No sooner did Donald Trump triumph on Election Day than biopharma executives, researchers, investors, and the broader Wall Street community began discussing how a second Trump administration will reshape the industry.
A trio of analysts recently predicted dramatic shifts in federal policy and the industry’s response to them. They predicted that Robert F. Kennedy Jr.’s presence in a yet-to-be-defined healthcare role will reshape how vaccines are regulated, since he has emerged in recent years as a sharp critic of the COVID-19 jabs—whose development Trump catalyzed through his first administration’s Operation Warp Speed effort.
The analysts also foresaw a friendlier climate for mergers and acquisitions, which they said will benefit smaller biotechs, but a mixed bag for biopharma giants because FDA independence from the administration remains uncertain.
This week, Trump himself signaled even further far-reaching changes for biopharma by naming allies Elon Musk and Roivant Sciences founder and former CEO Vivek Ramaswamy as co-leaders of a new Department of Government Efficiency intended to “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal agencies,” Trump stated on Musk-owned X. Those agencies include several that interact with biopharma—from the FDA and NIH to the U.S. Centers for Disease Control and Prevention (CDC).
Among investors seeking, and offering, answers is Ali Pashazadeh, MBBS, the founder, chairman, and CEO of Treehill Partners, a London-based investment firm providing strategic and transaction advice to CEOs, leadership teams, investors, and stakeholders of biopharmas and other companies in the broader healthcare space.
Pashazadeh discusses the likely effects of Donald Trump’s return to the White House in an exclusive interview with GEN Edge. (This interview has been lightly edited for length and clarity)
GEN Edge: How do you interpret the election results?
Ali Pashazadeh: We’d all braced ourselves for a couple of days’ worth of challenges and uncertainty, and the news [of Trump’s victory] just happened. There was a reaction [from pundits] to what happens if RFK Jr. and his entourage end up in a seat of power, and how will that look? The initial reaction, I think, fell 95% into, ‘We have an anti-vaxxer, and we’ve got people with a belief system as opposed to a data-driven system, and what is that going to mean for the different sections of healthcare?’ I think the reaction was understandable.
About five percent of people were taking more of a balanced view, that maybe this could be a positive driver for change. We as in Treehill have been talking for quite a while about a need for change, in the sense that we can have more efficient drug development, we can be looking at companies to increase transparency and disclosure when it comes to clinical trial readout, and so on and so forth.
Looking at it from a positive perspective, I think this could be the catalyst for review that we’ve been waiting for, for a long time. I’m not talking about fluoride and vaccines, but about clinical trial disclosure. There’s been a lot of things that we’ve talked about, and the system hasn’t, to a large extent, changed. We as Treehill have talked about clinical trial disclosure, and a couple of months later, the FDA expressed a similar view. But change hasn’t really come about at the rate that we had hoped.
If the new administration has fresh thinking and fresh blood, I think on the upside we have an opportunity to start all the way through drug development, reimbursement, pricing, etcetera, and move towards positivity in terms of change and improving the market. As long as the administration stays away from having a belief system—what I mean is, ‘this is what I believe, but actually isn’t underpinned by data’—I think this could be a positive area for focus.
GEN Edge: How should the new administration apply this data-driven approach to vaccines?
Pashazadeh: If we think of vaccines for a second, over the past 29, 30 years, I as a doctor have seen one to two subarachnoid hemorrhages. I’ve probably [examined] over 1000 patients suspecting of it, but I’ve very rarely seen spontaneous subarachnoid hemorrhages or periannular symptoms which have popped and I’ve been sitting within an ER context.
Over the past 14 months, I’ve lost one friend to a subarachnoid hemorrhage. I’ve nearly lost a second friend to a subarachnoid hemorrhage. And four other people within a 2 kilometer [1.24 mile] radius have had subarachnoid hemorrhages. Now, I’m not saying that this is [due to] a vaccine; there’s no data to support the vaccine [being the cause]. But we should be able to ask the question, what commonly links these patients together? And if there is a common stimulus or a common factor, we should be able to question that. We would have done that at any stage in our medical careers.
However, when it comes to vaccines, if you raise questions, you’re going to immediately be put into the category of an anti-vaxxer. Again, going back to why do I think it’s positive, it’s because as a clinician, I would always start off with, what are the data codes that you tell us? Take away emotions, the same way when it comes to drug development, take away emotions and views and perceptions, where does the data lead us? And because the arguments are constructed in that way, I would always lean towards, there will be more positive change than negative.
GEN Edge: Will that positive change be enough to prevent drug and vaccine developers from accelerating development overseas and slow walking it in the U.S. due to the uncertainty?
Pashazadeh: No, I think it’s still [U.S.]-bound. Almost every conversation we have, people have already gone down the route of developing drugs in Australia and trying to then bring it back to the U.S. I’d say 95% of those have failed, and it’s very clear why they’re failing. It’s got nothing to do with Australia. It’s the quality of the drug development team around that product, not the product, and not the geography. They go for the tax break, and it hasn’t worked for many people.
The ability to develop offshore and bring it onshore has been used a lot. But what we’ve seen is, I’d say probably about 85% of the time, we see that same data being regenerated within the U.S. market before established investors step in. So, you end up saving some time, but you end up wasting more time reinventing that data for a second period.
GEN Edge: Can we expect Vaccine Adverse Event Reporting System (VAERS) data beyond initial report data to be made public, since this is an area where critics of the COVID vaccines have taken issue?
Pashazadeh: I would think so. And when I talk about this in the U.K. context, everyone talks about an investigation, which then always puts one in the position of, are you someone who is a conspiracy theorist? Or are you someone who is trying to scapegoat someone? I don’t think that’s the point.
We’re trying to learn from what happened last time, to make sure we don’t do it next time. There will be a next time at some point, maybe, a year from now, 10 years from now, 100 years from now, so that we should use the COVID situation as an opportunity to ask tough questions. And the report and the investigation should be targeted towards that.
The other point here is that one of the things that I hold very dear to myself as a clinician is accountability. When the pilot’s flying a plane, he or she takes the decision on where they fly. They have a co-pilot. They have a consult tower. We don’t as passengers go in and say, actually, I think we need to change it up for people a little bit.
GEN Edge: How much could such accountability build back support for the nation’s public health effort, which drew so much criticism during COVID-19?
Pashazadeh: What we saw during COVID is people who were not clinicians, who were not taking primary responsibility for patients, making decisions that impacted patients’ outcomes. So, if someone’s going to make a policy change, they need to be held accountable, very much like the clinicians, who then have to implement those.
What I would like to see is, if we’re making changes that impact patients’ lives, then there needs to be a direct feedback loop to the people who make those changes. I think the minute you do that, you’ll see that people make very, very different decisions. They’re very good at standing behind the pilot and saying, I think you need to change the altitude a bit. When they’re flying the plane, they will fly in a far more conservative manner.
GEN Edge: Soon after Election Day, Robert Kennedy Jr. did several interviews where he focused on dismantling food and nutrition regulation more than biopharma, even going as far to say he wasn’t going to take away vaccines. Is this a pivot from Kennedy? Should the biopharma industry take some reassurance from that?
Pashazadeh: My guess is that what he’s done is a smart move. He’s moved on to a topic where he’s still ahead of the curve and he’s talking about topics that we can’t really challenge on. He would need to be, or the team would need to be, sitting in a seat and then saying, okay, I’ve seen the data, this is my conclusion, and this is what I implement.
I think for him at this point to have stepped in and said, now that I’m not even in the seat, by the way, these are going to be my policies or this is what I’m going to implement, I think it would have been a couple of steps too far. I do think that it’s a very smart sidestep onto other topics that are probably equally as worthy in terms of discussing.
GEN Edge: Back in October 2023, Treehill launched a service aimed at optimizing the biotech drug development process by complementing services offered by contract research organizations (CROs). How can the Trump administration help streamline drug development?
Pashazadeh: I’ve been working for a long time on Treehill’s clinical development optimization model. And the fact is that the drug development sector really doesn’t operate in terms of commercial viability. It sort-of stumbles from one clinical trial to the next with no plan to get to a commercially viable drug, even if it thinks towards commercialization.
The Trump group might not understand or necessarily appreciate the environment in which drug developers operate, or they might not appreciate a full range of issues that we might consider differently. But they are, at heart, businessmen. They are, at heart, commercially viable people that understand profit: Is there something essentially for biotech to hook towards commercial viability? Is there an ROI [return on investment] on what biotech does?
I think if one sat in front of the Trump administration and talked about clinical trial efficacy, and just threw some statistics out there that Treehill published 13 months ago: Of the 1,200 clinical or commercial stage programs we evaluated, 5% of those—only 5%—were commercially relevant at the time of launch. 60% of those studies had no commercial or clinical utility. 40% of studies being run would have had material data capture.
If you run that through a series of business brains, they would sit there, and they would look at it and they would say, we could do better. That’s why I think at the end of the four years [of Trump’s second administration], we’ll be in a better position than we are today.
GEN Edge: Would doing better mean more use of AI?
Pashazadeh: I don’t think you need the ‘A,’ I think you need the ‘I.’ … If we look at I only, we look at who the administration seems to be putting around themselves. So you’ve got Vivek [Ramaswamy], who has taken a traditional model and turned it on its head and done amazing things with Roivant. You’ve got Elon Musk, who has done amazing things across a number of verticals.
So as long as you’ve got an inquisitive brain who is commercially successful and is robust in their analysis of the situation, I think you can significantly improve the current system. You just need the ‘I.’ You need a Vivek. You need an Elon Musk, and there’s a lot of other people who are of that kind of caliber, and you put them into the room, and you say, this is where we are. How can we improve the system, get better drugs to patients at a better price, at a lower risk? I think that benefits biotech, that benefits large pharma, and that will benefit patients.
GEN Edge: You have said that there’s no longer long-term certainty investors will reinvest in biopharma, which would suggest a dot-com-like reset for life sciences, ultimately. How would life sciences investment, and the industry as well, evolve?
Pashazadeh: If we think about it for a second, what is the silent killer? The silent killer at the moment in terms of drug development is a couple of things. One, a lot of companies have been treading water for four years. Patent life hasn’t gotten longer. Patent term extensions aren’t going to cover all of that. And I’d say about 20% of companies we meet at the moment who have a commercially interesting product have become non-viable as a company in terms of funding that program because there isn’t enough patent life left.
They’ve done the right thing; they haven’t done the wrong thing. They have been cash conservative, and they’ve spent time raising capital, but they’ve just run out of patent life, in which case they’re commercially non-viable. So, is there anything we could do in terms of patent strategy? Being more conservative in patenting products earlier on, is there any review of the patent framework? I think that’s one thing that you can imagine in Elon Musk or Vivek taking a look at it.
GEN Edge: It would seem that there’s two ways to achieve that: Either longer duration of patents or shorter reviews at the U.S. Patent and Trademark Office.
Pashazadeh: Correct. And I think having been someone who’s been advising companies on restructuring—we’ve restructured 120 biotech companies—if we look at the uncertainty around patents, it is significant, absolutely significant because you’re not sure whether you actually have a patent and how robust that patent is for geography, etcetera.
If we look at smaller biotech, a lot of them are being advised by patent attorneys: ‘The minute you have an idea, I need you to patent it.’ The advice you should be getting is, how long can you wait to patent that for your long-term patent strategy? I’m seeing about 10% of patent attorneys advising their clients not to patent and to make sure they’ve got everything in place, wait to the very last moment. That differs by molecule, by company, by stage, etcetera, to patent because of the extended timeline.
I can, again, imagine AI coming in and saying, okay, we have 200 companies trading below cash on the exchange. How are those companies going to get liquidity? We’ve got a lot of foreign issuers who are trying to come to the U.S. market and they’ve got very interesting products but actually can’t access U.S. capital. How do we work with those companies to bring in capital? We have a lot of companies that will become unfundable because of how much patent life they’ve got.
What can we do around that? And I’m not just tabling [raising] the questions. The fact that there’s even a question to be tabled is what I would welcome, because then you can actually have a conversation.
GEN Edge: So the reason investors have not returned to the sector long-term are factors unique to life sciences, such as patenting, as opposed to the global post-pandemic slowdown?
Pashazadeh: Correct. And if we think about the uncertainty, it’s a bit like building a bridge. You need to have two areas that you can actually put your bridge down, the vertical of the bridge. For example, Merck [& Co.] has over 480 combination products with Keytruda®. How many of those are unpatented? If you fund it, what are you funding it to? Are you funding it till it gets licensed? Are you funding it till it gets commercially launched? Are you funding it for profitability, because only about 3% of biotech companies find a commercial partner? What happens to the other 97%? Why are you funding them unless there’s a route to market?
So, we have the perfect storm. We have an illiquid market. We’ve got the companies that have liquidity not really cycling the money back. They’re not really licensing the money back. These companies have no route to market. So, if you’re sitting there in Phase II with great Phase II data, and you want a Phase III, would I fund you? No, I wouldn’t fund you.
Why would I fund you? I only want to fund you if I know you can even go public, you can launch a product, you can commercialize a product, and you can return money to investors. I’m not just there academically to fund a Phase III so you have an approved product and no way to commercialize it.
GEN Edge: How should investors, drug developers, and the rest of the sector be preparing for a second Trump administration?
Pashazadeh: We’ve got great innovation. We’ve got great innovators. We’ve got an incredibly efficient system globally. We’re seeing very interesting science come out of Korea. We’re seeing very interesting science come out of China. We’re seeing a great number of the CROs moving to being world-class drug developers in terms of the efficiency numbers we talked about, actually embracing those numbers and improving upon them.
So, I think it’s a very exciting time in the market to invest in healthcare. However, the investment is not purely looking for capital. What we say to companies is, when you’re going to an investor and looking for an investment, are you investable? What I mean by investable is, you need the capital, I guess, but do you have the capability to take that capital and provide a return on that investor’s investment? And 85% of the companies we sit in front of do not have the capability.
We’re seeing an acceptance from a lot of companies saying, we have the drug, the molecule, we have the infrastructure, we don’t have the Phase III drug development capabilities, and they partner up with us. We provide some of the drug development capabilities. We then have the ability to then move that drug forward. So innovative drug development, I think, is going to be the flavor of 2025.
