Episode 185 -June 5, 2026

Summary

• The AI trade is setting biotech’s tape: SMH is up 66% year-to-date against IBB +1% and XBI +8%, with a $1.8T SpaceX IPO (~25% to retail) looming. Tess Cameron’s counter: on a trailing-12-month view, after the Q4 runup, sector performance “has actually been very strong,” driven by recovery and M&A. Brian Skorney adds it’s the S&P’s volatility, not biotech’s, driving relative moves—the XBI has been “kind of remarkably stable… more green days than red days.”
• Tess Cameron argues the bipartisan BIOSECURE legislation and the Moolenaar letter expanding COINS-style outbound screening to China licensing deals would backfire on American patients and benefit Europe. If US funds and pharma are made to do very little, “if I’m a European investor… game on for me, right?” Nothing in COINS stops a China-discovered drug reaching the US. The valid national-security issue, she says, is manufacturing supply chains for drug substance and its inputs, not capital flows.
• Summit/Akeso’s ivonescimab hit in HARMONi-6—a 34% reduction in risk of death in squamous NSCLC, with interim OS published in The Lancet—but the translatability fight is on. Benefit concentrated in under-65s in a Chinese heavy-smoker squamous population; Yaron Werber notes KOLs now want a ~25% hazard-ratio reduction in global frontline OS to crown a new standard, while the totality of evidence—BioNTech’s BNT327 at 63% ORR, Pfizer’s at 68%, plus TNBC and new frontline colon data—increasingly suggests “this bispecific really is doing something.”
• Revolution Medicines’ daraxonrasib in pancreatic cancer earned the ASCO standing ovation: overall survival 13.2 vs 6.7 months against chemo, a significant advance in the disease. Sam Fazeli’s caveats: real toxicity (rash, stomatitis, mucositis, diarrhea, managed via dose reductions) and a trial enriched to ~80% G12D/V mutations—but “they have set the bar” and opened the door for G12-selective, pan-KRAS and pan-RAS challengers.
• Breast cancer is a live battleground: Roche’s giredestrant missed in persevERA (mPFS 33 vs 28 months, hazard ratio crossed 1), putting AstraZeneca’s larger 1,392-patient SERENA-4 readout in 2H in focus. Meanwhile the selective-CDK4 race tightens—Pfizer’s atirmociclib (fully enrolled, ~60% ORR but neutropenia) vs BeiGene’s BGB-43395 (63–74% ORR, no neutropenia), with head-to-head phase 3s vs CDK4/6s about 3 years from readout, and PI3K triplets from Relay and Celcuity’s VIKTORIA-1 (PFS doubled to 11 months) reshaping the mutant-population debate.
• Grail missed its primary endpoint—reduction in stage 3/4 deadly cancers at three years—“in a pretty big way,” with an IRR just over 1 and stage 3 cancers actually increasing despite a 14% stage-4 reduction. Tess’s read: test performance looks good (PPV ~52%, high specificity, fewer emergency presentations), but whether pan-tumor early detection changes mortality remains unproven; the field may need a cancer-by-cancer approach.
• In vivo CAR-T is the new arms race: Lilly’s deal for Orna, for up to ~$7.5B ($3B upfront), is based on 18-patient BCMA myeloma data showing 100% MRD negativity—though one relapse and one MRD conversion at month 3 shadow durability at just 2.8 months follow-up. Legend is due to present at EHA next weekend: 100% ORR and 83% CRs at the higher dose in 12 patients versus an ex vivo bar of ~70–80%.
• Abivax fell 45% on 7 malignancies at the 50mg dose vs 1 each on 25mg and placebo in UC maintenance, despite efficacy beating best-case hopes; “it still scares you,” per Fazeli, with no obvious mechanistic explanation. Separately, Brian Skorney reads acting FDA commissioner Kyle Diamantas’s rare-disease roundtable—regulatory flexibility, patient voice, bringing back adcoms—as “at least an incremental positive” for orphan names, hedged by the memory that Makary sounded flexible at first too.

Deep dive

1. The AI trade sets biotech’s tape—but the 12-month view flatters

• Yaron’s scene-setting numbers: NASDAQ +13% YTD, QQQ +18%, SMH +66%, S&P +10%—versus IBB +1% and XBI +8%, with XBI -4% over the past month. The looming SpaceX IPO at a $1.8 trillion valuation, ~25% to retail, frames his question: does it trigger a market selloff or more momentum?
• Tess’s reframe: remember the “huge Q4 runup” after biotech was beaten down earlier in 2025—on a trailing 12 months, “that performance has actually been very strong,” driven by recovery and M&A. The macro overhangs are AI demand pulling capital and rate uncertainty: markets may face increases “instead of… headed into rate decreases.”
• Brian’s contrarian detail: biotech indexes haven’t been that volatile—it’s S&P swings, including 10 straight-up days and an unwind after the jobs report, driving relative performance. The XBI, “one of the most volatile indexes… has been kind of remarkably stable… you’re just seeing more green days than red days and I kind of like where we are.” Sam adds Europe is being “whipsawed” by the same AI flows, with rotation into older-economy value as a possible next game to play.

2. Tess vs. BIOSECURE: expanding COINS to licensing is a gift to European pharma

• The setup: bipartisan BIOSECURE legislation would add biotech to COINS coverage, while a letter from John Moolenaar, chairman of the Select Committee on the CCP, goes further—drawing attention to China licensing deals, which COINS currently allows.
• Tess’s north star is “what is best for American patients.” By that test, the legislation “would slow down access to new medicines.” Worse, it is asymmetric: “if I’m a European investor… my deals with China biotech are going to become that much cheaper… if I’m a European pharma… game on for me, right?” Nothing in COINS says a drug discovered in China cannot reach the US—US funds and US biotechs would be restricted from going there, while Moolenaar’s proposal could also make direct licensing deals more challenging. Bruce Booth (“patient first, America first”), Rod Wong, and Chen from TCGX are pushing the same line.
• Her separation of the real issue: physical manufacturing supply chains—finished product, drug substance, and its inputs, where the US is heavily China-dependent—are “an absolutely valid concern,” but the conversation has fixated on capital flows instead.
• On copycats, Yaron says literal copies cannot be commercialized in the US because of IP, while engineering around patents to produce something potentially better is fair game and raises the bar for US fast-followers. Brian agrees that under the patent system, building something new and potentially better off existing IP is fair game.

3. Can China innovate or just iterate? The panel says the trend isn’t stoppable

• Sam’s evidence: Chris Bard said at the AACR pre-event that nobody would have invested in a PD-1/VEGF bispecific. China did it anyway, and Sam expects genuinely new science and biology to emerge there within the next 1–2 years; he also says China already leads “by far” in materials science and chemistry idea generation.
• For European pharma—AstraZeneca, GSK, Roche and Sanofi—escaping any US rules is doubtful since the US is where they make most of their profits. If they could continue those deals, however, it would give them an edge over US large pharma.
• Yaron takes the other side: China has protected and subsidized its biotech; across semiconductors, shipping and EVs, “you do need a certain degree of protectionism when it comes to equal trade.” Brian’s view is that globalization’s tension is inevitable and has to be dealt with and embraced to some extent.
• Brian’s warning to private companies: staying in stealth without filing IP “actually increases the risk.” If someone else plays the IP card first, “you’ve lost that initiative… you’re no longer the innovator.”

4. HARMONi-6 worked—the fight is over translatability

• The result, per Sam: ivonescimab, Summit’s license from Akeso, in phase 3 squamous NSCLC delivered a meaningful OS gain—a 34% reduction in risk of death at an interim analysis, published in The Lancet and working across various subgroups. The caveats include an imbalance of women and benefit concentrated in patients under 65, with discussant Dr. Julie Brahmer facing a difficult question about whether Chinese data translates to a global population.
• Yaron’s synthesis: squamous disease in China has a high proportion of men and heavy smokers, so differences may reflect nuanced or mutation- and smoking-related reasons; non-squamous disease may be more predictable. Historically, ivonescimab data from phase 1 in China and in the Western population was “essentially identical.”
• Cross-trial ORRs with chemotherapy: BioNTech’s BNT327 showed 63% overall and 64% in non-squamous disease, ivonescimab 50–54%, and Pfizer’s PD-1/VEGF drug 68%. Yaron’s KOLs want about a 25% hazard-ratio reduction in frontline OS to call it the new standard. They are also “getting a little bit more excited frankly” about triple-negative disease and new frontline colon data, where ivonescimab plus chemotherapy compared favorably with historical Avastin plus chemotherapy despite PD-1 having no real activity in colon cancer.

5. Revolution Medicines earns the standing ovation in pancreatic cancer

• Sam on daraxonrasib in PDAC—a disease with “pretty much no improvement in standard of care”: overall survival jumped to 13.2 vs 6.7 months, with PFS, response rate and disease-control rate all better. It is “a significant advance for this disease.”
• Tolerability is the honest asterisk: rash, different from the EGFR-world rash, plus stomatitis, mucositis and diarrhea. Dose reductions and interruptions were available, while discontinuations were less of an issue; the chemotherapy control arm is “not a walk in the park either.”
• The competitive opening: about 80% of the trial had G12D/V mutations, with another 30% having G12 mutations in the RAS molecule—a more concentrated distribution than in the real world. G12D- or G12V-directed inhibitors, pan-KRAS drugs and pan-RAS drugs now get to test whether they can beat daraxonrasib. “You cannot take it away from Revolution Medicines that they have set the bar.”

6. Breast cancer: a SERD miss, the CDK4-selective race and PI3K triplets

• persevERA (Roche’s giredestrant, frontline HR+/HER2-): mPFS was 33 vs 28 months, but the hazard ratio crossed 1. Sam says the result could reflect trial size or power; AstraZeneca’s SERENA-4, with 1,392 patients versus 992, reads out in the second half. Olema has time to potentially adjust its trial with this knowledge. Whether frontline SERDs should target ESR1-mutant disease needs detailed data from more than one trial.
• Yaron on selective CDK4: the CDK4/6 class sells about $15B, but CDK6 modulation may add neutropenia without efficacy. Pfizer’s atirmociclib, fully enrolled in frontline with about a 60% response rate, still causes neutropenia—its “big Achilles heel.” BeiGene’s BGB-43395 posts 63% confirmed and 74% unconfirmed ORR with letrozole, no neutropenia, and mostly grade 1–2 GI toxicity improved by taking the drug with food. BeiGene was about 3 years behind Pfizer but is now roughly 1–1.5 years behind. Against a CDK4/6 plus endocrine-therapy bar of about 50–55% ORR and 2-year PFS, the head-to-head 1,000–1,100-patient phase 3s take about 3 years to read out.
• The PI3K axis: about 15% of patients carry PIK3CA mutations. Relay plus Pfizer’s atirmociclib goes to frontline phase 3 next year in mutants—a “more elegant way to de-risk” since a triplet combining a CDK4 inhibitor, a PI3K inhibitor and endocrine therapy should have a chance to beat CDK4/6 alone. Relay’s own second-line phase 3 data is expected in early 2028.
• Celcuity’s VIKTORIA-1 PI3K/mTOR triplet doubled second-line PFS to 11 from about 5.5 months. Physician feedback says it could become standard of care, despite IV infusions three of four weeks and mucositis and stomach-lining inflammation. An oral Relay inhibitor may offer another option in roughly 1.5–2 years.

7. Grail’s MCED miss: a good test without proven mortality benefit

• Tess’s readout: the primary endpoint—reduction in stage 3/4 deadly cancers at three-year follow-up—was missed “in a pretty big way,” with an IRR a little over 1 across about 706 intervention patients versus about 700 controls; there was a 14% reduction in stage-4 cancers, “but interestingly an increase in the stage 3s.”
• The nuance: the trial was well run and balanced, emergency presentations fell, and test performance looked good—PPV about 52% with very high specificity. The open question is whether pan-tumor early detection changes mortality at all; the greater impact in CRC suggests “we have to look at a cancer-by-cancer basis” and tie detection to interventions that actually improve outcomes.

8. Rapid fire: in vivo CAR-T, Abivax’s cancer scare and a more flexible FDA

• Lilly’s deal for Orna, worth up to $7.5B with $3B upfront, follows 18-patient in vivo BCMA CAR-T data: 100% ORR and 100% MRD negativity overall, with 4 of 6 patients followed for more than 4 months reaching complete response. But one relapse and one MRD conversion at month three are “a little shadow on durability.” Sam tempers the CARTITUDE-1 comparison—3–5 prior lines versus 3–16—at just 2.8 months’ median follow-up.
• Legend is due to present in vivo LNP data at EHA next weekend: 12 patients, with the higher dose producing 100% ORR and 83% CR, no real ICANS and only grade 1–2 CRS at 2.2 months. The ex vivo bar is roughly 70%–80%.
• Brian’s quick flag on head and neck EGFR: investors chased Merus, acquired by Genmab, and Bicara while discounting J&J, which “came from essentially nowhere” to file Rybrevant ahead of everybody else.
• Abivax’s UC maintenance data beat best-case efficacy hopes, but seven malignancies at 50mg versus one each at 25mg and placebo sent the stock down 45%, after which it recovered about 30% of the loss. Sam says KOLs suggest the signal may not be related to the disease or the drug, and JAK inhibitors already carry malignancy black-box warnings, “but it still scares you when you see it concentrated in the higher dose.” It remains an overhang pending the FDA process.
• Brian on the FDA rare-disease roundtable: acting commissioner Kyle Diamantas “seems to be saying and doing the right things”—regulatory flexibility, patient voice, bringing back advisory committees and relying more on career staff and external experts. He views this as “at least an incremental positive” for orphan stories where 500-patient dual-arm trials are not feasible, while noting that Makary “sounded really flexible” at first too.