Trade ten­sions are im­ped­ing the flow of Chi­nese mon­ey to US biotechs — but how much?

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.”

Da­ta Lit­er­a­cy: The Foun­da­tion for Mod­ern Tri­al Ex­e­cu­tion

In 2016, the International Council for Harmonisation (ICH) updated their “Guidelines for Good Clinical Practice.” One key shift was a mandate to implement a risk-based quality management system throughout all stages of a clinical trial, and to take a systematic, prioritized, risk-based approach to clinical trial monitoring—on-site monitoring, remote monitoring, or any combination thereof.

Pfiz­er's big block­buster Xel­janz flunks its post-mar­ket­ing safe­ty study, re­new­ing harsh ques­tions for JAK class

When the FDA approved Pfizer’s JAK inhibitor Xeljanz for rheumatoid arthritis in 2012, they slapped on a black box warning for a laundry list of adverse events and required the New York drugmaker to run a long-term safety study.

That study has since become a consistent headache for Pfizer and their blockbuster molecule. Last year, Pfizer dropped the entire high dose cohort after an independent monitoring board found more patients died in that group than in the low dose arm or a control arm of patients who received one of two TNF inhibitors, Enbrel or Humira.

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Covid-19 roundup: EU and As­traZeneca trade blows over slow­downs; Un­usu­al unions pop up to test an­ti­bod­ies, vac­cines

After coming under fire for manufacturing delays last week, AstraZeneca’s feud with the European Union has spilled into the open.

The bloc accused the pharma giant on Wednesday of pulling out of a meeting to discuss cuts to its vaccine supplies, the AP reported. AstraZeneca denied the reports, saying it still planned on attending the discussion.

Early Wednesday, an EU Commission spokeswoman said that “the representative of AstraZeneca had announced this morning, had informed us this morning that their participation is not confirmed, is not happening.” But an AstraZeneca spokesperson later called the reports “not accurate.”

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Adeno-associated virus-1 illustration; the use of AAVs resurrected the gene therapy field, but companies are now testing the limits of a 20-year-old technology (File photo, Shutterstock)

Af­ter 3 deaths rock the field, gene ther­a­py re­searchers con­tem­plate AAV's fu­ture

Nicole Paulk was scrolling through her phone in bed early one morning in June when an email from a colleague jolted her awake. It was an article: Two patients in an Audentes gene therapy trial had died, grinding the study to a halt.

Paulk, who runs a gene therapy lab at the University of California, San Francisco, had planned to spend the day listening to talks at the American Association for Cancer Research annual meeting, which was taking place that week. Instead, she skipped the conference, canceled every work call on her calendar and began phoning colleagues across academia and industry, trying to figure out what happened and why. All the while, a single name hung in the back of her head.

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Pascal Soriot, AP

As­traZeneca CEO Pas­cal So­ri­ot sev­ers an un­usu­al board con­nec­tion, steer­ing clear of con­flicts while re­tain­ing im­por­tant al­liances

CSL Behring chief Paul Perreault scored an unusual coup last summer when he added AstraZeneca CEO Pascal Soriot to the board, via Zoom. It’s rare, to say the least, to see a Big Pharma CEO take any board post in an industry where interests can simultaneously connect and collide on multiple levels of operations.

The tie set the stage for an important manufacturing connection. The Australian pharma giant agreed to supply the country with 10s of millions of AstraZeneca’s Covid-19 vaccine, once it passes regulatory muster.

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Yanay Ofran (L) and Anat Binur (Ukko)

Leaps by Bay­er backs a pro­tein en­gi­neer­ing start­up tak­ing on Aim­mune — and Nestlé — in peanut al­ler­gy

Little capsules of peanut powder drove Nestlé’s $2.6 billion buyout of Aimmune. Now, with $40 million in new funding, a fledgling biotech is promising to bring a more sophisticated version of that protein therapy that can go much, much further.

Ukko’s goal is two-pronged — with the initial products spanning therapeutic and food — but it’s grounded in the same protein engineering platform, co-founder and CEO Anat Binur told Endpoints News.

As tar­get­ed ther­a­pies get ever more pre­cise, Deer­field un­veils $50M bet on an Har­vard pro­fes­sor's chem­istry in­sights

Behind the seemingly simple concept of targeted cancer therapies is the drug developer’s headache that the target is always changing. Each generation of kinase inhibitors may be ostensibly hitting the same oncogene, but in addition to blocking the wildtype oncogene, they must now also address the mutations that have developed along the way, spurring resistance to current drugs.

The more those target kinases evolve, too, the more they could resemble off-target kinases you don’t want to bind. So each iteration requires more selectivity — sometimes down to differences of a few atoms.

Vincent Sandanayaka (file photo)

UP­DAT­ED: Ex-MD An­der­son chief De­Pin­ho is help­ing launch an­oth­er biotech — and he's stick­ing with fa­mil­iar ground

Years after co-founding SINE-focused Karyopharm and stirring up controversy at MD Anderson, Ronald DePinho is helping uncloak a new biotech targeting solute carrier transporter proteins — and Karyopharm’s former head of chemistry is leading the charge.

Nirogy Therapeutics emerged from stealth mode on Tuesday with a $16.5 million Series A round and plans to hit the clinic by 2022. The financing should be enough to carry the startup’s lead program, a small molecule lactate transport inhibitor, through Phase I, CEO Vincent Sandanayaka said.

Mer­ck scraps Covid-19 vac­cine pro­grams af­ter they fail to mea­sure up on ef­fi­ca­cy in an­oth­er ma­jor set­back in the glob­al fight

After turning up late to the vaccine development game in the global fight against Covid-19, Merck is now making a quick exit.

The pharma giant is reporting this morning that it’s decided to drop development of 2 vaccines — V590 and V591 — after taking a look at Phase I data that simply don’t measure up to either the natural immune response seen in people exposed to the virus or the vaccines already on or near the market.

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