Just days after announcing the FDA is fast tracking its CAP-002 gene therapy program, Capsida Biotherapeutics has cut some of its workforce, a company spokesperson confirmed to BioSpace. “Capsida Biotherapeutics is transitioning from a preclinical to a clinical-stage company and has made workforce adjustments to prioritize resources to advance its clinical and manufacturing efforts while continuing to support partnered programs,” the spokesperson said in a June 6 emailed statement. “The company recently received FDA IND clearance for CAP-002, its wholly owned, first-in-class gene therapy for STXBP1 developmental and epileptic encephalopathy, with first-in-human trials expected to start in the third quarter 2025. The company has also filed an IND for its wholly owned PD-GBA Parkinson’s program in the second quarter 2025. There are no changes to its leadership team.”
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Capsida BioTherapeutics
Layoffs
Thousand Oaks, CA
51-200 employees
Dr. Reddy's Laboratories
Neutral Outlook
Princeton, NJ
10,001-50,000 employees
“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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Pharvaris
Negative Outlook
Lexington, MA
51-200 employees
Among policy makers and payors, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, there has been heightened governmental scrutiny recently over the manner in which drug manufacturers set prices for their marketed products. For instance, recently, President Biden signed into law the Inflation Reduction Act of 2022, or IRA, which included several measures intended to lower the cost of prescription drugs and limit out-of-pocket spending, including by requiring drug manufacturers to pay rebates to Medicare if they increase prices faster than inflation for drugs used by Medicare beneficiaries. Further, in the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively, the ACA, enacted in 2010, has had a significant impact on the healthcare industry. The ACA increased federal oversight of private health insurance plans and included a number of provisions designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage. Since its enactment there have been judicial, Presidential and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA. In addition, the Trump administration took several executive actions, including the issuance of a number of executive orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities such as implementing statutes through rulemaking, issuance of guidance, and review and approval of marketing applications. An under-staffed FDA could result in delays in the FDA’s responsiveness or in its ability to review submissions or applications within the established Prescription Drug User Fee Act time frames, issue regulations or guidance, or implement or enforce regulatory requirements in a timely fashion or at all. In the coming years, legislative and regulatory changes could be made to governmental health programs that could significantly impact pharmaceutical companies and the success of our product candidates. As such, we cannot predict what effect the ACA or other healthcare reform initiatives that may be adopted in the future will have on our business.
Stealth BioTherapeutics
Layoffs
Needham, MA
51-200 employees
To help direct resources toward a potential new drug application resubmission for Barth syndrome therapy elamipretide, Stealth BioTherapeutics has laid off 30% of its workforce, the company announced May 29. The Needham, Massachusetts–based biotech did not specify how many employees it let go, but its LinkedIn People page lists 65 associated members, meaning the cuts may have affected around 28 staffers.
Y-mAbs Therapeutics Inc.
Negative Outlook
New York, NY
51-200 employees
“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.”
Roivant Sciences - NYC
Negative Outlook
New York, NY
201-500 employees
There has been increasing legislative and enforcement interest in the U.S. with respect to drug pricing practices. In August 2022, Congress enacted the Inflation Reduction Act (“IRA”), a law that included sweeping changes to the payment for drugs under the Medicare program. Among other provisions, the IRA contains (i) a drug price negotiation program for certain high-spend Medicare drugs that have been on the market for a certain length of time and lack generic or biosimilar competition, under which Medicare prices for such drugs are capped by a “maximum fair price”; (ii) new manufacturer rebate obligations on certain drugs paid under Medicare Part B or D whose prices increase faster than inflation relative to a benchmark period; and (iii) a redesign of the Part D benefit, including capping patients’ annual out-of-pocket costs on Part D drugs, lowering the beneficiary out-of-pocket threshold, streamlining the Part D benefit to eliminate the “coverage gap” phase, and replacing the manufacturer coverage gap discount program with a new manufacturer discount program – the Medicare Part D Manufacturer Discount Program – that provides discounts throughout the post-deductible benefit phases. CMS has established “maximum fair prices” for selected drugs for coverage year 2026 and select drugs for negotiation for coverage year 2027. Additionally, there are several ongoing legal challenges to the IRA’s drug price negotiation program, and we cannot predict the outcome of these cases or the impact they could have on implementation of the law. The impact of the IRA on research and development, the pharmaceutical supply chain and other aspects of our business and industry remains uncertain. Over time, provisions of the IRA could increase our government discount and rebate liabilities, reduce the revenues we may eventually be able to collect from sales of our products as well as present potential challenges for payor negotiations and formulary access.
Silexion Therapeutics Corp
Negative Outlook
Ramat Gan, Israel
1-50 employees
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products approved, and, as a result, they may not cover or provide adequate payment for our product candidates. We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes like the Inflation Reduction Act. The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.
Prothena - Bresbane
Layoffs
Bresbane, CA
51-200 employees
After its anti-amyloid antibody birtamimab missed its primary endpoint in the Phase III AFFIRM-AL trial, Prothena is evaluating business options that include an “expected substantial workforce reduction,” the company announced May 23. The biotech will provide more details regarding the strategic review in June. Prothena in May announced that it would no longer invest in the development of its anti-amyloid antibody birtamimab after it failed the Phase III AFFIRM-AL trial in patients with AL amyloidosis.
Channel Therapeutics
Negative Outlook
North Brunswick, NJ
1-50 employees
Other legislative changes have been proposed and adopted since the ACA was enacted. These changes include the American Rescue Plan Act of 2021, which eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024. In addition, the Inflation Reduction Act of 2022 (“IRA”) which among other things, extended enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminated the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. These new laws may result in additional reductions in Medicare and other healthcare funding, which could have an adverse effect on customers for ZELSUVMI and our product candidates, if approved, and, accordingly, our financial operations.
BeOne Medicines
Neutral Outlook
Cambridge, MA
10,001-50,000 employees
We are a company built to address the long-lived challenges to return on investment in the pharmaceutical industry. Clinical trials represent more than 75% of the total cost of bringing an oncology medicine to patients, yet the industry continues to outsource this function to contract research organizations (“CROs”) at an ever-increasing cost per patient. Regulatory policies such as Project Optimus, while well intended, lead to meaningful program delays and increasing Phase 1 trial costs due to increased patient requirements and time. Increased competition exists for nearly every validated target, and pricing reform, such as the Inflation Reduction Act (“IRA”) in the U.S., is placing direct and indirect pressure on innovators. Since inception, we have focused on building unique and hard to replicate competitive advantages that address these industry-wide challenges. Most importantly, our internal clinical team of approximately 3,700 colleagues across the globe allows us to break from the traditional CRO model and develop medicines with greater speed and at a lower cost than many of our industry peers while maintaining quality. This capability paired with our internal research and manufacturing capabilities enables a “fast to proof-of-concept” (“PoC”) approach that can reduce time in early-stage development. We are innovating with intentionality and building best in class combinations to win in the increasingly competitive commercial landscape.