When Eli Lilly snapped up Scorpion Therapeutics' PI3Kα program earlier this year, the deal allowed Scorpion to spin out a new entity that would house its preclinical pipeline.
That company, now called Antares Therapeutics, unveiled last week, armed with $177 million in series A funds. Antares may be forging ahead with the same leadership team, but the company is adopting a different approach designed to account for the drastic transformation in both the biotech and macroeconomic environments.
Antares CEO Adam Friedman, M.D., Ph.D., said he’s had to shift his strategy leading a biotech amid high costs, regulatory uncertainty and the rise of competition from China.
“There are some changes in how we think about what targets we will be pursuing because the environment has changed,” Friedman told Fierce Biotech at the Scorpion-turned-Antares office, located less than a mile away from the bustling Boston convention center where this year’s BIO conference is being held.
One of the most significant changes since Scorpion was set up five years ago is the cost of capital, according to the CEO.
“Scorpion was founded in a[n] environment where there were many, many companies being started,” said Friedman, citing the incredible financing influx tied to the start of the COVID-19 pandemic. That cash has dried up substantially over the last few years in a correction period that favors biotechs with later-stage, de-risked drugs.
This financial pullback has changed how biotechs are able to conduct R&D. A few years ago, companies could pursue multiple projects in parallel, an approach most startups can’t implement now given the capital environment, Friedman said.
Instead, biotechs have to be more cautious about which targets they’re going after, and programs worth pursuing must return the maximum benefit for patients and shareholders, Friedman said.
More broadly, after decades of global investment, worldwide competition is increasing.
“Competition in general is good for patients, but it also means U.S.-based biotech companies have to adapt,” Friedman said. “In particular, companies in China can move much more quickly. They have a lower cost of capital. There's much more efficient discovery and development apparatus.”
The ability to rapidly launch clinical trials is one of the key factors driving China’s biotech boom. The country’s share in the new clinical trials sponsored by the biopharma industry has jumped from 8% of all trials in 2013 to 29% in 2023, according to a recent IQVIA report.
Just this week, China proposed reducing the clinical trial review waiting period for novel medicines from 60 working days to 30 days. If implemented, the new timeline would match the FDA’s 30-day period.
For Antares—which is advancing a pipeline of preclinical precision medicines for cancer and other diseases with unmet need—the new ecosystem means leaning into true innovation.
“We are focusing on first-in-class programs, where we are really the first with small molecules against certain pockets on well-validated targets, or the first ones to ever drug ‘undruggable targets’ like transcription factors and other very challenging targets,” Friedman said.
The strategy is an “important adaptation to the broader market,” the CEO explained.
“Five years ago, a U.S. biotech could be a fast follower, could optimize certain properties and create a best-in-class [drug] very quickly. But now as the global ecosystem has expanded, there are other companies, other ecosystems, that can do that as well as U.S. biotech,” he said.
While other countries are speeding up, inefficiencies in the U.S. framework have been slowing drug discovery for years, according to Friedman, who claimed wait times for activating clinical sites and engaging in FDA discussions have grown longer over the last 10 years.
The recent changes under the Trump administration, including staffing cuts at the FDA, add more uncertainty to the equation.
While Friedman is “cautiously optimistic” about the agency changes and noted that “some of the language appears quite innovation-focused,” he said the volatility has prompted many biotechs—including Antares—to look for more diversified clinical operations globally.
“The U.S. will always be an incredibly important part of our clinical operations and how we approach the market, but it's also important for companies like Antares and others to be looking globally to be able to move faster to access different patient populations,” he explained.
Scorpion included ex-U.S. sites in clinical development, but, now, those efforts to pursue international locations will ramp up, he explained.
“There needs to be a hard look at the regulatory landscape and the clinical development landscape here in the U.S. to lower burdens [and] increase the speed with which new programs safely can get to patients,” Friedman said.
The high cost of capital also underscores the importance of industry events like BIO, where biotechs can put themselves on the map for Big Pharmas scouting assets.
“Optionality is a fiduciary responsibility right now for the industry, because the cost of capital is so high,” the CEO said. “If you're a biotech and you're not talking to a company, you're probably not doing your job right now.”