Two years into a drawn-out downturn, the biotechnology sector finally got news that might buoy its fortunes.
In December, the Federal Reserve signaled plans to cut interest rates next year, accelerating a market run that has helped biotechs’s two main stock indexes finish 2023 in the green.
Industry watchers are cautiously optimistic investors may come back to biotech as a result. In notes to clients at the end of the year, Jefferies analyst Michael Yee predicted rate cuts would push the sector higher in 2024. Similarly, Mizuho Securities analyst Salim Syed speculated a “broader sector rally” could be coming.
“Though likely unintentional, the Fed’s more recent optimism seems to have preserved the adage that biotech doesn’t have more than two consecutive down years,” Syed wrote.
Macroeconomic forces can only carry the sector so far, though. Innovative new drugs, and the study data that supports them, are what sustains investors’ attention.
A group of imminent clinical trial readouts, then, could either speed or stall any biotech momentum. Here are 10 to watch:
Vertex Pharmaceuticals has spent years trying to branch out from the cystic fibrosis medicines that account for much of its revenue. That strategy started paying off last year with progress across a number of pipeline programs and a stock run that sent company shares to record highs. Vertex could climb even higher if an experimental medication succeeds in studies in acute pain that are set to read out imminently.
Vertex’s treatment, known as VX-548, has shown promise in several different settings in both acute and chronic pain. Those results have brought Vertex to the precipice of bringing a new, non-addictive painkiller to market.
Yet questions about VX-548’s potential persist. In a recent report, analysts at the investment bank Stifel pointed out flaws in the mid-stage studies Vertex completed, such as the removal of efficacy data from a particular trial site in one study and a lack of evidence that higher doses are more powerful. Pain drug studies are also notoriously difficult, as the trial goals are subjective measures that can be confounded by a placebo response.
“Basically, pain is really hard,” Stifel analysts wrote.
In early 2024, Vertex will release results from a pair of placebo-controlled studies and a third, single-arm trial, in different forms of acute pain. Late-stage studies in chronic pain are following. The financial implications for Vertex are enormous, with some analysts estimating VX-548 could generate more than $10 billion in peak annual sales — more than the company’s cystic fibrosis drugs. — Ben Fidler
2023 could’ve been a turning point for Alnylam Pharmaceuticals. Though the pioneering developer of RNA interference medicines has already brought five drugs to market, it’s never been profitable. A new approval for one, Onpattro, in a genetic heart condition called transthyretin amyloidosis cardiomyopathy, was expected to finally change that. But the Food and Drug Administration instead criticized Alnylam’s results at a public meeting and later rejected the company’s application, bucking the recommendation of one of its advisory committees.
Alnylam has since lost about one-fifth of its market value and abandoned plans to seek approval of Onpattro in TTR cardiomyopathy. But it could rebound if a drug known as vutrisiran succeeds in a study that’s expected to produce results early this year.
Like Onpattro, vutrisiran is sold for a rarer form of TTR that affects the nerves. But it’s more convenient, administered through a subcutaneous injection rather than via infusion every few weeks. Patients also don’t need to take steroids to prepare for treatment. Analysts estimate the drug could bring in billions of dollars in yearly sales, assuming it’s approved for use in cardiomyopathy, too.
The study it’s being tested in, Helios-B, could lay the groundwork for such an approval. Unlike the trial of Onpattro, it’s gone on for long enough to show whether vutrisiran can extend lives and prevent hospital stays. A positive effect on health outcomes supported approval of the only available medicine for TTR cardiomyopathy, Pfizer’s pill Vyndamax, as well as an application BridgeBio Pharma recently filed for a similar type of drug.
Analysts think vutrisiran could prove superior, given it works differently than Pfizer’s and BridgeBio’s drugs. — Ben Fidler
Roche’s trial has been among the most closely watched in oncology for some time, and for good reason. The outcome could determine the worth of a class of cancer immunotherapy treatments that home in on a protein called TIGIT, which has become a top target of drugmakers in recent years.
The study, Skyscraper-01, is testing Roche’s drug tiragolumab and another immunotherapy, Tecentriq, against Tecentriq alone in patients with advanced lung cancer. Though tiragolumab previously missed one of the study’s two main objectives, failing to significantly affect disease progression, the Swiss drugmaker hopes the medicine can hit its second and more meaningful goal — helping patients live longer.
Last year, an interim analysis Roche completed but never disclosed was inadvertently released and discovered by Wall Street analysts. The results suggested tiragolumab may be extending lives, with one analyst, Leerink Partners’ Daina Graybosch, noting at the time the early results “bode well for a maintained clinical benefit.”
The surprise reveal kept hope alive for TIGIT-targeting medicines, which have largely disappointed in clinical testing so far. It also heightened anticipation for the final results, which are expected in early 2024. — Ben Fidler
Amylyx’s Relyvrio is a blockbuster-to-be according to some Wall Street analysts. Of course, to meet such expectations, the drug has to stay on the market.
The FDA cleared Relyvrio last year as a treatment for ALS, based on a roughly 140-patient study that found it offered small, but significant, benefits on disease progression and survival. By the time approval came through, Amylyx had already started another, much larger trial to confirm the earlier results. That trial, codenamed “Phoenix,” should wrap up by early March.
Relyvrio received full approval from U.S. regulators, meaning the company isn’t required to do additional testing for it to remain available. Yet the stakes are still high for Amylyx. FDA staff have been critical of the ways the biotech collected and analyzed data in its smaller study, and, last year, a top agency official called on the company to commit to pulling Relyvrio should confirmatory testing fail.
“To be clear, if [the trial] is not successful, we will do what is right for patients, which includes voluntarily removing the product from the market,” Justin Klee, Amylyx’s co-CEO, said in response.
Whether Amylyx would actually withdraw Relyvrio remains a point of debate. G. Caleb Alexander, a professor of epidemiology and medicine at Johns Hopkins Bloomberg School of Public Health and an adviser to the FDA, has said that the agency “significantly understates the complexity and likelihood of their pulling a product from the market.” — Jacob Bell
The first big readout for a potentially new type of depression drug could come as early as June, according to a federal database.
The late-stage trial, which has enrolled around 540 participants, is testing whether an experimental Johnson & Johnson medication called aticaprant can work as an add-on therapy to improve symptoms in certain adults with major depressive disorder.
Aticaprant inhibits what are known as KORs, or kappa opioid receptors, a type of protein involved in a variety of nervous system functions — from stress to pain to mood regulation. J&J has high expectations for the drug, classifying it as a key growth driver during a recent research and development event and predicting peak sales of $1 billion to $5 billion.
J&J isn’t the only one seeing an opportunity, however. Neumora Therapeutics, a richly funded biotechnology company, has its own KOR-targeting medicine in late-stage development. AbbVie will also have one in its pipeline should a planned $8.7 billion purchase of Cerevel Therapeutics close.
In a December note to clients, RBC Capital Markets analyst Brian Abrahams, who covers Neumora, wrote that the J&J results will be important for validating the KOR drug class.
Abrahams estimates Neumora’s candidate is three to six months behind aticaprant. But, given the “high unmet need in depression, the size of the market, and the lack of new treatment options, we believe there is sufficient room in the market for both drugs,” he wrote. — Jacob Bell
A lot has changed since Gilead Sciences paid $21 billion for biotechnology company Immunomedics in 2020.
Gilead acquired Immunomedics to get ahold of a breast cancer drug, Trodelvy, it believed would be a key part of a growing oncology business. At the time, one analyst estimated Trodelvy could bring in peak sales of nearly $5 billion in breast tumors alone, and potentially more if successful elsewhere.
Trodelvy has a long way to go, with annual sales reaching $764 million through the first nine months of this year. Its progress is also overshadowed by Enhertu, a similar type of medicine from AstraZeneca and Daiichi Sankyo. Enhertu broke the billion-dollar mark in 2022, is marketed for more tumor types, and won a first-of-its-kind approval in breast cancer. Trodelvy, meanwhile, has faced questions about its benefits, as well as whether it can compete with Enhertu and a growing array of rivals.
One major opportunity lies just ahead. Gilead will soon reveal data from a study testing Trodelvy against chemotherapy in patients previously treated for a common form of lung cancer — a setting that could unlock a multibillion dollar market in which a top competitor from AstraZeneca and Daiichi delivered mixed results.
AstraZeneca and Daiichi’s findings have lowered expectations for Trodelvy. But differences in Gilead’s drug and trial design could lead to a better outcome, Leerink Partners analysts noted in October. — Ben Fidler
The first big test of whether cancer drugs known as BTK inhibitors can also treat autoimmune diseases ended in disappointment for the German pharmaceutical giant Merck KGaA. The company’s prospect, evobrutinib, fared little better than a standard therapy in a pair of Phase 3 studies in multiple sclerosis, wiping out billions of dollars in share value.
The study setback closely followed news the FDA had partially suspended testing of another entrant in the BTK drug race, Roche’s fenebrutinib, due to safety concerns. That wasn’t the first time the FDA had flagged signs of liver damage among BTK blockers: The regulator previously halted a test of Merck KGaA’s medicine as well as a study of Sanofi’s tolebrutinib, the next drug in the group headed for a Phase 3 readout.
Sanofi has high hopes for tolebrutinib. The drug, acquired through a multibillion dollar deal in 2020, is one of 12 pipeline prospects it highlighted in December as future blockbusters. Like Roche and Merck KGaA’s drugs, it’s a newer type of BTK inhibitor designed to more easily penetrate the blood-brain barrier, which is meant to make it useful in treating several forms of multiple sclerosis.
Still, tolebrutinib faces skepticism in the wake of Merck KGaA’s failure. In that trial, the drug Merck KGaA’s tested its BTK blocker against, Aubagio, performed surprisingly well. In a research note at the time, Jefferies analyst Brian Balchin speculated current multiple sclerosis studies may now be enrolling less sick patients than before, making it more challenging for a newer medicine to show a benefit. That could impact other ongoing studies, “namely Sanofi’s tolebrutinib,” he wrote.
Results are expected in the middle of the year. — Ben Fidler
The first gene therapy for Duchenne muscular dystrophy arrived last year when the Food and Drug Administration granted an accelerated approval to Sarepta Therapeutics’ Elevidys. But it’s only available to young kids, and a key study meant to confirm its benefits missed its main goal. That’s left an opening for Sarepta’s closest competitor, Pfizer, to catch up.
Pfizer is currently running a Phase 3 trial for a similar type of Duchenne gene therapy. Unlike Sarepta, Pfizer decided not to seek a speedy approval before getting the results, arguing the late-stage study would bring clearer answers.
Pfizer previously told investors to expect an early look at that study by the end of 2023. But in December, it switched up its plan, deciding instead to wait until the final results are ready in 2024.
Pfizer appears to believe it has a better chance to top Sarepta by letting the study run its course, hoping a larger and longer sample size might yield a clear treatment benefit. In a December conference call, CEO Albert Bourla said delaying the readout will give “more opportunity [for] the product to be successful.”
If it is, Pfizer would rebound from an earlier setback. Testing of Pfizer’s gene therapy was slowed by safety concerns, including the death of a study participant. Sarepta hasn’t dealt with the same issues, but it also hasn’t definitively proven its treatment can change the trajectory of Duchenne. — Jonathan Gardner
Ever since messenger RNA technology helped create vaccines for COVID-19, investors have been waiting for a second act. Demand for the shots developed by partners Pfizer and BioNTech, as well as Moderna, has cooled, depressing the companies’ share prices and dwindling their revenue.
For Pfizer, the fall has been particularly hard, as plummeting sales of its COVID-19 shot and antiviral pill forced revised revenue forecasts, a cost-cutting plan and one of its worst stock market years in recent history. Moderna, too, is reeling, with shares dropping 50% in 2023 and revenue projections dialed down.
One area the developers have circled is influenza, arguing the speed and adaptability of mRNA technology can be used to quickly match a new year’s prominent strains. Current flu shots are only about 40% to 60% effective, so there’s room for improvement. But though Pfizer and Moderna succeeded in late-stage trials, some analysts have criticized the results and questioned the shots' sales prospects.
Some Wall Street analysts think the two rivals could have better luck with combination vaccines designed to protect against the flu as well as COVID-19. A two-pronged vaccine could make fall immunizations more convenient and spur uptake, which “we see as a more reasonable commercial argument,” wrote Leerink Partners analyst Mani Foroohar, in October.
Moderna appears positioned to get to the finish line first. Results from its Phase 3 trial could be coming in the first half of this year, according to a federal database. — Delilah Alvarado
The world's first CRISPR gene editing medicine has arrived, with the approval of Vertex and CRISPR Therapeutics' Casgevy for sickle cell disease in the U.S. and U.K.
While Casgevy is a complex treatment that comes with several notable risks, it's considered to be near curative, eliminating in testing the pain crises people with sickle cell experience.
But a number of biotech companies still think there's room for improvement, Beam Therapeutics among them. A second generation CRISPR company, Beam uses a derivation of the Nobel Prize-winning technology that allows it to change a single "letter" in a string of DNA code.
Beam has recently begun a study testing this method, known as "base editing," for treatment of sickle cell. It expects to share initial data from the first few patients treated in the study next year.
The readout is important for Beam, which, while high-profile and well funded, was recently forced to restructure its research and lay off staff. The data will also be a major checkpoint for base editing, clinical trial results for which have only come from Verve Therapeutics to date.
What the initial cut of data won’t prove, at least not yet, is whether Beam's approach can improve on Casgevy. Still, that likely won't stop investors and physicians from making comparisons. — Ned Pagliarulo