Volume 37 Number 07

VOLUME 37 NUMBER 07

JULY/AUGUST 2019

Could The Gut Cure MedTech Forum 2019: How To Negotiate With Brain Disease? Building Growth In The Outcomes Era Public Payers PAGE INTENTIONALLY LEFT BLANK invivo.pharmaintelligence.informa.com STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION-MAKERS CONTENTS ❚

July/August 2019

10 COVER ❚ Building The Biotech City: Is Los Angeles The Go-To Hub For Tomorrow’s Drug Innovations? William Looney

The complexity of producing viable drug candidates is increasing as an abundance of new science keeps extending the range of possible targets and fragmenting disease subtypes. Proximity to novel exploratory research is a driver of pipeline productivity – so can physical location within a communal geography of well-resourced intellectual firepower raise the odds for R&D success?

20 36 Could The Gut Cure How To Negotiate With Brain Disease? Public Payers MELANIE SENIOR WILLIAM LOONEY Scientists now understand that there are In Vivo speaks to the UK branded multiple, bi-directional links between gut industry’s negotiator for the latest and brain. They are using this knowledge five-year joint pricing pact with the to develop new treatments for some of the government, Richard Torbett, who most challenging chronic conditions, outlines, among other topics, five including Alzheimer’s disease, widely applicable precedents from the Parkinson’s disease and obesity. talks that can work in “getting to yes” – despite the fractious budgetary 32 climate for health care evident in all major country markets. MedTech Forum 2019: Building 26 Growth In The Outcomes Era A New Definition: The EU ASHLEY YEO Answer To Medicines Shortages? The European MedTech Forum’s CEO IAN SCHOFIELD panel set out to address high-level global, What is a medicines shortage? The answer long-range issues, but from the start it may seem obvious, but the fact that got log jammed in regulatory issues. European regulators have only now come Not in the script perhaps, but wholly up with a commonly agreed definition understandable, as new EU regulations suggests otherwise. will have huge strategic importance for how companies do business – and in the case of start-ups, if they can continue to do business.

July/August 2019

DEPARTMENTS ❚ From The Editor AROUND THE INDUSTRY Summer 2019 started with a deal-making boom for 4 MedTech Forum 2019: the biopharma sector. In June, AbbVie announced Consumers And Wellness, it would acquire Botox developer Allergan for Or Patients And Health Care? $63bn. AbbVie CEO Richard Gonzalez said repeat- ASHLEY YEO edly when describing the company's rationale for buying Allergan that very little value was ascribed 6 European SPC Manufacturing to the latter’s research and development pipeline. Waiver Comes Into Effect However, the pharmaceutical firms combined have DAVID WALLACE 62 drugs in clinical development – with 38 in Phase II and III or awaiting regulatory approvals, including new indications for marketed products – re- 42 ON THE MOVE quiring substantial ongoing investment. Recent executive appointments LUCIE ELLIS Elsewhere, Gilead Sciences has agreed to a new in the life sciences industry deal worth $5.05bn with existing partner Galapa- REGINA PALESKI gos, which will see the US firm increase its stake in the Belgian biotech. Gilead will pay $3.95bn in cash and $1.1bn for an equity investment, plus additional milestones and royalties. The deal gives Gilead access to six clinical compounds, 46 DEAL-MAKING including GLPG1690, which is in Phase III for idiopathic pulmonary fibrosis Deals Shaping The Medical Industry, (IPF), GLPG1972 in Phase IIb for osteoarthritis and more than 20 preclinical pro- July 2019 grams as well as Galapagos’ drug discovery platform. It also gains an exclusive THE STRATEGIC TRANSACTIONS TEAM option to develop and commercialize all the products outside Europe. In June, we also saw Pfizer pay $11.4bn to purchase Array BioPharma for its recently approved Braftovi/Mektovi drug combination and pipeline of targeted cancer therapies. EXCLUSIVE ONLINE CONTENT In a recent exclusive interview with In Vivo, which will be published in August, invivo.pharmaintelligence.informa.com biotech CEO and UK Bioindustry Association board member Charlotte Case- bourne commented on this trend of buying innovation. She said: “It is evident ❚ What Does It Take To Launch And that over the last five years major pharma companies have increasingly out- Lead An Oncology Biotech Today? sourced their R&D activities. An example here would be Gilead; most of their LUCIE ELLIS lead products are the result of licensing deals.” “Where companies are doing well in terms of having fresh pipelines, a lot of those products are coming from licensing deals and acquisitions. It shows how ❚ MedTech Forum 2019: the different stakeholders within the R&D sector are capitalizing on what they In The Medtech Glasshouse, are good at. For some of the bigger players, that might not necessarily be doing Industry Need Not Fear Stones innovative R&D in-house,” she added. Casebourne is CEO of emerging oncology ASHLEY YEO biotech, Theolytics. Details about other recent alliances and acquisitions can be found at the back of this month’s issue in our regular “Deals Shaping The Medical Industry” column. ❚ MedTech Forum 2019: The Future Is Here But Industry Still Needs A Long-Term Vision ASHLEY YEO In Vivo: Always Online First Don’t have an online user account? Quickly and easily create one Relevant and exclusive online-only by clicking on the “Create your content at your fingertips 24/7. ❚ Deals In Depth, May 2019 account” link at the top of the page. AMANDA MICKLUS Full access to our 36-year archive. Contact: Access your subscription by visiting: [email protected] invivo.pharmaintelligence.informa. or call: (888) 670-8900 or +1 (908) com and log in. 748-1221 for additional information.

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❚ Up-Front SNAPSHOTS FROM JULY/AUGUST’S CONTENT

“A larger issue is changing the cultural mind-set, by tackling up-front the myths that others in biopharma seem to have about Los Angeles. For example, I still hear from outsiders that it’s hard to recruit talent. That’s the mantra. I just smile and try to ignore it. It might have been true.” PAGE 10 The “gut-brain axis” is the focus of growing numbers The possibility of shortages in a of researchers, biotech no-deal Brexit scenario is a real companies and investors. worry, and the UK government has They are uncovering produced a number of documents multiple two-way advising pharmaceutical companies communication pathways on what to do to mitigate the risk, between belly and brain, including building up an additional spanning neural, six weeks of stock over and above hormonal and immune- normal levels. system signalling. PAGE 20 PAGE 26

A distinguishing feature of the UK biopharma landscape is the structured and predictable approach to managing the cost of medicines. There has been Future medtech CEOs a voluntary arrangement to secure this will have different objective since 1957. However, as values, digital nativity globalization of supply chains and trade liberalization took hold, such an and the ability to think explicit connection between pricing agile and find creative and profits became harder to solutions to issues. implement. PAGE 36 PAGE 32

MedTech Forum 2019: Consumers And Wellness, Or Patients And Health Care?

As health care transitions to digitally enabled wellness, medtechs will be missing a of lobby groups such as the International trick if they persist in holding onto the delivery, business methods and models that Consortium of Investigative Journalists were the standard of the early 2000s. Heightened expectations of the new options (ICIJ), whose actions last year quickened for dealing with personal health mean that new opportunities are there for the taking medtech’s heartbeat – if only for a brief – but industry shouldn’t let the tech companies have it all their own way, advised ZS moment. The ICIJ’s weakly assembled principal Brian Chapman. research did not get the traction its archi- tects evidently were seeking, other than The MedTech Forum, Medtech Europe’s It is perhaps sobering to discover that, some one-off story themes in a few, albeit annual conference, was uprooted for the regarding digital, industry players are still upstream, European dailies. It had been first time in its history, shifting from Brus- trying to define it and are all grappling with anticipated that ICIJ representatives would sels to Paris for 2019. The change of loca- its implications in health care. And this have a big presence at MTF 2019, just as tion worked well: by tacking the already goes right to the top of organizations and they had at medtech regulatory meetings populous event onto the back of the French to the forefront of leadership. One of the in Brussels last fall. But if they did send any industry’s annual start-ups forum (Start-up issues to factor in is, how does medtech delegates, no one noticed. innovantes du dispostif médical or Snitem), stay true to privacy and data protection attendee numbers swelled nicely. standards, with digital, that are well above ICIJ INITIATIVE – NOT A TOTAL And the French delegates offered traditional levels, and yet not act so conser- MISSED OPPORTUNITY fresh ideas on innovation and uptake, vatively at this time of change that it risks Their media investigations in 2018 made and especially on digital innovation, as losing the opportunity ahead? more impact in Europe than in the US, the health care and medtech worlds turn Exploiting it properly will probably call where the Bleeding Edge Netflix docu- – albeit slowly – to face the new realities for new talent – which is arriving – and the mentary was aired, Chapman observed. and opportunities of digitized health care. kind of staff that are not fazed by working to But there has been some spillover into The MTF has traditionally focused on unfamiliar strategies, while also being very day-to-day medtech operations, with market access, risk sharing, regulatory familiar with the cutting edge of business. the realization that there are – probably challenges and modern methods of part- always – ways of tightening up on com- nering. Now it is also, inescapably, about NEW TALENT pliance and transparency. Did the ICIJ integrating and exploiting digitization to The combination of digital and new talent initiative provide any long-term benefit? deliver care at the right place, at the right pools is changing the industry. The medtech Chapman answered his own question: “I time, and affordably. The potential for leaders of the future are people who want think so.” Often there has been collateral disruption to the existing model of care to be on the team, not just (usually) older damage from such initiatives, and some delivery still cannot be quantified with people wanting to sell. “The threshold has areas of industry have been painted in an any accuracy, but that’s the aspiration in been crossed, and the change is happen- unfair light, he observed. “But the overall the sights of many stakeholders – even if ing now. Whether it’s enough of a change attention being paid to ensure processes the picture up ahead is still out of focus. remains to be seen,” said Chapman. The are working does make sense, and if we re- ZS principal Brian Chapman put his fin- stakes are high though, in terms of talent double our efforts, then it has to be good.” ger on the worry that most MTF delegates retention. “If you can’t keep your team, it He added, “No one feels good about were probably reflecting on, but were per- now starts to have economic implications.” working for a company that operates on haps not sure how to articulate. Speaking The new talent’s eyes do not glaze over the ‘ethical edge,’ which is an important to In Vivo at the event (May 15-16), Chap- at the mention of codes of ethics. They work consideration when attracting new talent man observed that the word “digital” had increasingly to sets of ideals, transparency, to a company.” It is even more important been heard hundreds of times during the ethics, openness, honesty and trust. These when talent is in short supply. “Feeling conference, and yet “we’re all still trying to are top-of-the-bill considerations for the good about what you’re doing is something figure out what it means … We don’t know new intake of future leaders, which wasn’t people are much more aware of now.” which rules apply, and which don’t, and all so much the case as little as five years The notion persists that the pharma of industry wants to know how to disrupt ago. These individuals are ready to take industry is strongly regulated, and that without disrupting.” on board the potentially disruptive findings medtech is far from comparable. It is an

4 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com AROUND THE INDUSTRY ❚

unfair assumption, but one the industry that undermine the strategies used to en- thinking differently.” In short, there was has had to live with. Yet it is an advantage gage the general public.” It’s a policy that more than one method of buying and sell- to have clear and unambiguous guidelines may be harming the futures of traditional ing, said Chapman. Smart medtechs may around transparency, and this new crop of medtechs, who might have felt confident succeed faster by figuring out how to “bite staff is expected to build higher standards that they were creating the future, but now off” enough of a transformation without of responsibility, as well as ethical and have to think harder. trying to change everything, and thereby environmental goals, into their working It goes further. Payers in the US are risk losing their core business. lives. They tend to think more about the now focusing more on wellness than on worker’s – not just the consumer’s – view health care. A lot of this focus is on mental ALWAYS A RISK of business. And they are aware that they, health (which, unaddressed, can lead to The risk to medtech is not merely theoreti- too, are consumers, who use online natu- further physical problems) and nutrition. cal. In spite of the amount of money being rally and feel good about doing so. Health is being viewed more broadly than spent, a lot of inefficiency remains in the simply as the health delivery system. system. Chapman said there was a real fear PATIENT OR CONSUMER? “Thinking about people as patients alone of medtechs finding themselves pushed to If “consumer” is an underused word in impedes medtech’s ability to engage the periphery of their own industry. “I’m health care, then it’s because “patient” with them outside of the clinical setting. worried about some legacy companies be- is, implausibly, overused. And maybe They are humans 365 days, and maybe coming mere parts suppliers.” To avert this “health care” is a term that is also getting patients, say, three days.” worst-case outcome, medtechs today need too much mention still, when “wellness” Chapman concluded, “It’s a mentality we to come up with robust solutions, wrap- conveys a more accurate picture of where have to bring into medtech, and if we don’t ping services around them. Digital creates the sector is moving to. These alternate do it, we’ll lose out to consumer-oriented network effects, adds to the robustness – some might say modern – tags, reflect people who design products for consumers of a product and addresses inefficiencies. positive notions, and are a small world and know how to interact with them.” Some are on the way, with solutions away from the current focus on sick peo- that yield better outcomes while reducing ple. Medtechs from the established world NEW LEADERSHIP the need for GPs to spend time with people, should reflect seriously on how they pitch This would chime perfectly with the new allowing them to prioritize patients as neces- themselves now, Chapman recommends. generation’s view of necessary leader- sary. Funding these solutions – that is, how The upstart competitors, Amazon, ship qualities and visions for the future the originator medtech company gets paid for Google, Apple, etc., have opted to focus on in medtech. Similarly, environmental its efforts – remains a work in progress. It is people who are not sick. They also have an concerns, diversity and inclusivity: they a case of expectation management: medtech affinity with the language of the consumer. are all on the list for aspiring leaders. In a expects a return on each patient solution they This, Chapman observed, should bring talent-constrained environment, having a provide in real time. more people into the system, and will vision of inclusiveness will pay returns. “It’s serve as the basis for longer relationships. the right thing to do, but it’s even more im- CREATIVE THINKING The implication here is that, if medtech portant for engaging the next generations.” But being paid immediately for every- focuses only on the patient, it is going It is not all upside, however. A lot of thing supplied is maybe unrealistic. to miss out on a huge opportunity. The value is in understanding the rules of the “Medtech has deep pockets, but it is word “patient” is itself part of the issue game in what is a highly regulated industry. not using this,” said Chapman, issuing as it targets only those who are unwell, “The notion of ‘go fast and break things’ a challenge for creative thinking among and does nothing to engender any form may work in certain environments, but it medtechs on payment schedules and of business relationship outside of the could be the ultimate risky thing to do in methods. Moreover, the creative think- clinician’s office. That was not “health medtech.” In order not to bring a business ing needs to be ecosystem-wide. For care’s” business in the past century; now model to a sudden end, a balance is usually example, hospitals may have to rethink it should really be just that. the aim to strive for. “Ignore it at your peril their roles if they do not want to end up Chapman noted in a recent blog post – but don’t miss the disruption!” being maternity and ER-oriented – the for The Pacemaker that about five years Nevertheless, medtech is an environ- two worst “businesses” from a predict- ago, “we awakened to this new perplexing ment of slow change. Value-based health ability and liability standpoint. constituency called ‘the patient’ and, of care (VBHC) is a case in point. It would Even if the view ahead is still blurry, course, created a slew of patient market- not work right on cue because the system digital solutions will provide the bulk of the ing, patient research, patient engagement was not ready and no one could make it answers for health care systems heading for and outreach programs in response.” This pay. “VBHC makes sense, of course, but demand overload, staff shortages and, in seemed right, being an industry driving to there are so many variables that make it some cases, bankruptcy. But first, the eco- be increasingly patient-centric. But then hard to do in practice.” It may be more system must define the parameters of what a new hurdle popped up. It is not just meaningful if medtechs started with small is needed, who will be responsible for pro- semantics, but the word “patient” seems innovations, instead of aiming too high. “A viding it, and how that will be rewarded. to have negative connotations, “using a lot of agile thinking has to do with small IV124303 narrow set of language and interactions experiments, building capabilities, and ASHLEY YEO

European SPC Manufacturing Waiver Comes Into Effect

On July 1, European Regulation 2019/933 entered into force, marking the end of a long the EU’s commitment to the waiver. “We journey for the generics and biosimilars industry in its pursuit of a waiver to allow are looking to make sure that EU generics manufacturing for export outside the European Union – as well as stockpiling for day- [companies] are no longer at a competi- one launch within the EU – during the term of supplementary protection certificates. tive disadvantage with non-EU players,” Bieńkowska emphasized during a speech Amending the European SPC Regula- patent-extension term, adding pressure on the single market and the industry of tion 469/2009, the waiver Regulation, is on the EU to reciprocate – progress for the future on European industry day. the culmination of more than a decade the off-patent sector was slow. of lobbying efforts on the part of the COMMISSION’S INITIAL European off-patent industry – including ATTEMPTS BY EFPIA PROPOSALS NEEDED WORK most prominently industry association TO BLOCK WAIVER It was not long before the Commission an- Medicines for Europe, formerly the Eu- In 2017, Medicines for Europe pointed nounced tangible proposals, which were ropean Generic medicines Association the finger at European brand industry as- welcomed by the off-patent industry with (EGA). This comes despite efforts from sociation EFPIA, spotlighting “particularly one important caveat. While they allowed the originator industry to limit the scope shameful” efforts by the originator body manufacturing during the SPC term for of the mechanism. to block the introduction of a waiver by exports to non-EU markets, the proposals While the off-patent industry has long lobbying the authorities on the basis that did not include a stockpiling provision to campaigned for a “Bolar” style manufac- such a measure would “weaken the SPC allow firms to prepare for day-one launch turing exemption during the SPC period, regime in the EU.” The delay in the Euro- within the EU upon SPC expiry. it was only in the second half of this de- pean Commission kicking off a consulta- Medicines for Europe’s then president, cade that the possibility of introducing a tion had been a direct result of EFPIA’s Marc-Alexander Mahl, insisted at the time waiver truly started to pick up steam. In lobbying, Medicines for Europe claimed, that the only way the waiver would repre- October 2015, the European Commission even though the brand industry body had sent a step forward for industry would be published a single market strategy for Eu- insisted in response that it supported ini- if it allowed both manufacturing for export rope that mooted a “targeted SPC waiver tiatives to broaden access to medicines in outside the EU and stockpiling for day- for export purposes” that it said would developing countries. one EU launch. “Both are important,” he allow EU manufacturers of generics and However, Medicines for Europe con- insisted, adding that “one alone does not biosimilars to “compete on equal footing tinued to encourage the authorities to really do the trick.” A compromise posi- with competitors from non-EU countries,” make the SPC waiver a priority, until the tion of allowing export but not stockpiling where producers are able to manufacture Commission unveiled in late 2017 a public would be “a poisoned compromise” he versions of products still benefiting from consultation on SPCs and research exemp- said, that would “kill the idea.” SPC coverage in Europe, because no tions – including questions on a potential This tension between welcoming incre- equivalent protection exists locally. waiver – which was open for comment mental progress on one hand but stressing Then in mid-2016, the European Coun- until early January 2018. the need for refinement and revision on the cil’s conclusions on “strengthening the Shortly after the consultation closed, other would prove to be a recurring theme balance in the pharmaceutical systems originators appeared to be more con- as the SPC waiver made its way through in the EU and its member states” invited cerned about a potential waiver. US brand the legislative process. Once a formal pro- the Commission to revise incentives for industry association PhRMA told the US posal was published by the Commission, industry development. “Among those Trade Representative that such a mecha- Medicines for Europe was disappointed incentives,” the Council urged, “particular nism “would have significant detrimental to find that it did not go far enough in al- attention should be given to the purpose economic impact on research-based lowing production for day-one launches of SPCs as defined in the relevant EU companies both in Europe and around the within the EU, with the Commission stating legislative instrument and the use of the globe” and should lead the USTR to place outright that the waiver would be “for the ‘Bolar’ patent exemption.” the EU on its “Special 301” intellectual exclusive purpose of exporting products to But despite these developments – property watch list. non-EU markets where protection does not which happened alongside the imple- However, almost immediately after exist or has expired.” The Commission had mentation of the EU’s Comprehensive PhRMA’s intervention, European Com- claimed that the waiver would nevertheless Economic and Trade Agreement (CETA) missioner Elžbieta Bieńkowska of the “indirectly” put manufacturers in “a better with Canada, which itself included a local directorate-general for the internal mar- position to enter the EU market immedi- counterpart to SPCs along with a waiver ket, industry, entrepreneurship and small- ately after expiry,” thus addressing “to a for manufacturing in Canada during the and medium-sized enterprise renewed certain extent” the day-one entry issue.

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But Medicines for Europe was not satis- with the US Patent and Trademark Office fied – and at the same time, had to cope and the USTR – held a dedicated “govern- with renewed opposition from EFPIA, which ment-official only” briefing in Brussels on said it was “deeply concerned” by the the waiver proposal, which Medicines for waiver as proposed. According to EFPIA – Europe claimed was an attempt to “influ- in comments that would be echoed by the ence the outcome” in line with “consistent brand industry association throughout the efforts from US commercial interests to legislative process – the waiver “reduces close the US health care market to bio- IP rights and thereby jeopardizes patient similar medicines.” access to innovative treatments,” thus “Unfortunately, the organizers have discouraging investment. had no regard for transparency about the “It also sends a global signal that details of the meeting, the participants, Europe is weakening its commitment to nor the agenda,” the association ob- IP,” EFPIA said, which was “all the more served, slamming the US for “interfering striking given the extent to which other in an EU domestic policy matter by trying geographies, notably China, are moving “Weakening IP means to manipulate and influence the current in the opposite direction by strengthening debate, in order to influence non-better their IP frameworks, aiming to become the less investment in new specified interests.” Europe of tomorrow.” Adrian van den Hoven, the off-patent medicines, which industry association’s director general, IMPROVEMENTS MADE ultimately limits insisted that “Europe cannot be intimi- THROUGHOUT LEGISLATIVE dated and will not capitulate before the PROCESS patients’ access to new defence of the economic concerns of US The off-patent industry was not without al- commercial interests.” lies among European legislators. Spanish treatments and cures” By the end of 2018, a series of EU-level member of the European Parliament (MEP) endorsements provided fresh momentum Soledad Cabezón Ruiz – a rapporteur for a – EFPIA for the waiver proposals. Parliament committee report on improving access to medicines – had insisted that her LATE-2018 SEES A BOOST colleagues needed to work to improve the FOR PROPOSALS proposals. The Commission had shown A vote by the European Parliament’s inter- “not enough ambition,” she said, pledging national trade committee, INTA, endorsed that improvements – including adding a the proposed waiver, shortly after the EU’s stockpiling provision – would be “the focus persuade the European Council to “neu- competitiveness council recognized the of my work over the next few months.” ter” the waiver. According to the asso- measure at the same time as “construc- Then, in late September 2018, the off- ciation, “disproportionate influence” that tive amendments” to the proposals were patent industry’s concerns were eased was being exerted on the EU Council posed offered by the European Parliament’s when a rapporteur for the European a “concrete risk” of the draft SPC waiver health committee. Parliament’s committee on environment, legislation being rendered unusable. “It EFPIA doubled down on its objections. public health and food safety (ENVI), Tiemo is becoming increasingly clear that vested “The proposal to introduce an export man- Wölken, recommended a stockpiling provi- interests are exerting pressure on policy- ufacturing waiver to the SPC Regulation sion as part of formally proposed amend- makers in the Council to remove clauses sends a signal to the world that Europe is ments to the waiver. Wölken’s proposals or add new ones that will jeopardize the weakening its commitment to IP incentives also included limiting the extent to which whole legislation in an attempt to limit and innovation,” the brand body argued. commercially sensitive manufacturing competition in unprotected markets at the “Weakening IP means less investment in information provided by the generics in- expense of European competitiveness and new medicines, which ultimately limits dustry must be published and shared by growth,” Medicines for Europe asserted. patients’ access to new treatments and national authorities: another sticking point The association urged EU member cures.” Many medicines available today for off-patent producers. state governments, as well as health and and in the pipeline “would not be there industry ministers, “to rapidly improve without the EU’s robust standards of IP TWO STEPS FORWARD, the legislative proposal for a manufac- protection,” the brand industry associa- ONE STEP BACK turing waiver and withstand efforts to tion said. There was often a sense of taking two undermine it.” Applying the waiver to SPCs for which steps forward and then one step back Pressures did not let up from this point the basic patent expires after the entry as the waiver progressed through the until the conclusion of the entire legisla- into force of the Regulation “shifts the legislative process. And in October 2018, tive process. At the end of October 2018, goalposts for those who have already in- Medicines for Europe got wind of plans to the US Department of Commerce – along vested in life sciences under the existing

Europe's SPC Manufacturing Waiver: A Timeline

Key events in the history of the European Union's development of a waiver to allow manufacturing and stockpiling for day-one launch during the term of supplementary protection certificates

OCTOBER 2015 NOVEMBER 2018 The SPC waiver is mooted in the European European Parliament's health committee Commission's single market strategy offers further amendments

JUNE 2016 DECEMBER 2018 European Council publishes conclusions European Parliament’s international trade on strengthening the balance for committee, INTA, endorses proposed waiver pharmaceuticals JANUARY 2019 MARCH 2017 European Council approves a mandate for European Parliament adopts resolution negotiations with the European Parliament calling for SPC waiver JANUARY 2019 MAY 2017 European Parliament’s legal committee, JURI, Canada passes legislation for SPC proposes two-year stockpiling provision to counterpart, including waiver prepare for a “day-one” launch

OCTOBER 2017 FEBRUARY 2019 European Commission opens A deal on the European SPC manufacturing consultation on SPC waiver waiver is agreed by the European Council, Parliament and Commission, providing a concrete path for a Regulation to move JANUARY 2018 forward; stockpiling period is reduced to Consultation period ends six months

FEBRUARY 2018 APRIL 2019 US brand industry association PhRMA European Parliament approves the SPC asks USTR to put pressure on Europe waiver Regulation over waiver plans

MAY 2019 MAY 2018 European Council formally adopts SPC European Commission college waiver Regulation discusses form waiver should take; formal proposal published JUNE 2019 SPC waiver Regulation published in SEPTEMBER 2018 Official Journal Rapporteur for the European Parliament’s committee on environment, public health and food safety (ENVI) proposes JULY 2019 amendments SPC waiver Regulation comes into effect

8 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com AROUND THE INDUSTRY ❚

IP framework,” EFPIA argued. “If Europe provides us with an opportunity to assess wants to be at the forefront of medical in- its benefits.” novation and be taken seriously as a des- After much back and forth, the EU tination for life sciences investment, any Council, Parliament and Commission’s waiver should only apply to SPCs applied agreement also settled on implementing for after the amended regulation comes the waiver from 2022 – rather than the into force,” EFPIA insisted. “Devaluing previously mooted 2020 or 2021 – and investments halfway through their life retaining notification requirements that cycle via ill-thought-out policy changes will force generics firms to publish com- will drive investment to other locations mercially sensitive information, which around the world.” again was not exactly what the off-patent industries had desired. VICTORIES AND COMPROMISE By this point, it was looking increas- IN 2019 ingly unlikely that the waiver would be The start of the new year saw the propos- knocked off course, despite continued als take yet another step closer to being concern from EFPIA that the agreement realized after the European Council in would “significantly weaken Europe’s January approved a mandate for negotia- research and development offering, risk- tions with the European Parliament over ing investment and jobs from our SMEs, the waiver Regulation. However, even our companies, our academic institutions at this stage, there was still significant and our health care systems.” uncertainty over the eventual form that By March, the Regulation was nearing key elements, including the stockpiling the finish line, and the European Commis- provision, would take. Still, the European sion was clearly looking ahead to how Parliament’s legal committee later that it would function in practice, revealing month voted to allow firms to stockpile “It would also be plans to closely monitor the use of the for two years ahead of SPC expiry to pre- mechanism as part of ongoing evalua- pare for a “day-one” launch. a challenge for tions after it entered into force. Against a backdrop of continuing US pressure, the EU persisted with push- manufacturers who ORIGINATORS NOW PREPARING ing the measure through the legislative FOR IMPLEMENTATION process, with the European Council, were producing only Once the Regulation had been approved Parliament and Commission ultimately for local European by the European Parliament – via a large reaching a compromise agreement that margin – the remaining steps were a for- the generics and biosimilars industries markets – rather than mality. The Council formally adopted the found acceptable, if far from ideal – not Regulation in May, with publication in the least because the two-year stockpiling pe- also producing for Official Journal on June 11. The Regulation riod had now been reduced to six months. came into force on July 1, with companies Medicines for Europe’s van den Hoven export to countries able to start manufacturing under the acknowledged the six-month period was waiver from July 2022. not ideal. While he said this period was where SPC protection The waiver will apply to all new SPCs just about adequate for the measure to filed on or after July 1, 2019, so any cer- be effective, he suggested that “for a lot does not exist – tificates already in effect on that date will of complex products, this is going to be to ramp up production not be affected. However, where an SPC challenging.” It would also be a challenge has been filed before July 1 but has not for manufacturers who were producing in such a short come into effect by then, the manufactur- only for local European markets – rather ing waiver will initially not apply, and will than also producing for export to coun- period of time” instead become applicable three years tries where SPC protection does not after the regulation’s entry into force – exist – to ramp up production in such a that is, July 2022. – Medicines for Europe’s short period of time, he observed. Even a IV124297 compromise period of a year would have Adrian van den Hoven DAVID WALLACE been preferable for the generics industry, he added. Nevertheless, the association pointed out that “the compromise fore- sees a review in five years, specifically This article was provided by our sister of the day-one launch duration, which publication Generics Bulletin

Building The Biotech City: IS LOS ANGELES THE GO-TO HUB FOR TOMORROW’S DRUG INNOVATIONS?

BY WILLIAM LOONEY DESIGN: Gayle Rembold Furbert Rembold Gayle DESIGN: As the global battle for high-value life Identified as positives are LA’s extensive So what? The city’s successful bid for the sciences investment heats up, Los Angeles university network, with a strong 2028 Olympics and Paralympics provides a is emerging as a locus for next-generation entrepreneurial orientation; a deep presence global spotlight and rallying point for outsized technology and therapies. An In Vivo in adjacent sectors like digital health; clinical rebranding initiatives that could prove more Roundtable of prominent players in LA expertise in managing trial work in diverse enduring in terms of human impact than the biopharma met at the University Of California populations; and ready access to funding games themselves – like positioning LA as the Los Angeles second annual Biosciences for early-stage science. Deficits include the biotech hub of tomororw. Is big pharma ready Innovation Day to assess what’s good about absence of a single center of gravity in a to step up to the plate? this market metropolis of 10 million potential region where transport links are tenuous; a patients - and what needs to improve. shortage of homegrown management talent; and lack of a local VC community committed to late-stage funding. 10 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com INNOVATION ❚

THE COMPLEXITY OF PRODUCING VIABLE DRUG CANDIDATES IS INCREASING AS AN ABUNDANCE OF NEW SCIENCE KEEPS EXTENDING THE RANGE OF POSSIBLE TARGETS AND FRAGMENTING DISEASE SUBTYPES. PROXIMITY TO NOVEL EXPLORATORY RESEARCH IS A DRIVER OF PIPELINE PRODUCTIVITY – SO CAN PHYSICAL LOCATION WITHIN A COMMUNAL GEOGRAPHY OF WELL-RESOURCED INTELLECTUAL FIREPOWER RAISE THE ODDS FOR R&D SUCCESS? IN VIVO SITS DOWN WITH EIGHT KEY LEADERS IN ACADEMIA, VC, COMMERCIAL REAL ESTATE AND GROUNDBREAKING BIOTECH TO DISCUSS HOW LOS ANGELES – THE “OUT THERE” CITY OF OUTSIZED AMBITIONS – IS POSITIONING ITSELF FOR GLOBAL LEADERSHIP IN THE CURATIVE TECHNOLOGIES OF THE FUTURE.

In Vivo: Los Angeles is the geography of destiny, with an mechanisms to attack cancer cells. It also gave me the confidence expanding and diverse economy whose output now exceeds in our science and the ability to take the calculated risks of in- $900bn annually, placing it third, after Tokyo and New York, vesting in and founding several business ventures here in Los among world metropolitan areas with the biggest economic Angeles aimed at bettering the lives of patients with advanced footprint. As a scene setter, how did you land in Los Angeles or incurable cancers. – as a knowledge leader, what is the value-added to being in this part of the country? As an aside, what led you to make that decision to combine Arie Belldegrun, co-founder and executive chair, Allogene the practice of medicine with business entrepreneurship? Therapeutics: I received my medical degree in Israel and did What was the chronology of your success as arguably the my residency at Harvard University followed by a surgical on- man who made Los Angeles a magnet for research on new cology fellowship at the National Cancer Institute (NCI) under ways to fight cancer? Dr. Steve Rosenberg, a mentor who stirred my early interest in Belldegrun: The NCI grant money was great, but I realized immunotherapy as a treatment pathway for cancer. Back in the that academic research had limitations. Even assuming your 1980s, few institutions were either attracted to this area or had work could get published, the immediate impact on patients embraced its potential, but I learned quickly that UCLA was was negligible. So, in 1996, I decided to start a biotech company, DESIGN: Gayle Rembold Furbert Rembold Gayle DESIGN: the exception. As a result, I joined the medical school faculty called Agensys, with a mission to discover and commercialize as an assistant professor in urologic surgery and signed on as novel monoclonal antibodies to treat solid tumor cancers. In a researcher at the university’s Jonsson Comprehensive Cancer launching Agensys, I relied on support from a group of fellow Center. With several colleagues who, like me, remain on the professors at the UCLA Medical School who joined me as the UCLA faculty today, we worked to raise the profile of cancer scientific founders of the company. It was the reason why we immunotherapy and gene therapy research by soliciting joint chose nearby Santa Monica as the site for our headquarters. grants from the National Institutes of Health (NIH) and other The decision proved fortuitous when, in 2007, Japan’s Astellas granting agencies. Pharma tendered a buyout offer. The new owners subsequently The funding we received helped set the stage for the discovery made a significant new investment in research and manufac- of revolutionary new medicines that use the body’s own defense turing at the Santa Monica location. This was a big win for the

Participants, left to right: Ken Schultz, Trethera Inc; Steve Rosen, City of Hope; Beth Seidenberg, Westlake Village BioPartners; Amir Naiberg, UCLA Technology Development Group; Arie Belldegrun, Allogene Therapeutics; William Looney, In Vivo; Mike Jung, UCLA Chemistry Dept; Monica Schmiede, Informa Pharma Intelligence; David Reese, Amgen. Not pictured: Peter Moglia, Alexandria Real Estate Equities.

Los Angeles biotech community and Agensys grew from 120 therapy. Kite Pharma was launched across the street from the employees, with 50 PhD researchers, to over 300 employees. UCLA Medical Center in 2009 and only later did it move to Santa A decade later, after Astellas decided to relocate its operations Monica. Our mission at Kite, quite ambitious at the time, was to in Santa Monica to Chicago, we convinced Gilead Sciences to develop the first engineered cancer immunotherapy company acquire the Agensys facilities, widening a top-10 biotech com- around the autologous chimeric antigen receptor T-cell (CAR-T) pany’s stake in the Los Angeles life sciences ecosystem. It really platform. It was a dream that we were able to turn into a reality put us on the map. for patients. We developed Yescarta (axicabtagene ciloleucell), In 2004, we also founded another biotech start-up, Cougar the first autologous CAR-T therapy to be approved by the FDA Biotechnology. At Cougar, we developed a novel small molecule, for non-Hodgkin lymphoma (NHL). Zytiga (abiraterone) a potent drug for castration-resistant pros- By the time we sold Kite to Gilead Sciences in 2017 for $11.9bn tate cancer. We located the company literally across the street in the largest pre-commercial biopharma acquisition to date, we from UCLA Medical Center. At the same time, right next door to had 800 employees and a local good manufacturing practices my own lab at the Jonsson Comprehensive Cancer Center, Profes- (GMP)-certified commercial manufacturing plant scaled for the sors Charles Sawyer and Michael Jung were actively engaged in imminent approval of Yescarta. Under the new management collaborative research on prostate cancer that produced much at Gilead, Kite’s workforce has more than doubled, to 1,850 of the discovery work on what became Pfizer’s drug Xtandi employees, located in Santa Monica and in El Segundo, the site (enzalutamide), a blockbuster for which UCLA continues to of a manufacturing plant that oversees the customized biology receive royalties to this day. Cougar was acquired by J&J in required to deliver Yescarta to each individual patient. 2009 to gain access to abiraterone, which was subsequently That Yescarta is made here is another sign that Los Angeles approved as Zytiga by the FDA in 2011. Zytiga earned J&J US has come into its own as a leader in biotech, combining top sales of $3bn in 2018. academic talent and business know-how to produce world-class My UCLA roots were further reinforced when my faculty col- medicines that advance patient care. The opportunities that leagues Owen Witte, Jim Economou and Antoni Ribas joined me came from my academic connections to UCLA have instilled in in starting yet another new company focused on engineered cell me a deep confidence in the city’s future as a bench-to-bedside

12 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com INNOVATION ❚

powerhouse in medical innovation. and run a technology group more like a business. On a visit to My newest and most ambitious project is Allogene Therapeu- Israel, representatives of the UCLA search committee invited me tics. This company is pursuing an off-the-shelf CAR-T therapy to breakfast, and four months later I, my wife and three children against cancer. I am joined in this project by another colleague landed in Los Angeles. and former UCLA professor, David Chang, who has moved The commitment I find here to excellence in life sciences from heading Kite’s R&D program to his new post as Allogene’s research makes my mission largely self-evident – it requires no president and CEO. For now, we are based in South San Fran- explanation. Everyone understands the potential the univer- cisco due to our history with Pfizer, from whom we acquired sity’s vast talent base has on innovations that create significant the asset. I am keeping my roots here in southern California by downstream economic opportunities while delivering real value taking the lead in opening a new office in Los Angeles for Vida to patients. The Los Angeles region has not been an easy sell, so Ventures, a Boston-based boutique VC I co-founded and helped we must work hard to establish ourselves as a significant hub. launch in 2017 with more than $350m to support emerging and Medical innovation is a global pursuit, where the winners will breakthrough science. We will work with other geographically be those who are most effective in creating an ecosystem that focused VCs, including Westlake Village BioPartners, which is can support their scientific assets and resources. also here today, to provide hands-on expertise with a focus on Mike Jung, university professor of chemistry and bio- start-ups that are making the Los Angeles metropolitan region chemistry, UCLA: I’ve spent almost my entire professional life their preferred home base. here in Los Angeles – 45 years to date. I arrived in 1974 after You see that all of us here today are deeply interconnected receiving my PhD from Columbia University and a post-doctoral in pursuit of the same goal. I am interested in hearing from the residency at the Swiss Federal Institute of Technology in Zurich. others on the panel. It was simple: UCLA said it wanted me to come to Los Angeles David Reese, executive vice president R&D, Amgen: I am and made me an offer. I took it. I grew up in the raucous French a refutation of the notion that Los Angeles is a transient place Quarter of New Orleans and Los Angeles presented as culturally where people don’t put down roots. I came to Los Angeles 30 a bit crazy too – ever since, I’ve enjoyed the city and enjoyed the years ago as a newlywed and except for a brief period on the work. Over the years I received numerous offers to leave UCLA faculty of the University of California, San Francisco, I’ve been and significantly increase my income. But happiness can’t be here ever since. Both of us were looking for a place where I could bought. And I truly have been happy here. do my post-med school residency and my wife could apply her Steve Rosen, provost and chief scientific officer, City of new degree from Stanford Business School. Hope National Medical Center: I was trained as a medical Like for Arie, UCLA proved to be an attractive place for me oncologist with a background in lab work. I grew up in New to start a career in science and research. I ended up doing my York, graduated from Northwestern University’s medical school medical training at UCLA’s old Center for the Health Sciences honors program and, like Arie Belldegrun, did post-doctoral campus just across the street from here. I was the chief resident work at the National Cancer Institute – also as a member of Dr. in internal medicine when the 1994 Northridge earthquake hit Steve Rosenburg’s lab, doing some of the important early work nearby, which gave me my first exposure to crisis management. on cancer immunology. After that, I spent 25 years at Northwest- It was also during my first week as a UCLA physician intern that ern University, running its cancer research, trials and treatment I met Professor Dennis Slamon, a mentor whose lab did much programs. During that time, three of my four children, as well of the basic research on the HER2/neu oncogene that eventually as my parents and sister, had relocated to southern California produced the breakthrough drug Herceptin for breast cancer. I for the educational opportunities and the great climate, so ended up spending a decade in Slamon’s group, and later I ran when City of Hope approached me for a new position I decided a clinical research network with him. to take a look. I quickly fell in love with the “succeed by doing In 2005, I joined Amgen’s R&D program, where I have held well for others” culture of this institution and the commitment various roles leading up to my present position as the com- to research that benefits patients in fighting difficult, hard-to- pany’s head of global R&D. To me, it was a natural transition treat diseases like cancer. from academic discovery to commercial development. The Los Since I joined City of Hope a little more than five years ago, Angeles ecosystem proved fortuitous in offering me the best of I’ve been heartened by the resources I’ve been given to build both worlds. That critical mass is expanding and helps explain on this great reputation. My initial assignment was to bolster why I believe the area has much more to contribute in seeding the foundational research program at our Beckman Research innovations that work for patients. Institute, investigating the biology, chemistry and pathology Amir Naiberg, president and CEO, UCLA Technology of cancer and diabetes. Today, my role as provost and chief sci- Development Group: I am a relative newcomer to the region. ence officer consists of administering all City of Hope research I arrived three years ago after serving as CEO at Yeda R&D Ltd., programs, from basic and translational science to clinical trials, the commercial arm of the Weizmann Institute of Science in Is- most of which center on cancer but also include a diversity of rael. The opportunity came because UCLA had made a strategic conditions, from diabetes to HIV. The many personal connec- decision to take better advantage of the commercial develop- tions I’ve made – and the common links I share with the other ment opportunities from the research taking place in its labs. panelists here today – reinforce my view that Los Angeles has The bottom line is UCLA wanted to recruit someone who was the abundance of human capital required to keep generating familiar with cutting-edge academic science and could build the best new ideas in medicine.

Beth Seidenberg, managing partner, Westlake Village Europe, I arrived in Los Angeles to support Medtronic’s artificial BioPartners: I began my career on the East Coast but moved to pancreas system for diabetes, which won Time Magazine’s 2014 Amgen some 20 years ago, where I served as the company’s chief Invention of the Year. Later, I co-located to the San Diego area to medical officer and head of global development. I exemplify a lead strategy, innovation and business development for Halo- common theme, moving out to California with some trepidation, zyme Therapeutics. Having served during that time as an active then falling in love with the geography, climate and a unique board member for Trethera, the directors recruited me last year way of living that is very different than other parts of the country. for the CEO role as well. Trethera is a start-up whose origins link After Amgen, I joined the VC Kleiner-Perkins in the Bay Area back to UCLA’s work in small-molecule DNA synthesis and repair where I spent 14 years and, as a general partner, helped fund space. Our lead candidate, TRE-515, is a first-in-class inhibitor the growth of 15 successful biotech companies. of the enzyme deoxycytidine kinase (dCK). Today’s fellow pan- All that time I kept my home in Westlake Village near Amgen’s elist Mike Jung, along with Dr. Owen Witte of the UCLA Geffen HQ in Thousand Oaks. The irony was I was living in the LA area Medical School as well as several other prominent UCLA faculty, even though my work involved investing in companies around developed TRE-515 for use against solid and hematologic tumors. San Francisco and Boston. I found it amusing that, considering From my experience around the globe, the biggest value- my own weekly commute, colleagues at Kleiner-Perkins would added I see in Los Angeles is the access to early-stage start-up talk about LA as another planet – too far away to spend any funding – though late-stage funding is not nearly as robust. time there. My consumer tech counterparts took the same view We’ve raised well over $15m for Trethera locally, with many until Snapchat took off and created a new geographic hot zone of our investors coming from outside the industry. Having the called Silicon Beach in the Venice area. Los Angeles promptly entertainment industry as one of your shareholders adds a emerged on their radar screen. unique wrinkle – where else can a start-up claim that one of its This is what is happening now in pharma and biotech. Finally, principal investors is the screen writer for the iconic movie Toy I happen to be living in the right place. I am now helping shape Story? Los Angeles also has the unrivaled physical presence of the future of the city after founding last September a new VC many major academic research institutions, including, in addi- enterprise, Westlake Village BioPartners, jointly with Amgen’s tion to UCLA, Cal Tech; the University of Southern California, longtime head of R&D and a close friend, Sean Harper. We’ve including its new Ellison Institute for Transformative Medicine; raised $320m so far. Our business mission is to seed the Los LA BioMed Medical Research Lab; the seven Claremont Colleges; Angeles area’s potential in life sciences, focusing on early-stage and several others. incubator companies with interesting novel technologies as well as a few later-stage plays that together will create a diversified TO PROSPER, STAY CLOSE portfolio marked by great science – and treatments that will work for all patients, regardless of geography. As a group, do you believe the autonomous capacity to ac- Peter Moglia, co-CEO and co-chief investment officer, cess, transfer and interpret large volumes of information has Alexandria Real Estate Equities Inc.: I am a UCLA graduate, made geography irrelevant to success in today’s research which makes me an optimist about Los Angeles. I started at enterprise? Alexandria in 1998. One of the first things our company founder Jung: The Internet has certainly democratized the way we Joel Marcus asked me to do was establish a biotech “cluster” in scientists exchange information. But direct human interaction Los Angeles. I went and found an old warehouse in Pasadena is unpredictable, which is precisely why it can be so useful to where we are based and retrofitted it for lab space. We called it an the pursuit of innovation. Closeness does count, especially Innovation Center, with a focus on early-stage companies, given when you have a burning question and can simply walk over to that Los Angeles was then a nascent market for life sciences. a neighbor’s lab to find an answer. We were able to lease it out fairly quickly, but soon found that Reese: Technology gives us the opportunity to pursue collabo- these early-stagers would leave after two or three years – not just rations remotely in a way that was not possible in the past. But from our facility but from the Los Angeles area entirely. The reason we primates are wired to be social. Having intellectual capital was either they were getting investments from outside the region massed together should never be discounted. and their investors wanted them to move closer to where the capital Seidenberg: The common thread is that it’s always hard to was; or they had needs that were locally scarce, usually manage- start a new business – but harder still to contemplate doing ment talent. It was also true our business model focuses on “class that from afar, separated from the researchers who develop the A” facilities that are great for a company’s image for recruiting and science and understand the condition as experienced by the retention purposes but carry a premium that didn’t fit local early- patient. It is true that you can import the intellectual property stage company budgets – at the time, their funding sources were from virtually anywhere. But if you want to build a viable com- “friends and family” contacts that did not value image as much as mercial business, a supportive surrounding ecosystem of other professional investors do. All this is starting to change and Alex- like-minded businesses as well as a familiarity with the stake- andria is cautiously re-engaging in the market. The optimism has holders responsible for shaping local practice and regulation always been there and now it’s starting to prove out. is extremely important. I’ve experienced this dynamic at work Ken Schultz, chair and CEO, Trethera Inc.: I wasn’t born in before in Boston; in Los Angeles the same thing is happening southern California but got here as quickly as I could. Follow- now, but at a more rapid pace. ing practice as a physician plus five years as McKinsey & Co. in Belldegrun: I am finding our investors – including Gilead Sci-

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ences, in the case of Kite – are increasingly derway with a Colorado-based biotech, willing to come and work where the exper- SomaLogic Inc., to investigate how pro- tise lives. Many of Gilead’s management teins impact health status and disease team responsible for the Kite acquisition progression in the human body – it’s the are now sitting in Santa Monica. I think largest, most comprehensive proteomics this trend will continue. experiment conducted to date. Reese: Looking at the future of this What’s driving us is the necessity to attack industry writ large, the engine of growth disease in a different way than traditional is the mixing of diverse platforms, tech- methods, where we can learn to generate nologies and talent. Multidisciplinary new insights about targets and pathways expertise is the entry point to all the new against the hardest problems in medicine, science, such as the “omics” field, which like protein degradation or eliminating the requires such diversity if we are to under- blood-brain barrier. At present, only about stand the roles, relationships and actions 15% of the human genome is druggable. We of the various molecules that populate the have to push the technology boundaries to cells of an organism. Hence it is simply make tractable disease targets that are cur- good judgment to stay close to where this rently out of reach. research is being conducted – the pace of “Amgen is excited to work with Expertise from many parts of the learning is extraordinary and cannot be local government leaders, scientific community, from chemistry to evaluated from afar. biology to physics and engineering, will academia, and venture be necessary to solve these challenges. LA’S ASSETS capitalists to develop a more I am optimistic on what we can achieve collectively – and the university infra- What’s attractive about the Los Angeles vibrant biotech community in structure we have cited as a feature of the biotech landscape today? Are we at an the greater Los Angeles area, Los Angeles biopharma ecosystem gives inflection point in terms of the sector’s us that in spades. The molecular and cel- growth prospects? our home for nearly 40 years. lular engineering capabilities that exist Belldegrun: We are excelling at ad- There’s extraordinary talent right here give this region a big edge in vanced gene and cell-based technologies translating theory into therapy that works that take us beyond the pill. When we sold here to capitalize on exciting for patients. We have the opportunity here Cougar to J&J, it was because we made a advances in biology that offer to put all this together. pill – it was very easy for J&J to integrate Seidenberg: In terms of inflection that modality to its base operations in New the promise of transforming point, what set things afire in the Massa- Jersey. It is not as easy for Gilead to relo- how we treat serious illness- chusetts hub was the decision by Novartis cate the manufacturing of the autologous 16 years ago to move its major global R&D CAR-T technology behind Yescarta. As its es like cancer, heart disease, operation to Cambridge from Basel, under use by patients grows, our original $500m and neurodegenerative the high-profile leadership of cardiologist investment in the complex, customized Mark Fishman. That was the “big bang” re-engineering of individual cells will stay disorders.” that made Cambridge a destination for here because of the expertise this region other big pharmas and in turn drew in a BOB BRADWAY, has in this high-touch production. host of satellite smaller biotechs. Gilead The FDA is sending staff out here to chairman and CEO, Amgen Science’s acquisition of Kite Pharma in understand the process of re-engineering 2017 as well as its expanded research com- the human immune system to deliver a mitment to southern California has had a treatment to patients. There are multiple, similar, if smaller impact compared with small start-ups founded by bioengineers, lab specialists and Novartis. If over the next couple of years we get some additional CROs (contract research organizations) all interested in being local investments by Amgen while simultaneously attracting first with the next generation of medicines targeting the human a new big pharma player to relocate key R&D operations to immune system. It started with the low hanging fruit in cancer Los Angeles, then it’s game over. We are already repairing the but is expanding beyond that to the autoimmune disorders and deficit in venture capital with the formation of Westlake Village inflammation affecting millions of people in the US and world- BioPartners as well as Arie Belldegrun’s Vida Ventures, which wide. Such expertise is not easily replicated and transferable in will give us the concentration of capital assets that has been the same way as can be done with a small-molecule pill. lacking to date. Reese: I am biased because Amgen already has the best ge- Naiberg: I’d emphasize the enormous extra lift provided by netics database in the world due to our investment in Iceland’s our local academic institutions and teaching hospitals. There deCODE genetics project. We now have millions of participants is a significant follow-on effect in the amount of funding this enrolled from around the world. We have another project un- area gets from the federal research agencies like the NIH and

the National Cancer Institute (NCI). Los Belldegrun: Most biopharma scientists Angeles-based research institutions re- in academia today are highly opportunis- ceived $1.1bn in NIH funding in 2018, the tic and this has rebounded in favor of Los largest amount of any county in California. Angeles due to its top-rank institutional Two of the top-five grant recipients from assets. No one is in an ivory tower or giv- the state were based here: UCLA and the ing anything away. My friend Mike Jung University of Southern California (USC). is not the man I knew 20 years ago. He’s Seidenberg: Yes. Academic relation- not only a distinguished scholar – he’s a ships are a factor in our favor – so much savvy and successful businessman. so that few people realize that the biggest challenge facing Los Angeles biotech is the How strong is the CRO and contract chronic shortage of private laboratory real development and manufacturing estate. It’s not seen as an issue because organization (CDMO) presence in Los of all these university-based assets. It’s Angeles? tough getting outsiders to invest. Hence Seidenberg: It’s a key variable that start-ups like Atara Biotherapeutics, an- will take a bit more time to develop. other allogeneic T-cell immunotherapy Cell and gene therapy, including gene company where I serve on the board of “We know that if Los Angeles editing, are going to compose the major directors, must invest and build such is able to attract another big source of therapeutic opportunities in facilities on their own. With help from the next decade. Right now, there is no the city of Thousand Oaks, Atara recently pharma to locate here, in truly robust capability in the contract opened a state-of-the-art allogeneic T-cell addition to Amgen and research world to meet the production operations and manufacturing center near challenges around these complex, highly the Amgen HQ. Gilead, it would be a game- personalized therapies. The result is Belldegrun: Let me add some addition- changer – further entrench- that developer companies like Kite (now al context – we are all here today to partici- Gilead) are doing it themselves. They are pate in UCLA’s second annual Bioscience ing us on the map in ways building their own facilities. There are Innovation Day. The first one last year that could attract more also the companies like Allogene, which attracted about 450 people from south- are working on allogeneic standardized, ern California and around the country. mid-size or smaller biotechs off-the-shelf approaches to cell/gene This year I’m told the number has nearly to invest and add to our base therapy rather than the prevailing autolo- doubled. A few months ago I participated gous one-off model, a trend that offers a in a similar daylong life sciences event in human capital.” less cumbersome and possibly cheaper hosted at Research Triangle Park in North way to deliver treatment. ARIE BELLDEGRUN, Carolina, which drew about 900 attendees. The point is we now have at least one I was impressed and asked my hosts how co-founder and big pharma in Los Angeles expert at this long they’ve been doing this meeting – the executive chairman, type of manufacturing. From that base answer was 30 years! I took from that brief Allogene Therapeutics many CDMOs will start to form around it. exchange that our prospects going forward The precedent is Genentech and how its are exceedingly bright. Today, we have a lot leadership in production of monoclonal of the top people from companies, research antibodies spurred the growth of multiple institutions and VCs throughout the coun- new suppliers of this technology in the try. Next year, they will bring their teams Bay Area. It’s entrepreneurial metastasis with them too. People will have figured out – and I expect Los Angeles will come into what great things are going on out here – its own as a national locus for expertise in and they will be ready to do business. And it has happened in cell and gene-based manufacturing. Like VC capital, it’s another just two years, compared with three decades. key element to add to the biopharma ecosystem now coming to Reese: Another favorable trend is the market for scientists life in Los Angeles. and researchers is very strong. The recruitment field is highly competitive. Amgen is not experiencing any down cycle in wage MIND THE GAPS expectations of the people who come here. Jung: David is right. The young people we hire today are get- What are the challenges – the gaps that must be addressed to ting offers from everywhere. No one feels compelled to stick to bolster Los Angeles’ credentials as a world-class biotech hub? one track in academia and ignore the possibilities that can come Schultz: One thing I am not sure we can tick the box on is ac- from partnering and entrepreneurship. Arie is a prime example cess to venture capital. Funding for the early stage is there – my of those possibilities and what can be achieved in applying a own company secured non-VC money right at the start – but at medical or science background to build a great enterprise. the crucial later stages when the challenge is funding proof-of-

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concept trials, local investors seem more reluctant. I don’t see has actually been a shift in emphasis over the past few years from as many of the globally integrated VCs opening branch offices attracting investment in warehousing, retail and manufacturing in Los Angeles and I noticed a recent $40m VC deal with City of to biotech and other high-tech sectors that leave a small footprint Hope that made the investment contingent on re-locating the on the land and offer high-paying jobs. Jobs data assembled by company to Cambridge, MA. A 2019 Boston Consulting Group the industry have had a big impact in showing that life sciences (BCG) report, Stars Aligned, showed late-stage VC funding in generates more tax revenue than most other sectors and has a southern California trailed the Bay Area by over 90%. I guess big spillover impact on retail and other businesses that depend my question is, as a new biotech entrepreneur, I’d like to tick on high-income workers. that box – but are we there yet? Moglia: One of the big challenges in Los Angeles is zoning Seidenberg: There is a distinction at work here. An early- laws. There is very little land that is authorized for R&D activi- stage investor will want to be involved in the details of building ties; if you read the zoning code it is hard to determine whether the enterprise from the ground up, vetting and monitoring your or not a wet lab is even allowed here. We’ve discussed this with business plan to make the right decisions on physical plant and the city and it is looking at clarifying the legal situation. More talent recruitment. There is an incentive to stay local. At the later flexibility on zoning and land use is definitely a plus given the stage, VC money can enter from anywhere because the basics demand for space to conduct research. of the business and its value proposition are already in place and it’s easier to insist on a translocation contingency as part of We should conclude with a consensus on the next steps the deal. That’s just the reality. Our mission at Westlake Village necessary for Los Angeles to realize its potential in assem- BioPartners is to get actively involved and build the start-ups we bling the science, capital and talent to deliver tomorrow’s invest in right here in Los Angeles. And we also want to bring in medical breakthroughs. As key players representing a cross- late-stage money, as we have done for Atara Biotherapeutics and section of the city’s current biopharma infrastructure, how as Arie Belldegrun did for Kite Pharma. Getting that funding is can you leverage this geography of opportunity to become not going to be an issue if the fundamentals are right. top finisher in the global race for the knowledge assets that Jung: Lab space is a pressing issue. I can see from my perspec- treat and cure disease? tive that space is really hard to come by off campus. I understand Seidenberg: On the practical side, the biggest thing that must that Alexandria Real Estate Equities has bought land in Culver be fixed is the real estate. We need more lab space and a strategy City and is going to build there. We aren’t going to fulfill our on where to place it to achieve the greatest synergies between potential in cell and gene therapy unless we add to our lab industry, services and adjacent businesses, academia and the infrastructure in Los Angeles. big teaching hospitals. We’re solving the funding issue. With the Seidenberg: Having to wait in line for lab space is a key opening of the Vida Ventures office, you are seeing other VCs concern for start-ups. Any downtime that affects your develop- following the same geo-centric path as Sean Harper and I have ment progress costs money. The clock is always ticking on the done. As far as late-stage money is concerned, that will come intellectual property. once we build more quality companies here with reputations Schultz: At more than 4,000 square miles, Los Angeles county in the new sciences. is bigger than Rhode Island and Delaware combined. We have no A larger issue is changing the cultural mind-set, by tackling center of gravity in terms of real estate; instead we have clusters up-front the myths that others in biopharma seem to have about of lab and incubator facilities in Pasadena and adjacent to Am- Los Angeles. For example, I still hear from outsiders that it’s gen in Thousand Oaks. Rather than a singular geographic blob, hard to recruit talent. That’s the mantra. I just smile and try the biotech industry here will look more like scattered droplets to ignore it. It might have been true once – when Sean and I where scientists and teams can work closely to one another. started at Amgen 20 years ago, we were just ourselves; there Seidenberg: It’s not going to be possible for Los Angeles to was no team. But that proved to be an advantage. David Reese look like Kendall Square in Cambridge. We are likely to grow joined us from UCLA because, as he said, it was an opportunity out to resemble the Bay Area, with many pockets or clusters of to build something. The same bootstraps mentality also ap- activity and a big divide between the peninsula and East Bay pealed to Kite’s eventual co-founder, David Chang, when we where you have people who just won’t shuttle back and forth first reached out to him. on the bridges. It hasn’t hurt Silicon Valley too much – the big There are so many other examples of successful people who problems up there are housing costs, regulation and the war wanted to be part of this culture of individual initiative and try- for talent leading to a challenge in recruiting and retaining ing things differently than what was commonplace back east. top-quality researchers and experienced staff. We must put out the message that Los Angeles is small and big at the same time, with strengths and gaps that make it a won- What about enlightened public policies focused on zoning derful place to reinvent yourself – and to keep doing it. I’d also and tax breaks for incubators and a better overall approach mention that Los Angeles has an abundance of research talent to land use, including incentives for affordable housing? in other technology sectors. This will be increasingly important Does government actually work in California? as medicine becomes more personalized, using platforms that Seidenberg: Where I am based, in the Thousand Oaks area, deliver treatment in ways no longer reliant on the small-molecule the response of city councils and other local government has pill. We also shouldn’t forget those service functions like legal, been tremendous. Restrictive zoning there is not an issue. There accounting and finance that every new start-up needs to grow

as an enterprise. These are all here at scale. In the end, we know that if Los Angeles is able to attract Schultz: I agree that we have a lot of R&D talent. What are another big pharma to locate here, in addition to Amgen and not so prevalent are people with general management expertise Gilead, it would be a game changer – further entrenching us along with practitioners in specialty functions like CMC (chem- on the map in ways that could attract more mid-size or smaller istry, manufacturing and controls) and regulatory. We also need biotechs to invest and add to our base in human capital. I’d to seed that class of entrepreneurs who have built companies also like to ask my friends at Amgen if or how it plans to spend and closed them down – numerous times. This is an important the $30bn in cash it reported having on hand at the JP Morgan and hard-won source of wisdom about how biotech really works. investor conference in January. My hope is that a good portion Naiberg: UCLA is committed to establishing a closer connec- of it will be put into projects here. tion between academia and industry. We feel it has to be integral to any growth agenda for biopharma in Los Angeles because the A ‘BIG BANG’ – AND THE OLYMPICS WILD CARD architecture is so rich in potential. Our Technology Development Group relies heavily on mentoring work. For example, we work Schultz: What we’re talking about is a “big bang” event – big- with many of you here in this room as external experts to judge ger than the $12bn Gilead Sciences paid for local innovator Kite and support projects initiated by our faculty that can lead to Pharma two years ago. successful commercialization. Belldegrun: That’s why it’s doubly important to engage The degree of commitment and involvement by industry col- Amgen CEO Bob Bradway and new Gilead Sciences CEO Daniel leagues has gotten deeper with time. They are mentoring our O’Day as ambassadors to the rest of the big pharma community teams every step of the way, creating those milestones that keep in making the case for high-level investments, as they have done everyone focused on realizing an investment return from all the in Los Angeles. new science our faculty creates in the lab. What we’ve achieved together in the two and a half years since I arrived at UCLA is UCLA’s Technology Development Group will be holding its gratifying. The model deserves to be replicated throughout the third Biosciences Innovation Day a year from now, at the region as a priority for the entire research community. start of a new decade. Do you have a sense of what the theme Belldegrun: My wife sits on the board of directors at Cal Tech. will be? What next are you excited about? I understand an investment fund is being created to support Naiberg: Next year, we will focus on the who, why, when more foundational work there on biotechnology. The point is Cal and how of partnering. This year, this activity was a sidebar. Tech wants to increase its footprint in the new science. The sentiment among attendees I spoke to is partnering has Rosen: I share Amir’s perspective. City of Hope is an engine to be front and center. That includes active participation not of productivity when it comes to developing new therapeutics. just by the UCLA community but by other institutions in Los Of late, we’ve had two projects licensed out that amount to a Angeles county – anyone who wants to join us. Our goal is to vote of confidence in the several hundred million dollars we make the annual Biosciences Innovation Day a one-stop shop spend annually on research. Since I arrived five years ago, we’ve for showcasing biopharma innovation to highlight and advance recruited about 70 new lab investigators; more than half of them best practices. And of course we are looking to increase turnout, came from tenured faculty positions. Also, City of Hope does which this year vastly exceeded our expectations. not offer tenure. It’s a major vote of confidence in our ability to make new discoveries and bring them to start-up. Our board of Finally, Los Angeles has received the nod to host the sum- directors has endorsed us setting up a separate biotech business mer Olympics in 2028. Among other things, preparations development office. As a result, I expect the breadth and quality for this global, high-profile event usually entail significant of these relationships to increase. local investment in infrastructure as well as a “rebranding” Belldegrun: Another area we can agree on is tax policy and of the host city’s image. Is there an opportunity to include incentives. Many parts of the country now offer tax breaks in re- biotech and the life sciences in these initiatives? turn for investing in a state or community. When Massachusetts Reese: All big companies and employers in the region are likely started doing this, you began to see more companies opening to benefit from the media spotlight that will be placed on Los An- facilities in the state. The latest is France’s second-largest drug- geles and its incredible diversity of people and talent. If it leads maker, Servier Group, which opened a new US HQ in Boston to the build-out of a public transit infrastructure, that will help earlier this month. expand the cluster-based work and lifestyle approaches that many California is a state that has never, to my knowledge, offered young scientists seem to prefer these days. We need to maintain tax breaks to biopharma in return for investments or jobs. It may our focus in being attractive to this employment demographic. be appropriate to discuss with the city and county how they Belldegrun: There is no need for any elaborate effort to rebrand intend to keep us as a leader in biopharma innovation. Mark what we do. My life in Los Angeles tags me as an inveterate opti- Ridley-Thomas is the county supervisor who represents the mist. It’s simple: Los Angeles – The Next Biotech Hub. area around UCLA. His record in support of the biotech sector IV124301

has been unwavering. What’s unclear is the position of the city Comments: council and the Los Angeles delegation in the state legislature. Email the author: [email protected]

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JN2181 Pink Sheet Advert HBW US Letter.indd 1 2019/06/05 12:59 ❚ RESEARCH & DEVELOPMENT Could The Gut Cure Brain Disease?

Scientists now understand that there are multiple, bi-directional links between gut and brain. They are using this knowledge to develop new treatments for some of the most challenging chronic conditions, including Alzheimer’s disease, Parkinson’s disease and obesity.

BY MELANIE SENIOR ippocrates (460-370BC) believed that all diseases begin in the gut. He was closer to the truth than he has been given credit for. It is reasonable to The “gut-brain axis” is the focus of assume that gastro-intestinal disorders or metabolic diseases may start growing numbers of researchers, in the gut. But research over the last 15 years into the nature and role of biotech companies and investors. the gut microbiome – the trillions of microorganisms that reside in our They are uncovering multiple two-way intestine – has uncovered its far wider influence, including across many auto-immune communication pathways between belly H conditions, cardiovascular disease and even cancer. and brain, spanning neural, hormonal and immune-system signalling. Even then, few would have linked gut health to Parkinson’s, autism or Alzheimer’s. Yet gut and brain heath are far more intimately and intricately linked than previously imagined. The “gut-brain axis” is the focus of growing numbers of researchers, bio- New research into the “brain-immune- gut-axis” also challenges prior tech companies and investors. They are uncovering multiple two-way communication assumptions of how isolated the brain pathways between belly and brain, spanning neural, hormonal and immune-system is from the rest of the body and, in signalling (see Exhibit 1). The mechanisms, players and causalities within these path- particular, from the immune system. ways are still being elucidated. But thanks to more powerful genome sequencing and editing tools, and more sophisticated imaging and data analytics, evidence of the gut’s This gut-mediated back-door route influence on behaviour, mood and disease is accumulating fast. to the brain offers several potential This work is opening up a treasure chest of new drug targets and potential inter- advantages for drug developers. ventions that may help address neurodegenerative and other cognitive diseases that continue to elude traditional drug development. Preclinical and early clinical work suggests that metabolites generated by gut microbes can influence stress, depression and anxiety. Some gut microbes secrete neuroactive substances like serotonin and dopamine that directly stimulate the nervous system – though it is still unclear how, and to what degree. Axial Biotherapeutics Inc.’s lead program involves mopping up a microbial metabolite which may be implicated in autism spectrum disorder. The gut is also an important modulator of various hormones used to signal satiety – telling us to stop eating. Companies like New York-based Kallyope Inc. and France’s TargEDys are

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using that information to develop new Exhibit 1 kinds of obesity treatments, tackling the Bridges And Barriers behavioural aspect of the disease. “We now have very provocative evidence that we can influence various central nervous system disorders through the gut-brain axis,” summed up Nancy Thornberry, Kallyope’s CEO. Related work into the “brain-immune- gut” axis also challenges prior assumptions of how isolated the brain is from the rest of the body and, in particular, from the immune system (much of which resides in the gut). This is uncovering further potential therapeutic avenues for brain diseases, and is the focus of discovery work at Boston-based PureTech Health PLC and California-based Alector Inc. Meantime, the gut microbiome’s effect on cancer – mediated by the immune system – is another booming R&D sub- sector. “The gut-brain axis and oncology are the hottest areas, with the biggest market potential, in the [gut] microbiome space,” opined Isabelle de Cremoux, The vagus nerve – the longest cranial nerve in the body – fans out from the brain stem to the managing director at investment firm colon. It provides the brain with sensory information from important organs including the lungs, Seventure Partners, whose Health for heart and intestine, and, in the other direction, carries vital motor signals including telling Life Capital II is the company’s second your lungs to breathe and your heart to pump. The vagus nerve probably ferries messages from gut microbiome-focused fund, on its way many of the newly-discovered neuro-immune and neuro-endocrine signalling molecules, too. to raising €200m. The intestinal barrier (around our gut wall) and the blood brain barrier (protecting the brain More, Safer Routes To The Brain? from the systemic circulation) are natural blocks to gutbrain signalling. But their permeability is influenced by gut microbes, stress and inflammation. So the amount (and kinds) of information This gut-mediated “back-door” route reaching the brain from the gut, and vice versa, may vary widely. to the brain offers several potential advantages for drug developers. The first SOURCE: Nature Reviews Neuroscience (2012) is that therapies do not have to cross the blood-brain-barrier (BBB). The BBB ing of the gut-route to the brain may Cremoux, the modality is irrelevant; it’s is a tightly-built wall that prevents the help clarify the benefits (or otherwise) of about the quality of the science and of the majority of pathogens (as well as large alternative, non-drug modalities such as clinical evidence. “We invest in all these immune-system molecules like antibod- medical foods, nutritional supplements companies. You never know in advance ies) from crossing into the brain from the or probiotics in influencing health and which regulatory pathway is most suit- systemic circulation. The BBB has a vital behavior. These are subject to different able,” she said. protective role. But it is also one reason regulatory and marketing requirements many CNS drug candidates have failed: to drugs; traditional clinical evidence of Axial – Mopping Up Gut they cannot get to where they are needed. their efficacy in humans has, thus far, Metabolites For Autism The second advantage of the gut- been patchy. This may change as more Jim Blair, partner at US-based VC firm mediate route to the brain is safety: precise maps are created of the molecu- Domain Associates, would prefer the end therapies whose actions are restricted to lar mechanisms and pathways between product to be a classic small molecule – the gut – or which are based on naturally- gut, brain and rest-of-body, helping us though being able to test bugs-as-drugs occurring, human commensal microbes better appreciate the full impact of what initially, to elucidate mechanism, was – are less likely to trigger unwanted or we swallow. very helpful, he noted. dangerous side-effects than systemically- The flourishing work into gut micro- Domain is an investor in Axial Bio- delivered drugs. That will matter to biome has already created a pipeline therapeutics, which is developing a regulators, particularly in the context of of new modalities, including carefully- gut-mediated small molecules for au- highly prevalent conditions like obesity chosen strains of bacteria packaged into tism spectrum disorder and Parkinson’s and neuro-degenerative diseases. capsules (“bugs-as-drugs”), or selected disease. The company raised $35m in a Finally, scientists’ greater understand- bacterial metabolites. For Seventure’s de series B round this year, including Do-

Exhibit 2 The Meninges Of The Brain

Putative location of the lymphatic vessels in the brain Skull Superior sagittal sinus Periosteal layer Dura mater Arachnoid Meningeal layer villus Subdural space Arachnoid mater Subarachnoid space Pia mater

Gray matter Brain Blood vessel White matter Falx cerebri

main, Longwood Fund, Seventure and behavioral abnormalities. Treating mice cant differences in the mean levels of the Taiho Ventures. with microbiomes from autistic children metabolite between the groups. Starting Scientists have known for some years induced similar behaviors in the mice. levels of 4-EPS varied very widely among that as many as half of children with au- Axial’s team has used metabolite the subjects, however, making it tricky to tism spectrum disorder also suffer from profiling and other tools to investigate establish a baseline. gastro-intestinal upset. GI symptoms more deeply the molecular mechanisms “It’s early days, and ‘normal’ levels of such as constipation are observed in behind these findings. It discovered that 4-EPS in the general population aren’t many Parkinson’s patients over a decade autistic mice had particularly high levels well understood,” conceded Donabedian. before cognitive and motor problems of a microbial metabolite, 4-ethylphenyl- But 4-EPS was clearly elevated in a large show up. Until recently, no-one under- sulfate (4-EPS), and that reducing 4-EPS subset of autistic patients, and “these stood whether or how the GI issues linked levels improves behavior. It also found elevated levels appear to be correlating to the conditions’ better-recognized be- that feeding animals this metabolite with certain aspects of the ASD profile,” havioral and cognitive symptoms. led to behaviour abnormalities. That he said. It may be that the pathological Axial’s scientific co-founder Sarkis amounts not to definitive evidence of threshold for particular microbial metab- Mazmanian, professor of microbiology causality, but something close. “We think olites is lower in some autistic patients, at the California Institute of Technol- we’ve found something that is much as a function of both genetic predisposi- ogy (Caltech), and his team used these stronger than correlation,” said David tion and underlying metabolite profile. observations to design mouse models Donabedian, Axial co-founder and CEO. Axial is currently screening adolescent of both diseases. These have generated So the company’s polymer chemists patients with autism and GI symptoms compelling preclinical evidence of a gut- designed a small, non-biotherapeutic for inclusion in a Phase Ib/IIa clinical brain link in these conditions. Mice bred molecule, AB-2004, which mops up that study that will further elucidate the roles to display the behavioral features of metabolite before passing out of the body and relevance of these metabolites. The autism generated offspring that also dis- in the feces. Axial published preclinical company’s work may also help to more played GI symptoms; specifically, ‘leaky data in May 2019 showing that AB-2004 accurately, and helpfully, classify a very gut’, in which the intestinal barrier (or restored GI integrity and reduced 4-EPS heterogenous condition. gut wall – a crucial barrier protecting levels in mouse models of ASD. It also Mazmanian and colleagues’ work with us from outside world) becomes more has early evidence of a link, in humans, mouse models of Parkinson’s is also porous than usual. Significantly, treating between 4-EPS and two measures of uncovering potentially causal mecha- those mice with Bacteriodes fragilis, a social function. A study of 130 autistic nisms within the gut. Transplanting fecal human commensal bacterium, repaired children and 101 children from the gen- samples from human Parkinson’s patients the gut wall as well as correcting some eral population found statistically signifi- into germ-free mice led to parkinsonian

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behaviour in the mice, while healthy scientific officer. Bolen likened this de- ome-derived live bacteria. With what it samples did not. Mice designed to express cline to a “blocked drain,” causing protein described as one of the largest collections alpha-synuclein, a protein that mis-folds waste and other materials to accumulate of commensal gut bacteria in the world, in Parkinson’s patients to form damaging and cause damage. Vedanta has identified strains whose clumps in parts of the brain, did not show Kipnis showed that blocking men- gut-protective and immune-modulatory symptoms so long as they lacked gut mi- ingeal lymphatics in mice models of properties provide potential applications crobes. Motor deficits and alpha-synuclein Alzheimer’s accelerated disease pro- across infectious and auto-immune dis- aggregation in the brain both appeared gression. Other researchers have since eases, allergy and immune-oncology. The in such mice, though, if fed with short- highlighted the system’s role in clearing company raised an $18.5m extension to chain-fatty acids – an important category disease-associated proteins including its series C financing in May 2019. Outside of microbial metabolites. tau and alpha-synuclein from the brain. of the PureTech community, recently Axial hopes eventual treatments that Together, these findings have opened up listed Alector is focusing on genetic mu- emerge from these insights may improve promising avenues for drug discovery, tations that disrupt the brain’s immune both the behavioral and GI symptoms of most obviously in neuro-degenerative system. It believes these disruptions may Parkinson’s and autism. disorders associated with aging. be behind neuro-degenerative diseases PureTech, with Kipnis’ team (and tech- including Alzheimer’s. Lead antibody PureTech: Draining The Brain To nology licenses from the University of Vir- candidates targeting those mutations are Cure Diseases Of Aging ginia), is avidly combing those avenues in early clinical trials. PureTech Health is also going after new for new medicines that can help clear ways to treat brain diseases. One of its potentially pathogenic macromolecules Kallyope: Telling The Brain scientific collaborators in 2015 published from the CNS. Encouragingly, Kipnis’ 2015 You Are Full a paper in Nature describing an entirely paper suggested that age-related func- Kallyope is harnessing the gut-brain axis new component of the brain-immune-gut tional deterioration of lymphatic system to tackle another chronic disease that axis. Jonathan Kipnis, professor and chair could be reversed by supplying vascular remains under-served: obesity. of neuroscience and director of the Center endothelial growth factor C (VEGFC), Among the company’s lead programs for Brain Immunology and Glia at the which affects the health and permeability is a gut-restricted small molecule that University of Virginia School of Medicine of the lymphatic endothelium. “It was a stimulates multiple satiety hormones. and his team had uncovered a network of great experiment. Jonathan [Kipnis] in- Some of these hormones are well- lymphatic vessels within the meninges jected a VEGFC-expressing virus into the known, explained CEO Thornberry. But – the multi-layered membrane covering cerebrospinal fluid of old animals, and Kallyope’s scientists have found new, the brain and spinal cord (see Exhibit 2). after a couple of weeks, the lymphatic better-defined routes through which to The brain was previously believed to be vessels opened and started draining modulate their release. insulated from the body’s lymphatic and macro-molecules,” recounted Bolen. Thanks to extensive mapping of the immune systems by the BBB. (The brain The work is still at a very early stage: brain-gut circuitry using imaging and itself does not contain lymphatic vessels.) much remains to be uncovered about sequencing technologies, including Yet the lymph vasculature serves two very the detailed architecture of meningeal tracking cell-specific proteins using light important roles for the rest of the body: lymphatics and its regulatory pathways. (optogenetics) or small molecules (che- removing unwanted fluid and protein, But Bolen was excited: “We’ve isolated mogenetics), Kallyope has found ways to and immune surveillance – picking up lymphatic endothelial cells from mice, “elicit hormone release in a very rational warning signals from tissues that are sequenced them, and are starting to un- way.” It has also come across cell types used to mobilize an immune response. derstand their biology,” he said – a feat and hormones not previously identified The healthy brain needs both those ser- that would have been impossible without in the gut, according to Thornberry. vices too. Kipnis’ work helped elucidate today’s tools and knowledge. PureTech Tackling obesity through behavior- precisely how they are delivered. (It also is also working on delivery technologies change, rather than by restricting food complemented the discovery, by Maiken that leverage its growing knowledge of intake or blocking fat absorption, is not a Nedergaard at the University of Roch- lymphatics – including delivering small new idea. But past attempts to do so with ester Medical Center, of another part of molecule pro-drugs to mesenteric lymph drugs that interfered with neurotransmit- the brain’s waste-disposal system. The nodes to modulate the immune system. ters in the brain’s pleasure centers mostly so-called ‘glymphatic system’ flushes PureTech’s most advanced internal failed. Sanofi’s Acomplia (rimonabant), unwanted molecules out of the fluid in drug candidate is an immune-modulating which blocks cannabinoid receptors to between brain cells far more efficiently anti-galectin-9 antibody, expected to dull appetite, was rejected by FDA in 2007 than previously thought, by way of the reach IND stage in 2020. The company due to neurologic and psychiatric side CSF and blood vasculature.) also invests in others working along vari- effects. Where the drug is available, it car- Importantly, Kipnis’ work also found ous parts of the brain-gut-immune axis. ries cardiovascular risk warnings.Abbott “that the performance of the meningeal Among its external affiliates is Vedanta Laboratories Inc.’s Meridia (sibutramine), lymphatic system declines significantly Biosciences, whose therapeutic candi- a serotonin, dopamine and noradrenaline with age,” said Joe Bolen, PureTech’s chief dates are carefully chosen gut microbi- re-uptake inhibitor, was withdrawn from

the US and European markets in 2010. (such as short-chain-fatty acids) involved fat-blocking drug Xenical (orlistat). A The idea is that a gut-mediated passage in breaking down our food act on special- consumer study of 45 people showed that to the brain’s behavior and appetite- ist cells in the gut called enteroendocrine 70% felt fuller after taking EnteroSatys, regulation centers will prove safer and cells, which in turn trigger the release and felt that they had better control over more effective. Thornberry hopes that of appetite-regulating hormones like their eating. Kallyope’s multi-faceted gut-hormone PYY (pancreatic peptide YY), ghrelin or There is more to do to prove the product approach will lead to weight loss “sub- leptin. But what if other kinds of bacte- works: scientists do not yet understand stantially greater” than the single-digit rial proteins, more closely linked to the precisely how important ClpB is in host ap- percentage levels achieved, often only bacteria’s own feeding pattern, could petite control, nor do they have conclusive temporarily, by existing pharmaceuticals. mimic these hormones? TargEDys’ sci- evidence of causality between changes in Novo Nordisk AS, which sells a leading entists believe that a bacterial protein microbiota composition and host feeding share of insulins and GLP-1 agonists for called caseinolytic peptidase B protein behavior. If such evidence accumulates, diabetes and metabolic disease, signed a homolog (ClpB) may do just that, copying TargEDys may find the partners it needs research agreement with Kallyope in 2018. the actions of a satiety hormone called to distribute its product beyond France; The partners will identify peptide-based alpha-melanocyte-stimulating hormone Lambert added that the company might candidates using Kallyope’s platform; if (α-MSH). (In the context of broader work also consider developing the protein as successful, Novo will carry out further on the brain-immune system-gut axis, an active pharmaceutical ingredient, or as preclinical and clinical development. Fetissov also speculated that the immune a live bio-therapeutic. “We’re waiting for system may be involved in long-term appe- the regulation to be a bit clearer” around You Are Not Hungry, Your Gut tite regulation by gut bacteria. Antibodies, live-bugs-as-drugs, he said. Bacteria Are released in response to changes in diet or TargEdys also believes that gut-mediated gut microbiota, may cross-react with ap- Using The Gut To Enhance behaviour change is key to tackling obe- petite hormones like alpha-MSH.) Immuno-Attacks On Cancer sity. Its scientific co-founders believe that People with anorexia and related eat- Several companies are using gut-derived appetite regulation may involve not only ing disorders are found to have higher microbes and metabolites to re-direct host gut-to-brain signalling (including than normal levels of ClpB, while the re- the immune-system to fight cancer – hormonal signalling), but also the en- verse is true for many obese or overweight potentially enhancing the actions of ergy status and feeding behaviour of the patients. So TargEDys has developed a existing checkpoint inhibitors and other gut bacteria community itself. In obese pro-biotic designed to restore ClpB lev- marketed immune-oncology drugs. De- people, they speculate, bacterial-derived els in individuals who are overweight or finitive evidence of such enhancement hunger signals may compete with – and obese. EnteroSatys, a food supplement would take microbiome-derived drugs ultimately dominate – those from other available in France, contains a bacterial into the big league. hormones like satiety-inducing leptin, strain called Hafnia alvei 4597, originally Such evidence is not yet available. for example. isolated from raw milk cheese, along Clinical trials have begun, though, of vari- There is already plenty of evidence with bacterial-derived protein. “In our ous microbial mixtures chosen for their supporting the microbiome’s role in opinion, the problem [of excess weight immuno-genic actions. Evelo Biosciences, energy balance. Giving obese mice and obesity] is eating behavior,” said based in Cambridge, MA, has selected pre-biotics (to feed their gut microbes) TargEDys CEO Grégory Lambert. Entero- single microbe strains that are thought to increases leptin sensitivity. On the Satys works by “re-educating people on modulate various immune pathways on other hand, kwashiorkor, a severe form their choice of food and life-style,” and their passage through the gut. Its orally- of malnutrition, can be transferred from “helping them learn new behaviors.” delivered, cancer-focused “monoclonal people to mice by fecal transplantation. It does not suppress appetite, Lambert microbial,” EDP1503, in December 2018 Studies have shown that both anorexic emphasizes; instead it “normalizes it, began a Phase I/II trial in combination and obese people have an imbalance in restoring the natural [ClpB-mediated] with Merck & Co. Inc.’s market-leading their gut microbiota. These observations, mechanism” of appetite regulation. checkpoint inhibitor Keytruda (pembroli- coupled with more recent data around TargEDys cannot make any health zumab). The trial will span several cancer the dynamics of bacterial growth, may claims about EnteroSatys; no pro-biotic types, including colorectal, triple-negative support “a theory of genetic competition has been approved to do so in Europe breast cancer. Evelo has other programs in between the host and its microbiota for (See Box: Pro-biotics, Food or Drug?). inflammatory diseases. food sources,” wrote Serguei Fetissov, But TargEDys can show doctors and Seres Therapeutics Inc.’s SER-401 is a professor of physiology at the University nutritionists preclinical, clinical and mix of donor-derived commensal micro- of Rouen, France, in a 2017 article in consumer data supporting the product. A bial strains chosen to improve patients’ Nature Reviews Endocrinology. Fetissov “big” clinical trial is ongoing, according response to checkpoint inhibitor treat- and Pierre Déchelotte, also a professor to Lambert, with results expected early ment. It contains a bacterial signature at the University of Rouen, are TargEDys’ in 2020. Preclinical work suggests that found in melanoma patients that respond scientific co-founders. the bacteria does reduce food intake and well to immunotherapy; the idea is to Bacterial proteins and metabolites weight, though not as much as Roche’s transfer that gut microbiome advantage

24 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com RESEARCH & DEVELOPMENT ❚

to others. The candidate is in a Phase Ib trial in metastatic melanoma, in ❚ PROBIOTICS: FOOD OR DRUG? combination with Bristol-Myers Squibb Increasing numbers of companies outside the regulated pharmaceuticals industry Co.’s Opdivo (nivolumab); preliminary are capitalizing on scientists’ growing understanding of the gut microbiome’s read-out is expected in 2020. AstraZeneca role in health and disease. They are variously developing and marketing pre- and PLC’s MedImmune signed a research probiotics, food supplements and indeed food products, all of which offer lower- agreement with Seres in March 2019, hop- cost routes to market than conventional drugs, but which are limited in the health ing to glean more about the mechanics of claims they can make. Several are working at the boundaries of probiotics and microbiome-enhanced cancer immune- pharmaceuticals, for instance seeking to engineer live micro-organisms specifically therapy. The big pharma will pay $20m to alleviate particular CNS symptoms. Emergent categories include “psychobiot- in fees and gets an option to negotiate ics” – probiotics used to treat psychiatric disorders. rights to SER-401 and other candidates. Meanwhile, BMS itself signed up As the boundaries blur between drugs and foods, the need for clearer definitions in December 2018 to collaborate on a and regulations is increasing. In Europe and the US, food or food ingredients cannot clinical trial of Vedanta Biosciences Inc.’s be associated with the treatment of a disease, only with maintenance of normal bacteria-based mixture VE800, combined physiological functions. But are probiotics food? The European Food Safety Author- with Opdivo, in advanced and metastatic ity shies away from such questions, pointing instead to the European Commission cancers. The study is planned for 2019. and member states. VE800 contains 11 clonal strains of human commensal bacteria selected, like The US FDA might categorize probiotics Seres’, to amplify the effects of check- as dietary supplement, food ingredient, point inhibitors. BMS is testing its drug medical food or drug, depending on the with multiple different therapy-partners intended use. But even then, neither the that might enhance Opdivo’s effective- category limits nor the precise evidence ness, and thus its competitive standing, requirements are entirely clear. Makers of in the red-hot immune-oncology field. medical foods, for instance, can communi- Paris, France-headquartered Enterome cate benefits in the “dietary management Bioscience SA has made its drug can- of a disease,” but only if said disease has didates out of gut microbe metabolites, “distinctive nutritional requirements,” as established by “medical evaluation.” (In chosen for their high degree of similarity Canada, regulators in 2016 authorized a probiotic claiming to moderate anxiety to various solid tumor antigens. EO2401 and promote a healthy mood balance – a product to enhance the brain-gut-axis.) contains three such “onco-mimics,” matched to tumor antigens that are highly As for bugs-as-drugs (carefully-selected strains of bacteria packaged up as prescrip- expressed in some kinds of brain tumor. tion biopharmaceuticals), the FDA has not yet approved such a therapy, though Also, investors see potential for Axial several live gut microbiome-based products are in late-stage clinical trials. There Biotherapeutics’ gut-selective technol- is no firm regulatory framework, but draft guidance exists, and FDA is engaged in ogy in oncology: Taiho Ventures’ $10m discussions with industry on how to treat this emerging category. contribution to the company’s B round in June 2019 is earmarked for that purpose. “There’s lots of enthusiasm around the [gut] microbiome and its effect on Researchers have found compelling a “healthy” or “disease” state for a given cancer,” remarked Domain’s Jim Blair. correlations between levels of specific individual are elusive. “It may be that elements of the microbi- gut metabolites and certain disease phe- Yet even as the contours of the gut-brain- ome can trigger some of the epigenetic notypes, but only rarely has a causal link immune axis are being uncovered, its processes” now known to be involved in been established. There is also more to relevance to disease is unquestioned. The cancer, he said. learn about redundancies – what kinds top dozen or more chronic illnesses can be of back-up mechanisms may come into divided into either diseases of the immune A Neuro-Immune Super System? play when a given pathway is interfered system or of the nervous system, said Bo- Scientists now understand far more with? There remain knowledge gaps len. In the face of changing diet, life-styles about the gut microbiome and its links around the gut microbiome itself: sci- and environmental stressors, these are “the to the brain than even just five years entists still do not know the function of only two adaptive systems” individuals ago. But we are still at the early stages of many of the genes within gut microbial have. Given the cross-talk between them, mapping out the multiple mechanisms by genomes, even among well-studied spe- “they might more realistically be thought which our resident bacterial communities cies. And the parameters of a “normal” of as one super-system.” influence our mental and physical health. gut microbiome remain to be determined: IV124296

For now, “there’s a lot of cataloguing go- we understand that species diversity is Comments: ing on,” said PureTech’s Bolen. important, but details of what comprises Email the editor: [email protected]

What is a medicines shortage? The answer may seem obvious, but the fact that European regulators have only now come up with a commonly agreed definition suggests otherwise.

BY IAN SCHOFIELD n the EU, shortages are defined differently depending on the member state concerned. Reporting requirements vary widely, as do methods of measuring In July 2019, the EMA and Europe’s and addressing shortages, and it has become increasingly clear that taking a Heads of Medicines Agencies released common European approach is the only way forward. two new guidance documents that Efforts to do so have, until now, had limited success. But in early July, after included an EU-wide definition of a three years of work, the European Medicines Agency published new guidance intended shortage and recommendations on I to help stakeholders deal with drug shortages. The guidance includes a common the kind of shortages that need to be reported. definition that regulators hope will help to kick off the next stage in the drive to tackle this knotty problem. Drug shortages are not a recent phenomenon. Pharmacists in Europe have faced sup- Previously, the lack of a clear definition meant efforts to detect and coordinate ply disruptions on a regular basis for many years, particularly in the hospital sector. the management of shortages in the EU Still, a survey by the European Association of Hospital Pharmacists (EAHP), published were inconsistent. in November 2018, found not only that shortages were still occurring despite the best efforts of supply chain actors, but that the situation had worsened since its previous So what? A new task force has been survey four years earlier. looking at how to address disparities “In a number of ways, these issues have become more problematic since the 2014 in the way that EU member states survey,” the EAHP said. Hospital pharmacists were spending more and more time try- collect and evaluate information on ing to obtain information about shortages, and often they did not have enough – or drug shortages, how that information is any – advance warning to allow them to order substitute products where available. shared among regulators, and how it is Around 90% of respondents across Europe said shortages were a recurrent problem, communicated to others such as health with many experiencing issues on a weekly or daily basis. care professionals and the public. Antimicrobial agents were the type of medicine most frequently reported as having shortage problems, followed by vaccines and oncology drugs. The non-availability of medicines can be more serious for certain diseases such as epilepsy, where the use of

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alternative drugs is not always possible. Exhibit 1 The European wholesaler association How Often Does Your Hospital Pharmacy Experience Medicine Shortages? GIRP agreed that the problem had grown in recent years. It complained that full-service distributors regularly encounter difficulties in supplying a full range of medicines. 11% On the regulatory side, the European Medicines Agency pointed out that in such cases patients might have to be given less 35% 16% I Daily effective alternative medicines, or prod- I Weekly ucts that might increase the risk of medi- I Monthly cation errors or lead to adverse events. I Occasionally The European Society for Medical On- cology (ESMO), which held an awareness- 38% raising event at the European Parliament in April 2019, went as far as to speak of a “public health emergency,” pointing out that, particularly in the cancer area, there may be no alternatives to medicines Note: EAHP survey results include 1,666 responses from 38 countries whose supply is interrupted. One thing all parties agree on is that the problem urgently needs to be ad- facturing medicines in France came from an EU-wide definition of a shortage and dressed, and that this cannot be done by just three countries: China, India and the recommendations on the kind of short- any single country alone. US. (Also see “Make Them In Europe: The ages that need to be reported. French Solution To Drug Shortages” - Pink The task force, which was set up in The Reasons Sheet, 30 Oct, 2018.) 2016, is co-chaired by Kristen Raudsepp, The causes of supply problems are well ESMO said that countries with small head of the Estonian drugs regulator known, ranging from raw material manu- markets and relatively low drug prices Ravimiamet, and Noël Wathion, deputy facturing problems and a decline in the were especially vulnerable because of executive director of the EMA. Raudsepp number of suppliers, to safety concerns, the lack of incentives for manufacturers told In Vivo that shortages and avail- drug pricing and procurement policies, as to keep supplying the market. It also ability problems were complex and their well as the failure of companies to place suggested that parallel trade was “an causes “multifactorial with no quick or maintain products on the market. important cause of medicines short- solutions.” She said that drug regulatory Concentration and globalization in the ages” in certain countries, although GIRP authorities were just one of the many ac- manufacturing segment are key issues. disputed such a link. GIRP said “our tors involved in availability issues, but GIRP noted that the “complexity and initial reflection has not uncovered any that they played “an important role in globalization of production, where ac- real-world evidence to support this, and their prevention and management. By tive pharmaceutical ingredients [APIs] it is notable that many academic stud- bringing together experts on shortages are sourced in one country, products are ies on this subject recycle stakeholder from every EU member state the work of produced in another one and packaged in claims rather than give concrete facts the taskforce lays the foundations for an a third country leads to a high sensitivity and figures.” improved and harmonized EU approach for the slightest failure, which then can in addressing the problems of medicines create a general shortage across Europe.” Change In The Air? availability issues.” Medicines for Europe, the association European regulators have highlighted She added that the new definition representing manufacturers of generic that the lack of a clear definition has agreed by the task force and stakehold- and biosimilar medicines, agreed: “The meant that efforts to detect and coordi- ers would guarantee the early notifica- evidence is now compelling that many nate the management of shortages in the tion of shortages, complement national national markets across Europe are re- EU have been inconsistent, while differ- definitions and allow national competent lying on too few suppliers for essential ences in reporting requirements have authorities to decide on the “criticality” life-saving medicines in both the hospital made it impossible to make comparisons of the medicine and the availability of and ambulatory sectors.” of the situation in different countries. any alternatives. It was also, she said, The problem was highlighted in a However, things could be about to im- “simple, short and concise.” French Senate report in 2018 that men- prove after a task force set up by the The first iteration of the definition pro- tioned the “recurrent non-availability” EMA and Europe’s Heads of Medicines duced by the task force in December 2017 of certain medicines such as anticancers Agencies produced the first fruits of its was anything but: “A drug shortage occurs and vaccines. The report also noted that labors in July 2019, in the form of two when there are changes to either demand 35% of the raw materials used in manu- new guidance documents that included or supply of a drug, and demand can no

EAHP SURVEY longer be met. A drug shortage causes EU legislation requires the notification unexpected and unplanned temporary to be made no less than two months be- BY THE NUMBERS unavailability. The total stock across all fore the supply interruption, but the new levels of the national supply chain, across guidance says MAHs should notify the all geographical regions, cannot meet authorities as early as possible, as soon demand during a drug shortage.” as the shortage is confirmed. There may The definition subsequently under- also be national reporting timeframes went a number of iterations, and a much that should be taken into account. slimmed down version was presented in November last year at an EMA workshop Public Communications 91.8% held to gather the views of all interested A key question when dealing with a short- of survey participants parties. This stated simply: “A shortage age situation is how best to communicate reported medicines shortages of a medicinal product for human and relevant information to the public, in- as a current issue veterinary use occurs when supply can- cluding health care professionals. As the (compared with 86.2% in 2014) not meet demand at a national level.” EAHP said in an updated position paper Following a targeted consultation with in June this year, “only a comprehensive industry, the definition was later slightly communication strategy on shortages reworded to read “does not” instead of targeting all European states will ensure “cannot.” It has now been formalized that all supply chain actors, including in a new guidance document that was hospital pharmacists, receive adequate published by the EMA on July 4, entitled information on the shortage of medicines Guidance On Detection And Notification in their countries.” months 2.2 Of Shortages Of Medicinal Products For The task force has been working on this duration of a typical Marketing Authorisation Holders (MAHs) too, and on July 4 the EMA published a medication shortage In The Union (EEA). second guidance document explaining The definition “clarifies regulators’ the key principles and examples of good expectations with respect to minimum practice for communication to the public obligations of supply chain actors to on shortages as well as availability issues ensure continuity of supply of medicines relating to the revocation or cessation of 77% while paving the way for harmonized re- marketing authorizations. The document of survey participants said porting of shortages across the EU/EEA,” includes “key principles and examples generics were the most common Raudsepp said. of good practice,” although the EMA drug type in short supply The EMA guidance also explains which stressed that it was intended “for guid- issues should be reported: i.e. all shortages ance only.” It said that implementation that are currently affecting one or more of communications practices “should be EU member state, and all impending/ a matter for EMA and EU national com- piperacillin/tazobactam anticipated shortages that are expected to petent authorities taking into account was reported as the medicine affect one or more EU member state. This available resources and the communi- that experienced the most includes all shortages that have occurred cation needs within their territory.” It frequent shortages by or will occur because of regulatory issues, recommends that the EMA and national respondants in 18 dierent quality defects or any other causes, such authorities use systematic listing – usu- countries as good manufacturing and distribution ally in the form of a catalogue – to com- practice issues, batch failures and medi- municate information about shortages. cine product recalls. It says that marketing In the case of “high-impact” shortages, authorization holders are in the best posi- consideration should also be given to tion to provide relevant supply information using high-profile communication tools 67% “as they have visibility of their stock, both such as press releases. of respondents said their national and global, taking into account country had a system for foreseen shipments from their manufac- Collection And Evaluation Network reporting shortages turers.” A template for notifying shortages Aside from its work on the two guidance accompanies the guidance. documents, the task force has been look- The information provided will be used ing at how to address disparities in the way by the relevant authority to assess the that EU member states collect and evaluate situation. It should therefore be “as ac- information on drug shortages, how that Only 56% curate and up-to-date as possible, while information is shared among regulators, judged it to be eective being comprehensive and concise at the and how it is communicated to others such same time,” according to the guidance. as health care professionals and the public.

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Raudsepp said a key objective of the workshop, where it spoke about the issues rights issue that everyone should tackle.” task force was to set up a virtual network that particularly affected oncology drugs. Another MEP, Soledad Cabezón Ruiz, of experts from human and veterinary More recently, in April this year ESMO picked out three key challenges: agencies across the EU to share informa- organized an event at the European Par- • industry and manufacturers should tion on availability issues and to provide liament where it declared shortages to have the obligation to supply, and this a discussion forum for collaboration. be a “public health emergency.” Josep supply must be assured and backed up “This network was set up in 2018 and Tabernero, president of ESMO, said that by sanctions; its operation is currently being piloted the situation was particularly acute in • parallel trade must be controlled; to fine-tune operational aspects,” she the oncology area, pointing out that both • and a database should be developed said. “The key role of the network is to new compounds and “old, inexpensive to see which factors contribute to share information in relation to short- essential medicines” were affected, but exacerbating this issue. ages and availability issues of authorized that shortages of the latter “tend to be It was also noted at the meeting, Taber- medicines in Europe, irrespective of the overlooked.” nero said, that the Dutch government has licensing route of these medicines in ac- “In oncology, shortages of generic, off- been addressing the shortages question cordance with agreed criteria.” patent medicines are more pronounced for a number of years, and has formed The operation of the network will be because most often the medicines can- a medicine shortages working group described in a best practice guidance for not be substituted. The patient’s treat- that meets twice a year with stakehold- regulators on sharing information within ment is halted until the medicine be- ers, together with a shortage reporting the EU regulatory network that will be sub- comes available,” Tabernero told In Vivo. center. “The Minister for Health in the mitted for adoption in December 2019, after ESMO said the April event was impor- Netherlands has asked for an investiga- which the pilot phase will be completed. tant because “it brought together all key tion of vulnerabilities in the supply chain Two other items are scheduled for stakeholders, policymakers, the Europe- of medicines at EU level and called for adoption in December: a set of recom- an Commission and patients to hear their further collaboration at the European mendations on how to measure drug concerns and to convey the seriousness of level,” he declared. shortages, and an “EU Regulator’s Man- this issue at the EU level.” The event also Stakeholders at the event agreed that ual,” a compilation of existing tools for marked the launch of a “call to action” an EU-level study was needed, and that notification, coordination, assessment, signed by 20 members of the European two workstreams should be pursued: ad- communication and reporting of drug Parliament and 16 stakeholder groups dressing the root causes of shortages, and availability issues. to highlight ways of tackling this issue, increasing collaboration and information as well as a number of concrete actions sharing. ESMO would like the study to be Language Issues to be taken. They include developing an conducted by an independent advisory Another issue that can exacerbate the im- EU-wide study on the issue of medicines EU body such as the European Economic pact of a shortage is the language barrier. shortages and their overarching impact and Social Committee. Medicinal products in the EU are labeled on the EU through independent advisory Tabernero said ESMO would be con- in the local language, which can make bodies on social and economic affairs, ducting its own a new survey to “assess it difficult for a country experiencing a and “positioning inexpensive, essential the situation on the ground,” and would shortage to source a product from another medicines shortages as a key political continue to collaborate with policymak- country. Multilingual packages would priority for the EU 2019-2024 legislature.” ers, the new European Commission and allow industry to use the same labeling Tabernero, who also heads the Medical the EMA, among others, “to work towards in a number of EU countries and were an Oncology Department at the Vall d’Hebron finding a solution to mitigate this issue, important measure to mitigate imminent Barcelona Hospital in Spain, said that which should not exist in the EU, or medicine shortages, Raudsepp observed. stakeholders at the event “unanimously globally.” She said the taskforce had “further agreed” there was a need for a suprana- He also highlighted that certain pro- simplified and minimized labeling re- tional solution, and that they supported curement practices for generic medicines quirements” and that these measures ESMO’s call to action. It was agreed that could result in medicine shortages. would be reflected in a revised Quality a coordinated strategy was needed, with “The choice of procurement method Review of Documents (QRD) template dialogue among the various stakeholders and type of award should be based on and in guidance on exemptions to the and partners, and not only at the EU level. a comprehensive analysis of the market labeling and package leaflet obligations One MEP at the meeting, Lieve Wierinck, conditions, for example, the number in the centralized procedure. said it was important to tackle medicines of suppliers in the market, the market shortages “from a collaborative and inter- capacity, demand for the product, its ESMO Initiatives national perspective.” cost, plans for future use, etc,” he said. Meanwhile, ESMO has been working on Wierinck said that “as a pan-European “When risks to supply security are iden- its own activities to raise awareness of issue,” the EU needed to tackle the issue tified in this analysis, the tender criteria the causes and effects of drug shortages centrally and to convince its citizens that and agreements should be adjusted to in the anticancer area. The society was medicines shortages are “not a political mitigate this risk. For example, extended one of the participants at the November issue but rather a fundamental human contract periods could be used, or agree-

ments that ensure supply guarantee.” freight contingency arrangements” and Tabernero also recommended identify- re-routing deliveries away from the chan- ing good procurement practices that “ad- nel ports. (Also see “UK Pharma Decries dress predictability and profitability for Govt’s Latest No-Deal Brexit Planning” medicines manufacturers.” These could The possibility of - Pink Sheet, 27 Jun, 2019.) include using tender criteria that include Then, in July, new no-deal Brexit legis- price as well as other factors, such as the shortages in a no-deal lation on serious shortage protocols (SSP) manufacturer’s quality track record, the took effect, under which pharmacists will harmonization of tender cycles within Brexit scenario is a be allowed to dispense alternative prod- and across countries, as well as national ucts, including generics and drugs with procurement for medicines experiencing real worry, and the UK different active substances, in the case shortages. of “extreme” shortage scenarios. Under government has the new rules, the Secretary of State for Brexit Health and Social Care could issue an SSP As in most things, of course, Brexit casts produced a number of in cases of serious shortages of medicine, yet more uncertainty over the future sup- after consultation with medical experts. ply of medicines, particularly if the UK documents advising The SSP would specify an alternative leaves the EU without a withdrawal deal product or quantity other than that on or a transitional period. There have been pharmaceutical the prescription that could be supplied some anecdotal reports of medicine short- by a community pharmacist. This could ages in the UK being attributed to the lack companies on what be an alternative strength or formulation, of clarity over the UK’s future ties to the a generic or therapeutic alternative, or a EU, but there does not seem to be much to do to mitigate the reduced quantity of the product. (Also see concrete evidence of a direct correlation. “‘No-Deal Brexit’ Pharmacy Substitution Noting that shortages have complex risk, including Rules Take Effect In UK” - Pink Sheet, 2 and multifactorial causes, Tabernero Jul, 2019.) said it was “hard to determine whether building up an Action is also being taken at EU level. the recent increase is due to Brexit or to Raudsepp noted that since May 2017 Eu- other reasons. However, it could also be additional six weeks ropean regulators had been issuing guid- that Brexit is [indirectly] contributing to ance and urging companies to make the the recent increase in shortages, through of stock over and necessary changes, such as transferring the contingency planning, including for marketing authorizations, rapporteur- example, the stockpiling of medicines.” above normal levels. ships and batch testing from the UK to the But the possibility of shortages in a EU to minimize the risk of supply chain no-deal Brexit scenario is a real worry, disruptions in the event of a no-deal exit. and the UK government has produced She said the EMA and the EU regulatory a number of documents advising phar- authorities were “continuing to monitor maceutical companies on what to do to the situation and advising companies on mitigate the risk, including building up the necessary steps to take and urging an additional six weeks of stock over and them to make these changes on time in above normal levels. order to allow continued availability of In its latest advice, published in June, medicines once the UK has withdrawn the government said that “significant from the EU.” disruption” to supplies could be expected IV124302 in a no-deal scenario. It proposed a num- Comments: ber of further actions including “express Email the author: [email protected]

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The European MedTech Forum’s CEO panel set out to address high-level global, long-range issues, but from the start it got log jammed in regulatory issues. Not in the script perhaps, but wholly understandable, as new EU regulations will have huge strategic importance for how companies do business – and in the case of start-ups, if they can continue to do business.

BY ASHLEY YEO ad there been a table in front of him, ResMed CEO Mick Farrell would have leant forward and banged it hard with his fist. Twenty minutes into How medtechs innovate in the second a one-hour session at the 2019 MedTech Forum on burning issues for decade of the millennium, how they stay global medtech CEOs, and we were talking – still – about the current and ahead of changing consumer needs and potential effects on business and patient care of the EU Medical Device physician demands, and how they get Regulation; “we” being the Peters Surgical (Bobigny, France) and Werfen (Barcelona, the best value from the digital revolution H Spain) CEOs Thierry Herbreteau and Carlos Pascual, along with Farrell. that is now underway are the critical issues that will determine the shape of Granted, it is the biggest short- and medium-term issue occupying the minds of the industry in the future. those medtechs who want to continue serving the EU market, post-MDR. Is this level of attention a surprise, given the traditionally “technical management” status of regula- But while the strategic planning is tory themes? Well, yes. And there are other issues of a traditionally strategic nature to underway, customers’ current needs tackle: value-based health care, digital, the new generation of medtech thinkers and must be serviced as usual, and that new ways of addressing clinical needs against rising demand. means senior management sometimes But there’s no hiding the truly pressing themes from CEOs, some of whom are now getting diverted onto ostensibly day-to- regarding the EU Medical Device Regulation (MDR) as a major and unnecessary threat, day issues, as witness the debate raging while others are seeing it – and maybe regulation in general – as a potential strategic about the effects of the new MDR on the tool. For the latter – to borrow a favorite phrase of the Association of British Health- continuum of patient care in Europe. Tech Industries’ (ABJI) Phil Brown – regulatory is no longer just an internal corporate mechanism championed by the group’s “sales prevention team.” So what? Future medtech CEOs will have So, the three CEOs found themselves locked in an exchange of views on the value different values, digital nativity and the and need for the EU MDR, which has already caused a major stir among notified bodies, ability to think agile and find creative the linchpins of the new approach regulatory regime used in the EU medtech industry. solutions to issues. And while regulation may have once seemed like a strictly non-CEO theme, in the world of continuous medtech evolution, CEOs are now seeing the value of focusing

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From left to right: Ingmar de Gooijer (moderator), Mick Farrell, Thierry Herbreteau and Carlos Pascual on apparently less high-profile – but no by French notified body G-Med’s presi- Farrell’s view that the MDR is the right less vital – themes within their groups, dent, Lionel Dreux, to me in conversation thing, but is coming too quickly. for these will also dictate how well they at the MTF. But the most obvious hurdle Herbreteau is, if anything, even more fare commercially in the future. in the whole MDR exercise is indeed no- concerned about the topic. “First of all, They had just heard Rob ten Hoedt, tified body preparedness: there are now we need to adapt. But as an EU company, addressing the MTF audience at the just two notified bodies accredited to I am really concerned” about the effects Paris Cité des Sciences et de l’Industrie do work under the MDR. As a reminder, of the MDR and IVDR. Peters Surgical’s building, voice the view that the MDR is there are still 58 notified bodies operating business is in surgical products steril- necessary, must be adapted to, and will under the (three) directives. izing and single-use products, with a not bring the unremitting gloom that “We may have five notified bodies strong international focus. The CEO’s many of its critics fear. Not all the panel within the next 12 months. But all the ambition is to double growth, which agreed with the detail of the Medtech inputs, i.e. products, might get stuck would need quick and efficient access to Europe president as he gave his open in bottlenecks, and so we don’t get the country markets. support for the MDR; but none denied the outputs – i.e. products on the market,” “In Europe, it has always been so that soundness of the principle. Nevertheless, said Farrell. “There is no question that we could get in there with innovation first the three offered their own slants on how improvements needed to be made to the – but that’s no longer the case. It’s going best to introduce radical new regulation. CE mark, and the MDR is the right direc- to be more complicated and more bureau- tion, but I think the implementation is cratic.” It is now easier now to go to the MDR – Too Much, Too Soon too fast and it needs to be phased in a US than to Europe, where there is now a Farrell would not say that the MDR was much more longitudinal way.” The EU level of unpredictability. “Companies will wrong or unnecessary, precisely, and should be looking at a five- to 10-year go where they know, and the US has done qualified his criticism of the current rush plan, instead of 12 just months, he said. a lot to speed up its processes.” Europe to install the regulation by saying that it In fact, there are less than 12 months seems to be losing the battle there, he said. could be an error to “do the right thing remaining to transition before the MDR Many cannot help seeing the MDR too early.” This is another way of saying is implemented on May 26, 2020. as another barrier to market. “The big it could be the wrong thing right now, Farrell is not “massively concerned” groups, and those in the middle, can and could do harm in terms of access to for his own business under the change adapt. But for start-ups, it’s a disaster.” patient care. The European Commission, from Directives to MDR, but he fears that Europe already has a lack of funding and for its part, is not ready to embark on some orthopedic products (Farrell is on now, with stricter access, what’s left? he contingencies. This position was aired the board of directors of Zimmer Biomet) asked. His frustration is evident, as he publicly by commission head of unit might not be able to get through the knows this money could be spent better. Salvatore D’Acunto in an MDR panel ses- “funnel.” These are “great technologies,” “I would prefer to invest in R&D or in sion at the MTF moderated by this author. he said. Maybe that’s the case for many contact with customers. We need to invest So, no contingences, a view backed up companies and their innovations, hence in people. And no one has proven that

European patients are less well treated onstrate that?” It’s a senseless demand There is a danger of not seeing the than US patients. I still don’t get it!” from the smaller company’s point of view. wood for the trees, so Farrell is all in favor of industry working with Brussels to find Quality Will Not Be Enhanced Dropping Some Products more practical solutions and highlight Under IVDR From The Portfolio where the “good” of the regulations lie. The IVDR may be two years further away, The MDR and IVDR will force companies “Let’s time it so we don’t bring some bad, but Werfen CEO Pascual is as concerned into decisions they had not planned to like stopping the innovation at start-ups about it as his medical device counter- broach. Herbreteau pointed out the need and repeating trials of products we know parts are with the MDR. With over 30 for his company to refocus on what it are efficacious.” years in the industry, especially in IVDs, wants to keep or discontinue. The cost he now sees a major challenge in adapt- of reproducing some data would be too Digital Forced Up The Agenda ing and providing more value over the high, he asserted. There will be a prag- It is not all about the MDR, however, and next ten years – a time when there is matic impact on many small companies Farrell was clearly bursting to shift the expected to be a significant increase in – “many will suffer, some of them will debate forward. He deftly switched the health care demand. But there is a chal- be dying.” Pascual agreed, speculating subject to digital health and how to in- lenge in how to pay for it, as the way it that some small companies do not have a novate. “Regulation is a toughie, but how has been funded – especially in Europe brilliant future in front of them, because we innovate is a good area to talk about,” – over the last 30 years is not sustainable. adapting to new regulations is very com- he said. ResMed (Respiratory Medicine) The IVDR will not help this drive to plicated for them. has focused strongly on digital health provide enhanced value. Pascual said the Farrell had a similar take on this. “It and engaging the patent directly. ResMed industry was focused on that as part of will stop some local innovation; there has helped 85 million people with sleep its current remit. The frustration for IVD will be some start-ups that decide to leave apnea and COPD to breathe, said Farrell, players that have become accustomed to the EU to go to California or Asia,” for whose ambition is by 2025 for ResMed to the existing IVD Directive is palpable. “It instance. For its part, ResMed will make change a quarter of a billion lives in and is difficult to imagine that in the next two some incrementally higher innovations out of hospital care. years we will be able to go through new in Singapore than in some of its current People want to see their data on their regulatory process with all products still developments in Europe because the new own phone, he told the MTF delegates. on the market,” he said in a generic refer- regulations are so strict. With patients engaged in their own care ence to IVD industry players. “We are not using digital health, ResMed said it gets just talking about new products, but all 87% adherence among patients. They those tests that have been on the market get all their health questions answered, for the past 30 years that now have to go while costs are lowered, including a 50% through this new regulatory process.” drop in labor costs. On top of that, clinical Adapt and get on with it is the stock data is generated for ongoing research. It CEO view how to broach such problems. “First of all, we need once took seven years to do a randomized But there is almost a feeling of a sense clinical trial; now it can be done in seven vacuum. “For us as company, we are to adapt. But as an weeks with the data being collated. working on it, but the new regulation Digital is now “the reality” in medicine will do nothing to increase the levels of EU company, I am and care delivery, and AI is in daily use quality that we provide,” Pascual reiter- for ResMed in India, for instance, where ated. “We will continue to work in the really concerned” the flow of patients is very large. Digital same way; we see this as a regulatory tools are being adopted at rapid pace in issue and as a very important challenge Africa, too, but the bigger question is for the industry and citizens of Europe – Peters Surgical CEO about how to fund it. “Digital is key, and two years from now.” we need to move to digital solutions.” There will likely be an impact on Wer- Thierry Herbreteau But Farrell prefers the term “machine fen’s business, and yet Pascual is adamant learning” to AI, which is an overused that the quality of his company’s products term in his view. ResMed already has will not improve simply by the new IVDR two or three services and solutions that being brought into place. “So, we have use machine learning and look at how to to adapt, increase our costs, invest less engage patients with their care. in other areas to compensate for things Crucially, the medtech industry must that do not bring any value. When you commit to “ethical by design,” to engen- have tests that have been working well der patient trust. Ethics, security and for 20 years with no patient issues at all, privacy by design were essentials, and demonstrating value all the while, why do trust was the fundamental element that we now have to do clinical trials to dem- medtech companies needed with the end

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patients, said Farrell. “We take ethics and istic, and, more than any other watching privacy by design incredibly seriously, what you do, not what you say,” said particularly in the digital health space.” Farrell. They also want to see the CEO Trust is hard won, and easily lost, or, as walking the walk, spending time out in Farrell put it, “Trust is something that the community and giving back to the runs away on a horse and comes back “Trust is something community. on foot.” The new generation relies on com- that runs away on munities and their own connections. New Generation Of Leaders They are also ready to be more mobile, Concerns have been aired in the past a horse and comes prepared to have a career spanning 10 about the attractiveness of the medtech jobs, where, in the past, two was more industry for new entrants, and about who back on foot” the norm. will lead the industry once the current vintage of CEOs decides to make way The Value-Based Setting for the next candidates. But any worries – ResMed CEO Value-based health care (VBHC) has been are no longer justified, if they ever were, slow to arrive, but its advantages are com- especially now medtech is on the cusp Mick Farrell pelling: in France for instance, there has of a digital future. To put it in context, been a lot of change around VBHC over “The generation before us was also wor- the past year. “There’s differentiation ried about us,“ Farrell observed, and yet between cloud-connected reimbursed the current crop has done passably well. sleep apnea therapy and non-connected He added, “I think we’re going to be just therapy,” said Farrell. “It’s revolution- fine.” And, of ResMed, he said the new ized this country’s care, and over time crop of managers would revolutionize the has ensured that patients have higher company better than the current manage- compliance and stay out of hospital.’’ ment.. “They’ll take it to the next level.” And it will work, because governments Many staff are now wanting to join are looking at the long-term return on Peters Surgical, said Herbreteau, and their health care investments. It is taking one of the first questions they ask is time because it needs to be pragmatic. about the company’s corporate social there to serve the rest of the organization. The VBHC approach has been changing responsibility (CSR) policy. They want “They are managers because the rest of outcomes in the past few years. All prod- to know, beyond making products and the organization needs developing and ucts now tend to take into consideration profits, for instance, about energy saving, coaching, and it needs help to perform their effect on patient outcomes, the about manufacturing sites around the properly.” patient experience and how to control globe, and about whether the company Honesty, integrity and trust are at the health care expenses. Ten years ago, is a good employer. top of Farrell’s list of candidate’s assets. the industry was thinking safety and in- Ethics is not just by design, the French- But also, “are they passionate about tended use. Now it is more of a long-term man opined, but also “by culture.” In what we want to do at ResMed?” Specific vision and a joint challenge with gover- fact, it is a matter of culture and values. talents and skills are needed, people who nance, not just an industry challenge. “If we’re still in the belief that it’s not at- understand deep neural networks, ad- tractive, one way to make it more so is to vanced analytics, can think agile in terms Leadership Styles play on the ethics and the CSR side, and of profitability versus waterfall, and CEOs are many things to many people, care more about patients.” can use different creative approaches to but should they be ready to take a pub- Werfen looks for values and “good problems. “They are the thinkers who can lic view on societal issues? For Farrell, people” that will represent the company. reinvent our industry. We’re looking now it should never be about politics, but “We look for people with values over and at the talent we need for 2025, specifically policy and value. For Pascual, the public above their qualifications.” Leadership those who can focus on the patient and face should not go much further than people almost self-select. “If you want create the industry we want.” CSR issues. But CEOs must be ready to to be a manager in the medtech industry, The CEOs agreed that the industry react to politically inspired changes, the first thing you have to do is look to needs people who are ready and capable such as Brexit. For Herbreteau, it is a lead people properly and enjoy doing of making changes, taking risks, and case needing to be prepared, not over- that. This is a challenge, and the most those who have extraordinary skills and preparing for the unknown, and ensur- difficult position in a company,” the who know that it is acceptable to chal- ing whatever the change, that it will be Spaniard said. lenge, disrupt and push boundaries. acceptable for patients. A company might have the best vision “Young people now want to understand IV124300 or strategy, but it cannot succeed without more and more the reasons behind what Comments: bright managers that understand they are we do. The next generation is very ideal- Email the author: [email protected]

In Vivo speaks to the UK branded industry’s negotiator for the latest five-year joint pricing pact with the government, Richard Torbett, who outlines, among other topics, five widely applicable precedents from the talks that can work in “getting to yes” – despite the fractious budgetary climate for health care evident in all major country markets.

BY WILLIAM LOONEY ichard Torbett, the ABPI’s executive director for UK and international commercial policy, handled day-to-day representation with a small group of The Voluntary Scheme for Branded company managers during the year-long negotiation, which benefited from Medicines Pricing and Access (VPAS) the initiative of both sides to bring a greater diversity of players to the table, agreed in December last year between including the powerful England wing of the National Health Service (NHS). the UK government and the Association of the British Pharmaceutical Industry R In Vivo: On the premise that the past is prologue, what was different about the (ABPI), representing private-sector new Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) that en- makers of branded medicines, is the tered into force in January, compared with the 2014 negotiations? What does this latest in a series of five-year pacts on say about the overall state of the relationship between the branded biopharma pricing that date back to 1957. industry and the government?

Its noticeable achievement is a Torbett: A distinguishing feature of the UK biopharma landscape is the desir- government commitment to boost patient ability of maintaining a structured and predictable approach to managing the cost of access to new innovative medicines, medicines. There has been a voluntary arrangement to secure this objective since 1957, addressing the most distinctive feature of renewable every five years. The original premise was to cap branded industry profits, the UK drugs market: slow uptake of the based on the idea that individual companies could offset their investments in the UK latest therapies, at five years on average against the liabilities incurred by the cap. However, as globalization of supply chains compared with other industrialized and trade liberalization took hold, such an explicit connection between pricing and countries, especially the US profits became harder to implement. The result has been a subtle shift in emphasis by the government away from a straight- So what? A predictable, rules-based VPAS forward profit cap to a conversation with the industry about structuring expenditures in place for the next five years may help on branded medicines, as well as how to manage the price setting process for new mitigate some of the domestic industry products. Up until the 2009 Pharmaceutical Price Regulation Scheme (PPRS), we had uncertainty associated with Brexit. list price reductions across the portfolio of branded medicines available through the National Health Service (NHS). The way it worked is that once these reductions were agreed, companies could “modulate” or apportion the cuts across their full product portfolio. The 2014 scheme was agreed at an unusual period of economic austerity in

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Can you provide some detail on the scope and pace of the the UK, which led to a move away from list price reductions to 2018 negotiations? a cap in the growth of branded medicine sales. The 2018 negotiations, which set the rules for branded medi- The formal negotiation took up nearly the entire year. We spent cines in the NHS to 2023, was distinctive from these earlier pacts, the first quarter in a number of preparatory workshops, which in several ways. First, the circle of players was larger this time. In can best be described as negotiating about negotiating – test- the past, our sole negotiating partner was the UK government in ing our preferences, drawing boundaries and setting objectives. Westminster. Although the health department’s role was critical After that, we were in line-by-line negotiations right up to De- in securing the financial provisions of the former PPRS, from a cember. Both sides worked to keep the actual negotiating team practical sense it has for some time been the NHS in England, small. For the ABPI it was myself, and a few general managers Wales, Scotland and Northern Ireland that determine the actual from the member companies selected for a mix of company size, conditions by which medicines are reimbursed on the market. It product portfolios and geography as well as individual expertise was a breakthrough in the latest round to have NHS England fully and experience. Our lead was Louise Houson, managing direc- engaged alongside the Department of Health and Social Care in tor of Merck Sharp & Dohme (MSD) UK. The government team Westminster, with officials from these devolved parts of the UK consisted of a lead from the Department of Health and Social providing input at key points in the negotiations. It was a first Care as well as representatives of NHS England. that what we now call the Voluntary Scheme for Branded Medi- As the talks progressed, we brought in civil servants represent- cines Pricing and Access (VPAS) has a separate chapter covering ing the different nations of the UK as well as industry people, all implementation of the scheme in England, the largest market with specific expertise relevant to issues being debated. This is for medicines in the UK, drafted in collaboration with the NHS. the venue where most of the details in the agreement were ham- Second, the negotiations accomplished a central goal of industry mered out, with the lead negotiating team providing strategic in putting the larger question of market access on the table, for the guidance and resolving problems as they arose. Both parties first time. Access joins pricing in the title of the new agreement. Re- benefited from choosing a more diverse group of negotiators flecting this, industry was able to initiate a dialogue on conditions than in the past, while keeping it small enough to be decisive at ground level, especially regarding the experience of providers when needed. and patients in obtaining medicines for the right condition, at the right time. We were able to establish a consensus in identifying Were patients or other external stakeholders outside gov- solutions to barriers to market access and to prioritize the role that ernment and industry engaged in the negotiations? medicines play in securing better health outcomes in the NHS. This The patient perspective on VPAS was very important to both includes a review of ways to make decisions taken by the public industry and the government. We both had a good dialogue at cost-effectiveness arbiter, the National Institute for Health and Care key points in the negotiations with patient organizations through Excellence (NICE), more timely and transparent. the Patient Organization Forum, which comprises around 40 UK patient advocacy groups. The success of this scheme will ulti- How was industry organized for representation during the mately be judged on whether we do a better job over the next five VPAS negotiations? years of ensuring patients get access to the medicines they need. The Association of the British Pharmaceutical Industry (ABPI), where I serve as executive director for commercial policy for the Working on international advocacy for the R&D-based UK and international, has a membership of 70 companies active industry is part of your remit at ABPI. When you face audi- in the R&D space who supply more than 80% of the value of ences outside the UK, how do you describe the UK industry’s medicines used by the NHS. The ABPI has a special designation place in the global biopharma ecosystem? Does the market under the Health and Social Care Act to represent all companies stand out as a source of best practices or is it better seen as that sell branded medicines in any statutory-based consulta- a lesson in avoidance? tion with the government. What this means in practice is the The UK presents a mixed picture for the industry. Compared ABPI devotes an enormous amount of time on industry-wide with other developed economies, the UK simply doesn’t invest representation to the government – if we are not actually at the as much in health care – we rank sixth among the G-7 largest negotiating table, we are preparing for it in one way or another. advanced economies, just above Italy. Of the 34 rich country On the positive side, it allows us to engage in the life sciences members of the Organization for Economic Cooperation and space on multiple fronts, from the small biotech to the global Development (OECD), the UK spends a little more than 9% of big pharma companies based in the US, Europe and Japan; each its national health care budget on medicines, well below the has diverse product portfolios at different stages of R&D. It’s a 11% average for similarly sized countries in the group. The UK is thriving community, one that we survey constantly to test ideas also noted for its therapeutic conservatism, resulting in a slower and priorities that should be topmost in the continuing dialogue than normal uptake of novel innovative medicines compared with government. A tactic we pursued with some success during with the US, even after cases where NICE has evidenced these the VPAS negotiations was to convene regular “town hall” meet- as cost-effective. ings that mixed ABPI members with other companies outside our It’s particularly slow in the early years after launch. In fact, the circle. It was a way for us to interact with them and to give and UK government’s Office for Life Sciences publishes something receive feedback. This put me and my team in a better position called the Competitiveness Indicators, which compares the UK to negotiate on their behalf with the government. uptake rate against a basket of other countries like the US, Japan

and the other major European markets. What we the future. The inspiration is around precedents in find is that in the UK it takes about five years for the US, like the Department of Defense Advanced UK patients to receive new cost-effective medicines Research Projects Agency (DARPA), which, among at the same rates as in other countries; overall, for other things, supports the life sciences industry every 100 patients who gain access to a new drug through cutting-edge technologies designed to ad- in the other markets in the first year after launch, dress latent threats like drug-resistant pandemics. only 21 receive it in the UK. This “innovation gap” in “I think access In the UK, work is progressing to see how industry, access at launch is a serious festering issue for the academia and government can coalesce around UK industry. It makes securing new investments by is now firmly on big topics like aging or digital transformation in foreign drugmakers here quite problematic. the agenda of health services. health policy in I think there is a real opportunity here, particu- Along with therapeutic conservatism, the UK larly given the NHS has access to enormous quan- has a perspective different from the US and the UK, which is tities of patient data and is committed to making many other markets in accepting that rationing a trend that is better use of it to manage costs, enhance the patient of care is sometimes necessary to preserve the advantageous to experience with care and improve outcomes. If principle of equity of access overall. Doesn’t we can join the dots and create data sets that link that create problems in justifying the drugs bill the innovative genomic information to EHR records, and combine when so many other aspects of care delivery drug industry.” that with the aggregating power of a single-payer are vying for the same limited resources in a system, then you have the knowledge and scale to single-payer system? highlight the cost-effectiveness of different inter- I think access is now firmly on the agenda of ventions like drugs – and increase access to health health policy in the UK, which is a trend that is overall. To me, this kind of creativity and innova- advantageous to the innovative drug industry. tion offers a brighter future for the UK market than There is growing awareness that medicines can our current challenges might suggest. drive efficiency improvements by keeping patients with chronic conditions outside hospitals and What specific aspects of the VPAS best positions emergency rooms. I see a willingness to change the industry to secure this brighter future? the old way of thinking of budgets as a zero-sum If you consider the iterations of these voluntary game. The National Institute for Care and Health schemes over the years, we have gone from a rigid Excellence (NICE) is still very much part of the cap on the profits the industry derives from the landscape. There is a constant need to evolve NICE’s demands of providers and patients for our products methods and processes, particularly to cope with to the current situation where we have an allowable rare diseases and new advanced therapies. But at growth rate on total sales of branded medicines the end of the day setting clear common standards across the UK. It’s a more flexible arrangement for for cost-effectiveness is seen as important for indus- individual companies. The agreed growth rate of try – especially within a budget-capped market – as 2% each year for the next five years on net sales it is for the government. NHS England is now a key is actually double the rate allowed under the 2014 player too and will increasingly take a central role scheme. While the government expects the VPAS to in negotiating commercial arrangements with drug yield approximately £1bn in savings on the drugs companies. bill over five years, overall we think it’s a positive All of this is reinforced by the VPAS emphasis by giving more room for the innovative market to on incorporating market access as a priority equal grow while also ensuring predictability as to what to pricing. this country will spend on branded medicines going Underlying and not often noticed is a series of forward. This is in marked contrast to the frequent initiatives to define a coherent national industrial surprises the industry experiences elsewhere in policy for the life sciences, one where biopharma- Europe when it is targeted for cuts or “give backs” ceutical competitiveness becomes integral to the during the annual factional struggles over health UK’s economic future. Ironically, Brexit is helping spending. drive the effort because it necessitates reinforcing There are many other provisions that the ABPI that the UK remains one of the world’s leading considers as markers of progress for the UK brand- locations for drug R&D. We still have more R&D ed industry. One is the joint commitment of both taking place here in Britain than in the other 27 parties – government and industry – to support members of the EU. “best” innovation in therapeutic classes and to aid The UK is also mobilizing government as funder the growth of small biotech. One practical step to of “mission oriented” research, through broad pub- accomplish this is an exemption for new active sub- lic interest projects that try to stimulate thinking stances from payment to the NHS during the first on how technology can solve health challenges of 36 months after receiving licensing approval. In

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effect, this is an incentive for branded companies to identify the five classes of drugs that are likely to focus on introducing new products to meet unmet drive the most health gain to patients and to ensure medical needs. A concession to small companies the uptake of those products reaches the “upper is elimination of the growth-limiting £5 million quartile” of comparable countries. Discussions on annual ceiling on sales revenues, below which a these priorities are underway and the ABPI will company remains exempt from the voluntary agree- do its best to hold the government to account for ment’s payment mechanism – simply put, it meant results. In addition, our foreign-based members that any company that sold even a penny more continue to have problems in figuring out how to than £5 million was in for the fix for the full 100% navigate those opaque and complex ties between of its sales. That’s now replaced with a generous the NHS, NICE, the Department of Health and Social tapering mechanism giving more wriggle room for Care and local authorities. The fact that NHS Eng- growing companies to manage their exposure to land, in a separate chapter of the VPAS, pledges to VPAS pricing provisions. work with the ABPI to improve the decision-making The other aspect is non-financial and entails process is seen by all as meaningful and most likely a set of commitments to improve collaboration to yield results. between industry and government on issues like providing more clarity on the interactions between Building on that, what lessons from your NICE, NHS England and other government entities leadership on the industry side of the VPAS that often complicate the terms of commercial ac- negotiations can you point to as precedent in cess for the industry in launching new products. negotiating with government and regulators to And there is a return to joint activity with the achieve change? government on “horizon scanning” to identify Following on what I just said, I’d cite five points emerging technologies that might impact the NHS on the cultural predeterminants of successful drugs bill in the future. negotiating. First, success is set even before you In essence, what we’ve been promised through enter the room – it all depends on how well you VPAS is a clearer path to commercial access – to prepare in advance. It’s about investing in the have an easier, sensible conversation with decision- right analytical tools, including forecasting based makers so that the right deal can be secured for the on input from a diverse range of human sources. best product and under the right circumstances It’s spending time on formulating policy to drive for the patient and the health budget. NICE, as the consensus, choosing aptly among a small set of guardian on access, and NHS England, as the payer, goals that are realistic for the target audience and are now under watch to replace the interminable can foster alignment going forward. This means in back and forth that has slowed commercial access turn that a negotiator must be good at identifying with a more flexible approach to structuring deals “In my view, common ground, as quickly as possible. that meet these criteria. One aspect related to the Brexit might Second, I remind people that negotiation with VPAS negotiations is an upcoming review of NICE powerful governments is not like buying or sell- actually methodologies to ensure maximum transparency ing a car – the relationship, like it or not, is long and more clarity in how it measures cost-effective- reinforce the term – you might call it permanent – and for that ness. The VPAS document endorses the review as importance of reason there is a premium on making both parties a confidence-building priority for the UK industry. feel they are consistently obtaining value from the VPAS in offering We look forward to that. process. The real danger lies in failing to read the stability on audience, pushing hard for too much too soon, and How do you think foreign-based big pharma and pricing, better ending up in an adversarial dead end too early in biotech should evaluate the VPAS? As a major the negotiations. If that happens there is no win- access and a breakthrough or half of a loaf? ner; everyone fails. ABPI members include all the major big pharma visible public Third, the best counter to this outcome is to be firms as well as leading biotechs based in the US. commitment to highly disciplined in deciding at the beginning Our new president is from Novartis AG and our vice what the group needs to achieve – integrating the making Britain’s president represents Sanofi. There is a consensus perspectives of both government and industry. among the foreign-based and domestic companies life sciences Objectives have to be clear. Red lines have to be that VPAS will finally address the longstanding lag sector globally explained, leaving room for context. In addition, in uptake of new medicines in the early years after as a negotiating partner, you need a few early competitive.” launch. Everyone agrees this is distinctive about the “wins,” again from both sides, which can maintain UK commercial environment and stands out as a confidence further down the line in negotiations, major disincentive to innovation. when silo-thinking recurs and difficult trade-offs To make this commitment tangible, there is a have to be made. provision in the VPAS requiring the government to Next, you need clarity and candor about how

the group will handle the tensions that inevitably occur over the most – innovation! VPAS had to be inclusive in referencing something as large as regulating an entire industry. It is critical to innovation and to work for every one of our members – if it was be set up to avoid a situation where the negotiations start being to work at all. The ability to coalesce around this principle kept conducted in the newspaper – or on social media. It follows that us on course toward an agreement whose simple takeaway mes- the parties must decide what the process should be if negotia- sage is to prioritize drug innovation in the health system. The tions stall or reach a stalemate. Is there a trigger to escalate the lesson is you don’t succeed as a negotiating team unless your resolution of disagreements to decision-makers further up the principles and your objectives are seamlessly aligned. food chain – if so, how should that be managed? Accounting for such a prospect in advance creates a “safe space” that either How important was evidence backed by data in bringing side can use when talks get out of hand. But that option should the talks to a successful conclusion? Or did the negotiations be used sparingly because if it becomes the norm it’s that much continue to be largely driven by politics? harder to go back to the table. You’ve lost trust. Disagreements Evidence counts today, perhaps more than it ever has. No get personal and from there relationships will founder. evidence means some conversations with potential partners Finally, while inclusion and engagement are prerequisites for never even start. It was certainly a critical factor in the VPAS. an effective negotiating process, at the end of the day you have to The industry put a big effort in creating a drug forecast tool for empower your negotiating team with the authority to initiate and the medicines budget through the next five years at the level of decide. The fact is it’s unproductive – virtually impossible – to net spend. The government also had its own forecast, so debate go back to as many as 130 different life sciences companies in about the relative merits of each other’s analytics proved a criti- the UK and obtain their permission to pursue a specific course cal part of the negotiations. Beyond forecasting, I personally of action. The teams have to be given the leeway to act. believe the industry is not investing enough in the generation of evidence that proves medicines create value at every stage of How were these strategy lessons reflected in the VPAS the patient journey. Of course, there is no doubt the industry is negotiation? exposed to politics and often has to play with a weak hand. Not We spent a good deal of time at the beginning coming up all conversations with stakeholders can be won with compelling with a straightforwardly simple statement of purpose, where we charts or a detailed regression analysis. But it certainly helps. achieved an optimal balance around three things. First, everyone at the table agreed that maximizing patient outcomes and It would be remiss to end without mentioning Brexit. Per- patient access to the best medicines would help the government haps the best way to frame the question is: does VPAS carry control its budgetary exposure and raise industry incentives to the legal weight to remain in force through what appears innovate – a “win-win” proposition. The second common thread to be an indefinite period of instability in British politics was to keep the UK innovating as a global center for biophar- and institutions? maceutical investment in treatments for unmet medical needs, I cannot offer guidance on what Brexit will look like for UK with government and industry contributing their fair share in biopharma, assuming it happens. Per your question, VPAS is making that happen. The third was to reiterate that pursuit of a voluntary agreement, not a contract. Looking back 60 years, the other two goals should be consistent with a realistic view these five-year agreements were signed and implemented by of the financial constraints on the NHS. Labor and Conservative governments – regardless of party, the The focus on ensuring a sustainable industry was evident provisions have stayed in place. Thus, it would be seen as a in addressing the problems of smaller companies in striving serious breach if a new Labor government renounced or revised to innovate while confronting regulations that inhibit their the agreement negotiated by the current Conservative regime. growth. All of us agreed that this was something that required In my view, Brexit might actually reinforce the importance of resolution through the VPAS – and we brought forward some VPAS in offering stability on pricing, better access and a visible special pro-growth provisions that ended up in the final text. public commitment to making Britain’s life sciences sector glob- But the debate within the industry got more challenging when ally competitive. However, it is equally true that under VPAS the discussion moved on to the overall state of competition in companies are required to make a major financial contribution the UK drugs market, and whether it made sense to introduce to defray the national drugs bill, at a time when Brexit is adding exemptions to the VPAS payment mechanism, such as when to the risk of making local investments that, even in the best branded products are subject to very aggressive local tendering circumstances, take years to play out. In the end, I believe VPAS and procurement rules. will be viewed as the one measure that provides a little certainty Now, some of our members thought this was a strong argu- against the roiling populism that affects all the major markets ment. The challenge was that, with so much of the branded today. It would be truly extraordinary if VPAS was scrapped. market now being subject to a high degree of competition, if IV124295 those parts had been excluded, the only segment left would Comments: have been the very medicines the industry agreed to protect Email the author: [email protected]

40 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com MARKET ACCESS ❚

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JN2181 Marketing Services Advert US Letter.indd 1 2019/06/04 17:35 ❚ ON THE MOVE

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

❚ CHRISTOPH BRONNIMANN ❚ VALERIA FANTIN ❚ TARIQ KASSUM ❚ GLENN REICIN

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Joseph Farmer Akrevia Inc Chief Operating Tesaro Inc Senior Vice President, 12-Jun-19 Officer General Counsel, and Corporate Secretary

Wayne Gombotz Alpine Immune Chief Technology Immune Design Chief Development 3-Jun-19 Sciences Officer Officer

Jotin Marango Aptose Chief Business Samuel Waxman Chief Operating 3-Jun-19 Biosciences Inc Officer and Senior Cancer Research Officer Vice President Foundation

William H. Arbutus Chief Executive ViiV Healthcare President and General 24-Jun-19 Collier Biopharma Corp Officer, President and Manager, North Director America

Robert Petit Carisma Chief Science Officer Advaxis Inc Chief Scientific Officer 3-Jun-19 Therapeutics Inc

Mary Spellman Castle Creek Chief Medical Officer Menlo Chief Medical Officer 3-Jun-19 Pharmaceuticals and Senior Vice Therapeutics llc President, Research and Development

Tariq Kassum Celsius Chief Executive Obsidian Co-Founder, Chief 11-Jun-19 Therapeutics Officer and President Therapeutics Operating Officer and Head, Corporate Development

Raj Kannan Chiasma Inc Chief Executive Kiniksa Chief Commercial 17-Jun-19 Officer and Director Pharmaceuticals Officer

Andrew Cirius Chief Technical AveXis Inc Senior Vice President, 3-Jun-19 Knudten Therapeutics Officer Technical Operations

Rick Epstein Conventus Chief Executive OMNI Life Chief Executive Officer 5-Jun-19 Orthopaedics Officer, President and Sciences Director

42 | In Vivo | July/August 2019 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

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

❚ MARY SPELLMAN ❚ BARBARA WEILAND ❚ SCOTT WILHOIT ❚ SAMUEL ZHANG

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Rob Ciappenelli Dicerna Chief Commercial Momenta Global Head, 4-Jun-19 Pharmaceuticals Officer Pharmaceuticals Commercial Inc

Thomas Ethris GmbH Chief Medical Officer Novartis AG Executive Director and 3-Jun-19 Langenickel Head, Respiratory

Said Saim EyePoint Chief Technology Collegium Vice President, 10-Jun-19 Pharmaceuticals Officer Pharmaceutical Pharmaceutical Inc Development

Toni Hanninen Faron Chief Financial Officer Danaher Group Chief Financial 1-Jun-19 Pharmaceuticals Officer, EMEA, X-Rite

Tracey Lodie Gamida Cell Ltd Chief Scientific BlueRock Senior Vice President, 5-Jun-19 Officer Therapeutics Translational Immunology

Johanna Gilead Sciences Chief Commercial Bristol-Myers President and Head, 1-Jul-19 Mercier Inc Officer Squibb Large Markets

Shaojing Tong InnoCare Chief Financial Officer UBS China Executive Director and 3-Jun-19 Industry Analyst

Christoph Medartis AG Chief Executive Johnson & Johnson Head 1-Sep-19 Bronnimann Officer ONE Medical Device Unit

Boaz Gur-Lavie MediWound Ltd Chief Financial Officer Center for Digital Co-Founder 11-Jun-19 Innovation

Chris MGB Biopharma Chief Business Officer Nanogenics Senior Executive 18-Jun-19 Wardhaugh Advisor

Edwina Baskin- Nanobiotix Chief Medical Officer Innocrin Chief Medical Officer 4-Jun-19 Bey Pharmaceuticals

Samuel Zhang NeoImmuneTech Chief Business Merus Vice President, Product 3-Jun-19 Officer and Portfolio Strategy

July/August 2019 | In Vivo | 43 ❚ ON THE MOVE

COMPANY CHANGES

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE Marie-France Novartis AG President Advanced President 7-Jun-19 Tschudin Accelerator Applications

David Appell Parallax Health Chief Operating Carbon Capital President 10-Jun-19 Sciences Inc Officer Corp.

Eric d’Esparbes Progenity Inc Chief Financial Officer Innoviva Inc Chief Financial Officer 5-Jun-19 and Senior Vice and Interim Principal President Executive Officer

Laxman Reckitt Chief Executive PepsiCo Chief Executive Officer 1-Sep-19 Narasimhan Benckiser plc Officer

Sharath Hegde Recursion Chief Scientific Theravance Senior Vice President, 20-Jun-19 Pharmaceuticals Officer Biopharma Research LLC

Alex C. Sapir ReViral Ltd Chief Executive Dova President and CEO 10-Jun-19 Officer and Director Pharmaceuticals

Barbara Roche Head, Group E.ON SE Head, 1-Oct-19 Schadler Communications Communications and Public Affairs

Glenn Reicin Sigilon Chief Financial Officer Greyrock President and 3-Jun-19 Therapeutics Inc Biomedical Founder Advisors

JehanZeb Noor Smiths Medical Chief Executive Amcor Flexibles Head, Healthcare 1-Jul-19 Officer Inc North America and Global Sales

Andrew Theravance Chief Financial Officer Acorda Chief Business Officer 4-Jun-19 Hindman Biopharma US and Senior Vice Therapeutics Inc President

Valeria Fantin Zai Laboratory Chief Scientific ORIC Chief Scientific Officer 3-Jun-19 Inc Officer Pharmaceuticals

PROMOTIONS

EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE Will Brown Altimmune Inc Chief Financial Officer Acting Chief Financial Officer 12-Jun-19 and Principal Accounting Officer

Gregory J. Divis Avadel Chief Executive Officer Interim Chief Executive Officer 3-Jun-19 Pharmaceuticals Plc and Director

Gerald R. Cysewski Cyanotech Corp Chief Executive Officer President and Chief Scientific 3-Jun-19 Officer

Hans Bishop Grail Inc Chief Executive Officer Director 6-Jun-19 and Director

Rami Epstein Kadimastem Ltd Chief Executive Officer Director 1-Jun-19 and Director

Neil Owens Medicure Inc President and Chief Director, Scientific Affairs 1-Jul-19 Operating Officer

Barbara Weiland Merck KGaA Chief Compliance Officer Head, Internal Auditing 1-Jul-19

Daniel Steiner Molecular Partners AG Chief Scientific Officer Senior Vice President, Research 1-Jul-19

44 | In Vivo | July/August 2019 invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com ON THE MOVE ❚

EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE Emily Hill PTC Therapeutics Inc Chief Financial Officer Senior Vice President, Head, 3-Jun-19 Investor Relations

Thomas Schinecker Roche Chief Executive Officer, Head, Centralized and Point of 1-Aug-19 Roche Diagnostics Care Solutions

Scott Wilhoit Strongbridge Chief Commercial Officer Senior Vice President, Global 3-Jun-19 Biopharma plc Market Access and Patient Services

Jessica Sachs Unum Therapeutics Inc Chief Medical Officer Vice President, Clinical Sciences 15-Jul-19

Michael Stein Valo Therapeutics Chief Executive Officer Co-Chairman 17-Jun-19

Robert E. Gagnon Verastem Inc Chief Financial Officer and Chief Financial Officer 20-Jun-19 Chief Business Officer

Michael Halpin Vericel Corp Chief Operating Officer Senior Vice President, Quality 15-Jun-19 and Regulatory Affairs

DIRECTORS EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE Susan Windham-Bannister Aridis Pharmaceuticals Inc Director 10-Jun-19

Wade Rosen Collagen Solutions plc Non-Executive Director 6-Jun-19

Sylvie Ryckebusch Domain Therapeutics Director 12-Jun-19

Suzanne Blaug FibroGen Inc Independent Director 5-Jun-19

Maykin Ho Grail Inc Director 6-Jun-19

Athena Countouriotis Iovance Biotherapeutics Inc Director 10-Jun-19

Melissa Rewolinski Lannett Co Inc Director 1-Jul-19

Richard Murray Platelet BioGenesis Director 4-Jun-19

Jill Beraud Revance Director 6-Jun-19

Peter Hongaard Andersen Scandion Oncology AS Vice-Chairman 6-Jun-19

Susan Mahony Zymeworks Inc Director 5-Jun-19

Troy Cox Zymeworks Inc Director 5-Jun-19

ADVISORS

EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE Sulma Mohammed Cannabis Science Inc Scientific Advisory Board Member 3-Jun-19

James Summers Cerevance Inc Scientific Advisor 3-Jun-19

Daniel Bloomfield Cirius Therapeutics Scientific Advisory Board Member 12-Jun-19

Stephanie Martin Clinical Computer Systems Inc Medical Advisory Board Member 4-Jun-19

David Bowers Recce Ltd Chairman, Clinical Advisory Committee 3-Jun-19

Joseph C. Kvedar ResApp Health Ltd Industry Advisory Board Member 5-Jun-19

Naomi Fried ResApp Health Ltd Industry Advisory Board Member 5-Jun-19

July/August 2019 | In Vivo | 45 ❚ DEAL-MAKING

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Deal-Making column is a ❚ Deal-Making survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, Pharmaceuticals, and Research, Analytical Equipment and Supplies – and then Covering deals made July 2019 categorized by type – Acquisition, Alliance, or Financing. Strategic Transactions is updated daily with in-depth deal analysis, structural and financial terms, and links to SEC-filed contracts. For information about access please contact Customer Care at 888-670-8900 or [email protected]

❚ IN VITRO DIAGNOSTICS technology in cardiology, gynecology, Brickell enters $25mm financing and oncology agreement with NovaQuest FINANCINGS Astellas, Vect-Horus team up in BridgeBio goes public netting $324mm Initial public offering nets $144mm CNS diseases for Personalis Calithera nets $54mm through Starpharma and AZ pen second DEP public offering cancer agreement ❚ MEDICAL DEVICES Catalent closes $500mm senior note sale Lilly pens AI-focused drug discovery ContraVir nets $14.5mm through public deal with Atomwise MERGERS & ACQUISITIONS sale of common and preferred shares Zoll buys Cardiac Science Eton gains US rights to Aucta’s Public offering nets $34.5mm forGenocea Glaukos acquires Dose Medical lamotrigine seizure compound Global Blood nets $193mm in Everest gains rights to IgA Hologic to acquire SuperSonic Imagine public offering nephropathy therapy from Calliditas Merit Medical acquires BrightWater Inhibrx attempts initial public offering Medical for up to $50mm Gilead partners with Carna for next-gen cancer immunotherapies Karuna nets $83mm in up-sized IPO Varian pays $185mm to buy interventional oncology companies Deciphera grants Zai exclusive Latest public offering nets $108.4mm for Endocare and Alicon ripretinib rights in Greater China Kura Oncology Denovo licenses worldwide rights to Mirati nets $191.5mm through latest ALLIANCES Orion’s ORM12741 CNS candidate public offering Terumo gets exclusive rights to Upsher-Smith licenses US rights to two Morphic nets $83.7mm via IPO Orchestra BioMed’s Virtue SEB Promius sumatriptan migraine products Public offering nets $117.3mm forOdonate Eddingpharm licenses FINANCINGS Prevail Therapeutics nets $116.3mm thrombocytopenia drug Mulpleta Public offering nets $8.5mm foriCAD in IPO from Shionogi MiMedx secures $75mm loan Resverlogix nets $Cdn14mm through EffRx to sell Pharmaxis’ cystic fibrosis public offering FOPO nets $94mm for Sientra drug in Switzerland Public offering nets $16.4mm for Terns licenses exclusive elafibranor Rockwell ❚ PHARMACEUTICALS rights from Genfit Scholar Rock FOPO nets $42.3mm MERGERS & ACQUISITIONS Genmab, Janssen team up once again Sellas nets $13.5mm via FOPO AbbVie pays $63bn in cash and stock Nurix pens $2.3bn collaboration Seres nets $56.4mm via follow-on for Allergan with Gilead Sesen Bio nets $28.2mm through Brickell, Vical reverse merge to Grupo Ferrer gets rights to sell public offering create company focused on Brickell’s Shionogi’s Rizmoic in Spain dermatology pipeline Sorrento Therapeutics nets $23.5mm Siga grants Meridian Medical rights to through public offering Merck buys Tilos for up to $773mm promote TPOXX Stoke Therapeutics nets $132mm in Pfizer buys Array BioPharma in Theramex gains ex-US rights to Nasdaq IPO $11.4bn deal TherapeuticsMD’s Imvexxy and The Medicines Co. nets $141.4mm pays CHF515mm to buy newco Bijuva HRTs Sobi via FOPO housing Gamifant from Novimmune ZymeWorks nets $189mm via Vertex acquires Exonics for up to $1bn FINANCINGS AcelRx secures $25mm debt facility from public offering Oxford Finance ALLIANCES ❚ Achaogen sells Zemdri rights to Akero Therapeutics nets $98.4mm RESEARCH, ANALYTICAL Cipla, QiLu through IPO EQUIPMENT & SUPPLIES Artizan, Brii enter collaboration ArQule nets $97.5mm via FINANCINGS in China follow-on offering Adaptive Bio goes public netting Arvinas and Bayer to use PROTAC Biohaven nets $282mm through FOPO $279mm

46 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - - - ❚

| 47 DEAL-MAKING In Vivo | In Vivo 2019 July/August NU stent system- NU stent ConvertX guidance and ultrasound system for for system ultrasound and guidance mammography system, system, 3Dimensions mammography MERIT MEDICAL SYSTEMS INC. SYSTEMS MEDICAL MERIT INC. MEDICAL BRIGHTWATER - radiogra the Faxitron and biopsy, breast gained the company (which system phy Faxitron of 2018 acquisition its through in brought Hologic In 2018, Bioptics. about has the company in sales; $29m 180 employees. - pri acquired Inc. Systems Merit Medical maker device surgical non-invasive vate (convertible Inc. Medical BrightWater stent biliary (NU) and nephroureteral (Jun.)systems). front up $35m in cash pay will Merit in $15m more to up provide could and approval mark on CE based earn-outs targets. sales future of achievement and BrightWater’s due obstructions ureteral treats -which enlarged tumors, stones, kidney to sur previous from or scarring prostate, in the kidneys urine prevent to geries ap- the bladder--was to draining from designed is The system in 2016. proved an interventional by be implanted to an from converted and once radiologist eliminating an NU stent, to NU catheter surgery. invasive a second for the need Con BrightWater’s year, this Earlier FDA received system stent biliary vertX the NU to in concept Similar clearance. biliary system ConvertX is the system, biliary for treatment one-procedure also that the ducts of obstructions--blockages gallbladder and the liver from bile carry tumors, by intestine--caused small the to cysts, nodes, lymph enlarged gallstones, to plans Medical Merit or strictures. production current Brightwater’s retain capabilities its duplicating while facility - trans before facility catheter own in its manufacturing the ConvertX ferring The headquarters. Utah its to operations offerings its expand to Merit enables deal inter for devices its of most urology; into are procedures diagnostic and ventional cardiovascular around centered currently surgeries. general and - ultra handheld wireless the Viera ments through markets Hologic scanner sound . Hologic’s Clarius with an agreement include products imaging other breast the ATEC - - - implant that allows allows that implant for breast indications indications breast for Aixplorer HOLOGIC INC. HOLOGIC SUPERSONIC SA IMAGINE made a binding offer to ac offer a binding made Inc. Hologic tein- or steroid-based. Dose will become a become will Dose or steroid-based. tein- The two subsidiary. Glaukos owned wholly other. each with familiar already are firms In in 2010. Glaukos from off spun Dose a partnership into entered they 2017 April - intra Dose’s acquired Glaukos in which and (IOP) sensor system pressure ocular to up plus cash, in $5.5m for assets related regulatory and development to $9.5m tied complementary is The system milestones. iStent own Glaukos’ to their IOP. manage to patients glaucoma - bio micro-invasive, developing is Dose drug delivery sustained-release erodible, - diseas retinal help treat can that platforms - degenera macular age-related including es Glaukos edema. macular diabetic tion and of as on hand; cash using the deal funded and in cash $33.7m had it March, of the end Banks/Advisors: Investment equivalents. Corp.) Medical (Dose Inc. Securities Fortis firm Su imaging ultrasound French quire FDA approval within ten years following following years ten within approval FDA $1.25m-$2.5m the merger; of the closing approval received products certain should the deal after years ten the EMA within from on sales based $7.5m-$20m and closes; 5% out shell also will Glaukos milestones. Upon FDA years. ten for payments in royalty Glaukos products, Dose certain of approval earn- additional the buyout to choose can Dose paying by payments royalty and out $10m-$55m depending on shareholders pro are involved products the whether and $85m to up for perSonic SA Imagine negotiations exclusive into entered has the includes price The company. the with outstanding SuperSonic all of purchase - pre a 41% ($1.68, €1.50 apiece at shares warrants $39m ($42m including for mium) to up repay to funds options), plus and debt. (Jun.) in net $43m and 2005 in formed was SuperSonic system ultrasound the Aixplorer markets and waves both ultrasound utilizes which the detection improve to waves shear - includ cancers of characterization and thyroid, liver, breast, the in tumors ing been has Hologic prostate. abdomen, and marketing under a deal signed in 2010. It now gains gains now It in 2010. signed a deal under the through the product of control full - comple Aixplorer noting that acquisition, - - Sci Cardiac Corp. Medical Dose is acquir is Corp. Medical Zoll connects first responders with responders first connects Link MEDICAL DEVICES MEDICAL VITRO IN DIAGNOSTICS MERGERS & ACQUISITIONS & MERGERS FINANCINGS GLAUKOS CORP. GLAUKOS CORP. MEDICAL DOSE OPTO CIRCUITS (INDIA) LTD. (INDIA) CIRCUITS OPTO ASAHI KASEI CORP. KASEI ASAHI PERSONALIS INC. PERSONALIS ❚ ❚ - oph fellow acquiring is Corp. Glaukos firm thalmic-focused based earn-outs plus $2.5m in cash, for commercial and approvals on regulatory (Jun.)achievements. $5m- follows: as are payments The earn-out receive products Dose certain $22.5m if the closest available AED, thus getting getting thus AED, available the closest in cardiac patients to quickly help more - Sci Cardiac gaining to addition In arrest. in facilities gets also Zoll portfolio, ence’s has Zoll years the Over Europe. and the US most firms, its device buying been actively Medical being Kyma acquisitions recent . Systems Circulatory Advanced and for an undisclosed sum. (Jun.) sum. an undisclosed for Corp. ence au- Powerheart provides Science Cardiac (AEDs) and defibrillators external tomated accessories. and services Ready Rescue innovative pipeline of a has The firm also this launch to expected are that products web-based the PlusTrac offers Zoll year. - compli the ongoing ensures that system - rou require states US 50 (All AEDs. of ance Zoll’s AED devices.) of tine maintenance AED Cardiac Science Corp. Science Cardiac ’s Kasei Asahi Zoll MedicalZoll Corp. firm device private fellow ing (oncology diagnostics diagnostics (oncology Inc. Personalis $144m netted analysis) genomic and The offering. public initial its through shares common million 9.1 sold company $17, at overallotment) the (including $14-16 of range intended its higher than (Jun.) shares. million 6.67 for of Bank Banks/Advisors: Investment LLC; & Co. Cowen Lynch; Merrill America & Oppenheimer & Co.; Stanley Morgan Inc. Co. company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

VARIAN MEDICAL SYSTEMS INC. FINANCINGS 2023, although biosimilars are available HEALTHTRONICS INC. across Europe and other key international Endocare Inc. ICAD INC. markets. The company’s next two leading HANGZHOU ALICON PHARMACEUTICAL Digital imaging firmiCAD Inc. netted drugs are Imbruvica (ibrutinib) for blood SCI & TEC CO. LTD. $8.5m through the public sale of 1.6 mil- cancer (partnered with Johnson & Johnson Varian Medical Systems Inc. is boosting lion common shares at $5.50. The com- and Mavyret (glecaprevir/pibrentsavir ) for its place in the interventional oncology pany’s offerings include computer-aided hepatitis C. They generated a combined market through a combined acquisition detection systems for diagnosis, and $7bn last year. AbbVie’s portfolio also of two firms from the space. It will pay radiation therapy solutions for breast, includes risankizumab (an anti-IL-23 anti- $185m to buy Texas-based Endocare Inc. prostate, and colorectal cancers. (Jun.) body) and the JAK1 inhibitor upadacitinib (a division of HealthTronics Inc.) and Investment Banks/Advisors: Craig- for multiple immunology indications. These China-based Hangzhou Alicon Pharma- Hallum Inc. drugs are slated to replace Humira as the ceutical Sci & Tec Co. Ltd. (Jun.) best-in-class therapeutics. Both therapies MIMEDX GROUP INC. have been submitted for initial regulatory Endocare’s lead product is Cryocare Blue Torch Finance provided MiMedx review in the US--upacitinib in rheumatoid CS, an integrated planning, placement, Group Inc. (allografts) with a three-year arthritis and risankizumab in psoriasis--with and cryotherapy treatment platform $75m term loan facility which was fully further clinical trial data generated across intended to simplify cryoablation funded immediately. MiMedx will use a wide range of indications including pso- procedures. Alicon develops embolic some of the proceeds for growth objec- riatic arthritis, atopic dermatitis, Crohn’s therapies for the Chinese liver cancer tives including its BLA pipeline. (Jun.) and ulcerative colitis. Allergan’s lead rev- market, and its lead product is Caligel, Investment Banks/Advisors: PJT Partners enue generator is Botox, which is part of its calibrated resorbable gelfoam particles medical aesthetics (MA) business. Products that stop blood-flow to tumors. Together SIENTRA INC. within the MA segment represent 43% of in- the firms brought in about $30m in com- Sientra Inc. (medical aesthetic devices) ternational revenues. The AbbVie/Allergan bined revenues during 2018. Through netted $94m through the public offering combination is expected to generate $48bn the acquisition, Varian intends to build of 17.4 million shares at $5.75. The com- in 2019 revenue. Allergan will benefit from a complete end-to-end interventional pany will use the proceeds to carry out AbbVie’s R&D capabilities, an area where oncology suite of hardware and software sales and marketing initiatives, expand investors have become concerned about solutions. Some products already in the commercially in the US and globally, and productivity. The acquisition provides im- company’s portfolio include advanced fund R&D. Potentially, some of the funds mediate scale and profitability to AbbVie’s radiation treatment systems, real-time may also support future acquisitions or in- growth platform, enhances long-term R&D tracking and motion management solu- vestments in complementary businesses, funding capacity, and increases global com- tions for radiation oncology, and cloud- products, or technologies. Sientra offers mercial scale to further maximize the value based applications to improve clinical both a portfolio of breast products (in- of Allergan’s portfolio. Prior to the deal, workflow. cluding implants, tissue expanders, and rumors had been circulating that Allergan was getting ready to split and analysts say ALLIANCES scar management products sold to plastic surgeons) as well as the miraDry system the sale represents a welcome exit for inves- ORCHESTRA BIOMED INC. (for reduction of underarm sweat, odor, tors. Investment Banks/Advisors: JP Morgan TERUMO CORP. and hair), with a 2019 sales outlook of & Co. (Allergan PLC); Morgan Stanley & Co.; PJT Partners (AbbVie Inc.) Orchestra BioMed Inc. licensed Terumo $44-46m and $35-37m for the segments, Corp. exclusive global rights to its Vir- respectively. (Jun.) BRICKELL BIOTECH INC. tue sirolimus-eluting balloon (SEB) for Investment Banks/Advisors: SVB Leerink; VICAL INC. percutaneous coronary and peripheral Stifel Nicolaus & Co. Inc.; William Blair & Co. Publicly traded infectious disease-focused interventions. (Jun.) biotech Vical Inc. and private spec pharma For the rights, Terumo will pay Orchestra ❚ PHARMACEUTICALS Brickell Biotech Inc. have agreed to reverse $30m up front, clinical and regulatory merge in an all-stock transaction, creat- milestones, and sales royalties. It will also MERGERS & ACQUISITIONS ing a combined company (owned 60% by and make a $5m equity investment in the Brickell/40% by Vical), which will take over company. Orchestra will supply Terumo ABBVIE INC. Vical’s NASDAQ listing under a new ticker with the sustained-release sirolimus for- ALLERGAN PLC symbol, operate under the Brickell Biotech mulation used in Virtue. Orchestra retains AbbVie Inc. is buying Allergan PLC for an name, and retain Brickell’s current man- the rights to develop and license Virtue- equity value of $63bn in cash and stock. agement team and corporate headquarters related technology for clinical applica- Allergan shareholders will receive $188.24 in Boulder, Colorado. (Jun.) tions outside of coronary and peripheral per share ($120.30 in cash and 0.8660 Ab- The merged company will focus on Brick- vascular interventions. Virtue SEB is the bVie shares (worth $67.94)). (Jun.) ell’s development pipeline of mainly three only non-coated drug-eluting angioplasty Post-transaction, AbbVie and Allergan NCE candidates targeting dermatologic balloon that delivers a bioabsorbable shareholders will hold an 83%/17% stake disorders. Brickell’s lead candidate sof- sustained-release formulation of siroli- of the combined company, respectively. pironium bromide (BBI4000)--partnered mus. It currently has breakthrough device The deal provides AbbVie with sufficient under a 2015 deal with Kaken Pharma- designation (as of April) for coronary in- revenue as the firm prepares for the loss of ceutical in Japan, where it’s achieved stent restenosis (ISR), an indication for patent protection for Humira (adalimumab), positive Phase III results--is a topical soft which Orchestra will conduct a near-term which is the world’s top-selling drug and anticholinergic for axillary hyperhidro- US registrational trial. Both parties plan accounted for 58% of AbbVie’s sales last sis (excessive underarm sweating) in a to carry out trials necessary to gain global year ($19.1bn). The therapy is approved for metered dose pump gel formulation. The regulatory approvals in indications includ- various autoimmune diseases including initiation of a pivotal Phase III trial in the ing ISR, small coronary vessels, peripheral rheumatoid arthritis. Through settlement US is expected in Q4 2019, with topline artery disease below-the-knee, and other agreements, AbbVie has delayed biosimi- results anticipated in Q4 2020 and an indications. lar competition for Humira in the US until NDA in Q2 2021. Brickell is also develop-

48 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - - - - ❚

| 49 DEAL-MAKING In Vivo | In Vivo 2019 July/August platform uses an adeno- uses platform SingleCut VERTEX PHARMACEUTICALS INC. PHARMACEUTICALS VERTEX THERAPEUTICS INC. EXONICS including swollen lymph nodes, jaundice, jaundice, nodes, lymph swollen including - neurologi and issues, digestive and lung their original of Under terms problems. cal rights, for front up CHF50m paid Sobi deal, in ad- CHF400m to up to committed and now The new entity payments. ditional assets all contains Novimmune by created - prop (intellectual emapalumab to related know-how); and data, rights, patent erty, in the involved staff on all takes Sobi as Also, well. the drug as of development a Prior gains Sobi the acquisition, part of or sell, use can it that Voucher Review ity to two rights financial share to options and I (Phase assets--NI1701 immuno-oncology antibody bispecific anti-CD19/anti-CD47 NI1801 (preclinical and cancers) blood for antibody bispecific anti-CD47/mesothelin Sobi as day the same On tumors). solid for it Novimmune, with the deal announced reorganization a planned revealed also the company’s further steer to intended areas, therapy core two towards focus result, a As immunology. and hematology 90 employees by be cut will the workforce the new of outside falling candidates and (including be divested will areas core project syndrome I Sanfilippo the Phase - autoimmune/in preclinical and SOBI003 SOBI006). candidate disease flammatory - pri acquired Inc. Pharmaceuticals Vertex (gene Therapeutics Inc. Exonics held vately muscular Duchenne for editing therapies $1bn. (Jun.) to up (DMD)) for dystrophy closing, at $245m provide will Vertex at payments in additional another $74m in potential $728m to up plus date, a later of the achievement to related earn-outs associ milestones regulatory and clinical commercialization the R&D and with ated 1 type dystrophy myotonic and DMD of with in 2017 Launched (DM1) programs. CureDuchenne from round a $5m seed to $45m raised has Exonics Ventures, editing gene CRISPR SingleCut Its date. - re permanently to intended technology, cause that sequence DNA the in errors pair the University from licensed is disease, , Center Medical Southwestern of Texas led a team by discovered was it where co-founder Exonics’ PhD, Olson, Eric by by Directed adviser. scientific chief and RNA, single guide-strand specific highly the gene- the deliver to (AAV) virus associated cutting by CRISPR/Cas9 editing enzymes sites selected at chromosomes the DNA of or insert remove to in the DNA sequence repair is focus initial segments. Exonics’ a 51), (exon dystrophin in mutations ing protects and stabilizes that protein key pain DMD lacking is but fibers, muscle demonstrated has program lead tients. Its a one- that models mouse in preclinical tech the SingleCut of time administration sufficient is AAV through delivered nology - - - ’s Pierre Pierre Merck Swedish Orphan Orphan Swedish has SA Novimmune (nivolumab) in the (nivolumab) Opdivo , and several others. others. several and , Roche , face competition from from competition face Bayer , (binimetinib) for the treat the for (binimetinib) Mektovi SWEDISH ORPHAN BIOVITRUM AB BIOVITRUM ORPHAN SWEDISH SA NOVIMMUNE - pre a 66% ($48 per share; cash $11.4bn in (Jun.) Inc. BioPharma Array acquire to mium) - combi FDA-approved Array’s gains Pfizer (encorafenib) Braftovi of therapy nation and mutant BRAFV600K or BRAFV600E of ment melanoma. or metastatic unresectable BRAF- for III Phase in also are drugs The and, cancer colorectal metastatic mutant and Braftovi Biomedtracker, to according average) (8% above a 43% have Mektovi likelihood average) (6% above 41% and also are They respectively. approval, of multiple for trials other clinical various in lung cell non-small including tumors solid combined a generated drugs The cancer. and Braftovi Q1 2019. for $35m in sales Mektovi (pembrolizumab) and Bristol- and (pembrolizumab) Keytruda ’s Squibb Myers Fabre / the Braftovi but indication, melanoma potentially could therapy combo Mektovi in BRAF-mutated player be a leading on exceptional based cancer colorectal Array’s of The majority data. clinical cancer out-licensed of portfolio consists One, include Partners therapies. Pfizer will benefit from royalties of those of those royalties from benefit will Pfizer time. Array over programs partnered preclinical undisclosed several has also diseases rare and in cancer programs bring one new cancer to plans it says and the end At year. each the clinic drug into in cash. $96.6m had Array 2019, March of its supports the acquisition says Pfizer the has and strategy growth long-term industry-leading an create to potential alongside cancer colorectal for franchise in breast expertise own Big Pharma’s the Banks/ Investment cancer. prostate and Mor LLC; Partners Guggenheim Advisors: granting after year One global exclusive AB (Sobi) Biovitrum antagonist gamma the interferon to rights been ap- since has (which emapalumab proved), as Gamifant gan Stanley & Co. (Pfizer Inc.); Centerview Inc.); (Pfizer & Co. Stanley gan Inc.) BioPharma (Array LLC Partners the holds which entity new a created now is and assets, related all and compound CHF515m for Sobi to newco that selling (Jun.)($519.4m). in No - the FDA by approved was Gamifant adult and pediatric treat to 2018 vember haemophagocytic primary with patients refrac (HLH) with lymphohistiocytosis or disease progressive or recurrent, tory, HLH therapy. conventional to intolerance immune extreme of disease a rare HLH is and histiocytes causes that activation cells) blood white of (types lymphocytes The abnormal cells. other blood attack to - caus spleen, and in the liver collect cells symptoms other and enlargement ing - - in (developing (developing Tilos Therapeutics Inc. Therapeutics Tilos MERCK & CO. INC. CO. & MERCK THERAPEUTICS INC. TILOS INC. PFIZER INC. BIOPHARMA ARRAY agreed to acquire privately privately acquire to agreed Inc. & Co. Merck held offerings cancer its expand to In an effort is paying Inc. Pfizer therapies, targeted with 2015; as well as several programs in other in programs several as well as 2015; R&D funding indications. disease skin by be provided will III trials Phase for through Management Capital NovaQuest commitment financing $25m a concurrent expected cash, in $35m Vical’s as well as third In the Q4 2020. through last to to plans announced Vical 2018, quarterof alternatives strategic multiple reviewing II antifungal Phase its discontinued and conserve to 2019 in February VL2397 the reverse believes the company cash; the best provide will transaction merger core Vical’s shareholders. its for return insertionthe DNA of involves technology the deliver to designed plasmids into It’s cells. specific into interest of genes or used be will technology this if unclear vac preclinical mostly of pipeline Vical’s oncology and disses infectious for cines entity. combined the by assumed be will Health MTS Banks/Advisors: Investment Group BMO Financial Inc.); (Vical Partners Inc.) Biotech (Brickell for complex) beta TGF targeting therapies up-front an includes price The $773m. to up (Jun.) earn-outs. and payment on research in 2016 based Tilos--formed and Brigham of Weiner Howard Dr. from Medical Harvard and Hospital Women’s on anti-LAP (latency- working --is School inhibit that antibodies peptide) associated TGF LAP. beta TGF cytokine of the effects and the development in involved is beta - dis fibrotic and cancer of progression beta, TGF around a cage LAP forms eases. is it until state inactive an in it holding such anti-LAP antibodies, but deployed, in cells on, target working is Tilos those as depletion for microenvironment the tumor the from beta TGF of release the inhibit and cancerous fighting thereby LAP complex, betaTGF existing than effectively more cells applica have antibodies Tilos’s therapies. including tumors solid of variety in a tions gastric, colorectal, ovarian, neck, and head well as cancers, lung cell non-small and diseases. autoimmune and in fibrosis as company the filings, SEC to According inception. $4m since about raised has Ingelheim Boehringer include Investors Fund, Innovation Partners Fund, Venture Fund. Innovation ShangPharma and ing BBI3000, a Phase I oral rexinoid for for rexinoid oral I Phase a BBI3000, ing study (POC lymphoma T-cell cutaneous preclinical 2020); in late start to expected a (with inhibitor RORy a topical BBI6000, start to expected psoriasis in study POC Orca from in-licensed 2021) in early company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

to restore the production of dystrophin ARVINAS INC. royalties. Earlier this year, Vect-Horus and improve the structure and function BAYER AG signed a similar agreement with Ono Phar- of both skeletal muscles and the heart of Arvinas Inc. and Bayer AG agreed to use maceutical involving the development of mice with these mutations. The company the former’s PROTAC technology to de- neurodegenerative disease therapeutics believes the technology will also have velop drug candidates for cardiovascular using the VECTrans technology. applications in a range of other genetic and gynecological diseases, and cancer. ASTRAZENECA PLC neuromuscular diseases. In addition to Separately, the companies established a STARPHARMA HOLDINGS LTD. gaining Exonics’ platform, Vertex concur- 50/50 joint venture that will use PROTAC and in the agricultural industry. (Jun.) AstraZeneca PLC Starpharma Hold- rently expanded its 2015 agreement for ings Ltd. signed a second agreement sickle cell disease and beta thalassemia Bayer pays $17.5m up front in cash plus involving Starpharma’s DEP dendrimer with CRISPR Therapeutics into DMD and $32.5m through the purchase of 1.4 mil- drug delivery technology, this time for the DM1, agreeing to pay CRISPR $1bn for lion Arvinas shares--representing about development of an undisclosed marketed its programs in these disease areas and a 4% equity stake--at $24.14 (an 11% pre- AZ cancer product. (Jun.) mium). Bayer is also responsible for $12m exclusive worldwide rights to CRISPR’s The DEP (Dendrimer Enhanced Prod- in research funding payments (consisting CRISPR/Cas9 technology. uct) platform joins an active drug to a of $3m per year during the first four years), dendrimer construct and provides for $197.5m in development milestones, ALLIANCES increased solubility, extended duration $490m in sales milestones, and sales ACHAOGEN INC. of action, improved efficacy, and a reduc- royalties in the mid-single to low-double tion in toxic side effects. Starpharma CIPLA LTD. digits. The Big Pharma will select targets Cipla USA Inc. will conduct preclinical studies on a DEP and have rights to novel lead structures. version of AZ’s drug, after which point AZ QILU ANTIBIOTICS PHARMACEUTICAL PROTAC, which stands for proteolysis- CO. LTD. has an option to license the candidate. If targeting chimera, are molecules that use the option is exercised, Starpharma gets a Achaogen Inc. is selling off global rights the cell’s ubiquitin/proteasome system to $5m fee in addition to “industry standard” to Zemdri (plazomicin). (Jun.) degrade disease-causing proteins. Arvi- development and commercialization mile- Achaogen filed the voluntary Chapter 11 nas believes PROTACs have advantages stones, plus escalating sales royalties. (If petition in April. The company is granting over traditional small-molecule protein AZ doesn’t take rights, Starpharma could Cipla USA Inc. worldwide rights (exclud- inhibitors, including avoiding side effects license the drug for development and and drug resistance. Thus far, Arvinas has ing China, Hong Kong, Macao, and Tai- commercialization either on its own or focused its work on PROTAC candidates wan) to Zemdri and related assets. QiLu through a sublicense, in which case AZ in prostate and breast cancers, as well as Antibiotics Pharmaceutical Co. Ltd. is would be eligible for milestones and roy- CNS diseases, and so the current deal will alties.) The companies partnered in 2015 getting exclusive royalty-free rights to the test the utility of the technology in new drug in Greater China. Zemdri received in a deal through which AZ licensed rights areas such as cardiovascular and gyneco- to use DEP in the development of multiple FDA approval in mid-2018 for treating logical diseases. In the past, Arvinas has adults with complicated urinary tract products (in contrast to the current agree- worked with Pfizer, Genentech, and Merck ment that calls for Starpharma to conduct infections (cUTIs). Separately, Heritage & Co., all in undisclosed therapy areas. studies on one specific AZ drug). Terms of Global Partners is buying Achaogen’s lab The agricultural portion of the current the initial deal included a $2m up-front equipment. The firm is also auctioning agreement is worth $55m, representing payment to Starpharma and up to $124m off its C-Scape cUTI assets. Earlier this funding from Bayer. The investment in the in milestones. year Achaogen netted $14.1m through a JV falls in line with Bayer’s crop sciences follow-on offering. business, a diversified operation (built up ATOMWISE INC. even more though the acquisition of Mon- ELI LILLY & CO. ARTIZAN BIOSCIENCES INC. santo in 2018) that the Big Pharma is still Eli Lilly & Co. penned a deal with AI drug BRII BIOSCIENCES investing in as opposed to animal health, discovery firmAtomwise Inc. to support Concurrent with raising $12m in its se- a unit that Bayer is planning to divest as it Lilly’s preclinical discovery efforts. (Jun.) ries A round, Artizan Biosciences Inc. is puts more efforts into life sciences. Atomwise, founded in 2012, created teaming up with Brii Biosciences on up the first deep learning AI technology for ASTELLAS PHARMA INC. to three Artizan programs. (Jun.) structure-based small molecule drug dis- VECT-HORUS The firms will collaborate on up to three covery. The company’s AtomNet platform Vect-Horus and Astellas Pharma Inc. are Artizan programs. Once Artizan demon- uses a statistical approach incorporating collaborating in the development of thera- strates proof-of-concept (expected in the deep learning algorithms and supercom- pies for CNS diseases. (Jun.) next two years), Brii gets rights to de- puters to extract insights from millions of velop and commercialize the compounds Vect-Horus’ VECTrans technology uses a experimental affinity measurements and screening platform of peptide and VHH in China. Specific terms of the deal were thousands of protein structures to predict (single-domain) antibody libraries to iden- undisclosed however it does include how small molecules will bind to proteins. tify and optimize vectors that specifically This allows for analysis of millions of po- money up front, milestones, and royal- target endogenous receptors to facilitate tential molecules to provide toxicity, side ties, and Brii participated in Artizan’s the transport of agents across natural effects, mechanism of action, and efficacy series A financing. Artizan’s programs biological barriers such as the blood-brain of a drug, much earlier than typical in a are based on its IgA-SEQ platform created barrier. Vect-Horus will conjugate Astel- drug pipeline. Lilly will pay Atomwise $1m with IP originating at Yale University. las’ antibody with its vectors and handle per target (for up to ten targets) in discov- The technology can identify disease- conjugate design, initial production, and ery milestones to apply the technology to causing bacteria--by scanning for the validation. Vect-Horus will use VECTrans the Big Pharma’s drug discovery projects. immunoglobin A antibody coating--and to transport the antibody to the brain Atomwise could also get up to $550m can distinguish it from intestinal micro- for treating CNS diseases. Vect-Horus is in development and commercialization biota. Artizan’s compounds are designed eligible for money up front, development milestones (for all targets), and retains to neutralize pathogens. and commercial milestones, and sales an option to develop any compounds from

50 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - - / ❚

| 51 was Zembrace . . hadJanssen (sumatriptan) (sumatriptan) /Sym Zembrace DEAL-MAKING In Vivo | In Vivo 2019 July/August Aegis Therapeutics Aegis under a 2010 deal with the drug’s the drug’s with a 2010 deal under DENOVO BIOPHARMA LLC BIOPHARMA DENOVO CORP. ORION LTD. LABORATORIES REDDY’S DR. LTD. CO. PHARMACEUTICAL SAWAI (niraparib) for ovarian cancer and the and cancer ovarian for jula (niraparib) for device Fields Treating Tumor Optune candidates additional plus cancer), brain a for development late-stage in mid- and tumors. other solid of variety exclusive licensed LLC Biopharma Denovo manufacturing, development, worldwide Orion to rights commercialization and - 2-adrenore an alpha ORM12741, ’s Corp. disease Alzheimer’s for antagonist ceptor (AD). (Jun.) J&J’s deal, Under a 2013 to in Europe) (except rights worldwide development discontinued but ORM12741, IIa trial a Phase 2018 following in April symptoms on agitation/aggression study efficacy projected meet not did in AD that will Denovo which ORM12741, objectives. in previously also was DB105, rename Raynaud’s for Orion by trials clinical - dis until II Phase (reached phenomenon schizophrenia in 2012) and continuation it which I in 2011, after Phase (through in the company’s noted no longer was - bio its apply to plans Denovo pipeline). of the design approach--enabling marker targeted and in smaller trials new clinical previously the than populations patient a DB105 as develop studies--to failed on prior Based medicine. personalized DB105 hoping is Denovo trials, clinical schizophrenia, AD, for useful be may indications, neuropsychiatric other and - DB105 comple depression. including CNS in-licensed existing Denovo’s ments II-ready Phase includes which pipeline, for (pomaglumetad) DB103 candidates for (liafensine) DB104 and schizophrenia Denovo depression. treatment-resistant (licensed candidate an oncology has also ) in development. from Lilly LLC Pharma Promius LLC Laboratories Upsher-Smith US gained LLC Laboratories Upsher-Smith Tosymra to rights marketing and mg 10 spray nasal (sumatriptan succinate) injection injection succinate) (sumatriptan Touch Ltd.’s Laboratories Reddy’s Dr. 3 mg from (Jun.) subsidiary. LLC Pharma Promius to up front; up $70m pays Upsher-Smith ad- and milestones in near-term $40.5m - includ considerations, financial ditional and obligation contractual ing existing on a royalties sales-based and inventory; - an excipi with Formulated basis. quarterly similar levels blood achieve helps that ent Tosymra injection, a subcutaneous to FDA approved earlier this year and is ex is and year this earlier approved FDA that combo a drug-device is SymTouch pected to launch soon. Dr. Reddy’s gained gained Reddy’s Dr. soon. launch to pected to rights marketing worldwide exclusive Tosymra originator, - - - Hiroshima Hiroshima drug TARGIT , Dainippon Sumitomo , a corticosteroid, was was , a corticosteroid, Nefecon CARNA BIOSCIENCES INC. BIOSCIENCES CARNA INC. SCIENCES GILEAD INC. PHARMACEUTICALS DECIPHERA LTD. LAB ZAI tions); and royalties. IgA nephropathy, IgA nephropathy, royalties. tions); and a is disease, Berger’s as known also in up build deposits IgA where condition - inflam damaging cause and kidneys the mation. - Biosci Carna and Inc. Sciences Gilead the for a collaboration penned Inc. ences of commercialization and development cancer small-molecule next-generation (Jun.) immunotherapies. proprietary Carna’s utilize will The deal to program, discovery drug kinase lipid - Gil access. exclusive gains Gilead which and develop to rights global gets also ead I/O undisclosed an against inhibitors sell front $20m up paid The company target. in another $450m over hand could and discov Carna’s royalties. plus milestones, granted Inc. Pharmaceuticals Deciphera and development exclusive Ltd. Lab Zai - gastro its for rights commercialization therapy (GIST) tumor stromal intestinal Macau, Hong Kong, in China, ripretinib (Jun.) Taiwan. and kinase PDGFRa a KIT and is Ripretinib III trials in Phase inhibitor control switch - tu benign or malignant of a type GIST, for - intersti from grow to believed is mor that the GI tract. of in the wall Cajal of cells tial other solid for being studied also is It including KIT or PDGFRa by driven tumors glioblastoma and mastocytosis systemic for front $20m up pays Zai multiforme. milestones development the rights, plus could that milestones sales $50m, to up of the from ranging royalties and $135m, hit a has The company high-teens. to low- includes that pipeline oncology strong (Ze market on the already products two developing using Archimedes using developing the drug to enabling technology, delivery in- small lower the to locally delivered be Calliditas areas. colonic other and testine III in Phase the candidate has currently IgA ne- while that note The partners trials. in the US disease an orphan is phropathy more much is the condition Europe, and China. of territory Everest’s in prevalent since Everest for the third is The deal it In July/August, 2019. the beginning of Spero from antibiotics to rights licensed $65m paid it in April, and front), ($1m up ’ solid Immunomedics to rights for front up sacituzumab. candidate tumor the identification for provide ery platforms has and inhibitors, kinase of variety a of treat of in the development been used conditions, autoimmune cancer, for ments In addition to diseases. neurological and includes partners of list the firm’s Gilead, , Oncology Sierra , Japan Center Cancer National . University Kitasato , and University

- has covered Transactions Strategic - other indica in developed is Nefecon CALLIDITAS THERAPEUTICS THERAPEUTICS AB CALLIDITAS LTD. MEDICINES EVEREST AUCTA PHARMACEUTICALS INC. PHARMACEUTICALS AUCTA INC. PHARMACEUTICALS ETON Ltd. Medicines Everest granted malink) the IgA sell and develop to rights exclusive (enteric Nefecon candidate nephropathy Macau, Hong Kong, in China, budesonide) (Jun.) Singapore. and Taiwan, development, front; up $15m pays Everest - mile commercialization and regulatory, $20m $106m (including to up of stones if Calliditas Therapeutics Phar Therapeutics AB (formerly Calliditas licensed US US licensed Inc. Pharmaceuticals Eton - Pharmaceuti Aucta to rights marketing - la of formulation liquid oral ’s Inc. cals (Jun.) ET105. call will Eton which motrigine, lamotrigine for an NDA submitted Aucta - Con 2019. May in epilepsy pediatric for acceptance the FDA’s the upon tingent $2m to up pay will Eton NDA, Aucta’s of and approval FDA $2m upon up-front, - the issu upon $1m and launch, product In patent. Book-listed an Orange of ance a low-double-digit gets addition, Aucta milestones sales plus sales, on net royalty exceed sales $18m ($1m when net to up exceeds threshold $10m; $2m when that and $50m; exceed sales when $5m $20m; $100m). Eton exceed $10m when sales a neurology-focused establish to plans - commercializa support to force sales to expects it for ET105--which tion efforts its 1H 2020--and during in the US launch lamotrigine So far candidates. other CNS Eton but form, in tablet approved only is will version liquid oral Aucta’s believes administration of route preferred a offer an adoption as dosing lower a as well as primary seizures, partial for therapy junct and seizures, tonic-clonic generalized Lennox-Gastaut of seizures generalized and age of years two patients in syndrome in creating lies expertise Aucta’s older. and regimens, dosing forms, new dosage the using molecules proven for indications pathway. regulatory 505(b)(2) expedited Eton’s ET105 complements The addition of - reformula liquid oral of pipeline existing for drugs dosage solid approved of tions also are which diseases, CNS undisclosed 505(b) the through advance to expected (2) process. (PDV $1.2bn) through which Gritstone is is Gritstone which through $1.2bn) (PDV biopsy and EDGE AI platform its using tumor- ten provide to data sequencing in its use bluebird’s for targets specific program. therapy cell the partnership that Lilly decides not to to not decides Lilly that the partnership artificial of The application further pursue. drug to learning machine and intelligence of topic been a hot has efforts discovery late. and biopharma between deals ten about a notably most year, last the in just AI firms Gritstone and bio bluebird between tie-up company an Informa Inc., Information, Business ©2016 Informa Open for Entries THE 25TH OTC MARKETING AWARDS

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| 53 BioDe- Kymera Kymera , (tecovirimat) for for (tecovirimat) DEAL-MAKING TPOXX In Vivo | In Vivo 2019 July/August in the US and Puerto and in the US Symproic GRUPO FERRER INTERNACIONAL SA INTERNACIONAL FERRER GRUPO LTD. CO. & SHIONOGI INC. PFIZER INC. TECHNOLOGIES SIGA companies will focus on targeted protein protein on targeted focus will companies and cancer for treatments degradation (Jun.) diseases. other serious - dysregu that the concept with Working important are proteins mutated and lated Nurix’s diseases, many of progression to around center efforts drug development - the ubiqui of manipulation and E3 ligases cells. in levels protein control to system tin will the company the deal, of Under terms identify to platform discovery its utilize tar induce to E3 ligases use that agents tar certain of degradation protein geted - can license the option to has Gilead gets. while targets, five to up at aimed didates and co-develop an option to retains Nurix pays Gilead US. the in two to up co-detail to up over hand could and front up $45m and regulatory, $2.3bn in development, low-double to up plus milestones, sales exercise to chooses Nurix If royalties. digit split will the partners rights, opt-in its 50/50 in the US, profits/losses and costs and royalties ex-US for eligible Nurix with The deal payments. milestone reduced Nurix for collaboration big the second is in 2012. formed was the company since in 2015 for front $150m up paid Celgene tar therapies small-molecule to options system proteasome the ubiquitin geting immunology, inflammation, cancer, for get could Nurix immuno-oncology. and fees in option exercise $405m more to up Other royalties. plus milestones, and deg protein in the working companies Arvinas include space radation . , C4 Therapeutics Therapeutics Fer Grupo Ltd. licensed Shionogi & Co. to rights exclusive SA Internacional rer in (naldemedine) Rizmoic its promote (Jun.)Spain. opioid- treating for indicated is Rizmoic - previ (OIC) in adults constipation induced The drug has a laxative. with treated ously 2017 June since US the in approved been received . It Symproic as there sold is and is and 2019 in February approval European Just year. next in Spain launch to expected licensed Shionogi ago months two - com to rights exclusive Sciences livery mercialize rights exclusive Sandoz granted and Rico, the Netherlands. the UK, and in Germany, Inc. Pharmaceuticals King Inc. Technologies Medical Meridian Meridian granted Inc. Technologies Siga global exclusive Inc. Technologies Medical South Korea) and the US (excluding rights oral promote to (Jun.) smallpox. treating not were the agreement of terms Specific payments cash up-front however disclosed - - - - in which the which in -resistantDarzalex pa penned penned Biotech Janssen GENMAB AS GENMAB JOHNSON & JOHNSON INC. SCIENCES GILEAD INC. NURIX Janssen Biotech Inc. Biotech Janssen and AS Genmab option and license worldwide an exclusive the development involving agreement next-generation of commercialization and (Jun.)-CD38. HexaBody - Hexa of R&D activities fund will Genmab clinical of completion through -CD38 Body and myeloma in multiple proof-of-concept can Janssen lymphoma. B-cell large diffuse develop, to rights global license to then opt the mono- commercialize and manufacture, $150ma out shell would and antibody clonal be also would Genmab fee. option exercise in development $125m to up for eligible - royal 20% sales in addition to milestones a specified until -CD38 on HexaBody ties tiered 13-20% by followed time in 2031, Janssen If thereafter. on sales royalties option, Genmab its exercise to not chooses commercialize and develop to continue will for -CD38 HexaBody another gained Inc. Therapeutics Nurix a new multi-year partner through major Inc. Sciences Gilead with deal estimates 14-16%). Elafibranor, a 14-16%). Elafibranor, actions estimates receptor proliferator-activated peroxisome III trials in Phase is agonist, alpha/delta and NASH, for designation) Track Fast (with desig Therapy Breakthrough II (with Phase license, Terns’ to addition In PBC. for nation) on together work also will the partners including projects development additional therapies combination elafibranor potential - (FXR) ago receptor X farnesoid Terns’ with semicarbazide-sensitive and TERN101 nist TERN201 inhibitor (SSAO) oxidase amine and year), last Lilly from (both in-licensed ß-selective (THR) hormone receptor thyroid signal-regulating apoptosis and agonist programs. inhibitor 1 (ASK1) kinase excluding other indications in all tients, and - indica or amyloidosis myeloma multiple or either approved is Darzalex where tions -CD38 HexaBody developed. actively being is results promising demonstrated already has myeloma, in multiple studies in preclinical and Genmab leukemia. and lymphoma, 2012 in collaborating began first Janssen in as agreements two signed when they its use to agreed months. Genmab many develop and create to technology DuoBody disease for several antibodies bispecific Janssen that 10 programs) to (up targets ex got Janssen deal, selects. In the second marketing and development global clusive anti-CD38 a back-up and Darzalex to rights - continu are Both partnerships compound. in resulted have and well progress to ing payments. milestone multiple - regula in development, $193m to up front; milestones; commercialization and tory, Trans (Strategic royalties mid-teens and - Grupo Fer Grupo was SymTouch in the US.the in Bronchitol Eddingpharm Eddingpharm granted . The drug is . The drug is Bronchitol rights in Spain. in Spain. rights Rizmoic HOLDINGS LTD. HOLDINGS EDDINGPHARM INTERNATIONAL INTERNATIONAL EDDINGPHARM LTD. CO. & SHIONOGI EFFRX PHARMACEUTICALS SA EFFRX PHARMACEUTICALS LTD. PHARMAXIS SA GENFIT INC. PHARMACEUTICALS TERNS Shionogi & Co. Ltd. & Co. Shionogi uses a pre-filled, single-dose, disposable disposable single-dose, a pre-filled, uses dispense subcutaneously to autoinjector - hydroxytryp 5 a selective sumatriptan, for agonist, (5-HT) 1B/ID receptor tamine / Zembrace migraine. acute in the launched in 2016 and approved FDA Promius’ The addition of year. same that US complement treatments migraine approved portfolio, CNS existing Upsher-Smith’s XR (topiramate) Qudexy includes which the in cleared capsules, extended-release indicated also and 2017 in migraine for US seizures. of types certain for Ltd. exclusive Holdings International thrombopietin the commercialize to rights - (lusutrom Mulpleta agonist receptor Kong, Hong China, in Mainland bopag) (Jun.) Macau. and the product supply will Shionogi, which an undisclosed gets Eddingpharm, to milestones. sales and payment up-front - throm severe for indicated is Mulpleta chronic with in patients bocytopenia sale for approved was It disease. liver 2018, of in July in 2015, the US in Japan The deal year. this earlier Europe in and Shionogi in for out-licensing the third is licensed months. In April, it few the last the opiate-induced sell to rights Sandoz in (nalmedine) drug Rizmoic constipation Netherlands, the and UK, the Germany, the announcing before a week about and granted it deal, Eddingpharm inhaler a dry-powder via administered the rehydrate to designed and a day twice - a pro stimulating thus surface airway/lung and mucus clear helping and cough ductive should Bronchitol function. lung improve Under 2021. by in Switzerland be launched has Farmaceutici Chiesi 2014 deal, a late sell to rights exclusive - EffRx Pharmaceu licensed Ltd. Pharmaxis commercialize to rights exclusive SA ticals - (man drug Bronchitol fibrosis cystic its (Jun.) in Switzerland. nitol) ob- registering, for responsible is EffRx and reimbursement, and pricing taining commercializing Pharmaceuticals Terns SA granted Genfit and register, develop, to rights exclusive Inc. - steatohepa for nonalcoholic elafibranor sell cholangitis biliary primary and (NASH) titis and Macau, Hong Kong, (PBC) in China, (Jun.) Taiwan. $35m up pays Terns the deal, of Under terms rer expanded was the agreement In mid-2017 in Italy. rights include to company an Informa Inc., Information, Business ©2016 Informa 2019/06/28 17:48 Sponsored by AWARDS OTC TH OTC FOR SPONSORSHIP OPPORTUNITIES CONTACT: Rob Coulson E: [email protected] T: +44 (0) 7825 845 666 FOR ALL OTHER ENQUIRIES: Natalie Cornwell E: [email protected] T: +44 (0) 7827 993 776 Open for Entries Open 25 THE MARKETING 6 December 2019 Entry deadline: AWARDS PRESENTATION GALA DINNER & 2020 | ROYAL LANCASTER LONDON, UK THURSDAY, 5 MARCH https://pharmaintelligence.informa.com/otc JN2265 OTC Awards 2020 Open for Entries Advert US Letter.indd 1 ❚ DEAL-MAKING

are not a part of the deal and both firms AKERO THERAPEUTICS INC. gan & Co.; Jefferies & Co. Inc.; KKR; Mizuho will fund their own activities. Meridian will Akero Therapeutics Inc. (developing treat- Bank Ltd.; Piper Jaffray & Co.; Raymond receive a fee based on a percentage of net ments for nonalcoholic steatohepatitis James & Associates Inc.; SVB Leerink sales. TPOXX is the first FDA-approved drug (NASH) and serious metabolic diseases) CALITHERA BIOSCIENCES INC. for treating smallpox in adults and children netted $98.4m through its initial public weighing at least 29 pounds. It is designed offering of 6.6 million common shares Calithera Biosciences Inc. netted $54m to inhibit viral maturation of variola virus (including the overallotment) at $16. The through the public sale of 14.4 million and other poxviruses by preventing the company originally planned to sell 5 mil- common shares (including the overallotment) at $4. The company is developing formation of a secondary viral envelope. lion shares at $14-16. (Jun.) Siga chose Meridian as a partner because small-molecule drugs directed against Investment Banks/Advisors: Evercore of its global network within the medical tumor metabolism and tumor immunology Partners; JP Morgan Chase & Co.; Jefferies countermeasure industry. targets, and will put the proceeds towards & Co. Inc.; Roth Capital Partners continued pipeline development, with THERAMEX ARQULE INC. projects including telaglenastat for renal THERAPEUTICSMD INC. cell carcinoma, CB1158 for solid tumors, ArQule Inc. (developing therapies for Theramex licensed exclusive commercial- CB280 for cystic fibrosis, and immuno- cancers and rare diseases) netted $97.5m ization rights outside the US to Therapeu- oncology candidate CB708. (Jun.) through a follow-on public offering of 10.6 ticsMD Inc.’s Imvexxy (estradiol; TX004HR) million common shares (including full Investment Banks/Advisors: SVB Leerink; and Bijuva (estradiol/progesterone; exercise of the overallotment) at $9.75 Wells Fargo Securities LLC; William Blair & Co. TX001HR) prescription hormone replace- each to fund ongoing development of its ment therapies (HRTs) for menopausal CATALENT INC. clinical candidates. (Jun.) women. (Jun.) Catalent Inc. privately sold $500m in ag- Investment Banks/Advisors: B. Riley FBR The agreement excludes Canada and gregate principal amount of 5% senior Inc.; Needham & Co. Inc.; Oppenheimer & Israel, where Knight Therapeutics has unsecured notes due 2027 priced at par. Co. Inc.; RBC Capital Markets; Roth Capital exclusive commercialization rights from The company will use the proceeds to pay Partners; SVB Leerink TherapeuticsMD through a 2018 alli- off outstanding borrowings and related ance. Under the current deal, Theramex BIOHAVEN PHARMACEUTICAL fees under term loans from existing senior pays €14m ($15.8m) up front; €29.5m HOLDING CO. LTD. secured credit facilities. (Jun.) in milestones (an aggregate €2m upon Neuro-focused Biohaven Pharmaceutical CONTRAVIR PHARMACEUTICALS INC. regulatory approvals in certain specified Holding Co. Ltd. netted $282m in a public ContraVir Pharmaceuticals Inc. (treat- markets and €27.5m (payable in escalating offering of 7 million shares at $43. The tranches) when certain net sales goals in ments for nonalcoholic steatohepatitis company will use the proceeds to support and chronic hepatitis infections) netted the licensed territories ranging from €25- continued and expanded development of 100m are met); plus, royalties on net sales. $14.5m through a public offering of com- its three platforms: calcitonin gene-related mon and preferred shares. The company Both HRTs were already FDA approved last peptide (CGRP) receptor antagonists; glu- year, but Theramex is responsible for all sold 838,333 Class A units at $6 (with each tamate modulators; and myeloperoxidase unit consisting of one common share and additional regulatory and commercializa- (MPO) inhibitors. An NDA submission is tion activities in the licensed territories. one five-year common share purchase expected in mid-2019 for its most advanced warrant exercisable at $6), and also is- Administered as a vaginal suppository CGRP candidate rimegepant (in Phase III for using theVagiCap softgel capsule, Imvexxy sued 10,570 Class B units at $1k apiece, migraine) using a priority review voucher with each holding one series E preferred was launched in the US in September 2018 (PRV) Biohaven bought earlier this year for dyspareunia (vaginal pain associated share (convertible into 167 common) and from GW Pharmaceuticals, allowing the with sexual activity) due to menopause. 167 warrants. (Jun.) former to designate a single NDA for pri- Launched in the US in April 2019, Bijuva is Investment Banks/Advisors: Roth Capital ority status and providing an accelerated an oral capsule for vasomotor symptoms Partners six-month review period. (Jun.) (also known as hot flashes) of menopause. GENOCEA BIOSCIENCES INC. The deal broadens Theramex’s current Investment Banks/Advisors: Canaccord portfolio of women’s health offerings in Genuity Inc.; Cantor Fitzgerald & Co.; Genocea Biosciences Inc. (neoantigen im- the areas of contraception, fertility, meno- Goldman Sachs & Co.; Oppenheimer & Co. munotherapies) netted $34.5m through the pause, and osteoporosis. Inc.; Piper Jaffray & Co.; William Blair & Co. public sale of 10.5 million common shares at $3.50. Proceeds will go towards contin- BRICKELL BIOTECH INC. FINANCINGS ued development of personalized cancer NovaQuest Capital Management commit- vaccine GEN009 (Phase I/IIa trials for solid ACELRX PHARMACEUTICALS INC. ted up to $25m in near-term research and tumors including cutaneous melanoma, Oxford Finance provided AcelRx Pharma- development funding to Brickell Biotech non-small cell lung cancer, squamous cell ceuticals Inc. (sublingual delivery of pain Inc. following the closing of Brickell’s carcinoma of the head and neck, urothelial medications) with a $25m senior secured concurrent reverse merger with Vical carcinoma, and renal cell carcinoma); fil- debt facility, which was fully funded at Inc., which will hold a 40% stake in the ing of an IND and initiating development closing. The term loan will mature on June combined company. (Jun.) of GEN011 (adoptive T-cell therapy); and 1, 2023 and bears interest at variable rate preclinical studies with GEN010 (next-gen equal to the greater of 9.25% or the 30-day BRIDGEBIO PHARMA INC. neoantigen vaccine). (Jun.) netted $324.1m in US LIBOR rate, with interest-only pay- BridgeBio Pharma Inc. Investment Banks/Advisors: Needham & its oversubscribed initial public offering ments for the first 12 months. AcelRx will Co. Inc.; Robert W. Baird & Co. Inc.; SVB use the proceeds to further support the of 20.5 million common shares at $17 Leerink; Stifel Nicolaus & Co. Inc. commercial launch of Dsuvia (sufenatil) each on the Nasdaq. The company had sublingual tablets for pain (FDA approved planned to sell 15 million shares between GLOBAL BLOOD THERAPEUTICS INC. in November 2018 and launched in Febru- $14 and $16. (Jun.) Global Blood Therapeutics Inc. netted ary 2019) and repay its $9m balance on a Investment Banks/Advisors: BMO Finan- $193m through a public offering of 3.4 mil- previous credit facility. (Jun.) cial Group; Goldman Sachs & Co.; JP Mor- lion common shares at $59.25. Proceeds

54 | In Vivo | July/August 2019 invivo.pharmamedtechbi.com invivo.pharmaintelligence.informa.com invivo.pharmaintelligence.informa.com - - - ❚

| 55 (immuno- DEAL-MAKING In Vivo | In Vivo 2019 July/August SELLAS LIFE SCIENCES GROUP INC. GROUP SCIENCES LIFE SELLAS THERAPEUTICS INC. SERES INC. BIO SESEN THERAPEUTICS INC. SORRENTO $15. The company will use the proceeds the proceeds use will $15. The company lead of development ongoing support to II (in Phase SRK015 candidate antibody preclinical atrophy); muscular spinal for trial I proof-of-concept Phase initial and transforming (a SRK181 for activities cancers for 1 inhibitor beta factor growth - thera blockade checkpoint to resistant other for studies preclinical and pies); (Jun.) programs. pipeline - Finan BMO Banks/Advisors: Investment & Jefferies LLC; Co. & Cowen Group; cial Sciences Life PacGrow Wedbush Inc.; Co. netted Inc. Group Sciences Life Sellas which in offering public a through $13.5m common million 23.36 sold the company warrants five-year (plus $0.15 at shares $0.50) at common million 23.36 buy to at warrants pre-funded million 73.6 and purchase to warrants (along with $0.1499 of Most $0.50). at common 73.6 million initiate help the company will the funds project lead with III trial Phase a pivotal - leuke myeloid acute for galinpepimut-S the of I/II trial a Phase continue and mia pembroli with combination in candidate (Jun.) cancers. solid and blood for zumab Maxim Banks/Advisors: Investment LLC Group Seres developer therapeutics Microbiome through $56.4m netted Inc. Therapeutics million 26.67 of offering public a follow-on (Jun.) each. $2.25 at shares common & Co. Cowen Banks/Advisors: Investment & Co. Sachs Goldman LLC; $28.2m netted (oncology) Bio Inc. Sesen million 20.4 of offering a public through also Investors $1.47. at shares common purchase to warrants one-year received the purchase at shares more million 20.4 continued support will Proceeds price. manufactur and regulatory development, - commercializa future and ing activities, monatox) (oportuzumab Vicinium tion of cancer bladder invasive non-muscle for (NIMBC). (Jun.) Canaccord Banks/Advisors: Investment Inc. Genuity Inc. Therapeutics Sorrento netted management) pain and oncology 8.33 of offering a public through $23.5m share $3. Each at shares common million warrants: following the with sold also was a purchase to A warrant series ten-year nine-month se- $3.75; at share common $3; and at one common for B warrant ries be exercised to warrant, C series a ten-year B war series a corresponding if $3.75 at rant was exercised. Proceeds will support the company’s of development continued CEA pain), cancer for (resiniferatoxin, RTX - - - - Prevail Prevail (fer Triferic ROCKWELL MEDICAL INC. MEDICAL ROCKWELL CORP. HOLDING ROCK SCHOLAR RESVERLOGIX CORP. RESVERLOGIX PREVAIL THERAPEUTICS THERAPEUTICS INC. PREVAIL ODONATE THERAPEUTICS THERAPEUTICS LLC ODONATE tor signaling modulation) netted $42.3m $42.3m netted modulation) signaling tor at shares 3 million of offering in a public (treatments for end- for (treatments Inc. Medical Rockwell kidney chronic and disease renal stage shares common million 5.8 sold disease) netted that offering in a public $3 piece at support will Funds $16.4m. the company dialysate of commercialization (therapeutic Corp. Holding Rock Scholar fac growth on protein based antibodies (epigenetics-based drug (epigenetics-based Inc. Resverlogix ($10.5m) $Cdn14m netted development) 3.8 million of offering a public through of consisted unit Each $Cdn4. at units war a four-year and share one common HC $4.60. at a share purchase to rant agent. placement the was Wainwright - includ R&D, ongoing fund will Proceeds with III trial Phase ing the BETonMACE is which apabetalone, candidate lead apabetalone with treatment if evaluating totime the increases placebo to compared cardiac adverse major a of occurrence first disease cardiovascular in high-risk event low and II diabetes Type with patients HDL. (Jun.) of levels Bloom Bur Banks/Advisors: Investment & Co. Wainwright HC & Co.; ton go also will and citrate), pyrophosphate ric intravenous of commercialization towards (Jun.) approved. is it once Triferic Cantor Banks/Advisors: Investment & Co.; Wainwright HC & Co.; Fitzgerald Co. & Piper Jaffray Neurodegenerative-focused Neurodegenerative-focused virus Inc. (adeno-associated Therapeutics therapies) gene for vectors (AAV)-based offering public initial in its $116.3m netted the midpoint $17, at shares million 7.4 of (Jun.) range. anticipated its of of Bank Banks/Advisors: Investment LLC; & Co. Cowen Lynch; Merrill America PacGrow Wedbush & Co.; Stanley Morgan Sciences Life Odonate Therapeutics - (develop Therapeutics Inc. Odonate netted cancer) for therapies ing taxane 4.75 of offering a public via $117.3m Proceeds $26. at shares common million - develop continued for earmarked are II/ in Phase is which tesetaxel, of ment cancer breast metastatic for III studies breast triple-negative metastatic and (Jun.) cancer. Cowen Banks/Advisors: Investment LifeSci Inc.; Co. & Jefferies LLC; Co. & LLC Capital - BMO Finan Banks/Advisors: Investment & Jefferies LLC; & Co. Cowen Group; cial LLC Securities Fargo Wells Inc.; Co. - - - (muscarinic (muscarinic netted $108.4m through through $108.4m netted MIRATI THERAPEUTICS THERAPEUTICS INC. MIRATI INHIBRX INC. INHIBRX THERAPEUTICS INC. KARUNA INC. ONCOLOGY KURA THERAPEUTIC MORPHIC INC. will support continued development and and development continued support will sur activities commercialization future net (oncology) Therapeutics Inc. Mirati (biologics for cancer, infec cancer, for (biologics Inc. Inhibrx Inc. Therapeutics Karuna Kura company medicine cancer Precision Inc. Oncology common 6.8 million of offering a public at the overallotment) (including shares continued for earmarked are Proceeds $17. for tipifarnib of development R&D including KO539 and KO947 cancers; blood and solid and AML, respectively; and tumors solid for (Jun.) projects. pipeline additional & Co. Cowen Banks/Advisors: Investment & Oppenheimer & Co.; Wainwright HC LLC; PacGrow Wedbush Leerink; SVB Inc.; Co. Sciences Life $83.7m Therapeutic Morphic netted Inc. on the offering public initial its through at shares common 6 million of Nasdaq 5 million sell to planned had It each. $15 (Jun.) $16. $14 and between shares rounding voxelotor for sickle cell disease, disease, cell sickle for voxelotor rounding additional of R&D towards go also will and vaso- for inclacumab including projects (Jun.) crisis. occlusive Cantor Banks/Advisors: Investment & Co. Fitzgerald conditions) orphan and diseases, tious offering.public (Jun.) initial for its filed Barclays Banks/Advisors: Investment Nomura Partners; Evercore PLC; Bank Raymond Inc.; International Securities Inc. Associates & James and psychiatric for modulators receptor in an $83m netted disorders) cognitive shares 5.6 million of offering public initial anticipated its of the midpoint $16, at to planned originally The company range. (Jun.) shares. 4.375 sell Citigroup Banks/Advisors: Investment Wedbush Co.; & Sachs Goldman Inc.; Se- Fargo Wells Sciences; Life PacGrow LLC curities of offering a public through $191.5m ted The $97. at shares common million 2.1 - devel for the funds use to plans company melanoma, (NSCLC, sitravatinib of opment tumors), other solid and cancer, bladder cancer colorectal and (NSCLC MRTX849 a including projects preclinical and (CRC)), colorectal, NSCLC, for G12D inhibitor KRAS (Jun.) cancers. pancreatic and Barclays Banks/Advisors: Investment Suisse Credit LLC; & Co. Cowen PLC; Bank HC LLC; Partners Guggenheim Group; Inc. & Co. Oppenheimer Co.; & Wainwright company an Informa Inc., Information, Business ©2016 Informa ❚ DEAL-MAKING

CAR-T (liver tumors), and CD38 CART (multiple myeloma) programs. (Jun.) Investment Banks/Advisors: HC Wain- editors editorial advisory board wright & Co.; JMP Securities LLC Lucie Ellis Brian Chapman Executive Editor ZS Associates, Partner STOKE THERAPEUTICS INC. Genetic disease-focused Stoke Thera- William Looney Benjamin Comer Pharma Editor PwC, Senior Manager peutics Inc. (antisense oligonucleotides Health Research Institute to upregulate gene expression) netted Ashley Yeo $132m in its initial public offering of 7.9 Medtech Editor Don Creighton ICON, Global Head of Pricing & Market Access million shares at $18. The company origi- Amanda Micklus nally planned to sell 6.7 million shares at Principal Analyst Sara Jane Demy a $14-16 range. (Jun.) Demy Colton, CEO Investment Banks/Advisors: Canaccord Andrea Charles Editor Custom Content Deborah Dunsire, MD Genuity Inc.; Cowen & Co. LLC; Credit H. Lundbeck, President & CEO Suisse Group; JP Morgan & Co. Regina Paleski Contributing Editor Barbara Freischem THE MEDICINES CO. European Biopharmaceutical Enterprises Executive Director The Medicines Co. (mostly focused in director, medtrack & the cardiovascular disease space) netted strategic transactions content Les Funtleyder E Squared Capital Management $141.4m through the follow-on public Patricia Giglio sale of 4.55 million common shares at Health Care Portfolio Manager deals analysts $33 each. The company will use the funds Terry Hisey Beth Detuzzi, Deanna Kamienski for ongoing development of its Phase III Deloitte, Senior Principal, Life Science inclisiran for homozygous familial hyper- Maureen Riordan Annlisa Jenkins cholesterolemia. (Jun.) PlaqueTec, CEO Investment Banks/Advisors: Goldman head of publication design Sachs & Co.; JP Morgan & Co. Gayle Rembold Furbert Ken Kaitin, PhD Tufts Center for the Study of ZYMEWORKS INC. senior designer Drug Development Director Janet Haniak ZymeWorks Inc. (bispecific antibodies and Harris Kaplan ADCs for cancer) netted $189m through its designers Red Team Associates, Managing Partner latest public offering. The company sold Debi Robinson, Jean Marie Smith, Ellen Licking 7 million common shares (including the Paul Wilkinson EY, Senior Analyst, Global Life Sciences overallotment) at $18, and to a certain investor sold 4.17 million pre-funded war- Julie Locklear head of editorial ops (pharma) Managing Partner, Genesis Research rants at $17.9999 apiece. ZymeWorks will Karen Coleman use some of the proceeds to support con- Roger Longman tinued development of the bispecific an- head of content Real Endpoints, CEO Mike Ward tibody ZW25 as a single and combination Dan McIntyre therapy for HER2-expressing solid tumors; Publick House, Partner ZW49, a bispecific antibody-conjugate advertising also for HER2-expressing tumors; and Christopher Keeling Ranjini Prithviraj other preclinical pipeline programs. (Jun.) DIA Publications subscriptions Senior Managing Editor/Associate Director Investment Banks/Advisors: JP Morgan Dan Simmons, Shinbo Hidenaga Chase & Co.; Ladenburg Thalmann & Co. Michael Ringel, PhD Inc.; Raymond James & Associates Inc.; managing director BCG, Senior Partner and Global Topic Leader Research and Product Development Stifel Nicolaus & Co. Inc.; Wells Fargo Phil Jarvis Securities LLC Kenneth Schultz, MD editorial office Chairman and CEO, Trethera Corporation ❚ 605 Third Avenue, Floor 20-22 Jack Wong RESEARCH, ANALYTICAL New York, NY 10158 EQUIPMENT & SUPPLIES Baxter Healthcare invivo.pharmaintelligence.informa.com Head of Regulatory Affairs, APAC

FINANCINGS customer service Nadim Yared CVRx, President & CEO ADAPTIVE BIOTECHNOLOGIES CORP. [email protected] Adaptive Biotechnologies Corp. (immuno- sequencing diagnostics) netted $279m in IN VIVO: [ISSN 2160-9861] is published monthly, except for the combined July/August issue, its oversubscribed initial public offering of by Informa Business Intelligence, Inc., 605 Third Avenue, Floor 20-22, New York, NY 10158. 15 million common shares at $20 each on US Toll-Free: +1 888 670 8900 | US Toll: +1 908 547 2200 | UK & Europe: +44 (20) 337 73737 the Nasdaq. The company planned to sell Australia: +61 2 8705 6907 | Japan: +81 3 6273 4260 12.5 million shares between $15 and $17 Office of publication, The Sheridan Group, 66 Peter Parley Row, Berlin, CT 06037. each. (Jun.) Postmaster: Send address changes to Informa Business Intelligence, 605 Third Avenue, Investment Banks/Advisors: BTIG LLC; Floor 20-22, New York, NY 10158. Bank of America Merrill Lynch; Cowen © 2019 by Informa Business Intelligence, Inc., an Informa company. & Co. LLC; Goldman Sachs & Co.; Gug- All rights reserved. genheim Partners LLC; JP Morgan & Co.; No part of this publication may be reproduced in any form or incorporated into any information William Blair & Co. retrieval system without the written permission of the copyright owner.

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