The End­points 100 CEO Sur­vey: Ex­ecs of­fer a big thumbs up for Got­tlieb and some sug­ges­tions for mak­ing the FDA a bet­ter agency

Scott Got­tlieb, Com­mis­sion­er of Food and Drugs, ap­pears be­fore a US Sen­ate sub­com­mit­tee to re­view the FDA’s 2018 bud­get re­quest on Tues­day, June 20, 2017

AP Im­ages / End­points News


About the worst thing that any­body in our biotech ex­ec­u­tive sur­vey group has to say about FDA Com­mis­sion­er Scott Got­tlieb right now is that it’s still ear­ly in the game for him and they’re wait­ing to see how things de­vel­op be­fore they of­fer a firm opin­ion.

Af­ter that, it’s all good.

“Look­ing across the range of ad­min­is­tra­tion nom­i­nees, I’d say FDA did ex­cep­tion­al­ly well,” writes Jeff Jonker, pres­i­dent of NGM Bio­phar­ma­ceu­ti­cals, in a note that res­onat­ed through­out the re­spons­es we col­lect­ed. “To his cred­it, Dr. Got­tlieb seems ac­tive­ly com­mit­ted to the mis­sion of the agency.”

Al­to­geth­er 74 of 88 ex­ecs in our End­points sur­vey group — 84% — gave Got­tlieb their thumbs up. The rest are stick­ing to the side­lines with a neu­tral po­si­tion — for now.

There were 0 votes crit­i­ciz­ing the pick.

The re­spons­es for our most re­cent check­up on the biotech pulse range from an ap­pre­ci­a­tion of Got­tlieb’s pro­fes­sion­al ex­pe­ri­ence to his will­ing­ness to try new things to im­prove reg­u­la­to­ry over­sight of the drug de­vel­op­ment process. And for a group of ex­ecs who are, by and large, up­set and dis­ap­prov­ing of his boss — Pres­i­dent Don­ald Trump — Got­tlieb is quick to win ku­dos for his ap­pre­ci­a­tion of sci­ence and an in­sid­er’s un­der­stand­ing of how the agency works.

Says one: “Got­tlieb is one of the few mem­bers of this ad­min­is­tra­tion that ap­pears to un­der­stand and ap­pre­ci­ate sci­ence.”

There’s al­so a clear echo from an ear­li­er de­bate over who should run the FDA, as biotech ex­ecs gen­er­al­ly heaped abuse on Jim O’Neill and his no­tion that the ef­fi­ca­cy bar should lie on the ground. You could see that in one as­sess­ment — “ex­pe­ri­enced adult” — of Got­tlieb’s strengths.

The De­moc­rats’ ma­jor ob­jec­tion to Got­tlieb that his pre­vi­ous work as an in­vestor and con­sul­tant in the field left him hope­less­ly con­flict­ed is clear­ly not shared by biotech ex­ecs — of both po­lit­i­cal per­sua­sions.

Got­tlieb’s ear­ly pop­u­lar­i­ty is just one of sev­er­al is­sues we cov­ered in our lat­est in­dus­try sur­vey. By and large this group of ex­ecs is up­beat about the fu­ture of the busi­ness and their com­pa­nies, look­ing to make more hires in an era of fair­ly ready ac­cess to cap­i­tal. The lack of M&A so far this year, though, has some grow­ing con­cerns about val­u­a­tions, pric­ing re­mains a big is­sue with no easy so­lu­tions, and while Got­tlieb is draw­ing pos­i­tive re­views, there are al­so a num­ber of sug­ges­tions on how the FDA could do bet­ter.

Want a bet­ter FDA? Hire ex­cel­lent staffers. Lots of them

Got­tlieb clear­ly has a man­date from the pres­i­dent to im­prove the FDA and find a bet­ter way to hur­ry along the reg­u­la­to­ry process, in all ar­eas out­side of on­col­o­gy, which is wide­ly viewed by the in­dus­try — and Got­tlieb — as the mod­el for all oth­er di­vi­sions in the agency. So we asked the mem­bers of the E100 what they would do dif­fer­ent­ly at the FDA, and what they would be sure to leave un­mo­lest­ed.

Arie Bellde­grun

Staffing is clear­ly an is­sue for a num­ber of the ex­ecs who com­plet­ed the sur­vey. The FDA is un­der­staffed in key ar­eas, and most want to see gener­ics pushed through faster. Biotech ex­ecs want more reg­u­la­tors, and they want bet­ter staff with more ex­per­tise in their field.

That top­ic came up re­peat­ed­ly, in dif­fer­ent ways.

Arie Bellde­grun, the CEO of Kite, now in the last leg of its reg­u­la­to­ry re­view for a ground­break­ing CAR-T treat­ment, says it would be best to leave the re­view process alone. Pos­i­tive change, he adds, will come from ex­pe­ri­enced, high­ly mo­ti­vat­ed staffers at the FDA. And he sug­gests tak­ing a leaf from the new Chi­nese play­book.

Bellde­grun:

Fight for more ex­pe­ri­enced and high qual­i­ty man­pow­er to do the work and com­plete it in a time­ly man­ner. Keep your ex­am­in­ers sat­is­fied and feel­ing ac­com­plished. Learn from the Chi­nese FDA and CDE!! What a change there!! I have just re­turned from a very im­pres­sive vis­it and meet­ings with the leg­is­la­tors and ex­am­in­ers in Bei­jing. They are ex­cit­ed, en­gaged, full of en­er­gy, and have sig­nif­i­cant­ly ex­pand­ed their pro­fes­sion­al work­force. No com­plaints on be­ing short of staff or lack of great can­di­dates ( many of them trained in the US!). High­ly rec­om­mend a vis­it with them AS­AP.

There were sev­er­al bit­ing re­marks about the eteplirsen con­tro­ver­sy, with lin­ger­ing anger ev­i­dent that the agency chose to make an ex­cep­tion for Sarep­ta and its Duchenne drug. How­ev­er, it was al­so clear that there’s plen­ty of sup­port for re­spon­si­ble use of bio­mark­ers and sur­ro­gate end­points in com­ing up with faster ap­provals for many kinds of drugs, in­clud­ing those head­ed to the rare dis­ease field.

Nan­cy Si­mon­ian

Nan­cy Si­mon­ian, the CEO at Sy­ros Phar­ma­ceu­ti­cals, had this to say:

Keep the fo­cus on mov­ing in­no­v­a­tive prod­ucts swift­ly for­ward for dis­eases with high un­met need. Pro­vide more con­sis­tent guid­ance on bio­mark­er dri­ven strate­gies. Pro­mote ear­li­er ex­plo­ration of com­bi­na­tions and adap­tive tri­al de­signs to al­low more ef­fi­cient de­vel­op­ment. En­hance the per­spec­tive of the pa­tient in de­ci­sions on what con­sti­tutes clin­i­cal ben­e­fit and risk/re­ward.

From re­view­ing the sur­vey and mod­er­at­ing a re­cent con­ver­sa­tion on FDA re­form in Cam­bridge, MA, I’ll em­pha­size that there’s con­sid­er­able sup­port for mak­ing cer­tain that pa­tient per­spec­tives are re­spon­si­bly in­clud­ed in the re­view process, in­clud­ing a big­ger fo­cus on pa­tient re­port­ed out­comes in clin­i­cal tri­als.

Al­so, biotech R&D is in­creas­ing­ly less and less like­ly to be neat­ly di­vid­ed along the di­vi­sion­al bound­aries in­side the agency. That is caus­ing some added frus­tra­tion. Here’s one CEO, anony­mous­ly:

Change the di­vi­sion­al frame­work. It is an old fash­ioned way to di­vide a world that is in­creas­ing­ly mol­e­c­u­lar.

And don’t for­get about doc­tors and pa­tients, urges sci­en­tist and biotech in­vestor/en­tre­pre­neur Greg Ver­dine.

Em­pha­size the ed­u­ca­tion­al mis­sion of the FDA to help pa­tients and pre­scribers nav­i­gate the risk/ben­e­fit equa­tion for drugs.

We al­so asked CEOs about pub­lish­ing CRLs and found some sol­id back­ing for that.

Self re­straint on drug prices? It’s not enough

To be sure, there are some peo­ple in the in­dus­try who like the idea that com­pa­nies can rein in drug prices to help lance the boil on this is­sue. Up un­til a few days ago, the gen­er­al con­sen­sus was that the Trump ad­min­is­tra­tion would try some­thing de­fin­i­tive to slash drug prices. That is less and less like­ly, if the re­port­ing from Wash­ing­ton DC is ac­cu­rate. But self dis­ci­pline on pric­ing won’t be enough, ac­cord­ing to 63% of the sur­vey group.

“In­sin­cere,” re­marked one. You mean a cap of 10%? asks an­oth­er. That’s still way above in­fla­tion, say some. And the gen­er­al pub­lic won’t buy it now in any case, es­pe­cial­ly as long as a few price gougers ru­in pub­lic opin­ion about bio­phar­ma.

“The pub­lic’s per­cep­tion is now so neg­a­tive that more will be need­ed to turn it around. A few re­main­ing rot­ten ap­ples are enough to sour it for the rest.”

“I think it is a piece of the puz­zle, but on its own a com­mit­ment with­out demon­stra­ble change and ac­tion will not fun­da­men­tal­ly change the per­cep­tion. Need to keep the in­no­va­tion up and mak­ing drugs that have a big im­pact on pa­tients’ lives.”

Sev­er­al not­ed that the is­sue isn’t about drug pric­ing per se, but more about the stiff out-of-pock­et charges that are be­ing levied. As long as that re­mains in is­sue, man­u­fac­tur­ers can cut prices all they want with­out re­solv­ing the is­sue.

Sus­tain­able pric­ing? Hm­m­mm…

A sol­id ma­jor­i­ty of 60% be­lieve that the pric­ing on new drugs this year is sus­tain­able for all con­cerned. But a sig­nif­i­cant mi­nor­i­ty — 22% — said no.


Ac­cess to cap­i­tal

Close to 80% of our group in the E100 are bull­ish about ac­cess to cap­i­tal, with many rank­ing it good or ex­cel­lent.

“As an IO com­pa­ny with pos­i­tive hu­man da­ta, I feel I can get all the cap­i­tal I want.”

Oth­ers ex­pressed en­thu­si­asm about non-tra­di­tion­al cap­i­tal mak­ing it in­to the mar­ket, and sev­er­al re­marked that in this day and age in biotech, good com­pa­nies with good ideas have good ac­cess to cash.

But sev­er­al sound­ed a note of cau­tion. VCs ap­pear to be in­creas­ing­ly in­ter­est­ed on­ly in in­cu­bat­ing their own com­pa­nies, said a few, not look­ing out­side the ranks to in­vest in biotechs with lots of po­ten­tial.

And God help you if the da­ta sour — in­vestors ap­pear to be in­creas­ing­ly harsh in the face of a set­back, say some.


IPOs: Not bad, but not 2014

The biotech IPO mar­ket, which be­gan to show some fresh signs of live­li­ness af­ter the sur­vey went out, drew def­i­nite skep­ti­cism. 70% said the IPO mar­ket was av­er­age or on­ly fair. On­ly one in four thought it was good.

And there isn’t much be­lief that things will get much bet­ter in the short term, ac­cord­ing to 65%. The big boom of 2014 is def­i­nite­ly dead, said sev­er­al ex­ecs. And it’s not com­ing back soon.

Af­ter all, say some, gen­er­al­ist in­vestors are out of biotech and there are lots of fac­tors be­yond the con­trol of biotech that dic­tate in­vest­ment trends.

“The IPO mar­ket seems to be sup­port­ing high-qual­i­ty com­pa­nies, but I don’t see a re­turn to the 2014/2015 mar­ket.”

It will go up, Arc­turus CEO Joseph Payne writes: “The volatil­i­ty in­dex (VIX) has been con­sis­tent­ly sta­ble for the last 6 months (post elec­tion). This has been the my pre­ferred da­ta source as a pre­dic­tor of bub­bles pop­ping. In oth­er words, IPOs will be “the same” or “go up” as long as the VIX stays un­der 15.”

As I write this, the biotech sec­tor is ex­pe­ri­enc­ing a spike, and we’ll see how sus­tain­able it is by the time we ask this ques­tion again.


Hir­ing: Heck yes. But good tal­ent is hard to find

A big yes here. From the be­gin­ning of this sur­vey, which is now get­ting close to a year ago, these ex­ecs were in a hir­ing mode. In the lat­est round, 83% said they were adding staff in the sec­ond quar­ter; 86% will be adding staff lat­er in the year. No one is re­duc­ing staff. And that fits in with over­all in­dus­try pat­terns, where adding staff is now the name of the game.

“Both of the com­pa­nies I am build­ing are hir­ing ag­gres­sive­ly,” says one.

Brex­it, Schmex­it: “Good glob­al hir­ing in UK with no im­pact from Brex­it un­cer­tain­ties to date.”

“Mar­ket for tal­ent is get­ting very tight in San Fran­cis­co.”

“We’re hir­ing ag­gres­sive­ly but find­ing the right peo­ple is a chal­lenge with the sup­ply not keep­ing any­where near the de­mand,” notes Yu­val Co­hen.


Deal Watch: Show me the mon­ey

Talk to the av­er­age Big Phar­ma ex­ec, and you’ll get an ear­ful about how ex­pen­sive biotech val­u­a­tions are these days. Ask a biotech ex­ec, though, and things are just so-so.

More than half of the ex­ecs say that val­u­a­tions are on­ly av­er­age.

Why is that? De­spite big deals for Acte­lion and an ear­ly Ari­ad buy­out, M&A in biotech is in the slow lane. Tax re­form is still hangin­gin lim­bo and de­spite all the promis­es, we’re not see­ing any­thing like the ac­tiv­i­ty an­tic­i­pat­ed in 2017.

Right now it’s a case of “show me the mon­ey.” Once the deals and dol­lars (or eu­ros) flow, they’ll be ready to be­lieve again. In the mean­time, they’re on the side­lines with all the deal­mak­ers.


This is the third End­points 100 ex­ec­u­tive sur­vey. Pre­vi­ous sur­vey re­sults are avail­able here, and here. The End­points 100 is an in­vite-on­ly group of bio­phar­ma chief ex­ec­u­tives, polled once-a-quar­ter. 

Part club, part guide, part land­lord: Arie Bellde­grun is blue­print­ing a string of be­spoke biotech com­plex­es in glob­al boom­towns — start­ing with Boston

The biotech industry is getting a landlord, unlike anything it’s ever known before.

Inspired by his recent experiences scrounging for space in Boston and the Bay Area, master biotech builder, investor, and global dealmaker Arie Belldegrun has organized a new venture to build a new, 250,000 square foot biopharma building in Boston’s Seaport district — home to Vertex and a number of up-and-coming biotech players.

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Novotech CRO Ex­pands Chi­na Team as Biotech De­mand for Clin­i­cal Tri­als In­creas­es up to 79%

An increase in demand of up to 79% for clinical trials in China has prompted Novotech the Asia-Pacific CRO to rapidly expand the China team, appointing expert local clinical executives to their Shanghai and Hong Kong offices. The company is planning to expand their team by 30% over the next quarter.

Novotech China has seen considerable demand recently which is borne out by research from GlobalData:
A global migration of clinical research is occurring from high-income countries to low and middle-income countries with emerging economies. Over the period 2017 to 2018, for example, the number of clinical trial sites opened by biotech companies in Asia-Pacific increased by 35% compared to 8% in the rest of the world, with growth as high as 79% in China.
Novotech CEO Dr John Moller said China offers the largest population in the world, rapid economic growth, and an increasing willingness by government to invest in research and development.
Novotech’s 23 years of experience working in the region means we are the ideal CRO partner for USA biotechs wanting to tap the research expertise and opportunities that China offers.
There are over 22,000 active investigators in Greater China, with about 5,000 investigators with experience on at least 3 studies (source GlobalData).

H1 analy­sis: The high-stakes ta­ble in the biotech deals casi­no is pay­ing out some record-set­ting win­nings

For years the big trend among dealmakers at the major players has been centered on ratcheting down upfront payments in favor of bigger milestones. Better known as biobucks for some. But with the top 15 companies competing for the kind of “transformative” pacts that can whip up some excitement on Wall Street, with some big biotechs like Regeneron now weighing in as well, cash is king at the high stakes table.

We asked Chris Dokomajilar, the head of DealForma, to crunch the numbers for us, looking over the top 20 deals for the past decade and breaking it all down into the top alliances already created in 2019. Gilead has clearly tipped the scales in terms of the coin of the bio-realm, with its record-setting $5 billion upfront to tie up to Galapagos’ entire pipeline.

Dokomajilar notes:

We’re going to need a ‘three comma club’ for the deals with over $1 billion in total upfront cash and equity. The $100 million-plus club is getting crowded at 164 deals in the last decade with new deals being added towards the top of the chart. 2019 already has 14 deals with at least $100 million in upfront cash and equity for a total year-to-date of over $9 billion. That beats last year’s $8 billion and sets a record.

Add upfronts and equity payments and you get $11.5 billion for the year, just shy of last year’s record-setting $11.8 billion.

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UP­DAT­ED: With loom­ing ‘apoc­a­lypse of drug re­sis­tance,’ Mer­ck’s com­bi­na­tion an­tibi­ot­ic scores FDA ap­proval on two fronts

Merck — one of the last large biopharmaceuticals companies in the beleaguered field of antibiotic drug development — on Wednesday said the FDA had sanctioned the approval of its combination antibacterial for the treatment of complicated urinary tract and intra-abdominal infections.

To curb the rise of drug-resistant bacteria and maintain the efficacy of the therapy, Recarbrio (and other antibacterials) — the drug must be used to treat or prevent infections that are proven or strongly suspected to be caused by susceptible gram-negative bacteria, Merck $MRK said.

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John McHutchison in 2012. Getty Images

The $1.1M good­bye: Gilead CSO John McHutchi­son is out as Daniel O’Day shakes up the se­nior team

Just a little more than a year after John McHutchison grabbed a promotion to become CSO at Gilead in the wake of Norbert Bischofberger’s exit, he’s out amid a shakeup of the senior team that is also triggering the departure of two other top execs.

Gilead stated that McHutchison “has decided to step down” from the job as of August 2nd. And their SEC filing notes that he’ll be getting a $1.1 million check to settle up on his contract.

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Thomas Gajewski, David Steinberg. (CRI, Pyxis)

Bay­er, Long­wood back star re­searcher's deep dive in­to the tu­mor mi­croen­vi­ron­ment for new I/O tar­gets

From PD-1 targeting to the RAS pathway to the STING complex, Thomas Gajewski has spent the past two decades of his career decoding the various ways the immune system can be unleashed to defend against cancer. So when the University of Chicago professor comes around to putting all his findings into a new platform for finding new targets, VCs and pharma groups alike pay attention.

“He’s been studying T cells for 20 years, plus he’s one of the world’s leaders if not the world leader in the space,” David Steinberg, partner at Longwood Fund, said. “Furthermore, let me add he did a lot of the foundational research and also some of the seminal clinical trials in the existing set of I/O agents. He understands the space really well, he understands the current strengths, and I think he understood really well what was missing, so he knew where to look.”

Kamala Harris speaking yesterday at the Des Moines Register Iowa Presidential Candidate Forum [via Getty]

Who’s the tough­est on drug prices? A game of po­lit­i­cal one-up­man­ship is dri­ving the pol­i­cy de­bate in Wash­ing­ton

Earlier this week we got a look at Senator Kamala Harris’ position on drug prices. She’s proposing that HHS take an average price from single-payer systems like the UK, Germany and Canada — which leverage market access for lower prices — and use that to set the US price. Anything drug companies collect above that would be taxed at a rate of 100%.

And the rhetoric is scathing:
While families struggle to make it to the end of the month, pharmaceutical companies are turning record profits. They’re spending nearly as much on advertising as R&D. They’re manipulating their market power to hike prices on lifesaving generic drugs. They’re making twice the profit of the average industry in America and still increased drug prices by 10.5% over the past six months alone. Meanwhile, they are charging dramatically higher prices to American consumers.
That’s an escalation on Joe Biden’s plan, which includes drug importation from those cheaper markets as well as allowing Medicare to negotiate prices — something that virtually all Dems agree on now.

SJ Lee [File photo]

Go­ing in­side cells, Sung Joo Lee has sketched some big goals for his small — but glob­al — team of drug hunters

For a small biotech based in South Korea with a research arm in Cambridge, MA, Orum Therapeutics has sketched out some big goals aimed at developing antibodies for intracellular targets. And now they have a new $30 million round to push the work forward, aiming at a slate of currently undruggable quests.

Orum has been working on a platform tech out of Ajou University that relies on endocytosis to smuggle antibodies and their cargo inside a cell. They’ve published work in Nature that illustrates its preclinical potential in RAS mutations, and KRAS is on their list of targets. 

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Astel­las buys in­to Fre­quen­cy's re­gen­er­a­tive med strat­e­gy with a $625M al­liance on hear­ing loss

The executive team at Frequency Therapeutics never oversold the results of their maiden Phase I/II study for a new drug to rectify hearing loss. It was, they said back in April, primarily about safety and tolerability, where their drug FX-322 performed as they had hoped. 

That early glimpse of efficacy everyone searches for in their first try on humans? 

(I)mprovements in hearing function, including audiometry and word scores, were observed in multiple FX-322 treated patients.

We don’t know exactly what that means. But whatever the details, Astellas found enough in the data to jump in with a sizable collaboration deal.

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