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Investing in Stability: Q&A With James Sapirstein, CEO of First Wave BioPharma


Sapirstein discusses the current conditions that are impacting investors’ view of the life sciences industry.

James Saperstein

James Sapirstein
First Wave Bio Pharma

James Sapirstein, CEO of First Wave BioPharma, recently spoke with Pharmaceutical Executive about the state of the industry from the perspective of investors. According to him, uncertainty around certain economic and political conditions is causing concern from the investor community.

Pharmaceutical Executive: Can you describe the state of the industry from the perspective of an emerging biotech?
James Sapirstein: Well, the state of the industry has been in a really tough spot for the past two years. We’re a capital-intensive industry. Investors are afraid of dilution all the time. However, we are also a cash incentive type of business, and while there’s a lot of capital out there and the stock market has done well in the past year, a lot of investors are putting their hands in their pockets and not spending. The reason being is that while biotech is a good bet, based on what’s going on with things like the Inflation Reduction Act (IRA) and other environmental elements, they’re not sure that the returns will be as strong in past years.

PE: Do you think that things will stabilize later in the year?
Sapirstein: I do. I’m on the board of BIO, which represents the entire biotech industry. We hear things because part of our job is to lobby. We’re confident that the R&D tax credit will return, for example. Also, the IRA is being negotiated, so certain aspects of price control are still being negotiated. Big pharma is stepping up in order to do that.

The big problem for biotech investors, or any investors, is uncertainty. When there’s a big bill out there with a lot of uncertainty, investments slow. As details are starting to come out, the industry itself was able to win a few victories in the IRA. For example, there was patent issue concerning small molecules versus large molecules. It had small molecules down to seven years, which was hurting investments. That’s being negotiated.

As that becomes more defined and people understand where the playing ground will be, that will help with investments this year, for sure.

PE: Does the fact this year is an election year impact the uncertainty
Sapirstein: No. What’s great about election years is that party that’s in power isn’t going to do anything crazy because they don’t want to lose independent voters. Likewise, the party that isn’t in power isn’t going to do anything crazy because they also don’t want to lose independent voters. That gives the centrists in the government the power to go forward and do their thing, which is what’s happening right now.

PE: Can you describe your pipeline?
Sapirstein: We’re working on a merger, so I can’t say too much about anything that isn’t our product yet. What I can say is that it’s ready to go to phase III, it’s a celiac drug, and it’s already been publicly announced that we have a strategic partner on the line who has agreed to license the product.

Our second product is a gastroparesis treatment, which is mostly seen in obese people and diabetics. What’s interesting about this condition is that it’s becoming one of the leading side effects in weight loss drugs like Ozempic. We have a deal with Sanofi, who have the right of first refusal. We intend to go into phase II mid-year next year.

Our third product is a pancreatic enzyme insufficiency product has had five studies, four of them in phase II. It’s mostly for cystic fibrosis patients. People often think that these patients only have issues with lungs due to not being able to secrete the proper mucus, but they also suffer from a lot of GI issues.