The Big Red Biotech Blog

GE Enters Turnkey Bioplant Partnership for Emerging Nations

GE and engineering firm, M+W Group, announced that they will team up on a complete biomanufacturing plant development service to serve the growing global demand in the emerging markets. The partnership will provide a single point of contact for customers, primarily governments, including IP access, financing, plant start-up, construction, and staff training. 

GE wont say if turnkey bioplant partnership will cut prices for emerging nations.

The partnership's goal is (to make money) to aid emerging nations in satisfying their unmet needs for the biological products that are predicted to have major positive health impacts. The regional focus of the partnership will highlight the Middle East, Central and Latin America, and SouthEast Asia. They will also sell to Big Pharma looking to upgrade vaccine manufacturing capabilities in emerging nations.

Posted by Bruce Lehr Dec 19th 2011.

 

Atlas Shire's Up Investors Rare Disease Portfolio

Yesterday, Atlas Ventures announced a new alliance with Shire Pharmaceuticals to explore investment opportunities in early-stage rare disease therapeutics. The partnership leverages Shire’s capabilities and knowledge in the research and development of rare diseases with Atlas’ expertise in the formation and growth of early stage companies. 

The creative alliance structure provides an opportunity early in the venture process to utilize all of Shires capabilities in rare diseases from research to commercialization, while leveraging the extensive Atlas network and experience in company formation. Under the agreement, professionals from both Shire and Atlas will be dedicated to work closely together to advance the collaboration effort.

Financial terms of the deal aren’t being disclosed. But Atlas indicated that Atlas and Shire will seek to create a small portfolio of investments over the years of the partnership. Shire will also get option rights in these deals, through which it will have the opportunity to acquire the companies at a pre-determined price if the startups reach certain scientific goals. 

By structuring the investments to give Shire the option to acquire, the partnership “secures access to these innovations for Shire, while mitigating the downstream liquidity risk for the team and investors." An Atlas spokesman said,  “We are quite excited about how these unique platforms will enable us to further experiment with the early stage venture model.”

See Life Sci VC Blog, Xconomy, and Fierce Biotech.

 

ADC Biotechnolgy Wins Grant for new ADC Production Technology

ADC Bio received a new development grant from the Welsh government for its new antibody drug conjugate manufacturing technology that it hopes will make drug production cheaper.  The new "lock and release" method will minimize production steps and cut costs.

ADC Bio wins development grant for new ADC production tech.

The new technology is performed on a solid support versus current methods done in solution at high dilution. Binding the antibody to a solid support prior to the conjugation step provides some of the following advantages according to ADC Bio:

•  column binding of the antibody followed by conjugation to the cytoxic drug allows all superfluous reactants to be washed away from the immobilized antibody
• structural integrity of the antibody binding activity is maintained
• the antibody is protected throughout the process and can't be lost by leakage providing signficant risk management for pricey material
• reportedly production yields are increased in the new process by minimizing antibody aggregation

ADC Bio expects to begin testing commercial scale production in the next year and a half.  It plans to license the technology to CMOs and drug companies. The prospect of ADC's making a much bigger splash in cancer therapeutics over the next decade bodes well for demand for ADC manufacturing services and technologies.

Posted by Bruce Lehr Dec 13th 2011.

 

Venture Funding Decrease is Big Pharma's Gain

From Fierce Biotech, it seems that big pharma has happily stepped into the funding void created by the collapse of venture funding for biotechs to do more deals earlier and cheaper than before.  Says Dan Zabrowski, head of Roche's drug partnership unit,  "We are doing around 50 to 60 partnership deals a year now, compared to around 30 deals per year before the crisis [of 2008]. Today, we start deals earlier with less upfront payments and share the risk with our partners."

Who says a funding crunch is so bad?  This is not exactly a hardship for big pharma.

Posted by Bruce Lehr Dec 12th 2011.

Drugmakers Go From Abundance To Scarcity

A new report from Oliver Wyman puts numbers to the dismal trend seen in Big Pharma R&D from 2005-2010 as compared to "boom" years of 1996-2004.  The down period was named the "drought" years and some of the more disturbing statistics appear below:

Drugmakers Go From Abundance To Scarcity // Pharmalot.

• R&D spending doubled to an average of $125 billion during the drought period, from $65 billion in better times. And the ROI dropped like a stone to an average of $75 million in sales during a product's fifth year for every $1 billion spent on R&D, down dramatically from $275 million in better days.


• The development drought also led to a declining economic value of approved drugs, to an average $430 million from $515 million. 


• Drug approval itself plunged about 40% in the dry years, amounting to 22 FDA approvals per year on average, versus 36 in the better years.


• Drugs produced an average of $9.4 billion in fifth-year sales in the dry period, half of the $18.3 billion during the more productive years. Fewer blockbusters and fewer new drugs overall contributed.


• In all, 17 of the 20 companies faced productivity declines, though Novo Nordisk, Bristol-Myers Squibb and Johnson & Johnson did better than most.  Dips in high levels of productivity hit everyone though.

What to do about it?

The paper's authors recommend raising standards for product innovation and working more closely with payers as they face pressures to hold down costs. They also want companies to treat new compounds as rare (don't take development success for granted), with focused investments that don't rely as much on speed to market, .i.e. actually create better products and understand more about their mechanism of action in treating disease.

Another recommendation: Play to win. This means using strategies like closely assessing the competition (to create novel products), seeking alternative financing and joint R&D efforts with other parties (including rival drug makers), and making everyone focus more on business development. (See Fierce Biotech).

Posted by Bruce Lehr Dec 4th 2011.

 

The 2011 Biotech Graveyard

 

 

 

 

Fierce Biotech published its 3rd annual recount of the Biotech Graveyard.  In 2011, we lost another 8 companies to the vaguaries of drug discovery and financing in the biotech world. The companies who met their demise are as follows:

• Advanced Life Sciences
• Altair Therapeutics
• Ambrilla Biopharma
• ARYx Therapeutics
• Peptimmune
• Phoenomix Corporation
• Tolerx
• Transdel

Many of these were effectively one-trick ponies whose drugs failed to show efficacy in the clinic.  In many cases, the companies also lost the backing of a big pharma partner to continue paying the bills required to bring a therapy fully to market. Of course, the capital markets don't offer an alternative source of funding to companies of this ilk at this juncture.  Result?  Liquidation of assets if any.

Posted by Bruce Lehr Oct 31st 2011.

FDA Pledges to Speed Up New Drug Regulatory Process

You've heard it. The FDA is slowing down the introduction of new drugs through an overly cumbersome regulatory process -- or so charge the critics. 

In a most recent example, the New Venture Capital Association cited a new survey that indicated that 39% of its members had decreased investment in the life sciences.  Another 39% of VC groups plan to do so over the next few years which could result in a decrease of more than $500 M in venture capital aimed at biotech.    The decrease they say is due to the unpredictability of the FDA regulatory approval process -- that results in delays and cost increases to the introduction of new drugs and lessens the ROI that can be achieved by VC groups. One third of the VCs surveyed say they will increase their investments in Europe, with 44% planning to spread their wings in Asia and only 13% planning to get more ambitious in North America. 

In response, the FDA pledges to speed up the process -- particularly for new drugs targeted at serious unmet needs.  Thes drugs will receive an "expedited drug development path".  The new path will be overseen by a new deputy commissioner who will govern the regulatory process for biologics and cell based medicines. Personalized medicines will receive top priority under the new plan.

"The Obama Administration is committed to encouraging the entrepreneurs and businesses that are hmodernizing and strengthening our health care system," said HHS Secretary Kathleen Sebelius.

 

 

 

 

Posted by Bruce Lehr Oct 8th 2011.

Boehringer Latest Big Pharma to Create Biosimilars Group

The US FDA may not have published its guidelines yet (though we're told they're coming soon) as to how biosimilars will be approved, but big companies continue to step into the fray to get ready. Boehringer Ingelheim is the latest to announce that it is creating a biosimilars division to get in on the expected action.

Boehringer to create biosimilars division | InPharm.

BI Director Wolfram Carius said "We feel confident that we are able to leverage our capabilities in product development, supply and clinical expertise at Boehringer Ingelheim to offer high quality biosimilars understanding patients' needs."

In addition to traditional big biosimilars' players like Teva, Sandoz and Hospira - now we have companies like Merck with its Merck BioVentures group, Pfizer and BI joining the party.  Even though biosimilars are supposed to save the health care system on costs, the FDA is expected to require a fair amount of animal and human data to show comparability to the licensed reference product.  Thus chasing biosimilars will likely be a game for the rich companies in the US -- at least at the beginning. See Fierce Biotech too.

 

Posted by Bruce Lehr Sep 27th 2011.

Market Reacts to RXi Split Up

As reported in Xconomy and Fierce Biotech this morning, RXi Pharmaceuticals plans to split in two parts -- Galena BioPharma that will focus on creating cancer vaccines and RXi Pharmaceuticals that will continue to try to develop RNAi based drugs. The move was spurred by investors who wanted to see the combined RXi offer its shareholders a quicker return.

Galena will focus on the continued development and commercialization of its lead product NeuVax (E75) for breast cancer, and its newly acquired Folate Binding Protein-E39 for ovarian and endometrial tumors.  The latter is headed toward Phase I trials by the end of 2011.

RXi for its part will continue its focus on RNAi drugs -- its lead candidate being RXi-109 for the treatment of scarring and fibrosis. It will also work on the therapeutic value of gene silencing more broadly -- and is still seeking partners. Investors were thrilled and showed it by driving RXi stock down 25%. 

 

 

 

 

Posted by Bruce Lehr Sep 26th 2011.

Big Pharma Betting Big on Research in China

Just the latest article detailing Big Pharma's move to invest more in research and development capability in China -- not only to cut costs but to acquire a foot hold in what is expected to become the world's largest pharma market in as little as 15 years -- fueled by such factors as 100's of billions in investment in infrastructure by the Chinese goverment, the rise of the middle class and an expected explosion in the numbers of diabetics (thank you Western diet).

Betting big on research in China | InPharm.

Companies that have made significant investments in R&D facilities in China include: Novartis ($1 B), AstraZeneca ($100 M), Novo Nordisk ($100 M), and GSK ($40 M).  These companies are far from alone in their commitments to China-based R&D - many others, including Genzyme, Sanofi, Johnson & Johnson, Merck-Serono and Boehringer-Ingelheim, have also established (or plan to establish) R&D bases in mainland China, often at the expense of their Western facilities. Many see the East as integral to any long-term business plan.

As Patrick Keohane, head of R&D, Asia Pacific and Japan at Astrazeneca, puts it: “Asia should now be at the centre of any significant company’s clinical development strategy.”

Don't look back Big Red is gaining on US.

 

 

Posted by Bruce Lehr Sep 15th 2011.

 

Termeer Spends some of his Sanofi Cash on Personalized Medicine

The grass is not growing around Henri Termeer's ankles.  The former CEO of Genzyme donated $10 M to Mass General Hospital to found a new center called the Henri and Belinda Termeer Center for Targeted Therapies.  The new center will work to advance new drugs that target tumors defined by a specific genetic profile shared by niche patient populations.  See Fierce Biotech and Xconomy. 

Said Termeer, "I hope this will help Massachuesetts be recognized globally as the knowledge center in targeted medicines.  This is a global effort, but Massachuesetts has the responsibility to lead, to use the talents and capabilities it has built over many years."

So in one grand gesture, Termeer has backed an important growth area in cancer treatment.  Targeted therapies coupled with companion diagnostic tests are clearly a major trend that the pharma companies are workign on and which is also supported philosophically by the regulatory bodies. And, Termeer has founded the new effort in his home ground territory in Massachuesetts which no doubt will lose some jobs due to Sanofi purchase of Genzyme but now will gain some momentum to build in another key area of medicine. 

Posted by Bruce Lehr Sep 13th 2011.

Incredible Shrinking BioPharm

More good analysis from Bruce Booth of the Life Sci VC blog. This time he shows us that the the number of pharmaceutical and biopharm companies with a market cap over $50 M has shrunk from 329 in 2005 to only 240 today.  That's a 27% reduction in only 5 years.  Ouch!

Booth goes through all the numbers accounting for attrition and addition of companies during that interval.  Many companies of course merged, were acquired, shutdown -- in fact 40% of the original 329 (or 129) shared in that fate. Another 64 shrunk below the $50 M cap size -- resulting in only 136 surviving from the original cohort.

Booth says that drivers for shrinkage (no, not cold pool water ala George Costanza), are not enough companies maturing into public companies, not enough new ones getting started and too many disappearing in mergers. It appears that the best companies get acquired and the rest have trouble gettign any funding as VC pools (cold shoulder not water) have dried up in this sector. 

How do we fix?  We need access to public market sources of low cost capital to fuel long term growth in this sector.  Otherwise, we will likely see movement toward more attractive funding environments in the East. 

Posted by Bruce Lehr Sep 9th 2011.

 

India Biotech Grows 25%

Ernst & Young published its 25th annual report - Beyond borders: Global biotechnology report - 2011.  in it, E&Y cited India's biotech as hitting $4 B in 2010 compared to about $3 B in 2009.  Vaccines, diagnostics and devices and personalized medicine were seen as the innovative growth areas. But, while the overall industry grew, most of that growth came from large firms while small firms fell back and continued to struggle to get investor funding.

"The domestic biotech firms wil need to adapt creatively to this environment by doing more with the funding that is available [ed. Pull on those bootstraps!] and by working from the earliest stages of development to demonstrate the potential value of their products to investors, payers and regulators, " said Ajit Mahadevan E&Y partner.  See Fierce Biotech.

Sounds like some small guys will fail or be snapped up by the larger guys for a pittance as the industry goes through a shakeout of the weaker players.

Posted by Bruce Lehr Aug 30th 2011.

China Ex-Pats Go Home to "Achieve Something" in Biotech

 
The Chinese government has made it well known by now that it wants to be a bigger player in biotech by announcing it will invest more than $300 billion in the next 5 years.  That kind of bait is drawing ex-Pats back to China from US biotechs to start up new biotechs or join other start ups. 

Says Xe Xin, a relocating researcher, "Though we were well paid at American companies, we wanted  to be more than just employees.  We are in our mid-30's and wanted to return home and make things happen."

We can expect this trend to continue as many well educated and well trained Chinese return to their homeland to exercise their entrepreneurial spirit in a land of heightened opportunity fueled by generous government investment and tax policies. 

The US government should take note and work with the groups like BIO to ensure we maintain policies and investment levels in US biotech to keep it at its current front-runner position in the World.  But don't look back as China may be gaining on us.  See Fierce Biotech.

 
Posted by Bruce Lehr Aug 19th 2011.

Beware "The Dendreon Effect"

Dendreon has its own Effect named after it, now that it told the Street it would miss all its revenue targets in 2011.  And not unlike meteorologist Edward Lorenz's Butterflies, its admission has had far reaching ramifications on biotech stocks according to MarketWatch's Val Kennedy. 

Kennedy claims Dendreon's effect has been to scare investors in biotech generally and more particularly scare the beejeeus out of investors in biotechs who are in the process of launching new therapies -- including those backing (more like back-tracking) Human Genome Sciences, Intermune, and Savient.  Even Vertex's seemingly successful launch of Incivek for hepatitis C has not been immune from the dreaded Dendreon Effect.

"Pretty much every company that had just launched a product or was about to launch a product got crushed," said Leerink analyst Howard Liang.  See Fierce Biotech.

 

Posted by Bruce Lehr Aug 19th 2011.

 

Icahn Exits Biotech?

I saw this short piece in In the Pipeline this morning, Derek Lowe noted that Carl Icahn apparently has liquidated his positions in Biogen (shed 8 million shares since June), has no holdings in Amgen and nothing in Regeneron. He appears to have left the building. Derek comments, he must be "finding no positions worth taking" and that probably isn't a good thing either.

To paraphrase, "Old Biotech investors never die they just fade away." And if you read Fierce Biotech this morning too let's hope the industry isn't fading towards China in the future.

Posted by Bruce Lehr Aug 16th 2011.

Biotech Industry: "Don't Confuse Us with Dendreon"

Dendreon has lost almost $3 billion in market capitalization this past week on the heels of its quarterly earnings announcment that it had missed its sales forecast on Provenge, that is was withdrawing its forecast for the next two quarters, that it was not issuing any further sales guidance for 2011, that community oncologists were not prescribing as often as expected due to reimbursement fears, that it had to educate these same oncologists on Medicare's reimbursement procedures and that the Sun was in their eyes and the Dog ate their homework.

As Xconomy's Luke Timmerman points out in his piece today, much of this should have been under more direct control even with blinding Sun or rabid Dogs circling about.  It seems that Dendreon dropped the ball in its relationship with 3rd party payers and educating its physician-user community.  Now, they will have to pick themsleves up, dust off, and go  back to it -- but not before they pay a healthy penalty in short-term stock valuation and not before they seem to have started a run down in other Biotech stocks. 

The point of Timmerman's article is that Dendreon's challenges are Dendreon's and not of the industry as a whole.  You only need to look at the successful launch of Incivek by Vertex to be so convinced.  Of course, it doesn't hurt when your product also shows such obvious patient benefit and advancement to the practice of medicine in your chosen therapeutic category.

 

Posted by Bruce Lehr Aug 8th 2011.

 

 

 

 

Pharma R&D Spending May Be Down But Amgen's Is Up 26%!

Many of my posts today have been about pharma and biotech firms cutting back on their R&D expenditures as a way of changing the way they do business and managing profitability in the wake of flagging pipelines. What if your pipeline is in healthier condition?  What then?

Well Amgen's answer is increase spending by 26%.  Why?  It now has 10 programs in phase III development and the big biotech is pushing to get them to market. Key targets include the cancer drug ganitumab and AMG 386, according to their website. 

Of course, strong top line sales growth didn't hurt at all -- with Prolia and Xgeva (both denosumab) growng strong, joined by increased sales of Neulasta, Neupogen and Enbrel -- overall sales were up 4.1% to 3.96 billion for the quarter. See LA Times and Fierce Biotech. 

 

Posted by Bruce Lehr July 29th 2011.

Pipelines Emptying, Costs Rising, What's Big Pharma To Do?

From the Pharmalot blog yesterday, Big Pharma is facing the dual problem of emptying pipelines and rising costs for developing new drugs - largely from increasing costs of doing trials. Why? There is increasing competition for trial sites and clinical research organizations that can yield reliable, high quality data, according to a recent survey of 21 drugmakers, 12 biotechs, nine device makers and 23 contract research organizations.

Those surveyed pointed to higher costs for enrolling patients, higher vendor fees and expenses for recruiting trial sites, and technology costs.   Staffing for drug development is also rising.  Phase IV staffing increased by 85 percent from 2008 to 2011, while Phase IIIa doubled. Phase IIIb staffing rose 57 percent, Phase II staffing jumped 106 percent and Phase I staffing spiked 108 percent. 

Average per-patient trial costs across all therapeutic areas, in Phase I, costs rose from $15,023 in 2008 to $21,883 in 2011. In Phase II, the cost rose from $21,009 to $36,070. In Phase IIIa, the cost increased from $25,280 to $47,523 and in Phase IIIb, cost jumped from $25,707 to $47,095. Finally, Phase IV expenses rose from $13,011 to $17.042.

“Everybody is working hard to control those costs. The biggest thing on the horizon is trying to get a handle on earlier go-no-go decisions,” Cutting Edge chief operating officer Adam Bianchi tells us. “The competition for quality sites is creating a lot of headaches. You have a greater number of sites worldwide than ever before, but not all are yielding quality data that companies want.

So we not only can't find enough new drugs, but we are also having trouble finding quality sites to cost-effectively test them.  More cheery news from the drug development front.

Posted by Bruce Lehr July 28th 2011.

 

What have you done for me lately Seattle Genetics?

Yesterday, FDA advisory panels recommended that Seattle Genetics new "empowered antibody" drug called Adcentris (brentuximab vedotin) receive accelerated approval from the agency in late August for the treatment of Hodgkin's patients (non-responsive to chemo) and patients with anaplastic large cell lymphoma (ALCL) who've relapsed.  Pretty good stuff, huh?

Today, investors thus far have rewarded the company by driving down its stock price 5.7% from $20.33 to $19.17 in premarket trading.  Wow. What have you done for me lately? See Forbes.

 

Posted by Bruce Lehr July 15th 2011.

Pfizer Will Focus Business Unit Divestiture Proceeds on Top Pipeline Drugs

Pfizer CEO Ian Read says proceeds from the sale of the animal health and nutrional business units will be reinvested in stock buy backs and to advance its top 3 drug candidates in its pipeline.  Analysts seemed to be buoyed by the news that management will focus resources on the pipeline and core business as it promised.  The sales of the two units could bring as much as $22 billion. 

The 3 drugs - crizotinib for lung cancer, blood-thinner apixaban, and tofacitinib for rheumatoid arthritis - could add as much as $3 billion to revenues in the next 4 years to help offset some of the ill-effects when Lipitor reaches its patent expiration date later this year. See PharmaGossip and Fierce Biotech.

Posted by Bruce Lehr July 8th 2011.

 

Insightful or Self-serving Commentary on Deal-making from BIO?

Fierce Biotech quotes spokesmen from GSK, AstraZeneca, Merck and Roche -- who were participating in a BIO panel discussion on deal-making between Big Pharma and Biotechs.  Here's some of the choicer tidbits from the panel:

• The industry is focusing first on the best science when looking for deals
• There's a delicate balance between internal R&D efforts and the need for biotech deals
• Small biotech's main priority when looking for deals shouldn't be the biggest financial reward
• We're all trying to turn opportunities around in a much more thoughtful way
• The most important currency Big Pharma can bring to the deal is its R&D know-how
• Once a biotech has Phase I data, it's time to look for partnerships
• Before Phase I it is difficult to make any financial valuation

Hmmm!  Let's see.  We aren't satisfied with our internal R&D efforts but the biggest currency we can lend to the deal is R&D expertise.  We're looking for the best science -- so when you get yours to Phase I (not preclinical science apparently as we can't value it) bring it to us and don't look for the best price you can get. We'll take it from there with our superior science.

I get it. NOT!

Posted by Bruce Lehr June 30th 2011.

 

 

 

 

China to Spend $308 Billion to become Biotech Player

China plans to flex some financial muscle by investing $308 billion in governement funds between now and 2015 to generate 1 MILLION new biotech jobs.  The ambitious program is part of the 12th Five-Year Plan (2011-2015).  In the healthcare arena, the broad goal is to add one extra year of life expectancy and a lower infant mortality rate.

The government plans to make biotechnology into an "economic pillar".  It will reserve 20 billion yuan for new drug development and control of disease in the process. Don't look back US, somebody may be gaining on us!  Better get the biotech investment bill moving here too. See Fierce Biotech.

Posted by Bruce Lehr June 28th 2011.

Is Pharma Dealmaking Becoming More Difficult?

Yes it is.  No it isn't.  Depends upon whom you ask and when.

In a survey of 18- business development executives considering deals from 2006 through 2010, the responses were remarkably split I thought. The majority of biotech respondents (36%) said they could drive terms with pharma (though you can see 64% thought they were on equal footing or were more takers than givers of terms).

So we turn over to pharma.  well, 44% of pharma respondents (again the majority) said their negotiating power had increased with biotechs.

Is Pharma Dealmaking Becoming More Difficult? // Pharmalot.

What about upfront payments?  Biotechs (55%) said they had dropped - though 31% reported an increase. Flip sides of the coin to pharma, and 51% saw an increase with only 32% seeing a drop.  We in the same deals?  A more objective third party analysis of the reported deals shows about a 5% decrease in the upfront value for the 2006-2010 time period.

Average deal volumes and payments seemed to be pretty steady over the period.  Any loss of leverage pharma experienced due to dwindling pipelines and perhaps some desparation to license short-term revenues seems to have been counterbalanced by a bad funding-environment for the biotechs.  Status Quo.

Posted by Bruce Lehr June 16th 2011.

 

 

PATH and GSK Team Up on Malaria

PATH, the non-profit group working to develop vaccines for developing countries, scored again with an announced collaboration with GSK for a vaccine against Malaria. The second generatin vaccine with combine a single dose vaccine from J&J's Crucell followed by two doses of GSK's RTS,S vaccine.  This is known as a 'prime-boost' strategy. See Xconomy.

Previously I've written about PATH's success in developing a meningitis vaccine and its subsequent deployment in African populations with the funding assistance of GAVI.  Now PATH is -- dare I say it -- moving down the path to attack malaria.

 
Posted by Bruce Lehr June 7th 2011.