Latest / BioSpace / Novo’s canned heart disease trials, Novartis’ clinical fails, first approval for Alexander disease
Transcript
- Jef: Hello, and welcome to Biospaces the Weekly. I'm your host, Jeff Axt. We started this short week with a handful of high-profile trial failures, including two from Novartis. The first was a phase three test of one of the farmer's main bounties from its $12 billion biote out of Abidity Biosciences. So that biote happened last year, and just on Tuesday, the asset Dell Deseran failed a late-stage study in myotonic dystrophy type 1. And Novartis reported disappointing results for a phase three study of its cholesterol-lowering asset. So together, those two trial failures made for a bad day at the Swiss pharma, whose stock plunged 12% in pre-market trading on Tuesday. Meanwhile, Novodortis is also having a bad week. On Tuesday, they ended two late-stage studies for its investigational IL-6 inhibitor in cardiovascular disease. These early terminations came because it doesn't look like the trials are gonna do any better than the Zeus trial that had failed earlier in the summer. So this is now raising questions about whether IL-6 is even a valid target for chronic cardiovascular disease. So we'll discuss that. We do have some happier news this week. Patients with Alexander disease now have a disease-specific therapy thanks to the FDA's approval late last week of Ionis's Zanvasto. And also Unicare has finally filed for approval of its Huntington's disease gene therapy. And outside of these rare disease highlights, the biotech market environment has been looking up, with that long-awaited post-pandemic rebound finally here, it seems, at least according to one analyst group. Truist securities pointed to abating regulatory risks and increasing MA fundraisings and IPOs. As signs that biotech is back with sunny skies ahead. Let's get started. Hi guys, a lot to discuss this week. I hope you rested up over the long weekend to hit the ground running today. Heather: Well in instead of resting up, I actually went to a Power Pilates class yesterday morning at nine a.m. with like 20 other people in my town who just wanted to do that. So Jef: Well, as we discussed just a few weeks ago, exercise can be as invigorating as sleep. So there you go. You're ready. Heather: True. I was invigorated all day and today my muscles hurt. So Jef: Ha ha ha. gabby: I knew it would be a little difficult getting back into the swing of things after seven days off, but this this morning was super busy and it's been a little Jef: That's gabby: more than I anticipated. Annalee Armstrong: We really like to throw you right back into it, Gabby. Yeah. Heather: Yeah. Jef: Yeah. gabby: That's the biotech world. We all love it. Annalee Armstrong: And for me, the first of the very many school plagues has hit after my kids have been back to school for Heather: Mm. Annalee Armstrong: a whopping four business days. So I am feeling not great, but I'm here. Heather: Annalie, you said that it's it's Jef: Fall is rough with that. Heather: Annale, you said it skipped you and went right to you and your mother in law, right? Yeah, yeah. Annalee Armstrong: My mom, yeah, yeah. My kids didn't even get sick. They had like runny noses and I was like, maybe they're getting something, but they just have been full power. So it just skipped right along and and arrived at me and my mom. So yeah. Heather: Yeah. Yeah, that's Jef: That's how it goes. Whether they get it or not, it's always short lived compared to what we experience. Annalee Armstrong: Totally. Jef: All right. Well, we've got a lot to discuss today, so why don't we go ahead and get started? let's start with some introductions. Heather, start us off. Heather: I am Heather Mackenzie, senior editor at Biospace. I'm in charge of the Clinica Space newsletter, which hits your inboxes every Monday except for today, which is Tuesday as we're recording because yesterday was a holiday. Jef: Thank you. And Gabby? gabby: And I'm Gabrielle Mason, senior editor at Biospace. And I curate our manufacturing brief, which went out today. It goes out once weekly on Tuesdays, and then also our daily Gene Pool newsletter. Jef: And last but not least, Annalie. Annalee Armstrong: And I am Annalie Armstrong, I am senior editor, and I do the weekly Biofarm Executive newsletter, which hits your inboxes on Wednesday mornings. Jef: All right, and I once again I'm Jeff Axt, managing editor, and let's get into this. So, Novartis, first up. As I said, Novartis suffered two clinical setbacks this week. First, let's discuss the phase three results for Dell Deceran. This is the one I mentioned was part of the $12 billion buyout of Avidity Biosciences last year. This is an investigational antibody oligonucleotide conjugate. It's being tested for myotonic dystrophy type one. And in this readout that we got just on Tuesday, the drug did not significantly improve hand opening time in the late stage study, leading Oppenheimer to call it a twelve billion dollar disappointment. So definitely not great news for Novartis. gabby: yeah, so no Bardis did say that the drug showed, you know, evidence of clinical activity on secondary and exploratory outcomes, but the company didn't really share any specifics behind that claim. So now they're set to meet with regulators to kind of figure out what or even if there's a path forward for the drug. Heather: Yeah, this readout has been anticipated for a long time. back in in April or May, I spoke with Oppenheimer's Costus Belorius about the space, and he told me that this readout for Dal Dissaran could pretty much quote make or break the Avidity by for Novartis. he also said that the trial's end primary endpoint, which is V Hot, the the video hand opening time, was very, very noisy and that the very large variability across patients and trials can really impact your trial outcome. So it looks like Costus might have called it. Jef: Yeah, that was a make or break, that's definitely a break. That explains Oppenheimer's twelve billion dollar disappointment comment. Heather: Yeah, he said it was basically eighty percent of the acquisition. that's what he was putting it at. So yeah, this is a big hit for them. Jef: Yeah, so that one may be the worst news for Novartis in terms of showing a return on its investment. but there was also disappointing results for a phase three study of a cholesterol lowering asset that actually might be a bigger blow to the wider industry. It's now throwing into question whether lowering lipoprotein A can translate into cardiovascular benefit. So Novartis's antisense therapy, they call it pelicarsin. It did successfully lower lipoprotein A levels in earlier studies, but it showed no benefit on cardiovascular risk in this late stage readout. gabby: So this is one of six recent major cardiovascular fails for biopharma over just the last nine weeks. specifically Novartis's anti-sense therapy, pelicarsin, it didn't show any benefit on cardiovascular risk. The drug is designed to lower lipoprotein A levels. And it's it's meaningful setback for therapies that are dedicated to. LPA reduction, and that's according to BMO analysts. So that that kind of being said, there are certain study design differences preventing complete invalidation of LPA as a therapeutic target. Other main players in the space are Lily and Amgen, both of which have SIRNA therapies that are designed to lower LPA expression and those are both in late stage trials. but Novartises fail just raises the burden of proof for both pharmas, according to BMO. Merck also has an LPA inhibitor that they're advancing with its China partner Hungru Eye. So the industry will definitely be closely watching these companies for upcoming readouts on their assets. And the bar is definitely higher now. Jef: Agreed. Yeah, this was definitely a focus, a a focus target. So I'm interested to see how these other readouts come out. gabby: Yeah, definitely. And investors weren't super thrilled with, all of these as a collection of fails, the two clinical fails, and then this also follows Novartis's announcement of three deaths last week, linked to its investigational CAR T therapy Rhapsell. which I know you all kind of talked about last week's podcast. Jef: Yeah, that was definitely the big news of last week. So not a good time for Novartis. gabby: No, and as of Tuesday, midday, their company stock is down at least thirteen percent, which is pretty substantial for, you know, a huge pharma like Novartis. Jef: So yeah, not a good week for Novartis, but also not a great week for Novo Nordisk. On Tuesday, the same day as those Novartis fails, Novo announced that it is ending two late stage studies for its investigational IELT inhibitor. Ziltevecimab. the the phase three heart studies were called Hermes and Athena, and they were reviewed by a data monitoring committee that determined they were unlikely to succeed where the Zeus trial had failed. So Nova reported at the end of July that that Zeus study had failed to reduce risk of cardiovascular events, and now with the dropped Hermes and Athena trials, Oppenheimer analysts are saying that it now looks like IL six may be an invalid target for chronic cardiovascular disease. So cardio definitely striking out this week. gabby: Yeah, so the pharma's decision to shutter the studies early was based on a recommendation from a data monitoring committee. and it was based on the kind of totality of data, which also included the low likelihood of a different outcome from Zeus. So it included, kind of that futile result from the last trial as well. Jef: Right. I think that was definitely the the the kicker. And like I said, this cardio space really struggling. You mentioned earlier, Gabby, that we've had six major fails in the past nine weeks with all these additions. So we've got the now from Novartis, from Novo, in addition AstraZeneca and Ionis released their disappointing results for Wynua this summer. We've talked a lot about those. That had that drug failed to help patients with ATT R CM. And plus that, like I that Novartis study that adds up to six in just nine weeks, a string of failures that Oppenheimer is saying is producing this narrative that cardiovascular outcome trials are potentially unwinnable. You know, the the analysts say it's nuanced. There are some differentiating factors, as you talked about in the last segment. So hopefully we do get some more positive readouts from those ongoing trials. But with these with these flops this week, again, it's just not. It's looking like a really tough space and one that we're gonna have to look a little bit more detail into what's working and what's not. So let's let's move on to slightly happier news. we do have a little bit of good news for you in the rare disease space. We also have some bad news, but let's start with the good because the show's been a little bit of a downer so far. Heather, give us some good news. Heather: Yes, happy to. so patients in families with a an ultra-rare genetic condition got their first targeted therapy last week on Thursday. so the FDA approved Ionis zilkinersin, which is now Xenvestro, to treat people of all ages with Alexander disease, or AXD as it's also commonly called. So AXG is a it's an extremely rare leucodystrophy. It's caused by changes in the GFAP gene that lead to its overproduction of the corresponding protein and therefore toxic accumulation in glial cells. So there's a scientific explanation. And Zenfastro is an anti-sense drug that binds to the RNA to decrease the body's production of this protein. So people with AXD, they can have cognitive and motor dysfunction, a loss of independence, and the inability to control muscles for swallowing, airway protection, and purposeful movements. it's almost always fatal. Holly Kordazowitz, head of development at Ionas told me that. So aside from helping patients, this is actually a pretty big approval for Ionis because it represents their first independent launch from their neurology portfolio. Jef: Yeah, definitely good news for patients. Really, really tough disease there. And yeah, interesting to see Ionists go out with this one on their own. You know, they have some partner drugs, but this is we we've been seeing more and more companies go out commercialize their own drugs as opposed to partnering with Big Farmer to do it. So that's will be interesting launch to watch. I'll also add in, you know, while we're on good news and rare diseases, Unicare did finally file for approval of its Huntington's disease drug, the gene therapy that has been the focus of much controversy. We thought this might happen much earlier, but former FDA Commissioner Mar McCary, along with former CEBR director of an I Prasad, kinda put this one through the ringer. Heather: Yeah, so both Prasad and McCary fairly publicly criticized AMT 130, and it was part of a round of rejected or discouraged therapies that appeared to be given a second chance after those leaders left the FDA this spring. just important to note that Unicure did not previously. file for approval of the gene therapy. but the FDA reversed its original guidance to the company that data from its phase one two trial would be sufficient for a BLA submission. They then reversed that position again after McCarry and Prasad left and Unicure has submitted an application. So Godspeed Unicure. Jef: Right. Yeah, this was the one where they were wanting a sham controlled surgery, a sham surgery controlled phase three, but it sounds like they will potentially at least consider this BLA. So it's been submitted. We haven't heard from the FDA yet whether it's accepted. We can hope. I am definitely grateful for these little bits of good news. But as I said, we also have some bad news in the rare disease space. So Hella Heather, fill us in on that. Heather: Yeah, so that actually came from ultragenics on Wednesday, and that was just the the day before the Ionis approval. Ultragenics' Angelman syndrome therapy at Peso Nurson, is also in anti-sense therapy, and it failed to improve cognition in a phase three trial. so this was a big bet for for ultragenics, and the company was hit hard by this news in the market. Ultragenics said in the announcement, their announcement of the of the trial fail, that they would, quote, assess their planned operations to define and implement significant expense reductions, and that they would focus on their commercial business. But all is not lost on the RD side for ultragenics. the company has an upcoming FDA decision for its San Filippo syndrome candidate, UX111, on September 19th. Jef: That's right. And the ultragenist also just got another approval, right? That one was for glycogen storage disease type 1A. Heather: They did. And an analyst at T D. Cohen have said that the that that approval actually de-risks the San Filippo one. so I think Wall Street might be being a little bit tough on ultragenics. Jef: Right, well yeah, we'll wait for that decision just in another nine days, ten days or so. and then as we wait for that that decision and to hear whether Unicure's filing has been accepted. They filed, I guess, both with the FDA and the UK, so we'll wait to hear both of those. But I guess not so bad in all in the grand scheme of see things, especially compared with those kind of major fails that we talked about at the top of the show. That was really The tough part of this week, especially in the cardio space. But to keep things on the more positive note, let's talk about the business environment a little bit here, because for once, this is actually a positive report. We've been reporting for months now on the uptick in MA and IPOs and VC funding. We actually had a handful of new raises just this week already. So overall, things have definitely felt more positive recently, especially coming off that prolonged down market following the bursting of that COVID bubble where in money was just flowing into the space. And now truest analysts say that the sunny environment is here to stay. Annalee Armstrong: Yeah, I know we're not used to having good news around here, but I thought that this note from Truist really stuck out in my inbox because it was good news. So the firm's analysts believe that the performance of the biotech sector of the past 18 months has, and I quote, more than made up for a challenging two-year period. so they are seeing regulatory risks abating, more MA. A lot of fundraisings, which I think anecdotally we can all confirm. That's been happening a lot. We've been seeing more of those on our news page. there've been IPOs, of course. Gabby has done a ton of reporting on that scene, and there's just been a lot more positive indicators. So Truist believes that the industry really has smooth sailing for the rest of the half, which is super positive news. Jef: Absolutely. Yeah. more IPOs. IPOs doing well. it's finally all that cautious optimism from the past few years is turning into something as opposed to just cautious optimism not turning into anything and and feeling misplaced. So yeah, the rise of biotechs public is particularly notable. and it's not just via IPOs. Gabby, you reported on a striking uptick in reverse mergers, up sixteen hundred percent just in the third quarter so far, since we haven't even completed the third quarter as compared with the total number for the second quarter of this year. gabby: Yeah, I'd be okay if I never heard the phrase cautious optimism again, but it's we're definitely Jef: Yes. gabby: in a good place now. And so yeah, I Jef: Yes. gabby: I looked at a very specific part of the industry, and that's the rise of reverse mergers. So, traditional IPOs often grab the most attention, but biotechs are increasingly taking the reverse merger route to go public. so basically the same number of reverse mergers as IPOs have occurred this year. All but two of the 19 reverse mergers have happened in the third quarter so far. And like you said, it hasn't even closed yet. we're still in the third quarter. So that number can still go up. I spoke with Jack Bannister. He's the senior managing director of equity capital markets at Lee Rink. And he he said the IPO process can be a little bit like a black box for investors, which I thought was really interesting. Sophie Nova's investment general partner, Maha Katabi, explained that you don't really know until the day an IPO price is if it will be successful or not. In comparison, a lot of disclosures are required for reverse mergers, kind of throughout the process, since one company is already public. Investors know who they're investing alongside. There's more visibility in how the deal will play out. so all of those kind of go into the the de-risking of the deal, I suppose, for investors. the uptick in reverse mergers is part of an overall increase in deal activity, like you mentioned, Jeff, that we've just been seeing this year after the extreme lows that followed the industry highs that were tied to COVID. Jef: Yeah, that's a really, really interesting story. Definitely learned a lot with that one, so check it out. And then Annalie, you've got a feature on crossover rounds for Biofarm Executive this week. Are we seeing a similarly positive trend there? Annalee Armstrong: Yeah, absolutely. Maha Kitabi, also Sophie Nova general partner, told me that she began to see this trend rising with more crossover rounds happening around the fourth quarter of 2025, which then of course immediately following, we started to see a rise in IPOs. so Pitchbook thinks this is going to be a pretty good year for crossover rounds. These rounds are the fundraising round before a company goes public, and they kind of predict. Predict the next few months of IPOs. So if the trend holds, Pitchbook thinks that we could see about $4.2 billion across 28 rounds, which would more than beat 2025. But I think what's really interesting is in talking to Pitchbook, despite the IPO window snapping shut after that kind of pandemic sugar rush, as you've referred to, Jeff. Crossover rounds have really stayed steady, which indicates that these investors stuck around even though the market kind of turned sour on them. They just kind of changed how long they were willing to wait for the IPO to actually happen following that crossover round. So we take a look at those trends in Biofarm Executive this week. Definitely check it out. Jef: Interesting. Okay, very good. Well, yeah, lots going on in terms of the overall funding environment. Like I said, all those raises that we've just been covering this week, all the way through to going public. there's really positive momentum here. So hopefully that trend holds despite some disappointing clinical readouts of late. But that's it for our show for this week. Don't forget to subscribe on all your favorite podcast channels and we'll see you next week.