Robert Coughlin, MassBio CEO (MassBio)

Af­ter down year, 2020 brings new cash in­to Mass­a­chu­setts biotech

The sea of cash that has hit biotech since the pan­dem­ic be­gan has not left out its biggest sec­tor: Mass­a­chu­setts.

Through the first half of 2020, ven­ture cap­i­tal firms have poured more than $2.1 bil­lion in­to biotechs in the state, set­ting the sec­tor on a pace to re­bound af­ter a down year in 2019. The new fig­ure, in­clud­ed in a new in­dus­try snap­shot from the trade group Mass­Bio, is more than 2/3 the $3.1 bil­lion biotechs in the state raised through the en­tire­ty of last year, and would put the sec­tor on track to raise more than any year in the last decade be­sides 2018.

The his­toric IPO boom hasn’t passed the sec­tor over ei­ther. A third of biotech IPOs came from Mass­a­chu­setts, with each com­pa­ny av­er­ag­ing $187 mil­lion.

Eliz­a­beth Steele Mass Bio

“This is all hap­pen­ing dur­ing a pan­dem­ic that is crip­pling the world econ­o­my, but it is def­i­nite­ly putting a spot­light on our in­dus­try and bio­phar­ma in­no­va­tion,” Eliz­a­beth Steele, vice pres­i­dent of pro­grams and glob­al af­fairs at Mass­Bio and au­thor of the re­port, told End­points News. “In 2019, there was a dip in ven­ture cap­i­tal, there was a dip in IPOs over the year be­fore, and I think in 2020 every­one un­der­stands what it feels like to have an un­met med­ical need.”

The re­port comes out as BIO, PhRMA and the in­dus­tries they rep­re­sent go toe to toe again with the White House on pric­ing leg­is­la­tion, af­ter Pres­i­dent Trump on Fri­day signed ex­ec­u­tive or­ders de­signed to curb drug prices. BIO CEO Michelle Mc­Mur­ry-Heath spoke out against the or­ders — which are con­sid­ered large­ly sym­bol­ic on their own — on Fri­day.

In a state­ment, Mass­Bio CEO Robert Cough­lin ar­gued the Mass­a­chu­setts re­port and the de­flat­ed 2019 num­bers were ev­i­dence that drug-pric­ing leg­is­la­tion that ad­vanced last year, which in­clud­ed a bi­par­ti­san bill in the Sen­ate and a De­mo­c­ra­t­ic bill in the House, had culled in­vest­ment. No­tably, though, fund­ing in Mass­a­chu­setts had been down since the first half of 2019, be­fore ei­ther bill was in­tro­duced. The is­sue had, how­ev­er, al­ready ap­peared on the De­mo­c­ra­t­ic cam­paign trail.

“In 2019, we saw some of the most se­vere leg­is­la­tion around drug pric­ing for the in­dus­try, both in Mass­a­chu­setts and fed­er­al­ly, which led to a de­cline in in­vest­ment as we pre­dict­ed it would,” Cough­lin said. “The COVID-19 pan­dem­ic has since up­end­ed our coun­try’s econ­o­my, put a spot­light on the true val­ue of the bio­phar­ma in­dus­try in ad­dress­ing a hu­man health cri­sis, and cre­at­ed a bet­ter un­der­stand­ing of just how dif­fi­cult it is to de­vel­op a ther­a­py or vac­cine.”

The new re­port al­so shows that de­spite re­ports of traf­fic and over­crowd­ing in Kendall Square — or at least pre-pan­dem­ic re­ports of traf­fic and over­crowd­ing — Mass­a­chu­setts re­mains the fastest grow­ing state for biotech R&D jobs. Those jobs rose 18% last year to over 45,000, putting the state just be­hind Cal­i­for­nia. And to­tal Mass­a­chu­setts biotech jobs rose 7.7% last year to just un­der 80,000. Take­da and Sanofi were the largest em­ploy­ers.

Cam­bridge alone con­tin­ues to re­ceive 59% of all in­vest­ment, al­though Mass­Bio ex­pects to see that num­ber de­cline in the near fu­ture.

“We’re hop­ing that more mi­ni-clus­ters pop up in the ar­eas around Boston/Cam­bridge and push fur­ther out,” Steele said. “Cam­bridge is def­i­nite­ly spe­cial and re­mark­able but it doesn’t mean that a com­pa­ny can’t be based 20 min­utes away and still when the pan­dem­ic is over come in­to Cam­bridge for a cof­fee and meet peo­ple face to face.”

The lead­ing Mass­a­chu­setts pri­vate rounds came from Black­stone-backed An­thos Ther­a­peu­tics, which raised $250 mil­lion in a sin­gle round, El­e­vate Bio, and Beam Ther­a­peu­tics. The lead­ing IPOs came from For­ma Ther­a­peu­tics, which raised $278 mil­lion, and Black Di­a­mond Ther­a­peu­tics, which raised $231 mil­lion.

Steele said she ex­pects af­ter a huge year in 2018 and a down year in 2019, the next few years will bring the steady rise the in­dus­try saw for much of the 2010s.

No­var­tis reshuf­fles its wild cards; Tough sell for Bio­gen? Googling pro­teins; Ken Fra­zier's new gig; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

If you enjoy the People section in this report, you may also want to check out Peer Review, my colleagues Alex Hoffman and Kathy Wong’s comprehensive compilation of comings and goings in biopharma.

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Demis Hassabis, DeepMind CEO (Qianlong/Imaginechina via AP Images)

Google's Deep­Mind opens its pro­tein data­base to sci­ence — po­ten­tial­ly crack­ing drug R&D wide open

Nearly a year ago, Google’s AI outfit DeepMind announced they had cracked one of the oldest problems in biology: predicting a protein’s structure from its sequence alone. Now they’ve turned that software on nearly every human protein and hundreds of thousands of additional proteins from organisms important to medical research, such as fruit flies, mice and malaria parasite.

The new database of roughly 350,000 protein sequences and structures represents a potentially monumental achievement for the life sciences, one that could hasten new biological insights and the development of new drugs. DeepMind said it will be free and accessible to all researchers and companies.

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In­side Bio­gen's scram­ble to sell Aduhelm: Pro­ject 'Javelin' and pres­sure to ID as many pa­tients as pos­si­ble

In anticipation of Aduhelm’s approval for Alzheimer’s in June, Biogen employees were directed to identify and guarantee treatment centers would administer the drug through a program called “Javelin,” a senior Biogen employee told Endpoints News.

The program identified about 800 centers for use, he said, and Biogen now pays for the use of bioassays to identify beta amyloid in potential patients having undergone a lumbar puncture procedure, the employee said — and one center preparing to administer the drug confirmed its participation in the bioassay program.

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EMA re­jects FDA-ap­proved Parkin­son's drug, signs off on Mod­er­na vac­cine use in ado­les­cents ahead of FDA

The European Medicines Agency on Friday rejected Kyowa Kirin’s Parkinson’s disease drug Nouryant (istradefylline), which the US FDA approved in 2019 under the brand name Nourianz.

EMA said it considered that the results of the clinical studies used to support the application “were inconsistent and did not satisfactorily show that Nouryant was effective at reducing the ‘off’ time. Only four out of the eight studies showed a reduction in ‘off’ time, and the effect did not increase with an increased dose of Nouryant.”

6 top drug­mak­ers of­fer per­spec­tives on FDA's new co­vari­ates in RCTs guid­ance

Back in May, the FDA revised and expanded a 2019 draft guidance that spells out how to adjust for covariates in the statistical analysis of randomized controlled trials.

Building on the ICH’s E9 guideline on the statistical principles for clinical trials, the 3-page draft was transformed into an 8-page draft, with more detailed recommendations on linear and nonlinear models to analyze the efficacy endpoints in RCTs.

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Al Sandrock, Biogen R&D chief (Biogen via YouTube)

Bio­gen has a shaky end to H1 with a $542M write-off adding to its woes — but an­a­lysts see big rev­enue ahead for Aduhelm

All eyes at Biogen’s Q2 earnings call Thursday were on Aduhelm, but investors also got a glimpse of what Biogen would have faced had the FDA not opted to approve their controversial Alzheimer’s drug.

That glimpse, revealing a combination of declining sales, growing competition and failed medicines, underscores the stakes of the big biotech’s Aduhelm efforts, as execs punch back at the criticism they’ve engendered in the political and medical world and vigorously pushes its sales staff to roll out the drug as fast as possible.

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Vas Narasimhan, Novartis CEO (Jason Alden/Bloomberg via Getty Images)

No­var­tis dis­cards one of its ‘wild card’ drugs af­ter it flops in key study. But it takes one more for the hand

Always remember just how risky it is to gamble big on small studies.

A little more than 4 years ago, Novartis reportedly put up a package worth up to $1 billion for the dry eye drug ECF843 after a small biotech called Lubris put it through its paces in a tiny study of 40 moderate to severe patients, tracking some statistically significant markers of efficacy.

By last fall, the program had risen up to become one of CEO Vas Narasimhan’s top “wild card” programs in line for a potential breakthrough year in 2021. These drugs were all considered high-risk, high-reward efforts. And in this case, risk won.

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UP­DAT­ED: Three biotechs price hefty IPOs just be­fore the week­end, while a fourth and a SPAC seek spots on Wall Street

Editor’s note: Interested in following biopharma’s fast-paced IPO market? You can bookmark our IPO Tracker here.

A handful of biotechs are hitting Wall Street just before the start of the weekend, with three companies — Caribou Biosciences, Sophia Genetics and Absci — all pricing big raises Wednesday and Thursday. Gamma delta T cell-focused IN8bio relaunched its IPO campaign months after postponing it last November, seeking a slightly lower raise. And another SPAC has filed for a public debut.

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Victor Perlroth, Kodiak Sciences CEO

Ko­di­ak turns down $125M pay­ment from Bak­er Bros. deal, slash­es roy­al­ty cap by 55%

Following a massive public raise last November, Kodiak Sciences has re-worked a royalty sale agreement with an old partner — and declined new funds in the process.

Kodiak is turning down a planned $125 million payment from Baker Bros. Advisors, according to an SEC filing, cutting short an agreement that saw the biotech hand over a 4.5% stream of royalty sales on its experimental anti-VEGF therapy KSI-301 for retinal vascular diseases. In conjunction with the move, Kodiak is shrinking the royalty cap from just over $1 billion to $450 million.