Epoch 2: 2023 YEAR IN REVIEW

Biopharma Innovation, Market Dynamics, and the Venture Ecosystem

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Hello Avatar! Welcome back for another week of biotech analysis. This week we wanted to spend some time running through Bruce Booth’s year end summary. It is truly one of our favorites and something we look forward to wrap up each calendar year.  This year’s analysis lived up to standards and offers a number of excellent and unique takes on where the market stands and where it is headed.  We will take you through all of it along with our commentary.  It is important to pause and reflect on the current state of the industry because you truly cannot plan properly for where you are headed if you do not understand where you are coming from.

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Lots to cover this week, let's get started!

YEAR IN REVIEW 2023

Today we cover the 2023 Atlas Venture Year in Review where VC aficionado Bruce Booth takes us through the current state of  Biopharma Innovation, Market Dynamics, and the Venture Ecosystem.  For those of you looking for the full-length discussion (~45 minutes) it can be found here.  For those of you looking for the 10 minute summary, keep reading!

REDEFINING “BIG PHARMA” 

Booth opens by commenting on what we are all witnessing, the shifting of the big pharma business model.  Specifically toward large market opportunities like obesity, metabolic diseases, and Alzheimer's.  We have commented in the past on this shift, it is clearly linked to the difficulties in driving growth once the size of these organizations becomes too large.  We will have much more to say about this in an upcoming Sunday column.

Booth introduces the innovation heat map below which represents market opportunities and whether they are expected to grow or contract.

Innovation Expanding:

• Obesity

• Alzheimer’s

• I&I

• Pulmonary

• Renal

Innovation Contacting:

• COVID

• Rare Disease

• Oncology

• Gene Therapy

MARKET DYNAMICS: A TALE OF TRIUMPH AND TRIAL 

The biopharma landscape also witnessed colossal market cap gains for some companies, predominantly in obesity and neuroscience areas. Conversely, pandemic-driven windfalls have tapered off causing adverse market fluctuations with material impacts on companies like Pfizer and Moderna facing over $200B in collective losses.

NAVIGATING INNOVATION: THERAPEUTIC AREA DEEP DIVES

Bruce next drills down into a few specific therapeutic areas, starting with I&I. In 2023 Autoimmune disease research surged with a focus on exciting targets and signaling pathways. In contrast, challenges loomed large in oncology, characterized by transformative breakthrough rarity and overwhelming crowding around certain drug targets.

In the slide below Booth goes into detail on the I&I space calling out the key mechanisms to keep an eye on:

• TKY2

• FcRN

• IL17

• IL23

• TL1A

• TSLP

• IL4/13

• IRAK4

• STAT6

• STAT3

• MK2

• SIK

• IL31R / OSHR

• MRGPRX2 

Shifting to Oncology, Booth notes one of the current challenges in the space is how it has become difficult to observe significant clinical outcomes (particularly monotherapy activity) and when you do it tends to center around a specific target which leads to crowding.