US biotechs have seen a dras­tic drop in Chi­nese ven­ture fund­ing for the in­dus­try amid macro lev­el trade ten­sions be­tween the two coun­tries and the Amer­i­can gov­ern­ment’s height­ened scruti­ny of for­eign in­vest­ment. While VCs from Chi­na ac­count­ed for $1.65 bil­lion worth of fund­ing in the first half of last year, that fig­ure has fall­en near­ly 60% to $725 mil­lion in 2019, the Fi­nan­cial Times re­port­ed cit­ing Pitch­Book da­ta.

The once-ob­scure Com­mit­tee on For­eign In­vest­ment in the Unit­ed States (CFIUS) be­came a house­hold name in this world late 2018 when it broad­ened its re­view of for­eign in­vest­ment in biotech for na­tion­al se­cu­ri­ty rea­sons. It has since stirred up fears that fledg­ling US biotechs may have trou­ble ac­cess­ing deep wells of Chi­na mon­ey, though VCs have large­ly played down the wor­ries.

So far, there’s on­ly been one known in­stance of di­rect CFIUS in­ter­fer­ence in­to health­care. The com­mit­tee is said to have de­mand­ed that Pa­tients­LikeMe — an on­line ser­vice con­nect­ing pa­tients with each oth­er and gen­er­at­ing re­al-world da­ta in the process — sell off the ma­jor­i­ty stake held by Shen­zhen-based health da­ta com­pa­ny iCar­bonX. (Pa­tients­LikeMe was ul­ti­mate­ly ac­quired by Unit­ed­Health.) Nev­er­the­less, it is un­clear how many fund­ing rounds might have fiz­zled in the head­wind.

William Hasel­tine

At least one, ac­cord­ing to William Hasel­tine, the re­searcher and en­tre­pre­neur be­hind mul­ti­ple star­tups in­clud­ing Den­dreon, Cam­bridge Bio­sciences and X-VAX.

Hasel­tine told the FT that he had been forced to aban­don a new project af­ter a Chi­nese in­vestor called off a $30 mil­lion seed deal. In his ex­pe­ri­ence, Chi­nese fund­ing has been par­tic­u­lar­ly good at bankrolling very ear­ly-stage com­pa­nies gen­er­ous­ly.

“As soon as the Cfius pro­gramme went in­to place and [US Pres­i­dent Don­ald] Trump start­ed mak­ing a lot of noise about Cfius, [the mon­ey] be­gan to evap­o­rate,” he said to the pa­per.

Fo­s­un In­ter­na­tion­al, the con­glom­er­ate that has its own bio­phar­ma busi­ness in Chi­na, has in­di­cat­ed that it’s turn­ing greater at­ten­tion to emerg­ing mar­kets as trade re­la­tions with the US grow in­creas­ing­ly frayed.

“Trade fric­tion has im­pact­ed our in­vest­ments in the US, but not to the ex­tent of stop­ping all deals,” Kevin Xie, who man­ages its US strat­e­gy, told Bloomberg.

Leon Chen of 6 Di­men­sions Cap­i­tal at the US-Chi­na Bio­phar­ma In­no­va­tion and In­vest­ment Sum­mit in Shang­hai on Oc­to­ber 23, 2018; Cred­it: End­points News, Pharm­Cube

Click on the im­age to see the full-sized ver­sion

At the same time, it’s worth not­ing that some of the most well known Chi­nese VC firms — such as 6 Di­men­sions and Qim­ing Ven­tures — have ded­i­cat­ed state­side funds in­vest­ing with US dol­lars.

Leon Chen of 6 Di­men­sions pre­vi­ous­ly told me that he’s not over­ly con­cerned about CFIUS re­views as they will abide by the sys­tem — even if it slows down the process.

“This in­dus­try needs more cap­i­tal than the cur­rent in­vest­ment can sup­ply, and the in­dus­try needs much much more risk tak­ing in­vestors than cur­rent­ly we can prac­ti­cal­ly count,” he said.

Frank Yu Al­ly Bridge

Frank Yu, founder and CEO of Al­ly Bridge Group, echoes that sen­ti­ment. Sure, life sci­ences care about how they would man­age CFIUS is­sues as a non-US in­vestor, but their un­der­stand­ing of what they’re in­vest­ing in and the ca­pa­bil­i­ty to add val­ue are more im­por­tant.

“We are per­ceived as a tru­ly glob­al life sci­ence spe­cial­ist in­vestor rather than a Chi­na VC,” he wrote in an email. “We un­der­stand and man­age CFIUS-re­lat­ed is­sues very well, which are very much wel­comed by US com­pa­nies.”

It’s official. Memorial Sloan Kettering has picked a brain cancer expert as its new physician-in-chief and CMO, replacing José Baselga, who left under a cloud after being singled out by The New York Times and ProPublica for failing to properly air his lucrative industry ties.

His replacement, who now will be in charge of MSK’s cutting-edge research work as well as the cancer care delivered by hundreds of practitioners, is Lisa M. DeAngelis. DeAngelis had been chair of the neurology department and co-founder of MSK’s brain tumor center and was moved in to the acting CMO role in the wake of Baselga’s departure.

More than two years ago Ritter Pharmaceuticals managed to find enough silver lining in its Phase IIb/III study — after missing the top-line mark — to propel its lactose intolerance toward a confirmatory trial. But as it turned out, the enthusiasm only set the biotech and its investors up to be sorely disappointed.

This time around there’s little left to salvage. Not only did RP-G28 fail to beat placebo in reducing lactose intolerance symptoms, patients in the treatment group actually averaged a smaller improvement. On a composite score measuring symptoms like abdominal pain, cramping, bloating and gas, patients given the drug had a mean reduction of 3.159 while the placebo cohort saw a 3.420 drop on average (one-sided p-value = 0.0106).

An early-stage update on Adverum Biotechnologies’ intravitreal gene therapy has triggered investor concern, after patients with wet age-related macular degeneration (AMD) saw their vision deteriorate, despite signs that the treatment is improving retinal anatomy.

Adverum, on Wednesday, unveiled 24-week data from the OPTIC trial of its experimental therapy, ADVM-022, in six patients who have been administered with one dose of the therapy. On average, patients in the trial had severe disease with an average of 6.2 anti-VEGF injections in the eight months prior to screening and an average annualized injection frequency of 9.3 injections.

Too often, Alex Arfaei arrived too late. 

An analyst at BMO Capital Markets, he’d meet with biotech or pharmaceutical heads for their IPO or secondary funding and his brain, trained on a biology degree and six years at Merck and Endo, would spring with questions: Why this biomarker? Why this design? Why not this endpoint? Not that he could do anything about it. These execs were coming for clinical money; their decisions had been made and finalized long ago.

In the first of what it hopes will be a couple of major regulatory milestones for its new drug, Ardelyx has bagged an FDA approval to market Ibsrela (tenapanor) for irritable bowel syndrome.

The drug’s first application will be for IBS with constipation (IBS-C), inhibiting sodium-hydrogen exchanger NHE3 in the GI tract in such a way as to increase bowel movements and decrease abdominal pain. This comes on the heels of two successful Phase III trials.