Novartis CMO sees new FDA directives pushing biotechs to pharma deals

Shreeram Aradhye tells The BioCentury Show clinical trial requirements on dose, diversity will seed the ground for earlier partnering

Dealmaking is likely to increase as a result of some of FDA’s recent directives on clinical trials, which increase their cost and complexity, according to Novartis President of Global Drug Development and CMO Shreeram Aradhye.

On The BioCentury Show, Aradhye said the moves by FDA to require dose-optimization studies for many cancer trials, to replace maximum-tolerated dose (MTD) studies, and to ensure trial populations demographically represent the burden of disease in the U.S. population, are a sign of maturation of the standard of evidence required, and an indicator of progress in cancer.

At the same time, they will be a burden for small companies, which will face much more cost- and time-intensive paths to generating proof-of-concept data. That will increase the pressure to partner with pharmas that have the deep pockets and experience to support the necessary trials.

“What I see is now with these requirements is perhaps a greater opportunity for further partnering between smaller biotechs and bigger pharma on designing the optimal programs for these therapies with great potential,” said Aradhye.

Aradhye has sat on both sides of the table. Though a veteran of  Novartis AG (SIX:NOVN; NYSE:NVS), he spent three years in biotech, first as EVP and chief development officer of Axcella Health Inc. (NASDAQ:AXLA), then as CMO of RNAi play Dicerna Pharmaceuticals Inc. until its 2021 takeout by Novo Nordisk A/S (CSE:NOVO B; NYSE:NVO) for $3.3 billion.

He rejoined Novartis in 2022, taking the role of CMO. 

Aradhye said the typical biotech strategy is focused on a short-term goal of delivering enough information to secure capital “at the right valuation for the next round.” Now these smaller companies will have to take into account more rigorous standards of evidence, in particular in cancer. “I do see this changing the way those earlier programs are designed,” said Aradhye, adding that it will likely lead to partnering at earlier stages than might have happened otherwise. 

Aradhye also discussed Novartis’ decision-making approach as it decides what to prune and what to pursue in its goal to become one of the top-five pharmas for U.S. sales; its commitment to focus on its five therapeutic areas — cardiovascular, neuroscience, immunology, solid tumors and hematology; and how it is deploying artificial intelligence to inform protocol design and integrating technology to improve efficiencies.