JPM24: Nvidia’s AI dreams, Sarepta’s rosy outlook and Jeff Jonas’ new job
08 Jan 2024
Executive Change
Biotechnology investors and executives appeared eager to dive into this year’s J.P. Morgan Healthcare Conference, which began Monday in San Francisco.
A trio of deals kicked off the week, involving buyouts for antibody-drug conjugate developer Ambrx Biopharma, cancer biotech Harpoon Therapeutics and autoimmune drugmaker Calypso Biotech.
“You've now got this potentially really exciting moment, from an investment standpoint, for people to come back in the sector,” said biotech entrepreneur John Maraganore, formerly CEO of Alnylam Pharmaceuticals. “They're buying into a beat-up sector where the fundamentals have never been better.”
The XBI, a closely followed biotech ETF, has seen eight consecutive weeks of gains, the “best” two-month stretch of performance for the sector, Jack Bannister, a senior managing director at Leerink Partners, wrote in a client note.
The recent stretch has seen several tailwinds coincide: interest rates are falling, while deals like Bristol Myers Squibb’s buyout of Karuna Therapeutics have boosted investor sentiment.
“We’ve retraced the bottom and we’re coming back,” said Chris Bardon, co-managing partner at MPM BioImpact. “We're really due for a multiyear growth cycle.”
Optimism only counts for so much, of course. The sector still faces regulatory and financial uncertainty that could weigh on any rebound. But for Monday at least, biotech’s mood seemed brighter.
Nvidia’s biotech ambitions
Chip maker Nvidia is among the few companies in the world worth more than $1 trillion. And it thinks its technology will help a drugmaker one day join the exclusive club.
“We believe the next trillion-dollar drug companies are out there somewhere,” said Kimberly Powell, Nvidia’s vice president of healthcare, at a company presentation Monday. “We want to help accelerate them by investing throughout the industry.”
Nvidia is also continuing a partnership with Recursion Pharmaceuticals by licensing out its model with Nvidia to discover new targets and drug candidates, while continuing to build a library of computer-aided drug discovery platforms.
“We believe that the [computer-aided drug discovery] industry will do for drug discovery what the [computer-aided design] industry did for chip design,” said Powell.
Amgen did not name any specific diseases it will target using Nvidia's software, but said the platform would be used to build ”a human diversity atlas for drug target and disease-specific biomarker discovery.” The Thousand Oaks, California-based biotech first began using Nvidia's AI software for drug development in 2022.
Nvidia has crept into biotechnology over the past two years, striking deals with Recursion in 2021 and Genentech last November. Its venture arm has invested in young startups as well, backing Flagship Pioneering’s Generate Biomedicines and Genesis Therapeutics.
The Santa Clara, California, chip maker is developing what it calls its “BioNeMo” platform for drug discovery. Nvidia's software includes tools to model new small molecules, open-source models such as OpenFold protein prediction AI and company-specific platforms.
“We think this will be as big and exciting as genomics,” Powell said in a press call ahead of the conference. — Gwendolyn Wu
Sarepta’s strong start
Sarepta Therapeutics is typically confident for 2024 despite controversy over a gene therapy approval and doubts over mixed clinical trial results.
Making the company’s presentation in a stately conference room at the Westin St. Francis, Sarepta CEO Doug Ingram let investors know he sees the upcoming year as a big one. He shared approximate fourth quarter revenue figures that showed Elevidys, its gene therapy for young boys with Duchenne muscular dystrophy, brought in $131 million. Since its June 22 approval, sales totaled $200 million.
The sales numbers “far exceed” Wall Street forecasts for Elevidys, Ingram said. (Leerink, however, had estimated slightly higher, at $144 million.)
Duchenne is a rare inherited disease estimated to affect about one in 3,500 to 5,000 newborn boys in the U.S. Typically diagnosed between ages 2 and 5, Duchenne causes progressive muscle weakness that eventually leads to loss of ambulation.
Currently, Elevidys is approved only for boys aged 4 or 5 years old who can still walk. In October, a key study meant to confirm the gene therapy’s benefit missed its main goal, failing to find a significant difference in motor function compared to placebo
Sarepta, though, has pointed to secondary measures that indicate treatment helped trial participants. “As you can see with your eyes, the therapy clearly works,” said Ingram, presenting study data for Elevidys at JPM.
Ingram and his company are banking on the Food and Drug Administration reaching the same conclusion. Despite the mixed confirmatory trial data, the company has submitted an application to the agency to expand the drug’s use.
While standard regulatory timelines would put a decision out around August, Ingram said he’s hopeful a verdict could come “much sooner.”
Elevidys is priced at the extremely high mark of $3.2 million per patient. Ingram said payers have come a long way in understanding the disease and are putting policies in place that cover the drug’s label. — Delilah Alvarado
Jeff Jonas’ VC pivot
One news item to come out alongside JPM’s Monday morning flurry involved a high-profile executive who isn’t even at the meeting.
On Monday, Jeff Jonas, the longtime Sage Therapeutics CEO, was named a partner at Cure Ventures, a new venture firm that launched its first fund last year.
The news is something of a surprise. In 2022, Jonas left Sage to become CEO of a Boston-area startup incubator called Abio-X, which was formed and funded by Asia-based private equity firm CBC Group and given $150 million to invest in young drugmakers. In an interview at the time, he’d called it a “unique” opportunity that would allow him to mold new companies in a way “I see fit.”
The job didn’t last long. Reached by phone in Boston Monday, Jonas said he and CBC had a “difference in philosophy” about incubating young companies. He resigned in September, but wouldn’t provide further details.
Still, Jonas had the same urge to start and build biotech companies that drove his decision to leave Sage. Rather than join an established firm, he wanted the chance to make his mark at a newer, smaller firm. “I had some other opportunities,” he said, but “I wasn’t interested in slotting into this kind of role in a large group.”
“It's sort of like the difference between being in a well-funded biotech and a large pharma,” he said of joining Cure.
At his new gig, Jonas intends to get involved with companies “as early as possible.” Neuroscience investments are on his radar, but not exclusively, as the firm is currently evaluating a “moderate-sized group” of assets and companies across therapeutic areas.
Perhaps in keeping with his new position, Jonas is cautiously optimistic about biotech’s prospects to rebound after the sector spent much of last year mired in a downturn.
2023 was “a year of investor melancholia,” he said. “Everyone had their own world view of why they felt bad.”
But “there are a lot of interesting assets that are partner-able and develop-able, and that weren’t fully exploited,” he added. — Ben Fidler
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