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Creating Start-Up Style Innovation at GSK Dr. Patrick Vallance, president of pharmaceuticals R&D, leads reforms through all stages of drug development. p. 24

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Welcome to Life Science Leader

NOVEMBER 2014 VOL. 6 NO. 11

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6 Editor’s Note Columns: Insights:

8 Editorial Advisory Board / Ask The Board BIOPHARMA 10 46 By Cliff Mintz Capitol Cannabis-Based Reports: Perspectives Pharmaceuticals: The Next Frontier? 16 OUTSOURCING INSIGHTS | By Kate Hammeke Logistics Providers Strive to Fulfill Biopharma Needs – Specialty Companies Offer Advantages, but Get a Bad Rap on Price 14 20 BIO INNOVATION NOTES | By Eric Langer Companies The Biosimilars Opportunity: To Watch 4 Years Of Waiting “The market is large enough to support both the nutraceutical/herbal remedies and pharmaceutical sides Cover Story: of the business” Trevor Castor, 24 GLAXOSMITHKLINE CEO of Aphios Corp. We had to reintroduce personal accountability and individual leadership. Dr. Patrick Vallance, President of Pharmaceuticals R&D at GlaxoSmithKline LEADERSHIP LESSONS 50 By Tony Bendell Am I Learning from the Failure Features: of Others?

30 36 Why it’s important How to Build Real Patient-Centered Combination Cancer Immunotherapy — for you to make your Pharmaceutical Companies A Virtual Roundtable company “anti-fragile.” Chief Editor Rob Wright’s exclusive interview A Series on the Challenges and Opportunities with the executive team at PatientsLikeMe of Using New Agents to Rally the Immune System Against Cancer

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Chief Editor Rob Wright recently was invited to attend a private dinner hosted by the National Journal that included top executives from LIFE SCIENCE LEADER (ISSN: 21610800) Vol. 6, No.11 is published monthly by Jameson Publishing, Inc. at Knowledge Park, 5340 companies such as AstraZeneca, Fryling Road, Suite 300, Erie, PA 16510-4672. Phone (814) 897-9000, Fax (814) 899-5580. Periodical postage paid at Erie, PA 16510 and Lilly, and BIO. The focus of the dinner additional mailing offices. Copyright 2014 by Peterson Partnership. All rights reserved. Printed in the USA. SUBSCRIPTION RATES for qualified readers in the U.S. $0. For nonqualified readers in the U.S. and all other countries $97 for one discussion was personalized medicine. year. If your mailing address is outside the U.S. or Canada, you can receive the magazine digitally if you provide a valid email address. POSTMASTER: Send address corrections (Form 3579) to Life Science Leader, Knowledge Park, 5340 Fryling Road, Suite 300, Erie, PA Read Rob’s insights from the dinner at his blog 16510-4672. PUBLICATIONS AGREEMENT No. 40722524 c/o AIM, 7289 Torbram Road, Mississauga, ON L4T 1G8 at www.lifescienceleader.com/blog/robs-blog.

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Want To Forever NOVEMBER 2014 VOL. 6 NO. 11 Alter The Course LIFE SCIENCE LEADER 5340 Fryling Rd., Suite 300 Erie, PA 16510-4672 Of Your Business? Telephone: 814 897 7700 Fax: 814 899 4648 WWW.LIFESCIENCELEADER.COM

VP OF PUBLISHING Jon Howland / Ext. 203 ers to the enactment of the National Minimum [email protected] Drinking Age Act of 1984. CHIEF EDITOR Rob Wright / Ext. 140 While you might be thinking Steve Jobs and [email protected] Bill Gates are Course Changers, citing their out- EXECUTIVE EDITORS sider roles and significant impact on the music Wayne Koberstein industry (i.e., Apple/iTunes) and global health [email protected] (i.e., the Bill and Melinda Gates Foundation), Louis Garguilo [email protected] they had significant financial and social status Ed Miseta advantages to get things done. Lightner had no [email protected] ROB WRIGHT Chief Editor law enforcement, legal, or political experience, Trisha Gladd and yet with limited financial resources was [email protected] ave you ever had an experience able to change the status quo. SENIOR DIRECTOR OF PUBLISHING that forever changed the course True Course Changers aren’t just outsiders too Perry Rearick [email protected] of your existence? I know I have. naïve to know the rules of your industry, but MARKET DIRECTOR When you think about things highly motivated people often moved to action Robert Wilson such as how you met your sig- by personal tragedy. There’s no doubt that, with [email protected] nificant other or why you are working where the challenges facing our industry today, we PRODUCT DIRECTOR Jenell Skemp you are, you realize the significant role human could use a few more Course Changers. They [email protected] decision making plays in determining or alter- are out there, as I discovered when I interviewed PROJECT MANAGER ing your course. Advocates of predestination the leadership team of PatientsLikeMe for my Megan Rainbow contend that free will does not exist based feature story this month on page 30. Their story [email protected] on the assertion that you did not choose to is very similar to Lightner’s. The co-founding DIRECTOR, LIFE SCIENCE TRAINING INSTITUTE be born. I do not subscribe to this notion that brothers Jamie and Ben Heywood were inspired Bill Beyer either the destiny of your life or the success/ by tragedy (i.e., their brother Stephen’s diagno- [email protected] failure of your organization is preordained. sis and decline from ALS). They are outsiders, EDITORIAL DIRECTOR Dan Schell / Ext. 284 Chaos theory not only teaches us to expect mechanical engineers who aren’t buying into [email protected] the unexpected, but more importantly, that the notion “It is what it is” when it comes to how PUBLISHER, CLINICAL small changes made early can often drasti- healthcare is delivered, drugs are developed, and & CONTRACT RESEARCH cally alter outcomes. This principle is popu- clinical trials are executed. The PatientsLikeMe Sean Hoffman 724 940 7557 / Ext. 165 larly referred to as the butterfly effect and team has built a data-sharing platform they [email protected] attributes the power to cause a hurricane off believe will change the way patients manage PUBLISHER/BIOPHARM & LAB the coast of Mexico to a butterfly flapping its their own conditions and transform and align Shannon Primavere / Ext. 279 wings in India. In the business world, I contend the relationship between patients, physicians, [email protected] the existence of Course Changers — human but- and biopharma. If you want to change the direc- PUBLISHER/OUTSOURCING Cory Coleman / Ext. 108 terflies who can and do dramatically impact tion of your business and our industry, perhaps [email protected] outcomes and alter courses well beyond their it is time you listen to the ideas and perspectives GROUP PUBLISHER/OUTSOURCING immediate environments. To find them, how- of a few Course Changers, for they do not believe Ray Sherman / Ext. 335 [email protected] ever, you probably need to look outside of your as you, nor do their beliefs require you to agree BUSINESS DEVELOPMENT MANAGER industry. For example, Candy Lightner founded with them — and that could be all the difference Mike Barbalaci / Ext. 218 Mothers Against Drunk Driving (MADD) after you need. l [email protected] her 13-year old daughter was struck and killed SR. ACCOUNT EXECUTIVE by a hit-and-run drunk driver in 1980. Since Scott Moren / Ext. 118 [email protected] then, Candy has been influential in everything PRODUCTION DIRECTOR related to eliminating drunk driving, from the Lynn Netkowicz / Ext. 205 passage of laws imposing fines for drunk driv- [email protected] MANAGE SUBSCRIPTIONS 814 897 9000 / Ext. 315 [email protected] 6 NOVEMBER 2014 LIFESCIENCELEADER.COM TempControl® offers secure, reliable shipping for temperature-sensitive cargo.

UUnited.inddnited.indd 1 99/30/2014/30/2014 99:34:26:34:26 AMAM LSL ASK THE BOARD Have a response to our experts’ answers? Send us an email to [email protected].

MAIK JORNITZ Founder, BioProcess Resources, LLC Immediate Past Chair, PDA What Is The Best Leadership MITCHELL KATZ, PH.D. EAB Exec. Dir. of Medical Research Advice You Ever Received? Operations, Purdue Pharma, L.P. Q MARY ROSE KELLER Former VP Clinical Operations, Sangart

TIMOTHY KRUPA EDITORIAL President, TSK Clinical Development ADVISORY JOHN LAMATTINA, PH.D. A “YOU BEHAVE THE SAME WAY whether you are the center of attention Senior Partner, PureTech Ventures or when no one is looking, so you have character — and character counts.” This BOARD thought was communicated to me in a letter from a former boss, Robert Capizzi, LYNN JOHNSON LANGER, PH.D. who was CMO and head of R&D at US Bioscience when I worked there in the early Director, Enterprise and Regulatory Affairs Program Center for Biotechnology ‘90s. He spontaneously sent me this note about f ve years after I left the company. Education, Johns Hopkins University Although not directly intended to be leadership advice, it had a profound impact because it made me realize how important authenticity is in a leader and that CRAIG LIPSET character is also reputation. As a result, I continuously assess my behavior for Head of Clinical Innovation, consistency and objectivity, and I look for these traits in my colleagues. Worldwide Research & Development, P f z e r

GREG MACMICHAEL, PH.D. Global Head of Biologics Process R&D MARY ROSE KELLER Novartis As a former VP of clinical operations, Keller has proven success in planning, management, and delivery of global phase 1 to 4 clinical trials JOHN BALDONI JEROLD MARTIN for drug, biologic, and diagnostic products. Chair, Leadership Development Chairman Practice, N2growth Bio-Process Systems Alliance (BPSA)

RAFIK BISHARA, PH.D. KENNETH MOCH Chair, Pharmaceutical Cold Chain Former CEO, Chimerix Interest Group, PDA BERNARD MUNOS WILLIAM CIAMBRONE Founder, InnoThink Center for A ONE OF THE MOST USEFUL WAS “… to develop a leadership model EVP, Technical Operations, Shire Research in Biomedical Innovation that ref ects my values, my leadership philosophy, and my style and then use RON COHEN, M.D. MIKE MYATT that model to become a more effective leader.” My f rst clinical development President and CEO Leadership Advisor, N2growth manager said such an approach would serve me throughout my career. It took a Acorda Therapeutics, Inc. while to develop that model, and while I continue to tweak it, he was correct. My CAROL NACY, PH.D. philosophy is servitude, the leader as a servant. My style is situational, adapting LAURIE COOKE CEO, Sequella, Inc. CEO, Healthcare Businesswomen’s my approach to best affect my team and what it is we are trying to accomplish. Association (HBA) SESHA NEERVANNAN, PH.D. As my philosophy and style developed, so did my model of leadership. As my boss VP Pharmaceutical Development and mentor predicted, when my leadership is not having the desired impact, TOM DILENGE Allergan I revisit my model, analyze my actions, and if necessary, adjust. General Counsel & Head of Public Policy BIO KEVIN O’DONNELL Senior Partner, Exelsius Cold Chain Mgt. TIM KRUPA BARRY EISENSTEIN, M.D. Consultancy U.S., Chair, Int. Air Transport Krupa is president of TSK Clinical Development, a consulting f rm Senior VP, Scientif c Affairs Assoc. Time & Temp. Task Force providing leadership and solutions in clinical planning, project Cubist Pharmaceuticals management, clinical operations, and outsourcing. He began his career JOHN ORLOFF, M.D. with Eli Lilly, and he most recently served as executive director, project HEATHER ERICKSON Head of Global Clinical Development management with Quintiles. President and CEO Merck Serono Life Sciences Foundation SANDRA POOLE JEFFREY EVANS, PH.D. SVP Biologics Operations Industrial Life Science Entrepreneur Operations, Genzyme, A Sanof Company A I RECEIVED IT FROM KARL BRACHT, former divisional president at Sartorius. TIM GARNETT MARK PYKETT, PH.D. His advice was “Treat every person in an organization as important and respectful CMO, Eli Lilly President and CEO Navidea Biopharmaceuticals as any other, no matter what title or status.” I believe this not only applies to the RON GUIDO business side of life, but also to the personal. An organization is like a clock, every President, Lifecare Services, LLC JOHN REYNDERS, PH.D. wheel and every part counts, no matter how small or large. If one part does not Chief Information Off cer function, the clock does not work. It is often forgotten that the most valuable asset LAURA HALES, PH.D. Moderna Therapeutics Founder, The Isis Group in a company are the people, all of them, and especially when they work as a JAMES ROBINSON team. They must respect, value, and support each other. Only a happy and content ANU HANS VP, Vaccine & Biologics Technical organization will supply the best product and services to its customers, and only VP & CPO Enterprise Supply Chain, J&J Operations, Merck such a team will go the extra mile for the customer. FRED HASSAN ANDREW SKIBO Chairman of the Board, Bausch + Lomb EVP Operations, MedImmune MAIK JORNITZ RVP, AstraZeneca Jornitz is COO of G-CON Manufacturing and founder of BioProcess JOHN HUBBARD, PH.D. Resources. He has more than 25 years of experience and supports the Senior VP & Worldwide Head LESLIE WILLIAMS biopharm industry on a global basis, focusing on validation, optimization, of Development Operations, Pf zer Founder, President, and CEO, ImmusanT and training in aseptic processing.

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column CAPITOL PERSPECTIVES By J. McManus By What A Republican Senate May Mean For Health Policy

JOHN McMANUS The McManus Group WHAT A REPUBLICAN SENATE MAY MEAN FOR HEALTH POLICY HEALTH MEAN FOR MAY SENATE A REPUBLICAN WHAT ust days before the election, The present “SGR [sustainable growth 2015. Republicans will be defending 23 the president’s approval rat- rate] patch” blocking massive, pend- seats in 2016 and wary about exposing ings are at an all-time low, and ing Medicare payment cuts for phy- vulnerable members to controversial J Democratic Senate candidates sicians is set to expire March 31. votes that can be demagogued as “end- are running against the presi- Congress achieved a rare bipartisan ing Medicare as we know it.” Many dent, with the Democratic candidate in breakthrough on replacing and reform- of these seats will be in Democrat- Kentucky refusing to disclose whether ing that payment formula earlier this leaning states such as Pennsylvania, she even voted for him, claiming a con- spring, but could not agree on whether Illinois, and Maine. Moreover, several stitutional right to privacy. If the tra- or how to finance the $120 billion price sitting Republican senators will be jectory holds, the Republicans should tag of eliminating those unsustain- running for president (e.g. Cruz, Paul, take the Senate and control both houses able cuts. March is probably too soon and Rubio) and have more interest in of Congress. for a new Congress to develop biparti- laying out an agenda for the 2016 elec- What would this mean for health pol- san consensus on an offset, and a six- tion than bipartisan lawmaking with icy for the last two years of the Obama month punt may set up a more serious the current president. presidency? Medicare bill for the fall. Perhaps a more interesting conun- A new Republican Senate majority A newly installed House Ways and drum will be how a Republican will likely move early to try to repeal Means Committee Chairman Ryan Congress reacts to an imminent Obamacare. But even in the minority, may try to tie SGR reform to broader Supreme Court decision, which may a unified Democratic conference can Medicare reforms such as consolidating prohibit premium subsidies flow- block an up or down vote from pro- Parts A and B’s disparate cost-sharing ing to individuals who enrolled in ceeding. Even if Republicans peel off and move Medicare to a more competi- health insurance through the Federal the necessary Democrats to reach the tive premium support model. Such a Exchange. Earlier this year, three fed- 60-vote filibuster-proof super-majority, package could move through the Senate eral courts issued conflicting opinions the president will be sure to veto a under “budget reconciliation” — a par- on whether the statutory language repeal of his most cherished domestic liamentary tactic that requires only a providing subsidies for “an exchange legislative achievement that now bears 51-vote majority, so long as the provi- established by the State” permits the his name. sions have a fiscal impact. IRS to funnel subsidies to the vast Following this fruitless exercise, But don’t necessarily expect bold majority of Americans living in the 36 Congress could tackle real issues. action from Senate Republicans in states that refused to establish state

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Would Chief Justice Roberts hold a coverage that people relied upon. similar view that clear language means Perhaps Republicans could find com- Perhaps Republicans something? Or would he contort lan- mon ground with a president who may could find common guage to divine legislative intent just be more interested in building a leg- as he did in his landmark decision acy than appeasing his base. Putting

By J. McManus By ground with a president upholding the constitutionality of the Medicare and other entitlements on who may be more individual mandate, where he deemed a more sustainable course requires the word “penalty,” which appeared 27 bipartisan cooperation so neither party interested in building a times in the Affordable Care Act statute, can be unfairly maligned. It’s an issue legacy than appeasing actually meant “tax?” Who knows? House Republicans like Ryan are eager his base. But a Supreme Court decision that to take up. upholds Pruitt lands the issue squarely But progress also can be made in more in the Republicans' lap. How do they incremental fashion. Targeted fixes to respond? the ACA can be foreseen, such as repeal- Republicans would likely be unwilling ing the medical device tax — a measure to amend the Affordable Care Act to that has strong bipartisan support. A authorize subsidies through the federal delay of the individual mandate is a exchange. They could make a federal- priority for Republicans and yields sub- ism argument and suggest that each stantial revenue that could be used for state has the ability to decide whether SGR reform or other fixes. It’s hard to establish its own exchange and the to see how the president maintains subsidies that would flow. But many his opposition to this penalty, when of those states are the very same con- delays have already been granted to servative strongholds that refused to employers. A repeal of the Independent

WHAT A REPUBLICAN SENATE MAY MEAN FOR HEALTH POLICY HEALTH MEAN FOR MAY SENATE A REPUBLICAN WHAT exchanges. Those individuals obtained expand Medicaid even though the fed- Payment Advisory Board (IPAB) has coverage in the federal exchange eral government was picking up 90 to been a priority for the health industry, through the portal, infamously inoper- 100 percent of the tab. because it is empowered to inflict arbi- able for weeks, known as Healthcare. What would be the political fallout of trary and nonreviewable Medicare cuts gov. Several other states, including turning the subsidy spigot off for mil- to healthcare providers and pharma- Nevada and Oregon, are presently lions of lower and middle income peo- ceuticals alike. abandoning their dysfunctional state ple who finally obtained health insur- Of course, all of this speculation of a exchanges and enrolling their resi- ance coverage? This is precisely why Republican Congress and legislating on dents in the federal exchange. Republicans were fixated on disman- simmering health policy problems may The September U.S. District Court rul- tling Obamacare before the subsidized be wishful thinking. Many of the Senate ing for Pruitt v. Burwell, invalidating coverage commenced in January 2014. races will be decided by a percentage subsidies in the federal exchanges, is It’s always easier to block theoretical or two, and the final outcome may not important because it establishes anoth- benefits than take away tangible ben- be known until January after several er split in the lower courts and may efits people say they currently depend states have runoffs. There is still a good prompt the high court to take a closer upon. If Republicans do not quickly chance that Democrats retain control look at the case and consider whether develop a concrete and coherent alter- of the Senate (by the slimmest of mar- to take it up immediately or wait for native to Obamacare, Democrats may gins), and the nation grinds through a pending appeals to conclude. finally be able to turn the tables and couple more years of virtual gridlock Federal Judge Ronald White, who blame Republicans for taking away while we wait for a new president. l issued the Pruitt ruling, dismissed political arguments in the previous cases, stating “This is a case of statutory interpretation. The text is what it is, no matter which side benefits. … Such a case does not ‘gut’ or ‘destroy’ anything. JOHN MCMANUS is president and founder of The McManus Group, a consulting firm spe- cializing in strategic policy and political counsel and advocacy for healthcare clients with issues On the contrary, the court is upholding before Congress and the administration. Prior to founding his firm, McManus served Chairman Bill Thomas as the staff director of the Ways and Means Health Subcommittee, where he led the the act as written. Congress is free to policy development, negotiations, and drafting of the Medicare Prescription Drug, Improvement amend the ACA to provide tax credits in and Modernization Act of 2003. Before working for Chairman Thomas, McManus worked for Eli Lilly & Company as a senior associate and for the Maryland House of Delegates as a research both state and federal exchanges, if that analyst. He earned his Master of Public Policy from Duke University and Bachelor of Arts from is the legislative will.” Washington and Lee University.

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WHAT’S AT STAKE When a tiny gene-therapy company wants to conquer the heart-failure market, with its patient population of almost 6 million in the U.S. alone, Vital Statistics it is only logical to ask some questions. BEATBio is worth watching because it could be an early sign that this long-moribund space, littered with BEAT recent failures, is heating up. But the company 10 BIOTHERAPEUTICS faces a long haul ahead in proving its treatment Employees can simultaneously deliver strong benefits to Headquarters With what it believes is a breakthrough gene-therapy millions of patients and meet the challenges of a Seattle, WA approach, this early-stage company hopes to shake up cost-driven healthcare environment. the huge heart-failure space. At this early stage, the company leaves most

BEAT BIOTHERAPEUTICSBEAT Koberstein W. By of the hard questions unanswered. How practi- WAYNE KOBERSTEIN Executive Editor cal is gene therapy in such a large population, Finances @WayneKoberstein or will the company target a smaller segment, say, advanced or acute cases only? What will be the likely procedure for the gene therapy — how $4M SNAPSHOT cumbersome or complicated will it be to treat Seed Financing BEAT BioTherapeutics, aka BEATBio, believes it the cardiac cells? has a gene-therapy candidate, BB-R12, that could What clinical efficacy endpoints must the ther- greatly improve the quality of life for heart-fail- apy meet for regulatory approval, simply quality $2.5M ure (HF) patients. The therapy uses a “human- of life or survival? Are there practical concerns in April 2013: ized construct” or antibody as a vector to induce the medical care of heart-failure patients, espe- Seed-stage Investment cardiomyocytes (heart muscle) cells to express cially older ones, that would limit or affect use of led by CET an “optimized” form of ribonucleotide reduc- the therapy? The last concern has plagued older Capital Partners, tase, producing dATP (deoxyadenosine triphos- HF therapies. For example, infirmity can limit a with the W Fund, phate), a “superior” form of the cellular fuel ATP patient’s ability to answer the call of diuretics in others. (adenosine 5’-triphosphate). dATP appears to the middle of the night. Any medical procedure give an extra boost to the cells and thus improve can challenge such patients. Now raising the heart’s performance. BB-R12 is still in pre- When I attended BEATBio’s presentation at the Series A f nancing clinical studies, planned for a Phase 1 trial in BIO Investor Forum in October, I asked whether to complete early 2016. Most of its seed money will fund that pushing heart cells might exhaust already dam- IND (Investigational trial as well as development of the construct and aged heart muscles. CEO Michael Kranda’s answer New Drug)-enabling manufacturing scale-up. was that BB-R12 is “not driving a damaged heart,” studies and but using a self-regulating mechanism that boosts commence Phase 1 KEY MILESTONES healthy-cell performance as needed. Only healthy human trials. Demonstrated that BB-R12 restores ejection cardiomyocytes produce dATP as a result. fraction and overall cardiac performance in ani- Of course, in such a large potential space, mal models of heart failure and improves con- potential competition is strong. Big Pharma traction and relaxation in healthy and depressed companies have a number of candidates in line Research heart muscle cells following injury. No safety for HF. Other small companies, such as Juventas partnership issues identified to date. with its stem-cell therapy for advanced HF in funding Developed and manufactured a humanized Phase 2, are also vying for a place in the space. gene construct and scaled up manufacturing May the best MOA (mechanism of action) BEATBio’s founders, using a system licensed from the NIH. win, but other factors also count. To its credit, from the University Confirmed earlier rodent experiments using BEATBio has a seasoned team in place. Kranda of Washington, are the human construct. has both VC and company experience going all recognized experts in Completed a successful proof-of-concept study the way back to Immunex. The newly hired CMO cardiovascular biology, muscle physiology, and with the humanized construct in a large-animal has been tested by fire; Sam Teichman, M.D., was bioengineering and (swine) myocardial infarction/heart failure model. formerly at Cothera, developer of blood-vessel have received nearly Held a pre-IND meeting with the FDA and con- relaxer serelaxin, which had an application for $50M of NIH funding. firmed development plans and timeline to enter treating acute heart failure rejected by the FDA the clinic in early 2016. last May. l

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Logistics Providers Strive To Fulfill Biopharma Needs – Specialty

By K. Hammeke By Companies Offer Advantages, But Get A Bad Rap On Price

According to clinicaltrials.gov, there are over 92,000 drug or biologic registered studies under way right now. Nearly one-fifth (17 percent) of the drugs currently in development are biologic-based therapeutics.

ecause biological assets are panies. Among the group of respondents temperature sensitive, the who use both types of providers, special- B challenges in transport and ized providers received a little more of distribution are quite differ- their business (55 vs. 45 percent). ent from logistical obstacles faced by Respondents attribute on-time deliv- traditional, small molecule-based drugs. ery and flexibility in pickup and drop- Both global logistics giants (such as off times to both types of providers. FedEx and UPS) and a host of specialty However, logistics giants are best known logistics companies (such as Marken, for their convenience and affordability, KATE HAMMEKE World Courier) focused on the life sci- while specialty providers are associated Director of Marketing Intelligence ences industry have fine-tuned their with temperature-control options and Nice Insight offerings in order to meet the cold chain white-glove handling. Because partici- needs for biomaterials, such as clini- pants indicated they are more likely to cal trial samples, active pharmaceutical select a logistics company based on best ingredients, cell banks, tissue samples, fit for a project rather than price, the and more. added-value services available through With high stakes ranging from legal to specialty providers are likely to win the financial risk, it’s important to ensure companies’ new business. And — based that the logistics company engaged for on 97 percent of respondents who said the job is not the weakest link in the cold their logistics expenditure increased It’s important chain. Nice Insight asked 100 respon- or stayed the same last year — there is dents in charge of the handling and dis- more business to be had. Only 3 percent to ensure that the tribution of biological specimens or clin- thought it would decrease. logistics company ical trials materials their opinions and Real-time traceability for shipments preferences on shipping partners. When (63 percent) along with logistical loca- LOGISTICS PROVIDERS STRIVE TO FULFILL BIOPHARMA NEEDS – SPECIALTY COMPANIES OFFER ADVANTAGES, BUT GET A BAD RAP ON PRICE A BAD GET BUT ADVANTAGES, OFFER COMPANIES SPECIALTY – NEEDS BIOPHARMA FULFILL TO STRIVE PROVIDERS LOGISTICS engaged for the job it comes to overall preference, global tions (56 percent) and regulatory exper- is not the weakest link logistics companies such as FedEx, UPS, tise (54 percent) are the leading reasons in the cold chain. and DHL are favored over specialty com- for engaging a third party logistics pro- panies by a relatively slim margin (39 vs. vider for handling biomaterials. Twenty- 31 percent). Thirty percent of respon- four/seven customer service topped the dents stated they prefer to use a mix of list of the most sought after technologies both specialty and global logistic com- and/or services from logistics providers.

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Customer service is followed by more specialized services such as pharmaceu- tical lifecycle management, where stor- Figure1 Strategic Motivations For Engaging age, distribution, and reverse logistics Third Party Logistics Providers are all handled by the provider — an area

By K. Hammeke By where a specialty company has a clear advantage. Depot facilities that offer Real-time Traceability for Shipments 63% drug return and destruction services, as well as retest labeling for clinical trials Logistical Locations 56% materials, are additional areas where biopharma companies desire solutions Regulatory Expertise 54% that specialty companies are best posi- tioned to fulfill. Third Party System Separation 54% It’s not surprising that logistics giants are perceived to be more affordable than Mitigated Risk 41% specialty providers, or that price ranked fourth in importance, after quality, reli- Consolidated Buying Power 37% ability, and regulatory knowledge. Both of these statements — along with 49 per- cent of respondents stating they “select a logistics provider based on project best fit” when asked about pricing tolerance Figure2 Desired Technologies And Services — support use of a combination of global In Logistics Providers and specialty providers. Thus, it is inter- esting and somewhat conflicting to see that price came in as the top reason buy- 24/7 Customer Service 64% ers would consider switching from their current supplier. Pharmaceutical Lifecycle Management 58% While global companies continue to fine-tune their offerings in order to remain Customized Solutions 52% top of mind among customers in the life sciences market, it will be interesting to Improved Track and Traceability 52% see whether these companies are able to develop the same quality of service for life Depot Facilities that Offer Drug Return and Destruction Services 50% sciences’ specialized needs and keep their reputation for being more affordable. L Single Supplier to Maintain Entire Clinical Supply Chain 41% Reduce Costs Associated with Transportation, Warehousing, and Supply Chain Management 41% Preclearance at Customs / Prepayment of Tariffs and Taxes 40% Cold Chain Sustainability Improvements 31% Primary and/or Secondary Packaging Services 20%

LOGISTICS PROVIDERS STRIVE TO FULFILL BIOPHARMA NEEDS – SPECIALTY COMPANIES OFFER ADVANTAGES, BUT GET A BAD RAP ON PRICE A BAD GET BUT ADVANTAGES, OFFER COMPANIES SPECIALTY – NEEDS BIOPHARMA FULFILL TO STRIVE PROVIDERS LOGISTICS N. WALKER

If you want to learn more about the report or how to participate, please contact Nigel Walker, managing director, or Kate Hammeke, director Survey Methodology: Nice Insight conducted a supply chain survey targeting 100 supply chain decision of marketing intelligence, at Nice Insight by makers. The survey was comprised of 30 questions geared toward understanding current supply chain needs and practices, present and future expectations from logistics providers, and which services and traits infl uence sending an email to [email protected] or provider selection. [email protected].

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The Biosimilars Opportunity: 4 Years Of Waiting By E. Langer By

biobetters. In our studies, we outline that THE U.S. MARKET TAKES SHAPE only a percentage of these will make it to The U.S. will most likely still be the domi- the market. nant biosimilar consumer market. Even Of interest are questions about how compared to the EU, the U.S. has a large expensive biosimilars will be, how they population and an insurer base moti- will be marketed, and whether more effi- vated by cheaper biosimilars. It’s there- cient (cheaper) manufacturing for bio- fore likely that the U.S. will become very similars could ultimately improve bio- competitive and perhaps overcrowded, manufacturing for all products. Other as dozens of new and established com- ERIC LANGER unanswered questions include concerns panies jockey for market share. Profit President and Managing Partner regarding the extent of competition. As margins may be driven down as a result. BioPlan Associates, Inc. new industry entrants emerge, some Despite this, the U.S. biosimilars oppor- will be more concerned with getting U.S. tunity is attractive. Indeed, as the chart THE BIOSIMILARS OPPORTUNITY: 4 YEARS OF WAITING OF YEARS 4 BIOSIMILARS OPPORTUNITY: THE approvals than with actual revenues and on page 22 shows, biosimilars will soon profits. This may result in disruptive be able to compete with reference prod- pricing that could affect other areas of ucts that boast cumulative annual rev- iosimilars have been approv- biologics as well. enue of roughly $100 billion. able in the U.S. since the 2010 passage of biosimilars- EXPECT MORE SMALLER PLAYERS KEY BIOSIMILARS TRENDS enabling legislation. However, TO ENTER THE MARKET Biosimilars Will Not Expand Product no product applications have There are some undisputed trends accom- Markets: The number of companies, been approved. A few have been filed, panying the growth of biosimilars. We manufacturing activity, and products but the industry largely remains on hold can expect many new companies to this that form the follow-on product market as the FDA waits to release needed guid- industry of all sizes and types — including will most likely not expand the market’s ance. Now, even the U.S. Senate is push- generic drug and foreign companies. We overall value, and may instead contract ing the FDA to release guidance docu- will find emerging geographies seeking to it. Biopharmaceuticals are a zero-sum ments on biosimilar drug approvals. A establish themselves in the mainstream market. Making them a little cheaper group of senators in August wrote the biopharmaceutical industry via a biosimi- will not expand their use. Biosimilars HHS (Department of Health and Human lars route. This will continue as the indus- will maintain a constant number of units Services) about the implementation try matures and more products come off sold, but will reduce the combined sales of the Biologics Price Competition and patent. value for reference products and their Innovation Act (BPCIA), enacted to push For many biosimilar/biobetter devel- biosimilar versions. This overall market the FDA to develop a framework to review opers, profits or capturing market share tightening (in dollar terms) can readily be and approve biosimilars. This delay has in major markets such as the U.S. and seen with generic small molecule drugs, heightened concerns about just exactly EU might not be a primary goal. Instead, where deeply discounted generic prod- how biosimilars will affect patients, insur- it’s likely that they’ll view U.S. product ucts can capture up to 90 percent market ers, drug companies, and even suppliers. approval — even if just for a biosimilar — as share in a matter of weeks. Biosimilars BioPlan has evaluated this industry for validation, and regulatory acceptance are expected to be discounted to a lesser over 25 years, and out of the roughly 4,500 of that product for sales in lesser- degree (≤30 percent) than generics, but biopharmaceutical candidate products in regulated markets around the world. a similar market dynamic will likely the pipeline, around 20 percent (approxi- These entrants may also see gains in com- play out. Expect to see the number of mately 900) are follow-on biopharmaceu- pany valuations, after U.S. or EU product players increase as markets become ticals, mostly biosimilars (>500), but also approval. more fragmented.

20 NOVEMBER 2014 LIFESCIENCELEADER.COM DPx Holdings B.V. acquires Gallus BioPharmaceuticals

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Biosimilars Will Be A Boon For CMOs: ciency will also affect manufacturers Expect more established regulations, CMOs are among the major beneficiaries of future reference products. As better definitions, and standards for biosimilars of the new wave of biosimilars and biobet- production technologies emerge, they and “biosimilarity”; ters, with many already seeing increased will first improve new biological product Expect bioprocess tweaks allowing for demand across a range of activities, from manufacturing. That is, advanced bio- fine-tuning of biosimilars to match inno- bioprocess development to scale-up and processing technologies will first provide vator biologics; and manufacture of preclinical and clinical advantages to makers of these newer Expect more quality by design (QbD) By E. Langer By supplies. Some CMOs are reporting over- follow-on products, As such, we can and design of experiments (DoE) for all all business increases of 15 percent due to expect biosimilars and biobetters to be products including biosimilars. biosimilars contracts. These opportuni- factors in the pioneering of many new To those trends we also add that many ties will continue for CMOs. Established technologies, such as better analyti- current developers face challenges in the drug innovators will prefer to devote lim- cal methods, improved expression sys- short term. Many companies are already ited in-house capacity to newer, higher- tems, single-use systems, alternatives to far ahead, and the competition will be profit products. CMOs will manufacture Protein A, and other conventional chro- fierce as many seek to market the same their biosimilars and biobetter products. matography processing. product to a limited pool. Overall, the Analyses contained in our 11th Annual In a recent survey among BioPlan’s coming wave of biosimilars and biobet- Report and Survey of Biopharmaceutical Biotechnology Industry Council™, our ters will bring big changes to the market, Manufacturers suggest that 40 percent or 425 global subject matter experts identi- enhancing the role of the CMO, expand- more of biosimilars and biobetters could fied the following micro-trends in the ing the number of players in the global be manufactured by CMOs. biosimilars market: market, and spurring breakthrough new The New Wave Of Biosimilars Will Expect more models and analytical technologies. Our upcoming studies will Spur Innovation: To remain competi- methods for demonstrating biosimilarity provide global subject matter review of tive as biosimilars and biobetters evolve, and biochemical or biophysical charac- these trends and their impact on global product developers and manufacturers terization; biopharmaceutical markets. L THE BIOSIMILARS OPPORTUNITY: 4 YEARS OF WAITING OF YEARS 4 BIOSIMILARS OPPORTUNITY: THE will need better ways to cut down on time to market and streamline the overall test- ing process. The industry is demanding Figure1 U.S. Biosimilars Launchable Dates 2012-2013, higher productivity and lower manufac- By Current Reference Product Sales ($Million) turing costs, and many players are look- ing to industry suppliers for the inno- $30,000 27,870 vations to advance analytical studies, clinical testing, and other technologies $25,000 22,653 needed to support biosimilar approvals and production. $20,000 17,757 Cost-Effective Biomanufacturing: $15,000 13,172 Biosimilars developers will need to 11,997 10,483 adopt the most cost-effective manufac- 10,255 9,645 $10,000 turing technologies just to be able to 6,764 compete. Expect widespread adoption 3,691 $5,000 2,372 of newer, advanced expression systems and improved disposable upstream and $0 downstream bioprocessing systems. In ≤2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ≤2022 general, developers are not looking to Bars represent the total dollar estimated sales ($millions) by year for all U.S. reference biologics potentially reverse-engineer and mirror reference producible as biosimilars. This data implies total market potential for biosimilars, based on when specif c U.S. biololgics become available for biosimilar production. products’ legacy manufacturing methods developed decades ago. Rather, biosimi- Source: 11th Annual Report and Survey of Biopharmaceutical Manufacturers, April 2014, lars developers are already using some www.bioplanassociates.com/11th of the newest and most improved biopro- cessing methods. These are expected to Survey Methodology: The 2014 Eleventh Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and improve processing and lower manufac- Production yields a composite view and trend analysis from 238 responsible individuals at biopharmaceutical manufac- turing costs. turers and contract manufacturing organizations (CMOs) in 31 countries. The methodology also included over 173 direct suppliers of materials, services, and equipment to this industry. This year’s study covers such issues as: new product needs, facility budget changes, current capacity, future capacity constraints, expansions, use of disposables, trends and budgets SUMMARY in disposables, trends in downstream purifi cation, quality management and control, hiring issues, and employment. The quantitative trend analysis provides details and comparisons of production by biotherapeutic developers and CMOs. It also These trends toward production effi- evaluates trends over time and assesses differences in the world’s major markets in the U.S. and Europe.

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GLAXOSMITHKLINE REFOCUSING, RESHAPING ONCOLOGY R&D

WAYNE KOBERSTEIN

GLAXOSMITHKLINE — REFOCUSING, RESHAPING ONCOLOGY R&D By W. Koberstein W. By R&D ONCOLOGY RESHAPING REFOCUSING, — GLAXOSMITHKLINE Executive Editor

oon after my first conversa- lines to grasp GSK’s full intentions. The company’s bonus program for dis- tions with GlaxoSmithKline Essentially the company is refocusing its covery scientists, giving a small incentive about interviewing its head of oncology R&D, all the while continuing to at proof-of-concept and a bigger payment pharma R&D, the news hit. In a reshape the entire pharma R&D organiza- at approval, turned out to be a good sur- mega-swap of product lines tion. The leader in charge of the transi- rogate marker for the new-drug surge. Swith another global pharma giant, GSK tion is Dr. Patrick Vallance, president of “Medicines can fail at any stage, so we gave up its entire commercial oncology Pharmaceuticals R&D. A former academic didn’t want to give big rewards at the end portfolio to Novartis in exchange for the researcher, Vallance headed drug discov- of Phase 2a; we wanted to signal there Swiss company’s vaccine line; at the same ery before taking on the entire pharma was a big reward to be given at that point, time, the two companies combined their R&D unit in 2012. which would come when the medicine consumer health units into a single busi- Thus he has witnessed the good, bad, becomes a medicine, and we paid up on ness with GSK as the majority owner. and the less-than-pretty results coming that promise with the product approvals,” Oncology was no small part of its drug from the organization during his eight says Vallance. division at the time, accounting for about years with the company. After a compara- Those successes, however, have not 4 percent (about $1.5 billion) of phar- tive dry spell, GSK staged a recovery in stopped the R&D transformation already maceutical revenues before the Novartis drug development in recent years, with under way — and, in fact, the new prod- deal. six new drugs entering the market since ucts are more reflective of the company’s Early on, it took reading past the head- 2012. past than predictive of its future direc-

24 NOVEMBER 2014 LIFESCIENCELEADER.COM DR. PATRICK VALLANCE President of Pharmaceuticals R&D at GlaxoSmithKline

LIFESCIENCELEADER.COM NOVEMBER 2014 25 leaders EXCLUSIVE LIFE SCIENCE FEATURE

tion in drug development. All of the affirmation and optimization of the orga- it leads to a question: What is the depth recent approvals are in GSK’s established nization he would head. He was well along of understanding underpinning every market areas, mirroring their relatively in an academic career at University College project?” That thought became his mis- broad focus: COPD/asthma, diabetes, London, when he met GSK’s then head of sion: finding a way to increase scientific HIV, and cancer (melanoma), with the R&D, Tadataka (Tachi) Yamada, and subse- understanding of drug mechanisms and two molecular-pathway targeted drugs in quently answered Yamada’s invitation to drug interaction with the human body, the last category joining the exodus to join the company in May 2006. so the company might focus on fewer Novartis. GSK’s current pipeline reveals “If you’d asked me the day before I projects in greater depth. that the company, not unlike most of its decided to move to GSK, I would have said Vallance saw a potential opportunity in competitors, is heading into niche-drug I absolutely had no intention of moving the industrial setting to create an advan- territories, driven and guided by a careful to industry,” he recalls. “I was a clini- tage that eluded the academic world. At reading of scientific opportunities and the cal academic. I saw patients. I ran a big its best, GSK allowed all the different R&D reimbursement landscape. department. I knew my next job would be disciplines — chemistry, biology, biophar- At the same time, as heralded by running the medical school. I had been on maceuticals, and so on — to interact in Chairman Andrew Witty, GSK will seek the research advisory board for GSK for “an incredibly fluid way,” he says. “Getting to lead the industry in the trend toward a couple of years, which was eye-open- all of those elements together to work as sharply reduced R&D budgets, attendant ing for me both scientifically and in the an integrated, multidisciplinary team is cost-cutting, and collaborations with all way people thought about treating major frankly the dream of a lot of people in aca- sorts of research entities in the quest for medical problems.” demia, but it only seldom works.” Again, biotech-like innovation — without, of After an advisory board meeting in over time he looked for a way to make the course, incurring the usual, though oft- London, Yamada asked Vallance to head concept even more effective in practice. ignored high failure rates of the startup GSK’s drug discovery. Resisting the offer During the six years following his move biotech sector. To reduce the risk of dupli- at first, Vallance later thought, “I could to GSK, Vallance rose from head of drug cating the darker side of entrepreneurial spend the rest of my career doing aca- discovery to senior vice president of medi- biopharma, the company aims to make demic research that might lead to drugs cines discovery and development, help-

GLAXOSMITHKLINE — REFOCUSING, RESHAPING ONCOLOGY R&D By W. Koberstein W. By R&D ONCOLOGY RESHAPING REFOCUSING, — GLAXOSMITHKLINE the best possible use of its natural assets, or even, as I was doing at the time, making ing plan and implement the first major the “platforms” of drug discovery, devel- molecules that interfere with biological R&D reforms driven by Witty and Moncef opment, and commercialization that only processes — or I could go and do the real Slaoui, now chairman, Global R&D & a Big Pharma like GSK can maintain. thing, seeing molecules all the way to Vaccines. Those reforms began in dis- becoming medicines. This looked like a covery, involving the creation in 2008 of REPRODUCIBLE, RESILIENT, AND REAL really big, interesting career change, and about 40 teams, consisting of 40 to 60 It is useful to know how and why Vallance I decided to do it. It was a decision with members, called Discovery Performance joined the company, because his responsi- no great planning or logic behind it and Units (DPUs), out of the six former dis- bility ultimately came to encompass both one that I have never regretted for a single ease-area units. The DPUs were designed second since then.” to integrate disciplines even more effec- His initial revelations at the company tively than did the preexisting company were mainly positive: “One of the things culture. They were also to echo a new that struck me was the outstanding qual- “open-research” philosophy of external ity of the science that goes on and the collaboration, by re-creating start-up-style attention to data reproducibility and innovation internally. integrity, a huge issue in many academic When Vallance was appointed head of sectors and in the published literature. Pharmaceuticals R&D in January 2012, The dedication to more reproducible he continued to lead reforms reaching We had to assays was very impressive. It was impor- past discovery through all the stages of reintroduce personal tant for me to get to grips with what it drug development. But in addition to the means to have robust and reproducible internal restructuring, GSK also began accountability and data at this scale of R&D.” a campaign to shift much of the R&D individual leadership. Scale itself — the industrial scale of dis- burden and risk to a massive external covery and development activities at the network of companies and institutions. DR. PATRICK VALLANCE company — also impressed Vallance, and Overall, Vallance believes the organiza- President of Pharmaceuticals R&D at the same time led him to ponder an tional changes have reinforced a more GlaxoSmithKline inherent conundrum in the large-pharma bottom-up, scientifically driven approach model. “The number of projects is big, and to new drug development, moving the of course, that’s good in one sense. But company away from the old top-down,

26 NOVEMBER 2014 LIFESCIENCELEADER.COM LYNN MARKS: ACCELERATING GSK’S R&D INNOVATION

market-driven paradigm that held sway Reporting to Patrick Vallance, GSK’s head of phar- “Our goal was ‘55 in Five,’ or introducing 55 new for so long in the industry. ma R&D, Lynn Marks is a senior vice-president in therapeutic area standards in five years. We “We now have the freedom to discover charge of a group called Projects Clinical Platforms didn’t want to re-create something that was and Sciences (PCPS). His group’s responsibilities already in place but rather get our resources on the basis of science, which makes it cover the conduct of all of the Pharma R&D Phase aligned and make clinical development move possible to make surprising new discover- 1 through Phase 4 clinical trials, with rare excep- faster and more efficiently.” ies rather than the ones we wished and tions. PCPS has a staff in more than 40 countries The obvious and oft-asked question about expected to discover. You have to build and is one of the company’s “platform” organi- TransCelerate is why collaborate with a set of new medicines from what is scientifically zations. In addition to clinical trial operations, companies that are otherwise competitors in credible, rather than go where you see its functions include business IT support pro- the industry? Marks describes the dynamics simply a big market. Of course, the sci- vided by a PCPS subgroup, Business Planning and of collaboration. “We are fiercely competitive, Performance. In parallel to PCPS, a closely related and we have to be ever-conscious of anti-trust entific line must be linked to a vision of nonclinical platform group covers clinical trials issues, so we make sure we’re clear of all that by patient need, but if you are completely drug formulation and supply. Marks also sponsors having active involvement from our colleagues focused on the market from day one, you the company’s “Simplifying Clinical Development in Legal. We look for areas where we want to close things down — and if you start by Change Initiative” and is corporate secretary for advance something and believe, as a group, if aiming at where you see the biggest dol- TransCelerate Biopharma, the trans-company col- we work together, we can actually advance it lar sign, you will end up in a weird place laboration to improve efficiency and productivity faster. Good clinical practice training was one in clinical development. example in which we could make the lives of scientifically and medically.” “All of the companies in this industry realized our investigators around the world simpler. We five to 10 years ago that they were spending way decided to train them with an agreed set of THE TRACK OF CHANGES too much money for the deliverables of a new fundamentals on good clinical practices, which As the mechanics of GSK’s R&D reorgani- medicine launched into the world,” says Marks. each of us would have done independently and zation continued to evolve, all the related “All the change initiatives that companies did — redundantly in the past.” TransCelerate is also efforts conformed to the two key prin- we called ours Simplifying Clinical Development working to build an electronic portal through ciples employed by the DPUs, according — was to look at ways to reduce costs, increase which all 19 companies would communicate quality, boost efficiency, and simplify the pro- with investigators globally. to Vallance — personal accountability and cesses across clinical development. So we put Comparator drugs for clinical research is openness to external collaboration. Both our program in place about five years ago, and we another area the group took on — to the surprise principles were reflected in progressive have tracked the magnitude of savings and moni- of doubters, Marks adds. “In the old world, if structural changes. tor the quality of our trials.” we wanted to run a clinical trial using another “We had to reintroduce personal Having accomplished its mission, with projected company’s marketed product, we would often accountability and individual leadership savings of “hundreds of millions of pounds across go through a third party that would buy it in so that we didn’t end up with everything that time frame,” the initiative comes to an end various countries and ship it to us. Now we have later this year. But Marks says initiatives such multiple agreements among companies to buy being a total team effort and nobody as Simplifying Clinical Development also helped directly from each other, so we know the pedi- really taking accountability for projects,” spark the thinking that led Global R&D Chief gree and the characteristics of the product and he says. Personal accountability called Moncef Slaoui, along with Patrick Vallance and can ensure a high-quality, reliable source of the for smaller, integrated teams. It was not other industry R&D leaders, to begin building what clinical trial material. I am particularly proud of always as painless as it sounds. Teams turned out to be TransCelerate Biopharma — and the team for this because many people thought that underperformed were cut, with their attract 18 other, mainly midsize and large pharma we couldn’t do it.” companies into the not-for-profit collaboration This industry “League of Nations” gives new funds, and often their personnel shifted to to date. Marks worked with R&D executives from meaning to the popular term “partnering.” No new teams. Some long-term people pros- other companies to get TransCelerate up and run- longer is a partner just a license holder or pered; others found themselves demoted ning, initially chaired the operations committee, trusted supplier; now the term may apply to a or worse. and now serves as secretary of the organization. lengthening list of collaborations, including the With the startup of the DPUs, the com- “Dr. Slaoui was very keen on the idea that we “precompetitive” tide that lifts all boats. pany eliminated some therapeutic areas could work in collaboration in a precompetitive “The space of where we can go is only lim- in R&D, such as some late-stage neurosci- way on how to increase quality, decrease costs, ited by our imagination and our appetite for and increase efficiency in the clinical develop- precompetitive collaboration as an industry,” ence work, and reportedly made around ment space. So I was brought in very early in Marks says. As an infectious disease special- 3,000 R&D-related job cuts worldwide. those conversations in regard to how my organi- ist, he sees antibacterials as a key example Besides respiratory, the company’s largest zation could participate,” he says. that such cooperation can have a big impact. market area, GSK’s current pharmaceuti- One area TransCelerate took on was data stan- “It is one of those areas in which we will have cal pipeline lists candidates in oncology, dards, with CDISC, a dictionary of terms associ- to call on the collective leadership of govern- respiratory, cardiovascular/metabolic, ated with therapeutic standards that all member ment, academia, and industry, and we will immuno-inflammation, infectious dis- companies use when they report their infor- have to break down the barriers across com- mation into regulatory agencies. The member panies to improve our response to the growing eases, ophthalmology, neuroscience, and companies have since put additional resources threat of antimicrobial resistance. How can we various rare diseases. DPUs are also sub- into CDISC to accelerate the development of advance that kind of collaboration across the ject to periodic pruning. In 2012, following therapeutic standards, according to Vallance. industry collectively?” a review of all DPUs, the company cut

LIFESCIENCELEADER.COM NOVEMBER 2014 27 leaders EXCLUSIVE LIFE SCIENCE FEATURE

three of the units, reduced funding on five, bursement planning, and other resources He says the oncology situation illustrates and raised funding on six. tasked with supporting the small R&D another principle that Andrew Witty has Thus, it is apparent DPUs compete for units. “The platforms exist to support the advocated: “We will discover what we dis- budgets and must manage their finances projects and not the other way around,” cover, and we will develop the medicines like an independent company. They are he says with emphasis, highlighting a role we want to develop. We won’t always be judged on their outputs by a panel that reversal from the industry’s traditional the right company to commercialize a includes external advisers as well as inter- platforms-drive-research paradigm. product, but we must be sure to apply our nal experts from R&D. “The change to focus and our size appropriately.” Such DPUs has been an extremely successful A NEW FOCUS ON ONCOLOGY a flexible strategy seems well-suited to path for us,” says Vallance. “It has cre- Six years into GSK’s R&D restructuring, the small-team, entrepreneurial approach ated what I call integrated drug discovery. another earthshaking change now comes of DPUs and MDTs, where risk may be When I joined GSK, most discovery people to challenge, or perhaps liberate, the orga- more quickly recognized and, hopefully, were either running a chemistry line, a nization. As proposed, the Novartis deal mitigated. biology line, or a clinical development proj- redraws the landscape of therapeutic So is GSK starting over in a totally dif- ect. What the DPUs have done is create areas and destinations in GSK’s pipeline. ferent way with oncology? “That is exact- individuals who run virtual biotechs. The As of press time, the regulatory process ly what we are doing,” Vallance replies. units have been very successful in the inte- is still unfolding and it is too soon to “Immuno-oncology and epigenetics are gration of disciplines and progression of describe the agreement as final, but the likely to require greatly different develop- projects in a focused way, rather than a reli- general outlines are clear: GSK’s vaccine ment tools and a different way of think- ance on the volume or number of projects.” business, separate from the pharma unit, ing about development, and exploring the Receiving the nascent medicines from will of course grow larger, but the entire new areas gives us an opportunity to do the DPUs are Medicines Development commercial line of cancer drugs will go to just that. Increasingly, one gets drawn into Teams (MDTs), which take responsibil- the other company. more and more combinations of thera- ity for getting the surviving product can- Aside from the corporate impacts on peutics with a variation of MOAs (mecha- didates through late-stage development. critical mass and market portfolios, the nisms of action). This gives us a chance to

GLAXOSMITHKLINE — REFOCUSING, RESHAPING ONCOLOGY R&D By W. Koberstein W. By R&D ONCOLOGY RESHAPING REFOCUSING, — GLAXOSMITHKLINE Even smaller than the DPUs, the MDTs deal’s effects on R&D may be dramatic. rethink things. No one knows yet exactly each own an individual project in the late- In oncology, the organization will no lon- how to develop an immunotherapy or epi- stage pipeline with “a lot of accountability, ger focus on postmarket development but genetics drug. We don’t even know yet how a lot of ability to do things the way they must realign to an early development, pio- we should be thinking about the ways to want to do them, and a lot of team respon- neering mode in epigenetics and immuno- deliver the drugs, what the safety profiles sibility for results,” Vallance says. oncology. Why does the company want should be, and so on. All of it will require a On an even wider scale than the inter- to abandon even a nominally successful whole new look at the organization.” nal reorganization, the externalization of product line to chase after therapeutic Some of the products in GSK’s pipe- research has brought extensive restruc- approaches still as unproven as they are line may initially target rare diseases or turing affecting several thousand more far-reaching? narrow indications, yet turn out to be jobs and careers. The company saw the Vallance explains that, despite having applicable to much broader treatments. strategic changes as necessary to break a good track record in oncology discov- In immuno-oncology, certain MOAs now the ice jam holding back pharma R&D ery, GSK ranked only about 15 in cancer in testing seem to work equally well in productivity for GSK specifically and the drug sales, and though it might aspire many different kinds of common tumors industry in general — in any case, forcing to the top 10, it would likely never reach as conventionally defined, by organ. the large companies to obtain most of 1 or 2. Moreover, the drugs the company (See also Part 3 of "Combination Cancer their winning new drugs from the entre- had commercialized would continue to Immunotherapy — A Virtual Roundtable,” preneurial sector. “Underpinning every- demand more and more support with on page 36.) thing are strategies to diversify through expensive postmarketing studies. Vallance gives an example in another business development and increasingly “The deal allows us to go back and focus area, an ex-vivo stem-cell/gene therapy in through links in academia,” says Vallance. on the earlier areas that have excited us, Phase 3 for a rare, fatal childhood dis- In Vallance’s view, the final leaf in the epigenetics and immuno-oncology, to ease called adenosine deaminase severe table, ace in the hole, winning play, or make sure that we really invest in those combined immunodeficiency (ADA-SCID). what-have-you is the leverage of using the properly. If all goes well, they will become Although the disease is extremely rare, unique platforms a Big Pharma brings to anchor areas for the next wave of prod- the therapeutic mode has far-reaching the table — small molecule and/or bio- ucts in the pipeline, which at some point implications, he says. “Cell/gene therapy is pharmaceutical production, clinical trials will take us back into oncology commer- where we need to be because it allows us to management in multiple countries, a high- cially or make us partner of choice for really understand how to apply a new tech- quality regulatory organization, reim- Novartis or another company.” nology. We may ultimately have broader

28 NOVEMBER 2014 LIFESCIENCELEADER.COM applications to much more common dis- and the whole thing is milestone-driven. eases. That’s exactly the question going on They get the keys to GSK, they get a top- at the moment in oncology, and it places class team on their project, and they can an emphasis on epigenetics — whether publish everything.” If a project must end Medicines can immunotherapies will also become frag- because of technical roadblocks, the aca- fail at any stage, so mented as we realize that patient popula- demic partners can keep the data and we didn’t want to give tions respond very differently depending continue to work on the idea with another on their epigenetic profile.” academic or company partner. big rewards at the end If by some circumstance the Novartis “The DPAc program has formed a series of Phase 2a; we wanted deal does not play out as planned, GSK’s of virtual biotechs across the globe, the intentions in oncology will be nonethe- most advanced of which is now in Phase 3, to signal there was a less revealed. It will, by one measure or and it has worked really well as a system,” big reward to be given another, pivot its R&D focus from older Vallance attests. “We now have an office in at that point, which cancer drugs and MOAs to the cutting San Diego where we’re forming more such edge of cancer therapy, based on the solid, alliances. We’ve done partnerships with would come when the but always shifting, ground of scientific groups like Avalon Ventures to create new medicine becomes understanding. venture partnerships with academics, and a medicine. we have opened a new space in Boston. DISTRIBUTING RESEARCH The program is about making links with DR. PATRICK VALLANCE One aspect of R&D the Novartis deal does academics rather than putting up big new President of Pharmaceuticals R&D not change, at least in direction, is GSK’s laboratories. In fact, we believe that the GlaxoSmithKline externalization strategy. To the extent brick-and-mortar facilities tend to end up that the pharma R&D organization feeds being fortresses rather than places where the Rx-to-OTC pipeline, it will gain global true collaborations occur.” scale and strength from the ex-Novar- tis consumer business. But the deal will LONG ROAD, STEADY CLIMB not impede the growth of GSK’s world- GSK has now traveled quite a distance wide collaborations with companies and in reforming the R&D organization — academics. Other initiatives, such as far enough, in fact, to have tracked and the way the returns are going, looking the Oncology Clinical and Translational measured the payoff in improved perfor- long term. I believe we’ll stay with that Consortium (OCTC), an international, col- mance. Every year, the group publishes strategic approach.” laborative research network of six major its internal rate of return, comparing it Many years ago, a young writer/edi- cancer centers, will also continue unabat- to a target rate of 14 percent. The rate tor waited for hours in a hot room out- ed. (See “Lynn Marks: Accelerating GSK’s has climbed about one percentage point side the chairman’s London office. The R&D Innovation” on page 27.) per year since 2010 to reach 13 percent company was Wellcome; the chairman, Summed up, the combination of entre- in 2013. The period fairly well conforms Sir Alfred Shepperd. On another day, preneurial internal teams and external to the time when most of the reforms the same journalist sat in SmithKline partners builds on a distributed research took effect while sales fell, so, objectively, Beecham’s London-suburb headquarters model. “What we won’t do is build the evidence suggests the reorganization speaking with CEO Jan Leschly, and on more brick-and-mortar innovation cen- is working. another, in North Carolina’s Research ters across the globe. But we are forg- The company appears to be alone in Triangle Park with Ernst Mario, CEO of ing strong alliances with biotech and, all revealing its return on R&D. In an industry Glaxo. All of those companies and more importantly, with academia worldwide. dominated these days by real-time stock became the components melded into We have some interesting ways of attract- trading, the multiyear measurement alone GlaxoSmithKline over a long journey of ing academics leading research in our may set GSK apart from its market-jittery many steps. areas of interest.” peers. GSK faces another long road ahead as Discovery Partnerships in Academia “One of the principles that is critical it continues to tweak and put its new (DPAc) is a global program that builds for R&D is to stay true to an approach R&D structure to the test. Execution virtual companies around selected ideas long term,” says Vallance. “The tendency will prove more important than theory. submitted by academic scientists or labs to change bets every couple of years in At every level of implementation, from based on preclinical or early clinical a business where it takes 10 years or 15 the DPUs to the partners and suppli- results. “We place a senior drug discov- years to develop a drug is terribly counter- ers, the returns will rise or fall on the erer from GSK with the academic, agree productive, so we are very happy with the choices the company and its leaders that together we will make a medicine, overall structure we have built and with make with every step. L

LIFESCIENCELEADER.COM NOVEMBER 2014 29 leaders EXCLUSIVE LIFE SCIENCE FEATURE HOW TO BUILD REAL PATIENT-CENTERED PHARMACEUTICAL COMPANIES By R. WRight R. By COMPANIES PHARMACEUTICAL PATIENT-CENTERED REAL BUILD TO HOW

30 NOVEMBER 2014 LIFESCIENCELEADER.COM HOW TO BUILD REAL PATIENT-CENTERED PHARMACEUTICAL COMPANIES

ROB WRIGHT Chief Editor

With such a focus these days on buzzwords such as "patient-centric," "patient-cen- tered," and "patient-centricity," some people are predicting “patient engagement” to be the next big movement in our industry, much as blockbuster drugs were a decade or more ago. But while improving patient engagement sounds fairly straightforward for those who directly interact with patients (e.g., doctors, nurses, nurse practitioners, and physicians assistants), for the biopharmaceutical industry, successfully executing this concept has been — and continues to be — much more challenging.

LIFESCIENCELEADER.COM NOVEMBER 2014 31 The EXCLUSIVE LIFE SCIENCE FEATURE leaders Disappointment Of Clinical Outsourcing

f achieving patient-centricity is “As you're talking to people about how Jamie Heywood, the cofounder and chair- biopharma’s Holy Grail, I thought to do clinical research,” Jamie Heywood man of PatientsLikeMe, is disappointed with I would seek some insight on this analogizes, “it is as if Moses came down how clinical trials are outsourced today. He topic from the leadership team of a from Mount Sinai with a third tablet that says that although CROs have done a great job optimizing the processes surrounding business built on serving patients. said, 'Thou shalt only do a double-blind I trials, the sponsors have done little more Founded in 2004, PatientsLikeMe, a for- placebo-controlled trial and believe only than tweak some of the parameters that profit company built on the principle of the evidence from that.'” This mental- have always been in place. “We've basi- patient engagement, has grown from a ity creates a number of problems. “The cally committed to a trial model that was single online community for ALS patients purpose of blinding a study is to elimi- designed 20 years ago, outsourced every- to a business covering 2,300 health con- nate biases,” he shares. “Because blinding thing according to that model’s specifications, ditions gathering real-time data from is the only approach many researchers and then built an entire optimization system 300,000 members. have ever known, and, therefore, the only to drive down costs. But during all of this, we’ve stopped thinking about what a trial In the company’s bustling, brownstone evidence which they will ever believe, is for.” headquarters in Cambridge, MA, I was they are less open to considering new Heywood believes patients and diseases joined by Jamie Heywood, cofounder ways of conducting clinical research.” For need “continuous measurement improve- and chairman; Ben Heywood, cofounder example, PatientsLikeMe has developed ment.” “Pharma needs to enable continual and president; and Martin Coulter, CEO. an ALS predictive model that Jamie says collection of increasingly meaningful infor- Together, they shared with me their per- is so accurate it is conceivable to conduct mation about patient experiences. Doing so spectives on why biopharma companies a clinical trial without a placebo. “It’s now will help improve measurement and drive struggle when it comes to engaging with been validated in multiple publications,” better decision making,” he says. He also believes pharma should invest accordingly. patients, as well as what companies can he states. “If you can determine whether “If you're not spending significantly to opti- do to become more patient-centered. a drug makes a difference against pre- mize how you measure a disease, then don’t diction instead of placebo, this is really complain about the billion-dollar price tag of WHY DOES PHARMA STRUGGLE WHEN neat because you can do what might be drug development,” he comments. Instead, SEEKING TO ENGAGE PATIENTS? an 80- or 100-person trial with just 25 or broadly engage as partners with the patient While being highly regulated or culturally 30 people. That's dramatic cost savings community so you can collaboratively improve conservative are most likely contributing and you can do more dose ranges for the measures, target patients more effectively, and ultimately reduce clinical trial costs. HOW TO BUILD REAL PATIENT-CENTERED PHARMACEUTICAL COMPANIES By R. Wright R. By COMPANIES PHARMACEUTICAL PATIENT-CENTERED REAL BUILD TO HOW factors to biopharma’s patient-engage- same money.” Jamie believes that being ment struggles, to understand being able to conduct a clinical trial against patient-centered as a strategic solution, prediction versus placebo could not only the PatientsLikeMe execs suggest you go be cheaper but also better and faster to creating a relationship where the patient to the root of the problem — the deeply market. Though the rules of clinical drug is an equal partner similar to your other infused cultural rules of clinical research. trials are constantly being revised and business partnerships. “In a partnership rewritten, testing against prediction is with a biotech or a clinical research com- not considered a viable option. Patients pany, you're not sitting there at the end, desperate for solutions are willing to try saying, ‘Hey, you patient, help me out here just about anything. As such, they want so I can make this medicine that makes researchers open to trying new solutions, your disease better that you may or may not ones blinded by their own biases. not be able to buy from me in the future,’” As that world changes and the Although the PatientsLikeMe team says Jamie. “That's not a partnership. physician channel is going away, admits the present way in which clini- That's a subject relationship.” there’s this realization of needing cal trials are conducted is adequate for Another reason why biopharma has the purpose of getting a drug approved, struggled with patient engagement is to develop a different model for they contend it is not at all patient-cen- that the industry has relied on one-way establishing a relationship tered. “Medicine and clinical research are communication that often includes only with patients. very paternalistic fields that have large- mass media and the healthcare provider. ly regarded patients as subjects which “As that world changes and the physician perform best when they are adherent, channel is going away, there’s this real- compliant, unquestioning followers of ization of needing to develop a different MARTIN COULTER the rules,” says Jamie. This attitude is model for establishing a relationship with CEO of PatientsLikeMe not conducive to creating a relationship patients,” says Coulter. “But there's a lack between patient and researcher, and of infrastructure, experience, and under- subsequently, patient and biopharma. standing as to how to do this effectively.” To achieve patient-centricity requires Ben Heywood adds, “The first instinct

32 NOVEMBER 2014 LIFESCIENCELEADER.COM of the patient-centered tactic is to invite But during or after the clinical trial, par- them into two different groups, conduct- a patient to ‘the table’ — to a conference ticipants aren’t usually given much access ing research, and collecting data from or to an ad board.” While this is a big to the data. According to Jamie, “In the which you can then publish articles.” As step, the PatientsLikeMe team cautions highly regimented and rigorous field of data and publication are what clinical to avoid the temptation of racing to cre- clinical research, your currency is build- researchers perceive as valuable, Jamie ate a solution to your patient-engagement ing a population of patients, separating believes this encourages researchers to problem before thoroughly considering the various challenges and how best to overcome them.

DON’T LEAP BEFORE YOU LOOK One of the most basic challenges when engaging with patients is, “How does a human being know what to do in an infor- mation age?” asks Jamie. “The question can be as simple as for the headache I have right now, 'What's the best way to Celebrating 25 Years treat it?' Even though these drugs have been used by hundreds of billions of peo- Improving Patient Outcomes and ple, we have no idea what the answer to that question is.” According to Jamie, Reducing the Cost of Care by Taking there is a limit to the number of variables a human, as a heuristic engine, can pro- Noninvasive Monitoring to New Sites cess to reach an effective conclusion. In other words, before you invite patients to and Applications. the table, understand the questions you need to ask them so you are collecting the right data. For example, consider the proxy measures of healthcare, which look at readmission rates or hospital acquired infections. “The core measures are falls or bedsores,” says Coulter. “These don’t really get to the nature of the underlying condi- tion.” If you want to better understand the outcome, start by measuring the experi- ence of the process that led the patient to the outcome. Regarding clinical trials, Ben adds, “Patient reported outcome [PRO] measures are typically designed in the context of doing research and understand- ing an end point, as opposed to having a patient-centered view of an enabling self- measurement and self-disease manage- ment.” If you want to develop better end points, you need to meet the challenge of understanding what matters to the patient during their disease journey. Another challenge to consider is that consumers are increasingly looking for, and have been given, control in their lives. “From how we order a taxi to how we www.masimo.com reserve our next hotel stay, consumers are increasingly looking for data, referrals, and input from the crowd,” says Coulter.

LIFESCIENCELEADER.COM NOVEMBER 2014 33 leaders EXCLUSIVE LIFE SCIENCE FEATURE

only want to share conclusions and not in clinical trials as an inflection point. TRANSFORMING TO PATIENT-CENTERED the data from which they were derived. Though he believes these devices will save REQUIRES TRANSFORMATIVE LEADERSHIP The challenge is not only creating a will- therapeutic development companies hun- Jamie Heywood believes truly transforma- ingness to exchange data but also making dreds of millions of dollars in the future, tive businesses were not necessarily built that data digestible for patients. “This the benefits and savings will go to only on the idea of being a business. “They were requires organizations to be able to figure those leaders willing to invest in under- built on a mission that became a business,” out not only what's important to patients, standing which of these technologies, and he attests. “Google did not have a revenue but also how to present the findings in in which contexts, matter. “Leaders need model when it was invented and began terms that resonate with them,” says to be willing to invest in these and other to understand how to measure the Web. Coulter. “That's a skill the life sciences inflection points.” Ben says transitioning There were other search engines operat- industry needs to develop.” a new concept, such as patient engage- ing on more traditional heuristics about An additional challenge is the tradi- ment, from the innovation group to opera- how to understand things. The parallel tional lengthy cycle times of research tions is challenging. “Demonstrating the to adopting a patient-centered approach projects. “Patient-engagement research value and getting operational buy-in is at your company is looking at the actual projects with six-month answer cycles possible as long as the budget to pay for patient experience as essentially the deter- are often overdesigned to produce pre- it is coming from innovation,” he states. ministic value of healthcare delivery or cise answers,” says Jamie. He suggests if “What we have seen is the traditional drug development.” While he believes the you want to start operating your business approach of easing it into the operating Framingham Heart Study and the Nurse’s where you’re making decisions in days budget with the initiative being partially Health Study to be excellent examples and weeks instead of bi-annually, retrain funded by both groups.” While this some- of this concept in action, it’s not broadly your operational directors and vice presi- times works during the transition, it often accepted. “We've seen, depressingly, exam- dents to seek outside resources which can fails when operations has full financial ples where we’ve delivered transformative help operationalize a real-time engage- responsibility. He suggests if adopting a levels of value to one franchise team, and ment model and stop overdesigning ques- patient-centered strategy, be sure to con- that team has tried to bring that same tions. While adopting a patient-centered sider how to fund it, including creating value to other parts of the organization. approach may make sense, expect resis- transition budgets and teams to help the But the organization goes through the tance at various levels. For example, initiative move successfully from an inno- same resistance curve because it just rep-

HOW TO BUILD REAL PATIENT-CENTERED PHARMACEUTICAL COMPANIES By R. Wright R. By COMPANIES PHARMACEUTICAL PATIENT-CENTERED REAL BUILD TO HOW implementing a patient-engagement vative experiment to an operational best licates the problem in a different silo. approach across a company’s therapeu- practice. Convincing the pharmaceutical busi- tic portfolio (e.g., oncology) might meet resistance from individuals responsible for a single asset (i.e., experimental treat- ment) within the therapeutic category, Patient-Centered Requires especially if input adds new information Big-Picture Thinking that they fear could add risk to the asset’s success. A further challenge is operat- ing in the clinical research world as it Idiopathic pulmonary fibrosis, IPF, is about to disease. You can educate patients and devel- exists while trying to think about, and receive a big cash infusion. “There are now op the measures, deploy them clinically, and invest in, how you want it to look in the six companies specializing in IPF that are validate.” Instead of operating in isolation, future. “Essentially, there is no funding, no either in or going toward a phase 3 program,” these companies should do some big-picture says PatientsLikeMe chairman and cofounder thinking about how to best help the patient, model, and no mechanism for continually Jamie Heywood. A rough number of $200 mil- and he believes all will benefit. “Imagine if the improving the measurement of disease via lion each equates to $1.2 billion in spending. companies pooled $50 million toward solving patient engagement,” Jamie says. “At some One of the problems Heywood envisions is the various problems around conducting IPF point in the future, devices around us will that these six companies are spending more research,” he ponders. “Suddenly, you could monitor enough of our lives that the idea money than they should. Unlike diseases such take a $1.2-billion cost and halve it.” of surveys will be gone. While Jawbone as ALS, which has an extremely strong clinical Heywood feels that becoming truly patient- [wrist band fitness activity tracker] as a trial network, IPF does not. “It doesn't have a centered requires biopharma to take on big- tool for measuring mobility in multiple network of clinics,” he says. “It doesn't have picture collaborative thinking. “This type of an outcome measure that is accepted or used approach would result in getting faster and sclerosis patients as a changed measure- by the FDA to approve a drug. The current better signal detection, a better regulatory ment methodology in a trial is not vali- measure, forced vital capacity, doesn't really response, and a far better patient experi- dated and ready today, at some point it match the decline of the disease — and the ence,” he attests. “Further, because you're will be.” Jamie refers to the time period vast majority of IPF patients do not participate integrating trial level measurement into the between now and eventual validation of in clinical research.” Heywood believes these care process, you can eliminate most phase personal activity tracking devices for use are all fixable problems. “You can build an open 4s; risk management is automatic, and as an clinical research network that is patient-cen- added benefit you get real-world compara- tered and recruit most of the people with the tive effectiveness.”

34 NOVEMBER 2014 LIFESCIENCELEADER.COM ness to think about developing a relation- given everyone a job for a little while, ship with the customer/patient requires they've left the town worse off.” Instead, transformative leadership. “Even with a strive to create a system that leaves the biopharma company that has 25,000 to patients better off. “I was at a discussion Medicine 50,000 employees, there are really only yesterday with a major pharma about a and clinical about 100 people in those enterprises research project,” he shares as an exam- research are very capable of changing the way a decision is ple of what patient-centered is not. “They made.” To assist you in becoming patient- were really excited about how they did paternalistic fields that centered, he advises bringing in change this and that, and said, ‘We're being so have largely regarded patients management experts to help. patient-centric.’ I said, ‘Really? What did as subjects which perform best Transformative leaders need to approach the patients get out of it?’ The answer was, partnering with patients as, “I'm going to ‘Oh, they're excited about participating in when they are adherent, compliant, solve some problems for you the patient research, so we make them feel better, unquestioning that may or may not directly address our because they're participating in research.’” followers of the rules. company’s needs right now,” says Jamie. If you want to be patient-centered, ask “And, I'm going to make sure that I enable yourself, "What's in it for the patient? How an infrastructure so that you the patient will you leave them better off? What can are better at solving your own problems you give them to help them organize on JAMIE HEYWOOD through this partnership.” He analogizes their own? Does that data need to be com- Cofounder and Chairman of PatientsLikeMe it as being the opposite approach to the petitive or can it be collaborative? How can bygone days of coal mining. “When a coal you make it available? These are things company came into a town, tore off the top conspicuously absent in many industry of a mountain, and left a bunch of chemi- approaches to developing a relationship cals in the streams, even though they'd with patients." L

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LIFESCIENCELEADER.COM NOVEMBER 2014 35 leaders ROUNDTABLE COMBINATION CANCER IMMUNOTHERAPY

— A VIRTUAL A SERIES ON THE CHALLENGES AND OPPORTUNITIES OF USING ROUNDTABLE NEW AGENTS TO RALLY THE IMMUNE SYSTEM AGAINST CANCER COMBINATION CANCER IMMUNOTHERAPY — A VIRTUAL ROUNDTABLE By W. Koberstein W. By ROUNDTABLE A VIRTUAL — IMMUNOTHERAPY CANCER COMBINATION WAYNE KOBERSTEIN, Executive Editor LLEW KELTNER, M.D., Ph.D., Roundtable Moderator

We are all partners. Life is partnership — life and death. As individuals cast at birth into a vast net, we habitually ignore this web of connections as mere background, but it is always there, whether we cooperate or struggle against it. Like greatness, some people and the organizations they build seek alliances as the very stuff of life. Others have partnering thrust upon them.

With the new rise of cancer immunotherapy, the use of combinations is an emerging paradigm that demands a new kind of collaboration among all the key players, from key opinion leaders to companies to regulators to payers. What looks like competition between immuno-oncology mechanisms and therapies is that and more. Everyone wants a place in the ideal combination, but to get there, each one must collaborate with the others, if only in conversation and debate.

Our series of virtual roundtable discussions on combination cancer immunotherapy enters a new phase with this installment. Part Three moves from the KOLs in the first two parts to the leaders of companies developing advanced cancer immunotherapies and all vying for a place in the coming combinations. One of our goals was to compare the views of KOLs and companies by enlisting both groups in the roundtable panel and posing essentially the same set of questions to everyone.

36 NOVEMBER 2014 LIFESCIENCELEADER.COM PART THREE: COMPANIES AT STAKE

LIFESCIENCELEADER.COM NOVEMBER 2014 37 leaders ROUNDTABLE

n this part and continuing in Part to evolve with the growth of scientific yet been maximized in their benefit for Four next month, we will hear from understanding in ongoing research? patients. Combinations may maximize the leaders of many key companies benefit and potentially enable cure. in the field. Their stake in the race Combo criteria? I Essential components? — or is it partnership? — consists By what criteria will physicians select of capital, real assets, and other forms of specific immunotherapy combinations Aim for synergistic pathways. Three value, including people, knowledge, and for individual patients or patient groups? main categories: 1) checkpoint modu- a genuine desire to change the ugly vis- Or will regulatory and reimbursement lators with each other to minimize age of cancer. In many ways, each one’s realities dictate the combinations? immune suppression; 2) checkpoint fate depends on what it does not only to modulators with other immunothera- compete against but also to cooperate Narrow or wide applications? pies to reduce immune suppression and with the other contenders. Will the most effective immunotherapy specifically activate immune responses; We have changed the roundtable for- combinations be specific to traditional 3) immunotherapies with targeted thera- mat here, from the question-by-ques- cancer indications (NSCLC, HCC, etc.) or pies to leverage immune effects and tar- tion KOL discussion in Parts One and tend to have general effectiveness against geted therapy effects (e.g., speed of effect, Two, to a company-by-company pre- all or a wide range of cancers? debulking, immune modulation, etc.). sentation — a necessity, given the high number of responding companies. We Personal or broad? Backbone therapy? did our best to invite and include all of Do you see limits on the practice model In the short term PD-1/PDL-1 and other the companies now developing cancer for cancer immunotherapies; i.e., will cell- checkpoint modulators, as they become immunotherapies, chiefly in the new based approaches remain restricted to available, will be the backbone of immu- areas generating the most excitement a small number of patients in intensive- notherapy combinations based on their in the oncology community: checkpoint care or salvage settings? clinical efficacy and safety profile and inhibitors, co-stimulators, and comple- their universal utility. With further evo- mentary immunostimulators such as Commercialization challenges? lution of other immunotherapy modali- cancer vaccines and ablative modali- What are some of the major hurdles ties, this may shift slowly based on the

COMBINATION CANCER IMMUNOTHERAPY — A VIRTUAL ROUNDTABLE By W. Koberstein W. By ROUNDTABLE A VIRTUAL — IMMUNOTHERAPY CANCER COMBINATION ties that promote immune-cell produc- you face in commercializing your cancer demonstrated effects. tion. We also hear from a few com- immunotherapy product or products, panies that believe other approaches especially considering the science, Combo criteria? deserve a place among the possible regulatory pathway, and market are still If approved and reimbursed, immuno- cancer immunotherapy combinations evolving? therapies will be selected for combina- the roundtable addresses. tions based on their clinical benefit/ General comment? risk profile in the respective population. The questions we asked the panelists Is there anything else that you believe is Research addresses rational combina- were as follows: critical to understanding how combina- tion possibilities based on mechanis- tion immunotherapy or another immu- tic synergies and characterization of Why combinations? notherapeutic approach will move into immune effects of non-immunotherapy Do you believe cancer immunotherapies use as the backbone of cancer therapy? combination candidates. should be used in combinations rather than as single agents, or is it possible to The following are the responses: Narrow or wide applications? envision a single effective immunothera- A wide range of benefits is possible peutic agent? from theGLAXOSMITHKLINE company leaders: depending on the combination; e.g., for targeted therapy/immunotherapy com- Essential components? In early development of numerous binations, most limitations are imposed In your opinion, if cancer immunothera- cancer immunotherapy candidates by the targeted therapy. However, cur- py combinations are essential, what are with a variety of mechanisms. rent development practices dictate the essential constituents of any combi- development in histology-defined indi- nation therapy? AXEL HOOS, M.D., PH.D. cations. With demonstration of wide Vice President, Oncology R&D benefit across boundaries of histology, Backbone therapy? it may be possible to modify these stan- Will a particular approach such as PD-1/ dards over time. PD-L1 be the “backbone” of cancer immu- Why combinations? notherapy combinations? Or will consen- Some immunotherapies have proven Personal or broad? sus on a hierarchy of therapies continue effective as single agents. They have not Immunotherapies should be as broadly

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accessible to patients as possible. Why combinations? how to configure combinations as people However, limitations will be imposed by Although a single effective immunother- become more educated about immuno- practicalities such as antigen expression, apeutic agent no doubt exists, there is therapy and the old treatment paradigms scalability of the approach, effect size, also great promise for taking existing melt away. In the studies that won its alternative options, etc. For cell-based and future agents into combinations. A approval, ipilimumab improved overall approaches limitations may be greater single agent would have to have three survival in melanoma patients without a than for more generic approaches. essential actions: targeting the immune significant effect on progression, some- system toward the tumor, potently stim- thing oncologists do not normally see. Commercialization challenges? ulating a positive immune response, and Many immunotherapies produce delayed Assuming we generate the needed clini- overcoming the natural resistance to the responses, and sometimes patients even cal data on benefit/risk for any given immune system many tumors express in show shrinkage or response of their immunotherapy or combination, the their microenvironment. We are testing tumor at some point after the immuno- main challenges will be pricing and our poxvirus-based cancer immunother- therapy has been completed. We hypoth- patient access. Particularly for combina- apies alone and with a variety of immune esize that targeted activation of an anti- tions, the current pricing model will lead checkpoint inhibitors, and are generat- tumor immune response (foot on the gas to very high costs for reimbursement ing some very exciting single agent and pedal) coupled with blocking immune agencies and may be prohibitive in some combination data, both in animal models suppression (foot off the brakes) has the geographies. Building a new pricing and clinical trials. potential for synergistic clinical benefit model for combinations should improve in a broad population of cancer patients. this situation. For example, one could Backbone therapy? envision pricing a novel-novel combina- The very impressive efficacy results Personal or broad? tion as a regimen and not as individu- coming in with PD-1/PDL-1 antibody Active immunotherapies for cancer are al drugs, thus introducing substantial blockade suggest that immune check- generally very well-tolerated, with side discounts relative to individual pricing. point inhibition may be central to cancer effects more like vaccines than other The industry would benefit from work- immunotherapy. However, one potential traditional anti-cancer therapies such ing together to introduce new pricing disadvantage to using immune check- as chemotherapy or radiation. This sug-

COMBINATION CANCER IMMUNOTHERAPY — A VIRTUAL ROUNDTABLE By W. Koberstein W. By ROUNDTABLE A VIRTUAL — IMMUNOTHERAPY CANCER COMBINATION models. point inhibition alone is its autoimmune gests they may be broadly applicable side effects, reported to involve variably and given at some point to many cancer General comment? skin, lungs, the gastrointestinal system, patients. Some therapies, such as those Collaboration is going to be paramount and the endocrine organs. Further, some that require the patient’s cells to be har- to maximize value and speed to make patients respond fabulously, but others vested and processed outside the body, combinations with immunotherapies a do not. Patients who cannot mount an may have more limited applications. reality. Trends toward that are visible endogenous T cell immune response will across the industry. Further, the evolu- not respond to checkpoint inhibition and Commercialization challenges? tion of an immunotherapy-focused clini- must have their immune system specifi- Targeted therapies and immuno- cal development and regulatory para- cally activated and directed toward their therapies will likely be pricey at first digm, which was started by the Cancer tumor. Active cancer immunotherapy because they are complicated to devel- Immunotherapy Consortium (CIC) about using tumor antigens presented as pro- op in the laboratory and require a full- a decade ago, will further increase the teins or as viral or DNA vectors may fill blown clinical development program. probability of success for new therapies. this gap. Such combination therapy may Immunotherapies will initially be used also address the nonspecific autoim- in a focused way; not everyone will get BAVARIAN NORDIC mune effects of checkpoint inhibitors by immunotherapy in the early days, at focusing the patients’ immune response least. Payers will worry about combina- Developing targeted cancer immuno- on the tumor rather than on normal tis- tions of expensive treatments, and they therapies and vaccines; lead candidate sues. have few precedents for how to keep is a viral-vector antigen-targeting ther- their overall system costs in control. apeutic for prostate cancer in Phase 3. Combo criteria? There will be scrutiny and demands for In principle, each person’s immune sys- good, solid clinical data to support reim- JAMES BREITMEYER tem has the potential to become educat- bursement decisions. Division President, Cancer ed to recognize the tumor and suppress There is skepticism about the viabil- Immunotherapy, Bavarian its growth with productive immunity. ity of some kinds of immunotherapy in Nordic Inc, and Executive Vice The timing to achieve effective antican- general, and particularly in the inves- President, Bavarian Nordic A/S cer immunity may depend on the com- tor world. Anti-PD-1/PD-L1 success has bination deployed. We will know better become a lightning rod, and it seems

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everyone is scrambling to buy the next tic and scientific rationale and differential we need to generate or provide effective checkpoint antibody, push it into the clin- clinical benefits. It would seem inconceiv- tumor-specific T cells and also provide ic faster, or try for breakthrough designa- able that oncologists may consider com- active but safe immunomodulators such tion. But in other areas, such as active bining individual immune-therapeutics in as checkpoint inhibitors. immunotherapy or cancer vaccines, there routine clinical practice without robust is still skepticism, particularly among benefit-risk evidence from well conducted Combo criteria? investors and potential commercial part- clinical trials. Ideally, specific immunotherapy combi- ners. Another hurdle is that some physi- nations will eventually be selected based cians and investigators understand how Personal or broad? upon the patient’s tumor-expression pro- immunotherapy may be different from It seems likely that these two general file and immune status. Initially, we will chemotherapy, hormone therapy, or radia- approaches are not mutually exclusive, likely select treatments based upon data tion; others do not. The knowledge base and each will play an important role in the from trials that demonstrate the effec- around immuno-oncology for cancer ther- same or different diseases. tiveness of certain immune therapies and apy is expanding exponentially as more combinations in specific tumor cancer clinicians treat patients with this novel General comment? types and tumor stages. The biologic dif- treatment paradigm. The field of therapeutic cancer vaccines ferences between tumor types and stages has remained largely unsuccessful to date. of tumor progression will prevent extrap- TAKEDA/MILLENNIUM But this may change through improved olation into additional clinical indications vaccine technology, personalization of without the relevant trials. Regulatory Exploring development of vaccine therapy, and perhaps most impor- authorities will likely take this perspec- next-generation immunotherapies. tantly, concomitant or sequential combi- tive until proven otherwise. nation with therapies that break immune MANFRED LEHNERT, M.D. tolerance. Personal or broad? VP and Head, Innovation There are many types of personal- Oncology Therapeutic Area IMMUNOVACCINE ized medicine used in clinical practice Unit, Takeda Pharmaceuticals today, including surgery and autologous

COMBINATION CANCER IMMUNOTHERAPY — A VIRTUAL ROUNDTABLE By W. Koberstein W. By ROUNDTABLE A VIRTUAL — IMMUNOTHERAPY CANCER COMBINATION Early clinical-stage development or allogeneic transplantation. Thus, it is of DepoVax vaccine adjuvanting likely that effective cell therapy or other platform and product candidates immune therapies will be made available Why combinations? for cancer therapy. clinically. The more significant concern The major benefit of single agents has is how to reduce toxicities, particularly in been limited to a subset of 20-40 percent MARC MANSOUR, PH.D. early, high-risk clinical situations where of patients in certain diseases. There is a Chief Executive Off cer risk of recurrence is high but the patient strong mechanistic rationale for combina- only presents microscopic disease. We tions, and there is preclinical and early Note: The company’s science need well-tolerated therapies, and off-the- clinical data to support that. advisor, Neil Berinstein, M.D., Director of shelf combination therapies will likely be Translational Research at the Ontario Institute more applicable than cell-based therapies Essential components? for Cancer Research (OICR), and Marianne such as CAR. At this point, anti-PD-1 or anti-PD-L1 Stanford, Ph.D., Director of Research, contributed would seem the backbone of clinical to Dr Mansour’s response. Dr. Berinstein also Commercialization challenges? combination development. But this may participated in the KOL discussions in Parts The evolving science in cancer immu- well change in the future, when we bet- One and Two of this series. notherapy has a significant impact on ter understand the clinical activity and clinical trial design, particularly in the safety profile of the many other agents areas of analysis of clinical responses and approaches that are in development. Essential combination components? and the appropriate selection of patients It may well be that optimal immune-ther- We need at least two components to to enroll in trials. We must identify apy combination will depend on disease “drive” effective cancer immunotherapies: the optimal immune modulators and context (disease type and/or stage), and We need a therapy, such as an effective immune-modulator combinations for may be guided by molecular information cancer vaccine, to “push the accelerator,” the clinical indication being addressed. from tissue (tumor and/or adjacent nor- or facilitate anti-tumor immune respons- The issue of clinical responses to immu- mal) and/or blood. es, and a component to “release the notherapy has been partially addressed brakes,” or limit the immune suppressive through the irRC, or immune related Combo criteria? forces that impair generation or effective- RECIST criteria, but the uptake of irRC in This will be largely driven by a mechanis- ness of the anti-tumor responses. Thus, pivotal trials has been slow. Preliminary

42 NOVEMBER 2014 LIFESCIENCELEADER.COM data has also indicated that biomarkers for us is not just immunostimulators and the adaptive immune system but also the and genetic signatures may be used to checkpoint inhibitors, not just the gas innate system. identify the patient population that will on and brakes off. We are looking at the best respond to treatment, but validation tumor microenvironment and promoting Essential components? of the biomarkers for selection has yet to the enhancement of tumor antigen pre- [SEETO] Everything is driven by the be confirmed in the clinic. sentation, so we are focused not only on science, and we need to conduct more

General comment? We highly value our preclinical data as a driver for clinical programs. We believe that well-conducted studies may help with the rational design of combination therapies and can assist in the appropriate design of clinical trials. Having said that, demonstrating a mechanism of action for the therapy in patients early on is criti- cal to justify further development. This will allow for more efficient, effective, and innovative clinical trial designs that will translate into effective cancer therapies.

MEDIMMUNE/ASTRAZENECA

Numerous immunotherapies in development, including MEDI4736 (PD-L1) now in Phase 3, tremelim- umab (CTLA-4, licensed from Pfizer), MEDI6469 (OX40, from AgonOx), and MEDI0680 (PD-1, acquired through Amplimmune).

BAHIJA JALLAL, PH.D. Executive Vice President, AstraZeneca, Head of MedImmune

EDWARD BRADLEY, M.D. Senior Vice President, R&D Oncology, iMED Head

REG SEETO, M.D. Vice President, Head of Partnering and Strategy

Why combinations? [BRADLEY] We believe in combinations and have a robust clinical portfolio with CTLA-4, PD-1, PD-L1, and OX40 in devel- opment both as monotherapy and in com- binations. The next wave of combinations

LIFESCIENCELEADER.COM NOVEMBER 2014 43 leaders ROUNDTABLEEXCLUSIVE LIFE SCIENCE FEATURE

bring more benefit to patients. The sec- Why combinations? ond stakeholder is regulatory authorities, Historically, combination therapy with The evolving science such as the FDA. We must deliver data traditional agents has been the corner- in cancer immunotherapy that supports putting the combination stone of oncology. With novel immuno- use on our label. The third stakeholder therapeutics, and an increased under- has a significant impact on is the payer, to whom we must also show standing of mechanism of action, there clinical trial design. data that differentiates our treatment has never been a stronger rationale for in combination, plus cost-effectiveness combining drugs. In the short term, we data. We are right on track with our need to combine drugs with potentially stakeholders in all respects right now. synergistic mechanisms. In the longer Obviously, there are more complica- term, we can potentially combine mul- MARK MANSOUR, PH.D. tions if the combination includes not tiple therapeutic avenues within our engi- Chief Executive Off cer only our drugs but also ones from other neered T cells by modulating pathways companies. However, we have a broad within the T cells or using them as a portfolio, and most of the combinations vehicle to deliver molecules to the tumor we are developing now consist of mol- microenvironment. For example, cyto- ecules we have in house, and that gives kines that would be toxic when delivered us more flexibility and control over how systemically could be delivered to the we can price the combinations. We don’t tumor by the T cells to provide poten- develop drugs just for the sake of devel- tially synergistic, or at least additive, anti- oping them — we want patients to have tumor effects. access to them. You have to work with all experiments to understand the essential the stakeholders to make sure as many Essential components? combination components. Dr. Yong-Jun patients as possible can gain access to Engineered T cell therapy and checkpoint Liu, our new head of research, is a world your drug. blockade are two of the most exciting leader in the field of immuno-oncology, so approaches. Checkpoint inhibitors are

COMBINATION CANCER IMMUNOTHERAPY — A VIRTUAL ROUNDTABLE By W. Koberstein W. By ROUNDTABLE A VIRTUAL — IMMUNOTHERAPY CANCER COMBINATION in addition to our focus on combinations, [BRADLEY] Another consideration: already approved for certain indications; he has brought a whole new way of think- Immune-mediated therapies take time they don’t appear to be working in all ing about how we approach combination to generate the immune cells that trav- tumor types or patients but will be an therapy. el to tumor sites and kill cancer cells. important building block with which we Sometimes the biological effects take can start mixing and matching in rational Backbone therapy? weeks to months. Physicians must real- combinations. Used together, taking the [BRADLEY] Obviously, the cornerstone of ize there is a different pace of response, brakes off and pushing the accelerator our immunotherapy strategy is combina- and the tumor may even seem to get a —providing cells specifically activated to tions, and in those combinations there little larger at first, due to an inflamma- target the cancer — will be important to will be certain backbone approaches, but tory response, but it will then shrink and test, particularly in the challenging solid the optimal combinations are still being sometimes go away. What is surprising tumor setting. determined, and that is why there is so is how quickly physicians have, in fact, much activity at the moment to identify learned to deal with some of the differ- Backbone therapy? them. Still, although there is a great deal ences in side effects. Engineered T cells and checkpoints of talk about the second wave of immuno- inhibitors can potentially serve as therapy, the therapies that are in the lead JUNO THERAPEUTICS therapeutic backbones. However, ear- today will likely be the backbone therapies lier in the treatment paradigm, as in for optimal combinations for a long time. Developing novel immunotherapy the adjuvant setting where only micro- platforms that harness the potency scopic amounts of tumor remain, there Commercialization challenges? of memory T cells, redirecting them to may be insufficient antigen to stimu- [JALLAL] There are no significant dif- targets expressed on or in cancer cells; late a T cell response to a checkpoint ferences in the challenges for immu- three candidates in Phase 1 – 2. inhibitor or to stimulate the prolif- notherapies and other types of cancer eration of engineered antigen-specific drugs. We deal with several stakeholders. MARK W. FROHLICH, M.D. T cells. In those settings, a vaccine The first one is the patient — we must Executive Vice-President, to simulate T cell proliferation may make sure whatever we do is backed Research & Development be important as one of the therapeu- up with data. If we say our drug should tic backbones in combination with be used in a combination, the use must the others.

44 NOVEMBER 2014 LIFESCIENCELEADER.COM Combo criteria? Personal or broad? ner on combination studies early in the Biologic rationale based on the mecha- Initially, combinations will be tested on drug development process. Regulators nisms of action will be used to prioritize groups of patients rather than on indi- also are more receptive to new approach- testing of combinations. Preclinical mod- viduals. By appropriately investing in es to bringing combinations to market. els may provide additional insights, but biomarkers that can help predict which Cost of goods will need to be controlled ultimately, combinations will need to be patients are benefiting, we will have the with novel biologic therapies, but the tested empirically in the clinic. opportunity to tailor the agent or com- increased clinical benefit that can poten- bination to a particular patient. Some of tially be provided by these approaches Narrow or wide applications? the pathways or immune mechanisms are should still translate to value for patients Initial approvals will be in advanced common across various disease types, and and payers. patients with relatively narrow indica- it is possible to imagine moving towards tions based on single arm trials in some a paradigm where we screen patients for We have run as many company responses as cases. Subsequent confirmatory tri- a biomarker and treat them based on the space allows this month and will follow with the als earlier in the treatment paradigm biomarker, as opposed to whether they remainder next month and beyond if needed to will be randomized and address larger have a particular cancer type. follow this rich vein of lessons in translational patient populations. If dramatic anti- R&D, business development, scale-up, and tumor effects with clear clinical bene- Commercialization challenges? commercialization of breakthrough medicines. fit are observed in individual patients, Historically, companies have been hesi- We are still open to hearing from other then we can anticipate that cohorts of tant to let their drugs be tested in com- companies that either missed our first invitation patients in smaller indications could be binations prior to obtaining regulatory or believe they belong in the conversation. sufficient for label expansion or at least approval. That appears to be changing, Meanwhile, please join the discussion on Twitter reimbursement. and we are seeing several companies part- at #CCIRLSL. L

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LIFESCIENCELEADER.COM NOVEMBER 2014 45 INSIGHTS BIOPHARMA

Cannabis-Based Pharmaceuticals:

By C. Mintz By The Next Frontier?

CLIFF MINTZ Contributing Editor

The current U.S. legal/regulatory landscape has given rise to two distinct types of companies that are attempting to commercialize cannabis products. The first of these is commonly referred to as medical marijuana companies, or as Steven Schultz, VP of investor relations at GW Pharma suggested, “nutraceutical or herbal remedy companies that promote the medicinal properties of cannabis.” CANNABIS-BASED PHARMACEUTIALS: THE NEXT FRONTIER? NEXT THE PHARMACEUTIALS: CANNABIS-BASED

ypically, products from these those things are present in medical mari- the rapidly emerging medical cannabis companies are botanical juana offerings.” market. “Not to worry,” offered Trevor T extracts or actual plant materi- Likewise, Dean Petkanas, CEO of New Castor, CEO of Boston-based Aphios Corp., als derived from specific can- York-based Kannalife Sciences, a phyto- a biopharmaceutical company develop- nabis strains with anecdotally-reported medical company that is developing ing cannabinoid-based products to treat medicinal properties that can be topically cannabis-based drugs to treat hepatic emesis (nausea and vomiting), cachexia applied, ingested, smoked, or vaporized. encephalopathy and other neurological (wasting diseases), and CNS disorders like Patients require a prescription from a disorders, said, “Doctors want to know MS and Alzheimer’s disease, “the market licensed physician to obtain medical mari- what they are prescribing to their patients is large enough to support both the nutra- juana, and it can be used only in states and anecdotal evidence about the thera- ceutical/herbal remedies and pharmaceu- that permit consumption of cannabis for peutic benefits of a plant-based nutraceu- tical sides of the business. They can easily medical purposes. Interstate transport of tical grown by ‘new-age-pot-farmer-wan- coexist in today’s marketplace.” Further, medical marijuana (even between states na-be-pharmacists’ is simply not going to by way of an example, Castor pointed with medical cannabis legislation in place) cut it. Also, added Petkanas, “In the case of out that the multibillion-dollar omega 3 is prohibited by federal law. some intractable diseases, there will be a fatty acids market comfortably supports Unlike medical marijuana companies, need for extremely potent pharmaceutical the sale of both dietary supplements and biopharmaceutical companies, including cannabis-based products, which normally FDA-approved, prescription-only omega GW Pharma, Kannalife Sciences, Aphios, cannot be achieved using even the best 3-based pharmaceutical products. and others, are committed to developing plant-based extraction technologies.” Unlike most companies in the canna- cannabis-derived pharmaceuticals using While the business case for develop- bis-based pharmaceutical space (mainly conventional U.S. FDA regulatory approval ing pharmaceutical cannabis-based drugs focused on developing cannabinoids as pathways. “The idea behind our approach is sound, the cost and time required for therapeutics), Potbotics is a biotechnology is to offer the market, and more impor- regulatory approval of these products company that has combined robotics and tantly patients, a medicine that has been will be much greater than those required artificial intelligence to ostensibly stream- through a full regulatory review and is well for commercializing medical marijuana line cannabis pharmaceutical develop- characterized regarding efficacy, safety, products. Put simply, medical marijuana ment. The company is commercializing a and interactions with other drugs,” offered products will be commercialized first and product called Brainbot, a physician-facing GW Pharma’s Schultz. He added, “None of likely garner an early majority share of tool designed to identify the right combina-

46 NOVEMBER 2014 LIFESCIENCELEADER.COM tion of cannabinoids found in specific mari- has signaled a willingness to review new juana strains to maximize the therapeutic drug applications for cannabis-based benefits of cannabis for treating patients therapeutics, the agency has yet to issue with concussions, epilepsy, and other neu- definitive guidance for regulatory approv- rological indications. “Think of Brainbot al of these products. as a super EEG medical device that allows “The confusion between federal and In the case of some healthcare providers to evaluate and quan- state laws is a major factor that is caus- intractable diseases, there will tify in real time a brain’s reaction to spe- ing hesitancy among regulatory bodies cific strains of marijuana,” explained David regarding the approval of cannabis-based be a need for extremely potent Goldstein, Potbotics CEO. Goldstein added, products,” said Castor. For example, he pharmaceutical cannabis- “This will allow healthcare providers to offered, “Federally, a drug cannot be pre- based products. analyze and determine the right ratio of scribed unless it has undergone clini- cannabinoids [and make strain recommen- cal trials, yet many states have passed DEAN PETKANAS dations to patients] for optimal treatment legislation allowing the use of medical CEO of Kannalife Sciences of certain neurological indications.” marijuana without clinical trials and without identifying specific indications. CLINICAL TRIAL CHALLENGES This must be resolved to ensure patient Cannabis’s classification as a Schedule I safety.” Likewise, Petkanas believes that drug (i.e., illegal with no current medical cannabis’s designation as a Schedule I value) makes medical cannabis research drug is a serious impediment and one that extremely difficult. Also, while the FDA will need to be resolved to commercialize

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LIFESCIENCELEADER.COM NOVEMBER 2014 47 insights BIOPHARMA

TECHNICAL/MANUFACTURING based products to new indications.” CHALLENGES Finally, determining the appropriate There are also several technical and cannabis-dosing regimen for individual manufacturing issues that must be therapeutic indications will be critical. addressed before cannabis-based phar- Petkanas offered, “Right now we have The market is large By C. Mintz By maceuticals can be successfully com- extremely limited scientific information enough to support both the mercialized. First, substantial invest- regarding cannabis-dosing regimens for nutraceutical/herbal remedies ment must be made in production facili- individual indications. We have to get ties to breed and grow various cannabis this right to instill confidence in patients and pharmaceutical sides of strains to obtain appropriate chemical and physicians that our products work the business. compositions to treat specific therapeu- and are safe.” tic indications. According to Petkanas, this investment must include research PROVIDER/INSURANCE EDUCATION TREVOR CASTOR on breeding programs, strain construc- IS IMPERATIVE CEO of Aphios Corp. tion, cannabinoid concentrations at dif- Both Petkanas and Castor agree that ferent stages of plant growth/harvest the existing confusion about the legal- times, and yield improvements. “As ity of cannabis-based products will like- strange as this may sound, crop failure ly have an effect on insurers and third [not having a redundancy of supply] is a party payers. “At this point, it is really serious issue that all players in the medi- unclear whether payers are going to place cal cannabis industry must address,” these drugs on formulary and reimburse mentioned Petkanas. patients who use them medicinally,” Second, plant growth, extraction pro- stressed Petkanas. Further, Castor sug- cannabis-based products. He said, “The cesses, and manufacturing active can- gested that, like the omega 3 fish oil mar- CANNABIS-BASED PHARMACEUTIALS: THE NEXT FRONTIER? NEXT THE PHARMACEUTIALS: CANNABIS-BASED legal patchwork for cannabis that has nabis-based therapeutics must be con- ket, where there are both nutritional sup- evolved in the U.S. suggests that canna- ducted according to current good manu- plements and omega 3 fatty acid-based bis-based therapeutics will be available facturing practices (cGMP) and rigorous prescription drugs, consumers may have only in certain states (which will restrict quality standards. “The whole point of to pay out of pocket for medical mari- patient access) and also make it very seeking regulatory approval is to demon- juana, whereas insurers may cover the costly for companies to underwrite prod- strate to patients and healthcare provid- cost of FDA-approved cannabis-based uct launches in individual states.” ers that our products have been thor- therapeutics. Unlike other prescription drugs, which oughly reviewed are well characterized Despite any of these challenges, it is are exclusively in the purview of the FDA, and determined to be safe and effective,” undeniable that there is burgeoning cannabis-based therapeutics require stressed GW Pharma’s Schultz. demand for medical marijuana and input from the U.S. Drug Enforcement Third, the method and route of deliv- cannabis-based pharmaceuticals in Agency (DEA). And, the current politi- ery of cannabis-based pharmaceuticals the U.S. However, while the American cal mindset at the DEA is not favor- for individual indications will be vitally public appears to be ready for medi- able for the current and future develop- important. While smoking cannabis cal cannabis use, it is currently unclear ment of cannabis-based products. “THC is currently the most obvious method whether physicians will be inclined to is the only cannabinoid that has any to deliver desired therapeutic effects, write prescriptions for these products. real psychotropic effects, and, despite it may not be the most effective way To that point, patient and healthcare pro- the possible therapeutic benefits of to maximize its medicinal benefits. vider education was cited by each person other cannabinoids like CBD and CBG, “Every patient is different, and we need interviewed for this article as the single they are Schedule I substances, which to offer them alternate delivery meth- most important factor for successful U.S. makes developing any cannabis-based ods to best treat their illnesses,” offered commercialization of cannabis-based pharmaceuticals quite challenging,” Petkanas. He added, “You cannot lock- therapeutics. “Let’s face it, if physicians lamented Castor. Petkanas was more in on a single delivery technology or don’t understand these drugs and are sanguine about cannabis’s designation form of administration for these prod- not convinced that these products are as a Schedule I substance. He said, “The ucts.” Castor agrees. “We are currently safe and effective, then they certainly are Controlled Substance Act needs to be studying various routes of administra- not going to write prescriptions for their repealed, changed, or simply allowed to tion and investigating the use of con- patients,” emphasized Petkanas. Both wither away to ensure that much needed trolled-release technology to improve Castor and Petkanas believe that can- cannabis-based drugs can be brought to the oral and topical delivery of our nabis-based products may garner FDA market to address unmet medical needs.” products to expand the use of cannabis- approval as early as next year. L

48 NOVEMBER 2014 LIFESCIENCELEADER.COM February 25-26, 2015 The Lodge at Torrey Pines

Biocom’s fifth annual Global Life Science Partnering Conference is an exclusive global partnering and networking forum that brings together senior executives and business development professionals from leading pharmaceutical and biotech companies. The conference will include case study presentations, individual company presentations, one-on-one meetings, and numerous networking opportunities.

Confirmed Speakers: »Karen Bernstein, Chairman & Editor-in-Chief, BioCentury

»Bharatt Chowrira, Chief Operating Offcer, Auspex Pharmaceuticals

»Iain Dukes, SVP, Licensing & External Science, Merck

»George Golumbeski, Senior Vice President of BD, Celgene

»Mike Grey, President & CEO, Lumena Pharmaceuticals Inc., Venture Partner at Pappas Ventures

»Chris Haskell, Head, US Science Hub, Global External Innovation & Alliances, Bayer Healthcare

»Rich Heyman, CEO, Aragon Pharmaceuticals

»Adam Keeney, Global Head, External Innovation, Sanof

»Heath Lukatch, Partner, Novo Ventures

»Carole Neuchterlein, Head, Roche Venture Fund

»Ed Saltzman, President, Defned Health

»Bob Smith, Senior Vice President, Pfzer

»Corrine Savill, Head of Business Development and Licensing, Novartis

»Jack Tupman, Vice President, Corporate Business Development, Eli Lilly

www.biocom.org insights LEADERSHIP LESSONS

MAKING YOUR COMPANY ANTI-FRAGILE What we need to do is make our compa- nies “anti-fragile.” No, this is not just a Am I new word for robust; Nassim Taleb pub- lished a seminal book on the subject in Learning November 2012. The difference between anti-fragile from the and robust is that the robust (e.g., com- pany) is just waiting for a big enough Failure wave to overpower it, since you can never be sure you are robust enough. In of Others? contrast, the anti-fragile gets stronger with every wave, stress, and shock. To a TONY BENDELL very large extent, I’m anti-fragile; I get stronger by exercising. So, how should you do the same for your company? First, you probably need to do a fragil- ity audit. Remember that, frequently, ll leaders know there’s a the more efficient your systems, the lot to be said for the old more fragile they are. Then, consider

AM I LEARNING FROM THE FAILURE OF OTHERS? By T. Bendell T. By OTHERS? OF FAILURE THE FROM AM I LEARNING adage, “Good judgment mechanisms for enhancing anti-fragil- A comes from experience, ity within your governance, strategy, but experience comes from bad judg- people/culture, processes/operations, ment.” Conventional wisdom says it’s technology, supply chain, and other key not strictly true, of course. You don’t dimensions of your organization. have to have gotten something wrong Making each of these dimensions anti- for the world to deliver you — and your fragile is potentially a real challenge, company — a crushing blow. It just since you often need to borrow from takes overlooking the possibility, how- existing good approaches while steer- ever slight, that something may hap- ing clear of a lot of bad management pen that could impact your company. doctrine peddled by consultants and What is worse is that we now live in the business schools. a world of rare, hard-to-predict events Anti-fragility is about learning, devel- of monumental consequences, such as opment, and growth — not about the the financial crisis. Such events are corporation forgetting to think or suf- almost ignored by our conventional fering from bad governance, as so often risk analyses, since these don’t account happens in large organizations. The for everything you cannot conceive of. world is a dangerous place, and it’s time When chaos happens these days, it’s to take stock. L often a new type of chaos. And it’s happening with increasing frequency, diversity, and impact. So, what to do? Doing nothing is not an option. Shareholders and stake- holders rightly expect more, or at Professor Tony Bendell is an MD and Lead Trainer at the Anti-Fragility Academy. His book least hold leaders accountable when Building Anti-Fragile Organisations was published the unpredictable happens. Not every- in June 2014 by Gower. He can be contacted at: one gets a second chance anymore. A [email protected] reasonable start is to look at the fail- ures of others, but that alone is far

from enough. www.theanti-fragilityacademy.com

50 NOVEMBER 2014 LIFESCIENCELEADER.COM Join us at the 10th Annual FDA/CMS Summit for Biopharma Executives. Our keynote speakers and panels will take a deep dive into each of these topics, and more.

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