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How Will Pricing Be Set for a COVID-19 Vaccine

The unprecedented challenge of pricing a coronavirus vaccine



This article was originally published by PharmaPhorum.

  The optimal pricing strategy for a new vaccine involves setting a fair and sustainable price that enables the eligible population in need across the world to gain access, while also rewarding innovation and supporting further research and development. The need for a SARS-CoV-2 vaccine is arguably more urgent, and more global, than ever before for a vaccine. As the 130+ vaccine candidates currently in development progress through clinical testing, a key question for their manufacturers is how COVID-19 might be changing the equation when it comes to what a responsible pricing strategy might look like. At the same time, payers are also faced with needing to prepare and plan for how to react and manage this situation. Payers’ expectations regarding the pricing of SARS-CoV-2 vaccines was one of a number of areas we explored in the first wave of our latest syndicated study, in which we set out to assess the impact of COVID-19 on biopharmaceutical market access through interviews conducted with payers and advisors in the US, Europe, Brazil, and China during April and May 2020. This article shares selected insights from our study that are relevant to this topic, bringing the perspectives of the experts we interviewed together with a review of the recent commentary and discourse around fair pricing strategies for COVID-19 technologies more generally. Learnings from drugs and therapies Vaccine development – even at the accelerated speeds developers are currently working towards – takes significantly longer than repurposing existing or legacy treatments that have already been developed or entered the clinical development process for other indications. Therefore much of the debate around the pricing of COVID-19 technologies to date has focused on drugs and therapies.

“Gilead remains under close public scrutiny. Feedback from experts in our study suggests a ‘hangover effect’ from their approach to pricing in HCV, particularly in the US”

In particular, Gilead has been fast off the mark with its antiviral remdesivir, which was originally developed to treat hepatitis C, and later tested against ebola and marburg – but not found effective for any of these. On 29 April, an early data read out from a placebo-controlled trial of patients with advanced COVID-19 showed patients receiving remdesivir recovered in a median of 11 days after beginning treatment, compared with 15 days for patients in the placebo arm. The data also hinted at a survival benefit for remdesivir-treated patients (although death rate was – quietly and controversially – switched from a primary to a secondary endpoint mid-trial in order to secure a positive outcome with regulators). Based on this data, the Institute for Clinical and Economic Review (ICER), an independent US price watchdog, proposed two different approaches to estimate a potential price for the drug. The first approach, which they termed ‘cost recovery’, uses a marginal cost model in which the price set would compensate Gilead for the cost of production without factoring in the cost of R&D or allowing for any additional profit. They worked this out to be $10 per patient. Such a model is virtually unheard of for innovative pharmaceuticals in ‘normal’ circumstances, given the high cost of R&D and the need to reward risk and innovation. However in the context of COVID-19, consumer advocacy groups such as Public Citizen have been quick to endorse this proposal. ICER’s second proposed approach, a value-based pricing model, reflects the more common approach to pricing pharmaceuticals. This involves setting a price that considers the perceived value of the product, customers’ willingness to pay and affordability. Here they conducted a cost-effectiveness analysis to calculate the quality-adjusted life years (QALYs) saved by using the treatment, and used a cost per QALY willingness-to-pay threshold of $50,000. With this approach (assuming the survival benefit can be further substantiated), a course of treatment would cost $4,460. While such a price would result in a huge (and in many countries simply unmanageable) budget impact for payers given the expected burden of COVID-19 disease, the $50,000 cost per QALY threshold used to calculate this price actually represents a lower valuation than ICER’s typical willingness-to-pay threshold of $150,000 per QALY. The QALY calculation also excludes any broader societal benefits, which are usually factored in to ICER’s calculations – and are particularly far reaching in this case given the widespread effects of lockdown on the economy. The cost-effectiveness analysis will certainly evolve further; on 1 June, Gilead announced results from a phase 3 trial involving patients with moderate pneumonia resulting from COVID-19. While overall favourable for remdesivir, Gilead’s share prices dropped as investors were underwhelmed by the lack of significant improvement. digital-vaccine-microscope For the Gilead executives in the unenviable position of being tasked to set a price, there’s no easy win – keeping investors happy while avoiding widespread consumer backlash is a delicate balance. Gilead has been in this situation before, when it came under fire for setting the price for its hepatitis C treatment Sovaldi at $84,000 per patient back in 2013. As we are finding with remdesivir today, for a drug with such high demand, cost-effectiveness analysis broke down in the real world: Sovaldi was highly cost effective at this price – but unfortunately not affordable for most payers given the high budget impact. Despite a recent announcement that their investment in remdesivir for 2020 could be “up to $1 billion or more”, despite having pledged to donate 1.5 million doses of remdesivir globally and despite asking the FDA to rescind the orphan drug designation it granted for the drug earlier this year (which would have given it additional years of market exclusivity), Gilead remains under close public scrutiny. Feedback from experts in our study suggests a ‘hangover effect’ from their approach to pricing in HCV, particularly in the US.

“Pricing at these levels will risk the prospect of governments taking extraordinary actions. Several have already made moves to enact compulsory licenses or invoke Crown Use – generally viewed as a last resort”

Some consider it unethical for drugmakers to profit at all from this crisis given the potential for broader reputational benefits, while others suggest that relying on the altruism of private companies is not sustainable. Commentators in the latter camp argue that delivering Gilead with a return on investment for the drug is important to set a precedent that will encourage more widespread investment from manufacturers. On 3rd June, financial analyst Geoffrey Porges of SVB Leerink predicted that remdesivir would deliver revenues approaching $2 billion in 2020, rising to $7.7 billion by 2022. These figures are based on his estimation that Gilead set a tiered pricing per treatment course of $5,000 in the US, $4,000 in Europe and $2,000 elsewhere – a lower profit contribution than from the rest of its portfolio, but still very much assuming a commercial strategy that Gilead has been trying to distance itself from taking. Pricing at these levels will risk the prospect of governments taking extraordinary actions. Several countries, including France, Germany, Canada and Australia have already made moves to enact compulsory licenses or invoke Crown Use, giving them the flexibility to revoke patents should the need arise. This is generally viewed as a last resort, especially in high income countries, as it dis-incentivises investment in development. In low and middle income countries, exclusivity is even less likely. Gilead has already struck deals with five generic drugmakers in India and Pakistan, allowing them to manufacture and distribute remdesivir to 127 countries, free to set their own prices without needing to pay royalties to Gilead until the public health emergency is declared over or another drug or vaccine is approved to treat or prevent COVID-19. In May, Bangladesh drugmaker Beximco Pharmaceuticals started selling an unlicensed generic version of remdesivir under the provisions of a World Trade Organization agreement for ‘Least-Developed Countries’ for approximately $65 per vial (meaning a full course could cost around $300-$800 per patient). Under this agreement, Beximco is allowed to export its generic to other Least-Developed Countries, but other countries, including those in Europe, have reportedly contacted the company to explore potential to import the drug. To satisfy global demand and ensure widespread access, perhaps an entirely new model will be needed during this time of pandemic, involving ‘lump sum’ advance purchase commitment payments from governments, patent buyouts or other innovative contracting approaches.

“‘In-pandemic’ pricing will likely look very different to ‘out-of-pandemic’ pricing… this reinforces the element of risk the manufacturers are taking on in pursuing development”

Vaccine pricing specificities As we wait to see what compromise will be found for a price for remdesivir, let’s turn our attention to the specific issues that vaccine manufacturers will have to consider as they start thinking about setting a price for SARS-CoV-2 vaccines. As vaccines are usually procured through tenders on a much broader scale, pricing strategies already tend to take into account the total budget rather than cost-effectiveness analysis or value-based pricing approaches taken for drugs. Experts in our study assumed the standard payment models would hold true for vaccines that are developed against SARS-CoV-2, with limited enthusiasm for innovative contracting approaches – at least at this early stage. However the question of how payers would value different potential candidates remains a pertinent one. A key consideration is of course the quality of the evidence: a consistent finding that emerged from our study was experts’ strong desire for human disease prevention efficacy data over immunogenicity alone. A vaccine demonstrating the former would command a higher price, although the final price would also depend on so many other factors:
  • What other clinical endpoints have been investigated? (the more the better, especially if they can demonstrate reduction in severe cases, hospitalisations and healthcare resource utilisation)
  • Will the manufacturer be able to supply all needed doses within a rapid timeframe? (Security of supply – and proven demonstration of supply capabilities via other vaccines – has the potential to increase willingness to pay, given this is a key concern)
  • What alternatives are there and over what timescale will these become available? (The fewer the alternative options, the further away they are, the higher the willingness to pay for the first available option, and the greater the willingness to enter into an exclusive contract with the manufacturer in order to secure supply)
  • Are effective treatments already available at this point? (If so, this could potentially reduce willingness to pay)
  • Will the vaccine offer cross-protection against any other respiratory viruses? (Again, this would increase willingness to pay)
Potentially, given the vast, global scale of demand, payers will need to draw up contracts with multiple manufacturers to cover the entirety of their eligible population. With current resources and capacity constraints, implementation of an immunisation programme covering the whole population is not considered to be feasible, meaning a staggered approach in which the most exposed and/or vulnerable population groups are prioritised is expected to be necessary. All of this of course assumes the perceived need remains high at the time of launch, as ‘in-pandemic’ pricing will likely look very different to ‘out-of-pandemic’ pricing. This is an issue manufacturers have faced for vaccines developed for previous pandemics such as H1N1, where infection rates plummeted to negligible levels prior to launch. The potential for something similar to happen again here reinforces the element of risk the manufacturers are taking on in pursuing development, a risk that arguably deserves rewarding with the potential to make profit. There are also nuances around duration of protection and number of doses required – both aspects that would impact not only the logistics of implementation of a vaccination programme but also the price of the vaccine. vaccine In our study, we saw that experts thought a vaccine given as a one-off could potentially command a price multiple times higher than one that needed to be given every season. Duration of trial data comes into play when setting an initial price in this situation. Given the eagerness to get a vaccine, experts expect data from a single season will be sufficient, but this means uncertainty regarding duration of protection over the long term. Vaccine technology and approach is yet another consideration, with experts recognising that live-attenuated vaccines take longer to develop and are more expensive to produce compared to other approaches; efficacy will also vary from one approach to another. However these kinds of technical considerations could potentially be dwarfed by the major national and political interests at play. Our study shows that payers in some countries will more readily engage in discussions with a local manufacturer, or at least one that includes trial data from their local population. Then there is the matter of government funding and global equity of access. French drugmaker Sanofi faced controversy in May with a (quickly back-pedalled) suggestion from its CEO that the US would be the first country to benefit from access to its vaccine, once available, given that it had financially supported its research. BARDA, the Biomedical Advanced Research and Development Authority, a department of the US Health and Human Services office, has channelled funding into a number of vaccine candidates, as have other national governments. The level of upfront public investment has been higher than for any other vaccine. How this investment will be recognised in pricing discussions and country dose allocations will surely be the source of much discussion as these vaccines move closer to launch. Especially when considered alongside the work of other non-profit organisations and public health actors such as CEPI (the Coalition for Epidemic Preparedness Innovation), and Gavi, the Vaccine Alliance, which focuses on increasing access to immunisation in the world’s poorest countries. On 9 June, Gavi launched a $2 billion financing initiative to help secure access to SARS-CoV-2 vaccines for these countries, while Médecins Sans Frontières (MSF) has already released a statement urging world leaders to demand pharmaceutical companies to make the vaccines available at cost, and China’s President Xi Jinping has vowed to make vaccines developed in China available as a ‘global public good’. Given the multiple variables above, establishing a price corridor for SARS-CoV-2 vaccines seems challenging at this point. Experts participating in our study suggested they would look to a number of potential analogues, from seasonal influenza to shingles, when trying to conceptualise how they would start to rationalise the pricing. Each has pros and cons but no benchmark from history is perfectly suited to the extraordinary situation we find ourselves in today. We could draw some parallels with antibiotics, another area in which there is a widespread global public health need, in this case to combat antimicrobial resistance. As with COVID-19, governments and non-profits have channelled large amounts of funding into R&D to counteract limited investment by the private sector due to low potential returns relative to other areas. Targeted economic incentives such as ‘market entry rewards’ for bringing a novel antibiotic to market have been called for to offset the low potential selling price of these drugs. Perhaps similar policy levers could be considered here. Despite experts’ limited enthusiasm for new payment models in our study, in the unlikely event that SARS-CoV-2 vaccines are to be sold at or close to cost price, creative solutions that go beyond a simple price per dose and are designed to mitigate against failure or evaporating demand, may be essential to ensure the market is sustainable. These could include spreading risk between all parties involved (including governments / commercial payers, suppliers and distributors, as well as manufacturers), or recognising manufacturers’ investment in this area by committing to support pipeline candidates from their broader vaccine portfolios in areas that are likely to have more predictable markets and thus offer potential for them to realise profits in the future. Conclusion While our study showed lots of factors will be taken into account for the pricing of future SARS-CoV-2 vaccines, with variable impact depending on timing, the evolution of the virus itself and other external factors, and varying weight by country, the one thing that is certain is that manufacturers will need to keep up to date as the situation develops. As we have seen in the remdesivir pricing debate, and our understanding of COVID-19 more generally, pricing expectations will continue to evolve rapidly. For the manufacturers, setting the wrong price will have potentially ruinous reputational ramifications. Public relations always need to be considered when pricing any new biopharmaceutical asset, but now more than ever, with the glare of the world watching, it will be ever so important to be conscious of setting a price that minimises consumer criticism and maintains public relations. Especially since early indications suggest biopharma’s rapid response to the COVID-19 crisis has helped the industry to start rebuilding its reputation among payers and the public. Click here to find out more about the first wave of our syndicated report, which is available now and includes detailed information on a range of topics, including national immunisation groups’ and payers’ price estimates by country. Click here for more information on our pricing research capabilities.
About the authors Rachel Howard – director, market access at Research Partnership Brett Gardiner – director, market access at Research Partnership Suzan Serip – consultant, market access at Research Partnership About Research Partnership Research Partnership Research Partnership is the largest independent healthcare market research and consulting agency in the world. We collaborate with clients from the global pharmaceutical, medtech and biotech industries, providing research intelligence and strategic recommendations that elevate healthcare brands and power their success. Our specialist market access service supports the world’s leading manufacturers in market access, pricing, and reimbursement.
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Diamond Prices Are Crashing, Forcing Russian Mining Giant To Halt Sales

Diamond Prices Are Crashing, Forcing Russian Mining Giant To Halt Sales

A surge in lab-grown diamonds flooding the market, coupled with a…



Diamond Prices Are Crashing, Forcing Russian Mining Giant To Halt Sales

A surge in lab-grown diamonds flooding the market, coupled with a decline in luxury spending, has forced Russian mining giant Alrosa PJSC to temporarily suspend rough diamond sales to prevent prices from crashing further. 

Bloomberg obtained a memo from Alrosa addressed to its customers, explaining rough diamond sales for September and October have been suspended as the company "strives to reverse the existing trend of diminishing demand." 

Diamonds, watches, and other jewelry soared during the pandemic and peaked in the first half of 2022. We have covered the Rolex boom and bust extensively and have turned our attention to crashing diamond prices in 2023:

Besides the luxury spending slowdown due to tapped-out consumers, man-made diamonds have been all the rage because these gems are only a fraction of the cost. The big fear of the natural diamond industry is starting to be realized as consumers accept lab-grown diamonds in rings. 

Edahn Golan, an independent diamond industry analyst, told CNN Business consumers are flocking to man-made diamonds because the most popular one-carat round man-made diamond for an engagement ring in March was $2,318. He said that's 73% cheaper than a natural diamond of the same size, cut, and clarity. 

The latest data from the Diamond Index via the International Diamond Exchange shows prices have crashed well below pre-Covid levels. 

Alrosa competes with De Beers, the biggest producer of diamonds, both of which have been rocked by a rough diamond sales slowdown this year after a massive boom during the pandemic. 

Last week, Reuters reported the Group of Seven (G7) nations might be preparing to reshape the global diamond supply chain by placing restrictions on Alrosa. 







Tyler Durden Fri, 09/22/2023 - 05:45

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Mark Velleca takes over at Black Diamond; Verve Therapeutics separates CMO, CSO posts

Mark Velleca
→ David M. Epstein is out as CEO of cancer player Black Diamond Therapeutics, which is putting chairman Mark Velleca in charge. This is…



Mark Velleca

David M. Epstein is out as CEO of cancer player Black Diamond Therapeutics, which is putting chairman Mark Velleca in charge. This is Velleca’s third CEO post in less than a decade after running G1 Therapeutics (2014-20) and StrideBio (2021-23). Epstein will still be on the board at Black Diamond, a company that hit the scene in 2018 with $20 million from Versant and quickly followed that up with an $85 million Series B in January 2019. Co-founded by Epstein (not to be confused with Seagen’s David R. Epstein) and Elizabeth Buck, Black Diamond made an impressive Nasdaq debut with an IPO that exceeded $200 million in 2020, but layoffs affected 30% of the staff two years later.

Andrew Bellinger

Verve Therapeutics has made an adjustment to the team as Andrew Bellinger concentrates on his CSO duties and Fred Fiedorek steps in as CMO. “Now is the right time to split the CMO and CSO roles with two, complementary industry leaders,” Verve CEO Sek Kathiresan said in a statement. “Verve’s tremendous progress over the last five years has been made possible by Andrew’s significant contributions in his joint role.”

Fiedorek held a series of executive positions in a 13-year span at Bristol Myers Squibb, culminating in his promotion to SVP and head of cardiovascular and metabolic development. He has previous CMO credits at Intarcia — where he also led global regulatory affairs — and Rhythm Pharmaceuticals. While Verve’s base editor VERVE-101 for heterozygous familial hypercholesterolemia is stuck in neutral with a clinical hold in the US, Kathiresan’s crew inked a gene editing deal with Eli Lilly in June. Bellinger had been effectively juggling the CSO and CMO roles since “they started planning their Phase I studies,” a spokesperson tells Peer Review.

Nadir Mahmood

Rezo Therapeutics, a UCSF spinout chaired by ex-Biogen and Vir Biotechnology CEO George Scangos, has tapped Nadir Mahmood as CEO. Interim chief and co-founder Nevan Krogan, the director of UCSF’s Quantitative Biosciences Institute, will shift to the role of president. Mahmood became SVP, corporate development at Nkarta in 2018 and would later be promoted to chief financial and business officer for Paul Hastings’ crew before his first CEO job at Rezo, which made its debut in November 2022. SR One, a16z Bio + Health and Norwest Venture Partners helped lead the $78 million Series A, and Rezo’s co-founders also include Kronos Bio chief Norbert Bischofberger and UCSF’s Kevan Shokat.

Johanna Friedl-Naderer

→ Vir Biotechnology COO Johanna Friedl-Naderer is stepping down on Sept. 29, and an SEC filing says that Vir won’t be looking for a replacement. Friedl-Naderer is a 21-year Biogen veteran who started out as Vir’s CBO, global in March 2022.

→ Shares of Bausch Health $BHC dropped by as much as 9.5% after the announcement that CFO Tom Vadaketh will resign on Oct. 13. In the event that Bausch Health comes up empty in its CFO search, controller and chief accounting officer John Barresi will take over as finance chief.

Lauren White

Elahere maker ImmunoGen has recruited Lauren White as CFO. Peer Review regulars will know that White recently left C4 Therapeutics and Kendra Adams took over as finance chief on Sept. 18. Before she took the C4 job, White had a 10-year career with Novartis and was VP & global head of financial planning and analysis with the Novartis Institutes for BioMedical Research from 2017-21. ImmunoGen is hoping its Phase III data for Elahere in the MIRASOL trial will be enough to cross the finish line in the European market.

Minnie Kuo

BeiGene isn’t the only one that’s reclaimed the rights to a drug involved in a partnership with Novartis. Pliant Therapeutics and the Swiss pharma giant had teamed up on the NASH asset PLN-1474, but Novartis signaled that it was moving away from the indication before it officially pulled the plug on the alliance in February. As Pliant moves forward with its lead program bexotegrast in idiopathic pulmonary fibrosis and primary sclerosing cholangitis, Minnie Kuo has joined the team as chief development officer. Kuo is a Nektar and Gilead clinical operations vet who spent the last six years at Vir; she was promoted to SVP of translational and clinical development operations in 2021.

Eric Schneider

Pablo Legorreta’s Royalty Pharma has tapped Eric Schneider as chief technology officer. The Moody’s and Barclays alum held several leadership positions in his 11 years at Verisk, where he was recently chief data officer and chief technology officer. Royalty took a dip in the gene therapy pool when it forked over $300 million upfront for a 5.1% royalty on net sales of Ferring’s bladder cancer med Adstiladrin. “We’ve always got questions of: ‘When are you going to ever make a gene therapy investment?’” Royalty CFO Terrance Coyne said at the Morgan Stanley Global Healthcare Conference. “And what we said is: We’re going to be patient there. There’s a lot that we still need to understand. But this opportunity came along. The data is really remarkable.”

Lolita Petit

→ Paris-based gene therapy developer Coave Therapeutics has named J&J’s Lolita Petit as CSO. Petit just finished a two-year stint as director of gene therapy and delivery at Janssen and led the ocular platform team while she was with Spark from 2018-21. Coave is testing an AAV-based gene therapy for eye diseases like retinitis pigmentosa with PDE6b mutations. Spark’s Luxturna, on the other hand, was approved for a rare retinal disease that goes after mutations in the RPE65 gene.

→ Sticking with the theme of gene therapies for eye diseases, Nanoscope Therapeutics has introduced Samuel Barone as CMO. Barone had the same gig at Gemini Therapeutics before it merged with Disc Medicine last summer, and he’s the ex-SVP, clinical development for Adverum Biotechnologies. In March, Nanoscope unveiled Phase II data for its retinitis pigmentosa gene therapy MCO-010 that didn’t reach statistical significance.

Pierre-Alain Ruffieux

→ In a double whammy, Lonza lost two execs this week. Amid a drop in sales growth, CEO Pierre-Alain Ruffieux said Monday that he is waving goodbye to the CDMO at the end of this month. Chairman Albert Baehny is taking over for Ruffieux in the interim. Ruffieux spent nearly three years with the company, having jumped aboard in November 2020 from Roche. Meanwhile, Catalent also swooped in and nabbed David McErlane as its new biologics lead. McErlane had served as Lonza’s SVP and business unit head for the company’s bioscience business.

Deborah Moorad

→ Little-known in vivo gene editing biotech CorriXR Therapeutics has appointed Deborah Moorad as CEO. The Dentsply Sirona alum has been a chief executive at Lincoln, NE-based Nature Technology Corp, which was purchased by Aldevron, which was then acquired by Danaher. Moorad’s predecessor, co-founder Eric Kmiec, slides into the role of CSO at the ChristianaCare spinout.

John Orwin

Atreca president and CEO John Orwin is replacing Frazier managing partner Jamie Topper as chairman of the board at San Diego-based AnaptysBio. Orwin, the new chairman of CARGO Therapeutics, will also be principal financial officer for Atreca after CFO Herb Cross headed for the exit. Topper is giving up his seat on the board after nearly 16 years, eight of those as chairman, and he’ll be an advisor until the first quarter of 2024.

Birge Berns

Marie-Louise Fjällskog is leaving her role as CMO of Faron Pharmaceuticals, but she will stay with the company as a board member. Longtime J&J vet Birge Berns is succeeding Fjällskog as interim medical chief and will work out of the UK for the Finnish cancer biotech. Fjällskog came to Faron from her CMO post at Sensei Biotherapeutics in January 2022.

Steven Mennen

Ipsen’s acute myeloid leukemia partner Accent Therapeutics is putting an emphasis on three new execs this week: Jason Sager (CMO) is the ex-medical chief at Ikena Oncology — back when it was known as Kyn Therapeutics — and has also worked for Genentech, Novartis and Sanofi; Steven Mennen (VP of preclinical development) is a 10-year Amgen vet who left Fulcrum Therapeutics in April after four years as head of CMC; and Bayer alum Stuart Ince (VP of program leadership) has served as VP of program management with Tango Therapeutics.

→ Chaired by Gossamer Bio CEO Faheem Hasnain, Ann Arbor, MI-based thyroid eye disease biotech Sling Therapeutics has selected Raymond Douglas as CSO. Douglas is familiar with the area from his eight years at the University of Michigan as an ophthalmology professor and director of the school’s thyroid eye center. He’s an oculoplastic surgeon who has a private practice in Beverly Hills and was in charge of the orbital and thyroid eye disease programs at Cedars-Sinai.

Gerhard Hagn

→ While we’re thinking of thyroid eye disease, Tourmaline Bio is testing its lead candidate TOUR006 in the same indication and has welcomed Gerhard Hagn as SVP, head of commercial and business development. Hagn had a scrollable list of positions in a 20-year period at Pfizer before he moved to Gilead in 2019 as VP, head of inflammation, global commercial strategy. Starting in 2021, he expanded his role by leading Gilead’s liver franchise as well.

Sam Whiting

Tempest Therapeutics CMO Sam Whiting has taken on the additional role of R&D chief. Peer Review informed you about Whiting’s original appointment back in the fall of 2020, when he succeeded Tom Dubensky as Tempest’s medical leader. The California biotech touted Phase Ib/II data in April that showed seven of 40 patients had a confirmed response to its liver cancer treatment TPST-1120 in a combo with Tecentriq and Avastin, while only three of 29 patients had a confirmed response to Tecentriq and Avastin alone.

Daybue maker Acadia Pharmaceuticals has picked up Albert Kildani as SVP, investor relations and corporate communications. At Halozyme, another San Diego biotech, Kildani was the investor relations and corporate communications leader for nearly four years. Daybue made history in March by becoming the first-ever drug to receive an FDA approval for Rett syndrome.

John Yee

John Yee has been named SVP, medical affairs at Apnimed, the sleep apnea biotech that rang in 2023 with a $79.7 million raise that was stapled on to the original $62.5 million Series C in May 2022. The AstraZeneca and Vertex medical affairs vet is coming off a six-month sabbatical after three years as CMO of Sobi North America.

Gwyn Bebb

→ The CRO Parexel has rolled out the welcome mat for Gwyn Bebb as SVP and global therapeutic area head, oncology. Bebb joins the Durham, NC-based team from Amgen, where he was clinical research medical director in early- and late-stage oncology drug development. Bebb’s résumé also sports a stint as a professor at the department of medicine at the University of Calgary.

Constanze Guenther

ImmunOs Therapeutics, an immuno-oncology player that bagged a $74 million Series B in June 2022, has enlisted Constanze Guenther as SVP, CMC and technical development. Guenther ends her 13-year run at Novartis, where she was global portfolio head, cell therapy and also oversaw the manufacturing of Kymriah in Europe.

→ Amgen sales vet Marc-Andre Goldschmidt has landed at Amsterdam-based Avanzanite Bioscience as country manager of Germany. Goldschmidt was elevated to national sales manager of neurology during his six years at Alexion.

Ian Smith

→ After disappointing data for its Dravet syndrome drug STK-001 caused its shares $STOK to sink in July, Stoke Therapeutics has added former Vertex CFO and COO Ian Smith to the board of directors. Smith chairs the board at Solid Bio and is a senior advisor for Bain Capital Life Sciences.

Daphne Karydas

Flare Therapeutics president and CFO Daphne Karydas has picked up a pair of board appointments at Mineralys Therapeutics and Compass Pathways. Glenn Sblendorio, the former CEO of Astellas sub Iveric Bio, will join Karydas on the board of directors at Mineralys, the hypertension biotech that made a February debut on the Nasdaq in a once-barren IPO environment. New listings are popping up as market conditions gradually improve, like the ones we’ve seen with Neumora, RayzeBio and others.

→ Ex-Kymab CEO Simon Sturge has clinched a spot on the board of directors at Galapagos that was vacated by Mary Kerr. Sturge chairs the board at MoonLake Immunotherapeutics, the maker of an IL-17 inhibitor for hidradenitis suppurativa that has shown some promise in Phase II.

→ J&J’s bispecific partner Xencor has elected Barbara Klencke to the board of directors. Klencke was the CMO and chief development officer for Sierra Oncology until it was purchased by GSK for $1.9 billion, a deal that’s bearing fruit with the approval of JAK inhibitor Ojjaara, formerly known as momelotinib.

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Spread & Containment

“That 70s Show”

The hit TV series "That 70s Show" aired from 1998 to 2006 and focused on six teenage friends living in Wisconsin in the late 70s. The irony was that the…



The hit TV series “That 70s Show” aired from 1998 to 2006 and focused on six teenage friends living in Wisconsin in the late 70s. The irony was that the actors playing the teenagers were not born in the late 70s and had never experienced life during that period. Many alive today cannot fathom a lifestyle devoid of the internet, cable television, mobile phones, and social media. Oh…the horrors.

Yet, today, almost 50 years later, financial commentators, many of whom were not alive at the time, suggest that inflation and yields will repeat “That 70s Show.” Understandably, the increase in inflation and interest rates from their historic lows is cause for concern. As James Bullard noted, “Inflation is a pernicious problem,” which is why the Federal Reserve lept into action.

“When the US Federal Reserve embarked on an aggressive campaign to quash inflation last year, it did so with the goal of avoiding a painful repeat of the 1970s, when inflation spun out of control and economic malaise set in.” – CNN

That concern of “spiraling inflation” remains the key concern of the Federal Reserve in its current monetary policy decisions. It has also pushed many economists to point back at history, using “That 70s Show” period as the yardstick for justifying their concerns about a resurgence of inflation.

“The chair of the Federal Reserve at the time, Arthur Burns, hiked interest rates dramatically between 1972 and 1974. Then, as the economy contracted, he changed course and started cutting rates.

Inflation later roared back, forcing the hand of Paul Volcker, who took over at the Fed in 1979, Richardson said. Volcker brought double-digit inflation to heel — but only by raising borrowing costs high enough to trigger back-to-back recessions in the early 1980s that at one point pushed unemployment above 10%.

‘If they don’t stop inflation now, the historical analogy [indicates] it’s not going to stop, and it’s going to get worse,’ said Richardson, an economics professor at the University of California, Irvine.”

However, such may be an oversimplification to suggest Burns was wrong and Volker was right. The reason is the economy today is vastly different than during “That 70s Show.”

Today Is Very Different Than The 1970s

During the 70s, the Federal Reserve was entrenched in an inflation fight. The end of the Bretton Woods and the failure of wage/price controls combined with an oil embargo sent inflation surging. That surge sent markets crumbling under the weight of rising interest rates. Ongoing oil price shocks, spiking food costs, wages, and budgetary pressures led to stagflation through the end of that decade.

What was most notable was the Fed’s inflation fight. Like today, the Fed is hiking rates to quell inflationary pressures from exogenous factors. In the late 70s, the oil crisis led to inflationary pressures as oil prices fed through a manufacturing-intensive economy. Today, inflation resulted from monetary interventions that created demand against a supply-constrained economy.

Such is a critical point. During “That 70s Show,” the economy was primarily manufacturing-based, providing a high multiplier effect on economic growth. Today, the mix has reversed, with services making up the bulk of economic activity. While services are essential, they have a very low multiplier effect on economic activity.

One of the primary reasons is that services require lower wage growth than manufacturing.

Wages vs Inflation

While wages did rise sharply over the last couple of years, such was a function of the economic shutdown, which created a supply/demand gap in the employment matrix. As shown, full-time employment as a percentage of the population fell sharply during the pandemic lockdown. However, with full employment back to pre-pandemic levels, wage growth declines as employers regain control over the labor balance.

Full Time Employees To Population

Furthermore, the economic composite of wages, interest rates, and economic growth remain highly correlated between “That 70s Show” and today. Such suggests that while inflation rose with the supply/demand imbalance created by the shutdown, the return to normalcy will lower inflation as economic activity slows.

Economic composite index vs Inflation

With a correlation of 85%, the inflationary decline will be coincident with economic growth, interest rates, and wages.

Economic composite correlation to inflation

Unlike “That 70s Show,” where economic growth and wages were rising steadily, which allowed for higher levels of interest rates and inflation, There is a singular reason why a repeat of that period is quite impossible.

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The Debt Burden And Economic Weakness

What is notable about “That 70s Show” is that it was the culmination of events following World War II.

Following World War II, America became the “last man standing.” France, England, Russia, Germany, Poland, Japan, and others were devastated, with little ability to produce for themselves. America found its most substantial economic growth as the “boys of war” returned home to start rebuilding a war-ravaged globe.

But that was just the start of it.

In the late ’50s, America stepped into the abyss as humankind took its first steps into space. The space race, which lasted nearly two decades, led to leaps in innovation and technology that paved the wave for the future of America.

These advances, combined with the industrial and manufacturing backdrop, fostered high levels of economic growth, increased savings rates, and capital investment, which supported higher interest rates.

Furthermore, the Government ran no deficit, and household debt to net worth was about 60%. So, while inflation increased and interest rates rose in tandem, the average household could sustain its living standard. The chart shows the difference between household debt versus incomes in the pre- and post-financialization eras.

income vs debt ratios

With the Government running a deep deficit with debt exceeding $32 trillion, consumer debt at record levels, and economic growth rates fragile, consumers’ ability to withstand higher inflation and interest rates is limited. As noted previously, the “gap” between income and savings to sustain the standard of living is at record levels. The chart shows the gap between the inflation-adjusted cost of living and the spread between incomes and savings. It currently requires more than $6500 of debt annually to fill the “gap.

Consumer Spending Gap

It Is Not The Same

While the Fed is currently engaged “in the fight of its life,” trying to quell inflation, The economic differences are vastly different today. Due to the heavy debt burden, the economy requires lower interest rates to sustain even meager economic growth rates of 2%. Such levels were historically seen as “pre-recessionary,” but today, they are something economists hope to maintain.

Graph showing Economic growth by cycle with data from 1790 to 2020.

This is one of the primary reasons why economic growth will continue to run at lower levels. Such suggests we will witness an economy:

  • Subject to more frequent recessionary spats,
  • Lower equity market returns, and
  • A stagflationary environment as wage growth remains suppressed while the cost of living rises.

Changes in structural employment, demographics, and deflationary pressures derived from changes in productivity will magnify these problems.

While many want to suggest that the Federal Reserve is worried about “That 70s Show,” we would be lucky to have the economic strength to support such a concern.

The Fed’s bigger worry should be when the impact of higher rates causes a financial break in a debt-dependent financial system.

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