The Latest in Biotech and Pharma Ventures

By Imagine Biotech

The past week has seen various developments in biotech and pharmaceutical products. The Inflation Reduction act dropped drug prices significantly. Johnson & Johnson received approval from the FDA for a new combination therapy for individuals with non-small cell lung cancer, a notoriously difficult cancer to treat. Novo Nordisk, the pharmaceutical giant responsible for weight loss drug Ozempic that has taken the obesity market by storm in the past year has investments for new sites. Elli Lilly, through Catalyze 360 is broadening the scope of their practices and forming partnerships with smaller companies to strengthen their portfolio. In this weeks edition of The Due Diligence Digest these top stories will be detailed so that you, the informed investor, can make better decisions in allocating your capital.

💵Inflation Reduction Act Hacks Medicare Prices For 10 Prescription Drugs 💊 

The Biden Administration, through the Inflation Reduction Act (IRA) saw mandated negotiations with pharmaceutical companies for 10 prescription drugs under Medicare prices reduced by 38%-79%. Diabetes treatments primarily took the largest cut with Merck’s Januvia being reduced 79% and Novo Nordisks’s Fiasp being reduced a similar 76%.

Though many individuals stand to benefit from reduced out of pocket costs from the IRA, a representative from Johnson and Johnson, seeing 3 company drug prices reduced had the following to say:

Bristol Myers Squibb, pharmaceutical giant and producer of Eliquis, a drug used to prevent blood clots and stroke, had similar thoughts.

With obvious detriment to the pharmaceutical industry and investors alike, legal battles are being waged— although without much avail. Novo Nordisk, along with companies like AstraZeneca, Bristol Myers Squibb, and Johnson & Johnson, have all filed suits alleging the IRA was unconstitutional and that negotiations are unfair. Pfizer CEO Albert Bourla even called the Medicare pricing talks “negotiation with a gun to your head.” While not much progress has been made yet for pharmaceutical companies in the courtroom, it doesn’t seem like they plan on stopping their battle anytime soon.

| 📰 Weekly News 📰 |

🥼 Johnson & Johnson receives FDA approval for lung cancer combination therapy 💊 

The FDA approved a new combination therapy from Johnson & Johnson to treat advanced non-small cell lung cancer. The approval is for combination of Rybrevant and Lazcluze, and is only eligible for people with specific mutations in a gene EGFR. While Astrazeneca’s Tagrisso long dominated, J&J was able to demonstrate supremacy in study, and J&J’s treatment is chemotherapy-free.

The study conducted demonstrated reduced risk of death or cancer progression by 30% in comparison to Tagrisso. While obviously a great result, roughly 10% of patients given the combination therapy had to discontinue treatment due to adverse effects and side effects. Consequently, the FDA requires individuals to receive prophylactic anticoagulation while beginning the treatment, citing the adverse effects causing venous thromboembolic events.

📈 Novo Nordisk aims to grow production to meet growing demand 🐂 

Novo Nordisk, the Danish pharmaceutical company responsible for the weight loss drug Ozempic that took over the obesity market, is growing production facilities in order to meet increased drug demand. A subsidiary of the company has allocated roughly $200MM to build a new factory in the East of Denmark.

The facility is planned to make the raw materials that go into Novo Nordisk’s medicines primarily for chronic diseases. With high demand from the U.S. market causing weight loss drugs Ozempic and Wegovy to fly, Novo Nordisk, in June of this year announced plans to allocate $4.1 billion towards building a new plant in North Carolina.

Novo Nordisk is not the only company ramping up production of obesity drugs however. Eli Lilly is also increasing production capabilities of obesity and diabetes drugs Mounjaro and Zepbound. The two largest pharmaceutical behemoths in regard to weight loss and obesity drugs show no plans of slowing down when revenues are well outperforming market competitors.

👨‍💼 Eli Lilly looks to expand into more niche partnerships🔍️ 

Lilly Catalyze360, Lilly’s business development branch, was announced at this year’s J.P. Morgan Healthcare Conference in January. Lilly Catalyze360 is aiming to extend into areas previously not focused on by Lilly including pain, oncology, and neurodegeneration. With huge amounts of cash flow from Lilly’s weight loss portfolio, an arm of Catalyze360, Lilly Ventures, is extending direct investments in biotech companies and offering limited partnerships to various venture firms. While partnerships and ventures into newer pharmaceutical companies are nothing new, Lilly Catalyze360 aims to provide the same resources to new scientific developments and startups in order to foster a culture of innovation and scientific growth.

The Imagine Biotech Solution 🔬 

Imagine Biotech resources can call upon a wide variety of technologies to de-risk your portfolio using sophisticated pathways that have matured due to improved data resources, confounding factors, and improved model assumptions.

Our array of services range from sophisticated molecular modeling density functional methods (DFT) to the first-of-its-kind integration package of ADMET and PK predictions to academic risk.

Imagine Biotech staff have the training, expertise, and knowledge to review the proposed hypotheses (investment) in their entire journey to commercialization and select those tests/technologies to support further investment success or flag issues that arise only in the environment of review by skilled biotechnology experts.

We believe that informed investments are the cornerstone of progress. Our mission is to empower investors with the insights and tools necessary to navigate the complexities of biotech investments with confidence.