Featuring Lara Sullivan, CEO of Pyxis Oncology
Published June 21, 2024 | 2 min read
Key Points
- Capital markets are still grappling with how to analyze phase one trial data produced by young public biotechs.
- Biotechs and investors could benefit from a common understanding of clues to the quality of early development work.
- While stocks have risen somewhat, suppressed prices still offer M&A bargains for big pharma.
- Pyxis is pioneering hard-to-treat cancers using innovative antibody-drug conjugates. Their approach combines experience, fresh thinking, and a laser focus on patient outcomes.
Market’s learning curve on early phase trials
Pyxis Oncology was one of a number of pre-clinical biotechs to go public in 2021. Now this cohort is producing trial data, a phenomenon that the capital markets have yet to grasp fully, according to Pyxis President and CEO, Lara Sullivan.
“The market is not used to seeing phase one dose escalation trials. It’s not as familiar with how to analyze those as it is phase three trials,” Sullivan explains.
She describes a “baseline asymmetry” between pharma companies, who have a nuanced understanding of the purpose of phase one trials, and the markets, which are still on a “learning curve”: “Both these groups see the same information sometimes in very different ways.”
“The market is not used to seeing phase one dose escalation trials. It’s not as familiar with how to analyze those as it is phase three trials.”
Lara Sullivan, President and CEO, Pyxis Oncology
Novel treatments, not tweaks
Pyxis is relatively fortunate, Sullivan believes, in that its lead program is the development of a new mechanism that it licensed from Pfizer. Leveraging the resources of this pharmaceutical giant, Pyxis obtained a pre-clinical package of higher quality than a small firm could generate independently.
The program – due to produce data in the fall – is pioneering a new way to use antibody-drug conjugates (ADCs). Where other ADCs target the cell surface of a tumor, Pyxis’ product is aimed at the stroma surrounding the cell. The objective is to dismantle a tumor in near the same way a building might be demolished by specifically targeting its foundation.
“We have a passion for trying to tackle difficult-to-treat cancer types,” Sullivan says. “We believe it’s important to bring forward new biology addressing new targets. We’re not about incremental innovation or marginal tweaks.”
“We believe it’s important to bring forward new biology addressing new targets. We’re not about incremental innovation or marginal tweaks.”
Lara Sullivan, President and CEO, Pyxis Oncology
Supporting investment in innovation
When presenting this technology, Sullivan has been surprised to discover the nuanced variations in risk tolerance among investor groups. She believes the investment and biotech communities would benefit from a “meeting of minds” to become more comfortable with investing in areas of new biology. Even where trial data is unavailable, she says, other indications, such as long waiting lists for trials, could usefully be taken into account.
“What I would love is that people get more comfortable in the reading of those clues, and maybe we as biotechs get more comfortable giving some of those clues,” Sullivan suggests.
Bargains remain for hungry pharmas
Pyxis was lucky in being able to raise some $320m to fund its preclinical work in 2021, before the downturn struck. With “great science available on sale,” the company then spent much of the ensuing period evaluating opportunities for buy-side M&A.
“There were a number of things we saw that were attractive, that could have complemented our pipeline quite well,” Sullivan says, “but the counterparty wasn’t ready to do a deal.” She says many of these companies got back in touch months later, having overestimated their ability to raise money.
While stocks have risen since then, Sullivan believes there are still bargains to be had from the perspective of big pharma companies: “I think there’s still the appetite there.”
Focus on patients, not egos
As a biotech CEO, Sullivan has learned to divide her time between being a high-level spokesperson, and project work: “Every day it asks something different of you, and that’s exciting and fun.”
At Pyxis she works alongside other seasoned executives who can draw on big pharma experience. “I joke sometimes that biotech is one of the few professions that rewards you for getting older, because you get pattern recognition,” she says. “At the same time, you always want young, innovative, fresh thinking.”
The company value she prizes most is ‘patients over ego’. Bearing in mind the end beneficiaries of the work can cut through day-to-day organizational tensions, she finds: “It can just help bring you back to what’s right and what’s important.”
Our Expert
Featured Guest:
Lara Sullivan
CEO of Pyxis Oncology