Episode 135 - March 21, 2025
Summary
The HIV-prevention trade in Gilead now has a policy variable large enough to matter. Brian Skorney tied the twice-yearly lenacapavir PrEP thesis—about $4 billion of 2030 consensus revenue versus roughly $2 billion currently from Descovy PrEP—to adherence benefits he called “forced compliance.” With CDC HIV-prevention spending near $1.3 billion annually and federal recommendations influencing broader payer behavior, even a partially walked-back HHS funding report was enough to pressure the shares.
Immunovant’s batoclimab readout supported deeper FcRn suppression but left the market arguing about placebo, not drug effect. The 680 mg dose reduced MG-ADL by 5.6 points, versus 4.7 at the lower dose and 3.6 on placebo; Matthew Gline called 5.6 the largest absolute reduction shown in a large late-stage MG study, though placebo-adjusted deltas looked less exceptional. Immunovant will prioritize IMVT-1402, designed to preserve the deeper IgG suppression seen with its antibodies without batoclimab’s albumin reduction and LDL elevation, while accepting that Vyvgart will be “tough to unseat” in MG and CIDP.
The batoclimab event also revealed how little some market participants care about management’s interpretation of clinical data. With roughly 20% of the float short, Immunovant held 25 investor meetings after the release—and Gline said zero pod funds requested one. His uncomfortable conclusion was that the company had become “the object of a prop bet at the Super Bowl,” while Eric Schmidt offered a softer explanation: event-driven funds may simply have closed the trade and moved on.
Incyte’s povorcitinib probably clears the approval bar in hidradenitis suppurativa, yet may not clear the competitive bar. Both trials and all dose arms beat placebo, but Schmidt judged the data “pretty good” rather than great, broadly around IL-17 efficacy and possibly weaker than Bimzelx. AbbVie’s Rinvoq gets the next shot in the first part of next year, potentially contesting a $1–2 billion third-line opportunity just as Incyte needs pipeline growth ahead of Jakafi’s eventual loss of exclusivity.
The DMD exon-skipping benchmark may have moved from 1–3% dystrophin toward 10–25% in some cases. Avidity’s exon 44 and Dyne’s exon 51 programs produced near-normal CK levels—something Schmidt said had “never, ever” been seen consistently—and reported full-length dystrophin in a range associated with the roughly 10% threshold Skorney associates with a Becker-like rather than classic DMD phenotype. Yet neither company has shown the functional outcome that matters, and Skorney stressed that randomized evidence for dystrophin-replacement therapies remains unresolved.
The Elevidys death made its uncertain efficacy—not the existence of AAV liver toxicity—the central risk-benefit issue. Sarepta fell about 25% after a treated patient died from liver failure in a case complicated by apparent latent CMV reactivation; high-dose systemic AAV toxicity was already a known class risk. What sharpened the debate was Elevidys’ history of failed randomized primary endpoints and approvals granted over parts of FDA’s review team, leaving the field “operating in Plato’s cave” about whether microdystrophin meaningfully benefits patients.
Large-cap safety and frontier private assets are attracting capital at the same time public development-stage biotech is being marked down. Alnylam rose 10% after receiving a broad vutrisiran ATTR-CM label, but Schmidt read much of the move as a “flight to safety,” not an approval surprise. Meanwhile, AstraZeneca and Sanofi paid hundreds of millions upfront for early private platforms; Gline argued this could have a “weird compressing function,” raising early-stage asset values while reducing pharma’s need to buy late-stage public companies for billions.
Deep dive
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