409: Predicting biotech clinical trials & a new Alzheimer's drug controversy
The Readout Loud podcast discusses Eli Lilly's $2.8 billion acquisition of Atai Life Sciences for its psychedelic depression treatment, Merck's FDA approval of Lipfendra (the first oral PCSK9 cholesterol pill), and Biogen's controversial tau-targeting Alzheimer's drug Dyrannosin. The episode features bioethicist Jonathan Kimmelman examining Kalshi's new prediction markets for clinical trial outcomes, discussing both their potential to improve drug development decisions and risks of compromising trial integrity.
Summary
The episode opens with discussion of three major biotech developments. First, Eli Lilly announced it is acquiring Atai Life Sciences for $2.8 billion upfront plus up to $1 billion in milestones, with the centerpiece being 5-MeO-DMT, a psychedelic treatment for treatment-resistant depression. Elaine Chen notes this is a riskier psychedelic compared to psilocybin or LSD due to its intense experience, though it offers advantages in terms of faster administration time (shorter clinic visits). The acquisition reflects Eli Lilly's financial capacity to make aggressive bets in emerging areas like psychedelics and neuropsych.
Second, Merck received FDA approval for Lipfendra, the first oral PCSK9 inhibitor for cholesterol management. This is significant because existing PCSK9 drugs require injections, which has limited patient adoption and revenue despite their efficacy. The hosts discuss whether this oral formulation will achieve better market penetration than injected alternatives given the prevalence of cheap, generic statins.
Third, Biogen presented phase two data for Dyrannosin, a tau-targeting Alzheimer's drug. The drug showed a 26% slowing of cognitive decline at its lowest tested dose, though there was an inverse relationship between tau reduction and clinical benefit—the lowest dose had the least tau reduction but most clinical benefit, while higher doses showed computational side effects. The hosts note this represents a different mechanism from current amyloid-targeting drugs like Lecanemab and Kisunla, potentially avoiding amyloid-related imaging abnormalities (ARIA). However, the confusing dose-response relationship and lack of clarity about the drug's true mechanism raise questions about whether Biogen should proceed to phase three, particularly given the company's past struggles with Aducanumab.
The main interview features Jonathan Kimmelman, a bioethicist at McGill University who has researched prediction markets in clinical trials. Kimmelman discusses both the potential and risks of Kalshi's new initiative to create prediction markets around phase three clinical trials and FDA decisions. He explains that prediction markets can aggregate dispersed expertise better than traditional decision-making approaches (the "Moneyball" problem in drug development). However, he raises significant ethical concerns: prediction markets could introduce bias by influencing patient enrollment decisions, investigator behavior, and patient adherence during the trial period. Even with Kalshi's mitigation strategy of launching markets only after patient enrollment closes, risks remain during the data collection period. Patients in comparator arms might drop out if market prices suggest the experimental drug is superior, and investigators might alter their assessment behavior based on market signals. Kimmelman argues that ideally, prediction markets should only launch after all data collection is complete, though this reduces their informational value. He also distinguishes between prediction markets on specific trial outcomes versus broader paradigm-level questions (like whether the amyloid hypothesis will succeed), arguing the latter may be more scientifically valuable. Regarding Adam's comparison to stock markets, Kimmelman contends that stock prices are crude predictors of trial outcomes because they reflect multiple factors beyond trial results. He also notes a fundamental tension: if prediction markets can accurately predict trial outcomes, it suggests researchers already know too much, raising ethical concerns about randomizing patients to potentially inferior treatments. True clinical equipoise requires genuine uncertainty about outcomes.
About this episode
On this week’s episode of "The Readout LOUD": The Kalshi prediction markets are coming for biotech, plus the controversy over an experimental Alzheimer’s disease treatment from Biogen. Kalshi, the maker of prediction markets, announced this week that it is expanding into biotech. Soon, you’ll be able to make bets on the outcomes of clinical trials and FDA drug reviews. Is that a good thing? We’ll discuss the issues with Jonathan Kimmelman, a bioethicist at McGill University who has researched prediction in clinical trials. We also chat about Biogen and its tau-lowering drug for Alzheimer’s. A mid-stage clinical trial presented this week showed the drug reduced levels of the tau protein and slowed the rate of cognitive decline in patients. But the data also raised a lot of questions that left experts and investors debating the drug’s future.
Key Insights
- Eli Lilly is willing to spend $2.8 billion on a riskier psychedelic molecule (5-MeO-DMT) because the company has substantial financial resources to make speculative bets on emerging therapeutic areas like psychedelics and neuropsychiatry.
- The inverse dose-response relationship in Dyrannosin's phase two trial—where the lowest dose showed the most clinical benefit but the least tau reduction—creates fundamental uncertainty about the drug's mechanism and whether proceeding to phase three represents a sound investment of resources.
- Jonathan Kimmelman argues that prediction markets launched after patient enrollment but before final data collection can still compromise trial integrity by influencing patient dropout rates and investigator assessment behavior based on market price signals.
- Kimmelman contends that if prediction markets can accurately forecast clinical trial outcomes, this paradoxically suggests the research system is functioning poorly because clinical trials should only proceed when genuine equipoise exists—when researchers and patients are genuinely uncertain about which treatment is superior.
- Prediction markets focused on broad scientific paradigms (such as whether amyloid-targeting drugs will meaningfully slow Alzheimer's progression within five years) may offer more scientific value than markets predicting specific trial outcomes, because they address fundamental hypotheses rather than individual studies.
- Stock market prices are crude predictors of clinical trial outcomes because they reflect multiple factors unrelated to trial results, such as company capital, supply chain risks, and overall valuation, making specialized prediction markets a more focused tool for understanding trial likelihood.
- Kimmelman suggests that a staged, piloted approach to Kalshi's prediction markets—starting with large, late-phase trials from major companies with clear outcomes—is more prudent than immediately expanding to early-stage development where market influence on trial decisions would be most problematic.
- The hosts note that Biogen's struggle with Dyrannosin mirrors its past Aducanumab controversy, suggesting the company may not have fully internalized lessons about committing resources to Alzheimer's drugs with unclear or ambiguous efficacy signals.
Topics
Transcript
Welcome to this week's episode of The Readout Loud, a weekly biotech podcast from STAT. I'm Allison DeAngelis. I'm Adam Feuerstein. And I'm Elaine Chen. stat. I'm Allison DeAngelis. I'm Adam Feuerstein. And I'm Elaine Chen. It's Thursday, July 16th, and on this week's episode, we're going to dig into an announcement from Kalshi, the maker of prediction markets. It's expanding into biotech, so soon you'll be able to make bets on the outcomes of clinical trials and FDA drug reviews. Is that a good thing? We're going to discuss. But first, a recap of the week's news and a word from our sponsor. I'm Jesse McWhorter, STAT's branded content editor, and I'm thrilled to be talking with one of…
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