Ep. 363 - New targets at AACR, biopharma deals, Kurma fund

[MUSIC PLAYING] Bio-century this week is brought to you by IQVIA Biotech, a full-service CRO right-sized for Biotech. Dedicated to helping biotech leaders close unproductive gaps in clinical development so they can protect timelines, preserve capital, and stay ahead of risk. [MUSIC PLAYING] 2026 AACR conference has wrapped in San Diego. We here by a century have found 175 new oncology targets. Pan-Ras inhibitor ADCs were in the spotlight at the conference. We'll have Lauren Markson to tell you what she has found, digging through the thousands of abstracts out of this year's event. Kerma Partners has a new Biotech fund. What does the European VCs experience building this vehicle? This time around, say about early stage venture fundraising right now. Plus, we'll have the latest in Bio-Centries emerging company profile series. I'm Jeff Kranmer, Executive Editor, Eared Bio-Century, and joining me to discuss all of this are Editor-in-Chief, Smohn Fishburn, Lauren Marks, Executive Director of Bio-Farma Intelligence, and Stephen Hansen, Bio-Centries Man in the UK. OK, speaking of Europe, we are days away from Bio-Centries 26 Bio-Equity Europe, Investor and CEO conference. The event kicks off May 4 in Prague, limited seats remain. So register now, and you'll get to meet Stephen and Smohn in person, along with our Washington Editor, Steve Usden, who will be in conversation with Richard Pazder, formerly of FDA, longtime FDA leader, and we'll also have our buddy, Josh Berlan, our man behind the Bio-Century Conference Curtain. Following that meeting, we're very excited to be bringing our Bio-Century Grand Rounds meeting to Seattle. That will be in June. I am currently recruiting early stage companies to take the stage and tell their stories in front of our audience of academic researchers, venture capitalists, and early stage biotechs. We'll be discussing bottlenecks in translation, how to solve them. Register for the event if you want to get up on stage and tell your story as a presenting company. Reach out to me now via LinkedIn, or you can find me here at Bio-Century. OK, the American Association for Cancer Research AACR has just wrapped its annual meeting down in San Diego. Lauren, as ever, has spent quite a bit of time diving into the sea of new oncology targets. Lauren, what did you find? Thanks, chef. I found a lot this year. Thanks to some new technologies we found about 175 new targets that are either new to us at Bio-Century completely for any indication, or targets that we just haven't seen before for cancer and that have no products against them in the clinic or in preclinical development that we've heard about. The big take-homes from this big list, I think, were, first of all, that breast cancer and lung cancer continue to be the focus that's probably not news to anyone. But then when you go down further into the indications that people are trying to find new targets for, there's a lot of activity in ovarian cancer. There's a lot of activity in colorectal cancer, prostate cancer, and behind those was brain cancer. Gleoblastoma was the big focus in the brain cancer category. So I think when you dig into the types of indications that these new targets are applying to, there are some interesting bits along the line. There are very few, only a handful of new targets for hem cancers, which is probably just based on the nature of this meeting, which is a bit more focused on solid tumors. But maybe a bit reflective of the fact that, when you look into all of these targets that are proposed to have immunomodulatory mechanisms, there aren't a lot of sort of T cell function promoting new targets in the mix. And a lot of the T cell-based therapies are for the hem cancers as well. Not a lot of melanoma in the mix either, which I thought was interesting. And again, not a lot of checkpoint targets that we're seeing propose at this conference. Lauren, I think this is super interesting. And I'm sure everyone will want to know what are the new targets. I do want to ask you a couple of questions. First of all, it's ACO. It tends to be a meeting for earlier stage science. So reasonable to assume that most of these are sort of still preclinical in terms of investigation for these targets. And the other thing, a sort of bigger picture that I wanted to ask you, do you find that they're really bringing new mechanisms into some of these indications that you've talked about? You know, I know that you're segregating them. Can you talk a little bit about the mechanistic kind of categorization that you're going for? Sure. So for your first question, these are absolutely preclinical targets. I think biosentry is good at keeping track of what's moving into the clinic. These are things that we've never heard of before. So these are sort of at a basic science, maybe translational science level, things that institutions and companies are picking out as a potential new target through different types of screening and then often validated in animal models. But we're not seeing these in the clinic yet. So this is the earliest stage of new targets that are being proposed. And then mechanistically, we are breaking these targets down by sort of functional categories. And as we know, any molecular target has lots of different functions in the body and even within a tumor setting. So our categorization is heavily based on what is proposed in the abstract. And we've also incorporated some external literature based information on how this works in cancer to characterize these in the best way possible based on the new information that we have. The categories, there are a lot of broad categories that aren't that surprising. We have transcriptional regulators and modulators of immune function, epigenetic targets, things like that that we follow throughout the years. Some things that I found interesting as potential-- maybe not new, but just sort of trends in mechanisms. One is within that immune category. There are quite a few that are modulating the tumor microenvironment more than I've seen in the past. So these are maybe targets that specifically are designed to break down the collagen in the tumor microenvironment. So a checkpoint inhibitors can work what better. Or things that can sort of repolarize the immune cells in the tumor microenvironment or different ways of targeting the fibroblasts there. So that was one category that I've seen take up over the years. I also saw quite a few targets involved in pharoptosis. So promoting pharoptosis to kill tumor cells through this iron overload mechanism, which is sort of separate from apoptosis, and kind of gets around some of those mechanisms that tumors develop to avoid apoptosis. So not a new idea, but just a cluster of targets that we've seen. This is really interesting, Lauren. And we've been writing back about pharoptosis for a while. It's really cool to see, I think, sometimes these things go in and out, and if there's a new wave. So Lauren, on melanoma, which is obviously still a really urgent need, it's not like that's been solved. Do you think that it's sort of a question that there's a lot of good targets out there and these are working their ways through pipelines? Maybe the innovations in modalities, so do you just think the field is still working out in your biology there? That's a really good question. And I think there is a lot in clinical development for melanoma. We obviously have the PD1 inhibitors, which that's sort of their main indication, the most successful indication. But then when you think about the programs that are advancing through the clinic, you've got combinations with PD1 inhibitors. The CTALA for next generation class is a big one that really is driving up efficacy. There are the mRNA cancer vaccines. That a lot of the immune-directed mechanisms are seeking those proof of concept indications in melanoma at this time. So it may be that there are a lot of different ways to double, maybe improve on that efficacy that we've seen in the last 10 years from the PD1 inhibitors. So I think that probably has something to do with it. Lauren, I just wanted to ask you a question because I'm guessing you're not going to be writing about this in your story. But can you think of-- were there any of the new targets that had the most fun or cool name? Because I always thought hedgehog homolog. Target's like that that they were really fun. I didn't know if you'd come across any new ones that you could-- I mean, there's a bit of trouble. I love of Sonic there, Steve. I don't see why this wouldn't be the headline of Lauren's story. But yes, go ahead, Lauren. Oh, I don't know. Let's see. We have SEAL one. I really like Ocean Anhole. So that's a good one. There are a few. Let's see. - Kindling, one always reminds me of Kindling. Poor Mad, one, the struck me as a strange name. There are a bunch of-- - Big Shakespearean there. - Yeah, so we'll have, I think we'll have the whole list that comes out in this story, so you can find your-- - Maybe just a sub-paragraph in your story then to be like your top five most funs. - Or I'll do that for you, see ya. - Yeah, I feel like we ought to be able to request things, like tell the world of biology when there's like, you know, we should have like a, like if you want us to go Shakespearean, Jeff, like next targets of the list, we should all vote in and then we'll have to discover the next target, like, you know, Orlando and the family. - I totally agree. There's all these lists like top executives, top companies. I really think by the centuries it started top new targets. Steven, do you have an all-time favorite? - Yeah, I mean, like I said, like, I just, whatever reason the hedgehog one really, really spoke to me, really stuck with me, so, but it's actually not a sonic thing. I just, I have a soft spot for the little spiky, you know, animals that come in steal our cats food when we put the cat food outside. - It's rough in the UK, baby. Sounds good. Well, I want to turn now to pan-rass inhibition. It has been producing unprecedented survival gains in pancreatic cancer, as well as other rass mutant tumors, toxicity, major constraints still. Lauren, you saw a few companies at AACR proposing a solution to this systemic toxicity. What did you find? - Yeah, so I think going into AACR this year, the Revolution Medicine data was just sort of on everyone's mind. So that was what led to this idea to look at the different ways that you could deliver a pan-rass inhibitor and to look at the different ways that companies are delivering pan-rass inhibitors. Because as you said, the survival data were really impressive for the Revolution Medicine program, almost doubled the overall survival. But we do hear about relatively high level of skin toxicity and GI toxicity. And so one of the ways to sort of restrict the activity of toxic or, you know, more toxic therapies to the tumor site is of course an antibody drug conjugate. So you're using an antibody that's conjugated to a payload. Usually, you know, a cytotoxic chemotherapy that's two toxic deliver without that targeting element and then targeting it to the tumor cells through the antibody. So we've seen a little bit of expansion of the AAC idea into targeted therapy payloads instead of those general cytotoxics. And this was an example that we've seen come up with these pan-rass inhibitors as the payload. This wasn't a big set of abstracts at AACR, but it was just an interesting idea and seems like a solution to a problem for what could become a really important class of therapies. We found four companies, six different therapies that are delivering a pan-rass inhibitor. Some of those are getting into the dual payload idea where you would deliver the rass inhibitor with a cytotoxic chemotherapy for more efficacy at the tumor and to overcome some of the resistance. Some of those are dual payloads that would potentially help get more to the pancreatic cancer or whatever cancer type would potentially respond to a rass inhibitor. And yeah, I think that's just the general idea. These are in early stages of development. So it'll be interesting to see how these perform in the clinic if they do help overcome that toxicity because we do know that AACS still have some toxic issues because you're still delivering something that's pretty toxic and it's not perfectly released in the tumor site, especially with the earlier generation linkers. - All right, well, you can read Lauren's story on biocentric.com, I'll drop a link into the show notes. She also took a look at dual payload AACS, emerging at the conference. We published that piece last week and you can also find a link to that in the show notes. We're gonna take a quick break and then we'll be right back. - This episode of biocentric this week is brought to you by the third biocentric Grand Rounds in Seattle. Advancing drug development requires more than discovery. It requires the right partners. The third edition of biocentric Grand Rounds US convenes venture capital, bio-farma decision makers and academic innovators in Seattle, June 3rd to 5th. This R&D-focused forum brings together leaders at the forefront of translational science to examine the breakthroughs, bottlenecks and strategies shaping the future of drug and diagnostic development and how to make early stage R&D investable. Discover cutting edge disease biology and platform technologies, gain insights from emerging biotechs and academic pioneers, schedule partnering meetings with VCs, pharma and leading academics who can accelerate your path forward. Grand Rounds US is where rigorous science meets strategic capital and where the right conversations move discovery toward development. Join us in Seattle and discover what's next in bio-farma and who's driving it. Secure your spot, register at biocentricranrounds.com. - We are back on the biocentric this week podcast what do you say, Steven? Another day, another Eli Lilly deal this time buying Ajax therapeutics, taking a gamble there that it's not pronounced like the European football side. Jack II developer in the clinic for mylofibrosis upfront payment is undisclosed by a box crossing to billion, it must be fun to be a Lilly BD person these days, Steven, what do you say? - Yeah, well, from the pronunciation side, I was actually thinking about the Iliad Jeff, not the football go, but maybe this is a story on the same pronunciation, but the same pronunciation that Ajax from the Iliad, Simone, do you want to weigh in? Do you think it's Ajax or Ajax? - Ajax all the way, Ajax all the way. And as a prayer, I mean, I don't think this is only in the UK, but isn't that like bleach, you know, you know, Ajax? - Yeah, yeah, good, good. - Cleaning, I mean, I feel like now they should pay us because we just advertise their product, but they go. - I was reading a kid's version of the Iliad with my son, and I was always pronouncing it Ajax, but maybe I'm just, I've just got that wrong. - I bet your son just thinks you're tough. (laughing) - I was gonna use a French term for that, as our CEO did on our morning call, which inspired me to refer to the legendary 1896 French play Ubu Raw, which I think was lost on some of my colleagues, who would have preferred that I'd make a reference to the Philadelphia Eagles, but I will not. - Anyway. - I have a sensitive moment for Stephen, but Ajax, all right. So what, I mean, this is like your 12th deal of the year, Stephen? - It's, yeah, it's, Lily's definitely been on a shopping spree, haven't they? Again, it looks to me that, you know, they've been one of the few farmers that have been happy to go early and to buy stuff in either early clinical or even preclinical. I think this is getting close to entering the clinic, but I don't think they actually have any clinical data yet. So here, Ajax has a, they call it type two confirmation, Jack Two inhibitors. So the idea being that all of the Jack Two's that are already approved for mylofibrosis are type one Jack Two inhibitors. And so the idea here is that you might be able to get around some of the resistance or failed responses to the existing treatments by hitting this other confirmation. So, you know, I think it's good for Lily. I mean, they essentially are a ATM now that's just throwing off cash. And so they are trying to diversify and bring in new assets that can build up the pipeline. And so good for them, like you say, must be nice to have that job. - So I have a few things to weigh in here, Stephen. First of all, yeah, if I had that money, I'd also go early and often, right? There you go. Now, I did want to ask you something because Jeff, you opened this with another Monday, another deal by Lily, you know? - And there's certainly a lot of chatter about the deal and M&A volume. We've done some of that. The truth is, Stephen, so, you know, there are a lot of people who are like, well, if you had, if the pace carries on, then this will obviously be one of the greatest all-time ever for M&A. But people don't make deals normally, sort of, at a specific pace throughout the year. Like, I don't know whether it's reasonable to extrapolate and just to multiply by four, like you want deals. So that's one thing I wanted to know what your thoughts are about. If there's anything about this pace in this time of year and what expectations are regarding whether it continues. But the other relates to this Lily emphasis. I do wonder, you know, how much Lily is specifically responsible for this driver. I don't know if we've got that kind of information yet when Alice is yet, Stephen. - Not yet. I haven't actually gone back to look through, you know, how much of the deals that they've been doing. I just know that I'm seeing them very frequently so far towards the start of this year. And just with reference to your prior questions well about for the pace of deals, I agree with you that I think it's that you can't really take a three month, four month window and just say, oh, well, you know, multiply by three or four and that's how much we're going to have this year. I don't think it works like that. There's very much an ebb and flow to this. I do think more generally there's an expectation that M&A will be a consistent theme for the future. year. Whether we hit an all-time number, I mean, obviously it depends on what metric you're using, whether you're using number of deals or amounts of, you know, money spent on M&A. If you're doing by amount of money, then you probably will have to have some sort of mega merger to try and tip the scales, you know. But I don't foresee that happening. In general, I think it will keep up, but I don't see a reason is to think that this will be some, you know, mega M&A year where people are having to buy stuff for some unforeseen reason. So let me ask you a different question then from this. You know, this is going to recycle a lot of capital back into the system. I'm assuming, right? And so what does that mean? You know, you think we'll look back on this year, like where is that capital going to go? How are we going to see the benefits of this? It feels to me like we went through, okay, so there's a pandemic, boom, then we went through a long and brutal, you know, winter, let's say, biotech winter. The companies that survived some of them managed to move things along and now maybe some of those are reaping the rewards with these, you know, exits or sales, that money is now getting recycled back, I hope. What are your views on what this means going forward? Well, what I think is sort of interesting now, what we're seeing sort of in the last sort of this year versus maybe what we saw last year is I think there's actually a good mix of both private and public takeouts, which is good for both sides of that ledger than right? Because most times, you know, if it's just public companies being taken out, oftentimes VCs have already gotten out by, you know, the time they're being taken out, unless for some reason they've held onto a stake, but usually they're out within a year or so after a company's public. And so they're not really seeing any of the benefits, you know, they saw the benefit of the IPO, assuming that the IPO did okay. But I think what's nice here is that you're getting quick returns for both VCs and then you're also getting capital flowing back into the public specialist funds, which then will immediately be recycled back into new companies, right? They'll be looking for new names to invest that capital into. So I think it's good for both sides for both the early and the later stage biotech and that's this, you know, helps the VCs get a better track record, get better returns, which then allows them to raise their next fund. And so it kind of keeps that capital cycle chugging along, I think. And so that's what I think is quite good about kind of what we're seeing right now. All right. And a couple of other deals out today. The biggest India's Sun Pharmaceuticals is buying organon, a spin out of Merck for about $12 billion. Organon, obviously a global leader in women's health company has a broad portfolio of 70 products. And it's in about 140 countries. It's also a very big biosimilars player. This deal, according to Sun, makes it a top 25 global pharma. And it also makes it a top 10 global biosimilars company. Among other deals, we had two companies who are actually older than biosentory. No small thing, given that we're now over 30 years old, ligand, buying Zoma, a couple of royalty plays. There it's about a seven hundred million dollar deal. And B1, the company formerly known as Beijing, is taking an option to a tri-specific PD1 CTLA-4 Vegef-A molecule from Chinese player Huahui. That will result, if selected in a hundred million dollar exercise and noodles of milestones. All right, Steven, you're just back from London. I know you were on a panel down there. One of the things you were talking about is the state of venture fund raising. This comes as Kerma, which is a very active biotech venture investor, has just raised a new fund. What do you think, Steven? I want to get the good news all up front, I guess, and be very familiar. So this was great. This was great for Kerma. This is their fourth fund that they've raised. Their early stage fund, kind of their flagship fund. So they announced last week they raised 215 million euros, which is about 35% bigger than their prior fund. So it's great to see them raising a new fund, raising a bigger fund so they can do more company creation, more early stage investments. Good news for European biotechs because they focus, I think, about 80% of their capital is targeted at European investments. But I just thought it was interesting that sort of in the context. So I was sharing a panel, I was an investment panel at the Anglo-Nordic conference in London last week. One of the topics of discussion was about this observation that some of the investors made that there had been this shift towards VCs basically shifting towards putting their money into clinical companies and clinical candidates that they don't want to invest in pre-clinical companies. One of the questions raised was, who's left to invest in early stage companies then if everyone's investing in the clinic? So we had this discussion about what were the drivers of that and one of the things that was raised was LPs when they're looking at funds in this sort of a market, in this market environment, they want to have shorter hold times meaning that you need to have, basically, you have to invest in a clinical company because that's closer to where your exit potentially is because you probably need to be in the clinic right now if you're going to do an IPO and you probably need to have clinical data if you're going to get acquired by a pharma. And if you look at our data, our data very much point to M&A, I think when I was looking up over the past five years for M&A, just for private biopharmus, only about 13% of those deals were pre-clinical. So the vast majority are clinical stage or later. The point they were just making was that can be a bit tougher to build a syndicate now and it's a bit tougher to raise in early stage fund because you just have all these dynamics at play. And the current deal seems to kind of be a, it's a current example of those dynamics and how they happen. So in speaking to the team at Kerma, one of the points they made was, yeah, we were super happy, you know, this is a good size fund for what we want to do, but what we found during that fundraising process was this is an easy cell to strategics, to corporates, to specialist funds, you know, that have a solid interest in the biopharmus space, but it was a hard sell to a generalist institutional investor that are looking to bring as an LP like just because there are all these other funds that are doing clinical stuff. And so even if they were going to look for exposure and healthcare, there are other places where they thought they could more quickly get a return than in an early stage fund. So they said that was, that was hard. And Kerma had targeted raising 250 million euros. And so they actually didn't get to their target again. So raised a good size fund, but it wasn't as much as they were, they were hoping for. So to me, it just was sort of like, I guess an example of how the dynamics are kind of playing out in this early stage, you know, fundraising setting. Yeah, interesting stuff. Steven, looking forward to your piece on what Kerma is up to. We'll have that out for you this week. Emerging company profiles, this is a series that we've been running for many, many years now, where we take a look at a private recently launched company working in an innovative space, the latest installment. Steven, who did you pick to write about? Yeah. So the my most recent one was about company Elvara medicines limited based here in the UK in London, led by CEO and Matinsley, who I believe will be potentially presenting at one of our Grand Rounds conferences coming up. And it's wonderful. Yeah, so they are, they're actually a, you know, kind of fit this new co-model. They in licensed a program from Cajun, pharma in Japan and got a pretty good syndicate for beyond. So if you know, the partner's monograph capital, I think was the founding investor that put in 70 million into a series A round. And so this is a target that probably most people we familiar with, but as a as a cancer target, CDK46, which is used as a cell cycle regulator in breast cancer, but they're actually developing this for rheumatoid arthritis. And so I found that quite intriguing. And essentially, the what they found is that CDK46 inhibitors, well, not only having the effect in cancer, they also are able to basically stop signaling for snow vio sites in joints, which are one of the drivers of joint damage in RA. So it's sort of a nonimmune cell mediated mechanism. Basically, they've got a wider therapeutic, they think they have a wider therapeutic window. Then the marketed CDK46 inhibitors use for cancer is why they think that they can make it work here. And so they're basically going to be running a phase 2b study to try and test that hypothesis and see if they've got something that can be sort of orthogonal to sort of the TNFs that are sort of the primarily ones used in in RA. So I think it's interesting, interesting story. All right. Thank you for that. Steven, it's a good piece and certainly good news for RA patients if this makes it to the finish line. Well, that's it for our show this week. Thank you for tuning in. Thank you to Kendall Square Orchestra for making the music for both of Biosentries podcasts. We'll have our sister podcast later this week with the CEO of Sincona Chris Hollywood in conversation with Simone. Chris, always interesting to hear from, especially on the eve of Bioequity Europe. Until next week. I'm Jeff Kranmer, host of the BioCentury This Week. Podcast will catch you next week. BioCentury would like to thank IQVIA Biotech for supporting the BioCentury This Week podcast. To learn more about how IQVIA Biotech's dedicated teams deliver support from innovation to impact, visit IQVIA Biotech.com.