Better late than never.

Most companies in the coverage ecosystem are having a respectable first half of the year so far. A few are simply staying afloat through pivots (Certara, Codexis, Bicycle Therapeutics) or lingering questions (Harmony Biosciences), but that's the best investors can ask for sometimes.

Arrowhead Pharma had to walk back its aggressive pricing for Redemplo, but that mea culpa sets the stage for smoother commercial ramps in the much larger hypertriglyceridemia market. Kiniksa Pharma keeps dominating a wide-open market opportunity in recurrent pericarditis, although the current valuation leaves no room for error for the 2H 2026 data readout for a next-generation asset. Krystal Biotech is finally promising to take drug development more seriously, while Twist Bioscience got back on track with a strong fiscal Q2.

Competitive landscapes are bending to favor others. Merck's Welireg flunked a key study for early-line kidney cancer, which pries open a high-impact market opportunity for casdatifan from Arcus Biosciences. Celcuity's gedatolisib triplet stumbled in 2L+ HR+/HER2- breast cancer, which eliminates yet another competitor for Relay Therapeutics' zovegalisib doublet in breast cancer.

But there are always exceptions.

AVITA Medical is dangerously low on cash. As in, you might wake up one day to an SEC filing about bankruptcy and have no time to escape an 80% drop. It might get some creative financing, or a pity buyout from a larger wound care company.

Coherus Oncology appears to be heading for a dilution spiral unless it has some rabbits in its hat. CCR8 data from the competitive landscape suggest the once hot immuno-oncology target might be a dud, which puts a little too much pressure on the preliminary phase 2 data readout from casdozokitug in liver cancer. Data readouts for both are expected in the next 60 days.

And then there's Wave Life Sciences, which is tripping over mismatches between drug development strategy and commercial strategy for multiple assets.

Given the recent surge in Treasury yields – a sign investors expect interest rates to increase in the future – let's also peek at the cash position and runway of each business.

Arcus Biosciences $RCUS

• Cash+ position at the end of March 2026: $876 million
• Expected cash runway: Into 2H 2028
• Risk if biotech winter re-emerges: High if casdatifan disappoints, but will be able to comfortably raise capital if casdatifan is successful.
• Press release

Arcus Biosciences thinks it has the potential to disrupt the standard of care in renal cell carcinoma (RCC), the most common type of kidney cancer. To do so, it'll need to displace Merck's Welireg, which is on pace to generate full-year 2026 revenue approaching $900 million in 2L+ RCC.

So far, so good.

Welireg recently flunked a pivotal study attempting to move the treatment into early-line treatment settings. The flop was driven by the HIF-2-alpha inhibitor's relatively poor tolerability profile and its combination with a tyrosine kinase inhibitor (TKI). As a result, Arcus Biosciences plans to initiate a new pivotal study for its next-generation HIF-2-alpha inhibitor and lead drug candidate casdatifan in 1L RCC by the end of 2026. The company will ditch a TKI therapy and instead evaluate either a doublet with a PD-1 inhibitor or a triplet with both a PD-1 and CTLA-4 inhibitor.

Although that planned study won't readout until early 2030, the pivotal PEAK-1 study in 2L+ RCC should be fully enrolled by the end of the year. That means it should have a topline data readout in 2028 and potentially launch in 2029. The late-line treatment setting represents a market opportunity of roughly $2 billion, while 1L regimens could capture an additional $3 billion.

The potential to leapfrog Welireg in a high-impact market opportunity isn't going unnoticed. In early June 2026, Bristol Myers Squibb and BioNTech decided to evaluate casdatifan in combination with their PD-L1 / VEGF2 bispecific antibody in RCC. Arcus Biosciences won't benefit financially from the study itself, but it creates a future potential revenue stream if the novel combination launches – and it didn't have to pay for the study.

Investors can expect three new batches of data before the end of 2026:

• (2L+ RCC) Arcus Biosciences will present updated phase 2 data for 45 patients who received a casdatifan doublet including Cabometyx. All patients will have at least 12 months of follow up, enabling more mature overall response rate (ORR) and mPFS data.
• (1L RCC) Arcus Biosciences will present preliminary data from early-line cohorts in its phase 2 study. These patients will have received a casdatifan doublet with a PD-1 inhibitor instead of Cabometyx.
• (2L+ RCC) Arcus Biosciences will present long-term data for patients who received casdatifan monotherapy, which will include the first look at overall survival (OS).

Arcus Biosciences is also barreling ahead with its new small-molecule immunology pipeline, which expects to begin clinical trials for an oral MRGPRX2 inhibitor (urticaria, atopic dermatitis) in Q3 2026 and an oral TNF-alpha inhibitor (rheumatoid arthritis, psoriasis, inflammatory bowel disease) in 1H 2027.

Arrowhead Pharma $ARWR

• Cash+ position at the end of March 2026: $1.784 billion
• Expected cash runway: Into 2029
• Risk if biotech winter re-emerges: Relatively low in all scenarios, but Arrowhead may need to further prioritize specific assets.
• Press release

Arrowhead Pharma has the wind at its back and the sun on its face. What could possibly go wrong?

The RNAi pioneer is building the commercial infrastructure to support its first approved drug, Redemplo (plozasiran), which was approved to treat familial chylomicronemia syndrome (FCS). But it's not really about FCS. The ultimate goal is to win sweeping approvals to treat hypertriglyceridemia with fancy labels for things like reducing the risk of pancreatitis. That would catapult the market opportunity from thousands of patients to millions of patients – on paper, anyway.

Data shared to date bode well for Redemplo to eventually claim blockbuster status, although it's a difficult market that might not ramp overnight. No matter. Arrowhead Pharma corrected its initial commercial mistake of pricing the drug product too aggressively (join Discord you uncultured brute), dropping the wholesale acquisition cost (WAC) from $60,000 per year to $45,000 per year. That's much more competitive with Tryngolza, an antisense oligonucleotide (ASO) from Ionis Pharma priced at $40,000 per year on the same basis. Redemplo is dosed less frequently and drives better patient outcomes to boot, so a small price advantage can be justified.

A trio of pivotal studies that will decide Redemplo's fate are expected to have topline data readouts in mid-2026. Throw in development updates for complement mediated diseases, obesity, MASH, neuro, asthma, and cardiovascular disease – as well as updates from assets partnered or owned by Amgen, Sarepta, Takeda, Novartis, and GlaxoSmithKline – and there's plenty for investors to be excited about in the near and long term. The current model is desperately outdated, but will be updated this summer.

AVITA Medical $RCEL

• Cash+ position at the end of March 2026: $14.3 million
• Expected cash runway: Into 2H 2026
• Risk if biotech winter re-emerges: AVITA Medical might cease to exist by the end of 2026.
• Press release

Lady Gaga has a great poker face. Maybe AVITA Medical should start taking notes.

Management tried to sell a story of progress on the Q1 2026 earnings call, but those keeping score at home can see things are not well. The business ended March 2026 with just $14.3 million in cash – and it burned $9.9 million in cash from operations in the first quarter. While cash burn should slow in the coming quarters, that's not much consolation given the, well, $14.3 million in cash.

The wound care specialist might soon get a tiny bit of breathing room. On June 5, AVITA Medical issued a warrant certificate to its lender Perceptive Advisors, which can purchase 650,000 shares of common stock at $3.49 per share. That's $2.27 million in gross proceeds. Most of that might go to pay debt obligations, but it could extend the cash runway by another month or two. It can also draw down an additional $10 million from the existing credit facility.

This one's a bummer. The technology is real. The margins are great. The old management team simply mismanaged operations to a point that there's no margin for error, and it might already be too late. Investors might need an acquisition out of desperation, a lopsided partnership, selling rights in stable vitiligo, or a potentially lucrative international licensing deal to salvage positions.

Bicycle Therapeutics $BCYC

• Cash+ position at the end of March 2026: $559.5 million
• Expected cash runway: Into 2030
• Risk if biotech winter re-emerges: Bicycle Therapeutics has awkwardly too much cash and not much to spend it on through the remainder of the decade – a good problem to have I suppose.
• Press release

Bicycle Therapeutics has the opposite problem of AVITA Medical: too much cash and not enough productive uses for it. A damn shame, huh?

The drug developer is pivoting toward radiopharmaceuticals, but requires a couple years to get the ball rolling. That means its $559.5 million cash pile at the end of March 2026, while relatively modest, will fund operations into 2030. If the business finds a buyer for its former lead asset, then the cash runway might get extended even further.

Investors aren't very interested in parking their cash in an unproductive business. Case in point: Bicycle Therapeutics has a market valuation of just $286 million – roughly half its cash pile. That's a silly stat, but by the time investors have anything to care about the cash balance will most likely be meaningfully smaller.

This is simply one to keep on your radar. If the radiopharmaceuticals pipeline starts heating up, then I'll share my thoughts and potential excitement. Sometimes the best entry points present themselves when no one is paying attention.

Certara $CERT

• Cash+ position at the end of March 2026: $149.5 million
• Estimated pro forma cash at the end of June 2026: $245 million including asset sale, excluding potential share repurchases
• Expected cash runway: Indefinite
• Risk if biotech winter re-emerges: Certara has generated cash from operations for at least 25 consecutive quarters. As such, it isn't at risk of running out of money, but picks and shovels companies like it face heightened risks of slower (or negative) growth if their customers continue to struggle financially.
• Press release

The biosimulation pioneer is making 2026 a transition year. However, that doesn't automagically mean things will get better in 2027. Both the looming pharma patent cliff and barebones early-stage pipelines across the industry could negatively impact Certara's business for the next few years. If that risk materializes (during, say, a recession), then shares could trade near $3 or less.

The business is still facing the same familiar headwinds. During Q1 2026, software revenue grew 7% while services revenue declined 4% from the year-ago period. Help is on the way, although it's more of an "addition by subtraction" type of help.

Certara finally found a buyer for its struggling medical writing and regulatory services business unit. The asset sale will net $85 million upfront, another $15 million for successfully transferring related assets, and up to $35 million in potential milestones based on the performance of the business.

The divestiture will also peel away 220 employees, resulting in a reduction of force of approximately 15% from the end of 2025. That will reduce ongoing operating expenses by a meaningful amount, while also tipping the revenue mix to a roughly 50/50 split between higher-margin software and moderate-margin services. That's a nice bump from the 46.5% to 53.5% split at the end of March 2026.

While the business has a lot to prove during its turnaround, the asset sale represents a quick win and trust-builder for new CEO Jon Resnick. But investors should acknowledge that customers might be less willing to spend on external solutions in the current moment, whether chalked up to the distribution of AI tools, pinched budgets, or both.

Codexis $CDXS

• Cash+ position at the end of March 2026: $65.1 million
• Expected cash runway: Through end of 2027
• Risk if biotech winter re-emerges: Aside from technical risk of ECO Synthesis not developing as expected, Codexis needs more capital in the near term – and that could be difficult to come by. A technology partnership and equity investment by the end of 2026 could lower the anxiety, but investors should expect volatility without a longer runway.
• Press release

It's all uphill from here.

Codexis reported relatively strong Q1 2026 revenue of $15.2 million, although that included the final $6.3 million in service revenue from the Merck licensing deal announced at the end of last year. Still, the business notched $7.2 million in product revenue, $0.3 million from ECO Synthesis, and a product gross margin (excluding services revenue from the denominator) of 71.3%. Product gross margin has been as choppy as product revenue in recent years – bouncing between 44.7% and 71.6% in the prior eight quarters – so investors might not expect it to hold above 70% for the rest of the year.

The industrial enzymes specialist burned $13.1 million in cash from operations in the opening frame of 2026, leaving it with $65.1 million in cash at the end of March. Management believes that will fund operations through the end of 2027, but investors can expect Codexis to raise capital before the end of this year.

A public offering of common stock would lead to painful dilution. A credit facility isn't out of the question, which might be the most likely considering the business is overhauling a new GMP facility for ECO Synthesis. Debt and capex for hard assets often go hand-in-hand. Codexis has teased another possibility: an equity investment from a major RNAi drug developer in 2H 2026.

Pure plays like Alnylam and Arrowhead are flush with cash. The latter wields a wholly-owned RNAi manufacturing facility in Wisconsin and multiple assets for massive indications like obesity and heart disease, which may give it added incentive to explore next-generation production technologies like ECO Synthesis. Codexis and Arrowhead also teamed up for a fireside chat about enzymatic synthesis of siRNA molecules at the recent TIDES meeting.

Fortunately, the ascendence of RNAi as a therapeutic modality – AbbVie, CRISPR Therapeutics, Moderna, Novartis, Amgen, Takeda, and many others are developing drug candidates – means investors don't need to worry about which company might tie-up with Codexis. They only need a research or licensing deal to be announced as a meaningful sign development is progressing in the right direction.

Coherus Oncology $CHRS

• Cash+ position at the end of March 2026: $167 million
• Expected cash runway: Into 2H 2026
• Risk if biotech winter re-emerges: Coherus might cease to exist by the end of 2026.
• Press release

The market is starting to catch on to the worst-kept secret in the coverage ecosystem: Coherus Oncology is existentially low on cash. Loqtorzi won't be able to bail it out anytime soon either.

‍

The aggressive drug developer ended March 2026 with $167 million in cash. While that doesn't seem too bad, investors should realize the cash balance is actually $105.9 million after subtracting the Udenyca TSA payables owed to Intas Pharma. The math won't get any more favorable considering the business burned $38 million in cash from operations in Q1.

Making matters worse, almost every external event has gone against Coherus recently. Both STORM Therapeutics and Inovio Pharmaceuticals decided to ditch combination studies with toripalimab.

Meanwhile, recent data readouts from the competitive landscape sure make it seem like CCR8 is going to be the latest immuno-oncology dud. Amgen announced its CCR8 inhibitor AMG-355 drove an objective response rate (ORR) of 1.4% as a monotherapy and 3.3% when combined with Keytruda. Gilead Sciences said denikitug achieved a monotherapy ORR of 8%. Yikes.

More concerning, the median patient who responded to denikitug had already received six (6) prior treatments. That's a big problem. The market for CCR8 inhibitors is going to be pathetically small if they only drive responses as seventh-line (7L) treatment options.

These data aren't out of line with the mechanism of action for CCR8 inhibition, which allows treatment-resistant tumors to be treated again. But investors were hoping for, you know, activity as a 3L or 4L treatment option. Investors shouldn't expect tagmokitug to perform meaningfully better just because it's more selective either.

The last hope investors have is that the Amgens and Gileads of the world are running large basket studies evaluating many tumor types, including some questionable ones. Coherus is also running a large basket study, but focusing on tumor types expected to respond to CCR8 inhibition and reading out the data from each separately. Head and neck cancer, as well as gastric cancer and late-line colon cancer, should see more responses. Should.

That means the fate of Coherus as an investment likely rests on the IL-27 inhibitor casdozokitug. More specifically, the casdozokitug triplet including toripalimab (PD-1) and Avastin (VEGF) in hepatocellular carcinoma ("liver cancer"). Preliminary phase 2 data are expected in mid-2026, but the market-moving data might not arrive until mid-2027 – too long to save the day.

It could still work out. A doublet containing Roche's PD-1 inhibitor Tecentriq and Avastin is the standard of care in HCC, with the Tecentriq component generating over $1 billion in annual sales. If casdozokitug shows promise on tolerability and improves responses, then larger companies could find the potential to own multiple pieces of a standard-of-care-resetting triplet – the PD-1 inhibitor (toripalimab) and casdozokitug – an attractive possibility.

If shares pop on data readouts, then it might not last long. Coherus needs to issue tens of millions of shares to keep the lights on.

Harmony Biosciences $HRMY

• Cash+ position at the end of March 2026: $870.5 million
• Expected cash runway: Indefinite (with Wakix exclusivity) / into 2H 2030 (without Wakix exclusivity)
• Risk if biotech winter re-emerges: Harmony Biosciences is a cash cow so long as Wakix maintains market exclusivity. If the company fails to settle patent infringement case against AET Pharma, then it could run out of cash by the end of 2030 without drastic reductions in expenses.
• Press release

Harmony Biosciences got kicked in the deez by its fumbled patent infringement case against AET Pharma and came to its senses.

A long-time board director who helped start the company got booted out, while the CFO with hands so slippery he couldn't own a single share of the business got kicked to the curb. The neuroscience specialist also acquired exclusive global rights to the one piece of pitolisant intellectual property it didn't own, then turned around and filed a new patent infringement case against AET Pharma. That might be enough to make the whole debacle go away – after making a hefty cash payment to settle the dispute, anyway.

A massive settlement payment would be a fantastic investment considering it would protect over $325 million in annual operating cash flow for 2026, 2027, 2028, and at least half of 2029. Investors have reasons to doubt the company's ability to acquire assets that will change the narrative, but the renamed orexin-2 receptor (OX2R) agonist BP-205 could emerge as the golden ticket for a renewal. That's especially true considering the hype and multi-billion deals for similar assets from Takeda, Alkermes, and Centessa Pharmaceuticals.

If Harmony Biosciences announces a settlement of the patent infringement cases with AET Pharma, then shares would be expected to surge to or above the modeled fair value. The tricky thing is there are only a few months remaining until the district judge issues her ruling, which is expected in August. There's an uncomfortable level of risk involved, but the historical odds favor Harmony.

Kiniksa Pharma $KNSA

• Cash+ position at the end of March 2026: $468.1 million
• Expected cash runway: Indefinite
• Risk if biotech winter re-emerges: Kiniksa controls its own financial destiny. There are no expected commercial threats to Arcalyst and the business generates cash from operations on an annual basis.
• Press release

Kiniksa Pharma can do no wrong.

Arcalyst is crushing its wide-open opportunity in recurrent pericarditis. The asset raked in first-quarter revenue of $214 million, while management now expects full-year sales of at least $930 million. Revenue guidance has been increased almost every quarter for the last two years though.

Although collaboration expenses (the portion of gross profit split with Regeneron) is eating up precious cash flow, the business continues to generate cash and ended March 2026 with $468 million in greenbacks. Of course, wouldn't it be nice to not owe any money to Regeneron?

That's the hope of the wholly-owned pipeline led by KPL-387, a next-generation asset with an almost identical mechanism of action to Arcalyst. Kiniksa expects to share data from a phase 2 study exploring multiple doses and dose frequencies in 2H 2026. It might be the only thing that can clip this bird's wings.

Whereas Arcalyst is dosed every week, KPL-387 might be dosed once monthly (every four weeks). That's the hope. The phase 2 study is evaluating two separate dose levels every two weeks and two separate dose levels every four weeks. Will the market throw a temper tantrum if either monthly dosing option isn't good enough to advance into the planned phase 3 study?

‍

Krystal Biotech $KRYS

• Cash+ position at the end of March 2026: $1.0 billion
• Expected cash runway: Indefinite
• Risk if biotech winter re-emerges: Krystal Biotech controls its own financial destiny. There are no expected commercial threats to Vyjuvek, the business generates cash from operations, and management continues to be hesitant to invest in R&D.
• Press release

Vyjuvek keeps growing. Krystal Biotech keeps hoarding cash. Like a dragon protecting treasure…

Although the growth rate of Vyjuvek is slowing, new and upcoming approvals in European countries and Japan promise to keep nudging the epidermolysis bullosa treatment closer to its peak sales potential. Investors aren't complaining considering the drug developer is sitting on a cash balance that now tops $1 billion.

Management is finally reversing its R&D austerity policy by investing in diverse assets. That includes a formulation of Vyjuvek for eye lesions and KB801 for neurotrophic keratitis, another eye disorder. Both are expected to have pivotal data readouts in Q4 2026. Both are relatively small market opportunities, but could add over $100 million in annual revenue with minimal additional commercial infrastructure.

KB111 is being developed for a rare skin disorder called Hailey-Hailey disease (HHD). It's a smart, ultra-rare condition that leverages the company's existing commercial infrastructure for Vyjuvek. However, Krystal Biotech is taking the unusual step to develop its own clinical scale for measuring responses, then using that for evaluating its own drug candidate. It did the same thing for its aesthetics pipeline with all the controversial fallout you might expect.

The assets with high-impact potential continue to face stalled or slow development.

KB407 has the potential to treat all forms of cystic fibrosis, potentially neutering Vertex Pharmaceuticals, but Krystal Biotech is choosing an ultra-slow study design in just five patients for half a year. The upside is that data are expected by the end of 2026 or early 2027, but perfect efficacy might be required to get the market excited. Then again, perfect efficacy in even five patients would send shares soaring.

Similarly, KB408 has the potential to functionally cure alpha-1 antitrypsin (A1AT) deficiency lung disease, but the asset has been moving through development at a glacial pace. Repeat dosing data are expected later this year. However, base editors and RNA editors capable of fixing faulty genes and mRNA transcripts could be a much simpler approach to treating the condition. These competitors have leapfrogged Krystal Biotech in the clinic.

Relay Therapeutics $RLAY

• Cash+ position at the end of March 2026: $642 million
• Estimated pro forma cash at the end of June 2026: $894 million including April and May capital raises
• Expected cash runway: Into 1H 2029
• Risk if biotech winter re-emerges: Potentially high. Relay Therapeutics has aggressively raised capital in 1H 2026, but it also has aggressive development plans. If zovegalisib has a path to an accelerated approval in vascular anomalies in 2028, then the asset could begin generating cash flow by sometime in 2030 – that means offsetting commercial infrastructure expenses. The business should be able to raise capital as needed if data readouts continue to hit the mark.
• Press release

Relay Therapeutics should end June 2026 with about $894 million in cash. Management has made it clear the intention is to remain an independent company, get zovegalisib across the finish line, and maximize economic rights to the rest of its pipeline. Ironically, in biotech, controlling your own destiny and not dangling the acquisition carrot in front of investors subdues your valuation premium. Fine with me!

What will the company do with all that cash?

Well, it needs to fund its first pivotal study for a zovegalisib triplet in the 1L endocrine sensitive population for HR+/HER2- breast cancer. It needs to collect more data for zovegalisib in vascular anomalies to potentially earn an accelerated approval. Then it needs to start investing in commercial infrastructure for both breast cancer and vascular anomalies. Oh, and it needs to fund the first part of the phase 1/2 study of RLY-8161 (NRAS inhibitor), which will be relatively expensive to continue developing due to the diverse tumor types driven by NRAS mutations.

There are some open questions lingering, too. What are the plans for the Fabry disease candidate, which has above-average licensing potential? Is Relay Therapeutics also developing a novel PI3K-alpha inhibitor that can cross the blood-brain barrier to treat cerebral cavernous malformations (CCM)? Will is resurrect the CDK2 inhibitor RLY-2139 for next-generation triplets in breast cancer? Speaking of, will it explore a zovegalisib triplet with atirmociclib in 2L+ HR+/HER2- breast cancer? If so, how does that impact the ongoing pivotal ReDiscover-2 study for the zovegalisib doublet with fulvestrant?

As you can see, staying independent sure gets expensive quickly. Relay Therapeutics has been pretty good at prioritizing strategic moves in recent years. Let's hope it doesn't lose focus until cash flows are on the horizon.

‍

Twist Bioscience $TWST

• Cash+ position at the end of March 2026: $172 million
• Expected cash runway: Into 1H 2029 (calendar basis)
• Risk if biotech winter re-emerges: Twist Bioscience always seems to earn a premium valuation, which can help it to raise capital when needed. The business has a relatively low cash burn and margins continue to improve, but an additional cash infusion in the next 12 months would be smart to help skate through the coming misery for the economy – and its customers.
• Press release

Life finds a way. So does Twist Bioscience.

The business is never afraid to develop new applications for synthetic DNA and oligos, but is equally quick to pull the plug when things aren't working. Most companies never come close to finding that balance, but Twist Bioscience has perfected it.

As the latest example, roughly 10% of the company's revenue was at risk when federal grants dried up because America now hates science. Industrial customers also stalled out due to the constraints imposed by the biotech winter. Twist Bioscience simply became more important to its core customer group, diagnostics companies, and found another growth shoot from drug developers.

Although the number of active customers has grown less than 30% in the last four years, the business is now shipping almost twice as many genes per customer (116 vs. 62). Part of that is driven by the emergence of molecular residual disease (MRD) tools, but the technology platform is also quickly catching on among drug developers for drug discovery applications. In fact, they became the top source of revenue in fiscal Q2 2026 for the first time ever.

That's not to say Twist Bioscience doesn't face some headwinds. Growth is still slowing. If drug developer customers don't prove durable, then the wheels could come off for the synthetic DNA pioneer. The business ended March 2026 with $172 million in cash. That's relatively healthy considering it has a light quarterly cash burn of about $17 million, but it seems like the company will need one more capital raise before it hits escape velocity.

‍

Wave Life Sciences $WVE

• Cash+ position at the end of March 2026: $544.6 million
• Expected cash runway: Into Q3 2028
• Risk if biotech winter re-emerges: Potentially high. Wave Life Sciences needs to report good news from its regulatory meeting with the FDA (expected in mid-2026) on a potential accelerated approval pathway for WVE-008 in alpha-1 antitrypsin (A1AT) deficiency and increase confidence in the development strategy for WVE-007 (INHBE inhibitor). Without either of those assets, the pipeline is a little unimpressive.
• Press release

Wave Life Sciences is at risk of becoming a textbook example of what happens when drug development strategy and commercial strategy fail to align. The technology platform has plenty of potential – it wouldn't be in the coverage ecosystem otherwise. But the execution has been a little messy.

There's the RNA editing candidate WVE-006 for A1AT deficiency, which could potentially treat both the liver and lung manifestations of the disease. The initial data readout showed promise. The subsequent data readout showed higher doses didn't make a lick of difference. That's not unusual for an entirely new therapeutic modality – this is the first RNA editing asset to be evaluated in human patients – but the data gut-checked investors. Apparently, the data also prompted GlaxoSmithKline to make a "no-go" decision and hand the asset back to its originator.

Wave Life Sciences is now plowing ahead and trying to accelerate development. That might seem weird given the context, and regulators may balk at the proposal, but WVE-006 appears to have meaningful efficacy. It just might not be as convenient as originally hoped.

Once again, that's not unusual for genetic medicines. Alnylam earned the first-ever approval for an RNAi drug with Onpattro, which is administered with an IV every three weeks. It's the first and last RNAi drug administered intravenously (it's encapsulated in lipid nanoparticles), as all others are dosed with more convenient subcutaneous administration (all conjugated to a targeting ligand and don't need to be encapsulated in LNPs). For example, Alnylam followed Onpattro with Amvuttra, approved for the same exact indication, which is dosed every 12 weeks with a simple shot. Maybe WVE-006 will have a better, more convenient little brother one day.

Wave Life Sciences is also at risk of fumbling the development and potential commercialization of its INHBE inhibitor WVE-007. Consider that competitor Arrowhead Pharma appears likely to aim its INHBE asset at metabolic dysfunction-associated steatohepatitis (MASH) and certain kinds of obesity, pairing it with Mounjaro for the latter. It might instead aim its ALK7 asset at obesity head on.

Wave Life Sciences doesn't have an ALK7 asset (yet). It also chose to combine its INHBE asset with inferior weight loss drugs from Novo Nordisk, although that could be a genius move if the large pharma gets desperate. And the follow-up data were also underwhelming, replicating the pattern for WVE-006.

Investors want to see the business refocus, make some potentially difficult decisions that may result in a development delay, and maybe attract a partner to help share risk.