Biotech ex­ec­u­tives and share­hold­ers can breathe eas­i­er head­ing in­to the new year for the first time in near­ly half a decade.

The in­dus­try’s lead­ers will ar­rive at Jan­u­ary’s JP Mor­gan Health­care Con­fer­ence rid­ing a surge in M&A ac­tiv­i­ty and with the XBI in re­cov­ery from a years-long slide. While that ex­change-trad­ed fund re­mains be­low its pan­dem­ic-fu­eled peak in 2021, it’s above $120 and is up more than 80% from April.

That warm glow had been miss­ing since the pan­dem­ic sug­ar high fad­ed and set off a rough patch for the in­dus­try. Drug de­vel­op­ment suf­fered set­backs. In­ter­est rates climbed. Neg­a­tive en­ter­prise val­ues took hold. Em­ploy­ees were laid off. Ini­tial pub­lic of­fer­ings went bel­ly-up, and even SPACs died out. Plat­form biotechs lost lus­ter, and once-easy pri­vate fundrais­ing be­gan to suck the life and en­er­gy out of ex­ec­u­tives.

The rare bone dis­ease drug be­ing de­vel­oped by Ul­tragenyx and Mereo Bio­Phar­ma has cat­e­gor­i­cal­ly failed in its late-stage pro­gram, the part­ners re­vealed Mon­day.

Mereo’s stock MREO fell 90% when the Nas­daq opened on Mon­day morn­ing. Ul­tragenyx’s shares RARE slid 40% in ear­ly trade, wip­ing more than $1 bil­lion off its mar­ket cap.

The Phase 2/3 Or­bit and Phase 3 Cos­mic stud­ies were test­ing setrusum­ab in a con­di­tion called os­teo­ge­n­e­sis im­per­fec­ta, in which pa­tients’ bones are weak and can break eas­i­ly. Setrusum­ab in­hibits a pro­tein called scle­rostin, which af­fects bone for­ma­tion. Block­ing scle­rostin should the­o­ret­i­cal­ly boost bone for­ma­tion, den­si­ty and strength.

But nei­ther tri­al was able to show a ben­e­fit for the an­ti­body on the an­nu­al­ized rate of frac­tures, their pri­ma­ry end­points. Or­bit used place­bo as con­trol, and Cos­mic, a pe­di­atric tri­al, com­pared setrusum­ab with bis­pho­s­pho­nates — drugs used to strength­en bones, for in­stance in pa­tients with os­teo­poro­sis.

Plus, news about In­flaRx, ASK Pharm, Uni­cy­cive, Har­bour Bio­Med, Omeros, Gilead, Re­pare Ther­a­peu­tics, Vac­cinex and Fore­see Phar­ma­ceu­ti­cals.

👁️ FDA re­jects Out­look Ther­a­peu­tic­s' ver­sion of Avastin for third time: The agency said it "can­not ap­prove the ap­pli­ca­tion in its present form" for Out­look's ver­sion of be­va­cizum­ab in wet age-re­lat­ed mac­u­lar de­gen­er­a­tion, and again asked for more ev­i­dence of ef­fi­ca­cy. Out­look's shares OTLK fell 60% in pre-mar­ket trad­ing on Fri­day morn­ing.

The FDA pre­vi­ous­ly re­ject­ed Out­look's ap­pli­ca­tion in 2023 and again this past Au­gust. A Phase 3 tri­al in 2024 failed to show Out­look's drug was as ef­fec­tive as Lu­cen­tis, which, like Avastin, is a VEGF in­hibitor mar­ket­ed by Roche. But un­like Lu­cen­tis, Avastin is not ap­proved for wet AMD, though it has been used to treat the dis­ease be­cause it is far less ex­pen­sive. In Eu­rope, Out­look re­ceived ap­proval of its drug un­der the brand name Lyte­na­va, and it is com­mer­cial­ly avail­able in Ger­many and the UK. — Lei Lei Wu

In­sil­i­co Med­i­cine, one of the orig­i­nal AI-dri­ven drug dis­cov­ery com­pa­nies, has stuck the land­ing af­ter four years of try­ing to go pub­lic.

The 11-year-old drug de­vel­op­er on Tues­day raised gross pro­ceeds of ap­prox­i­mate­ly $293 mil­lion via its list­ing on the Hong Kong Stock Ex­change. In­sil­i­co's share price es­ca­lat­ed 24% in its first trad­ing ses­sion, end­ing the de­but day with a mar­ket cap­i­tal­iza­tion of about $2.15 bil­lion (16.71 bil­lion Hong Kong dol­lars).

The biotech's float was one of the largest Hong Kong biotech IPOs of the year. Hen­grui Phar­ma got about $1.2 bil­lion from its HKEX of­fer­ing, but the 55-year-old drug­mak­er was al­ready list­ed on the Shang­hai stock mar­ket.

In­sil­i­co sold shares to Eli Lil­ly, RTW, Temasek and oth­er in­vestors.