If you're investing in radiopharmaceuticals, you should study the parallels with cell therapy

In both, the supply chain is the key limitation.

Some takeaways:

Inherent product instability / decay requires systems optimized for speed. This means rapid processing, shipping and deployment of fragile or radioactive materials. It also means special procedures and infrastructure are needed from production to delivery

Building this infrastructure is not easy or cheap. But, relying only on CDMOs/CMOs risks supply disruption and a lack of process control.

And despite the talent, systems, and funding, we've seen many failures in both modalities.

Novartis is a good example as they have a presence in both spaces. Kymriah was approved over 7 years ago. Yet, we still see manufacturing shortfalls, Form 483 violations, and failed FDA inspections as recent as this year. JNJ, BMS and Gilead are no different

Also, Novartis has had to shut down production of Pluvicto and Lutathera once every 1-1.5 years on average

These are world-class companies, so it speaks to the complexity. And much of this investment won't translate to other biologics or small molecules across the portfolio

It's risky to spend the $$ internalizing manufacturing without an approved asset. But, you only maximize internal know-how once you make that investment. This creates a chicken-and-egg situation that has put some companies in wait-and-see mode

This has diminished more recently. Companies are more willing to take a bet on at-risk build outs, driven by Pluvicto's class-validating success.

It was no guarantee though - Novartis kept AAA fairly independent until VISION data justified an integration

But, it seems the industry has learned from cell therapy challenges. While there's definitely excitement around efficacy, it's paired with a recognition that the success of this class of medicines will hinge on solving supply chain challenges, such as:

• Expanding # of isotope suppliers and scaling production capacity (important to build supply redundancy)
• Improving production / distribution networks for global deployment
• Bringing down costs & growing talent pool

Interestingly, cell therapy directly contributed to the success of this latest generation of radiopharma assets as it led to long-term improvements in complex manufacturing & supply chain logistics. A lot of know-how was developed that has been carried over

It's also why we see overlap between the pharma cell therapy players and those investing in radiopharma, including >$1B acquisitions by BMS, AstraZeneca and Eli Lilly