2020 UNITED STATES BIOPHARMACEUTICALS Research and Development - Contract Services Discovery - Drug - Contract Development and Research Academic Research Regulations and Compliance - East Coast Hubs - Logistics and Distribution Hubs - Logistics and Coast - East Compliance and Regulations Research Academic

UNITED STATES BIOPHARMACEUTICALS 2020 Amos

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i m 0 0 4 The East Coast Corridor: MAINE i m Bangor The Heart of 0 0 American Biopharma 3 Montreal Augusta Dear Reader, i Ottawa m 0 VERMONT CANADA 0 2 Montpelier NEW HAMPSHIRE Portland Kingston i The United States Biopharmaceutical industry is widely envied m 0 0 Concord around the world, and for good reason. From gene editing, to cell- 1 Welcomebased to therapies, the 2020 toedition profoundly of the new US Biopharmaceuticalways of manipulating Industry immune Report, a jointcells GBR-CPhI to target analysis. cancers, Thetoday’s United science States is being Biopharmaceutical translated into industryprac- is Toronto widelytical envied treatments around forthe patients world, and at breakneck for good reason.speed. FromBiopharma gene editing,com- to MICHIGAN Albany BOSTON cell-basedpanies therapies, have achieved to profoundly remarkable new progressways of manipulating in advancing immune early dis cells- to Rochester MASSACHUSETTS targetease cancers, detection today’s and science enabling is being targeted translated treatments into practical with limited treatments side for NEW YORK patientseffects. at breakneck These innovations speed. Biopharma have catalyzed companies significant have reductionsachieved remark in - Buffalo Providence able theprogress number in advancingof deaths dueearly to disease cancer, detectionHIV/AIDS, andand enablingautoimmune targeted Hartford RHODE ISLAND treatmentsdiseases with across limited the side world. effects. This Theseprovides innovations reasons forhave optimism catalyzed that signifi - Lansing i 0m cant reductions in the number of deaths due to cancer, HIV/AIDS, and auto- Detroit 10 CONNECTICUT America’s dynamic life sciences industry will be able to collectively i immunerise diseasesto the occasion across the and world. defeat This the provides novel COVID-19 reasons forvirus optimism that is that m 0 America’s dynamic life sciences industry will be able to collectively rise to the Erie 0 2 bedeviling society today. NEW YORK occasion and defeat the novel COVID-19 virus that is bedeviling society today. Jersey City As we move through these uncertain times, it is crucial for inves- Cleveland PENNSYLVANIA As wetors, move pharmaceutical through these executives, uncertain times,and scientific it is crucial researchers for investors, involved pharma - TRENTON ceutical executives, and scientific researchers involved in the US biopharma- GREATER in the US biopharmaceutical industry to remain together and in- ceutical industry to remain together and informed. The way in which groups Pittsburgh Harrisburg PHILADELPHIA formed. The way in which groups across industry, academia, gov- across industry, academia, government, and the broader health-care system OHIO NEW JERSEY ernment, and the broader health-care system have come together Wilmington have tocome fight together this pandemic to fight thishave pandemicbeen inspiring. have beenIndeed, inspiring. continuing Indeed, to con-

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0 Dover 3 MARYLAND Northlike America CPhI Northexist. America exist. Annapolis Dayton Washington D.C. DELAWARE The followingThe following pages pages offer widespreadoffer widespread coverage coverage of the stateof the of state the USof thebiophar - maceuticalUS biopharmaceutical industry, including industry, big pharma including and its big blockbuster pharma and drugs, its block emerging- Cincinnati WEST biotech and their innovative drug pipelines, and the different service providers VIRGINIA buster drugs, emerging biotech and their innovative drug pipelines, acrossand the the value different chain, service from CDMO’s providers and across CRO’s the to value AI and chain, big fromdata CDplatform- companies. Charleston MO’s and CRO’s to AI and big data platform companies. VIRGINIA We sincerely hope that you have a great conference, full of business and net- Frankfort We sincerely hope that you have a great conference, full of business

i Richmond workingand opportunities. networking opportunities. Thank you for Thank your participationyou for your inparticipation CPhI North in Amer - m

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0 ica, and we hope you enjoy reading our 2020 edition of the United States Lexington 4 Norfolk CPhI North America, and we hope you enjoy reading our 2020 edi- Roanoke Biopharmaceuticaltion of the United Industry States Report. Biopharmaceutical Industry Report.

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Montgomery Editorial Introducing the US 35. Interview with Ernst & Young 57. Interview with Eloxx Pharmaceuticals 75. Interview with Alira Health Industry Outlook Biopharmaceutical Industry 36. Interview with Signet Healthcare Partners 58. Responding to COVID-19 76. Interviews with CordenPharma Group Analysis 37. To List or not to List 59. Interview with Aphios and with Visikol 98. Conclusion 8. The Moral Imperative to Innovate 39. Interview with Burrage Capital 60. Commercializing Neuroscience 77. Interviews with Avēma Pharma Solutions 99. Comments from Nicos Group, 11. Interview with Porzio Life Sciences 61. Interview with Terran Biosciences and with ACG Capsules Pharmalex and Hart & Reed-Lane GBR provides unique 14. Interview with Nivagen Pharmaceuticals 62. Originating Discovery 78. Generics 100. Concluding Thoughts and first-hand analysis 15. Interview with Pfizer 63. Interview with Princeton 81. Interview with Advantice Health 102. Company Directory into all aspects of the US 16. Introducing the hubs Accelerating Pipelines: Entrepreneurship Council 82. Interview with Dr. Reddy’s Laboratories 104. Credits biopharmaceutical industry 20. Interview with BIONJ Drug Discovery and Development 64. Interview with Rutgers 83. Interview with Servier Group after months on the ground 22. Interview with MassBio 65. Interview with Roux Institute of 42. Top 10 U.S. Biopharmaceutical Northeastern University Companies Based on Revenue 8, 26, 43, 68, 43. Drug Development and Discovery Technology and USA BIOPHARMACEUTICALS 2020 44. Interview with Onosec Medical Industry Explorations The Biopharma Investment Climate Regulatory Services Global Business Reports 86, 98.... 47. Interview with Goldfinch Bio Contract Manufacturing 26. From Bull Market to Uncertainty This research has been conducted by 48. Advancing Oncology and Generics 86. Disruptive Technology Lucrezia Falcidia, Jason Spizer and 28. Interview with Third Rock Ventures 49. Interview with Stemsynergy Therapeutics 87. Interview with AiCure Maria Filippova Barnachisnkaya 29. Interview with XOMA 51. Interview with Cyclacel Pharmaceuticals 68. Contract Development and Manufacturing 89. Interview with Decision Resources Group Edited by Mungo Smith 30. Interview with Atlas Venture 52. Interview with Hillstream Biopharma 70. Interview with Cambrex 90. Interview with Pharmafusion Graphic design by Gonzalo Da Cunha 31. Interview with J.W. Childs Associates 53. Interview with InteRNA Technologies 71. Interview with GVK BIO 91. Interview with Cardinal Health A Global Business Reports Publication 32. Merger Spree 54. Expanding Therapeutic Focus 72. Interview with Piramal Global Pharma 92. Regulatory Services For updated industry news from our 34. Interview with J.P. Morgan on-the-ground teams around the world, 55. Interview with AzurRX Biopharma 73. Interview with Sunrise Pharmaceuticals 93. Interview with Systech International please visit our website at gbreports.com, subscribe to our Commercial Banking 56. Interview with Hepion Pharmaceuticals 74. Interview with Contract Pharmacal Corp 94. Interviews with Adents and with Tracelink newsletter by signing up to our VIP list through our website, or follow us on Twitter: @GBReports

CONTENTS / USA Biopharmaceuticals 2020

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Interviews Olympia Washington CANADA Leading industry figures North Maine Salem Dakota Minnesota share their insights and Helena Montana Bismarck exciting new developments Augusta Idaho Montpelier with GBR Oregon New Vermont United States Boise Hampshire St. Paul New York Concord of America South Pierre Albany Boston 11, 15, 55, 56, Dakota Wisconsin Michigan International Boundary State Boundary Wyoming Providence Lansing Hartford Rhode Island 81, 87... State Capital Madison Connecticut Pennsylvania Iowa Carson City Cheyenne Harrisburg Trenton N Nebraska Salt Lake City Des Moines Sacramento Illinois Columbus Ohio Dover Nevada Lincoln Indianapolis Delaware Denver Springfield Annapolis Maryland Utah Topeka Indiana Washington D.C. Virginia Colorado Charleston West Richmond Kansas Virginia Atlantic Ocean California Jefferson Frankfort City Missouri Kentucky Raleigh Industry Arizona Santa Fe North Carolina Oklahoma Nashville Tennessee Little Thoughts Oklahoma Phoenix Rock Columbia City New Mexico Atlanta Excerpts of ideas shared South Arkansas Carolina with GBR during interviews with over 60 of the Mississippi Georgia leading players in the US Paci c Ocean Montgomery biopharmaceutical industry Louisiana Jackson Alabama Texas Tallahassee Baton Rouge 48, 60, 62, Austin 88, 100... Florida

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INTRODUCING THE U.S. BIOPHARMACEUTICAL INDUSTRY

» As far as innovation is concerned, prices for cancer medications and some of the products for unmet medical needs are high... There is significant risk of failure so there needs to be an adequate return on investment for innovation to continue. The public forgets that the alternative to these drugs could be lengthy hospital stays, that cost the system far more money than the drugs themselves. Gene therapies, which can cost between US$1-2 million per course of treatment, can potentially cure diseases, or at least keep them at bay for 10-15 years. We need to consider how much we save as a society when hospital resources are not utilized to treat these patients. «

- James Gale, Founding Partner and Managing Director, Signet Healthcare Partners EDITORIAL Global Business Reports Industry Explorations

cause of the turbulence in markets can NASDAQ BIOTECH INDEX 10 YEAR CHART Introducing be attributed to the actual and feared Source: NASDAQ impact of the coronavirus in destroy- Points the U.S. ing supply and demand simultaneously. 4,000 This has undermined the momentum Biopharmaceutical of global economic growth to such an extent that, five weeks after reaching Industry new all time highs in the S&P 500, the US government committed to spending 3,000 trillions to keep individuals and corpo- rations solvent. Now, as much as ever, the world is in desperate need of a so- lution. First to deprive the disease of its THE MORAL IMPERATIVE ability to spread, second to develop a 2,000 therapeutic that can cure those who are TO INNOVATE infected, and finally to invent a vaccine so this disaster does not reoccur. The latter two are exactly the type of chal-

lenges upon which the American bio- 1,000 Analogous to the beginning of the pre- indiscriminately across borders, aided pharmaceutical industry thrives. vious decade, when the US faced fears by the interconnectedness of the mod- The US undoubtedly is the world leader over the spread of H1N1 swine flu, and ern world. Daily life has been upended in bringing innovative therapeutics to was tenuously pulling itself out of a across the globe and the spread has market, and novel technologies current- perilous financial meltdown, 2020 has deeply shaken financial markets and, ly being developed and commercial- brought with it a similarly calamitous most importantly, many lives have been ized are at record levels. An effective 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 series of events. This time triggered lost. response to the coronavirus pandemic by the novel respiratory virus labeled As extreme measures are taken to lock requires unprecedented collabora- COVID-19. The disease invaded the hu- down populations to a degree that was tion across academia, the private sec- try excels. America, and in particular day and HIV is essentially a chronic con- man population at the dawn of the new previously unimaginable, commerce tor, and the philanthropic community. its leading clusters on the east coast, dition. Prior to the COVID-19 pandemic, decade, and has spread rapidly and has ground to a halt. The immediate These are all areas in which the coun- has a university system that is the envy the Nasdaq Biotech index had expand- of the world, as well as tech transfer, ed roughly 400% decade on decade. large pharma, fast growing biotech, im- Driven by enthusiasm over the prom- NUMBER OF NEW THERAPEUTIC DRUGS APPROVED portant corporate partnerships, a well ise of cures for all sorts of diseases, Source: BCG, FDA functioning incubator system, and an investment flowed into the sector. As abundance of talent, skills and know- evidence of this ebullient era, venture how regarding discovery, clinical trials capital funding into US-based biotech 70 and commercialization. These qualities, firms has been above a record-setting along with access to liquid and efficient US$3.5 billion for each of the last eight capital markets, power the engine of quarters leading into 2020, according 60 the US biopharma industry. Christiana to Pitchbook data. It wasn’t that long Goh Bardon, portfolio manager at Bur- ago that an entire year’s worth of ven- rage Capital, commented: "We are re- ture funding was in the US$4 billion to 50 minded amidst this COVID19 crisis of US$5 billion range. the tremendous importance of scien- The US biopharmaceutical industry pro-

40 tific innovation. The world is looking to duces 57% of all the trigger new drugs our biotechnology industry to develop in the world and, in 2019, the U.S. FDA and provide the drugs, vaccines and di- approved 48 novel drugs, several of

30 agnostics to counter this epidemic. It is which represent advanced, first-in-class only because of the years of investment therapies with billion-dollar blockbust- and research that there is any hope to er potential. This built off of a strong

20 find these solutions in the short term." 2018, that saw a record 59 novel treat- For biopharma, the past decade was a ments. A big spike compared to 2010, transformational one, wherein immense when just 21 novel drugs were ap- 10 progress and exceptional growth were proved. achieved. We now live in a world where These novel drugs seek to treat and a heart attack is something that you can cure conditions ranging from cancers 0 bounce back from, where diabetes is to muscular dystrophy to schizophre- 1990 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 2019 something that patients live with every nia. One example is Vertex Pharma-

USA BIOPHARMACEUTICALS 2020 8 Industry Explorations Global Business Reports 9 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

ceuticals’ FDA approval for Trikafta, a ing discovered by smaller firms than » cystic fibrosis (CF) treatment with the ever before. This is evidenced by the in- potential to help 90% of patients with creasing proportion of active INDs and John the deadly genetic disorder. According new drug approvals (NDAs) attributed We are reminded amidst this to Robert Coughlin, president of Mass- to smaller firms. This allows CROs and Patrick COVID19 crisis of the tremendous Bio and father to a CF patient: “This is CDMOs to play an increasingly impor- importance of scientific innovation. another reminder of just how difficult it tant role in expediting the process of The world is looking to our is to bring a drug to market, as it took bringing molecules to commercializa- Oroho 18 years and billions of dollars to finally tion. Unlike big pharma, these smaller biotechnology industry to develop develop a drug that worked for my son players rely heavily on collaboration and provide the drugs, vaccines Executive Vice President and and thousands like him. It takes count- and outsourcing. However, the explo- Chief Strategy Officer and diagnostics to counter this less failures and major investment to sion of emerging biotech companies PORZIO LIFE SCIENCES, LLC epidemic. It is only because of the bring any life-transforming drug to mar- happened largely as a result of big years of investment and research ket, but there is another ingredient that pharma outsourcing its early stage dis- that there is any hope to find these is essential: a supportive government.” covery and development to effectively In the case of coronavirus, the US gov- de-risk, albeit at the expense of acquir- solutions in the short term. ernment has shown a deep commitment ing companies at a much later stage What kind of progress has Porzio European companies never having done As a result of this regulatory pressure to incentivize and expedite the clinical, and richer valuation. “Many, if not all, made over the last year and what business in the US and now looking to in the US, some companies have de- approval and manufacturing process of of big biotech and big pharma compa- were some company initiatives? create US commercial operations. A termined parallel approvals are safest, - Christiana Goh Bardon, any therapeutic with potential to atten- nies realized there is an opportunity to Porzio Life Sciences, LLC (PorzioLS) is significant area of business growth has looking for approval in Europe as well as Portfolio Manager, uate the impact of the disease. shrink their internal R&D footprint and the industry's leading provider of com- been from mergers, spin-offs, and pri- in the US. Organizations are becoming Burrage Capital Another factor that makes the Ameri- many of those companies still develop pliance operations, products and ser- vate equity and venture capital invest- global earlier and a big reason for that is can life sciences ecosystem robust is and discover drugs, but they do so in vices, and a wholly-owned subsidiary of ments in life sciences. We also repre- the price pressure in US. Lower prescrip- the steady rise of emerging biotech confined areas where they work broadly the Porzio, Bromberg & Newman, P.C. sent R&D companies that have decided tion prices are also becoming a strong over the past few decades as a power- in an external world where they can law firm. 2019 was our best year to date to commercialize themselves and are campaign message for politicians. ful force for innovation. As a result of build best in class partners to build in and exceeded the prior year by 15%. We seeking FDA approval of their products, this phenomenon, more drugs are be- 12>> provided global transparency reporting hiring contract manufacturers and con- What would you like to achieve for « services and systems in 46 countries tract distributors, as well as field-based Porzio? around the world. personnel. We provide invaluable assis- Porzio wants to continue to build on our Even large organizations are looking to tance in licensing, assessing and creat- services. As an organization, we began us for reporting and to access to our sys- ing compliance programs, and compli- providing services by supporting com- tems so they can see the data for audit- ance services and systems for these panies in their state compliance needs ing, monitoring, analytics and business companies. and today, we have evolved to handling intelligence. Porzio has become an out- state, federal, and global compliance. sourced transparency and aggregate What is your assessment of how the We will continue to be a global compli- spend office for many companies. regulatory landscape has evolved ance leader for the life sciences indus- Our biggest initiative for 2020 is the over the last few years? try. We want to continue to be recog- launch of Porzio TPE (Third Party En- One of the legal areas strongly impact- nized as a unique organization able to gagement) software, a cradle-to-grave ing companies and how they market provide systems, services, and regulato- system, where we provide a robust their products is the push for price ry and legal guidance under the Porzio workflow system to handle global HCP transparency. There are currently 14 family of companies. Porzio is a one- engagements, as well as other types of US states with cost disclosure laws. In stop-shop where governance, process third party engagements. TPE can also four of them, companies have to justify and systems come together to satisfy provide a solution to handle a com- the price of their new products. For ex- compliance obligations and provide a pany’s upstream data and workflow ample, they are required to share what sound foundation for a biopharmaceuti- requirements. We have integrated our percent of the price is attributable to cal company's operations. daily-updated Porzio Compliance Di- research and development, licensing gest (PCD) containing global laws, regu- fees, sales forces, and marketing. In How does the prevalence of biophar- lations, and pending legislation into this some states, you have to declare and ra- maceutical companies in New Jersey system. Thus, our customers are aware tionalize price increases. Companies are compare to Boston? of legal and compliance requirements considering how price increases might There has been a bit of a renaissance when entering into global HCP and third trigger reporting demands. Some here in the state of New Jersey and there party relationships. companies have pledged to limit their is so much talent. As a result we are not price increases. More and more states seeing an out migration of companies. Geographically, where is the majority are asking for the disclosure of typically We are actually seeing more companies of Porzio’s growth coming from? confidential information. These laws coming in than are leaving. Boston has Most of our growth has been within the most notably were put in force after the also had strong growth and our office United States. We also have work from Martin Shkreli ("Pharma Bro") scandal. there is growing exponentially. ■

USA BIOPHARMACEUTICALS 2020 10 Industry Explorations Global Business Reports 11 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations FACTSHEET

HISTORY OF PANDEMICS EXPLOSION OF MODALITIES Source: Forbes Here are some of history’s Source: Evercore most deadly pandemics, from Zinc Micro- Digital Antonine Plague to Novel Pills Injectibles AntibodiesViruses Oligos mRNA CRISPR Exosomes TPD Fingers biome Therapies Antonine Plague 165-180 Coronavirus (COVID-19) DEATH TOLL > 5M TODAY Plague of Justinian 514-542 30-50M

2010s Japanese Smallpox Epidemic 735-737 1M

Black Death (Bubonic Plague) 1347-1351 2000s 200M

Small Pox 1520 1990s 56M

17th Century Great Plagues 1600 Throughout the 17th and 18th 3M centuries, a series of “Great 1980s Plagues” routinely ravaged cities across Europe 18th Centyury Great Plagues 1700 <<10 600K areas where they otherwise have a hard radation, microbiome and digital thera- Mammoth Biosciences claims it has de- time building themselves,” said Michael pies are all tools that are now becoming veloped a test for Covid-19 that cuts the Cholera 6 outbreak 1817-1923 Gladstone, a principal at Atlas Venture. more widely used. result time from several hours to less 1M There are also numerous different mo- An example is that the gene-editing than 30 minutes. Sherlock Biosciences dalities offered today that provide the power of CRISPR technology is now be- has produced a protocol that could The Third Plague 1855 R&D community and clinicians with a ing increasingly directed at fighting dis- work like a pregnancy test, giving a pos- 12M differentiated toolkit for being able to eases, originally genetic ones, but more itive signal on a test strip. Although the address different conditions. This gives recently, it has been harnessed to fight engineering of cells once seemed to companies the tools to tailor and refine infectious diseases, including the novel be science fiction, the most important Yellow Fever Late 1800s how they think about making new med- coronavirus. Multiple teams inside and measure of success is how these new 100-150K icines for specific conditions. CRISPR, outside of academia are working on modalities improve the lives of patients messenger RNA, targeted protein deg- using CRISPR for more effective tests. and, in 2020, the life sciences industry is Russian Flu 1889-1890 better equipped than ever. 1M 1918-1919 Spanish Flu Covid-19 has thus far proven to be an VACCINE DEVELOPMENT: 40-50M unparalleled black swan event. How- Asian Flu 1957-1958 MONTHS FROM VIRAL GENETIC-SEQUENCE SELECTION TO FIRST HUMAN STUDY ever, no era passes without its share Source: FDA, clinicaltrials.gov, CMR 1.1M of defining moments. During this gen- erationally challenging time, companies 0510 15 20 Hong Kong Flu 1968-1970 and entire industries have shown they SARS are up to the task of tackling the pub- 1M (2003) lic health crisis. By harnessing all the 1981-Present HIV/AIDS American energy, ingenuity and exper- SARS 2002-2003 25-35M Influenza A/Indonesia tise in the life sciences and leaning on 770 (2006) the country’s innate capacity to come together and solve big problems, the Swine Flu 2009-2010 Influenza odds are good that a scientific break- A/California 200K (2009) through will occur that will resolve this crisis. This pandemic is a painful re- MERS 2012-Present Zika Virus minder that much of the work done in 850 (2016) the life sciences industry has life and death consequences. It is critical that COVID-19 Ebola 2014-2016 Coronavirus the industry continues on its growth 2019-Present Novel Coronavirus (COVID-19) 11.3K (2019) path; lives will be saved as a result. ■ +300K As of May 2020

USA BIOPHARMACEUTICALS 2020 12 Industry Explorations Global Business Reports 13 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports Industry Explorations INTERVIEW

What value does Nivagen bring to buy- run is difficult. We are not going after the ers? big molecules unless there is an additional The buyers in the market are consolidating, challenge we can address – something Doug especially in the generics area. For exam- to do with formulation or manufacturing. ple, Walgreens and AmerisourceBergen Niches are our expertise, and we work Giordano are buying as one group; Rite Aid, Walmart closely with the buyers to understand how and McKesson also buy as one group, and we can tailor to their needs. There is a lot so do CVS and Cardinal Health. This puts of opportunity in the field of unapproved pressures on suppliers and lowers prices. drugs. We do safety and clinical studies to It decreases the market size for suppliers make these drugs effective. Senior VP of Business Development to sell to. It also exposes business to risks PFIZER when issues arise in areas such as regula- How important are partnerships to tion, patenting and logistics. In the phar- Nivagen’s business? maceuticals space this is a particularly deli- The cornerstone of Nivagen’s success is cate scenario because when production our partnerships. We co-develop products halts, it is time and resource consuming to with FDA qualified manufacturing facilities. Jay restart it. We bring value through our market intel- Pfizer’s CEO has outlined a plan for We recognize that each partnership is and immunology, internal medicine, on- Nivagen stresses the value of our supply ligence capabilities, and insuring the right the company that is more nimble and unique, and over the years our teams cology, rare disease, and vaccines. track record and our role in helping buy- product selection. We also bring regula- poised for growth. Can you explain have become more and more creative We look to business development to en- Shukla ers diversify risk. Most of our products are tory and product management support. how business development activities and resourceful in creating deal struc- hance our expertise in certain aspects of vertically integrated and this represents Finally, and of key importance, we provide can help achieve this plan? tures that share in the risks and op- the core therapeutic areas; for example, robust supply. Buyers have the following a distribution platform. There is an abun- We have a very strong pipeline right portunities so that each party and its breast cancer and prostate cancer. We considerations: product, price, supply and dance of cost advantages and benefits now with the potential to bring multiple respective stakeholders – including look to augment our existing pipeline quality. Price used to be the main deter- from a shared construction of infrastruc- breakthrough therapies to patients in patients, innovators and investors – are through partnerships that add programs minant of business, but supply has super- ture. Partnerships also help in diversifying the next five years, and our near- to mid- positioned for success. that are approaching or already in the seded it, as companies have become con- risks. term focus for business development is clinic. We also seek partnering oppor- scious of the importance of consistency. to advance the pipeline to help deliver How do the joint ventures in con- tunities to gain access to specific tech- President and CEO We have an excellent track record with How does Nivagen’s commercialization on the opportunities ahead of us. sumer health and off-patent drugs nologies within Pfizer’s core therapeutic NIVAGEN PHARMACEUTICALS, almost zero supply issues and an attractive platform help foreign companies access The way we plan to deliver on those announced last year fit into Pfizer’s areas, and platforms to enable drug INC. portfolio of services. the US market? opportunities is largely the same as it’s structure and priorities? discovery and development. While not Nivagen helps foreign companies avoid been in recent years – which is by evalu- Pfizer had three unique businesses: as large as our Array transaction, Kineta What types of drugs do you provide to costs associated with manpower, ware- ating the capabilities of our internal sci- an innovative business, an off-patent and eFFECTOR are recent examples. buyers? housing, distribution, customs clearance, ence and deciding whether we are able drugs business, and a consumer health- The acquisition of Array in July 2019 We do not have a specific therapeutic vendor agreements and government con- to achieve our goals with the resources care business. Each of those are now gave us commercial products, as well area. Instead, we go after the generics tracts. In their route to the US market, we we have. If not, we seek to fill the gaps in a place where they can create the as late-stage pipeline assets that we with the least competition. Our strength is take care of everything. They get paid for through external collaborations. most value – Upjohn is expected to expect to reach patients within a few to identify the niche generic, execute fast the inventory and for royalties. To date, Pfizer has evolved as a partner in recent combine with Mylan to become a new years. In addition, the expertise found and reach the market. We focus on what business has come mostly from India and years, and we recognize that break- pharmaceutical company, Viatris, later within Array complements the exper- is less crowded and provides good return Europe, but we are seeing growing interest throughs can come from many different this year, and Pfizer Consumer Health- tise within Pfizer, and we believe that by margins. from Chinese and Taiwanese companies. places. We also recognize that break- care has combined with GSK’s con- combining our efforts in this space we Two years ago, we changed our focus from Smaller companies value partnering with throughs are built by pairing capabilities sumer healthcare business to form a will be well-positioned for future growth B2 generics to developing generic inject- us because our size allows for preferential from different partnerships and working new consumer healthcare joint venture in oncology. Nivagen is engaged in the ables and ready-to-use premixes. They are monitoring and attention. together toward a shared overarching and could eventually be spun off into a not yet on the market as we are in the pro- vision, such as what we’ve done in gene new company. Pfizer will become a more What can we expect from Pfizer in development, acquisition and cess of review and approval. We look at our Over the next two to three years, what therapy. science-focused, high-growth company terms of business development over sales of generic prescription buyers’ needs. For example, being innova- goals do you wish to achieve at Niva- that is well-positioned to deliver break- the next 2-3 years? drugs and OTC products for the tive in the dose form: if a pain patch is more gen? How does Pfizer’s approach to busi- throughs that change people’s lives. In the near-term, our focus is on partner- North American market convenient for the buyer than a gel, then We want to expand and are looking to raise ness development differ from your ships that will allow us to bring poten- we work to make that convenience a reality. money through a funding round, which will peers? Oncology continues to be an impor- tial breakthroughs to fruition in the next allow us to scale up our team and platform, We believe that our differentiation tant area for investment and R&D. few years. We will continue to invest in Pending patent cliffs are a big news and set up a small sterile unit. comes from our capabilities, such as Can you shed light on Pfizer’s oncol- science through bolt-on acquisitions item today. To what extent is this an op- We are looking for a partner with manufac- medicinal chemistry, product develop- ogy strategy, particularly in light of like Array and Therachon, and through portunity for Nivagen? turing capabilities in the injectable space. ment and manufacturing, to name a the recent acquisition of Array Bio- research and development agreements In the big billion dollar plus molecule They must be interested in a profit split. few. It’s important for us to ensure that pharma? like our recent deals with Vivet Thera- space, there are multiple filers. Most of We bring them a ready-to-go product and, partners understand the true depth and Pfizer invests in areas where we see the peutics and Akcea Therapeutics. them are vertically integrated from API in turn, we expect the partner to eat up the breadth of our expertise, so we often greatest opportunity and where we be- True innovation and good science, even to manufacturing and commercialization. cost of scale up. Then we split the filing fee bring our scientists with us to the nego- lieve we can deliver the best value. Our if outside our core therapeutic areas, For us to compete with them in the long and profits. ■ tiation table. core therapeutic areas are: inflammation will always be an opportunity for us. ■

USA BIOPHARMACEUTICALS 2020 14 Industry Explorations Global Business Reports 15 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations EDITORIAL

NIH FUNDING PER CAPITA 2019 New York Life Sciences Hub Introducing Source: NIH $418 TOP LIFE SCIENCES COMPANIES TOP NIH-FUNDED INSTITUTIONS BIOTECH AND LIFE SCIENCE IN The Hubs Source: EMSI 2014-2018 NEW YORK STATE COMPANY TYPE Source: NewYork Bio US$1.9B Pfizer Big Pharma COLUMBIA UNIVERSITY HEALTH SCIENCES #2 RANK Eli Lilly Big Pharma BUILDING LASTING $253 NATIONALLY ECOSYSTEMS Bristol-Myers Squibb Big Pharma US$1.5B New York is second in the nation for bioscience jobs Intercept Pharmaceuticals Big Pharma ICAHN SCHOOL OF MEDICINE AT MOUNT SINAI $141 $138 $135 $135 Roche Big Pharma $107 Enzo Biochem Biotech $70 $70 US$1.1B US$2.6 BILLION NEW YORK UNIVERSITY $43 7,648 In America there are a few states whose LIFE SCIENCES TALENT POOL: SCHOOL OF MEDICINE New York has received $2.6B in reputations are inextricably associated Source: EMSI National Institutes of Health funding with their dominant industry. When Number of persons and 5,000+ research awards people think of Michigan it conjures up MA MD PA WA NC NY CA IL OH TX 8,000 images of cars coming off a produc- tion line in Dearborn. For Texas it is oil as well as the capital markets of Manhat- 7,500 wells and for Hawaii, it is dazzling tourist tan; a big additional advantage for bio- » 7,000 beaches. New Jersey has a less strong, tech companies, whose nascent science #2 IN THE albeit equally important, connection may demand massive funding on the Cambridge is currently a key 6,500 with its pharmaceutical industry. path toward treating patients. Along- AVERAGE ANNUAL GROWTH RATE 2001-2018: 2.0% New Jersey is often referred to as the side big pharma, the state possesses global hub biotechs, and I 6,000 NATION world’s ‘medicine chest’ because it is a service provider network that is sec- cannot think of any large pharma 5,500 New York is second in the nation home to 13 of the top 20 pharmaceutical ond to none including accountants, at- company that does not have an for higher education degrees in companies globally. These include gi- torneys, clinical research organizations, 5,000 biological sciences R&D footprint here. Funding and ants such as Johnson & Johnson, Merck contract manufacturing organizations 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 and Bristol-Myers Squibb. In 2019, com- and others that help companies bring valuation in the biotech sector panies with a footprint in New Jersey medicines and therapies to market. has been strong, encouraging from the National Institute of Health bridge’s two internationally renowned estate firm JLL revealed that develop- were the source of over 50% of all novel According to David Kimball, senior vice large pharma companies to (NIH), according to figures from that or- universities, followed suit and created ers cannot keep up with demand for FDA medicine approvals and Governor president for research and economic ganization. Boston in particular has re- innovative startups of their own. This lab space, with vacancy rates hovering acquire these companies or Scott Murphy continues to push legisla- development at Rutgers University: ceived more NIH funding than any other encouraged global pharmaceutical gi- at 0% in East Cambridge. Lab space is tion that incentivizes the biopharmaceu- “There are two fundamental advantag- invest in them at a very early US city for each of the past 24 years. In ants, struggling with poor productivity so coveted that it fetches an average tical industry. He reinstated and funded es to being in New Jersey. One is that stage to fuel their R&D activities. the last decade, there has been 13 mil- in their existing research facilities, to monthly rent approaching US$100 per the New Jersey Commission on Science, rent prices are cheaper and the other The energy we see in the Boston lion square feet of lab space filled, which set up labs in and around Cambridge, square foot. This reality is a big potential Innovation and Technology (NJCSIT) is the unmatched talent pool. Many of has boosted the construction and real which at that time was considered to be deterrent for emerging biotech compa- area is amazing, with the number and has been advocating for the pas- the best minds in drug development are estate industries. The employment rate a desolate wasteland of empty parking nies deciding where to base their op- sage of the Evergreen Innovation Fund, still here from the heyday of big phar- of biotechs that are here and the grew by 35% and the average yearly sal- lots and crumbling warehouses. eration. It is also why the biotech boom which will encourage and allow venture ma and, as a result, New Jersey has the incredible talent that is available. ary in life sciences is now US$148,000 Today Cambridge’s Kendall Square has is no longer limited to Cambridge and capital firms to partner with New Jersey highest percentage of PhDs per capita per year, according to MassBio. become the key focal point within the Boston. Areas across Massachusetts businesses under a format where their of any state.” east coast biotech cluster, as it is home like Worcester, Waltham and Amherst - Vivek Sharma, investments will be matched dollar-for- What New Jersey is to big pharma, the to the greatest concentration of bio- are also benefiting, because they offer dollar by the state. same can be said of Massachusetts Former CEO, Transforming cities technology companies in the world. The greater access to more affordable space The garden state has been considered when it comes to biotech. The Boston Piramal Pharma Solutions and area is home to biomedical firms large and are more accessible to workers, who the global center of gravity of the phar- metropolitan area, and in particular Decision Resources The history of the Boston area cluster and small, but also to the investors, pat- prefer to avoid the Boston’s notorious maceutical industry for many decades Cambridge across the Charles river from can be traced back to the late 1970s ent lawyers, CRO’s and suppliers sup- traffic gridlock. and, although the advent of biotech has central Boston, seems to be holding its Group and early 1980s, when Biogen and porting them. Furthermore, there is significant com- brought about new competing clusters, own as the pre-eminent biotech hub in Genzyme, two biotech drugmakers, While the kinetic energy of having ev- petition from other emerging clusters New Jersey’s talented workforce still de- the world. The density of research in- were founded by scientists from nearby eryone squished together is hugely with a similar level of premier hospitals, livers scientific discovery in spades. The stitutions in Massachusetts means that « academic institutions. Other scientists, appealing to many, it also has its draw- universities and lower costs. Neil Bel- state also offers access to major airports it receives US$418 per head in funding especially from MIT and Harvard, Cam- backs. The 2019 annual report by real loff, chief operating officer and general

USA BIOPHARMACEUTICALS 2020 16 Industry Explorations Global Business Reports 17 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations FACTSHEET

counsel at Eloxx, a clinical-stage bio- ing, and today, as over US$550 million pharmaceutical company, commented: has been invested in local manufactur- Greater Philadelphia New Jersey “State governments can play an im- ing of these modalities. In 2019, Cran- portant role and establish centers of bury, New Jersey based Amicus Thera- Life Sciences Hub excellence around their great academic peutics, announced that it would open a Source: Cushman & Wakefield institutions. Heavily taxed states like global research and gene therapy cen- Massachusetts and New Jersey must ter of excellence in Philadelphia’s uCity be cognizant of the fact that states with Square; one of a number of announce- lower tax structures are offering attrac- ments indicating a robust growth envi- Quest Diagnostics Catal tive incentives for companies and em- ronment for Philly’s life science industry. 9.7 MSF Allergan ployees to relocate.” New York City’s life sciences market is Both Philadelphia and New York City also gaining momentum, as develop- MARKET SQUARE Quintiles Stryker Orthopaedics have looked to tap into the industry. ers plan to bring more than 2.6 million FOOTAGE Ferring BD These emerging clusters have a similar square feet (msf) of dedicated office GlaxoSmithKline Bayer Healthcare level of premier hospitals and universi- and lab space online over the next three AbbVie ties, while also offering lower costs and years. The city has long taken a back seat Daiichi Sankyo Parexel some attractive incentives. More than to places like San Francisco and Boston Frontage Laboratories 30 cell and gene therapy development in the life sciences, however, New York Cambrex Corporation companies and roughly 80% of all phar- City offers an appealing environment, as Pfizer GlaxoSmithKline maceutical and biotech companies in it is already home to many of the nec- Pfizer Novartis Valeant the U.S. have offices in Greater Phila- essary features of a mature cluster. The US$30.78 Biotrial Zoetis Merck delphia, according to data from Select presence of leading technology firms, AVERAGE ASKING Celgene Jnssen Daiichi Sankyo Greater Philadelphia. Many of these world renowned medical research cen- RENT (PER SF) Amneal companies have played a founding role ters, top-ranked academic institutions Eli Lilly Roche PTC Therapeutics in cell and gene therapy, and gene edit- and large successful pharmaceutical Catalent Pfizer and biotechnology companies positions Allergan New York City as the most sought after Novo Nordisk emerging life sciences cluster. There is Bristol-Myers Squibb Dr. Reddy’s Laboratories » n also the precedent Regeneron has set Johnson & Johnso Sandoz Covance New York is one of the most by transforming itself into one of the Parexel Bristol-Myers Squibb leading biotech companies in the world, Otsuka fascinating case studies. Ten Aurobindo PPD years ago, talking about while being based in New York. 15K Janssen Peter Meath managing director, co- TOTAL BIOTECH + starting an early stage biotech head of healthcare and life sciences at R&D EMPLOYEES company in New York was J.P. Morgan Commercial Bank spoke to almost laughable from a cost the dynamism New York’s life sciences PHARMACEUTICAL industry is experiencing. “New York is AND BIOTECH CLUSTERS effectiveness perspective. Now one of the most fascinating case stud- it is an extremely robust area for ies. Ten years ago, talking about start- new company development and ing an early stage biotech company in #2 50% New York was almost laughable from a growth, which is a testament to REGION off 2019 cost effectiveness perspective. Now it is the work that incubators, capital for NIH Funding FDA approvals an extremely robust area for new com- +4% providers and universities pany development and growth, which is have done. a testament to the work that incubators, TOTAL EMPLOYEES capital providers and universities have SINCE 2010 done.” - Peter Meath, In the life sciences, location is not nec- Managing Director, essarily the most important factor, as Co-Head of Healthcare evinced by the many virtual companies and Life Sciences, that manage to make do. However, it is clear that companies find value in J.P. Morgan clustering. In the end, having potential Commercial Bank collaborative partners close by is impor- 10.4% 27,000 139 tant, and the possibility of serendipitous LIFE SCIENCES FDA-REGISTERED BIOPHARMA VACANCY interaction with the leading minds in the Grads Manufacturing facilities sector is an opportunity that is hard to « Source: Choose New Jersey pass on. ■

USA BIOPHARMACEUTICALS 2020 18 Industry Explorations Global Business Reports 19 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports

Debbie

Hart Because Patients Can’t Wait ® New Jersey’s Life Sciences Industry: A Global Leader Founding President & CEO    BIONJ As New Jersey’s life sciences trade association, our mission at BioNJ is to help our Members help Patients. And we are so proud of the medical innovation coming from the Garden State. It is second to none. Our Members are delivering new therapies and cures for Patients around the globe. has the highest concentration of spe- their development. Another pending Why is New Jersey an advantageous New Jersey’s life sciences ecosystem... place to operate a biopharmaceutical cialized commercialization expertise in program is the Evergreen Innovation company? the world. We have seen many compa- Fund, which will encourage and allow New Jersey offers research, talent, fund- nies with a drug approval on the horizon venture capital firms to partner with • More than 50% of all new FDA novel ing, available space, university partner- coming to New Jersey to tap into New New Jersey businesses under a format medicines approved in 2019 were from ships and industry expertise for life Jersey’s plentiful commercialization tal- where their investments will be matched companies with a footprint in New Jersey sciences companies. From incubators ent. One of the areas where I am partic- dollar-for-dollar by the State. It also in- to stand alone laboratory space at re- ularly excited to see growth is in the ear- cludes a component where other large Home to 13 of the 20 largest biopharma search parks and hubs, New Jersey has ly stage innovators. In recent years, our companies can participate as investors • world-class research universities, medi- academic institutions have increased and get tax credits in return. It would be companies cal schools and some of the best hospi- the number of spinouts. These institu- the only one of its kind in the country. tals in the country. Home to 13 of the top tions are looking at technology transfer • 3,280 life sciences establishments 20 pharmaceutical companies, there are with a whole new eye. All of these ex- Proposals coming out of DC that opportunities to partner with big phar- isting strengths and new developments seem to have some traction are im- • A national leader in cell and gene therapy ma companies, such as Johnson & John- are coming together to bolster New Jer- portation and international pricing son, Merck and Bristol-Myers Squibb. sey’s position as a life sciences hub. for drugs. What is your view on these research, development and manufacturing There are no other states that have the proposals? presence of big pharma on such a large What has been the most impactful in- We believe proposals, such as importa- • First-ever FDA CAR-T approvals came from scale. This allows for great opportuni- centive offered by Governor Murphy tion and international pricing, are the companies in New Jersey ties, growth and breakthrough innova- that is benefiting the state’s biophar- wrong approach for patients and for our BioNJ supports the tions. New Jersey’s location provides maceutical industry? health care system. Importation under- strategic access to the world’s financial As of January 1, 2020, the Angel Inves- mines the FDA gold-standard supply • More than 25% of all cell and gene therapies advancement of medical and regulatory centers, along with the tor Tax Credit increased from 10% to chain, will not achieve the anticipated in development are being done in New Jersey region innovation by ensuring that most highly educated workforce in the 20%, plus a 5% bonus for women and savings and jeopardizes the health and United States. In fact, New Jersey has minority-owned businesses as well as well-being of patients. International • Leads the nation with 139 FDA-registered Science is Supported the highest concentration of scientists those located in an Opportunity Zone. pricing for drugs would decimate invest- biopharmaceutical manufacturing facilities Companies are Created and engineers per square mile in the The expanded Angel Investor Tax Credit ment in the biopharmaceutical industry world. We have a service provider net- is now one of the most progressive and and reduce patient access to life saving Drugs are Developed • Had 792 active clinical trials in 2018 with an economic work that is second to none including potent tools of any state to encourage cures. Patients are Paramount accountants, attorneys, clinical research investments in early stage innovative impact of nearly $1 billion CROs, CMOs and others that help com- companies. Another initiative, the NJ What is your assessment on the over- panies bring medicines and therapies Ignite program, offers up to six months all health of the industry today? • The world’s highest concentration of scientists and to market. The concentration of our re- of free rent for companies in certain ge- In New Jersey, the life sciences industry search hospitals, medical schools and ographies. This has proven meaningful is healthy and robust and bringing im- engineers per square mile – more than 225,000 statewide universities, combined with the state’s for early stage innovators. Governor portant new therapies and cures to mar- population density, multicultural diver- Murphy also reinstated and funded the ket. In fact, in 2019, more than 50% of • 63 academic institutions turning out 27,000 life sciences sity and transportation infrastructure New Jersey Commission on Science, all novel FDA medicine approvals came graduates each year makes New Jersey a perfect location for Innovation and Technology (NJCSIT). from companies with a footprint in New the life sciences industry. More than 300 The commission just awarded its first Jersey. That innovation needs to be cel- CROs and 120 CMOs are located here. round of SBIR (Small Business Innova- ebrated. In fact, at our Annual Meeting Finally, lab space is not only available, tion Research) and STTR (Small Business this year, we honored 31 novel drug ap- Visit www.BioNJ.org or call us at 609-890-3185 to learn more but at a much lower rent than in Cam- Technology Transfer) grants which will provals from 20 different companies. about the medical innovation taking place in New Jersey. bridge or New York City. New Jersey support companies at a critical time in Now that’s something to celebrate! ■

USA BIOPHARMACEUTICALS 2020 20 Industry Explorations INTERVIEW Global Business Reports Industry Explorations FACTSHEET

Robert K. Massachusetts Coughlin

50+ biotech companies, President & CEO 2 million+ s.f. in lab space, UMass-Lowell and 11 other colleges MASSBIO 50+ biotech companies, WPI, UMass-Worcester, and 16 other colleges NORTHEAST

What does the Vertex Trikafta approval mean for patients kinds of incentives we need to provide to investors to take 250+ biotech companies, the big risks required in this industry. We need to change our with cystic fibrosis (CF) and what does it take to bring life- the top 4 NIH-funded hospitals transforming drugs to market? sick care system to a healthcare system, one that compensates BOSTON in the U.S., and 48 colleges 2019 has been the most fulfilling year for my family, in large companies based off of the value therapies bring to the mar- CAMBRIDGE part because Vertex’s Trikafta was the first drug approved that ket and to patients. For example, if you can give a patient with WORCESTER CORE worked for my son who has CF. Although there have been sev- CF these new CFTR modulators, it keeps them out of the hos- eral approved CF treatments over the years, this is the first pital, it keeps them from needing lung and liver transplants one that treats up to 90% of the CF population. This is another and it keeps them from dying. 128/SUBURBS reminder just how difficult it is to bring a drug to market, as it WEST took 18 years and billions of dollars to finally develop a drug How have the reforms made by CFIUS impacted foreign in- that worked for my son and thousands like him. It takes count- vestment into biotech and are there valid national security SOUTHCOAST less failures and major investment to bring any life-transform- threats associated with foreign entities taking ownership ing drug to market – but there is another ingredient that is stakes in US based companies? essential: a supportive government. As a lawmaker, I realized CFIUS shutting out money coming in from Asia was not good The immediate western suburbs that people in government have the power to either conduce for our industry. I think it is even more catastrophic to our in- include 75+ biotech companies, or kill innovation. By intersecting policy, science and innova- dustry when bad immigration policy is brought upon us. It is 15 colleges, tion, we could make Massachusetts the global leader for drug extremely difficult to fill complicated positions in our industry Home of UMass-Amherst 3 million s.f. of lab space discovery and development. Creating a partnership between that require a unique skillset of experience and education, and and 21 other colleges. government, academia, and industry was the missing piece to we can not always fill these positions with people from the US. Area known as making this a reality. The Knowledge Corridor Strong med device and biopharma What areas of the industry are making the most notable manufacturing capacity, with numerous What challenges must be overcome to remain the worlds progress in developing cures? land sites in BioReady communities leading biotech cluster? The industry has eradicated Hepatitis C. Our member com- and 10 colleges We have grown so much over the last decade, having added panies are no longer just treating the symptoms of disease #1 nearly 20,000 new life sciences jobs, making talent recruit- but are addressing the underlying cause of disease and doing REGION ment and retention a huge issue. The growth we have experi- so in a personalized manner. Gene therapy has also been a for NIH Funding enced is not sustainable, as we need to improve our infrastruc- game changer. This technology has the ability to cure cancers, ture and transportation system to support current and future reverse blindness, cure fatal rare diseases, and more. We need 2010 2019 growth. It is no longer just about Cambridge and Boston, reas to educate policymakers on the potential of these incredible like Worcester, Waltham and Amherst are also benefiting from innovations and ensure they do not halt innovation through 17.8 30 the boom, because there is greater access to space that is af- harmful policies. MILLION MILLION fordable and more accessible to workers. SQUARE FEEFEETT over SQUARE FEET Where would you like to see Massachusetts biotech and biopharma industries in the future? 12.4 MILLION To what extent do you fear some of the policy proposals In the next five to 10 years, MassBio will focus on address- square feet of commercial coming out of DC may hinder innovation and remove eco- ing challenges to keep Massachusetts the best place in the lab space has been added to nomic incentives that encourage drug discoveries? world for the life sciences and capitalizing on opportunities for Policymakers do not understand the value prescription drugs growth. This includes a renewed focus on talent acquisition, Massachusetts in the last 10 years, bring to the healthcare system in terms of costs avoided else- especially diversity and inclusion, better demonstrating the an increase of where and to patients in terms of making them healthy and value of our industry to patients and the healthcare system, productive members of society. They also do not understand and supporting advancements in digital health and conver- 70% just how difficult it is to bring a new drug to market and the gence. ■

USA BIOPHARMACEUTICALS 2020 22 Industry Explorations Global Business Reports 23 USA BIOPHARMACEUTICALS 2020 GBR • Industry Explorations • USA BIOPHARMACEUTICALS 2020

THE BIOPHARMA INVESTMENT CLIMATE

» Much of what was true before the COVID-19 outbreak in the United States is still true today. It is just going to take longer for some programs to materialize. The market value of investment capital has declined, and that will affect new capital investment. Clinical trials will take longer to enroll and some of them have been suspended. On the commercial side, the sales forces of the combined pharmaceutical- biotechnology industry are now working on a virtual basis – an unprecedented development. Things will take a while to sort out. But there is a real possibility of important efficiencies coming out of all of this. We may find out that there are new ways of doing things and that they work. «

- Christopher S. Eklund, Managing Director, J.W. Childs Associates LP

Image courtesy of PharmaLex EDITORIAL Global Business Reports Industry Explorations EDITORIAL

US PHARMA & BIOTECH VC DEAL ACTIVITY co-founder of Arch Venture Partners, private companies earlier, at a lower The Source: Pitchbook » has remained committed to investing valuation, so they could generate more through the pandemic. In his words: returns for their fund when these com- Deal value (US$ billion) Deal count Biopharma “This is a transient event, as painful and panies went public. The challenge now Third Rock was founded during messy as it will be. A year from now, it is is investors may be anxious about the 866 over. In China, people are already start- overall market valuation and concerned Investment $18.6 an economic downturn, and 777 ing to reemerge.” that markets may still have forward 831 $16.6 we will continue to invest in Climate 706 By contrast, Tony Johnson, CEO of downward movement to go until they 633 medical innovation regardless Goldfinch Bio, anticipates the crisis return to where they were previously. 592 will bring about some changes in how For that reason, investors may be more 533 645 $12.6 of the state of the economy. 489 500 investors view allocation of capital to- inclined to sit on the sidelines when it $10.8 We continue to launch 431 ward less liquid, private companies: comes to investing in private compa- $9.1 companies that we believe have “Markets were at an all time high in nies.” $7.8 the approach and ability to $6.3 the early part of the first quarter. Since Regardless of the changes in the in- FROM BULL MARKET $5.0 $5.2 then, there has been phenomenal vola- vesting environment, great investment $5.0 $4.6 advance novel approaches to TO U NCERTAINTY the diagnosis and treatment of tility and COVID-19 is contributing sig- theses, strong teams and products that nificantly to that. Public companies are are in the clinic should continue to raise disease. We actively consider now much less expensive, are more liq- money and do well. The US is blessed 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 scientific, medical, business uid and you can invest at significant dis- with an abundance of risk takers under- development and financial counts to where prices were at the start taking truly transformational science. At this years’ J.P. Morgan Healthcare of the year.” He continued: “For private Therefore, as long as the economic US PHARMA & BIOTECH VC DEALS ($) BY STAGE strategies that together may conference in January, the consensus Source: Pitchbook companies, it could be more challeng- incentives that help generate these view was that biopharma was going help ensure our companies have ing, because investor interests were discoveries remain in place, the future through a renaissance period, and ex- % Late VC Early VC Angel & seed every opportunity possible to centered around their path to becom- remains promising. It is worth remem- 100 pectations were for 2020 to be another weather any headwinds that may ing public in the next one to two years. bering that many of the top tech com- prosperous year for the industry. Funds 90 It was a way of getting involved with panies we have today came out of the be ahead and deliver on were readily flowing into startups pur- 80 suing novel medicines for oncology, their missions. 70 immunology, rare diseases and next 60 generation technologies. The sanguine - Kevin Gillis, outlook was justifiable given the explo- 50 CFO, sive growth of capital inflows. Biotech 40 oriented venture capital funds have Third Rock Ventures doubled their assets under manage- 30 ment over the last eight or so years, 20 which has led to a large expansion of 10 funding per round, and 50 plus fund- ing rounds over US$100 million in 2019, 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 according to Pitchbook data. This was « unimaginable 10 years ago. Fast forward three months, and com- AVERAGE FUNDING PER ROUND panies now face questions concerning Source: Pitchbook how to keep their clinical trials running, $ million tal intensive and, with more biotechs in their scientists busy and their balance 35 existence than ever before, the indus- sheets strong, as Covid-19 threatens to try requires a steady flow of investment upend plans and budgets. 30 to keep laboratories churning out new Even under normal conditions, 80% to medicines. Venture capital plays an in- 90% of health-focused research never 25 strumental role in this process. leaves the lab, according to Clarivate Although the biopharma sector is nor- 20 analytics. Many companies do not mally somewhat insulated from the make it past the early stages of devel- 15 rest of the market, particularly during a opment. In many cases, they succumb health scare, it is certainly not immune to the “Valley of Death”; the period 10 to the effects of a more fearful inves- of development when companies are tor psychology and a desire by many to building their infrastructure and work- 5 de-risk until the pandemic blows over. ing on proof of concept, prior to being Uncertainty about the timeline and na- attractive to a broad pool of investors. 0 ture of a recovery create divergences in Drug development is notoriously capi- 1Q-2013 3Q-13 1Q-14 3Q-14 1Q-15 3Q-15 1Q-16 3Q-16 1Q-17 3Q-17 1Q-18 3Q-18 1Q-19 3Q-2019 opinion. For example, Robert Nelson,

USA BIOPHARMACEUTICALS 2020 26 Industry Explorations Global Business Reports 27 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

2008-09 financial crisis. Third Rock Ven- companies through a potentially pre- restrictions. Logistically complex trials, diversity to be able to accommodate a How has COVID-19 impacted your tures, one of life sciences’ most avant- carious upcoming 12-24 month period. like those in cell therapy, are particularly different epidemic progression, while operations as well as clinical trials and garde firms, was a product of the bear The early signals, however, are that the difficult in this environment. All of these hospitals in certain areas are taxed for the development of your assets? market in which it was created. “Third healthcare revolution will continue and pose big challenges to small biotechs resources.” There were a couple of impacts – most Rock was founded during an economic companies will remain committed to that were expecting to enroll patients notably, clinical trial recruitment is a big downturn, and we will continue to invest investing aggressively in entrepreneurs over the course of 2020. In this sense, question. Some companies stopped all in medical innovation regardless of the working to meet unmet medical needs. it will be a big challenge for companies A New Model for Venture Creation recruitment. Responses and the impact state of the economy. We continue to to reach the critically important goal of on their finances have been different. launch companies that we believe have obtaining key catalytic data that dem- One of the most important changes Thus far, oncology trials are less impact- the approach and ability to advance Reaching Inflection Points onstrates the value of an R&D program over the past decade has been the par- ed generally, but it is a work in progress novel approaches to the diagnosis and and justifies future rounds of venture adigm shift from entrepreneur-centric understanding the overall impact. treatment of disease. We actively con- Clinical development programs are capital funding. to VC-collaborative startup formation. From a financial point of view, compa- sider scientific, medical, business de- particularly sensitive to COVID related According to Spiro Rombotis, CEO Back in 2010, it was common practice nies in the pharmaceutical industry are velopment and financial strategies that disruptions. With the shutdown of the of Cyclacel: “Managing clinical trials for startup entrepreneurs to pitch their doing well, and the programs will be together may help ensure our compa- healthcare system in multiple regions through this period is a major concern company to VC firms looking for Series back on track as soon as hospital access nies have every opportunity possible of the world, and hospitals in particu- for every company. It could completely A capital. The founders would have as- normalizes. In fact, this crisis provides to weather any headwinds that may be lar, the impact on clinical trial timelines derail the efforts of many companies. sembled a story, team, a strategy, and Jim opportunity in that there is potential for ahead and deliver on their missions.” has the potential to be significant. Not everyone is exposed to the same often some “friends and family” seed more biotech companies that will see Given the continued political clamor Many sites have prohibited all elective degree. Certain densely populated cit- funding, and would then tout their a royalty monetization transaction as a around drug pricing and an increasingly procedures, which includes non-urgent ies have been most affected, so if you proposal around the venture commu- Neal source of interesting capital if the eq- unpredictable future, investors may be visits and treatments for most non-life- have been running trials in Seattle or nity to see which firms would express uity markets shut down for them. more hesitant to put the time, energy, threatening diseases. Patient screening New York City, your impact will be high- interest in investing. Most startups This has been positive for the execution and capital into new startups. Particu- and enrollment may also be shutdown er than if you were conducting trials in would find standalone offices or labs CEO of our strategy as a potential capital larly at a time when they may need or curtailed dramatically in some ge- Salt Lake City or Memphis. It illustrates to rent during this process. Today this XOMA source that is valuable for the commu- those resources to support existing ographies due to travel and logistics the importance of having geographical dynamic is very different. The prior “on nity. your own” entrepreneur-centric ap- proach is less common. Today, a ven- Could you give an insight to the steps ture firm, working with a talented pool XOMA is taking to drive value cre- of entrepreneurs-in-residence, will scan What is your acquisition strategy? ation for shareholders? Third Rock Launched its Fund V in will continue to launch companies that through new science or technological The companies we look for are in early As a biotech company, we think about Kevin June. What is the strategy for the we believe have the approach and abil- concepts that emerge out of academia or mid-clinical stage. The questions the science underpinning these mol- fund and what are the biggest areas ity to advance novel approaches to the and to push forward to form a company of who will do the development and ecules and the impact it will have on pa- Gillis of unmet medical need you look to diagnosis and treatment of disease. around these. The new startup is most the commercialization are answered, tients. From a shareholder point of view, invest in? We actively consider scientific, medi- often incubated or housed within the because they are subject to a license there are two ways one can anticipate With Fund V, we will continue to execute cal, business development and finan- venture firm’s offices in its early days agreement. growing returns. First, our pharmaceu- on its strategy of discovering, launch- cial strategies that together may help while it pulls itself together, often with A transaction with XOMA allows com- tical and biotech partners are investing ing and building innovative life scienc- ensure our companies have every op- VCs or their teams taking on acting op- panies to retain a higher ownership per- billions of dollars into programs without CEO es companies that have the potential portunity possible to weather any head- erating roles until a seasoned team can centage of their company and we can us spending anything. As molecules to transform the lives of patients and winds that may be ahead and deliver on THIRD ROCK VENTURES be recruited. provide them with capital that is impor- advance in the pipeline, they become their families. Funds raised will be used their missions. This is the model that leading VCs in- tant for them to start other programs. increasingly valuable. A good example to create companies focused in many cluding Atlas, Third Rock and Flagship We typically deploy US$5 to US$15 mil- is companies like Novartis that start different areas of high unmet medical How does TRV go about stress test- Pioneering have adopted and it has led lion to companies. talking about the CD40 (iscalimab) pro- need including cancer, neurological dis- ing ideas? to many profitable exits. In summariz- gram and the impact it can have on the orders, rare genetic diseases, immune For each project, we put together ing the benefits of this model Michael Is XOMA making any investments in lives of patients, as well as on their P&L. disorders and cardiovascular diseases. multi-disciplinary teams of our people, Gladstone of Atlas Venture said: “A cru- infectious disease assets? The overall profile of our portfolio has leading scientific founders and expert cial ingredient in the company, which is We want to be agnostic to the thera- a center of gravity around Phase 1 and Early stage investors have to be con- advisors. We vet the opportunity and often more important than the technol- peutic area focus and will look at oppor- Phase 2. In a couple of years, it will have fident they will be rewarded years competitive landscape with industry ogy or the IP, is the people and leader- tunities in the infectious disease space if a center of gravity in Phase 3, which into the future, given the long time- partners, and we explore opportunities ship of these companies. We can play they present themselves. We have slight would be a great driver to our portfolio- line to commercialization. In light of to build companies from the ground up matchmaker between an interesting emphasis in oncology. There are many maturity dimension of shareholder val- the drug pricing debate and general together with large biotech and phar- technology and asset and a talented antibodies in our portfolio. The strategy ue. The second value dimension is the anti-biopharma political punditry, do maceutical companies, as well as stra- entrepreneur and management team. is being agnostic toward therapeutic ar- acquisition of additional assets – going you see this affecting startup forma- tegic partners from the venture commu- We use our incubator space to co- eas. If COVID-19 creates more empha- from 40 to the more than 65 assets we tion? nity. Projects are refined through nearly house entrepreneurs, so they can work sis in the area of infectious diseases and have today. This increases the revenue Third Rock was founded during an eco- a dozen reviews of the vision, science, with the investment team to find and more partnerships take place with bio- potential and chances of commercial- nomic downturn, and we will continue people, business and R&D plans and go identify interesting technologies and tech and pharmaceutical companies, ization. Risk is mitigated by having a to invest in medical innovation regard- through at least four go or no go deci- then put companies together around these are more opportunities for us to significant number of additional assets less of the state of the economy. We sions. ■ them.” ■ think about monetization transactions. in the case one molecule fails. ■

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Can you provide an overview of Atlas have several players in the same product Venture’s current portfolio and the ap- space within a few years. Often, a dispro- proach you take to investing? portionate share of the market goes to Christopher S. Our company-building approach is flex- the group that arrives first or second or ible and allows us to customize the busi- comes in with a dramatically differenti- Eklund ness model for the science rather than the ated product. This competition and the other way around. We are investing now sense of urgency it provides is a great out of our 11th fund which is a US$350 thing for patients, and it makes it more million closed-end fund. We have a sepa- important than ever for biotechs and rate vehicle, a US$250 million opportuni- pharma to address outstanding unmet Managing Director ties fund which is a vehicle to invest in the needs. Showing up late with an undiffer- J.W. CHILDS ASSOCIATES LP Series B and later rounds of our existing entiated product is unlikely to be com- portfolio companies as they grow and mercially viable. mature. A big part of our strategy in be- ing an early stage investor is venture cre- Regarding Covid-19, what is the time- ation. We are helping to form and build line to bring a therapeutic to market. Biotechnology is a tremendous growth market but how has patient’s own endogenous antibodies to kill cancer cells. Our Michael many companies we invest in – at least How does this compare to the typical COVID-19 and the market changed that? KP-1237 product, a CD38-targeting ARM, recently received two-thirds of our companies are ones timeline? Biotechnology is a US$550 billion global market, expected IND-authorization for a trial at the Dana-Farber Cancer Insti- where we work together with academic It can typically can take anywhere from to be US$727 billion by 2025. Biotech has held up reasonably tute that combines KP-1237 with a patient’s own natural killer Gladstone or industry experienced entrepreneurs to two to six years to go from starting a well in the downdraft and may be one area that is poised to (NK) cells to treat multiple myeloma in post-transplant pa- form and launch and often initially incu- program from being ready to enter hu- benefit. Longer term, we are hopefully still in the early stages tients. The KP-1237 ARM is designed to transport a patient’s bate in our office. To support that, two man clinical trials. The typical timeline of this growth cycle and witnessing one of the great growth activated NK cells to the CD38-expressing tumor without kill- thirds of the floor space here in Atlas’s from clinical entry to FDA approval can markets. Right now, across the industry, a huge amount of ing NK cells. office is incubator space for six to eight be somewhere between four to 10 years. effort is going into developing vaccines, immunoglobulins and nascent companies with the expectation Obviously we’d like to have effective anti-inflammatories that target both COVID-19 and/or its key What do you think of the approach of bringing research sci- that in six to 12 months they outgrow that coronavirus therapies and vaccines much symptoms. But work also continues on therapeutics across all entists in-house to incubate new companies based on early space and launch elsewhere nearby. sooner than that, and companies and indications. Much of what was true 10 weeks ago, before the scientific discovery? Principal regulators are working hard to streamline Coronavirus outbreak here, is still true today. The market value That is what happened at Kleo Pharmaceuticals. We were ATLAS VENTURE Is the recent success of the biotech this path in light of the urgent medical of investment capital has declined, and that will affect new working with Yale Professor of Chemistry and Pharmacology, sector more a product of the long- need. capital investment. Clinical trials will take longer to enroll and David Spiegel, who developed the concept of antibody re- term bull market that we are experi- The fastest opportunity for Covid19 is some of them have been suspended. cruiting molecules (ARMs) based on his research work in the encing or is it reflective of the matur- probably to repurpose existing drugs, lab. That is how the project started. ing of the sector? such as antivirals or anti-inflammatories, Can you give us an example of an investment that has The last six to eight years have been great to determine if they have clinical benefit in worked well for you? Have there been any changes in the process of capital rais- for healthcare and biotech. Underlying Covid19 infection. If you have a drug that The best example of this is Biohaven Pharmaceuticals, which ing in biotechnology? that are real secular changes in drug dis- is relatively safe in humans and you have we invested in over seven years ago. Biohaven’s lead prod- Yes. Even though there is a shortage of biotech companies covery and development. We are reap- an idea of what dose to give, repurposing uct, Nurtec, is a best-in-class therapy for acute migraine with in some hot areas, capital-raising and M&A dynamics have ing the benefits of the genomics boom it to be able to do a rapid clinical study a clean safety profile. It was approved by the FDA on Feb 27. changed. Buyers and investors are looking more closely at in the early 2000s, which yielded new in coronavirus is relatively quick. The road Recently, a Phase 3 trial also showed Nurtec’s efficacy as a pre- valuation and, in particular, how well a company has hit a series drug targets, coupled with many new is likely longer to establish the safety ventative agent for migraine, making it a possible alternative of inflection points and endpoints. As a biotech company, you tools at our disposal to make drugs and and efficacy for novel therapies, such as to the injectable CGRP monoclonal antibodies on the market. can no longer just go out, hire a banker and launch a strategic to evaluate biology. Overall, the tools and vaccines or neutralizing antibodies, but Combining both acute and preventative treatment in a single process to raise money or sell the company. Communication Atlas Venture is an early-stage information at our disposal are at a dra- there is already tremendous progress be- oral dose could represent a paradigm shift in the market. with potential partners begins at any early stage, involves the matically different place than they were ing made very rapidly, and multiple novel science and business development teams, and continues over venture capital firm that invests 20 years ago, which has contributed to drug candidates from these classes could What was the appeal of investing in Omax Health and Kleo a period of time. In the case of an IPO, meeting inflection in life sciences startup companies many transformative new drug approvals be in clinical trials within 2020. Pharmaceuticals? In the case of Omax, what potential do points is important both before and after the IPO. in the U.S. and strong capital market performance you see in supplementation that can enhance cognitive per- for the companies delivering those drugs. What areas are primed to make the formance? Over the next two years what goals would you like to biggest breakthroughs? Omax Health is a nutritional supplement company that pro- achieve at JW Childs in terms of portfolio companies? What How much of the value being driven There has been an explosion of new duces one of the highest-quality omega-3 products on the development do you want to see? from the industry is coming from inno- modalities, things like cell therapy, gene market. Omega-3 polyunsaturated fatty acids are important From a direct investment standpoint, we are looking to add vative and novel drug therapies? therapy, oligonucleotides, and targeted to virtually everyone’s diet in maintaining optimal cholesterol perhaps three or four new portfolio companies a year out of It is more important than ever to arrive protein degradation. As we learn more and triglyceride levels. Since we launched that product back in a pool of companies we look at. We look for companies that early in a new class of drugs. It used to be about the genetic underpinning of dis- 2012, we have built a portfolio of products around it, including will make a difference with a breakthrough in an area of unmet that if you were the first to market in your eases, these novel tools will increasingly probiotics and a line of CBD products for sleep, pain relief and need. If we like the team and we believe we can contribute therapeutic class, you might have that be a powerful and direct way to directly joint health. meaningfully, and the valuation is reasonable, we may invest. class to yourself for five to 10 years. But address the central cause of many ill- Kleo Pharmaceuticals is an oncology company that has devel- Often, these opportunities arise from the companies we are that period is shrinking, and now you can nesses. ■ oped an antibody recruiting molecule (ARM) that recruits a already invested in. ■

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ANNUAL BIOPHARMA M&A Merger Spree Relative to many R&D-intensive industries, pharma is re- Source: BMO Capital Markets Aggregate Deal Value markably fragmented. No single player has more than a US$ billion 10% market share in most broad market categories. 300 There is also a massive difference in the ‘cost of capital’ ROBUST M&A DISPLAYS VALUE across different players in the sector. This means there is 250 a huge variation in the ability of players to fund the long DESPITE PUSHBACK journey from idea to full market commercialization. The 200 larger profitable biopharma companies have significant cash flows, large balance sheets, and can raise low in- M&A activity is rampant in the biopharma industry. From Big 150 terest rate debt at will. Contrast this to the loss-making Pharma mega-mergers to smaller acquisitions of emerging biotech world, where access to new funding is always an startups, the life sciences industry has seen a huge amount 100 issue. Even in the latter group, there are a huge variation of deal activity in the biopharma space every year for the past in the cost of capital between startups, whose cost is very decade. 2019 saw several large M&A transactions closed or high, to pre-profit small and mid cap biotech companies 50 announced, highlighted by the BMS-Celgene, and AbbVie- that command better conditions. As a sector, the efficient Allergan mega-deals. On the biotech side, Loxo-Lily and allocation of capital and, by extension, talent and science 0 ArQule-Merck also made waves. According to BMO Capital resources is critically important, and it creates new op- 2012 2013 2014 2015 2016 2017 2018 2019 Markets data, there was nearly US$260 billion in M&A deal portunities for investors. activity for 2019. Over the past eight years, the value of bio- In short, M&A helps address some of the ecosystem’s pharma M&A deals in aggregate is US$1 trillion. GLOBAL LIFE SCIENCES M&A redundant and bureaucratic inefficiencies by helping the While high profile biotech acquisitions are often celebrated Source: Bloomberg sector better allocate the scarce value-creating resources as wins, rarely are the bigger mergers viewed favorably. Pun- over the long term. Big pharma Biotech Medtech Specialty pharma/generics dits and policymakers often claim these larger M&A deals do Another critical function of M&A is the role it plays in re- a myriad of bad things: destroy value, distract R&D groups, US$ billion plenishing big pharma’s pipelines. According to EY, there consolidate market power, take out emerging competitors, are looming patent expirations valued at US$180 billion and negatively impact drug pricing. The recent dissenting 2014 83 6 101 145 335 over the next four years. This will ultimately lead to a per- opinions on the BMS-Celgene merger from two Federal manent decline in revenue if new assets are not acquired. Trade Commission members highlighted this perspective. Big pharma therefore needs to actively pursue deals to Both were against approving the deal, because of the pos- maintain revenue lost from pending patent cliffs. 2015 86 28 26 112 252 sible negative competitive impact. With the Covid-19 driven uncertainty in valuations in the What these analyses failed to consider is the overall ecosys- first quarter of the year, it is still unclear how the rest of tem benefits of M&A activity. It is a crucially important as- 2020 will play out on the deal front. However, regardless pect that needs to be better appreciated by politicians and 2016 113 8 74 69 264 of these dynamics, the fundamentals of the biopharma policymakers in Washington. Fundamentally, large and small industry are holding up and big pharma will still need to M&A deals help catalyze a more efficient allocation of scarce deploy cash for external innovation. resources across the sector, especially over the longer term. It can be argued that the fall in valuations in Q1 presents 2017 51 20 86 22 179 According to Arda Ural, partner and life sciences sector strat- an advantageous opportunity for big pharma. However, egy and transactions leader at Ernst & Young: “There is a Christiana Goh Bardon, managing director of UBS On- myth that mergers don’t add value. We see value being creat- cology Impact Fund holds a slightly different view: “Big ed by both mega-mergers and bolt-ons. In terms of generat- 2018 124 27 30 12 194 pharma is not so much focused on the price, but on the ing shareholder value, EY research shows that mega-mergers certainty of success of the assets that they acquire. It is take up to five years to be reflected in stock appreciation, not that they are willing to buy an asset today because it whereas bolt-ons can attain that within one year. Companies is cheaper than it was yesterday. What they are waiting for 2019 240 23 47 47 357 that tend to do more acquisitions and divestitures have bet- is the critical proof of concept, which indicates that the ter capital efficiency and return on capital.” drug is going to be successful through the clinical and regulatory process and ultimately commercially success- THE TOTAL M&A VALUE OF PORTFOLIO OPTIMIZATION IN FIVE THERAPY AREAS EXCEEDS US$285 BILLION ful. They do not really want to pay less money for an un- Source: Capital IQ certain asset… The main difference in varying economic Cardiovascular/ Infectious Central nervous environments is that big pharma may have slightly bet- Oncology Inmunology metabolic disease disease system disorders ter negotiating terms should the capital markets become more difficult. “ Aggregate revenues of sub-scale assets US$14 billion US$11 billion US$3 billion US$9 billion US$23 billion Regardless, in contrast to government rhetoric, the pre- vailing view in the industry is that M&A transactions are 6.0x 4.0x 5.0x 3.0x 5.0x Potential deal multiple an essential part of a healthy ecosystem and deals will continue, albeit in a more subdued manner given the un- US$84 billion US$44 billion US$15 billion US$27 billion US$115 billion Potential asset value certainties that COVID-19 and the upcoming presidential US$285 billion election present. ■

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income. We help accomplish this across The FDA has been productive with an banks simply as product providers; they What ideas around healthcare do you the deal cycle from identifying and average of 37 annual novel drug ap- value partners that can bring the full life believe should be more prevalent in valuing the target, providing financial, provals over the last 10 years. In 2019, sciences ecosystem to them and cre- the election discourse? tax and operational due diligence, and there were 48, 20 first in-class and 21 for ate relationships. This includes assist- Drug pricing will continue to be an im- managing the end-to-end transaction rare diseases. The profile of a typical ap- ing them with everything from capital portant topic of discussion in the po- with the proven experience and deep proval is shifting from broader diseases aspects to talent development, specific litical cycle. It is a healthy discussion knowledge of the sector dynamics. to rare disease and oncology. It is the financing needs, geographic expansion to have. The movement of the market evolving nature of the business, driven plans and partnerships. J.P. Morgan has stream to more outcome-based pric- What trends are driving the life sci- by the ability to show outcomes in rare built a banking platform around the ing is a subject of discussion that is long ence business at EY? diseases that are caused predominantly ecosystem, where we not only deliver overdue. There are some low hang- In life sciences, we see five major by monogenic mutations. There are ap- specific products, but help companies ing fruit that can be addressed such as themes for 2020. First, liquidity in the proximately 7,000 rare diseases, 10% of navigate the space to help them grow drugs for the elderly and rare diseases, market is very high. There is US$1.5 tril- which are being addressed. This comes and scale. but it will be hard to build a consensus lion of liquidity available on the private at a high cost, which the payor industry I think it is also important to note the over a transformative drug pricing mod- equity side and US$1.4 trillion in the remains willing to reimburse. differences in, and ultimate resiliency of, el. Political discourse will likely turn to biopharma balance sheets. Just to put Fourth, M&A activity will continue with Peter early stage venture investing in biotech the responsiveness of federal and state Arda this in context, the Fed balance sheet emphasis on bolt-ons rather than geo- through economic downturns. Biotech governments to the COVID-19 crisis, was US$4 trillion at the beginning of graphic extensions. We can never rule is a sector that has no direct exposure and we are too early into the situation this year. Liquidity is going to be widely out mega-mergers, which will happen Meath to issues such as consumer demand to see how that plays out in the coming Ural available for asset acquisitions, innova- at a clip of one to two per year. In terms fluctuations, unemployment numbers months. How the key drug and device tion and R&D initiatives. In an EY sur- of generating shareholder value, EY re- or other macroeconomic measures.This players in the space will factor into this vey released in the last quarter of 2019, search shows that mega-mergers take is an industry driven by science, and the discussion is also uncertain, but certain- 68% of life science executives said they up to five years to be reflected in stock data underpinning that science. Invest- ly stronger private/public partnerships would expect an M&A transaction over appreciation, whereas bolt-ons can at- ment considerations will be tied to the that lead to better innovation and ulti- the next 12 months period to deploy tain that within one year. ultimate progression of that science mate preparedness will likely be a part some of that cash. Fifth and lastly, the industry is watching and its measurable results in a clinical of the dialogue. Second, there is a need for external in- the regulatory environment very closely Managing Director and Co-Head of Partner and Life Sciences Sector Strategy setting. Historically venture investing novation to supplement pharma’s reve- with impact on drug pricing and reim- Healthcare and Life Sciences and Transactions Leader in the space has therefore seen little to What goals does J.P. Morgan’s life nue that is at risk due to looming patent bursement in a US election year. The re- J.P. MORGAN no variance through cycles, and if this science division wish to achieve over ERNST & YOUNG LLP expirations valued at US$180 billion over cent COVID-19 issue is also expected to COMMERCIAL BANKING current crisis has proven anything in the the next two years? the next four years. The growth of new create uncertainty on the supply chain, space, it is that we should ultimately be We are focused on building on the products launched in the previous five clinical trials, plant inspections and investing more in certain areas for pre- dedicated ecosystem we have created The views expressed by the presenter are years is not expected to sustain the rev- overwhelming health systems shifting their own and not necessarily those of paredness and mitigation. around the life sciences community. We Ernst & Young LLP or other members of the enue decrease due to loss of exclusiv- focus to acute care needs. want to be the holistic partner for life global EY organization. ity. This same phenomenon happened What are some important consid- sciences companies to serve their needs about 10 years ago and was referred to What is your outlook on deal flow erations for emerging life sciences throughout their entire life cycle, from as the ‘patent cliff’, when most of the and M&A activity in 2020? companies? opening a bank account, to expanding products were small molecules subject There is a myth that mergers don’t For biotech companies, going from an internationally and through a potential to an immediate generic exposure. This add value. However, according to our inherently science and clinical driven IPO and beyond. We’re investing in and What themes are driving the EY Life scenario will probably repeat in 2020- recent Firepower study, we see value organization to one of manufacturing bringing solutions that go beyond tradi- Science practice and what are some 2024 but with biologics, and this time being created by both mega-mergers and sales is challenging and there are tional banking for our clients. important initiatives? the loss will be more gradual, with three and bolt-ons. Companies that tend to What are your views on the state of cultural and structural shifts that need As an example of this, J.P. Morgan’s ac- Ernst & Young LLP (EY US) is increas- to four biosimilars entering the market do more acquisitions and divestitures the industry and how does J.P. Mor- to happen. Companies need to prepare quisition of InstaMed will expand our ingly focused on life sciences and de- segment. Today, big pharma has the have better capital efficiency and return gan help facilitate the growth of com- for this earlier and complicating that capabilities in healthcare payments, of- veloping and deploying our services need to supplement their top line. Data on capital. Over the last decade the in- panies bringing life changing thera- fact is that the manufacturing chain is fering healthcare providers, payers and according to our clients’ capital growth shows that biotech companies are more dustry has seen one or two every year. pies to market? complex. Identifying the most efficient consumers an end-to-end payments so- agenda and industry needs. In terms of successful in getting Phase 2 and Phase While the asset value increased, the vol- Life Sciences has never been as excit- third party providers to collaborate with lution. We continue to evaluate oppor- advising on organic growth, EY US pro- 3 assets to approval, while established ume of transactions was down 14% year ing an area as it is today. Technologi- is very important. On the sales side, it is tunities to bring our clients more value vides strategy and advisory services, biopharma companies continue to be over year. Now the industry is compet- cal advancement is robust and the rate equally challenging. The sales function as we double down on our commitment and in terms of inorganic growth, our productive in early stages. There will ing for fewer assets in oncology, cell and of novel technologies developed and is moving away from classic direct sales to the broader healthcare sector and focus is on maximizing value creation in be an array of acquisition opportunities gene therapy, rare diseases and cardiol- commercialized is at record levels. to more specialized value chain mod- serving the needs of companies in the mergers, acquisitions and divestitures. and established biopharma companies ogy at higher multiples. With the uncer- That manifests itself in company for- els. Instead of selling to a geography, value chain. We help our clients to generate capital need to take advantage of external in- tainty in valuations in the first quarter of mation and in capital markets, primar- you are selling to an ecosystem that is Our goal is for companies of every size, in a multitude of ways, including: in- novation at an increasing rate. 2020, it is to be seen how the rest of the ily through high level venture activity. around the disease you are trying to even very early stage companies, to creasing the top line through synergies Third, we are transitioning from the bio- year will shake up. Regardless of these The amount of money being raised by solve. With value based medicine and view us as the first place they would go as predicated by the deal hypothesis logics era to an individualized therapy dynamics, it appears the fundamentals healthcare-focused funds is at all-time outcome based payments, the sales to overcome any challenges that they and addressing a host of elements of era, where rare diseases, cell and gene of the biopharma industry necessitate highs. Companies are not looking for model is changing. have in unleashing their full potential. ■ cost to improve our clients’ operating therapies and oncology are a big focus. a healthy dose of external innovation. ■

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What are the most influential market more difficult for us to find investments dynamics in defining the direction of that we like. This has the affected the To List or Signet’s Fund IV? pace at which we are investing. It slows it Fund IV is geared towards investing down, because it takes longer to nego- Not to List growth capital toward commercial stage tiate deals, and sometimes transactions businesses that produce life sciences fail because we are unable to bridge the products. We invest in service providers, divide. Thus, we have to negotiate more such as CDMOs, or it can be companies deals to get to the same number of in- that market the products themselves. vestments. Twenty years ago, we might have invest- ed in a generic drug company that was Can you comment on the financing producing tablets, where today we are environment for consumer healthcare BIOTECH SEEKS TO more focused on more complex versions today? of generics or therapeutic products that Interest rates are currently at historic CONTINUE IPO HOT are embodying technologies that fulfill lows. So when you think about all of the STREAK unmet needs. money that has been committed to pri- James vate equity funds globally in the last few How can private equity help drive years, there is increasing competition for value for companies in the generics investments. Because of this large pool Gale space where margins are slim? of money, expected rates of return have The essence of a successful generics decreased. Consequently, multiples strategy is to lower cost of goods as for certain businesses have increased. much as possible, because you can’t In today’s environment, we are seeing dictate price. The market price of drugs much of the healthcare investments are During the nineties and early 2000s, The investment firm Jefferies reported Schrödinger,all originally filed to raise gravitates toward the lowest cost pro- being channeled towards the newer, in- it was common to have multiple quar- in January that 51 biotech companies US$100 million from their initial public ducer. There are several ways of reduc- novative areas of treatment like gene ters without a biotech company going raised a total of US$5.6 billion in 2019, offerings. But as their offering dates ing costs, which we try to help manage- therapy, and certain expensive cancer public. That has not been the case over a tick down from the 67 that gener- neared, all four amended their IPO es- Founding Partner and Managing Director ment teams address. immunotherapies. the course of the last ten years, as no ated US$6.7 billion a year prior, but timates to about US$180 million. When SIGNET HEALTHCARE PARTNERS There are two trends that I believe will quarter has come and gone without nonetheless another historically strong the bell rang, the results exceeded occur as a result of decreasing costs. In terms of Signet’s global investment a biotech IPO. During the past two year. Their shares gained an average of even those increased expectations. One will be consolidation within the strategy, what areas of opportunity years in particular, the public markets 49%in 2019, and Jefferies analysts said Each had raised more than US$200 industry. That means taking companies does the company see outside of the have provided biotech with important that they expected a ‘healthy IPO ap- million. The firms are all developing hot that are marginally profitable and com- US? liquidity to push forward drug devel- petite for at least the first half of the technologies or tackling popular drug bining them to leverage the overhead While Signet’s focus is on the US market, opment programs. Heading into 2020, year,’ before the approach of the No- targets. Beam is developing CRISPR across a bigger portfolio of products we invest quite a bit in Europe and India the XBI, an exchange traded fund that vember election. base-editing therapies for rare genetic and sales. Secondly, finding and im- as well. With regard to the finished prod- closely replicates the performance To start 2020, four companies: Beam diseases. Black Diamond, Revolution, plementing technologies that reduce uct markets, Europe has gone through of the biotechnology segment of the Therapeutics, Black Diamond Thera- and Schrödinger are pursuing small- the cost of goods; this could done be a period of retrenchment over the last U.S. market, was near all time highs. peutics, Revolution Medicines and molecule drugs for cancer. through continuous manufacturing or 20 years and is an interesting area right new ways of developing API’s. now. Because of rising consumer in- come, certain countries in emerging What is your perception on valuations markets are growing quite rapidly and Signet Healthcare Partners is across the sectors Signet is focused are also interesting. The US, on the oth- er hand, is becoming a more uncertain a provider of growth capital to on? In both the generic pharmaceutical in- marketplace for the moment, except in innovative healthcare companies dustry and specialty pharmaceuticals, new therapies or novel medications, and around the world the multiples have generally declined. so needs to be evaluated selectively. Ironically, the multiples for CDMOs have As far as CDMOs are concerned, the US gone up considerably over historical is still the center of innovation and drug levels. They have effectively inverted, in research. As a result, US domestic CD- other words. When making investments, MOs are of great interest. There are also if there are high multiples and business- a number of good companies in Europe es are overpriced, we have to decide and India in the CDMO space. Signet is whether we are able to make a return active in trying to invest in these com- at the valuation being proposed. If not, panies. However, while there still is an we have to find ways to structure around interesting market for European innova- these high multiples. In particular, the tion, the US still tends to dominate as to high multiples of CDMOs have made it the scale of innovative activity. ■

USA BIOPHARMACEUTICALS 2020 36 Industry Explorations Global Business Reports 37 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

BIOTECH POST-IPO STOCK PERFORMANCE BY ANNUAL COHORT Source: BMO Capital Markets Post IPO Christiana Share Performance 400% Goh Bardon Top 10th

350% 75th

Median

300% 25th Managing Director

Bottom 10th UBS ONCOLOGY IMPACT FUND MANAGED BY MPM CAPITAL Portfolio Manager 250% BURRAGE CAPITAL

200% Across the different funds, what is the portfolio con- We have had a very healthy biotech investing environment struction, and what areas do you find most appealing in since 2011. Our companies have seen record amounts of fi- 150% terms of capital allocation? nancing. If we enter a period of economic slowdown of the We continue to believe oncology is one of the most exciting capital markets, our companies are well-financed to continue areas of drug development. The level of innovation in oncol- to move forward with clinical trial work for the next few years. 100% ogy is at an all-time high. We are developing treatments that In general big pharma is not so much focused on the price, transform the outcome of patients, and sometimes even cure but on the certainty of success of the assets that they acquire. a patient of their cancer. It is not that they are willing to buy an asset today, because 50% Targeted therapeutics continues to be a hot area of drug it is cheaper than it was yesterday. What they are waiting for development in cancer. It is an area where we can develop is the critical proof of concept, which indicates that the drug personalized therapies for patients by using drugs that ad- is going to be successful through the clinical and regulatory 0 dress their specific mutations of the patients tumor. From process and ultimately commercially successful. that perspective, I think the personalized medicine approach can improve efficacy rates, streamline clinical trials, and also Are there any pockets of value that are being created as -50% minimize exposure of the drug by only treating patients who a result of the market pullback? are known to be potential responders. It is one of the most We see several exciting opportunities and interesting valu- exciting and fruitful areas of oncology drug development. ations because of the pullback. I foresee a strong snapback -100% after the world has recovered from coronavirus. I do not think 2013 2014 2015 2016 2017 2018 2019 2020 How does the long timeline for drug development affect coronavirus has fundamentally impaired our company’s abil- your time horizon when it comes to investing? ity to discover drugs, take them through clinical trials and the Of course, a big part of this IPO suc- crisis of 2008-09, it appears to be less with the FDA and EMEA to navigate One of the other reasons we like oncology is because you can regulatory process. Biotech is, if anything, more attractive cess has been the nature of the broader sensitive to macro economic swings their drugs through a complex clinical achieve your proof of concept relatively early. In oncology, now than it has ever been, because we are back to two-year funding environment. The amount of than other sectors. During the 2008-09 trial and approve process. An aging you can assess whether a drug works early in the phase 1 trial. lows. private capital going into these com- recession, the NASDAQ biotechnology demographic means that, as the popu- You can do so by administering the drug to patients known panies has increased over the last few index (NBI) outperformed the S&P 500, lation ages world-wide, there are grow- to have a specifically targeted mutation. If your drug hits that What would be your policy prescription for fostering an years, almost doubling at both the gaining 1% versus the 23.0% downward ing medical needs and hence a mar- mutation, within ten patients of study, you can determine if innovative environment moving forward? median and the average, the IPO of- correction in the S&P. Likewise, dur- ketplace for these therapeutics. Short your drug is working. From that perspective, you can gener- The most important thing is strong support for fundamental ferings themselves are also up 20 to ing the 2001 recession, NBI was down term disruptions aside, the long term ate an early proof of concept. science in this country. It is imperative, not only for the health 30% over that same period. And these 0.1%, while the S&P had fallen 8.9%. health of the industry is strong. Biotech of the country, but also for the health of the economic sec- two things, combined with a more ac- Q1 2020 has posed similar challenges is, if anything, more attractive now than The market has been wildly volatile over the last two tor. Biotechnology is one of the fastest-growing sectors in commodating environment, have led to public markets. However, biotech it has ever been, because we are back weeks. Are there any steps you are taking to de-risk, the world and a sector where the US completely dominates. to post IPO valuations that have never remains resilient. “Biotech will create to two-year lows,” said Christiana Goh or are you still standing by your outlook going into the I continue to applaud the FDA and their outstanding work. been so high in the history of the indus- many new drugs that will transform the Bardon managing director of UBS On- year? They have continued to be efficient and collaborative with try. Median post IPO valuations in 2019 outcome of patients. The underlying cology Impact Fund. We have undergone a tremendous correction over Q1 with our industry. were north of US$400 million, based fundamentals of innovation, regulatory While we are all trying to solve CO- coronavirus and we feel biotech valuations to be attractive. on Evercore ISI figures. Five years ago, environment and demographics con- VID-19, all other diseases will not go Our long-term perspective on this industry has not changed Over the next two years, what is your vision? only the most premium companies tinue to be strong. Innovation is at an away and there is still a huge need for however. We think that the industry will invent many drugs I think that biotech is on a long term bull run. Biotech will were able to achieve that. all-time high and we are just entering innovative, transformative platforms that will transform patients lives. create many new drugs that will transform the outcome of pa- In light of the COVID-19 virus, it is fair the new era of novel therapeutics such and therapies. That is why it is likely tients. The underlying fundamentals of innovation, regulatory to question if these rich valuations are as gene and cell therapy. A collabora- biotech will continue to press forward Given the sudden stop in economic activity, do you see environment and demographics continue to be strong. Inno- sustainable. However, in looking at bio- tive regulatory environment means that with IPOs even through this very diffi- markets creating discounts which will expedite potential vation is at an all-time high and we are just entering the new tech’s performance during the financial our companies are working efficiently cult and uncertain time. ■ M&A in the sector? era of novel therapeutics such as gene and cell therapy. ■

USA BIOPHARMACEUTICALS 2020 38 Industry Explorations Global Business Reports 39 USA BIOPHARMACEUTICALS 2020 GBR • Industry Explorations • USA BIOPHARMACEUTICALS 2020

ACCELERATING PIPELINES: DRUG DISCOVERY AND DEVELOPMENT

» The most important thing is strong support for fundamental science in this country. We continue to need healthy financial support for the NIH and scientific and clinical research. It is imperative not only for the health of the country, but also for the health of the economy. I would remind an incoming president that biotechnology is one of the fastest- growing sectors in the world and a sector where the US completely dominates. There is no other country in the world that can compete with our research and drug development capabilities. We are creating the most exciting drugs worldwide. I continue to applaud the FDA and their outstanding work. They have continued to be efficient and collaborative with our industry. «

- Christiana Goh Bardon, Managing Director, UBS Oncology Impact Fund Managed by MPM Capital, Portfolio Manager, Burrage Capital

Image courtesy of Goldfinch Bio FACTSHEET Global Business Reports Industry Explorations

TOP 10 US BIOPHARMACEUTICAL COMPANIES Drug BASED ON REVENUE Development Source: GBR and Intelligent Observation. Pfizer Full-year revenues 2019: $51.75 billion Discovery Full-year revenues 2018: $53.65 billion Better Data. % revenue growth year-on-year: -4% 3 FY 2019 EPS: $2.95 %EPS growth year-on-year: Novartis 1% Full-year revenues 2019: $47.45 billion Full-year revenues 2018: $44.75 billion % revenue growth year-on-year: 9% 1 FY 2019 EPS: $5.28 We use AI to see, %EPS growth year-on-year: 2 12% hear and confirm Roche Full-year revenues 2019: $50 billion how patients take & Full-year revenues 2018: $45.31 billion BIG PHARMA FAVORS % revenue growth year-on-year: 11% COLLABORATION respond to treatment. FY 2019 EPS: $20.77 %EPS growth year-on-year: 13% 6 Johnson & Johnson Full-year revenues 2019: $42.19 billion Merck & Co Full-year revenues 2018: $40.73 billion % revenue growth year-on-year: Full-year revenues 2019: $46.84 billion 3.6% Full-year revenues 2018: $42.29 billion FY 2019 EPS: $5.63 % revenue growth year-on-year: 11% %EPS growth year-on-year: Unchanged FY 2019 EPS: $3.81 Manage Adherence & Engagement %EPS growth year-on-year: 64% 5 4 The challenges facing the pharmaceuti- GlaxoSmithKline cal industry a decade ago helped put Decrease Risk Full-year revenues 2019: $43.54 billion in motion a fundamental transformation Full-year revenues 2018: $39.65 billion in the structure of the biopharmaceuti- % revenue growth year-on-year: 8% cal industry. It was getting more expen- FY 2019 EPS: $1.46e %EPS growth year-on-year: 4% 7 sive to develop new drugs, competition Abbvie from generics was increasing, and in- Full-year revenues 2019: Measure Response $33.27 billion vestors had come to expect high returns Full-year revenues 2018: $32.75 billion on capital. Furthermore, complaints % revenue growth year-on-year: 1.6% FY 2019 EPS: $5.28 from consumers and payors (including Bristol-Myers Squibb %EPS growth year-on-year: 44.3% the federal government) about exces- Full-year revenues 2019: $26.15 billion sive drug prices were becoming more Working with the majority of Top-20 global Full-year revenues 2018: $22.56 billion strident, and the number of new drugs pharmaceutical and biotech companies. % revenue growth year-on-year: 16% reaching the market each year was be- FY 2019 EPS: $4.69 low expectations. There was no single %EPS growth year-on-year: 18% solution to all of these problems, but 8 one major change would address most AiCure Headquarters 10 of them: Improve the effectiveness of Sanofi 9 AstraZeneca drug discovery and development. 19 W 24th St., New York, NY 10010 Full-year revenues 2019: $27.77 billion Full-year revenues 2019: $23.57 billion Around the same time, small emerg- Full-year revenues 2018: (800) 570-0448 | [email protected] | www.aicure.com $26.64 billion Full-year revenues 2018: $20.49 billion ing biotech companies faced a difficult % revenue growth year-on-year: 4.1% % revenue growth year-on-year: 15% IPO environment and were in need of © 2020 AiCure, All Rights Reserved. These materials may not be modified or reproduced in FY 2019 EPS: $2.51 FY 2019 EPS: $3.50 whole or in part without the express written consent of AiCure, LLC. %EPS growth year-on-year: -67% %EPS growth year-on-year: 1% partnerships to continue progressing their development programs. Accord- 45>> USA BIOPHARMACEUTICALS 2020 42 Industry Explorations Global Business Reports 43 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports Industry Explorations

Daniel J. » O’Connor Pfizer has evolved as a partner in recent years, and we recognize that breakthroughs can come President & CEO from many different places. We also recognize ONCOSEC MEDICAL INCORPORATED that breakthroughs are built by pairing capabilities from different partnerships and working together towards a shared overarching How is OncoSec’s TAVO™ helping the checkpoint resistant metastatic melano- vision, such as what we have done in gene ma (KEYNOTE-695) and a phase 2 study and the two ongoing KEYNOTE clinical patient population that is seeing no therapy. We have learned from the past that positive result from using Keytruda in metastatic triple negative breast can- programs is a prime example of that. and Opdivo? cer (KEYNOTE-890). Beyond Merck, we recently entered into synergistic relationships are often the most Checkpoint therapies, like KEYTRU- The pivotal KEYNOTE-695 study is a a strategic partnership with China Grand powerful, as some products on the market today DA® (pembrolizumab) and OPDIVO® multicenter, open-label, single-arm, Pharmaceutical and Healthcare Holdings would not have been the breakthroughs that (nivolumab), have been highly success- non-comparative trial evaluating TAVO (CGP), and its U.S. affiliate, Sirtex Medi- they are without the collaborative nature of the ful for some patients, but not the major- plus EP and KEYTRUDA combination cal US Holdings (Sirtex). ity. In fact, about 70% of patients who therapy in approximately 100 patients partnerships from where they emerged. receive checkpoint therapy do not see with unresectable or metastatic mela- How do you view the effectiveness of their tumors go away. Those tumors lack noma who are progressing or have pro- business incentive programs in New essential immune elements that enable gressed on KEYTRUDA or OPDIVO. To Jersey? checkpoint therapies to be effective. date, the response rates from this study I have been a very vocal supporter of They are metaphorically referred to as have far exceeded the single digit re- the New Jersey Technology Business - Doug Giordano, ‘cold’ tumors – while ‘hot’ tumors are sponse rates expected with KEYTRUDA Tax (NOL) program. It allows for your Senior VP of Business Development, likely to receive a benefit from anti-PD-1 monotherapy in this late-stage check- operating losses and your research and Pfizer checkpoint therapies. point refractory ‘salvage’ setting. The development tax credits to be sold to a OncoSec’s lead product candidate, KEYNOTE-695 study has been granted profitable company. That means we can TAVO™ (tavokinogene telseplasmid), is Fast Track and Orphan Drug designa- receive revenue without selling stock administered using our proprietary elec- tions by the FDA. OncoSec expects to or licensing our technology. OncoSec troporation gene delivery system (EP) complete enrollment in KEYNOTE-695in received approximately US$885,000 in and designed to help turn ‘cold’ tumors 2020 and submit a biologics license ap- non-dilutive capital through the NOL « ‘hot’. TAVO has demonstrated anti-tu- plication (BLA) filing as soon as possible program for the 2019 year. mor activity with whole body (abscopal) thereafter. effect in metastatic melanoma and four The KEYNOTE-890 study is a phase 2, What objectives is OncoSec seeking <<43 other cancer types both as a monother- multicenter, open-label, single-arm, to accomplish over the next year? ing to Robert Coughlin, president and CEO of MassBio: apy and in combination with anti-PD-1 non-comparative study evaluating TAVO 2020 is a break-out year for OncoSec. “We needed to work with big pharma companies to con- checkpoint inhibitors. plus EP and KEYTRUDA combination With the US$30 million investment from vince them that the day and age of having campuses that TAVO is DNA-based interleukin-12 (IL- therapy in approximately 25 patients CGP and Sirtex, we now have the re- do high throughput screenings were not going to create 12), a hormone-like messenger, which fa- with inoperable locally advanced or met- sources we need to drive both our TAVO enough blockbuster drugs fast enough to overcome the cilitates communication between cells of astatic triple negative breast cancer (mT- KEYNOTE clinical programs to the finish patent cliff that they were facing. We had a few hundred the immune system to signal immune ac- NBC). In December 2019, OncoSec pre- line. We expect to complete enrollment ‘baby biotech companies’ that were not going to be able tivation and inflammation. TAVO is ad- sented interim data of 28.5% objective in the pivotal KEYNOTE-695 study this to have an IPO. How do you invent a drug if you are a ministered directly into the tumor using response rate (ORR) at the San Antonio year and will then submit our BLA fil- biotech company, when the old model was to come out of EP, which employs a series of momentary Breast Cancer Symposium (SABCS). This ing for FDA review. The KEYNOTE-890 a world-class academic center, license to entrepreneurs, energy pulses. Those pulses increase the study is now fully enrolled, and OncoSec study in metastatic triple negative breast raise VC money and then go public? We had to think of permeability of the cell membrane and expects to expand its TNBC clinical pro- cancer (TNBC) is already fully enrolled a new model and we came up with the concept of exter- facilitate uptake of IL-12 coded DNA into gram with Merck in 2020. and we’re looking forward to expanding nal innovation, whereby big pharma would slow down on cells. This non-invasive, non-physical our relationship with Merck in TNBC this campus development and start doing licensing deals, ac- method is easy to perform and avoids What are some of the key partner- year. We’re also continuing to advance quisitions and outsource their innovation to smaller early systemic toxicity issues historically asso- ships that OncoSec has and how will our novel visceral lesion applicator (VLA) stage companies” ciated with the use of intravenous cancer they help spur growth? program designed to reach and target Today, this symbiosis is an accepted part of the drug de- immunotherapies. OncoSec has established several world deep internal tumors with our EP tech- velopment process and both big pharma and emerging OncoSec is currently running two KEY- class strategic partnerships that we are nology. This is truly a groundbreaking biotech companies actively pursue partnerships and col- NOTE clinical programs in partnership leveraging to enhance our pipeline op- program that has the potential to revolu- laboration. This is particularly true for high risk, novel tar- with Merck – a pivotal study in late-stage portunities. Our relationship with Merck tionize cancer immunotherapy. ■ gets. Big pharma tends to prefer targets that are better

USA BIOPHARMACEUTICALS 2020 44 Industry Explorations Global Business Reports 45 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

Tony Johnson

CEO validated, which typically means lower required investment on the notion that scientific and global health challenges are and shorter development timelines. Where big pharma tends too complex for any one player in the healthcare ecosystem GOLDFINCH BIO to shine is in terms of identifying compounds and screening. to solve alone. Since there is still an enormous amount of value creation that “Pfizer has evolved as a partner in recent years, and we rec- comes later in the pipeline as a candidate approaches com- ognize that breakthroughs can come from many different mercialization, pharma companies tend not to spend so much places. We also recognize that breakthroughs are built by time on discovery and earlier-stage research. pairing capabilities from different partnerships and working Instead they turn to companies pursuing great science and together towards a shared overarching vision, such as what How does Goldfinch Bio translate the recent break- Can you contrast the traditional treatment of dialysis partner and collaborate in the hope that the science will de- we have done in gene therapy. We have learned from the throughs in genetics and biology into new therapies? with the potential paradigm shift Goldfinch Bio is offer- velop into new medicines that bring about lifestyle improve- past that synergistic relationships are often the most power- The premise for Goldfinch Bio is that we can leverage new ad- ing? ments for patients. ful, as some products on the market today would not have vances in our understanding of kidney disease genetics and Since kidney transplants are not readily available, most pa- Johnson & Johnson, for example, created an innovation arm been the breakthroughs that they are without the collabora- pathophysiological mechanisms to identify novel treatments tients are dependent on dialysis. The latter ties the patient to to specifically accelerate early-stage innovation worldwide, tive nature of the partnerships from where they emerged,” for patients with diseases of the kidney. We have established a machine for several hours a day, usually three days a week and through this channel provide scientists and entrepre- said Doug Giordano, senior VP of business development at the kidney genome atlas and the human biology platform as which can significantly impede a normal working life. In con- neurs with access to internal experts who can facilitate collab- Pfizer. an important source of novel therapeutic targets. trast, at Goldfinch Bio we are developing a disease modifying orations across the pharmaceutical sector. Similarly, Pfizer has To point to an example of the new collaborative model, Gold- The kidney genome atlas built by Goldfinch Bio (KGA 1.0) is therapy for patients whose FSGS or diabetic nephropathy is its Center For Therapeutic Collaboration, which was founded finch Bio, is working with Gilead to expand its kidney genome focused on patients with proteinuria and a large subset of driven by the TRPC5-RAC1 pathway and for which our TRPC5 atlas, which identifies and validates targets for diabetic kid- these patients have a disease called focal segmental glo- inhibitor, GFB-887 should be highly efficacious. This therapy ney disease. The deal will allow Goldfinch to expand its data- merulosclerosis (FSGS). This is an orphan indication for which aims to delay or prevent kidney failure and improve the qual- base by an order of tenfold, to tens of thousands of patients. there is no approved therapy to date. Our KGA 1.0 has just ity of life for these patients. This personalized approach will “This will allow us to have statistical power and to become under 23,000 participants and is proprietary to Goldfinch Bio. enable patient selection earlier in the disease process based the world leaders in the kidney area, leveraging human ge- We have undertaken whole genome sequencing and coupled on a simple urine test. If effective, reducing dependence on netics to meet novel drug targets,” said Tony Johnson, Gold- these data with clinical data from electronic medical records kidney dialysis could have a substantial impact on resource finch Bio’s CEO. in the entire cohort. In addition, expression data have been allocation for patients who progressed to end stage kidney The deal has US$2 billion potential for Goldfinch, and for Gil- generated from kidney tissue biopsies in a subset of patients. failure. ead, it positions them to use Goldfinch as the kidney arm of Together, these data enable the identification of novel human their business. genetic driven targets. In 2019 you announced partnership with Gilead Sciences A final factor driving collaboration is that, although the ma- The human biology platform is applied to achieve human and Takeda. What is the importance of these collabora- jority of biomedical innovation is developed by emerging validation of these potential genetic targets. In our labora- tions and potential they hold for bringing novel treat- biopharma companies today, many have never marketed a tories we have established human stem cell-derived kidney ments? therapy before. Over time, these companies either success- podocytes, a cell type which protects against proteinuria, Both are very important. The Gilead deal has allowed us to fully bring their products to market or, in most cases, their and human stem cell-derived kidney organoids. We grow kid- expand the kidney genome atlas from KGA 1.0 (FSGS) to assets or whole company are acquired by big pharma. This is ney organoids in the lab in vitro and transplant them under KGA 2.0. The latter is focused on diabetic nephropathy with an area of the business that greatly favors revenue generat- the kidney capsule of rodents in vivo. The advantage is that 12 million patients in the US alone and 150 million patients ing big pharma, because they have the budget and exper- they become vascularized together with the rodent kidney. worldwide. We are expanding the kidney genome atlas to tise in commercialization and marketing. Figures from Fierce This allows us to do PK-PD experiments i.e. dose the animals 40 thousand diabetics with nephropathy and 40 thousand Pharma show the marketing spend on AbbVie’s anti-TNF and measure the effects of the drug on the transplanted hu- diabetics without it. This will facilitate sufficient statistical monoclonal antibody, Humira, was US$577.3 million in 2019 man stem cell-derived kidney. GFB-887, our development power to identify novel human genetic-driven drug targets. alone. This figure is well ahead of its competitors, but Pfizer lead transient receptor potential canonical 5 (TRPC5) inhibi- For Goldfinch Bio, the Gilead partnership provided capital to spent US$202.9 million marketing its JAK inhibitor Xeljanz for tor for FSGS and diabetic nephropathy was protective against progress the pipeline and facilitated establishing ourselves rheumatoid arthritis. This is not something smaller compa- damage caused by upregulation of the TRPC5-Rac1 pathway as leaders in the kidney therapeutic area, leveraging human nies have the wherewithal to do. in the transplanted human stem cell-derived podocyte and genomics and clinical data to identify novel drug targets. If Overall, collaboration between big pharma and emerging kidney. Our approach is unique because we measure treat- just five targets from this partnership are marketed, there is biotech has been a force for good for all players involved, ment effects in a physiological setting. Finding targets from close to a US$2 billion potential for Goldfinch Bio. Our novel but most of all for sick patients who now have access to life our genome atlas, validating them with this approach prior to technology allows Gilead to discover, develop and commer- changing drugs as a result of an expansion in therapeutic fo- establishing a drug discovery program is a cost-efficient way cialize therapeutics for diseases of the kidney. ■ cus and risk taking that otherwise would not have occurred to confirm that our drug discoveries are relevant to kidney under the previous model. ■ patients.

USA BIOPHARMACEUTICALS 2020 46 Industry Explorations Global Business Reports 47 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

Advancing How has the progression been from virtual company you founded to where » you are today? It has been a great journey. We decided to start by repurposing a drug that had Oncology already been in a clinic. We then transitioned to figure out how to make our own drugs. From 2008 to today, we have built a robust pipeline and made our first deal Our R&D approach is a with our first compound – a partnering deal with Exelixis. We developed a Wnt functional genomics approach. pathway inhibitor from scratch and since the development of the molecule, we have We treat tumor cells with the been working to bring it up through the ranks. We received the bulk of our funding miRNAs on an individual basis from the SBIR program. As we are building our company through the pipeline and submitting grants, they are getting vetted by scientists and the NCI is providing the to see whether they go into funding for it, which is important because it allows us to target non traditional path- apoptosis or that you can inhibit ways. Over the years, we have developed a compound called SST215; we published proliferation. This is already the a paper showing that it had better efficacy and less toxicity than the best attempt to date for a Wnt inhibitor. first indication of the potential function of the particular INNOVATIVE What medical need are you addressing with your Notch and Wnt pathway? THERAPIES MAKE BIG miRNA. This approach is unique Anthony Oncology is the biggest target for us. We do not focus specifically on any cancer compared to the approach of type, because the targets we are going after are fundamental for the cancer stem STRIDES cell populations. What you can find is that Notch and Wnt are re-activated in most other miRNA companies in the Capobianco cancers. When we get something to clinical stage, we want to evaluate that inhibitor field as what they started off in any cancer that will benefit from it. with was descriptive differential expression profiling. In a disease In terms of advancing the development to the clinical stage, what is your situation miRNAs can be up or method? For each one of our assets, our business model is that we do the discovery, we opti- down regulated. If you analyze mize the scaffold, secure the IP around that scaffold, and pick the clinical candidate the RNA from disease samples that we are most comfortable with. We want to bring each one of those candidates Founder and President versus normal samples on a as close to IND as we can, as we start to look for partners. We do not want to be a STEMSYNERGY THERAPEUTICS clinical phase company at this stage of the game. We are happy to have partner- Few things in life are more frightening the use of checkpoint inhibitors; drugs microchip with miRNAs, you ships at the IND level and let the clinical stage companies then drive it through the than finding out a loved one or close that unleash a powerful immune sys- can check for up and down clinic. We think this is the best way to target pathways that might not be on the radar friend has been diagnosed with can- tem attack on cancer cells. The results regulation. What you do not have of big pharma and we can de-risk them by scientific review in the SBIR program. cer. Fortunately, thanks to medical and helped usher in a new era for cancer im- with differential expression is therapeutic advances, the probability of munotherapy. Innovations in this area What is SSTI’s financing strategy moving forward? a cancer diagnosis becoming a death are transformational, as the therapies the spatial temporal information The fundamental part of our strategy has been making sure that we are funding sentence is far less likely than it once purpose, in metaphorical terms, is to and you do not know if the up or these projects through the SBIR program. If we bring on an investor that wants to was. Each year, the American Cancer disable the brakes that cancer cells use down regulation of the miRNA buy into our strategy, we need US$10 million from an active partner to help grow Society estimates the number of new to fend off an attack on them by the im- is a result or a cause of a defect. out our programs for everyone’s benefit. It keeps our equity solid and does not cancer cases and deaths that will oc- mune system T cells. It gives hope that dilute it out. We are four scientists realizing our dream, taking our basic science cur in the United States. For nearly 30 even stage IV metastatic cancers can be If you have a non-bias functional knowledge and translating it directly into drugs that help heal people. years, the trend towards fewer cancer halted and managed more like a chronic genomics approach, you deaths has been moving in a positive di- disease. immediately have information What are your thoughts on how to boost entrepreneurial ecosystems around rection, with less cases of mortality year Although checkpoint therapies like KEY- on the potential function of the System Synergy Therapeutics, universities to create more spinoff companies? after year. In their latest report, Cancer TRUDA and OPDIVO have been highly You can fund an academic lab, but there is a gap in getting from the lab to some- Inc. (SSTI) is a biotechnology statistics 2020, data demonstrates that successful for some patients, the major- miRNA. thing that industry is truly interested in. Getting the funding necessary to achieve since peaking in 1991, the death rate as- ity experiences no positive response. In company focused on discovering this needs to go beyond the academic grant system. What the universities fail to sociated with cancer declined by 29%, fact, about 70% of patients who receive drugs that target biomolecules do is identify how to get investment philanthropy into those young companies. If which translates to 2.9 million fewer can- checkpoint therapy do not see their tu- and cellular processes you couple that with a cancer center, you should be able to do the biochemistry - Roel Schaapveld, cer deaths. mors go away. This should not detract fundamental to cancer of your pathway, and drug screen all the way to clinical trial, because you pump it Contributing to the decline have been from the marvel of these drugs. Many CEO, back into universities. If it is done right and has phase one trial documents and the innovations including targeted thera- scientists believe checkpoints do not InteRNA entire infrastructure for IND, it would allow for efficient progression. The problem pies and immunotherapies that have need to be replaced, but rather aug- Technologies is finding that US$2-3 million per project that you need in excess of an SBIR grant. played a key role, alongside efforts mented with new drugs that can further to reduce behaviors associated with cajole the immune system into fighting What goals does SSTI with to achieve over the next 18 months? cancer risk such as smoking, as well cancer. This has led to an unprecedent- I would like to have two compounds in IND. Financing is our biggest hurdle, and as various medical innovations, such ed amount of clinical research combin- « we are working to exploit all possible mechanisms out there. We want to get our as early screenings. The 2010s started ing checkpoints with other medicines to pipeline drug candidates in front of those who want to buy in, either pharma part- with clinical trial results centered on try to find a magic bullet to treat cancer. nerships of venture capital financing. We are ready to make a difference. ■ 50>> USA BIOPHARMACEUTICALS 2020 48 Industry Explorations Global Business Reports 49 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

IMMUNOTHERAPY DISPLAYS ITS PROMISE Source: The Pharmaceutical Journal Spiro

T-cell recognises suspicious antigens Rombotis

Receptor Antigen

T-cell Tumour cell

CEO CYCLACEL PHARMACEUTICALS

PD-1 PD-L1 What was the scientific discovery that drove the creation Following spindle formation the two daughter cells pull apart of Cyclacel? and reorganize as two separate cells with their own nuclei at When PD-1 sees PD-L1, T-cell moves along and tumour proliferates Sir David Lane PhD founded the company in 1996, which their core. CYC140 acts by an anti-mitotic mechanism in can- stemmed from his discovery of the p53 gene, which is dys- cer cells by interfering with their division, causing multipolar regulated in most people with cancer. In 2001, the Nobel spindles or incomplete mitosis resulting in the destruction of Prize for Medicine was awarded for the discovery of cyclin cancer cells. dependent kinases (CDK), enzyme drug targets functioning downstream of p53. We became interested in harnessing the Cyclacel has had clinical success in treating both solid and T-cell Tumour cell potential of this new class of drugs, called CDK inhibitors, to liquid cancers, like leukemia. Can you tell us about the overcome cancer resistance. results in both areas? This problem is different to the cancer resistance observed We have strong preclinical and now early clinical evidence with chemotherapy, as it is caused by genetics gone haywire. that fadraciclib works in both liquid and solid tumors, which Genetic resistance occurs as cancer cells and their daughter is a rare occurrence. Fadraciclib has shown confirmed partial cells become smarter, learn how to escape drug effects, and response and prolonged stable disease, as a single agent, in become unresponsive to therapy, leading to treatment fail- heavily pretreated patients with advanced cancers referred ure and mortality. Prof. Lane’s idea was to take advantage of for treatment with first-in-human, investigational drugs. the body’s own defenses and, in particular, a process of dis- These observations occurred mostly in patients with in- Antibody posing useless cells called apoptosis. This molecular machin- creased levels of MCL1 and/or cyclin E supporting the drug’s ery is defective in people with cancer, which enables tumors mechanism of action. When PD-1 cannot see PD-L1, T-cell goes in for the kill to escape and multiply out of control. The goal of treatment In liquid cancers clinical data are coming mainly from two with CDK inhibitors is to reverse this blockade and enable types of leukemia – chronic lymphocytic leukemia (CLL) and <<48 apoptosis in cancer cells. acute myeloid leukemia (AML). In both of these leukemias we One example is Oncosec’s TAVO that Another company working on the de- vene and block the transcription of a We hypothesized that if we could lower the levels of these are treating patients with a combination of fadraciclib and is being paired with Merk’s Keytruda in velopment of a drug to be used in com- cancer cell to teach the daughter cells anti-apoptotic proteins, such as MCL1 or cyclin E, with small the approved drug, venetoclax, a BCL2 inhibitor. clinical trials. According to CEO Daniel bination is Cyclacel. It is interested in to escape the effect of the drug. If we molecule pharmaceuticals, we could reengage apoptosis. In AML, MCL1 plays a major role in blocking apoptosis. The O’Connor: “Tumors that lack essential harnessing the potential of a class of can do that successfully, we can take a Perhaps we could then restore sensitivity to cancer drugs that contribution of BCL2 is not well studied. However veneto- immune elements that enable check- drugs called cyclin dependent kinase drug like CYC065 and combine it with a stopped working because of the emergence of resistance. clax in combination with a generic drug called azacitidine has point therapies to be effective are re- (CDK) inhibitors,to overcome cancer drug that has stopped responding, and Therefore, we work to develop drugs that can stop cancer been approved by FDA for front line therapy of elderly AML ferred to as ‘cold’ tumors, while ‘hot’ resistance. “The problem with cancer the drug will work again. Our goal is to cells from becoming smart. patients. Thus far we have seen antileukemic activity with the tumors are likely to receive a benefit resistance is not chemotherapy, it is lower the bar by making the cancer cells combination of fadraciclib and venetoclax, in terms of reduc- from anti-PD-1 checkpoint therapies… the genetic resistance of cancer, as the sensitive.” Can you comment on the drugs you have in your pipeline, tions of leukemia cells in the peripheral blood of patients who OncoSec’s lead product candidate, daughter cells become smarter, learn An alternative to immunotherapy and CYC065 and CYC140? have relapsed or are refractory to front-line treatment. TAVO, is administered using an elec- how to escape drug effects, and be- chemotherapy is targeted therapeutics. Fadraciclib (or CYC065), is a CDK inhibitor targeting two We are in an early stage with our trials; late phase 1 with troporation gene delivery system (EP) come insensitive to the drug, leading to The sequencing of human cancer ge- enzymes; CDK2 and CDK9. It is a leader in a class of drugs around 50 patients enrolled so far. We are preparing for and designed to help turn ‘cold’ tumors mortality. The idea was to use the body’s nomes over the past decade has played seeking to lower MCL1 protein levels. CYC140, which was phase 2 development having seen activity in solid and liquid ‘hot’. TAVO has demonstrated anti-tu- own defenses and amplify them,” said a big role in bringing targeted thera- also discovered in our laboratories, is a Polo-Like Kinase in- cancers. mor activity with whole body (abscopal) Spiro Rombotis, CEO of Cyclacel. “We peutics to where it is today, because it hibitor targeting the PLK1 enzyme. PLK1 plays a crucial role For the time being we are primarily concerned with the im- effect in metastatic melanoma and four are all chasing this goal of how we can demystified the genetics of cancer. We in mitosis or cell division, the last stage of the cell cycle. Dur- pact of COVID-19 through the second half of 2020, the broad other cancer types both as a monother- suppress one or more of these proteins now have a blueprint of cancer genes ing mitosis the parent cell nucleus splits into two nuclei. The availability of testing for the whole population and whether apy and in combination with anti-PD-1 that have a relatively short life – we call in every type of cancer and information parent cellular material stretches along a longitudinal axis, we see an ebb and surge pattern in the next two years until checkpoint inhibitors.” these transcripts. The idea is to inter- about the frequency and type of52>> muta- called the spindle, with the two nuclei on either end or pole. vaccines become available. ■

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<<50 tions that occur. This has revealed new Many investors in the cancer space find other cancers. Since 2018, the company genes and pathways important for can- this line of therapies appealing both for has worked in partnership with Exelixis Roel cer development and, in some cases, the potential social value it can bring to develop better inhibitors for the WNT has already led to new approved cancer in alleviating suffering, but also for its pathway. According to the company’s therapies. In addition, genetically se- ability to generate future profits. Ac- founder and president, Tony Capobian- Schaapveld quencing tumor tissue samples guides cording to Christiana Goh Bardon of co: “One of the exciting pieces of pre- the therapeutic agents selected for a Burrage Capital: “It is an area where we clinical data we like is when we can show subset of cancer patients. This tailored can develop personalized therapies for that our WNT inhibitor has better effi- approach, termed precision or person- patients by using drugs that address the cacy with less toxicity than competing alized medicine, selects patients most specific mutations of the patients tu- inhibitors. We also developed a Notch likely to respond and spares those that mor. From that perspective, I think the one selective inhibitor that has fantastic are unlikely to respond from untoward personalized medicine approach can efficacy without the on target toxicity, CEO side effects. Recent discoveries that it is improve efficacy rates, streamline clini- whereas all the other inhibitors being INTERNA TECHNOLOGIES possible to sequence DNA in the blood cal trials, and also minimize exposure of developed are pan-Notch inhibitors to detect cancers provide hope that this the drug by only treating patients who that have much higher toxicity, and that approach can be used to identify can- are known to be potential responders. is part of our approach—to maximize cers earlier and follow the response to It is one of the most exciting and fruitful efficacy and minimize toxicity.” therapy. Through the study of rare can- areas of oncology drug development.” In summary, cancer remains pervasive, Can you take us through the basics of pared to the approach of other miRNA INT-1B3 regulates the tumor microen- cers, mutations have been identified in Adding to the robust development of but there is hope that it can one day be the research that led to the creation companies, as what they started off with vironment and ultimately elicits a long genes that regulate the epigenome, the cancer therapeutics are early stage, a chronic, manageable disease. In or- of InteRNA? was descriptive differential expression term T-cell mediated immune response. cell’s machinery for activating and de- pre-IND companies like Stem Synergy der to achieve this goal, there is a need InteRNA was incorporated as a spinoff profiling. In a disease situation miRNAs INT-1B3 regulates the enzymes CD39 activating genes. These studies have Therapeutics, whose initial academic to continue to collaborate with stake- from the Hubrecht Institute, Utrecht, the can be up or down regulated. If you ana- and CD73 thereby reducing adenosine revealed that these same pathways are research found that WNT and Notch holders across the health care system Netherlands. The academic founders lyze the RNA from disease samples ver- levels and downregulating the adenos- dysregulated in many common cancers signaling promise to have a major clini- and maintain an ecosystem that sup- of the company used deep sequencing sus normal samples on a microchip with ine-A2A receptor pathway involved in and play key roles in cancer pathogen- cal impact on treatment of colorectal, ports and encourages the development in combination with proprietary bioin- miRNAs, you can check for up and down the escape from immune surveillance. esis and resistance to therapy. breast, esophageal, lung, sarcoma, and of innovative new therapies. ■ formatics to identify novel microRNAs regulation. What you do not have with Further it makes immune cold tumors (miRNAs) in deep sequencing data sets. this differential expression approach is hot through recruitment of CD8+ Teffec- At the time of their research, there were the spatial and temporal information, tor cells and downregulation of immuno- regulatory Can you please provide an overview high toxicity levels and the company already miRNAs discovered, mainly by and you do not know if the up or down suppressive LAG-3/FoxP3 T cells. of Hillstream Biopharma? ultimately ran out of funding. Since the Thomas Tuschl when he was at Max regulation of the miRNA is a result or a Based on this biology, we find INT-1B3 Randy Hillstream is a privately owned, oncol- company had significant positive Phase Planck Institute for Biophysical Chemis- cause of a defect. If you have a non-bias a very attractive drug candidate in the ogy-focused company. Our first asset 2 data in soft tissue sarcoma, Hillstream try and at the Rockefeller University. His functional genomics approach, you im- immuno-oncology field. Milby is Salinomycin (HSB-1216), which is de- is taking this TNF alpha and putting it IP went to Alnylam, which today is the mediately have information on the po- We aim to initially develop INT-1B3 for risked but not yet approved. Salino- inside our QUATRAMER™ drug deliv- biggest siRNA company in the world. tential function of the miRNA. treatment of patients with hepatocellu- mycin was originally tested in Germany ery technology to improve the pharma- We found new miRNAs that Thomas Tus- lar carcinoma (HCC) and triple-negative for ovarian and breast cancer and had cokinetics and prevent collateral side chl had not found, and we were able to Can you elaborate on the develop- breast cancer (TNBC). Yet the com- great results, but its toxicity profile was effect damage. file a patent application on these discov- ment of InteRNA’s INT-1B3 drug de- pound also qualifies for other cancer CEO not completely understood and opti- eries. There was interest from industry velopment candidate? indications like melanoma, lung cancer HILLSTREAM BIOPHARMA mized for randomized controlled trials. How is Hillstream harnessing the im- for these miRNAs, not only for therapeu- Our screenings gave us multiple miRNA (NSCLC) and pancreatic cancer as we Hillstream has proprietary technology mune system to improve cancer drug tic application, but also for diagnostics drug candidates. We then implemented found in our preclinical studies. to widen the compound’s therapeutic delivery? application. transcriptomic analysis, mainly based on window by increasing the dose with- Hillstream’s QUATRAMER™ technology We took a selection of our novel miR- RNA sequencing with bioinformatics, to What is InteRNA’s strategy for push- out side effects and collateral damage encapsulates the drug or cytokine. The NAs, as well as a selection of already identify which messenger RNAs (mRNAs) ing forward the development of the to healthy cells. We have compelling critical factor here is that the drug or known miRNAs from the public da- are regulated by the individual miRNAs. company’s drug candidates? animal data suggesting that it is safe to active is encapsulated. The size of the tabase, and we cloned them on an in- This information gave us insights in the We are looking for partnerships for our administer at a higher dose. Our initial nanoparticle is 80 to 100 nanometres. dividual basis in lentivector (lentiviral biology of all our candidates. We priori- CNS programs and, in first instance, indication is small-cell lung cancer, and The nanoparticle gets taken up by the vector). Once we had the viral particles tized INT-1B3, a lipid nanoparticle (LNP) not for our lead candidate INT-1B3. We we intend to have our pre-IND meeting leaky vasculature of the tumor and is produced, we ran various kinds of high formulated synthetic mimic of a tumor have an anti-miR that can knock down with the FDA at the end of 2020 and then taken up by the lysosomes. The throughput functional genomic screens suppressor miRNA, as we found that it an overexpressed miRNA in temporal have the IND by mid-2021. The market change in the PH of the blood versus in cell based assays. has a dual mode of action. Firstly, it tar- lobe epilepsy patients, and are cur- opportunity for this asset is between the acidity within the lysosome releas- Our R&D approach is a functional ge- gets tumor cells directly, pushing them rently in discussions with CNS focused US$1billion to US$2 billion. Hillstream’s es the payload inside the tumor. We nomics approach. We treat tumor cells into apoptosis and inhibiting their pro- pharma for early stage collaboration on second asset is DNA delivery, TNF Al- believe we can place other biologics with the miRNAs on an individual basis liferation and migration. Regulation of this candidate. For our lead candidate pha, which is a potent cytokine, and it inside the nanoparticles as well. Since to see whether they go, for example, into specific mRNAs leads to activation of INT-1B3, we would like to reach proof of has not been approved in the United the actives are encapsulated inside the apoptosis or that you can inhibit prolifer- the PTEN tumor suppressor pathway in concept in a Phase 1b/2a trial to create States but is in the market in Europe. nanoparticle when it is in the peripheral ation. This is already the first indication parallel to inhibition of the oncogenic several strategic options with regard to A small company took it to phase 3 in bloodstream, you do not see off-target of the potential function of the particular Ras/MAPK and PI3K/Akt signaling path- potential Phase 2b trials and/or exit sce- the U.S., but their trial failed due to toxicity or collateral damage. ■ miRNA. This approach is unique com- ways. In parallel, we discovered that narios. ■

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indication for MS1819 for the treatment of Expanding James CP in 2024.

Therapeutic Can you discuss the company’s financial Sapirstein position and the resources available to Focus execute on your plan? AzurRx has used two financial instruments. First, we established a US$15 million equi- ty line with Lincoln Park Capital, to remove » President and CEO a financing overhang that was weighing on AZURRX BIOPHARMA our share price. Second, we raised US$6.9 Patient advocacy groups play a critical role in drug development. million in a private placement that, togeth- They drive innovation, fundraise and financially support companies to er with the equity purchase agreement, do the necessary research and development. Often, it is the patients gives us capital until 2021. Additionally, who drive the narrative in Washington, state capitals and in the What was the appeal and opportunity burden, PERT therapy has risks. we have an active business development EASING THE BURDEN you saw that made you want to join the Our lead product, MS1819, is a yeast de- program aimed at generating potential overall pharmaceutical industry. The patient advocacy groups have AzurRx team? rived, synthetic, regenerative oral medi- partnerships that could provide us access ON PATIENTS databases to help identify patients, which can be extremely helpful I was semi-retired and working on different cation that has the potential to be a sub- to non-dilutive sources of capital. Our ef- for clinical trial enrollment. In CF, for example, the availability of new projects with several companies and I had stitute for the porcine-derived product. forts are targeting pharmaceutical devel- a chance to look at AzurRx’s data in cystic MS1819 has an encouraging safety profile genetic therapies has meant that CF patients are routinely sequenced opment companies that are interested in fibrosis (CF) for the treatment of exocrine and does not confer the risk of fibrosing the gastroenterology space and looking and their genotypes are known, which has been extremely helpful in pancreatic insufficiency (EPI) and a couple colonopathy. Also, we believe it can dra- to fill their pipelines with a differentiated recruiting patients for clinical trials. of things appealed to me. First, the data matically reduce the daily pill burden -- agent offering attractive margin potential. from the company’s two Phase 2 studies down to 8-16 pills per day. Because our development program is rela- was compelling. Second, I saw that there MS1819, targets both the CF and chronic tively efficient and inexpensive, it would - Neil Belloff, One of the trends in US biopharma is is significant potential for a non-porcine pancreatitis (CP) communities. The CF not be a big reach for a pharmaceutical that the growing scope of companies COO, General Counsel and Corporate Secretary, synthetic product in this setting. Finally, I market is basically comprised of branded company to come in and co-develop or developing therapeutics that target Eloxx Pharmaceuticals saw that the company was extremely un- generics, with the main product being Cre- partner with us. unmet medical needs. Even in areas in dervalued and believed that, with proper on from AbbVie, which has around US$1 which substantial progress has been execution, the only direction for valuation billion in sales. What steps is AzurRx taking to show made, like cystic fibrosis (CF), there re- was up. I have a history of turning com- The barrier to entry is high and no one has value to the market? mains a need to develop effective and « panies around, and really enjoy doing it. been able to displace Creon and Zenpep. My goal as CEO is to execute on our clini- affordable drugs for diseases that are I saw the opportunity to do it again with Given our unique profile, we believe that cal, regulatory and business development related. Likewise, there remain seg- The former is the case for those who lungs and makes them vulnerable to AzurRx. we will be able to add new patients to the initiatives as seamlessly and in as timely a ments of a disease population with rare suffer from exocrine pancreatic insuf- infections. Thick mucus also clogs the MS1819, the company’s lead product can- mix and create a marketplace for our prod- fashion as possible. We have a lean orga- gene mutations that prevent the most ficiency (EPI), which can be closely re- pancreas and hinders the release of di- didate, definitely has the potential to be a uct. With at least a US$1.2 billion market nization that is operating with a very clear common treatments from working ef- lated to CF. People with CF have breath- gestive enzymes. About 90% of people life changing therapy. for just Creon and Zenpep in the U.S., even mission. We expect to complete our com- fectively. ing problems because mucus clogs their with CF also end up developing exocrine 57>> if we were to capture just a small percent- bination study and provide top line results Can you characterize the size of the age of it, we see this as a very attractive by year end. Our Phase IIb study in CF will market AzurRx is targeting? market. begin enrolling patients next quarter, and Our lead indication is targeting a condition CP offers a huge opportunity, especially in we anticipate releasing topline results in known as EPI which affects about 35,000 Europe and Asia. early 2021. We have designed both stud- CF patients and about 100,000 chronic ies to showcase the safety and efficacy of pancreatitis patients in the U.S. In patients What studies does AzurRx need to per- MS1819 and believe that their results will with EPI, the pancreas is damaged and form to gain approval from FDA to mar- be significant events to unlock value. Be- does not produce the digestive enzymes, ket the drug? cause the combination study is open label, particularly lipase, needed to break up We are preparing to initiate a Phase IIb it is possible that we may provide interim food in the GI tract so that it can be ab- program for MS1819 in CF in the second updates as the trial progresses. Assuming sorbed. Patients with EPI struggle with a quarter, with data expected by the first successful outcomes, we look forward to nutritional deficit – they cannot gain or quarter of 2021. We then anticipate meet- moving MS1819 into at least one pivotal keep weight, which is critical for CF pa- ing with the FDA to discuss a Phase 3 trial trial in 2021. As I indicated, we have an ac- tients. The current standard of care is to design. We are preparing to be Phase 3 tive business development program and replace these enzymes with porcine de- ready by mid-2021 and, assuming that we are constantly evaluating potential part- rived enzymes – a therapy known as PERT only need to do a single study, we hope to nering opportunities. Naturally, should we (pancreatic enzyme replacement therapy). launch commercially in CF in late 2022 or decide to pull the trigger on a collabora- With PERT therapy, CF patients with EPI early 2023. For CP, we are planning anoth- tion, we would only do so if we believed have to take 25-40 pills daily throughout er study to be run in parallel with our CF that it would provide value to both pa- their entire lives. In addition to the high pill study and are planning to have a second tients and our stakeholders. ■

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<<54 EPI, according to Cleveland Clinic data. that we will be able to add new patients velopment. They drive innovation, fun- Robert Patients with EPI struggle with a nutri- to the mix and create a marketplace for draise and financially support compa- tional deficit and cannot gain or keep our product. With at least a US$1.2 bil- nies to do the necessary research and weight, which is critical for CF patients. lion market for just Creon and Zenpep in development. Often, it is the patients Foster The current standard of care is a therapy the U.S., even if we are to capture just a who drive the narrative in Washington, known as PERT (pancreatic enzyme re- small percentage of it, we see EPI as a state capitals and in the overall pharma- placement therapy). With PERT therapy, very attractive market. “ ceutical industry. The patient advocacy CF patients with EPI have to take 25-40 Another segment of the market with groups have databases to help identify pills daily throughout their entire lives. unmet medical needs are rare and patients, which can be extremely help- In addition to the high pill burden, PERT ultra-rare diseases. Premature stop co- ful for clinical trial enrollment. In CF, for therapy has risks of a condition called don diseases fall under this category. example, the availability of new genetic CEO fibrosing colonopathy at higher doses. The population of CF patients with therapies has meant that CF patients HEPION PHARMACEUTICALS In response, AzurRx is developing a these diseases is 10-15%, and for this are routinely sequenced and their gen- product (MS1819), that is a yeast derived subset,there is currently no approved otypes are known, which has been ex- synthetic, regenerative oral medication therapy. Eloxx Pharmaceuticals is de- tremely helpful in recruiting patients for that has the potential to be a substitute veloping novel ribonucleic acid (RNA)- clinical trials.” for the porcine-derived product. The modulating drug candidates, each In summary, the progress made across company believes MS1819 has an en- designed to be a eukaryotic ribosomal the industry is not only advancing in Hepion evolved from Contravir in 2019. What was the Obesity is a global problem and fatty liver disease can af- couraging safety profile and does not selective glycoside (ERSG) formulated some of the most well known disease thought process behind the change? fect as many as one in four of the population. Of those, some confer the risk of fibrosing colonopathy. to treat these rare and ultra-rare prema- categories, but also in areas that have The name change reflects a transformation in the strategic will go on to develop NASH, which is a more aggressive form They also see potential to dramatically ture stop codon disorders. long been neglected. It is a strength direction of the company. In 2016, the main focus of the com- of non-alcoholic fatty liver disease. NASH may affect up to reduce the daily pill burden down to One of the biggest reasons for the in- of the US healthcare system that there pany was anti-virals, namely the treatment of hepatitis B and about 12% of the US population. It is vitally important that 8-16 pills per day. creased attention and capital pursuing are private companies that willingly em- a treatment for shingles. I was asked to take over as a CEO we develop solutions to treat the global population for this There is also significant market oppor- rare diseases has been the influential brace enormous financial risk to bring of Contravir in October of 2018 and made a review of our epidemic of fatty liver disease and NASH. If we do not find tunity. According to James Sapirstein, role of patient advocacy groups. Ac- drugs to market for small segments of products and take a strategic view of where the market was good treatments for liver disease, the outcome will be severe AzurRx president and CEO: “The bar- cording to Neil Belloff, COO, general the population. This has hugely ben- going and where the opportunities were to maximize share- with increased morbidity and mortality from cardiovascular rier to entry is high and no one has been counsel and corporate secretary, Eloxx eficial implications for patients and holder value. I decided to halt the development of our late disease and liver related events such as liver transplantation able to displace Creon and Zenpep. Pharmaceuticals: “Patient advocacy gives renewed hope to those who once stage developments and emphasize the early stage program, and liver cancer. Given our unique profile, we believe groups play a critical role in drug de- thought they would never be cured. ■ which is centered on the CRV431 molecule. The data was telling us that we had a molecule that had very strong anti- With the clinical studies for CRV advancing steadily, what fibrotic properties and I wanted to see if the molecule could are the company’s plans and milestones for 2020 and be- What is the focus of Eloxx Pharmaceu- nonsense mutations for whom there is be developed further, initially in the indication of liver disease yond? Neil S. ticals? no approved therapy. At Eloxx, we are and specifically in non-alcoholic steatohepatitis – also called One of our key events slated for the first half of 2020 is the Eloxx Pharmaceuticals is a clinical-stage addressing this population and believe NASH. completion of our multiple ascending dose study of CRV431. biopharmaceutical company developing we are the only clinical stage company We will also initiate a phase 2 proof of concept, a short study Belloff novel ribonucleic acid (RNA)-modulating targeting CF patients carrying nonsense Can you give us an update on the development process that is only 28 days long. We will be looking for safety, toler- drug candidates, each designed to be mutations on one or both alleles of the of CRV431? ability as well as biomarkers for NASH and fibrosis. We will a eukaryotic ribosomal selective glyco- CFTR gene. We have initiated Phase 2 CRV431 now has two IND (Investigational New Drug) applica- be monitoring specific markers to determine to what extent side (ERSG), formulated to treat rare and proof of concept clinical trials. tions that have been accepted by the FDA. The first IND was we may anticipate how these will behave in a longer NASH ultra-rare premature stop codon disor- for hepatitis B virus (HBV) and the second was for NASH – the study. This study will prepare us not only for our longer phase Chief Operating Officer, General Counsel ders. Premature stop codons are point What are key milestones for 2020 latter is the indication we are pursuing now. We have com- 2 program, but also for our phase 3 program. and Corporate Secretary mutations that disrupt the stability of the as well as for the next two to three pleted the pre-clinical program. The package is complete and ELOXX PHARMACEUTICALS, INC. impacted messenger RNA (mRNA) and years? we have conducted a phase 1 single ascending dose study in What is your final message to the pharmaceutical and the protein synthesis from that mRNA. As For 2020, completing enrollment and human volunteers and are now conducting a multiple ascend- investment community about why they should be inter- a consequence, patients with premature reaching top line data in our phase 2 ing study in healthy volunteers. We are getting ready to enter ested in Hepion? stop codon disorders have reduced lev- proof of concept clinical trial for ELX-02 into a proof of concept phase 2 in NASH in 2020. We have People should pay attention to Hepion because this is a els of, or no, protein from a gene whose in CF are our top priorities. We are also made a lot of progress in the clinic and in non-clinical studies. company that is truly undervalued. My previous company, product performs an essential function. focused on advancing our IND enabling CRV431 is an anti-fibrotic drug and we are focused on its ap- Aurinia Pharmaceuticals, was under-valued for a long time. research for our ERSG library in kidney plication for NASH. If the anti fibrotic mechanism continues More recently, however, investors paid attention to our pre- What can be improved about current diseases and ocular disorders. Follow- to be strong, which I believe it will, it may be used in other vious drug, voclosporin, for the treatment of lupus nephritis Cystic Fibrosis (CF) therapies? ing the completion of our phase 2 trials, anti-fibrotic indications. To that extent, about 45% of all the and have now driven the company’s market cap to over US$2 Substantial progress has been made we will seek to engage with the FDA and death that occurred in the developed world has some type of billion. When I look at Hepion, which is approximately only with approved breakthrough genetic other global regulatory bodies to gain fibrosis component. US$20 million market cap, I believe that CRV431 is at least therapies which are increasing survival alignment on a path toward registration as good as voclosporin and addresses a market that is much and improving the quality of life for cys- and ultimately go to market with these Can you comment on the obesity epidemic and how it is larger than lupus nephritis. I believe the upside is very sub- tic fibrosis patients. However, despite products to provide much needed treat- driving the need for medical solutions to fatty liver dis- stantial in terms of both CRV431’s potential in NASH fibrosis this there remains a high unmet medical ment options to patients with unmet ease? and market value. ■ need among the 10-15% of patients with medical need. ■

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best treated outside of a hospital to pre- pha-secretase, which positively impacts Responding vent patients from spreading infection. amyloid precursor protein, (APP) pro- That means an oral bioavailability should » Dr. Trevor cessing. Both Beta-secretase and Gam- be a top priority, because pills can be tak- ma-secretase cleave APP to form insol- to COVID-19 We are learning in real time en by patients at home. P. Castor uble amyloid plaques that set in motion The second factor is economic. The eco- that global health is American tau fiber assembly. In contrast, Alpha- nomics for some anti-infectives do not health. People frequently and secretase cleaves APP into a harmless work, even if they are needed for public mistakenly think of global and more soluble product, that supports health. Evidence of this at play in the mar- new synapse formation and is more read- ketplace is exemplified by the IV antibiotic health as a developing country ily cleared from the brain. Thus, unlike President & CEO PANDEMIC therapies from Tetraphase Pharmaceuti- problem. It is, until it arrives at current strategies, which aim to suppress APHIOS NIGHTMARE ARRIVES cals and Melinta Therapeutics. The former America’s shores and then we amyloid plaque formation by minimizing company was acquired for a bargain price are forced to respond reactively Beta- and Gamma-secretase activities, and the latter went bankrupt before it our strategy is to activate Alpha-secre- could reach commercial launch. rather than proactively. This is a tase, which will effectively eliminate the The reason it is so difficult to develop a risk the US and other Western How has Aphios evolved since its Shreveport to develop drugs for Al- substrate for Beta-amyloid generation, viable company in the infectious disease countries run by not focusing on founding and how has nature influ- zheimers disease and cognitive disor- and at the same time lead to positive In April of 2018, Bill Gates delivered the space is because of reimbursement issues. ders, as well as for the transplantation of amyloid precursor processing, to both tropical diseases. For example, enced the development of your thera- annual address at the Massachusetts Med- Certain medicines require healthcare insti- peutics? kidneys and the liver. Together we have prevent and reduce amyloid plaques in ical Society. For the former world’s richest tutions to pay for them out of a fixed fee, Zika virus or dengue virus are Aphios’ vision is to develop biotechnol- developed and patented a technology AD. man turned global health aficionado, it regardless of what is needed for their care. now affecting parts of the US. ogy products for improving health and and product for improving the length of was an opportune time to diverge from This is known as the diagnosis-related We are now learning that it is treating chronic diseases in an environ- which an organ can be preserved before Can you elaborate more on Aphios’ his usual optimistic tone. It is true that the group payment (DRG), and the DRG is a mentally sustainable manner. Aphios was transplantation. not strategically smart to ignore platforms? world is on the verge of eradicating polio, disincentive to use innovative medicines established in 1993 with an initial focus We are leading the way in develop- HIV is no longer a death sentence and half since their cost comes directly out of the these kinds of things. on developing enabling technology plat- What is Aphios strategy for pushing ing green, enabling biotechnology and the globe is now free of malaria. However, institutions bottom line. If a hospital lim- forms for improving drug discovery, drug its products forward and taking them nanotechnology drug delivery platforms Gates chose to focus on a topic where he its usage of a patented, more expensive - Mike Pollastri, manufacturing, drug delivery and patho- to market? and enhanced therapeutic products for saw progress had stalled: Pandemic Pre- medicine, it gets to keep a larger portion genic drug safety focused on the inac- Aphios’ strategy is to license as early as health maintenance and the treatment Interim Dean and Professor, paredness. of the fixed fee it collects from the health tivation of viruses and pathogens in the possible. We collaborate with strategic of chronic diseases. We source our bio- His thesis insisted that historical prec- insurance provider. This is concerning be- Northeastern University, blood supply and our bodies. Aphios is a partners and/or license our enabling diversity from nature – medicinal plants, edent should have taught us that pan- cause a lack of financial incentives, creates Academic Lead for the combination of two Greek words, which technology platform to research and de- marine organisms, or humans. We use demic’s will reoccur. He warned: “Watch- conditions where companies are less will- Roux Institute means virus free. We spent approxi- velop novel drugs, and for the reformula- supercritical fluid solvents, as a replace- ing Hollywood thrillers, you would think ing to pursue discovery and development mately a decade developing, validating tion of existing drugs to reduce toxicity ment for organic solvents. When com- the world was pretty good at protecting of innovative therapies. The problem for and patenting these platforms and from and improve efficacy and therapeutic pressed, these fluids exhibit enhanced the public from deadly microorganisms… public health is then amplified, because there, we started developing therapeu- index, while extending product life. We thermodynamic properties of penetra- In the real world, though, the health infra- diseases evolve and this renders current tic products based on these platforms. will also collaborate with strategic inves- tion, selection, solvation, and expansion. structure we have for normal times breaks anti-infectives obsolete. « In 2003, we began our first big clinical tors and corporate partners to further We manipulate these fluids on a cellular down very rapidly during major infectious There is also an issue of market size. There trial for our patented product Zindol the development and commercialization level to increase process selectivity and disease outbreaks. This is especially true just are not enough patients. Some medi- for chemotherapy induced nausea and of our therapeutic products. speed while reducing processing steps, in poor countries. But even in the U.S. our cines needed for the public health fight disease in the public consciousness and vomiting. That was influenced by nature, toxic organic usage and manufacturing response to a pandemic or widespread are for infections that are not prevalent, then recede from memory. As they cap- because it was a ginger based product. What are your thoughts on the current costs. bioterror attack would be insufficient.” yet. There is a general lack of willingness ture the headlines, these outbreaks mo- Currently Zindol is on the marketplace as developments in the neurodegenera- This technology is especially relevant Two years after this speech, the world is to pay for something that does not pose bilize financial and intellectual resources a dietary supplement, while we focus on tive space and the potential for mak- with the ongoing corona virus pandemic. collectively struggling through the COV- a clear and present danger as COVID-19 that are needed to treat these emergent attaining FDA approval. ing important strides forward? Our pathogen inactivation technology ID-19 pandemic and Bill Gates’ vision has does. Building a sustainable infrastructure and very important threats. We also developed a technology for There is an association between amyloid can clear viruses from the blood supply, proven to be prophetic. Why are we in the to fight future threats requires a multi- The sad truth about so many disease out- manufacturing Taxol, a potent anti-can- plaques and tau entanglements in Al- and our photoluminescence molecular position of being so unprepared across the strategy approach. It requires big invest- breaks of the past is that being prepared cer agent. Today, we have several prod- zheimer’s disease (AD). The question re- flashlight therapeutic can inactivate vi- board against infectious disease? It can be ments, but the multi-trillion dollar cost of for the next one means keeping up a ucts in development, including APH- mains how to prevent this from happen- ruses within our body. broken down into two driving factors; one COVID-19 to our economy suggests that sustained, multifaceted effort over many 0812, for which we were just awarded a ing or to reduce it once it does happen. scientific and the other economic. for a far smaller sum we can be better pre- years. This includes everything from test- US patent. It is a combination therapy of There are three critical neural enzymes What trends are you currently seeing? On the scientific side, discovery of an anti- pared for the next outbreaks. It is of ut- ing, data surveillance to the continuous a protein kinase C (PKC) modulator and that affect amyloid plaques. They are Cannabis-based drugs are becoming infective poses unique hurdles because it most importance to save lives now, but it development of treatments and vaccines. histone deacetylase (HDAC) inhibitor in Beta-secretase, Gamma-secretase, and a huge trend in the market. Aphios is needs to be toxic to pathogens without is equally important take steps to prevent Important lessons will be learned given a nanoparticle that is targeted for HIV Alpha-secretase. Pharmaceutical com- developing FDA-approved, cannabis- being toxic to humans. It also needs to the next crisis from happening. the extent of the pain COVID-19 has in- latency. panies have focused on Beta-secretase based drugs for treating unmet central have a reasonable distribution, absorption In summary, infectious disease has had an flicted on society. One can only hope new and Gamma-secretase, but these have and peripheral nervous system disorders and dosing profile that makes for a practi- ebb and flow relationship with our general methods and incentives will be imple- Can you elaborate on the Aphios’ part- been difficult to translate into effective of opioid addiction and pain. Cannabi- cal drug people can take. Many patients awareness; epidemics such as Zika, Ebola, mented to prioritize preparedness moving nership with LSU Health Shreveport? clinical treatments for AD. noids have a lot of potential to affect the with serious infections like COVID-19 are and SARS raise the profile of infectious forward. ■ We have a partnership with LSU Health Aphios’ approach is to upregulate Al- body. ■

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readily cleared from the brain. Thus, unlike What was the opportunity that en- take a long time. The diagnosis workup Commercializing current strategies, which aim to suppress Dustin couraged you to establish Terran Bio- begins when patients have symptoms. In amyloid plaque formation by minimizing sciences? many cases, this diagnostic workup is a Neuroscience Beta- and Gamma-secretase activities, our DT: Terran Biosciences initially started prolonged process that is quite burden- strategy is to activate Alpha-secretase, Tetzl & with work on schizophrenia; identify- some for patients and the system. which will effectively eliminate the sub- ing new therapies and new biomarkers. Terran’s imaging software platform is for epilepsy, mood disorders and genetic strate for Beta-amyloid generation and, We decided to build a company around able to measure a biomarker which may VC BETS BIG ON diseases of the central nervous system. at the same time, lead to positive amyloid Samuel exciting assets licensed from different aid in simplifying the diagnostic process Because there is so much downside risk, THE BRAIN precursor processing to both prevent and institutions: two therapeutics and a neu- and may be measured early on in their the upside potential of investing in the reduce amyloid plaques in Alzheimers dis- Clark roimaging software program to deliver workup. Our platform is able to analyze a sector is exponential. Patient unmet needs ease.” new treatment solutions and aid in diag- brain MRI, which is often performed dur- from neurologic disorders are staggering, nosis of patients with difficult psychiatric ing first or second patient visits, and give DT: Chief Business Officer Often referred to as ‘the final frontier’ of and the cost to society is enormous. As and neurological diseases. a measurement of a key biomarker called SC: CEO medicine, neuroscience is unquestion- most OECD countries experience a ‘grey- Terran is planning to take our late stage neuromelanin. This biomarker has been ably complex. So much so, that stories ing’ of their populations, the burdens “The human body has an endo-canna- TERRAN BIOSCIENCES schizophrenia compound, TR-01, for- shown to be to aid in determining wheth- of high profile failures and headlines of of many of these later-onset neurologic binoid system to satisfy the CB1 and ward into phase 2b. We also have a pre- er a patient has Parkinson’s disease or a big pharma deprioritizing programs have conditions will skyrocket. This creates an CB2 receptors. Cannabis-based drugs clinical compound with a new mecha- related disorder. Thought leaders have seemingly muted enthusiasm for the field. imperative to act, and to invest, in new can thus supplement the body’s endo- nism for schizophrenia, TR-36, which we already published that neuromelanin Amgen scrapped its R&D program to fo- therapies. cannabinoids. There are approximately will be bringing through IND enabling imaging may become integrated into cus on cancer in 2019, following in the Psychiatric disorders such as schizophre- 65 different cannabinoids, all of which studies. The other area in which we are the workup of Parkinson’s, which may footsteps of Pfizer’s decision to do the nia have gone long periods without ad- have different potential impacts on focused is on developing our companion allow patients to avoid expensive and same in 2018. Others, like Bristol-Myers vances in treatment. Given the disease the human body. We believe that can- neuroimaging software platform, which invasive SPECT scans with radiotracer IV Squibb, GlaxoSmithKline and AstraZene- affects 1% of the population according to nabinoids are great for treating opioid is an exciting breakthrough to measure a infusions, and both improve and simplify ca announced cutbacks on CNS disorders the Mayo Clinic, there is substantial need addiction, as some of the same recep- biomarker which may aid in the diagno- the process. Terran’s technology is the a few years earlier. for disruption in the area. Terran Biosci- tors that interact with methadone, the sis of patients with schizophrenia, Parkin- world’s first and only software platform Amgen’s head of R&D, David Reese, ex- ences is at the forefront of trying to solve treatment that is used on opioid ad- son’s disease, and Alzheimer’s disease. that gives both an automated and quan- plained that the reason for the companies this debilitating disorder. The company is dicts, interact with cannabinoids. If the We believe that this could be approved titative measurement of neuromelanin in exit rested on several factors, including developing therapeutics and neuroimag- receptors can be satisfied by a non-opi- through an accelerated pathway by the different regions of the brain. the industry’s “fairly rudimentary” under- ing software to deliver novel treatment so- oid drug, it will be able to alleviate the end of 2020. standing of neurological diseases, the lutions and aid in the diagnosis of patients craving for opioids.” SC What are the capital requirements long development programs some of with psychiatric and neurological diseas- How do TR-01 and TR-36 differ from of the business and what is Terran’s these drugs require, and the clearer op- es. “We have seen renewed interest in the - Dr.Trevor Castor, traditional approaches that have ad- funding and partnership strategy portunities Amgen saw with oncology, in- space over the last couple of years, and President and CEO, dressed schizophrenia? moving forward? flammation and cardiovascular medicines. a few groups are really pushing forward Aphios DT: Terran’s lead compound, TR-01, is an DT: We are currently in the middle of an There is no doubt neuroscience presents on new mechanisms to address the large alpha-2 (α2) adrenergic receptor antago- active raise for our Series A round. This some unique challenges: uncertain diag- unmet need. Terran’s lead compound, TR- nist, which is able to be added onto the capital raise will get us through key mile- noses, long progressive burdens of dis- 01, is an alpha-2 (α2) adrenergic receptor current standard of care therapies. This stones over the next 2 years to be able ease, multiple etiologies and complicated antagonist, which can be added onto the A huge element of this expansion of ba- makes it the only drug in development to move our imaging product potentially clinical trials are a few of them. As a con- current standard of care therapies. This sic neuroscience understanding has come as adjunctive therapy for schizophre- all the way through FDA approval and sequence, there remain few, if any, novel makes it the only drug in development as from the explosion in NIH funding for neu- nia. This compound has already been early launch, as well as move our clinical treatments for diseases like Alzheimer’s, an adjunctive therapy for schizophrenia, roscience in the first decade of the 2000s. through proof of concept phase 2 stud- compound TR-01 through the phase 2b Parkinson’s and depression, each of which and is designed to give patients a new In the 1990s, the NIH channeled US$954 ies, and has shown to be effective on top trial and our pre-clinical compound TR- affect millions of patients. safe and more effective option for improv- million into neurology research. In the of standard care, in addition to its effec- 36 through IND enabling studies. Despite the flurry of headlines of a - pull ing their current treatment,” said chief 2000s, this number spiked to over US$8 tiveness in both positive and negative back from big pharma, neuroscience has business officer Dustin Tetzl. billion. This was a larger increase than in DT symptoms of schizophrenia. What milestones is Terran looking to quietly become a hot space for startups. Massachussetts based Aphios are working any other therapeutic area, and has cre- Our early stage T-36 compound is a se- achieve with its current raise? Across a range of neurologic conditions, to develop therapeutics products for CNS ated a wave of insights a decade later that lective kappa-opioid receptor antago- DT: With the current raise, Terran is look- investors have been fueling entrepreneurs disorders. Its approach, as characterized the industry is currently in the process of nist, which is also a new mechanism. A ing to bring our lead compound all the to discover and develop novel therapeu- by President and CEO Dr. Trevor Castor, translating into new therapies. few companies are developing these way through our CMC work and then tic strategies. According to Bio’s 2019 In- is to: “Upregulate Alpha-secretase, which Developments in neuroscience are al- compounds for depression, but we be- through the phase 2b study. We want to dustry Analysis report, neurology startups positively impacts amyloid precursor pro- ways uncertain, but some experts, such lieve that there is a fantastic rationale to bring our TR-36 compound through IND received US$1.5 billion in venture funding tein (APP) processing. Both Beta-secre- as Roche CEO Bill Anderson, believe we bring it into the schizophrenia space as enabling studies, to be able to start a in 2018, second only to oncology. This tase and Gamma-secretase cleave APP to are on the cusp of major breakthroughs: well. phase 1 study. On the imaging side, we suggests financiers expect payoffs in the form insoluble amyloid plaques that set “Neuroscience has the potential to be in will continue to find more pharmaceuti- not-too-distant future, perhaps through a in motion tau fiber assembly. In contrast, the 2020s what oncology has been in the How can imaging and AI improve di- cal partners who can use our technology big pharma buyout. Their bet may be well Alpha-secretase cleaves APP into a harm- last decade." agnosis for Parkinson’s? in their own studies, and aim to get the placed too, as industry watchers foresee less and more soluble product that sup- If such is the case, it will be an exciting SC: The current standard of diagnosis for platform through FDA clearance and on big pharma lured by emerging treatments ports new synapse formation and is more road forward for all involved. ■ Parkinson’s can be complicated and can the market as a clinical tool in a year. ■

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Originating Anne-Marie Maman, AM CB Discovery Coleen Burrus &

skyrocketed and the number of dollars Dean Edelman ACADEMIA MOVES coming from business to research has » AM: Executive Director OUTSIDE ITS BUBBLE quadrupled.” Beyond collaboration, some universities CB: Head Corporate Engagement and Foundation Relations have now taken the initiative not only DE: Corporate Engagement and Foundation Relations to advance research, but also to help PRINCETON ENTREPRENEURSHIP COUNCIL DE researchers create commercially viable companies. Rutgers, for example, has Under the current grant system, There is a common perception that much its Rutgers University Biomedical Re- an academic researcher can When did Princeton start making a individual level. We receive a lot of at- CB: There is a strong commitment to the of the research produced by academia search and Innovation Cores (RUBRIC) get all the funding needed to concerted effort to grow its ties to tention from industry because they are triple helix; industry, business and aca- dies in academia without ever having program, which is comprised of experts the business community? interested in pursuing collaborations demia working together. The New Jer- any practical real world application. This from pharma and biotech, including me- conduct drug discovery research CB: Princeton has always had a culture of through various mechanisms such as sey Economic Development Authority is not so often the case as it pertains to dicinal chemists, who are rarely found within their university lab. innovation and cutting-edge research. funding and technology licensing. Their provide incentive packages for univer- the life sciences. America has immeasur- in university settings. The university However to develop a compound Pushing the boundaries of discovery profiles range from large to small sized. sity-related start-ups such as tax credits has always been central. The shift that Companies will approach our team with and funding. For example, startups can able talent coming from its universities also has capabilities in research pathol- to the clinical phase requires a and, in recent years, the life sciences ogy, molecular imaging, and collabo- occurred was around getting the re- a concept or focus and we create the receive additional funding when they are industry has looked to tap academia to rates with Princeton University in high number of preclinical studies search done on campus out to the world links with faculty. housed in an incubator supported by the help develop scientific breakthroughs throughput screening. “Because our requiring millions of dollars that through industry. We help bridge faculty NJEDA. Choose New Jersey launched a that can be leveraged to achieve their staff have extensive experience in the cannot be supported by the and business to work together. In the last Can you highlight some of your part- database called Research with New Jer- commercial goals. Conversely, universi- five years, the number of collaborations sey. It houses the research information pharma industry, they understand what traditional R01 style funding nerships? ties find industry partnerships valuable the basic sciences faculty need, and can has skyrocketed and the number of dol- DE: Many of the major pharmaceutical of six in-state institutions such as faculty, because they help advance their capac- help them source the necessary data to mechanisms. Therefore, if the lars coming from business to research companies are involved with the Princ- awards and patents. This helps industry ity to conduct high quality research, contribute to academic drug develop- researcher wants to move a has quadrupled. eton Catalysis Initiative, a program de- to find a faculty to work with. which can be an influential factor in at- ment,” said David Kimball senior VP for particular compound forward AM: The university commissioned a signed to promote collaborations which tracting high level academic talent and research and economic development at study to determine how best to incor- will result in entirely new fields of re- AM: The NJEDA has a variety of incen- they need to go the route of top tier students. Rutgers University. porate entrepreneurship programs search. Industry representatives attend tives. The Angel Tax Credit has recently In analyzing each of the respective bio- As a result of a greater focus on provid- a biotech startup, where they within our academic offerings. It was symposiums where faculties present shifted from 10% to 20%, thanks to Gov- pharmaceutical clusters throughout the ing tools for commercialization, these can find the funding sources decided that the university should ap- their scientific and administrative initia- ernor Murphy, with additional allowanc- US, universities are their backbone: MIT, universities are now seeing an increas- to develop these potential proach entrepreneurship from what has tives. This provides a space for commu- es for underrepresented minorities and Harvard and Northeastern University in ing number of spinouts that become always been Princeton’s core focus, the nication, idea exchange and partner- women, so it goes up to 25%. This cre- drug candidates. I think that the Boston-Cambridge areas, Stanford successful life science companies. A humanities. What this means is that the ships. Merck, BMS, Johnson & Johnson ates financial motivations for investors to in Silicon Valley, Princeton and Rutgers model of a successful transition can be Universities need to do a better program’s primary purpose is to serve are all part of this initiative. focus on New Jersey startups. in New Jersey, Upenn and Temple in found in Biohaven, which traces its roots job of identifying how to get society collectively. Additionally, we AM: The New Jersey Health Foundation Philadelphia, Columbia and NYU in to Yale, where it was founded on intel- investment philanthropy to maintained other aspects of Princeton’s is another partnership that promotes re- New York and the Research Triangle lectual property from CEO Vlad Coric. ethos, such as strong alumni engage- search collaborations. It provides fund- What are your goals over the next two support this gap in resources to has North Carolina State, Duke and Uni- The company focuses its work on neuro- ment. Some of the resources created to ing for university startups, bridging the years? versity of North Carolina at Chapel Hill. logical innovation and developing novel take lab discoveries to IND. support entrepreneurship on campus gap between research and commercial- CB: My team is tasked with insuring that Each of these universities is world class products that address everything from are: a hub for students, a summer accel- ization. It is a non-profit foundation that faculty that are interested in collaborat- and plays an integral role in geographi- migraine headaches to Alzheimer’s dis- erator, an innovation center for faculty, seeks to advance translational research ing with industry have the means of do- cally anchoring the ecosystem. ease, and had its initial public offering a wet lab and dry lab co-working space through discovery grants and VC fund- ing so. Our focus is strengthening our Although there has always been a re- in 2017. - Anthony Capobianco, and the entrepreneurship council. Entre- ing. For example, they are support- capacity to provide faculty with opportu- lationship between universities and in- Overall, the amplified importance of Founder and President, preneurship is the link between research ing one of our university spin-outs that nities and strengthening the value of the dustry in terms of hiring graduates, in- academia’s role in drug discovery and StemSynergy Therapeutics and the market. The university will help specializes in metastatic breast cancer, links, making sure they have the resourc- dustry is now much more involved than development is an essential one, be- both faculty and students who are inter- Kayothera. The company was founded es they need. We also want to promote ever before when it comes to research. cause the pursuit of interesting ideas ested in turning their innovations into by a faculty member, Yibin Kang, and a the innovative and translational research Coleen Burrus, head of corporate en- and the freedom to question are far companies. grad student, Mark Esposito. They are that is taking place in the university. gagement and foundation relations at more limited in the commercial world. now housed in the Princeton Innovation Princeton University, noted: “The shift This is why academia will continue to How do you go about tapping the re- Center. DE: You cannot create an innovation that occurred was around getting the be leaned on to pursue moonshot sci- sources of the business community? ecosystem in a bubble, you have to be research done on campus out to the entific breakthroughs that hopefully will CB: We participate in industry events In what ways is government policy in connected with a network of players and world through industry. In the last five provide cures to diseases we consider « such as conferences and associations. New Jersey supporting synergies be- with larger infrastructures. We are work- years, the number of collaborations has intractable today. ■ We also meet with companies at an tween university and industry? ing to grow our outreach. ■

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Michael In what ways is Rutgers taking advantage of trends to outsource early drug development and what kind of programs do you have to advance and com- mercialize university research? Pollastri The primary program in the biomedical space is RUBRIC, the Rutgers University Biomedical Research and Innovation Cores. These cores are comprised of experts from pharma and biotech, including medicinal chemists, who are rarely found in Senior Vice Provost university settings. We also offer research pathology, have a molecular imaging center, and collaborate with Princeton University in high throughput screening. PORTLAND Academic Lead Because these staff have extensive experience in the pharma industry, they under- stand what the basic sciences faculty needs, and can help them get the necessary ROUX INSTITUTE AT NORTHEASTERN UNIVERSITY data to contribute to academic drug development.

Can you mention some Rutgers university spin outs? What was the impetus for the Roux Institute at North- To what extent is there a start-up biotech scene and are One example of a company that was spun out of Rutgers is Actinobac Biomed. Dr. eastern University? there any plans for spin-outs? David Scott Kachlany at Rutgers School of Dental Medicine discovered a protein in the The Roux Institute at Northeastern University is designed to There is a large entrepreneurship bend to what we are do- oral cavity that acts as a suppressor of white blood cells. It turns out this protein educate generations of talent for the digital and life sciences ing. Our intent is that the people who do their research here can be useful in suppressing activated mutant white blood cells, such as are pres- sectors, and drive sustained economic growth in Portland, the will be generating intellectual property, which can be spun Kimball ent in lymphoma and leukemia. They formed a company to license this technology state of Maine, and northern New England. We intend to out into the new ventures. Our collaboration model is very from Rutgers and developed this protein as a therapeutic. We helped them raise attract small companies and also incubate new companies in similar to that on our Burlington “Innovation Campus.” We their series A venture capital funding and now, they have submitted their IND. Maine. have a growing number of start-up companies residing there. We are focusing primarily on machine learning (ML) and artifi- A distinguishing feature of that campus is that we are co-lo- What is your vision for the ROI program and how is the university going to cial intelligence (AI) as it interfaces with a variety of fields. The cated with companies like Raytheon and Rogers Corporation, leverage its strengths in biomedical and bioengineering to support it? availability of talent in ML and AI is very limited and in high whose scientists work side by side with Northeastern faculty The Rutgers Optimizes Innovation (ROI) program is one of twelve Research Evalu- demand. This expertise is often built internally within com- and researchers. Companies benefit from the expertise that ation and Commercialization Hubs (REACH) in the country funded by the NIH to panies. This is not a scalable model, so we will be targeting lives within Northeastern, and we are innovating in terms of Senior VP for Research and speed up the translation of biomedical discoveries into commercially viable tech- people who are disciplinary scientists who wish to be trained the intellectual property arrangements that we employ. This Economic Development nologies. It came on the heels of previous accomplishments including the Clinical in machine learning and AI, and thus build the workforce in is the sort of environment that we are looking to build in Port- RUTGERS, and Translational Science Award, a US$29 million award from the NIH, received last this space. land. THE STATE UNIVERSITY year by our medical school. The award mechanism of ROI is called HealthAdvance, OF NEW JERSEY and through it we will team up with the NIH to give faculty up to US$200,000 over How do you foresee the impact of machine learning and What is your long-term vision for the development of the a two-year period for projects that pass the review of industry experts. AI as it pertains to the life sciences industry? Roux Institute? The big challenge is in taking full advantage of the enormous We want to have several hundred learners in the next five Why is New Jersey a good location for startups commercializing research sets of data that the scientific community generates. We can years. We also have aggressive research goals for an opera- from the university? ask deeper questions and apply machine learning and AI as a tion consisting of faculty members, research scientists and Being situated halfway between New York City and Philadelphia, Rutgers–New tool to get answers to questions we cannot obtain by inspec- graduate students who will be cooperating. It is a very excit- Brunswick is the perfect nexus to build a collaborative and integrated hub. An tion. These tools are not widely applied yet. For example, ing opportunity. We have launched an Experiential AI post- Innovation Hub is being planned and will be built in the heart of New Brunswick. this technology powerfully impacts image analysis, such as doc program to attract terminal degree holders to Northeast- There are two fundamental advantages to being in New Jersey. One is the rent image-based phenotypic screening, or in reading radiologi- ern to get two years of training in machine learning and AI prices are cheaper and the other is the unmatched talent pool. Many of the best cal images. The ability to quickly and accurately interpret im- as applied to their discipline. They will be able to teach and minds in drug development are still here from the heyday of big pharma and, as ages can speed the discovery process by speeding analysis do research during this period, and we expect that a number a result, New Jersey has the highest percentage of PhDs per capita of any state. and getting more information out of the data that is obtained. of these postdocs will become faculty members at the Roux Rutgers, the State University of There is huge potential in New Jersey. Institute. New Jersey, was established Northeastern is providing a model of experiential educa- in 1766 In what ways is government policy in New Jersey supporting synergies be- tion. How do you plan to bring this from the Boston cam- Do you have a final message for the life science commu- tween industry and academia? pus to Portland? nity? Governor Murphy re-funded the New Jersey Commission on Science, Innovation The master’s degree programs all have experiential compo- We are learning in real time that global health is American and Technology (CSIT), a group focused on supporting innovation and in-state sci- nents. Since many students will be company employees, their health. People frequently and mistakenly think of global ence and technology initiatives. That program had gone dormant under the Chris- day-to-day jobs will also introduce an experiential aspect to health as a developing country problem. It is, until it arrives tie administration, which was unfortunate. Furthermore, he established an Office their education. There will also be opportunities for students at America’s shores and then we are forced to respond reac- of Innovation to work collaboratively with government, academic, non-profit and to undertake co-op opportunities within these Maine-based tively rather than proactively. This is a risk the US and other private institutions to drive innovation in the state’s economy. The state has also companies. We also hope to host students from elsewhere in Western countries run, by not focusing on tropical diseases. been very active in going overseas to build opportunities for economic develop- the Northeastern network to do co-ops here. We are also ex- For example, Zika virus or dengue virus are now affecting ment, especially for research. The state organizes delegations in an effort to en- panding in Maine our experiential PhD program where com- parts of the US. We are now learning that it is not strategically courage partnerships abroad. Finally, the Evergreen Fund is an initiative where the pany employees can complete their PhDs by doing innovative smart to ignore these kinds of things. ■ state matches 1-1 venture capital investments coming into the state through the research within the company. We already have a number of selling of tax credits. ■ these students across the colleges.

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CONTRACT MANUFACTURING AND GENERICS

» Outsourcing is being fueled by a need to accelerate projects through development, and the clinical pipeline for all drug molecules. This is accompanied by high numbers of product approvals by the FDA and EMA. CDMOs with critical mass and which have made investments to match the evolving needs of the current drug pipeline are well-positioned to serve these growing markets. «

- Steven Klosk, President and CEO, Cambrex

Image courtesy of ©️ 2020 Contract Pharmacal Corp EDITORIAL Global Business Reports Industry Explorations EDITORIAL

Contract release tablets of small molecule drugs, hand, offer drug product development ACQUISITIONS WITH DISCLOSED DEAL VALUES >$100M BETWEEN 2016-2019 to offering a much broader and complex and manufacturing services, active phar- Source: PWC array of services. Spurred by the high maceutical ingredient (API) production, Development cost of drug development, which the and packaging services. There is an in- Area of business Acquirer Target Year Acquirer (acquirer) location Target location Deal value ($m) medical journal Jama estimates to be creasing degree of overlap between and near US$1 billion per drug, pharmaceuti- these two types of service providers: 2017 Life sciences USA USA cal companies acknowledged the need some CDMOs are starting to offer CRO Thermo Fisher Scientific Patheon 7,200 Manufacturing to outsource activities that were not fun- services and vice versa, with the aim of 2016 Lonza CDMO Switzerland Capsugel USA 5,500 damental to their core business. becoming ‘one-stop shops’, covering Today, pharmaceutical companies in- the whole value chain from drug discov- 2019 Thermo Fisher Scientific Life sciences USA Brammer Bio USA 1,700 creasingly outsource research activi- ery to commercialization. The increasing NEW OPPORTUNITIES ties to contract research organizations outsourcing trend in the pharmaceutical 2017 Carlyle, GTCR Private equity USA AMRI USA 1,500 (CROs) as a strategy to stay competitive industry demonstrates the success of this ABOUND and flexible in a world of exponentially business model, as CDMOs are increas- 2019 Catalent CDMO USA Paragon Bioservices USA 1,200 growing knowledge, increasingly sophis- ingly becoming integral parts of pharma- 2017 Pharmaceuticals China India ticated technologies and an unpredict- ceutical companies’ value chains. Fosun Pharma Gland Pharma 1,090 able economic environment. The R&D According to Dr. Ramesh Subramanian, 2017 Catalent CDMO USA Cook Pharmica USA 950 When investment is flowing into the bio- tasks that firms choose to outsource in- chief commercial officer of GVK Bio: pharmaceutical industry at all time highs, clude a wide spectrum of activities from “Partnering with a CRO/CDMO allows 2016 Mylan Pharmaceuticals USA DPT Laboratories USA 950 FDA is approving record numbers of ge- basic research to late-stage develop- firms to run multiple programs - byex neric drugs and near record novel drugs, ment: genetic engineering, target valida- tending their capital runway, resulting in 2016 Ardian Private equity France Unither France 715 it can be expected that manufacturers tion, assay development, efficacy tests in higher probabilities for clinical success. find themselves with plenty of business. animal models, and clinical trials involv- Leading contract organizations provide 2017 AGIC Capital Private equity China Ritedose USA 600 The outsourcing of manufacturing has ing humans. scale, speed, and cost efficiencies that Humanwell Healthcare, Healthcare solutions, 2016 China, USA Epic Pharma USA 550 evolved drastically over the last 20 years, Contract development and manufactur- pharma partners can tap into for optimal PuraCap CDMO from providing commoditized immediate ing organizations (CDMOs), on the other results. In summary, the drive towards Glass, electronics, 2017 AGC Asahi Glass Japan CMC Biologics Denmark 500 ‘Affordable Medicines’ is a significant chemicals, ceramics and positive driver of the growth of CD- 2018 Cambrex CDMO USA Halo Pharma USA 425 MOs.” 2016 AMRI CDMO USA Euticals Italy 358

Market Structure 2018 Cambrex CDMO USA Avista Pharma USA 252

The CDMO market is characterized by 2016 Reipharm CDMO Sweden Kemwell Biopharma India 205 great fragmentation. A report from Kur- Pharmaceuticals, 2017 Clinigen Great Britan Quantum Pharma Great Britain 192 mann partners estimated that the top clinical trials five CDMOs account for only 15% of the 2018 Aurobindo Pharma Pharmaceuticals India Generis Farmaceutica Portugal 154 total CDMO market size. However, there Pharmaceuticals, have been strong efforts to consolidate 2018 Clinigen USA CSM Great Britain 150 clinical trials the sector in recent years. Most pharma- ceutical companies, big and small, are looking to work with a small number of Cambrex over the past two years, when suppliers in order to limit the costs and they acquired Halo Pharma, a contract » risks involved in technology transfers provider of drug-product development and to save time, as time to market is and manufacturing services, for US$425 Emerging biopharma and larger pharma companies have a general request a crucial factor in achieving commercial million, and Avista Pharma Solutions and desire for simplicity and ease of interaction with partners who will success and profitability. To strengthen for US$252 million, which added early- handle multiple steps in the process. Their belief is that, with the right their competitiveness, CDMOs are thus stage development and analytical test- partner and capabilities, those additional steps will be handled by a single choosing to merge, either to extend ing services to their portfolio. Accord- partner and give them meaningfully faster time to data readout or inflection their range of services for existing dos- ing Steven Klosk, president and CEO of point. Ultimately, by having one partner with whom you have a single Master age forms, to enter the market for an- Cambrex:“The pharmaceutical industry Service Agreement (MSA) you can enable them to expedite the processes of other dosage form, or to integrate ge- is increasing the amount of investment it a project, making it easier and more beneficial for the sponsor. ographies. makes in outsourcing across the board, 2019 saw Cambrex go from being a pub- in both development and manufactur- - Peter DeYoung, licly traded entity to private after being ing. There has been a trend over several CEO, acquired by private equity firm Pemira years to reverse the strategy to seek the Piramal Global Pharma Funds for US$2.4 billion. The move fol- lowest-cost provider for outsourcing, lows two large-scale acquisitions by and we continue to see decisions being 73>> « USA BIOPHARMACEUTICALS 2020 68 Industry Explorations Global Business Reports 69 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports Industry Explorations INTERVIEW

Steven Manni Kantipudi Klosk & Dr. Ramesh Subramanian

MK: Chief Executive Officer RS: Chief Commercial Officer GVK BIO CEO MK RS CAMBREX Can you give insights into the strategy and business mod- How has the acquisition of Aragen Bioscience expanded el of GVK BIO? GVK BIO’s capabilities? What progress did Cambrex make in to accelerate projects through develop- three acquisitions since 2016 to build a We call ourselves a CRDO (Contract R&D Organization) to GVK BIO, prior to Aragen, was primarily a small molecule 2019 to cement its status as a leading ment and the clinical pipeline for all drug global network of 12 development and differentiate our mission. By singularly focusing on the area company. The acquisition propelled GVK BIO’s entry into small molecule company? molecules. This is accompanied by high manufacturing sites. These strategic in- of R&D, and by having no competing interests with our cus- biologics, the fastest growing segment in the life sciences The two acquisitions that Cambrex made numbers of product approvals by the vestments and acquisitions have allowed tomers. We partner with firms interested in externalizing R&D industry. With over 25 years of history, Aragen has been a of Halo Pharma and Avista Pharma Solu- FDA and EMA. CDMOs such as Cam- Cambrex to create a broad portfolio of to drive value. We support our customers from concept to standout biologics CRO with a phenomenal track record. tions in late 2018 and early 2019 have brex with critical mass and which have services and expertise to offer virtually all commercialization in small molecules, while assisting in their Three of Aragen’s programs for partners have now advanced transformed Cambrex into a leading made investments to match the evolving of the capabilities that customers require journey from gene to clinic in biologics. Our team is agnos- into commercialization and are now medicines. This empha- full service, end-to-end small molecule needs of the current drug pipeline are to develop and commercialize their small tic towards geography; we invest where the science is best. sis on science has made Aragen an attractive choice for GVK CDMO. These companies have now well positioned to serve these growing molecules. Case in point, to build a differentiated biologics platform, we BIO partners worldwide that are interested in large molecule been integrated into the existing Cam- markets. opted to acquire Aragen BioSciences, a company in the San research. We are now levering Aragen’s expertise by building brex business and we can now provide Looking at small molecules specifically, At what stage are most of Cambrex’s Francisco area, as opposed to building the capability in India. Aragen India: this center is currently supporting bio produc- customers with a full range of drug sub- the number of small molecules being clients and has this changed over Aragen were leaders in cloning and expressing challenging tion and will soon advance into higher value services. ■ stance, drug product and analytical and developed as drug candidates has in- time? proteins, a capability that was of high interest to our custom- testing services across the entire drug creased over the past five years. How- The client base of Cambrex includes a ers. lifecycle. ever, what is noticeable from current wide range of large, mid and small in- In December 2019, Cambrex announced industry data is that 65% of the current novator pharma companies, and has What are GVK BIO’s expansion plans both in the US and Accelerating R&D the completion of its US$2.4 billion ac- clinical pipeline projects are now spon- evolved over time as a reflection of the globally? quisition by an affiliate of the Permira sored by small and virtual companies industry, and as the service offering has For small molecules, we are principally focused on our Indian funds, having been previously publicly- rather than big pharma. For Cambrex, broadened too. Cambrex serves hun- sites for expansion. We have expanded our discovery chemis- traded on the NYSE. The Permira funds’ this situation presents the opportunity dreds of customers around the world try operations significantly in both Bangalore and Hyderabad, investment does not change the com- to approach different potential custom- from the pre-clinical development stage, and now have a team of 1,400 discovery chemists. In addition pany’s focus on offering world-leading ers with a choice of outsourcing models; assisting in the filing of an IND, through to two vivariums (Hyderabad, San Francisco) that support our Global Leader team of around 125 biologists, we are building a third vivari- small molecule services, but will support leveraging our individual business units clinical manufacturing and supply, and in Small & Large Small Molecule the ongoing growth of Cambrex by en- or services, or working with us as an end- onto commercial supply. Currently, Cam- um in Bangalore. Chemical development and manufacturing Molecule R&D Solutions hancing the company’s ability to service to-end partner for the smaller compa- brex produces 120 commercial products, now has two independent sites in Hyderabad and Vizag with Discovery Chemistry and its global customer base. nies that are looking for a collaborative with approximately 40-50 for innovators. over 280 kL capacity. The GVK BIO team is proud to support Biology approach and a smaller supply chain to over 10 IND filings every year, and over 60 chemical devel- 60+ Chemical Development programs Formulation & Analytical manage. opment programs. In addition to drug substance, we have Development What is driving growth in valuations of What goals does Cambrex wish to 10+ IND filings per year CDMO companies? achieve over the next 2 or 3 years? invested in a state-of-the-art formulation development cen- Chemical Development & 25+ Integrated programs The pharmaceutical industry is increas- In recent years, the CDMO space has At present, after the recent acquisitions, ter that assists customers in pre-formulation and formulation Manufacturing ing the amount of investment it makes consolidated as a result of large phar- Cambrex is focusing on growth, and the development, including parenterals, solid orals, opthalmics, 7 Global locations Large Molecule R&D in outsourcing across the board, in both ma wanting to work with fewer suppli- expectations are to achieve above mar- liquids, semi-solids and suspensions. Finally, we are happy 450+ Customers Cell Line Development to announce that our analytical solutions facility was recently development and manufacturing. There ers. Do you see this trend continuing? ket growth rates. There are also ongo- Global leadership in EHS & Quality Protein Production has been a trend over several years to There is no doubt that CDMOs that ing plans to invest both internally and approved by the FDA and supports method development, No Conflict business model Analytical Solutions reverse the strategy to seek the lowest- have critical mass should receive a dis- externally to add capabilities and tech- stability studies, extractables and leachables, among others. cost provider for outsourcing, and we proportionate share of the growth in the nologies to the company’s offering that On biologics, we have added suites to our large molecule op- continue to see decisions being made CDMO space as they have the resourc- customers value and require to bring eration in San Francisco, augmenting our capabilities in both by innovator companies to now seek es, facilities, technical personnel, capa- their therapeutics to market. Our goal is cell line development (CLD) and bio-production. Our CLD Discovery Development Manufacturing partnerships based on quality rather bilities and technologies to be strategic to make it simpler for customers to work business has seen rapid growth this year (over 50%), primarily Leading Small Molecule CRDO Large Molecule Discovery Partner Learn more: due to our expertise to clone and express difficult proteins. than cost, leading to a rise in projects partners to the pharmaceutical industry. with us and leverage the expertise we [email protected] Accelerating R&D being partnered with US and European Cambrex has invested over US$200 mil- have across our global network of sites We have now decided to invest in cell culture manufactur- India | USA | Netherlands CDMOs. lion in its facilities to add further capa- and across all aspects of small molecule ing suites. This will allow seamless scale ups of our CLD pro- www.gvkbio.com www.aragenbio.com Outsourcing is being fueled by a need bilities and capacity, and has undertaken drug development. ■ grams, reducing both lead time and costs. /gvkbio /company/gvk-biosciences /gvkbio

USA BIOPHARMACEUTICALS 2020 70 Industry Explorations Global Business Reports 71 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports Industry Explorations EDITORIAL

<<69 made by innovator companies to now DeYoung continued: “When we look at across multiple contractors or collabora- seek partnerships based on quality rath- large pharma, obviously they have inter- tors, often on different continents. It is Peter er than cost, leading to a rise in projects nal capabilities, but they need to decide not uncommon for companies to have to being partnered with US and European between what they do in house versus ship materials across the world and this DeYoung CDMOs.” with a partner. They often place impor- can create big expenses, vulnerabilities tant projects with us across multiple sites to mishap and lapses in communication. and speak about us being a strategic Despite these drawbacks, more and Strategic Partners partner, providing them with expanded more virtual or semi-virtual biotech capabilities that they may not have in companies continue to be funded that One of the trends in the market is that the way they need and in the timeline re- require less infrastructure. These com- emerging biotech companies are heavily quired. This allows them to have flexibil- panies are expected to even further in- CEO dependent on CDMOs for molecule de- ity of resources, which if everything was tegrate with CROs through equity and PIRAMAL GLOBAL PHARMA velopment, as they simply do not have done internally, they could not meet.” success-based collaborations. resources. Lab space and hiring research- ers can be beyond their capacity. Peter DeYoung, CEO of Piramal Pharma Solu- Virtual Companies Conclusion tions, asserted: “Emerging biopharma What are the biggest areas of oppor- ditional running operation that is already cause when everyone is looking to grow needs to outsource most of the services Another factor contributing to the growth The end goal for biotech and pharma tunity you see for expansion in North producing revenue. However, the site is valuations expand. offered by a CDMO. Our one-stop-shop rate of CROs has been the explosion of companies is to propel forwards devel- America? often far from reaching its full potential. capability and an integrated offering ‘virtual companies’, which contract out oping therapies that improve the quality We are excited to expand our capabilities By acquiring a site that is going well, we What is the contribution of Indian busi- better enables us to meet dynamic and all or most of their development. The of human life. The question is how does in North America, where Piramal Pharma can apply best practices and investment nesses to the US Biotech industry? growing customer demands. That is why success of a startup is existentially de- one innovate, but still make affordable Solutions (PPS) currently has three fa- to accelerate growth. Our integrated offerings are composed we are seeing a lot of growth in what we pendent on efficient use of capital, and medicines? Partnering with a CRO al- cilities: Aurora in Canada, Riverview in We intend to raise growth equity from of multiple steps. We often provide do for emerging biopharma.” the virtual model allows them to keep lows for greater capital efficiency and, Michigan and Lexington in Kentucky. investors for our global pharma solutions one step in North America, while sub- In contrast, big pharma has the resources fixed costs down, such as rent, salaries given the sizeable investments and influx Earlier this year, we announced an invest- and critical care businesses, as well as sequently steps two, three and four are to develop a molecule, but there are op- and other overheads. of talent that has moved into the space ment of CAD$25 million to expand the our OTC drug business in India. This will being done in different geographies portunity costs that factor into how they This is not without its challenges. One in recent years, it is a promising growth Aurora facility. This includes new wings enable us to accelerate both organic and across the world. By providing an over- choose to allocate time and resources. difficult aspect is integrating activities story. ■ with 3,500 sq. feet of incremental space inorganic growth across all three busi- all integrated package, we offer a com- and multiple levels. This will expand Pira- nesses, including Piramal Pharma Solu- bination of North American capabilities mal’s ability to manufacture APIs in that tions. with those from India and Europe to our facility. global customers, fully supported with Can you give an overview of Sunrise is wholesalers and distributors. Our clients dictate market demand, and we deploy The new wing of Riverview was inaugu- What is your view on valuations and seamless project management and tech Himanshu Pharmaceuticals and the areas of fastest products according to their demand. Sun- rated in 2019 with a focus on serving the potential for M&A in the CDMO transfer expertise. growth within the company? Sunrise Pharmaceutical is a manufacturer rise does not currently market any opioids the high potency API market. It received space? We have facilities and capabilities in In- an investment of US$10 million, which Overall, the CDMO industry is experi- dia that provide value for our customers’ Brahmbhatt with all operations in-house. Sunrise has its nor it is planning to in near future. More- was used for new QC labs, better client encing a robust, sustained, strong cus- projects. We have high quality facilities own label and currently has over a dozen over, Sunrise does not market any of its coverage and high potent compound tomer demand. If there is growth in an in drug products and drug substances products in the market. The company is products directly to consumers, nor do we handling at the facility. This enhanced area, then industry players will try to take in India that have been inspected by all continuously investing back into R&D and interact directly with doctors, pharmacist capability enables us to serve the high advantage of that growth. Secondly, de- the major regulators and meet the overall we have been working hard pursuing new or health professionals.The Drug Enforce- potency area of small molecule produc- spite there being several large players, equation for what our customer is seek- Vice President of Development and Sales prospects during the last year. We are cur- ment Administration (DEA) has implement- tion of API’s, which allows us to meet a the industry is still highly fragmented ing. SUNRISE PHARMACEUTICALS rently awaiting at least four or five approv- ed a rigorous quota system on all levels of rapidly growing sub-segment of overall and no one player commands a dramatic als from the FDA. the supply chain and we have been in com- Sunrise’s business model is opportunistic pliance with all those requirements. CDMO support that we are seeing in our share of the market. Ultimately there is What milestones does PPS seeks to in its product selection, which has served customer markets. room for consolidation amongst many of achieve in the next 2 to 3 years? At our Lexington facility we have the abil- the leading players. We are looking to continue our expan- the company well. Some products that we The large drug companies are talking ity to handle containment related sterile In terms of customers wanting to work sion with customers and capabilities in selected are volume-based commoditized about the impending “patent cliff”. Are fill finish, which is a niche area within the with fewer, more relevant partners, North America, India and the U.K. We are products, but several players have exited you seeing that as a potential opportu- already difficult area of injectables. whether they be large pharma or emerg- also excited about how our capabilities the market and hence we were able to nity? ing biopharma, they are all seeking part- can continue to maximise value for our gather a substantial market share. There are many common products on the FDA’s shortage list due to prices having How do you weigh organic growth ners who can do more for them. That is customers. We have a significant number eroded to a point that nobody could af- versus inorganic growth opportuni- driving some CDMOs to look for scale, of customers that have phase 3 projects What are your thoughts on the backlash ford it. Sunrise sees that as an opportunity. ties? while others are looking for capabilities. and trust us with their most important on drug manufacturers related to the Our overall site network has all been ac- Still others look for geographic cover- pipeline products. We are excited to as- opiod crisis? It is better to look at opportunities where quired companies, apart from two. The age. All of them aim to be more relevant sist more partners in launching critical The government and regulators have taken there is a vacuum and, at the same time, approach is a blend of organic and in- to their customers and that drives the and life-saving drugs. Combined with serious action against those that may have pursue some strategic, complex molecules, organic growth. We find that by acquir- desire and need for consolidation. In the capacity enhancements, we believe we perpetrated the crisis, but as far as the ge- such as injectables. This dual strategy has ing an existing business, we get an ad- M&A context, valuations are tricky, be- can add to their development pipeline. ■ neric industry is concerned, our client base worked for Sunrise so far. ■

USA BIOPHARMACEUTICALS 2020 72 Industry Explorations Global Business Reports 73 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports Industry Explorations INTERVIEW

Dr. Jeffrey Gabriele In terms of growth, are you looking to grow organically or through acquisi- tion? Reingold Brambilla For the last four years, we grew by 50% on average every year. 70% of our growth was organic, and 30% came from acquisi- tions. Now we plan to focus on acquisi- tions to fill the gaps from a geographical COO CEO perspective. Our current target is regula- CONTRACT PHARMACAL CORP ALIRA HEALTH tory and clinical acquisitions in Europe. We also want to continue to build our global market access capabilities in Eu- What are some specific technologies arrived. We provide a comprehensive How is COVID-19 affecting your busi- What steps can companies take to ad- not going to get market acceptance and rope, while continuing to strengthen our that CPC is looking to adopt? hemp-based line of products for a health- ness? How might this affect the time- vance their therapeutics and design reimbursement for a particular indica- team in the US. We are a solid dose manufacturer and ier lifestyle. CPC’s expertise for nearly fifty lines for molecule development? better clinical trials? tion, then it is not wise to pursue. identifying more efficient processes years in developing, manufacturing, pack- We are all working hard to adapt and Speed, cost, and success rate are all crit- Over the next two to three years, what makes us stronger at our core expertise. aging and marketing natural products is cope to this fast-changing situation. CPC ical elements. The success rate is very How does focusing on data analytics goals would you like to achieve? In addition, we are looking at new dosage not equaled. There are companies enter- continues to operate, with several modi- difficult for us to control because it is allow you to anticipate issues and ex- We have a particular growth target we forms. We have added liquid fill capsule ing this space without any background, fications put in place to ensure the health connected to the scientific part. Howev- ecute processes more efficiently for want to achieve, and to continue to grow technology, novel packaging delivery sys- let alone a pharma/nutra background. and safety of our staff. With the precau- er, we can help facilitate a higher success clients? into a leading company in the healthcare tems and we are evaluating topicals and CPC has put a lot of energy into making tionary measures and the impact to staff- rate by selecting the right cohort for the Two years ago we acquired a company and life sciences advisory space. The liquid-filling. sure that our customers can be confident ing, we are operating at a reduced capac- study and powering it in the right way. called Clinical Insights, which specialized idea is to have incredible capability and in the safety of their products and the sci- ity. All CPC leadership team members By understanding how the market oper- in advanced analytics. A strong founda- expertise at every level of the organiza- Last May, CPC acquired Florida Phar- ence behind our marketing. Uleva is just are aligned and committed to working ates and not being solely clinical, we can tion in data is essential to support mar- tion. Historically we have always reached maceutical Products (FPP). Why was a start. together to mitigate any impact on deliv- decipher whether or not a study in a par- ket access strategies and make them our targets, so we hope to continue do- this a good deal and how will it impact ering products. Our goal is to make the ticular application is sensible. If you are last. ing the same moving forward. ■ future growth? What are your views on the current workplace a safe place, and we are com- The acquisition of FPP filled a gap at CPC regulatory landscape for hemp supple- municating with as much transparency as in our expertise regarding distribution ments? possible. and marketing of generic drugs. With We believe it will remain status quo for this addition, we added a new portfolio some time and it will be monitored by Might this epidemic create a de-global- of products, customers, and resources. FDA using regulatory discretion as they ization of the manufacturing process? It is also productive that there are long- have with ‘unapproved’ DESI drugs. standing relationships among the lead- We are part of a thriving, global market. ership teams and we are already seeing What are the big trends and innova- This epidemic shows how much we de- the benefits. This is a new silo of revenue tions in packaging? pend on one another and, although I feel for CPC and will substantially accelerate Serialization is something we just put in our strong networks will remain intact, I revenue-growth. place for the Rx market. Outside of the expect to see a push for more domestic US, we distribute and export products manufacturing as companies and gov- What is CPC’s typical client base? that require it, and domestically we are ernments reassess dependencies. CPC We have a very diverse client base. This ready. There’s a growing demand for per- is well positioned with its manufacturing includes big pharma, virtual brands, sonalized medicine and individualized and packaging operations based in New wholesalers, distributors, retailers, in ad- packaging. Getting someone a product York. dition to a large export business. Our that is on-the-go, convenient and easy to core focus is providing innovative con- take is key. Sustainability is also gaining What are CPC’s two to three year tract development, manufacturing and much attention. goals? packaging services to the industry. We We are proactive and opportunistic in must remain nimble and always focus on How are you seeing the margins in our growth strategy while advancing our customer’s needs. We do that by im- packaging today? the course we have identified. Efficiency mersing ourselves into understanding the Packaging is always an area of focus when building across all departments will re- true needs of our partners and becoming reviewing efficiencies. Margins are always main paramount because it makes us a an extension of them. a challenge in a business like ours. We are better partner for our customers. Building adding palletizers and case packers and our generics business and growing or- What is the market opportunity in the CPC has invested a tremendous amount ganically with our existing partners will be hemp space and what is the plan to de- of capital and resources into enhancing a focus. New dosage forms will happen. velop Uleva? our packaging services. In addition, we will be adding more than The future of hemp-based nutrition has 10 billion capacity in tablets/capsules. ■

USA BIOPHARMACEUTICALS 2020 74 Industry Explorations Global Business Reports 75 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports Industry Explorations INTERVIEW

Michael Michael Jeffrey Kamlesh Quirmbach Johnson Speicher Oza

CEO and President CEO Senior Vice President Senior Vice President CORDENPHARMA VISIKOL AVÉMA PHARMA ACG CAPSULES GROUP SOLUTIONS

What are some of CordenPharma’s main business updates since Please provide an overview of Visikol? What is the core expertise and services Avéma Pharma So- How has ACG evolved to meet and capitalize on new our interview in 2019? Visikol is a contract research organization focused on early lutions offers clients? market trends? Looking at the year in review, CordenPharma grew to €386 mil- stage drug discovery and development. The focus of the Avéma Pharma Solutions is a CDMO that is a wholly owned ACG gets involved very early in the process. The company lion in 2019, with organic growth of 24.2% compared to 2018. This company is on imaging, image analysis, digital pathology subsidiary of PL Developments, a leading manufacturer, pack- has a Scientific Business Development team who interact growth was driven by a few key projects, particularly from the US, and advanced in vitro assays. We work with companies ager, and distributor of over-the-counter (OTC) pharmaceutical with R&D and project teams early on and partner with them and we are looking forward to a strong 2020, with about 10% - 12% that range from a few researchers in academia with ven- products and consumer healthcare goods. The fully integrated not just to help them develop formulations, but also assist growth. ture capital funding, all the way to the largest pharma com- environment at Avéma enables companies to bring products to in putting their formulations into a capsule. Our business We also completed a large investment in our CordenPharma Colo- panies in the world such as Pfizer and Merck. 95% of our market more quickly because we offer support at every stage attention is on solid oral dosage forms, which are in hard rado peptide facility in Boulder, CO, by installing a large SPPS reac- work is done on investigational and early drug discovery of development. Avéma supports a multitude of delivery sys- gelatin capsules and anything that is related to getting into tor that allows us to make close to 100 kg of peptides in one batch. projects. tems to our clients including liquid oral drugs, Rx controlled this space is where we would focus. ACG is involved in the In addition, we further invested into our HPAPI manufacturing in- substances, large-volume OTC, pouches and gum. We do de- development of solid oral dosage products as well as in- frastructure, which can handle high potent oncology compounds. What makes 3D imaging a disruptive technology with- velopment work in house and can support pilot trials, commer- haler products. Hard gelatin capsules are also used in drug In Europe, we completed a sizeable investment of about €25 mil- in the pharmaceutical space? cial manufacturing and NDAs and ANDAs. product inhaling devices. lion at our CordenPharma Caponago (IT) facility, where we focus on A significant amount of questions that we are working on the manufacturing of injectable drug products comprised of small with pharma clients are challenging to answer with tra- When we look at the trends in CDMOs today, how do you What technological trends do you foresee for the in- molecules, biologics, peptides and oligonucleotides. Most notably, ditional imaging and traditional cell culture models. For anticipate the supply chain changing because of the COVID dustry? our Caponago facility received FDA approval for our new inject- example, if you are trying to understand how a drug is af- 19? What the industry is chasing after is the ability to take a able manufacturing lines. fecting retinopathy, you are trying to look at vasculature I think deglobalization will take place and a lot of businesses large molecule, put it into a capsule, and get it absorbed in the retina of an eye. That is really challenging to look at will come back to the U.S. Most APIs come from China, are through the gastrointestinal tract. Large molecules are not What have been the main market drivers for CordenPharma’s under a microscope or to use traditional imaging methods. made in India, and are shipped to the United States. Realisti- absorbed or are killed in the acidic medium of the stomach. U.S. investments? To assess the ways in which drugs are actually working in cally, the big companies will be bringing product manufactur- Biologics, such as insulin, tend to be large molecules. De- Our investments are very much in line with increased market de- complex systems, 3D imaging is the best approach to take. ing back, and the quickest way to do that is by partnering with veloping this technology will make life much easier for the mand for HPAPI and injectable capabilities. Furthermore, we A lot of companies also work with us for 3D cell culture a CDMO that has the capability to manufacture products im- consumer. continue to experience a very strong demand for our integrated models – growing complex organoids and microtissues in a mediately. service model, particularly in the development of peptides into in- dish, as traditional 2D cell culture models cannot replicate Does ACG have any expansion plans moving forward? jectables using our integrated network of facilities. the type of biology that they are going after. If you create How do you weigh organic against inorganic growth? ACG is one of the few capsule manufacturing companies We also recently launched an investment in continuous manufac- a 3D tumor model, you can understand how the anti-body We acquired 48 NDAs and sites from Teva last year. In the CMO expanding and building facilities around the world. We turing at CordenPharma Chenôve, France, which will be coming penetrates into the model more effectively and you can world, we thought that being tied in with private label compa- built a new facility in Brazil, which came online in February online shortly – this site will be our Centre of Excellence for Con- better replicate what is happening within the body. nies could be a negative, because it would be hard to do busi- 2019. We also expanded our facility in Croatia to more than tinuous Manufacturing going forward. ness with larger players that we compete against. However, double its capacity. We are building another facility in India Which areas have been driving business growth for being associated with private label companies has brought us next to our existing facility, and the new facility will come Does CordenPharma plan to supplement its organic growth Visikol? significant opportunities, as companies that want to get out of online in October 2020. Moving forward, we aim to further strategy with acquisitions? Visikol does a lot of work in the area of toxicity safety, for manufacturing these drugs come to us to make them. expand our presence in the Chinese and Japanese markets. As there continues to be consolidation in the industry, we recog- example, figuring out if compounds have adverse toxicol- nize the importance of our own growth. We have identified certain ogy consequences primarily in the liver. The liver is one What is your 2 to 3 year vision for Avéma? What are ACG’s objectives for 2020? gaps in our service offering today across our four platforms -small of the main reasons why drugs fail and a lot of companies Our primary goal is to land at least three major base customers. We believe that the market leadership of putting products molecules, injectables, highly potent & oncology, and peptides, working with us want to figure out what is happening to We have two Fortune 100 pharma companies already in-house. into capsules has fallen onto our shoulders as other manu- lipids & carbohydrates – and are specifically looking for acquisi- the liver. In terms of efficacy, the oncology space is a huge We are looking to double the size of our manufacturing sites. facturers are not focusing on the capsule business as much tions across these four platforms to make our offering stronger. ■ driver for business, specifically immuno-oncology. ■ We are looking to expand our R&D plant in Miami as well. ■ as we are. ■

USA BIOPHARMACEUTICALS 2020 76 Industry Explorations Global Business Reports 77 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations EDITORIAL

pricing is forcing companies to consider NUMBER OF US FDA ANDA APPROVALS PER FISCAL YEAR Generics new strategies to survive and remain Source: FDA, clinicaltrials.gov, CMR profitable. “The essence of a success- Existing generics First generics ful generics strategy is to lower cost of goods as much as possible, because 1,171 you can’t dictate price and the market 971 price of drugs gravitates toward the 937 FIERCE COMPETITION 835 lowest cost producer… There are two DRIVES DOWN COSTS trends that I believe will occur as a result 597 619 612 of decreasing costs. One will be consoli- 565 535 500 dation within the industry. That means taking companies that are marginally profitable and combining them to lever- 25% 16% 16% 20% 19% 15% 9% 9% 10% 7% In a country where eye-popping pre- in upfront research costs means that, gotiating prices separately, Walgreens age the overhead across a bigger port- scription drug prices are commonplace, although generic medicines have the and AmerisourceBegren now buy as folio of products and sales. Secondly, 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 inexpensive generic drugs have acted same therapeutic effect as their brand- one group; Rite Aid, Walmart and finding and implementing technologies as a crucial counterweight. Generics ed counterparts, they are typically sold McKesson do the same, and CVS and that reduce the cost of goods. This are a major boon to society and to fu- at substantial discounts: an estimated Cardinal Health have also joined forces. could be done be through continuous GENERIC COMPETITION AND DRUG PRICES ture innovators in the pharma industry 80 to 85% less, compared with the price According to Jay Shukla, president and manufacturing or new ways of develop- Source: IQvia Invoice (based sales and units sold to pharmacies) because the expiry of patents and the of the brand-name medicine. This trans- CEO of Nivagen: “This puts pressures ing API’s. To be competitive, people are AMP (average manufacturer price) going to look to cut costs throughout loss of market exclusivity herald a mas- lates into huge cost savings for taxpay- on suppliers and lowers prices. It de- 8 sive commoditization of prices for most ers, who fund government sponsored creases the market size for suppliers to the continuum of the manufacturing pharmaceutical products. That, in turn, Medicare and Medicaid programs. Ac- sell to. It also exposes business to risks process,” said James Gale, founding frees up resources to pay for newer, in- cording to IQVIA, generic drugs saved when issues arise in areas, such as regu- partner and managing director of Sig- 6 novative treatments, that pharma com- the U.S. healthcare system in excess of lation, patenting and logistics. In the net Healthcare Partners. panies otherwise would not have the US$1.6 trillion over the last decade. pharmaceuticals space this is a particu- Following this trend, Pfizer has now 4 incentive to pursue. While generics play an essential role larly delicate scenario, because when spun off its Upjohn business that sells The way the system functions is that, in the healthcare system, the past five production halts, it is time and resource off-patent drugs and is expected to 2 once a patent is lifted, generics busi- years have been a difficult period for consuming to restart it. Nivagen stress- merge with Mylan to create a new com- nesses look to find alternative ways to their producers. Margins have slimmed es the value of its supply track record pany called Viatris later in 2020. From GENERIC-TO-BRAND PRICE RATIO manufacture a drug that should work considerably and multiples have steeply and our role in helping buyers diversify Pfizer’s end, Mylan comes cheap, as the 0 identically to the brand-name version. fallen. The reason for this trend is that risk.” company was worth US$25 billion just 123456789 10+ NUMBER OF GENERIC PRODUCERS Patent expiration puts about 10-15% of buyers in the market have consolidated In addition to consolidation amongst last year, but had a market cap below total industry revenues at risk of signifi- in a big way. Rather than buying and ne- the buyers, the deflationary pressure on US$10 billion at the time the acquisition cant price erosion at any given period, was announced. This merger illustrates US GENERIC FILL RATES BY DISEASE AREA, % OF PRESCRIPTIONS and has done so consistently for several efforts to scale up in order to help the Source: IQvia decades. The system has proven so cost new business push back on pricing effective that today, 90% of the approxi- » pressure. 100% mately 6 billion monthly prescriptions Because margins have tightened and written each year in the US are filled companies can only cut costs up to a 80% with generic drugs, according to the The global specialty drugs market has expanded and will present certain point, some generics produc- UBS figures. opportunities for generic growth in the oncology, infectious ers are trying to target less crowded Managing to incentivize innovation diseases, multiple sclerosis and hepatitis segments. Development areas, such as those on the FDA’s drug 60% while also ensuring drug affordability is shortage list. “There are many com- and commercialization of specialty generics drug are more complex always a balancing act, because it takes mon products on the FDA’s shortage 40% a long time to bring a new drug to mar- when compared with conventional generics drugs, and greater list, due to prices having eroded to a ket. Consequently, a period of exclusiv- opportunities are available for generic companies with capabilities in point that nobody could afford to pro- 20% ity is needed to allow drug companies this area. duce them.... Sunrise sees that as an op- to recoup the costs associated with in- portunity. Instead of focusing on those troducing a new drug. Generic drugs blockbuster molecules, which three 0 cost less than their brand-name coun- or four companies are working on, it is terparts because generic drug appli- - Marc Kikuchi, better to look at opportunities where HIV ADHD cants do not have to repeat animal and there is a vacuum and, at the same time, Asthma Diabetes

CEO and Head of North American Generics, Oncology Hepatitis C Cholesterol clinical studies that were required of the pursue some strategic, complex mole- Depression Dr. Reddy’s Laboratories brand-name medicines to demonstrate cules, such as injectables,” pointed out Skin conditions Contraceptive s Multiple sclerosis

Himanshu Brahmbhatt, vice president Heartburn / Ulcers safety and effectiveness. This is why the Pain / Inflammation application is called an abbreviated new of development and sales, Sunrise Phar- drug application (ANDA). The reduction « maceuticals. High BP / Heart Disease USA BIOPHARMACEUTICALS 2020 78 Industry Explorations Global Business Reports 79 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

OTC Paul » Another essential part of managing Without OTC medicines healthcare costs in the US are over-the- counter (OTC) medications. Millions of Without OTC medicines Hennessey Americans rely on OTC products as an accessible and effective solution for 90% We are seeing much of the commonly occurring conditions. These healthcare investment being medicines are a critical component in OF90% CONSUMERS advancing consumer health because channeled towards the they allow people to treat or manage OF CONSUMERwould have gone to S Senior Vice President – Operations, Quality and Technical Services newer, innovative areas of many health conditions conveniently the doctor instead ADVANTICE HEALTH treatment like gene therapy and successfully. Because they enable would have gone to people to self-treat, OTC medicines the doctor instead and certain expensive cancer every save the health systems valuable re- immunotherapies, like Car-T. sources and can save consumers time every Because of their growing and money. What was the motivation for establishing Advantice? potential partnerships. In some of these conferences we are cost to the payors, there is a One of the trends in OTC healthcare is RoundTable Healthcare Partners has been very active in the able to meet with new companies that we were not aware of rationing of dollars for other patients are becoming more proactive $1 healthcare space since its conception. The executives and the and brainstorm new ideas. in solving their health problems and are operating partners all have backgrounds in healthcare. They therapeutics. At the low end looking online as well as to brick and SPENT$1 ON understand the nuances of the industry and what it takes to What have been the biggest challenges in terms of starting of the spectrum, there are the mortar pharmacies to take preventa- drive growth and profitability. They were active in other parts OTC MEDICINES Advantice Health and becoming successful? lower-technology products, like tive measures. According to Paul Hen- SPENT ON of life sciences such as contract manufacturing and durable Building the culture of a company into a high-performance nessey, senior vice president of opera- medical equipment. Moberg Pharma AB decided to shed team is our biggest priority. We believe that culture drives OTC consumer health products, saves the U.S. healthcare system tions, quality and technical services at OTC MEDICINES their OTC business and focus on developing a prescription business results. We are through the integration process with generics or 505(b)(2) products, Advantice Health, a newly formed com- saves the U.S. healthcare system drug, which created the acquisition opportunity for RoundTa- the prior owner and have built systems and processes that we which are being pressured as pany that acquires and builds health and MORE THAN ble. It was a perfect opportunity for RoundTable to make the can scale and add on additional brands. to reimbursement and pricing. wellness brands: “Consumers are trying investment in an OTC platform focused on health and well- to take more charge of their health care MORE THAN ness brands. Advantice Health was thus formed and we are Consumer products, while at Which brands are the fastest growing at the moment? decisions. Consumers have information focused on building the Kerasal®, New-Skin®, Dermoplast® Kerasal has been our biggest growth driver over the past the lower end of the technology at their fingertips. They are looking for $7 and Domeboro® brands. year. It is a reflection of the fact that consumers want to look spectrum, have brand name solutions to common problems they un- better and take care of themselves. Foot care is an area where Source: Source Healthcare Products Association recognition, and are relied on derstand. That is one reason why one of $7 Can you give us a run down of your product line and ex- there is large potential if consumers are made aware of the of- our fastest growing segments is online plain the focus? ferings. It is a small percentage of household penetration and by consumers for everyday Source: Source Healthcare Products Association through Amazon. Companies must have Our mission statement is to help consumers look and feel we know the incidence rates are higher. Also, our incremental treatment. There is generally a strong online presence to succeed better through superior health care solutions. We have well investments in New-Skin paid off this past year, growing our a steady demand for these in today’s marketplace. The consumer recognized brands that people are familiar with and we be- share in an establish category. products and investor interest continues to trend towards self-care, lieve that, with some innovation, we can expand these brands and OTC brands are well positioned in the lower end of the technology spec- into other relevant segments. We are looking at them with What is your opinion on why consumers are more involved has followed. this environment” trum, have brand name recognition, and fresh eyes and studying the marketing opportunities from in choosing OTC products? Although not nearly as prevalent in the are relied on by consumers for everyday an innovation perspective. We want to expand these brands It is mainly because consumers are trying to take more charge news, as novel therapies or generics, treatment. There is generally a steady organically through increased investment and improved mar- of their health care decisions. Consumers have information one should not underestimate the value demand for these products and inves- keting campaigns as well as new product innovation. at their fingertips. They are looking for solutions to common these brands can generate. According tor interest has followed.” problems that they understand. That is one reason why one - James Gale, to James Gale: “We are seeing much of Are you looking to diversify the product offering and how of our fastest growing segments is online through Amazon. Founding Partner and the healthcare investment being chan- Conclusion do you balance in-house development with brand acquisi- You must have a strong online presence to succeed in today’s Managing Director, neled towards the newer, innovative tions? marketplace. The consumer continues to trend towards self- areas of treatment like gene therapy Generics are not glamorous, but they Signet Healthcare Partners First and foremost, we are focused on building the brands care and OTC brands are well positioned in this environment. and certain expensive cancer immuno- are a linchpin of healthcare in the US. we have today. We want to become a world class acquirer therapies, like Car-T. Because of their Going forward, there will continue to be and builder of health and wellness brands. We are constantly What are some goals you would like to achieve at Advan- growing cost to the payors, there is a ra- demand both for great brands and new looking for good add-on acquisitions that would complement tice over the next two years? tioning of dollars for other therapeutics. generics and biosimilars that replace our existing portfolio. One is organizational; we want to put together the best team At the low end of the spectrum, there some of the existing blockbuster drugs possible and fill the organization with great people that share are the lower-technology products, like most people are familiar with today. De- Would growing organically require a lot more resources? our vision. Second, making sure we have a strategy to grow OTC consumer health products, gener- spite pressure on pricing, there is still Yes, for that reason we are looking for partners in that area. our current brands and find ways to continue to grow market ics or 505(b)(2) products, which are be- an abundance of opportunity to bring We are talking with existing and potentially new partners that share. Third, we want to consistently bring product innova- « ing pressured as to reimbursement and drugs that manage and cure health is- have research capabilities and can us down that organic path. tion to help consumers find better ways to take care of them- pricing. Consumer products, while at sues at an affordable cost. ■ That is why CPhI is so important to us. It brings us closer to selves. ■

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Marc Eric Kikuchi Falcand

CEO and Head of North American Generics Vice President, Head of Business Development and Licensing DR. REDDY’S LABORATORIES SERVIER GROUP

When we spoke last year, Dr. Reddy’s core capabilities in R&D to develop dif- missioning of a brand new single-use had initiated a strategic realignment ferentiated products that provide mean- disposable manufacturing facility and Servier Group opened its first US of- our presence in the United States when research phase. Servier research in on- in its growth strategy. What progress ingful health-economic outcomes to pa- have plans for future expansion to sup- fice in Cambridge, MA in 2018. What we acquired Shire’s oncology branch in cology is focused on treatments target- has been made over the last year in tients and payers and collaborate with port production of our growing portfolio is the primary objective of this office? 2018, and we are continuing to cement ing the restoration of programmed cell this regard? the right partners to commercialize these of products. Building a notable presence in the high- our status as a recognized oncology key death of cancerous cells (apoptosis) and Dr. Reddy’s has been on a transforma- assets in the marketplace. ly competitive U.S. market has been an player both in the United States and mobilizing the immune system against tional journey for the last two years. Dr. Reddy’s has zero debt on its books, aspiration of Servier’s for years. When around the world by investigating new cancerous cells (immuno-oncology). We re-aligned our strategic priorities to In what ways is Dr. Reddy’s working to how would you characterize your we opened our BioInnovation office in combinations of molecules, including focus on seven chosen growth spaces. bring down the cost of treatments for strategy to invest excess cash moving Cambridge in 2018, we were just kicking BH3 mimetics, CAR-T cell therapy, and How has the development of CAR- These include: US, India, China, Russia, opioid addiction? forward? off our strategic plan for securing a foot- next-generation immune checkpoint in- T cells targeting cancer ushered in EU, API and Global Hospitals. All these As a result of our hard-fought battle to We continue to evaluate a number of in- hold in the United States, and later that hibitors. Over the next two years, we’re a new era of therapies based on the businesses are now operating under the launch the generic version of Subox- organic opportunities both for the U.S. same year we opened our first official aiming for oncology to account for 50% adaptability of living cells? How are guiding principle of achieving self-sus- one®, physicians can medically treat and other strategic geographies. For ex- U.S. Servier outpost, Servier Pharma- of our global R&D budget. Servier and Allogene Therapeutics tainability with the aspiration to meet two opioid addiction with a more affordable ample, Dr. Reddy’s recently acquired part ceuticals. Headquartered in the Seaport partnering to bring drugs to market key financial metrics of 25% EBIDTA and generic version of buprenorphine and of Wockhardt’s India business for US$270 district of Boston, Servier Pharmaceu- From a revenue standpoint which ar- in this area? 25% ROCE. We have made significant naloxone. Most recently, we announced million and, in the past 18 months, we ticals has grown to more than 100 em- eas of your business were strongest With the development of CAR-T cells, progress in last few quarters, with strong the launch of Naloxone Hydrochloride have placed bids of over US$2.5 billion ployees, and that figure is projected to in 2019 and what are the most impor- we’ve entered into an era of more per- growth witnessed across the key perfor- Injection USP, 2 mg/2 mL (1 mg/mL) Sin- for acquisition opportunities in the US. double within five years. Servier now has tant trends driving your strategy? sonalized, targeted treatments. This mance parameters. While we continue to gle-dose Prefilled Syringe, a therapeutic The focus remains on investing in the two oncology products on the market. Our global revenue in 2018/2019 to- means that we’re in the early stages of progress well on the organic growth for equivalent generic version of Narcan® right opportunities that would be syner- Oncology treatment and care will be the talled at 4.6 billion euros. Cardiology harnessing and developing the body’s each of our focused businesses, we are (naloxone hydrochloride) Injection USP, gistic and complement Dr. Reddy’s exist- immediate focus in the United States, continues to be one of our strongest ar- natural defence systems to fight dis- also evaluating multiple inorganic oppor- approved by the U.S. Food and Drug ing capabilities and/or product portfolio. although plans for expansion to other eas and has excellent prospects in the eases like cancer. In January 2019, we tunities which can accelerate our growth Administration. Naloxone is our second therapeutic areas and patient communi- pipeline, including new fixed drug com- announced that the FDA had cleared journey further to reach more patients, product to market that has been desig- What are the most significant patent ties are underway. binations, which will likely help drive on- the IND application for ALLO-501 in and create value for all stakeholders. nated as a Competitive Generic Therapy cliffs on the horizon that present an Both Servier Pharmaceuticals and Servi- going strength. Our increased focus in patients with relapsed/refractory non- (CGT) by the USFDA. With a CGT desig- opportunity for Dr. Reddy’s to offer er BioInnovation represent a major step oncology has led to promising growth, Hodgkin lymphoma. Servier partnered One of Dr. Reddy’s areas of focus is nation, we have 180-day CGT exclusivity generics? forward in Servier Group’s global ambi- with our global oncology revenue grow- with Allogene Therapeutics on the de- on optimizing the business risk quo- to market this affordable product. In addition to opportunities for NCE-1 tions, and they embody our two-fold ing by 120%. Simultaneously, we’ve velopment of this drug, and we’re also tient through the partnership model filings for small molecules, other types objective: to develop a portfolio of in- been expanding our generic activities working with additional partners to de- on high-risk projects. Can you give an To what extent has Dr. Reddy’s built of drugs will present important oppor- novative drugs, and to expand Servier’s to now include 1500 medicines. velop and manufacture lentiviral vectors example of how this strategy is being out its Biologics business over the past tunities for Dr. Reddy’s. For example, presence worldwide to bring life-saving to support allogenic CAR-T cell technol- manifested in the US? few years? the global specialty drugs market has treatments to greater numbers of pa- What is the current state of Servier’s ogy development. At JPM earlier this year, we talked about Dr Reddy’s is focused on developing bio- expanded and will present opportuni- tients around the world. R&D pipeline? our strategic approach to create maxi- similars for global geographies, and we ties for generic growth in the oncology, We have more than 30 projects in clini- What objectives does Servier Group mum value for the organization while are currently selling six products, while infectious diseases, multiple sclerosis What are the biggest areas of oppor- cal development, including 17 new mo- seek to achieve in 2020? limiting the risk or exposure through developing a pipeline of products for and hepatitis segments, particularly the tunity for Servier Group to expand? lecular entities, as well as 32 research We are reaffirming our commitment partnership model. While this approach treatments in oncology and immunol- growing demand for generic drugs in the Globally, we’re continuing to channel projects. Two of the molecules we are to CSR by aiming to reduce our CO2 is applicable to all the high-risk/invest- ogy. We have approvals in more than oncology area. Since development and our focus in the five therapeutic areas investigating are in phase 3 of clinical emissions by 25%, and we will be tak- ments projects across the organization, 20 countries around the world. Also we commercialization of specialty generics where we see incredible opportunity: study. ing actions in 2020 that will set us on the we have initiated executing on this strat- have begun enrolling patients in clinical drug are more complex when compared cardiology, immuno-inflammatory, neu- Currently, we have six oncology treat- right path to achieve that goal by 2030. egy with the divestiture of the dermatol- trials in our Rituximab biosimilar product with conventional generics drugs, great- roscience, metabolism and oncology. ments available to patients, with an Overall, Servier is well-positioned for ogy and neurology brands in US market. that will support approvals in the US and er opportunities are available for generic Of note, we’re placing an increased additional 12 drug candidates in clini- long-term success and we’re not slow- Going forward, we are focusing on our EU. We have recently completed com- companies with capabilities in this area.■ emphasis on oncology. We founded cal development and 17 projects in the ing down. ■

USA BIOPHARMACEUTICALS 2020 82 Industry Explorations Global Business Reports 83 USA BIOPHARMACEUTICALS 2020 GBR • Industry Explorations • USA BIOPHARMACEUTICALS 2020

TECHNOLOGY AND REGULATORY SERVICES

» There is a race between health care companies trying to understand technology and technology companies trying to understand health care. There are a lot of tech companies focused on big data, creating health care entities and forming partnerships and alliances. The pace at which data is created is been unprecedented… The industry must figure out how it will grapple with this data to access what is relevant, use it to test hypotheses, prototype, test and validate and build it into a business model, all the while respecting privacy laws. «

- Arda Ural, Partner and Life Sciences Sector Strategy and Transactions Leader, Ernst & Young LLP

Image courtesy of Systech International EDITORIAL Global Business Reports Industry Explorations INTERVIEW

Disruptive Ed Technology Ikeguchi

CEO AI AND DATA SCIENCE AICURE USHER IN A NEW ERA OF CLINICAL TRIALS

What challenges in the biopharmaceuticals space are AI understanding of human interaction with medical therapy. Why and better data collection helping address? a person decides to take their medication or not is paramount The golden question is how to improve the operational pro- to understanding how a medication will fare in the real world. cess for pharma so as to shorten the time to market of their It is said that great drugs are gener- new medications and products. Artificial intelligence (AI) is en- MACHINE AND DEEP LEARNING STUDIES ON PUBMED.COM How receptive is the U.S. pharmaceutical industry to AI ally made as a result of great patient hancing data analytics and giving us access to a number of technology adoption? data. The pace at which data is being Source: The Medical Futurist different modalities for data collection, such as wearables and Pharma has been able to adopt technology in a very robust created today is unparalleled, and in- mobile applications. It is also resulting in better insights and al- and welcoming way. With that being said, pharma is a regu- Number of studies creasingly pharma is paying attention to 8,000 lowing for more assertive predictability. These two aspects are lated industry and they have to take on new technologies with the opportunity that the effective har- improving decision making. Historical information can be used some caution to make sure that products are of medical grade. nessing of data can bring throughout to plot trends to inform executives what to expect, so that deci- It has become clear that there is both an interest and a need the lifecycle of a drug. From discovery 7,000 sions can be made in advance. That is where the value of AI is to define new clinical endpoints and methods for assessing through to commercialization and use, contributing most to the drug development lifecycle. patient outcomes. Pharma and regulators are eagerly seeking new technologies are being introduced We are working towards objective, numerically quantifiable in- new ways of assessing disease that are more accurate and less that are forcing companies, researchers 6,000 dicators of how patients are doing over time. Ultimately, we subjective. and doctors to reconsider some of their should be able to identify subjects who are at risk of study more antiquated practices. 5,000 dropout based upon their pattern of study drug ingestion. If What are AiCure’s growth plans? One area with huge potential is in clini- we can predict, identify and prevent study drop-outs, we can Our approach to business growth is to show value and return- cal trials. While AI is yet to be widely reduce study time cycles and contribute to statistical integrity. on-investment to our partners. Simply put, we provide the adopted and applied to clinical trials, 4,000 In sum, AiCure makes clinical trials more effective and miti- foundations of the science and data that are needed to assess it has the potential to transform their gates risk for pharma companies. a new drug. Instead of a client-vendor relationship, we develop development. The applications of AI strong scientific collaborations. 3,000 could lead to faster, safer and signifi- Can you give us an overview of your technology platform In 2019, we launched a program called AiPEX™ (AiCure’s Part- cantly less expensive clinical trials. Ed and explain how the data capture works? nerships for Excellence), in which Syneos Health™, the only ful- Ikeguchi, president and chief medical 2,000 We have a suite of adherence products, e-pro and digital bio- ly integrated biopharmaceutical solutions organization which officer of AiCure, an AI and advanced markers. AiCure provides software for mobile devices that we includes a contract research organization (CRO) and contract data analytics company with intelligent put into the hands of patients and subjects in clinical trials. We commercial organization (CCO), has been an exemplary part- software that captures and understands 1,000 are able to support the patient through the process by ensur- ner. Together, we have made outstanding progress to create behavioral data, pointed out: “AI can ing they stick to the clinical trial protocol, by monitoring that a unique offering for the market where we aim to deliver on a provide pharma with deeper insights they take medications on time and helping them to ingest the site network that is pre-qualified and trained to deliver unprec- 0 to help inform their decisions. We are medication in the right way. For the pharmaceutical sponsors, edented patient engagement, improved adherence, digital 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 working towards objective, numerically we help corroborate that the clinical trial is conducted properly. biomarkers and quantifiably better data. quantifiable indicators of how patients Confirmation that the patient is ingesting the medication is the are doing over time. Ultimately, we integrity. In sum, we can make clinical in a more effective way. In drug discov- gold standard for what the industry is seeking. We can assure What are the company’s main objectives and how do you should be able to identify subjects who trials more effective and mitigate risk ery, J.P. Morgan’s Peter Meath posits: sponsors that their medication’s pharmacodynamics will have plan to pursue them? are at risk of study dropout based upon for pharma companies.” “Using AI can improve the hit rate and the best chance to manifest in their subjects as expected, and We want to make an impact on clinical outcomes and materi- their pattern of study drug ingestion. In addition to clinical trials, AI technol- target rate, while also making it more ef- achieve this remotely from the comfort of patient’s homes. ally improve the way pharma handles new drug development. If we can predict, identify and prevent ogy has great potential in areas like im- ficient and cost effective. It also helps It is about improving the richness of the data as much as the Our unique value chain begins with the fact that our technol- study dropouts, we can reduce study aging, where it can assist in digesting make the value proposition more evi- accuracy. We have for many years positioned ourselves not ogy interacts directly with the study subject every time they time cycles and contribute to statistical medical data used to make diagnoses dent to the market.” 88>> only as an adherence product, but also as a contributor to the dose. ■

USA BIOPHARMACEUTICALS 2020 86 Industry Explorations Global Business Reports 87 USA BIOPHARMACEUTICALS 2020 EDITORIAL Global Business Reports Industry Explorations INTERVIEW

Image courtesy of Systech International Thomas Halliday

Global Business Head DECISION RESOURCES GROUP

Can you describe the growth of Decision Resources Group panies to create an end-to-end offering that spans the entire (DRG) over the last year? lifecycle of a device or molecule. This combination is extremely 2019 was our best year for the past seven years; we grew our powerful – and a disruptive play in the marketplace. through large swaths of data and pro- top line by 9% and our bottom line also saw significant growth, vide market research, real world data, driven by our commercial team’s focused approach penetrating What are the most important ways in which AI is enhanc- » and disease-area expertise. “Having broader markets. ing data and analysis, and how is this helping customers to the need to know much more about the From a products point of view, our data analytics vertical grew make better decisions? Why a person decides to take their medication or not is paramount marketplace at an earlier stage plays very fast, reflecting a growing need among life science compa- Just by way of example, recently, we worked with a biopharma to understanding how a medication will fare in the real world. very strongly into what we do. There is a nies for real world evidence to demonstrate value, along with on the launch of a product for a severely underdiagnosed con- Reasons such as side effects may lead to someone’s decision to great need for information, knowledge a shift towards incorporating real world data-driven insights, in dition. A look at our claims data repository, which covers 300 and intelligence,” said Thomas Halliday, addition to those derived from traditional methodologies like million lives, showed only 150,000 diagnosed patients in the discontinue treatment, and it is critical that sponsors be made aware. CEO of Decision Resources Group. primary market research. U.S., but the company’s clinical team estimated more like 2-3 Another area of promise in data analyt- Over the last year there has been a big shift in our company million sufferers. ics is assimilation: the idea that siloed from being a product-led business to being more customer So how to identify these undiagnosed patients? Our data sci- data has enormous latent potential - Ed Ikeguchi, centric. entists and epidemiology analysts, working closely with the when harnessed and shared properly. company’s brand and medical teams, were able to construct CEO, Pharmafusion is taking on this issue What led to Piramal’s decision to sell the company to Clari- a patient profile based on disease marker combinations and AiCure with their platform that allows for ho- vate? symptoms, which show up in claims and EHR data. We were listic decision making. According to the Piramal acquired DRG approximately seven years ago. From then able to use machine learning to validate and strengthen company’s founder and CEO Jonathan the start, their strategy was very clear in that they were going our model, which allowed us to build an algorithm that would Retano: “Companies have data every- to exit the investment at some point. Given the growth and reveal the true size of the patient population and identify a where, but do not have answers nor business turnaround of DRG in 2019, Piramal felt that it was key dynamic driving diagnosis. Based on this information, the <<86 « insight, as the data has not been uni- the right time. company was able to refine its physician targeting and mes- With a capacity to perform complex ered knowledge graph can digest large fied and synthesized. The traditional Entering an agreement with Clarivate was a good opportunity saging to aid different specialists in correctly diagnosing these analysis much faster than a human can, volumes of scientific literature and bio- approach in pharma is that everything for our customers to benefit, as Clarivate has complimentary of- patients, potentially saving them months or years of misdiag- AI helps researchers comb through medical research to find links between has been stratified. The data is owned ferings to ours. They have an excellent, diverse customer base noses and improving their health outcomes. complex data to find different uses for the genetic and biological properties of by a department or controlled by an IT and truly global footprint. existing drugs, help define new drug diseases and the composition and ac- resource. When you think of data as an What does the future hold for DRG in the data science combinations, or identify opportunities tion of drugs. asset, it has to be fluid and easily as- How does the acquisition expand Clarivate’s capabilities in space in general? for personalized, targeted treatments. similated into the whole so that it can the life sciences space? We are living in a time where our customers have to do much This capacity is being applied to solve be shared.” We wanted to get to a point where we can offer true outcome- more with less and at a faster rate. The need for quality, real- the COVID-19 pandemic. A number of Data Insights driven solutions, from bench to bedside. The combination of time business intelligence and the expertise to put it in context research projects are using AI to iden- DRG’s offerings with Cortellis, the Clarivate suite of life sciences is ever more urgent in the complex and fast-changing business tify drugs that were developed to fight Alongside the build out in AI capabili- Conclusion intelligence solutions, empowers us to do that. environment today’s biotechs face. The kinds of information other diseases, but could now be re- ties, the explosion of data has provided Clarivate’s life sciences business is strong in R&D, helping com- and insights tools we’re developing, together with our Clarivate purposed to take on coronavirus. By big opportunities for companies har- When it comes to advancing drug de- panies discover, develop and bring new treatments or devices colleagues, will help biotechs get more targeted therapeutics studying the molecular setup of existing nessing data to provide market insights. velopment to the key inflection points, to market, whereas DRG helps companies commercialize their to market faster, better understand and engage their custom- drugs with AI, companies want to iden- In March of 2020, Clarivate Analytics data is the ultimate currency of progress products, supporting them with patient, provider, payer and ers, and smooth some of the kinks out of our systems of health- tify which ones might disrupt the way purchased Decesion Resource Group and value. For that reason, companies market insights. We help our clients assess the scale of an op- care payment and delivery to ensure that patients can access COVID-19 works. from Piramal for US$950 million. The will continue to invest in AI and insight portunity, ensure that patients can access medicines, fine-tune life-saving treatments, and that payers know they’re getting BenevolentAI, for example, began turn- deal signals the great potential and platforms that enhance their ability to launch strategies, better engage patients and healthcare pro- their money’s worth. We’re tremendously excited to be in this ing its attention towards the COVID-19 value biopharma companies are find- execute on R&D and realize commercial fessionals through traditional and digital channels, and opti- business at this moment in time. The potential, both in terms of problem, and the company's AI-pow- ing in platforms that are able to sift opportunities for their products. ■ mize brand performance. We have brought together two com- the market and of bettering human health, is really incredible. ■

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360 degree view of business. What is great about our tech- Jonathan nology is that it allows for holistic decision making. Once all John datasets are unified, a client can see the butterfly effect of how all the data from different departments interact and af- Retano fect one another Pharmafusion’s platform can help companies Jameson & identify potential issues down the road, much earlier as the data is being unified, synthesized and shared. The platform Debra enables proactive business activities versus reactive business activities. In pharma, too many decisions are made reactively. Webster Can you give insights into Pharmafusion’s client base? JJ: Senior Scientist, Regulatory Affairs CEO & Founder Pharmafusion’s client base is mostly pharma manufacturers. JJ DW DW: Director, PHARMAFUSION The pharma areas we currently operate in include sales and marketing, managed care, clinical, drug monitoring, generics, Advanced Therapy Medicinal Product Development and factory and trade. I would really like to expand into the CARDINAL HEALTH space of offering our products to emerging pharma, as they do not have the in-house capabilities of what our platform can offer. How does Cardinal Health Regulatory Sciences fit into the are now a plethora of gene modification techniques, so it has be- broader strategy of the company and what is the core offer- come more about selecting the appropriate method based on an What are Pharmafusion’s objectives moving forward? ing? understanding of the disease. Additionally, for cellular and engi- How does Pharmafusion’s platform alleviate data prob- The goal is to build the brand of Pharmafusion as a best-in- DW: Cardinal Health Regulatory Sciences is a business unit in Car- neered cell therapies, there is a shift from the use of autologous lems? class analytics partner. We are a data, insight and answers dinal Health Specialty Solutions (CHSS), within Cardinal Health, to allogeneic cells, which will impact translatability and commer- The Pharmafusion platform not only allows for sharing, but analytics company, but at heart, we want to be seen as having a global integrated healthcare services and products company. cialization. Many advanced therapies will be combinatorial with also offers a convenience aspect and there is the added ben- a disruptor mentality, stepping outside the bubble. CHSS is a significant growth driver of the company. We help de- respect to use of multiple cutting-edge technologies in a single efit of being able to cross-pollenate with other data sets that Concretely, our objective is to continue growing our client velop solutions for our two different consumer groups: biophar- product, such as the use of genetically modified cells grown on a you might not have thought of doing before. This is why Phar- base. We aim to hit 20 clients within the next 12 months. maceutical companies and healthcare providers. The biopharma 3D printed scaffold or delivered using specialized devices. mafusion is called a unified data platform. We hope to soon have a great marketing engine behind us, segment is where Cardinal Health Regulatory Sciences fits in, as JJ: We are merely scratching the surface of gene editing in terms The name Pharmafusion 360° was chosen very carefully. Fu- whether it is something we fund and build internally or out- drugs become more targeted to treat conditions with smaller of capabilities. There is a lot of progress being made in the area sion means bringing multiple things into one and we have a source. ■ populations, biopharma companies need experienced part- of multiplex gene editing and we are seeing new technologies ners, who can help get products to the market faster, ensuring emerge such as CRISPR/Cas platforms using different Cas pro- the delivery of products with longer-term viability. We have four teins, as well as base editing techniques that enable precise point business units within the biopharma segment: (1) the Regulatory mutations while limiting undesired editing byproducts. On the EXPECTED GROWTH OF THE AI MARKET IN BIOPHARMA BY APPLICATION Sciences group, which helps companies navigate regulatory in- other hand, these advances also create complex nonclinical and MARKET SIZE (USD MILLION) teractions; (2) the Insights and Engagement group, which helps manufacturing challenges that need to be considered early on in

Source: Deloitte companies make more informed product strategy decisions using development. real-world evidence, and delivers precision marketing solutions DRUG DISCOVERY to support commercialization; (3) the 3PL group, which optimizes How has the FDA submission process evolved over time and 2018 159.8 the channel across proven distribution options; and (4) the Sonex- how can companies best prepare themselves to navigate the CAGR usTM Access and Patient Support group, which helps to provide approval process? 2025 2.999,7 52% comprehensive access and patient support services to allow for JJ: Particularly for cell and gene therapies, the technologies can patient adherence with some services that are needed for ad- be very novel, and the clinical populations are often rare with vanced therapies. poorly understood progression. Rare monogenic disorders can PRECISION MEDICINE potentially be cured with gene editing, so products targeting 2018 16.3 What are the most important elements of developing an ef- these populations require smaller trials and more compressed fective regulatory strategy? clinical development. Unlike the typical 3-phase clinical develop- 2025 440.9 CAGR 60.2% JJ: As part of developing the strategy, it is critical that internal ment process, advanced therapies targeting a rare disease often and external stakeholders are strategically aligned in communi- start with a phase 1/2 trial, whereby, if they obtain promising early cation. A lot of the issues that we help sponsors deal with in the data, they proceed straight into registrational studies. This means MEDICAL IMAGING & DIAGNOSTICS advanced therapies space occur because of bottlenecks and a that it is even more critical to be strategically aligned and seek 2018 12.3 lack of strategic alignment internally with how you demonstrate FDA feedback at an early stage.

2025 264.0 CAGR understanding of your product and how you want to communi- DW: In the advanced therapies space, there has also been a big 54.9% cate that to external stakeholders like investors, health authorities shift in FDA’s focus for these products on the chemistry, manufac- and patient advocacy groups, who can play an important role on turing, and controls (CMC) side. There is a growing need to get the journey to approval. early advice on CMC aspects to avoid roadblocks later in devel- RESEARCH opment. Because of the complexities involved in manufacturing 2018 9.9 What are the biggest developments that you are seeing in the these products, it is important to limit manufacturing changes to 2025 173.9 CAGR advanced therapies area? de-risk your product and keep pace with the other aspects of de- 50.5% DW: The development in gene therapies is rapidly evolving. There velopment. ■

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Can you give an overview of how prevalent counterfeiting and diversion is within Regulatory the pharmaceutical space? The current counterfeit estimates for the drug market is over US$200 billion annually. Full-stack Services Diverted pharmaceuticals are a significant part of the US$1.7 trillion number that is being thrown around for the gray market on a global commerce level. The World Capabilities, Health Organization (WHO) established that approximately 50% of all drugs on the internet are likely to be counterfeit. Within some of the African markets as much as One Trusted 20% to 30% of all products are counterfeit. In the pharmaceutical segment the high value, high risk products are the ones that are mostly counterfeited and diverted. We Source see oncology products that are destined for hospitals in Africa being diverted into high value markets such as the US and Europe. Systech provides serialization, traceability Can you elaborate on the dangers of counterfeiting and diversion for consumer and digital product safety and from a business perspective? authentication solutions to: In the US there is the Drug Supply Chain Security Act (DSCSA), where the sole pur- pose is to keep products within the legitimate supply chain safe. The biggest is- • Combat counterfeiting sue with the DSCSA today is the timeline for implementation. What is implemented A PUSH TO INNOVATE David • Prevent diversion today is only serialization of items by manufacturers and sharing data with whole- salers. There is no mandated data integration and visibility throughout the entire • Meet regulatory DeJean pharmaceutical supply chain from manufacturing through to pharmacy. Because compliance of the implementation timelines, it will not be until well after 2023 that we have an ‘interoperable’ supply chain in the US, with all levels sharing data. The world’s leading The way the regulation was implemented is that by the end of 2019, all pharma- pharmaceutical companies ceutical manufacturers, by law had to be serializing products, as well as providing rely on us to secure their serialized data into the supply chain. The law then phases in the copackers, then the global supply chains. wholesalers and then the retailers. While we are working on making the supply chain You can too! Regulatory services and compliance de- With a relatively small number of play- safe, there are still holes where diverted and counterfeit products can slip in. Senior Vice President partments are not typically known for their ers dominating the industry and the SystechOne.com/GBR technological prowess. However, compa- transience of major new opportunity, the SYSTECH INTERNATIONAL Taking into consideration the global nature of the supply chain, how do regula- nies from contract packaging to legal ser- industry is now seeing consolidation. Ac- tions specific to one country solve global issues? vices are now investing heavily in offering cording to David DeJean, senior vice pres- The DSCSA is only focused on the US, as the FDA, who only has responsibility for the state of the art technology that helps cli- ident of Systech International, who was US market, controls it. The EU, China, Turkey all have their own regulations which are ents meet compliance requirements. The acquired by Markem-Imaje in Q1 2020 variants of the same type of policy where you serialize a product, you aggregate it, pharmaceutical packaging industry has for their software and integrated solutions track it through the supply chain and share data with trading partners, but all have made measurable progress in beefing up capacity: “There are a lot of vendors who different implementations. its technology capabilities in recent years, were purely focused on regulatory busi- The scary part is that in the worst places in the world, where products are counter- due mostly to the passage of the Drug ness. The US went live at the end of 2018 feited 20% to 30%, there are no regulations and there will most likely not be any Supply Chain Security Act (DSCSA). and Europe went live at the end of 2019, » for a long time to come, as the cost of implementing regulations makes it prohibi- This piece of legislation was implemented which resulted in basically 80% of the mar- tive. These parts of the world include South East Asia, sub-Saharan Africa and some to create an electronic system to track and ket share in the world becoming compliant South American countries. Here there is a prevalent amount of illicit product and trace prescription drugs in the US. The to the regulations. A significant amount of The World Health Organization the drug cartels manage it now, because there is so much money in it and so little purpose of DSCSA was threefold: the first company values were determined based enforcement. It then becomes the responsibility of the brand to make sure their (WHO) established that priority was verification of the legitimacy upon a bubble of regulatory compliance. If products are safe. Companies in these regions are starting to implement digital au- of a drug product down to the package they did not have something to take them approximately 50% of all thentication methods, such as our fingerprint technology, which is much cheaper level, second was to be able to easily de- beyond the regulatory business, they were drugs on the internet are likely than serialization. This is a way in which brands deliver value and can engage with tect illegitimate products in the drug sup- basically lost. Systech has always invested to be counterfeit. Within some their customers. ply chain, and thirdly, the system should in technologies and innovations, such as of the African markets as much aid in a more interoperable supply chain, fingerprinting, so as not to get lost in this How can Systech’s product offerings help big pharmaceutical companies ensure facilitating more successful drug recall sit- bubble.” as 20% to 30% of all products their product quality at a global level? uations and full item traceability. One of the factors that distinguish busi- are counterfeit. We focus on three areas of solution offering to our customer base. One is compli- The solution to complying with these new nesses in this highly competitive environ- ance, the second area is the traceability of products, and we also handle expiration regulations was a highly technical and ment is to offer technology that goes be- information, so if somebody scans a product and it is expired, we can alert them to it. specific one and as a result the industry is yond compliance. DSCSA is only focused Systech focusses on providing visibility from manufacturing all the way to the con- evolving now that major milestone dates on the US, therefore, other parts of the sumer’s hand. On top of serialization we will provide a unique digital fingerprint to have passed. The pharmaceutical serial- world may or may not have similar legis- « products, which we can authenticate anywhere in the world. In doing this, we pro- ization software market has gone from in- lation in place that protects brand integ- vide a layered anti-counterfeiting and diversion technology outside of the regula- troductory to mature in an incredibly short rity. Markets like Sub-Saharan Africa and tions. An important feature of the digital fingerprint is that it can be integrated into amount of time. Southeast Asia have between 20% and a product line without the use of additives. ■ 95>> USA BIOPHARMACEUTICALS 2020 92 Industry Explorations Global Business Reports 93 USA BIOPHARMACEUTICALS 2020 INTERVIEW Global Business Reports Industry Explorations EDITORIAL

What value proposition does Adents both of our databases and this allows us to Julien present to its clients? better advise our clients. » Our approach is all software based. We provide software, that is not cost prohibi- How has the industry around serializa- The pharmaceutical supply chain Faury tive and that can be instrumental to a com- tion evolved since 2017? pany’s business. The base subscription Traditional actors in packaging are now is extremely complex and highly incudes all of the regulations and is con- strengthening their capabilities with se- regulated. Digital transformation stantly being updated for new markets and rialization companies. In 2013, everyone has been slowly taking place, VP Operations regulations anywhere. That gives clients a tried to do their own serialization and and supply chain leaders are ADENTS huge advantage because it is no longer they saw that it was more of an IT process necessary to spend on new modules every than a packaging process, so they did not being forced to rethink the time a new regulation comes in. get very far. Now, the IT companies that way they operate and adapt succeeded are being bought by the big to ongoing business challenges How can companies use third party tools names in packaging. for purposes outside of compliance? and unpredictable supply chain Our platforms are valuable in a variety of What direction is Adents headed in disruptions. Manual processes applications. We just signed a major part- terms of strategy? and siloed solutions are simply nership with a company called JPA, a lead- We want to be the data management plat- inadequate, and unable to ing company in warehouse management form for track and trace by enriching our solutions. Our track and trace technolo- network of partners to interconnect them. ensure a safe, secure, global gies have been very important for them, With the strengthening of our data and drug supply chain, much less one especially for cold chain monitoring. We distribution platform, we are confident we that addresses industry issues can detect items that need to be exclud- have the strongest offering. We work to in- such as drug shortages, drug ed very precisely and have the capacity sure supply chains are accurate and punc- of making them unavailable to avoid the tual and we want to help pharmaceutical recalls, ingredient availability, products from reaching the shelves. We companies deliver their product the best and inventory management. bring value together, because we amass way possible. ■ Now more than ever, supply chain leaders are looking for What was the big idea that drove you to formation sharing 10 or 11 years ago be- more agile, digital supply chain Shabbir found Tracelink a decade ago? tween players in the pharma supply chain processes to implement. This can Early on, it was evident that counterfeit was nil, but now many players across the all be done at speed and scale drugs posed a huge risk to the security entire supply chain have expressed an in- using a shared collaborative Dahod of the supply chain and the safety of pa- terest in working together to share infor- Image courtesy of ©️ 2020 Contract Pharmacal Corp tients. TraceLink was founded to help mation about specific products. platform. companies in the pharmaceutical supply fingerprint is that it can be integrated into ing directly with our clients' business units, chain meet critical global compliance re- a product line without the use of addi- sales forces, and third party vendors to en- What do you see as the next iteration - Shabbir Dahod, quirements and protect patients. We de- in the development of the industry and tives.” sure information is accurate and complete. President and CEO veloped the Life Sciences Cloud; a cloud- solutions Tracelink will provide? President and CEO, In the past, internal life sciences personnel TRACELINK based, track and trace software that has The pharmaceutical supply chain is ex- Tracelink handled this. Now, Porzio has become an grown to be the world’s largest inte- tremely complex and highly regulated. Legal Compliance outsourced transparency and aggregate grated digital supply network for the life Digital transformation has been slowly spend office for many companies,” said sciences supply chain. Today, TraceLink taking place, and supply chain leaders are Outside of track and trace and the world John Patrick Oroho, executive vice presi- connects the end-to-end pharmaceutical being forced to rethink the way they oper- of packaging, the legal world is also find- dent and chief strategy officer of Porzio supply chain, with over 1,280 customers ate and adapt to on-going business chal- « ing opportunities in technological innova- Life Sciences. and more than 280,000 trading partners. lenges and unpredictable supply chain <<92 tion. Porzio Life Sciences offers a suite of Now, the journey has continued and disruptions. Manual processes and siloed 30% of their drugs counterfeited accord- compliance tools and services that help TraceLink has been innovating on its solutions are simply inadequate and un- ing to World Health Organization figures. clients comply with HCP laws, regulations, Conclusion decade long vision of enabling an end- able to ensure a safe, secure, global drug As a result, global brands shipping prod- industry codes, and industry standards to-end pharmaceutical supply chain that supply chain, much less one that address- ucts to jurisdictions with few regulations around the world. “Many companies lack Serialization and legal compliance technol- allows the whole industry to share infor- es industry issues such as drug shortages, risk brand integrity issues.To ensure this the internal resources to handle reporting, ogies are the first step towards a move in mation to improve product availability, drug recalls, ingredient availability, and does not become a problem, Systech of- so we have created an easily outsourced which compliance solutions are enhanced security and safety. inventory management. Now more than fers a unique digital fingerprint for prod- service. Even large organizations are look- by new innovations. Those companies ever, supply chain leaders are looking for ucts which can be authenticated anywhere ing to us for reporting and to have access looking ahead to the next technologies In terms of product security, how has more agile, digital supply chain process- in the world. DeJean explained: “We to our systems so they can see the data and offering unique and differentiated the industry transformed over the past es to implement. This can all be done at provide a layered anti-counterfeiting and for auditing, monitoring, analytics, and platforms that help ease the burden of do- decade? speed and scale using a shared collabora- diversion technology outside of the regu- business intelligence. We have been able ing business will be best placed for suc- A lot of improvement has happened. In- tive platform, which TraceLink has. ■ lations. An important feature of the digital to become much more involved in deal- cess in the long term. ■

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INDUSTRY OUTLOOK

» The last six to eight years have been great for healthcare and biotech. Underlying that are real secular changes in drug discovery and development. We are reaping the benefits of the genomics boom in the early 2000s, which yielded new drug targets, coupled with many new tools at our disposal to make drugs and to evaluate biology. Overall, the tools and information at our disposal are at a dramatically different place than they were 20 years ago, which has contributed to many transformative new drug approvals and strong capital market performance for the companies delivering those drugs. «

- Michael Gladstone, Principal, Atlas Ventures

Image courtesy of Alira Heath EDITORIAL Global Business Reports Industry Explorations INTERVIEW

Fortunately the industry entered into tems validation and connected health. Conclusion the COVID pandemic from a position of Francesco We see a trend in pharma going toward great strength. Funding has been near automated services, and Arbour Group all time highs across many therapeutic supports biotech companies in these ar- areas, and FDA approvals remain high. Nigris eas. We want to expand our service of- This has created a robust ecosystem of fering into this domain and strengthen NAVIGATING 2020 financiers, drug developers, CRO/CD- our foothold in the U.S. Arbour Group MO’s, consultants and technology firms has offices in Dubai, as well as in Manila devoting themselves to bringing innova- in the Philippines, which is an offshoring President and CEO tive new therapies to patients. location that strengthens our presence Working in the industry’s favor is the fact NICOS GROUP in the Asia Pacific region. Most years never play out exactly the against COVID-19, however, there are that drug development is a long invest- Dr. Thomas In December 2019, we merged with way annual reports predict. There are far still many significant unknowns lurking ment cycle business, therefore, most a UK company offering promotional too many variables to account for, and in- around that could impact the state of VC’s and investors are not willing to pull compliance, which is a very highly regu- evitably, unforeseen shocks arise. Many the US biopharmaceutical industry. their money because of short term vola- Dobmeyer lated area, because you need to make had foreseen 2020 as being a strong, Questions around funding availability tility. There is also an estimated US$1.4 sure that the promotional claims are in yet uncertain year given the presidential for companies developing non-Covid re- trillion of liquidity on biopharma balance CEO line with what has been approved and election in November and the vilifica- lated therapeutics abound. Companies sheets, according to EY. These dynamics PHARMALEX is scientifically sound and compelling. tion of pharma on display across politi- that are pushing drugs through clinical should position the industry well in the This expands our service offering to the cal party lines. Even prior to the arrival trials must find ways to continue to reach event of a downturn. United Kingdom and amplifies our ser- of COVID-19 on US shores, Gallup polls critical inflection points. Yet it will be All flaws aside, the industry at its core is PharmaLex recently joined ventures vice offering to more downstream com- listed healthcare as the single most im- difficult to amass the data and patient about improving patient outcomes and with Arbour Group. What inspired this mercial areas. In December 2019, we em- portant issue for American voters. enrollment needed in an environment quality of life. In times like this, it is abun- new development, and how will your barked on a joint venture with a strategy The negative rhetoric has now been of social distancing and fear of expos- dantly clear that innovation, speed, and organization benefit? consulting group based in the Nether- notched down due to the instrumen- ing immunocompromised patients to technology will drive breakthroughs that We have a strategy combining organic lands. We now have offices close to the tal role pharma is playing in the fight disease. save lives. ■ and inorganic growth. Arbour Group is European Medicines Agency, which is an What insights can you give into Nicos very well-known in computerized sys- advantage. ■ Group’s product and service portfolio? Nicos Group supplies and installs Nicomac modular clean rooms suitable for non-certified and certified (ISO 5 through ISO 8) pharmaceutical areas. Joe Luke We provide complete design and build, project management, construction and VP Sales and Marketing installation out of our New Jersey facility. REED-LANE Our hard wall modular clean room sys- 35th International Exhibition for tem combines the need for a flexible so- Fine and Speciality Chemicals lution with the request for durability and flush surfaces. Can you give an overview of Reed- In our portfolio of products, we also have Koelnmesse, Cologne, Germany Lane’s expansion into cold storage? new clients. We have a new carton serializa- Europe’s No 1 trade fair LST and LT machines, which are stopper Reed-Lane expanded and added cold stor- tion room coming online in 2020. 11 – 12 November 2020 for the fine and speciality processors that are fully automated, de- age space, which was validated in 2019. signed to meet the latest cGMP stan- Immediately after, we added a packaging Has the streamlined FDA process led to dards. These machines were the first room dedicated for secondary packaging, an uptick in business for Reed-Lane? chemicals industry equipment we started to import from such as labeling of vials and ampoules next To some extent streamlining of drug ap- Europe to North America. The equip- to the cold storage area. provals has led to an uptick in business. Chemspec Europe 2020 is the place to be: Find bespoke solutions & innovative substances for your enterprise and take your networking to the next level Top conferences and workshops offer ment is used for washing, rinsing, silicon- With respect to generic pharma there were valuable insights into ongoing R&D projects! izing, sterilizing, drying, and cooling. How have the serialization regulations GDUFA fees, which were forced onto the • custom synthesis • paints & coatings • biocatalysts Agrochemical Lecture Theatre Nicos Group aims to continue its success passed a few years ago effected Reed- industry and downstream into the contract • pharmaceuticals • green chemicals • cosmetics Chemspec Careers Clinic in a quality driven industry through al- Lane’s business? manufacturing and contract packaging • fine chemicals • household & industrial • electronic chemicals Pharma Lecture Theatre ways adding innovation to our products. We have picked up some business, espe- companies. Several years ago, Reed-Lane • chemical intermediates cleaning • and much more Regulatory Services Lecture Theatre Consistency is a key factor for our suc- cially from CMO’s who do not have the was paying US$ 250,000 in GDUFA fees • agrochemicals • bio-based chemicals RSC Lecture Theatre cess. Our strategy is to keep doing things ability to serialize products. This opens the just to be able to package. The FDA and Innovative Start-ups in the right way and continue educating door for Reed-Lane to then package the generic industry realized that these fees the industry that there are possibilities product followed by serialization. In some were not a good idea and fees are now Get your ticket now: to do things differently and better than other cases, contract packagers were not more manageable. As a result we have seen www.chemspeceurope.com Organisers: what they are used to. We will continue ready to implement the serialization and more activity and business due to this faster to be quality driven moving forward. ■ aggregation, which has led to us acquiring approval process. ■

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“Apart from the current COVID-19, there are four major challenges biopharma “For consultancy services, price sensitivity is very different. Margins in the companies face today. First, a decrease in innovative drug molecules and US are much higher compared to Europe. The same implant can cost four increase in generic competition. Second, achieving market access and times the price in the US as compared to Italy. The US is funding research for adequate pricing. Third, the demand for transparency and having better the entire world. In Europe, the healthcare system is a single-payer system, educated patients, and last, patient centricity in three different dimensions; and the providers are mainly government-owned, which makes the process first, from a patient care point of view, second, individualized medicine and harder for companies. However, the prices are lower in Europe, so it depends third, pricing strategy and value-based pricing.” on the perspective. Regarding quality of care, we recently made an abstract for ISPOR, where we show that single-payer is not necessarily better for prevention. The US, not being a single-payer system, is interestingly better for - Dr.Thomas Dobmeyer, prevention.” CEO, PharmaLex

- Gabriele Brambilla, CEO, Alira Health

“Proximity to client is a definite advantage, particularly for smaller companies in the earlier stages of development where close contact is a plus. This is “The biggest evolution has been the increased use of expedited pathways. another driver for further expansion in the United States – the biggest pool of Sponsors can aim to be more proactive and better prepared earlier in product clients by numbers are the main biotech hubs, but unfortunately there are very development. Effective engagement with the FDA to address data gaps is few facilities left in these regions.” imperative to avoiding late-stage development problems. Navigating the regulatory process from concept to approval is best accomplished by advance preparation and effective communication. There is an emphasis on making - Michael Quirmbach, sure you understand your product, from how it works to demonstrating that CEO and President, you can manufacture it consistently.” CordenPharma Group

- Debra Webster, Director, Advanced Therapy Medicinal Product Development, Cardinal Health “It is critical that we continue to work together with regulators and legislators to foster a system that continues to reward innovation. While strides have been made in recent years, more needs to be accomplished to make sure that "Today’s cancer patients face many challenges, including staying on therapy there is a rapid path to market of needed therapies while, at the same time, while pursuing a busy lifestyle and family life and financial toxicity brought protecting the inventors of these innovative therapies. Intellectual property about by large co-insurance bills. We have been interested in developing drugs and long patent lives are critical to recouping the high cost and substantial risk that are soluble and can be given orally in order to ease the treatment burden associated with developing new drugs. It may take 10 years or more to get a of patients, especially with regard to extensive treatment. At the same time drug to market and the cost over that period may well exceed US$1 billion. in leukemia, intravenous agents may be more bioavailable compared with oral Too often, the patent life a particular drug candidate drives a lot of what drugs as the cancer is in the bloodstream. At this time we want fewer patients companies decide to do with regard to research and development decisions. coming to the hospital because of the COVID-19 pandemic and having a This is not necessarily the right system for incentivizing innovation. It is not drug available both intravenously and orally may be a flexible solution. Over about how long it takes a drug to get to market, it is the period of exclusivity the long-term this not only increases the value of the drug but may also save beyond approval that is critical to the success of a product and also its cost costs for the healthcare system by reducing admissions or care provided in the structure. The price of drugs varies enormously depending on whether you hospital setting." have two years left on a patent or 10 years.”

- Spiro Rombotis, - Neil S. Belloff, CEO, Chief Operating Officer, General Counsel and Corporate Secretary, Cyclacel Pharmaceuticals Eloxx Pharmaceuticals

USA BIOPHARMACEUTICALS 2020 100 Industry Explorations Global Business Reports 101 USA BIOPHARMACEUTICALS 2020 COMPANY DIRECTORY Global Business Reports Industry Explorations COMPANY DIRECTORY

COMPANY/ INSTITUTION WEBSITE COMPANY/ INSTITUTION WEBSITE

ASSOCIATIONS ACADEMIC INSTITUTIONS BioNJ bionj.org Harvard University harvard.edu Biotechnology Innovation Organization (BIO) bio.org Massachusetts Institute of Technology mit.edu CPhI cphi.com Northeastern University northeastern.edu Massachusetts Life Sciences Center masslifesciences.com Princeton University princeton.edu MassBio massbio.org Rutgers University rutgers.edu NewYorkBIO newyorkbio.org FINANCE BIOTECHNOLOGY & PHARMA Atlas Venture atlasventure.com Abbott abbott.com Burrage Capital burragecapital.com AbbVie abbvie.com J.W. Childs Associates, L.P. prospecthillgrowth.com Advantice Health advanticehealth.com J.P. Morgan jpmorgan.com Aphios aphios.com Signet Healthcare Partners signethealthcarepartners.com AstraZeneca astrazeneca.com Third Rock Ventures thirdrockventures.com Bayer bayer.com Biogen biogen.com LEGAL & CONSULTING Bristol-Myers Squibb bms.com Alira Health alirahealth.com Cancer Genetics cancergenetics.com Decision Resources Group (DRG) decisionresourcesgroup.com Celgene celgene.com EY ey.com Curis curis.com Hart & Chin hartandchin.com Cyclacel Pharmaceuticals cyclacel.com PharmaLex pharmalex.com Daiichi Sankyo daiichisankyo.com Porzio Life Sciences porziolifesciences.com Eli-Lilly lilly.com Eloxx Pharmaceuticals eloxxpharma.com CONTRACT SERVICES, MANUFACTURING, APIS AND INGREDIENTS Gilead Sciences gilead.com Avema Contract Services avemacontractservices.com GlaxoSmithKline gsk.com Cambrex cambrex.com Goldfinch Bio goldfinchbio.com Contract Pharmacal Corporation cpc.com Hepion Pharmaceuticals hepionpharma.com CordenPharma cordenpharma.com Hillstream BioPharma hillstreambio.com GVK Bio gvkbio.com Interna Technologies interna-technologies.com PCI Pharma Services pciservices.com Johnson & Johnson jnj.com Piramal piramal.com Lonza pharma.lonza.com Sunrise Pharmaceutical sunrisepharma.com Merck & Co merck.com Reed-Lane reedlane.com Nivagen Pharmaceuticals nivagen.com Visikol visikol.com Novartis novartis.com Dr. Reddy's drreddys.com OncoSec oncosec.com Pfizer pfizer.com SERVICE PROVIDERS Roche roche.com Adents adents.com ® Sanofi sanofi.com AiCure aicure.com Servier Group servier.com Cardinal Health cardinalhealth.com Stem Synergy Therapeutics Inc (SSTI) stemsynergy.com DHL dhl.com Takeda Pharmaceuticals takeda.com Systech International systechone.com Terran Biosciences terranbiosciences.com Tracelink tracelink.com Tosk tosk.com UPS ups.com Thermo Fisher thermofisher.com

Vertex Pharmaceuticals vrtx.com This list intends to include just a representative sample of companies operating in the US pharmaceutical sector, XOMA xoma.com and as such it should not be considered a guide to take investment decisions.

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