377: Melodrama at the FDA and the Pfizer-Novo bidding war

Welcome to this week's episode of The Read Out Loud, a weekly biotech podcast from stat. I'm Adam Forrestine. And I'm Elaine Chen. Alison DeAngelis is off this week. It's Thursday, November 6th, and we have a jam-packed show for you this week. You may have noticed that, well, let's just say the FDA is going through some stuff. Our colleague, Lizzie Lawrence, will join us to sort out who's in, who's out, and who's cleaning up the mess at White Oak. We should all be loved as much as Metsera is loved by Pfizer and Novo Nordisk. Everyone's favorite OBC drug bidding war escalated this week. Bids are rising, tempers are flaring, and the lawyers are winning. We'll break it all down. But first, a word from our sponsor and a roundup of this week's biotech news. Looking to reduce production costs while maintaining the highest quality? Pyrrolite Resins from Ecolab Life Sciences deliver unmatched performance with uniquely uniform beads that ensure consistent, reliable results every time. Supported by dual-continent supply, Ecolab Life Sciences provides the supply chain security your operations depend on. Discover why Pyrrolite Resins are the trusted leader in purification at PyrroliteResins.com/ecolab. Okay, so we're going to be talking to our colleague Lizzie about the FDA in a few minutes, so it's fitting to just start off this week's news roundup with a regulatory setback affecting Unicure. The company's plan to seek the approval of its gene therapy for Huntington's disease were thrown into doubt on Monday after FDA officials said they no longer agreed that data from a completed clinical trial were sufficient for a marketing submission. Master Unicure said it had reached an agreement with the FDA about its submission plans, but we now have a new FDA, new rules, and that's left Unicure trying to figure out how to move forward. Yeah, you know, this Unicure FDA update took a lot of folks by surprise. We had Unicure CEO Matt Capista on the show in September to talk about what looked like, you know, and still might be a remarkable slowing of Huntington's disease progression from its gene therapy. And Unicure is not the only biotech dealing with an FDA setback this week. The agency on Tuesday rejected a drug from Biohaven that was intended to treat patients with a rare neurodegenerative disease called SCA. According to Biohaven, the FDA rejected its drug due to issues with the external control arm used as a comparator in its clinical trial. Yeah, like Biohaven, the FDA's disagreement with Unicure is over the use of an external control group in a clinical trial, and a lot of people this week are trying to figure out if the FDA has changed its overall view on this regulatory tool, or if there are simply flaws in each of these situations, it's definitely going to be something to watch. Moving on, Allison and our colleague, Jason Mast, had a really nice scoop this week reporting on the surprise shutdown of Arena Bioworks, a buzzy biomedical research institute that had launched just two years ago with an A-list cast of scientists and $500 million in funding. Arena staffers were told this week that the institute was shutting down due to concerns about financing and the poor investment market. Arena opened its doors in January 2024 with a somewhat unconventional, but simple concept. Pool a large amount of money to fund risky, potentially groundbreaking research in the vein of belt labs. The business model, however, depended on Arena's ability to continually spin out startups, bringing in revenue to justify the initial investment and continue funding core operations. That just didn't happen. Lastly, the Trump administration announced deals with Eli Lilly and Nova Nordisk to lower the prices of their weight loss drugs offered to Medicare and Medicaid in exchange for wider access in those programs. This is a breaking story as we're recording the podcast, so go to www.statnews.com for more coverage. Get straight into all the FDA drama this week. We're going to bring on our colleague Lizzie Lawrence, who covers the FDA. Hi, Lizzie. Welcome to the podcast. Hi. Thanks for having me. Good to be back. Lizzie, there is so much to discuss with you about the FDA and all of the turmoil inside the agency. So let's get right into it, starting with a blockbuster story you wrote last week about Vinay Prasad, one of the FDA's top officials and director of the center in charge of biologics and vaccines. You reported on what you described as a slow boiling feud between Prasad and his staff. Tell us more about that. So I've been very interested in how Prasad has taken on his role after this dramatic firing and rehiring by the White House over the summer, but things were kind of quiet for a while. He was not as public facing as he was during his first tenure. Anyway, in the past few weeks, I just had a number of agency sources reach out to me about this problem at Sieber, where Prasad had, you know, across his first tenure as well sort of just removed people suddenly without giving much public explanation. And it had been kind of a slow thing that was happening, but in the past few weeks, it had kind of picked up. And so altogether, he had fired seven people or not fired from the agency, but pushed them out. And at the same time, sources told me that things were just getting really tense. He overruled decisions quite a bit, that he would message reviewers directly, which there's not a problem with that, but I think in the bigger context of, you know, it's kind of scary to get just a random, if you're like a pretty low level reviewer, to get a random request from the head of your center. There's some weird power dynamics there, and I think with the firing of people, there's a lot of fear in paranoia, and it's making it difficult for people to do their jobs. And the other thing people told me is that because of this, people were trying to move to the drug center and hollow out the center of biologics and vaccines, which has already seen quite a bit of attrition from layoffs and from retirements and all of that. So you spoke to more than a dozen current and former FDA employees for this story. Can you tell us more about what they said on Prasad's leadership style and the impact he's having on the inner workings at the FDA? Definitely. So he seems to have taken a very sort of academic leadership style. You know, he's not run a large organization before. So one anecdote I liked was in his first address to staff, you know, there had been all of this turmoil with the layoffs had just happened, there was a lot of uncertainty, but he addressed none of that and instead talked about Kaplan-Meier curves, a type of statistical analysis used in medical research. And everyone was like, you know, okay, we know what Kaplan-Meier curves are. We're scientists. Can we talk about, you know, the management of the center and the future of the center? So I think that, you know, there were sort of little quirks about his leadership style, you know, doing kind of these round robin presentations on different submissions. He's really clearly passionate about science and evidence and wants to get really involved himself. And again, all of them, there's no judgment on that type of style, but I think that coupled with just suddenly pushing people out, overturning decisions left and right, that has created kind of a chilling effect for folks in the center. So let's talk a little bit more about those officials, the staff that have either left the agency or been pushed out or have tried, like you said, have tried to transfer to other departments, divisions within the FDA. Who are these folks? Yeah. So it started with, you know, you and I reported about this Adam and June, but Nicole Verdun and Rachel Anatole, who are the head of the top gene and cell therapy regulators, he pushed them out. And it's complicated. I know there were some complaints about Verdun's management style before they were walked out of the building, which was escorted out of the building, which freaked people out. And then one of Prasad's first moves upon returning after the firing by the White House was ousting Richard Forshee, who's the head of biostatistics at CBER. And something important about that is he oversaw vaccine surveillance and safety. And I've been told that Prasad has gotten extremely involved in the weeds with this since pushing Forshee out, indicating that he wanted to, he wanted one less barrier between him and this work. And then he also, I think something that was really a triggering point for people was pushing out Anuja Rustogi, who is the head clinical reviewer in the vaccine review section. Again, no explanation. Just all of a sudden your colleague is there and then the next second they're gone. And it's not clear why. And we also, because Prasad is not only the director of CBER, he is the chief medical and scientific officer. He's removed two people underneath him there. He removed Daniel Singer, who is the head of public health preparedness and response, and Sandy Retzkis, the head of org and products, both have left unclear where Sandy is. I think Daniel Singer is actually in a different part of HHS. So we have all of this turmoil happening. Is Prasad's job safe? I think, you know, Politico had a great story yesterday too about Prasad standing at the White House. And one quote that kind of made me laugh was he isn't not in hot water. I think that there is some recognition that there is an issue. And I know that complaints have been filed to HR. Is that enough to remove him? I don't know. I think there is some recognition at higher levels that this behavior has caused problems. McCary really put everything on the line to get him back the first time. So I feel like it would take a lot to remove him again. Yeah. Speaking of controversies somewhat related to Vinay, but just the FDA, Lizzie, you and Adam teamed up this weekend on another huge FDA shake-up story around George Tidmarsh, the top regulator for the drug center at the FDA, or actually the former director because he's actually now gone. So tell us more about what happened there. Yeah. So Tidmarsh was called into a meeting with Commissioner McCary on Friday, and he told me he thought he might be informed that Prasad was leaving the agency, but instead he was told that he was under investigation for allegedly using his position as top drug regulator to advance a personal vendetta against a business associate. And so he was placed on administrative leave and resigned, but apparently he's now fighting that resignation. The bottom line is he's gone. So we'll get into the reasons why he's gone in a second, but you talked to Tidmarsh, George Tidmarsh. You actually met with him in person on Sunday. Tell us about that meeting, why he wanted to meet with you. He's gotten him a guide known as, I think, someone who's not exactly particularly friendly to reporters. What did he tell you, and why did you have this meeting with him? Yeah. So I received a LinkedIn message on Saturday night from George Tidmarsh, and I was shocked, particularly my last LinkedIn message had been about a pretty critical story related to his regulatory decisions around autism, and so that had been the last message. And then he asked if I could meet in person the next day. And obviously I said yes, I didn't really know what it would be about, but I had a hunch if he's reaching out to a reporter or something, pretty crazy has happened. And so we met at a cafe in Silver Spring, and I think he wanted to get his side out, is why he was willing to meet with me on the record. It's complicated, and there are many sides to the story. The side he wanted to share primarily was he had raised questions about this Priority Voucher Review program that McCary is standing up to have very speedy drug reviews, and the idea is to kind of have a yes or no vote at a tumor board style meeting, and Tidmarsh had raised questions about whether this is legal, this type of regulatory decision making, and then there had also been pretty intense beef between him and Prasad, and just generally between Cedar and Sieber. Well, yes, tell us more about how Vinaya plays into all of that. Yeah, because I think this is a really fascinating part of the story, Lizzie, that essentially there's war at the top of the FDA between these two very powerful officials. Yeah, right, so I'm not sure when the war started, but as I said before, many employees in Sieber were very, very unhappy. There was this exodus, and for example, even Prasad's deputy, Brittany Goldberg, had moved from Sieber to Cedar earlier in October. Something else was Prasad started blocking these transfers, and I think there was definitely tension around that on Tidmarsh kind of taking his reviewers. The other aspect of the tension was that, like I said, Prasad has a habit of reaching out directly to reviewers, and because he is also chief medical and scientific officer, I think the whole agency is technically in his purview, or at least he sees it that way. So he started reaching out to reviewers in the drug center without running it by Tidmarsh or Tidmarsh's deputy. And when Tidmarsh pushed back on that and said, "Hey, go through me first," again, this is all recounting from Tidmarsh's perspective, because Prasad has not talked to me, but Prasad sent very threatening messages to Tidmarsh's deputy, Mike Davis, saying, "I will use all my political capital to get you fired if you don't listen to me." When I tell a review where I need something, they need to respond, that kind of thing. Okay. So another key aspect of this saga is Tidmarsh's relationship with a former business associate. He was placed on an administrative leave because he was accused of using his position to exact revenge on this former associate, Kevin Tang. Adam, tell us more about this part, because you've been reporting on this part. So, yeah. So, well, Lizzie and I had been already doing some reporting on this relationship between George Tidmarsh and a San Diego-based healthcare executive and investor named Kevin Tang. Earlier this year, I'd done a story that was sort of this strange LinkedIn post that George Tidmarsh had posted on LinkedIn on his personal page, kind of attacking a drug for lupus that a company called Arinnia Pharmaceuticals markets it's an approved drug in the markets. And he had basically raised questions about the safety of the drug, and it was a very odd thing for basically the top regulator of drugs to do on his personal LinkedIn page. So, the connection that I realized was that this was a company at which Kevin Tang was a large shareholder, he's the chairman of the board. And so, I'd also had known that way back, if you go back to sort of about almost a decade ago, Tidmarsh and Tang were business partners. Tidmarsh was the CEO of a company that Kevin Tang had started and he was one of the large shareholders and on the board and actually had, Tidmarsh had been fired from that company back in 2019, so there was this kind of this fraying of the relationship between these two guys and it seems like it seemed like that now that Tidmarsh was in this position of extraordinary power and you think about someone who is essentially the top regulator of drugs at the FDA, you know, he's sitting at the top of the leadership there and his ability to kind of use that position, you know, to essentially exact some financial or business damage to business interests of Kevin Tang. So Lizzie and I had been working on that story when all of this stuff happened and as Lizzie said when George was called in to McCarrie's office on last Friday to tell him that he'd been placed on administrative leave, it was because of a complaint that had been filed by Kevin Tang with the agency kind of talking about or revealing this kind of this vendetta that Tidmarsh had been, you know, had had against Tang and what he was doing. Okay, so these allegations against Tidmarsh regarding Kevin Tang came with receipts. So actually there was a lawsuit filed by a drug maker that has ties to Kevin Tang and there were a lot of juicy details in there. Lizzie, tell us more about that lawsuit. Yeah, so that lawsuit definitely came with receipts and alleged messages that Tidmarsh had sent to Tang and Tang's business associates. So one that stood out to me was Tidmarsh even before going into the FDA had made this post talking about how he thought that this product, this natural thyroid medication product was unsafe and that he was going to work with a new FDA on taking them off the market and Tang owned a company that dealt in this space. Tidmarsh apparently sent an email with that linked in post with the subject line Goodluck to Tang, which is very ominous and it also told one of his business associates to fuck you. And there's a lot in there and of course Tidmarsh has not had a chance to respond within the legal filing. So we'll have to see what happens there. It's just if you sort of step back on this, this essentially is like this personality clash, this fight. When you think about this whole story, it's George Tidmarsh holding a decade long grudge against Kevin Tang, this San Diego healthcare executive and just like this simmering anger against him. And you can see that in the lawsuit all of these like over the years, these emails, hostile messages and threats and then Tidmarsh gets into power at the FDA and essentially here's a job where you're supposed to be, your job is supposed to be pursuing public health needs of Americans as the agency's top drug regulator and said he seems to be obsessed with just exacting revenge on one individual and trying to inflict as much damage to this person as possible. Clearly, it's not someone who's at the FDA at the top of the FDA is supposed to do and it's something that you really can't recover from. And so this all exploded over the weekend, Lizzie, you and I, we spend most of our Sunday, I think writing, sorry, well into Sunday night. But again, one thing I wanted to ask you Lizzie, because again, you covered the FDA so closely and so you've got this Vennai issue, and now we have this Tidmarsh thing blowing up. What does this say about the FDA and when you talk to people who look at the FDA from the outside, what has their reaction been to all of this turmoil and drama? I mean, people are like, this isn't a lawsuit so I won't curse, but what the F is going on here. The FDA has been known as very careful, very cautious, very worried about making any kind of statement that could move markets, that could do XYZ. Some critics would have maybe called it plotting even, very scared to take direct action. Now we've reached the total opposite end of the spectrum. One person said to me, it's like we have FDA mean girls burn books out in public, which I think is an apt response. These personal tensions have always existed, but it's all spilling into the public in a very dramatic way. The worry is that this type of uncertainty in chaos could affect drug development, could affect patients' lives and getting certain medications. So there's a lot of fear and I think people are hoping that whoever leads the drug center next will help create some more stability in the agency. Yeah. When I talked to one prominent investor about all of this on Monday, his word to describe this was, it's an embarrassment. That's what he took away from all of this and I think it's an apt way to describe what's going on. It's not the way that the world's most preeminent FDA drug regulatory agency in the world should be acting, should be behaving and it's an embarrassment, he told me and I think that that's what a lot of people feel. Well Lizzie, thank you so much for coming on and for covering all of this. Thank you. Thanks for having me. So Elaine, let's turn to the bidding war between Novo, Nordisk and Pfizer. They're each trying to acquire Metzera. This has dramatically escalated in the past few days. As a reminder, Pfizer had said a month ago that it would acquire Metzera, but Novo last week suddenly swooped in, said it would make a higher offer. The pharma companies have been going back and forth with new bids. This recently, Novo offered up to 10 billion dollars and Pfizer reportedly has matched that offer. Yeah, this is getting very tense. Pfizer is aggressively challenging Novo's takeover attempt. It's filed two lawsuits so far. It claims that the structure of Novo's deal won't stand up to regulatory scrutiny and that Novo is engaging in anti-competitive behavior. Why are these companies so bent on getting Metzera when there are so many other obesity startups out there, Elaine? Yeah, I truly wonder that too. We have Viking structure, companies that have oral options that you would think perhaps are more attractive in the current market. What Metzera has going for it is it's developing drugs that are aimed to be dosed monthly. As we know, the current treatments on the market are weekly, but I think it's still not clear if monthly dosing would actually be that attractive or that big of an advantage. I think patients mostly just want very effective drugs. Metzera also has not yet published data proving that its drugs can be competitive while dosed monthly. For Pfizer, at least, it would be a way for them to get on the market because they don't have any approved drugs. For Novo, I'm a little bit more confused about their strategy here because Metzera's drugs target GLP1 and Amalyn, and Novo already has several drugs in its pipeline targeting those hormones. And so it seems like there's a lot of overlap there, though Novo for its part argues that Metzera's assets would be complimentary. So Allison and I actually talked with Novo's chief scientific officer Martin Lunga last week just coincidentally right before the Metzera news came to light, so we didn't ask him about Metzera because we didn't know about it yet. But he talked a lot about Novo's strategy under its new CEO, and essentially he stressed that they're trying to double down on obesity diabetes and the comorbidities rather than venture into other disease areas that they have kind of started to do in recent years. What's interesting is that we did also ask him about Novo's strategy for MNA. If you really want to address the patient needs in diabetes and obesity, we have to have a very, very pipeline, not only in subcutaneous versus tablet-based therapy, but also in terms of mode of actions and addressing the different medical needs that the patients display. He stressed that they're actually interested in having a diverse pipeline with different mechanisms, which, given what's happened now, is even more confusing because, like I said, the Metzera deal, that's overlapping mechanisms. It doesn't seem to fit with the narrative that they're trying to go for new mechanisms. So Elaine, let's switch over to Pfizer. Tell us a little bit more about the arguments that that pharma giant is making against the Novo deal. OK, so essentially, Novo has structured its deal so that it'll pay a large amount, several billions of dollars upfront in exchange for half of Metzera's stock, which Metzera would then pay out as dividends to its shareholders. Pfizer argues that Novo may be trying to do this before the FTC is able to review the merger, even though it would in effect block other potential acquirers because executives and employees could pocket that money and have incentive to leave or not really develop its assets further. So the FTC actually has caught onto this, and it actually sent a letter to Novo and Metzera this week raising some of those concerns. Novo argues that it's still confident the deal would go through and that it's communicating with the FTC. Pfizer also argues that Novo is engaging in anti-competitive behavior. Pfizer claims that Novo is trying to acquire Metzera to kill it off as a potential competitor, which Novo has denied. So this is really a fascinating story. Elaine, it seems like every day a new development, a new twist, there's some court rulings, as we said. The lawyers always win in deals like this, but I wanted to step back for a second and talk to us a little bit about how much Novo needs this deal. We zoom out, what are the growth prospects for Novo outside of a Metzera deal if, let's say, for instance, Pfizer wins? Yeah, so I think the general consensus is that Novo definitely needs some new growth drivers, whether that's Metzera or anything else. Eli Lilly is clearly overtaking it in the GLP1 market. We just got Q3 earnings. Lilly's terzapatide is now the best-selling drug in the world, and in contrast, Novo just trimmed its sales estimates for the year. So, I mean, Novo does have some short-term catalysts. It's we're expecting approval of oral semagglotide for obesity later this year. It's interesting because investors are not putting as much stock into that as they are into Lilly's small molecule or for Gliperon, which is also under FDA review. I think people think that because oral semah is a peptide, it could be more expensive to manufacture than Lilly's small molecule, but when we talked with CSO Martin Lange, he pushed back on that. A patient will not care whether they take a small molecule or a protein-based therapy. What they see is a tablet, and if they get the good efficacy and the good safety and solubility with that tablet, I believe that the choice is semagglotide. And he argued that oral semah has superior efficacy and also has established benefits like cardiovascular risk prevention. Of course, Novo also has Kagri semah, which is a combination of semagglotide with its amylin agganist kagrillin tide. We've talked a lot about that on this podcast. I guess in general, Novo argues that they have a pretty diverse pipeline that can serve different needs of patients. They say that getting the most weight loss is not the most important thing. They need drugs that can offer moderate weight loss but are really tolerable, and so they argue that they have all of that. So Lange, the burning question that I really want to know the answer to is when you talk to Martin, does he pronounce it GLP1 or GLIP1? Well, this is what he said. I have never myself used the phrase GLIP1. I always say GLP1. And I was sad that you weren't around when we interviewed him because I really wanted to rub that on your face. We could have had an argument about this. Again, this will be the hill that I die on, so it's fine. That does it for another episode of the Read Out Loud. Thank you to Haya Synth Emponato 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 how much you would pay for Metzera. 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 podcast. See you next week.