Is tech mon­ey bad for busi­ness? Sil­i­con Val­ley cash makes some bio­phar­ma VCs bris­tle, oth­ers cheer

Bioreg­num
The view from Brit­tany Meil­ing

The emer­gence of new play­ers dab­bling in bio­phar­ma mon­ey has been the sub­ject of gid­dy (and some­times omi­nous) ob­ser­va­tions dur­ing fi­nan­cial boom times. As tech in­vestors, fam­i­ly of­fices, and oth­er rel­a­tive newbs to the space clam­ber to join bio­phar­ma deals, some in the in­dus­try aren’t cer­tain the new­com­ers are good for busi­ness.

The top­ic arose dur­ing a pan­el dis­cus­sion I at­tend­ed last week at Bio­com’s an­nu­al part­ner­ing con­fer­ence in San Diego. The pan­el — about the “fu­ture of ven­ture in­vest­ing” — in­clud­ed speak­ers from Or­biMed, Ven­rock, Lil­ly Ven­tures, Sanofi’s ven­ture arm Sun­rise, and Do­main As­so­ci­ates.

Un­sur­pris­ing­ly, the top­ic of tech in­vestors en­ter­ing bio­phar­ma sur­faced. That’s be­cause tech in­vestors have made a lot of head­lines this past year, in­clud­ing two sto­ries we wrote here at End­points about the 50 most ac­tive biotech VCs in 2017 and the 100 top VCs in the in­dus­try. Both re­ports not­ed the rapid rise of for­mer­ly tech-fo­cused play­ers, in­clud­ing GV (pre­vi­ous­ly Google Ven­tures), which climbed 75 spots in one year on our an­nu­al list rank­ing top VCs.

Camille Samuels

When the mod­er­a­tor not­ed the new in­ter­est of fam­i­ly of­fices and tech in­vestors in bio­phar­ma, Ven­rock part­ner Camille Samuels ex­pressed some skep­ti­cism over whether their emer­gence was a good thing for fundrais­ing star­tups.

“A lot of peo­ple are tak­ing tech mon­ey for their Se­ries A — of­ten at too high of a val­u­a­tion,” Samuels said.

These star­tups of­ten turn to more tra­di­tion­al bio­phar­ma in­vestors by the time they need a Se­ries B round, she said, at which time they’re “in a world of hurt.” No one wants to touch them at such a high val­u­a­tion.

Ac­knowl­edg­ing her opin­ion might be con­tro­ver­sial, she added she’d rather in­vest along­side “these guys” (ges­tur­ing to the more tra­di­tion­al in­vestors sit­ting next to her) than tech in­vestors.

But oth­ers on the pan­el chal­lenged that thought. The fields of tech and bio­phar­ma of­ten merge and min­gle these days, like the re­cent­ly launched Sen­ti Bio­sciences. That com­pa­ny came out of the gate with $53 mil­lion last month, par­tial­ly from tech in­vestors.

“De­sign­ing ge­net­ic cir­cuits… re­quires a lot of en­gi­neer­ing and plat­form-build­ing to build, test and learn,” Sen­ti’s founder Tim­o­thy Lu told End­points. The au­toma­tion and com­pu­ta­tion­al tools need­ed to make it work was the kind of sto­ry that res­onat­ed with tech in­vestors, he said.

Ar­men Shanafelt

“I think it’s great to get tech in­vestors in­volved,” said Ar­men Shanafelt, gen­er­al part­ner at Lil­ly Ven­tures. These new play­ers can bring some­thing to the ta­ble that he and his part­ners can­not — savvy and con­nec­tions in a dif­fer­ent area, he said.

Plus, some star­tups may not have to wor­ry about val­u­a­tions too high for bio­phar­ma VCs. The cur­rent fundrais­ing en­vi­ron­ment gives star­tups lots of oth­er op­tions, said Kim Kam­dar, part­ner at Do­main As­so­ci­ates.

“The pool of cap­i­tal cur­rent­ly avail­able to these com­pa­nies is hard to ig­nore,” Kam­dar said.

Look at Grail, she said. Grail is a high-fly­ing Sil­i­con Val­ley start­up found­ed by San Diego’s Il­lu­mi­na that hauled in a mas­sive $900 mil­lion Se­ries B round last year. The com­pa­ny was backed in part by GV and oth­er big names in San Fran­cis­co tech (Ama­zon, Be­zos Ex­pe­di­tions, Bill Gates, etc). Now, there’s ru­mors the start­up is con­sid­er­ing a $500 mil­lion IPO, list­ing on the Hong Kong pub­lic mar­kets — yet an­oth­er new av­enue of cap­i­tal for biotech up­starts.

Kathy Bowdish

Af­ter the pan­el, I talked the sub­ject over with Sanofi’s Kathy Bowdish, VP of glob­al R&D and head of the VC arm Sun­rise. She said she’s not too wor­ried about new en­trants to the bio­phar­ma in­vest­ing space in­creas­ing com­pe­ti­tion for deals.

“There’s so much great sci­ence out there right now, so you try not to sweat it too much if you miss (a deal),” Bowdish said. “It just doesn’t seem like there’s a short­age of fan­tas­tic sci­ence.”

Il­lus­tra­tion: SHUT­TER­STOCK

At the In­flec­tion Point for the Next Gen­er­a­tion of Can­cer Im­munother­a­py

While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

All about Omi­cron; We need more Covid an­tivi­rals; GSK snags Pfiz­er’s vac­cine ex­ec; Janet Wood­cock’s fu­ture at FDA; 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.

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Usama Malik

Ex-Im­munomedics CFO charged with in­sid­er trad­ing, faces up to 20 years in prison af­ter al­leged­ly tip­ping off girl­friend and rel­a­tives of a PhI­II suc­cess

The former CFO of Immunomedics, who helped steer the company to its $21 billion buyout by Gilead last year, has been charged with insider trading, the Department of Justice announced Thursday.

Usama Malik tipped off his then-girlfriend and four others that a Phase III study for Trodelvy would be stopped early four days before Immunomedics publicly announced the result in April 2020, DoJ alleged in its complaint. The individuals then purchased Immunomedics shares, selling them after the news broke and Immunomedics’ stock price doubled.

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Merck's new antiviral molnupiravir (Quality Stock Arts / Shutterstock)

As Omi­cron spread looms, oral an­tivi­rals ap­pear to be one of the best de­fens­es — now we just need more

After South African scientists reported a new Covid-19 variant — dubbed Omicron by the WHO — scientists became concerned about how effective vaccines and monoclonal antibodies might be against it, which has more than 30 mutations in the spike protein.

“I think it is super worrisome,” Dartmouth professor and Adagio co-founder and CEO Tillman Gerngross told Endpoints News this weekend. Moderna CEO Stéphane Bancel echoed similar concerns, telling the Financial Times that experts warned him, “This is not going to be good.”

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Ab­b­Vie tacks on a new warn­ing to Rin­voq la­bel as safe­ty frets crimp JAK class

The safety problems that continue to plague the JAK class as new data highlight some severe side effects are casting a large shadow over AbbVie’s Rinvoq.

As a result of a recent readout highlighting major adverse cardiac events (MACE), malignancy, mortality and thrombosis with Xeljanz a couple of months ago, AbbVie put out a notice late Friday afternoon that it is adding the new class risks to its label for their rival drug.

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Biospec­i­men M&A: Dis­cov­ery ac­quires Al­bert Li's he­pa­to­cyte project; PhI­II tri­al on Bay­er's Nube­qa reached pri­ma­ry end­point

Discovery Life Sciences has acquired what claims to be the Maryland-based host of the world’s largest hepatocyte inventory, known as IVAL, to help researchers select more effective and safer drug candidates in the future.

The combined companies will now serve a wider range of drug research and development scientists, according to Albert Li, who founded IVAL in 2004 and is set to join the Discovery leadership team as the CSO of pharmacology and toxicology.

Pfiz­er, Am­gen and Janssen seek fur­ther clar­i­ty on FDA's new ben­e­fit-risk guid­ance

Three top biopharma companies are seeking more details from the FDA on how the agency conducts its benefit-risk assessments for new drugs and biologics.

While Pfizer, Amgen and Janssen praised the agency for further spelling out its thinking on the subject in a new draft guidance, including a discussion of patient experience data as part of the assessment, the companies said the FDA could’ve included more specifics in the 20-page draft document.

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Re­searchers move clos­er to de­ci­pher­ing blood clots from As­traZeneca, J&J's Covid-19 vac­cines

Researchers may be nearing an answer for the mysterious and life-threatening blood clots that appeared on very rare occasions in people who received the J&J or AstraZeneca Covid-19 vaccine.

The new work builds on an early hypothesis researchers in Norway put forward last spring, when the cases first cropped up. They proposed the events were similar to blood clots that can occur in a small subset of patients who receive heparin, one of the most commonly used blood thinners.

Janet Woodcock (AP Images)

Janet Wood­cock plots her fu­ture at FDA, with se­nior ad­vi­sor role to fall back on if Califf wins con­fir­ma­tion

Acting FDA commissioner Janet Woodcock has been the face of just about every drug approval decision at the agency since the turn of the century. Since the pandemic began, she’s moved between the top of the drugs center to the head of therapeutics at Operation Warp Speed, leading the drive for work on Covid-targeted mAbs and antivirals.

Looking forward — and pending a quick Senate confirmation to cement Rob Califf’s return to the top of FDA early next year — Woodcock’s role at the agency will again be in flux.

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