How To Work With Trump, The Future Of US Life Sciences And More: Updates From BIO CEO & Investor

Advice For Working With Trump

The biotech industry is only about one month into working with a new administration in the US following the inauguration of Donald Trump as president – and the pace of executive orders and speculation about potential changes and cuts to the government agencies have been hard to keep up with. As a lot of attendees and presenters at the BIO CEO & Investor Conference put it, the early days of the Trump presidency have been “chaotic.”

But experts on a policy outlook panel held on 11 February said there were still lots of opportunities to work with the new administration though it will be important for the biopharma industry to frame lobbying efforts in a way the administration can embrace.

“I think we can see this whole concept of almost a reset, of biotechnology being the big idea that this administration can latch onto,” Alkermes senior VP-policy and government relations Pete Norman said. He pointed to opportunities to embrace operational efficiencies at the US Food & Drug Administration (FDA), the Centers for Medicare & Medicaid Services (CMS) and pharmacy benefit managers (PBMs).

“My fear is for the industry – we’re going to immediately launch in, talk to the administration about rebates and rules when this administration is talking about rockets and robots,” he said. “We could be talking different languages at the outset.”

BGR Government Affairs health care practice head Remy Brim urged biopharma companies not to get caught up in the 24-hour news cycle spiraling out of the White House and to focus on high level objectives to sidestep distraction. One example, she said, was the administration’s plan to freeze NIH grant funding, an action that was immediately paused following a federal court order.

“In a period of three days, we’ve gone from mass panic to pause. Nothing is happening,” she said. “How can we think about embracing this administration’s general principles to really drive biotech forward without getting caught up in the minute-to-minute social media/new press release/new things? A lot of that, it’s meant to start a conversation. It’s meant to push the ball.”

Roivant Social Ventures president and CEO Lindsay Androski said increased scrutiny on government spending could yield efficiencies at relatively clunky federal agencies, despite concerns about cuts.

“If you just look objectively at the way we develop drugs, a lot of it is still pretty archaic,” she said. “There’s a lot of turmoil right now at the FDA and other agencies, I’m sure, as people know, people are expecting cuts, but a flip side of fewer resources is that you have to be more efficient with the resources you have.”

“I’m hopeful that maybe even in a more employee constrained world, there’ll be an additional push to kind of adopt and move forward and test out these tech advances,” she added. But, she urged attendees to be the ones to try using these new technologies.

“You start now having these conversations internally and really getting your regulatory folks ready for, hey, let’s be the first company that asks FDA to look at this technology and to let us use it in development, because we’re ultimately going to be the ones that are pushing this forward through our requests and our interactions with FDA,” she said.

Funding Drought Drives Chinese Obesity Companies To US, But Is It Sustainable?

While Novo Nordisk’s semaglutide (Ozempic and Wegovy) and Eli Lilly’s tirzepatide (Mounjaro and Zepbound) currently dominate the market for obesity drugs, there have been companies developing dozens of competing drugs, especially in the GLP-1 agonist class, in China. However, the problem the Chinese companies face is that they are having trouble finding funding – compared to plentiful funding six or seven years ago, today they are not getting any money. Consequently, Regor Therapeutics CEO Xiaoyang Qiu said in a 10 February panel to discuss obesity drugs, they were forced to resort to selling off rights to their key assets as they seek resources abroad, including in the US.

“So the good thing is that in the short term, people might get some cheap stuff out of China, but that’s not sustainable,” Qiu said. He noted that while Regor – which has the oral GLP-1 RGT-075 in Phase II for obesity, type 2 diabetes and other indications – was able to do discovery and some clinical development in China, it also had a clinical development team in the US and did development there. “But most Chinese companies don’t have that capability,” he said.

Many Chinese firms have sought to partner with Western counterparts in an effort to get their products to market. In December, Merck & Co. obtained global rights to Hansoh’s preclinical GLP-1 agonist HS-10535, with Hansoh retaining co-promotion or sole commercialization rights for China under certain conditions. On 9 January, venture capital-backed Verdiva Bio launched with ex-China and ex-South Korea rights to a portfolio of anti-obesity drugs from China-based Sciwind, including the Phase II-ready oral GLP-1 agonist VRB-101. And on 13 January, Boston-based Kailera Therapeutics and Lianyungang, China-based Hengrui Pharma announced topline Phase II data for their partnered GLP-1/GIP receptor agonist, HRS9531/KAI-9531.

J&J’s Innovation Exec Remains Optimistic On US Biotech Innovation

On 7 February, the National Institutes of Health announced that it would start cutting funding for “indirect costs” for research from nearly 30% to about 15%, a move that would severely reduce funding for medical research across the US. Twenty-two states sued in response, leading a federal judge to temporarily stop the changes. But the administration’s moves are already having effects, from a halt in new studies to a communications freeze that prevented many scientists from doing things like attending conferences to present their research.

Nevertheless, Nauman Shah, global head of business development at Johnson & Johnson Innovative Medicine, said he continued to see the US as a leader in life sciences.

“I continue to be very optimistic about biotech innovation in the US,” he said in a fireside chat at the conference, adding that he hoped to see policies that were pro-innovation. “I don’t see the US relinquishing its leading, number-one position anytime soon.”

With regard to the potential NIH cuts, he said, “We’ll have to see how these policies ultimately get further progressed and what comes to fruition.”

He added that the NIH plays “a very important role in basic science,” and that the average person in the US “doesn’t appreciate how interconnected it is” and how closely tied together and interdependent the various components of the innovation ecosystem are.

How Common Buzzwords Can Become An IPO Pitfall

It is not uncommon for drug makers – especially small ones pushing their first products through the clinic and hoping to get them to the market – to describe their assets as “best-in-class.” But it turns out that presents a potential pitfall when it comes to making an initial public offering, even if a drug fits that description.

In a panel discussion on IPO trends, Actuate Therapeutics CEO Daniel Schmitt recalled how there seemed to be “potential green shoots” in the market at the beginning of 2024 when his company was looking to make its IPO, which it eventually held in August. The company’s lead program is the glycogen synthase kinase-3 beta inhibitor elraglusib, an injected drug in Phase I and Phase II development for multiple solid tumors in adults and children, along with a preclinical oral version of the same drug for solid and liquid tumors.

While Actuate described its assets as “best-in-class,” the company’s attorneys questioned that language. “So they took what I thought was a reasonable position and then just stamped ‘veto’ all over it and said, ‘Here, go raise money,’” he said.

A lot of the pushback against language like “best-in-class” and “first-in-class,” attorney Gaby Morales-Rivera said, comes not from attorneys as much as from the Securities and Exchange Commission. “I’ve had conversations with many clients where they have evidence they are first-in-class, but the SEC just has an allergic reaction to those kinds of buzzwords,” she said.

Actuate went public on 14 August with 150,000 fewer shares than proposed in a July SEC filing and at the low end of the predicted $8 to $10 per share price range; at $22.4m it was one of the smaller IPOs of 2024, which was a difficult year to go public.

“Going into this process, be aware that program value is one thing, market dynamics are another, and sometimes market dynamics prevail,” Schmitt said.