Can the biotechnology industry regain its footing after months of sliding stock values and setbacks?
Recently, there have been some positive signs. Dealmaking has picked up. Drug pricing reform — a persistent concern for the industry and its investors — hasn’t advanced. Notable medical advances have come this year in breast and lung cancers, while CRISPR gene editing continues to show promise. New types of drugs were approved for genetic heart disease and diabetes, too.
The second half of the year could bring similarly important results from clinical trials testing drugs for Alzheimer’s disease, cancer and vision loss. Positive data, if it comes, might give biotech a needed boost.
Here are 10 trials to watch:
So far, the journey of Eisai and Biogen’s Alzheimer’s treatment lecanemab resembles the companies’ development of Aduhelm, which was controversially approved by the regulator last summer only to face substantial resistance from doctors and insurers.
It was Aduhelm’s approval that opened the door for lecanemab, allowing Eisai and Biogen to ask for accelerated approval on the basis of its ability to clear toxic plaques of a protein called amyloid.
But unlike with Aduhelm, Eisai and Biogen have a chance to make a cleaner case for approval, as they have a large confirmatory study underway which could reinforce those early data.
Positive results in the trial, called Clarity AD, would go a long way to convincing the FDA of its efficacy, as well as bolster the agency’s decision-making in clearing Aduhelm. A negative outcome, by contrast, would raise doubts about similarly acting treatments in development by Eli Lilly and Roche.
A readout is expected by this fall, likely before the FDA would make an approval decision. The companies enrolled nearly 2,000 patients with early Alzheimer’s disease, comparing lecanemab to a placebo over 18 months.
The results of one of biotech’s most polarizing clinical trials, an Alnylam Pharmaceuticals study in a rare disease known as transthyretin amyloidosis cardiomyopathy, are expected imminently.
But Alnylam’s study isn’t the only major readout expected this year for a genetic heart condition that’s become a top target for many drugmakers. By the end of 2022, Intellia Therapeutics will report findings from an early stage trial testing a gene editing treatment in patients with TTR cardiomyopathy.
Intellia’s treatment has already shown promise in patients whose disease is characterized by nerve damage, findings that served as the first clinical proof CRISPR gene editing can be successful inside the human body.
The nerve form of the disease is rarer and has several effective treatments, though. Intellia executives have said that, going forward, the company is focusing on cardiomyopathy, a larger market opportunity with fewer options.
As with Intellia’s previous data, study results will reflect disease progression, rather than outcomes like reduced risks of hospitalization or death.
Drug developers in TTR cardiomyopathy face new questions, too. Following the failure of a BridgeBio Pharma medicine, experts and industry analysts have wondered whether clinical development plans might need to be adjusted.
If Intellia’s results are positive, they’d raise the chances of a one-and-done treatment for a condition thought to affect as many as half a million people in the U.S. and Europe. Success would also put pressure on Alnylam, Ionis Pharmaceuticals and others invested in the field.
Intellia will report initial results from another CRISPR drug in hereditary angioedema later this year as well.
Merck & Co. paid $11.5 billion to buy Acceleron Pharma and its drug sotatercept in the industry’s second-largest deal last year.
Sotatercept, once the focus of a partnership between Acceleron and Celgene, had appeared to hit a dead end in 2016, when research was deprioritized. But Acceleron breathed new life into sotatercept by testing it in pulmonary arterial hypertension, a rare and potentially deadly type of high blood pressure in the lungs.
Positive Phase 2 data reported in 2020 and later published in The New England Journal of Medicine sent Acceleron’s shares soaring. Merck acquired the company less than two years later, betting on sotatercept’s potential as a first-of-its-kind treatment for the disease.
Merck will soon see whether that gamble pays off. By the end of the year, Merck could report results from a study called STELLAR, the first of four Phase 3 trials of sotatercept. Merck is counting on sotatercept not only to justify its sizable investment, but to replace revenue it will lose when its top cancer drug Keytruda goes off patent in 2028.
Success isn’t a sure thing, though. The drug’s fate in the STELLAR trial will come down to results on a walking test that is viewed by some on Wall Street as an unpredictable study goal.
The value of Karuna Therapeutics, a Boston-based developer of brain drugs, rose by billions of dollars in late 2019, after its most advanced experimental medicine scored positive results in a schizophrenia study.
The study, which enrolled about 180 participants, showed that those taking Karuna’s medicine, known as KarXT, experienced significant reductions in the severity of their symptoms compared to those given a placebo. Karuna also said KarXT was well tolerated, an important finding given that one of the drug’s active ingredients caused concerning side effects in clinical trials a few decades ago.
Karuna now hopes to build the case for its drug through two larger clinical trials — the first of which, named EMERGENT-2, should produce results by the end of September. The trial, which is evaluating nearly 250 adult patients with schizophrenia over a five-week period, finished enrollment this spring.
In a recent note, Jefferies analyst Chris Howerton wrote that his team puts the odds the trial succeeds at 75%. If KarXT goes on to secure FDA approval, Howerton claims it should have “no issue” surpassing $1 billion in annual sales.
Historically, pharmaceutical companies have struggled to develop treatments for psychiatric disorders. The last few years have seen drugs from Neurocrine Biosciences and Acadia Pharmaceuticals fail as potential treatments for schizophrenia.
Yet, there have also been several victories. Pfizer’s neuroscience spinout, Cerevel Therapeutics, in 2021 posted positive results from an early-stage trial of its experimental schizophrenia medicine. The Food and Drug Administration also approved two new schizophrenia medicines — one from Intra-Cellular Therapies, the other from Alkermes — in 2019 and 2021, respectively.
Karuna expects EMERGENT-3, its other schizophrenia study and a trial delayed by the war in Ukraine, to produce results in early 2023. The company also intends to start a late-stage program this year evaluating its drug as a treatment for psychosis in patients with Alzheimer’s disease.
The past couple months have been tumultuous for Seagen, a developer of cancer medicines called antibody-drug conjugates and one of biotech’s largest companies. In May, its co-founder and longtime CEO Clay Siegall resigned amid an investigation into his arrest for alleged domestic abuse. And this month, The Wall Street Journal reported Seagen might sell itself to Merck, which took a $1 billion stake in the company as part of a partnership in 2020.
Amid the upheaval, an important clinical test lies ahead for Seagen: the results of a mid-stage study testing its cancer drug Padcev alongside Merck’s immunotherapy Keytruda in newly diagnosed, advanced bladder tumors.
Even before the acquisition rumors began, analysts considered the trial to be a catalyst for Seagen. Though the company has brought four drugs to market, it still isn’t consistently profitable and faces questions about its long-term growth.
Analysts believe a positive result in the bladder cancer study could support an accelerated approval filing and unlock a market opportunity worth about $7 billion in revenue, speeding Seagen’s path to profitability.
Strong data would also be a boost to Merck. Keytruda will lose patent protection later this decade, but its life cycle could be extended if drug combinations like a regimen with Padcev prove successful.
Six years ago, a biotech named Ophthotech was among the industry’s most closely watched companies. Wall Street viewed a prospective eye drug it was developing as a threat to top-selling medicines from Regeneron and Roche. Shares climbed as high as $79 apiece before the treatment failed multiple Phase 3 tests, triggering layoffs, a strategic reset and a name change to Iveric Bio.
Though Iveric rebranded as a gene therapy maker, a biologic drug held over from the Ophthotech days remains its most valuable asset. Known as Zimura, the drug is in clinical testing for geographic atrophy, a form of blindness with no effective treatments. Phase 3 results are expected this fall.
Iveric is following a blueprint laid out by Apellis Pharmaceuticals. Both are developing drugs that tamp down the activity of the complement system, a part of the body’s innate immune response. Apellis’ medicine produced mixed results in late-stage testing that the company used to support an approval application in June. Now, Iveric aims to catch up.
Zimura already succeeded in one Phase 3 trial, the results of which were published in the journal of the American Academy of Ophthalmology in 2020.
Success in a second study as well could set Iveric’s drug apart from Apellis’ medicine. The FDA has also signed off on Iveric’s trial design, which “greatly derisks its regulatory path” if Zimura comes through, Jefferies analyst Howerton wrote in March.
Last year, Amgen won approval for a cancer drug that represented a milestone in research efforts to target medicines to the genetic signatures of tumors. Amgen's drug, called Lumakras, is aimed at a gene called KRAS that's often mutated in cancers of the lung, colon and pancreas.
For four decades before, scientists and drug companies alike had tried and failed to design a medicine that could effectively bind to proteins produced by mutant KRAS. Lumakras was the first that worked, shrinking tumors and slowing disease progression in trials of lung cancer patients.
That early promise secured it an accelerated approval from the FDA. But its toughest test is a larger, ongoing study that pits Lumakras head to head against a standard chemotherapy for KRAS-mutated lung cancers.
Results are expected in the third quarter and, if positive, could allow Amgen to convert its conditional clearance to a full approval. Strong data would also help the biotech company maintain its lead ahead of a lengthening list of rival drugmakers that aim to follow Lumakras with their own therapies.
While Wall Street largely expects the study to succeed, doctors polled by analysts at Jefferies noted that responses to chemotherapy can be variable and therefore the difference between the Lumakras and chemo groups may not be large.
Amgen and its competitors are also studying KRAS drugs in combination with other treatments, which may yield better results, particularly outside of lung cancer.
Nonalcoholic steatohepatitis, a fatty liver disease thought to affect millions of people, has proven a tough target for drugmakers. Several closely watched experimental medicines failed key clinical trials. And the only one to succeed in a Phase 3 study, a drug from Intercept Pharmaceuticals, still hasn’t passed muster with U.S. regulators.
Those setbacks have left room for others to seize on what Wall Street analysts still believe to be a multibillion dollar market opportunity. The first is Madrigal Pharmaceuticals, whose drug candidate is one of only a few treatments to advance into late-stage testing for the disease, commonly called NASH.
Madrigal went public in 2016 via a reverse merger with failed cancer biotech Synta Pharmaceuticals. After shedding Synta’s oncology research, Madrigal pursued NASH with a drug that promotes the activity of thyroid hormone, which helps regulate liver function.
That drug, known as resmetirom, positively impacted certain biomarkers associated with liver health without serious side effects in clinical testing. But it’s unclear whether resmetirom can change the course of NASH — something other drugs with positive biomarker results later failed to do.
Some are skeptical. Raymond James analyst Steven Seedhouse, for instance, argued in a January note to clients that resmetirom “is not a good drug for NASH.”
The answer will come in the fourth quarter, when Madrigal should deliver top-line results from its Phase 3 study. Madrigal has two chances to succeed. In May, it changed the design of the study, elevating what had been a secondary study goal into an additional primary endpoint.
While “some investors may question the timing,” the trial now “more closely mirrors” other late-stage NASH studies, wrote SVB Securities analyst Thomas Smith, at the time.
A group of drugs aimed at a cellular target called TIGIT has, for the past few years, drawn the industry’s attention. These medicines are the latest treatments pharmaceutical companies hope can build on the success of cancer immunotherapy. Up until recently, Wall Street analysts felt strongly about their chances.
That outlook has dimmed considerably, however. Since March, Roche’s drug tiragolumab, the most advanced TIGIT-blocking candidate, has failed Phase 3 trials in two types of lung cancer. The data seeded doubt about the TIGIT class more broadly, sending shares of multiple developers lower and causing one, iTeos Therapeutics, to assess next steps.
Next up are Arcus Biosciences and Gilead, which have worked together since 2020. By the end of the year, they should report results from a Phase 2 study testing their TIGIT drug, domvanalimab, in patients with non-small cell lung cancer.
Arcus and Gilead’s drug is constructed differently than tiragolumab, which could lead to better results, wrote RBC Capital Markets analyst Brian Abrahams. Such an outcome would be a boost for Gilead, which paid $725 million last November to license domvanalimab from Arcus.
Positive data would also lift up other companies whose TIGIT drugs work similarly, like Bristol Myers Squibb and Compugen, wrote SVB Securities' Daina Graybosch.
Positive results could still be met with skepticism, though. Roche’s drug, after all, succeeded in Phase 2 before disappointing later.
Drugmakers’ push to develop more convenient, “off-the-shelf” alternatives to the personalized CAR-T treatments sold by Novartis, Gilead and Bristol Myers Squibb has become competitive, with multiple different approaches being advanced. One strategy involves genetically modifying “natural killer,” or NK, cells, which possess characteristics that the T cells involved in CAR-T therapy don’t and are thought to be safer.
NK cell therapies from Fate Therapeutics, Nkarta and a program co-developed by the MD Anderson Cancer Center and biotech Affimed have shown promise treating blood cancers without the potentially deadly side effects associated with CAR-T.
The studies are early and haven’t proven how long the effects of NK cell treatment will last. Other off-the-shelf approaches involving T cells have also struggled to match the durability of CAR-T. Some investors are skeptical that NK cells, because of their inherently short shelf life, won’t either, wrote Stifel analyst Benjamin Burnett. Already, Nkarta and Fate are testing multiple-dose regimens.
Data expected later this year from Fate Therapeutics may give some answers. The biotech will report results from a study testing an experimental lymphoma treatment, dubbed FT596, alongside the antibody drug rituximab.
As data will come from the highest dose Fate has tested so far, the outcome will be “more informative on durability” than previous updates and could therefore better indicate how NK cell treatments compare to CAR-T, Burnett wrote.
Editor’s note: A previous version of this story mistakenly indicated that Karuna’s EMERGENT-2 trial had been delayed by the war in Ukraine and that Cerevel’s data read out in 2019.