Latest / BioSpace / J&J targets $100B revenue, Replimune rebuffed again and a “Revolution” in pancreatic cancer
Transcript
- BioSpace: you Welcome to the Weekly by Biostase. I'm your host, Heather McKenzie. J &J kicked off Q1 earnings season on Tuesday, touting an audacious $100 billion revenue goal. We'll discuss that and preview more results to come from Novo Nordisk, Eli Lilly, and more. Plus, both ⁓ &A and IPOs are on an upswing as certain regulatory and policy pressures start to ease. Speaking of regulatory pressures, however, RepliMune was rebuffed again. Last Friday, the FDA rejected its advanced melanoma therapy for a second time. Meanwhile, analysts say the FDA's new public CRL policy is increasing accountability. Finally, we were met with a rush of cancer data this week ahead of the American Association for Cancer Research's annual meeting. Let's get started. Hey, how are you guys doing? You all ready for your trip, Annali? I am. No, wait. No, I'm not. I am not. I'm off to Utah, Salt Lake City, in a few hours to cover BioHive, which is super exciting. I get to talk to Janice Chen, who is the CSO at Mammoth Biosciences. I've talked to her before and she's fantastic. So really looking forward to that. That's like an official session as part of that conference, right? Yeah, yeah. It's going to be great. It's like a bunch of, you know, like Utah entrepreneurs, that kind of stuff, people in the biotech space there. So yeah, it's a really cool event. ⁓ Awesome. Like I said, not packed. I'll do that after the podcast, I swear. And you've got on a plane that will take you there, right? I mean, my initial flight already got delayed by four hours, which made me miss my connection. So now I'm on a new flight. mean, yeah, let's not count our chickens before they've hatched here. I would hear that. Well, at they're here to join us today. Yes. You know, one of the things I don't think I'm going to pack though, I was just thinking, I want to show you guys my sweater. It says, it's backwards. Born to yapp. Or is it supposed to be born to pay? No, it's born to yapp. Oh, born to yapp. Okay. You like to talk. I like to talk too. And I they were supposed to have really good sweater to wear for the podcast, but I think it's a bad sweater to wear on the plane because I don't want to talk to anybody. That is a terrible... You should really, yeah, put that in your... Don't pack it because you will be like, I'd love to talk to you about my whole life, my life story. just want to go in noise cancelling headphones on and get to Salt Lake City. was about to say popping your earbuds and keep your head down. Well, since you've been talking, Annali, do you want to lead us off with introductions? Yeah, for sure. So I'm Annali Armstrong. I am senior editor ⁓ and I do the Biofarm executive newsletter, which comes out into your inboxes every Wednesday morning. I'll go in the middle since I never do. I am Heather McKenzie, senior editor, and I curate the Clinica Space newsletter, which hits your inboxes on Monday. And that would be yesterday for anyone who forgets what today it is. We're recording on Tuesday. And I'm Jeff Axe, managing editor, and as always, putting in plugs for some of our other newsletters you should also sign up for. We've got Manufacturing Brief on Tuesdays and Career Insider on Thursdays, and of course, our daily gene pool newsletter. Right. Well, let's get to it. This morning, as we're recording on Tuesday, J &J kicked off Q1 earnings season. So we'll kick off the show with them. So J &J has an audacious goal. I like the word audacious, so I'm just pinning it to them. They are seeking $100 billion in revenue this year for the first time. And CEO Joaquin Duado said that the company is off to a fast start. Well, they should. There's a real sense of them holding the top spot as they have for a while now. I know, Annali, you just put out that top revenue of 2025. J &J was a clear leader and they're only growing. So there you go. Yeah, they're almost at a quarter of that goal. So they brought in $24.1 billion this quarter. And Annali seemed pretty satisfied with it. It was a modest beat. They were particularly interested though in the potential of eikatide. Now that's the protagonist partnered in immunotherapy that was approved for plaque psoriasis last month. Duando said on the call that eikatide has the potential to be one of the largest products ever for J &J. And one analyst wanted to put that in, you know, stark relief. He said that this would put eikatide at at least 10 billion in revenue. So one-tenth of their overall goal. So that is a lot of pressure to put on one product, but it does sound like it's also being valued in Crohn's and it does sound like it has good potential to be a kind of a pipeline in a product kind of asset. Which is a strategy that J &J definitely knows well with lots of their assets. Is it Stellara that's theirs? Yeah, I think, yeah. Yeah. Yeah. So that's how everyone's got to follow J &J's lead. And actually they kicked it off well this quarter. Kind of the momentum that BioPharma. has going on right now. Yeah, so J &J always leads the earnings period. Then we get a little bit of a break. We have, I think it's the 29th and the 30th where we have like 10 companies reporting. Think so. Be kind to us on those days. But entering into earnings, we're basically coming in on a massive tidal wave of deals, which have really set the tone for what investors will want to hear about on these calls. It doesn't matter how many deals a company signs, analysts and investors are always going to want more. So, executives that have done deals are going to be expected to talk about those, but also update their BD strategies. Are they going to buy more? Are they done? That kind of thing. But companies that have not made any deals yet are going to be asked why. So, that's definitely going to be the biggest theme, I think. leading into this period, we've talked, I think, for weeks about some of these deals that have happened. They've been pretty major. Gilead bought... Tubulus for $5 billion, Biogen bought Appellus for 5.6, Lilly paid 6.3 for Centessa. So it's been a really exciting couple of weeks. Yeah, I remember last week we were talking about that. Those were the second, third, and fourth deals of the year that all came in at the tail end of the quarter. So that was definitely exciting. So besides deals, again, probably going to be the biggest headline, farmers are of course still seeing a lot of policy pressures. Although analysts said that things are kind of easing. I wouldn't say we're at a point of... regulatory certainty by any means, but where things are getting better. Analysts kind of expect farmers are going to have to talk to some of the upheaval at the FDA. Particularly, I'm sure Heather's going to talk about this a little more, but a CBER chief Vinay Prasad is set to leave at the end of the month. We still don't have a replacement for him, although there's some rumors of some potential candidates. Tariffs may come up. The Trump administration announced last week, of course, that there's a 100 % tariff on the pharma industry. Analysts don't really think there's going to be a huge impact on pharma because of all the carve-outs, but still, it's likely going to come up. You can check out our full first quarter earnings preview at Biospace that also headlined BioPharm executive this week. If you do not subscribe, you absolutely should. Yeah, in addition to all these ⁓ &A's that we're seeing recently, the ICOs are also on upswing at the moment and they just seem to be getting bigger and bigger and bigger by the announcement. Yeah, super exciting announcement this week. Kyler announced that they're going to try to raise $533 million. This is a new co that formed around a bunch of obesity assets from a Chinese biotech. So obviously super hot space. They're finding these assets in China, which is also a huge trend in pharma right now. That IPO, if it does come down at 533, is going to be one of the bigger ones. It could go even higher if underwriters exercise all of their options. Just for a little perspective. Urna's IPO was around $600 million. So this could be maybe not a record, like the number one biggest IPO, but it's going to absolutely be up there. That is a lot of money flowing both into BioFarma and floating around BioFarma. So that's the terrific news. Yeah, we love to see it. No, just to quickly recap, there's also been a couple early declarations. Seaport, Avalon, and HMAB have also declared their intent to IPO. So we're going to be watching those closely. Nice. Tends to ride about. Well, on the regulatory front, it's again been a busy week ⁓ with one bellwether decision going against the sponsor, Replomune. Yeah, that was sad. Replomune, just as a reminder, they were first rejected for this advanced nomad drug back. in July 2025. And at the time that came as a surprise to Repdune and to analysts. I remember reading from BMO Capital Markets their note on this. They were not only surprised, they blamed the new FDA leadership, including CBER Director Vinay Prasad. They called it a final hour shakeup, this unexpected rejection back last July. you know, almost a year later, nine months later, you know, we were all hopeful. I think you Heather had done a preview story for CS and We were putting it at like a 50-50. We weren't sure if it was going to go or not, but I was hopeful. And so it was disappointing to see that news on Friday. I was too. mean, this is a really tough cancer, advanced metastatic ⁓ melanoma. ⁓ And yeah, so people originally blamed Prasad because that's kind of what you do. But ⁓ this one was actually apparently on Richard Pasteur. ⁓ So he was against this approval. The FDA is insisting on a phase three study, which rep-immune is indicating that it cannot afford. So they tested the drug RP1 as a monotherapy and in combination with BMS's checkpoint inhibitor, Opdivo. The FDA back in July said that it did not consider the study to be adequate and well controlled. I remember Pazder being a part of that as well. Again, BMO kind of put it on Prasad because he had been previously critical of approving drugs based on uncontrolled data. yes, that also harkens all of this harkens back to something you've been reporting on Heather with like this balance of rigor and unmet needs. So while it's disappointing for the patient community, you know, it's I think a sign of as you reported the new FDA and the level of rigor that they do expect. Yeah, no, it's definitely very disappointing for RepliMuun. mean, their stock fell nearly 20 % on Friday, but that was before trading was halted. And then it fell a lot more once trading resumed. RepliMuun said outright in its press release, which they actually issued several hours after the rejection, which gives me the idea that they may not have been expecting it. But anyway, they said that its CEO, Sushil Patel, said it's deeply disappointing that the FDA has not exercise regulatory flexibility. He also said that without a timely accelerated approval, which is what they were going for, the development of RP1 will not be viable. And they're eliminating jobs and substantially scaling back their US-based manufacturing as well. This is one of those examples of where these small biotechs, it's really a make or break moment for them when they get these drugs to the FDA. you know, it's disappointing to see this happen to replimune and, Hopefully they'll be able to figure out a way to get that phase three going and this isn't the end of the road for those patients. Yeah, I really hope so. Well, this all comes as analysts say the FDA's new policy of making CRLs public is increasing biopharma accountability. Yeah, that's a great segue. So as a reminder, it also last July, the same time that Reptile Moon's original rejection came down. That was when the FDA first started moving toward publishing these complete response letters. So at that time, they published more than 200 complete response letters. They, at that time, covered applications from 2020 to 2024 and were specifically for drugs that eventually made it to market. But since then, the FDA has continued to release CRLs and they now include products that have not yet come to the market. So we're getting a little bit more insight into why these rejections have come down. The agency also promised to start releasing them in real time, which has often happened. So we had a feature out just this week in your Clinica space, Heather, where we spoke with analysts and tried to get a real understanding of how this shift in policy is affecting biopharma. And the takeaways is basically that it is holding companies accountable. Essentially, it's reduced the scope of what they can say, and they can't really diverge from what the agency is saying because the agency is putting out their communications. Of course, a lot of these CRLs do have heavy redactions, and so that could lead to some wiggle room in the interpretation. But in a nutshell, analysts are definitely happy with the new policy. So that's good to see. Again, disappointing for RepLume, but I'm all for transparency, absolutely. And that's just one of the many themes that we're seeing. The other one that, again, gets back to this rigor versus unmet need. But in some ways, RepLume's complaining about the lack of flexibility, but in some ways we are seeing some flexibility. Yeah, I mean, we all know that I've written a fair amount about the regulatory reversals or, you know, parent reversals that have come between the former FDA under President Biden and the current FDA. But a couple of companies reached out recently and wanted to talk to me. They said, you know, these companies are Resolute and Sero Therapeutics. They've been actually happy with their interactions with the FDA, and so they wanted to speak out. ⁓ Notably, however, these decisions I mentioned were entirely made after January 2025. So there was no part played by a previous FDA, whereas in cases like Capricor and Unicure, the initial guidance or advice was given back in 2024 or earlier. Yeah, that makes sense. So maybe the current FDA is a little bit less flexible in some ways, but consistent, at least in these cases. Consistent with itself, yes, seems to be or consistent with, I don't know, disagreeing with the, I don't know. We're still trying to figure out trends there. its existing self. Yeah, so that's existing self. Yes, it's a good way to put it, Italy. Bob Sikorski, he's the chief medical officer at Saro. He noted that the cases that have caught media attention, such as Capricor and Unicure, have been in later stage trials. Whereas, Thero, their experience with the FDA was in an earlier stage trial. So that could be another difference. because if you're in a later stage, then you have been getting advice from the former FDA. if you're earlier in the process, then you could have just been working with the current FDA leaders. Yeah, so mean, anyone I've talked to says communicate often and early with the FDA. Communicate as often as you can on Zoom, in person, everywhere. That's what it is, right? Wherever the FDA falls on that spectrum of meeting unmet need and giving flexibility to be able to do that and demanding rigorous trial results, what's really needed to help the industry move forward is clarity on expectations. I think that's starting to come to light and that harkens back to what you were saying, Anna-Lee, about the regulatory overhang starting to lift going into this earning season. feel like the industry is feeling that, is seeing that, although there are still these question marks such as who is going to be leading CBER in a couple of weeks' time. Yeah. Well, I guess we will know soon. Turning to data, with AACR coming up this weekend, several companies, including Idea and Servier and Allergy have gotten a head start on reporting positive data for their candidates this week. But the biggest win of all belongs to Revolution. Yeah, this truly may go down as the most exciting clinical trial results of the entire year. RevMed, as they're called, reported a doubling of survival in advanced pancreatic cancer on Monday. The drug, Diraxon... This is a tough one, we haven't done this one before. Diraxonracib? Okay, Diraxonracib. Targets cancers that are driven by RAS mutations. So this is kind of a... leading on from some earlier medications that are already approved that do tackle RAS mutations. But this disease is so hard to treat. Pancreatic cancer is usually caught really late. It rarely shows symptoms until it's pretty advanced. The five-year survival rate across kind of all detection stages is about 13%. It's just a really difficult disease. So this community has really desperately needed some new options. you know, so this was super exciting. RevMed's shares rose about 40%, probably even higher on this news. And they plan to move really quickly to get this data to the The FDA has already granted a commissioner's priority review voucher, which could cut the review down to about one to two months. So this could be a really fast process and this could be in patients' hands very soon. Very good to see some good news for these patients. Yes. know, like biotech has had a pretty tough time in the past couple of years and this is what this industry truly does best and we really, you know, it's just great to see good news. seeing the money and then we're seeing what the money is doing, which is really good for biopharm is, you know, perception and just for us because it makes it really fun to write about and talk about. Well, that is it for us for today. Annaleigh, Godspeed, enjoy your trip and we'll see you all next week.