1. Reversal of Fortune for Reverse Mergers
Reverse mergers are all the rage for biotech deals. Though “once disparaged,” they’re happening at twice the pace of last year. Jacob Bell offers a clear explanation of what they are – and why they have gained popularity:
Reverse mergers come in different shapes and flavors. But at their core, they are deals between one private and one public company, where the former leverages the latter’s hard-won spot on the public markets…The stigma has dissipated over the last few years, in large part because of the Philadelphia-based investment firm Fairmount Funds. The firm would first identify a “fallen angel,” or a public biotech that had been wrecked by setbacks, burned through its cash and had little left of value beyond its market listing. Fairmount would then assemble a tight, often institutional group of investors to line up funding for whatever private biotech combined with the fallen angel…Compared to the IPO process, where many parties commonly fight over scraps of equity, a Fairmount-led reverse merger gave a narrow roster of firms the opportunity to negotiate for more meaningful stakes in an emerging company.
2. More AI, More Drugs?
Maybe not. Michael Santoro, a business professor, argues while AI has succeeded in designing molecules, it is struggling to find “the right biological target…the costly, failure-prone part of making a medicine.” That gap may determine if AI really can change drug development:
A model can learn the rules of chemistry because we know them; it cannot learn the rules of a disease we do not yet understand. Drugs fail in two ways—the molecule is wrong, or the biological bet behind it is wrong — and AI has largely conquered the first while barely touching the second. It has made the cheap end of development cheaper and left the expensive end, where the science is genuinely hard, exactly where it was.
3. More AI, More Jobs?
Maybe so. Writing in The New England Journal of Medicine, Dr. Dhruv Khullar argues that AI “could lead to an expansion, rather than a contraction, of the clinical workforce.” His case rests on a few basic principles of supply-and-demand:
The first is the Jevons paradox, whereby technological advances that enhance the efficiency with which a resource is used can lead to an increase — rather than a decrease — in use of that resource…In health care, technological advances that made procedures such as cataract surgery and joint replacement more efficient by reducing the amount of clinician effort necessary to perform them, shortening recovery periods, and improving safety enabled more patients to undergo those procedures. Decreases in the cost of genetic testing and magnetic resonance imaging have coincided with growing use of these technologies within and outside conventional medicine. There are more radiologists working in the United States today than there were a decade ago, and radiologists have higher average incomes and larger workloads than they did in the past.
4. Demand, Without Supply
HLG ran an analysis of 100 press releases from the world’s top 10 pharma companies to see what they prioritize talking about. In short: pharma loves talking about innovation, but not supply chains. This reticence is at odds with the risk. Dr. Joseph Varon, a critical care physician, makes a frightening assessment of the fragile nature of the US drug supply chain – and the leadership void around it:
We have become increasingly “sophisticated” at firefighting without fully fireproofing the building. Regulatory agencies and manufacturers can work heroically to prevent an individual shortage or restore supply after disruption, but the larger structural weaknesses remain if the underlying production system continues to depend upon limited suppliers, aging manufacturing lines, thin margins, and geographically concentrated sources.
5. A Press Release, but No Treatment
Trial Friend, a patient-focused rare disease trial finder, offers a guide for families looking to access newly approved treatments for rare diseases. Pharma leaders take note. The guide holds pharma accountable for its pre-launch prep:
On approval day, 3 things actually exist: a legal green light, a drug label, and a press release. What usually does not exist yet is drug in a pharmacy near you. The speed of what follows depends mostly on what kind of product it is and how much of the launch machinery the company built in advance.
The fast end looks like Lumvoa and Modeyso. Both are conventional products from companies that spent the months before approval signing pharmacy contracts, hiring case managers, and printing enrollment forms.
The slow end looks like Casgevy. A gene therapy cannot ship to a pharmacy. Hospitals had to be individually authorized as treatment centers, staff trained, and each patient’s own cells collected and edited in a manufacturing run that takes months per person. Vertex had stood up 45 authorized centers by November 2024, 11 months after approval, and was still building toward 75.
