UNMET NEEDS in 2020 Exploring What Innovation Means Today

VOLUME 38 NUMBER 03

MARCH 2020 UNMET NEEDS IN 2020 Exploring What Innovation Means Today

Underserved Areas: Looking Beyond Discussing The Past, Present And Focusing On Collaborative Cancer And Rare Diseases Future Of Cell And Gene Therapies Not ‘Innovative’ Ways To Pay PAGE LEFT BLANK INTENTIONALLY invivo.pharmaintelligence.informa.com STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION-MAKERS CONTENTS ❚

March 2020

UNMEET NEEDS IN 2020 Exploring What Innovation Means Today

10 14 18 Defining Go And No-Go Disease Discussing The Past, Present And Underserved Areas: Looking Areas As An R&D Business Future Of Cell And Gene Therapies Beyond Cancer And Rare Diseases ED SILVERMAN LUCIE ELLIS MELANIE SENIOR Some believe unmet need refers only to Founding CEO of the UK’s Cell and Gene Oncology and rare diseases dominate the rare diseases and tiny patient Therapy Catapult, Keith Thompson, will industry pipeline, fueled by science, populations. But it is more than this. In retire from the company this year. He regulatory tailwinds and high prices. But 2020, the term sits at the heart of looks back on the last eight years of as the world grapples with coronavirus, decision-making for drug makers – along progress for CGT Catapult and the and with heart disease still the top killer, with cost, access and value, of course. advanced therapies sector – and can our systems fund treatments for more provides words of wisdom for the prevalent conditions? challenges still to come.

24 28 34 UK, Sweden Test Differing Focusing On Collaborative Not EU Health Innovation Partner- Antibiotic Market Models ‘Innovative’ Ways To Pay ship Reflects Medtech’s Role In STEN STOVALL LEELA BARHAM Unmet Needs Sweden and the UK are conducting Innovation is defined by the Cambridge ASHLEY YEO differing “develop and test” programs to dictionary as “(the use of) a new idea or The EU Partnership on Health Innovation, assess so-called “pull” incentives in method.” The term is bandied about a a new public private health care research which an antibiotics innovator will be great deal in the life sciences industry. But partnership, is in the final drafting phase paid an annual fee in return for an access is it helpful to use the term so widely, or before its launch under Horizon Europe. In guarantee for anti-infectives. The projects does the sector risk overlooking true Vivo asks the partnership’s medtech have drawn keen attention from other innovation? This can be applied not only to industry lead, Patrick Boisseau, to set out countries. the drugs coming to market, but how they the innovation challenges for participants. are paid for as well.

March 2020

DEPARTMENTS ❚ From The Editor AROUND THE INDUSTRY This month, In Vivo is focusing on the theme of 4 R edbiotec Pivots Toward HSV-2 unmet needs in 2020. We are looking at how the And Oncology biggest issues for patients have evolved and JOHN DAVIS whether the strategies of pharmaceutical and 5 New Business Models Are Needed medtech companies are aligned with what soci- LEELA BARHAM ety needs today. 6 Bringing A Different Science Into Solid Tumor Treatment Ed Silverman examines the formulas used by ASHLEY YEO drug developers when making R&D decisions, while Melanie Senior analyzes where money is INFOGRAPHIC: spent in drug development and whether a shift UNMET NEEDS IN 2020 is occurring – pulling investment away from the 8 BEN COMER AND LUCIE ELLIS overcrowded oncology pipeline. GAYLE REMBOLD-FURBERT Expanding on the topic of unmet need, Leela Barham looks at 21st century 40 ON THE MOVE approaches to market access agreements. She asks the questions, have “innovative” models had their day? And does the terminology matter? Recent executive appointments in the life sciences industry In a face-to-face interview, Keith Thompson, founding-CEO of the UK’s Cell REGINA PALESKI and Gene Therapy Catapult (CGT Catapult), discusses the journey of cell and gene R&D in the UK since 2012. Thompson will step down as CEO in 44 DEAL-MAKING April 2020, he highlights the greatest achievements of the Catapult so far Deals Shaping The Medical Industry, and discusses steps the sector still needs to take to get more advanced ther- February 2020 apies to more patients. THE STRATEGIC TRANSACTIONS TEAM Also included in this issue: an infographic looking at rare disease indications that have seen treatments reach the market for the first time, including reac- EXCLUSIVE ONLINE CONTENT tions from patient advocacy groups; and an exclusive interview with Patrick invivo.pharmaintelligence.informa.com Boisseau, MedTech Europe’s director of European research and innovation partnership policies, about the latest European public-private health care re- ❚ Checkpoint Inhibitor Deals: search partnership to launch under Horizon Europe. Searching For IO Combinations To As always, there are many more features and news articles that are not in- Unlock Cancer’s Black Box cluded in this issue. Go online to get all In Vivo content in one place, includ- BEN COMER ing a fact file on coronavirus, an analysis of Novartis’s attempts to make a ❚ Mehta Analysis: Biopharma 3.0 – shift in workplace culture and more: invivo.pharmaintelligence.informa. An Industry Society Could Cherish com. VIREN MEHTA

❚ Medtech Giants Ready To Battle Frontrunner Intuitive Surgical In In Vivo: Always Online First Don’t have an online user account? 'Soft Surgery Robotics' Quickly and easily create one Relevant and exclusive online-only MARION WEBB by clicking on the “Create your content at your fingertips 24/7. ❚ account” link at the top of the page. Fact File: Coronavirus Pipeline Full access to our 36-year archive. And Corporate Updates Contact: LUCIE ELLIS Access your subscription by visiting: [email protected] invivo.pharmaintelligence.informa. or call: (888) 670-8900 or +1 (908) ❚ Device/Diagnostics Quarterly com and log in. 748-1221 for additional information. Dealmaking Statistics, Q4 2019 AMANDA MICKLUS AND MAUREEN RIORDAN All stock images in this publication courtesy of /invivo @invivo /invivo www.shutterstock.com unless otherwise stated.

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❚ Up-Front SNAPSHOTS FROM MARCH’S CONTENT

Five areas Investment in cell and gene being prioritized by manufacturing has been MedTech Europe as a part transformational for the UK of the new Horizon Europe market. “It has unlocked Partnership for Health hundreds of millions of Innovation scheme: pounds in investment by venture capitalists, and accelerated firms to get into 1 manufacturing at scale a lot earlier than they ever would Harnessing synergies have done otherwise.” PAGE 14 2 – Keith Thompson, founding-CEO of the Cell Patient-centric, integrated and Gene Therapy Catapult care solutions

3 “ S weden is a small country, comprising 10 million people. The Swedes have very good stewardship around antibiotics and Applying Big Data and have very low levels of resistance, so their key issue is access.” advanced analytics PAGE 24 – Colm Leonard, consulting advisor at NICE 4 INFOGRAPHIC: PAGE 8

Empowering patients 42% 76 OF THE DRUGS THE NUMBER OF 5 APPROVED BY ORPHAN DRUG- THE FDA WERE DESIGNATED INDICATED FOR PRODUCTS APPROVED Value initiatives THE FIRST GENE AND CELL RARE DISEASES BY THE US FDA PAGE 34 THERAPY APPROVALS GRANTED IN 2019 FOR THE FIRST TIME BY THE FDA - SPARK THERAPEUTICS' BEVERLEY FRANCIS-GIBSON BETWEEN LUXTURNA AND NOVARTIS'S AND OTHER PATIENT ADVOCACY LEADERS COMMENT ON NEW JAN 2016 − JAN 2020 KYMRIAH - ARE BOTH INDICATED TREATMENTS FOR RARE DISEASES FOR RARE DISEASES ©2016 Informa Business Information, Inc., an Informa company March 2020 | In Vivo | 3 ❚ Around The Industry

Redbiotec Pivots Toward HSV-2 And Oncology

Redbiotec has reached a new inflection point as it progresses two key programs in her- collaborating on the next stage of develop- pes and cancer. The company’s CEO and CSO explain how it hopes to use bacteria as a ment, validation of Redbiotec’s approach in delivery system for genes or proteins to treat cancer. the clinic. Schaub said he was encouraged by big pharma maintaining a “watching Having successfully sold its cytomega- brief” in the area. lovirus vaccine business to Pfizer Inc. in A second therapeutic area that Red- 2015, Zurich, Switzerland-based Redbiotec biotec is exploring is the use of bacteria AG is again approaching key business in- to fight cancer. “We are convinced that flection points with the new technologies bacteria can play a major role in fighting it has in development. cancer,” said Schaub. “Some bacteria This time around Redbiotec is develop- have a natural tropism to proliferate at ing two potential technologies: a therapeu- tumor sites, and if we can engineer them tic vaccine for HSV-2, a viral infection that AG : Redbiotec to enter tumor cells and release agents to has proven difficult to address successfully trigger the effect you want, then we be-

with conventional treatment approaches; SOURCE lieve we have a powerful weapon to fight and the use of bacteria as delivery systems cancer alone, or work in combination with for genes and proteins to treat cancer. lead our business to a transaction with a chemotherapy,” he explained. Redbiotec was first spun out of the major pharmaceutical company. Our chal- Stergiou added that Redbiotec’s engi- Swiss science and technology university lenge was to find the next big thing.” neered bacteria accumulate in tumors be- ETH Zurich back in 2006. At that time, it One challenge that Redbiotec decided cause of their immunosuppressive, hypoxic was conducting research mainly into the to take on was finding a therapeutic vac- and nutrient-rich micro-environments, expression of multiprotein complexes, and cine, or immunotherapy, against HSV-2 and wild-type strains are used to which was backed by both institutional and pri- infection, or genital herpes, for which there patients should not have already mounted vate investors, including Zurcher Kantonal- is still no vaccine on the market and better an immune response. The bacteria are en- bank and a European seed and early-stage treatment options are needed. gineered to express a ligand, which means venture capital firm, Redalpine Capital. One of the key issues is recurrence, with they can bind to and get internalized within In the following years, Redbiotec col- patients suffering repeated bouts of infec- tumor cells, and also engineered to deliver laborated with a number of pharmaceuti- tion, indicating that they do not develop mRNA or protein cargo, which are then cal companies, and forged ahead with a an effective immune response against the released within the tumor cells. cytomegalovirus (CMV) vaccine project. virus, which is good at hiding in bodily tis- Other companies are evaluating the use “CMV is a very complex virus with mul- sue. And a number of biotech and pharma- of bacteria in cancer, although usually in tiple surface proteins and we were able ceutical companies have tried and failed to the cancer vaccine setting. to make protein complexes and virus-like move HSV-2 therapies through the clinic. The lead program Redbiotec is cur- particles that mimicked CMV,” recalled “People were focusing on the wrong rently evaluating is a candidate thera- Christian Schaub, co-founder, CEO and antigens for so long,” said Redbiotec’s peutic against pancreatic cancer, a president of Redbiotec. chief scientific officer, Lilli Stergiou. “HSV- tumor that is difficult to treat and has an Because the project was much further 2 is a complex virus because of the latency immunosuppressive micro-environment, ahead than others at the biotech, it was associated with it, and initially research- Schaub noted. spun out into a separate company, Redvax ers have concentrated on developing an The next few months are expected to be GmbH, which was then acquired by Pfizer antibody-based vaccine. But more recently, busy for Redbiotec; as well as fundraising for an undisclosed amount. researchers have started looking at T-cell- to develop two assets, an immunotherapy This event was a turning point for based approaches, with antigens that give against herpes and an oncology program Redbiotec. “Our shareholders, our inves- rise to strong cellular immune responses.” against pancreatic cancer, Schaub said he tors, got some return on their investment, Redbiotec believes it has come up with would be spending time identifying those and they reinvested in Redbiotec,” noted a combination of antigens that appear to pharmaceutical companies that might Schaub. “We had money from our investors be highly potent. benefit from Redbiotec’s technology. and also their trust, because they saw that Talks have started with investors and IV124467 we could develop something valuable and pharmaceutical companies on funding or JOHN DAVIS

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Are Incentives Out Of Balance With Patient Need?

Incentives matter; they motivate us to do things. There is renewed interest in just what When it comes to which targets to chase, motivates the life sciences industry to make the choices it does when determining the unmet need is relevant (see page 10), but diseases it will focus on, and how much effort it puts in. This stems from concern about so too are diminishing marginal returns to LEELA BARHAM too much effort going into some areas, and too little into others. R&D. “Companies have come out and said we are not going to chase targets in com- Concerns have emerged that today of the ODA by companies. In 2018, the US mon diseases, diabetes and heart disease, there are too many incentives for compa- Government Accounting Office looked into anymore because it’s now more challeng- nies developing orphan drugs – those to the processes used to give orphan drug ing to get results to prove efficacy and -ef treat rare conditions – to the cost of pursu- status by the FDA and found them wanting. fectiveness than it has been in the past,” ing the remaining unmet needs in some of Now in 2020, fresh concerns have been Nauman explained. Hutchings shares this the more common diseases. raised. Peter Bach, a physician working view, pointing out that “companies focus Rarity, in the past, was seen as prob- at the Memorial Sloan Kettering Cancer on where there is the most opportunity. In a lematic because the potential revenues Center in New York, said in an interview lot of common diseases there has been in- could be small. Specific policies have for WGBH that there is not enough at- novation over decades and it’s increasingly been introduced to make tackling rare tention being given to more common hard to chip away further at the remaining diseases economically attractive to the diseases including heart disease, cancer unmet need.” commercial industry. and diabetes. In 2020, there is no consensus on Under the US 1983 Orphan Drug Act Central to Bach’s view is presumably whether there is an imbalance when it (ODA) incentives include reduced regulato- that there is scarcity of R&D resources, comes to incentives for rare versus common ry fees and seven years of market exclusiv- and companies will inevitably look to conditions. Still, reforms are being put on ity. In Europe, the 2000 Orphan Regulation what seems to offer the best bang for the the table for the US. For Bach, value-based includes lower regulatory fees and 10 years buck. With prices for orphan drugs hitting pricing is part of the solution. market exclusivity. new records almost every launch, the idea Just as in the US, debate continues Many see the incentives for tackling that there are only modest revenues for on the incentives for orphan drugs in rare conditions and bringing orphan drugs tackling some of the rarest conditions now Europe. The European Public Health Alli- to market as successful. FDA stats show seems topsy-turvy. Novartis hit a new high ance (EPHA), a member-led group of non- that the Center for Drug Evaluation and asking for $2.1m for Zolgensma (onasem- government organizations, patient groups, Research (CDER) approved 125% more nogene abeparvovec-xioi) for babies with health professionals and disease groups, new orphan drugs during 2012–2019 than spinal muscular atrophy (SMA), an orphan called for changes to the EU orphan drug in 2004–2011 (142 products versus 63). In drug approved in the US in May 2019, but legislation because of concerns about gam- Europe, the nearest comparable figures not yet approved in Europe. ing. One of the reforms EPHA is seeking, is based on data from Orphanet show an in- Rob Nauman, a US based industry dropping the patent exclusivity term from crease of 268% from 2013 to 2019 versus expert at BioPharma Advisors, pointed 10 to six years. 2007 to 2012 (81 versus 22). out that while the economic incentives The EU is actively looking at the orphan Adam Hutchings, managing director of mattered, there was also real value be- legislation with some hoping that changing rare disease market access consultancy ing created with orphan drugs. He said, the legislation could change orphan drug Dolon, pointed out that this track record is “There’s a lot of venture capital in this pricing. The prospects are unclear with the very thing that policy makers wanted. space because there is the prospect of preliminary reports on options due out “The policies have worked pretty well. Com- charging millions of dollars for a product, during the first half of 2020, according to panies have responded to messages that but there is also interest in personalizing Hutchings. He also warned that if changes payers didn’t want ‘me toos’ but wanted treatments through understanding genet- are too harsh it could push the pendulum new drugs for rare diseases,” he said. ics. There’s tremendous value in creating a too far and put orphan drugs out of favor. The future looks rosy too with some treatment that can cure a patient.” “Prices for orphans need to be at a certain analyses putting worldwide sales of orphan There is potential value that can be level to make them economically sustain- drugs at $242bn by 2024. This is, in part, created too for more common condi- able – although companies should not be due to the higher prices orphans command. tions, according to Hutchings. He said, given a free pass. If price goes down, then Have the incentives for orphans been “If a company could make a cure for something else, like longer IP is needed too successful? Debate on the ODA has Alzheimer’s disease they’d be the wealthi- to balance it out,” he said. been ongoing since its introduction, but est life sciences company in the world.” Next steps in the US and Europe on there has been more intense scrutiny in re- Alzheimer’s affects around 44 million orphan drug changes are not immediate, cent years. Organizations like Kaiser Health people worldwide. There is currently no but it is clear that the debate will continue News, a non-profit news service, raised the cure. With many countries having aging and reform is likely to follow. profile of the US orphan drug incentives populations, the unmet need is only going IV124454 back in 2017. Their work suggested gaming to grow over time. LEELA BARHAM

Bringing A Different Science Into Solid Tumor Treatment

Depending on the regulatory jurisdiction, Nanobiotix’s radiation-activated cancer nano- Elsewhere, the company is doing tri- technology may be a drug or a device. But regardless of classification, it offers a physical als at other institutes across the world, solution to problems that chemistry and biology cannot solve. including Institut Curie, Paris, and with hospitals in Europe and the US. Nanobi- As far as unmet needs in health care otix’s partner company, PharmaEngine, go, nanotechnology company Nanobiotix is developing the technology in Asia. It SA (Paris, France, and Cambridge, MA) generates data and pays Nanobiotix, the has set out to address one of the biggest. IP-owner, milestones and royalties. This The clinical-stage company is pioneer- range of partners will help spread the use ing new approaches to the treatment of of indications and supplement the “lim- cancer, in the knowledge that, although ited resources” at Nanobiotix, a company 60% of cancer patients receive radiation of around 100 staff. therapy, its efficacy levels are uncertain. On the other hand, potential toxicity is a DEMONSTRATING MODE OF ACTION known risk. Critical for the company now is to dem- Nanobiotix’s solution is to use onstrate that the product, with its new nanoparticles to enhance the efficacy mode of action, works in a major disease: of radiation therapy in the treatment of the nanoparticles – “super absorbers” tumor cells, without increasing the dose of X-rays – are injected directly into the received by surrounding healthy tissues, tumor, once, before the first radiation says Nanobiotix CEO Laurent Levy. treatment, where they deliver a strong The premise of solving this unmet medi- dose of radiation to the tumor. “For grade cal need is to rely on physical rather than II or III sarcoma – a hard disease to crack – pharmaceutical or biological approaches in you get a complete pathological response developing a highly effective solution that multiplied by four,” Levy noted. also has broad clinical potential. Nanobi- The company’s Phase III STS trial otix’s product candidate is a first-in-class clearly established the mode of action of technology called Hensify/NBTXR3. “We the product. “But we needed an indica- believe that combined with radiotherapy, tion where we could demonstrate maxi- it can become a new standard of care in the mum medical benefit, in overall survival, treatment of cancer,” said Levy. “We have no competition progression-free survival and quality of Already with EU Phase III approval for life. Head and neck was perfect for that.” use in soft tissue sarcoma (STS) – as the but we need to work The head and neck market sees first radiotherapy enhancer to demon- 900,000 new cases per year in the US and strate clinically meaningful benefit for harder than others as Europe. Targeting the large population patients with locally advanced STS com- of frail, elderly patients who are unable pared with radiotherapy – the company there is no reference.” to receive chemotherapy or cetuximab is forging ahead with the next part of the in head and neck, Levy saw a “complete strategy. It will start applying the product – Laurent Levy and sustainable response.” Cancers were in head and neck squamous cell carcinoma being stopped and patients were able to (HNSCC) cancer. Promising results have eat and drink again, he said. been observed in a Phase I EU trial, and A good way of visualizing the value of the US FDA in February accorded it Fast the product to head and neck patients is Track designation, underscoring the per- that most of the head and neck patients ceived need for new treatment options for research deal covering nine new Phase I/ who receive radiation – 74% of the to- this patient group. II clinical trials in the US, across head and tal – get it as first-line treatment, said The Euronext Paris-listed company, neck, pancreatic, thoracic, lung, gastroin- Levy. There is no alternative to radia- not yet revenue-generating, has struck testinal and genitourinary cancers. “It’s a tion, surgery or chemo; and there are no an alliance with the University of Texas very strong collaboration that will provide pharma or biotech industry solutions for MD Anderson Cancer Center in Houston. a lot of feasibility data – every radiation first-line patients. “No one is targeting It is a large-scale, comprehensive, clinical oncology type is there,” said Levy. this patient group.”

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Nanobiotix has set a number of milestones this year in head and neck, and ❚ US FAST TRACK DESIGNATION the priority, as soon as the Phase III head and neck trials have started in the US Nanobiotix’s FDA Fast Track designation recognized the population-need for and Europe, will be to extend the product NBTXR3 – a viable option in a space where there is no solution. FDA Fast Track is a across oncology indications as soon as process designed to facilitate the development and accelerate the review of drugs possible. “We are waiting for feedback for serious conditions that have the potential to address unmet medical needs. from the FDA on the design of the trial, so The purpose is to expedite the availability of new treatments for patients. Eligible our timings are not yet known.” Europe products entitle the company to frequent FDA meetings and written communica- will follow, with the same trial (although tions on clinical trial design and the use of biomarkers. They are also eligible for the US study is classed as a pharma trial Accelerated Approval and Priority Review; and for Rolling Review, whereby as soon and the European version will be geared as they are complete, individual sections of the New Drug Application (NDA) can toward device approval). be submitted to the FDA. “We believe there is strong potential for reimbursement based on conversa- tions with the European Network for Health Technology Assessment [EUnet- project is now being run by wholly owned dismissed by physicians as impossible, in- HTA],” Levy said. Production is a second- Nanobiotix spin-out, Curadigm. stead it is viewed as having useful poten- ary issue for Nanobiotix at present. Nanobiotix is also running an immuno- tial. The reaction has been similar among oncology development program, having investors and the pharma industry. “We BROAD POTENTIAL received FDA approval for a clinical trial are really just at the birth of something Nanobiotix was incorporated in 2003 and of NBTXR3 activated by radiotherapy in big,” said Levy. has focused on realizing the potential of combination with anti-PD-1 antibodies in But Nanobiotix’s biggest advantage is NBTXR3 since 2007. In the interim, it has locoregional recurrent or recurrent and also its biggest hurdle: “We are different, built a network of affiliate companies in metastatic HNSCC. The IO program has alone, we have no competition,” he said, the US, France, Spain and Germany. Its the potential to bring a new dimension to adding “but we need to work harder than first positive Phase III US data came in cancer immunotherapies. others as there is no reference.” 2018, and EU CE mark approval in STS was The mixed classification of the technol- granted in 2019. “From concept to positive VALUE IS THE TARGET ogy alone – a drug in the US, a device in Phase III it was 10 years. We think we’ve The company will continue to seek EU and Europe – is an indication of the “new lim- been very efficient in developing this new US funding until it reaches sustainability its” approach Levy and his team are pur- concept, which could benefit millions of – but value, rather than sustainability, is suing with NBTXR3. However, the FDA and patients,” Levy said. Levy’s target: “As long as we move into EU agencies have been helpful in moving He explained that Nanobiotix has po- different indications, we are creating more the technology forward, as they can see tential beyond cancer. “It is one technol- value for everyone.” possibilities of serving large populations ogy for mass medicine – we can combine The company has 14 or more trials of patients with unmet needs. our product with radiation and, techni- ongoing in prostate, hepatocellular, liver, As to the company’s market strategy, it cally, it can work in any kind of cell.” For in- lung and rectal cancer, among others. plans to build its own direct sales capabili- stance, the company has been developing “We cover almost all solid tumors with ties, but will also reach out to the pharma a technology for CNS disorders, in a bid to our product. But technically, any patient industry, with which it is in discussions change the way the brain communicates receiving radiation could use its help.” at present. “Ideally, we would like to be a from one neuron to another. The product’s It is a new concept, but not necessar- tumor-agnostic company, and given the physical mode of action points to applica- ily a new idea. “If you want change, you potential of the product, we would need tions in Alzheimer’s disease, Parkinson’s need to bring another science into the a good number of partners on a non-ex- disease and dementia generally. game. That’s what we did by bringing clusivity basis,” said the chief executive. Another application is what Levy calls nanotechnology and physics into the biol- The product was, in fact, showing the “nano-chewing gum” – an intravenous ogy game,” Levy explained. The company very highest value in oncology – in its (IV) injection technology that occupies the has looked at the problem from a differ- impact on patient survival, he said. “Our liver while the drug is circulating. Often ent angle, and found that it could use the healthtech industry experience has told only a very small part of a drug reaches same target for many different drugs. “We us that the revolution never comes from its target. Now, the drug can be more have no competition, and looking at the the players already in place,” Levy noted. effective because a lower proportion will problem from the physical angle, we think “We are close to a point where our product be retained by the liver while the nanopar- that with one technology we can treat mil- is recognized as beneficial for the whole ticles are present. The principle is: the lions of patients.” oncology world.” same amount of drug, more efficacy; or Market response so far has been cau- IV124464 less drug, same efficacy, said Levy. “It can tious but encouraging. While still seen as ASHLEY YEO apply to every product out there.” This “revolutionary,” the concept is no longer

76 KEY FDA APPROVALS FOR RARE DISEASE PRODUCTS SINCE 2016 “Zolgensma represents a 4/11/16 2/25/2018 breakthrough toward the promise THE NUMBER OF ORPHAN VENCLEXTA EPIDIOLEX of safe and effective gene DRUG-DESIGNATED  therapies, and it may catalyze the Chronic Lymphocytic Leukemia/ Dravet Syndrome/Lennox-Gastaut Syndrome PRODUCTS APPROVED Small Cell Lymphocytic Lymphoma development of other gene 8/23/2018 therapies to treat a range of rare BY THE US FDA FOR THE Noteworthy: First FDA-approved treatment that TAKHZYRO neuromuscular diseases.” FIRST TIME BETWEEN targets the B-cell lymphoma 2 protein, which JAN 2016 − JAN 2020 supports cancer cell growth and is overexpressed Hereditary Angioedema LYNN O’CONNOR VOS in many patients with CLL Noteworthy: First monoclonal antibody approved PRESIDENT & CEO in the US to prevent severe swelling in patients MUSCULAR DYSTROPHY ASSOCIATION 12/19/16 12 years and older RUBRACA Ovarian Cancer 5/24/2019 MAKING PROGRESS AGAINST Noteworthy: Concurrent approval was granted ZOLGENSMA for the FoundationFocus CDxBRCA companion Spinal Muscular Atrophy  diagnostic, the first next-generation-sequencing RARE DISEASES companion diagnostic approved by the FDA 8/2/2019 BIOPHARMACEUTICAL COMPANIES DOUBLED DOWN ON RARE DISEASE TREATMENTS TURALIO 3/30/2017 DURING THE LAST FIVE YEARS,THANKS TO A POTENT COMBINATION OF SCIENTIFIC Pigmented Villonodular Synovitis DISCOVERY AND APPEALING BUSINESS INCENTIVES. TAGRISSO Noteworthy: First systematic therapy Non-Small Cell Lung Cancer approved for patients with symptomatic Noteworthy: First approved medicine in the US tenosynovial giant cell tumor indicated for NSCLC patients who have tested “Sickle cell disease is a devastating, lifelong, 10/21/2019 positive for the EGFR T790M mutation 42% inherited blood disorder ... After decades of TRIKAFTA OF THE DRUGS waiting, we now have a treatment option that 8/1/2017 Cystic Fibrosis  could change the course of this disease.” KYMRIAH APPROVED BY 11/25/2019 BEVERLEY FRANCIS-GIBSON Acute Lymphoblastic Leukemia THE FDA WERE PRESIDENT & CEO Noteworthy: OXBRYTA INDICATED FOR SICKLE CELL DISEASE ASSOCIATION First FDA approved CAR-T cell therapy Sickle Cell Anemia , RARE DISEASES OF AMERICA IN 2019 11/16/2017  “This is a moment to celebrate and to reflect on HEMLIBRA how working together, and against great odds,  “For those living with intractable we have effectively transformed a genetic THE FIRST GENE AND CELL Hemophilia A seizures caused by Lennox- disease in a single generation, making CF the THERAPY APPROVALS GRANTED Noteworthy: First new drug Gastaut Syndrome and greatest story in medicine. As we celebrate, we class targeting hemophilia BY THE FDA - SPARK THERAPEUTICS' Dravet syndrome, Epidiolex also vow to intensify our focus on finding a approved in 20 years LUXTURNA AND NOVARTIS'S represents a true medical therapy for every individual in our community KYMRIAH - ARE BOTH INDICATED advancement.” who is still waiting for a breakthrough.” FOR RARE DISEASES PHILIP GATTONE MICHAEL BOYLE PRESIDENT & CEO SOURCES: Biomedtracker; Cystic Fibrosis Foundation; Epilepsy Foundation; PRESIDENT & CEO FDA; Muscular Dystrophy Association; Sickle Cell Disease Association of America EPILEPSY FOUNDATION 8 | In Vivo | March 2020 invivo.pharmamedtechbi.com CYSTIC FIBROSIS FOUNDATION DESIGN: Gayleinvivo.pharmaintelligence.informa.com Rembold Furbert/Informa Pharma Intelligence Design Team UNMET NEEDS IN 2020: Infographic ❚

76 KEY FDA APPROVALS FOR RARE DISEASE PRODUCTS SINCE 2016 “Zolgensma represents a 4/11/16 2/25/2018 breakthrough toward the promise THE NUMBER OF ORPHAN VENCLEXTA EPIDIOLEX of safe and effective gene DRUG-DESIGNATED  therapies, and it may catalyze the Chronic Lymphocytic Leukemia/ Dravet Syndrome/Lennox-Gastaut Syndrome PRODUCTS APPROVED Small Cell Lymphocytic Lymphoma development of other gene 8/23/2018 therapies to treat a range of rare BY THE US FDA FOR THE Noteworthy: First FDA-approved treatment that TAKHZYRO neuromuscular diseases.” FIRST TIME BETWEEN targets the B-cell lymphoma 2 protein, which JAN 2016 − JAN 2020 supports cancer cell growth and is overexpressed Hereditary Angioedema LYNN O’CONNOR VOS in many patients with CLL Noteworthy: First monoclonal antibody approved PRESIDENT & CEO in the US to prevent severe swelling in patients MUSCULAR DYSTROPHY ASSOCIATION 12/19/16 12 years and older RUBRACA Ovarian Cancer 5/24/2019 MAKING PROGRESS AGAINST Noteworthy: Concurrent approval was granted ZOLGENSMA for the FoundationFocus CDxBRCA companion Spinal Muscular Atrophy  diagnostic, the first next-generation-sequencing RARE DISEASES companion diagnostic approved by the FDA 8/2/2019 BIOPHARMACEUTICAL COMPANIES DOUBLED DOWN ON RARE DISEASE TREATMENTS TURALIO 3/30/2017 DURING THE LAST FIVE YEARS,THANKS TO A POTENT COMBINATION OF SCIENTIFIC Pigmented Villonodular Synovitis DISCOVERY AND APPEALING BUSINESS INCENTIVES. TAGRISSO Noteworthy: First systematic therapy Non-Small Cell Lung Cancer approved for patients with symptomatic Noteworthy: First approved medicine in the US tenosynovial giant cell tumor indicated for NSCLC patients who have tested “Sickle cell disease is a devastating, lifelong, 10/21/2019 positive for the EGFR T790M mutation 42% inherited blood disorder ... After decades of TRIKAFTA OF THE DRUGS waiting, we now have a treatment option that 8/1/2017 Cystic Fibrosis  could change the course of this disease.” KYMRIAH APPROVED BY 11/25/2019 BEVERLEY FRANCIS-GIBSON Acute Lymphoblastic Leukemia THE FDA WERE PRESIDENT & CEO Noteworthy: OXBRYTA INDICATED FOR SICKLE CELL DISEASE ASSOCIATION First FDA approved CAR-T cell therapy Sickle Cell Anemia , RARE DISEASES OF AMERICA IN 2019 11/16/2017  “This is a moment to celebrate and to reflect on HEMLIBRA how working together, and against great odds,  “For those living with intractable we have effectively transformed a genetic THE FIRST GENE AND CELL Hemophilia A seizures caused by Lennox- disease in a single generation, making CF the THERAPY APPROVALS GRANTED Noteworthy: First new drug Gastaut Syndrome and greatest story in medicine. As we celebrate, we class targeting hemophilia BY THE FDA - SPARK THERAPEUTICS' Dravet syndrome, Epidiolex also vow to intensify our focus on finding a approved in 20 years LUXTURNA AND NOVARTIS'S represents a true medical therapy for every individual in our community KYMRIAH - ARE BOTH INDICATED advancement.” who is still waiting for a breakthrough.” FOR RARE DISEASES PHILIP GATTONE MICHAEL BOYLE PRESIDENT & CEO SOURCES: Biomedtracker; Cystic Fibrosis Foundation; Epilepsy Foundation; PRESIDENT & CEO FDA; Muscular Dystrophy Association; Sickle Cell Disease Association of America EPILEPSY FOUNDATION ©2018 Informa Business Information, Inc., an Informa company CYSTIC FIBROSIS FOUNDATIONMarch 2020 | In Vivo | 9 DESIGN: Gayle Rembold Furbert/Informa Pharma Intelligence Design Team ❚ UNMET NEEDS IN 2020: R&D Strategies Defining Go And No-Go Disease Areas As An R&D Business

Some believe unmet need refers only to rare diseases and tiny patient populations. But it is more than this. In 2020, the term sits at the heart of decision-making for drug makers – along with cost, access and value, of course.

BY ED SILVERMAN t first blush, the antibody looked promising and Chris Garabedian was optimistic it could be a winner. The calculus used to make fateful go or The molecule was advanced enough to be ready for clinical testing, no-go decisions about medicines that the management team was strong and, initially, there seemed to be suf- could solve an unmet medical need is ficient upside to invest. Although there are plenty of multiple sclerosis difficult to define. Atreatments on the market, by his reckoning there is room for still another medication to tackle what is known as relapsing remitting MS, which is when the disease flares up. The phrase unmet need generally refers But after mulling it over yet again, he passed. to ailments without a salve. However, “It was just too risky,” said Garabedian, who once ran Sarapta Therapeutics, a rare the term is also increasingly used to disease drug maker, and is now chief executive officer at Xontongeny, which provides describe rare diseases, which address a decidedly narrower but potentially funds and guidance to early-stage life science companies. “There could have been lots lucrative patient population. of upside if it worked. But when you’re in the early stages of developing a drug and don’t have a clinical data set, it’s all about the probability that it will work.” The challenge is in balancing pressure Garabedian continued: “In this case, even if this target and technology was suc- from investors – and in large companies, cessful, we weren’t convinced. I mean relapsing remitting MS still has unmet need. It from the commercial side – to explore all depends on how you want to define an unmet need, but if you talk to any patient, certain diseases at the expense of there’s still a lot of room to improve on tolerability and toxicity. But we found that others. lupus had a bigger unmet need with fewer failures in the clinic than MS. In a way, there’s a ranking order.” Such is the calculus used to make those fateful go or no-go decisions about medicines that could solve an unmet medical need (see Exhibit 1), a phrase that generally refers to ailments without a salve. However, the term is also increasingly used to describe rare diseases, which address a decidedly narrower but potentially lucrative patient population. Although the phrases are sometimes conflated, the emphasis has helped

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transform the prism through which drug them, according to IQVIA, the market patient families and their supporters development is viewed. research firm. Nonetheless, rare disease in Congress, this was hardly the only drugs, which are also known as orphan instance in which the regulator was set How Unmet Need Has Changed drugs, are anticipated to comprise one- to hasten an approval. The Sarepta drug, Over the past decade, in fact, rare disease fifth of worldwide prescription sales and which ultimately became available in drugs – which in the US are approved to amount to around $242bn in spending in 2016, had been granted accelerated ap- target maladies affecting 200,000 people 2024, according to market analysts. proval. Like a related status called fast or less and fewer than five in 10,000 The reason, of course, is that many of track, this FDA designation refers to people in the European Union – have the treatments are priced at levels that medicines that treat unmet needs. And become something of a phenomenon are designed to generate a hefty return plenty of medicines have been granted and overtaken the notion of meeting despite a relatively small number of such status in recent years. unmet needs more broadly. This reflects patients. Sarepta, for instance, charged Here are a few numbers: the FDA des- a serendipitous convergence of scientific about $300,000, depending upon patient ignated 17 of 48 novel drugs, or 35%, in advances, pent-up investor demand, and weight, for its drug for Duchenne mus- 2019 as worthy of fast track status and ap- subsequent flexibility in regulatory think- cular dystrophy, which affects approxi- proved nine of those medicines, or 19%, ing about medical evidence and drug mately 1 in 3,500 male births worldwide. under the accelerated approval program. approval standards. The betting, of course, is that payers Ultimately, 21 of the medicines were ap- “The definition of unmet need has will cover such drugs if they recognize proved to treat rare, or orphan, diseases. changed, or at least expanded,” said they are likely to have few beneficiaries The pattern has been consistent in Robin Feldman, a professor at the UC requiring such medications. recent years, too. In 2017, 18 of 46 novel Hastings College of Law in San Francisco The Sarepta drug approval also exem- drugs were fast tracked by the FDA, and director of the Center for Innovation, plified an evolving regulatory view to- which greenlighted a half dozen under who has written Drugs, Money & Secret ward unmet needs. A behind-the-scenes accelerated approved, with 18 approved Handshakes: The Unstoppable Growth drama erupted among high-ranking to treat rare diseases. In 2015, fourteen of of Prescription Drug Prices. “Often, some staffers inside the Food and Drug Ad- the novel drugs, or 31%, were designed people will say unmet needs refer to rare ministration over whether the medicine, as fast track, with six endorsed under diseases and so we think of tiny patient known as Exondys 51, should have been accelerated approval and 21 approved to populations, although it really is more approved due to disagreements over the treat a rare disease. than that. And it has become a huge validity of certain data in one small clini- The trend has clearly presented op- business.” cal trial. The controversy raised questions portunities for drug companies – big and As of 2018, there were roughly 7,000 about the extent to which satisfying an small – to focus more resources on such recognized rare diseases affecting up to unmet medical need might require a new patient populations. In fact, the number 30 million people in the US alone – more approach to approval standards. of orphan drug designation requests has than half of whom are children – but But while the high-profile dispute steadily increased from 2012 through 2016 treatments were available for just 5% of underscored mounting pressure from and has remained greater than 500 annually for the past four years, according Exhibit 1 to the FDA. In 2019, the Office of Orphan A Basic Drug Development Risk: The Result And Thus The Return Is Products Development received 533 new Unknown Until The End Of Development requests for designation, a 5% increase from 2018. “This reflects instructions that FDA Blockbuster was given by Congress through legislation that requires the agency to take a Approvable safety & ecacy in large human trials different approach toward approvals,” Good drug said Ira Loss of Washington Analysis, Statistically signicant ecacy in humans who tracks regulatory and legislative developments affecting the pharmaceutical Proof of concept safety & ecacy industry for investors. “The 21st Century in humans Specialty drug Cures Act was designed to speed [drug] approvals and unmet medical needs were the impetus for the legislation. And of Preliminary safety in humans Not approved course, investors like the sizzle.” Preclinical toxicology shown A Perfect Formula Does Not Exist Lead candidate identied 11 Yet despite more receptive regulators, large fund investors eager for bigger SOURCE: Cognition Therapeutics returns, and growing piles of venture

capital, settling on an appropriate drug Exhibit 2 and target is not always straightforward US Health Care Spending Versus US Venture Funding and there is really no formula that can be readily applied, according to John Cancer LaMattina, a former head of research and development at Pfizer, who now sits on the board of PureTech Health, a clinical stage company that seeks to develop medicines for hard-to-treat diseases. “I’m not sure every company does it the same way,” he said. “At Pfizer, the commercial team had a pretty big influence on what was worked on. The research Obesity Addiction teams would work on projects and when Heart Disease Diabetes you got something into humans, then you Respiratory would start attracting their attention. But Psychiatric Pain

Venture Funding 2008-2017 ($bn) 2008-2017 Funding Venture Dementia even before getting to the next stage, we $ think about whether it would be useful $ and if the commercial team would do US Health Care Direct Costs ($bn) an analysis and express an interest. You had to think about the competition out there, weaknesses in those drugs, what SOURCE: Cognition Therapeutics your program hopes to accomplish with this new approach, and what else is in Alzheimer’s treatment. “But the reality of reasons for that,” said Jeffrey Aronin, this area?” is that there are highly prevalent chronic CEO at Paragon Biosciences, which in- The bigger pharmaceutical companies, diseases for which therapies exist but vests in and launches drug companies to he continued, were largely concerned are insufficient for many patients. And develop novel therapies for severe medi- with medicines that aligned with exist- these are large patient populations with cal conditions that do not have adequate ing product portfolios. There may be an absolutely unmet needs. But even if these treatments. “As someone investing in unmet need to treat Alzheimer’s disease, are treatments, and not cures, does that these companies, I want to know if the for instance, but developing a treatment mean research should not continue?” unmet need is important. Some of the to cure or mitigate the effects of this “The issue is how much pressure is patients with unmet needs are costing the particular disease may be too high a there from investors – and in large com- system more than the medicines cost.” risk, given that the field has been littered panies, from the commercial side – to Aronin said he worked backwards. with clinical trial failures. More broadly, explore certain diseases at the expense “We want to know if there is currently though, a growing number of the largest of others? There is a profit motivation, no available treatment or if what is avail- drug makers have been exiting neuro- after all. Everyone is looking for the best able is unsatisfactory,” he said. Aronin science altogether, despite many unmet return on investment and the pressure is wants to see a scientific thesis, a patient patient needs. overt. If I’m an investor or I’m beholden to need, but also a commercial thesis. “We Smaller companies should take note investors, I’m going to go with the highest also have to determine whether we can that venture funding for oncology has probability of an extraordinary return. So develop it, manufacture it and get it ap- outstripped money invested in various we’re letting economics dictate the fund- proved.” prevalent chronic diseases – such as ing of drug development.” diabetes, obesity, depression, pain, ad- This reality also shapes decisions made Getting The Data And diction, heart disease and Alzheimer’s by small, early-stage companies, since Securing A Price – by large margins (see Exhibit 2). In fact, their playbook often calls for developing Although regulators may be more recep- approximately 20% of all investments in a compound – often, the only compound tive to medicines for unmet needs – cer- life sciences treatments were directed in its labs – and eventually seeking to sell tain cancer treatments, for instance, have toward oncology in 2018, given the huge their company to a larger drug maker. But been approved with single-arm clinical unmet need to tackle so many different given the propensity of big drug makers to trials – Aronin also pointed out that the cancers, according to the Biotechnology focus on specific therapeutic categories, a investment needed for clinical testing Innovation Organization. smaller company must tailor its decisions can be daunting. There are never any “Oncology is really a series of rare toward a buyout or convince its investors assurances that a drug will pass muster, diseases and unmet needs,” said Ken that a payout is possible by pursuing a even if a regulator indicates approval may Moch, who has led several biotechs and particular disease and unmet need. be possible. And sometimes the costs of is currently chief executive at Cognition “I think it’s an area that most smaller running the necessary clinical trials can Therapeutics, which is developing an companies get wrong and there are a lot quickly dampen enthusiasm. Budgets are

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budgets, after all. label. When you combine this scenario Clinical trials for rare disease drugs with accelerated approval, companies take 131 months on average to complete, and patients are hoping for access in ad- 68% longer than for medicines developed vance of long-term safety and durability.” to target other diseases and 41% longer As a result, payers are trying to reposi- than for all cancer-related diseases, ac- “ The reality is we tion themselves as more medicines for cording to an August 2019 report issued unmet needs become available, accord- by the Tufts Center for the Study of Drug don’t want trial ing to Randy Vogenberg, a principal at Development, a think tank that is funded, the Institute for Integrated Healthcare, in part, by drug companies. results that make a consulting and research firm that spe- And while regulatory reviews finish cializes in health plan benefit designs. four months faster for rare disease drug specific designs and Beyond clarity around safety and efficacy applications than therapies for other data, payers want to distinguish between maladies, the overall time spent on rare don’t necessarily medicines that are truly innovative – disease applications run four years lon- such as curing a disease – and those that ger than for all other diseases. Moreover, match the FDA label. are simply enhancements. 81% of patients screened for clinical trials “You can have a drug for a rare con- for rare diseases are not eligible to enroll, When you combine dition or unmet need, whichever term and 56% fail to be randomized. This is in applies, but does it really make a differ- stark comparison to the 57% screening this scenario with ence? Does it change the quality of life? rates and 36% randomization failure There are treatments for hemophilia, for rates for other diseases. However, drop- accelerated instance, but will a gene therapy offer a out rates are lower in rare disease trials. quantum leap and not just manage the There is another looming factor to approval, companies disease? That could be a game changer,” consider, of course, as companies make he said. “So companies have to be will- development decisions: will payers bite? and patients are ing to provide not just enough trial data Perhaps the most pressing issue facing but real-world evidence to confirm the the pharmaceutical industry is the abil- hoping for access in claims. There is going to be a lot more ity to convince payers that reimburse for rigor around such things.” medicines that increasingly carry high advance of long- Indeed, these are among the factors prices tags – whether newly launched or that are increasingly giving biopharma existing treatments for which list prices term safety and execs and investors pause as they assess are increased. As more medicines for molecules and marketplaces. Yet despite unmet needs, notably rare disease drugs, durability.” scientific advances – such as precision win approval, the issue is a key point of medicine – patients will continue to debate and speculation. clamor for help in addressing their unmet Of course, more payers are willing to medical needs. And this presents op- consider outcomes-based or value-based portunities to fine tune decision making agreements in which the drug maker and goals. may offer a rebate if its medicine fails “If we believe in the technology and to perform as advertised. In some cases, we have a drug that will make an impact payments may be spread out over time, and be the best in class, we may go which is increasingly being considered after crowded disease areas, because for pricey new gene therapies. But one we think we have something better,” payer complains that the deals are, by said Garabedian. “But there’s always a and large, insufficient to create a reliable tradeoff. Do we go for the bigger unmet template, partly because there is more need, but where there is a higher chance desire to see longer term data to back up of failure? Or do we pursue some unmet claims in product labeling. need with a higher likelihood of success? “Generally speaking, the marketplace Every company has grappled with that wants payers to cover everything, but no quandary when making decisions. And one has figured out how to do a bona fide it’s only going to get more exquisite.” value-based agreement,” a chief medical IV124468 officer at a pharmacy benefits manager told In Vivo. “The reality is we don’t want trial results that make specific designs Comments: and don’t necessarily match the FDA Email the editor: [email protected]

Founding CEO of the UK’s Cell and Gene Therapy Catapult, Keith Thompson, will retire from the company this year. He looks back on the last eight years of progress for CGT Catapult and the advanced therapies sector – and provides words of wisdom for the challenges still to come.

KEITH THOMPSON

BY LUCIE ELLIS hompson started his career in the biopharma industry, focused on biologics and monoclonal antibodies. However, in 2003 he took over the Scottish At the start of April, Keith Thompson Blood Transfusion Service. “I set about doing a whole range of things, will step down as CEO of the Cell and modernizing the service, dealing with the variant CJD [Creutzfeldt-Jakob Gene Therapy Catapult (CGT Catapult), disease crisis], for example,” Thompson told In Vivo during an interview a global leading institute in the field of at Guy’s Hospital in London, home of CGT Catapult. advanced therapies, having held the T “Among all the stuff that the Scottish Blood Transfusion Service was doing they position since 2012. had a good research group. Within that research group there were several advanced therapy projects, everything from trying to make red blood cells from embryonic stem He sat down with In Vivo to talk about cells, through to making corneal limbal stem cell graphs for blindness,” he explained. the development and growth of CGT Catapult, actions the UK advanced The service put together one of the very first Epstein-Barr virus (EBV)-transformed T therapies sector still needs to take and lymphocyte banks for the treatment of post-transplant lymphoproliferative disorders. the future for cell and gene therapy. When the idea of a Catapult in the UK for advanced therapies was first mentioned, the organization was being called a “Technology Innovation Center.” The idea was to A state of the art, GMP manufacturing propel the creation of a new industry by bridging the gap between research and full- facility, which opened in Stevenage in scope commercialization, Thompson noted. “It seemed to me that the whole sector 2018, is a legacy Thompson is proud had been on the verge of doing something for years. I was very keen on using all the to leave behind as he moves on to new experience I’d had in both the blood transfusion service and in industry, particularly roles. in monoclonals, to help stimulate the growth of an industry.” When Thompson was appointed CEO of the “Catapult” in 2012, he was “pretty much given carte blanche to write a business plan to create a sector. I initially asked for £70m [$90.5m] and managed to secure that. Then we started developing all the assets that we have.” In 2012, Thompson said there was not much of an industry for cell and gene thera-

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pies. “There was quite a lot of academic Exhibit 1 activity. There were a few pioneering Research Hotspots Throughout The UK firms. But essentially it was regarded as a sector that was too risky to attract the kind of venture capital that would be able to stimulate the growth of an industry,” he explained. Thompson focused on a key question: “Why is an industry that has the potential to transform health care stuck?” Glasgow Edinburgh Three Main Problems When creating CGT Catapult eight years Newcastle Belfast ago, Thompson set out with a plan to tackle three key issues that were prevent- Leeds ing the development of a strong advanced therapies market in the UK. Liverpool The first problem was uncertainty Manchester around regulation in clinical trials. At Keele Notingham the time, “there was an absolute maze of regulations and different bodies. It Birmingham Cambridge took over a year to get through that maze Cardi to even get anywhere near a trial, going Oxford through the various labyrinthine pro- London Bristol cedures. Even if you got a regulatory go ahead, the hospitals did not really know Southampton how to run the trials,” Thompson noted. The second group of problems was focused on the question: “How to make group and a business and health care constrained.” Thompson found that the a living medicine?” Industries were used economics group. The largest of these sector was receptive to his plans to speed to “making pills, potions and biologics” focused on the essential issue of manu- up processes for clinical trials. but facilities were not in place to develop facturing – an area that is still evolving “I said, ‘We’ll set up a one-stop shop cells as products and make them consis- for cell and gene therapy developers for advanced therapies.’” He added that tently to GMP standard. years later. clinical trial regulatory time scales had The third key challenge centered on come down from over a year to less than health economics. “By and large, modern Setting Goals two months. medicines, apart from antibiotics and one Thompson set a target for CGT Catapult to Early on, the CGT Catapult team spent or two other treatments, don’t really cure help foster a £10bn market. “We planned time taking stock of the number and type you of anything. Most medicines keep to measure things like company growth, of facilities in the UK. It found there was a the disease at bay.” In 2012, health care the number of companies, the amount good stock of small-scale academic facili- systems were not used to the idea that a of money that they attracted and rise in ties, but there was a need to expand these one-off treatment could cure a patient. employment,” he noted. At the end of offerings. “I was able to go to government “How would you pay for this one-off 2019, there were 70 cell and gene therapy to make the case for investing in a large- therapy; these things were going to be companies operating in the UK: 56 with scale center.” In the 2014 government expensive.” UK headquarters and 15 international budget, £55m was granted to build what Thompson’s goal when establishing companies with a UK presence. Across has become the CGT Catapult manufac- CGT Catapult was to make the UK the Europe and Israel, there are more than turing center in Stevenage.” place to have a new industry – a place 230 active advanced therapy companies, This investment was critical. Feedback where businesses could launch, grow but the UK has the major share. from venture capitalists at the time was that and confidently develop their advanced Another thing he was keen to measure while interest in the cell and gene therapy therapies and be able to deliver them to was the number and stage of clinical space was strong, the risks were high and patients. trials for advanced therapies in the UK. the facilities were lacking. “They said, He began by creating three groups. “I “We were very fortunate, there was a ‘Well, we like the space, but apart from all got experienced industry executives in lot of interest in the sector from stake- the other risks, every group that wants to to help me and they’ve been fantastic.” holders in the research councils and spin out wants £25m to build a factory and He organized a manufacturing technol- in government. The environment was we’re venture capitalists, we’re not in the ogy group, a clinical trial and regulatory positive but the ability to get it done was bricks and mortar business.’”

Exhibit 2 issues are still top of the list. “It’s a jour- The Growing UK Cell And Gene Therapy Industry ney from handcrafted products that were made to treat a handful of patients, to the 2012 future of highly automated manufactur- 2019 Onwards ing that can bring the costs of goods right down. We are probably about halfway 22 70 through that journey,” Thompson noted. companies rapidly growing companies He believes there are about another 10 years of work until these products can be £35m+ £2.5bn+ made at a cost that allows them to be truly accessible to all. However, Thompson investment attracted investment received by cited Oxford BioMedica as an example by UK companies UK companies of progress, calling the company “probably the world’s best manufacturer of 21 80+ lentivirus.” That company now employs clinical trials clinical trials around 500 people across several sites. A few years ago, it had a team of just 100. 11 >23 But, Thompson said, there is “a huge manufacturing facilities GMP facilities with the CGT amount of work still required on the totaling 5,900m2 Catapult manufacturing center manufacturing side.” providing an extra 7,000m2 Another area that continues to evolve is clinical practice. “You simply can’t put 540 +18,000 these therapies through a wholesale dis- jobs jobs by 2035 tributor into a pharmacy and then wait a year for a junior doctor to prescribe them. We worked on this with Innovate UK to define a program for advanced therapy SOURCE FOR ALL EXHIBITS: Cell And Gene Therapy Catapult treatment centers, which have now gone into three major locations across the UK.” Although that was true, it was about their analytical methodologies, but also Thompson said work remains for CGT more than bricks and mortar. These aspir- “to show that even the National Health Catapult on developing systems for rou- ing start-ups saw the intrinsic value in the Service [NHS] would pay for outstanding tine delivery of advanced therapies at way that they manufactured therapies, clinical benefits.” scale. “If you’re trying to treat 50 cancer and they wanted to be able to rapidly Around 2014/2015 the world started to patients it’s relatively straightforward control the process, Thompson noted. see “really outstanding clinical results to get that done, but if you want to treat “We came up with the idea of the Steve- across cell and gene therapies” and cash 5,000 patients that’s a lot of work.” There nage facility, which was a collaborative started to pour into advanced therapy is development needed on aspects such approach to manufacturing where these companies around the globe, Thompson as patient registries and technologies to firms would be able to actually operate said. “We created a strong environment track and trace treatment. their own processes and be fully sup- for developing cell and gene therapies A handful of cell and gene therapies ported by us, whether it was advanced in the UK, and the UK certainly became have been approved in the US and Europe quality systems or supply chain,” he said. the leading cluster within Europe, and in the last couple of years, but there are Thompson calls the Stevenage manu- probably the third largest cluster glob- hundreds of product candidates on the facturing center his greatest achieve- ally – alongside Boston and California.” horizon. “The next big move is going to ment. “It has been transformational for be the gradual transition from the rare the UK market. It has unlocked hundreds Work To Be Done ultra-orphan diseases to diseases with a of millions of pounds in investment by CGT Catapult has named Matthew Durdy higher incidence,” Thompson said. “The venture capitalists, and accelerated firms as its next CEO. Currently, the chief great thing is, not only are the science to get into manufacturing at scale a lot business officer for the organization, and investment looking good, but the earlier than they ever would have done Durdy will take over from Thompson in appetite of health systems – including otherwise.” April 2020. the NHS – to gear themselves up to deliver As well as the development of the In words of wisdom to a successor, these seems quite remarkable.” Stevenage site, CGT Catapult began Thompson said: “You have a great foun- Still, Thompson predicts that invest- working with the UK pricing and reim- dation, build on it.” While there is now a ment in the cell and gene space will bursement watchdog NICE to run mock good stock of companies in the UK work- slow down soon. “Money has continued health technology assessment (HTA) ap- ing in cell and gene therapy, there remain to pour into the sector, particularly over praisals on CAR-T therapies to fine-tune challenges to overcome. Manufacturing the last few years. I can’t imagine it will

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keep going at the same rate. Everything slows down. But there is a good stock of well-funded companies now, in the UK and globally.”

Getting Therapies To Patients “The real acid test over the next two to three years is going to be how these products are adopted and accepted by patients, because that’s going to be the real proof of the pudding,” Thompson believes. Cell and gene products approved to date all target relatively low incident diseases, so while they have been costly treatments the overall budgetary impact has been modest. “Health systems are geared to be able to deal with that,” Thompson said. He added that there would always be an argument over price “because that’s the way the world is,” but and the current treatments available for ❚ STEVENAGE so far this has not prevented the products that condition. “It will be interesting to MANUFACTURING CENTER being adopted. see companies navigate this path and to “As companies move into larger-scale see what the patient demand for these 7,700m2 manufacturing indications then the development of therapies looks like.” center designed specifically payment over time, or risk share models, for cell and gene therapies will be a key feature of the landscape,” Lessons From A CGT Leader Thompson said. “To really perform at “I’ve learned a lot over the years and for 12 segregated large clean scale, then treatments will have to get me the key to success is focus, focus, cheaper. The sector has to work out how focus. Stakeholders will respond to a room modules to manufacture them cheaper.” compelling vision and actually buy into Another challenge when moving into practical ways of moving it forward,” Secure supported disease areas with higher incidence, Thompson said. collaboration model is that many of these conditions will He added that communication is cen- have other treatment options available. tral to getting that kind of buy-in from Center of a cell and gene Thompson noted that when a patient stakeholders. “You need to be able to en- therapy cluster in UK would otherwise die or suffer a long- gage with that compelling vision of how lasting illness – as with a number of the it can be and of course, the great thing is rare diseases being targeted by cell and that the advanced therapies sector is now gene therapy developers today – then set to become the fourth major pillar of the clinical decision is easier to make. health care, globally.” “If you’ve then got a gene or cell therapy As CGT Catapult moves into the 2020s, safe and efficacious, Thompson warned for a disease where there are alternative a new era for cell and gene therapies against “letting up” on a cautious ap- treatments, then the data around the worldwide, Thompson said its role will proach to their adoption. “Nobody wants benefit [cost benefit and patient benefit] be to anchor large-scale industry. “The to have a major safety failure.” This con- are really going to have to be strong.” role is to take all of this current growth cern is something he keeps front of mind. For example, in hemophilia it would and actually turn it into an industry that Thompson will step down as CGT Cata- be an easy clinical decision to try a gene sticks long term in the UK, rather than pult’s CEO in a few weeks. After taking a therapy for somebody who has a really one that just gets to a point and dissi- well-earned break, he plans to work in severe case where bleeding is a real prob- pates. This is why manufacturing is so a non-executive or board capacity in a lem, Thompson said. But with a hemo- important because manufacturing is an small number of high-quality companies. philiac whose disease is well-controlled anchor of long-term value.” “That’s my next task, to try to find the on recombinant clotting factors, “you’re He expects CGT Catapult to continue fo- right companies that would perhaps get going to have to work through a lot of cusing on “lowering treatment costs and some benefit from the experiences I’ve cautious clinical adoption to justify treat- lowering the barriers, so that it becomes had, so I can help them develop.” ment with a gene therapy.” more and more routine to be able to see IV124460

He emphasized that it is not just about these products in use in the UK.” Comments: price but about the nature of the disease Although today’s products appear to be Email the author: [email protected]

Oncology and rare diseases dominate the industry pipeline, fuelled by science, regulatory tailwinds and high prices. But as the world grapples with coronavirus, and with heart disease still the top killer, can our systems fund treatments for more prevalent conditions?

BY MELANIE SENIOR ancer and rare disease drug candidates dominate the industry pipeline more convincingly than ever. In 2019, over a third of drugs in development The biopharma R&D pipeline is were for cancer, according to Pharmaprojects (which counts preclinical as chock full of cancer and rare disease well as clinical-stage candidates). A third were for rare diseases. Although candidates, driven in part by the high there is some overlap: 20% of cancer diagnoses in Europe are for rare can- prices such drugs can command. cers,C according to Cancer Research UK. But the aggregate picture is reflected in the FDA’s 2019 drug approval roster: 44% of the 48 new arrivals were for rare or “orphan” Payers are starting to put on the brakes, diseases affecting fewer than 200,000 people in the US. but venture activity in these segments The industry pipeline includes seven times as many immuno-oncology candidates as is still booming. Meanwhile, access cardiovascular disease hopefuls – yet heart disease remains the leading cause of death to treatments for chronic, yet “silent” conditions like high cholesterol or NASH worldwide. As coronavirus spreads across the globe, the number of anti-infectives in is tightening. development has shrunk, according to PharmaProjects. Metabolic disorder candidates are down in 25th place, even though, by 2025, half of all US adults will be obese (see Exhibit 1). Precision therapies have set new There are good reasons why the newest generation of drugs treat increasingly nar- benchmarks for impact and pricing. rowly defined diseases. The first is science: genomics and precision medicine have These will acutely challenge affordability helped uncover the genetic and molecular bases of cancer in particular – a mostly and access as they expand into more genetic-driven disease with measurable manifestations. This has sliced the condition prevalent diseases. into ever-narrower subtypes as its full complexity is better understood. Meanwhile, conditions caused by single (or very few) genetic mutations – like some rare, inherited disorders – are most amenable to new modalities such as gene therapy. Policy and pricing have also driven the skew toward rare diseases and oncology. The FDA has five programs aimed at accelerating patient access to treatments for serious conditions with few or no alternatives. These include designation programs enabling faster development (Fast Track, Breakthrough Therapy), faster approval (Priority Re-

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view) and Accelerated Approval (based Exhibit 1 on a surrogate endpoint). Orphan drugs Top 25 Therapeutic Categories – which often qualify for such programs – also enjoy longer market exclusivity. NO. OF R&D Anti-infectives, on the other hand, face POSITION PRODUCTS massive commercial hurdles, including 2020 (2019) THERAPY 2020 (2019) TREND restrictive use policies. Incentives for addressing niche unmet 1 (1) Anticancer, immunological 3,434 (2731)  needs have worked very well. Two of the 2019 FDA approvals – Vertex Pharmaceu- 2 (2) Anticancer, other 2,510 (2450)  ticals Inc.’s cystic fibrosis therapy Tri- kafta (elexacaftor/ivacaftor/tezacaftor), 3 (3) Gene therapy 1,273 (864)  an orphan, and metastatic breast cancer 4 (4) Monoclonal antibody, other 1,009 (818) treatment Enhertu (fam-trastuzumab  deruxtecan-nxki), an antibody-drug con- 5 (6) Ophthalmological, other 756 (690)  jugate developed by AstraZeneca PLC and Daiichi Sankyo Co. Ltd. – made it into the Prophylactic vaccine, 6 (5) 698 (702) top-10 fastest approval decisions since anti-infective  2010, according to Evaluate. Almost a quarter of 2019’s submissions were ap- 7 (8) Neurological 666 (567)  proved in less than six months. These drugs are not just getting to the 8 (7) Antidiabetic 589 (571)  market fast, they are also racking up 9 (9) Immunosuppressant 544 (511) huge sales – a reflection of unmet need,  but also of hefty price tags. The average 10 (10) Anti-inflammatory 529 (473)  annual per-patient cost of an orphan drug in the US in 2018 was over $150,000, 11 (15) Monoclonal antibody, humanized 508 (455)  according to Statista. The top-10 best- selling orphans all generate well over 12 (11) Musculoskeletal 504 (461)  $1bn annually – Merck & Co. Inc.’s cancer therapy Keytruda (pembrolizumab) 13 (20) Reformulation, other 492 (408)  pulled in $11.1bn in 2019 (see Exhibit 2). Cellular therapy, chimeric antigen The first four of those qualify as top-10 14 (33) 491 (276)  selling drugs outright (Keytruda, Rev- receptor limid, Opdivo and Rituxan). 15 (14) GI inflammatory/bowel disorders 488 (459)  Let us be clear: many of these treatments have transformed patient out- 16 (19) Cardiovascular 468 (412)  comes. Mortality rates for several cancers have declined considerably; in some 17 (13) Cognition enhancer 466 (459)  categories, for example, breast cancer: five-year survival rates are over 90% for 18 (12) Monoclonal antibody, human 448 (461)  those diagnosed at early stages. Trikafta will be life-changing for many CF patients 19 (21) Analgesic, other 448 (390)  whose disease subtype meant they did not qualify for earlier treatments. 20 (18) Biosimilar 442 (432)  Yet as more high-priced cancer and rare disease drugs are approved, they 21 (24) Neuroprotective 421 (386)  continue to challenge affordability and Reformulation, fixed-dose 22 (16) 419 (446) access. This can have a knock-on effect combinations  on funding for other conditions. Pay- ers have, until recently, accepted high 23 (29) Hepatoprotective 418 (340)  price tags for rare disease drugs given the relatively small numbers of patients 24 (30) Dermatological 408 (339)  involved – and, in some cases, clear biomarkers to help define which individuals 25 (22) Metabolic and enzyme disorders 400 (389)  will respond. That is now changing. “We’re putting in SOURCE: Pharmaprojects, January 2020

Exhibit 2 returns: most will make their money well Top Best-Selling Orphans before therapies reach the market, given rich deal-making and IPO activity. Cancer NAME SALES ($BN) INDICATION companies accounted for half of the top- 10 IPOs of 2019, according to Renaissance Several cancers including lung, melanoma, Keytruda 11.1 Capital, with genetic-disease-focused bladder and classical Hodgkin lymphoma groups next. Among 2020’s front-runners Revlimid 10* Multiple myeloma so far: precision-oncology-focused Black Diamond Therapeutics, which pulled in Opdivo 7.2 Several cancers over $200m in its January debut on the US Nasdaq. Rituxan 6.8 Blood cancers and RA Some VCs, though, have steered clear of these hot spots, sensing that the music Imbruvica 4.67 Blood cancers may stop. Giovanni Mariggi, a partner at London-based Medicxi, and Hakan Soliris 3.94 Paroxysmal nocturnal hemoglobinuria Goker, executive director at Amsterdam- Darzalex 3 Multiple myeloma based M Ventures (the corporate venture arm at Merck KGaA), said they have Jakafi 2.8 Myelofibrosis avoided cell and gene therapy because of high manufacturing costs – and per- Pomalyst 2.65* Multiple myeloma patient pricing that is “not sustainable,” noted Goker, speaking at the LSX World Yervoy 1.48 Melanoma Congress in London in February 2020. *Estimates; as Celgene was acquired, figures reported by BMS as of November 2019. Most of the industry’s 17,500-plus SOURCE: Company reports pipeline programs won’t see the light of day. Competition in some segments may place oncology management programs,” Ed Pezalla, previously a VP and national help temper prices (as they did in hepa- said Michael Sherman, chief medical of- medical director at US payer Aetna (now titis C) – although in many niches, such ficer at Harvard Pilgrim Health Care, a US part of CVS Health). Drug price-curbing competition, if it exists, is likely to be payer. “There are double-digit increases policy ideas – some radical, some less so weeded out well before the marketplace. in cost, without equivalent improvement – continue to swirl around Washington in But if the trend toward therapies with in outcomes,” he added. Even with con- the heated lead-up to US elections. six-figure price tags continues, govern- vincing outcomes, such as in some rare ment action, including in the US, may be diseases, there is a problem, because Payer Bottleneck Is Not Curbing inevitable. “You run into a real possibility “collectively, rare diseases are not as rare Early-Stage Investment of legislative action to put a damper on as people think.” The US-based National Despite this, many venture capitalists drug prices,” said Sherman. Organization for Rare Disorders (NORD) continue to double down on cancer and claims that 8% of the US population rare diseases. Beyond Oncology may have a rare disease, said Sherman. Oncology-focused biotechs drew in There are signs of a rebalancing away Six-figure price tags for even half of those over a quarter of all venture money in from oncology, as precision medicine would be unsustainable. The Institute for 2018–2019, according to Bay Bridge Bio, tools are applied to other areas also. Clinical and Economic Review (ICER) in overshadowing all other categories. Rare “Neurosciences are coming to the fore, 2018 blasted Vertex for CF drug prices that diseases accounted for about 12%. There and I sense respiratory, too, coming were almost 80% above what was consid- are more than 1,200 gene therapies in the into focus,” said Ben Thorpe, co-head of ered good long-term value for money by pipeline, according to PharmaProjects – EMEA Healthcare at Goldman Sachs, at the US cost-watchdog. European payers 50% more than in 2018. Among 35 port- February’s LSX World Congress. have also resisted funding the drugs. folio companies at Cambridge, MA-based BayBridge Bio data highlighted a slight Neither US nor European health sys- Atlas Venture, 28 classify as oncology, rise in the funding going into neurol- tems are equipped to pay for $1m to $2m gene therapy or rare diseases. Syncona, ogy and neurodegenerative diseases in one-time cures that some gene therapies headquartered in London, is exclusively the first half of 2019, relative to 2018. purport to offer, or indeed for $500,000-a- focused on cell and gene therapy. (Also Alzheimer’s disease – labeled as a future year therapies. So they’re finding ways to see “Creating Stability In A Time Of Transi- epidemic, as populations age – attracted restrict treatment to certain subgroups, tion” - In Vivo, 19 Feb, 2020.) the seventh-highest number of active such as those who benefit most in tri- New modalities like gene and cell pipeline compounds in 2019, behind six als. “We will see continued squeezing of therapy and RNA interference do have cancers, according to Pharmaprojects, subgroups and very complex definitions huge potential. And the payer bottleneck despite continued high-profile failures of who is eligible and who is not,” said is unlikely to impact private investors’ in the field. The US regulators’ verdict

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on Biogen’s aducanumab, resurrected cut their annual prices – initially in the NASH, at biotechs as well as big pharma. from failed late-stage trials, may prove a $14,000 per year range – by over half as Intercept is among the leaders with a watershed in the field; filing is expected the target patient group expanded. But Phase III candidate aimed at the sub- imminently. even then, they are in the wrong price group of patients with advanced fibrosis, The gut-brain-immune system axis bracket to enter a realm where pennies- but payers are on guard. An expanding has also emerged as a promising area of per-pill generic statins are a treatment palette of high-priced oncology drugs research, in conjunction with a growing mainstay. Payers balked at paying even continues to concern us, said Harvard understanding of the gut microbiome for higher-risk patients who could not Pilgrim’s Sherman, but is now “baked and its role in disease and health. Several control their cholesterol on statins alone. into our psyche.” (Also see “Intercept’s companies are looking at the relatively Combined annual sales of drugs that ad- Early NASH Efforts Will Stress Advanced new field of neuro-immunology – how dress the leading cause of death globally Fibrosis” - Scrip, 17 Dec, 2019.) the immune and nervous systems inter- are barely $1bn. NASH is a new type of worry – with act. Alector – whose $176m IPO in Febru- Praluent and Repatha require once- or high patient numbers even in restricted ary 2019 made it into the year’s top 10 – is twice-monthly injection, so there was segments. Competition, which appears harnessing the immune system to fight more than just the sticker price block- likely, may keep prices at bay. (Also see neurodegeneration, building on recent ing adoption. Novartis hopes to lower “Zydus Cadila First Off The Block In NASH understanding of the role of immune adherence barriers with its twice-yearly After India Approval” - Scrip, 6 Mar, 2020.) system genes in nerve cell death. administered inclisiran, recently filed But it can take a couple of years to arrive. Figuring out how to pay for a treatment for FDA approval. Inclisiran – which “If a [potential NASH drug] is priced at for dementia would not be easy, either, uses small-interfering RNA to target $30,000, even if the condition affects only though. PCSK9 – was acquired via Novartis AG’s 3% of my covered universe, with 1 million Applying precision medicine ap- $9.7bn purchase in November 2019 of patients that is still a significant budget proaches to these chronic diseases – as The Medicines Company. The question impact. And it’s a chronic condition so both scientific and investor logic dictate – remains whether the drug can be priced the costs would come year after year,” means new treatments will arrive initially at a level that generates the returns that said Sherman. for smaller, genetically defined slices of large companies need to stay in the game, Hemophilia is also on payers’ radars. the population. Alector’s lead Phase II while keeping payers on board. “It’s the extremes I’m worried about,” compound, for instance, is for fronto- Sanofi has decided that the math does summed up Sherman – highly prevalent temporal dementia patients with par- not work in cardiovascular disease and conditions like NASH where volumes ticular mutations. But, as many orphan diabetes. Last year, it stopped R&D in drive up budget impact, and rare dis- drug trajectories have shown, smaller those areas, also pulling out of a 12-year eases such as hemophilia, where sky- audiences mean higher prices, and lots partnership with Regeneron around Pralu- high prices for a few patients hit hard. of small audiences lead to unsustain- ent. Instead, the French group is doubling Hemophilia, an inherited blood-clotting able costs. “Instead of spreading the cost down in oncology, rare disease and rare disorder, affects only 20,000 people in [for one drug] over an entire population blood diseases such as hemophilia. the US. But a gene therapy to treat most for which it is available, populations Conditions like high cholesterol re- patients with the condition may cost are now being sliced and diced so that main underserved; that is clear from between $2m and $3m. BioMarin’s Val- instead of one drug, you need 10,” said their prevalence. But they are invisible rox (valoctocogene roxaparvovec) was Pezalla. “Since each one costs the same until they trigger serious complications, accepted for Priority Review by the FDA to develop, that means 10 times the cost.” and there are cheap generics available. in February 2020. Meanwhile, if a new drug is shown to That makes it particularly challenging, Valrox, like many gene therapies, is work in a large population, like those within the current system, for payers to designed as a single infusion – so that with high cholesterol, the price tag needs fund new, potentially more potent but is in theory a lifetime cost. Factor VIII to shrink considerably – well below the also wildly more expensive treatments. therapy – which patients currently need benchmarks that have come to be asso- to take – costs $200,000 per year. If the ciated with novel therapies, especially Budgeting For Extremes gene therapy does last 10 years, which so biologics. Non-alcoholic steatohepatitis (NASH) is far it has not demonstrated, then the math The PCSK9 inhibitor class, introduced another unmet need in the highly preva- works. If not, it doesn’t. And Valrox will in 2015, is a case in point. Both drugs lent, silent-killer category. Up to a quarter not be the only option for most patients: in this latest generation of (injectable) of the US population may be suffering two-thirds can use Factor VIII treatment. cholesterol lowerers, Amgen Inc.’s from this fatty liver disease, which is Roche/Chugai’s Hemlibra (emicizumab) Repatha (evolocumab) and Regeneron strongly associated with obesity, but has provides an alternative life-line for those Pharmaceuticals Inc.’s Praluent (ali- few obvious symptoms until it becomes who can’t: it binds together two other co- rocumab), were initially approved in a dangerous (NASH is the fastest-growing agulation proteins, Factors IX and X, and smaller group of patients, those with cause of liver transplants in the US). offers more flexible dosing options than an inherited condition leading to high The good news is that several late-stage Factor VIII – including a once-a-month cholesterol. Both have been forced to development candidates are going after prophylactic regime. In short: payers

should have some leverage. This potential suggested Sherman. UPMC Health Plan, in new treatment era in hemophilia is unlike- ❚ FOLLOW THE MONEY Pittsburgh, PA, in 2020 began offering some ly to be a replay of Sovaldi in hepatitis C. members reduced or zero co-pays on diabe- Contrast two of 2019’s approvals: But with more drugs arriving at both tes medications, alongside health coaching Trikafta (approved five months ahead ends of the spectrum – gene therapies support and free gym access. Many other of deadline) and Lilly’s acute migraine for ultra-rare diseases, and more tar- payers have similar incentives in place. treatment Reyvow (lasmiditan). Mi- geted therapies eating into ever-larger Digital modalities are also offering lower- graines affect one in seven Americans segments of widespread conditions – af- cost, more accessible cognitive behavioral (about 46 million). Cystic fibrosis fordability issues won’t go away. therapy for patients with depression. affects about 30,000. Trikafta trials Beyond The Drug Pipeline enrolled 510 patients; Reyvow’s more Thriftier Innovation than 3,000. Reyvow’s peak annual The pipeline skew toward oncology and Other thriftier innovations are emerging, sales are pitched at less than $500m. rare diseases is a reflection of science and too. The science of re-purposing and com- Trikafta sold almost that much market economics. These targeted treat- bining existing drugs to make new, better ($420m) in the two months after its ments have set new benchmarks for both ones, has had a new lease of life thanks to late-October 2019 approval. Its peak impact and pricing. Thus they highlight, deeper knowledge of both the therapies sales are expected to exceed $8bn. and perhaps exacerbate, the real chal- and the disease. Boston-based Karuna lenge: working out how to fund new drugs Therapeutics’ Phase II schizophrenia CF is a nasty, debilitating and some- for silent, chronic conditions whose value program KarXT combines two tested times fatal condition; it is a clear lies in preventing expensive complica- molecules – a generic overactive bladder unmet need as some patients have no tions tomorrow, rather than today visibly syndrome drug, and a compound origi- existing treatment options. Migraine shrinking tumors, freeing kids’ breathing nally investigated by Eli Lilly – to achieve is not fatal – though many find it de- or transforming patients’ ability to move. an optimal efficacy-tolerability balance. bilitating. There are drugs available Finding a way to pay only for what Sweden’s Cereno Scientific has re-formu- for the condition, but they are subop- works becomes more urgent as more tar- lated valproic acid, a generic treatment timal for many. Sales of cholesterol- geted, thus higher-priced drugs multiply. for bipolar, for preventing blood clots. It lowerers Repatha and Praluent are “Payers don’t mind that there are so many may one day offer a lower risk of bleeding also in the Reyvow range – even with immuno-oncology or rare disease drugs complications than found with blood- data that show they can reduce the in the pipeline,” said Kim Caldwell, previ- thinning drugs and could have applica- risk of CV events and, in Praluent’s ously VP, pharmacy professional affairs tions in atrial fibrillation, heart failure case, reduce all-cause mortality. at US insurance company Humana, and and chronic kidney damage. now principal at Texas Star Healthcare These areas may not be where the ma- Consulting. “They just don’t want to pay jority of VC funding is going – for now. for things that don’t work.” Nor do they show up prominently in the Multiple experiments are underway drug R&D pipeline. But as the scope of to design and test new payment mecha- innovation is forced to expand beyond nisms for drugs. Meanwhile, for some science into access, payment and policy, chronic conditions, drug therapy may these economical approaches may pro- have reached its limits anyway. Tools to vide the biggest impact, by benefiting the support lifestyle and behavior change, largest number of patients. That has to be including healthy eating, are the next part of industry’s societal contract, too. frontier for some segments of obesity A sign of the times, perhaps: EQRx, and diabetes. Many of these tools have launched in January 2020 by ex-Third Rock emerged from a burgeoning digital health venture partner Alexis Borisy, with $200m sector. from investors including GV (formerly Indeed, lifestyle change is likely to be Google Ventures), ARCH Venture Partners tied to access to even more treatments and Andreessen Horowitz. Its innovation: than it is today. For example, some of the drugs that are “radically” cheaper. forthcoming NASH therapies may find IV124471 themselves restricted to patients who un- Comments: dertake six months of a weight loss regime, Email the editor: [email protected]

22 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com UNMET NEEDS IN 2020: R&D Trends ❚

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JN2181 Pink Sheet Advert HBW US Letter.indd 1 2019/06/05 12:59 ❚ UNMET NEEDS IN 2020: Antibiotic Development UK, Sweden Test Differing Antibiotic Market Models

Sweden and the UK are conducting differing ‘develop and test’ programs to assess so-called ‘pull’ incentives in which an antibiotics innovator will be paid an annual fee in return for an access guarantee for anti- infectives. The projects have drawn keen attention from other countries.

BY STEN STOVALL ne key difference between the new incentives programs being trialed by the UK and Sweden is that the UK approach is focused on paying for the 2020 will be a key year for development added value of a new antimicrobial by delinking volume of sales from programs in the UK and Sweden that reimbursement, with the aim of incentivising the research and develop- are testing “pull” reward incentive ment of new antibiotics. The Swedish program is aimed at ensuring the mechanisms as ways to ensure availability of already approved and existing antibiotics to the Swedish health system. adequate supply of antibiotics, a drug O Another key difference is the Swedish program does not involve a health technology class which is dwindling dangerously. assessment of any new antibiotics, whereas the British approach does. The two programs do share the goal of finding ways to maintain a secure access to But their approaches differ significantly, effective antibiotics at justifiable prices. And they have each attracted interest from as the UK project aims to stimulate innovation for new antimicrobial drugs other countries also struggling with how to meet the rising threat of antimicrobial and incorporates health technology resistance and spur improvements in the world’s poor pipeline of new antibiotics. evaluation of the added value from the “These programs are very different,” said Colm Leonard, a consulting advisor at the new antimicrobial, whereas the Swedish National Institute for Health and Clinical Excellence (NICE) and project manager for project does not. the UK AMR pilot. “In some ways they send out a similar signal, but they are inherently different because the rationale for each is very different. And the mechanism for each Each program is exploring a method of is significantly different,” he told In Vivo in an interview. paying the innovator of a chosen drug – The UK and Swedish projects are being conducted amid increasingly urgent warn- or the current marketing authorization ings of the threat from antimicrobial resistance (AMR), which is growing as supplies holder – an annual fee, in return for an of existing antibiotics fall and the pipeline of new antimicrobials shrinks, largely due access guarantee. to a dysfunctional marketplace. “The key evidence of that [situation] is the bankruptcies of two US companies in the last 12 months,” Leonard said. “Both of those companies had brought to market new antimicrobials that were of some additional value but failed, basically because their sales were

24 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com UNMET NEEDS IN 2020: Antibiotic Development ❚

low and hundreds of millions of dollars had leaders said. Another assumption is that initially involve one recently approved been spent on developing them, so they other countries will also procure enough antimicrobial and one soon-to-be- just weren’t sustainable in that situation.” of the same antibiotics to ensure the vi- approved antimicrobial. Leonard was referring to US-based ability of the drug’s producers. The exercise will examine the potential Melinta Therapeutics Inc. which went “Sweden is a small country, comprising to adjust prices of new antibiotics to be into administration in December and 10 million people. The Swedes have very commensurate with the value not only smaller Achaogen Inc. which went bank- good stewardship around antibiotics and for the patient but also society. rupt in April last year. Experts foresee have very low levels of resistance, so their “How it will work is that there will be more biotech casualties this year unless key issue is access,” explained Leonard. a value assessment that will assess not viable reward systems are put in place for “Because they are a small country, and be- just the antibiotic’s ability to cure Patient commercializing novel antibiotics. cause there isn’t a problem with antimicro- A from Infection B but will take on board The UK and Swedish projects must find a bial resistance there is very little incentive additional treatment value; like whether balance between supply and demand that for a company to launch a new antibiotic the antibiotic will stop transmission to reflects the fact that antibiotics tend to be in Sweden. That’s a key difference.” other patients; that there’s an enable- for short courses and are relatively inex- Leonard added: “The UK is a bigger ment value around antibiotics allowing pensive. Novel antibiotics must be used country and we do have an issue around procedures such as hip replacements sparingly to restrain the spread of antimi- antimicrobial resistance, and in general or transplants or chemotherapy to be crobial resistance to existing antibiotics. all new antibiotics have been launched in given. And there’s a diversity value from Small innovating biotechs cannot survive the UK, so the issue is not about access.” having new antimicrobials in addition to on revenues that do not cover operational The UK project is “absolutely to an insurance value in case Armageddon costs. That imbalance dissuades investors stimulate research and development by happens in terms of antimicrobial resis- from backing them further. And when these showing that there is potentially a viable tance,” Leonard explained. companies go either bankrupt or move onto market for a drug, because we’ll assess It is expected that the pilot will introduce other therapeutic areas, their products may the added value that it brings, and then better value assessment that will then be no longer accessible to patients needing give some level of fixed payment regard- inform a commercial negotiation with the alternative anti-infectives. less of the volume of prescribing, to allow company. After which, an agreement can be Big pharmaceutical groups have stewardship while also allowing reim- made for some level of fixed payment each meanwhile largely abandoned R&D in bursement for the company,” he said. year for a set number of years along with innovative antibiotics, due to the ab- very strict stewardship guidance. sence of adequate reimbursement for UK Program Outline “Basically, the company will even- the associated investment outlays. This One of the key points Lord Jim O’Neill tually be signing a contract with the dearth of innovation is occurring despite identified in the UK Government-com- NHS to agree access to the product in a significant increases in so-called “push missioned Review On AMR (which started particular indication and in return that funding” for AMR-related R&D over the back in 2014), was a broken market lead- company will receive some level of fixed past five years from publicly and philan- ing to a poor antimicrobial development payments for a defined number of years, thropically financed entities. pipeline. In the UK, drug companies are with options for that arrangement to be currently paid by volume of antibiotics reviewed on both sides should informa- Tale Of Two Projects sold. The “subscription” style payment tion change,” he said. It is against that background – and amid model that is being developed in the UK expectations that antimicrobial resis- by NICE, NHS England and the Depart- Swedish Pilot Plans tance will only increase its threat to mod- ment of Health and Social Security is The Swedish program’s approach is more ern medicine – that Sweden and UK have suited for new antibiotics that would be narrowly focused. launched separate national programs to appropriately stewarded on market entry “The model which we are piloting does test “pull incentives” in hopes of finding to avoid early emergence of resistance, not focus on incentives for research and viable reward mechanisms that would which currently limits the ability of development of new antibiotics. Rather, it ensure adequate access to important companies to recoup their investment, is focusing on ensuring the availability of antibiotics to meet their national needs. Leonard explained. already approved and existing antibiotics Both the UK and the Swedish models are The UK project is looking at the poten- in the Swedish health system,” explained assessing de-linkage or partial de-linkage tial of this approach with a novel value Jenny Hellman, who is project managing to volume of sales, within an arrangement assessment and some level of upfront the study at the Public Health Agency of where a national entity will negotiate with guaranteed payments to improve the Sweden (PHAS). drug companies to ensure national access market entry environment and thus en- “However, we understand and ap- to important antibiotics. The assumption courage companies to invest in the devel- plaud the importance of work, such as is that any negotiated payments must be opment of new antimicrobial drugs. The that being conducted in the UK, that high enough to cover the production and aim is to have companies submit products focuses on facilitating development of distribution costs, as well as provide some that they want to be considered for the new antibiotics,” she added. The overall profit margin for the company, project first phase of the test, which is likely to goal of this current Swedish program is

to formulate a concrete recommendation “It’s a very joined-up piece of work,” arrangements in place in the first quarter by the end of 2022. “This model would Leonard said, adding: “NHS England of 2022,” Leonard explained. ideally be something we should extend and NHS Improvement, the Department He said the exact reimbursement and implement throughout the country,” of Health, and NICE have committed to mechanisms will become clearer as she explained. “If it proves viable, the delivering on this. There is a real commit- the UK project evolves, as the UK team model could act as a blueprint for other ment both organizationally and with the recognizes that a “one-size-fits-all” ap- countries,” Hellman added. expectation of financial backing behind proach may not be appropriate. “We will Sweden has been actively preparing it to deliver the novel assessment and need to be flexible. We haven’t decided the ground for a pull mechanism antibiotics program since 2014. The government mandated the current pilot in June 2018. “In this pilot study in Sweden, we are evaluating whether the model can ensure availability of new antibiotics that “ …The aim then is that the whole assessment will are regarded as having special medical inform commercialization, and that we will have the value, and where the availability of those drugs risks being insufficient on a national final contract, payment and stewardship level,” Hellman said in an interview. The pilot involves the “testing of a arrangements in place in the first quarter of 2022.” contracting process and associated legal aspects.” During the pilot, PHAS will run Colm Leonard monitoring and evaluation studies of the effects of these methods and if they improve availability of antibiotics. PHAS is using a bespoke algorithm reimbursement for these two products, which two products we’ll be looking at. to identify antibiotics that need special and the hope is that it would inform fu- There is an assumption that there will mechanisms in order to secure their avail- ture assessments in antimicrobials. There be some level of fixed payments each ability. “First, we identify antibiotics with will be more information in this regard year to the company regardless of the low sales turnover and antibiotics that shared in the market engagement stage volume of prescribing. In that sense it have few marketing authorization hold- in March 2020.” takes the form of a subscription model. ers, with a view to identifying products The current timeline is for market en- But each product will be assessed on its that might have availability problems,” gagement to begin in March between the own merit,” he said. Hellman said. “Secondly, we assess anti- program team and interested pharmaceu- Leonard added that in theory there biotics with regards to their special medi- tical companies and other stakeholders, could be a product where the nature of cal value. To do that, we have created an “just to share all the process documents payments may have a fixed element and algorithm that includes evaluation for and selection criteria to pick the first two non-fixed element. It could also be that the activity against bacteria with identified products. There will also be draft docu- agreement is dependent on performance high-risk resistance, the drug’s ecologic ments around the evaluation framework and/or outcomes, or a payment based profile and its role in Swedish medical and commercial negotiation framework partly on fixed payments and partly on treatment guidelines,” she said. and we have allocated time to respond unit price. “There will be a clear compo- to feedback from that engagement,” nent of this model’s output that meets UK Time Frame Leonard explained. the definition of subscription, because The UK project was first announced last Companies would then be formally there will be some level of de-linkage of July and was a direct result of the influen- invited at the end of April 2020 to put their payment to the company from volume tial Review on Antimicrobial Resistance product forward for one of the two slots of medicine prescribing, but we are well commissioned in July 2014 by the then for project’s initial phase, the invite ap- aware that we will have to be flexible and UK Prime Minister David Cameron and pearing as a notice in the Official Journal accepting of the fact that there are dif- chaired by Lord Jim O’Neill, and which of the European Union. ferent mechanisms for subscription and made proposals covering the 10 main “Then there will be a selection phase different ways of doing that – some of areas in which action was required to that will happen over the course of the which might be performance related and address the imminent threat posed by summer and the plan is that we will have dependent on other different outcomes.” AMR. (Also see “Lord O’Neill Blames then selected two products in 2020 to un- “It will essentially depend on what Governments And Pharma For Faltering dergo a type of novel health technology two products we look at,” Leonard AMR Progress “ - Scrip, 9 Oct, 2019.) The assessment in 2021. The aim then is that concluded. UK exercise involves close collaboration the whole assessment will inform com- IV124465

between NICE, NHS England and the mercialization, and that we will have the Comments: Department of Health and Social Care. final contract, payment and stewardship Email the author: [email protected]

26 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com UNMET NEEDS IN 2020: Antibiotic Development ❚

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JN2181 Pharma Advert HBW US Letter.indd 1 2019/06/05 13:44 ❚ UNMET NEEDS IN 2020: Patient Access Focusing On Collaborative Not ‘Innovative’ Ways To Pay

Innovation is defined by the Cambridge dictionary as “(the use of) a new idea or method.” The term is bandied about a great deal in the life sciences industry. Is it actually helpful to use the term so widely, or does the sector risk overlooking true innovation? This can be applied not only to the drugs coming to market, but how they are paid for as well.

BY LEELA BARHAM nnovation in life sciences is important; breaking new ground when it comes to meeting an unmet need can mean preventing suffering and saving lives. In- Innovative pricing agreements have novation has also been applied to finding new ways to pay. Actions that have been used in Europe for more than 20 come about in response to the financial pressures faced by health care systems, years. Can something that has been uncertainties in the performance of drugs in the real world, and newer chal- around for so long still be considered lenges related to huge upfront costs for potential cures. innovative? I Innovative Ways To Pay The UK is one market that can lay claim The European Commission has looked specifically at innovative payment models for to at least trying out novel approaches. high-cost medicines. They commissioned the expert panel on effective ways of investing Still, what is telling about the UK’s early experience with innovative ways to pay in health to look at the issue in 2018. Their list of innovative payment models included is that they have not proliferated. The price-volume agreements, outcome guarantees, coverage with evidence development trend over time has been towards simple and disease management programs. discounts. Industry uses the terminology too; the US industry association PhRMA has a value collaborative that wants to advance “policy ideas to find new and innovative ways to “Innovative” as a description for access pay for medicines.” There are also companies who have people in job roles including agreements appears to have had its “Associate Director, Innovative Contracting.” time. Companies are shifting their focus Swap the term payment models to contracting and agreements and you will still to models that respond to the main find the word innovative in front of them. Innovative financing is also another buzz concerns of payers and that are more phrase being used. collaborative. Confusingly, the definition for traditional payment models can take in the very same models others describe as innovative. Traditional can mean volume based agreements, cost or patient capping, and discounts/rebates. Omar Ali, head of payers at Verpora, a consultancy focused on supporting manufacturers with construction and deployment

28 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com UNMET NEEDS IN 2020: Patient Access ❚

of innovative contracts, said “the simplest comes generated by their treatments, ing over time. That study did not ad- definition is that it’s anything that’s not a Avonex (interferon-beta 1a), Betaferon dress whether the new payment model traditional price volume contract.” (interferon-beta 1b), Rebif (interferon- really worked, or not, and from whose Innovative pricing agreements have beta 1a), and Copaxone (glatiramer perspective. been used in Europe for more than 20 years. acetate). Outcomes were monitored The UK followed up with a response Can something that has been around for so through a registry over 10 years. The scheme in 2007. The deal was struck be- long still be considered innovative? aim was for prices to be in line with a tween Janssen-Cilag GMBH and the Eng- Raf De Wilde, senior executive advi- cost-effectiveness threshold of £36,000 lish national health service for Velcade sor at Valid Insight, a market access per Quality Adjusted Life Year (QALY). (bortezomib) in the treatment of multiple consultancy that helps pharmaceutical The MS risk sharing scheme was not myeloma. The scheme centered on serum companies overcome market access chal- supported by all. It experienced some M-protein, measured routinely with a lenges, notes that the word innovative is real challenges along the way. These blood test and so added no further clini- not always a fair reflection of the deals ranged from the time taken to recruit cal costs to the NHS, although the admin being struck. He said, “We started with patients, the academic group responsible was a bugbear for many professionals these 20 years ago. Innovative may be for analysis dropping out because of working on the scheme in the NHS. true for a country, but globally there are concerns about data access and publi- The innovative element to the Velcade lots of schemes that have already been cation rights, to a damning verdict that scheme was having Janssen-Cilag agree done.” Ali concurs, he said, “They are it was costly failure. This last view was to rebate the cost of Velcade for patients not really that innovative.” according to a 2010 piece published in the who did not respond after four cycles of British Medical Journal written by Profes- treatment. De Wilde was involved in devel- Disappointing Experiences With sor James Raftery, a professor in health oping the Velcade scheme, and he noted ‘Innovative’ Models technology assessment at the University that the name it was given – a response The UK is one market that can lay claim of Southampton. scheme – was deliberately different to the to at least trying out novel approaches. The final results for the MS risk sharing MS risk sharing scheme because “the MS A well-known example – but not the first scheme, in relation to patient outcomes, risk sharing scheme was seen so nega- outcomes-based approach according to came out in 2018, 16 years after the tively by the NHS.” It is also clear that the De Wilde – was the multiple-sclerosis scheme was agreed. It showed that the scheme was a far simpler approach, used (MS) risk sharing scheme in 2002. This treatments were beneficial to patients a routine clinical measure that is needed deal saw Biogen Inc., Schering, Serono and could slow disease progression, for managing patients anyway, and one and Teva Pharmaceutical Industries albeit that further study was needed to that would take far less time to determine Ltd. agreeing to link prices to the out- explore the benefits of treatment wan- if the drug worked when compared to the

Exhibit 1 Evolution In Commercial Arrangements Agreed As Part Of NICE Appraisals

60 CAA PAS (Complex - Dose Cap) 50 PAS (Complex - Response scheme) PAS (Complex - Time Cap) PAS (Discounted Price - This Indication Only) 40 PAS + CAA PAS 30 PAS (Complex - Free Stock) PAS (Complex - Single Fixed Price) PAS (Complex Discount) 20 PAS (Simple Discount) Simple Discount Agreement (SDA) No. Of CommercialNo. Agreements 10

0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

2020 data is for January only SOURCE: In Vivo analysis using NICE data

MS risk-sharing scheme. can generate the necessary evidence. It- Hard Work For Payers When Using What is perhaps telling about the UK’s aly has seen fewer outcome based agree- Innovative Ways To Pay early experience with innovative ways to ments over time, there were no outcome Collective experience in Europe rein- pay is that they have not proliferated. The based agreements agreed in 2017 or 2018, forces the notion that in reality, innova- trend over time has been towards simple according to analysis from IQVIA. There tion is not a driving force in payment discounts (see Exhibit 1). There have been were outcome-based agreements struck models. The reason? There is a lot of work no further response schemes. According every year between 2008 and 2016. On for payers in implementing and running to the UK’s health technology agency, the upside, there is evidence that there anything but the traditional discounts. NICE, of the 241 schemes that were still is faster patient access when agreements According to those working in Spanish in play up to January 2020, 70% were are used. hospitals and surveyed from December simple discounts. 2017 to March 2018 by researchers from Similar trends have been noted else- Dominance Of Tried And True Ways the Universidad de La Rioja, drawbacks where. The Netherlands, for example, To Pay of risk-sharing agreements range from tried out performance-based approaches; Real life experience has seen the finan- persuading clinicians to prescribe the they discontinued this method in 2012. cial-based payment models not only drugs covered by the agreements to ad- A 2019 OECD review of managed entry growing in their use, but they are domi- ministration in following up. agreements (MEAs) – another name nating in the mix of payment models be- In the US too, there are a host of for innovative contracts – suggests that ing used for drugs. The OCED found that reasons why payers reject value-based Sweden too has been moving away from its financial payment that are most often contracts (yet another term to capture schemes that intended to generate more used across OECD countries, with 28 al- the concept of paying for performance). evidence on performance of drugs which, lowing financial-based schemes versus 23 According to researchers from Precision in the end, did not provide the informa- permitting performance-based schemes. Value and Health, a US based market tion that was hoped for. There is variation though; some countries access consultancy, who surveyed 25 Even Italy – a country alongside the permit both financial and performance- pharmacy directors the reasons included: UK, credited with leading the way in based MEAs, whereas others only permit • the difficulty of defining or agreeing an MEAs – has seen debate about whether performance-based, and there is a lack of outcome measure; performance-based approaches really data for some countries (see Exhibit 2). • the value in dollar terms does not jus-

Exhibit 2 Map Of OECD Countries’ Use Of Financial And Performance-Based Ways To Pay

I Financial and performance-based I Performance-based and no data on nancial-based I Financial-based I Neither I Performance-based No data I Financial-based and no data on performance-based SOURCE: In Vivo using data from OECD (2019)

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tify the effort to adjudicate the deal; terest in innovative ways to pay. Novartis risk sharing scheme. Such is the belief in • lack of data infrastructure; funded researchers from the UK-based the potential, OHE, working with others, • complexity; think-tank the Social Market Foundation have secured funding to follow-up their • lack of trust; (SMF) to look at introducing outcomes- work and will be piloting an outcome- • uncertainties including whether pa- based ways to pay in the NHS in 2017. based payment scheme in the Greater tients adhere to treatment; Their conclusion was that, with lessons Manchester region of England. • plus, the silo nature of medical and learnt, the benefits of an outcomes-based It is not just the UK either. There is pharmacy budgets. model would be to help address afford- interest in innovative agreements be- Even in Italy there remains admin ability challenges, reduce risks for the tween hospitals and pharmaceutical despite it being a trail blazer using flex- NHS, and improve outcomes for patients. companies in the Netherlands, accord- ible web-based registries. “Web regis- Others have looked at the potential for ing to Vintura, a life sciences and health tries make it possible to apply any new outcomes-based models too. The Office consultancy based in the Netherlands. It scheme,” said Fabrizio Gianfrate, who of Health Economics (OHE) and Rand said, interest in what is arguably still the formerly worked at the Italian Medicines Europe, both UK-based research groups, most experimental – on outcomes – is Agency, AIFA, and is now a market access funded by Cancer Research UK and the seen only amongst a few. Vintura’s 2019 consultant. Yet he concedes that the is- Greater Manchester Health and Social survey of 30 hospital-based professionals sue of admin and workload applies even Care Partnership, have looked at how to suggested that 20% were interested in with the capabilities in the Italian system. make outcome-based payment a reality in outcomes-based discounts because this He explained, “It’s a lot of work for the the NHS. Their 2019 report suggests that was seen as picking up on innovation. treating doctors. They are reluctant and outcomes-based pricing schemes have That compared to around half of those not very happy to update the registry.” not been used systematically reflecting surveyed having a preference for a flat With a focus on interoperability it could a lack of consensus. discount since it is simple and predict- become easier as systems essentially talk Implicit to both the SMF and OHE/ able. Almost a third could be interested to one another without the need for the Rand reports is that, in essence, this time in volume-based discounts reflecting the current step of inputting data. it is different. In technology terms, that opportunity to secure a higher discount. Despite the disappointments of the must surely be the case compared to early The US has seen an increase in the num- past, there has been a resurgence of in- outcomes-based agreements like the MS ber of agreements, known locally as value-

Exhibit 3 Number And Type Of Publicly Disclosed Value-Based Contracts In The US, 2009-2019 20

N/A 16 Combination 14 Financial-Based Outcomes-Based 12

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

SOURCE: Data from Verpora VBA tracker

Focus On Collaboration Payers too use the term innovation in relation to payment models. For example, NHS England – the biggest buyer of specialty drugs in the NHS – has referred to its own innovative approach when it came to an agreement for a population level trial of not-yet approved cholesterol treatment inclisiran with Novartis in January 2020. Novartis also spoke of the innovative approach in their press release. Yet both organizations led with a different message to innovation in the payment model; instead both emphasized collaboration. NHS England has also focused on what it sees as “smart procurement.” Examples include a deal agreed with Vertex for their cystic fibrosis products announced in October 2019, where all clinically eligible patients can access Orkambi (lumacaftor/ ivacaftor), Symkevi (tezacaftor/ivacaftor) and Kalydeco (ivaftor). Another is an agreement with Roche on Ocrevus (ocreli- zumab) for multiple sclerosis, signed in May 2019. Details on the agreements in the public domain are minimal. De Wilde believes that rather than what payment models are called, what matters more is tackling head-on the concerns of payers and working collaboratively. He said, “Innovative as a term has had its time. Companies need to focus on models that respond to the main concerns of payers.” From a payers’ perspective, the How best to pay for cures – when it is not yet focus is not on striking an innovative payment arrangement but on companies evident that they really are cures because engaging constructively and striking the there is no lifetime data to draw upon – has right deal. Gianfrate concurs that the real target re-invigorated the debate. should be meeting payer needs. He points to the AIFA deal struck for Kymriah . He explained, “The mix of the outcomes- based contracts, since 2009. Just over new drugs coming to market. How best to based payment with instalments is 75% of these have been outcomes-based, pay for cures – when it is not yet evident based on the specific need to manage bucking the trend in Europe (see Exhibit that they really are cures because there uncertainty on long-term efficacy, and a 3). Given the complexity of the US market is no lifetime data to draw upon – has re- high upfront cost that is hard to manage with its many payers, plus the confiden- invigorated the debate. That debate has in one year.” tiality that surrounds agreements struck, moved beyond talk and into new payment Companies need to think collabora- this may well be an under-estimate. It models. For example, AIFA struck for the tion, not innovation, when it comes to may not be a fair reflection of the types of first time a model it calls payment at re- ways to pay. agreement made either. Ali believes that sults for Novartis’ T-cell therapy, Kymriah IV124455 that there could be as many as eight to 12 (tisagenlecleucel), for adult patients with deals made that remain confidential, for diffuse large B-cell lymphoma (DLBCL) every one that is in the public domain. and for patients aged up to 25 years old

Arguably much of the renewed interest with B-cell acute lymphoblastic leukemia Comments: in finding new ways to pay reflects the (ALL) in August 2019. Email the editor: [email protected]

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JN3231 In Vivo Social Advert 8.5"x11".indd 1 2020/03/12 13:59 ❚ UNMET NEEDS IN 2020: Medtech Markets EU Health Innovation Partnership Reflects Medtech’s Role In Unmet Needs

The EU Partnership on Health Innovation, a new public- private health care research partnership, is in the final drafting phase before its launch under Horizon Europe. In Vivo asked the partnership’s medtech industry lead, Patrick Boisseau, to set out the innovation challenges for participants as they address unmet health care needs in Europe.

BY ASHLEY YEO ealth care in Europe faces increasing challenges on a number of fronts, but it is clear that technological and scientific advances offer the main route The EU’s forthcoming Partnership to solving the growing needs of patients. Identifying these unmet needs for Health Innovation will break new and putting into action a strategic plan around how and with whom the ground, as it establishes a program solutions can be developed have previously failed, as a process. to address emerging health care In the past, the European Union has set up targeted research programs, from FP6, challenges over the next seven years in H to FP7, to Horizon 2020. These have all offered grant-funded research and innovation five priority areas of unmet needs. (R&I) experts the opportunity to engage with academia, providers and other health care stakeholders in embarking on joint approaches to tackling health care’s unmet needs. This public-private partnership awaits These seven-year programs have bridged some of the gaps that arise in health and the final go-ahead from the European Commission and member states, translational challenges. That is being continued within the Horizon Europe Frame- including budgetary decisions, but work Programme (2021-2027), the new tentative €80bn-100bn ($90bn-113bn), EU R&I its Strategic Research Agenda will be funding program, within which the novel public-private partnership (PPP) on Health available soon. Innovation will sit. Some 8% (€7.7bn) of Horizon Europe’s budget is currently planned to be allocated Crucially, the partnership calls for major to health projects. This is subject to change, however, as the final budget amounts can input from the medtech and the pharma only be set after the EU’s Multiannual Financial Framework has been decided at EU sectors, as it broaches needs across the council level. This has been delayed and, in early March, was still awaiting finalization. health care continuum, with solutions expected to come from the genomics, Lead Role For Medtech prevention, diagnostics and therapy Europe’s leading medical technology industry federation, MedTech Europe, has, along disciplines, as well as digitally enabled with COCIR (the European Coordination Committee of the Radiological, Electromedical care and “smart health.” and Healthcare IT Industry), taken a lead role in organizing the new Health Innova- tion PPP. These two organizations have split the industry input into the task 50:50

34 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com UNMET NEEDS IN 2020: Medtech Markets ❚

with European pharmaceutical trade body EFPIA (the European Federation of Pharmaceutical Industries and Associa- tions). These three will jointly oversee the industrial input from the larger manufacturers, while the European Commission will co-fund for smaller companies and the non-commercial inputs. The work areas were proposed in a draft Strategic Research Agreement (SRA) in October. This split the initiative into five areas of need. “Delivering the SRA was a major achievement,” said Patrick Boisseau, who was commissioned by MedTech Europe to spearhead the medtech side of the scheme. Speaking to In Vivo, Boisseau de- scribed the SRA document as “a scientific road map and a description of high-level priorities.” It was opened for public con- sultation in October 2019, and led to a ❚ PATRICK BOISSEAU: 15-page document that describes the five areas of actions – the “priority” areas. It AN IDEAL TRACK RECORD TO LEAD A MAJOR MEDTECH received some 100 comments with which RESEARCH PROJECT to craft the final SRA. Patrick Boisseau has managed many EU collaborative projects, research infra- It was to be posted on www. structures, coordination actions and networks of excellence. Initially specializing euhealthppp.org in late January 2020, in agronomy and environmental engineering in France, he later develop scientific but that, too, has been subject to a slight and technical expertise in nanomedicine, drug delivery, medical imaging and in- delay. The final document will still be novative medical technologies. released on that website, but it will not be published on the commission’s website, A French national, Boisseau is the past chair of the European Technology Platform however, as the associated budgetary on Nanomedicine. He is MedTech Europe’s Inter-Association Task Force representa- issues might mean the PPP having to tive for the public-private partnership on Health Innovation within Horizon Europe, reduce its scope, which might lead the and joined MedTech Europe on 1 September 2019 as director of EU R&I partnership SRA to being revised. policies. The industry groups in the partnership will, however, publish it, with a disclaim- His remit is to develop and lead the medtech industry in EU R&I partnerships and er, and it will be updated, probably after a programs, liaise with the European Commission and help coordinate European couple of years. The commission’s delay funding projects at EU level for the medtech industry. was not related to the recent coronavirus outbreak, and was not a reprioritizing of In 2012, he became head of strategic planning for health care at CEATech, the commission’s resources, MedTech Europe technology research division of CEA, the European Atomic Energy Commission. He asserted. was most recently VP, Europe, at CEATech. Despite these minor hiccups, Boisseau regards the ethos and the set-up of the new PPP as game-changing for medtech in Europe, especially when compared with the Innovative Medicines Initiative (IMI), the preceding scheme for EU health clude 32 at the European Atomic Energy Start Of The Venture care. “In the past, the medtech sector did Commission (CEA), working on technol- Five years ago he was approached by the not engage with EU support instruments ogy research in life sciences, academic European Commission about taking a as actively as some other industries. But research and R&D with and for indus- role in the forthcoming Horizon Europe that is changing,” he said. try. For the past 18 years, he has had a PPP for European medtech. That led him Boisseau’s career and track record role on European R&D collaborations in to contact MedTech Europe chair Serge made him an ideal candidate to lead the nanomedicine, which provided him with Bernasconi. medtech industry’s input into the PPP. knowledge and insight into European “That was the start of the venture. But His 40 years of industry experience in- funding programs. what is really new is that, for the first time

ever, medtech is actively shaping the PPP, with pharma and devices meeting every apply,” Boisseau explained. both in creating it, and later on in the week, and then both of them with the The five action areas that have been governance of it,” Boisseau highlighted. commission every two weeks, to define prioritized in the SRA are: Six months into his new role at MedTech step-by-step the rules and objectives of 1. Harnessing advances in, and syner- Europe, Boisseau said, “This is my best ex- the PPP.” gies between, genetics, biology and tech- perience ever,” adding that he was gratified A lot of effort was devoted to the strate- nology innovations for more precise and by “the strong push by our MTE members gic objectives, and to the level of research effective prevention, diagnosis, treatment to be part of this EU funding program.” needed, and it took much time before and care, and interfacing the disciplines. He said, “The basis of my job is trying agreement was reached, said Boisseau, as This action area also includes healthy to explain, prepare and train our mem- R&D is performed in a very different way ways of living and factoring in environ- bers [150, including 50 associations] to by the two commercial sectors. “But we mental issues that might need addressing. take advantage of opportunities.” are progressing,” said Boisseau, adding 2. Developing patient-centric, integrat- A significant part of medtech research that the months ahead will be used to ed care solutions along the entire health done by some large companies takes finalize all the details and rules that will care continuum, which is a new trend. place in the US rather than in Europe. apply for the next seven years. Looking at it from the patients’ viewpoint, For this reason, the US-headquartered “The medtech sector needs to be active Boisseau said the aim is for all the differ- groups have had little knowledge of the now,” he said. “All our members need to ent steps to be aligned and consistent, processes and programs at EU level. be ready on 1 January 2021, that is my whether a pharma or a medtech solution. “For them, [the premise of the PPP] objective. And companies are learning “Consequently, we need to develop inter- is not necessarily an easy thing to as- very quickly.” connected solutions with the support of similate because, for many, it is the first Delivering the SRA was the first tan- both pharma and medtech industries.” time they have been able to consider gible, major milestone, he said. Up ahead 3. Digitization. This relates to collect- collaborative research in Europe,” Bois- lies the work of finalizing the governance ing Big Data in new ways and combining seau said. Most medtechs have not really structure, the priority-setting processes, it with advanced analytics/artificial intel- addressed European R&I, as this is seen the participation of stakeholders, and ligence to enable research, development as the responsibility of their US teams. the funding mechanisms. The process and business opportunities, which, in “This new opportunity has led to them to has involved workshops with pharma turn, promote new, integrated health reconsider, and many are doing internal and medtech companies, to survey their care approaches. Artificial intelligence reflections on how they can work on a suggestions on the top five challenges will deepen the impact in the health care collaborative basis in Europe. It is a very they saw in their area of activity in the sector, with issues being addressed by the interesting phase.” It might even see com- coming seven years, and how to address pharma and medtech industries together. panies transferring some research from them collectively. This cross-sectoral approach has not the US back to Europe, Boisseau believes. The principle of the PPP is that the been a feature of research programs so An R&I committee of some 23-25 com- risks are shared by companies, and the far, Boisseau observed. panies has done a lot of preparatory partnerships that happen take place in 4. Empowering citizens and patients to profiling of opportunities and assessment the “precompetitive” area. It is better to effectively engage and improve their own of potential engagement levels for the co-invest collectively so everyone will health, which is also a new way of con- medtech side of the PPP. benefit, saving time and/or accelerating sidering health management, not only progress, said Boisseau. These can then be through the use of apps, but generally The Value Of Joint Research translated into proprietary products that through giving patients more informa- The value and purpose of EU health care are developed by companies individually. tion. In this way, patients become key funding initiatives has been brought into The basis of the contributions is that the players in their own heath management. sharp focus with the ongoing coronavirus commission will invest cash up to the esti- 5. Reinforcing value initiatives to guide outbreak. In late January, the European mated value of 50% of the project’s funding investment, and rewarding innovation in Commission released €10m initially, and for the non-industrial partners, the hospi- health and social care. These very much later another €37.5m, for research on vac- tals, the universities and the start-ups, etc. play into the value-based health care con- cines, new treatments and diagnostics. On the industrial side, the major companies cept. “There is a consensus that value will (Also see “Stark COVID-19 Drug Shortages involved in the project will invest 50% of drive the future of health care. At present, Warning From Senior EU Regulator” - Pink the budget of projects in kind. it is still a concept, but we want to achieve Sheet, 6 Mar, 2020.) that aim,” said Boisseau. Boisseau has a leadership and coor- Five Priority Areas dinating role at the Health Innovation “The ideas have been discussed, and Innovation Discussions, Focus PPP. “The great challenge is that this now we have five priority – or action Groups And Selection Criteria partnership is not a simple extension of – areas. Every year, the five areas will The individual health care projects within the IMI,” he said. “We started 16 months yield calls for probably 10 to 20 projects, these five priority areas will be discussed ago, with tripartite negotiations featuring which will be published in the expecta- every year of the PPP, including with the commission, pharma and devices, tion that all kinds of stakeholders will external stakeholders (patients, pay-

36 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com UNMET NEEDS IN 2020: Medtech Markets ❚

ers, health care professionals, research a particular topic, it might be moved to Adoption Of Solutions organizations, hospitals, universities, another program of the commission’s The question of how solutions that regulators and EU member states, etc). health cluster, to give it another chance, emerge from the individual projects will There will also be focus groups – tech- said Boisseau. be adopted is highly relevant. What will nical groups where the ideation process The PPP process will be managed by a finally reach the patient and consumer? will take place – similar to the strategic central office, yet to be set up, similar to Companies will want to know the an- governing groups (SGG) used in the IMI the structure within the IMI model. The swer to this question. Boisseau said the initiative. The title and the remits of these process is still being fine-tuned into “a commission was putting more pressure groups could evolve over time. “We are management process that will deliver.” on ensuring deliverables for patients, trying to find the right granularity, so we But Boisseau said that a lot has been i.e. products that will reach the market. cover the full SRA in a manageable way,” learnt from the IMI and ECSEL partner- Industry, for its part, will be eager to get Boisseau said. ships. “Past experience has helped to a return on investment. The topics of the call for projects will design the process and organization for The research would not always deliver be shortlisted each year, and the gov- the Health Innovation PPP.” products, Boisseau cautioned, but it may erning board of the PPP will take the In addition, the PPP will communicate instead deliver a method or process that final decision. One criterion is that the with other partnerships, on food and the can be further developed. The partnership commission and industry should agree environment, and not focus solely on is currently defining key impact indicators, to fund the budget for a topic equally. actual treatment, but rather on the whole to monitor the projects and collaborations. If industry is not prepared to invest in continuum of care. It also wants an indicator to monitor the

Five Action Areas: Potential Outputs

Harnessing synergies: Empowering patients: • Increased understanding of human disease biology • Greater understanding and • New tools and technologies for personalized/ knowledge among patients precise prevention and treatments • A “facilitating environment” • Novel treatment paradigms for non-communicable diseases • A strong case for patient • Better preparedness for infectious disease outbreaks empowerment

Patient-centric, integrated care solutions: Value initiatives: • Pathways for the combination of products • A harmonized denition of value for and integrated solutions for diseases products, services and their combinations • Integrated solutions to support more • Tools and methodologies for value-based e cient operational and workflow assessment, procurement and nancing • Integrated medical and non-medical solutions • Facilitation of value-based decision-making for improved patient outcomes • Pilots for innovation nancing to • Setting up the environment, infrastructure accelerate access and standards for integration

Applying ‘Big Data’ and advanced analytics: • A roadmap for implementing • An incentive system for buyers of health technologies to be data standards harmonization compliant with data standards and quality • Auxiliary data tools • Deployment of the IT infrastructure necessary within health care for AI and machine learning

impact of the funding granted. “We are Europe, and, of course, for the patients driving for rules that that will ensure best and the health care systems.” use of the money invested.” This is because, for the first time, There is a growing trend in European medtech companies are being strongly funding of going closer to the market, but encouraged to take an active role in shap- product development is the responsibility “ Together, we will ing an EU research partnership, to ensure of the industry, so public money should it meets their needs and expectations. not fund it, Boisseau asserted. For its help to design “Together, we will help to design cross- part, the commission is aiming in the pre- sectorial R&I programs on prevention, competitive space to facilitate all neces- cross-sectorial R&I diagnostics, treatment, monitoring of sary steps that accelerate or promote the patients, as well as socio-economic stud- new medtech and digital solutions being programs on ies on value and digitization of health made available. care,” said Boisseau. It will be a big part The two major founders in the PPP prevention, of the process of solving unmet patient are the commission and large medtech needs. Solving tomorrow’s health care companies, with the cash from the com- diagnostics, challenges requires a broad coalition of mission being used to financed substan- stakeholders to explore new approaches tially all of the public partners’ inputs, treatment, that can combine devices, diagnostics, the start-ups and the SMEs. Start-ups and medication, digital tools and big data. SMEs would have to apply for funding, monitoring of That is precisely the remit of the Health and if successful, would be granted costs Innovation PPP, he said. by the commission. patients, as well “The most successful projects are Unmet Needs In Focus run by consortia where large and small as socio-economic In reality, any topic of interest to both companies, and regulators and others, industry and the commission under the all become used to meeting on a regular studies on value PPP could be called an “unmet need,” basis, enabling them to deepen their rela- Boisseau observed. But if a project merely tionships at an early stage in the develop- and digitization of “improved” an existing market, the comment of the technology,” Boisseau said. mission may not be favorable to funding A lot of R&D in the medtech sector is health care.” half of its budget. done by start-ups, but when they get clos- Equally, some projects may be seen by er to the market and need to embark on companies as too risky or too early-stage clinical validation, the smaller ones tend Patrick Boisseau to take on under their own funding. “In to get taken over to enable their technol- this case, we have asked that the regula- ogy to continue its route to the market. tion establishing the PPP could make This is the framework which start-ups room for exceptions, and allow industry and large companies live together in and to be granted funding to use its resources are accustomed to, Boisseau observed. to address these needs, as has happened But he is enthusiastic about the pos- under IMI,” said Boisseau. sibilities for medtech in the PPP. It is the In the meantime, MedTech Europe first time in many decades in the industry will host webinars, organize training, that medtech has been invited to actively offer access to support tools and official contribute and shape the R&D and inno- templates, and make available details of vation thrust in healthtech at EU level. work programmes, “for medtech innova- “We hope this new plan will encourage tors of all sizes.” more investment and commitment in IV124470

the next seven years,” said Boisseau. “It Comments: really is a change for medtech, and for Email the author: [email protected]

38 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com UNMET NEEDS IN 2020: Medtech Markets ❚

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JN2181 MDT Advert US Letter.indd 1 2019/06/04 17:44 ❚ ON THE MOVE

❚ On the Move Recent executive appointments in the life sciences industry © Frequency Therapeutics Therapeutics © Frequency ❚ NIKOLAUS BEYER ❚ TIMM CROWDER ❚ LISA GELLER ❚ TOM GRIFFIN

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Timm Crowder Aerami Chief Operating Spyryx Chief Operating Officer 5-Feb-20 Therapeutics Officer Biosciences

Cecilia Ahlin AroCell AB Chief Medical Officer Novartis Medical Head, Oncology 10-Feb-20 Sweden

Blaine Davis ArTara Chief Financial Officer Insmed Vice President and 11-Feb-20 Therapeutics Inc Head, Investor Relations and Corporate Communications

Kristin Yarema Atara Chief Commercial Amgen Vice President and 18-Feb-20 Biotherapeutics Officer Therapeutic Area Inc Head, Global Product Strategy and Commercial Innovation, Hematology and Oncology

Joseph Baroldi Avidity Chief Operating Ionis Vice President, Business 12-Feb-20 Biosciences Officer Pharmaceuticals Development

Bijoy Sagar Bayer AG Chief Information Stryker Corp Chief Digital Technology 1-Jun-20 Technology and Digital Officer Transformation Officer

Craig T. Boston Chief Medical Officer Novartis Institutes Global Head, Translational 3-Feb-20 Basson Pharmaceuticals for Biomedical Medicine, Cardiovascular Research and Metabolism

Elisabeth Complexa Inc Chief Business Fortress Biotech Head, Corporate 7-Feb-20 Leiderman Officer Development and Senior Vice President

Bob Howe Conformis Inc Chief Financial Officer NxStage Medical Vice President, Finance 5-Feb-20 and Treasurer Inc and Corporate Controller

Kenji Crescendo Chief Medical Officer Roche Associate Clinical Director 3-Feb-20 Hashimoto Biologics Ltd

40 | In Vivo | March 2020 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

Take an interactive look at recent executive-level company changes and READ MORE promotions in the biopharma, medical device and diagnostics industries. ONLINE Visit: invivo.pharmaintelligence.informa.com

❚ P.J. HALEY ❚ JURIS HMELNICKIS ❚ JAMES NICHOLS ❚ DAVID HORN SOLOMON

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Alison L. CytomX Chief Medical Officer Pharmaceutical and 3-Feb-20 Hannah Therapeutics Inc and Senior Vice Biotech Consultant President

Pascal Wotling DBV Chief Technology Novartis Head, External Supply 1-Apr-20 Technologies Operations Officer Operations, Asia-Pacific, Middle East and Africa

David Morris Enterprise Chief Medical Officer Novartis Venture Managing Director 10-Feb-20 Therapeutics Ltd Fund

Theresa Freeline Chief Executive Alnylam Head, CEMEA and Senior 4-Feb-20 Heggie Therapeutics Officer and Director Pharmaceuticals Vice President

Lisa Geller Frequency Head, Intellectual Casebia Head, Intellectual 7-Feb-20 Therapeutics Property Therapeutics Property

Wendy Arnold Frequency Chief People Officer Kaleido Senior Vice President, 7-Feb-20 Therapeutics BioSciences Human Resources

Vesa Kataja Kaiku Health Chief Medical Officer Central Finland Chief Medical Director 1-Feb-20 Health Care District

Rob van Khondrion BV Chief Medical Officer Astellas Pharma Senior Medical Director 5-Feb-20 Maanen

Kristen Stants Magenta Chief People Officer Alexion Head, Talent Strategy 5-Feb-20 Therapeutics Pharmaceuticals

Ian Ball Medicom Commercial Director Aeques Chief Commercial Officer 1-Feb-20 Healthcare and Executive Pharmaceuticals Committee Member Inc

Jon Dill Midmark Corp Chief Financial Officer Orchard Holdings Operating Executive 3-Feb-20

Christophe Millendo Chief Medical Officer Poxel Chief Medical Officer, 10-Feb-20 Arbet-Engels Therapeutics Inc Pharmaceuticals Executive Vice President, Late Development and Medical Affairs

March 2020 | In Vivo | 41 ❚ ON THE MOVE

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Tom Griffin Nuvaira Inc Chief Financial Officer Avedro Inc Chief Financial Officer 4-Feb-20

Francois Oasmia Chief Executive Nivigenix SA Non-Executive Director 15-Mar-20 Martelet Pharmaceutical Officer AB

Peng Lu Pharvaris BV Chief Medical Officer Takeda Vice President, Global 7-Feb-20 Program Lead, Rare Diseases

Rajiv Patni Portola Chief Medical Officer Adamas Chief Medical Officer 3-Feb-20 Pharmaceuticals and Executive Vice Pharmaceuticals Inc President

Ranjay Reckitt Chief Human InterContinental Chief Human Resources 1-Mar-20 Radhakrishnan Benckiser plc Resources Officer Hotels Group Officer

James Nichols Relay Head, Genetic Warp Drive Bio Chief Operating Officer 4-Feb-20 Therapeutics Diseases

Nikolaus Safe Chief Commercial K2M General Manager, Central 3-Feb-20 Beyer Orthopaedics SA Officer and Northern Europe

Andrew Smith Santhera Chief Financial Officer Allecra Chief Financial Officer and 1-Apr-20 Pharmaceuticals Therapeutics Chief Operating Officer Holding AG GmbH

Archelle Starkey Hearing Chief Health Officer Consultant 10-Feb-20 Georgiou Technologies

Heinz Ruch Starkey Hearing Chief Business HRC Managing Partner 10-Feb-20 Technologies Development Officer Independence llc

Neal Bibeau TARGET Chief Executive Symphony Chief Executive Officer 13-Feb-20 PharmaSolutions Officer Health Solutions and President Inc

Tim Sawyer Teligent Inc Chief Executive Barr Executive Vice President, 5-Feb-20 Officer and President Laboratories Global Generic Sales and Marketing

Scott Trevena Inc Chief Legal and Context President 13-Feb-20 Applebaum Compliance Officer and Therapeutics Senior Vice President, Regulatory Affairs

David Verona Pharma Chief Executive Officer, Dova Chief Executive Officer 1-Feb-20 Zaccardelli plc President and Director Pharmaceuticals and President Inc

Robert Vividion Chief Scientific Pfizer Senior Vice President 11-Feb-20 Abraham Therapeutics Officer and Group Head, Oncology Research and Development

PROMOTIONS

EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE Stephen A. AngioDynamics Chief Financial Officer, General Senior Vice President, General 5-Feb-20 Trowbridge Inc Counsel and Executive Vice Counsel, Associate Secretary and President Interim Chief Financial Officer

Lila Corwin Biodex Medical Head, Global Physical Medicine Senior Vice President, Marketing 5-Feb-20 Systems Inc Sales Communications

Tom Mander Domainex Ltd Chief Executive Officer Chief Operating Officer 1-Apr-20

42 | In Vivo | March 2020 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

PROMOTIONS EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE P.J. Haley Exelixis Inc Executive Vice President, Senior Vice President, Commercial 1-Feb-20 Commercial

Yijun Huang EyeKor llc Chief Executive Officer President and Chief Technology 11-Feb-20 Officer

Hans van HAL Allergy Chief Research and Development Principal Scientist/Head, 1-Feb-20 Schijndel Group Officer and Director Preclinical Research

Lauren M.G. Kemin Head, Worldwide Manager, Worldwide 14-Feb-20 Burt Industries Inc Communications Communications

DIRECTORS EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE Scott Brun Axial Biotherapeutics Inc Director 12-Feb-20

Avner Lushi Brainsway Ltd Director and Member, Audit Committee 10-Feb-20

Jim Schuermann CorWave SA Independent Director 11-Feb-20

John Pedersen DYSIS Medical Ltd Chairman 10-Feb-20

Kevin C. O’Boyle GenMark Diagnostics Inc Chairman 10-Feb-20

Ronnie Hershman Hemostemix Inc Director 10-Feb-20

Juris Hmelnickis JSC Grindeks Chairman 4-Feb-20

Doug Manion Kleo Pharmaceuticals Chairman 14-Feb-20

Christine Seidman Merck & Co Inc Director 16-Mar-20

Kathy Warden Merck & Co Inc Director 16-Mar-20

Alex C. Sapir PhaseBio Pharmaceuticals Inc Director 13-Feb-20

David Horn Rexgenero Ltd Chairman 10-Feb-20 Solomon

Huw Jones Rexgenero Ltd Non-Executive Director and Chairman, 12-Feb-20 Remuneration Committee

John Markels Sangamo Therapeutics Inc Director 12-Feb-20

David McIntyre Starpharma Holdings Ltd Non-Executive Director 1-Mar-20

Paul Walker Trillium Therapeutics Inc Director 6-Feb-20

ADVISORS

EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE

Michael Briskin Obsidian Therapeutics Inc Chairperson, Scientific Advisory Board 5-Feb-20

Andreas Harstrick Orion Biotechnology Scientific Advisory Board Member 6-Feb-20

Anne J. Ridley RhoVac AB Scientific Advisory Board Member 6-Feb-20

Maksim Mamonkin Xenetic Biosciences Inc Scientific Advisory Board Member 13-Feb-20

March 2020 | In Vivo | 43 ❚ DEAL-MAKING

❚ Deal-Making Covering deals made February 2020

❚ IN VITRO DIAGNOSTICS ❚ IN VITRO DIAGNOSTICS FINANCINGS ADMA Biologics nets $88.9M via FOPO MERGERS & ACQUISITIONS MERGERS & ACQUISITIONS Adverum nets $141.2M through FOPO MERIDIAN BIOSCIENCE INC. Meridian Bioscience pays $49M AGTC nets $30.5M via FOPO EXALENZ BIOSCIENCE LTD. for Exalenz AVROBIO nets $94M via FOPO In an effort to become a leading provider of gastrointestinal diagnostic products, ❚ MEDICAL DEVICES Beam Therapeutics goes public via Meridian Bioscience Inc. is paying $49M $192.5M IPO in cash ($1.78 per share) to acquire Is- FINANCINGS Catalent raises €825M in debt offering raeli firm Exalenz Bioscience Ltd. (Feb.) NuVasive nets $436M via sale of debt To help fund MaSTherCell acquisition, Exalenz offers diagnostic tools and Catalent nets $493.9M in FOPO management devices for patients with liver and stomach disorders. Its lead- Catalyst Biosciences nets $32.4M ❚ PHARMACEUTICALS ing product is the BreathID urea breath through latest public offering test platform for detecting Helicobacter MERGERS & ACQUISITIONS Collegium secures $339M through pylori, which is often associated with Catalent buys cell therapy CDMO term loan agreement, public debt peptic ulcers and gastric cancer. The MaSTherCell for $315M raise to finance Nucynta deal BreathID system facilitates easy patient sample collection and provides real- Merck spins out women’s health and Deciphera nets $164.5M through time patient monitoring in a physician’s other mature businesses into newco public stock sale office setting. It is complementary to EyePoint nets $20.4M via FOPO Takeda exercises option to acquire Meridian’s own stool antigen tests celiac disease drug developer PvP Moderna nets $479.8M via FOPO and non-invasive diagnostics for H. py- Orphazyme raises DKK745M through lori. Meridian will fund the acquisition ALLIANCES PIPE through cash on hand and debt under an existing credit facility that is being Aimmune licenses rights to Xencor’s PPD nets $1.5bn in IPO expanded to $160M. Exalenz reported mAb for food allergies RAPT Therapeutics nets $70.5M via $14M in 2019 revenues. Investment Collegium buys US rights to Nucynta public offering Banks/Advisors: LCF Rothschild & Co. from partner Assertio RedHill enters $115M term loan Inc. (Meridian Bioscience Inc.); William RedHill gets rights to OIC drug agreement with HealthCare Royalty; Blair & Co. (Exalenz Bioscience Ltd.) Movantik from AstraZeneca $30M drawn down up front Bicycle Therapeutics finds a third Big Revance closes upsized $250M ❚ MEDICAL DEVICES Pharma partner in Roche’s Genentech notes offering to support DAXI commercialization FINANCINGS Biogen pays Sangamo $350M up front for up to 12 CNS programs Initial public offering nets $254.5M NUVASIVE INC. for Revolution Medicines BI, Trutino pen discovery-stage NuVasive Inc. (spine technologies) net- immune-oncology deal Schrodinger nets $216M in IPO ted $435.9M ($450M gross) through the private sale of 0.375% convertible Theravance nets $139.6M via FOPO EyePoint gets global rights senior notes due 2025 to qualified (excluding Greater China) to Valneva gets initial $60M in debt institutional buyers. The initial con- vorolanib from Equinox Science finanicng from Deerfield and OrbiMed version rate is 10.7198 shares of com- Seattle Genetics licenses antibodies Xeris nets $39.1M via FOPO mon stock per $1k principal amount of from Five Prime for ADC development notes, equivalent to $93.29 per share Public offering nets $85M forZiopharm GSK, Immatics team up in discovery (NuVasive’s stock is currently averaging $76.88). Concurrently the company en- and development of adoptive cell ❚ RESEARCH, ANALYTICAL therapies for cancer tered into privately negotiated convert- EQUIPMENT & SUPPLIES ible note hedge transactions and war- Nestle Health Science gets rights to rant transactions with certain parties. diabetes candidate from Valbiotis FINANCINGS NuVasive will use some of the proceeds Vir Bio, WuXi enter coronavirus Public offering nets $140.5M for to repurchase shares of its common collaboration Twist Bioscience stock and to pay for convertible note hedge transactions. (Feb.)

44 | In Vivo | March 2020 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com

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| 45 ) CODIT DEAL-MAKING In Vivo | In Vivo 2020 arch M (tapentadol) from its 2017 2017 its from (tapentadol) (its originator) in 2003. in 2003. originator) (its Grunenthal ’s humanized monoclonal monoclonal humanized ’s Inc. Xencor Nucynta in the US for $10mm up front, front, $10mm up for in the US Nucynta ALLIANCES ASSERTIO THERAPEUTICS THERAPEUTICS INC. ASSERTIO INC. PHARMACEUTICAL COLLEGIUM AIMMUNE THERAPEUTICS THERAPEUTICS INC. AIMMUNE INC. XENCOR , a recently , a recently Palforzia including programs al- peanut for immunotherapy approved years. 17 4 through ages in patients lergy will Aimmune the deal, of Under terms $5mm paid It costs. development all bear its of $5mm issued and front up in cash $32; market at common (156,238 shares the initiation with Beginning average). over hand also could it II trials, Phase of regulatory, in development, $385mm up to high-single plus milestones sales and Transactions (Strategic royalties mid-teen 7-16%). estimates acquired Inc. Pharmaceutical Collegium - analge opioid oral to rights US outright sic Assertio granted deal, 2017 Under a late - com to sublicense an exclusive Collegium (IR) both immediate-release mercialize (ER) formulations extended-release and of fees, in licensing annually $135mm to up - commercializa The 2017 royalties. plus the upon terminated been has deal tion purchase asset current the of signing pay Collegium has agreement, which front, up in cash ing Assertio $375mm licensed licensed Inc. Therapeutics Aimmune and develop to rights global exclusive sell indi- allergy food for XmAb7195 antibody the project rename will Xencor cations. (Feb.) AIMab7195. the developing originally was Xencor mechanisms three uses candidate--which IgG and serum blood reduce to action of Phase cells--in IgE-producing suppress Aimmune asthma. allergic for I studies an as AIMab7195 develop to plans now Characterized own its to therapy adjunct ( ImmunoTherapy Desensitized Oral Assertio partner commercialization US (Feb.) Inc. Therapeutics De- as In 2015, Assertio (then known in 2018) paid names changed pomed; it US exclusive gain to front $1.05bn up - from Pharma Nucynta Janssen to rights the drug licensed had , which ceuticals from

- Bridion (ceftolozane/ Zerbaxa (HumanGardasil Papilloma (pembrolizumab), (pembrolizumab), Keytruda (infliximab-abda) and and Renflexis (infliximab-abda) - (ezeti Vytorin and (ezetimibe) Zetia

PVP BIOLOGICS INC. BIOLOGICS PVP LTD. CO. PHARMACEUTICAL TAKEDA legacy brands, and biosimilars businesses businesses biosimilars and brands, legacy publicly unnamed yet as a separate into (Feb.) company. traded the be under housed will that brands Key - (etono the Nexplanon include new entity - bio device, birth control implant) gestrel similars and immunology in (etanercept) Brenzys oncology in (trastuzumab-dttb) Ontruzant other and Bioepis, Samsung partner with cholesterol the including brands strong drugs 75% Approximately mibe/simvastatin). generated be will sales new firm’s the of 2021 estimated with markets, ex-US from Merck $6bn-$6.5bn. between revenues of businesses lead existing its retain will hospital, vaccines, oncology, diabetes, brands key current Its health. animal and include (lenvatinib Lenvima (olaparib), Lynparza mesylate), Recombinant), Vaccine, virus Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal deal sciences life tracking for source premium Informa’s Transactions, Strategic from Derived relevant by listed transactions care health recent of survey a is column Deal-Making the activity, Analytical Research, and Pharmaceuticals, Devices, Medical Diagnostics, Vitro – In segment industry or Financing. Alliance, – Acquisition, type by then categorized and – Supplies and Equipment terms, financial and structural analysis, deal in-depth with daily updated is Transactions Strategic contracts. SEC-filed to links and or 888-670-8900 at Care Customer contact please access about information For [email protected] acquired acquired Ltd. Co. Pharmaceutical Takeda - develop firm private a , Inc. PvPBiologics celiac for treatment ing an investigational (Feb.) disease. up amount an undisclosed paid Takeda in $330M to up over hand will and front of on the achievement based earn-outs milestones. regulatory and development PvP entered and Takeda 2017, In early the de- surrounding an agreement into (Kuma062/ KumaMAx PvP’s of velopment to designed enzyme an oral TAK062), of parts the immune-reactive down break - gas prevent and stomach the in gluten with in patients reactions trointestinal $35mm for paid Takeda disease. celiac therapy’s the to related PvP’s expenses an exclusive got and development, early a Phase PvP following acquire option to The study study. I proof-of-mechanism has Takeda and completed, now has PvP. buy option to its exercised (sugammadex), (sugammadex), (fluralaner). Bravecto and tazobactam), be headquartered will The new company approximately staff US, and in New Jersey, the be at will Ali Kevin employees. 10k chairman. as Cox Carrie with CEO, helm as completed to be expected is The spin-off 1H 2021. during

- - - Cognate Cognate , Therapeutics CRISPR among its clients. Great Great clients. among its is joining the downsizing downsizing the joining is . Driving . Driving Biologics Cobra through a stock swap worth swap a stock through PHARMACEUTICALS MERGERS & ACQUISITIONS & MERGERS CATALENT INC. CATALENT INC. ORGENESIS MERCK & CO. INC. CO. & MERCK ❚ MaSTherCell Global Inc. Global MaSTherCell - the con of sign In another unsurprising in the advanced consolidation tinued Catalent market, manufacturing therapy cell Belgian held privately bought Inc. Inc. Global MaSTherCell CDMO therapy the funding is Catalent $315M in cash. for FOPO. a concurrent through transaction a $200M loan received also The company (Feb.) JP Morgan. from commitment - the manu of been part has itself Catalent $1.2bn for paid having frenzy, facturing Other 2019. in April Bioservices Paragon manufactur therapy gene and cell recent Merck & Co. Inc. Co. & Merck health, women’s its off spinning by trend / Thermo Fisher included have ing deals and $1.7bn for Bio Brammer a more has now it says Catalent deal, rent respect with offering end-to-end complete analytical, manufacturing, development, to services. supply clinical and fill-finish, de Bruxelles Libre Universite of out Spun indepen- operated in 2011, MaSTherCell by bought was 2015 when it until dently Orgenesis the divestment Orgenesis, (For $24.6M. point-of-care its on more focus will it means development and business therapy cell cur MaSTherCell therapies.) advanced of major three building or is operates rently (clinical 25k- of facilities, manufacturing and (development-scale), 32k- services), sizes, feet square (commercial-scale) 60k- al- and autologous both in specializes and T-cell CART, as such therapeutics logeneic lymphocytes, tumor-infiltrating receptors, overall Its cells. stem mesenchymal and process collection, cell include services services, analytical industrialization, quality in-house and manufacturing, cGMP Iovance counts the company and control, , Biotherapeutics TxcellServier, and investors. are SFPI-FPIM and Partners Point / BioServices 70% the estimated is agreements these that developers therapy gene and cell of cur the With manufacturing. outsource company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

without the requirement to pay Assertio with Bicycle responsible for the discovery, mercialization. Sangamo will manufacture ongoing royalties. In addition, Collegium lead optimization, and early preclinical clinical supplies of the initial three products, will pay Grunenthal a flat 14% royalty on work up to the point when Genentech may and Biogen is responsible for GMP manu- net sales instead of the $34mm (annual) exercise an option to select a candidate for facturing activities beyond the first clinical royalty obligation previously owed on exclusive worldwide licensing. The agree- trial for each of those products. Sangamo’s sales equal to or greater than $180mm ment will include two immuno-oncology compounds were developed using its zinc under the former deal. The present ar- targets; Genentech has the option to add finger protein transcription factors (ZFP-TF) rangement is expected to increase Col- an additional two targets for a cost of genome regulation platform. The ZFP-TF are legium’s cash flows more than four-fold. $10M per program. Genentech will then delivered via adeno-associated virus (AAV) Collegium already sells pain drug Xtampza take over remaining development and to modulate the DNA involved in neurologi- ER, an abuse-deterrent, extended-release, commercialization. Bicycle gets $30M up cal diseases and thus selectively repress or oral formulation of oxycodone launched front; $10–12M per program (a maximum activate the expression of specific genes to in 2016, with expected 2020 revenues total of $48M); $200M in development, achieve a desired therapeutic effect. The between $150-160mm. The 2020 Nucynta regulatory and first sale milestones parties seek to create the first disease- revenues are anticipated in the range per program; $200M in commercial modifying treatments for patients with of $170-180mm. Collegium is financing milestones for each product; and tiered neurodegenerative diseases such as AD and the transaction with cash on hand and mid-single-to-low-double-digit royalties. PD. Just last month Biogen paid $75M up $339mm in committed debt financing, Bicycles are short peptides developed as front for Pfizer Inc.’s Phase I casein kinase including a concurrent $200mm term loan either stand-alone candidates or linked 1 inhibitor PF05251749 for patients with AD facility from BioPharma Credit PLC and together to enable binding to two or more and PD. Under that deal Biogen could shell a $139mm public offering of convertible tumor antigen targets. One key advantage out another $635M in development and senior notes. Investment Banks/Advi- of Bicycles is that they are excreted by the commercial milestones, plus an estimated sors: Stifel Nicolaus & Co. Inc. (Assertio kidney, not the liver, and therefore avoid 7-12% in royalties. In a recent conference Therapeutics Inc.); Jefferies & Co. Inc. immunogenicity issues. In oncology, Bi- call, Biogen announced that it is actively (Collegium Pharmaceutical Inc.) cycle is exploring Bicycle toxin conjugates engaging with the FDA on its Phase III AD in which the peptide is linked to a toxin therapy aducanumab and seeks to complete ASTRAZENECA PLC that is later cleaved and destroys the tu- the regulatory filing in the near future. REDHILL BIOPHARMA LTD. mor (Bicycle’s internal oncology programs RedHill Biopharma Ltd. licensed worldwide are not part of the Genentech alliance). BOEHRINGER INGELHEIM rights (excluding Europe, Canada, and Roche and Genentech are quite active in INTERNATIONAL GMBH Israel) to the GI drug Movantik (naloxegol) immuno-oncology, particularly with their TRUTINO BIOSCIENCES from AstraZeneca PLC. (Feb.) marketed PD-L1 inhibitor Tecentriq, which Boehringer Ingelheim GmbH and Trutino Movantik, a peripherally acting mu-opioid is approved in many cancers and being Biosciences penned a collaboration sur- receptor antagonist (PAMORA), is approved investigated as a monotherapy and com- rounding the latter’s On-Demand Cytokine to treat opioid-induced constipation (OIC) in bination in multiple tumor types. Roche/ (ODC) platform. (Feb.) adults with chronic non-cancer pain. Under Genentech are also investigating other Compared to traditional cytokine treat- terms of the deal, RedHill pays $52.5M mechanisms; most recently Genentech ments, Trutino’s ODC platform masks upfront, and a non-contingent payment teamed up with Xencor in the area of IL-15 the activity of systemically delivered of $15M 18 months after the deal closes. bispecific cytokine therapeutics. The tie- cytokines, keeping them inactive in the RedHill will finance the deal through a up with Bicycle comes days after Roche body until they reach the tumor site, concurrent $115M royalty-backed term signed another peptide-focused deal with where they are fully activated. BI gets ac- loan from HealthCare Royalty. AstraZeneca Nimble Therapeutics. cess to ODC to generate and develop up originally licensed Movantik from Nektar in to three new cancer immunotherapies, to 2009; RedHill now assumes sales-based BIOGEN INC. which it will have global rights. The deal royalty and milestone payments due to Nek- SANGAMO THERAPEUTICS INC. includes undisclosed up-front money in tar. Additionally, AZ granted Daiichi Sankyo Sangamo Therapeutics Inc. licensed Biogen addition to development, regulatory, and co-commercialization rights in the US under Inc. exclusive global rights to develop and sales milestones, and royalties. The 2018 a 2015 collaboration. As a result of the new commercialize preclinical ST501 for tauopa- start-up is responsible for generating and deal, RedHill assumes US rights and leads thies including Alzheimer’s disease (AD) and preclinically validating new ODC mol- US commercialization, but will continue to ST502 for synucleinopathies including Par- ecules, after which BI will take over late share costs and pay sales-related commis- kinson’s disease (PD), plus an undisclosed preclinical testing through the remainder sions to Daiichi. neuromuscular disease target. Biogen also of development. The goal of the collabora- has exclusive rights to nominate up to nine tion is to develop both single-agent cy- BICYCLE THERAPEUTICS PLC other undisclosed neurological disease tokine therapeutics as well as therapies ROCHE targets over a five-year period. (Feb.) in combination with BI’s existing cancer Genentech Inc. Biogen will shell out $350M up front in the vaccine, oncolytic virus, T cell engager, Roche’s Genentech Inc. and Bicycle Thera- form of $125M in cash and a $225M equity and myeloid-targeting programs. peutics PLC agreed to discover, develop, investment in Sangamo (24M shares $9.21 and sell bicyclic peptide immuno-oncol- each; a 25% premium). Sangamo is also EQUINOX SCIENCE LLC ogy therapies against multiple targets eligible for up to $925M in development EYEPOINT PHARMACEUTICALS INC. chosen by Genentech. (Feb.) and regulatory milestones, $1.45B in com- Equinox Science LLC licensed EyePoint Bicycle, which completed an IPO last year, mercial milestone payments, and royalties Pharmaceuticals Inc. exclusive rights to already has two Big Pharma partners in the high-single-digits to sub-teen double- develop and commercialize vorolanib including a $1B deal with AstraZeneca digits (estimated at 7-12%). Under the agree- worldwide (excluding China, Macau, Hong focused on multiple therapy areas, and a ment, Sangamo will conduct early research Kong, and Taiwan). (Feb.) $466M sickle cell/hemophilia agreement activities to be funded by both companies. EyePoint will pay Equinox $1M up front, with Bioverativ, which was later bought Biogen is responsible for performing and up to $50M in milestones based on de- by Sanofi. The new partners will jointly funding IND-enabling studies, clinical trials, velopment (completion of a Phase II trial) conduct discovery and preclinical studies, regulatory activities, and worldwide com- and regulatory (tied to activities in the

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| 49 DEAL-MAKING In Vivo | In Vivo 2020 arch netted netted Inc. AVROBIO M ADVERUM BIOTECHNOLOGIES INC. BIOTECHNOLOGIES ADVERUM CORP. TECHNOLOGIES GENETIC APPLIED AVROBIO INC. AVROBIO THERAPEUTICS BEAM INC. each. The company will use the proceeds the proceeds use will The company each. - manu for needed materials raw obtain to - immunode humoral primary its facturing , Bivigam and Asceniv products ficiency both of commercialization ongoing for the manufacturing expand to products, R&D for facilities, its one of of capacity - col plasma our expand to and activities, (Feb.) network. lection facility & Jefferies Banks/Advisors: Investment - Oppen & Co.; Stanley Morgan Inc.; Co. Inc. heimer & Co. (gene Inc. Biotechnologies Adverum diseases) rare and ocular for therapies public follow-on a through $141.2M netted - (includ shares common 10.9M of offering at overallotment) the of exercise ing full the of some use will company The $13.75. its of development ongoing for proceeds vector AAV and pipeline therapy gene (Feb.) platform. discovery & Co. Cowen Banks/Advisors: Investment Capital LifeSci & Co.; Sachs Goldman LLC; Leerink SVB LLC; Corp. Technologies Genetic Applied (adeno-associated virus (AAV)-based (AAV)-based virus (adeno-associated netted diseases) rare for therapies gene of offering public in a follow-on $30.55M - The com $5 each. at shares common 6.5M complete to the funds use to plans pany retinitis X-linked its of I/II trials Phase achromatopsia (XLRP) and pigmentosa trial a pivotal initiate to programs, (ACHM) its advance to and XLRP program, the for (Feb.) program. optogenetics - Wain HC Banks/Advisors: Investment Scott Montgomery Janney & Co.; wright Wedbush Partners; Capital Roth Inc.; Se- Fargo Wells Sciences; Life PacGrow LLC curities firm therapy Gene offering public a follow-on $94M through each. $23 at shares 4.35M common of the funds some of use will The company programs its of development ongoing for Gaucher cystinosis, disease, Fabry for additional disease; Pompe and disease, - activi manufacturing and R&D activities; (Feb.) ties. & Co. Cowen Banks/Advisors: Investment Morgan LLC; Partners Guggenheim LLC; Inter Securities Nomura Co.; & Stanley - Sci Life PacGrow Wedbush Inc.; national LLC Securities Fargo Wells ences; genetic (precision Therapeutics Inc. Beam ed- base on a proprietary based medicines through $192.5M netted iting technology) common 12.2M of offering public initial its $17. at the overallotment) (including shares 6.25M to sell filed originally The company (Feb.) $15-17. of a range at shares

- - li- Vir Biotechnology Inc. Biotechnology Vir exclusive SA Science Nestle Health

FINANCINGS ADMA BIOLOGICS INC. BIOLOGICS ADMA VIR BIOTECHNOLOGY INC. BIOTECHNOLOGY VIR INC. PHARMATECH WUXI VALBIOTIS NESTLE SA NESTLE (developing plasma- (developing Inc. ADMA Biologics deficiencies immune for biologics derived $88.9M netted diseases) infectious and offering public follow-on an upsized via full (including shares common 27M of $3.50 at the overallotment) of exercise WuXi Biologics WuXi and Biologics WuXi hu- of in the development up teaming are treating for antibodies monoclonal man which (COVID-19), 2019 disease coronavirus - syn respiratory acute severe by caused is (Feb.) 2 (SARS-CoV-2). coronavirus drome SARS from antibodies isolated has Vir that mAbs several identified and patients conduct will Both firms SARS-CoV-2. to bind and manufacturing, development, clinical WuXi the antibodies. of commercialization process development, perform cell-line will initial and development, formulation and Upon ap- trials. clinical for manufacturing commercialize to rights gets WuXi proval, Hong Kong, Macau, in China, the therapies commercialization has Vir while Taiwan, and a is There markets. other global in all rights the global address to therapy a for need dire threat. COVID-19 In a long-term collaboration, Valbiotis collaboration, In a long-term censed commer and develop to rights worldwide risk at prediabetics for TOTUM-63 cialize (Feb.) 2 diabetes. Type for pay will Nestle the rights, for In exchange to up front, up $5.2M (CHF5M) Valbiotis - mile sales and development in $68.4M - Valbi royalties. sales tiered plus stones, the latest fund to the money use will otis health until development clinical of phase Europe. and in the US obtained are claims prior to happen may (Commercialization partiesThe claims.) health those obtaining to committee steering a joint create will regulatory development, clinical oversee commercialization. and supply, activities, TOTUM-63. with Nestle supply will Valbiotis - combina a patented is I/II TOTUM-63 Phase reduce to designed extracts 5 plant tion of in 2 Diabetes Type developing of the risk - abil its demonstrated has It prediabetics. blood two-hour and fasting reduce to ity for markets global key The levels. sugar Russia, US, the Europe, include TOTUM-63 Australia. and Brazil, Japan, China, - Im request GSK’s At commercialization. one or co-develop to choose can matics Immat 2019, August In programs. more SA Science Health Nestle for for Celgene with deal a similar signed ics cancer. for therapies cell adoptive , - , ADC Therapeutics . Seattle Genetics’ antibody antibody Genetics’ . Seattle , bio bluebird TCR discovery and engineering and discovery TCR , , the breast cancer cancer , the breast Merck and , and UCB , and BMS GLAXOSMITHKLINE PLC GLAXOSMITHKLINE GMBH BIOTECHNOLOGIES IMMATICS FIVE PRIME THERAPEUTICS INC. THERAPEUTICS PRIME FIVE INC. GENETICS SEATTLE and and GmbH Biotechnologies Immatics to up teaming are PLC GlaxoSmithKline next- develop and research, discover, therapies (TCR) receptor T-cell generation (Feb.) tumors. solid for will the collaboration of focus The initial the but therapies T-cell be autologous al- to develop look eventually may firms Immatics’ using therapies cell logeneic its utilize will Immatics approach. ACTallo XCEPTOR be will which identify to TCRs platform discovered targets two against directed technol XPRESIDENT its by validated and therapy tucatinib (NDA submitted). submitted). (NDA tucatinib therapy enfortumab vedotin for solid tumors with tumors solid for vedotin enfortumab Astellas $50M (€45M) Immatics pay will GSK ogy. and programs initial the two for front up regulatory, development, in $550M to up plus each, for milestones commercial and select to opt can GSK royalties. sales out shell would and targets additional milestones, payments, option additional Under the collaboration, royalties. and - the develop for responsible is Immatics therapies the TCR of validation and ment after designation, candidate clinical to up additional over take will time GSK which and manufacturing, development, global pipeline includes blood cancer candidate candidate cancer blood includes pipeline partner Takeda (with vedotin brentuximab GSK granted Se- granted Inc. Therapeutics Prime Five rights global exclusive Inc. attle Genetics - conju antibody-drug sell and develop to antibodies with cancer for therapies gate Prime. (Feb.) Five by developed to licensed antibodies The monoclonal a towards directed are Genetics Seattle Prime gets Five target. undisclosed single - in develop $525M to up front, $5M up milestones sales and ment, regulatory, and projects), two the first for each ($295M (Strategic digits mid-single the in royalties Prime Five 4-7%). estimates Transactions of list strong a to Genetics Seattle adds company’s the from benefiting partners - includ space, in the antibody expertise ing US, UK, or EU) achievements, plus sales sales plus EU) achievements, US, UK, or to in the high-single ranging royalties Transactions (Strategic digits low-double (EYP1901) Vorolanib 7-29%). estimates Du- bioerodible EyePoint’s incorporates drug intravitreal sustained-release rasert kinase The tyrosine technology. delivery studies preclinical in currently is inhibitor degeneration, macular age-related wet for vein retinal and retinopathy, diabetic to expected is I trial A Phase occlusion. results top-line with in 2020, commence in H2 2021. anticipated company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

Investment Banks/Advisors: Barclays Bank $164.5M through the public sale of PPD INC. PLC; JP Morgan Chase & Co.; Jefferies & Co. 3.18M common shares at $55. Proceeds PPD Inc., a PE-owned contract research or- Inc.; Wedbush PacGrow Life Sciences will support continued development of ganization (CRO), netted $1.5B in its initial candidates including ripretinib (Phase III CATALENT INC. public offering of 60M shares at $27, the high for gastrointestinal stromal tumors and end of its anticipated $24-27 range. (Feb.) Life sciences service provider Catalent Phase I for systemic mastocytosis and Inc. (drug delivery and manufacturing of Investment Banks/Advisors: Bank of America other solid tumors), DCC3014 (Phase I for Merrill Lynch; Barclays Bank PLC; Citigroup pharmaceuticals, biologics, and consumer solid tumors and tenosynovial giant cell health products)--through its subsidiary Inc.; Credit Suisse Group; Deutsche Bank AG; tumors), rebastinib (Phase I/II for solid Evercore Partners; Goldman Sachs & Co.; Catalent Pharma Solutions Inc.--raised tumors), and DCC3116 (preclinical ULK HSBC; JP Morgan & Co.; Jefferies & Co. Inc.; €825M ($903.4M) through the sale of kinase inhibitor). (Feb.) Mizuho Bank Ltd.; Morgan Stanley & Co.; 2.375% senior unsecured notes due 2028. Robert W. Baird & Co. Inc.; UBS Securities The offering was originally expected to be Investment Banks/Advisors: Guggenheim LLC; William Blair & Co. worth significantly lower, €450M. Catalent Partners LLC; JP Morgan Chase & Co.; Jef- will use some of the proceeds to redeem in feries & Co. Inc.; SunTrust Banks Inc. RAPT THERAPEUTICS INC. full its euro-denominated 4.750% senior EYEPOINT PHARMACEUTICALS INC. RAPT Therapeutics Inc. (small-molecule notes due 2024 and to repay existing loans. netted therapies for cancer and inflammatory dis- Just weeks ago the company brought in EyePoint Pharmaceuticals Inc. $20.4M in a follow-on public offering eases) netted $70.5M through a public of- $493.9M through a FOPO to support its fering of 2.5M common shares at $30. Funds recent acquisition of MaSTherCell. (Feb.) of 15M common shares at $1.45 each. The company will use the proceeds for will support continued development of CCR4 CATALENT INC. ongoing commercialization of Dexycu antagonists FLX475 for solid tumors and RPT193 for inflammatory diseases. (Feb.) Catalent Inc. (integrated services, drug (dexamethasone intraocular suspension) delivery systems, and contract manufac- for postoperative inflammation and Yutiq Investment Banks/Advisors: BMO Financial turing and development for pharmaceuti- (fluocinolone acetonide intravitreal im- Group; Cantor Fitzgerald & Co.; UBS Invest- cal, biologics, and consumer markets) plant) for chronic non-infectious uveitis ment Bank; Wells Fargo Securities LLC netted $493.9M by selling 8.4M shares at affecting the posterior segment of the eye. REDHILL BIOPHARMA LTD. $58.58. Catalent will spend approximately Additional funds will be used for ongoing GI disease drug developer RedHill Bio- R&D activities including EYP1901. (Feb.) $330M of the proceeds on its concurrent pharma Ltd. entered into a $115M non- acquisition of fellow cell therapy CDMO Investment Banks/Advisors: Guggenheim dilutive royalty-backed term loan agree- MaSTherCell Global, and the rest will be Partners LLC; Laidlaw & Co. ment with HealthCare Royalty Partners used to pay down $100M in debt. (Feb.) (HCR). (Feb.) Investment Banks/Advisors: JP Morgan & MODERNA INC. Co.; UBS Investment Bank Moderna Inc. (messenger RNA therapies REVANCE THERAPEUTICS INC. and vaccines) netted $478.75M through Revance Therapeutics Inc. closed a private CATALYST BIOSCIENCES INC. a follow-on offering of 26.3M common placement of $250M (net $242M) aggre- Catalyst Biosciences Inc. (treatments for shares at $19 each. (Feb.) gate principal amount (increased from rare diseases and complement-mediated Investment Banks/Advisors: Barclays $200M) of its 1.75% convertible senior disorders) netted $32.4M through a public Bank PLC; Chardan Capital Markets; Gold- notes due 2027. (Feb.) offering of 5.3M common shares (includ- man Sachs & Co.; Morgan Stanley & Co.; REVOLUTION MEDICINES INC. ing the overallotment) at $6.50. Some Needham & Co. Inc.; ODDO BHF; Oppen- Revolution Medicines Inc. (oncology) of the funds will support development heimer & Co. Inc.; Roth Capital Partners and manufacturing activities for Phase II netted $254.5M through its initial public projects MarzAA (marzeptacog alfa; hemo- ORPHAZYME AS offering of 16.1M common shares (includ- philia and bleeding disorders) and DalcA Orphazyme AS (developing treatments for ing the overallotment) at $17. The company (dalcinonacog alfa, hemophilia B). (Feb.) orphan neuromuscular protein-misfolding originally filed to sell 10M shares at a Investment Banks/Advisors: Chardan diseases) grossed DKK745M ($109.6M) range of $14-16. (Feb.) Capital Markets; LifeSci Capital LLC; Ray- through the directed issue and private Investment Banks/Advisors: Cowen & Co. mond James & Associates Inc. placement of 7M shares (consisting of LLC; Guggenheim Partners LLC; JP Morgan Chase & Co.; SVB Leerink COLLEGIUM PHARMACEUTICAL INC. 4M new shares and 3M existing shares) at DKK106 apiece (a 9% discount). The SCHRODINGER INC. Collegium Pharmaceutical Inc. received company will use the proceeds to fund a total of $339.4M in committed debt Schrodinger Inc. netted $216M in an initial US and European regulatory submissions financing to support in part its concurrent public offering of 13.7M shares (including the (anticipated in 1H 2020 and 2H 2020, $375M purchase of US rights to oral opioid overallotment) at $17; it originally planned respectively) for arimoclomol in Niemann- analgesic Nucynta (tapentadol) from its to sell 10M shares at a $14-16 range. (Feb.) Pick disease Type C and prepare for its 2017 partner Assertio Therapeutics Inc. It Investment Banks/Advisors: BMO Financial commercial launch expected in 2021. secured a $200M term loan facility from Group; Bank of America Merrill Lynch; Jeffer- The funds will also support completion of BioPharma Credit PLC. The four-year loan ies & Co. Inc.; Morgan Stanley & Co. will bear interest at a rate based upon LI- arimoclomol trials in amyotrophic lateral BOR, plus 7.5% per annum. The company sclerosis (Phase III) and sporadic inclu- THERAVANCE BIOPHARMA INC. also publicly sold $143.75M ($139.4M net), sion body myositis (Phase II/III)--sNDA Theravance Biopharma Inc. (develop- including the overallotment, in 2.625% filings for both indications are expected ing organ-selected medicines) netted convertible senior notes due 2026. (Feb.) in 2H 2020--and preparation of regulatory $139.6M through a follow-on offering of filings in Europe. Orphazyme is also devel- Investment Banks/Advisors: Jefferies & Co. Inc. 5.5M ordinary shares at $27 each. (Feb.) oping arimoclomol for Gaucher disease Investment Banks/Advisors: Cantor DECIPHERA PHARMACEUTICALS INC. (Phase II). (Feb.) Fitzgerald & Co.; Cowen & Co. LLC; Credit Deciphera Pharmaceuticals Inc. (kinase Investment Banks/Advisors: Danske Bank Suisse Group; JP Morgan & Co.; Morgan inhibitor therapies for cancer) netted AS; Guggenheim Partners LLC Stanley & Co.; Needham & Co. Inc.

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VALNEVA SE Valneva SE announced a debt financing with Deerfield Management and OrbiMed. editors editorial advisory board The company gets an initial $60M in debt Lucie Ellis Brian Chapman (with interest at a fixed high-single-digit Executive Editor ZS Associates, Partner rate) and can draw down another $25M in the next 12 months. Amortization payments Ben Comer will start in three years, and the loan will Pharma Editor Don Creighton mature in six years. Valneva will use the Ashley Yeo ICON, Global Head of Pricing proceeds to repay its existing loan from the Medtech Editor & Market Access European Investment Bank and to continue Amanda Micklus advancing its lead program in Lyme disease Principal Analyst Sara Jane Demy and chikungunya virus. (Feb.) Demy Colton, CEO Andrea Charles Investment Banks/Advisors: Guggenheim Custom Content Editor Partners LLC Regina Paleski Barbara Freischem XERIS PHARMACEUTICALS INC. Contributing Editor European Biopharmaceutical Xeris Pharmaceuticals Inc. netted $35.1M Enterprises Executive Director through a follow-on public offering of 9M common shares at $4.15 each. The com- director, medtrack & pany will use some of the funds to support strategic transactions content Les Funtleyder commercialization activities of Gvoke for Patricia Giglio E Squared Capital Management delivery of ready-to-use glucagon, and for deals analysts Health Care Portfolio Manager R&D activities of its pipeline. (Feb.) Beth Detuzzi, Deanna Kamienski Maureen Riordan Investment Banks/Advisors: Jefferies & Annlisa Jenkins Co. Inc.; Mizuho Bank Ltd.; Piper Jaffray PlaqueTec, CEO & Co.; RBC Capital Markets head of publication design ZIOPHARM ONCOLOGY INC. Gayle Rembold Furbert Harris Kaplan Ziopharm Oncology Inc. netted $85M Red Team Associates, senior designer through a public offering of 27.8M com- Managing Partner Janet Haniak mon shares at $3.25. Proceeds are earmarked for continued development designers Ellen Licking of the company’s lead projects, which Debi Robinson, Jean Marie Smith, Paul Wilkinson EY, Senior Analyst, include TCR-T targeting neoantigens for Global Life Sciences solid tumors and an adenovirus-based virotherapy combined with a gene delivery system for brain cancer. (Feb.) head of editorial ops (pharma) Roger Longman Real Endpoints, Chairman Investment Banks/Advisors: Cantor Karen Coleman Fitzgerald & Co.; HC Wainwright & Co.; advertising Jefferies & Co. Inc.; Laidlaw & Co.; Lake Christopher Keeling William Looney Street Capital Markets Specialist Writer subscriptions Dan Simmons, Shinbo Hidenaga ❚ RESEARCH, ANALYTICAL managing director Kenneth Schultz, MD EQUIPMENT & SUPPLIES Phil Jarvis Trethera Corporation, Chairman and CEO FINANCINGS TWIST BIOSCIENCE CORP. editorial office Melanie Senior 605 Third Avenue, Floor 20-22 Healthcare Writer & Analyst Twist Bioscience Inc. netted $140.5M New York, NY 10158 through an upsized public offering of 5.3M invivo.pharmaintelligence.informa.com common shares (including the overallot- Jack Wong ment) at $28. (The company originally customer service Allergan, Associate VP, Regulatory Affairs, planned to sell $100M.) Twist developed [email protected] Asia Pacific, Middle East & Africa a silicon-based high-throughput DNA synthesis platform and will use the offering proceeds to further invest in the company’s R&D organization (including IN VIVO: [ISSN 2160-9861] is published monthly, except for the combined July/August issue, pharmaceutical biologics drug discovery by Informa Business Intelligence, Inc., 605 Third Avenue, Floor 20-22, New York, NY 10158. and DNA data storage) and in commer- US Toll-Free: +1 888 670 8900 | US Toll: +1 908 547 2200 | UK & Europe: +44 (20) 337 73737 cialization efforts supporting NGS, drug Australia: +61 2 8705 6907 | Japan: +81 3 6273 4260 discovery, and global expansion. (Feb.) Office of publication, The Sheridan Group, 66 Peter Parley Row, Berlin, CT 06037. Investment Banks/Advisors: Cowen & Co. Postmaster: Send address changes to Informa Business Intelligence, 605 Third Avenue, LLC; Evercore Partners; JP Morgan Chase Floor 20-22, New York, NY 10158. & Co.; Robert W. Baird & Co. Inc. © 2020 by Informa Business Intelligence, Inc., an Informa company. All rights reserved. No part of this publication may be reproduced in any form or incorporated into any information retrieval system without the written permission of the copyright owner.

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