Ep. 387 - Psychedelics at FDA, Mike Davis’ CDER & tRNAs

The episode opens with discussion of Novartis's significant clinical setbacks: three deaths in a RAPCAB2 gene CAR-T trial, failure of Pellicarson (antisense oligonucleotide targeting LP(a)) in the Phase 3 Horizon trial, and failure of their Phase 3 Harbor trial for DM1 acquired through the Avidity Biosciences acquisition. These announcements resulted in a $40 billion market cap loss.

Regarding the Pellicarson failure, the panel explores three potential explanations: the molecule itself (possibly insufficient LP(a) knockdown compared to siRNA therapies achieving 80-100% reduction), the target (whether LP(a) is truly actionable despite genetic evidence linking it to cardiovascular outcomes), or trial design/patient population issues. The discussion highlights that Pellicarson achieved approximately 80% knockdown in Phase 2, while competing siRNA approaches from Amgen and Arrowhead achieved upper 90% knockdown. Notably, Novartis hedged by licensing siRNA programs from Chinese companies Argo Biopharma in deals worth $160 million and $185 million in 2024-2025.

The panel debates timing and biology: in secondary prevention (patients post-heart attack), LP(a) may have already caused irreversible vascular damage accumulated over a lifetime. This suggests earlier intervention might be necessary but would require surrogate endpoint validation. The broader question emerges about whether cardiovascular biology remains poorly understood despite apparent genetic associations.

Lauren Martz presents her fourth annual pharma deals analysis, revealing 221 deals among top 21 pharma companies over the past 12 months, with activity up significantly compared to the prior period. Key findings include rising deal activity overall and a strategic shift toward disruptive technologies and modalities. Bispecifics lead the modality growth year-over-year, particularly T cell engagers for autoimmune diseases as an alternative to traditional monoclonal antibodies and small molecules. In vivo CAR-Ts, siRNAs, and targeted protein degraders also show significant growth. Notably, no antisense deals appear in the dataset, suggesting market shift from antisense toward siRNA.

On geographic trends, China biotech deals have increased significantly, making China equivalent to Europe as a partner region, but this represents pie expansion rather than cannibalization of U.S. biotech deals—U.S. deals also increased substantially. However, no acquisitions of Chinese biotech companies occurred during the period despite robust M&A overall. Discussions in Congress and Treasury about adding biotech to CFIUS reflect concerns about U.S.-China dealmaking, though VCs argue American companies benefit from acquiring Chinese assets at favorable valuations.

The disease and modality focus from China partners has shifted markedly from cancer/bispecifics dominance two years ago to a more balanced portfolio now including GLP-1/obesity, peptides, and emerging RNA therapies.

Eli Lilly dominated pharma dealmaking with 18 deals (40% of surveyed deals), more than doubling second-place companies (GSK, Novartis, Sanofi at 8 deals each), driven largely by obesity franchise momentum.

Steve Usden reports on Most Favored Nation (MFN) drug pricing developments. Insight (not present at White House announcement) signed an MFN deal described in SEC filing as providing Medicaid access at international reference prices, without committing to future launch pricing mandates. Bridge Bio, which attended the White House, negotiated an exclusion for exclusively orphan-indicated drugs (its entire pipeline). The Trump administration employs two mechanisms to incentivize MFN participation: mandatory Medicare drug pricing models (GLOBE for Part B starting January 1st and GARD for Part D starting January 1st) and Section 232 tariffs (up to 100% on certain drugs, scheduled September 29). Companies signing MFN deals receive promised exclusions from GLOBE and GARD, though details remain unclear regarding scope (specific drugs vs. future launches). If House or Senate flips in midterms, Congress will likely subpoena and release these deals.

The episode concludes with remembrance of Peter Barton Hutt, FDA chief counsel 1971-1975 and influential FDA law scholar who taught at Harvard Law School. His legacy includes Supreme Court victories in 1973 establishing the adequate and well-controlled investigation standard, the off-label prescribing doctrine (championed after his brother needed off-label treatment), and nutrition labeling standards.