Summary

Biotech’s tape looked substantially worse than its underlying fundamentals: the S&P 500 was down 6% over one month, XBI down 5% for the year, and small caps down 17% over three months. Sixteen of 18 members of the 2024 IPO class traded below issue price with a median 61% decline, while three of four 2025 IPOs were underwater; Becerra was the only exception, perhaps because of a near-term catalyst. Tess Cameron’s counterweight: companies making “exceptional progress” are now cheaper, pharma still needs pipeline assets, and “nothing has really changed in terms of fundamentals.”
M&A remains biotech’s most visible route to returns, but the panel warned against assuming acquisition will “save the day.” Eric Schmidt argued that independent companies now face skepticism after a successful launch as investors ask what comes next and discount the eventual patent cliff; Yaron Werber said that shift usually arrives within one or two years. Brian Skorney preserved the buy-side shorthand—“short the launch”—while Werber argued that biotech should fund fewer me-too programs and accept more risk on differentiated drugs capable of creating markets.
Cowen’s poor sentiment masked a more constructive BD setup, with companies cutting programs, extending cash runways, and Pfizer signaling greater acquisition capacity. Pfizer said this year’s BD capacity would be “10 to 15” and next year’s even higher, with limited vaccine needs, selective oncology interest around ADC combinations, and greater emphasis on internal medicine and I&I. Werber expects obesity to become “more of the biotech show,” led by differentiated dosing, tolerability, oral delivery, and muscle preservation rather than another efficacy arms race.
The week’s deals illustrated how targeted consolidation can work even without blockbuster-scale assets. Jazz agreed to buy Chimerix for roughly $935 million at a 72% premium after dardabaprone gained an accelerated-approval path in a 1,000–2,000-patient pediatric glioma setting; Schmidt called it a financial transaction where “one plus one can equal three.” AbbVie’s Gubra deal included $350 million upfront and $1.87 billion in additional deal value, securing a long-half-life amylin that analysts noted AbbVie is seeking to develop toward 15–20% standalone weight loss.
Negative-enterprise-value biotechs remain a structural indictment of capital allocation, because the market is pricing their cash as destined to be “invested to be a zero.” Tang Capital’s $3-per-share bid for the target company tested shareholders’ willingness to accept cash rather than proceed with its planned merger, while the stock fell 13% after the decision. Pliant became another fallen angel after BEACON-IPF was discontinued. Pliant fell roughly 40% for the week and 80% for the month despite having about $350 million in cash against a roughly $100 million market capitalization.
Biohaven showed both the promise and the valuation problem of extracellular protein degradation, while BMS’s Mirati setback showed that ostensibly de-risked M&A can still fail on basic drug properties. Biohaven achieved an 84% IgG reduction after four 1,000-milligram doses, numerically above efgartigimod’s roughly 75%, but Werber warned that deeper biomarker reduction need not produce a linear clinical benefit. BMS separately stopped MRTX1133 after PK problems, weakening the return from its $4.8 billion Mirati purchase and reinforcing Werber’s preference for buying earlier while explicitly taking clinical risk.
The regulatory backdrop carried unusually wide downside tails: an expanding measles outbreak met qualified vaccine advocacy, renewed autism research, and an FDA leadership transition. Cameron called RFK Jr.’s vaccine op-ed “strong headlines” but “a little fuzzier beneath the surface,” while Schmidt compared another vaccine-autism study to NASA reconsidering whether Earth is round. Makary’s hearing offered little clarity, and Werber saw plausible cases for vaccine policy worsening or improving after the outbreak; as he put it, “Who wants to be an outbreak president?”

Deep dive

1. Biotech’s market plumbing is obscuring intact fundamentals

Daphne Zohar’s opening tape was unequivocally bleak: the S&P 500 had lost 6% in one month, XBI was down 5% year-to-date, small caps had fallen 17% in three months, and long-short biotech funds were already down more than 10% for the year.
The IPO evidence was worse: 16 of 18 companies from the 2024 class traded below issue price, with a median 61% decline; three of four 2025 IPOs were also underwater. Becerra was the only exception, perhaps because it had a near-term catalyst. Fund closures and redemptions were forcing indiscriminate sales, although Stifel argued that the principal redemption period had passed.
Cameron’s bull case was deliberately fundamental rather than tactical: companies have advanced assets while becoming cheaper, private biotechs are stretching capital toward meaningful inflections, pharma still needs pipeline replenishment, and aging populations still need medicines. Her summary: “Nothing has really changed in terms of fundamentals.”

2. A successful launch now starts the patent-cliff countdown

Schmidt’s concern was not that biotech cannot commercialize; Madrigal and Verona were Cameron’s counterexamples. It was that after a good launch, investors pivot from applauding execution to asking, “What are you gonna do for me next?” and valuing cash flow against its eventual cliff. Werber said this skeptical transition usually comes within one or two years.
Skorney supplied the harsher buy-side version: “Short the launch,” or even, “The most value destructive thing a biotech company can do is launch a drug.” He called that overstated, but commercialization does turn an ambiguous “story stock” into a company measured against actual financial fundamentals.
Werber’s proposed correction was portfolio-level: biotech is weak at launching me-too products but can successfully launch “badly needed, differentiated assets” that create markets. That may require accepting higher development risk while funding “a lot less me-toos,” rather than relying on M&A to rescue undifferentiated pipelines.

3. Cowen’s austerity concealed a widening BD opportunity set

Werber described Cowen as increasingly industry-wide, with attendance making new highs each year but poor sentiment. The constructive signal was companies emphasizing how far cash could stretch and how many programs they were cutting; oncology developers with niche, launch-ready or Phase 3 assets were often trading near cash and looked ripe for consolidation.
Pfizer said its BD capacity would exceed last year’s, putting this year at “10 to 15” and indicating an even higher level next year. Vaccines offered fewer external needs, while oncology interest leaned toward smaller assets combinable with ADCs; internal medicine and I&I appeared the likelier focus.
Werber highlighted neuromuscular and immune diseases—including MMN, CIDP, gMG, myositis, Sjögren’s, TED, Graves’ disease, COPD, and asthma—as markets combining new biology with new modalities. His guarded floor call: “Valuations cannot go any lower, knock on wood.”

4. Jazz and AbbVie bought focused assets rather than instant franchises

Chimerix’s dardabaprone moved from a roughly $1 stock three or four months earlier to a $935 million Jazz acquisition after FDA alignment on accelerated approval using Phase 2 data, followed by priority review. Schmidt estimated a 1,000–2,000-patient US opportunity capable of supporting premium pricing and a multihundred-million-dollar opportunity.
Schmidt saw a classic Jazz “singles and doubles” transaction: Chimerix endured more than a decade of public-market struggles, while Jazz already owns oncology infrastructure that can launch the product at better margins. “It’s not gonna turn too many heads,” but “one plus one can equal three.”
AbbVie entered obesity through Gubra’s amylin rather than leading with another GLP-1, with $350 million upfront and $1.87 billion in additional deal value. Cameron highlighted its roughly 270-hour half-life and analysts’ view that AbbVie is seeking roughly 15–20% standalone weight loss—above what Cameron believed prior amylins had demonstrated.
Cameron rejected the idea that late entrants have missed obesity: “I don’t think it’s ever too late for something that’s different.” The next generation can compete through monthly dosing, oral peptides, tolerability, and muscle sparing; Zohar agreed that differentiation is shifting away from simply maximizing efficacy.

5. Fallen angels are forcing boards to defend every dollar

Skorney said the sector had generally contained at least 100—and at one point perhaps 200—negative-NPV names. Daphne had described these companies as trading at negative enterprise values. The message is brutal: investors assign no value to the assets and assume management will deploy the cash “to be a zero.”
Tang Capital offered one target company’s shareholders $3 per share in cash, but the company retained its planned merger and the stock fell 13% after the decision. Skorney considered the merger a good deal and a “fantastic infusion of capital” for the recipient company, while acknowledging that the target’s shareholders’ confidence in its Take 2 program was a point for debate.
Another panelist praised the target company’s board for quickly reducing its workforce and seeking an alternative use for capital instead of funding previously deprioritized programs after the lead setback. Boards too often continue spending; this team chose not to throw “good money after bad.”
Pliant became the newest example after a DSMB cited an imbalance in unadjudicated IPF-related adverse events and BEACON-IPF was discontinued. The stock fell about 40% that week and 80% over the month, leaving roughly $350 million cash against a $100 million market cap; Skorney nevertheless cautioned that IPF trials are exceptionally difficult and Cameron stressed the disease’s unmet need.

6. Biohaven’s biomarker win still has to become a clinical win

Biohaven’s Kv7 activator missed the primary endpoint in acute bipolar mania, but Skorney said expectations were “pretty much zero” because evidence supporting Kv7 in mania was thin. He saw limited read-through to Xenon or to Kv7 programs focused on epilepsy and depression.
The more consequential update was Biohaven’s IgG degrader: four 1,000-milligram doses produced an 84% reduction, versus roughly 75% after four weekly efgartigimod doses. The debate is whether a drug arriving years later with perhaps a 5–10% improvement offers enough differentiation, especially after preclinical models implied more.
Skorney remained enthusiastic about the extracellular-degrader platform, citing rapid pathogenic-factor reduction from Biohaven’s GD-IgA program in IgA nephropathy. Werber’s pushback—worth keeping—is that IgG reduction and clinical outcomes are not necessarily linear, particularly as rising placebo responses in gMG compress active-placebo deltas.
BMS’s discontinuation of MRTX1133 exposed the other side of platform risk. The G12D inhibitor looked potent preclinically but encountered PK difficulties across IV, liposomal, and oral formulations; Werber said the setback further disappointed expectations around the $4.8 billion Mirati acquisition.

7. Vaccine policy is sending supportive headlines and destabilizing signals

Cameron put the Texas measles outbreak at roughly 225 cases, with one CDC-confirmed death and another under investigation. RFK Jr.’s op-ed appeared pro-vaccine in headlines, but Cameron called its emphasis on individual choice and a balanced view of safety and efficacy “wishy-washy”; Zohar agreed that the message was mixed.
Schmidt’s distrust deepened during the discussion when Reuters reported that CDC planned a large vaccine-autism study. His analogy captured the panel’s exasperation: “What’s next? NASA is gonna plan a study into whether the Earth is round?”
Schmidt thought Makary “played the game not to lose” at his confirmation hearing, promising analysis and data without revealing substantive positions. Werber saw plausible cases for the issue worsening, as more attention goes to claims the panel considers debunked, or improving if the outbreak becomes a reminder of the importance of vaccination. “Who wants to be an outbreak president?”

8. The revolving door creates real conflicts—and indispensable expertise

Skorney called Pfizer’s hiring of former FDA director Patrizia Cavazzoni as CMO terrible optics under the new administration; his client note was titled “Revolving Regulatory Door Triggers Synchronous Facepalms.” With Scott Gottlieb also a Pfizer director, critics can easily allege regulatory-industry coziness.
His honest dilemma was that former regulators are exceptionally valuable precisely because they understand acceptable endpoints, trial design, division priorities, and what can sink a program. That expertise benefits development if conflicts and quid pro quo are controlled, but prospective employment can still create concern about whether current regulators treat companies too favorably.
Zohar and Cameron rejected blanket definitions of conflicts, using Vinay Prasad’s call to fire oncologists who receive pharma money as the counterexample: leading investigators often receive support because they run clinical trials. Their preferred safeguards were disclosure, ethics review, and strict limits on former regulators’ contact with the FDA—not discarding the collaboration required to bring drugs to patients.

9. Good networking protects both sides of the introduction

The discussion’s practical rule was to state the real objective instead of asking vaguely to “pick your brain.” An open-ended conversation is still legitimate, Cameron added, if the person explains the motivation—for example, evaluating a move from big pharma into biotech—so the recipient can guide the discussion intelligently.
Introducers also have reputational capital at risk: sending a low-value contact can take “an ax to your relationship” and weaken future introductions. The preferred mechanics were research, a specific reason for approaching that person, and dual opt-in before connecting both parties.
On Nasdaq’s proposed 24-hour trading, Cameron expected low overnight volume rather than a structural transformation. Skorney anticipated 3:00 a.m. client calls asking why a stock rose 10% “on five shares”; Werber expected early mayhem, eventual innovation, and ChatGPT taking the overnight call.

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