DAY (11/15): PRRN CHALLENGE!
Hello! I am Priya, and thank you so much for being here! :)
31/03/2025
Quick disclaimer: There are a lot of medical and pharmaceutical terms mentioned below. Kindly note that this blog is simply to reinforce my learning and spread knowledge. I do not have a pharmaceutical background, so kindly make some provision for scientific inaccuracies, which may be possible! :)
Welcome to Day 11! :)
Today I mostly focussed my reading on a bunch of news articles and spared some time towards the very end to start Eli Lilly's earnings call of Q4 2024. There were some very interesting news updates today, very closely interlinked as well, so I'm sure you're going to enjoy this one!
BIOTECH INDEX FALLS
FDA layoffs were something that was expected since the GOP came into power, however, this particular official, Peter Marks, was largely respected in the healthcare community due to his overwhelming support for gene therapies and vaccines.
As a consequence of his resignation, investors have been battling much uncertainity, and indeed there is a high probability that, his replacement will be somewhat of a vaccine skeptic in line with Robert F Kennedy's POV.
The impact hit the stock market straight away with gene therapy companies experiencing a much steeper decline, and vaccine companies coming second. As I discussed in my previous article, gene therapy is anyway losing the interest of investors due to the ongoing failures in this space, and this news has aggrevated the same.
BIG TOBACCO PLEADING TO TRUMP FOR HELP?
On a different side, big tobacco companies are currently the biggest supporters of the GOP regimen.
There are honestly very valid reasons for the GOP to believe that the FDA isn't as effective as it should be. In the last 5 years or so, the penetration of illegal medicines/substances have been quite high, and the approval of legitamate drugs has been incredibly slow.
It seems the FDA lacks resources however with the number of discoveries that the pharma sector is at the onset of inviting, there really can be no excuse. By 2028, majority of the pharma patents are expected to reach expiry, hence many companies are going to be rushing to create new drugs to take their place.
Coming back to illegal substances, illegal vapes have been quite rampant in US, suspectedly arriving from China. Big Tobacco companies are hence, pleading to the GOP to somehow amplify their project of eliminating such vapes from the country.
This is likely to result in more people shifting to the legal alternatives that these companies are making, enhancing their market share.
These tobacco companies are earnestly trying to extend their support to every political regimen that comes into power, sometimes by donating in bunch to their agencies, and other times by maintaining rapport with their employees. This comes from a space of deep fear, that a simple legislation could result in their businesses being banned.
Despite this, out of a million applications, only 34 nicotine based products were approved by the FDA for sale, and almost all of them were vapes. Indeed such products should nowehere be encouraged in the country, however, such eradications are not going to happen in 1 night hence the better option would be to emphasize on the legal and safer options in the market.
CHINESE COMPANY MAKING BRAIN CHIPS?
This article truly left me creeped out!
So apparently The Chinese Institute for Brain Research (CIBR) and a company NeuCYBER are collaborating to create brain chips in China?! If you're any weirded out as me, you're probably having a lot of questions here, so let me explain.
So these brain chips are called Beinao 1.0, and are attached to the surface of the brain (not causing elaborate damage to the tissue itself) in order to help paralyzed patients use robotic limbs to achieve all their motor activities. It would also be able to transcribe their thoughts (terrifying) and would be able to better record patient's symptoms and their current records.
This was just their second clinical trial, tried on 5 patients. By 2026, they expect to try this product on atleast 50 patients!
In the US, only 2 companies are currently working on this technology, Syncron and Neuralink (by Elon Musk). The latter is an invasive technology, meaning it's actually placed inside the brain. Beinao 2.0 is also an invasive technology.
From a finance perspective, I only have some fundamental questions to judge its efficacy as a launch:
1) Who are its participants? Can the company truly assume no liability for a procedure that involves opening up a patient's skull to fit in an electronic device?
If no, then a small incident could amount to excruciating legal charges.
2) Even if medical authorities are alright with this drug being launched (which I doubt), would legislators and human rights activists actually allow it to be launched?
If not, what's the point of these large scale attempts? I think the best protocol is simply to wait and see...
NEW DEVELOPMENTS IN OVARIAN CANCER!
A company, Corcepts, has recently developed a drug called Relacorilant, which is proving to be extremely instrumental in the treatment of platinum resistant ovarian cancer. Platinum resistant cancer is a cancer that does not respond to the frontline treatment, which in the case of ovarian cancer typically involves the use of platinum.
So this drug apparently reduces the level of cortisol in a patient's body which helps the chemotherapy to better attack the tumour itself, causing a better progression free survival rate (PFS) in patients.
This is interesting as when I read Eli Lilly's concall, I noticed an immense focus on breast cancer treatments, so companies seem to be taking more keen interest in women's health in particular.
Competitors like Abbvie and Roche do exist, however this company might end up becoming the only drug that can, in collaboration with Chemo, treat such aggresive forms of cancer with minimal side effects. It is also worthy to note that it is currently in the late stage of its trails, hence, the reliability of these assesments is also slightly more.
AI DOING ROUNDS AGAIN!
Isomorphic Labs is an interesting company because its AI discoveries are able to predict different protein structures in the human body, which I believe will help to identify new molecules that might be able to work for various diseases. Also, they are able to predict the behavior of RNA and DNA in the body, which can help to curtail genetic diseases, or atleast react to them timely.
This company is huge because it can significantly reduce the amount of time needed to conclude clinical trails, and ensure drugs reach the market much faster. It can also result in more diseases being covered within the scope of modern pharma, and hence create several new opportunities.
Currently its association with an external VC will help to attract more superior talent to their company, and encourage more pharma companies to collaborate with them. Eli Lilly has already set foot on this journey.
ELI LILLY CONCALLS!
Finally I concluded my day by reading EL's Q4 2024 concalls!
Eli Lilly is no new topic in this blog. They are a leading pharma company who specialize in the incretin (obesity+diabetes) portfolio, as well as oncology and immunology.
Currently their biggest competitor is Novo Nordisk, however given that Novo's key molecule Semaglutide is almost approaching the end of its patency, and their current development CagriSema seems to be disappointing in clinical trials, the scope is large for Eli Lilly to maximize their market share in this space.
Even recently, Eli Lilly conducted a study called the Surmount 5 study. It was a clinical trial where they were comparing the efficacy of Novo Nordisk's Wegovy and their own drug, Zepbound and identified that their drug works much better, even though its reach is much more limited.
The likely implication here is that they are able to attract superior talent to their company, which is a big achievement. However, where Novo Nordisk only increased its marketing spend by 9% in 2024, Eli Lilly had to increase it by 26% (as per both concalls) which reflects how much work is needed to expand their reach.
They are also exploring the alternative uses of such incretins to treat other diseases. For example, they are currently exploring the use of Tizepatide (an incretin) in treating heart failure, and if you read yesterday's article, you'd know they are also actively discovering many new drugs in the cardiac space that are showing promising outcomes in clinical trials.
So they have this unique ability to explore and re-explore the same compounds, and develop far ranging uses to supercharge their portfolio. From a finance perspective, I can see this as a way to maximize their market share, at what may be a much lower cost to discovering newer molecules.
Additionally EL is also well involved in gene therapies as well. They have a Gateway Lab in the UK, and this also occured to me as a great strategy, because UK is far more stable when it comes to creating a conducive environment for medical research.
Irrespective of who comes to power there, they are very keen to support research, unlike in the US where there is a heavy conflict in how both parties approach this space. Eli Lilly too, constantly works with the government there to support their startups, and this provides them with much support and stability to carry out the work they want to do.
Despite such an incredible offering, supply constraints continue to be one of the most crucial challenges faced by the company. I realized a critical KPI they track, is the 'Number of Wholesaler Backorders', which is the number of orders they are unable to fulfill at a point in time, solely due to not being able to produce more.
A lot of this information was a repeat of what I had read before, however I judge this refresher will help me make better quality insights on tomorrow's read.
SEE YOU ON DAY 12 :)
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