The BioPharma Dive Outlook on 2022

One year ago, the biotechnology sector was in the middle of a record run. The successful development of coronavirus vaccines and drugs had helped slow the pandemic and propelled investment into new companies going public at a historic rate. Biotech stock indexes traded at all-time highs.

But that momentum quickly vanished. Clinical and regulatory setbacks, as well as the prospect of drug price reform in the U.S., weighed on companies large and small, driving down stock prices and opening a gulf between the industry's performance and the broader market's. Newly public biotechs struggled to keep their footing, with nearly 80% of the 2021 IPO class trading below their offering prices, according to data from BioPharma Dive.

Positive clinical trial results — events that companies can use to sway investors, cut deals and raise cash — could help turn things around. And multiple opportunities lie ahead, with key studies in breast cancer, cystic fibrosis and ulcerative colitis set to read out in the first half of the year. Here are 10 to watch:

Ned Pagliarulo contributed reporting.

Insiders often refer to mergers and acquisitions as the lifeblood of the biotech and pharmaceutical industry. If that's true, then drugmakers may be in poor health following an unusually slow year.

In 2021, biopharma M&A dipped to one of its lowest levels on record, according to a report released this week by financial services provider EY. At $108 billion, the total value of these deals was only about 40% of what was seen in 2019. EY also estimates that, when looking at all the cash, debt and equity they could use to fund transactions, biopharma buyers deployed just 9% of the nearly $1.2 trillion at their disposal last year.

Still, the pressure to pursue acquisitions is mounting for many would-be buyers. Key patents protecting major products from Merck & Co., Bristol Myers Squibb, Pfizer, Novartis and others are set to expire before the end of the decade. Notably, AbbVie's $63 billion purchase of Allergan back in 2019 was made, in large part, because of the impending threat of generic competition to its blockbuster drug Humira.

Patent protection is only one concern, however. Competition in research areas like oncology, immunology and rare disease is dramatically increasing. At the same time, intense public and congressional scrutiny of drug prices has stifled one of the industry's long-used methods for lifting sales.

"To stay competitive, bigger biopharma companies have no choice but to be aggressive in their pursuit of external innovation," EY's deal experts concluded in their new report. "Simply put, they need to transact if they want to transform their businesses."

Here are five of the top questions facing biopharma dealmakers over the next year:

How much will M&A rebound?

Analysts expect that, following the recent quiet period, M&A engines are ready to start firing again. The team at investment firm SVB Leerink, for example, predicts the number of deals in 2022 will be the same or larger than in 2021, while their overall value will be "significantly higher."

"We don't see this year's preference for small tuck-in deals as a permanent shift in M&A strategy for large biopharmas; rather, it is an anomaly year with several contributing factors," SVB analyst Geoffrey Porges wrote in a December note to clients.

Of course, deals require not only an interested buyer, but also a willing seller.

For the past couple years, smaller biotechs have had a relatively easy time raising money from venture capital backers as well as the public markets, thereby making deals with large pharmaceutical companies less necessary. Yet, biotech stocks took a downward turn in the back end of 2021, stoking fears that some investors may retreat from the sector. If these concerns persist, and the market value for biotechs remains suppressed, it could result in more dealmaking.

"We expect financing options to remain open for attractive technologies, but continued challenges in the public markets could lead to a greater number of smaller companies being willing sellers in 2022," Mizuho Securities analyst Vamil Divan wrote in a recent note to clients.

Are megadeals really on the table?

Further fueling expectations of more and greater M&A is the sheer amount of cash buyers are sitting on.

Pfizer, for one, forecasts at least $65 billion in sales from the coronavirus shot it markets with partner BioNTech across 2021 and 2022. Novartis also just sold off $21 billion worth of stock in Roche, and may free up even more money through the sale or spinoff of its generic drug business.

Across the industry, SVB Leerink has identified more than a dozen large pharmaceutical companies that should have at least $20 billion in cash on hand by the end of this year.

To some, that many deep pockets raises the odds of a megadeal. Porges and his team have argued that it wouldn't be surprising to see one or more tie-ups between big drug companies in the coming months. The last such deal came in late 2020, through AstraZeneca's $39 billion purchase of the rare disease-focused Alexion Pharmaceuticals.

Additionally, several larger drugmakers have recently run into setbacks, lowering their market value and making a deal to acquire them seem less aspirational.

Perhaps the most talked about among these companies is Biogen, shares of which have been nearly cut in half since June. Last month, a Korean news outlet reported that Samsung was in talks to acquire Biogen, a story the biotech division of Samsung later denied.

Can brain drugs steal the spotlight?

For the past 20 years or so, many of the world's most powerful drug companies shied away from the brain and central nervous system, or CNS. Setbacks and failed programs were exceedingly common in neuroscience, which led drug developers to believe they didn't have a strong enough grasp of the biology and that money would be better spent on other areas of research.

But some now believe a sea change is underway. Last year saw GlaxoSmithKline mount a return to brain drugs through a deal with Alector, a biotech trying to fight neurodegeneration by harnessing the immune system, worth at least $700 million. Pfizer and Novartis also inked deals, with the former securing sales rights to a migraine drug developed by Biohaven Pharmaceuticals, and the latter teaming up with Belgium-based UCB on an experimental pill for Parkinson's disease.

Overall, the number of strategic collaborations focused on neurology was up about 50% in 2021 compared to the year before, according to the investment bank Jefferies. More deals may be on the way, too, given the renewed interest of some big pharmas and the steady crop of neuroscience biotechs that are entering the public markets.

"We predict CNS [and] neuro will remain a more investable space in 2022," wrote Jefferies analyst Andrew Tsai in a Jan. 2 note to clients.

Tsai added that his team thinks Bristol Myers Squibb, Johnson & Johnson, Eli Lilly, Roche, Takeda, AbbVie, Novartis and Biogen appear to be the "most keen" on pursuing neuroscience deals.

How much of an impact will the FTC have?

Notably, the big pharmas that have expressed interest in neuroscience seem to be preferring small- to medium-sized deals in the space — a strategy Tsai suggested may be partially shaped by a desire to avoid scrutiny from the Federal Trade Commission.

As the government body responsible for signing off on corporate mergers, the FTC holds considerable power over the pace of dealmaking. So, last March, when the agency and some of its counterparts abroad said they would be reexamining how biopharma deals are reviewed, alarm bells sounded across the industry.

"This is a pretty clear signal that the lights are no longer green," antitrust attorney David Balto told BioPharma Dive last year, adding that "companies need to be much more cautious about the deals they consider." Balto represented unions and consumer groups that objected to AbbVie's acquisition of Allergan, which was one of the deals the FTC homed in on before deciding to reassess its review process.

Since then, the FTC has gotten a new head in Lina Khan. Khan previously served as counsel to the House Judiciary Committee's Subcommittee on Antitrust, Commercial, and Administrative Law, and as a legal adviser to former FTC Commissioner Rohit Chopra.

Khan's background and her critique of big tech monopolies means it would be "reasonable" to expect deals might take longer to close or receive a greater level of inspection, Jefferies analyst Michael Yee wrote in a client note published shortly after Khan was sworn in on June 15. Even so, Yee and his team argued that "deals should still be fine" overall, upticking in the second half of 2021 and first half of 2022.

Indeed, there were 21 biopharma acquisitions worth $50 million or more in the back end of last year, compared to 14 in the front, according to data compiled by BioPharma Dive. Some of the more sizable deals of late include Merck's $11.5 billion purchase of Acceleron, Pfizer's $6.7 billion acquisition of Arena Pharmaceuticals, and CSL's $11.7 billion bid for Vifor Pharma. Should deals like these keep going through, the perception of greater regulatory scrutiny may ease.

What's going on with blank-check companies?

Initial public offerings are a typical stepping stone for many growing biotechs, but they aren't the only means of reaching the public markets.

Blank-check companies, also known as SPACs or special purpose acquisition companies, offer another option. They're created with the sole purpose of going public and then merging with a promising company in a particular industry. For biotechs, the main draw to SPACs is that they've already taken care of the often long and arduous task of running an IPO, and therefore come equipped with a deep pool of available cash.

Last year saw a step up in biotech mergers with SPACs. SVB Leerink had tallied 15 of these transactions by November, compared to six across all of 2020. In December, another drugmaker, Alvotech, agreed to a SPAC deal with gross proceeds expected to exceed $450 million.

While these deals have become common, their performance has likely left some investors wanting. Porges, of SVB Leerink, noted that SPACs achieved lower cumulative returns than IPOs in both 2020 and 2021.

The Food and Drug Administration finally looks set to get a new commissioner in early 2022, and the face should be familiar to many in White Oak: Robert Califf, who led the agency in the final year of Barack Obama's presidency.

New commissioners always face a long to-do list, especially when the position goes unfilled for as long as it did this time. Janet Woodcock, who has served as acting commissioner, is an experienced leader and known quantity for her colleagues. But lacking the backing of a presidential appointment and Senate confirmation, she wasn't in as strong a position to carry forward longer-lasting policy changes as Califf will be, if confirmed.

Califf's commitment to review FDA decision making on addictive opioid painkillers — an issue that may have kept Woodcock from consideration for the permanent appointment — will be tested almost as soon as he takes office. But other urgent matters will cross his desk in the coming months, on top of the usual cadence of drug approval decisions and the ongoing reviews of COVID-19 vaccines and treatments.

The continuing pandemic is a constant reminder of the position's importance. "This administration has left the FDA commissioner position open since January 20, almost a full year, in the middle of a pandemic," Richard Burr, R-N.C., the senior Republican on the Senate Health, Education, Labor and Pensions Committee, said during Califf's nomination hearing. "I'm disappointed that it took so long but I'm glad to see you here again sitting before this committee."

What direction will Califf take the FDA?

Califf will benefit from his previous stint in a way that a fresh appointee might not. Yet he was in office as commissioner less than a year, and came from an academic background rather than one of long government service. His main government experience before his first term as commissioner came as head of the FDA's Office of Medical Products and Tobacco for less than a year.

That outsider viewpoint can be as much an advantage as an obstacle. Califf is well-known as an advocate for innovation in clinical trials, pushing for faster and simpler data collection as well as promoting electronic information gathering. He's also advocated for greater trial diversity and pragmatic study designs.

The FDA has been under pressure to modernize its views on clinical trials for years, and having an advocate in the commissioner's office may push the agency further in that direction.

Califf's recent role as an executive at Alphabet's health-data group Verily will likely have shaped his views on these issues, although his time there has also been criticized as another example of his ties to industry. (Califf also served as a consultant and board member for pharmaceutical companies, and some lawmakers, such as Sen. Bernie Sanders, I-Vt., have cited that as a reason for not supporting his nomination.)

Will the FDA press harder on confirmatory trials?

The FDA typically grants accelerated approvals to important or potentially life-saving new drugs based on a relatively small amount of data, often using proxy measures such as patient responses. And in the past two years, the pace of these approvals has picked up. About a quarter of new medicines cleared in 2021 and 2020 received an accelerated OK, up from a fifth in 2019 and less than a tenth in 2018.

In exchange, the FDA requires drugmakers run confirmatory trials that compare the new treatment to a placebo or active therapy, using more rigorous yardsticks such as survival rates.

For many drugs and disease types, those confirmatory trials haven't been completed, and in 2021 drugmakers, under FDA pressure, withdrew several accelerated approvals. More remain unconfirmed, however, and the FDA appears set on pressing the issue further. Richard Pazdur, director of the FDA's Oncology Center of Excellence, recently told an industry audience that so-called "dangling" approvals will become a regular agenda item for the agency's panel of outside advisers.

"This is my jihad. It's going to continue," Pazdur said during the Biotech Virtual Congress organized by the analysis firm Prevision Policy, without naming specific drugs.

The process for withdrawing drugs can be cumbersome. But Pazdur indicated the oncology review office has come up with a way to hurry things along by first publishing an article outlining points of concern in a peer-reviewed journal and then laying out unfulfilled trial obligations in advisory committee briefing documents — a series of events that prompted some drugmakers to withdraw their products before the committee met.

This may be a pattern that gets repeated in the future. "People realized that there was a greater issue at stake, and that is the integrity of the program," Pazdur said, speaking on pre-meeting withdrawals in 2021. "The FDA is under scrutiny here."

How will controversy over Aduhelm impact the agency?

While Pazdur and the FDA's cancer drug office contemplate a new approach, the high-profile controversy over the agency's accelerated approval of Biogen's drug for Alzheimer's disease, Aduhelm, has shaken confidence in the program and the overall rigor of the FDA's reviews.

FDA officials and Biogen staff worked unusually closely on Aduhelm's review, and the agency's eventual approval went against the recommendation of its own advisers, raising questions about the FDA's decision-making process.

Several of those advisers resigned as a result of the approval, which is now the focal point for a review of the entire accelerated approval pathway by the inspector general of the Department of Health and Human Services.

This year, the FDA will find itself in a similarly difficult position as it reviews Alzheimer's drugs from Eli Lilly and Eisai that work similarly to Aduhelm and were also submitted for accelerated approval. (Eisai is partnered with Biogen.) If the agency takes a harder line with either Lilly or Eisai's drug, it risks undermining the approval precedent it set with Aduhelm. If the agency greenlights both, it risks further criticism of relying too heavily on an unproven surrogate measure of benefit.

Heightening the stakes will be the inspector general's review, which will examine past accelerated review practices in an attempt to determine whether FDA officials complied with relevant laws and regulations. The issue won't be going away soon, either, as the inspector general's office isn't expected to publish its report until 2023.

Will the planned PDUFA renewal go as planned?

The FDA's user fee program, which funds a significant portion of its drug review budget, is subject to renewal every five years when the law governing it, abbreviated as PDUFA, expires. In the past, renewals have been used as opportunities to set performance goals, such as deciding on 90% of drugs submitted under standard review within 10 months of submission, or new programs, such as the Breakthrough Therapy designation.

The legislation needs to pass by Sept. 30 in order to keep PDUFA programs alive, but the process for renewal tends to be orderly and negotiated between the FDA, the industry, and patient and practitioner groups. The agreement, outlined in a "commitment letter" released last August, included some enhancements to drug review.

Among them were commitments to reinforce cell and gene therapy review staff; accelerate review procedures for already approved therapies being tested in new diseases; increase collaboration between the FDA and drugmakers in designing rare disease clinical trials; expand the use of "real-world" evidence; and improve alternative inspection practices for overseas manufacturing facilities.

The recommendations from FDA's letter were submitted to Congress in mid-January, setting up a process in which legislators will draft a bill and push it into hearings and votes. Although the passage of PDUFA renewal legislation tends to be routine, lawmakers could seek to add new agency obligations, particularly if new controversies emerge over the next nine months.

Has the FDA become tougher?

Aduhelm's approval notwithstanding, a series of drug rejections by the FDA last year, along with new warnings for several autoimmune medicines, have raised questions of whether agency review offices are taking a stricter line.

In 2021, FDA rejected such closely watched drugs as FibroGen's roxadustat, Acadia Pharmaceuticals' Nuplazid in dementia-related psychosis and Provention Bio's teplizumab. The agency also added new restrictions to drugs from Pfizer, AbbVie and Eli Lilly.

In all three rejections, drug reviewers took issue with technical aspects of the companies' applications. But they also appeared to signal to industry watchers a "more active and rigorous stance at the FDA, particularly with respect to safety," according to SVB Leerink analyst Geoffrey Porges. Others, including executives at Acadia, have criticized the agency for moving its review goalposts.

As Califf takes office, drugmakers will be watching the FDA's decisions closely. Of note is Akebia Therapeutics' vadadustat, a competitor to FibroGen's drug which also has mixed data.

The events of 2021 haven't discouraged Bruce Booth, a well-known biotech venture capitalist, who noted in a review video for the year that the rejections "objectively had issues."

"Importantly the FDA as a whole has been incredibly facilitating and engaged with innovators," he said of the outlook for future drug evaluations.

Four years ago, a small Philadelphia biotech company won U.S. approval for the first gene therapy to treat an inherited disease, a landmark after decades of research aimed at finding ways to correct errors in DNA.

Since then, most of the world's largest pharmaceutical companies have invested in gene therapy, as well as cell therapies that rely on genetic modification. Dozens of new biotech companies have launched, while scientists have taken forward breakthroughs in gene editing science to open up new treatment possibilities.

But the confidence brought on by such advances has also been tempered by safety setbacks and clinical trial results that fell short of expectations. In 2022, the outlook for the field remains bright, but companies face critical questions that could shape whether, and how soon, new genetic medicines reach patients. Here are five:

Can anticipated gene therapy approvals provide a boost to the field?

Food and Drug Administration approval of Spark Therapeutics' blindness treatment Luxturna — a first in the U.S. — came in 2017. A year and a half later, Novartis' spinal muscular atrophy therapy Zolgensma won a landmark OK.

But none have reached market since, with treatments from BioMarin Pharmaceutical and Bluebird bio unexpectedly derailed or delayed.

That could change in 2022. Two of Bluebird's treatments, for the blood disease beta thalassemia and a rare brain disorder, are now under review by the FDA, with target decision dates in August and September after each received a three-month extension. BioMarin, after obtaining more data for its hemophilia A gene therapy, plans to soon approach the FDA about resubmitting an application for approval.

Others, such as CSL Behring and PTC Therapeutics, are also currently planning to file their experimental gene therapies with the FDA in 2022.

Approvals, should they come, could provide important validation for their makers and expand the number of patients for whom genetic medicines are an option. In biotech, though, approvals aren't the end of the road, but rather the mark of a sometimes challenging transition from research to commercial operations. With price tags expected to be high, and still outstanding questions around safety and long-term benefit, new gene therapies may prove difficult to sell.

Will funding keep pouring in?

A record $20 billion flowed into gene and cell therapy developers in 2020, significantly eclipsing the previous high-water mark set in 2018.

Last year, the bar was set higher still, with a total of $23 billion invested in the sector, according to figures compiled by the Alliance for Regenerative Medicine. About half of that funding went toward gene therapy developers specifically, with a similar share going to cell-based immunotherapy makers.

Driving the jump was a sharp increase in the amount of venture funding, which rose 73% to total nearly $10 billion, per ARM. Initial public offerings also helped, with sixteen new startups raising at least $50 million on U.S. markets.

Entering 2022, the question facing the field is whether those record numbers will continue. Biotech as a whole slumped into the end of last year, with shares of many companies falling amid a broader investment pullback. Gene therapy developers, a number of which had notable safety concerns crop up over 2021, were hit particularly hard.

Moreover, many startups that jumped to public markets hadn't yet begun clinical trials — roughly half of the 29 gene and cell therapy companies that IPO'd over the past two years were preclinical, according to data compiled by BioPharma Dive. That can set high expectations companies will be hard pressed to meet.

Generation Bio, for example, raised $200 million in June 2020 with a pipeline of preclinical gene therapies for rare diseases of the liver and eye. Unexpected findings in animal studies, however, sank company shares by nearly 60% last December.

Still, the pace of progress in gene and cell therapy is fast. The potential is vast, too, which could continue to support high levels of investment.

"I think fundamentally, investment in this sector is driven by scientific advances, and clinical events and milestones," said Janet Lambert, ARM's CEO, in an interview. "And I think we see those in 2022."

How will safety scares impact the FDA's oversight?

The potential of replacing or editing faulty genes has been clear for decades. How to do so safely has been much less certain, and concerns on that front have set back the field several times.

"Safety, safety and safety are the first three top-of-mind risks," said Luca Issi, an analyst at RBC Capital Markets, in an interview.

Researchers have spent years making the technology that underpins gene therapy safer and now have a much better understanding of the tools at their disposal. But as dozens of companies push into clinical trials, a number of them have run into safety problems that raise crucial questions for investigators.

In trials run by Audentes Therapeutics and by Pfizer (in separate diseases), study volunteers have tragically died for reasons that aren't fully understood. UniQure, Bluebird bio and, most recently, Allogene Therapeutics have reported cases of cancer or worrisome genetic abnormalities that triggered study halts and investigations.

While the treatments being tested were later cleared in the three latter cases, the FDA was sufficiently alarmed to convene a panel of outside experts to review potential safety risks last fall. (Bluebird recently disclosed a new hold in a study of its sickle cell gene therapy due to a patient developing chronic anemia.)

The meeting was welcomed by some in the industry, who hope to work with the FDA to better detail known risks and how to avoid them in testing.

"[There's] nothing better than getting people together and talking about your struggles, and having FDA participate in that," said Ken Mills, CEO of gene therapy developer Regenxbio, in an interview. "The biggest benefit probably is for the new and emerging teams and people and companies that are coming into this space."

Safety scares and setbacks are likely to happen again, as more companies launch additional clinical trials. The FDA, as the recent meeting and clinical holds have shown, appears to be carefully weighing the potential risks to patients.

But, notably, there hasn't been a pullback from pursuing further research, as has happened in the past. Different technologies and diseases present different risks, which regulators, companies and the patient community are recognizing.

"We're by definition pushing the scientific envelope, and patients that we seek to treat often have few or no other treatment options," said ARM's Lambert.

Will in vivo gene editing take another step forward?

Last June, Intellia Therapeutics disclosed early results from a study that offered the first clinical evidence CRISPR gene editing could be done safely and effectively inside the body.

The data were a major milestone for a technology that's dramatically expanded the possibility for editing DNA to treat disease. But the first glimpse left many important questions unanswered, not least of which are how long the reported effects might last and whether they'll drive the kind of dramatic clinical benefit gene editing promises.

Intellia is set to give an update on the study this quarter, which will start to give a better sense of how patients are faring. Later in the year the company is expecting to have preliminary data from an early study of another "in vivo" gene editing treatment.

In vivo gene editing is seen as a simpler approach that could work in more diseases than treatments that rely on stem cells extracted from each patient. But it's also potentially riskier, with the editing of DNA taking place inside the body rather than in a laboratory.

Areas like the eye, which is protected from some of the body's immune responses, have been a common first in vivo target by companies like Editas Medicine. But Intellia and others are targeting other tissues like the liver, muscle and lungs.

Later this year, Verve Therapeutics, a company that uses a more precise form of gene editing called base editing, plans to treat the first patient with an in vivo treatment for heart disease (which targets a gene expressed in the liver.)

"The future of gene editing is in vivo," said RBC's Issi. His view seems to be shared by Pfizer, which on Monday announced a $300 million research deal with Beam Therapeutics to pursue in vivo gene editing targets in the liver, muscle and central nervous system.

Will pipeline overlap force companies to make hard choices?

With more and more cell and gene therapy companies launching, the pipeline of would-be therapies has grown rapidly, as has the number of clinical trials being launched.

Yet, many companies are exploring similar approaches for the same diseases, resulting in drug pipelines that mirror each other. A September 2021 report from investment bank Piper Sandler found 21 gene therapy programs aimed at hemophilia A, 19 targeting Duchenne muscular dystrophy and 18 going after sickle cell disease.

In gene editing, Intellia, Editas, Beam and CRISPR Therapeutics are all developing treatments for sickle cell disease, with CRISPR the furthest along.

As programs advance and begin to deliver more clinical data, companies may be forced into making hard choices.

"[W]e think investors will place greater scrutiny as programs enter the clinic and certain rare diseases are disproportionately pursued," analysts at Stifel wrote in a recent note to investors, citing Fabry disease and hemophilia in particular.

This January, for example, Cambridge, Massachusetts-based Avrobio stopped work on a treatment for Fabry that was, until that point, the company's lead candidate. The decision was triggered by unexpected findings that looked different than earlier study results, but Avrobio also cited "multiple challenging regulatory and market dynamics."

The Food and Drug Administration's main drug review office approved 50 new medicines last year, its fourth highest total. Many were for cancer, continuing a trend of recent years, but there were notable new treatments cleared for high cholesterol, HIV and, most controversially, Alzheimer's disease.

The busy pace looks set to continue in 2022, too, as the FDA works with industry to wrap up its latest agreement governing review timelines and user fees. Ahead of the agency this quarter are a number of notable approval decisions, five of which are outlined below.

Eli Lilly and Innovent's sintilimab in lung cancer

At face value, approval of yet another so-called checkpoint inhibitor — a type of cancer immunotherapy available for dozens of tumor types — wouldn't seem all that newsworthy. Eight of these drugs are already cleared, seven of which work similarly to Eli Lilly and Innovent Biologics' would-be immunotherapy sintilimab.

But the FDA's review of sintilimab, marketed in China as Tyvyt, is notable nonetheless, because it will show what the agency and its advisers think of an immunotherapy developed and exclusively tested in China.

Lilly acquired rights to Tyvyt from China's Innovent, and now aims to win U.S. approval without having to run a head-to-head study against an established checkpoint inhibitor. (Tyvyt was tested against chemotherapy alone in the trial supporting its application.)

Though not discussing Tyvyt specifically, Richard Pazdur and Julia Beaver, two of the FDA's top cancer drug officials, indicated in a recently published paper that such a study would "probably be required" in such a scenario. They also emphasized that the results of a clinical trial conducted overseas must be generalizable to the U.S. population.

The agency is holding an advisory meeting on Lilly's application on Feb. 10, and the implications are significant for the company and others, like Coherus Biosciences, that are looking to follow a similar path. What's more, Lilly has hinted it may undercut established checkpoint drugs on price, something that hasn't happened despite their widespread availability.

Bristol Myers Squibb's relatlimab in melanoma

Two types of checkpoint inhibitors are approved in the U.S. By mid-March, there could be a third as the Food and Drug Administration is set to decide on an immunotherapy developed by Bristol Myers.

The drug, known as relatlimab, is aimed at a different cellular target than earlier checkpoint inhibitors from Bristol Myers and companies like Merck, Roche and Regeneron. While those treatments work by blocking the proteins known as CTLA-4, PD-1 or PD-L1, relatlimab homes in on one called LAG-3.

The idea is similar, however. By blocking these proteins, immunotherapy helps cancer-fighting immune cells target and attack tumor cells.

An approval would be important for both the immunotherapy field, which has spent years seeking additional ways to unblind the immune system to cancer, and for Bristol Myers, which lost an early market advantage to Merck.

In clinical testing, combining relatlimab with Opdivo significantly reduced the risk of cancer progression over Opdivo alone in people whose melanoma had either spread or couldn't be surgically removed. The results were the first definitive proof that targeting LAG-3 can be beneficial, and the first time a treatment regimen had been shown to improve on Opdivo.

The FDA will make its decision by March 19.

Gilead's lenacapavir in HIV

For years, Gilead has maintained the world's leading business for HIV treatment. The first nine months of 2021 alone saw the company's line of medications for the virus generate about $11.8 billion in sales.

And yet, Gilead remains under constant pressure to innovate thanks to competition from deep-pocketed and powerful rivals like Merck, Johnson & Johnson and GlaxoSmithKline. On that front, a drug called lenacapavir has become important to Gilead's future.

Lenacapavir is designed to attach to the capsid — the shell that encases the virus' genetic information — and stop it from breaking apart, thereby impeding the HIV replication process.

Gilead has already scored positive clinical trial results showing that its drug helped suppress HIV in patients who had tried multiple other therapies but were no longer responding to them. Among the few dozen patients who've been evaluated thus far, around 80% had viral loads so low they were undetectable six months after starting treatment with lenacapavir and an optimized background regimen.

Based on those results, Gilead formally asked the FDA to approve lenacapavir last summer. A decision from the agency is expected by Feb. 28. If approved, it would be the first capsid inhibitor ever cleared for market, and the only HIV treatment option that's given every six months. (The review doesn't involve a different, injectable version of Gilead's drug, for which testing was recently halted.)

Analysts expect a title like that should translate to blockbuster sales over time. In fact, lenacapavir could deliver north of $1.1 billion to Gilead by 2030, according to consensus estimates compiled by the investment bank Mizuho Securities.

Akebia's vadadustat for anemia in chronic kidney disease

Not long ago, a group of pills known as HIF-PH inhibitors were supposed to be the next big thing in anemia care for people with failing kidneys. But their potential as convenient and safer alternatives to injectable drugs like Aranesp has dimmed.

A drug from Akebia Therapeutics called vadadustat, for example, appeared worse than Aranesp on a measure of heart safety in a Phase 3 trial the biotech reported in 2020. The FDA and its advisers then rejected FibroGen's roxadustat — already approved in several other countries — after its advisers flagged concerns about cardiovascular risk. FibroGen has since restructured, while shares of Akebia are trading at all-time lows.

HIF-PH blockers could still have a future in the U.S., however. In November, GlaxoSmithKline detailed positive Phase 3 results for its drug daprodustat, which is also approved overseas. And Akebia, despite its setbacks, has moved forward with an approval application, arguing the totality of its study results are good enough to secure regulatory clearance.

That belief will be put to the test this quarter. Though analysts have been skeptical the drug can win clearances for the broadest group of chronic kidney disease patients, some believe the FDA will approve it for those on dialysis, which still represents a sizable market.

The agency will make a decision by March 29.

AstraZeneca and Merck's Lynparza for early breast cancer

Lynparza, a type of cancer medicine known as a PARP inhibitor, has led the way for its class, winning approvals in multiple tumor types and becoming a multibillion dollar drug in the process. But its biggest impact yet could come soon, if the FDA approves it for early use in a particularly aggressive, hereditary form of breast cancer.

In a Phase 3 trial last year, Lynparza helped slow the return of HER2-negative tumors in women with an inherited mutation to the genes BRCA1 or BRCA2, which account for about 5% of all breast cancer cases. That benefit was observed when Lynparza was administered as an "adjuvant" treatment after surgery to remove a tumor and other standard drugs like chemotherapy. Treatment helped patients with both local as well as distant tumors, the latter of which can be particularly lethal.

Experts uninvolved with the study and interviewed by BioPharma Dive described the results as potentially practice-changing. But key questions remain, most notably how long Lynparza can extend lives and whether the drug's emergence will encourage BRCA testing. If cleared, Lynparza would also become the latest high-priced cancer medicine to move into an earlier setting, which are viewed as lucrative opportunities for drugmakers.