Episode 153 - September 5, 2025

Summary

• The panel opened with a notably positive macro read: XBI was up 11.9% in a month versus 2% for the S&P — “that is not a normal scenario for us to be living in,” per Sam Fazeli. A 22,000 nonfarm-payrolls print versus 75,000 consensus “cemented” a September rate cut, Graig cited the largest upward trend since May in over a decade excluding COVID, and John Maraganore said, “I don’t want to jinx it, but it feels better than it’s been for a while.”
• Sanofi fell ~10% on a positive Phase 3 — amlitelimab met its COAST-1 endpoint in atopic dermatitis but cross-trial looked like Amgen’s rocatinlimab, not Dupixent. With Dupixent modeled at $25.5B in 2030 (38% of revenue) and losing patent protection in 2031, “twenty-five billion is a tough thing to fill,” raising the question of whether Sanofi will pursue more M&A.
• Ionis’s olezarsen Phase 3 delivered 50–70% triglyceride lowering plus a reduction in acute pancreatitis — the clinical endpoint that could allow development in severe hypertriglyceridemia without an outcomes study — while Arrowhead’s quarterly zodasiran reduced two-year pancreatitis events from ~20% to 4% in open-label data. Maraganore’s caveat: this is “beyond just a KOL, lipid specialist type market,” and five-digit pricing means a narrower treated population — a trade-off the companies must solve in their go-to-market strategies.
• Obesity expectations are resetting toward orals that may not need injectable-level efficacy: orforglipron posted 10.5% weight loss in obese diabetics without tanking Lilly, and Viking’s oral hit 12% at 13 weeks with 28% discontinuation versus 18% on placebo. Fazeli treated Novo’s 57%-better-MACE retrospective analysis with a “pinch of salt,” kept the firm’s “$100 billion in 2030” category call, and Maraganore pushed back on Graig’s thesis that orals will be priced dramatically cheaper: “I don’t remember that being the way that new drugs come to market.”
• Maraganore unveiled his third act with Clive (after Angiomax and inclisiran/Leqvio): a cardiovascular-prevention company pairing a causal-AI risk tool built on UK Biobank with an annual siRNA hitting PCSK9 and angiotensinogen, priced at “hundreds of dollars per annual dose.” He framed it as “taking cardiovascular disease off of your tombstone” and “the most important thing I’ve ever gotten involved with from a public health perspective,” with the first program entering the clinic within a month.
• Vaccine politics are “coming to a head”: Trump’s Truth Social post, Kennedy’s Senate testimony, and FDA requests for placebo-controlled booster trials and circulating-spike-protein studies from Moderna, Novavax, and BioNTech — falling revenue meeting rising costs. Ahead of the 18th’s ACIP meeting and the autism report, Fazeli’s call was: “I’d be shocked if vaccines are not mentioned.”
• Catalyst stack: the World Lung presidential session Sunday (ivonescimab’s HARMONi-A OS readout — with a hoped-for HR of 0.75–0.8 and China/ex-China consistency — plus AstraZeneca’s FLAURA2 OS), then a fall neuro gauntlet. Paul thinks Lilly’s Alzheimer’s prevention interim is “fairly likely to work” but questions commercial viability given ~90% screen failure; also on deck: KarXT in AD psychosis, Novo’s GLP-1 in Alzheimer’s, Axsome’s agitation sNDA, and uniQure’s Huntington’s data as a test of whether CBER’s “Peter Marks doctrine” talk is real.

Deep dive

1. The XBI finally decouples — and the Fed is the driver

• Fazeli’s numbers frame the episode: XBI +11.9% over the past month versus +2% for the S&P 500 — “that is not a normal scenario for us to be living in” — after two or three years in which higher rates made it harder to bring cash into high-beta sectors and a glut of “too-early-stage IPOs” from 2019–2021 weighed. Nonfarm payrolls at 22,000 versus 75,000 consensus (range 30,000–100,000) “cemented a rate cut for September at 0.25%,” with some arguing for half a point.
• Paul’s relative-value add — hedged as “already over my skis” — is that generalist money sees “the tech craze and the AI craze come back to earth a little bit,” making biotech relatively attractive; unusually, this bounce is driven by successful launches at small and midsized companies, not M&A, where premiums have been “underwhelming.” Graig, citing his firm’s healthcare strategist Jared Holtz, added that the negatives (FDA/HHS/CDC uncertainty and rates) “at least are being appreciated,” and since May biotech has posted its largest upward trend in over a decade excluding COVID euphoria.
• Maraganore’s close: the recovery is “very correlated” with Fed anticipation; if the Fed cuts rates meaningfully, investors may shrug off FDA, tariffs and MFN uncertainty, “believing companies will figure their way through it.” “I don’t want to jinx it, but it feels better than it’s been for a while.”

2. Sanofi down 10% on a positive Phase 3: the Dupixent cliff does the math

• Fazeli’s mechanism: amlitelimab (OX40-ligand antibody) met its COAST-1 primary endpoint in atopic dermatitis, but efficacy “fell short of what would make it interesting” versus Dupixent — cross-trial it looks “pretty similar” to Amgen’s rocatinlimab, so perhaps a second- or third-line cycling option. Only one in three patients on Dupixent are optimally controlled, and Ebglyss is already on the market.
• The reason the stock cared: Dupixent is modeled at $25.5B in 2030 — beating Humira, 38% of Sanofi revenue — and loses patent protection in 2031. “Twenty-five billion is a tough thing to fill.” The result raises the question of whether the patent expiry will entice more M&A for drugs that could matter in that timeframe.
• Paul’s observation, worth keeping: even complicated large caps “still at the end of the day feel like they trade like small caps where only one or two products matter to people.”

3. Insmed: the $30B respiratory franchise

• Graig’s run-through of “one of the most exciting companies in my coverage universe”: Arikayce, on the market for seven years for a specific mycobacterial lung disease, is tracking to $400M+ this year. The stock is up over 100% to a market cap above $30B — but the excitement is two new products.
• Brensocatib, up over 500% since its Phase 3 readout, was approved last month as Brinsupri for bronchiectasis — with no previously FDA-approved drugs for the condition, at-least-$5B peak-sales projections, a “really clean” label, and well-received pricing.
• The second leg is TPIP, a “me-better version of United Therapeutics’ Tyvaso”: June’s Phase 2 PAH data beat buy-side expectations (+30% on the print), and last week’s Tyvaso Phase 3 win in IPF sent United up 30%+ and Insmed up another 7% on the read-through. A second Tyvaso study is ongoing and may read out early next year; the market’s view is that wherever Tyvaso works, TPIP is likely to work there as well.

4. APOC3 cage match: olezarsen’s pancreatitis signal vs. zodasiran’s potency

• Maraganore’s framing: “It seems like RNAi and ASOs want to arm wrestle all the time, but it’s all linked to the same phenomenon of delivery.” Ionis’s olezarsen (monthly GalNAc ASO) posted 50–70% triglyceride lowering in its Phase 3 CORE studies — “I had to tip my hat to my friends over at Ionis” — but the load-bearing result is reduced acute pancreatitis, the clinical endpoint that could allow a drug for severe hypertriglyceridemia to avoid an outcomes study. “Vascepa did it with Amarin, but even that story was controversial.” Safety data remain limited, but Maraganore said the product looks encouraging and should reach market.
• Arrowhead’s zodasiran, “a couple of years behind,” showed open-label PALISADE two-year pancreatitis event rates falling from around 20% in the placebo group to 4%, with quarterly dosing and a “more significant reduction of triglycerides by far.” A similar showdown is expected in Lp(a) in one or two years: Novartis’s Ionis-derived pelacarsen versus Amgen’s Arrowhead-derived olpasiran, with the ASO currently a little ahead of the siRNA.
• The commercial exchange: Paul asked whether this is “not a KOL market” — KOLs like the drugs, but scale requires going broad. Maraganore agreed, and on Paul’s pricing-power question, his trade-off was that pricing into the five-digit range — “I don’t think it’s gonna get much higher” — comes with “a significant reduction in the patient population that ultimately gets treated.” Both companies still need to work through their go-to-market strategies. Arrowhead’s Phase 3 readout has no guidance; John thought it was at least next year and possibly longer.

5. Obesity: orals reset the bar, but nobody buys the cheap-pricing story

• Paul’s puzzle set the table: “I just can’t think of any market… where tiny differences in efficacy actually drive the almost existential question of whether a drug is commercially viable” — why do these stocks swing on a 2–3-point weight-loss miss? Fazeli’s answer: never-before-seen valuations (Lilly trillion-dollar talk, Novo at 700–800 Danish kroner) trading on 2028–30 estimates. “Is it a zero-sum game? It kind of looks like it.”
• On Novo’s retrospective analysis claiming 57% greater MACE reduction for Wegovy versus tirzepatide: “I’m sitting there thinking, how can that be possible? We never saw that in the RCTs” — short follow-up and unknown tirzepatide dosing make it difficult to interpret, so investors should take it “with a pinch of salt.” Fazeli said it looked like an attempt to create a marketing edge.
• The oral data: orforglipron’s 10.5% versus 2.2% placebo in obese diabetics didn’t tank Lilly because “they’d set the expectations correctly.” Fazeli’s standing view is that the 22–25% injectable targets “are just crazy high, and you probably don’t need that,” especially for maintenance. The small-molecule approach should also position Lilly against Novo’s oral semaglutide; the discussion flagged a fasting-state requirement as a drawback. Viking’s oral hit 12% at 13 weeks — best-in-class efficacy, but worst-in-class tolerability, with 28% discontinuation versus 18% on placebo.
• Graig’s bull case for orals — reimbursement is the KOLs’ biggest complaint, small molecules are cheaper to manufacture, and PCPs “like writing prescriptions patients can just go pick up” rather than referring injections — is that orals could generate more dollars through broader uptake. Maraganore pushed back: the tolerability/efficacy verdict is still out, and why would Lilly or Novo “think dramatically differently on pricing” in their biggest growth segment? Fazeli concurred: “I don’t remember that being the way that new drugs come to market.” His colleague Mike Shaw’s headline stands: “Lilly to outpace Novo’s obesity sales, hits $100 billion in 2030” — across CagriSema, retatrutide, survodutide, other GLP-1s and orals. Smaller plays flagged: Terns’ oral GLP-1 Phase 2 in Q4, Corbus’s CB1 program, and private Kailera.

6. Maraganore’s third act: prevention priced like a flu vaccine

• The news of the week from Maraganore himself: a new cardiovascular-prevention company with Clive — after Angiomax in 1997 and the 2013 inclisiran deal that became Leqvio and a roughly $10B Medicines Company sale to Novartis — is “our third act together, which is always the best act.” The thesis is that ASCVD is “a problem of cumulative exposure,” so lowering LDL and blood pressure in otherwise-healthy people in their 40s and 50s, before guideline thresholds, could mean “essentially taking cardiovascular disease off of your tombstone.” It “could be the most important thing I’ve ever gotten involved with from a public health perspective.”
• The stack: a causal-AI prediction tool, Klotho Health, built on UK Biobank with cardiologist Brian Ference, paired with an annual siRNA targeting both PCSK9 and angiotensinogen. Maraganore said they are not looking to make the tool a companion diagnostic. The first program enters the clinic in a month after two years in stealth.
• On Fazeli’s “double-click” on the early pricing discussion: “hundreds of dollars per annual dose,” benchmarked to the flu-vaccine space — “it is vaccine-like… I know the vaccine word is a bad word these days. I don’t think it is.” Gene editing, requiring IV infusion and high cost, is not viewed as competitive for this upstream population, though Maraganore is excited about it in more morbid populations such as heterozygous FH. Paul’s analogy: look how long it took from the RNAi Nobel to inclisiran’s approval.

7. Vaccine politics “coming to a head”

• Maraganore, tipped by Matt Herper’s story, read Trump’s Truth Social post — praising “extraordinary” data from Pfizer and others, crediting Operation Warp Speed, and referring to the CDC being “ripped apart” — as evidence of “some anxiety in the MAGA world, I guess, in the MAHA world as well.” He also pointed to Kennedy’s Senate testimony and said, “I can’t get my COVID vaccine yet in Massachusetts, and I think that’s ridiculous.”
• Fazeli noted that ACIP’s meetings “always had plenty of data” on COVID-vaccine benefit, even three years after Operation Warp Speed — “the president only needs to look at his own secretary’s ACIP meetings” — even as Makary said on CNN that children had died due to the vaccine. Meanwhile, Prasad’s FDA letters to Moderna, Novavax and BioNTech request placebo-controlled booster trials and circulating-spike-protein studies (“I don’t see why circulating spike protein is gonna tell us anything at all”) — revenue is falling, costs are rising, and the frequency of such testing is unclear.
• Next: ACIP on the 18th and the autism-causes report. “I give you a choice as to what you think is gonna be in that research… I’d be shocked if vaccines are not mentioned.”

8. Fall catalysts: World Lung Sunday, then a neuro gauntlet

• Fazeli’s World Lung preview: Summit/Akeso’s ivonescimab HARMONi-A readout post-Tagrisso in EGFR-mutated NSCLC — he wants an OS hazard ratio “in the 0.75 to 0.8 region” with the confidence interval clear of 1, and above all consistency between China and ex-China data (~38% ex-China enrollment). It is in Sunday’s presidential session, though he’s “not really that excited about the commercial potential” given amivantamab, Trop-2 ADCs and other bispecifics. Also there: AstraZeneca’s FLAURA2 OS — needing a “meaningful chunky hazard ratio” amid pressure from J&J’s Rybrevant-plus-Lazcluze combination — plus Nuvation (+18% that day) and Nuvalent.
• Paul on Alzheimer’s: the Aβ-antibody launches have been “a big disappointment,” but Lilly’s presymptomatic prevention interim — timing unknown, “theoretically it could come any time” — is “fairly likely to work” given the class history: earlier biomarker-positive patients plus dosing high enough to push through ARIA produced efficacy. His hedge is commercial viability — capacity strain, ARIA risk-benefit in earlier patients, and Lilly screening out almost 90% of patients — so “the tangible impact may take time.” Also: BMS’s KarXT in AD psychosis, where the drug should work but tolerable dosing is the question, and Novo’s GLP-1 readout, where Paul is “somewhat more cautious” — dementia-prevention epidemiology may not translate to patients who already have Alzheimer’s, though a win would mean “more problems for the Aβ antibodies.”
• Graig’s symptomatics thesis: DMTs do not erase psychosis and agitation — agitation is “the number one reason” families institutionalize patients, and the only approved drug, Rexulti, carries a black-box mortality warning that is “almost contraindicative of use in Alzheimer’s patients.” Axsome’s Auvelity sNDA, supported by positive datasets from three of four late-stage studies, could mean approval next year; Graig also cited regulatory flexibility in neurodegenerative disease reviews. Neumora’s vasopressin-receptor program has a proof-of-concept or proof-of-signal agitation readout expected by year-end.
• Paul’s closers: Rapport’s refractory-epilepsy readout, originally framed as a biomarker study, will now be judged on actual seizure data given relatively high baseline frequency — “a drug we think has a good chance of success” — and uniQure’s Huntington’s data this month are the gene-therapy test of whether CBER’s recent talk that “sounds a lot like the Peter Marks doctrine” becomes real.