2016 Pharma Dealmaking

invivo.pharmamedtechbi.com September 2016

Invol. 34 ❚ no. 08 Vivopharma intelligence ❚ informa

2016 Pharma Dealmaking: Waiting On The High-Value Deals Six pharma deals announced thus far in 2016 carried up-front values of $1 billion or more, down considerably from the high-volume, high-value M&A industry experienced the prior two years. Pharma manufacturers appear to be recalibrating, but fundamentals suggest dealmaking will pick up. By Jessica Merrill

❚ AstraZeneca’s Seasoned ❚ BTG Deals Its Way Into ❚ Pharma R&D Efficiency: ❚ Olympus Targets A Dealmaker Grady On Interventional Medicine Mid-Sized Companies Excel Bigger Medical Future Strategy To Grow Pipeline By Ashley Yeo By Amanda Micklus By Ashley Yeo BY Sten Stovall

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

10 COver ❚ 2016 Pharma Dealmaking: Waiting On The High-Value Deals Jessica Merrill Six pharma deals announced thus far in 2016 carried up-front values of $1 billion or more, down considerably from the high-volume, high-value M&A industry experienced the prior two years. Pharma manufacturers appear to be recalibrating – digesting previous acquisitions, adjusting to new biotech valuations and taking stock of the political and macro-economic climate – but fundamentals suggest pharma dealmaking will pick up. Pfizer’s $14 billion offer for Medivation might represent a turning point.

Features

26 32 1 AstraZeneca’s Seasoned Olympus Targets A Bigger Dealmaker Grady On Strategy Medical Future To Grow Pipeline Ashley Yeo Sten Stovall A medical company that has some other AstraZeneca’s Shaun Grady is an affable businesses – that is the shorthand dealmaker whose talents – honed over description that Olympus Corp. of the three decades inside the group – are Americas president and CEO Nacho Abia being put to the test as he works to ascribes to a group that has emerged ensure that Britain’s second-biggest from difficult times with a new strategy, drugmaker can successfully transform new structure and new determination. itself, its therapy focus and pipeline. Targeted deals and M&A remain as important as ever to the group as it embarks, somewhat reinvented, on a new 18 five-year plan. BTG Deals Its Way Into 38 Interventional Medicine Pharma R&D Efficiency: Mid- Ashley Yeo Sized Companies Excel UK-listed BTG PLC is on a route to a major future in interventional medicine, having Amanda Micklus built solid foundations in licensing and Datamonitor Healthcare’s recent review specialty pharma. CEO Louise Makin of R&D efficiency using new product describes the deal- and decision-making launch success rates as a proxy shows rationale that has allowed a mid-cap that Mid Pharma companies outperform player to set billion-dollar plus ambitions Big Pharma and Japan Pharma firms, in interventional medicine, based on thanks to multiple blockbuster drugs. organic and M&A growth. The first in a two-part series evaluating R&D productivity.

departments exclusive online content Invivo.pharmamedtechbi.com Around The Industry ❚ Biopharma Quarterly 4 Medtechs Must Partner With US ❚ D eals In Depth Dealmaking Statistics Providers As Outcomes Revolution Ramps Up An overview of biopharma, medtech and Q2 2016 Ashley Yeo diagnostics dealmaking in June/July 2016 Maureen Riordan and Amanda Micklus Amanda Micklus 6 Cancer Moonshot To Tackle Hereditary Colon Cancer Screening Mark Ratner ❚ Polaris Stays Disciplined For Breakthroughs: 7 In Vivo’s Deals Of The Month: An Interview With Alan Crane August 2016 Marc Wortman NANCY DVORIN ❚ 8 CVRx Funding Boost Will Sustain Brexit Effects On Medtech: View From Switzerland ashley yeo Barostim Heart Failure Device To US Launch ❚ Ashley Yeo Pharma’s Progress in Precision Medicine nancy dvorin 42 on The Move Significant recent job changes in 2 pharma, medtech and diagnostics 46 dealmaking ❚ From The Editor Deals Shaping The Medical Industry, August 2016 In Vivo enters the fall season with a fresh new look, courtesy of our lead designer Gayle Rembold Furbert and her team. You’ll notice new fonts and You Asked...We Delivered! new layouts, enhanced graphics and more sign- Relevant and exclusive online-only posts to our online-exclusive content. Our print content at your fingertips 24/7 issue is now more closely aligned with our new website (bookmark invivo.pharmamedtechbi.com Access your subscription by visiting: if you haven’t already). We’ll be rolling out some invivo.pharmamedtechbi.com additional changes and features over the com- and log in. ing months, but rest assured that the one thing Don’t have an online user account? that will never change is In Vivo’s commitment Quickly and easily create one Nancy Dvorin to high-quality content. by clicking on the “Create your In this issue, we focus on dealmaking. In her account” link at the top of the page. annual mid-term review of biopharma dealmaking, Jessica Merrill notes that big-value M&A deals have been missing from the landscape this year, but Contact: Pfizer/Medivation may trigger their return. AstraZeneca’s business develop- [email protected] ment head Shaun Grady speaks with Sten Stovall about AZ’s three-pronged or call: (888) 670-8900 or +1 (908) strategy for growth. And Ashley Yeo describes how BTG PLC leveraged part- 748-1221 for additonal information. nerships and M&A to transform itself into a player in interventional medicine. Turn the page to start reading these stories and the rest of our September line- up. And keep in mind that we’re always eager to hear from you – please send your questions, concerns and comments to [email protected].

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Medtechs Must Partner With US Providers As Outcomes Revolution Ramps Up

It’s probably a moot point, but history may well show that the element of the US PPACA vices (CMS) about how to get more value,” – the Affordable Care Act of 2010 – that had the most lasting impact was the importance he says. Historically, hospitals have been it placed on providers becoming outcomes-focused. paid even if a patient is readmitted. “Now, Medtech vendors have been and and 2) innovations that truly do change the people are beginning to wake up and start- will continue to be the unintended ben- long-term outcome of the patient – this is ing to figure why this happens. They are eficiaries of this change in orientation the area where the opportunity lies. taking a look at closer alignment between away from activity-based payments. The latter have perhaps have not been payer and provider, which leads to a very Forward-thinking companies have been monetized as much or as well as they different way of thinking in the long term.” busy doing a sweep of the landscape and could have been, but now the game is have seen that positioning themselves changing, and companies that succeed in The Pace Of Change And Next early as partners with – rather than just the new world are those that have looked Stages Of Working Together suppliers of – their hospital customers is at the impact of their product and seen The pace of adaptation to the changes the way to provide sustainable benefits how and where it can help the provider in the market at present is both frustrat- for both parties. economize. “It should be a very different ing and encouraging, says Chapman. In A new report from ZS Associates, conversation for the manufacturer when reality, cost is still very much the No. 1 Hospitals Have Spoken: How Medtech it can show the hospital how it can save consideration among hospitals. But this is 4 Can Benefit from the Affordable Care Act’s money,” notes Chapman. evolving in line with CMS quality-focused Focus on Outcomes, explains that, in the metrics. Respondents in the ZS survey new world, the zero-sum game, where Medtechs: Are They More Than rated quality care and revenue growth hospitals improve their costs by attacking Mere Suppliers? nearly as important as cost reduction. manufacturers’ margins, is actually not ZS’ report, based on a survey of 85 US- The emphasis on balancing these three the only game in town. based hospital executives (C-suite and elements is expected to continue, to the In fact, in an era where poor clinical departmental leaders across service lines) extent they will remain the key priorities outcomes are coming back on providers in late 2015/early 2016, found that many in the period 2018–20. and affecting their bottom lines, hospitals are not yet convinced that medtechs can CMS’ risk-based payment model and have to be sharply focused on quality and help them address their biggest priorities. other new reimbursement models that performance, and medtechs have a critical From this, it is clear that the medtech in- promote accountability for outcomes have role to play here. dustry needs to boost hospital executives’ changed how hospital executives think confidence in manufacturers being able about cost containment. US hospitals Hospitals Start To Care to function as more than mere suppliers. are now bearing the costs arising from Economically Chapman stresses that medtech hospital-acquired infection (HAIs) and “Suddenly, we’ve started to get to things companies need to ensure that they work other poor outcomes that require pro- that matter,” says Brian Chapman, prin- in ways that help their clients – the hos- longed stays or readmissions. cipal at ZS and leader of the consulting pitals – meet their own targets. “We’ve “But the Number 1 way hospitals are practice for ZS’ Medical Products and spent a lot of time with companies that trying to reduce cost is through better per- Services team. “The hospital has started are working on their value proposition for formance on outcomes,” says Chapman. to care economically about patients and hospitals, which raises several questions Now, by having reimbursement tied in the episode of care they receive within for them, typically: ‘Do I need KAM? Do meaningfully, it has become a priority for the walls of the hospital. To me, it’s a very I need a new product? And how do I get hospitals to take advantage of the new exciting development,” he tells In Vivo. people to pay attention to my product?’” environment where advances are tied to Historically, most of the technologies Chapman says that market access/ economic activity. Joint replacement com- that medtechs have launched have fallen payment changes are coming thick and panies are a prime example, but others into two groups: 1) incremental improve- fast, not just for hospitals, and in areas have turned to this approach too. ments that help the surgeon increase the beyond regulatory and legislation. “There “We’re now seeing a situation where throughput/increase revenues – these has also been a more active focus from the the hospital is the center of the funding products can be classed as “old model”; Centers for Medicare and Medicaid Ser- of care for 90 days. This is a pretty sub-

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stantial change, but in truth our industry still heavily weighted toward the surgeon, products have made a lot of money, but has been a little slow to wake up to the and not yet as good at being able to deliver they have not needed a lot of attention opportunities,” states Chapman. In this to the non-clinical stakeholder. “We need from the sales force. However, if they are context, he mentions orthopedic total to see that balance shift, now that it is coming under pressure, they actually do joint replacement as being an example of clear that non-clinical stakeholders and need a lot of attention.” where treatment episodes are extending economic factors are such critical drivers Then, at the same time, what the beyond the usual 30 days that apply to to hospital decisions.” industry is really geared up to do is to most episodes of care. launch new products. Much of its ca- Smaller Medtech Companies pability is in the space of educating, in Hard Choices To Make Can Benefit? servicing and in doing new things. The Companies opting for the route of a closer The focus on the economic buyer obvi- key here is “opportunity,” says Chap- working relationship with providers have ously suits larger players, but it can also man. “As an industry, we also need to to look deeply into the process, which will be of benefit to the smaller players. The figure out how we will service the old and typically mean addressing which of their question for them is, just how do they launch the new – that is, take care of the products to deselect, how much focus to adjust? surgeon’s needs but also tend to some of put on incremental innovation, and how “Most critical is that some small com- the stronger forces happening now, and much focus to put on products that will panies focus not on becoming a stand- see them as an opportunity.” appeal to surgeons. alone company, long term, but instead Hospitals’ focus on outcomes is a re- Putting a focus on what the surgeon want to prove commercial viability of a cent development. It indicates that CMS’ would like is still the prime consideration specific product and then sell out to a efforts to emphasize quality metrics have succeeded in changing hospitals’ priorities and behavior faster than industry had “The Number 1 way hospitals are trying to thought possible. Even hospitals outside of ACOs are shifting their focus to out- reduce cost is through better performance comes and quality metrics. on outcomes.” – Brian Chapman This gives vendors an opportunity to radically change their relationships with customers. Effectively, they are putting 5 for many companies, whose innovation larger company. If this is the case, then themselves on the same side of the table process includes involving the surgeon they will focus on a clinical sell. But as the as the providers, and are collaborating to in the design of the device. In fact, this product and therapy matures, it will likely design innovative ways to create value. routinely happens at firms in the innova- be sold in a different way to be more on But to get to that point, medtech compa- tive space. economic terms at the top of the hospital,” nies need to alter the general perception But not only are many companies talk- Chapman observes. that hospital executives have of medtechs ing to surgeons, they also are shifting But then again, he notes that these – as being ill-prepared or unsuitable po- their attention to the bigger picture and companies might struggle to get beyond tential partners. the bigger impact on health care. This is some of the other barriers that exist in There is no one-size-fits-all approach, far from a new idea, but what is different the hospital. but medtech manufacturers do need to now is that product innovation and ser- Chapman reiterates that at the end of adopt a KAM mind-set, and work with vice offerings are being developed with the day, it’s no longer simply a clinician- hospitals’ ACA-led focus on outcomes, economic outcomes in mind, and are no focused transaction. “The trouble we’ve performance and value, says Chapman. In longer just targeted at the surgeon. (See had in the industry for a while is that older fact, ZS’ report identifies three ways for a sidebar online, “The US Health Care Mar- medtech partner to increase its perceived ket In Transition For Medtechs”.)  READ MORE ONLINE value and viability: “The goal is to launch products that • Rethink the value proposition. have a message about outcomes and • Refine key capabilities that are neces- economic impact,” says Chapman. The US Health Care Market In sary to deliver that value. And this is a big change. Companies Transition For Medtechs • Transform the go-to-market strategy. generally have armies of sales reps that As US providers and medtech Chapman concludes, “The advice I are very good at handling the clinical manufacturers boldly go into the would give is: Look at what you have and people, but not at dealing with admin- new outcomes-based world, they figure out how you’ll bring more value with istrative/economic buyers. “We’ve seen do so against the backdrop of a it.” This can be in combined packages examples of certain KAMs being more medtech industry that is undergo- and/or the addition of new services to give comfortable speaking to the C-suite, or ing its own changes. a portfolio a new lease of life. more comfortable speaking to IDNs and http://bit.ly/2d3X15U IV004918 organizations that are above the level of ASHLEY YEO the hospital,” says Chapman. But they are [email protected]

Cancer Moonshot To Tackle Hereditary Colon Cancer Screening

In early September, the Blue Ribbon Panel of the Cancer Moonshot program presented of the normal-risk population, could have 10 recommendations for improving the science and infrastructure supporting cancer their cancer identified and treated using research to the National Cancer Institute’s National Cancer Advisory Board. (Also see colonoscopy – makes the use of genetic "Cancer 'Moonshot' Recommendations On R&D Have Strong Patient Focus" – Pink Sheet, testing less feasible from a population September 10, 2016.) Among them was a demonstration project to implement genetic health strategy perspective. Plus, genetic testing on a wider scale in family members of people with Lynch syndrome and other testing only speaks to the hereditary risk inherited cancer-associated genetic mutations to determine whether they have inherited of developing colon cancer, and 95% of the same mutations. colon cancers are in people who don’t Fewer than 5% of patients with Lynch ment of a systematic process for assessing have a germline mutation. syndrome know they have it. Ten times as the available evidence regarding the valid- many individuals are screened for heredi- ity and utility of rapidly emerging genetic THE ROLE OF FAMILY HISTORY tary breast cancer as for hereditary colon tests for clinical practice), the American Further confounding the ability to clarify cancer (HCC), even though the incidence College for Gastroenterology and the and implement the testing paradigm is the of the two cancer types is the same. The National Comprehensive Cancer Network role of family history – a critical element combination of complexity of testing, con- (NCCN): they all endorse universal screen- of guidelines – in assessing risk of HCC fusing guidelines, reimbursement, lack of ing of tumors to look for evidence of MMR and physicians’ ability to recognize who IP and differences in patient advocacy for genes predictive of Lynch syndrome, but should get genetic testing, and when. a women’s health issue all come into play which could also be the result of a much “We know that if you do germline test- in explaining this gap. The breast cancer more common polyp. ing based only on meeting family criteria, narrative, after all (although most people Moreover, the ability to easily detect only 50% have a Lynch syndrome-related with breast cancer are much older) fea- and remove a suspicious polyp before it be- mutation,” Burke says. In addition, a tures Angelina Jolie and many thousands comes cancerous or spreads distinguishes treating physician may not make the con- 6 of supporters driving around with pink the colon cancer setting from that of many nection between a patient with a polyp ribbons on their cars. Dealing with the other cancers. “The beauty of colon cancer and their having a family history of en- colon, on the other hand, centers on an screening is that with its use we can remove dometrial or other type of colon cancer. organ society would just as soon ignore. polyps and prevent death from the cancer,” “They don’t think about Lynch syndrome If one has breast cancer it might be ap- says gastroenterologist Carol Burke, MD, of or other causes of hereditary colon cancer parent to other people, whereas colon is the Cleveland Clinic. That would seemingly and they don’t assess the risk correctly so easier to hide. But with greater visibility, support increased genetic screening for the they don’t offer testing,” she says, which how should the testing paradigm change? disease. But colon cancer screening, like often times would be of the family member “Broader testing would provide im- other screening paradigms, brings trade- who’s had the cancer, to be informative. portant information to people with these offs if healthy persons are subjected to Nor is the patient always thinking along mutations and help to guide their future medical interventions that don’t ultimately those lines. “Patients seeing a primary medical care,” says NCI acting director help them personally. care physician, OB-GYN or a GI specialist Douglas Lowy, MD. “In addition, follow- “If you already have cancer, the risk/ are not necessarily coming in to talk about ing this group will allow us to learn about benefit calculus changes because you are family history,” says Johnathan Lancaster, the disease process and why some go on already known to have a lethal condition,” MD, VP, oncology affairs and chief medi- to develop cancer and others do not.” says Louis Jacques, MD, of the health cal officer,Myriad Genetics Inc., which Inherited mutations in certain genes, care advisory services firm ADVI, and markets a colon cancer screening test and including those associated with micro- former director, coverage and analysis also a broader cancer risk assessment satellite instability (MSI) and mismatch group, Centers for Medicare and Medicaid panel that includes colon cancer-related DNA repair (MMR), increase the risk of Services. “So to the extent that patients genes. “It’s not trivial for a physician to developing Lynch syndrome, which is as- assume risks from treatment or further identify which patients should undergo sociated with colorectal, endometrial and testing, they are assuming a risk in a set- testing for genetic predisposition to colon other types of cancer. ting where they are already surrounded by cancer, and the criteria, although certainly The frequency of such testing is low risk and are seeking a clear benefit over designed to do that, make it complex.” despite guidelines calling for universal their current health status. You already The question then becomes if they do testing from various organizations. These have someone at a real decision point of identify the patient, do they know what include EGAPP (a working group for the acute actionability.” to do next – who is it that needs to have Evaluation and Assessment of Genomic In that sense, ironically, testing of a genetic testing for Lynch, how do they go Applications in Practice and Prevention es- large group of people who may not ever about ordering labs, how do they know tablished in 2005 to support the develop- develop colon cancer – and in the case what the test results mean, and then what

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do they do for that patient let alone family screening and have risk-reducing surgery. tal cancer to have greater clarity on which members? “I think the greatest barrier in But the evidence is scant.) modality sequence is most appropriate for this country to identification of Lynch and “When people look at incremental which group of patients,” Jacques says, other hereditary colon cancer syndromes is cost-effectiveness ratios and things because often when one looks at screen- educational,” Burke says. Improvements in along those lines, you have to start with ing, the intention and the available evi- workflow, office staff training, written and what is known about clinical effective- dence is around a specific test, not about electronic patient identification tools and ness. Because something can be more an overall multimodality strategy. In so education materials, insurance pre-verifi- expensive yet widely adopted and seen doing, it may be possible to change a para- cation processes and access to financial as worthwhile,” Jacques says. “For me, digm based on the most invasive way of assistance programs also are needed. “It’s it always comes back to the science. You screening by only sending the highest-risk going to take a flag in the medical record need real-world studies.” patients to the one that is more invasive, or information the patient can take to their The first step would be to perform a requires significant prep, etc. doctor which meet the criteria,” she says. study enrolling everyone who has colon “I don’t know that anybody other than “But we know [even] the criteria are not cancer and have their tumors tested for the federal government has a proprietary accurate enough to be picking up all the evidence of MSI, Burke says, then go on stake in devoting resources and setting up people who have Lynch syndrome.” to the next step, which is the risk assess- the best overall strategy for different pa- ment that can include the germline testing tients in different risk bands,” Jacques says. COST EFFECTIVENESS DATA NEEDED for Lynch syndrome. That strategy hasn’t “We’ve proposed that study,” says The Moonshot demonstration project is been adopted yet. “It takes organized ef- Burke. “We’d probably find the heredi- needed to begin the process of building fort and a system in place [within medical tary colon cancers are 15% or more. We cost-effectiveness data on colon cancer practices] in order for this to happen,” she are going to find lesser genes, but also screening. (A 2011 study by Uri Ladabaum, says, in large part to address the gaps in the high-penetrance genes like FAP MD, of the Stanford University School understanding and communication be- [familial adenomatous polyposis], MAP of Medicine showed that widespread tween the surgeon who removes the tumor, [MYH-associated polyposis] and those colorectal tumor testing to identify the pathologist who interprets it and the that cause Cowden syndrome, where we families with Lynch syndrome could yield treating physician, who could be a gas- can make an impact on decreasing death substantial benefits at acceptable costs, troenterologist or primary care physician. from cancer.” particularly for women with a mutation “I think it would be helpful given the IV004932 mark ratner 7 associated with Lynch who begin regular multiple screening modalities for colorec- [email protected] ❚ Deals of the MONTH IN VIVO’s editors pick August’s top alliance, financing and M&A deals.

lion in a Series A round co-led by RiverVest Venture Partners, Top Alliances: Novo Ventures, Roche Venture Fund and SR One. Founded GSK And Verily's Neuromodulation JV as Vasulox in 2006, Tioma has subsisted on multiple seed rounds up until the Series A came through. The company is GlaxoSmithKline PLC and Verily Life Sciences will invest up to among the many working on anti-CD47 antibodies, and will £540 million ($702 million) over the next seven years in Galvani use the proceeds from the financing to bring its lead candi- Bioelectronics, a new joint venture dedicated to breaching the date – an anti-CD47 immune checkpoint inhibitor – through next frontier in neuromodulation technologies. GSK, which proof-of-concept trials. will hold a 55% stake in the company, will contribute its drug development expertise, understanding of disease biology and know-how in getting clinical proof and evidence. Verily brings to the table its expertise in miniaturization technology, device Top M&A: development, as well as data analytics, machine learning and Pfizer Wins Medivation Bidding War software development. Pfizer Inc. announced August 22 that it won the competitive bidding process for Medivation Inc., agreeing to pay $81.50 Top Financing: per share, or roughly $14 billion, well above the high-end forecasts of some analysts and substantially higher than the Immuno-Oncology [Not Quite A] Start-Up offer rival Sanofi most recently put on the table in July. The high Tioma Raises $86 Million price Pfizer is willing to pay for the Xtandi (enzalutamide, for Ten-year old Tioma Therapeutics Inc., which is developing prostate cancer) developer highlights just how far big pharmas immunotherapies for solid and blood cancers, raised $86 mil- are willing to go to compete in oncology.

CVRx Funding Boost Will Sustain Barostim Heart Failure Device To US Launch

Privately-held CVRx Inc., developer of the Barostim Neo minimally invasive implantable Global MedTech Compliance Conference system with separate indications for heart failure and resistant hypertension, has scored (GMTCC) in Dublin in May, when In Vivo a major coup in securing $113 million in new funding in what remains a difficult market spoke with him about the company’s for medical device investment. The financing was led by Johnson & Johnson Development journey thus far and the potential of the Corp., the venture arm of Johnson & Johnson. CVRx technology – and about the equally Of equal significance, CVRx has also FDA said CVRx should work closely with major news of Yared’s designation as this year become one of the first benefi- the agency to figure out ways of speed- AdvaMed chairman for 2017–19, in succes- ciaries of the US FDA’s Expedited Access ing access: “They put a lot of internal re- sion to Becton Dickinson & Co.’s Vincent Pathway (EAP) program. This mechanism sources behind it.” Some of the innovative Forlenza. (Also see "CVRx’s Investment In was launched by the agency in spring tools were on the statistical side, some on HF And Wider Medtech Industry Set To Pay 2015 to facilitate patient access to new the trial design itself. Off" – In Vivo, July 2016.) life-saving technology for indications that Keeping the continuity achieved by existing therapies do not address. Strong FDA Interaction predecessors Forlenza, David Dvorak and But it could be said that the EAP pro- The process started with FDA assigning a others, in the areas of legal, regulatory, gram came at both a good and bad time project manager to CVRx, with both parties reimbursement and health economics, for CVRx. The Minneapolis, MN, company speaking together on a weekly basis. The and on trade and ethical issues, will likely had already designed a trial, in April 2015, agency came up with ideas, suggested characterize Yared’s work at AdvaMed. for Barostim Neo. It had done all the pre- reading material and advised CVRx on (Also see "Q&A With Nadim Yared: Ad- paratory work and was all but ready to go. avenues of approach. “It was very col- vaMed's Next Chair On Capital Formation But as CVRx CEO Nadim Yared explains to laborative. I’ve been in the medical device And Global Challenges" - Medtech Insight, In Vivo, at that very time the FDA issued space for more than 20 years and never ex- August 4, 2016.) The CVRx CEO will also its new guidance on EAP, which had the perienced such a deep interaction between seek to strengthen the good working rela- 8 promise of faster access to market. FDA and an industrial partner,” says Yared. tionship that AdvaMed has with MedTech “We decided we had to use it, even While CVRx was starting out on this ac- Europe chief executive Serge Bernasconi. though the EAP was new and we would tive program of working jointly with FDA, Crucially, Yared plans to give more have been one of the first to go through the company’s potential investors were attention to the specific needs of smaller it,” he says. already lining up to commit funding. But medical device companies, especially in It was also a learning curve for FDA, as they had to put their plans on hold pend- the area of capital formation. He notes that the agency wanted to monitor the value of ing the development of the new trial that Forlenza has already been sympathetic the program in its early stages. Other US FDA and CVRx were working on. This meant to the plight of smaller manufacturers, in device programs focus specifically on the Yared and his team had to interrupt invest- the knowledge that the device innovation premarket review of a company’s submis- ment activity and turn their attention to ecosystem can only keep driving forward sion. But with EAP allowing both FDA and the details of the trial. This took some if the smaller companies are also able to sponsors to focus on the early stages of a five to six months out of CVRx’s schedule. gain funding and keep innovating. product’s development, device manufac- But there was really no alternative, and “Someone with my experience of turers can get essential FDA help on the there was no precedent for this program. smaller companies’ needs can provide evaluation of eligible products that will Yared explains the sequence of events: continuity here, and can take it to the next ultimately undergo PMA or de novo review. “We received initial FDA approval for the level,” says Yared. “We found we had to use EAP, as it trial toward the end of the 2015, and re- There are thousands of smaller com- speeds access to patients by a couple of started financing arrangements during the panies (US device companies number years,” says Yared. He sees this regulatory JP Morgan conference in January [2016].” some 4,000 to 5,000, not including the mechanism as innovative in terms of what The “big picture” was agreed in March and supplier base), and many of them are not level of evidence a company can show the funding closed in July. members of AdvaMed or its US sister or- in the premarket versus the postmarket Securing funding requires a long-term ganizations MDMA (smaller companies) phase. The EAP provides for flexibility if effort in any case, Yared observes, never and MITA (electromedical and imaging certain elements cannot be proved in the mind having to put matters on hold, as technologies). “We need to increase our premarket phase – as long as the device CVRx had to. penetration to ensure all medtech com- is safe and effective. panies are well represented and their Yared clarifies, “The EAP allows some The AdvaMed Job: voice is heard,” says Yared. It was with of the detail to be worked out after the de- More Focus On The Little Guy that thought uppermost that AdvaMed vice has been introduced onto the market, The CVRx CEO was in fact finalizing the selected the CEO of a small company as so as not to delay access.” He adds that small details of the funding during the its next chair.

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to unlock the money markets for medical Constructive Relationship “inorganically.” His view is, “the more innovation,” he notes. With CDRH’s Shuren exits we see, the more the venture funds He may come from a small company (at are encouraged to invest in the medtech The $113 million funding includes eq- present), but Yared expects a productive space.” These are areas where there are uity financing totaling $93 million and a and constructive relationship with FDA’s big questions, Yared concedes, but he new $20 million debt facility.The proceeds Center for Devices and Radiological Health adds, “we do know where to start looking will primarily be used for completing the (CDRH) chief executive Jeffrey Shuren, MD. for the answers.” Baroreflex Activation Therapy for Heart Shuren has regularly made himself avail- Failure Pivotal Clinical Trial (BeAT-HF), able to AdvaMed on key issues of method Device Tax Fight Goes On and generally expanding CVRx’s global and process, and both parties – AdvaMed Regardless of who is in the White House commercial activities. and FDA – share the same high-level after the 2016 presidential campaign ends Yared says that CVRx now has enough objectives. in November, the industry’s message on cash to get Barostim Neo introduced into “We’ve had some friction, though,” the vilified US medical device excise tax the US for heart failure. Precisely when says Yared, fully expecting that to con- will be same. The device tax, which started that will be is uncertain – but two to three tinue at times. “There are always tensions in January 2013 but which is now subject to years is the likely time frame. Trial recruit- between the regulators and industry,” a two-year moratorium, is an “innovation ment started in April 2016, and is “going he notes. “We might agree on the goal, killer,” says Yared. well,” says the CEO, with 61 subjects but will often disagree on the way to get It’s also a misnomer, he adds. “People enrolled in 53 investigative centers (to there and the costs of doing so.” The talk about 2.3% – but that’s just off sales. mid-August). fourth iteration of the US device user fees, You have to remove that from the bottom A large part of the financing came from which should come into effect next year, line as well, and 2.3% from the top line lead investor Johnson & Johnson Develop- is likely to be one area where opposing equates to 23% off profits. And just con- ment Corp. J&J has supported CVRx as views are aired. sider that the average medtech spends an investor since 2007, either leading or But Yared offers a fair appraisal of 5% to 10% of its profits on R&D: the 2.3% co-leading every CVRx round of financing what CDRH has achieved under Shuren’s tax means a cut of a quarter to a half in since then. Yared describes J&J as being watch: “FDA reviewers now listen more to its R&D budget, says Yared. “Where does akin to a good older sibling and also as a the needs of the sponsor and tend to ask the innovation come from if we are having “phenomenal partner to CVRx.” how they can do things in ways that help to cut the organic R&D and the ‘inorganic Other existing investors, New Enter- 9 the applicant. In that way, we’ve seen a R&D,’ in other words, the ability to inject prise Associates Inc. and Ysios BioFund cultural shift within FDA.” It’s as if the money into smaller companies?” he asks. IFCR, also participated. New investors FDA has resolved to keep the safety and So the new US president can expect include Gilde Healthcare Partners, Action efficacy standards, but also to use science messages from device manufacturers Potential Venture Capital Ltd. (a strategic to reduce time lines and costs wherever and AdvaMed focusing on the innovation venture capital fund of GlaxoSmithKline possible. “It took a while to turn the big ecosystem. “We need to ensure that our PLC) and Windham Venture Partners. ship around,” says Yared, with a note of policies in the US are set up to encourage Of the financing, $20 million is a term appreciation for Shuren’s efforts. innovation where it matters: in improving loan agreement with specialty finance firm and saving lives. We also need to get the Oxford Finance LLC, which will be used to Access To Capital At Top message across that innovation reduces pay down CVRx’s existing debt from Sili- Of The Agenda the cost of care. Without innovation, con Valley Bank. “This debt will be used Of major importance is the drive to begin those things are not going to happen,” to cover and close that, and provide addi- the debate about how smaller companies Yared states. tional runway for CVRx,” says Yared. CVRx can access capital – private or public. Encouraging the private sector to in- wanted to maintain a healthy debt equity Yared says the way to start is to under- vest more in the innovation ecosystem is rate and not use equity to pay down debt. stand all of the obstacles that slow down a related priority, but it’s a message that’s The CEO says that, while new, the capital formation and cash flows. He also neither easy to put over or respond to. Job investment, in which Leerink Partners believes finding a way of securing reim- creation will be the consequence, says and Armentum Partners served as advi- bursement for novel therapies would be Yared, noting however that the industry sors, might have taken longer than CVRx key. Most VCs ask manufacturers when – has its work cut out to find device thera- thought it would. The investors can see or even if – a device will be paid for, and pies for the many unmet needs. that CVRx has a “great product and is go- these are difficult questions to answer ing after a great market where there is a even after a product has been approved. CVRx’s Winning Ways clear, unmet need.” Yared also believes Other Yared priorities at AdvaMed are With Investors the tailwind it has had since 2011, when to be easing access to the IPO market for At the same time, the markets are still dif- the second-generation Barostim device smaller companies; and addressing the ficult, and venture money is still tight for was developed, will continue to blow. way the decisions taken by medium and medtech. “At CVRx, our new investment is IV004928 large medtech companies are rewarded – a ‘big number,’ but such transactions are ASHLEY YEO and encouraging them to invest a bit more rare and companies have to work very hard [email protected]

2016 Pharma Dealmaking: Waiting On The High-Value Deals

Six pharma deals announced thus far in 2016 carried up-front values of $1 billion or more, down considerably from the high-volume, high-value M&A industry experi- 10 enced the prior two years. Pharma manufacturers appear to be recalibrating, but fundamentals suggest dealmaking will pick up. Pfizer’s $14 billion offer for Medivation might represent a turning point. By Jessica Merrill SHUTTERSTOCK:pathdoc

❚ High-value biopharma M&A is ❚ Changes in the specialty ❚ As big pharma focuses its ❚ Pfizer’s August 22 down in the first eight months pharma environment, pipeline and portfolio on announcement that it won of 2016, compared with the notably Valeant’s absence high-priority therapeutic the auction to acquire activity experienced in 2014 from the negotiating table areas, companies are Medivation for $14 billion and 2015. Just six deals while it transitions through monetizing low-priority shows that pharma still has announced from January a pricing and accounting assets, presenting new an appetite for big deals through August had up-front scandal, have impacted the opportunities for deals. when the target is right. values of $1 billion or more. deal landscape.

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com GROWTH ❚

igh-value, high-volume merger with Allergan PLC) was a whop- pharma M&A was pre- per: Teva Pharmaceutical Industries dicted by many in 2016, Ltd.’s acquisition of Allergan’s generic but the big deals haven’t drug business for $40.5 billion. AbbVie materialized – yet. While Three of six Inc.’s acquisition of Pharmacyclics Inc. Hthe volume of deals signed so far this year was the second biggest deal announced has continued to be robust, the total value acquisitions so far with a deal value of $21 billion. (Also see has been below what was seen in the two “In Buzz Of 2015 Pharma Dealmaking, prior years, leaving many to wonder when with up-fronts of over Immuno-Oncology Is Queen Bee” — In momentum will pick up, or if it will at all. Vivo, September 2015.) The announcement August 22 that $1 billion involved The year 2014 had even more bombshell Pfizer Inc. beat out several rivals in the deal news, with Actavis agreeing to buy auction to buy Medivation Inc. with an cancer companies and Forest Laboratories Inc. for $23.9 billion, $81.50 per share offer, about $14 billion, then turning around and buying Allergan could mark a turning point for M&A in more than half of the for $65.4 billion, while GlaxoSmithKline 2016. Other potential takeout targets like PLC and Novartis AG agreed to an inven- Incyte Corp. and BioMarin Pharmaceuti- tive asset swap, trading GSK’s marketed cal Inc. got a boost on the news, with in- 21 partnerships or cancer drugs for Novartis’ vaccines with vestors encouraged that M&A might heat billions changing hands. The $200 billion up in the second half of the year. alliances signed in the in biopharma M&A in 2014 was more than With Pfizer/Medivation, six pharma twice the average annual deal volume deals have been announced in the first first eight months of in the prior decade. (Also see “A Banner eight months of the year with up-front val- Year For Pharma: M&A Tops 2009 Merger ues of $1 billion or more, compared with the year with an up- Mania” — In Vivo, September 2014.) 17 in the first eight months of 2015 and 20 “[Life science companies] have experi- such deals in the full year 2014, according front value of $40 enced a drop in the number of deals that to Informa’s Strategic Transactions. have been announced this year relative to The recent tapering off of the mega million or more recent periods,” comments PwC’s Dimitri 11 dealmaking that industry experienced Drone, global pharmaceutical and life in 2014 and 2015 raises questions about sciences leader, deals practice. “But you whether those years were outliers for involved oncology have to keep in mind we have been at high deal activity or if M&A is set to resume at levels of activity over the last couple of a similar pace once industry has a chance assets. years. The fact that it has dropped is not to recalibrate and digest some of those a concern to me in terms of M&A going previous big buy-outs. away,” he adds. “In my mind, it may never The fundamentals driving pharma M&A go away for this sector because it is such haven’t changed: the high-risk nature of a part of how they operate.” drug development, the continuous cycle Consulting firm EY predicted at the be- around filling the pipeline, payer con- ginning of the year that biopharma M&A solidation and industry’s cash stockpiles. would surpass $200 billion in value in That’s why high-value dealmaking may 2016 in its “Firepower Index and Growth just be on hiatus. The competitive case Gap Report,” a figure it called the “new of Medivation shows big pharma still normal” for pharma deals. (Also see “Meet has plenty of appetite for M&A when the The New $200bn Normal In M&A, EY Says” target is right. In terms of deal volume, — Pink Sheet, January 11, 2016.) In a recent activity has been robust in 2016, driven interview, global life sciences transaction by smaller acquisitions, licensing deals advisory services leader Jeffrey Greene and alliances. Deals with non-traditional said he believes the biopharma industry partners – companies that provide data could still hit that target, powered by a management tools or health care services brisk pace of deal activity and potentially – are also on the rise. (See sidebar, “The more deals to come in the back end of the Rise Of The Alt-Deal.”) year. “From a dollar volume perspective, It’s difficult, too, to compare the it’s unlikely we will be as high as last year current environment with the banner in terms of announced deals,” he con- dealmaking years of 2015 and 2014. cedes. “But in terms of number of deals, I The highest-value deal signed in 2015 think we are going to be robust this year, (excluding Pfizer’s $160 billion failed and I think we have a good shot at getting

©2016 Informa Business Information, Inc., an Informa company September 2016 | In Vivo ❚ GROWTH ❚ The Rise Of The Alt-Deal Pharma’s interest in using big data to demonstrate the value of its to that $200 billion new normal.” medicines and efforts to expand services to patients beyond the pill The bidding war that ensued for cancer are resulting in more deals between biopharma and non-traditional company Medivation shows just how partners like digital health firms, data management companies and much drug companies are willing to spend other service providers. to get their hands on an important asset The growing interest in these kinds of alternative deals, generally in a high-priority therapy area such as partnerships and alliances instead of outright M&A, was evident in oncology. Sanofi launched a hostile bid 2016. This increasing emphasis on alliances with partners outside for the Xtandi (enzalutamide) developer the industry that provide related services is expected to continue. in May, and eventually raised its offer in “When I talk to the larger life sciences companies, they are very ac- July to around $10 billion, but Mediva- tive in alliances with non-traditional partners,” says PwC’s Dimitri tion responded by signing confidentiality Drone, global pharmaceutical and life sciences leader, deals practice. agreements with a number of interested parties. (Also see “Medivation Rejects “For years the model has been, [here’s] a company like me. I’m going Sanofi’s Latest Bid, But Enters Confidential to partner with them and we are going to bring a drug to market,” Negotiations” — Scrip, July 6, 2016.) he says. “Now you are seeing a lot of discussion around a company Companies ranging from Novartis and unlike me, and we are going to partner to try to understand more Pfizer toMerck & Co. Inc., AstraZeneca about how drugs interact with a patient population, how to make PLC and big biotech were supposedly at sense of all this big data that is being created as it relates to phar- the negotiating table, but it was Pfizer maceuticals and health care.” that walked away the winner with a $14 EY’s global life sciences industry leader Pamela Spence agrees. “I billion offer, 21% higher than the com- can very clearly see a world where new combinations and alliances pany’s already inflated stock price. Some are performed with companies who can help deliver services whilst analysts questioned, though, if winning in pharma, medtech, biotech stick to their core,” she says. this instance was something to be proud Teva Pharmaceutical Industries Ltd. chief scientific officer Michael of, when the title means paying the most. Hayden, PhD, addressed the Israeli pharma’s interest in non- Before buy-out speculation arose, just traditional alliances during the company’s second-quarter sales six months earlier, Medivation was trading and earnings call. 12 at $33. Sanofi’s most recent bid publicly put on the table in July was $58 per share “The partners that we are looking at are not just around products, plus a $3 contingent value right linked to but also around technologies that can enhance compliance and ad- the pipeline. (Also see “Medivation Rejects herence and add to the quality of life of the patients that we serve,” Sanofi’s Latest Bid, But Enters Confidential he said. Teva has been active in the space, signing deals last year Negotiations” — Scrip, July 6, 2016.) Some with partners like Microchips Biotech to apply its implantable drug analysts had been forecasting a final take- delivery device to Teva’s portfolio of products and IBM Watson Health out bid of between $68 and $75 per share to analyze big data. on the high end. Now investors will be Many big pharmas are making similar moves. Here is a look at some wondering if Pfizer overpaid for Mediva- of the alternative partnerships industry has signed this year: tion and whether the prostate blockbuster • GlaxoSmithKline PLC and Verily Life Sciences (formerly Google Life Xtandi and two pipeline assets in develop- Sciences) will form a new company called Galvani Bioelectronics to ment will turn out to be worth the price. develop and commercialize bioelectronics medicines, with plans to Specialty Pharma Cooling Its Heels invest £540 million in the joint venture over seven years. Outside of the Pfizer/Medivation deal, ac- • Astellas Pharma Inc. is developing a new investment venture DigiTx quisitions valued at $1 billion up front and Partners with health care venture firm MPM Capital; DigiTx will invest higher have been few and far between, in broad initiatives across the digital health arena. and there are some possible explanations • Pfizer Inc., in April, said it is working with IBM to develop a remote for the slower pace of high-value M&A. monitoring system for Parkinson’s disease. The system, made up There have been notable changes in of sensors and a mobile device, will provide around-the-clock, the industry in the last year, impacting real-time symptom information to clinicians, with the goal of better the market for deals. Specialty drug de- understanding disease progression. velopers like Valeant Pharmaceuticals • Novartis AG and Microsoft revealed in February how they are International Inc. and Allergan, which developing Microsoft Kinect (used with an Xbox games console) had been driving a lot of the deal activity as a tool called Assess MS to more consistently measure multiple in the last two years, are in the midst of a sclerosis patients’ performance in tests and better assess disease reset. Valeant, which has been one of the progression. busiest dealmakers in the sector, has put • Novartis teamed with Qualcomm Life in January to develop a next- M&A on hold while the company tries to generation Breezhaler that will give patients real-time access to data on their inhaler. In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com GROWTH ❚ recover from a spectacular blowup that they look to drive growth as independent saw its market value plummet by more companies. Pfizer has made its move with than 90% and the architect of its buy- the announcement of the Medivation and-cut business model, CEO J. Michael buy-out, but rivals that dropped out, and Pearson, out the door amid accounting “I hear from time to most especially Sanofi, which initiated and drug pricing scandals. (Also see “Vale- the proceedings in the first place, will be ant’s Pearson Is Out, As Hunt Begins For A time people say that looking elsewhere for opportunities. CEO To Right The Wrongs” — Pink Sheet, Pfizer was the buyer in another of the March 2016.) it’s a buyer’s market big deals announced so far in 2016: the Allergan, meanwhile, is busy integrat- $5.2 billion acquisition of Anacor Phar- ing its own big acquisitions, and it was currently in business maceuticals Inc., the owner of the non- ready to put a freeze on its biopharma steroidal topical phosphodiesterase-4 spending account for a union with Pfizer. development, but I (PDE-4) inhibitor crisaborole, pending at The deal collapsed in April when the US FDA for approval for atopic dermatitis. Treasury announced new rules eliminat- have to say as a buyer, (Also see “Pfizer Buys Anacor With Block- ing some of the tax advantages Pfizer buster Ambitions For Crisaborole” — Scrip, would have gotten from the merger.(Also May 16, 2016.) On the heels of Medivation, see “It’s The End Of Pfizergan, So Pfizer when you find really Pfizer also announced August 24 that it Will Have To Grow It Alone” — Scrip, April will buy AstraZeneca’s late-stage and 7, 2016.) strong science or good commercial small-molecule antibiotics The government’s 11th hour move to portfolio outside the US in exchange for block the Pfizer/Allergan merger and to assets then it doesn’t $550 million up front plus a $175 million put a kibosh on inversion deals – whereby delayed payment in 2019; Pfizer intends a company redomiciles outside the US to a feel like a buyer’s to add the products to its Essential Health new tax-friendlier country via acquisition portfolio, made up of mature drugs. (Also – is also clearly impacting dealmaking market.” see “AstraZeneca Sells Small-Molecule this year. Pfizer/Allergan would have been Antibiotics To Pfizer But Still Investing In the biggest merger in pharmaceutical his- – Shaun Grady, R&D” — Scrip, August 24, 2016.) 13 tory had it gone through. If that deal had Nonetheless, Anacor and even Medi- remained intact, reaching $200 billion in AstraZeneca vation are more bolt-on deals by Pfizer’s biopharma deal value in 2016 would have standards. “For a company of Pfizer’s been a small hurdle for industry to hop size, a Medivation deal is barely a needle- over rather than a pole vault. mover,” Bernstein Research analyst Tim Another issue is the macro-economic Anderson said in a research note the day environment and political uncertainty the deal was announced. around the world, with a contentious The big pharma has money to burn now presidential race underway in the US that it isn’t buying Allergan, and Allergan and the UK’s Brexit vote adding to the has the proceeds from the $40.5 billion uncertainty in Europe. The impact of sale of its generics business to Teva, which Brexit will require time to digest. EY’s closed in August; CEO Brent Saunders has global life sciences industry leader Pamela vowed the company will direct some of Spence says that although there remains that cash toward dealmaking. (Also see a lot of uncertainty around Brexit and the “Teva Embarks On New Phase With FTC European political climate, the decision Clearance Of Allergan Generics” — Scrip, by Britain’s voters to leave the European July 2016.) In a last minute decision, Al- Union probably won’t have a huge impact lergan also added its Anda generic drug on pharma dealmaking. “Fundamentally distribution business to the arrangement, the science hasn’t changed overnight, the agreeing to sell it to Teva for $500 million. diseases and unmet medical needs haven’t (Also see “Teva Advancing Two Advair changed overnight,” she says. “I see it Generics With Late 2017 Target” — Scrip, as a short-term hesitation rather than a August 4, 2016) fundamental reshaping.” Industry watchers will keep looking for clues about what Allergan and Pfizer Money To Burn will do next. Pfizer chairman and CEO Ian As for the Pfizer/Allergan fallout, the Read says Pfizer will likely have a more expectation is that both firms will be “balanced” approach to M&A now that it is active dealmakers moving forward as buying Medivation. “We’ll still continue to

Exhibit 1 tesirine), an antibody drug conjugate that 2016’s Top Deals By Up-Front Value (January-August) targets the stem-cell protein DLL3. Mylan NV’s acquisition of Meda AB for $9.9 billion was one of the more transfor- Date Deal Up-Front Value mational deals announced in 2016. The generic drug company announced it would August Pfizer buys Medivation $14bn buy the Swedish consumer health care firm in February after failing to buy over-the- counter drug specialist Perrigo Co. PLC February Mylan buys Meda $9.9bn last year. (Also see “Mylan Turns To Meda In Sweden For Open Door Into Consumer Market” — Pink Sheet, February 15, 2016.) April AbbVie buys cancer firm Stemcentrx $5.8bn More Focus Means Buying And Selling May Pfizer buys Anacor $5.2bn One theme within biopharma that is influ- encing M&A is focus. Drug manufacturers Jazz buys cancer drug developer Celator have shifted their approach to R&D in May $1.5bn Pharmaceuticals the last three to five years, with the aim of focusing their portfolios and pipelines July Galenica buys Relypsa $1.5bn in areas where they can compete to win. The strategy means companies are shopping for new assets to bring in, but it also SOURCE: Strategic Transactions | Pharma Intelligence, 2016 means there are a lot of non-core assets that can be monetized. The strategy is being look at business development, if it creates earnings call August 8 that the company deployed by big pharmas almost unilater- value for shareholders, but I believe we’ll has earmarked more than $20 billion to in- ally, including players like Pfizer, Novartis, be taking a more balanced view going vest in acquisitions. But he explained that 14 AstraZeneca, GlaxoSmithKline, Takeda forward,” he says. Allergan is shopping for “stepping-stone Pharmaceutical Co. Ltd. and others. Investors are focused on a big decision assets,” which seems to debunk rumors The strategy is driving M&A as com- Pfizer has promised to make by the end the company might consider a bigger deal, panies shed some assets and buy others. of the year: whether or not to split up the such as making a play for Biogen Inc., A poster child for the way R&D focus is company into an innovative and estab- which has been rumored. “We are not impacting M&A was the 2014 asset swap lished products business. A decision on looking at and we are not focused on any between Novartis and GSK, in which that question would surely inform Pfizer’s large transformational M&A,” he insisted. Novartis acquired GSK’s marketed cancer M&A strategy and impact the amount “We are focused on stepping-stones.” drugs for $14.5 billion in exchange for of flexibility Pfizer has to do big deals. Novartis’ vaccines and the two companies Read said as much during the company’s Stepping-Stones also established a consumer health care second-quarter sales and earnings call For the most part, that’s what you would joint venture. “You see deals being done August 2: “You don’t have the same op- call the types of deals that have been by big pharma that play into the strategic portunities of deployment of cash if you’re signed in the first eight months of 2016. focus theme, where they are looking to two companies as you do if you’re one. In addition to Pfizer’s two acquisition acquire in their areas of strength,” says You have less choice as to which areas announcements, other deals with up- EY’s Greene. you put it.” fronts of $1 billion or more were Galenica Teva chief scientific officer Michael Pfizer has pursued two mega-mergers Pharmaceuticals Inc.’s acquisition of Hayden, PhD, talked about focus and M&A recently, first AstraZeneca in 2014 and Relypsa Inc. and Jazz Pharmaceuticals during the company’s second-quarter then Allergan in 2015, though neither deal PLC’s acquisition of Celator Pharmaceu- sales and earnings call August 4. Teva has came to pass. In both cases, Pfizer was ticals Inc., both for $1.5 billion up front. been working to streamline its pipeline in motivated primarily by the tax benefits it (See Exhibit 1.) four areas on the specialty side of its busi- could achieve by taking over the target’s AbbVie’s acquisition of the cancer com- ness over the last two years: neurodegen- tax domicile. After the US Treasury’s lat- pany Stemcentrx Inc. for $5.8 billion was erative disease, movement disorders, pain est steps to curb inversion deals, Read one of the more expensive acquisitions so and respiratory. “As we look at more focus says the company would not pursue far this year and drew criticism from some and with some of our colleagues and other another inversion deal under the current investors because of the high price tag, pharma companies … refocusing their environment. one of the highest valuations for a ven- pipelines, and the recognition of Teva Meanwhile, Allergan’s Saunders said ture-backed biotech takeout ever. Stem- becoming a significant player in migraine during the firm’s second-quarter sales and centrx develops Rova-T (rovalpitizumab pain, movement disorders, neurodegen-

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com GROWTH ❚

Exhibit 2 true of all the peer group, and therefore A Robust Licensing And Partnering Agenda (January-August) people pretty much know where they want to play,” the company’s head of business development Shaun Grady said in a Date Deal Up-Front Value recent interview. (Also see “AstraZeneca’s Seasoned Dealmaker Grady On Strategy To Boehringer Ingelheim partners with AbbVie Grow Pipeline” — this issue.) March on two clinical-stage antibody therapies for $595m The challenge, he noted, is that cer- autoimmune disease tain high-priority therapeutic areas have become ultra-competitive from a busi- AstraZeneca granted Aspen ex-US rights to July $520m seven marketed anesthetic products ness development standpoint. “If good, high-quality science or product portfolios emerge on the market, you’re always go- Chiesi Farmaceutici buys three non-core CV May $260m assets from The Medicines Co. ing to attract the attention of the people for whom that’s a priority area,” he said. Celgene partners with Jounce on lead IO “I hear from time to time people say July $225m candidate JTX2011 and four others that it’s a buyer’s market currently in business development, but I have to say as a Merck partners with Moderna to develop buyer, when you find really strong science June $200m mRNA-based personalized cancer vaccines or good assets then it doesn’t feel like a buyer’s market,” Grady added. “You’re inevitably going to be facing competition Exelixis licenses Ipsen rights outside US, February $200m from clever, motivated expert people who Canada and Japan to cancer drug cabozantinib are seeking to play in the same areas.” Medivation is a prime example. Oncol- Celgene signs new alliance with Agios, May $200m ogy, without question, is the most com- focused on metabolic immuno-oncology petitive area of business development in pharmaceuticals today, and the therapy 15 Symphogen grants Baxalta options to license area is considered a priority among big January $175m global rights to six immuno-oncology projects pharmas almost without exception. Poten- tial targets with a marketed cancer drug in Xencor and Novartis team up on bispecific their portfolio – let alone a blockbuster July antibodies as cancer immunotherapies, using $150m – in addition to a late-stage pipeline can- Xencor’s XmAb platform didate are hard to come by. Nestle licenses rights outside the US and Oncology drove dealmaking in 2015 Canada to four of Seres’ drug candidates too, and particularly immuno-oncology. January $120m for Clostridium difficile infection and But cancer deals often happen earlier in inflammatory bowel disease the drug development life cycle, either around a technology platform or early- SOURCE: Strategic Transactions | Pharma Intelligence, 2016 stage drug candidate. Oncology deals are therefore frequently licensing or eration and respiratory, we’re seeing a IL-17 blocker brodalumab showed a risk partnering deals rather than outright significant number of opportunities, very of suicidal ideation in late-stage trials. mega-buster acquisitions. Oncology has exciting, come our way,” Hayden said. (Also see “AstraZeneca Hands LEO Der- continued to fuel dealmaking thus far Teva said it is busy looking at numerous matology Potential” — Scrip, July 3, 2016.) in 2016. Three of six acquisitions so far products and could be ready to announce The firm also signed a big risk-sharing with up-fronts of over $1 billion involved additional deals in 2016 or 2017, despite di- collaboration with Eli Lilly & Co. on gesting the major acquisition of Allergan’s the oral beta-secretase cleaving enzyme generic drug business. (BACE) inhibitor AZD3293 for Alzheimer’s READ MORE ONLINE AstraZeneca has been active mon- disease in 2014. etizing assets that fall outside of its It has completed other like-minded See the top 25 deals by up- core therapy areas: oncology, respira- deals, all part of an externalization initia- front value and the top 25 tory, cardiovascular and metabolism. tive aimed at divesting non-core assets parterning and licensing In July, the company gave rights to two while also building up the pipeline in deals year to date at: skin disease drugs, tralokinumab and core areas. brodalumab to Leo Pharma AS for $115 “It’s not only AstraZeneca that’s trying http://bit.ly/2cwBvFa million up front; the deal came after the to be much more focused, I think that’s

cancer companies and more than half of “They need to be thinking about the the 21 partnerships or alliances signed same things some of the larger more main the first eight months of the year with ture life sciences companies have been an up-front value of $40 million or more thinking about for years, which is, ‘I have involved oncology assets, according to “Asset swaps, while to fill the pipeline,’” Drone says. “I do Strategic Transactions. (See Exhibit 2.) think M&A is right around the corner for As pharmas continue to focus their port- infrequent in number, some of them.” folios that could mean more separations Companies such as Celgene, Gilead, of business segments by diversified com- are extremely powerful Regeneron Pharmaceuticals Inc. and panies, a strategy that has been in play for Biogen could have increasing influence several years, going back to Pfizer’s spin- because you create a at the negotiating table. Biotechs also out of its animal health business into new risk becoming takeout targets if their company Zoetis in 2013. Since then, others whole lot of deal valuations dip too low in the current have also sold off their non-priority busi- biotech sector reset. Many biotech stocks nesses. This year, Sanofi reached a deal currency in doing have fallen in the first part of 2016, with with Boehringer Ingelheim GMBH in July the biotech BTK Index down 27% at the to exchange its animal health business end of the first quarter versus the 2016 Merial for Boehringer’s consumer health them.” opening. It has rebounded considerably care business, with Boehringer agreeing since, down 9% as of August 23 versus to pay Sanofi €4.7 billion. (Also see “Sanofi – Dimitri Drone, PwC the January 4 opening. Adds Consumer Brands, Grows Footprint Biogen, in particular, is a company that With Boehringer Ingelheim Deal” — Pink is considered an acquisition candidate, as Sheet, June 28, 2016.) its stock price has fallen amid moderating The situation Pfizer is contemplating to sales of its blockbuster multiple sclerosis break out its mature drugs business into drug Tecfidera (dimethyl fumarate) and a separate company would be a ground- few notable late-stage assets to drive near- breaking one if Pfizer decides to do it. term growth. 16 Other pharmas like GSK also have dedi- The biotech’s CEO George Scangos an- cated established products businesses nounced in July plans to retire after a suc- that could be candidates for a similar cessor is named, increasing speculation spin-out or separation. of a potential buy-out. (Also see “Scangos PwC’s Drone predicts more asset swaps Leaves Biogen Transformed And Transi- will be coming. “I personally think that tioning” — Scrip, July 21, 2016.) asset swaps, while infrequent in number, Many investors have been waiting for are extremely powerful because you cre- falling biotech valuations to fuel M&A this ate a whole lot of deal currency in doing year, but those deals haven’t happened. them,” he says. The challenge is finding Potential acquirers say that despite the the right partner to negotiate a deal with. drop in market value, the value in the “You can’t just put two companies minds of investors and management together, and you need negotiation,” hasn’t changed. Drone says. “There are a whole host of AstraZeneca’s Grady insists that good things that make it challenging for a deal science will always command premium to get signed.” But, he says there are still interest. “I think it’s much more scientific plenty of assets that could be traded dependent or commercial opportunity across pharmas. determined rather than what might be happening on a particular stock exchange What’s Next For Biotech? or capital market,” he says. Biosimilars could be an area ripe for The second half of the year appears dealmaking, Drone predicts, as well as to be turning a corner with Pfizer’s high- biotechs worth a couple of billion to $20 value acquisition of Medivation. Now billion to $30 billion, a valuation he says investors will just have to wait and see if is in a “sweet spot” for acquisitions. And the momentum continues. for some of the bigger biotechs, it might be IV004922 time for them to become acquirers now that they have matured and launched their own Comments: commercial drugs, some quite successfully. Email the author: [email protected]

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In Vivo Pharma intelligence | invivo.pharmamedtechbi.com ©2016 Informa Business Information, Inc., an Informa company September 2016 | In Vivo ❚ INNOVATION BTG Deals Its Way Into Interventional Medicine

UK-listed BTG PLC is on a route to a major future in interventional medicine, having built solid foundations in licensing and specialty pharma. CEO Louise Makin describes the deal- and decision-making rationale that has allowed a midcap player to set billion-dollar plus ambitions in interventional medicine, based on organic and M&A growth.

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Ashley Yeo K-listed company BTG PLC has a simple business strategy for success in a highly competitive sector: Target patient populations that are poorly served The last decade has seen BTG PLC by existing treatment options, and that are cared for by specialist physi- transform from an IP commercialization cians with whom BTG can partner in a drive to deliver better health care. company into a specialty health care The company also employs a refreshing transparency about its activities business, adding new strengths in andU conveys a good deal of confidence in its portfolio of specialty pharma products – acute specialty pharmaceuticals and toxicity antidotes for which there remain no competing products – and interventional interventional medicine. medicine (IM) solutions. IM is where BTG sees its future, but it’s also an area where the company’s franchises will face competition. Using the proceeds of cash-generative BTG CEO Dame Louise Makin oversees the company’s fundamental business strategy of pharma and legacy licensing activities, reinvesting income from both the licensed products (including the Johnson & Johnson- the company is starting to meet its big licensed Zytiga (abiraterone acetate) – with sales of £119 million/$179.5 million in 2015–16, ambitions in interventional oncology, vascular and pulmonology. still BTG’s biggest-single product) and specialty pharma products into the interventional oncology, vascular and pulmonology franchises. The latter comprise minimally invasive products whose use reduces hospital length-of-stay, and so are widely seen as having CEO Dame Louise Makin has overseen a number of M&A plays and product more than just short-term attractiveness. Indeed, many see them as future-proofed deals, giving one of the UK’s few technologies, given their potential to save providers money. mid-size life science companies the Appointed in 2004 from Baxter Healthcare Corp., and on a turnaround mandate, Makin platform for further growth, while very swiftly identified the need for BTG to have more of its own skin in the market. BTG developing a unique culture. was owned by the UK government until it was privatized in 1992, and secured its own listing in 1995. But the directors realized over time that it lacked a business model for With the post-year-end purchase of investors. As an IP commercializer, it had cash flow, but was providing no value-added cryoablation oncology company Galil steps. A new impetus was required. Medical still being integrated, Speaking to In Vivo, Makin described the $3.34 billion market cap (July 29) group’s attention is turning already to new value creation strategy and the rationale behind its recent M&A record. The M&A bolt-ons and what place BTG sees for began in 2008, with Protherics PLC, and continued with the bead oncology company itself in the longer term. Biocompatibles International PLC, which was the foundation stone of BTG’s now fast- growing interventional medicine franchise. The M&A momentum has since continued

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com INNOVATION ❚

largely unabated, most recently seeing of assets – launched products in their own With those thoughts in mind, BTG liver cancer cryoablation technology de- niche – which the company would seek to next set its sights on Biocompatibles veloper Galil Medical Ltd. come in after bring back within BTG, set up its own sales International, a leader in embolizing year-end 2015–16, to strengthen the IM force, and thus be profitable from day 1. bead technology used in treating liver offering further. “This would mean taking only execution cancer. IM has made important strides risk, not launch risk,” says Makin. in the liver, given its biology and the dif- Big Decisions And Big Targets But there was added spice, as BTG ficulties in treating tumors. The deal to The decision to focus on IM will ultimately unveiled the acquisition plan in the week acquire Biocompatibles, completed in be seen as a defining moment in the his- that Lehmann Brothers collapsed (mid- January 2011, gave BTG a foothold in IM. tory of BTG, which had been founded September 2008). “It was an interesting Makin describes it as a 90-degree turn in the 1940s as a UK government tool to time to launch a company,” says Makin in terms of BTG’s industry direction, but commercialize life sciences and physical with no little understatement. And it was identical (to Protherics) in terms of the sciences technologies. But many other big with some relief that BTG did manage to concept: “We pulled distribution back decisions have been taken and thresh- secure shareholder support during what from the US, where AngioDynamics Inc. olds crossed by the group under Makin’s was a torrid time for the markets. Prother- was the distributor [with a contract break guidance, including the recent listing in ics completed in December of that year. point in January 2012], and built our own Forbes’ 20 Leading Innovative Growth At that point, BTG’s follow-on plan was interventional oncology sales team while Companies (on the strength of five-year to do more deals and bring in more assets being able to leverage the US commercial average sales growth of 32.1%), and the in the specialty pharmaceutical market. infrastructure.” group’s decision to set a sales target of But it was the time when getting into The Biocompatibles franchise recently £1.5 billion by 2021–22. specialty pharma was a popular idea, and launched its radiopaque LC Bead LUMI in One of Makin’s first decisions in the so prices were rising and valuations were the US. The beads are visible to the radi- CEO’s seat was to “shrink” the company’s tending to become somewhat unrealistic. ologist during and after injection. BTG’s asset base to focus only on life sciences. An unfortunate trend, but, maybe in the R&D also includes work in biodegradable Continuously reinvesting its royalty pro- long term, a blessing in disguise, given beads for benign tumors and beads that ceeds saw the firm, then with just 57 staff, the decisions BTG has taken since then. carry novel chemotherapy agents. reach a point where it was generating “We were in the privileged position of Biocompatibles not only gave BTG its more income than costs. But the question being able to take a step back, do a big entry into IM but also set the tone for 19 was how to use it. Makin says, “In review- sweep of what was actually happening subsequent deals. Indeed, the company ing the question of how do we want to in health care and identify clearly the had diligently mapped out the world of IM grow, our belief was that in life sciences, trends and the areas of value where a new to identify other potential technologies. you need to be selling and marketing your company could not only play, but win,” “What we’ve seen since Biocompatibles own products in order to make sufficient says the CEO. is a lot of execution on the technologies returns for a sustainable business.” that we have been watching for a while,” That decision effectively crystalized Looking For Inspiration Within says Makin. BTG’s approach to the industry and was This big external sweep also led BTG to Biocompatibles is the most advanced the catalyst for most of what has hap- look within too, and to the one portfolio company within BTG’s IM portfolio in pened since. exception to its licensing and specialty terms of commercial development. It The next step was to seek to de-risk the pharma model: the injectable foam is part of the interventional oncology commercialization of some products, as minimally invasive image-guided varicose franchise, which has been expanded to BTG saw that there were big risks on both vein therapy, Varisolve (polidocanol, include radioembalization therapy the launch and the execution side. In the later renamed Varithena). The prospects TheraSphere, previously owned by knowledge that many companies do not of bringing in-house similar procedures Nordion Inc., and latterly the private survive the process of setting up a sales encouraged BTG’s management to scan for company Galil Medical. Interventional force for the first time, BTG sought a dif- prospects in other areas of interventional vascular includes EKOS Corp. and Vari- ferent solution, which is what prompted medicine, including oncology. thena, while PneumRx Inc. is a part of the Protherics purchase; in Makin’s view So the route was set. “We were not interventional pulmonology, which BTG this was a de-risked way of setting up a planning to take on the big guys, with all sees as an emerging area. sales and marketing infrastructure in their experience, but we did ask ourselves Most of BTG’s M&A deals have been the US. questions about where this was all going,” of companies that were originally VC- Protherics was the license holder of a Makin says. It was obvious to BTG that backed and had brought their technology group of niche antidotes for North Ameri- cost-containment was becoming a huge to a certain level. BTG has then stepped can rattlesnake bites and digoxin over- factor, and minimally invasive techniques in to provide the next phase, the one dose. These were sold by a small staff of 14 – removing steps from the system and that really takes that business forward. at Danish group Nycomed Danmark APS, avoiding surgery and lengthy hospital Another commonality of BTG’s deals is and the deal had a break point in October stays – would take cost out of the overall that the resulting products generally start 2010. BTG saw in the target company a set patient journey. their commercialization journeys in the

US, then move to Europe. PneumRx has the level of evidence of an oncology drug,” hospital readmission, leading to an ex- been the exception to this. she explains. pensive burden on the health care system, Makin describes BTG as “totally agnos- whereas a major element of Obamacare is Focus On The Evidence Base tic” as to whether a product is a device its focus on reducing hospital readmission BTG aims to bring its new therapies to and/or drug; it looks at the needs in terms rates. “We saw a trend in the US of severe market with full clinical and pharmaco- of what level of evidence is required at blood clots being treated interventionally economic data sets. This allows it to “re- each point. more often if the right treatment technol- ally give physicians, patients and payers A unique dimension to BTG is its abil- ogy were available. We were able to take the full package.” ity to fund the business from its cash advantage of that trend in what is a dy- Makin notes, “We’ve built a company flow. That can be difficult with a typical namic market,” Makin states. from scratch, but we’ve also built it to be device P&L, given the smaller markets for Of the one million blood clots in the ready for today’s health environment,” devices. But BTG’s gross margins for its US annually, around 700,000 are said to referring to BTG’s early insight into the devices are higher than the average, and be suitable for interventional treatment. need for evidence of payer benefit to en- in addition, its small sales forces mean it When BTG acquired EKOS, 95,000 cases sure the success of its innovative products. can generate more cash and thus enable were being treated interventionally – by “We could see it coming and did not have it to make targeted investments. the EkoSonic Endovascular System and to retrofit plans for clinical data.” Most other technologies. This has since risen companies have “dialed in” by now, “but EKOS And Obamacare – to 140,000 cases. Makin says, “The bottom we built it in from the word go,” she adds. Picking For Growth Markets line is: get the right technology, ensure it is The bold plan that BTG has set for itself BTG picks its markets and technologies the solution, and invest behind it.” is to “be a company that fits the future carefully, having looked at the underlying BTG also generated data around pul- world of health care as we see it,” says drivers in health care. Makin highlights monary embolism and now has the only Makin. the group’s EKOS technology, EkoSonic, interventional product that has been One advantage of having twin device for treating severe blood clots “first time, cleared in the US for the treatment of and pharma arms is the ability to see what effectively,” as an example. Although the pulmonary emboli. That is driving a lot might be around the corner in terms of traditional methods of warfarin and hepa- of growth – over 60% (and rising) of US device market access. “We’re quite unique rin do a good job of stopping new clots hospitals are now using EkoSonic, accord- 20 in that way. A lot of our products play on from forming, they do not do much for the ing to the company. the drug-device boundary. For instance, clots that are already there. Existing clots Makin says, “We saw what was driving Varithena is regulated as a drug but is can be a problem in up to 50% of cases, the market, bought what we thought was sold as a device for a procedure-type potentially leading to post-thrombotic the leading technology and invested in it market; and the Biocompatibles beads syndrome. further to get a unique new indication, are regulated as a device and sold with This obviously leaves open the risk of which meant we could uniquely take

“We did annual results on the Monday, two deals on the Thursday and a 10% placing – it was a big week.” – Louise Makin describing how some things just can’t be planned.

BTG CEO Dame Louise Makin

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com INNOVATION ❚

advantage of a segment of that growth.” and was assisted by a 5% placing. It was BTG has since invested in the US team heavily milestoned, making the total ❚ BTG’s Current and is now moving the product into other deal cost potentially up to $475 million. Performance And geographies. EkoSonic was recently ap- And the Galil Medical acquisition, which proved in Mexico, Argentina and Chile, closed in June 2016, was all cash ($84.5 Future Targets while Brazil and Colombia approvals are million), for the first time in BTG’s his- In 2015–16 (year-end March 31), expected soon, the firm reported in a May tory. Milestones could add another $25.5 BTG increased its sales by 22% 2016 investor update. million to the purchase price. to £447.5m, up from £367.8m “We’re on a journey and we started out The company has continued to build a year earlier. It spent £141.4m with the assumption that there will always its cash generation to a point where it is (+13%) on SG&A, and £77.2m be pressure on costs and a need to do now in a position to be able to raise some (+13%) on R&D. Underlying things better.” The follow-on assumption debt if it chooses to. Factors like these, for operating profit was up by 37% at £93.0m. is that BTG’s selected technologies are Makin, represent the maturing of BTG. The going to win as a result. company doesn’t yet pay a dividend, and for now the policy remains to continue Within the interventional medicines portfolio, overall The Benefits Of Small Sales Forces investing in S&M, R&D, and data, and sales of £150.2m were 27% BTG’s continuing view of itself is that it investing in more new technologies to up on the previous year, is in a market dominated by big players build the pipeline. and comprised oncology where it maintains that it won’t be com- After BTG had brought the sales and (Biocompatibles’ beads and peting on size and scale. “That’s not our assets of Biocompatibles back in-house – TheraSphere), £91.4m; vascular strategy,” Makin declares. Its model is to which it did on January 1, 2012, it had to let (EkoSonic and Varithena) develop high-margin, high-value products things integrate over time. “We were com- £46.4m; and pulmonology for specialist physicians. pletely new to the interventional medicine (PneumRx Coil), £12.4m. Carrying smaller sales forces was a space, so we really had to bed that whole conscious decision – BTG is not in ev- thing in for a while,” says Makin. Varithena made relatively low ery primary care clinic – and was also But the EKOS and TheraSphere deals sales of £1m (the same as in prompted by P&L management needs. followed before too long. BTG had been 2014–15), for reasons which the “Our strategy is to be really important to watching both of them closely, looking BTG CEO explains below. 21 specialist groups of physicians – much at their market positioning, checking like a specialist pharma company, but in customer responses and tracking their In 2016–17, BTG is guiding to the device space. So, we aimed for smaller meeting of milestones. Makin says there sales of £510–540m (July 14 sales forces that would allow us to make always has to be a right time for both update), which will include nine months of Galil Medical. In May good returns from the gross margins we players – and that time was in mid-2013 2015, BTG set a sales target generate from the products, and therefore for these companies. (all products and divisions) of from the investment required,” she says. Makin describes a very dynamic process $1.5bn by 2021–22. But equally, BTG stresses the value of in which BTG “stalks” a lot of companies getting close to customers, Makin con- at the same time. Her view is that there SOURCE: BTG PLC tinues: “The only way you can do that is need to be multiple opportunities on the if you’ve got things that they value. It’s a go. “It’s quite tough – as it should be. We virtuous circle of good technologies and are constantly evaluating, looking at our getting the right insights from customers.” shortlist and reviewing our hypothesis of the candidates.” M&A Financing Changes BTG has a policy of firm but fair. Makin Over Time explains, “We have walked away from As BTG has developed and grown, it has deals on both value and culture terms – used less equity and more cash to fund something that many companies might its deals. Protherics was roughly a 40% talk about but few actually do. Driving equity dilution and it was all-share (worth the culture of BTG within our strategy has £171.3 million). Biocompatibles was a been part of our success – and we’re not 20% equity dilution, and again, all-share prepared to compromise on that.” (£177 million). TheraSphere and EKOS She adds, “And we’ve turned away a (both done on the same day for an aggre- number of times on valuation grounds. gate consideration of $380 million) were There is a number that we think a deal is financed from cash reserves plus a 10% worth to our shareholders, and we won’t placing to raise the balance. go beyond it.” The reason why BTG can do In the case of PneumRx, the deal com- this is, in the CEO’s words, the company prised an up-front element ($230 million) does not need to do deals. “It’s a really

important position to be in. But we still every diameter and anatomy. It appeals ❚ S hareholder Value do want to do more deals.” And because to a very specialist customer base – vein Creation At BTG BTG is looking a lot, it gets interesting clinicians are economically driven, being insights into new technologies, methods private businesses. BTG may feel less share- and trends along the way. “It’s one of the reasons we thought holder pressure than some So how is that drawn into strategic this would take time: clinicians are hav- rivals at present and can in decision-making? “It sounds easy, but the ing to adapt to something new.” There trick is doing it at organization scale – and are also the classic US reimbursement theory chart its own course that’s why I think the culture of BTG is so market issues to contend with, and also more than most, but Makin important. Everybody is clear about the some confusion over the product’s clas- insists that shareholders strategy. We have a lot of people in BTG sification (see above). It is regulated as are “massively taken into who have grown up with the customer,” a drug, but Varithena has followed the account.” She says BTG has Makin continues. standard device launch curve. “It took been very clear about what The company relies on support from an a while for everyone to get on the same it is building – “a dividend- internal innovation group and a medical page,” Makin notes. paying company.” It has also team, which are both close to the cus- Nevertheless, BTG day by day sees more been clear about investing tomer. It’s a system that promotes client physicians using Varithena – still an early- to de-risk its investments. intimacy, and it continues right the way stage product in the IM portfolio. More “That’s the way we create up through the R&D team to the business launches are planned: Canada is expected shareholder value. We are leadership teams. in second-half 2016, followed by other “We see patients, payers and clinicians global markets. BTG is confident about not about to declare victory as the three very important stakeholders. prospects and has guided to 25% market too early.” We don’t start with clinicians alone, but share of the US varicose vein market, peak As to timescales, BTG has look at all three together and find a value sales, in a time frame of five to six years. set a target of double-digit proposition that works for all of them.” Makin says the focus for Varithena is on BTG has always thought that way, says how many re-orders are happening. “The annual growth to 2021–22, Makin. By 2010, the writing was on the early-stage metrics are telling us that, in and will likely start paying a 22 wall that this way of thinking was indeed time, this will be a really good business. dividend in the medium-term going to be important. Yet we have to be disciplined about not time frame. measuring it by the wrong yardstick, given Legacy Product – BTG’s the stage it is at.” IM Springboard BTG’s other early-stage product is the Varithena was the internal product that PneumRx Coil, which came with PneumRx. effectively sprung the lock for BTG in in- Additionally, BTG has a “high-growth” terventional medicine. It was launched in IM portfolio (EkoSonic and the inter- the US in August 2014; however, business ventional oncology products). The third progress with the non-surgical varicose strand comprises the more established vein procedure has not been as rapid as businesses – licensing income and the some might have hoped. It involves the specialty pharma products. Makin says insertion of low nitrogen polidocanol different things are expected of BTG’s foam 1% into the vein via a needle, an three IM revenue subsets. hour-long process during which the dis- eased vein collapses and blood is diverted Support From The to healthy veins. Licensing Portfolio “We thought progress would be slow, BTG has not invested in licensing since so we guided to two years before we said 2004, but this income stream will be kept we’d see growth. We were directionally for as long as it helps to create more share- right, but not so in terms of magnitude,” holder value. Zytiga, the company’s big- Makin says, openly. In BTG’s experience, gest single product, is up against generic early-stage assets and launches “always competition, for instance. “But each time take longer” than assumed. “And this we challenge the value it brings and do the one did take longer,” she says, if only sums, we see that it makes sense to retain slightly so. licensing,” says Makin. BTG is well aware “The good news is that this product of the step down to come, when Zytiga works extraordinarily well. There is not does faced serious competition. “It’s the a patient we’re aware of who hasn’t re- reason why we’re investing in other parts sponded well.” Varithena treats legs of of the company,” notes Makin.

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com INNOVATION ❚

On Competition And BTG tends to make most of its sales in the Keeping Competitive US – where it has an over-the-counter ADR ❚ On Data And Value The specialty pharma portfolio (CroFab – Germany and other parts of continental At BTG [crotalidae polyvalent immune fab], mainland Europe. It is an unfortunate DigiFab [digoxin immune fab], Voraxase trend that innovative companies do not Two short decades ago, medi- [glucarpidase] and Vistogard [uridine tend to include the UK among the early cal device companies spent triacetate]) is largely without competition, markets for launching new products. How- a lot on marketing and not for the present, whereas the IM portfolio ever, even in the UK, with the right data a lot on data. But as most of does face rival technologies. Both scenar- that show patient benefits, and working BTG’s products are US PMA ios have benefits and drawbacks. “We are with supportive clinicians, if a company is and equivalent regulatory confident in that we continually ensure committed, the benefits will start to come that we keep the competitive advantages through, Makin feels. status, the company has been that we’ve acquired. But then again, we accustomed to the need to are always paranoid – and in fact you have Deals Rationale And deliver data. “We work in to be,” remarks Makin wryly. She adds, The BTG Culture therapies – where you need “You shouldn’t be in business if you’re not “The make-versus-buy decision is a very the same sort of data that you aware that you don’t deserve anything; big one, and BTG probably has more need with a drug. By starting you’ve got to work for it.” in-house than you’d expect. We’re very out as a drug company, we BTG’s position is that it appreciates good at managing it, but then again, we have found that very natural. good competition that invests in data. “But do a lot of outsourcing too,” says Makin.” It’s also one of the places we also know that we have to keep moving BTG has several deals ongoing, with large where value is created,” says to keep leading,” says Makin. concerns, like Philips Healthcare, right Makin. Essentially, BTG looks There are always threats to a business, down to small software companies. Its at a value chain and asks if and for many UK-based health care busi- rules are simple: basically they have to nesses, a once-in-a-generation threat was be very good at what they do and/or they it creates the right level of delivered in summer 2016 on the UK’s must have really current expertise. “We’re value for everybody. referendum vote to leave the EU. But at its small, and you can’t always be good at most simple, BTG, which does 85% of its everything,” says Makin. 23 business in US dollars, is one of the ben- The CEO uses the phrase “journey com- eficiaries of the subsequent fall of sterling pany” to describe BTG, and discourages against the dollar. It put out its 2016–17 staff from defaulting to the mantra of “this guidance at $1.45, and with the fall of the is the way we do such-and-such here.” UK pound to around $1.30–32 (one-month The firm has a unique culture, and BTG post referendum), BTG is one of the UK makes very conscious efforts to maintain companies least exposed to sterling’s it. Makin notes that companies can lose tumble. But Brexit will lead to impacts their initial flexibility as they grow, but she on the whole industry around regulation, is determined that it won’t happen on her which BTG will try to minimize. watch. “If we can keep the non-top-down/ Another element in keeping competi- nurturing culture as we scale and grow, tive involves cost-containment, and help- we’ll have a phenomenal advantage,” ing providers work within their budgets. she says. Here is where BTG has a trump card: Certain elements do need a measure of procedures are increasingly done with lockdown, of course, but, with pride, she IM rather than surgery. That is the case says that staff new to BTG realize quickly for PneumRx, for example. Makin says, that it’s unlike any other place they’ve “We see ourselves as highly relevant in worked. A touch of bias maybe, but any the cost-containment world.” She feels combination that includes dynamism, that the pressure on costs is going to nurturing, flexibility and customer- open up new areas of medicine that can centricity is surely a winning one. Keep- be conducted interventionally. ing these principles intact as BTG goes Presenting that to the right people is a through its next growing pains will be the challenge, especially when the UK Nation- challenge; however, one gets the impres- al Health Service (NHS), say, works toward sion that Makin and her team might have in-year savings. Having said that, the UK thought that one through already. market does not suit BTG, a highly in- It’s a culture where “your job title is novative company. Indeed, the NHS does more or less irrelevant and what matters not make for an innovative market. Thus, is what you’re working on, who you’re

working with and what you’re doing for There is no formula – it depends on what ❚ Unique Model That the customer,” she says. And the trans- makes sense. parent approach has to be clear from the That was the reasoning behind the Thinks “Technology” start. BTG’s method is to tell its third-party establishment of a direct sales team in BTG is unique in the way it partners all it can without encroaching Taiwan – doing so simply “made sense.” combines different product on confidentialities or sensitive areas. Elsewhere, BTG has opened a medical and Its detailed 130-page annual report for regional business support hub in Hong groups. It can point to simi- 2015–16 is good example of that. And Kong, and in October 2014, it began sell- larities with other companies monthly group-wide video hook-ups for 13 ing its interventional oncology products in certain areas – such as worldwide sites (plus Asia and Australia directly to physicians in Europe. It already Shire PLC – for historically holding similar monthly meetings in their sells all of its products direct in the US. building a portfolio that is time zones) ensure staff know all they very close to the customer, need to about BTG’s plans and direction. Moving Forward And Growing Up and then investing in the BTG has reached an interesting point, pipeline. Like BTG, it grew by Next Steps In M&A And says Makin. Until now, the company has acquisition. “But there’s no Geographic Markets bought interesting technologies, and in- company that you can say we There will be more bolt-ons to come for vested in the pipeline until they got to a are a carbon copy of – we’re BTG, taking into account three criteria: stage where they were platform technolo- very much blazing our own can the company take it on internally; gies. This has allowed BTG to review its does it create new value for shareholders; new sets of capabilities and technologies trail,” CEO Louise Makin says. and can BTG make it fit? A “No” to any of and apply them in its existing markets. “We think ‘technology.’” those means the deal won’t happen. “That’s a great step forward, and even a The whole drive in IM comes Galil Medical, for example, is “a great ‘growing up’ of the company – we can see from imaging improvements, acquisition” that fits squarely into BTG’s ahead to the stage where we have innova- being able to see organs with interventional oncology franchise. It both tion that takes advantage of the capabili- greater granularity, and being supports BTG’s offering and moves the ties we’ve already built,” says Makin. more specific with treat- company into a new organ (the liver; in It’s proof that BTG is coming of age – 24 ments. This is helping new addition, two new trials in lung and bone and in more than one dimension. Makin areas such as pulmonology are to support FDA decisions in 2017). An muses that BTG has breached thresholds to emerge. BTG’s strapline indication in lung metastases would also many times over in the past dozen years: is “see more, reach further, move Galil alongside EKOS, which is in the doing the Galil deal entirely out of cash, treat smarter,” where BTG is pulmonary embolism space. Factor in the generating over £100 million in cash in PneumRx Coils and BTG all of a sudden 2015–16, reaching the stage of developing the treat smarter element – approaches the lung from three different cross-platform innovations, setting up two the therapy approach. “We IM directions. sales teams in Europe and going direct in take a technology approach,” Future IM deals are likely to be in new Asia – to name but a few. says Makin, adding, “We’re areas that BTG thinks will be the “next “We are moving forward on a number of always looking at the next thing” where it will want to get an early fronts and seeing momentum building. It’s thing.” advantage. all being achieved with BTG’s unique and PneumRx is currently targeting re- flexible strategy,” says Makin. imbursement for the coil technology IV004914 in France and Germany – and later the Comments: UK. So far, the PneumRx Coil is only EU- Email the author: [email protected] launched. It is not yet available in the US, but in December 2015 a pivotal study (the RENEW trial) announced top-line results in support of a PMA that met all its endpoints. The results were published in JAMA in May 2016. Regionally, BTG partners with SciClone Pharmaceuti- cals Inc. for China, and Eisai Co. Ltd., for Japan. Canada is another key direct market, but BTG is always reviewing how its sales are achieved in local markets. “We keep looking at the markets to gauge when the time is right to migrate from distributors to direct sales,” says Makin.

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❚ AstraZeneca’s Shaun Grady is an affable dealmaker whose talents – honed over three decades inside the group – are being put to the test as he works to ensure that Britain’s second-biggest drugmaker can successfully transform itself, its therapy focus and pipeline. He tells In Vivo about his role leading AZ’s transaction execution, due diligence and alliance and integration management, while overseeing its collaborative “externalization” program, licensing and partnering, M&A and divestments. Shaun Grady

Sten Stovall usiness development activity lies at the heart of AstraZeneca PLC’s hopes to return to growth in 2017 after the loss this year of patent protection for its 26 AstraZeneca’s ambition to overcome mega-blockbuster statin Crestor (rosuvastatin) in the US – a challenge that its Crestor and Nexium patent expiries follows the patent expiry in 2015 of proton-pump inhibitor Nexium (esome- while revamping the group’s pipeline prazole) while the loss of patent protection still awaits antipsychotic Seroquel to focus on three target therapy areas XR (quetiapine extended release) in 2017. Still, management is confident it can navigate and grow annual sales to at least $45 B those threats while also increasing the focus on future growth drivers that the company billion by 2023, up from $24.7 billion in 2015, will be determined in part by says will produce an eventual turnaround. AZ’s business development unit’s Oncology is one area where the company has made significant progress, although it still pursuit of a three-pronged strategy of has a way to go before it catches up to leaders in the space like Roche, Novartis AG and externalization deals, M&A and Bristol-Myers Squibb Co. Half of the firm’s R&D investments are now in cancer products. partnering. The next 12 months will be pivotal, with heavy news flow coming for its young pipeline. Although late to the game, AstraZeneca aims to become a big player in cancer treatment The drugmaker’s “externalization” by developing novel therapies that bolster the immune system and others that disrupt program spearheaded by the business DNA repair mechanisms used by tumors cells. It expects new data in coming months development arm aims to give access from a number of ongoing trials, including first-line data from its PARP inhibitor Lynparza to therapy area expertise outside the (olaparib) in ovarian and breast cancer and Tagrisso (osimertinib) in first-line EGFR mutated company while generating recurring non-small cell lung cancer, and early next year the headline event will be the readout of revenue streams to help fund the MYSTIC trial of AstraZeneca’s PD-L1 inhibitor durvalumab in lung cancer. innovation. Beside oncology, the group’s prime therapy areas of focus are respiratory and autoimmunity, and cardiovascular and metabolic disease. AstraZeneca’s global pipeline currently The BD strategy also relies on has a 50-50 balance of small molecules and biologics, and some 30 biologics are under divestments, involving the sale of clinical development. legacy medicines outside To help fund that innovation process AstraZeneca will continue selling mature products AstraZeneca’s main therapy areas, and early-stage collaborations and to buyers in an effort to focus on those central activities while also unlocking value from partnerships that can drive R&D in the medicines in its portfolio. The latest example, announced in August, is AZ’s sale to Pfizer group’s prime areas of focus: Inc. of its late-stage small-molecule antibiotics business, in a deal that could reach more oncology, respiratory and than $1.5 billion. (See “AstraZeneca Sells Small-Molecule Antibiotics To Pfizer But Still In- autoimmunity and cardiovascular and vesting In R&D” — Scrip August 2016.) metabolism. In February, AstraZeneca off-loaded rights for two cardiovascular drugs toChina Medical System Holdings Ltd. and one of its affiliates,Tibet Rhodiola Pharmaceuti- cal Holding Co.

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Leadership ❚

Meanwhile, its “externalization” part- frequency of the deals that we’re doing as nerships to access therapy area expertise evidence of that; it’s pretty frequent. help the group market its products better, focus resources in its core areas and gen- “Lilly is the poster What is the core thinking behind your erate recurring revenues that it hopes will externalization strategy and what are grow over the next few years. In July, for child for what we’re the components? example, AstraZeneca handed over rights In order to have the funding and the to skin disease drugs tralokinumab and trying to do, because resources to push forward and do all the brodalumab to Leo Pharma AS of Denmark things we want to do in the three areas, for an up-front payment of $115 million we’ve spent quite a bit of time looking at the while it focuses on other key therapy ar- we’ve put the asset in products of our research and development eas, and after brodalumab showed a risk pipeline, and also assessing our portfolio, of suicidal ideation in trials. (See “Astra the hands of and asking ourselves the question, “Are Zeneca Hands LEO Dermatology Potential” there assets there that would actually be — Scrip, July 2016.) In parallel to such somebody who is a better in the hands of third parties, or are activities the company also pursues early- better partnered with a third party?” and stage collaborations and partnerships that world expert, but that’s what we give the broad term of “ex- will continue to drive R&D and pipeline ternalization” to. That’s the strategic driver development linked to main therapy areas. through co-funding in the first instance. These activities are overseen by Shaun If you look at externalization itself, what Grady, VP for business development opera- are the drivers and what are the component tions. A lawyer by training, Grady has been and participation in a parts of that, then the first is where we’ve with AZ for more than 30 years, having been successful in our scientific endeavors originally joined ICI before the demerger joint development in areas outside our core specialism, and of the UK conglomerate’s pharmaceuticals therefore where we look to a partner to bring arm and creation of Zeneca in 1993. Grady committee and the in therapeutic expertise that AstraZeneca worked on the merger of Sweden-based doesn’t necessarily have ourselves, either Astra and Zeneca in 1999, the merger of like, we still have a entirely or completely. That could be either 27 Zeneca Agrochemicals with Novartis scientific expertise in order to be working Agribusiness to form Syngenta, and the role and involvement with the right people to progress products creation of Avecia. He also worked on the through development, or it could be com- acquisition of Cambridge Antibody Tech- in the progression of mercialization expertise, where the assets nology Group PLC (CAT), led AstraZeneca’s that we’ve identified and developed require acquisition of Amylin Pharmaceuticals a different sales and marketing model. Inc. and AZ’s subsequent buy-out of the drug and we would Bristol-Myers Squibb’s interest in their dia- Can you provide some examples? betes alliance. Grady was appointed to his also share in the One of the best examples is the partner- current role in 2013 with the creation of AZ’s ship we have with Eli Lilly [Eli Lilly & Co.] for global product and portfolio strategy unit. benefits of its ultimate the [AZD3293] BACE inhibitor Alzheimer’s program, where clearly we still have some In Vivo: What is your biggest priority for commercialization.” highly productive discovery and early devel- the next 12 months within your remit of opment activities. Neuroscience isn’t a core business development? – Shaun Grady focus for AstraZeneca any longer but it is for Shaun Grady: The overwhelming pri- Lilly. Lilly is among the very best companies ority for the organization is the progression in the world in this area and therefore for and the delivery of the late-stage pipeline, the BACE inhibitor we’ve put in place a risk principally in oncology and specifically share, cost/share, co-development and com- in immuno-oncology, but also in respira- mercialization arrangement with Lilly for tory and CV. Therefore, from a business the BACE inhibitor. Lilly is the poster child development perspective the priority is to for what we’re trying to do, because we’ve execute on the externalization strategies put the asset in the hands of somebody who so we can maintain the focus on those is a world expert, but through co-funding three main areas, and are able to invest the and participation in a joint development proceeds of externalization back into the committee and the like, we still have a role core trials. That really is our singular focus. and involvement in the progression of the We are very rigorous in that prioritization drug and we would also share in the ben- and quite relentless. You just look at the efits of its ultimate commercialization. So

we receive obviously an up-front payment best way to push the drug forward and where partners buy the rights to participate then commercialize it, we agreed with in the program, then there are milestone both Valeant and LEO that the European payments that we receive on the achieve- “There is a willingness rights would be well placed in LEO’s ment of different development triggers, and hands and Valeant agreed to that, and then sales-related payments that we receive of the big pharma therefore we made that change, again as well as royalties. We share the risk, but putting a psoriasis drug in the hand of a we also share in the success of the drug peers to work together dermatology expert in Europe. as it progresses through development and reaches the market. [AstraZeneca’s CEO] You’ve said AZ’s externalization strategy Pascal Soriot [DVM] himself frequently and there’s much will in the future probably engage more points to the BACE inhibitor program as in partnering collaborations with other the best example for what we’re trying to more interaction on drugmakers and focus less on the sell-off do and achieve through our externalization. of therapies that don’t fit your pipeline [Editor’s note: In 2014, AstraZeneca began an ongoing basis at a strategy. a partnership with Lilly to jointly develop That’s not to say we’re not looking at and commercialize the oral beta secretase business development and thinking about outright divestments cleaving enzyme (BACE) inhibitor AZD3293 from time to time, but they would be very in early Alzheimer’s disease, which the duo is level than there would much mature brands that are outside our now moving into Phase III testing and which main therapeutic areas and where we on August 22 won fast track designation from believe that the brand is more valuable to the FDA.] have been in the past, the third party, and that therefore we can generate value for AstraZeneca as well as Another example of that externaliza- particularly as regards the purchaser. tion approach is AstraZeneca’s decision in July to hand over two pipeline skin combinations.” The third component of your external disease medicines, tralokinumab and business development strategy in- 28 brodalumab, to Leo Pharma of Denmark – Shaun Grady volves early-stage collaborations and for an up-front payment of $115 million partnerships to drive R&D and pipeline while it focuses on other key therapy development linked to your three main areas. The UK big pharma has also put therapy areas. Last January you entered an end to its license with Valeant Phar- into one to establish the Apollo transla- maceuticals for brodalumab in Europe in tional research fund, which is the first favor of its new partner. Why? time that three global pharmaceutical Dermatology is not an area where we companies and the technology transfer currently have specialism. LEO is highly offices of three world-leading universi- expert and specialized in dermatology, so ties have come together to form a joint we were pleased to do the tralokinumab enterprise of this nature. Tell us about deal with LEO in atopic dermatitis, and that arrangement. we kept the asthma indication back in, in What’s interesting about Apollo is it does AstraZeneca, given our care focus does two things. It ticks the pre-competitive box encompass respiratory. Split indications with us, and Johnson & Johnson and GSK can be quite challenging and people tend [GlaxoSmithKline PLC] working together. to shy away from them, but with the LEO It’s got a very nice collaborative business deal, we partnered AD [atopic dermatitis] and an academia alliance element, so because we are not in dermatology but not only Cambridge University but UCL we keep asthma because we’re hugely [University College London] and Imperial expert in respiratory, and it really is College [Imperial College London], so we’re nicely reinforcing our strategic aims here. all working together. But then the flipside of And when we partnered with LEO for that is if and when projects and programs tralokinumab, a connected deal was done emerge from the Apollo Fund there is then at the same time which also included LEO a competitive process amongst the three taking on the rights for brodalumab for industry players in terms of securing a li- Europe, which is the psoriasis drug that cense or a partnership or what-have-you to originally came out of the partnership that particular program. And in the unlikely with Amgen. We initially partnered with event that none of the three of us want to Valeant, and then having looked at the take that forward, then the fund can then

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com Leadership ❚

look to out-license or partner those assets with others. I do think it’s really quite clever, ❚ AstraZeneca’s 2016 Deals To Date and as I say it brings together partnership and collaboration in a pre-competitive/ August non-competitive basis, but then provides • Pfizer buys AstraZeneca’s anti-infectives portfolio some degree of competition and therefore July economic benefit for the start-ups participat- • Leo Pharma gains rights to two dermatology mAbs from ing in the fund, failing which they would be AstraZeneca free to look at commercialization outside of the three Apollo partners. June • AZ settles Byetta patent litigation; grants license to Teva Might there be a similar arrangement • Aspen pays $520m up front plus milestones for rights to done in the States, a uni-pharma col- seven of AZ’s anesthetic products laboration with yourselves? Yes, potentially. I think AstraZeneca • MedImmune and Genisphere in oncology tie-up was one of the leaders in terms of peer col- • Grunenthal gets lesinurad rights in Europe and Latin laborations, or peer partnering. I think that American from AZ emanated initially from the Bristol-Myers Squibb collaboration we did in diabetes April back to 2006/2007, so we’ve always been • TapImmune and MedImmune combine candidates in ovar- very comfortable working with the big ian cancer study pharma peers. The Amgen collaboration • MedImmune licenses ADC technology to which obviously gave rise to brodalumab Regeneron for cancer drug development is another example. So we’ve definitely got a very open mind to working with our • Ironwood gets exclusive US rights to AZ/Ardea’s gout peer competitors in a variety of appropri- therapy lesinurad ate areas. In fact, AstraZeneca and J&J are March working together in Cambridge currently • Sun Pharma co-markets AZ’s dapagliflozin in India 29 in a collaboration coaching and mentoring the start-up companies that are emerging • Lipigon and AZ work together on cardiometabolic disease from Cambridge University and the Judge treatments Business School. • ProStrakan pays $70m up front for European rights to AZ’s Moventig Collaboration between drugmakers is spreading. What are the “on the ground” February trends that you see of this within busi- • AZ out-licenses cardio drug rights to CMS, Tibet Rhodiola; ness development? gets $500m There is a willingness of the big pharma • Corvidia licenses lead compound from AstraZeneca peers to work together and there’s much more interaction on an ongoing basis at January a business development level than there • Allergan and AZ develop treatment for antibiotic-resistant would have been in the past, particularly infections as regards combinations. At the end of • AZ and Moderna expand relationship, now in immuno- the day I think it’s very asset specific, and oncology obviously the need and desire of the target or the prospective partner weigh very, very • AZ and Incyte investigate combo therapy for NSCLC heavily into that equation as well. • AZ licenses PCOS candidate to Millendo

Do these meetings occur in informal set- tings as well? Absolutely … when we all used to go to Bio and JP Morgan and other big partnering meetings, we all used to avoid each other because we were all trying to find the pret- tiest biotech or what have you. Now we all meet, in fact quite often, together. We also often meet in a one-to-one during those SOURCE: Strategic Transactions | Pharma Intelligence, 2016

partnering meetings and just have quite can secure from the asset and actually the an orchestrated bid process for a third open collaborative exploratory discussions negatives that could result if a competitor entity of the size and scale of Amylin, that about pipelines and portfolios. It’s to focus, owned the assets do stretch your thinking resulted in a GLP-1 franchise coming in you know, on, is there anything in company in terms of preparedness to pay. But there’s firstly to our collaboration with BMS and A’s portfolio that is a lower priority that no sense of doing transactions at all cost. now completely owned by AstraZeneca would be a higher priority and better placed Quite the opposite. We have very rigorous was a very, very special deal. And then in the portfolio of company B. We all know financial analysis of any transaction that if I may have a third, I was fortunate each other and it being such a small world; we do and equally we do have a focus, we enough to be part of the small group of the current head of BD in GSK is an ex-AZ know where we want to be enhancing and people in AstraZeneca that worked on person and so on, so it’s a pretty tight-knit improving the pipeline and portfolio; we’ve the MedImmune, and before that the group. It’s also just great to get the oppor- been reasonably successful in doing that. CAT, Cambridge Antibody Technology, tunity to spend a few hours together in an acquisitions. If you look at our pipeline informal off-the-record setting with people What is the time frame of one of these now and the balance of biologics and who do the same sort of job and that are deals? How long does it take you to do the products emerging from CAT and dealing with the same challenges and ob- from initial idea to conclusion? MedImmune, you’ve got to feel pretty stacles and issues. It was quite therapeutic. Actually, not as long as you might think. good about that. We’ve to some extent re-tooled our busi- What is your company’s stance to- ness development transactions group to How many people are on your team now? ward making new acquisitions? be much more adept at externalization In the transactions group, which is the We’re still very much in the swim and projects, out-partnering and making divest- business development operations group open for business looking for buy-side ments. We took the learnings from some of that I lead, we’re probably about 35 people opportunities and things to partner and the prior transactions of this nature that we in total. But the really important thing is in-license. That said, given the fairly sig- did last year, and we’ve oiled our business that we don’t do anything on our own and nificant transactions we did at the back development machine a little bit. And we work in harness and partnership, with end of last year, notably the Acerta and ZS typically, these things can take between all the different functional areas across Pharma acquisitions [Acerta Pharma BV two and three months potentially to get the company. and ZS Pharma Inc.] … any future M&A done, maybe a little bit longer. It’s obvi- 30 type projects would clearly have to be in our ously very case-by-case, but with assets So, in a nutshell, what role does your BD areas of focus and strongly accretive. But that are highly attractive, where you can unit play in forging AZ’s future ambitions I do think it’s important to remind people quickly identify the prospective partners and targets? that we’re still very much open for busi- or purchasers with a slick and efficient It’s really quite simple: we’re deal doers, ness in terms of reviewing and assessing system, you can actually move these things we’re dealmakers, and so we work with our and analyzing emerging technologies and forward fairly quickly. other BD colleagues who strategize and portfolios. The recent Takeda deal is a case evaluate scientific and commercial oppor- in point actually, buying the respiratory If you had one to pick, which deal are tunities. Then when we decide to do a deal on- market portfolio of Takeda Pharma- you most proud of during your tenure it’s my group’s job … to execute efficiently ceutical Co. Ltd. This is a good example of so far, and why? and effectively in a timely manner with mini- continuing to do buy-side business devel- I’ve been around a long time in As- mal, if any, attrition in that deal execution opment, adding revenues in core areas and traZeneca … There are a few … There’s a … Internally, our job is to make the trains therefore immediate accretion. reasonably small spin-out of a company arrive on time. That’s whether it’s making called Albiereo [Albireo AB] that we acquisitions and building pipeline, like Some people say AZ needs to fill holes in made in, probably about 10 years ago Acerta and ZS Pharma. Second, integrating its product lines and thus is likely to pay a now, which was the first spin-out that or otherwise those assets and people and hefty premium for M&A targets and that AstraZeneca did with some GI assets that technologies into AZ; and thirdly, to make perhaps figures into the negotiations. I’m personally particularly proud of. I sure that we’ve identified the right assets to What would you say to that? also think from a business development externalize, that we secure the right partner- If you look at the transactions that Astra- perspective the joint acquisition of Amy- ship with the right people, with appropriate Zeneca’s done over the last four or so years lin [Amylin Pharmaceuticals Inc.] by value for us and the partner so that we can or even shorter periods since Pascal’s arriv- Bristol-Myers Squibb Co. and AstraZen- create value for our shareholders and stake- al as the CEO, I think we’ve been pretty suc- eca was truly creative. (See “Bristol And holders through those partnering programs. cessful in rebuilding and replenishing the AstraZeneca Make A Splash In Diabetes Then we can refocus the proceeds of those pipeline and portfolio, so we don’t today With Joint Purchase Of Amylin” — In Vivo, deals and the resource that it releases into think about having particular large gaps July 2012.) People talk about innovative the core therapy areas to help make the 2023 or omissions. I think companies generally dealmaking a lot when actually a lot of target. in business development transactions are what people are talking about is fairly IV004921 willing and prepared to pay a strategic pre- conventional standard stuff. But two big Comments: mium where they feel that the benefits they pharmas getting together and entering Email the author: [email protected]

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A medical company that has some other businesses – that is the shorthand description that Olympus Corp. of the Americas president and CEO Nacho Abia ascribes to a group that has emerged from difficult times with a new strategy, new structure and new determination. Targeted deals and M&A remain as important as ever to the group as it embarks, somewhat reinvented, on a new five-year plan.

32 Shutterstock:Sentavio

Ashley Yeo he past is the past, and we have to learn from it, says Olympus Corp. of the Americas (Center Valley, PA) president and CEO Nacho Abia. He is talking Olympus Group has restructured its to In Vivo during the ninth annual Global Medtech Compliance Conference medical activities with effect from April 2016 and is investing for growth (GMTCC), in Dublin, Ireland. His attendance on a panel discussing broad in a new system that includes five themes revolving around the importance of compliance speaks volumes for a medical business units. Tcompany that has suffered all the negative attention that a financial scandal brings with it. Abia is in fact keen to shine the spotlight onto a group where he has had responsibili- Americas area regional chief Nacho ties at the senior level and in diverse global regions for many years. Doing so is a way of Abia says the group has set ambitious showing that new dimensions are being added to a technology-focused group that has but achievable performance targets left the past behind and is now restructuring with the aim of becoming a key player in under its new five-year corporate medical – a growth market and the business area where Olympus’ future lies. strategic plan (CSP) 2016–2021. This “new Olympus” is described in the corporate roadmap drafted by Olympus group president and representative director Hiroyuki Sasa. A new organizational structure The growth plan could selectively kicked off in fiscal 2016, and a new medium-term management plan is due to take effect include targeted deals and M&A in as of fiscal 2017. Prefacing the changes in fall 2015, Sasa spoke of launching a new start, areas where Olympus already has setting a 10-year vision and focusing on growing the medical division. strengths, to compliment the group’s But before looking ahead, Abia is keen to put history properly where it belongs. The existing deals and relationships with financial scandal that engulfed Olympus actually broke in 2011, and the settlement (a industry heavyweights. record $623.2 million) was made in March 2016. (See “Olympus Pays Record Anti-Kickback Penalty For Device Case” – Medtech Insight, March 2016.) But he stresses that the media There is a palpable sense of a new reporting generally came a long time after the fact. “We are talking about things that start and determination to let the happened 10 years ago,” he says. “We acknowledge the mistakes we made in the past, technology do the talking within a but, actually, we remedied them a long time ago.” plan that potentially makes room for more involvement in regen med and Moving Forward orthopedics and ensures that the benefits from the big data revolution More importantly now, the question to ask is: what are the company’s strategic plans are maximized. to move forward?

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A couple of very relevant steps – of units from three to seven – the original catalysts for change – have been taken imaging business, and science solutions recently. The first was the development units, plus five new business units created of Olympus’ new internal organization, from the original single medical unit. Project Integra. This took effect at the The overall medical business has a beginning of April 2015. Essentially, it stated aim of focusing on early diagnosis created a complex tridimensional matrix and minimally invasive treatments in a bid of: vertical business units (a new element to improve earnings capacity. for Olympus); functions, such as finance, “The restructure has a lot of implica- R&D, manufacturing. etc.; and a third tions in terms of where we put resources element, the regions. – so this organizational change really was “Regions” was seen as very relevant, be- a strategic move,” says Abia. As part of cause although the company is Japanese, Olympus’ global executive committee, he headquartered in Tokyo, the largest share was involved in many of the discussions of of its sales is made in the Americas (36%; what he calls a “bold change” – especially Nacho Abia with the US accounting for 32%) and Eu- for the Japanese, who by nature seek to rope (30%). Thus a big part of the business avoid disruptive change. “The changes comes from outside Japan. These percent- brought about by Project Integra were ages refer to group sales, but 77% to 80% indeed disruptive.” of Olympus’ business today is medical, and it’s a growing segment, Abia says. Catalyst #2: The CSP 2016–2021 In 2015–16, Olympus’ medical sales The second major event happened in April totaled Yen 608.9 billion ($5.07 billion), this year when Olympus presented its with operating income of Yen 140.2 bil- Step by step, corporate strategic plan (CSP) 2016–2021 lion. For President Sasa, the business is to investors. This will define the group’s still undersized, and the restructuring Olympus is business plan for the next five years. is a bid to elevate the company to within “What you see in the CSP is that we define the top 10 globally. This will be achieved ensuring that ourselves as a medical company with 33 by organic growth, suitable investments some other businesses,” says Abia, but he and incubating new businesses, primarily business locations adds that the mainstay of Olympus’ efforts in the medical and imaging technology will go into growing the medical business. fields. Dealmaking, a big part of Olympus’ outside Japan have There is no plan to divest the non- past and present, will also be pursued in a bigger role in the medical businesses. Abia says there are the future, selectively and in core areas, a lot of technology synergies between according to Abia. development of the them and many benefits of keeping the existing business units under one roof. Catalyst #1: The New Structure group. For example, the camera business has a The new structure – not yet even 15 nine- to 18-month incremental technol- months old as Abia spoke at the Dublin ogy lifecycle, he observes. In medical Convention Center – brings “a significant products, a product range may change change in the company.” He says, “Es- “every five, six, seven years.” Many of the sentially, we have replaced the Japanese elements that are applicable to the optics jigiobo-sei business structure, a concept in the camera business are later on shown where autonomous companies operate as to have benefits in the medical business. a federation under an umbrella company. “In the CSP, we are continuing with our In Olympus’ case, it was a collection of imaging and science solutions businesses, companies – in medical, imaging and the interim. But it still took the group a but our pledge to develop into a medical scientific – that were quite independent while to recognize that, of the three divi- company that has some other businesses and not sharing much. sions (which all have the common link of is new. It was the first time that the group The restructure was also prompted optical technology), medical had become had made such a statement,” Abia notes. partly to accommodate better the largest of dominant. It is further proof of a group with long the old-structure divisions. That has long “We had to accept this and set up the traditions being ready to face up to chang- since not been “consumer,” which was company properly to support these busi- es in the global marketplace in order to achieving the lion’s share of sales 10 years nesses,” he explains. One of the conse- maintain growth. But some elements will ago. To Abia, it looks obvious now, but he quences of this was moving from a three- not change. “If we are anything, [we] are recalls that in 2006, camera/consumer was companies-in-one structure to a business an excellent R&D company, consistently bigger than medical. The tables turned in unit concept. And to increase the number investing 9.5% to 10.5% of revenues every

year for the last 10 years in R&D at group necessary talent and the R&D resources level,” he says. That will be maintained ❚ Olympus’ Corporate available.” He reiterates that potential ac- during the CSP. Few medical device groups Strategic Plan – quisitions will have to complement exist- of Olympus’ size maintain this sort of al- General View ing strengths, either from a customer point location. of view or technology point of view. “We’re Hospital numbers – and oper- not going to go into unknown areas.” Selected Strategic Initiatives For ating rooms and endoscopic Business Units Under CSP treatment facilities – remain- Five Medical Business Units Olympus has set the following aims for its ing flat due to pressures to The five medical businesses are: the GI medical business units: limit medical costs. group – basically endoscopy – which is • Gastrointestinal and Respiratory: Aim the largest; followed by the surgical group for strong market leader position in GI Increase in case numbers due (all the imaging for laparoscopy), which is business and to improve profitability to aging population. “growing very nicely”; the urogyne group, through selection and concentration; ex- Accelerated market structure which has a good penetration in the US; pand business in the areas of respiratory, changes exemplified by grow- the service business; and ENT, which is CDS (cleaning, disinfection and steriliza- ing presence of GPOs/IDNs in the smallest medical unit. tion), ultrasound endoscopy, capsule North America. Olympus’ equipment is used in a rough endoscope and IT; exploit emerging environment, so servicing (reprocessing markets for business growth; and grow Increases in workload related and repair) is a big element of the business endotherapy device operations. to technological advances and – and Olympus is said to be the industry’s more stringent regulations. • General Surgery: Aim to establish a top service and repair network with more than 200 locations. It is also a method of new de facto standard in the surgical High potential in China, and keeping in contact with the client base, as imaging market; secure #3 position in other emerging markets, In Vivo learned in an interview with Olym- energy device market – and ultimately which will be strategically pus’ UK director of medical and surgical aim for #1; establish disposable device important drivers of medical business, Gareth Walsh, in February 2015. business model. business growth for Olympus. (See “All About Value – Olympus Medical But need to factor in varying 34 • Urogyne: Aim to secure dominant Gets To Feel The NICE Effect” – In Vivo, infrastructure development shares in markets for flexible endo- February 2015.) speeds according to country. scopes and TURis (transurethral resec- These five units are being given more tion in saline) products; expand market exposure under the new structure. In the share in urinary tract stone treatment past, they were all in the same basket business; leverage existing products and had to share management attention, and technologies to secure growth. which can be tough, especially for the • ENT: Expand “videonization” in flex- smaller divisions, says Abia. The main ible endoscope operations; acquire goal of the restructuring is to provide endoscopic sinus surgery (ESS) opera- resources for each business unit so they tions; expand sinus surgery imaging are no longer constrained. Business unit operations centered on 4K systems; heads can then focus on developing their expand Diego Elite sinus surgery own business strategies. portfolio; prepare for introduction of Although a lot of synergies and func- minimally invasive treatments into tions are shared, essentially, strategy alternate sites of care; and establish development is done by the relevant busi- global sales systems. ness units. They define what they need in terms of technology and M&A. They are all Third-Party Deals assisted by a business development group “As to M&A, this is something we con- that is tasked with scouting for business template, but we will pursue it only if the development opportunities, under the opportunities are complimentary to the direction of the business units. current business lines that we have. Pretty “We are getting the company more much our strategy is to grow via the CSP aligned in order to grow each business organically,” states Abia. unit while keeping synergies between the He is clear on Olympus’ strengths. units. Without going to a silo approach, “We’re not going to, say, suddenly invest which is not healthy, we are sharing in a cardiovascular company. We still resources, but decision-making is at have things to do in our core areas, and business-unit level,” says Abia. primarily via organic growth. We have the The business unit leaders report directly

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to Sasa. The regional heads – Abia and well. But the cooperation goes no further his two counterparts in Europe and Asia than manufacturing and R&D, and this – have a main duty of ensuring that the arrangement, not a strategic alliance, will company is properly aligned within the not be affected by the new group structure. tridimensional matrix structure. Besides The joint venture with Sony Corp., Sony all the corporate responsibility they have, Outside the five Olympus Medical Solutions Inc., was that is the key role for the regional heads. created as a 50-50 entity in 2012. It is an The reality for a global business is that it is medical business independent entity that develops prod- very difficult to manage what is happening ucts that may or may not have synergies in the regions from Japan. units are two areas with Olympus’ core products. “But that “We have the strange situation where is not the rationale. They have their own everybody reports to me, and nobody that the company strategy. That’s the point. We share things reports to me,” says Abia, laconically. Ev- from a company that is not Sony and not eryone in Olympus Corp. of the Americas would consider for Olympus, but a third-party, independent has to some extent a reporting line to Ja- company,” explains Abia. pan, and for local purposes, US managers M&A or new Olympus recently launched Sony’s 4K report to Abia. This reflects very much the investments: technology for surgical endoscopy (see Japanese culture of consensus. “It implies below). “It fits well with our portfolio, a lot of compromise, but in the end the regenerative and we sell it all over the world,” he says. solution is often better, simply because The JV has other products in the pipeline. everyone is aligned; it takes longer but it medicine and Olympus has a somewhat longer history works out.” with Terumo Corp. Terumo and Olympus orthopedics. have long been the two main medical Olympus’ Global Ambition companies in Japan, and have forged a Olympus embodies Japanese corporate longtime relationship. Essentially, Terumo tradition, but the group is becoming owns some shares in Olympus, which is more global – and there is a drive for it to “quite normal” given the cross-sharing of become much more so. This essentially shares in the industry. From time to time, 35 means that there is an ongoing discussion pus has also issued news recently about the two enter into cooperations, but they as to where the functions should reside – plant enlargements in Japan. However, 10 are time-limited, and there are no plans in Japan or elsewhere? years ago 95% of production was done in to engage in anything more substantial, Step by step, Olympus is ensuring that Japan. In 2016, the majority of production says Abia. business locations outside Japan have is still in Japan, but the shift to other areas Olympus’ most recent deal fits its terms a bigger role in the development of the is noticeable. of reference perfectly. In May 2016, the group. For example, on April 1, 2016, it group announced a distribution agree- made appointments to two new roles: M&A Policy And Deals ment with Norgine BV and subsidiary global general counsel and compliance Abia says the opportunities for M&A flow Arc Medical Design Ltd., under which it officer. Both appointees are female, and in regularly – if not quite every day, then becomes the exclusive North American both worked for Abia within the group. “It certainly several per week. “But it’s al- distributor of Endocuff Vision, a second- may be a traditional Japanese company, ways: ‘Does it fit?’ It’s never going to be our generation, single-use device that im- but Olympus’ current management really practice to acquire just anything. We are proves visualization for colonoscopies understands the importance of managing aware of the need to grow, but how we do and other endoscopic procedures. Arc and the business on a global basis. They are it needs to be meaningful and synergistic Norgine retain distribution in Europe, for making a lot of moves in this direction,” with what we have.” the present at least. he says. Olympus has always targeted selectively The product comprises a plastic piece They see, for example, that Japan in M&A. In fact, in the past eight years, the fitted to the distal tip of an endoscope. It represents only 20% of Olympus’ global list extends to just Gyrus Group PLC (urol- deploys hinged arms during withdrawal, business. Accordingly, the group has ogy and gyne energy device manufacturer, which stabilize the tip and stretch the mu- increased its manufacturing capabilities UK) in 2008, Spiration Inc. (pulmonary cosal surface to give the physician a better outside Japan – with factories in the US, device manufacturer, US) in 2010 and view of the anatomy during the search for UK and Europe – and that trend is increas- Spirus Medical LLC (specialist endoscope polyps. “It’s a very interesting technology ing. On a group level, Olympus opened a developer, US) in 2011. that fits very well with our approach,” state-of-the-art Surgical Innovation Cen- In the field of dealmaking, the group says Abia. Distribution agreements for ter, in Brooklyn Park – in the Minneapolis has been more active. It works with Hi- technologies that compliment Olympus’ medtech heartland – in 2015, and next tachi in the ultrasound business, where core products are another thing the group year it is opening a new plant in Canada. the groups’ respective engineers work would consider, he adds. But Japan keeps moving too, and Olym- together to ensure the equipment works

Exhibit 1 Olympus Medical Corp. Financial Performance, 2014–15 & 2015–16* (Yen bn)

Revenues 2014–2015 2015–16 2016–17**

Endoscopes 313.253 341.604 NA

Surgical 179.811 194.994 NA

Endotherapy 65.284 72.329 NA

Total 558.348 608.927 610.000

Operating income 124.894 140.220 127.000

R&D 43.324 45.684 -

Group revenues 764.671 804.578 800.000

Group operating income 90.962 104.464 90.000

*Year ending March 31; **forecast included in 2015–16 statement. SOURCE: Olympus

Innovation And New Fields key tool in Olympus’ armory, and Sasa The first fully integrated 4K imaging underlines the need to act quickly when chain available for health care use, the opportunities arise. Visera 4K UHD System, was rolled out at And outside the five medical business 36 the Society of American Gastrointestinal The big data units are two areas that the company and Endoscopic Surgeons (SAGES) 2016 would consider for M&A or new invest- Annual Meeting. The state-of-the-art big “challenge,” in all ments: regenerative medicine and ortho- screen surgical system delivers four times pedics. These go together, to some extent, the resolution of HD with better light respects, will and Abia notes that Sasa has highlighted and wider color spectrum, thus aiding Olympus’ interest in exploring these new surgeon precision. continue to fields. In regenerative medicine, Olympus The launch underlines Olympus’ com- dominate health is already conducting R&D on autologous mitment to innovation in the same way cartilage cell treatments for sufferers of that the group’s articulating HD Endoeye care thinking and osteoarthritis of the knee. The alternatives Flex 3D Videoscope did in 2014. Also a are open surgery and/or artificial joints. world first, the system’s 3D visualization planning. In the None of these new ventures have been provides depth perception and a precise included as numbers in the CSP, Abia spatial view of anatomy that cannot be meantime, Olympus observes, adding that Olympus does not achieved with traditional 2D systems (and expect much revenue from them in the has up to 100 degrees of articulation in is focusing on next five years. “But we are exploring,” he all directions). The 3D system is said to says. One of its R&D channels is Olympus provide surgeons with real-time, tactile embedding its new Terumo Biomaterials Corp., in which feedback in a way that robotic alterna- structure and Terumo now holds 34%; the company tives cannot. was originally established as a wholly Sasa has stressed the importance of in- driving growth in owned Olympus subsidiary in 2004. Since novation and keeping ahead of the game February 2016, the firm has been based in to secure growth in a surgical endoscope global markets with Sasazuka, Tokyo. market that is undergoing technological revolution. As to 4K and 3D, he has said innovative Moving Forward And Addressing that Olympus would be very well placed The Triple Aim should these become the de facto stan- technology. Forever moving forward in R&D terms dard. The Thunderbeat energy device (a is vital in order that a medtech com- cutting tool that integrates ultrasonic and pany remains competitive in an industry advanced bipolar energies), is another where change happens fast. Olympus

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has firsthand experience of just how is enough,” Abia says. His feeling is that a good plan. It’s a plan I helped to bring in quickly a market can move. Here, Abia this is more a health care provider issue and the group can embrace it.” refers back to when imaging (cameras) than a medtech company issue. Neverthe- It might be helped by M&A – it’s some- very much shaped Olympus’ business. less, with information being generated in thing that Olympus might consider. “But But the iPhone’s arrival in 2008 spelled diverse areas, someone has to combine it the really exciting stuff is coming from a lot of change for the camera business, and make it work. within the organization itself. It’s a mas- and whereas the group is still strong in The big data “challenge,” in all respects, sive change in our company,” Abia says. the DSLR and professional camera areas, will continue to dominate health care He notes that the restructuring brought on there has been a paradigm shift in the thinking and planning. In the meantime, after Project Integra represents the biggest sector, in the true sense of that often Olympus is focusing on embedding its change in his time at Olympus – 16 years overused idiom. new structure and driving growth in global so far, the last five of which were in the US The adjustment from being a camera markets with innovative technology. and the preceding four in Germany, having and consumer company to a medical de- Returning briefly to the cloud that hung started in his native Spain at the group’s vice company has at times been difficult over the group but that has now been Barcelona area offices. internally, Abia says frankly. blown away, Abia says that its reputation Abia credits Sasa and his wider team The same is happening in medical, for technology is unaffected. “No one likes for having made a real difference within even if the change seems subtler and to have their name associated with that, Olympus – for both fixing the issues of less immediate. “What we are feeling but I cannot think of one single case where the past and shaping the future. Abia, from customers is pressure to achieve the company’s technology has not been too, has played his part in this, and with the triple aim: better clinical outcomes, selected as a consequence.” his regional counterpart in Europe, has more patient satisfaction and all at lower He continues, “I think that’s really the been deeply involved in the reshaping cost,” he states. Any company not able to point. The reason we are successful is discussions. This is another nod to provide all three is going to find it hard to that our technology is fantastic, and the globalization. “I really see a clear path maintain its competitive position. “This physicians know that. In the US especially, of nicely sustainable profitable growth, is here to stay.” the majority of medtechs go through their allied to good common sense and doing It may be a big challenge for the in- problems. This is not to take such matters things right. We’ve been around for 93 dustry collectively, but Abia feels that lightly, but from a business point of view, years [since 1919], and we want to be Olympus, for one, is facing it at a really we are not feeling any effects now.” The around for another hundred!” 37 good time. “What we have is the ability group is also working on many CSR initia- IV004908 to provide early diagnosis, particularly tives around the world, as another means Comments: in terms of our gastrointestinal endo- of moving forward. Email the author: [email protected] scopes, which can dramatically reduce Abia’s seat on the GMTCC panel was a the bill; and minimally invasive treat- clear message that Olympus is showing ments with surgical devices, which are no fear, is ready to get on and wants to also cheaper for the system. We are well face the future. “Absolutely, I was invited, positioned here.” and I was happy to say yes,” he says. “Reputation is like a bank account: you Big Data – Where To? put into it. And if it rains, you need to In addition, Olympus has people looking build it up again.” at how big data/EMRs and all related The long and the short of it now is that technologies and applications, including Olympus Corp. of America is among the – mobile/wearable technologies, might, or if not the – most compliant medical device more likely will, lead to the transforma- companies in North America, Abia claims. tion of health care. “The thing is, we have not seen any large companies that have Final Words the necessary resources approach this That has not impaired the group’s per- successfully, and there has been a lack of formance. Consolidated operating profit specific business ideas. Maybe the smaller, has been growing “nicely” since 2011, non-traditional companies will be the win- says Abia. Having crossed another sales ners,” Abia observes. threshold in 2015–16 (group sales of Yen He gets the sense that everyone is talk- 804.6 billion), the Olympus group has set ing about an area where little is happen- further aggressive growth targets – for ing. “We know things will change, but no both top and bottom line – in the CSP. one knows how. At the same it’s difficult (See Exhibit 1.) The top-line aim is to be to allocate resources, and then again recording medical sales of Yen 900 billion you don’t want to miss the train! Even at in fiscal year 2021. It’s a five-year plan for Olympus, we wonder if what we are doing growth, says Abia, but “it’s doable and it’s

38 Shutterstock: Monkik Shutterstock:

Amanda Micklus evelopment of innova- peer sets, groups of leading pharmaceu- tive pharmaceuticals is a tical companies globally. (See sidebar, time-consuming and costly Big, Mid and Japan Pharma Peer Sets.) Datamonitor Healthcare’s process. Budget cuts, R&D Compounding that, the pharmaceutical facility closures as a result industry traditionally has high failure recent review of R&D Dof industry consolidation, pressure from rates, with only about one in every 10 efficiency using new investors to deliver returns and other drugs (across all indications) beginning economic conditions have put a strain on Phase I likely to be approved by the US product launch success the ability to fund the development of new Food and Drug Administration. (See drugs. There is also increased pressure to “Clinical Trial Success Rates Still Dismal, rates as a proxy shows develop products in the most efficient way But Certain Sectors Outperform” — In Vivo, that Mid Pharma possible, especially as the more mature June 2016) brands in a company’s portfolio are sus- Big Pharma, or those defined by companies outperform ceptible to generic competition and pres- Informa’s Datamonitor Healthcare as ent the reality of impending decreased having $10 billion or more in annual Big Pharma and Japan sales. About $115 billion in total US brand revenue, excluding generics, biotechs Pharma firms, thanks sales is expected to face generic competi- or leading Japanese pharmacos, spend tion from 2014 to 2018, not including the roughly seven times as much in research to multiple blockbuster additional loss of sales to biosimilars, and development (R&D) annually as Mid according to the Pharmaceutical Research Pharma or Japan Pharma firms, which are drugs. The first in a two- and Manufacturers of America. More than comparatively smaller companies in terms part series evaluating half of those sales ($60 billion) subject to of revenue – Mid Pharma is defined as generics are from the portfolios of the Big those with annual revenues of less than R&D productivity. Pharma, Mid Pharma and Japan Pharma $10 billion (and that are not generics,

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biotech or Japan Pharma) and Japan Exhibit 1 Pharma includes leading pharmaceutical Mid Pharma Peer Set Excels At New Product Launches: Average Aggregated companies headquartered in Japan. In Per-Drug Sales For First Seven Years On The Market, By Peer Set, 2011–15 terms of drug approval numbers, Big Pharma has also been the most productive; it achieved one-to-two times more US drug

10,000

t Big Pharma s approvals annually during 2011 to 2015 i r 9,000 Mid Pharma F

r t Japan Pharma than the Mid Pharma and Japan Pharma o e 8,000 k F r ) All Peer Sets peer sets combined. The US Food and a m 7,000 M $

( Drug Administration (FDA) approved

e s h 6,000 207 Big Pharma products during the l e T a n

S 5,000 O five-year period, compared with 79 from

g s r u

a 4,000 Mid Pharma and 64 from Japan Pharma, e Y 3,000 according to Informa’s Biomedtracker and n e

v Pharmaprojects. The Big Pharma group

e 2,000 S averaged 41 drug approvals per year, more 1,000 than double Mid Pharma’s 16 approvals Average Per - D r - 2011 2012 2013 2014 2015 and Japan Pharma’s 13 approvals (drugs may be counted in more than one peer set Notes: Seven-year aggregate sales include historical and forecasted sales; covers drugs ap- total if there were partners in each group). proved in the US for the first time between 2011 and 2015, and those with sales information But while Big Pharma is outspending available from Datamonitor Healthcare. The sales data may include sales outside of the US. in R&D and has been more productive If the lead and partner companies cross more than one peer group (or within the same peer recently in terms of US regulatory group), the drug’s sales may be counted in more than one peer group’s total, as determined approvals, when it comes to research by Datamonitor Healthcare. and development (R&D) efficiency, the SOURCE: Datamonitor Healthcare | Pharma Intelligence, 2016 Mid Pharma group outperforms, thanks to multiple blockbuster drugs. As a proxy to determine how successful 39 new drug launches have been, average Exhibit 2 per-drug aggregated sales were reviewed Big Pharma’s Five-Year Averages Of Aggregated Seven-Year Sales Of based on the drug’s performance for New Product Launches Per Drug, By Company, 2011–15 the first seven years on the market. The products included in the sample were 8,000 those approved by the FDA during 2011 to 2015, and out of that group, those for 7,000 which reported and forecasted sales were 6,000 available in Datamonitor Healthcare’s PharmaVitae database. Sales included 5,000 worldwide reported and forecasted fig- 4,000 ures. Sales of some drugs are so low they 3,000 are not reported by the companies; therefore, the seven-year aggregates for some 2,000 products are not complete, and sales for 1,000 some drugs were not available at all. In addition, the seven-year aggregate sales - figures include mostly forecasted sales, as J&J AZ GSK Teva BMS P zer Bayer Sano AbbVie Roche Amgen Eli Lilly opposed to actual sales. For that reason, Novartis

($m) Per Drug For New Product Launches 2011–15 actual sales may not be as high if the fore-

Five-Year Average Of Aggregated Seven-Year Sales Merck & Co Novo Nordisk casts are not met, or may exceed estimates Notes: Seven-year aggregate sales include historical and forecasted sales; covers drugs ap- in some cases. Despite the limitations, the proved in the US for the first time between 2011 and 2015, and those with sales information analysis provides some insights into the available from Datamonitor Healthcare. The sales data may include sales outside of the US. performance of new product launches. As a group, all three peer sets together SOURCE: Datamonitor Healthcare | Pharma Intelligence, 2016 saw, on average, $4 billion in aggregate seven-years’ worth of sales per drug for those launched between 2011 and 2015. (See Exhibit 1.) The Mid Pharma group

outperformed the other peer sets with an Exhibit 3 average of $6 billion, supported especially Mid Pharma’s Five-Year Averages Of Aggregated Seven-Year Sales Of by drugs introduced by Gilead and Biogen. New Product Launches Per Drug, By Company, 2011–15 Big Pharma’s R&D Efficiency 16,000 New drug launches by Big Pharma companies over the last five years had an average 14,000 of $4 billion in aggregate first seven-year 12,000 sales per product. On an annual basis, one minor outlier was 2012, which yielded an 10,000 average of $2 billion. In comparison with the other four years in the time period, 2012 8,000 featured fewer drugs aggregating over $1 6,000 billion in seven-year sales, as well as more niche products, which drove down the aver- 4,000 age. On the opposite end, 2015’s average of 2,000 $5 billion was the highest among the five years in all of the peer sets. Many drugs - that launched that year and are forecasted Gilead Biogen Celgene Actelion Shire Baxter/ Allergan Lundbeck ($m) Per Drug For New Product Launches 2011–15 Five-Year Average Of Aggregated Seven-Year Sales Baxalta to achieve high sales increased the average, and these included Ibrance (palbociclib; Notes: Seven-year aggregate sales include historical and forecasted sales; covers drugs ap- Pfizer Inc.), Entresto (valsartan/sacubitril; proved in the US for the first time between 2011 and 2015, and those with sales information Novartis AG), Toujeo (insulin glargine available from Datamonitor Healthcare. The sales data may include sales outside of the US. The chart excludes CSL, Merck KGAA and UCB because either sales data were not available or U300; Sanofi) and Praluent (alirocumab; the drug’s sales for those companies were counted in the partner’s totals, as determined by Sanofi/Regeneron Pharmaceuticals Inc.). Datamonitor Healthcare. Each product is expected to have greater than $10 billion in seven-year aggregate SOURCE: Datamonitor Healthcare | Pharma Intelligence, 2016 40 sales during 2015 to 2021. The Big Pharma peer set averaged one- Exhibit 4 to-two drug launches per company per Japan Pharma’s Five-Year Averages Of Aggregated Seven-Year Sales Of year during the five years reviewed (drug New Product Launches Per Drug, By Company, 2011–15 launches where sales data and forecasts were available). While the number of drug launches per year did not vary much 5,000 from company to company, there were differences in the firms’ average per-drug 4,500 aggregated first seven-year sales. (See 4,000 Exhibit 2.) Bristol-Myers Squibb Co., for 3,500 example, had the highest five-year average of $7 billion in per-drug aggregated seven- 3,000 year sales from six products, including 2,500 existing top-sellers Yervoy (ipilimumab), 2,000 Eliquis (apixaban) and Opdivo (nivolum- ab). Bristol-Myers Squibb had better suc- 1,500 cess than Merck & Co. Inc., which had a 1,000 comparable set of six drugs. Merck had 500 about the same number of multibillion-

Per Drug For New Product Launches 2011–15 dollar drugs in terms of seven-year ag- - Astellas Takeda Daiichi Otsuka Shionogi Eisai Dainippon gregated sales – Victrelis (boceprevir), Five-Year Average Of Aggregated Seven-Year Sales ($m) Sankyo Sumitomo Keytruda (pembrolizumab) and Bridion (sugammadex) – but only averaged $2 Notes: Seven-year aggregate sales include historical and forecasted sales; covers drugs approved in the US for the first time between 2011 and 2015, and those with sales information billion per product. Johnson & Johnson’s available from Datamonitor Healthcare. The sales data may include sales outside of the US. totals, on the other hand, consisted of The chart excludes Mitsubishi Tanabe because either sales data were not available or the 11 products, most of which have over $1 drug’s sales were counted in the partner’s totals, as determined by Datamonitor Healthcare. billion in seven-year aggregated sales. Its SOURCE: Datamonitor Healthcare | Pharma Intelligence, 2016 average per drug is $4 billion, in between Bristol-Myers Squibb’s and Merck & Co’s

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com MARKET INTELLIGENCE ❚

Sidebar: Big, Mid And Japan Pharma Peer Sets

Mid Pharma Companies Excel Big Pharma Mid Pharma Japan Pharma At R&D Efficiency: Peer Sets AbbVie Actelion Astellas Informa Pharma Intelligence’s Amgen Allergan Daiichi Sankyo Datamonitor Healthcare includes AstraZeneca Baxter Dainippon Sumitomo in scope three peer sets: Bayer Biogen Eisai • Big Pharma: companies with $10 Bristol-Myers Squibb Celgene Mitsubishi Tanabe billion or more in annual revenue, excluding generics, biotechs, or Eli Lilly CSL Otsuka leading Japanese pharmacos GlaxoSmithKline Gilead Shionogi Johnson & Johnson Lundbeck Takeda • M id Pharma: companies with annual revenue of less than $10 Merck & Co. Merck KGAA billion, and that are not generics, Novartis Shire biotech, or Japan pharma Novo Nordisk UCB

• Japan Pharma: leading pharma- Pfizer ceutical companies headquartered Roche in Japan Sanofi Teva

SOURCE: Datamonitor Healthcare | Pharma Intelligence, 2016

figures. Pfizer’s six approved products other leading products, including Sovaldi Japan Pharma’s R&D Efficiency 41 with available sales data yielded a seven- (sofosbuvir). Biogen’s trio of products Annual seven-year average aggregates year average of $5 billion per drug, second (Alprolix, Eloctate and Plegridy), all of for the Japan Pharma peer set were gen- behind Bristol-Myers Squibb. Pfizer’s fig- which launched in 2014, and its top-seller erally lower than for the other peer sets, ure was heavily weighted toward Ibrance, Tecfidera (dimethyl fumarate), introduced suggesting that this group had the least which was approved in 2015, but the in 2013, contributed to the company ac- successful launches. The overall five- average also included older drugs Xalkori counting for the second-highest average year average of new product launches for (crizotinib) and Inlyta (axitinib). of $9 billion. the Japan Pharma group was the lowest The Mid Pharma peer set’s average of the peer sets at $2 billion. Within the Mid Pharma’s R&D Efficiency over the five-year period of new product peer set, Astellas Pharma Inc. achieved The Mid Pharma peer set generally had launches was $6 billion per drug, $2 the highest five-year average in new higher seven-year aggregate sales per drug billion higher than Big Pharma’s aver- product launch sales at $4 billion. (See annually than the Big Pharma group, but age. The increased average Mid Pharma Exhibit 4.) Among the company’s seven with more variation during the five years, figures were mainly due to several more products that launched between 2011 and ranging from a low of $3 billion in 2011 to successful blockbusters in the sample, 2015 (for which sales data were available) a high of $9 billion in 2014. The 2014 peak led by Gilead’s Sovaldi and Harvoni, were Xtandi (enzalutamide), Astagraf XL was mainly due to Gilead Sciences Inc.’s and Biogen’s Tecfidera. The seven-year (tacrolimus) and Myrbetriq (mirabegron). Harvoni (sofosbuvir/ledipasvir), which is aggregates for Sovaldi and Tecfidera are Takeda Pharmaceutical Co. Ltd. also forecasted to have $62 billion in sales for $26 billion and $25 billion, respectively, surpassed the Japan Pharma total average, its first seven years on the market. The whereas Harvoni’s is $62 billion. If these just slightly, at over $2 billion. Its top- 2014 figure was also boosted byCelgene three outliers are excluded, Mid Pharma’s selling drugs included Nesina (alogliptin) Corp.’s Otezla (apremilast) and three big average seven-year aggregate sales per and Entyvio (vedolizumab). drugs from Biogen Inc.: Alprolix (eftreno- drug drops to $3 billion, which is lower IV004915 nacog alfa), Eloctate (efraloctocog alfa) than the Big Pharma peer set’s $4 bil- Comments: and Plegridy (peginterferon beta-1a). lion average. It also significantly reduces Email the author: [email protected] Across all five years, Gilead secured the Gilead’s and Biogen’s per-drug averages highest average seven-year aggregated to $5 billion and $3 billion, respectively. sales per drug in the Mid Pharma group at $14 billion. (See Exhibit 3.) In addition Editor’s note: This article is excerpted from R&D Trends 2016: Mid Pharma Peer Set Excels to Harvoni, the company had several At R&D Productivity, published in August 2016 by Informa’s Datamonitor Healthcare.

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

Company Changes COLLOTON, Robert To: Neuravi Ltd., VP, US Sales & Mktg. (July) ❚ Brad Adams ADAMS, Brad From: ReVision Optics Inc., VP, Mktg. & Sales VP, Sales, ACell To: ACell Inc., VP, Sales (August) Phone: +353 91 394 123 From: Smith & Nephew Inc., EVP, Commercial Phone: 410-715-1700 DETORE, James M. To: Proteostasis Therapeutics Inc., BALLANTYNE, C. Evan CFO (August) From: bluebird bio Inc., CFO To: Accera Inc., CFO (August) Phone: 617-225-0096 From: Agenus Inc., CFO Phone: 303-999-3700

DOURADO, Glenn BAUTA, William, PhD To: Poseida Therapeutics Inc., VP, Bus. Dev. (August) To: bioAffinity Technologies Inc., From: Ligand Pharmaceuticals Inc., ❚ SVP, R&D, Therapeutics Frank Amato Senior Dir., Bus. Dev. (September) CEO, electroCore Phone: 858-779-3100 From: Southwest Research Institute, 42 Mgr., Medicinal & Process Chemistry Phone: 210-698-5334 EMERSON, Martin J. To: Monteris Medical Inc., Pres. & CEO (July) BEN-GALIM, Yuval From: Galil Medical Inc., Pres. & CEO To: Evogene Ltd., COO (August) Phone: 763-253-4710 From: Como, Chief, Product Dev. Phone: +972 8 9311900

FICKENSCHER, Jim BLUTH, John To: Zynerba Pharmaceuticals Inc., CFO & VP, Corp. Dev. (September) To: Cempra Inc., EVP, From: Antares Pharma Inc., SVP, CFO ❚ James DeTore Investor Relations & Corp. Phone: 484-581-7505 Communications (August) CFO, Proteostasis Therapeutics From: PowerSecure International Inc., SVP, Investor Relations & Corp. Communications GILMARTIN, GeoffreyS ., MD Phone: 919-576-2306 To: Proteostasis Therapeutics Inc., Chief Dev. Officer (August) From: AstraZeneca PLC, BOOTHE, Douglas S. Senior Medical Lead, Global Medicines Dev. To: Impax Laboratories Inc., Phone: 617-225-0096 Pres., Generics (August) From: Perrigo Pharmaceuticals Co. PLC, EVP, General Mgr., Pharmaceuticals GRANTHAM, J. Aaron, MD Phone: 510-240-6000 To: Corindus Vascular Robotics Inc., CMO (August) From: University of Missouri-Kansas City ❚ Glenn Dourado School of Medicine, VP, Business Development Assoc. Professor Poseida Therapeutics Phone: 800-605-9635

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

HIRSCH, Andrew KOENIG, Gerhard, PhD To: Agios Pharmaceuticals Inc., To: Quartet Medicine Inc., CFO (September) CEO (July) From: Bind Therapeutics Inc., From: Forum Pharmaceuticals Inc., Pres. & CEO CSO & SVP, Research Phone: 617-649-8600 Phone: 617-588-2665

HODKINSON, Chris KUSSMAN, Craig To: Owlstone Medical, VP, To: Organovo Holdings Inc., ❚ Chris Hodkinson Bus. Dev. (August) CFO (August) From: Abcodia Ltd., COO From: Alphaeon Corp., CFO VP, Business Development Phone: +44 1223 428200 Phone: 858-550-9994 Owlstone Medical

HOLMAN, Andrew LAST, Andrew J. To: BrainScope Co. Inc., To: Intrexon Corp., COO (August) Chief Commercial Officer (July) From: Affymetrix Inc., EVP, COO From: Greatbatch Inc., Phone: 301-556-9900 Pres., Corp. Dev. Phone: 800-230-7573 LINTHWAITE, Chris To: Fluidigm Corp., KALB, Michael W. Pres. & COO (August) To: Amarin Corp. PLC, CFO (August) From: Life Technologies Corp., From: Taro Pharmaceutical Industries Pres., Genetic, ❚ Andrew Holman Ltd., CFO Medical & Applied Sciences Phone: +353 1 6699 020 Phone: 650-266-6000 Chief Commercial Officer BrainScope 43 KATZ, Richard D., MD MARTIN, Doug To: Argos Therapeutics Inc., CFO (July) To: ProclaRx LLC, COO (August) From: Viamet Pharmaceuticals Holdings From: Applied Bio Ventures, Inc., CFO Dir., Corp. Strategy Phone: 919-287-6300 Phone: 614-915-0865

KHOURY, Peter H., PhD MATHES, Chris To: Nanotherapeutics Inc., SVP, To: Icagen Inc., Chief Commercial Officer (August) Chief Commercial Officer (August) From: Bill & Melinda Gates Foundation, From: Charles River Laboratories Senior Program Officer, International Inc., Exec. Dir., ❚ Doug Martin Life Science Partnerships Bus. Dev., Ion Channel Services COO, ProclaRx Phone: 386-462-9663 Phone: 919-617-1466

KIENZLE, Richard MCCARTHY, Timothy A. To: Medicrea USA, Chief Commercial To: Bionik Laboratories Corp., Officer & Bus. Dev. Officer (August) Chief Commercialization Officer From: Globus Medical Inc., (August) EVP, Global Sales & Mktg. From: Medical Compression Systems Phone: 646-490-2360 Inc., CEO Phone: 416-640-7887

KIM, Robert, MD To: Apellis Pharmaceuticals Inc., MCFARLANE, Neil CMO (August) To: Retrophin Inc., COO (August) From: Vision Medicines Inc., From: UCB Group, Head, ❚ Chris Mathes CMO & Head, R&D Global Bone Business Chief Commercial Officer Phone: 502-241-4114 Phone: 646-564-3680 Icagen

September 2016 | In Vivo ❚ ON THE MOVE

METZLER, Vincent SMITH, Scott T. YOUNG, Todd S. To: Wilson Therapeutics AB, To: Ascendis Pharma AS, To: Acadia Pharmaceuticals Inc., VP, Commercial Planning & SVP, CFO (August) EVP, CFO (August) Launch Strategy (August) From: Wedbush Securities, From: Baxalta Inc., SVP, Treasurer From: Alexion Pharmaceuticals Inc., Dir., Healthcare Investment Phone: 858-558-2871 Senior Dir., Mktg. Banking Group Phone: +46 8 796 00 00 Phone: +45 36 94 44 86 ZECEVIC, Marija, PhD To: Proteostasis Therapeutics Inc., MOSUNIC, Michael SPEAR, Matthew, MD VP, Bus. Dev. (August) To: Universal Diagnostic Laboratories To: Poseida Therapeutics Inc., From: Zebra Ventures, Inc., Pres. & COO (August) CMO (August) Founder & Managing Dir. From: Laboratory Corp. of America, From: Incyte Corp., Phone: 617-225-0096 Assoc. VP, Specialty Sales, VP, Clinical Dev. West Div. Phone: 858-779-3100 Phone: 718-859-4777 Directors STAHL, Pamela ORR, Susan, OD To: InVivo Therapeutics Holdings To: Notal Vision Ltd., CMO & VP, Corp., Chief Commercial Officer ABDUN-NABI, Daniel J. Medical Affairs (August) (September) To: REGENXBIO Inc., From: Janssen Pharmaceuticals Inc., From: UnitedHealthCare, Director (August) Leader, Global Med. Affairs, CEO, Community Health Phone: 240-552-8181 Strategy & Research & Eval., Plan of Wisconsin Ophthalmology Phone: 617-863-5500 Phone: +972 3 6293763 BARABE, Timothy C. To: Selecta Biosciences Inc., TAKEYA, Ryan Director (August) PAGGIARINO, Dario, MD To: Poseida Therapeutics Inc., Phone: 617-923-1400 44 To: pSivida Corp., VP, CMO (August) VP, Technical Ops. (August) From: Lpath Inc., From: Celladon Corp., VP, Mfg. SVP, Chief Dev. Officer Phone: 858-779-3100 BRADY, Todd C. Phone: 617-926-5000 To: Spring Bank Pharmaceuticals Inc., Director (July) TICH, Nancy, PhD Phone: 508-473-5993 SHANNON, Timothy To: Zynerba Pharmaceuticals Inc., To: Inivata Ltd., CFO (August) VP, Clinical (September) From: Baxano Surgical Inc., CFO From: Covance Inc., FIRON, Sarit Phone: 844-464-8282 Senior Dir., Project Mgmt. To: Evogene Ltd., Phone: 484-581-7505 Director (August) Phone: +972 8 9311900 SHAZER, Ronald, MD To: Inspyr Therapeutics Inc., TOUTAIN, Stephan SVP, CMO (August) To: Interleukin Genetics Inc., HARDISON, Don From: Tracon Pharmaceuticals, CMO Chief Commercial Officer (August) To: bioTheranostics Inc., Phone: 210-479-8112 From: Consultant Director (July) Phone: 781-398-0700 Phone: 858-587-5870

SHIELDS, Frank VIRSIK, Peter To: ReVision Optics Inc., HOFFMAN, Stephen VP, Sales Worldwide (July) To: ESSA Pharma Inc., To: Bicycle Therapeutics Ltd., From: Bausch & Lomb Surgical, EVP, COO (August) Chairman (July) Regional Sales Mgr. From: XenoPort Inc., Phone: +44 1223 497 415 Phone: 949-707-2740 SVP, Corp. Dev. Phone: 778-331-0962

HOLLAND, Edward J., MD WOLF, Judith K., MD To: TearScience Inc., Director (August) To: Provista Diagnostics Inc., Phone: 919-459-4880 CMO (July) From: Vermillion Inc., CMO Phone: 602-224-5500

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

KURTZ, Ron, MD EVANS, Ronald M., PhD BROWN, Ami Shah, PhD To: Allegro Ophthalmics LLC, To: Syndax Pharmaceuticals Inc., To: Inovio Pharmaceuticals Inc. Director (August) Scientific Advisory Board New Title: VP, Regulatory Affairs Phone: 949-494-8121 Chairman (July) (August) Phone: 781-419-1400 Previous Title: Senior Dir., Regulatory Affairs Phone: 267-440-4200 LIVINGSTON, Mark To: Allegro Ophthalmics LLC, HUMPHREY, Rachel, MD Director (August) To: Syndax Pharmaceuticals Inc., Phone: 949-494-8121 Scientific Advisor (July) CROWLEY, Elizabeth Phone: 781-419-1400 To: Celldex Therapeutics Inc. New Title: SVP, Chief Product Dev. Officer (August) MILES, Patrick S. Previous Title: SVP, Product Dev. To: NuVasive Inc., KHLEIF, Samir, MD Phone: 908-454-7120 Director (August) To: Syndax Pharmaceuticals Inc., Phone: 800-475-9131 Scientific Advisor (July) Phone: 781-419-1400 DEMAREE, John To: Astellas Pharma US Inc. O’HALLERAN, Michael D. New Title: VP, Oncology Mktg., To: NuVasive Inc., RUGO, Hope S., MD Americas (July) Director (August) To: Syndax Pharmaceuticals Inc., Previous Title: Exec. Dir., Oncology Mktg. Phone: 800-475-9131 Scientific Advisor (July) Phone: 800-695-4321 Phone: 781-419-1400

RABINOWITZ, Eric B. GILMAN, Steven C., PhD To: Proteostasis Therapeutics Inc., WOLCHOK, Jedd D., MD, PhD To: ContraFect Corp. Director (August) To: Syndax Pharmaceuticals Inc., New Title: Chairman & CEO (July) Phone: 617-225-0096 Scientific Advisor (July) Previous Title: Chairman & Interim CEO Phone: 781-419-1400 Phone: 914-207-2300 45 SMITH, Ian F. To: Ophthotech Corp., Promotions KISSNER, Jennifer M., PhD Director (August) To: Clearside Biomedical Inc. Phone: 212-845-8200 New Title: VP, Clinical Dev. (August) AMATO, Frank Previous Title: Senior Dir., Dev. Phone: 678-270-3631 To: electroCore LLC VAISHNAW, Akshay, MD, PhD New Title: CEO (July) To: Editas Medicine Inc., Previous Title: COO Director (July) Phone: 973-290-0097 LOWE, Christopher Phone: 617-401-9000 To: Inspyr Therapeutics Inc. New Title: Pres. & CEO (August) BONFIGLIO, John N., PhD Previous Title: Advisor Phone: 210-479-8112 Advisors To: TapImmune Inc. New Title: Pres. & COO (July) Previous Title: Strategic Advisor Phone: 866-359-7541 NORONHA, Glenn, PhD BRAHMER, Julie R., MD To: Clearside Biomedical Inc. To: Syndax Pharmaceuticals Inc., New Title: CSO (August) Scientific Advisor (July) Previous Title: EVP, R&D Phone: 781-419-1400 BRANDT, Gordon, MD Phone: 678-270-3631 To: PhaseRx Inc. New Title: CMO (July) Previous Title: Chief Clinical Advisor EDER, Joseph Paul, MD Phone: 206-805-6300 To: Syndax Pharmaceuticals Inc., Scientific Advisor (July) Phone: 781-419-1400

September 2016 | In Vivo ❚ MARKET INTELLIGENCE

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 August 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 Diagnostic imaging company Check- BioLineRx and VC I-Bridge form Cap grosses $5.9mm in registered joint venture iPharma for Chinese Mergers & Acquisitions direct offering biopharma market Bio-Techne buys Advanced Cell K2M sells $50mm in convertible debt Biothera combines PAMP molecule Diagnostics for $250mm plus earn-outs with Merck’s Keytruda in breast cancer Medical device company Osprey trial collaboration Myriad Genetics acquires mental Medical raises $A28mm in private health diagnostics company Assurex placement Denali options Blaze’s BBB-crossing for $225mm, plus earn-outs therapeutics Xtant Medical announces rights Zimmer Biomet acquires CD offering to raise up to $10mm Cerveau enter agreement to Diagnostics license Navidea’s NAV4694 radiopharmaceutical for AD Alliances ❚ Pharmaceuticals Sorrento and CHA Biotech form JV for Banyan, Quanterix ally in TBI natural killer cell therapies biomarker research Mergers & Acquisitions DS Biopharma spins out Afimmune Denali could pay big in new F-star and partner for next- Illumina FlowJo to develop fibrotic and pulmonary deal; holds option to acquire generation sequencing data disease therapies Denali gets Genentech’s LRRK2 46 Financings Denali acquires neurodegenerative- inhibitors for Parkinson’s disease focused biotech Incro Exact Sciences nets $126mm through Recordati licenses Richter’s public offering Pfizer buys remaining 78% stake in gene cariprazine in select territories therapy firmBamboo Therapeutics grosses $5.6mm Interleukin Genetics Genmab grants DuoBody rights to Gilead via PIPE Pfizer pays $14bn for Medivation MEI grants Helsinn exclusive Quotient nets $16.6mm through FOPO Rasna completes reverse merger to go pracinostat rights to fund MosaiQ commercialization public Rovi gets commercial rights to Foundation Medicine enters $100mm Scintilla acquires pain drug developer Orexigen’s Mysimba in Spain credit facility with Roche Finance; Scilex for $70.5mm gets $80mm up front TrekTx gets license to Medivir’s Teva acquires generics company Anda preclinical HCV compound for $500mm ❚ Medical Devices Valeant gets US and Canadian license Alliances to Norgine’s NER1006 Mergers & Acquisitions Advaxis enters $540mm Valeant Canada gets license to Allergan pays $95mm for ForSight immunotherapy deal with Amgen Orexigen’s Contrave Vision5 Adverum, Editas enter ophthalmic Pharming reacquires NA rights to Ruconest Mallinckrodt acquires skin substitute collaboration company Stratatech Teijin gets Japanese rights to AEterna grants Zoptrex license to Rafa Versartis’s somavaratan Alliances Vical receives $7.8mm equity Devicor licenses exclusive distribution investment from partner AnGes Financings rights to Endomagnetics’ Sentimag Acadia FOPO brings in $188mm surgical guidance system ARAM Medical gets rights to Rockwell’s hemodialysis products in Middle East Advaxis nets $28.5mm through GSK and Verily Life Sciences form new private placement joint venture Galvani Bioelectronics BMS pays $10mm up front to buy back rights to Aslan’s ASLAN002 Alimera nets $24.2mm via FOPO Financings Pfizer buys AstraZeneca’s anti- Amarin closes $65mm public ADS sale Avinger nets $27.9mm via FOPO infectives portfolio Ampio Pharmaceuticals nets $3.5mm in registered direct offering Dental laser company Biolase raises Catalyst Biosciences divests CNS NNR $10mm in private placement assets to Attenua for repurposing Aptevo closes $35mm loan

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 47 invivo.pharmamedtechbi.com

❚ . analysisSimoa McKnight Brain Brain McKnight Inc , the , the Synovasure . Solutions Signature on a handheld point- handheld a on Inc . September 2016 | InSeptember Vivo Banyan Biomarkers Inc. Biomarkers Banyan . Inc Holdings orp MARKET INTELLIGENCE INTELLIGENCE MARKET C Biomet Biomarkers ’sof Florida University an genetic test platform (already in in (already platform test genetic myPath - trau research together will Corp. Quanterix anterix any B Qu Zimmer Diagnostics CD they treat it) within these six units. Myriad’s Myriad’s units. six these it) within treat they own being first is melanoma) for studies validation bipolar diagnose to neurology within studied area in this anticipated is (launch disease in indications additional with 2019), during also ADHD and pain, schizophrenia, anxiety, Assurex the acquisition, Following planned. - subsid Myriad owned a wholly become will OH Mason, and name current its keeping iary, - preven its use to plans Myriad headquarters. tests GeneSight sell to team sales care tive expects it which segment, for market this into Banks/ Investment growth. future significant Genetics (Myriad & Co. JP Morgan Advisors: Partners Leerink Co.; & Sachs Goldman Inc.); Inc.) Health (Assurex LLC and and goal the with (TBI) biomarkers injury brain matic as well as diagnosis, of methods improving of (Aug.) the condition. of assessment treatment Alliances Diagnostics /In Vitro Diagnostics companies Quanterix will license for research use Banyan’s UCH-L1 (ubiquitin C-terminal hydrolase-L1) and GFAP (glial fibrillary acidic protein) assays, which it will incorporate into its own is acquiring CD acquiring is Inc. Biomet Holdings Zimmer im- firm developing , a private Inc. Diagnostics (Aug.) biomarkers. and munoassays co- The firms first partnered back in 2012 to - develop and market diagnostics for the muscu loskeletal space. Under that deal Zimmer has successfully marketed CD’s only available test for periprosthetic joint joint periprosthetic for test available only alpha assesses (PJI). The product infection in synovial hemoglobin and CRP, defensin, native and infection joint diagnose to fluid offers also CD in 2008, arthritis. Founded septic programs development diagnostic companion mi- including testing, laboratory clinical and serology/immunology, chemistry, crobiology, The hematology. and toxicology, urinalysis, diagnostics musculoskeletal CD’s addition of Zimmer’s strengthen will outcomes. patient to improve offering product platform. A clinical trial earlier this year dem- year this earlier trial A clinical platform. UCH-L1 and the GFAP for tests blood onstrated licensed initially Banyan (which biomarkers the from - mild-mod with identify patients ) can Institute for need the and lesions, TBI, intracranial erate post- a week to intervention up neurosurgical the presence detected also tests ELISA injury. in blood proteins UCH-L1 and both GFAP of a TBI. Under following one hour within samples also is Banyan a January 2016 collaboration, Philips Royal with working two these TBI, using mild for test blood of-care biosensor Magnotech Philips’ and biomarkers array single-molecule Quanterix’s technology. individual analyze and detect can technology Quanterix in the blood. molecules protein in a panel biomarkers Banyan’s include will ------. Cincinnati Cincinnati combinato Inc . The plat RNAscope . . Inc Inc . Diagnostics orp ell C C laboratory-developed laboratory-developed GeneSight Health Genetics extracts the DNA (that has has the DNA (that extracts GeneSight (ACD). (ACD). Inc. Diagnostics Cell Advanced (genetic testing for for testing (genetic Inc. Health Assurex echne -T ics Vitro In Diagnost

riad My Bio Advanced urex Ass rial pharmacogenomics platform to measure measure to platform pharmacogenomics rial simultaneously in genes, variations numerous rec patient-specific provide them to weighing medications, psychiatric for ommendations - path genetic on multiple work typically which ways. analyzes and swab) a cheek with been collected 55 FDA-approved to response patient for it depression, treat that medicines psychiatric (PTSD), disorder stress posttraumatic anxiety, other and schizophrenia, disorder, bipolar The acquisition conditions. health behavioral the into expand to an opportunity Myriad gives business its a part of as market neuroscience other five its to unit adding an established plan, (autoimmune, areas specialty medical existing and care, preventive oncology, dermatology, attempts strategy business Myriad’s urology). cur they (if questions patient four address to a disease; get they will a disease; have rently should how and a disease; treat they should form allows for the detection and monitoring monitoring and the detection for allows form at biomarkers and RNA molecules single of in the applications with level, the single-cell markets. testing companion and diagnostics reagents, and kits assay include Products together which software, and probes, target - the com for in revenues in $25mm brought months. Advanced twelve the last for pany almost raised in 2006 and formed was Cell Morningside including investors from $40mm Summit Partners, Venture New Leaf Venture, Investment Ventures. Kenson and Partners, (Advanced Inc. Co. & Jefferies Banks/Advisors: Inc.) Diagnostics Cell and the the and Center Medical Hospital Children’s the company inception, its . Since Clinic Mayo four through $60.5mm than more raised has financ in debt $33mm as well as rounds venture CPGx its uses test neuropsychiatric ing, and had 2015 sales exceeding $60mm. exceeding 2015 sales had ing, and Assurex’s Assurex was founded in 2006 with genetic test- genetic with 2006 in founded was Assurex ing technology licensed from the acquired private mo- private acquired Inc. Genetics Myriad medicine personalized and diagnostics lecular firm and front up $225mm for health) behavioral on based earn-outs in potential $185mm fund to plans Myriad milestones. performance a and on hand cash through the transaction JP from financing debt committed concurrent (Aug.) Chase. Morgan /In Vitro Diagnostics /In Vitro to cash $250mm paid Corp. Bio-Techne pathology molecular held privately acquire firm in $75mm to up include also could The deal (Aug.) earn-outs. the into foray Bio-Techne’s marks deal The ge sells and develops ACD field. genomics for its RNA in situ nomic analysis consumables hybridization technology ❚ & Acquisitions Mergers Protagonist Protagonist

nets nets Pharma Zosano closes $11.8mm two-tranche $11.8mm two-tranche closes nets $173.6mm in IPO $173.6mm nets Medpace company an Informa Inc., Information, Business ©2016 Informa nets $83.7mm in IPO $83.7mm nets Therapeutics nets Provectus company Biopharma public follow-on efforts $5.5mm in best offering in FOPO $13.9mm nets Pharma Recro $24.2mm FOPO nets Sophiris CNS-focused placement $7mm in private NovaBay agreement; $20mm funded up front up $20mm funded agreement; nets Pharmaceuticals Arrowhead placement private through $43.2mm public through $713.7mm net BioMarin offering RDO via $4.7mm nets Cel-Sci FOPO via $18.8mm nets Eiger $10.3mm raises Therapeutics Fate placement private through IPO in $27.9mm nets Gemphire $4.65mm nets Biopharma Hemispherx offering direct in registered $100mm receives Therapeutics Heron Partners Capital Tang from loan debt $50mm in convertible sells Inotek sellsIntelGenx future XL royalties Forfivo $Cdn8mm for Holdings SWK to investment receives Health InVentiv International Advent from public through $8.4mm nets MabVax shares preferred and common of sale CRO financing for Omeros $37.6mm lands offering Public public through $59.4mm nets OncoMed sale stock $16mm nets offering rights Onconova Palatin company therapeutics Peptide in FOPO $8.7mm nets Technologies $30mm PIPE to up plans PixarBio listing public following company Biopharma ❚ MARKET INTELLIGENCE

of neuro-multiplex assays for research in this ❚ ratory (neonatal critical care), and hemostasis. therapeutic area. This deal expands Quanterix’s Medical Devices Mallinckrodt’s development and reformulation, biomarker menu within neurology; so far it has Mergers & Acquisitions regulatory, and manufacturing expertise should help progress Stratatech’s compounds. worked with several partners (including bioM- /Medical Devices erieux SA in infectious diseases under a 2012 agreement) and has 40 assay kits (it expects Allergan PLC Alliances to double this number by year-end) including ForSight Vision5 Inc. /Medical Devices those to detect Alzheimer’s disease and other Allergan PLC is paying $95mm up front to Danaher Corp. neurodegenerative conditions. acquire private ophthalmic firmForSight Vi- Devicor Medical Products Inc. sion5 Inc. Allergan will also make an earn-out Endomagnetics Ltd. FlowJo LLC payment upon the launch of ForSight’s lead Illumina Inc. product. (Aug.) Endomagnetics Ltd. granted Devicor Medical Products Inc. exclusive rights to sell the Senti- FlowJo LLC partnered with Illumina Inc. to ForSight’s lead program is a non-invasive peri- develop and co-promote analysis software for mag magnetic surgical guidance system in the ocular ring providing extended drug delivery US and Canada. (Aug.) next-generation sequencing (NGS) data. (Aug.) and reduction of elevated intraocular pressure Sentimag is indicated for sentinel node loca- Per the agreement, FlowJo will develop a new (IOP). The ring is inserted on the eye surface at tion detection during breast cancer surgery. software application and provide secondary and the physician’s office and releases the medica- The technology uses magnetic susceptometry tertiary analysis and visualization of datasets. tion bimatoprost over multiple months to lower to generate an alternating magnetic field that The application will then be integrated with Illu- elevated IOP in glaucoma and ocular hypertensive magnetizes iron oxide particles in Sienna, a mina’s single-cell RNA BaseSpace app. FlowJo’s patients. The standard treatment for IOP is eye tracer that is subcutaneously injected and technology was developed by its founders at drops, which are difficult to use by many patients. filtered by the lymphatic system, and enables Stanford based on single cell flow for mass cy- In Phase II trials, ForSight is comparing the ring to surgeons to locate lymph nodes without the tometry analysis. Illumina recently announced twice-daily timolol eye drops. The initial results need for radioactive seeds or tracers. Sentimag that is co-developing a commercial solution were positive. ForSight’s products will fit nicely also detects the Magseed, an implantable for high-throughput sequencing of single cells with Allergan’s ophthalmic portfolio. magnetic seed to help guide surgeons during with Bio-Rad Laboratories Inc. Mallinckrodt PLC breast lumpectomy procedures. Sentimag is Financings Stratatech Corp. highly complementary to Devicor’s Mammo- tome vacuum-assisted breast biopsy system. /In Vitro Diagnostics Mallinckrodt PLC acquired privately held regenerative medicine company Stratatech Exact Sciences Corp. GlaxoSmithKline PLC Corp. (cell-based skin substitute). Stratatech’s Galvani Bioelectronics (molecular diagnostics for Exact Sciences Corp. progenitor keratinocyte (the predominant cell Verily Life Sciences cancer) netted $126mm through a public sale type in the skin’s outermost layer, the epider- GlaxoSmithKline PLC and Verily Life Sciences of 8.5mm common shares at $15.50. Some of mis) tissue-engineering technology produces LLC formed a new joint venture company Galvani the proceeds will fund commercialization of living tissues designed to mimic human skin 48 Bioelectronics focusing on bioelectronic medi- Cologuard, the company’s DNA-based stool test and promote tissue regeneration. (Aug.) for colorectal cancer. (Aug.) cines. The two parent companies will contribute The company is developing StrataGraft, a ge- existing IP rights and invest up to £540mm Investment Banks/Advisors: Canaccord Genu- netically engineered allograft skin tissue, to ($702mm) over a seven-year term (subject ity Inc.; Jefferies & Co. Inc.; Robert W. Baird & produce the body’s natural wound-healing to completion of discovery and development Co. Inc. response, fight infection, and improve blood milestones). (Aug.) flow in severe burns, ulcers, and other chronic GSK will hold a 55% stake in the company, while Interleukin Genetics Inc. skin injuries, as an alternative to autograft Verily holds the remaining 45%. The agreement Interleukin Genetics Inc. (develops genetic procedures (skin transplantation). StrataGraft tests) grossed $5.6mm through the private brings together Verily’s technical expertise in the uses human dermal fibroblasts and NIKS miniaturization of low-power electronics and data placement of 56.3mm common shares at $0.10 (Near-diploid Immortalized Keratinocytes that (a 9% discount) to returning shareholders analytics with GSK’s drug discovery and develop- form Skin) cells to produce in culture a fully ment expertise. The company will be based in the Bay City Capital, New Enterprise Associates, stratified epidermis. NIKS were discovered at UK within GSK’s global R&D center at Stevenage, Pyxis Innovations, and company management. the University of Wisconsin, Madison in the and will initially focus on inflammatory, metabolic, Interleukin also issued seven-year warrants to laboratory of B. Lynn Allen-Hoffman, PhD, who and endocrine disorders. Kris Famm, GSK’s VP of purchase another 56.3mm shares exercisable founded the company in 2000 and is the cur- Bioelectronics R&D, will be president of the new at $0.10. The firm will use some of the funds to rent CEO. Unlike primary keratinocytes, NIKS company. Bioelectronic medicine is a new field commercialize its PerioPredict test for severe are pathogen free and capable of proliferat- that uses miniaturized implantable devices that periodontal disease. (Aug.) ing indefinitely. StrataGraft is in Phase III for modify electrical signals that pass along nerves deep partial-thickness (second-degree) burns Quotient Ltd. in the body. GSK has been active in the area since (with FDA approval expected by 2020) and in 2012 having entered into around 50 research Transfusion diagnostics firm Quotient Ltd. Phase II for full-thickness (third-degree) burns. collaborations and investing $50mm in the area. publicly sold 3.2mm common shares (includ- StrataGraft is also in Phase II as a biologic; it ing the overallotment) at $5.50 apiece for was granted orphan status by the FDA in 2012 Financings net proceeds of $16.6mm. The company will and Stratatech anticipates a BLA filing soon. If /Medical Devices use some of the funds for development and approved, it would have regulatory protection commercialization of the MosaiQ donor and through 2032. In 2015 the company also signed Avinger Inc. patient blood screening and characterization a five-year contract with theU S Department of Avinger Inc. (devices for peripheral artery dis- platform. (Aug.) Health and Human Services’ BARDA, which will ease) netted $27.9mm through the follow-on Investment Banks/Advisors: Jefferies & Co. Inc. procure an inventory of the StrataGraft tissue offering of 8.57mm common shares at $3.50. for emergency use. ExpressGraft is Stratatech’s Some funds may be used to repay debt under Roche preclinical anti-infective tissue, which recently its loan agreement with CRG. (Aug.) Foundation Medicine Inc. received the FDA nod to enter the clinic for non- Investment Banks/Advisors: BTIG LLC; Canaccord Foundation Medicine Inc. (cancer diagnostics) healing diabetic foot ulcers. The acquisition Genuity Inc.; Cowen & Co. LLC; Stephens Inc. entered into a $100mm credit facility with gives Mallinckrodt a tissue-engineering tech- Roche Finance Ltd., which made $80mm nology in a new therapeutic category outside Biolase Inc. available to the company immediately. (FM is its core areas of neurology, rheumatology, ne- Biolase Inc. (dental lasers and imaging equip- majority owned by Roche.) (Aug.) phrology, pulmonology, immunotherapy, respi- ment) raised $10mm in a private placement

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 49 invivo.pharmamedtechbi.com - ❚ September 2016 | InSeptember Vivo . MARKET INTELLIGENCE INTELLIGENCE MARKET Inc . Inc Pfizer Medivation In the highest-valued healthcare deal in 2016, in 2016, deal healthcare In the highest-valued cash--$81.50 $14bn in paying is Inc. Pfizer public acquire premium)--to 25% (a share per (Aug.) Inc. firm Medivation cancer-focused for bid a hostile launched in April, Sanofi Back share, per $52.50 pay to offering Medivation - re immediately board the company’s which the upped Sanofi later months Three jected. sales) talazoparib for a CVR to $58 (plus offer and rejected again once Medivation but in which process bidding a formal initiated Celgene, AstraZeneca, including companies interested. reportedly were Gilead and Merck, Xtandi product, one marketed Medivation’s - mul inhibit to designed is (enzalutamide), signaling receptor in the androgen steps tiple on The drug is cell. the tumor within pathway cancer prostate castration-resistant for market and non-metastatic for trials late-stage in and advanced cancers, prostate hormone-sensitive carcinoma. hepatocellular and cancer, breast and agreement, Medivation Under a 2009 cur are and Xtandi co-developed Astellas ’s Gene Therapy Gene Therapy ’s of North Carolina University PhD, Jude Samulski, Richard director Center CSO. the start-up’s as serves who currently adeno-associated recombinant The company’s and chimeric include technologies (AAV) virus glycan dual and vectors self-complementary a in targeting potential with AAVs receptor Its diseases. neuromuscular and CNS of variety - neu axonal giant I for in Phase is program lead - preclini includes also pipeline its and ropathy Canavan ataxia, Friedreich’s for candidates cal dystrophy, muscular Duchenne and disease, rare own Pfizer’s complement will which of all also is The Big Pharma therapies. gene disease manufacturing therapy gene Bamboo’s gaining earlier UNC from bought Bamboo which facility, in use for candidates producing is and year this I/II testing. Phase sales in the US, where it co-marketing rently $1.4bn H1 2016 and for $637.8mm reached at peaked 2015 sales in 2015. (Worldwide late-stage two has also $1.9bn.) Medivation III PARP a Phase is Talazoparib candidates. that cancer breast BRCA-mutated for inhibitor while year, last BioMarin from in-licensed was CureTech from (licensed II pidilizumab Phase treating for an anti-PD-1 antibody in 2014) is compounds Both lymphoma. B-cell large diffuse and in other cancers be efficacious could be combined to the potential has pidilizumab assets. immuno-oncology Pfizer’s of some with in the success own its had has The Big Pharma cancer breast marketed its with space oncology - the Mediva With palbociclib. Ibrance therapy a leading to become seeks Pfizer tion buy, time the two the first not is This player. cancer In 2008 together. business done have firms co-develop to rights Pfizer licensed Medivation in Bamboo earlier this year. (Bamboo raised raised (Bamboo year. this earlier Bamboo in the For February.) in round A Series its in $49.5mm out $150mm Pfizer is shelling remaining equity, will Bamboo’s selling shareholders up front and based earn-outs of up to $495mm be eligible for commercial regulatory, and on development, its key programs. Post-transaction,milestones of sub- owned Pfizer wholly a becomes Bamboo in 2014 by the sidiary. Bamboo was founded Harvard Harvard . . orp Harvard Medical Medical Harvard C . Inc . Inc (antibodies (antibodies University ashington . Therapeutics Therapeutics Inc acquired the remaining 78% 78% the remaining acquired Inc. Pfizer uticals Pharmace - re diseases (rare Therapeutics Inc. Bamboo icals Pharmaceut amboo

B Pfizer Denali Afimmune Biopharma DS Incro of - sys nervous central and neuromuscular to lated (Aug.) own. already not did it conditions) tem Pfizer paid $43mm for the initial 22% stake Pfizer paid $43mm for the initial 22% stake As it strives to become a leading gene therapy player, Led by CEO and founder Lawrence Fritz, PhD (also - founder/co-founder of several biotechs includ ing Covella, Conforma, Athena, and Idun), Incro is studying a programmed necrotic cell death - pathway (known as necroptosis) for neurode generative and inflammatory diseases, including amyotrophic lateral sclerosis and Alzheimer’s disease. Although little is known about the stealthy Incro, Denali is interested in its small- molecule inhibitor of the RIP1 kinase (known to control signaling in inflammation and cell death necroptosis), apoptosis and pathways including which Incro previously licensed from acquired private San private acquired Therapeutics Inc. Denali Pharmaceuticals Incro biotech Diego-based inflammatory and (neurodegenerative Corp. (Aug.) amount. an undisclosed for diseases) /Pharmaceuticals - Sci Dignity as known (formerly Biopharma DS business anti-fibrotic its out Ltd.) spun ences conducted . DS Afimmune company, a new into efforts on its focus could it so that out the spin (Aug.) offerings. dermatology DS102, a bioactive lipid Afimmune will work on steatohepa- compound in Phase I for non-alcoholic studies for idiopathic titis (NASH) and in preclinical pulmo- chronic obstructive and pulmonary fibrosis NASH the for trials IIa Phase (COPD). disease nary this year, and Phase IIaindication are expected later now turn its attention to for COPD will follow. DS can for atopic dermatitisdermatology compounds DS107 - and pruritis, and DS109 for inflammatory skin condi tions including acne. ❚ & Acquisitions Mergers . The program--discovered in the in the . The program--discovered University in the a professor PhD, Yuan, Junying of lab at biology cell of department an RIP1 kinase-regulated --demonstrated School also Denali necroptosis. controls that pathway assess to Europe in a CTA month filed this the of pharmacokinetics and tolerability, safety, a Phase via volunteers in healthy RIP1 inhibitor the next within start to expected is which I trial, the evaluate will studies Future months. two a Denali, patients. AD and ALS in candidate start-up, disease-focused neurodegenerative a completing year, last just founded itself was to a biopharma by A (the largest Series $217mm Incro, of acquisition its with Concurrent date). with CNS of in the area deals signed also Denali Parkinson’s for inhibitors (LRRK2 Genentech W and disease) targeting neurodegeneration-causing protein protein neurodegeneration-causing targeting develop to collaborations AD), and for ApoE with therapeutics crossing blood-brain-barrier F-star and Bioscience Blaze - - . . Inc Inc . Inc Holdings . td Holdings L ap -C y Medical y spre heck XTANT Medical XTANT O K2M Group K2M C (regenerative (regenerative Inc. Holdings Medical Xtant raise to plans devices) medical and medicine an of offering a rights $10mm through to up will unit (each units of number undisclosed one warrant and share one common of consist The company share). one common purchase to growth its support to the proceeds use will - instru surgical increasing including strategy for and inventory biologics fixation and ments (Aug.) needs. development business R&D and (protecting patients from from patients (protecting Inc. Medical Osprey used (contrast) dye X-ray of effects harmful the im- angiographic performed commonly during $A28mm ($21.5mm) raised aging procedures) CHESS 100mm of placement private a in 50mm (representing Interests Depository institutional to $A0.28 at shares) common The offering investors. sophisticated and tranche the first with tranches be in two will ordinary (19.3mm CDIs 38.5mm of consisting of consisting tranche the second and shares) - Bran shares; (30.8mm common CDIs 61.5mm $A10mm in to committed Partners don Capital approval stockholder to subject tranche; this the use will 2016). The company 30, on August its of commercialization expand to proceeds product its R&D of continue System, DyeVert and evaluations, clinical ongoing portfolio, for (Aug.) growth. accelerate to - Securi Potter Bell Banks/Advisors: Investment Capital Vesparum Inc.; Genuity Canaccord ties; (spinal devices) sold sold devices) (spinal Inc. Holdings K2M Group convert 20-year in 4.125% $47mm) $50mm (net ible senior notes to qualified institutional buy institutional qualified to senior notes ible semi-annually interest pay will The notes ers. year, 15 each August 15 and on February in cash on based convert will They beginning in 2017. per shares common 45.7603 of rate an initial the $21.85; to (equivalent amount principal $1k (Aug.) $16.88). averaging was stock - prepara for capsule (ingestible Ltd. Check-Cap grossed screening) cancer colorectal tion-free 643.6k of offering direct $5.9mm in registered 10- prior to $1.90 (20% premium at shares pre-funded 2.5mm and average) trading day $0.05) of price (exercise $1.85 at warrants institutional focused healthcare a single to proceeds the use will company The investor. - screen cancer its develop further clinically to the was Markets Capital Chardan system. ing Roth and Group Maxim and agent placement (Aug.) advisors. financial were Capital Capital Chardan Banks/Advisors: Investment Capital Roth LLC; Group Maxim Markets; Partners of 88.5k convertible preferred shares at $113. $113. at shares preferred convertible 88.5k of - 100 com to convert will share preferred Each $1.13 of price conversion (implied mon shares also Investors discount). 6.6% per share; 2mm purchase to warrants five-year received - begin (exercisable price strike $2.00 at shares use will The company 2017). 8, ning on August (Aug.) innovation. and growth for proceeds the company an Informa Inc., Information, Business ©2016 Informa ❚ MARKET INTELLIGENCE

and commercialize its Dimebon (latrepirdine), is still pending with an updated timeframe of AEterna Zentaris Inc. which was in Phase II for Huntington’s disease October 2016. (Aug.) Rafa Laboratories Ltd. and Phase III for Alzheimer’s. In April 2011 they As part of the agreement, Teva will acquire three AEterna Zentaris Inc. granted Rafa Laboratories announced that the Phase III Huntington’s trials distribution centers in Olive Branch, MS, Weston, Ltd. exclusive rights to sell its Zoptrex (zoptare- failed to achieve co-primary endpoints and the FL, and Groveport, OH and their respective em- lin doxorubicin) for endometrial cancer in Israel program was discontinued. Nine months later ployees. Anda will continue to operate as a stand- and the Palestinian territories. (Aug.) they ceased development of the drug for all alone business. Anda distributes generic, brand, AEterna gets undisclosed money up front as well uses, ending their collaboration. Investment specialty and OTC products across the US and is as regulatory and commercialization milestones Banks/Advisors: Centerview Partners LLC; expected to generate over $1bn in third-party net and double-digit royalties. Zoptrex, a synthetic Guggenheim Partners LLC (Pfizer Inc.); Evercore revenue in 2016. peptide carrier linked to doxorubicin, is in Partners; JP Morgan & Co. (Medivation Inc.) Phase III trials for endometrial cancer, with an Rasna Therapeutics Inc. Alliances NDA filing expected during the first half of 2017. /Pharmaceuticals As a means to become public, cancer drug develop- Rafa is responsible for development, registra- er Rasna Therapeutics Inc. reverse merged with Advaxis Inc. tion, and commercialization in its territories, online travel information company Active With Amgen Inc. while AEterna will take care of supplying the drug to the company. Me. Rasna will trade on the OTC markets. (Aug.) Advaxis Inc. licensed Amgen Inc. exclusive The company was founded in 2013 by scientists worldwide rights to develop and sell its pre- AnGes MG Inc. including Intercept Pharmaceuticals co-founder clinical cancer immunotherapy ADXSNEO, the Vical Inc. Roberto Pellicciari, PhD, and is developing first project to arise from Advaxis’ new MINE Vical Inc. (gene-based medicines for unmet treatments for leukemia and lymphoma. Its (MyImmunotherapy Neo-Epitopes) program for needs) received a $7.8mm equity investment initial focus is the inhibition of LSD1 (lysine spe- customizable cancer treatments. (Aug.) from its longstanding partner, AnGes MG. The cific demthylase-1), an enzyme involved in epi- Amgen will pay $40mm up front and purchase investment is being funded through a private genetic control in acute myelogenous leukemia. $25mm of Advaxis’ common shares (3mm shares placement of 1.8mm shares at $4.24 (flat to In addition, Rasna is also working on inhibitors at $8.20, a 2% premium), and could hand over up market) and will increase AnGes’ equity stake of NPM1, a gene that is up-regulated and mu- to $475mm in development, regulatory, and sales in the company from 2.4% to 18.6%. (Aug.) tated in many tumor types. The firm hopes to milestones, plus high-single to mid-double- identify its first lead candidate by 2017. The two companies have partnered on various digit royalties (Strategic Transactions assumes products since 2006 and in January 2015 entered Sorrento Therapeutics Inc. 8-50%). Advaxis will continue developing the into a collaboration to develop and commercialize Scintilla Pharmaceuticals Inc. compound through proof-of-concept, and will an equine polyclonal antibody for Ebola. Under Scilex Pharmaceuticals Inc. be charge of manufacturing, while Amgen the collaboration, Vical will develop and provide funds all clinical and commercial activities. Sorrento Therapeutics Inc.’s Scintilla Pharma- the DNA vaccine encoding the glycoprotein anti- MINE utilizes massive parallel sequencing to ceuticals Inc. division entered a binding term gen of the 2014 Zaire Ebola strain (formulated with sheet to acquire private pain drug developer develop personalized immunotherapies based Vical’s proprietary Vaxfectin adjuvant). AnGes on the specific mutations or neoepitopes in a 50 Scilex Pharmaceuticals Inc. (transdermal patch will receive exclusive rights to develop and drug delivery). Upon the execution of the agree- patient’s tumor. ADXSNEO is used together commercialize the antibody in Japan and bear ment, Sorrento paid Scilex $500k. (Aug.) with Advaxis’ Lm Technology (live attenuated all associated costs. Listeria monocytogenes) and designed to Scilex will receive up to $70mm in Scintilla stock stimulate cellular immune responses against ARAM Medical contingent upon closing conditions and Scintilla’s those neoepitopes. In addition to developing Rockwell Medical Inc. completion of an equity financing or IPO. Scilex ADXSNEO, Advaxis and Amgen will also iden- Rockwell Medical Inc. licensed ARAM Medi- has a pipeline of patch technology candidates for tify and target additional neoepitopes using cal exclusive rights to sell two therapies for pain management. Its lead compound is ZTlido the Lm Technology, and could develop other patients with end-stage renal disease (ESRD) (lidocaine patch 1.8%), a post-herpetic neuralgia immunotherapy constructs. on dialysis. Included in the deal are rights for treatment, for which Scilex filed an NDA (as part Triferic (ferric phosphate) and Calcitriol (Vitamin of the 505(b)(2) regulatory pathway) in July 2015 Adverum Biotechnologies Inc. D) in 13 countries including the Kingdom of and plans to re-submit a revised NDA in mid-2017. Editas Medicine Inc. Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, The company also has higher-strength lidocaine Adverum Biotechnologies Inc. and Editas Lebanon, Jordan, United Arab of Emirates, Ye- and D2T (acute pain) patches in preclinical stud- Medicine Inc. are teaming up to deliver ge- men, Syria, Algeria, Tunisia and Egypt. (Aug.) ies. Scilex’s platform technology--an anhydrous, nome editing medicines to treat up to five single-layer, drug-in-adhesive topical patch for Rockwell will manufacture the products, and gets inherited retinal diseases. (Aug.) targeted transdermal drug delivery--attempts money up front plus high-double-digit sales royal- to address common issues such as adhesion Adverum is contributing its next-generation ties over the initial ten-year deal term. ARAM will and inadequate dosing associated with other adeno-associated viral (AAV) vectors for use with meet annual minimum purchase requirements, patches. Scintilla will add Scilex’s candidates to Editas’ CRISPR-based genome editing technolo- and is responsible for clinical and regulatory its own pipeline, which includes the Phase I/II gies to create new drugs aimed at eye diseases expenses. (The products are expected on the mar- RTX (resiniferatoxin) for opiate refractory cancer for which there are currently limited treatment ket in the licensed territories within the next 18 pain; Phase II trials are expected to begin in options. Editas will pay Adverum $1mm up front months.) Triferic is an iron absorption stimulant early 2017. Sorrento originally acquired RTX in to study the firm’s vectors in clinical trial and used to prevent and treat anemia and maintain its October 2013 buy of pain therapeutics com- support all preclinical activities (a portion of the hemoglobin levels, while Calcitriol is a vitamin pany Sherrington Pharmaceuticals. following the up-front payment will be credited against this D injection for secondary hyperparathyroidism closing of the current transaction, Sorrento will funding obligation). Editas is paying a $1mm in dialysis patients. Earlier this year, Wanbang contribute $10mm to Scintilla to support further option exercise in return for exclusive rights to Biopharmaceutical licensed exclusive Chinese development of ZTlido as well as RTX and other the AAV vectors for use in each indication. (It rights to both products in a deal that could be candidate programs. Investment Banks/Advisors: may exercise the option for the first indication worth up to $39mm to Rockwell. Joseph Gunnar & Co. (Sorrento Therapeutics Inc.) until the first anniversary of the agreement and for the other four indications until the third Aslan Pharmaceuticals Pte. Ltd. Teva Pharmaceutical Industries Ltd. anniversary.) Adverum also stands to receive Bristol-Myers Squibb Co. Allergan PLC up to $16mm in development and commercial Bristol-Myers Squibb Co. licensed back rights Anda Inc. milestones and sales royalties in the mid- to develop and sell Aslan Pharmaceuticals Pte. Teva Pharmaceutical Industries Ltd. acquired single-digits to low-teens. Adverum was created Ltd.’s Phase I ASLAN002 in China, Australia, generics company Anda Inc. from Allergan PLC earlier this year through the merger of Avalanche Korea, Taiwan, and other Asian countries. (Aug.) for $500mm. Teva’s acquisition of all of Allergan Biotechnologies and Annapurna Therapeutics. The deal comes five years after BMS partnered

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 51 invivo.pharmamedtechbi.com ❚ September 2016 | InSeptember Vivo MARKET INTELLIGENCE INTELLIGENCE MARKET Pink Sheet Pink Pharmaprojects RxScorecard Scrip Sitetrove Trialtrove Intelligence with a with Intelligence Perspective Global Pharmaintelligence.informa.com Biomedtracker Healthcare Datamonitor In Vivo Meddevicetracker Medtrack Insight Medtech

the candidate, then named BMS777607, with Attenua Inc. Biothera Pharmaceuticals Inc. Aslan in the same territories. Financial terms of Catalyst Biosciences Inc. Merck & Co. Inc. the original agreement were not disclosed, but in Catalyst Biosciences Inc. divested three of its Biothera Pharmaceuticals Inc. and Merck & the current alliance BMS pays $10mm up front, oral neuronal nicotinic receptor (NNR) CNS Co. Inc. entered into a trial collaboration to at least $50mm in development and regulatory programs to Attenua Inc.: TC5619, TC6987, and evaluate the combination of Merck’s anticancer milestones, and sales royalties. The Big Pharma TC6683. Attenua plans to repurpose one mol- immunotherapy Keytruda (pembrolizumab) will conduct and pay for development and com- ecule for cough, and another for an undisclosed with Biothera’s Imprime PGG for advanced mercialization. Aslan says the present transaction rare pediatric disorder. (Aug.) melanoma that no longer responds to initial is in line with its in-licensing strategy, which Catalyst initially gained the NNR pipeline through treatment with a checkpoint inhibitor, and involves improving the value of the drug candi- metastatic triple negative breast cancer. (Aug.) date through use of its internal resources and its March 2015 reverse merger with Targacept (the Merck has been supplying Keytruda to Biothera presumably out-licensing it for further study. The original developer). Many of Targacept’s NNR since late last year and funding initial combo money gained from partnering back ASLAN002 compounds had already been discontinued at trials, but the companies have now entered with BMS, along with a recent $23mm mezzanine that point and the merged company planned to into a formal collaboration agreement to work round, puts Aslan in a strong cash position prior focus instead on the more promising hemostasis together on a Phase II trial, which will be spon- to filing an IPO. ASLAN002 is a cMET receptor ty- pipeline Catalyst had brought to the table. Acting sored by Biothera. Keytruda is Merck’s PD-1 an- rosine kinase/RON immune checkpoint inhibitor on NNRs (also known as neuronal acetylcholine that has been tested in gastric and breast cancers. nicotinic receptors (nAChRs)), which are found on tagonist that is on the market for melanoma and BMS may potentially combine ASLAN002 with its nerve cells, this drug class regulates neurotrans- non-small cell lung cancer, awaiting approval marketed immunotherapy Opdivo. mitters in the CNS. TC5619 (bradanicline) is an for head and neck cancer, and in over a dozen Alpha-7 NNR agonist for attention deficit/hyper- clinical trials for numerous other solid and AstraZeneca PLC activity disorder (ADHD) and cognitive dysfunction blood tumors. Imprime PGG is a Pathogen As- Pfizer Inc. in schizophrenia and Alzheimer’s disease (AD). sociated Molecular Patterning (PAMP) molecule Just two days after Pfizer Inc. paid $14bn to It was part of an option AstraZeneca had under in Phase II trials for colorectal and non-small acquire Medivation Inc., the Big Pharma is an amended 2005 deal, but the compound cell lung cancers, melanoma, and leukemia, acquiring development and commercialization was discontinued by Targacept in 2012 after and preclinical studies for additional tumors. rights to AstraZeneca PLC’s small-molecule separate Phase II trials didn’t meet primary The compound acts as an ignition switch, help- anti-infectives portfolio in markets where AZ endpoints. TC6987, also an Alpha-7 NNR ago- ing the innate immune system enhance the holds rights. (Aug.) nist, for pain and unspecified disorders, was efficacy of anti-angiogenic, tumor targeting, and immune checkpoint inhibitor antibodies. Pfizer is paying $550mm up front and another licensed to GlaxoSmithKline through a 2007 $175mm in January 2019. AZ also stands to deal that was terminated in 2011 during Phase Blaze Bioscience Inc. receive up to $250mm commercial, manufactur- II due to a shift in GSK priorities. TC6683 (an Denali Therapeutics Inc. ing, and regulatory milestones; up to $600mm in Alpha-4 NNR agonist also known as AZD1446) Denali Therapeutics Inc. is collaborating with sales-related payments; and tiered double-digit for AD and ADHD, was also licensed in 2005 to Blaze Bioscience Inc. on the discovery of royalties on sales of Zavicefta and ATM-AVI in AZ, which terminated the deal in 2014 following therapeutics capable of crossing the blood- 52 certain markets. Included in the agreement suspended Phase II clinical trials in both indi- brain-barrier (BBB), a protective mechanism are the marketed drugs Merrem/Meronem cations. In exchange for these three programs that prevents harmful chemicals in the blood (meropenem) and Zinforo (ceftaroline fosamil), and related intellectual property rights and from passing into the brain. (Aug.) recently EU-approved drug Zavicefta (avibac- materials, Attenua will pay $1mm up front, up Under an October 2011 agreement with the Fred tam/ceftazidime), and clinical-stage ATM-AVI to $105mm in development, regulatory, and Hutchinson Cancer Center, Blaze gained an ex- (avibactam/aztreonam) and CXL. Originated commercial milestones, and royalties on net clusive worldwide license to patents and IP re- by Sumitomo Dainippon, Merrem/Meronem is sales. Attenua was recently formed to develop lated to tumor paint technology, which involves used in treating various infections including therapeutics for rare diseases, with a focus on the injection of a chlorotoxin variant peptide/ community-acquired pneumonia (CAP) and non-narcotic medicines for cough. Because nosocomial pneumonia, broncho-pulmonary fluorescent dye into a tumor to illuminate the the clinical data in CNS is already there for the cancer cells, enabling surgeons to visualize infections in cystic fibrosis, complicated acquired compounds, Attenua should be able to urinary tract infections (cUTI), complicated solid tumors during removal. Studies have move them right into Phase II proof-of-concept shown this diagnostic imaging agent is capable intra-abdominal infections (cIAI), gynecologi- for the new indications, which it expects to do cal infections, skin and soft tissue infections of crossing the BBB. Although no therapeutic in 2017. (SSTI), sepsis, and acute bacterial meningitis; area was specified for the current deal, Denali Pfizer’s rights will be global with the exception BioLineRx Ltd. has an option to license resulting discover- of Japan, China, Taiwan, and Korea. Zinforo is iPharma ies involving drugs that can be delivered into the CNS across the BBB. Concurrently, Denali an IV cephalosporin antibiotic for methicillin- New joint venture was established iPharma entered a $1bn tie-up to develop BBB-crossing resistant Staphylococcus aureus (MRSA), SSTI, with equal contributions (of $1mm each) from and CAP; AZ had rights worldwide except in therapeutics with F-star GMBH, which it has an biopharma BioLineRx Ltd. and Chinese venture North America and Japan, where (un- option to acquire. Allergan capital firm I-Bridge. (Aug.) der the Teflaro name) and Takeda (the drug’s Cerveau Technologies Inc. originator) have rights, respectively. For the The JV will develop clinical and pre-clinical Navidea Biopharmaceuticals Inc. following three products, Pfizer will get global candidates originating predominately in Israel rights excluding North America where rights and will target the Chinese healthcare market. In an attempt to resolve ongoing litigation be- are held by Allergan: Zavicefta is a combina- BioLineRx will screen and identify the early-stage tween Navidea Biopharmaceuticals Inc. and tion antibiotic for Gram-negative bacterial candidates (of interest for the Chinese popula- Hainan Sinotau Pharmaceutical Co., Ltd. (its infections, cUTI, cIAI, and hospital-acquired tion), which will then be in-licensed by iPharma Chinese distribution partner for Lymphoseek), pneumonia/ventilator associated pneumonia for further development and commercialization. Navidea executed a non-binding term sheet (HAP/VAP); Phase II ATM-AVI is aimed at Gram- Down the line, iPharma will also raise additional with newly created Cerveau Technologies Inc. negative bacterial infections caused by multi- funds from Chinese investors. I-Bridge, a recent for worldwide development and commercializa- drug resistant strains including cIAI; and CXL offshoot of C-Bridge Capital (a late-stage growth tion rights to NAV4694, a beta-amyloid imag- is a Phase III-ready combination of avibactam fund with $300 million in assets), has $100mm ing agent under development for diagnosing and ceftaroline for multidrug-resistant Gram- to be invested over eight years (Tasly Group is a Alzheimer’s disease. (Aug.) positive and Gram-negative pathogens includ- major limited partner in both funds), split with Navidea (formerly NeoProbe) initially licensed ing MRSA. The agreement allows AZ to focus on 80% for pharma and biotech and 20% for medi- rights to NAV4694 (then known as AZD4694) its main therapy areas--oncology, respiratory, cal devices, healthcare IT, and services. To date, from AstraZeneca, the compound’s originator, and cardiovascular and metabolic diseases. I-Bridge has funded five companies. under a December 2011 deal. The candidate,

In Vivo | September 2016 invivo.pharmamedtechbi.com invivo.pharmamedtechbi.com 53 invivo.pharmamedtechbi.com

- - - ❚ SA - Laborato Rovi . Inc , and , and Nordisk Novo . September 2016 | InSeptember Vivo in exchange for for in exchange Mysimba Inc . uticos armace F in 2014, but at the at in 2014, but DuoBody Inc MARKET INTELLIGENCE INTELLIGENCE MARKET s Therapeutics AS Group allows for the identification, the identification, for allows DuoBody Sciences Helsinn Pharma MEI Laboratorios Orexigen Genmab Gilead and commercialization milestones, and sales sales and milestones, commercialization and clinical pediatric conduct also will it royalties; deal The co-fund. will Recordati which studies, existing Recordati’s to an antipsychotic adds (meth- Desoxyn includes portfolio, which CNS (ethotoin) ADHD; Peganone for amphetamine) for (clorazepate) Tranxene and seizures; for in 2012). Lundbeck from acquired (all anxiety an up-front fee, a transfer price, and potential potential and price, a transfer fee, an up-front A product payments. milestone commercial a sig is There year-end. by expected is launch where in Spain, a therapy such for need nificant or obese. overweight are adults of 53% about licensed exclusive global rights rights global exclusive licensed Group Helsinn MEI Pharma sell and manufacture, develop, to - praci candidate leukemia myeloid acute ’s Inc. (Aug.) nostat. - The companies will work together to get praci trials III Phase into inhibitor, HDAC an nostat, for AML and potentially develop it for additional indications. MEI gets $20mm up front ($15mm cash and $5mm through an equity investment); $5mm upon dosing of the first patient in a Phase - III study of the candidate in patients newly diag nostics with AML who cannot receive induction therapy; up to $444mm in development, regulatory, and sales milestones; and tiered US sales royalties beginning in the mid-teens. Helsinn and MEI could also study a dosing regimen for pracinostat in combination with azacitidine for high-risk myelodysplastic syndrome. The deal expands Helsinn’s therapy reach into cancer treatments; up until now, the company’s focus in the oncology space has been through supportive care products. licensed Inc. Therapeutics Orexigen Gilead Sciences Inc. Sciences Gilead AS granted Genmab a second an option for (and rights exclusive technol DuoBody its use to license) exclusive candidates antibody bispecific develop ogy to (Aug.) HIV. for front and up to $277mm Genmab gets $5mm up milestonessales and regulatory, development, in additional payments for for the first project (and single-digit royalties. If future products), plus Gilead exercises its option for the second license, additional money will be payable. Gilead first gained access to commer to rights SA Rovi Farmaceuticos rios (naltrexone drug Mysimba obesity its cialize tablets release) prolonged HCl HCl/bupropion (Aug.) in Spain. Rovi will handle all commercialization activities in Spain and cover related expenses. Orexigen will supply Rovi with time, Genmab didn’t disclose details on the details disclose didn’t time, Genmab providing was it that only (saying partnership - tech its to access with biotech an undisclosed nology). - bispe of production full-scale and generation, development. therapeutic for antibodies cific the to access/licenses with Other companies , Janssen include platform . Novartis - & & . Oncodesign . himica C Inc . in the US and Canada Canada and US the in td SPA L Mitsubishi-Tanabe (Mitsubishi-Tanabe ). Vraylar , as well Bioscience Blaze and ), but it it but ), Foundation Fox J. Michael Industria Allergan Richter ’s leucine-rich repeat repeat leucine-rich ’s Inc. Genentech F-star Therapeutics / Ipsen and & Co. Merck received an ex received Therapeutics Inc. Denali targets for development, and prior to the the prior to and development, for targets licensed exclusive commercialization commercialization exclusive licensed utica armace F in of Medicine School University ashington Denali Roche Gedeon Recordati as several research centers, in the CNS area. area. the CNS in centers, research several as been had Genentech from The LRRK2 inhibitors - on the can working was the company shelved; - a collabora (including Parkinson’s for didates the with tion other Six stopped. were studies why unclear is (also testing preclinical in are inhibitors LRRK2 compounds including Parkinson’s), for mostly from inserted into any antibody to create a full-size full-size a create to antibody any inserted into ) mAb2 calls F-star (which antibody bispecific diseases. neurological treat to potential with over hand will and front up $6mm paid Denali It milestones. technical and funding research of number certain a nominate to option the has Fcab acquire the option to has I trials, Phase of start Denali If $450mm. for outright Gamma F-star option, the purchase exercise to not decides license to the right has instead the company candidates mAb2 of number a pre-determined and fees in license $1bn to up for in exchange and regulatory, (development, milestones was which Denali, royalties. tiered plus sales), of a plethora announced year, last formed just the F- with concurrent activity deal additional Series a $130mm disclosed also It news. star and research and in June, closed that B round , Genentech with collaborations development W , as well as the Bioscience Blaze and St. Louis, . Pharmaceuticals Incro of acquisition Genentech Inc. Genentech Among several deals announced on the same day, already connected via are and Genentech Denali Denali’s management team, which consists of several ex-Genentech executives who are now - able to fully dedicate resources toward neuro degenerative disease drug development. Denali concurrently penned agreements with biotechs such as (where it was approved for schizophrenia schizophrenia for approved was it (where 2015 and in September mania bipolar and marketedis as has rights in Japan and other Asian other Asian and in Japan rights has Pharma also is Richter per a 2006 alliance.) countries - dis depressive major the drug for developing failures) III trials Phase recent (despite order II). (Phase indications depression bipolar and to schizophrenia an MAA for submitted Richter approval European 2016 and the EMA in March deal, current In the Q1 2017. after anticipated is regulatory payment, an up-front gets Richter Recordati Industria Chimica & Farmaceutica & Farmaceutica Chimica Industria Recordati SPA and Tunisia, Algeria, Europe, Western in rights cariprazine Ltd. ’s Gedeon Richter to Turkey drug. (Aug.) antipsychotic Under a 2004 agreement, Richter licensed cariprazine--a dual dopamine D2/D3 receptor agonist--to clusive worldwide license to develop and sell sell and develop to license worldwide clusive ’s Roche Parkinson’s for 2 (LRRK2) inhibitors kinase (Aug.) disease.

orks can be can NantW . distribution distribution CHA Biotech Co. Co. Biotech CHA Inc . Inc . td . L . . o Modular Antibody Technology Antibody Modular C Therapeutics Therapeutics GMBH (constant Fc-domains with antigen- with Fc-domains (constant , and earlier this year with with year this earlier of Hope, and City agreed to form a joint venture firm to de- firm venture a joint form to agreed star F- Denali Sorrento CHA Biotech CHA platform, which introduces a novel binding binding a novel introduces which platform, an anti- of region Fc the constant into site in work existing Denali’s with together body, create will the partners space, the neurology Fcabs transporters to bind can that activity) binding The Fcabs barrier. in the blood-brain Using F-star’s F-star GammaF-star Ltd. , GMBH F-star and Therapeutics Inc. Denali vehicle asset-centric created newly its through - a collabora into Ltd., entered Gamma F-star new neurological develop and discover tion to into be delivered can that therapies disease Denali barrier. the blood-brain across the CNS Gamma F-star acquire option to an gained also (Aug.) I trials. Phase prior to The as-yet-unnamed JV will be 51% owned by The as-yet-unnamed JV will be 51% owned by CHA, and will receive $2mm in funding from each - of CHA and Sorrento. CHA’s NKC platform gener ates highly activated patient-derived cells from combination in used be will and blood, peripheral new create to therapies CAR Sorrento’s of five with further will JV the that treatments CAR-modified Under China. excluding globally, sell and develop terms of the deal, Sorrento gets an exclusive develop and sell CHA’s to license royalty-bearing trial-stage AKC technology in major territories (including the US and Europe), with co-exclusive rights in China. The deal is the latest in a push of South Korean immuno-oncology tie-ups, and marks the fourth oncology joint venture signed by Sorrento. It established JVs with CHA-Sorrento JV CHA-Sorrento and Inc. Therapeutics Sorrento Ltd. (CAR) receptor antigen chimeric sell and velop cell killer activated on CHA’s based therapies for CAR candidates Sorrento’s and technologies diseases infectious including areas therapy all (Aug.) cancer. and (a technetium Tc 99m tilmanocept agent to to agent tilmanocept 99m Tc (a technetium year a and nodes) in lymph tumors detect its breeched Navidea alleged Sinotau later to a license Sinotau granting intent of letter signed is agreement a definitive If NAV4694. Sinotau by initiated the lawsuit 60 days, within designated the as acting Cerveau with end will NAV4694 to rights worldwide gaining party, and milestones, fees, license for exchange in in formed was Cerveau Navidea. to royalties molecular and Sinotau between partnership Group Biomedical Enigma company imaging Lymphoseek Canadian (Navidea’s - technolo and diagnostics develop to partner) disorders. neurodegenerative for gies - ra labeled a fluorine-18 is III, in Phase now to ability its of Because diopharmaceutical. in the brain, deposits Beta-amyloid to bind a visualize--via physicians helps NAV4694 (PET) scan--the tomography emission positron indicator a key plaque, amyloid of presence in with Navidea partnered first Sinotau AD. of development Chinese 2014, licensing August Lymphoseek to rights commercialization and and Yuhan and 3SBio and and company an Informa Inc., Information, Business ©2016 Informa ❚ MARKET INTELLIGENCE

This is Orexigen’s first partner for Mysimba in is sold as Mysimba is parts of the world, in Acadia also plans to initiate a Phase II study Western Europe. Earlier this year the company 19 countries in Central and Eastern Europe. A with pimavanserin in Alzheimer’s disease agita- licensed Valeant commercialization rights in launch is expected later this year. tion during 2H 2016. (Aug.) 19 countries in Central and Eastern Europe. The Investment Banks/Advisors: Bank of America Pharming Group NV drug is sold in other parts of the world under Merrill Lynch; Cowen & Co. LLC; Goldman Sachs Valeant Pharmaceuticals the Contrave brand. & Co.; JP Morgan & Co.; Needham & Co. Inc.; International Inc. Piper Jaffray & Co. Medivir AB Pharming Group NV reacquired commercial BioPhausia AB rights in the US, Canada, and Mexico to its acute Advaxis Inc. Trek Therapeutics PBC hereditary angioedema drug Ruconest from Va- Cancer immunotherapies firm Advaxis Inc. Medivir AB licensed Trek Therapeutics PBC leant Pharmaceuticals International Inc. (Aug.) netted $28.5mm through the private sale of (TrekTx) exclusive rights to develop and com- In 2010, Santarus (acquired in 2013 by Salix, 2.2mm common shares at $13.50 apiece (a 4% mercialize its hepatitis C candidate MIV802 which was purchased by Valeant in 2015) got discount) to healthcare institutional specialist worldwide, with the exception of China, Taiwan, exclusive North American rights to the product, investors. Jefferies, Barclays Capital, Cantor Hong Kong, and Macau. (Aug.) then known as Rhucin. Under the current deal, Fitzgerald, Guggenheim Securities, Janney TrekTx will pay clinical development milestones Valeant will receive $60mm up front and up Montgomery, and HC Wainwright were the and sales royalties up to the mid-teens. Medivir’s to $65mm in sales milestones. Pharming will placement agents. (Aug.) BioPhausia AB subsidiary has the option to fund the transaction through a combination of Investment Banks/Advisors: Barclays Bank PLC; commercialize MIV802-containing products debt and new equity financing (a rights issue Cantor Fitzgerald & Co.; Guggenheim Partners in the Nordics and certain Western European to existing shareholders) of $80-100mm in the LLC; HC Wainwright & Co.; Janney Montgomery countries. Medivir licensed MIV802 and other next few weeks. Ruconest was approved by the Scott Inc.; Jefferies & Co. Inc. preclinical antiviral assets from Novadex Phar- FDA in mid-2014. At the end of Q2 2016, it had maceuticals AB in September 2012. MIV802 is net proceeds of $25mm in the US, where the Alimera Sciences Inc. a preclinical nucleotide polymerase inhibitor current HAE market is valued at about $700mm. Ophthalmic-focused Alimera Sciences Inc. net- which TrekTx plans to develop as a combina- The therapy is also being studied in Phase II ted $24.2mm through the follow-on public tion treatment for HCV. Just last month TrekTx in once- and twice-weekly dosing regimens offering of 18mm common shares at $1.40 received exclusive worldwide rights to Vertex for HAE prophylaxis. Should it be approved, each. Some of the funds will support continued Pharmaceuticals Inc.’s lomibuvir (VX222) and it would be the only marketed recombinant C1 commercialization of its intravitreal implant merimepodib (VX497) for infectious disease esterase inhibitor for both acute and prophy- Iluvien (fluocinolone) in the US and EU. (Aug.) applications. laxis use in HAE. Investment Banks/Advisors: Cowen & Co. LLC; Laidlaw & Co. Norgine BV Teijin Ltd. Valeant Pharmaceuticals Teijin Pharma Ltd. Amarin Corp. PLC International Inc. Versartis Inc. Amarin Corp. PLC (cardiovascular therapeu- Norgine BV licensed Valeant Pharmaceuticals Versartis Inc. licensed Teijin Pharma Ltd. tics) netted $65mm through the public sale 54 International Inc. rights to develop and commer- exclusive rights to develop and market the of 24.27mm American Depositary Shares cialize NER1006 colon cleansing oral solution recombinant growth hormone somavaratan (representing 24.27mm common shares; total in the US and Canada. (Aug.) (VRS317) in Japan. (Aug.) includes exercise of the overallotment) at NER1006 is a low-volume polyethylene glycol- The agreement continues until the earlier of $2.85. Proceeds will fund the ongoing REDUCE- based bowel prep used prior to colonoscopies. twelve years after the first commercial sale in IT long-term cardiovascular outcomes study of Phase III trials have been completed and a US Japan, or the expiration of certain Versartis Amarin’s marketed triglyceride-lowering prod- regulatory filing is expected later this year. In patents; the initial term is subject to automatic uct Vascepa (icosapent) in high-risk patients on addition to providing overall bowel cleansing, extension for three three-year terms. In return for statin therapy. (Aug.) NER1006 also focuses on the ascending colon the license, Teijin will pay Versartis $40mm up Investment Banks/Advisors: Cantor Fitzgerald in adults. Norgine will manufacture and supply front, $35mm in development milestone, regula- & Co.; Citigroup Inc.; HC Wainwright & Co.; Jef- Valeant with the finished product. Norgine chose tory milestones up to $55mm, and up to $35mm feries & Co. Inc.; SunTrust Banks Inc. to partner NER1006 with Valeant for its strong in sales milestones. The deal also includes presence in the US and Canadian gastroenterol- royalties in the high-twenties to mid-thirties Ampio Pharmaceuticals Inc. ogy space. In late 2005, Norgine licensed Salix (Strategic Transactions assumes 27-35%). The Ampio Pharmaceuticals Inc. (therapies for in- (acquired by Valeant last year) exclusive rights companies will form a joint steering committee. flammatory conditions) netted $3.5mm through to its MoviPrep bowel cleanser. Somavaratan is currently in Phase II/III trials for the sale of 5mm common shares and five-year pediatric growth hormone deficiency (GHD) and warrants (to purchase up to 5mm common Orexigen Therapeutics Inc. shares at a strike price of $1) at a combined Valeant Pharmaceuticals Phase II for adult GHD. It is in development as a twice-monthly therapy. Versartis will complete purchase price of $0.75 (a 17% discount) to an International Inc. unnamed institutional investor. The company Valeant Canada LP and fund all ongoing clinical studies. Once the Marketing Authorization Application has been will use the proceeds to advance the BLA for In their second agreement this year, Orexigen submitted in Japan, Teijin is responsible for Ampion (low molecular weight fraction of hu- Therapeutics Inc. licensed Valeant Pharmaceu- any additional studies in all indications and man serum albumin (HSA) in development for ticals International Inc. rights to commercialize has exclusive commercial rights. Versartis will pain due to osteoarthritis of the knee) and and distribute its obesity therapy Contrave (na- supply Teijin with the finished product. for future clinical trials. Financial West Group ltrexone HCl/bupropion HCl extended release) served as the placement agent. (Aug.) tablets in Canada. (Aug.) Financings Investment Banks/Advisors: Financial West Valeant will sell the drug through its Vale- /Pharmaceuticals Group ant Canada LP subsidiary, which will obtain regulatory approval in Canada and handle all Acadia Pharmaceuticals Inc. Aptevo Therapeutics Inc. commercialization activities and cover related Acadia Pharmaceuticals Inc. (CNS disorder Aptevo Therapeutics Inc. (cancer and blood costs. The regulatory filing is anticipated by therapeutics with a focus on psychoses) netted disease treatments) closed a $35mm term loan January 2017. Orexigen will supply Valeant $188mm in a public offering of 6mm shares at agreement with MidCap Financial. Aptevo got Canada with Contrave tablets in exchange for $33; the stock was issued under a previously $20mm immediately and is eligible for the an agreed-upon transfer price. Orexigen also filed shelf registration. The company’s lead second tranche of $15mm after the company stands to receive potential regulatory and sales product, Nuplazid (pimavanserin) was FDA ap- nets its first $40mm in product revenue in a milestones. Just five months ago, Orexigen proved for hallucinations and delusions related 12-month trailing period and it receives a final granted Valeant a license to the drug, which to Parkinson’s disease psychosis in April 2016. $20mm cash installment from Emergent Biosci-

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❚ . . Inc Inc Medpace Inc. Medpace (developer of of (developer September 2016 | InSeptember Vivo . . MARKET INTELLIGENCE INTELLIGENCE MARKET prescription lid and lash hygiene hygiene lash and lid prescription orp uticals Pharmace Inc C uticals Pharmace y a Avenova Omeros Oncomed Medpace B Nova or preferred share. Investors also received received also Investors share. or preferred - 1.8mm com for warrants A Class three-year $5.55 and of price an exercise at mon shares 1.8mm common for B warrants Class three-year its announced concurrently MabVax $6.29. at a 1 and Market Capital Nasdaq the to uplisting with in conjunction split stock reverse 7.4 for (Aug.) the uplisting. & Co. Laidlaw Banks/Advisors: Investment (developing (developing Inc. Pharmaceuticals OncoMed publicly cells) stem cancer targeting mAbs the (including shares common 6.3mm sold of proceeds net $10 for at overallotment) the money use will The company $59.4mm. including needs, corporate general fund to the company’s of development and research (glucocorticoid-induced GITRL-Fc preclinical - pro related receptor factor necrosis tumor IND filing program; immuno-oncology tein) (Aug.) 2017. 2016 or early late for planned is Securities JMP Banks/Advisors: Investment - con inflammatory for (therapies Corp. Omeros disorders, renal and bleeding, ditions, CNS, $37.6mm netted procedures) ophthalmic and 3.5mm common of sale the public through continued fund will Proceeds $11.50. at shares against mAb human a fully OMS721, of trials serine lectin-associated mannan-binding atypical for III trials in Phase is that protease-2 II for Phase and syndrome uremic hemolytic diseases. other renal and IgA nephropathy - pre towards go also will the money Some of continued and development pipeline clinical Omidria (ketorolac/ of commercialization intraoperative preventing for phenylephrine) in pain ocular post-op reducing and miosis - or intra surgery cataract undergoing patients (Aug.) replacement. lens ocular Fitzgerald Cantor Banks/Advisors: Investment & Co. Contract research organization Contract research organization Inc. Pharmaceuticals NovaBay the a two- $11.8mm through grossed product) the firm In May, placement. private tranche $1.91 at 4.08mm units selling $7.8mm raised 4.08mm sold it in August and discount), (a 9% of consists unit Each price. the same at units warrant a four-year and share one common of share one-half an additional purchase to rights totaling The warrants, stock. common $1.91 at exercisable are shares, 3.09mm to were investors Participating share. per whole Pioneer Ping Fu, Jian Mr. investors, accredited and shareholder), largest (NovaBay’s Pharma Sieczkarek. Mark CEO and president NovaBay (Aug.) agent. the placement Kington was China netted $173.6mm through the sale of 8mm 8mm of the sale through $173.6mm netted the 1.05mm- of exercise full (includes shares of (the top $23 option) at over-allotment share (Aug.) offering. public initial in its the range) Suisse Credit Banks/Advisors: Investment & Baird W. Robert Inc.; Co. & Jefferies Group; Fargo Wells Bank; Investment UBS Inc.; Co. & Co. Blair William LLC; Securities - . Inc . . orp C . Inc Holdings Inc . Inotek Pharmaceuticals Pharmaceuticals Inotek (enhanced (enhanced Corp. IntelGenx Inc . Biopharma orp Wellbutrin XL. (Aug.) ’s Wellbutrin C Health Therapeutics uticals Pharmace Therapeutics ax Genx V Mab inVentiv Intel Inotek Rx Hemisphe Heron sold $50mm in 5.75% convertible senior convertible $50mm in 5.75% sold Corp. The offering. a public through due 2021 notes develop to proceeds the use will company as and a monotherapy both as trabodenoson for latanoprost with combination a fixed-dose (Aug.) pressure. intraocular reducing LLC; & Co. Cowen Banks/Advisors: Investment Weinberg Perella Advisors; Capital Wood J. Co. & Piper Jaffray Partners; (developing (developing Inc. Holdings Therapeutics MabVax - on pro based therapies antibody monoclonal patients by generated response immune tective the company’s by been immunized who have the through $8.4mm netted vaccines) cancer (or 665k shares 1.1mm common of sale public which shares, preferred convertible F Series $4.81 per common at on a 1:1 basis) convert (CRO and services) received received services) and (CRO Inc. Health InVentiv - valu International, Advent from an investment debt- cash-free, a on $3.8bn at company the ing owner be an equal now will Advent basis. free Partners. H. Lee Thomas with company the of revenue inVentiv’s doubled has Lee H. Thomas respec $343mm, $2.2bn and EBITDA to and in 2010. private the company taking since tively will parent inVentiv’s investment, this Due to (Aug.) listing. a public be pursuing no longer America of Bank Banks/Advisors: Investment Citigroup PLC; Bank Barclays Lynch; Merrill & Sachs Goldman Group; Suisse Credit Inc.; & Co. Stanley Morgan Co.; SWK Holdings paid (controlled-release (controlled-release Inc. Therapeutics Heron - re other areas) and pain, cancer, for drugs Tang from loan term a $100mm two-year ceived interest bear will loan The LP. Partners Capital im- to be closing the first with year 8% per at be to remainder the $50mm and for mediate corporate an undefined achieving upon paid (Aug.) milestone. Ophthalmic-focused (drugs for cancer, cancer, for (drugs Inc. Biopharma Hemispherx netted diseases) infectious and immune, of offering direct $4.65mm in a registered $1.50 (22% discount at shares common 3.33mm health two from average) trading prior 10-day to common each For investors. institutional care five- a of 0.75 receive also will investors share, - is warrants 2.5mm of total a (for warrant year & Renshaw Rodman price. a $2 strike with sued) (Aug.) agent. the placement as served - & Ren Rodman Banks/Advisors: Investment Inc. Group Capital shaw - $Cd drugs) existing for formulations delivery royalties future for n8mm ($6mm) in exchange bupropion), XL (CPI300; Forfivo on IntelGenx’s - ingre the active of version an extended-release in GSKdient Investment Banks/Advisors: Canaccord Genuity Canaccord Banks/Advisors: Investment LifeSci Co.; & Laidlaw Inc.; Co. & Jefferies Inc.; Markets Capital RBC LLC; Capital

- - - - . . Multikine . Inc . Inc Inc Inc . Gemphire Therapeutics Therapeutics Gemphire Inc . ticals u Pharmace Therapeutics utical Pharmace orp (rare (rare Inc. BioPharmaceuticals Eiger C uticals BioPharmace whead Therapeutics ci -S el ate Gemphire F Eiger C BioMarin Arro Cardiovascular-focused (developing cellular cellular (developing Therapeutics Inc. Fate immune and cancer for immunotherapies of the sale through $10.3mm raised diseases) aver $1.96 (market at shares common 5.25mm Investors, Brookside Capital, Alephpoint to age) Advisers. Franklin by managed funds two and development continued fund will Proceeds and immune-oncology of pipeline Fate’s of (Aug.) candidates. immuno-regulatory In its first financing since reverse merging with In its first financing since reverse merging with Celladon, (therapies for cancer and infec and cancer for (therapies Corp. Cel-Sci tious diseases) netted $4.7mm through the the through $4.7mm netted diseases) tious common 10mm of offering direct registered - insti to discount) (a slight $0.50 at shares issued also The company investors. tutional shares another 5mm buy to warrants five-year use will Cel-Sci $0.55. of price an exercise at its of trial III Phase the for funds the advanced for injection) interleukin (leukocyte - & Ren Rodman cancer. neck and head primary (Aug.) agent. the placement was shaw - & Ren Rodman Banks/Advisors: Investment Inc. Group Capital shaw (drugs for orphan orphan for (drugs Inc. Pharmaceutical BioMarin the public through $713.7mm netted diseases) fund will Proceeds $96. at shares 7.5mm of sale the company’s of expansion and trials clinical therapy gene its for capacity manufacturing (Aug.) projects. America of Bank Banks/Advisors: Investment & Co. Sachs Goldman Lynch; Merrill netted netted Inc. Pharmaceuticals Arrowhead 7.6mm of sale the private through $43.2mm Buyers average). (market $5.90 at shares Management, OrbiMed, RA Capital included and Investments, RTW Advisors, Perceptive is The company investors. other institutional RNA interfer trigger that compounds developing disease-causing of knockdown induce and ence (Aug.) genes. & Fitzgerald Cantor Banks/Advisors: Investment LLC Capital Trout Markets; Capital Chardan Co.; . The loan bears interest at a rate of LIBOR of a rate at interest bears . The loan ences February on matures and annually 7.60% plus (Aug.) 1, 2021. diseases) netted $18.8mm through the follow- through $18.8mm netted diseases) shares common 1.25mm of offering on public the funds use will The company $16 each. at compounds, its of development ongoing for hypogly delta, hepatitis at aimed are which cemia, pulmonary arterial hypertension, and and hypertension, arterial pulmonary cemia, (Aug.) lymphedema. Inc.;Co. & Jefferies Banks/Advisors: Investment PacGrow Wedbush Inc.; & Co. Oppenheimer Sciences Life netted $27.9mm through its initial public public initial its through $27.9mm netted Inc. In each. $10 at shares common 3mm of offering 3.75mm sell to planned it said the company June (Aug.) $13. $11 and between shares company an Informa Inc., Information, Business ©2016 Informa ❚ MARKET INTELLIGENCE In Vivo LLC; Leerink Partners LLC; Wells Fargo Securi- Recro Pharma Inc. Pharma intelligence | ties LLC Recro Pharma Inc. (non-opioid pain thera- managing editor Onconova Therapeutics Inc. peutics) netted $13.9mm in a public offering of 2mm common shares priced at $7.50. The Nancy Dvorin Cancer treatment company Onconova Thera- company plans to put proceeds toward ongoing health care editor peutics Inc. netted $16mm through an clinical development and safety studies of its Ashley Yeo oversubscribed rights offering. Sharehold- NSAID meloxicam, an injectable COX-2 inhibitor ers received 1.5 subscription rights for each senior editor to treat post-surgical pain, which Recro exclu- Peter Charlish common share held; the offering resulted the sively licensed from Alkermes under a March issuance of 4.26mm units at $4.10, with each 2015 deal. Recent positive Phase III trial data senior editor, data unit consisting of one common share and 0.75 evaluating the efficacy and safety of IV meloxi- John Hodgson of a warrant. (Each whole five-year warrant is cam following both hysterectomy and bunio- editorial staff exercisable for one share at $4.92.) Some of nectomy procedures prompted Biomedtracker Jessica Merrill the proceeds will go towards an ongoing Phase to boost its likelihood of approval rating for the Sten Stovall III trial of rigosertib IV for myelodysplastic candidate to 58% (6% above average). (Aug.) Amanda Micklus, Principal Analyst syndrome after failure of a hypomethylating agent. (Aug.) Investment Banks/Advisors: Janney Montgom- contributing editors ery Scott Inc.; Piper Jaffray & Co. Deborah Erickson, Regina Paleski Investment Banks/Advisors: Maxim Group LLC Mark Ratner, Marc Wortman Sophiris Bio Inc. Palatin Technologies Inc. Sophiris Bio Inc. (therapeutics for benign pros- Palatin Technologies Inc. (receptor-specific research manager tatic hyperplasia (BPH) and prostate cancer) Steven Muntner peptide therapeutics) netted $8.7mm in a netted $24.2mm in a public offering of 6.5mm deals analysts follow-on public offering of 11.5mm Series A shares at $4. The offering also includes five- Beth Detuzzi, Deanna Kamienski units (each unit consists of one common share year warrants to purchase up to an additional Maureen Riordan and one Series H warrant to purchase 0.75 of a 4.875mm common shares at an exercise price common share; exercisable six months follow- of $4. In June 2016 the company concluded a ing issuance) at $0.675 per unit, and 2.2mm Phase IIa proof-of-concept study for its local- design supervisor Gayle Rembold Furbert Series B units (consisting of one pre-funded ized prostate cancer candidate topsalysin Series I warrant exercisable immediately to (PRX302), which demonstrated an ability to senior designer purchase one common share; expires in 10 ablate tumor cells in 50% of patients six months Janet Haniak years, and one Series H warrant), priced at following treatment. Sophiris will use the $0.665 per unit. The company will use the designers proceeds from the financing to fund a second Jean Marie Smith, Paul Wilkinson proceeds to fund its Phase III clinical trials for Phase II trial of PRX302 to confirm dosing and bremelanotide for hypoactive sexual desire optimize its targeted delivery. The candidate is disorder. (Aug.) advertising 56 also in Phase III for BPH. (Aug.) Christopher Keeling Investment Banks/Advisors: Canaccord Genu- Investment Banks/Advisors: Maxim Group LLC; ity Inc.; Roth Capital Partners corporate sales Piper Jaffray & Co. John Lucas, Elissa Langer PixarBio Corp. Zosano Pharma Corp. Alicia McNiven In a private placement, start-up PixarBio Corp. Zosano Pharma Corp. (transdermal products technology operations manager (pain and CNS disease treatments) expects with a focus on central nervous system) netted Chris Trudeau to issue accredited investors 10mm shares at $7mm in a private placement of 4.8mm common $2, with an oversubscription cap of $30mm. vp, e-strategy & development shares at $1.57 (9% premium) and warrants to Adam Gordon The company also plans to issue seven-year purchase an additional 9.6mm common shares managing director warrants to purchase up to 10mm shares at an to a select group of qualified institutional buy- Phil Jarvis exercise price of $4.50. (Aug.) ers and accredited investors. The warrants will Protagonist Therapeutics Inc. be both Series A (strike price of $1.45; expire in twelve months and one week) and Series B Protagonist Therapeutics Inc. (developing (exercise price of $1.55; expire five years from editorial office peptide-based new chemical entities (NCEs)) issuance). The company will use the proceeds 52 Vanderbilt Avenue, 11th floor netted $83.7mm in its initial public offering of to advance its lead candidate M207, a novel New York, NY 10017 7.5mm shares (up-sized from 5.8mm shares at formulation of zolmitriptan, in development to www.InVivo.PharmaMedtechBI.com filing) at $12 (midpoint of range). (Aug.) treat migraines. Guggenheim Securities was the Investment Banks/Advisors: BMO Financial customer service lead placement agent and Roth Capital served [email protected] Group; Barclays Bank PLC; Leerink Partners LLC as co-placement agent. (Aug.) Provectus Biopharmaceuticals Inc. Investment Banks/Advisors: Guggenheim Provectus Biopharmaceuticals Inc. (ethical Partners LLC; Roth Capital Partners. In Vivo: The Business & Medicine Report pharmaceuticals for oncology and dermatol- [ISSN 2160-9861] is published monthly, except for the ogy) netted $5.5mm in a best efforts follow-on combined July/August issue, by Informa Business public offering of 240k Series B convertible Intelligence, Inc., 52 Vanderbilt Avenue, 11th floor, New York, NY 10017. Tel: 888-670-8900(US); +1-908-547- preferred shares (representing 24mm common 2200 (outside US); Fax: 646-666-9878. shares; convertible into common at $0.25 per share) and five-year warrants to purchase an Subscriptions cost $2,630 (online and print) per year. additional 24mm common shares, at a com- Office of publication, The Sheridan Group, 66 Peter Parley Row, Berlin, CT 06037. Postmaster: Send bined price of $25. The warrants are priced at address changes to Informa Business Intelligence, 52 $0.275 per common share. The company will Vanderbilt Avenue, 11th floor, New York, NY 10017. use the offering proceeds for clinical develop- © 2016 by Informa Business Intelligence, Inc., an Informa ment of its candidates including PV10 (cancer) company. and PH10 (minimally invasive treatment of All rights reserved. chronic sever skin afflictions including psoriasis and atopic dermatitis). (Aug.) No part of this publication may be reproduced in any form or incorporated into any information retrieval system without the Investment Banks/Advisors: Maxim Group LLC written permission of the copyright owner.

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