Episode 173 - February 20, 2026

What It Covers

Biotech Hangout Episode 173 covers China's record-breaking out-licensing deal surge, FDA instability under Marty Makary and Vinay Prasad including the Moderna vaccine reversal, XBI market sentiment, Keytruda patent protection extending to 2033, and positive phase three data from Compass Pathways in treatment-resistant depression.

Key Questions Answered

• •China out-licensing acceleration: China out-licensing deals hit $137.7B in 2025 across 186 transactions, with Novartis, Merck, and GSK among the largest participants. In early 2026 alone, 38 deals totaling $1.3B have closed, with deal sizes up 76% and upfront fees doubled year-over-year. Pharma scouts should expect premium pricing, not arbitrage opportunities, going forward.
• •FDA regulatory instability risk management: Nine companies reported FDA reversals after receiving prior alignment on trial designs, with Vinay Prasad reportedly involved in at least six. Investors and executives should avoid building probability-of-success models contingent on current FDA flexibility policies, as leadership continuity over a four-to-five-year drug development timeline cannot be assumed under present conditions.
• •Keytruda patent runway to 2033: Bloomberg Intelligence patent attorneys, who accurately predicted Humira's 2023 expiry years in advance, now project Keytruda protection through 2033, with formulation patents potentially extending to 2039. This flattens Merck's revenue cliff, preserves capital for M&A, and delays biosimilar competition — with meaningful downstream effects on IO combination trial costs.
• •Single-trial FDA approval pathway: Marty Makary and Vinay Prasad co-authored a New England Journal editorial formalizing one pivotal trial as the FDA's default approval standard, citing existing statutory authority and oncology precedent. Companies should monitor whether regulatory actions align with this stated policy before restructuring development programs around single-trial designs, as implementation remains unproven.
• •Psychedelic therapeutics commercial viability: Compass Pathways reported positive phase three results for COM360 psilocybin in treatment-resistant depression across two trials, with durable response data and manageable safety signals. J&J's Spravato generating approximately $2B annually despite a two-hour in-office dosing requirement signals commercial precedent for psilocybin, which offers longer dose spacing and stronger durability advantages.