Episode 171 - January 30, 2026

Summary

• BIO CEO John Crowley’s China doctrine: “We don’t need to out-China China…” He counts about 100 true R&D Chinese biotechs when he first went to China with Amicus twelve or thirteen years ago versus at least 4,000 today, and argues capital flowing east is “perfectly rational” given US trial costs and regulatory uncertainty. The answer is fixing the US clinical-trial paradigm—potentially with Makary guidance making speed to clinic more like Australia’s—not using sticks, because trying to stop research in China “would be a fool’s errand.”
• On FDA, Crowley’s “right the ship” prescription is four items—stability, consistency, transparency, modernization—and he warns “the next 6 months, candidly, are really going to tell the story.” FDA headcount is down 20% from 1.5 years ago; the hiring exemption allows 1,000 new reviewers/inspectors with about 400 offers out, but he calls it “a 2-year effort.” BIO is piloting a platform to collect company complaints, anonymously or not—from high-profile CRLs down to tox-study demands—synthesized every 30 days for FDA leadership.
• MFN codification would be “devastating” and “unmanageable,” but Crowley is “confident that we’ll have a firewall in Congress” this Congress. The 16 companies that struck deals traded MFN in some form plus onshoring commitments for a 0% pharmaceutical tariff; the completed Section 232 investigation is with the White House, with presidential action due by the last week of March. BIO is challenging the legality of the CMMI demonstration models, whose comment period ends February 23; the White House push to codify MFN “may indicate” it realizes those models likely overstepped their bounds.
• AstraZeneca pledged $15B in China through 2030 versus $50B in the US, plus a third CSPC deal—$1.2B upfront, roughly $18B in biobucks and double-digit royalties for a preclinical long-acting peptide pipeline. Sam Fazeli asks whether that $15B is “worth about $30B of spend in the US.” Crowley’s reframe: don’t ask why AZ went to China; ask “how could we be more competitive?”
• Yaron Werber: IBB is back to its late-2021 peak while XBI sits at about 128 versus its early-2021 peak of about 167—and after five years of massive underperformance, new money says biotech “is only getting started.” Brian Skorney tempers it: sentiment has slipped from “a 7 or 7.5” to “a 6 or 6.5” on a post-JPM lull.
• ReGenix’s clinical holds are a field-level event for AAV gene therapy: a CNS tumor four years after intracerebral RGX-111, with the vector found integrated upstream of proto-oncogene PLAG1. FDA also held RGX-121 for Hunter syndrome, whose PDUFA is next week; Skorney’s framing—is this “just bad luck” against a denominator of tens of thousands, “or is there something specific about these constructs”?—matters more with Vanai Prasad, an outspoken critic of gene-therapy therapeutic-index flexibility, running CBER.
• Roche’s acquired obesity drug data looked competitive “even up to the triple agonist”—yet its share price barely moved, and Lilly and Novo did not really fall. Fazeli reads that as the market abandoning the 2%-increment beauty contest. The real game now is maintenance: dosing profile, tolerability, and muscle preservation. Separately, Amgen stepped away from the 50/50 KHK rocatinlimab OX40 deal—middling efficacy versus Dupixent, fevers and rare ulceration, and a fresh Kaposi’s sarcoma case in Sanofi’s program that Skorney called “very clearly likely a non-mechanism effect” and said could contribute to a warning or precaution limiting usage.

Deep dive

1. Crowley’s pitch to Washington: biotech is public health, economic growth, and national security

• Every policymaker meeting starts with why they should care: public health, biotech as an economic engine, and national security—a strong, healthy, safe, prosperous workforce and population as “an instrument of soft power.” That framing, he says, resonates bipartisan, reinforced by last April’s National Security Commission report on biotechnology, which highlighted the need for the US to win in biotech.
• The scale of the shift, as Crowley tells it: from about 100 true R&D Chinese biotechs when he was going to China with Amicus’s manufacturing facility twelve or thirteen years ago to “at least four thousand” today, moving from basic manufacturing and medicinal chemistry to advanced therapies and advanced manufacturing.
• His core position: the stick approach—blocking deals and research in China—“would be incredibly difficult and probably not very fruitful. We don’t need to out-China China… we just need to outcompete China.” The US still leads through universities, the academy, NIH, startups, and larger companies; the job is not losing that lead.

2. Winning means innovation plus access—and slashing the cost of the US clinical-trial machine

• Winning is twofold: a “virtuous circle of innovation”—NIH funding, capital, strong markets, contract manufacturing capabilities, and a modernized regulator—and access. On insurance: “it’s almost like now a doctor writes a prescription for their patient, and then it’s a recommendation to an insurance company.” Prior authorization and utilization management are BIO’s systemic targets, and the president is “zeroing in on insurance companies.” On affordability, out-of-pocket costs are what matter: patients “have no idea what list price, wholesale, average rebate, PBM” mean.
• Pressed by Josh Schimmer on affordability of innovation, Crowley says the US needn’t match China’s costs, just become much more competitive. His Amicus example: opening the IND was knowable work, but then came “a year of contract negotiations with universities, separate IRBs”—and layered legacy requirements justified by “that’s the way we’ve always done it.” His warning: “if we keep doing that, we might as well just give the business to China.” He thinks Makary’s team may soon issue guidance making entry to the clinic “much more like what they’re doing in Australia.”
• The withering scenario: you can’t outsource all research to China and keep only manufacturing, late-stage trials, and the market—“that may work for a time,” but over decades “you’ll start to see the withering of American biotech, and that can’t happen.”
• Crowley also sees AI as a potential cost and predictability lever, including for site selection, patient selection, data interpretation, and regulatory processes.

3. “Right the ship” at FDA—and BIO’s new complaint pipeline to Makary

• Crowley stands by Makary but unpacks his New York Times “time to right the ship” quote as four asks: staffing stability—the workforce is down 20% from 1.5 years ago; the hiring-freeze exemption permits 1,000 scientific reviewers and inspectors, with about 400 offers out, but “it’s a 2-year effort” through federal HR and training—consistency across review divisions, transparency (“what are the goalposts and what’s the game we need to play”), and genuine modernization. He cites particular frustration in CBER, cell and gene therapy, rare disease, oncology, and psychiatry, and says he dislikes “flexibility” because it can bring inconsistency.
• The new BIO platform, rolling out at the end of the quarter: companies submit FDA problems—“a high-profile CRL all the way down to… a reviewer on biostats who’s tough”—anonymously or not, synthesized every 30 days for FDA leadership without claiming the agency erred. His rationale from his operator days: recourse used to require “Janet Woodcock’s or Peter Marks’s cell phone,” which “isn’t sustainable and probably not very fair.”
• An unidentified panelist asked whether BIO would screen submissions. Crowley said it would not screen for importance; it would synthesize by category, with FDA leadership deciding what to prioritize. “I don’t know how well this is gonna work, but it’s something we’re going to pilot throughout the year.”

4. AstraZeneca votes with $15B—and pays up for preclinical Chinese peptides

• Fazeli’s news items came as a UK delegation led by Prime Minister Sir Keir Starmer visited China, with GSK and AstraZeneca leaders involved. AZ pledged $15B in Chinese manufacturing and R&D through 2030 versus $50B in the US. Fazeli’s open question to Crowley: is that $15B “worth about $30B of spend in the US” given cost differentials?
• The third CSPC deal is the striking one: $1.2B upfront, several billion dollars in biobucks—close to $18B in total by Fazeli’s estimate—and double-digit royalties for access to, development of, and commercialization of a preclinical long-acting peptide pipeline. Fazeli wonders whether AZ’s earlier AI-platform deal with CSPC surfaced things “that have led them to want to do a deeper partnership.” His conclusion: “this is not cheap anymore.”
• Crowley, reluctant to comment on specific companies, says he is sure Pascal Soriot ran a detailed analysis. He flips the question: “Why wouldn’t it be even more in the United States? What are they seeing in China?” On the UK, he said his September trade delegation discussed Britain’s ambition to become Europe’s number one and the world’s number two or three biotech player within a decade, while stressing that this requires people in the UK to be able to access those medicines and better prices to be paid for innovation.

5. MFN, tariffs, and the IRA pill penalty: firewall now, fix later

• On the continuing resolution, Crowley hoped that within the next 24 hours it would pass without a government shutdown and include PBM delinking and transparency relief plus reinstitution of the Pediatric Priority Review program. On MFN codification in the president’s healthcare one-pager: “we think that would be terrible and unmanageable”—no legislative text exists, and Crowley is “confident that we’ll have a firewall in Congress,” with Senate Finance viewing it as “highly dubious.” He called codification devastating if enacted: the existing deals were bespoke and partly confidential, and “nobody put out an 8-K.”
• On tariffs: the 16 companies that struck deals agreed to MFN in some form plus major onshoring commitments in exchange for keeping a 0% pharmaceutical tariff. The Section 232 investigation is complete and with the White House; the president has until the last week of March to act. Crowley expects BIO to seek workable exemptions where onshoring does not make economic sense, including small production volumes, unique materials, and certain therapeutic areas.
• BIO also questions the legality of the CMMI demonstration models GLOBE and GUARD, with comments closing February 23. Crowley said the White House push for MFN codification may indicate that it realizes the proposed models likely overstepped their bounds.
• On the IRA’s 9-versus-13 pill penalty, Fazeli’s puzzle—generics are easier for small molecules than biologics, “so you would have thought, if anything, it would have been the reverse”—gets a candid non-commitment from Crowley: “still, it’s just terrible policy.” The orphan-cures provision was fixed in the so-called big, beautiful bill, but he says the 9-versus-13 issue is not a legislative priority in this Congress; BIO has bigger fights with MFN and tariffs.

6. Measles and the vaccine fight: “How in the world did we get here?”

• Crowley’s sharpest break with the administration: common ground with the secretary on cell and gene therapy and rare disease, but “we disagree on vaccines and pretty strongly.” More than 200 vaccine bills were introduced in state legislatures this month, from attempts to ban mRNA vaccines to continued erosion of childhood vaccines; BIO has built vaccines, infectious disease, and global health into a center of excellence reporting directly to him.
• Why he thinks the industry ultimately wins: science and data, plus “ultimately, the president is not an anti-vaxxer. I think he’s tolerated this to a point.” If measles continues on its current path—or the US loses its special global vaccination status—he thinks changes may follow.
• Fazeli’s caveat: measles is also an issue in the UK, Canada, and Switzerland. In the US, growing vaccine hesitancy is compounded by pressure from some legislators, rather than being managed and reversed.

7. Sentiment, RevMed’s failed courtship, and the Eikon IPO test

• Werber’s TD Cowen preview: IBB is back at its late-2021 COVID-era peak; XBI, at about 128 versus its early-2021 peak of about 167, isn’t—and after five years of massive underperformance, incoming generalist money argues biotech “did well last year, but it’s only getting started.” Skorney is cooler: sentiment slid from “a 7, 7.5” to “a 6, 6.5” in a quiet post-JPM pause. Schimmer’s counter: “these are the golden years of biotech,” with dozens of private companies lining up with de-risked proof-of-concept programs for the IPO window—and the sector remains fragile to new policy headwinds.
• Revolution Medicines whipsawed: a Reuters AbbVie rumor met an unprecedented same-day denial, then FT and WSJ suggested Merck might buy it, then on January 26 WSJ reported that Merck was no longer buying because the parties could not agree on a price. Fazeli’s reverse-engineering from a roughly $30B market cap got to “the eighty odd billion dollars” in cumulative consensus through 2040 for a sensible return, though those distant estimates are thin and the number seemed stretched. RevMed “doesn’t need it”: potentially landscape-changing pancreatic-cancer data is due this year, and it has cash plus more available through its Royalty Pharma deal if needed.
• Eikon was seeking about $358M at a $16–18 range, implying a valuation just shy of $1B. It was potentially the second therapeutics IPO of the year after Actys. The company is run by Roger Perlmutter and Roy Baynes and backed by Foresite, Lux, and Soros. Fazeli liked the depth of response and waterfall plot for IKE-1001, a TLR7/8 dual agonist, at ESMO 2025. He was “a bit miffed” that IKE-1001 was not out of Eikon’s drug-development platform; Werber added that the PARP-1 inhibitor came from China rather than being internal, and that its data remains early with tough competition in prostate cancer. Investors’ bar is brutal: “biotech IPOs need to double for them to be counted as a good one.”

8. ReGenix’s integration event, Roche’s obesity read, Amgen’s OX40 exit

• Skorney’s rundown: in a deprioritized Hurler-syndrome program, four years after intracerebral RGX-111, a routine MRI found an intraventricular CNS tumor. After resection, genetic analysis intended to assess causality showed that the AAV vector integrated upstream of proto-oncogene PLAG1, likely leading to overexpression. FDA held both that program and RGX-121 for Hunter syndrome, whose already-delayed PDUFA is next week; Skorney thinks the hold probably will not be lifted before then. The AAV9 constructs use a CNS promoter and are directly injected into the brain. The field question is whether this is “just bad luck” against tens of thousands of patients—a Zolgensma-linked spinal neoplasm is precedent—or whether something specific about these constructs creates a higher risk. With CBER chief Vanai Prasad an outspoken critic of gene-therapy therapeutic-index flexibility, the onus is on the company.
• Fazeli on Roche’s acquired obesity drug: the data looked competitive “even up to the triple agonist from Lilly” in a cross-trial comparison, yet Roche’s share price did not move much and Lilly and Novo did not really fall. He reads that as evidence that the “2% here, 2% there” contest is receding. The differentiators now are keeping patients on drug, dosing profile, side effects, and “getting rid of this muscle aspect.”
• Werber on Amgen stepping away from rocatinlimab: not the end of OX40, but the end of Amgen’s involvement in the only OX40 receptor binder. The class is not beating Dupixent overall, though it has activity in Dupixent-refractory atopic dermatitis; Amgen’s drug uniquely causes initial fevers plus rare ulceration, and the 50/50 KHK deal would make it a drag on R&D and profitability.
• Skorney adds the Sanofi-program wrinkle: he called the Kaposi’s sarcoma case “very clearly likely a non-mechanism effect,” while noting that Kaposi sarcoma occurs in patients with OX40 deficiency or HIV/AIDS and that it was not totally shocking that shutting down the mechanism could lead to it. He said the case raised questions, could factor into Amgen’s investment decision, and potentially could lead to a warning or precaution on the label that limits usage.