# Episode 151 - August 8, 2025

An episode of [Biotech Hangout](https://invisiblenetwork.ai/podcast/1568911820), 11 Aug 2025, 53 min.

Audio: https://anchor.fm/s/55bdff38/podcast/play/106742083/https%3A%2F%2Fd3ctxlq1ktw2nl.cloudfront.net%2Fstaging%2F2025-7-14%2F405674286-44100-2-9f95e7e652a09.m4a

On this week’s episode, Grace Colón, John Maraganore, Paul Matteis and Eric Schmidt dive in with a discussion on policy news, including the pharma tariffs and latest on the Trump administration’s Most Favored Nations drug pricing plans. The co-hosts then question if Vinay Prasad has a path back to the FDA and express hope for someone more centrist if he does not return. They also mention the CRLs for Scholar Rock and Regeneron were due to manufacturing issues. Continuing with policy news, they cover RFK Jr.’s decision to cancel ~$500 million in Biomedical Advanced Research and Development Authority (BARDA) contracts related to mRNA vaccine development. In data news, the group discusses Vertex’s latest non-opioid pain data and the company’s future in this therapeutic area. Next, the co-hosts highlight Alnylam’s recently approved treatment for cardiomyopathy, noting it has surpassed consensus estimates and predicting mega-blockbuster status. A recent report on patient deaths among those who took Agios’ Pyrukynd for anemia - though determined to be unrelated to the drug - is also discussed. The co-hosts then review Biogen’s new “ventures” team, and the episode concludes with an overview of Novartis and Avidity deal rumors. *This episode aired on August 8, 2025.

## Transcript

[0:00] You're listening to Biotech Hangout, a live and unedited
[0:03] weekly discussion of all the latest news in our industry with
[0:06] a group of biotech insiders. I'm Grace Cologne and my Co host
[0:10] today are Eric Schmidt, John Moraganori, Paul Matisse and
[0:13] Bruce Booth. For more information on our
[0:16] hosts and guest speakers or to listen to the most recent
[0:18] episode, please go to biotechhangout.com.
[0:22] Once again this week, lots going on, especially on the policy
[0:25] side. So why don't we jump right in
[0:27] with one of the the big shocking, maybe not so shocking
[0:31] pieces this week, which was the cancellation by HHS of major
[0:35] barter projects related to mRNA vaccines. 22 projects and 500
[0:39] million in total. John, I know you had some
[0:42] comments on this. Should we start maybe with the
[0:44] other news and then on the? Tariffs.
[0:48] Prasad And then we'll go back to John on the barter stuff.
[0:51] That's a great, that's a great point.
[0:52] Why don't we jump to the other policy issue, which was a lot
[0:55] going on, on tariffs and MFN. After the initial announcement
[0:59] in May, in May about MFN, that move was lambasted.
[1:06] There was a lot of warnings about what it would do to the
[1:08] industry and the news continued. I mean, there was estimates that
[1:13] this would have a $1 trillion impact to the industry.
[1:16] Last year, there was a trade deal announced between the US
[1:19] and the EU, including a 15% tariff on pharma.
[1:26] But then this week, oh, and of course, last week, there were
[1:29] the letters sent to top pharma and biotech companies about MFN.
[1:33] And then this week, President Trump said pharmaceutical
[1:36] tariffs will be announced as soon as next week and could
[1:38] reach up to 250% after the next year and a half.
[1:43] So, Paul, please help us understand all of this.
[1:49] Sure. I mean, I think the short answer
[1:50] is that there's still a very, very wide range of potential
[1:53] outcomes here. I mean, I think we all know like
[1:56] if taken literally, right, taken 250% or take into a scenario
[2:03] where companies have to just give Medicaid the lowest net
[2:07] price they get across a collection of countries that I
[2:10] mean, this is just objectively bad for the industry.
[2:12] And I think Eric would agree that, you know, these worst case
[2:15] scenarios are nowhere near pricing the stocks, right.
[2:18] So I think like, but I think the flip side of this is that, you
[2:22] know, if we learned anything from all of the other tariffs,
[2:26] is that what we have here still looks probably like it's
[2:30] negotiation tactics and that this is a first offer that might
[2:34] be more draconian. And and ultimately, you know,
[2:37] pharma is going to have to pharma budget going to give up
[2:39] something. But how much they're going to
[2:41] have to give up remains sort of, I think open for open for debate
[2:44] or open for us. So to see, I mean, as I sort of
[2:48] see the tariff piece, I think is the harder one to kind of value
[2:52] into companies. And I've been surprised by the
[2:55] number of companies I cover who say that tariffs would have
[2:59] very, very little impact in them, even companies that have
[3:02] key parts of their supply chain outside of the US.
[3:04] And you know, I'm not in, I'm not, I'm not an accountant, but
[3:08] I have to believe that there are some really, really smart
[3:11] lawyers and accountants that are kind of working on ways that you
[3:15] can maybe play around with Pogs or transfer price or things like
[3:18] that to kind of mitigate the impact.
[3:20] And I think that that's kind of what certain companies are are
[3:23] alluding to. And so I guess what I'm trying
[3:25] to say is I feel like on the on the tariff side, just from
[3:29] talking to some of my companies as an analyst, I guess I'm at
[3:32] least I face it, maybe a little bit less worried about that,
[3:34] especially if the number comes closer to something that like
[3:37] what we saw in this, you know, EU deal, for example, on the MFN
[3:41] side. I mean, I think that that is the
[3:42] far scarier thing here for the sector, but still a wide range
[3:48] of outcomes, right? And and maybe this ends up like
[3:50] the IRA where it's a few drugs at first, maybe this ends up
[3:52] being for, you know, newly launched drugs, which in some
[3:56] ways might actually have pros and cons, right?
[3:57] I mean, because, and again, I'm thinking this purely from a
[4:00] pricing power perspective, not from a public health
[4:02] perspective. I think that's a separate topic.
[4:03] So purely from stock perspective, right?
[4:05] I mean, I think there's a lot of ways this could play out here.
[4:07] And I guess I'm a little nervous because I don't feel like, you
[4:12] know, this has been weighing on the XBI as much as it could be.
[4:15] You know, I think a lot of people are just kind of almost
[4:18] jaded at this point to the Trump news cycle.
[4:21] And you know, again, wide range of outcomes would love other
[4:23] people's perspective. Yeah, I'll, I'll jump in.
[4:29] I generally agree with everything Paul said.
[4:31] And you know, particularly think that it's MFN and, and, and less
[4:34] so tariffs that are the industry source spot right now.
[4:39] You know, on tariffs, we kind of got conflicting news.
[4:41] On the one hand, I think Trump was on CNBC and talked to Squawk
[4:45] Box about how he's really got pharma in his sights and, and
[4:48] he's hoping potentially the tariffs could, could reach us as
[4:51] high as 250%. But, but that's probably a lot
[4:55] of bluster. It's, it's probably, you know, a
[4:58] way to leverage the Pharmaceutical industry toward
[5:01] his goal of, of reducing drugs and, and maybe even, you know,
[5:04] having them play a little bit more on the MFN side.
[5:08] And I could totally agree with Paul.
[5:09] I think the accounts have already figured out how to game
[5:12] the system with regard to tariffs such that they can
[5:14] import drugs at price points in their supply chain that are
[5:19] relatively modest and low and therefore have relatively modest
[5:23] and low tariffs on those importations.
[5:27] And then subsequently either feel finish or, or do other
[5:30] things in the United States to, to maximize the, the sales price
[5:34] and the step up potential and, and, and get around those
[5:37] tariffs. But the other thing that
[5:38] happened this week was that Trump also suggested he could
[5:42] exempt some of the technology companies from from tariffs,
[5:46] 100% of chip tariffs might be exempt, for example.
[5:49] So don't know quite what's going on there.
[5:52] And certainly I'm not a tech analyst, but I know some of my
[5:55] colleagues in farmer land have thought that, you know, maybe if
[5:58] chips and semiconductors can be exempt from some of this, pharma
[6:02] can get an exemption to my suspicion.
[6:04] My strong suspicion is that would only happen if the
[6:08] industry maybe comes to the table little bit more and
[6:11] strikes a deal on MFN. And you know, we did hear from
[6:14] from multiple large pharma companies that have reported
[6:17] earnings in the last week or two that they are having those types
[6:21] of negotiation discussions with the administration.
[6:23] So we'll we'll just have to see where that lands.
[6:25] Eric, you should. We talk about this Prasad news
[6:28] and the continued yeah saga. You kick it off.
[6:33] Yeah, OK. Well, I guess the other topic we
[6:37] had out of Washington this week was around the seemingly strange
[6:43] possibility that Doctor Prasad might make a comeback.
[6:46] This came from an HHS interview around the Maha efforts to to
[6:52] revolutionize healthcare. And I guess Doctor Makari was
[6:56] asked by someone from the audience, presumably someone in
[7:00] the press, whether whether Doctor Prasad had left, under
[7:03] what kind of circumstances and, and, and what, you know, what,
[7:06] what the deal was there. And, and Doctor Mccary quickly
[7:09] came to the defense of his friend, which was nice to see.
[7:11] And he suggested that Doctor Prasad was not at all pushed
[7:15] out, that it was Doctor Prasad's decision to to leave the FDA
[7:18] and, and leave seeper. And then some of the other media
[7:21] reports we've seen around the Mahad efforts to, to, to move
[7:26] him aside might might not be true.
[7:29] And then what I think really caught our attention, Paul, was
[7:32] that Doctor Mccurry went went even further and said that he's
[7:35] in almost daily conversations with Doctor Saad and has invited
[7:39] Doctor Saad to come back to the agency and is trying to convince
[7:42] him to do just then. So, you know, that's the news
[7:45] from earlier in the week. I was honestly flabbergasted by
[7:50] the statement that, you know, there's a, an Ave. back
[7:52] potentially for, for Doctor Prasad.
[7:54] I I know that Doctor Makari and Prasad are good friends and that
[7:59] I'm sure you know, Doctor Makari feels the loss of his partner at
[8:04] the FDA, but, you know, for, for everyone's sake, I can't imagine
[8:09] that would be a good turn of events.
[8:11] But all your thoughts? Yeah, I agree.
[8:13] I mean, I think like, you know, whatever you think of Doctor
[8:16] Prasad, right, given the controversy with him at the FDA,
[8:19] you know, internally with some of the stuff he had said about
[8:21] the FDA and then, well, externally, it feels like if he
[8:25] left because he was worried about, you know, himself as a
[8:27] distraction. I mean, that's the way it's been
[8:29] described, right? I mean, this would just create,
[8:31] I feel like a much, much, much, much bigger distraction.
[8:33] And I feel like it just would be.
[8:34] So it would be tough on any organization, right, to kind of
[8:37] have you have this huge change in leadership and philosophy and
[8:42] then you have one lead and then they'll come back.
[8:44] I mean, and then, you know, we're going to be kind of
[8:45] talking about, you know, companies now.
[8:48] And hey, when was your meeting with the FDA?
[8:49] Was it during the 1st 10 year Prasad or the second?
[8:52] Like, I just feel like it would be just make like make our jobs
[8:56] too complicated. And already I think it's hard,
[8:58] you know, as an analyst or an investor to be right more than
[9:02] more than 50% of the time. You know, we were having a
[9:04] conversation internally like this week with one of my
[9:08] colleagues at Stifel and just like whether like whether, you
[9:12] know, Prasad really was that much more strict, you know,
[9:17] because I think like that had obviously been the narrative,
[9:19] right, that historically with just everything he had said on
[9:21] social media, this guy's going to be so much tougher in
[9:23] industry. And then, you know, like you
[9:25] were talking about last week, Eric, right, We saw the the
[9:27] ultra genic CRL Replimune and I and I'm forgetting what Oh,
[9:31] Capricorn too. But I guess, like I do still
[9:35] feel like the jury on what the Prasad Sieber look like that was
[9:41] still sorted out, right. I mean, we had this article and
[9:43] you're closer to repping you than I am.
[9:45] Eric around, you know, how maybe it wasn't presided all who drove
[9:48] that CRL, you know, the Capricorn situation.
[9:51] I I wonder if that was something that might have been pushing the
[9:54] FDA flexibility side, you know, maybe farther than usual, right,
[9:57] without opining as much on that, on that company or stock, like,
[10:01] you know, just that was, you know, maybe a little bit less
[10:03] traditional of like a mechanism and a data set.
[10:05] And then with ultragenics are we had something related to
[10:07] manufacturing. So I actually still feel like,
[10:10] you know, a lot of my companies in the rare and gene therapy
[10:13] space still felt like when Prasad was at the FDA that their
[10:16] dialogue and you know, getting things like breakthrough or
[10:19] pivotal trial signups, like none of that had changed.
[10:21] And so, you know, I guess, but I but I think if he came back, it
[10:25] feels it would be such a big distraction.
[10:27] And you know, I think the hope is the hope is we get someone
[10:30] who's maybe a little bit more down the middle.
[10:34] But you know, I feel like it's kind of it's kind of
[10:37] unpredictable. I mean, you know, we haven't
[10:40] seen any sort of shortlist of who is replacement.
[10:43] Yeah, no, those are great points.
[10:45] I mean, I think what you're sort of anchoring around is, and I
[10:50] don't put words in your mouth, Paul, but you know, it's hard to
[10:52] know whether from a review standpoint, Dr. Prasad was good,
[10:57] bad or indifferent. Did he really come down harder
[10:59] or easier on on reviews? I don't know.
[11:02] I'm not sure we'll ever know. But I think one thing that we
[11:06] did see was a little bit more drama for sure and a little bit
[11:10] more unpredictability in his 84 days at at Sea Burr.
[11:13] And it just seems to me that we need to kind of return to
[11:16] normalcy, right. We need almost like a little bit
[11:18] of a healing at the FDA and and hopefully stabilizing at the
[11:22] FDA. We we've talked about how
[11:24] potentially Dr. Prasad and Dr. McCrory are more externally
[11:27] oriented than the internally oriented managers.
[11:31] But yeah, I do hope that whoever comes and and takes his place,
[11:34] it sounds like George Tidmarsh for now is going to be filling
[11:37] in at least temporarily, Seaver's roles.
[11:40] I hope that person can bring more of a, an expertise and,
[11:44] and, and organizational leadership, some maybe a calming
[11:48] presidency. That seems like Doctor Tidmarsh
[11:50] might might be just that person given his given his past.
[11:55] And yeah, I mean, we we just need the review staff to do
[11:58] their job right. This this day and age where it
[12:01] comes down to a single personality, whether that's
[12:04] Doctor Prasad at Sieber or you alluded to the Rep immune
[12:07] situation and some thoughts that, you know, maybe ODAC
[12:11] leadership, sorry, the oncology drug committee leadership was
[12:14] was was what relevant there? Were you surprised by?
[12:17] That you're like a lot closer to the young space in there.
[12:20] Well, you know, if the reports are true and Stat News has done
[12:23] a great job here, I have no doubt, I have no reason to doubt
[12:26] that they're not true. Doctor Prasad was in all these
[12:29] discussions, right? So and it is Sieber that sent
[12:33] the review letter to repent in the CRL.
[12:37] So, you know, everything I've seen about Doctor Prasad tells
[12:40] me he is someone who wants to grab the microphone or the pen
[12:45] and, and make decisions and not be a family on the wall.
[12:49] So suggesting that Doctor Pastor was the one who did that
[12:52] application. And honestly, you know, that's
[12:54] probably semantics more than anything else.
[12:56] I think that Pastor probably does have a view.
[12:59] And, and you know, knowing what the oncology drug division has
[13:02] done historically, probably quite consistent with Pastor's
[13:05] views that that they thought the trial design here may not have
[13:08] been optimal. But at the end of the day this
[13:10] was done on on Doctor Prasad Seaburn watch.
[13:13] The and review was was done by Seaburn.
[13:16] Got to think that if Doctor Prasad wanted the drug approved
[13:19] he would have done it and if he didn't want the drug approved he
[13:23] would have sent the CRL which is obviously what happened.
[13:27] Fair enough. No, I mean, I'm not.
[13:30] You know, I think that makes sense.
[13:32] Like I and exciting look, I again, I don't doubt stat
[13:36] either. I mean stat I think is my best.
[13:39] It's better than any expert network we could have right now
[13:42] on just what's actually going on at the FDA and on the policy
[13:44] side. But you know, like with
[13:46] anything, right, like you never know who the sources or who's
[13:49] saying what and why. And you know, I just think,
[13:52] yeah, I think again, the jury was still out right on what
[13:55] Prasad Sieber might have looked like.
[13:57] And I think probably, at least from a stock perspective,
[14:00] hopefully, hopefully we don't get to rerun this hypothetical
[14:03] back twice because it feels like that would be pretty
[14:05] destabilizing for the market. So before we leave the FDA,
[14:09] Paul, I guess we ought to talk about some news either, you
[14:13] know, from late last week on Regeneron and then this week it
[14:16] bled into scholar rock. But in both cases, we've had
[14:20] some CRLS 1 issued and maybe one in the future threatening to be
[14:24] issued around some manufacturing considerations.
[14:27] Are you, are you close to those two?
[14:30] Not really, but like, I think, I mean, I guess, I guess from your
[14:35] perspective, like how do we, as you know, outsiders in
[14:39] situations when we see things like something related to like
[14:42] ACMC or like how do we actually get kind of a sense or a true
[14:46] gut check on whether or not the FDA is actually being more
[14:50] conserved? I mean, sometimes there's like
[14:51] these overt scenarios, but I always feel like with this kind
[14:53] of stuff, there's like so much level of like informational
[14:56] asymmetry and, you know, it's like a little bit like, who said
[14:58] what? But you cover scholar rock.
[15:01] Like, do you feel like there's actually something here that is
[15:03] eyebrow raising and we should all be thinking about?
[15:07] Well, yeah, so hard to have perfect visibility.
[15:09] And honestly, having spoken to Scholar Rock, they themselves at
[15:13] this stage I don't think have particularly good visibility on
[15:16] on how this is going to play out.
[15:18] For those of our listeners who are maybe less familiar, maybe
[15:22] we should take a step back here. The reason that Regeneron and
[15:25] Scholar Rocker connected is that both have programs under review
[15:32] that were being filled and finished.
[15:33] CMC programs are being filled and finished by a facility that
[15:36] used to be owned by Catalent and and now is owned by Nova.
[15:40] This facility is based in Indianapolis and that facility
[15:43] has been a troublesome facility for a long time.
[15:47] I think there are 43 letters going back now, several years,
[15:52] observations that just seemingly have not been remedied.
[15:54] And as far as I understand it, one of the leverage points that
[15:58] the FDA has to force an owner to remedy a facility is, is by not
[16:06] approving new drugs through that facility.
[16:09] The Catalan now Novo facility, it can, it can ship drugs and is
[16:12] shipping drugs on a regular day-to-day basis and products
[16:17] are coming out of that facility and and being sent to patients.
[16:20] The issues are not seemingly related to drug safety or drug
[16:24] purity or contamination issues. There are other issues,
[16:27] probably, you know, a variety of other issues, but things that we
[16:31] don't fully understand and know about.
[16:34] So products are leaving the facility, but when it comes to
[16:36] approving a new drug that's being finished at this facility,
[16:39] the FDA is really able to throw down the hammer and is able to,
[16:43] you know, force the owner of the facility to, to make
[16:47] corrections. And, and that's exactly the, the
[16:49] situation, unfortunately, that both Regeneron and, and
[16:52] Scholarock find themselves in. I feel for them because they're
[16:56] really kind of caught in the middle.
[16:57] They, they obviously don't own and control the facility and and
[17:01] they're to some extent at the that really completely dependent
[17:10] upon Novo to fix its, its issues.
[17:12] So we had ACRL issue to regenerate I guess 2 CRLS last
[17:17] week and and this week Scholar Rock made the very transparent
[17:22] statement to its investors that it may also have problems with
[17:27] the same facility. Yeah, good question, Paul.
[17:29] I, I don't, you know, I, I don't think we, we understand how, how
[17:33] we can possibly calibrate the severity of this concern right
[17:36] now. The good news from spinal Rock
[17:38] is their, their drug is seemingly approvable from a
[17:41] safety and efficacy standpoint. The drug obviously effects kids.
[17:45] These are patients with spinal muscular atrophy, very severe
[17:49] disease. And I would hope that, you know,
[17:52] the FDA might err on the side of of providing access to, you
[17:57] know, a potentially game saving drug for patients in great unmet
[18:01] need. So, so we're hopeful, but their
[18:03] pedophilate isn't until September 22nd.
[18:06] Maybe there's time to remedy the situation or or to have some
[18:10] kind of alternative process. Interesting.
[18:14] OK, something to watch before we move on with like policy stuff
[18:17] and start talking about companies.
[18:18] Do you want to just briefly talk about the BARDA topic that you
[18:21] proposed? Yeah.
[18:22] I mean, look, I mean, I don't think anybody's surprised that
[18:25] that our HHS secretary is a is not particularly enthusiastic
[18:29] about vaccines. And and we don't have to go into
[18:33] the merits of of that, although I think, you know, most of us
[18:39] would would agree that vaccines are are critical.
[18:42] But I mean, the BARDA decision to basically cut the knees off
[18:46] of quite a bit of funding is really unfortunate because, you
[18:53] know, the mRNA platform, you know, is really something which
[18:57] I think everybody acknowledges was fundamental and in, you
[19:01] know, helping us get out of the pandemic.
[19:04] And, you know, we're not done with pandemics or emerging
[19:07] threats and, you know, even epidemics that that could be,
[19:12] you know, could, could be challenging for society.
[19:16] And, and so, you know, to, to, to, you know, not need to invest
[19:21] in that platform is a rapid response mechanism through
[19:25] BARDA. Obviously there are companies
[19:26] that independently do, do work in the space, but you know,
[19:30] BARDA, BARDA should be, you know, active and in terms of the
[19:34] public health funding aspects of of that platform, it's
[19:38] concerning. It's concerning.
[19:40] And, you know, unfortunately, I don't think things will change
[19:44] on that front until, until, you know, you know, there are
[19:48] changes, you know, a philosophy there, but you know, other
[19:53] countries may begin to get stronger in those spaces with
[19:57] mRNA vaccines, which would would put us at a disadvantage from a
[20:01] national security perspective. So I, you know, I think, I think
[20:05] it's a concerning change. I'm sure bio is doing what it
[20:10] can on this topic. But, you know, we're dealing
[20:13] with a set of views here that, you know, we all recognize very
[20:17] firm. Or be it misguided.
[20:21] John, can I, can, I, can I just mention an interesting personal
[20:24] anecdote that is somewhat related to this.
[20:26] So I, you know, my wife and I, we just had our second child
[20:30] about a month ago and, and in the hospital, right, like when
[20:34] your child is born, right, they offer you the hepatitis B
[20:37] vaccine and just the, just the approach to offering that was
[20:42] different this time. I mean, we were checked on three
[20:45] times in sort of an Are you sure dynamic and, and you can, you
[20:50] can almost get the sense that at the institution level, they're
[20:54] so worried about doing something that someone then freaks out
[20:58] about later. And I guess from a vaccine
[20:59] perspective, right, like this is just kind of a default medical
[21:02] decision generally in newborns. And then and talking to our
[21:05] pediatrician, she was so psyched that we had that we'd actually
[21:10] done it because I've been seeing a lot of families who hadn't.
[21:13] And like this is in Massachusetts, you know, so and
[21:16] I have AI have a control group, right, which is essentially my
[21:19] son was born almost four years ago.
[21:22] Like none of this in the acute setting was even remotely A
[21:24] dialogue, right? So I thought that was, you know,
[21:26] again, it's a one off thing, but it was just really interesting
[21:29] how you can see the attitude being so different three to four
[21:31] years later. Well, you know, it's it's there
[21:34] was a fascinating interview this past week between Matt Harper
[21:37] and Bill Gates. Where Gates, you know, has
[21:41] commented on even the global emergence of, of vaccine
[21:45] hesitancy and the implications of that on, you know, broader
[21:50] aspects of global public health. So, yeah, this, this stuff, this
[21:55] stuff has ripple effects that are profound and, and, and
[21:59] absolutely, absolutely, you know, contradictory to ensuring
[22:03] a healthy society, you know, definitely far from Maha, I
[22:07] would say. So it is, it is unfortunate.
[22:11] And you know, Paul, what you're recounting there is really
[22:14] telling about a broader sentiment that that that's
[22:18] emerging and, and getting a lot of traction and not just here in
[22:22] the country, but, you know, globally.
[22:24] It is. It is a point of concern.
[22:28] Yeah, love the personal anecdote, Paul.
[22:31] Thank you for sharing. I mean, I guess just one added
[22:34] comment for me is, is just the stark irony here how you know
[22:40] how we could change so much and in five years.
[22:43] There was a press report out this week saying that Donald
[22:47] Trump had been nominated, I think by Cambodia for a Nobel
[22:51] Peace Prize. And and the basis, believe it or
[22:54] not, of that nomination was Operation Warp Speed and the
[22:58] terrific job that the Trump won administration had done to bring
[23:02] MN AM RNA vaccines to the world on a record timeline and and
[23:07] distribute them effectively and and really change the course of
[23:12] the pandemic. And I believe that the Trump
[23:15] administration deserves a lot of credit for that.
[23:18] They do. Yet somehow, yeah, somehow we
[23:20] got so wrapped around the axle politically, I guess, you know,
[23:24] politics just came in and and completely took over this
[23:27] debate, which should always have been a scientific debate, and
[23:32] now made it such that, you know, we we've got antagonizing sides
[23:35] on on both sides of the aisle and and it's a battle zone.
[23:39] And the science unfortunately has taken a a huge back seat in
[23:43] all of this. And and I guess that's just a
[23:46] comment of what we're left with was society today.
[23:48] I know another a lot of scientists on this call and a
[23:51] lot of scientists listening in. And we can all just hope that we
[23:54] can get back to a day and age when science gets the lead and
[23:57] and not follow the politics. Well, maybe we need Laura Loomer
[24:02] to intervene here to sort of help educate the subversion of
[24:07] Trump One point O vis A vis Operation Warp speed, because I,
[24:10] you know, I do think I'm joking, but I do think, you know, Trump
[24:15] administration one point O deserves a huge amount of credit
[24:17] with OWS and, and, and a big part of that was mRNA vaccine.
[24:22] So it, it, it, it does seem counter to a step forward that
[24:26] that that was during that that time and that crisis.
[24:31] So it's it's unfortunate. Should we move on and talk about
[24:40] some company news? Maybe I can start with Vertex
[24:44] and then Eric. You can do audios and then if we
[24:46] have time, I can do Praxis too. Does that sound good?
[24:53] Let's do. It OK sure.
[24:55] Can you hear me Yeah. So this week Vertex, there's a
[24:58] broader conversation here too about sort of loved love stocks.
[25:02] And I, I actually want to ask Eric after this, just if you can
[25:05] think about analogs and this in the large cap biotech.
[25:07] But you know, for everyone on the call, I'm sure everyone
[25:09] knows Vertex well, but from an investor perspective, I mean,
[25:12] this has been a a love stock for years now based on just the
[25:15] perceived scarcity value of a company with a 10 billion plus
[25:19] dollar drug franchise and cystic fibrosis that is very high
[25:22] margin with no real imminent competitors.
[25:24] And then separately A pipeline and doing real drug development
[25:28] and, you know, an impressive scientific team and a lot of
[25:30] different shots on goal. And so the most compelling shot
[25:33] and goal there has been their pain portfolio of sodium channel
[25:37] modulators, which, you know, in a dream case could be applicable
[25:40] to a wide array of pain ideologies with no real abuse
[25:43] potential because they work on the transmission of pain and not
[25:46] the physiological or neurological awareness of pain.
[25:49] The set back this week though is as the acute launch or the
[25:52] hospital launch for their drug suicetrazine, not just in the
[25:56] hospital but sort of a hospital outpatient care setting has gone
[25:59] OK. It's gone decently, but it's
[26:01] slow. It's a market they have to
[26:02] build. They had a set back for their
[26:05] next generation pain products, which failed in a trial and was
[26:08] discontinued. And they also had a meeting with
[26:10] the FDA where they were trying to pursue a path in chronic pain
[26:13] to a broad indication for for neuropathic pain.
[26:17] And the FDA basically said the door wasn't open for that on
[26:20] just kind of looking at a couple specific indications and
[26:23] generalizing. And I think the the interesting
[26:26] sort of takeaways here are a few things.
[26:29] One, you know, I actually feel like before the She's earnings,
[26:33] there wasn't really a lot of credit in Vertex's stock for
[26:37] that broad pain dynamic just because one of the studies of
[26:41] that was based on LSR sciatica actually failed, right?
[26:44] So this was a disappointment on the FDA feedback.
[26:47] On the other hand though, the data was never actually that
[26:49] overwhelmingly positive that supported it in the first place
[26:52] and investors knew that. You know, the second piece is
[26:54] that this second generation drug that failed in acute.
[26:58] Again, it's another thing where was there really anything
[27:02] explicit there and investors models not not totally clear,
[27:05] right. I mean, I think the debate
[27:06] around the acute product and pain was less about efficacy and
[27:10] more about just can you build that market.
[27:13] But you know, I feel like this is a scenario of a company that
[27:17] has had this Halo effect and has been remarkably resilient for a
[27:20] number of years where they had this failure in A1 antitrypsin
[27:23] deficiency, stock traded off a lot, really came back again in
[27:26] that scarcity value thesis, failure in pain.
[27:29] Last year in LSR sciatica, the stock went below $400.00, came
[27:33] back to almost a high 4 hundreds.
[27:36] And I think the interesting sort of conversation here is, you
[27:39] know, when and how do these special companies kind of get
[27:42] that Halo effect that buoys the stock removed and what what does
[27:46] it take? I mean, the other nuance here
[27:47] was that they did not raise their revenue guidance for the
[27:51] first time in multiple years and they haven't done that in a
[27:53] second quarter, Paul. So I think there's some concern
[27:56] that maybe the cystic fibrosis business is getting to a more
[27:59] predictable phase. But you know, I've always kind
[28:03] of felt like their evaluation with Vertex and you know,
[28:06] Johome, I'll talk about all my own valuation with all my own to
[28:08] some degree can be more subjective than other big cap
[28:12] companies because it's been one of the unique companies with
[28:16] this sort of feasible blue sky case.
[28:20] And when that kind of went away, I think more firmly on pain.
[28:23] You saw a much bigger reaction in the stock down over 20% than
[28:27] I think almost anyone would have anticipated.
[28:29] And so it's an interesting situation here.
[28:31] There's nothing really imminent to reconcile it, but I'd love to
[28:33] get others perspective either on Vertex or just, you know, how we
[28:37] should kind of think about the implications for for companies
[28:40] and stock sentiment in general. Go ahead, John.
[28:46] Eric, you should, you know. You you start, Eric.
[28:48] No, please go. Yeah, I was just going to say,
[28:51] you know, Vertex is such a great company, but I but, you know, I
[28:54] think there's always a struggle when you know, you, I mean they
[28:58] they propelled obviously so remarkably on CF and and you
[29:04] know, everybody wants to see Act 2.
[29:06] You know, just like with Regeneron, obviously Eylea, but
[29:09] then Dupixent and, and, and even there there's been some pull
[29:12] back on on Regeneron. And so, you know, investors just
[29:16] want to see that act two, act three that, you know, propels
[29:20] and fuels future growth. You know, once you get into
[29:22] these Heidi valuations for these companies, because they're,
[29:26] they're up there because of growth potential.
[29:29] That's true with Al Milam right now.
[29:30] They're, they're, they're should because of, you know, prospects
[29:34] for growth with Ambutra. So it's, but it, it, it does get
[29:38] challenging if you, if you lose one of your, you know, your big,
[29:42] your big winners, potential big winners like, you know, people
[29:46] are faring with the pain franchise.
[29:49] Yeah, I, I don't, I don't have a ton to add here.
[29:53] And Paul, you're much closer to the sentiment and the stock
[29:56] dynamics on Vertex than I am. You know, what's interesting
[30:00] actually is that both the Pain franchise and the CF franchise
[30:04] originated from the same source within Vertex.
[30:06] I think, John, I know you're old enough to remember the
[30:09] acquisition they did back in 2001 of Aurora Biosciences, but
[30:14] but that was where all these ion channels started and what a
[30:18] great acquisition that was. I think it was about a $600
[30:20] million total acquisition. They got, they got the CF
[30:24] franchise and what you're looking for a Halo effect.
[30:27] There's nothing better than ACF franchise.
[30:29] You're just so dominant in this space.
[30:31] It's, it's hard to imagine that there is some more available
[30:35] franchise almost anywhere in biotech these days and it's
[30:39] going to last a little bit longer, right?
[30:40] So the good news is there's no real urgency here, but but
[30:45] certainly they do need another act and pain stuff as much as we
[30:50] need new pain drugs. There's don't seem to be that
[30:53] potent, Paul. I mean, I guess that's my my
[30:55] read from all of this. Yes, we've seen failures before,
[30:58] but just doesn't seem like this mechanism packs the punch needed
[31:03] to really be a a major player. And of course we've seen paint
[31:07] launches before to know that they're very, very slow and and
[31:10] gradual if they ever take off. So maybe, you know, maybe this
[31:14] is a major transition point in Vertex's progress and strategy,
[31:20] and maybe they need to think about something else.
[31:22] I don't know. Well, I think like what's really
[31:25] interesting with how they've worked on pain and you know,
[31:28] even some of the work they've done in other things like AAT,
[31:30] right, is and you can't blame them for this, right?
[31:33] But they've really leverage, in my view, like the cystic
[31:35] fibrosis approach, you know, these, these sort of targeted
[31:39] proof of concept studies, you know, betting on the science,
[31:42] you know, betting on early successes that they're going to
[31:44] continue. And I, I'm biased, right,
[31:47] because I've covered a lot of these small neuro companies and,
[31:50] you know, I've been, you know, on the wrong side of things that
[31:52] have blown up on, on incredible phase two data.
[31:54] I, I just feel like you can't do that in, in neurology, you know,
[31:59] if it were up to me, and caveat being I've, I've never the drug
[32:02] or got a drug approved. If I was, if I was running that
[32:05] program, there'd be 5 phase two studies ongoing right now across
[32:08] a whole array of different pain ideologies and migraine.
[32:11] And any indication that was advanced to phase three would
[32:14] have three studies only when we need 2.
[32:16] Because I think that's just like the way you have to do things in
[32:18] neuroscience. I mean, Prozac's the, the poster
[32:21] child, right? One of the top selling
[32:22] antidepressants haven't failed in more trials than it worked
[32:24] in. And I don't think pain is any
[32:26] different. And so I do wonder if part of
[32:28] the set back was that, you know, Vertex is, you know, they
[32:33] deserve all the credit in the world through their innovation
[32:34] engine. But it feels like the CF
[32:36] philosophy was applied to a disease area where you just
[32:40] can't do that. Like the endpoints are not are
[32:42] really, really tough. There's no biomarkers.
[32:45] Patients are heterogeneous. And so, yeah.
[32:47] And I mean, now they're back to the drawing board.
[32:49] They're in phase three and DPN. But it feels like the program
[32:53] itself could be revamped. John, we can't leave this topic
[32:56] of valuable franchises without having you take a little bit of
[32:59] a victory lap on Elm Island and Ambutra.
[33:03] So go ahead, I'll I'll tee you up for you.
[33:05] Yeah, I couldn't, I couldn't be there last week when, you know,
[33:08] last, last hang out last Friday, which would have been more
[33:12] pertinent from a timing standpoint.
[33:13] But you know, it's just wonderful to see how Nylum
[33:18] report the second quarter results and Ambutra is on a RIP.
[33:22] I mean, it's just, it's looking fantastic and it's just at the
[33:25] beginning. So I, I'm super proud of the
[33:27] team there and you know, what they, what they're doing and,
[33:30] and, and where they're going. I have a tradition of, of, of
[33:34] opening up a nice bottle of champagne for every $50 Almailum
[33:37] share price. And I, I managed to, to cover 2
[33:41] bottles last week. So, you know, I'm still still
[33:43] dragging a little bit this week as a result of it, but it's,
[33:46] it's a real credit to the team over there and, and and so
[33:49] forth. Like, you know, look, I think
[33:51] the, the interesting thing, it gets back to the vertex story
[33:54] and, and, and, and Regeneron as well.
[33:56] You know what companies, you know, constant threshold value,
[34:02] you know, it, it really is driven by, you know, a mega
[34:05] product or franchise opportunity, CF by the Dupixent,
[34:10] etcetera. And then you know the really for
[34:13] Almailum to get to the, you know, the next horizon of 100
[34:17] billion, which I expected will, you know, it'll require
[34:21] continued growth on Ambutra and then probably one other or two
[34:25] other major assets in the portfolio.
[34:27] Good news is, is, and the interesting thing for all these
[34:31] companies, you know, Vertex maybe less so, but certainly for
[34:34] Regeneron and Al Nilam. I mean, these are companies that
[34:37] are sporting, you know, their own innovation organically.
[34:41] They're they're largely doing it on their own as opposed to
[34:44] getting it from the outside. Not that there's anything wrong
[34:47] with that, but it's an interesting feature of what
[34:51] these companies have done over the years.
[34:53] Which John. Yeah.
[34:56] I would love to ask you a quick question.
[34:57] Someone covering on Mylan now who who misses you as the CEO,
[35:00] Even though I, I, I love the current team too.
[35:04] So the quarter was, you know, unbelievable, right?
[35:07] I mean, it blew out the cell side consensus number.
[35:10] Maybe that wasn't a real number, but you know, some people were
[35:12] pointing to Aqvia data that pointed to 420 million.
[35:15] It was, it was so much more than that.
[35:18] You know, if you're in, if you're in, if you're running a
[35:20] mile in that situation, how do you balance, you know, conveying
[35:24] confidence going forward that this is not a one off full list
[35:29] of patients, but also you don't want the numbers and the
[35:32] expectations to get out of hand. You know, I just thought it was
[35:37] interesting, like the team, like the team sounds, they sound so
[35:42] confident and they should be confident.
[35:43] But you know, would you be if you were the still looking at
[35:48] the stock and thinking, I got to make sure this doesn't get out
[35:51] of hand and we don't set up for some arbitrary disappointment in
[35:54] two quarters when we beat consensus by 50 million, but we
[35:58] had to beat it by 90. Like, do you think that way when
[36:00] you're in that seat? You do I mean you, you, you
[36:04] definitely try to dampen enthusiasm, you know, I mean, if
[36:09] you if you have a blow away quarter result and you know, and
[36:13] they certainly. John, I think you muted
[36:23] yourself. Brig Hello.
[36:30] Hey, I'm back. Can you hear me now?
[36:33] Can you hear me now? Jesus Christ.
[36:37] Yes, we can hear you, John. John, we can hear you.
[36:39] All right, Good. Sorry.
[36:41] Yeah. What I was saying is, you know,
[36:43] you don't, you know, I, I mean, I, I, I think the, the, the, the
[36:48] important thing to do here is not to let expectations get too
[36:51] far ahead and start creating new sets of estimates that are, that
[36:55] are not going to be met. I, you know, I, I think Al Nylum
[36:59] is super savvy about that. Jeff Poulton, CFO, you know, you
[37:03] know, Paul is really, really careful and as is a bond.
[37:08] And so I, I, I'm sure that I'm sure that they'll do a good job,
[37:13] you know, managing this trajectory.
[37:16] You know, it's, it's, it's a, it's a great, wonderful event
[37:19] when you, when you have a blow 1/4, but you definitely want to
[37:22] make sure that it's sustainable. And, and, and you know,
[37:25] obviously they have a line of sight on, you know, already
[37:28] quite a bit of Q3 performance. So I'm sure they, I'm sure they
[37:31] have a good sense of where this is going.
[37:35] Makes sense. Eric, do you want to talk about
[37:40] Agios at all? Yeah, we we could do that or
[37:45] well, why don't we do it quickly.
[37:46] I don't know if you guys have been following the the news
[37:49] earlier in the week. The stock was very volatile on
[37:53] on Monday. In fact at one point it was down
[37:55] over 20%. This on the heels of a sell side
[37:59] report that called out potential link in in the fair safety
[38:05] database that the FDA maintains. This gets updated on a quarterly
[38:08] basis and and in fairs. There were four patient reports
[38:12] of potential deaths linked to pyrokine pyrokines approved for
[38:17] a small niche indication PK deficiency and some development,
[38:21] of course, for sickle cell disease and multiple patient
[38:26] deaths reported in PKD and and one death and in sickle cell.
[38:30] And news of that report from Southside analyst again, just
[38:34] just hammered the the shares really caught, I think the
[38:37] company off guard and scrambled to kind of find a response to
[38:41] this. And you know, fortunately their,
[38:44] their response was, was, was very, I would say accurate in
[38:51] terms of trying to dispel the, the myth or the link between the
[38:56] fairs deaths and, and their drug specifically.
[39:00] There weren't really 4 deaths. There were only three.
[39:02] And, and all of those 3 deaths said seemingly no relation to
[39:07] the product itself. And in each case there was not
[39:12] thought to be a link between use of the product and, and the desk
[39:15] or CF patients have high mortality anyway.
[39:18] And the PKD patients who died were very elderly or had
[39:22] underlying cancers to do it. So, you know, this became a fire
[39:28] drill. Unfortunately, it was a pretty
[39:30] nasty fire drill. And maybe the the lesson here,
[39:34] the worst part of all of this was that the company wasn't only
[39:36] caught flat footed with investors.
[39:39] We're big guys. We can stomach a day or two
[39:41] volatility. But I think it's certainly
[39:43] possible that this news leaked beyond the investment community
[39:47] into the patient community where I know the company was aiming to
[39:52] be very diligent in its ability to address it's most important
[39:58] constituents. Those patients who have PKD in
[40:00] those patients who have sickle cell would have been terrible if
[40:03] something like this had persuaded patients to come off
[40:06] their drug prematurely or or to be skeptical of of product in
[40:11] the future. And I think sometimes the
[40:13] investment community doesn't think as much about the broader
[40:17] implications of what we might be writing.
[40:20] Paul, you're a Southside analyst.
[40:21] I. I don't know if you might have
[40:23] handled this differently. I suspect you you would have.
[40:26] But I think it's probably on all of us to, to think a little bit
[40:31] more carefully before we we come up with conspiracy theories and,
[40:35] and make sure that we kick the tires pretty hard on anything
[40:39] like this or this nature that could be potentially so
[40:42] incendiary and potentially harmful to our, our, our
[40:45] greatest asset, which is the patients who have these
[40:48] conditions. Paul, can you hear me?
[41:08] I don't. I can hear you, Eric.
[41:10] I don't know why. Can you hear me?
[41:14] Yeah, we can hear you. I can't now hear Paul.
[41:16] John, I'm not sure you you were wrapped up in in the fire drill
[41:19] that was audios. But again, it's nice to see the
[41:22] stock stock recover and and hopefully they will obtain the
[41:25] broader issue too. Yeah, no, I, I have been
[41:28] following it. I used to be on the board and
[41:30] I'm glad. I'm glad things recovered as
[41:32] they did. So maybe you're I hope Paul's
[41:38] able to to join. We can't hear you still, Paul, I
[41:40] see you're off speaker. But John, I, I know a company
[41:43] that you and I have followed for a number of years decades now
[41:49] was also in the news in in Biogen.
[41:51] They put out a a release this week saying that they're going
[41:55] to start up a new venture arm, not necessarily for a straight
[41:58] return on investment, but but maybe more for corporate
[42:02] purposes to get a little bit of a look under the hood.
[42:05] Maybe you want to walk our listeners through that and your
[42:07] thoughts. I don't.
[42:10] I didn't. I saw the news briefly, so I
[42:12] didn't go through all the details.
[42:13] So maybe you can have some of the details.
[42:16] Do you want to start there? And then I can.
[42:17] I certainly can. Yeah.
[42:18] I mean, I, I, I don't, yeah, I, I think that the details were,
[42:22] you know, fairly plain vanilla. Yeah.
[42:24] I think what we've seen from Biogen is a greater interest in,
[42:28] in resourcing external innovation versus internal
[42:31] innovation. I know you can comment on that,
[42:33] but in terms of the the Venture Group itself, they've been
[42:36] looking for assets from an in licensing standpoint, from the
[42:39] BD standpoint now for, you know, sometime under Chris V Boxer's
[42:43] leadership, that was I think a meaningful change over the last
[42:46] three or four years. But this venture arm now will
[42:49] begin to invest in, in earlier stage companies and and assets
[42:55] and again do so with an eye toward corporate priorities as
[42:58] opposed to return on capital priorities.
[43:01] I think really trying to align itself with Biogen's remaining
[43:05] internal drug discovery engine to try and get involved in an
[43:09] early stage and and programs and products that the Biogen folks
[43:12] think are are are valuable. Yeah, Yeah, that's great.
[43:16] No, I thought, look, it's consistent with what I, I saw
[43:19] briefly too, Eric. I mean, I, I think Biogen is, is
[43:24] really going through a transformation.
[43:25] Chris has been leading it now for, you know, about a couple
[43:28] years and obviously, you know, had a lot of has a lot of things
[43:32] to turn around for sure, because he was left a bit of, a bit of a
[43:37] redo remake in many ways. It's it's such a great company.
[43:41] I used to work there for a decade back in the 80s and 90s.
[43:45] So it, it, it's got a really, really warm place in my heart.
[43:49] And, and Chris and, and his research chief, Jane Grogan,
[43:52] who, you know, are, is a terrific scientist, terrific
[43:55] leader. I mean, they got a lot of work
[43:57] to do. They know that.
[43:58] And they've been doing some collaborations with, with
[44:02] companies. I mean, they, they partnered
[44:03] with City Therapeutics where I'm the exec chair and it was really
[44:07] great to get them involved with that effort.
[44:09] They've been broadening out their effort beyond neurology to
[44:12] include immunology, which I think is smart.
[44:15] I think they, you know, probably, you know, historically
[44:18] they over indexed on the neuro space.
[44:21] Paul would be able to comment on that himself, but they over
[44:24] indexed in that space and made it more challenging for them to
[44:27] really grow as a business. But now they're going broader.
[44:31] So I, I've got, and also rare disease.
[44:34] They're they're interested in in augmenting their rare disease
[44:36] presence. So I think the venture side of
[44:39] it is, is a good move for them. You know, Chris is Chris.
[44:43] Chris really gets the importance of of, you know, new companies
[44:47] and the innovation ecosystem. I mean, he doesn't, he
[44:49] understands why, you know, larger companies can't succeed
[44:53] on on some things that smaller companies can do.
[44:55] So this I'm sure, is a nod to his own, you know, deep felt
[44:59] belief in all that. And he successfully did that at
[45:05] Santa Fe with, you know, the venture investments they did
[45:07] there, including some ones like work drive as well.
[45:12] And not everything's always going to work out, but some of
[45:14] them will. So I, I think it's a, it's not a
[45:17] surprise that, that, that a new venture fund has been created
[45:20] under under Chris's leadership. And but I'm looking forward to
[45:24] seeing how they can contribute to, to the, you know, ecosystem
[45:29] here and maybe help support some new cutting edge companies in a
[45:33] very, very tough private market environment out there as well.
[45:37] So that's all good. Paul, you you able to join us?
[45:42] Rejoin us? I'm not sure we can hear you
[45:48] still. And John, just coming back to
[45:51] your comment, how you know Chris inherited a a a little bit of a,
[45:56] an organization and Yep. All good.
[45:59] You know I don't. This room is like something's
[46:02] wrong with it today because my friends totally fine, man.
[46:04] And I just had to leave and rejoin.
[46:06] I mean, Biogen, like, I think yeah.
[46:09] So I I, I agree with everything you guys said.
[46:11] I mean, I feel like Biogen is like one of your things you sent
[46:14] around Eric is like, how do they get here?
[46:16] It feels like it was like a combination of, you know,
[46:19] strategy and capital allocation years ago and bad luck.
[46:22] And I say bad luck because, you know, I must have like sat on, I
[46:28] don't know, 75 dot calls on Alzheimer's in the past 10
[46:31] years. More like there were one off
[46:34] physicians who said the A beta antibodies would get narrow use.
[46:37] Everyone else was saying, Oh my God, if we had something for
[46:40] these patients, they'd be used more broadly.
[46:41] So I just feel like, you know, I can understand why they
[46:44] allocated billions of capital of those projects.
[46:47] Like the commercial upside always surveyed like it was
[46:49] there and I don't think anyone anticipated how hard it would
[46:52] be. Maybe they should have.
[46:52] But like, I feel like it's not fair to say in hindsight that
[46:55] this was obvious that these drugs would be niche, right?
[46:58] I understand the benefit is not huge, but you know, like no one
[47:01] really thought you needed a huge benefit to have a big drug in,
[47:04] in Alzheimer's. And then, you know, like I, I
[47:05] think under the prior board, right, there was maybe a
[47:08] different view of just valuation and M&A and they were a lot more
[47:13] conservative and they watched a lot of good neuroscience stuff
[47:16] get a lot more expensive over the years, like companies like
[47:18] Neurocrine and Acadia and the muscarinic companies.
[47:22] And so I think, I mean, I, I, I like Chris, like I think he's
[47:26] done a nice job. I think, you know, like people,
[47:29] people, a lot of investors, I think fixate on like a deal,
[47:32] right, like the Riata deal, like was that an overpay or not?
[47:35] But you know, it feels like he's doing the right things, trying
[47:37] to diversify the, the therapeutic area mix and and I
[47:42] think he has a keen understanding on what they lack
[47:44] and what they need. Yeah.
[47:48] I'd be curious, John, just, you know, again, having watched this
[47:50] company over decades now and having spent time there yourself
[47:54] when it was such a scientific powerhouse, I guess Biogen is
[47:58] one of the companies that failed to innovate beyond it's, it's
[48:01] very robust and very successful Ms. first generation franchise
[48:06] and never, never developed that second act.
[48:08] Do you think it's luck or bad luck?
[48:11] Or do you think maybe something went wrong along the way?
[48:14] Well, I think it, I, I, I look, I think, I think the, you know,
[48:19] historically the company has been challenged with deal
[48:23] making. And I think that, you know, Ms.
[48:27] was amazing and they, and they hit it out of the park and, and
[48:30] obviously built the company, you know, with Ms. But, you know,
[48:34] there's just, you know, going about all the way back to Jim
[48:36] Vincent, Eric, you know, there's just a, a, a, a very, a very
[48:41] high level of reluctance to, to do, you know, deals in general,
[48:46] very conservative approach. You know, I had dinner with Adam
[48:49] Koppel earlier this week. We used to run corporate
[48:52] development at Baijin and, and Adam was, was joking about, or I
[48:57] was actually teasing him about neurocrine and that unfortunate
[49:02] deal that could have been a good deal for them to never, never
[49:04] materialized. And, you know, a lot of it's,
[49:07] you know, related to the sort of historical board at that budget,
[49:11] which, you know, Chris is changing.
[49:12] Chris has been changing. So, you know, look, I, I think
[49:16] Chris is going to right the ship.
[49:18] It's going to take some time. It's just going to take some
[49:20] time. It's super tough when you've got
[49:22] a, you know, basis of, you know, billions of, of revenues that
[49:25] are growing and you got to, you know, re reinvigorate reignite
[49:29] growth in that it it it's going to take a few years or, you
[49:33] know, hopefully not a few years, but it's going to take more than
[49:36] the the the time that he's been there so far.
[49:39] But I'm optimistic that they'll that they'll be a path forward
[49:41] for them. Hey, can I chime in real quick
[49:44] because I want to hear Eric's perspective on something and
[49:47] then John, like it would be a lost opportunity out of your
[49:50] perspective, this report from the Financial Times on avidity
[49:54] and avidity might be in play. I mean, Eric, I covered dine,
[49:58] you cover avidity. I mean, I think you probably
[50:00] agree with me that these transparent oligo conjugates are
[50:03] one of the more interesting innovative areas and small
[50:06] biotech with, you know, a few indications that are big white
[50:08] space. I was curious though, are you
[50:11] surprised by the timing because you know, FSHD their date is
[50:14] great, right? But there's still some questions
[50:16] around, I think the phase three design and some of the
[50:18] regulatory dynamics and, and and in DM one.
[50:20] I mean, I think, you know, DM one like is not without for
[50:23] either company, some level of clinical and regulatory risk.
[50:26] So doesn't surprise me at all that these companies would be in
[50:29] play. They seem prime take out targets
[50:32] at some point in their life cycle.
[50:33] But it was earlier than I thought.
[50:36] Yeah, I, I mean, I think, oh, go ahead, John.
[50:39] Yeah. You're the RNAI guy, no?
[50:42] No, no, sure. Yeah, no, I mean, look, I think,
[50:44] I think Novartis has got a let me just maybe provide some
[50:47] context there. I mean Novartis is on a tear
[50:50] with RNAI, right. They made, they made the the
[50:53] MECO acquisition back 9.7 billion in in 2019.
[50:57] They they or 18 they, you know, DTX was bought a couple years
[51:03] ago. You know, they've done some
[51:05] deals out of China in Rai, you know, they bought, they bought
[51:10] Regulus. So they're, they're, they're big
[51:15] believers in the space. And I, it wouldn't surprise me
[51:17] that Vaz, you know, now it's a rumor.
[51:20] So we don't know for sure, but it wouldn't surprise me if Oz
[51:23] saw this as something he wanted to grab a head of news that
[51:26] might make it a lot more expensive.
[51:28] And it's certainly a good way for, you know, the avidity
[51:30] shareholders and board, you know, balance the the risk
[51:33] reward here in terms of, you know, the readouts that they've
[51:36] got coming forward. But Eric, what do you think?
[51:39] Well, I'd like you, John. I, I guess I don't know what to
[51:42] think in terms of this, some stand ability of these rumors,
[51:45] but what honestly, I, I hope they're not true.
[51:49] And, and the reason I do is I, I'm a huge believer maybe like
[51:52] Paul and the, the power of this platform, the ability to deliver
[51:56] RNIRNAI to muscle and, and not just skeletal muscle as we're,
[52:00] we're seeing potentially transform these diseases in real
[52:03] time, FSHDDMDD M1, but also protect potentially smooth
[52:08] muscle, cardiac muscle as well. So you know, Paul, I think like
[52:11] you, we, we do share the view that dying and avidity could,
[52:15] could grow up to be the next island Island or the next vertex
[52:20] really, really important company in our space, right.
[52:23] And, and if there is a deal to be had, boy, I hope it's a huge
[52:26] premium because I think there's a lot of value in these
[52:29] businesses. Yeah, there's like this.
[52:32] Yeah. I mean, there's just very few
[52:35] when you look at FSHDD M1 and you know, DMD still pretty open
[52:39] too. I mean, there's just not that
[52:40] many rare disease markets like that, that are just white space
[52:45] like I there's just not that many, right?
[52:46] That could actually really move the needle for a company like
[52:49] Novartis. So be super interesting to see
[52:51] what should play out.

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