Life Science Today

Bluebird, Endo & Pharmacies, Genentech + Jemincare, Merck + Orna

August 23, 2022 Noah Goodson, PhD Season 3 Episode 111
Life Science Today
Bluebird, Endo & Pharmacies, Genentech + Jemincare, Merck + Orna
Show Notes Transcript

Gene therapy approval, opioid costs continue, a $650M deal, and a $3.5B RNA partnership.

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Story References
Endo & Pharmacies
Genentech + Jemincare
Merck + Orna

About the Show
Life Science Today is your source for stories, insights, and trends across the life science industry. Expect weekly highlights about new technologies, pharmaceutical mergers and acquisitions, news about the moves of venture capital and private equity, and how the stock market responds to biotech IPOs. Life Science Today also explores trends around clinical research, including the evolving patterns that determine how drugs and therapies are developed and approved. It’s news, with a dash of perspective, focused on the life science industry. 


Welcome to Life Science Today, your source for stories, insights, and trends across the life science industry. I’m your host, Dr. Noah Goodson. This week, gene therapy approval, opioid costs continue, a $650M deal, and a $3.5B RNA partnership.


The views expressed on Life Science Today are those of the host and guests. They do not necessarily reflect the opinions of any organizations with which they are affiliated. 


Gene Therapy Earns FDA Approval

Bluebird Bio has overcome a long string of challenges from dropping stock prices through an organizational split, and come out the other side with some good news this week. Their gene therapy for the treatment of Beta-Thalassemia has been approved by the FDA. Sold as ZYNTEGLO, the therapy is specific to the rare blood disorder that causes reduced the production of hemoglobin resulting in anemia. While relatively rare in the US, Beta-Thalassemia is much more common in certain regions of the world including the Mediterranean, Middle East, Africa, and central Asia. In severe cases, regular blood transfusions can be required. This FDA approval only accounts for those most extreme cases, an estimated 1300-1500 individuals in the United States who would fall under this category. The rarity, along with the expense of development and the net disease burden are contributing to the staggering proposed cost of $2.8M – if approved it would be the most expensive therapy in the world. Now that puts the total potential value of the therapy in the United States at $4.2B assuming total uptake and cost alignment, both of which appear unlikely. To expand further, that leaves a financial strategy of going global – but if you do that, who will pay? Numerous organizations have faced challenges rolling out expensive therapies in Europe for example. All of these factors continue to place questions on just how gene therapy for ultra-rare diseases will be rolled out at scale globally.

You may recall Bluebird Bio split off their oncology operation into 2seventy Bio in November of last year to protect those assets and place them in a clear developmental silo. Now, with one approval under their belt, Bluebird will hope that ZYNTEGLO will get cost approvals and leverage those sales to push toward their much higher potential revenue gene therapies to treat Cerebral Adrenoleukodystrophy and Sickle Cell Disease. It marks a major success for the future of this industry and for those patients who it may impact, but the market response also shows that gene therapies have yet to realize a clear financial path forward to sustainable investment. 

The Cost of Opioid Roll On 

We spoke a couple of weeks ago about the dark side of the Life Science Industry. One of the current most far-reaching shadows is the impact of the opioid epidemic on communities across the United States. As State and Federal agencies continue to bring resolution and solutions to the ongoing crisis outcomes, the Lawsuits impacting organizations seem to be an endless tide. Some companies, like Teva mentioned in Episode 109, are hoping to prevent total fiscal implosion by negotiating group settlements. Other organizations are moving into bankruptcy and restructuring. That is the case for Endo International, who filed for bankruptcy due to an $8B lawsuit debt. These kinds of losses, particularly as the build can impact even deep revenue streams. While down year over year, Endo still posted $569M in Q2 revenue – despite being on track for a multi-billion-dollar year, there was no way to offset legal losses in the near future.   

The reach of these lawsuits has not stopped with the manufacturers. Indeed, last week CVS, Walgreens, and Walmart in Ohio were ordered to pay a combined $650M for oversupply within several rural counties. Now this might be a bit preposterous on the surface, after all how could a pharmacy who simply fills prescriptions be responsible for their supply in the market? Well as an article in the Washington Post noted between 2012 and 2016 the pharmacies dispensed 61 million opioid pills in Lake County Ohio, a number sufficient to supply every many, women, and child in the county with 265 pills. It is unlikely that such a demand went un-noticed by the retailers, but according the lawsuit, it certainly went unchecked. The success of this suit will likely lead to further targeting of pharmacies, particularly as the manufacturers of opioids continue to drop out of economic access through any means possible. 

Genentech Signs $650M Prostate Cancer Deal

Genentech has signed a  deal for exclusive worldwide distribution of the prostate cancer therapeutic in development by the Chinese Pharmaceutical company Jemincare. The deal for the androgen receptor degrader gives Jemincare $60M upfront and $590M in milestone payments. Genentech will take over the development and commercialization worldwide. The deal is a solid one for Jemincare who will hand off the heavy lifting to Genentech to take the product forward. Compared to other co-development biobucks deals, this is really more of an asset acquisition. Genentech is buying the rights to develop and commercialize with Jemincare stepping back.

I’ve been saying on this show all year, that many of the pharma companies are looking for the right opportunities to expand and re-establish their pipelines in post-pandemic markets and I think as we start to enter the back-half of 2022 you will see more and more of these deals  whether it’s acquisitions, biobucks, or just targeted investment, I expect to see a number of these companies really re-define their pipelines and the technologies they are banking on. In this case this is neither - it’s just a classic safe bet on an oral inhibitor in a known space but it still shows the deal movement is increasing in the back-half of 2022.


Merck and Orna Close $3.5B Deal

Merck (MSD outside US) has closed a deal with the RNA therapeutics company Orna for $150M upfront and a potential $3.5B in milestones to develop the proprietary  oRNA-LNP platform in which circular RNAs are delivered via lipid-nano particles. The LNPs can be targeted through various means to specific cells or tissues opening up a range of therapeutic options. The basic idea is targeted delivery or RNA to drive expression of a certain protein. There are basically endless potential applications if each step in the delivery and launch process works. There are a lot of technical details to actually get right for this to become a reality but with the success of other RNA-based approaches (think Moderna) it’s not surprising that Merck is willing to sign on early. It is also not surprising that Orna closed a $221M series B at the same time their deal with Merck was announced. This places them in an excellent position for a Biotech startup in 2022 – well funded with clear runway and existing pharma partnerships to move into development and  commercialization. Now, they can focus on the clear work of developing their preclinical assets into viable therapeutics. 

For Merck this is the second move in two weeks to expand their pipe line, with a $1.1B deal inked last week with Cerevance to pursue Alzheimer's therapies and potential additional deals circulating in the rumor mill. 


Closing Credits

Thanks for joining me for Life Science Today, your source for stories, insights, and trends across the life science industry. Learn more at If you like what you hear, please tell a friend. Once again, I’m Dr. Noah Goodson, I’ll see you next week.