we have those to look forward to and maybe start to cut catch up on some of those numbers.

Heather: Yeah, I mean this one isn't isn't Seber, but SALE Therapeutics, which is spelled S-A-O-L but pronounced SALE. they just submitted, resubmitted their application for a rare disease drug after coming to alignment with the FDA. So more good news for the space.

Jef: Yeah, yet another one to add to the list. We already had what, Rep the Moon, Regenx, Unicure. there were several that were and in Capricorn too, that was even before McCary left. These were all companies that had been rejected in the past year, who are all coming back around reporting positive discussions with the FDA and resubmissions.

Heather: Yeah, and Capricorn and Replimune have their decisions coming up this summer in August. Also adcoms for both.

Jef: That's right. And that's a little bit of a change of pace as well.

Heather: Yeah, definitely. but yeah, so you know, regulatory experts that that I've spoken to over the past couple of weeks are are really optimistic about the the second half of twenty twenty six, especially for rare disease drugs. Peter Pitts, he's a a former associate commissioner at the FDA and frequent biosphase contributor. He is especially optimistic now that Vinay Prasad is gone and he he does not mince words, so you could you can Read I I've got an article coming out that you can you can read some of his commentary and but he's not alone in that either.

Jef: Well, certainly good to hear that we're not so far behind in terms of some of these FDA decisions. We, you know, kind of felt that way and and the numbers show that yeah, we are down a little bit in terms of these rare disease approvals. But with these new applications coming back in, these resubmissions, hopefully we're on track to kind of catch up a little bit as we move toward the end of the year.

Heather: Definitely.

Jef: Any other noteworthy decisions we should be looking out for in Q three?

Heather: Well, there's one that could come out later today and and today being Tuesday when we're recording. everyone is watching for VARA therapeutics IGA nephropathy candidate attace acept. so the target action date is July seventh. So while we don't know the decision as of now, you all probably do by now when you're listening to this.

Jef: All right. Well, hopefully we'll have a story on that one for you all soon. and yeah, stay tuned for continued coverage, especially of the rare disease space heather's always on top of that and reporting another story as we speak. So definitely one we want to see, especially as we start to restack FDA leadership. Again, still waiting permanent leadership across both Seber and Cedar and the commissioner position. But as we talked about last week, the report so far from the acting leadership is is pretty positive. And so we're we're hopeful to see these FDA decisions keep rolling in the right direction. All right. Well now as promised, we are gonna come back to some of the VC funding. this week in Biofarm Executive Annalie, you have kind of a breakdown of what we saw in the first half so far.

Annalee Armstrong: Yeah, so again, Tristan Manilac came over to the Biofarm Executive World and took a look at venture capital activity in the first half. No surprise, Isomorphic's $2.1 billion raise topped the list of the highest fundraises of the half. It's one of the biggest ever. I believe second biggest ever, which is kind of shocking to say. So we compiled the top five and took a look at these companies. Another interesting one on the list was Parabolis. They raised a Series F earlier this year, and then of course they just IPO'd, and they were one of the record breakers for the top IPOs. So everything comes full circle in biopharma. Some other trends we saw funding to early stage companies has continued to be really slow, which is something that I'm always, you know, yelling about in this industry is that we have to support these early stage companies. Would love to see more interest among VCs for these early stage companies which are working on really breakthrough science. So you can check out the full analysis of the venture capital activity in biopharma at biospace.

Jef: Awesome. Yeah, definitely check out all these first half trend stories. It's been a complex year, year and a half to say the least, with a lot of macro headwinds facing the industry. But again, especially since bio, we've been talking about this real positive vibe, optimism. And so let's take a look at the numbers and see that they are that is shining through. We are seeing this uptick in funding, in IPOs, in MAs. But again, as I said earlier in the show, it's it's really that have have not situation. So we do want to see more funding coming in for those earlier stage companies because that is going to fuel those pipelines going forward. For now though, that's it for our show today. Don't forget to subscribe to all your favorite podcast channels and we'll see you back next week.