January 22, 2025

The need-to-know this morning

Johnson & Johnson kicked off the fourth-quarter and 2024 year-end earnings season. The health care giant reported adjusted fourth-quarter earnings of $2.04 per share on total revenue of $22.52 billion.

oncology

Bispecific antibodies are the cancer field's latest 'gold rush'

The first generation of immune checkpoint inhibitors, drugs that can help make the immune system recognize and destroy cancer more aggressively, have long been pillars of cancer treatment. Researchers and drug companies are now turning their attention toward a new generation of immunotherapies: bispecific antibodies that target a combination of the proteins VEGF and either PD-1 or PD-L1.

There's been a surge of interest in these types of compounds in the last few months, spurred by promising clinical data from Summit Therapeutics and BioNTech. “We’re definitely seeing a gold rush here,” one biotech leader said.

What's so special about these molecules? It seems that combining the targets into a single bispecific antibody is critical, leading the approach to be potentially more effective and less toxic than giving two different antibodies at the same time.

gene editing

Chinese biotech says it will start first in vivo beta-thalassemia trial

From my colleague Jason Mast: Leading U.S. gene-editing biotechs are racing to develop the first treatment that can cure sickle cell disease with a simple IV infusion. Such an in vivo approach could be far safer and more scalable than Casgevy, Vertex’s CRISPR-based treatment, which requires patients’ blood cells to be removed, edited in a lab, and then re-infused. Toxic chemotherapy is required to clear out old cells.

Yesterday, Chinese biotech YolTech Therapeutics announced it would start what appears to be the first trial testing such a treatment. It will focus first on beta-thalassemia, a related blood disorder, but both conditions can be treated with the same approach. Beta-thalassemia is more common in China than sickle cell disease.

YolTech’s announcement comes amid growing anxieties among U.S. drug developers over competition from China, where cheaper talent and materials and a different regulatory regime can accelerate development. U.S. companies — including Editas Medicine, Tessera Therapeutics, and Beam Therapeutics — have been vague about when they expect to start in vivo sickle cell trials.

Most, including YolTech, are effectively using iterations of the same approach, trying to target lipid nanoparticles, loaded with CRISPR enzymes, to blood stem cells in the bone marrow. The challenge has been reaching and correcting a sub-group of particularly long-lived cells that will keep pumping out new healthy cells for years to come.

But if they can solve it, there’s a huge market: Only two U.S. patients are known to have received Vertex’s therapy in its first year after approval, partly because of the conditioning required, and the treatment isn’t available in any part of Africa or India, where most of the world’s sickle cell patients live.

drug pricing

Opinion: Medicare negotiations need a floor price

To ensure that Medicare's drug price negotiations protect innovation, the process should involve setting a floor price that reflects the value of a drug to patients, argues Darius Lakdawalla, chief scientific officer at the USC Schaeffer Center for Health Policy & Economics, in a new opinion piece.

Currently, Medicare has a formula for negotiating prices down from a “ceiling price.” A floor price formula, though, “would serve as a check against arbitrarily large price cuts,” Lakdawalla writes, and the two pricing formulas combined would set high and low boundaries and offer guideposts for drugmakers and their investors.

“The lack of predictability undermines the goal of encouraging better innovation, because if today’s investors can’t anticipate how drug prices will be set 10 years from now, they are likely to find other places to put their money,” he writes.

venture capital

Biotech founders have more diluted ownership than in other sectors

Typically in venture capital, new investors join in each new round of funding, leading the ownership stake of the founding team to decline. A new report concluded that founding teams in biotech tend to experience greater dilution in ownership than startups that sell digital products like those in the health tech, fin tech, and software sectors.

In biotech, founding teams hold a median 50% ownership stake after the seed round, a figure that drops down to 11% after the Series B, according to the data, analyzed by Carta, a company that offers software services to startups and investors.

In comparison, in health tech, the median ownership stake for founding teams after the seed round is 54%, and it drops down to 20% after the Series B.

Sectors that make physical products are more reliant on initial capital and intensive research and development before manufacturing can begin, and the tradeoff for raising that capital can in some cases be higher dilution, the report said.

The report also found that biotech startups on average have larger founding teams than companies in all the other sectors that were analyzed. Among the biotech startups that Carta looked at, 13% had one founder, while 20% had five founders.

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