San Diego—Pharmaceutical executives and biotech investors spent their time on the prowl at the BIO International Convention this week, searching for promising new drug candidates as money starts moving through the sector again.
About 20,000 people were in San Diego for the annual conference of the trade group Biotechnology Innovation Organization (BIO). Pharma companies sent their business development teams. So did investment firms, smaller biotechs, law firms, and banks.
With Big Pharma firms readying to buy new assets in the face of looming patent cliffs, all kinds of partnerships are fair game: licensing deals, co-development agreements, and outright acquisitions. “Investments will come in many flavors,” said Susan Abelleira, a partner and patent attorney at the law firm Foley Hoag.
Scott DeWire, head of global business development at Boehringer Ingelheim, has a team looking for early-stage drug candidates in the cardiorenal, metabolic, immunology, and cancer disease areas. The early-stage focus makes Boehringer unusual; many pharmas are prioritizing assets that are near commercialization for deals. But DeWire said Boehringer prefers to “co-create” programs where possible. It’s not unusual for the firm’s partnerships to span a decade or more.
“I think we really want to work with them and bring something forward, rather than buy a baked cake later,” he said. Boehringer on Tuesday announced a new collaboration with the antibody firm ComboTope Therapeutics to develop cancer drugs.
Sanofi, the French pharmaceutical giant, is looking for deals in the immunology, rare disease, and vaccine spaces, according to Brian Bronk, head of business development, who spoke on a panel about dealmaking on Tuesday.
Johnson & Johnson is interested in investing in blood disorders; bladder, head and neck, colorectal, prostate, and lung cancers; neuropsychiatry and neurodegeneration, according to Lesley Stolz, the company’s head of west and North American external scientific innovation.
Bayer is likewise eyeing opportunities across ophthalmology, women’s health, oncology, and cardiorenal diseases, said Juergen Eckhardt, who heads business development and licensing for Bayer’s pharmaceutical division as well as the investment arm Leaps by Bayer. Small molecules and antibody-drug conjugates are of particular interest.
“The two sweet spots are the early-stage stuff that is sort of between proof-of-concept and Phase 1” clinical trials, Eckhardt told C&EN. “Then for later-stage stuff, I would say some first proof-of-concept—like Perfuse Therapeutics had some Phase 2a data that got us excited.” Earlier this month, Bayer acquired Perfuse, which is developing small molecules for eye disorders, for $300 million up front.
Private investors are on the hunt for similar opportunities. Maha Radhakrishnan, executive partner for private equity at Sofinnova Partners, told C&EN that she is interested in drug candidates for cancer, immunology and inflammation, cardiometabolic and renal diseases, central nervous system disorders, and rare diseases.
Sofinnova typically invests $15 to $25 million when it first backs a start-up in its early stages, she said, but it often provides more money in follow-on rounds, and its team provides guidance throughout a portfolio company’s growth. “We help them navigate through clinical development challenges, we make sure we bring in the right team in case they don’t have the right team members,” Radhakrishnan said. For a success story, she pointed to Aiolos Bio. Sofinnova co-led a series A fundraising round in Aiolos only a few months before the start-up was acquired by GSK.
Aiolos was also financially successful because it launched with a ready-made drug candidate licensed from the Chinese pharmaceutical company Jiangsu Hengrui Pharmaceuticals. Such stories are becoming more and more common these days as US and European investors and pharmas increasingly send their business development teams to China.
“We continue to look at China as a key strategic partner. It’s no longer a peripheral kind of ‘me too,’” Radhakrishnan said. She’s watching “a flurry of assets” for cancer, immunology and inflammation, and cardiometabolic targets from the country.
Across conversations at BIO this week, pharmaceutical leaders made it apparent that they do not care where, geographically, a drug candidate originates, so long as it has clinical and commercial potential.
“We are geographically agnostic, and I personally have been spending a lot of time in China ever since COVID,” Eckhardt said. “Every time we go there, we are kind of blown away by some things that we see or encounter, so the level of innovation and just the scale and quality is astonishing. It’s impressive. So we are embracing that wholeheartedly. I think the whole industry is.”
The rush toward China has sparked concerns about national security. Several congresspeople earlier this month introduced an amendment to include biotech deals in last year’s COINS Act. The law subjects outgoing US investments to reviews by the US Departments of Treasury and Defense. If passed, the updated legislation would likely dampen the spate of US-China biotech deals, which recently include a $15.2 billion co-development agreement between Bristol Myers Squibb and Hengrui and a $10.5 billion partnership between Pfizer and Innovent.
Business leaders say they are concerned about the bill but hope it will be diluted between now and passage—assuming it passes at all. “Thirty-plus years in the industry, and the idea of creating legislation that contributes to health inequity around the globe—it’s troubling,” Sanofi’s Bronk said during the Tuesday panel discussion.
