invivo.pharmaintelligence.informa.com DECEMBER 2018
Scrip 100 Invol. 36 ❚ no. 11 Vivopharma intelligence ❚ informa Pharma intelligence |
OUTLOOK
Biopharma | Generics | Medtech
OUTLOOK 2019
Contents SPONSORS OUTLOOK 2
SCRIP 100 12
BUSINESS 26
LEADERSHIP 40
MEDTECH 48
R&D 54
CLINICAL TRIALS 64
CELL & GENE THERAPY 74
REGULATORY 88
CONTRACT MANUFACTURING 100
GENERICS & BIOSIMILARS 110
OUTLOOK EDITOR EUROPEAN TEAM CONTRIBUTORS Lucie Ellis Neena Brizmohun, Francesca Bruce, Catherine Longworth John Davis,Kevin Grogan, Ian Schofield, Amanda Micklus EDITORS-IN-CHIEF Vibha Sharma, Joanne Shorthouse, Ed Silverman Eleanor Malone (Europe) Sten Stovall and David Wallace Denise Peterson (US) Ian Haydock (Asia) US TEAM Michael Cipriano, Bowman Cox, All stock images in this publication IN VIVO EXECUTIVE EDITORS Derrick Gingery, Joseph Haas, courtesy of www.shutterstock.com William Looney Emily Hayes, Mandy Jackson, unless otherwise stated. Ashley Yeo Cathy Kelly, Jessica Merrill, Brenda Sandburg, Bridget Silverman Customer Services EXECUTIVE EDITORS COMMERCIAL and Sue Sutter Tel: +44 (0)20 7017 5540 Alexandra Shimmings (Europe) or (US) Toll Free: 1 800 997 3892 CUSTOM CONTENT EDITOR Mary Jo Laffler (US) Email: [email protected] Andrea Charles EXECUTIVE EDITORS REGULATORY To subscribe, visit: scrip.pharmamedtechbi.com Maureen Kenny (Europe) DESIGN Nielsen Hobbs (US) Janet Haniak, Jean Marie Smith To advertise, contact: and Paul Wilkinson [email protected] ASIA TEAM In Vivo is published by Informa UK Limited. Anju Ghangurde, Jung Won Shin and DESIGN SUPERVISOR ©Informa UK Ltd 2018: All rights reserved. Brian Yang Gayle Rembold Furbert ISSN 2160-9861
December 2018 | In Vivo | 1 OUTLOOK
The Harsh Light Of Hard Facts: Valuing Pharma In A Made-To-
WILLIAM LOONEY Measure World EXECUTIVE EDITOR, PHARMA, US With a challenging new decade of scientific discovery looming, 2019 is the positioning year for biopharma to make value, transparency, information and culture work seamlessly to achieve innovations that matter to patients, payers and society.
For the past decade, biopharma has been character- CULTURE AT THE CROSSROADS ized as an industry in perpetual motion, beset by an Looming again is the larger question: does big pharma unruly mix of scientific, economic and social forces culture have that true grit to succeed in markets where that compel it to constantly reevaluate its model, competitive advantage is fleeting? Or do the times mission and purpose. The adage is to go boldly: trans- demand companies abandon the cultural affliction form, take risks, move fast – or fall behind. McKinsey & Co. calls “change fatigue,” and challenge Thus, it is striking that 2018 stands out as a year peers to stand out, act fast and disrupt? when urgency seems to have taken a vacation. The An informal survey of the In Vivo Editorial Advisory predicted turn toward price regulation went south, Board (EAB) suggests that circumstances likely to with the standard year-on-year rise in list prices dominate in 2019 favor the latter course. E Squared remaining the norm for the majority of marketed Capital health portfolio lead Les Funtleyder observes products; episodes of Trumpian public shaming still that “2018 turned out to be a flop for the fear factor.” left CEO reputations intact; while a big cut in corpo- But the reprieve will be short-lived. “There remain rate tax combined with offshore profit repatriation many latent pressures on the industry that have been went mainly to boost share prices – a safe, if decid- masked by a strong economy, sloganeering prior to edly non-strategic, response to a windfall of historic the November mid-term congressional elections and proportions. The big pharma mega-merger, hailed as the continuing indecision on what defines the future “transformational” by CEOs only a few years ago, fell commercial space in health care.” further into disfavor as Takeda Pharmaceutical Co. A stronger US dollar, global trade disputes and Ltd.’s $62 billion takeout of Shire PLC failed to please geopolitical impacts such as Brexit on the stabil- investors. It underscores the more prosaic virtues of ity of the pharmaceutical supply chain are poised to bolt-on acquisitions that do not attract regulatory dampen industry macroeconomic prospects in 2019. and geopolitical attention. Another negative is the erosion of government finances And despite continuing claims that the commercial throughout the industrialized and emerging market R&D model is broken, science did not disappoint: countries. The US will post its first trillion-dollar bud- the industry’s benchwork on cancer immunology get deficit in fiscal-year 2019; for the first time, interest was recognized in October with a Nobel Prize, while on federal debt will exceed outlays for Medicaid, the innovation returned to the chronic care space with health entitlement program that delivers care to nearly FDA approvals for the first treatments in decades for a quarter of the US population. migraine. There is more to come in 2019, with excite- It is no longer wise to be complacent about the US as ment around new therapeutic platforms like T-cell the pricing gift that keeps on giving. Prospects are good engagers for cancer and drugs that attack the many for some incremental, administrative-led breaches to co-morbidities of diabetes. the ban on negotiation of Medicare drug prices. It will Calm is not always complacent. Out of the lime- add to uncertainty about the long-term prospects for light, a roster of new CEOs spent much of 2018 re- market-led pricing in the US. That is because, whereas viewing company drug portfolios. In favor is a more government and commercial business are separate, disciplined strategy focused on fewer therapeutic the latter has a history of following precedents set by categories and compounds that can lead with a well- the major drug entitlement programs. differentiated profile against the competition. The fin de siècle sentiment is confirmed by a key in- The paring down of pipelines is a trend that over dustry pulse-taker, the Life Science Capital Confidence time may help resolve the prioritization dilemma Barometer produced by EY’s Transactions Advisory generated by all the great new science: where best Service. Group principal Arda Ural tells In Vivo that do we play? 43% of executives surveyed expect disruptions to the
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biopharma business model in 2019. “The Mayo Clinic and the US Veterans Admin- majority see regulatory and policy uncer- istration to underwrite a new company, tainty as the top near-term investment CivicaRx, which launched in September risk, with changes to the US drug price with a mission to manufacture 14 generic system – especially in the Medicare Part drugs deemed essential to hospital supply B and D programs – being top of mind.” chains. Its first shipments of product are He also cites the prospect of more digital due in mid-2019. disruption to biopharma’s standard busi- By and large, biopharma has opted not ness practices as well an underlying pes- to join this industry-wide race to diversify simism induced by lack of confidence in and scale up. Overall, the industry’s re- R&D productivity, which the survey group solve to remain focused on the commer- believes will not be sufficient to outweigh cialization of drugs, diagnostics and OTC the external headwinds facing commercial products has remained firm – and there is teams in positioning new products for A big issue facing a strong thread of opinion that this makes success. strategic sense. “The biopharma and payer For that reason alone, Funtleyder con- industry in 2019 landscape is still highly fragmented com- tends the revamp of pipeline portfolios pared to other industries,” says Michael in 2018 has been time well spent. “A big and beyond is the Ringel, EAB member and senior partner issue facing industry in 2019 and beyond is and managing director for life sciences at the slowdown in post-launch performance slowdown in post- the Boston Consulting Group. “The real – more and more new market entries are issue is not whether biopharma should not meeting expectations, due at least launch performance consolidate – there are significant oppor- partly to a failure of researchers to lead tunities for greater scale and reach – but with something not just new, but useful – more and more how it chooses to do it.” to payers, providers and patients in the Ringel contends that size is still going to contemporary clinical setting.” new market entries be necessary to capitalize on the big ana- Even the most clinically compelling lytical datasets that will power advances products face take-up issues. Biogen Inc.’s are not meeting in drug development and furnish the evi- Spinraza (nusinersen), the first-ever treat- dence required to succeed in the new world ment for spinal muscular atrophy (SMA), expectations. of value-based reimbursement. “These approved in December 2016 by the FDA and other underlying factors will persuade after a record-fast review, was launched biopharma companies to continue to look with strong buy-in from practitioners and Les Funtleyder for combinations that reinforce the exist- patients alike. But in the past 12 months ing R&D business model – making and new patient starts on the drug have dipped marketing medicines – rather than seeking by half as the SMA market awaits the to dominate the entire supply chain, as arrival in 2019 of a gene-based therapy few weeks it took for the entry of a second other health care entities have done.” With competitor offering the prospect of a one- PCSK9 therapy in 2015 for individuals no big pharma controlling more than 10% time cure. The trend is important because whose cholesterol could not be controlled of global drugs sales, Ringel expects CEOs many new technology products are heavily with older statins. to continue to pursue deal-making of all subsidized by manufacturers at launch, Datamonitor’s conclusions are rein- sizes, including the mega-deal, the latter if either by giving patients the drug for free forced by the launch, beginning in May, of not in 2019 then certainly in the decade to or relying on government entitlement not one but three drugs for migraine in the come. “The next big wave of M&A is only programs like Medicaid. new breakthrough calcitonin gene-related a matter of time because the logic of scale peptide inhibitor (CGRP) class. Exclu- in a competitive, technology-rich market- LESS ROOM TO GROW sivity for first-to-market leader Aimovig place remains as compelling as ever.” Marketing’s failure to thrive is compound- (erenumab-aooe), developed jointly by ed by a declining period of exclusivity. A Amgen Inc. and Novartis AG, lasted only IN AMERICA, VALUE STILL new report from Datamonitor Healthcare, three short months. MEANS CHOICE First-in-Class Therapies’ Shrinking In- Another pressure on biopharma’s right The entire industry must also accept that Class Monopolies, used FDA approval and to price is vertical integration in the insur- value-based payment is becoming an launch data from 2001-2017 to conclude er/pharmacy benefit management (PBM), important transactional model in health that fast followers are reaching the market pharmacy and hospital segments of health care. “Slowly, and a bit clumsily, the US much more quickly today than a decade care. One novel attempt to claim more turf is moving to a more transparent payment ago. In the heavily prescribed cardiovas- is the move by several hospital chains, a system defined by a simple calculation: if cular space, the years-long wait for the leading integrated delivery network (IDN), the drug works, I’ll pay for it; if it doesn’t, second-in-class statin contrasts with the Intermountain Health Care Inc., the I won’t pay or I will pay less,” Roger Long-
December 2018 | In Vivo | 3 OUTLOOK
man, founder of market access data and (CMS) has adopted pilot initiatives allow- advisory firm Real Endpoints and partner ing state Medicaid programs to negotiate to Informa Pharma Intelligence, tells In value-based contracts with manufacturers Vivo. Government and the commercial that include reverse payments to Medicaid private sector are now joined in facilitating if outcomes are not achieved. this transition, with Department of Health In October, HHS unveiled a new In- and Human Services (HHS) Secretary Alex ternational Pricing Index (IPI) model to Azar supporting risk-sharing and value- set prices for physician-administered based contracting, among a host of other drugs covered under the Medicare Part proposals in the same vein. B program, based on the value-based But Longman also sees a divide on how reimbursement methodologies adopted stakeholders in the health system define by 16 Organization for Economic Coopera- value: as a clinically driven quality con- tion and Development (OECD) countries, cept or as a payment-for-value-delivered including the UK, Germany and Japan. A transaction based on the allocation of risk. The US is moving proposed rule is due in early 2019, followed “Both approaches are moving forward, but by launch of the IPI in 2020 for a five-year on separate tracks. What we actually need to a more trial run. If the IPI proceeds as planned, is a value decision structure that avoids a the impact will fall disproportionately on unitary response in favor of more flexibility transparent payment a few high-priced biologics, mostly in the because we know the circumstances of ev- cancer space – seven of the top 10 drugs ery patient are different. Most value mod- system defined by a in Medicare payments under Part B in 2015 els in use today rely on a single weighted were oncology drugs including Rituxan metric that fails to calculate the broader simple calculation: (ritiuxumab), Neulasta (pegfilgrastim), impacts of death, disability, productivity Avastin (bevacizumab) and Herceptin losses and related risk exposures that mark if the drug works, (trastuzumab). “These are the poster chil- that patient experience.” dren in the president’s personal campaign Longman affirms the critical task for I’ll pay for it. against high drug prices,” says Mason biopharma going forward is to advocate Tenaglia, a longtime industry strategy a value framework consisting of three adviser and chair of a new venture, Bio interrelated elements: (1) flexibility in Roger Longman Reinsurance Group LLC. “Part B drugs evaluations, incorporating different stake- have been a safe place for manufacturers holder points of view; (2) outcomes-based for a very long time, with little scrutiny of contracting linked to audited performance costs and none of the now standard price measures, agreed in advance; and (3) a protection clauses you find in Medicare balanced approach to risk-sharing among Part D and the commercial side.” partners. Says Longman, these three ele- ments must work together, with increased to assess impacts on the government payer REFERENCE PRICING REDUX? information flow from drug companies to side,” Longman contends. “Hence a more Physicians and hospital clinics, as well as patients, providers and payers as the bind- flexible application of the best price rule biopharma, dislike the plan. Tenaglia sees ing glue. “The industry has an incentive to account for that up-front risk would be the debate in a broader context. “What’s to be more open to sharing information good for drug companies, though it will interesting is the US executive branch is because the unsaid truth is no one is going also challenge them.” Another incentive now in the once unthinkable position of to trust a price that’s spit out of a model toward value is renouncing the commer- seeking take-backs from the profitabil- drawn up by one of the interested parties.” cial rebate system where biopharma gives ity of both the health plans and the drug The elephant in the room is account- back-end discounts to PBMs and payers in manufacturers, to the point that it is pro- ing for the risk from federal regulations return for getting the rebated drugs a pre- posing what amounts to an international like the Medicaid “best price” require- ferred position on formularies. “If rebates reference pricing system for marketed ment, which requires manufacturers to are made less attractive, then commercial medicines. This has been anathema to give Medicaid plans the better of a 23.1% payers will be incentivized to look more every administration – not to mention the discount or the best price they offer in seriously at value-based contracting as drug industry – for decades.” the marketplace. The rule effectively an alternative.” Tenaglia’s comments lead to an ironic inhibits pharma companies from signing Collective action by industry to bring conclusion. In 2019, government is the contracts that could – if the drug doesn’t more clarity in assessing the value of a disrupter: a source of confusion, conten- work as expected – discount the drug drug is timely, as terms for engagement are tion — even opportunity — regardless of below that number. “Drugmakers can slowly becoming institutionalized. Under whether presidential polemics on drug put significantly more dollars at risk in a President Trump’s administration, HHS costs succeed or not. Industry efforts to value-based contract if they no longer have Center for Medicare and Medicaid Services navigate through this is hampered by the
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Trump administration’s inability to resolve most recently through its endorsement might have made rebates subject to legal a contradiction between a political com- of a new health economics modeling action, less remunerative to payers and mitment to price restraint and ideological platform (hero3models.info) developed less compelling to manufacturers as an opposition to a construct of value that is by Policy Analysis, a Boston-based eco- access point to millions of covered lives. not “market driven.” nomics consultancy. Gerry Oster, man- Nevertheless, PBMs, a bulwark of the re- A divided Congress is unlikely to step aging partner of Policy Analysis, tells In bate status quo, are testing new formulary in to resolve it, which means that change Vivo that because ICER is “now the most approaches to pull its benefit plan spon- on the government side will be driven important and influential HTA group in sors away from rebates. Employers are by administrative rulemaking that is the US,” its decision will “supercharge” moving ahead as well. Some 46 Fortune ad hoc and impermanent because it is assessment tools to a new level, beyond 500 companies have banded to form their susceptible to legal challenge. Observers the ubiquitous but outdated – and fre- own group, the Health Transformation Al- also see this strategy as scattershot and quently inaccurate — Microsoft Excel liance, to explore alternatives to the rebate inconsistent. They ask why there is little spreadsheet. “The heRo3 platform will model. Specifically, it is focused on making effort to address orphan drug indications, increase accessibility and ease of use of prices more transparent, with three pilot which now account for more than a third HTA while reducing time and expense, programs underway with CVS Health and of FDA novel drug approvals yet attract both of which will promote more rigorous UnitedHealthcare Inc. little opposition on price grounds. “What evaluations of new medical treatments.” Some analysts believe biopharma itself we have now is a disjointed process that In 2019, ICER might get an extra boost will be the first mover in forcing the struc- encourages gaming strategies on the in influence if Congress decides not to re- tural and behavioral changes required part of manufacturers and other provid- authorize funding for the Patient Centered to retire the rebate system. “In 2019, we ers,” says Ben Comer, senior manager at Outcomes Research Institute (PCORI), anticipate more pharma CEOs declaring the PwC Health Research Institute. “It’s established during the Obama administra- a desire to end the rebate system as it unclear how much actual savings will be tion to push outcomes-based approaches currently exists,” Nils Behnke, partner achieved through these actions.” to health care. Without PCORI, the federal and a leader of the global health care government will effectively disappear as practice at Bain & Co., tells In Vivo. “Price IMPERIAL ICER a source of new ideas for this kind of pressures are giving all participants in Biopharma confronts similar disruptions research. Hedge bet or not, key industry the health system more limited room to on the commercial payer side, particularly players such as Merck & Co. Inc., Novartis, maneuver, with biopharma particularly as the clout and credibility of third-party Regeneron Pharmaceuticals Inc., Glaxo- exposed due to its cost impact directly at evaluative groups like the Institute for SmithKline PLC and Sanofi are now rep- the point of sale.” Clinical and Economic Review (ICER) resented on ICER’s Advisory Board, which reach critical mass. ICER adheres to a gives ICER even more cachet as the default BLUEPRINT FOR THE NEXT DECADE: value assessment framework based partly arbiter of cost-effectiveness in the US. Says KAISER, TRANSPARENCY AND TRUST on the quality adjusted life year (QALY) Tenaglia, “It’s a big deal in this country Behnke says the most significant challenge metric used by foreign health technology to now have a legitimized third party for facing biopharma today is transparency. assessment (HTA) bodies and is criticized payers to hide behind – it’s the Kelley Blue “It’s coming at drug makers from all sides. by industry as rigid and prescriptive. This Book for cars transposed to drugs.” The new year will see acceleration of the metric is now incorporated in formulary threat from the adjacent retail space, with decision-making partnerships with CVS REBATES: SHEDDING LIGHT its open and competitive pricing primed Health Corp. and the US Veterans Ad- ON A DARK SPACE by data networks that provide real-time ministration. Meanwhile, action against the biggest evidence of what consumers [patients] Specifically, starting in 2019 CVS plans to structural flaw in drug pricing – the gap actually want. Retailers’ value proposition offer programs excluding drugs launched between list price and net price through aims directly at the third-party stratifica- at a price greater than $100,000 per QALY, manufacturer rebates to payers – seems tion; siloed, inaccessible data; and opaque as determined by ICER. There is an exemp- to be in a “time out” mode, at least as far pricing that is often used to describe tion for drugs that carry “breakthrough” as government is concerned. Although big pharma today. What companies like status from the FDA, but the consensus the CMS 2020 contract rule for Part D drug Walmart and Amazon seek to offer instead is most new oncology launches will not plans, released on November 13, proposes is a high touch-point convenience platform meet the QALY price test. Notes Tenaglia, to add access hurdles like prior authoriza- at lower cost, one that positions them as a “The average launch price for a new cancer tion and step therapy to the six big therapy future entry point to the health system for med is already well past this mark, so the classes where plans must cover all FDA-ap- a broad range of primary care services.” future suggests some hard choices must be proved drugs, it skirts the rebate minefield. What will these competitive attributes made in obtaining the access drugmakers It was silent on removing the “safe harbor” look like in practice? Behnke points to are counting on, particularly as a crush of guarantee that shields rebates from anti- the community-based population health new therapies come onstream.” kickback litigation, nor did it shift some framework accompanied by a delivery and ICER continues to refine its status as a of the savings PBMs obtain from rebates to financing construct of fully integrated net- creative source in economic assessment, patients at the point of sale. These actions works, such as Kaiser Permanente Health
December 2018 | In Vivo | 5 OUTLOOK
LIFE SCIENCES
Inc. “Kaiser is all about value for money, dence of positive survival data on the drug. the Study of Drug Development (TCSDD), buttressed by evidence, much of which it “This was a decision balancing price with tells In Vivo. Kaitin contends that the ex- generates itself. Kaiser strives to manage access, accomplished under conditions plosive growth of gene therapy and other every dollar of care, not just a piece of it. of full disclosure, without recourse to complex fields has led to a shortage of LABORATORY It is able to make trade-offs on service under-the-table rebates – a precedent that managers who understand how the new practice that other institutions cannot; it delivered market stability to a volatile drug science relates to the regulatory, P&R, needs no government agency to tell it what class. Bottom line it’s not something that marketing and compliance hurdles that the value is for a drug; and operates in con- big pharma would have done previously,” must be breached for future commercial SERVICES formity to markets working competitively, says Behnke. “But conditions dictate we success. At the same time, the scientific as they are supposed to work.” will see more of this in the future.” community is still trying to adjust to the LIFE INSPIRED, QUALITY DRIVEN Behnke says for biopharma there are In addition, there is movement toward adverse employment effects from the good and bad elements in this model, most that broader strategic framework around emphasis on translational over basic re- notably that it opens the door to bundled value touted by Longman and others. search encouraged by National Institutes pricing per course of therapy, that is, pro- In a recent policy viewpoint published of Health (NIH) directors during the past viders are compensated for the lung cancer in the Journal of the American Medical two decades. solution, where the cost of new drugs are Association (JAMA), Value-Based Pricing “Big pharma is hiring large numbers of evaluated against non-drug interventions. and Patient Access for Specialty Drugs, underemployed scientists from academia “It means that companies with the best three prominent stakeholders – from and expecting them to work cohesively in outcomes benefit from transparency. Mar- industry (Novartis), HTA (ICER) and a cross-functional, team-driven environ- ket forces work better where there is open academic research (UC Berkeley) – put ment fixated on short-term goals, all char- access to information. Moving away from forward criteria for a new system. In acteristics of a work culture that is foreign traditional rebates is a first step toward a summary, it proposed that drugs priced at to them. Many of these newcomers have more stable, value-driven pricing system or below value-based levels should face been given important responsibilities, NETWORK over time, where money is put to produc- “streamlined and more modest prior au- even though their background suggests tive use for innovators and patients.” thorization, step therapy and cost-sharing an inability to understand or relate to RELIABILITY But who will lead their peers and reverse requirements than those prevalent in the the commercial space,” Kaitin says. “The QUALITY course by taking that first step? “At the end US health care system today, while drugs result is frequent clashes between sea- of the day, some biopharma company will priced above value-based benchmarks soned therapeutic team leads and clinical assume the lead to make P&R more like a proposed by organizations meeting researchers coming from academia who normal market by abandoning rebates for criteria for rigor and independence can don’t know how to work in a corporate other solutions, perhaps by forgoing the continue more stringent requirements.” environment.” standard practice of seeking a price pre- For example, drugs charging value-based Kaitin, who advises large and small mium on a poorly differentiated product prices should be placed in the preferred pharma companies on managing drug merely because it is new,” Behnke says. formulary tier without co-insurance. development, thinks the problem is go- Instead, the evidence will rule. “If this is The viewpoint does not directly address ing to get worse as expectations ratchet done by someone in a big way, all those in the issue of rebates, but it is clear the up on everything from pipeline timelines GET TO MARKET QUICKLY, SAFELY & EFFICIENTLY the industry competing in crowded ther- proposed structure would achieve the to launch strategies, all requiring that SERVICES INCLUDE: apy segments will have to follow. There savings sought through the gross to net broad perspective to negotiate with payers SGS Life Sciences enables the medical and health • Biologics Characterization will ultimately be a lot more transparency margin, and in a far more transparent focused on the bottom line. • Extractables & Leachables about how development and opportunity way – one that builds confidence in the The issues resonate particularly for innovators of the world to deliver life-changing • Stability cost drive drug pricing and what the true health system overall and puts drugmak- what FDA calls “emerging sponsors” and • Biosafety returns on investment are.” Selective, ers closer to patients. biotechs, which are now the principal driv- solutions in the quickest, safest and most efficient • Microbiology incremental actions are already underway. ers of innovation – they account for 38 of way, helping improve the lives of many. In September, Gilead Sciences Inc. TALK TO ME the 55 novel drugs approved by the FDA so • Analytical Chemistry moved to undercut the rebate system by Certainly, the market in 2019 will be watch- far this year – yet often lack the savvy to CONTACT slashing list prices with authorized ge- ing the effect of these company precedents prevail in a value-based market. “Mastery [email protected] neric versions of its top-selling hepatitis C on revenues and share of business. What’s of those soft skills around work culture is brands, offering the opportunity to redirect left unsaid, however, is whether the bio- the hidden issue in pharma productivity www.sgs.com/lifescience savings back to consumers in a highly pharma majors can make the big cultural that won’t go away. It deserves priority transparent way. and organizational changes to move deci- as we enter a new decade of important Behnke points to another, similar ex- sively to embrace value. discoveries, because you can’t succeed in ample earlier this year where Regeneron “In large organizations, adapting to a the new world of value with good science took the public step of accepting a lower payer-led business model demands being alone.” than expected ICER price guidance as the able to connect the dots between drug IV124172 price point for its PCSK9 drug Praluent development and commercialization,” (alirocumab) in return for preferential Dr. Ken Kaitin, professor at Tufts Medical formulary access – in spite of fresh evi- School and director of the Tufts Center for
6 | In Vivo | December 2018
GENERIC AD.indd 1 2018-10-23 12:14 PM OUTLOOK
LIFE SCIENCES LABORATORY SERVICES LIFE INSPIRED, QUALITY DRIVEN
NETWORK RELIABILITY QUALITY
GET TO MARKET QUICKLY, SAFELY & EFFICIENTLY SERVICES INCLUDE: SGS Life Sciences enables the medical and health • Biologics Characterization • Extractables & Leachables innovators of the world to deliver life-changing • Stability solutions in the quickest, safest and most efficient • Biosafety way, helping improve the lives of many. • Microbiology • Analytical Chemistry
CONTACT [email protected] www.sgs.com/lifescience
GENERIC AD.indd 1 2018-10-23 12:14 PM OUTLOOK
Medtech Rises To Challenge Of Meeting Infinite Heath Care
ASHLEY YEO Demand With Finite Resources EXECUTIVE EDITOR, MEDTECH, EUROPE The relative absence of blockbuster M&A within medtech in 2018, compared with recent years, does not mean that consolidation of the industry – and of providers and payers – will not continue apace in 2019 and beyond. In fact, it is written – if not in the stars then possibly in digital coding – that there will be fewer and bigger entities at the top end of the ecosystem of medtech stakeholders. And rising demand will be met more and more by digital tools and functionalities.
Digital and data-enhanced health care, AI and machine NHS is undergoing what chair Mike Farrar said are the learning, and the perceptions of them, have evolved so “toughest service and economic operating conditions rapidly that is now is a matter of how quickly, not if. In a the NHS has ever known,” which include nursing and sector beset by cost and other pressures, companies are radiographer shortages. getting smarter about how they do innovation and what innovation they buy – being guided more by how mean- UK VERY MUCH IN THE SPOTLIGHT ingful it is, whether it meets clinicians’ needs and how it One part of the answer is to move to integrated systems fits into their workflows. Early-stage funding is reportedly that have sizeable footprints. Another part is to con- on the uptick, and will be interesting to watch in 2019. struct innovations that are easy for clinicians to use M&A took a breather of sorts in 2018, with fewer in their day-to-day. Wanted or otherwise, the UK is a and relatively smaller buys, but nonetheless all stra- focus of global attention right now. A lot of its ideas are tegically targeted. Oncology, diabetes and – in a big worthy, provide benefit and are models to emulate – if way – orthopedics took most of the headlines. As the often poorly-funded and late to arrive. This year, for in- industry matures, observers wonder how these trans- stance, the UK is provider published, for the first time, actions will affect the commercial reach of companies a list of research needs to support evidence-based com- that build: shareholder value by being No. 1 or No. 2 missioning and improving outcomes for patients. The in the markets; and patient-centric value by shaping 19-page document, published in September, focuses innovation to desired outcomes. on six priority areas, including cancer, diabetes, men- Companies realize that payment models must be tal health and specialized commissioning. But making flexibly aligned will the outcomes-driven policies these ideas reality needs a three-way collaboration being adopted by providers, IDNs, hospitals and between industry, the research community and the trusts. “Value-based” is being increasingly applied provider – and this is indeed a problem for systems to reimbursement and procurement transactions, and to grapple with the world over. companies, while not charities, see the need to play a In 2019, the UK’s Life Sciences Industrial Strategy and role in helping hospitals either make or save money. subsequent offshoots will start to bear fruit. In late 2018, But given that all providers are time poor, this is prov- as part of the strategy, funding was announced for five ing harder than it should be. diagnostics centers of excellence in machine learning, Health care is on a journey to a fully-digitized and AI for pathology and radiology, partnering with Siemens personalized diagnostic environment, where health Healthineers, GE Healthcare, Leica Biosystems, Canon systems can host genomics data and individual fam- Medical Systems (acquirer of Toshiba Medical Systems ily history data, rendering far more precise diagnoses in January 2018), Roche Diagnostics and Philips. for patients. That is the goal. But health care systems are under pressure because “we have finite resources PRIORITIES FOR THE NEW HEALTH CARE but almost infinite demand.” So says Neil Mesher, of ERA – THE FIVE PS Royal Philips UK and Ireland. The future of health care delivery can neatly be Mesher was a speaker at the UK ABHI’s 30 anniver- summed up in “five Ps.” Medtech innovators will in sary event in November 2018, where the consensus future be playing in a market dominated by several was around the need for industry to work smarter themes: personalization, with individuals taking more with suppliers and providers. His generic message care of their own health using apps; precision in medi- applies across all delivery systems in the developed cine, with AI and machine learning aiding precision world, but it was acutely targeted at the UK, where the diagnoses for individual patients, and data being
8 | In Vivo | December 2018 OUTLOOK
turned into information; the productivity able to health care professionals, too little challenge; preventive care and monitoring of it is meaningful data and clinicians patients in real time; and partnerships. and researchers are simply not getting ❚ SIX POINTERS FOR The sense is that single organizations the value out if it. The need is for a smart A RESHAPED FUTURE or institutions cannot tackle these chal- electronic medical record (EMR), which FOR MEDTECH lenges alone. is not just about data, but about the wha Philips is a top-three medtech group data, i.e. where data is limited and targeted Deloitte’s Centre For Health Solu- globally, and should be vying with GE to precise and immediate needs. That way, tions issued a report in 2018, The Healthcare to retain third place once 2018 it can be targeted to a person specifically, Future Awakens, in which the group results are released. However, low nominal and made 100% relevant. predicts new developments or un- growth of 0.5% in the first three-quarters As to the pace of uptake of digital tech- derlines existing stakeholder trends and a 3% impact on sales from exchange nologies, Microsoft’s Elena Bonfiglioli says that will have taken hold by 2022. rates and consolidation changes will that in the coming 1-2 years, systems must In Vivo profiled the findings in June not see it make up ground on Johnson confront a number of priorities to ensure after speaking to Deloitte at European & Johnson. Market leader Medtronic is that the building blocks are in place to medtech conferences. In December set to be the first-ever global $30 billion facilitate uptake. The first is to address the 2018, UK research manager Mark medtech group in 2018, given its proximity skilling of future generations of health care Steedman reprised the predictions at to that threshold in 2017 and its mid-single professionals and teaching people what the UK HealthTech 2018, held in Cardiff, digit growth outlook for 2018, according to future workplace will look like. The second Wales. He said key changes would guidance from (Jefferies LLC in Aug. 2018). priority is to help regulators understand revolve around: Growth for medtechs in the US has been both the opportunity cost and the benefits helped by stable conditions. 2018 has seen of embracing new technology. They should • the genome generation – i.e. the providers focus on cost reduction through also be made accountable for “cloud-first, “quantified self” – taking ever greater means other than pricing; there has been innovation-first, patient-first” policies. control of their own health, including a continued shift to higher-acuity proce- via lifestyle and weight-loss app- dures; and there has been an emphasis on PRIORITIZE MEANINGFUL based programs; creating service models that support higher INNOVATION – ALL ELEMENTS procedure volumes. It transpires that the Bonfiglioli’s third priority is to integrate • digital technologies transforming main driver in 2018 has not been cost, but both innovation and economic develop- health care – where smart health care rather the determination to leverage favor- ment more purposefully into the health is delivering patient-centered solu- able market volume trends and improve care agenda. Investing in start-ups and in tions ever more cost-effectively; efficiencies in the delivery of care. These are the innovation capabilities of SMEs comes the kind of positive mindset changes that under this umbrella. There is evidently • the “industrialization” of the life the medtech majors have been leading on. a role for government health ministries, sciences, with AI and cognition tech- But for companies large and small, the but they still tend not to have innovation nologies increasingly standardizing battle to cut costs is about to get even more responsibilities. This activity needs to be processes; intense, says Bain & Company, quoting its more joined up. own recent survey that shows that 80% of Right now, there is an interesting • data becoming the “new health- medtech executives expect to face “high” or amount of innovation still in health care, care currency”, with AI and real-world “very high” cost pressures in the next two to and the pace of “meaningful innovation” is evidence unlocking the value in health three years as the industry adapts to chang- the best it has been in a decade, or maybe data; ing market conditions (see Box: Six Point- even longer. Raj Denhoy, of Jefferies LLC, ers For A Reshaped Future For Medtech). told In Vivo in fall 2018 that, in terms of • “futuristic medicines” such as CAR- Professionalization of purchasing teams really innovative, clinically-meaningful in- T therapies penetrating markets more and consolidation of hospital networks are novation that is making its way to market, aggressively (CAR-T could become a just two of the trends putting pressure on “we are probably in a better position than $35 billion to $100 billion market in prices. Philips’ Carla Kriwet this year told in a long time.” 10-15 years’ time, Steedman believes); in In Vivo that the 5,500 hospitals in the Companies have got a lot smarter about and US might in five years’ time all be part of how they do innovation – not just about just 20 hospital networks. Some European the technology but they now understand • the tech giants playing and ever- countries are seeing similar developments. the cost effectiveness of it, and how it fits bigger role in health care, in the ex- into the way treatments are delivered, ample of last year’s JP Morgan Chase, DATA MUST BE BETTER FILTERED he says. Devices are improving clinical Berkshire Hathaway and Amazon AND TARGETED outcomes and trying to address the cost tie-up. Kriwet, Philips’ business leader for con- side of delivery, which haven’t been con- nected care and health informatics, says siderations historically. “We’re NOW in a that in spite of the volumes of data avail- phase where we’re seeing transcatheter,
December 2018 | In Vivo | 9 OUTLOOK
neurovascular and neuromod devices, is willing to accept those sort of concepts, rope. The UK group’s costs associated with surgical robotics, peripheral vascular tools and in the way that customers view medi- the NB transition and implementation of and more – so much new technology – cal device companies – either as suppliers the MDR are expected to be £10 million to coming to market. More so than we’ve seen of technology or as partners in the delivery £15 million ($12.8 million to $19.2 million) in a long time.” of health care. in each of FY 2019 and FY 2020, it believes. Another positive is that there is anecdot- However, the ball is rolling. MDT’s Omar The implementation of the MDR will ally more series A venture capital funding Ishrak warns that the sector cannot wait impact markets and companies outside the happening in the US, says medtech indus- for fee-for-service (FFS) to be gone before EU too. Jack Wong, of the Asia Regulatory try association AdvaMed, and generally embarking on VBHC. “It’s a step we have to Professional Association (ARPA), told In more funding in the early stages. The levels take to make sure that the value we create Vivo that local markets that rely on EU of funding have been increasing since with our technologies is truly realized. And regulatory frameworks would have to over- 2014, but the focus has been more later- when it is realized, we get paid fairly for see label changes, NB number changes than early-stage, and that is now thought it,” he told the US media in spring 2018. and possibly NB name changes. to be changing. The disruption caused by the MDR could REGULATION: MDR WILL BE COSTLY be extensive, as it will entail a welter of ADDRESSABLE MARKETS REQUIRE AND COMPLEX TO COMPLY WITH additional clinical documentation require- NEW TACTICAL APPROACHES The EU Medical Device Regulation (MDR), ments. Many companies simply will not These changing market conditions are ad- published in May 2017, will impose signifi- continue to carry all their old products, see- dressed by the major players in different cant additional premarket and post-mar- ing them as too costly to support, so many ways. Along with “Therapy innovation” ket requirements on medical device firms products will be “killed or deleted.” And if and “Globalization,” “Economic Value” is – within and beyond EU/EEA borders. they are not available in Europe, they will a now one of the three primary strategies at Roughly half of the three-year imple- not be available to patients in Asia. There is market leader Medtronic. This sets the goal mentation phase, until May 2020 (IVDs usually a time lag of two years between EU of becoming a leader in value-based health have a five-year implementation period to use and Asian use, but the main problem care (VBHC) by offering new services May 2022 under the sister regulation, the is that no one knows which products will and solutions to improve outcomes and IVDR), has elapsed already. It is still not be maintained in the EU. efficiencies, lowering costs by reducing clear when the panic will set in, or indeed “The competent authorities (CAs) are hospitalizations, improving remote clini- if, behind closed doors, it already has. (We still rolling out the MDR, and no NBs have cal management, and increasing patient can assume the latter.) Industry – via the been certified to work under the MDR yet,” engagement. Medtronic is at the forefront national associations – is frustrated, not said Wong, speaking in October. “Because of shaping the new environment, develop- to say livid, that it has been given so little Europe is still in a learning curve and there ing new relationships and taking forward time to conform to a regulation that it al- is much unpredictability, Asia has a major partnerships as health care transforms. ways maintained was to either too strict, planning difficulty as it seeks to address In its 2018 white paper, Transforming or was given too short a deadline. Or both. the new registration requirements – and Medtronic, the Irish-based multinational Devices with valid CE certificates, issued time is ticking away all the while.” The pa- says that a substantial share of the $7.8 tril- pursuant to the Medical Device Directives tient impact will become apparent in Asia. lion annual global health care spend (the US (MDD) before May 2020, can be placed on share is $3 trillion to $3.5 trillion) is bound the market until May 2024. BREXIT WILL CAUSE UNTOLD up in delivery systems that have misaligned Germany, for one, has asked for more PROBLEMS incentives and are overseen by cumbersome time, stressing that EU notified body (NB) Brexit’s “due date” is almost upon us government policy and regulations. Health capacity is under huge strain: without – March 29, 2019 – yet few would be sur- delivery is disjointed such that health care fully functioning NBs, the decentralized prised if, in 12 months’ time, it is still an systems waste 20% to 40% of the annual EU regulatory system comes to a stop. The unresolved theme for industry. spend on global health – a sobering $1.5 Eudamed database, which is the IT-based Business has its own loyalties and will trillion at the lower end of the range. system of modules that is to be the record- eventually go with its head, not heart. In But VBHC is a hard concept for some keeping, post-market, reporting system summer Het Financieele Dagblad reported medtechs to engage in. The incentives in – and the basis for the yet-to-arrive UDI that Royal Philips had released an ambigu- the health care industry, as currently set, system for traceability and transparency ous statement about its future in the UK, do not encourage it: medtechs are still of devices – is not yet up and running. should Brexit make it hard to do seamless accustomed to being paid for a service, business. Some months later, speaking to which is more straightforward than being COST OF MDR TRANSITION investors at its third quarter earnings Q+A, paid for an outcome. Observers say that Smiths Medical this year gave some in- Philips’ CEO Frans van Houten took up the although slow, VBHC is becoming a reality, sight into how disruptive and costly the theme anew, saying he estimates the impact even if its early champions are not neces- MDR will be on an annual basis. Its 2017- to be in the high-single digits in terms of sarily seeing direct financial pay-offs yet. 2018 financial performance was impacted goods flow. It would be a minor enough Denhoy ventures that the pace of uptake by the transition to a new NB, which led to effect and thus would not to influence the really depends on whether the customer a short-term suspension of products in Eu- global results of Philips, “but it does poten-
10 | In Vivo | December 2018 OUTLOOK
Exhibit 1 Billion Dollar Medtech M&A in 2018*
BUYER TARGET AREA OF PLAY PRICE PAID NOTES Boston Scientific BTG Interventional medicine £3.3bn ($4.24bn) Summit Partners Sound Inpatient Physician Acute care services $2.2bn Bought the controlling Holdings interest that was previously held by Fresenius Platinum Equity LifeScan – J&J’s diabetes Diabetes $2.1bn business Roche (Switzerland) Flatiron Health Oncology management $1.9bn The outstanding 87.4% software Medtronic Mazor Robotics Surgical robotics $1.6bn (Israel) CDH Investments Sirtex (Australia) Oncology $1.4bn Outbid a $1.3bn offer from (China) Varian in the same year Stryker K2M Orthopedics $1.4bn Veritas Capital GE Healthcare’s value- $1.05bn based health-care division
*To November 30. US unless stated. Includes officially-disclosed transaction values only. SOURCE: In Vivo | Pharma Intelligence tially make manufacturing in the UK less the M&A field, which by August alone had robotic-assisted orthopedic procedures; attractive,” he said. The lack of progress on amassed an average of one major buy per and Medtronic taking its 2016 partnership a frictionless border is a concern, he added. month. In summer 2018, CMO Ian Meredith with Israel’s Mazor Robotics to the natural And if van Houten says it, it is a safe bet that explained the rationale to In Vivo, and also conclusion and spending over $1.6 billion many others are thinking it. put the lid firmly on WSJ-inspired specula- cash to own all outstanding shares and bring tion of a mega tie-up with Stryker. it fully in-house. SELECTIVE M&A IN 2018 Stryker, like Boston, is a seasoned ac- For the time being, the tech companies The blockbuster M&A deals were fewer in quisitions specialist. In 2018, its one major that have the potential to disrupt the 2018 (see Exhibit 1) than in previous years, M&A play brought complex spine special- medtech industry status quo have kept rela- when there have been ten or more billion- ist K2M into the group for $1.4 billion. K2M tively quiet in 2018 – ResMed’s joint venture dollar-plus deals, several of which have plays in a global spine market of $10.8 with Alphabet company Verily (advanced gone well into double-digit billions. That billion, according to 2017 data from iData, health data analytics technologies) to study has not been the case in 2018, but as Jeffer- of which $1.7 billion is complex spine – a undiagnosed and untreated sleep apnea ies’ Denhoy has said, there is absolutely no market that is said to be underserved by and develop software solutions being one reason for industry consolidation to stop the majors (the big four spinal players – exception. But these kinds of partnership next year and beyond. Medtronic, Stryker, Zimmer Biomet and are giving credence to experts’ predictions As of the end of November 2018, Boston DePuy Synthes –plus Globus Medical). that traditional medtechs, with their legacy Scientific has been the busiest – both the This field also includesSeaSpine, Orthofix of clinical knowledge, will still be calling the biggest and broadest buyer of the year – International and Alphatec. Degenerative shots in future health-care delivery models. participant in M&A with its £3.3 billion offer spine is the biggest segment ($6.4 billion). And what to make of the much-reported to bring BTG PLC into the fold. BTG has long Oncology therapy company Varian founding of the – still nameless – Amazon. looked a potentially attractive addition to any Medical Systems failed to net Sirtex, but com/JPMorgan Chase & Co./Berkshire of the leading-edge, high-risk medtech con- made a number of other acquisitions in Hathaway Inc. health venture, set up in cerns. Its laser focus on portfolio-building its target sector, including Mobius Medi- January 2018 to improve the health of their interventional medicine – oncology and cal Systems and Evinance Innovation joint staff? Little happened at the venture vascular – has made it stand out from com- (both cancer management software) and until June, when Harvard surgeon Atul panies that use a broader brush to build their humediQ (radiation therapy). Last year, Gawande was appointed to run it, and medtech businesses. But it has also been Varian spun out its imaging components then Jack Stoddard was named COO in fiercely independent, so the fit with Boston – business into Varex Imaging. September. There is no rush they say. But on a portfolio, R&D and cultural level – must Notable moves in the orthopedic sector in- what does it mean for traditional medtech be as promising as CEOs Louise Makin (BTG) cluded Johnson & Johnson’s DePuy-Synthes and health care delivery more generally? and Mike Mahoney (Boston) claim it is. acquisition of French company Orthotaxy, We will surely find out more in 2019. That capped a major year for Boston in signalling its perhaps belated move into
December 2018 | In Vivo | 11 SCRIP 100
SPONSORED BY:
Connecting With The Patient And Improving Results In Patient Recruitment And Engagement
It seems obvious that focusing on the patient is what you would do to improve patient recruitment, right? Is this what the industry has been doing in the past or has the focus just been on the number of patients and related data? E.B. McLindon, Senior Vice President, Site and Patient Solutions, explains how ICON is taking a different approach with its Integrated Site Network and how getting more connected with the patient and easing the burden is really making a difference to enrollment rates.
E.B. MCLINDON Why did a CRO decide to acquire a site network? out there – some CROs and some service providers – that SENIOR VICE PRESIDENT, ICON acquired a clinical research site network are accessing EMR and trying to develop big data and heat SITE AND PATIENT because we wanted to get closer to patients and physi- maps. ICON’s approach is to go directly to the patient. SOLUTIONS, ICON cians. By acquiring PMG, we would learn more about Patient matching is even more necessary now be- CLINICAL RESEARCH operational management at the site level and we would cause if you look at the evolving drug development SERVICES also learn a lot more about what appeals – and doesn’t marketplace, a vast percentage of drugs in development appeal – to patients. are no longer looking for walk-around populations. We were also looking at using electronic medical records They are more complex and looking for comorbidities. [EMR] as a pull-through for patient recruiting. The Inte- You really have to know what motivates the patient to grated Site Network service model was of particular inter- participate and stay engaged throughout the study. est since it becomes the central trial unit for a health care Our Integrated Site Network team knows the patients system. Operating at that level, our site network team has and has relationships with the physicians. The team access to EMR through business associate agreements and can combine these at the point of care and offer clinical can match patients into studies. There are many companies research as a care option. It’s a viable model not just for today, but for the future. As you look at where the health care systems are going and the disruption with groups like Google and Amazon coming into the health care space, there is a need to be able to get direct access to the patient population.
How does the connecting with the patient improve patient recruitment and engagement? What makes the Integrated Site Network model of more value is the ability to not just know who the patients are, but to get their timely feedback. Our “Patient Voice” pro- gram connects directly with the patient to get an under- standing of what they are interested in and what is viable. We can ask patient populations specific questions about a particular protocol or a particular technology that we are thinking about deploying to collect data. For example, sometimes patients like electronic data capture options
12 | In Vivo | December 2018 SCRIP 100
such as Bring Your Own Device [BYOD] and sometimes they don’t, so it’s speed and cost of drug development. Our Integrated Site Network good to get their feedback ahead of time as opposed to forcing another is part of a mosaic that we are deploying for our clients in order to device, which can add a burden and impact on retention. Hearing the help deliver value to their development plans. patient opinion and being able to adjust the way we operate at the site level allows us to bring greater efficiencies to our sponsors. What other kind of efficiencies does an Integrated Site Net- At the same time, we have also engaged many of the network physi- work bring? cians in the process of protocol review. Combining the patient and site Some of the timing on the front end is saved. Another thing that voice further upstream in the process of development often yields better is equally valuable is the reliability of the feasibility data from sites. outcomes. Our focus as we work with sites, not just network sites, but According to industry statistics, 35% of sites that initiate studies enroll also other alliance sites in our virtual network is to ease the burden zero or just a few patients, which is usually a direct correlation to for sites as well as patients to participate in clinical trials. If you know feasibility. With our model, we get more reliable, accurate data about ahead of time what the burden might be and make conducting the study the number of patients projected against what sites actually recruit. easier, you can help the site and the patient to overcome barriers and This increases predictability and reduces time in the overall process. you will get better data and a better result for the sponsor. Does drug development need to move toward the model of How does an Integrated Site Network translate into efficiencies integrating clinical research and health care? in conducting clinical trials? Clinical research has always been a care option in oncology. The easiest way to explain it is with a brief case study. We had a Our Integrated Site Network model has enabled us to expand this sponsor who came to us for a Phase II interventional program. They across all therapeutic areas. Because our team is embedded inside were only looking for 60 patients in the study, but they wanted to a health system, it’s easier for them to promote research as a care engage 20 sites. They were anticipating that each site was going to option since they are in the same office and the same building as enroll only three patients because of the complexity of the study. the health care providers and their patients. We worked with the client on an alternative strategy. Our Integrated We can also support physicians who are eager to get into research, Site Network’s central feasibility team did an analysis and patient but don’t necessarily know how. In one case when the health care matching, which identified patients ahead of time. We realized we system began working with our Integrated Site Network, they had could identify more patients per site in at least the same time frame. only eight physicians engaged in research and after just 18 months With this alternative approach, although we only fired up half the they had 24 physicians in research. They not only tripled the number number of sites, we enrolled twice the number of patients per site of physicians working in research, but they increased the number of and had almost half the projected number of screen failures. We were patients involved in research fivefold. The efficiency that this has cre- also able to get the enrollment done in almost half the amount of ated at the site level for patients and doctors is what then drives better time. What was the end result? We saved the client time and money. outcomes for our clients. Being able to connect with the patient and There are several ways that ICON is helping sponsors improve the physicians and increase their participation is the value of our model.
December 2018 | In Vivo | 13 SCRIP 100
Top 20 Pharma Ranks: As Some Move Up, Others Fall Down
Sanofi and Gilead moved down in the rankings of Scrip’s top 100 pharmaceutical companies, based JESSICA MERRILL SENIOR EDITOR, on 2017 pharma sales, while Johnson & Johnson, GSK and AbbVie moved up. Shire joined the top PHARMA, US 20 just as it is about to be consumed by Takeda.
The top 20 names in the latest Scrip 100 listing, based 2018. The acquisition represents the fifth largest bio- on full year 2017 pharmaceutical revenues, were pharma deal in history. largely unchanged from the previous year, but there The top 20 pharmaceutical companies saw an im- were some fluctuations. One notable change was that pressive $523.0 billion in combined pharmaceutical Shire joined the ranks of the top 20 for the first time, revenues in 2017, versus $507.1 billion generated by just as the Irish-headquartered pharma is poised to be the top 20 class the prior year. There were some minor consumed by Takeda Pharmaceutical. changes in the accounting for healthcare revenues in Shire moved up from being the number 24 pharma- 2017. The most recent Scrip 100 data were collected ceutical company in the world in Scrip 100’s 2018 rank- by Datamonitor Healthcare, using a slightly altered ings to number 19 this year, knocking out Astellas and methodology to last year. pushing Boehringer Ingelheim down to number 20. In comparison, the 100 top pharmaceutical com- Now, with Takeda’s proposed merger of Shire heading panies generated $747.0 billion in pharma revenues toward a close at the start of 2019, the combined company in 2017, demonstrating the dominance of the top 20 will be poised to shake up the top 20 company rankings companies in the industry. next year. The new Takeda would be on track to move CLICK up to the number seven position in the Scrip 100 from its PFIZER HOLDS TOP SPOT
View additional data on current place at number 18, based on Takeda and Shire’s Pfizer Inc. held its strong lead as the number one Pharma’s Big Spenders combined 2017 pharma revenues of $30.5 billion. pharmaceutical company in the world, with more online at: Takeda is acquiring Shire for $62.4 billion and the than $49 billion in pharmaceutical revenues, while https://bit.ly/2BhfOa9 deal represents the industry’s only mega-merger of Novartis and Roche held their number two and num-
14 | In Vivo | December 2018 SCRIP 100
ber three positions, with $43.1 billion and $40.5billion in pharma R&D Spend As Percentage Of FY 2017 Sales revenues, respectively. Aside from Shire, other drug makers moved up in the top 20 rank- ings, including Johnson & Johnson, which moved up from number P zer 14.50% six to number four on strong 8.3% pharmaceutical revenue growth. On the Scrip 100 list, J&J swapped places with Sanofi, which is continuing to face a challenging environment for its diabetes and Novartis 18.30% cardiovascular disease business segment. GlaxoSmithKline and AbbVie, neck-and-neck with $28.8 bil- Roche 19.70% lion and $28.2 billion in revenues, respectively, each moved up one slot to number seven and eight in the rankings. Elsewhere, J&J 13.50% Gilead is one company that saw its ranking fall from number seven to number nine; its 2017 revenues fell 14.3% to $26.1 billion from $30.4 billion in 2016, on lower sales of its hepatitis C medicines. Merck 24.90% Teva managed to hang onto its position in the top 10, despite a challenging environment for US generic drugs and the loss Sano 15.50% of exclusivity of the important 40 mg version of its blockbuster Copaxone (glatiramer) in October 2017. The impact of the loss of 14.70% Copaxone was felt more acutely in 2018 and could drop Teva out GSK of the top 10 list in the upcoming Scrip 100 collection. Bristol-Myers Squibb continued its steady climb up the pharma AbbVie 17.60% rankings from number 17 in 2017’s Scrip 100 and number 15 last year, to number 14 in the 2019 publication, driven by strong sales Gilead 13.60% of the immuno-oncology pillar Opdivo (nivolumab) and hematol- ogy product Eliquis (apixaban). Teva 8.20% PHARMA’S BIG R&D SPENDERS The top 20 pharmaceutical companies invested $108.6 billion into re- Amgen 15.60% search and development in 2017, with the highest spenders being Roche and J&J, which invested $10.6 billion and $10.4 billion, respectively. BMS 30.80% The spend by the diversified companies goes toward more than just pharma R&D however, and J&J is the largest of the diversified phar- mas included in the Scrip 100. Including J&J’s medical devices and AstraZeneca 25.70% consumer healthcare businesses, the big pharma is the largest com- pany in the group based on consolidated revenues of $76.5 billion. Eli Lilly 23.00% Thus, J&J’s R&D investment, while significant, represented only 13.5% of consolidated revenues. Nonetheless, the company Bayer 12.80% directs most of its R&D spend to the pharmaceuticals groups and J&J raised its investment in R&D by 16% in 2017 versus 2016. The company directed about $8.4 billion to pharma R&D in 2017, or Novo Nordisk 11.80% 23% of pharmaceutical revenues. Roche’s investment is one of the highest spends in the industry at Allergan 12.50% 20% of consolidated revenues. But Roche’s spend as a percentage of consolidated sales was outpaced by Bristol-Myers, AstraZeneca 19.20% and Merck & Co. Bristol invested a notable 30.8% of revenues into Takeda R&D. AstraZeneca invested 25.7% of revenues, or $5.78 billion, in R&D in 2017, though the spending declined a slight 2.3% in 2017 Shire 11.30% versus the prior year. Merck’s $10 billion R&D investment repre- sented 24.9% of revenues. BI 17% Teva had the smallest R&D spend among the top 20 pharmaceu- tical companies as a percent of revenue, with its $1.85 billion R&D 0 5 10 15 20 25 30 35 investment representing 8.1% of consolidated sales. Teva’s R&D investment declined about 12% over 2016, unsurprisingly given the SOURCE: Scrip | Pharma Intelligence company’s ongoing financial challenges. Shire and Novo Nordisk were also on the smaller end of the investment scale, investing 11.3% and 11.8%, respectively, in R&D. IV124161
December 2018 | In Vivo | 15 SCRIP 100
The World’s Top 100 Pharma Companies By Drug Sales ($M)
PHARMA SALES RANK 2019 PHARMA SALES RANK 2019 COMPANY (FY 2017) (2018) COMPANY (FY 2017) (2018)
Pfizer1 49,074.0 1 (1) Merck KGaA17 17,287.9 26 (26)
Novartis2 43,085.0 2 (2) Otsuka Pharmaceutical 6,909.3 27 (27)
Roche3 41,879.1 3 (3) CSL18 6,616.2 28 (29)
Johnson & Johnson4 36,256.0 4 (6) Bausch Health19 5,534.0 29 (28)
Merck & Co5 35,390.0 5 (4) Eisai 5,414.1 30 (30)
Sanofi6 34,089.8 6 (5) UCB20 4,717.0 31 (33)
GlaxoSmithKline7 28,893.6 7 (8) Servier21 4,683.2 32 (32)
AbbVie 28,216.0 8 (9) Abbott Laboratories22 4,287.0 33 (36) Dainippon Sumitomo Gilead Sciences8 26,107.0 9 (7) 4,212.1 34 (38) Pharma Teva Pharmaceutical 22,385.0 10 (10) Sun Pharmaceutical 4,097.6 35 (31) Industries Amgen9 21,795.0 11 (11) Menarini23 4,060.6 36 (37)
AstraZeneca 20,151.8 12 (12) Mitsubishi Tanabe Pharma 3,914.5 37 (35) Regeneron Eli Lilly10 19,785.7 13 (14) 3,718.5 38 (39) Pharmaceuticals24 Bristol-Myers Squibb11 19,258.0 14 (15) Alexion Pharmaceuticals 3,532.4 39 (40)
Bayer12 19,002.3 15 (13) Endo International 3,468.9 40 (34)
Novo Nordisk 16,936.9 16 (16) Mallinckrodt25 3,057.5 41 (41)
Allergan 15,940.7 17 (18) Fresenius Kabi 3,044.3 42 (42)
Takeda13 15,282.9 18 (17) Lundbeck 2,613.2 43 (47)
Shire14 14,448.9 19 (24) STADA 2,610.0 44 (46)
Boehringer Ingelheim15 15,000.4 20 (19) Kyowa Hakko Kirin26 2,460.5 45 (44)
Celgene 12,973.0 21 (22) Lupin27 2,397.8 46 (45)
Mylan16 11,760.0 22 (23) Baxter International28 2,338.0 47 (48)
Astellas 11,732.3 23 (20) Cipla 2,328.5 48 (50)
Biogen 10,354.7 24 (21) Humanwell Medicine 2,264.4 49 (74)
Daiichi Sankyo 8,663.5 25 (25) Dr Reddy's 2,203.1 50 (49)
1Excludes Consumer Health Care 17E Sales for health care segment 2Innovative medicines and Sandoz 18Excludes royalties 3Excludes Diagnostics 19Formerly known as Valeant; includes 4Excludes OTC branded plus other generics; excludes OTC 5Excludes Animal Health and other revenues 20Excludes contracts and royalties 6Excludes Consumer Health care 21Private company 7Vaccines and Pharma 22Sales for established pharma segment 8Excludes royalties and other revenues 23Private company 9Excludes royalties 24Excludes contracts and license fees 10Total (22871.3) - Animal (3085.6 25Sales for specialty plus generics; 11Excludes alliances and other revenues excludes oxycodone and hydrocodone 12Pharmaceuticals division only 26From Annual report and Edward’s geomodel 13Excludes royalties and service income 27Excludes contracts 14Excludes license fees and royalties 28Pharmaceutical GBU + Other 15Sale for prescription Medicines division and Biopharmaceuticals Division 16Excludes contracts
16 | In Vivo | December 2018 SCRIP 100
The World’s Top 100 Pharma Companies By Drug Sales ($M)
PHARMA RANK 2019 PHARMA RANK 2019 COMPANY SALES 2017 (2018) COMPANY SALES 2017 (2018) Glenmark Vertex Pharmaceuticals28 2,165.5 51 (56) 1,407.6 76 (73) Pharmaceuticals Santen Pharmaceutical 2,029.6 52 (55) Teijin Pharma37 1,401.9 77 (70)
Hikma Pharmaceuticals 1,936.0 53 (52) Vifor Pharma38 1,363.6 78 (77) Shanghai Fosun 1,930.0 54 (59) BioMarin Pharmaceutical 1,319.0 79 (81) Pharmaceutical Group Chiesi 1,900.6 55 (54) Hisamitsu 1,296.9 80 (89)
Ono Pharmaceutical29 1,857.7 56 (51) Yuhan Pharmaceutical 1,293.4 81 (156)
Sino Biopharmaceutical30 1,843.9 57 (87) Shionogi39 1,256.0 82 (66) China National 1833.618531 58 (71) Asahi Kasei Pharma40 1,208.1 83 (114) Pharmaceutical Group Ipsen31 1,795.6 59 (67) Incyte41 1,200.3 84 (99)
Aurobindo32 1,785.2 60 (78) AlfaSigma42 1,164.0 85 (95)
United Therapeutics 1,725.3 61 (58) Merz 1,154.1 86 (79) Jiangsu Hengrui Medicine 1,665.2 Green Cross 1,128.5 87 (97) Co. Ltd. Sichuan Kelun 1,664.7 Indivior 1,093.0 New Entry Pharmaceutical CSPC Pharmaceutical 1,627.3 64 (96) Orion Pharma43 1,080.1 89 (93) Group Ltd.33 Gedeon Richter 1,620.6 65 (69) Horizon Pharma 1,056.2 90 (92)
Jazz Pharmaceuticals34 1,601.4 66 (63) Pierre Fabre 999.4 91 (91)
Leo Pharma 1,589.3 67 (64) Kyorin 998.3 92 (88)
Cadila36 1,577.5 68 (77) Perrigo44 988.9 93 (86)
Zhejiang Hisun Pharma 1,550.7 69 (65) Japan Tobacco45 933.7 94 (104)
Meiji Holdings 1,519.4 70 (62) Torrent Pharmaceuticals46 911.6 95 (115)
Sawai Pharmaceutical 1,516.4 71 (80) Mochida Pharmaceutical 910.4 96 (107)
Gruenenthal 1,504.7 72 (60) Daewoong Pharmaceutical 849.4 97 (127)
Nichi-Iko Pharmaceutical 1,486.2 73 (61) Towa Pharmaceutical 843.0 98 (105)
Recordati 1,452.9 74 (72) Taisho Pharmaceutical47 823.4 99 (98)
KRKA 1,428.4 75 (83) Hanmi Pharm 810.8 100 (106)
29Excludes royalies and collaborative revenues 37Sales for health care segment 30Excludes royalties 38Formerly know as Galenica 31Sales for modernized Chinese medicines and 39Excludes royalties chemical medicines 40Sales for health care segment; 32Excludes consumer health care excludes critical care 33Formulations are 71% of revenues 41Excludes contracts, license fees and royalties 34Sales for finished drug business and 42Excludes OTC antibiotics 43Excludes diagnostics, animal health and 35Excludes royalties contract manufacturing 36Sales for formulations business 44Sales for prescription pharmaceuticals 45Sales for pharmaceuticals segment 46Generics plus branded generics (91% of sales) 47Sales for ethical drugs only
December 2018 | In Vivo | 17 SCRIP 100
Major M&A Bookends Year Of Mainly Steady Growth For
ASHLEY YEO Leading Medtech Groups EXECUTIVE EDITOR, MEDTECH, EUROPE In Vivo’s latest rankings of the top 100 revenue earners in the medical technology industry show the groups leading the global market tightening their grip further in 2017. This was partly a function of providers choosing to partner more and more with fewer suppliers who can offer a wider provision of services. But it was steady as she goes for most of the multinational medtechs, with some major exceptions, and there will be more M&A reflected in next year’s rankings, based on 2018 revenues.
For companies leading the global medical technology therapies (MIT) segment– and a 5% drop in US dia- industry, the sales ranking for 2017 was strikingly simi- betes sales. lar to that of 2016 – with a handful of major exceptions, In common with several other majors, Medtronic two of which affected the leading 10 global companies. pushed ahead with its value-based health care program, These 10 companies, as in 2016, all recorded sales of which directly links therapies to improved outcomes over $10 billion, with the acquisitive Boston Scientific across all its segments (cardiac and vascular, MIT, Corp. (electrophysiology company Apama Medical restorative therapies and diabetes). being its only major buy in 2017) now knocking on This shift to health care payment systems that prize the door of that exclusive club after seriously adding value and improved patient outcomes over volume is a to its sales mix with a string of strategic buys in 2018. high-profile theme for most of the leading companies. It Medtronic PLC led the field in terms of sales once dominates their thinking, even though the consensus is more in 2017, but did not quite become history’s first that integration of the model is a slow process, system- $30 billion revenue medtech. That milestone will be wide. It may be the new compelling reality, but it will reached in its fiscal year 2019 (Medtronic reports its have a short-term downward pressure on revenues and annual figures in late April). FY 2018 reported sales require deeper commitment and resource allocation nudged up 0.8%, and by 4.6% on an organic basis. over a longer timeframe by medtechs. Providers often Some internal reporting lines had been adjusted, simply demand service that counts, in order to fulfill the but the standout reasons for the apparently muted growing need for high-quality procedures. So arguably, performance was the divestiture of patient care, DVT payers will gain most from this ongoing mindset shift. and nutritional insufficiency units in late July 2017 – But the outcomes agenda has remained a stand-out businesses that were part of its minimally invasive trend for several years now. Other themes that cannot be ignored are: the integration of digital technology; AI and machine learning; how to maximize data flows and manage data to best effect; personalizing care delivery in affordable and practical ways; prevention; precision medicine; and, for providers especially, productivity. Every commercial player, large, SME or start-up, is concerned on an ongoing basis about where to position their company so it can grow in the face of the threat of the tech disruptors, who have the power and potential to take health care to the next level – if not the capabilities to do it by themselves.
MID- TO HIGH-SINGLE DIGIT GROWTH A COMMON OUTCOME Johnson & Johnson lost some $2 billion sales bulk when it divested Ortho-Clinical Diagnostics in mid-2014, but consolidated Abbott Medical Optics Inc. in Q1 2017. Its 5.9% devices business sales expansion in 2017 was typical of the single-digit growth enjoyed by much of the industry in 2017, and helped it get another billion-
18 | In Vivo | December 2018 SCRIP 100
dollars nearer to Medtronic. J&J led the orthopedics Jochen Schmitz, speaking at Jefferies Healthcare’s 2018 segment in 2017 via its DePuy-Synthes franchise, but London investor conference (on Nov. 15), put great store its orthopedics group sales, at $9.3 billion, dipped by in the potential of the new Atellica IVDs platform (“999 0.8%, due to the sale of Codman Neurosurgery and units shipped in FY 18”). On the theme of AI, Schmitz share loss in the US spine segment, as well as pricing revealed that Siemens has 40 AI-enriched offerings on and competitive pressures. the market already – a focus area for the industry in 2019 for sure. BD was the only other top 10 group to see ABBOTT AND BECTON DICKINSON TAKE a dip in sales, but as said, that was down to timings. THE EXTERNAL GROWTH HEADLINES Looking only at companies in the imaging segment, Aggregate sales of the top 10 medtechs in 2017 were more Seimens Healthineers stayed at No. 2 in 2017, behind than $157 billion, and Medtronic and J&J jointly accounted clear leader GE Healthcare, but ahead of Royal Philips, for more than a third of that, at some $56 billion. But the as in 2016 – another “as-you-were” outcome. key talking points of 2017 were Becton Dickinson & Co.’s $24 billion purchase of top 30 player CR Bard – announced TOP 50 GROWTH EYECATCHERS in April 2017 but completed on Dec. 29, 2017 – and the Outside the top 10, Boston Scientific was among the most effect onAbbott Laboratories Inc.’s commercial reach visible acquirers, notching up nine or 10 purchases in 2018. of its 2016 purchase of St. Jude Medical for $25 billion, (Also see “Bringing The Clinician’s Rationale Into The Heart bringing a rich pipeline of technologies into the group on Of Strategic Decision-Making At Boston Scientific” - In Vivo, Jan. 5, 2017. Abbott was elevated from fifth to second when 17 Sep, 2018.) Further down the top 100 ranking, the lead- focusing only on cardiology rankings, behind Medtronic, ing 30 companies were more or less stable, and it is only but ahead of last year’s clear second, Boston Scientific. among the groups in the mid-to-late 30s positions – those
Themes that cannot be ignored: artificial intelligence, personalized care, prevention, precision medicine and productivity.
Late in the year, Abbott finalized the acquisition of on the cusp of, or just over, $2 billion in sales – ResMed Alere – the seventh-largest IVDs player globally in 2016 (+13.3%), Teleflex (+14.9%), BioMérieux (+12.6%) – where – and thus, it ended the year as it had begun: driving rankings started to change and swap from the prior year. the M&A agenda. In Vivo’s league tables include partial- Ongoing consolidation of the industry has meant that year sales of both Bard and Alere – whose names will the cut-off for the top 100 is some $30 million lower in disappear from the next year’s rankings. The timing of our latest rankings. And UK company Consort Medi- BD’s acquisition did it no favors in terms of its ranking cal PLC moved up to one place outside the medtech position based on 2017 figures, but its 2018 sales will put top 100 in 2017, but curiously with no change in its a different complexion on next year’s ranking. dollar-ranked revenues ($164 million), given the Brexit- Abbott’s M&A transactions are reflected in the global induced fall in the value of sterling. Other noteworthy medtech sales table for 2017, where it was the standout sales performances in the top 50 were seen at Edwards medtech disruptor bar none – moving up five places Lifesciences (+16%) and Abiomed (+33%). There were on the back of a 60.3% sales uplift and into the top 59 billion-dollar medtech players globally in 2017 (this five, mainly at the expense of BD,Roche and Siemens. table excludes non-reporting private and private equity- Cardinal Health stayed at No. 6, and Stryker (+9.9% in owned concerns), four more than in last year’s table. 2017) moved up a place to No. 8, partly due to the rev- enues added by the mid-2016 purchase of monitors and STRONG AND STABLE IN 2017 AEDs group, Physio-Control International, Inc., a $500 Our league table says a lot about the medtech industry million revenue business. Post-2017 year-end, Stryker from a stability and steady-growth point of view, and as added K2M to its spine division for $1.4 billion, fulfilling a long-term investment. But there is always the potential a long-stated desire to strengthen that segment, adding for an outlier to grab the attention: ICU Medical should substantially to its revenue base in 2018. get some sort of award for rising 39 places, entering A full year of Alere revenues in 2018 will bring Abbott the top 50 and exceeding $1 billion in revenues – all in closer to fourth-placed GE Healthcare (+4.5% in 2017). the same year. The jump resulted from its October 2016 Royal Philips was up 4.2% in US dollars in 2017. acquisition of infusion therapy business Hospira Infu- Roche, the clear and undisputed IVDs market leader, sion Systems – for $1 billion from Pfizer: a 241% revenue saw 5.3% sales expansion, but Siemens Healthineers’ increase was something not even Abbott Laboratories IVD sales dipped (although making 1% growth in could match in 2017! comparable sales to year-end Sept. 30, 2018), and it IV124170 retained fourth place in the IVDs table. Group CFO
December 2018 | In Vivo | 19 SCRIP 100
The World’s Top 100 Medtech Companies By Fiscal Sales ($M)
MEDTECH SALES RANK 2019 MEDTECH SALES RANK 2019 COMPANY COMPANY (FY 2017) (2018) (FY 2017) (2018) Medtronic1 29,953 1 (1) Thermo Fisher17 3,486 26 (26) Johnson & Johnson2 26,592 2 (2) Edwards Lifesciences 3,435 27 (27) Philips Healthcare3 20,092 3 (3) Intuitive Surgical 3,129 28 (28) GE Healthcare 19,116 4 (4) Shimadzu18 2,654 29 (30) Abbott Laboratories4 16,178 5 (10) Getinge Group 2,637 30 (29) Cardinal Health5 15,581 6 (6) Hologic Inc19 2,538 31 (31) Siemens Healthineers6 15,175 7 (5) Sysmex20 2,515 32 (33) Stryker 12,444 8 (9) Coloplast21 2,359 33 (34) Roche Diagnostics 12,274 9 (8) ResMed22 2,340 34 (35) Becton Dickinson7 12,093 10 (7) Teleflex Medical 2,146 35 (37) Boston Scientific 9,048 11 (11) bioMerieux23 2,091 36 (39) Danaher8 8,651 12 (12) Drager24 1,885 37 (40) Zimmer Biomet 7,824 13 (13) Convatec 1,765 38 (41) B Braun 7,672 14 (14) Miraca25 1,743 39 (36) Baxter International9 6,885 15 (15) Nihon Kohden26 1,554 40 (43) Alcon Laboratories10 6,024 16 (16) Shinva Medical Instrument 1,534 41 (52) 3M11 5,813 17 (17) Valeant Pharmaceuticals27 1,532 42 (44) Olympus12 5,498 18 (18) Align Technology 1,473 43 (55) Terumo13 5,243 19 (19) Qiagen 1,418 44 (46) Grifols 4,880 20 (21) Integer28 1,405 45 (45) Smith & Nephew 4,765 21 (20) Bio-Rad29 1,360 46 (47) Dentsply Sirona14 3,993 22 (22) Carl Zeiss Meditec30 1,344 47 (51) Fujifilm 3,952 23 (24) Elekta31 1,329 48 (49) CR Bard15 3,875 24 (23) ICU Medical 1,292 49 (88) Fresenius Medical Care16 3,675 25 (25) AGFA Healthcare 1,189 50 (50)
1 FY 2018 ended Apr. 27, 2018 18 FY ended Mar. 31, 2018 - medical + measuring instruments only 2 Medical devices business only 19 FY 2017 ended Sept. 30, 2017 3 Health care 20 FY 2017 ended Mar. 31, 2018 4 Diagnostics + vascular + other 21 2016/17 year ended Sept. 30 5 FY ended June 30, 2018 - medical segment only 22 Year ended June 30, 2018 6 Fiscal 2018 ended Sept. 30, 2018 - 23 Clinical applications only excludes intersegment sales; includes adv. therapies 24 Medical business only 7 FY 2017 ended Sept. 30, 2017 25 FY ended Mar. 31, 2018. In Nov. 2017, 8 Diagnostics + dental only Miraca Life Sciences was acquired by Avista Capital Partners and 9 Renal care + med delivery + adv. surgery only renamed Inform Diagnostics in Jan. 2018) 10 A division of Novartis 26 Year ended Mar. 31, 2018 11 Health care 27 Device business only (eye care - includes Bausch + Lomb) 12 FY ended Mar. 31, 2018 - medical business only 28 Medical sales only 13 FY ended Mar. 31, 2018 29 Clinical diagnostics segment 14 FY ended Mar. 31, 2018 - health care only (PACs systems etc) 30 Year ended Sept. 30, 2017 15 Part of BD since Dec. 29, 2017 - MAT sales value to Q3 2017 31 FY ended Apr. 30, 2018 16 Renamed as Healthcare 17 Specialty diagnostics only
20 | In Vivo | December 2018 SCRIP 100
The World’s Top 100 Medtech Companies By Fiscal Sales ($M)
MEDTECH SALES RANK 2019 MEDTECH SALES RANK 2019 COMPANY COMPANY (FY 2017) (2018) (FY 2017) (2018) Integra LifeSciences 1,188 51 (57) Varex Imaging41 557 76 (76) Jiangsu Yuyue Medical DJO Global 1,186 52 (53) 544 77 (89) Equipment Fukuda Denshi32 1,150 53 (54) Natus Medical 501 78 (87) Alere33 1,146 54 (32) Analogic Corp42 474 79 (78) Smiths Medical 1,140 55 (48) Ypsomed 474 80 (84) Straumann 1,130 56 (61) Cooper Companies Inc43 465 81 (85) Cochlear34 1,036 57 (62) Accuray44 453 82 (86) NuVasive 1,030 58 (59) MicroPort Scientific 444 83 (83) LivaNova 1,012 59 (58) Hamamatsu Photonics45 435 84 (81) Omron35 968 60 (60) Orthofix International 434 85 (82) Invacare Corp 967 61 (56) Heraeus Group46 395 86 (80) Guerbet 918 62 (64) AngioDynamics47 344 87 (91) Haemonetics36 904 63 (63) Hogy Medical48 329 88 (92) Cantel Medical37 872 64 (66) BTG49 313 89 Konica Minolta38 861 65 (65) Luminex 307 90 (95) Masimo Corp 798 66 (69) RTI Surgical 280 91 (93) CONMED 796 67 (67) Quidel 278 92 (102) Myriad Genetics39 771 68 (68) Stratec Biomedical Systems 237 93 (99) Wright Medical Group 745 69 (70) Horiba Ltd50 225 94 (97) Merit Medical Systems 728 70 (72) Cardiovascular Systems51 217 95 (98) Diasorin 720 71 (71) Meridian Bioscience 200 96 (100) DexCom 719 72 (73) Cryolife 190 97 (103) LePu Medical Technology= 698 73 (77) Endologix 181 98 (101) Globus Medical 636 74 (74) AtriCure 175 99 (105) Abiomed40 594 75 (79) Orasure Technologies 167 100 (106)
32 FY ended Mar. 31, 2018 44 FY ended June 30, 2018 33 First-half only sales reported in 2017 45 FY ended Sept 30, 2017 (sold to Abbott after Q3) 46 Health only 34 Year ended June 30, 2018 47 FY ended May 31, 2018 35 Year ended Mar. 31, 2018. Health care 48 FY ended Mar. 31, 2018 business only 49 FY ended Mar. 31, 2018 36 FY ended Mar. 31, 2018 50 Medical sales only 37 Year ended July 31, 2018 51 FY ended June 30, 2018 38 Health care business only 39 Year ended June 30, 2018 40 FY ended Mar. 31, 2018 41 Imaging components business only - spun out from Varian on Jan. 28, 2017 42 First nine months only - bought by Altaris in June 2018 and subsequently privately held 43 Cooper Surgical business only - year ended Oct. 31. 2017
December 2018 | In Vivo | 21 SCRIP 100
The Scrip universe gathers FY NUMBERS financial performance data and compares the activities of the Top biopharma businesses, ranked by pharma sales SCRIP SCRIP BIOPHARMA CRUNCHED
WHO GETS IN? TOP M Companies based The threshold on . BN on pharmaceutical drug sales or R&D Combined pharma sales of Top sales only for fiscal spending to get year into the Scrip . BN GEOGRAPHICAL SPLIT OF TOP COMPANIES IN SCRIP UNIVERSE Combined pharma sales of Top
. MILLION Europe US Asia ROW People employed by the Top
R&D SPEND SHIRE HAS JOINED TOP IN SCRIP FOR FIRST TIME Top 20* . bn # Top 100* . bn Takeda's placing in Scrip after Shire acquisition closes, based on combined pharma revenues *Some companies do not report R&D expenditure; R&D spend not limited to Pharma only in all cases
A CLOSER LOOK AT TOP TOP SPOT I Total Revenues I R&D Spend 100 100 I R&D As Percent Of Sales 90 PFIZER 90 80 .bn in 80 70 pharma sales 70 60 60
BN 50 50 40 40 30 30 20 20 R&D As Percent Of Sales (%) Sales Of Percent R&D As 10 10 0 0 P zer Novartis Roche J&J Merck Sano GSK AbbVie Gilead Teva
22 | In Vivo | December 2018 SCRIP 100
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December 2018 | In Vivo | 23 Company Overview ICON plc is a global provider of outsourced drug development and commercialisation services to pharmaceutical, biotechnology, medical device, and government and public health organisations. The company specialises in the strategic development, management and analysis of programs that support clinical development from compound selection to Phase I-IV clinical studies. With headquarters in Dublin, Ireland, ICON currently operates from 93 locations in 37 countries and has approximately 13,650 employees.
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Early Phase Services Clinical Research Services – Clinical Research Unit – Project Management – Patient Studies – Clinical Operations/Monitoring – Pharmacodynamic Models – Patient Centric Monitoring – Data Visualisation & Analysis – Data Management – NONMEM Software – PK/PD Pop Software Site & Patient Solutions – Precision Methodology Cardiac Assessment – Integrated Site Network – Patient Identification & Matching Drug Development Services – Patient Recruitment & Engagement – Non-clinical – Digital Solutions - FIRECREST – Chemistry, Manufacturing & Controls (CMC) – Clinical Development Scientific Operations – Adaptive Trials – ADDPLAN® Functional Services – Medical Imaging – MIRA – DOCS – Biostatistics – Government & Public Health Solutions – Medical Affairs – Pharmacovigilance Laboratory Services – Regulatory Affairs – Central Laboratories – Endpoint Adjudication Services – Bioanalytical Laboratories – Medical Writing & Publishing – Interactive Response Technology – FLEX ADVANTAGE Full Service Commercialisation & Outcomes Portfolio – Real World Strategy Evidence & Analytics – Real World Evidence & Late Phase Research – Global Research Services Hubs – Access, Commercialisation & Communications – Patient Centered Sciences – Strategic Regulatory Services – Medical Device & Diagnostics Research
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Ten Critical Shifts Reshaping Drug Development And Commercialization In 2019
A Snapshot Of What’s-Next Insights To Help Biopharma Leaders Navigate Challenges And Capitalize On The Opportunities Ahead
In 2019, the character and cadence of health care will demand achieved commercial success. The solution to many challenges greater depths of data savvy and ever-faster decision reflexes from lies in tighter, agile coordination. This year, we’ll see more cases health care leaders. This axiom will apply whether the conversa- where medical affairs teams will fuel a feedback loop from pro- tion is about digitally empowered patients who expect to be re- viders and payers to aggregate and understand what evidence is warded for sharing their experiences with drug developers, or the most needed across and within regions. Some of that evidence ripple effects of consolidation among payers and pharmacy benefit will be advanced at a national or global level and some will be managers, or the impact of regulatory and business reforms that created within region, through real-world trials that leverage are poised to make China a global pharmaceutical powerhouse. nimble techniques like retrospective chart review and virtual staff.
“Our industry is overwhelmed with data, and the possibilities • Accelerating Evidence: In the US, the 21st Century Cures Act for action and investment are enormous, but there’s little clarity codified a commitment to change by emphasizing the patient’s around how to move forward,” says Leigh Householder, Syneos perspective on drug development and empowering innovators to Health’s executive vice president for insights and innovations. experiment with trial design and outcomes assessment. Europe is “Even when armed with every imaginable number, too many moving in the same direction. China, meanwhile, has adopted a health care leaders are struggling to gain strategic traction. What mesh of incentives and penalties to speed clinical testing at home teams throughout the industry need are decision-driving insights.” and abroad. The goal is to achieve parity with leaders in other regions, both in drug innovation and market access. In all major To address this need, Syneos Health engaged more than 200 in- markets, we’ll see greater focus on what product differentiation ternal subject matter experts working on the front lines of drug looks like in real-world environments. Increasingly, submissions development and commercialization around the world to identify for the approval of innovative drugs and devices will include drivers of change in their sector and calibrate the impact over the real-world evidence drawn from clinical data, claims data and next six to 12 months. Among the 10 predominant trends uncov- patient-generated data that may emerge from novel sources such ered, there is an urgent need for: as social media. To build those packages, more clinical teams will be collecting real-world data and evidence in very early stages • Relearning Launch: Across the biopharma industry, the odds of trials, while making broader use of “pragmatic” trial designs. of developing an asset, getting it approved and successfully bring- ing it to market are about the same as winning a single number • Search for the Right Patient: Where once innovators of drugs, in roulette: 3%. Many innovators are approaching launch with devices or digital therapeutics might have dreamed of owning an one foot on the brake and one foot on the gas. Yet, a fainthearted entire patient category, more industry leaders in 2019 will aim for stance can be hazardous. By pushing investment later and later 100% of patients in a much smaller population where treatment in the launch cycle, companies are missing out on the value cre- can make the biggest difference. To get there, innovators are testing ation cascade that typically starts three years before launch and therapeutics not just against well-known levers such as biomarkers increases significantly one year out. Comparing the investments and demographics, but also against new ones like patient behavior of 19 biopharmaceutical companies launching their first products, tracked with diaries and wearable devices. With an eye to differen- Syneos Health found that no company spending less than 75% of tiation and sub-segmentation, smart investment this year will flow its launch-year-forecasted revenue in the first 12 months of launch to subset research that competitors just haven’t analyzed yet. In
26 | In Vivo | December 2018 BUSINESS
addition to building patient journey maps providing a nuanced real-life view based on patient-relevant claims code and Internet search data, leaders will leverage de-identified clinical and genomic data to estimate the number of patients who match specific criteria and see a comprehensive aggregated picture of the cohort.
• Radical Reorganization: At a moment when risk and uncertainty are permanent guests at the table, life sci- ences leaders need more flexibility than they can obtain through traditional financial levers such as slashing staff or throttling R&D. To protect their pipelines, they must replace costly infrastructure with “rented” capa- bilities of more adaptable partners. This year will see a significant shift to horizontal contracting, transferring critical parts of the commercial organization from an ownership model to a rental model. Health care inno- vators will hire more talent from outside the industry, whether from Google or Walmart. These and related shifts will lead to more rapid cycling of innovation and optimization, with biopharma companies learning from their customers and making changes in evidence col- lection, messaging and service provision.
Other Shifts and underlying dynamics that will shape biopharmaceutical decision-making in 2019 identified in the Health Trend Ten eBook from Syneos Health include: pricing coming to the point of care. Electronic health records, HSA-style insurance plans and state and • Rewired HCP: Today, two thirds of US physicians report national laws are making doctors and patients more that they’re burned out, depressed or both. This job dissat- aware of the real costs of medications and procedures. isfaction doesn’t hurt just professionals – increasingly, it’s impacting their patient relationships as well. Physicians • New Top Talent: Massive shifts in the expectations of are working with less control, greater financial and time customers and the reality of health care are driving de- pressure, torrents of data that can be as much a burden mand for talent ready to excel in this new era. Employers as a blessing and increasing mental health challenges. are on a quest to identify and attract the most versatile, skillful, and regional- or global-savvy workforce – often • Relieving Burden: At a time when the weight of in places you wouldn’t expect. There are also shifting work is piling up on critical stakeholders, old and new expectations on talent – from clinical site managers and players are stepping in with strategies and services educators to marketers and sales reps – to work as comfort- that reduce friction, complexity and inconvenience ably with data as they can perform real-life engagements. for doctors, researchers, patients and harried admin- istrators. For example, to serve practices in a resource- • Demand for Decision-Driving Insights: Life scienc- starved, formulary-first era, field teams are spending es leaders are managing pressure on time and resources more time on patient and practice support. at a moment when the velocity of change and opportu- nity is faster than ever. There is a need to quickly create • System of One: Care is becoming more transient, business cases, advance institutional data fluency and opportunistic and data-connected as it shifts from hos- infuse behavioral science into decision-making – all pitals to homes, local pharmacies and even onto mobile to forge meaningful change opportunities and sustain phones. This ability to leverage technology to reach pa- momentum to execute on the plan. tients has the ability to impact conversations about care within the retail and primary care environment, clinical Download the Health Trend Ten eBook (www.trends. trial recruitment and collection of real-world evidence. health), a compendium of trend forecasts and analyses to help industry leaders anticipate changes on the near ho- • Value Puzzle: Innovation, politics and data have rizon. The book includes 10 macro trends and 40 themes reenergized debates about value, with people, pay- for 2019 and 10 worksheets to help evolve and transform ers and advocates all asking: is it worth it and who your 2019 planning. A companion podcast series is also should pay? We may also soon see frank discussions on available here (www.trends.health).
December 2018 | In Vivo | 27 BUSINESS
Few Signs Of An IPO Slowdown Despite US Biotech Stock Slump Biotech stock valuations wavered in October with the average IPO return in the US nearing negative territory, but observers say there is still a healthy market for new biopharma offerings in 2018 and MANDY JACKSON MANAGING EDITOR, into next year. PHARMA, US There is no question that the market for biopharmaceuti- down 67% from the IPO value at $1.65 as of October 31. cal company initial public offerings in the US is booming, Ratcliffe notes that “the market is discriminating” but it remains to be seen if a major drop in biotechnology with some proposed IPOs eventually being withdrawn stock values in October will slow the momentum, espe- from consideration when certain biopharma compa- cially since the average IPO return is approaching zero. nies have been unable to find sufficient investor inter- Of the 61 biopharma firms that launched IPOs in est in their offerings. “All of that to me points to good 2018 through the end of October, 33 provided nega- fundamental principles in the market,” he asserts. tive returns and 28 were trading flat or in the black, for an average return of 0.3% as of October 31 versus IPO RETURNS LAG IN THE LONG TERM an average of 13.6% for the 54 drug developers that However, Leerink’s Geoffrey Porges reports that while went public in the US through the end of September. the 269 biopharma IPOs raising $24.1 billion between However, the IPO class of 2018 is performing better January 2013 and September 2018 had good one-day, than biotech stocks in general, considering the Nasdaq one-month and one-quarter returns, performance over Biotechnology Index (NBI) was down 6% year-to-date the longer term was less than stellar. as of the end of October. Porges and his team reported in a series of three Indeed, some market observers do not expect first- notes sent to investors in October that only 44% of the time offerings to come to a halt anytime soon, soon. newly issued stocks had a positive return at the end Indeed, messenger RNA therapeutics firmModerna of the nearly six-year period, and only 35% generated Inc. was able to launch the largest ever US IPO on Dec. an annualized return that was 10% or greater than the 6, bringing in $604 million. companies’ IPO values. In fact, more than 80% of the New Leaf Venture Partners managing director Liam returns was generated by 20% of the drug developers Ratcliffe described the biopharma IPO market in the US that went public during that time. as healthy in an interview with In Vivo. Six of his firm’s But 2018 stands out even among the past six unusually portfolio companies have gone public in the past year, active years for biopharma IPOs, because there was an including Arvinas Inc., which grossed $120 million in average of six IPOs per month with companies raising its September 26 offering priced at $16 per share. The $104 million on average per offering, according to Scrip’s company, which is developing NMDA receptor modula- analysis. In comparison, there were slightly less than four tors for various neurology indications, ended October drug developer IPOs each month during the five-year, at $16.26, providing a 1.6% return for IPO investors. nine-month period analyzed by Leerink and the aver- Aside from the stock market slump in October, age gross proceeds were just $89.6 million per offering. including a 13.9% drop in the NBI, Ratcliffe says “the The increasing number and size of biopharma IPOs pace and the number of IPOs has been healthy, and have been driven by investors who have made a lot of the valuations have been generally good. There have money from putting their cash into innovative compa- been some with robust market performance and others nies since the beginning of 2013 – they’ve brought in a that have gone sideways.” lot of money that they need to reinvest and biotech’s The allogeneic CAR-T therapy start-up Allogene not a bad place to put it. The Nasdaq, covering both Therapeutics Inc. had 2018’s second largest biophar- high-tech and biotech stocks, rose 132.5% between Jan- ma IPO, bringing in $372.6 million (including shares uary 2013 and the end of October and the NBI increased sold to meet over-allotments) in October and its stock 128.9% in the comparable period – both outperformed ended the month 33.4% above the IPO price. (Also the Dow Jones Industrial Average, which grew 81.2%. see “Finance Watch: With The Year’s Biggest IPO, CFO Says Allogene Is Ready To Go ‘Full Throttle’” - Scrip, 11 BULL MARKET’S CAPITAL Oct, 2018.) The smallest IPO grossed $6.4 million for BENEFITS BIOPHARMA Genprex Inc., a gene therapy company that struggled “We have had a very strong bull market, which frees up to launch its offering in late 2017 and priced at $5 per capital that is less risk averse and more speculative,” share in March of this year, then saw its stock close Back Bay Life Science Advisors CEO and managing
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partner Jonathan Gertler told In Vivo. “In addition, flows have been coming from global sources, for example, an uptick in Asian capital, and there is an increased recognition that globalizing pharma is critical to the success of established as well as smaller or more regionally developed companies,” Gertler says. He also notes that “the technology ad- vances we have seen in the last decade are coming at a faster and faster clip, creating more promise even if indeed the technologies might still be a distance from clinical or commercial fruition. The IPO market to date has seen larger IPOs as well as earlier-stage IPOs, suggesting there has been synergy between promising science and speculative capital.” New Leaf’s Ratcliffe points out that there are plenty of worthwhile biopharma companies to invest in, so the main thing that will slow or stop the industry’s IPO market momentum is a shift in the flow of capital into drug development. The limited pool of talent to run public biopharma firms also could impact the number of firms ready to go public in the US, he adds. “CEOs and CFOs are in high demand now – also, audit com- mittee chairs,” Ratcliffe says. capital investors, like New Leaf, should invest only in companies that they feel comfortable holding onto AS VALUES DIP, MARKET MAY SORT OUT for the long term – because buyers may not always be LESSER INVESTMENTS willing to purchase available companies and the IPO Drug development companies that are not well run market may not always be available. or have lower-quality therapeutic candidates in the pipeline may be the first that decide not to go public FOR NOW, THE MONEY CONTINUES TO FLOW after all, if IPO investors begin to shift their attention Ratcliffe notes that his VC firm has funds to invest in away from biopharma. “Whenever there is a market private companies, to participate in crossover rounds correction, the more speculative issuers are often the for biopharmas that are planning to go public, and first to be corralled,” Gertler explains. to put money into public companies. From those per- “Unlike a decade ago when biotech was a less spectives, the IPO market looks healthy and should mature industry and the integration of pharma and continue to be for some time, he says. biotech was less robust, biotechnology is not going As long as companies continue to report enough to go away,” he continues. “Biotechnology is now the good data from their pipelines to balance the inevita- driver of significant pharma revenues, and the evolu- ble failures, enough financing will be available to help tion of science and medicine to more targeted thera- them reach milestones in drug development, approval peutic solutions and greater specificity and effect on or commercialization, Gertler states. Companies also segmented populations renders biotechnology critical should be able to raise enough money now to provide to pharma development.” a buffer when capital availability declines or clinical Given the dependence of big pharma research and trial results cause drug developers to reposition or development on the robust productivity of smaller reexamine their pipelines, he says. biotech companies, Gertler predicts that “the sector In addition to a general economic contraction that will have much less excessive volatility than it did in limits investors’ abilities to fund speculative technol- years past.” ogy, what could cause a major slowdown in biopharma However, the rush to the IPO market and the double- IPOs is “excessive spend on misguided technologies and triple-digit rise in some biopharma firms’ stocks or business plans that poison the well for the major- have driven drug developers’ values so much that big ity of companies that are methodically and cogently pharma companies are finding it difficult to license or pursuing their product development goals,” Gertler buy assets at prices they believe are reasonable. “Some warns. Until then, he notes, the flow of venture capital people say it may be inhibiting M&A, because buyers into biopharma should be significant, so the pipelines aren’t able to price in a premium [on top of already of new drug developers offer plenty of opportunities high stock values]. We have heard from some bankers for IPO investors. (Also see “Finance Watch: VC Tally that the buyers are concerned about valuations in the Hits $14.5bn For 2018, Beating 2017 With A Quarter Left public market,” Ratcliffe says. That is why venture To Go” - Scrip, 16 Oct, 2018.)
December 2018 | In Vivo | 29 BUSINESS
Medical Aesthetics: An Untapped Pharma Market With Incoming Competition MANDY JACKSON MANAGING EDITOR, Medical aesthetics is a unique biopharmaceutical niche that may scare off companies due to the PHARMA, US consumer marketing and doctor relationship-building skills needed to compete in this market, but the potential for growth keeps major players engaged and searching for new technology.
Allergan PLC is the dominant player in medical aes- said she saw growth across age groups, including an thetics with its blockbuster wrinkle-reducing neuro- increasing number of men and younger women. toxin Botox (onabotulinumtoxinA) and portfolio of injectables, implants and other products, but it is not TOP PLAYER: ALLERGAN ADDS ADJACENCIES alone. Merz Pharmaceuticals GMBH and Galderma Allergan has capitalized on the demographic with SA also have spent years curating collections of prod- double-digit quarterly and annual sales growth for ucts to entice doctors who are seeing surging interest its Botox-led medical aesthetics portfolio, which from patients in non-invasive procedures to improve also includes the double chin-reducer Kybella (de- their appearance. oxycholic acid), the Juvederm line of dermal fillers, One of the biggest challenges for all biopharma play- breast implants, the Alloderm regenerative medicine ers in medical aesthetics is to grow the overall market. products for plastic surgery, and the CoolSculpting Allergan’s research indicates that about 40 million body-contouring device. people are interested in medical aesthetics, but only Botox brought in $3.17 billion in 2017 sales, which about 10% of those individuals have pursued treat- was up 13.7% from 2016, and sales for the first three ment. The company expects the market to double in the quarters of 2018 totaled $2.63 billion, up 14.2% year- next five to seven years. Revenue from both invasive over-year, for both aesthetic and therapeutic uses. and non-invasive treatments is expected to increase at The total for the first three quarters of 2018 includes a compound annual growth rate of 10.8%, according $1.13 billion in Botox Cosmetic sales and $1.5 billion to a recent report by Global Market Insights on the for therapeutic Botox indications. The neuromodula- worldwide aesthetic medicine market, bringing total tor is approved in the US to reduce the appearance revenue for the sector to $18.5 billion in 2024 – most of of wrinkles between the eyes, crow’s feet at the which will come from non-invasive treatments, rather outer corners of the eyes, and forehead lines. It is than plastic surgery. Increased interest in improving also approved to treat overactive bladder, urinary physical appearance, rising disposable incomes, the incontinence, spasticity, cervical dystonia, axillary development of less invasive treatments and improved hyperhidrosis, blepharospasm and strabismus, and health care facilities will drive global growth. to prevent chronic migraine headaches. Unlike therapeutic medicines, where pharmacy But Botox Cosmetic is only about half of Allergan’s benefit managers and other payers stand between medical aesthetics portfolio in the US, where facial in- drug developers and patients, biopharma companies jectables (including Botox), plastic surgery, regenera- sell products directly to the dermatologists and plas- tive medicine, body contouring and skin care brought tic surgeons who administer the treatments. This is a in $2.04 billion during the first three quarters of 2018, cash-pay business where doctors buy injectables and up 17.3% year-over-year. Medical aesthetics was the devices that they sell as services to their patients, company’s only therapeutic segment in the US to cross who increasingly are looking for effective, in-office the $9 billion mark between January and September. treatments as an alternative to costly and invasive Senior vice president, US medical aesthetics, Car- plastic surgeries. “Patients love being able to come into rie Strom noted that it was difficult for new entrants the office for cosmetic procedures that have minimal to the medical aesthetics market to gain a foothold in downtime and a reasonable price tag,” dermatologist the growing market, due to the required investment in Patricia Farris said. “I don’t think we have made sur- R&D as well as manufacturing, which can be complex gery obsolete, but there are now many patients who – particularly in facial injectables. The commercial choose injectables over surgery or use them to delay expertise also can be daunting, because of the need surgical procedures.” to grow the market itself and remain in close contact Farris, of Sanova Dermatology in Metairie, La., with physician customers. One of Allergan’s biggest
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investments in the medical aesthetics result of that high degree of connectivity CEO David Meek said during the com- space was physician training, Strom said. with physicians is really a rudder – that’s pany’s second quarter earnings call in July Allergan also has increased its invest- what drives our ship.” that aspiring competitors would be “going ments in direct-to-consumer advertising. Merz, as a private company, does not dis- up against the aesthetic powerhouses, Its new digital ventures unit, Moonwalker, close sales figures for its products. Medical such as Allergan and Galderma. Having launched an unbranded website called aesthetics is a significant portion of its a suite of aesthetic products is going to Spotlyte in September to educate consumer business, but Merz also has a neuroscience be very important for them to compete about medical aesthetics and direct them franchise via therapeutic indications for along with a significant commercial or- to dermatologists and plastic surgeons Xeomin – adult upper limb spasticity, cer- ganization, and price alone will not be a offering non-invasive treatments, such as vical dystonia, blepharospasm and adult strategy.” Botox injections. chronic sialorrhea in the US. The latter Galderma markets Dysport for aesthetic indication was approved by the US Food uses within a portfolio that includes the MERZ: INVESTING IN DTC and Drug Administration in July. (Also Restylane, Sculptra and Emervel dermal TO GAIN GROUND see “Merz Neurology Business Boosted By fillers. The Nestle subsidiary also sells In terms of growing the market, Merz, Xeomin Sialorrhea OK “ - Scrip, 5 Jul, 2018.) the well-established consumer skin care which sells the Botox competitor Xeo- In its 2017/2018 fiscal year ending June brand Cetaphil. min (incobotulinumtoxinA), has been 30, the German company’s revenue totaled Galderma’s Chris Chapman, vice presi- surprised by the amount of interest from €1.02 billion, which was on par with the dent and general manager for its prescrip- millennials – people in their 20s and early €1.02 billion reported for the 2016/2017 tion business, said in an interview that the 30s – in medical aesthetics. fiscal year, but still below the €1.09 bil- company’s “primary focus is on the physi- Merz Americas CEO Bob Rhatigan said lion in 2015/2016 revenue. The aesthetics cians we serve – the dermatologists – and the company’s direct-to-consumer (DTC) and neurotoxins business increased 19% as their practices evolve we offer a full suite campaign featuring 63-year-old model in the most recent fiscal year, and those of solutions that include both prescription Christie Brinkley had been effective in segments accounted for 67% of Merz’s aesthetic as well as consumer” products. capturing the interest of women in her 2017/2018 revenue. Vice president of medical affairs, demographic, but she was also resonating “We are extremely pleased with the Howard Marsh said Galderma welcomed with the millennial generation as well, results and have started our new fiscal competition from new market entrants, who see Brinkley as a fashion and beauty year in a strong position,” Rhatigan said. because “it keeps us on our toes… We don’t icon. Brinkley is a spokesperson and user “Based on publicly available informa- mind new players coming into the market, of both Xeomin and Ultherapy, Merz’s tion, we believe that Xeomin is by far the because it makes us perform well.” device that uses ultrasound energy to lift fastest-growing brand in the aesthetics and tighten the neck, chin and brow, and toxin space right now.” UNMET NEEDS AND improve lines and wrinkles on the chest. NEW COMPETITION Merz’s DTC advertising push is part of GALDERMA: SELLING IPSEN’S Two more neurotoxin developers expect a multi-pronged effort to boost Xeomin DYSPORT FOR AESTHETIC USES to seek FDA approval in 2019 and 2020 for and the rest of Merz’s medical aesthet- Ipsen praised Galderma, a division of products that will compete with Botox, ics franchise, which includes the dermal Nestle SA, during its third quarter 2018 Xeomin and Dysport. However, these two fillers Radiesse and Belotero, Asclera earnings call on Oct 25 for Galderma’s new products may not satisfy unmet needs (polidocanol) for sclerotherapy to reduce sales of the neurotoxin Dysport (abobotu- in medical aesthetics, such as longer- varicose veins on legs, the Cellfina device linumtoxinA), for which sales increased acting injectables, treatments for sagging to reduce the appearance of cellulite, over- 15.4% year-over-year during the first nine necks and other non-invasive treatment the-counter skin care brand Mederma, the months of 2018 to $260.5 million across options that can help patients delay or physician-dispensed skin care line Neocu- neuroscience and aesthetic indications. avoid plastic surgery. tis, and the laser tattoo-removal product Galderma has commercial rights for aes- So, what is being used most now and Describe PFD Patch. “We went through thetic uses in the US, Canada, Brazil and where should biopharma companies invest a major sales force restructure and we Europe; Ipsen’s territories include Russia in medical aesthetics next? In Vivo spoke organized our field selling teams [in 2017] and the Middle East. with three dermatologists about current so they were more product-specific versus The company has said that it anticipates products and unmet needs in this space generalists,” Rhatigan said. a 10% per year growth rate for the product and asked biopharma companies how they The company also increased its focus driven by both aesthetic and therapeutic are investing in the future. on relationship-building with physician indications, and it is taking Dysport into Devices are a growing area of investment customers who use and dispense Merz’s Phase II trials for hallux valgus (bunions) for both Allergan and Merz, who have medical aesthetics products. Rhatigan and vulvodynia (vulvar pain), both of looked outside of their drug development said the relationship between aesthetic which have no approved therapies. Ipsen comfort zones to offer physicians treat- medicine manufacturers and their physi- also has a fast-acting neurotoxin in Phase I ments that meet patients’ demands. cian customers “is really critical, because and a longer-lasting neurotoxin in preclini- Dermatologist Rebecca Baxt of Baxt Cos- what we learn and do and decide as a cal development. Medical in Paramus, NJ, said there is no
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device that can do what Botox or Juvederm aesthetics market before a potentially Bonti Inc., whose lead asset is the fast- can do, but there is no injectable that can longer-lasting product comes to the mar- acting neurotoxin EB-001. (Also see “Al- do what lasers or other devices achieve. ket. ReVance Therapeutics Inc. believes lergan Buys Bonti, Releases New Data In Laser resurfacing and photofacials can- that its RT002 (daxibotulinumtoxinA), Defense Of ‘Iconic’ Botox Brand” - Scrip, not reduce wrinkles, but they can reduce based on Phase III data reported to date, 14 Sep, 2018.) red and brown spots, help collagen grow, will have a less frequent dosing schedule Allergan sees Bonti’s product candidate, reverse sun damage and reduce the ap- that will differentiate it from already ap- which reduces wrinkles within 24 hours pearance of pores. proved competitors. (Also see “Revance’s and last for two to four weeks, as a sort of Baxt pointed out, however, that there Long-Acting RT002 Will Have Slow-Moving gateway drug to Botox. EB-001 can allow are no injectables or devices that effec- Impact On Allergan” - Scrip, 5 Dec, 2017.) patients considering the longer-acting tively treat the neck or undereye bags. Allergan has said its well-known Botox established product to test drive the short- “We still don’t have anything non-invasive brand will hold up to newer toxins and term neurotoxin. It also could be used as that’s an alternative to surgery” for the doubts that RT002 will be truly differenti- an on-demand wrinkle reducer that can neck, she said, noting that CoolSculpting, ated, since only a portion of patients in provide results on short notice following Ultherapy and even Allergan’s double- Revance’s Phase III SAKURA trials have its first FDA approval, which is expected chin reducer Kybella (deoxycholic acid) seen benefits out to six months versus in 2024. Allergan also has a topical neurotoxin delivered by microneedle technology and a long-acting injection in early stages of de- Devices are a growing area of investment for velopment. Before those candidates reach the market, the company expects FDA ap- both Allergan and Merz, which have looked proval for a pre-filled syringe Botox prod- uct – versus the current product that has outside of their drug development comfort to be reconstituted before injection – in 2022. A liquid formulation in a vial for the zones to offer physicians treatments that meet follow-on product nivobotulinumtoxinA also may be approved in 2022. New Botox patient demands. indications to contour the neck, define the jaw line and smooth skin are expected to launch between 2023 and 2025. can help, but nothing comes close to the Botox’s approved dosing of every three Merz also is actively looking to add results patients get with plastic surgery. months. Revance intends to submit a BLA indications to Xeomin’s label and bring Besides the undereye area and neck, an- for RT002 in 2019 after reporting results in new products to its medical aesthet- other area of unmet need is neurotoxins from the SAKURA 3 long-term safety trial ics portfolio. Rhatigan said the company that last longer, so that patients need less in the fourth quarter of this year. The study has looked for any biopharma product or frequent injections, or topical toxins, so also will provide additional efficacy data medical device able to be used in cash-pay patients can avoid injections altogether. to compliment results from prior SAKURA medical aesthetics as opposed to thera- program readouts. The company believes peutics or devices that require third-party WILL NEW NEUROTOXINS MEET its data support a label that indicates treat- payer coverage. “We’re actively perusing MARKET DEMANDS? ment as infrequently as two times per year the business development landscape in In terms of new neurotoxins, Evolus Inc.’s versus Botox’s quarterly dosing. Revance that space,” Rhatigan said, noting that DWP-450 (prabotulinumtoxinA) is back on also has an agreement with Mylan NV to Merz had sold parts of its business – such track for a potential spring 2019 launch in develop a Botox biosimilar. However, the as its medical dermatology business two the US after the company resubmitted its bi- partners acknowledge that the product years ago – that do not fall into the cash- ologic license application (BLA) to the FDA will take a while to develop, given the pay category. in early August. The agency issued a com- complexity of copying and manufacturing He said many of the assets Merz was plete response letter (CRL) in May related Allergan’s product. looking to potentially acquire were devices to the initial BLA filing based on chemistry, and estimated that as much as 75% of manufacturing and controls (CMC) issues, ALLERGAN DEFENDS ITS POSITION available products were devices. He also not safety or efficacy concerns. Allergan is working on new aesthetic pointed out that those products had at DWP-450 has demonstrated efficacy and indications for Botox and has neurotoxin least one big advantage over biopharma duration of effect that is similar to Botox, product candidates that offer a rapid- assets. “There tends to be a little bit faster so the company will have to find a way onset, short-duration option as well as path to market for a device – although through price or marketing strategies – or a longer-acting candidate and a topical it’s slowed down in the last 10-15 years, both – to steal a significant share of the toxin. The company announced during a it’s still faster than the pharmaceutical or neurotoxin market. DWP-450 will have September 14 investor event that it agreed biological market,” he said. about a year to gain ground in medical to pay $195 million up front to acquire
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Why The M&A Boom Many Expected In 2018 Didn’t Happen High valuations, an uncertain biopharma macro environment and widespread use of US tax reform benefits for share buybacks and capital investments resulted in less major M&A than expected. JOSEPH HAAS Opinions vary widely on whether 2019 will be any different. SENIOR WRITER, PHARMA, US The wave of major activity expected in 2018, spurred at least Pharmaceutical Co. Ltd. and Shire PLC. The two com- partially by the corporate tax reform that gave US-based panies agreed to a transaction valued at approximately companies a lower corporate tax rate and the chance to $61.2 billion. With Japan’s Takeda acquiring Dublin- repatriate off-shore cash at a low rate, did not materialize. domiciled Shire, this mega-merger was not the result The 10 largest US-based life sciences firms were ex- of US tax reform, but would the deal set the stage for pected to repatriate about $160 billion in cash under a biopharma M&A wave? the tax reform provisions, according to a report by EY It did not happen. By June, Ovid Therapeutics Inc. in early 2018, positioning them with significant leeway CEO Jeremy Levin was rapping the knuckles of his for major deal-making. Nonetheless, there were only peers, telling In Vivo at the 2018 BIO International three biopharma M&A deals valued at $10 billion or Convention the deal-making that tax reform was sup- greater in 2018. Overall, life sciences deal volume rose, posed to drive – and thereby replenish the industry by but aggregate deal value declined. recycling capital to innovative investors – went by the Exhibit 1. The 10 Largest Biopharmaceutical M&A Deals Of 2018*
DEAL PARTNERS VALUATION (US DOLLARS) Takeda merges with Shire, May 8 $61.2bn GSK acquires remaining 36.5% of consumer health JV with Novartis, June 1 $13bn Sanofi acquires Bioverativ, Jan. 22 $11.6bn Celgene buys Juno, Jan. 22 $9bn Novartis acquires AveXis, April 9 $8.7bn GSK buys Tesaro, Dec. 3 $5.1bn Sanofi acquires Ablynx, Jan. 29 $5.1bn P&G acquires Merck KGAA’s consumer health business, April 18 $4.2bn CVC Fund VII buys majority stake in Recordati, June 29 $3.8bn Servier acquires Shire’s cancer business, April 16 $2.4bn
*As of Dec. 6, 2018, by upfront deal value. SOURCES: Strategic Transactions, Medtrack
Back in March, Leerink Partners had predicted that boards in favor of executive compensation and share Pfizer Inc., Merck & Co. Inc. and Roche all would be buybacks. The former CEO of Teva Pharmaceutical looking to make major acquisitions in the near-term, Industries Ltd. and chair of BIO’s 2019 convention with cost synergies a key driver of such activity. But it said the industry had taken the proceeds of tax reform became clear by spring that biopharmaceutical firms and indulged in short-term behavior, while eschewing were directing a significant portion of the windfall to longer-term strategy. share buybacks and capital improvements. In April, US Perhaps no one should have been too surprised. Senator Cory Booker (D-NJ) issued a report blasting the Several US-headquartered biopharmas signaled early pharmaceutical industry for burrowing the benefits of in the year that they intended to undertake both share tax reform into those uses rather than to drive down buybacks and capital investments with their tax reform drug prices for consumers. gains. Pfizer CEO Ian Read, who in August 2017 had said his company would pause on pursuing M&A while TAKEDA/SHIRE THE EXCEPTION awaiting the outcome of tax reform, said the company On May 8, the one big deal industry watchers were would “remain disciplined in our approach” with plans waiting for happened, with the merger of Takeda for $15 billion in share buybacks, $5 billion in capital
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expenditures to increase its manufactur- tion of Tesaro was surprising because after cited by 62% of the EY survey respondents. ing capabilities and a dividend of $0.34 the UK pharma sold off much of its cancer “We believe there are a number of things, per share. portfolio to Novartis in 2014 for $14.5 bil- including trade policies and trade differ- On May 1, during a first quarter earn- lion, its oncology focus has been very ences – such as US/Europe, US/China and ings call, Read said Pfizer neither needed selective. But CEO Emma Walmsley has Brexit – that are impacting the deal-making to make a transformative deal nor saw made cancer a big therapeutic focus going landscape,” Behner continued. “Under this “appropriate values right now” for doing forward, which the Tesaro deal reflects. bucket, I would probably also list continued such a deal anyway. Pfizer was not alone. “They’ve been very clear that within discussions around pricing in the US, in AbbVie Inc. in January told investors it oncology, even though they sold most of particular around biotech and specialty prod- would realize an effective tax rate of 9% in their assets to Novartis, they are focusing ucts, and those discussions are clearly not yet 2018 – an industry best, it claimed – but on immuno-oncology, cancer epigenetics at a point where as a pharma executive you would deploy the benefits of tax reform in and cell therapy,” Micklus said. Tesaro can say either it’s coming or not coming.” returning capital to shareholders and capi- markets the PARP inhibitor Zejula, but tal expenditures to expand its US facilities. also has a pipeline of immuno-oncology TAX REFORM BENEFITS LOOKED Amgen Inc. had nearly $42 billion cash candidates. “I think that’s where Tesaro UNCLEAR TO SOME on hand at the end of 2017 but said on Feb. fits in for GSK,” she said. Morningstar analyst Damien Conover said 1 that it would commit $14.4 billion to the late-2017 passage of tax reform and share buybacks and $3.5 billion to capital DEAL VOLUME ROSE, BUT lack of guidance from the Internal Revenue expenditures over the next five years, AGGREGATE VALUE FELL Service left many companies uncertain how including $750 million in 2018. Merck PwC reported in November that 74 life they would benefit under the new law. Com- said it was planning $12 billion in capital sciences deals in the third quarter of 2018 panies generally said they needed more expenditures, two-thirds of that to occur accounted for the highest quarterly deal time to understand the law’s ramifications, in the US – but CEO Kenneth Frazier said volume since the first quarter of 2017, but which may have created a delayed impact in it also was “actively engaged in looking noted that the aggregate $22.6 billion valu- the benefit from tax reform, he said. for the best opportunities to enhance its ation of those transactions reflected the “Then, the other thing slowing the pace, pipeline” such as a major deal. Perhaps lowest value total since the fourth quarter we consistently hear from executives in the looking back on Merck’s $42 billion merger of 2016. A lack of mega-deals was offered pharmaceutical space that valuations in with Schering-Plough in 2009 – one of as the cause behind this contrast. the tuck-in acquisitions – I don’t know ex- three biopharma mega-mergers that year Industry observers pointed to several actly how you define it, maybe $1 billion to – he added that large transformational factors as explaining why M&A in actual- $8 billion – are very high,” Conover noted. deals had not necessarily resulted in the ity this past year did not measure up to “It’s difficult for firms to make those acqui- synergies and pipeline growth expected. expectations – asset scarcity due largely sitions and be value-enhancing without a Including the Takeda/Shire combina- to high valuations, uncertain guidance lot of upside on clinical studies that a lot tion – which obtained final approval at around tax reform and the political climate of these smaller firms are doing.” a Takeda shareholder meeting on Dec. for biopharma, particularly the ongoing US While Conover understands why perhaps 5 – there were only three biopharma M&A drug pricing debate. the impact of tax reform on deal-making deals valued at $10 billion or greater in Peter Behner, global life sciences transac- was delayed, he takes greater issue with 2018. Neither of the other two could be tion leader at EY, told In Vivo that a recent how many of the companies ultimately de- considered a mega-merger in the mode survey of pharma, biotech and medtech ployed their windfall. Capital expenditures of previous combinations such as Pfizer/ executives indicated valuation, the geopo- are a lot less likely to spur growth than Wyeth or Sanofi/Genzyme. litical climate and regulatory issues were adding pipeline or commercial products to GlaxoSmithKline PLC and Novartis the primary factors hindering major deals. biopharma portfolios, he asserted. AG wound down their 2014 consumer “Sixty-eight percent of the responders “When thinking about the best way to health joint venture, with GSK acquir- said they didn’t transact large deals in 2018 re-deploy all of this cash, capital spending ing the Swiss firm’s 36.5% stake for $13 because of valuations,” Behner noted. vs. acquisitions, this is a relatively capital- billion in the year’s second-largest deal “The mere fact that we’ve had a great stock light industry,” the analyst pointed out. in March. Previously, Sanofi had shored market for a number of years now is driving “There are major manufacturing facili- up its hemophilia business by acquiring valuations of listed firms out of the pharma ties – don’t get me wrong – but given the Biogen Inc. spinout Bioverativ Inc. for companies’ corporate M&A spreadsheets, spectrum of what drives returns, it tends $11.6 billion in January. In fact, only one and in essence, those deals are likely be- to be the intellectual property. If there is of the industry’s 10 largest M&A deals by coming too dilutive to existing sharehold- a disproportionate amount of cash going value occurred after mid-year, with GSK’s ers of the respective buyer.” For privately to capital investments for manufacturing $5.1 billion buyout of Tesaro Inc. on Dec. held companies, deal structures often are or things like that, that would strike me 8. US tax reform, therefore, did not start more complex, but valuation discrepancies as a bit odd. For the long-term viability off a slow-growing M&A trend, it appears. between potential buyers and sellers also of growth, it’s the innovation that really Datamonitor Healthcare principal ana- were a barrier, he added. matters, less so the infrastructure.” lyst Amanda Micklus said GSK’s acquisi- Geopolitical and regulatory concerns were Conover couldn’t think of an acquisition
34 | In Vivo | December 2018 BUSINESS
deal in 2018 that was catalyzed by the tax Exhibit 2 reform. His Morningstar colleague Karen An- Business Development Activity By US-Headquartered Biopharma Firms, 2018 dersen said Takeda’s motivation was almost entirely around pipeline, with Velcade (bort- P zer 3 14 1 ezomib) slated to face generic competition Merck & Co. 1 8 3 in 2019, and drug pricing pressure in Japan. Gilead 5 2 “After cutting costs, outsourcing clinical AbbVie 6 1 trial management and selling its rights to 1 1 off-patent branded therapies as well as a Amgen chemicals business, Takeda needed to build Eli Lilly* 2 4 3 Licensing a pipeline,” she told In Vivo. “It’s had a flurry BMS 7 1 of early-stage deals in gastrointestinal, neu- Biogen 32 Partnerships rology and oncology indications, but all of Celgene 2 4 1 these deals are very early-stage and do little M&A Regeneron 1 to cushion the firm from the impact of Vel- cade generics in 2019, leaving Takeda with 0 5 10 15 20 anemic growth prospects and increasing M&A includes spinouts. Partnerships include clinical trial collaborations. Licensing includes out- reliance on GI drug Entyvio (vedolizumab).” licensing and asset divestitures. *Lilly’s 2018 deal-making included the $80m purchase of priority Meanwhile, the headwinds Shire is review voucher from Siga Technologies on Nov. 1. SOURCE: Strategic Transactions, Medtrack facing in hemophilia – due partially to Sanofi’s buyout of Bioverativ in Janu- What was available, he said, was “bi- Morningstar’s Andersen pointed out that ary – may have pushed the rare disease nary bets” – those that would hinge largely worries about generics and biosimilars are specialist’s valuation just low enough to on the success or failure of single clinical common to the bigger biotech firms, so she be manageable, if not truly affordable, for development program – valued in the $10 anticipates that Amgen, Celgene and Gilead Takeda, Andersen added. billion-$20 billion range. Companies were alike will seek out significant acquisitions in Kyle Woitel, M&A, Life Sciences and decidedly wary of such opportunities, the year ahead. Health Care Tax Leader at Deloitte, said tax which might reflect wise decision-making, Conover, her colleague, said he expects reform probably did help spur a busy pace Hunzinger opined. “massive” M&A deals in the biopharma of deal-making early in 2018, but admitted Meanwhile, there has been continued sector within the next three to four years, that “I don’t think it was at a very meaning- interest in bolt-on transactions and con- and cites Bristol Myers Squibb as a likely ful pace driven by tax reform.” While tax sideration of new business models. “That’s acquisition target. “I know everyone calls out policy can encourage business develop- where we see a lot of activity – companies Bristol as far as large M&A, and Pfizer is defi- ment activity such as M&A, he explained, asking, ‘how do we look at new business nitely the likely acquirer, but you also could it is only one factor and businesses looking models kind of moving beyond the pill’ see Novartis likely making a bid there,” he to make acquisitions still need to have other and those aren’t maybe large-dollar deals said. “Both of those firms do not have a very positive factors in their favor as well. but it certainly eats up a lot of demand of entrenched immuno-oncology franchise, “Once we got through that initial wave management as they look to transform their and with Eliquis (apixaban) obviously Pfizer after tax reform was passed,” he continued, businesses,” Hunzinger added. “They’re go- could bring that all in house, while Novartis “I think companies turned to looking to use ing into spaces they don’t know as well, and still has an active cardiology program, so I’d some of that cash savings to invest in other it does take a lot more management time.” say that would be the most likely large M&A longer-term strategies beyond M&A, such as Datamonitor Healthcare’s Micklus said deal that I would anticipate.” He also thinks investing in their business, their people, R&D, political uncertainty led companies that rare disease companies could spur bidding paying off debt and these share buybacks.” might have been buyers to be more re- wars, predicting that both SOBI and BioMa- served and take a wait-and-see approach. rin Pharmaceutical Inc. will be targets, with HIGH VALUATIONS AND HIGH RISK Questions about how the Trump Adminis- Sanofi a possible pursuer. Glenn Hunzinger, PwC’s US Pharma & Life tration would recommend reducing drug Woitel said the need for IRS guidance Sciences Deals Leader, whose January prices caused a lot of hesitancy leading up around the US tax reform may result in some report predicted significant biopharma to the introduction of the administration’s continued hesitancy in 2019. Still, he thinks M&A, said the fundamentals needed for an proposal this past May, she said. the opportunity for tax reform-driven M&A M&A burst – available cash, access to cash, remains, because all the cash generated by growth agendas calling for pipeline assets CAN THE M&A BOOM HAPPEN IN the law has not been depleted, despite the – all were in place, but were not enough 2019 INSTEAD? well-publicized share buybacks and capital to overcome the mitigating factors of asset Perhaps given the predictions that did not investments. “I think that what’s remaining scarcity and high valuations. Another hur- materialize in 2018, market observers seem and the ability for companies to benefit from dle was heightened competition for certain reluctant to make big guesses for 2019, the lower corporate tax rate will drive some types of assets, specifically in the oncology but generally expressed optimism that M&A out of that cash savings,” he said. and rare disease spaces, he added. increased M&A activity is on the horizon.
December 2018 | In Vivo | 35 BUSINESS
TITANS OF PHARMA
Johnson Gilead & Johnson Pfizer Merck & Co Sciences AbbVie Roche Novartis Sanofi GlaxoSmithKline AstraZeneca US US US US US Switzerland Switzerland France UK UK
Alex Ian Kenneth John Richard Severin Joseph Olivier Emma Pascal CEO Gorsky Read Frazier Milligan Gonzalez Schwan Jimenez Brandicourt Walmsley Soriot Appointed To Role In 2012 2010 2011 2016 2013 2008 2010 2015 2017 2012 (at company inception) Previous Position Chair, Pfizer SVP, Group President, President and COO, Head of CEO, Division Head, CEO, CEO, COO, Roche J&J Medical Devices President, Worldwide Merck & Co, Inc Gilead Sciences Pharmaceutical Roche Diagnostics Novartis Bayer Healthcare GSK Consumer Pharmaceuticals Biopharmaceuticals Products Pharmaceuticals Healthcare Group at Abbott Laboratories Background Began career as sales Career spent at Legal: joined Merck Joined Gilead in Spent 30 years Economics, Law Bachelor’s degree Physician by Before joining Formerly CEO rep at Janssen Pfizer, joined as in 1992 as general 1990 as research at Abbott. degrees, joined in economics training, had GSK in 2010 was of Genentech, Pharmaceutical, J&J. an auditor. Has counsel. scientist. Studied Roche as trainee then MBA; prior to leadership roles with L’Oréal for 17 doctor of veterinary Defected to Novartis chemical engineering biochemistry. in corporate Novartis had senior at Pfizer before years in marketing medicine and as head of pharma for and accounting finance in 1993. leadership roles at Bayer. and general MBA holder. North America 2004- qualifications. HJ Heinz Co. management. 2008 before returning.
2016 Compensation1 $26.9m $17.3m $21.8m $13.9m $21.0m CHF11.6m CHF12.0m EUR9.7m n/a3 £9.8m (+12.9%) (-3.7%) (-10.0%) (+68.4%)2 (+0.8%) (-2.6%) (+3.4%) (-42.3%) (+22.6%)
2016 Company Sales $71.9bn $52.8bn $39.8bn $30.4bn $25.6bn CHF52.6bn $48.5bn EUR33.8bn £27.9bn $23.0bn
2016 Company Net Profit $16.5bn $7.2bn $5.7bn $13.5bn $6.0bn CHF9.7bn $6.7bn EUR4.5bn £1.1bn $3.5bn
Market Cap (June 30, 2017) $355.9bn $200.5bn $175.6bn $92.5bn $115.4bn CHF206.7bn CHF207.3bn EUR105.6bn £80.4bn £65.0bn
Paul Mikael Roger Norbert Michael n/a Vasant Elias Patrick n/a R&D Head Stoffels Dolsten Perlmutter Bischofberger Severino no single R&D chief Narasimhan Zerhouni Vallance no single R&D chief Appointed To Role In 2009 2010 2013 2007 2014 n/a 2016 2011 2012 n/a Previous Position Worldwide Chairman, Head of Wyeth Head of R&D, Amgen EVP, R&D, Gilead SVP, Global n/a Global Head of Scientific Advisor SVP, Medicines n/a Pharmaceuticals R&D, previously at Development and Development, to CEO Christopher Discovery and (J&J) Boehringer Ingelheim Corporate Chief Novartis Viehbacher Development, GSK and AstraZeneca Medical Officer, Pharmaceuticals Amgen
$12.7m $8.2m $7.1m $6.2m $7.2m CHF3.6m £0.78m 2016 Compensation1 n/a n/a n/a (+18.0%) (+35.8%) (-14.5%) (-11.3%) (+9.7%) (from Feb 2016) base salary
1 base salary, bonus & long-term incentives (including equity awards), 2 assumed CEO position Mar. 10, 2016 3 Overall 2017 package will be c.25% less than the £6.8m received by Sir Andrew Witty in 2016
36 | In Vivo | December 2018 BUSINESS
A snapshot of the industry’s top leaders and the businesses they oversee
Johnson Gilead & Johnson Pfizer Merck & Co Sciences AbbVie Roche Novartis Sanofi GlaxoSmithKline AstraZeneca US US US US US Switzerland Switzerland France UK UK
Alex Ian Kenneth John Richard Severin Joseph Olivier Emma Pascal CEO Gorsky Read Frazier Milligan Gonzalez Schwan Jimenez Brandicourt Walmsley Soriot Appointed To Role In 2012 2010 2011 2016 2013 2008 2010 2015 2017 2012 (at company inception) Previous Position Chair, Pfizer SVP, Group President, President and COO, Head of CEO, Division Head, CEO, CEO, COO, Roche J&J Medical Devices President, Worldwide Merck & Co, Inc Gilead Sciences Pharmaceutical Roche Diagnostics Novartis Bayer Healthcare GSK Consumer Pharmaceuticals Biopharmaceuticals Products Pharmaceuticals Healthcare Group at Abbott Laboratories Background Began career as sales Career spent at Legal: joined Merck Joined Gilead in Spent 30 years Economics, Law Bachelor’s degree Physician by Before joining Formerly CEO rep at Janssen Pfizer, joined as in 1992 as general 1990 as research at Abbott. degrees, joined in economics training, had GSK in 2010 was of Genentech, Pharmaceutical, J&J. an auditor. Has counsel. scientist. Studied Roche as trainee then MBA; prior to leadership roles with L’Oréal for 17 doctor of veterinary Defected to Novartis chemical engineering biochemistry. in corporate Novartis had senior at Pfizer before years in marketing medicine and as head of pharma for and accounting finance in 1993. leadership roles at Bayer. and general MBA holder. North America 2004- qualifications. HJ Heinz Co. management. 2008 before returning.
2016 Compensation1 $26.9m $17.3m $21.8m $13.9m $21.0m CHF11.6m CHF12.0m EUR9.7m n/a3 £9.8m (+12.9%) (-3.7%) (-10.0%) (+68.4%)2 (+0.8%) (-2.6%) (+3.4%) (-42.3%) (+22.6%)
2016 Company Sales $71.9bn $52.8bn $39.8bn $30.4bn $25.6bn CHF52.6bn $48.5bn EUR33.8bn £27.9bn $23.0bn
2016 Company Net Profit $16.5bn $7.2bn $5.7bn $13.5bn $6.0bn CHF9.7bn $6.7bn EUR4.5bn £1.1bn $3.5bn
Market Cap (June 30, 2017) $355.9bn $200.5bn $175.6bn $92.5bn $115.4bn CHF206.7bn CHF207.3bn EUR105.6bn £80.4bn £65.0bn
Paul Mikael Roger Norbert Michael n/a Vasant Elias Patrick n/a R&D Head Stoffels Dolsten Perlmutter Bischofberger Severino no single R&D chief Narasimhan Zerhouni Vallance no single R&D chief Appointed To Role In 2009 2010 2013 2007 2014 n/a 2016 2011 2012 n/a Previous Position Worldwide Chairman, Head of Wyeth Head of R&D, Amgen EVP, R&D, Gilead SVP, Global n/a Global Head of Scientific Advisor SVP, Medicines n/a Pharmaceuticals R&D, previously at Development and Development, to CEO Christopher Discovery and (J&J) Boehringer Ingelheim Corporate Chief Novartis Viehbacher Development, GSK and AstraZeneca Medical Officer, Pharmaceuticals Amgen
$12.7m $8.2m $7.1m $6.2m $7.2m CHF3.6m £0.78m 2016 Compensation1 n/a n/a n/a (+18.0%) (+35.8%) (-14.5%) (-11.3%) (+9.7%) (from Feb 2016) base salary
1 base salary, bonus & long-term incentives (including equity awards), 2 assumed CEO position Mar. 10, 2016 3 Overall 2017 package will be c.25% less than the £6.8m received by Sir Andrew Witty in 2016
December 2018 | In Vivo | 37 BUSINESS 100
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7.4 10 25 50 75 90 100 Syneos Health is the only fully integrated biopharmaceutical solutions organization. Our company, including a Contract Research Organization (CRO) and Contract Commercial Organization (CCO), 10.2 2.2
3 2.2 is purpose-built to accelerate customer performance to address modern market realities. Created 3.1 through the merger of two industry-leading companies – INC Research and inVentiv Health – we bring 0 40
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products worldwide. 40 70
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SHORTENING THE DISTANCE FROM LAB TO LIFE®.
INC Research and inVentiv Health have become Syneos Health™, the only fully integrated biopharmaceutical solutions organization with a unique approach. At Syneos Health, all the disciplines involved in bringing new therapies to market, from clinical to commercial, work together with a singular goal — greatly increasing the likelihood of customer success. We call our business model Biopharmaceutical Acceleration. You can call it the future.
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FUTURE-PROOFING WITH A PURPOSE: Ipsen’s CEO Talks Speed Of Innovation, Empowerment And The Primacy Of The Patient
A biotech mindset, agile and collaborative workforce, and momentum built through new assets and partnerships is allowing the specialty care-driven biopharma Ipsen to increase its impact on patients with unmet needs around the world. CEO David Meek discusses DAVID MEEK these and other topics in an interview with Scrip 100. CEO, IPSEN
What do you see as the greatest market challenges currently heart of three internationally reputed scientific hubs [Paris- facing Ipsen and how are you negotiating these issues? Saclay in France, Oxford in the UK, and Cambridge in the US], Today, the world of medicine development and commercializa- we’re pushing an external innovation approach, promoting tion is a hyper-competitive space. The speed of innovation is much partnerships and shifting our model to deliver outcomes that faster than it has ever been, and it will only accelerate. Success is improve patient’s lives. no longer defined by size and market value, but by the ability to Business development is a top priority for the company, and we adapt in a rapidly evolving environment. are actively assessing many opportunities - we have significant Oncology is the largest part of our Specialty Care business and firepower to invest. We are looking at all stages of clinical devel- our biggest challenge is building on our momentum. To build on opment but would particularly like to find mid-stage assets with our position as one of the world’s top 20 biopharmaceutical com- proof of concept. We are looking at assets in oncology, neurosci- panies in terms of oncology sales, we plan to add assets to our port- ence and rare diseases, and our criteria remain assets that are folio and actively look at new partnerships and acquisitions. This strategically aligned, financially viable and which we are able to requires a biotech mindset, which is all about agility and speed integrate within our existing portfolio. of action, as well as a laser-like focus. We have already achieved Our strategy embeds the values and enables the capabilities for this with our development plans, which now encompasses both us as a drug development and commercial powerhouse, with an the life-cycle management of our established products and the established track record of developing treatments with the aim to development of new molecules – but we must go even further. contribute to the improvement of patient care for eligible patients. Our size and biotech mindset is an advantage: we have the size to How has Ipsen evolved in recent years to reflect the changing have an impact on millions of people across 115 countries, while face of biopharma? still maintaining an agile organization that promotes innovation There is a sense of urgency at Ipsen right now. It has become and patient-centricity. an international player within oncology, neuroscience and rare diseases. We have transformed from a French multinational with How would you describe the company culture at Ipsen Pharma? international sales into a global company with French roots, but Turning ideas into action. Turning talent into impact. The with a global reach and scope. primacy of the patient is one of the most important things any Our number one priority is to build a sustainable pipeline. Our pharmaceutical company can demonstrate, and this is the motiva- end goal is to ensure we bring innovative medicines to market to tion for associates across Ipsen. address unmet patient needs as quickly as possible. This means Our culture is designed to cut out complexity and bureau- we have to be where the innovation is. With R&D centers at the cracy, to free up employees to innovate and have impact. We’ve
40 | In Vivo | December 2018 LEADERSHIP
created a performance framework that focuses an lives – we must never lose sight of that. Most crucially, individual’s development on the things that will have it means working closely with all our stakeholders to the biggest impact on our strategic aims as well as an understand what matters most to them. It’s this careful employee’s personal goals. collaboration that will drive innovation, strengthen We make sure our people receive the support they our pipeline and consolidate Ipsen’s leadership in need to develop their talents and turn ideas into ac- our targeted diseases. This in turn will enable us to tion. And each and every one of us is expected to be in- achieve our goal of launching at least one treatment novative, collaborative and agile. Ipsen is no ordinary or new indication every year. company, and we offer extraordinary opportunities to our employees. We won’t stand still, because patients What makes for an effective leader? don’t have time to wait. It’s about being entrepreneurial, and constantly looking outside, being sceptical to where the great- What is unique about the company’s leadership est science is coming from. It’s also about motivation structure and approach? – understanding that true success can only come People make the difference. Ipsen is a global, spe- from putting patient needs first, and investing in our cialty-driven biopharmaceutical group. All over the employees. I’m proud to say we are already seeing the world, our teams want to make a difference to millions benefits of both these things in the number of talents of people, working on new solutions for debilitating that joined Ipsen, our newly established leadership diseases and aiming to improve quality of life. Our team, and our growth – as we are moving up the list work is challenging, rewarding and absolutely vital. of top 20 oncology companies globally. We are in the business of fast-moving innovation. We encourage personal growth through international What is one myth about the pharma industry you assignments and collaboration across functions and would like to set straight? disciplines. We empower our people to act like en- That we can’t be responsible to our shareholders trepreneurs, looking to add value and take personal, and patients at the same time. In fact the two can be ethical responsibility for their work. Of course, a plan mutually beneficial. Yes, we are a commercial com- only comes together if people stick to it – all our lead- pany, and yes, we aim for growth year in, year out ers, across the business, are accountable for ensuring – but we also have a contract with society, to deliver that their teams are focused on continuous develop- medicines to the people who need them most, and in ment and growth. the fastest time possible. We also have a duty towards our employees, to ensure they are motivated, inspired How do you balance the need for ROI and innovation? and that they have a say. Hopefully our growth as a Our growth has allowed us to continue to invest company is a reflection that we’re getting all these and to drive innovation. It is a virtuous cycle. The things right. key now is to further strengthen the long-term sus- tainability of the company and our development How are you future proofing Ipsen? What are your programme, which is why we’re transforming the expectations for the company in the coming years? way we do R&D. Our ambition is to become a devel- With so many patient needs still unmet, there is opment powerhouse in oncology, neuroscience and much to be done. We will focus our R&D on a limited rare diseases, while collaborating with academia and number of pathologies where we have the opportunity biotech on early research. Externally, we’re expand- to lead, bolstered by the acquisition of therapeutic ing our networks and have added search & evaluation assets that fit with our strategy, and that can be teams in Cambridge in the US, Milton Park, Oxford successfully integrated into Ipsen. Business develop- in the UK, Paris, and also in Asia. We’re partnering ment and the accelerated transformation of the R&D with some of the best minds in the world – it’s a very organization also remain top priorities to expand and exciting time for Ipsen. sustain long-term growth. Our oncology portfolio will lead the way in growth, our neurotoxin franchise How would you describe your approach as a busi- will also expand and we will build our rare diseases ness leader? franchise. All the signs are extremely good, and we Impatient – but in a good way. Diseases don’t stand are well on track to meet our 2020 objective for group still and neither can we. I have the task to completely sales of more than €2.5bn. transform the company and how we are doing busi- ness in one of the most dynamic, fast-moving sectors Disclaimer: This content is initiated, developed and of health care. So I need to be impatient, and I also funded by Ipsen Pharma need to inspire that drive in others. Because everything we’re doing as a company is with the aim of improving ALL-ALL-000411 – December 14th 2018
December 2018 | In Vivo | 41 LEADERSHIP
Schleifer, Yancopoulos And The $36 Billion Friendship In 1988 Len Schleifer took a talented scientist, George Yancopoulos, out to dinner to persuade JO SHORTHOUSE the immunologist to join his newly formed company. Thirty years, six drug approvals and MANAGING EDITOR, PHARMA, EUROPE many arguments later, pharma’s most famous friendship is now looking to change the way allergies are treated.
“It is a hard-fought relationship. We argue incessantly BE LIKE ROY like siblings,” describes Regeneron Pharmaceuticals Enter George Yancopoulos, along with his team, the Inc. CEO Len Schleifer when asked how he would principal inventor and developer of Regeneron’s characterize his friendship with Yancopoulos. “We six approved drugs, as well as the company’s pro- both know that we could not have done what we have prietary TRAP technology, and its VelociGene and done without having partnered with the other one,” he VelocImmune antibody technologies. It is on the continues. “And that is what makes a partnership suc- foundation of these inventions that Regeneron, cur- cessful in my opinion. Like in a marriage and in a work rently with a market capitalization of $36 billion, has partnership, if you think that you don’t need the other created successful drugs and continues to drive into person, and that you can do it all by yourself, then these new disease areas. things never work,” says the Queens, New York, native. “From the moment I met him I could tell Len was a “Still, to this day I don’t think our friendship has very ethical guy; it was very clear that he was driven changed,” concurs Yancopoulos. “Whenever I have by the right motivations,” Yancopoulos recalls of their an idea, about anything, the first person I want to first meeting. After hearing Schleifer’s pitch, he was talk to is Len; his reaction is usually negative and we as attracted to building a company from scratch as argue about it. And then eventually we get to a better he was to becoming the only gene cloner in the field place,” he explains. of neurobiology. The friendship between Schleifer and Yancopoulos, “Hold on, hold on,” Schleifer interrupts, as Yanco- built on “respect and recognition,” started 30 years ago. poulos is telling his side of the story. “First of all, he Schleifer had a “somewhat naïve idea” that finding the comes from a very traditional Greek immigrant family, right growth factor for neurons dying in neurological and his father was my greatest ally in getting George diseases, such as Alzheimer’s or Parkinson’s, would to do this,” he explains. Yancopoulos was “kind of lead to new treatments for those diseases. Working famous,” says Schleifer. He graduated number one in at New York Hospital as a neurologist at the time, he his Bronx high school, number one at Columbia, and decided to follow the example of a small company he number one in medical school and graduate school. kept hearing about, Genentech Inc., and started to put “But his father would basically say, ‘Well, if you are so in place meetings to create a vehicle for his idea. good and you’re so smart, how can you be making such After “pounding on a bunch of doors,” George Sing of little money?’” Schleifer notes with a laugh. Merrill Lynch Venture Capital committed, on a napkin in a “My dad was a very big influence on me,” explains Chinese restaurant, to give Schleifer $1 million to start the Yancopoulos. “In 1975, when I told him that I was company. He was impressed that Alfred Gilman, latterly interested in science, he told me, ‘If you become a a Nobel prize winning biochemist, had trained Schleifer scientist don’t become like any of those other scientists and been pivotal in getting other influential scientists out there, become like Roy Vagelos.’ Roy was one of such as Eric Shooter, chair of neurobiology at Stanford my heroes from when I was 15 years old.” University, and Nobel laureates Mike Brown, Joe Goldstein Ex-Merck & Co. CEO Roy Vagelos, also the son of and Arthur Kornberg, involved in the organization. Greek immigrants, has been chair of Regeneron’s If that dinner in a Chinese restaurant was funda- board of directors since 1995. “The reason my dad told mental to the start of Regeneron, then a dinner that me that he should be my role model was because he followed, at which Schleifer tried to persuade a young was the first major academic scientist who decided immunologist working at Columbia University to join to leave academia and become head of research at him, was equally essential to the company’s progres- Merck,” continues Yancopoulos, who still has the sion. Schleifer’s advisors had told him that it was article his father cut out of the Greek newspaper that imperative to recruit a molecular biologist if his theory reported Vagelos’ career change. of applying molecular biology to neurological diseases “My dad liked Len; he could tell if somebody was a was to stand a chance of working. good person or not. We had dinner with my dad, and
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he gave the final stamp of approval. Al- is all said and done, I think we will have right, he passed the test! And that’s when changed allergic diseases and how they are I signed on the dotted line,” Yancopoulos thought of, and treated, forever.” recalls. Regeneron is now testing dupilumab in Roy Vagelos is often the “parent in the different settings such as food allergies, room” during arguments between Yanco- pollen allergies and allergies of the esoph- poulos and Schleifer, the outspoken CEO agus. “We really think that we have hit says. He has also influenced the company’s upon this fundamental driver essentially scientific direction, points out Yanco- for all allergic disease,” says Yancopoulos poulos. Vagelos was impressed with the eagerly. In the present day, people suffer technologies and science that Regeneron less from infections, and more from aller- had developed, but he advised that they gies, he adds, describing it as the “major might not lead to a breakthrough in neuro- scourge and epidemic of modern society.” degenerative diseases for 20 years, so why Dupixent’s FDA approval for patients not also use the approaches the company with an eosinophilic phenotype or with had devised in something more “tractable”? oral corticosteroid-dependent asthma gives it a broader label than AstraZeneca THE LONG HAUL AND THE PLC’s Fasenra (benralizumab), GlaxoS- BLEEDING EDGE mithKline PLC’s Nucala (mepolizumab) partnering. It has made major partnerships With this advice ringing in his ears, Yanco- and Teva Pharmaceutical Industries with leading companies in selected spaces, poulos revisited a project he had worked Ltd.’s Cinqair (reslizumab), which all tar- where they will be taking the lead, he says. on as a graduate student: he had corrobo- get IL-5. The biologic is forecast to launch Making a deal with a company to get “a bit rated with the scientist who discovered in Japan and the five major EU markets in of their action” and acquire a capability the target, the interleukin-4 receptor, in early 2019. Datamonitor Healthcare fore- is not the Regeneron way, both men say. 1982 for what became dupilumab. “Which casts that it will earn $1.8 billion in sales In August, Regeneron made a $100 mil- is really remarkable,” Yancopoulos ex- by 2026, just in the asthma market. lion equity investment in bluebird bio Inc. claims, “and shows how long it takes and It is not just Regeneron’s entry into the to collaborate on the discovery of antibod- how much effort it takes, and we are just allergy market that has the company’s ies and T-cell receptors, with the hope of scratching the surface; dupilumab is the leaders animated. Its first immuno-oncol- building out in immuno-oncology and realization of a long science-driven quest.” ogy (IO) product, the PD-1 inhibitor Libtayo overcoming some of the early cell-therapy Schleifer concurs. “We are in this busi- (cemiplimab), was approved by the FDA in challenges. Referring to this deal, Yanco- ness for the long haul, to truly make a September for cutaneous squamous cell poulos says he believes that with this type difference in people’s lives.” Keeping the carcinoma (CSCC). It is now in trials for of “synergistic” approach, the companies “bleeding edge” is vital to the success lung and cervical cancers. Yancopoulos could “dominate that space.” of the science, they say. The pair cite an says this is “just the beginning” of the example that happened just hours before company’s entry and contribution to the ANYTHING IS POSSIBLE they spoke to In Vivo. While they were dis- IO space. “We have whole classes of im- It is clear when speaking to the two men cussing company business in Len’s office, mune-therapy agents that we don’t think who have been behind Regeneron’s sci- a scientist knocked on the door and waved anybody else has; we couldn’t be more entific strategy that the close bond they some early-stage scientific results under excited about that,” he asserts. share goes beyond the business. They their noses. “If we don’t stop that meeting Libtayo and Dupixent, both invented talk over each other, argue and interrupt talking about earnings, and start excitedly by Regeneron using its proprietary Veloc- each other repeatedly. They admit that talking with the scientist about the latest, Immune technology, were developed in they don’t feel any differently or see each greatest scientific result, we’d know we’ve alliance with Sanofi. The French major other any differently than they did three changed and we’ve lost our edge,” says signed a $100 million monoclonal antibody decades ago when they had no resources, Yancopoulos. “If we lose that, then it might partnership in 2007, which wound down in money or credibility. They still have the be time to move on and do something else.” 2017, and signed a $2 billion IO partnership same passion, energy and motivation that With a new FDA approval for Dupixent in 2015. Eylea (aflibercept), Regeneron’s “anything is possible,” Yancopoulos says. (dupilumab), co-developed with Sanofi, anti-VEGF therapy for wet age-related And that feeling extends throughout the in moderate-to-severe asthma, encourag- macular degeneration, was developed in organization. “The people who thrive here ing Phase III study results of the drug in partnership with Bayer AG. are the people who both built the company rhinosinusitis and a standing approval for “We have been the leaders in the sci- and the people who continue to grow and atopic dermatitis, Regeneron is grabbing ence of genome editing over the last 20 become leaders here,” Yancopoulos ex- the allergy market by the scruff of the neck. or 30 years; we have just chosen not to plains. “They all buy into that same sort “We are in the midst of it,” Schleifer tells go ourselves into the clinic with those ap- of mentality; we are all constantly pushing In Vivo. “We can’t quite calculate it because proaches,” explains Yancopoulos, when and looking for the bleeding edge and tak- you see it disease by disease. But when it describing the company’s approach to ing it to the next level.”
December 2018 | In Vivo | 43 LEADERSHIP
Lessons From A Life Sciences Lifetime: An Interview With
LUCIE ELLIS Sir John Bell MANAGING EDITOR, PHARMA, EUROPE Professor Sir John Bell talks to In Vivo about how the life sciences sector has evolved during his career, lessons he has learned along the way, and the biggest challenges and changes ahead for the industry in 2019.
With a career that has spanned decades and crossed the barriers of academia and industry, Professor Sir John Bell is well-placed to discuss the current state of the biopharma industry and share his concerns about the future of the sector in light of current geo- political events. A Canadian immunologist and geneticist, Sir John currently holds the Regius Chair of Medicine at the University of Oxford. He was named the winner of PROFESSOR the Lifetime Achievement Award (sponsored by ICON) SIR JOHN BELL during the 2019 Scrip Awards event, held in London on Nov. 28, 2018. During the event, Sir John sat down with to the UK. “I brought back with me a lot of insight as In Vivo and shared the story of his biopharma journey to how you might do biotech in the UK, and nobody and talked about events that set him in motion for a had really done it yet here,” he said. long and successful career in the life sciences. At the time, there was almost no infrastructure to build Sir John came to the UK in 1975 on a Rhodes scholar- a biotech business in the UK, he recalled. “I paired up ship; he completed medical training in the UK, doing with a graduate student called Garth Cooper and set him a post-graduate training in London, before moving to up with some San Diego venture capitalists and they the US, to Stanford in California, in the early 1980s. set up a company called Amylin Pharmaceuticals Inc., He spent most of the ‘80s in Stanford researching in which ultimately was sold, to Bristol-Myers Squibb Co. the areas of molecular biology and genetics, and then Amylin was sold in 2012, but it had a great run,” he said. returned to Oxford, UK, in 1988. However, from this experience Sir John said he could Sir John believes his move to the west coast/Cali- see that the UK was not ready to grow biotech busi- fornia was serendipitous with a boom in understand- nesses. “We had to put it in San Diego because there was ing and developments in genetic research. “I went nothing here. So, that was a bust, but it was an inter- to Stanford just as the molecular biology revolution esting process and we learned a lot about what to do.” grew,” he told In Vivo. “People were cloning genes for Over the course of the 1990s, Sir John had a hand in the first time; they were sequencing for the first time. creating several other biotech companies, some born We had just moved from Maxam-Gilbert sequencing to from his labs and others from elsewhere. “It was really Sanger sequencing in the lab. There were a whole host the beginning of the Oxford biotech cluster,” he noted. of immunological molecules that we knew a bit about, In 1992, the Wellcome Trust cashed in its owner- but we didn’t know a lot about, so I was involved in ship of the Wellcome Drug Company and became the cloning and classifying those.” He added that at that world’s largest medical church charity. “I founded time, in his role at Stanford, he was very involved in the Wellcome Trust unit for genetic research and we how variants in those genes produced susceptibility started to build a campus of new biotech in Oxford,” to auto-immune diseases. Sir John recalled. “People had, for the first time, seri- Also happening in California at that time was an ous amounts of money. So, there was a real flowering explosion of small biotech start-ups in the Valley. The around research over that period. It was a really excit- likes of Genentech Inc. and DNAX Research Institute ing time.” Through the decade, Sir John became the arrived in San Francisco and Palo Alto at that time. “I founding director of three biotech companies: Oxagen, saw a lot of that mad venture capital then,” he said, Avidex, and Powderject. “companies got out of hand with what was going on.” “Then, as we passed the millennium, the financial The ‘90s were approaching when Sir John returned environment got a bit bumpy,” he said. “There was a
44 | In Vivo | December 2018 LEADERSHIP
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crash in 2002 and another one in 2008. It to support people who have diseases. Now ahead is that the political environment in was quite a hard time for biotech but there people make money along the way, there’s the UK will become unworkable because was quite a bit of momentum in the space.” no question about it, but on the whole, of Brexit and things like change of govern- Around this time, Sir John was asked to people have good motives for being here.” ment, inability of the government to make join the board of the Swiss big pharma Another misunderstanding he would progress on anything if they don’t carry Roche, which he said gave him useful like to weigh in on is the idea that you the House in any way. Those are serious insight into how the larger pharma com- cannot successfully do biotech anywhere problems,” Sir John said. At some levels, panies worked. “I’ve been on the board other than in the US. “There is a thriving he said these issues would slow the ad- ever since then. That’s given me quite a cluster in the south east of England at the vancement of the UK life sciences sector. lot of exposure to how big pharmaceutical moment. It’s not as big as Boston, it’s not However, he believes the industry could companies operate and it’s been a very as big as Silicon Valley, but it’s close, and make a lot of progress alone. “Do they need interesting and gratifying experience.” I think with the right sort of capital flows, government? It’s an interesting question. In 2009 he was knighted for services to it could grow further and be sustainable.” I’m not sure they do,” he mused. medicine, and in 2015 he was appointed Another main concern for Sir John when Knight Grand Cross of the Order of the Brit- UK LIFE SCIENCES STRATEGY considering the UK’s health care industry ish Empire (GBE) in the New Year Honours Despite his optimism for the UK’s biotech is the future of the National Health Service. of that year for services to medicine, medi- cluster and future of the sector in Britain, “It’s hard to change the NHS and the body cal research and the life sciences industry. Sir John is not without his concerns, given is becoming increasingly unsustainable in the current political disruptions. its current form. I hope something is done MYTHS, LESSONS AND In the last 10 years, starting with Gordon that allows the NHS to pivot and change MISCONCEPTIONS Brown, then with David Cameron and now direction but at the moment, I don’t see it.” One message, learned from his time in the Theresa May, Sir John has been advising industry, that Sir John says still rings true the UK government on how to make the UK BRIGHTER HORIZONS today is how difficult it is to break new a better place for the life sciences industry. Despite political upheaval and concerns technologies. In 2017, he authored the UK Life Sciences around infrastructure for the UK’s health “Innovation is very, very hard in big Industrial Strategy, which is currently be- care system, Sir John said there are areas organizations and it’s increasingly hard in ing implemented. where the country can differentiate itself academic environments. This is partly con- So far, two Life Science Sector Deals and take on a leadership position for re- strained by the peer review system which have been announced, the most recent search and innovative drug development. tends to dampen down really exciting in December 2018. This second deal One key space where the UK life sciences science and get it back to what everybody detailed both public and private sector can take a strong foothold is in the use of would agree is safe,” he said. “I think investments, including a £1 billion ($1.27 digital technologies. “Biopharma as an that’s one of the most important messages: billion) investment in UK R&D by Belgian- industry needs to take advantage of the the reason most of the really exciting headquartered pharma company, UCB. digital capabilities in the UK because it science is going on in small companies Highlights from the most recent sector is a real differentiator. Instead of fighting is because they don’t have to access the deal also include: a £75 million program with the system, industry needs to go with public funding system and they don’t have to develop new diagnostic tests by using the system because I think there are lots of to operate in big, clunky environments.” artificial intelligence to study a group of 5 opportunities here that could make a huge In parallel, he said innovation takes million healthy people; a world-first com- difference to their profit and loss, if they time, even in this millennium. “If you want mitment to sequence one million whole used it properly,” he said. to make a new drug, with really innovative genomes; a £50 million investment for He elaborated: “The biggest opportu- technology, it takes 15 years. I don’t think digital pathology programs; and £37.5 mil- nity is that there is a huge amount of very there’s an alignment of capital flows or in- lion in funding for a network of regional high-quality patient data, some of which tent in the UK to make that successful at the Digital Innovation Hubs. is structured, all of which is coded, and moment, and that’s one of the things we’re “There’s a lot of stuff to be formed most of which is either available or soon trying to change,” he said. Sir John noted as around big, exciting infrastructure proj- will be available for people to use in some examples that Oxford Nanopore Technolo- ects and I think they’re going to be quite anonymized fashion.” Because of this po- gies Ltd. and Adaptimmune Therapeutics powerful,” Sir John said about the second tential with digital technology and data, PLC have been active in the UK biotech sec- sector deal. it could be possible to reduce the cost of tor for 15 years now and are seeing success. The first UK sector deal was announced the average clinical trial by 80% or 90%, He added that there was a myth, pro- in December 2017. It brought together com- Sir John claimed. “As soon as you do that, mulgated in the public sector, that most mitments and investments from 25 global the industry is now suddenly sustainable people are in the life sciences commercial organizations from across the life sciences in the way that it wasn’t before. There are space only to make money. “I think that’s sector, including major funding injections very few places in the world you can do a profound misconception about the in- by Merck & Co. Inc. (MSD outside of the that, but the UK is one of them.” dustry. Most scientists who work in this US) and GlaxoSmithKline PLC. IV124173 industry are interested in developments “My biggest concern for the months
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December 2018 | In Vivo | 47 MEDTECH
Israel’s Medtech Market Evolution: Seeking The Next Big Thing Medtronic’s multi-billion-dollar acquisition of Mazor Robotics in 2018 marked a record-breaking CATHERINE milestone for Israel’s life sciences industry as the largest amount ever paid for an Israeli company LONGWORTH in the medical sector, beating Mitsubishi Tanabe Pharma’s $1.1 billion acquisition of Neuroderm in REPORTER, MEDTECH, EUROPE 2017. In Vivo investigates how aMoon II, a new VC fund, aims to produce the industry’s next big giant.
Following a $1.65 billion mammoth acquisition by Faced with capital limitations and few life sciences Medtronic PLC, Mazor Robotics Ltd. now tops the funds active in the market, Israeli start-ups usually find list as Israel’s most richly valued company in the themselves having to compete for the same cash, which medical sector. The blockbuster deal, which should in turn restricts their growth. help Medtronic carve out a competitive position in However, the region is determined to create the health spine surgery robotics, was welcomed in Israel as care giants of tomorrow. Earlier this year, the Israeli gov- proof of the country’s growing leadership in health ernment announced a digital health initiative focused care innovation. on turning the sector into a major economic growth Caesarea-based Mazor Robotics first attracted the engine for the country and placing Israel at the forefront attention of Medtronic in 2016 when the companies of medtech innovation. Hoping to drive the growth of forged an agreement to make Medtronic the exclusive Israel’s health care innovation is new venture capital global distributor of the Mazor X spine surgery system. fund aMoon II, which is focusing on mid- to late-stage The device giant also secured an 11% stake in the Israeli companies. Marius Nacht, the billionaire co-founder of robotics maker. A full takeover was completed in Sept. Checkpoint – Israel’s cybersecurity multinational – first 2018 with Medtronic paying $1.34 billion to acquire the set up aMoon as a life sciences venture capital fund for in- remainder of Mazor, its biggest spend since 2014 when vestment in early-stage, innovative health technologies. it agreed to buy Covidien Ltd. for $42.9 billion. (Also see Seeing how Israel’s cybersecurity industry had expe- “Medtronic Buys Mazor Robotics For $1.3Bn” - Medtech rienced huge success globally, Nacht and co-founder Insight, 21 Sep, 2018.) Yair Schindel developed a strategy to replicate that The billion-dollar buy marked a record-breaking mile- success in the health care industry. Schindel, who now stone not only for Israel’s medical device industry but acts as the fund’s managing partner, told In Vivo aMoon for its health care sector overall. Although the country II is aiming to address the problem of capital availability has developed a reputation as a center for innovation in Israel and build the next generation of health care and the “Start-Up Nation,” health care companies have heavyweights. “One of the problems for the biomed in- often struggled to evolve into high value companies. dustry in Israel, for a long time, was that people used to
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sell really early and often just because they nity to take a company public and keep it year. Schindel believes the company has didn’t have a big enough check to take it to independent that’s good in our eyes too. huge potential in the market. the next level,” he said during an interview Both solutions are good for the economy.” “CartiHeal received offers to be acquired at the MIXiii Biomed conference, held in The investment strategy of aMoon II fo- earlier, but we said we could create more Tel Aviv, May 2018. cuses on three major things, which Schindel value if we actually took the technology aMoon is not the only VC player in Israel’s described as “the big killers.” The group is and did a big PMA and demonstrated the life science sector: other VC firms dedi- focused on investing in technologies in can- efficacy. We know the technology works cated to the space include OrbiMed Israel cer, cardiovascular disease and influenza. as they have some long-term results from Partners, Pontifax Venture Capital, Arkin “We are also focused on the biggest cost a large group. If the interim analysis is Holdings and Israel Biotech Fund. However, drivers,” Schindel noted, “so the things that successful, they’ll be worth a lot,” he said. access to cash is more limited than it is in other countries, such as the US and Europe, If we can show a company’s technology really where life sciences VCs are a dime a dozen in comparison. But aMoon has big plans to works then investors will pay a lot more to grow larger life science firms within Israel. The current situation in Israel sees com- acquire it. panies get to the mid- to late-stage level, where they need $10 million to $20 million maybe don’t kill patients, or Zebra Medical, a medical imaging start- to run their premarket approval (PMA) kill them very slowly, but kill health care up that uses machine and deep learning study, or do a Phase III clinical trial, or systems. For example, diabetes, neurode- to build tools for radiologists, has secured drive commercialization for their digital generative diseases, Parkinson’s disease, or $30 million from aMoon II and other in- health solutions. Often they are unable to orthopedic problems like osteoarthritis, im- vestors to develop and launch AI-based find any players in Israel who can write munology conditions and back problems.” tools for radiology. The company already these checks, so they cannot progress, In June, the fund secured a $250 million holds CE marking for seven of its products Schindel explained. These companies investment from Credit Suisse, the Swiss across various medical conditions includ- then sell earlier in the development stage, bank’s largest ever investment in an Israeli ing bones, cardiovascular disease, liver for a value which is significantly lower. fund. “Credit Suisse did deep research into and lung indications, and breast cancer. This is where aMoon II is trying to bring super trends and they selected a few areas It has also received FDA clearance for an in a solution. “We’re able to fund them where they think innovation is going, and algorithm that helps physicians quantify a through the late stage and many of the as a bank and group of investors we want patient’s coronary artery calcification. The strategic companies prefer it that way – to take a stand. Health tech and digital approval could launch the Israeli company they don’t want to bear the risk,” he said. health was one of the major super trends onto the lucrative US market. Schindel, who trained as a medical doctor they defined.” before serving in senior positions in Israel’s Credit Suisse raised their own fund for GOVERNMENT SUPPORT Defense Forces, was formerly the CEO of digital health and another for robotics and The Israeli government also continues to Israel’s National Digital Bureau, responsible then joined up with aMoon. The invest- play an important role in encouraging re- for digitizing governmental services and ment from Credit Suisse helped aMoon II search and development in the life sciences stimulating economic growth. It was here reach its fundraising target and surpass but according to Schindel, a key factor that that he got the idea for 8400, a non-profit OrbiMed, Israel’s leading life science will lead to Israel’s success is the strong organization aimed at promoting medical investment fund. The target of aMoon II interdisciplinary connections among its industry company leaders into ecosystem is to be a half a billion-dollar fund with a people. Cross-sector coalitions such as 8400 leaders. The plan is to create a cross-sector cap of $750 million. “We don’t want to go will promote collaboration and the exchange health network of 400 people over eight years too far too fast, we want to build a capac- of ideas, and Israeli people are familiar with (hence the name 8400) who can share knowl- ity and see good returns,” said Schindel. this style of working. Much of this stems from edge and collectively advance Israel’s mis- “We first want to prove this is successful. shared army experiences, as every Israeli sion to become a “HealthTech powerhouse.” We are a global fund but with a focus first goes through a two- or three-year mandatory and foremost in Israel.” military service where they form networks INVESTOR STRATEGY and learn skills that provide benefit for According to Schindel, investors favour com- BIG POTENTIAL entrepreneurial endeavors. panies that show the “three L’s – late stage, Schindel highlighted two portfolio compa- “Israelis collaborate to innovate; our low risk, large checks.” (Also see “Spotlight nies, Zebra Medical and CartiHeal, as some work is very interdisciplinary and inter- On Israel: Accessing Private Cash For Novel of the fund’s most promising opportunities. sector,” Schindel highlighted. “People in Technologies” - Scrip, 26 Apr, 2018.) CartiHeal, a wound-care company and Israel are used to working in teams and not “If we can show a company’s technology developer of an implant for the treatment just thinking about themselves. This type or solutions really work then investors will of joint surface lesions, is conducting a of culture means you can bring together pay a hell of a lot more to acquire it,” he major IDE study in the US, EU and Israel, people from different disciplines and create believes. “Obviously if there’s an opportu- aiming for an FDA PMA application next amazing health care companies.”
December 2018 | In Vivo | 49 MEDTECH
Data, Data, Everywhere, But How Much Of It Makes
ASHLEY YEO A Real Difference? EXECUTIVE EDITOR, MEDTECH, EUROPE Philips Makes A Case For The Value Approach
Having a single patient’s complete health care information all in one place was a dream that US visionaries began to talk up around a decade ago. The idea was that fast, electronic support for doctors would aid clinical decision making and efficiency. Ten years on, there is still much work to do before the dream is realized, says Philips’ Carla Kriwet. But a solution is within reach.
Doctors ostensibly have a single, clear task – easy to terms of clinical support decisions? or is it more like describe maybe, but usually anything but to deliver. searching through a telephone directory?” And the two questions they need answers to have never Health care practitioners cannot yet see the wood for changed: what is the next best thing to do for the patient the trees, according to comments expressed at a recent and what are the risks associated with that course of UK conference on the future of digital technology in action? This is what they require, yet the device tech- the National Health Service, organized by Westminster nologies and data intelligence offerings available are Health Forum (Nov. 23, London). “We need to reduce still not delivering the targeted answers they need for data flows, but improve utility,” NHS Digital’s director the patient sat before them. of data Professor Daniel Ray told the meeting, noting Carla Kriwet, CEO of Connected Care and Health Infor- that this is an aim of the forthcoming NHS Ten-Year matics for Philips Healthcare, told In Vivo that in spite of Plan. And it is vital that the benefits of data collection the volumes of data available to health care profession- are conveyed to the patient, for without the patient and als, too little of it was meaningful data. And the sheer without their trust, digital health care cannot happen. volumes of data can bring risks too: data copied from one Philips’ actions to help establish digital methods place to the next potentially carries the risk of copying within national health care systems are guided by its the same errors along the way. “Basically it means we are Quadruple Aim, which states that company projects not getting the value out if it,” she said, urging a change must deliver the right care and at the right time for the of approach if the major opportunities that the data era right person. Also, they must enhance the satisfaction are bringing are not to be missed in health care. of those delivering the care. But do doctors always get the right data at the right site at the best time? Does it NOT JUST DATA, BUT THE RIGHT DATA give the insights needed on a certain population in a “We need a smart EMR [Electronic Medical Record], which certain area? The answers are: not yet. is not just about data, but about the right data, i.e. where “A clinician might even have to put all the sources data is limited and targeted to precise and immediate together themselves, get on the phone and access needs,” she said. For instance, health care professionals pathology and genomics information in a bid to find focusing on breast cancer would have access to the data meaningful data,” said Kriwet. Are the sources com- that were limited to and relevant for that situation: and plete, is the data structured, and have interoperability they would be used in an analytical way, sourcing infor- issues been addressed? mation from people who are in same health care situation Health care has a lot of catching up to do on the and age group, and who have the same behavior patterns. best-in-class example of data-smart relevance to the “That way, we can crystallize it to that person specifically, user: the mobile phone. While a smartphone knows and make it relevant.” every detail about the user a traditional PACS medical “That was the trigger for our vision to make available image storing system just cannot compare in terms of meaningful clinical decision support that really makes utility – not recognizing the clinician/user except in the a difference,” said Kriwet, paraphrasing the biologist most generic way, flooding them with data of little or no and theorist E.O. Wilson quote, “we are drowning in relevance and generally not providing smart support. data but starving for lack of wisdom.” Maybe the big- gest hurdle is “trust” in the data and that stage has not AI INTEGRATION FOR PREDICTIVE SYSTEMS been reached yet, she said. “Do doctors trust the data? AI is not being used properly in health care delivery. Is it compiled in a way that’s actionable for them in For Philips, AI means adaptive intelligence, rather than
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artificial intelligence, and is applied in an environment where the older nurses find their job becoming too physically demanding they doctor’s skills are always needed, never redundant, and where he/ often must face leaving the profession. But the fact that they can she is supported by smart insights. The aim of AI integration is to no longer lift patients should not mean their skills should be lost. develop and use a predictive system that provides clues about what Digital capabilities mean they can remain employed and share their will or could happen, what the likely disease development is, and knowledge – often decades-long – with other nurses. This means how best to treat it. the gray intelligence is retained, and the other aims – better care, Philips’ Illumeo is an example of clinically intelligent software better outcomes, higher satisfaction generally and lower cost – are that augments the skills of clinicians and redefines how they in- all more easily met. terface with images. Designed to empower radiologists and work Data-enabled care also offers the real opportunity to fit the thera- for them, within a single workspace it provides the technology and py around the targeted outcome. “We no longer live in a world where tools that enhance their expertise and efficiency. devices with incremental functionality are automatically something IntelliVue Guardian is another example: it is designed for the to get excited about. The thinking now more often revolves around notions of ‘Can we reduce the mortality rate, incidence of infectious disease and cost, at the same time as make sure our staff retention It’s not about anecdotes, it’s issues are being addressed?’,” Kriwet commented.
about performance data and RISK SHARING MODELS She envisages a time ahead when manufacturers like Philips would securing the completeness of even bring into play certain business models where they no longer sell equipment upfront, but rather do deals where equipment is paid outcomes jointly with health for only if targeted and measured outcomes are achieved. “It’s not about anecdotes, it’s about data – performance data – and secur- systems” – Carla Kriwet, CEO ing the completeness of outcomes jointly with health systems.” Philips’ sales staff are trained not to upsell per se, but to sell into of Connected Care and Health the Quadruple Aim – majoring on the targets that providers have set for themselves – and fitting Philips’ solutions and devices into
Informatics for Philips those plans. But there is a big difference in adoption readiness of these con- general ward and based on biosensors that wirelessly [monitor vital cepts among hospitals. Advanced, networked hospitals that have signs, posture and activity,] and can detect falls automatically. It can the financial power to buy up other clinics are the ones with the predict a cardiac arrest up to eight hours before the event, which networks to make data interoperable and flow. They are driving is really valuable time in which medication or transfer to the ICU outcomes and have philosophies for executing the concept. Hospital can take place, noted Kriwet. And it is cost efficient, as it can keep groups are consolidating at a rapid rate, Kriwet observes: in the US, those who have been diagnosed early out of the ICU. The sensor- there are expectations that the current 5,500 hospitals might in 10 based approach can also make triaging more effective, providing years’ time all belong to perhaps just 20 hospital groups. The same longitudinal data rather than just spot checks, and identifying the consolidation is happening in Europe too, with Spain and the UK right solution correctly and early. leading the charge. The chest-worn Guardian patch devices, the size of two fingers, transfer data by wifi, delivering continuous measurements to TAKING A LEADERSHIP ROLE: PHILIPS’ APPROACH the Guardian system, which automatically updates the patient’s Doctors are beginning to look afresh at workflows and how to orga- EMR. They are used in general wards where the ratio of caregivers nize them around patients, not just to optimize data management, to patients can be up to 1 to 12. Single caregivers, on night shifts but for speed, and mobility of the patient. They understand that it especially, cannot always tend effectively to all patients, but a is more complex than “just” the clinical outcome, but that patient data-enabled system can predict where acute needs might arise. Up satisfaction is crucial, and companies like Philips are looking at to 70% of unexpected hospital deaths occur in the general ward, that more closely and changing their value proposition accordingly. hence Philips’ major focus on this area. Having said that, Philips is in a “unique position,” Kriwet said. Another example where Philips is leveraging telehealth and con- Alongside its hospital solutions including smart devices, systems, nected digital remote patient monitoring is a hub and spoke model software and services, it also has a major out-of-hospital business focused on the eICU or Tele-eICU. One centralized care team can in areas such as personal care, home care facilities and in nursing manage a large number of geographically dispersed ICU locations homes. “We have the whole continuum of care, from healthy living, to exchange health information electronically, in real time. to prevention, diagnosis, treatment and home care – in fact the whole care value-chain – covered. That gives us a unique oppor- CONSIDERING THE USER tunity to develop solutions in workforce, triaging,” she said. “We Digital delivery provides access to health care for many who would should be helping when hospitals are flooded with patients; and otherwise have none, and it saves health care system costs. But chronic patients should be treated at home, not risking infections crucially, it delivers expertise at the right time, and importantly can by attending hospital appointments.” better meet the job satisfaction needs of care givers. For instance, as
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MORE IMPORTANT THAN A PR INITIATIVE ON THE JOURNEY TO OUTCOMES PAYMENTS Philips has become more vocal about the fact that systems must How companies get paid for their technologies and processes in the change, and has ramped up its interview count in the general press, new outcomes-driven era is another conundrum. Kriwet assessed where it sees itself as a useful ambassador on the need for system the situation for the health care sector as “at the beginning of the change. “Our mission is to improve the lives of 3 billion people per road on that journey, and just walking, nowhere near running.” year by 2025. That’s something that we take very seriously – we Things will speed up, and “once we are on the trip, it will be ir- measure it and track it,” said Kriwet. The company has also done reversible.” Industry is still working on the shape of future reward a “deep dive” into less developed geographies, such as India, Af- systems, and is talking to the C-suite decision-makers in hospitals, rica and South-East Asia, using its Community Life Centers (CLC) providers in general, including the large IDNs [Integrated Delivery platform to improve access to care, extending health facilities into Networks], key opinion leaders who have an impact on payers, the social and economic community hubs, using innovative technolo- payers themselves and governments. gies and services. “We play on all levels,” said Kriwet, but she noted the rising Kriwet is clear about the part industry will have to play in the power of the hospital C-suite and the perceived change in their future health care model: “It can’t just be sell more ultrasound, role. And within commercial organizations, the balance has shifted sell more patient monitors, that won’t do the trick. We’re not a markedly too: just five years ago, only 15% of chief information of- charity though, and our goal is to learn what devices will meet the ficers (CIOs) reported to the CEO in the hospital, and most of them needs in these countries and how we can make the equipment as were ‘technical guys.’ Now, they are the key decision-makers. “In cheap and effective in the local environment as possible. That’s a the real world, experts are getting less important in the decision- real challenge.” making.” The C-suites are now making decisions on digital, data The changes of approach can prompt unexpected – even un- and outcomes. And fully 90% of CIOs report to the CEO. comfortable conversations – within commercial organizations. This was a positive change, said Kriwet, acknowledging that, Kriwet said her initial exchanges with Philips colleagues about although these claims are based on US findings, they show a very her sensor- based care concept led to group colleagues wondering clear trend. The US in fact remains the pace leader in transform- if Philips was cannibalizing its own patient monitoring business. ing care based on outcomes, but other countries are very open to “It’s a good, profitable business, so why come up with patches?” the concept, the Netherlands, Scandinavia, and the UK, with its was a typical early response. regional pilots, among them. “But if you are serious about outcomes, you can’t keep your device business isolated – you have to integrate it into a solution that re- KEEPING AN EYE ON THE DISRUPTORS ally hits the spot,” she said. While devices for highly-acute patients Health care disruptors do not have the patient databases that the might well need multiple functionality, many others don’t, and can traditional medtechs do, but they do have a potentially huge advan- even use the same software. “It’s a mindset thing,” Kriwet noted. tage in size and power. “We don’t underestimate them. They have a passion for health care too, and deep pockets, and we take them NEGATIVE CONNOTATIONS OF DATA OVERLOAD seriously.” Kriwet added that Philips has an understanding of the The danger of information overload for clinical teams is very real. They relationships in clinical workflows, and access to rich data – from can easily become disheartened and fatigued by the sheer volumes 275 million patient monitors collecting data every second. of data around that ostensibly should help them but do not, in their Elsewhere, Philips, like others, is monitoring the increasing tal- current form. “We really need to make it easy, flexibly save time and ent shortage, and factoring in the more demanding patient: a trend improve efficiencies,” said Kriwet, acknowledging that volumes of that must be welcomed even if it brings challenges by introducing data for data’s sake is far from “job done” in the health care sector. more complexity. Time-poor clinicians can be overburdened by new technologies In all this Philips has identified its priorities as teaming up with and data applications. Only 5%-10% of the functionality of existing large IDNs; getting scale; pursuing radical innovation and challeng- devices is used anyway, and Philips says there is a pressure to add ing the status quo more often; and using open source approaches ever more functionalities to its monitors – up to 10 start-ups contact to encourage and optimize data flows. Philips every month in the hopes of teaming up on a new algorithm Some recent M&A successes have been targeted in that area. In for its monitors. (Philips has moved its US headquarters to Cambridge, December 2017, Philips acquired Forcare, an innovator in open- MA, to be closer to where the digital expertise is accumulating.) standards-based interoperability software solutions for fast data In developed countries, specialists are not connecting data flows between medical systems and at departmental and enterprise around their patients, and that needs to change, Kriwet added. levels, and VitalHealth, a provider of cloud-based population health Some hospitals are getting down to changing their architecture, management solutions for the delivery of personalized care outside but it is not the standard approach. Reimbursement is not really the hospital. Kriwet said, “We are always looking for systems inte- being tailored to support the outcomes-based environment – even gration capabilities, partnerships in health economics and solutions in Germany, Kriwet’s birth country, the 18-year-old DRGs system partners. Nobody can win this game alone, we jointly have to build supports processes, not outcomes. an effective ecosystem for better care at lower costs.” IV124169
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CREATING AN INTEGRATED OUTSOURCING WORLD: Piramal CEO Talks Quality, Capability And Cost
From global big pharma with established brands, to biotechs with they look for a more personal relation- rapidly expanding pipelines, life sciences companies all have ship with the CDMO: they want to be similar challenges – optimizing their costs, consolidating their comfortable that the CDMO will give VIVEK SHARMA suppliers, and speeding their products to market. In expectation of their “single product” the same level of CEO, PHARMA achieving these goals, firms that have never outsourced their prod- attention that a CDMO may give a large SOLUTIONS, ucts are now doing so, and many are collaborating with contract pharma. At Piramal, we have worked PIRAMAL ENTERPRISES development and manufacturing organizations such as Piramal diligently at building our relationships Pharma Solutions. CEO Vivek Sharma believes this is a positive with biotechs, and are pleased that over the past 24 months, we are and growing trend, despite the suggestion from some who say the the “partner of choice” for over 100 of these young companies. industry is pulling back, and he provides company data to back it up. With around 50 integrated programs that include drug substance Your services extend all the way from discovery to launch. Are and drug product, a track record for high quality, and worldwide you seeing a particularly strong growth trend in one part of capabilities, Piramal is planning for the future: investing capital at those, say manufacturing or discovery? every single plant, expanding capabilities, and talking acquisitions. While the discovery business is smaller in size, it is the busi- ness area where we on-board a number of new customers. This What would you say is the current growth trend for the con- capability allows us to build relationships early and then transi- tract development and manufacturing market? tion these into development. We have a strong pipeline across all At the macro level we are excited with the market trends. If we clinical phases with over 150 molecules in clinical development for look at the business drivers for Contract Development and Manu- partners, including over 30 in Phase III. We also expect to launch facturing Organizations (CDMOs) from a customer perspective 10 New Chemical Entities (NCEs) for our customers this year. From – every company with whom we interact has similar challenges a therapeutic area perspective, our fastest growth is in the area of – they are all trying to optimize their costs, and get their products oncology, where several of our customers are invested, and also out to the market faster. From a large pharma perspective, we see because we have some unique offerings to address this disease area. consolidation of their supplier base, and internal restructuring leading to less resources to manage more programs. This has Would you say that general outsourcing is just as strong as it has led to preferred partnerships between big pharma companies been in recent years? As you are aware, there have been ques- and CDMOs that can meet their global needs. In parallel, with tions about issues such as data integrity and there is a sugges- biotechs, their funding is growing, and that capital is invested on tion that perhaps the industry is pulling back a bit from using innovation, and on discovering new medicines. Post discovery, outsourcing companies, other than within the US and Europe. these biotech firms are also increasingly looking toward CDMOs to If we have seen any trend, it is to the contrary. Our growth numbers support their clinical development and commercial requirements. – on both topline and EBITDA – are higher than the industry average. To summarize, the health of the industry is excellent, and we expect If I project forward, we have a fertile late-development pipeline (30+ CDMOs to benefit from the partnership approach of our customers. Phase IIIs plus 10 potential launches this FY) – hence we are invest- ing capital and expanding almost all our 12 sites located across the How much are you involved in biotech at present? The prod- globe. There are several factors that have propelled our growth, some uct portfolio across the industry is shifting very heavily in of which are market driven, and some of which are Piramal specific. that direction. For example, our track record when it comes to customers has been A significant proportion of our growth is coming from young bio- excellent. Our quality record is impeccable; it’s probably one of the tech companies that are nimble and working on developing cutting- best you will find within the industry. Of the five regulatory inspec- edge medicines. These firms are doing well, armed with significant tions we had last year, four had no observations. So in general, all capital, and have strong pipelines. Biotechs are different, in that of our sites are growing, irrespective of their location, as they have
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all delivered on customer satisfaction, and on quality. API, forward integrate by manufacturing the drug product and also As far as your question on Asia, Piramal is global; we are the manage their clinical trial supply. Again, the reason they chose us only CDMO in the world that has roughly half its sites in the East was our track record, and our commitment to meet their future needs. and half its sites in the West. As long as our customers seek ex- Internally, we have optimized our systems, modified our struc- ternal partners and outsourcing we are agnostic about where they ture, hired the right talent, and added technology, to ensure that our outsource to. We want to be local for the firm that is launching customers have a seamless experience on any integrated program. the drug – that’s the whole ethos behind our company. The East-West nexus that we discussed earlier also plays a key role on integrated solutions. For example, when a customer It’s interesting you mention integrated cancer development. comes to us for integrating the API and drug product, we may, in What are the particular challenges that you face in the cancer consultation with the customer, do the first five or six steps of the segment? API out of India and then finish the regulated steps out of North We view integrated cancer solution development as an opportu- America. This offers our customers the benefit of an internally nity. One in four compounds that are in development are in cancer, controlled supply chain and also real cost benefits. On the drug and we are one of the few companies to have a fully integrated oncol- product side, based on customer interest, one can do the initial ogy platform. We have over 65 oncology programs that are ongoing – development out of our facility in India, while carrying out the from early development through commercial launch. manufacturing out of one of our sites in the West. Within the Piramal Pharma network, we have one of the most highly The other reason that firms come to integrate with one company reputed high-potency API sites in the world, at Michigan, in the US. is that it aligns drug substance availability to drug product capac- We are now expanding the high-potency API capability to our Toronto ity. If you are working with two different suppliers, and your API (Canada) site, providing customers with additional flexibility and is delayed, you may miss your drug product manufacturing slot capacity. I should also point out, that for several multibillion-dollar leading to further challenges. If you are working with one partner, commercial medicines, we are the sole supplier of the API – a testament for example Piramal, we would adjust for any delay on the API, to the trust that our customers place in us. Our customers working and adjust our drug product manufacturing schedule accordingly with us on oncology API development are keen on leveraging the fin- to minimize time overruns. This helps immensely when customers ish capabilities in Kentucky, and now have an integrated solution that have patients awaiting the drug following clinical enrollment. includes both API and drug product. For customers interested in de- veloping Antibody Drug Conjugates (ADCs) for cancer, our conjugation What other unique capabilities do you have to offer your clients? facility in the UK, and the fill finish in Lexington, KY, offers end-to-end From a science perspective, we are one of the world leaders solutions. By the end of the year, we expect to augment this offering, by in ADC solutions. We have injectables manufacturing in North manufacturing the payload and the linker for ADCs from our facility in America, an area that is growing rapidly. We have high potency. Michigan. Finally, we are looking to add oral oncology and pre-filled We have a global footprint. We have a unique collection of offer- syringe capabilities to meet our customer needs. ings and sites, which work together as one unit, allowing us to address the needs of a variety of customers. Offering integrated services, presumably that lends itself to The integrated offering, and our track record of success, is a distinct more strategic partnerships with your clients. What do you differentiator. We begin at the contract stage, with integrated docu- see as the trend now in relation to pharmaceutical industry mentation and legal paperwork to minimize time, and then forward consolidation? Is that driving more strategic alliances, and integrate that with a seamless solution that includes systems, capabili- what’s your advantage in that respect? What’s the advantage ties, people and technology. You save time. You save costs. for your clients? Finally, our biggest differentiator is our customer centricity initia- Let’s talk from a large pharma perspective. It enables large tive. We see ourselves as a service industry, only that in our industry, pharma companies to achieve the objective of consolidating we offer science-based solutions to develop innovative medicines. suppliers, and managing programs better. It shortens project We exist to understand our customer needs and how we can help timelines and reduces costs. The key for success though is to their customers, who are the patients they are trying to serve. ensure that all the individual offerings be world-class. Customers will not give the business to you just because you are integrated, Over the next five years, what are your plans, in terms of new if one of the supply verticals is not up to par. capabilities and what you think the market is going to be do- We currently have 50 active integrated programs and we are ing over that period? seeing the interest continue to grow. Let me give you a few We are excited about what we have achieved over the last examples. Piramal is the preferred, integrated R&D partner for three or four years due to our focus on the customer. We have one of the largest pharma companies in the world, based out significantly extended our capacities and offerings to serve our of Europe; we are the only company they will work with in this customers better. We expect to continue to add capital to meet fashion. Why are they doing it? Because we have been able to our customers’ future needs. These investments could be organic, demonstrate that we can develop the products faster, and more or could involve acquisitive growth. Internal capital is being put efficiently, saving them both time and effort. into every single plant that we have, as we model our customer As for biotechs, one good example is a small Boston-based partner late-stage pipeline, and ensure that their commercial needs are that is carrying out all components of its supply chain for its flagship met. Acquisitive capital may be used to add more unique capa- product – that is launching next year – at Piramal. We supply their bilities that will allow us to serve additional customers.
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Where Angels Fear To Tread: Lessening The Perils Of CRISPR-Based Therapies ALEXANDRA CRISPR is in the headlines once again, but for all the wrong reasons. While germline gene editing SHIMMINGS remains taboo in legitimate research, it is a reminder that there is much to be learned in ensuring EXECUTIVE EDITOR, PHARMA, EUROPE the safety of the technique in general. AstraZeneca has developed a new method which it believes will help avoid off-target effects, an executive explains to In Vivo.
Scientists at AstraZeneca PLC believe ticals took the first industry-sponsored they have developed a way to reduce CRISPR-based therapeutic into the clinic the risk of CRISPR cas9 gene editing in August. However, this milestone came products causing unwanted genetic amid new warnings from researchers at mutations in patients – one of the the Sanger Institute that the risk of un- biggest fears hanging over the technol- wanted mutations with CRISPR editing ogy’s use in producing a new genera- was far greater than had been thought. tion of therapeutic products. STEPHEN REES These developments make AstraZen- In Vivo spoke to AstraZeneca vice ASTRAZENECA’S eca’s new safety testing method – details president of discovery biology, Stephen VICE PRESIDENT OF of which were published in Nature in Sep- DISCOVERY BIOLOGY Rees, about the potential of the new tember – particularly timely. “Demonstrat- system, dubbed “VIVO,” to give an ex- ing that you only see specific editing at the tra level of confidence in CRISPR’s safety as a possible site you are interested in and that you don’t see other therapeutic, and about the enormous impact CRISPR genetic rearrangements is a major issue,” Rees told technology has already had on drug development in In Vivo. This is one of the highest barriers, along with the six years since it burst into public consciousness. improving its efficacy, that need overcoming before pa- CRISPR Cas9 editing is now well entrenched as a tients can be prescribed a CRISPR therapeutic, he said. scientific research tool, but the end game is to use the In the meantime, CRISPR has already revolutionized technology to create genome-editing treatments for a drug discovery. The specificity of the genetic editing that wide range of indications, from inherited diseases to can be achieved with CRISPR Cas9 is leagues ahead HIV. Pharma has already taken its first steps here: trail- of older, and now largely superseded, gene editing blazers CRISPR Therapeutics and Vertex Pharmaceu- technologies such as TALENs and zinc finger nucleases.
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“Just six years ago there wasn’t a single right place to make the cut. The cell then RNAs targeted to the mouse Pcsk9 gene, in- scientist in AstraZeneca, or indeed any recognizes the DNA damage and starts to cluding promiscuous (those able to target other company I imagine, using CRISPR. repair it, but mending a double-stranded many sites) and more specific guide RNAs. Today I wouldn’t be surprised if there are break is an error-prone process and these They showed that VIVO could not only over 100 scientists who are either using it errors ruin the gene’s protein-coding ca- detect the dozens of off-target mutations in- directly or are using reagents that are gener- pacity, knocking it out. duced by the promiscuous gRNA, including ated with it,” Rees said. For all its potential, CRISPR is not with- mutations that occurred with frequencies Following the publication of the first out its issues, and chief among these is as low as 0.13%, but also that appropriately CRISPR papers in 2012, AstraZeneca was the potential for off-target effects brought designed gRNAs did not show any detect- quick off the mark to exploit the potential of to the fore by the Sanger Institute paper able off-target mutations in vivo. the revolutionary technology, forming col- published in Nature Biotechnology in July. As with all novel therapeutics, the laborations with leaders in the field, includ- The off-target effects happen when the onus will be on sponsors to prove their ing CRISPR co-discoverer Jennifer Doudna. CRISPR Cas9 goes a little scissor happy, CRISPR-based therapies are safe as well “We started very early on,” Rees said. snipping the DNA not just where its cre- as effective and the authors suggest they It signed deals back in early 2015 with ators intended, but elsewhere in the ge- have set an important new standard for the UK’s Wellcome Trust Sanger Institute, nome too. The Sanger Institute researchers defining the off-target effects of genome the Innovative Genomics Initiative (IGI) in said this unanticipated damage “could editing in practice. California and the Broad Institute/White- lead to dangerous changes in some cells.” “It is confirming the predictions from head Institute in Cambridge, Massachu- The secret to successful CRISRP Cas9 the in vitro methods like CIRCLE-seq and setts. (Also see “ AstraZeneca deals take editing therefore lies largely in the guide demonstrating that this is replicated in CRISPR to its drug discovery heart “ - Scrip, RNA. This pre-designed short stretch of vivo. We do see this as being the key next 29 Jan, 2015.) The IGI collaboration was RNA (about 20 bases at most) placed within step because of course not only does recently extended for a further three years. a larger RNA scaffold in the CRISPR product it demonstrate that we are not seeing Now, AstraZeneca has one of the most has a base sequence complementary to the off-target effects in vivo, it’s also key for advanced groups developing CRISPR target DNA. Problems occur if this guide efficacy because it demonstrates that we methodologies in the industry, Rees RNA sequence is not specific enough, and are seeing the appropriate on-target cut asserted. “We’ve established a team of here the wiggle room scientists have to as well,” Rees explained. about 20 scientists at our Gothenburg maximize its specificity is reduced both There are other variables that need site, largely supported by post-docs and by the length constraints of the guide RNA consideration, he cautioned, namely the enabled through academic collaborations (physically it needs to fit into the scaffold) level of exposure of the cell to Cas9. “Like with leaders in the field.” Indeed, the Na- and by restrictions to the parts of the gene any enzyme, the more Cas9 you put in the ture paper was co-authored with CRIPSR it can target (for many genes only cutting cell, the more editing that you will see pioneer and Editas founder Keith Joung. in certain places will do). both on target and off target, so as well as CRISPR’s appeal for AstraZeneca is Over the years a number of techniques controlling the quality of the guide RNA it three-fold: “We are extremely interested have been developed to help scientists de- is also very important to control the level in the use of CRISPR to deliver better sign their guide RNAs to target a particular and duration of expression of Cas9 to get cell-based and animal-based models of site found rarely in the genome to help the balance right between on-target editing disease, and over the years we’ve created ensure a specificity of the DNA cut, and and off-target editing.” about 200 different cell lines using CRISPR there are methods, such as CIRCLE-seq, This parallels traditional drug develop- that have precise genetic changes that that can measure the number of cut sites ment where you have to get the balance better help us mimic disease in a dish,” seen in the DNA in the test tube. But what right between the dose needed to inhibit he said. “Alongside that, we use CRISPR the AstraZeneca researchers wanted to do the target and the dose that causes side libraries that allow us to delete genes in was add an extra level of safety in vivo. “We effects, he said, but there is one major the cell on a well-by-well basis, so in the were very interested in trying to take that variance: “One of the biggest advantages same way that we can screen compounds, a stage further and ask the question: can of a small molecule is that you can always we can screen genes to see what the effects we generate a method that would convince take it away if it does something that does are of deleting a gene on a cell, and, of ourselves in animal models that the guide you damage. But with CRISPR, once the course, the further interest is the potential RNAs that we are developing only act to DNA’s edited, that’s a permanent change.” for CRISPR as a medicine in itself.” cut the DNA at the target gene we are in- It is because of the safety worries that the terested in?” This led to the VIVO method types of CRISPR-based products that have CRISPR PROS AND CONS outlined in the Nature paper. reached the clinic first are the less risky cell- CRISPR Cas 9 exploits a natural defense VIVO involves first identifying poten- based therapies where cells are taken from mechanism used by bacteria against viral tial off-target sites, and then confirming the patient, edited ex vivo and only then re- infection to introduce a mutation into the whether any such sites have been altered implanted in the patients once researchers DNA at a precise point. It has two main after genome editing has occurred. The are confident that the correct change has components, the Cas9 nuclease to cut the authors tested the system’s precision in been made. CRISPR Therapeutics/Vertex’s DNA and a guide RNA to direct it to the mouse livers by designing different guide CTX001 for beta-thalassemia is the first
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such product from industry and entered Another future hope is to be able to use inducible and temporal control of gene its first-in-man studies during the summer. CRISPR to upregulate or downregulate expression in any tissue. We are able to Fellow CRISPR biotech company Editas the expression of genes. “Both methods take CRISPRs that will delete or modify filed an IND in October for a Phase I trial exist today,” Rees said. “They are get- different genes, dose those to the lungs of EDIT-101 a CRISPR-based therapy for ting better every year and it is possible to of animals and within four weeks we see the treatment of the ocular disease Leber imagine in two or three years’ time from tumors arising that are reflective of the congenital amaurosis type 10. (Also see a research perspective we don’t simply genetic changes that we’ve introduced. “Editas’ EDIT-101 Set To Be First In Vivo delete or change genes we can use CRISPR That allows us to create a model in four CRISPR Gene-Editing Therapy In Clinic” to increase the expression or decrease the weeks and test the efficacy of our model in - Scrip, 13 Nov, 2018.) This will take the expression of genes and maybe at some the second month – work that three years technology a step further by using in vivo point in the future you can do the same ago would have taken us 18 months to two delivery of the CRISPR agent, albeit in a from a therapeutic perspective.” years, we can now do in three months.” very localized way in the eye. But Rees admitted the company was Similarly, he added, they can now create Moving to less localized in vivo CRISPR still a number of years away from enter- 10 different subtle models of lung cancer delivery and editing will require still ing the clinic with a CRISPR medicine. It through manipulating different genes with further advances. “In terms of the vision is lagging not just CRISPR Therapeutics the same amount of time and effort that of could you give a patient a CRISPR that and Editas but other pioneers like Intellia two or three years ago they could have will specifically delete a gene in a beta Therapeutics and Excision BioTherapeu- created one. “It’s having a huge impact,” cell in the kidney, for example – that is tics that hope to make that leap in the Rees said. many years away,” Rees said. “Possibly next year or so. “All of that work has been done with the biggest hurdle there is to the ability to “We have a nascent portfolio of two or the potential endpoint in mind of creat- selectively deliver a genetic agent to only three diseases that we are interested in,” ing the tools that ultimately will allow us that cell type and then, once it’s in that said Rees. In the first instance, these will to deliver CRISPR medicines, because the cell, to do exactly what it wants to do.” be the simpler cell therapy approaches. tools that we need for research are exactly “Our primary focus is in the liver and we the same as the tools that we need to go PRECISION PLEASE are looking at what diseases we could treat into the clinic.” Aside from safety, the other major barrier through the editing of genes in the liver.” So just how far is AstraZeneca off from to CRISPR as an effective therapeutic is Early attempts have centered on alfa 1 bringing such a medicine to market? “That the difficulty in being able to make the antitrypsin deficiency; AstraZeneca has is a difficult question to answer. I’ll couch very precise genetic changes that certain already published work showing that it it in these terms: if AstraZeneca is to de- diseases call for. Rather than just by can effectively delete a mutant gene in alfa liver CRISPR medicines on the market I knocking out a dodgy gene, some diseases 1 antitrypsin deficiency. “That’s the type imagine we can do this over the course of would require a minute edit – it’s like the of thing we are looking at, but to make the next five years. And the reason I couch difference between deleting a music track that happen there’s a whole variety of it that way is that if we are not able to off a playlist and changing a few notes methods that need to be developed – not deliver a medicine over the next five to six within that song. just simply around CRISPR but also the years that probably means there are some “The banner headlines in the field is ability to maintain patient hepatocytes in fundamental issues with the technology that with CRISPR you can do any edit to the laboratory for a period of time.” that mean it is more challenging to do than any gene to do anything you like – and we currently envisage.” that is a true statement with a huge, big QUICK WINS But overall he sees few downsides to the BUT,” Rees explained. “If we wanted to More immediately, the company is enjoy- technology. “There are areas for improve- delete a gene in T-cells, for example, I’m ing the benefits of its early successes with ment – this ability to precisely repair genes confident that we could develop a method CRISPR. The internal team established at – but from a research tool perspective, it that would give us 80%-90% gene dele- AstraZeneca is tasked with developing is very simple to design a CRISPR to do tion. If you want to create a single amino CRISPR methodologies that have applica- the types of things you want it to do; it’s acid change in a gene in a T-cell, that’s tion in drug discovery, primarily focused very quick, it’s easy to use, it is relatively done using a slightly different CRISPR on making better cellular and animal mod- cheap. Yes, there are 101 issues around method called homology-directed repair, els of disease to help better validate targets intellectual property that the field needs to and the key point is that the efficiency is and create better in vitro or in vivo models work its way through, but from a usability much lower – it’s about 1%.” to test its small molecule medicines before perspective it is revolutionary,” he said. Beyond demonstrating safety, AstraZen- they go into the clinic. “We forget this, but three years ago, 90% eca’s own ambitions for CRISPR include One of the biggest advances, Rees said, of the people using CRISPR in AstraZeneca developing CRISPR editing methods that has been in the creation of models for today had probably only read about it. It’s will be able to give this very high efficiency oncology in a fraction of the nine to 12 astonishing how it has permeated so much of gene repair – not just gene deletion – months it takes to produce a transgenic of what we do.” that certain monogenic diseases need, but animal model. IV124162 this will take time. “We have created a system that gives you
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Pharma Wakes Up To Transformative Progress In
Hearing Loss Research JOHN DAVIS SENIOR EDITOR, The cacophony of noise in the modern world is one factor driving the loss of hearing throughout PHARMA, EUROPE humankind, a condition that until now has not been thought amenable to pharmacological intervention. But with small-molecule approaches to regenerating cells in the inner ear bearing fruit, biotech and pharmaceutical companies are taking renewed interest in the sector.
If the decibels are high enough, a single night at a “The feeling is hearing loss research is at a similar noisy musical event will destroy some of your hair cells stage now as ophthalmology R&D was more than a forever – some animals, including birds and frogs, are decade ago,” he added. The charity is funding basic able to regenerate hair cells, but that regenerative abil- and translational research and is working in partner- ity has been lost in humans. At birth, you had around ship with biotech companies. Big pharma companies 12,000 hair cells in each ear, and that number has been also appear ready and willing to enter the field when on the decline ever since. opportunities emerge, Holme noted. Estimates vary, but the US charity the Hearing Health Foundation estimates that some 50 million EARLY DISAPPOINTMENTS people in the US, and 360 million worldwide, have suf- But developing drugs for hearing-related conditions is ficient hearing loss to cause them to suffer social iso- not easy. One previous leader in the field,Auris Medi- lation, learning impairment and general misery. And cal Holding AG, reported in early 2018 disappointing importantly, its incidence is rapidly rising, thought Phase III results with a potential tinnitus therapy, to be caused by increased noise exposure and an ag- Keyzilen (esketamine HCl; AM-101). (Also see “Auris ing population. It might also be associated with the Medical’s Second Phase III Tinnitus Trial Disappoints” progression of other, equally devastating conditions, - Scrip, 14 Mar, 2018.) such as Alzheimer’s disease. The Zug, Switzerland-based company has since re- In one scientific study reported in the Journal of the structured its R&D to focus on early-stage compounds, American Geriatrics Society on April 10, 2018, the de- including AM-125, an intranasal formulation of beta- cline in certain measures of memory was slowed when histine, that is expected to enter Phase II in 2019 for individuals who needed them started to use hearing acute vertigo associated with vestibular schwannoma aids. The early use of hearing aids in people showing excision. Another late-stage product, AM-111 (brima- hearing impairment may help to stem the worldwide pitide), has also shown promising effects but missed rise of dementia, the researchers concluded. Fortunately, the next 12 to 18 months is likely to see significant progress on the design and development of a number of novel candidate drugs for hearing loss, and the marking out of new therapeutic avenues for hearing-related conditions. It’s not widely known that academic and industry researchers are evaluating potential new medicines for hearing loss associated with certain cancer drugs or antibiotics, and small molecules that may induce renewed noise sensitivity in damaged inner ear hair cells. Further in the future, new technologies such as stem cells and gene thera- pies may be applied to hearing loss. “We are moving from an era of medical devices such as hearing aids and cochlea implants to one where there may be a whole suite of drug therapies to help all the different types of hearing loss,” remarked Ralph Holme, the executive director of research at the UK charity Action on Hearing Loss.
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endpoints in clinical trials for acute inner is waking up now,” Bausch told In Vivo. ❚ A SUDDEN LOSS ear hearing loss, and Auris is seeking de- Finding drugs that can regenerate velopment partners and/or non-dilutive damaged inner ear sensory hair cells is Increasing age and the accumulation funding for both AM-101 and AM-111. also the aim of the US biotech Frequency of damage from various causes are Of course, one of the difficulties in de- Therapeutics Inc., which is conducting important risk factors for hearing veloping hearing-related drugs is admin- a Phase I/II study of a potential first-in- loss. One of the most serious patho- istering them to the inner ear and teasing class product, FX-322, to reverse sensori- logical conditions of the ear is sudden out the pathology of hearing disorders. neural hearing loss. sensorineural hearing loss (SSHL), “The spatial complexity of the inner ear, FX-322 is an undisclosed proprietary usually linked to damage of the sound- with its highly sophisticated structure, is combination of small molecules intended sensing “hair cells” in the inner ear. a significant challenge,” the CEO of one to wake up dormant progenitor cells in the This can be caused by extremely loud therapy developer – Acousia Therapeu- inner ear, and to turn them into hair cells. noises, surgical procedures, antibiot- tics GmbH’s Christoph Antz – told In Vivo FX-322 is also administered by intratym- ics or chemotherapeutic agents, or an in an interview in mid-2018. Not only that, panic injection. The approach is based inexplicable loss of hearing with no it is much more difficult to gain access to, on progenitor cell biology advances made obvious cause. compared, say, with the eye. The inner ear in the labs of Bob Langer at MIT and Jeff “is embedded in a bony structure, and Karp at Harvard Medical School; Langer Around one in 500 infants are born is a tiny, tiny, organ,” Antz pointed out. is a co-founder and director of Frequency with, or develop, hearing loss during Acousia is based in Tubingen, Germany, Therapeutics. early childhood because of genetically and is backed by Boehringer Ingelheim Over in Europe, another Phase I study, inherited conditions. In one inherited GMBH’s VC fund, among others. It is REGAIN, is evaluating a gamma secretase condition, Usher syndrome, babies attempting to develop small molecules inhibitor for its regenerative effects. The are born with hearing loss, retinitis that repair and restore the function of work is being coordinated by Nether- pigmentosa and balance problems; hair cells. Its most advanced product, lands-based Audion Therapeutics and the syndrome is present in around 4 ACOU085, is expected to enter clinical supported by the EU’s Horizon 2020 pro- of every 100,000 births, or more than trials in 2020, with the aim of reducing gram and Eli Lilly. In preclinical studies, 400,000 people worldwide. cisplatin-induced hearing loss. A small the gamma secretase inhibitor has shown molecule, otopotin, has also been identi- activity in changing support cells in the ❚ OTHER CAUSES OF fied and appears to turn certain otic sup- inner ear into sensory hair cells. HEARING LOSS porting cells into inner ear hair cells, and But perhaps closest to market is a might be the basis for restoring function small US biotech, Durham, NC-based A further common condition associ- to damaged cells. Fennec Pharmaceuticals Inc., which ated with hearing loss is tinnitus, the Another European company, Strekin is tackling the hearing loss associated ringing, buzzing or hissing sound in AG, may be closer to commercialization with certain cancer drugs by developing the ear or head that has no external than most, with its pioglitazone-based Pedmark, a unique formulation of sodium source, and is thought to be caused product, STR001, in Phase III clinical thiosulfate, to counter the ototoxicity of partly by the brain filling in for a lack studies for hearing loss. Company found- platinum-containing anticancers like cis- of auditory stimulus. The condition er and CEO Alexander Bausch noted that platin. It’s terribly distressing to children is surprisingly common and has a damaged inner ear hair cells respond and their families that such a side effect depressing impact on quality of life. to oxidative stress by reducing glucose can mar potentially curative treatment uptake, a process that eventually leads strategies. In Meniere’s disease, patients suffer to apoptosis and death. Pioglitazone, al- In the SIOPEL-6 study, one of two Phase vertigo and dizziness associated with ready in use for diabetes, has a combina- III studies completed with Pedmark, 109 a buildup of fluid in the inner ear. Al- tion of properties, including anti-oxidant, children with hepatoblastoma were treat- though the cause of the condition is anti-inflammatory and metabolic effects, ed with cisplatin and then, six hours later, not fully understood, it could include and can be administered in an intra- with either Pedmark or placebo. Of the viral infection, allergic reactions and tympanic (through the eardrum) gel, to children treated with cisplatin alone, 63% head trauma, and affects around potentially restore hearing in auditory suffered hearing loss, compared with 33% 600,000 patients in the US. hair cells. of children given the combination, a 48% Strekin is funding a Phase III clinical risk reduction. The results of the study Other rare hearing disorders include study in Europe, RESTORE, in sudden were published in the June 20, 2018 issue auditory processing disorder, where sensorineural hearing loss, and results of the New England Journal of Medicine. the brain cannot process sound, and should become available in late 2019. Fennec plans to pursue regulatory hyperacusis, where people cannot “When I came into this field, it was amaz- approval for Pedmark based on the data tolerate everyday sounds, usually due ing how little research was being done, from the SIOPEL 6 study along with data to head or ear injury or infection. and how little the pharmaceutical indus- from a second trial, the Children Oncol- try was involved, but I think the industry ogy Group (COG) ACCL0431 study. Fennec
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has funding for its planned commercial oxidant. This company also has another launch, and analysts believe such plans product candidate, SPI-3005, which in could be helped by the concentrated loca- animal studies has protected against tion of pediatric oncologists and the large chemotherapy-induced hearing loss. unmet need. Platinum-based cancer treat- ment regimens are used in around 10,000 GENE THERAPIES POSSIBLE? children in the US and Europe every year. A pioneering focus on hearing loss dis- (Also see “Finance Watch: The Year’s Big- orders including vertigo, sudden hearing gest IPO And A Post-ASH Offering Splash” loss and inherited conditions like Usher - Scrip, 20 Dec, 2017.) syndrome is claimed by the French compa- In a similar vein, another US biotech, ny Sensorion SA, and in November 2018 it Oricula Therapeutics Inc., is develop- signed an agreement with the Paris-based ing a compound, ORC-13661, which is Action on Hearing Pasteur Institute to exclusively negotiate aimed at preventing hearing loss caused licenses to the institute’s expertise in gene by aminoglycoside-based antibiotics. In Loss has identified therapy product candidates for the restora- a Phase I study, completed in the middle tion, treatment and prevention of hearing of 2018, the Seattle, WA-based company more than 40 loss disorders. Lead programs include reported that ORC-13661 was well toler- gene therapies for Usher syndrome type 1 ated and exhibited once-daily dosing companies that are and otoferlin deficiency. pharmacokinetics. Montpellier-based Sensorion is con- Finding a way of reducing such active in research ducting a Phase IIa study of one small hearing loss would allow the broader molecule, seliforant, for the treatment use of inexpensive aminoglycosides into hearing loss of acute unilateral vestibulopathy, also in life-threatening bacterial infections known as vestibular neuritis or acute including those associated with cystic therapies. vertigo, an orphan disease characterized fibrosis and tuberculosis, Oricula says. by spinning vertigo, postural imbalance ORC-13661 was developed using a starting and nausea. Via antagonism at the hista- structure, ORC-001, that was identified release otic formulation of brain-derived mine H4 receptor, seliforant is believed in a zebra fish lateral line hair cells in neurotrophic factor (BDNF), which in to be a neuromodulator of inner ear cell vitro screen, cells that are thought to be preclinical studies has been found to function, and Senorion is evaluating similar to human ear hair cells. A second repair synaptic dysfunction. A Phase I/ whether it has any effect on vigilance or US biotech, Decibel Therapeutics Inc., II study in people with speech-in-noise cognition – current antivertigo drugs have licensed worldwide development and hearing loss is expected to start in 2019. a sedative effect. commercialization rights to ORC-13661 in Otonomy is also developing Otividex, a The company is also evaluating another September 2018. sustained-exposure formulation of dexa- compound, SENS-401, as an otoprotec- Decibel is a well-backed Boston, MA, methasone, which has achieved a primary tive in a Phase II trial, which may have biotech that raised $55 million in a Series C endpoint in one Phase III clinical study potential in the treatment of sudden sen- fund round in June 2018, and is investigat- in patients with Meniere’s disease, and sorineural hearing loss; interim top-line ing nerve cells in the inner ear. It believes missed it in a second Phase III study. A data are expected in the fourth quarter of damage to neuronal synapses in the inner third pivotal study is now underway, with 2019. SENS-401 is R-azasetron besylate, ear is critically important in various hear- top-line results expected in the first half an enantiomer of a product marketed in ing conditions. Decibel has already forged of 2020. A Phase I/II study of OTO-313 (ga- Asia for chemotherapy-induced nausea collaborations with other companies, in- cyclidine), an NMDA receptor antagonist, and vomiting, which has been found cluding Regeneron Pharmaceuticals and delivered by intratympanic injection, is in preclinical studies to reduce hearing GV (formerly Google Ventures). If a healthy expected to start in tinnitus patients in loss. It may also enter Phase II studies synapse can be restored, hearing might the first half of 2019. next year for the prevention of cisplatin- also be restored and maintained. Decibel Another US firm, Seattle, WA-based induced ototoxicity. claims to have the first fully integrated Sound Pharmaceuticals Inc., is evalu- In total, Action on Hearing Loss has discovery and development platform for ating SPI-1005 (a novel formulation of identified more than 40 biotech and hearing therapeutics. the anti-oxidant ebselen) in a Phase I/II pharmaceutical companies that are active Such ideas about the importance of study for the prevention and treatment in research into hearing loss therapies. “cochlear synaptopathy” – loss of the of tobramycin-induced ototoxicity in “These are exciting times and challeng- connection between inner ear hair cells patients with cystic fibrosis undergoing ing,” said Holme. But with patients push- and spiral ganglion neurons – is to be intravenous tobramycin treatment for ing hard, “Ultimately, we need a new gen- explored in studies by US company acute pulmonary exacerbations. Ebselen eration of medicines,” he concludes. Otonomy Inc. The San Diego, CA-based is believed to work by mimicking and IV124168 firm is developing OTO-413, a sustained- inducing glutathione peroxidase, an anti-
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December 2018 | In Vivo | 63 CLINICAL TRIALS
SPONSORED BY:
VIRTUAL TRIALS: JOSH ROSE A More Direct Path To Patients VICE PRESIDENT, GLOBAL HEAD OF STRATEGY, IQVIA
Traditional clinical trials pose accessibility do another.5 Virtual trials can address these the-clock data collection – rather than the obstacles for patients, who often have to challenges. infrequent site visits involved in traditional travel long distances – as far as 50 miles clinical trials. This offers advantages for or more – and make major time commit- REDUCING PATIENT BURDEN investigators, who are able to “see” more ments for multiple trial-related site visits. TO OVERCOME BARRIERS TO patients. Moreover, it reduces variability in This burden to patients can threaten clini- PARTICIPATION assessments and data, and provides greater cal trial enrollment, with less than 5% of Virtual trials are designed to allow patients visibility into safety events. Investigators patients currently participating in clinical to participate from home, with the support also benefit from technology to support research,1 over a third of participants drop- of home health nurses. A patient centric ap- tasks such as issuing alerts and notifica- ping out before their study ends,2 and new proach uses telemedicine to enable patient tions, scheduling, and reporting, freeing therapies taking an average of 10 years to recruitment, gain informed consent, mea- up their time to focus on research. reach the market.3 sure clinical endpoints, and monitor any In addition, the U.S. Food and Drug Ad- adverse events from the patient’s home.6 ministration is increasingly requiring more This provides an innovative and more di- patient diversity in pre- and post-marketing rect path to patients, taking trials directly studies, reflecting the fact that ‘medical to them, and offering a more attractive products are safer and more effective for way for diverse and geographically distant everyone when clinical research includes individuals to participate. diverse populations.’4 The principal investigator is located The administrative and financial burden remotely and supported by a virtual care on sites can also prove challenging. Almost team (see diagram). This model provides half of investigators do one study and never for better physician oversight and round-
The Virtual Trial Model Puts The Patient At The Center
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Figure 1: Benefits of virtual studies
THE VIRTUAL APPROACH patients is very high. For these situations virtual approaches can potentially trans- Virtual trials are not ‘one-size-fits-all,’ and more complex trials, elements of vir- form the research landscape, enabling however. First, it is important to design tual and traditional trials can be combined better, faster and more efficient trials. They a patient-centric protocol. The virtual ap- in a hybrid approach. For example, this hold particular promise for less complex proach works well with chronic diseases might be used to support long follow-up interventional and observational studies and less complex interventional and ob- periods after innovative treatments such involving chronic diseases. For patients, servational studies. Suitable study types as cell therapies. improved trial accessibility can expand include indications or protocols where the In other areas, virtual trials might not clinical care options, and boost retention. investigational product has a known safety be a good fit. Examples include investiga- For investigators, the ability to interact vir- profile and endpoints can be assessed tional products with an unknown safety tually with larger numbers of participants remotely. Initially, therapeutic areas such profile, and protocols involving endpoint provides deeper insights from richer data as endocrinology, CNS, dermatology, respi- assessments that have not been validated – and may reduce investigator turnover. ratory, gastro-intestinal, immunology, car- for remote assessment. Studies where Initial indications are that patient and diovascular, and rare diseases present the interventions must be conducted in a investigator satisfaction is high. However, best opportunities for a virtual approach. structured setting such as an intensive sponsors should keep in mind that virtual We should not totally rule out more care unit or phase I unit – along with trials involve more than technology alone complex indications where the burden on early-phase oncology and first-in-human – they remain a complex endeavor that studies – would typically must meet regulatory requirements and not be suitable for a vir- demands in-depth clinical understanding. tual approach. The benefits of con- ducting virtual studies IQVIA Virtual Trials is uniquely qualified can be summarised as de- to orchestrate the unique complexity of livering: improved patient patient-centered virtual trials to acceler- convenience; expanded ate the path to approval. patient reach; access to Visit iqvia.com/virtualtrials to learn more. more diverse patients; accelerated timelines; improved quality and ENDNOTES safety; richer data; and 1E. Miseta. Clinical Leader. July 13, 2015; 2Impact Report (2006) Tufts CSDD 8(5);3 J. DiMasi. Tufts CSDD. greater cost-effectiveness. October 2014; 4https://www.fda.gov/ForPatients/ Read more information in ClinicalTrials/ucm407817.htm Figure 1. 5https://www.sciencedirect.com/science/article/pii/ S245186541630093X In conclusion, by focus- 6http://www.appliedclinicaltrialsonline.com/virtual- ing firmly on the patient, clinical-trials-future-patient-engagement
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Surrogate Endpoints: Benefits, Issues And The Future On a mild day in April 2016, a Marriott Hotel conference room in Hyattsville, Md. was the scene ED SILVERMAN of one of the most politically charged panel meetings the US Food and Drug Administration held PHARMALOT in years. A throng of parents and young boys in wheelchairs hoped to convince a committee to COLUMNIST endorse the use of a controversial drug for Duchenne muscular dystrophy, a rare and fatal muscle- wasting disease.
The day-long session was punctuated by emotional approval process amid a furious and unusual internal pleas as parents recited how the treatment had made squabble that involved senior FDA officials bickering a substantial difference in clinical trials. But FDA over data and policies, as well as a call to retract a medical staff provided a stark contrast with presenta- study submitted by the manufacturer. tions that were laced with skepticism of a surrogate Beyond raising questions about regulatory stan- marker, or endpoint, that the manufacturer, Sarepta dards, the events also reflected mounting political Therapeutics Inc., had argued was an effective proxy pressure for faster drug approvals, a hot topic that has for notable improvement. spawned countless social media campaigns. Moreover, At issue was whether the drug could sufficiently the episode has since become a touchstone in an ongo- produce higher levels of a protein called dystrophin. ing debate over a growing reliance on surrogate mark- Without this protein, muscle fibers degenerate and ers and the extent to which this regulatory approach voluntary movement becomes impossible. FDA staff to approvals pays off. raised doubts about the veracity of a small, 12-patient As science advances and patients and their families clinical trial the company relied on to make its case, as grow more vocal about access to drugs, regulators and well as the viability of a six-minute walking test that lawmakers have increasingly responded by green- trial participants underwent. lighting medicines based on such proxies. But the To the dismay of the crowd, the panel voted down rising trust in surrogate markers has also generated the drug, but the FDA later approved the medicine some uncertainty about whether most of these drugs anyway. The agency usually follows the advice of its can eventually meet expectations and are improving panels; but in this case it endorsed an accelerated quality of life.
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“This is an ongoing issue,” said Mark notably, halting a disease in its tracks. Of possibility that too many drugs are intro- McClellan, a former FDA commissioner, course, this holds great appeal for a wide duced into clinical practice, even when who is now director of the Robert J. Mar- variety of stakeholders: drug makers, murkiness may surround the science. And golis Center for Health Policy at Duke Uni- investors, physicians, lawmakers and, this is especially true for medicines that are versity. “It’s true that surrogate endpoints most of all, patients all stand to gain, being developed for hard-to-treat diseases, are not perfect. But with a better under- directly or indirectly, from any proxy since these are increasingly priced at higher standing of the mechanisms of diseases, that can foretell whether a medicine is and higher levels. “What’s tough about the they can be an important part of product effective. This explains why surrogate reliance on surrogate markers is that they development.” endpoints figured prominently in the 21st can be totally logical,” said Diana Zucker- He noted it was a long and complicated Century Cures Act, the US law that went man, who heads the National Center for journey to find the best markers. “But I into effect early in 2017 and is designed Health Research, a nonprofit think tank. do think that between policy reforms and to encourage speedier approvals through “Take glucose levels for a diabetic. Even data collection, especially around diag- more imaginative thinking about clinical though a drug might be great at controlling nostics and patient-generated data, that trial design and implementing regulatory glucose levels, it doesn’t mean that patient we’re making progress. Still, the concerns endorsements. For now, the responsibility lives longer, will have a better quality of life remain about validating markers. They is falling on the FDA. or will not have a foot amputated one day.” have to make conceptual sense in the early Toward that end, the agency is working In her view, the FDA has been gradu- studies so that standards are pursued.” on several initiatives, including a process ally yielding to populist and political Using surrogate endpoints to hasten for developing novel surrogate endpoints, pressure, and as a result, is more willing drug approvals is hardly a new concept. facilitating a public process to support to issue approvals based on smaller stud- The notion was highlighted in the early endpoint qualifications as a drug devel- ies that may be conducted over a shorter 1990s, when surrogate markers such as opment tool, and cataloging endpoints period of time. But while this recipe may viral loads – which measure the level that have been used to support both ac- include more information about seem- of virus in the bloodstream – and T cell celerated and typical approvals, as well as ingly attractive surrogate endpoints, counts were used to hasten approvals of those that would be acceptable to support the long-term goal of meaningful health HIV medicines. And in cancer, a widely an approval. issues can get sidetracked. “Everybody used endpoint is progression-free survival, In October 2018, the FDA took two steps agrees surrogates should predict a useful which refers to the length of time during in this direction. The first was to publish a outcome, but they don’t always do so,” and after treatment that a patient lives with list of endpoints used for approvals. The Zuckerman continued. “The argument is a disease but does not get worse. agency also issued a new draft guidance definitely not over, because there are a The pressure to allow surrogate end- to help drug developers seeking to use still lot of people who say we won’t have points is often driven by the urgent minimal residual disease, which mea- a sustainable health system if we keep unmet need of patients living with the sures the number or size of cancer cells, paying for products without clinically disease at the time of the drug's approval as a surrogate endpoint. Agency officials meaningful endpoints.” submission. Certain medical conditions explained this move by pointing to a next Certainly, surrogate endpoints can be – particularly, cancer – are already very generation sequencing-based technology useful for purposes beyond calculating a advanced when symptoms appear and are that makes it possible to detect minimal hard-and-fast goal post for regulatory ap- then diagnosed. And there is increasing residual disease at lower levels. “We’re try- proval. The markers can be used for sorting evidence that starting treatment earlier ing to balance competing needs – the need out dosing or even scuttling a study if the in the disease process may bring benefits. for high degrees of statistical certainty, and endpoint indicates a drug is not working. So the use of diagnostic biomarkers is the need for access to care,” FDA Commis- But one pharmaceutical industry con- becoming increasingly important and sioner Scott Gottlieb said in a speech (June sultant suggested companies need to be that has been used to persuade regulators 2018) at the National Comprehensive Can- circumspect. for approvals. “It’s important to look at cer Network Policy Summit. The rationale, ways to expedite access to treatment for he told Congress the following month, is PROBLEMATIC SURROGATES individuals who have no other option or straightforward: clinical outcomes may “The watchword is caution,” said Robert an unmet medical need,” said Jeff Allen, otherwise take a long time to study. Easton, a senior advisor at Bionest Part- chief executive at Friends of Cancer Re- Despite such goals, lingering concerns ners, a consultant to drug makers and search, an advocacy organization, which remain that some drugs may be approved biotech companies. “They can be a pretty found that surrogate endpoints are used based on weak or premature evidence. For good way to get quick answers in various to provide an earlier regulatory approval this reason, some researchers and policy stages of the clinical development process. about one-third of the time. “Otherwise, experts maintain the increasing use of sur- But as we get to more complex mechanisms patients could encounter multi-year rogate markers is worrisome, even though of action, there’s a higher probability the delays.” drug makers are typically required to run surrogate may yield something other than In general, the idea has been to rely on follow-up studies to confirm the basis for what you think it will report.” endpoints if they are considered “reason- a regulatory approval. Over the past few years, studies have, in ably likely” to predict a real outcome, As they see it, the approach raises the fact, shown that surrogate endpoints can
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be problematic. clinical trials indicated the drug failed was approved in 2003 by the FDA, but For instance, a review of cancer drugs to duplicate the earlier results. Instead, not because it helped patients live longer. approved by the FDA between 2008 and Roche found that Avastin delayed cancer Instead, the agency endorsed the drug 2012 found two-thirds were based on sur- growth by one month to three months, and based on the fact that it reduced the size rogate endpoints, such as progression- there was no evidence it extended survival. of tumors in about 10% of patients. But the free survival or overall response rates, or Further clouding the picture, there was following year, a confirmatory follow-up the percentage of patients whose cancer a high incidence of side effects, such as trial, which was completed according to shrinks or disappears after treatment. gastrointestinal perforations, bleeding FDA protocols as a condition of accelerated But 86% had unknown effects on overall and blood clots. approval, found patients, on average, did survival or failed to show gains in survival, So the agency scheduled a July 2010 not fare better than those who received according to the study, which was pub- meeting at which an advisory panel voted standard of care. lished in 2015 in JAMA Internal Medicine. overwhelmingly to withdraw approval for So in 2005, the labeling was changed to Similarly, another analysis found that breast cancer. By the end of that year, the indicate there was no survival benefit. But 48 oncology drugs were approved by the agency signaled plans to do so, even as an interesting wrinkle soon appeared. As- European Medicines Agency between 2009 the European Medicines Agency recom- traZeneca later discovered some patients and 2013 but entered the market without mended restricting usage so the drug is carried mutations that activated epidermal evidence of benefit on survival or quality given with only one type of chemotherapy. growth factor receptors in their tumors, of life. Of 68 indications granted, 50 were For its part, Roche requested a hearing to making it possible to predict which people supported by surrogate endpoints. And appeal the US decision. would respond to the medicine. In 2012, after more than three years, there was no But the June 2011 hearing quickly be- the company withdrew the drug from the signal the drugs extended or improved came a symbol of public anger over the US market and ran clinical trials to confirm life for most indications, according the approval process. Throngs of protesters, this finding, before returning Iressa to study published last year in British Medi- many wearing pink, rallied outside FDA market in 2015. cal Journal . headquarters carrying loudspeakers and That same year, FDA medical staff pub- “If you want to approve drugs because pickets. One man held a sign that read: lished a study demonstrating that shrinking that keeps people going until they de- “My wife is not a statistic: Save Avastin.” a tumor, which was the surrogate endpoint teriorate, fine,” said Vinay Prasad, a Another sign declared: “It’s my cancer. initially used to grant accelerated approval hematologist-oncologist and associate It should be my decision.” Inside, some for Iressa, correlated with progression-free professor of medicine at Oregon Health shouted at agency officials not to take survival. The study noted this was true for and Science University, who co-authored away the drug. molecular-targeted therapies. the JAMA Internal Medicine study. He not- Nonetheless, the FDA rescinded the The upshot is that, if surrogate end- ed that the key question is how well does indication for metastatic breast cancer. points can be validated with the right progression-free survival or a response It was a sobering moment for the agency. tools, drug developers, regulators and rate predict overall survival? “Unfortu- Just three years after awarding the breast physicians should have more confidence nately, in the current regulatory scheme, cancer indication, FDA Commissioner in both the process and patient outcomes. we’re accepting lots of uncertainty, but Margaret Hamburg conceded the surrogate And as one former regulator notes, this was we’re not sure if we’re getting better drugs endpoint was, effectively, a mirage. This a key reason that the 21st Century Cures Act as a result. But we do know that the more was a “difficult decision,” she noted when was used to promote surrogate endpoints you approve drugs, the more you increase the verdict was announced. to hasten approvals. profits for the companies. So we’re in Even so, oncologists say such incidents “In general, I do think the law is right,” this funny position. We’re like the steak should not be too easily extrapolated. said Robert Califf, who was FDA com- in the soy sauce – heavily marinated in “In each disease, surrogate utility may missioner in 2016 and 2017, and is now a conflict.” vary. I don’t know that you can make a professor at the Duke University School general statement in any direction that of Medicine and a member of the Duke AVASTIN CASE they are always useful or not,” said Clif- Clinical Research Institute, which runs Consider the controversy over Roche's ford Hudis, CEO of the American Society trials. “The law should reflect views that cancer medicine Avastin (bevacizumab). of Clinical Oncology. “Maybe investigators patients and their families, under different In 2008, the drug, which the FDA had simply chose the wrong marker for a dis- conditions, are willing to take risks versus already approved to treat colon and lung ease and treatment. But in general, this is a something more certain. But predicated in cancer, was also endorsed to combat very challenging area. And regulatory sci- the law is that, if you get approved based metastatic breast cancer based on a sur- ence doesn’t necessarily change as quickly on a surrogate that is not validated, there’s rogate endpoint showing the medication as the technology evolves.” an obligation to do follow-up studies that delayed cancer growth by 5.5 months. The define the risk and benefit balance, and agency required a pair of follow-up studies DIFFERENT STORY FOR IRESSA that’s very much a work in progress. And to confirm this finding. Meanwhile, the Of course, some situations can surprise in designing these follow-up studies, one medication was soon widely prescribed. you. Take Iressa (gefitinib), a lung cancer of the many goals is to include the people Two years later, however, those two treatment from AstraZeneca PLC that who can really be affected by trial design.”
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PATIENT-GENERATED DATA periods and with different levels of rigor. such an analysis, which means that an More recently, another study generated a But a lack of consistency in measurements innovative treatment must meet certain new round of debate – whether surrogate and data quality has made it hard to use thresholds to be recommended for reim- endpoints really matter if a patient’s qual- patient-reported outcomes. bursement by the National Health Service. ity of life is not substantively improved. Even so, the FDA maintains that the qual- “Unfortunately, there are no clear rules An analysis of 52 articles reporting on 38 ity of the data is improving, and the agency in the US,” said Jipan Xie, a health econo- randomized clinical trials that involved is making strides to increase the consis- mist and vice president in the health care nearly 14,000 patients – who were suf- tency and reliability of patient-generated practice at Analysis Group, an economic fering from 12 different forms of cancer — data to better characterize symptoms and and financial consulting firm. “But payers found no significant association between function in cancer patients, specifically. have to play catch up. Regulators will con- health-related quality of life and survival Ultimately, the FDA holds fast to the notion tinue to support early access and approve when the disease was not worsening. The that “standard assessment frequencies” innovative treatments, especially where researchers reviewed trials that were pub- and consistent data measurements can there are few or no treatments available.” lished from 2000 to 2016. support risk and benefit analyses. “So, they have a risk if the only evidence The findings, which were published in For his part, Feng Xie suggested the is a surrogate endpoint. But how do they October 2018 in JAMA Internal Medicine, FDA should do two things: one is to ask evaluate a benefit, from both a clinical and challenged the idea that progression-free all cancer drug makers to submit their economic perspective? Payers have to think survival should be used as a primary health-related quality-of-life data from how they can use or generate evidence and, endpoint in cancer trials and, instead, sug- their trials and make them public. The most importantly, provide clear guidance to gested that studies should focus on overall other is to require drug makers to collect pharmaceutical companies on what they survival benefits, as well as specific ways post-marketing quality-of-life and overall need to submit now and later, once they to measure a better quality of life. survival data for all drugs approved only have more data,” Jipan Xie noted. “Given the increased use of progression- on the basis of surrogate endpoints. Ultimately, one industry watcher who free survival as the primary outcome in “As a regulator, the FDA should act has studied regulatory approval processes new oncology drug trials, and uncertainty as a driving force for standardization of suggests that more government involve- of overall survival, it remains possible patient-reported outcomes in clinical tri- ment is needed to ensure surrogate end- that patients are receiving toxic and/or als. Action matters here,” said Feng Xie. points are properly vetted. “We need more expensive treatments without experienc- “If they continue to use only surrogate investment from various funding sources, ing important benefit,” said Feng Xie, a outcomes nothing will change.” including public investment, to validate study co-author and a professor in the And change may be necessary to con- these endpoints and more systemized pro- Department of Health Research Methods vince payers to cover drugs based on cesses for evaluating surrogate measures and Evidence at McMaster University. surrogate endpoints. The less closely for their readiness for use in clinical trials Maybe so, but it can sometimes be diffi- tied a surrogate endpoint is to efficacy and regulatory approval,” said Dr. Aaron cult to tease out information that validates and outcomes, the more likely a payer Kesselheim, an associate professor at an improved quality of life, according to will view a drug skeptically, according to Harvard Medical School. Friends of Cancer Research’s Allen. He Roger Longman, chief executive of Real He co-authored a study last year in the noted that there is nothing that inherently Endpoints, a consulting firm that works Journal of the American Medical Associa- implies a drug demonstrating progression- with drug makers and payers on market tion that found the quality and quantity free survival will also bolster quality of access. He noted there are relatively few of post-marketing studies required by the life. “If an intervention is given with the quality of life metrics that are statistically FDA to confirm clinical benefits varied goal of reducing the size or growth rate of valid, and payers are least comfortable widely across indications, even though a tumor, one would hope it would improve with such metrics. confirmatory trials and pre-approval tri- the quality of life for the patient, but this “One lesson from all this is that if you’re als had similar design elements, includ- may not go hand in hand,” he said. going to do a patient-reported outcome, ing a reliance on surrogate measures as Interestingly, just a few months earlier, maybe it can be built early into a Phase III outcomes. Gottlieb mentioned in a speech that “ef- trial, which can be difficult and expensive, “We want a situation where the un- fects like tumor shrinkage or progression- but done in a way that is solid enough to proven ones can be adequately studied. free survival can translate into the ability get a label claim. Then it’s much more Regulators need to pay more attention – of patients to stay off more toxic regimens difficult for a payer to gloss over,” he said. and get more authority – to evaluate the for a longer stretch of time, therefore “But cancer is very different, because post-approval use of drugs that made it to improving their quality of life.” The FDA, payers don’t have a lot of control. Patient patients based on these endpoints. You however, acknowledged that data to sup- preference is a big deal.” want to try to cover your bases beforehand, port this contention can be elusive. The To some extent, decision making for and then have sufficient follow-up testing. agency noted patient-reported outcomes reimbursement is rooted in cost-effective- And all of those evaluations should be have been collected in different ways, mea- ness analyses, which are more prevalent transparent,” said Kesselheim. suring different aspects of health-related outside the US. In the UK, for instance, IV124153 quality of life, assessing it at different time most coverage decisions are based on
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Pharma Told To Get It Right First Time On Clinical Trial Data Drug companies are complying with their obligation to submit clinical trial results to the US-based VIBHA SHARMA database, but major errors in their submissions prevent the results from being uploaded in a SENIOR REPORTER, timely manner. PHARMA, EUROPE
The debate around disclosure and clinical trial results All CT results submitted to ClinicalTrials.gov un- never stops. In recent years, regulators around the world dergo strict quality review before they can be posted have launched their own transparency initiatives, sup- on to the public site and they can face multiple cycles ported with legislative changes to ensure compliance. of rejection unless all major issues and inconsistencies In the EU, the upcoming Clinical Trials Regulation are addressed, according to Heather Dobbins, lead (536/2014) will make it mandatory for companies to results analyst at ClinicalTrials.gov. provide layperson summaries of their clinical trial re- Dobbins explained at a recent Drug Information As- sults so that these can be made public. In addition, the sociation conference that the aim of the quality review European Medicines Agency plans to examine late next process is not to check if the data submitted "is of the year how and when it can revive its landmark policy highest quality possible," but "simply to ensure that it on proactive publication of clinical study reports. The is free of apparent errors, deficiencies and inconsisten- policy is on hold as the EMA focuses on the huge job cies" and generally makes sense. of preparing for Brexit. Dobbins recalled that last year a sponsor had Earlier this year, the US Food and Drug Adminis- submitted the results of a study where the outcome tration launched a pilot on publishing clinical study measure looked at the change in total sleep time of reports. Johnson & Johnson's prostate cancer drug, subjects over several weeks. In the study description, Erleada (apalutamide), was the first medicine about the sponsor specifically mentioned that the data was which this information was made public. Canada too being "presented in minutes since predicting hourly has drawn up regulations to publicly disclose clinical data in decimals is tedious.” However, the "unit of data contained in new drug submissions and medical measure" was listed as "hours" and "it was reported device applications. that there was a mean change of 87 hours per night, The initiatives vary to such a degree that a company which simply can't be correct," she said. The NIH re- could find itself having to create multiple different ver- turned the submission to the sponsor as the "unit of sions of its clinical study report because of the differ- measure" was not consistent with information in the ences in regulatory policies for publishing clinical data. measure title/study description. Although most pharmaceutical companies have Dobbins was speaking at the DIA's Global Clinical created separate departments to deal with disclosure- Trials Transparency Conference, which took place in related requirements, it sometimes takes more to get London on September 19-20. the job done. This article illustrates how companies Companies have been submitting results data to are struggling with the US requirement to disclose even ClinicalTrials.gov since September 2008 when it be- basic-level data on clinical trial results. came mandatory under the FDA Amendments Act of Drug companies often inadvertently make major 2007. The legislation requires sponsors to submit basic- errors in their submissions of clinical trial results to level information on trial results, namely participant the US-based registry, ClinicalTrials.gov, and they lack flow, baseline characteristics, outcome measures and clear processes for resolving their mistakes quickly. statistical analyses, and adverse events. The National Institutes of Health, which maintains The results database is now finally mature enough ClinicalTrials.gov, recently started sharing data with to offer insights on companies' performance with re- individual companies on the types of major errors spect to their submissions, Dobbins told In Vivo. The commonly found in their CT results submissions. For NIH has been sharing these metrics since 2017 to help some companies, such as GlaxoSmithKline PLC, this companies prepare error-free submissions that can be has been a real eye-opener as they had no idea that accepted in the first round. This will help reduce the they were faring so poorly on this front. workload both for the NIH and sponsors. Several companies use ClinicalTrials.gov as their "de- The situation has improved somewhat since then, fault register" to publicly disclose study results as part of but major errors are still being detected, Dobbins said. their transparency commitments, and so a direct conse- In March 2018, for example, a sponsor submitted study quence is that the public disclosure of CT results is delayed. results on the percentage of participants meeting a
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certain response criterion. Both the study description and the as earlier comments had not been addressed. "That's something "unit of measure" stated that the results were reporting a "per- that I don't understand … and we would like to look more into centage of participants," but the company ended up reporting a it," Dobbins said. response by 121%, 133% and 111% of participants. "These are the On the issue of companies repeating the same errors, Dobbins types of major issues that our quality control review criteria are cited the example of a submission made in June 2018 on a study designed to catch," Dobbins said. The submission was rejected as reporting changes in a depression rating scale. In the study, pa- the information within the measure was inconsistent. tients were rated on a scale from 1 to 7, with 1 indicating a "normal For some companies, the NIH metrics have come as a major sur- state" and 7 indicating "among the most extremely ill patients," prise. GSK, for example, held a meeting with NIH representatives but the company then reported mean scale scores of 29.9, 30.2 and on this issue in May 2018. Staff were "really taken aback" to learn 30.9 for various arms/groups, she said. that only 28.9% of the company’s 470 CT results submitted between The NIH returned the initial submission saying that the information January 2017 and April 2018 were accepted in the first round, said within the measure was inconsistent and that more information was Smita Shukla, director of data sharing and disclosure at GSK. needed about the scale to know what was going on. The company re- All the remaining submissions were returned to GSK due to ma- submitted the study results in August, offering a lot more information jor errors that rendered the data incomprehensible or inconsistent. about the depression scale that now had a range of 0 to 6 (instead of GSK resubmitted the results after addressing the NIH's concerns; 1 to 7 in the initial submission), but they still reported mean scores of 63.5% of its 189 submissions were accepted in the second round, 29.9, 30.2 and 30.9, said Dobbins. The submission was again rejected while 61.4% of its 57 records were accepted after undergoing more as the company "didn’t really address the major issue in the first place than two cycles of review. and the same major error was present," she said. GSK's senior management has dubbed the issue as a risk and is following the matter very closely. "We have to provide updates on HERE TO HELP a quarterly basis to our senior board about how we are doing – so The NIH, for its part, is taking steps to help companies deal with the pressure is on," said Shukla. the major errors commonly found in their submissions, such as: Since its meeting with NIH representatives in May, GSK has taken several steps to improve its internal processes and has set • Making improvements to its Protocol Registration and Results for itself a "somewhat lofty" goal of ensuring that 80% of all its (PRS) System, used by companies to submit CT results data, to CT results submitted to ClinicalTrials.gov get first-time acceptance offer real-time feedback on potential major errors. Dobbins said in 2019, said Shukla. These process improvements, she said, have the NIH is doing its best to try and figure out how the PRS can helped improve the company's first-time acceptance rate to 61% automatically detect some of the data submission problems. In based on data from 75 submissions reviewed between May 15 and June, for example, it added a new feature to alert companies September 5 this year. if they do not make changes to the section where major errors Although GSK has been submitting CT results to ClinicalTrials. were previously detected. gov since September 2008, Shukla explained that there was no • Introducing automated validation rules during data entry. emphasis on improving first-time acceptance rates until now. The • Offering targeted on-screen help during data entry. Under this, NIH, for its part, is issuing updated lists of most common major er- for example, if a sponsor is reporting a score on a scale, the PRS rors found in CT results submissions. Between Jan. 2017 and April system would automatically detect this and would state what 2018, the most common deficiencies in initial submissions were: information should be submitted about the scale. • Issuing improved help resource materials. In June, the NIH • Missing scale information. ClinicalTrials.gov requires the trial issued updated QC review criteria to help companies prepare results information to be presented in accordance with a scale and submit information on clinical trial results. so that the data are interpretable to anyone looking at them. • Assessing users' needs to understand where they need help. • Unit of measure does not match measure title/description. • Developing educational online resources. • Analysis population is not consistent throughout the record. • The NIH is supporting these changes by reaching out to com- The number of participants analyzed changes; they can go up panies to raise awareness about the issue. Specifically, the NIH and it is not clear where these additional trial participants come has made attempts to identify sponsors doing well and sponsors from and there is no explanation provided, explained Dobbins. who could use assistance. It is also scheduling conferences with • Invalid unit of measure. companies to talk about their internal processes and is open to • Data not presented for each study arm separately. dialogue with sponsors looking for help. • Inconsistent data within a measure. "We are not here to make your life a nightmare. We are here to The NIH is sharing tailored metrics with drug companies on get the best data quality as possible," Dobbins said. their individual performance. For Dobbins, the "most surprising Some companies have already taken up on NIH's offer and are thing" is that several companies fail to address the major errors proactively reaching out to the institute for advice before making highlighted in the first review cycle and re-submit the data and it initial submissions. At GSK, "this is being done much more than again gets rejected for the very same reasons. before," said Shukla. Between January 2017 and April 2018 for previously rejected IV124159 submissions, more that 80% of the records had to be rejected again
December 2018 | In Vivo | 71 CLINICAL TRIALS
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Scrip 100 Clinical Trials Chapter Evidence v2.indd 2 12/7/2018 11:24:33 AM CELL & GENE THERAPY
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Simplification Of The Supply Chain Process For Advanced Therapies
The current Advanced Therapy procurement process is complex, costly and likely too slow for customers with US Food and Drug Administration [FDA]/Medicines and Healthcare products Regulatory Agency [MHRA]/European Medicines Agency [EMA] fast track status. Cobra Biologics is an international contract development and manufacturing organization (CDMO) with a wealth of experience currently at the forefront of this rapidly evolving market with its nascent regulatory climate. This article explains the global pressures on CDMOs, including addressing technology challenges to maximize productivity of these new therapies, and how the UK government is supporting the sector through the Life Sciences Industrial Strategy to anchor manufacturing PETER COLEMAN in the UK for the benefit of both patients and the economy. CEO OF COBRA BIOLOGICS
COBRA AND MARKET OVERVIEW capacity for both viral vector and DNA manufacturing and many I have been the CEO of Cobra since 2011 and have overseen a remark- of the manufacturing processes are complex and unproven. Scott able growth in the business, driven mainly by the global demand in Gottlieb, the commissioner of the FDA, commented in July 2018 Advanced Therapy services. Since 2012, Cobra has seen a four-fold prior to the agency’s Chemistry, Manufacturing and Controls increase in its manufacturing of pDNA. Advanced Therapies are now (CMC) guidance on Advanced Therapy products, that unlike very much an established and rapidly growing market segment of traditional biopharmaceuticals, a lot of the risk in gene therapy biologics product development. There are nearly 900 companies product development, around 80%, lays in the CMC rather than developing Advanced Therapy products with more than 1,000 clini- clinical development plan. cal trials underway, with 93 now in Phase III. Fundraising for these In a typical Advanced Therapy supply chain, even before the viral products year to date was $2.6bn for a market that is predicted to vector is induced into the engineered cell, there is the potential be worth up to $14bn in product sales by 2025. for up to 17 GMP campaigns for one single product: 15 pDNA runs Cobra has a track record in gene therapy (5x cell banks, 5x drug substances and 5x fills) followed by a viral stretching back to 1998 and in recent times we vector drug substance manufacture and fill. have seen rapid growth with $46m worth of or- Dose levels can vary a million-fold and patient numbers can ders taken in 2017. Revenue has increased in the range from hundreds for rare genetic diseases to millions for more UK three-fold since 2013 with 98% of our business common diseases such as wet macular degeneration. This is com- coming from outside the UK. This remarkable pounded by the uncertainty around adoption levels and potential growth has seen us recognized with numerous treatment price indications, which have been quoted up to $4m awards over the last 12 months, culminating in per patient. All of these issues impact a CDMO’s future capacity the Queen’s Award for Enterprise earlier this year. investment decisions. Cobra has had to be nimble as we have grappled to keep pace with The pDNA quantity requirements for different indications can the relentless needs of our Advanced Therapy customers. vary significantly, with treatments for choroideremia and hemophil- ia A having forecast plasmid requirements ranging from less than 1 GLOBAL PRESSURES ON A CDMO TO DELIVER g to 340 kg per annum. Again this variability requires an adaptive ON FAST TRACK STATUS THERAPIES approach by CDMOs to meet an as yet unknown market demand. By 2022 there are expected to be 40 product approvals in gene The dynamic for pDNA manufacturing is changing rapidly, with therapy with numerous products granted “Breakthrough Thera- customers sourcing pDNA from multiple suppliers that face increas- py” designation by the regulatory authorities, resulting in rapid ing pressure to squeeze the cost per gram as quantity requirements to market clinical development plans. However, these products increase with pDNA becoming a commodity product. However, require multiple manufacturing sites. There is currently limited pDNA supply is absolutely critical to the viral vector production
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process and clinical timelines. Consequently, I believe there will investing $9m to double our viral vector capacity and gain a MHRA be more alignment between pDNA and viral vector manufacturers commercial license in 2019. In Matfors, Sweden, we are investing in the near term as this market matures. $10m to add to our UK pDNA capacity with a range of commercial The manufacturing requirements for viral vectors are equally services by 2020, from small-scale high-quality [HQ] pDNA to a complex if you take adeno-associated virus (AAV). For example, the large-scale 500 L capability. This will create 50 jobs supported in amount of vector required for the treatments of choroideremia and the UK by our participation in the Advanced Therapy Apprentice hemophilia A and their patient populations varies a million-fold, Scheme with two new apprentices starting at Cobra this year. Our which for the CDMO means that one size of capability will not fit $19m expansion plan is supported by both the UK and Swedish all indications and there will be a high degree of variability on both governments, with Innovate UK in particular supporting our Keele the process and the cost of goods. project with a $4m capital grant. The production of Lenti viral vectors also presents its own set Alongside our expansion plans we add to our technical pro- of manufacturing complications. First, with productivity levels cess capability with external collaborations – key equipment, that are in the region of a 100-fold lower than those seen for AAV, consumable and process industry experts – to enhance both our significant challenges are created for host contaminant removal DNA and viral vector offerings. These include Centre for Process and in-process monitoring. Second, the size of the vectors at 80 Innovation [CPI], Cell & Gene Therapy Catapult, GE Healthcare to 120 nm in diameter makes basic operations such as sterile [GEHC] and Pall Corporation. This again has been supported in filtration highly problematic. Of course, such challenges are not the UK by grant funding to the tune of $3m in total over the last insurmountable but require close collaboration between suppliers three years. and manufacturer to develop more optimal solutions than those presently available. COBRA & SYMBIOSIS VIRAL VECTOR OFFERING I am personally intrigued by competitors’ claims on their viral I am also pleased to an- vector platforms. There are multiple vector and serotype options that nounce that Cobra has can provide a 1,000-fold range in productivity outcomes, ensuring formed a strategic alliance that each product indication requires a unique solution, with no Viral Vector DS with Symbiosis Pharma- one-size-fits-all manufacturing platform. A further complication is Expansion ceutical Services, based in the history of biotech, with biopharmaceutical process equipment Stirling, Scotland, to provide and analytical techniques tailored specifically to antibody produc- a seamless viral vector offer- tion. If you compare the relative size of, say, a Lentivirus, it is 12 times ing that combines Cobra’s Technical bigger in diameter and 1,700 times greater in volume than a standard drug substance (DS) exper- Quality & antibody. This can have a profound impact on production efficiency Commercial tise with Symbiosis’ drug of the viral vector when using traditional equipment especially in Alignment product (DP) fill capability. the critical areas of purification, product characterization, quality This gives the UK a unique control and analytics. combined service offering Back to the all-important timelines. Fast track designation means for Advanced Therapies. that product approval timelines have reduced from the traditional This endeavor has been 15 years to five years. This places considerable pressure on the Viral Vector partially funded by Innovate CDMO to deliver multi-dimensionally as we tech transfer in a DP Expansion UK to a value of $3m with rapidly developed sub-optimized process, likely from a university the project providing fund- lab, that we are obliged to run in parallel – process development, ing for expansion on both scale-up, clinical supply and even BLA submission. This is further sites alongside technical/ complicated by a lack of clarity around process classification and quality and commercial alignment for both organizations. even regulatory product designation. Looking back again at the typical Advance Therapies supply chain, the combination of both Cobra and Symbiosis can now COBRA ADDRESSING THE CHALLENGE WITH UK effectively address that 17 GMP potential batch requirement, GOVERNMENT SUPPORT THROUGH THE LIFE SCIENCES referred to earlier, under one comprehensive commercial agree- INDUSTRIAL STRATEGY ment that will reduce supply chain complexity for our future Cobra is addressing these challenges through: expansion, innova- customers. tion and collaboration, along with active participation in the UK’s Advanced Therapy Manufacturing Task Force, from which many recommendations have been included in the UK Government’s Life Sciences Industrial Strategy published late last year. Cobra has a considerable track record dating back to 1998 when we made our first batch of pDNA for GSK and we believe that Cobra is one of five independent commercial CDMOs that can provide both Cobra’s Advanced Therapy CDMO development plans over the DNA and viral vector supply. last few years and the support we have received, I believe, are very We are expanding our capacity to meet demand from both our much in keeping with the recommendations of the UK government’s existing and new customers. In Keele, Staffordshire, UK, we are Life Sciences Industrial Strategy.
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Gene Therapy’s Next Big Challenge: Manufacturing As the pipeline and market for novel cell and gene therapies expand, it is time for drug developers AMANDA MICKLUS to address other critical aspects in the logistical chain – and for these complex therapies a lot of SENIOR CONSULTANT, those issues relate to manufacturing. Looking at specific cases, In Vivo has underlined the main PHARMA, US manufacturing challenges facing cell and gene therapy developers, and highlighted methods and approaches used to generate solutions.
Commercialization of modern-day gene therapies closed) across a broad range of diseases, led by various is now a reality. Next-generation modalities such as cancer types, hemophilia and other rare disorders. The chimeric antigen receptor T-cell (CAR-T) therapies are Phase II gene therapy pipeline is even larger, totaling fully in launch mode in the US, where Novartis AG and 150 products right now with nearly 100 ongoing Phase II Gilead Sciences Inc. are banking on the success of their studies being conducted. Given overall pharmaceutical one-time hematological cancer treatments Kymriah (ti- industry attrition rates, many of these therapies will fail, sagenlecleucel) and Yescarta (axicabtagene ciloleucel), but the large number of candidates overall suggests that respectively. Final approval of those CAR-T therapies has there will be several, at the very least, that will advance also occurred in the EU, with funding arrangements in and gain approval, moving toward commercialization. place in the UK. In addition, the first in vivo gene therapy for an inherited disease is now available in the US, by SUPPLY MAY NOT MEET DEMAND way of Spark Therapeutics Inc.’s Luxturna (voretigene The vector used in a gene therapy is a critical compo- neparvovec - rzyl), and the EMA is currently evaluating nent, as it acts as the delivery vehicle for the gene into what could be the next approval in the market, bluebird the target cell. Its role as a carrier allows for genetic bio’s LentiGlobin (lentiviral beta-globin gene transfer) material to enter and be taken up by the cell, whether for transfusion-dependent beta thalassemia. it is in vivo or ex vivo, where the genetic instructions Presently, there are 25 unique gene therapies that are provided to express or block the function of a have reached Phase III or have been filed for approval. gene. In the current gene therapy pipeline, viruses are Approximately 33 individual Phase III trials involving most often called upon as gene delivery vectors. More these therapies are ongoing (open, closed, or temporarily than half, or approximately 59% of the candidates in
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Exhibit 1 Gene therapy pipeline by vector category and viral vector type
Adeno-associated virus 153 Lentivirus 72 Adenovirus 55 Other* 54 Not-Specied 17 Retrovirus 28% Vaccinia 12 Viral Measles 3 59% Non-viral 2 Herpes simplex 13% Alphavirus 2 Vesicular stomatitis 1 1 Influenza 0 50 100 150 200 Volume Of Gene Therapies In Development *Other category contains gene therapies with unspecified viral vector types SOURCE: Pharmaprojects development are delivered via a viral vector, while only gene therapies is spent on manufacturing and quality 13% are administered by a non-viral vector, such as a concerns. He says the FDA is working internally and plasmid (there is also a 28% proportion of the pipeline with partners on initiatives to improve the yield of cell where the vector type cannot be determined because lines used to produce gene therapy vectors. In 2018, the it is not publicly known). As a gene delivery vehicle, FDA announced a new initiative, called the INTERACT viruses, which are typically modified so that viral genes (INitial Targeted Engagement for Regulatory Advice on are removed to prevent replication in the host cell, offer CBER producTs) program, which will include cell-based many advantages, such as enabling efficient gene trans- regenerative medicines and gene therapies and encour- fer and long-term or transient transgene expression. age those sponsors to set up formal meetings with the The adeno-associated virus (AAV) has emerged as the FDA at the early or preclinical stage of development to most actively used vector by gene therapy developers, discuss chemistry, manufacturing, and controls (CMC) followed by lentivirus and adenovirus. (See Exhibit 1.) issues related to clinical trials, much like discussions Sponsors of gene therapies will require a stable sponsors who have received the regenerative medicine supply of vectors for their products. For many, this advanced therapy (RMAT) regulatory designation do may not be an issue now as they treat smaller patient have. Major academic manufacturing centers, where populations in clinical trials. As these firms move from many vectors are produced for clinical trials, all have smaller-scale trials, though, to larger studies and then longwaits, of somewhere between 12 months and prob- mass production for commercialization, the supply of ably 18–24 months, says Thompson. (Also see “BIO vectors becomes a mission-critical issue. “Right now, Notebook Day 4: Gottlieb Seeks Early Engagement On viral vector manufacturing is probably one of, if not the Gene Therapy; Ireland’s Brexit Opportunities; AMAG’s single biggest limitation in the cell and gene therapy Bremelanotide Strategy; Alzheimer’s ‘Learnings’ “ - Pink space,” says Bruce Thompson, former senior scientific Sheet, 7 Jun, 2018.) director, therapeutic products program at Fred Hutchin- son Cancer Research Center, and “could ultimately CONTRACT ORGANIZATIONS EMERGED WITH affect those therapies about to come onto the market.” GENE THERAPY CAPABILITIES [Editor’s note: Thompson has since moved to Lyell The demand for manufacturing will provide lucrative Immunopharma as vice president of manufacturing.] opportunities for contract manufacturing organizations Further, manufacturing of the vectors used to deliver (CMOs) or contract development and manufacturing these gene therapies has been an expensive and time- organizations (CDMOs) in the specialized market of cell consuming endeavor, and more of a custom process and gene therapy, but that demand will likely exceed the at this point. US FDA Commissioner Scott Gottlieb has supply. There is only a select group of companies cur- highlighted vector production as a big concern, noting rently with these capabilities (see Exhibit 2), which are that approximately 80% of the standard review time for considered highly specialized, and it is likely that new
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Exhibit 2 Select Group Of Contract Development And Manufacturing Organizations With Gene Therapy Vector Supply Capabilities
MANUFACTURER NAME GENE THERAPY MANUFACTURING/VECTOR CAPABILITIES
Manufacturing platform for genetic engineering of allogeneic mesenchymal stem cells using viral vector system; facilities in Munich (Ottobrunn and apceth Großhadern) involve GMP manufacturing and quality control for multiple types of advanced therapies
Dedicated clinical and commercial supplier of viral vectors for in vivo and ex vivo therapies; manufacturing facilities located in Cambridge, Brammer Bio Massachusetts and Somerville, Massachusetts that handle early- and late- stage gene therapy manufacturing process technologies
Fujifilm Diosynth 80k-square-foot flexibility manufacturing facility in College Station, Texas; Biotechnologies clinical and commercial production
300k-square-foot manufacturing plant in Pearland, Texas, reportedly the Lonza largest in the world, for cell and gene therapies
BioReliance services, including viral vector manufacturing from small scale/ MilliporeSigma clinical to commercial scale; manufacturing plants located in Carlsbad, (Merck KGaA) California and Glasgow, Scotland
Experience in manufacturing attenuated or wild type viruses and viral Novasep vectors, focusing on AAV, adenovirus, and lentivirus; capabilities ranging from process development to clinical trial material manufacturing
Paragon Bioservices Offers manufacturing services for recombinant AAV production
Expanding manufacturing site in Texas by 5k-square-feet to add two flexible-use GMP production facilities to handle demand for gene therapies, VGXI including plasmid raw materials for viral vector production of AAV and CAR-T therapies
Industrial platform (reportedly the largest in Europe) for the GMP Yposkesi manufacture of viral vectors for cell and gene therapies
NOTES: AAV = adeno-associated virus; CAR-T = chimeric antigen receptor T-cell; cGMP = current good manufacturing practices; GMP = good manufacturing practices SOURCE: company websites
CMO/CDMO players will emerge as well to address this player in the custom development and manufacturing demand, says Morrie Ruffin, co-founder and senior -ad of active pharmaceutical ingredients, in fact, might be visor at the Alliance for Regenerative Medicine (ARM). best equipped for the challenge. In April 2018, it opened The demand, along with the potentially enormous cost, a 300,000-square foot manufacturing plant in Pearland, is cause for concern, and for this reason, there is worry Texas, for cell and gene therapies, said to be the larg- about the sustainability of such a model. Lonza’s head est yet in the world. The facility will be responsible for of cell and gene therapy, Thomas Fellner, agrees this development activities from concept through preclinical is a major roadblock: “If they [late-stage gene therapy testing, clinical trials, and commercialization. companies] all needed to outsource manufacture of Besides Lonza, other CMOs have built up vector their products at the same time, for example, the CMO manufacturing capabilities in the gene therapy mar- sector might not be able to cope. Lonza, which is a big ket. MilliporeSigma, for instance, has been involved in
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of vector manufacturing on an external vendor. Having an internally controlled facility allows sponsors to maintain control over the manufacturing process, according to ARM’s Ruffin. The reliability of supply that comes with a company’s own manufacturing is im- portant as it advances through the clinical development process. Another potential benefit, says Ruffin, are the future uses for such facilities, including meeting commercial demand and post-approval requirements. According to a 2018 survey conducted by KNect365 of cell and gene therapy players, nearly half of the companies (48%) said they planned to conduct manufacturing in-house, with another 32% making their products both through internal means and through contract manufacturers. Industry sponsors have the choice to build their own plant, contract out, or employ a combination of both strategies. There is not necessarily one correct approach, says Ruffin, and it will largely depend on an individual company’s needs and requirements, and If companies all needed to the therapeutic programs involved, including the size of the trial, target indication, and patient population. “As the sector matures, outsource manufacture of their we will see companies opting for both solutions [building and contracting].” Ruffin believes that it is unlikely that there would be products at the same time, the a scenario in which all gene therapy companies are utilizing their own facilities. An important benefit to employing the “build and CMO sector might not be able buy” model in manufacturing, using both internal and external (through a CMO/CDMO partner) capabilities, is the capacity to run to cope. projects in parallel, says Bruce Thompson. This model will likely work better in smaller companies who are mostly or solely dedicated viral vector manufacturing for decades, contracting with not only to gene therapy with smaller pipelines. industry players but also academia and hospitals. The company, which was acquired by Merck KGAA in 2010 and integrated with BLUEBIRD BIO DEVELOPED BOTH INTERNAL AND Sigma-Aldrich (also later bought by Merck KGaA; and previously EXTERNAL CAPABILITIES known as Sigma Aldrich Fine Chemicals [SAFC]), offers these bluebird bio Inc. is one such company that has taken manufactur- services under the BioReliance brand. MilliporeSigma says its ing into its own hands, and for good reason. In December 2015, manufacturing plant located in Carlsbad, California has been bluebird bio disclosed that responses in a small study of its ex greatly expanded in recent years to advance the quality require- vivo gene therapy LentiGlobin for severe sickle cell disease were ment and regulatory output, including 16 modulatory viral bulk not adequate due to the lower-than-expected vector copy number manufacturing cleanroom suites. (Also see “How Merck KgaA’s (VCN), which is a measurement of the average number of vectors Life Science Unit Is Riding The Crest Of The Gene Therapy Wave” in a modified cell population. Bluebird bio modified the manufac- - Scrip, 2 Mar, 2018.) turing process by adding in enhancers during the procedure in When shopping for CDMOs/CMOs, industry clients should keep which cells are transduced to increase the proportion of successful in mind the potential for contamination of products, especially if transductions, and, thus, boost the VCN. The results look promising, multiple gene therapy companies are contracting with the same with updated data showing stable VCNs, and signs of improving CDMO/CMO. Denise Gavin, of the Gene Therapies Branch of FDA’s effectiveness in a small group of patients in terms of anti-sickling Center for Biologics Evaluation and Research (CBER) Office of Tis- threshold. LentiGlobin is now being reviewed by the EMA under sues and Advanced Therapies, advises sponsors to ensure their accelerated assessment, and the therapy has a 70% likelihood of partners have strong cleaning and segregation procedures and good approval, 10% above average, according to Biomedtracker. quality control to reduce the risk of contamination of, for example In late 2017, bluebird bio executed on its manufacturing efforts of random plasmids or adventitious agents getting into a product. and acquired a partially completed complex in Durham, North (Also see “FDA’s CMC Guidance For Investigational Gene Therapies Carolina for $11.5 million. The 125k-square-foot facility will produce Reflects Broader CMC Evolution” - Pink Sheet, 11 Jul, 2018.) the clinical and commercial supply of lentiviral vectors for not only LentiGlobin, but also Lenti-D (human ABCD1 gene), in Phase III for SECURING STABLE VECTOR SUPPLY THROUGH IN-HOUSE cerebral adrenoleukodystropy, plus other products. To ensure it has BUILD-OUT OR EXTERNAL CAPABILITIES a stable supply of vectors on top of what it can produce in house, While many gene therapy developers will indeed contract with bluebird bio also has contracts in place with many of the CMOs CMOs or CDMOs, some have also built out their own manufacturing that specialize in gene therapy. In 2017, the company executed a capabilities, or are in the process of doing so, as they prepare for number of deals with Lonza, apceth, Brammer Bio, Novasep, and commercialization. Key advantages to doing this include mitigating SAFC (now MilliporeSigma). the risk of demand exceeding the supply, and avoiding the reliance IV124141
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Cell And Gene Therapy Logistics Requires Early Planning It has become standard practice for manufacturing to get early attention in cell and gene therapy MANDY JACKSON development, but logistics is often not considered until closer to commercialization, which could MANAGING EDITOR, be a strategic mistake given the speed with which new treatments are being approved. PHARMA, US
Delivering a cell therapy in a Phase I, single academic (tisagenlecleucel) and Gilead Sciences Inc.’s Yescarta center clinical trial is not difficult when it is a matter (axicabtagene ciloleucel) to treatment centers, and of walking reengineered cells across campus from the Cryoport, which provides cryopreservation logistics lab to the hospital, but the real-world setting is a much services for both commercial chimeric antigen receptor bigger challenge. With accelerated approvals moving T-cell (CAR-T) therapies, are among a handful of spe- these novel treatments from early human studies to cialty companies that provide temperature-controlled, commercialization in short order, it is important to time-sensitive services for complex products like cell think about logistics early in the development process. and gene therapies, where cells and patient-specific During the Cell and Gene Meeting on the Mesa hosted treatments are rendered useless by untimely delivery. by the Alliance for Regenerative Medicine (ARM) Oct. Tight turnarounds between harvesting T-cells from 3-5 in San Diego, In Vivo spoke with industry players cancer patients, reengineering the cells and returning about the importance of early logistical planning. Spe- the finished CAR-T products can mean life or death cialists Simon Ellison, cell and gene therapy service for individuals who’ve run out of treatment options. director at AmerisourceBergen’s biopharmaceutical Even for major pharma companies, the complicated logistics company World Courier, and Mark Sawicki, process can run into speed bumps. While Gilead expect- chief commercial officer for the cryogenics logistics ed Yescarta to be available to patients in Europe shortly provider Cryoport Inc., highlighted the key issues after the treatment’s EU approval, Novartis anticipated a around getting cell and gene medicines to patients. limited immediate availability for Kymriah as it worked World Courier, which delivers Novartis AG’s Kymriah to build additional manufacturing capacity. (Also see
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“Gilead And Novartis Unveil EU Marketing Plans For CAR- derived from donor cells – reach the market in the next T Therapies, But Hurdles Remain” - Scrip, 28 Aug, 2018.) few years. Deliveries for those off-the-shelf products are Novartis also has noted problems with cell variability less time sensitive but the shipments may be larger and in manufacturing the patient-specific CAR-T products more frequent, since allogeneic therapies will enable for Kymriah’s lymphoma indication. (Also see “Cosentyx on-demand treatment of larger patient populations. Carries Novartis Sales But Kymriah Manufacturing Gives Cause For Concern” - Scrip, 18 Jul, 2018.) GOVERNMENT MANUFACTURING, Ellison says cell and gene therapy companies gen- LOGISTICS SUPPORT erally have done a good job of establishing manufac- Government agencies in some countries are setting turing facilities early in product development to take up centers designed to smooth out the supply chain, their programs from Phase I clinical trials through so that cell and gene therapies can be delivered at commercialization, though “logistics is always the bit commercial scale as new products win approvals – a left to the end. But if you can’t deliver it to patients, it means of ensuring that patients’ treatments are not doesn’t matter how efficacious your product is.” interrupted by avoidable delays.
RMAT PROPELS NEW PRODUCTS Sawicki says the biggest logistical challenge in the cell Logistics is almost the and gene therapy field has been the speed that these treatments are moving through the pipeline, helped biggest problem the industry by the US FDA’s Regenerative Medicine Advanced Therapy (RMAT) designation, which is designed to get doesn’t realize it’s got,because the potentially transformative treatments through the regulatory process as quickly as possible. (Also see “US cell and gene therapy companies FDA’s Breakthrough And RMAT Designations: A Quick Guide” - Pink Sheet, 2 Aug, 2018.) are not understanding how “The biggest challenge on forecasting [growth] important it is to integrate SIMON ELLISON will be what the FDA will approve on an accelerated CELL AND GENE basis,” Sawicki says, “I think it will accelerate, not distribution into their strategies THERAPY SERVICE decelerate.” DIRECTOR That means it is important for cell and gene therapy WORLD COURIER developers to integrate logistics into early planning for early on. manufacturing, since products are winning acceler- ated approvals based on Phase I data, like Kymriah, Ellison cites the UK government’s coordination with Yescarta and Spark Therapeutics Inc.’s Luxturna the Cell and Gene Therapy Catapult to create advanced (voretigene neparvovec), the first FDA-approved gene therapy treatment centers (ATTCs), where National therapy. (Also see “Spark’s Luxturna Approval Ushers In Health Service (NHS) clinicians, product developers A New Gene Therapy Era” - Scrip, 19 Dec, 2017.) and technical experts are being brought together to Richard Heath Coats, a reviewer in the FDA’s Center enable a seamless supply chain. World Courier is in- for Biologics Evaluation and Research (CBER), said volved to provide assistance and to learn more about recently that the agency expects cell and gene therapy NHS clinician and product manufacturer needs. developers to apply the same rigor to logistics that Similar efforts are underway elsewhere, including they do to development. (Also see “FDA Says Shipping Canada’s Center for Commercialization of Regenera- Logistics Should Be Priority For Cell Therapy Products” tive Medicines (CCRM). Even so, cell and gene therapy - Pink Sheet, 6 Aug, 2018.) standards vary from country to country, making regu- Logistics “is almost the biggest problem the indus- latory convergence an ongoing challenge as regulators try doesn’t realize it’s got,” Ellison says, because cell struggle to come up with common languages and rules and gene therapy companies are not understanding for this growing segment of the biopharma industry. how important it is to integrate distribution into their (Also see “World Regulators Wrestle With Advanced strategies early on. He noted that logistics could in- Therapies” - Pink Sheet, 8 Oct, 2018.) form manufacturing site placement or the number of The development of manufacturing and logistics manufacturing facilities needed to serve the global standards is ongoing, but Sawicki estimates that stan- market – and those sites have to be constructed early dardization is four to five years away. Fortunately, he to support timely delivery of clinical trial materials says, cell and gene therapy developers are increasingly and commercial products. reaching out to technical experts early on – even before Like Sawicki, Ellison says growth predictions are dif- they have completed their first financing round – to ficult, but he notes that logistics providers will get an get the ball rolling on manufacturing and logistics. additional boost when allogeneic products – therapies IV124139
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Phil Vanek, PhD • GE Healthcare What’s Under The Iceberg: GE Healthcare’s Deep Dive Look
WILLIAM LOONEY At The Future Of Gene Therapy EXECUTIVE EDITOR, PHARMA, US Cell and gene therapy represent a transformative advance in drug delivery and outcomes, with implications equally as important to human progress as the digital revolution that began three decades ago. In Vivo speaks with a key player in this evolving field, GE Healthcare’s strategy manager for cell and gene therapy and board member of the Alliance for Regenerative Medicine, Phil Vanek, PhD.
Technology around cell and gene therapy is progress- In Vivo: Why is cell and gene therapy a strategic ing, with a simplified, cost-efficient improvement to priority for the new GE Healthcare? What’s the op- today’s cumbersome viral vector delivery pathway likely portunity for the company and your point of differ- in a matter of years. entiation against the competition in an increasingly GE Healthcare’s strategy manager for cell and crowded field? gene therapy and board member of the Alliance for Philip Vanek: Our work in gene therapy is a logical Regenerative Medicine, Phil Vanek, PhD, supplies extension of the life sciences cell therapy and bio- forceful advice for biopharmas seeking a competitive processing segments that GE Healthcare has led for edge in these new therapies: network widely, and many years. We have a reliable record of expertise in never underestimate the size and scope of the logis- advanced biological therapies, where we design and tical challenge; pay close attention to the efficient deliver manufacturing platforms to produce genetically management of capital assets; acknowledge medical modified cells, for biologics or therapeutic cell applica- academia as an important partner, particularly as it tions. We are enthusiastic about this area because it begins to test out opportunities on the commercial represents progress toward realizing the goal of a more side; and commit internally to continuous learning personalized approach to medicine. For the customer, to attract scarce talent. we stand out because of our track record in partnering
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with organizations that, like us, are committed to building the these complex and potentially perishable therapies. We advanced enabling ecosystem to turn gene and cell-based therapy into in- another step by acquiring a UK company, Asymptote Ltd., which novations that make a difference in the clinical setting. focuses on cryopreservation to maintain cell viability and function as the cells move along the supply chain, from the testing, qual- What is the current state of the science in cell and gene therapy? ity assurance and manufacture phases out to the clinics where How far has the field evolved over the past 10 years? reengineered genes and cells become products administered to Both the biological information we have now and our knowledge patients. Taken together, these three program elements comprise of how the human body actually works have increased dramatically. the ecosystem that we think can best deliver on the promise of Cell and gene therapy exist today because of early foundational ef- regenerative medicine. It’s the foundation of GE Healthcare’s busi- forts in basic research, such as the discovery and replication of stem ness proposition to the makers of cell and gene therapies. We think cells, bone marrow and organ transplantation, sequencing of the it is leading-edge and enabling, as the market for these therapies human genome and, finally, the rise of genomics and proteomics expands to the annual $30 billion in revenues forecast for early in as a distinct area of medicine. Each has contributed to major ad- the next decade. vances in drug discovery and therapy. Consider the recent arrival of cellular-driven immunotherapies, where, outside the body, we Looking more closely at your customers, can biopharma com- can restore disease-fighting capabilities back into these cells to panies keep up with the pace of technological change in the address deadly conditions like cancer. This is only the tip of the cell and gene therapy space? iceberg. The hundreds of clinical trials now underway in cell and Things are moving at an extraordinarily rapid pace. That’s com- gene therapy have the potential to deliver to patients an entirely mon in any industry driven by technology innovation. You have to new generation of transformative medicines. All of this represents be in close proximity to day-to-day developments in the field while a new way of thinking about biology – as a medicine, with cellular continuously learning from that basic understanding of the biology and gene therapy as the centerpiece. We are starting to hear more behind the innovation. We must stay close to what’s happening in about systems or synthetic biology, with the ability to manufacture the cell and gene therapy companies, and the only real way to have customized biological specimens and reprogram them to produce that level of intimacy is by maintaining strong technical connec- a therapeutic benefit wholly unanticipated today. tions. GE Healthcare has forged strong relationships with multiple
How would you describe the current industrial environment for this line of therapy – are the conditions propitious for ultimate Cell and gene therapy exist today business success? Cell and gene therapy – and the platform for regenerative medi- because of early foundational cine in general – is an emerging technology that requires strong institutional and regulatory support to guarantee its commercial efforts in basic research, such as success. I see three elements necessary to bring this field into the mainstream of care. The first is improving our understanding of the the discovery and replication of biology behind the cell and the gene. Clinical development requires us to interact with these living biological materials, whether they stem cells, bone marrow and are patient-specific or not. This in turn means we need to assist our biopharma company customers in advancing new methodologies organ transplantation. that work consistently to certify the therapeutic capabilities and po- tency of these medicines. It is no simple matter when cells or genes clinical centers, including major academic institutions like the are being reengineered outside the body and then reintroduced to University of Pennsylvania, Dana-Farber Cancer Center, and other a living human host to secure a regenerative or curative result. We research/clinical care centers like Memorial Sloan Kettering (MSK). need to de-risk as much of this as we can. Beyond the clinic, one GE Healthcare partnership I’d highlight is The second element highlights GE Healthcare’s principal task the Centre for the Commercialization of Regenerative Medicine – leveraging our competence in bioprocessing to move the manu- (CCRM) in Toronto, Canada, which for GE Healthcare serves as a facture of cell and gene-based therapies to the next level. Our goal is “center of excellence,” where we can try new things out and explore to continuously upgrade gene and cell processing to make it “fit for processing technologies that could bolster our manufacturing and purpose.” This was the motivation for one of our recent acquisitions, cold chain distribution networks. We encourage such collaborations Swiss-based Biosafe SA, a leading supplier of integrated, closed- as it enables us to help boost the efficiency of these processes and fluid cell processing systems. Biosafe’s proprietary technology is make them more cost-effective for our customers. highly effective in automating many of the most critical aspects of cell manufacturing, including cell washing and removing cell by- You’ve outlined a future for biopharma far different than the products and enriching specific cells of interest for targeted batch traditional business model focused on repetitive treatments production. It will help us refine production at doses required for built around small-molecule drugs for chronic disease. Is it cell and gene products to deliver their desired therapeutic effect, possible that only some biopharma companies will succeed in a stable and consistent manner. in making the transition to a world of curative treatments that Finally, our customers want us to coordinate the logistics around require high levels of expertise and sophistication in entirely
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new areas of science? Is a hierarchy of competence now be- ing formed around cell and gene therapy, between those who started early and took the time to learn through experience, and those who figure they can simply acquire the expertise and jump in at the last minute? It’s true that much of the discussion around new science centers on the idea of disruption. I don’t believe this to be the case. Small- molecule and even large biological drugs are not going anywhere soon; we continue to rely on these products as first-line therapy for many ailments, including conditions that account for most of what we spend on health care. Where the new therapies come in is addressing that segment of health care that represents an unmet medical need. Their delivery will also center on the personalized A large number of players must aspects of treatment, so logistics will have to change for this class of drug, to account for a precisely inventoried manufacturing model be involved in the development, directed to the actual point of care, and in a heavily monitored clinical setting. I don’t think this will be disruptive because these manufacturing, delivery and two product platforms will need to coexist. While everyone acknowledges the opportunities in regenerative administration of these very medicine, drug companies are in various stages of transition to it. Novartis AG, Merck & Co. Inc., Gilead Sciences Inc. and Celgene complex therapies. Corp., among others, have taken the first steps in the cell and gene therapy space, but we are seeing similar moves at the major is required to personalize the benefits of cell and gene therapy for academic teaching hospitals and clinics. They too are looking at the patient. That’s what is unique about this space – it’s an inter- commercial prospects in this area and even working to file INDs and vention uniquely tailored to the individual. You have to cope with bring their own cell and gene therapies to market. Hence the good scheduling each patient for therapy, with extensive background news is there is a lot of effort around regenerative medicines, at all support; bringing the clinician on board with the right treatment levels of the health system, which suggests in turn that the underly- protocols and guidelines, and also engaging other specialties, as ing incentives to make these new technologies available to patients needed; pricing the technology right, in consideration of its cura- are strong. It sends the right signal to all players in biopharma to tive potential; and coordinating billings and reimbursement. It’s engage and commit to the innovations that drive medical progress. a new environment, one where the regulatory system also must adapt to a different approach to medicines evaluation; to working In seeking partners, what do you cite as the value proposition with payers in assessing medical need and economic value; and that differentiates GE Healthcare from its competitors? to contracting with different vendors and CDMOs to apply logistics First, GE Healthcare is involved in virtually every aspect of the bio- and distribution capabilities across geographies. pharma research and clinical enterprise. We play an integral part in This new environment is particularly important. With a small- many health systems globally, with contacts with different stakehold- molecule or biological drug, you will usually deliver it as prescribed ers across the spectrum, from early-stage researchers to providers as in a pill or a bottle, at a predetermined dose. The product is part of a well as manufacturers. Cell and gene therapy is an amalgam of both clearly defined supply chain. It’s different in cell and gene therapy: the traditional pharmaceutical and clinical therapeutic models. We we have to ensure documentation and patient custody of their own see this from our direct exposure at the point of care in the hospital genetic materials; the samples taken from the patient must be setting. We see ourselves as coordinators in merging these two models tested, verified and protected prior to re-administration in the body together in a way that improves patient outcomes. to yield the desired therapeutic effect. There is no margin for error One of our most rapidly growing product offerings comprises when we’re considering durable or persistent therapies involving everything from creating a customized SOP workflow plan for a the human body – all the safety checks and balances must work company, incorporating not only our own equipment but equipment as deployed. It’s challenging, but by no means insurmountable. from other suppliers as well, to offering training modules that help transfer know-how and “best of breed” thinking across functions Are there learnings to be had from other technologies that can and business verticals. It’s a 360-degree approach to creating ca- enhance biopharma’s capabilities in tackling the rigors of cell pabilities that work for the entire field of regenerative medicine. and gene therapy manufacture? We have spent significant time and resources to identify require- As you work with big pharma, what have you noticed about how ments for the optimal workflow in manufacturing these products. We individual companies approach the challenge of turning a gene identified the steps at each stage of the production cycle, the number therapy platform into an approved product in the marketplace? and types of equipment that a customer might need to interface with, It’s important to emphasize that a large number of players must be how much skill and labor would be required to move material down- involved in the development, manufacturing, delivery and adminis- stream. Digital and high-tech processing applications and factory- tration of these very complex therapies. Much network orchestration floor layout simulations helped us turn this complicated process into
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a real plan that could be deployed seamlessly. We relied on digital with frameworks that promise to standardize the rules of engage- algorithms to configure lab space and placement of equipment, and to ment across geographies. This is a key confidence-building move identify possible bottlenecks as production in these facilities grew to for biopharma companies willing to take the risk of investing in cell scale – what might be the challenges once the manufacturing volume and gene therapy. The one priority that still needs some attention is encompassed the needs of 5 to 10 thousand patients. helping regulators keep abreast of the evolving technology through more education and outreach initiatives. Any other suggestions on where biopharma needs to double down in expanding its capabilities in this space? On this issue of expertise and human capital – is there enough There is so much focus on the technology that one thing is often out there to meet demand? forgotten – managing capital assets as efficiently as possible. It’s The talent shortage in regenerative medicine is acute. It affects the critical to mobilize all those investments in overhead and labor, entire process, from therapy targets to manufacturing workflows, materials stockpiling, storage and transport to the right end: to push distribution and delivery logistics right on to administration of regenerative medicine innovations forward quickly, into the market. treatment in the clinic and follow-up. This is new science; there Wresting value from a promising R&D pipeline must be accompanied are no shortcuts. Success will come largely from learning by do- by a tough, uncompromising approach to materials management. ing. Partnerships between companies and academic institutions, especially those that are promoting research and education, add Is the technology behind cell and gene manufacturing on the to the knowledge base. cusp of disruptive change? Or do you see a steady state for the time being? Considering the rapid progress in cell and gene therapy over We’re going to continue to employ the processes of cell expan- the past five years, can you identify any “wild cards” that might sion, cell washing, cell isolation and batch processing at scale – all put a damper on the potential of this field for waiting patients? that’s necessary to bring this therapy to the clinic. The focus right The main issue is the risk of various stakeholders not being able now is addressing the bottlenecks in production; from this, I see to keep up with the pace of change in the field. I’ve never seen any the potential for next-generation tools to evolve that will greatly technology proliferating so quickly as cell and gene therapy. simplify the process and make it even safer. Any example you wish to cite? Can you highlight these bottlenecks? With reference to potentially disruptive technologies, I’d point to The biggest one involves cell engineering and the production some trends we are seeing. Shorter processing time, more specific of viral pathways. Most regenerative medicines rely on viruses to cell selection, cell engineering for enhanced potency and control, empower the cell to ensure the therapy has the potency to achieve process automation and trends in artificial intelligence and deci- its therapeutic effect. The form of the viral vector will vary, but phering biological meaning – all are areas of interest to us. overall the process is very inefficient. We are analyzing every step of the workflow to secure incremental improvements. The biopharma C-suite always looks at the big picture. How The game is on for some next-generation tools. Within the next would you summarize the field of regenerative medicine to 10 years I am convinced we will see a simplified, cost-efficient way this audience of decision-makers? Why does it matter for the of delivering the same genetic information to a cell that will obviate future of biopharma’s business model? the necessity for any form of viral intervention. This step will even- I’d say this is one of the few fields in medicine that is truly trans- tually be eliminated. The likely format is already being developed. formative. The way we are now thinking about the biology of the cell Perhaps best known is the CRISPR/Cas9 system, but others such as and the gene, and how engineering and physics interact with biol- the zinc-finger nuclease, the Sleeping Beauty transposon system, ogy to unmask the secrets of disease and wellness, is as important and transcription activator-like effector nuclease (TALEN) are also in its implications as the digital revolution that began 30 years ago. being broadly explored and developed. Refining these technologies We are using the same concepts around circuitry and connections, will allow for easier introductions of genetic material in cells to which in the digital sphere led to all these smart devices I have on maximize potency with improved survivability. my desk that today we take for granted. We should think about biology in much the same way. Someday soon it will be routine As the field of cell and gene therapy matures, what actions to reprogram cells on an in vivo and ex vivo basis, making them are needed from the regulatory community to keep the mo- more durable and resistant to damage. Eventually, it may also be mentum of progress on track? Is the regulatory system fit for possible to endow these cells with additional or different functions purpose in keeping pace with the science and encouraging and capabilities. Some of this will pose ethical challenges or lead more innovation? to unforeseen consequences that industry and perhaps society will The willingness of regulatory institutions to recognize that have to address. But that future needs to be embraced rather than regenerative medicine requires changes in the evaluation and ap- shunned. I am convinced from the experience of the past that any proval process has been nothing short of spectacular. The FDA fast challenges can be overcome by strategic thinking and a prudent track and the legislative agenda embodied in the 2016 21st Century stewardship of the science, keeping the focus on the patient as the Cures Act of Congress have put the spotlight on this field, according ultimate beneficiary. it status as a key emerging area of medicine. Other key approval IV124151 agencies, in the EU and Japan, are moving in this direction as well,
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NEXT-GEN COMPLIANCE ENHANCEMENT: Lachman Consultant Services, Inc. CEO Talks Agility, Integrity And Harmony
Time-sensitive therapies require agility in addressing compliance issues, and growing R&D costs and product complexity call for regulatory and technical expertise that can deliver solutions. Lachman Consultants President/CEO, Frances Zipp, discusses these issues and answers questions on navigating new tech, data integrity and regulatory harmonization.
What do you feel will be the most significant regulatory-compliance challenges confronting the pharmaceutical and biotechnology industries in the US and worldwide over the next five years? FRANCES ZIPP Navigating through the new technologies with the regulators. The pace of change in industry in PRESIDENT/CEO some ways has outpaced the pace of adoption and learning within the regulatory agencies, so many LACHMAN CONSULTANTS approaches to applications and compliance are decided “on the fly,” making the landscape potentially shifting and inconsistent. For next-generation companies and products, most regulatory and compli- ance decisions, regulations and norms will have been decided by early adopters and pioneers. This could lead to unrealistic or unachievable expectations. On the contrary, the industry could also find itself facing compliance challenges as the regulators catch up to the new technology and products, potentially enacting new requirements for already established products.
Do you think regulatory harmonization in (bio)pharmaceuticals, whether regionally or glob- ally, will continue to gain pace – despite current contradictory trends such as the UK’s Brexit break with the European Union? Regulatory harmonization is absolutely necessary, and the industry will continue to be crippled in many areas if harmonization doesn’t continue. The impact of Brexit on the harmonization efforts currently in place will take some time to sort out, but the foundation for continued harmonization is already laid. All major regulatory agencies have adopted ICH standards; the eCTD format for applications is currently in use. The FDA commissioner has stated that he is requesting ICH to look at Harmonization of Standards for Generic Development. With the continued implementation of the EU/US MRA for sharing of inspection information, the number of inspections is expected to decrease; however, how inspections are conducted, and the information required to comply still differ between inspectorates so there is still progress to be made. Various industry groups are working on some efforts to increase harmonization, but it is still a slow process.
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Data are increasingly the product in today’s industry. What are the particular compliance and integrity challenges of dealing with the huge volumes of data now generated at every stage of the pharmaceutical-product life cycle? Data integrity concerns are clearly still foremost in the eyes of the regulators as well as industry. The global regulators have become more sophisticated in their approach for investigating data integrity issues during inspections. Data integrity breaches not only affect marketed products, but also affect data generated in support of applications, and this may be data that have been generated years before. Additionally, there are more and more sources of data being generated at locations not familiar with data integrity. Hospitals, clinics and early-phase research locations have all been hit with data integrity breaches. About 40% of Warning Letters issued by FDA since 2015 have data integrity lapses cited in addition to other issues.
How are recent trends in pharmaceutical product development, such as highly targeted biologics, a focus on orphan and speciality indications, or the emergence of gene and cell therapies, likely to affect regulatory and compliance issues in years to come? These new trends in therapies require industry and the regulators to become agile in their ability to address issues. For example, some individualized therapies need to be tested and released within hours of manufacture so as to get them into the patient. In the event that there Is something that needs to be investigated, the timeline is quite short, so creative compliance responses are required.
Do you feel regulatory authorities around the world are becoming more stringent/vigilant or more flexible in the face of growing product complexity and R&D costs, coupled with rising patient and health-system demand for cutting-edge therapies? In some cases, I do feel that the regulators are becoming more flexible in relation to cutting-edge therapies. The fast track approval process and the breakthrough therapies have brought many needed drugs to the market quickly and allowed companies to resolve potential compliance and/ or regulatory issues independently.
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Can Modicare Reshape India’s Health Care Paradigm? India’s new government-funded health care program expects to expand access to treatment to ANJU GHANGURDE more than 100 million families. Can it effectively deliver on its promise and also materially expand DEPUTY EDITOR, PHARMA, APAC opportunities for hospitals and pharma?
An auto rickshaw driver who suffered a heart attack but expected to be covered for secondary and tertiary care could not afford surgery was the first beneficiary from at all public and empanelled private hospitals in In- the state of Haryana to undergo an angioplasty under dia, making it the world’s largest government-funded India’s Ayushman Bharat – Pradhan Mantri Jan Arogya health care program by number of beneficiaries. Yojana (PMJAY). In another case, a wage labourer in Formally launched by India’s Prime Minister, Nar- Uttar Pradesh state, underwent a free cholecystectomy endra Modi on September 23, 2018, the scheme covers to get a stone removed from his gall bladder. about 1,350 medical procedures including pre- and post- Many such heart-warming stories featured in recent hospitalization, diagnostics and medicines. A second tweets by Indu Bhushan, the man at the helm of seeing prong of the Ayushman Bharat program is the creation through the implementation of PMJAY, India’s mam- of health and wellness centers (HWCs) to bring health moth health assurance scheme that offers hope of care closer to the homes of people. The government better health care and treatment opportunities for over expects to have 150,000 such centers within four years. 100 million families. Dr Bhushan is CEO of PMJAY and the National Health Agency (NHA) the autonomous EXECUTION CHALLENGES entity formed to implement PMJAY. All of this should be music to the ears of pharma and PMJAY, also dubbed “Modicare,” expects to provide the hospitals sector in the country – given the potential health insurance cover of up to INR500,000 ($6,842) for massive market expansion and partnership oppor- per family per year. About 500 million beneficiaries tunities, though these are still early days, and much – roughly the size of the population of the EU – are will depend on PMJAY’s implementation trajectory.
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Experts say ensuring such a mammoth scheme is up structure their business models appropriately. and running effectively will not be easy. Sub-optimal Investment bank Jefferies recently observed that health care infrastructure, a generally guarded buy- PMJAY opened up a “large, untapped market” for the in by large private hospitals, at least so far, questions health care sector, and that hospitals had been strug- around overall funding of the scheme and pricing- gling for growth for the past few years, and the new related concerns for some procedures are among some program could help address the issue. However, it of the challenges that PMJAY would need to tackle. sees selective interest from hospitals, with most stand- The Indian Medical Association, which counts over alone, non-corporate facilities and single-doctor clin- 200,000 physicians as its members, initially called ics expected to enrol, while large corporate hospitals PMJAY flawed for “conceptual deficits” and it had will need to address challenges. “On the government concerns over the low rates for certain procedures. side, financing, pricing and payment cycles are crucial. However the group subsequently backed the program, The key factor will be reducing the payment cycle to a with the government indicating that a “continual ad- few weeks,” Jefferies equity analyst Piyush Nahar said justment of benefit packages and their rates” based in a note on the scheme in Sept. 2018. on certain costing studies is proposed. Hospitals, on the other hand, will need to change Ajit Dangi, president and CEO of Danssen Consult- cost structures and capex models. “Companies need ing and a former director general of the Organization to work on cost reduction with a focus on standard- of Pharmaceutical Producers of India (OPPI), which ization and new-doctor-engagement policy to address represents foreign firms, underscored that a project this segment. The capex model also needs to change of this magnitude and complexity was likely to face by adopting a public-private partnership model,” Jef- challenges of execution particularly in a “resource- feries said, adding that non-participation could limit starved” country like India. both the medium-term growth potential and the target “This is a volume game and as shown by [leading market for corporate hospitals. hospital groups in India] Aravind Eye Hospital and Salil Kallianpur, a former executive vice president Narayana Hrudayalaya that provide quality health at GlaxoSmithKline India, now running a digital care at affordable cost; it is doable if right operating health consultancy, says that private sector hospitals procedures and packages are in place,” Dangi, also a will in due course have to buy into the scheme “one former president and executive director of Johnson and way or the other.” Johnson India, told In Vivo. Most concerns, he believes, This, he said, would happen when the government can be resolved by engaging in dialogue with the insur- either agrees to “renegotiate prices” or “convinces” the
What we haven’t seen is a proportionate bulking up of regulatory agencies that will oversee a project of this size. – Salil Kallianpur ance companies and the hospitals. “Internationally, larger hospitals to operate at lower margins. “Given pricing is decided actuarially to make it viable. Since the present scrutiny of hospital service charges, this large number of people are involved, this can be made seems more likely than the former. The inflection point viable,” Dangi said. will come when the government creates wealth in rural AB PMJAY CEO Bhushan has been quick to sug- areas either through jobs (trickling down of economic gest that the scheme has hit the ground running and progress) or through redistribution schemes. When the government means business too. On Oct. 14, he buying power becomes apparent, the private sector tweeted that PMJAY had seen over 79,000 beneficiary will not require convincing,” Kallianpur told In Vivo. admissions and that 63,600-plus claims had been He also maintained that while the INR500,000 cover submitted – of the INR1.23 billion submitted claim provided by PMJAY was “attractive,” it was unlikely to amount INR1.01 billion had already been approved. immediately convince the private sector, since it was not yet clear whether the government had budgeted ad- ON-BOARDING PRIVATE HOSPITALS equately for premiums and if reimbursement/payments Private sector buy-in is seen as critical to the success of to parties would happen on time. “What we haven’t seen PMJAY. Bhushan himself referred to private hospitals is a proportionate bulking up of regulatory agencies that as the “backbone” of the scheme. Opinion, however, will oversee a project of this size,” he said. has generally been mixed on whether large private hos- Others were more brutal in their assessment. Dr. pitals will get on board, though there is little denying Davinder Gill, CEO of Hilleman Laboratories said the the opportunities for growth provided hospitals can market dynamics were “so different” for private hospi-
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tals with patients paying large out-of-pocket expenses volume builds up they will consider entering PMJAY and hospitals enjoying big margins. “This will never as genericization of medicines is a “worldwide trend be possible under PMJAY. I don’t expect large private and the Indian government’s stated objective.” hospitals to buy into PMJAY at all,” Gill said. As of October 26, 2018, over 15,000 private hospitals FUNDING CONCERNS had already applied and around 6,000 had been em- Despite the huge potential around PMJAY, most stake- panelled under PMJAY, with the rest “in process.” More holders appeared concerned about its overarching than 14,000 hospitals were on board at the end of Oct. funding requirements. The Central and State govern- “Claims payment to the hospital are being monitored ments are expected to essentially contribute in the on a daily basis and penalties will be imposed for ratio of 60:40 towards the implementation costs of delays,” Bhushan told In Vivo in response to a query PMJAY, where states have the option to use a trust, on social media. society, implementation support agency model, or an insurance company or a mixed approach. PHARMA WATCHES INTENTLY Gill said that several experts were already writing PMJAY clearly signifies improved access to health off PMJAY due to funding concerns and clearly the care for millions of poor patients and is expected to road ahead would not be easy. “There is a distinct translate into huge expansion in demand for medi- possibility that as the lowest strata of Indian society cines. Pharma may not be overtly front and center leads healthier lives, that as a country our economic at this point in Modicare, but leading companies ap- growth extends past the 7-7.5% growth we are witness- pear to have a sharp eye on the developments. Early ing today. Indeed, that’s the very premise of PMJAY. gains are expected to largely percolate to suppliers of If that happens, then funding concerns will be some- cost-effective generics as volumes surge, but partner- what addressed. However, I do not believe they will ship opportunities and efforts to expand the scope of completely go away,” he said. Modicare are aspects that many frontline firms appear Kallianpur, though, offered a different take. He to be discussing. suggested that the political will (either driven by the Novartis AG’s top brass said it would be important approaching general elections in 2019 or by a genuine for it as a company, and for the industry more broadly, need to reboot India’s health care) had been to get to work with the Indian government to see how cover- started and “build as you fly.” Such an “entrepre- age under Modicare could be expanded, and to seek neurial approach” for a project of this scale explained the opening of the program to innovative medicines. the surrounding paranoia but was also a “breath of “We think Modicare is a commitment to those most vul- fresh air” in a bureaucratic and indifferent country nerable probably, but the industry as a whole is going like India, he declared. “I would safely assume that to have to work in partnership to try and make sure that budgetary provisions will be raised for tax-financed volume is accessed appropriately. And where patients universal health care. It may well happen in 2019 as are still suffering, they get access to more innovative incumbent governments are less worried about fiscal medicines after that,” Paul Hudson, CEO of Novartis deficit expansions and focus on populist issues in an Pharma AG, said in a recent interview in India. election year. Of course, much of it will depend on how Furthermore, Pfizer Inc.’s Indian arm said that oil prices behave,” Kallianpur added. over a longer term, Ayushman Bharat should look to There have been sharply varied estimates around expand its scope to cover the full patient journey – the cost of PMJAY, with some local media reports from disease awareness, through pre-hospitalization referring to an annual requirement of INR120 billion to post-operative care. It should also look to work with towards the scheme; Jefferies estimates the financing and improve the Pradhan Mantri Bhartiya Janaushadhi requirement to be more like INR250-350 billion for the Pariyojana (an initiative which provide cut-price ge- insurance coverage, with monitoring costs seen as an nerics) to “fill the void” of medicine coverage outside extra element. tertiary care settings. PMJAY clearly faces a fair share of challenges but “Additionally, it should provide incentives to insti- also holds unprecedented promise for millions of tutions to encourage the use of drugs made to higher Indians pushed into poverty due to catastrophic ex- quality standards, such as WHO GMP, in much the penditure for hospitalization and treatment. If it can same as it provides incentives through higher package deliver effectively on its promise, patients, and the rates to National Accreditation Board Hospitals and health care industry, could stand to gain. Healthcare Providers (NABH) accredited hospitals,” IV124149 Pfizer India said in its latest annual report. Dangi maintained that initially insurance com- panies are likely to insist on prescribing generics to keep the costs down under PMJAY and hence large pharma companies are unlikely to benefit, but as the
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Will Recent Excessive Pricing Cases Lay Down Precedent For
Future? IAN SCHOFIELD EXECUTIVE EDITOR, The recent upsurge in cases of high drug prices being pursued by competition authorities in PHARMA, EUROPE Europe could help to lay down some markers for judging what is an “excessive” price in future. At the same time, Brexit could see the UK and the EU begin to drift apart in terms of how they apply competition law to pricing issues.
European competition authorities have traditionally investigation in May 2017. This was the commission’s been wary of pursuing cases of “excessive” or “unfair” first such probe in the pharmaceutical sector. medicine prices, not least because the burden of proof The commission was informed that Aspen had en- is high and it is generally accepted that action should gaged in “price gouging” by “imposing very significant be started only in exceptional cases. Change is in the and unjustified (excessive) price increases of up to sev- air, though, and the number of investigations under- eral hundred percent for certain cancer medicines that taken has risen noticeably in recent years. it acquired after their patent protection had expired,” Decisions expected over the next year or two for re- according to Miotto and Arts. cent cases brought forward by authorities are expected The Aspen case involves “very specific circum- to help clarify the criteria for determining whether stances,” they say. It relates to off-patent medicines, prices are “excessive,” although they may not manage whose pricing is not regulated, unlike that of original to lay down the “bright-line rules” that regulators and medicines, and it appears that “market forces have companies would like to see. failed to remove or sufficiently erode a monopoly posi- Meanwhile, the European competition law landscape tion.” There also “appears to be evidence” that Aspen is facing something of an upheaval after the UK leaves exerted “considerable pressure” to impose the price in- the European Union on March 29, 2019. The UK has said creases, including threatening to withdraw, or actually it plans to keep its competition law aligned with that withdrawing, the products in certain member states. of the EU, but it is possible that EU law might begin Another European competition case at a national lev- to diverge. If this happens, according to one lawyer, it el is the landmark Pfizer Inc./Flynn Pharma Ltd. case would leave UK law “frozen in aspic” and be both “in- where the companies were fined a total of nearly £90 convenient and costly” for pharmaceutical companies. million by the UK Competition and Markets Authority What the competition cases currently underway in the drug pricing area have in common is they involve medicines for which prices were raised sharply after they lost patent protection. According to Francesca Miotto and Dirk Arts of law firm Allen & Overy, these “appear to be cases where markets have failed to self-correct and regulatory intervention has been deemed not to be possible or ap- propriate. They also appear to involve conduct that led to very significant increases in public spending. In this respect, they reflect the application of stringent enforce- ment screens, whereby intervention is recognized to be justified in exceptional cases only.” One example is the Aspen Pharmacare Holdings Ltd. case, which involved price rises on several patent-ex- pired anticancer drugs acquired from GlaxoSmithKline PLC in 2009. Following the conclusion of an Italian case against Aspen, which in 2016 was fined by the Italian competition authority for applying “unfair prices with increases of up to 1,500% for life-saving and irreplace- able drugs,” the European Commission began its own
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LESSONS FOR THE FUTURE? A key question is whether, given their very specific nature and circumstances, the outcomes of these cases will lay down any precedent for dealing with future cases of alleged excessive prices. While they should provide some clearer guidance on how to calculate the benchmark price in pharmaceuti- cal markets, “it remains unclear to what extent these cases, which are unavoidably facts-specific, will actu- ally yield bright-line rules on which market operators can rely when determining their market strategies,” say Miotto and Arts. John Schmidt of law firm Arnold & Porter is inclined to agree. “The current spate of cases will set out relatively clear boundaries as to how you can increase prices in areas where there is a market imperfection that has been manufactured by the company itself,” Schmidt said in an interview. “In the Aspen case the company threatened to withdraw from the market unless it got its higher price. That clearly is red light territory, not only in Italy but probably elsewhere (CMA) in 2016 for abusing a dominant position and im- as well. Increasing your prices simply because you posing “excessive and unfair” increases on the generic can – this will be an issue where there is some other epilepsy drug phenytoin sodium. The case was widely involvement in the process of creating some form of seen as sending a clear message to companies about shortage or market imperfection.” the need to ensure compliance with competition law. It’s not yet clear when these ongoing cases will be That case is far from over. In June this year, following resolved. “Pfizer/Flynn will, I suspect, produce some an appeal by the companies, the Competition Appeal results next year,” Schmidt says. “There is a question Tribunal (CAT) ruled that the CMA had not correctly as to whether it goes to the Court of Appeal. The CAT applied the legal test for finding that prices were unfair, has refused to give leave to do this, but companies as set out in the United Brands case. The CAT said the can go directly to the Court of Appeal and seek leave CMA’s overall findings on abuse of dominance were to appeal. We will hear whether they have done that; “not well founded as a matter of law and assessment it may well happen. If it goes to the Court of Appeal, and cannot be upheld.” (Also see “Court Ruling On Pfizer will we get a judgment next year? We may not.” Price Hikes Could Delay Other Investigations, Warns UK As for the commission’s case against Aspen, Schmidt Competition Authority” - Pink Sheet, 8 Jun, 2018.) says: “Pharma cases usually take a number of years Miotto and Arts told In Vivo that it was “clear from to resolve. This is a little easier as it only involves one the CAT’s summary of the judgment that it considers company, unlike the pay for delay cases that have that price control is better left to sectoral regulators, taken five, six or seven years to come to a decision. and that cases of excessive pricing should remain rare. My feeling is that they will probably take longer than If, however, competition authorities decide to pursue next year to finalize the decision – the fact that they such cases (according to the CAT, there is no reason, haven’t had many excessive pricing cases means they in principle, why competition law cannot be applied), will want to get it right.” the CAT stresses that this must be done on the correct legal basis and the analysis of evidence must be sound.” EXTENSION TO PATENTED DRUGS? The CMA is also investigating two other cases involv- Although these cases have concerned off-patent ing de-branded medicines. In March 2017, it alleged that medicines, it is not clear whether the lessons learned Actavis UK had breached UK and EU competition law will have any bearing on issues around the prices of by charging “excessive and unfair” prices for hydrocor- patented products. tisone tablets. It cited price rises of more than 12,000% Miotto and Arts say that the significance of the cur- compared with the price of the branded version that was rent cases would be limited to situations involving sold by a different company before April 2008. off-patent medicines. “The benchmark price and un- In addition, it is pursuing Concordia International fairness assessment is arguably more complex where Corp.over six medicinal products that it said were patent-protected medicines are involved, given how acquired, de-branded and included in “suspected anti- costly and complex the R&D process and uncertain competitive agreements and/or concerted practices and the market returns are, and the heightened risk that suspected abuse of dominance.” enforcement action at this stage in a medicine’s life
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cycle may negatively affect innovation incentives.” appetite here in the UK to change our competition law Nonetheless, there is evidence that competition au- away from what Europe is doing.” thorities may well have patented drugs in their sights What is more likely, Coulter says, is that Europe too. Action in this area seems to be spearheaded by will move away, “and there may be big changes in the Netherlands. areas where we are not expecting them. I think that In March this year, the Dutch Authority for Consum- almost certainly if the two systems come apart in ers and Markets (ACM) published a working paper this area of excessive pricing, or more generally, it on “Reconciling competition and IP law: the case of will not be driven by the UK. It will be driven by the patented pharmaceuticals and dominance abuse.” In EU continuing to evolve and us being frozen in aspic a nutshell, it states that despite the general caution because of Brexit.” over applying EU competition law to patented phar- This, he says, could be “inconvenient and costly” for maceuticals, there was “growing evidence that the companies. “If you are a big pharmaceutical company, enforcement of competition law in a patent context and if you do the same thing across the EU including can both be justified and carried out in a manner that the UK, you may find it is legal in one country and not is compatible with IP law.” in another. The way to avoid that might then be for the Miotto and Arts say the paper indicates that the ACM company to say that it will have to do something dif- “sees no objection in principle to a finding of excessive ferent in the UK. But given the international nature of pricing in cases where the relevant drug is still patent these products and almost all the companies involved, protected and even suggests a possible framework this will be very hard. Certainly, it is a real example of for deciding which excessive pricing cases involving a potential Brexit issue for industry.” patented medicines to pursue.” Schmidt says that after Brexit “the law will not The paper was produced by a special pharmaceuti- change significantly in the short term. The UK has cal task force set up by the ACM. Schmidt says this is been the thought leader and initiator of new cases in “a sign that they are taking pharma cases on and are the excessive pricing area, and the CMA will want to continuing to monitor pharma cases … The interest- continue doing that. It will continue to be seen as a ing point here is that they are looking at the spate of strong independent thought leader whether inside the current cases, but they are also looking at those that European competition network or outside.” are not purely in the realm of patent expired products However, in the medium to longer term the CMA where, for whatever market imperfection reason, could take a different approach to how it looks at some prices go up by multiples. They are saying we can also of the cases and how it applies some of the EU case get involved in cases where there is ongoing patent law, “because then it will no longer be strictly bound by protection. Simply the fact that a product is still under EU precedent, depending on the Brexit deal,” Schmidt protection doesn’t exempt it from the application of adds. “If the EU takes a case that will no longer relieve competition law.” the CMA from its jurisdiction, it could be investigated in parallel by the UK after Brexit or the transitional BREXIT period. It may want to show that it can work as an Of course, the shadow of Brexit falls on competition equal partner to the EU.” law as it does on countless other aspects of the life sci- And what of the future of individual cases that ences sector. What will happen to UK competition law straddle Brexit? As for the GSK paroxetine case, for once the country leaves the EU – and what will become example, Coulter says: “The questions have gone to of any “live” cases still ongoing as of March 29, 2019? the CJEU, but they have not been answered yet. We Much will depend on what deals are eventually have heard that the CJEU will answer them come implemented. If the withdrawal agreement is passed, a what may, even if it doesn’t do so before Brexit. It is transition period will kick in until the end of 2020, dur- not clear what impact that will then have after Brexit, ing which time EU law (including any new legislation) because those views will be directly relevant if they will continue to apply in the UK, as will the jurisdiction are accepted as precedents.” of the Court of Justice of the European Union (CJEU). In the Aspen case, he points out that once the Eu- What if, though, the UK leaves without a deal? “The ropean Commission takes over a case, EU national UK has said it will take into account EU law up to the competition authorities are not able to. However, Brexit date on a no-deal exit, but it is not clear how “after Brexit the CMA could do it itself. I don’t know they will take into account EU law developed after that whether there is a UK element to the case, but if there – and that will be pretty important,” says Angus Coul- is the CMA would almost certainly take it up. This is ter of law firm Hogan Lovells. “We will be consciously an area they are interested in, they know the Italian separating ourselves from European law – this is an authorities definitely had a case, and they have the area with a lot of live cases, and as that law changes European Commission work to build on.” we may find that we are in a different place. Whenever IV124156 I have spoken to people at the CMA, there is really no
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Brexit And Cooperation: Insights From Danish Medicines
MAUREEN KENNY Agency Head Thomas Senderovitz EXECUTIVE EDITOR, PHARMA, EUROPE It was inevitable that Brexit would be the key theme of an interview with Danish Medicines Agency head, Thomas Senderovitz, earlier this year. The senior European Union regulator oversees one of the agencies that has taken on new staff to help deal with the impact, in drug regulatory terms, of the vote by the UK in June 2016 to leave the EU. He also chairs the management group of the EU Heads of Medicines Agencies network.
These are important times for European collaboration, RELOCATING RESPONSIBILITIES says Thomas Senderovitz, head of the Danish Medi- At EMA level, the agency has completed the reallocation cines Agency. On a macro level, the whole of the EU to the EU27 member states of more than 370 centrally is being challenged, “amplified by Brexit,” and on a authorized drugs for which the UK was rapporteur or micro level, Brexit is causing a huge shift in dynamics co-rapporteur, although the new rapporteurs and co-rap- and in the ability to deliver, he explains. porteurs will only take full responsibility for the products The situation regarding Brexit is ex- at the end of March 2019. The MHRA still partici- tremely fluid and it is impossible to say what pates in EMA activities and will continue to do the UK’s future relationship with the EU so until the UK withdraws from the EU, but UK will be when the country leaves the trading representatives are no longer taking on any new bloc on March 29, 2019. The same applies rapporteurships or co-rapporteurships relating to the future relationship of the UK agency, to the evaluation of new drug applications. the MHRA, with the EU regulatory network. At the member state level, national agencies Among other things, Senderovitz talked THOMAS are having to take over from the UK the role SENDEROVITZ about the preparations that two pillars of HEAD OF DANISH of reference member state for thousands of that network – the European Medicines MEDICINES AGENCY products approved via the EU’s decentralized Agency and the national competent authori- or mutual recognition procedures. Senderovitz ties (NCAs) in the remaining 27 EU member states – are says a significant number of national agencies, including making for life without the UK. his own, have taken on additional staff and invested ad- Pink Sheet executive editor Maureen Kenny inter- ditional resources to enable them to take on some of the viewed Danish Medicines Agency head Thomas Sendero- work for which the UK was previously responsible. Some vitz soon after he was named chair of the management agencies have done what Senderovitz calls an “admirable group of the EU Heads of Medicines Agencies network. job in staffing up.” Senderovitz talked about Brexit and his plans to make the “We don’t have de facto numbers for what everyone HMA more effective. The following is a series of excerpts has actually done… but we looked at what everyone from the articles published in Pink Sheet following the was planning to do. And while to a certain extent it’s not interview. Here is some of what he had to say: clear yet whether everyone delivered, we could see from “We simply had to plan for a worst-case scenario. the plan that we would end up with numbers that could We were obliged [to do so] for the sake of our patients. make up for the [withdrawal] of the MHRA.” We couldn’t just sit idle and say it may end up in a soft Capacity is one thing, but what about levels of Brexit. It’s worse to have not prepared than to have expertise? “We will improve our expertise,” says Sen- over-prepared.” derovitz. In terms of sheer numbers, though, he is in “It won’t be perfect on Day 1. I’m not saying it’s no doubt. “If you start adding up across the EU, we do good, but if it goes to a hard Brexit, the MHRA will not not have a capacity issue.” be able to work on behalf of the EMA and the remain- ing 27 will be able to handle that for sure.” SOFT BREXIT SITUATION “There will be challenges and it won’t be perfect, What would happen if there is a soft Brexit and, ulti- but we’ll manage.” mately, close regulatory alignment and the UK remains “Will we lose something? For sure we will and it – or becomes again, depending on the timing – a part will take time to build up, but we are not going to be of the network? in a bad shape.” “Let me be very frank. Everyone would have liked to
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be without Brexit. As a regulator, I would absolutely think it would job of supporting the network of EU NCA heads that it co-ordinates be to everyone’s benefit if the UK could be deeply involved and and oversees, with a view to making it more effective and efficient. remain in the collaboration.” The EU NCAs have an “immense responsibility towards patients “But there would have to be a changed balance. Many agencies in Europe and beyond” to make sure they have the best possible including my own have significantly increased our staffing. It wouldn’t network, he says. For that to happen, Senderovitz believes that be fair if I had to go out and let people go because the UK now ends “first and foremost we need to look at the very raison d’être of up being in the network. We’d have to find a way of solving that.” the management group and permanent secretariat [to ensure] “I am not talking for EMA, but if [the UK is] going to be engaged... we facilitate HMA as an institution to the best possible extent.” then my view would be that the UK agencies would have to accept More broadly, the HMA network as whole needs to ask itself that they can’t have the same amount of work as before. It simply some fundamental questions. Are we on the right track? Is our can’t happen.” vision the right vision? Are we too ambitious? Are we under am- “If we had to stop and rewind everything it would be a big challenge. bitious? Do we try take on too much? Who are our stakeholders? It would require some interesting talks so let’s see what happens.” Are we able to achieve what we set out to deliver? Are national agencies doing enough to prepare for Brexit? “I The Danish agency head notes the complexity of the make-up have to assume people are doing everything they can,” Senderovitz of the EU medicines regulatory network. There is the European says. But there is a caveat. They’re doing it, he says, “within the Commission, the EMA, “which depends so much on the expertise framework and with the resources they have.” of the member states,” and the NCAs, “each of us with our national hat on, if you may, with different agendas, different priorities, BRINGING SMALLER COUNTRIES INTO THE FOLD different political set-ups and different cultures.” The HMA works Senderovitz is a member of the EMA management board and well but there is room for improvement, Senderovitz says. was on the preparedness group at the EMA that designed the “I don’t want to go into detail here, but I do think we run the algorithms for how the UK portfolio would be distributed. There risk of wanting to achieve too much and solve all the problems was, he says, “a really good debate” on how to bring more smaller of the world and at the end of the day we might solve none. I’m countries more into the fold. exaggerating here but it’s the same for anyone working with a The challenge when redistributing the work was, and still is, strategy… everything seems meaningful but possibly we don’t “not to replace one UK with another UK,” but to spread that work have the bandwidth to solve everything. We have to be very clear more broadly and get more of the smaller countries “also activated on how we achieve what we have to achieve and then on which and inside the process.” other points [we will have to say] we can’t solve these, at least “We were quite strong on how we should make sure that smaller not in the form of HMA, as one organization.” countries who hadn’t had many rapporteurships would also be Senderovitz notes the huge shifts taking place in areas such involved, maybe for simpler assessments, like generic assessment, as science and technology. It was, he accepts, a challenge for which wouldn’t require a full-scale set-up like you’d need for a regulators to keep up with scientific advances such as CAR T-cell complex assessment,” Senderovitz notes. therapies and CRISPR gene editing technology. At the same time, A new balance perhaps, but only to a certain degree. Some coun- he observes, there are other big, important themes that are not tries will still be bigger and the bigger countries to a large extent limited to innovations in science. These include availability of will take on more of the newly available work than their smaller medicines across the European network, substandard and falsi- counterparts. “It’s not wrong, it’s a fact of life. It would be a surprise fied medicines – “which is increasingly challenging us” – and if they didn’t move to strengthen their position,” he says. cybersecurity. “I wanted to bring to the table [the idea that] we Becoming more involved is one thing, but Senderovitz says need to work very hard to find common ground amongst all the it is naïve to expect that scientific expertise will ever be spread member states and to take care of this very important collabora- equally across the member states. “Let’s be clear. You will never tion and make sure it’s ready for the future.” have small countries with the same ability to build expertise like The EMA cannot solve it all by itself, Senderovitz says, particu- Germany, for instance. It’s never going to happen. Let’s not fool larly not now when it’s struggling to cope with the huge changes ourselves that we’ll have exact same distribution across every brought about by the UK’s decision to leave the EU. member state. I don’t even think that’s a smart idea.” It makes The EMA expects to lose at least a third of its approximately more sense, he says, to work towards there being more clusters 900 employees as result of its forced relocation from London to of regulatory excellence than to try to build “a full-scale set of Amsterdam when the UK withdraws from the EU at the end of expertise” in every single country across Europe. March 2019. The agency is having to divert considerable resources Specialization is already happening to a certain extent. No single to enable it to focus on addressing the implications of Brexit and country can master all areas or will have access to all expertise and the move. “We have to get this to work together,” he says. “I feel all necessary data, Senderovitz says. “Even the big countries… can’t an obligation and I also feel a passion for it.” Senderovitz stresses do everything by themselves. Even the US Food and Drug Admin- the “completely voluntary and non-binding” nature of the HMA. istration cannot solve everything by itself.” There’s no formal obligation to work together but “we all think it’s very important we can act and speak on certain areas as one. MAKING MORE OF THE HMA In other situations, we can’t speak as one. It’s about finding the Senderovitz took on the role of chair of the HMA management group common ground,” he emphasizes. in March 2018. Among other things, he thinks group could do a better
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Liposomes And Lipid Nanoparticles As Delivery Vehicles For Personalized Medicine
WHAT ARE LIPOSOMES, AND HOW ARE THEY USED can add novel functionality – enabling targeted entry of liposomes IN DRUG DELIVERY? into cells, either via antibodies or receptor-targeted ligands. Liposomes are specialized delivery vehicles that serve two main Typically, liposomes are manufactured as sterile injectables for roles in enhancing the capabilities of active pharmaceutical delivery to the bloodstream, and release of the drug takes place ingredients (APIs). First, they can shield a drug from detection when lipid envelopes break down – which can happen in extracel- by the body’s immune system, mimicking biological membranes lular or intracellular environments. Various strategies have been and giving the drug more time to reach its intended destination. employed to design conventional liposomes with triggered-release Second, they serve to help solubilize highly lipophilic drug mol- capabilities, causing the liposomes to release the encapsulated ecules or modulate the distribution of the API throughout the body API or “cargo” based on a stimulus response. – minimizing side effects and enhancing the product safety profile. Formulations geared for release in intracellular environ- Liposomes possess a unique vesicular structure, composed ments can include pH-sensitive lipids that change the liposomal of a lipid bilayer that forms in the shape of a hollow sphere en- structure or degrade within acidic compartments, enabling the compassing an aqueous phase. As such, any “cargo” of interest release of the encapsulated drug. Alternatively, thermosensitive can be encapsulated within either the aqueous compartment or photosensitive components are sometimes included to enable (if it is water-soluble/hydrophilic) or within the lipid bilayer (if breakdown and structure modulation due to changes in tempera- fat-soluble/lipophilic). ture or reaction to light of certain wavelengths. Some of the primary lipids used to make liposomes are phos- pholipids and sphingolipids. These two categories of lipids are LIPOSOMES VERSUS LIPID NANOPARTICLES unique in terms of a head group that is water-loving/hydrophilic Liposomes and lipid nanoparticles (LNPs) are similar by design, and a tail group that is water-hating/lipophilic. Due to their am- but slightly different in composition and function. Both are lipid phiphilic nature, these molecules spontaneously self-assemble nanoformulations and excellent drug delivery vehicles, transport- to form liposomes and other unique 3D structures when added ing “cargo” of interest within a protective, outer layer of lipids. In to aqueous solutions. The shape or morphology of the 3D struc- application, however, LNPs can take a variety of forms. tures is dependent on a variety of different factors – for example, lipid composition, temperature, pH or the presence of other buffers, salts and sugars in the water.
HOW DOES A DRUG INTERACT WITH THE BODY AND BECOME AVAILABLE FOR USE WHEN IT IS FORMULATED AS A LIPOSOMAL DRUG PRODUCT? In recent years, liposomes have attracted significant attention as a trusted class of drug delivery vehicles. Their self-closed structures can encapsulate multiple drugs at once, protecting enclosed cargo from hydrolysis and breakdown. Additionally, targeting proteins and surface functional ligands on the outer shell of the lipid bilayer
100 | In Vivo | December 2018 CONTRACT MANUFACTURING
LNPs are liposome-like structures especially geared toward en- to as viral gene delivery. Non-viral gene delivery, however, has capsulating a broad variety of nucleic acids (RNA and DNA), and become popular over the last 20 years due to enhanced safety as such, they are the most popular non-viral gene delivery system. profiles, lower rates of adverse immunogenic reactions and ease Exelead develops and manufactures LNPs to encapsulate different of manufacturing. One of the primary drivers of this movement types of genetic payloads including siRNA, mRNA and saRNA. has been the development of lipid and polymer-based carriers, Traditional liposomes include one or more rings of lipid bilayer of which LNPs are the most popular. surrounding an aqueous pocket, but not all LNPs have a contigu- LNPs used to deliver genes are primarily synthesized using cat- ous bilayer that would qualify them as lipid vesicles or liposomes. ionic, or positively-charged, lipids that associate with anionic, or Some LNPs assume a micelle-like structure, encapsulating drug negatively-charged, nucleic acids. Other lipid-based components molecules in a non-aqueous core. can also be added to modulate the delivery efficiency and location release of the genetic cargo. PEGYLATION OF LNPS AND LIPOSOME-LIKE DRUG DELIVERY STRUCTURES AN EXPANDING FIELD PEGylated phospholipids – which consist of a polyethylene glycol While there is significant work ongoing in the development of (PEG) polymer covalently attached to the head-group of a phos- controlled-release, nano-compartmentalized medicinal agents, pholipid – are used in many lipid-based drug carriers primarily liposomes and LNPs are especially promising options. These because they offer what is known as a stealth effect to the drug structures provide a unique, naturally stable, cell-like morphol- product as it circulates within the body. The human immune ogy for nanomedicines, and are poised to progress toward more system is driven to protect the body from any foreign object, and advanced therapeutic strategies. medicinal nanoparticles are no exception. To allow more circula- Since liposomes were first proposed as a drug delivery system tion time for cargo molecules to reach intended diseases sites, PEG in the late 1960s, variations in structure and functionality have is added to shield these nanoparticles by preventing blood plasma emerged, providing valuable advancements in terms of disease proteins from absorbing into the liposome surface. targeting. LNP drugs have cropped up across the pharmaceutical industry as therapies designed to deliver anticancer agents, anti- biotics, gene medicines, anesthetics and anti-inflammatory drugs.
APPLICATIONS IN PERSONALIZED MEDICINE – A NEW ERA IN THERAPEUTIC STRATEGIES With the advent of personalized genetic therapies, doctors and scientists can effectively tailor an active pharmaceutical ingredient – often RNA or DNA – to match the specific disease profile of a particular patient or small group of patients. This approach to hyper-specific disease targeting increases efficacy and decreases unwanted side effects for groups of similar patients.
LNPS AS DELIVERY VEHICLES FOR OLIGONUCLEOTIDES Because so much of the growing field of personalized medicine is focused on genetic therapies, LNPs have become particularly useful as a drug delivery platform. Any oligonucleotide could The second benefit of PEGylation is a boost in stability for lipo- theoretically be encapsulated within a liposome or LNP, but siRNA some-like nanostructures. Conventional liposomes, particularly are currently the most common cargo. those smaller than 200 nm in size, can be unstable on their own In theory, segments of siRNA can be designed to silence any and tend to fuse with each other to reduce surface tension. One gene, which is an exciting concept for both doctors and research- way drug manufacturers have learned to overcome this problem is ers. Unfortunately, delivery of free, unencapsulated RNA into by covering the exterior of liposomes with polymers such as PEG. human cells is difficult, as they are large, unstable in serum and These stealth-equipped nanoparticles have resulted in a new prone to nuclease degradation. generation of liposomal formulations and multiple clinically- LNPs have provided a solution to this problem by providing approved products. PEGylated liposomes and LNPs are currently flexible and easy means of encapsulation, protecting the siRNA the new paradigm for most cancer therapeutics. segments until they reach their intended destination and facilitat- ing their delivery into target cells. LNPS IN GENE THERAPY For a long time, the most effective way to deliver gene-based thera- Read the full white paper at https://www.exeleadbiopharma. peutics to human cells was to use a virus that had been modified com/articles (Full link: https://www.exeleadbiopharma.com/ to carry medicinal cargo rather than harmful, self-replicating articles/liposomes-and-lipid-nanoparticles-as-delivery-vehicles- genes. This method is still occasionally used today, and is referred for-personalized-medicine)
December 2018 | In Vivo | 101 CONTRACT MANUFACTURING
CTD Section 3.2.P.1: electronic paper The drug product, ProQuit (Number-456) is a colourless concentrate for solution for injection containing 5 mg/mL Qdrug. The concentrate for solution for CTDinjection Section is pack ed3.2.P.1: in a glass tabularvial, data with a minimal extractable volume of 2 mL. Product name: ProQuit The concentrate for solution for Manufacturedinjection is to be dose diluted form: with the concentrate for solution for injection solvent water for injection prior Concentration:to administration . 5 mg/mL Administrable dose form: solution for injection Strength/Concentration: 500 mcg/mL One glass vial of the concentrateActive for soluti substance:on for injecti on is Qdrug co-packed with one glass vial ofColour: solvent in a carton box. colourless (clear) ID number: Number-456 Primary container type: glass vial Quantity in primary container: 3 mL Minimum extractable volume: 2 mL Seconardary container type: carton box Quantity in seconardary cont.: 1
FDA Looks To Strengthen, Speed Drug Reviews With
BOWMAN COX Flow Of Quality Data EXECUTIVE EDITOR, PHARMA, US New Approach Would Overcome Legacy Burden Of ‘Electronic Paper’
Lift the burden of paper on drug quality reviews and the pace of innovation is no longer a problem for structural engineers or couriers – or even print or electronic document rooms. The focus at the US FDA is now on enabling direct transmission and analysis of critical quality data.
Freed from the burden of paper reviews, the US Food A SINKING FEELING and Drug Administration is plotting an escape from The agency can trace its paper burden to 1960 when, after legacy free text that burdens electronic reviews with drug reviewer Frances Kelsey prevented US birth defects from quality narratives. thalidomide by asking lots of questions, the denied ap- As innovation accelerates, the time required to write plication and review documents, engorged with answers, and read these chemistry, manufacturing and controls went into a storage room down the hall. narratives has become a luxury manufacturers and regu- Application and review files grew after Congress re- latory authorities can ill afford. Too often, the future of acted to that near miss in 1962 by requiring sponsors to medicine that user fees and personalized breakthrough prove safety and efficacy as Kelsey had demanded for therapies are delivering must wait on CMC reviewers thalidomide – and by requiring reviews and inspections poring over narrative relicts of the age of paper. to assure quality. Over time, ever-larger applications The agency aims to switch from text to data where wound up in document rooms stacked one over the other possible, and build analytics for swifter, surer reviews. at the FDA’s Parklawn Building in Rockville, Maryland. The FDA hopes to manage quality risks across products This became a problem over the next few decades, and facilities with its emerging data-centric approach in former FDAer David Hussong recalled at a recent indus- a way that it never could on paper. try conference: “The combined weight of all these docu-
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ment rooms with the applications was pushing the building down.” harder; reviewers wind up instead “just focusing on what they have In reaction to the issue, the agency’s Center for Drug Evaluation at hand and their expertise,” she said. This can lead to subjective re- and Research has begun looking into switching to electronic files. views, inconsistent application of quality standards, quality failures and drug shortages, she said. That is why the FDA is developing a THE WORLD OF PAPER quicker, more data-oriented approach to quality reviews. As the world of paper endured, contractors were putting 130 miles a The goal, as Mary Ann Slack, strategic programs director for the day on agency vehicles in twice-daily courier runs transporting docu- FDA’s drug center, put it, is to “move away from what we have now, ments between the FDA’s new White Oak Campus in Silver Spring, which is electronic paper, to something that’s more like computable Maryland, and nearby agency storage facilities like the one on Am- data and is consistent.” mendale Road in Beltsville, Maryland. That is the warehouse with the loading dock where trucks were delivering paper drug applications. The goal is to “move away from There was the constant work of putting some paper submissions into colored jackets and routing them for alphabetical shelving, while what we have now, which is scanning others and running them through text recognition software. And there was the barcode team that would fan out every night electronic paper, to something into reviewers’ offices with handheld Opticon scanners to inventory all the jacketed, color-coded review documents in sight, revisiting that’s more like computable more than 4,000 offices every month to help people locate docu- ments they might need. data and is consistent. A GRADUAL TRANSITION By 2009, paper submissions were falling 10% a year, while electronic FDA’S ANSWER: KASA submissions were increasing 13% annually, procurement documents The agency’s answer to the problem of free text is to replace it, to show. But it was not until 2013 that the FDA began receiving more the extent possible, with knowledge-aided assessment and struc- electronic than paper submissions. And when the agency hired a new tured applications, or what it calls KASA. The FDA’s Andre Raw, document management contractor on a contract from 2015-2020, it was considered the driving force behind the agency’s KASA initiative, with an eye to keeping a foot in both worlds. Citing “major shifts” in explained to the advisory committee how it enables what he calls submission and record keeping processes “over the last quarter cen- structured risk mitigation. tury,” the agency said the contract would help it move “from a paper- A KASA review would involve assessing a drug product’s inher- centric agency to a media neutral information-based organization.” ent risk by scoring each critical quality attribute (CQA) using failure But the switch from paper would accelerate with legislative man- mode, effects and criticality analysis (FMECA), Raw said. dates to require electronic submission for all new drug applications, FMECA analysis yields a risk priority number for the inherent risk abbreviated new drug applications and drug master files by 2017, and of each CQA based on probability, detectability and severity of harm. commercial investigational new drug applications by 2018. The KASA approach takes the additional step of presenting reviewers The paper era was grinding to an end. In 2013 alone, agency con- with drop-down menus of risk mitigation measures firms could take tractors shredded 84,000 volumes of documents and retired another for each CQA. Reviewers would select the approaches to mitigation 100,000 to the Federal Records Center in Suitland, Maryland. FDA sponsors proposed to use. They would also describe in a related text contractors would scan their barcodes one last time before the records field how the sponsor would apply the approaches. There also would center hauled them off in 8,000 boxes that year. be a link to supporting information in the application. For example, a firm could improve detectability with stratified THE BURDEN PERSISTS WITH ELECTRONIC TEXT sampling, mitigating against the high risk of a content uniformity As CMC reviews gravitated toward the FDA’s electronic document failure that is inherent in a low-dose drug. Raw said the agency has room, the burden of paper changed. developed a prototype of the software and is piloting it with reviewers. CMC reviewers might hunt for relevant documents by browsing The KASA approach will make it easier to compare the quality of a electronic tags document room staff attached to them or by searching new drug and its generics, Raw said. While inherent risks would be the for keywords in them, much as bar code team members might have same, mitigation approaches could differ in number, type and overall waved their flashlights across empty offices in search of stray paper effectiveness, which reviewers could see by glancing at auto-generated review documents. But no matter how they are found, the documents tables. The KASA system would generate a database of acceptance still confront reviewers with the problem of free text. criteria tolerances that reviewers could use in judging applications. Applications come to quality assessors as narratives they retell If proposed mitigation approaches leave residual process and facil- in 100-page-plus reviews, Susan Rosencrance of the FDA’s Office of ity risks, the FDA would plan pre-approval inspections focusing on Pharmaceutical Quality told the Pharmaceutical Science and Clini- those risks. The agency also could allocate surveillance resources in cal Pharmacology Advisory Committee in September. Key data can line with residual product- and facility-specific risks. be hard to find in those review documents, Rosencrance said. Ele- ments of reviewers’ assessments of risks and mitigating factors are FDA LAUNCHES PQ/CMC INITIATIVE “dispersed throughout, and there’s no real easy way to capture it.” To enable KASA, FDA’s Slack said the agency is working with indus- Comparing quality risks across drug products and facilities is even try to agree on a set of extensible markup language (XML) standards
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Current State
Mix of data sources* Documents Documents Database
eDMS Cover Cover EMA
RIM -1 Form Form NL
Label Label RIM -2 DE
SAP Mod 3 Mod 3 AT
eSubs Portal Portal US * only some electronic sources many manual/oline
for sharing certain data elements within Module 3 of the ments. There also are concerns about compatibility with electronic common technical document, or eCTD, and a similar European Medicines Agency initiative. For these in Module 2’s Quality Overall Summary. reasons, the FDA is in early discussions about setting the The FDA has defined over 150 data elements so far stage for a global transition to data-oriented applications based on the International Standards Organization’s through the International Council on Harmonization. Identification of Medicinal Product (IDMP) standard. However, Slack said the agency cannot wait on the ICH The agency aims to send and receive data using Health process before moving ahead because of “the sheer Level Seven’s new Fast Healthcare Interoperability volume of data that we get.” Resources (FHIR) standard. It is working on a proof The process already looks like it will be rather drawn of concept focusing on quality specifications, first out. Even if the agency issues draft PQ/CMC guidance internally and then with a small group of industry by March 2020 as planned, it will take time to evaluate participants. In 2019, the FDA aims to prove out other comments on the draft and to follow up with a final ver- PQ/CMC components, with draft guidance slated for sion. The final guidance will take special care because March 2020. unlike most agency guidance documents, it will be legally Structured data could streamline today’s wasteful, binding, establishing electronic submission require- error-prone application and review process, Norman ments mandated by Section 745A(a) of the Food, Drug Schmuff of FDA’s OPQ Office of Process and Facilities and Cosmetic Act, added by the July 2013 FDA Safety told an FDA public meeting on PQ/CMC in October. and Innovation Act. Industry extracts information from company databases into a narrative it sends in pdf format to the FDA. Agency A NEW WAY OF THINKING reviewers retype or copy and paste data from the appli- Despite the challenges, industry is as hungry for data- cation to produce narrative reviews, also in pdf format. centric review as the FDA. “We need to have a much Then they manually enter data from the reviews into more efficient submission and review process,” Charles the FDA databases. The new approach would enable Morgan of Roche’s Genentech Inc. unit told the PQ/CMC industry to transmit 30% of eCTD Module 3 data di- meeting, citing the challenges of advancing the firm’s rectly from its computers to the FDA’s, auto-populating large portfolio of personalized drug products. the FDA databases and perhaps pre-populating KASA Rodrigo Palacios, Roche’s global head of business review templates. systems, said the upfront cost of structuring data is well worth it because of the exponential benefit. “We see the HARMONIZATION CHALLENGES bright future 15, 20 years from now, when all the health Industry response to FDA’s July 2017 preliminary proposal authorities and all industry have perfect data and we can for PQ/CMC structured data focused on three main issue share it all the time,” Palacios said. areas: IDMP harmonization, vocabulary and definitions. But the challenge of moving the industry from a paper (Also see “FDA Seeks Further Dialogue On Effort To Stan- document mindset to a digital data mindset “cannot be dardize CMC Application Data Elements” - Pink Sheet, underestimated,” he said. Lifting the burden of paper 26 Aug, 2018.) has gone beyond the capabilities of structural engineers, Industry also worries about having to send the US barcode teams or electronic document rooms. Now it will XML files when the rest of the world expects pdf docu- require changing the way people think.
104 | In Vivo | December 2018 MAKING THE COMPLEX SEAMLESS
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Tomorrow’s CRO Steps Into The Real World Last year, 187 deals took place in the pharma services realm, each one molding the acquisitive JO SHORTHOUSE company into a slightly different shape to reflect the current needs of the pharmaceutical industry. MANAGING EDITOR, One imperative continued to drive more large deals than all others: data. PHARMA, EUROPE
Some of the industry’s biggest players have used M&A DATA DEFINES DEVELOPMENT activity to grasp the big data nettle, driven by the on- The investment house Jefferies conducts a pharma ser- going emphasis on outcomes and value-based care. vices survey annually, which in 2018 revealed that 28% The merger of INC Research and inVentiv Health, of respondents believe big data is the largest oppor- in an all stock $4.6 billion deal to become Syneos tunity to improve drug development. In line with that Health, is a prime illustration of an outsourcing trend belief, 50% of respondents believe QuintilesIMS (now that reflects the specialist evidence needed for the IQVIA) has developed the most compelling strategy to successful launch of a new product. In other words: improve patient recruitment (up from 34% in 2016). real-world evidence. “We believe the development of big data, predictive
Data-Driven Deals
BUYER ACQUISITION COMPANY VALUE DATE COMPLETED
PPD Evidera Undisclosed September 2016
IMS Health Quintiles $9bn October 2016
INC Research inVentiv Health $4.6bn August 2017
ICON Mapi Group Undisclosed July 2017
PRA Health Sciences Symphony Health Solutions $530m September 2017
SOURCE: Company Reports
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analytics, and digital technologies will SPONSOR SENTIMENT of rare disease and orphan drugs, more drugs define the trajectory of drug development Of course, consolidation should mean less are being approved with post-marketing over the next 5-10 years,” the survey states. choice for biopharma’s decision makers requirements. The increased requirements “That best positions CROs that have already when debating the various merits of ser- from the payer environment and the regu- started investing and developing tools that vice providers. It could also mean that a lator environment to surround a drug with will make them a core, strategic partner to nimble service area, lauded for its ability contextual evidence about how this drug is biopharma clients.” This sentiment favors to perform adaptive trials, could become going to deliver value, and how it is going IQVIA, PRA Health Services, ICON, and slightly more sluggish while internal en- to be used in real practice, means that the Syneos Health, all of which are using real- gines chug, especially when it comes to strategies of larger CROs to buy boutique world data through acquisition, merger and adopting new technology. The sprightly data businesses is a trend likely to remain. partnership, as the outsourcing market re- hand of the slow-moving pharmaceutical “Everyone agrees that we like innova- alizes the necessity of analytics to improve beast may become slightly more hampered tion,” said John Kreger, partner at William efficiency in drug development. as companies continue to scale up. Blair. “But we’re also uncomfortable with While the adoption of big data has been Nevertheless, in its most recent out- how much it costs a consumer. The way to an ongoing theme in the CRO industry for sourcing survey, Jefferies found that 55% have both of those things dealt with is to the last few years, it seems that through M&A activity, CROs are incorporating real change. The largest example of this is There are five or six really impressive undoubtedly Quintiles’ merger with IMS, but the sector has also seen PRA Health- companies in this space and that won’t care launch its Predictivv platform and subsequently buy data analytics company change, at least not for the next 10 years. Symphony in September 2017 for $530 mil- lion. ICON’s partnership with IBM Watson, of its pharma respondents indicated that have more drugs developed and approved in EHR4CR and TriNetX allow for the lever- they viewed CRO consolidation positively. a timely way without lots of failures. There aging of millions of de-identified patient Within large pharma, that increases to 74% is a big effort to do that and that’s why we records from integrated research networks with the primary reason being increased view this as a long-term structural trend.” to instantly locate suitable participants, CRO scale. It seems the traditional view The CRO industry has always been domi- identify optimal study sites, and iteratively of CRO consolidation being disruptive, in nated by a handful of large companies with refine trial protocols in real-time. However, case of project and staff turnover, may no a large range of capabilities. The use of tech- there is more to be done. longer be the case. nology and data in drug development is still, David Windley, managing director of Jeffer- Having a drug development partner at in the grand scheme of things, very new. And ies’ Healthcare Equity Research team, said: the forefront of big data gathering and as such no major technology provider or CRO “All the CROs, apart from Syneos and IQVIA, utilization is imperative for a sponsor. has staked out their claim to lead the space. need to become more relevant in real-world However, it seems that these biopharma “I think you have two companies that evidence. They need to continue to build up clients are less likely to acknowledge the have said that they believe in this trend and capabilities in that space,” he explained. “The differences in CRO data offerings than in- will put significant resources behind it, and challenge here is that most of this is a new and vestors are. “When I talk to biopharmaceu- that’s IQVIA and PRA Health,” observed evolving space, it’s an increasing regulatory tical sponsors, and ask them about data Kreger. “But what we’ve seen from the requirement and that begets for-profit pursuit strategies in the CRO space, the answers I CRO industry over the last 20-30 years is a of a business opportunity.” get are surprisingly dismissive,” Windley gradual market share consolidation trend.” In the last 18 months, each of the seven said. “The customers seem to not perceive CROs are people businesses and have suc- largest companies (IQVIA, Parexel, PPD, much difference, or they are so inundated ceeded because of their agility in comparison LabCorp/Covance, PRA Health, Syneos with different sales pitches from the vari- to their clients. Size, in an industry like that, and ICON) have seen a change in their ous CROs, that they don’t really feel like can be a detriment, Kreger explained. “If business mix. Windley observed: “The top there’s a lot of differentiation.” some time in the future technology becomes seven are the companies that have started “Investors are always trying to work out a key differentiator, rather than people, then to invest in post-approval capabilities and how companies within a peer group are maybe you can get a leadership position,” he have the financial wherewithal to do it. different and how do they differentiate said. However, he does not think this is the They recognize the need to grow in that themselves to their customers,” said Wind- case for the clinical outsourcing market, at area and they also recognize that the real- ley. “And right now, investors perceive a least not for some time. In some industries world evidence area is growing quickly. bigger differentiation than customers do.” there are very dominant companies that have It’s growing quicker than Phase II/III, but a stranglehold on providing capability. “I it’s not doubling. It’s not like a technology MARKET DOMINANCE don’t think that’s the case,” he noted. “There growth curve, it’s not like the adoption of With drug naïve patient populations harder are five or six really impressive companies in the iPhone, it’s a mid-teens growth area. It to find and inclusion/exclusion criteria be- this space and that won’t change, at least not will grow, but at a moderate pace.” coming more specific, especially in the case for the next 10 years.”
December 2018 | In Vivo | 107 CONTRACT MANUFACTURING
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December 2018 | In Vivo | 109 GENERICS & BIOSIMILARS
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Helping Generic Customers Lower Elastomer Acquisition Costs In A Competitive US Environment
Generic drug approvals are happening faster than ever before. But significant drug shortages, a highly competitive US market, and few distributors and purchasing consortia have led to commercialization and pricing pressures for generics. West Pharmaceutical Services, Inc. aims to help manufacturers leverage quality, speed and simplicity through use of its high-performing AccelTRA™ elastomer formula to control costs and bring products to market quickly.
MILAGRO E. LOPEZ Given the authorization of the Generic Drug User Fee of generic drug approvals than ever before. This has DIRECTOR, SEGMENT Act (GDUFA) in 2012 and its reauthorization in 2017 enabled patient access to a greater number of drug MARKETING GENERICS, (GDUFA II), the approval rate of Abbreviated New products, some helping to treat life-threatening ail- WEST PHARMACEUTICAL Drug Applications (ANDAs) by the US Food and Drug ments at a lower, more accessible cost to patients. SERVICES, INC. Administration (FDA) has been a success by many In turn, that access has brought tremendous positive measures. However, this, as well as certain ongo- social benefits, some of which are readily quantified ing, significant generic drug shortages, has created in policy models. Though patients have had access an environment where generics organizations vying to a greater number of generic drugs since 2012, one for a piece of the US market experience significant could argue that the full benefits of the competitive pressures to commercialize their products quickly. forces between generic versus branded drugs remain On the one hand, GDUFA has led to a faster rate to be realized.
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On the other hand, the greater approval rate and additional laboratory, regulatory and technical highly competitive US market, along with the few support from West. Furthermore, certain customers distributors and generics purchasing consortia, have have noted that standardizing, as much as possible, led to significant pricing pressures for generic drug with one high-performing elastomer formula may products, forcing many drug manufacturers to recon- enable lower elastomer inventory costs and reduce sider their go-to-market strategies, including whether the need to carry diverse elastomer they have or need a greater mix of products to balance formulas in their product portfo- their portfolios. Today, generics manufacturers may lio. In essence, this is what be reconsidering a number of strategies to create the AccelTRA component better margins for their drug portfolios, including: program offers custom- reconsidering previously shelved branded generics ers. AccelTRA compo- plans that were seen as too costly; reevaluating 505(b) nents provide a high- (2) submission opportunities that can potentially gar- performing, qual- ner greater market share and product exclusivities, ity elastomer for- but were seen as requiring extended timelines; and mula that leverages right-sizing their regional/global footprint to diversify West’s expertise. the inherent risk in their global product portfolios. Additionally, Ac- Whichever path a generics company is contemplat- celTRA components ing, controlling costs is important. The acquisition of offer optimized lead elastomers for the primary packaging of biopharma times to help customers products is an aspect that, depending on the company speed their products to and the drug product, is often reviewed carefully. the market quickly, and aid More and more companies are considering total cost in simplicity when customers of ownership for ready-to-sterilize and ready-to-use begin wanting to standardize on elastomer products. While the need for a low-cost one platform to help lower their costs. elastomer product is often at the forefront of a To learn more about how AccelTRA components manufacturer’s buying decision, other factors, such can help your organization leverage quality, speed as technical and regulatory support or the need for and simplicity to bring products to market quickly, an elastomer compatible with multiple biopharma please contact one of our West account managers or molecules, are sometimes overlooked. visit www.westpharma.com/AccelTRA to download When selecting a West AccelTRA™ elastomer, relevant information and order samples. customers are not only purchasing a high-performing AccelTRA™ is a trademark of West Pharmaceutical elastomer product, but they’re also provided with Services Inc. in the US and other jurisdictions.
December 2018 | In Vivo | 111 GENERICS & BIOSIMILARS
Pressures On US Generics Industry Go Beyond Current
DAVID WALLACE Price Squeeze MANAGING EDITOR, GENERICS & BIO- Generics firms in the US must fight back against brand industry attempts to thwart competition SIMILARS, EUROPE as well as regulatory obstacles looming on the horizon, while continuing to grapple with ongoing price erosion, says AAM president and CEO Chip Davis
With generics filling nine out of every 10 prescriptions as regulatory obstacles, to create a generics and bio- in the US and enabling ever-growing savings that similars industry landscape that is undermining sta- totaled $265 billion in 2017 alone, onlookers could bility for local players. “Significant pressures threaten be forgiven for seeing the US generics industry as an the future sustainability of competitive generic and unmitigated success. biosimilar markets in the US,” Davis highlighted. The US market is frequently cited by other territories “Manufacturers of these more affordable medicines around the world as an example to aspire to, dem- increasingly face obstacles entering the marketplace, onstrating the opportunities and economies that are and staying in the marketplace, threatening reduced available when generics are used to their full extent savings for patients and payers alike, while simultane- and are able comprehensively to penetrate the market. ously increasing risks of drug shortages.” But, as Association for Accessible Medicines (AAM) As well as price pressure, “these challenges include president and chief executive officer Chip Davis said efforts by certain branded companies to delay competi- in an exclusive interview, the US has problems of its tion through legal and commercial exploits, changing own to contend with. market and reimbursement frameworks, and signifi- Continuing pricing pressures are combining with cant purchaser consolidation,” Davis outlined, adding brand industry tactics to delay competition, as well that the generics industry must also contend with
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“policies that ignore the unique challenges “There are a range of steps that policy- Board (PTAB) rather than through direct facing generic and biosimilar medicines.” makers can take to address drug pricing,” patent litigation. A recent Supreme Court On pricing, Davis observed: “Generics Davis said. “Of these, we believe the most ruling upheld the IPR process. continue to face challenges due to sus- effective approach is to promote legisla- “AAM supported the court’s decision tained historic levels of price deflation.” tive and regulatory solutions that support finding IPR to be constitutional and pat- Pointing to testimony in front of the US stronger generic and biosimilar markets.” ents to be publicly granted rights,” Davis Senate by US Department of Health and For its part, the US Food and Drug attested. “Given the use of the patent and Human Services (HHS) secretary Alex Azar Administration (FDA) had met its obliga- regulatory system by some brand name earlier this year, Davis cited Azar’s com- tions in contributing to a stronger generics drug companies to extend their monopo- ment that: “We may be driving [generics] market, Davis acknowledged, with the lies inappropriately, tools such as IPR are prices so low that we’re creating manufac- revised Generic Drug User Fee Amend- necessary to obtain rapid review of ques- turing anomalies that lead to sole-source ments (GDUFA II) introduced last year for tionable patents. The branded industry in products there with others exiting.” a further five years proving a success so Washington has lobbied aggressively to try Major generics companies operating far. “The FDA has achieved all the commit- and get Hatch-Waxman cases exempted in the US are reacting to this pressure by ment letter goals and metrics to date,” he from the IPR process, to date unsuccess- making drastic changes: said, “and they are on track to exceed the fully,” he pointed out. number of final and tentative approvals Other threats to the Hatch-Waxman • Teva Pharmaceutical Industries Ltd. has achieved in 2017.” framework that underpins the US gener- carried out a portfolio review to pull out When it comes to addressing any prob- ics market are on the horizon in the form unprofitable product lines; lems with GDUFA, Davis noted, “AAM, of recently proposed modifications to the along with three other trade associations, 180-day market exclusivity boon that is • Sandoz International GMBH has just sold meets with the FDA on a quarterly basis to awarded to first-filer generics that success- a significant chunk of its US business to work through any implementation con- fully challenge brand patents through a Aurobindo; cerns.” He added that these meetings had ‘paragraph IV’ certification. been productive in the collective effort to Davis is forthright in his criticism of • Mylan NV is “evaluating a wide range of identify and resolve any challenges related the mooted change. “AAM believes this alternatives” for its business in the face of to achieving the commitment letter goals. proposal would undermine one of the most “negative trends and dynamics”; critical incentives for generic medicines to ORIGINATORS GAMING THE SYSTEM come to market, hindering price competi- • Perrigo Co. PLC recently announced However, Davis was less complimen- tion and patient access,” he said. plans to separate its prescription unit from tary when it came to the US intellectual The proposal would make the tentative the rest of its business. property (IP) framework, which he said approval of a subsequent generic drug was enabling originators to maintain applicant that is blocked solely by a first Davis pointed out that these pricing unjustified exclusivities and was also applicant’s 180-day exclusivity, where the pressures were partly due to the reduction contributing to pricing issues that were first applicant has not yet received final in the number of buyers dictating trends in driving healthcare costs higher in the approval, a trigger of the first applicant’s the US market. “Increasing consolidation US. “AAM supports true innovation,” 180-day exclusivity. “This is unnecessary among pharmaceutical purchasers repre- Davis maintains, “but in the past several because the statute already contains sents an increasing threat to maintaining years, the US patent system has allowed provisions that address situations where a stable supply of generic medicines,” brand manufacturers to obtain dozens 180-day exclusivity may block approval Davis insists. “In fact, today roughly 200 of patents on certain drugs and to obtain of additional generic products for ex- generic companies compete to sell to three decades of monopoly protection.” tended periods of time. AAM is concerned purchasing groups that collectively control He argues that the IP system is helping this policy proposal could harm generic 90% of the market,” he noted, referring to drive the US drug pricing crisis. “We competition,” Davis said. Reducing or to Red Oak, Clarus One and Walgreens- believe it is important to take a compre- otherwise undermining the incentive for Boots Alliance. “This often leaves generic hensive look at how policymakers can first-to-file generics threatens the foun- companies without contracts and requires continue to incentivize innovation but stop dation of the system that has generated those companies to suspend marketing some of the gamesmanship and patent trillions of dollars in savings for patients their drugs until such contracts become thickets that have inappropriately delayed and payers, he warned. available again,” Davis explained. “This biosimilar competition.” undermines future competitive success A key route in challenging patents that in the generic market as generic drug has become increasingly popular with ge- manufacturers are forced to maximize nerics and biosimilars firms in recent years economies of scale and consolidate.” He is the inter partes review (IPR) process, warned that these conditions pose several through which firms can challenge patents This article was first published by In Vivo’s dangers, including a higher risk of critical in front of the US Patent and Trademark sister publication Generics Bulletin in Oc- drug shortages. Office’s (PTO’s) Patent Trial and Appeal tober 2018.
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Humira Biosimilars Face Complex Asia Outlook As
IAN HAYDOCK Launches Edge Closer EDITOR-IN-CHIEF, PHARMA, APAC The Asia Pacific region presents potentially large opportunities for the development of biosimilar versions of big-selling original biologics as these come out of protection in the major markets. AbbVie’s Humira is the biggest of these. However, the regulatory, reimbursement and commercial situation varies greatly country-by-country, presenting a complex mix of factors affecting the overall market outlook for these up and coming biosimilar products.
The situation for global blockbuster AbbVie Inc.’s biosimilar adalimumab, marketed as Mabura, while Humira (adalimumab) presents a revealing case study Glenmark Pharmaceuticals Ltd. sealed a licens- ANJU GHANGURDE of how the variation in local influences can affect the ing pact with Zydus to launch another adalimumab DEPUTY EDITOR, advent and likely progress of biosimilar competition brand, Adaly. Cipla Ltd. too has since jumped into PHARMA, APAC for a major biologic product, and complicate the out- the fray with an in-licensed version of adalimumab, look beyond a simple consideration of sheer potential Plamumab. Some online pharmacies also list the avail- market size. ability of Envira (adalimumab) from local firmEmcure With global sales of around $16 billion last year, Pharmaceuticals Ltd. mostly in rheumatoid arthritis, Humira is steadily be- Zydus’ Exemptia is said to hold a share of 65% in ing opened up to biosimilar competition worldwide. the adalimumab market, significantly ahead of the Europe has provided most of the early challenges to the other players. There are also signs of an expanding original product and initial sales erosion that AbbVie patient base for Exemptia; the company’s 2016-17 an- has conceded has been greater than expected. nual report noted that more than 7,000 patients have JUNG WON SHIN With further patent expiries happening or coming been on the product. SENIOR REPORTER, up around the world, the Informa Pharma Intelli- PHARMA, APAC gence Asia-Pacific editorial team takes a look at how Access Issues things stand in four major markets in Asia, assessing India remains a low-income, self-pay market, and the current commercial state of play, and regulatory, even follow-on biologics remain beyond the pocket policy and pricing factors that are set to influence of many Indian patients. Lower prices have boosted biosimilar competition for the world’s biggest-selling access to a number of biologics, however, and with biologic therapy. follow-on products capturing a significant share of sales, the country’s market for biosimilars was worth PRICING A KEY FACTOR IN INDIA approximately $250 million by 2015. Commercial/Pipeline Situation Experts note how the Indian biosimilars market in BRIAN YANG Zydus Cadila got approval for the general has been evolving. In recent years multiple SENIOR EDITOR, country’s (and what it claimed was such products for individual innovator biologics, PHARMA, APAC the world’s) first biosimilar adalim- especially the high value monoclonal antibodies umab in September 2014, launching such as adalimumab, bevacizumab, trastuzumab and it that December, in a market where rituximab, have all been approved. local manufacturers have generally employed more “Competition triggered by the availability of mul- aggressive pricing strategies for many first-to-market tiple biosimilars not only provides more options to follow-on products. Zydus initially said its version, the prescribers and patients, but also helps bring Exemptia, would cost one-fifth of the price charged for down the prices. These are definite steps towards Humira, which itself as the original branded product better access and maturing of the market,” Dr. Charu is not sold on the Indian market. Manaktala, senior medical director and head of Asia Exemptia claimed to be a “fingerprint match” with Pacific Biosimilars Centre of Excellence, IQVIA, said. the originator product in terms of safety, purity and On the regulatory side, in 2012 India outlined its potency. It was followed by Torrent Pharmaceuticals first set of guidelines on similar biologics, lending Ltd.’s version of adalimumab (marketed as Adfrar), much-needed clarity to the approval pathway for which launched in 2016. such products; the guidelines were then revised 2018 saw the arrival of Hetero Drugs Ltd.’s in 2016.
114 | In Vivo | December 2018 GENERICS & BIOSIMILARS
Pricing Matters Interestingly, as for pricing, most Indian players appear to have aligned the levels for their adalimumab biosimilars in the region of INR 22,000-25,000 ($320-$364) per course of treatment for the Cipla brand, which is priced at around INR16,072. Typically, though, the price to patients is believed to be much lower, given various patient assistance programs and other discounts. Zydus confirmed that for patients who are on a patient assistance program through doctor referrals, the actual cost of Exemptia ranges from INR11,000-14,000. Cipla’s Plamumab is believed to be available at prices lower than Exemptia, though the Mumbai-based company declined to comment on product-related issues or pricing. Some experts suggest that the trade discounts seen in the In- stage of its biosimilar pipeline, this has been reported to be in Phase III. dian biosimilars space typically come with a caveat – the offer is Pfizer Japan has said just that it expects to launch “within five valid only if you buy a minimum quantity of the product. “I think years of 2016,” while Daiichi Sankyo Co. Ltd. and Amgen Inc. in these discounts/offers will continue, driven by competition and July 2016 signed a deal for the Japanese development and market- duration of the therapy. For chronic it will be higher,” said Dr. ing of nine biosimilars including adalimumab, but as in Mochida’s Subita Srimal, partner at ProGrow Pharma Partners, an Indian life case, the development status of these is undisclosed. sciences advisory firm. The India biosimilar adalimumab prices Elsewhere in the commercial sphere, a February 2014 alliance are also a fraction of Humira’s price internationally. between Kissei Pharmaceutical Co. Ltd. and South Korea’s Industry experts had previously explained that the price advantage Alteogen Inc. is developing various biosimilars including adali- of biosimilars is perhaps more valuable in an out-of-pocket market mumab (current status again not disclosed), and Kyowa Hakko like India, where physicians generally try to “economize” and pre- Kirin Biologics is partnering with Mylan NV to commercialize scribe adalimumab for around six months to bring down/control the biosimilars in Japan. severity of the symptoms, after which the patient can be “tapered More recently, in November 2018, Fuji Pharma entered into an off” the biologic and maintained on oral/conventional therapies. agreement to develop in Japan Alvotech’s portfolio of biosimilars, The India pricing dynamics are also interesting in view of gen- which include adalimumab, although this product was not spe- eral expectations that price erosion for biosimilars is likely to be cifically identified. less dramatic in emerging markets, as regulatory requirements The potential commercial field could eventually become become more harmonized and costs climb. IQVIA’s Manaktala crowded, although the overall market is not huge. The current explained that the application of global, harmonized regulatory Japanese market for original Humira (co-marketed with Eisai Co. standards translates into increased development costs. “However, Ltd. in Japan) in its main RA indication is currently estimated to availability of multiple biosimilars for individual biologics is likely be around JPY30 billion ($264 million) annually at reimburse- to trigger competition and price optimization,” she maintained. ment prices; the disorder is estimated to affect around 1.2 million “In self-pay markets such as India, the marketing prowess of people in the country. leading local manufacturers will rule out the need to compete Given the expected entry of biosimilars, Datamonitor Healthcare solely on price, helping to preserve value in the biosimilars sec- sees branded Humira sales in RA in Japan falling from this cur- tor,” Datamonitor Healthcare analysts predicted in a report in rent levels to around $112 million in 2025. The total Japanese RA April last year on Biosimilars in Emerging Markets. market is expected to fall from $1.3 billion in 2017 to $1.1 billion in 2025, based on a Datamonitor patient forecast. JAPAN ENTRANTS LINE UP Commercial/Pipeline Situation Access Issues There had been some predictions that the first For new entrants, Japan has the benefit of already having a clear biosimilar adalimumab could be launched in and established biosimilar regulatory pathway, with guidelines Japan for the main rheumatoid arthritis indica- issued in 2009. The main differences versus small molecule drugs tion in the third quarter of 2018, following the are requirements for single/repeat dose toxicology studies, and expiry of the local patent in this indication. some form of clinical studies in Japanese patients. As of late November, however, there were no signs of the first Japanese regulators do allow extrapolation to indications for approval, and some companies working in the area are keeping which the reference product (which must be approved in Japan) is their development status close to their chest. approved, but only if the same mode of action is involved and the Several firms are known to be developing biosimilar versions of safety/efficacy re-examination period for the original’s indications Humira, including Pfizer Inc., Mochida Pharmaceutical Co. Ltd., has expired. This is why biosimilar infliximab (reference product Jans- and the Fujifilm Kyowa Kirin Biologics Co. Ltd. joint venture, with sen’s Remicade) was approved in only three settings (RA, ulcerative Mochida’s version thought to be among the most advanced. Under a colitis and Crohn’s disease). multi-product alliance, the mid-sized Japanese firm is developingLG Abbreviations of data requirements are also allowed if sufficient Chem ’s biosimilar portfolio in Japan including adalimumab, known similarity and clinical equivalence can be shown, and with no dose- as LBAL. While Mochida does not publicly disclose the development setting study required at Phase II for example, and an abbreviated Phase
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III program. But comprehensive post-marketing surveillance studies proval of biosimilars, South Korea has already approved several are usually required, particular where pre-approval data are limited. biosimilar products, including biosimilar infliximab, trastuzumab The regulations are seen as providing a clear framework and few (reference product Roche’s Herceptin), and adalimumab since practical barriers to biosimilar entry, as evidenced by approvals 2012. Similar to the situation in other countries, biosimilar adali- for a range of other biosimilars. mumab is expected to be the most popular and crowded biosimilar market in South Korea when products begin to launch – possibly Pricing Matters from 2019, when Humira’s patent protection expires in the country. While the regulatory situation is positive, uptake is largely down Several biosimilar versions of Humira are set to compete in the to comparative pricing and reimbursement under Japan’s national country’s KRW70 billion market, with Samsung Bioepis Co. Ltd.’s health insurance system. Hadlima clearly leading the race by already gaining approval from Biosimilars are usually priced initially at 70% of the original the Ministry of Food and Drug Safety in September 2017. product’s current reimbursement price, in line with regulations for Samsung declined to comment on the timing of the launch, price such follow-on products, either generic or biosimilar, theoretically or other details. It plans to select a separate marketing partner for giving them a modest – although not huge – pricing advantage Hadlima for the South Korean market. over the original. In South Korea, only Samsung’s biosimilar version has received However, under rules that have been proposed this year, regulatory approval so far, while LG Chem, Boehringer Ingelheim pricing of a follow-on biologic manufactured to be made to the GMBH, Pfizer andSandoz International GMBH’s versions are in same standards and process as the original product would be Phase III trials. LG Chem is conducting Phase III clinical trials of considered a “standard” generic under Japan’s reimbursement LBAL in South Korea and the first of these studies is nearly completed. pricing scheme, and therefore reimbursed at 50% of the current LG and Mochida have been co-developing etanercept and adali- reimbursement price of the original product, in line with standard mumab biosimilars in South Korea and Japan since 2012. Under chemical generic drugs. the agreement, LG will manufacture the biosimilars in its Osong Policy changes in general have been made over the past few plant and supply them to the South Korean and Japanese markets. years to encourage the use of generics, such as fee structure Boehringer’s BI 695501 received an IND approval in November changes and the default allowance of substitution unless specified 2015 to begin a Phase IIIb clinical trial. Pfizer’s PF-06410293 re- otherwise by prescribers. ceived approval in October 2014 to begin a Phase III trial in the The differential with the branded original may also be affected country, while Sandoz received the approval to begin a Phase III by other factors. For RA, for instance, the co-pay advantage for study of GP2017 in September 2016. a biosimilar may be limited, given that original drugs’ costs are Meanwhile, Celltrion Inc. is developing a biosimilar adalim- covered under a high-cost benefit program, although high upfront umab in high concentration formulation, but it has not yet begun fees may create patient demand. Outside of this, some surveys clinical trials in the country. Separately, the company is now have shown high awareness of the higher cost of biologic therapy progressing a Phase III clinical trial of an infliximab biosimilar in the disease, however, suggesting that biosimilars may be able in subcutaneous formulation with a goal to commercialize this to find their niche. in 2019. According to the 12-month data from the PANTS study Of three of the early marketed biosimilars in Japan (somatropin, presented at the 13th Congress of the European Crohn’s and epoetin alfa and filgrastim), penetration has been decided largely Colitis Organisation in Vienna this February, the results indicate by whether the products are used in inclusive payment DPC (di- that the safety, clinical effectiveness (by various measures), and agnostic procedure combination fixed-cost) hospitals. Given that immunogenicity of Celltrion’s CT-P13 (biosimilar infliximab) in a fixed reimbursement is provided, an opportunity to reduce the patients with Crohn’s disease is comparable to those treated with drug cost component within this amount may be attractive. reference infliximab as well as those treated with adalimumab. Pharma companies’ market presence and sales power, and Other South Korean firms have early-stage adalimumab bio- physician experience and severity of the indication, are seen as similar pipelines. South Korean biotech BIOCND is conducting a other influencing factors. Phase I clinical trial of BCD100, Aprogen has an early stage adali- In the meantime, original branded Humira continues to be mumab biosimilar, AP97, while Dong-A Socio Holdings Co. Ltd. is approved in Japan for additional indications, receiving a nod in developing DMB-3113 together with Japan’s Meiji Seika Pharma March 2018 for pustular psoriasis unresponsive to conventional Co. Ltd. through the joint venture DM Bio Ltd. The two agreed therapies, its tenth use in the country. A pediatric subcutaneous in 2012 to develop trastuzumab and adalimumab biosimilars in formulation and a new pen autoinjector are other line extensions, South Korea and Japan. and the product has been filed for new uses including the skin disorder hidradenitis supperativa. Access Issues/Pricing South Korea also has a well-defined pathway for biosimilars, with SOUTH KOREAN KOREAN PLAYERS the Ministry of Food and Drug Safety introducing specific evalua- LEVERAGE STRENGTHS tion guidelines in 2009 and then revising these in 2014. Commercial/Pipeline Situation Like other biologics, biosimilars are reviewed through the On the back of the government’s long push to evaluation of quality, preclinical and clinical data, although there grow the biosimilar sector and early establish- are usually fewer documentary requirements than there are with ment of guidance on the regulation and ap- original biologics. Biosimilars are compared to their reference
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product and have to prove their comparability in terms of product China’s feverish activity to develop innovative biologic therapies, characteristics, safety and efficacy. from gene editing to immuno-oncology drugs to CAR-T treatments. In a reimbursement system akin to that in Japan under the Some lower-cost follow-on products have been granted re- national health insurance system, South Korea had been pricing imbursement more widely, however, enabling more patients to biosimilars at 70% of the original drug’s current price. In 2016, access treatment. though, a revised pricing system was introduced, under which On the regulatory side, biosimilars are not subject to an abbrevi- – if the products meet certain conditions – they could be priced ated approval pathway under official guidelines, and the time to at 80% of the original’s price for up to three years. market will largely depend on the results of pharmacology and To qualify for this system, products have to be developed by preclinical comparative studies. The process may take up to seven companies that meet certain criteria of innovation, or be jointly years. If the early-stage comparability study fails, a biosimilar developed by a domestic firm and a multinational firm, and have could be switched to the standard approval pathway of a novel undergone a later than Phase I trial in the country. biologic, which can cause further delays. Interchangeability is another consideration. Although China CHINA - COMPLEX SITUATION has a regulatory approval pathway, there are no formal rules on Commercial/Pipeline Situation whether originators can be substituted with biosimilars, and In general, biosimilars are expect to grow rap- no rules on indication extrapolation and how biosimilars will idly in China, given the country currently has be named. In 2015, China issued its first regulatory pathway for only a very low (around 2% of total drug usage) biosimilars, largely adopted from the regulations of the European market penetration of biologics, partially due Medicines Agency, and many believe the naming of biosimilars to the high costs associated with such products. Biosimilar and and interchangeability will be similar to what the EU has in place. conventional generic drugs are both expected to play a bigger role Unlike in the US, in China there are no incentives for a first- in the country, as the government looks to control rising health to-market biosimilar that is interchangeable with the reference costs while improving access. product, nor an exclusivity period for pediatric or orphan disease Biologics in general are often still beyond the pocket of provin- indications. The guidelines, issued by the Center for Drug Evalu- cial payers as well as the vast majority of patients in China. This ation, do not address interchangeability, because Chinese physi- has limited sales of original biologic brands, and has seen many cians largely prescribe drugs using generic names. If the biosimilar denied access to national and provincial reimbursement lists. is given the same generic name as the innovative product, then Some Chinese firms developing biosimilars have also been interchangeability is theoretically possible. building out their new drug portfolios, to hedge against concerns Reimbursement is another key factor. No biologics (biosimilar or that biosimilars will command relatively low pricing power and otherwise) are currently covered by the China National Reimburse- face limited uptake given the generally poor market penetration ment list, due to their high costs, and biosimilars, like innovative of biologics in China. This has been attributed to various factors biologics, are unlikely to be included in the Chinese national including their lack of reimbursement under health scheme and insurance scheme upon approval. That leaves manufacturers of relatively higher prices versus conventional drugs. these products with few choices except to offer patient assistance Companies face a balancing act of pricing enough below the programs or to seek coverage from local reimbursement initiatives original product to be attractive, while leaving room for further for selected severe conditions. discounting, and educating prescribers about comparability. Even so, some observers see a huge market for biosimilars in A number of companies are developing adalimumab bio- China. While the public hospital sector dominates the Chinese similars, including one of the leading companies in the sector, market, opportunities will exist for products that either do not Henlius, with HLX03. There are about 20 biosimilar versions of feature on provincial formularies or do not win provincial ten- various TNF-alpha inhibitors (including adalimumab) currently ders. Datamonitor predicts that where competition for provincial in development in China, with 3SBio Inc., Hisun and Innovent tenders is particularly fierce, foreign players targeting the Chinese Biologics Inc. among the companies involved. biosimilars market may still be able to generate significant rev- Bio-Thera’s candidate, BAT1406, was accepted for approval enues by leveraging extensive trial data and their reputation as review in August, and the company said this first biologics license manufacturers of high-quality products, seeking opportunities application for a biosimilar adalimumab could lead to it gaining in the high-margin self-pay market rather than the high-volume the first biosimilar adalimumab approval in the country. reimbursement sector. The Chinese company conducted a Phase III non-inferiority trial As one example, three years after its 2005 launch, CP Guojian against the original product, which it said established the same Pharmaceutical’s follow-on etanercept product for RA, Yisaipu, safety and efficacy as Humira. generated sales worth more than $100 million and captured around 75% of the RA biologics market, despite not featuring on ei- Access Issues ther national or provincial reimbursement lists. This is due largely There are many hurdles facing biosimilars in China, noted industry to its hefty 40% discount to Enbrel, Pfizer’s original product. experts attending the BioCon China conference in April 2018 in IV124160 Shanghai. These include: a lack of awareness among physicians and patients; no reimbursement; head-on competition with estab- lished multinational originator companies; uncertain pricing; and
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