Illustration: Eniola Odetunde/Axios
Pharma startups are in the media spotlight, after decades of playing second-fiddle to consumer and enterprise tech, but are facing their own pandemic-related challenges.
What's happening: Many clinical trials have been put on indefinite hold, particularly if they involved hospital sites. The upshot is that such startups are effectively in a holding pattern, with investors scrambling to decide whether or not to foot the elongated bill.
The key date was March 23, which is when Eli Lilly announced it would "delay most new study starts and pause enrollment in most ongoing studies."
- Pharma VCs tell me that many of their companies followed suit.
- There were exceptions, particularly for studies that already relied on remote monitoring or telehealth, but an investor in a clinical testing facilities operator estimates that around 70% of studies starting in late March got delayed.
- It is unclear what will happen to studies that were paused in-progress. There is hope that the FDA will provide added flexibility, given the circumstances, but that's likely to be determined on a case-by-case basis (here is FDA's current guidance). For some companies, months (or even years) of work may be scrapped.
Pfizer's decision last week to restart some trials could have its own tailwinds, but expect to see some costly changes for future pharma startup investing.
- Longer runway: Venture fundings for pharma companies often are intended to get a company through a Phase 1 or Phase 2 clinical trial. Now, investors must build in the possibility that trials will be stopped, restarted, and then stopped again for exogenous reasons. Particularly if there is a COVID-19 resurgence in the fall.
- Site spread: There will be greater emphasis on geographic diversity for clinical trial sites. For example, don't focus most enrollment in New York and Boston — or any small set of potential viral hot spots. Plus an increase in remote monitoring, such as sending phlebotomists to patient homes.
- Bigger pool: COVID-19 may play havoc with trials for non-coronavirus conditions, in terms of added complications and morbidity. This could require pharma companies to increase the number of enrolled patients.
The bottom line: Lots of pharma is being forced to sit on its hands, while it waits for other pharma to move us into the next normal.