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How the Tide Has Turned: Ample Lab Space for Rent
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By Brian Gormley, WSJ Pro
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Good day. An overabundance of lab space is leading landlords to grovel for business from biotechnology companies.
During the pandemic boom, builders threw up labs to meet increasing demand. Biotechs, desperate for space, often leased more than they needed for fear of being shut out, said Austin Barrett, vice chairman, head of life sciences North America for Savills, a global real estate-services firm.
Not only that, but biotechs often had to split the cost of outfitting the leased space to their specifications with the landlord, Barrett said.
That has changed. Nearly a quarter of the U.S. life sciences office space that Savills tracks was vacant in the second quarter, according to the firm.
Biotechs, as a result, are paying lower rents and landlords are outfitting space to their tenants’ liking on their own dime, Barrett said. They also are offering perks, like a year of free rent, he added.
The upshot: biotech startups, which need employees working together in a lab, can apply more of their venture dollars to drug development and less to real estate.
“You’re seeing concessions across the board because everyone is competing for occupancy,” Barrett said. “This is probably the biggest swing in the tenants’ favor I’ve seen in a long time.”
And now on to the news...
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Patent cliff. The pharma industry is entering its biggest wave of patent expirations in decades. The world’s bestselling drug in 2025, Merck’s cancer immunotherapy Keytruda, loses U.S. patent protection in 2028, and nearly every pharma company has at least one blockbuster drug that will go off patent in the next five years.
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The scale of the cliff “is what has driven, and will continue to drive, companies to seek out new growth opportunities,” said Greg Graves, a senior partner in the life sciences division of McKinsey.
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In all, more than $500 billion of projected global sales are at risk of losing patent protection by 2033, according to biopharma market-research company Norstella.
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$2.875 Billion
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The the amount Eli Lilly could end up paying to acquire biotechnology company Merida Biosciences.
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Eli Lilly to Buy Merida Biosciences for Up to $2.875 Billion
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Eli Lilly remains on a shopping spree, agreeing to pay up to $2.875 billion in cash for biotechnology company Merida Biosciences in a deal that bolsters the drugmaker’s immunology portfolio. Eli Lilly on Monday said privately held Merida is advancing a new class of precision therapeutics for serious autoimmune and allergic diseases, with its lead program in Phase 1 development for Graves’ disease and thyroid eye disease. The Merida deal continues a spate of acquisitions by the Indianapolis company, which is flush with cash from its market-leading weight-loss-drug franchise.
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Founder of Investment Firm Charged With Defrauding Investors
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The founder of private-stock investment firm Linqto has been charged with defrauding tens of thousands of investors to whom he marketed investments in shares of pre-IPO companies. Linqto founder William Sarris is accused of manufacturing false scarcity of private company shares to drive up prices. Prosecutors allege he pushed markups beyond what his own lawyers warned him was lawful to boost his company’s revenue. He was charged this week with securities fraud, broker-dealer fraud, wire fraud and conspiracy. A lawyer for Sarris said he “is innocent of these charges and intends to fight them.”
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People
Resalis Therapeutics, a startup developing RNA-based therapies for the treatment of metabolic disorders, appointed Diana M. Røpcke as chief medical officer. She was previously at Novo Nordisk.
Helfie AI, a startup delivering personalized health checks and insights via smart phone, appointed John Rego as chief financial officer.
Exits
Stryker seeks to bolster its shoulder surgery portfolio with an agreement to acquire ZuriMED, the developer of a soft tissue augmentation technology.
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Medici Brands, the New York-based parent company of a high-protein food brand and a low-calorie confectionery brand, scored $250 million in Series B funding. Greenoaks and Valor Equity Partners co-led the round, which included participation from Iconiq and Imaginary Ventures.
Thyme Care, a Nashville, Tenn.-based cancer-care support provider, landed $125 million in Series E funding. Morgan Health led the round, which saw participation from investors including CVS Health Ventures, AlleyCorp, a16z Bio + Health and Frist Cressey Ventures.
Typewriter Therapeutics, a startup developing RNA-based gene therapies for patients suffering from cancer, autoimmune and severe genetic disorders, emerged from stealth with $56 million in Series A funding. AN Venture Partners and RA Capital Management co-led the round, which included additional support from ANRI and Gemseki. The company also appointed Matthew Stanton as chief executive officer and Leanne Peiser as chief scientific officer. Typewriter Therapeutics is based in Tokyo and Cambridge, Mass.
EIT Pharma, a Kirkland, Wash.-based biotechnology startup developing a treatment for chronic hepatitis D, closed a $35 million Series A round led by Propel Bio Partners.
N-Power Medicine, a Redwood City, Calif.-based startup focusing on oncology drug development and community cancer patient care, closed a $32 million Series B round from investors including Labcorp Venture Fund, Merck Global Health Innovation Fund and Innovatus Capital Partners.
Konko AI, an AI platform that manages patient journeys across Latin America, picked up $6 million in funding. Hi Ventures led the investment, which included contributions from LifeX Ventures, SquareOne Capital and others. The company is based in New York and Costa Rica.
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The U.S. has now reached 26 such deals covering 89% of the branded drug market, the White House said. KEVIN DIETSCH/GETTY IMAGES
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A $480,000-a-year pill reflects a new normal for cancer drugs (New York Times)
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Ultragenyx drug to treat Angelman syndrome, a rare disease, fails late-stage trial (STAT)
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UniQure, after setbacks, seeks FDA approval of Huntington’s gene therapy (BioPharma Dive)
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'We’re not doing 30 bets a year': Vijay Pande on betting small after running $4 billion at a16z (TechCrunch)
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