Biopharmaceutical Sector

Weekly Update – Jan 22, 2024

St. Francis Hotel. Site of #jpm24

Conference.. Photo: Tim Opler
© 2024. All rights reserved. Securities in the United States are offered through Stifel, Nicolaus & Company, Member FINRA/SIPC. In Europe such
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1
 Mass Spectrometer used to discover Alzheimer’s Biomarkers, Jan 2024

Table of Contents
Section Page
Macroeconomics Update 5
Biopharma Market Update 10
Capital Markets Update 26
Deals Environment (M&A + Licensing) 40
Industry News 46
IQVIA Global Use of Medicines Report 68

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web: www.stifel.com 2
2
 Accessing Past Issues
If you are not on the mailing list for this publication and wish to be added, please notify Natasha
Yeung ([email protected]). Recent issues in case you missed and want to read:

Jan 15, 2024 (FDA Commissioner Priorities)

Jan 5, 2024 (Sector Outlook for 2024)
Dec 18, 2023 (Expectations for Future)
Dec 11, 2023 (ASH, R&D Days)
Dec 4, 2023 (Big Pharma, CEA)
November 22, 2023 (Bullish on Biotech)
November 20, 2023 (M&A)
November 13, 2023 (AHA, Bear Market)
November 7, 2023 (Unmet Needs)
October 30, 2023 (ADCs)
October 23, 2023 (ESMO Review)
October 16, 2023 (Cancer Screening)
October 9, 2023 (Biosimilars, M&A)
October 2, 2023 (FcRn, Antibiotics)
September 25, 2023 (Target ID)
September 18, 2023 (Changing Pharma Strategy)
September 11, 2023 (US Health System)
September 5, 2023 (FTC, IRA, Depression)
August 21, 2023 (Covid, China)
August 7, 2023 (Employment, Summer reading)
July 24, 2023 (Alzheimer’s Disease)
July 7, 2023 (Biotech market review – H1 ‘23)
July 1, 2023 (Obesity drugs)
June 19, 2023 (Generative AI)
June 12, 2023 (IRA, State of Industry)
May 29, 2023 (Oncology update)
May 22, 2023 (FTC case on Amgen/Horizon)
Gadget on top of the Mass Spectrometer used to discover Alzheimer’s Biomarkers, Jan 2024 3
Upcoming Events

Bio-Europe Spring
Barcelona, Mar 18 to 20

Biotech Hangout held its latest event on Jan 19, 2024.

The next event will be on Jan 26, 2024.

January 19th Replay: https://twitter.com/i/spaces/1yoKMwmmwWDJQ

The week of March 18 will feature over 5,000 biopharma professionals in
January 26th Session: https://twitter.com/i/spaces/1LyGBnZnebaGN
Barcelona for Bio-Europe. We hope to meet you there.
Please join us.
To meet with Stifel @ Bio-Europe
To Learn More [email protected]
https://www.biotechhangout.com/

4
Macroeconomics Update

5
S&P 500 Hits New Record High Amid Signs of Easing US
Economic Gloom
Dominic Rushe and Callan Jones, The Guardian, Jan 19, 2024 (excerpt)
The S&P 500 scaled a new all-time high on Friday amid signs that the economic despondency that has The stock market did
gripped US consumers may be easing. well last week on
improving consumer
The index climbed 1.2% to 4,838 on Friday afternoon, clearing a record last set two years ago. It has rallied
sentiment and a boom in
more than 17% since late October.
tech stocks tied to the
Earlier in the day, an influential survey showed that consumer sentiment soared 13% in January to reach generative AI
its highest level since July 2021. opportunity.
The University of Michigan’s monthly consumer sentiment index rose 9.1 points to 78.8, the biggest
monthly advance since 2005 and far exceeding expectations.

The news came after a similarly sharp rise in December. Joanne Hsu, University of Michigan’s director of
surveys, said that over the last two months, sentiment has climbed a cumulative 29%, the largest two-
month increase since 1991 as a recession ended.

“Consumer views were supported by confidence that inflation has turned a corner and strengthening
income expectations,” said Hsu.

The rise was driven in large part by expectations that the rate of inflation will continue to decline. The
survey found that consumers expect prices to climb at an annual rate of 2.9% over the next year, down
from the 3.1% reported in December. Expectations about price rises over the next five to 10 years hit a
four-month low of 2.8%.
Source: https://www.theguardian.com/business/2024/jan/19/us-economy-consumer-sentiment-rises 6
Ten-Year U.S. Treasury Yield Starting to Inch Up
United States Treasury 10 Year Bond Yield, Jul 19, 2023 to Jan 19, 2024
5.5
Ten-Year US Treasury Bond
Yields have risen by 27 basis
points since the start of the
5.0 year.

The yield ended last week at

4.5 4.15%.

This is not great news for

biotech.
4.0

We think last month’s CPI

number and the upcoming
3.5 Treasury Quarterly
Refunding Announcement
(Jan 29th) are worrying bond
3.0
investors.
Jul-20-2023

Jul-27-2023

Aug-03-2023

Aug-10-2023

Aug-17-2023

Aug-24-2023

Aug-31-2023

Sep-07-2023

Sep-14-2023

Sep-21-2023

Sep-28-2023

Oct-05-2023

Oct-12-2023

Oct-19-2023

Oct-26-2023

Nov-02-2023

Nov-09-2023

Nov-16-2023

Nov-23-2023

Nov-30-2023

Dec-07-2023

Dec-14-2023

Dec-21-2023

Dec-28-2023

Jan-04-2024

Jan-11-2024

Jan-18-2024
Source: S&P CapitalIQ. 7
Haley Makes Final Sprint in New Hampshire
Gram Slattery and James Oliphant, Reuters, Jan 20, 2024 (excerpt)

Former South Carolina Governor Nikki Haley was set to campaign across New Hampshire Nikki Haley is the most
this weekend in a final push against Republican rival Donald Trump ahead of Tuesday's pharma friendly of the
nominating contest, as the former U.S. president ramped up his verbal attacks and again candidates running for
targeted her Indian heritage. President in 2024.

Haley, who served as U.S. ambassador to the United Nations under Trump, has hit back at She is running well behind
her former boss following his Iowa caucuses victory last Monday in a bid to thwart his Trump in the polls for the
momentum and pitch herself as the best alternative to face Democratic President Joe New Hampshire primary
Biden in November's general election. which will be held next
Tuesday.
New Hampshire boasts a more moderate brand of Republicanism with a semi-open
primary that can attract more centrist voters, who may be turned off by Trump's four
criminal cases, authoritarian language and efforts to overturn his 2020 re-election loss.

One of two remaining candidates challenging Trump for the Republican nomination, Haley
needs a strong showing after placing third narrowly behind Florida Governor Ron DeSantis
as Trump handily won in Iowa, the first stop in the state-by-state battle to determine the
party's choice to face Biden.
Source: https://www.reuters.com/world/us/haley-makes-final-sprint-new-hampshire-trump-steps-up-attacks-2024-01-20/
8
Trump and Biden Both Hate Pharma—Investors Shouldn’t
The drug sector had one of its worst years ever relative to the S&P 500 last year and now faces political attacks, but investors should focus
on the value.

David Wainer, Wall Street Journal, Jan 19, 2024 (excerpt)

Donald Trump and President Biden have both taken a hard line on drug prices, while Florida Gov. Ron DeSantis has touted his state’s effort to import drugs from Canada.
During an election year that may see Republicans and Democrats seeking to outdo each other over who is tougher on insurance giants and big pharma, investors might
want to tune the noise out.

That isn’t to say that politics don’t matter. During years where serious policy overhauls are on the table, election considerations tend to take over. That was the case for
the insurance industry in both 1996 and 2008, as Bill Clinton, and later Barack Obama, took stabs at reforming the sector. During both those years, the insurance industry
significantly underperformed the broader market.

But with the Biden administration already able to tout a law that will target drug prices paid by Medicare—and Republicans far from united on any serious changes to the
healthcare system—valuations, earnings trajectories and macroeconomics might be more important signals in 2024.

When it comes to valuations, healthcare looks attractive after posting one of its worst relative performances last year. The S&P 500 and the NYSE Arca Pharmaceutical
Index were trading at roughly similar valuations at the start of last year, but drug companies are now cheaper thanks to the sector underperforming the S&P 500 by 21.4%
in 2023.

So far, it seems investors are being tempted to rotate back into healthcare. The NYSE Arca Pharma Index is up 4% so far this year compared with a less than 1% gain for
the S&P 500. While that sometimes is the case with losers catching a bid after tax-loss selling late in the previous year, there is evidence investors are adding to their
positions in a serious way.

During elections held during downturns for the stock market, such as in 2000 and 2008, pharma outperformed the S&P 500 by an average of 27 percentage points. That
makes sense, given that healthcare is viewed as a defensive sector. For investors looking to move toward more defensive postures, Johnson & Johnson, Amgen AMGN and
Walgreens are three high-yielding stocks to make it on a list of the Dow’s 10 highest dividend-yielding stocks—historical outperformers known as “Dogs of the Dow.”

Source: https://www.wsj.com/health/pharma/trump-and-biden-both-hate-pharma-investors-shouldnt-04ac699b
9
Biopharma Market Update

10
Sentiment Flat Last Week
The Week of Jan 15th was not a great week for the biotech
market by any measure.
After a week of great weather at JPM, we started that first “real week” of
the year with a mixed market.
By Friday, the S&P 500, Nasdaq 100 and other tech heavy indices set all
time records propelled by investor interest in tech semiconductor stocks
tied to the generative AI boom.
This was despite the fact that the U.S. 10-year Treasury yield crept over
4% again on worries of inflation persistence. Worries about inflation
were expressed in many quarters last week in the wake of the last CPI
report.
In contrast, the XBI dropped for the week and is now down for the year.
Arggghh.
If you have a feeling of déjà vu, you aren’t alone.
Q1 2023 was marked by investor excitement in AI and a tech stock runup
– accompanied by a very soft biotech market.
AI sizzle is a short-term thing and biotech remains long duration – hence
the divergence between the sector values.
Rates crept up last week as investors fretted about inflation.

11 11
Soft Sentiment (continued)
There are two deeper factors at play: (1) weakness in the China stock market and (2) the absence
of retail and generalist investor entry into biotech.
Lacking a broad theme to attract interest (e.g., mRNA vaccines), generalists are staying away and
appear to be in an AI gold rush. Apparently, low biotech stock prices alone don’t really get it done.
We also saw a notable lack of M&A activity last week. Sun finished out the buyout of Taro for $348
million but this deal had been announced many months ago.
Within the specialist driven biotech market, there were strong flows at work. We saw a billion in
equity follow-ons again last week as seven biotechs tapped the secondaries market for deals of
$50 million or more.
An interesting factoid is that there are 43 specialist funds that have picked up nearly $20 billion in
gains from M&A announced since the Immunogen deal last November 30th. This money isn’t going
to be on the sidelines for long. As capital gets returned from the recent wave of dealmaking it
should work to sustain existing and new stories in the biopharma market. One can’t help but think
the strength thus far in 2024 in names like Arrowhead or Zealand involves fund positioning for
future M&A following recent deal takeouts.
We remain optimistic about the biotech market in 2024. It’s innovation against macro right now.
And the macro picture has improved, is improving and is going to improve. Inflation is being held
up by rental prices, but these are imputed and far from real prices. Oil prices matter too and are
being inflated by issues in the MidEast that are unlikely to persist throughout the year. While
consumer sentiment is strong, pricing pressures are rapidly falling as the economy normalizes.
Conversations with a variety of market participants confirm what most of us intuitively know: there
is an unusually large amount of money on the sidelines –waiting for the market to turn. This wave
of cash is headed for biotech shores and shouldn’t be too long in coming. 12
 Dollars shown are in millions

Forty-Three Specialist
Target Aiolos Bio Ambrx Harpoon Gracell RayzeBio Karuna Icosavax Cerevel ImmunoGen Total Count
Buyer GSK J&J Merck AZ BMS BMS AZ AbbVie AbbVie
Announced 1/9/2024 1/8/2024 1/8/2024 12/26/2023 12/26/2023 12/22/2023 12/12/2023 12/6/2023 11/30/2023

Investors Have Made Upfront Cash $mm $1,000 $2,000 $680 $1,000 $4,100 $14,000 $800 $8,700 $10,100

$19.6 Billion in
Bain Life $500* $0 $0 $0 $0 $0 $0 $3,149 $0 $3,649 2
T. Rowe $0 $26 $0 $0 $69 $2,023 $76 $351 $147 $2,693 6
Fidelity $0 $42 $0 $0 $76 $1,059 $35 $465 $218 $1,895 6

Proceeds from Pharma Capital Research

Wellington
$0
$0
$0
$0
$0
$0
$0
$0
$84
$260
$1,497
$475
$0
$0
$41
$0
$0 $1,622
$500 $1,235
3
3
Viking $0 $0 $0 $0 $444 $413 $0 $0 $0 $857 2
M&A Deals Since Redmile
RA Capital
$0
$0
$0
$0
$0
$60
$0
$86
$125
$0
$0
$0
$0
$94
$0
$0
$661
$503
$785
$743
2
4

November 30, 2023 Janus

Perceptive
Darwin
$0
$0
$0
$0
$0
$528
$0
$0
$0
$0
$0
$0
$0
$52
$0
$0
$0
$0
$0
$0
$0
$0
$526
$0
$668
$0
$0
$668
$578
$528
1
2
1
Cormorant $0 $314 $63 $0 $79 $0 $0 $0 $0 $456 3
Avoro $0 $66 $0 $0 $270 $0 $0 $46 $0 $381 3
Much of these proceeds are Rock Springs $0 $0 $0 $0 $0 $186 $14 $121 $0 $321 3
Fairmount $0 $0 $0 $0 $82 $0 $0 $0 $224 $306 2
expected to return to the Orbimed $0 $0 $0 $96 $176 $0 $0 $0 $0 $273 2
market in the form of follow- Sofinnova
Paradigm
$0
$0
$0
$111
$0
$0
$0
$0
$162
$0
$0
$0
$0
$0
$0
$122
$77
$0
$239
$233
2
2
ons, IPOs and open market Eventide $0 $0 $0 $0 $0 $126 $0 $23 $0 $149 2
TCG X $0 $0 $0 $31 $58 $0 $58 $0 $0 $148 3
purchases. Vivo Capital $0 $0 $0 $113 $0 $0 $27 $0 $0 $139 2
Avidity $0 $0 $0 $0 $0 $101 $0 $31 $0 $132 2
Point72 $0 $0 $0 $0 $0 $127 $0 $0 $0 $127 1
Samsara $0 $0 $0 $0 $124 $0 $0 $0 $0 $124 1
Deep Track $0 $117 $0 $0 $0 $0 $0 $0 $0 $117 1
Tavistock $0 $0 $0 $0 $0 $0 $0 $0 $117 $117 1
Commodore $0 $111 $5 $0 $0 $0 $0 $0 $0 $117 2
Logos $0 $0 $0 $26 $0 $0 $44 $34 $0 $103 3
Millennium $0 $0 $0 $0 $0 $0 $0 $102 $0 $102 1
Source: Stifel analysis of CapIQ reports on holdings in Nextech $0 $99 $0 $0 $0 $0 $0 $0 $0 $99 1
last reporting period before deal announcement. Woodline $0 $0 $0 $0 $0 $0 $0 $0 $91 $91 1
Investors shown with at least one Ph.D. on staff. Citadel $0 $24 $41 $0 $0 $0 $25 $0 $0 $90 3
Investors with less than $50 million of proceeds not Adage $0 $0 $0 $9 $0 $0 $0 $72 $0 $81 2
included in table but are included in the total at Invus $0 $0 $0 $0 $0 $0 $0 $78 $0 $78 1
bottom of table. Laurion $0 $0 $0 $0 $65 $0 $12 $0 $0 $77 2
Federated $0 $76 $0 $0 $0 $0 $0 $0 $0 $76 1
* Bain’s percentage holding of Aiolos not disclosed. Franklin $0 $0 $0 $0 $55 $0 $0 $0 $0 $55 1
We assume it is 50%. Total $500 $1,532 $201 $428 $2,182 $6,006 $384 $5,162 $3,206 $19,602
13
The XBI Closed at 87.1 Last Friday (Jan 19). Down 3.7% for the Week
The XBI is down 2.5% for the year to date. The Nasdaq Biotech Index is flat for the year. Not the start we would have wished for in biotech in
2024.

Biotech Stocks Down Last Week VIX Up a Bit XBI, Jan 19, 2023 to Jan 19, 2024
100

Return: Jan 12 to Jan 19, 2024 Jan 20: 19.9% Despite last week’s dip, the market rally that
May 26: 18.0% 95 started last October remains very much intact.
July 21: 13.6%
Nasdaq Biotech Index: -1.7%
Sep 29: 17.3%
Arca XBI ETF: -3.7% Oct 27: 21.2%
90

Stifel Global Biotech EV (adjusted): -2.9%* Dec 29: 12.45%

S&P 500: 1.1% Jan 12, 2024: 12.7% 85

Jan 19, 2024: 13.3%

80

Return: Jan 1 to Jan 19, 2024

10-Year Treasury Above 4%
75
Nasdaq Biotech Index: +0.1%
Arca XBI ETF: -2.5% Jan 20: 3.48%
70
Stifel Global Biotech EV (adjusted): -0.8%* May 26: 3.8%
S&P 500: +1.2% July 21: 3.84%
Sep 29: 4.59% 65

Oct 27: 4.86%

Dec 29: 3.88% 60
Jan 3, 2024: 3.95%

Jan-19-2023

Feb-09-2023

Mar-02-2023

Mar-23-2023

Apr-13-2023

May-04-2023

May-25-2023

Jun-15-2023

Jul-06-2023

Jul-27-2023

Aug-17-2023

Sep-07-2023

Sep-28-2023

Oct-19-2023

Nov-09-2023

Nov-30-2023

Dec-21-2023

Jan-11-2024
Jan 12, 2024: 3.96%
Jan 19, 2024: 4.15%
* Change by enterprise value. The adjusted number accounts for the effect of exits and additions via M&A, bankruptcies and IPOs. Source: S&P Capital IQ and Stifel analysis 14
 Total Global Biotech Sector Value Dropped 2.9% Last Week
The total enterprise value of the global biotech sector is down 0.8% for the year to date. The rally that started 13 weeks ago has started went
into slight reversal last week as interest rates began to inch up again.

Total Enterprise Value of Publicly Traded Global Biotech, Feb 8, 2021 to Jan 19, 2024 ($ Billions)

$598
$600

$529

$500
Aggregate Enterprise Value ($ Billions)

$427

$400 $376
$337

$300
$247
$225 $227 $225 $224
$235 $227 $233 $238 $231
$205 $204 $208 $207 $212 $213 $207 $213
$192 $196 $192 $189 $196
$200 $185 $178 $174 $170 $173 $179
$165 $167
$148
$135

$100

$0
Feb 8, 2021

Jun 30, 2021

Sep 30, 2021

Nov 30, 2021

Dec 31, 2022

Jan 31, 2022

Mar 31, 2022

Apr 30, 2022

May 31, 2022

Jun 13, 2022

Jun 30, 2022

Jul 15, 2022

Aug 5, 2022

Sep 23, 2022

Oct 28, 2022

Nov 25, 2022

Dec 30, 2022

Jan 20, 2023

Feb17, 2023

Mar 31, 2023

Apr 28, 2023

May 19, 2023

Jun 2, 2023

Jun 30, 2023

Jul 21, 2023

Aug 3, 2023

Sep 1, 2023

Sep 29, 2023

Oct 6, 2023

Oct 13, 2023

Nov 3, 2023

Nov 24, 2023

Dec 1, 2023

Dec 8, 2023

Dec 15, 2023

Dec 29, 2023

Jan 11, 2024

Jan 19, 2024

Source: CapitalIQ. Biotechs are defined as any therapeutics company without an approved product on any global stock exchange. 15
 China Biotechs Have Been Hit Hard
Thus Far in 2024. U.S. Biotech is Flat
Aggregate Value Change of Biotech by Country, Dec 30, 2023 to Jan 19,
2024

U.S. market flat for year 9.1%

8.0%
Chinese stock rout accelerates as foreign
investors sell out
Hudson Locket and Joe Leahy, FT, Jan 18, 2024 (excerpt)
-0.9%
-3.0%
-5.1% -4.6% -4.4% -4.3%
-5.7% -5.3% A punishing sell-off for Chinese equities has worsened
-8.1%
in recent days, as international investors who bet on a
-11.3%
-12.8% rebound lose faith that economic stimulus from Beijing
-16.4% is on the way. The Hang Seng China Enterprises index, a
closely followed gauge of large Chinese listings in Hong
Kong, has dropped about 11 per cent so far this month
Extraordinarily, China biotech has lost a third of its value in the first three weeks of 2024. after losing 14 per cent last year. The benchmark CSI
300 index for domestically traded stocks has shed more
-32.9% than 5 per cent, after taking into account the renminbi’s
depreciation against the dollar. International investors
“just threw in the towel” after a speech by Premier Li
China

South Korea

Sweden

Japan

Switzerland

Israel

Taiwan

France

Canada

Australia

Germany

United Kingdom

United States

Norway

Denmark
Qiang at Davos on Tuesday lacked any hint of new
government measures to boost the economy or financial
markets, said the head of trading at one investment
bank in Hong Kong.
Source: CapitalIQ. Biotechs are defined as any therapeutics company without an approved product on any global stock exchange. China story: https://www.ft.com/content/35fba64d-3720-4eb9-ae19-82a173409c68 16
Global Biotech 2024 Top Decliner List Heavy With China Names
Top Ten Biotech Decliners by Value YTD
Top Ten Decliners by Drop in Enterprise Value from Dec 30, 2023 to Jan 19, 2024 ($ millions)
Value Drop
Percent Drop Enterprise Value (Jan
Company HQ Country YTD Comment
YTD 19, 2024, $ Millions)
($ Millions)
RemeGen China -$1,164 -29.22% $2,821 False online rumors. China stocks weak.

ImmunityBio US -$939 -24.18% $2,943 Transaction with Oberland ahead of FDA news.

Keymed Biosciences China -$614 -44.69% $759 Big selloff of China stocks.

Denali Therapeutics US -$604 -31.74% $1,299 No specific news.

Akeso China -$537 -11.51% $4,129 Big selloff of China stocks. No other news.

Gyre Therapeutics US / China -$536 -27.53% $1,410 Big selloff of China stocks.

Intellia Therapeutics US -$442 -23.83% $1,414 Cutting staff. Narrowing pipeline.

Neumora US -$428 -20.46% $1,663 No specific news.

Moonlake Switzerland -$411 -12.90% $2,778 No specific news.

BioArctic Sweden -$397 -17.38% $1,886 EMA going to convene adcomm for lecanemab

Source: CapitalIQ. Biotechs are defined as any therapeutics company without an approved product on any global stock exchange.
17
Global Biotech 2024 Top Ten Gainer List
Top Ten Biotech Decliners by Value YTD
Top Ten Gainers by Increase in Enterprise Value from Dec 30, 2023 to Jan 19, 2024 ($ millions)
Value Gain
Percent Gain Enterprise Value (Jan
Company HQ Country YTD Comment
YTD 19, 2024, $ Millions)
($ Millions)
Arrowhead Pharma United States $871 26.48% $4,162 Strong analyst support

Ambrx Biopharma United States $848 123.87% $1,532 Acquisition by J&J

Zealand Pharma Denmark $810 26.87% $3,823 Buyout rumors. Hedge funds registering

Longboard Pharma United States $742 840.07% $831 Positive epilepsy data

Summit Therapeutics United States $701 40.35% $2,438 Positive Phase 2 data

NewAmsterdam Pharma Netherlands $686 136.88% $1,187 Released timing of data readouts

Keros Therapeutics United States $608 66.29% $1,526 New drug for treating obesity revealed

IDEAYA Biosciences United States $602 33.75% $2,387 Analyst upgrades

Dyne Therapeutics United States $451 65.62% $1,137 Positive DM1 data

Merus Netherlands $432 37.47% $1,586 New HNSCC Data

Source: CapitalIQ. Biotechs are defined as any therapeutics company without an approved product on any global stock exchange. 18
Valuations for Preclinical Companies Dropping Most In
First Three Weeks of 2024
Average Enterprise Value of a Biotech Listed on U.S. Exchanges by Stage of Development, Jan 6, 2023 to Jan 19,
2024 ($ Millions)
Jan 6, 2023 Sep 1, 2023 Oct 27, 2023 Dec 30, 2023 Jan 19, 2024

$1,200
$1,122 $1,123

$1,000

$800 With interest rates

creeping up, investors are
starting to penalize $663
companies that are far $588
$600 from an FDA approval. $552

$435 $412
$400 $334
$303 $309
$248 $270
$230
$202
$200 $131 $153
$128 $125 $113
$73

$-
Preclinical Phase 1 Phase 2 Phase 3
Stage of Development

19
Obesity Biotechs Gaining Value in First Weeks of 2024 While
Alzheimer’s, B-Cell, Vaccines and AI Dropping A Bit of Value
Average Enterprise Value of U.S. Biotechs by Primary Field, June 30, 2023 to Jan 19, 2024
Jun 30, 2023 Dec 30, 2023 Jan 19, 2024

$2,500

$2,000

$1,500

$1,000

$500

$0
Pain

Hospital

Immune - Other

Virology

Infection

Immune - Innate

Ophthalmology

China

Immune - T-Cell

Dermatology

Oncology - Small molecules

Endocrinology

Gene therapy

Gene Editing

Oncology - Biologics

Rare

Oncology - ADC

RNAi

Hematology

Nephrology

Hepatology

Fibrosis

Protein Degradation

Rare disease

Alzheimers

Allergy

Oncology - Precision

Neuro

AI

Vaccines

Oncology - Radio

Immune - B-Cell

Obesity

Cardiovascular
-$500

Source: CapitalIQ and Stifel analysis. Biotechs are defined as any therapeutics company without an approved product on any global stock exchange.
20
Where Has the Pharma Market Done Best So Far in 2024?
India pharma and big pharma are having a good year and are even ahead of the tech heavy Nasdaq 100 Index (although behind the smoking
hot semiconductor market). In contrast China pharma, U.S. specialty pharma and Europe pharma are performing relatively poorly.

Group Equal-Weighted Share Price Return, Dec 30, 2023 to Jan 19, 2024

9.8%

5.3%
2.9% 3.6%
2.3%
0.9%

-1.7% -1.7% -1.1%

-2.7% -2.5%
-4.2%
-6.7%

-12.4%
China Pharma

U.S. Specialty Pharma

Europe Pharma

Large/Mid Biotech

XBI

Large/Mid Commercial Pharma

Small Cap Biotech

Japan Pharma

Russell 3000

XLV

Nasdaq 100

Big Pharma

India Pharma

S&P Semiconductor
Notes: These data are from S&P CapitalIQ and are compiled into equal-weighted indices. Big pharma includes PFE, LLY, MRK, ABBV, NOVO B, ROG, JNJ, AMGN, AZN, NOVN and SAN. China Pharma includes 600276, 1093, 2186, BGNE, 000963, 600196, 000538, 600518, 002422, 000597, 3692 and
ZLAB. India Pharma includes SUNPHARMA, 500257, AUROPHARMA, CIPLA, MANKIND, GLENMARK, 500124, ZYDUSLIFE. Europe Pharma includes Merck KGAA, IPN, HLUN A, BAYN, REC, SOBI, ALM, FRE, ORNBV, UCB, GRF. Japan Pharma includes Takeda, Daiichi-Sankyo, Chugai, Astellas, Eisai. Otsuka
Holdings, Shionogi, Ono, Kyowa Kirin, Nippon Shinyaku, Santen and Sumitomo Pharma. Large / midcap commercial pharma includes VRTX, ARGX, ALNY, BMRN, INCY, NBIX, OGN, IONS, EXEL, ALKS, ITCI, HRMY, INDV, BPMC, MRTX, SAGE, IDIA, APLS. US specialty pharma includes SUPN, EGRX, CPRX,
PCRX, IRWD, JAZZ, COLL, BHC, BLCO, ARQT, HLS, ASRT, OPTN, GTHX, ANIK, HROW, PHAT, ESPR, CALTX, AMARIN, OPK, LQDA, RIGL, EYPT, MRNS, ALIM, TRVN. Large / MidCap biotech includes KRTX, MDGL, CERE, CYTK, ARWR, PCVX, DNLI, VIR, CRSP, PRTA, BEAM, AKRO, IMVT, VRNA, VTYX, SWTX, SNDX
and Small Cap biotech includes LCTX, GLSI, GRPH, CYDY, OMER, SVRA, THRD, EVLO, TCRT, CMRX, TSHA, DTIL, OVID, TNYA, VXRT, CUE, XFOR, ATHA, TRVI, CTXR, SELB, CRMD, MTNB, AKBA.
21
Large Cap Life Sciences Performance Year to Date
Ten of the top eleven large cap performers so far in 2024 are large pharma. While there are some laggards, big pharma as a group has
attracted buyers and is performing nicely relative to 2023.

YTD Share Return for Top 30 Life Sciences Companies by Value

11.1% Pharma
9.1% Medical Devices & Equipment
7.8% 7.8%
7.3% 7.1% 7.1% 6.9% 6.9%
6.3% 6.3% Life Science Tools
5.4% 5.2% 5.0%
4.2% 3.9%
3.2% 3.2% 3.1%

-0.1% -0.1%
-1.4% -1.8%
-2.3% -2.6% -2.7%
-3.1% -3.3%
-4.6%
-5.2%
Intuitive Surgical

Merck

Lilly

Gilead

GSK

Daiichi Sankyo

Novartis

Vertex

Amgen

AbbVie

Regeneron

Boston Scientific

Stryker

Medtronic

Abbott

Thermo Fisher

Novo Nordisk

J&J

Sanofi

Merck KGaA

Danaher

AstraZeneca

Pfizer

BMS

CSL

Siemens Healthineers

Roche

Becton, Dickinson

Zoetis

Bayer
22
Number of Negative Enterprise Value Life Sciences Companies
Rose to 171 in Last Week
The count of negative EV life sciences
companies worldwide rose from 151 a
week ago to 171 last Friday.

This is quite a sharp rebound and is

consistent with investor concerns about
the value of early-stage companies in a
rising rate environment.

Source: CapitalIQ
23
Life Sciences Sector Value Dropped 1.4% Last Week
Last week saw a 1.4% decrease in life sciences stocks worldwide. The sector lost $133 billion in value.

Change in Last
Firm Enterprise Value Change in Last Week Month Change in Last Year
Sector Count (Jan 19, 2024, $millions) (percent) (percent) (percent)
API 81 $81,808 -3.7% -3.1% -4.6%

Biotech 804 $231,263 -2.9% 6.4% -5.1%

CDMO 40 $142,227 -2.0% 2.0% -27.8%

Diagnostics 82 $269,582 -2.0% -2.7% 1.1%

OTC 30 $27,684 -3.0% -0.7% -8.2%

Pharma 723 $5,984,700 -1.6% 3.2% 2.7%

Services 39 $193,698 -0.5% -5.4% -13.4%

Tools 51 $677,666 0.5% -0.5% -14.0%

Devices 181 $1,655,139 -0.7% 2.4% 2.1%

HCIT 11 $21,498 -0.2% -3.5% -28.7%

Total 2042 $9,281,767 -1.4% 2.4% 0.1%

Source: CapitalIQ
24
Life Sciences Revenue Multiples Increasing
The largest sectors are commercial pharma and medical devices. Revenue multiples are up in both over the last four months. Tools multiples
are up substantially. In contrast, CDMO and diagnostics multiples have continued to drop.

Average Revenue Multiples by Subsector of the Global Life Sciences Sector, Feb 2021 to Jan 2024
Feb 11, 2021 (peak) Jul 29, 2022 Jun 30, 2023 Sep 1, 2023 Jan 19, 2024

22.0X

14.1X

11.5X11.2X
11.1X 10.9X
10.7X
10.0X 10.1X 9.9X
9.7X 9.4X
9.1X 9.0X 8.8X
7.8X 7.6X
7.2X 6.9X
6.8X 6.8X 6.6X
6.1X 6.3X
5.8X 5.7X
5.6X 5.4X 5.4X 5.7X 5.7X
5.1X
4.7X 4.6X 4.8X 5.0X 4.9X 4.8X 4.7X
4.5X 4.2X 4.4X
3.4X 3.4X 3.3X

CDMO (N=36) OTC (N=28) Diagnostics (N=72) Devices (N=177) Tools (N=48) Commercial Pharma (N=653) API (N=78) Pharma Services (N=38) HCIT (N=11)

Source: CapitalIQ
25
Capital Markets Update

26
 Volume ($ millions)

2000

1000
3500

0
500
2500
3000
4000

1500
5/30/2020
6/20/2020
7/11/2020
8/1/2020
8/22/2020
9/13/2020
10/5/2020
10/25/2020
11/15/2020
12/5/2020
12/26/2020

Source: Data from CapitalIQ and Stifel research.

1/16/2021
2/6/2021
, 2020 to 2021

2/27/2021
3/19/2021
4/11/2021
5/22/2021
6/12/2021
7/3/2021
7/24/2021
8/14/2021
9/5/2021
9/26/2021
10/16/2021
11/7/2021
11/28/2021
12/18/2021
1/9/2022
1/29/2022
2/18/2022
3/11/2022
4/2/2022
4/23/2022
Week Ended

5/13/2022
6/3/2022
6/24/2022
7/16/2022
8/6/2022
8/27/2022
9/19/2022
10/8/2022
10/29/2022
11/19/2022
12/9/2022
12/31/2022
1/20/2023
2/10/2023
Biopharma IPO Volume ($ million), Weekly, May 2020 to January 2024

3/3/2023
3/25/2023
4/15/2023
5/5/2023
5/26/2023
6/16/2023
7/7.2023
7/28/2023
8/18/2023
9/8/2023
9/29/2023
10/20/2023
No Biopharma Initial Public Offerings in Last Nine Weeks
While the IPO backlog has been filling up, we have not seen a biopharma go public anywhere in the world since early November of 2023.

11/10/2023
12/1/20223
12/22/2023
Rare to see IPO market completely flat.
1/13/2024
27
Dual Track Processes Popular in 2024
Annalee Armstrong, Gabrielle Masson, FierceBiotech, Jan 17, 2024 (excerpt)

Biotech executives are reaching into a deep bag of tricks to Carmot Therapeutics used a dual-track process this fall,
come up with the best possible ways to live up to their ultimately selling off to Roche for $2.7 billion in
ultimate potential. The dual-track option, where a company December. CEO Heather Turner confirmed that the
pursues both an IPO and an acquisition, is becoming not just biotech had been considering an IPO at the same time.
the norm, but a necessity.
A company can’t just turn up on Wall Street and start an
Some are taking it a step further, many industry experts told initial public offering, so this dual-track process means
Fierce Biotech on the sidelines of the J.P. Morgan Healthcare a lot of time, energy and money spent for an option that
Conference last week. “There are three tracks. We have clients ultimately might never happen.
that are pursuing IPO funding, or licensing or M&A. And it's
really which will come together first,” said Randy Sunberg, “It is resource intensive, obviously. And you also don't
chair of the North America Healthcare & Life Sciences Group, want to bet on two tracks and not be able to deliver on
and partner in the transactions group for Baker & Mckenzie. either,” said Mubadala Capital investor Ayman
AlAbdallah.
It’s all part of a frenzied biotech market coming down from a
prolonged bear market. Executives are keeping their options Sharon Flanagan, San Francisco managing partner for
open and are more prepared to change plans at a moment’s Sidley, said that companies have to hire lawyers, and
notice. auditors and bankers to work on the listing.

Source: https://www.fiercebiotech.com/biotech/biotech-dealmakers-its-everything-everywhere-all-once 28
Close to $1 Billion in Follow-On Volume Last Week
Biopharma Sector IPO Activity by Month, 2020 to 2021
We continue to have a very active follow-on market this January with nearly $1 billion in issuance getting done last week. The pace of issuance
activity this month has not been seen since Q3 of 2022.

Biopharma Equity Follow-On Volume ($ million), Weekly, May 2020 to January 2024
Weekly Dollar Volume Two Month Trailing Moving Average

12000

10000

8000
Volume ($ millions)

6000

4000

2000

12/1/20223
3/25/2023
12/31/2022
3/5/2021
5/30/2020

5/22/2021

5/19/2023
6/16/2023
2/25/2022
8/22/2020

10/19/2020

12/12/2020

4/5/2021

9/12/2022

2/24/2023

4/22/2023

9/8/2023
7/14/2023

10/6/2023
10/3/2023
1/9/2021

7/17/2021

10/9/2021

6/17/2022
7/16/2022
6/27/2020

8/14/2021

1/2/2022

3/25/2022
4/23/2022

8/13/2022

11/5/2022
12/2/2022
7/25/2020

11/15/2020

11/7/2021

1/29/2022
9/20/2020

2/6/2021

9/12/2021

12/4/2021

10/8/2022
6/19/2021

5/20/2022

1/27/2023

8/11/2023

12/29/2023
Week Ended

Source: Data from CapitalIQ and Stifel research. 29

Biopharma Offerings Over Half of All U.S. Equity Issuance
So Far in 2024
If one looks at the total U.S. equity IPO and follow-on market (excluding PIPEs), 2024 has been an exceptional year for biopharma. The
biopharma sector has accounted for 55% of total issuance by deal count and 37% of issuance by dollar volume. This is unprecedented.

Percent of All IPOs and Follow-Ons on U.S. Exchanges that are Percent of All IPOs and Follow-On Dollar Volume on U.S.
Biopharma, 2014 to 2024 Exchanges that is from Biopharma Offerings, 2014 to 2024

55% 37%

39%
35% 24%
34%

28% 19%
26% 17%
23% 24%
15%
13% 13%
19% 13%
15% 14%
8%
5% 5%

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: Data from CapitalIQ and Stifel research. PIPEs excluded. Only offerings of $50 or more are considered in this analysis. 30
Last Week Slow for Venture Privates
Biopharma Sector IPO Activity by Month, 2020 to 2021
We saw $401 million of venture privates last week. The last two weeks have been much slower than the first week of the year which was a
barnburner for deal volume.

Biopharma Venture Equity Privates Trend ($ million), Weekly, May 2020 to January 2024
Weekly Dollar Volume Two Month Moving Average

5000

4500

4000

3500
Volume ($ millions)

3000

2500

2000

1500

1000

500

0
10/9/2021
8/22/2020

11/15/2020

7/17/2021
8/14/2021

5/19/2023
6/16/2023
5/30/2020

3/5/2021

2/25/2022
4/5/2021
5/22/2021

6/17/2022
7/16/2022

2/24/2023

4/22/2023
1/9/2021

1/2/2022
6/27/2020

3/25/2022
4/23/2022

8/13/2022

3/25/2023

9/8/2023
7/14/2023

10/6/2023
10/3/2023
12/1/20223
10/19/2020

12/12/2020

10/8/2022
11/5/2022
12/2/2022
12/31/2022
7/25/2020

9/20/2020

2/6/2021

9/12/2021

11/7/2021

1/29/2022
6/19/2021

9/12/2022
12/4/2021

5/20/2022

1/27/2023

8/11/2023

12/29/2023
Week Ended

Source: Data from CapitalIQ, Crunchbase. 31

Tr1X, Inc. Announces $75 Million Series A Financing to Develop Best-in-Class
Universal Allogeneic Regulatory T (Treg) and CAR-Treg Cell Therapies
SAN DIEGO, Jan. 17, 2024 /PRNewswire/ -- Tr1X, Inc. today announced its emergence from stealth with a $75
million Series A financing to bring universal allogeneic regulatory T (Treg) and CAR-Treg cell therapies to the clinic to
treat and potentially cure autoimmune and inflammatory diseases. The financing was led by Bay Area-based The
Column Group, with participation from NEVA SGR and Alexandria Ventures. The Company appointed William Lis Chief
Executive Officer, strengthened its leadership team with other biopharma industry veterans, and announced
members of the Board of Directors and Scientific Advisory Board.

"We are thrilled to partner with Bill Lis, Maria Grazia Roncarolo and Tr1X's world-class team to revolutionize the field
through its innovative, breakthrough science," said Leon Chen, Ph.D., MBA, Partner at The Column Group and Tr1X "The ability to develop a pipeline of medicines
Board Member. "With its experienced management team at the helm, we are confident in Tr1X's ability to bring based on our work on regulatory T cells
curative cell therapies to patients who currently require life-long treatment and management." represents the culmination of decades of
discovery and research into the underpinnings
Science and Pipeline of immunological tolerance and autoimmunity,
Tr1 cells have unique properties and represent
The Company's science is primarily based on the work of Tr1X's Scientific Founder Maria Grazia Roncarolo, M.D., the the ideal therapeutic platform from which to
discoverer of Type 1 regulatory T (Tr1) cells, which have features that can benefit patients with autoimmune and develop 'immune reset' products. Our two
inflammatory diseases. Tr1 cells, a differentiated subpopulation of regulatory T cells, are crucial for maintaining platforms have the required attributes to
homeostasis and tolerance in healthy individuals and have several important functions. These include dampening of address a broad set of indications, including
local inflammation and downregulation of the inflammasome, suppression of pathogenic effector T cell responses, dual targeting of pathogenic T and B cells.
and induction of long-term tolerance as observed in preclinical models and patients. These engineered cells have the potential to
induce tolerance, which could transform the
Tr1X's proprietary technology enables the conversion of CD4+ T cells isolated from healthy donors into Treg-like cells lives of people living with chronic autoimmune
that have a similar function and profile to naturally occurring Tr1 cells. These cells can be further engineered to target diseases by providing them with a cure instead
specific tissues or organs to enable local, targeted immunomodulation. With a proprietary, GMP-grade, closed-loop of ongoing treatment."
system that provides consistency, quality and reliability at scale, Tr1X can enable production of its products at
commercial volume. Maria Grazia Roncarolo, MD
Source: https://www.prnewswire.com/news-releases/tr1x-inc-announces-75-million-series-a-financing-to-develop-best-in-class-universal-allogeneic-
Co-Founder and Head of R&D
32
regulatory-t-treg-and-car-treg-cell-therapies-to-treat-and-potentially-cure-autoimmune-and-inflammatory-diseases-302036679.html Tr1X Bio
Ratio Therapeutics Announces $50M Series B Financing to Advance
Targeted Radiotherapies for Cancer Treatment
BOSTON, Jan. 17, 2024 /PRNewswire/ -- Ratio Therapeutics Inc. (Ratio), a pharmaceutical
company that employs a suite of innovative technologies to develop best-in-class
radiopharmaceuticals for the treatment and monitoring of cancers, today announces the close
of its $50M Series B financing, bringing the total raised to date to over $90 million. The latest
round witnessed continued participation from Series A leads Schusterman and Duquesne and
welcomed among others PagsGroup, Bristol Myers Squibb and the Center for Technology
"This funding advances Ratio's technology
Licensing at Cornell University. platforms and will help launch clinical trials for
our FAP-targeted radiotherapeutic which aims
This financing will expand the applications of the company's proprietary technology platforms, to treat a broad array of solid-tumor cancers.
Trillium™ and Macropa™, to develop novel best in class fit-for-purpose radiopharmaceuticals. We are grateful to our investors for their
confidence in our technology. We have filed two
Additionally, the funding will drive the clinical development of the company's fibroblast
INDs and completed enrollment in both
activation protein-alpha (FAP) targeted radiopharmaceutical therapeutic. radiation dosimetry studies in support of two of
our corporate partnerships. Now we have the
"The FAP-targeted therapeutic program has the potential to provide much needed treatment to backing to move our first therapeutic candidate
patients with multiple types of cancer," said Dr. Mey Boukenna of PagsGroup, the Boston- into clinical trials by the end of this year."
based family office of Stephen Pagliuca. "With Ratio's unique assets and technology, and Drs. Jack Hoppin
Babich and Hoppin standing as pioneers in the radiopharmaceutical field, we believe they are Chief Executive Officer
very well positioned to advance novel radiopharmaceutical cancer treatments and diagnostics Ratio Therapeutics
into the clinic."

Source: https://www.prnewswire.com/news-releases/ratio-therapeutics-announces-50m-series-b-financing-to-advance-targeted-radiotherapies-for-cancer- 33
treatment-302036375.html
Run Rate of $100MM+ Venture Privates Continues to
Drop in 2024
It’s early days but it looks like the count of large venture deals is going to drop again in 2024. There hasn’t been a deal for $100mm or more
since January 6th.

Count of Biopharma Venture Deals of $100 Million or More, 2013 to 2024

150

94

78

56
52
48 48

22
15 15
3 5

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (run rate)

Source: DealForma and Stifel analysis.

34
17% of $100mm+ Venture Deals Done by ex-U.S. Issuers
in 2023. Down from 52% in 2016
Larger venture privates are more likely to be done in the U.S. than ever before. Both Europe and China saw a significant drop-off in large
venture financings in 2023. The U.S. venture ecosystem appears to be getting more powerful on a relative basis over time.

Country of Origin of Biopharma Venture Deals of $100 Million or More, 2013 to 2024
US China Europe Other
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Source: DealForma and Stifel analysis.

35
Mirae Launches U.S. Biotech Venture Fund
Brian Gormley, Wall Street Journal, Jan 18, 2024 (excerpt)
A South Korean financial giant has launched a U.S.-based biotechnology venture
fund in an effort to participate in more of the top deals in the industry.

Mirae Asset Financial Group, which has $535 billion in assets under management,
has launched its first U.S.-based biotech venture-capital fund, a $50 million pool
the firm expects will be the first of a series of venture funds targeting U.S. life
sciences startups, said Dr. Naveen Krishnan, a managing director who heads the
new investment group, Mirae Asset Capital Life Science.

Biotech venture financing has slipped from heights reached during the pandemic,
as a slowdown in initial public offerings has forced venture firms to make
additional investments in existing portfolio companies.

Mirae Asset Financial, founded in 1997, has businesses spanning sectors

including investment banking, insurance, venture capital and public-market funds. Mirae is a giant and highly
As a result, startups initially backed through the new biotech venture pool could successful Korean asset manager.
have a source of funding over the long term by also raising capital from other Mirae
funds, Krishnan said.
Source: https://www.wsj.com/articles/korean-asset-manager-mirae-launches-u-s-biotech-venture-fund-2043287e 36
Novo Holdings Plans to Ramp up
Dealmaking
Nick Paul Taylor, FierceBiotech, Jan 19, 2024 (excerpt)
Novo Holdings is fattening up as patients slim down. Boosted by the Wegovy windfall, the fund manager's CEO Kasim Kutay expects to
do “a fair amount” more deals in 2024 and to open a second office in Asia.

Speaking to Bloomberg TV in Davos, Kutay outlined how the success of Novo Nordisk, one of two Novo Holdings operating companies,
will affect his activities in 2024 and beyond. The operating companies are providing “significant dividends” that Novo Holdings will use
to execute a strategy that calls for half of its money to go into life sciences.

A buyout team will use some of the money. The unit, called the principal investment team, does “a fair amount of buyout activity in the
life sciences and healthcare sector,” Kutay said, and there will be more to come as the GLP-1 money flows into Novo Holdings.

“We did a couple of them last year. We anticipate doing a fair amount more in 2024, and indeed going forward because the cash flows
that are coming our way are going to be obviously quite significant, if you look at the forecasts in terms of how the GLP-1 class is going
to be doing in the coming years,” Kutay said.

Kutay sees “a lot of activity” in the biotech venture space, although the reasons for the hubbub over the past 12 months is more
positive for the investors providing the money than the drug developers seeking it out.

“We actually had a very active year, because we found valuations very attractive. The biotech sector took a bit of a hammering starting
in about late ‘21, so we found ‘23 an interesting, very interesting, time to take advantage of that,” Kutay told Bloomberg TV.

Source: https://www.fiercebiotech.com/biotech/novo-holdings-plans-ramp-dealmaking-amid-wegovy-windfall 37
 Volume ($ millions)

500
1500

0
2000

1000
2500
8/1/2020
8/22/2020
9/13/2020
10/5/2020
10/25/2020
11/15/2020
12/5/2020
12/26/2020

Source: Data from CapitalIQ, Crunchbase.

1/16/2021
2/6/2021
2/27/2021
3/19/2021
4/11/2021
5/22/2021
6/12/2021
7/3/2021
7/24/2021
8/14/2021
9/5/2021
9/26/2021
10/16/2021
11/7/2021
11/28/2021
12/18/2021
1/9/2022
1/29/2022
Weekly Volume

2/18/2022
3/11/2022
4/2/2022
4/23/2022
5/13/2022
6/3/2022
Week Ended

6/24/2022
7/16/2022
8/6/2022
8/27/2022
9/19/2022
Two Month Moving Average

10/8/2022
10/29/2022
11/19/2022
12/9/2022
12/31/2022
1/20/2023
2/10/2023
3/3/2023
3/25/2023
Biopharma Private Debt Issuance Trend ($ million), Weekly, Aug 2020 to January 2024

4/15/2023
5/5/2023
5/26/2023
6/16/2023
7/7.2023
7/28/2023
8/18/2023
9/8/2023
Biopharma Sector IPO Activity by Month, 2020 to 2021

9/29/2023
10/20/2023
Last week saw several large debt and royalty deals get done led by BridgeBio’s $500 million synthetic royalty monetization transaction.

11/10/2023
Weekly Global Biopharma Private Debt Placement Market Open in December

12/1/20223
12/22/2023
1/13/2024
38
BridgeBio Secures Up to $1.25B in Financing,
Prepares for Potential Product Launch
Tyler Patchen, Biospace, Jan 19, 2024 (excerpt)

BridgeBio is getting a major financial shot in the arm as it prepares to potentially take one of its products to
market. On Thursday, the biotech announced that it secured funding from Blue Owl Capital and the Canada This seems like a mutually
Pension Plan Investment Board via its subsidiary CPPIB Credit Investment, bringing BridgeBio’s capital to a total of beneficial deal. BridgeBio
$1.25 billion. sold a capped 5% synthetic
The financing comes as the company anticipates the launch of its drug acoramidis to treat transthyretin amyloid royalty on a single product
cardiomyopathy (ATTR-CM). If the drug is approved by the FDA, it will compete with Pfizer’s Vynamax and for $500 million.
Vyndaquel—the only ATTR-CM drugs currently available.

“Our newly strengthened balance sheet will enable us to serve ATTR-CM patients with a well-resourced launch of Blue Owl and CPPIB are able
acoramidis, as well as patients with genetic diseases more broadly with multiple Phase II readouts for blockbuster to put a significant amount
indications anticipated over the next few years,” BridgeBio CFO Brian Stephenson saidin a statement. of money to work in a
The deal with Blue Owl and CPPIB Credit includes a $500 million cash payment—$300 million from Blue Owl and relatively low risk deal with
$200 million from CPPIB—to BridgeBio should the FDA approve acoramidis, in exchange for royalties of 5% on net a double digit return profile.
sales globally for the drug. The royalty payments are capped at 1.9 times the invested capital.

Additional funds of up to $300 million can be provided at BridgeBio and Blue Owl’s mutual consent to “support
strategic corporate development activities.”

Sandip Agarwala, managing director at Blue Owl Capital, said in a statement that acoramidis “has demonstrated
an impressive and differentiated clinical profile, and we believe it will be an important advancement in treating
ATTR-CM.”

Source: https://www.biospace.com/article/bridgebio-secures-1-25b-in-financing-prepares-for-potential-product-launch/ 39
Deals Update

40
 Volume ($ millions)

10000
25000

5000
15000
40000
50000

20000

0
30000
45000

35000
5/30/2020
6/20/2020

Source: S&P, CapitalIQ

7/11/2020
8/1/2020
8/22/2020
9/13/2020
10/5/2020
10/25/2020
11/15/2020
12/5/2020
12/26/2020
1/16/2021
2/6/2021
2/27/2021
3/19/2021
4/11/2021
5/22/2021
6/12/2021
7/3/2021
7/24/2021
8/14/2021
9/5/2021
9/26/2021
10/16/2021
11/7/2021
11/28/2021
12/18/2021
1/9/2022
Weekly Dollar Volume

1/29/2022
2/18/2022
3/11/2022
4/2/2022
Week Ended

4/23/2022
5/13/2022
6/3/2022
6/24/2022
7/16/2022
M&A Market Slowed Down Last Week

8/6/2022
8/27/2022
9/19/2022
Two Month Moving Average

10/8/2022
10/29/2022
11/19/2022
12/9/2022
12/31/2022
1/20/2023
Biopharma M&A Volume Trend ($ million), Weekly, May 2020 to January 2024

2/10/2023
3/3/2023
3/25/2023
4/15/2023
5/5/2023
5/26/2023
6/16/2023
7/7.2023
7/28/2023
8/18/2023
9/8/2023
9/29/2023
10/20/2023
11/10/2023
12/1/20223
63% stake in Chongqing Duoputai Pharmaceutical Technology Co for $62 million. The Taiwanese firm Bora Pharma acquired Upsher-Smith.

12/22/2023
After a strong week for M&A at #JPM24, the market slowed down last week. In China, Xi'an Beilin Pharmaceutical Co., Ltd. agreed to acquire a

1/13/2024
41
Private Equity Predicts Deal Rebound as Sellers
Capitulate on Prices
Arash Massoudi, Anne-Sylvaine Chassany and Antoine Gara, Financial Times, Jan 19, 2024 (excerpt)
Private equity executives are predicting a sharp increase in takeover activity as buyout firms that have held on to investments in the hope of higher
prices finally begin to capitulate.

There has been a marked drop in private equity groups selling portfolio companies since a peak in 2021, as rising interest rates have made financing
more difficult and hurt valuations.

Investors in buyout funds have begun to increase pressure on groups to sell long-held investments and start returning cash, however, forcing them to
reckon with lower prices and lock in returns.“

Sellers have conceded to lower valuations and the pressure to meet a certain return on investment is ticking,” Pete Stavros, co-head of global private
equity at KKR, told the Financial Times at the World Economic Forum in Davos.

Firms entered the new year sitting on a record $2.8tn in investments, creating what consultancy Bain & Co last year called “a towering backlog” of
potential sales. Many private equity investors have begun to demand cash returns before they commit to new funds, increasing the urgency of asset
sales.

“For the last 24 months, there has been a disconnect on valuation expectation between buyers and sellers. There is now a real sense of pragmatism
setting in,” said Anna Skoglund, who leads the European financial and strategic investors group at Goldman Sachs.

Last year, Veritas Capital, the private equity owner of healthcare software company Cotiviti, agreed to sell a 50 per cent stake to Carlyle in a deal that
valued the business at up to $13bn before the transaction collapsed. In December, the FT reported KKR was now in talks at an $11bn valuation.
Source: https://www.ft.com/content/abea759d-3556-43f1-905f-26aeb30c18dc 42
Advanced Medicine Partners Launches to Set New
Standard for Manufacturing and Testing Advanced
Medicines
Press Release, Durham NC, Jan 17, 2024 (excerpt)
Advanced Medicine Partners, an organization that delivers process development, manufacturing, analytical development and testing
This is the latest in a
for advanced therapy products, today announced its launch from Jaguar Gene Therapy with funding led by Deerfield Management series of pharma
Company, with additional investors including ARCH Venture Partners, Nolan Capital and others. The newly independent company is services spinouts
helmed by a team of experts who were directly responsible for the CMC efforts for numerous commercially available therapeutics
including three globally approved gene therapies. The organization will continue to lead CMC efforts for Jaguar Gene Therapy’s
from gene therapy
pipeline programs, will support CMC work for Deerfield academic projects and private portfolio companies, and has initiated work for and cell therapy
several biotech and pharmaceutical clients. companies.
Advanced Medicine Partners has a proprietary and proven development platform and has established a robust and reproducible
adeno-associated virus (AAV) manufacturing process, which is among the most productive in the industry and consistently generates
industry-leading functional full capsid ratios. Advanced Medicine Partners’ process has been used with multiple genes of interest as
well as multiple wild-type AAV serotypes and engineered capsids. This manufacturing process prioritizes patient safety while reducing
cost of goods and will strive to set the standard for what regulatory agencies expect and patients deserve. The company has also
developed a suite of platform analytical methods that can be licensed and offers assay development services.

Advanced Medicine Partners brings extensive operational experience from Jaguar Gene Therapy and other biotechnology companies,
including AveXis, Novartis and Amgen. The Advanced Medicine Partners team has manufactured upwards of 350 total non-GMP
batches and supplied over 20 preclinical studies, including IND-enabling efficacy and good laboratory practice (GLP) toxicology
studies, as part of Jaguar. In addition to Advanced Medicine Partners’ manufacturing and analytical testing capabilities, the company
offers GMP tech transfer capabilities and virtual CMC support.

Advanced Medicine Partners currently operates with more than 33,000 square feet of lab, office and warehouse space in Cary and
Durham, North Carolina. The company is in the process of building out a 174,000-square-foot GMP manufacturing facility in Durham.
Advanced Medicine Partners has the ability to build dedicated capacity for partnered companies in this new facility.
Source: https://www.businesswire.com/news/home/20240117676350/en/Advanced-Medicine-Partners-Launches-to-Set-New-Standard-for-Manufacturing-and-Testing- 43
Advanced-Medicines
LEK Analysis: Last Year Saw a Record Number of large Pharma
M&A Deals by Dollar Volume (if Transformational Deals Left Out)
LEK, “Optimizing Pharmaceutical Portfolios Through M&A,” Jan 16, 2024
Analyzing these figures when excluding transformational M&A, defined as transactions exceeding $25 billion in A detailed analysis of the
equity value and surpassing 20% of the acquirer’s market capitalization, the past year stands out as one of the most acquirer ecosystem reveals
active in the past decade. This surge in recent M&A activity is likely attributable to an improvement in the that the top 15 acquirers have
macroeconomic environment and the pressures resulting from imminent drug pricing negotiations impacting pharma been particularly active,
revenue covered by CMS Part D. responsible for approximately
80% of the total roughly $1
trillion transaction value since
2010. These top acquirers
have completed on average
five acquisitions since 2010.
Impressively, their M&A
activities have significantly
ramped up in the past five
years, with an average annual
M&A investment of $6 billion
since 2019. This marks a
substantial increase, doubling
from the previous annual
average of $3 billion.

Source: https://www.lek.com/insights/hea/global/ei/optimizing-pharmaceutical-portfolios-through-ma
44
LEK Analysis: After Oncology, Neuroscience Has Been the
Second Most Active Area for Big Pharma M&A
In examining the breakdown of deals by
therapeutic area, oncology continues to
dominate biopharmaceutical M&A activity (see
Figure 4). Since 2010, the total transaction
value in oncology has surpassed the combined
value of the next three therapeutic areas. More
recent trends, since 2019, further underscore
this dominance, with oncology constituting
approximately 25% of the overall deal value
and 30% of the deal volume in the sector.

While the focus on oncology is likely to remain

steady, the fields of neuroscience and
psychiatry saw a significant surge in late 2023,
particularly with recent deals like AbbVie’s
acquisition of Cerevel and BMS’ purchase of
Karuna. This makes it the second-most-
valuable area in cumulative acquisition value
since 2019, with a staggering $30 billion in
M&A in 2023 alone.

Source: https://www.lek.com/insights/hea/global/ei/optimizing-pharmaceutical-portfolios-through-ma
45
Industry News

46
Obesity Drug Firms Choose Golden Goose Pricing
Robert Cryan, Reuters, Jan 18, 2024 (excerpt)

NEW YORK, Jan 18 (Reuters Breakingviews) - Pharmaceutical companies have started 2024 off with their usual bang, raising the
list prices for diabetes drugs such as Novo Nordisk’s Ozempic and Eli Lilly’s, Mounjaro, according to the Wall Street Journal. In
the complicated U.S. healthcare system, these prices don’t have much to do with reality for most people, as about two-thirds
of the population is covered by commercial health insurance, and those institutions negotiate to receive big discounts. But list
prices matter when the similar drugs are prescribed for weight loss, where more people pay out-of-pocket. As drug pushers
know, reaching the masses is ultimately more lucrative than reaching the classes.

Both Wegovy and Zepbound, the two drugs that are sold for weight loss, are listed at over $1,000 a month. Only about a fifth of
employers covered prescription weight loss therapies as of last March, according to the International Foundation of Employee
Benefit Plans. As a result, many patients must pay full boat for the drugs if they want to use them to get skinny.

Even with the cost, demand seems nearly insatiable. Lilly’s Zepbound grew by about 25,000 new prescriptions weekly in
December, and CEO David Ricks said the company may not be able to make enough of the drug this year. For now, the
producers are somewhat constrained. And Lilly and rival Novo Nordisk should be able to reap huge margins from patients who
are willing to pay full boat.

Yet the two companies are offering a discount – half off to patients with commercial insurance that doesn’t help pay, roughly
similar to the discount insurers typically negotiate – to pique interest while clinical results seem miraculous.

While that means fewer golden eggs today, the goal is harvesting more over time. Obesity is a risk factor in nearly every major
cause of death in developed nations. The companies are gambling that as the beneficial evidence of weight loss accumulates,
insurance coverage will become standard. Since weight is gained once patients stop taking obesity drugs, the lower price can
get people hooked.

Source: https://www.reuters.com/breakingviews/obesity-drug-firms-choose-golden-goose-pricing-2024-01-18/ 47
Senator Sanders Warns J&J, Merck CEOs
Could Be Subpoenaed on Drug Pricing
Tristan Manalac, Biospace, Jan 19, 2024 (excerpt)

Sen. Bernie Sanders (I-VT), chairman of the Senate Health, Education, Labor, and Pensions Committee, on Thursday
proposed serving subpoenas to the CEOs of Johnson & Johnson and Merck. The committee is set to vote on the subpoenas It’s not too hard to pick up
on Jan. 31, 2024. on two basic facts: (1) this is
The subpoenas would force both executives to provide testimony as to why their companies “charge substantially higher
a big election year and (2)
prices for medicine in the U.S. compared to other countries,” according to Thursday’s announcement. Bristol Myers Squibb the Democrats aren’t doing
CEO Chris Boerner, along with at least one other pharma executive, has previously agreed to testify on drug pricing before so well in the polls.
the Senate health committee.

If approved, these would be the first subpoenas issued by the Senate Health, Education, Labor, and Pensions (HELP) They are pulling out the
Committee in more than four decades. The last time the committee issued subpoenas was in 1981. tried and true “pharma
beating” tactic in the
“It is time to hold these pharmaceutical companies accountable for charging the American people the highest prices in the
world for the medicine they need,” Sanders said in a statement. “As the HELP Committee considers legislation to lower
middle of primary season.
prescription drug prices, it is critical that these CEOs explain how they determine the price of medicine in the United States.”
Interestingly, a bunch of
In November 2023, Sanders—along with all Democratic members of the HELP Committee—invited the CEOs of Merck, J&J and
pharma CEO’s have so far
BMS to testify in a hearing about the “outrageously high cost of prescription drugs.” The hearing was set for Jan. 25, 2024.
refused to show up.
Four pharma CEOs have previously volunteered to testify before the HELP Committee, including the heads of Sanofi, Novo
Nordisk, Eli Lilly and Moderna. J&J and Merck have yet to commit. It will be interesting to see
Sanders called it “absolutely unacceptable” that the CEOs of J&J and Merck have so far “refused an invitation by a majority how this all plays out in
of the members of the HELP Committee.” political “silly season”.
Source: https://www.biospace.com/article/senator-sanders-warns-that-j-and-j-merck-ceos-could-be-subpoenaed/ 48
Five Years After Closing the Shire deal, Takeda is
Ready to Harvest From its Latest Reinvention
Meagan Parrish, Pharmavoice, Jan 19, 2024 (excerpt)

Five years ago this month, Takeda Pharmaceuticals completed a $62 billion acquisition of Shire — one of the largest deals in pharma history. The
anniversary has triggered a fresh wave of scrutiny over its value and mixed bag of results.
The deal grew the global footprint of Japan’s largest pharma, helping it expand into lucrative European and U.S. markets. It also bolstered Takeda’s pipeline
and funneled more R&D funds toward vaccines and plasma-derived therapies (PDT). And although the company took on about $60 billion in debt to
complete the acquisition, Takeda leveraged divestitures to lower its debt burden and exceeded its predicted cost savings a year ahead of schedule. Yet, for
all those benefits, Reuters reported in December that the megadeal hasn’t delivered value to Takeda’s shareholders and represents a case-in-point for the
risky and complex gamble of high-profile megamergers.
And when PharmaVoice met with Chris Arendt, the company’s chief scientific officer and head of research, at the J.P. Morgan Healthcare Conference this
month, Takeda was emerging from a fresh round of topsy-turvy news.
“Takeda is in a really good place,” he said. “We are where we want to be this far out from the Shire deal in terms of capabilities and R&D strategies.”
With a recent hot streak in partnerships, increased R&D in new modalities and an ongoing commitment to unmet needs, Takeda rolled into the new year
with plenty of positive momentum.
“We’re looking at where pioneering science is emerging,” he said. “You can look at what other companies are doing and follow the latest press releases into
the latest biological space, but we look at the next step changes, and try to advance what’s cutting edge.”
“Our transformation was about planting the seeds,” Arendt said. “A lot of our R&D was seeding and now it’s maturing — 2024 is about bearing fruit in terms
of clinical readouts.”
This year will also mark an overall shift in Takeda’s pipeline from being “historically weighted toward earlier stage programs to having more in later stage
development,” Arendt said.
With the launch of newly approved drugs underway, TAK-279 moving into phase 3 trials, a drug development engine that’s churning hard — the company
recorded $4.8 billion in R&D investments in 2022 — and an eye out for new partnership opportunities, Takeda isn’t done with its latest reinvention.
“We’ll surprise you with more deals you may not have seen coming,” Arendt said.

Source: https://www.pharmavoice.com/news/takeda-shire-chris-arendt-nimbus/704972/ 49
Bayer Rolls Out New Operating Model, Eliminates
Managerial Staff
Tristan Manalac, Biospace, Jan 18, 2024 (excerpt)

Bayer on Wednesday revealed a new operating model meant to cut back on bureaucracy and hierarchies, as well as streamline the company’s
structures, in an effort to boost its operational efficiency.

The model, dubbed Dynamic Shared Ownership (DSO), is designed to “make the company much more agile,” according to Bayer’s
announcement. The restructuring initiative will include job cuts over the next couple of months to be completed by the end of 2025, at the
latest.

“In line with the principles of DSO, the implementation will be largely decentralized, meaning that its scope cannot be quantified for the time
being,” according to the company. Bayer employs some 22,200 staff in Germany and, as of the end of 2023, had a global headcount of more
than 101,000.

Though Bayer has not specified how many posts the layoffs will affect, Barbara Gansewendt, chairwoman of the Group Executives’ Committee at
the company, said in a statement that it “will come at the expense of many managerial employees.” The committee represents the interests of
manager-level staff at Bayer.

Gansewendt called these layoffs an “extremely bitter development” for Bayer, adding that there is “no viable alternative” for the company.
Affected staff will receive an “attractive” severance pay and will be given adequate support to help them find “new employment as quickly as
possible,” she said.

Anderson inherits from the previous CEO—Werner Baumann, who had served Bayer for 35 years—a company reeling from the disastrous
acquisition of the agricultural giant Monsanto. The buyout, signed in September 2016 for $66 billion, was at the time touted by Baumann as a
“major step forward” for the company’s crop science business.

Source: https://www.biospace.com/article/bayer-rolls-out-new-operating-model-eliminates-managerial-staff-in-restructuring/ 50
The Median Pharma Sustains $3.7 Million in Market Cap for
Every Employee. In Contrast Bayer Sustains $300k in Market Cap
Per Employee.
Market Cap ($ Millions) / Employee
Bayer is in dead last in
$23.4
terms of its ratio of market
value per employee (among
the top 30 pharmas by
market cap).
$14.5
Bayer is getting only $33
$13.6
billion in market cap
The only company that is
$11.5 despite having 101,000 anywhere close is Sun
employees.
$9.7 Pharma which has most of
$8.0 $7.9 $7.8 its employees in India. And
$6.5 $6.4 $6.3
$5.8 these are engaged in
$4.4 $4.2 $4.1
$3.2 $3.0 $2.9
generics manufacture.
$2.5 $2.5 $2.2 $2.2
$1.9 $1.8
$1.4 $1.2 $1.1
$0.9 $0.9
$0.3 Even then, Sun’s MC/Emp
ratio is three times higher
Vertex

Eli Lilly

Celltrion

Alnylam

Moderna

Regeneron

Chugai

Novo Nordisk

Amgen

Gilead

Zoetis

AbbVie

Merck

Biogen

BioNTech

Daiichi Sankdyo

Bristol-Myers

CSL

J&J

AstraZeneca

Roche

Novartis

Pfizer

Jiangsu Hengrui

Sanofi

GSK

Merck

Takeda

Sun Pharma

Bayer
than that of Bayer.

51
LEK White Paper on Pharma Product Launches
LEK, January 16, 2024

Collectively, the top 10 pharmaceutical companies achieved approval for 78 innovative products between 2015 and 2019, with revenue data
accessible for 62 of these products. These 62 products averaged about $600 million in U.S. revenue in the third year after approval.

Upon examining the average revenues in the third year post-launch, substantial variability was observed among the 62 products. The revenue
disparity was striking, with the highest performing launch generating $6.3 billion, in stark contrast to the lowest-performing one, which earned
less than $10 million. The median revenue per product stood at $260 million, highlighting the wide range of outcomes in these launches.

More importantly, there is also considerable variation in launch performance at the company level among large pharmas (see Figure 1). This
variation is evident in their average revenue, ranging from $1.9 billion to $0.2 billion, and in their median revenue from $1 billion to $110 million,
three years post-launch. This represents a notable ninefold difference between the highest- and lowest-performing companies.

Source:
https://www.lek.c
om/insights/hea/
us/ei/variability-
large-pharma-
launch-
performance

52
LEK White Paper (continued)
The benefit of repeated launches in core therapeutic areas The need for early life cycle expansion

In our analysis of top pharmaceutical companies, we observed a higher The strategic role of indication expansions in product strategy is
proportion of launches in core therapeutic areas, defined as areas essential. Companies that effectively invested in indication
where the company already had established revenue streams before expansions, such as adding new lines of therapy, targeting different
the launch of a new product. Notably, 80% of the launches were in patient segments or addressing new diseases, consistently
these core areas. These launches, encompassing 50 products, showed demonstrated higher average revenues. This trend is highlighted in the
significantly higher average revenues per product compared to performance gap between the top and bottom companies: the top three
launches in noncore therapeutic areas — $670 million versus $280 performers averaged 1.4 extensions per product within three years of
million, representing a 2.4-fold difference. At the company level, this launch, while the bottom three managed only 0.4 extensions.
pattern persisted. The three highest-performing companies launched
over 90% of their products into existing therapeutic areas. In contrast, This significant difference emphasizes the critical impact of an early
the bottom three performers introduced 30% of their new products into and well-planned product life cycle strategy, often entailing some level
areas outside their established core, highlighting a clear strategic of preemptive investment to achieve outstanding revenue outcomes.
divergence. Given equal circumstances, companies should give precedence to
assets with the versatility to address multiple diseases. Investing early
The benefits of introducing new products into existing therapeutic and accepting the associated risks in these programs can be more
areas, where companies have established capabilities and stakeholder advantageous if the potential for incremental revenue justifies it, rather
relationships, are clear. In these areas, companies can utilize their top than adopting a cautious, phased approach.
talent, draw upon existing commercial infrastructure, leverage key
relationships with stakeholders and apply insights from previous These observations may need to be reevaluated considering the
launches. Particularly important is the presence of an established changes brought about by the Inflation Reduction Act passed in August
commercial infrastructure that is scaled and customized to provider 2022. The act’s introduction of Medicare price negotiation is perceived
and patient needs, enabling accelerated launch uptake. Both the by many in the industry as akin to a loss of exclusivity event, mainly
infrastructure and the experience also enable companies to foresee and because there’s no minimum limit set for the prices Medicare can
navigate commercialization challenges, realign launch resources with negotiate.
anticipated commercial potential and capitalize on synergies.
Source: https://www.lek.com/insights/hea/us/ei/variability-large-pharma-launch-performance 53
General Catalyst Buys a Healthcare System Last Week
Scott Kirsner, Boston Globe, Jan 18, 2024 (excerpt)

The health care system seems persistently resistant to upgrades. So is the solution buying a hospital, and giving it an infusion of
technology and new ideas?

That’s the approach proposed by General Catalyst, a Cambridge venture capital firm, which announced Wednesday that it would buy
Summa Health, a nonprofit health care system in Akron, Ohio.

With 7,000 employees, Summa is the largest employer in its county, operating hospitals, community health centers, medical
practices, and a small health insurance arm, SummaCare. But Summa has been losing money in recent years. In the announcement
of the deal, General Catalyst managing director Hemant Taneja and longtime hospital executive Marc Harrison said “the focus isn’t
on taking costs out. It’s on putting innovation in.”

How could this deal become a model of health care reinvention? Both Taneja and Harrison, former chief executive of Intermountain
Health in Utah who joined General Catalyst in October, have penned books laying out lofty visions. And how might it go off the rails?
Remember Haven, the Boston-based venture that was going to rethink health insurance from the ground up — but closed up shop
after three years and had negligible impact? In that first category, it’s tempting to think of using Summa as a “closed loop system”
where General Catalyst, and the tech companies in which it invests, could get administrators, physicians, and nurses all using new
tools that could make delivering care more efficient, from finding a doctor to scheduling an appointment to getting treatment. Inside
this closed loop — where Summa provides insurance coverage to a portion of the patients it treats — you could also gather data
about what worked best, and ideally stop doing what wasn’t working.

Harrison and Taneja like to use the phrase “health assurance” when they talk about their aims with the deal. What does that mean,
exactly? It’s “the transformation of health care from a ‘sick care’ system to a resilient, proactive system designed to help people stay
well,” Harrison said in an email. The goal, he said, isn’t to turn Summa into a playground for entrepreneurs with half-baked
prototypes that they believe could help doctors and nurses do their jobs better.

“A key point is that we do not see this as a place where very young early startups will be brought into play to ‘test,’” Harrison writes.
“We’ll be looking for much more mature companies that actually have a proof of concept. In particular, we’re focused on technology
that reduces friction for patients and providers.”
54
Source: https://www.bostonglobe.com/2024/01/18/business/general-catalyst-summa-health/
General Catalyst “Health Assurance” Idea We read Taneja and
Klasko’s book
Hemant Taneja, Partner, General Catalyst, Medium, July 15, 2020
UnHealthcare two years
Today, I am excited to announce the release of my new book, UnHealthcare: A Manifesto for Health Assurance. It is a reflection of several years ago. It provides a highly
deeply engaging with the healthcare community and understanding how technology can have a transformative impact. It is the beginning, I practical, reasonable and
hope, of a new era in health innovation — one that sees technologists partner with healthcare stakeholders to put the patient-provider
relationship back at the center of health experiences. thoughtful approach to
combining a consumerist,
Though we are early on in the rearchitecting of healthcare, we’ve seen the magic of pairing a consumer mindset with responsible data use to
create highly individualized healthcare experiences. Seeing the impact our portfolio companies — Color, Livongo, Mindstrong, Oscar, and Ro
humanist, creative and
amongst others — have had as they build from first principles and the way in which doing so allows them to create fast-growing businesses is efficient approach to better
great proof of what’s to come. We believe that the next decade will see some of the most meaningful venture capital returns come from the healthcare. We are very
healthcare sector.
excited to see what this
The Health Assurance System team and their colleagues
We believe that creating a system of “health assurance” is integral to this transformation — this is the central thesis of UnHealthcare. Health will be able to do with
assurance is a new category of innovation that is committed to bringing modern consumer experiences and accelerating rational economic Summa Health. We like the
behavior through innovative business models. Beyond the economic opportunity we see for health assurance, we have a moral imperative to
create this system as costs skyrocket while outcomes plummet. In a health assurance world, care moves out of the reactive, scales, one-sized
fact that it’s not a giant
paradigm it currently operates in. Instead, health assurance companies, built on open tech standards with empathetic user design and the system so there should be
responsible use of AI, allow for fewer, more tailored interactions with care providers. Digital and physical care will start to blend as existing and room to maneuver and
new providers alike have more ways of engaging with individuals.
improve outcomes and
Health assurance companies will begin the important job of closing the gap in access to and quality of care. Technologies like telehealth costs for patients. A key
consultations, connected devices, and AI-driven chat interactions, will help extend the reach of medical professionals, especially in
underserved areas and in high-demand specializations. Ultimately, the health assurance model should deliver a healthcare experience that is
positive is that Trasko
more affordable and price transparent and drives better outcomes. already restructured
We also know that reimagining healthcare is not something technologists can or should do on their own. I’m incredibly grateful to be working
Thomas Jefferson Health
with Dr. Steve Klasko, my co-author, and health systems like Thomas Jefferson that are embracing innovation and thinking about it from an before with excellent
integrative perspective. Steve and I have spent the last year working together not only on our book but also on creating a framework for how results.
healthcare systems and startups can partner to move healthcare into the 21st century.
55
Source: https://medium.com/health-assurance/announcing-unhealthcare-8d6fb147d774
Is General Catalyst's ‘Bold Bet' the Future of Healthcare?
Hospital Execs are Watching
Giles Bruce, Becker’s Hospital Review, July 15, 2029
Hospital C-suite leaders told Becker's that time will tell whether General Catalyst's acquisition of an Ohio health system is the future of healthcare — but they are
paying close attention.

The venture capital firm said Jan. 17 it agreed to purchase Summa Health, a three-hospital system based in Akron, and turn it into a for-profit entity. The
arrangement is part of General Catalyst's Health Assurance Transformation Corp., or HATCo, run by Marc Harrison, MD, the former president and CEO of Salt Lake
City-based Intermountain Health.

"Hats off to HATCo!" said Aaron Miri, chief digital and information officer of Jacksonville, Fla.-based Baptist Health. "I commend General Catalyst and Summa
Health for taking a giant leap of faith into uncharted waters. I do think you will see more of these kinds of relationships once HATCo successfully navigates the
regulatory, medical staff, patient experience, payer relations and other dynamics that every health system has to navigate. There's a tremendous amount of
unknown that I do applaud the courage to go forward and learn from."

Richard Zane, MD, chief innovation officer of Aurora, Colo.-based UCHealth, called the deal a "bold move" that essentially turns an entire health system into a
"digital laboratory for not only tech development but also to better understand the levers on value and risk.“ "By making it for-profit and perhaps tolerating
financial losses on the health system side to realize larger potential gains on the venture side is most assuredly creative. Perhaps not too dissimilar from other
health systems who leverage margin across providers, hospitals and a health plan by tolerating losses in one for gains in another," he said. "Hoping that patient
care remains the true north, this could be a remarkable story."

"If there is one thing in healthcare you can predict, it is that organizational integration will continue in novel and innovative ways to drive disruption," said
Jennifer Stephens, DO, chief value and ambulatory care officer for Allentown, Pa.-based Lehigh Valley Health Network. "This acquisition, in particular, will be
interesting to follow given the nuances of a for-profit transition, tech-startup portfolio, and value-based care vision. My take is that those niche elements are not
likely to occur as part of a larger trend, causing this deal to fall into a category of its own."

General Catalyst's stated goals of shifting American healthcare from a system of "sick care" and making it more accessible are enviable ones, said Michael
Hasselberg, PhD, RN, chief digital health officer of University of Rochester (N.Y.) Medical Center. He called the firm's tech-focused, "health assurance" strategy
"fascinating."
56
Source: https://www.beckershospitalreview.com/innovation/is-general-catalysts-bold-bet-the-future-of-healthcare-hospital-execs-are-watching.html
Impressive Data at ASCO GI from Agenus Over Weekend
Treatment with neoadjuvant
botensilimab (AGEN1181) plus
balstilimab (AGEN2034) led to robust
responses and prolonged circulating
tumor DNA (ctDNA)/minimal residual
disease (MRD) negativity in patients
with resectable mismatch repair–
proficient (pMMR) and mismatch
repair–deficient (dMMR) colorectal
cancer (CRC), meeting the primary end
point of the phase 2 NEST-1 trial
(NCT05571293), findings from which
were presented at the 2024
Gastrointestinal Cancers Symposium.1

A total of 67% of patients with

microsatellite stable (MSS) CRC (n = 9)
experienced pathologic responses,
defined as tumor reduction of at least
50%, and 100% of patients with
microsatellite instability–high (MSI-H)
CRC (n = 3) experienced major
pathologic responses, defined as
tumor reduction of at least 90%. In the
MSS population, tumor reductions of
100% (complete response [CR]; n = 2),
90% (n = 1), 85% (n = 1), 50% (n = 2),
25% (n = 1), and 10% (n = 1) were
observed. In the MSI-H population,
tumor reductions of 100% (CR; n = 2)
and 98% (n = 1) were observed.
Source: https://www.onclive.com/view/neoadjuvant-botensilimab-balstilimab-combo-induces-early-efficacy-in-pmmr-dmmr-crc 57
58
Very Strong Nivo/Ipi at ASCO GI in Metastatic CRC

Source: https://twitter.com/MyriamChalabi/status/1748764208328814920 59
One Observer of BMS Data Suggests New Statistical Test:
The “Truck Test”

“These data are so

good you could drive
a truck between the
Kaplan-Meier
curves.”

Source: https://twitter.com/PTarantinoMD 60
Epigenetic Editing – the Power of CRISPR Without Cutting
DNA What is epigenetic editing?

Jim Cornall, Labiotech, January 19, 2024 (excerpt) “We’ve been working on this very different spectrum of the
CRISPR, which is we do not focus on gene editing. CRISPR
Epic Bio is an epigenetic editing company, leveraging the allows us to cut the DNA and modify the sequence on that
power of CRISPR without cutting DNA. particular site of the DNA. However, since day one, our
inspiration is less about this cutting ability.”
The company’s proprietary Gene Expression Modulation
System (GEMS) includes the smallest Cas protein known Qi said that CRISPR acts like precise scissors, but Epic Bio is
to work in human cells. This enables in vivo or ex vivo more inspired by the precision than the scissors. He added
delivery via a single viral vector. that this has led to two inventions. Beyond the gene editing
applications enabled by the nuclease CRISPR–Cas9 and
Epic’s lead program, EPI-321, is in IND-enabling studies for CRISPR–Cas12a, the invention of the nuclease-dead Cas
the treatment of facioscapulohumeral muscular dystrophy molecules (dCas9 and dCas12a) offers a platform for the
(FSHD). Aadditional programs seek to address alpha-1 precise control of genome function without gene editing.
antitrypsin deficiency (A1AD), heterozygous familial
hypercholesterolemia (HeFH), and other indications. As an RNA-guided DNA binding platform, dCas9 was first
repurposed to regulate transcription. Cas9 is a large, multi-
This week, we discuss epigenetic editing, why it’s domain protein. However, early work showed silencing the
reversible, and how it can treat FSHD and other two endonuclease domains (the HNH domain that cleaves
conditions. Our guest is Epic Bio founder, Dr Stanley Qi, the target DNA strand, and the RuvC domain that cleaves the
one of the original inventors of CRISPR. non-target DNA strand) in Cas9 via point mutations resulted
in a nuclease-dead dCas9 that could bind to DNA.
Source: https://www.labiotech.eu/podcast/epigenetic-editing-crispr-without-cutting-dna/ 61
Typhoid Mary Revisited: Study Reveals How Some
Bacterial Infections Become Chronic
Leah Eisenstadt, Broad Institute, January 19, 2024 (excerpt)
In the early 1900s, a cook named Mary Mallon, better known as could one day lead to new diagnostic approaches or
“Typhoid Mary”, spread Salmonella Typhi, the causative agent of treatments that prevent these infections from becoming
typhoid fever, to dozens of her patrons even though she showed chronic. The work appears in Cell Host & Microbe.
no symptoms. Many people today harbor pathogenic Salmonella
bacteria for years without feeling sick, making them potential
To begin answering that question, the Earl group and the
sources of new infections.
Broad’s Microbial Omics Core team led by co-senior author
A new study by scientists at the Broad Institute of MIT and Harvard, and institute scientist Jonathan Livny connected with the lab
along with colleagues at Tel Aviv University and the Sheba Medical of Ohad Gal-Mor, an assistant professor at Tel Aviv University
Center in Israel, sheds light on the biological mechanisms that who is co-senior author on the new study.
enable another kind of Salmonella to evade the immune system
and cause long-term infections. The team focused on the In the new study, the researchers examined samples from
“nontyphoidal” forms of Salmonella, which cause food-borne
256 patients in the collection whose infections lasted at
illness and, like the typhoidal form, can linger in the body long
after the initial infection. By examining the genomes of bacteria least 30 days. They confirmed that most of the ​cases were
collected from hundreds of people with persistent Salmonella due to chronic infection by the same strain, rather than
infections, they discovered genetic mutations that both reduce the reinfection by different strains of the same bacteria. After
bacteria’s “virulence,” or ability to infect, and dampen the host’s analyzing the genomes of Salmonella in patient samples at
immune responses, creating a kind of molecular camouflage that various time points, the team highlighted mutations in two
shields the bacteria from the immune system’s gaze. This insight genes, barA and sirA, that arose in the bacteria repeatedly
during chronic infection.
Source: https://www.broadinstitute.org/news/study-reveals-how-some-bacterial-infections-become-chronic 62
Star Wars: Inside a Bacterial
Defense System — and Its Defeat
Beth Dougherty, Harvard Medical School, January 11, 2024 (excerpt)

If you’ve seen the original Star Wars movie, you might wonder whether
the iconic Tie fighter was modeled after the Gabija protein complex, a
bacterial defense system.

From a certain angle, they appear to share the same distinctive shape: a One view of the structure of Gabija. Image: Sadie Antine
deadly center protected by two wings. They also share a purpose:
defend the realm.
“This is the importance of basic science,” said Kranzusch, senior author of
But the structure of Gabija was revealed only recently. It was solved for the paper. “We’re learning how cells defend against infection.”
the first time by virology doctoral candidate Sadie Antine in the lab of
Philip Kranzusch, professor of microbiology at Harvard Medical School Gabija is one of hundreds of defense systems found in bacteria. It is
and Dana-Farber Cancer Institute. present in about 15 percent of all bacteria whose genes have been
sequenced.
Understanding how Gabija and other elements of bacterial defense
systems look and work — along with the mechanisms that viruses To learn what Gabija looks like when it is a fully formed molecular machine,
known as phages use to overcome these defenses and infect bacteria — also known as a protein complex, Antine used a technique called X-ray
promises to illuminate broader aspects of immunity, including human crystallography. The process involves coaxing the bacteria to make the
immunity and immune responses to cancer. protein complex, crystallizing the complex so that it is immobile, and then
scattering X-rays off it to get a precise, atomic-level 3D snapshot of the
Already, the team has revealed an unexpected strategy that phages structure.
might use to neutralize Gabija in the evolutionary arms race between
bacteria and phages.

Source: https://hms.harvard.edu/news/inside-bacterial-defense-system-its-defeat 63
AI Jobs to be Done in Life Sciences
Becky Pferdehirt, Bryan Faust, Zak Doric, and Vijay Pande, Andreesen Horowitz, Jan 10, 2024 (excerpt)

We have long believed that AI will fundamentally reshape biotech and How does this future get realized? We recently wrote about the “Jobs to be
healthcare, positioning us at the brink of an AI-driven Industrial Done” (JTBD) for AI in enterprise healthcare. In life sciences, the combined
Revolution. But when will we see this payoff? Put more boldly, when will existence of large amounts of complex, multimodal data paired with labor-
the majority of new drugs be designed with AI? The first wave of intensive, high cost tasks creates an optimal opportunity for AI to
therapeutic candidates designed and optimized by AI/ML tools are fundamentally change the future of an entire field. Here, we describe our
making their way through clinical trials now, and new NDA/BLA view of the JTBD in life sciences where we believe AI will have the largest
applications referencing AI are accelerating rapidly. However, it’s crucial impact.
to recognize that solely counting the number of approved AI-enabled
medicines is a lagging indicator of success, overlooking the expanse of AI jobs to be done in life sciences
treatments still in development (and the long time lag due to clinical
trials). Human pathway biology

To contextualize this point, consider the evolution of the natural Hypothesis generation and prioritization lies at the heart of scientific
language processing (NLP) field. Initially, GPT-2 marked a significant discovery in life sciences. It’s a labor-intensive process that demands
step forward but had notable limitations in areas like fact-checking and sifting through extensive research literature to identify promising avenues
contextual understanding. In contrast, GPT-4 and other large language for investigation. Here, the AI Scientist emerges as a game-changer,
models (LLMs) have now catalyzed a generative AI renaissance, automating literature reviews, analysis of experimental data, and
anticipated to contribute trillions to the global economy. In biotech and hypothesis generation, with potential to achieve superhuman capabilities.
health, we are in the early innings (the equivalent of the GPT-2 era) of a State-of-the-art LLMs can assimilate learnings from the entire corpus of
significant shift in life sciences R&D driven by AI, and view the scientific work produced throughout human history, a scale unattainable
continued acceleration of AI research, the increasing number of AI- by any single human.
driven pharma partnerships, and the tangible time- and cost-savings in
drug development realized by AI-enabled discovery platforms to be While we’re only starting to see early signs of the immense promise of such
material leading indicators flagging an imminent and substantial an approach (e.g. insitro, Future House, SciSpace, BioAge), it’s easy to
transformation in the life sciences ecosystem. envision a near future where researchers frequently consult an AI Scientist
Source: https://a16z.com/ai-jobs-to-be-done-in-life-sciences/
for pressure-testing new ideas and helping prepare research proposals.
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AI Jobs to be Done in Life Sciences (continued)
Becky Pferdehirt, Bryan Faust, Zak Doric, and Vijay Pande, Andreesen Horowitz, Jan 10, 2024 (excerpt)

This efficiency extends to experimental design and data analysis, where AI for preclinical development
AI can unveil hidden insights from complex datasets, which can in turn
inform new hypotheses. Moreover, digital twin technology, spanning AI is set to disrupt virtually every aspect of the preclinical drug
from whole-cell to whole-human simulations, foretells a future of in- development lifecycle, from target discovery to final formulation. In fact,
silico testing and systemic understanding of diseases. Coupled with AI- across both biotech and pharma, we’re already witnessing tangible
driven lab automation, there’s potential to minimize human reductions in therapeutic discovery & development timelines in the
intervention, thereby establishing a continuous learning loop that informed design of efficacious small molecules, proteins, or cell and
accelerates the cycle of discovery. gene therapies.

AI for TA selection/pipeline prioritization Saving time and dollars on the clinical side

One of the most important decisions a therapeutic platform company Over half of the total investment in the drug development process is
must make (and continually re-make) is what overall therapeutic areas spent during the clinical development phase. We view the seamless
and specific therapeutic targets to point their technology towards. This integration of AI into jobs across clinical development as one of the
is such a crucial task that an entire sector of consulting companies has clearest paths to reducing the cost and timelines for drug development,
been built around it, servicing both small biotech and large biopharma. and ultimately improving patient care. Clinical development yields a vast
Successful therapeutic area selection and pipeline prioritization amount of varied data, offering ample opportunities for AI-driven
requires the synthesis of large amounts of both historical data and the solutions to refine multiple aspects of clinical development. Even
ability to accurately predict future competitive landscapes in order to modest improvements could significantly reduce both the high costs and
inform strategic decisions for a company’s pipeline. We view this area extended timelines of drug development, a compelling value proposition
as a compelling job for AI, where large amounts of complex data must to pharma. For example, LLM guided clinical trial design and protocol
be synthesized and the ultimate result is relatively forgiving to drafting could level the playing field between small biotechs and large
mistakes. pharma. Additionally, AI-driven patient selection for clinical trials could
enroll patients more effectively and precisely, improving recruitment
across sites and overall trial success rates.
Source: https://a16z.com/ai-jobs-to-be-done-in-life-sciences/ 65
66
Medical AI Could be ‘Dangerous’ for Poorer
Nations, WHO Warns
David Adam, Nature, Jan 18, 2024 (excerpt)

The introduction of health-care technologies based on artificial intelligence (AI) could be “dangerous” for people in In many quarters, there is a
lower-income countries, the World Health Organization (WHO) has warned. quite conservative reaction
to generative AI.
The organization, which today issued a report describing new guidelines on large multi-modal models (LMMs),
says it is essential that uses of the developing technology are not shaped only by technology companies and those
To take a counterpoint to
in wealthy countries. If models aren’t trained on data from people in under-resourced places, those populations
this recent WHO guidance,
might be poorly served by the algorithms, the agency says.
LMM’s would seem to be
“The very last thing that we want to see happen as part of this leap forward with technology is the propagation or particularly helpful in
amplification of inequities and biases in the social fabric of countries around the world,” Alain Labrique, the nations where existing
WHO’s director for digital health and innovation, said at a media briefing today. medical infrastructure is
sparse.
Overtaken by events

The WHO issued its first guidelines on AI in health care in 2021. But the organization was prompted to update them Further, it is not difficult to
less than three years later by the rise in the power and availability of LMMs. Also called generative AI, these design LMM’s that are
models, including the one that powers the popular ChatGPT chatbot, process and produce text, videos and images. regionally / spatially aware,
thereby addressing the
LMMs have been “adopted faster than any consumer application in history”, the WHO says. Health care is a potential concern voiced by
popular target. Models can produce clinical notes, fill in forms and help doctors to diagnose and treat patients. the WHO last week.
Several companies and health-care providers are developing specific AI tools.
Source: https://www.nature.com/articles/d41586-024-00161-1 67
IQVIA Institute: Global Use of Medicines Report

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Key Conclusions
1. Growth outlook for use of pharmaceuticals is raised by 2 percentage points despite lower expectations for COVID-19
vaccines and therapeutics

2. This increase in growth outlook is driven by more patients getting treated with better medicines, especially in
immunology, endocrinology, and oncology

3. Medicine use in Latin America and Asia will grow faster than other regions over the next five years

4. Global use of medicines grew by 14% over the past five years and a further 12% increase is expected through 2028,
bringing annual use to 3.8 trillion defined daily doses

5. Global spending on medicine using list prices grew by 35% over the past five years and is forecast to increase by
38% through 2028

6. The updated outlook for the U.S. market, using estimated net prices, is being raised by 3 percentage points to 2-5%
CAGR through 2028, reflecting higher recent growth and expected further increased patient use of higher value
therapies

Source: https://www.iqvia.com/insights/the-iqvia-institute/reports-and-publications/reports/the-global-use-of-medicines-2024-outlook-to-2028 69
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Disclosure
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