Synthetic Biology and the Computerization of Drug Development

invivo.pharmamedtechbi.com OCTOBER 2016

Invol. 34 ❚ no. 09 Vivopharma intelligence ❚ informa Synthetic Biology And The Computerization Of Drug Development

Synthetic biology oers opportunity across many industries, but the ultimate prize may be health care. BY MELANIE SENIOR

❚ Fujifilm Promises A Shake-Up Of ❚ How Immuno-Oncology Is Turning ❚ When It Comes To Pharma R&D ROI, Regenerative Medicines Market Biomarker Development On Its Head Mid Pharma Companies Outperform BY Ashley Yeo By Olivier Lesueur, Rachel Laing By Amanda Micklus and Mark Ratner

invivo.pharmamedtechbi.com CONTENTS ❚ In Vivo Pharma intelligence | October 2016

8 COver ❚ Synthetic Biology And The Computerization Of Drug Development

Melanie Senior Synthetic biology offers opportunity across many industries, but the ultimate prize may be health care. The millions of dollars investors have poured into companies developing CAR-T cell therapies and gene editing technologies points to growing confidence in the power of gene manipulation to generate novel, approvable therapeutics, even if for now these are just the early steps toward creating fully synthetic organisms.

Features 22 28

How Immuno-Oncology Is James Mazzo: 1 Turning Biomarker Growing Giant Zeiss With A Development On Its Head Small Company Mentality By Olivier Lesueur, Rachel Laing Tina Tan and Mark Ratner Having worked in the ophthalmic device Immuno-oncology’s challenge is to industry for more than 35 years in both orchestrate a biomarker program in a multinationals and start-ups, James highly competitive drug development Mazzo’s latest port of call is at Carl landscape knowing that prior to having Zeiss Meditec as head of the group’s significant clinical experience, the ophthalmology business. He discusses program is unlikely to yield the kinds what he views to be the strengths and of binary measurements used to define weaknesses of the global business, Fujifilm’s Toshikazu Ban and select a patient population for a which he says has the broadest product targeted therapy. offering in the ophthalmic industry, and 16 how he plans to help a market giant grow even bigger. Fujifilm Promises A Shake-Up Of Regenerative 32 Medicines Market When It Comes To Pharma Ashley Yeo R&D ROI, Mid Pharma Fujifilm has successfully transformed its Companies Outperform business strategy by expanding away from traditional photographic film and Amanda Micklus toward new priority business fields – Datamonitor Healthcare’s measurement significantly in regenerative medicine. of pharma R&D productivity finds that Identifying health care as a key growth Mid Pharma companies outperform on a area, Fujifilm targets the role of being a Return on Investment index. The second comprehensive provider in the fields of in a two-part series evaluating R&D prevention, diagnosis and treatment. productivity.

departments exclusive online content invivo.pharmamedtechbi.com Around The Industry ❚ Device/Diagnostics 4 StemCells Finds White Knight ❚ Deals In Depth Dealmaking Statistics In Microbot Peter Charlish An overview of biopharma, medtech and Q2 2016 diagnostics dealmaking in August 2016 Maureen Riordan and 5 In Vivo’s Deals Of The Month: Amanda Micklus Amanda Micklus September 2016 NANCY DVORIN ❚ Brexit, Brexit Everywhere ❚ Immunotherapies Set 6 Commercial Considerations And Such A Lot To Think To Spark Alzheimer’s For Cell And Gene Therapies: Ashley Yeo Drug Market Viewpoints From The 2016 Nancy Dvorin ARM Meeting Amanda Micklus

36 On The Move Significant recent job changes in ❚ From The Editor pharma, medtech and diagnostics On October 11, Zymergen, a Bay Area start-up 2 40 Dealmaking that makes designer microbes for processes across numerous industries, announced it had Deals Shaping The Medical Industry, raised a $130 million Series B round led by Japa- September 2016 nese telecom conglomerate SoftBank. It’s just the latest example of a tech investor glomming onto an emerging synthetic biology play. In our You Asked...We Delivered! cover story this month, Melanie Senior surveys Relevant and exclusive online-only the history and landscape of this paradigm- content at your fingertips 24/7 shifting field. Health care applications for syn- bio have not advanced as quickly as those for Access your subscription by visiting: Nancy Dvorin other industries, but the potential for them is invivo.pharmamedtechbi.com huge once pharma figures out how to overcome and log in. the many regulatory, commercial and ethical hurdles. Elsewhere in this issue, we explore how Japan’s Fujifilm, which started its Don’t have an online user account? life in photography, has in recent years dealt its way into regenerative medi- Quickly and easily create one cine. Even though immuno-oncology developers aren’t waiting for biomark- by clicking on the “Create your ers to emerge before they commercialize their drugs, we argue that fitting a account” link at the top of the page. biomarker research component into the IO discovery/development process Contact: may well be a key element of product differentiation. And we wrap up our [email protected] two-part series on pharma R&D productivity with a look at market leaders as or call: (888) 670-8900 or +1 (908) measured by return on investment. 748-1221 for additonal information. Remember that you don’t have to wait for the print issue to see what In Vivo has been up to – we post content online throughout the month at invivo.pharmamedtechbi.com. We’ll be happy to send you an email alert whenever anything new posts. Click on the My Accounts tab on our home page to register. We’re always eager to hear from you – please send your questions, sugges- /invivo @invivo /invivo tions, concerns and comments to [email protected].

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StemCells Finds White Knight In Microbot

In May 2016, StemCells Inc., the biopharmaceutical company headquartered in Newark, found a practical application in Micro- CA, looked ready to throw in the towel. Results from a Phase II study of its only prod- bot’s Self-Cleaning Shunt (SCS), a robotic uct still in development, HuCNS-SC (a preparation of human neural stem cells for the system designed to prevent occlusions in treatment of chronic spinal cord injuries), suggested that there was little chance of the the cerebrospinal fluid shunts used in the product ever becoming a commercial success. Overnight the company’s shares, already treatment of hydrocephalus. Congenital devalued by an earlier 12-for-1 reverse stock split, plummeted over 80% to $0.57 a share. hydrocephalus affects up to five out of Then, in August, when all appeared to (life science management and holdings every 1,000 live births in the US, and is the be lost, StemCells announced that it was group), contract research organizations most common reason for brain surgery in entering a strategic merger agreement and other service companies. He is also children. It is characterized by abnormal with the Israeli company Microbot Medi- chairman of Cann 10, a medical cannabis- accumulation of cerebrospinal fluid in cal Ltd., which researches and develops focused accelerator. Mr Gadot has held the brain ventricles, leading to increased micro-robotic assisted medical technolo- a number of leadership positions in the intracranial pressure, tunnel vision, con- gies. The announcement came after an health care area including senior market- vulsions and mental disability. Normal extensive search for strategic alternatives ing roles at Johnson & Johnson, and he pressure hydrocephalus is a separate to winding up operations. Ian Massey, is currently chairman of XACT Robotics condition that can occur later in life, when StemCells’ CEO at the time, said the com- (which is developing technology for ro- it leads to symptoms such as disordered pany believed that its investors and the botic needle steering in minimally inva- gait, urinary incontinence and dementia. market at large would see the potential sive interventional procedures) and also The only effective treatment for hydro- 4 of Microbot’s robotics platform. serves as chairman and CEO of Microbot. cephalus is the insertion of a ventricu- Massey was right, it would seem, Microbot is developing two technolo- loperitoneal shunt, which drains excess because following the merger announce- gies that it states have the potential to im- cerebrospinal fluid into the peritoneal ment, StemCells’ share price soared 600% prove an individual’s health, comfort and cavity. However, the design of ventriculo- on Nasdaq. Under the terms of the merger quality of life as well as add value to other peritoneal shunts has changed very little deal, which is contingent on StemCells stakeholders such as hospitals and health over the years, and they are all vulnerable being free of debt and raising at least care systems. The first is ViRob, an auton- to complications, in particular to obstruc- $4 million by the actual merger date, omous, crawling micro-robot controlled by tion of the ventricular (proximal) part of Microbot’s shareholders will own 95% remotely applied electromagnetic fields. the shunt. Eighty-five percent of patients of the merged company, with Microbot’s The second is TipCAT, a semi-disposable, with a shunt will require two or more revi- management assuming responsibility for flexible, self-propelled endoscope provid- sion surgeries within 10 years of initial its running. The merged firm will be known ing “see and treat” capabilities. ViRob is deployment. Revision surgery is both risky as Microbot Medical Inc. approximately 4 mm in length and 1 mm and expensive, involving delicate proce- Microbot was founded in 2010 by in diameter, which allows it to navigate to dures and exposure to ionizing radiation. three Israeli serial entrepreneurs, Moshe different spaces within the body, such as Microbot’s SCS device is designed as Shoham, PhD, Yossi Bornstein and Harel the lumen of blood vessels, the digestive the ventricular catheter portion of a ven- Gadot, to commercialize technologies tract and the respiratory system. Accord- triculoperitoneal shunt system and com- developed at Shoham’s laboratory at the ing to the company, areas of application prises a silicone tube with a perforated tip. Technion Israel Institute of Technology in include: neurosurgery, as a treatment It connects to a standard shunt valve at its Haifa. Some 10 years earlier, Shoham had for post-hemorrhagic hydrocephalus in distal end and incorporates an internal founded Mazor Robotics Ltd., a company preterm infants; brachytherapy, as an robotic cleaning mechanism embedded that specializes in miniature robotic guid- aid to accurate delivery of radiotherapy in the lumen at the proximal end. The ance systems based on real-time image or chemotherapy directly to the lung or cleaning mechanism is activated by means processing, and he is currently head of the prostate; imaging, with an attached of an induced magnetic field generated the robotics laboratory at the Technion camera that can visualize the lumen of externally by a special headset. Activation Department of Mechanical Engineering, the spinal canal, ureters or bronchi; and of the device prevents tissue from enter- as well as scientific director of Microbot. for targeted drug delivery, as it can deliver ing the perforations in the catheter, thus Bornstein has co-founded and led a drugs to the precise location where they maintaining the flow of CSF. number of companies in the Israeli life are needed. TipCAT, on the other hand, is a self-pro- science industry including Shizim Group The ViRob technology has already pelling endoscope with potential cardio-

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vascular, urological and gastrointestinal ling TipCAT device is able to pass through ing technology and steering capabilities applications. The self-propulsion is gen- the urethra with minimum damage, which along with a disposable, low-cost, self- erated by a series of balloons that inflate means that many procedures such as propelling unit and fluid supply channels. and deflate sequentially to create locomo- lithotomy or stenting can be carried out The $64,000 question now, however, tion. In so doing the device applies the without the need for anesthesia. is what will the merged company do with minimum pressure necessary to achieve The technology is most advanced in StemCells’ technology: will it somehow in- adequate friction, which, according to Microbot’s TipCAT self-propelled semi- corporate it into Microbot’s micro-robotic Microbot, is less than when a conventional disposable colonoscope, which combines technology, or will it simply dispose of it? endoscopic device is inserted. As a result, all the features of a standard therapeutic On the face of it, there seems to be little if it is claimed to better negotiate tortuous colonoscope with the advantages of a self- any synergy between the two companies’ anatomy. It also incorporates a working propelled mode and disposable elements technologies, but disposal of the stem channel that supports the introduction of that directly contact the body. The device cell technology would beg the question functional tools. comprises a console unit to provide power, of what was the attraction of the deal The TipCAT device is deployed over a a reusable unit for housing such elements from Microbot’s perspective in the first traditional guidewire but Microbot claims as a high-performance camera, steering place. Clearly one benefit is that it gives the self-propelling mechanism is able to mechanism and other electronic ele- the Israeli company much greater access maneuver through bifurcations and curves ments, and a disposable unit that comes to US capital markets, and it may be that better than conventional catheters that into contact with the body and contains a that is the motivation pure and simple. are advanced by hand. In the cardiovascu- self-propulsion component, working chan- Neither StemCells nor Microbot replied lar area, the device can be used to deliver nel, suction channel and a water and/or to requests for clarification. a balloon or stent, or even atherectomy air supply for camera washing and colon IV004945 devices. In urology, where current devices inflation. According to the company, the Peter Charlish are introduced by being pushed through concept of a semi-disposable colonoscope [email protected] the appropriate channel, the self-propel- allows incorporation of the latest imag-

❚ Deals of the MONTH 5 In Vivo’s editors pick September’s top alliance, financing and M&A deals.

Its most advanced candidate is crenezumab (an anti-abeta Top Alliances: antibody) in Phase II/III for Alzheimer’s disease prevention Sanofi And Verily’s Diabetes JV and treatment, partnered with Roche/Genentech Inc. Under an alliance signed with Biogen Inc. in April 2016, AC Immune Sanofi and Verily Life Sciences will invest $500 million in is also developing brain-imaging biomarkers for two protein their new joint venture Onduo, which will develop integrated targets – alpha-synuclein and TDP43, both implicated in neu- treatment and monitoring solutions for diabetes. Onduo will rodegenerative diseases, including Parkinson’s. Since its 2003 operate independently from its creators, but can draw on inception, AC Immune has raised $127.5 million, most recently their resources as well as those from outside partners. With a $43.5 million Series E round in May 2016. the first product expected on the market within two to three years, Onduo CEO Joshua Riff, MD, envisions using Sanofi’s drug expertise and Verily’s knowledge of miniature electronics, analytics and consumer software development to create Top M&A: delivery and monitoring technologies that give type 2 (and Allergan’s Buying Spree eventually type 1) patients the ability to better manage their Allergan PLC built a non-alcoholic steatohepatitis franchise disease. The joint venture is the second in as many months for overnight in mid-September, acquiring Tobira Therapeutics Verily, whose Galvani Bioelectronics neuromodulation JV with Inc. for $1.7 billion on September 20 and announcing a $50 GlaxoSmithKline PLC was our pick for top alliance in August. million buy-out of Akarna Therapeutics Inc. the same day. Tobira’s Phase II NASH candidate cenicriviroc is a dual CCR2/ Top Financing: CCR5 inhibitor that the company thinks could succeed as a NASH therapeutic by addressing both the fibrotic and inflam- AC Immune’s IPO matory components of the disease. Akarna has a preclinical Swiss Alzheimer’s drug and vaccine developer AC Immune farnesoid X receptor antagonist for NASH. That’s not all, folks: SA netted $61.4 million in a Nasdaq initial public offering of Allergan rounded out the month by paying $60 million up front 6 million shares (upsized from the 4.5 million it had originally for gene therapy developer RetroSense Therapeutics LLC and planned) at $11, the low end of its anticipated $11–$13 range). $639 million for computational dermatology drug designer The company will use the proceeds to further develop its thera- Vitae Pharmaceuticals Inc. peutic and diagnostic neurodegenerative disease pipeline.

Commercial Considerations For Cell And Gene Therapies: Viewpoints From The 2016 ARM Meeting

The Alliance for Regenerative Medicine held its annual Cell & Gene Meeting on the Mesa payers may not have much or any ex- in La Jolla, CA, in early October. Over the course of the three-day partnering meeting perience. She gave the example of rare and scientific symposium, several important issues affecting the cell and gene therapy blinding diseases, in which her company industries were discussed, including commercial considerations. is involved, saying that payers are not From a regulatory standpoint, the cell therapy is a unique case study. Elizabeth yet experienced with reimbursing for any and gene therapy field is growing rapidly. White, PhD, the assistant vice president for products that cure blindness. Therefore, Celia Witten, MD, PhD, the deputy director early commercial planning in rare disease it is the developer’s job to produce the of the FDA’s Center for Biologics Evalua- and gene therapy at Pfizer Inc.’s Pfizer In- primary data on health economics and to tion and Research, reported that there has novative Health, said that these therapies do that early. been an explosion of investigational new are designed to last for a long time, but GlaxoSmithKline’s Strimvelis was the drug (IND) applications submitted to the the ability to show that in clinical trials most recent cell and gene therapy to be Office of Cellular, Tissue and Gene Thera- is limited. GlaxoSmithKline’s Kili further approved worldwide. The European Com- pies (OCTGT) over the last couple of years, backed up that point, admitting that the mission granted marketing authorization including over 200 submissions in both field is uncharted territory. Companies on May 27, 2016 for the ex vivo stem cell 2014 and 2015. Furthermore, the dealmak- just do not know yet what will happen to gene therapy in severe combined immu- ing climate for cell and gene therapies patients receiving cell or gene therapy 30, nodeficiency due to adenosine deaminase has encouraged investment and more innovation. With several cell therapies on the market, and a few gene therapies that have now been launched in Europe Kili also mentioned the importance of and the US during recent years, the field can now benefit from past experiences in logistics in ex vivo therapy, saying companies 6 commercialization and lessons learned. A panel of biopharma executives met on day in this area need to put together logistical 2 of the ARM meeting to discuss aspects of commercialization that are unique to pathways so that the sponsor is always in the gene therapy sector. “Commercialization is more than just control of and responsible for those cells on pricing.” This quote, from the president behalf of the clinicians and patients. and chief executive officer ofApplied Genetic Technologies Corp. Sue Washer, represents the overarching theme of the commercial panel discussion. Washer 60 or 90 years down the road, for example. deficiency, a rare disease affecting the acknowledged that, understandably, cell The panelists discussed what needs immune system. GSK’s Kili provided in- and gene therapy drug developers want to to be done early on in development to sight behind the company’s strategy with see a return after working on the develop- demonstrate the value of cell and gene Strimvelis. He said GlaxoSmithKline will ment of a product for years. However, the therapies. Matthew Patterson, president not make a profit on this first indication for real focus should be on the patient and the and chief executive officer ofAudentes the drug (the company exercised options societal benefit. She said it is important Therapeutics Inc., stressed the impor- from its licensers Fondazione Telethon’s that through the clinical development tance of building in a collection of data Fondazione San Raffaele del Monte Tabor plan, the company gets the data it needs that are robust enough to satisfy regula- and San Raffaele Telethon Institute for for not only regulatory approval but also tory authorities and payers. For the latter Gene Therapy to also develop programs for other stakeholders to show value to group, it is equally important to add in in metachromatic leukodystrophy and the patient and society. Sven Kili, MD, vice quality-of-life measurements. He also Wiskott-Aldrich syndrome).Strimvelis is president and head of cell and gene thera- said that early dialogue with external expected to cost $665,000, and Kili says py development at GlaxoSmithKline PLC, stakeholders, such as patient organiza- the price is appropriate, not ridiculous agreed that creating value for patients, tions, key opinion leaders and payers, (Kili also cited GlaxoSmithKline’s pledge parents and stakeholders should be at the would help. On the topic of interacting not to price a drug more than 14% of the forefront; what a company charges and with payers early on in development, R&D costs). In working with the Italian gets reimbursement for comes at the end. Applied Genetic Technologies’ Washer Medicines Agency (Strimvelis may only be In a discussion on value challenges, the pointed out that this is especially critical administered in one clinic in Milan), GSK panelists pointed out that cell and gene for those working in rare diseases where has committed to a money-back guaran-

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tee, agreeing to refund the cost if the drug tor therapy on a regular basis, and payers genome. Education is also important for does not work. In terms of not making a have certainty around how much they are outreach to parents of pediatric patients profit initially on Strimvelis, the company paying for these drugs. When cell and on cell and gene therapy. Kili told the story has stated that its goal with the launch is gene therapies come into the mix, they of a father who would not allow his dying to help patients and get experience with are expected to alter the care pathway, child to take gene therapy out of fear, cell and gene therapies. especially if they provide a one-time based on headlines in the media about In marketing a cell-based gene ther- treatment for patients, meaning clinicians gene therapy causing cancer. Examples apy, Kili stressed GlaxoSmithKline’s would no longer need to manage their like this, said Kili, are why parents need to various responsibilities to its patients. disease. White stressed that there will be educated too, since they are in control He said it is critical to find ways to follow be a need to follow patients over time to of their child’s health. up with patients, and that GSK is com- build the evidence base. Andrea Hunt, the In a discussion on the unique capabili- mitted to doing this for at least 15 years. vice president of new product therapeutic ties required to bring a cell or gene therapy Kili also mentioned the importance of area lead gene therapy for neuroscience to market, the consensus was that manu- logistics in ex vivo therapy, saying com- and ophthalmology at Shire PLC, agreed facturing is critical. Audentes’ Patterson, panies in this area need to put together that the care pathway will change, but whose company is investing in manufac- logistical pathways so that the sponsor not all clinicians will adopt cell and gene turing to build out its own capabilities, is always in control of and responsible therapy. In the hemophilia example, she said that because manufacturing in this for those cells on behalf of the clinicians said some patients will still need to take field is still in its infancy, and the science and patients. He believes there needs to factor therapies, and that the old and is complex, it is difficult to manufacture at be complete comfort with who is handling new models will have to co-exist. This will a large scale. Applied Genetic Technolo- the cells throughout the entire process. further complicate value demonstration gies’ Washer agreed that manufacturing For Strimvelis specifically, with a limited to payers, given the uncertainty around is an important consideration, adding half-life of the transduced cells, Kili said future factor consumption for patients that analytics will be critical too, stressing the logistics of patients having to travel to who have received gene therapy. that regulatory agencies care about the Milan for therapy is a key consideration for Educating various stakeholders on cell robustness of the data and characteriza- GlaxoSmithKline. The company is trying to and gene therapy was a key consideration tion standards. make the drug available for patients closer of the commercial panel. Shire’s Hunt, in IV004948 to home, and is looking for hubs where talking about the disruption to the clini- Amanda Micklus 7 more patients can be treated. cal care pathway, said that clinicians will [email protected] The introduction of cell and gene ther- require education for adoption of these apy into disease management has the po- therapies. Clinicians will also need edu- Editor’s note: This article is excerpted tential to disrupt the clinical care pathway. cation to ensure the products are applied from Alliance for Regenerative Medicine Pfizer’s White talked about this in terms appropriately, so that patients will get Conference, October 2016: White Paper, of hemophilia, which is an area where her good results, and the patients themselves published in October 2016 by Informa’s company is developing therapies through will have to understand the therapy and Datamonitor Healthcare, discussing some a deal with Spark Therapeutics Inc. There its shortcomings. GlaxoSmithKline’s Kili of the key highlights from various panel are already effective agents available for pointed out that patients will get nervous, discussions on cell-based immuno-oncol- hemophilia. For example, severe patients based on the fact that what is happening ogy, gene editing, pricing and reimburse- are stable on prophylactic coagulation fac- could be a permanent change to their ment, financing and commercialization.

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Synthetic Biology And 8 The Computerization Of Drug Development By Melanie Senior Synthetic biology offers opportunity across many industries, but the ultimate prize may be health care. The millions of dollars investors have poured into companies developing CAR-T cell therapies and gene editing technologies points to growing confidence in the power of gene manipulation to generate novel, approvable therapeutics, even if for now these are just the early steps toward creating fully synthetic organisms.

❚ Synthetic biology – ❚ Howerver, after a false start ❚ But that’s changing. ❚ Synthetic biology’s pioneer designing and programming in biofuels, confusion over Synthetic biology tools, companies are testing a cells or biological systems definition and a lack of including DNA synthesis variety of models, including to behave a certain way – evidence still of successful and assembly, are evolving toolmaker, service provider offers opportunity across applications, synthetic rapidly, while new therapy and product developer – and biotherapeutics and many biology hasn’t yet wowed classes comprising combinations of all three. other industrial sectors. mainstream biopharma engineered genes and cells Whether or not these firms investors or big pharma. – the precursors to synthetic succeed, an ever-closer biology – are edging closer union between biology and to market. computer-based engineering appears inevitable.

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ver the last three decades, these ever-faster, ever-cheaper DNA word- broad underpinning that lacks a standard digital technologies have processors. “Push-button” DNA is becom- definition or clearly defined scope. It’s transformed lifestyles, ing a reality. Synthetic biology “is the new also because the field has yet to deliver livelihoods and business- IT industry,” according to San Francisco- a compelling application in health care – es, creating new wealth, based futurist and life science technolo- and has already had a false start. industrialO sectors and opportunities. gist Andrew Hessel. A researcher at design A first-generation of biofuel-focused The impact of synthetic biology – which and innovation group Autodesk, he is also synthetic biology plays, including most combines biology with engineering to a co-founder of Pink Army Cooperative, an prominently California-based Amyris design and create new biological systems open-source “digital” biopharma group Inc., promised too much too soon earlier – could be 10 times that of the technology that’s making computer-designed viruses in this decade – a familiar refrain when revolution, and happen in half the time. to combat cancer. new, disruptive technologies appear. (See So presages Randal J. Kirk, billionaire Biotech investors and big pharma are Box, “Biofuels’ Boom And Bust.”) chairman and CEO of Intrexon Corp., one piling dollars and deals into several of “The field took a strong left turn toward of a handful of listed companies seeking synthetic biology’s precursors. These biofuels about 10 years ago. It wasn’t the to drive – and ride – this next revolution. include companies developing and using right time. But in the last four years, it “This [synthetic biology] is the most tools such as CRISPR/Cas9, and those has been coming back,” insists James important, attractive and productive working on chimeric antigen receptor- J. Collins, PhD, Termeer Professor of industrial vector in the history of man.” T (CAR-T) cells, a promising class of Medical Engineering and Science at the Engineering DNA, the codebook for potential cancer therapeutics in which Massachusetts Institute of Technology, life, isn’t new. Recombinant DNA and the the genes of immune system cells are re- and one of the field’s scientific founders. creation of manufactured biologicals were programmed to combat cancer. the bedrock of the biotech sector in the As the genetic engineering approaches The Comeback: Tools, Technologies 1980s and 1990s – what Kirk and others of the last several decades evolve from And Tech Investors refer to as “first generation” biotech. But tweaking single genes to manipulating Much of that comeback involves develop- genetic engineering has evolved beyond and even creating entire gene systems, ing and optimizing synthetic biology’s the insertion, deletion or cloning of one synthetic biology’s full range of potential toolbox, and focusing, at least initially, or two single genes, for instance to create applications is becoming clearer. Start- on applications such as fragrances, synthetic insulin, or a new crop strain. ups such as Twist Bioscience Corp. or chemicals, materials and foods that have 9 New computer-powered tools and tech- Ginkgo Bioworks are successfully devel- lower development and regulatory risks nologies now allow scientists not only to oping and selling the sophisticated syn- than therapeutics, and that command more rapidly and accurately sequence and thesis, design and editing tools necessary higher prices (at lower volumes) than edit DNA, but also to synthesize it from to engineer organisms, making synthetic biofuels. This has created an entirely new scratch using sugars and other chemical biology’s applications look more tracta- start-up ecosystem straddling software, components. This opens up the possibility ble. Others are going after some of those robotics, manufacturing and biotech – of creating and assembling novel genetic applications, with programs spanning all and pulled in a wide range of investors, parts and circuits, and, ultimately, design- or some of the food, energy, environment, including tech investors. ing and programming genes and even agricultural, cosmetics and health care Cambridge, MA-based Gen9 Inc. and entire organisms to do useful things, like sectors. There are programs investigat- California-based Twist Bioscience are produce biofuels, excrete helpful drugs or ing how to improve drug production and among those focused on DNA synthesis mop up harmful metabolites. manufacturing. Those using synthetic and other tools and libraries to support biology approaches to find novel thera- researchers. Twist’s vision is to create a The New IT Industry? peutics are trying to reduce risk as much synthetic DNA online shop and gene-de- The programming code may be written in as possible, for instance by working with sign platform, promising customers rap- DNA, the language of living things, but it’s harmless bacterial organisms in the gut idly delivered, sequence-perfect genes at strung together using the language of elec- or extrapolating, step-wise, from existing competitive prices; it recently signed up trical engineering and computer science: gene-engineering applications. Israel-based Genome Compiler Corp., logic gates, toggle switches and feedback which makes software specifically for loops. The computing analogy doesn’t False Start With Biofuels synthetic biologists to manipulate and stop there. New gene-editing techniques It’s still very early days for this emerg- design-test DNA. Gen9’s offering is simi- such as CRISPR/Cas9 (clustered regularly ing field. Synthetic biology itself isn’t lar, complete with online DNA design and interspaced short palindromic repeats) a venture capitalist hotspot; few bio- an ordering portal. Both Twist and Gen9 are sometimes referred to as the Microsoft pharma firms are talking about it and in turn have deals to supply hundreds Word of gene editing – because they’re even fewer executives understand what of millions of DNA base pairs to Ginkgo easy to use and relatively cheap. DNA it is, according to Oliver Fetzer, PhD, Bioworks, a darling of Boston’s technol- printers – machines that can rapidly make CEO of Synthetic Genomics Inc. That’s ogy start-up scene. Ginkgo – raised in accurate copies of certain pre-defined in part because synthetic biology isn’t a Silicon Valley’s software accelerator Y stretches of DNA – are emerging alongside single technology or therapy area, it’s a Combinator – stitches together the DNA

the Defense Advanced Research Projects Agency (DARPA), whose mission is to ❚ Biofuels’ Boom And Bust invest in radical, disruptive innovations. Scientists at Amyris Inc. claimed they could engineer yeast to churn Diverse Applications Spread Risk out millions of liters of a diesel-like fuel, farnesene, from sugarcane, sending the Nasdaq-listed company’s stock price and expectations Investors also like the diverse range of sky-high in the year after its 2010 IPO. But the technology wasn’t applications for synthetic biology. The ready for industrial scale-up, and even if it were, tumbling oil prices prospect of creating or reprogramming at the time meant production prices would have had to be very low. cells and organisms to produce better Amyris’ fall from grace hit the field hard, instilling deep investor materials, more effective medicines, fat- scepticism. “It gave people a bad feeling about the space from an ter fish, cleaner fuels or non-browning investment perspective,” acknowledges Intrexon’s Kirk. But, he apples, spells opportunities across the adds, the failure “was not for lack of technical achievement.” industrial spectrum. That lowers the risk inherent in any individual application The company did bioengineer yeast to produce artemisinic acid, while still allowing the possibility of an effective cure for malaria that hitherto could be extracted only first-mover rewards. from a single type of Chinese wormwood plant. This didn’t turn into Intrexon, with divisions spanning in- a runaway success either, though, in commercial or humanitarian dustrial products, animal sciences and terms: Sanofi started producing and selling the drug at cost, but crit- agricultural biotech as well as human ics claimed millions of farmers’ livelihoods were disrupted as prices therapeutics and immunology, captures for the sweet wormwood plant fell. A subsequent glut of natural synthetic biology’s diverse potential artemisinin in turn meant for Sanofi it wasn’t worth operating the under a single roof. And its enticing manufacturing facility, which it sold in early 2016. story – with the tagline “powering an On a brighter note, in August 2016, Amyris, along with energy industrial revolution with better DNA” – groups Total and Renmatix, won a three-year deal worth several has generated interest and controversy. million dollars with the US Department of Energy to use wood to For now, the $3 billion market capitaliza- make farnesene. tion of this 18-year-old company more 10 accurately reflects its bold ambition than its revenues ($95.9 million in the first half of 2016). Short sellers hit the stock early in 2016 following a damning research report. Critics are right that the group’s in-house toolbox – including, supplied by its partners to manufacture and Draper Fisher Jurvetson support for instance, gene transcription control custom-made yeast and other microbes Twist and Gen9, respectively, while system RheoSwitch and UltraVector, a that it has designed and programmed to California-based Zymergen Inc., which DNA construction and assembly platform make products such as rose-scented oil is using machine learning to guide bac- – hasn’t overwhelmed the market or (yet) or beverage sweeteners. The call from teria and fungi to perform industrial generated a product. But Intrexon’s strat- CEO Jason Kelly, PhD, is for society to processes more efficiently, has raised egy of “exclusive channel collaborations” “stop manufacturing everything” and money from Alphabet Inc. executive Eric granting partners license to use its tools instead “grow everything. Biology is a Schmidt, PhD, and Obvious Ventures, to develop and commercialize products uniquely powerful technology in manu- another VC looking to back disruptive in their particular sector has exposed facturing,” he says, as quoted in Forbes. technology-based solutions to weighty those technologies widely. And the com- Gingko’s customers include French problems. On October 11, Japanese pany has assembled a range of further fragrance group Robertet and Japanese telecom and Internet conglomerate technologies, via acquisition, which food and pharmaceuticals maker Ajino- SoftBank led Zymergen’s $130 million have between them generated revenues, moto Co. Inc. Series B round. partnerships and attention. (See sidebar, Technology investors like the digiti- Diversified industrial partners like “Intrexon Buys Tools, Wins Partners.”) zation and robotization aspects of syn- The Kraft Group as well as laboratory It’s not clear with which, if any, of these thetic biology – it makes it familiar, yet firmAgilent Technologies Inc. also have areas Intrexon will achieve the “genuine it also offers potential for cost-savings stakes in this most recent generation of industrial leadership” that billionaire and efficiency across multiple sectors. synthetic biology companies, whereas founder Kirk is seeking. “We’re not trying Ginkgo raised a fresh $100 million C large laboratory services groups such as … to be at the forefront of technologi- round in June 2016 from Y Combinator’s Thermo Fisher Scientific Inc. offer their cal innovation in synthetic biology. Our continuity fund and a handful of other own suites of synthetic biology tools. The focus is on the industrialization of these tech VCs, bringing its total fundraising US government, too, has been ramping technologies,” he says – for instance, to $154 million. ARCH Venture Partners up its investment in synthetic biology via making a CAR-T therapy that could be

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Innovation ❚

“practiced at any general hospital by an average oncologist,” rather than for select, well-insured patients at a small number of ❚ Intrexon Buys Tools, Wins Partners institutions. To help achieve its big vision, Intrexon Corp.’s own tools might not have become industry stan- Intrexon brought in big pharma veterans dards. But the company’s half a dozen acquisitions since mid-2014 Geno Germano and Fred Hassan to help. have given it a shot at solving some high-profile challenges, and Germano, former head of Pfizer Inc.’s have attracted mainstream pharmaceutical partners. global innovative pharma business, was Cattle breeding and genetics platform Trans Ova, acquired in mid- appointed president in May 2016, and is 2014, now accounts for about half of Intrexon’s revenues. Buying due to take over as CEO; Hassan, who UK-based Oxitec Ltd. in August 2015 pushed Intrexon into the served for six years as CEO of Schering- spotlight with a potential solution to the Zika virus outbreak: Oxitec Plough Corp., joined the board of direc- came with a genetically modified male mosquito that may help slow tors in June 2016. And Intrexon’s tech- the virus’ spread. (The so-called Friendly Aedes male mates with nologies got another set of shots-for-glory disease-carrying Aedes aegypti females and generates offspring that in January 2016 with the closing of the are genetically programmed to die before reaching adulthood and $245 million Harvest Intrexon Enterprise reproduction. The approach is currently being tested in some Brazil- Fund – dedicated exclusively to start-ups ian neighborhoods.) Intrexon also bought into the frenzy around chi- that use Intrexon’s platforms. The fund’s meric antigen receptor T-cells (CAR-T cells) as novel cancer therapies. four customers to date span agriculture, With long-standing collaborator Ziopharm Oncology Inc., it licensed chemicals and health care. a non-viral gene transfer system known as “Sleeping Beauty” from First-generation synthetic biology University of Texas’ MD Anderson Cancer Center that may reduce plays such as Intrexon and its private the safety concerns associated with other more advanced CAR-T counterpart Synthetic Genomics have cell approaches. Weeks later, Merck Serono SA (a division of Merck survived and learned from the field’s early KGAA) paid $115 million up front to Intrexon and Ziopharm to use setbacks. Co-founded in 2005 as a biofuels Sleeping Beauty, plus other tools including Intrexon’s gene switch play by genomics pioneer J. Craig Venter, system RheoSwitch (which controls gene transcription by regulat- PhD, who remains co-chief scientist and ing the timing and dose of an oral activator ligand) to develop new executive chairman, Synthetic Genom- cancer therapies. Merck Serono, Intrexon’s first large partner, may 11 ics is focused on generating revenues, pay a further $826 million in milestones. (Also see “Merck Serono while keeping a portfolio of projects go- and Intrexon in CAR-T deal” – Scrip, March 30, 2015.) ing alongside, with varying risk-reward profiles. The company’s initial plan to In December 2015, Janssen Pharmaceutica NV (part of Johnson & engineer algae to turn sunlight into oil Johnson) entered a research collaboration with Intrexon to discover hasn’t yet come to fruition. But “it laid the therapies for type 2 diabetes and metabolic disorders using the Ac- foundation for building a lot of the tools toBiotics platform – acquired via Intrexon’s purchase of Belgium’s that we now have, which have become ActoGeniX NV in early 2015. The technology involves genetically best-in-class,” claims CEO Fetzer. Today, engineering a food-grade microbe, Lactococcus lactis, to produce the company’s SGI-DNA subsidiary gener- biopharmaceuticals. These bacterial “factories” can be ingested ates revenues from selling DNA printers, orally, but produce their medicine locally, in the gastrointestinal synthesis tools, reagents, bioinformatics tract, in theory allowing easy, oral administration and targeted de- platforms and software, while the mother- livery of medicines typically given by injection. Two other ActoBiotics ship pursues ambitions across sustainable compounds are in the clinic, for oral mucositis and IBD. Meanwhile, energy, food and vaccine production, as a third variety of non-browning apple from Canada’s Okanagan Spe- well as development of transplantation- cialty Fruits Inc., acquired in April 2015, is edging toward approval. ready pig organs. Amyris, too, has survived the public markets (albeit with a much-reduced market cap) to break out beyond biofuels. It is now generating payments from collaborators ranging from cosmetics to biotherapeutics.

Stepping Toward The Crown Jewels In Health Care Health care is where many see the ultimate prize of synthetic biology, though. “The real crown jewels will be in the

churn them up. “We’re in a gray zone between gene editing and synthetic en- ❚ CAR-T, CRISPR/Cas9 Stepping Stones gineering,” opines Todd Peterson, PhD, Chimeric antigen- (CAR-) T-cell therapies involve genetically engi- chief technology officer at Synthetic neering patients’ white blood cells to recognize and combat certain Genomics. CAR-T “typically involves a cancer cells. Several have shown stunning results in early-stage single gene,” he says; the more genes trials in some blood cancers, with a handful of candidates now in that are involved, and the more sophis- more advanced clinical studies. Frontrunners include the biotechs ticated the manipulation, the closer it Juno Therapeutics Inc. (in partnership with Celgene Corp.) and Kite gets to what many consider to be “full- Pharma Inc., and Novartis AG, which expects to file its acute lym- blown” synthetic biology. Tom Ellis, phoblastic leukemia (ALL) candidate in 2017. PhD, senior lecturer in synthetic biology at Imperial College London, describes CRISPR/Cas9 uses a bacterial protein, Cas9, plus a specific guide the “subtle but real” boundary between sequence of RNA, to cut and paste genetic code into or out of the gene engineering and synthetic biology DNA helix. The technique, which is relatively cheap and accessible as the point beyond which the gene (though not without limitations) has captured headlines and many programming sequence and effects can millions of investment dollars, via the likes of CRISPR Therapeutics no longer be written out and understood AG, Intellia Therapeutics Inc., Horizon Discovery Group PLC and on a Post-it note. “If you are working Caribou Biosciences Inc. on pathways with multiple interacting genes and it gets to the point where you need a computer to understand how it might all work together,” then it’s synthetic biology, he says.

From A Few Genes, To Many Genes health care space,” predicts Synthetic Food and Drug Administration in March If the “simpler” approaches like CAR-T Genomics’ Fetzer. His position is backed 2016 reminded sponsors of the “serious cell therapies don’t make it past FDA, 12 up by the extraordinary levels of interest safety concerns” raised by the approach in though, there’s little chance the more in some of synthetic biology’s component announcing a series of safety monitoring complex ones will. That’s why most tools and technologies. Investors have measures. In July, FDA put Juno’s Phase companies using synthetic biology tools poured hundreds of millions of dollars II ALL trial on hold due to patient deaths, to develop novel therapeutics are start- into companies developing CAR-T cell though it was resumed shortly after (Also ing with fewer genes and focusing on therapies, and, on a smaller scale, into see “Juno ROCKETs On Fast Clinical Hold well-defined areas of high unmet need, groups using CRISPR/Cas9 gene-editing Resolution” – Scrip, July 12, 2016.) where a higher-risk profile is more likely techniques. (See Box, “CAR-T and CRIS- CAR-T cell therapies also present to be acceptable. These programs build PR/Cas9 Stepping Stones.”) significant manufacturing and scale-up on the genetic engineering underway in This points to growing confidence challenges, given that they are “autolo- biopharma for decades, but use better in the power of gene-manipulation to gous” – demanding an elaborate, costly tools and programming to control gene generate novel, approvable therapeutics process of extracting patients’ T cells, expression. “I don’t see the layers of – even if for now these are just the early re-engineering them and re-inserting logic, sense-and-responses, full circuits steps toward creating fully synthetic them. France’s Cellectis SA, in collabora- happening in the first couple of versions” organisms. “The whole industry is crazy tion with Pfizer, claims to be developing of synthetic biology, Peterson concurs. about CRISPR/Cas9,” effuses Fetzer. “But a “universal” CAR-T cell therapy using Instead, developers will start using well- that’s just a tool, a more precise way of donor cells, which could be used by any characterized processes, he continues, in editing. We go well beyond that.” patient. Intrexon and MD Anderson areas that offer the highest benefits, due Even these stepping stones toward Cancer Center say their approach may to a lack of alternative solutions. “It’s not synthetic biology have yet to overcome offer a better safety profile and allow like this is going to be the Wild West,” regulatory, commercial and ethical off-the-shelf therapies that don’t have to insists Fetzer. hurdles, though. CRISPR/Cas 9 has be personalized to each patient (Also see The self-professed synthetic biology provoked strong reactions to the idea of “Kite And Juno Threatened By Cellectis’ pioneers are nevertheless pushing the scientists manipulating DNA to create new Off-The-Shelf CAR-T Success” –Scrip , boundaries of current medical practice. organisms – including, at the extreme, November 30, 2015.) Synthetic Genomics is working with “designer babies.” Meanwhile, although As the most advanced CAR-T cell United Therapeutics Corp. subsidiary both Juno Therapeutics Inc. and Kite programs near regulatory submission, Lung Biotechnology Inc. to develop Pharma Inc. enjoy (like Intrexon) market they’ll either help pave the regula- transplantation-ready pig organs for caps of over $3 billion, no CAR-T cell ap- tory and ethical pathways toward more patients with lung and kidney disease. proach has yet been approved. The US genetically engineered therapies – or They’re using DNA design, synthesis

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Innovation ❚ and editing tools to develop pig cells MIT’s Collins) is applying synthetic with modified genomes that ultimately biology concepts to engineer probiot- generate organs that aren’t rejected by ics – helpful gut bacteria – to perform human recipients. That’s a step beyond specified therapeutic functions. The – but not an unimaginable one – replac- Until there’s clear company’s “synthetic biotics” contain ing dysfunctional human mitral valves control elements, such as logic gates with pig valves, as already happens. The evidence of this and sensory feedback mechanisms, that work involves knocking out pig genes trigger certain outcomes. Those outcomes that express inflammatory antigens, for problem-solving, might be producing a specific protein, or instance, and substituting some protein mopping up harmful metabolites in an domains that are recognized by the though, most health energy-efficient way. Its most advanced human immune system. In all, “a sub- programs, in preclinical trials, are for the stantial number” of genes are modified, care investors and treatment of urea cycle disorder (UCD) the partners say, at an “unprecedented” and phenylketonuria (PKD), both rare, scale and efficiency. Surgically swapping many big pharmas are inborn errors of metabolism character- out protein domains is very sophisticated ized by the unwanted accumulation of engineering, but it doesn’t involve novel, toxic substances. fully synthetic organisms or even the full- taking a wait-and-see “We are engineering microbes,” spells blown logic-driven circuitry of synthetic out CEO Jose-Carlos Gutierrez-Ramos, biology. Ellis and others might argue it attitude to synthetic PhD, previously group SVP and global isn’t synthetic biology. But it’s going in head of biotherapeutics research at that direction. “There is a dire unmet biology, rather like Pfizer. He distinguishes Synlogic’s ap- need for organs, and we’re following proach from traditional genetic engineer- a well-characterized process, starting they have done with ing, which, he argues, is mostly about with those [people] who have the fewest DNA construction and alterations based choices, and thus the highest benefit other novel on existing genetic circuits. Synlogic’s from receiving an organ,” notes Fetzer. researchers (a third of whom are meta- Synthetic Genomics is supported by ul- approaches, such as bolic or electrical engineers) are instead 13 tra-high-net-worth individuals and part- designing and building new circuits, nership money – United Therapeutics from the bottom up. They study the often invested $100 million in equity since the gene therapy during varied ways in which bacteria carry out partners’ initial deal in 2014 (expanded certain processes in nature, and, inspired to include kidney diseases in 2015). The the 1990s. by these, attempt to design the most company, whose last VC financing was energy-efficient, stable and physiological in 2006, has outgrown venture capital. genetic circuit for a particular activity. “We’re not just copying” circuits found Building Better Bacteria in nature, “but re-factoring them,” sums Three-year-old Synlogic Inc. attracted up Gutierrez-Ramos, using the “design- health care VCs first and foremost as a test-build” process and mind-set familiar microbiome company, rather than a syn- to engineers. thetic biology play (despite the name). The programs involve engineering “We weren’t looking to invest in synthetic about a dozen genes – not complex biology; we were more interested in the enough to require reams of computa- microbiome,” declares Chau Khuong, pri- tional processing power, but neverthe- vate equity partner at OrbiMed Advisors less controlling the principal activity of LLC, which led Synlogic’s $40 million entire organisms. “Synthetic biology is Series B round in February 2016.(Also broader” than just using gene-editing see “Mining The Microbiome: Are Gut tools, elaborates Ankit Mahadevia, Syn- Microbes The Next Big Source Of Drugs?” logic co-founder, previously a venture – In Vivo, July, 2015.) As scientists learn partner at Atlas Venture and now CEO more about the role of the microbiome of anti-infectives-focused Spero Thera- – the large community of bacteria and peutics LLC. “You take all the tools that organisms residing in the human gut – in biologics engineering has to offer and, health and disease, it has generated sig- like an engineer, you think about the nificant investor interest as a rich source organism systematically, with an end of potential therapeutic opportunities. goal in mind.” Synlogic (whose co-founders include Synlogic is minimizing the risks as far

as possible. It’s using a well-known gut to Salmonella’s immunostimulatory gene) only in response to specific, in- bacterium, Escherichia coli Nissle, known characteristics, they are phagocytosed – tended targets. to be harmless and non-colonizing engulfed – by antigen-presenting cells, Meanwhile, several commercial proj- and which has had plenty of patient which then express the antigen genes ects are looking at how the discipline exposure, and occurs naturally in the carried by the vaccine. The approach al- may improve and/or accelerate drug pro- contained environment of the gut micro- lows vaccines to be made from inside the duction and manufacturing. Synthetic biome. It’s choosing applications that are body’s own immune cells, theoretically Genomics is working with CSL Ltd.’s focused, characterized by an identifiable avoiding some of the side effects associ- Seqirus on developing synthetic influ- dysfunction, where clinical read-outs ated with traditional, injectable vaccines. enza vaccine seeds, which would allow clearly correlate with the enzymatic It is also designed to allow a standardized more rapid production of appropriate activity that the modified bacteria are production process regardless of the an- vaccine once an outbreak strain is iden- carrying out – and where there’s unmet tigen used, the company says. tified. In a recently struck partnership need. The pharmacology of Synlogic’s with Biogen Inc., Amyris is engineer- modified organisms is predictable and Validating Synthetic Biology’s ing microbes to develop alternatives to quantifiable, differentiating it from less- Role In Health Care mammalian cell lines for the production engineered efforts in the microbiome To maintain the upward momentum of of recombinant proteins – a technology space, such as Seres Therapeutics Inc.’s pharma and investor interest, synthetic that could shake up production within cocktail of bacterial spores, which recent- biology needs to reach some milestones. the multibillion-dollar biologics mar- ly failed to reduce the risk for Clostridium “Showing some clinical data is going ket. (Synthetic Genomics has a similar difficile infection in a Phase II trial. to be where the rubber hits the road,” program.) In another recent health care The potential of Synlogic’s approach acknowledges OrbiMed’s Khuong, deal, with Johnson & Johnson’s Janssen beyond rare diseases to more common adding that “more clarity around the Biotech Inc., Amyris will create a library conditions such as inflammatory bowel regulatory path and the acceptability of of compounds, based on natural diversity disease attracted its first big pharma our approach would be validating” for but with some structural tweaks, to test partner, AbbVie Inc., in February 2016. the entire modality of using engineered against the pharma’s chosen target. (Also see “Synlogic Links Up With AbbVie bacteria – and for the broader field. For Intrexon’s Kirk, most of these ap- For IBD Microbiome Therapies” – Scrip, Synlogic’s priority now is moving its own plications barely scratch the surface of 14 February 10, 2016.) The multi-year R&D programs into the clinic – after a pre-IND synthetic biology’s potential to trans- collaboration sees Synlogic discovering meeting with FDA in September 2016, it form the biopharmaceutical industry. “If and optimizing synthetic biotics-based expects to file an IND by year-end for the [tweaking] two genes represented a shift candidates for IBD-related conditions urea cycle program, and to dose humans in the therapeutics industry of more than such as Crohn’s disease and ulcerative in early 2017. 100% in revenue growth,” he surmises, colitis, and AbbVie handling clinical As the most advanced therapeutics referring to recombinant proteins, “then development and regulatory filings. programs involving synthetic biology what happens when you add a third, reach inflection points, other applica- fourth, fifth or fourteenth gene manipu- Synthetic Drug Delivery Vehicles tions offer relatively low-risk means of lation? There is tremendous potential to Synlogic isn’t the only company using introducing synthetic biology concepts solve higher-value problems.” synthetic biology to re-purpose gut bacte- into a highly regulated space, bringing ria. Intrexon’s ActoGeniX NV subsidiary some validation of the approach. The Hurdles: is using lactic acid bacteria, including as Academic researchers are uncover- Biology, Ethics, Mind-Sets a vehicle for in situ delivery of therapeutic ing potential near-term applications Few investors are as enthusiastic, yet. proteins in the gut. This approach, which of synthetic biology in cheap, rapidly “They’re excited, but they recognize involves programming the bacteria to deployable diagnostics. Collins’ labora- it’s still early,” admits MIT’s Collins. express the relevant therapeutic once in tory at MIT has developed, with others, Even though the tools are hugely more the gut, could allow large-molecule drugs paper-based tests for Ebola and Zika advanced than just a few years ago, to be administered orally. (Synthetic virus that can diagnose the disease in they still aren’t very good, in his view. Biologics Inc., whose lead programs are a few hours, and be stored and used in Furthermore, “we don’t know as much conventional microbiome-focused ef- a community setting. Synthetic gene biology as we assumed … nor enough to forts, has a deal with Intrexon to develop networks, embedded on pieces of pa- engineer it with the efficiency and scale therapies for PKU too.) per, are programmed to detect a certain that I think we’d all like to,” Collins Others such as UK-based Prokarium RNA sequence in the relevant virus, continues. Nor do we know enough to be Ltd. are re-programming bacteria to de- and to cause the paper to change color sure of the longer-term consequences for velop orally available vaccines. The vac- when they do. One important engineer- science and society of creating program- cines are expressed in attenuated strains ing component of these tests is the mable organisms using easily accessible of Salmonella enterica, shown to be safe RNA-based toe-hold switch, a genetic building blocks. in trials. These bacteria pass through the regulator that can be programmed very Biology, after all, is much more nu- lining of the small intestine and, thanks precisely to react (thus “switch on” a anced than a series of logic switches.

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Innovation ❚

companies exploiting synthetic biology. Bio-foundries have been established at ❚ Bio-Foundries To Accelerate Synthetic Biology’s institutions including MIT-Broad and Industrial-Scale Application Imperial College London in the UK to help advance automation methods and build “Bio-foundries” – alluding to the metal-casting and mold-making assembly lines for mass-generation of factories of the industrial revolution – are springing up as incubators biological parts. (See Box, “Bio-Foundries for synthetic biology’s scale-up. To Accelerate Synthetic Biology’s Industri- MIT-Broad Foundry, created by MIT biological engineering profes- al-Scale Application.”) sor Christopher Voigt, PhD, and Broad Technology Labs’ Robert Meanwhile, Kirk claims that executives Nicol, PhD, enables rapid design, testing and fabrication of genetic across various industry sectors, from bat- sequences for assembly. It’s part of a four-year collaboration with teries to waste management, are coming Novartis to predict the structure of compounds produced by the to understand that engineering biology microbiome, and has funding from DARPA. may help solve some of their challenges. SynbiCITE was set up in 2013 at Imperial College London, as a “I have witnessed a complete change of UK-funded center for the commercialization of synthetic biology; mind-set,” he asserts. partners include GlaxoSmithKline PLC, Microsoft Corp. and Shell Until there’s clear evidence of this UK as well as multiple academic institutes. problem-solving, though, most health care investors and many big pharmas National University of Singapore’s SynCTI (synthetic biology for are taking a wait-and-see attitude to clinical and technological innovation) plays a similar role. synthetic biology, rather like they have done with other novel approaches, such as gene therapy during the 1990s. “It will take 10 years for big pharma to get really interested in synthetic biology,” predicts Synlogic’s Gutierrez-Ramos. Other investors will likely get involved sooner; the timescales for synthetic biology’s rise 15 Cutting up and re-assembling something or how many standards are required. will vary across sectors. Cosmetics, food as information-rich as DNA can lead to Synthetic biology, like its gene- and agriculture are already being trans- unforeseen results, even with the best engineering forebears, raises ethical formed; toolkit companies are benefiting. design engineering. Connecting two questions and demands some ground- Scientific, regulatory, commercial and pieces of DNA creates a new sequence rules around what’s acceptable and ethical hurdles to synthetic biology’s at the join, with potentially unwanted what’s not (just like restrictions on using widespread application will remain even effects. Biology needs to become far CRISPR/Cas9 technology on germ-line a decade from now. That’s why pioneer more reproducible and predictable than cells). These require societal debate. companies are going step by step, high- it is currently to be turned into new in- Synthetic biology also raises biosecurity lighting the potential of re-programming dustrial processes. concerns – what if terrorist groups start DNA without diving directly into the com- Standards need to be created for the to print out and propagate engineered plexity and regulatory black hole that parts and assembly methods used in pathogens? – though these scenarios can will accompany fully computer-created synthetic biology across the world’s labo- be over-hyped in media reports; despite organisms. But the computerization of ratories. “If you want to be able to build significant advances, major practical, biology, just like other fields, appears on others’ work, it would make sense infrastructural and knowledge hurdles inevitable. For proponents such as Syn- for genetic constructs that you build to remain to the engineering of biology. thetic Genomics’ Peterson, that’s the vi- follow similar standards and measure- Establishing intellectual property sion. “Synthetic biology should be about ments,” says Imperial College’s Ellis. The groundwork will be crucial to the field’s going to a computer, typing in what you US National Institute of Standards and commercial attractiveness. Synlogic has want, printing out the DNA and creating Technology (NIST)’s Synthetic Biology had seven patents granted out of 165 filed; it from the bottom up. That’s where we’re Standards Consortium is trying to create these cover both the component parts going. We’re just not there yet.” those standards, for synthetic biology (e.g., metabolic circuits, kill switches and IV004935 parts, and the international Synthetic other individual control elements within Comments: Biology Open Language (SBOL) effort those circuits) and the organism-based Email the editor: [email protected] is attempting to do the same for the vo- drugs in their entirety. It’s too early, and cabulary used to label these parts. These the field remains too small, for these pat- efforts have much farther to go, but that’s ents to be truly tested, however. appropriate: the field isn’t necessarily Short term, there’s likely to be an large or advanced enough to know which increase of both tools and clinical-stage

Fujifilm has successfully transformed its business strategy by expanding away from traditional photographic film and toward new priority business fields – significantly in regenerative medicine. Identifying health care as a key growth area, Fujifilm targets the role of being a comprehensive provider in the fields of prevention, diagnosis and treatment. Toshikazu Ban

16 Fujifilm

BY Ashley Yeo uch has happened at Fujifilm Corp. in recent years, as it has actively built on a promising early start in regenerative medicine, added to its asset Japanese group Fujifilm took the bold base and begun exploiting its growing product development expertise decision less than a decade ago to in the pharmaceutical industry. refocus on the health care and life Indeed, the pace of progress at the Minato-ku, Tokyo group has sciences business, following rapid Mpicked up markedly even since the close of its fiscal year 2015–16 (to March 31, 2016), change in the market structure and including the upgrading of its Regenerative Medicine Business Development Office into dynamics of its legacy business in a “Regenerative Medicine Business Division.” That happened at the end of June 2016. photographic film. In addition, of late: Fujifilm has tied the knot more firmly with Australian partner Cynata Therapeutics Inc., in which Fujifilm is to own slightly over 10% of the business, It set about exploiting its internal following a third-party share issue by end of 2016, once the final agreement is executed; expertise, including its collagen Fujifilm Diosynth Biotechnologies UK Ltd. (see below) has set up a long-term contract manufacturing capabilities, homed manufacturing bio-collaboration with Merck & Co. Inc./Merck Sharp & Dohme Ltd., for in on subsidiary Toyama Chemicals’ the supply of APIs to its customers; and Fujifilm has participated in a cooperative study stake in Japan Tissue Engineering (via subsidiary Cellular Dynamics International Inc. – CDI) with the US National Eye (J-TEC) and later acquired US iPS cell manufacturing company Cellular Institute. In addition, Roche is collaborating with CDI to use its induced pluripotent Dynamics International. stem cell (iPSC)-derived iCell products in early-stage drug discovery. In late September, Fujifilm added to its regenerative medicine capacity by setting up a Since then, the strategy of focusing new venture, Opsis Therapeutics, which will focus on discovering and developing novel on regenerative medicine has further medicines to treat retinal diseases. This venture is a partnership with David Gamm, MD, picked up pace, and this year alone PhD, the pioneer of iPSC-derived retinal cell differentiation and transplantation. Fujifilm has set up a firm deal with And in mid-October, the group agreed to invest in the China Resources Pharmaceutical Australia’s Cynata, and in late Group, the second-largest Chinese pharmaceutical manufacturer in terms of revenue summer announced a new venture (2015), via an HK$820m ($105.7m) equity subscription during CRPG’s IPO in Hong Kong. to develop next-generation cell Fujifilm says it will use the holding as a means of further exploring Chinese regenerative therapeutic programs for eye care, medicine, medical device and other health care opportunities in China. Opsis Therapeutics. The pace of health care developments for the Japanese group has indeed been fast. In Vivo spoke to senior Fujifilm executive Toshikazu Ban, as the group was closing out

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com REGENERATIVE Medicine ❚

its financial year 2015–16, about the ratio- at Takeda, on the R&D side. While there, sector, sees itself as a player in the evolv- nale behind the business reinvention, the he was promoted to corporate functions ing industry. new product focus, strategies and aims, in business development and product He explained that 20 or more years ago, and Fujifilm’s business outlook. licensing. Ban moved to Fujifilm in 2013. a typical pharmaceutical pipeline would At that point, Ban, who was general During his tenure at Takeda Pharma- have been all small molecules. But now, manager of Fujifilm’s Regenerative Medi- ceutical Co. Ltd., the group acquired more than half of the top-10 selling drugs cine Business Development Office, was Millennium Pharmaceuticals Ltd. (in globally are antibody drugs, and many looking forward keenly to several more 2008), which had been established in companies have shifted from small mol- key news-flow events, including the re- 1993 as a genomics company to apply ecules to antibodies, such as proteins. lease of Phase II efficacy and safety clini- molecular biology technology to the dis- This was a trend that Toda and Fujifilm cal trial results of its novel drug T-817MA, covery and development of innovative had been tracking and an area where the which is expected to protect nerves in new therapies in a broad spectrum of group saw it could compete effectively. Alzheimer’s patients and to identify bio- diseases. Also in 2008, Takeda’s chair- So it set about expanding its core key markers by using iPS cells. man decided to buy imaging company technologies based around its film busi- Ban has since been given additional Nycomed Danmark APS. ness – a bundle of expertise that combines responsibilities at the group, having Around that time, Ban met executives chemical synthesis, nanotechnology, been appointed corporate VP and general at Fujifilm (including Yuzo Toda, now engineering technology, imaging, qual- manager of the new Fujifilm Regenerative Fujifilm’s senior EVP and chief technical ity controls and collagen technology – to Medicine Business Division. It is a posting officer) to discuss potential health care develop regenerative medicine material. that underlines Fujifilm’s conviction that business strategies. Toda, then head of the The group had considered that colla- the path it has chosen to reinvent itself is life science laboratory at Fujifilm, and also gen (the main element of film) could be the right one. a pioneer of the group’s cosmetics busi- developed in various formulations using In a book published in 2014, Fujifilm’s ness, inspired the acquisitions of Toyama RCP – recombinant peptide – as a scaf- chairman and CEO, Shigetaka Komori, Chemical Co. Ltd. in 2008 and the CMO folding material. “The concept of tissue documented the steep decline and almost business Diosynth RTP LLC in February engineering requires both the cell and the disappearance of the company’s core pho- 2011 (fiscal 2010), bought from Merck & scaffold, and collagen materials are good tographic film market, and the subsequent Co. That deal additionally included MSD for the scaffold for use in cell therapy, so decision-making path that led it to commit Biologics (UK) Ltd., and thus all assets of that’s why we are now pursuing regenera- 17 to becoming a comprehensive health care the Merck BioManufacturing Network. tive medicine,” said Ban. company. Its established medical imaging Other notable Fujifilm biopharma proj- RCPs are non-animal based (xenofree), capabilities (in vivo, ex vivo and IVD) have in ects included the establishment of a joint have high cellular adhesiveness, have many ways provided the ideal springboard. venture for biosimilars with biochemical high safety and biocompatibility, and Innovating Out of Crisis (Stonebridge company Kyowa Hakko Kirin Co. Ltd. in are biodegradable and bioabsorbable. Press) describes Fujifilm’s chosen route December of 2010. And in December 2014, Fujifilm’s brand is Cellnest (in solution to business reinvention and the buildup the renamed Fujifilm Diosynth Biotech- and lyophilizate). to its full-scale entry into pharmaceuticals nologies USA Inc. acquired another CMO in 2008 via its first acquisition in the field business, Kalon Biotherapeutics LLC (Col- Unearthing Tissue (see box, “A CEO’s View On Innovating Out lege Station, TX), which added viral and Engineering Jewels Of Crisis”), which provided for Fujifilm’s cell culture vaccine expertise to Fujifilm’s With Toyama Chemical came a 10% hold- first joint research on new pharmaceu- competencies in microbial, mammalian ing in Japan Tissue Engineering Co. Ltd. ticals. This resulted in the blood/bone and insect cell process development; ana- (J-TEC), a company founded in 1999 in marrow cancer drug FF-10501, for use in lytics; and commercial production. (Also Aichi, Japan, that has now grown to over refractory myelodysplastic syndromes see “Kalon Stake Gives Fujifilm Ebola Vac- 228 staff (in 2015). “We looked at it and (MDS) and acute myeloid leukemia (AML). cine Capacity” – Scrip, October 27, 2014.) saw a great opportunity – so two years Fujifilm’s use of its unique and original ago, we increased our holding to 45% and nanotechnologies in drug development Taking Advantage Of then to 50.1%,” said Ban. J-TEC became a encouraged Komori to forecast in his book Science Strengths consolidated Fujifilm subsidiary in De- that “a photo film company might just Announcing the Kalon deal in 2014, Fuji- cember 2014. become a prime innovator in medicine.” film’s then president and chief operating Ban explained that J-TEC focuses on officer, Shigehiro Nakajima, (Kenji Sukeno a patient-by-patient somatic cell/stem Building The Business – assumed these roles in June 2016) stressed cell therapy. J-TEC’s first product was From The Ground Up that health care “and above all the phar- autologous cultured epidermis, which Ban is part of the team that has helped maceutical business” has become one of was approved in Japan in 2007 and has chart and fine-tune Fujifilm’s progress so the Japanese group’s focal areas. A year been reimbursed since 2009. The second far in regenerative medicine and pharma- and a half later, sitting in In Vivo’s Lon- was autologous cultivated cartilage for ceuticals. Ban, also a corporate VP of the don offices, Ban described how Fujifilm, traumatic cartilage defects and OCD (os- group, started his pharma industry career albeit a relatively recent entrant to the teochondritis dissecans) for knees. It was

approved in Japan in 2012 and reimbursed founder, in 2004, of the bioventure spin- in 2013. out Cellular Dynamics. Thompson focused The J-TEC process involves incubating originally on embryonic stem cells (ESC), a culture for three weeks and increasing but moved to iPSC research in 2008. He the number of cells to make a sheet. “It’s a published his findings on iPS in Science, personalized approach – not a drug-style, at around the same time that Yamanaka one-size-fits-all concept,” noted Ban. He published his in Cells. added that the group was very proud of J- CDI, with facilities in Madison, WI, and TEC, “a pioneer with good technologies.” a second facility in Novato, CA, had ap- Sales are already being made, with $11 proached Fujifilm as a means of entering million recorded in the year ended March the Japanese market. “We evaluated the 2015, but Ban stressed that the best tech- technology, and were excited to see that nologies are personalized, a field where their iPS was consistent and reproducible. “it takes time to get sales.” So we decided to acquire the company,” Back in 2008, a new technology – iPS said Ban succinctly. (Also see “Fujifilm, CDI cells – was announced by an independent Agree $307m Acquisition” – Scrip, March

scientist, the Nobel Prize winning Shinya StagiaireMGIMO Commons: Wikimedia 30, 2015.) That was in May 2015. CDI’s core Yamanaka, MD, PhD. This technology products are human iPS-derived cells from allowed for an unlimited increase in the a single genetic background (e.g., cardio- number of cells. “Our scientists were ❚ A CEO’s View On myocytes, neurons and hepatocytes). excited about iPSC technologies, which Innovating Out The new US subsidiary made sales of would let us harvest as many cells as we Of Crisis $16.7 million in 2014, with 155 staff that wanted,” said Ban. year. Via CDI, Fujifilm’s program is to “In 2014, we approached Yamanaka to In his book published in 2014, focus on four main iPS cell therapy pro- access his technology and start collabora- Innovating Out Of Crisis, Fuji- grams in the US: dry age-related macular tions. He was getting a lot of attention at film chairman and CEO Shige- degeneration, with an IND filing targeted the time,” said Ban, who explained that taka Komori describes how in for 2017; photoreceptor cells for retinitis 18 the first collaboration with Yamanaka was the 1980s – a period of economic pigmentosa, with an IND filing scheduled a world first in conducting Phase II stud- affluence in Japan – Fujifilm was for 2019; Parkinson’s disease; and cardio- ies in Alzheimer’s patients with Fujifilm’s already identifying synergies myocytes for heart failure. drug candidate T-817MA (see above) and between pharmaceuticals and So now, Fujifilm has a recombinant using efficacy and safety in the patient as the specialty chemicals used in peptide scaffold, CDI has a technology endpoints. “At the same time, we would photography. He writes about for the iPSC and J-TEC has the technology draw the patient’s blood, get the iPSCs and how the Japanese group had just and the experience to get products into the neurons, get a phenotype and cultivate overtaken long-standing rival the market through the regulatory process. the neurons in a dish, and apply it for the Eastman Kodak Co., technologi- “With these three elements, our strategy drug screening.” cally, but in the mid-1980s, the for the next 10 years is to create cells for “At the end of it, we hope to have clini- first hints of the future threat to cell transplantation or cell therapy. We see cal results and in vitro results at the same photographic film were beginning iPSC as a good opportunity for cell therapy time,” he said. Phase II studies have been to emerge. Almost two decades development for the future,” continued running in both the US (the Alzheimer’s and much planning later, in Ban. J-TEC can address the Japanese mar- Disease Cooperative Study – ADCS) and March 2008 the group acquired ket, and CDI the US market. Japan, under a collaborative study with Toyama Chemical, which marked the Center for iPS Cell Research and Ap- Fujifilm’s full-scale entry into Partnering String To Fujifilm’s Bow plication (CiRA) of Kyoto University. Ban the pharmaceutical products Fujifilm also engages in partnering and puts the target market for T-817MA at Yen market. That year also saw the licensing. Ban said the group’s IP is cloned 700 billion ($6.9 billion) globally. global economic downturn take to third parties. Recently, Fujifilm made The goal is to analyze which patient hold. Komori writes that the new the strategic decision to invest $3 million cells will respond to the drug. “We are business areas are not yet fully in its Victoria, Australia, partner, Cynata now using iPSC technology to find a kind competitive, but describes how Therapeutics. Cynata is developing cell of biomarker – giving more predictable a “storm-battered” Fujifilm has therapies using allogeneic iPS cell-derived responses to pharmaceutical drugs,” Ban emerged and has been set on a mesenchymal stem cells. (Also see “Cynata stated. true course. Sets Stage For Global Fujifilm Cell Therapy Fujifilm then set up another collabora- Deal” – Scrip, September 11, 2016.) The deal tion, with James Thomson, PhD, a pioneer gives Fujifilm the option to acquire develop- in human iPS cell research at the Uni- ment, manufacturing and sales licensing versity of Wisconsin, Madison and the rights as well as contract manufacturing

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com REGENERATIVE Medicine ❚

rights for the resulting regenerative medi- ($10 billion) for the health care business cine iPS cell-derived products, for which (medical systems, pharmaceuticals, Cynata plans to carry out clinical trials on ❚ Fujifilm’s Fundamental regenerative medicines and cosmetics). graft versus host disease (GvHD) patients. The regenerative medicines business is A full clinical trial in GvHD patients Pharma Technologies continually growing in importance at is due to start in the UK around the end • Regenerative medical material Fujifilm, and now accounts for more than of this calendar year. It will use alloge- (Fujifilm’s newest activity). 400 staff, including those at J-TEC and CDI. neic iPS cells supplied by Fujifilm’s CDI • High-quality manufacturing subsidiary. “In addition, we should have Pipeline Pharma Products technologies in biopharma and discussions with companies on platelets, Recent developments for Fujifilm’s key biosimilars. beta cells or T cells, for which programs pipeline drugs include the following. we are looking for partners,” said Ban. • Image diagnosis technologies • T-817MA: The US launch of the T- The market for diseases of the retina, using radioimmunotherapy 817MA Alzheimer’s disease drug – current- such as age-related macular degenera- (RIT) – using RI-labeled antibody ly in Phase II studies both in Japan and the tion and retinitis pigmentosa, extends to imaging biomarkers to identify US – will be a key event for the group. The tens of millions of people worldwide. disease. drug was developed by Toyama Chemical. Fujifilm’s new venture Opsis Therapeutics • High-efficiency compounding • T-705/Avigan: The anti-influenza will focus on developing novel medicines processes for low-molecular drug, T-705, is already approved in Japan that can broadly mitigate or restore the drugs. as Avigan. It is a viral RNA polymerase permanent loss of vision. Researcher • Analysis technologies for devel- inhibitor that blocks viral gene replica- David Gamm, also chief scientific officer oping biomarkers and speeding tion in cells thus preventing them from of Opsis Therapeutics, promises to work up new drug development. propagation. It was approved for manu- on new approaches, and build on the facturing and marketing in Japan in March • Original nanotechnologies – scientific progress made in generating 2014, and is in Phase III US trials. In June used in microneedle and alco- new photoreceptors from iPS cells and 2016, Fujifilm announced a patent license hol-free formulations, liposome transplanting them into diseased retinas. agreement concerning favipiravir, an ac- drug delivery and extended CDI made the initial seed investment tive ingredient of Avigan, with Chinese shelf-life products. in Opsis, and additional investment will pharmaceutical company Zhejiang Hisun 19 be made according to full-scale devel- Pharmaceutical Co. Ltd. Fujifilm granted a opment needs. Therapeutic candidates license for the development, manufacture will be developed using CDI’s market- medical imaging, and just a small percent- and marketing of the anti-influenza drug leading expertise in human leukocyte age of total sales at present is accounted in China, for which Fujifilm will receive antigen (HLA) “haplobanking” (which for by pharmaceuticals. The segment also a lump-sum payment and royalties once enables therapeutic cells to be matched includes cosmetics and supplements. the drug is successfully introduced to the to the patient’s immune system, poten- The imaging business, boosted by the market. China has had reports of humans tially avoiding the need to co-administer $742 million acquisition of point-of-care infected with avian influenza, such as immune-suppressing drugs). ultrasound technology pioneer SonoSite H5:N1 and H7:N9, in addition to regular Fujifilm’s ideal criterion for partners is Inc. in December 2011, is globally very im- seasonal influenza. Also in June, Avigan “bigger is better,” said Ban, but he added portant to Fujifilm. The area is not growing was selected as one of the product sup- that big pharma is not bullish enough rapidly at present, Ban acknowledged, but plies to be procured as part of the Japanese to come to these cell therapy areas, and it is providing a “very stable business.” government’s emergency grant aid and even bioventure spin-outs/start-ups from Nevertheless, overall business growth for efforts to counter the outbreak of the Ebola academia can be slow to react. “But we the Fujifilm group is expected to be driven virus disease in Guinea. are open, and our strategy is very much by health care (medical devices and phar- • FF-21101: Fujifilm has a major focus to work on a non-exclusive basis. We have maceuticals), highly functional materials on cancer and cancer immunotherapy. Its an iPS cell bank and are willing to discuss and document businesses. anti-cancer agent, FF-21101, consisting of licensing or joint development ideas.” The group has a medium-term manage- a radioisotope-labeled antibody, uses ra- ment plan with a sales target of $4 billion diation emitted by the radioisotope to di- Rebalancing The Business from health care activities annually by the rectly attack cancer cells. It is in US Phase Over The Years year ended March 2017. Ban said, “Right I trials at MD Anderson Cancer Center in The breakdown of Fujifilm’s revenues has now our growth relies on the CMO busi- patients with advanced solid cancers. To changed markedly over the last decade nesses, including Diosynth.” For fiscal date, tumor uptake of the antibody has and a half (see Exhibit 1: Fujifilm Group’s 2018 (year ended March 2019) “we hope to been demonstrated in three of the four Balance Of Sales In Transition – 2001/2016). expand growth from pipeline products, in- patients who have undergone imaging The health care business currently ac- cluding from the influenza drug now ending with an administration of FF-21101. The counts for some 16% of group sales. The Phase III studies in the US,” Ban continued. bio-venture Perseus Proteomics contrib- majority of it is derived from medtech and The revenue target is Yen 1 trillion uted to the antibody drug discovery, and

Exhibit 1 Fujifilm Group’s Balance Of Sales In Transition – 2001/2016

12 Year Ended 54% March 31, 2001 46% Photo-Related Total Yen 2 Industrial Products 1,440.3bn Other imaging 7 Medical systems businesses Graphic systems Digital cameras Photographic lm 20 FDP materials Other 19

5 14% Photo-Related 9 <1 Digital cameras & optical devices Other photo-related 20 Photographic lm Year Ended 47% 47 March 31, 2016 16 Document-Related Total Yen 39% 2,491.6bn Industrial & Life Science-Related 12 Health care Graphic systems 5 6 FDP materials Other

Source: Fujifilm

Fujifilm Diosynth Biotechnologies has in areas that are not already dominated will happen. But now some companies taken charge of antibody production. Fu- or mature. Big pharma, in its traditional are wanting to come to the market. Yet jifilm RI Pharma utilized its technology for markets, has major capital and cash they do not have the basic technologies, developing the diagnostic and therapeutic flows, and can network with academics. so they have to rely on academics or bio- radiopharmaceutical. But Fujifilm has chosen carefully. “If we ventures to get their target cells. just followed the model of the Pfizers, On the other hand, “We took a risk to Disrupting The Market GSKs, etc., we would not be able to com- come to this market because we have Ban pointed out that Fujifilm is taking on pete. As it stands, we are a latecomer to the drive to be a major player in it,” Ban the major pharmaceutical groups in areas the market. However, we have some key asserts. It is helpful for Fujifilm that where the latter can’t compete effectively, competencies.” the Japanese government is very sup- but equally, these are also areas where The regenerative medicine market does portive of regenerative medicine, having they may want to partner. He sees this not yet exist, said Ban, and big pharma recently introduced accelerated systems strategy as a route to the pharma market is still watching and waiting to see what for products in Phase II studies, thereby

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com REGENERATIVE Medicine ❚

providing a better chance of securing Getting A Handle On Costs do not have engineers – they outsource. quicker approvals and earlier access to And Resources They may not be concerned as much the market. But how do these technologies fit into about production costs – and perhaps Additionally, the Japanese economy the outcomes-oriented, low-cost, patent- more concerned about high margins,” he and trade ministry (METI) forecasts that centric markets that are becoming more commented. As to Fujifilm, “when issues there is a major regenerative medicines prevalent around the globe? Ban’s view of productivity and cost are at stake, we market up ahead – $25 billion in Japan of this is that, with production costs being allocate resources and do the necessary alone and $380 billion globally by 2050. relatively expensive, and quality control a problem solving.” “That being so, we decided to come to complex activity, in the end, the product this market as a ‘fast runner’ to get the price should reflect those inputs. Next Priorities For Fujifilm leverage and acquire substantial market At present, Fujifilm is working with the Fujifilm is ramping up its activities, and as share,” said Ban. “J-TEC and CDI are key Japanese government and academics to in- far as Ban is concerned, “We have to speed elements in Fujifilm’s drive to compete in crease its cell culture production capacity, up in current business.” He said, “Our the regenerative medicine market.” Fuji- and is targeting an automated cell culture CEO is committed to driving $10 billion film expects very steep growth between system for large-scale mass production. It of sales from health care by March 2019. 2020 and 2030, when the global market is is working with Kyoto University’s Norio But there are also other options, such as forecast to reach some $120 billion. Says Nakatsuji, PhD, on an iPS cell 3D culture M&A to get up to speed, especially on the Ban. “We are developing our pipeline and system that will be able to subculture to 108 materials side.” as early as 2025 expect to have captured cells in a cell suspension in a 200 ml bag. He continued, “For the last 20 years a substantial share of the regenerative Ban stated, “In the end, we will dramati- I’ve been in pharma R&D – from in vivo medicines market.” cally reduce production costs.” phenotyping to high-throughput molecu- In addition, there is a lot of opportunity Ban has a keen eye on costs. One big lar biosystems. I’ve seen a lot of pharma in the next two to five years for Fujifilm difference between Fujifilm and the companies succeed in developing new and the established pharma industry to traditional pharma company is its focus drugs – antibodies, kinase inhibitors, etc.” set up collaborative cell therapy develop- on and investment in skilled engineers. But Ban added that he is now also ment projects. “On the other hand, pharma companies seeing that discovering new drugs using Ban expects ESC research to drive sales current R&D techniques is no longer so of immunosuppressants, but in the case easy. “But we still need new products, 21 of iPSC, Fujifilm is now copying homozy- and that is why – aligning with my per- gous clones, which will potentially avoid ❚ What’s In A Name? sonal interest – we are now focusing on immunosuppressant use. “Our group is new drug screening systems using iPSCs, Due to the changes in the market, in a strong position and we believe that particularly iPS clones established from the traditional film business that we have a frontrunner position in iPSC, the patient.” many associate with Fujifilm now which is a key for any human therapy.” With its iPSC technology, Fujifilm is represents just 1% of its turnover. Ban noted that Chairman and CEO Ko- seeking to create phenotypic cells, mimic Is there a justifiable case to review mori, has said that Fujifilm cannot exist the phenotype and use those cells to de- the group’s name, now that it has based on its legacy businesses. Those velop new drugs. “We are using molecular made such decisive strides to markets are disappearing, so Fujifilm biology to find a fit and analyze what is reinvent parts of its business and has had to segue to new markets. “In that the target for the disease,” he explained. “regenerate” a role in the phar- way, it’s a top-down message; we have to Fujifilm is now approaching pharma- maceutical sector? Put another change and we should not stop.” ceutical companies to promote these types way, should 99% of a business be Indeed, no one at Fujifilm thinks the of cells for use in R&D. “In the end, this described by just the other 1%? group can go back to its legacy business. new paradigm could break through and And Fujifilm is more likely to succeed in solve the difficulties in drug discovery,” Ban has a clear view on this. its new industries where others would said Ban. Here is where this technique “The point is that so much of our not due to one predominant factor, in and these products fit. “Everywhere – the technology is from collagen and Ban’s view: “I think our people are our US, the EU and Japan – is facing difficul- fine chemistry – and it all comes key – they are always moving forward.” ties in health care budgeting and system from film. In terms of heritage, He continued, “Inventors invent, and affordability,” said Ban. “Drug prices are film is very relevant to Fujifilm, there are no guarantees of market supe- increasing, and some systems may not be and of course we still have many riority via that channel alone. But we able to sustain the costs. Because of this, products using film technologies, have a strong senior management that new drugs are needed to create the neces- such as ion exchange membranes supports our activities as we move into sary cost-benefits.” [used in water treatment], and new areas. So, in the end, I believe it is various industrial films such as IV004946 these two elements – good people and UV scale films. The film business Comments: good management – that will help us lives on at Fujifilm.” Email the author: [email protected] succeed in this market.”

Immuno-oncology’s challenge is to orchestrate a biomarker program in a highly competitive drug development landscape knowing that prior to having significant clinical experience, the program is unlikely to yield the kinds of binary measurements used to define and select a patient population for a targeted therapy.

22 Shutterstock:molekuul_be

by Olivier Lesueur, Rachel Laing or more than a decade, the marching order for drug developers has been that AND Mark Ratner every drug candidate proceeding beyond a proof-of-concept study should be accompanied by a biomarker. Immuno-oncology (IO) is turning that notion With so much opportunity staring them in of biomarker development on its head. In IO, the role of a biomarker goes the face, IO companies are not waiting for well beyond identifying whether the drug target (usually a genetic mutation biomarkers to emerge to commercialize orF rearrangement, in the case of a targeted therapy) is present in a given patient and their drugs. whether the drug candidate can be delivered at a dose that allows for effective modulation of that target. The challenge in IO – especially for the current wave of drug development Neither the content nor the platform(s) programs that look to combine PD-1/PD-L1 targeting agents with drugs that modulate for measuring IO biomarkers is as yet additional targets, IO or otherwise – is in how to orchestrate a program efficiently in a determined. highly competitive landscape without the benefit of the kind of binary measurement that is used prospectively to define and select a patient population for a targeted therapy. In But fitting a considerable biomarker IO, predictive tests will only be identified retrospectively after much guesswork around research component into the IO choosing the combinations to test: the tail will be wagging the dog. To paraphrase from discovery/development process may well the realm of political investigation, discussions about a successful biomarker develop- be a key element of product ment path in IO will turn on questions of what did you know and when did you know it. differentiation, which is especially As the initial wave of checkpoint blockade drugs establish themselves, led by the first important for small companies seeking to PD-1/PD-L1’s Opdivo (nivolumab, from Bristol-Myers Squibb Co.), Keytruda (Merck & enter the market in a niche indication. Co. Inc.’s pembrolizumab) and most recently Tecentriq (atezolizumab, from the Roche unit Genentech Inc.), the landscape for oncology drug development is changing rapidly. The information taken from clinical The chances of enrolling a pure population of IO drug-naïve patients for clinical trials testing will be the basis for the has already diminished for any drug because of the opportunity for greatly increased retrospective identification and validation of predictive markers. This requires a survival that IO treatments offer, even if for a small proportion of patients. Would-be higher biomarker-related spend than has entrants have quickly pivoted toward establishing the effectiveness of combination been needed for other molecular therapies that include a checkpoint blocker in more carefully defined subpopulations therapies, even if their application as a as the means for gaining a competitive edge. Because there appear few obvious ways to diagnostic is problematic. differentiate the PD-1’s based on mechanism of action alone, homing in on an indica-

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Drug Development ❚

tion and a specified subgroup of patients immune system’s ability to identify and becomes even more important to be able destroy tumor cells. PD-1’s are similar to establish a first-mover advantage that to targeted therapies in that they have a is more than a short-lived blip. binary biomarker associated with them: How, then, to accomplish this when bio- “In 18 to 24 months, PD-L1 protein expression, the first and to logical understanding, if rapidly evolving, date the only IO biomarker. But PD-L1 is a is early and when the tools for elucidating companies will relatively poor marker for several reasons. the complexities of the interplay between Its expression levels do not clearly cor- tumor and immune system are not yet in probably be asking relate with response, those levels change hand? The makeup of a tumor, priming over time, and they may vary depending of a patient’s immune system, tumor why so many of the on exposure to therapy. Beyond PD-L1, microenvironment, degree of lymphocyte getting one’s arms around IO biomarkers infiltration, and presence and release of combinations that becomes even more complicated because neoantigens are all potential consider- the function of IO drugs, presumably used ations when choosing an indication for made theoretical in combinations, will rely on stimulating IO drug therapy. other properties of the immune system. With an abundance of potential dis- sense haven’t worked. “Biomarkers will be important, but the ease targets and approaches comes the nature of those biomarkers and the types potential for product differentiation. An In particular, they will of biomarkers will be extraordinarily com- oncology drug developer will be able to plex,” says Kapil Dhingra, MD, principal benefit from the relatively early science be wondering whether at KAPital Consulting and former VP and in that there are more chances to grab a head of oncology clinical development at piece of the pie, even if a smallish one. they used biomarkers Roche’s Hofmann-LaRoche division. The hundreds of clinical trials of IO agents across tumor types and disease stages, in properly to guide the Working Backwards almost any combination imaginable (with Targeted drugs against defined genetic and without another IO drug), suggest that best selection of alterations directly inhibit cancer cells. companies are looking for any and every Therefore, markers to predict sensitivity 23 way to show that the efficacy of a combi- patients toward the to these drugs are largely found in the nation approach is higher than that of an cancer cells and can generally be hypoth- IO monotherapy. best combinations esized intuitively. This molecular drug Without a differentiated product, it’s development strategy changed with the unrealistic to assume a new entrant will for them.” launch of Avastin (bevacizumab), a drug be able to seize a competitive advantage that targets angiogenesis (blood vessel for long: companies all want a unique formation) to block a tumor’s blood sup- combination that they can bundle versus – Kapil Dhingra, MD, ply, in 2004. The biomarker challenge a commodity backbone monotherapy. Fit- further accelerated with the dawn of the ting a considerable additional biomarker KAPital Consulting immune-oncology era. research component into the IO discovery/ “Especially with IO agents against development process may well be a key targets other than PD-1/PD-L1, you are get- element of differentiating a drug, be it ting into a much more dynamic environ- through parallel introduction of a com- ment,” Dhingra says. The genetic makeup panion or complementary diagnostic, or of cancer cells, their immunosuppressive by showing that such a tool is not needed capabilities including presentation of (an element of confusion the market is decoy surface receptors and the need to already experiencing among the approved combine a variety of drugs modulating dif- PD-1/PD-L1 agents). “The challenge is to ferent cellular components of the immune turn immunotherapy back into a biomark- system are all relevant considerations in er-driven therapy,” says Roy Herbst, MD, IO drug development. “There is much PhD, chief of medical oncology at the Yale more complexity in terms of the interplay Cancer Center. of the tumor cells, the microenvironment The PD-1 class of drugs, including and systemic immune parameters,” he antibodies that target PD-1 itself or its says. “We need to triangulate these in main binding partner, PD-L1, as well order to come up with useful biomarkers as Bristol-Myers’ Yervoy (ipilimumab), to guide optimal treatment.” which targets CTLA4, are the first genera- Preclinical models have generally not tion of IO agents aimed at unlocking the proven to be good predictors of clinical

Exhibit 1 Selected IO/Dx Partnerships

Pharma/Dx Partners Deal Terms

Merck is sending samples from patients treated with Keytruda off to collaborator Nanostring, which is compiling a mountain of Big Data embracing that treatment Merck & Co./Nanostring Technologies population based on a gene signature Merck discovered and is moving forward to commercialization

Roche/Genentech expects to be able to use the Foundation Medicine platform to sequence DNA and RNA and measure T effector cell signatures, mutation Genentech/Foundation Medicine burden and driver mutations, at the same time, in time leading to a universal IO diagnostic test

Nanostring is providing nCounter to HalioDx to enable the latter’s development of a gene expression signature based on quantifying the number of tumor HalioDx/Nanostring Technologies infiltrating lymphocytes (CD8 and CD3 cells) on the surface of tumor cells, as a prognostic tool for early-stage colon cancer and to help predict response to IO therapies

Bristol-Myers Squibb/ BMS will use HTG’s EdgeSeq NGS platform to profile tumors as part of the big HTG Molecular Diagnostics pharma’s immuno-oncology translational research

Expanding upon an existing agreement, Merck KGAA and Pfizer have enlisted Merck KGAA & Pfizer/Dako AS the help of Agilent Technologies’ Dako AS to develop a companion diagnostic 24 for avelumab

Source: Strategic Transactions | Pharma Intelligence, 2016

efficacy, especially for treatments target- sense haven’t worked,” Dhingra predicts. activity when a pathway is blocked. “This is ing the immune system. This makes dis- In particular, they will be wondering fundamental to finding the next generation covery of predictive biomarkers extremely whether they used biomarkers properly to of IO therapies,” Frankel says, including challenging prior to exposing patients to guide the best selection of patients toward defining and prioritizing your next set of a drug candidate during a clinical trial. the best combinations for them, he says. targets for combinations. The process is es- Given the complexities of the dynamism “If you are going to be competitive in the pecially difficult because “we don’t have all between tumor and surrounding environ- space you have to understand the biology the drugs developed that hit the alternative ment, the lack of good preclinical models of the compound: it will help you define ways in which a cell may be either seen or and limited efficacy of IO drugs as mono- and prioritize your next set of targets for hidden from the immune system,” he says. therapies, “it’s reasonable to assume that combinations,” says Stanley Frankel, MD, That many patients will have already a lot of combination successes will come corporate VP and head, immuno-oncology received a PD-1 drug further complicates from serendipity,” Dhingra says. And clinical R&D at Celgene Corp. Hence the matters. “The idea that you are going to with the natural impulse for companies need for exploratory biomarkers. see, by luck, a very large signal – either to combine IO with what’s already in their In developing molecular therapies, clini- response rate or time to progression – in portfolios, there will be an abundance cians want to limit the patient population patients who have already seen a PD-1 or of novel combinations – a phenomenon to those expressing the drug target, and PD-L1 inhibitor seems overly optimistic,” already in evidence among the market perhaps also avoid situations where a Frankel adds. In particular, he says, bio- leaders. (Also see “Bristol Pushes Pedal mechanism of resistance or a compensa- markers could play a significant role ret- To Metal In Immuno-Oncology Combo tory mechanism exists. In IO, however, rospectively in trials that enroll all comers, Testing” – Scrip, July 4, 2016.) (Also see when perturbing one part of the immune with drug developers later figuring out how “Roche’s Guide To Success In Oncology” – system with the promise of therapeutic to characterize the responding patients. Pink Sheet June 27, 2016.) activity, the compensatory mechanisms As a result, the drug-diagnostic co- Unfortunately, as data come out, reality that may exist in the patient are unknown. development path is far from straight- will set in. “In 18 to 24 months, companies The challenge is not just understanding forward. “I don’t think it is reasonable to will probably be asking why so many of whether the drug works, but also what hap- expect, as the FDA initially wanted, that the combinations that made theoretical pens as a consequence if there is clinical there would be a companion diagnostic

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for Phase I for everything you are going monitoring in IO. But with imaging, even or other relevant markers over time. to do,” Frankel says. Technology has relatively straightforward strategies like The IO leaders are already enlisting been advancing way too fast to lock that using antibodies that target known mark- diagnostics companies in this endeavor: in when contemplating a three- to five- ers such as Her2 or EGFr and imaging Merck is now sending samples from year development program, even under those markers throughout the body have patients treated with Keytruda off to an accelerated regime to approval. “It’s not been made to work. “To think we can collaborator Nanostring Technologies hard to lock down a diagnostic,” he states, [develop a] real-time imaging modality Inc., which is compiling a mountain as evidenced by the multiple immuno- that can somehow assess macrophages, of Big Data embracing that treatment histochemistry (IHC) tests available for tumor cells, lymphocytes all in metastatic population based on a gene signature PD-L1 and the Blueprint program aimed lesions doesn’t seem feasible in a 10- to 15- Merck discovered and is moving forward at making that testing more uniform. year time frame,” acknowledges Dhingra. to commercialization. Roche/Genentech, (Also see “Industry, Cancer Groups Draft via its relationship with Foundation Blueprint For PD-1 Companion Dx Approv- Beyond PD-L1 Medicine Inc. (FMI), expects to be able als” – Medtech Insight, March 27, 2015.) Several factors limit the use of PD-L1 to use the Foundation Medicine platform And that’s for measuring a single analyte. expression as a predictive biomarker and to sequence DNA and RNA and measure Blueprint was necessitated because the explain why expression of the protein does T effector cell signatures, mutation bur- PD-1 field was moving so fast that each not tightly correlate with response. PD- den and driver mutations, at the same company commissioned its own test, L1 can be induced by various therapies, time, in time leading to a universal IO with different specifications. That led to stress or lymphocytic infiltrate. A PD-1 diagnostic test. (Also see “Which Path different tests yielding different results drug may work in patients with low PD-L1 Forward For Foundation Medicine?” – In in the same patient and the same tumor. expression because the test was run on an Vivo, June 2015.) Genentech’s biomarker “We should be creating biomarker tools, archival specimen not representative of plan for Tecentriq leading to its approval immune biomarkers that can be tested what is going on in the tumor at the time in bladder cancer shows how even at this using the same assay (probably in array a patient started on drug. When looking early stage, biomarker considerations can format) at the same time,” says Axel at the effects of checkpoint blockers in influence a trial, an approval and initial Hoos, MD, PhD, VP, oncology R&D at combination with other IO drugs, targeted market penetration. (See online sidebar, GlaxoSmithKline PLC. “You might then agents or even chemotherapy, PD-L1 ex- “A Lesson From Tecentriq’s Development.”) get a platform for biomarkers that together pression becomes even less predictive. Having in hand large clinical data sets 25 may be relevant for identifying a certain Looking at biopsies or samples dur- will refine patient populations and indica- patient,” he says. ing the course of therapy to gauge the tions and also inform combinations: once Taking serial biopsies and developing therapy’s pharmacodynamic effect and a data set for monotherapy is in hand, it the right panel of tests to understand compensatory changes is very different will be possible to query patients who what’s happening in responders and non- than the application of a companion have failed their first line of IO to deter- responders will be essential. “It’s critical diagnostic, which will only tell you what mine whether to enroll them in Phase I/II to understand what happens once a target to do at the beginning of treatment. Drug trials of a new agent or rapidly go to a com- is engaged,” Frankel says. “We know there developers need additional markers such bination to see if that changes response. are going to be compensatory responses.” as those that measure genetic instability, The future lies in this dynamic process of Although much has been said about the basic characterization of lymphocytic testing that looks at multiple variables, ability of liquid biopsy to enable such test- response, and if the technology can be then overlaying the results of clinical trials ing, the technology remains aspirational. validated, liquid biopsy to monitor PD-L1 to define which set of patients to pursue. Other tools – multiplex IHC assays and FMI and Personal Genome Diagnos- next-gen DNA and RNA sequencing in READ MORE ONLINE tics Inc. (PGDx), among others, have particular – will maintain their place in plans to introduce tests that measure the diagnostic armamentarium. Sequenc- A Lesson From tumor mutation load – the next piece to ing and RNA-based expression is relatively Tecentriq’s Development be fitted into the IO biomarker puzzle. straightforward for a large number of The increase in mutation rate in certain targets using small quantities of mate- Roche chose not to limit enrollment tumor types, as detected through ge- rial. Flow cytometry will be relevant, as to patients with high levels of PD-L1 netic instability patterns, corresponds will the continued use of IHC, despite the expression when it moved Tecentriq to response to PD-1 checkpoint inhibitor latter’s inconsistencies depending on the into Phase II – unlike Merck, which monotherapy. Although not specific for antibody used and observer bias. IHC will did not include low PD-L1 expressers all these patients, mutation load could also become more sophisticated in time, in its Keytruda lung cancer trials. be used to identify those who would not with multicolor staining to more carefully have a significant benefit. “Given that see what cell expresses the target, not just PD-1 is the dominant drug at this point whether the target is present. http://bit.ly/2ebJrjR and for the next five-plus years, it is very Real-time imaging of markers in blood likely that characterization of genetic or bodily fluids could also be used for instability phenotype will be done in all

patients,” Dhingra says. including Nanostring, FMI and PGDx are “Mutation load is low-hanging fruit,” showcasing their platforms and providing notes Vincent Miller, chief medical officer pharma with IO-oriented gene expression at FMI. But it is not something that can be testing on a research basis. routinely generated by most of the tests There is little choice In the next three to five years, combina- that are available commercially, he says. tion tests that measure PD-L1 expression, “Measuring tumor mutational burden except to use [a PD-1 establish a genetic instability phenotype is the realm of companies doing a well- of a tumor and identify the degree of validated comprehensive genomic profile,” drug] and then start to lymphocytic infiltrate will become main- Miller explains. “Any of the hot spot tests stays for gauging responsiveness in IO. that have maybe 500 genes on them but segment the population (HalioDx, for example, is also combining only sequence a tiny portion of the gene(s) CD8 with PD-L1 to improve PD-L1 IHC enriched for the oncogenic variants would into patients for whom testing. “Combined with the use of digital not suffice to provide that information.” pathology, we think we can potentially The vast majority of patients who do PD-1 alone is fine, those improve the sensitivity and specificity not exhibit a genetic instability or action- of a PD-L1 assay to better identify those able mutations will have to be treated who need PD-1 plus patients who will benefit from checkpoint with agents that work at the level of local inhibitors,” says CEO Vincent Fert.) tumor, to change the microenvironment another checkpoint Farther out will come the time when by causing the release of antigens or to each patient’s tumor is fully profiled at suppress certain macrophages and lo- modulator, then those initial diagnosis, including a full tran- cal cytokines to make the tumor more scriptome profile, a selected proteome responsive to PD-1’s. Additional tests will who need PD-1 plus analysis and a full immune profile includ- therefore need to focus on antigens that ing not just lymphocytic infiltrates and the immune system can recognize and to another antigen expression markers and perhaps a liquid which it can make an immune response. biopsy profile looking at the immune In that scenario, PD-L1 becomes just one disease mechanism or status of the tumor. 26 component of the checkpoint suppression The goal is to have a universal test that story, with a whole new angle emerging for who need PD-1 plus could encompass all therapies for an the 60% to 70% of cancers where different indicated patient based on tumor type approaches are needed to get the immune another macrophage or stage of treatment. It would look at system to recognize them. all possible therapeutic modalities – IO, Ultimately, a biomarker platform for suppression targeted treatments, chemotherapy – and IO will have to look at DNA mutations, inform the entire treatment paradigm for RNA expression and perhaps even protein mechanism, etc. That is that individual patient. expression to understand the extent of immune system activation and infiltration, how the segmentation Market Impact as well as look at DNA mutations that Once companies become systematic about drive tumor growth, to know how to com- most likely will evolve. selecting the right markers for cancer bine IO with a targeted therapy. “I think patients, they will move away from all it’s too complicated a situation for an comers to more select biomarker-driven academic center to work up a home brew patient populations. But that will happen and validate on its own,” says Nanostring over time. CEO Brad Gray. “You need a lot of data to make a true Nanostring is leveraging its gene ex- assessment of whether a biomarker works pression measurement system, nCounter, tive for IO. “When you sample what is going for selecting patients and differentiating in a variety of ways within IO: in addi- on in a tumor you are capturing both the your drug,” says Hoos. “With the speed tion to its deal with Merck, Nanostring tumor and the immune cells that are infil- the field moves with now, it’s nearly im- is providing nCounter to HalioDx SAS to trating the tumor,” Gray says. “There are possible to have all of the data you would enable the latter’s development of a gene ways to deconvolute the information about like to have before you make a determina- expression signature based on quanti- what immune cells are there because they tion on how to use the biomarker. That’s fying the number of tumor infiltrating exhibit specific markers,” he says, making what happened with PD-L1. It was meant lymphocytes (CD8 and CD3 cells) on the RNA expression extremely important in IO. to be a differentiation factor and got used surface of tumor cells, as a prognostic tool “It captures in one test both the biology of before they fully knew what it meant.” for early-stage colon cancer and to help the tumor and the immune system that is Indeed, with so much competition, the predict response to IO therapies. infiltrating the tumor.” need for differentiation is so great that RNA signatures are particularly informa- A variety of diagnostics tools companies any emerging marker will likely become

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a tool for drug differentiation. But with tions. Large genomics instrumentation for testing. But even with uncertainties multiple assets against the same target, and/or Big Data-focused diagnostics around the shape of future IO biomarker that element of differentiation will get companies – Roche, Illumina Inc., even content, we argue that significant and diluted very quickly. So while offering Google Inc., for example – will also be in early investment in biomarkers is essen- a potential first-mover advantage, it a good position to effectively aggregate a tial, especially for second-generation IO will be short lived. “The data will limp variety of tests and platforms: they could companies seeking to identify combina- behind the need to make decisions,” take the multiple cell types that are con- tion therapies. Diagnostics companies Hoos asserts. stantly changing along with the choice are already out there seeking to work on Following that rationale, we believe of dozens of possible drugs, test them such programs on a fee-for-service basis. that the leading therapy companies will together and have the bioinformatics to They have much more of an interest in use their markers in drug development, determine the likelihood of response to driving the adoption of biomarkers in IO but then only defensively in the commer- certain treatments. than does big pharma. cial realm, suggesting that second-tier Such a platform must provide results The market-leading large pharmas are players and diagnostics companies will that patient and provider can readily collecting clinical samples representative have to lead the way. And should diag- understand: a test will be sent off and of treatment from hundreds of trials us- nostics companies be collaborating with come back with a defined set of treatment ing IOs in combination regimens across a pharma companies on specific drugs for options, including the risk/benefit profile broad spectrum of diseases. They have the access to sample sets, they may not be able of giving a particular drug. experimental foundation for conducting to use all of that data and those samples. Assuming an approved platform and retrospective analyses aimed at finding To the extent that holds true, it falls to reagent set and validated data, the inter- subgroups of responders based on their projects such as Blueprint to validate pretation of those data should be able to tumor and immune system profiles. At biomarkers for a broad set of drugs, or set the label for a companion diagnostic, least for now, however, they are playing a for a diagnostics company to work with either for one drug or for a class of drugs – waiting game and not aggressively seeking many different pharma companies with the latter being the preferred outcome for to commercialize biomarkers representa- assets in the class. a diagnostics company if not for a pharma tive of those profiles. There is little evidence of this to date wanting to direct use of its drug. The same wait-and-see attitude should in IO, owing to the fast-moving develop- Payers likely will not proactively push not pervade smaller next-generation ment pace. But with Blueprint, “the idea for biomarkers and fund studies absent companies with new IO drugs. Those 27 of harmonization really is catching on,” a clear rationale and expectation that a firms must care more about validating Hoos says. biomarker would reduce the total system biomarkers to be able to home in on a Already, PD-1’s have found their place cost of therapy (which is not clear with a niche indication where they can run a as foundational cancer treatments. Even complementary diagnostic, for example). fast trial and get approval. They will also low PD-L1 patients can have some benefit Rather, look to collaborative groups and need a biomarker to differentiate in a from PD-1’s, and given the lack of predict- the second-generation IO companies that crowded indication where current play- ability of preclinical models and the chal- will want to carve out a subset of patients ers are taking an all-comers approach. lenges for finding biomarkers, there is little using biomarkers either based on those In either case, to be competitive they choice except to use one and then start to who don’t respond to PD-1’s at all or will need to have exploratory biomarkers segment the population into patients for through identifying higher-responding embedded in those trials, taking a more whom PD-1 alone is fine, those who need subsets within the PD-1 population. aggressive stance in favor of ultimately PD-1 plus another checkpoint modulator, Diagnostics companies are limited by seeking to validate them in diagnostic then those who need PD-1 plus another access to the sample sets needed to dis- form. Otherwise, they are merely taking antigen disease mechanism or who need cover and validate biomarkers, says David a shot in the dark hoping to find a strong PD-1 plus another macrophage suppression Brunel, CEO of blood-based immunother- signal in a crowded field where none have mechanism, etc. That is how the segmenta- apy diagnostics developer Biodesix Inc. been forthcoming. And if these firms do tion most likely will evolve. The more the “I think it will be the competitive forces gain any advantage, chances are it will implications of modulating the immune in pharma that drive this in the end,” he be short-lived. system become clear, the more biomarkers says. “We have explored trying to get pay- IV004938 can be applied to figure out where the block ers to take a very different approach than Comments: in each patient is – at the level of antigen in the past and put some resources behind Email the editor: [email protected] release, antigen presentation, immune helping making sure the right drug gets to response formation or the effector side of the right patient. It’s been brought up but Olivier Lesueur ([email protected]) the immune response. The timing of that they scratch their heads.” is a managing director with Bionest innovation is far from clear, however; we Partners, based in New York and Paris, would guess a minimum of five to 10 years. Where We Stand and Rachel Laing ([email protected]) In the meantime, we foresee tests be- It is too much to expect to know the pre- is a manager with Bionest based in coming fairly centralized, particularly in cise role predictive biomarkers will play Basel. Mark Ratner (mlratner@verizon. pathology departments of major institu- in IO and the platforms that will be used net) is a contributing editor to In Vivo.

❚ Having worked in the ophthalmic device industry for more than 35 years in both multinationals and start-ups, James Mazzo’s latest port of call is at Carl Zeiss Meditec as head of the group’s ophthalmology business. He discusses what he views to be the strengths and weaknesses of the global business, which he says has the broadest product offering in the ophthalmic industry, and how he plans to help a market giant grow even bigger. James Mazzo

BY tina tan tart-ups often look to market leaders for strategic guidance, but there are 28 lessons that industry Goliaths can learn from their smaller, more nimble Medtech veteran James Mazzo aims counterparts, believes medtech industry veteran James V. Mazzo. to bring a small-company focus to his Big multinationals may have the advantage of bulk, but unless this growth new job as head of the ophthalmology is properly controlled and leveraged, the organization – specifically the sales business at Carl Zeiss Meditech. Sand marketing function – can get unwieldy and lose its focus, explains Mazzo, whose 35-plus years’ experience in the ophthalmology industry includes two decades at Al- lergan’s eye-care business before leading the unit’s spin-out in 2002 and becoming CEO He believes that Zeiss, like all major of Advanced Medical Optics. Abbott acquired AMO in 2009 and Mazzo went on to head global companies, may have the start-ups such as corneal-inlay developer AcuFocus. advantage of bulk, but unless growth Small companies like AcuFocus, where Mazzo was CEO until this August when he took is properly controlled and leveraged, on his current role as Carl Zeiss Meditec AG’s global president of ophthalmology, have the organization – specifically the a “laser focus” when it comes to driving their message to the customer. And it is this sales and marketing function – can get unwieldy and lose its focus. “small company mentality of focusing, educating and sticking to a consistent message” that Mazzo is intent on bringing to Zeiss’ ophthalmology business and implementing across the German company’s global structure. Mazzo’s hire of a new head of global While Zeiss boasts the broadest product offering in the ophthalmic industry, the com- sales was the first step in his broader pany has not leveraged its capabilities as well as it should, he believes. This, though, is strategy to realign Zeiss’ internal not a problem unique to Zeiss, says Mazzo. “I was chairman of AdvaMed and I’ve seen structure to facilitate collaboration that this is actually a problem of all major global companies. The bigger you are, the across the different product lines. more difficult this gets.” Zeiss’ portfolio of products covers diagnosis and treatment of eye diseases, serving opticians, optometrists, ophthalmologists and ophthalmic surgeons across the globe. So getting a strong, consistent message across the organization and across the customer base will not be an easy task, Mazzo acknowledges. However, as a man who confesses he likes things to move fast, Mazzo has already set the wheels in motion. Just a month after he moved into his role at Zeiss, the company has tapped a senior executive from one of the ophthalmic market leaders, Bausch & Lomb, to lead global sales for ophthalmic devices. Andrew Ihan Chang was general manager and senior VP for B&L Surgical, where he led sales, marketing, operations and business development for the US. Chang’s appointment is part of Mazzo’s broader strategy to

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realign Zeiss’ internal structure, sharpen dustry we have a lot of young companies. matically over the next months. There is the company’s focus and make it condu- Sometimes that youngness is great but going to be a strong leverage that we’re cive for collaboration across the different you don’t have that history of technology going to take it from the customer inside product lines. that helps you know how to continue to to Zeiss. So I don’t care where you are, In the Q&A below, Mazzo discusses this innovate. Zeiss has been around for about if you’re a diagnostic specialist you’re strategy in more detail and the objectives 170, 180 years so that’s very powerful; it going to make sure that your refractive he has set for the business. speaks to the company’s commitment to colleague is as powerful as you are in that this space. office. That’s one area when I was on the Tina Tan: You’ve been in this business Number two, I admired and have a other side of the fence that I’d never felt for a very long time. How different lot of respect for the global reach of this was leveraged. And now I’m glad I’m on or similar is Carl Zeiss’ ophthalmol- company, they really are in most of the this side of the fence because that is going ogy business compared with, say, major countries with presence and AMO to be very powerful. Advanced Medical Optics? and other companies don’t have some of So I was always admiring Zeiss’ his- James Mazzo: It’s a great question that same geographic presence. tory, I was always admiring the strong because obviously I helped start AMO What I believe Zeiss can do better is fundamental business, I was admiring from its spin-out from Allergan, so it’s leverage its competitive advantage. No the geographic presence, but I never was a really good comparison. The similari- company is perfect so we all have our overly concerned [as a one-time competi- ties are that they have the same type of strengths and areas of improvement, and tor of Zeiss] on the leverage capabilities, customer base. Not to the same degree one of the areas that we need to improve on but now we’re going to unlock that and though – AMO really wasn’t in retina or is to leverage this. When you have a diverse take advantage of that. glaucoma, but they both have ophthal- product line sometimes what occurs is that mologists and refractive surgeons as each individual takes care of that product Could you elaborate more on your their customers. There’s also the similar line but the customer could care less how strategy for improving Zeiss’ leverage geographic spread – AMO was a global you organize. The customer wants you to capabilities? company, Zeiss is a global company. meet his or her requirements no matter Let me break it down into various But I think that’s probably where the what technology you have. So we became components. First off, before you can similarities stop because one of the rea- a bit siloed in that and as a competitor I even leverage externally you need to be sons that I decided to join [Zeiss] and one noticed that it wasn’t being leveraged. leveraged internally, because if we’re not 29 of the greatest opportunities as well as You’re going to see that change dra- structured accordingly, you’re never going the biggest trait is the company’s diversity to implement it successfully. of its product line. Zeiss takes care of the One of the things we’re doing now is that patient from diagnostic properties to treat- we are improving the accountability of the ment properties; no other entity, no other organization by articulating the follow- competitor does that. ing. I just hired our head of sales – Andy So if you’re a patient who walks into “I want to take that Chang is coming from Bausch & Lomb and the physician’s office, the physician needs he will have global responsibility for the to first diagnose what your issue is and small company sales structure. So all the sales structure we lead in diagnostic equipment across across all product lines will report under retina, glaucoma, cataract, etc. Then once mentality of focusing, Andy for the ophthalmology/optometry we understand what your issue is, the business. That’s very important; you’ve physician treats you and of course, that’s educating and got that collaborative effort. where Zeiss comes in with intraocular When you go down the direct level lenses and other types of therapies. So [the sticking to a though you will still have [sales] special- breadth of its offering is] where Zeiss has ists, because when you have this many the greatest power. It’s not without its is- consistent message, product lines you can’t just have someone sues, of course, in terms of where we meet opening up his bag and saying, “Which gaps, but it is the most diverse product line and use Zeiss’ global product would you like?” You’d never from the doctor to his or her patient. And sell that way. But it starts to tone at the it’s not only versus AMO, but versus Alcon, structure to top and then you move down collectively. versus Bausch & Lomb, versus every other And when you move down collectively, ophthalmic company. implement that.” you’re ensuring that the representatives are trained and have a good understand- During your time at AMO, you saw Zeiss – Jim Mazzo ing of the other product lines. So when Dr. as a competitor. But did you view it as a Mazzo says to the retina specialist, “Oh, I peer or a company to aspire to? understand you have a glaucoma product I admired Zeiss for a couple of reasons; line,” instead of the retina specialist look- number one is its history. I think in our in- ing at Dr. Mazzo with question marks, he’ll

say, “Of course we do,” and then refer him just need to get everybody on the ship to his colleague who handles glaucoma, understanding their roles and responsi- or vice versa. They’ll know who their col- bilities, and to do that you get the people leagues are in the different fields, that’s toned at the top. I now have Andy [Chang] very important. “We’ll never take running sales, I’m going to get a CMO, Another thing is you need to align we’ve got the three heads of our business service-wise. Think of yourself as a away the speciality sectors in line already, so it’s not really consumer – when you walk into a retail having to make a total restructuring, it’s outlet, you want to make sure it doesn’t of the sales rep or really a philosophical discussion and clear matter what department you’re in, that measurable goals. If you know what at the you have the same service across all prod- the speciality of the end of the day your responsibility is then ucts so that one department is not better you’re going to act against that. in service than the others. We’re aligning physician, but when Zeiss works on an October to October and coordinating our service component time frame, so we’re going to start this at Zeiss, so that when someone comes to a patient is October 1st with these new goals that are fix your machines or upgrade or whatever aligned all the way from the bottom to the the requirement is, it’s across the collec- co-managed, which top and top to the bottom – from sales rep tive product lines and you’re not being to management. handled by different service people. happens across the Then I think that other very important Earlier on when talking about Zeiss’ component is how we speak to our phy- globe, we’re going to extremely broad portfolio being a sicians. We have some inconsistencies strength, you said there were some across the globe in the messaging of our ensure that we have gaps that you’ve identified. What would product lines, but we’re going to make those gaps be? sure that is consistent. I’m going to be alignment from a Again, there’s not one company out hiring a chief medical officer, who will there that has everything, so I would say ensure we’re aligned across our collective service component, we’re going to spend more time in the fol- 30 messaging, so that when we’re talking to lowing areas: glaucoma, dry eye, retina an ophthalmologist, an optometrist or an from an education and presbyopia. Now I don’t want to sit optician, the message is consistent across there and say that cataracts are not impor- the globe. component and from tant, they’re very important. Cataracts are So to answer your overarching question, still the leading cause of blindness outside we need to get internally aligned then a scientific messaging of the US, the number-one surgical proce- when we do that, which we’re getting close dure done in the US, so we’re not going to to, we will roll this out so that when we’re component.” neglect it, we’re really strong there. But if talking to an optometrist who is co-man- you look at those four categories, they are aging a retina or glaucoma patient with an – Jim Mazzo the four leading categories because they’re ophthalmologist in the US, representatives chronic, and no one has nailed it yet. will have the same training, they will have So let’s speak about dry eye. I’m talking the same understanding of our product devices here – we’re a device company, not line, so thus we have continuity across a drug company, at least in the foreseeable our businesses by continuity across our future. We have some product lines but re- customer lines. ally not anything that I would say is at the We’ll never take away the speciality of leading edge to help diagnose dry eye from the sales rep or the speciality of the physi- a diagnostic standpoint than to a point of cian, but when a patient is co-managed, some more treatment, so that’s one. which happens across the globe, we’re go- With presbyopia, we’re just getting in. ing to ensure that we have alignment from We already have a refractive IOL offering a service component, from an education with our trifocal, which is a great prod- component and from a scientific messag- uct, and we obviously have the SMILE, ing component. which is our [small incision lenticule extraction] corneal refractive procedure What sort of time lines are you thinking to rid you of glasses, but there are also of for rolling out this plan? other refractive procedures. It’s not that we’re going to have to com- Glaucoma, we have a great diagnostic pletely turn the ship around; the ship is but as you know there’re devices out there already moving in the right direction. We that can actually help in the treatment of

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glaucoma. And then, as I just said, retina, Devices can actually be synergistic, if really one of our most severe diseases we can say such a word, or can actually today: age-related macular degeneration, substitute where drugs aren’t effective orphan diseases like MacTel [macular because they can’t get to the site or they telangiectasia]. We can diagnose, but “Devices can actually can’t maintain it. I believe we have more we can do a better job of helping any than enough products to go after in de- potential treatments as well from a device be synergistic, if we vices [for these four disease categories] standpoint. before I have to think of pharma. So those will be the four areas where can say such a word, you’re going to see a greater concentra- Let’s say it’s a year from now. How tion, both internally and externally. We’re or can actually would you like to see Carl Zeiss Med- not going to have the “not invented here” itec’s ophthalmology business? syndrome. There are a lot of bright people substitute where I would say there are a couple of basic that don’t work for Zeiss who are entre- principles, and again it would all come preneurs and have great technologies, drugs aren’t effective from our doctors. I think the doctors so if we can’t do it internally, we have the would say the following, that first, we did resources – which are another benefit of because they can’t not change the culture of Zeiss. I love the Zeiss – to acquire it externally. culture of Carl Zeiss, which is dedicated get to the site or they to treating severe diseases with a strong You stressed that Zeiss is very much heritage and a commitment to technology. a device company, but first-line treat- can’t maintain it. One thing I don’t want to do is change ments for conditions like dry eye and things that are strengths. That would be retinal diseases are still very much I believe we have number one. So I don’t want anybody to pharmaceuticals. To achieve your objec- come back to me and say, “Hey, you did tive of making the company a one-stop more than enough things really well but you screwed up the shop for eye care, do you think that Zeiss culture.” I don’t ever want to interrupt this would diversify into pharmaceuticals? products to go after strong culture that I really respect. First off – I’ll never say never – but I think Number two, that the pace of our ac- 31 what you do before you really start to ex- in devices before I tions is faster and the doctor can feel it. pand into one area is make sure you know That when he or she makes a call or needs that one area really well. And I’ll challenge have to think of a service that it is done within the appro- the thought process a bit; let me talk about priate amount of time; we’re a little slow, retinal disease. The only way to treat this pharma.” so I would have feedback, and we’re going terrible disease is by getting to the site, and to measure this, that our pace of service, the site is in the back of the eye. Injections – Jim Mazzo our pace of receptivity, our pace of ac- use a device but we all know that injections knowledgment of technologies is quicker. are costly, they’re not patient-compliant, And then number three – and I think and we also know that after a period of this is the most critical component – that time the patients are coming back. So can we see in our productivity for generating we get a device that is implantable and then new technologies, improvements in our releases a drug? Why not? So that to me is existing technology about every 18 to 24 a [device-based therapy], and devices will months, through software upgrades or actually play a greater role in retina than better designs. And then about every 36 pharmaceutical preparations. months we come out with a new design If you think about glaucoma, it’s really no across all of our product lines. We have longer drugs to a grand degree. You still use some strengths in some [product lines]; we prostaglandins and things of that nature, don’t have that consistently across. And but what’s the greatest thing in glaucoma then I will add one more thing: I think in today? Glaucoma implants. And if you think a year you’re going to see us in a couple about dry eye, you’ve got a diagnosis and a of those four categories that I just talked lot of devices are actually working on the about, probably through acquisitions. meibomian glands. When the meibomian IV004933 glands become clogged that could actually induce dry eye, so now you have a device Comments: Email the author: [email protected] that potentially will open up that gland This article is adapted from Medtech Insight. and allow the natural function of your eye In Vivo brings selected complementary cover- apparatus to work on a consistent basis. age from sister publications to subscribers.

Blockbusters Harvoni GILEAD

Pharmaceuticals Biogen R&D Productivity Return on Investment Big Pharma New Drug Launches ROIFORECASTS SALES Celgene Sovaldi

MID PHARMA Datamonitor R&D 32 R&D TRENDS R&D JAPAN PHARMA JAPAN Gayle Rembold Furbert Rembold Gayle

BY Amanda Micklus id Pharma companies, Excel” - In Vivo, August 2016.) defined by Datamoni- However, reviewing aggregated his- tor Healthcare as those torical and forecasted sales only paints Datamonitor Healthcare’s with annual revenues part of the picture when evaluating R&D measurement of pharma of less than $10 billion, productivity. To take it a step further, it is Mhave done a much better job than their helpful to include the parameter of R&D R&D return on investment Big Pharma and Japan Pharma peers at spending into the calculation to gauge launching new drugs. Based on an analy- success. Based on a new analysis using finds that Mid Pharma sis of new product launches between a return on investment (ROI) index, the 2011 and 2015, a group of successful Mid Pharma peer set is still more produc- companies outperform blockbuster products on the market – tive. For this benchmark, the ROI index on an ROI index. The including Gilead Science Inc.’s Sovaldi was calculated for individual companies, (sofosbuvir) and Harvoni (sofosbuvir/ for the three peer sets (Big Pharma, second in a two-part ledipasvir), and Biogen Inc.’s Tecfidera Mid Pharma and Japan Pharma) and (dimethyl fumarate) – have helped to for the total group. (See online sidebar, series evaluating R&D contribute to an average $6 billion for “Pharma R&D Efficiency: Big, Mid And productivity. Mid Pharma companies collectively in Japan Pharma Peer Sets.”) To determine aggregate commercial sales for the first the ROI index, a company’s average an- seven years of new product launches, in- nual sales of drugs for their first seven cluding both actual and forecasted sales. years on the market – for those drugs In comparison, the Big Pharma peer set that launched between 2011 and 2015 and realized an average $4 billion, and Japan for which sales data were available in Pharma, $2 billion. (Also see “Pharma Datamonitor Healthcare’s PharmaVitae R&D Efficiency: Mid-Sized Companies Analytics – was divided by the average

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annual amount spent on R&D. The R&D both the Japan Pharma and Big Pharma $4 billion in average annual sales was investment was calculated by averaging peer groups, which had ROI indexes of supported by nine drugs in its sample, an aggregated five years’ worth of R&D 0.3 and 0.2, respectively. The Mid Pharma including Harvoni, Sovaldi, Genvoya spend with a four-year offset prior to group outperformed the other peer sets (elvitegravir/cobicistat/emtricitabine/ the launch year, to account for the time with an ROI index of 1.9, averaging an tenofovir alafenamide) and Stribild between the late-stage development and R&D investment of $584 million and sales (elvitegravir/cobicistat/emtricitabine/ launch of the drug. This method presents of $1 billion. (See Exhibit 1.) tenofovir disoproxil fumarate). In com- some limitations, including the fact that parison, Gilead spent only an estimated sales forecasts were not available for all Gilead And Biogen Led In $598 million on R&D. Biogen’s figures of the approved drugs. Sales of some ROI Indexes included four products led by multiple products are so low, they may not be The Mid Pharma peer set includes sclerosis treatment Tecfidera, and the reported in the company’s financials, multiple companies with an ROI index company realized an average $3 billion in and therefore the seven-year aggregates greater than 1.0, mainly due to the fact sales versus $999 million in R&D invest- for some products are not complete. R&D that Mid Pharma companies’ average ment. (See Exhibit 2.) expenditures are not available at the R&D spending is a lot less than the Big There were other Mid Pharma com- drug level, so company-level R&D figures Pharma and Japan Pharma peer sets. Mid panies that had high ROI indexes but were used. Pharma’s average annual R&D spend was not as many products in their samples. Across all three peer groups, the ROI $584 million, compared with $4 billion Actelion Pharmaceuticals Ltd.’s and index was 0.3, with an average of $3 bil- for Big Pharma and $1 billion for Japan Celgene Corp.’s ROI indexes of 2.0 and lion in R&D spend per year in comparison Pharma. The Mid Pharma group’s average 1.8, respectively, each came from only with an average of $870 million annually annual sales were also higher than the a few drugs, but most were, or are fore- over the first seven years on the market other peer sets. Gilead and Biogen led in casted to be, top sellers. Celgene’s prod- for all products launched between 2011 Mid Pharma with ROI indexes of 6.0 and ucts included Pomalyst (pomalidomide) and 2015 (for which sales data were avail- 2.6, respectively. Both firms had multiple and Otezla (apremilast), which together able). The average for the three peer sets product launches that produced or are yielded an average $1 billion in annual collectively was slightly above that of forecasted to produce high sales. Gilead’s sales, whereas the company spent $596

Exhibit 1 Mid Pharma Peer Group Outperforms In ROI Index, 2011-2015

2.5 Notes: Return on investment (ROI) index is calculated by dividing a company’s average annual sales of all drugs launched over their first seven years on the market – for those drugs launched between 2.0 2011 and 2015 for which sales data were available – by the average annual amount spent on R&D, with R&D calculated by

x averaging an aggregate five years’ worth e d

n of R&D spend with a four-year offset prior 1.5 to the launch year. The chart excludes CSL and Merck KGAA in the Mid Pharma group because sales data were not available. The Japan Pharma group does not include Investment I

n Mitsubishi Tanabe because sales data O were not available, and does not include

n 1.0 r

u Otsuka because R&D figures prior to 2009 t

e were not available. R

Source: Datamonitor Healthcare | Pharma Intelligence, 2016 0.5

0.0 Mid Pharma Japan Pharma Big Pharma All Peer Sets

Exhibit 2 ROI Indexes For Big Pharma, Mid Pharma And Japan Pharma Companies: Gilead And Biogen Stand Out, 2011-2015

4000 t I Gilead I Lundbeck I AbbVie I Novartis e

k r I Biogen I Bristol-Myers Squibb I Eli Lilly I Merck & Co a

M I I I I Actelion Bayer Takeda Roche

e 3500 h I Celgene I Baxter/Baxalta I Shionogi I Novo Nordisk T

n I Shire I Sano I Johnson & Johnson I Daiichi Sankyo O

s r I Astellas I GlaxoSmithKline I AstraZeneca I Dainippon Sumitomo

a 3000 e

Y I I I I Allergan Amgen Pzer Eisai n

e I

v Teva e

S 2500

t s r i F

r o

F 2000

s e l a S

y 1500 n Launched Between 2011-15) ($m) s a g p u r m D o

C r

l o 1000 F a ( u n n A

g 500 a r e v A 00 1000 2000 3000 4000 5000 6000 7000 8000 34 Average Annual R&D Spend For Company (With Four-Year O set From Launch Year Of Drug) ($m)

Notes: The chart excludes CSL and Merck KGAA in the Mid Pharma group because either the sales data were not available, or the drug’s sales for those companies were counted in the partner’s totals, as determined by Datamonitor Healthcare. The Japan Pharma group does not include Mitsubishi Tanabe because either the sales data were not available, or the drug’s sales were counted in the partner’s totals, as determined by Datamonitor Healthcare. The Japan Pharma group does not include Otsuka because R&D figures prior to 2009 were not available.

SOURCE: Datamonitor Healthcare | Pharma Intelligence, 2016

million on R&D. Actelion’s pulmonary At 0.1, Novo Nordisk’s ROI index was some of these companies had several arterial hypertension offerings Opsumit one of the lowest in the Big Pharma peer profitable launches prior to the 2011–15 (macitentan) and Uptravi (selexipag) set. Merck & Co Inc.’s seven-year aggre- time period that were examined. While contributed to the $685 million in aver- gated sales of billion-dollar drugs from its those products are more mature, they are age annual sales; Actelion’s R&D figure sample included Bridion (sugammadex), still very much commercially viable, and in comparison was $343 million. Keytruda (pembrolizumab) and Victrelis allow their developers to spend money in (boceprevir). In total, including the rest other areas, such as in-licensing (John- High R&D Spending Led To Low of the drugs in its sample, the firm had an son & Johnson, Pfizer and Roche were ROI Indexes For Several Big annual average of $584 million in sales among the top five in the Big Pharma peer Pharma Companies and spent $5 billion on R&D, giving it an set in terms of in-licensing deal volume Many companies had very high R&D ex- ROI index of 0.1. Johnson & Johnson, from 2011–15). penditures that factored into lower ROI Pfizer Inc. and Roche each spent an IV004934

indexes, despite the presence of multiple average $7 billion to $8 billion on R&D, Comments: blockbusters in their portfolios. Novo the highest among any company in any Email the author: [email protected] Nordisk AS spent an average of $8 bil- peer set, and had comparatively lower lion on R&D annually, but only averaged average annual sales, giving these firms Editor’s note: This article is excerpted $681 million in annual sales from its three low ROI indexes too. For these firms, this from R&D Trends 2016: Mid Pharma big sellers, Tresiba (insulin degludec), indicates that they may not have been as Peer Set Excels At R&D Productivity, NovoEight (turoctocog alfa) and Ryzodeg successful with recent launches as other published in August 2016 by Informa’s 70/30 (insulin aspart/insulin degludec). companies in the peer sets. However, Datamonitor Healthcare.

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

Company Changes EKLUND, Mike To: DJO Global Inc., ❚ Jeremy Barton ❚ David Pass COO & CFO (September) CMO, eFFECTOR COO, Gelesis ALBRIGHT, Charles, PhD From: Dell/EMC, To: Editas Medicine Inc., SVP, Value Creation & CSO (August) Integration Mgmt. From: Bristol-Myers Squibb Co., Phone: 760-727-1280 VP, Genetically Defined Diseases & Genomics Phone: 617-401-9000 FOSTER, Jonathan P. To: Moleculin Biotech Inc., EVP, CFO (August) BAERTSCHI, Gabriel From: InfuSystem Holdings Inc., To: Grunenthal Group, EVP, CFO ❚ Suzanne Bruhn ❚ Andrew Phillips Phone: 713-300-5160 Chairman & CEO (October) Director, Pliant Therapeutics President & CSO, C4 Therapeutics From: AstraZeneca PLC, Pres., Japan Phone: +49 241 5690 GARDNER, Humphrey A.R., MD To: Karyopharm Therapeutics Inc., BARTON, Jeremy, MD SVP, Clinical Dev. (September) To: eFFECTOR Therapeutics Inc., From: AstraZeneca PLC, 36 CMO (September) Clinical VP, From: Pfizer Inc., VP, Head, Translational Medicine Oncology Early Dev. & Phone: 617-658-0600 Clinical Research Phone: 858-925-8216 ❚ ❚ HOFFMAN, Robert Anthony Millar Susan Sender VP, Operations, Minnetronix Chief Clinical Officer, Amedisys To: Innovus Pharmaceuticals Inc., BRADRICK, Brittany EVP, CFO (September) To: Insulet Corp., VP, From: AnaptysBio Inc., CFO Strategy & Corp. Dev. (September) Phone: 858-964-5123 From: Abbott Diabetes Care, Dir., Bus. Dev. & Alliance Mgmt. Phone: 978-600-7000 HUANG, Jane, MD To: BeiGene (Beijing) Co. Ltd., CMO, Hematology (September) CASCIANO, Tony From: Acerta Pharma BV, To: AMAG Pharmaceuticals Inc., VP, Head, Dev. ❚ ❚ SVP, Sales & Mktg., Phone: +86 10 58958000 Melissa Moore Karoline Shair Hematology & Oncology CSO, Moderna Therapeutics VP, Legal & Chief IP Counsel, (September) Forma Therapeutics From: Sanofi, Head, Mktg., ISACSON, Ole, MD General Medicine To: Pfizer Inc., SVP, CSO, Phone: 617-498-3300 Neuroscience Research Unit (September) From: Harvard Medical School, COUTURIER, Christophe Professor, Neurology To: OvaScience Inc., Phone: 212-733-2323 CFO (September) From: Merck KGAA, SVP, General Mgr. Phone: 617-500-2802 ❚ Hugh O’Dowd ❚ Todd Shegog CEO, Neon Therapeutics CFO, Synlogic

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com ON THE MOVE ❚

LEMIEUX, Stephen L. O’DOWD, Hugh To: Cipher Pharmaceuticals Inc., To: Neon Therapeutics, CFO (September) CEO (September) From: Nuvo Pharmaceuticals, From: Novartis AG, VP, CFO Country Pres. & General Mgr., Phone: 905-602-5840 UK & Ireland Phone: 617-337-4701

MCDONALD, Damien ❚ Jeremy Barton ❚ David Pass To: LivaNova PLC, COO (October) OLSEN, Russell CMO, eFFECTOR COO, Gelesis From: Danaher Corp., To: Derma Sciences Inc., Group Exec. & Corp. VP Pres., Advanced Wound Care Phone: +44 203 786 5275 (August) From: BioD LLC, Pres. & CEO Phone: 609-514-4744 MILLAR, Anthony To: Minnetronix Inc., VP, Operations (August) PAOLINO, Sean From: Greatbatch Inc., To: BioNano Genomics Inc., Exec. Dir., Operations VP, Finance (September) Phone: 651-917-4060 From: FP&A Consultant ❚ Suzanne Bruhn ❚ Andrew Phillips Phone: 858-888-7600 Director, Pliant Therapeutics President & CSO, C4 Therapeutics MONAHAN, Rob To: Akorn Inc., PASS, David, PharmD SVP, Corp. Dev. (August) To: Gelesis Inc., From: Walgreens Boots Alliance Inc., COO (September) VP, Mergers & Acquisitions From: Boehringer Ingelheim GMBH, Phone: 800-932-5676 VP, Mktg., Diabetes Phone: 617-482-2333 37 MOODY, Philip K. To: PaxVax Inc., PENG, Stanford, MD, PhD ❚ Anthony Millar ❚ Susan Sender CFO (August) To: Alpine Immune Sciences Inc., From: BTG PLC, EVP, CMO (September) VP, Operations, Minnetronix Chief Clinical Officer, Amedisys CFO, North America From: Stemcentrx Inc., Phone: 858-450-9595 CMO, Head, Dev. Phone: 206-441-5062

MOORE, Melissa J., PhD To: Moderna Therapeutics LLC, PETERSON, Amy C., MD CSO (September) To: BeiGene (Beijing) Co. Ltd., From: Howard Hughes Medical Institute, CMO, Immuno-oncology (August) Chair, Cancer Research & From: Medivation Inc., Investigator VP, Clinical Dev. Phone: 617-714-6500 Phone: +86 10 58958000 ❚ Melissa Moore ❚ Karoline Shair CSO, Moderna Therapeutics VP, Legal & Chief IP Counsel, Forma Therapeutics MOZAYENI, Cyrus D., MD SACKS, Natalie R., MD To: Oncorus Inc., To: Aduro Biotech Inc., Pres. & CBO (September) CMO (September) From: bluebird bio Inc., From: Advisor, VP, Global Head, Development Strategy Bus. Dev. & Alliance Mgmt. Phone: 510-848-4400 Phone: 857-320-6402

❚ Hugh O’Dowd ❚ Todd Shegog CEO, Neon Therapeutics CFO, Synlogic

October 2016 | In Vivo ❚ ON THE MOVE

SANDOVAL, Elisabeth A. WHOLIHAN, Edward BOSE, Arindam, PhD To: Alder BioPharmaceuticals Inc., To: Allena Pharmaceuticals Inc., To: Dyadic International Inc., Chief Commercial Officer CFO (September) Director (August) (September) From: Medical Specialties Distributors, Phone: 561-743-8333 From: Kythera Biopharmaceuticals Inc., CFO Chief Commercial Officer Phone: 215-791-0105 Phone: 425-205-2901 BRUGHERA, Marco, DVM To: Fennec Pharmaceuticals Inc., WILKE, Susanne, PhD Director (August) SCHROFF, Matthias, PhD To: Neurotrope Inc., Phone: 919-636-4530 To: Vaximm AG, CEO (September) CEO (September) From: Mologen AG, CEO From: CrossBridge International, Phone: +41 61 271 2042 Pres. & CEO BRUHN, Suzanne, PhD Phone: 973-242-0005 To: Pliant Therapeutics Inc., Director (August) SENDER, Susan, RN Phone: 650-481-6716 To: Amedisys Inc., VANDERPUTTEN, Dale, PhD SVP, Chief Clinical Officer To: Nutra Pharma Corp., (September) CSO (August) DAVIDSON, Aaron From: Kindred at Home, From: Omnia Biologics Inc., To: Nutrinia, Director (August) SVP, Chief Clinical Officer CEO & CSO Phone: +972 37262262 Phone: 800-467-2662 Phone: 954-509-0911

FISCHER, Seth H.Z. SHAIR, Karoline, PhD ZADNO, Reza, PhD To: Marinus Pharmaceuticals Inc., To: Forma Therapeutics Holdings LLC, To: Avedro Inc., Director (September) VP, Legal & Chief IP Counsel CEO (September) Phone: 484-801-4670 (August) From: Visiogen Inc., From: Takeda Pharmaceuticals Pres. & CEO 38 International Co. Ltd., Phone: 781-768-3400 GRANGER, Elder, MD VP, IP Region Head Phone: 617-679-1970 To: Berg Pharma Inc., Director (August) Directors Phone: 617-588-0083 SHEGOG, Todd E. To: Synlogic Inc., ALEXANDER, Robert, PhD HEGE, Kristen M., MD CFO (September) To: Allena Pharmaceuticals Inc., From: Forum Pharmaceuticals Inc., To: Mersana Therapeutics Inc., Director (September) Director (September) SVP, CFO Phone: 215-791-0105 Phone: 617-401-9975 Phone: 617-498-0020

BANERJI, Shumeet, PhD VIBOCH, Elena JONES, Suzy To: Berg Pharma Inc., To: Carmot Therapeutics Inc., To: Calithera Biosciences Inc., Director (August) Director (August) Dir., Bus. Dev. & Operations Phone: 617-588-0083 (August) Phone: 650-870-1000 From: FLX Bio Inc., Senior Mgr., Corp. Dev. & Strategy BARKER, David, PhD Phone: 510-828-0102 MANDEL, Victor To: BioNano Genomics Inc., To: MYOS RENS Technology Inc., Chairman (September) Director (September) WEINTRAUB, Scott Phone: 858-888-7600 Phone: 973-509-0444 To: Concert Pharmaceuticals Inc., VP, Commercial & Product Strategy BLECH, Isaac (September) NADAV, Eran, PhD From: Forum Pharmaceuticals Inc., To: Diffusion Pharmaceuticals Inc., To: Nutrinia, Director (August) VP, Product Strategy & Mktg. Director (August) Phone: +972 37262262 Phone: 781-860-0045 Phone: 434-220-0718

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com ON THE MOVE ❚

NESTLER, Eric, MD, PhD KENNEY, W. Larry, PhD ROBINSON, Warren To: Berg Pharma Inc., To: Flex Pharma Inc., To: BioNano Genomics Inc. Director (August) Scientific Advisor (August) New Title: VP, Global Sales & Mktg. Phone: 617-588-0083 Phone: 617-874-1821 (September) Previous Title: VP, Commercial, North America WILLIAMS, Patrick F. KLOHS, Wayne, PhD Phone: 858-888-7600 To: Miramar Labs Inc., To: Aeglea BioTherapeutics Inc., Director (August) Scientific Advisor (September) Phone: 408-940-8700 Phone: 512-942-2935 STUHLMILLER, David F.E., MD To: Air Methods Corp. New Title: CMO (September) ZACCARDELLI, David, PharmD VANDER HEIDEN, Matthew, MD, PhD Previous Title: Physician Advisor To: Cempra Inc., To: Aeglea BioTherapeutics Inc., Phone: 303-792-7400 Director (August) Scientific Advisor (September) Phone: 919-576-2306 Phone: 512-942-2935 WARD, Scott R. To: Cardiovascular Systems Inc. Advisors VELLAS, Bruno, MD, PhD New Title: Chairman & CEO (August) To: Accera Inc., Previous Title: Chairman, Scientific Advisor (September) Interim Pres. & CEO COX, Bryan F., PhD Phone: 303-999-3700 Phone: 651-259-1600 To: Mount Tam Biotechnologies, Scientific Advisor (September) Phone: 415-209-2000 VON HOFF, Daniel D., MD Resignations To: Aeglea BioTherapeutics Inc., Scientific Advisor (September) CUMMINGS, Jeffrey, MD, ScD Phone: 512-942-2935 CONNORS, Kevin To: Accera Inc., From: Cutera Inc., Scientific Advisor (September) Pres. & CEO (August) 39 Phone: 303-999-3700 Promotions Phone: 415-657-5500

FLAHERTY, Keith, MD COHARD-RADICE, Marielle, MD DE CLARA, Maximilian To: Aeglea BioTherapeutics Inc., To: Daiichi Sankyo Inc. From: CEL-SCI Corp., Scientific Advisor (September) New Title: EVP, Global Head, Chairman & Pres. (September) Phone: 512-942-2935 Dev. (September) Phone: 703-506-9460 Previous Title: VP, Clinical Dev. Operations, Pharma Dev. FRANKEL, Arthur, MD Phone: 973-359-2600 To: Aeglea BioTherapeutics Inc., Scientific Advisor (September) Phone: 512-942-2935 PHILLIPS, Andrew, PhD To: C4 Therapeutics Inc. New Title: Pres. & CSO (September) Previous Title: CSO Phone: 202-421-7994

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October 2016 | In Vivo ❚ Dealmaking

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Dealmaking column is a ❚ Dealmaking 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 September 2016 categorized by type – Acquisition, Alliance, or Financing. Strategic Transactions is updated daily with in-depth deal analysis, structural and financial terms, and links to SEC-filed contracts. For information about access please contact Customer Care at 800-332-2181 or [email protected]

❚ In Vitro Diagnostics IRhythm files to go public BI and ViraTherapeutics collaborate for oncolytic virus platform; BI has option to Mergers & Acquisitions Lantheus Holdings nets $39.9mm via FOPO acquire ViraTherapeutics Pharos Capital takes majority interest in Weight loss-focused medical device Cardinal Health and Navidea sign letter Alere’s TechLab company Obalon Therapeutics files for IPO of intent for Lymphoseek rights Danaher to pay $4bn for Cepheid Public offering nets $Cdn9.5mm for Titan Medical Cerecor gets rights to early-stage Financings epilepsy project from Lilly Cancer Genetics brings in $5.1mm ❚ Pharmaceuticals Circle, Pfizer pen second agreement for through registered direct offering macrocyclic peptides Mergers & Acquisitions Molecular diagnostics company CareDx Daiichi Sankyo and ZymeWorks enter nets $8.4mm in FOPO Allergan builds NASH business through $50mm Akarna buy immuno-oncology cross-licensing deal Genetic testing company Fulgent Allergan pays $60mm in cash plus Genetics nets $35.2mm in IPO Maruho licenses Japanese rights to potential earn-outs for RetroSense Dermira’s DRM04 for hyperhidrosis Genetic Signatures raises $3.9mm in Allergan acquires NASH player Tobira Dermira options rights to three of private placement; expects to raise for $1.695bn $6.4mm more in second tranche Takeda’s early-stage dermatology 40 Allergan PLC acquires autoimmune- projects focused Vitae for $639mm ❚ Medical Devices Tracon could get rights to two Janssen Apollo Endosurgery reverse merges oncology candidates Mergers & Acquisitions with Lpath for public listing J&J shells out $4.3bn in cash for Abbott Kyorin to co-promote Nasonex in Japan Medical Optics Eleven acquires Viventia Bio; moves with MSD KK into cancer space GN Store Nord AS divests its GN PaxVax gets right to Leukocare’s SPS Otometrics division to Natus Medical Horizon pays $800mm to acquire platform orphan drug company Raptor SynCardia scooped up by Versa Capital TeneoBio licenses Ligand’s OmniFlic Management Alliances antibody engineering technology AbbVie gets antibodies from BioArctic Alliances Tarveda pens agreement for Madrigal’s Colibri Heart Valve, Venus Medtech Arrowhead partners two programs with HSP90 drug conjugate program create Asian joint venture Amgen Menarini to co-market Orion’s Terumo gets distribution rights to Pfizer gets option to AnTolRx’s lead EasyHaler CytoSorbent’s CytoSorb in France and project for Type I diabetes Scandinavia Mitsubishi Tanabe to market 14 ex- Aralez gets Zontivity rights from Merck Novartis drugs in Japan for Sun Intuitive Surgical and Fosun invest Basilea licensed Asahi Kasei Pharma Pfizer gets exclusive option to $100mm in new robotic-assisted rights to isavuconazole in Japan surgical device JV OncoImmune’s anti-CTLA4 antibodies Grupo Biotoscana gets Latin American Verily and Sanofi create diabetes- rights to Basilea’s Cresemba and Zevtera Pediapharm gets global license to Relaxa focused JV Onduo Unimedic gets Nordic rights to Basilea’s Pharmatronic could license Korean Financings antifungal and antibiotic rights to RedHill’s Rizaport Acelity sells $1.75bn of its senior licenses ’ Transcend Teva agrees to develop and commercialize secured notes Vaccinex biOasis technology for neuro drug delivery Regeneron’s fasinumab for pain Cogentix privately raises $25mm BioNTech, Genentech collaborate on SciClone gets mucositis therapy rights Histogenics gets $30mm via private personalized mRNA cancer vaccines from Soligenix placement Medigene and bluebird partner for TCR Luoxin gets Chinese rights to Teikoku’s Insulet sells $345mm in convertible debt immunotherapies non-alcohol docetaxel

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 41 invivo.pharmamedtechbi.com - ❚ ’s

n Vivo in 2002. . . The company . (AMO). (Sep.) Inc (Australian mo- toric intraocular Allergan td . Dealmaking for a clinical utility October 2016 | I October L (NGS and genetic (NGS and genetic Inc is paying $4.325bn in $4.325bn paying is cataract laser system), Tecnis Allenex AB Allenex ’s surgical ophthalmology ’s Abbott Laboratories Inc. Laboratories Abbott AlloSure . Catalys (molecular diagnostics for trans- (molecular diagnostics ignatures & Johnson & Pfizer Genetics S Laboratories cal Devices Medical Genetic Johnson Abbott Dx Inc CareDx Fulgent five-year warrants to buy 1.38mm shares at warrants to buy 1.38mm five-year the place- & Renshaw was $2.25. Rodman (Sep.) ment agent. & Rodman Banks/Advisors: Investment Group Inc. Renshaw Capital lenses and will use the proceeds to support the continuedwill use the proceeds to development of testing) netted $35.2mm in its IPO of 4.2mm shares at $9 (below its planned $12-14 range). (Sep.) Investment Banks/Advisors: BTIG LLC; Credit Suisse Group; Piper Jaffray & Co.; Raymond James & Associates Inc. tory approvals and for product development costs for its pipeline. (Sep.) Investment Banks/Advisors: Bell Potter Securities lecular diagnostics company) raised $3.9 lecular diagnostics company) raised $3.9 (A$5.1mm) in an oversubscribed private placement of 10.9mm new shares at $0.36 (A$0.47; 18% discount to prior 10-day use will company The average). trading the proceeds for commercial expansion in regula FDA for US, the and EU, the Australia, trial and commercialization. (Sep.) trial and commercialization. Piper Jaffray & Co.Investment Banks/Advisors: Since then it has significantly boosted Since then it has significantly boosted its portfolio through several acquisitions including plant patients) netted $8.4mm in a follow-onplant patients) netted common shares atpublic offering of 2.25mm company raised ad- $4. Earlier in the year the supportto placement private a in funds ditional its acquisition of ❚ & Acquisitions Mergers Inc. Optics Medical Abbott Genetic Signatures Ltd. Genetic Signatures Inc. Care Vision & Johnson Johnson Inc. Optics Medical Abbott Johnson & Johnson CareDx Inc. CareDx Inc. Genetics Fulgent Formerly known as Advanced Medical Op- tics, AMO spun off from cash to acquire to cash business, laser vision correction specialist Visx, optical measurement firm WaveFront Sciences, and Lasik surgery systems de- got into Abbott’s AMO veloper IntraLase. Abbott $2.86bn. of cost a at 2009 in hands has since added to AMO’s offerings with the purchase of intra-ocular lens maker Visio- OptiMedica.firm device ophthalmic and gen AMO operates three business segments- ( -cataract surgery

- - Alere Inc. Alere GeneXpert Radiometer from , and . (DNA-based diagnos- . (Sep.) Inc Leica systems to test for Car- , . TechLab Inc. TechLab is paying $4mm in cash ($53 . Xpert orp Cepheid . C technology enables accurate test Inc Genetics . Investment Banks/Advisors: Gold Banks/Advisors: . Investment Inc anaher epheid ics Vitro Diagnost In Cancer D C Alere Lab Tech man Sachs & Co. (Cepheid) line, which performs PCR-based genetic line, which performs PCR-based genetic Danaher minutes. 90 than less in testing was attracted to this product because of its - ability to provide rapid results, accommo date over 20 tests without having to adjust the instrument, and its capacity to scale to any lab’s requirements. Cepheid also sells various and TechLab’s founders Dr. Tracy Wilkins and TechLab’s founders will re- of whom Lyerly, both Dr. David and and hold a minority main with the company stake. (Sep.) Pharos Capital will Three members from while former Alere ex- join TechLab’s board, Daniel member board ecutive and TechLab as CEO. Following Delaney takes the helm will continue as the the transaction, Alere of TechLab’s prod- worldwide distributor rapid non-invasive ucts. TechLab develops disease. Itsdiagnostics for gastrointestinal bapenem resistance, Clostridium difficile, norovirus, methicillin-resistant S. aureus, Enterococcus. vancomycin-resistant and Danaher will sell the products using its global 3,000-strong sales team. It will fund the acquisition using available cash plus 2015 year-end For debt. new of issuance Cepheid reported $538.6mm in sales and at the end of June 2016 it had $100.3mm in cash and equivalents. It anticipates 2016 revenues of between $618mm and $635mm. The company will join Danaher’s $5bn diagnostics segment, which includes tics) netted $5.1mm through a registered atdirect offering of 2.75mm common shares $2 (a 7% discount). Investors also received per share, a 52% premium) to acquire fellow public firm Beckman Coulter Beckman Financings Diagnostics /In Vitro Quik Chek Quik Pharos Capital Group has taken a control- Group has taken Pharos Capital ling interest in ❚ & Acquisitions Mergers Cancer Genetics Inc. Genetics Cancer Danaher Corp. Danaher Medical ficile bacteria, E. coli, inflammatory bowel bacteria, E. coli, ficile disease, and irritable bowel syndrome. tech- its of use explore to TechLab seeks nology in creating tests for other diseases. results in less than a half hour. Applications dif C. include diagnostics company’s the for The transaction price includes debt and The transaction price includes debt and acquired cash. Cepheid offers a wide range of molecular diagnostics. Leading its portfolio is the fully automated Array Aquinox Agios nets to raise nets CRISPR CRISPR nets $24.3mm Versartis Capricor Aerie Novan completes $164mm nets $28.2mm through files for IPO nets $61mm through public closes $61.4mm IPO on Nasdaq closes $61.4mm IPO on expects to receive $25mm via Oxford BioMedica Oxford nets $9.4mm through public nets $9.4mm through nets $9.2mm via FOPO nets $9.2mm via RDO nets $6.9mm through private gets DKK143mm via PIPE nets $285mm via FOPO nets $5.5mm through registered nets $128mm through public offering Xis company an Informa Inc., Information, Business ©2016 Informa enon Pharmaceuticals in FOPO private placements Therapeutics direct offering stock sale BioPharma Ave Zealand SAGE Therapeutics SAGE Sarepta Rexahn Proteostasis Matinas $10.8mm in FOPO Genome editing company CytoDyn Design Immune Capricor BioCryst Caladrius Public offering nets $162mm for Follow-on offering nets $70.8mm for Follow-on offering nets $108mm for Financings Immune AC Actinium Catabasis Pharmaceuticals Catabasis FOPO nets $56.4mm for placement of preferred shares Dermatology-focused $41.9mm in Nasdaq IPO Gene delivery platform technology company X RDO brings in $1mm for public offering stock sale FOPO nets $71.3mm for Midcap Financial provides $23mm loan to £10mm in placing and subscription public offering ❚ Dealmaking

laser refractive surgery (STAR S4 IR excimer Arizona and its president and CEO will range of applications. In December 2014, laser system for Lasik), and consumer eye continue in these roles. The company’s key CytoSorbents granted Fresenius Medical health (Blink eye drops, and Complete lens- product is the SynCardia temporary Total Care exclusive distribution rights in France, cleaning solutions). The company will be Artificial Heart (SynCardia TAH-t), which is Poland, Sweden, Denmark, Norway, and incorporated into J&J’s Johnson & Johnson an implantable system designed to replace Finland, and seven months later TekMed Vision Care division, which sells leading the functionality of both the left and right received a license to sell the device in Aus- contact lens brand Acuvue. AMO generated ventricles of the heart as well as all four tralia and New Zealand. sales of $1.13bn in 2015. Abbott is divest- heart valves. The 70cc SynCardia TAH-t is ing the company to focus on growing its the first and only total artificial heart ap- Fosun-Intuitive Surgical JV cardiovascular device and clinical diagnos- proved in the US, Canada, and Europe for Intuitive Surgical Inc. tics businesses. The sale of AMO provides use as a bridge to heart transplantation. Fosun International Ltd. some much-needed cash for Abbott, which The company is also working on a 50cc ver- Shanghai Fosun Pharmaceutical Group earlier this year agreed to purchase Alere sion for underserved populations including Co. Ltd. for $5.8bn and St. Jude Medical for $25bn. women and adolescents. SynCardia also Intuitive Surgical Inc. and Shanghai Fosun sells the Freedom portable driver, the first Pharmaceutical Group Co. Ltd. are together Natus Medical Inc. wearable power supply for the TAH. The investing $100mm in a new joint venture GN Store Nord AS that will develop, manufacture, and sell GN Otometrics AS firm filed to go public in August 2015 but withdrew the IPO attempt two months later. robotic-assisted catheter-based medical Natus Medical Inc. paid $145mm in cash devices. (Sep.) to acquire the GN Otometrics AS (hearing Alliances The JV will be based in Shanghai and develop assessment and screening) division of GN /Medical Devices devices based on Intuitive’s intellectual prop- Store Nord AS, a diversified global provider erty. (Intuitive designed and markets the da of medical, professional, and consumer Colibri Heart Valve LLC audio devices. To finance the deal, Natus Colibri-Venus Medtech JV Vinci robotic surgery system, which is distrib- concurrently entered into a $150mm revolv- Venus MedTech (HangZhou) Inc. uted in China by Fosun’s Chindex Medical ing credit agreement with JP Morgan Chase Colibri Heart Valve LLC and fellow private Ltd. division.) The venture’s devices will be and Citibank. (Sep.) cardiovascular device firm Venus Medtech developed for the early diagnosis and treatment of lung cancer. Distribution in China will Hearing instruments (hearing aids) and (Hangzhou) Inc. are establishing a joint venture to develop and commercialize structural be the responsibility of the JV, while Intuitive diagnostic equipment (including ear-related handles distribution in the rest of the world. computerized audiology and hearing- heart valve products for the Chinese and instrument fitting equipment) make up 54% emerging Asian markets. (Sep.) Onduo and 8% of parent company GN Store Nord’s The JV will gain access to technologies and Sanofi revenues, respectively, while consumer- IP from Colibri and Venus as well as sig- Verily Life Sciences 42 nificant financial resources from Venus. It use communications and sound makes up Sanofi and Google’s Verily Life Sciences will first focus on creating next-generation the other 38%. Part of GN Store Nord’s GN created a joint venture Onduo, which will Hearing AS business, Otometrics--which pre-packaged, ready-for-use, transcatheter focus on developing integrated treatment heart valve (THV) systems that incorporate brings in approximately $110mm in annual and monitoring solutions for patient with Colibri’s dry tissue technology and balloon revenues--manufactures hearing diagnos- diabetes. (Sep.) tics and balance assessment equipment, expandable THV and delivery system, and disposables, and software. Sold to hear- the Venus A-Valve self-expanding aortic Verily and Sanofi will together invest ing and balance care specialists in over heart valve and delivery catheter. The new $500mm in the JV, which will operate inde- 70 countries, Otometrics’ computer-based firm will be funded to conduct clinical and pendently but have the opportunity to glean audiological, otoneurologic, and vestibular regulatory activities necessary for gain- resources from its creators. (Onduo can also instrumentation includes well-known indus- ing Chinese and CE mark approvals for explore outside partnerships; its develop- try brands such as Aurical (otoscopes and the devices. Clinical trials are expected to ment work is not exclusive based on the hearing aid fitting equipment),ICS (vestibu- commence by year end. Colibri keeps all relationships with Verily and Sanofi.) With lar testing and balance assessment tools), technology and commercialization rights the first product expected on the market and Madsen (audiometers, tympanometers, for the joint venture’s products in North within two-to-three years, Onduo CEO Dr. and optoacoustic emissions testing sys- American, Europe, Japan, Australia, and New Joshua Riff envisions using Sanofi’s drug tems). The Otometrics’ product lines will Zealand. As part of the agreement, Venus expertise and Verily’s knowledge of minia- complement Natus’ hearing assessment Medtech invested an undisclosed amount ture electronics, analytics, and consumer portfolio, including its Bio-logic brand of in Colibri’s Series C financing and will pro- software development to come up with solu- diagnostic equipment and the Algo line of vide additional yearly funding to support tions that will allow Type II diabetes patients newborn auditory screening systems. The Colibri’s operations. (and eventually Type I patients as well) the divestment will enable GN Hearing (formerly opportunity to better manage their disease known as ReSound) to focus on its hearing CytoSorbents Corp. with products that join medicine with tech- instruments, mainly hearing aids, through Terumo Corp. nology, such as an insulin pen that connects Terumo Cardiovascular Systems Corp. its Interton and Beltone businesses. As to a continuous glucose monitoring (CGM) part of the deal, Natus will help develop CytoSorbents Corp. licensed Terumo Car- device to optimize proper dosing, or a drug and commercialize the Otoscan, and pay diovascular Systems Inc. exclusive rights delivery pump, medication, and CGM con- GN Hearing future royalties on the digital, to distribute its CytoSorb device in France, nected together. The joint venture is the 3D ear scanning device expected to be Sweden, Denmark, Norway, Finland, and Ice- second in as many months for Verily. In launched next year. land for cardiac surgery applications. (Sep.) August, it announced the creation of Galvani The CytoSorb cardiopulmonary bypass pro- Bioelectronics with GlaxoSmithKline; Ver- SynCardia Systems Inc. cedure pack is designed for intra-operative ily and GSK will contribute about $700mm Investment firm Versa Capital Management use during cardiac surgery. The CE-marked (with GSK as the majority owner) to Galvani, acquired cardiovascular device maker Syn- product is an extracorporeal cytokine ad- which will develop bioelectronic medicines Cardia Systems Inc. (Sep.) sorber for reducing the excessive produc- initially for inflammatory, metabolic, and SynCardia’s headquarters will remain in tion of inflammatory mediators in a wide endocrine diseases.

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 43 invivo.pharmamedtechbi.com , - ❚

Retro LLC for $60mm for . Wayne State State Wayne (cyclosporine). for $1.695bn, for $1.695bn, Inc . Allergan will also ing Dealmak October 2016 | InOctober Vivo Tobira Therapeutics Tobira bought publicly tradedpublicly bought Restasis RetroSense for $639mm. Investment for $639mm. Investment Therapeutics is paying $60mm in cash up PLC PLC ’s Zhuo-Hua Pan, PhD. Dr Pan ’s Zhuo-Hua Pan, PhD. Dr Pan Vitae ense Therapeutics Allergan PLC Allergan S obira Allergan Retro Allergan T Sense Therapeutics Sense Therapeutics LLC front for private gene therapy firm University Banks/Advisors: Moelis & Co. (Akarna Banks/Advisors: Moelis & Co. (Akarna Therapeutics Inc.) In the first of two acquisitions announced on the same day, both focused on the emerging non-alcoholic steatohepatitis (NASH) market, Therapeutics Inc. Tobira Allergan PLC Allergan - pay potential regulatory and commercializa tion milestones tied to RetroSense’s lead compound RST001. (Sep.) RST001 is currently in Phase I/IIa for retinitis pigmentosa (RP), a genetic disorder which leads to progressive peripheral vision loss, night vision difficulties, and often times blindness. The candidate has orphan drug RetroSense is designation from the FDA. also exploring the potential of RST001 in - treating dry age-related macular degen eration, a condition for which there are no idealan is Allergan FDA-approved therapies. partner to advance the therapy because of field the to commitment strong its of ophthalmics. (The firm markets the blockbuster dry eye drug titis (NASH). NASH is a type of fatty liver NASH is a type of titis (NASH). of liver occurs when build-up disease, and and by cellular damage fat is accompanied additional gains also Allergan inflammation. at Akarna. in development FXR compounds to the highly complementary AKN083 is candidates later-stage NASH pipeline of the potential Allergan is gaining through $1.7bn acquisition of plus earn-outs, and bought dermatology- plus earn-outs, and bought dermatology- and inflammatory autoimmune disease- focused which was announced on the same day as which was announced that states Allergan transaction. Akarna the its experience in the both deals strengthen move beyondGI space, helping the company and colitis ulcerative as such conditions into the liver disorder chronic constipation Allergan has space. So far in September, acquisitions, announced four significant In addition to Akarna almost back-to-back. also purchased and Tobira, the company firm therapy gene advanced a technique called optogenetics, called technique a advanced which genetically modifies cells so that they respond to light. The company is using the technology to create gene therapies aimed at restoring functional vision. RetroSense raised a total of $12mm in its first two financing rounds and is backed by investors including BlueWater Angels, SDL Ventures, Tech Coast Angels, and Michigan Economic Development Corp. RetroSense was founded in 2009 based RetroSense was founded in 2009 based on technology developed by iRhythm iRhythm Lantheus . . . - Thera Akarna . Inc Inc (medical devices Inc Inc netted $Cdn9.5mm $Cdn9.5mm netted . filed for its initial public filed for its initial public Inc netted $39.9mm through the $39.9mm through netted robotic surgical system. (Sep.) announced that it is paying , a two-year-old firm developing Holdings PLC Technologies Therapeutics Therapeutics SPORT Medical icals Pharmaceut Allergan Akarna Titan Obalon iRhythm Lantheus ($7.2mm) through a public sale of 17.1mm common shares at $Cdn0.60. Investors also received five-year warrants to buy 17.1mm - shares at $Cdn0.75. Bloom Burton and Ech elon Wealth Partners were the placement agents. Proceeds will support continued development of components associated with Titan’s Holdings Inc. Holdings Technologies Inc. Technologies offering. (Sep.) BTIG LLC; Investment Banks/Advisors: JP Morgan & Co.; Canaccord Genuity Inc.; Morgan Stanley & Co. Investment Banks/Advisors: Bloom Burton CapitalRoth Partners; Echelon Wealth Co.; & Partners peutics Ltd. peutics - for weight loss) filed for its IPO on the Nas daq. (Sep.) Investment Banks/Advisors: BTIG LLC; Canaccord Genuity Inc.; Stifel Nicolaus & Co. Inc.; UBS Investment Bank ❚ & Acquisitions Mergers Continuing with its September buying spree, PLC Allergan Cardiovascular device maker Cardiovascular device maker device Diagnostic imaging Titan Medical Inc. Medical Titan Obalon Therapeutics Inc. Therapeutics Obalon small-molecule therapies for fibrotic and inflammatory diseases. (Sep.) The deal also includes undisclosed earn- outs related to development and commercialization of Akarna’s lead project AKN083, a preclinical farnesoid X receptor (FXR) agonist for non-alcoholic steatohepa- $50mm in cash to acquire follow-on offering of 5.2mm common shares at $7.76. The company will use some of the down help pay funds, along with cash, to $55mm of the outstanding principal about balance under its senior secured credit facilities. (Sep.) Investment Banks/Advisors: Credit Suisse Group; Jefferies & Co. Inc. the exercise of the purchasers option to of the purchasers the exercise It will use $45mm in notes. buy another repurchase of the proceeds to about half amount $134mm principal approximately senior 2% convertible of its outstanding will be put Additional funds notes due 2019. chain supply and manufacturing its towards operations. (Sep.)

Kinetic Omnipod for cartilagefor subsidiaries subsidiaries and its and . (urological devices) NeoCart Inc . (regenerative medicine formedicine (regenerative orp . KCI USA Inc. USA KCI . C / (developed the orp Acelity LP Inc. LP Acelity C y LP Inc LP y celit edical M ogentix Histogenics C A Insulet Concepts Inc. Concepts grossed $25mm through an equity invest- grossed $25mm through Partners, whichment from Accelmed Growth purchased 16mm common shares at $1.55 (a 32% premium). As a result, Accelmed - will have a 27% ownership interest and ap point two members to the board. Cogentix will use the proceeds to repay debt owed will C. Pell, who to company director Lewis have a 33% stake in the company following the transaction. Formed through the 2014 - merger of public US device companies Uro sells Cogentix Vision-Sciences, plasty and related and endoscopes agents, bulking supplies, and nerve stimulation devices mostly to treat urological and gynecological conditions. (Sep.) sold $1.75bn in principal amount of 9.625% sold $1.75bn in principal notes due 2021. second lien senior secured assets will be usedProceeds and additional principal amount of to redeem $1.75bn in lien senior se- outstanding 10.5% second (Sep.) cured notes due 2018. Wound care and regenerative medicine medicine and regenerative Wound care specialist /Medical Devices /Medical Financings Histogenics Corp. Histogenics Cogentix Medical Inc. Medical Cogentix Kinetic Concepts Inc. Concepts Kinetic Insulet Corp. Insulet repair therapy. HC Wainwright was the place- the was Wainwright HC therapy. repair ment agent. (Sep.) WainwrightHC Banks/Advisors: Investment & Co. insulin management system) sold $345mm (net $334mm) through an upsized private placement of 1.25% convertible senior notes due 2021. The notes convert at an initial rate principal$1k per 17.1332 common shares of amount (equivalent to $58.37; the stock is averaging $42.66). The financing includes musculoskeletal disorders) grossed $30mm - through a private placement led by new in stitutional investors, which were joined by returning shareholders. The company sold - 2.65 common shares at $2.25 (a 35% dis convertibleA 24,158.8688 Series and count) preferred shares that convert into 10.68mm - common shares at the same price. It also is sued the investors five-year warrants to buy another 13.33mm shares of common stock exercisable at $2.25 per share. Affiliates of certain members of Histogenics’ board of directors agreed to purchase 283,045 of the common shares and 2,563.1451 of the Series A convertible preferred stock and were issued warrants to buy up to 1.42mm common shares exercisable at $2.25. Histogenics will use some of the funds for ongoing develop- III Phase its of ment company an Informa Inc., Information, Business ©2016 Informa ❚ Dealmaking

including approximately $534mm up front valuing the transaction at $639mm. (Sep.) Neighborhood Connections. Then focused plus up to $1.2bn in earn-outs. (Sep.) Founded in 1999, Vitae once pursued on cardiovascular diagnostics, Lpath has Allergan concurrently disclosed another therapeutics in indications including cancer, since broadened its business to include NASH-focused acquisition, Akarna Thera- cardiovascular, CNS, and dermatology, but therapeutic antibodies based on bioac- peutics, for $50mm plus milestones. In the its current aim is to generate orally active tive lipid-signaling research by company Tobira transaction, Allergan will pay $28.35 candidates for RORyt (retinoic acid-related founder Roger Sabbadini, PhD. It also has in cash per share up front (representing a orphan receptor gamma T)- and LXR (liver an antibody discovery engine (ImmuneY2), 503% premium--the highest premium paid X receptor) beta agonist-mediated autoim- as well as an IP portfolio of over 50 issued on any biopharma or medtech M&A since mune diseases using its Contour computa- or pending US patents. Lpath’s pipeline at least 1991 when Strategic Transactions tional structure-based drug design (SBDD) includes Lpathomab (antibody against began tracking them), plus $49.84 per share platform. This technology enables Vitae to lysophosphatidic acid) in Phase I for in contingent value rights (CVRs). The CVRs rapidly discover small molecules for tar- neuropathic pain (and also in preclinical are split as follows: $13.68 on or before De- gets previously undruggable because of development for other CNS indications) cember 31, 2028, triggered by the first patient potency, selectivity, pharmacokinetics, or as well as preclinical compounds Altepan enrolled in a Phase III cenicriviroc (CVC) trial patentability issues. Contour computation- (antileukotriene mAb) for inflammatory dis- that includes as a primary outcome measure ally builds a 3D drug-like image of a protein eases and Nextomabs (12-HETE mAbs and the evaluation of improvement in fibrosis of target and then predicts how tightly that microbial lipids) for cancer, inflammation, at least one stage with no worsening of ste- molecule will bind to the protein. Vitae’s and infectious and ocular diseases. Two atohepatitis; $4.53 if an NDA is submitted on lead candidate VTP43742 inhibits RORyt, a of its candidates, Asonep (sonepcizumab) or before December 31, 2028 for any product nuclear hormone receptor essential for the and iSONEP (sphingomab), were at one time or combination containing CVC for NASH with formation and function of interleukin-17 licensed to Pfizer under a 2009 deal, but rights were later returned to Lpath. Asonep’s fibrosis or fibrosis due to NASH; $13.56 trig- (IL-17; a key pro-inflammatory pathway). development was suspended in March 2015 gered by the first commercial sale if it occurs VTP43742 showed positive results in a Phase after the candidate failed to meet the pri- on or before December 31, 2028; and $18.07 IIa proof-of-concept dose trial for moderate mary endpoint in a Phase IIa study in renal if worldwide net sales of the product exceed to severe psoriasis; another Phase II trial in cell carcinoma followed by iSONEP’s failure $1bn within any four consecutive calendar psoriasis patients is anticipated in Q4 2016. in May 2015 to show a significant benefit in quarters during a consecutive three-year Vitae’s preclinical VTP45489, another RORyt a Phase II study in wet age-related macular period following the first commercial sale. To- inhibitor for psoriasis, is expected to enter degeneration patients. Faced with those dis- bira has built its pipeline through in-licensing the clinic in Q3 2016. The company also has from Japanese pharmacos. The company’s appointing clinical trials last year, coupled a topical candidate, VTP38543, an LXR beta with only enough cash to fund operations CVC is a dual CCR2/CCR5 inhibitor in Phase agonist (also a nuclear hormone receptor that IIb for NASH. It’s also being studied in mul- through June 2016, Lpath began to evaluate plays a role in skin inflammation) in Phase IIa strategies to reorganize. The merged entity 44 tiple other diseases including HIV, primary for atopic dermatitis (eczema) with results sclerosing cholangitis, primary biliary cir- will continue to focus primarily on Apollo’s expected in Q4 2016. Due to the effects that device business (which brought in 2015 rhosis and hepatic fibrosis, HCV, and Type II RORyt inhibitors and LXR agonists have on diabetes. Tobira got worldwide rights to CVC revenues of $68mm) and determine in the autoimmune inflammation, the companies future what it will do with Lpath’s pharma as- from Takeda in 2007. In NASH, the candidate believes there’s potential to advance ad- has a 26% likelihood of approval according sets. Ten-year-old Apollo initially developed ditional compounds in other autoimmune to Biomedtracker, 2% above the average devices for gastrointestinal disorders, but disorders, including psoriatic arthritis, for phase and indication. Tobira’s pipeline in 2013, it bought Allergan’s obesity inter- ankylosing spondylitis, inflammatory bowel also contains Phase I evogliptin (DA1229), vention business for a potential $110mm, disease, and multiple sclerosis. The addition an oral dipeptidyl peptidase-4 (DPP-4) in- expanding into metabolic disorders. With of Vitae’s pipeline and technology aligns well hibitor targeting metabolic abnormalities in endobariatric devices gained in that trans- with Allergan’s seven core therapy areas of NASH. Under a deal with Dong-A ST earlier action--the Orbera intragastric balloon and anti-infectives, dermatology and aesthetics, this year, Tobira holds exclusive rights to the Lap-Band gastric silicone band--Apollo gastrointestinal, neurology, ophthalmology, evogliptin in the US, Canada, Europe, and now offers various nonsurgical alternatives women’s health, and urology. Investment Australia. Tobira is testing combinations of to invasive bariatric surgery procedures. CVC and evogliptin, and now with Akarna’s Banks/Advisors: JP Morgan & Co. (Vitae Investment Banks/Advisors: Piper Jaffray FXR agonist AKN083, has more possibilities Pharmaceuticals Inc.) & Co. (Apollo Endosurgery Inc.) for combinations. Tobira, which was founded Apollo Endosurgery Inc. Eleven Biotherapeutics Inc. in 2007, had attempted an IPO in 2014, but Lpath Inc. Viventia Bio Inc. ended up reverse merging with Regado Bio- Private device company Apollo Endo- sciences to go public in 2015. Tobira recorded Three months after out-licensing its only devel- surgery Inc. will acquire 95.8% of public opment program to Roche, Eleven Biothera- a $50mm net loss in 2015 and had $41mm therapeutic antibody pharmaco Lpath Inc. cash on hand at the end of Q2 2016. Allergan peutics Inc. made a strategic move into the (bioactive lipid technologies) in order to cancer space through the acquisition of private says the additions of both Tobira and Akarna take itself public. (Sep.) will build on Allergan’s existing experience oncology biotech Viventia Bio Inc. (Sep.) in GI diseases, such as ulcerative colitis and The merged company will take over Lpath’s Eleven bought all of Viventia’s outstand- chronic constipation, that will now naturally Nasdaq listing (and soon apply for a new ing shares in exchange for 4mm newly extend to liver disorders. Investment Banks/ trading symbol on Nasdaq), but retain the issued Eleven shares, representing 19.9% Advisors: Centerview Partners LLC; Citigroup Apollo Endosurgery name and Apollo’s of Eleven’s voting power prior to the deal Inc. (Tobira Therapeutics Inc.) Austin, TX headquarters and management (16.6% after). The combined company will team. Lpath shareholders will keep a 4.2% operate under the Eleven name, while most Allergan PLC ownership in the combined entity. Selected of Viventia’s executives take similar posts Vitae Pharmaceuticals Inc. investors are contributing $29mm to the with the new entity. (Viventia’s president Allergan PLC acquired public biotech Vitae new company. Lpath was founded in 1997 and CEO Stephen Hurly moves into the Pharmaceuticals Inc. (computational drug as Medlyte Diagnostics and itself went helm as leader of Eleven, while former design), paying $21 per share (a 175% premi- public on the OTCBB in December 2005 Eleven CEO stays on as a director.) Eleven’s um) in cash for all Vitae outstanding shares, in a reverse merger with shell company pipeline now includes key Viventia projects

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 45 invivo.pharmamedtechbi.com ❚ ’s

also re- . Strategic Strategic and a pro- . AnTolRx’s. (vorapaxar). Merck & Co. & Co. Merck Inc as a strong fit licensed exclu- AnTolRx Inc. AnTolRx Pfizer Inc. Pfizer ing Dealmak October 2016 | InOctober Vivo Zontivity Zontivity . . . Inc . assumes 10-30%) for the ARC- assumes 10-30%) for o . is a protease-activated receptor-1 Harvard Medical School Harvard Medical Pharmaceuticals & C & Inc Rx Inc olRx ’s thrombosis drug ’s Aralez AnT Pfizer Merck fessor at fessor for its cardiovascular offerings, and plans to plans and offerings, cardiovascular its for promote the drug to high-prescribing cardi- infarction myocardial its alongside ologists Transactions The move comes just one month after Merck after month one just comes move The decided to stop promoting the drug due to poor sales. (Sep.) lead Type I diabetes program is in preclinicalin is program diabetes I Type lead studies and designed to selectively target pathogenic T cells via the delivery of both a tolerogenic endogenous an and self-antigen - molecule, which induces an anti-inflamma tory phenotype. Orion Equity Partners and JDRF also contributed to AnTolRx’s Series A round, which will fund the start-up over the next two years. ceived the exclusive option to in-license the to in-license option ceived the exclusive start-up’s Type I diabetes candidate should it hit certain undisclosed milestones. (Sep.) AnTolRx’s technology was discovered by at scientist a is who Quintana, Francisco Dr. $4mm Series A financing, Concurrent with leading Hospital Women’s and Brigham Zontivity Aralez Pharmaceuticals Inc. Pharmaceuticals Aralez (PAR-1) inhibitor approved to reduce throm- botic cardiovascular events in patients with a history of heart attack, or patients with peripheral arterial disease, and is used in combination with daily aspirin or clopidogrel therapy. Aralez paid $25mm up front and could hand over up to $80mm in sales milestones, plus graduated royalties. Aralez and Merck also entered into supply and transition service agreements to assist Aralez with product distribution for up to 12 months. Aralez sees Inc. LPA project and single-digit royalties for thefor royalties and single-digit project LPA Amgen also agreed undisclosed program. equity (3mm to buy $21.5mm in Arrowhead shares at $7.16 each). Both compounds under the agreement are the first Arrowhead projects to incorporate its subcutaneous RNAi delivery platform. sive US and Canadian rights to Amgen gets exclusive global rights to rights to exclusive global Amgen gets commercialize Arrowhead’s develop and (AD01765) ARC-LPA program preclinical which reducing lipoprotein(a), aimed at increased linked with has been genetically dis- cardiovascular risk of atherosclerotic cholesterol and LDL ease independent of an option to levels. Amgen also receives rights to an license exclusive worldwide genetically for an undisclosed therapy RNAi target. Arrowhead validated cardiovascular in $617mm up to up front, receives $35mm development, regula- option payments and payments, plus tory, and sales milestone royalties ( low double-digit sales

. for and Inc (inter- is part- (glycerol rights to (MP376)) Buphenyl Procysbi (carbidopa/ Procysbi Ravicti Actimmune Aeroquin Duopa AbbVie Inc. AbbVie (formerly Pharmaceuticals (pegloticase), gained through (pegloticase), gained licensed . . AB (Sep.) grows Horizon’s overall portfolio grows Horizon’s overall Inc Inc Quinsair Vie Krystexxa Arctic Amgen Abb Arrowhead Bio ance. develop and commercialize a portfolio of antibodies against alpha-synuclein for treat- potential and other disease Parkinson’s ing indications. (Sep.) be to assumed is antibody licensed The preclinical BAN0805, the only PD antibody candidate listed on BioArctic’s website. Mutations in alpha-synuclein are tied to the development of Parkinson’s disease. The alpha-synuclein protein is a major compo- abnormal are which bodies, Lewy of nent aggregates of protein that develop inside the nerve cells in Parkinson’s disease. Ab- bVie already has a strong commitment to the neurology space. Just last year the company’s Parkinson’s drug phenylbutyrate), both acquired in its March 2015 $960mm buy of Hyperion Therapeutics; and nering two of its RNA interference (RNAi) interference RNA its of two nering cardiovascular disease therapies with - the $510mm acquisition of Crealta Pharma ceuticals in January 2016. Investment Banks/ LeerinkLLC; Partners Centerview Advisors: Partners LLC (Raptor Pharmaceutical Corp.); Citigroup Inc.; MTS Health Partners (Horizon Pharma PLC) Amgen Inc. Amgen Alliances /Pharmaceuticals Quinsair Arrowhead Pharmaceuticals Inc. Pharmaceuticals Arrowhead feron gamma-1b) for chronic granulomatous chronic for gamma-1b) feron disease and osteopetrosis, in its September - 2014 $660mm acquisition of Vidara Thera peutics; urea cycle disorder drugs BioArctic AB BioArctic from nine to eleven medicines and expandsfrom nine to eleven medicines busi- its existing orphan pharmaceuticals ness (which will now make up 45% percent of its total sales) to six products. Over the past few years, Horizon has been investing heavily in the rare disease space, picking up the following products: is approved in both the EU and Canada and in both the EU and Canada is approved in until 2029. It launched patent protected launch 2016 (with a Canadian Europe in April is still in 2016). The company expected later US, but an Phase III trials in the completing there soon.NDA submission is expected generated H1 2016Together the two drugs are expected to bringsales of $59.5mm and of $125-135mm forin combined revenues has in its pipelinethe full year. Raptor also form of RP103 (a delayed-release Huntington’s disease (Phase II/III) and otherHuntington’s disease as well as II)), (Phase diseases mitochondrial in rare and orphanother preclinical programs of indications. The addition (sodium phenylbutyrate) and levodopa) received approval from the FDA.

- in is in Tripex Tripex . Quinsair orp Vicinium C Vicinium - Pharma Raptor acquired all outstand- PLC under an August 2015 alli- (rare disease therapeutics) for , is entering Phase II for late-stage, is entering Phase II for Pharma Pharmaceutical (cysteamine bitartrate) is patent Horizon Raptor Pharmaceuticals Procysbi Proxinium based on antibody fragments genetically antibody fragments based on protein proteins (target fused to cytotoxic locally TPTs). One of the lead therapeutics; TPT candidates administered Horizon Pharma PLC Pharma Horizon squamous cell carcinoma of the head and squamous cell carcinoma systemically neck. (There are additional solid for trials earlier in TPTs administered the stock portion of tumors.) In addition to shareholders are the acquisition, Viventia in earn-outs: eligible for up to $22.5mm sale of $12.5mm upon the first Phase III trials for high-grade non-muscle for high-grade non-muscle Phase III trials another, cancer, while invasive bladder protected until 2034 and approved in both the US (where it launched in June 2013) and nephro- for 2014) April in (launched Europe pathic cystinosis, a rare and fatal metabolic disorder affecting lysosomal storage processes. Raptor in-licensed exclusive worldwide rights to its other marketed drug, $9 apiece in cash (a 21% premium), valuing the transaction at $800mm, or over eight times Raptor’s 2015 revenues of $94.2mm. Horizon will finance the purchase (expected to close in Q4 2016) with cash on hand and a planned $675mm debt financing. (Sep.) Raptor is headquartered in the US, but also has operations in the Netherlands. The company was originally founded in 2006, but in 2009 completed a reverse merger with TorreyPines Therapeutics to go public on Nas- daq. It has since acquired various intellectual institutesresearch numerous from property Raptor’sofferings. disease rare its up build to ceutical Corp. ceutical the US; $7mm upon its first sale in Europe; the US; $7mm upon its first sale in Japan. and $3mm after the to 2% of net salesQuarterly earn-outs equal to the acquisition of will also be due. Prior struggling following Viventia, Eleven was a set of trial failures related to one of its key ophthalmic candidates (isunakinra). In June the company granted Roche exclusive - rights to all of its IL-6 antagonist assets in cluding a preclinical compound (EBI031) for diabetic macular edema and uveitis. Eleven got $7.5mm up front and $22.5mm in July when the IND became effective for EBI031, but the company kept its options open and continued reviewing strategic alternatives merge to deciding firm, ultimately the for with Viventia and jump into the cancer arena (though the deal with Roche remains $500mm to up for eligible still is Eleven and Investment royalties). plus milestones in Banks/Advisors: Stifel Nicolaus & Co. Inc. (Eleven Biotherapeutics Inc.) (levofloxacin)--an inhalable, aerosolized fluo aerosolized inhalable, (levofloxacin)--an roquinolone antibiotic for chronic pulmonary Pseudomonas aeruginosa-caused infections in adult cystic fibrosis patients--from ing shares of public biotech ing shares of company an Informa Inc., Information, Business ©2016 Informa ❚ Dealmaking

therapy Yosprala (aspirin/omeprazole) and Basilea will receive an up-front payment and neoantigens. IVAC is able to produce a vac- Fibricor (fenofibrate) for hyperlipidemia. sales milestones, and remains the marketing cine that specifically targets unique muta- authorization holder. Cresemba is indicated tions found in a patient’s tumor (these are Asahi Kasei Corp. for invasive aspergillosis, while Zevtera tumor-specific antigen signatures that the Asahi Kasei Pharma Corp. Maximize Your treats Gram-positive and Gram-negative company calls mutanomes), allowing for Basilea Pharmaceutica Ltd. bacteria associated with pneumonia, meth- a tailored immune response. BioNTech is Basilea Pharmaceutica International Ltd. icillin-resistant Staphylococcus aureus, and responsible for manufacturing these vac- Basilea Pharmaceutica International Ltd. li- Pseudomonas. Just one week ago Grupo cines for clinical studies, and Genentech censed Asahi Kasei Pharma Corp. exclusive Biotoscana SL got exclusive rights to the will manufacture them for commercial sup- rights to develop and commercialize the an- Reimbursement Potential drugs in 19 countries in Latin America includ- ply. BioNTech will also have manufacturing tifungal drug isavuconazole in Japan. (Sep.) ing Brazil, Mexico, Argentina, and Colombia. rights under their global supply network. Asahi will pay CHF7mm ($7.2mm) up front The companies plan to initially test combina- and up to CHF60mm in regulatory and com- biOasis Technologies Inc. tions, and one possibility is likely to involve mercial milestones. Basilea is also eligible Vaccinex Inc. Tecentriq, Genentech’s recently approved for tiered double-digit sales royalties. Asahi Vaccinex Inc. is using biOasis Technolo- PD-L1 inhibitor. Genentech is studying will conduct the clinical trials required for gies Inc.’s Transcend technology in com- multiple Tecentriq combinations with Bio- submitting an application for Japanese mar- bination with its own anti-semaphorin 4D LineRx, Epizyme, Astex, and others. A few keting authorization for isavuconazole as a (anti-SEMA4D) antibody platform to deliver months ago, Moderna signed a similar deal treatment for invasive aspergillosis and mu- therapeutic mAbs across the blood-brain involving personalized mRNA-based cancer cormycosis. It will buy the finished product barrier (BBB). (Sep.) vaccines with Merck & Co.; the partners will from Basilea. Isavuconazole is marketed as Vaccinex gets rights to use biOasis’ Tran- also be examining a combination treatment Cresemba in various countries throughout scend technology and related intellectual involving Merck’s Keytruda. the world. Basilea has multiple partners for property in exchange for $20mm in up-front the drug. Most recently, Basilea licensed and milestone payments, plus single-digit bluebird bio Inc. Grupo Biotoscana SL exclusive rights to royalties (paid annually) on sales of result- MediGene AG commercialize and distribute Cresemba, as ing products. Transcend uses the human Medigene AG and bluebird bio Inc. agreed well as its antibiotic Zevtera (ceftobiprole), transport protein melanotransferrin (MTfp), to work together on the discovery and in 19 countries in Latin America including which is linked to a therapeutic agent such development of T-cell receptor (TCR) im- Brazil, Mexico, Argentina, and Colombia. as an antibody, enzyme, small-molecule munotherapies against four undisclosed drug, or a siRNA gene therapy, and be- cancer targets. (Sep.) Basilea Pharmaceutica Ltd. cause of its ability to attach to receptors Medigene will use its TCR isolation and Basilea Pharmaceutica International Ltd. on the BBB wall, acts as a peptide carrier characterization technology to generate and Grupo Biotoscana SL to get drugs across the BBB. BiOasis has deliver TCRs to bluebird, which contributes 46 Basilea Pharmaceutica International Ltd. Transcend development programs in neu- its lentiviral vector, genome editing, and licensed Grupo Biotoscana SL exclusive rodegenerative and metabolic diseases and synthetic biology platforms and its manu- rights to commercialize and distribute brain cancer. With its own anti-SEMA4D an- facturing expertise. The partners will jointly the antifungal Cresemba (isavuconazole) tibody platform, Vaccinex is targeting sema- conduct preclinical studies, after which and antibiotic Zevtera (ceftobiprole) in 19 phorin 4D (SEMA4D)--a signaling molecule point bluebird is responsible for all clinical countries in Latin America including Brazil, that controls cell processes associated with development and global commercialization; Mexico, Argentina, and Colombia. (Sep.) immune response--to create mAbs for use it also gets an exclusive license for any IP Basilea receives CHF11mm ($11.3mm) as potential treatments for neurodegenera- covering the discovered TCRs. Medigene The balance of power behind the prescribing decision is changing: payers are ever more in charge. That means up front plus regulatory and commercial tive and other diseases; it’s now pursuing gets $15mm up front, R&D funding, and up to that insight into how payers make decisions – how they evaluate drugs, one against another – will be crucial to milestones. Grupo Biotoscana will handle Huntington’s disease, multiple sclerosis, $1bn in pre- and post-sales milestones, plus any successful drug launch. the marketing authorization applications, and melanoma indications. up to double-digit royalties. The deal is the market access, commercialization, and first commercial agreement for Medigene BioNTech AG RxScorecard objectively, authoritatively, and systematically assesses marketed and pipeline drugs in a distribution of the two drugs. Cresemba surrounding its TCR technology. Roche is approved as a treatment for invasive therapeutic indication from the payer’s point of view. Developed by senior medical and pharmacy leaders from Genentech Inc. Boehringer Ingelheim GMBH aspergillosis, while Zevtera treats Gram- major payers and pharmacy beneﬁt managers, RxScorecard delivers practical and powerful insight into your BioNTech AG licensed Roche’s Genen- Boehringer Ingelheim Pharmaceuticals Inc. positive and Gram-negative bacteria associ- ViraTherapeutics GMBH drug’s reimbursement potential and how you can maximize it. ated with pneumonia, methicillin-resistant tech Inc. rights to develop, manufacture, and market personalized messenger RNA Boehringer Ingelheim Pharmaceuticals Staphylococcus aureus, and Pseudomonas. Transparent, objective, and grounded in payer data, RxScorecard helps you reﬁne your development path, Under an October 2010 agreement, Hikma (mRNA) vaccines for multiple cancers. (Sep.) Inc. entered into a collaboration with Vi- sells Zevtera in the Middle East and North Genentech marks BioNTech’s third Big raTherapeutics GMBH to develop a next future-proof your market access strategy, and achieve payer acceptance. Africa region; just last month the deal was Pharma partner, following deals last generation oncolytic virus platform based expanded to include rights to Cresemba in year with Sanofi and Eli Lilly, also in the on ViraTherapeutics’ lead candidate VSV-GP those same territories. Just two months ago cancer immunotherapy area. In the new (Vesicular Stomatitis Virus glycoprotein) Grupo Biotoscana in-licensed rights from agreement, BioNTech will receive from currently in preclinical development for Pierre Fabre Group to three marketed cancer Genentech $310mm in up-front and near- solid cancers. (Sep.) drugs in Colombia, Chile, Ecuador, and Peru. term milestones, and the companies will The deal is valued at up to €210mm equally split development costs and profits. ($235.2mm) and also includes co-funding of Discover RxScorecard today. Basilea Pharmaceutica Ltd. BioNTech holds co-promotion rights in the development activities along with an option Basilea Pharmaceutica International Ltd. US, major European markets (including for BI to acquire ViraTherapeutics after the Unimedic Pharma AB Germany, where the firm is located), as well conclusion of Phase I development. BI is al- Visit https://goo.gl/cZHGsx to review the selection of Basilea Pharmaceutica International Ltd. as some other countries. Should there be ready an investor in the company that spun RxScorecards today. Interact with the data. Compare licensed Unimedic Pharma AB exclusive certain products that Genentech chooses out of the Medical University of Innsbruck drugs on clinical, safety, and economic metrics. See the rights to commercialize and distribute its not to sell, BioNTech would have sole rights. April in 2013, having committed €3.6mm payer perspective. antifungal Cresemba (isavuconazole) and BioNTech will contribute its Individualized in Series A funding in June 2015 along with antibiotic Zevtera (ceftobiprole) in Sweden, Vaccines Against Cancer (IVAC) MUTANOME EMBL Ventures. The partnership comple- Denmark, Norway, and Finland. (Sep.) technology to develop vaccines against ments BI’s immuno-oncology pipeline which

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Maximize Your Reimbursement Potential

The balance of power behind the prescribing decision is changing: payers are ever more in charge. That means that insight into how payers make decisions – how they evaluate drugs, one against another – will be crucial to any successful drug launch.

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already includes a therapeutic cancer vac- nervous system, such treatments cause neg- NDA by 2H 2017. In Japan, Maruho plans cine and several next generation checkpoint ative side effects including dizziness, ataxia, to initiate a Phase I trial in the near future. inhibitors. VSV-GP has a shorter replication sedation, or falls. TARP-y8-dependent AMPA Dermira receives $25mm up front and up to time than other oncolytic platforms in devel- receptor antagonists selectively modulate $70mm in milestones related its successful opment, does not integrate in DNA, and has AMPA receptors found in the hippocampus, achievement of regulatory and marketing been modified to avoid neural inflammation. treating seizures locally without affecting application submissions and meeting set synaptic transmission and causing unwanted sales thresholds for DRM04, plus a low Cardinal Health Inc. side effects. The addition of CERC611 brings double-digit royalty (Strategic Transac- Navidea Biopharmaceuticals Inc. Cerecor’s development pipeline total to tions estimates 10-30%) on sales in Japan. Cardinal Health Inc. and Navidea Biophar- three projects; it is also working on CER301 Maruho will fund all development and com- maceuticals Inc. signed a letter of intent in Phase II trials for depression, and CERC501 mercialization costs, purchasing product for the potential exclusive licensing of all in Phase II for smoking cessation. supply from Dermira. The license expands Lymphoseek (technetium Tc 99m tilmano- Maruho’s dermatology pipeline. Under a cept) rights in North America to Cardinal. Circle Pharma Inc. January 2016 alliance, Maruho also holds Pfizer Inc. The deal would include all rights, title, and Japanese rights to Galderma’s approved interest for all FDA-approved, pending, and Circle Pharma Inc. will design and develop dermatology products for acne and rosacea. future cancer diagnostic indications in North a physical screening library of macrocyclic The current deal is not a part of the partners’ America. (Sep.) peptides for Pfizer Inc. (Sep.) existing 2013 collaboration in which Maruho Lymphoseek is a receptor-targeting lym- The Big Pharma will provide Circle with sup- received a right of first negotiation to undis- phatic mapping agent indicated for the port and gets non-exclusive rights to screen closed Dermira candidates in exchange for intraoperative detection and imaging of the library against certain targets. Pfizer’s an equity investment in Dermira (resulting sentinel lymph nodes in patients with license excludes specified targets for which in Maruho’s 3.4% stake in Dermira). cancers that may have spread to the lymph Circle has retained exclusive rights. Circle nodes, including localized squamous cell will use its computational design algorithms Dermira Inc. carcinoma of the oral cavity, breast cancer, and synthetic chemistry platform to create a Takeda Pharmaceutical Co. Ltd. or melanoma. If the LOI goes definitive, library of cell permeable macrocyclic scaf- Takeda Pharmaceutical Co. Ltd. granted Cardinal (which was already the exclusive folds that incorporate both natural and non- Dermira Inc. an exclusive option to license distributor for Lymphoseek in the US) will natural backbone components. The library three of its early-stage small-molecule pay $80mm up front plus annual earn-out will contain hundreds of macrocycles that dermatology programs. Specific candidates and sales milestone payments; payments can disrupt bioactive conformations found in were not disclosed. (Sep.) would amount to no less than $6.7mm per protein-protein interactions responsible for Dermira issued $1.5mm of its common year for the first three years. Terms of the disease processes. The parties first teamed shares to Takeda in exchange for the op- transaction dictate that the total deal value up two years ago when Circle agreed to de- tion, which gives Dermira the chance to 48 will not exceed $310mm. Cardinal Health velop two macrocylic peptide drugs for Pfizer. evaluate and research the three programs, will license back to Navidea royalty-free and decide if it wants to exercise the option rights that will allow Navidea to continue Daiichi Sankyo Co. Ltd. to license exclusive global rights to com- development, manufacturing, and sales of Zymeworks Inc. pounds from each of the programs. If the new products that don’t compete with the Daiichi Sankyo Co. Ltd. and ZymeWorks license is granted, Dermira pays an exercise existing Lymphoseek; Navidea can also Inc. entered into a cross-licensing agree- fee for each program, plus development and continue selling the product outside of ment for the development of new cancer regulatory milestones, as well as royalties. North America. In exchange for licensing immunotherapies. (Sep.) Dermira takes on all costs related to R&D back those rights, Navidea granted Cardinal In the first part of the deal, Daiichi gets and sales activities related to any program five-year warrants to buy up to 10mm of its licenses to two of ZymeWorks’ platforms: it licenses. The company’s pipeline already common shares at $1.50 per share, and a Azymetric, for the development of IgG-like holds Cimzia (certolizumab), in Phase III right of first offer on the assets Navidea bi-specific antibodies, andEFECT (Effec- for psoriasis (licensed from UCB in 2014); retains as part of the deal. tor Function Enhancement and Control DRM01, in Phase IIb for acne (gained Technology), a library of antibody Fc modi- through the 2011 acquisition of Valocor); Cerecor Inc. fications to modulate antibody-mediated and Phase III DRM04 for hyperhidrosis. Eli Lilly & Co. immune response. Daiichi pays an up-front Eli Lilly & Co. granted Cerecor Inc. exclusive technology access fee; preclinical, clinical, Johnson & Johnson global rights to develop and sell LY3130418, and sales milestones; and tiered double-digit Janssen Pharmaceutica NV a preclinical Transmembrane AMPA Re- royalties. In exchange for those rights, Dai- Tracon Pharmaceuticals Inc. ceptor Regulatory Proteins (TARP)-y8- ichi will grant ZymeWorks global rights to de- Janssen Pharmaceutica NV licensed Tracon dependent AMPA receptor antagonist for velop and commercialize multiple bispecific Pharmaceuticals Inc. rights to develop, epilepsy. (Sep.) products and gets sales royalties in return. manufacture, and commercialize two pre- In exchange for the rights, Cerecor pays clinical cancer compounds--JNJ63576253 $750k up front, $1.25mm after the first pa- Dermira Inc. (renamed TRC253), an inhibitor of wild tient is dosed in a multiple ascending dose Maruho Co. Ltd. type androgen receptor (AR) and multiple study, and up to $67.5mm in additional Maruho Co. Ltd. licensed exclusive Japa- AR mutations aimed at prostate cancer; development and sales milestones, plus nese development, distribution, and mar- and JNJ64290694 (TRC694), an inhibitor mid-single to low-double digit royalties. keting rights to Dermira Inc.’s DRM04 for of NF-kB inducing kinase (NIK) for treating Cerecor renamed the compound CERC611 hyperhidrosis (excessive sweating). (Sep.) hematologic malignancies including my- and, following submission and acceptance DRM04 (glycopyrronium tosylate) is a topi- eloma. (Sep.) of an IND, expects to begin Phase I trials in cal small-molecule anticholinergic inhibitor As part of the agreement, Johnson & John- 2017. Traditional AMPA receptor antagonist for primary axillary (underarm) hyperhidro- son’s JJDC made a $5mm equity investment therapies are successful at down-modulating sis; US Phase III trials to assess the safety in Tracon, buying shares at 840k shares excitatory neurotransmission and reducing and efficacy of DRM04 in this indication at $5.95. With respect to TRC253, Janssen seizure activity in cases of epilepsy, but be- demonstrated positive results for certain retains an option, exercisable until 90 days cause of their broad range of activity in the endpoints and Dermira plans to submit an after Tracon demonstrates proof-of-concept,

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 49 invivo.pharmamedtechbi.com

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td No- L orp chose C to ex- - Apreso will co- ’s block- ’s (benaz- Parlodel Ludiomil EasyHaler (ketotifen) (ketotifen) (sennosides (metoprolol), (amantadine), (tizanidine; for Cibacen Industries Holdings ing Dealmak ’s divested portfo- (baclofen; spastic October 2016 | InOctober Vivo Zaditen name as applicable. AstraZeneca Pursennid (nitroglycerin), Lopressor Ternelin Menarini Group Menarini in which it paid $293mm . Symmetrel Lioresal hemical . C and Easyhaler Group dry powder inhaler. Orion has combination product for asthma combination product orp Nitroderm (carbamazepine), and (terbinafine), C Symbicort (fluvastatin), and Pharmaceutical (hydralazine), Novartis Pharma AG Pharma Novartis Mitsubishi Sun Menarini Orion up front. The portfolio, which Sun has now revealed, includes CNS drugs for allergic rhinitis, market the former’s budesonide/formoterol vartis Pharma AG Pharma vartis buster Orion will manufacture the product, which Orion will manufacture the product, which delivers budesonide and formoterol via the clusively market in Japan a portfolio of 14 of portfolio Japan a clusively market in marketed products that were originally part of Sun Pharmaceutical Industries Ltd. Industries Pharmaceutical Sun Lamisil Easyhaler Corp. Pharma Tanabe Mitsubishi Tegretol Lochol Orion Corp. Easyhaler Corp. Pharma Tanabe Mitsubishi paralysis). The deal gives India-based Sun a strong presence in the Japanese market; on intended originally had company the marketing the products through one of its subsidiaries, but instead chose to go with commercial presenceits firm Mitsubishi and in Japan. Indian pharmacos are increas- spasticity) and shown positive study results at increasing at increasing study results positive shown us- than effectively more death cell cancer gained the alone. Madrigal ing irinotecan its and PEN866 through HSP90 program with Synta earlier this year reverse merger to develop Tarveda plans Pharmaceuticals. a con- alongside its PEN221, the project the somatostatin cell jugate that binds to entering Phase I latersurface receptor and is and small-cellthis year for neuroendrocrine lung cancer tumors. (bromocriptine), (maprotiline), as well as cardiovascular products Budesonide/formoterol is the same drug Budesonide/formoterol is the same drug in found combination epril). Mitsubishi will also sell the antifungal lio. First sales by Mitsubishi of the drugs lio. First sales by Mitsubishi of the drugs included in the deal will be staggered from October 2016 through 2017. (Sep.) Sun gained the products (at the time undisclosed) through a March 2016 deal with developed various formulations of generics- budesonide, beclometasone, -salbutamol, and formoterol--for use with and chronic obstructive pulmonary diseaseand chronic obstructive and Portugal. (Sep.) in Germany, Italy, Spain, exclusive an on agreed also firms The license and distribution arrangement in France and Turkey. Orion and Menarini will - market under their own brands accompa nied by the A/B) for constipation, and the neuro/ the and constipation, for A/B) musculo products line

, Om- . - Teneo Ligand UniAbs OmniAb . Inc transgenic . Inc Inc licensed exclu- OmniFlic ’s - Pharmaceu Madrigal . and expand epitope cover- licensed rights to use licensed rights (transgenic mice that comple- (transgenic mice that Pharmaceuticals Inc Therapeutics ’s HSP90 drug conjugate program is an engineered rat with a fixed is an engineered rat (a mAb technology based on rats, (a mAb technology based antibody. Ligand acquired the Ligand acquired antibody. Pharmaceuticals OmniRat sequence-based discovery technology technology (and its three transgenic arveda OmniFlic Madrigal T Bio Teneo Ligand (combining NGS, bioinformatics, and high- throughput screening) to develop human heavy chain antibodies known as including a complete immune system to pro- including a complete immune human idiotypes) and duce antibodies with ment rodent technology in its antibody discovery in its antibody rodent technology efforts. (Sep.) in Ligand’s One of three platforms Pharmaceuticals Inc. Pharmaceuticals Seek sive global rights to ticals Inc. ticals rodent models) through its December 2015 rodent models) through its December 2015 $178mm buy of the platform’s originator Open Monoclonal Technology. OMT’s former CEO, Roland Buelow, PhD, is also the CEO of TeneoBio, which is using its own OmniFlic Therapeutics Inc. Tarveda OmniRat OmniMouse TeneoBio Inc. TeneoBio niAb for oncology drug development. The deal includes lead compound PEN866. (Sep.) to up front and up Madrigal gets money $163mm in development, regulatory, and to the first devel- related sales milestones single-digit tiered plus candidate, opment royalties. (Milestones at lower amounts will be payable for subsequent projects.) Small molecule HSP90 drug conjugates consist of an with joined molecule targeting HSP90 an anticancer payload via a linker that allows for the controlled release of the payload once inside targeted cancer cells. They are meant to increase the killing of cancer cells surrounding to damage while minimizing healthy cells. Preclinical PEN866 is made up of an HSP90 ligand conjugated to SN38, has and irinotecan, of metabolite active the specific for human CD3 and various tumor specific for human CD3 and various tumor antigens. The company’s pipeline includes - four preclinical antibodies for multiple my eloma, prostate cancer, immune disorders, and AIDS; TeneoBio expects its multiple myeloma candidate, a multi-specific T-cell engager, to enter the clinic in 2018. suite of transgenic tools--in which animals suite of transgenic tools--in to generate are genetically engineered monospecific, bispecific, and optimized antibodies- polyspecific human therapeutic - light chain used in the development of bi- the development of light chain used in two platforms are specific mAbs. The other age). TeneoBio will first focus on therapeutic antibodies for cancer and autoimmune and infectious diseases, paying all development costs and providing Ligand with annual platform access payments, sublicensing royalties and payments, milestone fees, on resulting products that incorporate an

, - ’s SPS . rights rights td will co- provides provides . L . o SPS SkyePharma to its existing to its existing C PaxVax Inc. PaxVax Merck & Co. Inc. & Co. Merck has rights in South has rights in South Nasonex . (mometasone) in Japan (mometasone) in Japan Stabilizing and Protect Stabilizing ( ) formulation platform in in platform formulation ) (fluticasone/formoterol) for licensed . Inc . Yuhan . AG o (montelukast), licensed from (montelukast), licensed from SPS Nasonex , a metered-dose manual nasal nasal manual metered-dose a , . (Sep.) Pharmaceutical & C & Flutiform x Inc ax Kipres orin axV Merck Leukocare P Ky ing Solutions ing to use its asthma, under license from spray pump, is approved and marketed in spray pump, is approved and marketed in approximately 130 countries for seasonal - and perennial allergic rhinitis. MSD is re sponsible for manufacturing, and Kyorin will begin co-promoting the product on various its and Merck 2016. 1, November - MSD divisions sell the drug in most coun tries, while Merck for asthma and allergic rhinitis. Merck for asthma and allergic rhinitis. next-generation formulation technologies technologies formulation next-generation to increase stability and protection of therapeutic proteins in dry and liquid applied The platform can be formulations. to molecules ranging from small peptides, large proteins, and antibodies to viral antigens and live viruses. Nasonex to regain exclusive rights to the program. rights to the to regain exclusive would Janssen option the exercise it Should regulatory up to $137.5mm in pay $45mm, low-single- milestones, and and commercial exercised, If the option isn’t digit royalties. and pays receive global rights Tracon could regulatoryand in development $45mm to up royalties. milestones and low-single-digit has rights, also ex- For TRC694, Janssen also after Tracon demon- ercisable until 90 days to negotiate for sixstrates proof-of-concept, of the related rights months for a reversion property and to in the licensed intellectual commercialize to license exclusive an obtain exercised, Tracon willthe NIK program. If not up to $60mm in get rights and pay Janssen milestones anddevelopment and regulatory TRC253 has royalties. low-single-digit sales studies and Traconcompleted IND-enabling a Phase I/II trial in anticipates commencing H1 2017. Tracon expects to file and IND for TRC694 during 2018. MSD KK MSD Ltd. Co. Pharmaceutical Kyorin Leukocare AG Leukocare MSD KK Korea. Kyorin adds the development of an undisclosed live the development of an undisclosed live (Sep.) candidate. vaccine adenovirus-based PaxVax will pay milestones, annual license fees during development, and sales royalties. The company will have exclusive access to two product-specific pharmaceutical formulations based on the and platform. The vaccine candidate is currently in preclinical studies and expected to enter the clinic by early 2017. - respiratory and allergy offerings which in clude for allergic rhinitis with promote company an Informa Inc., Information, Business ©2016 Informa ❚ Dealmaking

ingly looking to expansion into the Japanese port from IntelGenx, the drug’s originator, for 2017. The deal builds on a relationship market through similar transactions. Last under a 2010 deal. A 5-HT-1 receptor agonist, between the partners that began in 2013 month, Lupin’s Kyowa Pharmaceutical Rizaport is delivered using IntelGenx’s Ver- when SciClone, which had been developing Industry Co. Ltd. division paid Shionogi saFilm technology, which enables the active its own oral mucositis therapy targeting the $150mm for rights to 21 off-patent drugs, ingredient to rapidly dissolve and release in same head and neck cancer population, giving Mumbai-based Lupin its entrance into the mouth. It’s currently approved in Ger- granted Soligenix access to its clinical and the branded drugs market in Japan. many and an NDA is underway in the US. In regulatory data library on mucositis stud- a deal finalized in July, RedHill sublicensed ies, to aid in the development of SGX942 in OncoImmune Inc. Rizaport to Grupo Juste in Spain, where it’s exchange for SciClone getting some Chinese Pfizer Inc. expected to launch in 2H 2017. Rizaport will commercialization rights to SGX942. The OncoImmune Inc. granted Pfizer Inc. the complement Pharmatronic’s existing neurol- current alliance expands the 2013 terms, exclusive option to license its ONC392 and ogy remedies portfolio, including Mygrizine now giving SciClone development respon- any other anti-CTLA4 monoclonal antibod- (cinnarizine) for migraine and vertigo; Erbert sibilities and wider marketing territories. ies. (Sep.) (cinnarizine/dimenhydrinate) for vertigo; OncoImmune could receive up to $250mm and Mclizine (meclizine) for motion sickness Shandong Luoxin Pharmaceutical in up-front payments and development and and vertigo. Group Co. Ltd. commercial milestones, plus tiered mid- Teikoku Seiyaku Co. Ltd. single to low-double digit sales royalties Regeneron Pharmaceuticals Inc. Teikoku Pharma USA Inc. (Strategic Transactions assumes 5-30%). Teva Pharmaceutical Industries Ltd. Teikoku Pharma USA Inc. granted Shan- OncoImmune discovered ONC392 using in In a deal worth up to $3.6bn, Regeneron dong Luoxin Pharmaceutical Group Co. Ltd. vivo screening models and it’s designed to Pharmaceuticals Inc. licensed Teva Phar- exclusive rights to market, sell, and distrib- help the immune system fight cancer while maceutical Industries Ltd. worldwide rights ute its non-alcohol injection formulation of reducing the immune-related toxicities. In (except in selected Asian companies) to the cancer drug docetaxel in China. (Sep.) October 2011 Pfizer granted AstraZeneca’s its nerve growth factor (NGF) antibody fa- Luoxin pays near-term milestones and royal- MedImmune global rights to develop its sinumab for osteoarthritis pain (Phase III) ties on sales once the drug launches in its CTLA4 inhibitor tremelimumab. Pfizer hopes and chronic low back pain (Phase II). (Sep.) territory. Teikoku’s non-alcohol docetaxel to use its immuno-oncology experience to Under the terms, Teva pays $250mm up- was the first of its kind to receive FDA ap- create a better therapy. Development of an front, up to $460mm in development and proval in the US (where Eagle Pharmaceu- anti-CTLA4 mAb with less toxicity than cur- regulatory milestones, and contingent pay- ticals has rights) last year. Docetaxel is a rent therapies would be a key achievement ments of up to $1.9bn upon achievement of cytotoxic anticancer agent indicated for a va- in immunotherapy regimens. specified annual net sales amounts. Teva riety of cancers including breast, non-small will also fund R&D costs of around $1bn. cell lung, hormone refractory prostate, and Pediapharm Inc. The companies have agreed to share US 50 head and neck cancers, as well as gastric Pediapharm Inc. received exclusive world- commercialization, employing sales and adenocarcinoma. Luoxin is a leading pro- wide rights to the laxative Relaxa from an marketing teams from both equally. Outside vider of specialty injectables in China, with a undisclosed company owned by pharma of the US (with the exception of countries portfolio that includes therapies for cancer, executive Gerard Leduc. (Sep.) previously announced under a collabora- pain, gastrointestinal disorders, infectious Pediapharm’s rights extend to the manu- tion between Regeneron and Mitsubishi for conditions, and respiratory diseases. Last facturing, promotion, marketing, sales, and Japan, Korea and nine other Asian countries) month, it expanded its development pipe- distribution of Relaxa. Under the agreement, Teva will develop and commercialize the line by licensing exclusive rights to develop Pediapharm can acquire the laxative for product and pay Regeneron a set purchase and sell Yuhan’s preclinical non-small cell seven years. The aggregate price payable price. Fasinumab is a monoclonal antibody lung cancer candidate YH25448 in China, during the term is $5mm plus a 2% sales that targets NGF, a protein which plays a Hong Kong, and Macau. royalty up to a maximum of $1.5mm. At the central role in regulating pain signaling. five year point of the deal, the licenser has The NGF antibody is believed to have the Financings the option to sell Relaxa to Pediapharm for potential to overcome limitations faced by /Pharmaceuticals $1.5mm. Relaxa is a polyethylene glycol existing non-steroidal anti-inflammatory 3350-based product for treating constipa- drugs and opioid therapies. AC Immune SA tion in adults. Unlike many other laxatives, Swiss biotech AC Immune SA (radiopharma- it works with the body by retaining water SciClone Pharmaceuticals Inc. ceuticals and diagnostics for neurodegenera- in the stool to gently relieve constipation. Soligenix Inc. tive diseases) netted $61.4mm in a Nasdaq Pediapharm says that for the last year it Soligenix Inc. granted SciClone Pharma- initial public offering of 6mm shares (upsized has been looking to acquire a product with ceuticals Inc. exclusive rights in China, from the 4.5mm it had originally planned) existing sales. Annual sales of Relaxa were Hong Kong, Macau, Taiwan, South Korea, and at $11 (the low end of its anticipated $11-13 about $3mm. Vietnam to develop, market, distribute, and range). (Sep.) sell SGX942 (dusquetide) for head and neck Investment Banks/Advisors: Credit Suisse Pharmatronic Co. cancer patients with oral mucositis. (Sep.) Group; Jefferies & Co. Inc.; Leerink Partners LLC RedHill Biopharma Ltd. SciClone made a $3mm equity investment Under a preliminary term sheet, RedHill in Soligenix through the purchase of 3.5mm Actinium Pharmaceuticals Inc. Biopharma Ltd. plans to sublicense Phar- Soligenix shares at $0.85 apiece (a 30% Actinium Pharmaceuticals Inc. (targeted matronic Co. South Korean rights to its premium), and will also pay royalties. Soli- payload immunotherapies) netted $9.4mm oral thin film migraine treatment Rizaport genix will supply the commercial product through the public offering of 8mm common (rizatriptan) for a ten-year term. (Sep.) on a cost-plus basis and will be the sole shares at $1.25. Some of the proceeds will Upon the signing of a definitive agreement, manufacturer. SGX942 is an innate defense support lead Phase III candidate Iomab-B, a Pharmatronic will provide an up-front pay- regulator that modulates immune system myeloablative conditioning agent used prior ment, regulatory- and commercialization- response and accelerates tissue healing to bone marrow transplant in AML patients based milestones, and tiered royalties on following exposure to chemo and radiation aged 55 and older. Money will also go toward sales within its territory. RedHill initially therapy. Soligenix has the compound in Actimab-A, an alpha-particle therapy in licensed exclusive worldwide rights to Riza- Phase II trials, with Phase IIb/III planned Phase I/II for newly diagnosed AML patients

In Vivo | October 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 51 invivo.pharmamedtechbi.com ❚

. . (drug (drug Inc Inc (eteplirsen) Immune De- Immune Matinas Bio- Matinas (genome editing netted $6.9mm netted $6.9mm AG ing Dealmak . Holdings October 2016 | InOctober Vivo Exondys 51 Exondys orp C ’s . (antibody therapies for HIV) Pharmaceuticals netted $28.2mm through the netted $28.2mm through the Inc BioPharma Sarepta Design Catabasis n Dy Cyto Immune Matinas CRISPR Therapeutics CRISPR public sale of 4.8mm common shares at shares common 4.8mm of sale public $6.25. The money will fund continued trials of CMB305 (solid and blood tumors), G100 cell Merkel and lymphoma (non-Hodgkin’s carcinoma), ZVexNeo (non-small cell lung cancer), and ZVex2.0 (next-generation vector-based therapies). (Sep.) Investment Banks/Advisors: Jefferies & Co. Inc.; Leerink Partners LLC; Wells Fargo Securities LLC - focused on CRISPR/Cas9-based therapeu tics) filed for its IPO on the Nasdaq. (Sep.) Investment Banks/Advisors: Barclays Bank PLC; Citigroup Inc.; Guggenheim Partners LLC; Piper Jaffray & Co. netted $9.2mm through the registered netted $9.2mm through the registered direct offering of 13.33mm common shares at $0.75 (a 27% discount) to institutional investors. The company also issued five- 6.67mm sharesanother buy warrants to year exercisable at $1 each. Rodman & Renshaw use will CytoDyn agent. placement the was some of the proceeds for clinical trials of its candidates. (Sep.) Investment Banks/Advisors: Rodman & Renshaw Capital Group Inc. exon-skipping DMD drug after reversing its exon-skipping DMD drug (Sep.) panel vote back in April. Cowen & Co. LLCInvestment Banks/Advisors: Infectious disease-focused Immunotherapies developer Catabasis Pharmaceuticals Inc. Pharmaceuticals Catabasis CytoDyn Inc. CytoDyn CRISPR Therapeutics Therapeutics AG CRISPR through the private placement of 1.6mm through the private placement of 1.6mm Series A preferred shares at $5 each to accredited investors. The company will use the proceeds for R&D activities and to build a facility. Aegis Capital’s manufacturing new SternAegis Ventures was the placement agent. (Sep.) Investment Banks/Advisors: Aegis Capital Corp. Pharma Holdings Inc. Holdings Pharma discovery for multiple diseases) netted netted for multiple diseases) discovery offering of a follow-on public $10.8mm in of the (including full exercise 2.875mm shares at option) common over-allotment use the proceeds to $4. The company will market development fund clinical trials and Duchenne for CAT1004 (edasalonexent) of (DMD), for R&D of its Muscular Dystrophy and to expand its preclinical candidates, drugs have been topproduct platform. DMD four days ago the FDA of mind lately, as just approved sign Corp. sign - - in a . Cedars- Inc . . . -related ap- (formerly Ne (formerly (lead program Inc Inc BioCryst Phar BioCryst Inc - Therapeu Capricor Rapivab . Capricor concurrently (formerly bioCSL.) The - (developing small-mol Biosciences . (therapies for rare and orphan for rare and orphan (therapies Therapeutics Therapeutics Pharmaceuticals Seqirus Cedars-Sinai Medical Center Medical Cedars-Sinai st netted $9.2mm through the follow- Inc ry is Inc. is veXis Capricor Caladrius BioC A Capricor Sinai Medical Center Medical Sinai tics Inc. tics neurological genetic diseases) netted netted genetic diseases) neurological of 3.96mm the public sale $128mm through existing at $34.50. An common shares AveXis also sold 290k shares. stockholder trials (including will put the funds towards for AVXS101, a the current Phase I study) muscular atrophy gene therapy for spinal 1. Proceeds will also (SMA) and SMA Type fa- manufacturing a of opening the support capital needs. (Sep.) cility and other general BMO FinancialInvestment Banks/Advisors: Markets; Goldman Group; Chardan Capital & Co. Inc. Sachs & Co.; Jefferies is a cell therapy for treating heart disease associated with Duchenne muscular dystrophy and myocardial infarction) raised $1mm through the registered direct offering of 312,500 common shares at $3.20 each (a shareholder current to discount) 16% on public sale of 3.1mm common shares (including the overallotment) at $3.20 each. The company concurrently sold $1mm in equity to ecule therapies that block key enzymes ecule therapies that block key enzymes involved in rare diseases) with a $23mm senior credit facility which bears a variable interest rate based on LIBOR (currently at 8.5%), has an interest-only period through - fiscal 2017, and includes scheduled princi pal and interest payments for the following 40 months. BioCryst can opt to repay the facility at any time prior to the scheduled principal repayment schedule. (It expects to repay the loan with maceuticals Inc. maceuticals Midcap Financial provided Midcap Financial provided Caladrius Biosciences Inc. Biosciences Caladrius Therapeutics Inc. Capricor Cardiovascular-focused X Ave proceeds should last into early 2018. (Sep.) netted $8mm through a FOPO. (Sep.) registered direct offering. (Sep.) Investment Banks/Advisors: National Secu- rities Corp.; Roth Capital Partners proval milestones associated with a 2015 proval milestones associated with a 2015 deal with oStem) grossed $12.6mm through the sale of common shares to returning accredited investors including Sanford Health, which contributed $5mm. (A second tranche of $8.4mm will be invested upon the enrollment clinical II Phase firm’s the in patients 70 of trial for CLBS03 in Type I diabetes, expected possibly by mid-2017.) In total, investors committed to purchase 4.45mm common shares a $4.72 (a slight discount) for total proceeds to the company of $21mm. (Sep.) - , a , . . (targeted (targeted . Inc (treatments (treatments Rhopressa Inc Inc . (mainly developing Inc Aerie Pharmaceuticals Aerie Pharmaceuticals x Pharmaceuticals x Pharmaceuticals Pharmaceuticals y Biopharma y netted $71.8mm through the public of- public the through $71.8mm netted gios Arra uino Aq A Aerie - immuno-oncology and inflammation thera pies) netted $70.8mm through the public sale of 6.15mm common shares (including the overallotment) at $12.25. Proceeds will support development activities, includ- (Phase AQX1125 project lead on work ing II for COPD and bladder pain syndrome/ interstitial cystitis), and will also fund pre- commercialization and market assessment activities. (Sep.) Investment Banks/Advisors: Canaccord Genuity Inc.; Guggenheim Partners LLC; Leerink Partners LLC; Needham & Co. Inc. once-daily eye drop designed to lower intra lower to designed drop eye once-daily with glaucoma ocular pressure in patients Additional money or ocular hypertension. clinical trials, build- will support Japanese and Ireland, in plant manufacturing a ing candidates. pipeline of studies preclinical Cantor sold it announced Aerie Concurrently at-the-marketan through $50mm Fitzgerald offering. (Sep.) - Investment Banks/Advisors: Cantor Fitzger ald & Co. for cancer and rare metabolic diseases) diseases) metabolic rare and cancer for sale public the through $162mm netted of 3.9mm common shares (including the overallotment) at $44.50. Proceeds will pre- and development continued fund commercialization activities for AG120 (AML AG221 and syndrome) myelodysplastic and (AML, MDS, and solid tumors), and will also - support the company’s earlier-stage candi dates for PK deficiency. (Sep.) Investment Banks/Advisors: Cowen & Co. LLC; Goldman Sachs & Co.; JP Morgan Chase & Co. Ophthalmic-focused Ophthalmic-focused over 60 years of age. (Sep.) over 60 years WainwrightHC Banks/Advisors: Investment Capital Partners & Co.; Roth Array BioPharma Inc. BioPharma Array Aquinox Pharmaceuticals Inc. Pharmaceuticals Aquinox Agios Pharmaceuticals Inc. Pharmaceuticals Agios Inc. fering of 2.54mm common shares at $29.50. at shares common 2.54mm of fering The $25mm. by upsized was offering The help to proceeds the use will company its of commercialization fund cancer therapies; also has projects in the pipeline for infectious, cardiovascular, and respiratory conditions) netted $108mm through the public sale of 18.4mm common shares at $6.25. (Sep.) Investment Banks/Advisors: Cowen & Co. Nicolaus Stifel Co.; & Chase Morgan JP LLC; & Co. Inc.; SunTrust Banks Inc.; Wells Fargo Securities LLC company an Informa Inc., Information, Business ©2016 Informa ❚ Dealmaking In Vivo Novan Inc. proof-of-concept studies for SAGE217 in Pharma intelligence | Dermatology-focused Novan Inc. (nitric other movement, mood, and affective managing editor oxide (NO) drug delivery) netted $41.9mm disorders; and additional non-clinical and Nancy Dvorin in an initial public offering of 4.1mm shares clinical studies of other pipeline candidates (upsized from the 3.75mm shares it had in potential CNS indications. (Sep.) health care editor planned) priced at $11 (the low end of its Investment Banks/Advisors: Canaccord Ge- Ashley Yeo anticipated $11-13 range). (Sep.) nuity Inc.; Cowen & Co. LLC; Goldman Sachs senior editor Investment Banks/Advisors: JMP Securities & Co.; JP Morgan & Co.; Leerink Partners LLC; Peter Charlish LLC; Piper Jaffray & Co.; Wedbush PacGrow William Blair & Co. senior editor, data John Hodgson Life Sciences Sarepta Therapeutics Inc. editorial staff Oxford BioMedica PLC Sarepta Therapeutics Inc. (RNA-targeted Jessica Merrill Oxford BioMedica PLC (gene delivery therapies for neuromuscular diseases) net- Sten Stovall platform technology) will raise £10mm ted $285mm through the follow-on public of- Amanda Micklus, Principal Analyst ($13.2mm) in nets proceeds through the fering of 5.02mm common shares at $59.75 contributing editors issuance of 383.4mm new ordinary shares-- each. (Sep.) Deborah Erickson, Regina Paleski 184.3mm new ordinary shares will be issued Investment Banks/Advisors: Credit Suisse Mark Ratner, Marc Wortman through a placing and 199.1mm new ordinary Group; Goldman Sachs & Co.; JP Morgan shares will be offered via a subscription, both & Co.; Needham & Co. Inc.; Oppenheimer research manager at £0.03 per share (33.3% discount to prior 10 & Co. Inc.; Robert W. Baird & Co. Inc.; WBB Steven Muntner day market trading average). (Sep.) Securities LLC; Wedbush PacGrow Life Sci- deals analysts Investment Banks/Advisors: Jefferies & Co. ences Beth Detuzzi, Deanna Kamienski Inc.; WG Partners Maureen Riordan Versartis Inc. Proteostasis Therapeutics Inc. Versartis Inc. netted $56.4mm through the design supervisor Proteostasis Therapeutics Inc. (developing follow-on public offering of 4.9mm common Gayle Rembold Furbert treatments for diseases caused by dysfunc- shares at $12.25. The company will use the senior designer tional protein processing) netted $61mm proceeds to help fund ongoing Phase III Janet Haniak through the public offering of 5mm common trials of its lead program somavaratan for designers shares at $13. Proceeds will support Phase growth hormone deficiency. (Sep.) Jean Marie Smith, Paul Wilkinson I and II trials for the company’s cystic fibro- Investment Banks/Advisors: Barclays Bank sis candidates, including PTI428, PTI801, PLC; Canaccord Genuity Inc.; Cowen & Co. advertising 52 PTI808, and PTINC733. (Sep.) LLC; Piper Jaffray & Co.; SunTrust Banks Inc. Christopher Keeling Investment Banks/Advisors: HC Wainwright corporate sales Xenon Pharmaceuticals Inc. & Co.; Leerink Partners LLC; RBC Capital John Lucas, Elissa Langer Markets; Robert W. Baird & Co. Inc. Nasdaq-traded Canadian biotech Xenon Alicia McNiven Pharmaceuticals Inc. (drug discovery for technology operations manager Rexahn Pharmaceuticals Inc. rare diseases) netted $24.3mm through Chris Trudeau Cancer therapeutics developer Rexahn the public sale of 3.45mm shares (includ- vp, e-strategy & development Pharmaceuticals Inc. netted $5.5mm ing the overallotment) at $7.50. Selling Adam Gordon through a registered direct offering of 24mm shareholders also sold 1.15mm shares. The common shares at $0.25 apiece (market company will use proceeds to fund further managing director Phil Jarvis average), which were issued together with development of Phase II XEN801, an SCD1 five-year warrants to purchase 18mm shares inhibitor for acne; preclinical development at $0.30. Rodman & Renshaw the placement of its Nav1.6 sodium channel inhibitor in editorial office agent. Rexahn will use the funds to support childhood epilepsy disorders (for which 52 Vanderbilt Avenue, 11th floor continued development of lead projects an IND is expected in mid-2017); as well as New York, NY 10017 Archexin (Phase II for metastatic renal cell continued research activities for its Extreme www.InVivo.PharmaMedtechBI.com carcinoma), RX3117 (Phase Ib/IIa for pancre- Genetics platform (for rare human disease atic and bladder cancers), and Supinoxin target validation) and ion channel drug customer service (RX5902; Phase I for metastatic and solid discovery programs. (Sep.) [email protected] tumors). (Sep.) Investment Banks/Advisors: Guggenheim Investment Banks/Advisors: Rodman & Partners LLC; Jefferies & Co. Inc.; Stifel In Vivo: The Business & Medicine Report Renshaw Capital Group Inc. Nicolaus & Co. Inc. [ISSN 2160-9861] is published monthly, except for the combined July/August issue, by Informa Business SAGE Therapeutics Inc. Zealand Pharma AS Intelligence, Inc., 52 Vanderbilt Avenue, 11th floor, New SAGE Therapeutics Inc. (develops CNS Danish biotech Zealand Pharma AS raised York, NY 10017. Tel: 888-670-8900(US); +1-908-547- disorder drugs focused on modulation of DKK143mm ($21.5mm) through the private 2200 (outside US); Fax: 646-666-9878. selective allosteric GABAA receptors) net- placement of 1.48mm shares at DKK96.90 Subscriptions cost $2,630 (online and print) per year. ted $164mm in a public offering of 4.4mm each (a 9% discount) to US and European Office of publication, The Sheridan Group, 66 Peter shares at $39.75. The company will put pro- investors. The company will use the funds Parley Row, Berlin, CT 06037. Postmaster: Send address changes to Informa Business Intelligence, 52 ceeds toward pipeline development, includ- to develop pipeline candidates including Vanderbilt Avenue, 11th floor, New York, NY 10017. ing pre-commercial activities for Phase II Phase II glepaglutid (ZP1848) for short bow- © 2016 by Informa Business Intelligence, Inc., an Informa SAGE547 (allopregnanolone) in post-partum el syndrome, and dasiglucagon (ZP4207), company. depression (PPD; an indication for which the which has finished Phase II as a single-dose All rights reserved. company just received FDA breakthrough version for severe hypoglycemia in diabetes No part of this publication may be reproduced in any form or therapy designation); continuing Phase I tri- and is soon entering Phase II as a multiple- incorporated into any information retrieval system without the als for SAGE217 in PPD and essential tremor; dose version. (Sep.) written permission of the copyright owner.

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