Good morning, Armchair Army,
Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
Right now I’m sitting in a cafe in Queenstown.
The soft drum of “deal chatter” fading in the background.
(and I love it)
The conference kicked off with a bang.
The best of the best to present.
Aroa. Neuren. Telix. Clarity.
What success looks like.
… and as I reflect on the sector, there is one thought that can’t escape my mind.
Everything else looks so cheap.
But just because something is cheap doesn’t guarantee that it will make money.
The Australian biotech sector has been in a rut for a while…
The US?
A boom.
NASDAQ Biotech index up 47% for the year.
The key driver has been two things…
FIRST, the patent cliff.
Billions of dollars of drugs that will come off patent and revenues competed away.
SECOND, the cash printing machine named GLP-1s.
Yesterday, Eli Lilly reported quarterly sales of US$23 billion (against an expectation of $20.7 billion).
That cash print is equivalent to the second-largest company on the ASX by market cap.
… only second to CSL.
(Source: Financial Times)
Since January, the company has spent ~$13.6B in disclosed upfront cash and ~$28.6B in headline milestones.
An Eli Lilly shopping spree.
Fueled by GLP-1s.
Ten deals, across the board.
Two in vivo cell therapies.
Three small molecules (inflammation, sleep, blood cancer).
An antibody-drug conjugate (ADC).
Vaccines.
… oh, and psychedelics.
No obesity or metabolic acquisitions.
Every deal is explicitly diversification away from the GLP-1 franchise.
On Wednesday, Eli Lilly signed a deal with ASX-listed Amplia (ASX: ATX | Held)
(Source: ATX)
This deal is a ‘collaboration deal’, where ATX will use Eli Lilly’s drug in combination with its own technology in non-small cell lung cancer.
NOT a licencing deal, but what it does do is put ATX on the map.
… and in the sights of the largest pharma company in the world.
(one that is on a massive shopping spree)
Let’s hope for the industry that more ASX-listed companies can get in the sights of some of these big pharmas.
Let’s dive in…
The Pulse Check
… yep.
Not much on today as the entire industry is in Queenstown for Bioshares.
See you all tomorrow.
The Armchair Analyst.
