LifeScienceTrends 2011

Transcription

Life Science Trends 2011
Alexander, D., Pucci, A., Smith, M., Bloomfield, K.
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Carlyle & Conlan © Copyright (1-22) All Rights Reserved
Table of Contents
Introduction ……………………………………………………………………………………………….………..…Page 3
About the Authors ………………………………………………………………………………………………......Page 4
Research and Innovation ……………………………………………………………………………………….Pages 5-7
miRNA
Page 5
Scientists Slay Superbugs…With Light
Page 5
New Drug Produces Steep Drops in Bad Cholesterol
Page 6
Top 5 Game-Changing Drug Delivery Technologies
Page 6
Nanomedicine
Page 6
Free DNA Testing for Everyone?
Page 7
Liquid Biopsy
Page 7
Advances in Regenerative Medicine
Page 7
Fundamental Trends…………………………………………………………………………………………..…Pages 8–11
Outlook for Biopharma Industry Optimistic
Page 8
Targeted Therapies for Genetic Disorders
Page 8
Global Health Spotlight Turns to Chronic Disease
Page 8
Genomic Era Medicine is back “In Vogue”
Page 9
Increased Biologics Market Share
Page 9
Massive Growth in Indian Markets
Page 10
Alliance Management
Page 10
Focus on Early-Phase Development to Decrease the Failure Rate
Page 10
On Clean-Tech/Biotech Trends in 2011
Page 11
Return to Innovative Platform Technologies
Page 11
Technology as a Game Changer
Page 11
Investing and Deal-Making ……………………………………………………………………………………Pages 12–14
Venture Capital Outlook in 2011
Page 12
Venture Funding
Page 12
Is Together Better?
Page 13
Companies with the Biggest Cash Reserves
Page 13
Possible Future Mergers and Acquisitions
Page 14
Patent Expirations on the Horizon
Page 14
Biotech Industry Cautiously Brings IPOs Back
Page 14
Regulatory and Government ………………………………………………………………………………….Pages 15–18
Qualifying Drug-Development Tools: the FDA Weighs In
Page 15
The FDA Encourages Companies to Combine Efforts and Drugs
Page 15
Biosimilars in 2011: Pathway to the Future or Road to Nowhere?
Page 15
What Impact Will the US Mid-Term Elections Have on Big Pharma
Page 16
Impact of Health Care Reform Package Less Severe than Feared
Page 16
New Drug Approvals Slipped in 2010
Page 17
Drugs Restricted & Pulled off the Market
Page 17
Drug and Device Safety
Page 17
The 510(k) Process
Page 18
Innovation Pathway
Page 18
Health Care …………………………………………………………………………………………………….…….Pages 19–20
Extreme Makeover for Health Care in 2011?
Page 19
Health Care Trends for 2011: Outlook Brighter Despite Reform Hurdles
Page 19
Comparative Effectiveness
Page 20
E&Y: Moving Forward Companies Speak Out on Health Care Reform
Page 20
Social Media
Page 20
Pfizer Establishes CTI: An Interview with Dr. Anthony Coyle …………………….…………..…Pages 21-22
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Introduction
About this Report
Each year, Carlyle & Conlan provides an overview of trends and innovations in the life science
industry, encompassing its drugs, biologics, devices and diagnostics sectors. Utilizing a
number of in-depth, premium research reports available in the industry, Carlyle & Conlan’s
Life Science Trends summarizes and presents a variety of the most up-to-date industry news
under several macro headers: Research and Innovation, Fundamental Trends, Investing and
Deal Making, Regulatory & Government, and Health Care. The result is a meaningful,
“quick-read” newsletter into which our clients, partners and constituents can dig deeper based
on their individual interests.
Life Science Trends 2011 captures significant advances in the industry from the past year and
makes observations about developments of interest through the year ahead. Of central
importance is the understanding that trends do not necessarily change on a yearly basis. For
instance, the field of personalized medicine is expected to continue as a trend well into the
foreseeable future.
Our report may differ from others in that an early version is sent to CEOs, venture capitalists,
and other industry experts for review before its final release. This report was created using
both primary and secondary data. Secondary data is highlighted with associated links to
further information, as available in the public domain or credited to the appropriate source.
We invite you to review the information contained in this report, which we trust you will find
interesting and relevant to the sector.
About Carlyle & Conlan
Carlyle & Conlan, headquartered in the Research Triangle Park, is an executive and
professional search firm focused on the technology and life science sectors. With a highly
dedicated, experienced, and professional team of specialists, we work with small, mid-sized
and large companies to secure their most important asset, human capital. Our placement
focus is on highly experienced individual contributors through C-level search in a variety of
functional position types throughout North America. More information about Carlyle &
Conlan can be found at: http://www.ccesearch.com.
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About the Authors
Anastasia Pucci, Senior Partner
Anastasia is a founding partner of Carlyle & Conlan and currently serves as Carlyle & Conlan’s Senior
Partner. Anastasia has fourteen years of experience in Executive Search and Recruitment, with
special emphasis on Clinical Development in the field of Life Sciences.
Anastasia began her career in Canada, working with one of the country’s largest search and
consulting firms. Early in her tenure she was recruited to open the company’s first U.S. office in
Raleigh, NC. For four and a half years, Anastasia was instrumental in growing their local office into a
multi-million dollar business. Her contributions included building a diverse network of clients from
many major corporations, including Nortel Networks, IBM, and GlaxoSmithKline, to a group of
“skills-on-demand” emerging growth companies. She consistently ranked as the # 1 U.S. Search
Consultant within the firm and Top 5 globally.
Since co-founding Carlyle & Conlan ten years ago, Anastasia has been personally involved in
launching each specialty practice area, recruiting the best and brightest Search Consultants to join
Carlyle & Conlan’s team and continuously developing and enhancing Carlyle & Conlan’s strategic
approach to executive and professional search.
Anastasia is also very active in the local community serving on the Board of the Council for
Entrepreneurial Development, CED’s Executive Committee, and chairing CED’s Human Resources
Committee. In 2008 she was named one of Business Leader’s Movers and Shakers and a Top 25
Human Resources Impact Player.
Anastasia is a graduate of Queens University, Kingston, Ontario, Canada, having spent her formative
years in England and South Africa. Her passions include her family and her business, and her
hobbies include scuba diving and occasional rounds of golf.
Don Alexander, Vice President of Life Sciences Development and Commercialization
With over a decade of executive search industry experience, Don has spent the last several years
focusing on executive search with a concentration on local and national search projects for mid to
senior level professionals in the Life Sciences. His searches have involved senior level individual
contributors through C-level executives, with particular emphasis on sales, business development,
marketing, product development, project management and pre-clinical R&D. In addition, Don has
prior experience recruiting in Technology and Engineering. An enabler of relationships that have
resulted in quantifiable goodwill for his constituency, Don is recognized by his clients, candidates and
peers as routinely creating value through a powerful network and deep industry knowledge.
Throughout his recruiting career, Don has consistently finished in the top quartile of his peer group.
Prior to the recruiting industry, Don spent several years in the financial services industry and
managed several million dollars in assets. He holds the designations of CFP® and AAMS® and a BA
in Business Management and Economics from North Carolina State University.
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Image: yaghi.chem.ucla.edu
Research and Innovation
miRNA
“We are entering the era of RNA therapeutics.
Just as small molecules led to the
pharmaceutical industry in the late 1950s and
1960s, and recombinant DNA technology
formed the biotech industry, followed by the
monoclonal antibodies revolution, we are now
embarking on the era of RNA therapeutics. This
includes siRNAs, antisense, aptamers, and
microRNA therapeutics. Isis will likely file an
NDA in 2011 for Mipomersen, its RNA medicine
for treatment of high cholesterol that will open
the floodgates for several other innovative RNA
drugs in clinical development.”
The total market for RNAi component technologies is
projected to be around $12 billion by 2015 with about
$10.5 billion in therapeutic products. In 2010, Sanofi
Aventis announced a partnership with Regulus
Therapeutics that targets fibrosis with a $10M equity
investment and a potential deal value of $750M.
Although the future of miRNAi technology is appealing,
drug development challenges confronting miRNA
technology include clinical testing and delivery
mechanisms.
Sources: Regulus, Seeking Alpha, San Diego Magazine - Kleanthis
Xanthopoulos, The Crystal Ball
As a single miRNA can regulate entire networks
of genes, these molecules are considered the
master regulators of the genome. By affecting
gene regulation, miRNAs have been shown to
play an integral role in most biological processes
including the immune response, cell-cycle
control, metabolism, viral replication, stem cell
differentiation and human development.
Most miRNAs are conserved across multiple
species indicating the evolutionary importance
of these molecules as modulators of critical
biological pathways. Aberrant expression of
miRNAs has been implicated in many disease
states, including cancer, heart failure and viral
infections.
Source: Regulus
One of the more exciting scientific discoveries in
the last decade is the discovery of microRNA in
humans. MicroRNAs (miRNAs) are short
ribonucleic acid (RNA) molecules, on average
only 22 nucleotides long, that do not encode
proteins but, instead, regulate gene expression.
miRNAs are post-transcriptional regulators that
bind to complementary sequences on target
messenger RNA transcripts (mRNAs), usually
resulting in translational repression and gene
silencing. The human genome may encode over
1000 miRNAs of which around 700 miRNAs
have been identified. More than one-third of all
human genes are believed to be regulated by
miRNAs.
Scientists Slay Superbugs…With Light
Scientists have shed light on a new way to kill hospital
superbugs like MRSA: literally shed light on them. A set of
wavelengths called HINS-light acts by stimulating molecules
in the bacteria, causing them to create chemicals that kill the
germs. In trials, the process appears far more effective than
“cleaning and disinfection,” the Daily Mail reports.
“The technology kills pathogens but is harmless to patients
and staff, which means for the first time, hospitals can
continuously disinfect wards and isolation rooms,” said an
expert. The system uses violet-colored light, but researchers
have also developed a white version appropriate for hospitals.
Scientists call the idea, developed by Glasgow researchers, a
“huge step forward.”
Source: Newser
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New Drug Produces Steep Drop in Bad
Cholesterol
Top 5 Game-Changing Drug Delivery
Technologies
An experimental drug boosted good cholesterol
so high and dropped bad cholesterol so low in a
study that doctors renewed hopes for an entirely
new way of preventing heart attacks and strokes.
Dr. Christopher Cannon of Brigham and
Women's Hospital in Boston led the study of the
novel drug for Merck & Co.
It is not enough to invent a potential new miracle drug. If
there is no efficient way to get the therapeutic to exactly
where it is needed, without harming healthy cells, then the
drug is no "miracle" at all. If the drug produces so many
unpleasant side effects that patient compliance becomes an
issue, development is far from over. This remains true not
only with drugs that are in development, but even those that
are already on the market.
The drug, anacetrapib, will not be on the market
anytime soon. It needs more testing to see if its
dramatic effects on cholesterol will translate into
fewer heart attacks, strokes and deaths. Merck
announced a 30,000-patient study to answer
that question.
Anacetrapib would be the first drug of its kind.
It helps keep fat particles attached to HDL,
which carries them in the bloodstream to the
liver to be disposed of. Merck says it is way too
soon to estimate how much the drug would cost,
but analysts say such a medication could mean
billions for its maker.
The Merck-sponsored study tested anacetrapib
in 1,623 people already taking statins because
they are at higher-than-usual risk of a heart
attack. An LDL of 100 to 129 is considered good
for healthy people, but patients like these should
aim for under 100 or even under 70, guidelines
say. For HDL, 40 to 59 is acceptable.
After six months in the study, LDL scores fell
from 81 to 45 in those on anacetrapib, and from
82 to 77 in those given dummy pills. HDL rose
from 41 to a whopping 101 in the drug group,
and from 40 to 46 in those on dummy pills.
Such large changes have never been seen before,
doctors say, and these improvements persisted
for at least another year that the study went on.
What new delivery methods bring to the table are not only
unique ways to continue innovating even after the therapeutic
goes off patent, but the ability to give relief to patients who
may be suffering from drug side effects.
Drug delivery is about finding new materials that can make
the journey without interfering with the drug. One of the
major problems facing the pharmaceutical industry today is
the poor solubility of drugs. So, drugmakers tack on
compounds to make it more soluble. Unfortunately, patients
read about the side-effects of those soluble compounds in the
"fine print" that drug companies are forced to include in their
commercials. The challenge is to find materials that make
those side effects disappear.
The drug delivery industry is not only alive and well, but
could be booming in the near future. The top five
technologies catching drug makers' attention are.
1. Oral thin films
2. Microneedles 
3. Extended release for
addiction
4. Aerosol
5. Liposomes
Source: Fierce Drug Delivery
The Merck study was too small to tell whether
anacetrapib lowered deaths, heart attacks or
other heart problems. But the trend was in the
right direction, with fewer of those cases among
patients on the drug. The anacetrapib group also
needed significantly fewer procedures to fix
clogged arteries. Importantly, there were no
signs of the blood pressure problems that led
Pfizer Inc. to walk away from an $800 million
investment in torcetrapib, a similar drug it was
developing four years ago.
Nanomedicine incorporates platform technologies
for gene therapy, molecular imaging, drug delivery, and
access to or mediation of groups of molecules or single
molecules. In contrast to atoms and macroscopic
materials, nano materials have a higher ratio of surface
area to volume as well as tunable optical, electronic,
magnetic, and biological properties. They can be
engineered to have different sizes, shapes, structures
and chemical compositions and surface characteristics.
The advantages of nano materials are being
incorporated into new technologies such as drug
delivery vehicles, contrast agents, and diagnostic
devices. Some of these new technologies are currently
undergoing clinical trials or have been approved by the
FDA human use. The cancer therapy applications of
Nanomedicine are particularly enticing. They include
increased ability to audit the presence of cancer cells in
a patient's blood, as well as techniques for thermal
ablation of solid tumors and delivery of
chemotherapeutic agents with extreme precision.
Source: Aol News
Sources: NEJM and FAQ Archives
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Free DNA Testing for Everyone?
Over the past 12 months, in scattered cases reported in
top medical journals, doctors have done something
amazing: They have entered a patient's genetic material
into a machine and read out the genetic code embedded
in that person's DNA and come up with medically useful
information.
Reading out a person's genetic code cost $3 billion a
decade ago. Now it can be done for less than $10,000.
With multiple companies racing to create a cheap
solution, it could be a commodity in a decade. The
impact, not only for medicine but also for engineering
and chemistry, will be huge.
Liquid Biopsy
Johnson & Johnson and Mass General Hospital recently
announced a microchip based blood test that can identify a
single cancer cell within a given sample. While the
research is still in its early stages, there is great excitement
around the ability to isolate specific cancer cells, determine
genetic composition and, then, leverage this knowledge to
personalize patient monitoring and target specific
therapies. The diagnostic might allow for both the early
detection of cancer proliferation and greater precision in
the development of new therapeutics.
Source: CNN, USAToday
The price war between Illumina and Life Technologies
would alone drive costs down further, and a slew of new
companies are emerging. Pacific Biosciences, which
uses a powerful laser and optics to sequence in minutes
instead of the days that are currently required, has filed
for a $200 million public offering.
Complete Genomics, which uses a technology that scales
up to be cheap when large volumes of DNA are decoded
at once, has set up a sequencing operation that drug
companies such as Eli Lilly and Pfizer are using.
Complete has filed for an $86 million IPO.
Life Technologies recently spent $375 million to
purchase Ion Torrent, which makes gene sequencers that
have another advantage. Most human genomes are
sequenced on machines that cost $700,000 or more
apiece; the Ion Torrent machine, which uses a
semiconductor process, is likely to cost less than
$100,000 -- cheap enough for a doctor to have one in
the office.
These prices might still sound expensive, but one startup
recently forecast that its technology might sequence a
human genome for $30. Such estimates tend to rise once
investors start sinking in money, but at that price the
information is close to free.
But if the cost of getting DNA code drops precipitously,
what will be the business model of companies that create
new DNA decoding or analyzing technology? Will
patients pay for their sequence? Or will they own a copy
of their code, but need to pay to access the algorithms
that will make sense of it, or link it to new discoveries?
That's the big question for scientists, entrepreneurs and
everyone.
Image Source: MSNBC
Illumina, the market leader in selling DNA-sequencing
machines, will sell consumers their own genetic code for
$9,500, if they might benefit medically from the
discovery. Life Technologies, Illumina's biggest
competitor, has started a network of cancer research
centers on a project to figure out how to use DNA
sequencing in treating patients.
This image shows the uniform blood flow through the
device. The blood test is so sensitive that it can spot a
single cancer cell lurking among a billion healthy ones.
Source: MSNBC
Advances in Regenerative Medicine
Induced Pluripotent Stem Cells (iPSCs) have the ability to
take ordinary human cells and transform them, like
embryonic stem cells, into other cell types found within the
body. A new method to reprogram ordinary human cells
into stem cells, using RNAs, appears safer and more
efficient than current methods involving viral vectors. This
reprogramming can much more readily transform stem
cells into specialized cells to treat disease. The current
approach for making iPSCs is to use viruses to deliver
genes that “reprogram” ordinary human cells into stem
cells. This formula is both inefficient and it poses a risk for
cancer. Moreover, turning IPs cells into different kinds of
cells to combat disease has proven even more challenging.
The lab of Dr. Derrick Rossi, at Children’s Hospital
Boston, reports a new method that might overcome these
obstacles. Instead of genes, it puts mRNAs in the cells that
directly instruct them to make the reprogramming
proteins. Unlike inserted genes, these RNAs have a shorter
shelf life and don’t become part of the cell’s genome so the
risk of cancer should be reduced. In addition, they are up
to 100% more efficient in reprogramming cells.
Sources: Harvard Medical School and YouTube
Source: Forbes
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Image: Harrisonhayes.com
Fundamental Trends
Outlook for Biopharma Industry Optimistic
Although 2010 was a better year for the
biopharmaceutical industry than 2009, over the past
two years the industry has lost nearly 100 public
companies, and tens of thousands of employees. But
reason for optimism exists:
 There was a year-over-year increase in IPOs, as
well as a steady stream of venture capital
funding.
 Biopharma supported passage of the health
care reform law, which includes a provision for
the creation of a regulatory pathway for
biosimilars and the Therapeutic Discovery
Project Program.
 The FDA concluded its hearings on
AquaBounty Technologies’ biotech salmon
meant for human consumption, which if
approved would be the first food product from a
genetically engineered animal. An FDA analysis
of the product found that it was as safe for
humans and the environment as its natural
counterpart.
 Industrial and environmental biotech
companies are closely watching the legislative
debate surrounding investment for alternative
fuels. Aside from ethanol subsidies, these firms
are hoping for an extension of the
infrastructure credit for alternative fuels and
want Congress to broaden the scope of the
producer’s credit for cellulosic-ethanol to
include algae and other emerging feedstocks.
Source: Biotechnology Industry Organization
“Targeted Therapies for Genetic Disorders.
For years, illnesses such as cystic fibrosis were
treated primarily by symptomatic therapies.
Symptomatic treatments have been responsible for
dramatic increases in survival of affected patients,
but are not disease modifying. Now we appear to be
moving in the direction of therapies that attack
such diseases at their root cause(s). It has been a
long time coming, but it’s apparent that the
distance between the bench and bedside is
shrinking.”
Source: Ken Kramer, The Crystal Ball
Global Health Spotlight Turns to Chronic
Disease
With donor fund levels sinking, multilateral
institutions are finally facing an issue they have
avoided for years: prioritizing time, people and
resources to tackle a few health challenges rather
than many. The UN Millennium Development
Goals are widely viewed as a failure in terms of
creating the necessary framework to define roles
and channel program implementation around
agreed outcomes.
The solution is supposedly to be found in building
a new global, multi-party initiative to treat and
cure non-communicable diseases, which are the
leading cause of mortality and morbidity in most
countries. The UN is hosting a conference on noncommunicable diseases to be attended by heads of
state, finance and health ministers from 190
countries. The extent of industry involvement is
still unclear, but the conference is likely to
represent a lost opportunity for cooperation with
Big Pharma since the developing country bloc is
insisting that the focus of discussion be on access,
technology transfer and IP issues rather than on
science and the development of new treatments.
The impasse is reflective of a much larger problem
affecting the global health community: poor
governance. Recent reports have documented
extensive overlap in activities, the disruptive
impact of a spike in AIDS program funding on
other health care interventions, corruption in the
distribution of resources, and the negative impact
of foreign assistance on development and
economic growth in poor countries.
Look for a slow but growing movement by
outsiders to reform these large institutional
stakeholders – or defund them. NGOs like the
Gates Foundation are already filling the space with
resources that far exceed the pinched coffers of
governments.
Source: Pharmexec.com
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Image Source: NY Times
Genomic Era Medicine is back “In Vogue”
After a decade, the initial excitement generated by the human genome project and subsequent unsatisfactory
results, the promise of actual products attributed to genomic era research is starting to pay off. It is expected that
Benlysta, the first new therapy for Lupus in 50 years, will be approved in 2011. If approved, the therapy may
represent both a big win for patients suffering from this lethal disease and the makers of the therapy, Human
Genome Sciences and GlaxoSmithKline, with sales estimates of between $1.5B and $2B, annually.
According to a recent Quintiles white paper, “As genetic predispositions for disease and drug response are
increasingly identified and validated, and as biomarker development matures, leveraging these technologies
becomes essential. This will enable a more informed approach to compound development and a shift in clinical
development strategy to more aggressive, but ultimately less costly, proof-of-concept evaluation of NME’s and
NBE’s. When applied during earlier phase studies, this paradigm will begin to yield even greater efficiencies and
lower costs throughout the industry.”
Simply put, drug development costs should begin to fall with the coupling of genomic era research and advanced
informatics platforms.
Sources: NY Times and Quintiles
Increased Biologics Market Share.
“With the decline we are seeing in R&D
productivity, and a disproportionally higher
success rate for biological vs. small molecules,
many companies are growing their biologics
capability, either organically or through
acquisition. The increased success rate for
biologics is due in part to their high target
specificity and ability to successfully modulate
targets in areas of high unmet medical need.
Although small molecules continue to be the
majority of new products launched, by 2015 eight
of the top 10 selling drugs will be biologics and the
landscape will become even more interesting with
the launch of biosimilars.
Many of the top biologics are reaching the end of
their patent exclusivity in the next few years, so we
anticipate the future will see many of the large
pharmaceutical companies entering into the generic
biologics market. Mega pharma players, such as
Merck, Pfizer, and Lilly with recombinant facilities
will learn from their generic sector mistakes and be
early participants in the biosimilar space. Targeting
disease categories that require patient support,
physician understanding, and clinical validation and
reimbursement management, they will focus on
therapeutic sectors that play to their structural
strengths. Even minimal competition will reduce cost
for these high-ticket medications by 20% to 25%.
Down the line they will enter the high-risk clinical
effort around biobetters.”
Source: Gil Bashe & -John Arrowsmith, The Crystal Ball
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Alliance Management
Between 2011 and 2016, pharmaceutical global
patents will expire on 18 of the world's 20
biggest medicines, and generics will take over
the past bonanza. Higher R & D costs coupled
with a relatively dry pipeline for new drugs and
the ever-increasing pressure from payers and
providers for reduced health care costs are
putting pressure on the pharmaceutical
companies, big and small, to look beyond
established markets in the US, Europe and
Japan. This means that the center of gravity in
the pharmaceutical industry is shifting to Asia,
particularly to India:
All sizes of biopharm organizations are looking to trim
costs, expand pipelines, execute co-commercialization
alliances and fund ongoing research via transformational
partnerships. According to David Luvison, a professor at
the Keller Graduate School of Management at DeVry
University, companies in the biopharm and other sectors
are “changing the buyer / seller / customer mind set to one
of shared risk and reward”.
Image: koausa.org
Massive Growth in Indian Markets
North American drug sales will grow only
at 1.4 % while Indian drug sales are
projected to rise from $19 billion in 2009
to $50 billion by 2020 – an increase of
163% in 11 years.
India’s large domestic market coupled
with its mature manufacturing prowess in
generics with the most approved GMP
compliant sites outside the US gives it a
big advantage – although outsourcing
Western quality is not an easy feat.
A new Indian patent regime provides
better protection of intellectual property
rights, although some issues remain. It
also means companies need to be more
innovative, rather than relying solely on
reverse engineering existing formulations.
Source: FDA Smart
In a strategic report, “Alliance Culture : It’s in the DNA”,
Luvison and his colleagues research the importance of
alliance cultures and why some companies have more
successful outcomes with alliance management than
others.
“For the larger part of the twentieth century… external
organizations were seen as customers, suppliers, or
competitors, but not as partners. With that also came a set
of norms, values and behaviors that directed managers to
optimize their businesses internally, keep knowledge and
information in-house and see other organizations as
external entities to sell to, buy from, or compete against.
With the change towards the network economy, alliances
have become increasingly important for revenue
generation, innovation and cost management. The network
has become the firm, and this has required a change in
attitudes as well.” The changing nature of the network
means an alliance culture becomes more of a “required
skill” for management, moving forward.
Does an alliance culture lead to success? Statistically
comparisons of companies grouped by success rates < 40%
and success rates > 60% were examined. The results
showed that Norms (e.g. Empathy, Solidarity and Long
Term Commitment) and Partner Focus (e.g. Importance,
Integration and Respect) were much better developed in
the high success group than in the low success group. In
fact, 25% of the difference in success rate between the high
and low performers can be explained by the fact that these
companies have strong alliance norms and a healthy
partner focus.
Source: Interview with David Luvison
Focus on Early-Phase Development to Decrease the Failure Rate
For years pharma companies have treated clinical development much as a venture capitalist would treat investments
in start-ups, betting that one in ten Phase I starts would results in a launch. In order to increase the number of
launches, pharma companies simply invested in more Phase I trials. However, this approach has proven to be a
failure in many ways. As a result, pharma companies are focusing more attention on improving study designs in
early-phase development to increase the chances of success in the latter stages of development.
Additionally, more companies are devoting resources on quality over quantity when it comes to development in the
hopes of significantly improving the odds of delivering drugs that are not only first, but best-in-class. Improved study
designs, including more creative, cutting-edge approaches and adaptive methods for combining protocols over
multiple phases, biomarkers and surrogate endpoints, will become more the norm than the exception.
Moreover, patient stratification strategies and improved translational science should provide pharma companies with
earlier results regarding drug efficacy. These strategies will lead to cost and time improvements, enhanced trial
designs and will allow for the collection of more safety and efficacy data earlier in the development process.
10
On Clean-Tech/Biotech Trends in 2011 –
An Interview with Codexis CEO Alan Shaw
The effect of the midterm election results:
Potential legislative gridlock for the next
two years will produce a negative
atmosphere for new technology
development. Specifically, new clean
technology as an enabler for green Pharma
manufacturing and advanced biofuels, as
well as job creation and energy security,
will be affected, resulting in a major
competitive disadvantage with countries
like Brazil and China.
Best prospects for clean-tech/biotech funding:
Strategic partnerships and the public
markets (Codexis was first clean tech US
IPO in 2010).
R&D challenges, opportunities and trends in
2011:
Clean-tech sector will likely be
characterized by a global focus on moving
to scale.
In transportation, advances in biofuels are
likely to come from Brazil.
Funding for carbon-capture programs will
increase.
Source: Bio SmartBrief
Technology as a Game Changer
“The convergence of technological development along
with a shortage of physicians, coupled with increasing
demand for the services of those physicians – both from
a growing and aging population, and from those added
to the insurance rolls based on new laws – will force
more electronic communication or visits between
patient and physician. It will ultimately be the only way
to meet the demand, and in some ways may be a more
efficient use of the physicians’ and patients’ time. As an
example, a morning video chat with your doctor, where
you discuss the symptoms that your child has, followed
by your doctor emailing you and the pharmacy the
relevant prescription, will save you and the doctor
critical time and money. Adapting to how patients and
physicians utilize technology will be critical for
pharmaceutical companies to continue to educate
customers about the benefits and risks of their
products.”
“Increased use of mobile devices will also speed up the
dissemination of information. “From basic taking your
medication alerts and refill reminds, to more complex
compliance programs that have triggers based on vital
signs read and interpreted by your mobile device,
mobile will change medicine from the physician and
patient perspective.”
“Hosted systems, Software-as-a-Service (Saas) models,
and cloud computing will slowly make their way into
the life-sciences, despite data sensitivity concerns.
“Software vendors can simply provide a better level of
service and more innovative systems using this model,
since much of the laborious time spent implementing,
testing, and validating these systems can be handled
directly by vendors, and once per upgrade cycle versus
once per install. This is amplified in regulated
environments, where validation and upgrade cycles are
far more costly than in other industries.”
“The Pew Internet and American Life Project sees the
same move to an e-focused pharma environment.
Analysts report that 61% of Internet users in the United
States are looking online for health care guidance. Of
these, 66% are seeking information on a specific disease
or condition.”
Source: Dr. David Hahn, R.J. Lewis, James Errico, & Chris
DeAngelis, The Crystal Ball
Return to Innovative Platform
Technologies
“Platform-based technologies are clearly having a
renewed impact, and platform companies will
continue to demonstrate significantly higher value
in comparison to pharmaceutical companies that
are based on a single candidate molecule.”
Source: Kleanthis Xanthopoulos, The Crystal Ball
11
Investing & Deal-Making:
Image: ivcapitalpartners.com
Venture Capital Outlook in 2011
Venture Funding
At a recent American Chemical Society
conference, investors were asked their thoughts
regarding 2011. While 2010 marked the end of
the worst decade for VC investing, when
valuations are low, expected returns are high so
2010-2012 may wind up being vintage years for
limited partners.
Opinions on life science investing in 2011 are split
closely in the medical device and biotechnology
sectors. 330 VCs are almost equally divided as to
whether investment in biotechnology and medical
devices will increase, decrease, or stay the same.
In early stage biotech, capital is scarce with
poor aftermarket returns in comparison to price
differentials with existing public companies so
future returns are likely to be higher. For the
near term, however, the biotech market may
continue to struggle. Corporations have record
cash balances with a big push to pay dividends.
Aside from the public markets, 2011 will
continue to see M&A domination as the
principal exit pathway. Challenges to the VC
industry in 2011 included ensuring bigger
returns. The US venture industry may also have
too many "me too" funds that will be paired
down and, collectively, there is the notion of
adding value around the world and too many
funds are just too small to do this. What may
be needed are fantastic global networks along
with small boutiques.
Source: ACS Webinars
Reflecting increased optimism, 75% percent of all
respondents expect venture investment dollar
levels to remain the same or increase from 2010
versus 63% in 2009. Of note, 44% of VC’s say the
number of investments they will make into new
(vs. follow-on) companies will increase.
Optimism is also more prevalent across stage of
development with 51% of the VCs predicting
increases in later-stage investment, 49% in
expansion and seed investment, and 46% in earlystage investment.
More exits are on the horizon with two-thirds of
VCs anticipating more venture-backed companies
going public while 81% of VCs expect more
acquisitions in 2011. More than half expect IPO
and acquisition quality to improve or remain
steady in the coming year.
Source: Dow Jones Venture Source and National Venture Capital
Association
Total Venture Capital Investment Dollars (Through Q3 2010)
8
7
6
5
4
2
1
0
Q3 2008
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
Q3 2010
Amount Invested ($B)
12
Source: ACS Webinars
3
Is Together Better?
Consolidation: Prudent Business Strategy or Corporate Cannibalism?
Due to a slowdown in the drug pipeline and the impact
of the federal government’s health care reform
package, the PharmBio sector may experience an
acceleration of consolidation and M&A activity in 2011.
Pfizer’s $68 billion dollar bid for Wyeth gives it access
to its rival’s vaccines, consumer health and animal
products. The merger creates a massive player in the
industry, with more than 15 products with $1 billion
each in annual revenue, allowing the company to move
away from its dependence on a single blockbuster.
According to Steven Silver, biotechnology equity
analyst at S&P, the situation of Amgen Inc. (NASDAQ:
AMGN) – with a market cap now in excess of $50billion – illustrations the near-term outlook for the
industry. He says that Amgen, like many of the big
pharmaceutical names, is facing a wave of patent
expiration issues in the next few years; also, the health
care reform package will require generic versions of
existing biotech drugs. When these generic drugs hit
the market, large biotech companies will clearly suffer
some revenue losses.
Companies such as Amgen are keen to make deals in
order to reinvigorate their growth profile. With about
$14-billion in cash on its balance sheet, Amgen is wellpositioned to make numerous acquisitions, both big
and small.
Silver indicated that the large-cap biotech space was
one of the few sectors that managed to flourish during
the dark days of the global financial crisis and
recession of 2008 and early 2009. “The large biotech
firms like Amgen, Biogen (NASDAQ: BIIB) and some
others had enough cash on their books that did not
need to access credit markets,” he said. “Contrarily,
smaller biotech companies found credit frozen and
they found themselves in crisis mode, running out of
money. Many cut costs by drastically reducing their
workforces. But even for them, the financing
environment improved markedly by the middle of
2009, when they found a receptive market for
secondary offerings and other financial endeavors.”
In addition to increased M&A activity, the PharmBio
sector will have to bridge the R&D gap. According to
the latest report from PricewaterhouseCoopers,
Pharma 2020: Virtual R&D, Which path will you
take?, this “innovation deficit” has enormous strategic
implications for the industry as a whole:
“Pharmaceutical companies need to decide what they
want to concentrate on doing and identify the core
competencies they will require, a process which may
involve exiting form some parts of research and
development.
“But even those that regard research and development
as a core element of their business will have to make
fundamental alterations in the way they work. They
may, for example, have to focus more heavily on
specialty therapies, as well as reducing the time and
costs involved in researching and developing such
medicines to ensure that society can afford them.”
The world needs the pharmaceutical industry. Without
the innovative research and development it funds and
carries out, many serious diseases would remain
untreated. So what’s the answer? It could be what some
observers were expecting Jeffrey Kindler to do when he
took over the top job at Pfizer in 2006: instead of
gorging yourself on your rivals, then going on a ruthless
job-cutting purge, try slimming down from within,
focusing on your core areas, finding yourself a niche.
Build a portfolio of mid-performers – then if you close
one drug to a generic competition, it won’t smash a
meteor-sized hold in your profits.
This will require the supports of regulators and vendors
in making the strategic changes necessary to carry the
industry forward. As the PWC reports puts it, “If
pharma is to remain at the forefront of medical research
and continue helping patients to live longer, healthier
lives, it must become much more innovative.”
“Incremental improvements are no longer enough; the
industry will need to make a seismic shift to facilitate
further progress in the treatment of disease. It will have
to learn much more about how the human body
functions at the molecular level and the
pathophysiological changes disease causes. This is a
huge undertaking – and one that pharma cannot
complete alone. It will require the support of academia,
governments, technology vendors, health care providers
and the regulators.”
Easier said than done, perhaps. But in these ruthless
times, there may be no other choice.
Sources: International Business Times and Next Generation
Pharmaceutical
Companies With the Biggest Cash
Reserves:
Novartis
Roche
Johnson & Johnson
Merck & Co.
GlaxoSmithKline
$15 billion
$13.5 billion
$13 billion
$10 billion
$9.5 billion
Source: Next Generation Pharmaceutical
13
Potential Mergers and Acquisitions
 Johnson & Johnson/Crucell: Crucell would
give J&J a vaccine platform.
 Sanofi-Aventis/Bristol Myers Squibb: If Sanofi
and BMS merged, the new company would be
number two behind Pfizer/Wyeth.
 Eli Lilly/Takeda: The two companies have an
existing collaboration in the diabetes arena.
 Johnson & Johnson/Vertex: J&J has a history
of deals with Vertex and may want to acquire
its pipeline of candidates for cystic fibrosis
and rheumatoid arthritis.
 Bristol Myers Squibb/Amgen: Amgen’s
biotech pipeline would boost BMS’s position
in the industry.
Source: Next
Businessweek
Generation
Pharmaceutical
and
Bloomberg
Patent Expirations on the Horizon
S&P Equity Research estimate that by 2013, big
pharma drug makers will face patent expiration
issues on drugs that currently generate more than
$100 billion in sales. Among the high-profile names:
Eli Lilly & Co. (NYSE: LLY) will lose its antipsychotic drug Zyprexa next year.
Bristol-Myers Squibb Co. (NYSE: BMY) lost its
heart attack/stroke treatment drug Plavix in
2010.
Pfizer Inc. (NYSE: PFE) lost its huge anticholesterol drug, Lipitor in 2010.
Wyeth’s two biggest selling drugs, Effexor for
depression and Protonix for heartburn, will lose
patent protection in 2010 and 2011.
Other companies with patents set to run out on
major drugs by 2010 include Ratiopharm, Sandoz,
Merck KgaA, Actavis, Apotex, Barr, GSK and Watson.
Source: International Business Times
Biotech Industry Cautiously Brings IPOs
Back
After a near absence of initial public offerings for two
years, 17 biotech companies launched IPOs in 2010. By
comparison, only three IPOs were filed by biotech
companies in 2009, and just one in 2008.
Some experts say the trend suggests the industry is
gradually recovering from the recession. But others note
that the main reason some of these businesses are
entering the stock market is that venture financing
remains elusive.
Steven Burrill, CEO of Burrill & Co., a San Franciscobased merchant bank that invests in biotechnology,
predicted the number of biotech companies going public
in 2011 could hit 25. That would be the most since 2007,
when 28 biotech IPOs were filed, but a far cry from
2000, when there were 66. “Although the IPO window
was open, investors were more skittish this year about
buying into biotech’s newly minted public companies,”
noted Burrill. “The 17 new biotech issues that debuted
on the U.S. market were plagued by lackluster
receptions (selling fewer shares well below the pricing
range). Thanks to an improvement in the capital
markets in the final quarter of the year, which saw the
Dow increase over 7 percent and the Nasdaq Composite
index jump 13 percent, the average market performance
for the group of new biotech IPOs strengthened and
closed the year down marginally. The companies,
however, only managed to generate the same amount of
cash as three companies did in 2009.”
California-based Complete Genomics, which began
operations in 2006 and now has 160 employees, found
that its debut in the market has been less lucrative than
it had hoped. Lackluster interest from potential
investors reportedly prompted two other biotech
companies -- Ikaria of Clinton, N.J., and Rules-Based
Medicine of Austin, Texas – to cancel their planned
IPOs.
Not everyone is bullish about biotech businesses, said
Scott Sweet, senior managing partner of IPO Boutique
of Lutz, Fla., which tracks new public ventures.
Although "there have been great biotech stories," he
said, many people in this economy are reluctant to put
money into that industry, given how long it typically
takes to develop a commercially-viable product.
"It's still very challenging for many biotech companies
to go public," acknowledged Paul Bard, Vice President
of Research for Renaissance Capital in Greenwich,
Conn. But he sees a change occurring. As this year has
demonstrated, he said, "The window has been opening a
bit."
Source: Mercury News and Burrill & Company
14
Regulatory and Government:
Qualifying Drug-Development Tools: The
FDA Weighs In
In late October of 2010, the FDA issued a draft guidance on
the “Qualification Process for Drug Development Tools.”
According to the guidance, these drug–development tools
(DDTs) include biomarkers, patient-reported outcome
instruments, etc. The guidance outlines a framework for
FDA interaction regarding submissions involving DDTs and
required supporting data to qualify a DDT.
To date, DDTs have been reviewed by the FDA on a case-bycase basis. The FDA stated in the draft guidance recognition
that “the process of drug development and the availability
of new therapies have not been as strongly affected by
recent advances in biomedical science as might be
possible.”
In CDER’s opinion, a new process may provide “some
degree of generalizability for use of the tool … (and) may aid
in advancing therapy development and evaluation in
multiple cases, and can more widely benefit patients.”
Source: PharmTech.com
The FDA Encourages Companies to Combine
Efforts and Drugs to Produce Novel Treatments
In December the FDA issued draft guidelines encouraging
companies to work together to develop drugs to be used in
combination to treat a variety of illnesses including cancer
and infectious diseases.
FDA Commissioner Margaret Hamburg spoke at the
Partnering for Cures meeting, confirming that the new
guidelines were an acknowledgement that combining
experimental therapies may yield more effective results or
possibly prevent drug resistance.
The guidelines clearly state that when companies develop
two or more drugs together, there is less data on safety and
efficacy available for each drug. As a result, there must be a
compelling reason for FDA approval, such as unmet needs
within serious illnesses. The guidelines also urge
companies to provide comparative effectiveness data from
lab studies or animal models.
Michael Caligiuri, director of Ohio State University’s
Cancer Center weighed in on the draft guidelines calling
them a “positive first step” in co-development efforts of
combination therapies; he expressed concern, however,
about legal issues around compound ownership and testing
rights, intellectual property rights and responsibility
should anything go wrong.
Biosimilars in 2011: Pathway to the Future
or Road to Nowhere?
The recently enacted Biologics Price Competition
and Innovation Act (“BPCIA”) created a pathway for
the approval of “biosimilar” copies of licensed
biologics. The enactment of the law, however, was
just the first step in a long process. Both innovator
and generic companies should watch the trends in
2011 and develop strategies for conducting business
under the BPCIA.
Manufacturers seeking to market a “biosimilar”
must decide whether to use the new BPCIA
“biosimilar” application. Although it requires more
data, filing a “full” biologics license application
(“BLA”) may be more prudent for some
manufacturers. The BPCIA requires a biosimilar
applicant to disclose its application to the innovator
company. This will give innovators a “road map” for
employing tactics to delay the biosimilar’s approval.
Uncertain approval requirements and patent
litigation processes also weigh against using the
BPCIA application for a biosimilar.
Innovators should begin developing asset protection
strategies before a biosimilar application is filed for
their product. The BPCIA contains a complex patent
dispute procedure with short timelines. Innovators
should review their patent portfolios and develop
patent defense strategies tailored to the BPCIA
procedures. Similarly, manufacturers may want to
determine the type of data that FDA should require
to support biosimilar versions of their products.
This information, along with legal arguments, can be
submitted to FDA in a Citizen Petition to ensure that
the agency requires the proper quantity and quality
of data.
Manufacturers will face numerous challenges in 2011
as FDA implements the BPCIA. As FDA announces
new policies, companies may want to consider
submitting formal comments to the agency.
Throughout the year manufacturers will need to stay
apprised of new developments and work with their
regulatory counsel and scientific experts to adjust
their biosimilar strategies accordingly.
Source: Mike Hinckle, Partner at K&L Gates
Source: Wall Street Journal Health Blog
15
What Impact Will the US Mid-Term
Elections Have on Big Pharma?
Impact of Health Care Reform Package
Less Severe Than Feared
In all likelihood, the mid-term election results will
barely change the stakes for pharma in its pursuit of
the US legislative and regulatory agenda. If anything,
the industry is at an impasse on key issues such as
health reform rollback and deficit, with a modicum of
optimism on ideological issues involving trade
agreements, patent reform, taxation of foreign-held
assets and approval of follow-on biologics.
2009 was a relatively tough year for biotech as parts of
the new Democratic administration's health care
reform package cast a pall over the entire medical
industry. It was widely believed that the reform act
would not be favorable to the pharmaceutical and
biotech businesses, but by late 2009, drug and biotech
companies realized that the legislation would not have
quite as severe impact on them as previously feared.
Looking forward, what will matter most for pharma
will be a possible business confidence boost,
restoration of productivity growth and improved US
global competitiveness. Industry exports depend
heavily on the dollar fluctuation, that of itself is a
measure of confidence in US economic leadership.
The federal reform package, however, will likely weigh
on biotech revenues in the near term. The bill will
require higher Medicaid rebates that will hurt
revenues of biotech companies. By 2011, biotech and
the big drug makers will be assessed certain fees to
fund the reform. As a result the market is focusing on
the costs that the biotech industry will have to bear,
rather than on any longer-term benefits. One of those
benefits could be the hordes of newly-insured patients
that will arrive by 2014. For now, the industry
continues to sort out the near-term impact of health
care reform on their bottom lines.
On the “FIO” (friends in office) front, the GOP sweep
brought in Dan Coats (former PhRMA lobbyist) and
Rob Portman (former USTR). Sen.Harry Reid’s win
in Nevada is a net plus, as it resulted in the
prevention of industry antagonists – Senators Chuck
Schumer and Dick Durbin – moving to the post of
majority leader. Of most importance might be the
lost subpoena power of critics like Rep. Henry
Waxman resulting in far fewer embarrassing
investigations into regulatory compliance etc.
The new GOP majority in the house and the election
of ten new Republican governors will put significant
pressure on the Obama administration on all things
related to the health reform law. In the opinion of
William Looney, PharmExec blogger, prospects for
roll-back, let alone appeal, are remote. This is due to
the remaining Democratic majority in the Senate, the
President’s power of veto and the GOP’s focus on job
creation.
The government posed another obstacle for biotech –
namely problems that have plagued the FDA. The
agency had been very under-funded and didn’t have
enough resources to meet its mandate of making
timely reviews of new drug applications. This had
been going on for at least five years until, under
President Obama, funding for the FDA was increased
and the review process expanded. Resulting
improvements to the regulatory system are of benefit
to the biotech drugs seeking approval.
Source: International Business Times
One area of low-hanging fruit might be pharma’s
long-sought-after ratification of pending free trade
agreements with Latin America and South Korea. If
the House pushes this through, there may be a
significant opportunity for a positive repositioning of
the pharma industry as a job creator and a driver of
income growth versus the blow it has taken in recent
years due to a wave of promotional and product
safety scandals.
On the regulatory front, there is likely to be renewed
interest in FDA efforts to strike a better balance for
risk and the importance of innovation in drug
discovery.
Source: PharmExec Blog
16
New Drug Approvals Slipped in 2010
The Food and Drug Administration approved about
21 drugs in 2010, a relatively modest figure. A few
potential blockbusters won approval during the
year, but some of the most highly anticipated new
products got delayed into next year or beyond. That
partly reflects a tougher environment at the FDA,
with regulators stepping up their scrutiny of safety
issues in drugs for obesity, diabetes and other
conditions.
According to
monthly drugapproval reports on
the FDA’s website,
21 new drugs were
approved in 2010,
down from 25 in
2009 and 24 in
2008, but higher
from a recent low of
18 in 2007.
The figures include approvals for several major
biologic drugs:
Amgen Inc. for Prolia, a drug that is injected twice
yearly to treat osteoporosis in postmenopausal
women.
Roche Holding AG’s biotechnology unit,
Genentech, for Actemra, a drug that’s
administered intravenously to treat rheumatoid
arthritis.
Boehringer Ingelheim GmbH received approval for
Pradaxa, a new type of blood-thinning drug to
prevent strokes in patients with irregular heart
rhythms.
Novartis AG for x Gilenya, an oral product for the
treatment of multiple sclerosis, which has
traditionally been treated by injections or
infusions. The FDA also approved Acorda
Therapeutics Inc.’s drug Ampyra to improve
walking in MS patients.
HRA pharma, a closely held company in Paris, for
ella, a longer-lasting emergency contraceptive; it
was introduced in the U.S. by Watson
Pharmaceuticals Inc.
Dendreon Corp. for its prostate cancer therapy
Provenge, which had previously been rejected by
the agency. Provenge is designed to use a patient’s
own cells to stimulate the body’s immune system
to fight the cancer and may be the first in a new
class of cancer-fighting drugs.
Source: Wall Street Journal
Drugs Restricted & Pulled off the Market
2010 may be more notable for drugs that weren’t
approved, as well as for drugs the agency restricted
or pulled off the market:
AstraZeneca PLC suffered a setback when the
FDA asked for more information about a study
backing its application for the blood-thinning
drug Brilinta. The delay drove down AstraZeneca
shares more than 5 %.
A long-acting version of diabetes drug Byetta,
sold by Amylin Pharmaceuticals Inc. and Eli Lilly
& Co., was rejected as needing more clinical data
to address cardiovascular safety concerns.
Two proposed weight-loss drugs from Arena
Pharmaceuticals Inc. and Vivus Inc. were denied
approval.
The FDA also curtailed the use of or removed other
drugs from the market:
GlaxoSmithKline PLC’s diabetes drug Avandia
was sharply curtailed after it was linked to
increased risks of heart attacks.
Abbott Laboratories’ weight-loss drug Meridia
was removed from the market; the FDA says the
drug didn’t work well enough to justify potential
heart problems.
Painkillers Darvon and Darvocet were taken off
the market after many years of concerns about an
increased risk of serious abnormal heart rhythms.
The FDA says it will also move to revoke the
approval of Roche’s cancer drug Avastin for use
in breast cancer, saying the product didn’t appear
to help patients live longer. Roche is appealing
the move, which won’t affect the use of Avastin in
other types of cancer.
The agency said it needed more time to review
Mannkind Corp.’s inhaled-insulin product to treat
diabetes. It also said it needed until March 2011 to
review Benlysta, a highly anticipated lupus drug from
Human Genome Sciences Inc. and GlaxoSmithKline.
Source: Wall Street Journal
“Over the next five years, there will be more
significant changes in the way drug and device
safety is monitored. Larger clinical and
administrative databases (e.g., Sentinel), will be
increasingly mined for information on potential
signal. Our ability to understand that signal and to
design studies to strengthen or refute signal will have
a big impact on how pharmaceutical companies
manage and communicate safety information for
their products.”
Source: Dr. Richard Gliklich, The Crystal Ball
17
FDA Unveils Improvements in the
510(k) Process
Innovation Pathway for New Breakthrough
Devices
In January 2011 the FDA unveiled a plan containing 25
actions, including new guidance and enhanced staff
training, it intends to implement during 2011 to improve
the most common path to market for medical devices.
Responding to criticism that it is hindering innovation, in
February 2011 the FDA proposed the Innovation Pathway,
a priority review program for new, breakthrough medical
devices and announced the first submission. The FDA also
announced plans to seek further public comment before
the Pathway can be used more broadly.
Key Actions Include:
Streamlining the “de novo” review process for
certain innovative, lower-risk medical devices
Clarifying when clinical data should be submitted in
a premarket submission, guidance that will increase
the efficiency and transparency of the review process
Establishing a new Center Science Council of senior
FDA experts to assure timely and consistent sciencebased decision making
The proposed Innovation Pathway program for pioneering
medical devices is part of a broader effort underway in the
FDA’s Center for Devices and Radiological Health
designed to encourage cutting-edge technologies among
medical device manufacturers. Medical devices in this
program would be reviewed within about 5 months,
roughly half the time it now takes to review the most
innovative medical devices.
In September 2009, CDRH set up two internal working
groups to address concerns relating to the premarket
notification portion of the 510(k) process – industry
argued that the 510(k) process was unpredictable,
inconsistent and opaque, while consumers and health
care professionals argued that the review process wasn’t
robust enough. At the same time, CDRH also asked the
independent, nonprofit Institute of Medicine to study
the program. That review is still underway.
In addition to the 25 planned actions, CDRH also is
giving the Institute of Medicine an opportunity to
provide feedback on seven recommendations before
making a final decision and is planning for a public
meeting in April to seek additional feedback on two
other recommendations.
Source: FDA
The initiative will also seek to strengthen the nation’s
research infrastructure for developing breakthrough
technologies and advancing quality regulatory science.
Proposed actions include:
Establishing a voluntary, third-party certification
program for U.S. medical device test centers designed
to promote rapid improvements to new technologies
during a product’s development and clinical testing
stages
Creating a publicly-available core curriculum for
medical device development and testing to train the
next generation of innovators
Using more device experience and data collected
outside the United States
In addition, CDRH intends to engage in formal horizon
scanning – monitoring medical literature and scientific
funding in a systematic way to predict where technology is
heading. CDRH will include public input in this process to
prepare for and respond to transformative innovative
technologies and scientific breakthroughs.
The proposed Innovation Pathway program includes the
following features:
Products would have to be truly pioneering
technologies with the potential of revolutionizing
patient care or health care delivery
Selected products would receive an Innovation
pathway memorandum from CDRH containing a
proposed roadmap and timeline for device
development, clinical assessment and regulatory
review
Products would be assigned a case manager, their
important scientific issues would be identified and
addressed earlier in the development process, and
they might be able to qualify for flexible clinical trial
protocols
The FDA could conduct premarket review of products in
the Innovation Pathway within 150 days, nearly half the
time it currently takes the FDA to review most premarket
approval applications. CDRH has set up a public docket to
solicit public comment on the Innovation Initiative and
will host a public meeting on the topic on March 15, 2011
at the Center’s White Oak campus.
Source: FDA
Image Source: FDA
18
Health Care
Extreme Makeover for Health Care in
2011?
Health Care Trends for 2011: Outlook
Brighter Despite Reform Hurdles
Health organizations will undergo a strategy
makeover in 2011 as they react to new rules and
payment models, continuing cost pressures and new
customer demands, according to a report from
PricewaterhouseCoopers’s (PwC) Health Research
Institute.
The Healthcare Intelligence Network’s sixth annual
Healthcare Trends for the Year Ahead e-survey conducted
in October 2010 revealed how 73 health care organizations
perceived the business environment in 2010 and how they
are preparing for 2011.
Record spending on health IT in 2011 is likely to
increase demand for skilled health IT
professionals, promote an expanded role for
CIOs and fuel increased merger and acquisition
activity.
Significant changes in benefit plan design, plan
pricing and the health plan landscape can be
expected as insurers adapt to new medical loss
ratios.
Nearly half of consumers surveyed (49 percent)
still call their doctor's offices to request paper
medical records. While the policy goal of EHRs is
to allow consumers to participate in shared
medical decision making, only 13 percent of
consumers have ever been asked for input into
what they would like to see in their EMRs.
New risks and opportunities may emerge as
payment models shift from fee-for-service to new
models that focus on performance, health
outcomes and shared cost savings, such as
accountable care organizations (ACOs).
An uptick in merger and acquisition activity is
one way health organizations may share
administrative burdens and IT investments, gain
market share and fill strategic gaps.
Increased consolidation is expected among
payors, physicians are aligning with hospitals,
hospitals are merging with other hospitals and
health systems, and recent deals reflect blurring
of the lines between the payors and providers
sectors.
Pharmaceutical companies see an opportunity to
increase their visibility with consumers,
influence health outcomes and reduce health
care costs while increasing revenue using digital
strategies and technology.
The use of mobile health and wireless
technologies by all health organizations is
expected to continue to surge.
Source: CMIO
Survey Highlights
Sixty percent of respondents said 2010 was a better year
than 2009.
Areas having the greatest overall impact on respondents
in 2010 were: the economy (63%); budget constraints
(62%); PPACA (3%4); wellness promotion (34%); and
hiring and recruitment (31%).
Organizational areas most affected by the financial
climate of 2010 were business growth (79%); service
expansion (53%); and services and sales (46%).
Staffing concerns were frequently reported.
Respondents’ Most Successful Programs & Services
Practice transformation.
Creating products to support critical thinking,
executive, leadership and team development.
Clinical practice registry, medical home program.
Training staff in preparation for Certified Professional
in Healthcare Quality (CPAC) certification; focus on
URAC and NCQA training; development of regional
quality groups to implement work plans.
Concierge services for staff, patients and physicians.
Physical and mental health integration.
Respondents’ Best Business Decisions
Increased triage productivity.
Increased dedication to up-front collections.
Focus on care transitions and drug expenses.
Hiring the right staff.
Respondents’ Biggest Mistakes
Understaffing.
Not realizing that the impact of the physician shortage
would be here so soon.
Expansion of service sites without expansion of
infrastructure.
Not raising salaries of hospitalists to retain them.
Waiting too long to reduce staffing.
Being too optimistic about finding a nurse practitioner.
Source: Healthcare Intelligence Network
19
Comparative effectiveness research will
become as big an issue for pharmaceutical
companies as drug safety has become over
the last decade, due primarily to costcontainment programs and pricing pressures
in mature markets. As pharma moves
products through to commercialization, this
research will drive market access,
reimbursement and prescribing behaviors.
Patient-reported outcomes are also an
important piece of this research, to measure
how patients experience changes in their
quality of life, daily functioning, satisfaction,
and other health categories as a result of the
care they receive.
Source: Dr. Richard Gliklich, Mark Gianforcano, and
Carolyn Buck Luce, The Crystal Ball
E&Y: Moving Forward, Companies Speak
out on Health Care Reform
Highlights of a survey of senior executives
Companies in every industry will be affected by
the health care law. Responding to the law is a
critical business issue on the C-suite agenda.
87% of respondents said their company’s CFO
will be involved in efforts to respond to the new
law; 79% said their CEO will be involved.
The law is complex and will continue to
undergo changes in definition and
interpretation. This will pose a significant
challenge to organizations as they attempt to
prepare for enforcement deadlines while being
mindful of changes.
Cost and compliance are key concerns for
respondents. 43% of respondents anticipate
cost increases to comply, and 44% of
respondents had not yet calculated the
financial impact.
At the time of the survey, 92% of respondents
said their companies were not considering
terminating health care benefits. 76% were
anticipating that their employees would likely
experience an increase in what they pay for
health care coverage.
Companies are uncertain how they will
communicate benefit plan changes to their
employees.
Source: Ernst & Young
Image Source: IBM Center
Social Media
“The emergence and adoption of social media
is not a fad – it’s here to stay. How the industry
will adapt to this shift in communication is still
unclear. It’s vital to patients and health care
communities that pharma companies do
engage, because we want to serve the best
interests of physicians and their patients, while
remaining compliant with the laws and
regulations that govern such communication.”
Image Source: Net Strategies
Source: Dr. Greg Barrett, The Crystal Ball
20
Pfizer Establishes CTI: An Interview with
Dr. Anthony Coyle
Pfizer Inc. (NYSE: PFE) recently announced the establishment of the Global Centers for Therapeutic
Innovation (CTI), an entrepreneurial network of partnerships with leading academic medical centers
to transform research and development by accessing leading translational researchers. The University
of California, San Francisco (UCSF) is the first collaborator in the network. Don Alexander of Carlyle
& Conlan interviewed Dr. Anthony Coyle, head of Pfizer’s global CTI efforts, for perspective on these
collaborations.
Don: Dr. Coyle, thanks for your time this morning. Could you provide an overview of Pfizer’s CTI
efforts to date?
Dr. Coyle: The original construct of the CTI efforts is built on a true 50/50 partnership. There is a
decision-making body that oversees the selection and progress of programs. For this collaboration to
be effective, physical co-location was important. There is lab space on the Mission Bay campus, where
there are about 40 total people (half Pfizer employees and half UCSF scientists) who come and go in a
complete open exchange. The goals of the program are to jointly identify targets and develop them
through end of Phase I. The culture is very entrepreneurial and Pfizer wants to work with institutions
that focus on bringing basic science through early stage clinical development so the idea of developing
novel therapeutics together with academics is essential. The work involves developing biologic
therapeutics and understanding the concept of patient heterogeneity. The collaborations focus on
mechanism of action, targeted therapeutics and which patient populations are relevant. The goal is to
work with the best, most innovative scientists in translating drug discovery into data rich, Phase I
studies.
Don: How does this novel model complement existing investments in the biotech sector such as
Venture Capital?
Dr. Coyle: I’ve had the opportunity to speak to a number of venture firms. Although the discussions
are still early stage, the model is flexible to allow VCs to fund part of CTI and thus, make investments
in the process. Additionally, the opportunity exists that Pfizer’s CTI can replace or provide a different
option for those investors who would like to see an increase in the value of assets. Pfizer is interested
in finding ways to share risk and build upon the scope of organizations they know, with eight centers
across the globe.
Don: How does CTI governance work?
Dr. Coyle: At UCSF, there is a joint Board of Review consisting of eight people, four from UCSF and
four from Pfizer. This governance mechanism allows CTI to be semi-autonomous and not dependent
on central Pfizer for decisions around programs. These decisions remain with the Board.
Don: How do the agreements work from an Intellectual (IP) and investment perspective?
Dr. Coyle: At UCSF once a target is part of the agreement, the program is driven by a steering board
that decides which programs continue to be funded. The programs are really almost “biotech VC-like”
with funding being made in tranches as programs progress. Typically one-to-three post-docs are
assigned to programs with various inflection points that provide flexible fund access. These flexible
funds allow the joint Pfizer-UCSF teams to develop preclinical concepts to the end of Phase I for Proof
of Mechanism (POM) trials. Once POM has been achieved, Pfizer has the ability to exercise an
exclusive option.
21
IP is jointly owned on assets developed at the end of certain milestones with prior work recognized by
whoever discovered it. If Pfizer exercises its option, Pfizer develops the asset in-house. If not, the
institution has the right to develop in-house or look for another partner. Different disease indications
could be sub-licensed. All work is subject to the end of Phase I milestones and the institution is
compensated with pre-negotiated payments and milestones. The value of the IP is determined
upfront on a program basis with discussions between attorneys at UCSF and Pfizer, as part of the
steering board. There is joint decision-making on the value of IP where both parties understand what
is in the CTI’s best interest. The IND filed is owned by the academic institution, not Pfizer, which
allows for appropriate award structures for investigators.
Don: What additional assets does Pfizer bring to these partnerships?
Dr. Coyle: The entire focus of the CTI network is on biologics where Pfizer can offer unparalleled
access to protein technologies. For instance, collaborators can access phage and peptide libraries.
Pharma providing completely free access to academic institutions has not been done before. The
groups are small and have the opportunity to leverage Pfizer’s assets in areas such as pharmaceutical
science, toxicology and regulatory support.
Don: Regarding the press release discussing global expansion, what types and locations of
institutions are of interest to Pfizer?
Dr. Coyle: The present emphasis is getting UCSF up and running and finalizing two other major
centers in the US in Boston and New York. The UCSF contract would be identical to other
institutions. Pfizer is interested in similar types of academic institutions and teaching hospitals that
allow for pre-negotiated milestones that will allow Pfizer teams to move to the next step. London
would be a natural fit in this context. The excitement of this program is the ability to be a catalyst for
bringing multiple institutions together to establish a broad network of collaborators. Pfizer could be
the catalyst that helps pull these things together.
430 Davis Drive, Suite 230
Morrisville, NC 27560
T: +1 (919) 474-0771
F: +1 (919) 474-0682
www.ccesearch.com
22

LifeScienceTrends 2011

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