Issue 21 | August 2014 www.plg-uk.com

The Future for Generics Business Models Factors for Success in the OTC Market Non-Patent Exclusivities in Major Markets Faster Market Access for Precision & More Personalised Medicines  SinkorSwiminEurope:theRoleofBusinessDevelopment 7thEuropeanPharmaLicensingSymposium 23rd&24thSeptember2014Prague,CzechRepublic

Following the formaƟon of the new PLG CEE group, the EPLS meeƟng travels to Eastern Europe this year for its 7th event. This two day meeƟng will include presentaƟons, talking tables and plenty of networking opportuniƟes both formal and informal. There will be an online delegate contact system open to all registered delegates, with a dedicated oneͲtoͲone meeƟng area available to all delegates throughout the meeƟng.  PresentaƟonswill include:

Ͳ Overview of Growth OpportuniƟes in Europe Ͳ Are Emerging Markets Paying Their Way? Ͳ The Role of HTA in Assessing BD OpportuniƟes and Deals Ͳ Building By AcquisiƟon Ͳ New Business Models with Pharma Ͳ DeͲRisking Rare Disease Projects Ͳ Launch Strategies in Europe

‘TalkingTables’ With deals becoming increasingly complex, the interacƟve Talking Tables format will enable a range of hot topics to be debated in small groups. The Įndings from each debate will then be presented to the group followed by a panel discussion based on delegate feedback. Issues to be debated will include:

Ͳ TerminaƟon Issues in Agreements Ͳ IP Aspects Including SPCs Ͳ Performance Issues in Agreements Ͳ Current Deal Trends Ͳ Consensus Market ForecasƟng Ͳ CoͲBranding Ͳ Due Diligence and Regulatory Issues

VenueͲMarrioƩPrague The hotel is centrally located close to Prague Old Town. For those arriving on Monday evening, the informal networking will begin with a drinks recepƟon held at the hotel from 7pm. Tuesday is a full day meeƟng with plenary presentaƟons followed by Talking Tables that will focus on a range of deal issues with real examples.

The delegate fee includes aƩendance at the drinks recepƟon on Monday evening, meeƟng on Tuesday and Wednesday, all catering throughout the event, including the gala dinner on Tuesday evening.

Discounted accommodaƟon rates have been put in place at the MarrioƩ Budapest and are available to book from our website, www.plgeurope.com/Prague_2014.  Welcome Contents

As we move into the summer of 2014, several high 4 Generics – Is the Commodity headline deals have been reshaping the industry, Business Model Sustainable? most notably the strategic shifts made by some By Guy Clark, Chief Strategy Offi cer, AMCo of the major companies including Merck & Co, Novartis, Lilly, GSK and Bayer where there has 8 A Review of Changes & Factors for been a refocusing into certain areas of operation Success in the OTC Market – vaccines, animal health, oncology and OTC. In By Tim Brady, Director of Business Development, keeping with this, in this issue we have included Thornton & Ross; and Ros Munday, OTC Consultant Ltd articles which look into the generics world and also at the OTC markets. 12 Channeling Niche Pharma Products However the deal activity has not been confi ned to the key strategic to the European Market areas, with major takeovers being discussed and agreed. So far, By Stefan Fraenkel, SVP Corporate Development; and AstraZeneca has eluded Pfi zer but the acquisition of Shire by AbbVie Anders Edvell, VP Head of Partner Products, both of appears to be going ahead. It will be interesting to see how this will pan Sobi (Swedish Orphan Biovitrum) out in the implementation stage, whether Shire will remain an individual operating unit or be absorbed into the main company. One of the key 18 Overview of Non-Patent drivers behind the strategic alignments is the fact that profi t margins in Exclusivities in Major different parts of the business vary signifi cantly and to date the smaller Pharmaceutical Markets companies have arguably been more successful in the orphan space. As an By Roxanne P Spencer, RPS IP Management; and exemplar of this, we have an article from Sobi (Swedish Orphan BioVitrum) Nicholas Adams, Consultant reviewing its business model. Behind the big headline deals there is the day-to-day BD activity and 24 Connectivity, Adaptive Pathways keeping you up to date on developments there are articles on adaptive & Deal Structuring licensing and the value of non-patent exclusivity – an increasingly important By Helen Cline, Legal Director, Pinsent Masons; Paul area, as many products do not benefi t from patent cover. Ranson, Partner, Pinsent Masons; Prof Sarah Garner, It is good to see that the individual national PLGs are also going from Associate Fellow & Adaptive Licensing Project Director strength to strength, with the UK group reaching its 30th anniversary CASMi; and Christian Hill, Director, MAP BioPharma and and the inaugural meeting of the PLG CEE being held in Warsaw, Poland. MAP MedTech This autumn, we are looking forward to an exciting programme for the European joint PLG meeting in Prague, Czech Republic. In the meantime, I 30 Book Review: Transforming Big hope that this issue will make for some interesting summer reading! Pharma, by John Ansell By Roger Davies

32 Deal Watch By Sharon Finch Sharon Finch Editor, Business Development & Licensing Journal

The Business Development & Licensing Journal is available free to PLG members. If you would like to join the PLG please visit the website at www.plgeurope.com.

Business Development & Licensing Editorial board Editorial Enquiries Journal is published by: Sharon Finch Pamela Demain Irina Staatz Granzer Sharon Finch The Pharmaceutical Licensing Group (PLG) Ltd Editor Merck & Co, USA Staatz Business T: +44 (0) 20 8654 6040 The Red House Development & Strategy, E: [email protected] Kingswood Park Neil L Brown Jonathan Freeman Germany Bonsor Drive France Merck Serono, Switzerland Advertising Kingswood Enric Turmo Riccardo Carbucicchio Jürgen Langhärig Surrey KT20 6AY Esteve, Spain Enquiries Switzerland Bavarian Nordic A/S, Adam Collins www.plgeurope.com Denmark Joan Chypyha Roger Cox T: +44 (0) 1737 356 391 Alto Pharma, Canada Plexus Ventures, Benelux E: [email protected]

Publisher’s note: The views expressed in the Business Development & Licensing Journal are those of the authors alone and not necessarily those of the PLG. No responsibility for loss occasioned to any person acting or refraining from action as a result of the material in this publication can be accepted by the Publisher. While every effort has been made to ensure that the information, advice and commentary are correct at the time of publication, the Publisher does not accept any responsibility for any errors or omissions. The right of the author of each article to be identifi ed as the author of the work has been asserted by the author in accordance with the Copyright, Designs and Patents Act 1988.

www.plg-uk.com Issue 21 | August 2014 3 Generics - Is the Commodity Business Model Sustainable? Recent diversifi cation behaviour amongst generic companies raises questions as to whether they believe commodity generics have a future. Whilst strong drivers for generics still apply in both developed and emerging countries, diversifi cation strategies such as entering the speciality medicine market, developing biosimilars and breaking into the OTC sector, are increasingly common.

By Guy Clark, Chief Strategy Offi cer, AMCo

any of the pharmaceutical £367m. The two companies were merged companies that have become in January 2013 and AMCo is now Mmajor players in the generics pursuing a strategy both to acquire more industry have, in recent years, diversifi ed marketed branded medicines and establish away from low-price, high-volume specialist-led sales forces in countries “commodity” generics by acquiring around the world. companies with branded products, and The diversifi cation strategies of generic supplemented the pipeline by developing companies raise the question whether or licensing-in innovative medicines. these companies believe the “commodity” For example, Teva, although it is known generic model is sustainable in the future. as one of the leading generic companies in the world, has had Copaxone Drivers for Generic Medicines (glatiramer acetate injection for relapsing Several recent presentations provide some multiple sclerosis), a speciality medicine, clues. Alan Sheppard, Principal, Thought in its portfolio for more than a decade. Leadership, Global Generics, at IMS Whereas in 2001 speciality product sales Health, explains that the driver of generic at Teva were less than 20% of the total medicines in developed markets is the of US$2bn, in 2013 they were 50% of containment of the drugs bill by either $20bn. This refl ects a company strategy regulated or market-force reductions in to acquire speciality product companies product prices following loss of exclusivity. such as Cephalon in 2011, with its range Nevertheless in Europe there are still of branded speciality medicines including marked differences between countries. Provigil (modafi nil), Nuvigil (armodafonil), According to IMS data, the volume share Fentora and Actiq (fentanyl) and Treanda of generics in the prescription-bound, (bendamustine). Similarly, in 2013, Actavis unprotected, retail market is more than acquired Warner Chilcott, a company 80% in Germany but less than 50% in specialising in women’s health branded Italy, Belgium and Austria. Apart from products, and then in 2014 it also acquired these latter countries where generics About the Author the US company Forest for $25bn. may increase market share, there is little Guy Clark, Chief Strategy Offi cer, AMCo, is AMCo is another case in point. opportunity for signifi cant sales growth responsible for developing and implementing It was formed by the merger of two of generics in Europe over the next fi ve AMCo’s strategic plan, with direct companies owned by the private equity years as the number of blockbuster responsibility for execution of the company’s company, Cinven. In August 2012 Cinven products coming off patent reduces and growth through M&A, new product purchased Mercury, a company operating governments and competition continue to development and international expansion. in the fi eld of off-patent medicines, for drive down prices. £465m. In October 2012, Cinven also In the emerging markets, the main E: [email protected] acquired Amdipharm, another off-patent driver of generics is to ensure the provision branded pharmaceutical company, for of affordable medicines for the local

4 Business Development & Licensing Journal www.plg-uk.com Western generic companies are buying local companies in emerging countries, with their knowledgeable local management teams, in their quest to become the lowest-cost producer for particular types of generic products.

population and to bolster the local generic covering Herceptin, Avastin, Rituxan and manufacturing industry that also competes Erbitux. Mylan was even earlier signing a in a global market. The recent granting deal with the Indian company Biocon to of compulsory licences for on-patent develop biosimilars in 2009, and Sandoz medicines to local generic companies in and Teva have had success launching new India demonstrates the point. Hence the biosimilars in Europe. Due to the cost emerging markets are likely to have high and complexity of product development, growth in sales volumes of generics but it biosimilars is not an area where the little is likely to be a fi eld in which it is diffi cult guys can easily compete, and so this is very for Western generic companies to be much a “playground for the rich”. successful, with their higher costs, quality Yet another diversifi cation trend is to and compliance standards, and without enter the OTC market. This is a popular the market knowledge that gives local strategy with many companies that companies such an advantage. are tired of having their selling prices One consequence of this is that regulated, mostly downwards, and Western generic companies are buying having to deal with declining margins. In local companies in emerging countries, August 2013 Stada acquired the UK OTC with their knowledgeable local company, Thornton and Ross (T&R) for management teams, in their quest to $345m. T&R has the second ranked cough become the lowest-cost producer for brand and is the market leader in head particular types of generic products. lice products in the UK. Since then Stada For example, in December 2013, Mylan has acquired the Russian Aqualor brand announced the acquisition of the Agila for treatment of sinusitis and sore throat generic injectables business from the for around $180m and, in June 2014, it Indian company, Strides Arcolab, for acquired the Claire Fisher natural cosmetics $1.6bn, and has owned Matrix Labs in brand in Germany. the same country for several years. Recent A further perspective on the future of announcements by Teva also underpin the generic companies is provided by Claudio Biosimilars is focus to expand in emerging markets. Albrecht, the former CEO of Actavis and now CEO of Albrecht and Prock. Claudio’s not an area where The Need for Diversifi cation point is that “generics should be essentially Another diversifi cation model adopted similar but nowadays the industry wants to the little guys can by some generic companies is to develop be essentially different”. easily compete, and biosimilars. For example, Actavis describes The pipeline of the generics industry is biosimilars as “one of the pillars of Actavis’ patent expired products. In 2013, ten of so this is very much strategy to drive long-term growth”. To the top 15 products ranked by sales were a ‘playground for this end it has established collaborations biologicals and other “hard-to-make” with Amgen in 2011 and Synthon in 2012 products such as asthma drugs in inhalers. >> the rich’.

www.plg-uk.com Issue 21 | August 2014 5 Table 1: Top 15 products by sales in 2013

Rank Product 2013 Sales $bn Growth % Molecule Patent Expiry*

1 Humira 11.5 20 Biopharmaceutical 2 Remicade 9.9 9 Biopharmaceutical 3 Enbrel 8.9 4 Biopharmaceutical 4 Seretide / Advair 8.4 5 Small molecule inhaled 5 Abilify 8.0 -3 Small molecule oral 2015 6 Mabthera / Rituxan 7.4 4 Biopharmaceutical 7 Lantus 7.3 15 Biopharmaceutical 8 Crestor 6.9 -9 Small molecule oral 2013 9 Avastin 6.7 8 Biopharmaceutical 10 Herceptin 6.5 3 Biopharmaceutical 11 Cymbalta 5.2 2 Small molecule oral 2013 12 Spiriva 4.9 8 Small molecule inhaled 13 Lyrica 4.8 11 Small molecule oral 2016/18 14 Glivec 4.7 0 Small molecule oral 2015/19 15 Neulasta 4.4 7 Biopharmaceutical

* Patent expiry only shown for oral small molecules.

>> Table 1 shows the top 15 products by sales such as pricing, protection of local industry, according to PMLIVE (April 2014). compliance and political and economic This trend is likely to accelerate. As such volatility. As a result, he believes the the number of top-selling, oral, small- traditional approach to generics will not molecule products reaching patent expiry work. His view is that generic companies will diminish and that is one reason why need to diversify into biosimilars or large generic companies either need to develop speciality brands, rather than focus on their businesses in emerging markets, or emerging markets. need to diversify. Claudio describes the emerging market Generics Pricing and hypothesis as “hype” because of the Micro-Economics number of challenges in these markets, The argument that generic companies need to diversify to grow and to remain Figure 1: The eff ect of inelastic demand on generic pricing profi table brings us back to the question, is the commodity business sustainable? Inelastic Demand Micro-economic theory provides some Rational behaviour pointers. In the developed countries, including the US and many countries of the EU, a high proportion of prescription- 1 S bound, unprotected sales volume is

Price from generic products (e.g. over 80% S4 in Germany). The generic products with S3 the same active ingredient have to be identical and as such can be considered p1 “commodities”, although they may be sold under a different trademark. The demand for long-established p4 pharmaceutical products where patients p3 have been stabilised on a particular COGs D drug is mostly price inelastic. As a result, micro-economic theory explains that in q1 q4 q3 Quantity countries where generic prices are set by market forces, for example in the UK, as

6 Business Development & Licensing Journal www.plg-uk.com Table 2: Recent trends amongst companies in “commodity” generics

Recent Trends

USA Consolidation Canda Consolidation Rational pricing UK Consolidation Exit market Rational pricing Germany Consolidation Exit market Scandinavia Exit market Rational pricing Netherland Consolidation Exit market France? Consolidation Exit market Portugal? Exit market

the volume of supply increases, the price products to get regulatory approval, it higher, the sales levels are too small for falls by a greater percentage. This soon can still lead to a position where multiple the larger companies, and the niche leads to a situation where some suppliers players co-exist and additional incentives players with specialised generics can build incur losses as the price falls below the are used to sell competing products, such relationships with the relevant payers. supplier’s cost of goods. as bonus stocks. This is what has happened in the The conclusion is that whether generic Conclusions UK with a number of generic products product prices are set by competitive So in answer to the question “Is the as illustrated in Figure 1. Two decades forces or by government, the prospects for Commodity Business Model Sustainable?” ago, this market was attractive for new the “commodity” generics in developed ….. “Yes, but not in the same format”. entrants, and there were several outward countries are bleak. Volume growth is The new format will be further supply shifts (i.e. an increased number of generally stable and price is constantly consolidation of larger companies and suppliers, moving the supply curve to the under pressure, and sometimes at a 90% survival of smaller companies by focusing right), ranging from UK start-ups and other discount or more within days of loss of on niche generics. This will provide European players and then from further exclusivity. The result, shown in Table 2, opportunities for creative companies that afi eld, in particular from India. has been companies exiting the market, can apply fl exible manufacturing and This increase in supply quantity (S3) led consolidation of suppliers and price commercial strategies. Such companies to a market where goods were sometimes rationalisation. can be adaptable across multiple markets, being sold at a loss (equilibrium point The generic industry is adapting to the without trying to apply a one-size-fi ts-all p3-q3). Since then, many suppliers have new “commodity” environment in the approach, by embracing the strength of left the market and other companies have developed countries. One approach has local knowledge along with supporting consolidated, thus enabling the price, been M&A to offset declining margins. central resources as appropriate. linked to a basket of supplier prices, to By M&A the acquiring companies seek to rise to more rational levels for products increase market share and reduce costs in general (move from S3 to S4). Micro- by economies of scale and by moving economic theory teachers often make manufacture to low-cost countries. The an assumption that buyers are rational, top four generic companies that have been whereas practice often shows differently. active in M&A – Teva, Sandoz, Actavis and There have been periods where buying has Mylan – now have sales between $5bn clearly not been rational in the UK, and and $10bn, signifi cantly higher than the other developed markets. followers such as Aspen, Stada and Dr In other countries where generic prices Reddys, all with sales of less than $3bn. are determined by government regulation, There are still a large number of small for example, where each supplier has generic companies so there is plenty of to launch at a lower price than the last scope for further M&A. generic, the effect is to deter third or The second approach to dealing with fourth entrants unless they are a lower- the “commodity” environment has been cost producer then the earlier entrants. for smaller companies to focus on niche However, given the time it takes for generics. Here the barriers to entry are

www.plg-uk.com Issue 21 | August 2014 7 A Review of Changes & Factors for Success in the OTC Market The last two years have seen signifi cant changes in the OTC sector as companies restructure and consolidate. This year there has been the acquisition by Bayer of Merck & Co’s OTC business for $14bn, the 63.5%/36.5% joint venture between GSK and Novartis with combined sales of $10.9bn, the acquisition of the Chinese company Dihon by Bayer, and Reckitt Benckiser has bought the KY brands from J&J.

By Tim Brady, Director of Business Development, Thornton & Ross; and Ros Munday, OTC Consultant Ltd

n the UK last year STADA acquired insurers’ pressure on prices. As a result, Thornton and Ross for £221m. STADA the OTC share of total pharma sales has Ihas since completed two more OTC increased from 11% to 12%. The fastest deals and is on the hunt for more. There market growth is in the emerging markets. have also been signifi cant changes in the retail and wholesale sector with the The European Market acquisition of Celesio (owner of Lloyds In Western Europe the major OTC markets Pharmacy group) by the US company are in Germany, France and Italy where McKesson for $8.6bn and the acquisition growth in 2013 was 4% or less. In the EEA of a 45% stake in Alliance Boots by US- the country with the highest per capita based Walgreen for $6.7bn. Walgreen is spend on OTC medicines is Switzerland said to be considering whether to purchase followed by Belgium, Germany, Finland, the remaining 55% partly to benefi t from France and Italy. The countries with the a lower tax rate. lowest per capita spend, at less than According to the CEO of Reckitt 40% of the level in Germany, are the UK, Benckiser, the OTC industry is still very Greece and Spain. fragmented with no single company About the Authors having more than 5% market share and The UK Market Tim Brady is Director of Business Development consolidation is expected to continue. Looking at the UK market, there has been at Thornton & Ross (a subsidiary of STADA), According to IMS OTC Global Analysis very little growth over the past ten years where he is involved in acquisitions of both data published by OTC Toolbox, the 2013 in spite of government encouragement of consumer and Rx branded medicines, as well worldwide top ten companies (pre-2014 self-medication by consumers including the as larger transactions. In recent years Tim consolidation) in terms of non-prescription switch of classifi cation of some medicines has specialised in building new subsidiaries sales were as shown in Table 1. Following from “prescription-only” to “pharmacy” of European pharmaceutical companies in the recent M&A activity it is expected that (POM to P), where a product can be the UK. GSK/Novartis will move to number one, recommended and sold by a pharmacist and that Bayer will be close behind in without a prescription. According to IRI, E: [email protected] number two position. the compound annual growth rate over this period was 1.8%. In 2013, the UK’s Ros Munday is a specialist OTC Consultant. The Global Market OTC market grew by 2.2% mainly driven She has a sales and marketing background According to IMS, the global OTC market by growth in sales of smoking cessation and prior to becoming a consultant in 2011, sales (at manufacturer prices) in 2013 products. The cough/cold sector declined she worked for a multinational pharma increased by 6% compared with the Rx because of the lower incidence of colds company managing its UK portfolio of market growth of 1.5%. There has been and fl u this last winter. P & GSL OTC medicines. higher growth in the OTC market for six When POM to P products were fi rst years driven by price reductions in the Rx introduced, the OTC companies believed E: [email protected] sector caused by patent expiries, generic it would generate signifi cant growth competition and governments’ and in the UK market. This was based on

8 Business Development & Licensing Journal www.plg-uk.com Table 1: Top ten companies by non-prescription Table 2: Examples of POM to P sales in 2013 product switches in the UK

Rank Company OTC Sales Ingredient Indication Market Share Growth Simvastatin High cholesterol Emergency hormonal 1 J&J 3.7% +1.7% Norgestrel contraception 2 Novartis 3.7% +6.4% Acute bacterial 3 Bayer 3.6% +3.9% Chloramphenicol conjunctivitis 4 Sanofi 3.5% +5.5% Diclofenac Symptomatic pain relief 5 Pfi zer 2.5% +2.0% Aciclovir ointment Herpes simplex 6 PGT Healthcare (P&G +Teva JV) 2.4% +7.7% Benign prostatic Tamsulosin 7 GSK 2.3% -1.2% hyperplasia 8 Boehringer Ingelheim 2.2% +3.8% Azithromycin Chlamydia 9 Reckitt Benckiser 1.9% +12.3% Sumatriptan Migraine 10 Takeda 1.5% +8.9% Naproxen Period pain

encouragement of patient self-care by the pharmacist’s caution in recommending government and a supportive regulatory treatment for a previously undiagnosed agency (MHRA). Since 2001, 19 active condition. Consumer embarrassment ingredients have been switched. Some may also be a factor depending on the examples of switches are shown in Table 2 nature of the condition itself. It seems that and there are many more. products to treat more serious diseases Sales of some of these switch products, such as BPH are less successful as “P” such as Boehringer Ingelheim’s Flomax medicines than less serious diseases such (tamsulosin) for treatment of benign as hay fever. prostatic hyperplasia (BPH), have been One of the approaches being disappointing. The reason is twofold: considered by some companies to expand fi rstly the now “time-poor” pharmacist the availability of existing brands is to try has to follow a complex protocol involving and get “P” medicines re-classifi ed as completion of a detailed questionnaire general sales list (GSL) in the UK. However, with the patient before dispensing the outside the UK, the scope for growth by product; and secondly, a patient receiving POM to P switches is currently limited the product from the pharmacist has to because of the more cautious approach pay for it whereas by visiting the doctor of local regulators, different medicine and receiving a prescription, he can get classifi cation and reimbursement systems the product free (see Table 3). This is a and regulations in each country. particular barrier to sales when the target We should maybe also consider how audience is, as in the case of BPH, likely to many remaining therapeutic categories fall into the category qualifying by age for there are which are likely to be considered free prescriptions. safe for self-medication. In addition, the Each individual switch candidate will very restricted marketing exclusivity period The OTC have various, maybe specifi c reasons for permitted for a newly switched molecule success or failure, not least in some cases seriously limits the opportunity to recover industry is still very fragmented with Table 3: Product pathways to the patient in the UK no single company having more than Dispensed Payment Classifi cation Available From By By 5% market share and Prescription-only (POM) Pharmacist NHS / Private Pharmacy consolidation Pharmacy (P) Pharmacist Patient Pharmacy General sales list (GSL) Anyone Patient Anywhere is expected to >> continue.

www.plg-uk.com Issue 21 | August 2014 9 Figure 1: The importance of NPD in Covonia’s growth since 2002

In 2011, NPD since 2002 accounted for 79% of Covonia's sales Mucus Lozenges Dry & Tickly Sales Catarrh Cold & Flu Chesty NPD Vapour Drops 2002 Range

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Plan

>> the associated costs of switching and products can be promoted using samples which must be in the same area. There launching a new product. and health professional endorsement is also a restriction on retail companies So if POM to P is not the driver for and medical claims can be made for owning pharmacies. growth what is? According to audit data the product. In addition, in the UK, These regulations caused Celesio to in the UK, new products account for only these products can be sold in consumer come unstuck following its acquisition a small part of growth except where there self-selection environments, such as a of a German online pharmacy DocMorris is a new treatment such as e-cigarettes. supermarket or convenience store where in 2007 for €200m. When Celesio tried Most manufacturers rely on line- there is no requirement for a pharmacist to open a pharmacy store in Germany it extensions to grow brands. For example to be present when the product is sold. was sued by the German pharmacists. In at Thornton and Ross, the growth of For existing well-known brands, the May 2009, the European Court of Justice Covonia, the second ranked cough medical device route for NPD makes (ECJ) ruled that the pharmacy ownership medicine in the UK, has been driven to a sense but new brands have still often regulations in Germany and elsewhere large extent by new product development struggled to win signifi cant market share. were not in breach of European Union (NPD) where new formulations and new An exception to this is the e-cigarette law. Each member state can decide how combinations are marketed under an boom, none of which are currently to regulate pharmacy ownership. In umbrella brand (Figure 1). controlled by marketing authorisation or October 2012, Celesio sold DocMorris Covonia uses one trademark with medical device regulations. for €25m, a loss of €175m versus the the line-extensions, usually containing One of the possible reasons why new original purchase price. The question for additional ingredients, where the different brands fail to make headway in the UK Walgreen, who may buy the remaining packs are distinguished by a sub-title market may be because of the high fees 55% of Alliance Boots, is whether under the trademark such as “Night and margins demanded by the dominant the “inversion” tax benefi t offsets the Time Formula” or “Dry Tickly Cough”. multiple retail and wholesale groups to potential lack of growth in some of the Another approach is to use one trademark sell new brands, plus the high cost of major OTC markets in Europe. with additional text. For example, Reckitt consumer advertising. In the UK, where In summary, the UK OTC market has Benckiser’s OTC ibuprofen range is there is no restriction on ownership of been a low-growth market but there are marketed under 11 different variations of pharmacies, there is a high concentration opportunities to grow established brands the trademark, ranging from the original of pharmacy outlets amongst large by line extensions and use of medical “Nurofen” to “Nurofen Plus” (ibuprofen + multiple retailers and supermarkets. For device classifi cation. However, making a codeine) to “Nurofen Tension Headache” example, Boots plus the multiples account success of new brands is diffi cult because (342mg strength tablets). for around 90% of the total OTC sales. of the high cost of entry in terms of Aside from POM to P switching, Boots alone can account for between distribution and marketing. consumer health companies use existing 30% to 50% of the market. medical device technology to bring new In contrast, in Germany, France and products to market. The time required Italy, there is legislation restricting the to get products registered as medical number of pharmacies owned by one devices, with a CE mark, is a few months company. In Germany a pharmacy must be compared with years for a medicine, owned by a pharmacist and no pharmacist and the cost is 10-100 times lower. The can own more than four pharmacies,

10 Business Development & Licensing Journal www.plg-uk.com PLG EVENTS

PLG UK Masterclass

Wednesday 10th September to Thursday 11th September 2014

(London, UK)

7th European Pharma Licensing Symposium

Tuesday 23rd September to Wednesday 24th September 2014

 (Prague, Czech Republic) PLGS XIV General Assembly

Thursday 16th October to Friday 17th October 2014

 (Girona, Spain) NPLG 1etworking 'inner

Wednesday 29th October 2014  (Copenhagen) PLG UK Introductory Training Course (ITC)

Monday 17th November to Wednesday 19th November 2014

 (Marriott Lingfield Park, UK) PLG MSc Winterschool

Wednesday 3rd December to Thursday 4th December 2014

(London, UK)  PLG UK Networking Reception

Thursday 4th December 2014

 (London, UK) PLCD Autumn Meeting

Thursday 4th December to Friday 5th December 2014

 (Berlin, Germany) PLCD Advanced Seminar

Monday 15th December to Wednesday 17th December 2014

 (Berlin, Germany)

www.plgeurope.com Channeling Niche Pharma Products to the European Market If you are in a position where your fi rm is to commercialise a niche drug in Europe, you might typically have considered two conventional options; to build up your own commercial platform or to make a deal with a large pharmaceutical company or multiple regional or territorial distribution partners. The fi rst approach requires signifi cant time and resources while the second leaves you locked without strategic options for your product and a sub-optimal fi nancial return. The recent emergence of the European Partner Commercialisation Platform business model may offer a new alternative by providing commercial solutions customised for your product, superior fi nancial returns, and a full range of strategic options for the future of your product. An additional benefi t of a European Partner Commercialisation Platform approach is that it may speed up access to innovative niche medicinal products for patients across Europe.

By Stefan Fraenkel, SVP Corporate Development; and Anders Edvell, VP Head of Partner Products, both of Sobi (Swedish Orphan Biovitrum)

The European Challenge: Diversity companies to gain access to customers and Complexity with new regulations in place in many countries regulating the interactions urope is often perceived from between industry and healthcare a distance as a homogenous practitioners. Emarketplace, particularly when To be sure, diversity is not the only viewed from the US or Japan. Nothing challenge: there is also complexity inherent could be further from the truth: Europe is in European markets. This stems from the About the Authors a diverse and complex marketplace made fact that the various European markets Dr Stefan Fraenkel MBA, PhD, Ass Prof, is up of more than 40 distinct country- frequently inter-relate and change. The Senior Vice-President and Head of Corporate centred markets, where each such market inter-relationship is both explicit and formal Development at Sobi. Dr Fraenkel has broad may in turn contain several regional and more subtle and informal. experience from the pharmaceutical and market-layers. The European Union (EU) The pricing systems crucial for any biotech industry where he has held a number offers a certain degree of harmonisation; commercial success in Europe provide of international commercial and business however this is only with regard to the an example. Many European countries development positions. Dr Fraenkel has a co-ordination of drug approval: when a typically utilise reference-systems for background as a management consultant. drug is approved, it is valid for all countries assigning a price tag to a submitted drug. within the EU – and that’s it. This means that a set of other countries E: [email protected] Commercialisation of a drug in Europe are used as a reference for the price involves dealing with each country’s for that drug, and a specifi c formula is Dr. Anders Edvell, MD, MBA, PhD, is reimbursement system as well as non- employed to obtain the price for a given Vice-President and Head of Sobi Partner reimbursement based commercialisation, market. However, these pricing systems Products. Dr Edvell has held a number of which is often multi-layered with regional are not only designed differently in each medical and commercial positions and has differences, sometimes down to the market, they also change over time, broad international experience from the hospital level. Across Europe there are typically with regard to which reference pharmaceutical and biotech industry. In also different practices for supply chains; markets are included. As a consequence, addition Dr Edvell has clinical and medical differences in patient demands, health the pricing sequence for how a specifi c experience from his time being a care traditions and medical standards; as drug is introduced into each European practising physician. well as the more obvious differences in market may mean the difference between languages, culture and currencies, and success and failure. E: [email protected] fi nancial practices. In addition, it has been To make this even more challenging, increasingly diffi cult for pharmaceutical some markets, for example the Italian

12 Business Development & Licensing Journal www.plg-uk.com market, employ several layers of pricing: The Conventional Partnering national, regional and local, which requires Approach dedicated capabilities at each level. Clearly, Historically the only alternative to to succeed in such an environment there going alone was to adopt a partnering is a need for capabilities that can not only strategy. This could be with either a large understand each local practice, but can pharmaceutical company with established also understand the relations between pan-European commercial presence, or local and national, and then between the a series of Europe-based distribution various national markets. To obtain such partners each focusing on a number of knowledge it is necessary to establish local markets. Such an approach usually excellent relationships with representatives leads to a structure in which the licensor for these various bodies. These diversities receives an upfront payment followed and complexities suggest that there is a by royalties on sales. However, there are need for a commercialisation platform that several limitations to such an arrangement can deal both with the local differences depending on the partnering approach and with their inter-dependencies: used, including: commercial practices that are decentralised • The royalty revenues represent only yet with pan-European harmonisation. a minor part of the total revenues generated. Going Alone in Europe: The • If the in-licensed product does Strategic Challenge not represent a large commercial An increasing number of companies now opportunity (which is almost never possess commercial rights for a single, the case with a niche product niche drug that meets specifi c market in relation to larger blockbuster Europe is needs. Typically these fi rms are focused on products), most larger partners will often perceived their domestic market, and their eventual not allocate suffi cient dedicated approach to Europe presents several resources to optimise product from a distance challenges. Europe is, as described above, a commercialisation. As such resources as a homogenous complex marketplace made up of numerous are outcompeted by the major heterogeneous markets, each with their proprietary products promoted by marketplace, own logic and timelines for reimbursement. the large pharmaceutical partner (i.e. Building a successful European infrastructure opportunity cost). particularly when requires both time and critical mass, factors • Loss of strategic freedom - once the viewed from the US which are increasingly diffi cult to justify in the product is out-licensed, the partner context of a single niche product. There is a will typically possess all commercial or Japan. Nothing risk that small companies may signifi cantly rights for the given markets for a long could be further delay or sub-optimise their support behind period. In the event of unforeseen the product for European patients. strategic situations and when the >> from the truth.

www.plg-uk.com Issue 21 | August 2014 13 Box 1: Case study

Assuming commercialisation responsibility in Europe and beyond:

• A company was handed back the ex-US rights for its product from a large pharmaceutical company. The large pharmaceutical partner had moderate success with this niche product and the assumption is that it decided to abandon the partnership because the product could not make suffi cient return within its full portfolio. • The licensor company has no infrastructure in Europe and does not have a strategic intent to build one. It decided to utilise a company operating a European PCP model and set up a long term partnership covering the pan-European and Middle East territories. • Within six months of entering the partnership, and following a joint and collaborative effort from both parties to reintroduce the product into the market, the product’s trajectory had already improved signifi cantly.

>> return of rights would be benefi cial, is an attractive alternative: the European offering commercialisation partnerships this may not be possible. Such Partner Commercialisation Platform (“PCP”), to one or a few local markets as situations may emerge where you offered by a few companies as a way to mentioned above. In short, the European have acquired other products, whether commercialise niche products in Europe. PCP may be understood as a specifi c niche or larger, which together with company that engages in partnerships the out-licensed product would The European Partner with fi rms that only have one or a few make it possible for you to establish Commercialisation Platform niche products, and conducts pan- your own commercial presence in The text below describes an approach European drug commercialisation in Europe. In another situation, you may to niche drug commercialisation in the a manner that is synchronised across be approached by a third company European markets that has emerged as a the various European markets. The wishing to buy your product to fi t its practice over the last two decades or so. PCP company is usually assuming full portfolio, or indeed your company, and Our defi nition of a niche pharmaceutical responsibility for the regional strategy, offering you a signifi cant payment. product consists of two main features: implementation and execution together • Where a multi-partner strategy in with its partner. An example of such Europe is adopted, for example 1. It is absolutely critical that the a company is Sobi (Swedish Orphan with businesses in one or a few product is indicated for a certain Biovitrum) or, more specifi cally, its Partner local markets, while these fi rms can AND well defi ned smaller patient Product business unit. offer local expertise, this approach population. However, this population fails to address all the challenges might be larger than defi ned by The key capabilities of a PCP company and opportunities arising from the the traditional orphan drug criteria. include: required pan-European co-ordination Products where sales could be - Partnership engagement, contracting of commercial operations. As such leveraged by visiting GPs would not and management a multi-partner approach requires be considered as niche products. - Supply chain management considerable internal co-ordination and 2. A further aspect relates to - Pricing, including tendering administrative burden. the complexity of the clinical - Managing Named Patient Requests environment in which the product is - Sales management and operations In summary, adopting a conventional used and the degree of clinical value - Marketing management and partnering strategy may result in a the product brings. In our defi nition, operations sub-optimal return on revenues and no a product indicated for a small - Medical and safety support strategic manoeuvrability, while at the population where there are already - Regulatory support same time forcing you to maintain costly several other compounds is more of - Financial handling obligations, such as those related to a commodity product and less of a - Launch sequencing manufacturing. niche product. - Customised cross-disciplinary Until recently there was no viable leadership alternative either to building up your own There are still only a few companies commercial capabilities in Europe or making today operating some variant of the Now, this may look like any a deal with a large pharmaceutical company European PCP, which should not be pharmaceutical company, so what is or multiple parties. However, now there confused with the many local businesses unique about a European PCP? In short,

14 Business Development & Licensing Journal www.plg-uk.com Box 2: Case study

Utilising a European PCP company for early market entry while maintaining strategic options:

• A company waiting for approval of its fi rst product in Europe the company set up an initial three-year partnership with decided to partner with a PCP company. The market potential a European PCP company. The European PCP company of the product’s fi rst indication was smaller than that of the was utilised to handle both initial Named Patient Usage second indication, which was at phase 3 stage. As such the fi rst distribution and later, after market approval, a full launch. indication did not fi nancially motivate the company to handle • A little later, the company also decided to utilise the the product itself in territories outside the US. The approval of a same platform for distribution in all markets ex-US. The second larger indication might be a more attractive basis to start partnership set-up made sure that the important product expanding its own business into new regions outside the US. could reach patients globally without delay. At the same • In order to keep all strategic options open for the future time the company could continue to create its business so that its fi nal ex-US strategy could be decided when strategy without being locked out of potential future the second and larger indication’s outcome was known, strategic options.

its key features may be summarised in support to partial engagements, such as terms of: sales and marketing only for approved - Customised partnership seeking drugs or Named Patient Usage and early mutual benefi ts access management with a regional - Flexibility and adaptability or pan-European scope. Contracts can - Scalability and synergy be short-term or long-term, with fi xed - Learning that generates unique and predicable fees. The PCP company commercialisation capabilities typically proposes a monthly service-fee together with a shared revenue level, that Customised and Flexible may be non-linear, or any combination Partnerships of these. Firstly and most importantly, any PCP As part of this customised approach, company is dependent upon the partners the PCP company is able to provide seeking to commercialise their niche dynamic deals, for example where an products in Europe. Therefore, the PCP initial full service contract is gradually company’s managers are keen to fi nd a transformed into a distribution and/or in- specifi c commercialisation set up that fi ts licensing deal only, in cases when a partner each of its partners’ particular situations, has decided not to build up its own rather than offering a standard fi t-for-all capabilities at all in the region. It is also Until recently solution. The initial dialogue between possible to adopt a different service mix for the PCP company and its new partner is different parts of Europe; all this to make there was no viable crucial as its outcome not only governs the sure that the partner’s short-term and alternative either commercial conditions between the two strategic intentions are supported. Example but also the very specifi c confi guration case studies of different and tailored to building up your of PCP capabilities aimed at successful partnerships set up by a PCP company are own commercial commercialisation. illustrated in Boxes 1 and 2. Examples of the questions that need to In addition to the fl exibility that can capabilities in be answered early in the partnership set- be built into such partnerships for the Europe or making up discussions include: What is the long- commercialisation of niche products term intention pursued by the partner in Europe, there are at least two other a deal with a large and its product? What are the commercial factors that make the PCP model objectives? What are the key factors that unique. One arises from economic and pharma company will enable fulfi lment of these objectives? commercialisation synergies due to or multiple parties. And what specifi c confi guration of handling a portfolio of niche drugs rather commercial capabilities must be utilised than a mix of major drugs with one or two However, now there to that end? The relationship is tailored niche products only. The second stems is an attractive to address the partner’s needs. This from operational synergies; the synergies may range from full commercialisation are inter-related. >> alternative.

www.plg-uk.com Issue 21 | August 2014 15 A European PCP may be understood as a specifi c company that engages in partnerships with fi rms that only have one or a few niche products, and conducts pan-European drug commercialisation in a manner that is synchronised across the various European markets.

>> Benefi ts of Niche Product Focus market conducts the various local A business platform that is dedicated commercial activities on a daily basis, to commercialising a portfolio of niche such as tendering, price negotiations, products in the European markets reimbursement negotiations, sales offers unique resource and knowledge- activities and supply, across the sharing opportunities where the various whole of Europe. In contrast, a capabilities – sales, marketing, medical, larger pharmaceutical company that regulatory supply, pricing and leadership commercialises only one or two niche – are all set up for niche products only, products will not be even close to the with their inherent logic, compared with volume of niche product-related activities major drugs. Furthermore, therapeutic- conducted and thus the local experience area synergies may also emerge, where and insights obtained. several products can be channelled The experience and insights generated towards the same target groups. by a PCP company’s operations constitute All this implies that the a core foundation for the continuous commercialisation costs may be shared re-building and updating of commercial across a set of products, to offer the capabilities customised for niche products The PCP model most cost-effi cient solution to the various in Europe thereby ensuring maximum provides a range of product-holders. It is also of the greatest effi ciency. As the European markets are importance to ensure patient access, since highly dynamic, changing frequently commercial solutions utilisation of existing infrastructure and and sometimes in a unpredictable that are customised resources will make it possible for the manner, a PCP company’s ability to company (via the PCP) to charge a price keep updated constantly at the local for niche products on for its innovative product that is acceptable level enables the provision of unique a case-by-case basis. and sustainable for payers in various knowledge and understanding on how European markets. This in turn would best to co-ordinate critical pan-European This approach off ers mean that the drug can be made available commercial activities. for patients with niche diseases. In summary, the PCP model provides the potential for a However, while cost-effi ciency is central a range of commercial solutions that signifi cantly better to profi t it is not the only advantage are customised for niche products on a provided by the PCP model; it also enables case-by-case basis. This approach offers fi nancial outcome the emergence of unique capabilities that the potential for a significantly better with a full range of cannot be offered by other models. financial outcome with a full range of strategic options for the future of a strategic options Unique Experience Generation product. Also, this option is likely to and Sharing speed up the access of innovative for the future of a Clearly, a company that operates niche medicinal products for patients product. with several niche products in the across Europe.

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www.plg-uk.com Overview of Non-Patent Exclusivities in Major Pharmaceutical Markets Patent protection is the mainstay of exclusivity for new pharmaceutical products. However, the 7-12 years necessary to bring a pharmaceutical product to market consume a substantial portion of the 20-year patent term, and some promising products may have limited or no patent protection available. Health authorities have therefore introduced several non-patent exclusivities unique to pharmaceuticals to encourage the development of products for children and rare diseases, and to compensate for regulatory delays.

By Roxanne P Spencer, RPS IP Management; and Nicholas Adams, Consultant

hen assessing a product’s pharmaceuticals; it appears that if a commercial aspects, it is product has no patent protection, a Wimportant to understand all generic may be approved.5 potential exclusivity available. Market and data exclusivities are in addition to, and 2. Paediatric Exclusivity concurrent with, any patent protection To improve the understanding covering the therapeutic or its use. of pharmaceuticals in paediatric Whilst other articles provide specifi cs populations, the US, EU, Japan, and either for a particular exclusivity1 Canada provide additional exclusivity or a single country, we review the periods to manufacturers who conduct non-patent data protection available certain clinical studies.6 Generally, for pharmaceutical products in the paediatric patients are considered to be US, Europe, and the BRIC and other younger than 18 or 21 years, with the countries; these represent approximately precise defi nition and subgroups varying 80% of the global market by 2011 between countries. spending,2 and are key countries in any Notably, paediatric exclusivity (PE) may About the Authors global licensing deal. be attached to all exclusivity periods in the US and to Orphan Drug Exclusivity in the Roxanne Spencer is an intellectual 1. Data & Market Exclusivity EU (see Figures 1 and 2). property strategist, and founder of RPS IP Most countries with established Management. With a particular focus on pharmaceutical markets provide periods 3. Orphan Drug Exclusivity pharma, she provides intellectual property of data exclusivity (DE) for both novel While many countries have incentives consulting services including due diligence, small-molecule and biological therapeutic for developing medications for orphan landscaping, and patent portfolio assessment products to delay generic competitors indications, not all offer market exclusivity and management. (Figure 1). The combination of DE to orphan drugs. Orphan Drug Exclusivity (which prevents a generic applicant from (ODE) (see Box 1) is available in the US, E: [email protected] referencing an innovator’s data) and EU, Japan, and South Korea, and China is T: +1.609.712.0418 market exclusivity (which prevents approval establishing a framework for orphan drugs of a generic application) can provide from (Figure 2).7 Nicholas Adams is a business development fi ve to ten years of market protection for professional with considerable experience brand name drugs. United States leading a range of international deal types DE is evolving in the BRIC countries.3 Data Exclusivity (including in- and out-licensing, divestments, While China and Russia have enacted Different periods are available for small- royalty buy-outs and M&A). Nick is currently statutory protections, India has consistently molecule drug products approved under consulting for several European and US stated that it will not implement any DE a New Drug Application (NDA) per biotech/pharma companies. provisions.4 Brazil has data protection Section 505 of the Federal Food, Drug, laws to prevent unfair commercial use and Cosmetic Act (FD&C Act) 10 and for E: [email protected] but there is no formal DE for human biologics approved under a Biologics

18 Business Development & Licensing Journal www.plg-uk.com Figure 1: Data protection periods available for New Chemical Entities

8

Paediatric exclusivity

NCE

4 Number of Years Number

0 USA Europe Japan China S. Korea Canada Australia Russia

Figure 2: Data protection periods available for orphan drugs 20 License Application (BLA) per the Public 11 Health Service Act. 16 Small molecules which represent the Paediatric exclusivity fi rst approval of the active moiety are ODE 12 considered New Chemical Entities (NCEs) (see Box 2). NCE exclusivity prevents the 8 US FDA from accepting an application for use of the same active moiety in any of Years Number 4 indication that relies upon the innovator’s preclinical and clinical data, but does not prevent FDA from accepting an NDA with 0 USAEurope Japan China S. Korea another applicant’s own data. Abbreviated New Drug Applications (ANDA, 505(j) applications), and 505(b)(2) applications, can be fi led after only Box 1: What is an “orphan indication”? four years, and before expiration of the Orphan indications have country-specifi c defi nitions. fi ve-year NCE exclusivity period, with a • US: a disease which affects fewer than 200,000 persons in the US (or more than paragraph IV certifi cation that any Orange 200,000 individuals if “there is no reasonable expectation that costs of research Book-listed patents are either invalid or and development of the drug for the indication can be recovered by sales of the not infringed. Otherwise, such applications drug in the US”) 8 cannot be submitted until the end of the • EU: a disease which affects fewer than 5 of 10,000 individuals 25 NCE term. • Japan: a disease with fewer than 50,000 cases in Japan and for which there are If additional clinical data are required no other treatments 7 to demonstrate effi cacy of a new use • Korea: a disease which affects fewer than 20,000 people in Korea. or formulation of an approved active moiety, a three-year period of New Clinical Investigation (NCI) exclusivity is possible. Box 2: What is an “NCE” in the US? NCI exclusivity prevents the approval of a generic application that relies upon The statutory defi nition of an active moiety – the molecule responsible for the the innovator’s data for the approved physiological or pharmacological activity – excludes portions that make it a salt, ester, indication or formulation with exclusivity, or a non-covalent derivative (e.g., complex, chelate, or clathrate).9 Thus, while covalent though FDA may accept an NDA with derivatives, such as amides, were considered NCEs, new salts or esters of previously another applicant’s own preclinical and approved NCEs were not eligible for additional NCE exclusivity without showing that the clinical data. Products approved under ester was critical for the physiological or pharmacological action of the drug. In 2012, FDA the 505(b)(2) pathway or new esters of issued two decisions which changed this interpretation: the withdrawal of NCE status previously approved active ingredients may for Torisel (an ester of the approved moiety sirolimus, Rapamune) and the fi nding that themselves be eligible for a period of NCI Veramyst (an ester form of fl uticasone propionate) would not be considered an NCE.26 exclusivity, and multiple NCI periods are >>

www.plg-uk.com Issue 21 | August 2014 19 Table 1: Selected products that benefi t/ benefi ted from PE and ODE in the US Product Company PE ODE Indication (Year of Approval) Chronic myelogenous leukaemia (2001)b; dermatofi brosarcoma protuberans (2006); aggressive mastocytosis (2006); chronic eosinophilic Gleevec (imatinib Novartis Yes Yes leukaemia (2006); myelodysplastic & myeloproliferative diseases (2006); mesylate) gastrointestinal stromal tumours (2008); Philadelphia-positive acute lymphoblastic leukaemia (2013) Viread (tenofovir Gilead Yes Yes HIV-1 infection (2001)b,c; paediatric HIV infection (2010) disoproxil fumarate) Paroxysmal nocturnal haemoglobinuria (2007)b; atypical haemolytic Soliris (eculizumab) Alexion Noa Yes uraemic syndrome (2011) Torisel (temsirolimus) Pfi zer Yes Yes Renal cell carcinoma (2007)b Sabril (vigabatrin) Lundbeck Yes Yes Infantile spasms (2009)b Istodax (romidepsin) Celgene No Yes Cutaneous T-cell lymphoma (2009)b; peripheral T-cell lymphoma (2011) Ampyra (dalfampridine) Acorda No Yes Symptoms of multiple sclerosis (2010)b Imbruvica (ibrutinib) Pharmacylics, Janssen No Yes Mantle cell leukaemia (2013)b; chronic lymphocytic leukaemia (2014)

Notes: aApproved under a BLA. bInitial approved indication. cNon-orphan indication

>> possible for a single product (e.g. multiple Upon completion of the paediatric European Union indications or formulations). studies, six months is attached to all Data Exclusivity A pathway for similar biologic products relevant DE periods and patent exclusivities In the EU, small molecules and biologic was established in the Biologics Price listed in the Orange Book (see Figures 1 medicinal products – defi ned as any Competition and Innovation Act (BPCI and 2 on previous page). These extend the substance or combination which can be Act), but FDA is still developing industry period for which FDA cannot approve an used to treat or prevent disease in humans guidance for the approval of biosimiliars. ANDA or 505(b)(2) application. Notably, – are eligible for the same exclusivity The BPCI Act provides DE periods for the extension applies to all dosage forms, periods.14 New medicinal products can reference biologic drugs which would formulations, and indications of applicant’s receive eight years of DE coupled with two prevent FDA from accepting any follow- products which contain the active moiety. years of market exclusivity, and a potential on application for any indication for four one-year extension (known as “8+2+1”) years, or granting marketing approval for Orphan Drug Exclusivity for a potential of 11 years exclusivity. any such application for 12 years.12 Orphan drug designation must be An authorisation for one or more new requested prior to submission of a therapeutic indications that demonstrate Paediatric Exclusivity marketing application, and more than one “signifi cant clinical benefi t in comparison NDA holders of small-molecule drug sponsor may have orphan designation with existing therapies” must be received products who complete clinical for the same active moiety and condition. during the initial eight-year period to investigations in paediatric populations in However, ODE is only granted to the fi rst to obtain the extension.14 response to FDA’s “written request” are receive approval. During the ODE period, Under the centralised procedure, eligible for PE.13 Sponsors may propose an abbreviated application for the same abridged applications referencing the studies to FDA to form the basis of the product and indication cannot be approved; innovator’s data cannot be fi led until expiry written request. The studies do not need a product with the same active moiety that of the eight-year DE term, and cannot be to be successful in order to receive the is shown to be clinically superior in terms of approved until the end of the two-year exclusivity benefi t. effi cacy, safety, or contribution to patient market exclusivity term (or the additional PE can only be awarded if there at least care can be approved. one year extension). Applications for nine months of at least one exclusivity ODE applies only to the approved generic medicinal products under Article period (data or patent) remaining, and indication (which may be narrower than 10 (1) of Directive 2004/27/EC are similar as FDA has 180 days to review the study the initial orphan designation), though a to the US ANDA, and the products must report, studies should be submitted at least product can receive multiple ODE periods demonstrate bioequivalence to the 15 months before expiration of exclusivity. with concurrent or overlapping terms. reference product. Applications for hybrid PE is not available for products without DE Examples of products that have medicinal products under Article 10(3) of or an Orange Book-listed patent, nor for benefi ted from these exclusivities in the US Directive 2004/27/EC are likewise similar to biological products approved under a BLA. are illustrated in Table 1 and Box 3. the US 505(b)(2) pathway.

20 Business Development & Licensing Journal www.plg-uk.com Box 3: Example of exclusivities in the US - Treanda

Treanda (bendamustine HCl) for Injection was approved by FDA in 2008, fi rst for the treatment of chronic lymphocytic leukaemia (CLL) and then for use in treating indolent B-cell non-Hodgkin lymphoma (iNHL). As an NCE, Treanda was awarded fi ve years of DE as well as two separate periods of ODE for treatment of CLL and iNHL. All of these periods were extended by six months of PE. Several patents are listed in the Orange Book, including composition of matter coverage (COM on diagram) which runs to September 2029.

Approved for iNHL in Oct 2008; ODE + PE expires May 2016 COM NCE ODE PE

CLL ODE + PE expires Sept 2015 1st Approved for CLL in March 2008

NCE + PE expired Sept 2013 COM + PE expires Sept 2029 COM granted May 2013

0 10 20 Number of Years

Paediatric Exclusivity through the centralised procedure. A re-examination period of eight years As part of the centralised marketing Upon fi ling the MAA, it is necessary to is provided for drugs containing a new authorisation, manufacturers must either demonstrate that the designation criteria active ingredient. There is a re-examination agree with the European Medicines Agency for the indication are still valid and that the period of six years for new combination (EMA) upon a Paediatric Investigation Plan medicinal product provides a signifi cant drugs or drugs with a new route of (PIP) before submission of a Marketing benefi t to patients. administration which required new clinical Authorisation Application (MAA), or seek a Following marketing authorisation, ODE investigations for approval, while drugs waiver; the paediatric population is defi ned provides ten years of market exclusivity with new indications or new dosages have as between birth and 18 years.15 which prevents approval of an application a re-examination period of between four PE is awarded following completion for the same drug for the same indication. to six years.19 It appears that “signifi cant of the PIP, and inclusion of the results in All approved orphan drugs undergo a changes” compared with the existing the product information. As in the US, review after fi ve years, and the exclusivity product are likely to provide six years, studies do not need to be successful, and may be reduced to six years if the drug no while other changes only provide four PE extends the term of a supplementary longer satisfi es the original designation years. At the end of the re-examination protection certifi cate (SPC) by six months criteria.17 The ODE period may be extended period, the innovator must fi le the results for non-orphan drugs. Orphan drugs can following compliance with a PIP as of post-marketing surveillance to confi rm receive an extension of ODE (though no described above. safety and effi cacy. drug appears to have yet benefi ted from Clinical trials in a paediatric population this extension).16 Japan to collect safety or effi cacy information A Paediatric-Use Marketing Formally, Japan does not have DE per se, may extend the re-examination period to Authorisation (PUMA) which provides ten but rather re-examination periods to collect ten years.18,19 years of market exclusivity may be sought additional information on a drug’s safety Generally, orphan designation is sought for non-patented medicinal products that and effi cacy.18 During the re-examination during development, and provides a re- are exclusively developed for children in periods, a generic drug manufacturer examination period of up to ten years. accordance with a PIP. cannot fi le equivalency data and reference the innovator’s safety and effi cacy data. It China Orphan Drug Exclusivity appears that small-molecule and biological China characterises drugs as new (a drug An application for orphan drug designation products are subject to the same re- that has not been previously marketed must be made prior to fi ling the MAA examination periods. within China), generic, or import (which >>

www.plg-uk.com Issue 21 | August 2014 21 With a lengthy development process, ever-increasing costs and high attrition rate, it is important that pharmaceutical/ biotech companies are able to recoup their development costs, and the provision of market exclusivity is essential to the development of innovative products.

>> generally have a marketing authorisation DE period, which prevents the fi ling of an the innovation of effective and safe in the exporting country). Domestic abridged application for six years and its pharmaceutical products and the cost applicants can fi le marketing applications approval for eight years. to society in paying for medication. for either new or generic drugs while In addition, data from clinical trials of With a lengthy development process, import drugs are manufactured abroad the use of the drug in paediatric patients ever-increasing costs and high attrition and imported into China by non-Chinese submitted within the fi rst fi ve years of the rate, it is important that pharmaceutical/ companies.20,21 DE period results in a six-month extension biotech companies are able to recoup Any drugs which contain an NCE 20 of exclusivity.22 This additional PE is awarded their development costs, and the provision receive six years of DE, which prevents for completing the studies even if they of market exclusivity is essential to the a generic manufacturer from fi ling an indicate that a contraindication or warning development of innovative products. abridged application which relies on the statement should be added to the labelling. Ideally, patents would provide innovator’s data. An application may be suffi cient exclusivity. However, this is fi led if it contains a second manufacturer’s Australia not always the case and the provision of own data.20 Australia provides DE only for medicinal data/ market, orphan drug and paediatric For a new drug manufactured in China, products with “new active components” exclusivities provide valuable protection to an observation or monitoring period of no (defi ned as a substance or substances that products that might not otherwise more than fi ve years can be established, are primarily responsible for the biological be developed. which prevents the State Food and Drug effect).23 Generic applications that establish The most comprehensive set of Administration (SFDA) from accepting bioequivalence with a reference product exclusivities is in the US, EU and Japan. applications for the registration of a and that rely upon data submitted by an However, South Korea and more recently generic or an import drug. innovator cannot be fi led until the expiry China and Russia have introduced non- of the fi ve-year DE period. patent protection, though India is notably South Korea There is no mechanism for PE, and absent in providing non-patent protection. Similar to Japan, South Korea has a orphan drug designation provides priority From a licensing perspective, non- re-examination process. New drugs review and a waiver of registration fees, patent exclusivities are important to have a six-year re-examination period, but no additional market exclusivity.7 consider for the development of products new routes of administration have a with exciting effi cacy and safety data but six-year re-examination period, and new Russia a poor patent position. It can make the indications have a four-year re-examination In August 2012, Russia enacted a difference between a product being a period.1 An abridged application showing six-year period of data protection for commercially viable licensing opportunity, bioequivalence to a reference drug cannot pharmaceuticals to prevent a generic or not. be fi led during the re-examination period. applicant from relying on an innovator’s data.24 There do not appear to be any References Canada provisions for any additional exclusivity. 1. International Federation of Canada offers DE only for new medicinal Pharmaceutical Manufacturers & ingredients, and not for new dosage Conclusion Associations (Geneva) 2011. “DE: forms or indications.22 Innovative drugs There will always be, and needs to Encouraging development of new can qualify for a combined market and be, a balance between encouraging medicines”. Available at: www.ifpma.

22 Business Development & Licensing Journal www.plg-uk.com The most comprehensive set of exclusivities is in the US, EU and Japan. However, South Korea and more recently China and Russia have introduced non- patent protection, though India is notably absent in providing non-patent protection.

org. [A review of national laws relevant 10. 21 U.S.C. § 355, “New drugs” Task Force, Japan Pharmaceutical to data protection.] 11. 42 U.S.C. § 262, “Regulation of Manufacturers Association. (March 2. IMS Institute for Healthcare Informatics biological products” 2013) “Information in English on Japan (Parsippany, NJ, US), July 2012. “The 12. 42 USC § 262(k), “Licensure of Regulatory Affairs”. Available at http:// Global Use of Medicines: Outlook biological products as biosimilar or www.jpma.or.jp/english/parj/1303.html Through 2016”. Available at: www. interchangeable“ 19. Masuda S, “The market exclusivity imshealth.com 13. FDA Guidance for industry, qualifying period for new drugs in Japan: 3. Vashisth S, Singh G, Nanda A, “A for paediatric exclusivity under section Overview of intellectual property comparative study of regulatory trends 505A of the Federal Food, Drug, protection and related regulations”. J of pharmaceuticals in Brazil, Russia, and Cosmetic Act, Revised . FDA. Generic Med, 2007;5(2):121-130 India and China (BRIC) countries”. J September, 1999 20. State Food and Drug Administration, Generic Med Bus, J Generic Med Sect, 14. Directive 2004/27/EC of the European Provisions for drug registration. SFDA 2012;9(3):128-143 Parliament and of the Council of Order No. 28, 2007. http://eng.sfda. 4. Barpujari I, Nanda N, “Weak IPRs as 31 March 2004 amending Directive gov.cn/WS03/CL0768/61645.html Impediments to Technology Transfer - 2001/83/EC on the Community code 21. Zheng X, “Regulation of medicines in Findings from Select Asian Countries”. relating to medicinal products for China”. WHO Drug Inf. 2012;26(1):3-14 J Intellect Prop Rights, 2013;18 human use 22. Health Canada (2011), “Guidance (September):399-409 15. Regulation (EC) No.1901/2006 of Document: Data Protection under 5. Valente V, “Generics in Latin the European Parliament and of C.08.004.1 of the Food and Drug America: An analysis of the Brazilian the Council of 12 December 2006 Regulations”. experience”. J Generic Med, on medical products for paediatric 23. Therapeutic Goods Act 1989 2006;4(1):30-36 use and amending Regulation (EEC) 24. Mueller L. (July 31, 2013) “DE in 6. Walters S, “Report to WHO concerning No 1768/92, Directive 2001/20/EC, Russia – One Year Later”. Available international guidelines for paediatric Directive 2001/83/ EC and Regulation at: http://bricwallblog.wordpress. medicines”. Paediatric Regulators (EC) No 726/2004 com/2013/07/31/data-exclusivity-in- Network Meeting (February 2010). 16. European Commission, “General report russia-one-year-later/, accessed 30 Available at: http://www.who.int/ on experience acquired as a result of October 2013. childmedicines/paediatric_regulators/ the application of Regulation (EC) No 25. Butlen-Ducuing F, Rivière F, Aarum meetings/en/index.html 1901/2006 on medicinal products for S, Garcia J-L, “European Medicines 7. Song P, Gao J, Inagaki Y, Kokudo N, paediatric use (June 2013)”. Available Agency Support Mechanisms Fostering Tang W, “Rare diseases, orphan drugs, at http://ec.europa.eu/health/fi les/ Orphan Drug Development”. Drug and their regulation in Asia: Current paediatrics/2013_com443/paediatric_ News Perspect, Vol 23(1), Jan/Feb 2010 status and future perspectives”. report-com(2013)443_en.pdf 26. Hogan Lovells, “FDA denies 5-year Intractable Rare Dis Res, 2012;1(1):3-9 17. Article 8, Regulation (EC) No 141/2000 exclusivity to “stable esters” and 8. 21 CFR § 316.21 “Verifi cation of Of the European Parliament And of confi rms structure-based approach orphan-drug status” the Council of 16 December 1999 on to exclusivity”. Pharmaceutical & 9. 21 CFR 314.108 “New drug product orphan medicinal products Biotechnology Alert, October 4, 2012. exclusivity” 18. English Regulatory Information Available at http://hoganlovells.com www.plg-uk.com Issue 21 | August 2014 23 Connectivity, Adaptive Pathways & Deal Structuring Digital technologies, along with advancements in data analytics, genomic and diagnostic technologies, and access to real-world patient data, are making “adaptive” fast-track access for precision and more personalised medicines a real possibility. For companies holding the rights to potential breakthrough drugs, these new, more interactive and fl exible approval and reimbursement frameworks could create increased value earlier in the development phase.

By Helen Cline, Legal Director, Pinsent Masons; Paul Ranson, Partner, Pinsent Masons; Prof Sarah Garner, Associate Fellow & Adaptive Licensing Project Director CASMi; and Christian Hill, Director, MAP BioPharma and MAP MedTech

he full development process for an We look in more detail at these drivers innovative medicinal product can take for change below. About the Authors Tup to 12-15 years and a typical fi nancial Helen Cine is a legal director in the IP and Life investment of over £1 billion. Companies at The Drivers for Change Sciences groups at Pinsent Mason LLP. She has all stages of the drug development pathway Data Mining experience in all areas of intellectual property will make these large investments only In the current business climate, there is law with a particular focus on patent and when they have suffi cient certainty about a push for BioPharma organisations to regulatory law as it applies in the life the science, regulatory predictability, market capitalise on the growing patient and health sciences sector. size, market access, intellectual property and system data available and increasingly regulatory data protection. sophisticated data analytics techniques, as T: +44 (0)20 7418 8240 Globally, healthcare systems are the industry looks for ways to accelerate E: [email protected] changing as governments implement medicines development and improve policies to ensure healthcare costs are its competitiveness. Mining of genomic Paul Ranson is a partner in the IP and Life sustainable. The business climate for data, clinical data, and data from third Sciences groups at Pinsent Mason LLP. Paul is the industry is also going through a party sources, such as patient electronic a specialist in the regulatory and commercial transition as we move from the dream health records, medical images, biobanks needs of the pharmaceutical, biotechnology of a blockbuster to a more stratifi ed – and other data platforms, may provide and medical devices sectors. personalised – approach to medicines. In new insights and a better understanding addition, patent expiries, declining research of disease mechanisms and therapeutic T: +44 (0)20 7418 8274 and development productivity, pipelines of targets improving the success rates of target E: [email protected] more high-risk molecules often with smaller compounds. These tools are seen as having potential markets and market pressures, in the potential to increase productivity at all Sarah Garner is a pharmacist based at CASMi particular the requirements to demonstrate stages of the drug discovery, development (http://casmi.org.uk), the Centre for the value compared with existing treatment and delivery process. Such data driven Advancement of Sustainable Medical. Sarah is options, are all pushing drug companies to approaches are also seen as a possible way also the Associate Director for R&D at NICE and reassess their drug development models. to improve effi ciency by enabling drug an honorary professor at UCL. Historically, challenges faced by candidates to fail faster. companies wanting to accelerate patient E: [email protected] access to medicines have included the Digital Health historic lack of a co-ordinated approach to Medical equipment and technology, Christian Hill is Director of Market Access and evidence gathering by the regulatory and monitoring everything from heart rate to Government Affairs at MAP BioPharma and MAP health technology assessment bodies. This blood chemistry, are now being networked MedTech. This group offers consultancy services is changing with public-private partnership and connected to electronic patient that help medtech and biopharma clients collaborations, such as the UK Dementia records, personal health records, and other achieve optimal market access in Europe. Research Platform (UKDP), the increased healthcare systems with the potential for willingness of patients to share their real-time analysis of these data streams. E: [email protected] data and the digitalisation of healthcare, In addition, advances in communication allowing patient self-reporting in real-time. technologies, such as mobile medical

24 Business Development & Licensing Journal www.plg-uk.com Digitalisation is recasting the entire healthcare system allowing patient self reporting in real-time which could potentially have a quantum eff ect on drug development pathways, allowing patients to have a bigger voice and enabling them to communicate what is of benefi t to them.

applications, are supporting active patient New Models for Clinical Trials engagement in their own healthcare Traditionally, clinical trials have been – allowing patients to communicate in designed to demonstrate how an real-time about their experiences with experimental treatment affects the particular drugs and treatment regimes – symptoms of a condition or disease over facilitating the shift to more adaptive and time in a large, representative patient fl exible approaches to clinical trials, drug population compared to a placebo or approval and reimbursement. other alternative. However, based on the advances that have been made in New Levels of Transparency, Openness stratifi ed medicine and health information & Collaboration technology, including the use of real- Extracting value from healthcare data for world data, the randomised, double-blind, all its benefi ciaries (including clinicians, placebo-controlled model may no longer clinical researchers, pharmaceutical be the best approach in all cases. The companies and healthcare policy-makers) data do not typically demonstrate how Box 1: The ‘National Lung will require new ways of working medicines perform in a normal clinical and, most importantly, new levels of setting; this can make it diffi cult for Matrix’ trial transparency and openness. decision makers to determine accurately Global transparency policies being a medicine’s possible value and may This groundbreaking clinical trials developed aim to facilitate wider access subsequently restrict patient access. collaborative project, in which patients to clinical data, making data mining New clinical trial models have been with non-small cell lung cancer will possible. Many companies that have proposed to improve understanding of be given specifi c drugs according traditionally been intensely protective of how a treatment will work in practice. It to the genetics of their tumour, has their intellectual property are devising is suggested that if these new trial models been recently launched in the UK. policies to share drug trial data and other were embedded in the adaptive approach The trials are scheduled to open data. In addition, the new Clinical Trials to drug licensing, the approval and later this year at a number of centres Regulation and the European Medicines reimbursement status may be more certain across the UK. Researchers will be Agency (EMA) proposed new policies will and it may be possible to secure market given access to libraries of drugs ensure that clinical trial data are more access for drugs that provide a benefi t developed by AstraZeneca and Pfi zer, publicly available. Open source models for subgroups of patients but do not pass 12 from AstraZeneca and two from for research are also becoming more the traditional evidentiary thresholds for Pfi zer – allowing several drugs to be prevalent. Recently, GlaxoSmithKline approval and reimbursement. tested at the same time, within one (GSK) and Novartis have deposited data Interestingly, Cancer Research UK trial. Patients will be enrolled into the on compounds active against the malaria has recently announced a revolutionary trial arm offering the drug that best parasite with the European Bioinformatics adaptive approach to clinical trials that matches their genetic profi le. Institute. How this open source model aims to advance lung cancer treatment – will fi t within the traditional protected IP the “National Lung Cancer Matrix” trial www.cancerresearchuk.org business model remains to be seen. (see Box 1). As proposed, the trial model >>

www.plg-uk.com Issue 21 | August 2014 25 Box 2: The Salford Lung Study

The Salford Lung Study is an example of a new real-world study providers. Importantly, joint scientifi c advice was requested and and is the fi rst attempt to carry out a pragmatic randomised obtained from the UK MHRA and the UK National Institute for clinical trial prior to registration of a new treatment. The study Health & Care Excellence (NICE) before the project commenced. is exploring the real-world benefi ts of GSK’s Breo It is utilising a linked database system including Salford’s e-Health Ellipta, a once-daily combination of vilanterol + fl uticasone records infrastructure and real-time and other integrated data furoate in a new dry-powder inhaler (DPI), for the treatment collected from a variety of sources. Evidence generated from the of chronic obstructive pulmonary disease (COPD), alongside study will complement GSK’s clinical trial programme. currently available treatments. It represents a unique collaboration between the biotech and pharmaceutical industry, http://thorax.bmj.com/content/early/2014/03/06/ academia, medical informatics organisations and healthcare thoraxjnl-2014-205259.full

>> recognises that every patient’s cancer is benefi ts of a drug before it has been unique and adopts a more personalised licensed (Box 2). The study is exploring approach, targeting particular genetic the real-world benefi ts of a late-stage abnormalities in each patient’s tumour. GSK investigational respiratory medicine The trial is a collaboration between Cancer alongside currently available treatments Research UK, the UK National Health and is a collaboration between the Service (NHS), and two drug companies, biopharma industry, academia, medical AstraZeneca and Pfi zer. informatics organisations and healthcare In another innovative ongoing project, providers. a shared interest in the evidence base between regulators and payers has led Creating Regulatory & Funding to a range of work to explore how each Predictability can meet their own responsibilities with Medicines – with a few exceptions mutual benefi ts to both. The Salford – require a marketing authorisation Lung Study is an example of an ongoing before they can be promoted for specifi c real-world study in the UK to access the indications. Balancing the need for access to new drugs, particularly in life- threatening circumstances, with the need Data are now more regularly to ensure a positive benefi t/ risk profi le so as not to compromise patient safety, is an required to demonstrate that ever-present dilemma. Since thalidomide, and as a result of methodological advances, medicines regulators have the product not only works been progressively more explicit about the evidence requirements for product clinically and provides some authorisation in an effort to ensure safety and demonstrate effi cacy. However, some measurable benefi t relative to see current regulatory systems as being overly concerned with safety and a barrier the standard of care, but that to early patient access to new medicines. Whilst many patients expect drugs to be it also potentially off ers some safe and look for recourse in the event of adverse events, others with serious economic advantages in terms life-threatening conditions may be less risk averse. of impacting on the overall Although there are existing legal mechanisms in Europe and internationally cost of therapy. that expedite access to both unlicensed

26 Business Development & Licensing Journal www.plg-uk.com Box 3: EMA adaptive licensing pathway

Adaptive licensing is a fl exible pathway for the approval of the conditional marketing authorisation mechanism (for medicines innovative medicines to treat unmet medical needs as understood addressing life-threatening conditions), patients’ registries and in the current EU legislation. A staggered approach to market pharmacovigilance tools that allow collection of real-life data and the access is envisaged in which, after a multi-stakeholder planning development of risk management plans. phase in a “safe harbour”, a product is allowed earlier market A framework to guide discussions of individual pilot studies access in a defi ned group of patients and under carefully has been published and the EMA has advised that 20 companies controlled conditions; the licensing indications – and its price and have already applied and two medicines in development reimbursement status – are progressively modifi ed in the light of have already been selected to progress to the next stage. greater knowledge from wider use. These successful companies will now be invited, with other It is anticipated that adaptive licensing will build on existing stakeholders (e.g. payers and patients) to take part in an informal regulatory processes and extend the use of elements that are already discussion without risk. The formal approval process will only in place, including scientifi c advice, centralised compassionate use, commence after this stage.

and licensed medicines, the current It is envisaged that these new adaptive approach to the regulation of medicines pathways will be a comprehensive route Box 4: UK – Early Access poses particular challenges in the era for new drugs, not only from a regulatory to Medicines Scheme of “stratifi ed medicines”. This involves perspective, but also incorporating looking at smaller groups of patients reimbursement and health technology The UK Government launched the to try to fi nd ways of predicting which assessment (HTA) elements. EAMS scheme on April 7, 2014 for treatments are particularly suitable for It is however vital that companies and medicines that are in the licensing different subgroups of patients, for HTA agencies agree a fl exible approach process but have not yet received example, those with specifi c genetic to the pricing and reimbursement of a licence. The proposed scheme is markers. There are practical challenges such products. A possible solution unfunded and will coexist alongside in building the clinical evidence base may be managed-entry agreements or the existing early access and early necessary for approval under current risk-sharing agreements under which a licensing European framework and is regulatory mechanisms where patient manufacturer and a payer or provider intended to support development and populations are very small. would establish specifi c conditions for patient access in the UK to medicines There have been a suite of recent reimbursement of a medicine. This may being developed for life threatening initiatives to update the regulatory possibly be a useful stepping-stone or seriously debilitating conditions system and facilitate drugs getting towards the development of new pricing without adequate treatment options. onto the market earlier without unduly and reimbursement models. Under the EAMS, drug companies compromising patient safety. For example, In the UK the 2014 Pharmaceutical will have the chance to follow a three- the EMA recently announced a pilot Price Regulation Scheme (PPRS) states stage, fast-track process for bringing scheme for its adaptive licensing pathway that companies may request value-based their products to the market. They (Box 3), in the UK the MHRA announced appraisal of their new medicines (with will be able to obtain a “Promising a new Early Access to Medicines Scheme such requests not to be unreasonably Innovative Medicine” (PIM) designation (EAMS) (Box 4), and also worth mentioning refused) and also that the launch price from the MHRA to signify, during the is The Medical Innovation Bill, a legislative proposed to the UK Government’s development stage of a new drug, the proposal in the UK to defi ne more clearly Department of Health should be set at potential of that product for treating clinicians’ liability for prescribing unlicensed a level that is close to their expected patients with life threatening or seriously medicines in order to encourage the use value as assessed by NICE. Through the debilitating conditions for which there of new innovative drugs (the so-called PPRS negotiations, fl exible pricing was is either no cure or where existing “Saatchi Bill”). introduced in 2009 and reaffi rmed in treatments are unsatisfactory. The As to funding, pricing and the 2014 scheme. This allows a scheme companies could also obtain a scientifi c reimbursement, the adaptive licensing member to apply for an increase or opinion which would allow doctors scheme will, as indicated above and in decrease to a product’s original list price to prescribe the drug and can also be the boxed texts, bring all stakeholders to in light of new evidence or a different considered for a new licensing and rapid the table earlier so that their respective indication being developed. It may be that commissioning process being created priorities are clear at the onset and so the this approach is the most logical solution by NICE and NHS England, called data package required will refl ect both to the evidence base changing through “commissioning through evaluation”. licensing and reimbursement requirements. adaptive licensing, in that it may justify a >>

www.plg-uk.com Issue 21 | August 2014 27 These new fl exible pathways may also impact on the timing of deals and on the fi nancials.

>> higher price over time and for different real value of the product. Therefore, indications. Obviously this may have an for companies seeking partners for impact on royalty payments negotiated new, early-stage products, it is critical under partnering agreements and these to open early lines of communication adaptive approaches will need to be with the key stakeholders and obtain considered during negotiations – will input on what products will and what the licensor want to, or be able to retain will not be of value. As discussed above, a right to, be at the table when price is regulatory bodies, such as the EMA being negotiated? and the MHRA and HTA bodies, are becoming increasingly willing to work Impact on Deal Structuring with companies to develop more effective The drug development and delivery clinical development programmes. process is uncertain and the parties to The most signifi cant leverage a licensor partnering negotiations need to take a company can bring to the negotiating view on the importance and value of a table is solid data to alleviate risk.The key new medicine when it is still in the early to adaptive licensing will be the harnessing It is envisaged stages of development. We are seeing of real-world evidence to monitor the an increasing focus on market access approved cohort with new digital tools and that these and reimbursement issues. Companies strategies. Adaptive clinical trial designs seeking a cash-rich partner need to be could provide valuable knowledge and new adaptive prepared to differentiate their pipeline information as to which patients respond pathways will be products; investors and collaborators to a particular therapy and why. Larger are asking will it work, and if so, companies and public investors may value a comprehensive will it matter to patients, payers and the early-stage proof-of-concept data route for new healthcare systems? Data are now more if they feel more confi dent about the regularly required to demonstrate that development and approval process for drugs, not only the product not only works clinically these drugs and have more confi dence from a regulatory and provides some measurable benefi t in the predictability of the outcome. It relative to the standard of care, but that is envisaged that the regulatory process perspective, but it also potentially offers some economic under these new frameworks will be more advantages in terms of impacting on interactive, fl exible and refl ective of the also incorporating the overall cost of therapy. As part of disease and patient being treated. reimbursement and the due diligence exercise, companies As past deals have shown, bidding wars are now often looking for signs of early can erupt when the data appear. AiCuris health technology engagement with the key opinion leaders, invested in collecting more data when its assessment such as regulatory authorities, HTA phase 2 results were not enough to attract bodies, payers, patients, and clinicians, good offers. The additional phase 2 elements. to establish and gather data on the data led to approaches by a number of

28 Business Development & Licensing Journal www.plg-uk.com The key to adaptive licensing will be the harnessing of real-world evidence to monitor the approved cohort with new digital tools and strategies. Adaptive clinical trial designs could provide valuable knowledge and information as to which patients respond to a particular therapy and why.

potential partners and AiCuris secured a commences on the grant of the earlier what is of benefi t to them. For drug €110m upfront payment from Merck & approval and not on full approval. companies, regulators and payers, having Co for exclusive global rights to develop Earlier approvals, under the adaptive access to real-time data will be the game and commercialise candidates in its human pathway will initially focus on a narrowly changer. Cross sector collaborations, cytomegalovirus portfolio, including defi ned indication with few patients convergence of technologies and adaptive letermovir, its lead compound which had and research will generally continue into approaches to clinical trials, licensing fast-track status in the US.1 broader indications. During this period and reimbursement will help in getting These new fl exible pathways may also of further research the regulatory data new medicines to patients faster and in impact on the timing of deals and on the protection period may gradually be optimising patient outcomes. This may well fi nancials. Perhaps companies may be eroded. In addition, as interpreted by include a re-appreciation of development more reluctant to partner at early phase 2 recent case law, an accelerated approval, risk by potential investors and licensees in and products that are accepted onto these in this case a conditional marketing life sciences technology where they can new access pathways may command authorisation, is considered to start see earlier marketing potential. bigger upfront payments. Companies may the timer for supplementary protection In addition to an increased willingness also need to learn to partner with new certifi cate protection.2 The date of the to invest, these accelerated access routes players such as bioinformatics companies early approval is the point from which the may lead to changes in milestone and who, as discussed above, will have a possible fi ve-year supplementary extension royalty structures and in the parties’ crucial role in the more accurate profi ling to the patent term is to be calculated. respective roles and responsibilities in of candidates. The legal position, as it currently stands, development agreements, and similar on these issues could have commercial collaborations, in terms of managing the Eroding IP & Regulatory Data implications and these should be development process. However, these Protection considered as part of any decision to new accelerated access pathways are as Accelerated access may impact on pursue an earlier approval route. yet untested so there is uncertainty; the intellectual property and regulatory patent, regulatory and reimbursement data protection and have commercial Conclusion position is potentially complex and expert implications. Under EU legislation, newly Although funding and commissioning of advice is recommended. authorised medicinal products may new innovative medicines may remain benefi t from an eight-year period of a concern, there are opportunities for REFERENCES data protection and a ten-year period companies to help shape the new access 1. Press Release, AiCuris, October 15th, of marketing protection. The period pathways to patients in Europe. The 2012 (http://www.aicuris.com/index. of data and market exclusivity starts one-size-fi ts-all model for medicines is php/fuseaction/download/lrn_fi le/2012- from the date of the granting of the no longer appropriate. Digitalisation is 10-15-aicuris-and-merck-enter- marketing authorisation. There is no recasting the entire healthcare system exclusive-worldwide.pdf) specifi c guidance, as far as we are aware, allowing patient self reporting in real-time 2. AstraZeneca AB v Comptroller General on when the period of data and market which could potentially have a quantum of Patents, UK High Court of Justice exclusivity will start for authorisations effect on drug development pathways, (England & Wales), Chancery Division granted under EU procedures for earlier allowing patients to have a bigger voice (Patents Court) Case Number: C-617/12. approval, but it is arguable that it and enabling them to communicate

www.plg-uk.com Issue 21 | August 2014 29 Book Review: Transforming Big Pharma

Big Pharma is facing a crisis. R&D productivity is going downhill and blockbuster products are falling off the patent cliff. Investors have little confi dence in the future success of the companies as refl ected in share prices underperforming compared to the market. This is the “half-empty” view of Big Pharma’s future. In contrast, John Ansell takes the “half-full” view in his book, Transforming Big Pharma.

By Roger Davies

Concepts, Misconceptions Economist article summarised three habits & Prospects of management consultants: presenting Transforming Big Pharma is written “to stale ideas as breakthroughs; naming propose how, in the current state of fl ux, model fi rms; and the sale of management Big Pharma can best pilot its way through tools off the back of numbered lists or the crisis and transform its prospects”. facile principles. Needless to say these bad Ansell is well equipped to do this based on habits were identifi ed by… a management his experience in Big Pharma companies consultant, Stephen Covey… eager to and as a consultant advising companies sell his latest book! The Economist article and writing on industry matters. concluded that the most irritating thing about management gurus is that their Concepts failures only serve to stoke demand for The initial chapters of the book explain their services! Transforming Big Pharma how the pharmaceutical industry is By John Ansell different from many others. For example, Misconceptions the high percentage of sales invested Misconceptions arise because the Published by Gower, September 2013 in R&D, lengthy timescales and risk for distinctiveness of the pharmaceutical ISBN: 978-1-4094-4827-3 development of new products, and industry is not well understood both inside (E-book version: 978-1-4094-4828-0) where the defi nition of a customer is and outside of the industry. For example, 265 pages Hardback uncertain (a patient, a doctor or a payer the estimates of times to market for Publisher website price: £63 or any combination of these). As a result, new technologies such as gene therapy, traditional management concepts often stem cells, genomics and personalised About the Review Author promoted by management “gurus” fail medicine were, and maybe still are, far too to take account of the distinctiveness of optimistic. As a result of misconceptions Roger Davies works with Medius as a the industry and peddle concepts that are about the industry, various large non- consultant in licensing and business neither use nor ornament. pharma companies (such a Proctor & development. Having personally completed According to the author, three of the Gamble) have tried to enter the market, more than 100 pharmaceutical deals he following seven management concepts are and then pulled out. In addition, many Big specialises in valuations, deal structuring of little or no use in the pharmaceutical Pharma companies within the industry also and negotiating licensing and acquisition industry: SWOT, Benchmarking, Market suffer from misconceptions or a lack of deals. He is the former Chairman of the Access, Product Life Cycle Management, understanding regarding technologies and UK Pharmaceutical Licensing Group, the Strategic Alliances, Boston Matrix and Core markets. These companies have adopted a professional association of licensing and Competences. Which ones do you think number of strategies to try to improve their business development executives and is they are? The answers are at the end of prospects, such as M&A and diversifi cation. the Finance module leader for the Business this article. The mega mergers have resulted in Development MSc at the University of The author is not the fi rst commentator cost savings but have not dealt with the Manchester. Roger has a Master’s degree to criticise management gurus for peddling fundamental issue of R&D productivity. in Economics. inappropriate concepts. An October 2009 Similarly, a number of Big Pharma

30 Business Development & Licensing Journal www.plg-uk.com Traditional management concepts often promoted by management “gurus” fail to take account of the distinctiveness of the industry and peddle concepts that are neither use nor ornament.

companies that sought to diversify into by the Vioxx affair; new technologies such to identify and analyse key trends and generics came unstuck, e.g. Sanofi and as high throughput screening generate strategies is much more understandable GSK, so by 2007 the only survivor of many product opportunities but are and relevant to industry executives this strategy was Novartis with Sandoz. poor predictors of success; the entry of than the blue-sky, theoretical and more However, in recent years Big Pharma companies into higher risk therapeutic academic analysis of the future of the companies have re-entered generics partly areas such as Alzheimers; and greater industry by Brian Smith in his book The to get established in developing countries, commercial ruthlessness. Future of Pharma (Reviewed in the BD&L e.g. Abbott’s $2.9bn acquisition of CFR However, the attrition rate seems to Journal, Issue 19, July 2013). Pharma, a branded generics company have stopped as there was an increase Some of the author’s conclusions based in Chile. The author believes that in 2012 of new molecules approved in in Transforming Big Pharma are open this re-entry into the generics market will the US, perhaps refl ecting a slightly less to further analysis or questioning. For “again prove to be a poor strategy”. cautious regulatory approach by the example, this reviewer is sceptical that the The diversifi cation into OTC is also FDA. In the context of an increase in the commercial potential (profi tability) of new not easy given the lack of new products number of new products at each phase products in aggregate will be similar to or and the lower margins than prescription of development, this suggests that the higher than old ones. If the author is right speciality brands. Biosimilars also present number of approvals in the short term will that more new products will be approved a huge challenge given the regulatory recover from the low levels of prior years. and the commercial potential of each will requirements. On the other hand, orphan The more populous pipeline means that be at least the same or higher than in products represent an opportunity. Whether Big Pharma will have the opportunity to the past, then the overall drugs bill will or not diversifi cation into emerging markets acquire or license suffi cient new products. skyrocket. As a consequence, governments such as China and India will provide any This, combined with steady or improved will seek to reduce the prices of new signifi cant long-term growth in profi t attrition rates and a view that the products thereby limiting their commercial remains to be seen, especially in the light commercial potential of the new approved potential. Just look at the situation in of recent events targeting Big Pharma molecules will be at least the same or Germany with AMNOG. companies with corruption enquiries and higher than in the past, leads the author Transforming Big Pharma is a compulsory patent licences. to his optimistic view that the prospects particularly interesting book as it provides for Big Pharma are good, subject to Big a comprehensive overview of the issues Prospects Pharma adopting appropriate strategies. being faced by Big Pharma and expresses So what are the prospects for Big Pharma The most important strategy is the need an opinion about the likelihood of success companies given that many of the for Big Pharma companies to step-up of each of the strategies being pursued. strategies they have adopted maybe found activity to acquire and develop new It is refreshing to see the vital importance wanting? The lifeblood of the industry is products (including the use of alliances) of new product development (and for new products. But there is a long term as this is the only strategy with the business development executives the need trend in the decline in the number of new transformative power to ensure the survival for successful alliances) coming back into molecules being launched. On the other and success of Big Pharma companies. the spotlight after years of mega mergers hand the number of new R&D projects and diversifi cation that have failed to according to industry data has been Conclusion deliver transformative performance for Big increasing so, apart from a minor effect This is an easily readable, well-argued Pharma companies. As such the book must of increased reporting of projects, the book that draws on a wide range of be of interest to all Big Pharma companies failure rate / attrition rate of new products sources and careful analysis of industry as a sounding board for their strategic has been increasing. For example, the information to separate out the facts from analysis and future direction.

US FDA found that the percentage of the misconceptions relating to the industry

new products in phase 3 development and Big Pharm in particular. There is a lot Matrix. Boston that failed to reach the market increased of interesting data in the book ranging and Management Cycle Life Product

from 20% in the 1990s to 50% by 2005. from probabilities of product development Benchmarking, are industry pharmaceutical

The author identifi es the reasons for this failure to persistent under forecasting of the in use no or little of strategies three

decline as: higher regulatory barriers driven peak sales. The down-to-earth approach the three): paragraph (from Answer

www.plg-uk.com Issue 21 | August 2014 31 Deal Watch

Welcome to the June Deal Watch, our monthly analysis of the top pharma deals. In line with our customary practice, this review focuses predominantly on those deals where fi nancial terms are disclosed during June. So, as we move into the summer of 2014, what’s hot and happening in terms of deals this month?

Deal Values Hotting Up… in all genotypes. With its own products in cquisitions lead the way and development, this clearly signals Merck’s topping the table at US$42.9bn long term investment and determination Awas the acquisition of Covidien in this fi eld. Table 1 shows the rather (based in Dublin) by Medtronic. Already a expensive range of deals closed in this major contender in medical devices, this intensely competitive fi eld over the last deal – the largest in the medical device few years. The acquisitions are not without fi eld – means the combined company risk as BMS found when, seven months is a serious competitor to the market after paying $2.5bn, it had to discontinue leader, J&J. An interesting aspect of the development of Inhibitex product INX-189 deal is the base of the company being in in phase 2 because of safety issues. Ireland, a clear tax benefi t which was a Key to any deal price tag of course is key feature in the previous month’s bid by the product valuation. Idenix’s negotiation Pfi zer to acquire AstraZeneca (AZ) to take position will have been helped no end by the advantage of the lower tax rate in the UK price and recent US sales of Gilead’s Sovaldi compared with that in the US. (sofosbuvir); the US price is $84,000 (for a It was a busy month for Medtronic 12-week course) with sales of $2.27bn in the as it also announced the signature of a fi rst quarter of this year. It was inevitable that memorandum of understanding with Sanofi such a high price would attract attention to enter into a global strategic alliance in from the regulators, although the UK price diabetes. It is intended to base the alliance is lower than that in the US (the UK list price on an open innovation model with Sanofi is £35,983 for a 12-week course), NICE is bringing its extensive insulin portfolio and now questioning Gilead’s data, stating that Medtronic contributing its insulin pumps evidence is lacking in some subgroups and and glucose monitoring expertise. No indicating that there are uncertainties in fi nancial terms have been disclosed. the evidence base. So the jury is out until Next in the top headlines was the October when a decision is expected. $3.9bn acquisition of Idenix by Merck & Although not commanding quite such a Co, representing $24.50 per share in cash high headline, this month OraSure granted About the Author and a 239% premium over the share price AbbVie exclusive promotion rights to its Sharon Finch is one of the regular on the Friday before the announcement. OraQuick HCV test in the US for $75m. contributors to the monthly Deal Watch from The juggernaut which is the hepatitis This deal shows Sanofi is clearly not alone the Medius team providing analysis and C deal machine rolls on with this deal in taking a broad approach to franchise insight into the industry’s deals. keeping the cost-of-entry price tag up. The management! Merck & Co acquisition brings three oral T: +44 (0) 20 8654 6040 hepatitis C compounds which are in clinical A Midsummer Night’s Dream E: [email protected] development and offers the promise of a Now formally off the table and staying triple therapy which could prove effective unrequited was the acquisition bid made

32 Business Development & Licensing Journal www.plg-uk.com Table 1: Major hepatitis C deals Licensor Acquired / Product Status at Deal Type/Share Headline Licensee Acquirer Deal/ Date Price Premium Value US$m Samtasvir (NS5A inhibitor) + Phase 2 Acquisition (announced), Idenix/ Merck & Co 3,900 other HCV therapies June 2014 239% premium Phase 3 Pharmasset/ Gilead Solvadi / PSI-7977 Acquisition, 89% premium 10,800 Nov 2011 Phase 2 Acquisition, 163% Inhibitex/ BMS INX-189 / BMS-986094 2,500 Jan 2012 premium ALS-2200/ALS-2158 (HCV 1,525 Alios BioPharma/ Vertex Preclinical June 2012 Global licence polymerase inhibitors) (60 upfront) Exclusive global licence, US Enanta/ Novartis EDP-239 (NS5A inhibitor) Preclinical Feb 2012 440 co-promotion

by Pfi zer for AZ, the failure of which was During June, Shire remained busy and option deal with Adaptimmune. attributed by Pfi zer’s CFO to the sole issue focusing on the day-to-day business with a Adaptimmune develops TCR engineered of price. move into specialised patient populations T-cells and the agreement focuses on Clearly not deterred by this, AZ has targeting the pre-school market via a new co-development around the cancer testis moved on to build on its respiratory clinical study with Vyvanse. Success in antigen NY-ESO-1, to which GSK has franchise by in-licensing Synairgen’s this endeavour could secure a six-month an option on the programme though to inhaled beta interferon, SNG001. This data exclusivity. Also building on its R&D clinical proof-of-concept. product is in development as an immuno- collaboration with arGEN-X, Shire entered Similarly, Pfi zer signed up with the modulatory therapy for viral respiratory into a long-term alliance paying an upfront French company Cellectis for its CAR-T tract infections in patients with severe of $20.4m (cash and equity) for access platform which uses chimeric antigen asthma. The deal carries a headline value to therapeutic antibodies in cancer and receptors to re-programme T-cells to of $232.25m which includes a $7.25m autoimmune diseases. target cancers. Under the terms of the upfront fee. Seeing some success from its Streamlining is evident at Teva with agreement, Pfi zer secured exclusive partnering, AZ also marked the start of a the company undertaking a major cost- development and marketing rights for clinical trial with the antisense drug ISIS- cutting exercise. But it is also looking to 15 targets selected by Pfi zer. Cellectis ARRx, in patients with metastatic castrate- build on its pain franchise as noted with has reserved 12 other targets and Pfi zer resistant prostate cancer, by paying partner its purchase of Labrys Biologics for up will provide preclinical development Isis Pharmaceuticals a $15m milestone. to $825m. This brings access to Labrys’ assistance for four of these. Deal terms Staying in the hostile M&A arena, monoclonal antibody drug LBR-101, which include an $80m upfront payment, R&D Allergan declined Valeant’s second takeover is under development for the prevention funding and up to $185m in milestones bid, so this story still rumbles on but of chronic and episodic migraine and will for each candidate, giving an estimated Valeant is not yet giving up. The company clearly complement Copaxone. headline value of $2.8bn. In addition, announced that an exchange offer for Pfi zer has agreed to make a 10% equity Allergan’s common stock would go ahead Oncology Focus & Immuno- investment stake purchasing new shares taking its May 30 proposal directly to the Oncology is Still Growing! at €9.25 ($12.63) each, representing shareholders; so watch this space! Still keeping its place in the headlines an estimated $28m. Instead of arriving and following its recent licence with at a personalised solution by harvesting Hot Gossip Nogra Pharma with the notable $710m individual patient’s T-cells, Cellectis is Rumours were abroad from no less a source upfront payment, Celgene closed a deal using allogenic CAR-Ts to provide a than the UK Financial Times that Shire with NanoString Technologies for the treatment which should be manufactured was about to make a $5bn bid for NPS development of a companion diagnostic and standardised more easily. Cellectis Pharmaceuticals. So strong were the rumours assay to support the development of plans to open a research site in the US to that this led to NPS issuing an offi cial denial. Revlimid for treatment of Diffuse Large work more closely with Pfi zer. Next up was the comment that Allergan was B-Cell Lymphoma at a more modest Joining the checkpoint modulator on the cusp of making a bid for Shire, but of headline of $45m. fray, Merck Serono formed a partnership course it was pipped at the post by AbbVie, Of course the growth area within with Morphosys to discover and develop which eventually clinched the deal in mid- oncology is the immunological approach, antibodies against certain immune July for $54bn in cash and shares. and GSK closed a $350m co-development checkpoints using the Morphosys >>

www.plg-uk.com Issue 21 | August 2014 33 Deal Watch – June 2014

Licensor Acquired / Product / Technology Deal Type Headline Licensee Acquirer ($m)

Covidien/ Medtronic Medical device company adding US critical mass Company acquisition 42,900 Hepatitis C assets include IDX21437 (p1/2 nucleotide inhibitor) to Idenix Pharmaceuticals/ Merck & Co Company acquisition 3,850 combine with Merck HCV drugs Labrys Biologics/ Teva Includes Labrys’ p2b anti-CGRP mAb for treatment of episodic migraine Company acquisition 825 Includes Northera (droxidopa) for neurogenic orthostatic hypotension Chelsea Therapeutics/ Lundbeck Company acquisition 658 (approved) OAO Veropharm/ Abbott Laboratories Russian based manufacturing company Company acquisition 630 DAVA Pharmaceuticals/ Endo Generics business including generic doxycycline and cefdinir Company acquisition 575 International Exclusive research and Bionomics/ Merck & Co BNC 375 in Alzheimer’s disease (preclinical) 526 licence agreement TCR engineered T-cells which target NY-ESO-1 and other targets in Co-development and Adaptimmune/ GSK 350 oncology (p1/2) option Single molecule, semiconductor, DNA sequencing using nanopore Genia Technologies/ Roche Company acquisition 350 technology Medreich/ Meiji Seika Indian based manufacturing company Company acquisition 290 Chimeric Antigen Receptor T-cell (CAR-T) immunotherapies directed at 265* Cellectis/ Pfi zer Collaboration multiple selected oncology targets (platform) + $28m equity Dimension Therapeutics/ Bayer Gene therapy for the treatment of haemophilia A (preclinical) Licence 252 Synairgen/ AstraZeneca SNG001 inhaled beta interferon (p2) Exclusive licence 232 Ligand Pharmaceuticals/ TG Development, commercialisation of Interleukin-1 Receptor Associated Exclusive licence 208 Therapeutics Kinase-4 (IRAK-4) inhibitors (preclinical) Pregenen/ bluebird bio Gene editing technology platform Company acquisition 156 OraSure Technologies/ AbbVie OraQuick HCV rapid test in US Co-promotion** 75 Co-development, option to Orion/ Bayer ODM-201, an investigational novel oral androgen receptor inhibitor (p2) 68 co-promote in Europe To generate chemotherapeutic antibody drug conjugates (ADCs) Research and option Sorrento Therapeutics / Morphotek 50 (platform) agreement NanoString Technologies/ Celgene Development of a companion diagnostic assay Development 45 ECR Pharmaceuticals / Valeant Akorn subsidiary with branded generics business Company acquisition 41

All deals are worldwide unless otherwise noted. * Deal terms included up to $185m milestones per product; estimated headline could be approximately $2.8bn if all products are successful. **US only

>> Ylanthia platform. Financial terms were Facing the Music not disclosed but include milestone and Not all of the deals announced this royalties. month are related to innovations and Staying with the mid-caps and turning acquisitions. Refl ecting some of the to prostate cancer, Bayer and Orion news fl ow, we saw Pfi zer make a entered into a joint development deal for settlement of $325m for the alleged ODM-201. This phase 3-ready, androgen improper marketing of Neurontin. receptor inhibitor therapy will supplement Pfi zer is not the only major pharma in Bayer’s oncology pipeline. The phase 2 this position; also this month GSK settled results showed a decline in PSA levels US claims of irregular marketing activities of more than 50% in the study of 124 in asthma and antidepressants at a patients. Bayer paid €50m ($68m) upfront reported $105m. with further milestones in return for global So the deals keep fl owing as we move rights which should complement Xofi go into the summertime. It will be interesting (from the acquisition of Algeta). The to see how the major acquisitions play out, companies will jointly fund the phase 3 following the closure of the Pfi zer-AZ trials. Orion will retain co-promotion rights saga. Could this be the summer of in Europe. unrequited proposals?

34 Business Development & Licensing Journal www.plg-uk.com www.mediusͲassociates.com

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