[Music] Welcome to this week's episode of The Read Out Loud, a weekly biotech podcast from staff. I'm Elaine Chen. I'm Adam Forrestine, and Alison T'Angeles is, um, still out this week. It's Thursday, March 26th. On this episode, Eli Lilly's deal man, Jake Van Narden, is very, very busy. So what does that mean for biotech and pharma? Speaking of deals, Merck is buying turns for nearly $7 billion. Why are some people mad about it? You might be surprised to hear this, but off the shelf, Carti Therapies for Cancer are still a thing. We'll preview an interesting data readout coming soon from Allergy and Therapeutics. And finally, someone forgot to tell Wave Life Sciences that weight loss drugs are supposed to help people lose weight. Well, it gets to all of that in a moment, but first a word from our sponsor. [Music] I'm Nika Kakathuda-Durenk, SVP of Oncology at Gilead Sciences. McGilead and Kite are working on college starts with a simple question. How do we make progress truly meaningful for patients? Since 2020, our therapy has been used to treat more than 75,000 people worldwide with metacetic, triple negative, and HR positive, HER2-negative breast cancer. We bring that same patient-first mindset to other areas of high-end met need, including Carti Self- Therapy for people with difficult to treat blood cancers. Today, over 34,000 patients around the world have been treated with Carti Self- Therapies from our portfolio. Across oncology, this perspective guides how we design clinical trials and pursue innovations so patients can access potential advances throughout their treatment journey. Learn more at gilead.com. So let's talk about Allison, because this is the second episode in a row that she is MIA. How do we feel about that? I mean, how dare she? How dare she? I say that as last year, I left for like three weeks straight, but how dare she? So Allison is on vacation. We probably shouldn't say where she's on vacation alone. Maybe we can hint where she's on vacation? What do you think? Why can't we say? I don't know. It's like privacy, like, you know, leave it alone. Oh, okay. Anyway, she's somewhere very warm and she's sending us pictures of her being very warm while we're both just kind of suffering. We have heard from her a couple of times, which means she misses us because even though she's on vacation, we are getting texts from her. Today, we got a text. I will say, I'll hint. She sent us a picture of herself and a camel today. Yeah, she's replaced us. We've been replaced by camels. Wow. Yeah. That's sad. Okay. Well, all right. Let's move on. Okay, Adam, I feel like you probably felt somewhat vindicated this morning with some new data from Wave Life Sciences. I did feel vindicated. It was one of those mornings where you wake up, you know, you sit at the computer, you see the news across the wires and you say, "Damn it! I was right!" Yeah, we are talking about Wave Life Sciences and I don't know how you pronounce it, I at HB. What does that, in Hibi? What do people say? In Heben-E. In his, like, the full name of the. So in Heben-E, this sort of, this sort of buzzy weight loss target that they've been pursuing, I wrote a story back or a column back in December of last year where I, you know, kind of made fun of them because they had this preliminary data for, you know, for a weight loss drug and patients actually gained weight, which, you know, I pointed out was not what weight loss drugs were supposed to do. Well, I don't think they actually gained weight. They just didn't really lose any overall weight. They kind of gained weight a little bit, but okay. Anyways, basically just for full context, they had. They are running this early trial of this gene-silencing drug. It silences the in Heben-E gene, which is a gene expressed in the liver and it regulates fat storage. The idea is if we use, like, an RNA interference drug to silence this gene, maybe we can find a way to lead to longer lasting weight loss. So they had interim data from low dose back in December. It showed that the drug cut visceral fat, which is the kind of fat that's stored near the organs, that's thought to be the most harmful type of fat, but they didn't make a huge dent on overall fat mass and really nothing on overall body weight. And then now today, Thursday, we got a six month follow-up data where there continue to be more reductions in visceral fat, but again, total fat mass loss was not very large and also barely any reduction in overall body weight. When you say not large, placebo adjusted weight loss at six months, 0.9%, so less than a percent. And if the placebo group had gained weight, then the overall weight loss in the treatment group might have been even less than that. And Lane, what did we say last week? What was the rule we used last week? Remind everybody about the rule. If you don't present data in a straightforward way, that suggests that there's some flags. And also, you don't hide the good news. Yeah. Right? So if patients are the lost weight on their drug, they probably would have said anything. Yeah. And then they also released some data on a higher dose cohort, three months data. And I guess the overall takeaway from that is that it also didn't show amazing. And the visceral fat loss was actually less than what we saw with the lower dose cohort. We've tried to justify these results by saying, you know, in this early study, the participants had lower starting BMI's than what we've seen in other obesity studies. Still, it was still in, you know, in an obese population though. I think that there are going to be a lot of questions about this. But will this even be enough to get FDA approval? Because FDA guidance is that typically you need at least 5% weight loss over a year to get approval as an obesity treatment. And there are not really anywhere close to 5% overall weight loss. I do think what data tells us is that cutting visceral fat is very important. It's just that they're really not showing any reductions in overall weight and not really significant reductions in overall fat mass. Can I ask you a question though? If they're losing visceral fat, but they're not losing weight, where is it going? Well, see, I think the issue is that visceral fat is such a small part of overall weight. So at least in the baseline data that they showed, for one of the cohorts, for example, visceral fat at baseline was only 1 kilogram. So you're really not cutting that much fat overall, even if you're cutting visceral fat. And they argue visceral fat is what leads to complications and payers will be on board because we're going to show that this kind of drug can reduce outcomes. But yeah, I don't know at this point. I think people are really disappointed because I think when the company first put out data in December, they were like, over time, over more months, we'll see more weight loss. We'll see more fat mass reduction. But we're not really seeing that. I think what I wrote back in December, leisure is true that this is just a lot of hand waving around what was maybe a interesting mechanism target, but truly ineffective placebo-like drug when you test it in people. And they hand-waved around bad results in December and they're hand-waving around results in data today. And the stock has been cut in half and nobody cares. And so they should just stop talking about this drug. But they won't because that's what wave and people like to think that maybe there's a chance with more studies, more data, but we'll see what happens. Anyway, let's move on. Our colleague, Matt Harper, wrote a really great profile this week of Lilly Oncology Head at Jake Van Arden. He's actually not only just the head of oncology business development at Lilly, but he's actually the head of all business development at Eli Lilly. That's quite the job for the trillion dollar healthcare company. And he had some really interesting things to say. He was on stage with Matt at the Stats Summit last week in New York. And he had some really interesting insights and insight look at what business development deal flow looks like for Lilly. Yeah, he said, uh, breakthrough East last week, he said, quote, what's interesting is how many of the multi billion dollar deals we are attempting to do sort of get rebuffed with some frequency. And then he went on to say, we engage with a lot of publicly traded companies. And those are the ones where I'm particularly surprised you put sort of a market premium offer on the table.
and you're not even granted a conversation. And then he also says that every week he sees roughly 10 potential deals and Lily frequently makes offers, but many go nowhere. - Yeah, I thought that was, you know, it just, it was, it was, there was a lot of granularity there to what he was saying about like kind of what business development looks like inside of a company. And you know, look, they've got a lot of money and they're very active. You know, he said, you know, a lot of the deals that they do don't even make like, they're not a little press releases, you know, like a lot of discovery deals and deals with small tiny companies. And you wouldn't even know that they do these deals. But, you know, I think his comments, as you mentioned the lane, the comments that he made specifically about public companies, you know, other public companies that either they may want to buy or they may want to partner with or something, they're putting out these offers and they're just basically getting turned away. And so like, you know, what does that say about kind of valuations, you know, he, like you said, he mentioned, oh, you know, even if we, you know, we offer a market premium, you know, we're getting rebuffed. You know, and I think what he was insinuating or suggesting was that the sellers, in this case, the companies, the targets of their business development efforts may view their valuations higher than what lily views their valuation, that there's a disconnect about what these companies are actually worth. - Yeah, I guess it's surprising that he's saying that, you know, a lot of companies just don't even engage at all. Like, don't come to the table and try to negotiate. - Yeah, and that may be because they're, you know, maybe they're insulted by, you know, the low ball offer that, that lily, you know, lily, you know, Jake is saying, oh yeah, we, look, we make a, you know, we offer a premium to the market, but maybe that premium is really small. Like, we don't, obviously we don't know that level of detail and the companies are just like, are you kidding me? We're not selling for that. - Right. - Yeah. But at the same time, I think there probably is. And, you know, this is, you know, we know this in the past. And I think we've heard other CEOs echo some of the same sentiments that sometimes, you know, companies smaller, midsize biotech companies might just believe that they're worth more than they actually are. And, you know, and that's, obviously that's an inherent conflict that happens, you know, between buyers and sellers. You know, when you try to agree a price, agree to a price on a deal. But again, I just thought, you know, Matt, Matt includes this in this profile of Jake, Vennartin. And you guys should read it. It was a great story. But I just thought, like that was like, you know, him talking about that on stage at the Statsum meta that was really interesting. - Another interesting angle in this profile of Vennartin was that, so he himself was brought in to lily through in acquisition. So he was formerly the chief operating officer of a company called Lockso on College, lily acquired Lockso in 2019. And interestingly, lily kept on a bunch of Lockso's executives, including Vennartin. And, you know, Vennartin has really quickly risen their ranks. Now he's had a oncology and BD. And this is an interesting strategy of lily because typically in pharma, MNA deals, the executives at the biotech, you know, don't stay at the acquiring company. But apparently it's pretty common in the tech industry where companies will do deals in order to get talent, so-called acqui hires. And lily has had success doing this in the past too with Dan Skrovansky, their chief scientific officer. He was also brought in through in acquisition when lily in 2010 bought the company that Skrovansky founded. So I thought this is an interesting angle. Maybe it's something that pharma companies should consider more. Not to feather lily's bed too much because they get a lot of that already. But you know, maybe it speaks something to lily in their culture that these top executives, you know, their companies get bought and then they decide to stick around, you know, they get off of these jobs and they do. You know, because again, like you said, you know, how often do we see, you know, the management teams of companies that are acquired, you know, they just sort of ride off into the sunset with their, you know, tens or hundreds of millions of dollars or whatever they make from these deals and, you know, then they go off and hang out on the beach for a while before they decide to do something else, right? But, you know, folks like Dan Skrovansky, like you said, and Jake Van Arden, you know, they're, you know, they're now being put, I guess, being put to work. Obviously, you know, very well compensated. Let's not, you know, let's make sure that's clear. But, you know, that they do that they went to work for lily instead of, you know, going off and trying to do something else. And that is, that is interesting. So in other M&A news this week, Mark said it's going to acquire Tern's pharma for up to $6.7 billion, which is $53 per share, a 6% premium over the prior day's closing price. But many investors are actually pissed about this. They think it's too low of a number. Yeah, we saw a lot of griping, or I saw a lot of griping on social media about the price, about the value of the deal. Like you said, just under $7 billion, you know, the thing about it is that I think that, you know, Tern's just, it's probably, this is like one of maybe the low, least surprising takeover deals in recent memory. I think that just about everyone who pays attention to these kinds of things expected Tern's to be bought by somebody. Personally, I thought that they would be bought by Bristol, but obviously Merck stepped in here. But I think, you know, because of that, the stock price that actually had appreciated a lot over last year. If you go back, if you go back about a year ago, Elaine, this is a company that was trading with a market cap of around $200 million. And so now they're getting bought for $7 billion. So, you know, it's just an incredible turn, and you know, and hats off to Amy Burrows, the CEO and her management team over there at Tern's. They've done quite well. Yeah, Tern's has had an interesting trajectory as a company because it was actually previously also developing obesity drugs, small molecule, obesity pills. They had a GLP1 pill that last year showed underwhelming weight loss results. There were also some safety signals with some cases of elevated liver enzymes. Tern's decided it would pivot away from obesity, focus on its oncology asset. Yeah, I mean, it's a smart pivot, right? And like, you know, we were talking before the show. You said to me that you thought that there were more companies that should maybe pivot away from obesity. Yeah. And these guys did that. Like you said, they were-- Tern's was founded in 2017, and they were, yeah, they were like a Nash obesity company. We should mention, and we didn't mention already, is that, again, the drug that is at the center piece of this acquisition by Merck is a drug called Tern 701. It's for chronic myeloid leukemia. And it's, you know, that's a really interesting class of drugs. The first really interesting targeted therapy in cancer for CML was Gleevec way back, like 2000, 2001. It really kind of heralded this new targeted therapy approach in cancer. And since then, there have been sort of like second generation and now third generation drugs in for CML that have come on sort of more potent, less toxic. And so this Tern drug 701, the data that they put out, and I was in Orlando for ash back in December, and it was really kind of the bell of the ball of the conference. Their data was really outstanding. It had sort of looked like best in class type data, again, which sort of accelerated all the speculation about them being taken out. And sort of the leading drug right now in that space is Novartis drug called Sempelix. It's a billion dollar drug heading towards like $4 billion in PxL. So a lot of people think that Terns drug can sort of do that, like, you know, that $4 billion range. And again, that's another reason why there was some griping about the value of the deal, because you know, a $4 billion PxL drug selling for just under $7 billion is pretty cheap. - Yeah, so again, the lesson, if your obesity can't get, it's not really doing well. You should probably just drop it. - Like wave. (laughs) Sorry, I'm gonna, we're not gonna talk about wave anymore. - Okay, lastly, Adam, this week in your newsletter, you wrote about Allergy and Therapeutics. This biotech is one of the last remaining developers of off the shelf-carty therapies for cancer, particularly B cell lymphomas. The entire field has struggled with clinical setbacks and changes to the treatment landscape. Allergy and though has persevered and has a pretty important study readout coming up in April. Tell us more about this. - Yeah, it is interesting. I used to write a lot about off the shelf-carty therapy for cancer, there are tons of companies that were developing them. The whole idea here was that these are more convenient, because they are off the shelf. They are not personalized, like sort of the carty therapies that we know, like yes, Carta or Breonzy, which require cells to be taken from patients in the engineering lab. These off the shelf therapies are supposed to be just much more convenient, but they had all kinds of clinical setbacks and problems and questions raised about whether they worked as well. So a lot of these companies that were developing off the shelf-carties for cancer have pivoted. We just, pivot seems to be a theme of this episode that a lot of them have pivoted to autoimmune diseases instead. Allergy and as a company, one of the few that has persevered and stuck
with cancer. And so yeah, they've got this very preliminary interim readout. It's coming in April for a study that is looking at their ophthalmocarty, it's called Cemacel. And they're looking at it in frontline consolidation therapy for, like you said, for patients with B cell lymphoma. It's potentially very lucrative position. It's an area, it's sort of a slot in the treatment landscape for B cell lymphoma that the autologous cartes, the ones that are out there now, they have not yet reached. So again, super interesting readout. And again, like you said, I wrote a preview of it coming up. - Okay, so backing up a little bit, can you tell us more about the standard of care for lymphoma right now and how alligene is trying to change the standard of care? - Yeah, so the standard of care right now for patients who are newly diagnosed with B cell lymphoma, it's a combination therapy called R-Chop, it's for Tux-Mab plus Cemacel therapy. And it's a very effective regimen, like kind of between 50 to 70% of patients who are newly diagnosed with B cell lymphoma who get R-Chop go into complete remission. But the problem is that about one third of those patients will subsequently relapse, some of them relapse really fast. And right now what physicians generally do, like kind of standard practice right now, is if you go into complete remission, you get an imaging scan and you look like you're cleared, basically the physicians will just watch patients that come in for scans to see whether the cancer is still in remission or not. And so it's kind of like a watchful waiting sort of observation as the treatment effect. But you know, like even though you can kind of stage patients, like you don't know whether they're who's gonna relapse and who's not, the thing that's really kind of changed more recently is this new technology. It's called minimal residual disease testing or MRD testing. And this is like a blood test that can detect like really microscopic pieces of tumor in the bloodstream. And if you are so-called MRD positive, your likelihood of relapse is a lot higher than if you were MRD negative. And so the fact that these testers are out there, they become more accurate, has given physicians a new way of really kind of assessing the risk of relapse in B-cell lymphoma and other cancers as well. And so that's kind of what spurred this new strategy for allergy because what they're basically saying is if you have a complete remission, but you are still MRD positive, which means you are at high risk relapse, you might benefit from receiving a one time administration of their CAR-T off the shelf CAR-T called C-MIS-L. And that would potentially delay or even prevent a relapse. - Okay, so with this readout coming in April, what are you watching out for? What are the end points? - Yeah, so again, what's interesting about this is this has never really been tried before. And I talked to a physician at Dan Nofarber, who was really interested in us not involved in the study. It was like, this is gonna be, they've had these MRD tests, right? And what he tells me is we can find out whether patients MRD status is for their positive or negative, but we really don't use it in practice. And this is a study that's going to basically give them some evidence to see whether or not there's something to do about it. And so the study very simply is patients who go through the stochial standard frontline therapy, are chop, they have a complete remission, they're doing well, but yet they are MRD positive. So, basically half of the patients are gonna receive, at that point we'll receive CMIS-L. Half of the patients will just have, basically that observation period, which is kind of what the standard practice is right now. And what they're trying to show ultimately in this study is whether or not CMIS-L can, like I said, delay relapse, right? It's, you know, event-free survival is the primary endpoint. And so they want to see how, you know, if you can delay the time that the cancer comes back versus just this observation period. The interim analysis in April is gonna be looking at a small, the first 24 patients, it's a very small sample size. And basically they're gonna be doing another round of MRD testing on these patients, did see how many patients convert from being MRD positive at the start of the study to, again, this period where maybe they become MRD negative. And that is kind of like a surrogate for a benefit. And it's just gonna give them a, give them a sense of whether or not this strategy in the study should continue or not. So again, it's a high-risk play here. But I think it's just really interesting in that, you know, again, like I think a lot of people have sort of written off, off the shelf, CAR-T, because they just had such a, such a hard time sort of figuring out a place to, to fit into the treatment landscape for B-cell lymphoma. And this strategy may, you know, again, the data will tell the tale, but this is maybe the way that, you know, that off the shelf finally find a place, you know, in cancer. (soft music) - That does it for another episode of The Readout Lab. - Thank you to Hyas and the Banado for producing this week's episode. - Our senior producer is Alyssa Ambrose. Our executive producer is Rick Burke and our theme music is by Brian Joel. - We'd love to hear from you. Tell us what you like about this week's episode, what you didn't like, and whether you miss Allison DeAndross. I hope you do. You can do all that by sending us an email at
[email protected]. - And if you like what we do, leave a review or a rating on Apple podcasts, or whichever platform you use to get your podcasts. - See you next week. Allison will be back. (upbeat music) (upbeat music)
PodcastTranscript AI