By in Vivo's Biopharma, Medtech and Diagnostics Teams

invivo.pharmaintelligence.informa.com JANUARY 2018

Invol. 36 ❚ no. 01 Vivopharma intelligence ❚ informa

2018 OUTLOOK

By In Vivo’s Biopharma, Medtech and Diagnostics Teams PAGE LEFT BLANK INTENTIONALLY invivo.pharmaintelligence.informa.com STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION-MAKERS CONTENTS ❚

In Vivo Pharma intelligence | January 2018

BIOPHARMA MEDTECH 2018 DIAGNOSTICS OUTLOOK

12 22 28 Biopharma 2018: Medtech 2018: Diagnostics 2018: Is There Still A Place For Pharma The Place For Innovation Steady Progress And In The New Health Care As Value-based Health Care The Big Get Bigger Economy? Gains Momentum MARK RATNER WILLIAM LOONEY ASHLEY YEO If the beginning of 2017 was marked 2018 will be a time of transition in health 2017 was a watershed year in many by doubts around whether and how care, when biopharma’s counterparts respects, politically, economically the FDA would act with respect to in adjacent industry segments scale up and commercially for many players complex diagnostics, we enter 2018 in a radical redesign of their traditional in the medtech field. Where will the feeling that slow-moving vessel may business models. Biopharma is not opportunities lie in 2018? Will finally be turning. moving as quickly, and it confronts a breakthrough medtech innovation still strategic dilemma on how to address the have a place among providers often prospect of a much more powerful set of riding on fumes when it comes to 36 rivals in the ongoing battle to own the budgets, and is it all as bad as some patient experience in medicine. would make out? Thirty-five Years Covering Health Care: The More Things Change… 30 PETER CHARLISH A Virtuous Cycle: What The The health care industry has come a Immuno-Oncology Revolution long way in the past 35 years, although Means For Other Disease Areas in some areas very little has changed. Recently retired In Vivo editor Peter EMILY HAYES Charlish has seen most of the major Executives from Merck, Pfizer, Bristol, developments, and in his final feature AbbVie and smaller biopharmas weigh he looks back at some of the big stories in on how developments in cancer in a reporting career that began in the research may benefit other disease early 1980s. areas, especially autoimmune and neurological conditions.

January 2018 | In Vivo | 1 ❚ CONTENTS In Vivo Pharma intelligence | January 2018

DEPARTMENTS ❚ From The Editor 4 2017’ s TOP BIOPHARMA Welcome to our annual outlook issue, chock-full DEAL-MAKERS of insight and opinions about what to expect in AMANDA MICKLUS the coming year. AROUND THE INDUSTRY Bill Looney lays out six strategies for pharma companies struggling to find their footing in a 8 No Seismic Shifts As Torrential health care world suddenly populated by new Rain Dampens JPM Jamboree MIKE WARD players. He observes that in the competition to own the patient experience, biopharma risks be- 10 Wh at Will Keep Medtech Industry ing marginalized as medicines access becomes Leaders Awake At Night In 2018? the province of powerful third parties with a dif- BRIAN CHAPMAN ferent, budget-driven perspective on treating NANCY DVORIN 11 In Vivo’s Deals Of The Year disease. Contest Winners Ashley Yeo outlines tactics for pursuing innovation in a value-based world, NANCY DVORIN AND and points out the difficulty that some medtechs report in their transition to AMANDA MICKLUS full-blown partnership in health care delivery – many providers continue to 44 ON THE MOVE see them solely as purveyors of devices. On the diagnostics front, Mark Rat- ner expects continued evolution of regulatory pathways for complex tests in Significant recent job changes in 2018 and advises that artificial intelligence tools are poised to gain traction in pharma, medtech and diagnostics patient monitoring. REGINA PALESKI Also inside these pages: Mike Ward’s recap of JP Morgan, Emily Hayes’ look 48 DEAL-MAKING at extending immuno-oncology R&D into other therapeutic areas, and a list Deals Shaping The Medical Industry, of things that In Vivo Editorial Advisory Board member and ZS partner Brian December 2017 Chapman says are keeping medtech execs awake at night. Last but not least, THE STRATEGIC TRANSACTIONS TEAM our esteemed former colleague Peter Charlish reflects on a 35-year career writing about health care. EXCLUSIVE ONLINE CONTENT Have you taken our Pharma Feedback survey yet? There’s still time. Go to ❚ Raj Denhoy On The Drive For http://bit.ly/2yXash2. Everyone who completes the survey is in the running Growth In A Maturing Medtech for an Amazon gift voucher. Respondents also have the option to schedule Industry a meeting with us (phone or in-person) to tell us how we can better meet ASHLEY YEO your needs. ❚ Deals Driving Oncology: ImmunoGen CEO Mark Enyedy On Biopharma’s Year Ahead WILLIAM LOONEY ❚ Gottlieb’s FDA Lights A Fire In Vivo: Always Online First Under Medtech Policy Activity Relevant and exclusive online-only Don’t have an online user account? But Reimbursement Challenges content at your fingertips 24/7. Quickly and easily create one by clicking on the “Create your Remain Full access to our 35-year archive. DAVID FILMORE account” link at the top of the page. Access your subscription by visiting: ❚ Contact: Resilience Is Key For Medtechs invivo.pharmaintelligence.informa. [email protected] Facing Provider And Payer Flux com and log in. In 2018 or call: (888) 670-8900 or +1 (908) ASHLEY YEO 748-1221 for additional information. ❚ De als In Depth, November 2017 AMANDA MICKLUS /invivo @invivo /invivo

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❚ Up-Front SNAPSHOTS FROM JANUARY’S CONTENT

When it comes to the amount of money % put to work in the biotech sector, 2017 saw companies raise close to $73 billion There’s always a continual push to find globally, an almost $11 billion shortfall new technologies, but large-cap medtech from 2016. Part of the reason was the is always struggling with the balance of dearth of major merger and acquisition innovation and commodities. Even for activity during the year. Page 1 major groups like Medtronic, 50% or more of what they sell can be classified as “commodities.” http://bit.ly/2DviErZ

For big pharma, it’s a huge bet to shift direction: from investing in individual drugs to treat a disease to building customized, complex data sets that map the underlying genetic profiles of individual patients, resulting in interventions – not exclusively drug-based – that reverse or prevent the disease itself. Page 12

From Trump’s inauguration on January 20 through June, the FDA did not issue one medical device- or IVD- related guidance document. But once new commissioner Scott Gottlieb was settled in, the dynamic changed dramatically. http://bit.ly/2DC8F8k BCG says that while up to four-fifths of the US market is talking about risk-based/value-based outcomes, less than 15% of current US payments can be classified as value-based or risk-shared – and even those Just three anti-obesity products launched in the past are still largely fee-for-service plus 30 years stand out for having a novel mode of ac- an incentive, as opposed to a true tion: Roche’s Xenical, Novo Nordisk’s Saxenda and insurance risk, or population-based Arena Pharmaceuticals’ Belviq. But none of them is payment. Page 22 ideal. Page 36

Biopharma deal-making didn’t disappoint in 2017, despite the industry – Stada Arzneimittel AG was taken private, Reckitt Benck- continued friction on drug pricing and the pressure to improve iser Group PLC bought Mead Johnson Nutrition Co., and Fresenius R&D productivity. A co-development and co-commercialization SE & Co. KGAA’s Fresenius Kabi AG acquired Akorn Inc. Overlaying agreement between AstraZeneca PLC and Merck & Co. Inc. these transactions is the potential to change the way health care is involving the key immuno-oncology drugs Keytruda (pembro- accessed and delivered, with firms outside of the industry, namely lizumab) and Imfinzi (durvalumab), which are each being com- Amazon, intent on entering the pharma supply chain. Retain pharma- bined with the PARP inhibitor Lynparza (olaparib), was one of cy player and PBM CVS Health Corp. also has plans to better integrate the largest biopharma alliances signed in 2017, and continued health care delivery, announcing the largest deal of 2017 – the $77 the dominance of immuno-oncology in partnerships. Oncology billion acquisition of insurance company Aetna Inc. – to do just that. was also again the focus of the largest volume of companies We focus here on the deal-makers, showing which companies raising funds through venture rounds and IPOs. dominated the landscape in terms of deal volume and value, as There was significant consolidation in the consumer health well as the therapeutic categories that grabbed the most attention. Exhibit 1 2017’s Top Five Most Active Pharmaceutical In-Licensers

Listed below each company are its top deals by potential deal value ($m)* Includes deals by parent companies and their subsidiaries

POTENTIAL DATE LICENSER SUBJECT OF LICENSE DEAL VALUE

TAKEDA 2017 DEAL VOLUME: 15 | 2016 DEAL VOLUME: 7 (+114%) Oct. HemoShear HemoShear’s REVEAL-Tx platform to model liver diseases, including NASH 470 Aug. AstraZeneca Preclinical MEDI1341 for Parkinson’s disease 400 Jul. Tesaro Exclusive rights in certain Asian countries to niraparib 340 JOHNSON & JOHNSON 2017 DEAL VOLUME: 13 | 2016 DEAL VOLUME: 7 (+86%) Azymetric and EFECT platforms in the research, development, and Nov. Zymeworks 1,452 commercialization of up to six bispecific antibodies Peptide Discovery Platform System to identify and optimize macrocyclic/ Apr. PeptiDream constrained peptides against several metabolic and cardiovascular 1,150 targets Preclinical PTG200 plus related interleukin-23 receptor antagonists for Protagonist May all indications including inflammatory bowel diseases such as Crohn’s 990 Therapeutics disease and ulcerative colitis NOVARTIS 2017 DEAL VOLUME: 10 | 2016 DEAL VOLUME: 6 (+67%) Options on cardiovascular-related antisense candidates, Phase II AKCEA- Jan. Akcea Therapeutics 1,655 APO(a)-LRx and preclinical AKCEA-APOCIII-LRx Phase II anti-IL-1b allosteric monoclonal antibody gevokizumab Aug. Xoma 469 (XOMA052), plus other IL-1b antibodies for cardiovascular diseases May Durect Phase III post-operative pain candidate Posimir (bupivacaine) 293 BOEHRINGER INGELHEIM 2017 DEAL VOLUME: 9 | 2016 DEAL VOLUME: 6 (+50%) Exclusive option to acquire the Kv3.1/3.2 positive modulator platform, Autifony Dec. including lead compound, Phase I AUT00206 for schizophrenia and 740 Therapeutics Fragile X syndrome Treatments for fibrotic liver diseases, including those against targets Nov. MiNA Therapeutics that restore the metabolic functionality of epatocytes and prevent fibrotic 356 tissue formation in patients with NASH

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POTENTIAL DATE LICENSER SUBJECT OF LICENSE DEAL VALUE

Sept. Gubra Novel peptides that regulate food intake 300

MERCK & CO. INC. 2017 DEAL VOLUME: 7 | 2016 DEAL VOLUME: 6 (+17%)

Co-commercialization of Lynparza (olaparib) as a monotherapy and in Jul. AstraZeneca combination with other compounds, including Imfinzi (durvalumab) and 8,500 Keytruda (pembrolizumab) KalVista Plasma kallikrein inhibitors, including Phase I KVD001, for diabetic Oct. 761 Pharmaceuticals macular edema CUE Biologics platform to develop engineered biologics for autoimmune Nov. Cue Biopharma 374 diseases ROCHE 2017 DEAL VOLUME: 8 | 2016 DEAL VOLUME: 15 (-47%)

Dec. Idorsia Options on preclinical immuno-oncology candidates 467

Options on natural antibiotic compounds to combat multi-drug-resistant Oct. Warp Drive Bio 387 Gram-negative bacterial infections Bristol-Myers Phase II human growth and differentiation factor 8 antagonist Apr. 375 Squibb BMS986089 for Duchenne muscular dystrophy

*Potential Deal Value is the sum of up-front fees plus pre- and post-commercialization money.

SOURCE FOR ALL EXHIBITS: Strategic Transactions | Pharma Intelligence, 2018

Exhibit 2 Top 10 Biopharma Acquisitions Of 2017

POTENTIAL DEAL DATE ACQUIRER ACQUIRED PRIMARY ASSET(S) GAINED THROUGH DEAL VALUE ($M)* Integration of health care delivery through combination Dec. CVS Health Aetna 77,000 of retail pharmacy/PBM and insurance provider Johnson & Pulmonary arterial hypertension portfolio, including Jan. Actelion 30,173 Johnson Tracleer (bosentan) and Opsumit (macitentan) Reckitt Feb. Mead Johnson Pediatric nutrition products 17,689 Benckiser Cell and gene therapy platform in oncology, including Aug. Gilead Sciences Kite Pharma 11,900 the CAR-T therapy Yescarta (axicabtagene ciloleucel) Amneal Impax Oct. Creates the fifth-largest generics company in the US 8,661 Pharmaceuticals Laboratories Thermo Fisher May Patheon Contract development and manufacturing capabilities 7,200 Scientific Bain Capital, Feb. Stada Generic and OTC products 5,546 Cinven Partners Ariad Oncology therapeutics, including kinase inhibitor Jan. Takeda 5,200 Pharmaceuticals Iclusig (ponatinib) and brigatinib Pamplona Jun. Capital Parexel CRO capabilities 4,888 Management Apr. Fresenius Kabi Akorn Branded, generic, and OTC pharmaceuticals 4,684

*Includes the up-front fee plus any potential earn-out payments.

Exhibit 3 2017’s Top Deal-makers: Cancer, Neurology and Infectious Disease Alliances By Therapeutic Area*

Cancer 173 Neurology 88 Infectious & Viral Diseases 49 Immune Disorders 43 Metabolic Disorders 43 Respiratory 32 Gastrointestinal 31 Ophthalmic 30 Cardiovascular 29 Gynecological, Urological 23 Blood & Coagulation Disorders 21 Dermatology 21 Musculoskeletal 19 Inflammation 17 Hepatic 11 Renal 8 Otolaryngology 5 Wound Healing 5 Dental 2 Poison 1 0 20 40 60 80 100 120 140 160 180 Number Of Deals

*Alliances with multiple therapeutic categories were counted more than once, in each of their respective categories.

Exhibit 4 2017’s Top Money Grabbers: Cancer, Neurology and Immune Disorders IPO And Venture Financing Transaction Volume By Company Therapeutic Area Of Focus*

Cancer 135 Neurology 63 Immune Disorders 52 Infectious & Viral Diseases 51 Metabolic 48 Respiratory 37 Cardiovascular 35 Inflammation 25 Dermatology 24 Gastrointestinal 24 Musculoskeletal 22 Ophthalmic 21 Hepatic 12 Blood & Coagulation Disorders 10 Gynecological, Urological 9 Renal 9 Wound Healing 5 Otolaryngology 3 Dental 2 0 20 40 60 80 100 120 140 Number Of Deals *Financing deals were counted more than once if the company was involved in more than one therapeutic area.

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No Seismic Shifts As Torrential Rain Dampens JPM Jamboree

It might have been the torrential rain that fell on the first day of the JP Morgan Annual a surge in M&A activity as companies Healthcare Conference that dampened the spirits of the 9,000 plus delegates attending enjoy lower tax rates and an opportunity the traditional annual kickoff for life sciences-focused companies, but the dearth of seis- to repatriate cash held outside the US, mic announcements during the meeting cannot have helped. Major topics of discussion it was apparent that the windfall is more included perennial concerns around pricing models, lackluster deal announcements, likely to be used to buy back shares and poor gender and racial diversity, and what US companies might do with the anticipated pay higher dividends, although some of tax windfall. There was a lot of discussion but not much clarity. the top-tier biotechs did indicate that they would use some of the money to work in With the FDA approving the largest at Sanofi, revealed that the company was acquisitions or investing in their pipelines. number of new molecular entities in more working to have a 50:50 gender balance (Also see "Biopharma 2018: Is There Still A than a decade, there was much backslap- among its senior managers by 2022–23; Place For Pharma In The New Health Care ping about how the industry might now be currently only 20% of its senior managers Economy?" - this issue.) better at delivering innovation. Approvals are women. of CAR-T drugs and gene therapy products One area where the JPM meeting, and UNDERWHELMING DEAL were seen as a sign of a promising future the satellite events that take place con- ANNOUNCEMENTS for the sector. The black cloud on that currently, has seen more diversity is the On the eve of JP Morgan, there were sever- horizon, however, is how society will pay increasing influence of Chinese actors. The al announcements that contributed to the for such products. (Also see "New Payment number of Chinese delegates descending glum mood. Pfizer Inc.'s not unexpected And Financing Models For Curative Regen- on San Francisco continues to rise and decision to exit early-stage neuroscience erative Medicines" - In Vivo, July 2017.) there were several ancillary events focused research set the tone, supported by other One of the most anticipated presenta- on opportunities to either do business in announcements that failed to excite inves- tions was from Spark Therapeutics Inc. – China or with Chinese companies. tors from the likes of Celgene Corp. and still basking in the glory of having its gene One of the sideshows – the WuXi Shire PLC, while Sanofi reworked partner- therapy Luxturna (voretigene neparvovec- Global Forum – managed to get Ruyi He, ships it has with Alnylam Pharmaceuticals rzyl) approved late in 2017 – which an- MD, chief scientist at the Center for Drug Inc. and Regeneron Pharmaceuticals Inc. nounced it had a new gene therapy program Evaluation at the Chinese FDA, to outline Celgene’s announcement that it is for Pompe disease that it hopes will sup- how the agency intends to be as efficient acquiring Impact Biomedicines and its plant existing enzyme replacement thera- at evaluating candidate drugs as the US late-stage myelofibrosis JAK2 inhibitor pies. The company took the opportunity to FDA and the European Medicines Agency fedratinib drew a muted response. In- discuss some novel payment and distribu- (EMA). The Chinese FDA is aggressively vestors appear to question the value of tion models it is thinking about, including hiring reviewers, expanding the staff from the deal, worth $1.1 billion up front and direct sales to payers or their specialty just 60 a few years ago to 600 at present, potentially an additional $5.9 billion in pharmacies, outcomes-based rebates and with another 200 to be recruited in the regulatory and sales-based milestones, options for payment installments, which it coming months and to double in size by as the asset, when managed by Sanofi, is currently discussing with CMS. the start of next year’s JPM. threw up some safety concerns. (Also see Lack of diversity in the industry, and Beyond seeking granularity on the "Celgene's $1.1bn Impact Buy Is First Of at the presenting podiums, in particular, progress of the various pipelines, most More Deals To Come In 2018 And Beyond" was another topic that resonated in the of the presenting companies faced ques- - Scrip, January 9, 2018.) corridors around the meeting rooms. On tions around the potential impact that the Celgene made the move on Impact to social media there was a lot of buzz about US tax reforms might have on their busi- offset its reliance on its multiple myeloma the fact that there were more presenters nesses. The usual response was that they blockbuster Revlimid (lenalidomide), at the meeting named Mike than women were still evaluating the details of the plan which is expected to start losing patent at the podium. A number of executives did and would only be in a position to deliver exclusivity in 2022 and has accounted for take the opportunity to acknowledge the more nuanced responses in the forthcom- more than 63% of the company’s total rev- problem and outline some plans they have ing reporting season. While some industry enues since 2010. In 2017, Revlimid sales to rectify it. Olivier Brandicourt, MD, CEO commentators such as EY are predicting topped $8.2 billion, up 17.4% compared

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with 2017. Celgene has been a consum- occasions in December. Ablynx revealed billion in 2025 – representing a CAGR of mate deal-maker and CEO Mark Alles told that, on December 22, the Danish pharma 17% a year – on the back of more than 20 the JPM audience to expect more deals as offered to acquire it for €28 a share new launches by 2020. Short-term driv- the company sits on a cash pile of nearly in cash plus a CVR with total potential ers include the company’s hematologic $11 billion. Celgene, which retreated 28% cash payments of up to €2.50 a share, cancer assets, Venclexta (venetoclax) and during the last quarter of 2017 following representing a 60% premium at the time Imbruvica (Ibrutinib), which are being a string of disappointing clinical results, and valuing the company at €2.6 billion. developed for further label expansions finished the year 9.85% down at $104.36 Ablynx posted the highest share move- and oncology indications. per share. The stock was up just 1.7% ment during the week, closing 73% higher during JPM to close the week at $106.00. at €36.60 on Euronext Brussels. CAPITAL OPPORTUNITIES Shire is also aware of the lopsidedness Highlighting the challenge neurosci- One of the major questions that made of its business. In an accomplished and ence poses for companies big and small, the rounds at JPM is whether the capital confident presentation, CEO Flemming the poorest performing stock during JPM markets will be more or less supportive of Ornskov, MD, described how the company week was Axovant Sciences Ltd. Axovant the biotech and medtech sectors. Pharma plans to put clear water between its rare announced that it was discontinuing the and biotech stocks made progress during disease and neuroscience activities by development of intepirdine, its 5-HT6 2017. The top performing index was the creating two distinct divisions during the receptor antagonist, which was targeting NYSE Arca Biotechnology Index, an equal- first half of 2018. Having already hinted treatment of Lewy body dementia and dollar weighted index that comprises 30 previously that such a separation was in Parkinson’s disease dementia. The com- leading companies with at least a $1 bil- the cards, it appeared that the markets pound missed the primary endpoints of lion market capitalization, which although were somewhat disappointed that Shire both the Phase IIb HEADWAY and Phase II flat in the final quarter advanced some had not been more bullish with its inten- Gait and Balance studies. This is not new 37% across the year. This performance tions following last year’s strategic review. territory for either the company or the compared favorably with the NASDAQ The Dublin, Ireland-domiciled company candidate drug as Axovant announced Composite, Dow Jones Industrial Average saw its stock slip 5% to $149.10 per share in September 2017 that interpirdine had and the S&P 500, which rose during 2017 on the day of the announcement. failed in Alzheimer’s. The company’s stock by 28%, 25% and 19%, respectively. The One transaction that did move the fell $3.28 (61%) during the week to close NASDAQ Biotechnology Index advanced needle in a positive way for one of the at $2.09 per share on January 12. 21%, whereas the NYSE Pharmaceutical conference participants was the settle- Index moved up just 13% during the year. ment of a patent dispute between Teva BEYOND HUMIRA When it comes to the amount of money Pharmaceutical Industries Ltd. and Alder Among the top-tier pharma businesses, put to work in the biotech sector, 2017 saw BioPharmaceuticals Inc. The biotech saw there was a lot of interest in what AbbVie companies raise close to $73 billion glob- its shares jump 38% to $17.85 by the end Inc.’s management had to say about how ally, an almost $11 billion shortfall from of the week after Teva granted Alder a it intends to wean itself off its Humira 2016. Part of the reason was the dearth non-exclusive license to its anti-calcitonin (adalimumab) dependency. Although the of major merger and acquisition activity gene-related peptide (CGRP) antibodies company expects Humira to face biosimi- during the year – Johnson & Johnson’s and methods. This enables Alder to move lar competition as early as 2022 in the US, acquisition of Actelion Pharmaceuticals forward globally, with the exceptions of Abbvie still expects the anti-inflammatory Ltd.and Gilead Sciences Inc.’s purchase Japan and South Korea, with eptinezumab biologic to be its main cash generator of Kite Pharma Inc. accounted for 80% of (ALD403), its Phase III migraine-prevention through 2025 and beyond, with a pre- deal values in 2017. However, there was candidate. Removal of the patent overhang dicted $21 billion in sales globally in 2020. also an outflow of funds from the sector as is expected to open the door for Alder to Part of Abbvie’s post-Humira strategy investors looked for other areas to invest find a commercial partner in a competitive is the broadening of its immunology pipe- in. According to Informa’s EPFR Global, marketplace that will include Eli Lilly & Co. line. In particular, the company focused on fund flow in biotech in 2017 saw some $1.1 and Amgen Inc., in addition to Teva. risankizumab, its anti-IL23 antibody, and billion move out of the sector, although Other companies that enjoyed a JPM upadacitinib, its oral JAK1 inhibitor, which there was a net inflow of about $1.1 billion share price bump include Atara Biothera- it forecasts could achieve 2025 peak sales in the second half of the year. peutics Inc., up 53% to $28.25 per share, of $5 billion and $6.5 billion, respectively. Nevertheless, companies and inves- NanoCarrier Co. Ltd., which rose 42% to Abbvie expects both these pipeline assets tors were fairly confident that the sector Yen911.00; and Global Blood Therapeutics will treat patients who don’t respond well will still get capital market support. In- Inc., which added $15.10 (36%) to finish to Humira. It also plans to aggressively deed, biotechs raised almost $900 million the week at $56.60. advance the drugs in multiple immunol- during the first week of January, while the The only deal announcement that re- ogy indications beyond rheumatoid and queue for biotech initial public offerings sulted in a share price moving significantly psoriatic arthritis. looks robust. was that of Belgian biotech Ablynx NV, Abbvie is confident that it will be able IV005271 which told delegates that it had rebuffed to grow its non-Humira business from MIKE WARD advances from Novo Nordisk AS on two $9.6 billion in 2017 to more than $35 [email protected]

What Will Keep Medtech Industry Leaders Awake At Night In 2018?

The first concern on the minds of the medtech industry's leaders is that the gains of patients in remote areas, to connecting large-scale transformation are a long time in coming. The industry has talked about patients with caregivers virtually, to creating commercial transformation for a considerable time. Some companies have consolidated feedback loops that bring insight and behav- their previously separate business units. Others have invested in strategic account man- ioral change, and everything in between. agement. Others still have created new business models and value-sharing approaches. The promise is to prevent acute events, While this higher-order commercial evolution is absolutely required, the pace at which keep patients out of the hospital, increase customers are preparing is maddeningly slow. independence and facilitate good choices that better manage chronic conditions. More than a few hospital system cus- Although there are a variety of stum- tomers, for example, are not organized bling blocks that have slowed down to partner in the way that medtech might innovation, a big one is money flow. Old like. Traditional purchasing processes Large medtechs are payment mechanisms reward the tradi- used by the customer can make the new, tional stakeholders and traditional hos- innovative value-sharing programs seem realizing that they have pital-centric approach to care. While not simply too sophisticated or at least out every “innovation” is worth having, many of sync with their needs. undertaken some of the innovators are simply waiting to figure out In reality, a high degree of heterogene- very difficult work of how to get paid and overcome the barriers ity exists within the customer universe, erected by those who would lose. My first which means that large medtechs are transformation, without wish for 2018 is flexibility and innovation realizing that they have undertaken some in how we pay for digital health. of the very difficult work of transformation, really being rewarded The second is the area of longitudinal without really being rewarded for it yet. data interoperability. While we are on the Another worry for stakeholders is that for it yet. subject of dreaming big, the promise of there are cracks in commercial analytics integrated patient data, captured longitu- and operations, and these are becom- dinally, would be a game changer. Today, ing more and more visible. A history recently that have put leaders under a lot patient data are fragmented and focused of prioritizing action in the field over of pressure. They can range from moving on interventions and episodes, instead measurement has meant that medtechs too aggressively to shift manufacturing of capturing a complete picture of the have skewed investment toward having into low-cost areas, to grappling with patient over time. The true impacts of in- a well-equipped sales and service team disaster recovery from hurricanes in the terventions are not well understood. Sites and away from the commercial analytics Caribbean, to not sufficiently rationalizing of care change frequently, as do payers, and operations that support them. product portfolios after an acquisition. It which makes a comprehensive picture of Add that to a rich history of acquisitions is ostensibly an obvious pillar of execu- outcomes over time very hard to come by. and autonomously run business units and tive responsibility, however, and lack of But by truly understanding long-term we get a clear picture of companies that attention in this area has cost some play- outcomes from interventions and thera- struggle with commercial discipline. Com- ers dearly in 2017. These are three issues pies, we can attach appropriate value and mercial teams differ substantially across that I think will be pivotal in 2018, and enrich choices. The recent decision of the the divisions of a large medtech. These their pressing nature may even be giving US FDA to speed the approval process teams struggle to manage prices effectively some decision-makers sleepless nights. and rely more on real-world evidence or to enforce anything but the simplest would make the impact of longitudinal contracts. Identifying common customers AND WHAT COULD HELP outcomes data even greater. These are across divisions, enforcing compliance and THOSE LEADERS SLEEP? my two standout wishes for 2018. providing a consolidated view of business There are two areas I would love to see ad- IV005259 performance are becoming increasingly dressed in 2018, and if they were, it could BRIAN CHAPMAN acute challenges at the same time that the signal improvements across the ecosystem [email protected] industry is recognizing just how important in the coming years. The first is digital these fundamentals are. health/health tech money flow. There is a Brian Chapman is a principal with ZS The fragility of the global supply chain tremendous amount of funding going into in the Zurich office and leader of ZS’ is a growing issue. Obviously, the supply the sector that we refer to as "digital" and Global Medtech Consulting Practice. He chain is always important, but we have "connected health," and the potential is is also a member of In Vivo's Editorial seen some very high-profile problems tremendous. This ranges from monitoring Advisory Board.

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In Vivo’s 2017 Deals Of The Year: THE WINNERS ARE…

WE NOMINATED 15 DEALS IN THREE CATEGORIES. YOU PICKED THE WINNERS.

TOP ALLIANCE TOP FINANCING TOP M&A

Regeneron's Novel Deal Pfizer Spins Off J&J/Actelion – With Decibel SpringWorks Win-Win-Win Regeneron Pharmaceuticals forged Pfizer's spun out Springworks Johnson & Johnson's a unique agreement with start-up in September with four months-long pursuit of Decibel Therapeutics in which it clinical-stage assets targeting Actelion Pharmaceuticals will make an equity investment and diseases with no good cures. culminated in a $30 billion provide financial support for the The big pharma concurrently cash acquisition last hearing-focused biotech's R&D, but contributed to SpringWorks January. J&J got immediate claim no share of commercial rights $103 million Series A round, access to the Swiss biotech's to any therapeutics discovered as did Bain Capital Life lucrative pulmonary arterial under the collaboration. Sciences, Bain Capital Double hypertension franchise and Impact, Orbimed and LifeArc. late-stage pipeline as well Runner-Up: Medtronic & Aetna's as initial 16% ownership in outcomes-based insulin pump deal Runner-Up: Silk Road Medical Idorsia Pharmaceuticals, a raises $47 million for stroke new spin-out formed around prevention devices Actelion's drug discovery operations and early-stage clinical assets.

Runner-Up: CVS/Aetna vertical merger aims to change health care delivery

2018 will be a time of transition in health care, when biopharma’s counterparts in adjacent industry segments scale up in a radical redesign of their traditional business models. Biopharma 2018 is not moving as quickly, and it confronts a strategic dilemma on OUTLOOK how to address the prospect of a much more powerful set of rivals in the ongoing battle to own the patient experience in medicine.

BY WILLIAM LOONEY he key challenge confronting biopharma in 2018 is the disconnect between an abundance of transformative science and a hidebound commercial and For the new year, In Vivo offers six areas regulatory model that continues to place barriers to making the right medi- where the pharma C-suite can counter cines accessible to patients who need them. It’s a structural problem in the health policy and system bottlenecks delivery and financing of health care overall, but one that impacts biopharma by building to excel. Tdisproportionately by adding to the cost of drug development, denting the benefits of innovation and diminishing the industry’s reputation as a force for social good. Cooperation within biopharma to Solving for the imperfections that guide institutional behavior – can human health improve safety signals will be crucial provision ever be anything but “messy”? – will dominate the commercial and policy in maintaining public confidence in the agenda for biopharma in 2018. In Vivo Editorial Advisory Board (EAB) member and gene-based therapies now entering health care portfolio manager at E Squared Capital Management Les Funtleyder de- widespread clinical use. Success for these transformative therapies will drive long scribes current attitudes in the C-suite as one of “disembodied anxiety” fueled by a host overdue changes in approaches to market of factors, including pricing pressures; restive patients; the ascent of adjacent players access, value and reimbursement. like Amazon; state government transparency mandates; the soaring cost of deferred IT investments; compliance and anti-trust exposures; and those generic and specialty So what? The push by players outside segment train wrecks. Overlaying all is the market churn caused by the consolidation biopharma to dominate the entire now taking place in other health industry verticals. Says Funtleyder, “The consensus health vertical through size, scale is the biopharma business model has to keep adjusting in line with these uncertain- and reach might backfire, imperiling ties – but how, and to what end?” the relationship to patients as well as A mandate to change must first account for the remarkable persistence of tradi- incurring the wrath of trust-busters and tional rules of engagement. The diktats of drug development feed that sedative called other industry regulators. complacency. The “gold standard” for drug approval – the randomized clinical trial

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– remains largely as it was in the 1940s. enrollees in the public Medicaid entitle- The P&R process is complex, arbitrary ment program since 2013), most service and almost completely non-transparent, providers outside biopharma are aggres- while information – biopharma’s great- sively repositioning their businesses. The est single untapped asset – is plagued imperative is to manage cost exposure by the contradictions, duplication and risks by controlling the patient journey missing links of a disaggregated world through the health system, diversifying of “data islands” with little connection lines of business and capturing more of to the actual experience of patients. Bio- the value that leads to better outcomes pharma’s own promotional practices, at for patients – and improved returns to least in the US, seem rooted in a bygone shareholders. era of unconstrained budgets, following Examples of this push toward inte- a strident “push” model that is often tone grated channel consolidation include Les Funtleyder deaf to contemporary notions of clinical moves by insurers to purchase home care E Squared Capital Management value or medical need. Turn down the and rehabilitation vendors as well as to volume on a TV ad for psoriasis, related enter the pharmacy benefits business. auto-immune disorders and other heavily (See Exhibit 1.) The aim is to supplement promoted drugs and one might think the the processing of claims with adherence subject is sex, not science. and prevention services that provide Meanwhile, regulations and markets direct line of sight over costs incurred continue to incentivize R&D resources by their covered populations. The classic within an increasingly narrow band of contract research organization (CRO) is high-promise therapies. But are there morphing into the contract commercial really any “niche plays” left among the organization (CCO), acquiring analytics more than 1,000 trials now underway in and big data providers to fire up its exist- immuno-oncology? Is all that investment ing strengths in expediting drug develop- heading toward a cliff of clinical indistin- ment. Hospitals, confronting opposition guishability while the hardest problems to an absurdly expensive “high-touch” of public health – like Alzheimer’s dis- delivery model, are bulking up to secure Steve Collis ease – remain unsolved? regional market dominance while acquir- Amerisource Bergen ing specialty drug pharmacies. The goal No Safety In The Middle Lane here is to increase purchasing power Taken together, these institutional reali- through scale and reach and provide ties are slowing biopharma’s necessary more care on a cheaper outpatient ba- transition as an integral component of sis. Physicians are relying on incentives the health care ecosystem. The stakes in the 2010 Affordable Care Act (ACA) going forward are high. The alternative to create integrated delivery networks is being positioned as a high-cost outlier (IDNs) that operate like a closed HMO in vulnerable to challenge from adjacent providing employer-based populations industries with a loss-leader consumer with both prophylactic and preventive orientation or from emerging geogra- care, at a fixed per-patient cost, usually phies such as China that offer a cheaper on a long-term basis – where patient business model. In the competition outcomes can be tracked, measured and among health care providers to “own the justified to payers. patient,” biopharma risks being margin- Finally, distributors are leveraging Michael Ringel, PhD alized as medicines access becomes the their logistical strengths to occupy a cru- Boston Consulting Group province of powerful third parties with a cial space in the delicate, time-sensitive different, budget-driven perspective on transfers of living human cells that form confronting disease. the supply backbone for the newest gene- As US health care struggles to adapt based drug therapies. “We are now in- to an aging population (the 65+ cohort novating among the best,” Amerisource has risen 40% since 2000, to 50 million Bergen Corp. CEO Steve Collis tells In people), soaring costs (at $3.3 trillion in Vivo in explaining his company’s recent 2016, US annual health care spend now selection by Novartis AG to coordinate exceeds the entire GDP of the UK, the logistics for the first FDA-approved gene- world’s fifth largest economy) and ris- modified cell therapy, Kymriah (tisagen- ing public expectations (15 million new lecleucel-t). “It’s another mission-critical

Exhibit 1 Summary Of Recent Health Care Service Industry Deals

DEAL DATE DEAL CATEGORY ACQUIRER TARGET COMPANY OR ASSET DEAL VALUE STATUS

Primary and urgent care outpatient Dec. 2017 Asset Purchase UnitedHealthcare $4.9bn Pending facilities, Da Vita Inc.

Home care and hospice services, Dec. 2017 Asset Purchase Humana $4.1bn Pending Kindred Health

Pending Debt free, Advocate approval as Dec. 2017 M&A Aurora Health Care non-cash Health Care Advocate transaction Aurora Health

Dec. 2017 M&A CVS Caremark Aetna Insurance $77bn Pending

Nov. 2017 M&A McKesson Rx Crossroads $735m Completed

Oct. 2017 M&A Express Scripts eviCore Healthcare Inc $3.6bn Completed

Sept. 2017 M&A Walgreens Rite Aid Pharmacy $4.4bn Completed

KKR & Co. July 2017 Private Equity WebMD $2.8bn Completed Internet Brands

May 2017 M&A Thermo-Fisher Patheon CDMO $7.2bn Completed

Patient care, deep vein thrombosis, April 2017 Asset Purchase Cardinal Health and nutrition insufficiency LOB, $6.1bn Completed Medtronic PLC

Oct. 2016 Private Equity Blackstone Group TeamHealth $6.1bn Completed

Completed; relaunched Aug. 2016 Private Equity Advent Int’l VC InVentiv Health $3.8bn as Syneous Health on 8/1/2017

SOURCE: Medtrack | Pharma Intelligence, 2018

activity that biopharma cannot do alone.” direct manufacturer. (Also see “Provider purchasing stability hospitals seek. Quite Perhaps the biggest example of the Consortium Will Try ‘DIY’ Solution To Ge- frankly, the federal government could have urge to control is the move by a network neric Shortages, Pricing” - Scrip, January fixed the problem some time ago – we have of religious-affiliated hospitals and inde- 18, 2018.) “It’s no surprise the providers are a Strategic Petroleum Reserve for oil so pendent IDNs to address chronic supply seeking a solution to these generic market why not a Strategic Drug Reserve that can shortages and price hikes in generic drugs improprieties,” comments Les Funtleyder. be mobilized quickly to tackle the supply by entering the business directly, either “Less certain is whether this kind of ar- chain problems and the opportunity this as a non-profit purchasing cooperative or rangement will actually work to deliver the provides for price gouging?”

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Going Small Disruptors And Accelerants – Ironically, many drugmakers have It’s Fire Just The Same bucked this trend to bulk up by “going In a tightly regulated, high-barrier sector small,” focusing their research on nar- like health care, transparency is the big- row cohorts of patients with rare diseases gest disruptive force of all. It’s a market- and no alternative means of treatment. based equivalent to government price Originally the province of biotech, big controls. That’s because, when producers pharma has also moved aggressively into prove reluctant to explain the difference the rare disease space. These “orphan” between list price and net price, transpar- drugs offer inventors a greater measure ency exposes the role of every player in a of control over development and market- transaction – what they do and what they ing costs due to an accessible and highly get in that passage of product to patient. engaged community of patients and The potential is there for an interloper Amanda Micklus prescribers. The challenge is to justify such as Amazon to use that transparency Datamonitor Healthcare the high price points required to achieve to render the middleman superfluous, a reasonable ROI from a highly selec- driving down costs, the impact of which tive patient population and to fund the is going to be based on where you sit in add-on indications that expand market the health care supply chain. And recent potential and increase sales. (Also see examples from the high-tech start-up “Orphan Drug Pricing And Reimburse- world (Uber, Airbnb) show that you can ment: Challenges To Patient Access” - In transform an entire industry without Vivo, November 2017.) making the product that defines it. That Last year, federal government incen- puts a damper on the idea that core com- tives to promote rare disease research petence always clears the field. were scaled back as this specialized Like the entry of new rivals, technology therapeutic field grew more crowded. As a also demands biopharma’s attention. IT result, investor attention is slowly return- capabilities in health care are growing at ing to treatments for diseases for large a pace equivalent to progress in our un- populations. Amgen Inc., the biggest bio- derstanding of the biological and genetic Roger Longman tech, has made this point clear in recent origins of disease. In fact, the spread of Real Endpoints meetings with investors. Thinking small useful information fueled by technology does have its limits. But the real issue is provides the rationale – and the means the financial stakes in market acceptance – for the moves by so many health care in 2018 are much higher than when follow- players into businesses outside their on medicines aided by a crush-it-all field traditional base. force were sufficient to drive scrip sales. It’s another disruptive trend that will More population-based options that reach gather strength in 2018 as a range of new beyond the current standard of care must data management and eclinical platforms be pursued to grow revenues. come on stream, particularly for clinical Then there is the elephant in the room trials and postmarketing surveillance. called Amazon. With a soaring market The most important of these are systems cap of more than $600 billion and a that can integrate multiple streams of willingness to confront and out-brand data and eliminate redundant processes any rival on price, Amazon now controls to guide complex decisions on key one-half of all online retail sales in the aspects of the drug development and Ken Kaitin, PhD, US, notching annual sales of $136 billion launch process, from setting the right Tufts in 2016, which places it among the top trial endpoints, finding and analyzing the ranks of health industry leaders like CVS most relevant information from patients, Health Corp./Caremark Rx Inc., McKes- even expediting the design of human son Corp. and UnitedHealth Group Co. subject studies conducted on a less costly But where Amazon chooses to engage “virtual” basis – all in an accessible but (the retail OTC/HBA or online pharmacy highly secure cloud environment. Oracle space most likely, facilitated by its 2017 Health’s recently launched Clinical One acquisition of the Whole Foods super- platform is but one example of this. market chain) is less important than the “More than ever, analytics rule the impact of its transparent, loss-leading world of medicine. Yet many in bio- price model. pharma still rely on legacy IT devised

in the chemistry, small-molecule era,” choice but to position themselves as in- Oracle SVP and general manager Steve tegral parts of a full-service care delivery ❚ WHERE TO FOCUS IN 2018 Rosenberg tells In Vivo. Upgrading data platform, beyond the drug itself. It’s ex- infrastructure will be a major expense pensive but necessary in addressing the M&A is back on the table; for the industry through the end of the demands of payers for better outcomes take advantage decade, but we believe the investment in a prevalent condition characterized will more than pay for itself through by numerous co-morbidities. Federal legislative inaction: higher productivity at every stage of the On the other hand, industry efforts a mixed bag for pharma R&D process and the ability to bring more to create a new class of injectable lipid- drugs to market faster for patients waiting lowering drugs (the PCSK9 inhibitors) Working with a re-energized FDA in the balance. Most important, creative appear to have misread physician and application of these integrating tech- patient sentiments on what constitutes Define and deliver value nologies is critical if drugmakers are to a real advance against standard of care – create the necessary regulator and payer and how much that advance should cost. Manage a controlled rollout for confidence in real-world evidence [RWE] Sales of PCSK9’s have posted far below advanced therapies that will drive a drug’s value proposition initial launch projections, suggesting that in the future,” Rosenberg says. biopharma still has trouble holding its Preserve the US innovation climate Taken together, the spurt to restructure own in a conversation to establish value that dominated other parts of the health at the patient point of care. But leading ecosystem in 2017 has left biopharma a that conversation is going to be far more Informa’s Strategic Transactions finds bit blindsided. All the trends point to important as out-of-pocket drug costs for that although the value of acquisitions in health care becoming a more consumer- patients increase along with the clout of 2017 rose to $208 billion from 2016’s $104 oriented business, with the patient commercial payers who administer ben- billion, the number of deals went down bearing more of the cost of care. Hence, efits and set plan deductibles. significantly (97 in 2017 vs. 123 in 2016). the different health verticals all want to Clearly, the majority of investors chose “own” the patient experience by doing a Breaking The Siege – Six to sit tight while the new US administra- variety of things, geared to solutions as Strategies To Succeed In 2018 tion pursued the first comprehensive opposed to products. So what will biopharma do? Will “strat- overhaul of the corporate and individual Nevertheless, biopharma continues to egy accelerators” like tax reform force big tax regime since 1986. pursue its singular model of technology pharma off the fence to start investing big Passage of the Tax Cuts and Jobs Act “push.” Says Bain partner and a leader in those high-tech partnerships that some (HR 1) on December 20 removes the in the firm’s Health Care and Strategy observers see as transformative to the uncertainty, although the impact from practices Nils Behnke,PhD, “It’s still the industry’s basic mission? For big pharma, adoption of the territorial tax structure standard among many big pharma to de- it’s a huge bet to shift direction: from used in other industrialized countries as velop a new technology, obtain approval investing in individual drugs to treat a well as reduction of the basic corporate and create a product marketing campaign disease to building customized, complex rate on profits from 35% to 21% will vary with heavy promotion to physicians, data sets that map the underlying genetic depending on a company’s geographic often based on a product differentiation profiles of individual patients, result- exposure and the tax treatment of intan- strategy where there is already an existing in interventions – not exclusively gible assets like IP. A special low rate on ing high standard of care. This tradi- drug-based – that reverse or prevent the the repatriation of industry cash parked tional approach is considered by many disease itself. To achieve that, everything abroad from earnings outside the US – es- stakeholders to be reactive and adver- – from basic discovery to reimbursement timated at more than $170 billion – gives sarial. The better approach is to develop – must change. companies substantial room to maneu- superior disease-state solutions around The good news is that in 2018 the stars ver, from pursuing large-scale mergers, a new drug, which requires biopharma are aligned to give drug companies space a relatively rare event so far this decade, companies to pursue a strategy of market to pause and take some of these truly to targeted, bolt-on asset acquisitions, leadership in therapeutic categories and strategic steps – to reinvigorate their license and partnering ventures as well as to build new capabilities.” business models and move innovation to straightforward financial instruments This is not to say that biopharma is forward in ways that matter to patients. like dividend raises and share buybacks. completely disengaged. On the one hand, In Vivo discussions with a cross-section “Conditions are ripe in 2018 for big collaborative efforts between drugmakers of industry experts suggest a C-suite focus pharma to do some truly transformative and other parts of the health sector are on the following agenda items. deals,” says Boston Consulting Group’s becoming more common in diabetes, managing partner for life sciences (and where payers hold most of the cards on Deal-making: Back On The Table In Vivo Editorial Advisory Board member) price and market access. Segment lead- In 2018, one should see clarity restored Michael Ringel, PhD. “There are convinc- ers Eli Lilly & Co., Merck & Co. Inc., to the M&A environment for biopharma ing arguments that mergers are a neces- Novo Nordisk AS and Sanofi have no after a year of decidedly mixed signals. sary way to take out waste and deliver

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operational efficiencies while doubling commercialization. Completing a suc- the contribution from complementary cessful clinical trial requires expertise scientific talent and expertise. It’s an op- they don’t have. Start-ups are more open portunity to refresh your strategic focus to bolt-on buyouts and partnerships if the and avoid that institutional inertia. Yes, combination helps fill this gap. the mechanics of a big merger can be as Recent examples from Finally, biopharma deals will be influ- difficult as changing the tires on a car enced by fresh cues from the FDA seeking while it’s still moving. But there is also the high-tech start-up to drive innovation in hot areas like gene opportunity to refresh your strategic fo- therapy, neurodegenerative disorders and cus and avoid that institutional inertia, world (Uber, Airbnb) regenerative medicine. These and other with the best combination of people, novel treatment pathways – including next- systems, products and science, to cross- show that you can generation drug-devices – will benefit from sell and introduce more diverse products an agency priority in 2018 to create more to the market.” transform an entire clarity in testing and reduce time to market. Aiming for more size and reach may All these converging factors ensure work as a defensive play for biopharma industry without the biopharma business development as other health sector verticals scale up function will be kept busy in 2018 put- to become more formidable price nego- making the product ting tax reform’s additional cash reserves tiators. Industry simply has to do more to productive use. The range of interests to gain access to all those covered lives. that defines it. That will expand as senior management asks Amanda Micklus, Informa Pharma In- for more small, “kick the tire” partnering telligence principal analyst for Datamoni- puts a damper on the in digital, big data analytics and machine tor Healthcare, suggests that big pharma learning. One precedent to start the year will resist thinning its ranks through idea that core is Roche’s deal with GE Healthcare on a large-scale combinations equivalent to new digital diagnostics platform to apply the Pfizer Inc./Wyeth ($68 billion) and competence always advanced analytics to workflow solutions Merck & Co. Inc./Schering-Plough Corp. and apps that support clinical decisions ($41 billion) mergers of a decade ago. clears the field. in oncology and in the ICU space, where “I think we will see many more asset- machine learning will seek to predict building acquisitions directed to highly patient complications before they strike. specialized pipeline and therapeutic (Also see “GE And Roche Join Forces In category objectives. Filling geographic First-Of-Its-Kind Tech Pact” - Medtech gaps in the business growth plan is Insight, January 8, 2018.) another important goal. The consensus Significantly, however, many VC play- remains strong that the big mergers cre- ers are still skeptical of digital as the ated problems of complexity and cultural “bird in hand” that will revive the bio- fit and ended up doing little to boost pharma formula for growth. VC money R&D productivity and increase the pace is not flowing into digital at this point, of commercialization for new products. although the convergence of biology and This year, there are no objectives more engineering that digital health represents important than these two, and not just for remains attractive. The wait is on this big pharma but for specialty and biotech year for evidence that patients will adopt as well.” tive deals over the survey period,” Arda the behaviors that enable digital health Research conducted by professional Ural, PhD, partner in EY’s Life Sciences to work in line with expectations. services firm EY on 278 biopharma trans- Transactional Advisory Service, tells In actions between 2010 and 2017, released Vivo. “That’s because the biggest deals Industry Policy And Politics: at this month’s JP Morgan 36th Annual involve operational discipline, dexter- Out To Lunch? Healthcare Conference, concludes that ity in cultural change management and Government usually weighs heavily in bio- targeted bolt-on transactions produced effective employee communications, pharma’s strategic calculations, but 2018 a higher return to shareholders than the benefits of which only show up over is likely to prove the exception. A feeble so-called transformative mergers valued time – two or three years at least.” (Also effort around industry self-regulation be- beyond $10 billion. “What we found was see “No Seismic Shifts As Torrential Rain gun last year has been sufficient to prevent that, despite the risks of patent expira- Dampens JPM Jamboree” - this issue.) legislation to introduce transparency and tions, negative clinical trial outcomes Biotechs share the same deal-making negotiation on drug prices, and no action and unfavorable reimbursement deci- perspective, as they are increasingly look- by Congress or the Trump administration sions, bolt-on transactions showed a ing for big pharma’s help in advancing can be expected this year. In contrast to slight edge compared to the transforma- their most promising compounds toward the massive change taking place on the

commercial front, virtually every aspect of It’s also worth noting that business and RWE and other patient-centered alterna- government health care in the US is grid- the military remain the only societal tives to the traditional RCT, and providing locked. It reflects a larger ideological con- institutions deemed by the polls to be in more support for a positive, risk-based flict about whether access to basic health working order. It’s also wise to stay local approach to use of digital technologies services is an individual responsibility or in affiliations, choosing strong national for both platforms and products. The act a shared commitment of society. The US and regional managers capable of help- underscores how good legislation is not remains the only industrialized country ing HQ interpret the political tea leaves. only facilitated when both Democrats that has failed to resolve this fundamental A global corporation deprived of this and Republicans are engaged, but it also value question. Yet the surprising trend is intelligence is effectively stateless when tends to last as well. The FDA is capital- how legislative inaction is actually sup- trouble arises. izing on the bipartisan vibe by offering porting the growth of publicly sponsored itself as an honest broker between the health care programs like Medicare and FDA’s Friendly Persuasion industry and other stakeholders, espe- Medicaid, which are forecast to account The FDA is the go-to destination this year cially organized patient groups. for 47% of all US health spend by 2025 – in addressing fundamental supply chain it’s entitlements by default. issues neglected by the political branches Value: It’s Game On The point is partisanship has become of government. Under Commissioner All drugmakers acknowledge the impor- an enduring feature of the federal land- Scott Gottlieb, MD, the FDA is tackling tance of establishing a new medicine’s scape. This means that while little of sub- topics such as industry competition, value to payers beyond the standard stance gets done – in industry quarters, where it is reviewing current rules on clinical anecdotes and testimonials from that’s often seen as a good thing – there patents and exclusivity jointly with the KOLs. But the will to do so continues to is also pervasive uncertainty about the Federal Trade Commission (FTC); pricing face numerous barriers. These include long-term direction of public policy and access to medicines, where it has cultural complacency and conservatism toward biopharma. If, as seems likely, launched a vigorous effort to anticipate within the biopharma enterprise, the control of Congress shifts to the Demo- and prevent single-supplier situations short-term orientation of investment cratic Party in the November mid-term and, through stepped-up abbreviated decision-making and the absence of a elections, biopharma will face renewed new drug application (ANDA) approvals, broad institutional mandate to set rules efforts to introduce price negotiation for push more competitively priced generics for defining value, along with the tools Medicare Part D drugs and restore key and biosimilars on to the market; and to measure it. elements of the 2010 Obamacare health innovation, in the form of increased flex- Private payers are often disinterested in reform law eviscerated last year by the ibility in approving novel new medicines risk-sharing deals due to their emphasis current GOP majority. The pendulum on the basis of demonstrated improve- on managing costs through short-term, swings both ways, which is never good ment against standard of care. Additional one-off interventions. Government con- for a business that must make big bets forms of evidence beyond the RCT will, in tinues to send out mixed signals. It has on capital that pay out only over time. certain cases, be accepted to demonstrate endorsed value constructs as an admin- In addition, gaping deficits from the such improvement. The FDA has also istrative priority linked to quality but has new tax reform law will reinvigorate pledged to take better account of what done little to alleviate mandated rules of congressional budget hawks, making patients and other stakeholders really behavior that make value-based contract- it harder to reauthorize popular benefit value in the medicines they take in the ing inherently risky. These include: programs like the Children’s Health In- clinical setting. (1) regulatory requirements, especially surance Program (CHIP), which supports Finally, the FDA is actively encourag- the murky rules on engaging with payers reimbursements for a surprisingly high ing industry-led partnering initiatives to on P&R before a product receives full proportion of the industry’s most innova- share more trial data and cooperate in the licensing approval; tive new medicines in the pediatric space. analysis of adverse events, particularly in (2) exposure to violation of the Medic- Fiscal pressures may also stimulate the sensitive cancer space. Overall, the aid “best price” rule, including prosecu- regulatory actions to narrow tax subsi- agenda suggests faster times to drug ap- tion for price collusion, resulting in the dies for biopharma’s drug compliance provals and a willingness to take account possibility of hefty fines and denial of and support programs as a promotional of unmet patient need in the certification access to covered populations; and tool rather than a legitimate service to of trial endpoints. (3) anti-kickback rules that may define patients. Tax law can not only give, it can One bright spot in the legislative mix is industry investments in patient support also take away. the 21st Century Cures Act (Public L. 114- programs for complex therapies as an What biopharma must do in such a 255), a true bipartisan piece of legislation illegal, anti-competitive promotional divisive environment is to cultivate new enacted by Congress in December 2016. inducement. audiences outside the K Street “swamp” A significant portion of the FDA’s work Exemptions that minimize the legal and go deep on CEO demonstrations of in 2018 will be in providing guidance exposure for participants in any risk- public “authenticity” – the new coinage for biopharma on key pro-innovation sharing agreement could serve as a use- for reputational enhancement in an era provisions of the law. This will include ful first step in incentivizing the push where even facts are labeled “fake news.” measures to advance NDA reliance on for value. Yet, with the exception of an

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FDA move to legitimize that broader Nevertheless, numerous experiments dialogue with payers prior to authori- to breach the divides are underway this zation, government action to “de-risk” year – the long slog toward a value- value-based contracting is unlikely this driven health care system continues. One year. “Government is less relevant today project that bears watching is a multi- as a factor in this transition,” observes stakeholder initiative launching this Roger Longman, CEO of Real Endpoints, What biopharma month called LEAPS (Learning Ecosystem a market access consultancy, partner to for Accelerating Patient-Centered and Informa Pharma Intelligence and mem- must do in such a Sustainable Innovation) organized by the ber of the In Vivo EAB. “The commercial Massachusetts Institute of Technology’s segment is much further along, but it too divisive environment Center for Biomedical Innovation. With confronts significant challenges. One is backing from the state of Massachusetts misreading their audience: drugmakers is to cultivate new and three big pharma companies – often presume that payers are uninter- Merck, GSK and Sanofi – LEAPS will seek ested in negotiating value, when in fact audiences outside the to build a treatment protocol, evidence payers are desperate for new approaches base and value measurement tool that to managing their costs and maintaining K Street “swamp” and links providers, payers, pharmaceutical credibility with clients responsible for and IT firms, regulators and academic millions of covered lives.” go deep on CEO researchers around a series of function- At the same time, however, payers are ally relevant incentives, all geared to fighting a largely unseen pitched battle demonstrations of achieving patient-centered outcomes in a with drugmakers on the basic issue of designated state-wide population with a access to innovative specialty medicines. public “authenticity” specific, yet to be chosen chronic disease. “Payers and providers are looking for “Over the next year, the plan is to cre- ways to extract every imaginable dis- – the new coinage for ate a shared protocol for defining and count from the manufacturer aimed at delivering value, at three levels of en- preventing enrollees from being moved reputational gagement: (1) new product development; to low-cost meds once exclusivity ends,” (2) regimen/treatment development; and says long-time industry managed care enhancement in an (3) clinical disease management, using expert Mason Tenaglia. The list includes RWE,” center director Gigi Hirsch, MD, blocking co-pay coupons as well a new era where even facts tells In Vivo. She notes that the LEADS twist recently introduced by the leading project is precedent-setting by attract- pharmacy benefit managers (PBMs): are labeled “fake ing the participation of all the principal comprehensive “accumulator” programs players in the Massachusetts biopharma designed to counter any manufacturer news.” ecosystem. “We’ve got the commitment of incentive to help patients reduce deduct- the right people in the state to make this ibles and other out-of-pocket costs in work as a template for the value-driven their drug benefit. PBMs are also fighting system of the future,” Hirsch says. a CMS proposal to pass a portion of drug rebates extracted from the manufacturer Adapting To The Demands Of on to patients to reduce the cost burden. New Science “Such tactics are a negative distraction As more advanced, gene-based therapies to reaching that larger consensus around come on-stream this year, biopharma will value-based solutions to drug costs,” need to understand and communicate Tenaglia adds. the complex challenges of moving these An additional strategic question likely technologies from bench to bedside. In- to surface this year is how the arrival of stead of the standard hyped-up launch, complex curative and preventive tech- has little familiarity. What is the relevant these new products demand a “controlled nologies like gene therapy will shape value metric for a long-term cure or a rollout” approach due to the potential discussion among drugmakers and pay- technology that makes the prospect of for severe side-effects (like cytokine ers on the very definition of “value” in disease irrelevant to the patient? Much release syndrome) in some patients. health care. (Also see “New Payment And of the patient care experience will be Administration of these technologies Financing Models For Curative Regenera- shaped by a cellular engineering process safely to patients carries obligations that tive Medicines” - In Vivo, July 2017.) Adds rather than a one-off experience with a include setting up treatment centers at Longman, “These are new science plat- drug whose technology is well-known. academic teaching hospitals to monitor forms that extend into areas where the So there’s a new dynamic at work here in those receiving therapy, and retention of traditional biopharma business model how society itself defines value.” hundreds of trained professionals with

expertise in everything from handling Preserving The US Innovation It’s fitting to end In Vivo’s “year begin- live cells and tissues to courier logistics, Ecosystem ning” review with a reference to the pass- dosing, anesthesia and psychological For 75 years, the US has led the world ing of three prominent economists in 2017 counseling. There is also the details of in inventing and commercializing new who, through their theories and writings, coordinating access to hospital ICUs – medicines. Generous government fund- shaped how the world looks at medicines where reserving a single bed to cover a ing of basic research; strong academic and health care through much of the 20th sudden adverse patient episode can cost institutions combining world-class talent century and right through to today. upwards of $10,000 per day, even if it’s with an entrepreneurial bent; an inde- • Kenneth Arrow, PhD (born 1921) not used. pendent, rules-based regulatory infra- depicted health care as unpredictable The opportunity cost of a controlled structure; and extensive private capital and rife with market failures, includ- rollout is high but prudent. Only a few with a high-risk/high-return mind-set ing a yawning information gap where deaths from the new CAR-Ts and related continues to keep the US on top. But that producers (the physician) know more cell transfer therapies could rattle regula- is not an indefinite guarantee. than the consumer (the patient). His tors and payers and stop these advances “Some significant vulnerabilities, work continues to fuel the premise that from progressing further into the clinical largely self-inflicted, are raising concerns everything from insurance to prescrip- setting, where active observation can about the future of US medicines innovation drug testing must be subject to strict control for these incidences and remove tion,” contends In Vivo EAB member Ken government regulation. them as a barrier to care. Nevertheless, Kaitin, PhD, professor of medicine at Tufts • William Baumol, PhD (born 1922) it’s an unprecedented challenge of learn- University and director of the Tufts Center developed the “Baumol cost disease” ing by doing. The lesson here is that for the Study of Drug Development. “You theorem that holds health care costs extreme care must be taken if these com- have a long-term decline in the number of are destined to rise without the normal plex actions across multiple potentially federal grants for disease research, which productivity gains that occur in goods- hazardous supply and manufacturing has reduced opportunity for younger producing sectors because it is a service touch points are to earn the confidence researchers with promising ideas worth built largely on labor, an intangible of regulators, providers and payers. On commercializing in concert with indus- commodity that is harder to measure such confidence depends the approval try. But the most ominous trend is the than widgets. of additional gene therapy applications backsliding of the Trump Administration • Uwe Reinhardt, PhD (born 1937) and a larger, sustainable market for these on immigration. “The ‘America First’ po- invented the role of influential activist technologies, extending forward to a lemics is discouraging qualified foreign economist able to spin theory into policy, wider patient population. researchers from coming to this country an example of which was his success in The year 2018 will begin the testing time for study and employment. As a result,” making the individual mandate in health for this essential transition. Recognizing Kaitin says, “academic institutions like insurance a pillar of the 2010 Affordable the high stakes in the safety of next- Tufts are experiencing a decline in their Care Act. He worked both as an advocate generation immuno-oncology medicines, talent convening power, which has nega- and an insider, interacting frequently six major biopharma companies active in tive consequences for keeping our inno- with biopharma companies, where the space will launch a project next month vation edge against emerging competitor he argued for their support on more with the non-profit open access to clinical countries like China going forward.” transparency in drug pricing. Reinhardt trials group, Project Data Sphere. In the Thus 2018 offers an opportunity for bio- convinced Merck & Co. at one point to en- project, Project Data Sphere will work with pharma to re-examine its human capital dorse the reference-based pricing system all six companies in applying machine strategy from a fully globalized perspec- of his native Germany. learning applications to track and analyze tive. Given the aging US population, a The passing of these three innovators side effects from immuno-oncologic drugs souring national debate on inclusion and in ideas speaks to the question: is there now on the market, including the major the increasing importance of new skills a successor generation with the same po- checkpoint inhibitors. “Our material will in an era of rapid technological change, tential to influence how decision-makers be shared as de-identified open access it’s imperative for biopharma to raise the outside the academy, in business and data sets to help the companies, research- ante on talent recruitment and retention. government, look at health care, not just ers, regulators and other interested parties The urgency is accentuated by the planned in 2018, but for the decades to come? The compile evidence necessary to control reduction in H1-B visa quotas for high-skill agenda is urgent and it does not change. these events and improve the safety and foreign workers and as image issues send A good health system is one that balances reliability of the newest cancer drugs,” applicants to other countries seen as more the socializing goals of inclusion, access says Project Data Sphere CEO Martin Mur- welcoming to immigrants. and cost against the acquisitive animal phy, DMedSc, PhD. The first condition to spirits of invention. It remains an ideal, be reviewed is myocarditis events associ- Reviving Health Care’s Think Tank but disease is the universal experience – ated with CAR-T drug use, followed later Yes, human ingenuity determines what there is no opt out. by pancreatitis and neuropathy. (Also see really matters in health care, which is IV005265

“Free And Open: The Next Wave In Clinical mounting the best challenge possible Comments: Trial Data?” - In Vivo, May 2017.) against the endless trajectory of disease. Email the author:[email protected]

20 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com BIOPHARMA OUTLOOK ❚ Maximize Your Reimbursement Potential

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2017 was a watershed year in many respects, politically, economically and commercially for many players in the medtech field. Where will the opportunities lie in 2018? Will breakthrough 2018 medtech innovation still have a place among providers often OUTLOOK riding on fumes when it comes to budgets, and is it all as bad as some would make out?

BY ASHLEY YEO he value-based health care agenda gains incrementally more currency with each passing month. Medtech companies have long since moved on from Medtech M&A in 2017 continued at the “when and if,” to “how and whom,” as they size up both the opportunity impressively high level of recent years, and cost of playing an enhanced role in health care delivery. They must but no matter how many transactions decide whether to commit themselves to a holistic system where efficiency take place, there are always more of operational performance, cost reductions, lowering readmissions and patient sat- candidates large and small in the wings. T isfaction are allied to outcomes improvements. The technology remains central in this new environment, and innovation paramount. As stakeholders embrace a focus on But it is no longer the endgame, rather a stage in the overall process – albeit an essential outcomes, sustainability and system cost one. It is an environment where manufacturers, at least, see themselves as partners of reductions, the industry is moving away from fee-for-service and supply push – the providers in health care delivery. This is indeed a compelling argument in cases but not as quickly as originally thought. such as Johnson & Johnson’s CareAdvantage and Medtronic PLC’s Integrated Health Solutions programs that aim to develop tailored services and solutions to improve So what? Sharing the total cost of care clinical, operational and financial outcomes. (Also see “Options For Medtechs In A might not have been in a company’s Value-Based Care World” - In Vivo, November 2017.) mission statement 30 years ago, but Those able to take advantage of the shift in health care priorities are building new the wording is now indelible across the business models consistent with mandatory bundles like the Centers for Medicare and industry. Forward-looking medtechs will Medicaid Services’ (CMS’) Comprehensive Care for Joint Replacement (CJR), and shared seize the opportunity, as indeed they services. CMS pulled back somewhat from mandatory bundled concepts in the latter must, for there are many largely untapped part of 2017, but the move away from fee-for-service remains well underway: up ahead as well as substantially saturated markets await newer concepts still, such as population health management, which will use data available – and they don’t tend to shrink. analytics on individuals within population subgroups to improve clinical outcomes

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and reduce costs; and risk-sharing deals, notion that users are seeing more benefits such as the Aetna/Medtronic agreement of value-based health care is borne out in of June 2017 (see right column), on a the Quest/Inovalon survey finding (see broader scale. above) that 70% of health plan executives However, while value-based health had noticed progress in the alignment of care is the present and the future, physi- health plans and providers of health care. cians don’t see it as tearing up the tarmac, Although fewer than half of physicians not yet at least. A June 2017 study by were of this view, in all, over eight in 10 Quest Diagnostics Inc. and Inovalon, of the combined survey group agreed on ❚ AETNA AND MEDTRONIC surveying physicians and health plan the pressing need for alignment between SHOW THE WAY executives on the penetration of value- payers and providers to achieve value- based health care in the US, found that based care. The non-exclusive, outcomes-based the health care industry continues its The drivers of this won’t be the govern- deal between payer Aetna and systemic shift from a fee-for-service de- ment, CMS or particularly manufacturers, Medtronic is designed to support the livery model to a value-based system that but provider systems – doctors and large transition of patients with type 1 or aims to deliver and pay for health services health systems that can provide better type 2 diabetes away from multiple based on quality rather than quantity, but outcomes quality than other systems daily insulin injections and toward that progress is only moderate. – and large commercial payers. Aetna Medtronic’s MiniMed 530G, 630G In 2016, a quarter of physicians and Inc., which has size and influence and and 670G insulin pumps. These health plan executives believed the US an incentive to shift to a value-based devices feature SmartGuard tech- had a value-based care system; in 2017 world, has shown the way. The story of nology, which prevents hypoglyce- the figure had risen to only 29%, accord- its mid-2017 deal with Medtronic relating mia (which can stop patients from ing to the Quest/Inovalon survey. Longer- to the supply of insulin pumps was one of reaching HbA1c goals). The health serving professionals were more likely to In Vivo’s most-read features of last year, outcomes in these patients are consider that fee-for-service continues partly because it pointed to the shape of measured, and part of Medtronic’s to dominate health care, but the general things to come in terms of supply deals reimbursement will depend on the view remains that a majority of individu- for the medtech sector as a whole. (Also achievement of pre-agreed clinical als at the point of care believe that US see “Medtronic’s Deal With Aetna Heralds improvement thresholds. health care is behind the adoption curve. New Value-Based Era” - In Vivo, September In its ongoing Global Assessment Initia- 2017 and box, Aetna And Medtronic Show tive with the Economist Intelligence Unit, The Way.) less of legislative reforms spearheaded by Medtronic stresses that many countries As long ago as 2012, the American Diabe- the federal government. have a strong political will and are mov- tes Association put the cost of diabetes to The ACA is proving hard to withdraw ing in the right direction. Overall, the the US at $245 billion, with $176 billion in entirely due to the GOP’s wafer-thin Sen- value-based health care model is being direct costs (including $90 billion in hos- ate majority that includes John McCain introduced in step-by-step fashion. pital inpatient and nursing home expenses and two other Republicans opposed to That view is shared by the Boston and $7 billion in emergency care) and $69 ACA repeal, and the total opposition of the Consulting Group. Interviewed by In Vivo billion in indirect costs/lost productivity. Democrats. But what could happen to the at year-end, health care and medtech The figure could now be as high as $322 ACA in 2018? US President Donald Trump specialists at the global management billion. The question for manufacturers, has sought to save face after successive consulting firm said that while up to four- as they ultimately help to bring down repeal failures in 2017 by claiming that fifths of the US market is talking about provider costs, is how they will be sustain- the ACA was “essentially repealed” after risk-based/value-based outcomes, less ably rewarded, not just in diabetes, but in eliminating the individual mandate in his than 15% of current US payments can be AF and HF and indeed all other long-term successful tax reform bill; the mandate classified as value-based or risk-shared conditions, where the value-based agenda required those who opt out of coverage to – and even those are still largely fee-for- will have most leverage. pay a penalty. It means that Republicans service plus an incentive, as opposed to a The Trump administration, backed by have secured one significant legislative true insurance risk, or population-based the Republican-led Congress, continues victory against Obamacare, but other payment. The rest remain fee-for-service, its drive to repeal and replace the Afford- aspects of the ACA may still be targeted for procedure-based reimbursement. able Care Act, which went live just over (Medicaid expansion being the biggest). So it’s not an overnight transition, to seven years ago. This uncertainty over the Repeal will still be on the table in 2018. say the least, but it is the direction of ACA’s future may destabilize some facets The comprehensive tax reform was travel. US ACOs using value-based con- of health care, but the transition to value- arguably the president’s only major vic- cepts are finding that more of them (50%) based care is not one of them. Indeed, tory in a roller coaster first year in office; it saved money in the third year of partici- over 80% of physicians and health plan means among other things that corpora- pation than in the first (33%), according executives say they believe the transition tions will see their headline income tax to a recent Avalere Health webinar. The to value-based care will continue, regard- rate drop from 35% to 21%, bringing the

US more in line with the average rate in alone warning that any impediment to positive airway pressure (CPAP) device. the developed world. launching new and enhanced products But the implant, controlled by a remote or would negatively impact the group’s wearable patch, helps to synchronize the The Dreaded US Sales Tax performance. Boston, Stryker Corp. and intake of air with the action of the tongue But will the ACA’s 2.3% device sales ex- Medtronic have all made efforts to inno- using a breathing sensor and a stimulation cise tax return? It was due to do so this vate away from the commodity element lead powered by a battery. January 1, the temporary moratorium of their sales mix, and over the past five in force since 2015 having ended at the years have all managed it to below 50%. • Cancer therapy: Targeted therapies will turn of the year. Industry was getting The German industry association, become widely used to treat breast cancer increasingly agitated at the prospect of a BVMed, ever seeking to underline the in 2018. PARP inhibitors for patients with reinstatement of what it has called a job- totally different marketing models of specific mutations in BRCA1 or BRCA2, killing tax as the clock ran down late in medtech versus pharma, says that 33% of and novel CDK4/6 inhibitors for ER- the year. Under the legislation, the total national medtech sales in Europe’s largest positive/HER-2-negative breast cancer are cost to the medical device industry would medtech market are made with products having positive outcomes in clinical trials. be roughly $20 billion over 10 years. A that are no more than three years old. Its Novel HER-2-targeted agents continue to House bill late in the year, the Bipartisan point is that innovation is as crucial a show benefit in this subgroup of HER- Market Stabilization and Innovation Act differentiator as ever, even if the real in- 2-positive patients. These studies point to of 2017, included tax repeal wording. novation up ahead will be in the delivery an increasing survival rate, and perhaps This single issue dominated much of paradigm and keeping patients out of the eventual end of chemotherapy for a AdvaMed’s US market support efforts in the system. And if they’re in the system, significant population of breast cancer the 2013–15 period, when the tax was be- treating them as efficiently as possible, patients. That said, the current mecha- ing levied, but as US equity analyst with with reproducible methods using robot- nisms – hormone therapy, chemotherapy Jefferies Healthcare Raj Denhoy says, ics and leaning on artificial intelligence and radiation – are still seen as valuable nobody really expects the tax to return and machine learning wherever possible. options for prolonging life; however, they permanently. (See online sidebar, “Tough Given the higher stakes, targeted and ap- are often not enough to keep cancer at bay. At The Top: Raj Denhoy On The Drive For plied innovation is flourishing.Cleveland Growth In A Maturing Medtech industry.”) Clinic’s annual list of the medical innova- • Chemotherapy hair loss: Loss of hair Nevertheless, the US industry is doing tions that could potentially transform the post-chemo can have a major effect on its work anyway, arguing that the tax sector shows how medtech innovators will women. A new FDA-approved technol- penalizes US companies unfairly. Medical be pushing back the boundaries of patient ogy, “scalp cooling,” which reduces the device trade association AdvaMed presi- care in 2018. It’s a snapshot of areas where temperature of the scalp a few degrees dent and CEO Scott Whitaker wrote to the R&D efforts are meeting demand pull – not during and after chemo, has been shown president in mid-December, reminding the supply push that was once the holy to be highly effective for preserving hair him of the tax’s negative impact on medi- grail for manufacturers. The fields where in women receiving chemotherapy for cal innovation, a resulting loss of 29,000 innovation will help global health care early-stage breast cancer. jobs (according to the US Department of break new ground this year, according to Commerce), reduced R&D and slowed Cleveland, include: • Gene therapy for retinal diseases: In capital expansion. Whitaker was seeking mid-December the FDA approved Spark swift action before the bi-weekly January • Diabetes Control: A hybrid closed-loop Therapeutics Inc.’s gene therapy Luxturna payments were due to kick in – with any insulin delivery system that helps make (voretigene neparvovec-rzyl), for inherited potential refunds not being made by the type 1 diabetes more manageable by en- retinal diseases, which should provide vi- IRS until the end of the year. abling direct communication between the sual function improvements in some Leber continuous glucose monitoring device congenital amaurosis and retinitis pigmen- Still A Place For Innovation? and insulin pump to stabilize blood glu- tosa patients. Experts believe the approval Does this really affect medtech innova- cose is set for mainstream use. In 2018, could lead to more gene therapies getting tion, given that innovation is a mov- with more patients likely to demand the orphan drug and breakthrough status. ing feast in a fast-changing industry? technology, more insurers will reimburse Johnson & Johnson, for one, says that its for it. It is also predicted that this will ac- No Longer Just “Product-Focused” continued growth and success depends celerate a type 2 diabetes product. Solutions on its ability to innovate products and Cleveland’s selected solutions for 2018 services that address the evolving health • Neuromodulation: Another innovation are not just product-focused, however. care needs of patients, providers and tipped to disrupt the market in 2018 is Mirroring the change in perceptions of consumers. New products introduced an implant that delivers stimulation that what constitutes health care innovation within the past five years accounted for opens key airway muscles during sleep. in this second decade of the millennium, around 22% of its 2016 sales, for example. Although sleep apnea impacts 21 million its list of innovations includes several Innovation, in fact, still means ev- Americans, more than 40% of sufferers re- broader concepts that assist health care erything. Boston Scientific Corp. is not portedly dislike the idea of the continuous delivery in all settings.

24 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com MEDTECH OUTLOOK ❚

1. One is telehealth, finally making a (See online sidebar, “Gottlieb’s FDA Lights Exhibit 1 reality of extending video and sensor A Fire Under Medtech Policy Activity But Major Medtech Markets monitoring platforms and other distance Reimbursement Challenges Remain.”) Worldwide – 2022 Prediction health concepts to patients’ homes. Says Brian Chapman, head of ZS’ Global Increasing connectivity through mobile Medtech Consulting practice, “Not every technology has seen hospitals get ready ‘innovation’ is worth having, but one of $62bn for widespread adoption in 2018: 90% of my wishes for 2018 is flexibility and inno- Cardiology US health care executives are reportedly vation in how we pay for digital health.” building a telehealth programs to cater to (Also see “Resilience Is Key For Medtechs 7 million patient users in 2018. Facing Provider And Payer Flux In 2018” $50bn 2. Similarly, another long-talked of goal, - In Vivo, January 2018) centralized monitoring of inpatients, is And there are plenty of areas of sub- Imaging becoming the realistic and efficient alter- stantially unmet need that await greater native to constant attention by bedside innovator attention, including depres- $44bn caregivers, where the risk is that they may sion, deafness, dementia, blindness, become desensitized to patient needs/ peripheral vascular disease, obesity, Orthopedic alarms among the noise on the ward/unit. stroke and aneurysm. Instead, off-site personnel using sensors $37bn and high-definition cameras can monitor The Drive For M&A Will Continue vital signs, and establish thresholds for At A Faster Pace Ophthalmic when on-site intervention is required. M&A plays are a quicker if more expen- 3. And a third is the implementation of sive way of acquiring innovation. The fast-track or ERAS (Enhanced Recovery number of $1 billion-plus medtech deals $28bn After Surgery) methods for patients post- announced in 2017 and reported by In Vivo General/ surgery. A recent protocol that permits and sister publication Medtech Insight hit Plastic surgery patients to eat before surgery, limits opi- a round 10. (See Exhibit 2.) The standout oids by prescribing alternate medications Becton Dickinson & Co./CR Bard Inc. and encourages regular walking has been deal continued the trend of the creation $26bn shown to both reduce complication rates of larger, diversified companies that can Endoscopy and speed recovery. The spin-offs include better leverage hospital relationships fewer blood clots; less nausea, infection seen in recent years. According to BMO and muscle atrophy; and shorter hospital Capital Markets, the outstanding poten- $25bn stays. Such protocols are expected to gain tial candidates for such a merger include further ground in 2018. Smith & Nephew PLC, Boston Scientific Drug delivery Product pipelines have always driven and Edwards Lifesciences Corp. investment trends in medtech, says BMO However, 2018 may well see the $17bn Capital Markets, which predicts this renewed prominence of bolt-on acqui- same trend in 2018. It believes the evolv- sitions for technology additions and Wound management ing diabetes landscape, transcatheter growth. Products offering a competitive mitral valve repair/replacement market, advantage in the non-commodity bracket $16bn transcatheter aortic valves, minimally will be picked off to bulk out sales mixes, invasive glaucoma surgery (MIGS) and and the range of buyers could include Diabetes care robotic-assisted surgery applications Baxter International Inc., Boston Sci- (large joints, spine and surgery) will all entific and Johnson & Johnson, and the merit closer investor attention in 2018. sellers might include, among others, $15bn These will help expand the global mar- Glaukos Corp., NuVasive Inc., Wright Renal care ket (including IVDs, dental and health Medical Group NV and chronic pain care IT products to around half a trillion relief therapy provider Nevro Corp. dollars by 2022, according to Jefferies Healthcare). (See Exhibit 1.) Other Issues To Note In 2018 Avalere Health adds that a lot of inno- EU Regulatory Change Is The Market vation is happening in the digital health Access Talking Point Bar None space, and also praises the potential for The biggest regulatory change for many good, in terms of encouraging innova- years in the leading medtech markets tion, of the US’ 21st Century Cures Act globally finally went live in 2017: the EU and FDA commissioner Scott Gottlieb, Medical Device Regulation and its sister MD’s, risk-based approach to regulation. IVD Regulation became effective in May, SOURCE: Jefferies Healthcare

Exhibit 2 The Billion-dollar Medtech Deals Of 2017

ACQUIRER TARGET FIELD CONSIDERATION ANNOUNCED Becton Dickinson CR Bard Medical devices $24bn April 23

Rationale: Creation of a highly differentiated medtech uniquely positioned to improve the process of care and the treatment of disease for patients and providers.

Medtronic’s Patient Monitoring Cardinal Health Patient monitoring $6.1bn April 18 and Recovery division

Expanded product offering, addition of well-established brands that are a “natural fit.”

Allergan Zeltiq Aesthetics Medical aesthetics $2.475bn Feb. 13

Immediately accretive and enhances Allergan’s global medical aesthetics portfolio in a $4 billion market.

Philips Healthcare Imaging – laser atherectomy catheters for both Spectranetics $2bn June 28 (Netherlands) coronary and peripheral indications

Strengthens Philips’ image-guided therapy business in a €6bn market.

Fresenius Medical NxStage Medical Urology – dialysis market $2bn Aug. 7 Care (Germany)

Supports core business growth with the offering of innovation, better clinical outcomes (through Care Coordination) and improvement of the patient experience.

Hologic Cynosure Medical aesthetics $1.65bn Feb. 15

Gives Hologic entry into one of the fastest-growing segments in medtech; expands Cynosure’s customer reach.

Shanghai Cardinal Health Cardinal Health’s pharmaceutical and medical Pharmaceuticals $1.2bn Nov. 14 China products business in China (China)

Greater distribution reach in China.

Urological medical devices – minimally Teleflex NeoTract invasive tech for treating lower urinary tract $1.1bn May 9 symptoms due to BPH

Boosts Teleflex’s drive for mid-single digit constant currency sales growth for the next several years with products that have long product life cycles that benefit from patent protection, and demonstrate superior clinical benefit while providing cost benefits to hospitals.

Paragard intrauterine copper contraceptive CooperSurgical Product asset $1.1bn Sept. 12 device from Teva (Israel)

Non-core Teva product, makes Cooper only company with an IUD on the US market that is hormone-free, long-lasting and reversible.

Integra Codman Neuro Neurology $1.045bn Feb. 16 LifeSciences

Expands Integra’s global leadership with the addition of a broad medical device portfolio in the neurosurgery market.

Note: US unless stated. SOURCE: In Vivo research

26 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com MEDTECH OUTLOOK ❚

subject to three- (MDR) and five- (IVDR) second time running – should be over member-state Eurasian Economic Union year transition periods. When the MDR for the UK by the end of 2020, when the are also among those moving into hith- enters into full force, it will impose signif- EU-imposed transition period for the UK’s erto uncharted territory, strengthening icant additional premarket clinical data exit ends. (Also see “UK Medtech One their national regulatory systems and/ requirements, higher-level scrutiny and Year Post-Brexit Vote: Still In The Land Of or harmonizing, in moves that will pay more stringent postmarket requirements. Uncertainty” - In Vivo, June 2017.) dividends in terms of patient care, quality It will eventually introduce Unique De- The UK industry association (ABHI) and support for innovation. vice Identification (UDI) among many is preparing contingencies for possible other changes.(Also see “Medtechs Must loss of market access, and among its Final Thoughts – Act Fast On New EU Regulations Or Face many planning and support activities Thinking Differently Gridlock” - In Vivo, April 2017.) has recently joined the Global Medical Global medtechs in 2018 know that health There are significant capacity and Technology Alliance (GMTA). Many com- care spending in its current form is un- timing concerns surrounding the new panies wonder about the true impact on sustainable, and that they must be alive MDR. The transition to the EU MDR is their business, and should at last know to the shifts in incentives and a realign- the greatest medtech industry challenge more when EU-UK trade deal negotia- ment of players in health care delivery. for the coming 3–5 years, according to tions start, which the EU says will not be Amid the consolidation of and mergers Swiss-based think tank ConCeplus’ Oc- until March 2018 at the earliest. among large hospital systems, buyers tober 2017 LimedEx Index report. It puts For now, medtech is taking a typically will be keener to do business with fewer, the overall ecosystem compliance cost balanced view. LivaNova PLC CEO Damien broader medtech clients, hence some of at $18 billion in the coming three years, McDonald told In Vivo that Brexit would the rationale behind the Becton Dickin- and notes that it represents an involun- not have a material effect on business, son and Bard merger, in the example of tary shift to pharma-style compliance and would not encourage it to move its HQ several of similar or larger magnitude in (evidently much to BVMed’s displeasure), out of the UK. (Also see “True To Its Word, the past five years. which will affect R&D budgets and thus LivaNova Sheds CRM – To MicroPort” - In Medtechs are having to shoulder a new the ability to innovate. Vivo, December 2017.) BioMerieux Inc. responsibility – sharing the total cost of The average EBIT impact across manu- says that the UK (representing some 3% care. And as the commoditized portion of facturers serving the EU will be –4%. of its global sales in 2016) leaving the EU the typical medtech company’s product Resources are already thin enough in would not present a risk that could have a mix naturally continues to expand, the medtech, but to cope with the changes, significant impact on its accounts. In gen- pressure on that company to offer value it is considered that companies will need eral, medtech industry players outside the with solutions that maximize outcomes to hire an aggregate 31,000 extra FTE staff UK tend to view the whole Brexit episode means that the premium on true innova- for their governmental and regulatory with mild confusion. tion is as high as it’s ever been. affairs departments. Who will pay for all It is true that changes in delivery models this, and how, are questions that appar- Dedicated Global Regulatory have forced the industry to think differently no one has been tempted to tackle Systems Are The New Black ently, but on the other hand medtech with any great alacrity. There is no choice The MHRA should soon find an enhanced markets remain vast, and many are but to comply; the advice remains, as in global role for itself, and will surely bring under-penetrated. Medtech is, in fact, in the previous 18+ months, don’t leave it its skills and experience to bear in mat- pretty good shape. Rather than declining to the last minute and risk your products ters of the International Medical Device in importance, some aspects of “innova- being EU-market ineligible. Regulators Forum (IMDRF) and global tion” have simply become different to what medtech regulatory harmonization. the industry has been accustomed to. The Brexit Is A Storm In A Indeed, much is happening elsewhere, culture shift continues in 2018. Medtech Teacup in Asia-Pacific especially, with, for ex- IV005255 The UK – a soon to be ex-EU member state ample, a new conformity assessment Comments: against most conventional wisdom and system bedding in Malaysia, a brand-new Email the author: [email protected] advice – has the additional burden of medtech regulatory system (deferred hoping it can use the EU’s medtech regu- to January 1, 2019) for Vietnam, smart READ MORE ONLINE lations while being outside the club. The regulation being prioritized in Singapore, loss of the UK Medicines and Healthcare a new IVD regulation in the Philippines Tough At The Top: Raj Denhoy On Products Regulatory Agency’s (MHRA’s) and the Asean bloc’s regulatory “har- The Drive For Growth In A Maturing technical input on EU regulatory matters, monization” creating a new, potentially Medtech Industry http://bit.ly/2DviErZ as the agency’s balanced, free-market, industry-friendly system. company-friendly thinking, will impede Ukraine (a new EU-aligned system Gottlieb’s FDA Lights A Fire Under the system, possibly immensely. Brexit based on the EU’s three Medical Device Medtech Policy Activity But is a matter of deep regret for many; how- Directives), South Africa (the long- Reimbursement Challenges Remain ever, the “uncertainty” – surely the Word awaited device regulatory system finally http://bit.ly/2DC8F8k of the Year in both the UK the US for the starts up in 2017) and Russia and the five

If the beginning of 2017 was marked by doubts around whether and how the FDA would act with respect to complex diagnostics, we enter 2018 feeling that slow- moving vessel may finally be 2018 turning. OUTLOOK

BY MARK RATNER DA product reviews were the lead story for the year, as Class II device designa- tions emerged for large-panel tumor-profiling assays and direct-to-consumer We predict that artificial intelligence (DTC) genetic health risk assessment (GHRA) tests. tools for diagnosis and patient In early November, the agency put forth its plan to regulate DTC GHRAs, monitoring will continue to gain exempting them from premarket review under certain conditions, when it al- traction as pharma and medtech gear lowed 23andme Inc. to launch a set of FDA-validated direct-to-consumer tests predicting up in digital health, with diabetes care F individuals’ predisposition to genetic diseases and conditions. (Also see “US FDA Imple- leading the way. ments ‘Firm-Based’ Regulatory Approach To DTC Genetic Health Risk Tests” - Medtech Insight, November 6, 2017.) Under the proposed scheme, manufacturers of these types The diagnostics deal front was largely of tests would have to come to FDA for a one-time review, after which they may enter the quiet in 2017, but for a smattering of big- money financings and acquisitions. market with new tests without further premarket notification. The agency also established special controls for these tests in a separate de novo classification order. Several categories of tests remain outside the new rules: those intended for prenatal screening, determin- So what? Regulatory pathways around innovative cancer tests – especially the ing predisposition to cancer that could lead to taking medical action, pharmacogenetics long-standing issue of whether and how testing, or assessing the presence of deterministic dominant variants. to regulate LDTs – will continue to be a Critics of DTC testing generally maintain their opposition on the basis that it needs to hot topic. Even as FDA seeks input for be done in collaboration with a provider. But they appear willing to wait and see how greater technical and clinical clarity, the the agency applies the special controls, which among other things seek to assure that use of complex assays in routine care labeling will adequately inform consumers of the limitations of the tests. remains far off. Two weeks later, FDA turned its attention to next-generation sequencing-based (NGS- based) large-panel tumor-profiling assays when it granted authorization toMemorial Sloan Kettering Cancer Center’s MSK-IMPACT laboratory-developed test (LDT). As with DTC GHRAs, subsequent NGS-based tumor-profiling tests need only show substantial equivalence to a predicate device. MSK’s de novo submission to FDA included

28 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com DIAGNOSTICS OUTLOOK ❚

and extended information previously Scientific Inc.’s OncomineDx Target Test Our other noteworthy private placement submitted to the New York State Depart- in lung cancer, developed in collaboration of 2017 was to Verily Life Sciences LLC, ment of Health (NYSDOH), which had with Novartis AG and Pfizer Inc., which which received an $800 million invest- approved use of the test on samples from helps direct the use of Pfizer’s Xalkori ment from Singapore investment company the state. The FDA used that information (crizotinib); AstraZeneca PLC’s Iressa Temasek in January in exchange for a mi- in its review, and said that going forward (gefitinib); and the combination of the nority stake in the company. The two com- NYSDOH could function as an FDA third- Novartis drugs Tafinlar (dabarafenib) and panies will also collaborate on expanding party reviewer of IVDs, including tests Mekinist (trametinib), got the OK in June. Verily’s programs outside of the US. similar to MSK-IMPACT. Other accred- (Also see “Podcast: Thermo Fisher Talks A major focus of Verily is in diabetes, ited, third-party FDA reviewers also may Regulatory Experience With Oncomine” - where it has partnered with Dexcom Inc. become eligible to conduct such reviews Medtech Insight, July 6, 2017.) around smart glucose monitors. We pre- and make clearance recommendations dict that artificial intelligence tools will to the agency – a tacit acknowledgment Diagnostics Deal-making continue to gain traction as the pharma of the need for greater resources to build Genetic technology was also the founda- and medical device industries gear up in an inspection program that can handle tion for the biggest oncology diagnostics- digital health, with diabetes care leading the increasing numbers of LDTs that may oriented acquisition in 2017. In a push to the way. Roche, for example, bolstered cross the transom. As a result, developers expand its health care offerings with an its diagnostics division in June via the of NGS-based tumor-profiling tests may emphasis on precision medicine, Konica acquisition of MySugr GMBH. The deal not need to submit anything directly to Minolta Inc. agreed to pay $800 million gave Roche a set of apps and services FDA in the future. in cash plus up to $200 million in earn- that combine diabetes coaching, therapy These moves seemingly opened the outs for privately held genetic testing firm management, test-strip supply and au- door for similar LDTs, but that door may Ambry Genetics Corp. The deal was partly tomated data tracking to blend with its have been slammed shut on December 1, funded by the public/private Innovation own glucose monitoring systems and when Foundation Medicine Inc.’s Foun- Network Corporation of Japan. It will services. Medtronic PLC has licensed dationOne CDx received a full marketing create new diagnostic technologies for diabetes prevention and self-management approval as a companion diagnostic to oncology and drug discovery, and bring a programs and developed a cognitive app 15 targeted cancer drugs, benefiting from comprehensive genetic-diagnostic portfo- that harnesses IBM Watson Health’s com- the agency’s expedited access pathway lio to Japan, among other markets. puting power to process information from as a breakthrough-designated diagnostic. The Asian market was also the focus Medtronic’s pumps and glucose sensors to (Also see “First Expedited NGS Test Breaks of diagnostics’ biggest acquisition of the help patients better manage their disease. Through FDA Review” - Medtech Insight, year. In a bid to further grow its presence December 1, 2017.) outside the US, especially in China and Looking Ahead Along with the nod from FDA, Foun- the emerging markets, PerkinElmer Inc. In a year dominated by cataclysmic dation Medicine obtained a positive paid $1.3 billion in cash for German IVD storms, the Northwestern hemisphere was proposed National Coverage Determina- multinational EuroImmun AG. at least spared having to contend with a tion from the Centers for Medicare and Although Abbott Laboratories Inc.’s major viral outbreak. The same may not Medicaid Services, which had reviewed $5.8 billion acquisition of Alere Inc. in be true of 2018. the product at the same time as FDA under February was technically the year’s big- Scott Gottlieb, MD, has pushed hard to the FDA/CMS Parallel Review Program. gest, we included that deal, which took streamline FDA regulations following his The NCD effectively prevents other labo- more than a year and a half to complete, installation as commissioner in May 2017. ratories with NGS-based tumor-profiling in our 2016 Year in Review. (Also see “Di- The strength of leadership at other federal LDTs from being reimbursed for running agnostics In 2016: From Alere To Zika” - In health agencies, however, is less certain: their tests, an indirect way of regulating Vivo, January 2017.) Last year also ended at Health and Human Services, Alex Azar’s them by kicking the issue to CMS to ar- with Grail Inc. on the cusp of completing nomination is still under review and the ticulate a payment policy. The molecular a billion-dollar Series B round, for which Centers for Disease Control and Preven- diagnostics community, understandably, the first tranche, of $914 million, finalized tion has felt pressure from the Trump is taking issue with this action and will in February 2017. Two months later, the administration to ban terms including no doubt be seeking a compromise posi- developer of liquid biopsy technology “science-based” and “evidence-based.” tion, perhaps arguing for a lesser amount merged with China’s Cirina Ltd., which (Also see “HHS Nominee Azar And The of reimbursement for non-FDA approved is also focused on early-stage cancer de- Taint Of Industry” - Pink Sheet, December LDTs: the public comment period will end tection using blood-based markers. (Also 6, 2017.) As we also said last year, it is dif- in early 2018. see “M&A Analysis: Grail’s Chinese Merger ficult to gauge how the current administra- Looking beyond LDTs in oncology, Wraps Up Busy May” - Medtech Insight, tion will respond to a significant public the first traditional IVD (kit) companion June 9, 2017.) Another liquid biopsy firm, health threat. diagnostic to identify multiple cancer mu- infectious disease-focused Karius Inc., IV005263 tations using next-generation sequencing took in $50 million in a Series A round Comments: also gained FDA approval. Thermo Fisher in August. Email the author: [email protected]

A Virtuous Cycle: What The Immuno-Oncology Revolution Means For Other Disease Areas

Execs from Merck, Pfizer, Bristol, AbbVie and smaller biopharmas weigh in on how developments in cancer research may benefit other disease areas, especially autoimmune and neurological conditions. Shutterstock: Ralwel Shutterstock:

BY EMILY HAYES pproval in 2011 of Bristol-Myers Squibb Co.’s CTLA-4 checkpoint inhibi- Immunotherapy research that has tor Yervoy (ipilimumab) in melanoma signaled the start of the immuno- transformed cancer care could benefit therapy revolution in the field of cancer therapy, followed by the PD-1 other major disease areas, including inhibitors and with new mechanisms nearing the market. Data presented those where the safety bar has at the Society for Immunotherapy and Cancer (SITC) annual meeting in traditionally been much higher. NovemberA revealed that PD-1/L1 inhibitors such as Bristol’s Opdivo (nivolumab) and Merck & Co. Inc.’s Keytruda (pembrolizumab) are being tested in about 1,500 clinical Panelists at the recent BIO Investor trials, of which 74% are evaluating combination approaches with other immunothera- Forum agreed that industry’s attention pies and traditional targeted agents. (Also see “Bristol’s Strong SITC: IDO, 1L Kidney and investor dollars are turning toward Cancer And New Mechanism Data Bode Well” - Scrip, November 13, 2017.) wider applications for immuno-oncology Development has been fueled by high unmet need and regulatory willingness to speed discoveries. approvals for drugs aimed at life-threatening diseases. And although immunotherapy has been well established in other fields for years, the burst of immuno-oncology is So what? Scientific breakthroughs now feeding back to other disease areas. that have driven the IO revolution can “All the data coming out of the huge set of clinical trials in IO will now help drive accelerate the pace of drug development understanding of other disease areas as well,” Luisa Salter-Cid, PhD, Bristol’s head of outside cancer. Biomarkers will be key discovery biology for immunology, IO small molecule and genomics, says. for driving adoption of immunotherapy The CTLA-4 mechanism of action behind Yervoy, for example, is also related to drugs into areas where the risk/benefit case is harder to make. traditionally used for immune disorders. Bristol’s co-stimulatory Orencia (abatacept) blocks the interaction between CD80 and CD86. (Also see “BMS Q&A: Hunting For Biomarkers To Improve Treatment Of Autoimmune Diseases” - Scrip, November 20, 2017.)

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What Goes Around, Comes Around sponse, though it’s unclear which of these Brother From Another Mother During a panel on lessons learned from are most responsible. There has been a In autoimmune diseases, many drugs immuno-oncology at the recent BIO lot of analysis of the immune repertoire work by mitigating an overactive im- Investor Forum, Alex Szidon, PhD, head and specific antigens have been identified mune response. Conversely, in oncology, of the West Coast innovation hub and ex- among many diseases with similar state-of- the goal of treatment may be to increase ecutive director of business development the-art technology. “That will be a huge win immune surveillance thereby improving and licensing at Merck, commented that for target identification in multiple disease the chances of identifying cancerous it’s exciting to see the “virtuous cycle of settings once it’s a little more robust and cells in order to clear them from the reverse translation.” economical,” Robbins predicted. body, Citeline analyst Pamela Spicer That includes an increase in investment Whether you are talking about a neuro- notes. Developers can design drugs to in immunotherapy across the board. A degenerative lesion, a fibrotic condition treat autoimmune diseases by blocking sign of the times is AbbVie Inc.’s deal or a tumor microenvironment, there are T-cell co-stimulatory molecules, thus in October with immune-system focused very similar messengers and the assay reducing a hyperactive immune system, Alector LLC – including a $205 million up- capabilities to look at those are going whereas drugs being developed in oncol- front payment – to access technology that to be common, Merck’s Szidon said. In- ogy might attempt to activate the same will be used to develop and commercialize novators have developed high-resolution co-stimulatory pathways to initiate a drugs for Alzheimer’s disease and other tools to look at cell components and T-cell immune response, she explains. neurodegenerative disorders. Alector is interrogate them deeply. Hopefully this (See Exhibit 1.) exploring the role of immune deficiencies will lead to better quality targets – bet- Scott Brun, MD, president and cor- in the central nervous system in neurode- ter starting points to go after, he said. porate strategy office head at AbbVie generative diseases. (Also see “BMS Q&A: “From a pharma perspective we’d like to Ventures, noted during the BIO Investor Hunting For Biomarkers To Improve Treat- see things develop a bit more,” but given Forum panel that AbbVie Inc.’s pipeline ment Of Autoimmune Diseases” - Scrip, the tools available and the literature as includes a bispecific CD40 agonist for November 20, 2017.) it stands, “these are smaller leaps and cancer and a Phase I CD40 antagonist (BI The “pace with which this innovation it doesn’t seem like a moonshot now,” 655064), which it in-licensed as a Phase I is coming is really outstanding and it’s Szidon observed. candidate for lupus from Boehringer In- not going to stop,” Isaac Ciechanover, Tumors are essentially like a chronic gelheim GMBH in March 2016. AbbVie’s MD, president and CEO of Atara Biother- infection, and it’s not surprising that in-house developed bispecific CD40 apeutics Inc., said during the panel at the there would be potential applications in agonist ABBV-428 entered the same year BIO Investor Forum, held October 17–18 neurology and other pathological envi- and is in Phase I for solid tumors. (Also in San Francisco. Atara has an allogeneic ronments, Szidon continued. He added see “ Boehringer Hopes To Tap AbbVie’s cytotoxic T lymphocyte immunotherapy that he thinks in the next three to five ‘’Humira Magic’’ In Immunology Pact “ - platform that it is applying in cancer and years there will be an explosion in oppor- Scrip, March 7, 2016.) also multiple sclerosis. tunities. The targets may be the same or AbbVie is somewhat of a newcomer “What you are really building on is they may be new, but “there is going to be to immuno-oncology and is just begin- years of knowledge – this coming revo- suspicion because biology is thrifty and ning to get assets into the clinic, Brun lution is the oldest new science around. tends to recycle the same mechanisms pointed out. But along with oncology, People have been tripping over it, now that work; we are going to probably see autoimmune/inflammatory disorders they are just better understanding it,” similar mechanisms in these different and neurodegenerative diseases are the Ciechanover declared. “We are going to contexts,” the exec said in a follow-up company’s key areas of focus, and there stop talking about IO – we are really go- interview after the meeting. is now an opportunity to collaborate on ing to focus on immunotherapy period, One example of how development in targets across these areas. across every disease. The revolution is oncology can inform other disease areas The company has been learning how already here.” is that the onset of type 1 diabetes has to think about conditional activation of The lessons are still emerging, but been reported in trials of cancer patients the immune system in the presence of a what is most striking is insight about getting checkpoint blockade treatment; tumor, and also the conditional suppres- what is visible or actionable from the the immune intervention may clear the sion of the immune system for a variety perspective of the immune system, com- tumor, but also tips the balance toward of autoimmune diseases. “In the past mented panelist Paul Robbins, PhD, autoimmune disease, Szidon explained. we would not see that kind of parallel senior director of translational oncology The same tools used to understand can- research and development activity,” at Pfizer Inc. The technology, effort and cer response may be used to understand Brun said. investment applied to examine what epi- autoimmune response. At Bristol, immunology and immuno- topes are recognized and what antigens “I see that as being a very rich area oncology are on a parallel track (see elicit strong responses “have grown very, for research,” he said. Szidon expects online video), and the agonist/antagonist very rapidly,” he said. autoimmune diseases will be the first approach is part of development, Salter- It appears that a relatively small number major beneficiary of lessons learned in Cid reports. of antigens are involved in mediating re- immuno-oncology. Compared with antagonists, agonists

Exhibit 1 IO Targets In Development For Cancer And Non-cancer Indications

TARGET/DESCRIPTION EXAMPLES OF CANDIDATES IN DEVELOPMENT

OX40: OX40, also known as CD134, is a member of the TNFR superfamily Glenmark’s GBR 830 (Phase II atopic dermatitis, of receptors that is not constitutively expressed on resting naïve T cells. Phase I celiac disease); Kyowa Hakko Kirin’s OX40 is a secondary co-stimulatory molecule, expressed 24 to 72 hours KHK4083 (Phase II ulcerative colitis, Phase I atopic after activation. Its ligand, OX40L, is also not expressed on resting dermatitis); Roche’s RG788 (Phase II bladder antigen presenting cells, but is following their activation. Expression of cancer); Bristol’s BMS986178 (Phase I/II solid OX40 is dependent on full activation of the T cell. tumors); GSK’s GSK3117498 (Phase I/II solid tumors)

Programmed death-1 receptor and ligand 1 (PD-1/L1): PD-1, a member of Bristol’s BMS936559 (Phase I/II sepsis and septic the CD28/CTLA-4/ICOS co-stimulatory receptor family, delivers negative shock); Celgene/Anaptys Bio’s CC-90006 (Phase I signals that have profound effects on T-cell and B-cell immunity. PD-L1 psoriasis); Ono – Opdivo (Phase I hepatitis C virus, and PD-L2 are the ligands for PD-1 receptor that are expressed by many sepsis/septic shock); Alnylam’s ALN-PDL (preclinical tumors to protect against T-cell-mediated immune responses. Class is liver failure, cirrhosis); Tasly/Genexine’s GXP2 approved for multiple cancer indications and current development is (preclinical psoriasis, inflammatory bowel disease); mostly focused in oncology. Fate’s ToleraCyte (preclinical type 1 diabetes)

Cluster of differentiation 40 (CD40): CD40 is a member of the TNF Apexigen/Boehringer Ingelheim’s APX005M receptor superfamily. This receptor has been found to be essential (Phase II esophageal cancer and Phase I/ in mediating a broad variety of immune and inflammatory responses II melanoma); Astellas’ ASKP1240 (Phase II including T-cell-dependent immunoglobulin class switching, memory transplant rejection); Abbvie/BI’s 655064 B-cell development and germinal center formation. The interaction (Phase II lupus); Novartis’ CFZ533 (Phase II of this receptor and its ligand (CD40L) is necessary for amyloid-beta- for Graves’ ophthalmopathy/orbitopathy, induced microglial activation, and thus is thought to be an early event myasthenia gravis, Sjogren’s syndrome); in Alzheimer’s disease pathogenesis. Development is ongoing in a mix J&J/Alligator’s ADC-1013 in solid tumors of autoimmune and oncology indications.

Cluster of Differentiation 28 (CD28)/ICOS and B7RP-1 Pathway: Atox Bio’s reltecimod (Phase III skin and skin The inducible co-stimulator (ICOS) is structurally and functionally structure infections); Bristol’s BMS931699 (Phase homologous to CD28. The B7-Related Protein-1 (B7RP-1) is structurally II Sjogren’s syndrome, lupus); AZ/Amgen’s and functionally homologous to B7.1 and B7.2 (B7.1/2), and is the MEDI5872 (Phase II Sjogren’s, Phase I lupus); ligand for ICOS. ICOS/B7RP-1 is emerging as a co-stimulatory pathway GSK’s GSK3359609 (Phase I/II solid tumors); for a variety of effector and memory T-cell responses. Manipulation of Jounce/Celgene’s JTX-2011 (Phase I/II solid the pathway results in alterations of immune responses that may be tumors); Jounce/OSE Immunotherapeutics’ FR104 applicable in therapeutic indications as diverse as cancer, infectious (Phase I autoimmune disorders); AZ’s MEDI0700 and autoimmune diseases, and transplantation. (Phase I lupus)

Interleukin-2 receptor (IL-2R): The IL-2 receptor is a heterotrimeric Avadel’s IL2-XL (Phase II renal cell carcinoma); protein expressed on the surface of certain immune cells, such as Nektar’s NKTR-214 (Phase I/II in range of cancers lymphocytes, that binds and responds to a cytokine called interleukin including bladder cancer and melanoma); Amgen’s 2. Three protein chains (alpha, beta and gamma) are non-covalently AMG592 (Phase I/II in inflammatory disorders); associated to form the IL-2R. IL-2R drugs are approved for cancer and Lilly/Nektar’s NKTR-358 (Phase I lupus); Roche’s transplant rejection, and development includes a mix of cancer and RG7461 (Phase I solid tumors); Celgene’s DEL-106 autoimmune indications. (preclinical in autoimmune disorders)

Macrophage colony-stimulating factor 1 (M-CSF1, CSF1R): Granulocyte/ Daiichi’s pexidartinib (Phase III for pigmented macrophage colony-stimulating factors are cytokines that act in villanodular synovitis (PVNS) and Phase II for solid hematopoiesis by controlling the production, differentiation and function tumors); Bristol/Five Prime’s cabiralizumab (Phase of two related white cell populations of the blood, the granulocytes and I or I/II in PVNS, solid tumors, rheumatoid arthritis); the monocytes/macrophages. CSF-1 induces cells of the monocyte/ Daiichi’s AC708 (preclinical for inflammatory macrophage lineage. It plays a role in immunological defenses, bone disorders and cancer) metabolism, lipoproteins clearance, fertility and pregnancy.

Stimulator of interferon genes (STING): The STING receptor is involved Aduro Biotech Inc.’s Adu-S100 (Phase I in cancer); in the induction of an innate immune response through multiple Nimbus/Celgene STING autoimmune program pathways, inducing the expression of a broad profile of cytokines, (preclinical autoimmune disorders and cancer) including interferons and chemokines.

SOURCES: Biomedtracker; Pharmaprojects | Pharma Intelligence, 2018

32 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com BIOPHARMA R&D ❚

are more complex. So if a company has With Bristol’s Opdivo” - Scrip, November an antagonist against a particular target, 14, 2017.) Novartis AG’s IL-2 receptor it may not be straightforward to develop antagonist Simulect (basiliximab) is ap- an agonist, even though a sponsor has an proved for preventing kidney transplant understanding of the pathway. The phar- rejection. Servier SA/ILTOO Pharma’s macology can be very different; it’s much ILT101, which stimulates regulatory T more complex than just being the opposite cells, is in Phase II for lupus and type 1 of the antagonist, she tells In Vivo. diabetes, and other drugs aimed at the No two agonists are the same; down- target are in preclinical development for stream signaling may be completely autoimmune diseases. different from one agonist to another, Salter-Cid explains. Also, it’s hard to T-Cell Therapy Branches Out extrapolate from preclinical to clinical Breakthroughs with personalized, au- development, she says. tologous T-cell therapies in cancer are Bristol understands the PD-1 pathway, encouraging for therapies that modify including T-cell exhaustion, very well immune cells for other disease areas. and is looking to directly or indirectly The first two autologous chimeric anti- leverage that understanding for new tar- gen receptor T-cell (CAR-T) therapies were gets in immunology and fibrosis, Salter- approved in the US in 2017: Kite Pharma Cid says. Currently, the only disclosed Inc.’s (now Gilead Sciences Inc.) Yescarta non-oncology indication for Opdivo is (axicabtagene ciloleucel) and Novartis’ sepsis (Phase I); some researchers are Kymriah (tisagenlecleucel). (Also see “CAR- clamoring for development in infectious T Commercialization Strategies: Views From diseases (see box). ❚ OTHER INDICATIONS Novartis And Kite” - In Vivo, October 2017.) In August, Bristol acquired IFM Thera- FOR OPDIVO? Atara’s lead candidate ATA129 targets peutics for $300 million up front and up patients with Epstein Barr virus and post- Aberrant immune checkpoint activ- to roughly $1 billion for each of two as- transplant lymphoproliferative disease ity signifies a poor prognosis in both sets in preclinical development against (EBV-PTLD), a hematologic malignancy. cancer and infectious diseases, two immune system targets: stimulator But the company also developed a dif- Martin Rao of the Karolinska In- of interferon genes (STING) and NLRP3. ferent autologous T-cell therapy called stitute in Sweden and colleagues (Also see “An Inflammatory Deal: Bristol ATA190 that educates T cells to recognize noted in a March 2017 review ar- Commits Up To $2.3bn To Buy IFM Thera- and destroy EBV in multiple sclerosis (MS) ticle published in the International peutics” - Scrip, August 4, 2017.) As part patients. MS patients typically have EBV Journal of Infectious Diseases. The of the deal, Bristol got rights to an NLRP3 and the hypothesis behind treatment with authors concluded: “Anti-PD-1/PD- agonist for IO indications. IFM is spin- ATA190 is that the virus cells in the central L1 therapy holds promise as adjunc- ning out an NLRP3 antagonist program nervous system cause an autoimmune tive therapy for chronic infectious aimed at inflammatory diseases but has response, and MS symptoms that could diseases such as tuberculosis and first right-of-refusal for autoimmune be prevented if these cells were destroyed. HIV, and must therefore be tested in disease assets. Atara presented updated results from randomized clinical trials.” Bristol is also partnered with Five a Phase I study of the candidate in pro- Prime Therapeutics Inc. on the devel- gressive MS at the joint meeting of the In a letter published in Annals of opment of drugs aimed at the colony- Americas Committee for Treatment and Oncology on December 1, 2017, Jean- stimulating factor 1 receptor (CSF1R) for Research of Multiple Sclerosis (ACRTIMS) Phillipe Spano, MD, PhD of the oncology and non-oncology indications. and the European Committee for Treat- Pitie-Salpetriere Hospital in Paris (Also see “Bristol Likes What It Sees In ment and Research in Multiple Sclerosis and colleagues reported a dramatic, Five Prime, Invests More In CSF1R Pro- (ECTRIMS)in October. persistent drop in HIV DNA in a gram” - Scrip, October 16, 2015.) In the study, six of 10 patients had patient being treated with Opdivo Salter-Cid also flags the interleukin-2 a clinical improvement in symptoms for lung cancer. The results suggest mechanism as a pathway that is impor- two to 14 weeks after infusion with the that “nivolumab in this patient had tant for immuno-oncology as well as au- autologous therapy. Three had an im- induced synergistic ‘shock and kill’ toimmune diseases. At the SITC meeting provement as measured by the Expanded mechanisms,” and “opens new in November, Bristol and Nektar Thera- Disability Status Scale (EDSS) score. therapeutic perspectives towards an peutics presented data showing that the Atara also reported that the therapy was HIV cure,” the letter stated. IL-2 targeted NKTR-214 in combination well-tolerated. with Opdivo has activity in lung and The company has developed an alloge- kidney cancer, and melanoma. (Also see neic (off-the-shelf) T-cell therapy called “Nektar’s IL-2 Impresses In Combination ATA188 that targets EBV antigens and in

2017 started a global Phase I study in 60 tics need to be developed early on. patients with progressing or relapsing- ImmusanT has developed a stand- remitting forms of MS. US sites will start alone diagnostic that is very selective and enrolling in 2018. specific, enabling the company to “shift Another example of the application the paradigm in celiac disease” with a of T-cell therapy outside oncology is Im- blood-based tool, Williams said. Safety musanT Inc.’s Nexvax2 intradermal vac- has to be number one when introducing cine, which is being developed for celiac an immunotherapy, albeit an epitope- disease patients who have the immune specific immunotherapy, in a disease like recognition gene HLA-DQ2.5 (most of the celiac, which is normally treated with patient population); a study is moving into dietary changes, she added. However, she Phase II. (Also see “First coeliac disease acknowledged that financing biomarker vaccine moves forward in expanded clinical development is a big challenge for a pri- programme” - Scrip, September 6, 2012.) vate company such as ImmusanT. According to the company, this candi- Panelists said there is a need for date is a therapeutic vaccine made up of greater data sharing about toxicities VIDEO ONLINE peptides that reprograms T cells to stop between sponsors of oncology drugs triggering a pro-inflammatory response to help minimize the risks. However, Explore Immune System to gluten antigens. “As a result, by pre- Atara’s Ciechanover noted that the US Interconnectivity venting T cells from continuing to cause FDA sees different datasets and is porting inflammation in the small intestine, the information about safety, manufacturing injured tissue heals and patients would and assay work from one company to At Bristol, immunology and be able to resume an unrestricted diet and another, across disease areas. The FDA immuno-oncology are on a enjoy improved health,” the company is a “true partner, trying to see the field parallel track, and the agonist/ explains on its website. move forward,” he stated. antagonist approach is part of “If you do any immunotherapy you development. Safety A High Priority have to believe in precision medicine ImmusanT CEO Leslie Williams and other and you can’t get to precision medicine panelists at the BIO Investor Forum session without diagnostics. That’s what it will View video at: stressed that biomarkers will be essential take,” Merck’s Szidon said. http://bit.ly/2n8qKjE for driving adoption of immunotherapy IV005251

outside oncology, where the risk/benefit Comments: case is harder to make, and that diagnos- Email the author: [email protected]

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Intelligence with a Global Perspective

The Premier Resource In The Life Sciences Industry Biomedtracker Pink Sheet Datamonitor Healthcare Pharmaprojects In Vivo RxScorecard Meddevicetracker Scrip Medtrack Sitetrove Medtech Insight Trialtrove

The health care industry has come a long way in the past 35 years, although in some areas very little has changed. Recently retired In Vivo editor Peter Charlish has seen most of the major developments, and in his final feature he looks back at some of the big stories in a reporting career that began in the early 1980s.

PETER CHARLISH, PhD

BY PETER CHARLISH

he health care industry has resistance to β-lactam antibiotics such amoxiclav. There are now many generic witnessed many changes in as amoxicillin is often caused by the versions available, although clavulanic the past 35 years or so since bacteria acquiring the ability to produce acid has never been combined with other I began reporting on it, yet in an enzyme, β-lactamase, that can break β-lactam antibiotics in a commercial some ways very little seems down the antibiotic and thus render it product for human use (it is also used Tto have changed. While there has been ineffective. By combining an inhibitor of in veterinary medicine), except for a enormous progress in the treatment of β-lactamase with the antibiotic in a single handful of cephalosporin/clavulanic acid many diseases, some of the challenges we product, this route to bacterial resistance combinations marketed exclusively on faced back in the early 1980s remain today. is blocked. The enzyme inhibitor in Aug- the Indian subcontinent. Perhaps it would be more accurate to mentin is clavulanic acid, a compound While the introduction of penicillin and say that problems previously thought that is based on the same β-lactam ring other antibiotics in the 1940s is generally to have been solved have come back to structure as amoxicillin and that inhibits regarded as marking the beginning of the haunt us. One of the first stories I covered a wide range of β-lactamases. antibiotic era, specific antimicrobial prod- as science editor of Scrip in 1981 was the Although Augmentin’s approved ucts first entered commerce much earlier launch of Augmentin (amoxicillin + cla- indications were initially somewhat in the 20th century. Hoechst (now part of vulanic acid), the antibacterial product restricted, they were soon broadened to Sanofi) launched Salvarsan (arsphena- developed by the UK company Beecham include a wide range of infections in all mine) for the treatment of syphilis in 1910, (now swallowed up into GlaxoSmith- age groups as the product’s safety and ef- for example. From the early days of antimi- Kline PLC), which was designed to over- ficacy were confirmed in clinical practice. crobial therapy, resistance was recognized come the problem of bacterial resistance. Indeed, the product was so successful as a problem, with sulfonamide resistance The rationale behind Augmentin that the combination was awarded its emerging in the 1930s, and resistance to was elegant in its simplicity. Bacterial own British Approved Name (BAN), co- penicillins was recorded relatively soon

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after that class of drug entered clinical Exhibit 1 practice. Interestingly, phylogenetic stud- Scale Of The Antibiotic Resistance Problem ies have shown that antibiotic-resistant genes have been present in bacteria since long before the antibiotic era – for many millions of years in some cases. By the 1980s, bacterial resistance had In the EUROPEAN UNION, emerged not only to the first generation antibiotic resistance of penicillins but also to semisynthetic causes 25,000 deaths per year penicillins and cephalosporins. More and 2.5m extra hospital days recently, resistance has been recorded to the newer carbapenems, which were developed specifically to be less susceptible to the development of resistance. When In INDIA, over 58,000 babies died Augmentin was introduced it raised the in one year as a result of infection hope that the spread of resistance could be overcome, but that unfortunately has with resistant bacteria usually not been the case. Resistance to antibi- passed on from their mothers otics now poses a major global threat, and we are at risk of entering a “post- antibiotic era.” According to the World Health Organization in 2014: • resistance to carbapenems, which had In THAILAND, antibiotic resistance become the treatment of last resort for causes 38,000+ deaths life-threatening infections caused by per year and 3.2m hospital days Klebsiella pneumoniae, had spread to all regions of the world; • resistance to fluoroquinolones, widely used to treat urinary tract infections caused by Escherichia coli, was also widespread; and In the UNITED STATES, • treatment failure with third-generation antibiotic resistance cephalosporins, the treatment of last causes 23,000+ deaths resort for antibiotic-resistant Neisseria gonorrhoeae, had been confirmed in Eu- per year and >2.0m illnesses rope, Australia, North America, Japan and South Africa. In general, the level of antibiotic-resis- SOURCE: Centers for Disease Control & Prevention tant infections in individual populations correlates with the level of antibiotic Clearly, industry needs to do more in this Success Against HIV/AIDS consumption (in other words, the more respect. In 2014, President Barack Obama It has not all been bad news in the antibiotics are used, the more common tried to kick-start research into new an- anti-infective field, however. Another is antibiotic resistance), which sug- tibiotics with an executive order that, big story in the 1980s was the emergence gests they are not being used correctly. among other things, led to the creation of AIDS, and the industry’s response to (See Exhibit 1.) One possible strategy of the Presidential Advisory Council on it. Although the first cases of human for limiting the spread of antibiotic re- Combating Antibiotic-Resistant Bacteria infection with what became known as sistance could be the more appropriate (PACCARB). In September 2017, PACCARB human immunodeficiency virus probably use of antibiotics. In the UK, at least, voted to adopt a draft report containing occurred in the 1920s, AIDS was only we are starting to see public awareness recommendations for incentivizing the de- recognized as a distinct clinical entity of this issue being raised, albeit via a velopment of therapeutics, diagnostics and in the early 1980s, when multiple cases rather excruciating publicity campaign. vaccines to combat antibiotic resistance. of a previously unrecognized syndrome (http://bit.ly/2reDcDv) Hopefully, these recommendations will be came to the attention of health officials. Other possible strategies to limit anti- accepted and will have the desired effect. The syndrome was characterized by the biotic resistance include the development Still, it is ironic that 35 years after the first presence of one or more otherwise rare of new antimicrobials directed at existing antimicrobial product designed to address opportunistic infections such as Pneu- molecular targets, and the identification the resistance problem was launched, the mocystis carinii pneumonia, and seemed of new targets for antimicrobial agents. problem is now more pressing than ever. to be confined, initially at least, to four

groups of individuals: heroin addicts, ho- Exhibit 2 nists. Research continues: only recently, mosexuals, hemophiliacs and Haitians. HIV/AIDS In Numbers it was reported that Opdivo (nivolumab), The unusual combination of features a human monoclonal antibody developed initially gave no clue to the origin of the by Ono Pharmaceutical Co. Ltd.and Me- syndrome, until it was realized that all darex Inc. (part of Bristol-Myers Squibb those affected shared one thing in com- 76.1 million Co.) as an anticancer, may be able to mon – a severely compromised immune number of people infected deplete dormant virus reservoirs in the system, which gave rise to the name with HIV since start of the tissues of patients with HIV, which up till Acquired Immune Deficiency Syndrome epidemic now has been an obstacle to eliminating (AIDS). In 1983, Luc Montagnier’s group the virus from the body. in Paris announced that they had isolated 35.0 million Just to underline the fact that the virus the virus responsible for AIDS, which number of people is not yet completely vanquished, some they named lymphadenopathy-associat- who have died from 36.7 million people worldwide are cur- ed virus (LAV), while shortly afterwards, AIDS-related illnesses rently living with HIV/AIDS, and last year Robert Gallo’s group in the US reported since the start of 1 million people died from AIDS-related that they had characterized the causative the epidemic illnesses, according to the Joint United agent as human T-lymphotropic virus Nations Programme on HIV and AIDS type 3 (HTLV-III). In 1984 it was agreed (UNAIDS). Nevertheless, the rapidity of that LAV and HTLV-III were one and the 36.7 million the original response to the AIDS crisis same virus, which was later renamed number of people demonstrates how effectively the indus- human immunodeficiency virus (HIV). worldwide currently try can respond in an emergency. This was the signal for both the diag- living with HIV/AIDS The past 35 years have also seen nostics industry and the pharmaceutical products successfully introduced for industry to set to work to develop diag- 20.9 million the treatment or prevention of other nostic tests and therapeutic agents for number of people living viral diseases, including hepatitis C HIV infection. In 1985, the FDA licensed with HIV accessing (which accounts for most cases of what two ELISA tests, from Abbott Labora- antiretroviral therapy was then known as non-A, non-B viral tories Inc.and Electro-Nucleonics (now in June 2017 hepatitis) and human papillomavirus Alfa Wassermann SPA), for screening (HPV, thought to be responsible for most blood donations for HTLV-III, while a cases of cervical cancer). In the case of similar test based on the LAV isolate 1.8 million hepatitis C, the emergence of safe and was developed by Genetic Systems. In number of new HIV effective treatments has brought a new 1987, the first diagnostic test became infections in 2016 problem, for payers at least: their cost. A available when the FDA approved the 12-week course of Gilead Sciences Inc.’s use of Western blot testing for detecting 1.0 million Harvoni (ledipasvir + sofosbuvir), for HIV antibodies in the blood of suspected number of people who example, can cost $94,500. Responses to AIDS patients, and the same year it also died from AIDS-related these high prices have included use of an approved the use of the reverse tran- illnesses in 2016 indication-specific budget, sliding price- scriptase inhibitor, zidovudine (azido- volume agreements with manufacturers, thymine, AZT), for the treatment of HIV 14 million an expenditure cap in combination with infection. The product, developed by SOURCE: UNAIDS a creative taxation scheme and mar- GlaxoWellcome (now GSK) and marketed number of HIV-infected ket access restrictions including strict as Retrovir, was the first to be approved individuals ignorant of patient-prioritization criteria. Although specifically for the treatment of HIV their HIV status such measures have tended to restrict infection, less than four years after the the availability of hepatitis C treatments virus was first identified, an outstanding in major markets, the product sector has achievement on the part not only of the shown meteoric growth since its incep- researchers who developed it but also the tion in 2011. At the same time, however, regulators who approved it in record time. the threat posed by other virulent viruses, Since then, of course, techniques such as Ebola or Marburg virus, remains. for diagnosing HIV infection have improved considerably, and the number of Metabolic Disease Treatments antiretroviral drugs available has also Turning aside from infectious diseases, mushroomed to include not only reverse major challenges remain in other areas. transcriptase inhibitors but also protease Diabetes is still a significant problem, inhibitors, integrase inhibitors, fusion in- especially in view of the prevalence of hibitors and chemokine receptor antago- SOURCE: UNAIDS obesity in many populations. The 1980s

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saw a substantial amount of research into type 1 diabetes. Alongside insulin-based Intelligence’s Pharmaprojects. Receptors new treatments for diabetes, although therapy, drugs with other mechanisms for glucagon and glucagon-like peptide-1 these efforts were not to bear fruit un- of action could be exploited to improve (GLP-1) seem to be popular targets for til 1990, when Bayer AG launched the glycemic control in these patients, as well potential anti-obesity products. However, β-glucosidase inhibitor, Glucobay (acar- as reduce insulin dosing and associated new product introductions over the past bose), the first new primary therapy for side-effects. The existence of this unmet few years have been relatively few, and diabetes since the introduction of the need is demonstrated by the fact that type several of those have been new combina- sulfonylureas and biguanides in the 1950s. 2 diabetes therapies are already used off- tions or formulations of older products. Inhibition of β-glucosidase reduces the label in type 1 diabetes patients. Just three anti-obesity products rate at which complex carbohydrates are launched in the past 30 years stand out digested, thus lowering blood sugar levels. Progress Toward An Artificial Pancreas for having a novel mode of action, but The emphasis changed in the 1990s, Of course, injecting insulin is inconve- none of them is ideal. The first, launched when new insulin analogs began to ap- nient and can only ever approximate in 1998, was Roche’s Xenical (orlistat), pear on the market. The first of these normal physiological conditions. A long- which acts by inhibiting pancreatic was Humalog (insulin lispro), Eli Lilly & term goal since even before the 1980s has lipase, thus inhibiting fat absorption. Co.’s fast-acting human insulin analog been to develop an artificial pancreas that The fact that Xenical does not act via an that was designed more closely to mimic can respond to minute-by-minute varia- effect on the central nervous system is a the body’s insulin output in response to tions in blood glucose and deliver the ap- potential advantage in both therapeutic eating. Manufactured via recombinant propriate amount of insulin with minimal and marketing terms, but it can have DNA technology, Humalog made its intervention by the patient. Such a device unpleasant gastro-intestinal side-effects debut in 1996. It was followed in 1999 would greatly simplify glycemic control which can lead to poor patient compli- by NovoLog (insulin aspart), a rapid- and, by leveling out peaks and troughs in ance. Orlistat is now available over-the- acting insulin analog developed by Novo blood glucose, would minimize the risk counter as Alli. Nordisk AS for the treatment of types 1 of diabetic complications. Nearly 15 years after the introduction of and 2 diabetes. Then in 2000, Aventis Although a truly autonomous im- Xenical, Novo Nordisk launched the GLP- (now Sanofi) launched Lantus (insulin plantable artificial pancreas has yet to 1 agonist Saxenda (liraglutide): it acts on glargine), a long-acting human insulin be produced, both insulin pump and the brain to simulate the effect of endog- analog manufactured using recombinant glucose sensor technology have steadily enous GLP-1 to depress appetite. Its major DNA techniques in bacteria via the pro- improved over the years. Medtronic drawback is that it must be administered insulin route. PLC’s MiniMed 670G system, for example, subcutaneously, which limits its useful- In the intervening years one interesting was approved by the FDA in September ness (it is also relatively expensive). More innovation in this area has been inhaled 2016 and is the world’s first hybrid closed- recently, Arena Pharmaceuticals Inc. insulin, which was initially promoted as a loop system that constantly self-adjusts introduced Belviq (lorcaserin hydrochlo- more patient-friendly alternative to insu- to automatically keep the patient’s sugar ride), a first-in-class 5-HT2C agonist as an lin injections. The first such product was levels in the correct range. It features adjunct to a reduced-calorie diet and Exubera, developed by Inhale Therapeu- SmartGuard technology, described by increased physical activity for chronic tic Systems and launched commercially Medtronic as “one step closer to The weight management in adult patients by Pfizer Inc. in 2006. But the market Artificial Pancreas,” which provides with at least one weight-related comor- did not appear to be ready for such an advanced protection from hypoglycemic bid condition. However, there have been innovation, and poor sales led to its being episodes. Nevertheless, for many type 1 reports that the effectiveness of Belviq is withdrawn in 2008. Inhale changed its diabetics, insulin injections look likely to lower than that of some other treatments. name to Nektar Therapeutics and turned be around for some time yet. One of the earliest drugs used to its attention to other applications for its produce weight loss was amphetamine, polymer conjugate technology platform. Few Novel Drugs For Obesity which has anorectic properties, and older More recently, in 2015, MannKind Corp. There remains no known cure for either anti-obesity products tended to act via launched Afrezza, a dry powder pulmo- type 1 or type 2 diabetes. The latter is as- a similar central stimulant effect. Such nary formulation of synthetic human sociated with obesity, whose prevalence products had obvious abuse potential insulin for the treatment of type 1 and is steadily increasing in developed coun- but, despite the introduction of some type 2 diabetes. That said, Lantus and tries and for which there also seems to be innovative new anti-obesity products Humalog continue to dominate the insu- no cure on the horizon. The WHO calcu- over the past couple of decades, the ideal lin market, although their position over lates that worldwide obesity has nearly therapeutic agent has yet to be found. A the next few years could be threatened by tripled since 1975 and that, in 2016, more handful of potential anti-obesity agents the introduction of biosimilar versions. than 1.9 billion adults were overweight, of are currently in advanced clinical testing, According to Treatment: Diabetes Type whom more than 650 million were obese. including: an orally active dopamine, 1, an April 2017 Datamonitor Healthcare There are currently nearly 40 com- noradrenaline and 5-HT re-uptake inhibi- report, there is currently a significant pounds in clinical trials for the treatment tor, under development by Saniona AB; unmet need for non-insulin therapies in of obesity, according to Informa Pharma an oral angiogenesis and matrix metal-

loproteinase inhibitor targeting adipose of atherosclerotic cardiovascular disease tissue, under development by AngioLab; events (they may also be able to reduce and a chewable plant-derived, carbohy- mortality from certain types of cancer), drate hydrolyzing inhibitor, under de- and thus have become, and seem likely to velopment by Boston Therapeutics Inc. remain, the standard first-line treatment While an effective pharmacological While an effective for hypercholesterolemia. treatment for obesity remains elusive, The first statin to be marketed was there has recently been significant prog- pharmacological Merck & Co. Inc.’s Mevacor (lovastatin) ress in the medtech area, particularly in in 1987, but it was Lipitor (atorvastatin), the area of minimally invasive bariatric treatment for obesity launched by Parke-Davis (then part of devices, a market that is growing by more Warner Lambert but now a part of Pfizer) than 15% a year, according to Minimally remains elusive, exactly 20 years ago, in 1997, that really Invasive Weight Loss Devices Market, a set this market alight. Thanks to clever July 2017 report from Informa’s Medde- there has recently marketing, Lipitor rapidly outsold every vicetracker. For many years, this sector other pharmaceutical product on the was dominated by laparoscopic adjust- been significant market, and even now is still the world’s able gastric banding devices, but these biggest selling prescription drug of all are now being overtaken by intragastric progress in the time, when lifetime sales of $148,744 balloons, sales of which are expected to million are considered. grow by over 30% a year between now medtech area, The statin class is now widely generi- and 2021. Intragastric balloons, which cized, which has depressed prices: even were first approved in the EU in 1997 particularly in the so, the global market for these products and by the US FDA as recently as 2015, is currently worth somewhere in the re- are particularly suited for patients with area of minimally gion of $12 billion annually – not bad for moderately increased BMI (basal meta- a market that didn’t exist 30 years ago. bolic index, a measure of overweight) for invasive bariatric whom more invasive procedures such as Advances In Oncology sleeve gastrectomy are not appropriate. devices, a market that No review of this nature would be com- (Also see “Bariatric Devices: Intragastric plete without a mention of the tremendous Balloons To Eclipse Gastric Banding” - In is growing by more progress there has been in the treatment Vivo, October 2017.) of cancer. Many types of cancer are now Market leader in this sector is Apollo than 15% a year. considered, like HIV infection, to be Endosurgery Inc.’s Orbera system: other chronic but manageable conditions rather players include ReShape Medical Inc. than incurable and often fatal. At the (formerly known as EnteroMedics) and beginning of the 1980s, cancer therapy Obalon Therapeutics Inc. Intragastric depended largely on surgery and the use balloons are only a short-term solution to of cytotoxic agents – antimetabolites, appetite control (they are removed after alkylating agents, plant-derived agents six to 12 months) but are generally well such as the vinca alkaloids, antitumor tolerated, although there have been some antibiotics and so on. While these types concerns about the risk of over-inflation. of drug still have a role to play, cancer treatment is now much more focused on Lowering Lipids the cytogenetic mechanisms underlying To return to the subject of lipid me- the cellular changes in the disease. tabolism for a moment, one class of drug Between 1980 and 1990, only a handful of whose use is widespread now but that new anticancer agents reached the market, was virtually unknown 30 years ago is although the trend toward more specific the statins. I even take one myself, as types of therapy was already apparent, with does President Trump, apparently, so I drugs targeting interferon or interleukin am in good company. Statins lower LDL receptors being introduced, for example. cholesterol levels significantly and cause Contrast that with the period 2007–17, when a moderate reduction in HDL-cholesterol over 150 new anticancer products appeared as well as having other beneficial effects on the market, many with new immunologi- in dyslipidemias such as reducing inflam- cal targets. (See Exhibit 3.) mation, C-reactive protein levels, plaque At the same time, the diagnosis of size and clot formation. They have repeat- cancer has progressed considerably. In edly been shown to lower the occurrence the early 1980s, a new imaging tech-

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Exhibit 3 smoking, etc). Treatment today usually Biological Targets Of Selected New Anticancer drugs, 2007–17 consists of a PPI to lower acid secretion together with an appropriate antibiotic to target the H. pylori infection. TARGET NUMBER OF PRODUCTS The move away from H2 antagonists for erb-b2 receptor tyrosine kinase 2 11 treating peptic ulcer was not the end of the story for that class of medicine. In the Pinase insert domain receptor 8 mid-1990s, Tagamet was one of several Membrane-spanning 4-domains, subfamily A, products that were part of a new wave 8 member 1 of Rx-to-OTC switching, driven by the Epidermal growth factor receptor 7 need to extend the product’s life cycle in the face of changing prescribing habits v-kit Hardy Zuckerman 4 feline sarcoma viral 6 and by the push by health systems to oncogene homolog shift the cost of treating minor ailments fms-related tyrosine kinase 1 5 onto the patient (OTC cimetidine is used to prevent and treat the symptoms of Platelet-derived growth factor receptor, alpha 5 heartburn associated with acid indiges- polypeptide tion). Patent protection of cimetidine has ret-proto-oncogene 5 since expired, and GSK has disposed of its Tagamet (and Zantac) assets. SOURCE: Pharmaprojects | Pharma Intelligence, 2018 Pharma’s Reputation One theme that has recurred over the past nique called nuclear magnetic resonance That all changed with the introduction 35 years (and probably longer) is that of imaging (NMRI) was introduced that of Tagamet, which proved to be a much the public perception of the industry. revolutionized the diagnosis of cancer more effective way of inhibiting gastric Many pharmaceutical companies were and many other conditions. Although the acid secretion and which by the 1980s founded with altruistic aims and a com- technique was based on the principle of had become the world’s first “blockbust- mitment always to act in the interest nuclear magnetic resonance, the word er” drug with annual sales of more than of patients. However, as many of these “nuclear” was later dropped for fear it $1 billion. Tagamet blocks acid secretion companies have grown to become major would frighten patients, leaving just the in the stomach by antagonizing H2 recep- multinational corporations, they have “MRI” acronym we know today. One of tors, and was developed by a team led by become increasingly susceptible to the the pioneers of magnetic resonance im- Nobel Prize winner James Black, later Sir expectations and demands of the finan- aging, Peter Mansfield, PhD, who died in James Black, who used rational drug de- cial markets and are now often perceived 2017, once commented that when the first sign to create a molecule that specifically to act in the interests of shareholders in human NMRI experiments were carried blocked these receptors, an approach preference to those of patients. out, he was concerned that the magnetic he had previously used successfully in This problem was epitomized by the field would completely erase the subject’s the development of the first β-blocker, outcry that arose when the first antiret- memory, rather like a tape recording can propranolol (ICI’s Inderal). roviral drugs were marketed. Manufactur- be erased with a magnet. Fortunately, Within a few years, Tagamet sales were ers kept prices high, even in developing that did not happen. eclipsed by those of Glaxo’s rival product, countries where ironically most HIV in-

Zantac (ranitidine). Other H2 antagonists fections occurred, and resisted attempts Science Still Matters from other manufacturers followed, to permit the use of generic versions from Over the years, growth in some product but their success was cut short by the low-cost countries such as India. Such sectors has followed a ballistic trajec- arrival of a new class of acid-inhibiting behavior attracted much criticism, and tory, only to decline as medical practice compounds, the proton pump inhibitors the companies eventually capitulated evolves. In 1976, Smith Kline & French (PPIs), of which the first wasAstraZeneca and lowered their prices, while President in the UK launched a new treatment for PLC’s Losec (omeprazole). Bill Clinton issued an executive order to peptic ulcer, the H2 antagonist Tagamet All the while these new treatments for prevent the Office of the US Trade Repre- (cimetidine). At that time, a peptic ulcer peptic ulcer were being introduced, evi- sentative from seeking trade sanctions was a painful, debilitating, even life- dence was mounting that many cases of against poor countries that tried to gain threatening condition for which the only peptic ulcer were in fact caused by Helico- access to generic versions of anti-HIV drug treatment, antacids, provided at bacter pylori, a Gram-negative bacterium drugs (as they were permitted to do under best limited relief. Other treatments used that is typically found in the upper gas- World Trade Organization rules). ranged from adoption of a bland diet to trointestinal tract (some cases, though, The industry eventually recovered from truncal vagotomy to restrict acid secre- do have other causes such as frequent the damage done to its reputation by the tion in the stomach. use of NSAIDs, alcohol consumption, debacle, but since then it seems, whether

through arrogance or naivety, to have HIV is a good example: once the virus blundered into several other crises in had been identified the way was open public confidence. Among the practices to develop antiviral agents with which that have attracted public condemnation to treat infected individuals, but these of the industry are making its products would have had limited use without the unaffordable to many patients, even in One of the pioneers of availability of diagnostic tests to identify wealthy countries like the US; indulging those patients. More recently, compan- in mega-mergers that, while they may magnetic resonance ion diagnostics have emerged as a vital lead to a lower tax burden, an improved component of many new, high-tech phar- bottom line and amplified executive pay, imaging, Peter maceutical product offerings. Perhaps do little for patients or indeed their own such convergence will turn out to be the workforce; and indulging in behavior Mansfield, PhD, who catalyst for successfully addressing some that has attracted financial sanctions, of the outstanding challenges facing the such as inappropriate marketing, pro- died in 2017, once health care sector. motion of off-label indications and It is sometimes said that the pharma- misleading direct-to-consumer advertis- commented that ceutical industry has taken all the low- ing. The failure to tackle the problem of hanging fruit in terms of treating disease, antibiotic resistance is another oft heard when the first human and that it will be increasingly difficult criticism. The actions of companies like to address those diseases that remain to Turing Pharmaceuticals AG and its then NMRI experiments be conquered. It therefore seems likely CEO Martin Shkreli, which acquired the that there will be greater emphasis on toxoplasmosis drug Daraprim (pyrimeth- were carried out, he the prevention of disease, rather than its amine) and then hiked the price by over treatment. Indeed, this trend is already 5,000%, did not help. was concerned that apparent in the development of HPV vaccines to prevent cervical cancer, and Lessons Learned the magnetic field greater emphasis on prevention may There are a couple of important lessons to well turn out to be a partial answer, at be learned from all of this. First, although would completely least, to the management of infectious much changes with the passage of time, diseases caused by antibiotic-resistant much also remains the same. Some of the erase the subject’s bacteria. Alzheimer’s disease, which we challenges currently facing the health have not mentioned previously but for care industry are the same ones that were memory, rather like a which there are no quick fixes, may also faced decades ago – only the means used ultimately be beaten by the adoption of to tackle them has changed. Second, the tape recording can be appropriate preventive measures (which future is exceedingly difficult to predict of course also remain to be discovered). with any accuracy, and even the past erased with a New and emerging technologies like is no guide to the future. Markets can artificial intelligence, machine learn- appear from nowhere almost overnight: magnet. Fortunately, ing and data mining will also have an the statins have already been mentioned important role to play in the continuing – phosphodiesterase type 5 inhibitors, that did not happen. fight against human disease. The next 35 used in the management of erectile dys- years should be even more exciting than function and shortly to become available the last. OTC we are told, is another. IV005250 Also apparent is the growing conver-

gence between the pharma and medtech Comments: sectors. The story of the discovery of Email the editor: Nancy [email protected]

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BAIN, Gretchen, PhD COX, Russell J. To: Jecure Therapeutics, To: Vital Therapies Inc., CEO (Dec) VP, Biology (Dec) From: Jazz Pharmaceuticals PLC, From: PharmAkea Therapeutics Inc., EVP & COO Exec. Dir., Biology Phone: 858-673-6840 Phone: 619-541-8699

DEPIL, Stephane, MD, PhD BALAGOT, Joe E. To: Cellectis SA, To: Cesca Therapeutics Inc., SVP, R&D & CMO (Dec) ❚ JENNIFER COOK SVP, Corp. Dev. (Nov) From: Leon Berard Cancer Center, CEO, Grail From: Dawson James Securities, Adjunct Professor Managing Dir./Partner, Phone: +33-81-69-16-00 Investment Banking Phone: 916-858-5100 GARDINER, Sandra A. To: Cutera Inc., EVP, CFO (Dec) BECKER, Marc From: Consultant To: Concert Pharmaceuticals Inc., Phone: 415-657-5500 CFO (Jan) From: CRISPR Therapeutics AG, SVP, CFO GOLDMAN, Neil A. ❚ DEREK HEI Phone: 781-860-0045 To: Chembio Diagnostics Inc., SVP, Mfg., Quality & Regulatory EVP, CFO (Dec) BlueRock Therapeutics From: J.S. Held LLC, BOGLIOLI, Elsy EVP, Corp. Dev. & CFO To: Cellectis SA, Phone: 631-924-1135 EVP, Strategy & Corp. Dev. (Dec) From: Boston Consulting Group, Partner & Managing Dir. GOODWIN, Charles D. Phone: +33-81-69-16-00 To: Bovie Medical Corp., CEO (Dec) From: American Optics, Chief Commercial Officer BOOKER, Harriet Phone: 800-537-2790 To: BioScrip Inc., SVP, COO (Nov) ❚ SCOTT HERSKOVITZ From: Option Care, President & CEO, Qosina Interim SVP, HAIR, Mark L. Revenue Cycle Mgmt. To: Restoration Robotics Inc., Phone: 914-460-1600 CFO (Jan) From: Zeltiq Aesthetics Inc., VP, Chief Accounting Officer COOK, Jennifer Phone: 408-883-6888 To: Grail Inc., CEO (Jan) From: Roche Pharmaceuticals, Head, Clinical Ops., HANSON, Bryan C. Product Dev. To: Zimmer Biomet Holdings Inc., Phone: 650-454-6995 Pres. & CEO (Dec) ❚ ANDREW KIDD From: Medtronic PLC, EVP & Pres., Chief Commercial Officer Minimally Invasive Therapies Group Phone: 800-613-6131 Aptinyx

44 | In Vivo | January 2018 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

HEI, Derek, PhD PRICE, Michael To: BlueRock Therapeutics, To: Novelion Therapeutics Inc., SVP, Mfg., SVP, CFO (Dec) Quality & Regulatory (Dec) From: Noven Pharmaceuticals Inc., From: Cellular Dynamics International Inc., VP, CFO VP, Clinical Mfg., Phone: 877-764-3131 Quality & Regulatory ❚ DAVID MICHELSON Phone: 608-310-5100 CMO, Proclara Biosciences RICH, Cadmus, MD To: Aura Biosciences Inc., CMO (Dec) KIDD, Andrew From: Inotek Pharmaceuticals Corp., To: Aptinyx Inc., VP, Medical Affairs & Clinical Dev. Chief Commercial Officer (Dec) Phone: 617-401-3360 From: Baxter International Inc., SVP, Strategy & Bus. Dev. Phone: 847-871-0377 SPELLMEYER, David, PhD To: Circle Pharma Inc., CSO (Nov) From: ShangPharma Innovation, LIESENFELD, Oliver, MD Executive-in-Residence To: Inflammatix Inc., CMO (Dec) Phone: 650-392-0363 ❚ ANDREW OH From: Roche Molecular Diagnostics, CMO CFO, Rubius Therapeutics Phone: 650-797-1647 ST. BERNARD, Carl J. To: Tryton Medical Inc., MERNON, Mark Pres. & CEO (Jan) To: Biogen Inc., From: Johnson & Johnson Vision, SVP, Chief Information Officer (Dec) VP, Americas Surgery From: Takeda Pharmaceutical Co. Ltd., Phone: 919-226-1490 Global Head, R&D Site Strategy & Ops. Phone: 617-679-2000 STOKES, Frank To: Castle Biosciences Inc., ❚ CADMUS RICH CFO (Dec) CMO, Aura Biosciences MICHELSON, David, MD From: Hammock Pharmaceuticals, CFO To: Proclara Biosciences, CMO (Jan) Phone: 281-796-9032 From: Merck Research Laboratories, VP, Neuroscience, Pain, Ophthalmology & Anesthesiology STUART, Lewis J. Phone: 617-714-5468 To: NovaBay Pharmaceuticals Inc., Chief Commercial Officer (Dec) From: Genomic Health, NARAYAN, Shakti, PhD VP, US Oncology To: Tango Therapeutics, CBO (Dec) Phone: 510-899-8800 From: Johnson & Johnson Innovation, VP, Head, Transactions Phone: 857-320-4900 ❚ CARL ST. BERNARD SULLIVAN, Timothy President & CEO, Tryton Medical To: Apellis Pharmaceuticals Inc., CFO (Dec) OH, Andrew From: AJU IB Investment, Partner To: Rubius Therapeutics Inc., Phone: 502-241-4114 CFO (Dec) From: Leerink Pharmaceutical Investments, Chief Investment Officer & COO SUREK, Jim Phone: 617-679-9600 To: Stimwave Technologies Inc., Chief Commercialization Officer (Dec) PLETAN, Yannick From: Entellus Medical Inc., ❚ To: Acticor Biotech, CMO (Dec) VP, Sales STUART WOOD From: Roche France, Phone: 480-371-7991 Operations Director Head, Medical Division Applied Photophysics Phone: +33-970-468-640

January 2018 | In Vivo | 45 ❚ ON THE MOVE

WALSH, John, MD DOYLE, William F. WATSON, Robert To: EMD Serono Inc., To: Minerva Neurosciences Inc., To: CEL-SCI Corp., Director (Dec) VP, Neurology & Immunology, Director (Dec) Phone: 703-506-9460 US Medical Affairs (Dec) Phone: 617-600-7373 From: Biogen Inc., Senior Dir., US Medical, ADVISORS Neurology Medical Dir. Lead FLORA, Scott Phone: 800-283-8088 To: Invuity Inc., Director (Nov) Phone: 415-655-2100 BIER, Frank F. WEXNER, Steven D. To: BioGenes GMBH, Scientific Advisor (Dec) To: Regentys, CMO (Dec) FONTEYNE, Paul Phone: +49-30-65762396 From: Cleveland Clinic Florida, To: resTORbio Inc., Director (Dec) Dir., Digestive Disease Center Phone: 617-482-2333 Phone: 844-432-7262 COMBES, Alain, MD, PhD To: Hemovent GMBH, FRIEDMAN, Catherine WOOD, Stuart Scientific Advisor (Dec) To: Grail Inc., Director (Jan) Phone: +49-241-990-133-0 To: Applied Photophysics, Phone: 650-454-6995 Ops. Director (Nov) From: Oxford Instruments, Head, Bus. Excellence ELOIT, Marc, DMV, PhD GUJRATHI, Sheila K., MD Phone: +44-1372-386-537 To: PathoQuest SAS, To: TP Therapeutics Inc., Director (Dec) Scientific Advisor (Nov) Phone: 858-926-5254 Phone: +33-1-70-82-17-90 WORSLEY, Stephen To: Indi Molecular Inc., HASLER, Hans Peter SVP, Bus. Dev. (Dec) HANAUER, Stephen, MD From: Peregrine Pharmaceuticals Inc., To: Minerva Neurosciences Inc., To: Thetis Pharmaceuticals LLC, VP, Bus. Dev. Director (Dec) Scientific Advisor (Dec) Phone: 206-576-6340 Phone: 617-600-7373 Phone: 203-254-3333

KRASSNER, Stuart M., ScD, PsyD KNAUER, Jens DIRECTORS To: Spectrum Pharmaceuticals Inc., To: BioGenes GMBH, Chairman (Dec) Scientific Advisor (Dec) BARRETT, Gregory Phone: 702-835-6300 Phone: +49-30-65762396 To: BTG PLC, Director (Nov) Phone: +44-20-7575-0000 KUCHEMAN, William H. KORZENIK, Josh, MD To: Cibiem Inc., Director (Dec) To: Thetis Pharmaceuticals LLC, BAUM, William Phone: 212-929-6600 Scientific Advisor (Dec) Phone: 203-254-3333 To: Arzeda, Director (Dec) Phone: 206-402-6506 PEDDER, Simon, PhD To: Delcath Systems Inc., LAURENT, Frederic, PharmD, PhD Director (Nov) BEIER, David To: PathoQuest SAS, Phone: 212-489-2100 Scientific Advisor (Nov) To: Arcus Biosciences Inc., Phone: +33-1-70-82-17-90 Director (Dec) Phone: 510-694-6200 SNOW, Alex To: Exscientia Ltd., LORTHOLARY, Olivier, MD, PhD Deputy Chairman (Dec) BLECH, Isaac To: PathoQuest SAS, Phone: +44-1382-202136 Scientific Advisor (Nov) To: Marina Biotech Inc., Phone: +33-1-70-82-17-90 Director (Nov) Phone: 425-908-3600 WANG, Ted, PhD To: Bellerophon Therapeutics Inc., NOVINA, Carl, MD, PhD Director (Nov) CUI, Min To: Atossa Genetics Inc., Phone: 908-574-4770 Scientific Advisor (Dec) To: Grail Inc., Director (Jan) Phone: 206-588-0256 Phone: 650-454-6995

46 | In Vivo | January 2018 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

PATEL, Robin, MD HUMEAU, Laurent, PhD ZILLIOX, Patricia To: PathoQuest SAS, To: Inovio Pharmaceuticals Inc., To: Eyevensys SA, CEO (Dec) Scientific Advisor (Nov) SVP, R&D (Dec) From: Director Phone: +33-1-70-82-17-90 From: VP, R&D Phone: +33-1-84-79-10-60 Phone: 267-440-4200

RIEDER, Florian, MD RESIGNATIONS To: Thetis Pharmaceuticals LLC, LEONARD, John, MD Scientific Advisor (Dec) To: Intellia Therapeutics Inc., Phone: 203-254-3333 Pres. & CEO (Dec) DEMAS, Steve From: EVP, R&D From: Helix BioPharma Corp., COO (Dec) Phone: 857-285-6200 Phone: 905-841-2300 RUPPE, Etienne, PharmD, PhD To: PathoQuest SAS, Scientific Advisor (Nov) MACKENZIE, Lloyd MAYNARD, Ryan Phone: +33-1-70-82-17-90 To: Aquinox Pharmaceuticals Inc., From: Rigel Pharmaceuticals Inc., COO & VP, R&D Ops. (Dec) EVP, CFO (Dec) From: VP Phone: 650-624-1100 SLAVIN, Konstantin, MD Phone: 604-629-9223 To: Stimwave Technologies Inc., Medical Advisor (Dec) SWISHER, Daniel Phone: 480-371-7991 PLESHA, Scott From: Sunesis Pharmaceuticals Inc., To: BioDelivery Sciences International Pres. & CEO (Dec) Inc., Pres. (Jan) Phone: 650-266-3500 VON HORSTEN, Hans Henning From: SVP, Sales & Mktg. To: BioGenes GMBH, Phone: 919-582-9050 Scientific Advisor (Dec) Phone: +49-30-65762396 RETIREMENTS RIGA, Thomas J. To: Spectrum Pharmaceuticals Inc., BUSINSKAS, Tony WOLF, Wieland COO (Dec) From: Spectral Medical Inc., To: BioGenes GMBH, From: EVP, Chief Commercial Officer & EVP, CFO (Jan) Scientific Advisor (Dec) Head, Bus. Dev. Phone: 416-626-3233 Phone: +49-30-65762396 Phone: 702-835-6300

TURGEON, Joseph W. STRIGINI, Bruno PROMOTIONS To: Spectrum Pharmaceuticals Inc., From: Norvartis AG, Pres. & CEO (Dec) CEO, Novartis Oncology (Dec) From: Pres. & COO Phone: +41-61-324-11-11 HERSKOVITZ, Scott Phone: 702-835-6300 To: Qosina Corp., Pres. & CEO (Jan) From: VP, Sales & Mktg. Phone: 631-242-3000

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January 2018 | In Vivo | 47 ❚ DEAL-MAKING

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Deal-Making column is a ❚ Deal-Making survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, Pharmaceuticals, and Research, Analytical Equipment and Supplies – and then Covering deals made December 2017 categorized by type – Acquisition, Alliance, or Financing. Strategic Transactions is updated daily with in-depth deal analysis, structural and financial terms, and links to SEC-filed contracts. For information about access please contact Customer Care at 800-332-2181 or [email protected]

❚ IN VITRO DIAGNOSTICS Alliances Mundipharma gets rights to sell NTC’s Alexion is Halozyme’s latest Enhanze ophthalmic products in MENA region Alliances partner in potential $680mm deal Rockwell licenses Triferic to Quimica Oxford Immunotec, Qiagen settle Almirall licenses US, European rights patent litigation Europea for Peru to Athenex’s KX2391 for AK Rezolute gets global rights to Xoma’s Financings Ambrx gets Chinese rights to Tracon’s XOMA358 in potential $240mm deal Diagnostics company Akers endoglin antibody TRC105 Biosciences nets $6.4mm in FOPO Amgen, Carmot ally in Financings Cancer Genetics nets $6.5mm through neurodegenerative deal Rare disease focused Acer nets $10.4mm in FOPO registered direct offering BI enters into CNS platform/drug Therapeutics Quanterix nets $68.6mm via IPO collaboration with GSK spin-out Autifony Public ADS offering nets $249.6mm for argenx Public offering nets $24.6mm for BMS licenses gamma secretase inhibitors to start-up Verastem Ayala Public offering nets $570mm for Flexion gets preclinical OA gene bluebird bio ❚ MEDICAL DEVICES therapy from GeneQuine Catalyst Biosciences nets $9.8mm TC BioPharm and bluebird bio team up through public offering Mergers & Acquisitions for gamma delta CART therapies CooperVision pays $80mm for Paragon Neurodegenerative start-up Denali Vision Collegium licenses US rights to Therapeutics nets $267.4mm in IPO Depomed’s Nucynta Edwards shells out $100mm up front Dicerna nets $37.6mm via FOPO for Harpoon Medical BioRenal to sell Rockwell’s Triferic in Chile Editas nets $50mm in FOPO LivaNova to pay up to $225mm for Eyenovia seeks to go public ImThera Roche signs GPCR discovery deal with Confo Therapeutics Fennec Pharmaceuticals closes to acquire for Stryker Entellus Medical $20mm public offering $24 per share Roivant gets rights to HanAll’s autoimmune disease candidate Fibrocell brings in $9.9mm through FOPO Alliances Puma and Daiichi Sankyo enter trial Global Blood nets $96.3mm through ITEM Medical gains Turkish rights to collaboration follow-on offering GTI’s LuViva cervical scan, related Genentech signs small-molecule disposables GW Pharmaceuticals nets $299.1mm in discovery agreement with DiCE FOPO TransEnterix licenses SurgiBot to Eurofarma gets commercial rights to Great Belief International Summit’s ridinilazole Public offering nets $142.5mm forHeron Financings Zai Lab gets exclusive immunotherapy Lexicon enters $200mm loan agreement; draws down $150mm right Brainsway closes $8.5mm PIPE rights from Five Prime away Genexine grants HyLeukin license to ❚ PHARMACEUTICALS I-MAB Public offering nets $117.5mm for HanX gets Chinese rights to Madrigal Pharmaceuticals Mergers & Acquisitions Onconova’s ON123300 Northwest Bio sells $12mm of its Allergan acquires Repros for $26.5mm Xynomic, Janssen team up in trial convertible preferred shares CVS aims to change health care delivery collaboration in $77bn acquisition of Aetna Ultragenyx sells Mepsevii PRV to Juno licenses gamma-secretase Novartis for $130mm Gilead, Kite buy Cell Design Labs inhibitor from Lilly Odonate nets $139.5mm through initial Mallinckrodt buys Sucampo Neon and Merck study neoantigen public offering Alize, Millendo merge to create leading immunotherapy combo Proteostasis nets $43.2mm via FOPO endocrine disease-focused firm TiGenix gets exclusive rights to Revance nets $157mm in FOPO Nestle pays $2.3bn for Atrium mesenchymal stem cell IP from Innovations Mesoblast VistaGen nets $13.95mm through FOPO

48 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - ❚

| 49 DEAL-MAKING Inc. Medical Harpoon In Vivo January 2018 | In Vivo LIVANOVA PLC LIVANOVA INC. MEDICAL IMTHERA - cardiovascu private for in cash front up maker device lar $150mm to up out shell could Edwards over milestones in pre-specified million (Dec.) years. ten the next rights exclusive In 2014 Harpoon licensed repair valve cardiac for technologies to of Maryland (UMD), the University from that Later off. spun the firm which from Series $3.3mm in Harpoon received year Epidarex backer lead from A funding - inves other and UMD as well as Capital a announced 2015 Edwards In late tors. in amount an undisclosed invest to deal and B round) Series its of part Harpoon (as the acquire option to the exclusive gained the incorporated Harpoon has company. for device an image-guided IP into UMD’s function valve mitral repairing surgically a during regurgitation eliminating and is The product procedure. beating-heart mitral prolapsed the stabilize to designed coaptation proper restore to leaflet valve - com yet Though not function. valve and expected is device Harpoon’s mercialized, - Com future. near the in Mark CE receive to the Harpoon procedures, current to pared one hour in just be performed can method in results and hours six to three of instead morbidity. less and recovery patient faster - comple the acquisition says Edwards for treatments portfolio own of its ments demonstrates and disease heart structural space. the cardiology to commitment its sleep held closely buying is PLC LivaNova Inc. Medical ImThera maker device apnea $147mm to up and front up $78mm for - mile sales and regulatory in potential (Dec.) stones. Cyberonics) as (then known LivaNova 2011 Series $4mm in ImThera’s invested has ImThera Thirteen-year-old round. C THN (targeted aura6000 the developed therapy, neurostimulation) hypoglossal implanted surgically invasive a minimally a pulse and an electrode uses that device tongue certain stimulate to generator in patients open the airway and muscles ob severe to moderate from suffering since marked CE apnea. sleep structive OSA for designed was 2012, the product to or unwilling unable who were patients pressure airway positive continuous use - - - MEDICAL DEVICES MEDICAL EDWARDS LIFESCIENCES CORP. LIFESCIENCES EDWARDS INC. MEDICAL HARPOON PARAGON VISION SCIENCES VISION PARAGON COOPER COS. INC. COS. COOPER VERASTEM INC. VERASTEM QUANTERIX CORP. QUANTERIX ❚ & Acquisitions Mergers paid $100mm paid Corp. Lifesciences Edwards Cooper Cos. Inc.’s CooperVision Inc. is is Inc. CooperVision Inc.’s Cos. Cooper held closely acquire $80mm to paying (Dec.) Sciences. Vision Paragon in orthokeratology, specializes Paragon per gas of the creation involves which temporarily that lenses contact meable refractive reduce to the cornea reshape and hyperopia, myopia, as such errors developed has The company astigmatism. a non- (CRT), therapy refractive a corneal by vision improves that option surgical a patient while the eye reshaping gently - therapeu designed specially using sleeps in at put are lenses The lenses. contact tic will vision the waking upon bedtime and twelve the previous For sharp. and be clear $15mm in rev about had Paragon months to expected are numbers those and enues in the next low-double-digits by increase years. few CooperVision Inc. CooperVision Inc. Verastem drug developer Oncology of sale a public through $24.6mm netted Funds $2.97. at shares common 8.4mm commercialization and launch support will cancer blood lead the company’s of costs pending regulatory duvelisib, candidate towards be put also will and approval, additional of development continued (Dec.) projects. pipeline LLC BTIG Banks/Advisors: Investment netted netted Corp. Quanterix firm Diagnostics offer public initial its through $68.6mm (including shares 4.9mm common ing of priced the overallotment) of exercise full (Dec.) on the Nasdaq. each $15 at LLC; BTIG Banks/Advisors: Investment JP Partners; Evercore LLC; & Co. Cowen LLC Partners Leerink & Co.; Chase Morgan - Wain HC Banks/Advisors: Investment & Co. wright

- - - - QuantiF VITRO IN DIAGNOSTICS company an Informa Inc., Information, Business ©2016 Informa AKERS BIOSCIENCES INC. BIOSCIENCES AKERS CANCER GENETICS INC. GENETICS CANCER ALLIANCES PLC GLOBAL IMMUNOTEC OXFORD NV QIAGEN Financings ❚ (rapid in vitro vitro in (rapid Inc. Biosciences Akers - prod testing and screening point-of-care a follow-on through $6.4mm ucts) netted units, A Class 21.5mm of offering public per $0.15 at the overallotment, including one of consists A unit Class (each unit one warrant and stock common of share share) common an additional purchase to B Class (each B Units Class 3.675k and B Series of one share of consists unit (convertible stock preferred convertible one war and shares) common 24.5k into - diagnos (molecular Inc. Genetics Cancer a through $6.5mm netted cancer) for tics units 3.5mm of offering direct registered were Units discount). (a 17% $2 apiece at one and share one common of comprised war purchase share 18-month common QuantiFERON-TB Gold Gold QuantiFERON-TB and Gold ERON-TB Under the tuberculosis. for tests Plus of a payment received settlement, Oxford a royalty- Qiagen granted and $27.5mm extending license non-exclusive free, the of customers future and current to QuantiFERON the gained Qiagen products. its through technology diagnostic vitro in 2011. in Cellectis of $355mm acquisition on information provide can The platform function the cell-mediated of the activity blood whole from system immune the of (Dec.) samples. at A units) the Class to comparable rant exercisable are The warrants per unit. $1k of price strike a at period a five-year for use will The company per share. $0.1875 product fund to proceeds the offering expand to marketing; and development further develop to and sales; internal (Dec.) channels. sales - Gun Joseph Banks/Advisors: Investment & Co. nar Wainwright $2.35. HC at exercisable rant (Dec.) agent. the placement was and Qia and PLC Global Immunotec Oxford infringement patent settled NV have gen Qiagen’s surrounding litigation ❚ DEAL-MAKING

(CPAP) therapy. In the US, ImThera is cur- Used in follow-up screenings and early PHARMACEUTICALS rently enrolling patients in a pivotal study detection, LuViva is designed to provide required to obtain premarket approval results immediately and, as opposed to MERGERS & ACQUISITIONS by the FDA. ImThera will become a part more invasive pap or HPV tests or biop- ALLERGAN PLC of LivaNova’s neuromodulation segment, sies, it does not require a tissue sample REPROS THERAPEUTICS INC. which has been a key part of LivaNova’s or separate analysis by a lab, which can Allergan PLC agreed to acquire all out- business since its creation in 2015 through be costly and unnecessary. In January 2017 standing shares of troubled public US the $2.7bn merger of Cyberonics and Sorin. Shandong Yaohua Medical Instrument biotech Repros Therapeutics Inc. (small- licensed exclusive distribution, sales, and molecule gynecological/urological disor- STRYKER CORP. manufacturing rights to LuViva in China, ENTELLUS MEDICAL INC. der drugs). Repros’ board has approved Taiwan, Hong Kong, and Macau, replacing the transaction, which is expected to close Stryker Corp. agreed to acquire Entel- GTI’s former arrangement with Shenghuo during the first quarter of 2018. (Dec.) lus Medical Inc. (minimally invasive ENT Medical, which previously had Chinese Allergan will pay $0.67 per share in cash (a products) for $24 per share in cash (47% rights. In addition to Europe, the system 52% premium) for all outstanding Repros premium to prior 10-day stock trading is also approved in Canada, Mexico, Ke- shares (approximately 39.6mm) for an average), or a total equity value of ap- nya, and Singapore, and is awaiting FDA proximately $662mm (enterprise value of clearance. A current deal with ITEM would equity value of $26.5mm. Founded in 1987 $658.1mm accounting for net debt). (Dec.) enable GTI to reach more markets globally as Zonagen, the company went public in Entellus is a medical device company that and would leverage ITEM’s expertise in the 1993 and changed its name to Repros in has developed less invasive treatments gynecology field. 2006. In 2015, Repros initially submitted for patients with chronic and recurrent an NDA for its Androxal (ZA205; enclomi- sinusitis, nasal airway obstruction, and TRANSENTERIX INC. phene citrate)--an orally active testoster- persistent eustachian tube dysfunction. TransEnterix Inc. out-licensed Chinese one receptor agonist--to improve male Product lines include the XprESS ENT rights for its SurgiBot robotic laparoscopic fertility due to low testosterone caused dilation system, Latera absorbable nasal surgical system to health care asset man- by secondary hypogonadism (associated implant, MiniFESS surgical instruments, agement firm Great Belief International with obesity). In its complete response Aerogel nasal dressing, and FocESS im- Ltd. (GBIL) for up to $29mm. (Dec.) letter later that year, the FDA indicated aging & navigation. The company gener- SurgiBot is used during single-incision additional Phase III studies would be nec- ated $75.2mm in sales in 2016. While the abdominal laparoscopic procedures, essary to gain the compound’s approval. Entellus board has already approved the and allows for multiple instruments to That, coupled with a recent report indicat- transaction, the closing is still dependent be introduced and used in the surgical ing the EMA would likely return a negative on approval from Entellus stockholders. field through one access site. GBIL pays opinion regarding Androxal’s European The deal will expand Stryker’s small but $7.5mm up front, and will pay another clearance (for which an MAA was submit- significant presence in the ENT market $7.5mm by the end of March 2018 (includ- ted late last year), slashed the candidate’s and will bring a range of complemen- ing a $3mm equity investment through the likelihood of approval (per Biomedtracker) tary products to the company. Investment purchase of 1.29mm TransEnterix common to 25% (35% below average). Repros’ Banks/Advisors: Guggenheim Partners shares at $2.33, an 8% premium). The deal Phase IIb candidate for uterine fibroids- LLC (Stryker Corp.); Piper Jaffray & Co. also includes the potential for a minimum -Proellex (ZPU203; telapristone acetate), (Entellus Medical Inc.) of $14mm in royalty payments to be made an oral, selective progesterone receptor upon Chinese regulatory approval of the modulator (SPRM)--has also been stalled Alliances device, or on the fifth anniversary of the second financial closing of the deal. GBIL by the FDA, which placed the compound GUIDED THERAPEUTICS INC. on a partial clinical hold earlier this year ITEM MEDICAL TECHNOLOGIES GROUP concurrently entered a manufacturing agreement with China National Scientific due to concerns involving liver toxic- Turkish distributor ITEM Medical Technol- and Instruments and Materials Co. for the ity. The agency is requesting substantial ogies Group signed a preliminary license Chinese market; TransEnterix holds onto safety data before the company can begin agreement to manufacture and sell in an option to distribute or co-distribute Phase III testing (lowering the compound’s Turkey Guided Therapeutics Inc.’s cervical SurgiBot outside of China, and can also likelihood of approval to 14% (10% guide related to GTI’s LuViva cervical scan commercialize the product outside of below average)). Repros doesn’t have system; each scan with LuViva requires a China once manufacturing is underway the resources to support completion of single-patient-use cervical guide. (Dec.) and ex-Chinese regulatory approval has the FDA-mandated study necessary for ITEM has been GTI’s distributor since been obtained. SurgiBot is not yet ap- Proellex’s approval (as of Sept. 30, 2017, 2012 (under a three-year contract later proved for sale in any market. Repros reported just $1.8mm cash on expanded). If a new definitive agreement hand). Allergan will decide the future is signed, ITEM will pay $3mm in fees, plus Financings development path and may also re-assess a royalty on each cervical guide interface the compound’s continued development and calibration disposable made and sold BRAINSWAY LTD. for endometriosis as well as a vaginal in Turkey, where LuViva is approved for Tel Aviv Stock Exchange-traded Brainsway wide-scale screening of cervical cancer. Ltd. (wearable device to treat brain disor- formulation for fibroids. Women’s health In addition, over the next five-year period, ders) raised $8.5mm in a private place- and urology is a key therapeutic area for ITEM would be obligated to purchase 600 ment led by Phoenix Group (which now Allergan. If eventually successful, Proellex LuViva cervical scans and produce 3 mil- holds a 7% stake). Other participants in- will complement Allergan’s existing oral lion cervical guides. LuViva uses a biopho- cluded Noked Capital and returning backer SPRM uterine fibroid drug Esmya (ulipris- tonic technology that scans the cervix with IBI Investment House. The company’s tal acetate), which is already approved in light, using fluorescence spectroscopy to transcranial magnetic stimulation (TMS) Europe (2015) and Canada (2013) and has measure its interaction with cervical tis- system noninvasively generates brief an expected PDUFA action date during sue and identify chemical and structural magnetic pulses in the brain to activate H1 2018 for FDA clearance. Investment precancerous indicators below the surface precise neuronal pathways responsible Banks/Advisors: Stifel Nicolaus & Co. Inc. of the cervix or misdiagnosed as benign. for different types of CNS disorders. (Dec.) (Repros Therapeutics Inc.)

50 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - ❚

| 51 ; the and Mylan and DEAL-MAKING In Vivo January 2018 | In Vivo Millendo Therapeutics Therapeutics Millendo , Mallinckrodt also also Mallinckrodt , Rescula in 2014, but has seen legal seen legal has in 2014, but (repository (repository Gel Acthar H.P. Questcor and and Amitiza MILLENDO THERAPEUTICS THERAPEUTICS MILLENDO INC. ALIZE SAS PHARMA corticotropin injection), which is used for for used is which injection), corticotropin conditions inflammatory and autoimmune and sclerosis multiple lupus, including it bought Mallinckrodt spasms. infantile from an from the drug resulting from trouble 2001. since increase price 8,000% over of 34% for accounted Gel Acthar H.P. numbers but 2016 sales, Mallinckrodt’s an- acquisition Sucampo The falling. are boost helped have to seems nouncement a welcome a bit, price share Mallinckrodt’s who have shareholders company for sign since price in stock seen a 55% reduction start The company 2017. the beginning of topping cap a market with year the out ed - announce Sucampo the to prior but $5bn, $2bn. over just to dropped had ment, that Deutsche Banks/Advisors: Investment & Jefferies PLC); (Mallinckrodt AG Bank Inc.) Pharmaceuticals (Sucampo Inc. Co. in the leader a become to In an effort space, endocrine Alize held closely fellow acquiring is Inc. (Dec.) swap. in a stock SAS Pharma will entity the combined Post-transaction, - Therapeu Millendo as in the US operate SAS Therapeutics Millendo as and Inc. tics operate to continue will it where in Europe president Alize’s with R&D facilities Alize’s The company board. the Millendo joining contributes Millendo assets. two have will (ATR101), nevanimibe inhibitor the ACAT1 adrenal congenital II for in Phase is which Cushing’s endogenous and hyperplasia BioMedTracker to (According syndrome. ap- of 26% likelihood a has nevanimibe CAH and for average) (2% above proval livoletide adds Alize Cushing’s.) for 24% Prader- for II candidate a Phase (AZP531), drug orphan has which syndrome Willi opinion positive a and FDA the from status for Agency Medicines European the from drug designation. orphan gains access to Sucampo’s investigational investigational Sucampo’s to access gains III for Phase in CPP-1X/sulindac, projects (FAP), polyposis adenomatous familial Niemann- for II/III Phase in VTS270, and those of sales C. Combined Type Pick estimated are approved, if compounds, of The acquisition $450mm. be about to its diversify Mallinckrodt helps Sucampo notably most stream, revenue and assets the of sales the declining for up make to company’s (unoprostone isopropyl isopropyl (unoprostone Rescula and pain, - hyperten ocular for solution) ophthalmic Amitiza glaucoma. open-angle and sion Takeda with partnered is drug brought in net sales of $456mm $456mm of sales in net drug brought that of share Sucampo’s but 2016, for $200mm including about to amounted is marketed Rescula royalties. and sales 5% under for accounts only and in Japan, In addition revenues. the company’s of to - - - (lubiprostone) for chronic chronic for (lubiprostone) Amitiza , another player player , another Inc. Labs Design Cell “on-off switch” platform (uses (uses platform switch” “on-off Throttle MALLINCKRODT PLC MALLINCKRODT INC. PHARMACEUTICALS SUCAMPO CELL DESIGN LABS INC. LABS DESIGN CELL GILEAD SCIENCES INC. SCIENCES GILEAD curring fatty acid metabolites that restore restore that metabolites acid fatty curring The tissues. and in cells function normal products prostone marketed company’s include - constipa idiopathic chronic constipation, in constipation with IBS tion in adults, - consti opioid-induced and women, adult non-cancer chronic with in adults pation agreed to pay $18 per pay to agreed PLC Mallinckrodt Su acquire to 8% premium) (an share firm , a public Inc. Pharmaceuticals campo GI conditions for treatments developing debt, the Including diseases. rare and at sits the transaction of value enterprise $1.2bn. (Dec.) about fo- efforts drug development Sucampo’s naturally-oc are which on prostones, cus in the engineered cellular therapeutics therapeutics cellular in the engineered (Dec.) market. synNotch its are assets key Design’s Cell (requires technology expression gene activate one to of instead antigens two and (CAR) cells), receptor antigen chimeric its modulate to a switch as molecule a small teamed Design Cell and Kite CAR activity). Kite in which a deal 2016 through in up technol the Throttle to access granted was in developing work the company’s ogy for B-cell and leukemia for CAR therapies a 12.2% equity holds (Kite malignancies. that of a result as Design in Cell stake Cell in investment an and collaboration In A round.) Series $28.4mm Design’s enhance to acquisition bolt-on current the $175mm pay will Gilead business, Kite’s earn-outs in $322mm to up plus front up regulatory and development to related in- value, deal (The total achievements. amounts stake, existing Kite’s cluding Cell direct will Gilead $567mm.) about to R&D existing to technologies Design’s cancer blood and solid for Kite at ongoing brings also Design Cell drug development. - includ the table, to candidates preclinical - hepato cancer, prostate for projects ing myeloma. multiple and carcinoma, cellular Inc. Citigroup Banks/Advisors: Investment Inc.) Labs Design (Cell Just four months after thrusting itself itself thrusting after months four Just the through space therapy the cell into , Inc. Pharma Kite of $11.9bn acquisition privately acquiring is Inc. Sciences Gilead held Kite Pharma Inc. Pharma Kite service fees), and an EBITDA of $6.2bn, $6.2bn, of an EBITDA and fees), service multiples, 12.4x and 1.25x representing on hand cash $5.9bn in had It respectively. Banks/ Investment 2017. Q3 of end the at Partners; Evercore Co.; & Allen Advisors: PLC; Bank Barclays Inc.); (Aetna LLC Lazard Sachs Goldman LLC; Partners Centerview Corp.) Health (CVS & Co. - mutually agreed to agreed mutually , Group UnitedHealth CVS is spending $145 spending is CVS Inc. Aetna CVS HEALTH CORP. HEALTH CVS INC. AETNA in cash and issuing 0.8378 in its shares for shares in its 0.8378 issuing and in cash $206 at valued is which share, Aetna each is agreement The entire (a 16% premium). assumption the worthincluding $77bn, CVS closing, debt.Upon deal Aetna’s of combined the of 78% own will stockholders (Dec.) the rest. Aetna and entity, vertical a considered is The transaction help to is goal main its and arrangement, at and integrated, more care health make also will Aetna patients. to cost lower a Caremark PBM through own its have now some of for CVS using already was (Aetna other in line with falling functions), these including insurers Anthem, which , and OptumRx has which PBM called in-house own its building is with contracts (Anthem also IngenioRx Aetna and CVS services). certain for CVS - ca broaden will combination the believe provider Aetna’s to access and pabilities in-store/walk-in 1,139 CVS’s at network value- more for allow and MinuteClinics, be made to decisions care health based extensive Aetna’s of the use through for benefit Another key database. claims the that is perspective a financial from CVS CVS’s diversify would Aetna addition of on dependent heavily is which revenue, some segment. Finally, pharmacy retail its CVS Aetna, buying in that believe analysts to move proactive a potentially making is , Amazon from competition future combat distributor wholesale secured has which been has and states US in some licenses in the health a play be making to rumored less comes The acquisition market. care insur fellow and Aetna after year a than Humana company ance a ruling following their merger, terminate the blocked that court federal a US from competition unfair of the risk due to deal (around increases price expected and Anthem also and time, Cigna the same agreement). their merger abandoned commercial involves business Aetna’s (medi- insurance health government and disability and life group dental), and cal IT health compensation, workers’ plans, and pension and services, and products insurance, Within management. annuity Medicare and Medicaid offers Aetna The plans. Supplement and Advantage for 22.2mm members covers company for dental 14.5mm and benefits medical 1.15mm of network a through benefits realized Aetna professionals. care health last the in $61.4bn of revenue forma pro from comes which of (most 12 months administrative and premiums insurance In a move to streamline and improve health improve and streamline to In a move and giant pharmacy retail delivery, care (PBM) manager benefits pharmaceutical - agree a definite signed Corp. Health CVS insurance traded publicly buy to ment company company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

NESTLE SA ALMIRALL SA III for angiosarcoma, and Phase II in com- Nestle Health Science SA ATHENEX INC. bination with other cancer drugs for renal ATRIUM INNOVATIONS INC. Almirall SA licensed exclusive US and cell carcinoma, hepatocellular carcinoma, Nestle SA is paying $2.3bn in cash to ac- European development and commercial- gestational trophoblastic neoplasia, and quire private nutritional health firmAtrium ization rights to Athenex Inc.’s Phase III lung and breast cancers. Ambrx will file a Innovations Inc. (Dec.) KX2391 for actinic keratosis (AK) and other clinical trial application in China in 2018 to begin studies there, where its initial Post-transaction, Atrium will become part skin conditions. (Dec.) Almirall will provide $55mm in up-front focus will be on hepatocellular carcinoma of Nestle Health Science SA and its presi- and angiosarcoma. dent and CEO Peter Luther will continue and near-term payments; $65mm in mile- to lead the team along with existing man- stones related to launch and additional AMGEN INC. agement. Atrium’s products will fit nicely indications; $155mm in sales milestones CARMOT THERAPEUTICS INC. with Nestle’s consumer care portfolio. The (potentially more if sales exceed the pro- In a multi-year agreement, Carmot Thera- company offers nutritional supplements, jected amounts); and tiered annual net peutics Inc. and Amgen Inc. are teaming vitamins, probiotics, anti-aging and skin sales royalties ranging from a low of 15% up to identify and develop therapies for care products, preservatives, and anti- and increasing with higher sales. Athenex Parkinson’s and other neurodegenerative oxidants. Atrium’s Garden of Life certified will conduct all preclinical and clinical diseases. (Dec.) studies up to FDA approval. A topical organic, non-GMO brand is the leading Carmot will use its Chemotype Evolution ointment for AK, KX2391 (also known as natural supplement in the US. It also sells lead-identification technology to discover the Pure Encapsulations line of hypoal- KX01) is a dual inhibitor of both the Src leads. The company and Amgen will then lergenic dietary supplements, which is tyrosine kinase (regulates development jointly select multiple targets and identify the top recommended brand in the US and growth of tumors and cells involved candidates. Amgen will handle all clinical practitioner market. Other nutritional in other hyper-proliferative diseases) and development, manufacturing, and com- health brands are Wobenzym, Douglas tubulin polymerization (essential for cell mercialization activities of any resulting Laboratories, Genestra Brands, Orthica, growth). AK is marked by scaly, crusty molecules. Carmot will receive money up- AOV, Minami, Klean Athlete, and Trophic. lesions caused by damage from the sun’s front, R&D funding, and development and UV rays; if untreated, it can develop into Atrium is expected to generate $700mm commercialization milestones. In all the to squamous cell carcinoma. The compa- in sales for 2017. The firm is backed by deal could be worth over $240mm. Amgen nies will pursue development of different investors including Permira Funds, Fonds will also pay sales royalties on resulting indications and formulations. Following de solidarite FTQ, and Caisse. Investment products. Chemotype Evolution can iden- positive efficacy in Phase II trials, Athenex Banks/Advisors: Morgan Stanley & Co.; tify leads sourced from chemically diverse announced the start of two US Phase RBC Capital Markets (Atrium Innovations libraries for validated targets. The compa- III randomized double-blind controlled Inc.) nies first partnered back in 2014 under a clinical trials of KX2391 in AK earlier this similar agreement in which Carmot agreed Alliances year. Under a 2012 alliance, PharmaEs- to use its Chemotype Evolution platform to sentia has Taiwanese development and discover drug leads for Amgen’s targets. ALEXION PHARMACEUTICALS INC. commercialization rights to KX2391 for That deal was expanded two years later. HALOZYME THERAPEUTICS INC. AK, as well as the indication of psoriasis Carmot also penned a partnership with Halozyme Therapeutics Inc. penned its in Taiwan and China. The current deal Genentech in 2016. eighth collaboration surrounding the En- enables Almirall to add a late-phase can- hanze drug delivery technology, this time didate in a new therapy area to its existing AUTIFONY THERAPEUTICS LTD. BOEHRINGER INGELHEIM GMBH with Alexion Pharmaceuticals Inc. (Dec.) five-compound core dermatology pipeline, which includes tildrakizumab for plaque Boehringer Ingelheim GMBH entered into The Enhanze platform uses a proprietary psoriasis (BLA filed); P3058 for onycho- an agreement with GlaxoSmithKline PLC recombinant human hyaluronidase en- mycosis (Phase III); P3074 for androgenic spin-out Autifony Therapeutics Ltd. for zyme to temporarily degrade hyaluronan alopecia (Phase III); PAT001 for ichthyosis the exclusive option to acquire Autifony’s and help disperse injectable drugs more (Phase II); and ADP13612 for rosacea (pre- Kv3.1/3.2 positive modulator platform evenly into the body. The technology clinical). Athenex also benefits by gaining (includes Autifony’s lead compound improves upon delivery and absorption a partner to develop KX2391 in AK, while AUT00206). (Dec.) of subcutaneously delivered therapies, it focuses on its mostly-cancer pipeline. AUT00206 is a small molecule in Phase I and also allows for favorable modifica- trials for both schizophrenia and Fragile tions to dosing schedules. Through the AMBRX INC. X syndrome (received orphan drug des- current deal, Alexion is granted access TRACON PHARMACEUTICALS INC. ignation for Fragile X earlier this year). A to Enhanze to exclusively develop up to Tracon Pharmaceuticals Inc. granted Am- new approach to schizophrenia, modula- four targets, including a subcutaneous brx Inc. exclusive rights to develop and tion of Kv3 channels can treat patients extended dosing formulation of its Phase sell the endoglin antibody TRC105 (caro- early on and has the potential to address III C5 complement inhibitor ALXN1210 tuximab) in China, Hong Kong, Macau, and cognitive and negative symptoms of the (ALXO1210SC) for paroxysmal nocturnal Taiwan. The deal covers all indications disease along with positive symptoms. BI haemoglobinuria and haemolytic uraemic excluding ophthalmic, for which Santen itself is currently developing BI409306, a syndrome. Alexion pays $40mm up front, has global rights. (Dec.) phosphodiesterase 9 inhibitor based on plus $160mm in milestones per target Ambrx paid $3mm up front and could hand enhanced glutamatergic signaling, for and mid-single-digit royalties (Strategic over up to $10.5mm in development and schizophrenia and Alzheimer’s dementia Transactions estimates 4-6%). Other firms regulatory milestones, $130mm in sales (in Phase II trials). After completing the using Enhanze in their drug development milestones, and tiered royalties ranging work in schizophrenia under the current work include Roche, Baxter, Intrexon, from the high-single-digits to the low partnership, the two companies will work Pfizer, Janssen, AbbVie, Lilly, and most teens. Endoglin is a protein that is over- on treating hearing disorders and orphan recently, BMS through a September 2017 expressed on endothelial cells, and is vital CNS disorders. The tie-up includes an up- alliance for the enhancement of the Big for the formation of new blood vessels. front payment of €25mm ($29.5mm), near- Pharma’s immuno-oncology assets. The endoglin antibody TRC105 is in Phase term milestones of €17.5mm ($20.7mm),

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and future development and pre-commer- The underlying technology behind the royalty scheme may be adjusted post pat- cialization milestones of up to €585mm compound was developed by GeneQuine’s ent expiration (which is estimated at 2025, ($690.3mm) (If all milestones are real- co-founder Dr. Kilian Guse at Baylor Col- the earliest). Between years one through ized, total deal value would be €627.5mm lege of Medicine. Flexion receives an four, Collegium can terminate the deal ($740.5mm).) Autifony was spun out from exclusive license to the IP for human use for a fee of $25mm, while Depomed may BI in 2011 by Charles Large, PhD, and and will pay Baylor a low-single-digit cancel the agreement if during this time Giuseppe Alvaro (prior directors in GSK’s sales royalty. FX201 is a non-opioid gene the 12-month sales of Nucynta fall below Neurosciences Centre of Excellence for therapy being developed for symptomatic $180mm. Depomed gained exclusive US Drug Discovery). pain relief and disease modification in OA rights to Nucynta under a 2015 deal worth patients. It is administered locally and $1.05bn with Janssen Pharmaceuticals. AYALA PHARMACEUTICALS designed to express the anti-inflammatory Janssen’s Ortho-McNeil division origi- BRISTOL-MYERS SQUIBB CO. protein interleukin-1 receptor antagonist nally licensed the drug in more than 80 Bristol-Myers Squibb Co. licensed Ayala when inflammation is present within the countries from its originator Grunenthal Pharmaceuticals exclusive global rights to joint. Preclinical data suggests that a through a 2003 collaboration. (It’s mar- develop and sell its gamma secretase inhibi- single injection of FX201 could enable ex- keted as both Palexia and Palexis outside tors BMS906024 and BMS986115. (Dec.) pression of IL-1Ra in an osteoarthritic joint the US.) To manage pain severe enough to The candidates represent the first in for a least a year. The therapy is expected require daily, around-the-clock, long-term Ayala’s pipeline; the company was to enter the clinic in 2019. opioid treatment--including indications in established this year by Israel Biotech low back pain and diabetic neuropathy--IR Fund, aMoon, and Harel Insurance. BMS BLUEBIRD BIO INC. Nucynta was approved in the US in 2008 received money up front, an equity stake TC BIOPHARM LTD. (for moderate-to-severe acute pain), fol- in Ayala, and is entitled to development, TC BioPharm Ltd. and bluebird bio Inc. lowed by FDA clearance of Nucynta ER regulatory, and sales milestones, plus penned a deal for the discovery and devel- (for moderate-to-severe chronic pain) in tiered annual net royalties. BMS906024 opment of CAR-engineered gamma T-cell 2011. For fiscal 2016, Nucynta generated is in Phase I for breast, non-small cell therapies for cancer. (Dec.) $281mm in global net sales (and $183mm lung, pancreatic, ovarian, and colorectal The focus of the deal is on TC BioPharm’s so far for the nine months ended Sep- cancers, as well as melanoma, T-cell lym- ImmuniCAR platform, which involves tember 30, 2017). Nucynta complements phoma, and acute lymphocytic leukemia. modification of gamma delta T-cells to and broadens Collegium’s existing pain Preclinical BMS986115 is being evaluated express a chimeric antigen receptor. management franchise, including oral in solid tumors. Both programs target Such modification helps the cells target Xtampza ER (oxycodone) for chronic low gamma secretase, which activates Notch and destroy diseased cells while leaving back pain, approved in the US last year, signaling; Notch pathways are one of the healthy tissue alone. TC BioPharm will use which uses Collegium’s DETERx abuse- most commonly active in cancer, and are ImmuniCAR to discover and develop new deterrent delivery technology. Depomed believed to have a pro-oncogenic function solid and blood cancer drug candidates, will benefit from Collegium’s sole focus on and are involved in drug resistance. There which it will bring through Phase I/II trials. pain management (a business shift adapt- are ten other Notch pathway inhibitors in Bluebird pays $16mm up front and has ed in 2012) and the divestiture will enable active development, the most advanced the exclusive option to take over further it to cut marketing costs and its salesforce of which are in Phase II by Juno Therapeu- development and global commercializa- for Nucynta and to build up additional CNS tics (LY3039478, to combine with CART tion. TC BioPharm could also get R&D and areas in its specialty business. (licensed from Eli Lilly on the same day sales milestones, plus tiered royalties. as the current deal)) and by OncoMed Bluebird’s CART pipeline includes lead COMERCIALIZADORA BIORENAL SPA (tarextumab). Ayala claims its strategy project bb2121, in Phase II for multiple ROCKWELL MEDICAL INC. for lead candidate BMS906024 will be myeloma with partner Celgene. Comercializadora BioRenal SPA licensed more targeted than competitors, since exclusive rights to sell the iron replace- the company will be recruiting patients COLLEGIUM PHARMACEUTICAL INC. ment therapy Triferic (ferric pyrophos- for clinical trials that have certain Notch- DEPOMED INC. phate) in Chile for Rockwell Medical activating mutations, and as a result are Collegium Pharmaceutical Inc. is licensing Inc. (Dec.) more likely to respond (however, Lilly, from fellow CNS drug delivery company BioRenal is responsible for all regulatory, OncoMed, and an earlier-stage company Depomed Inc. exclusive US rights to oral marketing, and distribution activities for Cellestia Biotech have been involved in opioid analgesic Nucynta (tapentadol), an initial term of five years (renewable for trials that include a patient preselection including both the immediate-release five years based on annual minimum pur- or stratification biomarker). Phase II stud- (IR) and extended-release (ER) formula- chase requirements). Triferic is currently ies of BMS906024 are expected to begin tions. (Dec.) the only FDA-approved drug to replace in 2018. Depomed receives a $10mm up-front iron and maintain hemoglobin in end- payment and cash reimbursement for its stage renal disease patients who are on BAYLOR UNIVERSITY cost of inventory. For the first four years hemodialysis and have anemia. Baylor College of Medicine Quimica of the agreement, Collegium provides Europea got rights in Peru earlier this FLEXION THERAPEUTICS INC. minimum annual royalties of $135mm month, and GENEQUINE BIOTHERAPEUTICS GMBH Wangbang Pharmaceutical (payable at $33.75mm quarterly), plus ad- and ARAM Medical have rights in China GeneQuine Biotherapeutics GMBH licensed ditional royalties depending on annual net and the Middle East, respectively. Flexion Therapeutics Inc. exclusive world- sales thresholds (25% for sales between wide rights to its preclinical gene therapy $233-258mm, plus 17.5% for sales above CONFO THERAPEUTICS NV GQ203 for osteoarthritis (OA). (Dec.) $258mm). After four years (beginning ROCHE Flexion will pay $2mm up front, up to January 1, 2022), the royalty mechanism Confo Therapeutics NV licensed Roche $8.7mm in milestones through Phase II remains the same, but without the guaran- exclusive rights to discover, develop, proof-of-concept, and up to $54mm in teed $135mm amount; Depomed will get a manufacture, and sell small-molecule milestones based on later-stage devel- 58% royalty on sales up to $233mm, 25% G-protein coupled receptor (GPCR) ago- opment and global regulatory approvals. royalties on sales between $233-258mm, nists for neurological and developmental Flexion has renamed the candidate FX201. plus 17.5% on sales above $258mm. The disorders. (Dec.)

54 | In Vivo | January 2018 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - ❚

| 55 DEAL-MAKING In Vivo January 2018 | In Vivo . FIVE PRIME THERAPEUTICS INC. THERAPEUTICS PRIME FIVE LTD. LAB ZAI INC. GENEXINE BIOPHARMA I-MAB pricing and reimbursement approval of of approval reimbursement and pricing the first upon $1.2mm to up the drug, and of in two product the of sale commercial In addition, countries. specified certain $3mm when out shell could Eurofarma or exceed equal sales net cumulative or over, $50mm on sales $7.5mm $20mm, $100mm reach when sales $7.5mm and achievement subsequent Each or more. in result will another $100mm in sales of which, payments, milestone additional prod anticipated the with combined when expected is payments, transfer supply uct range to estimated payments provide to percentage high-teens to mid- a from agreement The sales. net cumulative of transfer supply product includes also a provide to expected are which payments to a high-single-digit to equivalent return sales. net of percentage low-double-digit molecule small an oral is Ridinilazole III trials Phase II, with in Phase currently - Sum in H1 2018. commence to expected a partner because as Eurofarma chose mit Latinin expertise and network strong its of problem. a serious is CDI where America, Zai granted Inc. Therapeutics Prime Five and develop to rights exclusive Ltd. Lab in FPA144 antibody the anti-FGFR2b sell Taiwan. and Macau, Hong Kong, China, (Dec.) $39mm to up and front up $5mm pays Zai - mile regulatory and in development high-teens the from royalties plus stones, territories. in the licensed low-twenties to low- Zai pay to agreed also has Prime (Five in the rest on sales royalties single-digit an isoform-selective FPA144, the world.) of tumors target to designed mAb humanized thethat overexpress growth fibroblast in Phase is FGFR2b, variant splice factor gastro-esophageal and gastric for I trials for responsible is Zai cancers. junction eventual and III trial a Phase conducting Zai’s China. in Greater commercialization - in develop programs includes pipeline and diseases immune-mediated for ment candidate lead including cancers, various and breast, ovarian, for (ZL2306) niraparib Chinese has The company cancers. lung - a 2016 collabora under niraparib to rights Tesarotion with exclusive licensed I-MAB Biopharma and Hong Kong, Taiwan, in China, rights engineered ’s Inc. Genexine to Macau completed , which HyLeukin antibody IL-7 (Dec.) tumors. solid I for Phase to up front, up $12mm money I-MAB pays low- tiered and in milestones, $536mm on regulatory based royalties single-digit the first not is This sales. and approvals formed was I-MAB partners. the for tie-up of the merger following year this earlier - - (neratinib), an EGFR inhibitor inhibitor an EGFR (neratinib), Nerlynx DICE MOLECULES SV LLC SV MOLECULES DICE ROCHE SA EUROFARMA LABORATORIOS THERAPEUTICS PLC SUMMIT Genentech Inc. Genentech Molecules DiCE alliance, In a multi-year small develop and discover will LLC SV by selected targets against molecules (Dec.) Inc. ’sGenentech Roche two under just comes agreement The Big major first its signed DiCE since years the biotech 2016, In March deal. Pharma with collaboration five-year a formed molecules small oral develop Sanofi to up-front Including 12 targets. against get could DiCE payments, milestone and have Genentech and $2.2bn. DiCE to up about details financial any released not an get will DiCE that say to only their deal, development, research, plus fee up-front milestones. commercial and regulatory, chemical directed various uses DiCE DNA- including technologies, evolution mix-and-split and libraries encoded identify to - mol chemistry, combinatorial that targets drug with interacting ecules also DiCE inaccessible. previously were Stanford at developed platform, this says the significantly up scale , can University candidates lead to hits these of number structur of types different several across Euro licensed PLC Therapeutics Summit to rights exclusive SA Laboratorios farma ridinilazole antibiotic its commercialize (CDI) in infection difficile Clostridium for Chile, Brazil, Bolivia, Belize, Argentina, Sal- El Ecuador, Rica, Costa Colombia, Mexico, Honduras, Guatemala, vador, Peru, Paraguay, Panama, Nicaragua, Uruguay Republic, Dominican Suriname, (Dec.) Venezuela. and - develop clinical all handle will Summit Eurofarma while ridinilazole, of ment regulatory obtaining for responsible is - Sum territories. in the licensed approvals Latin of outside rights all retains mit up $2.5mm receives Summit America. enrollment patient to tied $3.75mm front, III Phase planned two in one of targets of achievement the $1mm upon trials, III in the Phase endpoint the primary of the receipt to $1.2mm related study, trials for HER2-positive breast, stomach, stomach, breast, HER2-positive for trials brings Puma cancers. esophageal and its cancer breast HER2-positive for marketed undergone already have who patients treatment with adjuvant trastuzumab co-sponsor will partners The therapy. be to is which research, the combination Sloan Cancer Memorial at undertaken . Center announced it day On the same families. al a formed also Roche alliance, the DiCE , to Therapeutics Confo with partnership neurological for agonists GPCR develop disorders. developmental and - - - , which is used to stabilize stabilize to used is , which CONFO , which plans to use the use to plans , which Lundbeck DAEWOONG PHARMACEUTICAL CO. LTD. CO. PHARMACEUTICAL DAEWOONG GMBH SCIENCES ROIVANT LTD. CO. SANKYO DAIICHI INC. BIOTECHNOLOGY PUMA granted Roi Ltd. granted Co. BioPharma HanAll PumaBioand Ltd. Co. Sankyo Daiichi agreement to build new programs in in new programs build to agreement Alzheimer’s, depression, schizophrenia, Parkinson’s. and Ltd. Co. BioPharma HanAll to rights GMBH exclusive Sciences vant Phase its sell and manufacture, develop, for HL161 antibody monoclonal anti-FcRn I autoimmune IgG-mediated pathogenic (Dec.) diseases. Canada, US, the include rights Roivant’s Latin Amer EU, UK, Switzerland, Mexico, North and Africa. East, Middle the ica, is HanAll report that sources Industry payment, a $30mm up-front for eligible $452.5mm R&D funding, $20mm in of royalty fixed a and milestones, in Fc the neonatal targets HL161 $502.5mm. severe treat to potential has and receptor are there which for diseases autoimmune myasthenia including no cure, currently optic thrombocytopenia, chronic gravis, lupus. and polyneuropathy, neuritis, com- drug development five has Roivant focusing each umbrella, its under panies was it While area. therapy on a separate the current in disclosed explicitly not on HL161, take will subsidiary which deal , which Enzyvant is entity likely the most - includ diseases rare for projects houses acid and syndrome DiGeorge ing complete deficiency. ceramidase - the com study to agreed Inc. technology therapies cancer their of two of bination approach new treatment a potential as solid or HER2-positive HER2-mutated for (Dec.) cancers. - collabo in the preclinical-stage Included (trastuzumab), DS8201 Daiichi’s are ration II in Phase conjugate an antibody-drug The deal has an initial term of 30 months, 30 of term an initial has The deal €6mm pay will Roche which during payment, an up-front in ($7mm) combined - fund research and milestones, preclinical for responsible also is Pharma ing. The Big - regula development, €81.5mm in to up milestones, commercialization and tory, a 2015 Confo, royalties. tiered as well as - Brus Universiteit Vrije VIB and of spin-off tool discovery a drug developed sel, has called in targets GPCR of conformers signaling targeting for allows This states. active of structuralfeatures of GPCRsthat were The company druggable. not previously optimizing and identifying, screening, is - Confobod as known agonists, GPCR lead a €6.7mm completed Confo year, Last ies. its fund to A financing Series ($7.3mm) has Confo being founded, Since work. deal drug discovery a CNS signed also with company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

Third Venture and Tasgen. Tasgen and JOHNSON & JOHNSON JUNO THERAPEUTICS INC. Genexine teamed up in 2015 when Tasgen Janssen Pharmaceutical Cos. ELI LILLY & CO. took on rights to five of Genexine’s candi- Janssen R&D LLC Eli Lilly & Co. granted Juno Therapeutics dates in development (in the metabolic, MEMORIAL SLOAN KETTERING Inc. rights to its gamma-secretase inhibitor blood, and GI spaces). I-MAB will now CANCER CENTER LY3039478, which Juno will investigate as develop and sell Genexine’s HyLeukin, XYNOMIC PHARMACEUTICALS INC. a treatment for multiple myeloma. (Dec.) an immuno-oncology compound that Xynomic Pharmaceuticals Inc. and Jans- Financial terms were not disclosed. Lilly consists of an engineered IL-7 molecule sen R&D LLC are partnering to evaluate has the candidate in Phase II trials for T- fused with Genexine’s hyFc (hybrid Fc) Xynomic’s abexinostat with Janssen’s cell lymphoma and acute lymphocytic leu- long-acting platform technology and is ibrutinib for relapsed/refractory diffuse kemia (as well as Phase I for solid tumors), designed to enhance anti-tumoral T-cell but Juno is interested in implications the immunity. The deal is the second for I-MAB large B-cell lymphoma (r/r DLBCL) or relapsed/refractory mantle cell lymphoma compound may have for myeloma when in just a few months. In November, it took combined with B-cell maturation antigen (r/r MCL). (Dec.) on Chinese rights to MOR202 from Mor- (BCMA)-directed CAR T cells, as research phoSys. That project is in Phase II trials The Phase I/II trial will be led by Memorial has shown that gamma-secretase inhibi- for relapsed/refractory multiple myeloma. Sloan Kettering Cancer Center’s Drs. Anita tors can increase surface expression of Kumar and Anas Younes to assess the HANX BIOPHARMACEUTICALS INC. BCMA on tumors, including myeloma, and combination of the two compounds in r/r ONCONOVA THERAPEUTICS INC. could increase the strength of BCMA-di- DLBCL or r/r MCL in addition to studying rected CART therapy. Juno hopes to have a Onconova Therapeutics Inc. granted the biologic predictors of response and GSI/BCMA CART candidate in clinical trials HanX Biopharmaceuticals Inc. rights to resistance to dual BCRi and HDACi inhibi- next year; it is currently recruiting patients develop and sell its preclinical cancer tion. Abexinostat is in Phase II for various for a Phase I trial of its BCMA-directed project ON123300 in China. (Dec.) lymphomas (DLBCL, MCL, non-Hodgkin’s, CAR T cells together with the chemo drug HanX pays money up front, milestones Hodgkin’s, follicular, and cutaneous and Revlimid (lenalidomide). Concurrent with for regulatory and commercialization peripheral T-cell), soft tissue sarcoma, the Lilly deal, the company also licensed achievements, and sales royalties. The chronic lymphocytic leukemia, colorectal GSI/BCMA intellectual property from candidate is a CDK4/6 and ARK5 inhibitor cancer, and myeloma, and in preclinical biomarker firmOncoTracker and the Fred that is being studied for both solid and studies for renal cancer. Ibrutinib is sold Hutchison Cancer Research Center. blood cancers. The partners believe that due to its dual modes of action, ON123300 as Imbruvica by Janssen Biotech and MERCK & CO. INC. has the potential to overcome limitations Pharmacyclics for MCL, chronic lympho- NEON THERAPEUTICS of current CDK4/6 inhibitors including cytic leukemia, Waldenstrom’s hypergam- Neon Therapeutics and Merck & Co. Inc. palbociclib (Pfizer’s Ibrance). HanX is maglobulinaemia, and graft-versus-host entered a trial collaboration to study the responsible for funding and carrying out disease. It is also being studied in Phase combination of Neon’s neoantigen cancer all regulatory activities in its territories, III for multiple lymphomas and pancreatic vaccine with Merck’s anti-PD-1 therapy, while Onconova retains rights in the rest cancer; in Phase II for B-cell lymphoma, together with chemotherapy, for lung of the world, and can use any regulatory myeloma, and breast, non-small cell lung, cancer. (Dec.) data produced by HanX for IND and further renal, colorectal, stomach, and genitouri- Neon brings to the deal its Phase I regulatory filings in the US. nary cancers. NEOPV01, a personal neoantigen vaccine

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| 57 DEAL-MAKING (on- Inc. bio bluebird In Vivo January 2018 | In Vivo for transfusion- for LentiGlobin ; for continued development of of development continued for ; BLUEBIRD BIO INC. BIO BLUEBIRD INC. BIOSCIENCES CATALYST THERAPEUTICS INC. DENALI INC. PHARMACEUTICALS DICERNA offering of 5.1mm American Depositary Depositary American 5.1mm of offering - rep the overallotment; (including Shares $52. at shares) ordinary 5.1mm resenting 3.5mm sell to filed originally company The of variety a support will Funds ADSs. in- activities, development and corporate on ARGX113, work pre-registration cluding III Phase entering fragment an antibody autoimmune in severe potential with trials im- sclerosis, multiple including diseases, lupus systemic thrombocytopenia, mune and gravis, myasthenia erythematosus, (Dec.) diseases blistering skin & Co. Cowen Banks/Advisors: Investment & Co.; Kempen LLC; JMP Securities LLC; PacGrow Wedbush Co.; & Piper Jaffray Sciences Life Gene editing firm net diseases) genetic severe and cology of sale the public through $570mm ted Funds $185. at shares common 3.24mm of exercise the potential for earmarked are rights co-promotion and co-development multiple bluebird’s bb2121, to in the US to licensed is that candidate myeloma Celgene - devel for myeloma; multiple in bb21217 activities launch and opment, regulatory, surrounding and in the US B-thalassemia dependent bluebird’s R&D of continued and Europe; (Dec.) projects. TCR CAR and of pipeline Ameri- of Bank Banks/Advisors: Investment Goldman LLC; & Co. Cowen Lynch; Merrill ca Co. & Chase JP Morgan & Co.; Sachs $9.8mm netted Inc. Biosciences Catalyst - 1.1mm com of sale a public through is The company $9.50. at mon shares for therapies protease-based developing offering the use to plans and hemophilia general R&D and continued for proceeds (Dec.) expenses. corporate Ladenburg Banks/Advisors: Investment LLC Capital LifeSci Inc.; & Co. Thalmann - (neurodegen Inc. Therapeutics Denali netted drug development) disease erative of offering public an initial in $267.4mm the overallot (including 15.9mm shares - antici its of the mid-point $18, ment) at originally had The company range. pated (Dec.) shares. 8.33mm sell to planned Evercore Banks/Advisors: Investment JP Morgan & Co.; Sachs Goldman Partners; & Co. Stanley Morgan & Co.; - (RNAi thera Inc. Pharmaceutical Dicerna the through $37.6mm netted peutics) common 5.7mm of offering follow-on and preclinical support $7 to at shares (Dec.) candidates. of studies clinical Evercore Banks/Advisors: Investment

- - .) RZ358 ActiveSite received Inc. exclusiveRezolute (ferric pyrophosphate) in pyrophosphate) (ferric Triferic ARGENX SE ARGENX ACER THERAPEUTICS THERAPEUTICS INC. ACER REZOLUTE INC. REZOLUTE CORP. XOMA Financings (cancer and autoimmune diseases) netted netted diseases) autoimmune and (cancer public an upsized through $249.6mm argenx SE argenx developer antibody Therapeutic (rare and orphan orphan and (rare Inc. Therapeutics Acer a follow-on in $10.4mm netted diseases) shares common 916.7k of offering public the offering use will $12. The company at - regula seek to and R&D, fund to proceeds in pre-commercial invest and approval tory being (celiprolol; EDSIVO for activities vascular of treatment the for developed in the US). (Dec.) syndrome Ehlers-Danlos - Wain HC Banks/Advisors: Investment & Co. Blair William & Co.; wright likrein inhibitor platforms. (Just a few platforms. inhibitor likrein exclusive received Rezolute ago, months - kal plasma oral a portfolio to of rights from inhibitors likrein has that antagonist receptor an insulin is through proof-of-concept demonstrated drug orphan has already It trials. IIa Phase plans Rezolute EU and and in the US status in 2018. development clinical advance to regulatory all handle will The company commercialization. and approvals worldwide rights to develop, manufacture, manufacture, develop, to rights worldwide II Phase ’s Corp. Xoma commercialize and (renamed XOMA358 antibody monoclonal - con by caused hypoglycemia RZ358) for (Dec.) hyperinsulinism. genital $6mm in cash Xoma pay will Rezolute stock common $12mm in issue will and financing certain completes Rezolute as - re also could Xoma in 2018. milestones regulatory, $222mm in clinical, to up ceive in the royalties plus milestones sales and (Strategic mid-teens to digits high-single 9-16%) on annual assumes Transactions entitled also is Xoma RZ358. of sales net of on sales royalties low-single-digit to AB101 compound diabetes Rezolute’s its from developed other products and kal plasma oral and extended-release Concurrent with changing its name from from name its changing with Concurrent AntriaBio, is the only drug approved by the FDA to to the FDA by drug approved the only is hemoglobin maintain and iron replace who have patients in hemodialysis levels year, last signed Under deals anemia. in the drug to rights has ARAM Medical Biophar Wanbang and East, the Middle in China. it sell can maceuticals therapy therapy (Dec.) Peru. years, five is the deal of term The initial five an additional for renewable is and purchase minimum on annual based years - regula pursue will Quimica requirements. will Rockwell and Peru, in tory activities Triferic manufacturing. for be responsible

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TiGenix NV exclu TiGenix granted wound cleanser in Africa and the and Africa in cleanser wound exclusive rights to sell the anemia sell to rights exclusive has exclusive Pharmaceutical Takeda CORP. LTD. CORP. MESOBLAST LTD. MESOBLAST NV TIGENIX MUNDIPHARMA INTERNATIONAL INTERNATIONAL MUNDIPHARMA EUROPEA QUIMICA INC. MEDICAL ROCKWELL NTC SRL Mesoblast Ltd. (pembrolizumab), an anti-PD-1 antibody an anti-PD-1 antibody (pembrolizumab), cell non-small melanoma, for marketed Hodg cancer, neck and head cancer, lung stomach, bladder, and lymphoma, kin’s in over also is (It cancers. esophageal and and other solid for trials clinical dozen two study will The companies cancers.) blood a regimen of part as together their therapies chemotherapeutics the established with in a Phase pemetrexed and carboplatin for trial efficacy and tolerability, Ib safety, nonsqua- or metastatic advanced untreated to Similar cancer. lung cell non-small mous NEOPV01 involving collaborations other trial Bristol-Myers and Apexigen partners (with examine also Neon will and ), Merck Squibb in response immune neoantigen-specific well as tissue, tumor and blood peripheral markers. response other immune as that uses DNA mutations from a patient’s from DNA mutations uses that brain, for being studied is and tumor own cancer, lung cell non-small and bladder, Keytruda brings Merck melanoma. and Quimica licensed Inc. Medical Rockwell Europea ex-US rights to Cx601 under a deal signed signed deal a under Cx601 to rights ex-US - Meso from rights current the year; last Takeda IP to sublicense TiGenix allow blast needed. parties) as other third (and Inter Mundipharma licensed SRL NTC prior to months three And Region. Levant to CellAct rights global got the firm that prodrug II etoposide Phase ’s Pharma cancer. tract biliary for CAP7.1 sive rights to patents surrounding the use use the surrounding patents to rights sive stem mesenchymal adipose-derived of (Dec.) fistulas. perianal treat to cells continued support IP will The licensed launch the upcoming and development an (darvadstrocel), Cx601 TiGenix’s of await suspension injected intra-lesionally III in Phase and Europe in ing approval patients in fistulas perianal for trials US €5mm pays TiGenix disease. Crohn’s with 12 €5mm within front; ($5.9mm) up regulatory €10mm in to up and months; - royal sales single-digit plus milestones, ties. a distribute to Ltd. rights Corp. national in the products ophthalmic portfolio of (Dec.) Region. Africa and East Middle disclosed not were the deal of Terms are in the agreement included however allergy, dry eye, blepharitis, for products - month Mundi last Just glaucoma. and from rights exclusive received pharma the sell to Research Pharma APR Applied Nexodyn company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

Partners; HC Wainwright & Co.; Stifel the research stage, is currently pursuing Lexicon’s financial commitments under Nicolaus & Co. Inc.; SunTrust Banks Inc. a gene-therapy for arthritis and related a 2015 Type II diabetes deal with Sanofi conditions. (Dec.) for sotagliflozin, and will also be used to EDITAS MEDICINE INC. Investment Banks/Advisors: HC Wain- finalize sotagliflozin applications for Type Editas Medicine Inc. (genome editing) net- wright & Co. I diabetes. (Dec.) ted $50mm in a follow-on public offering of 1.97mm common shares at $26. The GLOBAL BLOOD THERAPEUTICS INC. MADRIGAL PHARMACEUTICALS INC. company will use the proceeds from the Global Blood Therapeutics Inc. (lead Madrigal Pharmaceuticals Inc. netted offering to fund trials of LCA10 (genome candidate is for sickle cell disease) netted $111.7mm through a public offering editing therapeutic for Leber Congenital $96.3mm through the public offering of of 1.5mm common shares at $83. The Amaurosis 10 using an AAV vector) and 2.6mm common shares at $36.80. Pro- company is developing thyroid hormone other genetic infectious eye disease proceeds will support late-stage trials of lead receptor modulators for cardiovascular grams; to help support preclinical studies candidate voxelotor (GBT440) for sickle and fatty liver diseases, and recently an- of non-malignant hematologic diseases; cell disease in adults and children. (Dec.) nounced that its lead candidate MGL3196 to pay for preclinical studies of engineered Investment Banks/Advisors: Cantor achieved the primary endpoint in a Phase T cell therapies for cancer (through exist- Fitzgerald & Co. II trial for biopsy-proven nonalcoholic ing collaboration with Juno Therapeutics); steatohepatitis. (Dec.) to expand its platform technology; and GW PHARMACEUTICALS PLC Investment Banks/Advisors: Evercore for potential future licensing or acquisi- GW Pharmaceuticals PLC (cannabinoid Partners; Goldman Sachs & Co.; HC Wain- tions. (Dec.) products) netted $299.1mm in a follow- wright & Co.; JMP Securities LLC; Roth Investment Banks/Advisors: Morgan on public offering of 2.76mm American Capital Partners Stanley & Co. Depository Shares (ADS; representing 33.1mm ordinary shares including full NORTHWEST BIOTHERAPEUTICS INC. EYENOVIA INC. exercise of the 360k ADS over-allotment Northwest Biotherapeutics Inc. (immu- Ophthalmic-focused Eyenovia Inc. filed for option) at $115 per ADS. The company notherapies for cancer) netted $11.9mm its initial public offering. (Dec.) will use the offering proceeds to fund pre- through the private sale of 7mm Series A Investment Banks/Advisors: Ladenburg launch commercialization activities and to preferred shares (each convertible into 10 Thalmann & Co. Inc.; Roth Capital Partners expand manufacturing of Epidiolex (phar- common) at $1.70 per share. Investors (the maceutical formulation of cannabidiol in majority of whom are new to the company) FENNEC PHARMACEUTICALS INC. development for rare childhood-onset also received two-year Class D-1 warrants Fennec Pharmaceuticals Inc. netted epilepsy disorders), and to advance other to purchase 70.6mm common at an exer- $20mm through a public sale of 2.49mm pipeline candidates. (Dec.) cise price of $0.22. (Dec.) common shares (including partial exercise Investment Banks/Advisors: Bank of Ameri- NOVARTIS AG of the overallotment) at $8.50. Funds will ca Merrill Lynch; Cowen & Co. LLC; Goldman ULTRAGENYX PHARMACEUTICAL INC. support regulatory and launch activities Sachs & Co.; Morgan Stanley & Co. surrounding Pedmark (sodium thiosul- Ultragenyx Pharmaceutical Inc. sold No- fate), a Phase III agent designed to prevent HERON THERAPEUTICS INC. vartis AG its rare pediatric disease prior- cisplatin-induced hearing loss (ototoxici- Heron Therapeutics Inc. (pain and sup- ity review voucher (PRV), which the FDA ty) in children undergoing platinum-based portive cancer care treatments) netted awarded to Ultragenyx last month upon chemotherapy. (Dec.) $142.5mm through a public offering of approval of its enzyme replacement Investment Banks/Advisors: HC Wain- 9.68mm common shares at $14.75. Funds therapy Mepsevii (vestronidase alfa) for wright & Co.; Wedbush PacGrow Life will support marketing of Sustol (granis- the rare genetic, metabolic lysosomal Sciences etron injection) for chemotherapy-induced storage disorder mucopolysaccharidosis nausea and vomiting (CINV); commercial VII (MPS VII; otherwise known as Sly FIBROCELL SCIENCE INC. launch of Cinvanti (aprepitant), also for syndrome). Mepsevii, originally licensed Regenerative medicine company Fibrocell CINV; late-stage development of HTX011, from St. Louis University in 2012, is Science Inc. (autologous cell and gene a bupivacaine/meloxicam combo for designed to replace the deficient ly- therapies focused on skin and connec- prevention of post-operative pain; and sosomal enzyme beta-glucuronidase tive tissue disorders) netted $9.9mm additional development and corporate (required for the breakdown of certain through the public offering of 7.7mm units activities. (Dec.) carbohydrates) in both adult and chil- (consisting of 7.7mm common shares and Investment Banks/Advisors: Cantor dren with MPS VII. (Dec.) five-year warrants to purchase 13.6mm Fitzgerald & Co. common shares at $0.77) at $0.77 and ODONATE THERAPEUTICS LLC 5.9mm pre-funded warrants at $0.76. (In LEXICON PHARMACEUTICALS INC. Odonate Therapeutics LLC (cancer drug addition, there was a partial exercise of Lexicon Pharmaceuticals Inc. (gene- development) netted $139.5mm through the overallotment of warrants to purchase targeting therapies for diabetes, carcinoid its initial public offering of 6.25mm com- up to 410.6k shares of common stock.) Fi- syndrome, and neuropathic pain) entered mon shares at $24. The company had brocell will use the proceeds to advance its into a $200mm non-dilutive term loan originally hoped to sell 5.88mm shares pipeline, which includes FCX007 (Phase agreement with Biopharma Credit PLC for between $24-27 apiece. (Dec.) I/II for recessive dystrophic epidermoly- and Biopharma Credit Investments (funds Investment Banks/Advisors: Cowen & sis bullosa) and FCX013 (preclinical for managed by Pharmakon Advisors). The Co. LLC; Goldman Sachs & Co.; Jefferies scleroderma). It will also use the funds loan bears interest at 9%, and matures & Co. Inc. for continued development of potential in December 2022. Lexicon borrowed an candidates under its 2012 collaboration initial tranche of $150mm immediately PROTEOSTASIS THERAPEUTICS INC. (expanded in 2015) with Intrexon, in and can access the remaining $50mm Proteostasis Therapeutics Inc. (mostly which it’s using the latter’s technology to until March 2019 if net sales of the com- focused on developing cystic fibrosis develop genetically modified fibroblasts pany’s carcinoid syndrome diarrhea drug therapies) netted $43.2mm in a follow- for chronic inflammatory and degenera- Xermelo (telotristat) exceed $25mm in on offering of 9.2mm common shares tive diseases of the joint. The program, in the preceding quarter. Funds will support (including the overallotment) priced at

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$5 each. The company will use some In Vivo of the funds to advance its double and Pharma intelligence | triple combination therapies in dose- range-finding and proof-of-concept executive editors editorial advisory board studies; move its double combination Nancy Dvorin, Managing Editor Brian Chapman therapy of PTI801 and PTI808 through John Hodgson, Data Editor ZS Associates, Partner the Phase I; and advance triple combi- William Looney, Pharma Editor nation PTI801, PTI808, and PTI428 in a Ashley Yeo, Medtech Editor Benjamin Comer PwC, Senior Manager Phase I trial. (Dec.) editorial staff Health Research Institute Investment Banks/Advisors: HC Wain- Peter Charlish wright & Co.; Leerink Partners LLC; RBC Amanda Micklus Don Creighton ICON Capital Markets contributing editors Global Head of Pricing & Market Access REVANCE THERAPEUTICS INC. Deborah Erickson Regina Paleski Deborah Dunsire, MD Revance Therapeutics Inc. (neuromodu- Mark Ratner XTuit Pharmaceuticals lating drug delivery) netted $157mm Marc Wortman President & CEO through the public offering of 5.4mm Les Funtleyder shares (including the overallotment) at research manager E Squared Capital Management $31. (Selling shareholders sold an addi- Health Care Portfolio Manager Steven Muntner tional 750k shares.) The company will use the proceeds for R&D (including potential deals analysts Linda Harpole, MD SAS, CMO collaborations) and clinical trial expens- Beth Detuzzi, Deanna Kamienski Maureen Riordan es. Its pipeline includes two botulinum Terry Hisey toxin Type A candidates formulated using Deloitte, Senior Principal, Life Science & Health Care Practice its peptide delivery technology. RT002 is design supervisor an injectable for glabellar (frown) lines Gayle Rembold Furbert Ken Kaitin, PhD (Phase III, for which it has a 72% likeli- Director, Tufts Center for the senior designer hood of approval (10% above average), Study of Drug Development Janet Haniak per Biomedtracker); cervical dystonia Barbara Lopez Kunz designers (Phase II); and plantar fasciitis (Phase DIA, Global Chief Executive II). RT001 is a topical gel in preclinical Jean Marie Smith, Paul Wilkinson studies for therapeutic and aesthetic ap- Ellen Licking plications. Following the failure of RT001 EY, Senior Analyst head of editorial ops (pharma) Global Life Sciences to meet co-primary and other endpoints Karen Coleman in a Phase III trial last year, the company Julie Locklear discontinued its development in lateral advertising EMD Serono, VP & Head of canthal lines (crow’s feet) and axillary Christopher Keeling Health Economics & Outcomes Research hyperhidrosis (excessive sweating) indi- corporate sales Roger Longman cations. (Dec.) John Lucas, Elissa Langer Real Endpoints, CEO Alicia McNiven Investment Banks/Advisors: Barclays Dan McIntyre technology operations manager Bank PLC; Cantor Fitzgerald & Co.; Cowen Publick House, Partner & Co. LLC; Goldman Sachs & Co.; SunTrust Chris Trudeau Michael Ringel, PhD Banks Inc.; William Blair & Co. vp, e-strategy & development Adam Gordon BCG VISTAGEN THERAPEUTICS INC. Senior Partner & Managing Director VistaGen Therapeutics Inc. (neuro- managing director Phil Jarvis Kenneth Schultz, MD focused stem cell therapies) netted Halozyme, Vice President of Innovation, $13.95mm through the public offering Strategy & Business Development of 10mm shares at $1.50 together with editorial office five-year warrants to purchase 10mm Jack Wong 52 Vanderbilt Avenue, 11th floor Baxter Healthcare common shares at $1.50. VistaGen will New York, NY 10017 Head of Regulatory Affairs, APAC use the proceeds primarily to advance invivo.pharmaintelligence.informa.com lead prodrug candidate AV101 (L-4-chlo- customer service Nadim Yared rokyurenine), an oral NMDA receptor [email protected] CVRx, President & CEO antagonist expected to begin a Phase II adjunctive treatment study in major depressive disorder in Q1 2018. Because IN VIVO: [ISSN 2160-9861] is published monthly, except for the combined July/August issue, by Informa Business Intelligence, Inc., 52 Vanderbilt Avenue, 11th Floor, New York, NY 10017. of its unique mechanism of action, the Tel: 888-670-8900 (US); +1-908-547-2200 (outside US); Fax: 646-666-9878. company believes AV101 may also have Office of publication, The Sheridan Group, 66 Peter Parley Row, Berlin, CT 06037. potential in multiple other CNS disorders; Postmaster: Send address changes to Informa Business Intelligence, 52 Vanderbilt Avenue, it has already shown to be safe and well- 11th floor, New York, NY 10017. tolerated in two Phase I safety studies in © 2018 by Informa Business Intelligence, Inc., an Informa company. neuropathic pain. (Dec.) All rights reserved. Investment Banks/Advisors: Chardan No part of this publication may be reproduced in any form or incorporated into any Capital Markets; Oppenheimer & Co. Inc. information retrieval system without the written permission of the copyright owner.

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