The fore­cast for biotech IPOs in 2017? Not near­ly as hot as the in­dus­try would like

 

Last year on­ly 28 bio­phar­ma com­pa­nies man­aged to com­plete an IPO in the US, the worst record since the bad old days of 2012. And the smart mon­ey at Sil­i­con Val­ley Bank says you can ex­pect a re­peat, or maybe some­thing just slight­ly bet­ter, in the year ahead.

In oth­er words, if you had to sum­ma­rize SVB’s IPO pro­jec­tion for 2017, a shaky thumbs-up is about the best you’re go­ing to get. The con­ga line of 2014 and 2015 has dis­solved and shows no signs of re­form­ing any­time soon.

SVB called last year’s IPO num­ber in ad­vance, and with pub­lic biotechs still floun­der­ing in an un­for­giv­ing en­vi­ron­ment for risk, you’re not go­ing to get much of an ar­gu­ment from any oth­er an­a­lysts that they’re be­ing over­ly cau­tious.

For those of you mak­ing the trek to San Fran­cis­co this week for JP Mor­gan, you can ex­pect to hear plen­ty more about this top­ic. But even as the mood tends to run on the op­ti­mistic side in San Fran­cis­co, re­al­i­ty is not be­ing ig­nored.

SVB’s team, led by Jon Nor­ris, did get one thing wrong in its 2016 fore­cast. The num­ber of M&A deals in the sec­tor shrunk to 17 in 2016 — miss­ing a fore­cast for a surge that was al­so wide­ly shared among an­a­lysts. This year, says SVB, look for 18 to 22 M&A ex­its, with half re­served for ear­ly-stage com­pa­nies, where most of the in­vest­ment ac­tion is these days.

Last year we saw a big run of Se­ries A in­vest­ments, where you’ll con­tin­ue to see plen­ty of em­pha­sis this year. One caveat, though: Crossovers, which have been back­ing off as the IPO wave dwin­dled to kid­die pool size, may start shift­ing their cash to back up their com­pa­nies as they get in­to B rounds.

Biotech in­vestors and CEOs see two paths to growth, but are they equal­ly vi­able?

The dynamic in the biotech market has been highly volatile in the last few years, from the high peaks immediately after the COVID vaccine in 2021, to the lowest downturns of the last 20 years in 2022. This uncertainty makes calling the exact timing of the market’s turn something of a fool’s errand, according to Dr. Chen Yu, Founder and Managing Partner of TCG Crossover (TCG X). He speaks with RBC’s Noël Brown, Head of US Biotechnology Investment Banking, about the market’s road ahead and two possible paths for growth.

In AstraZeneca's latest campaign, wild eosinophils called Phils personify the acting up often seen in uncontrolled asthma

As­traZeneca de­buts an­noy­ing pur­ple ‘Phil’ crea­tures, per­son­i­fied asth­ma eosinophils ‘be­hav­ing bad­ly’

There are some odd-looking purple creatures lurking around the halls of AstraZenca lately. The “Phil” character cutouts are purple, personified eosinophils with big buggy eyes and wide mouths, and they’re a part of AZ’s newest awareness effort to help people understand eosinophilic asthma.

The “Asthma Behaving Badly” characters aren’t only on the walls at AZ to show the new campaign to employees, however. The “Phils” are also showing up online on the campaign website, and in digital and social ads and posts on Facebook and Instagram.

Casey McPherson shows his daughters Rose (left) and Weston around Everlum Bio, a lab that he co-founded to spark a treatment for Rose and others with ultra-rare conditions. (Ilana Panich-Linsman)

Fa­ther starts lab af­ter in­tel­lec­tu­al prop­er­ty is­sues stymie rare dis­ease drug de­vel­op­ment

Under bright lab lights, Casey McPherson holds his 6-year-old daughter, Rose. His free hand directs Rose’s gaze toward a computer screen with potential clues in treating her one-of-a kind genetic condition.

Gray specks on the screen show her cells that scientists reprogrammed with the goal of zeroing in on a custom medicine. McPherson co-founded the lab, Everlum Bio, to spark a treatment for Rose — and others like her. A regarded singer-songwriter, McPherson never imagined going into drug development.

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Marc Dunoyer, Alexion CEO (AstraZeneca via YouTube)

Up­dat­ed: As­traZeneca nabs a small rare dis­ease gene ther­a­py play­er for 667% pre­mi­um

AstraZeneca is kicking off the fourth quarter with a little M&A Monday for a gene editing player recently overcoming a second clinical hold to its only program in human studies.

The Big Pharma and its subsidiary Alexion are buying out little LogicBio for $2.07 per share. That’s good for a massive 667% premium over its Friday closing price, when it headed into the weekend at 27 cents and just weeks after Nasdaq said LogicBio would have to delist, which has been put on hold as the biotech requests a hearing. It’s one of two biotech deals to commence October, alongside the news of Incyte buying a vitiligo-focused biotech.

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Dave Marek, Myovant CEO

My­ovant board balks as ma­jor­i­ty own­er Sum­it­o­mo swoops in with a $2.5B deal to buy them out

Three years after Sumitomo scooped up Roivant’s 46% stake in the publicly traded Myovant $MYOV as part of a 5-company, $3 billion deal, they’re coming back for the whole thing.

But these other investors at Myovant want more than what the Japanese pharma company is currently offering to pay at this stage.

Sumitomo is bidding $22.75 a share for the outstanding stock, which now represents 48% of the company after Sumitomo bumped its ownership since the original deal with Roivant. Myovant, however, created a special committee on the board, and they’re shaking their heads over the offer.

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Bob Duggan (Duggan Investments)

Biotech bil­lion­aire Bob Dug­gan flies the white flag as Sum­mit hunts a new own­er, or part­ner, for sole clin­i­cal-stage ef­fort

Bob Duggan’s Summit Therapeutics $SMMT is running out of moves for its sole clinical-stage candidate.

The biotech issued a terse statement in an SEC filing that it’s pulling the plug on the only active clinical trial for ridinilazole, which has been through a failed late-stage trial for C. difficile. A pediatric study is being curtailed as Summit says it decided a few days ago to either partner out the therapy or get a buyer — if they can find one.

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Benjamine Liu, TrialSpark CEO

Paul Hud­son and Tri­alSpark's mu­tu­al de­sire to speed up de­vel­op­ment con­verges in three-year, six-drug goal

A unicorn startup that originally set out to hasten clinical studies for biopharma partners dug further into its revised path of internal drug development by linking arms with Sanofi in a pact that the biotech’s CEO said originated from the top.

TrialSpark and the Big Pharma on Tuesday committed to in-licensing and/or acquiring six Phase II/Phase III drugs within the next three years.

“I’ve known Paul Hudson for a while and we were discussing the opportunity to really re-imagine a lot of different parts of pharma,” TrialSpark CEO Benjamine Liu told Endpoints News, “and one of the things that we discussed was this opportunity to accelerate the development of new medicines in mutual areas of interest.”

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Ying Huang, Legend CEO

Lentivi­ral vec­tor ramp-up: J&J and Leg­end to in­vest $500M in New Jer­sey man­u­fac­tur­ing to sup­port Carvyk­ti

In response to a question on manufacturing scale at Legend Biotech’s R&D day yesterday, the company’s top exec said its partnership with Johnson & Johnson will be doubling its investment in its New Jersey manufacturing center and will be investing a total of $500 million.

With an eye on their BCMA-directed CAR-T therapy Carvykti (cilta-cel), approved in February as a fifth-line treatment for multiple myeloma, Legend CEO Ying Huang said that the ramp-up in production and the decision to manufacture its own lentiviral vectors — currently in shortage worldwide — means they won’t have to deal with that shortage.

Kite Phar­ma gets FDA to sign off on new Cal­i­for­nia-based vec­tor man­u­fac­tur­ing fa­cil­i­ty

Kite Pharma just got FDA approval to kick off operations at a new manufacturing campus.

The cancer-focused, CAR-T cell therapy player made the announcement Monday, saying that the federal regulatory agency gave the green light to Kite’s 100,000 square-foot, retroviral vector manufacturing facility in Oceanside, CA.

Kite’s global head of technical operations Chris McDonald tells Endpoints News that the facility has been in the works for about four years, after Kite teamed up with its parent company Gilead. Gilead acquired Kite Pharma for just shy of $12 billion in 2017.