A critical aesthetics approval, site network buy-up, a very normal oncology biotech, and a busy week for one company.
Find out more at
Velocity + MedPharmics
SpringWorks Link 1, Link 2, Link 3
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, a critical aesthetics approval, site network buy-up, a very normal oncology biotech, and a busy week for one company.
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.
Revance Earns Critical Aesthetics FDA Approval
Revance Therapeutics received FDA approval for their aesthetic injection DAXXIFY. The treatment, a direct competitor of AbbVie’s BOTOX, is an acetylcholine release inhibitor stabilized with Revance’s Peptide Exchange Technology. This is basically a wrinkle reducer. This first approval is for frown lines, but Revance has late-stage studies for other facial lines – you can expect those to roll out across 2023. But the big news here is that the results last much longer, from 6-9 months. For those looking for aesthetic treatments to reduce wrinkles, BOTOX currently requires quarterly injections to maintain effect, giving DAXXIFY a significant edge for convenience. This comes at a critical time for facial injectables as the global market continues to see 9.1% compound annual growth with expectations that this continue out into 2030. That takes an estimated $17.4B market this year and brings it to $35B by 2030. Numbers like this mean leading products like BOTOX will be big targets, and Revance’s DAXXIFY appears to be the first major contender to emerge in recent years.
It’s not clear yet what Revance plans are, with stocks up 40% on the approval. There are a couple of options here. First, is that they raise additional capital. Despite increased sales this year, they burned $125M in the first half of 2022, with just $228M in the bank that gives them money into Q2 2023. Taking into account the cost of commercialization of a product like this and time to capture market Revance will absolutely need more capital. That leaves them open to raise money in a less than ideal market. It’s definitely possible they will try and sell off of this approval. They have several things going for them, with a rapidly growing market, demonstrated effective targeting of and this approval on top of their already approved RHA collection of dermal fillers make them an enticing target with likely outsized valuation based on predicted future revenue. The trick here for selling will be the right partner. Remember, a lot of the major pharmaceutical companies are moving out of more consumable products, and the Aesthetics market sits somewhere between pharmaceuticals and consumer health. Of course, AbbVie is likely off the table because even if they wanted Revance, regulators would through a stifling-competition-hissy-fit. This puts Revance in both an extremely exciting and potentially fraught position. Revance themselves think DAXXIFY can be a lot more than just an aesthetic but may have really valuable additional therapeutic targets like cervical dystonia, and upper limb spasticity. Not just true, but an indication they hope to achieve pharma attention, not just generics and consumer health niche market attention.
If they don’t sell and choose to grow independently, now is the time to raise major capital – I suspect they’ll want at least $0.5Bb for commercialization to capture any meaningful share of the market in the next 3 years – though they may split the raise into a near term smaller raise and second more diluted raise once additional approvals role out and their market valuation affords them more leverage. If you don’t hear a raise announced in the next few weeks, my opinion is that it is a pretty good indicator serious acquisition talks are underway. With less than a year of runway, and momentum generating approvals – now will be the time to act or at least start to act.
Quick addendum – after recording Revance announced $150M common stock offering Monday. This is clearly a bridge step with more planned for 2023 once they gain additional approvals and that adds to their overall market value.
Velocity Clinical Continues Acquisition Streak
A popular site network on this show, Velocity Clinical, has continued their run acquiring more clinical sites. They show up here because they continue to make moves in the site space. The latest is the purchase of MedPharmics, a site network with specific access to racial and ethnically diverse populations. A key need in clinical trial recruitment is the inclusion of more diverse populations, with the FDA putting out draft guidance in April of 2022 flagging their expectation that trial populations accurately reflect the ethnic and racial diversity within the United States. This move by Velocity opens up new sites across the Southeast and Southwest and enables them t o promise CROs and sponsors that they can more effectively deliver on certain racial diversity inclusion criteria. Since Velocity’s acquisition by GHO Capital in April of 2021, they have made a steady march towards more sites, with movement into Germany and the UK begun earlier this summer. There do not seem to be signs of slowing any time soon with GHO pumping in capital to make Velocity one of the largest site networks in the world.
Arsenal Biosciences Raises $220M Series B
The CAR T cell therapy biotechnology company Arsenal Biosciences has raised a $220M series B to advance their lead candidate AB-1015 to clinical trials later this year. Arsenal is broadly focused on the application of CAR T to solid tumors. They launched almost 3 years ago with an $85M series A and have moved their first candidate forward, announced key partnerships with Bristol Myers Squib, and supposedly developed some additional candidates in their pipeline, though information is sparse on the ground. I think the key observation I want to make here is how very normal the moves by Arsenal have been. A predictable time between first raise and series B. And the amount and timing and basically on course for a pharma engaged oncology biotech startup. In the next year, we can look for their clinical trials to begin and an expanded pre-clinical portfolio to be displayed as they build organizational market value and clinical evidence.
SpringWorks Springs into Q4 with Capital and Data
SpringWorks Therapeutics is wrapping up Q3 with lots of news. Last Wednesday they announced an expanded partnership with GlaxoSmithKline to develop nirogacestat in combination with GSK’s Blenrep to treat relapsed and refractory multiple myeloma. The deal brings a $75M equity investment and up to $550M in milestones, a significant investment for non-exclusive oncology rights. At the same time, SpringWorks raised $225M through a securities purchase agreement bringing their total raised to $300M in one week. If all the capital news were not good enough, they have also released data from their phase III trial showing nirogacestat was effective against desmoid tumors with plans to go to the FDA for an NDA by the end of the year. With no current FDA approval for the condition, they are in a good position for the first and only monotherapy approval. On the strength of the data and investment SpringWorks’ stocks are up about 25% since last week. Their range of partnerships are extensive across their pipeline and these new deals place them in a strong financial and regulatory position with key partnerships in place for continued long-term success, and I’m sure plenty of high-fives to mark the end of Q3.
Thanks for joining me for Life Science Today, your source for stories, insights, and trends across the life science industry. Learn more at LifeScienceTodayPodcast.com. If you like what you hear, please tell a friend. Once again, I’m Dr. Noah Goodson, I’ll see you next week.