Pullan's Pieces #154
Pullan's Pieces #154
November 2019
BD News and Analysis for  Biotech and Pharma
Dear --FNAME--,

Jessica is part of a webinar on non-viral gene editing on Dec 11th.  Sign up here for either the live webinar or access later.  

No December issue.   We will be back in January. 

We wish you a wonderful holiday season! 



1. Deal Termination
2.  BRIC Infographic
3. Jessica:  Base editing, the next big thing in gene therapy  
 4.  Trevor:  Unicorn deals

Deal Terminations

In  2018, in GlobalData there were 69 licensing deals announced as terminated.  This is probably a huge undercount of terminated deals as they are required to be announced only if the termination is material to a US publicly traded company.  I have heard some estimate that about 50% of all deals are eventually terminated. 

Deals may be terminated because of negative results with the drug, because of competition with another asset in the partner portfolio (often called a change of strategy), or friction of the partners.  Termination is is painful, with damage to the company image, lost time for drug development as the deal is unraveled, lost future revenues, etc.   

What can you do to avoid your deal being terminated?
1.  Minimize risk of compound failure. 
Strategic:  Plan for boosts of confidence in early development with methods to assure right dose, right patients. 
Partner Selection:  Value expertise. 
Contractual:  Consider requiring minimal level of exploration in development, attach initial development plan.  
2.  Reduce competition risk
Strategic:  Create data fro maximal differentiation.  
Partner selection:  Consider alignment of corporate strategies, complementary strengths.  Understand potential competition from partner portfolio. 
Contractual:  Structure exclusivity and non-compete to limit competition.  Align rewards to avoid incentives for competition or individual company gain not shared with the partner.  Consider equity investment as a tool for alignment of interests.  
3.  Manage friction
Partner selection:  Have repeated multidisciplinary interactions to build trust and understanding.  Explore differences in size, deal experience and culture.  And keep those relationships close to deal with any difficulties during the deal.  
Contractual:  Encourage transparency with JSC and reporting.  Have general roles and responsibilities to deal with unexpected issues.  Use alliance management and dispute reolution. 
Negotiate what happens on termination.  
Contractual:  To enable an orderly transition to continued development, in addition to return of granted rights, consider return of new IP, data, regulatory filings, compound inventory, CMO contracts. 
BRIC deals Infographic
Jessica:     Base Editing, Next Big Thing in Gene Therapy

Gene therapy is here to stay, with several products approved in the last few years and many more poised for approval in the coming years.  Recently some new sub-categories of Gene Therapy have emerged and are briefly summarized at a high-level here:

Gene Therapy

Direct (in vivo) or indirect (ex vivo, aka gene-modified cell therapy) delivery of nucleic acid encoding a gene(s) to a patient.  Direct gene therapy consists of viral vectors encoding the gene of interest while indirect gene therapy products are modified cells which will have employed either viral vectors or non-viral methods for modification.

Gene Editing

Modifications of existing genes via DNA cutting and introduction of insertions or deletions (collectively – indels); alternatively, can be a templated re-writing of a small stretch of nucleic acids via homology directed repair (HDR).  Typically, these tools consist of a nucleotide sequence(s) that guide a cutting enzyme (nuclease) to the site to be modified.  The most public of gene editing tools is the CRISPR-Cas9 (clustered regularly interspaced short palindromic repeats) system.  Recently variations have been emerging which employ different types of the Cas enzyme such as dCas9 (dead/inactivated Cas9) or Cas-13 (for RNA interference).  Other gene editing tools include TALENS (transcription activator-like effector nucleases), ARCUS, or ZFNs (zinc-finger nucleases).

Base Editing

Newest technology involving modifications of existing genes (DNA) OR mRNA via converting one nucleotide into another; no double strand cutting or pasting involved.

In the beginning…

The general idea of base editing is to convert the nucleotides in place, rather than to cut out the “incorrect” ones, as in gene editing.  Base editing burst onto the scene waaaay back in early 2018 with the launch of Beam Therapeutics and it’s all-star lineup of CRISPR experts from the Broad Institute:  David Liu, Feng Zhang, and Keith Joung.  The inception story of the base editing technology for therapeutic applications stems from David Liu’s lab at Harvard and is the stuff of great disruptive technology - with outside-the-box thinking and the breaking of fundamental molecular biology “rules”:  All About that Base Editing

The nerdy stuff

Similar to gene editing, there will need to be some sort of mechanism to guide the tool to the appropriate location in the DNA or RNA.  The premise of the Beam technology, for resolving a G-C pairing that should be an A-T, involves the simultaneous induction of C to U change on one strand (for the CBE system) and a single cut of the complementary strand at the paired base at the G.  The cut in the complementary strand results in the recruitment of the endogenous DNA repair machinery and ultimately leads to a G-to-A change in the complementary strand.  Thus, the new base pair becomes an A-to-T pairing.  Too confusing?  See below, the infographic below was created to illustrate base editing in plants, but the molecular biology described within is similar: 


Base Editing Technology


CBE – cytosine to thymidine DNA base editor coupled to inactivated/dead Cas 9 (dCas9)

C to U

(read as T)

ABE – adenosine to guanidine DNA base editor coupled to dCas9

A to I

(read as G)

ADAR – adenosine deaminase acting on RNA

A to I

(read as G)

PPR – pentatricopeptide repeat

C to U

(read as T)

*May also do others

Surely with technology so exciting, Beam Therapeutics isn’t the only player in this new space.  Below is a table of other companies in the space:




Point of Differentiation


Beam Therapeutics



DNA Editing: CBE & ABE

CRISPR-guided DNA editing

Series A:  $87M (lead by F-Prime and ARCH)

Series B:  $135M

Shape Therapeutics



RNAfix – engineered AAV, suppressor tRNAs and ADAR

Delivery of guide RNA (gRNA) for recruitment of endogenous ADAR machinery for RNA editing

Launch:  $35.35M (Primarily NEA)

Korro Bio, Inc



Oligonucleotide to recruit ADAR

Recruitment of endogenous ADAR machinery for RNA editing

Seed:  $4M

(Primarily Atlas)





RNA and DNA base editing

Series B2:  $7.8M

(Investors:  UTEC, JST, Newton, ITOCHU, K4

Get on base:  what are the proposed benefits of this new “flavor” of gene therapy?

  • Technical:  The initial thinking was that there would be lower risk of off-target effects compared to CRISPR due to the lack of double-strand DNA breaks.  Recently, it has come to light that there may be unacceptable rates of off-target effects by DNA base editors (remember some base editors edit RNA) particularly with CBE; though in those studies the amount of base editor tested was higher than that would be therapeutically relevant.  One nice upside of the explosion in the editing field is that between gene editing and base editing there has been a significant effort put into developing better strategies to test for off-target effects in DNA and RNA.

  • Business:  the patent battle over CRISPR is complex, and many in the industry are unsure from whom they should take their license (for more on CRISPR patent disputes see “The Business of CRISPR” in Pullan’s Pieces Feb2019).  Patents in the field of base editing “should be” cleaner

Tempo change:  base editing is already being disrupted by a newer technology, prime editing.  In October of 2019, Andrew Anzalone and David Liu (yes, he of Editas Medicine and Beam Therapeutics) from Harvard published their findings for a “search and replace” genome editing technology. Prime editing employs CRISPR-Cas9 system coupled to a reverse transcriptase (RT) in order to make a single-strand DNA break coupled to the activity of RT for the addition of the new sequence or base.  Subsequently, the prime editor nicks the complementary strand to induce repair of the mismatch by correcting the complementary strand. 

And there is even a company launched around prime editing, Prime Medicine, which has licensed their technology to Beam Therapeutics for the exclusive right to develop single-base transition mutations, as well as treatment for Sickle cell Disease.  On the surface, it may be unclear why Liu opted to form Prime Medicine rather than grant rights to prime editing directly to Beam, though earlier this month he participated in a Q&A with STAT.  He explains that the relationship between the two start-ups is to avoid redundancy on commonalities (such as delivery and manufacturing) while also allowing for innovation and focus by the R&D teams on the distinct technologies. 

How many more types of gene therapy will emerge before the end of 2019?

Trevor:  "Unicorn" Deals

I wonder if Aileen Lee (of Cowboy Ventures) envisioned just how ubiquitous her use of the word “Unicorn” would become.  Coined to describe startups, specifically US-based software  valued at $1B+, Ms. Lee’s first “use” of the term appeared in a TechCrunch article back in 2013.  It’s an cool read and the premise appears to arise from a backtest of sorts for determining how to size the firm’s funds and investments relative to the size of exits required on bigger and bigger slugs of deployed capital.  Her question “Why do investors seem to care about “billion dollar exits”?” in the context of historical VC portfolio performance where just a few wins making up for the other many losses within VC portfolios (along with the massive amounts of capital some funds now have to generate returns on) sets the stage for an intriguing inquiry into how likely it is to identify and invest in one of these rare, and beautiful (eye of the beholder?!) animals, I mean, opportunities.

In biotech, Unicorns are become more frequently spotted.  Future newsletters will a review of data similar to what Mr. Lee’s Cowboy Ventures team put together in their “Leaning Project” as we think though what hallmarks, if any, can be spotted in (somewhat) recently started companies where the private or public markets have morphed them from a lowly terrestrial mammal to a horse that can fly with a Narwhal-like “tusk” on its forehead. 

But what about biotech’s billion-dollar deals?  These Unicorn deals, of course, are very often backe-ended to account for the ongoing clinical and commercial risks, compensating the Licensor with development and sales milestones (in addition to royalties).  According to Datamonitor’s Pharma Trends August 20, 2019 piece, “Big Pharma Licensing Trends, 2014–18”:


With 54 in-licensing deals done in the five-year period reaching $1bn or higher in total deal value, it is safe to say there are a lot of biobucks trading hands. Within the top 10 alliances of that dataset, immuno-oncology was well represented, with seven deals, with pain, diabetes, and inflammatory disease also ranking. Some deals were product-specific, while others were discovery-based and centered on technology platforms. Seven of the alliances were between Big Pharma and biotech companies (one, Merck and AstraZeneca’s Lynparza deal, was between two Big Pharma firms). Merck & Co claimed the top three deals by total potential value.

Who are these Unicorn herders?  Merck and Sanofi are neck-and-neck when it comes to reigning in the biggest share of the deals while GSK wasn’t all that interested in corraling many of these Unicorn deals.


Overall, the total dollars spent by big pharma were pretty steady.  
But of course, the key difference between being a Unicorn and signing a Unicorn of a deal is that most often, the BIG value contained in deals is paid out as your Unicorn gracefully clears another magical hurdle on its way towards clinical and commercial success.  The upfront is less than 10% of the total.  
It’s our wish here at Pullan Consulting that we all experience an unprecedented era of Unicorn deals, that result in Unicorn products as that will mean severe and high unmet needs are being met around the world through your tireless efforts and innovative spirit.  (And, we’d like to help you negotiate a few of those deals along the way!)
www.Pullan Consulting.com

Pullan Consulting (www.PullanConsulting) provides advice and execution for biotech partnering and fund raising, with outreach to partners and investors, help with shaping of presentations, evaluations and market analysis, preliminary valuations and deal models, and negotiations from deal prep to term sheets to final agreements. 
We have extensive scientific and financial experience, with many deals signed. 

Send us an email or set up a call if you want to explore how Pullan Consulting might be of help!

Linda Pullan                     Linda@pullanconsulting.com 
Trevor Thompson             Trevor @pullanconsulting.com 
Jessica Carmen               Jessica@pullanconsulting.com 
9360 W. Flamingo Road, Suite 110-554 Las Vegas, NV 89147