Oncology

Right now is “singularly, the most exciting moment” in Daiichi Sankyo’s 100-year history, said Ken Keller, CEO and president of the company’s U.S. business and head of its global oncology unit.

Riding high from the success of the AstraZeneca-partnered blockbuster cancer medication Enhertu, the company in October announced a partnership with Merck & Co. valued up to $22 billion. And with potential new approvals coming this year, Daiichi is on track to become a cancer powerhouse ahead of its own schedule.

Born from a 2005 merger between two long-standing Japanese pharmas — Sankyo Co. and Daiichi Pharmaceutical Co. — the company has been “cardio-centric” for most of its history, Keller said. Now the second largest pharma in Japan, its diversified portfolio also includes vaccines, migraine meds and more.

But Daiichi trained its eyes on oncology in 2020 when it launched Enhertu for HER2-positive unresectable or metastatic breast cancer, vowing to become a “top 10 cancer pharma company” within a decade. 

“That was a big ambition coming from zero,” Keller said. “Here we are, five years later, and we’ve changed how cancer is treated.”

The company’s special sauce is a proprietary antibody-drug conjugate platform called DXd it used to develop six candidates for multiple cancers. Since an original nod in breast cancer, Enhertu has racked up approvals for several other HER2-related indications, including the first tumor-agnostic approval for an ADC, which the FDA granted in April. 

Daiichi and AstraZeneca, its development and commercialization partner for Enhertu, also recently announced positive topline results from a phase 3 trial in patients with lower levels of the HER2 protein. The results, which the companies said showed a “statistically significant and clinically meaningful benefit” in progression-free survival, could help move the ADC into earlier lines of care.

Meanwhile, the company has three key PDUFA dates within nine months. This June, the FDA will render a decision on a HER3 treatment for non-small cell lung cancer that is now a part of its three-drug collaboration with Merck. The agency is also slated to announce decisions for a TROP2-directed ADC Daiichi is developing with AstraZeneca — first in NSCLC this December and then for breast cancer in January 2025.

If the approvals are granted, Keller said Daiichi will be poised to hit “top 10 cancer company status” by fiscal year 2026. 

It’s got plenty of competition. With ADCs becoming one of pharma’s hottest commodities, Pfizer scooped up ADC specialist Seagen in a $43 billion acquisition last year. But Daiichi is slated to dominate the ADC market through 2029 with the highest level of sales, according to analysis by GlobalData.

Here, Keller discusses growth prospects for Enhertu and how ADCs could one day become curative treatments in cancer care. 

This interview has been edited for brevity and style.

PHARMAVOICE: Sales for Enhertu more than doubled last year from about $1.25 billion in 2022 to $2.5 billion. Tell me about the long-term prospects for the drug.

KEN KELLER: Today we’re looking at five indications that we’ve received. We announced a positive pivotal trial, which would be another indication [and] a pretty amazing potential indication in the HER2 low space. The study looked at using it to displace chemotherapy rather than after chemotherapy, and we also demonstrated efficacy in the ultra-low HER2 setting. 

When you look at breast cancer, HER2 positive is about 20% of cases, HER2 low is about 50%, and including ultra-low means we can help close to 90% of women with breast cancer. It would be the biggest drug ever in breast cancer. That gives you a sense of where the program is going. 

Enhertu has been massive for Daiichi, but is the company relying too heavily on this single drug for future growth?

Enhertu is the foundation of everything we’re doing. Today we’ve got the ADCs we’re developing with Merck and AstraZeneca, we have two other DXd treatments in the clinic and we are leveraging our leadership in ADCs. So, we’ve got second and third generations of treatments we’re working on right now.

We’ve got a decade of clear growth, and hopefully our technology continues to grow and improve.

Do you see any new, big partnerships on the horizon? 

It’s going to come down to the specific molecule or ADC we’re talking about. If we have a drug that we think has just a few indications, we can do that ourselves. If we have a drug that we think can be used across a dozen different cancers, that’s when we think about how we can develop it as fast as we can, and get it to as many patients as we can. 

I’ve been here about 10 years and was the first employee of the oncology unit. Back in 2015, we had one oncologist — today we have over 2,000 people in the oncology part of our business. We are much more capable today, but we know we have to be open to working with others.  

One of the biggest criticisms of emerging technologies in oncology is that pharma companies are making blockbusters out of drugs that only add months to patients’ lives. Do you have development efforts underway aimed at improving outcomes for ADCs?

This is what makes this DXd platform so unique. In our first indication [for Enhertu] we compared it to Kadcyle from Genentech, and we didn’t add months to survival — we added years. In second-line breast cancer, we added 28 months of progression-free survival compared to six.

When I look at starting an oncology franchise within a company, you couldn’t find a more profoundly beneficial drug. But two things are going to make a difference going forward.

We are going to move into early-stage disease and catch it earlier with a potent drug.

The second is moving into a combination setting with immuno-oncology treatments like Keytruda. We started in late-stage as a monotherapy, and as we move earlier and look at the power of ADCs and immuno-oncology, we think that could change things. 

In the earlier stage and in the adjuvant or near adjuvant setting, a cure is the goal.

Among the strategies Big Pharma is employing to achieve more equitable health outcomes, AI is now playing a larger role. For AstraZeneca, a series of AI-based partnerships and screening initiatives is setting the stage to gather and use data for cancer patients in neglected ZIP codes.

As it stands, innovation is outpacing health equity, widening the gap in oncology between patients who have access to novel medicines and those who do not, said AstraZeneca’s senior vice president and head of U.S. oncology Mohit Manrao.

Black Americans have higher death rates than any other racial group for many cancer types, according to the NIH’s National Cancer Institute. Furthermore, people without access to healthcare are more likely to be diagnosed later in their disease trajectory, putting them at greater risk of death.

“Science is moving so fast, but the job isn’t done after that,” Manrao said. “The challenge we have at a local level is that disparities are increasing, and more and more people fall through the cracks. Everyone in the system has good intent, but it’s important that as an industry, we embrace opportunities and collaborate to solve for it.”

AI is one of the most promising opportunities for improved health equity, Manrao said. By teaming up with diagnostic makers and AI companies, AstraZeneca wants to use data to expose the disparities in care, and address screening and access issues that exacerbate them. Manrao said AstraZeneca’s mission goes beyond developing oncology meds like the blockbuster Enhertu, which was originally approved for breast cancer in 2019 and recently scored a new expanded indication, and AI can find patients who need it.

“There is no reason that a Black woman with breast cancer in New York should have different outcomes than a white woman living in California or Atlanta — the ZIP code lottery exists today,” Manrao said.

Here, Manrao discusses the effect data-driven AI can have on the understanding and mitigating disparities in cancer care, the partnerships AstraZeneca has sought to bring AI into the fold, and how the feedback loop will also help drive better R&D for more equitable outcomes down the road.

This interview has been edited for brevity and style.

PHARMAVOICE: How do you characterize the impact that AI can have on patients, particularly from a health equity standpoint?

MOHIT MANRAO: Availability of data has multiplied in a multitude of ways, both in terms of genomic data and multi-omics data at a patient level and a customer engagement level.  Similarly, science, technology and data are converging very quickly, and that helps us believe we can have an impact on patients at every level. From a health equity lens, beyond our bread and butter in biopharmaceutical innovation, we want to start looking at the entire patient pathway and ask new questions. Are patients getting screened? What are the risk factors? Are they going to screening centers? Are they followed up appropriately in the system at the right intervals to be detected early?

Because of the socio-economic determinants of health, we need to have individualized interventions to solve for specific barriers that get in the way of a specific patient.

Because AI is trained using past examples, bias often finds its way into algorithms. How do you advance AI so that it can actually introduce progress rather than remain with the status quo?

It’s a super important point. Being aware of bias that would get into a system and putting checks and balances around it can help us look at health equity. Across the pharmaceutical value chain, it starts with inclusive R&D. We have drugs that get developed based on biosamples, and we’re working on creating diverse biosamples that are representative of the populations we serve. Of course, we can’t do that alone. So working at a local grassroots and community level to bring those diverse biosamples into drug development helps ensure that patient recruitment meets those goals. 

For instance, at a clinical trial centered in a community in New Jersey that is 18% Black, we work with them to ensure that not only 18% is recruited from that community, but more so that we can help dig and gather data. And all this serves to help AI predict without bias.

Your AI strategy has been heavily partner-focused. How does a potential partner stand out within the AI boom?

When ChatGPT came out, it exploded into the world in a visible way, but we have been using AI in different parts of the value chain already. We have more than 700 data scientists who are AI experts working in different parts of our organization from early drug discovery to development to commercial organizations and operations. We’ve embedded them to think in terms of looking for partnerships — we can’t move forward alone. So looking at the right partners with the capabilities, values and vision in terms of transforming cancer care is very critical. For example, in early detection, there are a multitude of challenges. If we see that tissue-based screening is a challenge, we work with blood-based companies to look at how we can help improve their assay. That led us to work with Grail in that space. 

Companies like Qure.ai can use technology to find lung nodules on X-rays that a naked eye couldn’t see, and companies like Clinithink have natural language processing that can go into electronic medical records. These are all important steps.

At the same time, let’s take the example of lung cancer — screening has been approved in the U.S. since 2013 and even a decade later, the uptake is dismal at only 5% to 6%. Socio-economic determinants are a barrier to lung cancer screening, and we’ve worked with the Association of Cancer Care Centers to understand and work with local communities, and use that rich data to inform where the pockets are, such as a rural Appalachian screening program for lung cancer in Kentucky. 

Similarly, we just announced a partnership with the University of Maryland system across counties in the state to identify at-risk populations. These academic and community institutes play a big part in the data-gathering process.

As you collect data, how does that feed back into the drug discovery and development process?

It’s critical that we put patients at the heart of drug discovery and development. All this data, in many ways, unlocks opportunities to uncover true unmet needs for patients, and the bigger picture is we want to eliminate cancer as a cause of death. Understanding through these datasets why the disease is progressing and informing R&D by identifying patients earlier. The partnership with Grail, for instance, helps us not only identify patients but also to look at the data and [see] which patients within this group are high-risk and the kinds of interventions they need. So this is integrated across the internal value chain.

The secret sauce for us, and it’s not truly secret, is external collaboration. We don’t shy away from partnering with the right party. What stands out for us and for anybody who wants to move the needle for patients is that we can’t work in silos.

Sponsored content

By Scout

Oncology patients often face severe symptoms, complex treatment regimens, and emotional distress that make it difficult to meet the demands of the clinical trials that aim to advance oncology treatments. A patient-centric approach can help alleviate these burdens and improve the overall trial experience for these patients. Read on to explore how adopting this approach in the design and execution of oncology clinical trials can impact the success of oncology clinical trials. 

The importance of a patient-centric approach 

Putting the needs and experiences of the patient at the forefront of trial design and execution requires viewing the entire patient beyond the diagnosis. Considerations such as reducing patient burden, facilitating accessibility and ensuring clear communication throughout the trial process offer numerous benefits: 

• Improved recruitment and retention. By addressing patient needs and concerns proactively, clinical trials can attract a wider pool of participants and ensure their continued participation. 
• Stronger ethical standards. Oncology patients are a vulnerable population. Prioritizing patient well-being and rights in clinical trials promotes ethical standards and builds trust with participants. 
• Enhanced quality of data. When patients feel valued and supported, they are more likely to adhere to trial protocols, leading to more accurate and reliable data. 
• Better patient outcomes. A positive trial experience can boost a patient's morale and overall well-being, potentially improving their health outcomes.  

Real-world application: Global oncology case study 

Scout took a patient-centric approach to overcoming recruitment challenges among hard-to-reach patient groups in a global Phase III oncology study conducted across North America, Asia, Europe and Latin America. In this study, a pharmaceutical sponsor aimed to evaluate the effectiveness of their drug in preventing cervical cancer recurrence in high-risk women.  

However, they faced recruitment challenges due to the preventative nature of the protocol, which included a placebo-controlled arm where no drugs would be administered. This, paired with financial concerns, resulted in significant barriers to patient recruitment and retention among the oncology patient population.  

Scout was engaged to increase patient recruitment and retention by easing patient burden. Scout Clinical services including ground transportation, expense reimbursement and time/wage loss compensation were provided for the 450 patients participating in this complex global study. Furthermore, Scout adapted to changing circumstances including new site activation and changing country regulations. 

Scout's patient-centric approach included: 

1. Drafting appropriate Informed Consent Form (ICF) language for each country's Institutional Review Board (IRB)/Ethics Committee (EC), considering the regulatory and data privacy guidelines of each participating country. 
2. Guiding the Project Management Team through the IRB/EC submission, revision and approval process as it related to patient services for each country. 
3. Creating custom patient and site documentation with certified translations for all patient languages. 
4. Conducting live, virtual training with Clinical Research Associates (CRAs) and site personnel on Scout’s services and systems to facilitate ease of use and overcome barriers to utilization. 

 As a result, patient enrollment for the study remained on schedule and feedback from all stakeholders—patients, sites, Clinical Research Organization (CRO) and Sponsor—was positive. One patient even described the experience as "the best healthcare experience of [their] life," underscoring the profound value of these patient-centric services.  

Conclusion 

In oncology clinical trials, implementing a patient-centric approach can profoundly enhance patient experiences and outcomes. Sponsors, sites and CROs can greatly benefit from partnering with an experienced organization like Scout, which specializes in addressing the unique needs of oncology patients and their caregivers. Understanding the scope of services that can be provided is key and knowing how best to utilize these services considering the countries and patient populations involved is equally critical.  

Integrating this network of resources and expertise into the clinical trial process helps deliver a tailored, patient-centric experience that improves patient satisfaction and retention and ultimately contributes to the trial's success. By easing patient burdens and proactively addressing their needs, we can ensure more effective and inclusive clinical trials, leading to the development of better oncology treatments for all. 

At some point in a biotech’s journey — if they’re lucky — is a transition from a pure scientific and drug development company to a commercial organization. With that growth in mind, leadership needs to be agile and ready for anything.

Verastem Oncology is now on the precipice of filing for an accelerated approval of a RAS pathway-based combo to treat low-grade serous ovarian cancer, and the transition follows a CEO turnover as Daniel Paterson, who has been with the company “almost since the beginning,” took the helm last year.

The company’s lead candidate, a combination of the RAF/MEK clamp avutometinib with the FAK inhibitor defactinib, addresses mutations in the RAS family of genes, which occur in about a third of all cancers. Granted a breakthrough designation and having begun a confirmatory late-stage trial in December, the biotech plans to submit for approval with the FDA before the second half of this year with a potential launch in 2025.

That’s not all Verastem has on the burner. The company teamed up with fellow KRAS expert Amgen for a fast-tracked combo of avutometinib and Amgen’s Lumakras in non-small lung cancer, as well as another combination with Mirati Therapeutics’ (now part of Bristol Myers Squibb) Krazati in the same disease.

And with a wide range of cancer indications on the horizon for Verastem’s nascent technology, Paterson spent his first several months as CEO preparing for the next stage of success. Here, he talks about his transition to the lead role, an early pivot that made a big difference for the company’s current trajectory and what lies ahead as these cancer combos reach the market.

This interview has been edited for brevity and style.

PHARMAVOICE: When you entered the role of CEO last year, you had already been at Verastem for more than a decade, most recently as president and COO. Can you talk about that transition and what you brought to the table as you rose in the ranks?

DANIEL PATERSON: I’ve been at Verastem almost since the beginning, and so I clearly understood what was going on here, and there was no learning curve whatsoever. The only thing I’m spending more time on are external things like investor relations and outreach — and even that, I’d done a fair amount of previously. When Brian [Stuglik, former CEO who retired last year,] and I worked together, we used a divide-and-conquer approach, so the scope of what I touch in the organization hasn’t really changed.

Are there any aspects of the company you’ve changed since taking the helm?

We’ve got a great culture and we never wanted to change that — we’ve worked really hard for it, and people are here because they want to be here. They’re devoted to the mission, and I don’t see that changing at all. The biggest change will be as we gear up for commercialization and bring in some different people. It’s always a challenge to welcome a new group of people and change the focus of the organization from developing a therapy to then supporting the therapy and getting it out to patients. But that still doesn’t change the overall mission.

You’ve gotten a breakthrough designation for the combo of avutometinib and defactinib in low-grade serous ovarian cancer. But back in 2015, defactinib gave Verastem some trouble with a late-stage failure. How did you turn that clinical setback into a new attempt?

It’s an interesting evolution, because we did that study in mesothelioma, and with a single agent in a tough disease, it didn’t show what we wanted to show. But around the same time, we had done a study in KRAS mutant non-small cell lung cancer, again with defactinib as a single agent, and it had great tolerability and some efficacy, but it needed something else. And it was based on that work that we did a lot of preclinical work to find a combination that would be synergistic. And that’s how we got to MEK inhibitors generally, and avutometinib as a RAF/MEK clamp in particular showed the most synergy. We gained a mechanical understanding of why the two drugs worked well together, and what we’ve learned over the years showed that it makes a number of drugs work better, as well.

And so your work with external candidates stems from that exploration of synergies?

Yes, our focus is on external candidates. If you step back and look at the strategy we’ve articulated, we want to be the backbone of therapy for RAS-mediated cancers, which is about a third of all cancers — a huge opportunity. With [Krazati from] Mirati Therapeutics and [Lumakras from] Amgen, avutometinib addresses their mechanism of resistance, and so it makes sense to combine.

With the submission for accelerated approval planned this year, what are you doing to be ready for that right now?

We’ve got a lot of activity behind the scenes, ranging from things that are very mundane and take a long time, like getting state licenses and getting computer systems and supply chains in place, and then the more exciting stuff like all the work we do with patient groups. We have a whole group that’s been out working with key opinion leaders and doctors to raise awareness around low-grade serous ovarian cancer. It’s one of those diseases that hasn’t gotten a lot of attention, and you have a group of patients who have largely been ignored. What we’ve tried to do is reach out to those groups, listen to them and work with them.

Where do you see this treatment fitting into the treatment landscape?

We think it has the potential to be a new standard of care. There’s a huge unmet need, and almost every patient with low-grade serous ovarian cancer is a potential candidate and they can stay on it for a relatively long period of time. That’s really just the beginning — we’re looking at this in combination with other treatments for pancreatic cancer, lung cancer, breast cancer, colorectal cancer and melanoma. The RAS pathway is widely applicable, and so we’re going broadly.

What are some of the challenges ahead for Verastem?

This is a tough business we’re in, and all you have to do is look at what’s happened to the biotech industry in the last three years. We’ve worked really hard to stay in a good position — we have a cash runway, we’re excited about the results we’re seeing, and we’ve been identified as a great workplace. It’s a tough funding environment and a tough regulatory environment right now, and generally, biology is hard. Sometimes you feel like ‘The Little Engine That Could’ when you’re fighting this stuff. Because we’re just one small company and we’re looking to make a big impact in this important disease and become a significant player in the oncology space.

What are the most important leadership qualities in biopharma in your opinion?

First and foremost are honesty, trust and openness. One of the things we try to do regularly is make sure people understand that bad things happen, but it’s how you react to it that matters. Especially on our major projects, we emphasize that if someone has an issue they bring it to the group. Instead of hoarding information or covering up bad news, we make sure we’re transparent. That way, everyone is very clear on the objectives and they have the resources to accomplish them — our job as leaders is to get those barriers out of the way.

Oncology research has attained priority status and has been flush with pharma research dollars for years. Drug development companies raised $7 billion in 2020 due to the disease’s heavy human toll, and cancer drug sales may nearly double to $320.6 billion by 2026. 

It’s no surprise then that three types of cancer — breast, solid tumors and prostate — made the top five list of most studied diseases in 2023, according to the Phesi Global Analysis report, which looked at more than 65,000 trials involving 100 million patients. Breast cancer, which topped the Phesi list for the third year in a row, is one of the two most common cancers globally and accounts for one in every three cancers in American women. A 2023 report from PhRMA found that there are currently 94 drugs in the pipeline for breast cancer. While the death rate for the disease dropped 43% from its peak in 1989 to 2020, there is still demand for more effective treatments for metastatic cancers and more aggressive types of cancer, such as triple negative disease, and those that express the HER3 protein, which have no approved treatments, according to PhRMA.

In addition to breast cancer, research into solid tumors and prostate cancer also made Phesi’s top five, coming in at number two and five respectively.  

“The positive news is there has been an increase in trial recruitment across all the top five indications in 2023,” said Dr. Gen Li, Phesi’s president. “What has been especially notable is the increase in solid tumor trials. These are likely to be the foundation of innovative cancer therapies, and investment in this area is a promising sign for patients.” 

Solid tumors have gained more attention in recent years, and 677 medicines are in development to treat them, according to PhRMA. An additional 78 medicines are in the works for prostate cancer, the most common in U.S. men.

The other two of the top five most studied disease spots last year went to COVID-19 and stroke research. Not surprisingly, trials for COVID lost steam through the year as the sense of urgency related to the disease dwindled and the public tried to put the pandemic behind it. 

“We have seen a marked reduction in investment into COVID therapies in 2023, likely due to there being fewer available patients,” Li said. “The prospective market for COVID therapies is less attractive for investment, and we expect this downward trend to continue.”

However, investments in stroke R&D jumped three spots from fifth in 2022 to second in 2023. The number of stroke-related deaths, particularly in younger people, is expected to double by 2050, which may be fueling interest in this area.

Overall clinical trial activity was also scaled back in the wake of the pandemic. Phase 2 trial attrition was down 1% since 2022, but still hovered at 28%, marking a sizable jump from the 20% attrition rate seen before the pandemic, according to Phesi. 

“Ultimately, the clinical development industry is beginning to recover from the pandemic, but we can expect the long-term impact to stretch into 2025,” Li said.  

This could slow the pace of new drugs coming to market and may put further pressure on future R&D costs.

Initial public offerings in biotech have appeared to be on the upswing in the first two months of the year, with a handful of launches reaching over $100 million. The offerings brought back some excitement after a few tough years marked by the rising cost of capital due to higher interest rates, other macroeconomic headwinds, a sluggish investment environment and fewer IPOs than during the pandemic.

The strong start has been hailed as a possible rebound for the industry, but it’s not quite time to celebrate, according to David Crean, managing partner of M&A and strategic advisory firm Cardiff Advisory. 

“It's a good start to the 2024 IPO class, but I think there needs to be a little bit more energy and momentum going into [the market],” Crean said. “It's not a switch you're going to just turn on.”

Instead of a flood of biotech IPOs in 2024, there may be a steady stream through 2025 as economic conditions improve and the market becomes more favorable. Looking at the performance of some of the companies that have launched in the first two months of the year is a good indicator of which biotech areas are now ripe for IPO success.

Top biotech IPO target areas

Companies that reaped millions in fundraising during the pandemic years when investors were “spending like drunken sailors”  due to historically low interest rates, may be readying for an IPO in the near future, Crean said. The sector’s troubles, defined in part by rising layoffs last year, may be symptomatic of a spending hangover rather than an ongoing challenge for the entire sector. 

And for those readying an IPO, the move may be to “survive to 2025,” according to Crean, who predicts more IPO announcements in the next 15 to 18 months. Interest rates could also fall in the coming months, which could rally the sector. 

The fundamentals that make for a good IPO candidate in biotech are largely derisked companies with late-stage therapies, according to Crean, although early-stage companies will still sometimes go public.

“For very early stage companies that are looking to go public, it represents some challenges,” Crean said. “As a public market investor, they'll want to see high-quality clinical candidates from drug development companies being prioritized over the earlier states that exit the risks.”

Beyond those fundamentals, investors are eyeing specific areas within biotech, including oncology, autoimmune and cardio metabolic disease. And 2024 biotech IPOs in these areas have already seen success. 

CG Oncology, the sector’s first IPO of 2024, initially raised a larger-than-expected sum of $380 million in its public offering and has since seen its stock rise further. The company, which is focused on developing therapeutics for patients with bladder cancer, launched its IPO at $19 per share and is currently trading around $35 per share as of market close March 12. The success of its launch and subsequent value growth makes the company one to watch, according to Crean, who pointed to the oncology focus and late-stage candidates as possible triggers for future IPOs.

Cardio metabolic disease and “anything to do with diabesity” — diabetes and obesity, said Crean — are other areas likely to see more IPOs. The success of Novo Nordisk’s Wegovy and Ozempic and Eli Lilly’s Mounjaro are indicators of investors’ appetite in the space. 

Crean also clocked autoimmune as a top target, and pointed to Kyverna Therapeutics, which launched an IPO in February that raised $319 million. The developer of cell therapies for autoimmune diseases launched its IPO with shares priced $22 a piece and is now trading around $29 per share as of market close March 12.

Biotechs to watch

While 2024 started off with a bang, a surge of IPOs could still be coming this year and into 2025.

“I don't anticipate a broadening of the big IPO market until maybe the second half of this year,” Crean said.

Recent moves by high-profile investors, the timing of the latest funding round and the financial momentum in the industry’s subsectors are all key factors when predicting potential biotech IPO candidates. With these fundamentals in place, some biotechs may be ready to pounce on improving market conditions. Here are some of the biotechs to watch for a potential IPO and some that have already announced their intended offering, according to Crean.

Boundless Bio: Precision oncology startup Boundless Bio recently announced its planned IPO, and the company has a strong cap table of “significant investors” behind it, including Bayer, RA Capital, Vertex Ventures HC and more. The early-stage biotech’s pipeline is focused on ecDNA-driven cancers. 

Alumis: Fresh off a series C funding round that brought in $259 million, Alumis is a clinical-stage biopharma company developing oral therapies for autoimmune diseases. The company plans to use the financing to initiate pivotal phase 3 clinical trials for its lead TYK2 candidate, ESK-001, which treats moderate to severe plaque psoriasis. The company has called its candidate “best in class,” and if approved, the drug would compete with Bristol Myers Squibb’s psoriasis pill Sotyktu, which scored an FDA nod in 2022. With recent funding, it’s unlikely Alumis will seek an IPO in 2024, but it could go public in 2025 or beyond, according to Crean.

Endeavor BioMedicines: With $163 million in funding already raised, California-based Endeavor Therapeutics’ pipeline includes two candidates for idiopathic pulmonary fibrosis. The company also penned a licensing agreement with Hummingbird Bioscience last year for exclusive rights to HMBD-501, a next-generation HER3-targeted ADC. With the company’s last fundraising round in 2022, it could be looking to raise capital through an IPO next. 

Autobahn Therapeutics: San Diego-based Autobahn Therapeutics develops regenerative medicines aimed at CNS disorders. Its early-stage pipeline includes small molecule therapies for both rare and prevalent CNS disorders, while its lead molecule, a CNS-directed thyroid hormone receptor beta (TRβ) agonist, is initially targeting major depressive disorder. Autobahn has raised nearly $109 million and counts Biogen, Pfizer Ventures and BMS among its major investors.

Colorectal cancer screening works. Yet, not everyone who needs screening gets it.

“The biggest epidemic, the biggest challenge we have for colorectal cancer is the unscreened population,” said Helmy Eltoukhy, co-CEO and chairman of Guardant Health, a California-based precision oncology company. “There are 50,000 Americans that die every year from colorectal cancer, and 76% of those deaths come from the unscreened population.”

It’s an issue that recently grabbed headlines when new research showed colorectal cancer deaths are rising among younger patients, and that colorectal cancer is now the leading cause of cancer death in men and the second-leading in women younger than 50. Although screening is effective, colorectal screening methods, like colonoscopies and stool sample testing, don’t always have the best compliance. According to the CDC, a statewide average of 69.4% of U.S. adults aged 50 to 75 weren’t up to date with colorectal cancer screening in 2020. 

“If we had a blood-based methodology to screen those unscreened individuals, it would probably, from our estimate, be one of the most significant advances in cancer mortality, at least in the last decade,” Eltoukhy said.

With that goal in mind, Guardant Health created Shield, a blood-based test that can detect colorectal cancer with 83% sensitivity through tumor DNA, according to a 20,000-patient study. It’s already on the market with a CLIA certification, but the company is also seeking FDA approval and is in the final stages of FDA review, Eltoukhy said.

“We expect that FDA decision, and hopefully approval, to come sometime this year, and if it does, it would be the first FDA-approved, Medicare-reimbursed sort of ‘liquid biopsy’ for screening ever,” Eltoukhy said.

The impact for pharma research

Guardant has two other Medicare-reimbursed blood-based cancer tests already on the market: Guardant Reveal, a companion tool which detects residual disease and recurrence in current early-stage colorectal, breast and lung cancer patients, and Guardant360, which can help doctors match advanced cancer patients with the right treatments and monitor their response.

Biotech companies also use Guardant360 for finding clinical trial candidates and validating drugs.

“If you could remove the friction in terms of finding patients because you can do things with blood rather than biopsies [or] other more involved medical procedures, it really reduces the time to enrollment,” Eltoukhy said. “We’ve seen a lot of success stories as a result.”

In addition, Eltoukhy said the drug validation capabilities have been useful for companies reevaluating their pipelines to ensure drug candidates have large enough indications in the face of Medicare price negotiations down the road.

“The fact that they’re thinking about the larger indications means they often have to measure twice and cut once,” he said. 

Guardant’s Shield is initially indicated for colorectal cancer, but that’s a “Trojan horse strategy” to test for other cancers, too.  

“The same test will be able to do dozens of other cancers. We have a 10,000-plus patient study that is enrolling very nicely in lung cancer,” Eltoukhy said. “Data rich blood tests, which have never really been part of the medical space, will start coming to bear with colorectal. But I think from there, all that data that’s unlocked will be so useful for many other applications over time.”

Pharma companies are also exploring ways to use the technology in other disease areas, such as inflammatory disease, rheumatoid arthritis and cardiovascular disease. He expects some of that work to be announced later this year.

“This is … the first breakthrough that is leading to what we all envisioned personalized medicine and precision medicine to enable,” Eltoukhy said. “We’re finally seeing that promise.”

Welcome Biotech Spotlight, a series featuring companies that are creating breakthrough technologies and products. We’re looking at Black Diamond Therapeutics, which is developing oral treatments targeting a broad swath of mutations in lung and brain cancers.

In focus with: Dr. Mark Velleca, CEO and chairman of the board of Black Diamond Therapeutics. 

Black Diamond Therapeutics’ vision: Cancer is destructive and wily — deftly mutating to outwit effective treatments. To help overcome this challenge, Black Diamond is developing oral therapeutics that target mutated types of non-small cell lung cancer (NSCLC) and glioblastoma, an aggressive brain cancer.

Why it matters: Patients with mutated cancers often have few treatment options. Those that do exist can bring challenging side effects. 

Black Diamond’s oral therapies have shown promise in treating tumors with cancer-driving mutations and are easier for patients to take, Velleca said.

The company’s pipeline: Black Diamond’s most advanced treatment, BDTX-1535, is in phase 2 for NSCLC and targets three groups of epidermal growth factor receptor (EGFR) mutations that can either arise with the tumor or develop in response to treatment with drugs like AstraZeneca’s blockbuster Tagrisso, which itself targets mutations driven by earlier inhibitors like Tarceva. 

EGFR mutations are present in 20% to 50% of NSCLC, the most common type of lung cancer. 

“BDTX-1535 is unique in that it hits the two big driver classical mutations, it hits all of these non-classical mutations, and it hits this new resistance mutation, C797S,” Velleca said. The C797S mutation is one that arose in response to Tagrisso. “[BDTX-1535] is the only drug that hits all three of those classes,” Velleca said.

In a phase 1 NSCLC trial, five of 13 patients with three mutated tumor types saw their tumors shrink by at least 30% when taking the once-daily oral treatment. The treatment appeared to stop tumor growth in seven other patients, and there was evidence that it reduced brain metastases. 

The company also saw favorable results in a phase 1 of BDTX-1535 for glioblastoma trial, which can also be driven by EGFR mutations. 

Another molecule Black Diamond has in the works is BDTX-4933, designed to inhibit class I, II and III RAF/RAS-mutant tumors. It’s now in phase 1 for KRAS-mutant NSCLC and RAF/RAS-mutant solid tumors. The company also has two preclinical-stage prospects.

The road to approval: Now, the goal is to get BDTX-1535 to market as quickly as possible to benefit patients, Velleca said. The company isn’t divulging its regulatory strategy, but if all goes well the drug could move into phase 3 in 2025, and hit the market in 2027. While there have been questions about Black Diamond’s rapid cash burn rate, the company has been reining in its spending to ensure it has enough steam to carry it through its projected 2024 milestones and into 2025.

Velleca said the company thinks BDTX-1535 can distinguish itself in a crowded NSCLC field because patients and doctors typically find once-daily oral treatments appealing. 

“Many of the newer therapies are antibody drug conjugates, which come with infusions every three weeks and lots of associated side effects,” Velleca said. “They’re not tethered to an IV pole.” 

BDTX-1535 could also find a place in multiple treatment stages. 

“We think there's an opportunity to benefit patients with this drug across all lines of therapy — front line, second line, third line,” Velleca said. 

Among the possibilities is providing a new option for patients whose cancers are no longer held in check by Tagrisso. 

“Where we're going to go first for registration, we have not disclosed yet. We’ll certainly let the data drive us there,” Velleca said.