Pullan's Pieces #160
 
 
 
 
 
 
linda@pullanconsulting.com
1(805)-558-0361
 
 
 
 
Pullan's Pieces #160
June 2020
BD News and Analysis for  Biotech and Pharma
 
 
 
 
 
Dear --FNAME--,
 
 
 
 
Happy Summer!  We hope you are doing well.  It seems partnering is active despite the coronavirus.   

Cheers,


Linda
 
 
 
 

1.  What drives top Series A deals?
2.  Infographic: Biosimilars         
​​​​​​​3. Jessica:  Nucleic Acid Therapeutic Modalities 
4.  Trevor:  NASDAQ Biotechnology Index - an all time high
 
 
        
 
 
 
What drives top Series A deals?
 
 
 
 
What does it take to drive a big Series A investment in the year of the Covid-19 pandemic?   Take a look at this fascinating set of the top 5 Series A in 2020 (so far).  
 
 
 
 
#1  NO ORDINARY STARTUP:    Mabwell (Shanghai) Bioscience, $278.5M

Founded:   2017 in the Shanghai Zhangjiang Hi-Tech Park
 
 
 
 
 
Mabwell absorbed other companies so it has 9 entities, covering everything from research to manufacturing production facilities, and 3 Phase III molecules.  And it formed a joint venture with Biotheus (started by friends from Innovent, also backed by same investor, Shiyu) to develop a bispecific. 
  
Platforms:  include a high-throughput antibody screening platform, fixed-point ADC coupling technology platform, PEG modification technology platform, dual antibody technology platform. 

Team:  Nothing visible on website or news release.  
 
 
 
 
Investors:  Chinese VC firms,
  • led by Shiyu Capital (Shenzhen, $707M equity fund),
  • joined by Oriental Fortune Capital,
  • Loyal Valley Innovation Capital,
  • Haitong Innovation Capital Management,
  • Founder H Fund,
  • Haurong Rongde Asset Management,
  • Huajin Capital,
  • Sincere Capital,
  • Winfast Holding and other investors.  
 
 
 
 
#2  A REALLY DIFFERENT GOAL - Compete on Costs:   EQRx,  $200M


Goal:  bring 10 new products to known targets (fast followers)  to the market over the next 10 years, while using technology to cut costs of these biologics by 1/2 .  COMPETE ON COSTS.  


 
 
 
 
Investors: Tech Heavy  
  • Andreessen Horowitz LLC (Silicon Valley, $12B in multiple funds -with an emphasis on engineering in its $1.4B "a16z Bio" fund);
  • Arboretum Ventures LLC;
  • ARCH Venture Partners LP;
  • Casdin Capital LLC;
  • GV Management Co LLC;
  • Nextech Invest Ltd;
  • Section 32;
  • Undisclosed
 
 
 
 
#3  From SUBSIDIARY to SERIES A to IPO:   Nanjing Legend Biotech,  $150M

This subsidiary of GenScript Biotech ($4B market cap) went
  1. from stunning 94% response rate in their first clinical data in 2017,
  2. to $150M series A in 2020 
  3. to $487M IPO, also in 2020

 
 
 
 
Focus:  Cell Therapy   
  • Lead CART program:   a structurally differentiated CAR-T cell therapy containing a 4-1BB co-stimulatory domain and two BCMA-targeting single-domain antibodies designed to confer avidity
  • TCR
  • Allogeneics
 
 
 
 
Team:  Mostly Returnees with diverse experience
  • CEO:  Yuan Xu, Ph.D., was Sr. VP at Merck, and previously at Gilead, Novartis, Amgen, Chiron, GlaxoSmithKline, and Genentech. 
  • CSO:  Frank Fan, MD, Ph.D., training in China, Japan and Canada.  Transplant KOL. 
  • CFO:  Ying Huang, Ph.D.  was analyst on Wall St, chemist for Schering Plough
  • BD:  Meeta Chatterjee, Ph.D., was head of strategy, transactions and operations in BD&L at Merck.  
 
 
 
 
Investors including Corporate Ventures: 
  • Hudson Bay Capital Management LP ($8.6B New York and London, focus on alpha (=excess return vs benchmarks);
  • Johnson & Johnson Innovation - JJDC Inc;
  • Lilly Asia ventures; RA Capital Management LLC;
  • Vivo Capital LLC
 
 
 
 
#4  DRUG DISCOVERY on "Molecular Machines",  MOMA Therapeutics, $86M

Focus:  Using protein biophysics and CryoEM to target small molecule drugs to the family of more than 400 proteins that use ATP hydrolysis and conformation change to generate force and motion.  These are molecular machines.   Examples include DNA helicases and chromatin remoding proteins.  

Team:  Company creation by academic scientists:
  • Dorothee Kern, PhD (HHMI, Brandeis University), a world expert in protein biophysics and motion,
  • Eva Nogales, PhD (HHMI, UC Berkeley), a pioneer in the field of Cryo-EM and structural biology, and
  • Johannes Walter, PhD (HHMI, Harvard Medical School), a leader in the field of molecular machines and genome maintenance;
  • joined by Timur Yusufzai, PhD (Entrepreneur-in-Residence at Third Rock Ventures, former Assistant Professor, Harvard Medical School), an expert on the biochemistry of molecular machines.
 
 
 
 
Investors:   Company Creation 
  • led by Third Rock Ventures (Boston, $3.9B) and including
  • Nextech Invest,
  • Cormorant Asset Management,
  • Creacion Ventures,
  • Casdin Capital, and
  • Rock Springs Capital
 
 
 
 
#5  GENE THERAPY for PREVALENT, CHRONIC DISEASES,  Kriya Therapeutics, $80.5M

29 Million Americans
have Type 2 Diabetes
Focus:  Kirya Therapeutics aims to use 1-time gene therapy to stably express proteins (such as insulin)  in appropriate tissues to treat prevalent chronic diseases such as diabetes.  
 
 
 
 

Team:  A team with company experience.  
  • CEO:  Shankar Ramaswamy, MD., founder of Roivant, CBO of Axovant Gene Therapies
  • Vice Chairman:  Roger Jeffs, Ph.D., was president and co-CEO of United Therapeutics, deep board experience.
  • CSO: Fraser Wright, Ph.D., co-founder and CTO of Spark Therapeutics  
  • and others
 
 
 
 
InvestorsLed by Family Office
  • QVT Family Offices (NY, invested in PharmAsset, Medivation and Roivant),
  • along with Dexcel Pharma,
  • Foresite Capital,
  • Bluebird Ventures (associated with Sutter Hill Ventures),
  • Narya Capital,
  • Amplo,
  • Paul Manning, and
  • Asia Alpha.  
 
 
 
 
Congratulations to these audacious young companies, with very different goals, very different funders!  
 
 
 
 
 
 
 
Infographic:  BIOSIMILARS
 
 
 
 
 
Jessica:     Nucleic Acids Therapeutic Modalities
 
 
 
 

With several of the leading vaccine contenders for COVID-19 being nucleic acid-based (Moderna, Inovio, BioNTech) many are asking - what is a therapeutic nucleic acid (TNA)?  Are there any TNAs currently on the market?  Why are they not typically categorized as gene therapy?  Isn’t it the same thing as gene therapy though?  If TNAs were considered gene therapies would it up their “coolness” factor? 


What is a Therapeutic Nucleic Acid?

TNAs have classically consisted of antisense oligonucleotides (ASOs) or silencing mRNAs (siRNAs, aka small interfering or short interfering mRNA).  The prevailing notion is that these therapeutic molecules are intended to silence or shut-off a particular gene of interest (GOI).  This can result in the overall goal of suppressing the expression of a gene (usually a mutated gene) or promoting the expression of a gene via blocking a suppressor of a gene.  The ASOs can be either RNA or DNA based though more commonly consist of RNA.  Because these therapies are typically mRNA based, they are effectively interfering “in real time” with the protein expression of the host cells, rather than manipulating the genetic make-up of the cell.


What is Gene Therapy?

These therapies are partial or whole pieces of genetic sequences that are typically delivered via a viral vector, though there are also non-viral gene therapies which employ transposable elements as the vector.  Due to some of the vector components, as well as the ability to engineer the gene itself, it is possible to target delivery of these sequences into the nucleus of the cell which can result in a permanent expression of the therapeutic element.  Furthermore, through gene editing tools (eg CRISPR), it is possible to correct a mutation or insert a functional copy of a mutated gene.  Therefore, gene therapies are typically intended to repair, replace, or override a genetic deficiency. 


So… TNAs (generally) interfere with contemporary protein expression while gene therapies (generally) modify genes.  We say “generally” because, of course, there are exceptions which make the distinctions a bit messy.  To further muddy the waters, other molecules that can be classed as TNAs include: ribozymes, DNAzymes, anti-gene, CpG, decoys, aptamers, and miRNA.  Some of these entities can manipulate more than the typical “real time” protein expression.


The various flavors of therapeutic elements (mostly TNAs) are portrayed in this complicated, but instructive representation of the macromolecules and how they get in the various compartments of the cell:

















 
 
 
 

How do TNAs compare to gene therapies?




Therapeutic Nuceic Acid


Gene Therapy

Components

Nucleic Acid molecule, usually chemically modified; sometimes with lipid or polymer-based nanoparticles

Vector encoding a gene(s) of interest which can include targeting sequences; engineered cells expressing GOI(s)

Multigene possible?

Monotherapy - no; though manipulation of 1 mRNA can impact the expression of several gene products

Yes

Transient or Permanent?

Transient

Can be either

Size

ASO: 16-25bases

3-9 kilobases (realistically) depending on the vector

Delivery

IV or intrathecal delivery of naked TNA; TNA coated in nanoparticle

IV or intrathecal delivery of viral vector (in vivo) or engineered cells (ex vivo)

Dosage

Loading doses followed by maintenance doses

Ideally one-and-done


The distinctions are coming into focus a bit now.  TNAs are tiny macromolecules (wait, what?) that transiently manipulate protein expression while gene therapies are larger stretches of genetic material that can induce a permanent change in the patient’s cellular genome.  It is important to note that the method of delivery and/or choice of vector for gene therapy direct the delivered genetic information to the desired cells thus reducing the risk of aberrant manipulation of “off-target” cells.  There are a handful of each of these therapies on the market already (outlined in the tables below), and many more in clinical development with 1543 active trials testing 770 drugs (as of 22 June 2020) for TNAs.  For gene therapies there are 2716 trials testing 1673 drugs (as of 22 June 2020).


Marketed TNAs:


Drug

1st Approval

Molecule Type & Target

Indication

Macugen 

(Pfizer Japan)

2004

Aptamer - Vascular Endothelial Growth Factor (VEGF) Inhibitor

Age-related macular degeneration

Defitelio.

(Jazz Pharmaceuticals)

2013

Oligonucleotide - Plasminogen Activator Inhibitor 1 (Endothelial Plasminogen Activator Inhibitor or PAI1 or SERPINE1) Inhibitor

Severe hepatic veno-occclusive disease

Kynamro 

(Sanofi)

2013

2nd Gen ASO - Reduce ApolipoproteinB mRNA

Homozygous Familial Hypercholesterolemia (HoFH)

Spinraza 

(Biogen)

2016

ASO - Survival Motor Neuron Protein (Component of Gems 1 or Gemin 1 or SMN1 or SMN2)

Spinal Muscular Atrophy (SMA)

Exondys 51

(Sarepta Therapeutics)

2016

ASO - Dystrophin (DMD) Activator

Duchenne Muscular Dystrophy (DMD)

Onpattro 

(Alnylam)

2018

Antisense RNAi Oligonucleotide - Transthyretin (ATTR or Prealbumin or TBPA or TTR) Inhibitor

Familial Amyloid Neuropathies

Tegsedi 

(Akcea Therapeutics)

2018

ASO - Transthyretin (ATTR or Prealbumin or TBPA or TTR) Inhibitor

Familial Amyloid Neuropathies

Givlaari 

(Alnylam)

2019

Antisense RNAi Oligonucleotide - 5 Aminolevulinate Synthase Nonspecific Mitochondrial Inhibitor

Acute Intermittent Porphyria; Hereditary Coproporphyria; Porphyria Variegata

Waylivra 

(Akcea Therapeutics)

2019

ASO - Apolipoprotein C III (APOC3) Inhibitor

Familial Chylomicronemia (Type I Hyperlipoproteinemia)

Vyondys 53

(Sarepta Therapeutics)

2019

ASO - Dystrophin (DMD) Activator

Duchenne Muscular Dystrophy (DMD)

Viltepso 

(Nippon Sinyaku)

2020

Morpholino ASO targeting human dystrophin exon 53; designed to increase dystrophin production by binding to exon 53

Duchenne Muscular Dystrophy (DMD)


Marketed Gene Therapies:


Drug

1st Approval

Molecule Type & Target

Indication

Gendicine

(Shenzen SiBiono)

2003

In vivo Adenoviral Vector targeting Cellular Tumor Antigen p53 Activator

Head and Neck Cancer Squamous Cell Carcinoma; Nasopharyngeal Cancer

Neovasculgen

(Human Stem Cell Inst)

2011

In vivo plasmid encoding CMV promoter and Vascular Endothelial Growth Factor (VEGF) Activator

Critical Limb Ischemia; Peripheral Arterial Disease (PAD)/ Peripheral Vascular Disease (PVD)

Strimvellis

(GSK/Orchard Therapeutics)

2016

Ex vivo Autologous CD34+ cells transduced with gamma retrovirus to express ADA

Adenosine Deaminase (ADA) Deficiency Related SCID

Kymriah

(Novartis)

2017

Ex vivo Autologous CAR-T - Cytotoxic to Cells Expressing B Lymphocyte Antigen CD19

Acute Lymphocytic Leukemia (ALL); Diffuse Large B-Cell Lymphoma

Yescarta

(Kite/Gilead)

2017

Ex vivo Autologous CAR-T - Cytotoxic to Cells Expressing B Lymphocyte Antigen CD19

Diffuse Large B-Cell Lymphoma; Primary Mediastinal B-Cell Lymphoma

Luxturna

(Spark Therapeutics)

2017

In vivo AAV2 encoding Retinoid Isomerohydrolase Activator

Leber Congenital Amaurosis (LCA); Retinitis Pigmentosa (Retinitis)

Zolgensma

(Avexis/Novartis)

2019

In vivo AAV9 delivering Survival Motor Neuron Protein Activator

Spinal Muscular Atrophy (SMA)

Collategene

(AnGes/Mitsubishi Tanabe)

2019

In vivo DNA plasmid expressing Hepatocyte Growth Factor Activator

Critical Limb Ischemia; Peripheral Arterial Disease (PAD)/ Peripheral Vascular Disease (PVD)

Zynteglo

(Bluebird Bio)

2019

Ex vivo Autologous CD34+ cells transduced with lentiviral vector to express Hemoglobin Subunit Beta Activator

Thalassemia


There exists a good smattering of both TNA and gene therapy drugs on the market, with several addressing similar indications.  Which modality is better though, which is more valuable?


Are Gene Therapies Cooler than TNAs?

Getting back to the opening question, if TNAs were considered gene therapies would it up their “coolness” factor?  In this industry “coolness” equates to partnerships so…






Therapeutic Nucleic Acid


Gene Therapy

Deals

59

152

Total Deal Value

Mean:  $600M

Median:  $206M

Highest:  $4.1B - AZ/Silence 2020 &

                 $4.1B - AZ/Ionis 2015

Mean:  $184M

Median:  $5M

Highest:  $3.16B - Kite/Sangamo 2018

Upfront

Mean:  $80M

Median:  $30M

Mean:  $30M

Median:  $1.3M

Global Data: Deals at Discovery and Preclinical Stage for Oligonucleotide and Gene Therapies – 22June2020


Well, gene therapies certainly are more popular - with nearly 3 times as many suitors for preclinical deals as TNAs (not to mention that more than 2 times as many drugs being tested in clinical trials for gene therapy mentioned above).  Clearly, the TNAs command more value though.  A quick perusal of the list of acquirers is revealing.  For TNAs it is dominated by a veritable red carpet of pharmaceutical giants while the list of acquirers for gene therapy deals consists of some pharma partners but is dominated by start-ups (well-funded) and mid-sized biotech companies.  As we tell our tween and teenaged kids, coolness is in the eye of the beholder - but what will investors think is cooler?  Why are deals (generally) for TNAs raking in significantly more money than gene therapy deals?  Is this clear evidence of technology maturity?  The TNA technology has been in development longer…or has it?  Gene therapy and TNA development really took off in the 1990’s.   However, this is also when the gene therapy field was relegated to the back burner, with the flame turned off, for a good decade in the aftermath of the death of a patient, Jesse Gelsinger


Is there a significantly greater value proposition for TNAs since they may require repeat (unending?) dosing while gene therapy is likely to be a one-and-done therapy?  Unlikely, as the pricing of gene therapies is somewhat intended to account for that.  Rather it may be the perceived technical risks of gene therapy.  Manipulating patient genes permanently can be unnerving to risk-averse partners, though it is also clear that there is much interest and potential in gene therapies.  Perhaps gene therapies and TNAs each have their own niche in the biotech industry and are doing fine categorized as they are. 

 
 
 
 
 
Trevor:  Nasdaq Biotechnology Index (NBI) at All-Time High
 
 
 
 

Timing is everything.  Don’t time the market.  Well which is it? (Perhaps it’s both, through “dollar-cost averaging” 😊).

This week has seen closing all-time highs on the Nasdaq Biotechnology Index.  After a nearly 5-year consolidation, the NBI has broken above it’s 2015 all-time high and the sector is the current darling of Wall Street with many stock market soothsayers predicting biotech to be the next sector for outsized value creation.
 
 
 
 

Timing, of course, matters. Over the recent 5 year period, the NBI is up just a wee bit under 12%.  That’s not annual increases of 12%, that’s the total.  Five years for a 12% return.  Meanwhile the S&P 500 was up close to 50% over the same period.  But over the last year, the numbers are flipped with the NBI up almost 30% to the S&P’s approximately 5% gain.

So… is the biotechnology sector’s recent run a breakout that should be bought as in the late 2012-2013 breakout over the highs of the early 2000s?  Had you bought the index at that time, the next 3 years would have tripled your money.  Or is it a fake-out and you should sit on your wallet, or, maybe even sell positions?

From a fundamental perspective, there is a base of enthusiastic support for continued growth as the sector is benefiting from a confluence of constructive elements.  Westlake Village BioPartners summarizes this perspective nicely in this piece on the “Golden Age” for biotechnology.

I might add that another chart indicates a source of additional support has recently been given a fresh  dollop of liquidity.  By the Federal Reserve’s own accounting, the balance sheet (as in 2008-2009) has absolutely exploded higher again.  All this money will find a home somewhere…

 
 
 
 
 
 
 
www.Pullan Consulting.com

Pullan Consulting (www.PullanConsulting) provides advice and execution for biotech partnering and fund raising, with outreach to partners and investors, help with shaping of presentations, evaluations and market analysis, preliminary valuations and deal models, and negotiations from deal prep to term sheets to final agreements. 
 
 
 
 
We have extensive scientific and financial experience, with many deals signed. 

Send us an email or set up a call if you want to explore how Pullan Consulting might be of help!
 
 
 
 

Linda Pullan                     Linda@pullanconsulting.com 
Trevor Thompson             Trevor @pullanconsulting.com 
Jessica Carmen               Jessica@pullanconsulting.com 
 
 
 
 
 
 
9360 W. Flamingo Road, Suite 110-554 Las Vegas, NV 89147
 
 
Footer-logo