Biotech Hangout: Episode 195 - September 11, 2026

Sourced by podcast-ingest on 2026-09-17. Auto-transcribed via AssemblyAI (universal-2, en). Speakers identified by AssemblyAI Speaker Identification using the per-podcast host/regulars hints; the resulting label→name mapping is in the frontmatter. Duration: 1h00m. Episode page: https://podcasters.spotify.com/pod/show/biotechhangout/episodes/Episode-195---September-11--2026-e3osq1t. Audio: https://anchor.fm/s/55bdff38/podcast/play/125773309/https%3A%2F%2Fd3ctxlq1ktw2nl.cloudfront.net%2Fstaging%2F2026-8-15%2F431943145-44100-2-82c63685546be.m4a.

Show notes (from RSS)

On this week's episode, Tess Cameron, Brian Skorney, Paul Matteis, and Yaron Werber open with a look at markets, noting the XBI slipped just over 3% amid concerns about energy prices, inflation, and long-term U.S. fiscal health weighing on the rate-sensitive sector. The conversation then turns to policy, discussing new FDA leadership appointments including Karim Mikhail as CBER director, with hosts noting the industry's hope for a calmer, less chaotic regulatory tone. They highlight the FDA's apparent openness to psychedelics, pointing to stock reactions across the space. On the data front, Novartis's pelacarsen missed expectations reducing Lp(a) relative to rival programs from Amgen and Eli Lilly, while its DM1 program also fell short, shifting attention to Dyne Therapeutics' upcoming expansion cohort data. The hosts debate whether Novartis's setbacks make early-commercial, post-Phase 3 companies more attractive acquisition targets given looming loss-of-exclusivity pressure across large pharma. In other data news, Roivant's mosliciguat hit its Phase 2 primary endpoints in interstitial lung disease, with the company already advancing to Phase 3. The episode closes with Biohaven's epilepsy trial hold pending further metabolite data, and questions over whether the hold could affect its recent SK Pharma deal. This episode aired on September 11, 2026.

Transcript

Tess Cameron: And you're listening to Biotech Hangout, a live and unedited weekly discussion of all the latest news in our industry with a group of biotech experts and leaders. I'm Tess Cameron and my co hosts today are Brian Scorney, Paul Matisse and Jeroen Weber. For more information about our hosts and guest speakers, or to listen to the most recent episode, please go to biotechhangout.com so thanks so much for joining everyone. We've had an interesting week. It's been a somewhat challenging back to school week for the XPI which is down just a little over 3% over the past, over the past week or so. And it's been a pretty challenging tape overall. There was a, you know, a pretty significant sell off just on the stock market overall due to oil prices spiking in the US Iran war, you know, Brent crude getting up to above $108 a barre and 10 year treasuries reaching highs that they haven't been at for many years. Right. 4.8% and then getting close to 5% on Thursday. So a lot of that really being linked to concerns about energy prices, concerns about the state of inflation, concerns about long term fiscal health of the U.S. economy. And that obviously has an impact on biotech. Right. Biotech has always been a rate sensitive sector and we saw biotech decline a bit more than, than the overall S and P this week, but not as much as tech heavy. Tech heavy, nasdaq, you know, NASDAQ index. So you know, interested and interested in any comments, you know, from, from Brian or, and Paul and Jerome. But you know, I think a couple years ago we were kind of living in an environment where biotech and rates were you close together. And then 2024 was very much a policy driven year. And are we getting back to, are we getting back to rates really being one of the driving kind of macro sector level points?

Brian Scorney: Yeah, so look, I mean I've always sort of characterized it and maybe this morning when SPI was up on a hot inflation number, I questioned whether this would be right. But to me it's not that it's rate sensitive to small up and down movements, but the concept of are we going to escalate in 100 basis point moves over a year or over two years? When you see fed funds rate going to high single digits, that's very bad, going towards zero, that's very good. But when you're talking a 25 basis point change here or there every now and then you could deal more with fundamentals. So I Guess it's not surprising as we're talking a little bit more and more about inflation being thematic and the Fed may be escalating rates, even though Trump has been such a big advocate for lowering rates and his appointed chairman seems to be a little, a little more hawkish than maybe us in Senate confirmation hearings. And maybe that's a little bit of a break with, with Trump himself. So, you know, I think there is that fanatic, you know, who knows, inflation's like a funny thing. So we'll have to see, you know, how much continues to drive, you know, if we just see like a rate hike, two rate hikes, you know, I think this will be much to do about nothing.

Tess Cameron: Thank you, Brian. Well, let's move on to some of the fundamentals then. We can start with regulatory policy. HHS appointments were announced earlier this week for directors of CDER and cber. And HHS announced that, you know, Karim is going to keep his place as director of cber, so making a temporary appointment permanent and also that Michael Davis would be selected as director for cdir, so also making this permanent. So Brian, maybe we can go back to you and just comment on any of the other. I think those are the two main appointments that really have read through to biotech. There were also appointments for center of Tobacco Products and a new appointment as Deputy Commissioner for Technology and Artificial Intelligence to Jared Seehofer. But maybe, Brian, you could share any views on these selections and what it means for biotech.

Brian Scorney: Yeah, happy to. And would love to have input from the rest of the group here. And nothing against Jared and Brett, but probably doesn't matter in the context of analyzing biopharma. But the big names to really look at are Michael and Kareem here. And look, I would say over the last call it close to a year, right. Like the sector as a whole has sort of been breathing a little bit of relief as we've sort of seen the chaos that came with the appointment of Marty Makari as the head of the FDA with Vinay Prasad as the head of cber and then subsequently cmo, CSO of the fda. Right. That's been just like a lot of chaos. And, and I was just kind of like looking back through the history, right. Like the cedar role, you know, this has really been Cedar and CBER have been largely unpolitical in nature. Right. They're like sort of, you know, if not lifetime appointees, they're long time sort of bureaucratic appointment appointees. Janet Woodcock served from 94 through 2020 as the head of Cedar Marx didn't do it as long, but he was 2016 through 2025, so he must had a 10 year stint. Right. But since the new administration, the Cedar director has turned over five times and obviously like the CBER leadership has been sort of headlined by Van Eye. And you know, we all have a number of opinions on, on how Van I ran things. But I think the nicest thing you could say is, you know, there's a lot of chaos, there's a lot of senior leadership departures. You know, there seemed to be a lot of discontent within the fda. And you know, I think that led to questions around agency guidance, around decision making processes. You know, I think the industry was struggling with how to work with that FDA leadership. And look, I mean since the departures of Vanay and Marty, you know, we've sort of seen a calming, right? It's a relative calming. I think there's still a lot of questions of like, okay, we haven't clearly seen, you know, a leadership to the extent that like Jan or Peter, not necessarily a good thing. And I recognize that there's debates about their leadership as well. But as than I and Marty too, you know, there are a lot of issues with them. And I think, you know, to hear the commentary certainly that Cream has made since he was put in the interim position, you know, his role has really. He said he wants to be, you know, more of a calming force. You know, I think he says he wants to be like a conductor. He doesn't want to like take over the violin when the violins, the violinist is not doing well. His role is to kind of be the leader, not necessarily like the decision maker. And I think those things speak to kind of how most of industry wants to see the FDA run. We kind of want to see scientific discourse, you know, group, you know, groups working together to come to decisions about, you know, when a drug should be approved, when a drug shouldn't be approved. You know, this is all in the background of.

Paul Matisse: Right.

Brian Scorney: We also have the nomination of Dr. Heidi Overton to the role of the Commissioner FDA remains to be seen if she's going to be able to secure the, the needed votes. But I would also say, I mean she appears to be more of a stabilizing force than we found her predecessor to be. So look, I think these are all certainly steps in the right direction for industry relative to what we had a year ago. But you know, I think there's a lot of open questions because we haven't seen a ton of, you know, direct actions taken by the People who are now in these appointments. But I would say, like, at least what has been said and, you know, the general feeling in the FDA seems to be one of much calmer seas than a year ago.

Tess Cameron: Excellent. Thank you so much for that great overview. Brian, your own.

Jeroen Weber: Yeah, let me. I'll just add. So I have to give Credit to Mike McMahon, who's one of the founders of Provision Policy, was our dear colleague. Sadly, he was not able to join, but maybe I'll just pass some comments. He basically, in his view, the decision to stick with Dr. Davis and Dr. Mikhail is a pretty good outcome. In essence, you can think of many ways this could have gone worse and not many ways by which this could have gone better. Specifically the decision to stick with Mikhail for Sieber. He is a little bit of an odd fit for Sieber director, but the view is that given how erratic and poor Prasad did in that role, he thinks that over the short term, Mikhail is going to do a much better job kind of stabilizing things. So the bottom line, he kind of felt like, you know, net. Net. It's more of a positive than that.

Tess Cameron: Yeah, yeah. I'd reiterate that, you know, Mikhail has been a part of several listening sessions and other points on the FDA and I think is acutely aware of a lot of the organizational challenges that CBER experienced under Vinay and very sensitive to them. So, you know, as someone who, you know, was a former operator, right. And had to build and lead large teams, you know, I, I find it very reassuring to have, you know, someone in that role who has a real appreciation for how to do that effectively and, you know, how to, you know, how to be a good leader despite maybe, you know, having a. Having a different background than one may typically have expected for cber. You know, maybe we can also comment on some of the stock, some of the stock reactions to this appointment. And there are a few areas that, you know, that Davis in particular has been known for. One is psychedelics, you know, which he's. Which he's made some comments about. And, you know, another is on compounded GLP1 products. So maybe, you know, if someone wants to comment on kind of the psychedelics, you know, his psychedelics commentary and an impact on stocks. I can take the, the GLP one point.

Paul Matisse: I can, I can do that. Can you guys hear me?

Tess Cameron: Sure can.

Paul Matisse: Okay. Hey, what's up? What's up, everybody? Yeah, I mean, I think we've talked about it a lot on this podcast, so I can keep it brief. But, you know, it does Continue to feel like the FDA has got a door wide open for psychedelics drugs. I mean, the FDA just put out like finalized guidance for drug development which generally speaking aligns with the number of the clinical programs that we've seen out there from definium and others who are in late mid to late stage development. Right. Just as it relates to like 12 week primary endpoints, redosing like you know, best efforts to kind of mitigate functional unblinding. There was also, you know, a publication, was it in NEIM or was it, was it in a medical journal that basically in the past few days that, you know, came from Dr. Davis and just like reiterates the same sort of perspective. So I mean, it's an interesting time, right, because Compass is about to complete their NDA in the fourth quarter. It's a rolling review, you know, I think. And it's also interesting because I do think on the investor side, like we've still been getting questions a little bit on like, you know, could there be ADCOMs here? Could there be still lingering questions around things like functional unblinding? Right. Like, you know, like for definium, you know, there's been this conversation around their next trial and one of the doses is a, is a lower dose and how subtherapeutic is it going to be and how much does that matter? I think big picture, clearly, if not already we have leadership at the FDA who appreciates the unmet need in psychiatry and is very enthusiastic about this class of drugs.

Tess Cameron: Great. I will take another topic that Michael Davis has been known to comment on, which is around compounded GLP1s and he's made commentary previously on just the importance of really understanding, you know, patients, understanding what they're taking and you know, being very, you know, maybe, you know, he was behind, I think several of the letters, you know, the letters that went out, the warning letters that went out to some of the compounding, some of the compounding groups. So that'll be another area to watch. Another very, you know, contentious, contentious area that will, you know, see if there's any, see if there's any changes on that front maybe, you know, to wrap up on some of the regulatory and policy. I'll share some takeaways from, you know, a conference this week. So there were a couple of different broker conferences this week. There was the Wells Fargo conference in Boston, there was the Cantor conference in New York. I had the pleasure of going to the Cantor conference and they were kind enough to host a panel on China that I thought I'd Just, you know, quickly share some of the takeaways for. And this was a. This is a really interesting. This is a really interesting panel where they included a few different perspectives. They had, you know, Simone, who's a partner at a Ori, Ori, which is a China biotech investment fund. They had John Crowley, uh, who is the, uh, the head of Bio. They had Ken Song, who's back at up as a partner at Venrock and is doing a lot of work around China and other geographies, really expanding the firm's footprint. And they also had me on this panel. And it was a very interesting, you know, very interesting discussion where I think John, you know, Crowley really had the opportunity to highlight some of the continued policy, you know, continued policy discussions that are, you know, are happening related to China. And you know, in particular, you know, anticipating. Anticipating some kind of, you know, some kind of. Some kind of guidance or understanding of, you know, policy actions, you know, may come forth over the next couple of months. And he shared Bayo's position, you know, which is that while this is something that the US really has to watch very closely, and he and Bio have put forward a number of recommendations for how to improve U.S. competitiveness, you know, also really reiterating that any kind of ban, you know, would probably not deliver the intended results in terms of actually strengthening, you know, strengthening US Biotech. So much, much more to watch there. But it was a big upgrade from last year, the conference. Last year. I was also on the biotech panel at the China Biotech panel. And it was in the. This, you know, little room kind of on the side of the conference. And, you know, this year was a much, you know, a much bigger panel in the ballroom. So it was definitely an upgrade in terms of, you know, the interest in that, you know, the interest in that conversation. Why don't we head over to data. There were a number of data readouts over the weekend and early this week. And Jeroen, maybe I will flip it over to you to start with Novartis.

Jeroen Weber: Yeah, absolutely. So Novartis, along with Ionis, actually had data, the long anticipated lp. It's the data from the Horizon study, which was around 8,000 patients. It's the first LP I should have actually started. By those of you who have popcorn, this is the time to crunch loudly because this was a highly anticipated. And the data drum roll was dropped on Friday, literally at 4:30pm after the market closed into the Labor Day weekend. So immediately you knew this data is not positive. Little did we know that the Novartis is gonna follow it up thereafter with data from Avidity, which also was not positive. And it led Novartis to be down a lot, about 14% to go back to Ionis. Ionis was only down very incrementally because it was largely expected for the LP phase three to not work. Ionis, then that's Monday morning and then Farvaris, which I know, I think Brian's going to talk about this, had their own phase three data in hereditary angioedema. They're a competitor to Ionis. So then Ionis went down from like 2% down to maybe 5% because that data actually looked very good. But to go back to lp, because this is really important, recall there's been a lot of epidemiological data looking at LP as a genetic modifier marker for risk, regardless of LDL levels and let's say blood pressure and things like that. It was always considered to be an independent risk potential modifier for outcomes. And this was the first study. The population that they enrolled ended up being the most well controlled population ever in any study. I think average LDL was like 60 to 65, very well controlled on blood pressure, mid teens or so were on SGLT2. And we sort of knew over time the data is not going to be amazing. I think everybody was hoping for like a low teens MACE benefit just given this was the final analysis in the study and it wasn't stopped earlier. Bottom line, it looks like it was completely a negative study. When we've actually been working on the big piece heading into that and we decided fun enough not to put it out because we realized all the historical data was in populations that had very high ldl. And the most recent data that literally just came out in the last cardiology meeting actually in a more controlled population suggested that LP might not be that important. So this was a little surprising, a little disappointing. Obviously in many ways for the field, that drug is pretty good. Pelacarson, it reduces L.P. by 80%. The next drugs for Opacirin from Amgen and the Lilly version, they kind of reduce levels by 95 to 100. So we'll need to see whether that makes a difference. We'll need to see how well controlled those populations are going to be in these big phase three studies. This was also secondary prevention. Both Amgen and Lilly are not doing primary prevention, where frankly, LP might be more of a risk modifier. But the bottom line is the initial go did not look great. Let me. I think that, Brian, you wanted to probably comment a little bit on maybe Amgen and Lilly as well.

Brian Scorney: Yeah, yeah. I mean just from the context that they both have targeted therapies that drastically reduce lp. I think one of the things that was just interesting about this data point is you kind of said this, that people weren't very confident in this data point. What I think was kind of noticeable about the LP story is sort of of not how bearish but maybe how ambivalent, sort of like the biotech mafia has been about this working out. And we'll like talk about some of those reasons. But I have found it to be like kind of like an incredible talking point on Generalist. Certainly on the Amgen side we saw amgen like loose 10% on Tuesday because of this blow up and the read through there. But yeah, I mean I fielded like a lot of questions on their drug from people who are interested in just kind of like the thematics of oh hey, this is, you know, potentially one fifth of the total population has genetically induced elevations in lp. So you know, it fits in that like theme of where people have kind of fallen in love with the obesity side of things because you know, the, the numbers are just so, so dramatic, you know, so what, you know, what is the read through rate? And you mentioned, right, Pelacarson sort of has the, is sort of like the lead, least active of you know, the drugs that are in development among the large cap pharma companies being Andren, Novartis and, and Lilly. But you know, they do about, you know, depending on like which study you're looking at, it's probably like 70 to 80% LP reduction, which is very dramatic when you contextualize, right. That LDL reductions of 30% lead to significant clinically meaningful hazard ratios. So, so the idea is getting from 80% to 98%. Is that going to be a meaningful difference? Do you have to eliminate all lp? And as you said, there's a lot of conflicting literature and I think there's, I wouldn't say consensus, but certainly one of the big issues with these studies is we're just very good at controlling for cardiovascular events. And when you're intervening with statins and PCSK9s, NGLP1s, all of which are benefiting people's cardiovascular health, is like reducing or eliminating lp. Is it really going to move the needle or even if it is a causative factor or do we have to look at like much, much bigger studies because of the standard of care? The one thing that I would kind of point to and one of the reasons why I think people have been kind of bearish on this of late is this study has taken a lot longer than people originally expected. And you know, Novartis has said it's the pace of events has not been what they modeled. And I would say this is something I think we've talked about before, but as a general thematic, when these outcome based studies, when the rates are mismodeled, my experience is generally that means that study is going to fail. If you don't understand what the rate of events are in a study, you're mispowering for the events. You don't really understand what, what the background meds are. I've almost never seen it where that's wound up benefiting the treatment arm. And that's the case here. And while there can be defense around Amgen and Lilly for having better LP reductions, and there's trial design issues too, like the inclusion of stroke or exclusion of stroke in the MACE endpoint could be important. The baseline LP could be important. But Amgen has sort of had the same case. This study is not, not going as fast as they expected. The outcomes are not occurring at the events that they thought they would. And I think that mismodeling is an indication that, you know, something's not going right with the study. Whether it's, you know, the drug is not reducing a causative factor or the placebo is just doing way better than expected, you know, we'll have to see. I sort of expect that Amgen data maybe to read out next year, but they're not really committing to anything. I mean, you know, the Lilly data may be in, in 2029, but it's kind of hard to look through this data and have a lot of confidence that LP reductions pharmacologically are going to make a material impact in cardiovascular outcomes.

Paul Matisse: Hey, Brian, can I ask you a question about the other studies or you got you and your own, like one thing that came up talking about this because I cover it from the Ionis angle and as your own sort of alluded to this was always like less important to, to Ionis is just that in this study population they tried to obviously isolate LP as a variable. So other factors that could contribute, like blood pressure, cholesterol, were needed to be under control. But I think the flip side of that is trying to kind of tease out LPA's impact on outcomes in the context of patients with other well controlled risk factors might also have its own intrinsic risks. Or maybe just said another way like, like maybe it isn't that big of a risk factor. When, when other things are under control, like how do you think about that? And are like these other studies done the same way? Or could they be like different tests of this in a different context?

Brian Scorney: I mean, I think, I think there's definitely different context. I think the, I think those are nuanced differences though. And you know, certainly there's a chance that, you know, given the better activity, given, you know, different patient enrollment, you know, different care under the clinical trial, there could be different differences in outcomes. But again, I think, right, like what we're probably going to see is you're going to have a very well controlled patient population. If you're not prospectively forcing that into the study. It's just going to happen because of clinical care. Right. Like if you're going into a clinical trial, like it's hard to imagine that you're not going to get the best care. So even if you're not in like the best state going into the study, you're probably going to be managed to some meaningful extent and that could potentially make it even harder to really see a placebo effect. But you know, again, they are different studies, they're different drugs. You can't fully write off the LP thesis. Look, I mean, you and I, we've been through this with beta amyloid, like I, for a decade I was, I was writing off beta amyloid drugs and now like I'm a convert. Like it's sort of, you know, the drugs that are getting brain penetration and getting plaque removal to a meaningful extent, they seem to actually do something right. So, you know, there are cases where the biology eventually works out in favor of pharmacology. I just don't see the differences here as so substantial that I think they're likely to play out favorably.

Tess Cameron: Maybe kind of bigger question for cardiovascular development. I mean, between the zoos trial failure, which everyone was kind of watching for, HSCRP and linked to outcomes and how inflammation it could impact cardiovascular disease, and now lp. Any general commentary on kind of what this means for cardiovascular drug development?

Jeroen Weber: I mean, again, to the last point, I think that the challenge is the bar is now a lot higher when you have to enroll patients that are very well controlled. Otherwise the question is, can you really enroll sort of a random population that is not well controlled and run the study that way? Maybe it's going to be more real world. I don't know. I don't know how. Then how do you convince payers to give you sort of a premium price though? Obviously it's going to be a lot easier to control cholesterol with generics and obviously, you know, LDL and blood pressure. But I think that the biggest challenge, though, is the powering of the study is going to be based on the historical data with epidemiology, which is not really predictive, given how well controlled they're going to be now. And maybe that's really the challenge. Like, how do you write the right study? What's interesting is both Amgen and Lilly, and look, they're both very legitimate players in these areas. They know cardiovascular diseases really well, and yet they knew that these events are happening slower than expected. Yet Amgen, literally six months ago, actually eight months ago, launched a primary prevention study with lp, obviously a huge study, and literally almost doubled their primary secondary prevention LP study. Novartis, as you know, also has what is expected to be an annual LP that is moving into a pivotal. We'll see if they cancel that now. But they all decided to continue forward despite knowing that the events are not looking great.

Tess Cameron: Yep, yep. Thank you for that great commentary, Jaron. Yeah. And I think it's interesting just flipping to what does this mean for some of the private companies, Right. There's a number of companies in the private company landscape that are working on lp potential combinations with lp. We've seen a number of dual SI approaches. I think the hope was that cardiovascular could be an area where maybe smaller biotechs, maybe it becomes more accessible for smaller biotechs if we can rely on biomarkers that can lower the cost of capital in pretty early phase trials in order to be able to raise the money that you need for these cvods. And I think that story just got a lot more complicated with not just the LP failure, but also with the ZOOS failure. That kind of calls into question the predictive power of hscrp. So we're back to cardiovascular being really hard and being really hard and really taking some time to get the data that we need to understand the therapeutic impact. Let's continue on Novartis, actually, and maybe Brian, go over to you. Friday was LP Friday afternoon, and then we got the update on DiEM1. So why don't you talk about that with us, Brian?

Brian Scorney: Yeah, so for me, Novartis is the gift that keeps on giving. Over Labor Day, I covered dyn. So this was sort of an important data set as they have a competitive DM1 product with a lot of similarities. So I think we could sort of copy and paste a lot of what we're talking about with LP to DMPK Knockdown, which is sort of the target of these drugs to help correct splicing in patients with DM1, a large muscle disease orphan indication, but relatively large for sort of orphan muscle disease. So look, I mean, this was another big issue for Novartis, right? They did this $12 billion acquisition of Avidity, you know, less than a year ago. And look, Avidity, you know, it's a platform, they have a couple of things going on, but they certainly highlighted this as sort of a crown jewel. And I think everyone kind of thought of, you know, this drug as the main driver of, of Avidity's valuation last year when they did the deal. And even Novartis sort of like put up a slide with max potential peak sales of like $6 billion, sort of justifying underwriting the acquisition last year. And this phase three failed. Novartis spun it maybe a little more than just being like a flat out failure with lp, but it wound up not working. Look, this has been a hot debate among the biotech world whether or not this study was gonna work, whether or not these drugs work. You know, how to properly design studies to hit endpoints that are relevant in DM1. But, you know, I think it does call into question, right, like the idea that, hey, can you knock down DMPK in muscle? And there's a drug that is sort of muscle targeted silencing via an antisense oligonucleotide of dmpk. They show, you know, they've shown DMPK reductions in patients and they've shown decent benefit on an endpoint called V HOT in phase two. And that's sort of what they designed this Phase three around as the primary endpoint with a number of secondary endpoints that Novartis kind of teased out there that maybe there's something interesting in subgroup analysis or secondary endpoints in the study that we'll have to see when they present the full data. But the failure is the huge disappointment for DM1 patients who don't really have an option in terms of a care, a treatment. And this would be be something that should be disease modifying if it worked. And it calls into a lot of questions like what happens for DM1. Look, I never got there on Avidity. I started covering dyne and not avidity because I thought there were a lot of questions about the next downstream marker in terms of what you're looking for pharmacological activity. There's this measurement, Casi 22, which is a measurement of splice correction, and it's not totally standardized. And there's a lot of like assay variability and all the questions that you always have when you're measuring something like splice correction in patients. But you know, the avidity data never really showed me any compelling evidence that they were actually achieving splice correction despite showing DMPK knockdown in blood measurements. Whereas Dyne does Show Placebo adjusted CASI 22 benefits, their average is about a 25% splice correction. So that's sort of like where, you know, I was going into the status. I. That certainly causes me to question the overall thesis both in terms of do you need a lot of splice correction? Do you need a little splice correction? Is this the right assay? Is there so much variability that you don't really know what's going on in these patients? And the bigger question of is V hat just one of these endpoints that's just so heterogeneous over a long period of time or a short period of time or different scenarios that it's just very hard to show a benefit on V hot? And maybe this is just the wrong endpoint point to be utilizing for DM11 studies. And you know, companies can think about looking at different endpoints over longer timeframes to kind of show functional benefit. But look, we're going to see expansion cohort data from Dyn early next year for their version of this drug. We're also probably going to see at WMS in Japan in a few weeks the full Novartis dataset. So, so we'll get a better picture there. But certainly, you know, another, another big disappointment. Another big, big disappointment from the standpoint of management of Novartis given just the scale of that acquisition. And you know, I know, I know. I think Aaron was going to talk a little bit about and subsequently seeing some activist or activism against Novartis in the wake of these events.

Paul Matisse: Do you guys mind if I just chime in on the DM1 space real quick though?

Tess Cameron: Go for it.

Brian Scorney: Do it.

Paul Matisse: Yeah. So, I mean, I cover Dyne too. Like, like, like Brian and I've covered Al Myoma Ionis for a really long time. And you know, as Brian sort of alluded to, like a big question with the avidity approach in DM1 was that they use Sirna and Dyne uses an antisense oligonucleotide. And I think we've seen in most all readouts right where the two are heads ahead, SRNA has outperformed. Right. We just saw this in, in the TTR space. It's probably not just a, a payload issue there but the payload on SIRNA seems to be more potent. Maybe you have a wider therapeutic index most of the time. But this disease is different because in this disease it's not the protein that's toxic, it's the DMPK RNA that is stuck in the nucleus of the cell. And so there was always this question as to whether SRNA is the right modality for that, because the original description of the SRNA mechanism of action was that it's a cytoplasmic mechanism of action action. And I think what's interesting is that if you look at, you know, a couple of the diseases where ASOS have thrived, right, they've been nuclear targets like SMA being one of them.

Brian Scorney: Right.

Paul Matisse: And we don't, we don't see a SIRNA SMA program in clinical development. So, you know, when these companies were private before they went public, and then when they were early public, right, these were, these were public companies with, on really preclinical data, even the dying pre clinical data we always thought was much more convincing saying nuclear knockdown. And you know, some folks I talked to in the industry side who were involved in SIRNA were a little bit skeptical. Not that SRNA wouldn't work at all, but that it was really just the right modality. Like let's say it even is active in the nucleus. If it's way more active in the cytoplasm, it's going to be lowering more of that healthy DMPK transcript, which is

Brian Scorney: probably half of it.

Paul Matisse: And you know, to Brian's point, right, we've seen DMPK lowering for these companies, but you can't differentiate from the mutant versus the wild type. So. So I still am hopeful that Dyne has a shot. Definitely the endpoint question around vhat is like part of the right question for sure. But you know, if you look back at the phase 12 data for both companies, you know, Dyn's VHAT data does look more consistent cohort to cohort, they have a bigger impact on splicing. So, you know, and we saw Dyne stock, right, trade down a lot and then recover a decent amount too. Because I do think some people appreciate these nuances. And you know, for Dyn, if it does work, right, the setup has changed a lot because previously they were a second mover trying to pursue an accelerated approval regulatory strategy or Avidity was doing full, you know, now that could be different, right? If they actually do work, they're in the lead and you know, their, their upside I think has increased.

Tess Cameron: Great. Well, thank you Very much Paul. So maybe we can move on. And Yaron, I think you had, you know, perhaps you or Brian had some comments on just activist, you know, activist letter for Novartis following these multiple disappointments for them.

Jeroen Weber: Yeah, maybe let me, I'll kick it off and then Brian Chai and definitely chime in and supplement further. So this is fairly unusual. The key letter came out of Artisan Partner that essentially wrote a letter raising concerns about board oversight of acquisitions, whether they need stronger board talent in an acquisition committee. Also advocating for compensation overhaul away from adjusted metrics that include specific write downs, which usually is related to one time acquisition related chargers. And ultimately called the party sort of quote unquote being over and really criticizing the chair. And it sounds like there's been several other shareholders spoke with Reuters and also really called into question acquisitions and the merits of some of these acquisitions, whereas others actually defended him saying this is within the normal sort of odds of development. I think Novartis basically said that their strategy will remain unchanged. They're going to be looking at broad pipeline capital allocation with bolt ons, dividends and buybacks. I think what was outsized here is the deal for, for Avidity was about a $12 billion deal. Usually Novartis talked about a 5 billion and below sort of bolt ons. I think the challenge if you look at street models is people kind of our team, specifically on the pharma side, our esteemed colleagues removed in their published research removed about 5 billion in sales from the model and it shaved off the EPS kegr by about 200 basis points to 4% kind of long term. But where this really hurts Novartis is that these cuts came at the time that they needed these revenues to be there when they're facing loss of exclusivity. And so again I think this calls into question and recall Novartis actually hired a very esteemed analyst, Ronnie Gal, to run sort of BD and strategy there. And it's always a question of how much risk do you want to take? Do you want to go early, maybe pay 2 billion, 3 billion, 4 billion for Boltons before let's say proof of concept phase two data comes out. And at that point you should be you know, throwing like a hitting success rates like a, like a three point shooter. You know, I think it's maybe 35, 40% these days with the modern NBA as opposed to 2012 billion, like in this case, in which case you need to be, you know, a free throw shooter at a 90, 92% sort of, you know, range We've always advocated in our work that when you do a $12 billion deal you might not take quote unquote clinical risk, famous last words, because you always do. But you never actually hit your commercial published sales estimates when the 12D filings that you put out to the SEC. We've done an analysis and it's like rarely these deals actually get renumerated because as you know, no one's going to say we pay 10 times P peak. So what they say is we paid three times peak, which is digestible and acceptable. But then they totally inflate what these revenues are going to do. Look, the bottom line and again our view is we all know that this is pharma is not a sustainable business model. You do have exclusivity, which is unique. That no other businesses really have M and A usually is value defeating. We do believe you should go early, you know, do six deals and not one hope for two of them to work and then they're going to work in an outsized way and you keep the financial upside. But just doing stock buybacks and acquisitions that historically has never worked for large cap buyer pharma. In our view, something else needs to go right for these stocks that then come back. Brian, over to you.

Brian Scorney: Yeah, and I've been talking about that with investors a lot this week too, right. I mean and Novartis just isn't the only one, right. Like we're looking at, I don't know if I want to say unprecedented, but borderline unprecedented loes across large pharma over the next like five, ten years. Right? So, so there is a, there's a need to sort of replace these revenues. I mean look, that's probably a bit. We were having did one of the best M and A years ever in biotech and I think that's a, that's a driving factor, right? Like these company managements realize like they can't cliff their revenue stream and they need to find things to kind of, to fill in there. I guess the question for me and what I've been kind of talking about with investors, right, Like Novartis to me has seemed like one of the more risk tolerant companies in terms of buying things that aren't completely validated, clinically de risked and certainly with the avidity deal that's kind of blown up in their face. And look, I mean we all know I have gotten blown up on so many clinical stage companies before when I think something is going to go right and it winds up going horribly wrong. That's the game. But For Vas and Rani, they're kind of in the hot seat just from the one deal and there was a probability that this deal was going to go south and they took that risk. I just wonder if this pushes more companies to do de risked acquisitions. Is this favorable for early commercial post phase three companies where maybe pharma is going to just overpay to acquire revenues. Because. Because you're probably not on the hot seat nine months later because a phase three clinical study of $12 billion deal you did winds up blowing up and having to be written down.

Paul Matisse: Well, yeah, and Brian, DM1 is muscle, but it's neurology. It's a disease with subjective endpoints. We saw what happened with Seravel, with Abbvie and we'll soon see what happens with Karuna in the ADP study with Bristol.

Brian Scorney: Right.

Paul Matisse: So. So if that's negative, I would say in neuro development stage deals are going to be probably a pretty tough sell.

Brian Scorney: Right.

Paul Matisse: Until something's fully de risked.

Brian Scorney: Yeah, agreed.

Tess Cameron: Yeah. I mean the other thing that we've seen, right. Is a fair amount of fairly early M and A, right. Where the deals are small enough and the company is early enough where if it does blow up or not end up working, you haven't lost too much. Right. So, so, you know, it's, it's interesting, but I wonder if that could lead to a kind of barbell approach where it's like, yeah, you, you know, you got to be pretty de risked or like early enough and cheap enough that. Hey Tess, something does.

Paul Matisse: Can I ask you a question about that?

Tess Cameron: Yeah, please. Yeah.

Paul Matisse: Well, because you're like, you know, you, you have, you know, you and colleagues of yours, right. You guys often have like board seats and earlier stage companies that, you know, are probably dual tracking the whole IPO versus M and a process. Like what is the conversation like inside an early stage company when there's a bid and you know, how level headed are, you know, some of these entrepreneurs who are obviously deep believers in what they're doing about like what the true POS is. Right. You know, because like an investor and analyst might be involved in an IPO of a company and think it's a really attractive stock and you know, still model a 30 or 40% probability of success. Like is it a, is it hard for some of these earlier stage company entrepreneurs to really like think that way? Like what's your experience?

Tess Cameron: Yeah, I think it like it varies so much by individual and also by, you know, by board member. Right. Obviously area where a lot of people have strong opinions. But I think that for, you know, for a lot of entrepreneurs, like when they get a bid and an offer, it's like, that is real money that's on the table. Right? Like, you don't want to ignore that or diminish it, and you have to take it seriously. And where we find ourselves working with a lot of the, you know, our entrepreneurs who, like, have, you know, had offers like that is, you know, helping to just reinforce confidence. Right. Because they're there for a reason and we're investors for a reason, which is, you know, for believing that these are programs that can have value and that we can take forward independently. Right. And. And you just have to really balance that and have a realistic assessment of what a path forward looks like and really help reinforce the confidence of any executives on the team about the ability of the investor syndicate to stick by them and help bring things forward. So that's where we often find ourselves in these conversations. But of course, in every case, like, there's a number where it works. Right?

Paul Matisse: Makes sense.

Jeroen Weber: Yeah, Let me maybe chime in on this. And everybody please, please chime in more. You know, one of the things, we spent a few years sort of on the CFO role and even had some BD responsibility and the team around where we were was very experienced in bd. So we, you got. Got to learn a little bit about this area. And one of the things that, that maybe not totally appreciated externally, when these companies do deals, you know, when you get married, you marry who you want to. When you do deals, you sometimes ultimately buy who you're able to buy. You know, we always think on Wall street, oh, there's 37 companies you could buy. You should buy these three. Those three might not be sellers to test this point. They might not be sellers at that time point either, or at the valuation that you want, want. So on the other side, it's very hard to do Vas's job and Ronnie's job. You don't have an unlimited set of options. We always think that These companies have 100 levers they can pull. That's not the way it works at all. And so when you need to do deals which are accretive to you at a certain time point, at a certain risk parameter, you really don't have a huge number of options which are also in your therapeutic area that fit and that you're going to get consensus in buying internally from R D, from finance, from strategy, from clinical, you know, from regulatory and your board to actually do. And so we have to Kind of keep that in mind too.

Tess Cameron: Yeah, that's a really, really important point, Jerome. Really important point. Yep, yep. Jeroen, maybe sticking with you, let's talk about one of the positive data sets that came out this week. So Royvant had phase 2 data in pH I L D. Tell us about their data.

Jeroen Weber: Yeah, so that's really happy news and big congrats to Matt Klein, who is a very frequent guest, is the CEO of Rovent, as everybody knows, really has done an outstanding job and is a real talent. Royvint is extremely well managed. Recall that this is a program is an inhaled once a day. It's a soluble guanoly cyclase mechanism which they in license from Bayer and when they did the Bayer, I think many of us were kind of scratching our head and saying it's kind of interesting that Bayer developed this inhaled program because Bayer has an oral drug which is approved for pulmonary arterial hypertension. Pah what we're talking about is Ph I L D which is pulmonary hypertension, the interstitial lung disease. There's four different categories. This is sort of the two extremes of it, different market than physical. So why is Bayer out licensing it? And ultimately was that they're clearly not moving forward in this area broadly as a part of their sort of rebalancing and restrategizing. There was interesting Phase 1B data that showed very good peripheral vascular resistance, a benefit in the lung reducing the blood pressure and the resistance in the lung which improves heart function. And this is sort of the proof of concept. Phase two, this was about a 16 week study and obviously an extension, a decent sized study. And we all knew that PVR is going to work because in the past they showed 38% reduction with a single dose. So we sort of knew that's going to work. It showed 56% by the way, so really, really solid. But we didn't really know whether the six minute walk test will work. That is what you need to show in phase three. And when you looked at that you sort of knew physiologically if you do one you should, the other one should follow suit. But there's really not that much data to draw upon in this area either from them or from their competitor, which is Tyvaso from United Therapeutics, which is approved specifically with Tevaso. They showed you the six minute walk data. But interestingly they never released their PVR data in phase three so we couldn't at least have some correlation. And the study of course again going back to Royvin was pretty small and underpowered for the six minute walk. Well, that data came out, looked amazingly good. 36 meters, you know, 30 meters is what you need to see. And what's more importantly, it got better and better into the even 50 meter benefit by sort of 48 weeks. So patients continued to improve and in very true roiven fashion, when they released the data they said, aha, surprise. The phase three has already started. So they constantly are able to move timelines up, which was the original premise of Roy Vent, that they will do things better and faster than pharma does. So it was very surprisingly to the positive that the phase three is already ongoing too. In what could be a sizable, sizable market based on relatively small penetrations, you get to about two and a half billion in sales. They're also running a study now in combination with Tyvasa, which is the United Therapeutics drug drug, the Tyvasa. The one issue is it does cause cough, whereas the drug from Roivent does not cause cough at all. So it seems to be better tolerated. So phase three is ongoing. They'll talk to FDA to see whether they need to change the trial design, maybe just incrementally now that they have the full data in house. But stock has performed really well. They're obviously launching Brepacitinib now, which just got approved for dermatomyositis. And the expectations is for a solid launch and they have a lot of catalysts coming. So again, congrats to Matt and the team. Really, really great job.

Tess Cameron: Yeah, just echoing how, you know, it's a, it's a great year. Really, really strong year for Royvant. Really strong execution and fantastic that they not only released positive results but are also, you know, getting going on their trial really quickly. And I think that expectations for the, this, I think the expectations for this program were very low. Right. Jeroen? I think, you know, it was a, it was a pretty big surprise that it had, you know, that it had the therapeutic impact that it did. So let's move on to the next one. So Paul, I think a couple for you. Maybe we can, you know, you can, you can share some updates for Biohaven and Far Verus that came out this week.

Paul Matisse: Yeah, sure. I can zip through these. So Biohaven had what looks like a small setback, but might be more meaningful in context for their KB7 drug in epilepsy which is put on partial clinical hold. It's in phase three and the data are coming quite soon.

Brian Scorney: Put on partial clinical hold.

Paul Matisse: Kind of some opacity around the disclosure here. It's related to a metabolite in rats where there's. There's insufficient information to characterize the risk in people. We've seen things like this before, right? I mean, these can be significant issues. They can be complete non issues, right. I mean, there was a. Remember a whole metabolite question with lumateperone back in the day in one sort of species and you know, look at what that ended up meaning to intracellular. A whole lot of nothing. But, you know, I think the broader context here, right, is that These guys are second behind Xenon in the KB7 space. And epilepsy, you know, Xenon's clinical data and profile for. Is that to counter is pretty incredible. Their data is awesome. Efficacy is differentiated, safety, tolerability is really good at their lowest dose, right. Which still has pretty respectable seizure reduction. So probably just makes it tougher for them to compete in this market.

Brian Scorney: I don't know if Brian had anything

Paul Matisse: to add on that one.

Brian Scorney: Yeah, I mean, just, just real quickly, I think, I think the interesting nuance here is that they just did this deal with SK Pharma like a couple of. Of weeks ago, right. So, you know, this may wind up being nothing, but, you know, I've been sort of feeling questions on biohaven, like, is SK gonna pull out of this deal? That they have basis to pull out of this deal? I think SK did like a call yesterday and they're. They said that they're like, you know, talking with Biohaven about not closing the deal until after this resolve biohaz Haven, you know, they could resolve this in a month and maybe a month from now, it's, it's fine. But look, I kind of agree with you. Like, I'm a big as a Kolner fan. I like Biohaven as a company for other reasons other than Opecalm. So like, you know, to me, partnering with SK who you know, already has a very good epilepsy drug drug launch under its belt right now, seemed like an ideal partner. And the fact that they're bringing in $400 million upfront from the deal, like, I think that's like a huge win for Biohaven. So, you know, I do not want to see any, any risk to, to this partnership. And you know, I think that's where people are kind of like edgy, like, oh, you definitely don't want SK to wind up walking away here because, you know, it's unclear that outside of some Goldilocks position, you know, biohaven with Opecallum is going to be in a position with like the dose flexibility to really compete With Azada Kolner, given how much more data they have.

Paul Matisse: Yeah, that's great context. Thanks, man. And then, yeah, far very Paris, your own alluded to it earlier, but these guys finally broke through something that people have been trying to do for a long time now, and that is generate, you know, really competitive efficacy data with an oral drug for HAE prophylaxis. HAE hereditary angioedema is a disease where you have these intermittent swelling attacks. It's probably like as far as rare diseases go, it's become one of the better served markets just with the amount of iterative innovation there, you know, going back to Dyax and viral pharma. And then, you know, now today you've got these prophylaxis drugs like Taxiro from Takeda, which is reducing the frequency of these attacks by like 90%. You know, we had seen biocharactera come out with the first oral prophy drug, but the attack reduction there was in the sort of 45% range. This was over 80. So, you know, I mean, I'm sure I don't cover for varys. I'm sure the analysts covering that closely, trying to do the granular patient modeling or sort of trying to reconcile where this drug fits in in an increasingly competitive landscape. And you know, there's other programs coming here too, right, that are going to be potentially further decreasing the injection frequency even out to say like every six months. Right. And I think that will be an interesting question. Do patients prefer an oral every day or do they prefer an every 6 month injection? But as it relates to Farvaris, right, like the thesis looks like it played out. And you know, that company had a bump in the road too. I think at one point they had a, at least a part of commercial clinical hold, you know, and you know, look, look at the data now. Right. So, you know, big success for them.

Tess Cameron: Yeah. Great. Well, maybe we'll close with another data update that we got this week, which was from Structured Therapeutics. A lot of people were watching their oral amylin, you know, for weight loss. You know, there's been a lot of excitement about the amylin space in, you know, Amylon injectables, in particular Lilly's Iloranti as probably the only Amylon out there that could get to competitive monotherapy efficacy. And quite a bit of interest in Structured Therapeutics for having the first oral amylin that we now have clinical data on what structure shared. They had a single dose study and they were sharing the results of their single ascending dose study and the top dose, which was 10 milligrams, showed 3.33% body weight loss with just, you know, with just one dose. You know, I think the, the market was, you know, a little disappointed. A little disappointed. The stock kind of, you know, sold off, rebounded a little bit, you know, sold off a little bit more. But, you know, overall, I think, you know, some of the reasons for that may just have been, you know, higher expectations for, you know, overall overall weight loss loss or maybe tolerability, which had pretty high nausea, vomiting in some of the higher milligram doses. But I think it's exciting to see more orals come into the space and see not just the GLP1 Orals where we have both the WeGovy, the kind of oral WeGovy that was launched a while ago by Novo, as well as Orphaglipron. And you know, structure is, you know, right up there with their GLP1 and, you know, now has, you know, now has another target that they can, you know, think about in terms of either combinability, you know, combinability with their oral. So, you know, any other, any other comments or data that folks want to, want to comment on from this week? Great. Yeah, let's hope for, you know, I think we had a good, good discussion. Lots of challenging, lots of challenging data this week. You know, good to have a couple of bright spots with the royband, the Royband data in particular. Really appreciate everyone tuning in and wishing everyone a great weekend.