Life Science Today 035 – Eli Lilly, Charles River, Adjuvant Capital, Everlywell, Abbott

Originally Published as The Niche Podcast

Eli Lilly bets on RIPK1, Charles River spends $875M on cell and gene therapy, Adjuvant Capital gets who’s who in backing, you can now buy an at-home COVID19 testing kit whenever you want, and Abbott does it again for the 389th time. 

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Story References
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Music by Luke Goodson
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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 The Niche Podcast – Your weekly rundown of the biotech, clinical research, and life science industries. I’m your host, Dr. Noah Goodson. This week, Eli Lilly bets on RIPK1, Charles River spends $875M on cell and gene therapy, Adjuvant Capital gets who’s who in backing, you can now buy an at-home COVID19 testing kit whenever you want, and Abbott does it again for the 389th time.


Eli Lilly Partners with Rigel Pharmaceuticals

RIPK1 is a protein kinase involved in a variety of cell survival and death pathways. Most notably, it plays critical roles in apoptosis and necroptosis, two kinds of cell death. RIPK1 has been studied with implications for a variety of inflammatory and neurodegenerative diseases, including Alzheimer’s and ALS. 

Eli Lilly struck a deal last week with Rigel Pharmaceuticals for the development of their RIPK1 inhibitor, R552. The once-a-day oral therapeutic has shown good safety data in a phase I clinical trial of healthly adults. Now, Eli Lilly has paid $125M upfront in a deal worth up to $960 in milestone payments for the development of the therapy. R552 will be heading into multiple phase II trials in 2021 and 2022, but the specific indications have not been announced yet.

It’s worth noting that RIPK1 has a bit of a sordid past. The gene itself can cause cell rupture and increased inflammation. It appears to be no different for therapy programs. Sanofi shifted out of a potential RIPK1 inhibitor for safety concerns, and GSK axed an entire developmental program on the gene with little fanfare – as noted last week GSK is cleaning house and refining focus. Still, it should be noted that just because there is early safety data and potential function does not mean there will be meaningful therapeutic output. However, I’m sure Eli Lilly and Rigel are well aware of this history and have significant reason to pursue R552. Perhaps we will know more when Phase II trials are announced later this year.


Charles River Makes $875M Cash Purchase

Charles River Laboratories has acquired Cognate BioServices in a $875M cash deal. Cognate is a cell and gene therapy contract development and manufacturing organization (CMDO). Cognate has been expanding the CMDO services and offering through capital equipment and space acquisition in both the US and EU. With a bumper crop of new ventures in cell and gene therapy popping up, Charles River will likely want to bank on their long-standing relationship with the scientists running these companies to develop new CMDO clientele. Indeed, Cognate is projected to run $140M in revenue this year with 25% increase projected for the next 5 years. That puts them north of $400M in revenue by 2025. Given, there will be significant capital investment needed to stay on track, but Charles River certainly has experience integrating these kind of services into the portfolio. There will certainly be plenty of competition in the CMDO cell/gene therapy space, but from my perspective it seems like there will be sufficient demand to drive the market up, at least in the next couple of years. As long as Charles River invests the effort to capitalize on this deal, they’ve made a solid acquisition for less than $1B.


Adjuvant Raises $300M

Adjuvant Capital has oversubscribed a $300M funding round with a list of some of the most fascinating names in investment. There are philanthropists like Bill and Melinda Gates and Doris Duke, financial groups like IFC, and megapharma companies like Merck and Novartis. What has Adjuvant done to raise this kind of who’s-who smorgasbord? They are targeting common, global, low profit diseases, like Malaria, shigella, and TB. Most suffering from these illnesses are in hard-to-treat areas where even low-cost medicine can be difficult to come by. $300M is a lot of money, but pretty small peanuts in the world of pharma and public health. However, through a global investment portfolio and a focus on the specific needs of these common but poorly funded diseases, my hope is that Adjuvant will help drive critical developments in global health. They may not be the eye-catching gene therapies set to make billions of dollars a year, but funds like this could certainly spur forward therapies that directly impact billions of people a year.


Sponsor

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Everlywell Expanded FDA Approval

The FDA has given the at-home diagnostic test provider, Everlywell, permission to sell COVID19 testing kits direct to consumers. In May of this year, Everlywell received emergency use authorization (EAU) from the FDA to sell their at-home kits. Limited supplies meant that a reason was required to gain access to testing, for example a doctors note, or symptoms. Now the FDA has expanded this EAU to allow any consumer to purchase a COVID19 diagnostic kit from Everlywell directly. 

Back in December we reported on Everlywell’s $175M series D. These funds will doubtless be used to finance the direct-to-consumer sales of COVID19 test kits. It’s pretty easy to imagine keeping one of these on hand to test yourself if you think you have been exposed. The kits run $109. To take the kit you’ll need to swab your nose and mail the sample back to a lab for rt-PCR testing. The kits have a 95% sensitivity and 98% specificity, which is pretty normal for a nasal swab rt-PCR kit. This obviously will depend on an individual successfully gathering a nasal swab sample. As we have addressed on the show, COVID19 testing is a potentially lucrative but likely short-term gain for testing companies. The goal will be to leverage capital, market share, and brand awareness into sustainable long-term testing solutions for both direct to consumer, and healthcare partnerships. Everlywell is on track to do just that.


Abbott Does It for the 389th Time

Abbott Laboratories has paid a dividend to investors for the 389th consecutive quarter. The company has increased their annual total dividend every year for 49 straight years. With a market cap of around $220B and annual revenues around $40B, the 97-year-old company is certainly going strong. In fact, they put up their best numbers in history in 2020 and are currently sitting at $125.44/share, more than $100 higher than in 2012. It seems likely that they will cross 50 straight years of increased dividend in 2021 – an amazing achievement for any company.


Closing Credits

Thanks for joining me on The Niche Podcast; your weekly summary of top news in the biotech, clinical trials, and life science industries. You can learn more at thenichepod.com or find us on your favorite podcast app. Like, comment, subscribe, and most of all share with your friends. If you like what you hear, please rate and review, it really helps us. Once again, I’m Dr. Noah Goodson, I’ll see you next week.