Last year, when GEN prepared an editorial titled Eight Biopharma Trends to Watch in 2020, who could have foreseen COVID-19 and the deaths, illnesses, and economic disruption that the disease would wreak? And who could have foreseen how armies of industry and academic researchers would race to develop hundreds of new and repositioned vaccines and drugs? (GEN tracks more than 300 on its COVID-19 Drug and Vaccine Tracker webpage).
While biopharma was dominated by COVID-19, which prompted a surge of research and business activity, the industry also saw developments that will position it for further growth even after the virus is brought under control.
The pandemic and other hot therapy areas drove venture capital (VC) financing to new heights, while propelling a new wave of mergers and acquisitions (M&A) activity as well as an increase in initial public offerings (IPOs). Clinical and commercial activity increased in traditional drug discovery as well as in cell therapy and gene therapy—the latter withstanding the deaths of four participants in two clinical trials. Investors warmed to emerging technologies offering the potential for new therapies, including genome editing and synthetic biology.
Below are seven biopharma-related trends cited by experts and others with a stake in the industry, as articulated in interviews with GEN, or in reports and other public statements.
1. COVID-19: Seeing the finish line
Hope for an eventual end to the COVID-19 pandemic was raised in November when positive Phase III vaccine data emerged from Pfizer and BioNTech, which promptly sought emergency authorization (EUA) for their BNT162b2 vaccine candidate. This hope was strengthened when Moderna reported progress about its mRNA-1273 vaccine candidate.
Other encouraging developments included the FDA’s approval of the first COVID-19 therapy, Gilead Sciences’ repositioned antiviral remdesivir (marketed as Veklury®).
In December, two vaccines, Moderna’s mRNA-1273 and Pfizer/BioNTech’s BNT162b2, joined remdesivir in crossing the finish line of FDA approval. These vaccines will likely be joined by several others, including AZD1222 (AstraZeneca/University of Oxford), JNJ-78436735 (Johnson & Johnson’s Janssen Pharmaceutical), NVX-CoV2373 (Novavax), MRT5500 (Translate Bio and Sanofi), V591 (Merck & Co.), and an unnamed vaccine that is being developed by Sanofi and GlaxoSmithKline.
With the approval of multiple new vaccines, vaccination capacity is projected to grow nearly 150-fold, from 35 million people in the fourth quarter of this year to 5 billion people by the fourth quarter of 2021, according to a November 18 research note by Michael J. Yee, equity analyst with Jefferies, and three colleagues.
On the drug front, remdesivir will likely be joined on the market by two antibody therapies, bamlanivimab (Eli Lilly) and REGEN-COV2 (Regeneron Pharmaceuticals), for mild to moderate COVID-19. The FDA granted emergency use authorizations to Eli Lilly and to Regeneron in November, paving the way for their drugs’ eventual approvals. Also nearing approval is a combination therapy of remdesivir plus Eli Lilly’s Olumiant® (baricitinib), indicated for hospitalized COVID-19 patients. It received an EUA in November.
2. Gene therapy: Big pharma, big deals
Big pharma firms have truly warmed to gene therapy to expand their pipelines in 2021 and beyond. Bayer agreed to acquire Asklepios BioPharmaceutical (AskBio) for up to $4 billion in October, followed two days later by Novartis purchasing ocular gene therapy developer Vedere Bio for up to $280 million. Roche agreed to spend up to $1.8 billion to use Dyno Therapeutics’ CapsidMap™ platform to develop next-generation adeno-associated virus (AAV) vectors for gene therapies for central nervous system diseases and liver-directed therapies.
Pfizer invested $60 million in Homology Medicines three days after Homology presented positive data from a Phase I/II trial (NCT03952156) for pheNIX, a gene therapy for adults with phenylketonuria (PKU). Among biotech giants, Biogen and Sangamo Therapeutics are developing and commercializing Sangamo gene regulation therapy candidates through a collaboration that could generate $2.7 billion-plus for Sangamo.
A continuing challenge in 2021 will be preventing tragedies arising from gene therapy clinical trials. In October, Lysogene disclosed that a five-year-old girl with mucopolysaccharidosis type IIIA (MPS IIIA) died in a Phase II/III trial (NCT03612869) designed to evaluate the company’s LYS-SAF302.
Between May and July, Audentes Therapeutics, which was acquired by Astellas Pharma for $3 billion in January 2020, acknowledged the deaths of three patients in a Phase I/II trial (NCT03199469) assessing its X-linked myotubular myopathy (XLMTM) candidate AT-132. The 3 were among 17 patients who received AT132 at the trial’s high dose of 3 × 1014 vg/kg. Audentes said all three patients who died showed notable features that included older age, heavier weight, and evidence of preexisting hepatobiliary disease.
“That is definitely a wake-up call for the field to really consider dose escalation more carefully, and to put much more emphasis on CMC [chemistry, manufacturing and control] than simply making a higher potency,” said Guangping Gao, PhD, the Penelope Booth Rockwell Professor in Biomedical Research at the University of Massachusetts Medical School, the director of the Horae Gene Therapy Center and Viral Vector Core, and the co-director of the Li Weibo Institute for Rare Diseases Research.
Despite the deaths, gene therapy did not see the disruption that followed the death of 17-year-old Jesse Gelsinger in 1999. According to the Alliance for Regenerative Medicine, gene therapy financing nearly tripled year over year, rising 178% to $3.5 billion in the third quarter of 2020. Between January and September 2020, financing jumped 114% to $12 billion.
The alliance recorded 373 gene therapy trials during the third quarter of 2020—up 4% from 359 in the second quarter but barely above the 370 reported in the third quarter of 2019. Of those trials, 115 were in Phase I, 223 in Phase II, and 32 in Phase III.
3. Genome editing: CRISPR and beyond
Genome editing showed in November that it, too, can spark big-money collaborations. Eli Lilly committed up to $2.7 billion toward using Precision BioSciences’ ARCUS® genome editing platform to research and develop potential in vivo therapies for genetic disorders, starting with Duchenne muscular dystrophy. Bayer’s investment arm Leaps by Bayer co-led a $65 million Series A financing for Metagenomi, a developer of CRISPR-based gene editing systems for developing cell and gene therapies.
CRISPR Therapeutics and Vertex Pharmaceuticals continue to study CTX001, the CRISPR-Cas9 gene edited therapy that in June showed proof of concept in two patients with transfusion-dependent β-thalassemia, and effectiveness in another patient with sickle-cell disease, in two Phase I/II trials that are the first clinical studies of a gene editing candidate sponsored by U.S. companies.
A market report issued November 20 by the Business Research Company projected the global CRISPR technology market will grow from $1.65 billion this year to $2.57 billion by 2023, then leap to $6.7 billion by 2030.
That market is expected to grow faster once the ongoing legal wrangle is resolved over who invented CRISPR-Cas9. The bitter dispute is at the center of a second interference proceeding winding its way through the Patent Trial and Appeal Board (PTAB).
In September, the PTAB redeclared the interference by designating the Broad Institute of MIT and Harvard the senior party, and according junior party status to the Regents of the University of California, CRISPR Nobel Laureate Emmanuelle Charpentier, PhD, and the University of Vienna, collectively called CVC. The PTAB also held off immediately deciding which party offered the strongest evidence of being first to show CRISPR’s effectiveness in eukaryotic cells.
4. Financing: Impressive VC, M&A, and IPO activity
Capital flowed into biopharma companies, as shown by record-high VC investment. That trend is expected to continue in 2021, as are strong if not equally impressive gains in M&A activity, IPOs, and the broader stock market.
The quarterly MoneyTree Report, issued by PwC and CB Insights, showed a record-high $5.9 billion invested during the third quarter of 2020 in biopharma-related industries, dominated by $3.9 billion in 104 deals invested in biotech alone—more than double the $1.9 billion in 74 deals reported for the third quarter of 2019.
“It seems like the biotech and life sciences industry has been pretty much agnostic to COVID-19,” Ousmane Caba, partner, U.S. Pharmaceuticals and Life Sciences, PwC US, told GEN. “COVID hasn’t stopped IPOs, transactions, and M&A. The industry hasn’t been that impacted by the pandemic.”
Two factors have been driving financing in recent months, Caba said. One is the ability to apply data to biology. The third quarter’s largest VC recipient was Recursion, a digital biology company that completed a $239 million oversubscribed Series D financing led by Leaps by Bayer. The other is the longtime interest by drug developers and investors in fighting cancer, especially through technologies applicable to multiple forms of the disease.
Caba observed that the targeting of cancer helped drive a series of big-dollar M&A deals during 2020. Gilead Sciences in October completed its $21 billion acquisition of Immunomedics, which bolstered the buyer’s oncology portfolio with a first-in-class breast cancer treatment that received an accelerated approval from the FDA in April. Illumina plans to buy cancer blood test developer Grail for $8 billion, a deal set to close in 2021. Grail’s ability to apply data also made the company attractive, Caba said.
Also showing strength in 2020 was the market for first-time public stocks. During the first three quarters of 2020, biopharma firms raised a combined $9.32 billion in 51 IPOs, more than double the $3.6 billion garnered in 41 IPOs during the first three quarters of 2019, according to EvaluatePharma.
Overall, biotech stocks enjoyed healthy gains during 2020. As of November 20, the NASDAQ Biotechnology Index stood at $4,364.15, up 22% from $3,581.05 the same date a year ago.
“We do see pharma and biotech as undervalued as we approach the end of 2020,” said Karen Andersen, a healthcare strategist at Morningstar. “Overall, we’re seeing progress with several therapeutic areas. In neurology, even beyond aducanumab, we could see data in 2021–2022 to support new drugs against Huntington’s, amyotrophic lateral sclerosis, Parkinson’s, and Alzheimer’s.”
5. Drug development: Alzheimer’s and more
One of the most closely watched drug development stories in 2021 will be whether the FDA approves aducanumab, the Alzheimer’s disease candidate that Biogen is co-developing with Eisai. Aducanumab is being evaluated under priority review, with a target action date of March 7, 2021.
In November, aducanumab ran into an unexpected obstacle on the road to FDA approval after an advisory panel recommended against approving the drug. The FDA’s Peripheral and Central Nervous System Drugs Advisory Committee balked at endorsing aducanumab. In March, Biogen halted EMERGE and ENGAGE, each a Phase III trial of the drug, after analyses indicated that the trials were unlikely to meet their primary endpoints. Then, in October, Biogen reported that a larger dataset for the EMERGE trial had become available, and that analysis of this dataset had showed a significant reduction in clinical decline. Biogen also indicated that in the ENGAGE trial, data from a subset of patients supported the new conclusions about the EMERGE trial.
“We think aducanumab will get a complete response letter in early 2021 requesting another large trial ahead of approval. We assume a 40% probability of approval in 2024,” Andersen said. “If Biogen gets a complete response letter, they will have to decide if they want to continue investing in aducanumab, or focus efforts on a similar antibody, BAN2401, that is already in a couple of Phase III studies with partner Eisai.”
Andersen added that aducanumab will either lead to more attention and higher valuations for Alzheimer’s programs, such as the programs at Roche and Eli Lilly, or dampen the enthusiasm for therapies that are based on clearing amyloid plaques: “Either way, we expect continued investment in other mechanisms of action, especially tau, and other modalities that can better cross the blood-brain barrier, like Denali’s small molecule inhibitors of leucine-rich repeat kinase 2 (licensed by Biogen), or RNA-based therapies, like those of Ionis Pharmaceuticals partnered with Biogen.”
According to Andersen, drug developers also continue to see progress in oncology. She cited antibody-drug conjugates, like those of Seagen (formerly Seattle Genetics), and two therapies with breast cancer indications—AstraZeneca’s Enhertu® (fam-trastuzumab deruxtecan-nxki) and Trodelvy™ (sacituzumab govitecan-hziy), which Gilead Sciences will inherit when it finishes acquiring Immunomedics. She added, “We expect more combination data with PD-1/PD-L1 antibodies for multiple bispecific antibody programs and other antibodies as well.”
6. Cell therapy: Buyers large and small
Developers are expected to extend last year’s cell therapy developments into 2021. Last November, PerkinElmer agreed to acquire Horizon Discovery Group for approximately $383 million, in a deal intended to add gene editing and gene modulation tools to the buyer’s portfolio of automated life sciences discovery and applied genomics solutions. Sanofi in November shelled out about $364 million to acquire Kiadis Pharma, a developer of natural killer cell therapies. Most of these therapies are focused on cancer, but one therapy in preclinical development is targeting COVID-19.
Two pharma giants completed facilities focused on cell therapy development. In September, Takeda Pharmaceutical opened a new R&D cell therapy manufacturing facility within its research headquarters in Boston. In October, Astellas Pharma opened a $120 million facility to be occupied by the Astellas Institute for Regenerative Medicine (AIRM). The new facility, which is located in Westborough, MA, is to focus on cell therapy manufacturing as much as on R&D.
Cell therapy financing grew at an impressive rate. According to the Alliance for Regenerative Medicine, cell therapy financing as of November 2020 reached $3 billion in the third quarter and $11 billion year to date, up 97% and 242%, respectively. The number of Phase I trials assessing cell therapies increased from 41 to 50 (for the first three quarters of 2019 and for the first three quarters of 2020, respectively) but dipped in Phases II and III. Overall, the number of clinical trials decreased from 218 to 202 trials as of the third quarter.
7. Synthetic biology: In the money
SynBioBeta recently shared some numbers illustrating the increasing allure of synthetic biology to investors. During the first half of 2020, total financing in the sector reached $3.041 billion (among 56 companies). During the first half of 2019, it was $1.9 billion (among 65 companies). The largest financing, $700 million, was raised by Sana Biotechnology, a developer of therapies that are based on engineering cells.
The synthetic biology money train continued into the second half. In September, Zymergen raised $300 million intended to propel its expansion into the $3 trillion chemical and materials industries; accelerate the manufacture of its biofabricated Hyaline film for electronics applications; and commercialize additional products with applications in electronics, agriculture, consumer care, and healthcare.
“The takeaway: coronavirus is not hampering the estimated $4 trillion bioeconomy being driven by synthetic biology,” SynBioBeta founder John Cumbers, PhD, commented recently in Forbes.
If anything, COVID-19 is helping to drive synthetic biology activity and will continue to do so in 2021. Ginkgo Bioworks raised $70 million in May toward developing large-scale testing infrastructure. In July, the company announced an approximately $40 million award from the NIH Rapid Acceleration of Diagnostics Advanced Technology Platforms (RADx-ATP) program to scale its automated technology for SARS-CoV-2 testing using next-generation sequencing.