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January 29th 2016 No 3787 scripintelligence.com

Bial Trial Tragedy: No Safety Clue From Similar Products It is now officially confirmed that the fatty SAFETY FIRST: Reasons behind termination acid amide hydrolase inhibitor at the center of products might not be due to safety of the Bial clinical trial disaster is BIA 10-2474, which was in Phase I development for the treatment of “neurological and psychiatric pathologies.” But there were few clues to its potential toxicity from previous products with this mechanism of action investigated, and chaowalek julaketpotichai/shutterstock.com dropped from development. BIA 10-2474 is one of six products listed by Bial as being in its development pipeline, and one of two at the Phase I stage. Bial’s pipeline is dominated by projects for CNS conditions (epilepsy and Parkinson’s disease) plus pulmonary arterial hypertension, inflammation and respiratory. Fatty acid amide hydrolase (FAAH) is responsible for hydrolysis of endocannabinoid, anandamide (AEA), and N-acyl ethanolamines such as palmitoylethanolamine (PEA) and enzyme has two forms, and the FAAH class mentions theoretical concerns over long N-oleoylethanolamide (OEA). Inhibition of has several subclasses of covalent and non- acting inhibitors, and there is speculation that the enzyme increases levels of anandamide, covalent inhibitors, that are reversible and the Bial product is irreversible. a naturally occurring cannabinoid in humans non-reversible. Previous research by Merck As a mechanism, fatty acid amide that plays a role in the modulation of pain and & Co scientists on FAAH inhibitors published hydrolase inhibitors have historically not other neurodegenerative disorders. The FAAH last year in ACS Medicinal Chemistry Letters Turn to page 8 World-Top Scientist Busted For Stealing GSK Secrets US prosecutors have laid out yet another becoming a thief – scheming with one of includes charges of conspiracy to steal trade case where very intelligent people made her co-workers to steal trade secrets from the secrets, conspiracy to commit wire fraud, the stupid mistake of thinking they were too London-based drug and vaccine maker in a conspiracy to commit money laundering, smart to get caught. But they did. plot to market and sell the lifted information theft of trade secrets and wire fraud. In a 43-count indictment, US prosecutors through a US company and its Chinese Yu “Joyce” Xue, who was fired by GSK on in Philadelphia on Jan. 20 described how a affiliates formed with three other conspirators, Jan. 6, was a project co-leader at the firm’s GlaxoSmithKline PLC senior-level manager all of whom are scientists. research facility in Upper Merion, Pa., working went from being regarded as one of The indictment, filed by the US Attorney’s on monoclonal antibodies designed to link to the world’s top protein biochemists to a Office for the Eastern District of Pennsylvania, Turn to page 10

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Eleanor Malone, Editor, 9 13 Scrip Intelligence

Two health crises, quite different in nature, 1 Bial Trial Tragedy: No Safety Clue 13 French Trial Tragedy: Janssen Halts From Similar Products FAAH Inhibitor Trial have come to prominence over the past couple of weeks. Both demand a response 1 World-Top Scientist Busted 14 R&D Bites from the global pharma industry. For Stealing GSK Secrets 15 Amgen Fails At US Patent Board The tragic outcome of the Phase I trial 3 BMS’ Opdivo Blasts Through NICE In Humira Challenge in Rennes, France, in which one volunteer lost his life and others have been seriously 4 10 Potential Approvals To Watch 16 Business Bulletin injured, has prompted much soul-searching For In 2016 17 Will Supreme Court Lift ‘IPR Pressure’ in industry and beyond. While the urgent Off Biopharma? 6 Where Will Technology Take Pharma need is to establish what went wrong in this In 2016? 18 Snowed-Out Sarepta Panel particular case, in the longer run attention Likely Delays FDA Verdict will inevitably turn to what general lessons 7 JPM: Biotech Values Dive, must be learned, and what changes should Industry Remains Optimistic 20 Expert View: JPM Roundtable: be made to avoid such events in future. Biotech Execs Expect Capital To Flow 9 An Uncertain Future For Alkermes An essential part of the drug development After Failed Trials 22 Stockwatch: Will Earnings process, Phase I trials thankfully rarely result Season Rescue The Sector? in catastrophic damage to human volunteers. 9 Policy & Regulation Briefs It is imperative that the risks of serious or 23 Pipeline Watch 11 Questions Arise About Latest lasting impact on healthy volunteers are kept MannKind Deal 24 Appointments as close to zero as possible, and the renewed calls for greater transparency around 11 Merck Versus Merck: Trademark Wars preclinical and early clinical data will have to Hot Up be given thorough consideration, not least in 12 Senate Skips Critical Measures order to help re-establish public trust in the In ‘Cures’ Phase I process. Meanwhile, the reports of brain damage 12 French Trial Tragedy: FDA Launches and microcephaly in newborns in Latin ‘FAAH’ Safety Probe America that have been attributed to maternal Zika virus infection suggest that the outbreak of the usually mild mosquito- transmitted infection that began in the region Scrip in 2015 will need to be taken more seriously Editor: eleanor.malone@informa.com than had initially appeared necessary. Managing Editor: [email protected] News Editor: [email protected] With the much-lamented delayed South Asia Editor: [email protected] co-ordination of efforts to address the Washington Editor: [email protected] 2014-15 Ebola epidemic in West Africa US West Coast Editor: [email protected] Features Editor: [email protected] still fresh in the mind, industry will want Senior Reporter: [email protected] to avoid a repeat of the finger-pointing Principal Analysts: [email protected]; that accused it of neglecting to develop [email protected]; [email protected] We would love to hear your comments about treatments and vaccines because they would Reporter: [email protected] Scrip’s coverage. Feel free to tweet us or post [email protected] not be profitable. The emerging threat to Reporter: a discussion on our LinkedIn group, for your Creative Content Reporter: [email protected] fetuses is prompting R&D-focused action in chance to interact with editor Eleanor Malone Editorial Assistant: [email protected] various quarters, with companies including Production: [email protected] and the rest of the Scrip Intelligence team. Pharma Data Editor: [email protected] GlaxoSmithKline, GeneOne Life Science and Global Content Director: [email protected] Follow us at: @scripnews Inovio Pharmaceuticals recently announcing All stock images in this publication courtesy of vaccine research plans. www.shutterstock.com unless otherwise stated. Join us at: linkd.in/scripintelligence Of course, for industry to respond Customer Services Tel: +44 (0)20 7017 5540 or (US) Toll Free: 1 800 997 3892 effectively to any emerging public health Email: [email protected] challenge, robust monitoring and alert To subscribe, visit scripintelligence.com systems need to be in place. It is to be hoped To advertise, contact [email protected] that the reforms being set in motion at the Scrip is published by Informa UK Limited. World Health Organization in the wake of ©Informa UK Ltd 2016: All rights reserved. ISSN 0143 7690. Ebola will, among other things, help facilitate prompt and effective interventions by research-based pharma companies.

2 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news BMS’ Opdivo Blasts Through NICE Bristol-Myers Squibb’s PD-1 inhibitor Opdivo back and forths we have seen with other According to NICE, the decision to dispense (nivolumab) has won a recommendation recent appraisals,” said Paul Workman, chief with preliminary draft guidance had nothing to from NICE, the health technology appraisal executive of The Institute of Cancer Research. do with the Early Access to Medicines Scheme. institute for England and Wales, for use on the Gill Nuttall, founder of Melanoma UK was NICE was able to recommend the drug for the NHS as a monotherapy for melanoma. The also pleased with this news and highlighted full licensed indication based on the available drug went straight to the final stages of the the importance of immunotherapies, which evidence, for this reason there was no need for appraisal process and will compete against she said are changing survival expectations additional consultations, it said. Merck & Co’s own PD-1 inhibitor Keytruda in cancer. “We need to do more to bring Opdivo costs £439 per 4 ml vial and £1,097 (pembrolizumab). Meanwhile, research and patient access to these potentially life- per 10 ml vial, excluding VAT and any local patient organizations have expressed relief extending cancer medicines as quickly as procurement discounts. NICE’s appraisal that NICE has okayed another “exciting” new possible,” she said. committee decided that the incremental cost immunotherapy for cancer. Opdivo, like Keytruda, won approval from effectiveness ratio for the drug, compared On 22 January, NICE published its final the UK’s medicines regulator, the MHRA, to with BMS’ Yervoy (ipilimumab), Roche’s Zelboraf appraisal determination recommending enter the Early Access to Medicines Scheme (vemurafenib) and Novartis’ Tafinlar (dabrafenib), Opdivo in line with its licensed indications (EAMS), which aims to allow early availability would be less than £30,000 per quality adjusted as a monotherapy for treating advanced of promising new unlicensed drugs for life year gained. This meant the drug was cost- (unresectable or metastatic) melanoma in patients with a high unmet medical need. effective. This estimation included confidential adults. BMS has welcomed the news, but at This meant Opdivo was made available in the discounts applied to the three drugs. the same time expressed concern that the UK, free of charge to the NHS, on May 30, less NICE also agreed the drug could be evaluated institute was poised to say no to the drug for than a month before it won EU approval on under its end-of-life criteria, giving it scope to lung cancer. June 19. Approval under EAMS also means accept more expensive medicines. In November Elsewhere, others applauded the swift the NHS is obliged to make funding available 2015, NICE published guidance recommending adoption of an effective immunotherapy. “It’s for the drug earlier following positive NICE Keytruda as an option for treating advanced positive that NICE has approved this at the guidance. Usually local authorities have 90 melanoma that has not been previously treated first time of asking. It’s vital that we get novel days to fund a product recommended by with Yervoy. The recommendation depends on and exciting cancer treatments to patients as NICE, but this time line falls to 30 days for a confidential discount. quickly as possible, and avoid the tortuous EAMS-approved drugs. [email protected]

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 3 headline news 10 Potential Approvals To Watch For In 2016 each year. Also eteplirsen and drisapersen trial which would push approval back until both won the FDA’s rare pediatric disease 2017. Clovis can at least take some comfort in designation, which means they are eligible for the progress of its other offering rucaparib. Its a priority review voucher (PRV) on approval. NDA submission timeline has been brought Sarepta has yet to file eteplirsen in the EU. forward to Q2 2016, and the company is 4zevar/shutterstock.com eyeing a potential US launch for advanced Eli Lilly’s Ixekizumab For Psoriasis ovarian cancer by the end of 2016. US approval decision due: first quarter 2016 EU approval decision due: second half 2016 Teva’s Cinqair For Asthma If the regulators are willing, Lilly’s offering US approval decision due: March 2016 in the new anti-IL17 class is set to challenge EU approval decision due: second half 2016 Novartis’s frontrunner Cosentyx (secukinumab) This is Teva’s answer to GlaxoSmithKline’s 2015 was a busy year for both the US FDA which reached the market last year for newly approval Nucala (mepolizumab), which and the EMA, with both agencies reporting moderate to severe plaque psoriasis (the first last year became the first product licensed in a substantial uptick in the numbers of novel of a number of potential anti-inflammatory this new class of anti-IL-5 products for severe products they approved, but what product conditions). Together these products are asthma with an eosinophilic phenotype – a approval decisions are due in 2016? pushing back the treatment frontiers in this very difficult to treat population, which makes Here Scrip looks at 10 of the more disease, raising the bar for their followers. up about 3% of the 25 million people with interesting approval decisions to look out So much so that AstraZeneca transferred asthma in the US. Teva is seeking to market iv for in 2016, in rough order of when they are its IL17 product brodalumab to Valeant reslizumab (Cinqair) to reduce exacerbation, expected. It is perhaps telling that each of the after its partner Amgen pulled out of their relieve symptoms and improve lung function 10 applications is due to be decided upon co-development deal after suicidal ideation in adults and adolescents 12 years or above first in the US, and so the list is in approximate adverse events came to light during clinical with asthma with elevated blood eosinophils order of their Prescription Drug User Fee trials. Ixekizumab and secukinumab may who are inadequately controlled on inhaled Act (PDUFA) action dates (where known). be snapping at the heels of the current corticosteroids. And it looks set for approval in However, it should be noted that last year standard of care Johnson & Johnson’s Stelara at least some patients: the FDA’s Pulmonary- many oncology drugs were approved well (ustekinumab), which superseded the older Allergy Drugs Advisory Committee on Dec. 9 ahead of their PDUFA dates, a trend that could anti-TNFs in moderate to severe psoriasis, lent its support to reslizumab as a treatment well continue. but other products are on the way: a for adults with severe asthma, but said there number of anti-IL23 agents are in late-stage were not enough data about whether the BioMarin’s Kyndrisa, development by Boehringer Ingelheim, Merck drug is safe and effective in adolescents Sarepta’s Eteplirsen For DMD & Co and J&J. 12-17 years. However, a similar verdict from US approval decision: January 2016 Datamonitor 7MM sales forecast 2023 $297m the same committee for Nucala was ignored EU approval decision due: drisapersen Q3 2016 by the FDA which later approved Nucala for US approval decision due: eteplirsen Clovis Oncology’s Rociletinib patients 12 years or older – might it do the February 2016 For NSCLC same for Cinqair? EU approval decision due: eteplirsen not yet filed US approval decision due: March 2016 Datamonitor 7MM sales forecast 2024: $815m Regulatory decisions are finally expected for EU approval decision due: mid-2016 two investigational treatments for the orphan Clovis shocked investors in November when AbbVie/Roche’s Venetoclax For CLL disease Duchenne muscular dystrophy (DMD) it released response rate data for rociletinib US approval decision due: April 2016 this year. The FDA has just given its negative in non-small-cell lung cancer (NSCLC) that EU approval decision due: November 2016 – verdict on BioMarin’s drisapersen (Kyndrisa) were lower than the firm had previously May 2017 which came as no surprise following an FDA reported. What’s more, the data submitted to AbbVie and Roche’s B-cell lymphoma-2 panel in November that was highly skeptical the FDA could delay any approval, with the (BCL-2) inhibitor has been filed for US and EU of the company’s data for the product, PDUFA action date likely being pushed past approval on the basis of Phase II data in which both for efficacy and safety. In its Complete the currently scheduled Mar. 30. The rolling a clinically meaningful proportion of relapsed, Response Letter, the agency said it wants filing was for the treatment of patients with refractory and previously untreated chronic another Phase III trial, kicking drisapersen into mutant epidermal growth factor receptor lymphatic leukemia (CLL) patients with a 17p the long grass. Its future will likely depend on (EGFR) non-small cell lung cancer who deletion achieved an objective response. how the EU’s CHMP responds to the product have been previously treated with an EGFR- Another Breakthrough Therapy designate, (a decision is due in the first half), and on how targeted therapy and have the EGFR T790M Venetoclax selectively inhibits the BCL-2 Sarepta’s rival product eteplirsen fares at its mutation as detected by an FDA approved protein, which prevents apoptosis in some own panel meeting on Jan. 22. Eteplirsen has test. Analysts had hoped that the product cells, including lymphocytes. It is thought a PDUFA action date of Feb. 26. Both drugs would sail to market, like AstraZeneca’s similar the drug’s mechanism “may help restore the are seeking the approval to treat patients product Tagrisso (osimertinib) did in the same natural process that allows these leukemic with DMD amenable to exon 51 skipping. indication, in November, well ahead of its cells to self-destruct,” representing a new way Duchenne is the most common fatal genetic PDUFA action date of Feb. 6, 2016. Now they to treat CLL patients with a 17p deletion – a disorder diagnosed in childhood – affecting expect a decision in the middle of the year at group with few effective treatment options. about 1 in every 3,500 live male births, with the earliest; with a worst-case scenario being Up to 10% of newly diagnosed CLL patients about 20,000 new cases diagnosed globally that the FDA requires data from the TIGER-3 each year have a 17p deletion, and about 30%

4 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news to 50% of relapsed and refractory CLL patients attacks and strokes in a variety of clinical The disease is a rare and serious chronic blood have a 17p deletion. settings, but doctors sometimes need urgently cancer that can affect patients of all ages with The product will have to muscle into an to reverse their effects in cases of hemorrhage a median age of 65 years, with an estimated increasingly crowded field, however. AbbVie’s or when emergency surgery is indicated. prevalence in the US of about 18,000 patients. own Bruton’s tyrosine kinase inhibitor The lack of antidotes to these products (as The only product specifically approved for Imbruvica (ibrutinib) and Gilead’s PI3K delta compared with warfarin, for which vitamin myelofibrosis is Novartis’s JAK 1 and 2 inhibitor inhibitor Zydelig (idelalisib) are other options K is used), has left prescribers cautious and Jakafi (ruxolitinib), which was approved in 2011 available and analysts say the key question, uptake has been slower than hoped. While BI’s for the treatment of patients with intermediate if approved, is where this product will fit into idarucizumab was developed for use with its or high-risk myelofibrosis, including the therapeutic sequence. Then again, there is direct thrombin inhibitor dabigatran, Portola’s primary myelofibrosis or post-polycythemia also the option to combine it with Imbruvica, product is aimed at use against the range vera myelofibrosis or post-essential further bolstering AbbVie’s oncology portfolio. of Factor Xa inhibitor products, including thrombocythemia myelofibrosis. The pacritinib AbbVie’s NDA was granted a priority review, apixaban (BMS/Pfizer’s Eliquis), and rivaroxaban NDA was based mainly on CTI BioPharma’s meaning that its approval should come in the (Bayer/J&J’s Xarelto). Andexanet alfa is due to randomized, open-label, multicenter PERSIST-1 last week of April. An EU decision is expected be filed in the EU this quarter. Phase III trial, which compared the product between November 2016 and May 2017. Andexanet alfa was designated a with best supportive care (not including a JAK Breakthrough Therapy by the FDA and if inhibitor) and showed consistent rates of spleen Acadia’s Nuplazid For Parkinson’s approved will be the first universal antidote volume reduction and control of disease- US approval decision due: end of April 2016 for Factor Xa inhibitor anticoagulants. The FDA related symptoms across all intermediate or EU approval decision due: not yet filed assigned a PDUFA date of Aug. 17, 2016 under high-risk myelofibrosis subgroups. The rolling Nuplazid’s development has been an Accelerated Approval pathway, and all NDA was initiated in November 2015 and characterized by delay after delay, but being well launch is expected later this year. completed earlier this month and so BMT September finally saw Acadia file an NDA expects a decision between Sept. 23 and Nov. for Parkinson’s disease psychosis after new Amgen’s Etelcalcetide For SHPT 5, 2016, assuming an accelerated review time. CEO Steve Davis took the helm. If approved, US approval decision due: August 2016 An EU filing is due early this year. Nuplazid (pimavanserin) would represent a EU approval decision due: August 2016 – new and distinctly different pharmacological February 2017 Sanofi/Regeneron’s Sarilumab approach to treating psychosis and would be This product is being positioned as the For RA the first drug approved in the US for psychosis follow-on to Amgen’s blockbuster Sensipar US approval decision due: October 2016 associated with Parkinson’s disease. In a Phase (cinacalcet) which is due to go off patent EU approval decision due: not yet filed III clinical trial, Parkinson’s patients treated with in 2018. Secondary hyperparathyrdoidism The highly competitive anti-inflammatory the selective serotonin inverse agonist (SSIA) (SHPT) affects about two million people who segment saw another novel offering filed that preferentially targets 5-HT2A receptors are currently on dialysis and is caused by an last year, a product of the R&D alliance had twice the improvement in psychosis as increase in parathyroid hormone as kidney between the French giant Sanofi and individuals who received a placebo. Patients function declines. Etelcalcetide’s main benefit Regeneron Pharmaceuticals. Like Roche’s benefited from the drug without side effects appears to be its dosing: it is given iv three marketed blockbuster arthritis treatment associated with antipsychotic medicines times a week at the end of each dialysis Actemra (tocilizumab, currently the only IL that often are prescribed off-label to people session, compared with once daily oral dosing inhibitor licensed for Rheumatoid Arthritis; with Parkinson’s disease psychosis. Nuplazid with Sensipar which can involve many tablets RA), sarilumab inhibits the interleukin-6 has Breakthrough Therapy designation and per day to normalize serum calcium levels. receptor, but it is a fully human monoclonal priority review status, with a PDUFA data Also known as AMG 416, etelcalcetide is a antibody, rather than being humanized. It of May 1 (which falls on a Sunday, so the calcimimetic agent that binds to the calcium seems its fate on the market will rest on how decision is expected the Friday before). An channels and decreases the production of well it can differentiate itself not only from MAA filing is planned between March and the hormone. It was filed for US approval last Actemra, but also from Johnson & Johnson/ June this year. About 40% of Parkinson’s autumn and with a standard review has a GlaxoSmithKline’s fully human anti-IL-6 patients experience psychosis characterized PDUFA date of Aug. 24. Amgen announced antibody sirukumab in Phase III for rheumatoid by hallucinations and delusions. its MAA filing for the treatment of SHPT in arthritis (positive top-line results in moderate BMT worldwide sales forecast $487.5m in 2025 adult patients with chronic kidney disease on to severe disease were reported in December). hemodialysis therapy using the centralized Moreover, the arrival on the market of Portola’s Anticoagulant Antidote procedure in early September. biosimilar anti-TNFs is expected to have a US approval decision due: August 2016 more profound impact of the RA market. Their EU approval decision due: not yet filed CTI/Baxalta’s Pacritinib anticipated lower price compared with the Filed in the US in November, this is the For Myelofibrosis branded agents will drive uptake, with payers second of two anticoagulant antidotes US approval decision due: September – heavily influencing prescribing decisions. The approaching the market which, it is hoped, will November 2016 BLA filing was accepted for review for the boost sales of the new generation of blood EU approval decision due: not yet filed treatment of patients with active, moderate thinners (the other one being Boehringer Pacritinib is an investigational oral kinase to severe rheumatoid arthritis; the PDUFA Ingelheim’s idarucizumab, which was inhibitor with specificity for JAK2, FLT3, IRAK1 date is set for Oct. 30, 2016 (as this date falls approved late last year in the US and EU). The and CSF1R, currently under US review as a on a Sunday, a decision is expected on Friday, newer oral anticoagulants products were a treatment for patients with intermediate and Oct. 28). An EU submission, however, is not welcome alternative to warfarin in reducing high-risk myelofibrosis with low platelet counts expected until late 2016. the risk of blood clots that can cause heart of less than 50,000 per microliter (<50,000/µL). [email protected]

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 5 headline news Where Will Technology Take Pharma In 2016? Non-traditional healthcare partnerships are companies expect to initiate human testing More From Apps on the increase, including collaborative deals for this product in 2016. This lens prototype Uribe nominated “mobile health and between big pharmas and technology giants is for accommodative vision correction in mobile app development” as the most such as Apple Inc. and Google. But what people with presbyopia, or age-related long interesting area for tech and pharma firms to changes could these business partnerships sightedness, who can no longer read without collaborate in at this time. “Our smartphones – which have increased over the past glasses, BMT notes. have the technology to tell us a lot of few years – have in the long-term on the However, despite Google’s obvious different information and the more quality pharmaceutical and biotech industry? attraction to the healthcare space, BMT information that can be gathered will help A new series of reports from Sagient analysts highlighted that Andrew Conrad, an individual stay engaged and make better Researcher’s BioMedTracker (BMT), an head of Google[x]’s life science team, does educated decisions about their behavior,” affiliate of Scrip, look specifically at this not intend Google[x] to become a pharma he said. BMT’s report highlights Apple’s question, conducting some future-gazing company. However, “it seems that they may recent partnerships with Epic systems, for to speculate on how the industry might plan on creating a software product that information transfer to EHRs (electronic change as crossovers between technology they can license to others in the biotech and health records), and with IBM for apps that and healthcare increase, particularly in the life pharma space.” aim to cut down the hospital inefficiencies. sciences sector. BMT said in its report that as an eye He noted that one area where we could In the reports, Intersection Between Tech care focused company, Alcon may be see an increase in app development from And Pharma, (of which two of three have brainstorming other innovative ideas in pharma or biotech firms would be orphan been published so far) it is noted that 40% of which they can use the smart lens. Analysts diseases. “Since orphan disease patients Fortune 50 companies pursued healthcare noted that the partnership will also help are usually found in small groups all over related partnerships in 2014. Google understand how to combine these the world, I think it’s an area where having Lead author of the report Armando Uribe sensors on a lens in a way in which the eye mobile apps for research can really help told Scrip that in his opinion healthcare and and cornea won’t be bothered. “If successful, with the understanding of these diseases,” technology partnerships, if they continue the life sciences team could be looking he said. in growth and volume, could really help to license the technology to other big enhance the understanding of many diseases ophthalmology players in the pharma space What’s Next? through better research. like Allergan or Regeneron. Currently there are Novartis and a handful of other healthcare “The future of health research is going no other competitors in the space as other firms aside, Uribe said the thing that to be in better comprehending why our companies are focused on developing small has surprised him most in watching the bodies do the things they do. If researchers devices attached to the body that connect growing health/tech space is how reluctant start to get a better understanding of that, to a separate device that reads and transfers pharma still seems to be when it comes to then they can begin helping people prevent patient information,” BMT said. collaborating with tech. chronic diseases like type 2 diabetes, obesity, BMT did point out though, that as in in “There was even an interview where the heart disease and more, instead of focusing this case, a trend is appearing among these CEO of Roche said the tech companies were on treatments to manage them,” Uribe tech and pharma partnerships – there is very simply IT companies in the healthcare space said. However, he noted that collaboration little information about these arrangements and they lack the medical knowledge. Overall, or “intersection” between pharma and made public. there has only been a small number of big technology “is still at a very early stage.” For example, while Novartis CEO Joe pharma companies involved in partnerships One of the major players to make a move Jimenez has publically stated that it will with tech to date,” Uribe said. towards healthcare is Google, which under be around five years before a smart lens However, Uribe does see the push for its new parent company, Alphabet, has its type product reaches the market, what collaboration continuing from the technology own internal life science unit – what used to remains unclear is the level of involvement side. “Tech firms have had a growing interest be known as the mysterious and shrouded both parties have in one another’s in healthcare because of how inefficient it is,” Google[x] and has now been spun out under projects. “Novartis has not mentioned any he said. “Whether it’s helping to gather and the header Verily. development of the smart lens for glucose analyze results from a clinical trial or general Verily’s first pharma relationship was monitoring and Google[x] has not mentioned patient care, it is very clear that the way announced in July 2014, a deal which would any development in patients with presbyopia,” things are done in healthcare hasn’t changed see the company team up with Novartis BMT said in its report. “With the information in a very long time. Tech companies really see AG’s Alcon business for the development provided we can speculate that Novartis’s an opportunity in that, especially given how of a smart contact lens. Following that product, if approved, would be sold direct-to- much our technology has advanced in the announcement, in 2015 Verily secured deals consumer by prescription.” last 10 years.” with the likes of Biogen, Sanofi, Johnson & Also Scrip recently spoke to Apple for And in his opinion there is space for Johnson, and Dexcom. These partnerships insight into the company’s recent mobile better technology everywhere in healthcare, cover a wide range of diseases such as app development deal and how it views the “whether it is collaborations for surgical multiple sclerosis, heart disease and diabetes future for Apple and pharma; however Apple robotics, mobile health apps, EHRs, or data and Verily’s partnership with Johnson & said it is not its practice to talk about future analytics software.” Johnson is for research into the advancement products in any sectors. The company did To download BMT’s The Intersection of surgical robots. note it expected to provide a public briefing Between Tech and Pharma special reports go Google and Novartis’s deal remains the on its goals for the healthcare sector in the to: www.biomedtracker.com most advanced prospect though and the two near future. [email protected]

6 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news JPM: Biotech Values Dive, Industry Remains Optimistic Most of the time when biopharma CEOs because any decline in values gives bigger industry right now,” Renaud said. and healthcare-focused investment bankers companies better access to drug candidates descend on San Francisco’s Union Square in from smaller firms. Investors Reassess Values mid-January to assess the industry’s status “Innovation, more and more, comes from Nina Kjellson, a general partner at the for the months ahead, biotech stocks rise as small companies,” Sabry said, noting that half venture capital firm Canaan Partners, said in companies announce deals and data, but of Genentech’s therapeutic candidates come an interview that VC investors are reviewing that’s not what happened this year. from outside of the Roche company. their portfolios in the wake of stock price Investor sentiment for the biopharma Roche’s big pharma peer Eli Lilly & Co. declines and the likelihood that some private industry seesawed dramatically during takes a similar approach to filling its R&D companies won’t be able to launch planned the 34th Annual JP Morgan Healthcare pipeline. About 60% of Lilly’s drug candidates IPOs in the near term. Conference from Jan. 11 to 14. The Nasdaq come from internal R&D, but the other 40% Just how far values will fall in the eyes of Biotech Index (NBI) closed down on two of comes from licensing and acquisitions with stock market investors, who can be fickle, is the four days and up on the other two days, a preference for early-stage assets, CEO John unknown. However, the mindset of investors ending the conference 10% below the prior Lechleiter told Scrip. that focus entirely on the life science sector week. But when you talk to big pharma is to bet on technology with good scientific or small biotech executives and long-time Small Firms Positioned For Deals potential based on the industry’s growing biopharma investors, they believe that the Luckily for four-year-old Cambridge, genomic knowledge and other advances. industry is generating incredible science with Massachusetts-based RaNA Therapeutics, the “There’s no change in the view of the the power to help a lot of patients. biotech firm closed a $55m series B venture industry,” Kjellson said. “The science has Admittedly, though, the industry has to capital round in July, before biotech stock evolved and pharma still wants to partner retain some eternal optimism or else no values began to plunge and a few months with early-stage companies.” one would stay in a business with a high before the IPO market appeared to shut down For venture capital investors, returns usually failure rate historically and limited successes for drug developers. are larger when biotech firms are purchased – although some of those successes are The financing allows RaNA to focus on compared with when companies launch IPOs. multibillion-dollar drugs. business development rather than fundraising Canaan tries to build biotechs that will be while the company prepares to begin its targeted for acquisitions, rather than position BD Optimism Runs High first clinical trials. RaNA is developing drug startups as IPO candidates due to the fickle “We’re building better drug candidates and candidates that target long non-coding RNA nature of the stock market. they’re getting better so much faster than I with the goal of upregulating genes specific Under that strategy, Kjellson believes thought,” James Sabry, senior vice president to certain diseases – initially spinal muscular that early-stage companies still will be able and global head of Genentech partnering, atrophy (SMA) and Friedreich’s ataxia. to find capital even if the IPO market dries told Scrip. “We’re very comfortable with our up and if mezzanine capital, which often is But while Sabry is optimistic, he notes that balance sheet today,” RaNA CEO Ron used to span the period between venture the declining value of biotech stocks and the Renaud told Scrip. “But as we take more from funding and an acquisition or public offering, increasing difficulty of initial public offerings the bench into the clinic, we will focus more becomes harder to find. for pre-commercial companies has early-stage on fundraising.” “You will just see bigger series A rounds, executives running scared, so much so that For now, the company is talking to potential since you can raise enough money now to deal values already are being affected. partners about programs that could help RaNA get to Phase II,” she said. “I feel more urgency on the part of biotech test the possibilities of its technology platform, Dennis Purcell, founder and senior adviser companies, because it feels as if there’s less and it’s focused on taking its first candidates at Aisling Capital, also believes that funding time to raise money,” he said, with companies into the clinic, because “if you have good data, won’t dry up. There are a lot of new investors fearing that drug development financing is that always attracts capital,” Renaud said. that are investing in biotech, but they aren’t about to dry up. The CEO knows well that by keeping necessarily buying and selling stocks: health The net effect of the NBI falling 26.3% data front and center, despite valuation care systems that have their own VC funds, from its 2015 peak, reached on July 20, is fluctuations and other challenges, a lot of sovereign wealth funds, pension funds that that biotech companies have become less value will be created. Renaud was CEO of want to invest directly in venture capital, and aggressive about how much control they Idenix Pharmaceuticals when Merck & Co. other private investors, Purcell said during want to maintain in partnership agreements Inc. paid $3.85bn for the publicly-traded a Jan. 12 panel discussion about the status and there’s more room to negotiate prices in hepatitis C-focused company in 2014 after of the industry at the Biotech Showcase, an licensing deals. But since big pharma and large Idenix recovered from clinical holds on some event that runs concurrently with the J.P. biotech companies like Genentech need to of its programs. Morgan conference in San Francisco. fill research and development pipelines with Based on his experience as a public So will private biotech firms benefit the next wave of game-changing treatments, company CEO, Renaud is happy to be leading from investors that want to put cash into Sabry is optimistic that the volume of a private company that doesn’t have to the industry, but who are wary of the dealmaking won’t slow down in 2016. answer to shareholders during a period of wavering values of public drug development “I think there are going to be some great declining biotech stock values, but he doesn’t companies? That remains to be seen, but deals in the next year,” he said, and not just think that recent public investor sentiment specialty pharma stock values may continue because Genentech and its peers may get a will send the industry into hibernation. to be in limbo this year, according to analysts discount relative to the last few years. There “We’re seeing a lot of terrific science being at the investment bank Leerink. could be more deals than 2015, he notes, valued in a way that’s appropriate for the [email protected]

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 7 headline news

Bial Trial Tragedy: No Safety Clue From Similar Products (Continued from page 1)

J&J voluntarily suspended dosing in a Phase II Pfizer discontinued PF-04457845, which trial for anxiety and major depressive disorder was in Phase II for post-traumatic stress comparing 25 mg po once daily with placebo in disorder last year, for lack of efficacy as it a planned 140 patients which began in October did not meet its primary endpoint, with no 2015 and was due to report in 2017 (see p13). safety issues reported. It had previously been Another compound, IPI-940, is in tested in a Phase IIa trial for osteoarthritis of Mega Pixel/shutterstock.com Mega development by the private Canadian firm the knee, but no results for this study have FAAH Pharma and in 2014 was due to enter been posted on clinicaltrials.gov. Phase IIa for neuropathic pain, with post- Sanofi had SSR-411298, which reached herpetic neuralgia being the primary focus. Phase II in cancer pain but was discontinued The compound was originally discovered and for strategic reasons in 2012; again no safety developed by Infinity Pharmaceuticals, Inc. but issues were reported. It has previously been FAAH Pharma received venture funding from discontinued for anxiety and depression Montreal-based venture capitalists TVM Life because Phase II results did not support got very far in the drug development Sciences to continue its clinical development. progression into Phase III. process. According to Citeline’s Vernalis’s V-158866 was discontinued Pharmaprojects database there are only last year after a Phase II proof-of-concept three others in active development, with Little is known of the fate of study for neuropathic pain showed that three discontinued products and 12 others some other FAAH inhibitors it failed to meet its pain-reduction listed as “No Development Reported” primary endpoint. At the time, Vernalis meaning that there is no evidence of Another small firm, the Indian company claimed that consistent with its strategy their continued development but neither Advinus, is looking at a FAAH inhibitor at the of becoming a commercial business, it any official confirmation of their being preclinical stage for chemotherapy-induced would not make any further investment in discontinued. neuropathic pain. V-158866, but would partner the product if Of those FAAH inhibitors that appear still in the opportunity arose. development Johnson & Johnson’s selective No Safety Hints Of the remaining FAAH inhibitors that have and slowly reversible FAAH inhibitor JNJ- Of those products that have been discontinued, got lost along the way, little is known of their 42165279 appears to be the most advanced. the reasons behind the terminations do not fates (see table below). Following the developments with Bial’s drug, appear to be due to safety concerns. [email protected]

Other FAAH Products No Longer In Active Development Compound Company Indication Highest Development Other Information Phase Reached IW-6118 Ironwood Pharmaceuticals pain and inflammation Phase II A small-molecule FAAH inhibitor which completed a Phase II trial in 90 patients undergoing third molar extraction in the US in 2010. No results have yet been posted on clinicaltrials.gov. MK-4409 Merck & Co general pain Phase I Phase I trials were conducted in 2009 SSR-101010 Sanofi depression and anxiety Phase I It was in Phase I in 2007. KDS-4103 (URB-597) Organon (now Merck & Co) nociceptive pain Preclinical/Phase I It was originally under development by Kadmus Pharmaceuticals; however, Kadmus licensed all rights and assets to its FAAH inhibitors to Organon. It was ready for Phase I trials in 2007. RN-450 29 Evotec (Renovis before the chronic pain, anxiety and Preclinical One of a series a tetrahydropyridopyridine inhibitors of FAAH, which acquisition) depression reached the hit-to-lead stage of development in 2011 Org-231296 Organon (Schering-Plough general pain Preclinical It was in preclinical development in 2007. (now Merck & Co)) VER-156084 Vernalis inflammatory and neuropathic preclinical A selective FAAH inhibitor. pain FAAH inhibitor LG Life Sciences general pain preclinical It was in the research phase in 2010. URB-937 Italian Institute of Technology pain associated with preclinical A second-generation inhibitor of FAAH, which was under (IIT) rheumatoid arthritis and development for the treatment of pain without causing side effects. peripheral neuropathic pain Clinical trials had been expected in 2012. PF-04862853 Pfizer general pain preclinical FAAH inhibitor series with novel spirocyclic cores. No development reported since 2011. MAK-5206 MAKScientific multiple sclerosis preclinical It was in in vivo proof-of-concept in 2013. AM-374 and AM-404 were other compounds under investigation ST-4070 Sigma-Tau neuropathic pain preclinical A reversible FAAH inhibitor in preclinical development in 2012. Source: Citeline’s Pharmaprojects

8 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news/policy & regulation briefs An Uncertain Future For Alkermes After Failed Trials submission to FDA and expected the drug Meanwhile, FORWARD-3 tested the 2mg to have an accelerated timeline. Alkermes dose in 429 patients. No treatment effect was CEO Richard Pops told the J.P. Morgan observed and Alkermes claims this is because Healthcare Conference earlier in the month of a greater than expected placebo effect. wavebreakmedia/shutterstock.com that the biotech had confidence in the FORWARD-5 is still ongoing and includes development program and that it was two dose levels, 2mg and 1mg. Based on expecting positive results from these two these negative results, Alkermes is increasing trials based on earlier efficacy. Pops also said the enrollment in the trial and said it will that two of the three last FORWARD studies update investors on timing of that trial later in are needed to show that ALKS 5461 is more the quarter. effective in treating patients who haven’t The most common adverse events were succeeded on other antidepressants to headache, dizziness, fatigue and nausea. submit an NDA. These events were in line with what was seen Alkermes efforts to create its own line of in the previous Phase # study, as well as the wholly-owned products beyond its side Phase II studies. business as a formulation expert have not Blockbuster drugs only work This is a major blow to the biotech, which been the most successful so far. In fact, data in a fraction of patients has been struggling with its wholly-owned released Jan. 21 could sideline one of its most products. Alkermes has expected ALKS-5461 promising efforts. Depression is an incredibly tricky to be its first blockbuster. The company already The biotech announced results from development area. Even drugs that have has two of its own drugs on the market – the closely-watched Phase III trials of major become blockbusters only work in a fraction of schizophrenia drug Aristada and the drug depressive disorder therapy ALKS-5461. Both patients and most patients have to try several addiction treatment Vivitrol. Neither has shown the FORWARD-3 trial and the FORWARD-4 drugs before they find one that helps them. much promise as of yet, but Aristada was just trial, which both tested the MDD drug FORWARD-4 tested two dose levels of recently approved. The company also collects versus a placebo, failed to meet their ALKS-5461, 2mg and 0.5mg, in 385 patients. royalties on several products from Johnson primary efficacy endpoints. There is still one Alkermes claims that there was a positive & Johnson and other companies that used FORWARD trial ongoing. trend toward efficacy in the higher dose Alkermes long-acting technology to create Alkermes was depending on these two and that this could potentially be used in an long-acting formulations of their products. trials to be the backbone of their regulatory NDA filing. [email protected]

Policy & Regulation Briefs Fauci: Rules Of Clinical Trials Must Not visited the site in Rennes to discuss their findings, JPM: Pharma Must Slip In Outbreaks with a view to looking afresh at the legislation Change Message On In the midst of a crisis like the recent Ebola governing clinical trials. Whether the legislation outbreak that swept through Guinea, Liberia and might need to change, and in what way, is hard to Pricing Sierra Leone, killing more than 11,300 people and say, given that we still don’t know what happened to cause the injuries to the trial volunteers, beyond When biopharma executives were asked sickening nearly 29,000, it’s tempting to just throw the fact that they had taken multiple doses of the everything the medical community has to offer at during the 34th Annual J.P. Morgan drug from Portuguese company Bial, BIA 10-2474, it in an attempt to save lives – something drug and Healthcare Conference what they thought a substance for the treatment of “neurological and vaccine makers and others conducting clinical trials of public concerns about prescription drug psychiatric pathologies.” (See p1, 8, 12 & 13.) often are under public pressure to do in desperate pricing, some dismissed it as a political situations. But if the principles and rules of science issue and others offered the same old Industry’s Pledges, Government Cash and ethics are not followed, biopharmaceutical Enough For Davos? explanations about recovering the cost companies and researchers engaged in medical of developing innovative medicines, yet For the first time, the drugs and diagnostics product studies could come to the end of an industries have banded together to produce a joint the industry appears dismayed about the epidemic or other health crisis and be left without declaration on tackling antimicrobial resistance, ongoing uproar. Rather than explain, once any knowledge that could help them the next time which they are heralding as a great step forward again, that its costs a lot of money and takes around – wasting everyone’s time and resources, in tackling the problem and launching during the a lot of time to produce new therapies or said Anthony Fauci, director of the National World Economic Forum in Davos, Switzerland. place blame on other parts of the US health Institute of Allergy and Infectious Diseases (NIAID), The pledges are, however, vague and include no care system, maybe the industry should part of the National Institutes of Health (NIH). specific financial commitments. The declaration calls on governments to front up the cash. come up with different answers and perhaps French Trial Tragedy: Investigations offer some options that could help reduce The declaration was drafted and signed by 85 Begin companies and nine industry associations from 18 the cost of life-saving or even curative A French Senate committee has intervened in countries. It lays out a common set of principles on medicines. After all, it’s not just politicians the debate over the Phase I study of a new drug antibiotic conservation and supporting research, and payers that have a hard time with drug that caused the death of one volunteer and left a and calls on governments worldwide to work pricing; doctors and patients also have number of others hospitalized, saying that it plans with industry to support R&D into new antibiotics, raised red flags. to meet with the government inspectors who diagnostics and vaccines.

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 9 headline news

World-Top Scientist Busted For Stealing GSK Secrets (Continued from page 1)

HER2 receptors on human body cells. She also antibody and the specific candidate for previously worked on structure modeling and clinical trials. antibody protein purification. Xue is credited Among the stolen documents was a GSK with successfully humanizing and patenting report detailing the design of experiment, at least four separate antibodies. Her latest Studio/shutterstock.com VTT validation and platform method instruction discovery, however, may be the lesson of the and verification of analytical method for cautionary tale: Crime doesn’t pay. Indeed, the quantitation of host cell proteins in Xue is now facing a possible prison term, fines monoclonal antibodies. Another described in and restitution, if convicted of the charges very specific detail GSK’s procedures to test against her. monoclonal antibodies, the indictment said. The case is another example of what Prosecutors pointed out that one firms struggle with in protecting their stolen document – a GSK research report information from being stolen and sold by husband, Yan Mei, a medicinal chemistry concerning the firm’s scientific research on insider rogue employees. According to the scientist with a PhD from the University of specific monoclonal antibody candidates independent bipartisan Commission on Iowa. Mei co-founded Renopharma Inc., targeting the HER3 receptor – was “clearly” the Theft of American Intellectual Property, which was incorporated in the US in 2012, identified as belonging to the company the US loses about $300bn annually due to with Xue and Tao Li, a molecular biologist and was marked “confidential” on the top of trade secrets theft, which the group said is with a PhD from the University of North each page. The bottom of the first page also “undermining the means and the incentive Carolina. They also formed two affiliates based read “unauthorized copying or use of this for entrepreneurs to innovate, ultimately in China – Nanjing Renopharma Ltd. and information is prohibited.” slowing the development of new inventions Shanghai Renopharma Ltd. The document described in detail the and industries that otherwise could be further Prosecutors said the companies were binding capabilities and other important expanding the world economy and raising created specifically to market and sell scientific characteristics of the antibody the prosperity and quality of life for the stolen trade secrets and other confidential candidates and concluded that the scientific globe’s citizens.” information. testing revealed that two specific candidates Lawmakers in the House and Senate last They said Renopharma “publically touted” warranted further testing based upon the year introduced legislation aimed at making itself as “a leading new drug research and positive results achieved. it harder for would-be thieves to snatch development company,” specializing in The indictment also revealed some of the corporate trade secrets and other confidential providing products and services to support disputes that went on among the schemers information – the Defend Trade Secrets Act drug discovery programs at pharmaceutical – disclosing that Xi complained in one email (S. 1890). and biotech companies. Also involved in the to her husband Mei that Yu Xue had been The White House also has put certain conspiracy was Xue’s twin sister, Tian Xue. “annoying” her recently. measures in place over the past few years In fact, to hide the proceeds of her crimes, Mei advised Xi not to lose her temper, to to try to coordinate efforts between federal Yu Xue put her ill-gotten gains under the which Xi replied, “I won’t … she is the queen.” agencies and law enforcement intended to names of her sister and other family members. A GSK spokesperson told Scrip the stop the pilfering of corporate trade secrets Tian Xue, an immunologist with a PhD from company was conducting a full internal and other information. the National Institute for Medical Research review into what occurred and would Prosecutors noted that Xue, who had in London, set up a computer system for continue to enhance the “multiple layers” of been with GSK since June 2006 before being Renopharma and also assisted her sister data protection it already has in place. terminated, had access to a wide array of GSK with some of the scientific processes for the “We take information protection very trade secret information. company. She also helped with the processes seriously,” she said, adding that GSK has been In the indictment, Xue is accused of that used the stolen GSK information and cooperating fully with the US authorities in emailing GSK trade secret and other trade secret procedures. the matter. confidential information involving about Yu Xue, Li, Mei and Xi also created She said GSK did not believe the a dozen or more products and numerous Humanabio Inc. as a US subsidiary of breach has had any material impact on company processes from her corporate Renopharma to hide their association the company’s business or research and e-mail account to her personal account with Nanjing Renopharma and Shanghai development activities. and then forwarding it to other schemers in Renopharma and to facilitate the parent While she said GSK encourages appropriate the plot. company’s objective of marketing, selling and sharing of information for the benefit of Prosecutors said she also used her GSK profiting from the stolen GSK information, science, patients and the firm itself, “at the computer to download a “substantial” prosecutors alleged. same time, we make it absolutely clear amount of trade secret information from the The indictment also details some of the that unauthorized transfer of proprietary company’s network onto a thumb drive and back-and-forth in the emails among the information outside of the company is a other portable storage devices and sending it co-conspirators and describes the types of violation of GSK global policies, procedures to her co-conspirators. Also charged was Xue’s GSK secrets and confidential information Xue and values.” colleague, Lucy Xi, who worked as a scientist had hijacked. For instance, one document Ultimately, though, like other at GSK from July 2008 until she departed the identified a specific GSK antibody under corporations, GSK is dependent on its company this past November. development, while another contained employees to fulfill those obligations, the Xi is accused of emailing GSK trade secrets information about the company’s strategy spokesperson pointed out. and other confidential information to her for developing an anti-HER3 monoclonal [email protected]

10 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news Questions Arise About Latest MannKind Deal The latest shenanigans to come out of that MannKind’s former investor relations This collaboration comes at a very MannKind Corp. were announced Jan. 21 person and CFO Matthew Pfeffer took over as advantageous time for MannKind, which when the failed biotech told investors that it CEO of the company. was promoting its “new path” at the recent has inked a collaboration with Receptor Life Despite silence from Receptor, Pfeffer J.P. Morgan Healthcare Conference in San Sciences Inc. for use of its technology platform. responded to requests from Scrip for Francisco earlier this month. The biotech’s According to a statement from the comment. “We have been in discussion for “blueprint for 2016” included putting the new company, MannKind will perform initial several months and are gratified we were CEO in place, creating new opportunities for formulation studies for Receptor, which will able to ultimately reach agreement that is its failed inhaled insulin Afrezza and building develop inhaled formulations of a number so beneficial for both companies. At this the company through deals for its technology of undisclosed therapeutic compounds. point, we have spent little and risked less in platform – the same platform that is the MannKind will transfer its technology to validating this possibility. Most of this work backbone of the newly formed deal. Receptor and leave development and is still ahead of us,” he said. “Even then, our Skepticism abounds – many investors have commercialization in its newly-formed costs are largely confined to supporting been questioning the legitimacy of Receptor hands. MannKind is eligible for $102.25m their efforts using existing personnel, so our as a real company, posting on both social in development and commercialization incremental out of pocket costs are minimal. media and investors message boards looking milestones, as well as double-digit royalties All the risk and virtually all the cost will borne for answers. on any product sales. There was no upfront by Receptor.” All of this comes just weeks after payment. Pfeffer noted that a substantial milestone MannKind’s big pharma partner Sanofi Investors seem to think this is great news. is expected later this year from Receptor. dumped the inhaled insulin Afrezza due to MannKind’s stock is up almost 9% in midday “Receptor is a newly formed private poor sales. Sales of the drug have not been training – although the stock still lingers well company created by prominent individuals broken out since it hit the market – a practice below $1 per share. in the Seattle area, who for reasons of their used by large pharma when a drug fails to hit Never heard of Receptor Life Sciences? own, prefer that their privacy be respected,” a certain sales threshold. You wouldn’t be alone. The newly formed added Pfeffer. In what many saw as a desperate move, entity was only described by MannKind Sanofi inked its deal with MannKind in as a pharmaceutical company based in Interesting Timing August 2014, laying out $150m upfront and Seattle, Washington that “is quietly laying the Duane DeSisto was appointed CEO earlier in promising $775m in milestone payments foundation for groundbreaking new products the month, but was conspicuously absent should the drug hit certain sales goals. in the specialty pharmaceutical market.” at the company’s recent conference calls Obviously, Sanofi wasn’t as confident in the Requests for comment from Receptor were and the company revealed the day after the prospects for Afrezza as it claimed to be when not answered. conference that his employment offer had it inked the deal – backloading the milestone The company has an empty website that been withdrawn – reportedly due to a conflict payments to keep risk down. was reportedly created Jan. 10, the same day of interests. [email protected] Merck Versus Merck: Trademark Wars Hot Up Merck & Co Inc. has filed a complaint against cybersquatting and breach of contract” in the branding in the US, including use on websites the company formerly known as Merck US on the part of the other Merck. US Merck which are specifically targeted to users in the KGaA with the US District Court of New is demanding a trial by jury in the case. US (despite KGaA claiming that its operating Jersey making a series allegations related to Since the two companies became distinct companies in the US today purportedly trademark infringement. entities almost 100 years ago, there have operate under the trade name ‘EMD’) as well The complaint follows ‘German’ Merck’s been regular skirmishes relating to their as on social media sites that are more broadly decision to rebrand itself in the lead up to respective uses of Merck on the internet and accessible, including in the US,” it complained. new CEO Stefan Oschmann taking up the in different jurisdictions. In addition, claimed US Merck, “KGaA has top job in April 2016, from the incumbent “Certain matters were not resolved between also recently engaged in other acts as part Karl-Ludwig Kley, although the issue has been the parties and KGaA initiated litigation against of a systematic pattern of behavior which ongoing for years. Merck and related entities in 2013 in the UK, is increasingly disruptive and damaging The latest flare-up follows Merck (of Germany and France,” noted US Merck. to Merck’s exclusive rights in the MERCK Germany) announcing in October that it The French court ruled in December 2015 trademarks and trade name in the US. KGaA was eliminating its Merck Serono and Merck that certain activities conducted by US Merck has taken a new direction and refocused its Millipore brands, and would be known simply were an infringement while others were not. efforts on becoming a major player in the US as Merck outside North America. Inside North Earlier this month, the English High Court market, including specifically in the immuno- America, where ‘US Merck’ owns the brand issued a judgment that US Merck had infringed oncology field where it directly competes with name, it would continue to use the EMD German Merck in certain activities in the UK. Merck, a well-recognized leader in that field.” prefix for its businesses. Merck (US) has come back by filing a broad- US Merck also noted in 2013, Stefan However, the complaint filed by US Merck reaching US complaint. Oschmann - then head of pharmaceuticals on Jan. 15 claims “trademark infringement, “KGaA has been making ubiquitous use for KGaA - stated that the US was viewed as trademark dilution, unfair competition, of ‘Merck KGaA, Darmstadt, Germany,’ ‘Merck an emerging pharma market for the German false advertising, deceptive trade practices, KGaA’ and ‘MERCK’ as a prominent feature of its company. [email protected]

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 11 headline news

Senate Skips French Trial Tragedy: FDA Launches Critical Measures ‘FAAH’ Safety Probe US regulators on Jan. 22 said they are BIA 10-2474 study participants already had In ‘Cures’ conducting a safety probe of fatty acid returned home, while two other volunteers While many stakeholders in the biomedical amide hydrolase (FAAH) inhibitors being were transferred to local hospitals within their community were happy just to see the developed and studied in the US after one residence areas. The other two remained at the Senate Health, Education, Labor and healthy volunteer in a French Phase I trial University Hospital of Rennes. Pensions (HELP) Committee finally unveil testing a product in that class died and five The FDA pointed out that catastrophic a plan for moving forward with legislation other participants experienced severe adverse adverse events in Phase I studies in the US aimed at making changes at the FDA neurological events. have been “extremely rare.” and the National Institutes of Health (NIH) In a statement posted on the FDA’s But the agency said it doesn’t hesitate intended to accelerate medical innovation, website, the agency said it was in the process to put a trial on clinical hold if regulators there also was disappointment that the of collecting and reviewing safety information determine participants might be exposed step-by-step strategy proposed by Sen. pertinent to FAAH inhibitors under unnecessarily to risk of illness or injury. Lamar Alexander (R-TN), the panel’s chair, investigation in the US following the tragedy In the US, study sponsors must collect ignores several measures, like one focused in France, which involved the first known “rigorous” laboratory and animal data and on antibiotics development, that were human fatality linked to an FAAH inhibitor. submit those safety data to the FDA in an included in a mega-bill adopted by the investigational new drug application (IND) House last July – the 21st Century Cures Act. before any human volunteers may be enrolled Sen. Patty Murray (D-WA), the HELP’s FDA will ‘ensure the safety of in a Phase I study, regulators explained. ranking member, who was supposed to participants in clinical studies The firms can’t start their trials until 30 days be Alexander’s partner on the legislative after submitting the IND – a period the FDA effort, has not fully embraced the chair’s and take regulatory action’ said its scientists need to review the safety piecemeal plan as a companion to the data and determine if the proposed study is massive Cures bill. The FDA noted that FAAH inhibitors have reasonably safe to move forward. Indeed, an aide to Murray told Scrip that been studied for their potential therapeutic The FDA said during its safety review of while the Washington lawmaker was eager use in a number of neurological disorders. the FAAH inhibitors, it would work with to continue her efforts on the medical But the agency emphasized no trials of BIA sponsors to “ensure the safety of participants innovation legislation “in a bipartisan way,” 10-2474 – the product involved in the Phase I in clinical studies and take regulatory action the plan Alexander laid out on Jan. 19 French study – currently are being conducted as appropriate.” doesn’t reflect an agreement between the in the US. The agency said it also would work with two senators on a path forward beyond BIA 10-2474 is manufactured by Bial-Portela manufacturers to ensure FAAH inhibitor the first mark-up session, which is slated to & Ca SA, a Portuguese firm, which had hired study participants and investigators are take place on Feb. 9. French contract research organization Biotrial fully informed about the risks and potential While Murray said she was pleased the to conduct the study, which has since been benefits of the drugs. “hard work on both sides of the aisle” is suspended. Johnson & Johnson unit Janssen Research moving the HELP to hold the upcoming The FDA said it was conferring with & Development LLC already has voluntarily mark-up session next month – where the European Medicines Agency and the suspended dosing “as a precaution” in its the committee will consider seven bills French National Agency for Medicines Phase II trials of its experimental FAAH that have implications for the FDA, NIH and Health Products Safety (ANSM) on what inhibitor, which was being tested as a and the drug and device industries – she had gone wrong in the Phase I study, which treatment for patients with mood disorders. insisted there was “much more to do to was being conducted at a clinical site in Janssen said it had not received any reports get patients the safe, effective, innovative Rennes, France. of serious adverse events in the studies of cures and treatments they are waiting for.” French Health Minister Marisol Touraine has its experimental FAAH inhibitor in patients The HELP will consider six more bills ordered two inspections – one by the ANSM with social anxiety disorder and in major during a March 9 hearing. On April 6, the and the other by the General Inspectorate for depressive disorder with anxious distress, or in committee is expected to hold its third Social Affairs. The Public Health Department of its earlier Phase I safety studies. and final mark-up session and complete the Paris Public Prosecutor’s Office has launched The firm said it would reevaluate its its action on the innovation agenda under an “enquête de flagrance” inquiry intended to decision to suspend dosing in the trials when preserve evidence at the scene. And the French it has additional information. Alexander’s plan. Senate’s social affairs committee is looking at A database run by Citeline, an affiliate Murray emphasized she wanted to see whether the current legislative framework on of Scrip, showed there’s only a handful of FAAH legislation that would address the burden trials needs to be tweaked. inhibitors in active development and about that high drug costs impose on patients Bial first disclosed the adverse events with a dozen others listed with no development and the need for “critical mandatory BIA 10-2474 on Jan. 15, reporting to officials reported – meaning there’s no evidence of investments in research and development that six of the volunteers had been hospitalized, continued development but neither any at NIH and the FDA.” with one of them considered brain dead – the official confirmation the products have been Read the full story online at: person who eventually died two days later at dropped – while three others have been http://bit.ly/1Szj70O the University Hospital of Rennes. Bial reported discontinued. [email protected] on Jan. 19 that one of the five hospitalized [email protected]

12 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news French Trial Tragedy: Janssen Halts FAAH Inhibitor Trial According to the study protocol, treatment with BIA 10-2474 produced no signs of toxicity in mice, rats, dogs and monkeys up to the no observed adverse effect level. In terms of its effects on humans, the protocol stated that there had been no previous experience. But it did highlight some potential flags: “Since BIA 10-2474 increases exposure to anandamide, endocannabinoid effects, such as catalepsy, hypothermia and hyperphagia, may be potentiated. Subjects should be informed about the possible occurrence of such effects and cautioned against rising rapidly after sitting or lying Dooder/shutterstock.com down ... Because of potential additive sedative effects, caution should be used when taking other CNS depressants.” There were few other clues to potential Unforeseen off-target effects may have led to this tragedy not the pharmacological class toxicity in in vitro tests in liver cells: “In human hepatic microsomes, BIA 10-2474 (up to 30 µ g/mL) produced minor inhibition in Janssen has voluntarily suspended dosing in study, which reveals some more facts: CYP2D6 and CYP3A4 (testosterone) and is two Phase II studies of its experimental FAAH BIA 10-2474 [its chemical name is: not an inhibitor of CY1A2, CYP2A6, CYP2B6, inhibitor JNJ-42165279; the drug is in the (3-(1-(cyclohexyl(methyl)carbamoyl)-1H- CYP2C8, CYP2C9, CYP2C19, CYP2E1 and same class as the compound at the heart of imidazol-4-yl)pyridine 1-oxide)], in contrast CYP3A4 (midazolam) activities in vitro,” the clinical trial tragedy in France. to some speculation, was designed to act the trial protocol stated. “BIA 10-2474 (up Janssen said it had stopped the trial as a as a long-acting and reversible inhibitor of to 30 µ g/mL) is not considered to be an precautionary measure. It stressed that it had brain and peripheral FAAH, “endowed with inducer of CYP2B and CYP3A, although not received any reports of serious adverse sustained inhibition of the enzyme.” further investigation with CYP1A2 may be events in its Phase II studies with its FAAH (fatty It was being developed by Bial for the warranted due to the effect observed in acid amide hydrolase) inhibitor in patients with treatment of medical conditions in which one of the donors used in this study. It has social anxiety disorder and in major depressive there is an advantage in enhancing the been predicted that the maximum plasma disorder with anxious distress, or in earlier, levels of endogenous AEA and tonically concentration of BIA 10-2474 achieved in Phase I safety studies of the drug. increasing the drive of the endocannabinoid humans is not likely to be >2 µ g/mL and, “We will re-evaluate our decision to system. BIA 10-2474 increases AEA levels therefore, it is unlikely that these inhibitions suspend dosing in these clinical trials when in the central nervous system and in will be of clinical significance.” we have additional information,” Janssen said. peripheral tissues. [email protected] While investigations continue into what happened during the Rennes study with Chronology Of A Trial this particular molecule (see p1 & 8), little is The French health minister, Marisol Touraine, told a press conference Jan. 15 that this was an “accident of exceptional gravity,” and gave known as to the cause of the adverse events an outline of the chronology of the trial. in the Phase I trial of Bial’s FAAH inhibitor She said Biotrial submitted an application to begin the trial on April 30, 2015, for a “substance intended to treat mood problems and BIA 1-2474. No safety signals were seen in anxiety as well as motor problems linked to neurodegenerative diseases.” other trials of products in the class, leading The regulatory agency ANSM gave the go-ahead for the trial on June 26, 2015, “in line with the current procedure.” The trial began on July 9, 2015. to speculation that the tragedy may not have The study was to include 128 healthy volunteers, men and women, aged 18-55. To date, 90 people had taken the product at various been due to the pharmacological class itself doses, while others received placebo. At first single doses were given, then multiple doses for several days. It was those who took but, rather, unforeseen off-target effects with repeated doses who fell victim to “serious undesirable events.” this particular molecule. The minister said that these volunteers took their first dose on Jan. 7, 2016, and the first symptoms appeared in one person who was The results from the first investigations by hospitalized on Jan. 10. The five others were then hospitalized as well. Biotrial said it stopped the trial on Jan. 11. Touraine expressed concern that she was only told of the incident on Jan. 14, four days after the comatose patient had been French drug and device regulatory agency hospitalized. “A more rapid alert would have been appreciated,” she told the radio station RTL. “It is true that faced with such a serious ANSM and by the General Inspectorate event, we would have expected the laboratory to make it known to the health authorities more quickly.” for Social Affairs are due by the end of the As for the study itself, ANSM said it was being conducted only at Biotrial’s Rennes clinical centre. The substance, in question, which month. ANSM has also decided to set up a had “potentially analgesic effects,” acted on an endogenous neurotransmitter, the agency said. special expert scientific committee to look The Phase I study comprised two initial stages in which no serious adverse events were reported. The third stage involved administration of multiple doses. The serious adverse events appeared with the highest dose tested in six volunteers. at the existing data on FAAH inhibitors. Few The Rennes university hospital centre (CHU) has issued a number of progress reports over the past few days. On Jan. 19 it confirmed details are yet available, other than that it is a that the patient who was in a coma died on Jan. 17, and on Jan. 21 it said three patients had been transferred to neurology services in temporary body (three months) made up of hospitals near their homes following improvements in their health, while two have returned to their homes. pharmacologists, toxicologists and neurologists. The Rennes CHU said that of the 84 other volunteers who took part in the trial, 28 have undergone a neurological examination and a In the meantime, ANSM has published cerebral MRI at Rennes and showed none of the clinical or radiological anomalies seen in the hospitalised patients. Ian Schofield the Phase I trial protocol for the Rennes

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 13 R&D bites R&D Bites Samsung Bioepis’s Etanercept To Be Rolled Out In Europe Samsung Bioepis Co. Ltd. has received a marketing approval from the European Commission for its biosimilar version of Amgen Inc.’s Enbrel (etanercept), the first etanercept biosimilar to be approved by the Commission and therefore likely the first to debut in Europe. But Sandoz is close Reinick/shutterstock.com Kim behind – the Swiss company’s biosimilar etanercept was accepted by review by European regulators in December 2015. The latest approval paves the way for the South Korean biopharma’s biosimilar to be gradually rolled out as Benepali (previously known as SB4) in 31 European countries Kyprolis Wins Full Monotherapy OK the Government of India has taken several steps - 28 EU member states as well as the The FDA on Jan. 21 granted Amgen Inc. approval since January 2013 regulations were published European Economic Area (EEA) member to market Kyprolis (carfilzomib) in combination with to clarify the scope and application of the rules states of Norway, Iceland and Liechtenstein dexamethasone or with Celgene Inc.’s Revlimid and to provide additional information on their - for the treatment of rheumatoid (lenalidomide) plus dexamethasone as a treatment for implementation.”These steps have been helpful arthritis, psoriatic arthritis (PsA), axial patients with relapsed or refractory multiple myeloma and have enabled a number of NIH-funded spondyloarthritis (ankylosing spondylitis and who have received one to three lines of therapy. US studies in India to resume enrolment of new non-radiographic axial spondyloarthritis) regulators also approved Kyprolis as a single agent for patients. We look forward to further elaborations and guidance on the Government of India’s and plaque psoriasis. Aside from Europe the treatment of patients with relapsed or refractory implementation of the rules, and to continuing multiple myeloma who have received one or more and South Korea, the company is also important collaborations with colleagues in India lines of therapy – converting the accelerated approval undergoing a regulatory approval for the mutual benefit of our citizens,” the NIH said. granted in July 2012 to a full approval. The news process for the etanercept biosimilar in The NIH essentially funds clinical trials in other gave shares of Amgen a 1.2% boost in after-hours Canada, she added. In accordance with a countries through grants and contracts. trading. Kyprolis’ initial accelerated approval as a commercialization agreement signed in single agent was for patients with multiple myeloma Zika Virus Vaccine Hunt Begins 2013 between Samsung Bioepis and Biogen who have received at least two prior therapies, The pharma industry’s (and the media’s) interest Inc., Biogen will lead the commercialization including Velcade (bortezomib), a drug marketed by in Ebola has begun to wane as more affected and distribution of Benepali in the EU and Takeda Pharmaceutical Inc. subsidiary Millennium African countries secure disease-free status from EEA member states. Samsung Bioepis, Pharmaceuticals Inc., and an immunomodulatory the World Health Organization, but another tropical agent, and have demonstrated disease progression established in 2012, is a joint venture condition has started to capture headlines – between Samsung Group affiliate Samsung on or within 60 days of completion of the last therapy. Zika virus (ZIKV), a mosquito transferred disease BioLogics and Biogen. Sean Harper, Amgen’s executive vice president of reportedly responsible for approximately 4,000 research and development, pointed out that Kyprolis child birth defects since Oct. 2015.This time the High Hopes For Merck/AiCuris is the only approved therapy for relapsed multiple focus is on Brazil, the location for the 2016 Olympic HCMV Candidate myeloma with proven efficacy as a single agent, Games, where an outbreak of ZIKV is thought Chimerix Inc.’s dramatic Phase III flop of its oral doublet and triplet combination that’s offered in a to be responsible for more than 3,893 cases of antiviral brincidofovir in human cytomegalovirus variety of doses, which he said would meet individual suspected microcephaly in newborns since Oct. (HCMV) was not a disappointment to everyone. patient needs. last year. This number represents a huge increase Merck & Co. Inc. and its little-known German partner in the condition that causes children to be born AiCuris, which have Phase III data due later this year NIH Resumes Indian Trials, with abnormally small heads and brain defects, on their oral product letermovir (AIC246), suddenly Will Others Follow? which affected only approximately 150 babies in found themselves in the lead with a very promising More than two years after it cut back on the whole of 2014 in Brazil. ZIKV is generally mild next-generation candidate for the treatment of Indian clinical trials, the US National Institutes and only causes symptoms in one in five people HCMV. Merck’s stumped up €110m upfront in of Health (NIH), the largest public funder of and the link between ZIKV and microcephaly 2012 for Bayer spin-off AiCuris’s then-Phase II stage biomedical research in the world, appears to has not been clinically established. However, 49 letermovir. The US group also agreed to pay up to have recommenced activity in the area, albeit babies with suspected microcephaly have died €332.5m in additional milestones, plus royalties on on a cautious note. The return of the NIH, some and Brazil’s health ministry says in five of these sales. AiCuris CEO Dr Holger Zimmermann told Scrip industry experts say, could boost the confidence cases an infection with ZIKV was found. No other that AiCuris had yet to earn any of the milestone of several sponsors still evaluating the prospects explanation for the surge in microcephaly has payments, but he anticipated that would change of placing large studies in India in the backdrop of been suggested and the US Centers for Disease when the Phase III data become available. The trial is evolving trial regulations. These experts, however, Control (CDC) has issued interim guidelines for slated for completion in the third quarter of this year. add that while the worst may be over, India’s pregnant women during this ZIKV outbreak, which “Enrolment went much faster than we expected,” he clinical research segment is not out of the woods include suggesting all pregnant women consider said. In the trial letermovir is being administered on yet and regaining lost ground will be a slow postponing travel to areas where ZIKV transmission a prophylactic basis to bone marrow recipients. journey. The NIH told Scrip that it is aware that is ongoing.

14 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news Amgen Fails At US Patent Board In Humira Challenge Amgen Inc. failed to convince the US Patent AbbVie’s argument that its intellectual property of patents under IPR reviews and whether & Trademark Office (US PTO) Patent Trial and and litigation strategy could protect Humira the board’s decision to institute those Appeal Board (PTAB) to institute trials under from biosimilar entry in the US until 2022. proceedings should be judicially reviewable so-called inter partes reviews (IPRs) in the Drug makers initially were slow to pursue – with the petitioner in the case, Cuozzo company’s challenge of two patents, known as IPRs. But there’s been a significant uptick in Speed Technologies, backed up by the ‘157 and ‘158, held by AbbVie Inc. on its tumor the past year in the number of petitions filed large biopharmaceutical trade groups, the necrosis factor blocker Humira (adalimumab). by those types of firms – particularly generic Pharmaceutical Research and Manufacturers In a twist, Amgen, whose own products manufacturers and biosimilar companies. of America and the Biotechnology Innovation have been the targets of biosimilar makers, Indeed, an analysis by the law firm Fish & Organization, in complaining the “broadest is pursuing a biosimilar version of Humira Richardson found that of the IPR petitions reasonable interpretation” used now by the – disclosing this past November it had filed as of Sept. 30, 2015, 9% involved US PTO’s board has resulted in unprecedented submitted a 351(k) application to the FDA, biopharma patents. Over half were denied, levels of patent claims being invalidated. which is expected to soon make a decision on while about 31% were granted and nearly The fact Amgen’s petitions failed at the whether to accept it. 18% were granted in part. patent board, said BMO’s Arfaei, is “indicative” of The IPR proceedings were created under With IPRs relatively inexpensive to file, the patents’ strength “or the weakness” of the the American Invents Act of 2011 as a faster biopharma firms are turning to them to “clear company’s argument. He doubted whether and more affordable alternative to litigation the deck” before pursuing litigation in the Amgen would be able to invalidate the ‘157 for challenging patents and whose use district courts, said Elaine Herrmann Blais, a patent in particular at the US district court. has grown far beyond what the US PTO partner and head of litigation at Goodwin The watch is on to see what type of path anticipated. An IPR may not be instituted Procter’s Boston office. Her colleague, Amgen will take in its defense under the unless the information in the petition shows Alexandra Lu, an associate in the litigation Biologics Price Competition and Innovation Act there is a reasonable likelihood the petitioner group at firm’s Boston office, noted that a after it hears from the FDA on its adalimumab would prevail in at least one of the claims party cannot appeal the PTAB’s decision biosimilar application, given the company challenged. But the PTAB said it was not granting or denying institution. currently is in the midst of legal disputes persuaded by Amgen. The Supreme Court on Jan. 15 said it involving copycats of its biologics against BMO Nesbitt Burns analyst Alex Arfaei said planned to hear its first case on the standard Sandoz Inc., Apotex Inc. and Hospira Inc. he believed the PTAB’s decision strengthens used by the PTAB in deciding the validity [email protected]

EXECUTIVE OF THE YEAR WINNER: DR GE LI, CHAIRMAN AND CEO OF WUXI PHARMATECH

The judges were impressed with how Li has led WuXi’s growth, since its founding in 2000 with a single laboratory to an industry-leading open-access capability and technology platform with over 10,000 employees and global

facilities. The qualifying year saw the platform enable more than 2,000 collaborations worldwide and WuXi make

huge strides in strengthening its R&D pipeline. I am deeply honored and inspired by this award. I would like“ to thank our many customers and part- “ners for their tremendous support for our efforts. It has been our great privilege to help bring some of the most innovative healthcare products closer to patients.

Dr Ge Li, chairman and CEO of WuXi PharmaTech

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 15 business bulletin Business Bulletin first part of the “Invest in Italy” roadshow took place Acorda Picks Up Voin_Sveta/shutterstock.com on Jan. 11 in New York, followed by a second leg at the JP Morgan Annual Healthcare Conference Late-Stage Parkinson’s in San Francisco. The events were organized by Candidate the Italian Trade Agency, which promotes the Acorda Therapeutics Inc.’s president and CEO internationalization of Italian companies under the umbrella of the Economic Development Ministry, Ron Cohen has been dropping hints for some to allow domestic firms to meet with potential months that he was pursuing significant investors. The San Francisco leg included a Jan. 13 business development opportunities and the 2 after a second patient taking beloranib died conference attended by C-suite representatives EU was his preferred hunting ground. Finally, from a pulmonary embolism. The biotech reported of Italian firms such as Angelini, Chiesi, Dompé, on Jan. 19, Acorda said it has agreed to acquire the first patient death in October when a patient Menarini, Italfarmaco, Recordati, Rottapharm and Biotie Therapies Corp. of Finland for around taking the drug in the blinded portion of the study Zambon, as well as Italian executives from Italian $363m. Biotie has a Parkinson’s disease drug died from blood clots in the lungs. The second subsidiaries of major multinational companies. candidate in Phase III which has a mechanism patient death occurred during an open-label Entitled “Healthcare: Italy on the move”, the of action that has caused problems for other extension phase of the trial; two other patients conference heard from the likes of Italy’s deputy also experienced non-fatal pulmonary embolisms. minister of economic development, Carlo Calenda, companies. The acquisition gives Acorda Patients in the open-label extension study were who said his government had begun a process worldwide rights to tozadenant, an oral screened to make sure they weren’t at increased of reforms to support the pharmaceutical sector adenosine A2a receptor antagonist currently in risk of developing blood clots. through the whole value chain in order to help a Phase III trial called TOZ-PD for the treatment attract and maintain investments by international of Parkinson’s disease. The product had been ACCF ‘Open For Business’ players. According to slides produced by the Italian partnered with Belgium’s UCB but Biotie International investment group Abingworth has pharmaceutical industry body Farmindustria, regained full rights in 2014 after a “portfolio closed its eleventh life sciences fund, raising $105m Italy’s pharmaceutical market in terms of retail reprioritization” on UCB’s part. Tozadenant for its Abingworth Clinical Co-Development Fund and hospital sales is the third largest in Europe, was originally licensed to UCB in 2010 and (ACCF) which will offer a novel co-development and the industry consists of some 200 companies UCB paid Biotie $20m to exercise its license investment approach in the life science space. generating €29bn in manufacturing value and ACCF will co-invest with other Abingworth investing around €2.5bn in R&D each year. in February 2013.The Phase III study, initiated funds in late-stage therapeutic clinical programs, in July 2015, is a randomized, double-blind, sourced from external pharmaceutical and Gavi Backs Merck & Co’s Ebola Vaccine placebo controlled trial evaluating tozadenant biotech groups seeking to advance their assets Gavi, the global vaccine alliance, has promised in 450 Parkinson’s patients experiencing end- via Abingworth’s co-development portfolio Merck & Co. Inc. that it has a customer for its of-dose wearing off episodes. Biotie reached companies. Abingworth says the fact that the Ebola vaccine candidate rVSV∆G-ZEBOV-GP, an agreement with the US FDA on a Special ACCF’s raising was oversubscribed - exceeding the only vaccine with Phase III data for the Protocol Assessment of this study. Top-line data its target of $100m – reflects a desire by players deadly viral infection, through the signing of an from the double-blind portion of the study are to avoid stock market volatility and focus on ‘advance purchase commitment’. The agreement, expected to be available by the end of 2017. promising science that is supported by substantial announced at the World Economic Forum in late-stage data and subjected to robust due Davos on Jan. 19, is aimed at helping Merck “Tozadenant is a compelling opportunity with diligence. Abingworth managing partner Tim take the vaccine through licensure and WHO potential market exclusivity to 2030. The Phase Haines said “a key attraction is that, as far as we prequalification. Under the commitment, Gavi II data were highly statistically significant and know, this business model is unique and the ACCF has provided $5m towards the development clinically meaningful. We are targeting an NDA is the first dedicated co-development life science of Merck’s rVSV∆G-ZEBOV-GP live attenuated filing by the end of 2018,” said Cohen. fund.” He said the risk profile of ACCF is different Ebola Zaire vaccine, on the understanding that from Abingworth’s venture funds. “It offers good it will be filed for approval by the end of 2017. If Zafgen Optimistic, But No Clear Path potential returns. It’s unrelated to public stock approved, it will likely be the world’s first licensed For Beloranib markets. And the timelines will be shorter because Ebola vaccine and Gavi would be able to begin Zafgen investors are clinging to any bit of hope they are pre-agreed terms. We take the assets purchasing the vaccine to create a stockpile for they can, pushing the stock up after the obesity from a large pharma or biotech,” Haines explained. future outbreaks. Additionally, Merck has agreed drug maker announced positive clinical trial data. Abingworth’s portfolio companies – Avillion LLP to ensure that 300,000 doses of the vaccine are Yet, safety signals still linger and an FDA clinical and / or SFJ Pharmaceuticals – then run them available from May 2016 for use in expanded use hold remains the largest obstacle to Zafgen through clinical studies, to pre-agreed milestones. clinical trials and/or for emergency use as needed moving beloranib forward. The biotech’s stock “We can predict those timelines, and then our while vaccine development continues. Merck has jumped 78.65%, or $4.42, to close at $10.04 on companies can offer the asset back to the parent or already submitted an application through WHO’s Jan. 20 after Zafgen announced that results of owner of the asset on pre-agreed terms.” He said Emergency Use Assessment and Listing (EUAL) the Phase III bestPWS ZAF-311 trial were finally the attraction offered to pharma and large biotech procedure. If the EUAL is approved, the vaccine to available. While the trial showed statistically is the possibility to progress some R&D assets be used if another Ebola outbreak occurs before significant efficacy on both clinical endpoints which might not otherwise get spending priority. the vaccine is licensed. The 2014 Ebola epidemic when compared with a placebo in patients with in West Africa claimed the lives of more than Prader-Willi syndrome (PWS), the death of two Italian Industry Roadshow Hits The US 11,300 people and infected over 28,600. It also patients during the trial and concerns about The Italian pharmaceutical industry has been had a devastating impact on health systems with pulmonary embolisms threaten to derail the busy polishing up its profile abroad. Having taken disruptive effects on childhood immunization program permanently. Zafgen CEO Tom Hughes part in government-sponsored “Invest in Italy” programs. On 14 January 2016, WHO announced expressed optimism on a call with analysts, saying roadshows in Turkey in October 2015 and Japan that no new Ebola cases had been reported in the he expects things to move swiftly now. Yet, the in November 2015, a number of leading Italian three worst affected countries in the preceding 42 elephant in the room was the complete clinical companies recently headed to the US to explain days. However, shortly following the news, Sierra hold that the regulatory agency imposed on Dec. why the Italian industry is worth investing in. The Leone reported an Ebola-related death.

16 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 headline news Will Supreme Court Lift ‘IPR Pressure’ Off Biopharma? The US Supreme Court on Jan. 15 said it “By putting more pressure on patents and Kyle Bass, chief investment officer at would hear a case to decide if the US Patent creating more uncertainty about whether your Hayman Capital Management, and his self- & Trademark Office (US PTO) Patent Trial and patent will stand up to a challenge or hold up created Coalition for Affordable Drugs, also Appeal Board (PTAB) is using the proper in a real commercial dispute, you are affecting has become notorious for using IPR petitions standard when it determines the validity of corporate decision-making in an industry to try to take down biopharma patents. a patent under so-called inter partes reviews where there already are so many business BIO complained in its amicus brief that (IPRs) and if the decisions to hold those uncertainties,” like the probability the medicine under the PTAB’s use of the BRI standard, a proceedings should be judicially reviewable. will fail in clinical trials or be unable to attract patent is “systematically more likely to be While the case, known as Cuozzo Speed enough investment, Sauer explained. found invalid” than under the Phillips standard Technologies v. Michelle K Lee, doesn’t involve Piling on the uncertainty about used by the district courts. biopharmaceutical companies, its outcome intellectual property in the face of the “Clearly, the PTAB is invalidating patents at could have broad implications for the types growing use of IPR petitions, which could an extraordinary rate,” the biotech trade group of products drug makers eventually decide wipe away a firm’s patents, may lead to a asserted. to pursue for investment and development, tipping point, where a company decides In a relatively short time, the PTAB has “cut a said Hans Sauer, deputy general counsel “to play it safer and pursue another product remarkable swath through the ranks of issued for intellectual property at Biotechnology that may be less innovative, but has more patents with barely a light tap on the brakes Innovation Organization (BIO), which filed robust patent protection,” he said. by the Federal Circuit,” BIO argued. an amicus brief in support of the firm that If the Federal Circuit’s decision is left to brought the appeal against the US PTO. stand, it would “introduce considerable At issue is whether the US Court of Appeals ‘Pressure on patents and uncertainty in the construction of patent for the Federal Circuit erred when it ruled that, more uncertainty about claims, increase the risk of conflicting invalidity in IPR proceedings, the PTAB may construe decisions and undercut a central reform that claims in an issued patent according to the whether they will stand up to Congress enacted to strengthen the US patent so-called “broadest reasonable interpretation” system” – consequences that “threaten the (BRI) rather than their plain and ordinary a challenge affects corporate predictability and strength of protection that meaning – often referred to as the “Phillips” decision-making’ the patent system provides to innovators and standard – which is used by district courts. the public alike,” the Pharmaceutical Research The Supreme Court also is taking a look “That’s not something we want in biotech,” and Manufacturers (PhRMA) said in a separate at whether a party may bring a challenge to Sauer insisted. “We want companies to brief filed with the high court. the Federal Circuit of a decision by the PTAB develop the most innovative and best drugs. The Supreme Court’s review is necessary “to to institute an IPR – trial proceedings created If companies decide to develop only the effectuate Congress’ intent that patent claims under the American Invents Act (AIA) of drugs with the best patents, that’s not always in IPR proceedings be given their ordinary and 2011 that were intended to be a faster and the same thing as the best drug that could be customary meaning,” PhRMA argued. more affordable alternative to litigation for developed. It creates the wrong incentives. It’s The group contended that under the challenging patents and whose use has grown not right for the industry to be under this kind Federal Circuit’s decision, a patent claim far beyond what the US PTO anticipated. of pressure from IPRs when all you want to could be correctly found valid by a district If the Supreme Court decides the PTAB do is make a rational investment decision, but court under the Phillips standard, but also has been using the wrong standard, it you have to start worrying about IPRs, which correctly found invalid by the PTAB in an IPR potentially could call into question the results has absolutely nothing to do with whether proceeding under the BRI standard. of a number of IPRs, William Jay, a partner your drug is going to work and what unmet “That new reality clouds and diminishes at Goodwin Procter, co-chair of the firm’s medical need it will meet.” patent rights to the detriment of patent appellate litigation practice and head of Biopharmaceutical firms initially were slow holders, innovators and the public at large,” the litigation in Washington, last fall told Scrip. to pursue IPRs. But there’s been a significant big pharma trade group asserted. “Uncertainty uptick in the past year in the number of regarding the scope of patent claims and their Under Pressure petitions filed – particularly from generic validity is costly to the inventive community The IPR challenges, which have resulted in manufacturers and biosimilar makers. and discourages innovation.” unprecedented levels of patent claims being Indeed, an analysis by the law firm Fish & invalidated – with most patents, about 85%, Richardson found that of the IPR petitions The Cuozzo Case not surviving the proceedings under the filed as of Sept. 30, 2015, 9% involved The Cuozzo case stems from a PTAB decision PTAB’s BRI standard – have put more pressure biopharma patents. Of those, over half were involving the firm’s ‘074 patent, which on biopharmaceutical firms in their corporate denied, while about 31% were granted and covers certain components used in global decision making, BIO’s Sauer told Scrip. nearly 18% were granted in part. positioning systems. “It’s the kind of pressure that we don’t According to the US PTO, as of Dec. 31, Garmin International Inc. and its subsidiary think is desirable for drug and therapeutic 2015, there’s been about 4,000 IPR petitions Garmin USA Inc. filed an IPR petition challenging development,” he lamented. filed since September 2012. claims 10, 14 and 17 of the Cuozzo ‘074 patent. Sauer said BIO hears frequently from its Of the 403 total AIA petitions filed so far The PTAB determined the claims were members that the “availability of IPRs is in fiscal year 2016 – IPRs, covered business “obvious” and invalidated them. The board changing the way companies decide to take methods and post-grant reviews – 16% also denied Cuozzo’s motion to amend the which products forward into development involved biopharmaceutical companies, the ‘074 patent by substituting new claims. and where to make investments.” agency reported. On appeal to the Federal Circuit, a three- ➤

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 17 headline news Snowed-Out Sarepta Panel Will Supreme Court Lift ‘IPR Pressure’ Off Biopharma? (Continued from page 17) Likely Delays FDA Verdict judge panel held that the court lacked With the major winter snowstorm slamming even Janet Woodcock, the FDA’s director of jurisdiction to review the decision to the Washington area, the FDA decided to the Center for Drug Evaluation and Research, institute the IPR and affirmed the PTAB’s postpone the highly anticipated Jan. 22 planned to be there, as did Rep. Michael final determination – finding no error in meeting of the agency’s Peripheral and Fitzpatrick (R-PA), who has called on the the board’s claim construction under the Central Nervous System (PCNS) Drugs agency to quickly approve products for DMD. broadest reasonable interpretation standard, Advisory Committee, although regulators The FDA, in fact, cited high public interest its obviousness determination and its denial gave panelists, patient advocates and others when it released its main briefing documents of Cuozzo’s motion to amend. planning to attend the hearing little warning on Jan. 15, well ahead of the Jan. 22 meeting. Cuozzo filed a petition for rehearing en ahead of time. The briefing documents, however, were bad banc by the full Federal Circuit, which was The FDA was convening the adcomm news for Sarepta – whose shares took a beating supported by numerous amici, including the to seek the PCNS committee’s advice on Jan. 15, plummeting 60%, before closing the PhRMA, Eli Lilly & Co., GlaxoSmithKline plc, about whether Sarepta Therapeutics Inc.’s day at $14.28, a loss of $17.35, or 55%. Johnson & Johnson, Pfizer Inc. and Sanofi SA. Duchenne muscular dystrophy (DMD) drug The Jan. 22 meeting was supposed to But the Federal Circuit in July 2015 declined eteplirsen could be safely marketed in the be Sarepta’s chance to defend its drug and to rehear the case. US and if the experimental medicine is dispute the FDA’s negative analysis, in which Cuozzo filed its writ for certiorari with the efficacious in treating the severely debilitating regulators raised considerable doubts about Supreme Court this past October – the first neuromuscular disease, which results from eteplirsen’s effectiveness in treating DMD and company to seek such an appeal. mutations, usually partial deletions, in called into question the medicine’s ability to Cuozzo argued that its case was an the gene coding for dystrophin, a protein increase dystrophin levels. “excellent vehicle that would allow the essential for normal muscular structure and It was also supposed to be another chance court to resolve both the scope of the function and the lack of which is at the heart for the DMD community to plead with the Federal Circuit’s jurisdiction and the claim of the condition. FDA to approve a drug for the patients who construction standard that applies in IPR Sarepta is seeking approval of eteplirsen, are desperate for a treatment – especially after proceedings.” which it wants to market as Exondys, as a BioMarin Pharmaceutical Inc.’s experimental Cuozzo contended that even if the treatment for DMD amenable to exon 51 Duchenne medicine Kyndrisa (drisapersen) court were inclined to stay its hand on the skipping, which makes up about 13% of the was rejected last week by the FDA and by the reviewability question, it nevertheless should total Duchenne population. PCNS this past November. grant the claim construction question, which But the snowed out meeting likely now If the FDA rejects eteplirsen, it would mean the company argued is entirely separate and means a delay in the FDA’s verdict for the exon 51 DMD community would be independently merits review. eteplirsen, whose Prescription Drug User Fee left without a drug near-term, RBC Capital’s “Given the clear importance of the issue, Act action date is Feb. 26. Simeonidis said. this court’s review will be needed at some The four-week timeframe between the The FDA’s Jan. 20 late-day notice that it was point, and there is no reason to await a further PCNS panel and the drug’s PDUFA already postponing the eteplirsen meeting – which headcount of the court of appeals,” Cuozzo said. was short, RBC Capital Markets analyst Simos came just before 5:30pm EST, after the US US PTO Director Michelle Lee ended up Simeonidis pointed out. markets had closed – whacked Sarepta’s as the respondent in the case because she He anticipated that with the postponed shares again. intervened at the court of appeals to defend adcomm, the FDA likely would delay its Indeed, the stock, which already had the decision of the PTAB after Garmin reached decision for eteplirsen by at least four weeks. experienced a rough day on the market – a settlement with Cuozzo and withdrew from But given the high-profile nature of the tumbling 10.3%, before closing at $13.26, the case. adcomm and the pressure and scrutiny the down 18 cents, or 1.34% – fell 2.7% in after- The US PTO argued in its brief the questions FDA is under to get to a decision, Simeonidis hours trading following the FDA’s decision to raised by Cuozzo should be addressed by the said he doubted the agency would wait ax the Jan. 22 meeting. pending legislative measures currently making longer than two-to-four weeks to hold the The first sign regulators were considering their way through Congress – letting lawmakers, rescheduled PCNS meeting, although he also shutting down the meeting was when if they choose, to implement a “different claim- acknowledged the difficulty regulators may the remaining documents expected to construction standard than has ever been used have in keeping most of the same expert be released on Jan. 20 – agenda, FDA’s in an administrative proceeding to determine scientists and clinicians who were slated to questions for the PCNS and the roster of the validity of an unexpired patent.” serve on the Jan. 22 panel. panelists – failed to post online at their But while BIO’s Sauer said his group supports While the delayed meeting translates anticipated timeline of 48 hours before the many of the patent reform measures pending into more “anxiety for patients, companies, start of the Jan. 22 meeting. Regulators gave on Capitol Hill, which he said could bring investors and analysts,” it also gives patient no hints about how soon the PCNS meeting more clarity to the AIA, he disputed the US advocacy groups more time to continue to would be rescheduled. PTO argument the agency has been right all campaign against the negative tone of the The agency’s postponement notice said along and that Congress was pursuing the new FDA’s briefing documents, he said. to watch the Federal Register – the place legislation to alter the law because it’s had a Indeed, the meeting was expected to be where the US government informs the public change of heart from what it passed in 2011. well-attended by the muscular dystrophy of federal actions, including plans for public “I don’t think that’s a very strong argument,” patient advocacy community – one of the meetings – for a future meeting date. Sauer said. most active patient groups in the US – and [email protected] [email protected]

18 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 “THe Pink sHeeT” & scriP inTelligence Marketing SolutionS

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Matt Dias • HeaD of aDvertising Phone: +44 (0) 20 701 74188 Email: [email protected] “The Pink Sheet” expert view JPM Roundtable: Biotech Execs Expect Capital To Flow Informa Pharma’s global director of content Hambrecht & Quist [the original J.P. Morgan really different, that never existed before. Mike Ward and Scrip’sWest Coast editor Healthcare Conference organizer] to start our It is always less challenging to raise Mandy Jackson moderated a roundtable firm, there were probably 10 or 15 major VC money as a public company versus a private discussion on Jan. 11, the opening day of firms – Kleiner Perkins or MPM – and what company. Raising money as a public company the 34th Annual JP Morgan Healthcare I’m noticing now is that the range of people is a function of your share price, and if the Conference, in San Francisco during which investing in this industry is very wide. market isn’t that great then the share price they spoke with eight biotechnology I am less concerned about the boom and would have some sort of discount applied to veterans about the state of biotech going bust than I was before. It was a lot of money it. As a private company, you just don’t have into 2016. [raised in biotech], but a lot of companies are that luxury; your money is locked in. The executives, including an advisor and a pretty well funded and there is a lot of data I had a European fund manager say to venture capitalist, were fairly optimistic about coming this year, so I think luckily we don’t have me once that he would rather invest in the the potential for high-quality companies to look at the day-to-day swings like we used to. world’s most mediocre public company than to raise capital this year and to attract Stanley Erck: I’ve been on [initial public the most exciting private company. And big pharma buyers or partners, despite offering] roadshows, and Synergen or remember – this is a fund manager; he is not declining biotech stock values – the Nasdaq somebody went down and it stopped the a VC – so it is a very different type of return. A Biotechnology Index (NBI) was down 11.8% industry for years for IPOs. One company functional public market is very advantageous versus the end of 2015 on the first day of the would affect the IPO candidates. for this industry. J.P. Morgan conference and the NBI was down Purcell: Who would have thought five A lot of our investors are long-term, but 17.7% as of Jan. 22. years ago that Gilead had a higher market they certainly do appreciate liquidity. We are Portions of the edited roundtable value than Pepsi? It’s one of the great fortunate that our investors are still firmly transcript below give a glimpse of the American companies and Gilead has a higher in the black. It is not exactly a consolation, participants’ views on biotech deals and market cap. but when [your stock is] less down than dollars. The group included: Accera Inc. CEO Jackson: Do you think this wobbling right your peers, there is a certain tiny amount of Charles Stacey, Novavax president and CEO now of biotech stock values has more of consolation in that. Stanley Erck, Symic CEO Ken Horne, Corbus an impact on companies that are already Andrew Hirsch: But it depends on Pharmaceuticals CEO Yuval Cohen, Trifermed public, and smaller companies, as opposed what part of the public market, because as president and CEO Sergi Trilla, Aisling Capital to private companies that are out there we all know this is a really risky business. founder and senior advisor Dennis Purcell, raising funds? Things rarely work the first time and it takes BIND Therapeutics president and CEO Andrew Purcell: There is a lot of private capital out patience. So, if your capital base is people Hirsch, and Alder Biopharmaceuticals chief there. If you look at the traditional [limited who are looking to invest, and you’ve got a business officer Mark Litton. partners (LPs)] one of the big misnomers data inflection point in six months, and I am is that everything has to be a 10x [return]. investing for that data inflection point, that Mike Ward: What has been really But most of the people, like [the pension is a hard thing. Because if [the data] doesn’t interesting in recent years is the tons of fund California Public Employees Retirement go the way you want, then they’re gone and money that has been raised by this industry, System (CALPERS)], if they can get 600 basis then you don’t have the support. which I calculated at about $100bn in two points better than the [Standard & Poors (S&P) They come in all different flavors; they years. Are we now seeing the strains and index], they are happy. So if the S&P is flat come in the fast hedge funds, that are in and stresses and concerns about whether or next year and we give them an 8% return or out [of the stock] on every little thing. They not that money is going to continue to be 10% return, they are ecstatic. are trading around earnings; they are trading available? And with that money that you’ve So I think there is a lot of capital trying to around data. They can be helpful in an IPO to got in the bank, how does that change the chase returns right now, because there is bring capital on board, but they are not there dynamics in terms of the have and have-nots nowhere else to put your money. And even to help build your company for the long term. and also in terms of partnering? though everything has gone down – the I think the key is to really find those investors Mandy Jackson: The market is looking pretty [biotech exchange-traded funds (ETFs) known that believe in what you are doing, believe in rough for biotechs already this year, only a week as the] IBB, the XBI, the NBI – they were up your technology, get that it might not work and half in. Do you think that that is emblematic 10%, 11%, 12% last year. That’s better than the first time, and that are going to be willing of the way the rest of the year will go, or is this CDs; better than Apple stock. to put the second and third dollar in. That is just a reconfiguring of expectations? Ward: So thinking about the early stages, to me what is important. Those investors are Dennis Purcell: Last year, about are any of you trying to raise money at the there, and they have always been there and 900 companies raised money and moment or would like to raise money? I know they are still there. notwithstanding what has happened in the with biotech that is the idea, you have always I think the difference now versus when last couple of days or the last week in the got your hand out, but in terms of if you are we went public in September 2013 is that [stock] market, I think that one of the things looking at it, have people missed the boat? a lot of the generalists are gone. I think the that strikes me is how big the ecosystem has Yuval Cohen: We are a Nasdaq company, we generalists came in and drove up these gotten. It used to be that if one company debuted in April. [But for early-stage companies] valuations, because they were looking failed a trial then everybody’s stock] went one big difference is that VCs are no longer the for returns that they weren’t able to get down, but that is just not the case anymore. default financing. Our financing wasn’t done anywhere else, thanks to the large cap The industry is very well financed. Another with a single VC; it was done with two hedge biotech earnings growing rapidly and those thing about the ecosystem is that it is funds, a bunch of high net worth individuals stock prices following, and that brought all financed by non-traditional names. When I left and a patient advocacy group. I think that is the capital in. They have all gone because

20 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 expert view the [biotech IPO] class of 2013/2014 they proactive interest. Geographically there is a lot we see a shift away from it being the pharma have used that capital, they’ve gotten data, of options for companies to raise money. guys having to pay top dollar? not everything worked – surprise, surprise – Purcell: Are you guys spending a lot of Purcell: I don’t have the math with me, but and the generalists ran for the hills. They said, time in the Middle East? if you assume your drug is going to be a $2bn “Wait – this isn’t riskless?” Stacey: I am not personally, no. drug and let’s say you get a 20% margin, so Now you are back to a more normal Purcell: You would rather be in Asia than $400 million. Then let’s say you’re five years [stock market], which is healthy, where not the Middle East? or seven years away from getting a product every company that files an S1 [registration Stacey: It is just where the interest has [launched], and let’s say you have to discount statement with the US Securities and come from, for us. that back, because of the risk, by 20% to 25% Exchange Commission (SEC)] is going to go Mark Litton: Somebody once told me, and or something like that, you start to do that public and get a 40% bump on the first day I thought it was excellent advice, valuations math and the present value of some of these of trading. That’s healthy and I think that’s a have never killed a biotech company. I mean, companies is tight. If you just give everybody good place to be. if you think about it, it’s your clinical data that the benefit of the doubt, it’s a $2bn drug, or Ward: What I am trying to understand is, kills a company or safety. it’s a 20% margin, then just discount it back to are we more confident that the industry is The truth of the matter is, it’s just a today, what you find is that some valuations going to be able to raise money this year? valuation discussion. I think biotech and are hard to swallow or explain. We see it go up and up and up in terms of innovation will continue. Sure, you might have Horne: I still think even with all of the the amounts of money that’s been raised. Is to take a haircut, maybe you don’t make the consolidation at the top, if you net out all of it going to be more difficult this year and if it profit that you want to for that year. But in our the mega-merger stuff that’s going to happen is what does that mean for the way that you field of drug development, it is many years. this year, because number 10 through 50 is guys are going to do your business? Even trials, Phase III takes two years. It’s a long- bigger, and because prices are going to go Ken Horne: By raising money, I think term play and you have to weather it. down, the people who are looking to buy valuations will go down, because optionality Jackson: So you have your money and you their third asset and fourth asset who can has gone down. You can’t go public as readily are out looking to do deals, what is impacting actually stomach [a high valuation]. You know, as you could last year. So as a consequence, you? Is this finance market impacting you? $500m is not something to turn your nose up the VCs will give you a haircut for sure in the Are you seeing pharma look more at whether at, it is a big outcome, mostly, depending on crossover pools and they will shift back to or not the drug can be paid for? What is it what it cost to get there. I think there will be a doing whatever they were doing two years that’s impacting dealmaking right now, and is lot of M&A this year. ago, with a few exceptions. it for the better or the worse? Purcell: You think there is going to be a lot It’s playing musical chairs with 100 people Horne: I think capital availability and of mid-sized M&A this year? and three chairs. There are not a lot of great valuations going down is actually going Horne: I think there will be a lot of people places to put money in, but there is a lot of it to foster M&A, so I expect more M&A this who can step up, because they are large floating around, so there is still money to deploy. year. I think the biggest influence, not that enough now and because valuations have I think you just have to be more cognizant of it impacts me, but I would hazard to guess come down. I think people will step up. [Fully what pools of capital you look from. it is going to impact some of your mid-size integrated biotech companies (FIBCOs)] are We have got a couple of VCs, but mostly companies, is the exploitive consolidation back on track now. [our investors are] family offices. There is a that is going on at the top, because that Litton: I think what might be interesting, bunch of China funding and we’re talking to locks up those two companies. They and I will play the devil’s advocate on this, all kinds of different people and not because could probably deal with the likes of our is that I think debt capital for big pharma is I feel strongly this way, but because for a size, but they are not going to go and do still very, very cheap, and so as you get more matter of circumstance we didn’t go public. I billion dollar deals when they are merging, pressure, I think big pharmas have also been am happy from the other side of that, which and it takes six months, nine months [to very conservative. Not to say there isn’t going is I can prepare for winter now and people close a big deal] and they are out of the to be deals, there will be deals done, and I aren’t going to be checking on me every [dealmaking] picture. Pfizer-Allergan, Shire- think they look at it and they say, “Oh, gosh. quarter to see what happened. Baxalta, all of these things just, the number That is 30% less than when I was looking at We are going to go out and raise as much of big buyers … it six months ago,” so there is some appetite money as we can in private markets because Ward: We have to remember there aren’t to that. with whatever has happened this year, I that many of them anyway who could ever be But I have also found the interaction, and don’t think it will be as bad as 2007/2008, a big buyer. Just think about how many big this has happened over the last two years, but it could suck the next few years. And we partners who you would actually be able to much more, I really want no risk associated know to go and get as much money as we sell your assets to. with this. I will pay for that, because when I’m can right now, and I think there is plenty of Purcell: You are saying it’s the last of borrowing the money, whether I am paying it out there, I just think the valuations are them now? 20 basis points or 25 basis points, I want that lower, depending on the pool. VC guys, I Ward: Yes, there is a lot fewer companies. asset so that it’s completely de-risked. would expect a haircut. Family offices, they Horne: But the companies in the top 10 to Purcell: So your devil’s advocate thing are investing for the grandkids. If they like the 50 are bigger, so that helps, but the top 1 to is that pharma is only going to buy more story, I don’t think they care that much. 10 companies are now the top 1 to 5. de-risked assets, whereas in the last six Charles Stacey: It’s not really the number of Purcell: In the last few years we have months they have gone earlier. investors that we can raise money from in the tripled the number of billion-dollar companies Litton: Yes, any group that has done a lot West, but also the world isn’t that small. So I am by 3x, so I am not so sure I agree with you. of deals, they are going to become a little bit looking at raising funds soon and I’ll be in Asia Ward: Are we going to see a depression in more conservative. as much as I am going to be in the US. There is terms of the deals that biotechs can do? Will [email protected]

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 21 stockwatch Will Earnings Season Rescue The Sector? At the end of last week, snowfalls and was still riding high in January 2015 and its blizzards engulfing the East Coast brought investment bankers were happy to earn the not just an early end to the working week fees on a 2.5% $350m convertible debt offering. and the first positive weekly stock market Despite the debt offering which plugged close of the year, but a weather system that the contingent fee cash flow problem, The postponed my trip to New York City and Medicines Company then reported a few

Philadelphia. It will probably take more than Photobank gallery/shutterstock.com quarters of falling (principally Angiomax) the optimism engendered by an early start to sales, having previously stuffed the hospital last weekend to reverse the dismal year-to- wholesaler channel resulting in a fall in demand date performance of life science stocks. That of Salix Pharmaceuticals Inc.-like proportions. would take a positive earnings season. The rest of 2015 was a further catalog of Such a reversal of fortunes is possible, disasters for The Medicines Company as the if rare. The third-quarter 2008 financial financial impact of generic Angiomax required performance of companies including it to announce that it was exploring strategic Amgen Inc., Celgene Corp. and Gilead options in November 2015 and subsequently Sciences Inc. re-rated the profile of profitable resulted in the divestment of three approved biotechnology companies and helped start also been implied by reports last week of hemostasis products to Mallinckrodt for $175m a seven-year bull run for biotech companies sizable job cuts at the French company. Whilst plus $235m in milestones. A number of analysts (albeit with a stuttering start thanks to the last there are excellent financial reasons to cull were quick to put aspirational prices tags on financial crisis) which only ended last summer. Sanofi’s insulin franchise after last year’s US the residual company, but the analysts from It may, however, be too soon for an earnings commercial debacle and the ill-fated foray Citigroup were more cautious, suggesting “an season to rehabilitate the stock prices of into inhaled insulin, the difficulty of removing outright sale unlikely.” depressed biotech stocks that have only any of the expensive staff responsible based The loss of Angiomax exclusivity and recently corrected. The 2008 re-rating of the in France is likely to have a disproportionate the sale of its hemostasis products have sector, by contrast, came after biotech had effect on its workforce and competence relegated The Medicines Company back to spent years in the doldrums. outside that country. loss-making status with limited visibility on The investment bank analyst community the repayment of its now enlarged debt that has spent the past six months proclaiming principal and semi-annual interest payments. the value of the biotech sector after each Investment bank analysts have This type of investment proposition of cash dramatic market drop only to see its “Buy” been surprisingly guarded about burn and significant debt in an environment recommendations fall further in subsequent where investors are shunning primary and market corrections has been surprisingly the help that earnings season can secondary biotech stock offerings has elevated guarded about the help that earnings season The Medicines Company to the least likely can offer to an out-of-favor sector. The analysts offer to an out-of-favor sector acquisition candidate since Clovis Oncology from JP Morgan warned about the effects of Inc. tried and failed to get bought. With the currency weakness (or US dollar strength) on After the depressing stock market start forthcoming earnings season and a possible the earnings about to be reported by Abbott to 2016 and the disaffection with the sector acquisition of The Medicines Company unlikely Inc., for example. About half of Abbott’s sales since the summer of 2015 there could be to pull the life science sector out of its current come from emerging markets. So, for me, the a tendency for companies reporting their doldrums, share prices, like the weekend snow attractions of the relaxation of China’s one financial results for the next few quarters on the East Coast, seem set to fall heavily. child policy to a company that sells a lot of to “kitchen-sink” all the bad news whilst The Magna Biopharma Income fund infant formula is likely to be tempered in the expectations remain low. If it is not earnings holdings include Amgen, Gilead and Abbott. short term by an 8% dent to sales from foreign that will rescue the sentiment of the life Andy Smith currency translations. sciences sector, then perhaps the recent For the healthcare conglomerate Johnson trend in asset sales will help soften the fall. Andy Smith is chief investment officer of Mann & Johnson (J&J), the analysts from JP Morgan Earlier this week The Medicines Company Inc. Bioinvest. Mann Bioinvest is the investment suggested a possible $100m impact on its reportedly followed up on the recent sale of adviser for the Magna BioPharma Income fourth-quarter sales ‘from foreign exchange its hemostasis products to Mallinckrodt by fund which has no position in the stocks headwinds’ but also predicted another low appointing bankers with a view to selling the mentioned, unless stated above. Dr Smith gives quality beat of analysts’ consensus earnings rest of the company. an investment fund manager’s view on public estimates derived from one-off cost cuts and This is quite a turnaround for The Medicines life science companies. He has been lead fund the proceeds of the divestment of its Cordis Company as about this time a year ago it was manager for four life science– specific funds, stent division. Perhaps the scene for J&J’s staring down the twin barrels of the early including International Biotechnology Trust and fourth-quarter financial results has already appearance of generic competition against the AXA Framlington Biotech Fund, and was been set by its recent announcement of 3,000 its main revenue-generating anticoagulant awarded the Technology Fund Manager of the job cuts and a restructuring at its struggling product Angiomax (bivalirudin) and a number year for 2007. medical device and diagnostics division. of contingent payments arising from the Despite being on the right side of a strong acquisitions of some of its other products For all Stockwatch articles visit US dollar, a similar signal of the fourth-quarter – which it could not afford. Fortunately for scripintelligence.com/stockwatch financial performance of Sanofi may have The Medicines Company at the time, biotech

22 January 29th 2016 @scripnews scripintelligence.com © Informa UK Ltd 2016 pipeline watch

Scrip’s weekly Pipeline Watch tabulates the most recently reported late-stage clinical trial and regulatory developments from the more than 10,000 drug candidates currently under active research worldwide.

Late-stage clinical developments for the week 15-21 January 2016 Lead Company Partner Company Drug Indication Market Comments REGULATORY APPROVAL Novartis AG – Cosentyx (secukinumab) ankylosing spondylitis / US For two new indications: adults with active ankylosing spondylitis (AS) and active psoriatic arthritis psoriatic arthritis (PsA). These follow the earlier FDA approval for Cosentyx in January 2015 to treat adult patients with moderate-to-severe plaque psoriasis, and EU approval for AS and PsA in Nov. 2015. Baxalta – Oncaspar (pegaspargase) acute lymphocytic EU As a combination therapy in acute lymphoblastic leukaemia in paediatric patients from birth to Incorporated leukemia 18 years, and adult patients. The drug is already licensed to market in Argentina, Belarus, Germany, Kazakhstan, Poland, Russia, Ukraine and the United States. UCB SA – Briviact (brivaracetam), partial seizures EU UCB announced the EC has approved brivaracetam as an adjunctive therapy in the Rikelta treatment of partial-onset seizures with or without secondary generalization in adult and adolescent patients from 16 years of age with epilepsy. First launches in EU countries are set to begin this quarter. Samsung Bioepis Biogen Benepali (biosimilar rheumatoid arthritis, EU The joint venture between Biogen and Samsung BioLogics, Samsung Bioepis, has been Co. Ltd. etanercept) psoriatic arthritis, granted EC approval for Benepali, an etanercept biosimilar referencing Enbrel. Biogen ankylosing spondylitis, intends to launch it in the coming weeks. non-radiographic axial spondyloarthritis and plaque psoriasis SUPPLEMENTAL REGULATORY APPROVAL Novartis AG Genmab Arzerra (ofatumumab) chronic lymphocytic US For extended treatment of patients who are in complete or partial response after at leukemia least two lines of therapy for recurrent or progressive chronic lymphocytic leukemia. ORPHAN DRUG DESIGNATION Nivalis – N91115 cystic fibrosis US Nivalis announced that the FDA has granted Orphan Drug Designation to its lead Therapeutics Inc. investigational drug, N91115, for the treatment of the cystic fibrosis FAST-TRACK STATUS Zogenix Inc. – ZX008 (Brabafen) Dravet syndrome US Zogenix announced receipt of Fast Track designation from the FDA for ZX008 as a treatment of seizures associated with Dravet syndrome, a rare and catastrophic form of childhood epilepsy. The company recently initiated its first Phase III clinical trial in the US, and the second trial, primarily to be conducted in Europe, is expected to begin this quarter. BREAKTHROUGH THERAPY DESIGNATION AbbVie Inc. Roche venetoclax chronic lymphocytic US AbbVie announced that the FDA has granted Breakthrough Therapy Designation for leukemia venetoclax in combination with rituximab for the treatment of patients with relapsed/ refractory chronic lymphocytic leukemia. The designation was based on results from the M13-365 study. In April 2015, the FDA granted Breakthrough Therapy Designation to single agent venetoclax for the treatment of CLL in previously treated (relapsed/refractory) patients with the 17p deletion genetic mutation. REGULATORY FILING Eli Lilly & Incyte baricitinib rheumatoid arthritis US Lilly has submitted a US NDA for the approval of oral once-daily baricitinib for the Company treatment of moderately-to-severely active rheumatoid arthritis. As a result, Incyte will receive a milestone payment of $35m from Lilly. If baricitinib is granted US approval, Incyte will receive a milestone payment of $100m from Lilly. PHASE III TRIAL INITIATION Aclaris – A-101 benign pigmented lesions – Aclaris announced the initiation of two Phase III clinical trials to evaluate A-101 Topical Therapeutics Inc. Solution for the treatment of seborrheic keratosis. Approximately 800 subjects will be randomized in these multi-center, double-blinded, vehicle-controlled, clinical trials, which are being conducted at 34 US investigational centers. Trevena, Inc. – oliceridine (TRV130) acute pain – Trevena announced the launch of the oliceridine Phase III clinical program with the enrollment of patients in the open label Phase III ATHENA-1 study to evaluate the safety and tolerability of oliceridine in patients with acute moderate-to-severe pain in a variety of clinical settings. The company remains on track to file an NDA for oliceridine in 2H 2017. Valeant EyeGate EGP-437 uveitis – Eyegate Pharmaceuticals announced that the first patient was enrolled in its confirmatory Pharmaceuticals (iontophoretically- US Phase III clinical trial of its EGP-437 combination product in patients with non-infectious International Inc. delivered dexamethasone anterior uveitis. The trial intends to enroll up to 250 subjects and is designed to evaluate the phosphate ophthalmic safety and efficacy of iontophoretically-delivered EGP-437, a novel formulation of solution) dexamethasone phosphate ophthalmic solution, through the Company’s EyeGate II Delivery System, in patients with unilateral or bilateral non-infectious anterior segment uveitis. PRODUCT LAUNCH Taisho Teijin LOQOA Tape arthritis pain Japan Taisho Pharmaceutical announced that it has decided to launch LOQOA Tape for the indication Pharmaceutical (S-flurbiprofen) and usage of the treatment of osteoarthritis pain and inflammation on Jan. 21, 2016. Co. Ltd. Allergan plc Kissei Urief OD Tab. 2mg and benign prostatic Japan Kissei announced that they will launch Urief OD Tab. 2mg and Urief OD Tab. 4mg Urief OD Tab. 4mg hyperplasia (generic name: for the treatment of dysuria associated with benign prostatic (silodosin), Rapaflo hyperplasia on Jan. 18, 2016, in Japan. Source: BioMedTracker

© Informa UK Ltd 2016 @scripnews scripintelligence.com January 29th 2016 23 appointments

Merck has appointed Gary Zieziula president and industry and most recently was senior director, conditions, has appointed the company’s CEO managing director of the company’s biopharma pharma development, global technical operations Josh Disbrow and its chief operating officer (COO) business in US and Canada and Marc Horn will lead at NPS Pharmaceuticals. Previously, she worked at Jarrett Disbrow to the board of directors. Josh the biopharma business in China as managing Palatin Technologies, Inc. as director, formulation Disbrow and Jarrett Disbrow were the founding director. Zieziula joined Merck in 2014 as chief development and manufacturing. management team at Arbor Pharmaceuticals and commercial officer in the US and has previously served as vice president of commercial operations Recipharm has appointed Anke Mollowitz key held senior level positions at Bristol Myers-Squibb, and president/CEO until the company’s acquisition account director. Mollowitz has more than 13 years’ Roche and Amag Pharmaceuticals. Currently Horn in 2010. Prior to the formation of Aytu BioScience, experience in sales and in 2005 she joined Haupt is the regional chief financial officer (CFO) of Merck Josh Disbrow was COO of Ampio Pharmaceuticals Pharma Wülfing GmbH. At Haupt Pharma Mollowitz responsible for Eastern Asia for Healthcare, Life Science and CEO of Ampio subsidiary Luoxis. Recently and Performance Materials. He has over 16 years’ worked as sales representatives and project manager Jarrett Disbrow was CEO of Vyrix Pharmaceuticals. experience in finance in the pharma and chemicals and later, she was head of customer service. industry and has held positions at Bayer and Lanxess. Phico Therapeutics, a company developing PureTech Health Plc. has launched its scientific antibiotics, has appointed Nicki Thompson advisory board (SAB) and appointed Harry The Dementia Discovery Fund (DDF), a global chief business officer (CBO). With more than 20 L. Leider, chief medical officer of Walgreens investment fund managed by SV Life Sciences, years’ experience, Thompson joins Phico from Co., senior advisor to the company. The SAB is has appointed Tetsuyuki Maruyama chief F. Hoffmann-La Roche Ltd. where she was vice chaired by H. Robert Horvitz, Nobel Laureate scientific officer – effective April, 2016. Maruyama president and global head of external drug and David H. Koch. Members of the SAB include joins DDF from Takeda Pharmaceutical Co. Ltd. discovery. Previously, she was senior director, Dennis A. Ausiello, chief emeritus of medicine at where he was senior vice president, general business development for GlaxoSmithKline’s Centre Massachusetts General Hospital; James J. Collins, manager, pharmaceutical research division for of Excellence for External Drug Discovery. Termeer professor of medical engineering & science the past five years. Prior to this he was director of and professor of biological engineering at MIT; GlaxoSmithKline plc’s neuroscience research centre Minoryx Therapeutics, a company focused on Sanjiv Sam Gambhir Ludwig professor and chair, in Singapore and led Alzheimer’s disease target orphan diseases, has appointed Dr. Khalid Islam department of radiology; Raju Kucherlapati a discovery efforts at Merck Sharpe & Dohme Ltd. chair of the company’s board of directors. Islam PureTech board member and PureTech co-founder was previously chair and CEO of Gentium S.p.a and and board member, Robert Langer. Actinium Pharmaceuticals, Inc. has appointed president and CEO of Arpida AG. Prior to this, he Kevin Zikaras senior clinical scientist and Rowena worked in academia at Imperial College (University TapImmune, Inc., an Immunology-oncology Choudrie senior director, pharmaceutical product of London) and at Milan University, where he was a company, has appointed Frederick G. Wasserman development. Zikaras joins Actinium from Bristol- contract professor. to its board as an independent director. Wasserman Myers Squibb where he was clinical protocol has previously been president, chief operating manager in the immuno-oncology group. Choudrie Aytu BioScience, Inc., a healthcare company officer and chief financial officer of entrepreneurial, has over 20 years’ experience in the pharma focused on treatments for urological and related middle-market companies.

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