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Politics, Policy & Law

FDA’s credibility on the line, plus biotech’s venture wave and a Back to School preview: a BioCentury podcast

Sep 1, 2020 | 1:54 AM GMT

With FDA’s independence in question, how the agency handles emergency use authorization of COVID-19 vaccines is becoming ever-more pressing. On the latest edition of the BioCentury This Week podcast, BioCentury’s Editors discuss the implications of granting an EUA based on Phase II data. They also check in on the state of venture financing for biotech, including the role of crossover investors and the evolving landscape in Europe, and preview BioCentury’s annual Back to School issue.

This year, BioCentury’s Back to School will address biopharma’s once-in-a-generation opportunity to reboot how drug development is done. Editor in Chief Simone Fishburn previews the week-long multimedia event, which will begin Monday Sept. 7 with essays and data analyses produced daily, as well as audio interviews with industry leaders such as Vas Narasimhan of Novartis AG (NYSE:NVS; SIX:NOVN), U.K. Vaccine Taskforce Chair Kate Bingham and former FDA Commissioner Mark McClellan, who is director of the Duke-Margolis Center for Health Policy.

Also on this week’s podcast, Washington Editor Steve Usdin argues that FDA Commissioner Stephen Hahn’s failure to maintain “social distance” from President Donald Trump is imperiling the ability of the U.S. — and other countries that are looking to the U.S. for leadership — to respond to COVID-19. He addresses the issue in detail, including how the FDA should approach the EUA process for vaccines, in an Editor’s Commentary posted Monday (see “FDA Should Maintain ‘Social Distance’ from the White House”).

Biopharma companies have raised more than $21 billion across at least 450 venture rounds so far this year, outpacing 2019’s venture raise over the same period. Associate Editor Virginia Li says that’s been driven in part by large mezzanine rounds supported by crossover investors with an appetite for life sciences IPOs.

Li, Executive Editor Jeff Cranmer and Fishburn discuss the evolving venture ecosystem in continental Europe, where VC firms focused on investing in European companies, such as Andera Partners, Gilde Healthcare Partners and LSP, have been raising record funds. Li spoke with Andera’s Olivier Litzka in early August (see “Andera Looks to Deploy Record €450M Fund”)

A transcript of the episode follows.

[00:00:00] Jeff Cranmer: Can the American people trust FDA's leadership to decide on an emergency use authorization for COVID-19 vaccines based on an independent assessment of the data untainted by political considerations?

[00:00:14] Welcome to BioCentury This Week. I'm Jeff Cranmer, Executive Editor of BioCentury and I'm joined by…

[00:00:21] Simone Fishburn: Simone Fishburne, Editor in Chief,

[00:00:24] Steve Usdin: Steve Usdin, Washington Editor,

[00:00:26] Virginia Li: Virginia Li, Associate Editor,

[00:00:28] Jeff Cranmer: We've got a great podcast for you this week. We will be discussing FDA's leadership during the pandemic, as well as the state of venture financing, but first we're going to let you know what's coming up next week for BioCentury. We'll be kicking off our 28th annual Back to School issue. This year we're doing something a little bit different, we're delivering back to school as a week long multimedia event beginning next Monday, September 7th, with essays and data charts produced daily and complimented with exclusive audio interviews with select industry leaders. Simone, what will Back to School address this year?

[00:01:09] Simone Fishburn: What we're doing this year, as we do every year is use Back to School our essay as BioCentury's message to the industry. And I think it's really pretty clear that the industry is at an inflection point in some ways, so what we've seen in COVID-19 is just this tremendous energy, and pace of drug development forced by circumstance. And obviously we hope we're not in a pandemic again, but there are lessons and we feel that there can't really be a return to the 13 plus years it takes to make a drug, or a therapy, or a vaccine… One of the things that have been done during COVID-19 by drug developers that could really get entrenched and embedded in drug development going forward and we really pick this apart to come up with some specific recommendations.

[00:02:01] Jeff, you talked about multimedia, we're doing it slightly differently this year and I'm really excited about the podcast interviews we've got. We've been interviewing leaders across the industry. So we have CEOs from several of the major pharmaceutical companies, Vas Narasimhan the CEO of Novartis. We have Mark McLellan from Duke-Margolis and a former FDA commissioner of course. Kate Bingham who's leading the UK Vaccine Task Force. And Martin Landray, I think is a really interesting one. Martin Landray, is an Oxford professor, who is of course, one of the two people who has stood up the recovery trial -- the master protocol that's really been gathering a lot of interest in a lot of commendations from across the industry. One of the questions is what can we learn from that?

[00:02:49] Jeff Cranmer: I've heard you guys talking, obviously, about these interviews and I'm really excited to be able to listen to them all once we finished wrapping them up.

[00:02:56] Steve Usdin: I have to jump in basically and also say that for people listening at home, we are aware of the irony of calling it Back to School this year, because many of our kids are not going back to school. They're staying right in their bedrooms and they'll be on zoom. I think it's fitting that we did a lot of our Back to School coverage this year as podcast interviews, that's the way everybody's going back to school.

[00:03:19] Simone Fishburn: Right. It's all by zoom, absolutely right.

[00:03:22] Jeff Cranmer: I want to jump right into what's been going on with FDA Steve, what should people think about suggestions that FDA could grant an EUA for a vaccine based on Phase II data?

[00:03:36] Steve Usdin: So EUA is an Emergency Use Authorization. I think that the problem is more fundamental than whether the FDA should grant an EUA based on Phase II data. It's really whether, as you said in the introduction, whether people trust the FDA to make a decision that's based on the public health interests of the American people, and really the people of the whole world, or if their decision is going to be tainted by the political factors. I think that the commissioner Stephen Hahn has lost credibility with the American people. He's not trusted and he's not going to be able to get that trust back. The only way that a decision can be credible and believable, is if it comes from career FDA staff, and if it's vetted publicly and endorsed by outside experts, like the Vaccines and Related Biological Products Advisory Committee, that's going to publicly meet on October 22.

[00:04:34] Simone Fishburn: Steve, I think the credibility thing is really important and what does it mean for drug developers and drug developers who are making vaccines? How are they supposed to think about navigating with FDA, they interact mostly with staffers.

[00:04:51] Steve Usdin: I think that Hahn, by so closely embracing President Trump and by actively engaging in what I perceived to be partisan political activities, has really created a difficult position and it's not one that drug companies can directly do anything about it. I think that they have to continue to do things best that they can to try to put the public interest first and foremost, which I think the companies have been doing in this crisis, and that the only path forward is going to be through public transparency and by scientific consensus around the decision making that FDA has made. It can't simply be left to Stephen Hahn to make a decision and announce it at the White House, and say trust me, I did what was right for the American people, because many of the American people don't trust him. And the consequences of having an approval that many American people and many people around the world don't believe was scientifically justified are really horrendous, it's something that we shouldn't have to contemplate.

[00:06:00] Jeff Cranmer: Alright, this is going to be one to watch for sure, thanks for that update Steve. Last week was another busy week for biotech venture financing.

[00:06:08] Crossover investors poured into two series C rounds by cancer companies. We had precision cancer company Qiming raise a $98 million series C round led by RA Capital. And we also saw blood-based cancer company Freenome close it series C at $270 million, Bain Capital and Perceptive Advisors led that round.

[00:06:35] Virginia, thanks for joining us this week to talk financing. What trends are you seeing in venture financing for biotech so far this year?

[00:06:43] Virginia Li: It's been a really busy year and despite some concerns early in the pandemic that venture fundraising might slow down, we've actually seen the opposite. So far this year biopharma companies have raised more than $21 billion across 450 venture rounds, versus about $18 billion raised in the first three quarters of 2019. And a lot of these later stage crossover heavy rounds are really driven by investors riding the wave of interest in healthcare IPOs. So Kinnate and Freenome are just two examples from the several that we've seen this year. We've also seen venture firms themselves raising large funds. Back in the spring, we had ARCH and Flagship raise more than $1 billion each for new investment vehicles, and those are primarily focused on new company creation. But we've also seen several European funds raising more than ever before. Andera Partners announced plans earlier this month to close a €450 million round by next year. And we saw LSP and Gilde Healthcare Partners both close on funds exceeding $400 million, that would have been unheard of in Europe just a few years ago. There's really no shortage of funding out there for private biopharmas and that really goes for both early and late stage companies.

[00:07:58] Jeff Cranmer: And that would be Andera's largest ever fund. I recall when you spoke with the firms Olivier Litzka early this month, Virginia and he gave you a really good quote -- he said, "now there's a good amount of money available to do what is necessary under good conditions, not trip feeding, not always doing it the cheap way, but doing it the right way".

[00:08:20] And speaking of big funds, we can't forget about China's Qiming, which raised a $1.1 billion fund, which the firm unveiled in April. Led by Nisa Leung on the life sciences side, the firm has seen six of its portfolio companies list so far this year, most recently Cansino that's the COVID-19 vaccine maker. It raised $750 million in a follow on offering on Shanghai's Star Market, it's already listed in Hong Kong.

[00:08:55] Simone Fishburn: Can I just go back to the European one? I think that's interesting because one of the things that has really characterized European venture over the last, I don't know, decade plus, is that they usually have lower rounds. Right, and they've been more prone to what we've used the term drip feeding, rather than the big rounds that occurs in the US.

[00:09:14] I just wonder whether these new funds and this new environment, do you think is going to change that? Are they saying that they're going to change the amount that they put into their venture rounds?

[00:09:24] Virginia Li: What I've heard so far is that it's not going to significantly change how much individual companies are raising, rather it's going to be spread out to more new companies. There's a lot of really great early stage science happening across Europe and they're looking at creating more new companies out of that bigger pile of money.

[00:09:43] Simone Fishburn: That's actually really cool, one question I don't know if you can answer… another problem that Europe has had is that they don't have the growth capital, they've always needed to go to the US Market to raise the kind of money they need to get to Phase II or Phase III. That's been a challenge, we do have a couple of companies like Genmab that are really bellwether big companies there. Do you think that environment might change?

[00:10:09] Virginia Li: I know that Forbion actually raised a fund earlier this year, that's specifically focused on maturing biotechs, and growth opportunities, and I think we saw a couple examples of that in prior years. I'am expecting to see more of those funds come up in the near future.

[00:10:26] Simone Fishburn: Actually, that's one of the ways in which this zoom environment might make a difference. One of the reasons VCs always say that they want to move companies is so that they're around the corner, they can go visit them and there's this sort of very much based on a geographical presence. And so as we all move to this sort of world where you could live anywhere and do your job, I wonder whether that's going to make it easier to have companies spread all over the place.

[00:10:48] Jeff Cranmer: Perhaps it will finally give Steve and I our opening to open BioCentury is Phuket office.

[00:10:56] Steve Usdin: We're halfway there, you know it's happening.

[00:10:59] Jeff Cranmer: Excellent. Thanks, Virginia, Simone and Steve, this has been a fun show this week.

[00:11:03] All of BioCentury's coronavirus coverage is available in front of the paywall at biocentury.com/coronavirus. Where you'll find our COVID-19 resource center, where we're tracking nearly 800 vaccines and therapeutics. All of our podcasts are available at our website on Spotify, Stitcher, Apple, and Google.

Sponsorship opportunities: Sponsorship and Underwriting packages are available for webinars, podcasts and surveys. For more information, please contact Eric Pierce and Josh Berlin at conferences@biocentury.com.

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