It’s survival of the fittest, and BridgeBio Pharma is cutting fat—shedding any and all extra costs in an attempt to stay afloat in a prolonged bear market. CEO Neil Kumar, Ph.D., hopes the industry will take notes to ultimately embolden a better biotech frontier.
“We think it’s going to be a very, very difficult market environment for the next at least 18 months,” Kumar said in an interview. “The question that I hope we're all struggling with is, how do we make sure that we can continue to serve patients at scale, and which models are going to allow us to get through these inevitable, cyclical dips? And so hopefully everyone's taking notes on that.”
The CEO candidly told Fierce Biotech about the company’s strategy to wield deals and whip the biotech into a “good shape to survive."
BridgeBio's troubles began with a phase 3 flop in late 2021 for its lead asset acoramidis, which set the company back on its heels. After two rounds of layoffs and a tumbling share price, the company announced some good news this month, including a licensing deal with Bristol Myers Squibb that could garner up to $905 million eventually.
The biotech's struggles are not in a vacuum. The entire industry has been facing a reckoning amid widespread layoffs, clinical setbacks and a tough market downturn. Just this month, at least five biotechs have conducted layoffs and, in the past two months, Genocea and Kaleido Therapeutics have closed up shop for good.
While the cost of capital in biotech has risen for most companies right now, it is “quite a bit higher” for BridgeBio given the acoramidis setback, Kumar said at an investor event Tuesday, where he detailed his steps to ensure the $633.5 million the company had at the end of March will support a “very busy late-stage pipeline” into 2024.
Simply can't afford it
Founded in 2015, BridgeBio anticipates hanging around for the long haul. To do so, Kumar believes the company must drop assets with higher burn than return levels, tap new partnerships and consider outsourcing—all in the name of the “BridgeBio experiment.” This is a plan to create a sustainable biotech model with a diversified pipeline. The experiment was set up to design a company that wouldn't buckle underneath internal and external pressures—which BridgeBio is familiar with.
The company previously had nearly 35 ongoing programs, but that has been cut down to little more than 20, a number that still provides “a lot of different levers” to pull, according to Kumar.
In early May, BridgeBio put six of its candidates on the block for out-licensing opportunities.
“We're actively seeking partnerships based on the fact that we simply can't afford to move them forward,” Kumar told us.
Other companies will have to take on some of BridgeBio’s programs and exploit their full potential for patients, the CEO said. So far, five of the six programs have active term sheets—a nonbinding agreement that outlines basic terms and conditions of an investment. The active term sheets provide strong promise that all drugs will soon be partnered off, which Kumar anticipates will result in a reasonable burn reduction.
Two of the drugs up for out-licensing are in clinical trials: BBP-589 for dystrophic epidermolysis bullosa and BBP-681, a topical PI3KA inhibitor for venous and lymphatic malformations. The other programs are earlier in development and include two AAV gene therapies, a potential treatment for Netherton syndrome and a PI3KB inhibitor for autism.
The drugs that will remain with BridgeBio fall in two main buckets. A clutch of late-stage products will stay in the hope that they are advanced enough to be successful and put the company on the map. The plan is to bring four or five late-stage assets to market, a move that would ultimately justify the BridgeBio experiment, according to Kumar. The other drugs the company is keeping are in early-stage discovery research, which Kumar deems the heart and soul of the company.
“If you say you want to keep both of those around, then what happens is, the things that you can't keep around anymore are early-stage clinical programs, that … are still interesting, still could do profound things for patients, but that have relatively high burn over the course of the next 18 to 24 months,” Kumar said.
BridgeBio is also seeking future partners beyond the listed out-licensing hopefuls. Though the sentiment is “kind of motherhood and apple pie,” the CEO wants partners that care about progressing the medicines and have the capability to carry a drug all the way to market, hitting that end goal of serving patients in need.
But, perhaps most importantly for BridgeBio, these partnerships are needed to, "hopefully, buttress our balance sheet so that we can get through these trying times.”
The BMS deal involved one such medicine, which was not on the list. The Big Pharma came to the rescue earlier this month, securing BridgeBio’s SHP2 inhibitor BBP-398 to be used in combination with its own checkpoint inhibitor Opdivo, joining the throng of companies working on SHP2 inhibition.
Built on an already existing relationship between the two, the BMS partnership aligns with BridgeBio’s “better owner hypothesis.” BridgeBio's chemical compound has shown promise in preclinical research in combo with BMS’ cancer therapeutics, making the pharma giant an ideal medicine partner, Kumar explained. Beyond that, BMS has a large pipeline that allows the pharma giant to reach a broad patient population BridgeBio may not have been able to get to on its own.
BridgeBio is “very open to having better owner discussions with someone like Bristol Myers Squibb,” Kumar said.
A day after BMS handed over the hefty paycheck, BridgeBio added $110 million to the bank by selling off a rare pediatric disease priority review voucher to an undisclosed buyer. The voucher was secured by the company in February 2021 for a rare childhood metabolic disorder treatment.
Between the upfront fee from the BMS licensing deal and the voucher sale, BridgeBio generated $200 million immediately. Coupled with debt restructuring and cost cutting, the deals strengthened the biotech’s financial position. But that’s not where the dealmaking ends.
Earlier this year, the company closed commercial deals for its first two approved drugs, Truseltiq and Nulibry, with Helsinn Group and Sentynl Therapeutics, respectively. Together, the transactions are expected to result in $100 million in operating expense savings in 2022 and 2023 while also serving up milestone payments and royalties.
As for the clinic, BridgeBio is pinning its hopes to potential value drivers including encaleret, a drug for autosomal dominant hypocalcemia type 1 patients, with pivotal data expected in mid-June. The company also has a big data announcement tied to a FGFR1-3 inhibitor for achondroplasia planned for July.
Then there’s acoramidis, BridgeBio's lead medicine that flopped in the late-stage trial last year, triggering the restructuring plan in which an undisclosed number of employees were laid off. On the heels of the second layoff round, Chief Strategy Officer Cameron Turtle exited the biotech in April. Kumar said there are no current plans to fill the role, and there also are no further layoffs planned at this time.
Since the results went live, shares in BridgeBio have fallen more than 80% to around $7.
Kumar is still optimistic about the therapy, which was under development for transthyretin amyloid cardiomyopathy, or ATTR-CM. The CEO pointed to a data readout expected in mid-2023. The trial is continuing based on the recommendation of an independent data monitoring committee.
The phase 3 fail prompted some soul searching among companies also developing ATTR-CM therapies. At issue was the six-minute walk test, where the placebo group outperformed the treatment group. Other companies with studies in the works in this indication use the same measures, including Alnylam.
Kumar said the drug “couldn't have ever really shown in the signal because everyone was walking, analogous to what a healthy volunteer would walk.” All secondary endpoints and key biomarker and biochemical markers suggested acoramidis had a statistically significant effect, he added.
Overall, Kumar said the setbacks BridgeBio—and other biotechs—have had to face are “intellectually interesting but humanly very hard things to deal with.” The CEO urged fellow executives to look at business models across the industry and beyond in hopes of building a better biotech space.
“We can all learn from this as an industry,” Kumar said. “This is not going to be the only time we all go through this.”
He concluded: “We have a 14- to 15-year product cycle. That's a very, very long cycle for innovation. And it's our responsibility, as people, as participants in this space, to ensure that we can do that sustainably.”