News Updates
Incubate’s Investment Tracker measures the impacts of the Inflation Reduction Act’s healthcare provisions on the life sciences ecosystem, with special attention to the impacts of the small molecule penalty.
Caribou Biosciences
Layoffs
Caribou Biosciences’ latest pivot to immunology is not going to plan. The cell and gene therapy company is laying off nearly one-third of its workforce and ending work on its lupus pipeline, according to an SEC filing April 24. That leaves the Berkeley, California–based biotech with just two remaining assets, both allogeneic, or “off-the-shelf,” CAR T products for a variety of different cancers. Caribou expects the layoffs to be mostly done by the end of the second quarter. The cuts affect 47 employees, representing 32% of the company’s staff.
Spark Therapeutics
Layoffs
In a reorganization first divulged in January, Philadelphia-based Spark Therapeutics, Roche’s gene therapy subsidiary, is letting go of 298 employees in Philadelphia. The cuts will come in three waves starting May 9 and ending Dec. 31, according to a Worker Adjustment and Retraining Notification notice.
Gilead Sciences
Layoffs
Gilead is trimming its California workforce by 149, according to a WARN Notice posted last week. The layoffs will take effect on May 27 and will affect scientific and technical services at the pharma’s site in Foster City.
Metsera
Neutral Outlook
The outcome of this litigation as well as the effects of the IRA on the pharmaceutical industry cannot yet be fully determined but is likely to be significant. Additional drug pricing proposals could appear in future legislation.
Dyne Therapeutics
Negative Outlook
On August 16, 2022, the Inflation Reduction Act, or the IRA, was signed into law by President Biden. The new legislation has implications for Medicare Part D, which is a program available to individuals who are entitled to Medicare Part A or enrolled in Medicare Part B to give them the option of paying a monthly premium for outpatient prescription drug coverage. Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025). The IRA permits the Secretary of the HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Specifically, with respect to price negotiations, the U.S. Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D. CMS may negotiate prices for ten high-cost drugs paid for by Medicare Part D starting in 2026, followed by 15 Part D drugs in 2027, 15 Part B or Part D drugs in 2028, and 20 Part B or Part D drugs in 2029 and beyond. This provision applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13 years, but it did not originally apply to drugs and biologics that have been approved for a single rare disease or condition. With passage of the One Big Beautiful Bill Act, or the OBBBA, on July 3, 2025, which was signed into law on July 4, 2025, Congress extended this exemption to drugs and biologics with multiple orphan drug designations. Nonetheless, since CMS may establish a maximum price for these products in price negotiations, we would be fully at risk of government action if our products are the subject of Medicare price negotiations. Moreover, given the risk that could be the case, these provisions of the IRA may also further heighten the risk that we would not be able to achieve the expected return on our drug products or full value of our patents protecting our products if prices are set after such products have been on the market for nine years.
Tenaya Therapeutics
Layoffs
In a bid to keep itself afloat into the back half of 2026, gene therapy specialist Tenaya Therapeutics on March 27 kicked off a restructuring initiative that will involve the termination of 30% to 40% of its staff.
Y-mAbs Therapeutics Inc.
Negative Outlook
“For example, the IRA, among other things, (i) directs the U.S. Department of Health and Human Services, or HHS, to negotiate the price of certain high-expenditure, single-source biologics that have been on the market for at least 11 years and covered under Medicare, and subject manufacturers to civil monetary
penalties and a potential excise tax by offering a price that is not equal to or less than the negotiated “maximum fair price” for such biologics under the law, and (ii) imposes rebates with respect to certain products covered under Medicare Part B or Medicare Part D to penalize price increases that outpace inflation. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented, although the Medicare drug price negotiation program is currently subject to legal challenges. These provisions began to take effect progressively starting in fiscal year 2023. On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiation, which take effect in January 2026. On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. HHS will select up to fifteen additional products covered under Part D for negotiation in 2025. Each year thereafter, more Part B and Part D products will become subject to the HHS price negotiation program. On December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced. On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise marchin rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. Current government regulations and possible future legislation regarding health care may affect coverage and reimbursement for medical treatment by third-party payors, which may render DANYELZA or our other product candidates, if approved, not commercially viable or may adversely affect our anticipated future revenues and gross margins.”
Dr. Reddy's Laboratories
Neutral Outlook
“For example, in the United States, Congress passed the Inflation Reduction Act of 2022 (the “IRA”), which makes significant changes to how drugs are covered and paid for under the Medicare program, including the creation of new rebates and financial penalties for drugs (including single-source generics) whose prices rise faster than the rate of inflation, redesign of the Medicare Part D program to require manufacturers to bear more of the liability for certain drug benefits, and government price-setting for certain Medicare Part D drugs, starting in 2026, and Medicare Part B drugs starting in 2028. The long-term implications of the IRA remain uncertain and we are continuing to evaluate this law and its impact on our business.
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Replimune
Negative Outlook
We cannot be sure whether additional legislation related to the IRA will be issued or enacted, or what impact, if any, such changes will have on the profitability of any of our drug candidates, if approved for commercial use, in the future. There also may be future changes unrelated to the IRA that result in reductions in potential coverage and reimbursement levels for our product candidates, if approved and commercialized, and we cannot predict the scope of any future changes or the impact that those changes would have on our operations.
Organon
Layoffs
As part of its efforts to optimize internal operations, Organon will lay off 93 employees at its headquarters in Jersey City, New Jersey, according to a Worker Adjustment and Retraining Notification notice. The cuts will be effective starting April 30 and will wrap up May 31.
