Market Access Right Product, Right Patient, Tight Price, Tighter Reimbursement

invivo.pharmamedtechbi.com november 2016

Invol. 34 ❚ no. 10 Vivopharma intelligence ❚ informa Market Access Right product, right patient, tight price, tighter reimbursement

Value Frameworks Price Transparency Real-World Evidence Outcomes-Based Reimbursement

invivo.pharmamedtechbi.com CONTENTS ❚ In Vivo Pharma intelligence | November 2016

26 Curative Regenerative Medicines: Preparing Health Care Systems For The Coming Wave Faraz Ali, Ted Slocomb and Michael Werner We may be at the dawn of a new era of curative regenerative therapies, but their very nature may create barriers to adoption. The Alliance for Regenerative Medicine frames the opportunities and challenges for the industry, arguing that policy makers must begin to understand The market access issue the ways that these therapies represent value for money. 10 22 States Fight For Drug Price US Outcomes-Based 1 Transparency Contracts: Big Uptick In Ed Silverman Interest, But Not Execution California’s Proposition 61 and a number Cathy Kelly of other state-led measures to control The promise of outcomes-based drug prices failed to gain traction in contracts for biopharmaceuticals has 2016. But states are likely to remain a yet to be realized in the US. Although battleground in the war against costs in precise numbers are hard to come by, a pharma-friendly Trump administration. payers and manufacturers agree the field is still nascent. However, they 16 don’t seem to be giving up on the idea. Is The UK Still Open 34 For Medtech Innovation Reimbursement? Real-World Evidence Ashley Yeo And The Quest For Confusing and ineffective channels of European Market Access innovation adoption and a lack of Francesca Bruce funding hamper the UK’s reputation as Real-world evidence promises to solve one of the world’s health care capitals many problems inherent in getting a and a driver of care excellence – in spite drug to patients at a good price. It could of its global brands, NICE, MHRA and the slash development costs and help make NHS itself. But changes that should the reimbursement case to payers. But transform market access are in place and there are challenges for companies that are worthy of close attention in the next want to exploit real-world evidence to two to three years. get their drug to patients in Europe.

departments exclusive online content invivo.pharmamedtechbi.com Around The Industry ❚ D eals In Depth ❚ What Pharma Can Do About 4 Drug Pricing: With “Value” September 2016 Debate In Full Swing, ICER’s Brexit: Views From The C-Suite Amanda Micklus Influence Grows John Rountree Melanie Senior ❚ ❚ Biopharma Quarterly Where Do Life Science Business Models Come From? 7 Should We Be Alarmed By Dealmaking Statistics, Q3 2016 Prescription Drug Cost Growth? Brian Smith Maureen Riordan and Joshua Cohen Amanda Micklus ❚ The Future Of Specialty 8 In Vivo’s Deals Of The Month: Drug Pricing October 2016 Nancy Dvorin NANCY DVORIN

38 on The Move Significant recent job changes in ❚ From The Editor pharma, medtech and diagnostics REGINA PALESKI The long US presidential campaign concluded with the election of Donald Trump in a con- 2 42 dealmaking test that unexpectedly went to the wire. The health care industry could see some dramatic Deals Shaping The Medical Industry, changes during the next four years, but un- October 2016 certainty about what is to come has been bal- THE STRATEGIC TRANSACTIONS TEAM anced with optimism that some of Trump’s proposed reforms will be good for business. Those who expect the furor over steep You Asked...We Delivered! Relevant and exclusive online-only drug prices hikes to die down will probably content at your fingertips 24/7 be disappointed. Trump may well be more Nancy Dvorin pharma-friendly than Clinton would have Access your subscription by visiting: been, but there is still bipartisan support for invivo.pharmamedtechbi.com price control measures. And Trump voters may be among the most vocal and log in. in demanding fair access to the medicines they need. Even though federal initiatives to control drug prices are less likely un- Don’t have an online user account? der Trump than Clinton, individual US states are not likely to abandon Quickly and easily create one their own legislative efforts despite the defeat of California’s Prop 61 at by clicking on the “Create your the ballot box. That’s just one of the stories we cover in this special mar- account” link at the top of the page. ket access issue. Within these pages we also explore value frameworks for Contact: determining optimal drug pricing, including regenerative medicines that [email protected] may cure with a single dose; early movers who are defining the terms for or call: (888) 670-8900 or +1 (908) outcomes-based contracts between pharmas and payers; the challenges 748-1221 for additonal information. of using real-world evidence to support European product launches; and initiatives in the UK – like the US, reeling somewhat from an implausible national vote result in 2016 – designed to counter the innovation-stifling effects of pricing and reimbursement pressures. May I ask you a favor? We are conducting a quick and painless survey to determine what you think about In Vivo. Please visit http://bit.ly/2fLWOVK. /invivo @invivo /invivo Your feedback will help us determine how we can better meet your needs.

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Strategic Transactions Pharma intelligence |

The most trusted source of health care deal intelligence

You can rely on the insight and information in Strategic Transactions to carry out these and many more critical business development activities.

The top pharmaceutical firms and leaders in medical devices, diagnostics, finance and consulting already do.

Available via annual subscription. For more information and to request a complimentary demonstration, visit: www.Pharmamedtechbi.com/STLP ©2016 Informa Business Information, Inc., an Informa company November 2016 | In Vivo ❚ Around The Industry

Drug Pricing: With “Value” Debate In Full Swing, ICER’s Influence Grows

The Institute for Clinical and Economic Review has invited feedback on its methodology recommended price range. Not many other for calculating a drug’s recommended price range. Industry response has been critical, countries’ drug cost-watchdogs – many but pharma can no longer afford to merely oppose value frameworks. It needs to create of which have been in place a lot longer – strategies for a world in which such frameworks are a permanent and influential part have offered industry the opportunity to of the pricing and reimbursement landscape. influence how drugs are assessed. ICER’s Value Assessment Framework “We are not out to strangle the indus- ronment in the US” after the election. currently comprises two measures: Care try,” insisted Steven Pearson, president Organizations such as ICER, a non- Value, which is a measure of a drug’s com- and founder of ICER (the Institute for Clini- profit group with no statutory authority at parative clinical effectiveness and cost- cal and Economic Review), during an inter- all, are adding fuel to the fire. Manufactur- effectiveness, and Health System Value, view in late 2015. “We’re just out to create ers including Amgen Inc., Bristol-Myers a measure of the five-year budget impact a framework for having a dialogue around Squibb Co. and Roche are stinging from on health systems. Both together lead to drug price and value,” he continued. ICER’s reports that their drugs are too a “value-based price benchmark” – the One year on, and that dialogue is pricey – even as much as 80% too pricey. price at which patients could be treated certainly in full swing in the US. Industry Payers don’t have to act on them, though for reasonable long-term value, without might well be in the line of fire, but ICER’s some are delighted to have more justifica- crippling the system short term. 4 not the only one shooting. ICER reviews tion for aggressive contracting positions the cost-effectiveness and affordability of and stricter coverage restrictions (that No Shortage Of Critics high-profile new drugs, and has indeed could happen with or without ICER). But Industry responded to ICER’s call with a concluded that many of them are priced there’s mixed evidence, as yet, that ICER’s range of criticisms. They included: too well above what might be considered recommended price ranges are influenc- much focus on drug costs as the main value-for-money. But a series of mas- ing actual prices achieved. (Also see "ICER determinant of health system value; the sive drug price hikes from companies Eyes QALY Ratios, Budget Impacts In Meth- use of list prices, not actual prices paid, like Turing Pharmaceuticals AG, Vale- ods Review" – Pink Sheet, July 28, 2016.) to determine costs; inappropriate use of ant Pharmaceuticals International Inc. “We’re still early in the cycle of payers the budget impact measure; inappropriate and Mylan NV has also put drug pricing using this information concretely to de- use of the quality-adjusted life year (QALY) front and center in an already heated sign payment mechanisms for drugs. It’s to measure drugs’ cost-effectiveness; US political climate. Failed Presidential still pilots and things,” admitted Pearson. overestimates of drug uptake rates; and candidate Hillary Clinton proposed a se- More worrisome, however, is the influ- (from Amgen and BMS, among others) a ries of measures to curb excessive price ence ICER reports could have on the Centers lack of transparency in the models. increases and supports Medicare’s right for Medicare and Medicaid Services (CMS). Pharmaceutical companies aren’t the to negotiate prices. (Also see "Clinton's That agency’s proposal to change the way only critics. A long list of big and small Drug Price Plan: Threat Or Flash In The it pays for Part B drugs (that is, drugs ad- patient advocacy groups, including the Political Pan?" – Pink Sheet, September ministered by medical providers) includes International Myeloma Foundation, the 2, 2016.) California unsuccessfully bal- a suggestion for using value frameworks to Global Liver Institute, the National Alli- lotted its citizens as to whether the state help them determine the price paid. (Also ance on Mental Health and CancerCare, government should have the right to pay see "Part B Demo Could Save $2.2 Bil., CBO have also attacked the ICER methodol- no more for drugs than the Department Says; Blocking It Would Cost Less" – Pink ogy. Like drug companies, the patient of Veterans Affairs, typically the lowest Sheet, October 6, 2016.) And the CMS pro- groups complained about ICER’s focus on price watermark in the US. While many posal specifically mentions ICER’s reports costs – particularly short-term costs – but believe the Trump Administration will as potential models. also that its methodology doesn’t reflect be more pharma-friendly, it's too soon ICER’s methodologies are still evolv- the concerns of patients. And while ICER to tell. As Novartis AG’s CEO Joe Jimenez ing. The organization recently invited claims it does listen to – and its reports recently conceded to the UK Financial feedback from all stakeholders, including reflect – such concerns, the groups Times, “No matter which candidate wins, pharma and patient advocacy groups, on themselves argue that there’s too little we will see a more difficult pricing envi- the processes it uses to calculate a drug’s transparency to the process.

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com AROUND THE INDUSTRY ❚

In part the problem is format: ICER reports are long and detailed – and the ❚ DrugAbacus Gains Money, Sophistication easiest point to grasp is what often ends In February 2016, the non-profit Laura and John Arnold Foundation up as the headline of articles reviewing donated $7.2 million to fund value-based pricing solutions. Of the the reports: ICER’s suggested value-based total donated, $4.7 million went to Memorial Sloan Kettering Cancer price benchmarks. The report formats Center’s Evidence Driven Drug Pricing Project, home of the DrugAbacus, don’t make it easy to compare, head-to- conceived and designed by Peter Bach, MD (the bulk of the remaining head, the various therapies on all the Arnold Foundation money went to a similar project at the Center for key efficacy, safety, convenience and Evidence-based Policy at Oregon Health & Science University). economic elements. Nor does the analysis clearly show how the opinions of the DrugAbacus’ technology, developed by Westport, CT-based Real groups whose expertise and points of view Endpoints (an Informa partner) and based on its RxScorecard value- ICER solicits – like patient advocates – are assessment tool, allows users to determine and compare value-based reflected in the final analysis. prices for more than 50 cancer drugs based on their own weightings And in part the problem is that an ICER of eight key value elements – including the “price” of a year of life and report is not a true database, one in which the relative importance of a drug’s novelty and cost of development. It users can review the same set of facts also includes two further dimensions of drug pricing: pricing by indica- and increase or decrease their relative tion, and by geography or market. Users can compare the actual and importance to more clearly reflect the con- Abacus price of four widely used drugs – Abraxane, Avastin, Nexavar and cerns of different stakeholders. Indeed, Tarceva – across multiple indications for which they’re approved. They this ability to differentially “weight” the can also compare actual and Abacus prices across different countries various decision-making elements is one and markets. The added functionality is designed to prompt further of the key attributes of Memorial Sloan reflection of what variables are, and should be, reflected in drug prices. Kettering Cancer Center’s (MSKCC’s) DrugAbacus system and the technology Most patient advocacy groups and pharmaceutical companies haven’t behind it. (See sidebar, “DrugAbacus embraced DrugAbacus any more than they’ve accepted ICER’s assess- Gains Money, Sophistication.”) ments. For example, the number of “price components” DrugAbacus Setting aside the accusation of lack of 5 uses is limited and unvariable. But advocacy groups, like some drug transparency (not least given the opacity companies, do like DrugAbacus’ ability to differentially weight the surrounding how pharma sets prices to various “price components” – and thus at least avoid the problem that begin with), most of those points will be the ASCO, NCCN and ICER frameworks all end up providing: a single, addressed in the revised methodology, ac- undifferentiated answer to the question of value. cording to Pearson. In particular, he prom- IV004958 ised “substantial changes around how we calculate [a drug’s] budget impact.” Budget impact attracted a wide range of opinions in the feedback. Some want it restricted to drug costs, not total health care costs; at the UK’s National Institute of Care and involve a certain amount of judgment, as one or two want it to include shorter-term Health Excellence (NICE), will remain the well as sophisticated health economic calculations; many more want it to include “anchor” of ICER’s cost-effectiveness cal- modeling tools. That’s clear not just from longer-term calculations; and several drug culation. Many drug firms, including the the depth and breadth of discussion and firms would rather scrap it all together as a industry associations BIO and PhRMA, will commentary around ICER’s work, but also component of Health System Value, since, continue to kick and scream about that. from the characteristics and limitations as stated in Amgen’s feedback, “It is not a They may be consoled, though, by of other value-based pricing tools that measure of value.” ICER’s proposing to move away from using have emerged over the last year or two. “We’ll figure out a way to message list prices as the basis for calculating costs (Also see "Scoring Value: New Tools Chal- aspects of the budget impact potential so and thereby value-based benchmarks. lenge Pharma's US Pricing Bonanza" – In they’re not overly focused on price,” said List prices don’t reflect the real prices Vivo, October 21, 2015.) These include Pearson. Instead, he continued, they’ll paid for drugs, given (often significant) DrugAbacus, conceived by Peter Bach, look at whether the budgetary hit will be rebates and discounts negotiated in the MD, director of the Center for Health significant enough to justify more focus on marketplace – including by Medicare and Policy and Outcomes at MSKCC, the Value patient prioritization, for example, delay- Medicaid. “We will do something different Framework, established by the American ing access for some patients. … around pricing,” promised Pearson. Society of Clinical Oncologists (ASCO); That’s not likely to go down well with ICER’s revised approach, due to appear and the National Comprehensive Cancer everyone either. Nor will Pearson’s as- in December 2016, will invite a second Network’s Evidence Blocks, upgraded to sertion that the QALY, a controversial round of public comment. include cost and affordability in clinical measure of value used most prominently All measures of value are complex, and practice guidelines.

These tools aren’t perfect, or com- ential weightings will change the relative two-year donation. Given the waves that prehensive. They’re all limited to cancer value scores (e.g., a patient group might ICER is making, it’s unlikely to find itself drugs, for starters; ASCO’s framework, weight a particular aspect of convenience short of financial contributors, though. primarily for clinicians, only scores drugs more heavily than a payer or a physician “We still intend to grow,” said Pearson. that have been compared in head-to- group, which might preferentially weight Indeed, value frameworks are here head trials. But their existence, and the one of the efficacy elements). to stay. The key for biopharmaceutical discussions around them, have provided And new value frameworks are in the companies is to figure out how to use a helpful level of debate – beyond catchy works: consultancy Avalere Health and them. A number of drug firms have begun newspaper headlines and outraged tweets medical research accelerator FasterCures to employ them to vet their own pipeline – around the factors that should influence are developing a value tool that primarily agents, internally exploiting the outside drug pricing. represents the patient perspective. The assessment tools to objectively measure Patient Perspective Value Framework will their relative value against marketed and Pricing Tools Are be published in June 2017. (Also see "As competitive pipeline therapies or to un- Here To Stay Drug Value Frameworks Gain Traction, cover subpopulations in which their agent Value-based pricing tools won’t go away. Patients Seek More Input" – Pink Sheet, has a significant therapeutic advantage. Existing versions are being sharpened. September 28, 2016.) Other companies are looking to expand Several payers and a fast-increasing Meantime, ICER’s influence will con- the focus of value frameworks from the number of drug companies have been tinue to spread, even if the CMS proposal one-size-fits-all approach to a methodol- working with the RxScorecard, a web- around Part B drugs never materializes. ogy that allows different responses based based, interactive value-assessment tool Clinton’s proto-administration has been on the needs of the different custom- from Real Endpoints, which provided the on the phone a few times, too, noted ers – patients, providers, payers (and technological backbone and some of the Pearson. Meanwhile, NICE, considered indeed the different flavors of each of research behind DrugAbacus. (Editor’s by many as a global benchmark in cost- those groups). note: Real Endpoints has partnered with effectiveness assessment, recently re- What is eminently clear, however, is In Vivo’s parent company Informa.) Based leased proposals to include budget impact that drug firms can no longer afford to on the concept of multi-criteria decision in its drug reviews too; something it hasn’t merely oppose value frameworks. They analysis, RxScorecard establishes a flex- done to date. have to create strategies for a world in 6 ible set of weighted value-elements for All of ICER’s drug assessment work is which they are a permanent and influen- each disease category and then transpar- funded by non-profit, objective sources, tial part of the pricing and reimbursement ently scores each element based on pub- and will continue to be, insisted Pearson. landscape. licly available data. Each element’s weight ICER was turbo-charged in 2015 by funding IV004957 can be varied based on how the user sees from the Laura and John Arnold Founda- Melanie Senior its relative importance – and those differ- tion; it’s currently in its second year of the [email protected]

Optimize clinical trial design with Trialtrove’s new Standard of Care service

RequeST a deMO! citeline.com/products/trialtrove/

Request a demo! citeline.com/products/trialtrove/

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com AROUND THE INDUSTRY ❚

Should We Be Alarmed By Prescription Drug Cost Growth?

Policy analysts and media pundits alike assign much of the blame regarding recent in- and diagnostics that are up to four times creases in health care costs to prescription drugs. On one hand, they are correct to point the average, and the price per day for hos- to prescription drugs as an important driver of health care cost growth in recent years. pital stays that is five times the average. In the next decade health care spend- Although the percentage of spending point is the recently reported 50-fold price ing is projected to grow at an average rate on outpatient drugs has remained steady increase of Turing Pharmaceuticals AG’s of 5.8% per year, according to the Centers at around 10% for the last decade, special- Daraprim (pyrimethamine), which drew for Medicare and Medicaid Services. In ty drugs used in hospitals and physician’s the ire of politicians, policymakers and addition, the health care share of the offices have accounted for significant patient advocates. Several other drugs gross domestic product is expected to rise growth in drug expenditures, bringing the have gained notoriety, including recent from its current 17.5% to 20.1% by 2025. total share up to about 17%. In 2014, for revelations regarding steep price hikes of This increase will be driven by hospital the first time in well over a decade we saw double-digit growth in drug expenditures. Exhibit 1 On the other hand, drug spending over- Health Care Sector Annual Growth Rates (2006–2015) all is still a relatively small portion of the health care pie. As such, concerns stem- 12 ming from increasing prescription drug cost growth may be somewhat misplaced. 10 Even at the height of its spike in 2014 the increase in per capita drug spending 8 constituted only around 2% of total health care spending per enrollee in public and 6 7 private insurance plans. 4

Broadly, growth in health care spending 2 is driven by: Percentage Rate Growth Annual 0 • An aging population exercising greater 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 demand for health care (hospital, Prescription Drug Outpatient physician, outpatient, nursing home) Hospital Inpatient Physician and Clinical Services services • Higher prices for health care services SourceS: Adapted from Chappel A, Sheingold S, Nguyen N, ASPE Issue Brief, “Health care spending demanded growth and federal policy,” March 22, 2016; Catlin A, Cowan C, Centers for Medicare and Medicaid Services, November 19, 2005, “History of health spending in the United States, 1960–2013” • New diagnostic and therapeutic technologies, including newly approved drugs Mylan NV’s EpiPen (epinephrine). inpatient and outpatient services, physi- Analysts often point to international cian and clinical services and prescription Together, hospital and physician comparisons of health care spending with drugs (average annual growth of 4.9%, expenditures account for three times the US ranked first, attributing differences 5.4% and 6.2%, respectively, for the the spending on drugs. And, despite to the relatively high costs of prescrip- 2016–2025 period). the recent uptick in the rate of drug cost tion drugs in the US. Indeed, per capita Because hospital and physician ser- growth, over the past 10 years the pace of spending on health care in the US was vices constitute greater shares of total hospital and physician expenditures has $9,086 in 2013, two-and-a-half times the health care spending, 32% and 22%, generally exceeded prescription drugs. Organization for Economic Cooperation respectively, and in the next 10 years are (See Exhibit 1.) and Development median for 13 high- expected to grow at an annual pace com- Apparently, these facts do not make for income countries. parable to prescription drugs, they will eye-catching headlines. By contrast, the The relatively high price of branded continue to be more impactful drivers of recent surge in the price of newly approved drugs is one of several contributing fac- US health care cost growth. In fact, PwC drugs targeting hepatitis C, HIV and vari- tors. Other factors include physician sala- estimates that over this period hospital ous cancer and orphan diseases is salient ries, which are two to four times the OECD and physician service expenditures are and the focus of media attention. A case in average, the costs of surgical procedures predicted to increase by more than four

times the cumulative projected rise in It is important, therefore, to examine certain diabetes and cancer medications). prescription drug spending. the bigger picture, and not limit the focus In other therapeutic categories drugs will Singling out prescription drugs as the of cost containment to prescription drugs. add to cost growth without displacing most egregious of the cost sinners in spite A better way moving forward is for policy- costs in other sectors. In conclusion, of their relatively small role raises the ques- makers to adopt a holistic approach aimed policymakers need to examine the value of tion of why so much attention is paid in the at measuring value of each health service, all health services, including prescription media and peer-reviewed journals to the diagnostic or therapeutic. Clinical- and drugs, through comprehensive clinical- cost of prescription drugs. Perhaps this is cost-effectiveness is a useful proxy for and cost-effectiveness analyses, as well because prescription drugs are salient in value in that it informs decision makers as budget impact studies. ways that physician and hospital services how much health benefit is likely to be IV004960 are not. Nevertheless, analysts and poli- produced by different uses of resources. Joshua Cohen cymakers should avoid adopting a myopic But other factors should be considered, [email protected] silo mentality. They should evaluate the too, including severity of illness targeted value and budgetary impact of health by a drug or health service. Policymakers Joshua Cohen, PhD (Josha.Cohen@tufts. care services across all sectors (e.g., use should also resist the temptation to view edu) is Research Associate Professor at of expensive equipment such as robotic the various sectors as silos that do not in- Tufts Center for the Study of Drug Develop- surgery systems and positron emission teract with one another. In some instanc- ment. His areas of expertise include pre- tomography scans, expensive procedures es, pharmaceuticals may result in a shift- scription drug pricing and reimbursement such as cesarean sections, routine annual ing of costs – more in pharmaceuticals, policy, patient access to biopharmaceuti- health care exams and new specialty drugs less in other sectors (e.g., cardiovascular, cals, comparative effectiveness research for cancer or infectious diseases.) peptic ulcer, HIV/AIDS, hepatitis C and and prescription-to-OTC switching.

❚ Deals of the MONTH 8 In Vivo’s editors pick October’s top M&A, alliance, financing and deals.

Top M&A: Top Alliance: Top Financing: Pfizer Sells Hospira Infusion AZ Drops Assets Stealthy Carrick Raises Systems To ICU Medical AstraZeneca PLC completed five out- $95 Million Pfizer Inc. sold its Hospira Infusion Sys- licensing deals cumulatively worth Personalized cancer drug developer Car- tems business to ICU Medical Inc. for $1 more than $1 billion, continuing its rick Therapeutics Ltd. raised $95 million billion: $400 million in stock and $600 year-long purge of non-core assets. It in a Series A round led by Arch Venture million in cash. Hospira Inc.’s biosimilars granted Allergan PLC exclusive global Partners and Woodford Investment Man- business was apparently the key draw rights to develop and sell MEDI2070, agement. Cambridge Enterprise Seed when Pfizer acquired the company in an interleukin-23 monoclonal antibody Funds, Cambridge Innovation Capital, GV February 2015 for $15.4 billion in cash in Phase IIb for Crohn’s disease; it gave (Google Ventures), Lightstone Ventures and $1.75 billion in debt. With Hospira’s 3SBio Inc. exclusive Chinese marketing and Carrick’s strategic partner Evotec portfolio of IV sets, the LifeShield line of rights to its diabetes products Byetta AG joined. Carrick was formed in Janu- IV safety devices, infusion pumps, and and Bydureon and it licensed Insmed ary 2015 as Navillus Therapeutics, but is solutions, ICU Medical becomes a lead- Inc. exclusive global rights to the emerging from stealth with a new name ing pure-play infusion therapy company dipeptidyl peptidase 1 inhibitor and what it describes as a “cutting edge with estimated combined revenues of AZD7986, which Insmed will develop R&D engine” to identify promising can- $1.45 billion. Post-transaction, Pfizer will for non-cystic fibrosis bronchiectasis. didates for treating aggressive cancers. hold a 16.6% stake in ICU Medical Aralez Pharmaceuticals Inc. obtained CEO Elaine Sullivan, PhD, was VP of R&D exclusive US rights to AZ’s beta blocker at both Eli Lilly and AstraZeneca. Toprol-XL and its authorized generic. And ex-US rights to the allergy nasal spray Rhinocort Aqua went to Johnson & Johnson’s Cilag GMBH International.

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com AROUND THE INDUSTRY ❚ Maximize Your Reimbursement Potential

The balance of power behind the prescribing decision is changing: payers are ever more in charge. That means that insight into how payers make decisions – how they evaluate drugs, one against another – will be crucial to any successful drug launch.

RxScorecard objectively, authoritatively, and systematically assesses marketed and pipeline drugs in a therapeutic indication from the payer’s point of view. Developed by senior medical and pharmacy leaders from major payers and pharmacy beneﬁt managers, RxScorecard delivers practical and powerful insight into your drug’s reimbursement potential and how you can maximize it.

Transparent, objective, and grounded in payer data, RxScorecard helps you reﬁne your development path, future-proof your market access strategy, and achieve payer acceptance.

Discover RxScorecard today.

Visit https://goo.gl/cZHGsx to review the selection of RxScorecards today. Interact with the data. Compare drugs on clinical, safety, and economic metrics. See the payer perspective.

Georgia Virginia California’s Proposition Kansas Texas IOWA Alaska 61 and a number of other PENNSYLVANIA Indiana Carolina Kentucky MASSACHUSETTS Nebraska IOWA ILLINOIS state-led measures to NEW HAMPSHIRE Nevada Arkansas Indiana Hawaii North Carolina West Virginia MARYLAND NEW JERSEY control drug prices failed Minnesota Connecticut Rhode Island COLORADOIOWAOHIO LOUISIANA DELAWARE Maine to gain traction in 2016. Alabama UTAH But states are likely to Florida MISSOURICALIFORNIAWYOMING remain a battleground in DelawareVirginia CAROLINAVERMONT Washington Idaho NEBRASKA Oklahoma the war against costs in Rhode Island VIRGINIA TEXAS Montana Oregon a pharma-friendly Trump NEWVirginia YORK Wyoming Nebraska IOWA NEW MEXICO Arizona administration. GEORGIA Kentucky Virginia Maine S.Dakota N.Dakota Hawaii Hawaii 10 Gayle Rembold Furbert Rembold Gayle

by Ed Silverman s Californians prepared to vote last month on a contentious ballot measure designed to lower drug prices, a shirt-sleeved Bernie Sanders appeared at The pharma industry mounted a tough a Los Angeles rally in hopes of ensuring that Proposition 61 would pass. and ultimately successful campaign Speaking to an enthusiastic crowd, he got straight to the point. “It looks against California’s measure to control like the people of California are prepared to put an end to the greed of drug prices. Athe pharmaceutical industry,” he bellowed to raucous applause. “They understand that a victory here in California will not only lower prescription drug prices here, it Even though Proposition 61 was one will impact every state in the country.” of many such initiatives to fail in 2016, Not as many were prepared to act as he hoped, however. states are unlikely to be deterred by their lack of success to date in Also known as the California Drug Price Relief Act, the ballot measure was an unex- requiring price concessions from pected bust. Although polls showed residents supported the plan, nearly 54% of voters drug manufacturers. rejected the proposition. This came after months of a bruising campaign in which the chief executives of drug companies were labeled as criminals and the pharmaceutical They may in fact be more motivated industry amassed a $109 million war chest for an ad campaign. given the recent election results. All this underscored how much was at stake and how the states will likely remain a Pharma could interpret November’s battleground in the war over pharmaceutical costs, especially now that Donald Trump Republican victories as a potential has been elected as the next US president. end to federal intervention in drug Proposition 61 was seen as a litmus test for a national debate over rising prescription pricing strategies. drug costs. Anxiety has been rising in the US, where prices for new medicines used to combat such hard-to-treat diseases as hepatitis C and various forms of cancer are But any drugmaker that believes the set higher all the time. Some companies buy old drugs and jack up prices to sky-high political overhaul in Washington is levels. And even prices for some generics are climbing to new heights. the proverbial green light to do business These trends have taken a toll. Pharmaceutical costs became a talking point in the as usual may want to think twice. 2016 presidential election and social media is regularly flooded with consumer gripes. Drug affordability is going to remain A recent Kaiser Family Foundation poll found that reducing costs should be the biggest a key issue. priority for the next president and Congress when it comes to lowering overall health

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com DRUG PRICING ❚

costs, and 63% want the government to But the measure was flawed. It was take action. unclear whether the California Medic- ❚ The Math On Drug Costs “The people are speaking up, because aid program, which is called Medi-Cal, • Total prescription drug spending they have had enough,” says Walid Gellad, could get all needed medicines at a lower in 2015 was $457 billion, 16.7% of MD, an associate professor of medicine price. Moreover, drugmakers could have total health care spending and health policy and co-director of the balked at offering the same discount for Center for Pharmaceutical Policy and a medicine that was given to the VA. This • Average annual spending in- Prescribing at the University of Pittsburgh. would put Medi-Cal in a bind, since the creases of 6.7% are projected Some government officials are adding state agency is still mandated by federal through 2025 their voices. At the BioPharma Congress law to provide the drug to beneficiaries. in Washington DC in November, Andy The VA also negotiates added rebates • Medicare B spending doubled Slavitt, the acting administrator for for some drugs, but those extra rebates, 2007–2015 the Centers for Medicare and Medicaid which are paid to the VA, are not always • Medicare D spending increased Services, had nothing nice to say about disclosed under confidentiality agree- 8.4% 2013–2015 drug companies. In fact, he compared ments. Companies might instead have a growing number of them to Turing opted to raise prices for other residents • Specialty drugs accounted for Pharmaceuticals AG, the company once to make up for any losses incurred sell- 31.8% of spending but only 1% of run by Martin Shkreli, which bought an ing to Medi-Cal. Drugmakers might also total prescriptions older life-saving medicine and overnight have raised prices to the VA or refused to • Top 20 drugs with highest per boosted the price by about 5,000%. sell certain medicines rather than accept unit increase in Medicaid include “You know, last year when I spoke lower payments. seven generics with increases here, the price increases at Turing were “There could have been a waterfall ranging from 140% to nearly 500% making news, and I told you I didn’t want effect,” said Richard Evans, an analyst 2014–2015 this industry to be defined by its worst at Sector & Sovereign Research. “If more actors,” he said. “I defended the industry states passed these measures, the best path SOURCE: Andy Slavitt, BioPharma then, but the more data that’s revealed, forward for the manufacturer would be to Congress, November 3, 2016 the more bad actors you find, and I’m inflate its price to the VA, and they will do telling you now: it’s too many.” that. So when the smoke clears, state prices 11 Slavitt also tossed out some sobering will be back where they were originally and figures. Total prescription drug spending the VA will be paying more, too.” and might well make things worse,” said in 2015 was about $457 billion, or 16.7% For these reasons, the California Leg- Peter Staley, a high-profile AIDS activist of health care spending. And based on islative Analyst’s Office issued a report and Founder of Treatment AIDS Group, in recent trends, he noted that CMS is pro- that was decidedly lukewarm. The report one of dozens of press statements issued jecting average annual increases of 6.7% stated that the “fiscal impact of this mea- by the No on 61 group that was created through 2025. (See box.) sure on the state is unknown. It could by the pharmaceutical industry to defeat range from relatively little effect to signifi- the measure. A Flawed Measure cant annual savings.” However, the office Both sides, meanwhile, also released It was against such a backdrop that the conceded that lowering drug spending by vitriolic statements that sought to scan- AIDS Healthcare Foundation, a non- even a few percent would yield savings in dalize the other, offering details about profit that runs pharmacies and clinics the high tens of millions annually. their opponents secretly backing various nationwide, spearheaded Proposition 61. organizations that were issuing public A controversial organization, AHF has for Pharma Fights Back statements for or against the measure. In years publicly challenged and chastised All of these caveats made it rather easy for short, the battle over Prop 61 was an old- drugmakers over the prices charged the pharmaceutical industry to push back. fashioned, mud-slinging event and made for HIV and, more recently, hepatitis C Company after company donated money for an extremely interesting campaign. medicines. But the ballot measure was to the campaign, which used the $109 Of course, it was closely watched not its most audacious move yet. million raised to hire consultants who only because it was the first such state Under the plan, state agencies would fashioned a steady stream of billboards, ballot measure to be placed before voters, have been required to pay no more for bus tours, rallies and television ads. The but also because it played out in Califor- medicines than the US Department of drumbeat of warnings in those messages nia. As one of the largest and typically Veteran Affairs, which receives a federally also convinced nearly every consequen- most progressive states in the US, Cali- mandated 24% discount from drugmak- tial newspaper in the state to editorialize fornia is regularly seen as a bellwether ers. The plan was to lower drug costs for against Prop 61, although a few practically for political trends. And this was the key up to 7 million Californians who get pre- held their nose as they did so. reason that the pharmaceutical industry scription drug coverage through various “Prop 61 is just a bumper sticker selling marshaled its resources. agencies, including low-income residents change. It lacks thoughtful policies that But by placing the measure directly on the state version of Medicaid. would help with patient access issues, before voters, AHF was also trying a dif-

“I have to keep trying,” she says. “I need to tor enthusiasm immediately after the ❚ Ohio Drug Price look at how I can approach this problem presidential election. After lingering in Relief Act in a different fashion. I still think this is a months-long funk, drug and biotech one of the biggest concerns and something stocks rocketed upwards on November Like failed California Prop 61 has to be proposed.” But she admits she 9. Of course, Trump remains a wild card before it, Ohio’s Drug Price Re- is uncertain which path to pursue, given and has previously voiced a willingness lief Act requires state agencies that her own effort flopped and Prop 61 to combat high drug prices, possibly to pay no more for prescription does not appear to be a winning model. by allowing Medicare to negotiate with drugs than the US Department drugmakers or allow importation. But he of Veterans Affairs, a discount of Federal Action Less Likely has not offered a specific plan. up to 40%. The measure will be Nonetheless, such conviction reflects on- One reason the industry had been con- on the ballot in November 2017. going concern that Washington will not fident is because Rich Bagger, a former take action. The Obama administration pharmaceutical executive, was on the proposed a program to lower costs for the Trump transition team. A former Pfizer Medicare Part B program, which pays for vice president and chief of staff to New injectable and infused drugs for the el- Jersey governor Chris Christie, he took a derly. The move is designed to lower drug leave of absence from Celgene, where he ferent tactic than had been tried by leg- spending by reducing reimbursement was executive vice president for corpo- islators in California and 10 other states fees for doctors, but the pharmaceutical rate affairs and market access, to work around the country. In those locales, industry has so far delayed its start. for Trump. lawmakers introduced bills that would In September, a bipartisan group of “He’s got a deep understanding of, either require drugmakers to explain lawmakers introduced legislation that and a long history with, the brand-name their price increases or disclose many was largely modeled after the state bills. industry,” says James Shehan, senior of their costs in hopes the transparency Known as the Fair Drug Pricing Act, it counsel and head of the FDA regulatory would eventually pressure companies to would require drugmakers to justify their practice at the Lowenstein Sandler law limit their pricing. (See Exhibit 1, and for pricing and provide a breakdown of their firm, who was once general counsel at greater detail on these state initiatives costs before raising prices on certain Novo Nordisk. “And if he ends up in any 12 see online-only sidebar, “State Drug Cost/ products by more than 10%. kind of policy position, you’d expect that Price Transparency Legislation.) Co-sponsored by US Senator John Mc- relationship to continue. I think he’s prob- All but one of these gambits failed. A Cain (R-AZ) and US Representative Jan ably going to take the industry view on bill was enacted in Vermont, but whether Schakowsky (D-IL), the bill would also pricing.” Bagger, however, was recently it actually leads to lower or stabilized require drugmakers to notify the US De- sidelined along with Christie following prices remains to be seen. Elsewhere, partment of Health and Human Services – vice president-elect Mike Pence’s ascen- the pharmaceutical industry succeeded and submit a justification report – 30 days sion to the top of the transition team. This in slapping aside each and every effort. A before they increase the price of certain robs the industry of a key ally, underscor- legislative aide in California complained medicines by more than 10%. ing the uncertainty drugmakers face. that, during an assembly committee hear- The reports will also require companies ing last August, a bill that was making to provide manufacturing and R&D costs Crossing Borders notable progress was suddenly “gutted.” for those drugs, as well as net profits asso- Even so, state legislators may encounter Despite the setbacks, some state law- ciated with the drugs, and marketing and just as much, if not more, frustration makers intend to push ahead. The Ohio advertising spending on the drugs. The with Washington than during the Obama Drug Price Relief Act is set to appear on lawmakers noted the bill will not prohibit years. And as Colorado’s Ginal indicated, the ballot in November 2017. Virtually drugmakers from increasing prices, but is state lawmakers may increasingly look to identical to California’s Proposition 61, supposed to give taxpayers notice of price swap ideas across borders. it is also backed by the AIDS Healthcare increases and “bring basic transparency Foundation. (See box.) to the market for prescription drugs.” READ MORE ONLINE And earlier this year, Joann Ginal, a Whether this will gain any traction is Colorado lawmaker and Democrat who uncertain, at best, though. represents Fort Collins, a small city of Now that Donald Trump will be moving State Drug Cost/Price about 160,000 people located roughly 65 into the White House and the Repub- Legislation,2015-2016 miles north of Denver, introduced a bill licans will control both congressional A review of recent initiatives to require each drugmaker to provide a chambers – the House and the Senate to require cost or price one-time report to the state about any – the pharmaceutical industry is betting transparency by prescription medicine priced at or above $50,000 for that the lurch toward price controls ex- drug manufacturers. a treatment course or per year. pected under a Hillary Clinton presidency Her bipartisan bill died last March, al- is less likely to happen. http://bit.ly/2fEBUqc though she hopes to start anew in January. This explains the initial burst of inves-

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com DRUG PRICING ❚

Exhibit 1 Little Success To Date For State Drug Price Transparency Legislation

State Legislation Status

California Proposition 61: The California Drug Price Relief Initiative 11/8/2016 – Defeated on the California ballot

CA A 463: Pharmaceutical Cost Transparency Act of 2015 2/01/2016 – Failed

CA S 1010: Health Care: Prescription Drug Costs 8/24/2016 – Failed – adjourned

Colorado CO H 1102: Drug Production Costs Transparency 3/19/2016 – Postponed indefinitely

6/02/2016 – From Joint Committee on Health MA S 1048: Transparency and Cost Control of Massachusetts Care Financing; pending, but inactive study to Pharmaceutical Drug end of 2016 session

3/23/2015 – Referred to Senate Committee Minnesota MN S 934 and MN H 1060 on Finance Carryover, Senate Committee on Finance

New York NY S 7686: Prescription Drug Cost Transparency Pending, Senate Committee on Health

6/16/2015 – To Assembly Committee on NY A 8265: Pharmaceutical Cost Transparency Act of 2015 Health, pending 13

4/15/2015 – To House Committee on Health, North Carolina NC H 839: Pharmaceutical Drugs Cost Reporting pending

Oregon OR H 3486: Manufacturer of Prescription Drug 7/06/2015 – In committee upon adjournment

Pennsylvania PA H 2029: Prescription Drug Program Pending, House Committee on Health

4/26/2016 – In House Committee on Rhode Island RI H 7839 and RI S 2560: Critical Prescription Drug List Corporations, pending

Vermont VT S 216: Prescription Drugs 6/03/2016 – Signed by Governor

2/4/16 – In Senate Committee on Education Virginia VA S 487: Prescription Drug Price Transparency and Health; Continued to 2017.

1/13/2016 – To House Committee on VA H 1113: Prescription Drug Price Transparency Commerce and Labor, pending

3/10/2016 – 2016 1st special session: by order WA S 6471: Transparency of Prescription Drug Pricing Washington of resolution reintroduced and retained in and Costs present status

SOURCE: National Conference Of State Legislatures

“State legislatures can have a strong on this [effort] on the state level,” says is trying to deflect attention away from sense of independence when it comes to Erik Gordon, a business and law profes- its pricing decisions and cast suspicion new laws,” says Richard Cauchi, health sor at the University of Michigan. “It’s a on the middlemen. Whether this maneu- program director for health insurance, politically appealing issue. They will keep ver will work is uncertain. The industry financing and pharmaceuticals at the trying and will be able to get co-sponsors, has tried a similar gambit by blaming National Conference of State Legisla- because it’s better to be defeated while higher drug costs on the rising co-pays tures. “However, they also can pay atten- trying to do something good.” and premiums that insurers charge their tion to up-and-coming ideas that become Even so, the Republican victories in beneficiaries, but with mixed results. law in other states.” Washington are likely to give the phar- Another key drawback to any transpar- There have already been signs of move- maceutical industry some needed con- ency law, meanwhile, is that lawmakers ment in that direction. Last October, the fidence. During the weeks leading to the are, effectively, counting on being able National Academy for State Health Policy election, the Pharmaceutical Research to shame companies into peeling back – a working group of state legislative and Manufacturers of America, the in- the curtain on their strategies. That may staffers, Medicaid programs, state-based dustry trade group, told its members to be harder to do if the pharmaceutical insurance exchanges, corrections depart- cough up another $100 million in dues, industry believes Washington is unlikely ments and attorneys general staffs – is- collectively, that would be earmarked for to take any substantive action to slow or sued a white paper to encourage state battling drug pricing initiatives. halt drug prices. governments to band together to forestall Meanwhile, drugmakers have gradu- The working group acknowledged as further damage to their budgets from ally begun to shift the conversation. Ever much. Still, they argued that “knowledge prescription drugs. since Mylan NV chief executive officer about what contributes to surging prices, Among the ideas they floated: Heather Bresch testified before Congress what profit is extracted by middlemen, • Regulate the pharmaceutical industry that her company didn’t keep all of the and what incentives promote high-cost like a utility price increases that were taken each year, medication sales would help states de- • Import medicines from Canada more attention has shifted to the role of velop and prioritize policy solutions to • Prosecute drugmakers that violate the pharmacy benefit managers in the limit drug costs.” To make this work, the consumer protection laws protecting complex pricing maze. group suggests that confidential report- against predatory pricing monopolies Her argument was that, at the same ing requirements could be imposed. 14 • Form procurement pools time drugmakers are raising prices, they In any event, prices are already high • Pass “transparency” laws requiring are also paying more rebates to the phar- enough for some Americans, and if prices drugmakers to disclose their costs or macy benefit managers that negotiate continue to rise – for new and old drugs, explain price hikes coverage for their medicines with health alike – drugmakers can expect to con- Of course, these bills are not fail-proof, insurers. Credit Suisse analysts noted in tinue facing the same harsh criticism they even if more do become law. There appears a report last May that rebates grew 28%, have encountered for the past few years. to be growing skepticism that transpar- on average, between 2009 and 2015, and Indeed, any drugmaker that believes the ency laws can make enough of a dent, outpaced net sales growth of 5%. political overhaul in Washington is the though, especially given that most of the The point is that rebates are growing proverbial green light to do business as bills failed to gain traction even as frus- faster than pharmaceutical sales. This usual may want to think twice. tration has been rising over drug prices. contention is being repeated by more The disenfranchised people who voted There is, in fact, speculation that drug- and more companies that come under for Trump – indeed, most anyone who makers will react to any such state law by attack for their pricing. After Bernie is experiencing rising drug costs – can raising prices below stipulated thresholds Sanders accused Sanofi, Novo Nordisk still be expected to gripe on social me- to avoid having to explain price hikes. AS and Eli Lilly & Co. of price collusion, dia and to their local lawmakers if they In effect, that would be the same sort Lilly fired back by arguing that the net can’t afford their medicine. Affordability of end run that some predicted would price of its insulins has not increased will remain a key pocketbook issue, no occur if Prop 61 had passed. One of the since 2009 and pointed to “complex matter what. problems here is that lawmakers are reimbursement designs.” State lawmakers, however, may want to caught between their constituents and Of course, rebates are a cost of doing shift or broaden their focus and consider the realities of the marketplace. They business, and drugmakers can still try requirements to assess the value of medi- can demand all sorts of information, but to raise prices to compensate. But this cines, at least where choices exist. This that doesn’t necessarily mean that drug explanation is starting to gain some trac- approach – essentially, cost-effectiveness companies will be convinced to put a tion. In fact, after Mylan’s Bresch testified – is increasingly gaining traction among brake on rising prices. before the House Committee on Oversight health plans, for instance. And then per- There is no reason to think, however, and Government Reform, lawmakers de- haps place a ceiling on prices. That may that this will deter some state lawmakers manded the company provide documents bring some companies to the table. from trying anyway. that include contracts with pharmacy IV004968 “I don’t think the outcome of the elec- benefits managers and distributors. Comments: tions in Washington will have much effect In effect, the pharmaceutical industry Email the editor: [email protected]

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com DRUG PRICING ❚ In Vivo Pharma intelligence |

advertise with us and take your business to the next level.

you won’t believe the transformation Contact our sales executive to learn about our various advertising opportunities available to you!

Christopher Keeling +44 203 377 3183 [email protected] Customer Care: +1 888-670-8900 (USA)

Confusing and ineffective channels of innovation adoption and a lack of funding hamper the UK’s reputation as one of the world’s health care capitals and a driver of care excellence – in spite of its global brands, NICE, MHRA and the NHS itself. But changes that should transform market access are in place and are worthy of close attention in

16 the next two to three years. Shutterstock: Michal Bednarek Michal Shutterstock:

by Ashley Yeo unded through direct taxation, UK health care is free at the point of care in the vast majority of cases, and has earned international plaudits, notably In spite of the major distractions of in a Commonwealth Fund study of 2014. In that international comparison Brexit, the UK medtech industry recently of health care systems of 11 countries, the UK came out on top in nine cat- refocused on its main brief of lobbying egories. But it was notably poor in the Healthy Lives category, measuring for speedy adoption and efficient Fsuch elements as infant mortality and quality of health at the age of 60. procurement of innovation produced by The issue for the UK as many see it is the systemic underfunding of health care. an industry that generates £18 billion of UK health care services are demanded by a population of 65.1 million (June 2015) and sales annually in the UK and overseas. growing, and yet the allocation of GDP to health care is studiedly mid-ranking at 9.12% (2014, including private expenditure), and well below the 17.14% allocated in the US Many see the UK as a large market, (where just over half of expenditure is from private resources), according to the World but not necessarily one to launch Health Organization (WHO) Global Health Observatory data repository. incremental or disruptive innovation. But three new reimbursement pathways The Organization for Economic Cooperation and Development (OECD)’s comparison and the Academic Health Science of countries in Health at a Glance 2015 puts the UK in the middle third for health ex- Networks offer the promise of penditure per capita, and in the bottom third per capita for each of: doctors, hospital improvement. beds, MRI units and CT scanners. It is a picture that seems to highlight a different set of superlatives than those used in the Commonwealth Fund study. What is the medtech These and other initiatives are fleshing company supposed to make of these apparent opposites? out the NHS’ Five Year Forward View, The UK Department of Health (DH) would likely call its approach necessary spending a plan to adapt affordable delivery to efficiencies; however, the National Health Service (NHS) went into acute overspend in current patient demands with smart new 2015-16 – dipping to a record £2.45 billion loss. In fact, at a Westminster Health Forum care models. Medtech has a key role to (WHF) meeting in London in May 2016 it was reported that 65% of NHS providers are play in the sustainability of the plan. in deficit, including 39 Clinical Commissioning Groups (CCGs), which had overspent to the tune of £151 million ($183 million), and that the overall 2015-16 deficit is more like £3.5 billion “in reality.” The received wisdom is that for the coming periods 2017- 18 and 2018-19, the NHS is set to experience the biggest funding drop in its history.

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com MEDTECH MARKETS ❚

The NHS provides 85% to 90% of tive Ian Hudson, MD, said at a meeting of has discovered that engaging with the patient care needs in the UK. The strain industry professionals in mid-September system can be fraught with problems. on its resources prompted NHS chief (WHF, London, September 15). (See sidebar, “Medtechs Bemoan Circu- executive Simon Stevens to quantify a However, for the medtech companies, itous Journey To Access UK NHS.”) financial black hole of £30 billion that he whether UK-based or foreign, the key suggested should be filled by £8 billion preoccupation is selling into the NHS NICE Conundrum – of extra government cash and £22 billion – Brexit-affected as it may well become. Benefits For Medtech? of internal productivity and efficiency Navigating the NHS to get a product, CE-marked products can be placed on savings, annually, by 2020-21. service or procedure into commercial the market in the UK in any setting of Stevens, recruited from the private use can be far from straightforward, even care – while the UK remains an EU mem- sector in 2013, has been quick to appraise with a proven, money-saving innovation. ber state, at least. That alone does not the NHS’ needs – from budgeting through That has been the experience of UK SME guarantee commercial uptake, however. system transformation through staffing, Forte Medical Ltd., for instance, which Products that represent a new care path- post Brexit-meltdown. He set out his vi- way or are radically different or innova- sion in October 2014 in the groundbreak- tive may qualify for a National Institute ing Five Year Forward View (5YFV). If his for Health and Care Excellence (NICE) vision fails, it won’t be for any lack of appraisal – via the Medical Technolo- application on his part. gies Evaluation Programme (MTEP) or In November 2015 NHS England secured NHS’ Stevens is the Diagnostics Assessment Programme a frontloaded NHS funding settlement of (DAP). Unlike the Technology Appraisal £8.4 billion to kick-start the 5YFV. It argues trying different (TA) pathway, which mainly serves the that the plan’s success will depend on drug industry, devices are not selected “intensified prevention and public health, mechanisms to by NICE, but must be proposed by the a well-functioning social care system, and company itself. targeted revenue and capital funding for ensure that The purpose of NICE guidance is to service transformation.” increase understanding of a technology But as recently as October 31, 2016, po- innovations reach or procedure. It helps make a proper case litical spats were still raging over whether with the commissioners of clinical care 17 this cash was actually being made avail- the market. He has (the 209 CCGs) and the trusts. But it does able, incrementally as promised – and not guarantee adoption. There is no link. what the true amount is. announced three new The issue of this “NICE disconnect” is constantly raised for public scrutiny by UK Market Access For Medtech channels of access the ABHI. The industry sees in this an If all this paints a picture of difficult unfair treatment for medtech. If a drug market access conditions in the UK, it’s that will serve as undergoes the NICE TA process, it is a one with which local manufacturers are mandate to be funded and made avail- accustomed. guaranteed routes able. This does not happen in medtech. The main UK medtech trade industry NICE attempted to address this per- associations (the Association of British to get innovation in ceived imbalance with its Innovation Healthcare Industries – ABHI – for medi- Scorecard, which is a mechanism by cal devices and the British In Vitro Diag- the market and which national clinical directors can nostics Association – BIVDA) split their assess where innovation is/is not being time fairly evenly on two major themes: reimbursed. introduced. Many see it as a worthy idea regulatory issues, especially in view of that has however not had a telling effect the now-finalized twin EU Medical Device and moreover is resource heavy. The feel- and IVD Regulations (MDR and IVDR); ing is that, its benefits unclear, its days and the problems with and/or lack of the might be numbered, for medtech at least. pace in NHS medtech adoption. (Also see NICE has latterly mooted fees for its “Brexit: What Now For Device Notified HTA work on TAs. At present, no fees are Bodies, CE Marks And The Future MDR/ planned for medtech, but the sense is that IVDR?” – Medtech Insight, June 30, 2016.) the issue is not entirely off the agenda, And Brexit is a subtext to everything at even though the consensus is that making present. Indeed, for the UK regulator, the charges for guidance that is not linked to Medicines and Healthcare products Regu- payments or uptake would be a difficult latory Agency (MHRA), Brexit has become step to take. the “the greatest area of thought for the The ABHI feels that fees of this nature agency at present,” agency chief execu- should be a last resort. It is indignant

about any suggestion of an additional fee understanding. The sense that the UK ❚ PbR And HRGs: burden on companies whose products is moving slowly toward accountable The UK’s Own DRGs And are being assessed for public benefit. care organization (ACO)-style systems is Coverage Systems During a recent consultation that closed palpable. They are being broached at CCG in late September, it registered its full level in the UK, using the new Sustain- Payment by Results (PbR) is the objections on principle and on economic ability and Transformation Plans (STPs). system used to pay providers for grounds. Unless derailed, it seems that Lord Prior of Brampton, a junior health treatments delivered. The levels TA fees (which do have the potential to minister and one of the new intake in depend on the complexity of impact certain medical technologies and Prime Minister Theresa May’s post-refer- the treatments. PbR covers the companion diagnostics) will go ahead as endum government, believes the UK NHS majority of acute care settings. of May 2017. is at the point of no return. “There is no If a technology is used in the plan B,” he told ABHI meeting delegates inpatient setting, it is likely to Procurement Under on November 2, 2016, adding, “we are be covered by PbR. Renewed Scrutiny fully committed to the STP process.” Along with adoption and reimbursement, The STPs were announced in NHS plan- Technology used in the com- the theme of procurement – securing or ning guidance published in December munity or home setting will be purchasing goods and services within the 2015. NHS organizations in different parts commissioned by CCGs under NHS’ commissioning of care remit – is of the country have been asked to col- block contracts or, rarer, via a another of the elements of the system that lectively develop “place-based plans” for direct procurement model. can be frustrating to companies. the future of health and care services in Procurement of device and pathology their area. Draft plans were submitted in The UK system of Healthcare services are under renewed scrutiny fol- June 2016, and final plans were expected Resource Groups (HRGs), which lowing publication of the final report of to be completed in October 2016. are similar to DRGs, is currently Lord Carter, “Operational productivity These are intended to help local areas being updated to become the and performance in English NHS acute deliver the Five Year Forward View vision HRG4+. The current HRG4 sys- hospitals: Unwarranted variations.” Is- of greater integrated care, and evolve new tem includes 1,500 groups, each sued in February 2016, its recommended models of care that look at whole-system 18 covering episodes of care from actions aim to save the NHS £5 billion design across health and social care over admission to discharge. It relies each year by 2020-21. the next four years. on the cost to treat, and if manu- Indeed, the NHS procurement system facturers can prove that they in the UK has long been a bugbear of Tariffs And Reimbursement can save money (by reducing manufacturers – with industry often If STPs are a welcome move, ABHI market length of stay or supporting local accusing agents such as the DHL-owned access director Andrew Davies is acutely policy), they stand a chance of NHS Supply Chain and NHS Shared Busi- critical of how medtech tariffs work in the getting a good tariff. But without ness Services of doing little but charging UK. If a company is introducing a new cost impact data, a product will manufacturers for market access. Com- technique, it needs a tariff as the mecha- not be used in the NHS. panies can deal directly with providers, nism for providing reimbursement. and local deals can happen outside the But securing a tariff is usually a slow The UK uses ICD-10 as its national Supply Chain, but the bottom line for and complex process, especially given classification of diseases, and them is being paid properly. limited budgets and the potential for OPCS 4 (Office of Population, Cen- Supply Chain has another 1.5 years competing therapies to be “defunded” as suses and Surveys) for interven- of its extended contract to run, after a consequence. The tariff is also based on tions. (The US uses CPT coding.) which there will be a new model of UK figures that are two to three years old, and procurement based around 11 “operating moreover regional differences mean that towers” that will be going out to tender. local tariffs may be applied, depending on The DH will coordinate and monitor the the population needs, which could affect success of the new system, which is an- the national tariff. “Getting into the tariff other attempt to standardize products, system is hard, and it takes a long time to supply routes, service specifications, get reimbursement coding. It also takes commissioning requirements and clinical a long time for reference pricing to catch performance. up,” says Davies. The move to evidence- and outcomes- In specialized services areas, which based models of payment are more talk commission expensive and/or high-risk than action right now, but the intent is products and procedures for use in the firm and indeed they are key to Stevens’ inpatient setting, a prioritization system is New Models of Care (as featured in the increasingly referencing benefit and cost- 5YFV). They are gathering support and effectiveness. It is a strong indication that

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com MEDTECH MARKETS ❚

evidence-based models are becoming more over new initiatives that promised to do important. Davies says it is “crucial that precisely that, but they all foundered for ❚ Facts And Figures On both clinical and health economic evidence one reason or another. The Wanless report NHS And Medtech UK are considered; even if a technology is cost- of 2002, for one, is often evoked for its lu- effective, it doesn’t automatically get the cid – and portentous – messages about the NHS England had a budget of green light, as there is always the afford- need for sustainable funding of health care £101.7 billion for 2015-16, rising ability question.” He adds, “a product can in order to forestall just the sort of disaster to £119.6 billion by 2020-21. be reimbursed and still not be adopted.” many feel the NHS is now on the cusp of. The three types of UK national reimburse- Stevens calls it a “new innovation diffu- £72.5 billion of this was allo- ment for medical technology products sion funding mechanism” that is consistent cated to the CCGs; £10.4 billion were recently listed by industry consul- with the policy direction of the DH’s Ac- to primary care; and £14.3 billion tant Arthur Brandwood as follows: celerated Access Review, the final report to specialized commissioning. of which was issued after much delay on • The Drug Tariff – which is run by the October 21, 2016. His new Innovation and There were some 3,268 compa- Department of Health – is aimed at con- Technology Tariff presents “for the first nies in the UK medical technol- sumables and is suitable for prescription- time” a clear “route to market” for innova- ogy sector in 2015, generating based products (drugs and appliances) tions identified by the NHS England’s three a turnover of £18.1 billion (do- used in the community or primary care new “real-world” assessment programs. mestic and overseas), employing setting. In this context, Part IX of the These programs are: some 88,000 people directly. Drug Tariff applies. It includes lists of appliances and dressings, incontinence ap- • The NHS Innovation Accelerator (NIA) The top five core product seg- pliances, stoma appliances and chemical program, which was launched in 2015 ments in the UK are single-use reagents that are allowed to be prescribed. to support individuals to develop and technologies, IVDs, orthope- GPs are aware that if they dispense an introduce high impact, tried and tested dic devices, wound care and item that is not in Part IX, they will not innovations into the NHS. By autumn 2015, management, and ophthalmic reimbursed for it. 68 more organizations were using NIA in- devices. novations than at the start of the program. • The National Tariff – which covers the Note: Scotland’s 5.3 million popu- 19 majority of items used in the acute care • The NHS test beds program (launched lation is served by NHS Scotland’s setting (see box – PBR & HRGs – The UK’s at the World Economic Forum in January system of 14 regional boards, seven specialist boards and a central pro- Own DRGs and Coverage Systems). The 2016) – seven “real-world” test beds were curement system; Wales’ 3.1 million NHS conducts also annual reviews of new set up in January 2016 to evaluate new population is served by seven Local treatments and services that it will make technologies that offer better care at the Health Boards (LHBs) and three available under specialized service com- same, or lower overall, cost. They will NHS Trusts; and Northern Ireland’s missioning. These are services provided produce evidence of the impact and cost- 1.9 million population is served by in relatively few hospitals, accessed by effectiveness of their innovations in 2018. a Health and Social Care Board and comparatively small numbers of patients, five HSC trusts. and usually located in specialized hospital • NHS England’s Commissioning through trusts. It has an annual spending budget Evaluation (CTE) program, which enables Sources: NHS England – Annual of £15.6bn (2016-17) – but only £500m is a limited number of patients to access Report 2015-16; Strength & Oppor- allocated to “high-cost devices”. treatments that are promising but not yet tunity 2014 funded by the NHS, while new clinical • Capital equipment – which is run at and patient experience data are collected acute trust level, in terms of purchasing. within a formal evaluation program. The NIA is kicking off the plan in 2016- Three New Reimbursement Routes 17. The other two routes will follow in For Medtech Innovations 2017-18. These explicit national reimburse- Much to his credit, Stevens is trying ment routes for new medtech innovations different methods and mechanisms to should accelerate the uptake of new ensure that medtech innovation reaches medtech devices and apps for patients the UK market. At the NHS Confederation with diabetes, heart conditions, asthma, annual general meeting in June 2016, he sleep disorders and other chronic health announced that three channels of access conditions. Other areas such as infertil- will be the guaranteed routes to get in- ity and pregnancy, obesity reduction and novation in the market and reimbursed. weight management, and common mental This is welcome news. Over the years health disorders will also benefit. much breath has been spent and ink spilled The new system is designed to make it

❚ M edtechs Bemoan Circuitous Journey To Access UK NHS Forte Medical Ltd.’s story is an example of how SME innova- and/or are being given broad-spectrum antibiotics that are tors can be pushed to the edge of existence if their genuine failing. “It was, and is, an unmet need,” says the CEO, who approaches are rebuffed by any one of the many decision- points out that urine can be used to diagnose any number making bodies in the NHS. of conditions including cancer. “In a non-touch world, our Giovanna Forte, chief executive of Forte Medical, has sev- very simple device gives a first-time diagnosis,” she claims. eral times this year alone stood on podiums and recounted But the company had to establish evidence for the device. the tortuous path that her company has had to follow, and Trials to prove reduced contaminations are hard to secure her experiences stand as a salutary tale for similar compa- and can be costly – Forte Medical was quoted £135,000 nies and wannabes – those making efforts to get a proven ($165,000) by one UK trust to run a trial (the true cost of innovation adopted and into UK NHS circulation. which the company later found to be less than a fifth of this Forte Medical is over 10 years old, but only recently total). The firm finally scored successes in trials at the UCL scored a meaningful success in getting the message about Medical School (a three-year trial) and Barts Health (The its technology, a non-touch urine collection system called Royal London Hospital), which showed contamination rates Peezy Midstream, understood. That was at Pitch@Palace, in being reduced from 17% to 1.5%. October 2016, a competition that offers selected technol- Results from a two-year study of urine collection methods ogy businesses the chance to pitch to a global audience of across 1,100 patients at Stanford University School of Medi- influencers who can catapult them to the next level. cine are due to be released imminently. That breakthrough notwithstanding, Forte Medical’s ex- These money-saving outcomes in theory should have al- periences of recent years show that taking on the UK NHS is lowed Forte Medical to go to procurement in the UK, but the not for the faint-hearted. company came up against a brick wall of inaction. The UK Giovanna’s GP brother, Vincente Forte, MD, invented the NHS’ QIPP (Quality, Innovation, Productivity and Prevention) device, which secured its first funding in 2006. Forte Medical pathway failed to acknowledge its approaches, for example. released the product in 2009, and it reached the UK market It took four years to get the product onto the DHL-run NHS in 2010. The rationale of Peezy Midstream is that, of the 65 Supply Chain, Giovanna recounts. “That’s a struggle for 20 million urine samples delivered to the NHS every year, up to SMEs that have to keep generating funding.” Forte did get – and often over – 30% are unreliable due to contamination. onto “e-direct,” one part of the Supply Chain, and generated In spite of this, there is no single NHS protocol to al- some income, but found that it was losing on every order low urine to be accurately collected, Giovanna notes. As a because fulfilling orders directly removed any profit; the consequence, patients with UTIs are not being diagnosed, Supply Chain will not stock a product until it has achieved a

easier for clinicians and innovators to get adapt their strategies accordingly.” behind, the rapid uptake and spread of uptake and spread across the NHS. The The networks are now attempting to medical technology innovation in the UK. Innovation and Technology tariff category move into a new phase whereby they Launched in 2014 (by minister for life will remove the need for multiple local exploit each other’s capabilities better. sciences, George Freeman), the AAR has price negotiations. Instead, there will be Berry, speaking at 2016 annual general the task of recommending the conditions the guarantee of automatic reimburse- meeting of BIVDA, stressed that “the UK for making innovative medicines, medi- ment when an approved innovation is is not a perfect market, but AHSNs of- cal technologies, diagnostics and digital used. In addition, NHS England can nego- fer support at various stages.” They are products available to NHS patients more tiate national “bulk buy” price discounts not just open to UK companies – those rapidly than has been the case. A global on behalf of hospitals, GPs and patients. from Finland, Singapore and Ireland are medical technology innovation “power- already using AHSNs. house” might result. At least, that is the AHSNs – Are They Up To The Job? Their help may be much needed to fond hope of the ABHI. The Academic Health Science Networks prove the case for innovations. The NHS Industry has signaled its support for (AHSNs) are a relatively new concept and discretionary spend (the budget) doubled the AAR, which supports some actions are designed to identify and promote in- between 2000 and 2008, but the NHS already underway (via the Vanguards novation in the NHS. They are described has now entered a unique time – one of and Academic Health Science Networks – as a bridge to commissioning and facilita- continual reduction of the spend on the AHSNs) as examples of new care models tors of engagement. There are 15 AHSNs NHS, says Berry. that can deliver change. (Also see “UK around England. “The NHS is a slow After many months of delay, the UK Accelerated Access Review Can Create adopter,” Rob Berry, head of innovation government-commissioned, indepen- A Post-Brexit ‘Medtech Powerhouse’” – and research at the Kent Surrey and Sus- dently compiled Accelerated Access Re- Medtech Insight, October 24, 2016.) Some sex (KSS) AHSN,” believes, but he adds, “it view (AAR) was released in the mid-fall to believe the AAR has been released to give is what it is, and it is down to companies to provide both a structure to, and a tailwind a fillip to a UK industry still reeling by the

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com MEDTECH MARKETS ❚

certain volume. “It’s a vicious circle,” she says. stresses that accuracy and right-first-time testing needs to Keeping up with Supply Chain’s tendering schedules and be the benchmark for specimens used for laboratory investi- monitoring the NHS framework require time and attention. gations in order for this product to be more readily welcomed Frustrated by events, the company contacted NHS England by those that mastermind urine screening. chief executive Simon Stevens as well as NHS England’s The NHS is evidently a hard market in which to launch national medical director, among many others, to complain clinical innovations, but after much work over many about its difficulties with the Supply Chain. years, Forte Medical at last seems to be making some NHS England recommended that Forte seek out the Test headway. Giovanna’s advice to budding device compa- Beds route. “But how much time does this take and how nies with ideas like hers is as follows: much money does it take for a small company to keep go- • Make sure you’re well-funded. ing for months and years while trying to work with the NHS, offering solutions that will save in our case £30 million on • Look out for first tenders and timings. reducing retests and much more by way of efficiency sav- • Generate evidence, even if you’re going to have a ings?” asks Giovanna. hard time with the NHS. (“It’s worth it – if we had Forte Medical has actually kept itself going with LDA fund- done that several years ago things might have hap- ing, angel funding and match funding. It has explored but pened faster, but we didn’t have the money then.”) rejected the idea of private equity funding. It has applied • Establish your cost benefits. for grants, “a very time-consuming activity,” and entered innovation awards competitions, albeit with no guarantee • Gather champions and advocates and get the sup- of winning. “It has cost us £3 million to keep going over 10 port of users. years – and over three iterations of the product.” • Engage clinicians. Go to nurses. Talk to patients. It has also, meantime, uncovered the need for new • Find good sales executives. specimen collection systems to assist with novel early-stage cancer urine tests; work has commenced on these designs, • Participate in industry bodies, like SEHTA (the South East Health Technologies Alliance), which with acceleration planned once the Peezy Midstream is 21 generating revenue for the company. support health technology businesses and foster With some laboratories – NHS and private – being re- collaborations between academia, business and munerated on volume rather than quality, the incentive to clinicians. SEHTA has been a useful networking reduce retesting is not always compelling. But Giovanna body for Forte Medical, as has the ABHI.

Brexit vote of June 23. might yet mean a UK recession. Or maybe Contract. The guidance was also pub- Specifically, it: pledges a renewed NICE resurgence in health care, for the UK lished three months earlier than normal, focus on medtech, which could lead to remains a big market for medtech, if not to allow local leaders more time to plan an effective route-to-market for key tech- exactly a launch market in the way Ger- their priority areas such as cancer, mental nologies; proposes alignment of national man and the US markets are. health, learning disabilities, primary care evaluation processes; focuses on “real- For the UK, there are potentially very and urgent and emergency care. world evidence”; supports “commission- tough times ahead, and Brexit has no Are these elements, coupled with ing through evaluation”; and aims to use doubt made companies, already nervous Stevens’ new reimbursement channels, the full potential of the AHSNs to promote about broaching market access in the UK, enough to change perceptions about innovation adoption, using local networks even more trepidatious. But the AAR, the UK? The UK has the global health for local implementation. and 5YFV represent positives for those care brands – NICE, MHRA and even Cynics might view it as another worthy innovators that have technologies that the NHS itself. But maybe that raises NHS/DH initiative that will eventually be can make a difference to the system ef- expectations of performance in the local superseded. The UK NHS and DH, sadly, ficiencies and patient care. market in terms of innovation adoption, have a track record of grand innovation Equally encouraging, NHS England procurement and reimbursement. These adoption schemes quietly coming to a and NHS Improvement recently pub- expectations are not entirely born out in halt. But right now, enthusiasm for the lished the NHS Operational Planning reality, or at least not yet. AAR prevails. Guidance, which, for the first time, cover IV004964 two financial years. The 2017-18 and 2018- Final Words – A Culture Shift Begins? 19 guidance enables NHS trusts and com- Indeed, the UK’s “DNA legacy” is to be missioners to plan for the years ahead, involved in health care. So says industry underpinned by a two-year tariff for NHS Comments: consultant Arthur Brandwood. Brexit patients and a two-year NHS Standard Email the author: [email protected]

The promise of outcomes-based contracts for biopharmaceuticals has yet to be realized in the US. Although precise numbers are hard to come by, payers and manufacturers agree the field is still nascent. However, they don’t seem to be giving up on the idea.

22 Shutterstock: Lightspring Shutterstock:

by Cathy Kelly utcomes-based risk sharing contracts between private payers and pharmaceutical manufacturers are still a relatively minor factor in the To date, there’s been more talk than US reimbursement landscape despite a handful of widely publicized action in creating outcomes-based examples and heightened interest in pursuing such deals. contracts between payers and pharma That’s the view expressed by some of the more active US-based payers manufacturers. involvedO in developing outcomes-based risk sharing arrangements for prescription drugs, which generally link coverage and payments to real-world performance and It’s hard to know the actual number incorporate the concept that manufacturers and payers share the financial risk as- of agreements in effect because many sociated with outcomes. payers are reluctant to divulge that “I would say the interest has increased significantly but the execution has increased information. only modestly,” says Harvard Pilgrim Health Care Inc. specialty and pharmacy contracts manager James Kenney. “Outcomes-based contracts are early in their de- One reason for slow uptake is velopment but they are critical steps that must be taken to inform the structure and the difficulty in executing these design of future agreements,” says Humana Inc. pharmacy solution president William agreements, compared with more Fleming, PharmD. familiar cost reduction efforts such as Humana is considered the most active large private payer engaged in outcomes-based rebates and discounts. There are also risk sharing contracts. The national insurer has about 15 contracts currently in place, perceived regulatory obstacles. covering 20 drugs, Fleming says. But the company has chosen not to announce the contracts, so its activities have not garnered widespread public attention. These early experiments, while few in Mid-sized regional health care system Harvard Pilgrim currently has three outcomes- number, are at the very least spurring based risk sharing contracts and has several more in the works. It has been one of the development of the data infrastructure more high-profile players in the field (see box). The health care provider has regularly needed to assess the impact and value of outcomes-based contracts. issued press releases on its contracts, most recently for Eli Lilly & Co.’s Trulicity (dulaglutide). (Also see “Lilly’s Performance Contract For Trulicity Hinges On Head-To-Head Superiority” – Pink Sheet, June 29, 2016.) It’s very difficult to accurately pinpoint the number of outcomes-based risk sharing

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com OUTCOMES-BASED CONTRACTS ❚

contracts currently in effect in the US because many large payers, like Humana, don’t publicly announce them. ❚ Payers And Outcomes-Based Risk-Sharing Contracts UnitedHealthCare officials told a Humana: 15 in effect, details not available meeting of the International Society for Pharmacoeconomics and Outcomes Re- Cigna: six in effect search in May that it is aiming to expand Harvard Pilgrim: three in place, plans others by year-end its value-based contracting by executing UnitedHealthCare: one in effect as of May, plans three to five in 2016 three to five new ones in 2016. The insurer had only one in effect at that point. How- Aetna: confirms two that were announced by drug firms but will not ever, the company has not announced disclose possible others any further contracts to date. Similarly, Anthem: does not disclose Anthem Inc. does not publicly disclose such contracts, according to corporate communications director Joyzelle Davis. Nor do many manufacturers, although contracts in Medicare, such as concerns and payers keep talking about them and again there are exceptions. Novartis with violating federal anti-kickback are finding ways to reach agreement in AG has publicly announced its inter- laws. (Also see “Value-Based Contracting certain cases. The recent proliferation est in outcomes-based contracts for its Needs Federal Safe Harbors To Flourish, of tools to score the relative efficacy, heart failure drug, Entresto (valsartan/ Lilly Says” – Pink Sheet, June 15, 2016.) safety and costs of competing products sacubitril). And Amgen Inc. has been Manufacturers say they are seeking can help advance the discussions. (Also open about pursuing outcomes-based specific “safe harbor” guidance from the see “Scoring Value: New Tools Challenge contracts for its PCSK9 inhibitor, Repatha HHS Office of Inspector General before Pharma’s US Pricing Bonanza” – In Vivo, (evolocumab). they venture into such novel contracts October 21, 2015.) “I think there are a variety of reasons in Medicare. One of the more successful drugs in why there is/is not publicity about some terms of outcomes-based contracts ap- contracts,” Avalere Health VP, health Outcomes-Based Contracts Still pears to be Novartis’ Entresto, which is economics and outcomes Kathy Hughes Considered Hard To Do struggling to compete with much less 23 told In Vivo in an email. “Some payers are But even in the private market, the rea- expensive options after launching in eager to publicize their efforts; others do sons such contracts have not gained more mid-2015. (Also see “Novartis To Payers: not want to be barraged by potential con- traction to date generally revolve around Entresto Works Or You Get A Discount” – tractees – they prefer to be in the driver’s the fact that they’re hard to do. Contracts Scrip, February 12, 2016.) The three con- seat rather than the converse. Similarly, involving traditional rebate or discount tracts for Entresto that have been publicly manufacturers have varying philosophies arrangements are easier and more fa- announced tie outcomes payments to about publicity/confidentiality – some miliar to manufacturers and payers, so the drug’s ability to help patients avoid fear ‘competition’ through public discontinue to be much more common. hospitalization, a relatively clear-cut out- closure; others want to attract attention Challenges in executing outcomes- come demonstrated in Entresto’s clinical generally or specifically to enter into based risk sharing contracts include trials – and an expense payer’s would be additional contracts.” agreeing to appropriate and feasible end- eager to avoid. To add to the difficulties in tracking the points that could demonstrate a drug per- “To me, the best kind of contract is one deals, manufacturers and payers don’t forms to expectations. In addition, payers that is simple and to the point. And the seem to have a consistent definition for may not have the data infrastructures best example I could give you is one that them. “We know that there are a variety in place to support contracts, making is tied to hospitalization,” says Humana’s of arrangements that come under the collection and processing the necessary Fleming. “If a person gets hospitalized general heading of risk-based contracts, information difficult and expensive. while on treatment that’s probably a outcomes contracts, outcomes-based Nevertheless, outcomes-based risk bad outcome for a patient. It means risk sharing arrangements and a range sharing agreements offer manufacturers something didn’t work, maybe the patient of other names,” Hughes commented. an opportunity to gain access to reim- didn’t take the medication as directed, or “Their specifics can vary dramatically bursement in an environment where pay- maybe the treatment was just ineffective. – and some (personal opinion), I would ers are increasingly cost conscious and It could be a range of possibilities.” not put into any of these categories – I interested in data demonstrating a drug’s “If we know that patients who are would say they are discounts with a few value. The pressures are real and grow- adherent on Entresto are going to have bells and whistles.” ing. (Also see “A Road Map To Strategic … 17% less hospitalization, which is The publicized contracts are primarily Drug Pricing” – In Vivo, March 16, 2016.) what the clinical trial data show, over a in the commercial insurance space. (See For payers, outcomes-based risk shar- one- or two-year period, you can begin to Exhibit 1.) There are special obstacles to ing contracts can offer more certainty project what that savings might mean for executing outcomes-based risk sharing around expenses. So manufacturers the plan, and maybe it’s an opportunity

to be held accountable for that’ – some manufacturers might say, ‘I’m willing ❚ Medicaid Best Price to do that but that’s not in my label, Conundrum so I can’t.’ I’m not sure I buy that FDA would say they couldn’t take that type Here’s how manufacturers fear of contract.” it might play out, according to That’s not to say that payers don’t sup- Harvard Pilgrim specialty and port more flexibility in FDA’s regulations pharmacy contract manager around manufacturer/payer communica- James Kenney: most outcomes tions. They are particularly interested in contracts have a base rebate getting more information on a drug before blended with an outcomes it is approved, so they can more effi- pricing component. If the base ciently plan ahead for expenses, Fleming rebate is 20% and the outcomes points out. (Also see “Alzheimer’s Drugs component could yield an addi- and Medicare: A Case For Pre-Approval tional 5%, the net price discount Discussions” – Pink Sheet, September under the contract could be 21, 2016.) 25%, which represents a deeper discount than the 23.1% base Building Data Infrastructure rebate required for brand drugs May Be Best Outcome in the Medicaid program. For the It may be that the best outcome from manufacturer, that would create current experiments will be creating the a 1.9% price “liability” to Medic- necessary data infrastructures to support aid agencies across the country. future arrangements. Express Scripts Holding Co. chief medical officer Steve Miller, MD, has suggested that will be the to change the formulary or encourage an outcomes-based contract with a pri- case, predicting they probably will not do 24 use of the product,” Harvard Pilgrim’s vate health plan and then has to provide much to lower costs initially. (Also see Kenney points out. the agreed-upon discount, the resulting “Building A Foundation: Express Scripts’ Contracts have also been announced price could become the new benchmark Miller On Recent Outcomes-Based Con- in the crowded and highly competitive for calculating the Medicaid best price. tracts” – Pink Sheet, February 29, 2016.) diabetes category. One involves Eli Lilly’s The rebates offered to a private insurer Cigna Corp. senior VP, integrated two-year-old GLP-1 agonist, Trulicity. under one value-based contract could clinical and specialty drug solutions (Also see “Lilly’s Performance Contract establish a new and lower price that must Christopher Bradbury agrees about the For Trulicity Hinges On Head-To-Head be offered to all Medicaid programs. value of building data systems. “This Superiority” – Pink Sheet, June 29, 2016.) Nevertheless, the Medicaid best price is one of the wonderful parts of these And Merck & Co. Inc. has two publicly challenge is not insurmountable, payers outcomes-based incentive agreements,” disclosed deals for its 10-year-old dia- believe. “The best price issue is valid. he said in an interview. “It pushes us and betes blockbuster, Januvia (sitagliptin). However, it’s completely manageable,” others forward in terms of investing in ad- (Also see “Merck/Aetna Pact Links Januvia Kenney maintains. “The way around it, ditional analytics, investing in additional Value-Based Payment To Treatment Inten- very simply, is you put a clause in the insights that help us understand, and the sification” – Pink Sheet, October 11, 2016.) contract to protect them … that says we industry understand, what type of value have all these outcomes components in clinically and financially is driven short Manufacturers Blame there and at no point in any given quarter term by different products.” (Also see Regulatory Obstacles will an outcomes payment combined with “Cigna’s Bradbury Talks PCSK9 Contracts In public discussions, manufacturers the base rebate exceed” the Medicaid And Value Versus Volume” – Scrip, May point to regulatory challenges as major rebate, he says. 11, 2016.) It is hard to know whether the obstacles preventing more wide-scale The other regulatory obstacle often contracts are saving money or improving adoption of outcomes-based contracts. cited by manufacturers has to do with outcomes because little to no data have Medicaid’s “best price” requirement is FDA’s restrictions on off-label communi- been publicly released on how the ar- often cited as a significant barrier. Under cations between manufacturers and pay- rangements are working. However, Cigna Medicaid rules, pharmaceutical manu- ers. However, “I’m not sure I buy into that is committed to being more transparent facturers must offer Medicaid agencies directly,” Humana’s Fleming says. “If I about results, Bradbury said. the cheapest price they give any payer look at a manufacturer and say, ‘I want IV004953 (with a few exceptions, such as the De- you to take risk on hospitalization – if

partment of Veterans Affairs). a member is hospitalized while on your Comments: That means if a drugmaker enters into treatment for any reason, then you ought Email the author: [email protected]

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com OUTCOMES-BASED CONTRACTS ❚

Exhibit 1 Publicized, Active US Outcomes-Based Risk Sharing Contracts

Drug Manufacturer Payer Description Date

Januvia (sitagliptin) Merck will pay larger rebates if Press release by Aetna Aetna Janumet (sitagliptin/ Merck patients on its drug need to add October 2016; starts metformin) therapy to reach HbA1C goals. Jan. 1, 2017

Merck will provide discounts if Announced by Cigna Januvia, Janumet Merck Cigna patients adherent on drugs, show April 2009 improvement in HbA1C.

Price rebates tied to how well Press release by Harvard Trulicity (dulaglutide) Lilly Trulicity performs versus other GLP- Harvard Pilgrim June Pilgrim 1 agonists. 2016; began Q3 2016

Novartis accepts lower net price if Press release by Entresto Harvard Novartis hospitalization reduction rates do Harvard Pilgrim June (sacubitril/valsartan) Pilgrim not replicate clinical trials. 2016; begins Q4 2016

Novartis accepts lower net price if Disclosed by Novartis in Entresto Novartis Aetna hospitalization reduction does not investor call Jan. 2016; replicate clinical trials. began Jan. 1, 2016

Disclosed by Novartis Novartis accepts lower net price if in investor call, press Entresto Novartis Cigna hospitalization rates not reduced. release from Cigna, early 2016 25

Amgen provides additional Repatha discounts if LDL cholesterol Press release by Cigna Amgen Cigna (evolocumab) reductions not in line with clinical May 2016 trial results.

Amgen provides additional discounts if LDL cholesterol Press results by Cigna Praluent (alirocumab) Sanofi, Regeneron Cigna reductions not in line with clinical May 2016 trial results.

Amgen provides additional discount Press release by Harvard Repatha Amgen if LDL cholesterol reductions not in Harvard Pilgrim Nov. Pilgrim line with clinical trial results. 2015; began Q4 2015

Net price linked to cholesterol Press release by Amgen Repatha Amgen CVS Health reduction, appropriate patient use in Nov. 2015 return for preferred formulary status.

Harvoni Net price discount, linked to Press release by Cigna (sofosbuvir/ Gilead Cigna outcomes, in return for preferred Feb. 2015 ledipasvir) formulary status.

Joint press release by Rebif Net price linked to hospitalization, EMD Serono Cigna EMD Serono, Cigna (interferon beta-1a) ER visits avoided. March 2011

Manufacturer has agreed to rebate a Express set amount if Iressa is discontinued Iressa (gefitinib) AstraZeneca Effective April 1, 2016 Scripts before the third fill for any reason, including patient non-response.

Source: Company reports and publicly available data ©2016 Informa Business Information, Inc., an Informa company November 2016 | In Vivo ❚ REGENERATIVE MEDICINE Curative Regenerative Medicines: Preparing Health Care Systems For The Coming Wave

We may be at the dawn of a new era of curative regenerative therapies, but their inherent nature may create barriers to adoption. The Alliance for Regenerative Medicine frames the opportunities and challenges for the industry, arguing that policy makers must begin to understand 26 the ways that these therapies represent value for money. Shutterstock: Lightspring Shutterstock:

BY Faraz ali, ted slocomb mily Whitehead was diag- disease go into complete remission. and michael werner nosed with an aggressive Additional companies using similar form of cancer called acute approaches for other malignancies have More than 700 companies are working lymphoblastic leukemia reported exciting early results, prompting on new gene, cell and tissue (ALL) at the tender age of many to dare speak of a “cure” for cancer. engineering therapies that have the potential for profound and durable 5E in 2010. She had relapsed twice after In fact, when US Vice President Joe Biden responses in patients with a diverse chemotherapy and was out of options called for a “moonshot” effort to “end array of serious and costly conditions, and near death when she was treated cancer as we know it,” he did so fully many of which lack current treatments. with an experimental chimeric antigen aware of the promise of such gene and receptor T cell (CAR-T) gene therapy cell therapies already under development The health care market is grappling at Children’s Hospital of Philadelphia and rapidly approaching the marketplace. with ways to articulate and assess the (CHOP) that saved her life. Emily’s story But treatments for cancer are only the value of these potential curative was published on the front page of the tip of the iceberg. treatments, some of which may be New York Times in December 2012. We are at the cusp of a global revolu- administered only once or a few times. Three years later at the American Soci- tion in medicine. Medical researchers ety of Hematology Annual Meeting, phar- and product developers are now poised There are a number of proposed maceutical giant Novartis AG revealed to bring forward new gene, cell and tis- alternative reimbursement and that Emily was not alone. More than 90% sue engineering therapies that hold out financing models to address the of patients with relapsed refractory ALL the promise of profound and durable potential uncertainty and economic treated with the same CAR-T therapy – responses – often with just a single treat- disincentives that may be associated being developed in a large multi-site ment – for patients with a diverse array with curative therapies. clinical study including CHOP that is of serious and costly conditions, many of now sponsored by Novartis – had their which lack current treatments.

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com REGENERATIVE MEDICINE ❚

The shared mission of these tech- potential of the regenerative medicine beginning to become familiar with the nologies is to establish – or restore – the industry. (Also see “Gene Therapies: technologies involved and with the op- healthy functioning of human cells Waiting To Emerge From The Bottle” – portunities and challenges facing their in patients with cellular dysfunction. Scrip, September 6, 2016.) After decades introduction to the market. Some of the new technologies also of work – and some noteworthy early represent the highest form of personal- setbacks – the fields of cell therapy, gene The Sovaldi Effect ized medicine, requiring the treatment therapy, tissue engineering and broader One curative therapy outside the regenera- to be highly tailored and specific to the regenerative medicine are progressing tive medicine area – Sovaldi (sofosbuvir) patient’s genetic background, and often through the clinic with great promise. developed by Gilead Sciences Inc. for utilizing the patient’s own cells to create As of mid-2016, we identified more than hepatitis C – has been in global headlines the necessary therapies. The term “regen- 700 companies working on regenerative in recent years. Most of the headlines have erative medicine” also includes exciting medicines, and 728 clinical trials ongo- been negative and have focused primarily developments in the use of gene editing ing for such therapies, with 66 potential on issues of price, pharmaceutical com- technologies to replace or correct genetic therapies already in active Phase III (or pany profits, health care costs and patient material with unprecedented precision. equivalent) late-stage clinical trials, access. Noticeably less media – and po- A handful of regenerative medicine almost doubling the count over the previ- litical – attention has been devoted to the products have been approved in various ous year. (See Exhibit 2.) clinical efficacy of Sovaldi or the fact that countries around the world; many other Regenerative medicines represent as a curative therapy it may also be cost- new therapies are nearing the market, a wave of innovation coming to the effective because of the prevention of the currently in mid- to late-stage clinical shores of our health care system that costly long-term consequences associated trials. We expect that several will enter is approaching much faster than most with hepatitis C. the market within the next few years. realize. With the assistance of groups like Without debating the merits of the (See Exhibit 1.) the Alliance for Regenerative Medicine case here, the Sovaldi experience has un- These diverse examples are just a (ARM, www.alliancerm.org), policy mak- doubtedly helped pour fuel on a broader glimpse of the depth, breadth and ers, payers, physicians and patients are fire raging against biopharmaceutical

Exhibit 1 On- Or Near-Market Regenerative Medicines 27

Company/Treatment Indication Status

Lipoprotein lipase deficiency Approved by the EMA in 2012. First approval of a gene therapy uniQure/Glybera (LPLD), a rare and often fatal fat using adeno-associated viruses (AAVs) metabolism disorder

Approved by the FDA in 2015. First approval of a gene therapy Amgen/Imlygic Melanoma based on oncolytic virus technology

Repair corneas and restore sight in Approved by the EMA in 2015. First approval of a tissue Chiesi/Holoclar patients with burns to the eyes engineered medicinal product derived from stem cells

GlaxoSmithKline/ Specific form of severe combined Approved by the EMA in 2016. First approval of a gene therapy Strimvelis immunodeficiency (ADA-SCID) based on ex vivo autologous retrovirus technology

Mesoblast & JCR Acute graft-versus-host disease in Pharmaceuticals Co. Ltd./ Launched in Japan Feb. 2016 children and adults TEMCELL

Gene therapy using AAV for a form Spark Therapeutics/ of inherited blindness called Leber’s FDA submittal 2016; potential approval 2017 SPK-RPE65 congenital amaurosis (LCA)

CAR-T cell therapy for advanced Kite Pharma/KTE-C19 BLA filing early 2017; commercial launch anticipated 2017 non-Hodgkin lymphoma

CAR-T technology for relapsed/ Novartis/CTL019 FDA submittal 2016; potential approval 2017 refractory pediatric ALL

Source: Alliance for Regenerative Medicine

Exhibit 2 There have been commendable recent Gene And Cell Therapy Clinical Trials efforts by various groups to attempt to develop new frameworks to evaluate the value of biopharmaceutical products. Gene And Cellular Therapies And Other Such efforts include the American So- Regenerative Medicine Products: ciety of Clinical Oncology (ASCO) Value Framework, the Institute for Clinical CLINICAL TRIALS and Economic Review (ICER) Value Ph. I: 223 +40% Assessment Framework and the Memo- rial Sloan Kettering Cancer Center’s Ph.II: 439 of current clinical 728 DrugAbacus project, as well as numerous { Ph.III:66 trials are in oncology tools developed by for-profit firms. (Also see “Drug Pricing: With “Value” Debate In Full Swing, ICER’s Influence Grows” – In 12% Vivo, November 2, 2016.) However, even of current clinical trials these attempts have been criticized and are in cardiovascular are at odds with each other, and none of them formally address unique attributes SOURCE: Alliance for Regenerative Medicine of potentially curative therapies that should contribute to an appropriate assessment of their value. drug pricing and the growing costs of • How can innovators in the biopharma- We therefore lack a common vocabu- health care. In doing so, it may have also ceutical industry be better partners to lary even to begin a conversation about unintentionally tainted the optimism and the stakeholders involved? the value of curative therapies. And yet, excitement that should be attached to the it is critically important for policy makers development of curative therapies, and This article – as well as planned subse- to begin to understand all the ways in caused policy makers to fear that the new quent papers – is an early effort of ARM which potentially curative regenerative 28 era of regenerative medicine represents to help frame the opportunities and the medicine therapies may represent value an era of Sovaldi-sized problems. challenges of potentially curative gene for money. We introduce here a simple We are concerned that political rhetoric and cell therapies and to spark a con- framework with four distinct categories may turn into broad policy and legislation versation about specific policy proposals to describe the potential value of regen- that may fail to recognize the uniquely high that will benefit patients, the health care erative medicines. (See Exhibit 3.) value of curative regenerative medicines system and ultimately, society. and that may instead inadvertently create 1. Clinical Impact: In part because of the significant impediments to their funding, What Is a Pound of Cure Worth? nature of the technologies involved, development and adoption. Many stakeholders will intuitively ap- such therapies may have a transforma- Against this backdrop, it is therefore preciate the uniquely high value of tive impact on the underlying diseases critical for major stakeholders in the emer- potentially curative therapies. However, at many levels. The impact of curative gence of curative regenerative medicines to any detailed discussion about the value of regenerative medicines may be felt in engage on the following key issues: biopharmaceutical innovation is fraught different ways: with challenges. This is true for so-called • What lessons can the health care system conventional therapies that are admin- • Quality of the effect. Conventional learn from past experience with other istered – and paid for – chronically over therapies often manage the symptoms curative therapies such as Sovaldi? time (potentially over the lifetime of a of the disease, whereas regenerative patient). It is also equally if not more chal- medicines have unique mechanisms • In what ways will the coming wave of lenging when trying to articulate the value of action that may target the underly- regenerative medicines be different of potential curative therapies that may ing cause of the disease. For example, from Sovaldi? be administered only once or a few times. many gene therapies directly target Part of what makes such a discussion the underlying genetic defect lead- • How should the value of curative challenging is that there is no universally ing to the disease in a manner that therapies be measured and benefits accepted or standardized methodology other therapeutic modalities cannot, distributed among major stakeholders? to assess the value of biopharmaceutical enabling treatment of previously un- innovation across advanced economies treatable conditions. • Do health care systems around the with nationalized single-payer health care globe need to change their policies to systems, or even across public and private • Magnitude of the effect. As a result of accommodate curative therapies and payers within fragmented multi-payer their mechanism of action, curative if so, how? health care systems like the US. therapies may not only halt but even

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com REGENERATIVE MEDICINE ❚

Exhibit 3 Curative Regenerative Medicine Benefits

CLINICAL HEALTH-RELATED QUALITY OF LIFE • Address underlying cause of disease • Improve patient-reported outcomes • Stabilize or reverse organ dysfunction • Improve overall sense of physical and psychological well-being • Halt disease progression • Eliminate or reduce need for chronic • Decrease morbidity therapy • Increase survival • Improve functional abilities Benefits HEALTH CARE COSTS SOCIETAL • Avert future costs of standard-of-care, • Increase work productivity including chronic therapies • Reduce absenteeism • Avert costs of future complications of disease • Find employment and contribute to family and society • Avert future costs of non-compliance and waste • Avert secondary impact on caregivers

SOURCE: Alliance for Regenerative Medicine 29

reverse disease manifestations, that improvements in patient QOL are to be ing hospitalizations, especially for could significantly decrease disease expected, as has been already demon- diseases without existing therapies. morbidity and extend lifespan. strated in other curative settings (e.g., stem cell transplantation). • Eliminating or replacing the direct costs • Duration of the effect. Conventional of existing chronically administered therapies often need to be administered • Patient QOL may benefit from the ability therapies. chronically to be effective. Conversely, to discontinue chronically administered curative therapies often aim to treat the therapies that are often inconvenient • Eliminating the downstream costs as- patient with a single intervention or a and may require frequent travel to spe- sociated with the side effects of existing series of interventions with long-term cialist locations. chronically administered therapies. and even potentially lifetime impact (a phenomenon sometimes referred to as • Improvements in QOL may not be re- • Eliminating the significant costs of non- “one and done”). stricted to patients, but may also extend compliance with conventional thera- to other caregivers involved, depending pies, as well as the costs of programs 2. Quality of Life: Increasingly important on the disease. to encourage compliance. to patients, physicians and payers is not just extension of life, but also improve- 3. Health Care System Cost Savings: Based on ARM analysis, the current ment in objective health-related quality Curative therapies have the potential pipeline of regenerative medicines as of life (HR-QOL) measures and other to offset significant costs to the health described earlier are indeed addressing patient-reported outcomes (PROs). care system. The impact of curative some of the costliest disease areas and The impact of curative regenerative regenerative medicines may be felt in conditions currently driving US health medicines may be felt in different ways: different ways: care costs. (See Exhibit 4.)

• If curative therapies live up to the • Averting the costs associated with the 4. Societal Benefits: Societal benefits are expectations for high clinical impact downstream complications of disease often underappreciated in the evalua- as described earlier, commensurate progression and complications includ- tion of the value of new therapies. The

Exhibit 4 impact of curative therapies may be felt Selection Of Conditions Targeted By Cell And Gene Therapies in different ways:

• Increased productivity and reduced Estimated workplace absenteeism for patients. Annual Cost of Selection of Indications Disease Area to Targeted by Cell and Gene • Employment for patients who previ- Disease Area US Economy Therapies ously have not been able to work.

• Reduced burden on caregivers of Wound care, neuropathic pain, stress patients. urinary incontinence, osteoarthritis, Musculoskeletal >$874bn cartilage defects, spinal disorders, While the broad categories of value avascular necrosis, bone fracture and described are not unique to regenerative other rare genetic muscle disorders medicines, what is unique is the incremental benefit expected over and above what can be achieved with conventional therapies across a patient’s lifetime, and the potential ability to generate such Congestive heart failure, ischemic long-term benefit with a single or a limited stroke, critical limb ischemia, ischemic Cardiovascular >$316bn number of applications of therapy. heart disease, peripheral artery There is a slowly growing but encour- disease aging body of evidence that some payers and health technology assessment bodies globally are beginning to recognize the Spinal cord injury, ALD, multiple potential value of regenerative medicine, sclerosis, Friedreich’s ataxia, neuro- and the need for change: 30 Central Nervous muscular disorders and various >$245bn System (CNS) neurological conditions including • Private and public payers interviewed Alzheimer’s disease, Parkinson’s for a study commissioned by the Cali- disease, Huntington’s disease, etc. fornia Institute of Regenerative Medi- cine (CIRM) in 2009 acknowledged that potentially curative therapies would be paid for in the near term Inherited eye diseases, blindness, Ophthalmological >$139bn with premium increases, “although corneal transplantation the premiums would be reduced if the curative treatments generate long-term cost savings.” Renal cell carcinoma, mesothelioma,

prostate cancer, head and neck cancer, • In the UK, the field of regenerative nasopharyngeal cancer, non-small cell medicine was elevated to one of “Eight lung cancer, ovarian cancer, leukemia, Great Technologies” that will propel Oncology >$124bn lymphoma, skin cancer, brain cancer, future growth. As part of an assess- hematologic malignancy, graft vs. host ment of the impact of regenerative disease, cytomegalovirus infection due medicines in 2013, the UK government to malignancy also expressed the need “to devise suitable models that give appropriate consideration to the long-term savings sometimes offered by high up-front cost [regenerative medicine] treat- Inherited Blood Sickle cell disease, hemophilia A & B, ments.” >$7bn Disorders beta thalassemia • The UK’s National Institute for Clini- cal Excellence (NICE) health technology assessment (HTA) organization Source: Alliance for Regenerative Medicine published in 2016 a formal review of its models as applied to potentially

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com REGENERATIVE MEDICINE ❚

curative cell or gene therapies, and • For some diseases, it may be decades Product Complexity determined that “where there is a before we know if the clinical impact • Some regenerative medicines – particu- combination of great uncertainty but has been as profound and as durable larly ex vivo autologous therapies that in- potentially very substantial patient as hoped for at the time of regulatory volve the extraction and manipulation of benefits, innovative payment method- approval. patients’ own cells – are highly complex ologies need to be developed to man- and involve different procedures sepa- age and share risk to facilitate timely • Stakeholders therefore may feel they rated over time, care settings and even patient access while the evidence is have no guarantee the products will live geography, which may challenge health immature.” up to their promise, which may encour- care systems that are set up around more age a “wait and see” approach to adop- conventional therapies. • A 2016 publication by Eric Faulkner tion, to the detriment of patients. et al. provides summaries of surveys • New technologies may cut across tradi- of US managed care payers and physi- Economic Disincentives tional boundaries. Something that was cians, illustrating that roughly 30% • There is an inherent disconnect be- previously not considered a product or think regenerative medicines will be tween the timing of payment for poten- device (e.g., a patient’s own cells) may transformative and about 60% felt that tially one-time curative medicines and become so with specific manipulation. a regenerative medicine therapy that the savings to the health care system There may not be adequate frameworks permanently cured a disease could that may result, but that may only be to value and reimburse such therapies. merit a significant (>50%) increase in realized over decades after the therapy payment over existing alternatives. is administered. Current insurance • Payment codes may simply not ex- coverage policies, mechanisms and ist to represent payment for the full Although these are encouraging economics are not designed to consider spectrum of product, materials and early signals, recent history suggests the benefits of particular interventions processes used to deliver a cell or gene that stakeholders may not automatically over a long period of time. Most health therapy, and creating and introducing understand all the sources of value asso- coverage policies address the costs of new codes may be more difficult than ciated with biopharmaceutical products, patients on an annual basis and are for more conventional medicines. and that they tend to focus on price, cost not structured to take into account and budget impact. It is therefore critical offsetting benefits of specific therapies Reimbursement Paradigms 31 that regenerative medicine innovators that are realized outside of this annual • Health care systems are generally not engage in the public discourse on this window. This concern is exacerbated in configured to pay for new products in topic and help inform payers and policy more fragmented health care systems, a manner other than a price per unit makers. as is the case in the US, where patients (vial, treatment, procedure), exac- move around between plans over time erbating the divergence in timing of Even If You Build It, and may only be with any given plan product cost and benefits generated They May Not Come on average for two to three years. by the product for one-time therapies. Acknowledging the potential value of curative regenerative medicines is an • Some regenerative medicines may rep- • There may be legal or statutory bar- important first step. However, it is equally resent cures for serious and progres- riers – such as specific coverage or important to acknowledge the potential sive diseases such as congestive heart payment rules set by CMS – that pose challenges such therapies may pose to failure, Alzheimer’s disease or diabetes reimbursement challenges for regen- the current health care system, which that affect large populations waiting erative medicine products. may in turn introduce undesirable barri- for better alternatives. Approval of ers to their adoption to the detriment of such therapies may create extreme While no single barrier on its own patients in need. near-term budget impact issues for may be problematic, the totality of these A preliminary assessment by ARM has public and private payers driven by considerations may create challenges identified several potential challenges high and acute demand that cannot for stakeholders and policy makers, that fall under four categories: be covered by temporary, incremental impeding coverage, coding, valuation, premium increases. reimbursement and, ultimately, adoption Uncertainty of regenerative medicines. • While gene and cell therapies have been • The US health care system is already under development for three decades shifting a higher burden of cost-sharing Toward a New Paradigm and have been studied in thousands onto patients in the form of higher There is a growing crescendo of proposed of patients, we must acknowledge that deductibles and co-pays for their thera- solutions to address some of the potential their successful clinical application is pies. Patient co-pays that are set as a barriers associated with curative regen- still a fairly recent phenomenon. Regula- percentage of potentially high one-time erative medicines. (See Exhibit 5.) Based tory approvals are sparse and real-world price may be prohibitively expensive for on our early assessment, most proposals experience is limited. patients seeking curative therapies. focus on alternative reimbursement and/

or financing models, and are intended Exhibit 5 to address the potential uncertainty and economic disincentives that may be as- Alternative Models sociated with curative therapies.

• Risk-sharing agreements: An agree- Alternative Reimbursement Alternative Financing ment between payers and innovators Models Models to ensure that payers’ exposure is limited or eliminated if a patient fails to Primarly intended Primarly intended respond to an expensive regenerative to address uncertainty to address affordability medicine.

• Value-based contracting: Also known as “pay-for-performance,” an Cost Sharing Cure Pools Supplier Credit Agreements (for payers) agreement between payers and innova- Reinsurance tors that ties the amount of payment Risk Sharing Bonds provided to the degree of value realized Agreements License Fee (clinical, economic or other). (for governments) Annuities Value-Based Consumer Health • Annuities: An agreement between Payments Care Loans the innovator and the payer to spread payments over time to reduce the cost (for individuals) intensity of potentially expensive one-and-done curative therapies. This could be combined with risk-sharing agreements or value-based contracting SOURCE: Alliance for Regenerative Medicine as described to also include a perfor- 32 mance component. incurred by patients who have to travel Reason For Hope • Re-insurance: A financial arrange- to centers of excellence for highly Although most discussion of curative ment that limits insurers exposure to specialized curative therapies and that therapies today focuses on the experience the risk of an expected volume of high- may involve long stays for families near with Sovaldi, less attention is paid to the cost procedures. Re-insurance was such centers. fact that the global health care system successfully introduced and adopted has already been working with curative to address high-cost solid organ and There has been a tendency to jump therapies for more than three decades in stem cell transplantation procedures. to a particular solution from this list of the form of solid organ and stem cell trans- proposals as the silver bullet that will plantation procedures. These procedures • Payer financing: Lease-like financing address all or most of the potential bar- were – and are still today – among the most provided by makers of expensive medi- riers associated with regenerative medi- expensive medical interventions (a Milli- cal imaging equipment to hospitals. cines. Pay-for-performance and annuity man research report from 2014 estimated Financial intermediaries could provide models appear to generate particularly average billed charges for heart transplants similar loans to payers to address high levels of support. We believe that and allogeneic stem cell transplants at situations where there is an issue of it is still too early – and ultimately may around $1 million per procedure). At the near-term but temporary budget afford- not be helpful – to try to pick any one time of their introduction, there was a ability in response to the approval of a proposed solution. The health care sys- considerable amount of technological and new cure. tem may need to be prepared to adopt clinical uncertainty related to utilization multiple solutions that are tailored to and long-term outcomes. There was also • Consumer health care loans: Mort- the specific attributes of the disease and concern then about the ability of the health gage-like financing provided by fi- regenerative medicines involved, and to care system to absorb the costs of these nancial intermediaries that allow the preferences of the local health care procedures. Re-insurance was success- consumers to take out loans to finance system. In addition, what is still missing fully introduced as an alternative model large co-payments or possibly to pay is a comprehensive inventory of such so- to address issues related to uncertainty outright for cures in situations where lutions, supported by rigorous analysis, and affordability. This pairing of medical there is inadequate coverage. modeling and weighing of the pros and and financial innovation has allowed the cons from the perspective of different field of transplantation to flourish over the • Co-payment reform: Reconsideration stakeholders. This work is critical, and decades and to benefit millions of patients of coverage for out-of-pocket expenses has been prioritized by ARM and others. across the globe facing life-threatening

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com REGENERATIVE MEDICINE ❚

conditions. There are many lessons to be ❚ About ARM learned from this experience that may have parallel applications to the coming wave of The Alliance for Regenerative Medicine is the largest single advocacy regenerative medicines. organization dedicated to the emerging field of regenerative medicine. ARM was established to support a dialog between the developers of Conclusions transformational new therapies and policy makers at all levels, with Regenerative medicine, including cell and the goal of increasing awareness about these new therapies and their gene therapy and other similar advanced potential benefits and costs, as well as generating and evaluating therapy products have already begun to potential policy solutions to appropriately enable access for patients demonstrate the potential to deliver on that address the needs of all key stakeholders. their promise to treat or cure a range of diseases. The pipeline of such therapies ARM encourages a productive discussion on these critical topics with is robust. The potential social, clinical patients, public and private payers and other stakeholders as we work and economic value of these treatments together to identify and promote solutions that will ensure potentially is significant and may require a serious life-transforming technologies become widely accessible and adopted rethink of the current focus on costs and as and when their promise is realized. price. It is critical to ensure successful development of these products by creating a ARM also partners with representatives from other organizations reimbursement environment that rewards engaged in multi-stakeholder initiatives to prepare the health care innovation when value is demonstrated or system for curative and/or regenerative medicines. (See Exhibit 1.) can be reasonably anticipated. These include the Biotechnology Innovation Organization (BIO), the Getting there will not be straightfor- International Society for Cellular Therapy (ISCT), the National Marrow ward. There are complex issues to be Donor Program (NMDP), the NEW Drug Development ParadIGms (NEW- discussed, barriers to be confronted, DIGS) program at the Massachusetts Institute of Technology (MIT), the solutions to be considered and even some American and European Societies for Gene and Cell Therapy (ASGCT societal choices to be made. This will and ESGCT), the International Society for Stem Cell Research (ISSCR), likely require a uniquely broad coalition and the Tissue Engineering and Regenerative Medicine International of diverse stakeholders working together 33 Society (TERMIS), among others. proactively and productively years in advance of this wave of innovation. This is the first of a series of papers pre- Multiple Regenerative Medicine Stakeholders sented by ARM and its member organizations in the US and EU that are intended to support the necessary dialogue. (See sidebar, “About ARM.”) Subsequent reports Payers and Patients, will describe the potential reimbursement Health Tech Families and barriers as well as assess the potential Assessment Advocacy Orgs Orgs solutions to the challenges described in this article with far more rigor. This work Physicians, will culminate in specific policy propos- Hospital als and recommendations for legislative Regulatory curative Systems and Agencies regenerative change that may be necessary to unlock therapies Medical Societies the full potential of curative regenerative Multi-Stakeholder medicines. Society – and innumerable Dialogue patients like Emily Whitehead in need of Health life-saving regenerative medicines – will Economists Participants Policy Makers and judge us on our success. Academia IV004955

Regenerative Financial Faraz Ali ([email protected]) is Chief Medicine Services and Business Officer, REGENXBIO, Ted Slo- Innovators and Reinsurance Trade Orgs Companies comb ([email protected]) is VP, Commercial Planning, Audentes Thera- peutics and Michael Werner (michael. [email protected]) is Executive Director of the Alliance for Regenerative Medicine SOURCE: Alliance for Regenerative Medicine and a Partner at Holland & Knight LLP.

Real-world evidence promises to solve many problems inherent in getting a drug to patients at a good price. It could slash development costs and help make the reimbursement case to payers. But there are challenges for companies that want to exploit real-world evidence to get their drug RWE to patients in Europe.

34 Shutterstock: Anna_leni Shutterstock:

by Francesca Bruce etting an innovative new drug to patients and convincing payers to pay a good price is no easy feat, as pharma companies know. Real-world evi- Real-world evidence has the potential dence has for some time been touted as a remedy for quicker approvals, to help companies get drugs to patients better discussions with payers and flexible reimbursement agreements. more quickly by altering pharma’s R&D Even though advances in digitization mean that data are potentially paradigm. Gmuch more accessible, real-world evidence has yet to fulfill its promise. A lack of trust in what will happen to patient data, poor approaches to market access and concerns RWE is likely to become a more over whether the data are fit for purpose are just some of the challenges in Europe. important means of proving the value of Cash-strapped payers are balking at the prices of many pharmaceuticals and think- medicines to payers, thus improving the ing hard about whether they want to pay. Real-world evidence originating from, for odds of getting reimbursement. example, patient registries, electronic health records, claims data or observational cohort studies is likely to become an increasingly important means of proving the Adoption has been slow, but increased value of medicines to payers. Janssen Pharmaceuticals Inc.’s Nigel Hughes, scientific digitization of real-world data sources director, RMEDS (real-world evidence, medical affairs, established products, statistics), should encourage more usage. believes RWE makes good business sense. “Understanding real-world experience and outcomes is critical to ensuring we provide safe, efficacious products to our patients Pharma companies face a number of in any given market … and getting excellent outcomes for patients and demonstrating challenges in successfully exploiting the real-life value of those outcomes to stakeholders is key to the firm’s business suc- RWE, such as poor data quality and cess,” he says. “RWE offers the possibility of gaining greater insights into potential security concerns. opportunities for new products, and/or product extensions, service development and cost efficiencies, including study optimization,” he adds. Service development and “attuned approaches” to a common understanding of how to re-engineer health care provision of efficacious products are further possibilities,” he adds. (Also see “Q&A: Janssen on where it is heading with real world evidence” – Pink Sheet, October 20, 2016.) RWE has been around for some time supplementing marketing authorization applications and pricing and reimbursement files. Although no silver bullet, Anke van Engen, a

| November 2016 invivo.pharmamedtechbi.com

invivo.pharmamedtechbi.com In Vivo invivo.pharmamedtechbi.com Real-World Evidence ❚

principal at QuintilesIMS, says that RWE difficult to mine. Sweden’s TVL says the is still out. As Leather explains, GSK is the does improve the probability of winning advance of digital records there has been first company to produce such evidence. reimbursement. “An analysis using data a very important development. However, “A lot of people were unsure what the in our HTA Accelerator platform showed digitization is moving at different speeds data would look like, but now we have a that inclusion of RWE in France was as- across Europe. The UK has so far made quality analysis of a substantial database sociated with higher benefit ratings,” she the greatest strides, while progress has that is now with groups like regulators says. Meanwhile, in England, the health also been made in the EU5, the Nordic and guideline writers. Their evidence technology assessment (HTA) body, the countries and other markets, includ- hierarchies don’t include this type of National Institute for Health and Care ing Estonia. GlaxoSmithKline PLC’s evidence and now they have a data set Excellence (NICE) recently changed its groundbreaking Salford Lung Study was they can make sense of and decide what mind and decided to recommend John- only possible because Salford, in Greater it means.” He believes the study is an son & Johnson’s Zytiga (abiraterone Manchester, UK, was a “truly paperless” evolution rather than a revolution in the acetate) for chemotherapy-naïve meta- center that had had for some time an development of real-world evidence that static castration-resistant prostate cancer integrated e-health record system shared will help the field move forward. “It isn’t patients after J&J presented real-world between primary and secondary health just about what the industry produces. evidence from US insurance claims data. care, says David Leather, MD, GSK’s glob- It is also about the value people ascribe The promise of future real-world al medical affairs leader in the respiratory to it; people haven’t had the chance to evidence is also an influencing factor on franchise, who led the UK-based study. evaluate data like this because it has so decision making. Many managed entry (Also see “Real-World Evidence: Lessons far not existed. There has been massive agreements or risk sharing deals in Eu- From GSK’s Salford Lung Study” – Pink interest and I think it is going to trigger rope rely on the gathering of real-world Sheet, September 9, 2016.) an evolution in thinking. That won’t just data (RWD). In France, for example, Cel- This study, which began in 2013, is the be driven by industry but also by the gene Corp.’s Pomylast (pomalidomide) first ever prospective randomized control people who receive the information and for multiple myeloma is reimbursed trial (RCT) in an everyday health care make sense of it.” under a risk sharing scheme, which setting. It set out to compare the effective- Beyond effectiveness, the Salford Lung will see the company repay the cost of ness of Relvar/Breo Ellipta (vilanterol/ Study is also important because it aims the drug if the patient does not respond fluticasone furoate in a dry-powder in- to show payers what financial impact the to treatment. Payers were uncertain haler) with existing therapies for COPD drug may have on the health system. GSK 35 about whether a modest extension of and asthma over a 12-month period in a is gathering health care resource utiliza- progression-free survival would translate real-life setting. To ensure patients expe- tion data, which tracks costs for health into much benefit in the real world. Risk rienced a minimum of interference from care authorities. The findings will be sharing schemes are also common in the trial, data were gathered from elec- published at a future scientific meeting, Italy to secure reimbursement of cancer tronic health records that were updated according to the company. The firm says treatment, and registries track outcomes. every time a patient within the trial came it is the first company to produce such In Spain, Catalonian authorities are ex- into contact with the health care system, evidence and that it hopes it will offer perimenting with managed entry agree- including general practice, attendance a “wealth of information” on disease ments that will rely on data gathered from and emergency center (A&E), pharmacy management to help decision makers. registries. England’s Cancer Drugs Fund and out-of-hours services. The study was Such data could be incredibly powerful essentially offers conditional reimburse- open label and had a broad population of and could highlight savings made else- ment for expensive cancer drugs backed eligible patients with minimal exclusion where in the health system, says Marie by limited evidence, and the gathering criteria, ensuring the population was Kane, chief operating officer of NorthWest of real-world data can make up part of much more representative of the patients EHealth, which developed the technology the evidence package for companies who would take the medicine in real life. platform necessary for the Salford Lung wanting to prove their case. Sweden’s Results from the COPD arm showed a sig- Study. “If a company has a new antibiotic HTA, the TLV, takes a value-based pricing nificant 8.41% lower rate of exacerbations that was incredibly expensive, it would approach. “The price has to reflect the between Relvar and the standard of care want to show that actually by using that value created when the pharmaceutical (p = 0.025). GSK will release results from expensive antibiotic at a certain point in product is used. That means that real- the asthma arm in 2017. the care, the system would actually save world data directly or indirectly showing GSK’s twice-daily inhaled corticoste- money.” the value of the use of a product is of large roid/long-acting beta-agonist inhalers interest to TLV,” says Niklas Hedberg, the Advair/Seretide (fluticasone/salmeterol) New R&D Paradigms? TVL’s chief pharmacist. are facing generic competition and the The regulatory burden that companies company will be keen to see patients developing innovative drugs face is The Salford Example moved on to Relvar. According to Leather, a big one, and the R&D model is fast Digitization and the advance of electronic the firm hopes that the Salford Lung Study becoming unsustainable. The path to health records makes the analysis of real- will positively inform payers, guideline authorization is expensive and often lit- world data easier as sources become less writers and clinicians. However, the jury tered with failures, whereas randomized

controlled trials, the gold standard for Strategies May Shift ❚ QuintilesIMS’ RWE gathering the necessary data, are costly To really harness the power of real-world Strategy, Nine Key Tips and time-consuming. But with real-world evidence, some companies may need evidence, there is potential to do things to think differently and take a second 1. Start planning early on in late differently, resulting in lower costs and look at their internal structures. Hassan Phase II or early Phase III. earlier approvals. The sooner a drug is ap- Chaudhury, chief commercial officer at 2. Simultaneously set up a cen- proved, the sooner it can start to recoup UK-based data consultancy Health iQ, tralized, but locally informed, investment and make a profit, and while believes that the marriage between mar- decision-making and funding the drug is on the market, it is protected ket access and RWE is not as mature as it process for real-world research. by a patent, says Kane. She believes that should be. Part of the problem, he says, is A purely centralized process a trial like the Salford Lung Study, a late that some companies understand market may miss critical local needs. A Phase III trial, could actually be done at access better than others. Whereas some highly localized process can be late Phase II. “It would give companies think of it as simply getting a product on inefficient and less impactful. the capacity to sail sooner, and therefore a formulary, others see it as a bigger pro- not waste as much money. I think it would cess in which all functions in a company 3. Because treatment land- potentially enable adaptive trial design are aligned, and as an opportunity to scapes and payer needs change, create a better environment in which to firms must also re-evaluate the because you are getting the data in an almost live format. You can do monthly sell. In addition, many company teams, process at every development he says, work in isolated silos. Market milestone. reviews of data logs to see what is hap- pening with outcomes.” Kane points to access should touch all functions in a 4. Start with “insight gen- the possibilities in oncology: “If group A company, including real-world evidence. He believes that a combination of GSK, eration,” which includes under- of patients with this particular phenotype which has an “excellent” approach to standing what data are needed is responding to drug A, but group B with RWE with its own specialized in-house and when, how its value is a different phenotype isn’t, you could team, and Roche would be a good model. defined and how it will be used. take group B off the drug and keep group The Swiss firm operates an integrated A on it. This potentially could shorten 5. When the research question is franchise committee that ensures all the whole trial lifecycle and therefore get 36 clear, the next step is an evalu- the different teams working on a brand, your drug to market quicker.” ation of real-world data sources including health economics outcomes Faster approval means fewer develop- to enable the elaboration of the research, market access and research, are ment costs, which could lead to a price research approach. all aligned and unified on what they are that is more attractive to payers. Rafaat trying to achieve for the brand. 6. Don’t try to fill every gap in the Rahmani, CEO of Lifescience Dynamics, evidence. And be aware various Meanwhile, QuintilesIMS’ van Engen believes that in the not so distant future levels of evidence are required thinks that every company should have companies will invest less in RCTs and for impact. an RWE strategy that should span a prod- think about alternative research para- uct’s entire lifecycle and that should “an- 7. Get input from the external digms, with a number of drivers forcing ticipate stakeholder needs.” (See box.) stakeholders in key countries them to think differently. Companies want to ensure the plan can be imple- to get to the market quickly, he says. “The Numerous Challenges Remain mented both at a global and first, second and third to market products Even with a good strategy in place, com- local level. are the ones that share the market, the panies will face numerous challenges. fourth or fifth tend to have a small market 8. Prioritize biggest concerns RWE studies can be expensive – the share, so the earlier you get to market, the expressed by external stake- Salford Lung Study cost GSK around better overall.” It is early days, but the holders. £80 million to conduct, which it says is potential for real-world evidence to drive broadly in line with the cost of a large 9. Consider using a range of change in R&D is acknowledged by dif- traditional RCT. Many companies will be study designs from surveys ferent authorities and already initiatives reluctant to spend this amount of money to pragmatic trials for greater featuring elements of real-world data and will try to use existing real-world impact on decision makers, in- collection are underway. For example, data sources. But most sources of RWD cluding regulators, payers, pro- the European Medicine Agency’s Adaptive are not collected for research purposes, viders, prescribers and patients. Pathways is a “concept” for developing which means data quality is an issue. In No single study is sufficient to medicines and generating data in order addition, methods of addressing data address a priority issue. to allow patients earlier access to innova- gaps and inconsistencies are not yet Source: Anke van Engen, a principal at tive medicines, largely in areas of great widely accepted for statistical validity. QuintilesIMS Consulting Services medical need where traditional means It is therefore not surprising that HTA of collecting data would be difficult. (See bodies can be slow to accept evidence sidebar, “RWE: The EMA’s View.”) from real-world sources. “Randomized

| November 2016 invivo.pharmamedtechbi.com

invivo.pharmamedtechbi.com In Vivo invivo.pharmamedtechbi.com Real-World Evidence ❚

show whether there was any opportunity ❚ RWE: The EMA’s View for error, alteration, bias or to manipulate the data.” The European Medicines Agency believes that real-world evidence Van Engen suggests hybrid designs, is important for making many decisions about a medicine. It helps for example using retrospective data to support pharmacovigilance activities and the assessment of safety inform the design of a prospective real- signals, and it can also help measure the impact of any regulatory world study. Chaudhury points to the measures undertaken, says the agency. Such evidence also enables analysis of Hospital Episodes Statistics a better understanding of a medicine’s risk-benefit balance and (HES), available in England, which he its effectiveness as well as informs HTA and health care utilization says is one of the best data sets in the decisions. These activities apply to a wide range of medicines, world. The data track hospital admis- including authorized medicines, innovative medicines, orphan sions and gives detailed information such medicines and medicines included in Adaptive Pathways. The as the reason for admission, the length of agency says it sees a wide range of RWE collected from numerous stay, and whether the patient was admit- sources, including e-health records, registries, hospital records ted to A&E. With these data it is possible and insurance data. Meanwhile, data from biobank, genomic and to point to trends and have a discussion, digital phenotyping information are increasingly being integrated Chaudhury says. For example, a company into real-world evidence data sets. might show a payer HES data analysis re- vealing that COPD admissions are going Nevertheless, regulators face a number of difficulties that impact up alongside prescribing data that show their ability to access and analyze real-world data. According to prescriptions of a certain COPD product the EMA, these include: are falling. “This is not a study, this is a • fragmentation and lack of interoperability of resources trend. But that is what you can do with • governance issues real-world data, you show what is hap- • privacy concerns pening to really drill down, and based on • inadequate use of methods for integrating and analyzing that information, you can do clinical tri- heterogeneous data als or a study or an audit. The real world 37 • underuse of technological advances is about touch points and clinicians like evidence from sources that they can see.” • a lack of cross-border collaborations and sustained funding Trust is another issue. Janssen’s mechanisms for securing access to real-world data and Hughes points out that people will do- then for analyzing it nate organs but are more reticent about sharing personal data. “The industry It is therefore not surprising that the agency is calling for a “frame- has been challenged in terms of trust work that provides the EU regulatory network with access to and and perception with the general public. analysis of an extensive range of multinational real-world data.” I can understand that; we haven’t exactly This framework, says the EMA, should involve the development of covered ourselves in glory in the past.” “sustainable multi-stakeholder governance and funding mecha- He says the solution is for companies to nisms; a comprehensive characterization of EU-wide sources of be open, honest and transparent about real-world evidence; and identification or development of methods anything they are proposing to do and to integrate and analyze data and collaboration across stakehold- be very clear about the intended use. ers and borders.” Hughes believes that industry, regulators and the general public need a much broader debate about how technology is changing the world. “All sorts of stake- control trials are always our gold stan- say Hedberg. He also advises companies holders need a say in how we manage and dard, other types of evidence serve to to correlate RWD to a baseline to show access this data for the better for society. I supplement this,” says NICE. “The prob- a value for the health development of don’t just mean about new drugs but how lems of confounding, lack of blinding, the standard population, and respond we can manage disease better, or see if incomplete follow-up and lack of a clear to questions relating to pricing and re- there are better ways of managing it.” denominator and end point occur more imbursement. Early planning and early IV004954 commonly in non-randomized studies dialogue with stakeholders is key to make and non-controlled trials than in RCTs,” sure companies get their approach right. the institute says in its methods guide for Data validation can be a big task, but a technology appraisals. good analyst will ensure it is robust, says Sweden’s TVL finds that selection bias Lifescience Dynamics’ Rahmani. “You Comments: is a problem and is calling for solutions, need to say how the data were captured, Email the author: [email protected]

❚ On the Move Recent executive appointments in the life sciences industry

Company Changes DUVALL, Martin To: Tocagen Inc., CEO (November) ❚ ❚ Jeremy Lori Chmura Barton From: Ariad Pharmaceuticals Inc., CEO, DuneCMO, Medical eFFECTOR Devices ADSETT, Roger EVP, Chief Commercial Officer To: Insmed Inc., Chief Commercial Phone: 858-412-8400 Officer (September) From: Shire PLC, VP, Head, Gastrointestinal & Internal Medicine FAYAD, Wael Phone: 908-977-9900 To: Enumeral Biomedical Holdings Inc., Chmn., Pres. & CEO (September) From: Forest Laboratories Inc., ARENS, Holger Corp. VP, Global Bus. Dev. To: Biolase Inc., VP, Managing Dir., Phone: 617-945-9196 EMEA (September) ❚ Martin Duvall From: Consultant CEO, Tocagen Phone: 888-424-6527 FORD, John, PhD To: Enterprise Therapeutics Ltd., CEO (October) BRENNAN, Daniel From: Metrion Biosciences, To: Edge Therapeutics Inc., Co-owner & Investment Dir. COO (October) Phone: +44 1273 2346673 38 From: Insys Therapeutics Inc., EVP, COO Phone: 800-208-3343 GOLDBERG, Michael M., MD To: Navidea Biopharmaceuticals Inc., CHEN, Jenny Pres. & CEO (September) ❚ John Ford To: Cytovance Biologics Inc., From: Montaur Capital Partners, CEO, Enterprise Therapeutics CFO (October) Managing Partner From: Maxcess International, Phone: 614-793-7500 Corp. Controller Phone: 405-319-8310 GORMAN, James, MD, PhD To: Agenus Inc., VP, Strategic Planning COBB, Paula K. & Portfolio Mgmt. (October) To: Decibel Therapeutics, SVP, From: BioAssets Development Corp., Strategy, Portfolio & Programs Co-founder & CEO (September) Phone: 781-674-4400 From: Biogen, SVP, Rare Disease Group ❚ James Gorman Phone: 617-370-8701 VP, Strategic Planning & Portfolio GREENSTREET, Yvonne Management, Agenus To: Alnylam Pharmaceuticals Inc., DULAC, Emmanuel, PharmD, PhD EVP, COO (September) To: Alnylam Pharmaceuticals Inc., From: Pfizer Inc., SVP, Head, SVP, Chief Commercial Officer Medicines Dev. (September) Phone: 617-551-8200 From: Shire PLC, SVP, Head, Rare Disease Phone: 617-551-8200 HAAYEN, Steve To: Spinal Elements Inc., Area VP, Sales, Western US (October) From: The Medical Memory, VP, Bus. Dev. ❚ Steve Haayen Phone: 877-744-6255 Area VP, Sales, Western US Spinal Elements

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com ON THE MOVE ❚

IVARSSON, Magnus, PhD MUZIKANT, Adam, PhD To: Rodin Therapeutics Inc., To: Flexion Therapeutics Inc., VP, Head, Discovery (September) VP, Bus. Dev. (September) From: Proteostasis Therapeutics Inc., From: Synta Pharmaceuticals Corp., VP, Head, Translational Science VP, Bus. Dev. Phone: 617-588-2600 Phone: 781-305-7777

JASKIE, Suzette NOWERS, Chris ❚ Jeremy Barton ❚ Robert (Chip) Hance To: Corindus Vascular Robotics Inc., To: Kite Pharma Inc., CMO, eFFECTOR Director, Vivasure Medical VP, Global Medical Affairs (October) Head, Europe (October) From: MedAxiom Consulting, Pres. &CEO From: Bristol-Myers Squibb Co., Phone: 800-605-9635 Head, Immuno-Oncology & Hematology, France Phone: 310-824-9999 KOLLENDER, Richard To: Rapid Micro Biosystems Inc., CBO & CFO (September) O’CONNELL, Carl From: Quaker Partners, Managing Partner To: Xtant Medical Holdings Inc., Phone: 978-349-3200 Pres. (October) From: Wright Medical Group NV, ❚ Ralph Lipp Global VP, Extremity Mktg. VP, CSO, Noven Pharmaceuticals LEE, David K. Phone: 406-388-0480 To: Shire PLC, Head, Global Oncology Franchise (October) From: Baxalta Inc., Dir., Strategy & Ops., PARKINSON, Chip Oncology To: Myriad Genetics Inc., Phone: 617-349-0200 EVP, Reimbursement Strategy (September) From: Cambia Health Solutions, 39 LEE, John J. Pres., OmedaRx & MedSavvy To: Decibel Therapeutics, SVP, Phone: 801-584-3600 Pharmaceutical Dev. (September) ❚ Mark Plavsic From: Infinity Pharmaceuticals, CTO, Lysogene SVP, Pharmaceutical Dev. PLAVSIC, Mark, PhD Phone: 617-370-8701 To: Lysogene SAS, CTO (October) From: Torque Therapeutics, Head, Process Dev. & Mfg. LIPP, Ralph, PhD Phone: +33 01 5688 52 86 To: Noven Pharmaceuticals Inc., VP, CSO (October) From: Lipp Life Sciences LLC, Founder POUK, John Phone: 305-253-5099 To: 10x Genomics Inc., Chief Commercial Officer (September) ❚ Mark Steele MENES, Remi A. From: Agilent Technologies, SVP, Global Sales & International Ops. SVP, North America Sales To: Aegerion Pharmaceuticals Inc., Phone: 925-401-7300 OrthoAccel Technologies Chief Commercial Officer (September) From: AbbVie Finland, General Mgr. Phone: 855-305-2347 STEELE, Mark To: OrthoAccel Technologies Inc., SVP, Sales, North America MORL, Christopher J. (October) To: Deciphera Pharmaceuticals LLC, From: MSD, EVP, Sales, CBO (October) Mktg. & Customer Service From: miRagen Therapeutics Inc., COO Phone: 866-866-4919 Phone: 781-209-6400 ❚ Kimberly Stephens CFO, Appili Therapeutics

November 2016 | In Vivo ❚ ON THE MOVE

STEPHENS, Kimberly LURKER, Nancy HESS, Connie, MD To: Appili Therapeutics Inc., To: X4 Pharmaceuticals Inc., To: Diffusion Pharmaceuticals Inc., CFO (October) Chair (October) Scientific Advisor (September) From: Immunovaccine Inc., CFO Phone: 857-529-8300 Phone: 434-220-0718 Phone: 902-442-4655

PAUL, Barbara R., MD HIATT, William R., MD SU, Michael, PhD To: Natus Medical Inc., To: Diffusion Pharmaceuticals Inc., To: Decibel Therapeutics, Director (September) Scientific Advisor (September) CSO (September) Phone: 800-645-3616 Phone: 434-220-0718 From: Agios Pharmaceuticals, SVP, R&D Phone: 617-370-8701 ROWINSKY, Eric K., MD JEFSON, Martin, PhD To: Navidea Biopharmaceuticals Inc., To: Rodin Therapeutics Inc., TROUPIN, Barbara, MD Chairman (September) Chairman, Chemistry Advisory To: Aquinox Pharmceuticals Inc., Phone: 614-793-7500 Board (September) CMO & VP, Clincal Dev. (October) Phone: 617-588-2600 From: Apricus Bioscience Inc., SVP, CMO Phone: 604-629-9223 WENDELL, Amy To: AxoGen Inc., JOHNSTON, Karen C., MD Director (September) To: Diffusion Pharmaceuticals Inc., WINKLER, Jim, PhD Phone: 386-462-6800 Scientific Advisor (September) To: Forma Therapeutics Holdings LLC, Phone: 434-220-0718 VP, Discovery & Translational Biology (October) Advisors From: Arvinas Inc., CSO LEON, Martin, MD Phone: 203-535-1456 To: Xeltis AG, BARNETT, Gene H., MD Clinical Advisor (September) To: Diffusion Pharmaceuticals Inc., Phone: +41 44 269 7979 40 Directors Scientific Advisor (September) Phone: 434-220-0718 LOWE, John, PhD ADAMS, Thomas H., PhD To: Rodin Therapeutics Inc., To: ContraVir Pharmaceuticals Inc., CARREL, Thierry Chemistry Advisor (September) Director (September) To: Xeltis AG, Phone: 617-588-2600 Phone: 732-902-4000 Clinical Advisor (September) Phone: +41 44 269 7979 MACK, Michael, MD BIGHAM, Michael F. To: Xeltis AG, To: Adamas Pharmaceuticals Inc., CHISOLM, Guy M., PhD Clinical Advisor (September) Director (September) To: Diffusion Pharmaceuticals Inc., Phone: +41 44 269 7979 Phone: 510-450-3500 Chairman, Scientific Advisory Board (September) Phone: 434-220-0718 MAISANO, Francesco BRENNAN, Christine, PhD To: Xeltis AG, To: Altimmune Inc., Clinical Advisor (September) Director (September) FALK, Volkmar Phone: +41 44 269 7979 Phone: 240-654-1450 To: Xeltis AG, Clinical Advisor (September) Phone: +41 44 269 7979 MCCALL, John, PhD HANCE, Robert (Chip) To: Rodin Therapeutics Inc., To: Vivasure Medical Ltd., Chemistry Advisor (September) Director (October) GREENLEE, William, PhD Phone: 617-588-2600 Phone: +35 91 395 440 To: Rodin Therapeutics Inc., Chemistry Advisor (September) Phone: 617-588-2600 MOEBIUS, Hans, MD, PhD To: Rodin Therapeutics Inc., Scientific Advisor (September) Phone: 617-588-2600

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com ON THE MOVE ❚

MOSS, Neil, PhD CAMPANELLI, Paul V. MESSINGER, Michael To: Rodin Therapeutics Inc., To: Endo International PLC To: ContraFect Corp. Chemistry Advisor (September) New Title: Pres. & CEO (September) New Title: SVP, Finance (September) Phone: 617-588-2600 Previous Title: Pres., Generics & OTC Previous Title: VP, Finance Phone: +353 1 268 2000 Phone: 914-207-2300

SAVER, Jeffrey L., MD To: Diffusion Pharmaceuticals Inc., CASSINO, Cara, MD SARENA, Francis Scientific Advisor (September) To: ContraFect Corp. To: Five Prime Therapeutics Inc. Phone: 434-220-0718 New Title: CMO & EVP, R&D (October) New Title: Chief Strategy Officer Previous Title: CMO & SVP, Dev. (September) Phone: 914-207-2300 Previous Title: EVP, General Counsel SPAULDING, Christian Phone: 415-365-5600 To: Xeltis AG, Clinical Advisor (September) CHILTON, Shaun Phone: +41 44 269 7979 To: Clinigen Group PLC SPIEGEL, David A., MD, PhD New Title: CEO (November) To: Kleo Pharmaceuticals Inc. Previous Title: Deputy CEO New Title: CEO (September) WELSH-BOHMER, Kathleen A., PhD Phone: +44 1283 494 340 Previous Title: Co-founder To: Diffusion Pharmaceuticals Inc., Phone: 203-428-4596 Scientific Advisor (September) Phone: 434-220-0718 CHMURA, Lori To: Dune Medical Devices Inc. Resignations New Title: CEO (October) WINDECKER, Stephan Previous Title: Pres., US To: Xeltis AG, Phone: 484-320-7536 CASEY, Tom Clinical Advisor (September) From: Acelity LP Inc., EVP, CFO Phone: +41 44 269 7979 (September) FITZPATRICK, Mark J. Phone: 210-255-6433 To: Chiasma Inc. 41 Promotions New Title: Pres. & CEO (October) Previous Title: CFO WITTEKIND, Michael, PhD Phone: 866-637-9703 From: ContraFect Corp., CSO & SVP, ARMSTRONG, Andrea Research (October) To: C4 Therapeutics Inc. Phone: 914-207-2300 New Title: Chief Administrative Officer KNICKERBOCKER, Aron (September) To: Five Prime Therapeutics Inc. Previous Title: SVP, Human Resources New Title: COO (September) Phone: 202-421-7994 Previous Title: EVP, CBO Phone: 415-365-5600

Optimize clinical trial RequeST a deMO! design with Trialtrove’s new citeline.com/products/ Standard of Care service trialtrove/

November 2016 | In Vivo ❚ Dealmaking

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Dealmaking column is a ❚ Dealmaking survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, Pharmaceuticals, and Research, Analytical Equipment and Supplies – and then Covering deals made October 2016 categorized by type – Acquisition, Alliance, or Financing. Strategic Transactions is updated daily with in-depth deal analysis, structural and financial terms, and links to SEC-filed contracts. For information about access please contact Customer Care at 800-332-2181 or [email protected]

z In Vitro Diagnostics ReWalk Robotics nets $11.4mm through Cerulean could get up to $1.2bn in NDC FOPO collaboration with Novartis Mergers & Acquisitions Crescendo Biologics signs first major Oxford Immunotec buys Immunetics for z Phar maceuticals Humabody collaboration; Takeda gets $6mm cash plus potential earnouts Mergers & Acquisitions rights Financings Antegrin, Cascadia merge to form Indalo Debiopharm enters into trial Biocept nets $9.4mm through public Astellas buys private oncology firm collaboration with Merck KGAA, Pfizer stock offering Ganymed €422mm, plus potential for NSCLC therapy MidCap provides Oxford Immunotec earnouts Takeda gets option to with $40mm in debt financing Celgene buys EngMab for $600mm immunomodulatory cancer projects through deal with EnGeneIC Diagnostics company Quotient Ltd. Teva divests Allergan’s generics assets raises $120mm through redeemable (Actavis Generics) and operations in UK EpimAb and Kymab enter into bispecific senior notes and Ireland antibody cross-licensing deal Morphotek grants cancer mAb rights to z Me dical Devices Alliances Eurofarma AZ grants 3SBio exclusive Byetta and Mergers & Acquisitions Bydureon rights in China GSK and Fimbrion team up to develop 42 Alliqua BioMedical buys Soluble small molecule for UTIs Systems for $35mm Active Biotech grants NeoTX exclusive rights to Anyara immunotherapy Zai Lab signs agreement with GSK for Fresenius Medical Care buys Xenios two anti-inflammatory assets KemPharm licenses Acura’s Aversion ICU Medical buys Hospira’s infusion technology to use in its opioid analgesic Innovus licenses Seipel’s OTC Urox for therapy business from Pfizer prodrugs OAB, incontinence Arteriocyte Medical, Isto Technologies Specialised Therapeutics to sell Mallinckrodt licenses US rights to three merge to form Isto Biologics Zoptrex in New Zealand and Australia for Intellipharmaceutics’ CNS generics Katena scoops up Eagle Vision AEterna Torii licenses JAK inhibitor from Japan Allergan enters billion-dollar deal for Tobacco Alliances MedImmune’s Crohn’s/colitis candidate JW Pharmaceutical gets Korean rights to Terumo buys products from Abbott, JT’s anemia candidate St. Jude Amgen gets option to cancer, neuro compounds discovered by Nuevolution Piramal pays $155mm for fiveJanssen to sell ’s B. Braun Surgical Dextera drugs surgical stapler in Spain AngioSoma, La Jolla Capital form JV to manage Liprostin MonoSol applies PharmFilm to Lupin Spinal Elements to market Mighty Oak pediatric drugs Medical’s FIREFLY system EUSA gets global rights to Apeiron’s neuroblastoma antibody Isqette Transgene, Merck KGAA, Pfizer enter Zimmer to distribute Nextremity’s foot trial collaboration for head and neck and ankle devices Aralez gets exclusive US rights to AZ’s Toprol-XL and authorized generic cancer combo therapy Financings Arrowhead, Spring Bank combine Merck KGAA and Vaccinex enter AxoGen nets $16.5mm in public offering ARC520/SB9200 in HBV trial trial collaboration for lung cancer collaboration immunotherapy ConvaTec completes £1.5bn IPO on LSE grants exclusive global rights Metuchen takes US, Canadian license to Breast implant manufacturer AZ Insmed to pulmonary disease compound Vivus’ Stendra Establishment Labs raises $15mm in debt funding Cilag gets rights to AZ’s Rhinocort Aqua Myovant grants Pfizer sublicense option outside the US on relugolix and RVT602 Weight loss-focused medical device company Obalon Therapeutics nets Chong Kun Dang gets rights to Can-Fite’s Novartis collaborates on rare diseases $69.8mm in IPO liver cancer candidate in South Korea with drug discovery start-up Perlara Organovo nets $23.3mm in follow-on Teva and Celltrion partner in exclusive Ocular Therapeutix, Regeneron partner public offering biosimilars agreement in US and Canada on sustained-release aflibercept

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 43 invivo.pharmamedtechbi.com

❚

for has has n Vivo prod- medos Interfyl i-cor Biovance Mist Therapy Mist is made from . novalung is acquiring pri- Dealmaking Inc November 2016 | I November LLC . KGAA . for total consideration (devices for lung and o TheraSkin . stems SE & C & SE product. (Oct.) Sy Xenios AG Xenios BioMedical AG TheraSkin MosaiQ cal Devices Medical Xenios Soluble Fresenius Alliqua its (low-frequency ultrasound delivered to a (low-frequency ultrasound delivered to a wound bed through saline mist), (connective tissue matrix, also derived from placental tissue, in particulate and flowable defects). tissue soft of correction formations Investment Banks/Advisors: Cowen & Co. LLC (Alliqua BioMedical Inc.); Canaccord Genuity Inc. (Soluble Systems LLC) - (amniotic membrane allograft (placental de rived) sterile wound covering), and acquired Investment Banks/Advisors: Morgan Stanley Banks/Advisors: Morgan Investment & Co. cardiac failure) from German VC firm zfhn undisclosed an for Heilbronn Zukunftsfonds sum. (Oct.) manufacturer lung over artificial took Zfhn Novalung in 2008 and two years later the VC got majority ownership of blood pump Medizintechnik. developer Medos systems In 2013, Novalung and Medos merged to create Xenios, which offers lung and heart therapies on a single platform. Within the platform are three brands: synchronized cardiac assist, and the z & Acquisitions Mergers Devices /Medical LLC Systems Soluble Alliqua BioMedical Inc. BioMedical Alliqua KGAA & Co. AG Care Medical Fresenius KGAA Co. & AG Care Medical Fresenius vately held fellow wound care company care company vately held fellow wound of $35mm. The combined entity will retain of $35mm. The combined the Alliqua name. (Oct.) 17.6mm Alliqua will issue approximately $0.89 at (valued shares common its of apiece); assume $12.4mm in senior debt; pay $5.4mm in cash to retire subordinated consideration; other in $500k plus debt and issue warrants for 4mm shares of the combined company exercisable at $1.07. (Alliqua’s stock was averaging $0.79 prior in formed was Soluble acquisition.) the to - 1999 and markets its human living skin al lograft ucts for CO2 removal and oxygenation in oxygenation and removal CO2 for ucts acute respiratory failure and COPD, living cells, fibroblasts, keratinocytes, and living cells, fibroblasts, keratinocytes, and matrix, and extracellular developed a fully is indicated for a wide range of tissue and wound care needs including diabetic foot ulcers, pressure and venous leg ulcers, necrotizing and injury, radiation burns, exposed over used be also can and fasciitis, muscle, tendon, bone, and joint capsule. - The product is highly complementary to Al liqua’s offerings which include

is BacTx is payingis PLC PLC (diagnostics Immunetics Inc. Immunetics Global Global . kit is designed to detect . Inc . (diagnostics for blood grouping netted $9.4mm through the , a clinical laboratory focused td L Inc Immunotec Immunotec QuickELISA xford xford ics Vitro Diagnost In Biocept Quotient O O Immunetics and serological disease screening) grossed $120mm through a redeemable senior secured notes offering due 2023. The company has already raised a total of $54.2mm this year through two follow-on public offerings to fund $6mm in cash to acquire $6mm in cash to acquire (immunoassays for infectious diseases). infectious diseases). (immunoassays for $6mm inup to out Oxford could also shell certain revenue goalscash upon attaining over the nextand development milestones three years. (Oct.) cost-effective rapid, offers Immunetics Blot tests that are ELISA and Western Its sensitive. highly specific and Financings Diagnostics /In Vitro Biocept Inc. Biocept Imugen Inc. Imugen public sale of 9.1mm common shares at five-year received also investors $1.10; the at shares 9.1mm another for warrants same price. The company develops and sells liquid biopsy assays for colorectal, prostate, gastric, and breast cancers. (Oct.) Investment Banks/Advisors: Feltl & Co.; Roth Capital Partners /In Vitro Diagnostics /In Vitro ❚ & Acquisitions Mergers Quotient Ltd. Oxford Immunotec Global PLC Global Immunotec Oxford Oxford Immunotec Global PLC Global Immunotec Oxford a colorimetric assay kit that can detect kit that can detect a colorimetric assay gram-negative, and aerobic, anaerobic, gram-positive bacteria in a single test. The on testing for tick-borne diseases. for infectious diseases and immune disor- financing- debt in $40mm received ders) -consisting of a term loan and revolving line of credit--from MidCap Financial. The accrues interest term loan $30mm five-year at a rate of LIBOR+ 7.60% with interest-only payments for the first 24 months (and can be condi- certain upon months 48 to extended tions before the loan begins to amortize.) The five-year $10mm revolving line of credit accrues interest at LIBOR+ 4.45%. Both may be increased by $10mm upon certain conditions. (Oct.) antibodies to protective antigen of anthrax antibodies to protective antigen of anthrax - in human serum. Finally, the C6 B. burg and faster delivers kit ELISA (Lyme) dorferi more accurate results than any other ELISA and is twice as sensitive than the standard Western Blot in patients with Lyme disease. The transaction comes just four months after Oxford Immunotec paid $22.2mm in cash for ’s nets Summit CRISPR CRISPR Bayer nets $162mm create JV in the nets $165mm in nets $85.2mm in IPO nets $4.8mm in IPO nets $202mm in IPO enters stock purchase nets $28.8mm through nets $52mm in IPO nets $288mm through nets $112.8mm via public sale gets $15mm term loan from enters into $100mm committed iChang HEC YiChang nets $26.2mm through public licenses EU rights to raises $300mm in senior notes nets $7mm through RDO raises $35mm through sale of , nets $27mm via FOPO nets $4.65mm via FOPO follow-on nets $47mm grosses SEK601.6mm in rights offering brings in $14mm through registered company an Informa Inc., Information, Business ©2016 Informa agreement with Aspire for up to $20mm of ADSs follow-on public offering direct offering Solar Capital on NYSE public stock sale Therapeutics through public stock sale sale of common and preferred shares financing agreement with Deerfield; funds financing agreement with Deerfield; funds contingent upon drug approval Sunesis Theravance Ritter Scynexis Puma Biotechnology Puma Pharmaceuticals Ra Nektar Therapeutics Nektar Probi Myovant Sciences Myovant Horizon Idera Immunomedics GTx CRISPR Cerulean Pharma Cerulean Cidara Ascendis BioPharma AzurRx AEterna Financings Applications Accelerator Advanced Sarepta TaiGen $141mm in ADS offering concurrent public debt and share offerings Greater China region ezutromid for up to $952mm 2.5mm shares to partner Dynavax Genome editing company ❚ Dealmaking

portfolio for cardiac surgery. With the acqui- dry eye offerings are synthetic dissolvable mal implant placement by incorporating sition, renal-focused Fresenius Medical Care plugs, flow controllers, and tear test strips. surgeon-defined preferences for medial line now adds cardiac and respiratory products Surgical products include the Graether angles and entry points into the design of to its extracorporeal organ support portfo- 2000 pupil expander and stents. Katena the patient-specific pedicle screw guides. lio. Investment Banks/Advisors: Jefferies & kicked off 2016 by buying another ophthal- Nextremity Solutions Inc. Co. Inc. (Xenios AG) mic device maker, Sensor Medical Technol- Zimmer Biomet Holdings Inc. ogy, giving Katena a portfolio of single-use ICU Medical Inc. and reusable lenses used by ophthalmolo- Zimmer Biomet Holdings Inc. received ex- Pfizer Inc. gists and optometrists during procedures. clusive global rights to distribute Nextrem- Hospira Inc. ity Solutions Inc.’s foot and ankle deformity Hospira Infusion Systems Alliances correction products. (Oct.) Seeking to become a leading global pure /Medical Devices Included in the agreement are the Nextra play infusion therapy firm,ICU Medical Inc. Abbott Laboratories Inc. hammertoe correction system (the only is paying $1bn--$400mm in its stock and available two-piece hammertoe implant); $600mm in cash--to acquire Pfizer Inc.’s St. Jude Medical Inc. Terumo Corp. MSP metatarsal shortening system con- Hospira Infusion Systems business. (Oct.) taining an osteotomy guide and implant; Terumo Corp. is paying $1.12bn in cash to Post-transaction, Pfizer will hold a 16.6% Re+Line bunion correction system; and acquire certain products from Abbott Labo- stake in ICU Medical. As long as Pfizer owns Arcus staple system. Zimmer will add these ratories Inc. and St. Jude Medical Inc. (Oct.) at least 10% equity it will hold a right to products to its portfolio of ankle implants nominate one director to ICU’s board. ICU Abbott agreed to buy St. Jude back in April and tools for ankle arthroplasty including gains a portfolio of IV sets, the LifeShield for $25bn and the product divestiture to the Trabecular Metal total ankle. line of IV safety devices, infusion pumps, Terumo is contingent upon the closing of and solutions. The acquisition builds on an that transaction as well as antitrust regula- Financings existing 20+-year relationship between ICU tory approvals. All three parties are bound /Medical Devices and Hospira in which Hospira was integrat- by the terms of an exclusivity agreement. AxoGen Inc. ing ICU’s needle-free technology into their Included in the divestiture are St. Jude’s infusion offerings. With the Hospira busi- Angio-Seal and Femoseal vascular closure Regenerative medicine company AxoGen Inc. ness under its belt, ICU estimates combined products and Abbott’s Vado steerable (peripheral nerve allografts) netted $16.5mm in revenues of $1.45bn based on trailing twelve sheath. (Abbott is holding onto its vascular the public offering of 2.3mm common shares month results as of June 2016. Pfizer bought closure products, including Perclose Pro- at $7.50. The company will use the proceeds Hospira Inc. last year, shelling out $15.4bn Glide, StarClose SE, and Prostar.) to expand its product portfolio, which includes in cash and $1.75bn in debt. For about five the Avance human nerve allograft and theAxo - B. Braun Melsungen AG Guard line of porcine submucosa extracellular years Pfizer had been contemplating split- Aesculap AG 44 ting up into two entities--one focused on matrixes to connect, repair, and protect injured B. Braun Surgical SA peripheral nerves and reinforce reconstruction developing and selling new drug brands Dextera Surgical Inc. and the other on older brands, generics, of new nerves. (Oct.) and biosimilars. Just one week ago the Big Dextera Surgical Inc. (formerly Cardica Investment Banks/Advisors: Dougherty & Pharma announced it was scrapping those Inc.) has chosen B. Braun Surgical SA as Co. LLC; JMP Securities LLC plans. Investment Banks/Advisors: Gold- the exclusive marketer and distributor of man Sachs & Co.; Guggenheim Partners LLC the MicroCutter 5/80 surgical stapler in ConvaTec Inc. (Pfizer Inc.); Barclays Bank PLC; Wells Fargo Spain. (Oct.) ConvaTec Inc. (devices, accessories, and Securities LLC (ICU Medical Inc.) B. Braun SA will sell the device through supplies for the hospital market to treat its laparoscopic unit to surgeons in the and manage chronic conditions) grossed ISTO Technologies Inc. minimally invasive surgery market. The approximately £1.47bn ($1.8bn) in its Arteriocyte Medical Systems Inc. MicroCutter 5/80 is the only 5mm stapler on initial public offering on the London Stock Private musculoskeletal device firms Isto the market with 80 degrees of articulation. Exchange. The company issued new shares Technologies Inc. and Arteriocyte Medical It is approved for use during transection at a price of £2.25 (the low end of its an- Systems Inc. are merging and will operated and resection in multiple open or minimally ticipated range) to certain institutional and under the Isto Biologics name. (Oct.) invasive urologic, thoracic, and pediatric other investors in the UK and outside the US. Isto Biologics will focus on the spine, surgeries; transection, resection, or cre- Following the close of the IPO, Nordic Capital orthopedics, and functional medicine mar- ation of anastomoses in the small and large and Avista Capital Partners will respectively kets. The company will offer Arteriocyte’s intestine; and transection of the appendix. hold 45.1% and 19.5% ownership stakes. Magellan autologous platelet separator, The stapler is complementary to B. Braun’s ConvaTec will use most of the proceeds to MagellanPRP platelet rich plasma, and laparoscopic offerings including theCaiman repay existing debt. (Oct.) MAROMatch/MAROFuse demineralized advanced bipolar seal and cut instruments, Investment Banks/Advisors: Bank of bone matrix. Isto Technologies’s products and the EinsteinVision 3D camera system. America Merrill Lynch; Credit Suisse Group; include the InQu bone graft extender and Mighty Oak Medical Deutsche Bank AG; Evercore Partners; Gold- substitute, Influx natural bone graft mate- Spinal Elements Inc. man Sachs & Co.; JP Morgan & Co.; Morgan rial, and CellPoint bone marrow aspirate Stanley & Co.; Peel Hunt LLP; RBC Capital system. Isto Technologies’ CEO will take the Mighty Oak Medical licensed Spinal Ele- Markets; UBS Investment Bank helm at Isto Biologics. ments Inc. rights to market its FDA-approved FIREFLY guidance system for use in spine Establishment Labs SA Katena Products Inc. surgeries. (Oct.) Establishment Labs SA (breast implants) Eagle Vision Inc. The FIREFLY system is comprised of bone raised $15mm in debt from backers Perceptive Katena Products Inc. is acquiring fellow models and guides--created using 3D Advisors, JW Asset Management, and Relativ- private ophthalmic device developer Eagle printing technologies--that are precisely ity Healthcare fund. The company will use the Vision Inc. for an undisclosed sum. (Oct.) matched to the patient’s anatomy through proceeds to expand its Motiva breast implants Eagle Vision is a market leader in punctal pre-surgical planning and computer- internationally, finalize a new manufacturing plugs for treating dry eye syndrome. Other designed guidance tools. It enables opti- facility and start US FDA trials. (Oct.)

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Standard of Care

Optimize clinical trial design with Trialtrove’s new Standard of Care service

Minimize Risk: • Quickly access Standard of Care disease treatments by patient segment and country. • View Standards of Care by treatment regimen or individual drug views. Data is sourced directly from Datamonitor Healthcare’s expert and robust primary resource analyses. Covering a variety of disease areas in US, Spain, France, Japan, UK, Germany and Italy.

Pharma intelligence

Request a demo! citeline.com/products/trialtrove/ ❚ Dealmaking

Obalon Therapeutics Inc. based on the progress in development of The £603mm ($772mm) sale price entitles Obalon Therapeutics Inc. (medical devices Ganymed’s lead program IMAB362, which is Accord to a portfolio of generic medicines for weight loss) netted $69.8mm in its IPO of currently in Phase IIb for gastroesophageal along with a manufacturing plant in Barn- 5mm common shares at $15. (Oct.) cancer. (Oct.) staple, England. Teva will retain any Actavis Investment Banks/Advisors: BTIG LLC; Post-transaction, Ganymed becomes a whol- non-overlapping generics and specialty Canaccord Genuity Inc.; Stifel Nicolaus & ly owned Astellas subsidiary. IMAB362 is an medicines and OTC products. The divest- ment fulfills a required anticompetitive Co. Inc.; UBS Investment Bank antibody therapy targeting the Claudin 18 protein, which is only present in cancerous condition by the European Commission as Organovo Holdings Inc. stomach cells. In addition to gastroesopha- a result of Teva’s Actavis acquisition earlier Organovo Holdings Inc. (3D bio-printing geal cancer, the candidate is also in clinical in the year and makes Accord the partner technology) netted $23.3mm in a follow-on trials for pancreatic cancer and in preclinical of choice in these countries. Investment public offering 9mm shares at $2.75. The studies for solid tumors including ovarian Banks/Advisors: Greenhill & Co. Inc. (Teva company will use the proceeds for R&D, and lung cancers. IMAB362 received orphan Pharmaceutical Industries Ltd.) development, and commercialization of its drug status in the US and Europe for gastric Alliances products. (Oct.) and pancreatic cancer. Also in the Ganymed /Pharmaceuticals Investment Banks/Advisors: BTIG LLC; Ever- pipeline is IMAB027, which selectively binds core Partners; Jefferies & Co. Inc.; Raymond to the cell surface protein Claudin 6 (CLDN6) 3SBio Inc. James & Associates Inc. that’s present in a wide range of cancers, AstraZeneca PLC including testicular, ovarian, uterine, and AstraZeneca PLC licensed 3SBio Inc. exclu- ReWalk Robotics Ltd. lung. The unique mechanism of IMAB027 sive Chinese marketing rights to its diabetes ReWalk Robotics Ltd. (wearable robotic allows it to selectively and efficiently kill products Byetta (exenatide) and Bydureon exoskeletons for spinal cord injury patients) tumor cells without harming healthy non- (once-weekly exenatide) (single dose tray, netted $11.4mm through the public offering cancerous cells. Phase II studies are slated dual chamber pen, and auto-injector). (Oct.) of 3.25mm units at $3.75. Each unit consists for the end of 2016. Ganymed’s candidates 3SBio pays $50mm up front, $25mm once of one ordinary share and 0.75 of a five-year will strengthen Astellas’ presence in oncol- AZ receives an import drug license for the warrant to purchase one ordinary share at ogy, a market where the firm sells Xtandi for Bydureon single dose tray, and another an exercise price of $4.75. (Oct.) prostate cancer. The drug was co-developed $25mm when AZ gets the import drug license Investment Banks/Advisors: Oppenheimer with Medivation (now part of Pfizer) under a for the Bydureon dual chamber. The active & Co. Inc. 2009 agreement and is currently in Phase III ingredient in both products, exenatide, is a trials for breast cancer. Ganymed is backed GLP-1agonist that helps the body produce by investors including ATS Beteiligungsver- insulin to stabilize blood sugar in patients z Pharmaceuticals waltung, MIG Fonds, FCP Gany, and Future with Type II diabetes. Byetta--approved by 46 Capital. Investment Banks/Advisors: JP Mor- the China FDA in 2009 and with 2015 Chi- Mergers & Acquisitions gan & Co. (Ganymed Pharmaceuticals AG) nese revenues of $14.6mm--is injected twice daily, while Bydureon--awaiting Chinese /Pharmaceuticals EngMab AG approval--is an extended release version Antegrin Therapeutics Inc. Celgene Corp. of the drug that only requires dosing once Cascadia Therapeutics Celgene Corp. acquired privately held im- per week. AZ originally gained rights to the Antegrin Therapeutics Inc. and Cascadia munotherapies start-up EngMab AB for products in late 2013 when BMS divested its Therapeutics are merging to create Indalo $600mm. The company will operate as a global diabetes business to AZ for $2.7bn Therapeutics to focus on developing thera- Celgene subsidiary. (Oct.) up-front and up to $1.6bn in milestones in a pies for fibrotic diseases. (Oct.) EngMab, formed in 2013, focuses on T-cell deal that currently sits as the second largest To the new firm, Antegrin contributes a port- bispecific antibodies, which simultaneously licensing deal by deal value in the last five folio of small-molecule integrin antagonists, bind to a target on a cancer cell and to the years. AZ is out-licensing the product rights while Cascadia adds expertise in drug develop- T-cell receptor complex, causing tumor cell in China so that it can further focus on its ment expertise and seasoned executives. In- death. The company has two projects in respiratory business in that country. 3SBio dalo’s candidates have demonstrated efficacy early development, one of which targets takes on Byetta and Bydureon as a means in preclinical studies in fibrosis across multiple the B-cell maturation antigen (BCMA), of continuing to diversify the company’s organ systems. It anticipates commencing IND- which is highly expressed on both solid and portfolio; it sells therapies in the oncology, enabling studies next year with clinical trials blood cancers. An IND for the candidate is nephrology, and dermatology spaces, and expected in early 2019. Cascadia’s co-founders expected during 2017. Celgene says that counts two other diabetes treatments in its Williamson Bradford, MD, PhD, and Scott Sei- EngMab’s work is highly complementary product list: Qiming Keli for Type II diabetic wert, PhD, are former execs at InterMune (now to its own chimeric antigen receptor work, neuropathy, and Yi Li Xi for Type II diabetes. part of Roche) where they helped develop the specifically its recent tie-up with bluebird Active Biotech AB idiopathic pulmonary fibrosis drug Esbriet (pir- where Celgene has rights to a BCMA bio NeoTX Therapeutics Ltd. fenidone). Dr. Bradford will become Indalo’s candidate for myeloma, and options for CMO and handle clinical development and further projects in the area. Israeli biotech NeoTX Therapeutics Ltd. regulatory activities. Dr. Seiwert will serve as licensed exclusive global rights to develop CSO, responsible for research and preclinical Intas Pharmaceuticals Ltd. and sell Active Biotech AB’s cancer im- Accord Healthcare Ltd. development. Antegrin’s current CEO George munotherapy Anyara (naptomumab estaf- Allergan PLC Capps retains his position at the merged entity. enatox). (Oct.) Actavis Group The total deal value could hit $71mm, with Astellas Pharma Inc. Teva Pharmaceutical Industries Ltd. $250k in up-front cash and the remainder Ganymed Pharmaceuticals AG Teva Pharmaceutical Industries Ltd. sold in potential development, regulatory, Astellas Pharma Inc. is paying €422mm off the UK and Ireland assets and operations and sales milestones, plus double-digit ($460mm) in cash to acquire cancer-focused of Allergan’s Actavis Generics business royalties. Anyara, a tumor targeting su- Ganymed Pharmaceuticals AG. Astellas (acquired last year) to Accord Healthcare perantigen, has shown positive results in will also shell out up to €860mm ($938mm) Ltd. (Oct.) Phase I studies both as a monotherapy (for

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Over 100 Over 100 Over 5,000 event types catalyst types products

Double the Power

Meddevicetracker with Medtech Insight reports is a new interactive real-time source of in-depth medical technology market intelligence

Meddevicetracker brings you closer to the medtech market, helping you to: • Identify upcoming device regulatory • Quantify the market size for devices events/filings or diseases

• Search for medtech clinical trial • Discover forecasted market share starts and data of devices by type

• Find historical and forecasted • Understand the device competitive land- procedure volumes data scape and identify unmet clinical needs

• Monitor drug delivery technologies and identify partnership opportunities

Request your free demo today: please visit - www.meddevicetracker.com ❚ Dealmaking

lung, renal, and pancreatic cancers) and in regulatory and commercialization mile- ficiently screen and optimize those com- combination with docetaxel (advanced can- stones, and double-digit royalties. Spe- pounds. Should Amgen opt to license the cer); Phase II/III trials in combination with cialised Therapeutics is responsible for all compounds it would pay Nuevolution up to interferon alpha in renal cancer met safety development, registration, reimbursement, $410mm per target in the form of an option but not efficacy endpoints. NeoTX plans to and marketing in its territories, and AEterna exercise fee and milestones. Nuevolution is study Anyara in combination with check- will manufacture and supply the product. also eligible for sales royalties. Nuevolution point inhibitors. The company has other Zoptrex is in Phase III trials, which are will handle early-stage research, while Am- undisclosed immuno-oncology projects in expected to be completed by the end of the gen will collaborate on late-stage research its pipeline. Prior to the in-licensing, it an- year, followed by an NDA submission in the and be solely responsible for preclinical nounced an $8.8mm Series A round from US during the first half of 2017. AEterna’s studies, clinical trials, and commercializa- investors including Starr Ventures. other partners for the therapy include tion. The parties ultimately seek to use their Sinopharm A-Think (China, Hong Kong, and IP and expertise to develop compounds Acura Pharmaceuticals Inc. Macau), Cyntec (Taiwan and certain South- for targets that are difficult to make using KemPharm Inc. east Asia countries), and most recently Rafa traditional methods. KemPharm Inc. licensed Acura Pharma- (Israel and Palestian territories). AEterna’s ceuticals Inc.’s Aversion abuse-deterrent cancer portfolio includes Abraxane (under AngioSoma Inc. AngioSoma-La Jolla Capital JV technology, which it will apply to three of license from Celgene; breast, non-small its existing immediate-release (IR) prodrug cell lung, and pancreatic cancers); Gliolan AngioSoma Inc. and La Jolla Capital Partners opioid candidates, including KP201/IR, with (through a license from photonamic; imag- are creating a joint venture to handle activi- the option to use the platform on two addi- ing agent for brain tumor visualization); and ties for AngioSoma’s Liprostin (alprostadil) tional KemPharm prodrug candidates. (Oct.) Oncotype Dx (Genomic Health; breast and a liposomal encapsulated prostaglandin e1 Acura’s Aversion technology for orally prostate cancer diagnostic). for peripheral artery disease. (Oct.) administered opioid drugs combines The JV will fund and manage FDA Phase gelling ingredients and nasal irritants to Allergan PLC III trials, obtain regulatory approval, and discourage abuse by injection or snorting. AstraZeneca PLC exclusively license the drug to a partner MedImmune LLC Acura’s own marketed oxycodone pain drug for global commercialization. AngioSoma Oxaydo (licensed to Egalet) is formulated AZ’s MedImmune LLC granted Allergan PLC chose La Jolla Capital because of the firm’s with Aversion. In exchange for exclusive exclusive global rights to develop and sell experience with FDA regulatory activities rights to use Aversion in the development its MEDI2070, an interleukin-23 monoclonal and its success in product licensing. (La and commercialization of three of its own IR antibody in Phase IIb for Crohn’s disease Jolla Capital was formed in 2010 to help opioid compounds, KemPharm will provide and entering Phase II ulcerative colitis and healthcare firms with capital formation, $3.5mm up front and royalties in the low related disorders. (Oct.) marketing and sales challenges, and part- single-digit range. If KemPharm exercises Terms of the deal call for Allergan to pay nerships.) The companies have initially 48 its option to use the Aversion technology $250mm up front, up to $1.27bn in milestones budgeted $4mm for the JV. La Jolla will seek with more than the initial three candidates, (including $435mm upon market launch and to secure funding but will fund the JV for the Acura will be eligible for $1mm per program. $725mm in sales milestones) over a 15-year first six months and get reimbursed up to KemPharm will have sole rights to any re- period, plus tiered up to low-double digit $400k. Should La Jolla fail to get funding at sulting intellectual property related to new tiered royalties (Strategic Transactions as- the end of six months, AngioSoma can opt product development. The deal includes sumes a cap of 29%). AZ and MedImmune to end the agreement. If La Jolla secures the KP201/IR (benzhydrocodone HCl, a prodrug originally gained rights to the compound (then $4mm and successfully finds a licensee for of hydrodocodone), an acetaminophen- called AMG139) in 2012 through a deal with Liprostin, it will receive 25% of any surplus free, IR version of KemPharm’s acute pain Amgen. That deal called for collaborative de- from the budgeted amount for securing the candidate KP201, which is now known as velopment and commercialization activities, FDA approval; 25% of the resulting royalty Apadaz and its NDA is under review by the with AZ taking the lead for AMG139 and two payments or fees; and five-year warrants to FDA. Made using KemPharm’s LAT (ligand- other compounds, and Amgen handling two purchase 2mm AngioSoma common shares activated therapy) prodrug platform, KP201/ of its own. As that alliance involved cost and at an exercise price of $0.25. IR has the same abuse-deterrent properties profit sharing, the current deal with Allergan Apeiron Biologics AG as Apadaz. The LAT technology enables the results in Amgen seeing some of the money EUSA Pharma creation of NME prodrugs by chemically Allergan pays to AZ. Of the up-front payment attaching one or more ligands to an FDA- and milestones, Amgen gets one third (or Apeiron Biologics AG granted EUSA Phar- approved parent drug. In addition to KP201/ $83mm of the up-front and $419mm of the ma exclusive global rights to commercialize IR, for which an IND is expected before milestones), plus a single-digit percentage Isqette (dinutuximab), an immunotherapy year end, other opioid analgesic prodrugs inventor royalty. MEDI2070 boosts Allergan’s indicated for high-risk neuroblastoma. (Oct.) in KemPharm’s pipeline include KP511/ER gastroenterology offerings; the company al- EUSA pays money up front (with some funds (prodrug of hydromorphone) for severe pain ready markets its own treatments for irritable held until EU approval), regulatory mile- and long-term use; KP606/IR (prodrug of bowel syndrome, chronic idiopathic constipa- stones for achievements in territories aside oxycodone) for moderate to severe pain; and tion, and ulcerative colitis. from the EU, and royalties. Isqette (which KP746 (a prodrug of oxymorphone). Apeiron had been developing as APN311; Amgen Inc. licensed from Children’s Cancer Research AEterna Zentaris Inc. Nuevolution AS Institute and theSoc. of Paed. Oncology Specialised Therapeutics Nuevolution AB licensed Amgen Inc. an Euro. Neuroblastoma Res. Ntwk. (SIOPEN) Australia Pty. Ltd. exclusive option to develop and commercial- in 2011) has orphan drug designation in AEterna Zentaris Inc. chose Specialised ize small-molecule cancer and neuroscience the US and EU, and is awaiting approval Therapeutics Asia (an affiliate ofSpecial - therapies. (Oct.) by the EMA. Filings in the US and Japan are ised Therapeutics Australia Pty. Ltd.) to Nuevolution will use its Chemetics platform expected next year. Neuroblastoma is a rare exclusively develop and sell the endometrial to discover targets of interest to Amgen. childhood cancer that forms in nerve tissue cancer candidate Zoptrex (zoptarelin doxo- Chemetics enables DNA-encoded synthesis of the adrenal gland, neck, chest, or spinal rubicin) in New Zealand and Australia. (Oct.) of billions of chemically diverse drug-like cord. If launched in the US, EUSA’s Isqette AEterna gets undisclosed money up front, small molecules and can rapidly and ef- will face competition from United Thera-

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 49 invivo.pharmamedtechbi.com ❚

Ari- ex-

Insmed Inc. Insmed p p i ing Dealmak assumes 8-16%). AZ 8-16%). assumes November 2016 | In Vivo November cr SScri /scripintelligence granted PLC . Inc , and eventually marketing both as (liposomal amikacin for inhalation) in s get Pharma intelligence | ’ Strategic Transactions Strategic AstraZeneca Insmed retains an option to obtain rights to sell the retains an option to obtain pulmonarycandidate for chronic obstructive through it developed (AZ or asthma. disease Phase I trials for COPD prior to the licensing.) Non-CF bronchiectasis is a neutrophil-driven pulmonary disease that causes bronchi to chronic from dilated permanently become infection and inflammation. The disorder increases chances of a patient developing nontuberculosis mycobacterial (NTM) lung disease, which can cause irreversible lung has damage and become fatal. Insmed kayce a Phase III study for NTM lung disease and a Phase III study for NTM lung disease and completed Phase II for infections in non-CF bronchiectasis. The company looks forward to developing AZ’s candidate alongside Arikayce AstraZeneca PLC AstraZeneca clusive global rights to the dipeptidyl pepti- clusive global rights to which Insmed willdase 1 inhibitor AZD7986, for non-cystic rename INS1007 and develop (Oct.) fibrosis bronchiectasis. up front, $85mm in Insmed pays $30mm milestones, development and regulatory once sales hit $1bn, $35mm in milestones to mid-teen royalties and high-single digit ( study, in which patients will receive a dosing patients will receive study, in which and includes ARC520, SB9200, regimen that an oral antiviral. Gilead . (Spring (Spring . @scripnews Let Social chatting, liking and tweeting, are We sharing the latest industry news and sharing the latest of our global team insights from join us! editors and analysts, Viread (tenofovir), and then a a then and (tenofovir), under a 2012 partnership under a 2012 partnership Viread ’ Alnylam laborate to study Arrowhead’s ARC520 along study Arrowhead’s ARC520 laborate to a potential Bank’s SB9200 as with Spring (Oct.) B (HBV) treatment. chronic hepatitis in- ARC520 is a gene expression Injectable interfer- uses Arrowhead’s RNA hibitor that meth- chemistries and delivery ence (RNAi) the compound ods. Arrowhead licensed from combination study with with study combination (in which Alnylam also has rights to Arrow- (in which Alnylam also IP). ARC520 is now head’s RNAi technology in efficacy and safety for evaluation under study, which beganthe MONARCH Phase IIb involves the adminis- in January 2016, and and in combination tration of ARC520 alone with other approved nucleoside/nucleotide (such as entecavir, polymerase inhibitors interferon alpha 2a) tenofovir, or pegylated HBV infection. to 96 patients with chronic to be completed in The study is expected orally-available Bank’s Spring 2019. March selective immunomodulatory compound called trial IIa Phase a undergoing is SB9200 ACHIEVE (initiated in June 2016) in which it’s being studied first as an HBV monotherapy to evaluate dosing for 12 weeks, followed by an equivalent duration of dosing with Sciences Bank has a separate November 2015 trial Bank has a separate November 2015 trial collaboration with Gilead.) Under the current - deal, the partners will first conduct pre ARC520/ combined studies with the clinical part a as agents the study then and SB9200 of Arrowhead’s ongoing MONARCH Phase IIb - . ’s . and and Inc . Strate Inc will col- . licensed licensed Inc ’s thrombosis Unituxin AstraZeneca PLC AstraZeneca Merck (metoprolol) and its (metoprolol) and assumes 15-17%). AZ is assumes 15-17%). AZ PLC Pharmaceuticals Pharmaceuticals (vorapaxar). Toprol-XL ank is a beta blocker marketed for is a beta blocker marketed B Pharmaceuticals , which launched its dinutuximab for dinutuximab its launched which , Zontivity pring Arrowhead S Aralez AstraZeneca hypertension, angina, and stable, symptom- hypertension, angina, branded sales for the atic heart failure. US hit $89mm in 2015, and generic versions 2016 amounted to and sales through June $175mm up front, up $53mm. Aralez pays and sales-related to $48mm in milestones royalties ( payments, and mid-teen exclusive US rights to rights US exclusive gic Transactions gic authorized generic. (Oct.) Toprol-XL peutics Arrowhead Pharmaceuticals Inc. Pharmaceuticals Arrowhead Spring Bank Pharmaceuticals Inc. Pharmaceuticals Spring Bank Aralez Pharmaceuticals Inc. Pharmaceuticals Aralez in charge of manufacturing for at least 10 in charge of manufacturing for at least 10 years, and agreed to continue distributing the product for Aralez for up to nine months during a transition period. The deal is the the as Aralez, for months many as in second - company continues to strengthen its cardio it vascular product offerings. In September to up to committed and front up $25mm paid $80mm in sales milestones for exclusive US and Canadian rights to neuroblastoma last year as neuroblastoma cardio drug cardio drug company an Informa Inc., Information, Business ©2016 Informa ❚ Dealmaking

complementary products for patients with demonstrated success in the area with its man VH domain building blocks, are small in NTM and bronchiectasis. Remsima biosimilar Inflectra (infliximab). size, and can rapidly accumulate in tumors while at the same time quickly clearing AstraZeneca PLC Cerulean Pharma Inc. from circulation to avoid systemic toxicity. Johnson & Johnson Novartis AG Takeda has not disclosed specific cancer Cilag GMBH International Novartis Institutes for BioMedical targets it is eyeing. While Takeda has been Research Inc. AstraZeneca PLC licensed Johnson & deal-active in recent months (through an Johnson’s Cilag GMBH International ex-US Cerulean Pharma Inc. and Novartis Insti- alliance around a gastroparesis compound rights to its Rhinocort Aqua (budesonide) tutes for BioMedical Research Inc. will with Altos (Takeda also has an option to buy nasal spray. (Oct.) collaborate on the development of up to five the biotech), and a $400mm+ Crohn’s dis- Cilag will pay AZ $330mm up front for the nanoparticle-drug conjugate (NDC) candi- ease tie-up with TiGenix), the company has rights. Rhinocort Aqua is a nasal steroid for dates for cancer to which Novartis will have also been undergoing R&D reorganization treating allergic and non-allergic rhinitis as exclusive worldwide development, manufac- shifts. It has cut back on research activities well as nasal polyps. AZ divested the rights turing, and commercialization rights. (Oct.) outside of core areas, turned over a lot of to focus on its core respiratory assets, Cerulean’s Dynamic Tumor Targeting platform its R&D work in North America and Europe including asthma and COPD products such conjugates active pharmaceutical ingredients to the CRO PRA Health, and last month, as Symbicort and Pulmicort. (APIs) to polymers, positioning them within axed a development deal with MacroGenics nanoparticles to selectively attack tumor cells in which Takeda could have exercised an Can-Fite BioPharma Ltd. while bypassing the body’s healthy cells, thus Chong Kun Dang Pharmaceutical option to an autoimmune disease project. reducing toxicity and enabling therapeutic Corp. combinations. Under the deal’s initial two-year Debiopharm Group Can-Fite BioPharma Ltd. granted Chong term (which Novartis may extend by up to two Debiopharm International SA Kun Dang Pharmaceutical Corp. (CKD) additional one-year periods on a program- Merck KGAA exclusive rights to sell its liver cancer can- by-program basis), Cerulean will conduct Pfizer Inc. didate CF102 in South Korea. (Oct.) preclinical research, using its Dynamic Tu- Debiopharm International SA entered into Can-Fite could get up to $3mm in up-front mor Targeting technology to covalently link a trial collaboration agreement with Merck and milestone payments, plus royalties in a polymer to APIs Novartis-selects for up to KGAA and Pfizer Inc. to evaluate the com- the low-twenties (Strategic Transactions five target compounds. Novartis will take over bination of Debiopharm’s Debio1143 with its assumes 20-23%). Can-Fite will supply further development and commercialization. partners’ avelumab for non-small cell lung CKD with the finished product, and gives Novartis provides $5mm up front, funding for cancer. (Oct.) the company right of first refusal to sell up to five full-time Cerulean employees, and Debiopharm has Debio1143, an oral inhibitor it for additional indications developed by for each NDC program: $7mm in commercial of IAPs (inhibitor of apoptosis proteins), in Can-Fite. CF102 is an adenosine A3 recep- license fees (prior to human clinical trials), Phase II trials for head and neck and ovarian 50 tor agonist in Phase II as a second-line $41.5mm in possible preclinical, clinical, and cancers, and Phase I for melanoma, acute treatment for advanced hepatocellular regulatory milestones, up to $185mm in sales myelogenous leukemia, and lymphoma. carcinoma. The company also plans to milestones, and single-digit to low double- Under a 2014 co-development and co- run a Phase II study in non-alcoholic fatty digit tiered royalties (Strategic Transactions commercialization deal, Merck and Pfizer liver disease, a precursor to NASH (non- estimates 1-30%) on net sales. In all, Ceru- are developing avelumab, an anti-PD-L1 alcoholic steatohepatitis). lean could receive up to $233.5mm in total IgG1 monoclonal antibody, in Phase III milestones per program, or $1.17bn for all five studies for tumors including non-small cell Celltrion Inc. programs. NIBR’s cancer research programs lung, renal, esophageal, stomach, ovarian, Teva Pharmaceutical Industries Ltd. include numerous technology platforms and and bladder cancers, as well as earlier tri- Celltrion Inc. licensed Teva Pharmaceutical many partnerships with various research and als for carcinoma, melanoma, Hodgkin’s Industries Ltd. exclusive rights to commer- academic institutions, other Big Pharmas, and lymphoma, and breast, colorectal, and cialize in the US and Canadian its Rituxan biotechs. Novartis concurrently announced prostate cancers. Debiopharm will handle (CTP10) and Herceptin (CTP6) biosimilars to a collaboration with rare disease start-up the initial Phase I/Ib trial of the combination in exchange for a $160mm up-front payment Perlara, leveraging the company’s CRISPR- therapy for NSCLC. This is the second deal ($60mm is refundable upon certain circum- engineered animals drug discovery platform. that Merck and Pfizer have signed involving stances). The two companies will share in avelumab this month. They also penned a Crescendo Biologics Ltd. the profit from the commercialization of the trial collaboration for Transgene to study Takeda Pharmaceutical Co. Ltd. biosimilars. (Oct.) its immunotherapy TG4001 together with Takeda Oncology CTP10 is the proposed Rituxan (rituximab) the mAb for HPV-positive head and neck biosimilar currently in late Phase III devel- Crescendo Biologics Ltd. signed its first squamous cell carcinoma. opment, and is used to treat non-hodgkin’s major partnership, penning a deal with lymphoma, chronic lymphocytic leukemia, Takeda Pharmaceutical Co. Ltd. (through EnGeneIC Ltd. rheumatoid arthritis, Wegner’s granuloma- its Takeda Oncology unit) to discover new Takeda Pharmaceutical Co. Ltd. tosis, and microscopic polyangiitis. CTP6 immuno-oncology therapies. (Oct.) Takeda Oncology is the Herceptin (trastuzumab) biosimilar Takeda pays $36mm in up-front fees, an eq- EnGeneIC Ltd. will use its EDV nanocell plat- also in late Phase III, used for the treatment uity investment, R&D funding, and preclini- form to discover cancer cyto-immunotherapies of HER2-overexpressing breast cancer and cal milestones, plus up to $754mm in ad- for Takeda Pharmaceutical Co. Ltd., which HER2-overexpressing metastatic gastric ditional development, regulatory, and sales holds an exclusive licensing option. (Oct.) or gastroesophageal junction adenocarci- milestones, as well as royalties. Crescendo Takeda pays an up-front access fee and noma. Combined annual net sales for the will use its transgenics platform to discover research funding, while EnGeneIC conducts branded products are $6.5bn in the US and and configure Humabody candidates (drug research and develops the programs. Canada alone. Teva will be responsible conjugates and immuno-oncology modula- The EDV platform uses antibody-targeted for all commercial activities in the US and tors) against multiple targets that Takeda bacteria-derived nanocells to release high Canada, while Celltrion is responsible will select. Takeda gets global development concentrations of chemotherapeutics, tar- for completing clinical development and and commercialization rights to resulting geted drugs, and RNAi molecules directly regulatory activities. Celltrion has already projects. Humabodies are based on fully hu- into tumor cells. It allows for targeted cell

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com In Vivo Pharma intelligence |

The fastest possible checkmate can be made in two moves

(COINCIDENTALLY, IT IS CALLED THE FOOL’S MATE)

Strategy is not an accidental maneuver.

Developing appropriate strategies is a result of talent, experience and know-how. It’s an arena that few companies can enter with authority. Coincidentally, it’s what we happen to do best.

Advertise in one of our publications and stay ahead of the competition!

Contact our sales executive to learn about our various advertising opportunities available to you!

Christopher Keeling +44 203 377 3183 [email protected] Customer Care: +1 888-670-8900 (USA) invivo.pharmamedtechbi.com ❚ Dealmaking

death while also stimulating the body’s due to large increases in antibiotic resistance. ceutics International Inc.’s oral extended- natural anticancer immune response. The Fimbrion was founded in 2012 by Scott Hult- release generic neurology candidates. (Oct.) deal is the second immuno-oncology tie-up gren, James Janetka, and Thomas Hooton Intellipharmaceutics applies its multiple for Takeda in as many days. It also an- and is based on IP licensed from Washington Hypermatrix controlled-release drug de- nounced a deal for Crescendo Biologics’ University in St. Louis. livery technologies to both existing and transgenics-based Humabody candidates; new pharmaceuticals across a broad range under that collaboration, Takeda could pay GlaxoSmithKline PLC ZAI Lab Ltd. of therapeutic areas. The deal includes up to $790mm. Financials for the EnGeneIC dopamine receptor antagonist quetiapine GlaxoSmithKline PLC licensed Zai Lab alliance were not disclosed. fumarate, for which the company just an- Ltd. global rights to two anti-inflammatory nounced tentative ANDA approval by the EpimAb Biotherapeutics candidates. (Oct.) Kymab Ltd. FDA. A generic to AstraZeneca’s Seroquel The agreement gives Zai development and XR, quetiapine fumarate is indicated for EpimAb Biotherapeutics Inc. and Kymab commercialization rights to one Phase II schizophrenia, bipolar disorder, and major Ltd. announced an immuno-oncology de- and one preclinical asset, both focused on velopment and cross-licensing agreement depressive disorder (MDD). The two other combatting inflammation. Although further candidates--both of which have ANDAs un- for bispecific therapeutic antibodies against details on the agreement have not been dis- multiple cancer targets. (Oct.) der FDA review--are desvenlafaxine (a closed, GSK’s current pipeline contains 16 generic to Pfizer’s Pristiq), a selective sero- The partners will use EpimAb’s Fabs-In-Tan- already marketed drugs for inflammation and tonin and norepinephrine reuptake inhibi- dem Immunoglobulin (FIT-Ig) technology three candidates in active development. This tor for MDD, and lamotrigine (a generic to to generate bispecific antibodies combined partnership comes on the heels of a Septem- GlaxoSmithKline’s Lamictal XR), a sodium with antibodies discovered with Kymab’s ber 2016 deal in which Tesaro licensed Zai channel antagonist for epilepsy. Intelli- Kymouse transgenic mouse platform. Epi- exclusive rights to cancer candidate nirapa- pharmaceutics will exclusively manufacture mAb has rights to develop and commercial- rib in China. Zai has taken five novel drug the drugs and be the sole US supplier for ize the resulting antibodies in China, while candidates (including ZL2102 (licensed from Mallinckrodt, which pays $3mm up front and Kymab gets rights in the rest of the world. Sanofi) and ZL1101 (licensed from UCB)), and boosts its existing heavily neuro-focused Each company will receive milestones and three cancer compounds into clinical trials in generics portfolio. The deal also includes a royalties from the other based on certain China and brought the first China-discovered long-term profit sharing arrangement under achievements. drug into global Phase III trials. which Intellipharmaceutics could get up Eurofarma Laboratorios SA Innovus Pharmaceuticals Inc. to $11mm in cost recovery payments. Last Eisai Co. Ltd. Seipel Group Pty. Ltd. year Intellipharmaceutics signed a similar Morphotek Inc. Innovus Pharmaceuticals Inc. licensed alliance with Teva, which licensed US rights Eisai Co. Ltd.’s Morphotek Inc. subsidiary exclusive worldwide rights to Seipel Group to an undisclosed extended-release generic 52 granted Brazilian generics firmEurofarma Pty. Ltd.’s Urox for overactive bladder (OAB) under ANDA review, but that deal was termi- Laboratorios SA exclusive Latin American and urinary incontinence (UI). (Oct.) nated earlier this year because the subject rights to develop and sell its monoclonal an- Urox, which had 2015 sales of $1mm, is an of the agreement did not receive FDA regu- tibody farletuzumab for ovarian cancer. (Oct.) over-the-counter herbal supplement contain- latory approval by the agreed-upon date. Eurofarma pays money up front, developing a combination of Crataeva nurvala stem Japan Tobacco Inc. ment and sales milestones, and royalties. bark (Seipel’s Cratevox specialized extract to Torii Pharmaceutical Co. Ltd. Farletuzumab is a folate receptor alpha increase smooth muscle tone of bladder wall Torii Pharmaceutical Co. Ltd. licensed exclu- antagonist currently in a Phase II trial in and aid in emptying and refilling the bladder), sive Japanese rights to co-develop and sell first-relapsed platinum-sensitive ovarian Equisetum arvense stem (horsetail; to promote ’s dermatology project cancer in patients with low levels of the Japan Tobacco Inc. sphincter control and diuretic properties to JTE052. (Torii is majority-owned by JT.) (Oct.) ovarian cancer biomarker CA125. The trial maintain healthy urination frequency), and is studying the candidate in combination Lindera aggregata root (an antioxidant for JTE052, a Janus kinase (JAK) inhibitor, is in with standard chemotherapy to investigate maintaining urinary tract tone and function). Phase II trials as a topical atopic dermatitis safety and efficacy. Morphotek will supply Urox has demonstrated in multiple double- therapy. Torii pays money up front plus Eurofarma with clinical and commercial blind clinical trials the ability to reduce urge milestones. In addition to renal diseases, materials, and Eurofarma has the option to and stress incontinence, urinary frequency allergens, and HIV infection, dermatology is take over filling and packaging vials. and urgency, and nocturia in male and female one of Torii’s main therapy areas. Offerings OAB and UI patients. Innovus Pharma will pay include ointments, creams, and lotions for Fimbrion Therapeutics Inc. atopic dermatitis, contact dermatitis, and GlaxoSmithKline PLC SG an up-front payment and has committed to purchasing annual supplies of the product, tinea pedis, as well as products related to and biotech start-up GlaxoSmithKline PLC which it will rename UriVaRx. Innovus will skin reactions from allergen exposure. are collaborat- Fimbrion Therapeutics Inc. market it using its Beyond Human direct-to- ing to develop a small-molecule drug for Japan Tobacco Inc. consumer marketing platform and aims to treatment and prevention of urinary tract JW Pharmaceutical Corp. triple the drug’s sales. UriVaRx adds a new infections. Strategic Transactions assumes Japan Tobacco Inc. (JT) granted JW Pharma- therapeutic area to Innovus’ portfolio of OTC that GlaxoSmithKline will hold licensing ceutical Corp. exclusive rights to develop and products, which already includes mainly men’s rights to the resulting drugs. (Oct.) sell JTZ951 in the Republic of Korea for anemia and women’s sexual and reproductive health associated with chronic kidney disease. (Oct.) The partnership will focus on preclinical de- products, as well as offerings in health supple- velopment of a class of mannose-containing ments, pain, respiratory, and vision care. JTZ951 is a hypoxia-inducible factor-prolyl small-molecules known as mannosides, which hydroxylase protein inhibitor in Phase II trials may be able to treat UTIs without inducing Intellipharmaceutics in Japan; it works by enhancing production antibiotic resistance. Fimbrion’s FimH protein International Inc. of endogenous erythropoietin and promoting acts like “molecular Velcro” allowing bacteria Mallinckrodt PLC red blood cell production. Shortly after the to adhere to receptors on the bladder wall Under a 10-year agreement, Mallinckrodt deal with JW, JT also announced that it grant- instead of being flushed by urine. Current PLC licensed exclusive US rights to market, ed Torii Pharmaceutical exclusive rights options to treat bacterial infections are limited sell, and distribute three of Intellipharma- to co-develop and sell JTE052 in Japan for

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 53 invivo.pharmamedtechbi.com , ❚

Pfizer , with . (Oct.) Myovant marketing marketing in those ter- those in Menarini to Metuchen for . ing Dealmak Spedra , which holds rights td / Stendra L November 2016 | In Vivo November Stendra Sanofi ’s Auxilium Pharmaceuticals Mitsubishi Tanabe Pharma Tanabe Mitsubishi Stendra granted an affiliate of Takeda Pharmaceutical Takeda . Sciences Endo Inc the right of first negotiation (ROFN) to ovant My Pfizer Vivus initially licensed exclusive worldwide licensed exclusive Vivus initially rights and commercialization development to certain Pacific Rim countries) (except in avanafil from had exclusive US and Canadian marketing had exclusive US and was terminated in rights, but that license to rights the and 2015 The compounds are relugolix (TAK385) and RVT602 (TAK448), two of Takeda’s discontinued pipeline programs, which the Japanese Big Pharma licensed exclusive worldwide Asian certain and Japan in (except rights countries) to Myovant when it launched the start-up in June 2016. Relugolix is an oral gonadotropin-releasing hormone (GnRH) receptor antagonist in Phase III for uterine fibroids and endometriosis, and in Phase II for advanced prostate cancer. The Phase I RVT602 is an oligopeptide kisspeptin analog gonadotro- chorionic human to alternative pin for female infertility. For a three-year period, Pfizer will have the ROFN to develop and commercialize both candidates in a major market country in indications including heavy menstrual bleeding associated with uterine fibroids, endometriosis-associated pain, advanced prostate cancer, or female Inc. partners--which also signed agreements signed agreements partners--which also during 2013--are ritories were returned to Vivus last month. ritories were returned Vivus’ other Under a deal concurrent with the closing of Under a deal concurrent with the closing of its $202mm initial public offering, a sublicense to two male and female health drug candidates Myovant previously in-licensed from an agreed-upon term; Metuchen has six six has Metuchen term; agreed-upon an months to decide if it will exercise an option to assume manufacturing and supply rights within its designated territories. in Africa, the Middle East, Turkey, and the in Africa, the Middle $56mm to up and front up $5mm (for CIS more in milestones), and under a 2001 agreement when the drug the drug agreement when under a 2001 up front I. Vivus paid $5mm was in Phase time, but is still obli- for the license at that an Under net sales. on to pay royalties gated was worth up to October 2013 deal (which $285mm), a license in over 40 European countries, a license in over 40 European countries, Australia, and New Zealand (for $21mm up front and a potential $102 in milestones). rights gains Metuchen current deal, the In in the selected countries in exchange for $70mm up front, plus reimbursement of milestones and royalties paid by Vivus to - Mitsubishi Tanabe. Metuchen may also con any (including activities development duct FDA) the by required studies post-regulatory to support any pending approvals within its partners the Concurrently, regions. licensed entered a commercial supply agreement - under which Vivus will handle manufactur ing and supply of Sciences Ltd. Sciences entered entered LLC licensed ) is in Phase ’s avelumab in ) in 2013. (Oct.) - device for aero Pfizer Spedra Vaccinex Inc. Vaccinex (avanafil)--an oral phos- Pfizer Inc. Pfizer . - entered into a trial collabo and ’s and InsiraChamber Pharmaceuticals . Stendra . Inc Merieux ’s KGAA KGAA Inc - cephalosporin antibacte (cefixime) Inc accinex Vivus Metuchen Merck V Institut Merck Pfizer phodiesterase-5 inhibitor with a rapid onset of action for erectile dysfunction--which was approved in the US in 2012 and in Europe (where it’s known as - into a clinical trial collaboration to investi gate the combination of Merck’s avelumab with Vaccinex’ VX15/2503 for patients with advanced non-small cell lung cancer who have not been previously treated with an immunotherapy. (Oct.) anti-semapho- an VX15/2503, has Vaccinex rin 4D IgG4 monoclonal antibody, in Phase I trials for solid tumors; the company notes the indicated already have studies early that compound’s potential for use in combination therapies. Avelumab (jointly developed by Merck and its partner sol delivery of allergy or asthma therapies. of allergy or asthma sol delivery Vivus Inc.Vivus Merck KGAA Merck Suprax Metuchen Pharmaceuticals LLC Pharmaceuticals Metuchen Merck KGAA Merck Transgene SA Transgene SA Transgene ration to evaluate its immunotherapeutic ration to evaluate its sovacivec) with TG4001 (tipapkinogene exclusive commercialization rights in the in rights commercialization exclusive US, Canada, South America, and India to rial; and the rial; and the III for a number of solid tumors including NSCLC, stomach, esophageal, ovarian, renal, and bladder cancers, as well as earlier trials for Merkel cell carcinoma, breast, prostate, colorectal, and blood cancers. Vaccinex will conduct a planned Phase Ib/ II trial of the avelumab/VX15/2503 combo. a Phase I/II study for human papilloma virusa Phase I/II study for human neck squamous cell(HPV)-positive head and carcinoma. (Oct.) TG4001, a human Transgene is developing E6 and E7 inhibi- papillomavirus 16 (HPV16) cancers caused by tor, in Phase II trials for head and neck. the HPV virus, including Under a 2014 co-development and co- commercialization deal, Merck and Pfizer are developing avelumab, an anti-PD-L1 IgG1 monoclonal antibody, in a variety of Phase III studies for tumors including non-small cell lung, esophageal, stomach, ovarian, renal, and bladder cancers, as well as earlier trials for carcinoma, melanoma, Hodgkin’s lymphoma, and breast, colorectal, and prostate cancers. Transgene notes that preclinical studies of TG4001 and avelumab suggest that together, the compounds could be effective at treating HPV-positive head and neck cancers. Transgene will sponsor the initial Phase I/II trial.

’s Lupin Hypn- Pfizer Sufenta (piritra- ’s PharmFilm (buprenor- (etomidate); . technology to technology to td (nitazoxanide) (nitazoxanide) L Dipidolor is paying $155mm $155mm paying is Lupin Ltd. US division, which US division, which Suboxone Alinia (ondansetron), an oral an (ondansetron), Janssen Pharmaceutica Pharmaceutica Janssen and Hypnomidate (fentanyl citrate), PharmFilm LLC (alfentanil hydrochloride) for (alfentanil hydrochloride) Zuplenz Rx platform: . & Johnson & Enterprises are controlled substances.) Piramal td Sol L Sublimaze Rapifen ’s anesthesia and pain management management ’s anesthesia and pain upin Mono L Johnson Piramal in cash for five of soluble film. Under the current deal, Lupin will apply the Pharmaceuticals Inc. Pharmaceuticals omidate both pain and anesthesia. (All except both pain and anesthesia. NV anti-diarrheal tablets and oral suspension; PharmFilm dermatology conditions. That collaborationdermatology and milestone payments.carries up-front MonoSol Rx LLC MonoSol Lupin Pharmaceuticals Inc. Pharmaceuticals Lupin Piramal Enterprises Ltd. Enterprises Piramal Janssen Pharmaceutica NV Pharmaceutica Janssen phine and naloxone) sublingual (under- the-tongue) film for opioid dependency and anti-emetic mide); anesthetic popular brands. delivery platform. (Oct.) The technology is designed to enable more precise dosing and improved efficacy and safety through a fast-dissolving, taste- masked, and easy-to-administer oral thin-film formulation. MonoSol already markets two products that incorporate the (sufentanil citrate), and (sufentanil citrate), and and specializes in medications for children, will specializes in medications for children, will collaborate on the development of pediatric formulations using MonoSol’s multiple undisclosed pediatric medicines. Although specific drugs were not revealed, Lupin hinted at the attention-deficit/hyper- it looks market; (ADHD) disorder activity to expand its products for children in this therapeutic area as well as in other indica- includes already portfolio pediatric Its tions. methylphenidate hydrochloride chewable tablets for ADHD; gets rights to the brand names and all related the know-howincluding property, intellectual to make both their active pharmaceutical forms. dosage finished and ingredients Janssen will supply finished dosage forms for up to three years and the APIs for up to five years. In addition, it will continue to sell the products on behalf of Piramal until the - marketing authorizations or relevant busi ness relations are transferred. The drugs are already being sold in more than 50 countries $45mmof sales net generated and worldwide for the last 12 months. Piramal claims it’s the - third largest player in the worldwide inhala tion anesthesia market. Earlier this year the of four for $16.4mm paid company injectables. Janssen could also receive could also receive injectables. Janssen achieve certain$20mm should the products the over milestones financial agreed-upon next 30 months. (Oct.) are the pain medica- The acquired products tions company an Informa Inc., Information, Business ©2016 Informa ❚ Dealmaking

infertility as part of assisted reproduction. AMD.) The new aflibercept will have a dosing ongoing collaboration recently extended In exchange for the option, Pfizer purchased regimen of just two or three times per year through 2019), the DMD utrophin modula- 2mm Myovant shares in the IPO at the IPO as opposed to every-other month. Under tion program aims to use small-molecule price of $15 for a total of $30mm. The shares the agreement, Regeneron has the option drugs to increase the production of the are subject to a 180-day lock-up agreement to license exclusive rights to use Ocular’s utrophin protein, which is functionally and with the underwriters. One representative of technology to develop and commercialize structurally similar to dystrophin gene (the Pfizer will act as a non-voting observer on sustained-release aflibercept and other mutation of which leads to the disease) to the Myovant board during the ROFN period, biologics targeting VEGF for ophthalmic indi- slow down or stop DMD progression. The but this arrangement is terminated prior to cations. Ocular keeps rights to the hydrogel- collaboration with U of O has identified vari- that if Myovant is first acquired or files an based drug delivery platform for develop- ous utrophin modulator compounds distinct NDA for relugolix. ing non-VEGF-targeting compounds and from SMTC1100. Granted both FDA rare pe- small-molecules including tyrosine kinase diatric disease and fast-track designations Novartis AG inhibitors (TKIs) for other retinal diseases. as well as orphan drug status by both the Perlara PBC Should Regeneron exercise the option, it FDA and the EMA, SMTC1100 is currently in Perlara PBC (previously Perlstein Lab; rare dis- would pay $10mm, and Ocular Therapeutix a Phase II US and European proof-of-concept ease drug discovery platform) and Novartis AG would fund development through Phase trial (entitled PhaseOut DMD), which will will collaborate on the discovery of lysosomal I, after which time Regeneron would take measure in muscle biopsies both utrophin storage disorder (LSD) treatments. (Oct.) over and finance further development and modulation (using muscle fat infiltration) Perlara launched in February 2014 and soon commercialization. Ocular would be eligible and utrophin protein and muscle fiber re- after completed a seed round in which rare for up to $305mm in milestones--$155mm generation. Under a 2008 deal, BioMarin disease therapeutics firm Retrophin contrib- for development and regulatory achieve- had an exclusive worldwide license to the uted. The company’s platform uses CRISPR ments, $100mm upon the first commercial compound (then in preclinical development) gene editing to model human disease in sale, and $50mm in additional commercial but returned the rights in 2010, citing phar- animals such as yeast, nematodes, fruit milestones--plus tiered high-single-digit to macokinetic challenges following Phase I. flies, and zebrafish, which share genetic mid-teen-digit royalties (Strategic Transac- Summit’s SMTC1100 adds a candidate with similarities with humans. The CRISPR-en- tions assumes 8-15%). another mechanism of action to Sarepta’s gineered disease models are incorporated DMD pipeline; Sarepta just last month (con- Sarepta Therapeutics Inc. into phenotypic cell-based screens that current with a $328mm follow-on offering) Summit Therapeutics PLC rapidly (and less expensively) evaluate received the FDA nod (under the acceler- thousands of compounds for specific muta- Sarepta Therapeutics Inc. gained exclusive ated approval pathway) for its Exondys 51 tions, using a predictive engine to generate EU rights to Summit Therapeutics PLC’s oral (eteplirsen) DMD drug, which skips exon 51 and identify the best potential orphan drug utrophin modulator ezutromid (SMTC1100) of the dystrophin gene, thus repairing the candidates. Perlara has identified at least for the muscle-wasting disease Duchenne mutation in the mRNA sequence. A recent 54 250 single-gene diseases and already has muscular dystrophy (DMD). Sarepta’s li- partnership with Catabasis Pharmaceuti- in its pipeline the preclinical PERL101 for cense also includes Switzerland, Norway, cals involves the joint R&D of a combination Niemann-Pick Type C (NPC) disease and a Iceland, Turkey, and the Commonwealth of DMD therapeutic using Sarepta’s Exondys N-glycanase 1 (NGLY1) deficiency compound Independent States, as well as an option to 51 in conjunction with Catabasis’ Phase II in discovery. Novartis made an equity invest- Latin American rights. (Oct.) CAT1004 (edasalonexent), an oral nuclear ment in the company and the partners will In addition, Sarepta has rights within the factor kappa B (NF-kB) inhibitor. first work on lead NPC small-molecule can- same territories (and also applying to its op- didate PERL101, which has shown positive tion for Latin America) to second-generation TaiGen Biotechnology Co. Ltd. oral bioavailability and stability in mouse and future small-molecule utrophin modula- Yichang HEC Changjiang validation studies. Novartis concurrently tors from Summit’s pipeline. In exchange for Pharmaceutical Co. Ltd. TaiGen-YiChang HEC JV announced a separate collaboration with an- the license, Sarepta will pay Summit $40mm other discovery biotech, Cerulean, in which up front; $42mm in development milestones TaiGen Biotechnology Co. Ltd. and YiChang it will pay $1.2bn to use Cerulean’s Dynamic (including $22mm upon the first dosing of HEC ChangJiang Pharmaceutical Co. Ltd. Tumor Targeting nanoparticle-drug conju- the last patient in the current SMTC1100 have created a Chinese joint venture to gate technology platform to develop up to Phase II trial, payable on or after April 1, develop, manufacture, and commercialize five cancer candidates. 2017); $150mm in regulatory milestones re- direct-acting antiviral agents (DAAs) for lated to ezutromid; additional development treating chronic hepatitis C virus (HCV) in Ocular Therapeutix Inc. ($65mm) and regulatory ($225) milestones mainland China, Taiwan, Hong Kong, and Regeneron Pharmaceuticals Inc. on any next-generation utrophin modulators Macau. (Oct.) Ocular Therapeutix Inc. and Regeneron developed; sales milestones of $330mm; The companies signed the memorandum Pharmaceuticals Inc. are teaming up to and tiered, escalating royalties ranging from of understanding back in February but develop a sustained-release formulation the low to high teens (Strategic Transac- have now finalized the agreement. The of aflibercept for wet age-related macular tions assumes 13-19%) within the licensed JV will be the first of its kind involving degeneration (wet AMD) and other serious territories. If Sarepta chooses to license pharmaceutical companies on both sides retinal diseases. (Oct.) Latin American rights (which it can do three of the Taiwan strait. The new firm will Aflibercept targets the vascular endothelial months following regulatory approval in the capitalized at RMB680mm ($102mm) and growth factor (VEGF) and is sold by Regen- US or EU), it will pay an additional $17mm for be initially owned 49% by TaiGen and 51% eron under the Eyelea brand. The version the option exercise and specific regulatory by YiChang. The JV gains TaiGen’s HCV NS3 that Ocular and Regeneron will work on is milestones, $82.5mm in sales milestones, protease inhibitor furaprevir (TG2349), currently in preclinical studies and will use and the same tiered, 13-19% escalating which is finishing up a Phase II trial in Ocular’s sustained-release hydrogel-based royalty range as in the other territories. Taiwan. YiChang contributes its Phase I drug delivery depot formulation for intravit- Summit will fund all R&D through 2017 and, NS5a inhibitor yimitasvir (DAG181). TaiGen real injection. (Ocular is already using the starting in 2018, the partners will split R&D will handle research, clinical development, technology in developing a sustained-re- costs 45/55 (Sarepta/Summit). Discovered and registration of a furaprevir/yimitasvir lease version of bevacizumab (Genentech’s by Professor Kay Davies at the University HCV treatment, while HEC is responsible Avastin), also in preclinical studies for wet of Oxford (and licensed to Summit in an for operation, manufacturing, and sales and

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 55 invivo.pharmamedtechbi.com ❚

. Heplisav- . (treatments (treatments orp (rare disease (rare disease Inc C ing Dealmak (orphan, primary (orphan, primary - Pharmaceu Raptor commercialization commercialization . (developing mono- November 2016 | In Vivo November PLC Inc Heplisav-B Technologies Pharma . grossed $14mm through the regis- Pharmaceuticals . (Oct.) Inc , an adult hepatitis B vaccine; the BLA is , an adult hepatitis B Immunomedics Horizon Idera navax Dy x GT clonal antibody therapies for cancer, autoimmune conditions, and other diseases) netted $28.8mm through the public offering of 10mm common shares at $3. Investors also received two-year warrants to buy 10mm more shares at $3.75. Funds will support pipeline project IMMU132, including late-stage development activities and NDA care, and rheumatology medicines) raised care, and rheumatology medicines) raised $300mm in senior notes due 2024. The notes bear an interest rate of 8.75% and senior an existing with used along will be secured credit facility to fund the company’s planned acquisition of therapeutics) netted $47mm through the public sale of 25mm common shares at $2. Proceeds will support development of key pipeline assets including immuno- oncology compound IMO2125 (Phase I/ II trials for refractory tumors including metastatic melanoma); IMO8400 (Phase II for the rare disease dermatomyositis); (third-generation 3GA company’s the and antisense) platform. (Oct.) Goldman Banks/Advisors: Investment Sachs & Co.; JMP Securities LLC; JP Mor- gan Chase & Co.; Wedbush PacGrow Life Sciences tical currently under review, with a PDUFA ac- currently under review, 15, 2016. Proceeds tion date of December corporate purposes, would fund general including B Immunomedics Inc. Immunomedics Dynavax Technologies Corp. Technologies Dynavax PLC Pharma Horizon Inc. Pharmaceuticals Idera GTx Inc. GTx tered direct sale of 17.3mm common shares tered direct sale of 17.3mm common shares at $0.81 (a slight premium). The company is developing selective androgen receptor modulators for breast cancer (Phase II), stress urinary incontinence (Phase II), and Duchenne muscular dystrophy (preclinical), and also has a selective androgen receptor degrader in preclinical studies for prostate cancer. (Oct.) activities. (Oct.) Cantor Fitzger- Investment Banks/Advisors: ald & Co. for infectious, autoimmune, and inflam- autoimmune, and for infectious, committed entered into a matory diseases) Manage- agreement with Deerfield financing purchase which Deerfield could ment, under of Dynavax’s $100mm principal amount secured notes. 10.375% five-year senior placement agent. Cantor Fitzgerald is the upon Dynavax’s The funding is contingent approval for the FDA of by receipt

- - Novar through a Cloudbreak . - Thera Cidara . raised $35mm raised $35mm Bayer (genome editing . (developing oral (developing Inc AG AG Inc Inc Cerulean Pharma Inc. Pharma Cerulean through Bayer Global Invest Global Bayer through netted $27mm through the netted $27mm through the Pharma BioPharma Therapeutics Bayer to develop up to five nanoparticle-drug nanoparticle-drug five to up develop to idara erulean CRISPR Therapeutics CRISPR CRISPR Therapeutics CRISPR C C Rx Azur follow-on sale of 2.75mm common shares follow-on sale of 2.75mm common shares (including the overallotment) at $10.10 each. The company will use the proceeds for ongoing clinical trials of Phase II CD101 IV and CD101 topical antifungal candidates, to finish IND-enabling studies for its CD201 antibacterial, and to expand its tis non-systemic recombinant proteins for for recombinant proteins non-systemic dis- and microbiome-related gastrointestinal public of- $4.8mm in its initial eases) netted $5.50 each. common shares at fering of 960k planned to sell(At one point the company $6 and $8.) (Oct.) 2.14mm shares between 1 Network Banks/Advisors: Investment ViewTrade Financial Securities Inc.; focused on CRISPR/Cas9-based therapeutics) netted $52mm in its initial public offering of 4mm shares at $14 (down-sized and below the anticipated price range) on the Nasdaq. Concurrently, the company raised $35mm through the sale of 2.5mm shares to development partner conjugate (NDC) cancer candidates, the candidates, the conjugate (NDC) cancer at-the-market com- biotech also entered an with Aspire mon stock purchase agreement it could get up to Capital Fund, in which 800k shares bought already Aspire $20mm. at $1.25 (a 42% premium) and Cerulean - has the right to sell to Aspire the remain in company’s discretion the (at $19mm ing increments not exceeding $300k) over the agreement’s two-year term. Cerulean also issued Aspire 700k commitment shares. The company will use the proceeds to continue clinical development of its NDC pipeline, which includes Phase II topoisomerase 1 ovarianfor (camptothecin) CRLX101 inhibitor and other solid tumor cancers and Phase I/II CRLX301 (docetaxel) for solid tumors. (Oct.) through the sale of 2.5mm shares in a through the sale of 2.5mm shares in a private placement offering to development partner CRISPR Therapeutics AG Therapeutics CRISPR Infectious disease-focused AG Therapeutics CRISPR On the same day AzurRx BioPharma Inc. BioPharma AzurRx private placement offering. (Oct.) Investment Banks/Advisors: Barclays Bank PLC; Citigroup Inc.; Guggenheim Partners LLC; Piper Jaffray & Co. peutics Inc. peutics immunotherapy technology platform. (Oct.) Investment Banks/Advisors: Cantor Fitzger- ald & Co. signed a $1.2bn collaboration with signed a $1.2bn collaboration ments BV, an affiliate of Bayer Healthcare Healthcare Bayer of affiliate an BV, ments LLC. (Oct.)

, in and and in ad- Zoptrex (macimo- Lutathera

Annexin V-128 Lutathera to sell ; to expand the ; to expand the . Ascendis Pharma Pharma Ascendis Macrilen completed a regis- AS Inc SA sustained-release technol- ccelerator NEOBOMB1 (zoptarelin doxorubicin) for (zoptarelin doxorubicin) for A Pharma Zentaris ; and to increase manufacturing ; and to increase manufacturing , and Zoptrex TransCon netted $112.8mm through the public of- Ascendis AEterna Applications Advanced commercial launches for - endometrial cancer; regulatory submis of sions are expected during the first half 2017. Earlier this month, AEterna signed on fering of 6.3mm American Depositary Shares (each ADS is equal to one ordinary share) at $19. The company will use the proceeds to finish clinical development and gain regulatory approval for its growth hormone and for ongoing development of a parathyroid peptide. natriuretic C-Type and hormone Ascendis’ candidates were created using its ogy. (Oct.) Investment Banks/Advisors: Bank of America Merrill Lynch; Credit Suisse Group; JP Morgan & Co.; Wedbush PacGrow Life Sciences tered direct offering, netting $7mm through tered direct offering, the sale of 2.1mm units at $3.60 apiece (a 19% discount). Each unit consisted of one common share and 0.45 of a common share purchase warrant, exercisable at $3.60 for of three years. Proceeds will support filing NDAs for lead projects Danish drug delivery firm firm delivery drug Danish Specialised Therapeutics Specialised Somakit PSMA Financings /Pharmaceuticals marketing activities. Based on results from activities. Based on results marketing TaiGen YiChang will provide Phase II trials, transfer and after the share with $20-40mm equity TaiGen will hold a 40% is complete remaining JV and YiChang the stake in the to create the parties seek 60%. Ultimately DAA-based HCV treat- all-oral interferon-free are currently none ments, of which there China. approved in mainland AEterna Zentaris Inc. Zentaris AEterna Advanced Accelerator Applications SA Applications Accelerator Advanced Australia and New Zealand. (Oct.) Investment Banks/Advisors: Aegis Capital Corp.; Maxim Group LLC; Rodman & Ren- shaw Capital Group Inc. infrastructure. (Oct.) Investment Banks/Advisors: Canaccord Morgan JP LLC; Securities JMP Inc.; Genuity Se- Fargo Wells Inc.; Co. & Jefferies Co.; & curities LLC (nuclear medicine) netted $141mm in a pub- netted $141mm in a (nuclear medicine) American Depository lic offering of 3.9mm equal to two ordinary Shares (each ADS is shares) at $38. The company will use the proceeds to support clinical trials and R&D for its pipeline, including AS relin) for adult growth hormone deficiency relin) for adult growth hormone deficiency and ditional indications, and company an Informa Inc., Information, Business ©2016 Informa ❚ Dealmaking In Vivo submission for metastatic triple-negative $4.65mm through the public offering of 2.13 Pharma intelligence | breast cancer. (Oct.) common shares at $2.35. (Oct.) Investment Banks/Advisors: Wells Fargo managing editor Investment Banks/Advisors: Aegis Capital Nancy Dvorin Securities LLC Corp. health care editor Myovant Sciences Ltd. Scynexis Inc. Ashley Yeo Just four months after its inception, start-up Solar Capital provided Scynexis Inc. (anti- senior editor Myovant Sciences Ltd. (men’s and women’s infectives) with a $15mm term loan. The Peter Charlish health therapeutics) netted $202mm in an secured term loan is for a period of 48 senior editor, data initial public offering of 14.5mm shares at months (maturing on Sept. 30, 2020) and John Hodgson $15, the high end of its anticipated range, bears a floating interest rate equal to LIBOR and up-sized from its original 13mm shares. editorial staff + 8.49%. The loan is interest-only through Jessica Merrill This marks the largest biotech IPO so far April 1, 2018 and principal payments can be Sten Stovall this year. (Oct.) deferred for an additional six months if the Amanda Micklus, Principal Analyst Investment Banks/Advisors: Barclays Bank company receives certain positive clinical contributing editors PLC; Citigroup Inc.; Cowen & Co. LLC; Ever- data prior to March 31, 2018, and receives Deborah Erickson, Regina Paleski core Partners; JMP Securities LLC; Robert W. unrestricted net cash proceeds of not less Mark Ratner, Marc Wortman Baird & Co. Inc. than $20mm after Sept. 8, 2016. Scynexis also has the right to prepay the loan. The research manager Nektar Therapeutics company also issued a warrant to Solar to Steven Muntner Nektar Therapeutics netted $165mm in a purchase up to 122.4k common shares at deals analysts follow-on public offering of 13mm common an exercise price of $3.6754 for up to five Beth Detuzzi, Deanna Kamienski shares at $13.50. The company will use the years. Concurrent with the financing, the Maureen Riordan proceeds to fund research and develop- company concurrently announced positive ment, particularly for candidates NKTR181 Phase II results of its oral SCY078 in vul- design supervisor (Phase III for chronic pain), NKTR102 (Phase vovaginal candidiasis and invasive candi- Gayle Rembold Furbert II for advanced metastatic breast cancer), diasis. Scynexis will use proceeds from the senior designer NKTR214 (Phase I/II immuno-oncology for financing to expand the indications for the Janet Haniak solid tumors), and NKTR358 (preclinical for compound. (Oct.) autoimmune diseases). (Oct.) designers Investment Banks/Advisors: Armentum Jean Marie Smith, Paul Wilkinson Investment Banks/Advisors: BTIG LLC; Brean Partners Capital LLC; JP Morgan & Co.; Janney Mont- head of in vivo 56 gomery Scott Inc.; Jefferies & Co. Inc.; Lad- Sunesis Pharmaceuticals Inc. Karen Coleman enburg Thalmann & Co. Inc.; Piper Jaffray & Oncology therapeutics developer Sunesis advertising Co.; Roth Capital Partners; William Blair & Co. Pharmaceuticals Inc. netted $26.2mm Christopher Keeling through the public sale of 5.7mm common Probi AB corporate sales shares (including the overallotment) at John Lucas, Elissa Langer Probiotics developer Probi AB grossed $3.85 and 1,558 Series C preferred shares SEK601.6mm ($70mm) through a rights of- Alicia McNiven at $1k. (Each Series C share converts into 1k fering of 2.28mm shares at SEK264 (a 24% technology operations manager common as long as the stockholder’s result- discount). Symrise, Fjarde AP-fonden, Swed- Chris Trudeau ing ownership stake doesn’t exceed 9.98% bank Robur Fonder, and Handelsbanken following the conversion.) Proceeds will vp, e-strategy & development Fonder subscribed in the rights issue. (Oct.) support clinical development of SNS062, Adam Gordon Investment Banks/Advisors: Handelsban- a BTK inhibitor entering Phase I for B-cell managing director ken Markets malignancies, and regulatory development Phil Jarvis Puma Biotechnology Inc. of vosaroxin for AML in Europe. (Oct.) Oncology drug in-licenser Puma Biotechnol- Investment Banks/Advisors: Cowen & Co. editorial office LLC; Wells Fargo Securities LLC 52 Vanderbilt Avenue, 11th floor ogy Inc. netted $162mm through the public New York, NY 10017 sale of 4.3mm common shares (including Theravance Biopharma Inc. www.InVivo.PharmaMedtechBI.com the overallotment) at $40. (Oct.) Theravance Biopharma Inc. (treatments for customer service Investment Banks/Advisors: Bank of infectious, respiratory, cardiovascular, and [email protected] America Merrill Lynch; Citigroup Inc.; Credit gastrointestinal diseases) netted $288mm Suisse Group; JP Morgan Chase & Co.; Stifel through concurrent public offerings of its In Vivo: The Business & Medicine Report Nicolaus & Co. Inc. common stock and debt. In the first trans- [ISSN 2160-9861] is published monthly, except for the action, the company sold 3.85mm common combined July/August issue, by Informa Business Ra Pharmaceuticals Inc. Intelligence, Inc., 52 Vanderbilt Avenue, 11th floor, Ra Pharmaceuticals Inc. netted $85.2mm shares at $26 for net proceeds of $94mm, New York, NY 10017. Tel: 888-670-8900(US); in its initial public offering through the sale while in the second, it sold $200mm prin- +1-908-547-2200 (outside US); Fax: 646-666-9878. cipal amount ($194mm net) of its 3.25% of 7.05mm shares at $13 (upsized; midpoint Subscriptions cost $2,630 (online and print) per year. of range). (Oct.) senior notes due 2023. The notes convert to Office of publication, The Sheridan Group, 66 Peter common at a rate of 29.0276 shares per $1k, Investment Banks/Advisors: BMO Financial Parley Row, Berlin, CT 06037. Postmaster: Send or about $31.84 per share. (Theravance’s address changes to Informa Business Intelligence, Group; Credit Suisse Group; Jefferies & Co. stock averaged $31.70 at the time of the 52 Vanderbilt Avenue, 11th floor, New York, NY 10017. Inc.; SunTrust Banks Inc. sale.) (Oct.) © 2016 by Informa Business Intelligence, Inc., an Informa company. Ritter Pharmaceuticals Inc. Investment Banks/Advisors: Cantor Fitzger- All rights reserved. Ritter Pharmaceuticals Inc. (developing ald & Co.; Evercore Partners; Guggenheim No part of this publication may be reproduced in any form or therapies that modulate the gut microbiome Partners LLC; Leerink Partners LLC; Need- incorporated into any information retrieval system without the to treat gastrointestinal diseases) netted ham & Co. Inc.; Piper Jaffray & Co. written permission of the copyright owner.

In Vivo | November 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com