Intellia, Regeneron, Viatris + Oyster Point

More CRISPR data, oncology wins, and a new player in ophthalmology

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Story References
Intellia
Regeneron
Viatris + Oyster Point

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. 

Transcript

Introduction

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, more CRISPR data, oncology wins, and a new player in ophthalmology.

Disclaimer

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. 

More CRISPR Data from Leader Intellia

Intellia Therapeutics has been hitting the news a lot lately with results coming in from their two leading candidates. Last week they released interim data from their gene therapy NTLA-2002 for Hereditary Angioedema (HAE). The rare disease causes significant swelling events in the body. These early results from the phase 1/2 study showed at multiple dose levels the key targeted protein kallikrein was reduced 65-92% in a dose-responsive manner. Additionally, after a single administration of the therapy all participants have been “attack free” to date. There have only been minor adverse events associated with the therapy, primarily around administration. 

These are small samples sizes we are talking about, but on top of the positive recent data from their other therapeutic NTLA-2001, this continues Intellia’s proof of concept that CRISPR can be an effective mechanism of modifying protein over-expression in certain human diseases leading to changes in production as well as changes in clinically relevant measurable outcomes. This won’t resolve all the challenges CRISPR has faced, from legal battles about ownership of licensing to meaningful cost challenges in getting these therapies to market. In their Q3 Intellia burned through $113M bringing them down to $849M in stockpiles. But with an increasing  clinical development cost I expect to see Intellia look to raise more funds through direct raises or cost-offsetting partnerships in the near future. An alternative route, particularly in light of their Rewrite $45M acquisition at the beginning of the year, would be to leverage their late-pipeline success to find more early pipeline partners by selling off new candidates to pharma in order to subsidize the overall organizational growth while capital outlays continue on their lead candidates. Notable, NTLA-2001 is already tied up with Regeneron, while NTLA-2002 discussed here has does not pharma partner. Either way – the string of news and positioned seems very “forward thinking” in terms of fund development, but perhaps the b earish markets will be a cause for Intellia to play the long game. 

Regeneron’s Libtayo Earns Additional Approvals

Regeneron’s oncology therapy PD-1 inhibitor Libtayo has earned an additional approval as a first-line treatment for advanced non-small cell lung cancer (NSCLC). While it had already earned an approval in the space, this opening as a first-line treatment regardless PD-L1 expression or histology greatly increases the potential patient pool and continues the seemingly endless string of PD-1 inhibitor successes in oncology. This also means Libtayo can be utilized as a monotherapy or in combination with chemotherapy for advanced NSCLC. This is really good news for Regeneron – but just how import? Well I think the gushing commentary from George Yancopoulos, President and CSO at Regeneron should give use some idea: "Libtayo is the backbone of our oncology strategy, designed to synergistically combine multiple modalities to provide more options for more patients.” That’s not quite “help me Obi-Wan, you’re my only hope.” But for a company with a 15% reduction in y/y sales this Q3 and a current total loss on their previous potential blockbuster REGEN-COV that failed to target new COVID mutants, any hope is important hope. Libtayo saw an increase from 78M last year to 126M with expansion from US only into the rest of the world. It’s unlikely Libtayo will ever hit the stratospheric levels that Merck’s PD-1 inhibitor Keytruda lives at, but there is certainly significant potential and Regeneron has put their money where their mouth is – paying Sanofi $900M + milestones and royalties back in July to own the outcome for Libtayo. With some potentially tumulteous waters ahead for Regeneron and their partners surround their pipeline, there is a lot riding on Libtayo to live up to it’s role as the “backbone.”

Viatris Moves into Ophthalmology Space

Viatris, the massive producer of biosimilars and OTCs has announced a two pronged acquisition and major movement to open up in the Ophthalmology space. They plan to acquire Oyster Point Pharma and Famy life Sciences for between $700 and $750M together, with deals closing in Q1 2023. This first acquisition is proceeding with an approximate value of $424M for the publicly traded Oyster Point and privately held Famy for something like $281 – though the numbers on these are not totally clear. What is stated is that Viatris thinks this will be a billion-dollar division by 2028. While that may seem like a massive increase for a company with under $18B in revenue last year, the loss of value of other products is predicted to keep the company on a stable 4-5% adjusted EBITA CAGR across the coming few years. 

This version of stable slow growth competent and profitable company is precisely why so many pharmaceutical companies pushing innovation are moving any biosimilars or OTC business out into a separate entities like Viatris. Keep in mind that there are looming probabilities of additional regulatory pressures on these businesses to further cut costs as governments around the world face financial pressures and implement cost saving austerity measures to save on healthcare – cutting drug prices, particularly on long-standing medications is an easy place to look. And for companies who hold on to the desire to drive profits on medications that have existed for a long time, popularity can quickly wane. For example, the twitter Blue Check debacle of last week where-in a fake account declared Eli Lilly’s Insulin was now free causing their stock to drop 4.5%. As disconnected as these stories may seem, for many drug companies they face “price at the pump pressure.” What I mean is that healthcare costs are driven by a complex nexus, just like presidents have very little impact on gas prices. But just like the person in office is an easy target for expensive gas, profitable pharmaceutical companies are a simple and convenient villain in the narrative of why healthcare is expensive – they are also relatively easy for politicians to directly regulate. As a point in case, starting this January via the Inflation Reduction Act all those on Medicare will have their insulin prices capped at $35/month and companies that raise their prices faster than inflation will owe Medicare a rebate. Compare this sort of direct and sound-bite worthy intervention to the complex policies required to shift the practices ofprivate for-profit insurance or institutional bloat in hospital systems and you have a perfect storm of risk, particularly for companies who make their money selling medications that have existed for a long time. I am not attempting to litigate against or exonerate for-profit pharmaceutical company pricing. I do want to point out there are exceptionally valid, and likely increased pressures going forward that will drive innovative pharmaceuticals and biosimilars/out of patient/OTCs into separate organizational models – though the ultimate capital holders are unlikely to vary significantly. 

In practical terms for Viatris opening up a new therapeutic space, I wouldn’t be surprised for them to have a 3rd or 4th acquisition in mind to round out their portfolio once their initial investment is integrated and up and running. All of this will be required along with internal austerity to achieve even their stable y/y growth objectives.

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 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. 

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.