In this week’s edition of InnovationRx, we look at the Trump administration’s massive health agency layoffs, Palantir’s lawsuit against a YC-backed startup, Gather Health’s new primary care model, Airna’s $155 million deal, and more. To get it in your inbox, subscribe here.
Peter Marks, who oversaw the division of the FDA responsible for the approval of vaccines, gene therapies and other crucial drugs, was forced out of his role late Friday night. He wrote in his resignation letter that HHS secretary Robert F. Kennedy, Jr.. wanted “subservient confirmation of his misinformation and lies.”
The move sparked outcry from scientists, health officials and industry leaders alike. “We are deeply concerned that the loss of experienced leadership at the FDA will erode scientific standards and broadly impact the development of new, transformative therapies to fight diseases for the American people,” John Crowley, CEO of the trade group Biotechnology Innovation Organization, wrote in a statement on Saturday.
Those concerns went unheeded on Monday, as Kennedy began laying off thousands of workers after announcing that he planned to get rid of 10,000 people. The FDA, CDC and National Institutes of Health were particularly hard hit. Top officials at the NIH were asked to move to remote locations including Alaska, Oklahoma and Montana—or be placed on leave. The director of the CDC’s center for HIV was placed on leave, as was the FDA’s Office of New Drugs director and many other key leaders.
Scott Gottlieb, who served as FDA commissioner in the first Trump Administration, decried the cuts, writing on social media that “we built the FDA into the most efficient, forward-leaning drug regulatory agency in the world—and established the U.S. as the global center of biopharmaceutical innovation. Today, the cumulative barrage on that drug-discovery enterprise, threatens to swiftly bring back those frustrating delays for American consumers, particularly affecting rare diseases and areas of significant unmet medical need.”
Writing on LinkedIn, former FDA commissioner Robert Califf, who served in the Biden Administration, minced fewer words. “The FDA as we’ve known it is finished, with most of the leaders with institutional knowledge and a deep understanding of product development and safety no longer employed.”
Palantir Sues Y Combinator Startup Over Alleged Trade Secret Theft
A messy legal battle is brewing in the market for AI that reviews health insurance claims.
Palantir Technologies has sued Y Combinator-backed startup Guardian AI and its founders—former employees of its healthcare division—for what it called “brazen” trade secret theft in the U.S. District Court for the Southern District of New York.
Palantir, the $198 billion (market cap) tech behemoth, alleged in the suit that founders Mayank Jain and Pranav Pillai, who had worked at Palantir from 2022 to 2024, stole trade secrets to launch Guardian AI, which uses AI to help healthcare providers fight insurance claim denials, through YC’s summer 2024 class.
“Pillai and Jain took Palantir’s work and applied to a startup incubator to commercialize these projects for their own financial gain—and did so while still employed and working on these projects at Palantir,” according to the suit. Trade publication Law 360 previously covered the suit, which was filed in early March.
“This is quite new and we’re working on resolving it with Palantir at the moment,” Jain said by email when reached at his work account.
BIOTECH AND PHARMA
The Parker Institute for Cancer Immunotherapy (PICI) appointed former American Cancer Society CEO Karen Knudsen as its new chief executive in order to “take the organization to the next level” Parker told Forbes. Knudsen, a cancer researcher who has a Ph.D. in molecular biology, previously founded the Sidney Kimmel Cancer Center’s prostate cancer program and led its cancer care programs as enterprise director. During her four-year tenure leading the American Cancer Society, the organization more than doubled the research grants it awarded. As CEO of the institute, she will oversee its partnerships with multiple universities and cancer centers, including Stanford, the University of Pennsylvania, UCLA and others, as well as its investments in biotech companies.
To date, the organization has spent more than $300 million on nearly 500 academic projects that have resulted in the publication of more than 4,000 papers and over 300 patents, largely focused on cancer immunotherapies—drugs that assist the body’s own immune system to fight cancers. Seventeen biotech companies have spun out of this research, collectively raising more than $4 billion in venture capital.
DIGITAL HEALTH AND AI
Google DeepMind spinoff Isomorphic Labs announced that it had raised $600 million in a funding round led by Thrive Capital. Other investors include its parent company Alphabet and Alphabet’s venture arm GV. The company, founded by CEO Demis Hassabis, who also contributed to the development of protein folding software Alphafold, aims to accelerate drug discovery with AI. Isomorphic has partnered with Eli Lilly and Novartis on drug development projects. It’s also been poaching talent from other European AI drug companies, including Benevolent AI and Exscientia, according to reporting from Sifted.
Plus: A generative AI-powered therapy chatbot developed at Dartmouth improved mental health symptoms in patients enrolled in a clinical trial of the software.
MEDTECH
The FDA cleared the Glean Urodynamics System, created by device company Bright Uro, for patients with lower urinary tract dysfunction. Unlike conventional diagnostics for this condition, Bright Uro’s system doesn’t require a catheter, and clinical trials found it collected more accurate patient data for guiding clinical decisions.
PUBLIC HEALTH AND HOSPITALS
As an ER doc, Brent Asplin saw too many patients come in needing treatment for chronic diseases that would have been better addressed if they had a primary care physician, who could help with underlying conditions. As cofounder and CEO of Gather Health, Asplin is building a new way of delivering primary care to older adults with help from in-home technology and in-person gatherings to reduce social isolation. It’s signed up more than 2,500 patients, the majority on both Medicare and Medicaid. With $17 million in new funding, it’s growing fast–and expects to reach breakeven on its first four health centers in the greater Boston area this year.
Also: New research from University of North Carolina at Charlotte showed that avian influenza variants are beginning to evade human immunological defenses.
DEAL OF THE WEEK
RNA editing startup Airna raised $155 million led by Venrock and Forbion Growth to pursue clinical trials for treatment for alpha-1 antitrypsin deficiency, or AATD, a rare inherited genetic disorder that affects the liver and lungs. Airna’s lead RNA editing therapeutic, known as AIR-001, was designed to address the underlying cause of AATD by restoring levels of the protein that patients who have the disease lack. CEO Kris Elverum told Forbes that approximately 100,000 people in the U.S. have the genetic mutation that causes the disease and that these patients have “great odds” of progressing to COPD and cirrhosis.
Beyond that, Airna will use the capital to develop other RNA editing therapies both to repair harmful genetic variants and to introduce healthy genetic variants that improve patients’ overall health. “We all evolved through genetic variants. Some cause harm and AATD is an example of that. We also have variants that cause superior health,” Elverum said, pointing to how a 90-year-old smoker may never develop heart disease.
Cambridge, Mass.-based Airna emerged from stealth in September 2023 with $30 million in initial financing led by Arch Venture Partners. Its RNA editing platform grew out of research by cofounders from Germany’s University of Tubingen and Stanford. The lab of Thorsten Stafforst, a University of Tubingen professor and cofounder of Airna, “has delivered most of the key breakthroughs in this space,” Elverum said.
Elverum, who worked at Novartis earlier in his career, was most recently CEO of biotech Diagon Therapeutics, joined Airna following Arch Ventures’ investment. Airna has now raised a total of $245 million. Elverum declined to disclose the company’s current valuation; VC database PitchBook pegged its valuation at $145 million before the current investment.
WHAT WE’RE READING
The Trump Administration’s attacks on mRNA vaccines threaten both a potentially $70 billion industry–and American biotech dominance as a whole.
Rural Americans risk a surge in tooth decay due to the increased anti-fluoride movement and a lack of dentists. Last week, Utah became the first state to ban the use of fluoride in public water.
Novo Nordisk bets on an early-stage obesity drug from Lexicon Pharmaceuticals with a $75 million upfront payment in a potential $1 billion deal
Ambient AI scribes, which record patient visits and use that to autonomously fill out forms for doctors, improve efficiency and likely reduce physician burnout, but it’s not yet clear if they’re cost-effective, according to a report by the Peterson Health Technology Institute.
Seattle-area hospital Valley Medical Center laid off more than 100 employees, saying that a pause in Medicaid payments is to blame.
A man paralyzed due to spinal cord injury was able to stand on his own again after receiving an injection of reprogrammed stem cells. He was one of four people to receive the experimental therapy, which improved mobility for one other patient but only had a minimal impact on the other two.