Stern IR News and Events

Beat on the Street: June 21, 2021

Let us begin by sending heartiest congratulations to two (!)  Stern IR clients on recent FDA approvals: the Agency approved Blueprint Medicines’ AYVAKIT® (avapritinib) for advanced systemic mastocytosis (here) and Chimerix’s TEMBEXA® (brincidofovir) for smallpox (here)!

New FDA Draft Guidance: Introducing Patient Reported Outcome (PRO) Data to Aid Benefit/Risk Assessments in Cancer Drug Applications

As part of a trend to include more qualitative patient information as part of approvals, last week the FDA issued draft guidance providing recommendations to clinical trial sponsors around the collection of a core set of patient-reported clinical outcomes in cancer trials and related considerations for instrument selection and trial design. The draft guidance is available in full here, with highlights as follows:

  • To maximize the utility of submitted PRO information, FDA recommends collecting and separately analyzing: disease-related symptoms; symptomatic AEs; overall side effect impact summary measure; physical function; and role function.
  • The PRO instrument itself must be well-defined and reliable, so the results are accurate and not misleading. To that end, sponsors must provide support for the selection of the PRO with available data and/or published peer-reviewed literature.
  • Assessments of PROs should be taken at baseline; from there, assessment frequency should be higher within the first few treatment cycles and, depending on the trial, may be less frequent in later cycles.

New Restrictions on 10b5-1 Plans Ahead?

As the Wall Street Journal reported last week, the SEC is drafting a new proposal that would revise the rules that govern 10b5-1 plans (whereby management enters into predetermined plans to sell company stock without falling prey to insider trading violations) to ensure regulators are “identifying and punishing abuses” of these arrangements. While the specifics are still being worked out, the WSJ suggested a few ways the SEC could try to reduce the risk of improper trading: by requiring insiders to wait four to six months after a plan’s conception before trading; putting limits on plan cancellations or modifications; disclosing their adoption and any changes; and curbing the number of plans that executives can set up.

…And other SEC rulemaking!

Also in recent days, new SEC Commissioner Gary Gensler released a wide-ranging set of initiatives to reform Federal securities regulations and enforcement.   The “Spring 2021 Unified Agenda of Regulatory and Deregulatory Actions”, nicknamed the “RegFlex Agenda” lists both short- and long-term regulatory actions that administrative agencies – including the SEC – plan to take. Citing the SEC’s mission of “protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation,” the SEC plans to propose and finalize rules across areas including:

  • Disclosures relating to climate risk, human capital, including workforce diversity and corporate board diversity, and cybersecurity risk;
  • Market structure modernization within equity markets, treasury markets, and other fixed income markets;
  • Transparency around stock buybacks, short sale disclosure, securities-based swaps ownership, and the stock loan market;
  • Investment fund rules, including money market funds, private funds, and ESG funds;
  • 10b5-1 affirmative defense provisions;
  • Unfinished work directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including, among other things, securities-based swaps and related rules, incentive-based compensation arrangements, and conflicts of interest in securitizations;
  • Enhancing shareholder democracy;
  • Special purpose acquisition companies;
  • Mandated electronic filings and transfer agents.

Flagship Pioneering Builds $3.4 Billion Fund to Fuel New Inventions

This week, Flagship Pioneering announced the expansion of Fund VII. The fund, which initially launched with $1.1B last year, has raised an additional $2.23B, bringing together for the first time Flagship’s origination and growth strategies under one investment vehicle, with a long-term focus on the creation, development and growth of its first-in-category bioplatform companies.

As part of this disclosure, Flagship also announced a new division, tasked with pioneering a new field that aims to protect, maintain, or improve health before people get sick by proactively intervening in those who are seemingly healthy but at risk. It will encompass interventions that protect health from external threats (health security) as well as to prevent or delay the onset of disease (preemptive health) to better prepare for the next infectious disease threats, and to pursue bolder treatments for existing pandemic diseases such as obesity, cancer, and neurodegeneration.

Market Update:

The overall markets were mixed this week, with the Nasdaq reaching an all-time high on Monday, and the S&P 500 breaching its 52-week high on Wednesday. The NASDAQ, DJI and S&P 500 closed down 2% and down 1%, respectively. The VIX closed up 20%, sitting at 19.3 as of market close on 6/18. Biotech markets declined this week; the NBI, XBI and BTK decreased by 3%, 2% and 2% respectively.

Following the trend of the past few weeks, biotech public capital markets have been active recently, with a handful of IPOs and follow-ons, including the following deals:

  • IPOs: Ambrx Biopharma ($126M), ATAI Life Sciences ($225M), Century Therapeutics ($211M), Codex DNA ($106.7M), Cyteir Therapeutics ($133M), Femasys ($34.5M), SternIR Client Janux Therapeutics ($222.9M), Lifestance Health Group ($720M), Lyell Immunopharma ($425M), Molecular Partners ($63.8M), Verve Therapeutics ($266.7M)
  • Follow-ons: Aclaris Therapeutics ($125M), Apria Inc. ($139.7M), SternIR Client C4 Therapeutics ($157M), Cel Sci Corporation ($31.7M), SternIR Client Inhibikase Therapeutics ($45M), Option Care Health ($300M), Novan ($40M), PDS Biotechnology ($45M), Protagonist Therapeutics ($115M), RAPT Therapeutics ($125M)

In addition, there were many private financings, including:

  • Alcyone Therapeutics (launched with $23M); Alentis Therapeutics (Series B, $67M); Blossom Bioscience (Series A, $72M); Bright Peak Therapeutics (Series B, $107M); CAMP4 Therapeutics (undisclosed, $45M); Circle Pharma (Series C, $66M); Ena Respiratory (Undisclosed, AU$32M); Fractyl Health (Series F, $100M); Heartseed (Series C, $37M); HiFiBiO Therapeutics (Series D, $75M); Iksuda Therapeutics (Undisclosed, $47M); KAHR (undisclosed, $46.5M); Kurome Therapeutics (Series A, $15M); Mnemo Therapeutics (Series A, €75M); RayzeBio (Series C, $258M); Senda Biosciences (Series B, $98M); Synthekine (Series B, $107.5M); Umoja Biopharma (Series B, $210M); VectorY Therapeutics (Undisclosed, €31 million); ViaCyte (Series D, $115M).