Intelligience

𝐂𝐡𝐢𝐧𝐚 -𝐓𝐡𝐞 𝐍𝐞𝐰 "𝐎𝐧𝐞-𝐒𝐭𝐨𝐩 𝐒𝐡𝐨𝐩" 𝐟𝐨𝐫 𝐔𝐒/𝐄𝐔 𝐁𝐢𝐨𝐏𝐡𝐚𝐫𝐦𝐚? 𝐄𝐦𝐞𝐫𝐠𝐞𝐧𝐜𝐞 𝐨𝐟 𝐚 𝐏𝐥𝐚𝐲𝐛𝐨𝐨𝐤 𝐟𝐨𝐫 𝐃𝐞𝐚𝐥𝐬: ✔️US and EU companies are increasingly entering the Chinese market, utilizing a developed strategy for engaging in cost-effective “me too” or “me better” drug developments 𝐅𝐨𝐜𝐮𝐬 𝐨𝐧 𝐎𝐧𝐜𝐨𝐥𝐨𝐠𝐲 𝐚𝐧𝐝 𝐆𝐫𝐨𝐰𝐢𝐧𝐠 𝐀𝐫𝐞𝐚𝐬: ✔️While oncology remains a primary focus, there is a rising interest in immunology and cardiovascular metabolic deals, reflecting current hot areas in the pharmaceutical industry 𝐀𝐜𝐜𝐞𝐥𝐞𝐫𝐚𝐭𝐞𝐝 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐓𝐢𝐦𝐞𝐥𝐢𝐧𝐞𝐬: ✔️Chinese companies can deliver human proof of concept data more rapidly, allowing for reduced early development timelines. This provides opportunities for buyers to mitigate scarcity and pricing pressures in the market. 𝐒𝐡𝐢𝐟𝐭 𝐢𝐧 𝐀𝐬𝐬𝐞𝐭 𝐒𝐭𝐚𝐠𝐞𝐬 𝐚𝐧𝐝 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐨𝐫𝐲 𝐂𝐨𝐧𝐬𝐢𝐝𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐬: ✔️A noticeable shift has occurred towards early-stage assets due to FDA guidance highlighting that data solely from China is insufficient for regulatory approval. This has led to companies focusing on expediting early-stage development rather than late-stage Intelligience Opinion: ✔️Based on the deal making trends, it appears that for the remainder of 2025, U.S.-China biopharma dealmaking is poised for cautious growth amid a turbulent geopolitical landscape ✔️The Trump administration’s “America First” policies and potential trade war escalation including tariffs or sanctions, could hike costs for U.S. firms reliant on Chinese R&D or manufacturing ✔️The BIOSECURE Act, looming on the horizon (effective 2032 but influencing strategy now), may deter reliance on firms like WuXi Biologics, pushing companies toward licensing over acquisitions for flexibility ✔️Despite this, China’s cost advantages and 25% share of global clinical trials will keep it a magnet for U.S. pharma, with oncology dominating (85% of ✔️China’s out-licensed deals) and early-stage assets (pre-Phase III) likely comprising 50% of transactions to dodge regulatory heat ✔️China’s improving regulatory alignment with the FDA could still drive selective, high-value partnerships and the market will favor strategic agility-smaller, nimble deals over mega-mergers Image Source: Andrew Pannu/SleuthInsights

𝐑𝐚𝐫𝐞/𝐔𝐥𝐭𝐫𝐚 𝐑𝐚𝐫𝐞 𝐃𝐢𝐬𝐞𝐚𝐬𝐞𝐬 - 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐌𝐨𝐝𝐞𝐥𝐬 𝐭𝐡𝐚𝐭 𝐥𝐞𝐝 𝐭𝐨 𝐓𝐫𝐢𝐮𝐦𝐩𝐡𝐬 𝐚𝐧𝐝 𝐅𝐚𝐢𝐥𝐮𝐫𝐞𝐬! 𝐖𝐢𝐧𝐬: ✔️𝐆𝐞𝐧𝐳𝐲𝐦𝐞(𝐒𝐚𝐧𝐨𝐟𝐢)'𝐬 𝐂𝐞𝐫𝐞𝐳𝐲𝐦𝐞 𝐟𝐨𝐫 𝐆𝐚𝐮𝐜𝐡𝐞𝐫 𝐝𝐢𝐬𝐞𝐚𝐬𝐞 ✔️Business Model: Genzyme pioneered a patient-centric, high-touch model, focusing on rare genetic disorders with no prior treatments ✔️Invested heavily in patient identification through registries ✔️Built strong relationships with patient advocacy groups (PAGs) ✔️Leveraged premium pricing through ODA ✔️Why It Worked: Lack of competition and strong payer negotiations based on unmet need 𝐕𝐞𝐫𝐭𝐞𝐱 𝐏𝐡𝐚𝐫𝐦𝐚𝐜𝐞𝐮𝐭𝐢𝐜𝐚𝐥𝐬' 𝐓𝐫𝐢𝐤𝐚𝐟𝐭𝐚 (𝐞𝐥𝐞𝐱𝐚𝐜𝐚𝐟𝐭𝐨𝐫/𝐭𝐞𝐳𝐚𝐜𝐚𝐟𝐭𝐨𝐫/𝐢𝐯𝐚𝐜𝐚𝐟𝐭𝐨𝐫) 𝐟𝐨𝐫 𝐜𝐲𝐬𝐭𝐢𝐜 𝐟𝐢𝐛𝐫𝐨𝐬𝐢𝐬 (𝐂𝐅) ✔️Business Model: Vertex employed a precision medicine targeting genetic mutations in CF ✔️Invested heavily in R&D, secure regulatory fast-tracking 9FDA-BTD) & used outcome-based pricing agreements with payers ✔️Why It Worked: Trikafta’s broad efficacy across CF mutations expanded the addressable market, while Vertex’s monopoly in CF treatments ensured sustained revenue (~$7 billion annually) 𝐅𝐚𝐢𝐥𝐮𝐫𝐞𝐬 𝐀𝐞𝐠𝐞𝐫𝐢𝐨𝐧 𝐏𝐡𝐚𝐫𝐦𝐚𝐜𝐞𝐮𝐭𝐢𝐜𝐚𝐥𝐬 (𝐧𝐨𝐰 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐀𝐦𝐫𝐲𝐭 𝐏𝐡𝐚𝐫𝐦𝐚)'s 𝐉𝐮𝐱𝐭𝐚𝐩𝐢𝐝 (𝐥𝐨𝐦𝐢𝐭𝐚𝐩𝐢𝐝𝐞) 𝐟𝐨𝐫 𝐡𝐨𝐦𝐨𝐳𝐲𝐠𝐨𝐮𝐬 𝐟𝐚𝐦𝐢𝐥𝐢𝐚𝐥 𝐡𝐲𝐩𝐞𝐫𝐜𝐡𝐨𝐥𝐞𝐬𝐭𝐞𝐫𝐨𝐥𝐞𝐦𝐢𝐚 (𝐇𝐨𝐅𝐇) ❌Business Model: Aegerion targeted an ultra-rare condition with a high-priced oral therapy ($250,000-$300,000/year), relying on ODA exclusivity & direct sales to cardiologists ❌However, their strategy overestimated market size & neglected competition from cheaper alternatives (PCSK9 inhibitors) ❌Why It Failed: Sales peaked at $200 million but declined due to payer pushback, competition, and a narrow patient pool ❌What They Could Have Done: Broadened the indication to heterozygous FH, invested in patient-finding registries & negotiated value-based pricing 𝐁𝐥𝐮𝐞𝐛𝐢𝐫𝐝 𝐁𝐢𝐨'𝐬 𝐙𝐲𝐧𝐭𝐞𝐠𝐥𝐨 (𝐛𝐞𝐭𝐢𝐛𝐞𝐠𝐥𝐨𝐠𝐞𝐧𝐞 𝐚𝐮𝐭𝐨𝐭𝐞𝐦𝐜𝐞𝐥) 𝐟𝐨𝐫 𝐛𝐞𝐭𝐚-𝐭𝐡𝐚𝐥𝐚𝐬𝐬𝐞𝐦𝐢𝐚 ❌Business Model: Bluebird Bio pursued a curative gene therapy model, securing FDA and EMA approval with a $2.8 million price tag ❌They offered outcome-based refunds (up to 80%) but relied heavily on regulatory incentives without building a robust commercial infrastructure or addressing payer reluctance in Europe ❌Why It Failed: Limited uptake due to high costs, complex administration (requiring specialized centers)& reimbursement challenges in Europe ❌What They Could Have Done: Offered flexible payment models, Developed network of HCPs Intelligience opinion: ▶️Rare diseases need a different strategy than traditional drugs & to succeed in future, companies must adopt a patient-centric, innovative, & stakeholder-aligned approach focused on enhancing identification, innovating trials, securing access, & customizing commercialization

𝐓𝐨𝐩 10 𝐜𝐥𝐢𝐧𝐢𝐜𝐚𝐥 𝐭𝐫𝐢𝐚𝐥 𝐟𝐚𝐢𝐥𝐮𝐫𝐞𝐬 𝐨𝐟 2024 - 𝐋𝐞𝐬𝐬𝐨𝐧𝐬 𝐥𝐞𝐚𝐫𝐧𝐭! ❌AbbVie's Emraclidine for Schizophrenia: Emraclidine, an M4-selective positive allosteric modulator, failed in two P2 trials & carried a disappointing outcome followed AbbVie’s hefty $8.7 billion acquisition of Cerevel Therapeutics, leading to a $3.5 billion impairment charge ❌Fulcrum Therapeutics/Sanofi'sLosmapimod for facioscapulohumeral muscular dystrophy: Losmapimod faced a P3 failure just months after Sanofi acquired rights to the drug & had previously missed a significant P2b endpoint ❌Sage Therapeutics' dalzanemdor for Alzheimer’s, Huntington’s, & Parkinson’s disease - Dalzanemdor, an NMDA receptor-positive allosteric modulator experienced a series of P2 failures over a period of 7 months, which led the company to cease development, despite its cash runway into mid-2027 ❌Novo Nordisk 's ocedurenone for CKD  -Ocedurenone failed to demonstrate a significant reduction in systolic blood pressure in a critical P3 trial, resulting in an $816 million loss for Novo Nordisk & the program was terminated ❌GSK's GSK3943104 for Herpes simplex virus - GSK3943104, failed to show efficacy in a phase 2 trial aimed at reducing recurrent episodes ❌Merck & Co.'s Vibostolimab for resected high-risk melanoma - Merck & Co. terminated its vibostolimab program after announcing that ongoing P3 trials were likely to miss their endpoints due to high adverse event rates ❌Cassava Sciences' simufilam for mild to moderate Alzheimer’s disease - The drug missed its primary endpoints in a P3 trial, failing to show significant cognitive or functional improvement compared to placebo ❌Pfizer's fordadistrogene movaparvovec for DMD - The gene therapy candidate failed its P3 trial aimed at improving motor function, following previous safety concerns- Pfizer incurred a significant financial hit of $230M ❌Merck KGaA's  xevinapant for squamous cell carcinoma of the head and neck-The drug did not meet its primary goal in a P3 trial for prolonging event-free survival ❌Vertex Pharmaceuticals' suzetrigine for painful lumbosacral radiculopathy - Suzetrigine was finally approved in Jan 2025 despite results from trial similar to placebo Intelligience opinion: The failures of these drugs in 2024 highlight the unpredictable nature of clinical trials in the pharmaceutical industry. While numerous candidates demonstrated promise, the reality of drug development is often fraught with challenges that can derail even the most significant investments While it is easier said than done, increased focus on identifying an apt clinical trial design and a proper biomarker identification can save BigPharma millions in cash and hours of effort Source: FierceBiotech

𝐓𝐡𝐞 𝐑𝐢𝐬𝐞 𝐨𝐟 𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐒𝐭𝐚𝐜𝐤𝐢𝐧𝐠 𝐚𝐬 𝐚 𝐕𝐚𝐥𝐮𝐞-𝐃𝐫𝐢𝐯𝐢𝐧𝐠 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲 ✔️Portfolio stacking, which is the deliberate accumulation of complementary therapies within a single therapeutic area has emerged as a cornerstone of value creation in the pharmaceutical industry 𝐓𝐡𝐞 𝐀𝐧𝐚𝐭𝐨𝐦𝐲 𝐨𝐟 𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐒𝐭𝐚𝐜𝐤𝐢𝐧𝐠: ✔️Mechanistic Diversity: Targeting multiple pathways (e.g., GLP-1, GIP, and amylin in obesity; PD-1, CTLA-4, and HER2 in oncology) ✔️Lifecycle Management: Extending patent exclusivity via next-generation formulations or combination therapies ✔️Market Segmentation: Addressing subpopulations (e.g., early-stage vs. metastatic cancer; BMI ≥30 vs. ≥27 with comorbidities in obesity) 𝐓𝐡𝐞 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫 𝐂𝐚𝐥𝐜𝐮𝐥𝐮𝐬: 𝐖𝐡𝐲 𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐒𝐭𝐚𝐜𝐤𝐢𝐧𝐠 𝐌𝐚𝐭𝐭𝐞𝐫𝐬 ✔️Diversified Pipeline Exposure: A 2023 analysis by McKinsey found that companies with stacked portfolios in oncology had 35% higher probability of launching at least one blockbuster ($1B+ annual sales) compared to single-asset peers ✔️Revenue Durability: Roche’s HER2 franchise (Herceptin, Perjeta, Kadcyla) generated $12B in cumulative revenue in 2022 despite Herceptin’s biosimilar erosion, showcasing lifecycle resilience ✔️Strategic Optionality: Assets can be repurposed (e.g., Novo Nordisk’s Ozempic (diabetes) to Wegovy (obesity) or combined to address unmet needs 𝐓𝐡𝐞 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐏𝐫𝐨𝐬 𝐚𝐧𝐝 𝐂𝐨𝐧𝐬 𝐨𝐟 𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐒𝐭𝐚𝐜𝐤𝐢𝐧𝐠 ✔️Advantages: ✔️Building Unassailable Market Positions ✔️Pricing Power and Formulary Lock-In: Payers prefer consolidated portfolios for rebate negotiations ✔️Cross-Use of Data: - Biomarker insights from one trial can be used for toher trials Risks and Challenges: ✔️Capital Intensity: Developing 3+ assets in parallel requires ~$2–4B annually for large pharma (Evaluate) ✔️Regulatory and Commercial Complexity: Combination therapies require intricate trial designs (e.g., dual primary endpoints) 𝐑𝐨𝐜𝐡𝐞'𝐬 𝐎𝐧𝐜𝐨𝐥𝐨𝐠𝐲 𝐁𝐥𝐮𝐞𝐩𝐫𝐢𝐧𝐭 ✔️Roche carried out vertical integration of diagnostics (Foundation Medicine) and therapeutics to guide biomarker-driven stacking leading to HER2 franchise revenue: $23B (2018–2022) ✔️Phesgo (subcutaneous Herceptin/Perjeta) reduced infusion time from 4 hours to minutes, capturing 25% market share in 18 months ✔️Roche worked on diagnostic-therapeutic bundling, which created sticky customer relationships and data monopolies 𝐒𝐮𝐜𝐜𝐞𝐬𝐬𝐟𝐮𝐥 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐬𝐭𝐚𝐜𝐤𝐢𝐧𝐠 𝐩𝐨𝐢𝐧𝐭𝐞𝐫𝐬 𝐟𝐨𝐫 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬: ✔️Prioritize Mechanistic Innovation - Back companies with platforms over incremental improvements ✔️Monitor Capital Allocation: Avoid firms with bloated pipelines with unclear differentiation ✔️Bet on Vertical Integrators: Companies like Roche (diagnostics + therapeutics) & Novo (devices + drugs) have a better chances at performing Source: BCG

𝐄𝐱𝐩𝐥𝐨𝐫𝐞 𝐂𝐡𝐢𝐧𝐚'𝐬 𝐬𝐡𝐢𝐟𝐭 𝐭𝐨 𝐛𝐢𝐨𝐩𝐡𝐚𝐫𝐦𝐚 𝐩𝐨𝐰𝐞𝐫𝐡𝐨𝐮𝐬𝐞! 𝐓𝐚𝐫𝐠𝐞𝐭𝐞𝐝 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐏𝐨𝐥𝐢𝐜𝐢𝐞𝐬 ✔️3 key initiatives that have contributed towards the transformation of the Chinese Biopharma - The 'Made in China 2025' strategy, The 'Healthy China 2030' and the '14th Five-Year Plan' ✔️Made in China initiative offered subsidies like $1.5 billion to firms in 2018 alone ✔️These financial incentives translated in the growth of biotech science parks from 400 to about 600 from 2016 to 2020 𝐑&𝐃 𝐅𝐮𝐧𝐝𝐢𝐧𝐠 𝐒𝐮𝐫𝐠𝐞 ✔️There has been an increase in PE/VC funding in the BioPharma sector-Between 2012 and 2017, the government invested $378 billion in life sciences, while private venture capital hit $14.9 billion in 2020 fueling development of breakthroughs like CAR-T therapies ✔️BeiGene’s Brukinsa raised $3.5 billion in 2020, and WuXi Biologics secured $511 million, funding cutting-edge R&D. 𝐓𝐚𝐥𝐞𝐧𝐭 𝐑𝐞𝐜𝐫𝐮𝐢𝐭𝐦𝐞𝐧𝐭 ✔️The "Thousand Talents Plan" lured back over 7,000 scientists, including Dr. Feng Zhang, a CRISPR pioneer 𝐅𝐚𝐬𝐭𝐞𝐫 𝐃𝐫𝐮𝐠 𝐀𝐩𝐩𝐫𝐨𝐯𝐚𝐥𝐬 ✔️The China FDA (NMPA) slashed approval times leading to expedited launch times e.g. Innovent Biologics’ PD-1 inhibitor Tyvyt hit the market in 2018, beating many Western rivals 𝐅𝐨𝐜𝐮𝐬 𝐨𝐧 𝐁𝐢𝐨𝐩𝐡𝐚𝐫𝐦𝐚 𝐇𝐮𝐛𝐬 ✔️Shanghai’s Zhangjiang Pharma Valley raked in $14 billion in 2020 revenue, hosting 1,200+ firms & Beijing’s Zhongguancun Life Science Park incubated startups like BeiGene, creating innovation hotbeds 𝐒𝐡𝐢𝐟𝐭 𝐭𝐨 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 ✔️Innovation in China happened in three distinct phases: from monotherapy “me-too” and “me-better” companies, to indication expansion /antibody technologies, and finally to novel targets and modalities (such as cell therapies) 𝐆𝐥𝐨𝐛𝐚𝐥 𝐈𝐦𝐩𝐚𝐜𝐭 𝐚𝐧𝐝 𝐂𝐨𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧 ✔️Chinese-made drugs are becoming recognized globally, with over 50 innovative drugs available on the international market in 2023 ✔️Collaborations between Chinese firms and U.S. companies, such as a $1 billion partnership for cancer therapy development, highlight China's capability for independent innovation Intelligience opinion ✔️USA Biopharma industry has its hands full - LOE and loss of revenues due to patent expiries of blockbuster drugs, the rise of AI driven drug discovery which most companies are still grappling with & ofcourse the IRA comes the rise of China Biopharma industry, which has been growing by leaps and bounds over the last decade ✔️China can no longer be ignored but can be looked at as a partner within the confines of the BioSecure Act Image Source: BCG

𝐅𝐢𝐯𝐞 𝐊𝐞𝐲 𝐓𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 𝐁𝐢𝐨𝐭𝐞𝐜𝐡 𝐀𝐜𝐪𝐮𝐢𝐬𝐢𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 2024: 𝐀 𝐃𝐞𝐞𝐩 𝐃𝐢𝐯𝐞! 𝐒𝐡𝐢𝐟𝐭 𝐓𝐨𝐰𝐚𝐫𝐝 𝐒𝐦𝐚𝐥𝐥𝐞𝐫, 𝐁𝐨𝐥𝐭-𝐎𝐧 𝐃𝐞𝐚𝐥𝐬 ✔️In 2024, biotech acquisitions leaned heavily toward smaller, bolt-on deals rather than mega-mergers ✔️Deal values in 2024 crashed to $48 billion, a 68% nosedive from 2023’s $152 billion bender, while average deal size shriveled to $2.1 billion 𝐅𝐨𝐜𝐮𝐬 𝐨𝐧 𝐄𝐚𝐫𝐥𝐲-𝐒𝐭𝐚𝐠𝐞 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 ✔️Late-stage assets took a backseat as pre-clinical and Phase 1 deals gobbled up over 25% of deal value reflecting a 5-year peak, while pre-Phase 3 assets hit nearly 50% 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐫𝐨𝐬𝐞 𝐢𝐧 𝐓𝐡𝐞𝐫𝐚𝐩𝐲 𝐚𝐫𝐞𝐚𝐬 𝐛𝐞𝐲𝐨𝐧𝐝 𝐎𝐧𝐜𝐨𝐥𝐨𝐠𝐲 ✔️Oncology’s grip slipped, down from 48% of deal value in 2023—yet it still looms large while, cardio-metabolic (think GLP-1 obesity drugs) and rare diseases muscled in 𝐌𝐨𝐫𝐞 𝐃𝐞𝐚𝐥𝐬, 𝐋𝐞𝐬𝐬 𝐂𝐚𝐬𝐡: 𝐓𝐡𝐞 𝐅𝐫𝐮𝐠𝐚𝐥 𝐅𝐫𝐞𝐧𝐳𝐲 ✔️Deal volume held steady, but the checks shrank-sub-$5 billion transactions dominated, and licensing deals raked in $170 billion across 150 pacts 𝐄𝐦𝐞𝐫𝐠𝐞𝐧𝐜𝐞 𝐨𝐟 𝐂𝐡𝐢𝐧𝐚 𝐚𝐬 𝐚𝐧 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐒𝐨𝐮𝐫𝐜𝐞: 𝐓𝐡𝐞 𝐖𝐞𝐬𝐭’𝐬 𝐖𝐚𝐤𝐞-𝐔𝐩 𝐂𝐚𝐥𝐥 ✔️A striking trend was the rise of Chinese biotech assets in global deal-making, with over 30% of in-licensed assets by big pharma originating from China, marked by high-profile licensing deals & competitive clinical data challenging Western incumbents 𝐊𝐞𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲𝐬: 𝐖𝐡𝐚𝐭 2024 𝐒𝐢𝐠𝐧𝐚𝐥𝐬 𝐟𝐨𝐫 2025 𝐂𝐚𝐮𝐭𝐢𝐨𝐮𝐬 𝐂𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐢𝐨𝐧 𝐀𝐦𝐢𝐝 𝐄𝐜𝐨𝐧𝐨𝐦𝐢𝐜 𝐔𝐧𝐜𝐞𝐫𝐭𝐚𝐢𝐧𝐭𝐲 ✔️With interest rate cuts in late 2024 and a potential shift in U.S. antitrust policy under a new administration, deal values & volumes are expected to rebound, driven by pent-up demand & larger transactions 𝐀𝐈 𝐏𝐨𝐰𝐞𝐫𝐞𝐝 𝐒𝐭𝐚𝐫𝐭𝐮𝐩𝐬 𝐰𝐢𝐥𝐥 𝐜𝐨𝐧𝐭𝐢𝐧𝐮𝐞 𝐭𝐨 𝐚𝐭𝐭𝐫𝐚𝐜𝐭 𝐟𝐮𝐧𝐝𝐬 ✔️AI-powered drug discovery platforms will fetch humongous premiums as the race to innovate turns savage 𝐌𝐚𝐧𝐮𝐟𝐚𝐜𝐭𝐮𝐫𝐢𝐧𝐠 𝐂𝐚𝐩𝐚𝐜𝐢𝐭𝐲 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐀𝐬𝐬𝐞𝐭 ✔️Continued emphasis on capacity deals, particularly in C&GT & radiopharma, as companies address logistical complexities is expected 𝐌&𝐀 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚𝐜𝐭𝐢𝐯𝐞 𝐢𝐧 𝐞𝐚𝐫𝐥𝐲 2025 ✔️A recovering IPO market and increased VC activity could raise valuations will push acquirers to act swiftly in early 2025 before prices climb 𝐆𝐥𝐨𝐛𝐚𝐥𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 ✔️This trend will accelerate, with Asia-Pacific biotechs becoming prime targets & cross-border collaborations growing, especially in oncology &metabolic therapies Intelligience opinion 2025 will be marked by transformative changes in the industry given that traditional patterns of operation are swiftly losing relevance & companies must demonstrate strategic resilience to secure their foothold

𝐌&𝐀 𝐎𝐛𝐬𝐞𝐫𝐯𝐚𝐭𝐢𝐨𝐧𝐬 𝐢𝐧 𝐁𝐢𝐨𝐏𝐡𝐚𝐫𝐦𝐚 𝐢𝐧 2023/24-𝐂𝐡𝐚𝐧𝐠𝐢𝐧𝐠 𝐓𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 2025? 7 𝐊𝐞𝐲 𝐕𝐂 𝐓𝐫𝐞𝐧𝐝𝐬 𝐢𝐧 𝐁𝐢𝐨𝐭𝐞𝐜𝐡/𝐏𝐡𝐚𝐫𝐦𝐚 (2023–2024) 1️⃣ 𝐌𝐞𝐠𝐚𝐫𝐨𝐮𝐧𝐝𝐬 𝐃𝐨𝐦𝐢𝐧𝐚𝐭𝐞 𝐄𝐚𝐫𝐥𝐲-𝐒𝐭𝐚𝐠𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐧𝐠 (≥100M) Driven by investor confidence in leadership teams/platform technologies ✅Xaira Therapeutics: Raised $1B in Series A (2024) for AI-driven drug discovery, backed by ARCH Ventures & Foresite Capital ✅Kailera Therapeutics: Secured $400M in Series A (2024) to develop obesity therapies, leveraging GLP-1/GIP agonists from Chinese partner Jiangsu Hengrui 2️⃣ 𝐀𝐈/𝐌𝐋 𝐏𝐥𝐚𝐭𝐟𝐨𝐫𝐦𝐬 𝐑𝐞𝐯𝐨𝐥𝐮𝐭𝐢𝐨𝐧𝐢𝐳𝐞 𝐃𝐫𝐮𝐠 𝐃𝐢𝐬𝐜𝐨𝐯𝐞𝐫𝐲 VC funding for AI-driven biotechs surged with $9B investment b/w 2019–2022 & in 2024, companies integrating ML into R&D attracted large rounds ✅Formation Bio: Raised $372M in Series D (2024) for AI models predicting drug toxicity and efficacy,(w Sanofi/OpenAI) ✅Freenome: Secured 35B total (2024) for AI-powered early cancer detection via blood-based multi-omics 3️⃣𝐎𝐛𝐞𝐬𝐢𝐭𝐲 𝐚𝐧𝐝 𝐌𝐞𝐭𝐚𝐛𝐨𝐥𝐢𝐜 𝐃𝐢𝐬𝐞𝐚𝐬𝐞 𝐓𝐡𝐞𝐫𝐚𝐩𝐞𝐮𝐭𝐢𝐜𝐬 𝐁𝐨𝐨𝐦 -Obesity-focused biotechs saw a 550% YoY funding jump in 2024, driven by clinical successes like Novo Nordisk’s Wegovy and Lilly’s Zepbound ✅Metsera: Raised 290M (SeriesA)and 215M (Series B) in 2024 for next-gen GLP-1 agonists, achieving 11% weight loss in Phase II trials ✅BioAge Labs: Closed a $170M Series D (2024) to test azelaprag (apelin agonist) combined with Zepbound for obesity 4️⃣ 𝐂𝐞𝐥𝐥 𝐚𝐧𝐝 𝐆𝐞𝐧𝐞 𝐓𝐡𝐞𝐫𝐚𝐩𝐲 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐀𝐭𝐭𝐫𝐚𝐜𝐭𝐬 𝐋𝐚𝐭𝐞-𝐒𝐭𝐚𝐠𝐞 𝐅𝐮𝐧𝐝𝐢𝐧𝐠 CAR-T and allogeneic therapies drew $3B+ in VC funding in 2022, with later-stage rounds dominating in 2024 ✅ArsenalBio: Raised $325M in Series C (2024) for solid tumor CAR-T therapies ✅Obsidian Therapeutics: Secured $325M (2024) for controlled gene expression in cancer therapies 5️⃣ 𝐂𝐡𝐢𝐧𝐚’𝐬 𝐑𝐢𝐬𝐢𝐧𝐠 𝐁𝐢𝐨𝐭𝐞𝐜𝐡 𝐄𝐜𝐨𝐬𝐲𝐬𝐭𝐞𝐦 Chinese biotechs averaged $299M per company in 2023, triple the U.S. average, driven by gene editing & ADC innovation ✅Sinovent: Raised $242M in Series E (2024) for oncology and immunology therapies ✅Jixing Pharmaceuticals: Closed $162M Series D (2024) for cardiovascular drugs, with Bayer & RTW Investments participating 6️⃣ 𝐋𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩-𝐃𝐫𝐢𝐯𝐞𝐧 𝐒𝐲𝐧𝐝𝐢𝐜𝐚𝐭𝐞𝐬 𝐚𝐧𝐝 𝐏𝐡𝐚𝐫𝐦𝐚 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 Companies with ex-Big Pharma executives secured 60% of 2024’s top rounds -Pharma venture arms (e.g., Sanofi, Lilly) co-led deals ✅Candid Therapeutics: Merged three entities to raise $370M Series A (2024) for autoimmune TCE antibodies, led by RayzeBio’s ex-CEO Intelligience Opinion - Investors are now focusing on preclinical/early stage assets as it provides more room to creatively "hone" innovation minus integration challenges. Oncology & Obesity "may appear" to be the safest investment bet but auto-immune may lead the way in 2025! Source: HSBC

𝐍𝐨𝐯𝐚𝐫𝐭𝐢𝐬 𝐀𝐜𝐪𝐮𝐢𝐬𝐢𝐭𝐢𝐨𝐧 𝐨𝐟 𝐀𝐧𝐭𝐡𝐨𝐬 𝐓𝐡𝐞𝐫𝐚𝐩𝐞𝐮𝐭𝐢𝐜𝐬: The financials ✔️Significant Investment: The deal, valued 925 million upfront and potentially upto 3.075 billion with milestones, indicates Novartis's commitment to investing in innovative therapies ✔️If approved, abelacimab could generate substantial revenue, especially as the anticoagulant market remains lucrative and competitive Clinical Implications ✔️Enhanced Pipeline: Novartis strengthens its pipeline with abelacimab, a promising new anticoagulant, that addresses both efficacy and safety requirements ✔️Focus on Factor XI Inhibition: Abelacimab targets the anti-factor XI/XIa pathway, which could represent a significant innovation in anticoagulation therapy ✔️Abelacimab's competitive advantages include its novel mechanism of action as a Factor XI inhibitor, which offers a hemostasis-sparing anticoagulation profile & its convenient once-monthly dosing, which could improve patient adherence compared to daily oral anticoagulants ✔️This class of drugs may offer safer alternatives to existing options like Xarelto and Eliquis, which carry a higher risk of bleeding ✔️With the acquisition, Novartis will take over the responsibility of three ongoing phase 3 trials expected to conclude in 2026 Competitive Implications ✔️Re-entering the Market: Novartis returns to competition in the factor XI inhibitor space, marking a significant shift from its previous focus ✔️This could influence market dynamics as Novartis seeks to establish itself among other developers ✔️With leading anticoagulants like Eliquis and Xarelto facing impending generic competition, Novartis’s move into this niche space may help maintain its market position and profitability Strategic Implications ✔️Broader Cardiovascular Strategy: The acquisition reflects a strategic pivot by Novartis to prioritize cardiac health, integrating innovative anticoagulation solutions into its broader portfolio ✔️Collaboration Opportunities: The deal with Anthos, initially supported by Blackstone Life Sciences, might pave the way for further collaborations @Intelligience opinion: ✔️With the Anthos acquisition, Novartis is entering a tricky path given that many Big Pharma have tried and failed - Bayer terminated the Phase III OCEANIC-AF study of its Factor XIa blocker asundexian after an independent data monitoring board found that the candidate had “inferior efficacy” to Pfizer’s Eliquis ✔️J&J and BMS also suffered a Factor XIa setback in August 2022 when their candidate milvexian failed to demonstrate a dose response in patients with acute ischemic strokes or transient ischemic attacks ✔️Even after the initial KOL buzz being conservative citing that abelacimab may provide an alternative for patients unsuitable for left atrial appendage closure, we believe abelacimab will be a game-changer in the Factor XIa market given Novartis' expertise to bring challenging products to clinical and financial fruition

𝐀𝐥𝐮𝐦𝐢𝐬 -𝐀𝐜𝐞𝐥𝐲𝐫𝐢𝐧 𝐌𝐞𝐫𝐠𝐞𝐫 - 𝐓𝐡𝐞 𝐦𝐚𝐤𝐢𝐧𝐠 𝐨𝐟 𝐚 𝐧𝐞𝐰 "𝐟𝐨𝐜𝐮𝐬𝐬𝐞𝐝" 𝐁𝐢𝐨𝐏𝐡𝐚𝐫𝐦𝐚? ✔️Alumis and Acelyrin announced their merger on February 6, 2025, through an all-stock deal ✔️Post-merger, Alumis shareholders will control about 55% while Acelyrin shareholders will own approximately 45% of the combined company ✔️The new company will retain the Alumis name and operate under its existing executive team 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐀𝐬𝐩𝐞𝐜𝐭𝐬 ✔️The merger results in a significant cash balance of $737M, providing financial stability & operational funding until 2027 ✔️Analysts like Thomas Smith (Leerink Partners) view the merger as a “creative and capital-efficient transaction” to secure funding for critical data readouts (2025–2026) Market Context: ✔️Prior to the merger, both companies faced declining stock prices and competitive pressures ✔️Both debuted on the public market with high hopes but have since seen their values diminish significantly 𝐏𝐢𝐩𝐞𝐥𝐢𝐧𝐞 𝐎𝐯𝐞𝐫𝐯𝐢𝐞𝐰: Key products of the combined company include: ✔️ESK-001 (Alumis): Phase 3 TYK2 inhibitor for plaque psoriasis (ONWARD trial data expected H1 2026) and systemic lupus erythematosus (Phase 2b LUMUS trial in 2026) Positioned as a potential best-in-class challenger to Bristol Myers Squibb’s Sotyktu Market Impact: Could disrupt the oral autoimmune therapy space if it demonstrates superiority in safety or efficacy ✔️A-005 (Alumis): CNS-penetrant TYK2 inhibitor targeting neuroinflammatory diseases like MS - Phase 2 trials expected to begin in late 2025 ✔️Lonigutamab (Acelyrin): S/C anti-IGF-1R antibody for thyroid eye disease (TED)- P2 data showed efficacy comparable to IV-administered therapies like Amgen’s Tepezza Challenges: Analysts question its differentiation from competitors like Viridian’s VRDN-001, development plans paused till further analysis 𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐢𝐯𝐞 𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧𝐢𝐧𝐠: ✔️The merger facilitates Alumis’ growth in TYK2 inhibitors, a crowded but high-growth segment & ESK-001’s success could be a potential threat to BMS's Sotyktu ✔️In TED, lonigutamab’s s/c delivery offers convenience over IV therapies, but differentiation remains unproven 𝐅𝐢𝐧𝐚𝐧𝐜𝐢𝐚𝐥 𝐀𝐬𝐩𝐞𝐜𝐭𝐬: ✔️The merger results in a significant cash balance of $737 million, providing financial stability & operational funding until 2027 -Analysts from Leerink Partners) view the merger as a “creative and capital-efficient transaction” to secure funding for critical data readouts (2025–2026) Intelligience Opinion ✔️The Alumis-Acelyrin merger aims to create a resilient biopharma player with a late-stage pipeline targeting autoimmune & neuroinflammatory diseases ✔️While the strategic rationale centers on financial stability & pipeline diversification, success hinges on clinical data for ESK-001 & lonigutamab’s differentiation

▶️ 𝐁𝐢𝐨𝐏𝐡𝐚𝐫𝐦𝐚 𝐃𝐞𝐚𝐥 𝐌𝐚𝐤𝐢𝐧𝐠 - 𝐓𝐫𝐞𝐧𝐝𝐬 𝐭𝐨 𝐖𝐚𝐭𝐜𝐡! Novo Holdings & Catalent ✔️Therapy Area: Manufacturing/GLP-1 Drugs Summary: Novo Holdings acquired Catalent for $16.5 billion to secure GLP-1 obesity treatment manufacturing capacity, enhancing competition against rivals like Eli Lilly Clayton, Dubilier & Rice & Sanofi’s Opella ✔️Therapy Area: Consumer Health Summary: The €16 billion acquisition allows Sanofi to refocus on innovative treatments and allocate capital for research after shedding its consumer health business, a trend seen across the industry Vertex Pharmaceuticals & Alpine Immune Sciences ✔️Therapy Area: Immunotherapy/Kidney Diseases Summary: Vertex's $4.9 billion acquisition provides access to Alpine’s promising IgA nephropathy treatment, enhancing Vertex’s immunotherapy pipeline with potential best-in-class assets Gilead Sciences & Cymabay Therapeutics ✔️Therapy Area: Liver Disease Summary: Gilead purchased Cymabay for $4.3 billion, aiming to leverage its expertise in liver diseases with Livdelzi, a drug targeting primary biliary cholangitis, aligning with Gilead’s growth strategy Eli Lilly & Morphic Therapeutics ✔️Therapy Area: Inflammatory Bowel Disease Summary: Lilly's $3.2 billion deal grants access to oral integrin therapies for IBD, potentially competing with existing treatments and expanding Lilly’s portfolio in gastrointestinal diseases Merck & Eyebiotech ✔️Therapy Area: Ophthalmology Summary: Merck acquired Eyebiotech for $3 billion to enhance its eye disease portfolio with innovative candidates aimed at diabetic macular edema and age-related macular degeneration Novartis & MorphoSys ✔️Therapy Area: Oncology Summary: Novartis' acquisition of MorphoSys for €2.7 billion focuses on bolstering its oncology portfolio with promising clinical candidates Lundbeck & Longboard Pharmaceuticals ✔️Therapy Area: Neurology/Epilepsy Summary: Lundbeck's $2.5 billion purchase of Longboard aims to bring bexicaserin to market, targeting severe epilepsy & diversifying Lundbeck’s neuro-focused pipeline Ono Pharmaceutical & Deciphera Pharmaceuticals ✔️Therapy Area: Cancer Summary: Ono's $2.4 billion acquisition enhances its oncology portfolio with Deciphera’s approved treatments & pipeline with expansion in the U.S. and European markets ▶️ Major Trends: ✔️M&A Strategy of Large-Cap Pharma: Mixed focus on making biotech integrations and securing assets with predictable outcomes on one side and investing on innovative early research on the other side, 2025 will witness a fine balance between these two ✔️Investor Sentiment and Market Outlook: The anticipated landscape will likely see a shift towards smaller deals compared to the record-breaking values of previous years and investor's are now focusing on acquiring high-value assets ✔️Trends in Megadeals: No major megadeals in 2025 Source: DB