Each week we highlight five things affecting the life sciences industry. Here’s the latest.
Positive outlook for CDMOs heading into 2025
- Despite challenges in the biopharma contracting sector following the COVID-19 boom, 49% of contract development and manufacturing organizations remain optimistic about growth in the next 18 months, though early-stage projects face funding deficits, according to Fierce Pharma.
- Many in the industry have expressed concerns with the BIOSECURE Act which would limit biotech’s use of Chinese third-party vendors. A survey of CDMOs indicated that 19% see China-based CDMOs as a threat, while 38% believe the issue as politically driven, and 43% stress the importance of both Chinese contributions and diversifying supply chains.
New rules announced for IRA drug negotiation
- According to BioSpace, Centers for Medicare and Medicaid Services updated its guidelines for drug price negotiation, pursuant to the Inflation Reduction Act. The news rules give drugmakers more opportunities to engage before the agency makes its initial maximum fair price offers, including an additional optional meeting before companies submit counteroffers, and two other negotiation meetings afterward.
- The second round of negotiations will begin in February, targeting up to 15 drugs, with new prices effective in 2027, though some analysts question the projected savings, noting that many drugs selected in the first round were already being sold below list prices because of rebates and discounts.
How will the pharmaceutical industry’s investment in AI affect biotech companies?
- Fierce Pharma reports that the pharmaceutical industry’s heavy investment in artificial intelligence aims to accelerate drug development, but this could position independent AI-focused biotechs as potential competitors with larger firms rather than collaborators in drug development.
- AI adoption in pharma has shown potential to cut drug discovery and clinical development timelines significantly, though its long-term impact will depend on continued investment and industry adaptation.
GLP-1 focused biotech announces $400 million Series A
- Kailera Therapeutics, backed by major investors and led by the biotech veteran Ron Renaud, has launched to develop GLP-1 drugs for obesity and metabolic diseases. The company announced a $400 million Series A financing this week, according to BioPharma Dive.
- The GLP-1 drug space is competitive and currently dominated by large pharmaceutical companies. But several middle market biotech companies have recently entered this market with successful financing.
Port strike affecting pharmaceutical and medical device companies
- The International Longshoremen’s Association strike has disrupted the supply chain for critical components, including medical devices and active pharmaceutical ingredients (APIs) used in weight-loss and diabetes drugs, with companies shifting to airfreight to mitigate delays, per CNBC.
- Broader supply chain concerns for medical supplies, including APIs, IV fluids, and essential pharmaceuticals, are being monitored by the Biden administration and state governments, as the strike threatens production delays and inventory shortages across the health care sector.
For more insights in life sciences, check out RSM’s industry outlook.
