Getting comfortable in coach
So, I’m getting on a plane the other day. As I’m standing with sweat dripping down my back, waiting for the lovely people in first class to get perfectly situated, I noticed a CEO of a small biotech company sitting there in row 2, eager to sip his complimentary champagne. His company just raised a bit of money, $50M Series A I believe. Which on most accounts sounds like enough. You don’t need to ask what they need to do. Fitty Mill should be enough. They have a first-in-class product and positive preclinical data - just like everyone does.
I’m going to bet a solid C-note that they will spend that money. Spend and spend. As I sit from my vantage point further back, I’m certainly feeling a little envious. But I’m wondering when the implosion will happen? When will they run out of go-juice? I wrote the CEO’s name on a piece of paper, put it in an envelope, and set a calendar reminder in 18 months. I’m happy they’re doing well. It’s my business to see companies making advances. But. The but. So many promising ventures running out of cash. Tough times ahead. Save your cash! Travel coach.. Your investors will thank you.
The Times They Are a Changin’
PC: Ron Lach
Speaking of flying coach, Flagship Pioneering, a venture capital based in Cambridge, Massachusetts, is trying to steady itself on wobbly legs after two of its successful companies have recently succumbed to the weight of their own growth. Yes, this is the pull-back-a-bit-on-the-reins section.
First, Rubius Therapeutics began its descent by scrapping its platform of “developing an entirely new class of cellular medicines called Red Cell Therapeutics™ for the treatment of cancer and autoimmune diseases” and laying off three-quarters of its staff back in September of 2021. Restructuring with 53 remaining staff members, developments never caught fire, with only minimal success among trial patients with advanced tumors.
By early November, 2022, Rubius swapped out CEOs and gave the boot to most of its remaining staff, with the skeletal crew left to try selling off the vestiges.
Then, also this month, Repertoire Immune Medicines announced the layoff of 65 staff members, over half, after data revealed paltry progress in the trial studies of its top two assets, RPTR-147 and RPTR-168, the two autologous cell therapies being tested in HPV-positive tumors. Both Repertoire and Flagship have been mostly hush-hush about the causes of the impending implosion, but they affirm Repertoire’s commitment to “develop transformative immune medicines against novel immune targets in cancer, autoimmune disorders, and infectious disease.”
Both cases resound with the noble yearnings embedded in Flagship’s About Us: “We are pioneering scientists and professionals who build companies that transform human health and sustainability,"
But those yearnings then crashing under the bloated unmanaged growth. One surmises.
Consistent with the fortune that Flagship pulled in during the height of COVID because of Moderna shares, Repertoire had raised $189 million for its research just a year ago. Now, though, Flagship has sent in Torben Straight Nissen, a senior partner with purported skills at righting ships. Let’s wish them well, but only time will tell.
Rainbows Follow Storms
Yes, the impacts of the pandemic linger, and global concerns continue to present obstacles. But as I noted recently, it does, indeed, seem like a tantalizing time, as one industry analyst Arda Ural from EY (Ernst & Young) agrees, “for MedTech executives to reimagine their business models and think of opportunities beyond the upcoming slowdown."
Cautious optimism in uncertain times doesn’t equate to paralysis. Instead, careful planning, innovation, and calculated risk-taking may transform the industry and propel it into future advancements.
The 16th annual Pulse of the Industry report produced by Ernst & Young LLP (EY US), outlines these initiatives in four areas:
- Embrace the shifting nature of MedTech innovation
- Adapt to new commercial models
- Design forward-looking supply chain strategies
- Recruit and retain a strong workforce
Certainly, as the numbers reported by “Global MedTech industry reaches milestone revenues, but new challenges emerge” reveal, the industry has had fluctuations of highs and lows, but “Overall, the health industry is encouraged by MedTech's innovations to help overcome the macro uncertainties ahead.”
Eyes wide, hands firm on the helm, and straight ahead.
Too Big To Fail?
PC: Photo by Kenny Eliason
For decades people have argued whether mergers and acquisitions create or destroy shareholder value. Many believe that M&A is a surefire way to destroy shareholder value for the acquiring company. But yet it keeps happening over and over.. With a recession looming and investors tightening their belts we’re likely to see a lot more M&A announcements.
Johnson & Johnson (JNJ) has capped off a year of a limited number of high-profile acquisitions not to be outdone by its latest announcement to purchase Abiomed, a Massachusetts-based maker of heart pumps.
As an unusually large deal to cost JNJ about $16.6 billion, analysts report that it suits the company’s and new CEO Joaquin Duarte’s commitment “to enhancing our position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.”
The exchange of such a big wad of cash, approved by the boards of both companies and expected to be completed early in 2023, surely raises expectations for their shareholders and the medical field. Shares of Abiomed (ticker: ABMD) gained 48% to $374.03 in premarket trading the day after JNJ agreed to buy it for $380 a share. The fact that the stock was trading so close to the deal price is a sign that investors expect the acquisition to be completed with few problems. Johnson & Johnson stock was down 0.6%. :-
Nice News for the Little Ones
NICE, with its sorta kitschy but presumably apt acronym, is set to prescribe five digital cognitive behavior therapy (CBT) technologies as potential treatments for children with levels of anxiety from mild to moderate.
The National Institute for Health and Care Excellence, which provides guidelines for healthcare in the UK, tentatively recommends the use of these technologies but posits that they won’t replace face-to face treatments.
The digital offerings include games, videos and activities. The real world, so to speak. That is, use what kids will be exposed to anyway to perhaps help them manage their journey through anxiety, with the support of mental health experts.
The bad news: We need to take cautious steps. The good news: We’re taking steps. Right?
I don’t know about you, but this month has flown by. Not sure if we’ll get another newsletter out before Thanksgiving but JIC -
Most thankful for my kids,
and all of you!
Appreciate every single one of you.
Would also appreciate if the airlines started loading planes from front to back. Start the drinks at the gate. Let us grab the snacks on the way in. That’s innovation!
Very truly yours,
Catch us at an event!
BIOMEDevice Silicone Valley - November 29th-30th, 2022
Expert Panel: Making the FDA- Friend, Not Foe: Tips & Tricks for FDA Engagement featuring Isabella Schmitt, Proxima's Director of Regulatory Affairs
Wednesday, November 30th - 12:15 pm – 1:00 pm
- This panel will discuss the various types of engagement that sponsors can have with FDA, along with do’s and don’ts for various types of interactions and the best times to engage. It will cover the sponsor side and FDA side of the relationship because when we can understand each perspective, we’re better able to work together.
Piper | Sandler 34th Annual Healthcare Conference - November 29th-December 1st, 2022
We're honored to be invited to this year's conference. The event will feature approximately 400 of the most highly regarded and innovative companies across biotechnology, specialty pharmaceuticals, medical technology, medical diagnostics, life science tools, healthcare services and information technology.
Tune into Season 2: The F Word (Fundraising), today.
Main photo credit: Photo by Daniel Frese