BioCentury This Week

Ep. 321 - Pfizer’s Obesity Play & U.K. in Focus

• BioCentury • Season 6 • Episode 321

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A takeout that could be worth as much as $7.3 billion has Pfizer back in the obesity drug development race. On the latest BioCentury This Week podcast, BioCentury’s analysts discuss Pfizer’s acquisition of Metsera and its obesity assets. Plus: Editor in Chief Simone Fishburn gives a recap of BioCentury’s Grand Rounds — Europe meeting, which included a fireside chat with Patrick Vallance on the state of the life sciences ecosystem in the country. The BioCentury analysts also assess the state of hot-button policy issues in Washington, such as drug pricing and China. Finally, they analyze the state of play among therapies for narcolepsy on the heels of the World Sleep Congress in Singapore. Check out BIO Chairman Fritz Bittenbender’s conversation with BioCentury Washington Editor Steve Usdin on BioCentury This Week’s sister podcast, The BioCentury Show. This episode of BioCentury This Week is sponsored by IQVIA Biotech.

View full story: https://www.biocentury.com/article/657065

#ObesityDrugs #PharmaDeals #BiotechDeals #MergersAndAcquisitions #DrugDevelopment #Narcolepsy

00:01 - Sponsor Message: IQVIA Biotech
03:46 - Pfizer’s Obesity M&A
14:54 - U.K. in Focus
28:20 - U.S. Drug Pricing, China Policy
40:07 - Narcolepsy Pipeline

To submit a question to BioCentury’s editors, email the BioCentury This Week team at podcasts@biocentury.com.

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[AI-generated transcript.]

Eric Pierce:

BioCentury This Week is brought to you by IQVIA Biotech. For biotech companies striving to bring innovative therapies to market and maximize patient impact, IQVIA Biotech is the trusted CRO of choice. Backed by 25 years of unparalleled experience and deep therapeutic expertise, our full-service clinical development solutions are purpose-built to accelerate success. IQVIA Biotech helps early-stage biotechs de-risk by developing strategic clinical development plans, guiding drug candidates along the most promising pathways. Leverage data-driven models and dynamic tools to craft a compelling value story and maintain momentum through every phase of drug development.

Jeff Cranmer:

After years of falling behind in the obesity race, Pfizer is back in the game with a $5 billion acquisition of obesity startup Metsera. We'll take a look at the deal and what it does for Pfizer's. Chances to catch up to Eli Lilly and Novo Nordisk. Also on the latest by Century this week podcast, U.K. Science Minister Patrick Valance agrees that U.K. drug pricing needs a fix, but he's confident industry can come back to the table. We'll discuss why. And Donald Trump's deadline for nearly 20 biopharma companies to make drug pricing concessions is rapidly approaching. We'll get the take of the new chair of BIO on the scramble to avoid international reference pricing, And former FDA Commissioner Scott Gottlieb warns against restricting in-licensing drugs from China. Finally, what's next for narcolepsy? We look at the data from the World Sleep Congress in Singapore. I'm Jeff Cranmer, one of the executive editors here at BioCentury, and today I am joined by.

Simone Fishburn:

Simone Fishburn, editor in chief.

Steve Usdin:

Steve Usdin, Washington editor.

Lauren Martz:

Lauren Martz, executive Director of Biopharma Intelligence.

Stephen Hansen:

And Stephen Hansen, director of Biopharma Intelligence.

Jeff Cranmer:

All right. We have a, uh, packed podcast for you and, uh, it's good to have. The team back. We had a lot of folks, over at Grand Rounds, our, debut grand rounds on European soil, uh, over in the U.K. and Cambridge. But, uh, first if you could redesign FDA from the ground up, what would it look like? That's the fundamental question underlying the 2025. BioCentury's Back to School Essay authored by our very own Steve Usdin. Our Washington editor. Steve has been a leading voice on regulation and policy, for nearly three decades now. if you're interested in reading back to school, visit BioCenturybacktoschool.com for immediate access. To the eight part series. That's if you're a subscriber. Uh, if you're not yet a subscriber but are interested, a complimentary trial to BioCentury awaits, it's available via the same link, BioCenturybacktoschool.com. And that will grant you access to the in-depth data and analysis, which is essential for navigating today's rapidly evolving sector. You'll get the back to school report and, a lot of other cool stuff, including what we're about to talk about on this podcast. And that is Pfizer making its comeback in obesity. Stephen you wrote that Pfizer's kind of been in the game before, but kind of fell out of it. what happened and, and why is Metsera This 3-year-old startup, the thing that's gonna put Pfizer back on the map.

Stephen Hansen:

Thanks, Jeff. So you're right, Pfizer was, so, they were at one point one of the leading companies in obesity with respect to, uh, the small molecule race. So small molecules for A GLP-1 agonist. they had been developing a program called danuglipron. but uh, they ran into some, uh, tolerability issues with that program. And it was also, at the time, it was formulated as a twice a day pill. which I think they finally realized was not really a commercially competitive profile. so they ditched that for a follow-up program. but then that one ran into issues. So that one ran into some liver toxicity issues as we, uh, sometimes know from these small molecule, assets. And so then they moved back to danuglipron, uh, this time looking to reformulate it as a once a day pill, which they did. They moved that into phase three. but then earlier this year in April, they announced that they were discontinuing that program, also due to, uh, liver toxicity issues. So, they've had multiple goes at it in the small molecule side, but they didn't really get into the injectable, you know, peptide side of the obesity, sort of competitive race as of yet. but clearly, obviously, despite the setbacks that they saw with their oral GLP-1's, this is a pretty big move to try and, uh, sort of catch them up and get them back into the race.

Jeff Cranmer:

Yeah. Deal terms I think 4.9 billion in enterpirse value and then there's, uh, some contingent value rights. Stephen, is that correct that if those all hit, and that's not always the case if you've been following the CVR space, but if they do, I think, um, the deal would be over $7 billion. Am I correct in that Stephen? Yeah, no, that's

Stephen Hansen:

about right. It's um, you know, it's. 4.9 billion upfront. So that's what everyone's gonna be getting straight away. And then you're right, based on sort of if there's a Phase III trial start, I believe for the combination plus, if they hit on a couple of approvals, yeah, it could be another more than 2 billion on top of that for the CVR. So it's a pretty hefty, option on top of that. But sort of getting back to your question about sort of why Metsera. I mean, I think, you know, obviously it's, it's early, but the data that we have seen have, have been pretty impressive. So they have kind of two lead injectable programs, um, MET-097, which is a GLP-1R agonist but the early data we have for that, so they have, 12 week data out from that program that showed 11.3% placebo adjusted weight loss, which is pretty good for three months, especially for a GLP-1, only agonist. And then they also have an amylin agonist, uh, MET-233 which showed 8.4% placebo adjusted weight loss after just five weeks. which, you know, if, if that were to continue to trend down, you know, that's potentially a best in class, uh, amylin asset. So you have those two, uh, you know, showing pretty strong efficacy, efficacy early, plus the way that the programs are formulated. Um, they're getting pretty long, half lives, so they're looking at potentially moving to once monthly dosing, you know, which would be pretty strong so far in terms of a, commercial profile. Then on top of that, they have other follow on programs. So they have a pro drug of the GLP-1 that they're saying could be even longer than once a monthly dosing. and then they have an oral program as well. you know, we've talked on this podcast quite a bit about some of the challenges with the oral peptides and obesity. a lot of that revolves around the fact that. If they're once daily oral peptides and they come at pretty high doses, and so there are some real questions around how scalable those are from a commercial standpoint in terms of whether you could really manufacture enough API to supply a market like obesity. When you're talking about 50 or a hundred milligrams per day of a peptide. But what Metsera at least pre-clinically, thinks, kind of sets their oral program apart is that it has sort of a higher, much higher potency, better bioavailability and sort of an enhanced uptake, technology that they think kind of combined, you know, at least according to their modeling. You know, they think they can get sort of a 92% lower dose as compared to like, for instance, 50 milligram oral semaglutide, which Novo had tested in Phase III, but decided not to bring forward to the regulators because they just thought it was too high of a dose to be able to, you know, be able to manufacture. so Metsera thinks that it has an oral platform. Despite being a peptide, they think could be, commercially viable just from a manufacturing scalability perspective. So I think that's pretty intriguing because, you know, I I, if people would've picked up on, I've been pretty, uh, skeptical, let's say of the, uh, chances for an oral peptide in, in obesity. But if the data they have holds, uh, it could, could be a pretty interesting story.

Jeff Cranmer:

And, where is this one in the clinic, Stephen?

Stephen Hansen:

Yeah, so the, uh, the most advanced program is the MET-097 So it's the GLP-1 agonist, uh, they're supposed to be having they had before this deal. Metsera was expecting to announce Phase IIb data this month, with more phase two B data coming early next year. Which would likely set that program up, you know, if everything was positive, to move into Phase III, uh, sometime next year. And then they've got, the amylin program is also in Phase I/II, and a couple others that are moving as well. So I think there are four clinical programs in all in total. That are being tested right now. So, should those phase two Bs read out quite well, I mean, gets Pfizer right back into phase three pretty quickly. Um, which I think, you know, is a, is is a pretty intriguing opportunity for them.

Jeff Cranmer:

Yeah, and this is one of those companies that gets you excited about. Biotech founded in 2022 based in New York City. the company had announced two private fundings totaling, over 500 million, uh, that was last year. Went public in January, and, you know, it, it hasn't been, uh, easy sailing for, uh. For IPOs this year, but they've done well. they priced at 18. Uh, share price went up as high as, 47 40 and who'd we have in this? Was it Arch, Stephen?

Stephen Hansen:

Yeah, this was, this was one of a Arch company, uh, launched it, and I think there was others, like, um, Population Health Partners was in there as well as, Fidelity. But yeah, as you say, the, uh, the takeout price is about. 10 cents higher than their, their all time high that they traded out this year. so it, it basically, gets a takeout at what happened their all time high basically. Plus then you have the CVR as sort of the, uh, sort of the upside. frankly, I was a bit bit surprised, you know, given that Metsera was really one of the stronger, I think, obesity companies out there. But, um, maybe they just got a deal where they, they just thought this was too good to be true.

Jeff Cranmer:

well, you know, it's gotta be tough for these independents to go toe to toe commercially with Lily and Novo.

Stephen Hansen:

No, I think that's a good point, Jeff. I think that's something else is, you know, the, the amount of money that needs to be invested in these companies, not only to run the Phase IIIs, but then to invest in the manufacturing, especially if you're biotech or the amount of money that you would have to spend trying to, you know, get access to a CDMO. And I know that's already a pretty competitive space trying to buy up CDMO spaces, uh, in peptide manufacturing. So. It might've been just a situation where, um, Metsera just looked at it and said, you know, given the amount of money that we would need to invest to be competitive, maybe we're better off, you know, taking this deal with Pfizer and having Pfizer make those investments where there's, you know, maybe they have a better chance of, uh, of really being commercially competitive Here.

Jeff Cranmer:

Stephen, who else, uh, should, should folks be watching among the independents? I know we have Zealand. They have that big deal with Roche. anyone else out there?

Stephen Hansen:

Right. Yeah. I mean, I think if we're thinking strictly on M&A, might take them off the board just because as you mentioned, they had that $1.6 billion upfront deal with, uh, with Roche, uh, for their amylin program. similarly, Gubra had a deal with, AbbVie, pretty sizable deal. but others to note, I mean, I think, you know, there's obviously still a lot of attention on Viking Therapeutics. and then after that, couple other privates to, you know, consider there's Verdiva, which is doing, injectable and oral therapies. There's Kailera Therapeutics, which also raised I think over $400 million in their launch as well. And then, you know, maybe a little more if you're thinking of companies working in obesity. That aren't just obesity companies, but that might be, you know, looking at the, uh, muscle sparing, areas. You could think of a company like Scholar Rock, uh, which looks like they're on the verge of probably having a, commercial product for SMA, but then also, you know, look like they're moving towards, uh, late stage testing for a, uh, myostatin inhibitor for obesity. So, just a couple other names to, uh, keep your eye on.

Jeff Cranmer:

Sounds good, Steven. Thanks. For that. And, uh, I know a quick shout out to, uh, our colleague Paul Bonanos, who contributed to the piece. we're gonna go to a quick break and then we will be back, to bring in Simone to talk about what's going on in the U.K.

Alanna Farro:

BioCentury This Week is brought to you by The 12th China Healthcare Summit in Shanghai. From in-licensing to New cos cross-border deals from Asia are transforming global biopharma. Meet top decision makers and investors at the 12th China Healthcare Summit. To explore emerging opportunities and tackle key challenges in this rapidly evolving landscape. Join us in Shanghai, October 22nd to 24. To get a firsthand look at China's dynamic life sciences ecosystem, register and learn more at BioCentury China summit.com.

Jeff Cranmer:

We are back and partnering opens this week for our 12th China Healthcare Summit in Shanghai, scheduled for October 22nd of 24th. Register now at BioCentury China summit.com and start scheduling your meetings so you have a full dance card when you arrive in Shanghai. you can send me a message on LinkedIn if you want to apply to present, as a presenting company. We have a great class. Uh, Sobi will be there Hua Medicine. Quite a few other from the West and from China. can also send a message to, uh, me or my colleague Josh Berlin on LinkedIn If you're interested in joining the China Summit tour of Shanghai's Zhangjiang, it is quite a site to behold, and, uh, we hope to see you in Shanghai or you can register for Digital Pass if you can't make it out this year. And We are gonna turn to the U.K. now. Simone, you just came back from the motherland. Um, our grand rounds, our third grand rounds meeting, happened at your old stomping grounds, Cambridge. And how did the meeting go? And, uh, give us a few of the highlights before we dive into what, uh, the science minister is saying.

Simone Fishburn:

Thank you Jeff. Um, I will certainly go in a little depth in a couple of minutes to what Patrick Valance, who is the Minister for Science, spoke about in a, very good fireside chat with Kate Bingham of SV Health Investors and former chair of the COVID Vaccine Task Force. other highlights. We had a great, opening keynote by Steve Jackson, who is of course a pioneer in the DNA damage response. And, you know, I have to tell you, it was followed by a really good debate. The debate was with Steve Bates and Jérôme Van Biervliet. And it was on the topic that I'm gonna talk about in a moment, which is, can the U.K. is this the UK's biotech moment? And obviously there was some news in the week before that really put a lot of that into doubt. Lots of really good energy. What I wanted to say is that the U.K. got some sort of body blows in terms of. Announcements, Merck deciding to pull back on a billion dollar R&D facility. It had, I think, broken ground on now. Not gonna build that in London. AstraZeneca and Lilly following that with announcements saying they're also reconsidering their investments in the country and Sanofi piled in there as well. So, you know, when we talk to people, that was kind of, certainly a, a very big blow, but on the other hand you wouldn't know it from the energy. Like there's just tremendous energy. People really talking a lot about their science. There's really a very. high level of engagement between scientists, between investors, farmers. I mean, the, the meeting was focused on translational bottlenecks, and once we weren't talking about the policy issues, it was incredible actually. So people are not walking round with long faces at all. Actually. They were pretty optimistic about their science and their potential to actually translate that science.

Jeff Cranmer:

Uh, that sounds brilliant. Simone. Uh, I've, been hearing rave reviews from, some of the folks that, helped connect us with some of the presenting companies who were there. And, I appreciated you sending me pictures of the buttery and other cool spots where we held the meeting. But tell me a bit about this fireside chat you had with, Patrick Valance and Kate Bingham.

Simone Fishburn:

Right. Well, they call him Lord Valance over there, but we don't do that at BioCentury and she's Dame Bingham. We don't do that either. just to make it clear, Kate Bingham knows Patrick Valance very well, and so it was really a very frank, she did not hold back from asking him the difficult questions, but it was a, a very frank, he was, he was very open. He was, very articulate about their policy and. He has a background from GSK. He worked there for like over a decade and for about six years or so, he was head of R&D. So he really understands the issues the issues are as such, and I know Steve agrees with me on this, these farmers who are saying that pulling back Investment because there's not enough investment in U.K. life sciences and listing a panoply of reasons. Steve, I think we agree. This is all about drug pricing, right?

Steve Usdin:

it is obviously, I mean, the other things are important, but I always say when people say it's, uh, it's not the money, it's the principle of the thing. It's the money

Simone Fishburn:

Yeah.

Steve Usdin:

and, and that, and that, that's what it is here, you know? So as I wanna cut to the chase, you know, Patrick Valens said that, he agreed that something has to be done in the U.K. so that NHS spends more on drugs. the other way to look at it is so, so they claw back less. The question I have is, does he have the power to make that happen? He's the, he is the science minister. He is not, uh, the finance ministry, he is not the head of NHS.

Simone Fishburn:

So he obviously doesn't have the power to make that happen, but what is clear to me from conversations with various people who were in attendance, there is at least that the government has taken notice. So I was hearing that Rachel Reeves, who's the chancellor, was sending messages saying sort of explain this to me and so on. So this is, this is not something that has only gone as far as Patrick Valance. Okay. This is certainly going all the way to the top in terms of understanding its importance. you know, it was all over the papers that, I will say though, that in the days that I spent with my family and friends who are not in our ecosystem, they had no idea. So I'm not sure that the Joe public really knows, but you know, I think the main point is that Patrick Valance said. He is on the phone to Pascal. That's Pascal Soriot, of course, who's CEO of AstraZeneca. that there are a lot of backroom conversations going on right now. He categorically said that he can, you know, he thinks they can bring industry back to the table on this. I don't think anybody thinks that Merck is gonna restart, digging its billion dollar facility that it pulled back on. And that's, you know, as we've talked about partly on Merck. the real question, Steve, I mean, it's not just that Patrick balance doesn't have the power, it's really where is the money gonna come from if they've got, the money's gotta come from somewhere, if they're gonna spend more on drugs And industry's contention, which is correct and true, is that NHS spend has gone down to 9% of its spend being on drugs. Where it used to be 14 or 15%, and that's what peer countries are at. And so they're like, it's completely unacceptable that this is your level of spend and why would we carry on investing there? so the question is how are they change the V bag scheme?

Steve Usdin:

And that, and, and I would interrupt and say it's not just a matter of amount of revenues that pharma and, and, big biotech companies are making in the U.K. It's also patient access to drugs. I think patient access to drugs and, in the U.K. arguably, is worse than it is in, in pure countries. Certainly worse than it is in. the United States. And the other thing I think that's important that Patrick Valance said in, in the interview, and we've got the story, everybody should, should read it, that he acknowledged that there also, that there are geopolitical concerns that are, affecting the U.K. in particular the demands from the Trump administration. The companies invest more in the United States, and that they, demonstrate their commitment to the United States by investing in manufacturing, investing in R&D in the United States. And you know, like I said in the last time that we talked about this, it's a zero sum game. If companies are investing more in the United States, unless their, global markets are increasing, and global revenue's increasing, which for many of these companies certainly isn't the case. they're gonna have to cut back somewhere. So for the U.K. to be competitive, to get a piece of that action is gonna become increasingly difficult. And they're gonna have to make it worth it, to these companies.

Simone Fishburn:

Right. And so, and you know, you wrote about that previously, like Merck at the same time as pulling back in the U.K. has invested a certain amount in the U.S. but to your other points. Okay. this is an area where I actually do think Valance can have some influence and that is talking about clinical care, talking about patient access. He was quite articulate about getting community hospitals and more patients into clinical trials, and that being a key and core parameter for the NHS. he talked a lot about data and how they're going to be creating a 600 million pound. health data research service, which is sort of gonna be run as a government company, but is actually independent from government in the way it, you know, it operates. It'll have its own CEO and everything. but it's sort of a nonprofit, so the money will get sent back to the NHS and It's going to be used to enable hospitals throughout the NHS to get access to appropriate levels of anonymized data and for people in the NHS themselves to be closer to the innovation enterprise and actually enter innovating themselves. And he talked about two AI based research computing resources that they've opened. There's a lot of things going on beyond this question of the negotiations over the drug pricing, so.

Steve Usdin:

And there's also, yeah. Then there's also the things that I spoke with Lawrence Tallon about, that we talked about MHRA trying to, expand. Its. Its reach globally trying to be more innovative. it's interesting, we're gonna talk about this later, in the podcast because Scott Gottlieb, the former FDA commissioner, was trying to position, the argument for reforming FDA. As being something that's going to make the United States more competitive, in terms of the competition with China. it sounds like in the U.K. they're trying to make a similar argument. They're saying, you know, we can do regulatory reforms, and regulatory in the U.K. means both, approvals or, or reviews of, medicines. But also the, the pricing.'cause the, yeah, the pricing is part of the regulatory scheme there, so that they're, they're saying that they can make themselves more competitive and attract companies there. it's really a, uh, a debatable proposition as to whether, countries are going to be able to innovate themselves out of. the problem that they have, in terms of competition from China. I think that, the Chinese, have got certain structural advantages and certain, competitive advantages. and they're not gonna let go of those. I'm not sure that the things that are being done in the west are of a magnitude, that they're going to, to offset them. I would also say that my contention is that. If they don't need to, that, there's room in the world for innovation, no matter where it comes from. and that, probably the best policies are gonna be those that, promote, innovation, wherever it comes from, and, promote access for patients to that innovation.

Simone Fishburn:

Right. So Steve, you know, III actually wanted to say this. There's, for the U.K. there's three names that people should remember. One is Patrick Valent, the other is Steve Bates. The other is Lawrence Tallon. Sorry, everybody, three guys. But still, so having Patrick Valance, I mean the, everybody I spoke to was very enthusiastic feeling that somebody in this position of influence really understands the industry. I mean, this is a labor government, which is not a particularly pharma friendly government, but it's got probably the best advocate they could have in that position. the second one is Steve Bates, who is moving into the office for Life sciences. Where again, these are very difficult things. I don't know if anybody can do it, but if anybody can, Steve's the person just to understand how you pick up the phone to person A and person C and person E, and understand that those people need to understand certain issues in order to move them from one position to another. Again, Steve really understands the ecosystem and the third person will see what he can achieve. Again, Lawrence Tallon, whom you interviewed, people have a very positive impression of him heading up MHRA. So there's no lack of good ideas. And your points about China is exactly what Valance says. He's like, we don't need to compete with him on everything. We need to figure out what we're really good at and compete on that and deliver on that. innovation can come from everywhere we need to work out. He's put in more aggressive goals, actually, I mean. MHRA, they've talked about under 50 days. Valance says he doesn't think that's actually fast enough. Right. So, you know, hopefully that's just a starting point.

Steve Usdin:

That's forgetting trials. Start forgetting

Simone Fishburn:

for getting trials started, and we all know that one of China's biggest, biggest advantages is the speed at which you can start. People can start trials there. So understanding that, understanding that the NHS is kind of. Very broken, but at the same time a potential jewel in the crown. So again, I do think that having smart people who understand the ecosystem, let me put it like this, it's the best chance they've got. Doesn't mean they can do it, but the better, better off than, than without those people in place. So I'm interested to see how that unfolds.

Steve Usdin:

No, I, I think it's fascinating. And also just to add on to what you said, one, one thing, which what you're saying basically is that there're, there's, they're kind of hyper networked, right? Everybody in the U.K. who's involved in, doing science and promoting innovation and creating public policy around this. They all know each other. They all, um, understand each other, and now they're trying to work on the same page to promote something that's gonna, make life sciences a pillar of their, um, of their economy.

Simone Fishburn:

And they're doing it with a very good substrate where they really have a, a lot of biotechs and a lot of innovation. So let's see, we'll see where it goes. I don't think it's easy, but I, uh, do think it's exciting.

Jeff Cranmer:

Well, and, uh, good news for our listeners if they wanna tuck into this more. We have a two part q and a that we'll begin publishing today. That's Monday. Uh, as we record this, uh, part two will come out, soon after. and it is the q and a with Patrick Valance and Kate Bingham. and it is good stuff. Alright, let's stay with the policy and head over to Washington, Steve, uh, biopharma companies are under pressure from a September 29th deadline. That's next Monday to propose concessions to the White House. In hopes of avoiding, uh, what is being called most favored nation price controls. Steve, you sat down with the new Chair of BIO. what did you learn?

Steve Usdin:

So, yeah, so I spoke with, uh, Fritz Bitten Bender. who, as I said in my, uh, introduction to the interview, he's really wired into Washington's life sciences public policy scene. He's the senior VP for Public Affairs and Access at Genentech, and he's chair of BIO. Before joining Genentech about nine years ago, he was the executive Vice president of Public Affairs at BIO. So this has really been his life for a long time. First thing he said, industry believes that President Trump's September 29 deadline for companies to come up with voluntary steps. To comply with his request for MFN pricing is a real deadline. Fritz gave some insight into how Roche and Genentech are approaching this, and he confirmed my reporting that the administration has refused to negotiate with BIO or PhRMA. So Roche is making proposals for a more competitive Medicare part B market, which is interesting because of course Genentech's a big part B company is a company that has a lot of biologics. They're also making proposals for reforming Part D in ways that narrow the gap between list and net prices. And they're presenting other ideas that Fritz said will create savings for patients and taxpayers, but he can see that they aren't MFN. I'm hearing that other companies, are taking a similar approach. I'm also hearing concerns from some of the companies that one or more of their peers, there are 17 companies that are speaking with the administration, uh, and by the way, by the administration. I mean, pretty much, Mehmet Oz uh, the head of, CMS who's heading up these negotiations. So anyway, there's a concern that one of these companies is gonna break ranks and offer to comply with administration's MFN demands. If that happened, the White House could use it as pressure, on the other companies. Even if it doesn't, it's pretty smart policy for the administration to request. Negotiations separately with each one of these companies. They can't coordinate with each other because of antitrust concerns. The administration can take something that one company has offered, a concession, another concession that another company has offered. It can aggregate these and say, okay, well, we'll, we'll put them all into a big package and um, we'll try to apply them to the entire industry. That could be what happens, if there isn't some kind of an agreement. what, uh, Fritz Bittenbender said, and what I'm hearing is that the most likely response from the Trump administration will include, some kind of so-called demonstration project, which would be mandatory from the Center for Medicare and Medicaid Innovation at CMS. Um, that could be for Part D, that could be for Part B, or it could be for both. it could be some, further attempt by the administration to impose MFN pricing on Medicaid. and, Commerce Secretary Howard Lutnick has said that tariffs could play into this somehow. Um, as a way to get MFN pricing policies imposed in the United States should also say that. One of the other things that's gonna come out of this, and, and I we're seeing some announcements already, is that companies are gonna start announcing that their European pricing is gonna be closely aligned, with their US pricing. It's gonna be really interesting to see how that plays out. you know, are those, real prices or are those gonna be. List prices and the companies and the, the countries that they're, um, negotiating with, will have some kind of, undisclosed, discounting or reating or something like that. We don't know how that's gonna work. that's gonna be really an interesting thing, kind of summing it all up. You know, look, we've got another week. Um, I expect that some of these deadlines, sometimes when we hear these deadlines from the Trump administration, they're not real. They kind of get blown off and, things happen a little bit later than has been promised. That may be the case here. But, what I'm hearing is, at least from the company side, they believe that, this deadline next, um, Monday is a, is a real one. And that we should hear probably one from the companies, um, what it is that they've, what kind of concessions they're willing to make. And, two, from the, uh, Trump administration, whether they're willing to accept those. or whether they're going to impose, um, some other kind of measures that are intended to lower the prices of drugs in the United States, and perhaps to increase the prices that are paid in other countries.

Jeff Cranmer:

and of course, uh, our podcast listeners, uh, should, tune into our sister podcast, BioCentury Show where. Steve and Simone, and, and sometimes, me sits down with a key opinion leader, like Fritz and, uh, discusses, uh, key issues such as this. And, uh, another key issue that we are watching quite closely here at BioCentury is the Biosecure Act. Steve, uh, I know you asked Fritz about it. what did you learn?

Steve Usdin:

So there's a new version, kind of a modified version of last year's Biosecure Act, that, is being introduced in the Senate. there's an effort to try to get it, as an amendment to, um, the Defense Appropriations Act. and I asked him whether BIO endorses it. They did endorse the Biosecure Act, um, last year. he said that, BIO didn't have a position yet, on it, but it sounded to me like it's likely that BIO at a minimum won't, um, won't oppose it. The key differences between this one and what was rejected last year is that instead of naming specific companies, the amendment sets up a process for identifying companies that would be national security concerns. Like last year's bill. Uh, then it has about a five year grandfathering, period for companies that have, contracts with those, companies that are identified as national security concerns to, define alternative service providers. and it imposes, a ban on U.S. contracting and, grant making to entities that. Rely on companies that are identified as, uh, biotechnology companies of concern after that grandfathering period is over.

Jeff Cranmer:

Okay, Steve. Uh, another important. Voice in the policy world. former FDA Commissioner Scott Gottlieb, he's on Pfizer's, board, I believe a couple of others, and he is also a partner at NEA. he warned on Friday that restrictions on in-licensing medicines from China could trigger, what he's calling an international IP arms race. one that would undermine U.S. industry and public health. Steve, what prompted his warning?

Steve Usdin:

Scott was speaking at the USC Schaeffer Center's DC Campus. It was a meeting about a report, um, that the Schafer Center has put out about ideas for reforming FDA, which by the way, is a very interesting report and has a lot of good ideas in it. He said that, FDA reforms are needed to make the U.S. competitive with China. As an aside, Janet Woodcock was in the audience. Um, she was on a later panel and she kind of spoke up and she pushed back and she said to Scott, well, your ideas are good, but, FDA reforms should be separated from discussions of China. The two really aren't, um, linked either on a policy level or intellectually. and Scott, it was really funny, he said to everybody know, he said, well, now you see what my morning staff meetings used to be like when I was at FDA. so Scott's, one of his points was to warn against imposing restrictions on in-licensing drugs from China, and he said that he could provoke, as you said, an arms race, an IP arms race, in which other companies. Would impose restrictions on U.S. IP. And he mentioned that, of course, the United States, uh, US-based companies sell an awful lot of IP or license an awful lot of IP, around the world, and, would be hurt by, restrictions on, on doing so. He also noted that some really important drugs have been and are being developed in China, and that it would harm American patients to be denied access and he cited. legends CAR T for multiple myeloma, which J&J, acquired in which, he said, you know, is stupendous. for patients.

Simone Fishburn:

Okay, so Gottlieb's being pretty outspoken about the IP situation. What are we hearing other people say and you know, what do you think are the chances that this kind of policies actually gonna, you know, stick that it's gonna stay? Do you think? Do you think they'll roll it back?

Steve Usdin:

So the origins for a lot of the, uh, concern on this issue are, are a New York Times story from a, a week or two ago where they got a hold of a draft executive order that's been floating around the White House, which calls for, creating a system, uh, for intensifying scrutiny of, in-licensing of medicines from China. Perhaps subjecting them to some kind of a process like the CFIUS process that's used to, um, scrutinize it in some cases, prohibit Chinese investments in the United States. I don't doubt that the draft executive order that the. The Times reported about is real. I, I haven't seen it. I've tried and I haven't been able get a copy of it as far as I know nobody else has. But, it's most likely that that draft was created. I think there's a lot of draft executive orders on a lot of topics that are floating around the White House, and a lot of them aren't gonna see the light of day. The Times reporting said that Peter Thiel and the company associated, with Kushner, are, Pushing this idea. Um, they're saying that competition from China, threatens to, to harm American, biotech companies. And this is a way to kind of level playing field.

Simone Fishburn:

let me go back to what I said about the U.K. Because what was rare there is, I mean, we know there's a lot of people walking around government who really just don't understand the ecosystem, and it seems to me that those arguments indicate a lack in, certainly with respect to this ecosystem and you know, how much purchase does people like Scott Gottlieb and those kind of voices, how much influence do they have?

Steve Usdin:

He, he's quite influential. but there's also. A tremendous amount of agreement, bipartisan agreement, Democrats and Republicans, that the US should take steps to protect American industry from China there. So, you know, protectionism is, is, popular concept in Washington right now. there's a, great deal of interest in disengaging or disentangling, us, technology companies, from China. I think that there's a spillover from the national security debates around, semiconductors and AI technology in China. One of the things that I think happens in Washington a lot is that policymakers who understand one area very well, or at least believe that they understand it very well, like semiconductors or ai, assume that what they know about those areas apply to other areas that are adjacent. That happens a lot with biotech policy because there aren't a lot of people in Congress who really understand biotech policy. There are a few, but there aren't very many. there aren't very many people in the White House who do, and they're kind of drowned out by, um, some of these other voices. That's where I think that somebody like Scott Gottlieb, speaking out. Very publicly. And by the way, there's a, um, an op-ed that he has in the Washington Post, today about this. I think that, that, it does have influence. It raises these issues and it makes people start asking questions.

Jeff Cranmer:

All right, and you can find Steve's story. On BioCentury.com, there'll be a link in the show notes. And let's see. Hey, let's, uh, let's head to the clinic. Singapore hosted the World Sleep Congress and Lauren had the opportunity to dig into some cool data that's coming out for narcolepsy. Uh, the two leading companies, Takeda. And Alkermes, uh, Lauren got to speak with the Ageless Richard Pops, as well as a key member of Takeda's team. Takeda, the company that cracked the code on Orexin, agonist. Lauren. Do I have that right?

Lauren Martz:

That's right. Yeah.

Jeff Cranmer:

Excellent. Uh, there's a good piece. Lauren. Uh, what did you learn?

Lauren Martz:

Thanks Jeff. so I learned that this is really a milestone year for narcolepsy because of how this class has advanced. So, at the meeting, which was, uh, over a week ago now, we learned that Takeda's therapy, at the primary endpoints and the secondary endpoints in a pair of Phase III studies. And we also have Phase II data from Alkermes. I think overall this just helps provide validation for this idea that you can agonize the orexin 2 receptor and have an impact on, not just wakefulness, but on some other, you know, symptoms that come along, with narcolepsy, type one. the reason that this was particularly interesting is that this is a disease that has had approved therapies. But they don't really get at the underlying biology in the same way as targeting the orexin 2 receptor does. So patients with narcolepsy type one are lacking the neurons that produce the orexin neurotransmitter. And we can't just add back that neurotransmitter in a therapeutic form for several reasons, you know? it's a large protein. It needs to cross the blood brain barrier. Um, and then design an agonist has been challenging, because of some of the same, same problems and also the fact that you need to kind of replicate The rise and fall of levels of this neurotransmitter in a patient's brain to help them, you know, have a normal sleep wake cycle. so Takeda was the first company to sort of have a, a breakthrough in this class after, many ups and downs in some failures. Uh, so I think this is a, a big moment for, that program in particular. and I think there are a lot of eyes on this field because it's not just these two that have, have had some clinical success. There are, um, several others that have moved into the clinic as well. right now I think there are questions about which one of these might end up being best in class. So Takeda is ahead. It's looking toward regulatory submissions this year. There are questions, you know, there are side effect profiles that are common to both therapies in this class and, and potentially the other ones that that come forward too. Um, there are questions about dosing. So, Takeda's therapy is dosed twice a day. Alkermes so far in the Phase II trial was dosed once a day, which may be more convenient for patients, but Takeda is arguing that twice daily dosing is. Potentially a path to better efficacy because of the way that you want. Orexin not just continue to rise throughout the day before you reach, uh, time to sleep when it should fall off quickly.

Jeff Cranmer:

Lauren, you spoke to Sarah Sheikh, uh, head of Global Development and SVP of the Neuroscience Therapeutic. Area, unit at Takeda. and on that point, I, I thought it was kind of cool what she was saying. It was like the, the patient could almost like figure out what works best for them based on what they're doing on a certain day. Like, you know, if, you know you have a big meeting or whatever, you can kind of plan, um, when you take that second dose.

Lauren Martz:

Exactly. So you can control the interview interval between your two doses based on, you know, how long you wanna stay awake for that, or how long you wanna, have full wakefulness for that day and, and what you have later in the evening, for example. So I think that, you know, it makes sense.

Jeff Cranmer:

What else? Uh, you, you also wrote that they're exploring other indications. Uh, what, what other indications are they digging into for these?

Lauren Martz:

Sure. So narcolepsy type one is the indication where there actually is a loss of orexin. There is another type of narcolepsy where orexin is present, but we still have the same, issues, uh, symptoms with sleep. So. that's another area where both of these companies and some others are testing orexin 2 receptor agonists. In some cases it's, different agonists that, may act on the receptor in different ways because orexin is present in these patients. It's just, not working, potentially not working as it should be. there are also some other sleep uh, disorders where modulating this pathway could have a therapeutic effect. And then there are a lot of thoughts about, other conditions where wakefulness, cognition, mood, the types of symptoms that are associated with narcolepsy that, you know, orexin, uh, two receptor pathway activity. Not sort of the, the primary symptom associated with that disorder, but are problematic for patients. So, you know, I think, A DHD for example, was, was proposed as a potential indication where this class of drugs could have sort of more of a, symptomatic effect for patients and something that they're exploring.

Jeff Cranmer:

interesting stuff. Lauren, Pops and Sheikh both very optimistic that there's an opportunity to build. really build franchises around orexin assets. So we will be, uh, keeping an eye out. I know Takeda has, um, other assets in the clinic, uh, preclinical as well. we'll be, uh, continuing to watch this space. Some other stuff to check out on our website. Uh, Stealth finally got its approval for Barth Syndrome. Uh, it's been a roller coaster 10 year journey. Steve and I collaborated on a piece, that published Friday we also, uh, have our colleague Paul Bono's story on Lizard's M&A survey that they did with, uh, top biopharma executives. And, um, as I mentioned earlier, check out. Steve's conversation with Fritz Bittenbender of Genentech, who is the chair of BIO. And keep an eye out for two more podcasts. This week we'll have, the recording of Stephen Hansen, and Simone, on stage in Cambridge. wrapping up the Grand Rounds conference. um, so joining, uh, Simone and Stephen James Sabry, of course, the prolific deal maker. At Genentech Roche, now BioMarin and Michelle Jones, Simone, good stuff?

Simone Fishburn:

Always good stuff, Jeff. I recommend people listen to it if they wanna get the, get the skinny.

Jeff Cranmer:

And we'll also be doing a podcast, uh, Lauren and I, uh, and Selina, uh, once she gets off the plane from the U.K. we'll be sitting down with. An AI expert from podcast sponsor, IQVIA. So look out for those two podcasts this week. Thank you for tuning in. If you like what you're hearing, please, like and subscribe. and a special thanks to Kendall Square Orchestra. Which provides the music for BioCentury this week and the BioCentury Show. Uh, tickets are now on sale for the group's eighth season, so if you're in the greater Boston, area, go check it out and, uh, enjoy a relaxing evening of wonderful music.

Eric Pierce:

BioCentury would like to thank IQVIA Biotech for supporting the BioCentury This Week podcast. Learn why IQVIA Biotech is proud to be the go-to CRO supporting biotechs from innovation to patient impact. Visit IQVIABiotech.com.

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