There’s one end­point that the boom­ing bio­phar­ma in­dus­try has failed at mis­er­ably: fi­nan­cial tox­i­c­i­ty

Bioreg­num Opin­ion Col­umn by John Car­roll

One of the big themes in R&D over the past few years has been the on­slaught of spend­ing on de­vel­op­ing new on­col­o­gy drugs. The FDA has en­cour­aged ear­ly ap­provals, open­ing the door to small­er tri­als as an on­slaught of in­vest­ment cash made it pos­si­ble for small play­ers to go the dis­tance.

Big Phar­ma, mean­while, has en­joyed the com­fort of bet­ter sci­en­tif­ic in­sights and the ar­rival of some huge new PD-1s on the scene. Next up: A tsuna­mi of com­bo ther­a­pies com­ing at you from the US, Eu­rope and Chi­na — the new fac­tor in drug hunt­ing.

For the in­dus­try, that means a ma­jor new source of rev­enue from com­ing ther­a­pies. For US pa­tients, that means a much bet­ter shot at longer sur­vival and pos­si­bly even a cure. As well as bank­rupt­cy.

Wait. What?

Re­searchers just pub­lished a new study in The Amer­i­can Jour­nal of Med­i­cine high­light­ing that 42% of can­cer pa­tients ex­haust their sav­ings with­in 2 years of di­ag­no­sis. And 62% of the 9.5 mil­lion can­cer pa­tients they re­viewed were in debt af­ter ther­a­py, with 40% to 85% quit­ting work due to can­cer. Af­ter 4 years of ther­a­py, 38.2% were in­sol­vent.

You hear a lot every time a new drug is ap­proved about what drug com­pa­nies are do­ing to make their ther­a­pies ac­ces­si­ble, but the sim­ple fact is that in the US large per­cent­ages of pa­tients are be­ing crushed by the price of brand­ed drugs. And while the new drugs be­ing in­tro­duced may be more im­por­tant than ever, the un­var­nished truth is that ba­sic pric­ing strate­gies are more about max­i­miz­ing rev­enue than ac­com­mo­dat­ing pa­tients.

The re­sult­ing fi­nan­cial tox­i­c­i­ty is enor­mous.

Let’s re­mem­ber that one of the rea­sons we’re see­ing all the in­vest­ment cash pour­ing in is that Wall Street has em­braced a big wave of biotech IPOs. And that’s where ex­ecs are fo­cused when they price new drugs.

That’s not a wild guess, ei­ther.

This is the bot­tom line re­searchers tot­ted up af­ter dis­cussing pric­ing strate­gies on new drugs for mul­ti­ple scle­ro­sis with 4 biotech ex­ecs, pub­lished in Neu­rol­o­gy this week.

Par­tic­i­pants con­sis­tent­ly stat­ed that ini­tial price de­ci­sions were dic­tat­ed by the price of ex­ist­ing com­peti­tors in the mar­ket. Rev­enue max­i­miza­tion and cor­po­rate growth were dri­vers of price es­ca­la­tions in the ab­sence of con­tin­ued mar­ket pen­e­tra­tion. Low­er rev­enue pre­dic­tions out­side the Unit­ed States al­so in­formed pric­ing strate­gies. The grow­ing com­plex­i­ty and clout of drug dis­tri­b­u­tion and sup­ply chan­nels were al­so cit­ed as con­tribut­ing fac­tors. Al­though de­ci­sions to raise prices were mo­ti­vat­ed by the need to at­tract in­vest­ment for fu­ture in­no­va­tion, re­coup­ing drug-spe­cif­ic re­search and de­vel­op­ment costs as a jus­ti­fi­ca­tion was not strong­ly en­dorsed as hav­ing a sig­nif­i­cant in­flu­ence on pric­ing de­ci­sions.

So while the in­dus­try likes to talk a lot about the pric­ing lev­els need­ed to back in­no­va­tion, it’s just not an ac­cu­rate re­flec­tion of re­al­i­ty.

In just a few weeks, we’re go­ing to wake up to a new year that will be dom­i­nat­ed by drug pric­ing dis­cus­sions. We’re go­ing to be do­ing some of this our­selves at JP Mor­gan.

The in­dus­try still has a shot at com­ing up with some kind of work­able re­form on drug prices. Bar­ring a mar­ket so­lu­tion, though, you can ex­pect plen­ty of un­work­able and de­struc­tive sug­ges­tions on drug im­por­ta­tion and com­pul­so­ry li­cens­ing and more. And some­day, law­mak­ers will do some­thing about it.

Ven­ture Cap­i­tal as a Strate­gic Part­ner: Fu­el­ing In­no­va­tion be­yond Fi­nance

The average level of investment required for a biotech start-up to succeed is increasing every year, elevating the pressure even further on venture capital to make smart financial investments. Financial investment alone, however, does not always guarantee that exciting innovations can be transformed into real businesses that make a meaningful difference to patients.

Beyond just capital

At Astellas Venture Management (AVM) – a wholly-owned venture capital organization within Astellas, headquartered in the San Francisco Bay Area – capital is just one of the ingredients we offer to add value to our biotechnology investments and partnerships. We generally take a strategic investor approach for companies in our invested portfolio, providing access to expertise, technology and/or resources in addition to the injection of finance. An equity investment from AVM can include access to Astellas’ research and development (R&D) capabilities and expertise, and a global network of partner academic institutions and biotechnology companies, to help advance and accelerate the start-up’s innovation.

UP­DAT­ED: Ver­tex joins Mer­ck, Pfiz­er — re­vamp­ing multi­bil­lion-dol­lar tri­al strat­e­gy as biotech R&D crum­bles

You can add Pfizer, Merck and — as we found out Friday morning — Vertex to the growing list of pharma giants hitting the pause button on a range of clinical trials. But not everyone in R&D is getting a red light.

Vertex says that it’s doing its best to keep working its pipeline strategy, coming up with a plan “to enable virtual clinic visits and home delivery of study drug to ensure study continuity and medical monitoring, and to facilitate study procedures.”

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 76,800+ biopharma pros reading Endpoints daily — and it's free.

Covid-19 roundup: In­ter­cept, blue­bird and a grow­ing list of biotechs feel the pain as pan­dem­ic man­gles FDA, R&D sched­ules

Around 100 staffers at Boston area hospitals have now tested positive for Covid-19, spotlighting the growing risk that the pandemic will sideline many of the most essential workers in healthcare as caseloads peak in the US and around the globe. With more than 3,400 deaths, Spain has become the latest country to surpass the official death count attributed to the new coronavirus in China, where the outbreak originated. As of Thursday morning, confirmed global cases had crossed 470,000 and the death count eclipsed 21,000.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 76,800+ biopharma pros reading Endpoints daily — and it's free.

Af­ter crit­ics lam­bast­ed Gilead for grab­bing the FDA's spe­cial rare drug sta­tus on remde­sivir, they're giv­ing it back

Two days after Gilead won orphan drug status for remdesivir as a potential treatment for Covid-19, they’re handing it back.

The company was slammed from several sides after Gilead reported that the FDA had come through with the special status, which comes with 7 years of market exclusivity, the waiver of FDA fees and some tax credits as well. Typically, everyone who can get orphan status lands it without much of a fuss, but Democratic presidential candidate Bernie Sanders, Public Citizen and other consumer groups were outraged.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 76,800+ biopharma pros reading Endpoints daily — and it's free.

Mod­er­na CEO Stéphane Ban­cel out­lines a short path for emer­gency use of a coro­n­avirus vac­cine

NIAID director Anthony Fauci has left no doubts that it takes 12 to 18 months to get a new vaccine tested and in commercial use, in the best of circumstances. But in times of a global emergency — like these — maybe there’s another, faster route to follow.

In an SEC filing on Tuesday, Moderna $MRNA staked out a record-setting pathway to getting their mRNA vaccine into the frontline of the healthcare response as early as this fall. The SEC filing notes that CEO Stéphane Bancel told Goldman Sachs that an emergency use approval could allow the vaccine to go to healthcare workers and certain individuals in a matter of months — presumably provided the NIH sees the safety and efficacy data they would need from the Phase I.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 76,800+ biopharma pros reading Endpoints daily — and it's free.

Caught in a Covid-19 mael­strom, Eli Lil­ly locks down clin­i­cal tri­als as multi­bil­lion-dol­lar R&D ops de­rail

The Covid-19 pandemic has derailed Eli Lilly’s $6 billion R&D operations.

The pharma giant reported Monday morning that it has decided to hit the brakes on most new study starts and pause enrollment for most ongoing studies. Lilly adds that it is continuing dosing for ongoing studies, “but with study-by-study consideration.”

The pandemic has severely disrupted healthcare systems around the globe, says Lilly, making it difficult or impossible to conduct studies at many research sites. And there’s no timeline for when it expects to get back on track.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 76,800+ biopharma pros reading Endpoints daily — and it's free.

As share buy­backs come un­der scruti­ny, what's in store for the bio­phar­ma in­dus­try?

Stock buybacks are not to be permitted for companies that will be bailed out in the coronavirus stimulus package, Congressional leaders have signaled. To what degree the biopharma industry has relied on buybacks for earnings growth in recent years, and if the trend continues, are the big questions as scrutiny into the practice heightens and balance sheets weaken with the coronavirus pandemic wreaking havoc on global economies.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 76,800+ biopharma pros reading Endpoints daily — and it's free.

A Sin­ga­pore VC rais­es $200M for a new round, but will Covid-19 pre­vent it from rais­ing the rest?

A top Singaporean biotech venture fund is nearly halfway toward its largest ever fund, but in a sign of what could be in store for VCs amid a global economic freeze, said they could face headwinds raising the other half.

Vickers Venture Partners has secured $200 million out of a targeted $500 million for its 6th fund, first announced in early 2018. They’ve given themselves 13 months to complete the financing, Vickers founder Finian Tan told Deal Street Asia, but the financial frost settling amid the Covid-19 pandemic could slow efforts.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 76,800+ biopharma pros reading Endpoints daily — and it's free.

Strug­gling Unum ex­ecs are ready to con­sid­er a sale, merg­er or any deal that comes its way

Unum $UMRX is working its way through a survival plan of sorts.

After getting hit with a trio of FDA holds in its brief public history and triggering its second pivot to a new lead drug program while laying off 60% of the staff, the troubled penny stock biotech Unum Therapeutics has hatched new plans to secure financial backing while lining up a go-forward strategy for the company.

First, Lincoln Park Capital Fund has agreed to buy up to $25 million of the long-suffering stock, as Unum directs. And the executive team — led by CEO Chuck Wilson — has put everything on the table for consideration: a sale, acquisition, merger, licensing deal, you name it. The ACTR707 program, meanwhile, is being formally wrapped up — their second failed lead program.