Biotech boards bur­dened: Bridg­ing the suc­cess gap

Based on our nu­mer­ous con­ver­sa­tions with board mem­bers and CEOs, we sur­mise that biotech boards are fac­ing busy meet­ing agen­das with a mul­ti­tude of top­ics rang­ing from gov­er­nance, fi­nan­cial au­dits, and bud­get re­views to com­pen­sa­tion and board nom­i­na­tion work. While it is the job of the CEO to out­line strat­e­gy and plans for the busi­ness, the board is tasked with pres­sure test­ing those pro­pos­als to en­sure that they are sound. Of­ten boards do not have am­ple time to re­view ma­te­ri­als in ad­vance, there is in­ad­e­quate time for dis­cus­sion or prop­er de­bate dur­ing the meet­ing, and mem­bers lend their sup­port with­out hav­ing all the in­for­ma­tion in re­al time to as­sess un­der­ly­ing as­sump­tions.

Fill­ing The Suc­cess Gap

As biotech boards are faced with chal­lenges giv­en tech­ni­cal com­plex­i­ties and bi­na­ry out­comes, over­com­ing the Suc­cess Gap re­quires ex­per­tise, trans­paren­cy and de­bate, which are not eas­i­ly ac­com­plished.

The Suc­cess Gap is the chasm be­tween the lev­el of in­for­ma­tion, da­ta, an­a­lyt­ics and as­sess­ment that is pre­sent­ed to the board rel­a­tive to the kind of analy­sis and depth of un­der­stand­ing that must be pro­vid­ed to the board when it is mak­ing de­ci­sions. This is the gap be­tween well thought-out de­ci­sions and those that are made un­der time pres­sures or with im­per­fect in­for­ma­tion. In our con­ver­sa­tions and based on our re­search on the top­ic, it is ev­i­dent that many board mem­bers feel that they are not suf­fi­cient­ly knowl­edge­able about key dri­vers and are not able to get in­de­pen­dent in­for­ma­tion about the com­pa­ny. In many ways, the board is large­ly ed­u­cat­ed on the busi­ness by the CEO and is re­liant on the ac­cu­ra­cy, in­sights and ob­jec­tiv­i­ty of the pro­pos­als that are pre­sent­ed.

Time To Take “SOCK” Se­ri­ous­ly? Be­cause Strate­gic Op­er­a­tional Items Can Be The Dif­fer­ence Be­tween Suc­cess And Fail­ure

We ar­gue that hav­ing am­ple over­sight on strat­e­gy may be the most like­ly de­ter­mi­nant of fu­ture suc­cess or lack there­of. We ad­vo­cate that a new Strate­gic Oper­a­tions Coor­di­na­tion TasKforce (fond­ly named “SOCK” as a friend­ly form of SOX) should be re­quired for each board. This will be a sub­set of the board that will ex­am­ine in de­tail the mer­its of cer­tain projects, strate­gic ini­tia­tives, po­ten­tial deals or crit­i­cal op­er­a­tional con­sid­er­a­tions such as ma­jor clin­i­cal/sci­en­tif­ic de­ci­sions. This group will not han­dle these items in lieu of the board but would rather en­sure that the board is well pre­pared to dis­cuss these is­sues when they come up for a broad­er dis­cus­sion. In essence, the role of SOCK is to vet these in­puts ahead of time to bridge the Suc­cess Gap.

Un­ques­tion­ably this idea will be con­tro­ver­sial. But boards are al­ready hir­ing ex­ter­nal ex­perts to help with au­dit and com­pen­sa­tion among oth­er items, and we ad­vo­cate that the SOCK task­force should al­so be able to hire ex­ter­nal ex­perts to help en­sure that there is care­ful over­sight of de­ci­sions that can trans­late in­to suc­cess or fail­ure of the com­pa­ny.

Ques­tions For In­vestors And Boards To Keep In Mind To Over­come Mis­con­cep­tions

In­vestors in the biotech sec­tor do not al­ways have ac­cess to boards and many board mem­bers are not nec­es­sar­i­ly ex­pe­ri­enced with how in­vestors at­tribute val­ue to com­pa­nies in the pub­lic mar­ket. Not sur­pris­ing­ly, this can lead to some mis­con­cep­tions and con­fu­sion. There are sev­er­al ques­tions that may jump-start a con­ver­sa­tion to build un­der­stand­ing be­tween the two sides. In­vestors should con­sid­er how the board is struc­tured, its lev­el of in­de­pen­dence, and its lev­el of op­er­a­tional biotech ex­per­tise.

We pro­pose that board mem­bers keep a keen eye on how in­vestors eval­u­ate their com­pa­nies, what the val­ue propo­si­tion is rel­a­tive to com­pet­i­tive tech­nolo­gies or drugs and get a clear sense of the dri­vers of the val­ue cre­ation rel­a­tive to what in­vestors are look­ing for. In cas­es where there is a wide gap be­tween the in­ter­nal and ex­ter­nal view, get­ting a deep un­der­stand­ing of why there is ex­ter­nal skep­ti­cism may help the board and man­age­ment fill in those gaps. In cas­es where it is not pos­si­ble to fill the gaps, the board may want to con­sid­er what is miss­ing from the in­ter­nal view and whether key in­ter­nal as­sump­tions have been vet­ted ad­e­quate­ly.

In a sec­ond big set­back for Covid-19 an­ti­body treat­ment hopes, Re­gen­eron halts en­roll­ment for more se­vere pa­tients

Regeneron has just delivered more bad news for the hope that neutralizing antibodies could be used to treat patients with more severe forms of Covid-19.

The New York biotech said today that an independent monitoring committee recommended halting enrollment of patients who need high-flow oxygen or mechanical ventilation in one of the trials on their antibody cocktail, after finding “a potential safety signal” and “an unfavorable risk/benefit profile.” The news comes a week after the NIH scrapped a trial of Eli Lilly’s Covid-19 antibody after finding it was having little effect on an initial cohort of hospitalized patients.

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Bris­tol My­er­s' Richard Har­g­reaves pays $70M to launch a neu­rode­gen­er­a­tion al­liance with a star play­er in the ma­chine learn­ing world

Bristol Myers Squibb is turning to one of the star upstarts in the machine learning world to go back to the drawing board and come up with the disease models needed to find drugs that can work against two of the toughest targets in the neuro world.

Daphne Koller’s well-funded insitro is getting $70 million in cash and near-term milestones to use their machine learning platform to create induced pluripotent stem cell-derived disease models for ALS and frontotemporal dementia.

Patrick Soon-Shiong at the JP Morgan Healthcare Conference, Jan. 13, 2020 (David Paul Morris/Bloomberg via Getty Images)

Af­ter falling be­hind the lead­ers, dissed by some ex­perts, biotech show­man Patrick Soon-Sh­iong fi­nal­ly gets his Covid-19 vac­cine ready for a tri­al. But can it live up to the hype?

In January, when dozens of scientists rushed to start making a vaccine for the then-novel coronavirus, they were joined by an unlikely compatriot: Patrick Soon-Shiong, the billionaire doctor most famous for making big, controversial promises on cancer research.

Soon-Shiong had spent the last 4 years on his “Cancer Moonshot,” but part of his project meant buying a small Seattle biotech that specialized in making common-cold vectors, called adenoviruses, to train the immune system. The billionaire had been using those vectors for oncology, but the company had also developed vaccine candidates for H1N1, Lassa fever and other viruses. When the outbreak began, he pivoted.

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Two more biotechs price IPOs, bring­ing to­tal raise to record heights

Atea Pharmaceuticals and SQZ Biotechnologies have priced their public debuts, adding to this year’s record biotech IPO raise — a pot spilling over $13 billion that dwarfs the total raises of the last four years.

Last Friday, Nasdaq head of healthcare listings Jordan Saxe counted 72 biotech and biopharma IPOs this year, together raising $13.2 billion. He pegged a “fair estimate” of 75 debuts and just under $14 billion in proceeds to round out the year.

George Golumbeski (L) and Faheem Hasnain

George Golumbes­ki and Fa­heem Has­nain team up with Ver­tex Ven­tures HC in man­ag­ing $320M of biotech cash

Two longtime biotech veterans are joining a multibillion dollar VC firm in order to help steer its latest fund.

George Golumbeski and Faheem Hasnain have signed on to Vertex Ventures HC as executive advisors, the company announced Thursday, and will assist with their depth of experience in managing $320 million of capital. Both have had previous working relationships with managing partners Carolyn Ng and Lori Hu, which evolved “organically” to get to this point, Ng said.

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Eli Lilly CEO David Ricks (Evan Vucci/AP Images)

A p-val­ue of 0.38? NE­JM re­sults raise new ques­tions for Eli Lil­ly's vaunt­ed Covid an­ti­body

Generally, a p-value of 0.38 means your drug failed and by a fair margin. Depending on the company, the compound and the trial, it might mean the end of the program. It could trigger layoffs.

For Eli Lilly, though, it was part of the key endpoint on a trial that landed them a $1.2 billion deal with the US government to supply up to nearly 1 million Covid-19 antibodies.

So what does one make of that? Was the endpoint not so important, as Lilly maintains? Or did the US government promise a princely sum for a pedestrian drug?

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Noubar Afeyan, Flagship founder and CEO (Victor Boyko/Getty Images)

UP­DAT­ED: Flag­ship launch­es Sen­da Bio­sciences with $88M in back­ing, look­ing to pi­o­neer the field of 'In­ter­sys­tems Bi­ol­o­gy'

Flagship Pioneering has a fresh company out this week, one that aims to lay the groundwork for a whole new discipline.

Senda Biosciences launched Wednesday with $88 million in Flagship cash. The goal? Gain insights into the molecular connections between people and coevolved nonhuman species like plants and bacteria, paving the way for “Intersystems Biology.”

Guillaume Pfefer has been tapped to run the show, a 25-year biotech veteran who comes from GSK after leading the development of the company’s shingles vaccine.

As­traZeneca sells off heart fail­ure and hy­per­ten­sion drugs to Chep­lapharm for $400M

Out with the old and in with the new: AstraZeneca is selling off two heart failure and hypertension drugs to Germany-based Cheplapharm, bagging $400 million and making way for development in other areas.

Cheplapharm paid $200 million for the European rights to Atacand (candesartan cilexetil) and Atacand Plus (candesartan cilexetil and hydrochlorothiazide) back in 2018. They’re now doubling that amount for commercial control in more than 70 countries.

News brief­ing: Ax­o­vant faces months of de­lay on lead Parkin­son's gene ther­a­py; Chi­nese CAR-T biotech nabs $100M

One of Axovant’s top gene therapy prospects for its second act is hitting a roadblock that could push its clinical timelines back by almost a year.

In an update, the biotech said it was informed about delays in CMC data and third-part fill-finish issues around mid-October by its manufacturing partner, Oxford Biomedica. Axovant has been developing a suspension-based process for the Parkinson’s drug; with that taking longer than expected, it now believes “it is unlikely that its planned randomized, sham-controlled trial of AXO-Lenti-PD will enroll patients by the end of calendar year 2021.”