The biotech landscape: market trends, priorities, predictions, and pathways to FDA approval

- Arsalan, thanks, and thanks to Novotech for hosting this.

That's a really loaded question. We can start with the public markets where I think

what you've seen is the IPO market has almost completely dried up.

There are knock-on effects from that that we can talk about in the private market.

For those companies that are already public, if you announce good data, you may have a chance of raising capital, but if you opportunistically need to raise capital, the markets being quite unkind in terms of the discounts that you're expected to deal with.

Frankly, because every company's market cap has gone down, the amount of capital that you can raise has gone down by a meaningful quantum because the SEC limits you and the Nasdaq rules limit you to the amount you can raise in many settings.

You've got this conundrum where companies with too low market cap find themselves needing to raise capital, two or three times a year which obviously is not sustainable.

The public markets are largely in disarray. People are just trying to figure out how to get by,and additional fundraising ideas are being sought by public market companies.

On the private side, I think it's gotten a bit worse. The absence of a public markethas meant that the crossover rounds which were so prodigious two or three years ago don't exist anymore.

Fortunately, a number of venture capital groups raised a fair bit of capital commitments for their funds and so they're able to protect their investments and continue to fund promising private companies.

Of course, the question is, for how long?

I think you're beginning to see some of the down rounds that were so common in and that doesn't create the most congenial environment.

Certainly, a far cry from what we saw a couple of years ago. How do you see the next 12 months playing out then?

- When I went to medical school, they gave me a stethoscope, but not a crystal ball, so I'm not sure I have the answer to this one.

It does seem like the Federal Reserve and a number of central banks believe that as we come out of COVID that our economies are overheating for a variety of reasons and that they do not want to see that level of inflation which tends to mean interest rates are going up which puts pressure on all assets but puts even more pressure on the riskiest assets.

On top of that, a war in Ukraine and energy prices that are feeling the pinch of that and people still not sure exactly what to make of COVID anymore.

I think you've got a recipe for tightening by central governments.

Probably a need to see a couple of quarters of dampening of inflationary trends before people start feeling like we can get back to normal.

Maybe July next year, people begin to feel that way but again, no crystal ball.

- Got you.

Yi Larson let's turn to you because I'd like to learn a little bit more background on LianBio and your ambition of bringing innovative drugs to China.

- Sure. Thanks for having me on this panel.

Lian is a cross-border biotech company with offices in China and the US.

We are founded by Perceptive Advisors in 2019.

Perceptive saw a real need to build a new kind of company with the ability to accelerate Chinese patient access to innovative new medicines.

Historically, in China, patients had significantly delayed access to new treatments.

What we've seen in recent years is new government policies that have been enacted to try to improve health outcomes.

Many of these policies have really helped the biotech ecosystem in China to start to flourish.

At Lian, we in-license medicines uniquely suited to the Chinese market and have established a robust clinical development, regulatory, and medical affairs infrastructure operating on the ground in China.

- You're the CFO over there. Tell us about how this changing environment has changed your thinking.

- We've certainly been very mindful of the current market conditions and have been disciplined about our cash management.

At the same time, we are fortunate to be well-capitalized and in a position to continue to invest in our priority near-term commercial stage programs and launch readiness activities for these programs. BD continues to be a focus for us.

Our bar has significantly risen in terms of bringing in new programs given the current funding in my environment.

We're also very focused on continuing to build out our existing disease franchises to ensure that we can realize the synergies when bringing in new assets.

I'll say also that in this current environment, what we have seen is an uptick in interest from potential western biotech partners in pursuing these regional deals.

- Larson, I want to turn back to Fred again real quick. Fred is a very well-known top investor.

I just want to ask you, where are you most interested in investing right now?

Any kind of technologies or modalities that you're kind of seeing?

- I think there are a couple of ways to cut that question.

The first is type of company.

I would say right now, we're looking more towards starting new companies or investigating fallen angels because we think that there's meaningful value in the marketplace.

When we look at technologies, our read on the market is pharma has a tremendous need for new products and it will only accelerate over the next eight years.

What they want is real innovation, not me slightly better because the payers are not going to pay you for just slightly better.

That tends to ask us to run toward meaningful innovation, whether that's in the gene editing space, in gene therapy, cell therapy, or precision immunology, but advanced modalities that we think can really change the practice of medicine.

- Now, I want to turn to biotech development strategies now for our next topic.

Really maximizing value in this new environment that we're talking about.

Yi, I want to turn back to you. You had mentioned that you're looking to in-license over there.

With a presence in both China and the US, what has been your go-to development strategy? Can you share that with audience?

- Our core model is to in-license programs for development in China and other APAC regions.

We like to bring in programs that are at a stage where we can add value to the global program.

For example, by contributing to Phase III trial enrollment. I can tell you that the ability to contribute patients to a global program can be very meaningful to US-European-based partners.

Before I was at Lian, I was the CFO of Turning Point Therapeutics where I led the out-licensing of China rights to our lead programs.

The reason that we were interested in a regional deal was because of the clinical development resources, the partner was able to bring it to the table and the ability to quickly recruit patients, particularly in trials of precision medicine can be very attractive.

Another way that we are maximizing value for clinical programs is by pursuing region-specific indication strategies.

For example, we're studying our FGFR inhibitor, infigratinib in gastric cancer, which has higher prevalence in China than in any other geography.

Indication expansion can generate value on a global scale while also allowing our partners conserve their resources.

- Let's talk about conserving resources. I want to turn back to Fred again, well known global investor over here.

In this leaner environment, how do these biotechs operate with less capital available?

In particular, how do they think about APAC and China when it comes to early globalization of their development strategy with less capital?

- Let me start with what do you do when you're aspirationally a fully integrated biotech company, and the current market is the current market.

Everybody tells you you better cut your spend probably by 10% or 15% and you better focus that spend on your asset that is farthest along.

That is, you will focus on your Phase II or your Phase Ib asset and reprioritize preclinical work which is a polite way of saying, "You'll put it on the shelf until you can afford to do it."

That discussion is being reiterated in boardroom after boardroom after boardroom because ultimately what will make a biotech company successful is clinical data in its lead asset.

That's where the value gets created and everyone knows it. 

Now, you want to have as fully integrated a company as possible because ultimately you're trying to build the next Genentech or Amgen, but the reality is you have to get through next year and we'll push all that other stuff off in the future.

As to how you're thinking about Asia, don't you use point interesting place to do certain clinical trials?

Frankly, there are diseases where it's easier to recruit in Asia where those diseases are more prevalent.

You heard about gastric cancer. It's also true with Cholangiocarcinoma.

Obviously, hepatitis B is certainly the case, and by extension, hepatocellular carcinoma.

There are a number of places where it makes sense to extend your reach to recruit faster because while you're thinking about optimizing spend, what's important to remember is you've got to pay to keep the lights off.

What you are pushing hardest for is time to last patient in.

The more you can shorten that, the more you can shorten the readout on your trial, which is ultimately what will be the fuel that will drive the subsequent growth of your company.

- Put the stuff you can't afford on the shelf and try to get to that data inflection point as soon as possible. That is the monotheistic God you are praying to in this environment.

- Alright, wonderful. Let's turn to Jeanne Novak, CEO, and president of CBR International in Boulder.

Jeanne, I understand you've been developing global clinical plans for US biotech client base.

Can you tell the audience any changes you've seen about how they view US only versus a global clinical development plan?

- Yes, and thank you for having me on the panel today.

There is absolutely a shift in the development patterns that we're seeing in early clinical trials, and it is primarily based on the availability and speed of obtaining opportunities to get into Phase I trials.

What I mean by that is we've had a tremendous slowdown, for example, in different parts of the FDA in review, approval, and discussion around clinical programs at the early stages.

Because of that, what I'm seeing, we have many more clients across the biotech space, the pharma and small molecule space as well as vaccines and biosimilars.

The first two entities primarily are saying how can we get into normal healthy volunteers in a much more rapid fashion because what we're really needing to do is very early on put our cash where it matters and that is, as Fred has said, into the clinic where we can rapidly begin to assess not just the safety of a new entity, but also that early dosing of information that we need to move programs forward.

The shift that we're seeing is because of a lot of the delays and some delays also in getting into CRO's Phase I units, et cetera here in the States and even to some degree in Europe.

Australia, for example, has become much more of a target for a lot of our early startup companies as well as young companies that might be into their second or third product in their pipeline wanting to get that clinical data early.

They are shifting their strategies for early development to places like Australia where the incentives and the opportunity to get into really high integrity, very high-quality Phase I opportunities exist. We are seeing that shift.

- My last question, I want to turn it back to Yi real quick.

Really from a Chinese biotech perspective, if you're looking at getting an FDA approval, what are just some of your top key considerations that you're looking at top line there, Yi?

- Sure. The FDA has actually been very clear about their requirements to get FDA approvals.

They're looking for multicenter randomized control clinical trials which demonstrate applicability to the patient population in the US.

They also want to make sure that primary endpoints are applicable to the standard of care in the US and that the control arm is also applicable to standard of care in the US. These are all incredibly important.

What we saw earlier this year is some complete response letters that were issued when trials didn't meet some of these requirements.

At Lian, while we're not developing for the US market, we do participate at times in our partners' global trials as I mentioned and we typically contribute anywhere from 15% to 20% of the global trial enrolment from China as part of that global trial, and we'll leverage that global trial for approval both in the US as well as in China.

- Very good. Thank you for that.

Let's move on to our last topic here.

We'll spend a little bit of time on it.

Strategies to get to those data inflection points.

First, let me turn to Kasey Kime, the Director of Regulatory Affairs of Novotech.

Kasey, in terms of defining a robust preclinical program, what is critical in early planning to support that kind of success lateral?

- Okay, thanks.

I can think of three key things here.

The first is to know your product. Begin your product characterization early, develop your target product profile, and your associated quality target product profile.This will help you uncover challenges to your development program.

The next tip is to take advantage of all available health authority meetings.

Educate yourself on what meetings that you are eligible for and use this as an opportunity to discuss those developmental challenges.

This is going to help you focus your development and help save time and money and improve your overall chances of filing success.

My third tip would be to think beyond Phase I.

For example, if you are considering applying for accelerated approval, you need to consider the impact of that on your overall development timeline because often the clinical development can move faster than the traditional CMC.

You need to give early consideration to expediting your CMC development if accelerated pathways are part of your strategy.

- I'm going to now ask you a very direct question about Australia because we've done several of these panels with Novotech in the past about using Australia as a cost-effective sort of expedited pathway for Phase I.

We want to pull up a slide over here for this question.

I want to ask you, how can Australia be used as a cost-effective pathway to Phase I, and are there any local requirements for clinical trials in the region that the audience needs to be aware of?

- Sure. We've seen a lot of success from our biotech clients doing the early phase trials in Australia.

Some of the well-known reasons for this that I'm displaying here on this slide are the rapid startup timelines, the overall lower cost of the trials due to the tax rebate program, the efficiency of the regulatory pathway.

It's quite a streamlined regulatory pathway under the CTN pathway and of course, the quality of the clinical trial data coming out of Australia.

Australia has a world-class health system and that data is accepted by major regulators like the FDA and the EMA for future clinical trials.

For those reasons, it is a very attractive place for early phase trials.

One extra tip to be aware of is that if you have an open US IND, you are eligible for the CTN pathway.

That means some of the higher-risk biologicals like the CART T therapies, if you have an open IND, you can discuss with the TGA, and there is the ability to streamline that clinical trial under the CTN pathway. That's a very good tip to know.

- Ok, alright. Jeanne, let me turn to you and ask you, how do the FDA view that Phase I data from Australia? Can it be used as part of an IND? What considerations should biotech have if they're going to go the Australia route?

- Certainly.

The FDA is actually very open to clinical data coming from outside of the US.

With regards to, again, Phase I studies that are designed and conducted in Australia, for example, it's known that oftentimes the data and the safety data collection and monitoring is, again, of such a high quality that that's data that is readily accepted by the FDA.

Certainly, if the study is designed appropriately, absolutely can springboard a program directly into a Phase II or maybe a Phase Ib with an expanded opportunity to continue evaluating dosing and schedule.

Oftentimes, we advise that if it's possible to get early clinical data in a Phase I, normal healthy volunteers again, in Australia, that oftentimes that can be very important information for filing even an early application with the FDA or a request for a meeting to actually discuss the data and not just bring it in to support the Phase II, but actually use that in discussions with FDA to help build that development program with the FDA.

- Ok. Jeanne, just to expand on that a little bit, Yi did mention some of the stuff that the FDA requires for approval, but from a US regulatory perspective, anything you could add on any insight what the FDA would require for biotechs looking to expand their global program into the US?

- Absolutely. I'd have to agree with Yi.

So much of what we think about for US approvals is very US-centric with regards to looking at the populations that are the greatest concern for the US, so foreign studies would be conducted, typically, we need to see between 10% and 15% of efficacy studies including US populations in at least the bare minimum.

I think that's a very important consideration.

Again, the standard of care which was also mentioned, but I think a bigger part of the approvability piece starts early in development, and that is trying to establish what are the benchmarks and the efficacy endpoints.

Also, some of the key elements of pharmacokinetics that can be done again early before we begin thinking about Phase III and global trials.

We have many of those going on and in some cases where we haven't seen a good total development program thinking ahead to those indications, and in fact, some of those key parameters to well-controlled pivotal studies to support approval endpoints that are in fact clinically meaningful which is a big topic with the FDA right now that the endpoints not only need to be statistically significant but clinically meaningful for the population that you intend to treat.

With all of those in mind at the later stages of development, building those attributes and those considerations early in your trials and looking for those types of benchmarks and paying attention to not only the design and adding value to the trial, but also the outcomes you're looking for can actually guide that development program towards those pivotal efficacy studies that can in fact result in an approval in the US.

- Very good. Yi, I want to turn back to you real quick again.

From a Chinese biotech perspective, has there been anything that's changed in recent years in terms of accelerated development pathways that you're looking at?

- Yes, a lot has actually been changing in China, particularly over the last few years that I think makes it such an exciting place to be operating in biotech right now.

That comes in many forms. Regulatory reforms, we've seen China joining the ICH which has enabled that ability to join the global clinical trials, also accelerated regulatory pathways, which include priority review, breakthrough therapy designation, and clinical trial waiver programs, so mirroring a lot of the programs that we already have in the US as well as significant government support to really foster innovation.

That's through their policies, strategic investments in the sector, and supporting growth in the infrastructure in China.

We're also seeing an improved reimbursement system through the national reimbursement drug list, which now sees annual listing updates.

It used to be much less frequent which are driving more rapid and greater access throughout China as well as stronger IP protection. All of those things, I think, are making it a much more favorable environment to be operating in and also much more aligned with the global development.

- Great. Kasey, I'm going to turn to you.

I understand that the Novotech has a new product BioDesk.

Could you give the audience some information about it, an introduction to it, and what might differentiate it from other consultancy firm in the region?

- Sure.

BioDesk is Novotech's in-house regulatory consultancy group.

We're a little different to other regulatory consultancy groups by the fact that we're actually part of a global CRO that specializes in biotech.

Because of that, we get to see a lot of innovative products and we get to work with a lot of different global health authorities, and we get to see how they treat these innovative products.

This kind of experience is highly valuable to our biotech clients, many of which are working right at the edge of cutting science in areas where the regulatory guidance is limited or not yet developed.

I would say our strength at BioDesk is being part of a global CRO that specializes in biotech.

- Very good. Wonderful. I've got one last question for the whole panel over here.

I'd like all of you to imagine, the reader or the audience member being a biotech or pharma professional entering the clinic.

They're wanting to build a robust global program.

They want to deploy their capital effectively because they're hearing those conversations in the boardroom.

They want to increase their asset valuation.

Fred first, what's your one big piece of advice for them?

- Think hard about your target product profile and make sure that it will matter.

Having thought about that, make sure that the clinical trial that you're working on ends up being supportive of the direction you're headed in.

- Jeanne, same question to you. They're wanting to deploy capital effectively, increased asset valuation. What's your one piece of advice?

- Absolutely think about the long-term goals and be flexible as you are willing and able to collect clinical data.

Assess those data appropriately and see if you're still on target for what your original plan might have been and make the adjustments early so that you're not falling so much in love with what your original theory might have been, but rather what the data are telling you.

Quickly pivot if needed and continue on a path to, again, developing excellent and high-integrity clinical data.

- Good. Yi Larson. 

- I think as it relates to a global development program, if you are thinking about doing a regional or global deal, the choice of partner really matters.

The deal itself is just the beginning of a long-term relationship that requires very close collaboration in order to realize the full value of the deal which often entails a great deal more work than most people expect, so plan ahead, think about the timing, and the choice of that partner. That really matters.

- Okay, and Kasey Kime?

- I would say think carefully about your choice of CRO partner.

You want to pick a CRO with a proven track record and experienced staff in your therapeutic area.

- Wonderful. That's all the time that we have for today. I really enjoyed this global topic.

We've had a global panel of people from all around the world over here.

I want to thank everyone in the audience for tuning in.

I want to thank our panel for sharing their time and expertise.

Thank you to Novotech for sponsoring yet another discussion at Endpoints Webinars.

If you'd like to like to rewatch this or share it with your colleagues, a link for on-demand viewing will be sent tomorrow.

I'm Arsalan Arif for Endpoints News. Thanks for joining us.

We hope to see you at a future event. Thanks, everybody.