Latest / BioSpace / J&J’s disappointing Q3, RevMed’s subgroup data, BMS’ ‘mixed’ results, Caribou’s cutback
Transcript
- Jef: Hello, and welcome to Biospaces the Weekly. I'm your host, Jeff Axt. Third quarter earnings are officially underway with Johnson Johnson kicking things off on Tuesday. The pharma did squeak out revenue that bested consensus expectations by 4%, but investors were disappointed by lackluster growth on the medtech side, as well as Johnson Johnson's reliance on older drugs for the bulk of their innovative medicine sales. So we'll unpack that report for you today as we look ahead to the rest of earnings season, which is set to ramp up over the next few weeks. One company that analysts are closely watching is Revolution Medicines, which last week saw its stock dip after the FDA shared some data for its newly approved pancreatic cancer drug. Apparently, some subgroups of patients in that trial did not fare as well as others. gabby: I Jef: Over at Bristol Meyer Squibb, meanwhile, a couple of late-stage readouts made headlines this week. The pharma scored a clean win for a radio pharma therapy it picked up in its $4 billion buyout of Ray's bio a couple of years ago, but its pulmonary fibrosis asset yielded mixed results. Finally, CRISPR Biotech Caribou, one of the many companies spawned by CRISPR pioneer Jennifer Dudna, is winding down operations. Let's get started. Hi, how's everyone doing? Heather, how are the baseball playoffs going? Cause I am now totally Heather: He Jef: out of it with the Braves out. Heather: They are going well, actually. They're going well for the Milwaukee Brewers, which I'm sure Jef: Okay. Heather: Gabby is also quite happy about. Jef: Okay. Heather: Milwaukee took a 2-0 gabby: Yeah. Heather: lead over the Dodgers yesterday. so that was great to see. and also the Cleveland Guardians, they won the first game of their AL championship series over the Tampa Bay Rays. so Cleveland is also the team I'm going for. So Jef: Anybody but the Dodgers, right? Heather: I mean anybody but the Dodgers. You know, I I wrote this this editorial last week, kind of based on our our podcast last week in the conversation we had, comparing the Dodgers to Eli Lilly, kind of both champions of their industry. And i it actually made me think more objectively about the Dodgers and the fact that they're actually a really good team and that they're doing a lot right. And and so I I I wasn't thrilled with that result, but Jef: Ha ha ha. Heather: Anyway, so yeah, their baseball playoffs are going really well, but ask me next Tuesday, we'll see. Yeah. Jef: Okay, I will. I will. I like I said, I'm totally out. I follow the Braves and that's about it. So with them out, I have moved on. It is October, so I've started watching scary movies. I watched it for the first time Heather: Mm-hmm. Jef: over the weekend, and I just started Alien. I can never get through a full movie in a night because I have like an hour before I turn into a pumpkin after the kids go to bed. But what are your all's favorite scary movies for Heather: Yes. Tim. Jef: this month? Annalee Armstrong: My absolute like number one must-watch for the Halloween season is Cabin in the Woods. It is, in my opinion, the best horror movie that has ever been made. and I would recommend anybody who has not seen it, you have to watch it. gabby: That's a funny movie, right? Heather: Mm. Annalee Armstrong: Okay, I love like kind of silly horror. So like this Heather: Hmm. Okay. Hmm. gabby: Yes, okay. Annalee Armstrong: one crosses both like the actual horror, like you there's a little bit of gore, there's like you know, there's a major twist, but it's also kind of funny. So yeah. gabby: recently I watched Obsession, which is very good. If you haven't seen it, you definitely should watch it. It's like kind of a satire commentary on incel culture, but it's also an excellent horror movie. Heather: I I don't watch horror movies very often. I you know, I a Garfield Halloween might be the the the scariest that I get. but I Jef: Ha ha ha. Annalee Armstrong: Do you do the peanuts one too? Heather: yes. but I do Jef: Perfect. Heather: remember enjoying in a theater I saw this one, I Know What You Did Last Summer. Annalee Armstrong: yeah, yeah, yeah. Those yeah. I love Jef: Classic. Annalee Armstrong: the those classic ones too. Heather: I remember jumping out of my theater seat at one point. Yeah. Annalee Armstrong: Yeah. Yeah. My other Jef: Speaking of those like of parodies of horror movies, Emily, have you seen is it called Behind the Mask? Is that the right one? Where he's Annalee Armstrong: I haven't seen that one. Jef: it's I it's been years, decades, I need to look this up to confirm it for you. But it's another one of those that's like a it's kind of horror, but it's kind of a little off the side, kind of like the making of of of a murderer, I guess. to to for lack of a better way to describe it. Annalee Armstrong: Yeah. My other like Halloween recommendation is The Leprechaun, the original one, also an amazing movie. gabby: What? What? It sounds like a Saint Patrick's Day. Sounds like a Saint Patrick's Day movie. Annalee Armstrong: What you've never seen? Yeah, yeah, I know, but it's I know Jef: I was gonna say I don't I've never even heard of that one. Heather: Yeah. Annalee Armstrong: it's like you can watch it in St. Patrick's Day or Halloween if you want. Like there like I don't know the many other St. Patrick's Day movies though, besides that one. gabby: I've just never heard of it. Annalee Armstrong: You should watch it. Heather: Yeah, neither. Annalee Armstrong: It's like Jennifer Aniston's Jef: No, I haven't heard of it either. Annalee Armstrong: it's Jennifer Aniston's like first film role. It's amazing. Jef: I'm gonna add it to my list. Heather: that would be interesting gabby: Wow, okay. Heather: to see just for that reason. gabby: Yeah, top of the limits. Annalee Armstrong: Another cheesy horror. Jef: And here, I found Behind the Mask. I was right. It says Behind the Mask takes place in a parallel world where scary movies live. Check it out. Annalee Armstrong: Ooh, Heather: That does sound kinda cool. Annalee Armstrong: okay. That might be right up my gabby: Okay, so we have Annalee Armstrong: alley. gabby: we have a lot of recommendations. We'll circle back next week and review. Jef: Yeah. Heather: Yes. Jef: Sounds good. but for now I suppose we should get to our show. Let's start with some introductions. Heather, you want to start us off? Heather: Sure. I am Heather Mackenzie, senior editor here at Biospace, and I am in charge of Codica Space, which hits your inboxes every Monday morning. Jef: Thank you. And Annaline? Annalee Armstrong: I am Annalie Armstrong, senior editor at Biospace. I'm just fresh back from a little vacation and ready to dive into earnings, which will be coming up in the next few weeks in Biofarm Executive, which hits your inboxes every Wednesday. Jef: And last but not least, Gabby. gabby: feel like earnings gives spooky season a whole whole new meaning. but Annalee Armstrong: Yeah. Jef: Yeah. gabby: I'm Gabrielle Mason, senior editor with Biospace, and I put together our daily Gene Pool newsletter and our weekly manufacturing brief, which goes out on Tuesdays. Jef: Once again, I'm Jeff Axt, Managing Editor. So as we have stated several times already on this podcast, first up we have earnings. So J and J, as always, is the first report. They kick things off on Tuesday. Annalie, you are on that call. What can you tell us? Annalee Armstrong: Yeah, so the medtech unit, as you kind of hinted to already, Jeff, really kind of stole the show. Not in a good way. so this segment underperformed consensus estimates by about two percent. they achieved just 2.5% growth for the quarter. So that seemed like a pretty small you know, miss for J, but I think with a company that large, any kind of small result that wasn't as expected can really set things sideways. I'm not gonna go into a ton of detail on exactly what happened there. That's kind of outside of our biospace universe. But what I can tell you is that executives admitted that it was a disappointing result, and they promised to kind of write the ship there. So that kind of left the innovative medicine segment really holding down the fort for J. the segment had nearly 8% growth for $16.75 billion in the third quarter. that was in line with analyst expectations, that was all fine. But investors were kind of disappointed in some of the real nitty-gritty results there. they felt that some of JJ's newer products were not the ones that were really contributing to that. it was really older medicines like Stellara and Tremphya that helped kind of bring that result home. investors really would have liked to see some of the newer medicines that have been approved be larger contributors to that as JJ is kind of looking at some of their patent expiries, particularly for Stellara. So one of those new medicines, Tech Vale, that actually just moved up to second line treatment in multiple myeloma earlier this year. investors are really excited about that medicine and they would have hoped to see a little bit more there. That said, the drug did grow 77% in the quarter thanks to that FDA nod that gave them another line of treatment. Jef: I love these expectations. Like they want to see more. Seventy percent seventy seven percent year over year growth. Like, come on. Annalee Armstrong: I know, I know. I mean, it speaks to their launch success. you know, in in terms of tech value, it was already on the market. so maybe analysts kind of expected that to go a little bit quicker. but you know, executives also mentioned that something like 80% of patients with multiple myeloma take a J and J drug at some point in their cancer journey. So like that number really stuck with me. They're really the market leader in this specific cancer indication. So another big product that investors were really interested in is Ichotide. That was approved earlier this year for plaxoriasis. that's something that J and J is hoping is gonna be a major product for them. They have said that it could reach sales of ten billion dollars eventually. they did not give specifics here as that drug just launched, but that's another one that analysts are really watching closely. Jef: Right. Well, next week we will have Roche reporting. That will be on Thursday. And then it's actually the week after that that things really heat up. There'll be 11 companies reporting in three days. So stay tuned to biotech or excuse me, stay tuned to Biospace for all your biotech news. And actually, Annalie, you published just today on Tuesday as we're recording an earnings preview that kind of takes a look at some of those companies that are gonna be most watched. So check that out as well. So as I mentioned in the show intro, one of those companies is Revolution Medicines. The biotech will be reporting the initial launch numbers for its newly approved pancreatic cancer drug, Razon Q. Truest analysts think this will fall short of the $20 million consensus sales for the drug for Q3, but still thinks that Razon Q will hit 100 million by the end of the year and projects peak revenue of three 13.8 billion. So clearly a blockbuster here. But in other RevMed news, the company did take a bit of a hit to its stock last week. The FDA released some data from the trials suggesting that Razon Q was less effective in certain patients. Heather: Yeah, I was just thinking I'd love to see RevMed and Razon Q actually hit these sky high expectations. I mean, talk about expectations. But yeah, so over overall Rason Q, which was approved last month, like you said, Jeff, had a 33% overall response rate across all K RES mutations. but when you dig deeper, patients who had tumors with a G twelve V mutation. and that was 36% of the study, saw a great overall response of of 50%. But that was basically cut in half for patients whose tumors contain a G12D mutation. So these people representing 43% of the trials population had just a 24% overall response rate. so yeah, so rub bed stock dipped by 6% at one point. but analysts don't seem too concerned. in fact, they are still expecting a record launch for Reson Q. True Securities analysts called the FDA release quote, a small crack in the data, end quote, that would be unlikely to change RevMed's market trajectory in the long run. Jef: Yeah, those are the really big ones. And then there was a really small part of the trial as well. I think like 7% of the overall. No, no, 7% was the overall response rate. I'm just looking this back up because I remember it was fewer, a smaller subgroup, but an even weaker overall response rate. So it's interesting because that's quite the range, just depending on which mutations the patient has. So I think that's really gonna differentiate you know, the clinical care for who will receive this drug. but as you said, analysts aren't super concerned that it's gonna make a huge hit on sales of the drug. I mean, this is a area of huge unmet need and this drug doubled pancreatic cancer survival in its one of its readouts earlier this year. Heather: Right, and and some people with those mutations do still respond, but from what I read, analysts were saying that it it does open the door for companies who are creating drugs for the G twelve D mutation and and these other mutations. Jef: Well, maybe that's almost a good thing. I mean, we want to incentivize more drug development in this space. So leave that door open. Heather: Mm, definitely. Jef: Alright, well, moving on. next up to discuss is Bristol Meyer Squim. The farmer has dealt with some challenging news lately. We've talked a while back now about the pause of those CAR T trials and autoimmune indications over safety signals. And then there was a death due to liver injury in the company's phase three clinical program that was testing its pulmonary fibrosis candidate. Admiral parent? Am I saying that right? Admilparent? close enough, I guess. so this week we got some more data from that program and it was mixed. So the low dose hit its primary endpoint, but the high dose was not able to achieve achieve statistical significance for that endpoint. gabby: Yeah, this drug name is one that I have seen misspelled by so many analysts and just authors alike. So I it's our best guess how it's pronounced as well. but it's an LPA1 antagonist, and it improved exhalation capacity for patients with idiopathic pulmonary fibrosis at its low dose of 60 milligrams. so that cohort met the study's primary endpoint, but the drug didn't reach statistical significance at its high 120 milligram dose, which prompted Lee Rink to call the results kind of mixed. notably, BMS didn't, you know, provide specific data behind the outcome. So all analysts were basically like, we are waiting to see the rest of the results, or you know, the further data to better understand the drug's efficacy. William Blair was more bullish, and they did say that, you know, they believe the low-dose success is likely to open a blockbuster opportunity for BMS since it's a novel mechanism and the toxicities don't really overlap with currently approved therapies. so again, BMS didn't provide safety specifics either, but they said that the drug was well tolerated across both doses. That's Pretty key because earlier this month reports broke that there had been a death and liver injuries in the drug's kind of broader pulmonary fibrosis program. Annalie, I know you reported on that. What happened there? Annalee Armstrong: Yeah, so this was a kind of concerning story that emerged. BMS reported that there had been a death due to multi-organ failure after acute liver injury in the kind of broader clinical program for this drug. These drug the these deaths and these injuries have not actually been definitively linked to the treatment. There is still a lot of kind of investigation to go on there. BMS management told William Blair that the deceased patient was in the 120 milligram treatment arm, and that a committee had actually determined that that was not related to the the study treatment. There were also kind of a limited number of liver events that were observed in the overall aloft program, which BMS told us most of those cases were mild, they were linked to other medical conditions, or or they were in patients who. We're taking other medications. So there's kind of a lot to unpack there. but BMS has really stressed that they do not believe any of these are related to the treatment and the studies are ongoing. gabby: And again, those are just things that like will become much clearer once we have the detailed data behind it. Annalee Armstrong: Yes, exactly. Jef: Right. Yeah. So we'll wait await that. obviously, as we've said, kind of a mixed bag there for how it will play out for BMS. But the pharma did have a big clear win on the same that they announced the admiral parent data. They also released a phase three readout for a radio pharma therapy that the company had picked up in its four point one billion dollar acquisition of raised bio a couple of years ago. gabby: Yeah, and this was interesting because it seemed like BMS was the only pharma that was kind of dropping news on Monday because it was Columbus Day or Indigenous People's Day. and it seemed like BMS was just the only kind of active party. yes, Jef: Certainly the biggest news of the day that day. gabby: definitely, definitely. so this asset was from Raise Bio. it's called RYZ 101. and then it was the centerpiece of their raise bio buyout. So the radiopharmaceutical asset hit the primary endpoint of a phase three trial improving progression-free survival for patients who have a rare type of cancer that typically forms in the gastrointestinal tract. Again, BMS didn't provide the data behind the wind, but they said they will be sharing details at an upcoming medical meeting. And then the asset. RYZ 101 does have orphan drug status from the FDA. They received that this summer. So, that's based on a significant unmet meet need in that patient population. So BMS said that they plan to, you know, based on the results and that status, they plan to talk with the agency now about next steps for a potential regulatory submission. Jef: And these are things that analysts are watching really closely, because as you wrote about a couple of weeks ago, Gabby, BMS is facing major patent cliffs as a lot of big pharmaceutical, but BMO capital markets actually weren't so convinced that BMS had their ducks in a row to meet that dip in revenue that might be coming from that patent cliff. Whereas they were, you know, more bullish on Mercs, for example. So BMS definitely under the microscope. What can they pull off to kind of fight some of those impending loss of exclusivities? All right, on the biotech side of things, a handful of companies had have have had a very hard October. So earlier this month, we covered Adecto Pharmaceuticals and Aviceda therapeutics. Both of these are completely exiting the biotech scene. And now famed CRISPR Biotech Caribou appears to be following suit. gabby: Yeah, so Caribou was co-created by the CRISPR Icon, Jennifer Dudna. and it they've been on the scene since 2011. So a pretty long time for biotech's, you know, standards. The Car T Biotech even has secured several big pharma partnerships since then and is pretty prominent in the space. So it was really surprising last week when their CEO, Rachel Horwitz, announced on LinkedIn that the company has taken a heartbreaking turn and is discontinuing its entire clinical stage pipeline and conducting significant layoffs. We later learned from a state warrant or state warr notice that the cuts are impacting eighty seven employees, which is believed to be the vast majority, about ninety percent of its workforce. so the Caribou cited the current financing environment for allogenaic RTs as the reason for the strategic review and you know the layoffs. So really kind of sad to see. They said that it did not reflect their belief in their science and in their assets. so it will be interesting to see what happens to their pipeline there. Annalee Armstrong: I still remember Jef: Yeah. Annalee Armstrong: when Caribou released like some of their first data and it was very promising. And then they kind of had, you know, the durability declined over time and they also had to kind of they kind of went through the oncology versus immunology switch as well. So it's been a really long journey for them. Jef: Overall, I mean, I have to believe CRISPR is here to stay. You know, we've seen some really good successes with that technology, but it's it is hit or miss and especially seeing caribou go down like this, it's you know, reason to be cautious in this space for sure. Well that's our show for today. Thank you for listening. As always, don't forget to like and subscribe on all your favorite podcast channels, and we'll see you back here next week.