336: Pharma's big patent cliff, more obesity fundraising, and a failed ALS study
Jan 9, 2025
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The podcast delves into how pharmaceutical companies are grappling with a looming patent cliff, impacting their strategies and investments. It discusses new FDA guidance on obesity drug development, raising concerns for certain companies. A failed ALS study from Google's Calico adds intrigue to the conversation. The rise of obesity startups, especially after significant funding rounds, is also highlighted. Personal resolutions and the challenges of bio innovation wrap up the engaging dialogue.
33:21
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Quick takeaways
The FDA's new guidelines on obesity drug development prioritize overall weight loss, impacting companies focused on maintaining muscle mass during weight loss.
Pharmaceutical companies are increasingly shifting towards mergers and acquisitions and licensing agreements with Chinese firms to navigate impending patent cliffs and reduce development costs.
Deep dives
Impact of FDA Guidance on Obesity Drug Development
The recent FDA guidance for obesity drug development has raised concerns among biotech companies. It emphasizes overall percentage weight loss as the primary endpoint, rather than considering the breakdown between fat mass and lean mass loss. This stance has disappointed some companies that focus on preserving muscle during weight loss. Additionally, Viking Therapeutics, a key player in obesity treatments, may face delays to its timelines due to the FDA's longer phase two trial requirements, complicating its advancement to phase three and challenging its market position.
Emergence of Well-Funded Obesity Startups
A significant trend in biotech is the emergence of new startups focusing on obesity treatments, such as Verdeva, which raised $411 million in a Series A round. This company aims to develop a once-weekly oral treatment and has sourced compounds from a Chinese firm, reflecting a growing pattern of licensing drugs from international sources. The influx of capital into these startups highlights a robust interest in addressing obesity, a sector that gained momentum over the past year and maintains investor attention. However, this trend raises questions about American innovation and reliance on foreign assets for drug development.
Shifting Dynamics in Pharma Licensing and M&A Activity
As the pharmaceutical industry faces significant patent cliffs, notably with Merck’s Keytruda expected to lose $47 billion in revenue starting in 2028, companies are increasingly looking towards mergers and acquisitions. The overall mood heading into the JPMorgan Healthcare Conference is optimistic, but deal-making activity has been subdued compared to previous years. Firms are shifting their strategies by engaging more in licensing agreements, particularly with Chinese companies, which are supplying a growing share of new molecules. This strategy indicates a potentially transformative approach to sourcing drugs, emphasizing cost-effectiveness and rapid development capabilities.
We chat about how pharmaceutical companies are navigating a looming patent cliff. We also talk about yet another obesity startup and a failed study from Google’s secretive anti-aging company Calico.
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