US biotech: Focus on positive growth and innovation

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Lu Rahman takes a snapshot of the US biotech market and how its successes are having a positive effect on its UK counterpart.

These are uncertain times for global markets. As the world attempts to recover from the Covid-19 pandemic, the fall-out from the conflict in Ukraine has added to economic upheaval. According to the International Monetary Fund (IMF), this will “contribute to a significant slowdown in global growth in 2022 and add to inflation.” The IMF adds that “global growth is projected to slow from an estimated 6.1% in 2021 to 3.6% in 2022 and 2023. This is 0.8 and 0.2% points lower for 2022 and 2023 than projected in January.”

Despite this we are hearing positive news from individual industry sectors, one of these being US life sciences. Figures from the US Bureau of Labor Statistics1 (BLS) say that employment in this sector grew by 5.3% from January 2021 to January 2022. Even more encouraging is that data from the BLS that shows that biotech R&D also grew by 11.5% during the same period.

A recent report by McKinsey & Company2 highlighted the level of investment in US biotech. “From 2019 to 2021, venture capital (VC) companies invested more than $52 billion in therapeutic- based biotech companies globally. Two-thirds of that went to start-ups with platform technologies.”

It goes on to outline that VC investors are keen to pursue emerging technologies that can tailor treatments to individual patients and deliver them to the target site with great accuracy. McKinsey & Company pinpoints six platforms which are currently causing the most excitement. These are: “Cell therapy 2.0 [which] can more precisely address diseased tissues or cells or address a wider range of disease (such as solid tumours); next-generation gene therapies [which] can edit and modulate DNA and RNA and have the potential to cure genetic diseases; precision medicine [which] can diagnose conditions earlier than other diagnostic tools can and tailor therapies to patients’ specific genetic profiles; drug discovery enabled by machine learning (ML) [which] can cut through vast swaths of data to speed the discovery and development of new drugs; strategies being developed for “undruggable” targets, including hard-to-hit proteins and hard- to-treat diseases, and new delivery methods can send novel therapies to the entire affected tissue precisely and safely.”

Opportunities and challenges

Interest in the US biotech market is strong. At the time of writing, GSK had announced its plans to acquire clinical-stage biopharmaceutical company Affinivax in a deal potentially worth over $3 billion. Affinivax is developing a novel class of vaccines, its most advanced of which is focused on pneumococcal diseases such as pneumonia and meningitis. Following encouraging results from a previous study, the company is moving on to a late-stage trial involving adults over 50. Paediatric trails will also begin soon.

“Affinivax grew out of our founders’ scientific and personal vision to drive vaccine innovation to make a meaningful impact on people’s lives, in both developed and developing countries,” says Steven Brugger, CEO of Affinivax. “Over the past eight years, we have taken that vision from the initial development of our MAPS vaccine platform at Boston Children’s Hospital to a pipeline of novel vaccines with our lead vaccine candidate in late-stage clinical studies.”

This innovation clearly appeals to GSK and the two companies are set to collaborate to develop vaccines that combat novel and resistant infectious diseases for which there are no effective immunisation strategies currently available.” The innovation in the US biotech sector underscores the reason why investment is appealing. Joe Landolina created a revolutionary gel to stop traumatic or surgical bleeds when he was 17. Now, he is 29 years old and co- founder and CEO of Cresilon. This Brooklyn-based biotech company recently submitted the gel for FDA 510(k) clearance for human use and raised $38.5 million in Series A3 financing. A version of the gel, Cresilon Hemostatic Gel (CHG) is currently being used by licensed vets treating pets during surgical procedures. If approved by the FDA for human use Landolina says it is intended to be used in minor external bleeds. It will also serve as the stepping stone for future applications to the FDA, including a product which is intended to be used in moderate to severe bleeding such as massive trauma. BridgeBio Pharma a commercial-stage biopharmaceutical company focused on genetic diseases and cancers, recently announced an exclusive license with Bristol Myers Squibb to develop and commercialise BBP-398, a potentially best-in-class SHP2 inhibitor, in oncology.

Under the terms of the agreement, BridgeBio receives an upfront payment of $90 million, up to $815 million in development, regulatory and sales milestone payments, and tiered royalties in the low- to mid-teens.

Immediately after this announcement BridgeBio revealed it was to sell a rare paediatric disease priority review voucher for $110 million. This financial injection followed the company’s disappointing Phase III results for its transthyretin amyloidosis medicine, acoramidis, as well as an episode of redundancies, highlighting that despite its success, this sector is not without challenges. Tracking back to the previous year the company had made significant strides and received two drug approvals from the FDA. However, the discovery, creation, testing and delivery of medicines to patients with genetic diseases and genetically-driven cancers is not without its challenges, and Michael Henderson, Chief Business Officer recognises this. “The main challenge we face is also our greatest long- term opportunity: how to move quickly to develop meaningful medicines for patients in need,” he says. “Ultimately, our hope is that more companies will emulate the BridgeBio model, bringing new investors to biotech and advancing more promising research so patients can access medicines which may have otherwise never been developed.”

Signs of growth

The US outlook however, looks promising. CBRE3, an expert in commercial real estate and services management, recognises the link between lab research job growth and the need for corresponding lab real estate. In a recent report, the organisation highlights that much innovation is currently emerging from biotech R&D. Employment here “increased by 11.5% year-over- year in January, slightly below its all-time record of 12.4% in March 2019”. CBRE adds: “The effect of job growth on life sciences real estate is significant. For example, the Boston-Cambridge market had a 93% positive correlation between life sciences employment and average asking rents for laboratory/R&D space between 2001 and 2020. The recent national life sciences employment gains should support market conditions in Boston-Cambridge, as well as other key markets around the country.”

Global effect

The success of the US biotech market is also having a positive effect on the UK sector as US firms look across the Atlantic at promising UK biotech businesses. According to UK law firm Bristows, UK biotech is undergoing an investment boom which it says highlights the increasing similarities between the two markets4. According to David Horner, Partner, and Nicholas Criss, Associate: “Not only are we seeing increased appetite from US investors for UK biotechs, but as a result, we are also seeing greater harmonisation in deal terms between the two markets.”

The authors note: “Perhaps the strongest indicators of the US’ growing interest in UK biotech are the point of entry for investment, and the sheer volume of cash flowing in: £10.6bn invested in the first three months of 2021, according to The Guardian. With this growth in capital being deployed, significant sums are being invested into companies at an earlier stage of their lifecycle, where concepts are, at times, still to be proved. If it could once be said that such companies enjoyed a healthy stream of investment, the arrival of US investors has arguably transformed this into a torrent.”

As the world continues to face many economic challenges, US biotech offers promise, innovation and inspiration. While we cannot foresee the long term effect of market forces or take into account the ongoing fragility within some areas of the market , the current economic status of this sector is encouraging, not just for the UK but the UK as well.


  1. naics4_541700.htm
  2. tries/life-sciences/our-insights/ what-are-the-biotech-investment- themes-that-will-shape-the-industry
  3. insights/briefs/growing-tal- ent-pipeline-fuels-life-scienc- es-revolution-amid-chal- lenging-equity-markets%20 ?utm_source=March+2022+Life+Scienc- es+brief&utm_medium=- press+release&utm_cam- paign=March+2022+Life+Scienc- es+release&utm_ id=March+2022+Life+Sciences+- press+release
  4. biotech-a-mirror-of-the-us-market/

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