Notes from BIO 2015 #1 Recap and Biotechnology Trends-M&A, Precision Medicine

Updated 6/25

Precision Medicine -Novel Prevention and Treatment Strategies Lead The Way

A New Initiative on Precision Medicine — NEJM

Over 15,000 attended BIO 2015 in Philadelphia including 1100 companies and more than 30 nations. The Exhibits and Partnering meetings were excellent opportunities for networking and dealmaking as usual. We attended several of the sessions and reviewed BIO materials on-line that relate to our scientific and market focus. It would be very difficult to cover all of the sessions in-depth due to scientific complexity. In past coverage of BIO Meetings we have focused on personalized medicine (now also called Precision Medicine), biomarkers, clinical diagnostics, oncology, new molecular tools such as sequencing, infectious diseases, orphan diseases, gene therapy, immunotherapy and vaccines. Many of the sessions were packed due to innovative nexGen therapeutics and potential clinical breakthroughs.

Here are some general comments on BIO 2015. See links for details.

Markets and General Technology Trends

  1. Interesting commentary was made that too many companies are pursuing oncology drugs or orphan drugs even if they were “copycats”Indeed many of the hottest stocks in 2015  are in “rare diseases” with multi-$B market caps with no approved products in the market.Yesterday for example, BMRN was on CNBC-TV- Biomarin , a successful developer of therapies in “orphan drugs”, talking about their dwarfism drug (achondroplasia). BMRN is up 53.6% YTD. Another Company Serepta Therapeutics’ (SRPT) stock has rocketed up 125 % on potential approval of their Duchenne Disease drug Eteplirsen a rare genetic muscle wasting disease with an NDA expected to be submitted by mid-2015. We did not attend the session on Rare disease opportunities but the issues are certain to be pricing, regulatory and competition (460 drugs in late stage trials!). A major factor for the growth of these investments was the Orphan Drug Act legislation for breakthrough designation.Today Bluebirdbio (BLUE) priced an offering of over 2.9M shares at a price of $170!
  2. M&A will continue to be a driver of biotech stocks for some time to come due to a compelling vision of the future where value is created by new products and innovation. The demand for new technologies is very high and cannot all be developed internally. Many of this year’s market gains are  fueled by the booming market for mergers.  The Valeant (VRX) Roll-Ups and Abbvie (ABBV) acquisition of Pharmacyclics (PCYC) have raised expectations in the industry for synergy and growth. Tax considerations are huge and in some cases killed merger deals. Cheap money has created (Biotech Dealmakers) $355 B in total transactions, $53B in partnering deals, $416.5M in venture investments and 133 IPOs. R&D investment was up 27% with a 30% increase in market cap. The trick to large mergers is managing the risk of revenue shortfalls. Large pharma is back in the market doing deals and now biological products are a large part of their product pipeline and sales growth.
  3. Personalized Medicine has become a greater focus with the announcement of President Obama’s Precision Medicine Initiative with $215M of funding  to improve health and treat disease. The sequencing of genomes (see NGS) has improved understanding of the molecular basis of disease. Sequencing and other genetic tools are making screenings more routine in cancer centers to develop genetically targeted drugs (see our postings on Illumina (ILMN) and Foundation Medicine (FMI) leaders in the sequencing field. Sequencing drives success and costs have dropped from $4211 to near $1000. 20 types of cancer have already been sequencing and 5500 diseases have a known molecular basis with about 500 having therapy. Companion Diagnostics and biomarkers are also in development but many are LDTs (Lab Developed Tests) that do not have full regulatory FDA approval. Two major therapeutic targets that are in late stages of drug development are PCSK9, an LDL receptor for lowering cholesterol being developed by several companies and APOC3, a gene mutation that can lower the risk of cardiovascular disease. One major issue is the sharing of various genetic databases from various institutions and companies. Another issue is that many physicians in oncology for example are not using genotype data for targeting.  For more BIO 2015 updates see Pullan Consulting – Linda Pullan –PullanPieces linda@pullanconsulting.com
  4. We missed the important sessions on the Digital Medicine Revolution with the explosion of mobile technology underway. Medicine is transforming from population-based to individual- based. Connected health offers untapped opportunities to drive sales, access patients for example in compliance and defend reimbursement. $4.3 B of venture funding flowed into digital health.The dysfunction in the healthcare system is “managing the last mile” to the patient. Follow Apple, 23 and Me and Fitbit. Read Eric Topol’s latest books the “The Patient Will See You Now”.

Next postings from BIO 2015: Oncology, Antimicrobial Resistance (AMR) and overuse of antibiotics, nexGen therapeutics – Gene Editing and Gene Therapy.

 

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