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2023 Outlook for Life Sciences

Inflation, talent, AI are top issues for biopharma and medtech

Artificial intelligence (AI), machine learning (ML), analytics, and business intelligence could have a significant impact on medical device manufacturers and biopharmaceutical companies in 2023, according to a survey of C-suite executives conducted by the Deloitte Center for Health Solutions. At the same time, those executives expect inflation, a choppy economy, on-going supply chain disruptions, and competition for top talent will shape their strategy.

The survey results are based on responses from 131 C-suite executives representing US biopharmaceutical companies, medical device manufacturers, health systems, and health plans.

Life sciences respondents agreed that inflation is likely to have a major impact on their organizations in 2023. While inflation appears to be stabilizing, the higher cost of consumer goods is making it difficult for some people to pay for medical services, therapies, and devices. As a result, health care consumers might put off buying prescriptions or medical devices that can help them treat or monitor a condition. I see this as a potential challenge for our medtech and biopharma clients in 2023. But it could also be an opportunity. Companies that can make their products more accessible and affordable to patients could drive more volume. This could also help companies build trust with their consumers.

Based on our survey findings, and conversations with our life sciences clients, here’s what I expect for biopharmaceutical companies and medical device manufacturers in 2023.

What can medtech expect?

Like many industries, medtech has gone through some pretty challenging times since the start of the COVID-19 pandemic. From an industry perspective, I see tremendous opportunity for medtech companies across the board as they continue to reorient themselves for a post-pandemic future. The medtech sector grew in 2022 and I expect that growth will continue, and possibly accelerate in the year ahead. Here are three trends to watch:

  • Technology companies: The lines between medical devices and consumer-targeted health devices are blurring. I expect technology companies from outside the sector will continue to make inroads into the medtech space—particularly in digital health and data. Some technology companies might be more experienced than traditional medtech players when it comes to the use of AI, ML, and other digital technologies. But tech companies generally don’t know the ins and outs of the health care space like medtech companies. And that could be an opportunity for medtech. According to Deloitte’s latest survey of health care consumers, people are using fitness trackers and health-monitoring devices more than ever. Nearly half of the 4,545 people we surveyed (49%) use wearables, digital assistants, or smart devices to measure fitness/health improvement. About one-third of those consumers said they use a wearable device to monitor health issues (e.g., blood sugar, blood pressure, breathing function, mood), up from 28% in 2020 and 24% in 2015. Data generated by a wearable device could eventually provide care teams with a more holistic view of their patients, particularly when that information is integrated with traditional clinical data. It also could encourage consumers to modify their behavior by providing feedback in real-time (see Left to our own devices: Can wearables keep us healthy?) However, wearables are vulnerable to patient compliance. That might be where traditional medtech has an edge over technology companies. Medtech companies can design/build implantable devices that don’t suffer the same patient compliance challenges. I am convinced the future will be robust for both types of organizations.

  • Research and development (R&D): About 80% of surveyed medtech executives said the development of innovative products would be a top priority in 2023; and 75% intend to focus more on their R&D investments. Respondents also indicated they intend to invest more in digital innovations in the year ahead and will try to build more resiliency into the supply chain.

  • Talent: Medtech respondents said they are looking to recruit people who have expertise in digital technologies. Until about five years ago, I don't think I had ever heard of a chief digital officer in a life sciences company. Today, many companies have one. In some cases, the chief information officer has become the chief digital officer or chief digital information officer. Given the increased importance of technology and digital capabilities, many of these executives report directly to the CEO. Recent layoffs that have been reported at some large technology companies could be good news for life sciences organizations that are trying to recruit data scientists and other professionals who have expertise in digital technology.

What can biopharma expect?

Talent is also expected to be a top issue for biopharma companies heading into the new year. About 90% of surveyed biopharma executives intend to invest in workforce development and retention—including a focus on diversity, equity, and inclusion (DEI). Attracting the best and brightest (and retaining them) is expected be an important issue in 2023. Here are three other trends to watch:

  • Growth in next-gen therapies: The continued development of next-generation therapies and other innovative products topped the list of actions that biopharma executives said they intend to take in the year ahead. Nearly all (95%) of survey respondents cited this as an “important” or “very important” strategy. About 20 gene therapies and 10 CAR-T treatments are expected to be approved in 2023, and even more specialty therapies are on the horizon. The US Food & Drug Administration (FDA) has received more than 3,000 Investigational New Drug (IND) applications to study CGT in clinical trials. Determining how to pay for high-cost CGTs is likely to be quite different than financing oncology drugs and other expensive therapies. Case in point: In 2022, the FDA approved two therapies that are priced at $2.8 million and $3.0 million, respectively. Other similarly priced products are likely on the way (see Multi-million-dollar therapies may alter payment models). Growth in specialty therapies will likely require companies to focus on the consumer experience in a much different way.

  • New regulations: Every pharma executive we polled said they expected regulatory changes (e.g., the Inflation Reduction Act, price transparency, interoperability) would have an impact on their organization’s strategy in 2023. Drug pricing is often a top issue for lawmakers in Washington, D.C. The Inflation Reduction Act of 2022, for example, includes several provisions intended to reduce the price of prescription drugs for Medicare beneficiaries, as well as for the federal government. Among other provisions, the law caps out-of-pocket drug spending under Medicare Part D, which could substantially reduce costs for beneficiaries who rely on high-cost specialty therapies. As more of specialty therapies come online in 2023 and subsequent years, biopharma companies may need to justify the cost to health plans as well as to government agencies inside and outside of the US.

  • Trust: While many people trust the drugs they take, the pharmaceutical sector has historically been among the country’s least trusted industries. More than 70% of biopharma executives surveyed said that improving trust will be important in 2023. R&D is a complex, multiyear endeavor with many failures and learnings. How R&D shapes investments and financial returns can be difficult to explain to the public. Pricing can also be complicated and poorly understood by the public, which could add to distrust. Some companies have recently opted to promote their brand rather than just the therapies they produce. If this strategy is successful, we could see more pharmaceutical companies promoting themselves as they look to build their own brand and earn trust among the public

I have been focused on life sciences for nearly 20 years and have never experienced a period that has been as challenging or transformative to the industry as the last three years. While I expect life sciences organizations will continue to face (and overcome) challenges in 2023, I also anticipate we will see many new innovations and more triumphs that will help to improve our health and well-being for the year and years ahead.

Happy New Year!


Top Life Sciences Startups to Watch in 2023

BioSpace is proud to present its NextGen Bio “Class of 2023,” a list of the hottest recently launched life sciences companies in North America.

To come up with this list, BioSpace evaluated companies that launched between September 2021 and September 2022 with Series A funding. They were then assessed using several different criteria and ranked in a cumulative fashion, based on the points awarded for each category. These categories were: finance, partnerships, pipeline, growth potential and innovation.

The NextGen Bio Class of 2023 is an impressive group of startups that are already making a significant impact on the industry now and will continue to do so into the future. Congratulations to this group of winners!

1. Neumora Therapeutics, Inc.

Launched: October 2021 

Location: Watertown, MA  

Series A: $400M  

Notable: It’s no surprise that the highest Series A investment of the class went to a biotech developing precision medicines in the sizzling neuro space. A year later, Neumora netted another $112 million in Series B funding.    

Differentiator: Neumora debuted with an impressive pipeline of eight clinical, preclinical and discovery stage programs stemming from internal discovery efforts and a strategic partnership with Amgen, which brought in another $100 million equity investment.   

Clinical Stage Assets: Neumora has two clinical stage assets targeting major depressive disorder (NMRA-140) and anxiety disorders (NMRA-511).  

2. Altos Labs

Launched: January 2022 

Location: San Francisco, CA 

Series A: $270M 

Notable: Altos debuted in January with serious gravitas – with former GSK CSO Hal Barron, M.D. at the helm and a board of directors that includes Jennifer Doudna, Ph.D. and Frances Arnold, Ph.D., both Nobel Laureates.   

Differentiator: Altos will take a $270 million Series A – and a total $3 billion from investors including Jeff Bezos - to decode and reverse the processes behind diseases of aging at the cellular level. The company is developing tech that can measure the effectiveness of any longevity or anti-aging drug in development.     

It Takes a Village: Altos takes this adage seriously. The company is made up of leading scientists, clinicians and executives from academia and industry in the Bay area and Cambridge, U.K., with collaborations in place in Japan.

3. Odyssey Therapeutics

Launched: December 2021 

Location: Cambridge, MA 

Series A: $218M 

Series B: $168M 

Notable: Odyssey is on a journey to discover and develop novel targets. The company has so far declared eight programs in immunology and oncology.   

Differentiator: Odyssey is rapidly expanding. Just ten months after securing $218 million in Series A funds, the company closed an oversubscribed Series B worth $168 million. As of October 2022, Odyssey counted more than 160 team members.  

Leadership: Odyssey is helmed by serial biotech entrepreneur Gary Glick, Ph.D., who has founded several companies including IMF Therapeutics, Scorpion Therapeutics and First Wave Bio.   

4. Affini-T Therapeutics

Launched: January 2022

Location: Watertown, MA/Seattle, WA

Venture Round (series unknown): $175M

Notable: Backed by Leaps by Bayer, the cell therapy start-up made its public debut at the 2022 J.P. Morgan Healthcare Conference.

Differentiator: Affini-T’s platform, which leverages a T Cell Receptor (TCR) discovery engine and suite of synthetic biology components, targets KRAS, the most prevalent oncogenic driver mutation in solid tumors. KRAS mutations are particularly ubiquitous in lung cancer, colorectal cancer and pancreatic cancer.

Forward Motion: Affini-T recently struck a partnership with ElevateBio to utilize that company’s Basecamp LentiPeakTM lentiviral vector technology platform and cell therapy production capabilities. The alliance will help Affini-T drive its oncogenic driver programs into clinical development.

5. Upstream Bio

Launched: June 2022  

Location: Waltham, MA 

Series A: $200M 

Notable: Nestled in the heart of Genetown, this OrbiMed-founded start-up officially debuted in June with $200 million in Series A financing and a clinical-stage asset targeting severe asthma acquired from Astellas.   

Differentiator: Upstream’s approach focuses on the TSLP receptor. UPB-101 is a monoclonal antibody that targets the receptor for TSLP, a validated target positioned upstream of multiple signaling cascades that affect immune cells instrumental in many inflammatory diseases.   

A Head Start: Astellas had already compiled preclinical and clinical data for UPB-101, including a single ascending dose in healthy human volunteers.

6. Capstan Therapeutics

Launched: September 2022  

Location: San Diego, CA 

Series A: $165M  

Notable: What do you get when you combine cell therapy and genetic medicine? San Diego-based Capstan Therapeutics got buy-in from investors like Novartis, Pfizer, Bayer, Eli Lilly and BMS.  

Differentiator: Capstan’s targeted delivery platform aims to reprogram immune cells in vivo with the payloads necessary to benefit patients with cancer, fibrosis and inflammation-related diseases and blood monogenic disorders.  

Preclinical Promise: The platform has already demonstrated potential in preclinical studies against a fibrosis-related target. 

7. Alto Neuroscience

 Launched: October 2021  

 Location: Los Altos, CA 

Series A: $32M 

 Series B: $35M 

Notable: Novartis-backed Alto Neuroscience has raised $75 million to date. The precision psychiatry company already has two assets, ALTO-101 for major depressive disorder (MDD) and post-traumatic stress disorder and ALTO-300 for MDD in Phase II studies.    

Differentiator: Alto is working to treat these neuropsychiatric diseases and more with its AI-enabled biomarker platform, which combines rich sources of information on patients’ brain activity and behavior to develop medicines for target populations.   

Racking up Accolades: The company was recently selected as one of BioSpace’s 2023 Best Places to Work in Biopharma.  

8. IDRx, Inc.

Launched: August 2022  

Location: Plymouth, MA 

Series A: $122M 

Notable: IDRx arrived in Genetown in August with $122 million and alliances with Merck KGaA and Blueprint Medicines.    

Differentiator: Combinations are key for IDRx, which is developing intelligently designed combinations in the hopes of stopping cancer mutations before they start. IDRX-42, licensed from Merck, is already in Phase I trials for gastrointestinal stromal tumor.  

A Solid Foundation: IDRx was incubated by Alexis Borisy. The serial biotech entrepreneur has helped launch companies like Relay Therapeutics and EQRx, which took the number two spot in BioSpace’s NextGen Bio Class of 2021.   

9. Intergalactic Therapeutics

Launched: October 2021 

Location: Cambridge, MA  

Series A: $75M 

Notable: Founded in 2020 by ATP, Intergalactic scored $75 million in Series A funds to develop non-viral gene therapies in ophthalmology, hearing disorders and vaccines. 

Differentiator: Part of the next generation of gene therapies, Intergalactic aims to overcome the size limitations of viral vectors with its C3DNA platform. The tech allows the company to design and deliver even the largest genes to target cells.  

Strong Leadership: Intergalactic is helmed by former Biogen EVP of R&D, Michael Ehlers, M.D., Ph.D. At Biogen, Ehlers oversaw the global filings and approvals for spinal muscular atrophy (SMA) therapy Spinraza.   

10. Septerna, Inc.

Launched: January 2022 

Location: South San Francisco, CA 

Series A: $100M

Notable: One of 2022’s earliest Series As, Septerna has since built out its leadership team with the formal appointment of Jeffrey Finer, M.D., Ph.D. as CEO and the additions of Liz Bhatt as chief operating officer and Ran Xiao as VP of finance and business operations.    

Differentiator: Septerna has a very specific target: GPCR. The largest and most diverse family of cell membrane receptors, there are more than 700 approved drugs targeting GPCRs, including opioids. Septerna is leveraging its GPCR Native Complex™ platform to target new diseases previously considered untreatable.  

Impressive Heritage: Septerna belongs to the notable Third Rock Ventures family which also includes Editas Medicine, Faze Medicines, Asher Bio and Flare Therapeutics.  

11. Chroma Medicine, Inc.

Launched: November 2021 

Location: Cambridge, MA  

Series A: $125M   

Notable: Chroma belongs to one of the hottest therapeutics spaces - epigenetic medicine. Atlas Venture and Newpath Partners seeded the company.   

Differentiator: In April 2021, Chroma co-founders Luke Gilbert, Ph.D. and Jonathan Weissman, Ph.D. published a paper in Cell about a new gene editing technology that forms the basis of Chroma’s work. The tech, CRISPRoff, allows researchers to control gene expression with high specificity while leaving the DNA sequence unaltered.   

A Full Scientific House: Chroma’s six scientific founders – including the Broad Institute’s David Liu – carry significant gravitas in genomics, epigenetic editing and drug discovery.  

12. Ceptur Therapeutics

Launched: January 2022 

Location: Hillsborough, NJ 

Series A: $75M   

Notable: Launched in January with $75 million in Series A funding, Ceptur has support from Bristol Myers Squibb. The debut round was led by venBio Partners and Qiming Venture Partners USA.  

Differentiator: Ceptur is developing targeted oligonucleotide therapeutics based on U1 Adaptor technology. U1 Adaptors are bivalent oligonucleotides that engage sequence-specific mRNA and the U1 small nuclear ribonuclear protein (U1 snRNP). These therapies control gene expression at the pre-mRNA level within the nucleus, offering the potential to regulate mRNA in a highly targeted fashion.  

 A Solid Foundation: Ceptur’s scientific advisory board includes RNA therapeutics veterans Steven Dowdy, Ph.D., Adrian Krainer, Ph.D., Henrik Oerum, Ph.D. and Thomas Tuschl, Ph.D.  

13. Clade Therapeutics

Launched: November 2021 

Location: Cambridge, MA 

Series A: $87M

Notable: Bristol Myers Squibb has put its capital into another NextGen Bio ’23 member, Clade Therapeutics, which is developing  scalable, off-the-shelf, next-generation stem cell-based medicines to treat cancer.   

Differentiator: The company’s proprietary platform enables the immune cloaking of induced pluripotent stem cells and the differentiation of cloaked stem cells into therapeutic cells.  

Strong Leadership: Co-founder and CEO Chad Cowan, Ph.D. also co-founded Sana Biotechnology and has had a hand in the launch of several other cell and gene therapy startups including BlueRock Therapeutics, Vesigen Therapeutics and NextGen Bio ’22 member Metagenomi.  

14. Triana Biomedicines, Inc.

Launched: April 2022  

Location: Waltham, MA 

Series A: $110M

Notable: Triana Biomedicines is discovering and developing novel small molecules that form the backbone of a scalable “molecular glue.”  

Differentiator: Researchers at Triana expect the platform to be able to identify over 600 preferred E3 ligases for priority disease targets. 

Industry Vets at the Helm: Patrick Trojer, Ph.D., president and CEO, previously served as chief scientific officer at Constellation Pharmaceuticals. CSO Jean-Christophe Harmange, Ph.D. was previously SVP and head of research at Goldfinch Bio, and Co-founder and CTO Jesse Chen, Ph.D. built Kymera Therapeutics’ industry-leading targeted protein degradation platform and pipeline. 

15. Code Biotherapeutics, Inc.

Launched: June 2022 

Location: Hatfield, PA 

Series A: $75M

Notable: Code Bio is aiming its non-viral delivery platform at therapies for some of the most prevalent genetic diseases including Duchenne Muscular Dystrophy (DMD) and type 1 diabetes.   

Differentiator: Code Bio’s 3DNA platform is made up of modular, programmable building blocks, enabling it to target cells and tissues with a high degree of specificity. The company attests the platform can enable targeted delivery of gene therapy, RNAi and other genetic medicine modalities. 

Power Partners: Code Bio and Takeda struck a collaboration agreement to leverage the 3DNA platform for a liver-directed rare disease program. They will also conduct studies for CNS-directed rare disease programs. Amgen wanted in too - its VC arm took part in the Series A round.  

16. Satellite Bio

Launched: April 2022 

Location: Cambridge, MA 

Series A: $110M

Notable: Regenerative medicine player Satellite Bio bioengineers cells into “Satellites” which can be implanted into patients. The approach is dubbed “Tissue Therapeutics”.  

Differentiator: Satellites are assembled and programmed through the Satellite Adaptive Tissue (SAT) platform which serves to restore, repair or replace dysfunctional or diseased tissue. Satellite will focus its initial attention on liver cells.  

Experienced Leadership: CEO Dave Lennon, Ph.D. most recently served as president of AveXis and Novartis Gene Therapies, where he led the launch of Zolgensma, a regenerative gene therapy for SMA. 

17. Ambagon Therapeutics

Launched: January 2022 

Location: San Francisco, CA 

Series A: $85M

Notable: Molecular glue developer Ambagon was seeded by RA Capital Management, AbbVie Ventures, MRL Ventures Fund and more. Surveyor Capital joined the Series A round.   

Differentiator: Ambagon is developing molecular glue stabilizers to address proteins with intrinsically disordered regions that interact with the hub protein 14-3-3.

Promising Preclinical Pipeline: Ambagon has five early discovery programs, all focused on cancer. By the second half of 2023, the company expects to field at least one developmental candidate.  

18. Epic Bio

Launched: July 2022 

Location: South San Francisco, CA 

Series A: $55M 

Notable: The genetic medicine company was founded by Stanley Qi, Ph.D., a well-known bioengineer and co-inventor on the CRISPR patent held by the University of California. 

Differentiator: Epic’s Gene Expression Modulation System (GEMS) platform is designed to precisely modify gene expression. GEMS sports the largest known library of novel modulators combined with advanced functional and computational genomics capabilities to rapidly design guide RNAs that are highly specific to the targeted genes. 

Key Clinical Asset(s): The biotech’s lead pre-clinical candidate, EPI-321, targets the rare muscle disorder facioscapulohumeral muscular dystrophy (FSHD), an inherited condition that primarily affects the face, scapula and the humerus region. FSHD is the second most common form of muscular dystrophy and usually presents before the age of 20.   

19. Ansa Biotechnologies

Launched: April 2022  

Location: Emeryville, CA 

Series A: $68M 

Notable: Ansa is developing a next-generation enzyme DNA synthesis platform.   

Differentiator: Ansa’s enzyme DNA synthesis platform could be a major improvement over the current industry standard, known as phosphoramidite synthesis, which uses hazardous chemicals that can lead to molecule damage or higher error rates.   

A New Wrinkle on DNA Synthesis: The company’s novel enzyme-based platform has the potential to lead to faster, longer and more accurate DNA synthesis.   

20. Totus Medicines

Launched: December 2021 

Location: Emeryville, CA 

Series A: $40 million  

Notable: Using advanced cellular analysis and large-scale machine learning, Totus’ unique drug discovery platform aims to make every human disease druggable.   

Differentiator: Totus boasts the world’s most comprehensive library of covalent chemistries which it pairs with ultra-high throughput cell-based screening and an AI/ML-powered drug design portal.  

A Potential Gamechanger: The biotech’s lead experimental candidate is the pre-clinical phosphatidylinositol 3-kinase α (PI3Kα) inhibitor TOS-358. PI3Kα is a common oncogene found in a variety of tissue types. TOS-358 is designed to be a major improvement, from an efficacy standpoint, over the field of currently approved PI3Kα inhibitors.   

21. Spatial Genomics

Launched: February 2022 

Location: Pasadena, CA 

Series A: $56 million 

Notable: Spatial Genomics’ approach to unraveling molecular identities and locations within single cells is based on a combination of sequential fluorescence in situ hybridization (aka seqFISH) and molecular barcoding. The company’s powerful platform could prove to be a major step forward for the field of integrated spatial genomic analysis.   

Differentiator: Integrated spatial genomics is a rapidly developing field that may one day lead to major breakthroughs in precision medicine, biotechnology and molecular biology.

A Key Financial Backer: As part of its Series A fund raising, Spatial scored a $40 million strategic investment from the genetic testing company Fulgent Genetics.

22. Seismic Therapeutic, Inc.

Launched: February 2022  

Location: Boston, MA   

Series A: $101M

Notable: The biotech’s novel IMPACT™ platform integrates machine learning into the biologic drug discovery process. Seismic plans to leverage this unique technology to develop designer biologic therapies for various autoimmune diseases.    

Differentiator: Seismic’s IMPACT™ technology has the potential to be a major step forward in the discovery and development of therapies targeting conditions arising from dysregulated adaptive immunity.  

A Top Financial Backer: Seismic’s Series A funding was led by the top shelf venture capital firm Lightspeed Venture Partners.   

23. 64x Bio

Launched: January 2022 

Location: San Francisco, CA 

Series A: $55 million 

Notable: 64x Bio’s VectorSelect™ platform, a novel cell line engineering technology, is designed to lower the economic and logistic burdens inherent in most types of gene therapies.   

Differentiator: The company’s novel technology could unlock billions in latent value in the multi-billion-dollar gene therapy market.   

A Prestigious Heritage: 64X Bio’s cell line engineering technology was developed by the company’s founders, including George Church at Harvard University and David Thompson at Harvard’s Wyss Institute.    

24. Mariana Oncology

Launched: December 2021 

Location: Boston, MA 

Series A: $75 million  

Notable: Mariana's tumor target biology, which pairs ligand modalities to target features, could be a quantum leap forward for the field of cancer-fighting radiopharmaceuticals. 

Differentiator: The company’s cutting-edge radiopharmaceuticals are designed to be best-in-class precision cancer treatments, characterized by rapid system clearance, maximum payloads and top shelf safety profiles.    

 A Highly Skilled Management Team: Mariana CEO Simon Read, Ph.D. was the former CSO for Ra Pharmaceuticals until the company was bought out by UCB Pharma. Read has also held leadership positions in several other notable pharmaceutical companies such as GlaxoSmithKline, AstraZeneca and Roche/Genentech.     

*Mariana was formerly known as Curie Therapeutics

25. ONK Therapeutics

Launched: January 2022 

Location: San Diego, CA  

Series A: $21.5M

Notable: ONK is developing a portfolio of next-generation off-the-shelf cell therapies for a diverse range of both liquid and solid tumors.   

Differentiator: The company’s gene-editing technology is designed to enhance the safety and efficacy of modified natural killer cells (NK) across a variety of hard-to-treat tumors.    

Lead Clinical Stage Asset: ONK’s lead product candidate is ONKT102, a fully human, optimized affinity CD38 CAR-NK. This experimental cell therapy is presently in IND-enabling studies as a potential treatment for relapsed/refractory multiple myeloma.  


Three biotech trends to watch in 2023

Predicting the future is famously a mug’s game. Between Covid-19, drug pricing legislation, and a dramatic turn of events in neuroscience, the last few years of biotech history have been volatile to the point of capriciousness.

So instead of guessing at what the year ahead may bring, here are a few of the trends that will likely be staging grounds for the next major plot twists, including an escalating scramble for all-important cash and an invocation of a time-honored pharmaceutical cliché.

Getting creative to raise money

Despite the breathless promises of countless AI startups, the process of inventing drugs is probably not going to get significantly faster or cheaper any time soon. That means the cash-burning companies doing the expensive work of making medicines are going to need to raise money, which in 2023 will likely require a little creativity.

The year-long downturn for biotech stocks has forced publicly traded companies to sell their stock at discounted prices to raise cash, and made it all but impossible for private companies to execute initial public offerings. That creates a vicious cycle. To stay afloat, private companies have to go back to venture capital firms, but VCs, with no IPOs to speak of, aren’t making returns on their last round of investments. Everyone is living under the weight of a biotech cash crunch, and that’s not going to change until the market turns around.

In the meantime, 2022 taught us that deals can still get done with some ingenuity. A handful of public companies signed agreements that allowed hedge funds to look at confidential, blinded clinical trial data as an inducement to buy stock. Others have looked to companies like Royalty Pharma, a company that trades immediate cash for a cut of the profits from approved or in-development medicines. Nimbus Therapeutics, a company founded during biotech’s last major downturn, formed LLCs around its individual drugs so they could be easily sold off, and earlier this month, Takeda paid $4 billion for one of them.

A new era in Alzheimer’s

For years, the dream among forward-looking neuroscientists was a future in which treating Alzheimer’s disease would be like fighting cancer, with an armamentarium of specifically targeted medicines allowing for therapy to be tailored to a specific patient. All we needed, the thinking went, was a first-mover drug to get the ball rolling.

Lecanemab, the Eisai-invented Alzheimer’s treatment expected to win approval in January, could fill that role. There’s an emerging consensus that the drug’s benefits, while modest, are real enough to justify its use for many patients. And once it’s approved, researchers can begin studying lecanemab in combination with investigational treatments aimed at a different biological aspect of Alzheimer’s, beginning an iterative process that, in cancer, has led to a steady stream of newer and more effective medicines.

There’s no guarantee any of those combinations will work. Even in oncology, which is much better understood than the underlying science of Alzheimer’s, success has come in fits and starts. But lecanemab promises to serve as both a starting point and a measuring stick for the next generation of treatments, bringing the field that much closer to the dream of a full medicine chest for Alzheimer’s.

Lofty expectations for a new class of obesity drugs

The annals of biopharmaceutical history are filled with optimistic slide decks and exuberant analyst notes claiming this or that medicine had the potential to become the next Lipitor, the superlatively successful cholesterol drug that made about $200 billion for Pfizer before going generic. But in 2023, thanks to a new generation of metabolic treatments, that dusty drug industry cliché might finally come true.

They’re called incretin mimetics, and they work by boosting the function of a bodily hormone called GLP-1, which increases insulin production. The earliest GLP-1 agonists have been around for about a decade, used largely to treat Type 2 diabetes, but data demonstrating their dramatic effects on body weight have led to more recent FDA approvals for obesity. The latest and most powerful GLP-1 drug, an Eli Lilly treatment marketed for diabetes as Mounjaro, is expected to win an obesity approval next year and bring in annual sales of more than $20 billion by the end of the decade. Novo Nordisk, Amgen, and Pfizer are each developing rival GLP-1 drugs that promise less frequent dosing, more substantial weight loss, or fewer side effects.

There are more than 100 million people in the United States who meet the diagnostic criteria for obesity, making GLP-1 drugs “the electric vehicles of biopharma for this decade,” SVB Securities analyst David Risinger wrote in a note to clients earlier this year, “because the market opportunity is so significant and current penetration is extremely low.”

Whether GLP-1 treatments can reach the industry’s lofty projections — Pfizer expects the market to hit about $100 billion in 2030 — will depend on insurance companies, federal regulators, and cultural mores as to whether high body weight is in itself a disease. It’s also unclear just which GLP-1 drug will emerge as the category leader. It’s worth remembering that Lipitor, a drug synonymous with pharma’s millennial heyday, was not the first or even most powerful cholesterol drug on the market.



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