April 9, 2026

The need-to-know this morning

Avalyn Pharma, which is developing drugs for respiratory conditions, has filed for an IPO.

venture capital

Biotech VCs confront AI, China — and disruption

The traditional biotech venture model — pairing academic science with seasoned executives and big checks — is under pressure, STAT’s Allison DeAngelis writes. Chinese labs are producing cheaper, faster drug candidates, and AI is siphoning off investor attention and capital. Although firms are sitting on billions of dollars from earlier fundraising cycles, many are struggling with shrinking management fees and skeptical limited partners.

“As an investor thinking about diversification, around changes in AI, I think there’s a critical role for biotech,” Canaan general partner Julie Grant told STAT. “Many limited partners understand that. We just have to walk them through.”

The sector is at something of an inflection point: Although it’s not exactly short on money, it’s coming up against harder questions about whether biotech can still justify its long timelines and high costs in a market increasingly betting on faster, flashier technology. At least 20 firms are actively raising or planning to raise a fund this year, according to a STAT tally.

Read more.

lobbying

PhRMA chief Ubl to exit as pricing battles intensify

Steve Ubl will step down as CEO of PhRMA after more than a decade leading the drug industry’s main lobbying group. He’ll stay on through the end of the year while the search for a successor plays out, STAT’s John Wilkerson writes.

Ubl’s departure comes as political pressure on drug prices hit a new peak, with both parties advancing proposals to rein in costs — from expanding Medicare negotiations to the Trump administration’s tariffs and its “most-favored nation” pricing policy.

Ubl’s tenure spanned multiple administrations and was defined by an aggressive defense of the industry; his compensation was $7.6 million in 2024. Notably, he expended significant effort to redirect blame for high drug prices onto pharmacy benefit managers and hospitals.

washington

Trump administration drops court fight over 'indirect costs'

The Trump administration has opted not to appeal a federal court that affirmed the NIH’s attempt to cap indirect research costs broke the law.

The ruling in January hinged on a congressional appropriations rider that has, for years, barred any changes to how these costs are set. This means that the NIH must keep negotiating rates with research institutions, rather than imposing sweeping caps across the board.

But, as STAT’s Megan Molteni writes, that doesn’t mean the administration won’t try to pursue its policy goals through other means.

“This is certainly not the end of the discussion on the full cost of research or how you maintain the biomedical research enterprise as a whole, it just shuts the door on this particular aspect,” said Heather Pierce, senior director for science policy and regulatory counsel at the American Association for Medical Colleges, one of the plaintiffs in the case.

glp-1 drugs

Genetics may shape GLP-1 outcomes, slightly

Data from the 23andMe Research Institute suggest certain gene variants can nudge how patients respond to GLP-1 drugs like semaglutide and tirzepatide in terms of weight loss and side effects. The effects are small, however, and experts are skeptical the new findings will impact patient care, STAT’s Matthew Herper writes.

Variants in the GLP-1 receptor were linked to modestly greater weight loss but were also associated with nausea and vomiting, making them hard to act on. A separate mutation in the GIP receptor, meanwhile, might flag higher vomiting risk for a tiny subset of patients.

That said, to Eric Topol, director and founder of Scripps Research Translational Institute, the study demonstrated that the institute, which was established following the bankruptcy of the for-profit company 23andMe, is capable of impressive science.

“In the past so much of their work in top-tier journals, they were a data supplier,” Topol said. “This was done by them alone. That is a big deal in my view, for 23andMe to publish data in Nature.”

Thanks for reading! Until tomorrow,

@megkesh