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feature
The biopharmaceutical anomaly
Investment and funding has continued to flow into biotech, unlike most business sectors. But with healthcare
and hospital budgets increasingly under pressure, do belt-tightening and consolidation lie ahead? Melanie Senior
investigates, with additional reporting by Riku Lähteenmäki.
T
he biopharmaceutical industry largely
has been spared from the public
market rout that has gutted most
economic sectors since COVID-19 hit. After
an initial, indiscriminate shock to stock
prices in March 2020, investment in biotech
companies listed on the stock exchanges
has actually increased. The Nasdaq
Biotechnology Index emerged from the
slump to reach a five-year high — up 11%
since the start of the year, following a 20%
rise in 2019. Biotech initial public offering
(IPOs) have also picked up; in June, the over
two dozen 2020 listings had together raised
nearly $8 billion — more than over the same
period in 2019. In early June, CAR-T cell
therapy maker Legend Biotech raised $424
million in the largest ever Nasdaq listing by
a Chinese biotech.
“The capital markets remain open
and active,” to the surprise of many, says
Geoffrey Porges, senior biopharmaceuticals Ruslan Grechka / Alamy Stock Photo.
analyst at SVB Leerink. The non-
discretionary nature of healthcare — and
the sector’s key role in finding solutions to Follow-on public financing has also was the first COVID-19 therapy to receive
the pandemic — have also attracted a flood been healthy, topping $19 billion so far this US Food and Drug Administration (FDA)
of generalist and retail investors as they flee year, including almost $2 billion raised by Emergency Use Authorization. Regeneron’s
struggling sectors like retail, restaurants and RNA-focused Moderna in two separate 60% share-price gain since the start of the
airlines. Private biotech financing also had share offerings in February and May 2020 — year comes thanks to a monoclonal antibody
a record first quarter. The pandemic, which the earlier one at $19 per share, the (mAb) duo due to enter the clinic in June
has been poison to most sectors of industry, later at four times that. Moderna is the and rheumatoid arthritis drug Kevzara
has brought funds to biopharmaceutical breakout ‘COVID-19 performer’ so far: (sarilumab), a human IgG1 mAb targeting
enterprises from an even wider spread of its shares have trebled since the end of the interleukin-6 receptor, being investigated
investors than normal. 2019 on the back of heated excitement as a therapy for patients with severe
around its RNA-based vaccine candidate COVID-19 disease. Infectious-disease- and
Crisis? What crisis? against the novel coronavirus (SARS-CoV-2), immunology-focused Vir Biotechnology
For some biotech companies, listing now slated to start phase 3 trials in July. has also nearly trebled in value since
— in the midst of what economists call (Press-released interim data on eight January, to $4 billion, after announcing
the worst recession in living memory — is patients from a small study led by the US COVID-19-related collaborations on
easier than in late 2019, when the China– National Institute of Allergy and Infectious antibody therapies with GlaxoSmithKline
US trade war caused market jitters. ADC Diseases claimed that the candidate, and Alnylam Pharmaceuticals, itself up 20%
Therapeutics, for instance, pulled an IPO in mRNA-1273, generated an antibody since the start of the year.
October 2019 and raised an oversubscribed response similar to that seen in By mid-May 2020, there were over a
$235 million in early May 2020 (Table 1). convalescing patients.) hundred treatments and more than a dozen
Others are seizing the advantage to raise Valued at over $23 billion, loss-making vaccine candidates in human testing across
money, even if they don’t really need to: Moderna is just one of a growing list of the wider biopharmaceuticals industry,
gene therapy venture Generation Bio raised biotechs who have mobilized resources to find academic institutions and non-profits.
$230 million in a June IPO, after raising a vaccine or therapeutic for COVID-19 — This extraordinary effort is in part enabled
$110 million in private money just four and seen their shares rise as a result. Also by the healthy financing environment for
months earlier. Its assets are still preclinical. riding the COVID-19 wave: Gilead Sciences, biotech during 2019 (and much of the
So are those of Boston-based gene therapy whose failed hepatitis C virus (HCV) previous decade). Last year saw large boosts
group Akouos, which recently filed for small-molecule candidate remdesivir, an to industry revenue, even higher rises in
a $100-million IPO, having raised $105 injectable nucleoside analog that inhibits R&D spending, and chart-topping up-front
million in a series B in March. viral RNA-dependent RNA polymerase, partnership financing.
798 Nature Biotechnology | VOL 38 | July 2020 | 798–811 | www.nature.com/naturebiotechnologyfeature
Table 1 | Top ten IPOs of 2019
Company (lead underwriters) Amount raised Date Listing Phase of
($ millions) completed location development
Genmab (BofA Merrill Lynch, Morgan Stanley) 582 17 July NASDAQa Market
10X Genomics (J.P. Morgan, Goldman Sachs, BofA Merrill Lynch, Cowen) 449 12 September NASDAQ Market
BridgeBio Pharma (J.P. Morgan, Goldman Sachs, Jefferies, SVB Leerink, Piper Jaffray, 401 26 June NASDAQ Phase 3
BMO Capital Markets, Raymond James)
Adaptive Biotechnologies (Goldman Sachs, J.P. Morgan, BofA Merrill Lynch, Cowen, 345 26 June NASDAQ Market
Guggenheim Securities, William Blair, BTIG
CStone Pharmaceuticals (Goldman Sachs, Morgan Stanley, UBS, China Merchants 328 25 February HKEX Phase 3
Securities
Gossamer Bio (BofA Merrill Lynch, SVB Leerink) 317 7 February NASDAQ Phase 2
Cellid (Morgan Stanley, Citic CLSA) 277 20 February KOSDAQ Phase 1/2
Alphamab Oncology (Morgan Stanley, Citic CLSA) 234 12 December HKEX Phase 3
IGM Biosciences (Piper Jaffray) 201 12 December Preclinical
Turning Point Therapeutics (Goldman Sachs, SVB Leerink, Wells Fargo, Canaccord 191 18 April NASDAQ Phase 1/2
Genuity)
a
GenMab listed in 2000 on the Danish exchange. HKEX, Hong Kong Exchanges; KOSDAQ, Korea Exchange. Source: BCIQ BioCentury Online Intelligence
The COVID-19 effort has generated
its own flurry of deals — including, most Box 1 | The numbers
recently, Merck’s May 2020 acquisition
of private Austrian biotech Themis, with Nature Biotechnology has published a the unique attributes and situations
its measles virus vector-based vaccine report on public biotech companies that make up the research-driven
technology. The pandemic has not curbed using a similar methodology since 1996. biotech sector.
big biotech or big pharma’s broader pipeline Our definition of what constitutes a The data were provided by consultants
hunger, either. Non-COVID-19-related biotech company has changed with Ernst & Young. The top-ten lists and
deal-making has slowed, but not stopped. the industry, as have our methods other aggregate lists are sourced
It is mostly restricted to partners with for gathering the information that appropriately, although mostly they
an existing relationship. (Carrying out powers this article. We generally are generated by an analysis of data
first-time meetings and due diligence over include R&D-driven companies built supplied by BioCentury. In this regard,
video conferencing is tricky.) Prices are on applications of biological organisms, because investors do not stratify the
holding up, at least for popular assets. systems or processes, or the provision biotech sector as stringently as Nature
In late May, Gilead bought a $200-million of specialist services that facilitate Biotechnology, we used money figures from
equity stake in Hayward, California-based biological understanding. We exclude across the biotech and biopharmaceutical
Arcus Biosciences, at a price nearly triple pharmaceutical companies, medical arena to best highlight trends. Companies
the company’s valuation during most of device firms and contract research delisted in 2019 from major exchanges
2019. The deal mirrored Gilead’s noteworthy organizations to better focus on were excluded.
2019 collaboration with Galapagos of
Mechelen, Belgium — in structure, if
not size. A further $175 million up front
sealed Gilead’s access to a palette of cancer
drug candidates, led by a humanized
2014
IgG1 mAb targeting TIGIT (T-cell 8.54 10.74 9.04 21.49 3.27 36.99
immunoreceptor with immunoglobulin 2015
and ITIM [immunoreceptor tyrosine‐based 7.49 28.69 13.99 50.27 2.88 58.46
inhibitory motif] domains) in phase 2 2016
IPO
Follow-on
trials for non-small-cell lung cancer, in 6.91 9.97 12.52 44.82 2.76 62.96
Year
Venture
various combinations with the anti-PD1 2017 Debt and other
(programmed cell death receptor 1) fully 5.50 22.32 15.53 21.35 6.09 58.68 PIPEs
human IgG4 mAb zimberelimab and AB928, 2018 Partnerships
10.96 25.58 23.40 17.61 3.58 77.82
a small-molecule adenosine A2a/A2b
receptor antagonist. (On March 2, before the 2019
10.61 22.54 21.50 13.80 2.47 72.88
pandemic roiled markets, Gilead forked out
0 20 40 60 80 100 120 140 160 180
$4.9 billion, also at a healthy premium, for Amount raised ($ billions)
five-year-old immune-oncology firm Forty
Seven and its humanized IgG4κ anti-CD47 Fig. 1 | Global biotech financing. Financing over the past six years. Source: BCIQ BioCentury Online
mAb antibody magrolimab, in phase 2 trials Intelligence.
Nature Biotechnology | VOL 38 | July 2020 | 798–811 | www.nature.com/naturebiotechnology 799feature
for myelodysplastic syndrome and acute 4,500
myelogenous leukemia.) NBI
The sector’s public prominence amid the S&P 500
pandemic may also have reduced the threat
4,000
of immediate curbs on US drug pricing,
according to many analysts — a threat that
cast a shadow over the industry during 2018
and 2019. President Trump is looking to 3,500
the sector to help him navigate out of the
Index
lockdown, restart the economy and win
another election: hardly the time to clobber
3,000
it with unfriendly new rules, such as an
international reference price index.
Clouds may be looming 2,500
It’s unclear whether the good times will last.
“It’s quite understandable that companies
are raising capital now, while markets remain 2,000
strong,” says Joshua Schimmer, senior
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managing director of biotech at Evercore.
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“We may still see a lot of volatility,” he says — Date
though acknowledging that, if the sector
continues to weather the crisis as well as Fig. 2 | Nasdaq Biotechnology Index over time. As of 6/1/2020. NBI, Nasdaq Biotechnology Index; S&P,
it has been, “it’s hard to imagine what else Standard & Poor’s 500 Index.
could derail it.”
Until now, trillions of dollars of
government support have cushioned the
full impact of lockdown on employment Box 2 | Heady IPOs in 2019
and household budgets (including, in the
United States, the affordability of health Danish antibody company Genmab’s of the region’s home-grown innovative
insurance) and created a sharp disconnect second coming (it listed in 2000 on the biotech sector, spurred on by the Hong
between stock markets and the underlying Danish stock exchange) topped the overall Kong stock exchange’s recent acceptance
economy. If and when that support dries IPO ranks. It raised $582 million in July, of pre-revenue companies and the
up and markets collapse, all but the boosted by a mature portfolio including ongoing US–China trade war, which has
best-capitalized companies could suffer. three approved (partnered) drugs and driven Chinese money back home. The
Negative news from the COVID-19 pipeline 20 clinical development programs Hong Kong IPO scene was bookended
will also take the heat off healthcare stocks (Table 1). The year marked Nasdaq’s by two cancer-focused biotechs: CStone
and some firms’ ability to raise capital. emergence as the definitive market of Pharmaceuticals, which raised $328
A second lockdown before a drug or vaccine choice for European biotechs, offering million in February, and Alphamab
is found will mean further trial delays access to more capital, more specialist Oncology, which drew in $234 million in
across non-COVID-19 R&D, stretching the investors and greater liquidity than local December.
resilience of biotech companies and their European exchanges. All but one of the 2019’s top ten IPO cohort was
investors even more. top eight European-company IPOs were a relatively young one: six were
Slowing markets will disproportionately in the United States. German cancer founded within the last decade; three
affect smaller and pre-revenue companies, immunotherapy and vaccine company (BridgeBio, Gossamer Bio and CStone
including those whose clinical trials have BioNtech raised $148 million in October; Pharmaceuticals) were just four years old.
ground to a halt during the pandemic its upward share trajectory received a The year’s mostly buoyant IPO market also
lockdown. The biotech industry has raised COVID-19 boost in 2020 as the company continued to draw in non-traditional
over $140 billion in debt over the last five advanced a handful of RNA-based funders, including crossover investors
years — including a further $10.9 billion so COVID-19 vaccine candidates into (which can invest in both private and
far in 2020. Some of this debt is plain vanilla trials. BridgeBio Pharma raked in public companies), private equity investors
loans to large, cash-generative biotechs like over $400 million in 2019’s third-largest (normally focused on revenue-generating
Amgen. But ‘convertible’ loans — which can Nasdaq IPO, with its enticing suite of firms) and sovereign wealth funds.
be converted into equity at a later date, such clinical-stage precision medicines tackling Deep-pocketed firms like Blackstone,
as at a subsequent financing round — have rare genetic diseases and genetically KKR, RA Capital and Bain Capital put
also become more popular over the past defined cancers. money behind pre-IPO candidates, helping
several years among smaller, pre-revenue Three of 2019’s top ten IPOs were bounce them onto public markets and
companies, in part because they delay the in Asia. This marks the continuing rise draw in more public funds.
tricky business of valuing such groups. In
early March 2020, BridgeBio Pharma raised
a higher-than-anticipated $475 million in
convertible notes; Gossamer Bio raised $200 In good times, borrowing is easy, and it equity offering). But in tougher times, some
million’s worth in May, alongside a smaller allows companies to avoid diluting the value companies may be unable to service or repay
equity offering. of their shares (which is what happens in an their debt, leading to bankruptcy — or a fire
800 Nature Biotechnology | VOL 38 | July 2020 | 798–811 | www.nature.com/naturebiotechnologyfeature
sale. Convertible loans, whose terms may
Table 2 | Top ten follow-on financings of 2019
vary from months to several years, may
also need to be repaid in full if a company Company Amount raised ($ millions Date
fails to meet fundraising targets; lenders Sage Therapeutics 575 02/27/2019
get priority over shareholders in the case of
insolvency. Ascendis Pharma 575 03/05/2019
There are already signs of trouble. Seattle Genetics 575 07/23/2019
Companies relying on revenues from a Reata Pharmaceuticals 505 11/13/2019
narrow portfolio of hospital drugs have had
Amarin 460 07/18/2019
to cut costs or sell out at bargain prices.
In May 2020, Portola Pharmaceuticals, Deciphera Pharmaceuticals 460 08/14/2019
which sells Andexxa (recombinant human Alnylam Pharmaceuticals 388 01/14/2019
coagulation factor Xa inactivated-zhzo) Sarepta Therapeutics 375 03/05/2019
for excessive bleeding, was picked up by
Blueprint Medicines 345 03/28/2019
Alexion Pharmaceuticals for $1.4 billion,
or $18 per share — well below Portola’s Ultragenyx Pharmaceutical 340 02/26/2019
pre-COVID-19 share price of close to $30. Source: BCIQ BioCentury Online Intelligence
Sage Therapeutics — whose $575-million
follow-on financings topped the league in
2018 and 2019 — in early April announced
cuts to head count and costs, facing Table 3 | Top ten revenue-producing biotechs of 2019
dwindling sales of its hospital-administered Company 2019 revenue ($ millions) % change from 2018
postpartum depression medicine Zulresso
(brexanolone) and an idle sales force. Amgen 23,362 –2%
On the IPO markets, Pitchbook Gilead Sciences 22,449 1%
reports a flurry of listings by ‘shell’ Biogen 14,378 7%
companies (also known as special-purpose
Regeneron Pharmaceuticals 7,863 17%
acquisition companies), set up to buy
promising yet cash-hungry targets. Alexion Pharmaceuticals 4,991 21%
Tübingen, Germany-based T-cell cancer Vertex Pharmaceuticals 4,163 37%
immunotherapy-focused Immatics Illumina 3,543 6%
Biotechnologies in March 2020
bioMérieux 3,002 8%
reverse-merged into Nasdaq-listed Arya
Sciences Acquisition, raising $252 million. Incyte 2,159 15%
COVID-19’s full impact on the sector Novozymes 2,159 –2%
has yet to play out. A funding squeeze may
Source: Ernst and Young
lead to better capital efficiency — a skill
some companies lost amid the funding
bonanza of the last few years. Industry’s
rapid, collaborative response to the virus and cell-based therapies and drugs for rare partnership monies topped $14 billion,
outbreak, along with some promises, diseases — hot spots in the years up to and beating 2018, largely thanks to Gilead’s
such as from AstraZeneca, to provide including 2019 — may rapidly be viewed $3.95-billion payment to partner Galapagos.
any eventual vaccine at cost, may help as less affordable as population health The Nasdaq Biotechnology Index also
restore the reputation of a sector criticized measures are prioritized, and if economists’ performed a lot better than in 2018. Much of
for price-gouging, hiding bad data and predictions of a deep, dark recession bear the 20% overall rise came in the last quarter
neglecting diseases of the developing world. out. “I worry that much of the money of 2019, more than making up for 2018’s 9%
Yet the drug pricing debate, if pushed flowing into the sector today isn’t going into decline (Fig. 2).
down the road, hasn’t gone away. The sector’s the right places,” says the fund manager. The $10.6-billion total IPO haul — only
value to society has never been clearer, but a fraction below the previous year’s — was
what society can afford to pay for that value A look back at 2019 dominated, as usual, by listings in the
is far less so, particularly as economies 2019 can seem either a long time ago or just United States. But Asia’s share of IPO money
reopen amid mass unemployment and yesterday, thanks to the distorting effect increased from 32% to 42%, filling the hole
heavily indebted governments. “It’s a delicate of a global pandemic. Yet public biotech left by a dwindling number of European
time for the industry,” says one analyst. companies’ resilience so far is due, in part, to listings. Targeted cancer immunotherapy
Longer term, this pandemic should 2019’s healthy financials, increased revenues and rare genetic diseases remained
mean more public funding for the life and robust investment in research and devel white-hot (Table 1 and Box 2).
sciences, driving emboldened private opment (Box 1 and Supplementary Table 1). Follow-on financing in 2019 totaled $22.5
investors to follow. “Investment into pharma Capital continued to flow strongly into billion — a slight fall from 2018, but still
and healthcare will continue to increase,” the biotech sector in 2019, even if the figures including four late-stage companies that
predicts one UK-based fund manager. didn’t quite reach the heady heights achieved each raised over half a billion (Table 2). Two
The focus of this investment may change, in 2018. Total public biopharma fundraising of those, cancer-focused antibody–drug
though. Governments are now much more was over $122 billion, with IPO and conjugate (ADC) company Seattle Genetics
likely to prioritize vaccines, anti-infectives follow-on offerings bringing in about $33 and depression-focused Sage Therapeutics,
and preventative care. High-priced gene billion of that (Fig. 1). Up-front (committed) were also in 2018’s top ten. Three dozen
Nature Biotechnology | VOL 38 | July 2020 | 798–811 | www.nature.com/naturebiotechnology 801feature
Box 3 | Vertex wins chase for revenues
Amgen clung onto number one in the molecules bictegravir (HIV integrase cystic fibrosis transmembrane conductance
revenue league, cashing in over $23 billion — inhibitor), emtricitabine (nucleoside analog regulator (CFTR) gene. Vertex bumped up
1% below its 2018 haul (Table 3). inhibitor of HIV reverse transcriptase) and its R&D spending by 24%.
A legal victory against Sandoz in August tenofovir alafenamide (nucleotide analog Biogen’s 10% drop in market
2019 pushed biosimilar competition to inhibitor of HIV reverse transcriptase) — capitalization over the year hid a very
number-one earner Enbrel (etanercept) plus near doubling of sales of its CAR-T cell bumpy ride. High-profile Alzheimer’s
years down the road; Enbrel price increases therapy Yescarta (albeit from a low base) disease candidate aducanumab, a fully
and volume growth across other products allowed the big biotech to blunt the impact human anti-amyloid-β IgG1 mAb, failed
enabled the biotech to neutralize the impact of competition to its HCV franchise. That futility analyses in two phase 3 trials in
of price erosion and competition elsewhere HCV expertise keeps on giving, though: March, wiping a quarter off Biogen’s value.
across its aging portfolio, including to Gilead’s value has risen by >12% since the But October brought a surprise resurrection
Neulasta (pegfilgrastim; recombinant end of 2019, to $92 billion, thanks to its attempt, when Biogen announced it would
methionyl human G-CSF (filgrastim) failed HCV drug candidate remdesivir. On submit the drug to FDA after all, based on
conjugated to monomethoxypolyethylene May 1, the adenosine analog became the a new analysis of the data that included
glycol). Management declared the start of a first COVID-19 therapy to receive FDA longer-term data from some patients.
new era of product-driven growth; fittingly, Emergency Use Authorization. Submission has since been delayed, but
R&D spending grew 10%. The company Vertex’s 33% value uptick over 2019 — this ray of hope, plus ex-US growth for
also expanded its geographic reach, worth $14 billion in market capitalization — spinal muscular atrophy drug Spinraza
paying $2.7 billion for a minority stake in tracked a similarly sized revenue increase. (nusinersen), helped nudge Biogen revenues
China’s BeiGene, which will commercialize Both were driven by uptake of its most to $14.3 billion, slightly higher than the
Amgen’s existing cancer drugs in China and recent cystic fibrosis medicine combination previous year. R&D spending fell 13%.
co-develop new ones. Symdeko (also called Symkevi; small Biogen generates three times Vertex’s
Gilead’s $22.4 billion in 2019 revenues molecules tezacaftor/ivacaftor and revenue, but Vertex is valued more highly,
were almost unchanged, signaling a ivacaftor) and early US approval and given its growth prospects. COVID-19
recovery from 2018’s declines. A growing launch of Trikafta (elexacaftor/tezacaftor/ has widened that gap: Vertex’s market
HIV portfolio, driven by Biktarvy triple ivacaftor and ivacaftor), targeted at patients capitalization has since soared beyond $73
therapy — a combination of small with at least one F508del mutation in the billion, while Biogen’s has fallen.
a b
450 Number of companies 140,000 120,000 Large
400 Number of employees 383 101,240 Mid
116,597 120,000 100,000 Small
350 Micro
Number of companies
Number of employees
100,000 80,000
Amount ($ millions)
300
250 73,758 80,000 60,000
200 184
60,000 40,000 30,398
150 21,550 23,788
107 40,430 40,000 14,730
20,000 8,695
100 9,044
3,245 6,215
23,222 20,000
50 32 0
0 0 –9,142
–20,000 –10,038
Large Mid Small Micro –12,238
Revenue R&D Profit/loss
Fig. 3 | Public biotech barometers. a, Number of companies and employees by market capitalization. b, Public biotech revenue, R&D spending, and net profit
and loss. Large cap, ≥$5 billion; mid-cap, $1 billion tofeature
Box 4 | Rising R&D spending targets rare diseases
Sixty-six biotechs doubled or more than $222 million in 2019, up 132%. Biotechs United Therapeutics’ chart-topping
doubled their R&D bills in 2019. Sixteen working on cellular therapies (Autolus 228% increase in R&D spend was due to an
of those spent more than $100 million on Therapeutics and Rubius Therapeutics) and $800-million up-front payment to Arena
R&D. Over half of those 16 are working on RNA-based medicines (Dicerna) were also Pharmaceuticals for a global license to
drugs for rare diseases, including Akcea on the list. phase 3 pulmonary arterial hypertension
(whose spend rose to almost $300 million, Investors are excited by the potential drug ralinepag, a prostacyclin receptor
up 125%), newly listed immunology of RNA- and cell-based technologies to agonist. Enrollment into those late-stage
player Gossamer Bio, autoimmune- and generate a range of new medicines. Rare trials is on pause. (Arena’s R&D spend also
inflammatory-diseases focused Viela Bio disease therapies continue to be attractive doubled in 2019; on June 1, the company
(which in May 2020 raised another $169 thanks to unmet need, low competition took advantage of frothy public markets
million via a follow-on stock offering) and and relatively high prices — though these to raise $316 million in a follow-on share
Netherlands-based Argenx, which spent dynamics may soon start to shift. offering.)
receptors 1 and 2 to the Fc portion
Table 4 | Top ten R&D spenders of 2019 of a human IgG1) and a higher
Company R&D spending 2019 ($ millions) % change from 2018 profit-contribution from partner Sanofi’s
sales of atopic dermatitis drug Dupixent
Gilead Sciences 8,306 98%
(dupilumab; a human IgG4 mAb targeting
Amgen 4,116 10% the interleukin-4Rα subunit) (Table 4
Regeneron Pharmaceuticals 3,037 39% and Box 4).
Biogen 2,265 –13% Beijing-based BeiGene, working
on targeted immuno-oncology drugs;
Vertex Pharmaceuticals 1,755 24%
rare-disease companies Alexion and
United Therapeutics 1,174 228% BioMarin Pharmaceuticals; gene-therapy
Incyte 1,154 –4% player Sarepta; and RNA interference
BeiGene 927 37% (RNAi)-focused Alnylam Pharmaceuticals
all spent more than half a billion dollars
Alexion Pharmaceuticals 886 21%
each on R&D.
Sarepta Therapeutics 734 83%
Source: Ernst and Young New approvals, modalities — and
sources of capital
Cancer and rare diseases, plus RNA-based
technologies, antibodies, ADCs and
seeks to fill the hole left by its declining 17% driven by wet age-related macular gene- and cell therapies enjoyed continued
HCV franchise. Regeneron’s $3 billion degeneration treatment Eylea (aflibercept; popularity in 2019, as reflected in the list
R&D investment in 2019 was up almost a recombinant fusion of portions of the of highest R&D spenders, as well as those
40% on the previous year, leading to lower extracellular domains of human vascular with the biggest increases in R&D. These
net income, despite revenue growth of endothelial growth factor (VEGF) new modalities were boosted by regulatory
Box 5 | Approvals keep investors interested
Alnylam’s growing product franchise — IgG1κ mAb conjugated to four molecules of $575 million of follow-on financing in
its second drug, Givlaari (givosiran), the small-molecule microtubule-disrupting July, helped the company more than
a synthetic siRNA molecule against agent monomethyl auristatin E (MMAE) double its value (to $19 billion) in 2019,
5-aminolevulinic acid synthase, was via a protease-cleavable maleimidocaproyl entering the top 10 biotechs by value. That
approved for acute hepatic porphyria — valine–citrulline linker) for metastatic meant massive returns for the company’s
caught the attention in early 2020 of urothelial cancer, was approved in largest shareholder, Baker Bros. Advisors,
private equity group Blackstone Life December 2019; sales of its first ADC a secretive hedge fund run by billionaires
Sciences, which agreed to provide product, lymphoma treatment Adcetris Julian and Felix Baker, which first invested
$2 billion to bridge the group across to (brentuximab vedotin; an ADC comprising over 15 years ago.
financial self-sustainability. Alongside a a chimeric anti-CD30 IgG1 mAb Seattle Genetics’ progress continued
$750-million loan, Blackstone bought conjugated to four molecules of MMAE in 2020. The FDA and the Swiss
half the royalties owed to Alnylam by via a protease-cleavable maleimidocaproyl authorities approved small-molecule
Novartis for cholesterol medicine inclisiran, valine–citrulline linker), which is sold kinase inhibitor Tukysa (tucatinib)
as well as taking an equity stake. outside of the United States by Takeda, for use in combination with capecitabine
Seattle Genetics’ second drug, Padcev reached $1 billion in 2019, even though and Herceptin (trastuzumab) for
(enfortumab vedotin-ejfv; an ADC US sales have slightly disappointed. patients with HER2-positive metastatic
comprising a fully human anti-nectin-4 This, along with pipeline progress and breast cancer.
Nature Biotechnology | VOL 38 | July 2020 | 798–811 | www.nature.com/naturebiotechnology 803feature
therapy encoding the human survival
Table 5 | Top ten mergers and acquisitions of 2019
motor neuron (SMN) protein under the
Target Acquirer Value ($ millions) Closing date control of a cytomegalovirus enhancer/
Celgene Bristol-Myers Squibb 74,000 3 January chicken-β-actin hybrid promoter) was
approved for spinal muscular atrophy by
Array BioPharma Pfizer 11,400 17 June
the FDA’s Center for Biologics Evaluation
The Medicines Company Novartis 9,700 24 November & Research division (Novartis acquired
Loxo Oncology Eli Lilly 7,234 7 January developer AveXis for $8.7 billion in 2018);
Spark Therapeutics Roche 4,300 25 February
and Sarepta’s Vyondys 53 (golodirsen;
an antisense phosphorodiamidate
Audentes Therapeutics Astellas 3,000 2 December morpholino oligonucleotide) got the nod,
Genomic Health Exact Sciences 2,800 29 July after an earlier rejection, for Duchenne
ArQule Merck 2,700 9 December muscular dystrophy (DMD) in patients
with a confirmed mutation amenable to
Synthorx Sanofi 2,500 9 December
exon 53 skipping.
Ra Pharma UCB 2,300 10 October The high number of drug approvals in
Source: BCIQ BioCentury Online Intelligence 2019 allowed several large-cap (valued at
over $5 billion) yet loss-making biotechs to
graduate from single- to multiple-product
nods and growing confidence of their (zanubrutinib) for mantle cell lymphoma, companies, moving them a step closer to
utility among prescribers and the physician a rare form of non-Hodgkin’s lymphoma; self-sustainability. Cancer company Seattle
community. Last year, the FDA approved Alnylam’s Givlaari (givosiran), an Genetics, RNAi-focused Alnylam and
48 new medicines, more than in any year RNAi-based medicine for adults with acute antisense oligonucleotide developer Sarepta
in the decade other than 2018, which saw a hepatic porphyria; and two gene therapies: were among them. Biotech companies’
bumper 59 approvals. Nearly half of the new the ex vivo Zolgensma (onasemnogene increasing contributions to overall
drugs were for rare diseases, including rare abeparvovec; an adeno-associated viral medicines approvals means more companies
cancers. They included BeiGene’s Brukinsa vector serotype 9 (AAV-9)-based gene with steady revenue streams (whether
Box 6 | Cancer and gene therapy dominates M&A ranks
Eli Lilly’s $7.2-billion purchase of biotechs came from Sanofi’s $2.5-billion or twice a month; their sales have
targeted-cancer drug pioneer Loxo cash deal in December 2019 for La Jolla, disappointed. Inclisiran’s mechanism
Oncology strengthens Lilly’s oncology California-based immuno-oncology firm enables a more convenient twice-yearly
portfolio and helps fill the $1.4-billion gap Synthorx — founded just five years earlier subcutaneous dosing regimen — an
left by erectile dysfunction drug Cialis, hit from Floyd Romesberg’s lab at the Scripps advantage that the COVID-19 experience
with generic competition in 2018. Loxo’s Research Institute, with a $6.25-million may amplify further still.
Vitrakvi (larotrectinib) was the first drug series A. The company’s platform for Roche’s $4.3-billion Spark Therapeutics
to receive FDA approval (in late 2018) for introducing unnatural amino acids allows purchase and Astellas’ $3-billion deal
use on the basis of genetic mutation, rather new pharmacological properties to be to buy Audentes underscored gene
than tumor location. Pfizer’s $11.4-billion encoded into lymphokines and other therapy’s successful ongoing journey from
purchase of Array BioPharma in June proteins. Synthorx raised about $230 experimental to established modality.
was driven by a similar urge to build million in total, including $150 million in Spark’s Luxturna (voratigene neoparvovec)
out oncology and catch up with domain its 2018 IPO. in 2017 became the first AAV-based gene
leaders Merck, Roche and the newly Not all of 2019’s multi-billion-dollar therapy to be approved in the United States,
enlarged Bristol-Myers Squibb. The draw: deals were around cancer. Novartis’s for retinal dystrophy caused by biallelic
approved BRAF/MEK small-molecule $9.7-billion Medicines Company purchase, RPE65 gene mutation. The company’s
inhibitor combo encorafenib (Braftovi) and announced in November, bet on inclisiran, pipeline spans blindness, hemophilia and
binimetinib (Mektovi) for BRAF-mutant an RNAi-based treatment licensed from lysosomal storage disorders. Audentes
unresectable or metastatic melanoma, Alnylam for treating high cholesterol. The brings to Astellas a fifth growth pillar
also in tens of further clinical trials, for Medicines Company filed for approval in around genetic medicine, driven by lead
indications including BRAF-mutant the United States and Europe. Novartis is clinical candidate AT132, which uses an
metastatic colorectal cancer. hoping the drug, whose phase 3 trials were AAV-8 vector to deliver a functional copy
Merck was not standing still in the race in atherosclerotic cardiovascular disease of the myotubularin 1 (MTM1) gene, whose
to dominate the multiplying categories of and familial hypercholesterolemia, will absence causes the rare neuromuscular
genetically targeted cancers. In December trump Amgen’s Repatha (evolocumab; disorder X-linked myotubular myopathy.
2019, it announced a $2.7-billion deal to a human IgG2 mAb targeting human Both Spark and Audentes will continue
buy ArQule with its phase 2 oral Bruton’s proprotein convertase subtilisin kexin to operate as quasi-independent units
tyrosine kinase (BTK) inhibitor for B-cell 9 (PSCK9)) and Regeneron’s Praluent within their respective parent companies —
malignancies. (alirocumab) on the basis of convenience. a partial nod to Roche’s pioneering
Evidence of the accelerated Those drugs (which target the PSCK9 Genentech partnership more than two
value-creation possible for cancer-focused protein itself) require injection once decades ago.
804 Nature Biotechnology | VOL 38 | July 2020 | 798–811 | www.nature.com/naturebiotechnologyfeature
Table 6 | Top ten licensing deals of 2019
Companies involved (role) Description Date Up-front cash
announced ($ millions)
Galapagos (licensor), Gilead Sciences Galapagos grants Gilead exclusive, ex-European product license and option 07/14/2019 3,950
(licensee) rights to develop and commercialize current and future programs
Amgen (licensor), BeiGene (licensee) Amgen partners with BeiGene to expand oncology presence in China 10/31/2019 2,700
Roche (licensee), Sarepta Therapeutics Sarepta grants Roche exclusive, ex-US rights to develop and commercialize 12/23/2019 750
(licensor) SRP-9001 to treat DMD
Alnylam Pharmaceuticals (licensor), Alnylam and Regeneron partner in a five-year deal to discover, develop and 04/08/2019 400
Regeneron Pharmaceuticals (licensee) commercialize RNAi therapeutics
Adaptive Biotechnologies (licensor), Adaptive Biotechnologies partners with Roche’s Genentech unit to develop 01/04/2019 300
Genentech (licensee), Roche (other) personalized and off-the-shelf T cell therapies to treat cancer
Akcea Therapeutics (licensor), Ionis Akcea grants Pfizer exclusive, worldwide rights to develop and commercialize 10/07/2019 250
Pharmaceuticals (other), Pfizer (licensee) AKCEA-ANGPTL3-LRx to treat cardiovascular and metabolic diseases
Jazz Pharmaceuticals (licensee), PharmaMar grants Jazz Pharmaceuticals exclusive US rights to develop and 12/19/2019 200
PharmaMar (licensor) commercialize lurbinectedin
Dicerna Pharmaceuticals (licensor), Dicerna grants Roche worldwide rights to develop and commercialize 10/31/2019 200
Roche (licensee) DCR-HBVS and additional therapies to treat hepatitis B virus infection
Dicerna Pharmaceuticals (licensor), Dicerna partners with Novo Nordisk to discover and develop therapies for 11/18/2019 175
Novo Nordisk (licensee) the treatment of liver-related cardiometabolic diseases using Dicerna’s GalXC
RNAi platform technology
CRISPR Therapeutics (licensor), CRISPR grants Vertex exclusive, worldwide rights to its current and future 06/06/2019 175
Vertex Pharmaceuticals (licensee) intellectual property covering CRISPR–Cas9 technology, endonucleases,
single- and double-cut guide RNAs and adeno-associated viral vectors to
develop DMD and DM1 gene-editing therapies
Source: BCIQ BioCentury Online Intelligence
from product sales or royalties) that of the group’s pipeline of small molecules, Alnylam and Regeneron joined forces
lenders feel confident lending to. In early spanning inflammatory diseases, fibrosis in April to discover, develop and sell
2020, private equity group Blackstone Life and osteoarthritis (Table 6). Notably, the RNAi therapeutics, primarily for eye and
Sciences lent Alnylam $750 million as deal fell short of an outright acquisition: central nervous disorders. Elsewhere,
part of a larger, $2 billion deal designed Galapagos maintains R&D independence, Lexington, Massachusetts-based Dicerna
to bridge the biotech across to financial but can’t sell out to anyone else (or indeed to Pharmaceuticals — which, rather than 21-mer
self-sustainability (Box 5). Gilead). The tie-up drove a 170% increase in double-stranded RNAs, uses Dicer-substrate
Galapagos’s share price over the year, valuing 25/27-mer asymmetric double-stranded
Billion-dollar babies the 20-year old company, which has yet to RNAs containing stabilizing RNA tetra-loops
Acquisitions and partnerships, as usual, produce a marketed drug, at $13 billion by (DsiRNAs) — signed up Roche and Novo
accounted for the lion’s share of public 31 December. Nordisk in the final quarter of 2019.
biopharma financing in 2019. Merger and The rest of 2019’s top-ten licensing Most biotech companies aren’t in the
acquisition (M&A) totals were dominated by deals featured the same heady mix multi-billion-dollar league. Many will have
the completion in January of Bristol-Myers of oncology and rare-disease assets, started 2020 with much less generous cash
Squibb’s previously announced acquisition of underpinned by oligonucleotide, gene- cushions; more than a few of those will have
Celgene. The year’s M&A cash haul of $90.5 or cell-therapy technologies. Roche in seen their clinical trial progress slowed or
billion was below 2018’s $103 billion, but December paid $750 million for ex-US stopped by the pandemic, making lucrative
there were 25% more deals worth over $1 development and commercialization rights deals or refinancing even less likely. The
billion upfront (Table 5 and Box 6). Many of to Sarepta’s clinical-stage gene therapy sector as a whole may be weathering the
them underscored the continued popularity SRP-9001 (an AAVrh74 vector containing a COVID-19 storm very well indeed, but
of targeted oncology, immunology and codon-optimized human microdystrophin at company level, there will be plenty of
rare-disease assets, as well as an increasing transgene driven by MHCK7, a losers, too. ❐
confidence in experimental therapy platform cardiac-muscle-specific hybrid promoter
technologies using oligonucleotide, gene- or comprising enhancer and promoter regions Melanie Senior
cell-therapy modalities. of the murine muscle creatine kinase and London, UK.
The ghost of Roche’s now decades-old α-myosin heavy-chain genes) for DMD.
yet pioneering partnership with Genentech Sarepta’s valuation had already doubled Published online: 30 June 2020
featured in 2019’s biggest partnership deal. during 2018 as revenues rolled in from its https://doi.org/10.1038/s41587-020-0593-1
Gilead’s ten-year tie-up with Galapagos, first DMD drug, Exondys (eterplirsen); the
announced in July, included a $3.95-billion company finished 2019 another 25% higher, Additional information
up-front payment and $1.1 billion in equity worth $9.6 billion — a whisker outside the Supplementary information is available for this paper at
investment. It gave Gilead first dibs on all top 20 biotechs by market capitalization. https://doi.org/10.1038/s41587-020-0593-1.
Nature Biotechnology | VOL 38 | July 2020 | 798–811 | www.nature.com/naturebiotechnology 805You can also read
