Researchers are already working on improving the mRNA technology behind the hugely successful Covid vaccines, and circular RNA is a leading idea. That approach received a big endorsement from Merck & Co today in the form of an infectious disease and oncology discovery deal with Orna Therapeutics. The biotech will receive $150m up front, a hefty fee considering that its work is very much preclinical; its most advanced project is described as an in-situ anti-CD19 Car that it aims to get into the clinic by 2024, and does not seem to be covered by the Merck deal. The pharma giant is also contributing $100m towards a $221m series B that Orna announced today. Gilead, Bristol Myers Squibb, Astellas and Novartis all participated in Orna’s series A, so this is clearly a space that big developers have their eyes on. Few small start-ups are focused on the approach, although the bigger mRNA players are presumably already active. The idea behind circular RNA is to produce more stable, and therefore durable, therapeutics; linear mRNA is susceptible to degradation from its loose ends. More efficient delivery into cells, improved protein expression and cheaper manufacturing is being claimed.

News of a stumble in a crucial paediatric trial of Pfizer’s latest pneumococcal vaccine, Prevnar 20, made for worrying reading last week. Six viral serotypes failed to meet non-inferiority on one of the co-primary endpoints of a US pivotal trial, two by a wide margin and four narrowly, the group said on Friday. Without knowing which serotypes were at fault it is hard to judge the significance; SVB wrote that if these strains were not already covered by Merck & Co’s rival 15-valent shot, Vaxneuvance, and/or were not associated with invasive disease, Prevnar 20 should still have a chance to compete. Vaxneuvance won its paediatric approval last month, and Pfizer needs to defend the dominance of earlier Prevnar iterations. A further observation by SVB gives further reason for pessimism, however. Last month Pfizer started a phase 1 trial testing six new pneumococcal vaccine candidates that look to have fewer strains than Prevnar 20. Being able to maintain ironclad protection while expanding a vaccine's coverage has always been the challenge in this space, and perhaps Pfizer is also preparing for more Prevnar 20 disappointment. Either way, all eyes now turn to the next pivotal readout, due before year end.   

If Enhertu has not already rendered Gilead’s Trodelvy irrelevant in Her2-negative breast cancer then today’s overall survival hit in the Tropics-02 trial represents a major surprise for the disaster-prone Gilead. This morning’s anaemic 2% share price increase suggests that the boat for Trodelvy has already sailed, but the result will nevertheless be pored over when presented at a scientific conference – not least because Gilead revealed that it had filed Trodelvy on the strength of it. Tropics-02’s relevance was in doubt since a Q&A for investors glossed over whether its positive PFS outcome was clinically meaningful, before a late-breaker at Asco revealed a modest median PFS benefit, late separation of the PFS curves, and an ultimately not unimpressive 34% reduction in risk of progression. OS at that first interim analysis, when just over half of Tropics-02’s 543 patients had died, was still negative, so the question will be what changed between then and today’s second interim analysis hit. Perhaps a similar late separation, driven by the Trop-2 biomarker, has occurred in the OS curves. Importantly, Gilead now says the result is “clinically meaningful”, though some will note that this is a subjective claim.

If Merck & Co buys Seagen – which, after Friday’s legal verdict, looks more likely than before – the move would rank as the biggest takeover of the year so far. And a Seagen takeover, widely rumoured in recent weeks, is thought likely by investors. That much is clear given that Seagen stock was virtually unmoved on Friday’s news that an arbitration had ruled against the company, and in favour of Daiichi Sankyo, in a dispute over rights to antibody-drug technology that lies behind Enhertu and related projects. Seagen had earlier prevailed in a jury trial over the key patent involved, and the sellside had generally been expecting a similar result in the more important arbitration process. As such, the markets are shrugging off Seagen’s loss of a potentially large royalty line, and instead seeing this as a clearing event that gives Merck more certainty over valuation. As the biotech bear market shows signs of bottoming out M&A is back on the agenda, with Pfizer and Amgen’s recent moves on Global Blood and Chemocentryx respectively, for instance. A Seagen takeover would maintain this momentum, even if the target’s valuation is not, after all, as high as once hoped for.

Sanofi’s terrible week started with news of a global recruitment pause on tolebrutinib, the group’s BTK inhibitor that is mired in liver injury concerns. The project is for now Sanofi’s most valuable pipeline asset, according to Evaluate Pharma, although forecasts are under threat. Analysts at UBS this week halved their tolebrutinib peak sales estimate to €1bn, citing the liver toxicity issue, and raised serious concerns about the company’s lack of growth. The note also flagged approaching Zantac litigation court cases – the drug was withdrawn in 2019 on a link with cancer – an issue to which the market seems to have just woken up. Zantac rights were passed around over the years, and the numerous companies involved are already fighting among themselves, seeking indemnification from losses. Morgan Stanley says damages could reach $45bn. Sanofi, Haleon and GSK are bearing the brunt of the concerns, but investors appear to be fearing the worst for all associated. All of which could not have come at a worse time for Sanofi, which looks like ending the week nursing a drastic valuation slump: its shares hit an 18-month low today and are down 16% since Monday.

Dissolving drug-eluting stents were one of those devices that sounded like a great idea, but which in practice didn’t really take off. Abbott withdrew the best-known one, Absorb, in 2017 after it failed to sell, and when Reva Medical went into bankruptcy protection in early 2020 the technology was largely regarded as defunct. But it takes more than that to keep Reva down, it seems: the company is back with a $45m series B round and a new bioresorbable device for a different indication. Where formerly it was trying to treat blocked coronary arteries with a scaffold called Fantom, it is now heading to pivotal trials in below-the-knee peripheral vascular disease with a scaffold called Motiv. Motiv is made of a polymer called Tyrocore that Motiv developed itself, and leaches the antiproliferative sirolimus. Reva believes that the new cash, from “a global strategic investor with deep experience in medical devices”, as well as Biostar Capital and existing investors, will allow it to take Motiv to the FDA. Data from an uncontrolled pilot trial were encouraging, but the pivotal, versus balloon angioplasty, will be a far harder test.

Valneva had always looked like a Covid vaccine also-ran, and now it is finally facing reality. During its second-quarter results today the group said it had suspended manufacturing of VLA2001, and is exploring strategic options. A look at Valneva’s rising costs since Covid hit explain why the group is walking away from the jab, which has proven more of a money pit than a money maker. Novavax is another Covid vaccine laggard that looks like it will struggle to make a return on its investment; earlier this month that company slashed its 2022 sales guidance from $4-5bn to $2-2.3bn – a number that could still be hard to hit given the lacklustre demand for its product, Nuvaxovid. Novavax’s outlay dwarfs Valneva’s, but it has received plenty of government funding, with the US administration ploughing in nearly $800m last year. At least Valneva has some other irons in the fire, like its Chikungunya vaccine VLA1553 and the Pfizer-partnered Lyme disease candidate VLA15. Pfizer’s recent investment and the start of a pivotal trial of the latter look like a vote of confidence; Valneva will have to hope it can do better in these diseases than it did in Covid.

Undeterred by clinical failure Gemini Therapeutics was set to continue flogging the dying horse of its complement inhibitor GEM103 in geographic atrophy. But a pivotal trial never started, and today the group did investors another favour: realising that its value lay as a shell, Gemini is being reversed into by Disc Medicine, a private US company founded by Atlas Venture in 2019. Disc’s focus lies in red blood cell biology, where mid-stage trials recently began for two lead assets, bitopertin for protoporphyria and DISC-0974 for myelofibrosis. Both are big pharma castoffs: bitopertin came from Roche, while DISC-0974 was part of Disc’s anaemia-focused licence from Abbvie. The latter has mechanistic backing, courtesy of early clinical data at this year’s EHA meeting, but bitopertin’s history is more bizarre: Roche had been developing the molecule, a GlyT1 inhibitor, for schizophrenia before it failed six phase 3 trials in 2015. Research published last year backs the repurposing of GlyT1 inhibitors for protoporphyria, but Boehringer Ingelheim continues to study the mechanism in schizophrenia, in a phase 3 trial of BI 425809 incorporating speech analytics and virtual reality. Disc’s reversal into Gemini includes a $53m financing, adding to $140m of VC cash raised earlier.

Things might be looking up in biotech but it is too early to declare the bear market over, and hard choices still have to be taken in prioritising R&D spending. So Zentalis should be congratulated for pulling the plug on ZN-c5 and ZN-e4, respectively an oral Serd and EGFR inhibitor. Radius/Menarini’s elacestrant could soon become the first approved oral Serd, and pivotal data are expected from Astrazeneca and Lilly’s contenders. And the EGFR space is fiercely competitive, featuring Astra’s blockbuster Tagrisso and numerous advanced players. The question for Zentalis, fresh from a $200m equity raise and $25m share purchase by Pfizer, is whether in focusing on ZN-c3 and ZN-d5 it is backing the right horses. ZN-d5, a BCL-2 inhibitor, has marketed competition, though not in its selected niche of AL amyloidosis. ZN-c3 could be the big one: after Astra pulled adavosertib ZN-c3 is the industry’s most advanced Wee1 inhibitor – a mechanism that has promised much but delivered little. Zentalis will argue that ZN-c3 has better tolerability, and might not hit adavosertib’s problematic lack of a therapeutic window. Perhaps Astra’s decision encouraged Zentalis; a phase 2 ZN-c3 trial ending in December could reveal all.

Cincor has proved itself to be a rare beast in the current markets: a biotech trading significantly above its IPO price. The group’s almost 50% stock price jump yesterday came courtesy of positive results for baxdrostat from the Brightn trial in treatment-resistant hypertension. The aldosterone synthase inhibitor produced double-digit reductions in systolic blood pressure across all three trial doses, including a 20.3mmHg drop at the highest dose. On a cross-trial basis the project compares favourably with mid-stage results from Idorsia’s Johnson & Johnson-partnered aprocitentan; full pivotal data are keenly awaited on the dual endothelin antagonist. Another feather in Cincor’s cap was baxdrostat’s clean safety profile, with the asset avoiding hyperkalaemia and showing no impact on cortisol levels. Unsurprisingly, Cincor wasted no time in capitalising on its share price gain by announcing a fundraising. The company is also trying to maximise its market, and results from the phase 2 Halo trial for patients who have failed two standard of care BP drugs – a slightly less stubborn population – are expected later this year. Access to the wider primary market is unlikely given the numerous generic blood pressure products on offer, but for now the treatment resistant market is poorly served.