Travel restrictions could stall deal flow, fundraising and more as COVID-19 outbreak progresses
The inability to hold face-to-face meetings as the coronavirus crisis deepens globally will have broad impacts across the biopharma industry on everything from dealmaking and fundraising to regulatory progress.
For Apollomics Inc., a cancer company split between sites in Hangzhou and the Bay Area, most of the disruptions it’s encountered have been felt on its China side, but that could all change as the virus takes root in new regions.
According to CEO Guo-Liang Yu, face-to-face meetings are crucial for meeting with other companies, regulators and investors, and travel restrictions are making that difficult.
For Apollomics, those restrictions could impact its fundraising timelines.
“Our initial plan was to do a pre-IPO round in the first half of the year, then try to engage activities with an IPO, but I think that’s all somewhat slowed down. We’ll probably have a better idea of the impact by year-end,” he said.
The company is still moving forward with the pre-IPO round and has banks selected, but Yu isn’t sure how the roadshows will look with limited face-to-face interaction.
He told BioCentury he planned to engage bankers and investors on a trip back to China, but flights are currently pushed back until at least late April, and “nobody in Hong Kong is welcoming face-to-face meetings.”
The other problem is the market shift resulting from the crisis.
“There’s a reason we do roadshows. Even just meeting people for one hour face-to-face is critical for attracting investors, and that’s especially true as investors are becoming more cautious given the market uncertainty,” said Yu.
Apollomics is in a strong cash position and Yu isn’t too concerned with the delays, but noted that it could be a problem for other companies.
He expects deal flow, which greatly benefits from the same face-to-face interactions for creating personal relationships and conducting due diligence, will also be slowed.
Disruptions to clinical trial schedules and supply chains -- not just in China -- are also shifting project prioritization.
While plenty of companies have reported supply chain problems linked to China, Apollomics encountered a disruption in Italy, which was more recently hit by the virus.
“We have the raw materials for one product made in China, and we were going to ship those to Italy to finish it into a drug product to conduct trials globally, but we have postponed that activity due to the coronavirus there. We’ve adjusted our plans to make this particular project a lower priority,” he said.
The company isn’t disclosing which project was impacted, but it has a pipeline of four small molecules and antibodies in the clinic, and several others in preclinical development. Its most advanced are APL-501, an anti-PD-1 mAb in Phase II, and APL-101, an oral c-Met inhibitor in Phase I/II trials.
“Anything we can do at home, we’re doing. We’re using this as an opportunity to conduct more online training such as business and scientific seminars,” said Yu. But, there isn’t much that can be done to make up for the lost in-person meetings beyond waiting it out.
"The effects are on our interactions with other companies, regulatory agencies, banks and other service providers. Everything has slowed down, and we don’t know how long this will last,” he said.
Further analysis of the coronavirus crisis can be found at https://www.biocentury.com/coronavirus. The COVID-19 content is free to all who visit the site.