SEC opens in­quiry in­to Wall Street's SPAC ma­nia — re­port; A Chi­na-based gene ther­a­py play­er now has $80M more in the bank

The SPAC ma­nia has in­ten­si­fied not just in biotech but through­out the mar­ket. And it’s caught so much fire that now the SEC has re­port­ed­ly opened an in­quiry in­to the mat­ter.

US reg­u­la­tors have reached out to Wall Street banks for in­for­ma­tion on how they’re man­ag­ing the risks in­volved in the blank check merg­ers, four sources told Reuters. The re­quests have not risen to the lev­el of a for­mal de­mand just yet, but have asked that the banks vol­un­tar­i­ly pro­vide the in­for­ma­tion.

The pos­si­bil­i­ty of a for­mal in­ves­ti­ga­tion re­mains on the ta­ble, Reuters re­port­ed. In their re­quests, the SEC is look­ing for a va­ri­ety of in­fo rang­ing from SPAC deal fees, vol­umes and how the banks are polic­ing the deals in­ter­nal­ly, to com­pli­ance and re­port­ing.

SPACs have trig­gered what’s be­come a gold rush on Wall Street, with $170 bil­lion poured in­to the hold­ing com­pa­nies so far this year. That’s al­ready eclipsed the fig­ure from all of 2020, Reuters re­port­ed, which hit $157 bil­lion.

Ear­li­er this month, the SEC warned in­vestors of jump­ing aboard SPACs based on celebri­ty en­dorse­ments. For­mer pro­fes­sion­al ath­letes Shaquille O’Neal and Alex Ro­driguez, who have on­ly ex­pand­ed their in­flu­ence in re­tire­ment, each joined SPAC syn­di­cates in Feb­ru­ary.

And ear­li­er this week, the much-ma­ligned of­fice space start­up We­Work an­nounced its in­ten­tions to go pub­lic through a SPAC. It’s seek­ing a $9 bil­lion val­u­a­tion de­spite hav­ing re­port­ed loss­es of $3.5 bil­lion in 2019 and $3.2 bil­lion in 2020. The move comes a few years af­ter We­Work’s failed IPO.

For biotech in 2021, the SPAC train has on­ly brought in more mon­ey with a myr­i­ad of in­vestors try­ing to cap­i­tal­ize. There was the high-pro­file Richard Bran­son SPAC that merged with 23andMe in Feb­ru­ary, and Fore­site and Per­cep­tive, among oth­ers, have launched new blank check com­pa­nies in re­cent months. — Max Gel­man

A Chi­na-based gene ther­a­py play­er now has $80M more in the bank

There’s no short­age of play­ers in pur­suit of an off-the-shelf gene ther­a­py. Now, a Nan­jing, Chi­na-based biotech has $80 mil­lion more to work with.

Bio­heng Biotech took the wraps off a Se­ries B round on Wednes­day, co-led by GL Ven­tures, Decheng Cap­i­tal and Oc­ta­gon Cap­i­tal. BlueRun Ven­tures Chi­na and Shen­zhen Cap­i­tal Group Com­pa­ny al­so chipped in.

The pro­ceeds will go straight in­to R&D and process de­vel­op­ment, ac­cord­ing to the com­pa­ny which was found­ed in 2017.

“Bio­heng fo­cus­es on the de­vel­op­ment of al­lo­gene­ic im­muno-cell ther­a­py. At present, we have made progress in sev­er­al in­di­ca­tions with promis­ing clin­i­cal da­ta,” founder and CEO He Xi­ao­hong said in a state­ment, with­out nam­ing the in­di­ca­tions. “We are look­ing for­ward to pro­vid­ing more af­ford­able ‘off-the-shelf’ im­muno- cell ther­a­pies to pa­tients soon. ” — Nicole De­Feud­is 

Sleep ap­nea play­er Ap­n­iMed takes home $25 mil­lion in fi­nanc­ing to chase PhI­II study

Cam­bridge, MA-based Ap­n­imed has closed a $25 mil­lion Se­ries B round as it gears up for two Phase II read­outs of its oral can­di­date for sleep ap­nea, the biotech said Thurs­day.

The round was led by ex­ist­ing in­vestor Morn­ing­side Ven­tures and joined by Selig­man In­vest­ments and Tao Cap­i­tal Part­ners.

Ap­n­imed’s lead com­pound, AD109, is a com­bi­na­tion of a se­lec­tive nor­ep­i­neph­rine re­up­take in­hibitor and an an­timus­carinic, a nov­el chem­i­cal, the biotech said.

The com­pa­ny is cur­rent­ly run­ning two Phase II stud­ies in ob­struc­tive sleep ap­nea that are ex­pect­ed to read out in Q2 2021. Ap­n­iMed plans to use the pro­ceeds to set up a Phase III piv­otal study for the drug and be­gin build­ing its com­mer­cial in­fra­struc­ture, ac­cord­ing to a state­ment. — Kyle Blanken­ship

Qual­i­ty Con­trol in Cell and Gene Ther­a­py – What’s Re­al­ly at Stake?

In early 2021, Bluebird Bio was forced to suspend clinical trials of its gene therapy for sickle cell disease after two patients in the trial developed cancer. As company scientists rushed to assess whether there was any causal link between the therapy and the cancer cases, Bluebird’s stock value plummeted – as did those of multiple other biopharma companies developing similar therapies.

While investigations concluded that the gene therapy was unlikely to have caused cancer, investors and the public may be more skittish regarding the safety of gene and cell therapies after this episode. This recent example highlights how delicate the fields of cell and gene therapy remain today, even as they show great promise.

Law pro­fes­sors call for FDA to dis­close all safe­ty and ef­fi­ca­cy da­ta for drugs

Back in early 2018 when Scott Gottlieb led the FDA, there was a moment when the agency seemed poised to release redacted complete response letters and other previously undisclosed data. But that initiative never gained steam.

Now, a growing chorus of researchers are finding that a dearth of public data on clinical trials and pharmaceuticals means industry and the FDA cannot be held accountable, two law professors from Yale and New York University write in an article published Wednesday in the California Law Review.

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Novavax CEO Stanley Erck at the White House in 2020 (Andrew Harnik, AP Images)

As fears mount over J&J and As­traZeneca, No­vavax en­ters a shaky spot­light

As concerns rise around the J&J and AstraZeneca vaccines, global attention is increasingly turning to the little, 33-year-old, productless, bankruptcy-flirting biotech that could: Novavax.

In the now 16-month race to develop and deploy Covid-19 vaccines, Novavax has at times seemed like the pandemic’s most unsuspecting frontrunner and at times like an overhyped also-ran. Although they started the pandemic with only enough cash to last 6 months, they leveraged old connections and believers into $2 billion and emerged last summer with data experts said surpassed Pfizer and Moderna. They unveiled plans to quickly scale to 2 billion doses. Then they couldn’t even make enough material to run their US trial and watched four other companies beat them to the finish line.

FDA of­fers scathing re­view of Emer­gent plan­t's san­i­tary con­di­tions, em­ploy­ee train­ing af­ter halt­ing pro­duc­tion

The FDA wrapped up its inspection of Emergent’s troubled vaccine manufacturing plant in Baltimore on Tuesday, after halting production there on Monday. By Wednesday morning, the agency already released a series of scathing observations on the cross contamination, sanitary issues and lack of staff training that caused the contract manufacturer to dispose of millions of AstraZeneca and J&J vaccine doses.

Brad Bolzon (Versant)

Ver­sant pulls the wraps off of near­ly $1B in 3 new funds out to build the next fleet of biotech star­tups. And this new gen­er­a­tion is built for speed

Brad Bolzon has an apology to offer by way of introducing a set of 3 new funds that together pack a $950 million wallop in new biotech creation and growth.

“I want to apologize,” says the Versant chairman and managing partner, laughing a little in the intro, “that we don’t have anything fancy or flashy to tell you about our new fund. Same team, around the same amount of capital, same investment strategy. If it ain’t broke, don’t fix it.”

But then there’s the flip side, where everything has changed. Or at least speeded into a relative blur. Here’s Bolzon:

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Sen. Patty Murray (D-WA) (Graeme Sloan/Sipa USA/Sipa via AP Images)

Sen­a­tors to NIH: Do more to pro­tect US bio­med­ical re­search from for­eign in­flu­ence

Although Thursday’s Senate health committee hearing was focused on how foreign countries and adversaries might be trying to steal or negatively influence biomedical research in the US, the only country mentioned by the senators and expert witnesses was China.

Committee chair Patty Murray (D-WA) made clear in her opening remarks that the US cannot “let the few instances of bad actors” overshadow the hard work of the many immigrant researchers in the US, many of which have won Nobel prizes for their work. But she also said, “There is more the NIH can be doing here.”

LLS backs 5 new can­cer drug projects with up to $50M; Trodelvy con­tin­ues to im­press with more TNBC da­ta

The Leukemia and Lymphoma Society has tapped 5 new early-stage projects to back with up to $10 million each in fresh investments. The 5 biotechs are:

— Caribou, headed by Rachel Haurwitz and co-founded by Jennifer Doudna, is working on next-gen, off-the-shelf CAR-Ts to replace the patient-derived cells now in use.

— The LLS supported NexImmune’s IPO, helping fund its work on nanoparticles that can gin up an immune response directed at cancer cells. The biotech has 2 projects now in Phase I trials.

Jenny Rooke (Genoa Ventures)

Ear­ly Zymer­gen in­vestor Jen­ny Rooke re­flects on 'chimeras' in biotech, what it takes to spot a $500M gem

When Jenny Rooke first heard of Zymergen back in 2014, she knew she was looking at something different and exciting. The Emeryville, CA biotech held the promise of blending biology and technology to solve a huge unmet need for cost-effective chemicals — of all things — and a stellar founding team to boot.

But back then, West Coast venture capitalists didn’t see in Zymergen the one thing they were looking for in a winning biotech: therapeutic potential. Rooke, however, saw an opportunity and made her bets. Seven years later, that bet is paying off in a big way.

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Saurabh Saha at Endpoints News' #BIO19

On the heels of $250M launch, Centes­sa barges ahead with an IPO to fu­el its 10-in-1 Medicxi pipeline

Francesco De Rubertis made no secret of IPO plans for Centessa, his 10-in-1 legacy play. Barely two months later, the S-1 is in.

The hot-off-the-press filing depicts the same grand vision that the longtime VC touted when he did the rounds in February: Take the asset-centric mindset that he’s been preaching at Medicxi over the years, and roll up a bunch of biotech upstarts, with unrelated risk profiles, into 1 pharma company that can carry on the development at scale.