00:00When we talk about these antibody drug conjugates, what exactly do they do and what has CrossBridge
00:07done to develop? Thanks, Romain. These are very interesting new kinds of cancer agents,
00:15sometimes referred to as a heat-seeking missile. And the way they're set up is the antibody sits
00:22at one end of a linker and at the other end is a chemotherapeutic agent. So one of the challenges
00:27in treating cancer historically has been, it's very difficult to treat patients with chemotherapy
00:32without all the side effects. And that's because historical chemotherapeutic agents go in the whole
00:40body. And so they're not specific. So they're like carpet bombs as opposed to a heat-seeking missile
00:47in the case of an antibody drug conjugate. Now with CrossBridge Bio, thanks to two really smart
00:53professors at the University of Texas Health System invented a next generation ADC. Typical
01:01marketed agents, which there's about 15 on the market today representing about $15 billion
01:06in pharmaceutical sales, have one warhead. And in the case of CrossBridge, they have two.
01:13And that's what's unique about it and I think very exciting for what could be beneficial to cancer
01:18patients. All right. So we're talking preclinical here. So how much time do we need where we would
01:24potentially see this actually deployed for those who actually need it? Well, cancer agents can move
01:32quite quickly. The company is on the cusp of entering phase one clinical studies going after both breast
01:39and lung cancer. They were indicating that those studies would start later this year. After phase one,
01:46oftentimes they're able to move into a registrational study. So in the course of the next three to four
01:51years, potentially, this would make it through the FDA if successful and treating patients along the
01:57way. The beauty of these agents, again, is they're able to provide more chemotherapeutic dose directly
02:04inside the tumor, which increases the ability for those tumors to shrink while at the same time
02:09preserving safety. And so you think about this deal, of course, Eli Lilly and their expansion when it
02:14comes to cancer, when it comes to oncology, it certainly fits in with that. But John, I'm curious
02:19to hear from your perspective, what are you seeing in terms of where the interest is for deal-making
02:24right now? Which areas of drug development, of treatments seem to be catching looks here?
02:32Yeah, well, oncology certainly remains a very important space and science is driving new innovation,
02:38which is for the betterment of patients. I think it's well-documented now that M&A is on fire in
02:46biotech and pharma again this year, and it's expected to continue on its current pace. I think
02:51right now we're on pace to double the activity we saw over the course of the first half of last
02:57year
02:58as we look at 2026. So broadly, pharma is trying to refill their drug pipeline because they have a
03:06massive $300 billion patent cliff that comes on the scene in 2030. And so they're strategically
03:12looking for assets and increasingly they're looking earlier stage and smaller deal sizes. A lot of the
03:17deals recently have been below $10 billion in scale. And that kind of opens up the door for
03:24a lot more of a pipeline that are earlier in development, a little riskier, but novel science
03:30that hopefully will really have a major impact. If you look outside of oncology, obesity, obviously,
03:36you know, cardiometabolic disease, type one diabetes, those areas remain very important
03:42as they, you know, as the population ages. And I'm glad you brought up deal size because that's
03:48something I've noticed as well, that it's more of these smaller scale acquisitions, these smaller
03:53price tags. I'm curious why that is, John, in your view. Is it because, you know, we do have a
03:59little
04:00bit of time when it comes to 2030, maybe, you know, some of these companies saying like we can take
04:06maybe a higher risk, less surefire bet right now, or is it more the idea that maybe those types of
04:12deals would be easier to get across and pass regulatory scrutiny? I think it really has to do
04:19with diversification of the strategic platform that these larger companies are seeking to augment
04:27their internal programs around. And so as a science gets validated, like in the case of Crossbridge,
04:32they're able to move in and move very quickly with their large infrastructure to accelerate the
04:37development, both manufacturing and clinical studies of these compounds. And so I think as opposed to
04:44doing massive deals, such as Pfizer a couple years ago with C-Gen, there's a lot more selectivity
04:52around a number of deals, diversifying the risk profile, more shots on goal, and being able to
04:59increase the overall portfolio of revenue success once these agents hit. I will say too that these types
05:06of drugs are a little bit more understandable as they enter into and through phase one clinical studies,
05:12especially in oncology. And because of that, they're a little less risky to develop with regards to
05:19the targets that they're going after. When we talk about drug development, particularly in light of
05:24some of the funding cuts coming out of the federal government, a lot of the pullbacks that we've seen
05:28from certain universities, are we seeing sort of the major hubs that I guess we would typically look
05:33to primarily like in the Boston area? Has that shifted to other areas, John? Well, you're seeing
05:39definitely more locations benefit from what I would call talent migration. There's a lot more
05:45interested professors and faculty going to other parts of the country, Houston being one of those
05:51places. As NIH funding has become less certain under the current administration, that has caused some
05:58states to step up. In the case of Texas, for example, they have a fund called the Center for
06:05Prevention Research Institute, CEPRIT for short. They invested $17 million into Crossbridge and several
06:12other companies, about $4 billion in total. So where NIH is pulling back, states in certain cases
06:17are increasing their focus. And that is then incurring and pushing around more local innovation
06:24in spaces that perhaps are not as concentrated in places that were typically the hotspots for innovation.
06:32So I think those places, Boston, Bay Area will continue to flourish, but it's spreading to other
06:37parts of the country and even other parts of the world. Well, everything is bigger in Texas. And you
06:41mentioned that you're seeing more states like Texas sort of step up here as NIH funding becomes less
06:48reliable. Is that enough though to sort of plug that gap? Well, I think, you know, if you look at
06:56the
06:58opportunity with regards to the pipeline of intellectual property coming out of universities
07:03that have benefited from the long investments made by NIH over time, I think we're in a good position for
07:09the next couple of years. I think if the funding continues to be uncertain or is pulled back even
07:16further, that creates a bigger gap. But I think for the moment, as states step in and focus on what's
07:23local to
07:24them and leveraging their academic industry partnerships, much like you're seeing with
07:30Eli Lilly, you know, in going to Texas to access innovation and building from there, I think you're
07:37going to see a lot more of those types of things happen in the near term. Certainly over the long
07:42term,
07:42we need NIH funding to continue to invest at a robust pace. But I think people are looking beyond that
07:48with regards to where the current administration stands, both in terms of FDA and NIH funding.
Comments