REIGN IN SPAIN CAPITAL FLOW DEALMAKING COUNTRY’S BIOTECH RISE CROSS-BORDER REVIEW LATEST M&A TRENDS

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AUGUST 2018 COMMERCIAL INSIGHTS FOR THE C-SUITE VOLUME 38, NUMBER 8

EMERGINGNew BIOPHARMA Frontiers Hubs Reshaping Innovation in Northeast

Nancy Thornberry, CEO of NYC-based Kallyope, a biotech startup focused on the gut-brain axis. hZ'Edʹ&zϮϬϭ!'h&&ĞĞƐ:ƵƐƚ ŶŶŽƵŶĐĞĚ"""/ŶĐƌĞĂƐĞĚďLJϭϳй

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/ŶƚŚĞĞdžĂŵƉůĞĂďŽǀĞƚŚĞĐĂƌŽǁŶĞƌŝƐĂŶEƐƉŽŶƐŽƌĂŶĚƚŚĞƉĂƌŬŝŶŐůŽƚŽǁŶĞƌŝƐEZĞƉŽƐŝƚŽƌLJ$>> /ŶĞdžĐŚĂŶŐĞĨŽƌŝƚƐƐĞƌǀŝĐĞƐEZĞƉŽƐŝƚŽƌLJ$>>ĐŚĂƌŐĞƐĂŶEƐƉŽŶƐŽƌĂŶĂŶŶƵĂůĨĞĞǁŚŝĐŚŝƐƐŝŐŶŝĮĐĂŶƚůLJ ůĞƐƐƚŚĂŶƚŚĞE,ŽůĚĞƌ&ĞĞƚŚĞEƐƉŽŶƐŽƌǁŽƵůĚŽƚŚĞƌǁŝƐĞƉĂLJĂƐĂƐŵĂůůŽƌŵĞĚŝƵŵƐŝnjĞĮƌŵ dŚĞƌĞŝƐEKŶĞĞĚƚŽƉĂLJĞdžĐĞƐƐŝǀĞĨĞĞƐŽƌďĞĨŽƌĐĞĚƚŽǁŝƚŚĚƌĂǁLJŽƵƌǀĂůƵĞĚĂƐƐĞƚƐ ĚƵĞƚŽƐŚŽƌƚƚĞƌŵŵĂƌŬĞƚĐŽŶĚŝƟŽŶƐ$ĐĂƉĂĐŝƚLJĐŽŶƐƚƌĂŝŶƚƐ$W/ƐƵƉƉůŝĞƌŝƐƐƵĞƐ$ĞƚĐ%' ůƚĞƌŶĂƟǀĞůLJ ŝĨLJŽƵƌĐŚŽŝĐĞŝƐƚŽt/d,ZtƚŚĞE ǁĞŵĂLJďĞŝŶƚĞƌĞƐƚĞĚŝŶƉƵƌĐŚĂƐŝŶŐŝƚĨƌŽŵLJŽƵ

dŚĞ&zϮϬϭ'h&'ĞŶĞƌŝĐƌƵŐƉƉůŝĐĂŶƚWƌŽŐƌĂŵ&ĞĞ ŝƐĚƵĞKĐƚŽďĞƌϭƐƚƐŽƉůĞĂƐĞĐŽŶƚĂĐƚƵƐƐŽŽŶ'

WŚŽŶĞ(нϭϱϳϬϮϲϭϭϬϭŵĂŝů(ŝŶĨŽΛĂŶĚĂƌĞƉŽƐŝƚŽƌLJ%ĐŽŵ AUGUST 2018 PHARMACEUTICAL EXECUTIVE From the Editor 3 WWW.PHARMEXEC.COM From Science to Success

UPON “FINALLY” COMPLETING MY ARTICLES FOR THIS ISSUE, I happened upon Matthew Herper’s recent interview on Forbes, http://bit.ly/2mGnE6n. Featured was newly-named chief scientifi c offi cer for GSK, Hal Barron, with hiring insights from GSK CEO Emma Walmsley. The article is great, so you must read it, but here are some of Barron’s highlights: he worked at Genentech since 1996, has overseen the development of 10 approved drugs, uses a very singular management approach, is focusing on immunotherapy, and believes in genetic data for drug development. Not surprisingly, Barron announced last month a $300 million investment in 23andMe in a four-year collaboration to use the genetic database in drug development.

i l l a long-time biotech professional Another trend is the location of big phar- LISA HENDERSON Editor-in-Chief be able to impact GSK’s pipeline and ma innovation centers in Cambridge. Novartis, [email protected] make the disciplined decisions that Bayer, and Sanofi are included in our article, Follow Lisa on Twitter: will generate greater sales toward the and each has a leader rich with a research back- W @trialsonline company’s overall bottom line? Most in the arti- ground and strategic focus to collaborate with cle believe he can do just that. innovators in the region. But as rewarding as What evolved from our loosely termed science is, it can become less so if the goal of “Emerging Biopharma” issue became a look at reaching patients with drug solutions is not met. what turns a biotech into a biopharma, what You will read in these articles a similar factors can help transform scientifi c innovation thread—science needs to start with the patient into commercial success, and what tracks bio- and the success of a compound depends on the tech takes in its drug journey. Clearly, Barron’s science, trial design, endpoints, and then clinical path represents the now-classic example of small and regulatory execution. Commercial success biotech growing to the role of larger biopharma. However, what is a biotech, biopharma, and large pharma have blurred. The former delin- We’ve heard the term eation of biotech/big molecule, pharma/small fail-fast for years, but molecule don’t hold true anymore, as much of large pharma is on-board with biologics and maybe the term other cutting-edge therapies. And with more former big pharma professionals bringing their succeed-succinctly would commercial insights and business acumen into biotech, and biotech executives bringing their be more empowering nimble and focused decision-making to pharma, even organizational descriptions begin to blur. comes after and is closely matched to product As we detail in our coverage (starting on page differentiation from other drugs on the market. 14), certain geographical regions are betting big It appears that the emerging biopharma is a to become the next biotech innovation hub a la biotech that puts equal efforts into the commer- Boston. We look at Philadelphia, New York City, cial pivot, the step that separates pure science from and New Jersey and Barcelona, Spain, as a vi- crass commercialism. A separation of church and brant European example. In November, we plan state, if you will. As one executive said, “I went to to focus on the Southeast and the West Coast the dark side and came back,” but he came back and Midwest early next year. with patient insights from the commercial side to The editors are also aware of the many other help inform scientists and make those decisions states and regions in the US that are investing to move forward or not. heavily in life sciences and innovation. Some I have heard that it can be very diffi cult for a clearly have been doing it for quite some time, scientist or medical director to “let go” of a ques- based on the academic research centers and uni- tionable compound, and the reason why some versities in their area. But there are similarities Phase III trials fail is that one person is pushing and characteristics in the areas we initially se- it against all odds. We’ve heard the term fail-fast lected to compare to determine their future po- for years, but maybe the term succeed-succinctly tential and ability to rise to the fi rst tier. would be more empowering. 4 WWW.PHARMEXEC.COM PHARMACEUTICAL EXECUTIVE AUGUST 2018

VOLUME 38, NUMBER 8

Pharmaceutical Executive’s 2018 Editorial Advisory Board is a distinguished group of thought leaders with expertise in various facets of pharmaceutical research, business, strategy, and marketing. EAB members suggest feature subjects relevant to the industry, review article manuscripts, participate in and help sponsor events, and answer questions from staff as they arise.

MURRAY L. AITKEN STEVE GIRLING CHANDRA RAMANATHAN Senior Vice President, President, Head, East Coast Innovation Center, Healthcare Insight, IPSOS Healthcare North America Bayer U.S. QuintilesIMS ADELE GULFO AL REICHEG INDRANIL BAGCHI, PhD Chief of Commercial Development, CEO, Senior Vice President and Head, ROIVANT Sciences Sea Change Healthcare Global Value Access, Novartis NICOLE HEBBERT Senior Vice President, BARBARA RYAN MICHELLE BARON, MD Head of Patient Services, Founder, Vice President, Clinical Research, UBC Barbara Ryan Advisors Chief Medical Offi cer, Intarcia Therapeutics MICHELE HOLCOMB SANJIV SHARMA Head, Strategy & Corporate Development, Vice President, FREDERIC BOUCHESEICHE Cardinal Health North America Commercial Operations, Chief Operating Offi cer, HLS Therapeutics Focus Reports Ltd. BOB JANSEN Principal Partner, TERESE WALDRON LES FUNTLEYDER Zensights LLC Director, Executive MBA Programs, Portfolio Manager, St. Joseph’s University Esquared Asset Management KENNETH KAITIN Director & Professor, PETER YOUNG JOHN FUREY Center for the Study of Drug Development, President, Chief Operating Offi cer, Tufts University Young & Partners Spark Therapeutics CARRIE LIASKOS JAMES J. GALEOTA, JR. (JAY) Vice President, President and Chief Operating Offi cer, Market Engagement, G&W Laboratories Syneos Health

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©2018 UBM. All rights reserved. No part of this publication may be UBM Americas to make your contact information available to third reproduced or transmitted in any form or by any means, electronic parties for marketing purposes, simply call toll-free 866-529-2922 or mechanical including by photocopy, recording, or information between the hours of 7:30 a.m. and 5 p.m. CST and a customer storage and retrieval, without permission in writing from the publisher. service representative will assist you in removing your name from UBM Authorization to photocopy items for internal/educational or personal use, Americas’ lists. Outside the U.S., please phone 218-740-6477. or the internal/educational or personal use of specifi c clients is granted by UBM for libraries and other users registered with the Copyright Clearance Pharmaceutical Executive does not verify any claims or other informa- Center, 222 Rosewood Dr. Danvers, MA 01923, 978-750-8400 fax tion appearing in any of the advertisements contained in the publica- 978-646-8700 or visit http://www.copyright.com online. For uses beyond tion, and cannot take responsibility for any losses or other damages those listed above, please direct your written request to Permission Dept. incurred by readers in reliance of such content. 2011 NEAL AWARD fax 732-647-1104 or email: [email protected]. WINNER FOR Pharmaceutical Executive welcomes unsolicited articles, manuscripts, “BEST COMMENTARY” UBM Americas provides certain customer contact data (such as photographs, illustrations, and other materials, but cannot be held customers’ names, addresses, phone numbers, and e-mail addresses) responsible for their safekeeping or return. to third parties who wish to promote relevant products, services, and To subscribe, call toll-free 888-527-7008. Outside the U.S. call 218- other opportunities that may be of interest to you. If you do not want 740-6477. AUGUST 2018 PHARMACEUTICAL EXECUTIVE Table of Contents 5 WWW.PHARMEXEC.COM

Innovation, Location, and Inspiration Lisa Henderson, Editor-in-Chief Examining the rise and reach of biopharma in the key Northeast Corridor clusters of Boston, Philadelphia, and New Jersey. 18

Reigning in Spain Julian Upton, European and Online Editor Over the last decade, Spain has seen a signifi cant growth in venture-capital investment in the life sciences. We explore the driving forces. Emerging Biopharma: 23 New Frontiers The Commercial Pivot The Big Apple’s Fresh Start in Biotech Lisa Henderson, Editor-in-Chief With increasing responsibilities and decision- Michelle Maskaly, Senior Editor making post-discovery, the traditional label of Though challenges in space and affordability remain, New York City is emerging as a hotspot for biotech “biotech” is changing. incubators, including one unique startup based in the city’s fast-growing innovation center, whose CEO, 27 like many C-suite veterans, made the career leap from the big pharma world to forging new discoveries in medical science. 14 Innovation Hubs: At a Glance Cover Photo/Illustration, John Halpern: Nancy Thornberry, CEO of biotech Kallyope, sits in the offi ces of Christen Harm, Associate Editor Alexandria LaunchLabs, a full-service startup platform in the Alexandria Center for Life Science in Manhattan. The photo is enhanced using Photoshop to include the actual NYC skyline from Kallyope’s offi ces. 22

Globalization Dealmaking Cross-Border Funding Review The Pulse of Biopharma M&A By James Leech Michele Maskaly, Senior Editor Record capital fl ows across global public and private markets has opened up New trends report spotlights the promise and cautions for prospective life new channels of investment in early-stage and novel science. sciences dealmakers. 30 33

NEWS & ANALYSIS INSIGHTS Washington Report From the Editor Back Page 8 Congress, Feds, FDA Take 3 From Science to Success 50 Traditional Scientifi c Action in Opioid Crisis Lisa Henderson, Editor-in-Chief Search is Broken Jill Wechsler, Washington Correspondent By Jane Z. Reed

Country Report: Portugal Global Report 34 10 Tough Fight Looms in Turning the Page Focus Reports, Sponsored Supplement Preserving R&D Incentives Refl ector, Brussels Correspondent Behind an economic revival in Portugal, including healthcare spending growth, the nation’s life sciences sector is benefi ting as well, with Portugal diverging from the European averages to show an increase in R&D and innovation.

PHARMACEUTICAL EXECUTIVE VOLUME 38, NUMBER 8 (Print ISSN 0279-6570, Digital ISSN: 2150-735X) is published monthly by UBM LLC 131 W. First St., Duluth, MN 55802-2065. Subscription rates: $70 (1 year), $125 (2 years) in the United States and Possessions; $90 (1 year), $145 (2 years) in Canada and Mexico; $135 (1 year), $249 (2 years) in all other countries. Price includes air-expedited service. Single copies (prepaid only): $7 in the United States, $9 in all other countries. Back issues, if available, are $20 for the United States and Possessions, $25 for all other countries. Include $6.50 per order plus $2 per additional copy for US postage and handling. If shipping outside the United States, include an additional $10 per order plus $3 per additional copy. Periodicals postage paid at Duluth, MN 55806 and additional mailing offi ces. POSTMASTER: Please send address changes to PHARMACEUTICAL EXECUTIVE, PO Box 6180, Duluth, MN 55806-6180. Canadian G.S.T. Number: r-12421 3133rt001, Publications mail agreements NO. 40612608. Return Undeliverable Canadian Addresses to: IMEX Global Solutions, P. O. Box 25542, London, ON N6C 6B2, Canada. Printed in the USA. 6 this month on PharmExec.com PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM Join The Conversation! @PharmExec bit.ly/2BoZp1X Pharm Exec Connect https://is.gd/CZFGVB @pharmexecutive Top Stories Online Pharm Exec Webcasts

On-Demand A Framework for Successful Biopharma Product Launches bit.ly/2yR1Tts Evolving Life Sciences Quality Management bit.ly/2N9dpUr 2018 Pharm Exec 50 June issue online Combination Therapies Michael Christel bit.ly/2yOuPSQ & Oncology Landscape bit.ly/2JcY3Pf Patient Engagement Pfi zer’s Restructure: in Clinical Trials Does it Make Sense? bit.ly/2FjjZSW Blog post Edward Pratesi bit.ly/2uI9eXK

Readers Weigh In Keep in Touch! Scan here with your smartphone to sign up for It has been shown in a number of cases that weekly newsletters pharmacists who advise patients appropriately have a strong, positive impact on adherence. It would behoove the industry to partner with pharmacy to Top 10 Industry promote adherence and appropriately compensate Trends to Watch pharmacists for their effort. As shown in the article, Blog post Archbow Consulting this will have a positive payoff for the companies, for bit.ly/2APV9rt the pharmacists, and the patients they all serve. Michael A. Schwartz Coming soon to “Adherence: Addressing Pharma’s Last-Mile Problem” bit.ly/2xPHbK6 PharmExec.com 2017 Emerging Pharma Leaders October issue online Pharm Exec staff bit.ly/2ij0qRo I think expecting a response from EMA is to misunderstand the situation. It isn’t up to EMA, which must simply follow the rules set for it by EU Generic Company legislation, just as the industry in the UK will have Defense Strategies to follow the rules set for it by the UK government Blog post Josh Reisberg and the UK regulator, whoever that may be. If the UK Specialty Pharma bit.ly/2Lzh6EX wants to work with and within EMA after Brexit, it is Pharm Exec examines the key up to the UK to negotiate that with the 27 [remaining topics in the surging specialty pharma market, including member states] and the Commission. drug distribution, patient Anonymous perspectives, technology, and Most-read stories online: “EMA Relocation Countdown: Some Industry Viewpoints” the challenges of marketing June 25, 2018, to July 24, 2018 bit.ly/2uQ2nf6 specialty therapies. AUGUST 2018 PHARMACEUTICAL EXECUTIVE this month on PharmExec.com 7 WWW.PHARMEXEC.COM Get More From Pharm Exec The Pharmaceutical Executive Podcast!

Hosts, Senior Editor Michelle Maskaly and Episode 11: Tackling Sports Associate Editor Christen Harm, take listeners and Science beyond the pages of Pharm Exec to gain a deeper Former NFL star and current understanding of the real issues facing broadcaster, Solomon Wilcots, biopharma today—interviewing prominent talks to Pharm Exec about the industry leaders, as well as providing a behind-the-scenes look at what intersection of sports and the editors at Pharm Exec are working on. biopharma, including his work in The Pharm Exec Podcasts are available on all your favorite listening matching pro athletes who are passionate about a certain disease with biopharma organizations. bit.ly/2yRP6Hv tools such as iTunes, SoundCloud, Google Play, Stitcher, and Overcast. Here’s a peek at our recent podcasts, with links to listen! Episode 10: Mentorship vs. Sponsorship Episode 13: Helming a Clinical-Stage Startup Michelle and Christen host one of Pharm Exec’s Emerging Pharma Jeffrey Nau, CEO of Oyster Point Pharma, talks about what it’s like Leaders, Sabina Ewing, vice president of business technology for Pfi zer, working on diseases that don’t get a lot of press, and offers up best who discusses the difference and importance of mentoring and bit.ly/2uOA6EH practices in raising startup capital. sponsoring in business and pharma. bit.ly/2IAoiLf

Episode 12: Journey in Regenerative Medicine Gil Van Bokkelen, CEO and co-founder of Athersys, a regenerative Episode 9: Brands of the Year medicine company, discusses the decision to start the fi rm in Ohio Michelle and Christen host the Pharm Exec editorial team to discuss instead of his native Northern California, and shares the secret to our selections of Brands of the Year and why we chose to highlight staying resilient in the C-suite amid heavy challenges. bit.ly/2NxrACH these particular products. bit.ly/2ILwFZe

“You’ve got to understand the investor universe.”

— TIM SULLIVAN, EPISODE 8: CFO INSIGHTS FROM THE FIELD

listen & subscribe: pharmexec.com/pharmexecpodcast 8 Washington Report PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

shopping sites, shipping fi rms, Congress, Feds, FDA Take payment processors, and trade associations representing online pharmacies and internet opera- Action in Opioid Crisis tors. While the tech community maintains that online sales ac- Recent bipartisan efforts look to expand access for addiction count for only a small portion of treatment and stem inappropriate drug prescribing illegal drug transactions, FDA Commissioner Scott Gottlieb called for concerted action: “We he House recently en- oid-related activities, with more can’t just play whack-a-mole acted multiple legislative than 70 doctors and other with illegal sites, shutting down proposals to support health professionals facing URLs only to watch new ones T treatment of opioid abus- charges related to “fanning the pop up.” Cutting off the fl ow of ers and deter inappropriate drug fl ames of the opioid crisis.” illicit internet traffi c in opioids prescribing and illegal distri- “is critical,” he said, urging at- bution. This bipartisan action Shutting down websites tendees to work together to stop sets the stage for similar action As part of ongoing FDA efforts the “digital drug dealers.” by the Senate, as the legislators to reduce illegal opioid prescrib- FDA has increased resources seek to address the deadly drug ing and distribution, the agency to target and take action against epidemic before the November seeks to curb the rise in opioid illicit internet drug marketers, midterm elections (see https:// sales through online pharmacies. despite multiple challenges in bit.ly/2L7Tzuo). A main objec- In June, FDA sent warning let- doing so. For example, progress tive of these policies is to widen ters to operators of 53 websites in educating health professionals access to medications for ad- to halt illegal sales of unap- on the importance of reducing diction treatment and overdose proved, misbranded, and dan- prescribing of opioids in favor of emergencies, a strategy backed gerous medicines such as Trama- less addictive pain medicines by pharma manufacturers of bu- dol and oxycodone, or face now is predicted to send even prenorphine and newer rescue product seizures or injunctions more individuals suffering from drugs and opioid disorder thera- (see https://bit.ly/2JsQi81). opioid addiction to websites and pies. The legislation also encour- FDA also hosted an “opioids other sources of illegal and po- ages prescribing of non-opioid summit” to discuss with lead- tentially unsafe pills. pain therapies, but stops short ing internet operators and oth- Gottlieb acknowledged that of mandating prescriber educa- er stakeholders ways to reduce the tech fi rms at the summit have tion on pain management—or the availability of opioids “the expertise to transform this of regulating drug prices. through misleading websites space.” He cited efforts by Goo- Meanwhile, the Justice De- and search engines (see https:// gle to de-index web pages linked partment brought charges bit.ly/2JpROUE). The agency to FDA warning letters, by Mi- against dozens of individuals cited a January 2018 report crosoft’s Bing to attach pop-up involved in prescribing and dis- from the Senate Permanent warnings to such illicit websites, tributing opioids and illegal nar- Subcommittee on Investigation and by Facebook to steer parties cotics as part of a massive indicating that online illicit seeking opioids online to sites healthcare fraud enforcement drug sales reached more than with information on addiction action across the country (see $150 million in 2015, as use of treatment. While there are diffi - https://bit.ly/2KV4tjZ). Al- the internet to purchase opioids culties associated with imple- JILL WECHSLER is though most of the 600 defen- from online pharmacies has menting these and other strate- Pharmaceutical dants face charges related to soared (see https://bit.ly/2uO- gies, Gottlieb urged further Executive’s Washington schemes to bilk Medicare, Med- SiSb). collaboration with the internet Correspondent. She icaid and other government FDA invited leading tech experts to devise technological can be reached at health programs of some $2 companies to the summit, such solutions and collective ap- jillwechsler7@gmail. billion in fraudulent claims, the as Facebook, Google, Microsoft proaches for decreasing opioid com campaign also targeted opi- and Yahoo, as well as online availability. AUGUST 2018 PHARMACEUTICAL EXECUTIVE Washington Report 9 WWW.PHARMEXEC.COM

FDA Clears Pathway for Off-Label Economic The broader aim is to help “sophisticated Communications parties” with expertise in evaluating such fter years of debate and A discussion, FDA has fi nal- data to assess value-based contracts and ized a more fl exible policy for how biopharmaceutical com- innovative reimbursement strategies panies may discuss payments, outcomes, and healthcare eco- strategies, with payments based payers must be truthful and nomic data with payers, formu- on expected outcomes and health non-misleading and be presented lary committees, and other au- improvements. in an “open, responsible” manner, diences with expertise in drug The guidance on “Drug and with background and contextual prescribing and coverage. By Device Manufacturer Communi- information that supports in- clarifying a safe harbor for such cations with Payers, Formulary formed decision-making. communications, the policy is Committees, and Similar Enti- FDA further extends the policy expected to encourage spon- ties,” announced in June, provides to manufacturers of both drugs sors to conduct more studies advice to marketers through a and medical devices and permits that assess economic benefi ts question-and-answer format that providing information to payers of treatments, such as gains in outlines a broad range of effective- on unapproved products and un- quality-adjusted life years (QA- ness, safety, and cost-effectiveness approved uses of cleared products LYs) and reduced hospital stays information that marketers may to support coverage decisions re- and other procedures. provide to entities involved in for- lated to new therapies and to ad- The broader expectation is mulary management and coverage ditional new uses. The broader that such studies and communi- decisions (see: https://bit.ly/2tc- aim is to help “sophisticated par- cations will provide data that S7iJ). FDA Commissioner Scott ties” with expertise in evaluating support efforts by marketers to Gottlieb acknowledged in an- such data to assess value-based propose alternative, value-based nouncing the revised document contracts and innovative reim- contracts and reimbursement that any information provided to bursement strategies.

Combating drug shortages urged FDA needs a more concerted effort to address nationwide shortages of intravenous drugs that put patients at risk and threaten public health, according to a group of leading Senators ranging from Republican Orrin Hatch to Democrat Bernie Sanders. They and their colleagues have expressed dismay about limited supplies of critical, widely used injectable opioids, anesthetics, and sterile IV fl uids that continue for months and years. Legislators requested FDA Commissioner Scott Gottlieb convene an authorized Drug Shortage Task Force and develop recommendations by the end of 2019 to ensure that “appropriate supplies of essential medications are always available.” Evidently, these policymakers believe that FDA can do more to prevent shortages than is indicated in the agency’s annual report to Congress on drug shortages for 2017, or that Gottlieb spelled out in a statement issued in May (see: https://bit.ly/2J67htx). The annual report indicates that ongoing drug shortages continued to decline from a high in 2012, but that new shortages rose last year, largely due to a devastating hurricane season that ravaged drug production in Puerto Rico, plus the shutdown of a major manufacturer experiencing production diffi culties. Douglas Throckmorton, deputy director of the Center for Drug Evaluation and Research (CDER), responded to the Senate request with specifi cs on what FDA was doing to address shortages in IV fl uids, pain medications, and EpiPen self-injectibles that raise particular concerns from health professionals (see: https://bit.ly/2yw0gkG). Throckmorton provided specifi cs on how hurricane damage in Puerto Rico shut down Baxter Healthcare production of saline and dextrose-based fl uids widely used to deliver medications intravenously. 10 Global Report PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

incentives for pharma that offer Tough Fight Looms in extended protection in return for research—including the or- phan drugs scheme and the pe- Preserving R&D Incentives diatric medicines scheme—are also going to become arenas for European drug innovators ready their defense as the Commission the fi ght. mulls manufacturing waiver for generic competitors Reaping value? New heat has been brought to this battlefi eld by the publication esearch-based compa- that was preventing our compa- of an EU-commissioned study nies in Europe look as nies from competing on equal that aims at assessing the value though they have lost terms on global markets where for money of these incentive R one battle on preserving competition is fi erce.” And Elz- schemes. This has provided some incentives for innovation—but bieta Bienkowska, the commis- support to the research-based the bigger war is only now really sioner responsible for industry, industry, but not necessarily getting underway. predicted a positive impact on enough for it to escape un- After lengthy refl ection, the growth and up to 25,000 new scathed. Across nearly 400 pag- European Commission decided jobs in the EU, as well as $1 bil- es, the study analyses the opera- recently that it is time to ease lion net additional sales per year. tion of the fi ve main schemes back on the protection that the But it was greeted with howls that were designed to boost EU supplementary protection certif- of anguish from the European re- medicines research, and at- icate (SPC) offers to innovators. search-based industry, accompa- tempts to reach conclusions as to It is proposing a Bolar-style nied by warnings that innovative whether they are really leading waiver for Europe that would companies might choose to move to more and better medicines, or allow generic competitors to abroad. It described the plan as an merely preventing erosion of manufacture stocks even before attack on intellectual property drug industry profi ts by delaying the SPC expires on an original rights and a threat to advances in the entry of generic competition. product they wish to copy. therapy. “It also sends a global The good news for the drug This so-called manufacturing signal that Europe is weakening industry as it readies itself to de- waiver will simplify life for Eu- its commitment to IP,” the re- fend its incentives is the fi nding ropean copy-product fi rms by search lobby added, putting at in the study that the average to- allowing them to start producing “serious risk” investment, jobs, tal protection from patents and a generic or biosimilar for export and European growth. additional measures declined to non-European Union (EU) Since then, however, the from 15 years to 13 years be- markets where this type of pro- group has relaxed a little its tween 1996 and 2016—partly tection does not exist. It goes a view of this element in the IP owing to increased regulatory long way to answering the per- campaign. A key fi gure in the requirements, and to the de- sistent protests from European research-based sector, Stefan mands of more complex and, generic fi rms that they lose out Oschmann, CEO of Merck consequently, lengthier research in important export markets to KGaA, Darmstadt, Germany, and development. manufacturers based outside the admitted in early July that it Its case for maintaining these EU, and which are not restrained was time to move on from this schemes is bolstered by the fi nd- by the EU SPC. particular setback. He is doubt- ing that average development Senior EU offi cials justifi ed less keeping his power dry for time—from fi rst patent fi ling to the move as a pragmatic re- the much bigger confl icts that fi rst EU marketing authoriza- REFLECTOR is sponse to an evident challenge. will be fought over the coming tion—has increased from 10 Pharmaceutical Commission Vice President Jyrki year, and that will raise issues years to 15 years. The study Executive’s Katainen called it “a well-cali- about the substance of the SPC, says, helpfully, that the accom- correspondent in brated adjustment to the current rather than just a detail about a panying higher risk profi le of Brussels regime to remove a legal barrier manufacturing waiver. Related investments “requires a higher AUGUST 2018 PHARMACEUTICAL EXECUTIVE Global Report 11 WWW.PHARMEXEC.COM

expected revenue and profi t.” It assortment of different interests, theme. Earlier this year health is, therefore, not uncommon that and by the EU Council, where ministers were invited by the there are some “very profi table national ministers meet. And chair of the Health Council to single medicinal products” to going by many of their recent discuss questions such as “How cover the investments that fail to pronouncements, there is no un- can member states make sure secure a marketed product in the qualifi ed admiration for the in- that health comes fi rst before end, the study adds. “A fi rst con- dustry in these institutions. commercial interests?” or “Eu- clusion is that the incentives and The parliament’s views on in- ropean pharmaceutical industry, rewards provide the additional centives can be gauged from its committed to health?” protection that they were de- own resolution on access to med- signed to do,” it says. icines, which carries, up front, Agendas uncertain But in assessing the implica- the statement that “the entry of To complicate matters still fur- tions of the additional protection generics onto the market is an ther, the composition of both the when product availability and important mechanism for in- European Commission and the accessibility are taken into ac- count, the results are more mixed, and the evidence is “am- EU law is made by the European Parliament and the biguous.” So, the study ducks out of giving any fi rm advice. “It EU Council. And going by many of their recent is not within the scope of this study to advise on the ‘right’ bal- pronouncements, there is no unqualifi ed admiration ance between innovation and lower prices of medicinal prod- for the industry in these institutions ucts through faster availability of generics; it is ultimately a po- litical decision,” it says. creasing competition, reducing European Parliament will be sig- prices, and ensuring the sustain- nificantly changed next year, Deciding factors ability of healthcare systems.” It which is when proposals are to That “political decision” can goes on to conclude that “the be fi nalized and decisions are to come only from the EU’s legisla- market entry of generics should be made. It is impossible at this tive process—and that is in the not be delayed and competition stage to predict with any accura- lap of the gods. The Commis- should not be distorted.” In ad- cy what the character of these sion’s stated aim is “to provide dition, it throws in the observa- institutions will be, but the like- results by 2019 to allow the next tion that “in many cases, the lihood is that in the current surge Commission to take informed prices of new medicines have in- of populism in Europe, many of decision about possible policy creased during the past few de- the successful candidates from options” in the evaluation of the cades to the point of being unaf- the election for the parliament orphan and pediatric regula- fordable to many European will be from more radical parties tions. But the ultimate decision citizens and of threatening the rather than the mainstream cen- will not be in the hands of the sustainability of national health trists, and this may well result in Commission, which, in pro- care systems.” more extreme attitudes—includ- growth mood three years ago, Within the Council, the gen- ing criticisms—of the drug in- said it was time to “consolidate esis of this review of IP lies in the dustry and its pricing. Similarly, and modernize intellectual prop- angry conclusions of health min- there is no guarantee that the erty rights as a way to stimulate isters as far back as 2016, when essentially pro-business agenda innovation and growth within they demanded an inquiry into of the current European Com- the European Union and to en- how these incentive schemes mission under Jean-Claude gage in a refl ection on ways to achieved an effective trade-off Juncker will be maintained un- improve the patent system in between innovation, availability, der new leadership. Europe… for pharmaceuticals.” and accessibility of medicines. This is a headache that indus- EU law is made by the Euro- But suspicion of the drug indus- try leaders are not going to be pean Parliament, with its wide try is a constantly-recurring cured of either easily or rapidly. sponsored

Every twist and turn in the bench-to-bedside SPEED. commercialization journey introduces increasing regulatory complexity, product-specifi c special SCALE. handling requirements, and evolving industry guidelines. With more than 300 client case studies CERTAINTY. to draw from, we’ve found three opportunities (or Navigating Channel pitfalls) that manufacturers must address in their Distribution in a New channel distribution strategy to ensure economic (and more complex) success and operational effi ciency. Biopharma World SPEED. How quickly can you get your product into your patients’ hands?

Logistics can be a matter of life or death. Choose your Channel Services partner carefully. Is your distribution strategy fl exible and fast enough to meet complex needs? If the drug is time or temperature- sensitive, you’ll need the infrastructure ready at day one. Will it still be suffi cient on day 365? More importantly, you’ll need the proven expertise to manage it.

For example, your partner should have the right relationships to ship your therapy from and to anywhere, and to do it quickly. “We have established

Danny Williams, partnerships with freight forwarders, storage facilities, Dohmen Life Science Services transportation providers, and technology players around the globe,” says Danny Williams, Chief Sales & Marketing Offi cer, Dohmen Life Science Services (DLSS). So, when a Manufacturer required eight- hour delivery of a life-saving therapy for an ultra-rare disease, DLSS customized a solution with existing, successful partnerships.

“Our critical response service provides a confi gurable Now A Water Street Healthcare Partners Company system of storage facilities, cold chain capabilities (if required), safety and security solutions, and advanced temperature monitoring via GPS. We coordinate a solution with as few handoffs as checks and balances in place to maintain standard possible to minimize errors. Today, our client’s operating procedures, training and development, therapy reaches patients within eight hours or and continuous improvement. less, 24/7, with 100% shipping accuracy. The What’s more, if your organization is called into program has saved 600 lives and counting.” question, do your partners have the regulatory expertise to course-correct compliance issues SCALE. without interruption to your business? FDA enforcement escalates quickly and requires What will happen if demand doubles immediate action. “DLSS was recruited to assist a tomorrow? client that was facing potential FDA action. They

In this industry, demand can spike exponentially did not have the manpower to meet the rigid FDA at a moment’s notice. An underprepared partner deadlines, and their vendors required coaching could cost your organization time and money. to speak directly with the FDA,” says Williams. Identify a partner with a solution that can scale “You want to make sure your partner has in-house accordingly day by day. “One of our clients won resources to stand by their work.” a large government contract that caused a constant fl ux in demand. Their product needed DLSS provides intelligent outsourcing to to be scheduled and delivered to six CDC biopharma companies. With the broadest suite locations, no matter the size of the order, date of services in the industry, DLSS has helped more received, or time constraints,” said Williams. than 600 companies simplify and strengthen their “We needed partners who could handle patient relationships, while growing their business signifi cant amounts of inventory and execute a and realizing their vision. Whether it’s navigating detailed project plan to address the government’s regulatory requirements, commercializing products, requirements for the manufacturer. In the end, or providing patient support, DLSS helps our our fl exible solution allowed them to secure the clients advance with speed, scale and certainty. contract, increasing their revenues by 40%.” For more information, visit www.dlss.com. CERTAINTY. Are you prepared for regulatory scrutiny? “Today, our client’s therapy reaches Our industry is highly regulated patients within eight hours or less, and highly punitive. “Many times, 24/7, with 100% shipping accuracy. our clients’ compliance risks stem from a complex vendor structure. The program has saved 600 lives Miscommunication and ineffi ciencies and counting. are exacerbated, and clients are ” unwittingly vulnerable,” says Williams. Partners should have the proper 14 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

/shutterstock.com Nancy Thornberry, CEO of biotech company Kallyope, poses in Alexandria LaunchLabs, a startup incubator that, like Kallyope, is housed in the Alexandria Center for Life Science in Manhattan. (Photo by John Halpern)

City on Cusp: The Big Apple’s Fresh Start in Biotech Though challenges in space and affordability remain, New York City is emerging as a hot spot for biotech incubators, including one unique startup based in the city’s fast-growing innovation center whose CEO, like many C-suite veterans, made the career leap from the pharma world to forging new discoveries in medical science

By Michelle Maskaly sory opportunities that might play to my strengths.” hen Nancy Thornberry, CEO of Kally- During her career at Merck, Thornberry initiated ope, stands in her company’s lab inside the program that resulted in the discovery of Janu- the Alexandria Center for Life Science, via and had the rare privilege of remaining involved W fl oors above the streets of Manhattan with the development, commercialization, and with an expansive view of the New York City sky- life-cycle management of the diabetes drug for the line, it is one of the last places the industry veteran last 10-plus years of her tenure there. pictured herself after she left big pharma. “I joined boards of a couple of private companies “With the continued growth in biotech, there I was excited about, and also did some advisory are an incredible number of opportunities for in- work for some early stage biotechs,” she told Pharm dividuals with deep pharma experience, including Exec. “I really enjoyed the work, but periodically operational roles, BoD, and SAB positions, and missed having more skin in the game.” consulting for both biotech and venture capital From time to time, Thornberry “checked out fi rms,” says Thornberry, who departed Merck & new opportunities,” but as she describes it, “noth- Co. in July of 2013 after 30 years at the pharma- ing really excited me.” That is, until she learned ceutical giant. “I didn’t see myself in an operation- about Kallyope, the platform biotech fi rm. al role when I left Merck, and my goal was to learn “Kallyope ticked every box for me,” recalls more about biotech in general and BoD and advi- Thornberry. “First, I was seduced by the science and AUGUST 2018 PHARMACEUTICAL EXECUTIVE Emerging Biopharma 15 WWW.PHARMEXEC.COM

tremendous potential for the com- into expertise that is needed to pany. The gut-brain axis was an advance the company and estab- untapped area of biology, and the lish partnerships.” highly sophisticated platform The pharma experience has technologies had the potential to also aided Thornberry and her reveal novel biology that could team in building a unique culture enable the discovery of fundamen- at Kallyope. “Collaboration is in tally new approaches to diseases the DNA of successful pharma- of high unmet need. Second, the ceutical companies, and this same people involved, including the mindset is needed for success in founders from Columbia Univer- biotech and to build a team that says. “It is important for academ- sity, founding scientists, and in- is second to none,” she says. ic centers and emerging compa- vestors, were among the best in But Thornberry acknowledges nies to bring individuals on board their respective fi elds and had a there are some things pharma with proven success in pharma shared vision for the company.” doesn’t prepare you for, in her and biotech as early as possible to And, last, but defi nitely not view. “Pharma provides virtually assess the opportunity and get the least, location was also a factor in no training in the business side of company off the ground.” Thornberry’s transition. biotech,” she says. “Recognizing “The company was to be based what you know and don’t know, Building a community at the Alexandria Center in NYC, and asking for help from investors Thornberry is not just at the fore- and I thought it would be advan- and my broader biotech network, front of gut-brain health, but she tageous for the company and ex- has been critical in helping me ad- is also part of building an elabo- citing to be part of the emerging vance and fi nance the company.” rate biotech ecosystem in New NYC biotech scene,” she says. Thornberry is a big believer in York City. In November of 2015, Thorn- humility and fully leveraging tal- The Alexandria Center for Life berry decided to join Kallyope, ent, both internal and external, Science is a collaborative urban just as it was launching. and working together to advance campus developed by Alexandria programs and solve problems. Real Estate Equities, Inc. One From the ground up But, with such a high rate of fail- could argue it was this building, Starting something from scratch ure in drug development practice, strategically placed on the Lower is never easy, but Thornberry used taking science out of the academ- East Side of Manhattan, known her experience at Merck to help set the foundation for this next “It’s very important for academic entrepreneurs chapter of her career, especially her experience with Januvia, and tech transfer offi ces to have a good ‘gut which, today, is Merck’s sec- ond-best-selling medicine. feeling’ for which opportunities truly have “This end-to-end experience, and exposure to other discovery translational potential, and also have a realistic and development programs [at Merck] has given me an excellent view of the value of their discoveries.” perspective on the challenges in our business and a good sense of ic world and putting it into biotech as Manhattan’s East Side Medical what ‘good’ looks like to physi- with the goal of commercializing Corridor, that helped put New cians, regulatory agencies, and it can be extremely diffi cult. York City on the biotech map. payers,” says Thornberry. “This “I think it’s very important for Joel S. Marcus, executive has been very helpful as we think academic entrepreneurs and tech chairman and founder, Alexan- about new targets in the early transfer offi ces to have a good ‘gut dria Real Estate Equities/Alexan- space. In addition, the network I feeling’ for which opportunities dria Venture Investments, developed while at Merck, both truly have translational potential, co-founded Alexandria Real Es- internally and externally, has and also have a realistic view of tate Equities as a garage startup been hugely valuable in tapping the value of their discoveries,” she with $19 million in Series A capi- 16 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

shutterstock.com/ pisaphotography tal. As it began to build out its offerings to support companies in their development of lifesaving therapies, Marcus’s group saw the life science sector’s need for stra- tegic risk capital and established Alexandria Venture Investments in 1996. Marcus views his company, which has buildings like the one in New York City all over the country, as much more than just a real-estate provider. “We are a key and integrated member of the life science indus- Aerial view of Manhattan’s Lower East Side. try,” he says. “Our mission to advance human health, overcome mium, the company has worked Developing an ecosystem global hunger, and improve the to make it as easy as possible for It takes more than a single build- quality of people’s lives has shaped those organizations within its ing to develop a sustainable life our differentiated business model, walls to grow—physically and science innovation hub. and it is the unifying basis around metaphorically. “At a basic level, hubs must which we’ve built our four strate- “Having the ability to grow combine ‘anchor’ institutions gic verticals—real estate, venture our space quickly has been criti- with capital and managerial tal- investments, thought leadership, cal, and we are in near continuous ent to create talent mobility,” Sar- and corporate responsibility.” dialog with the Alexandria Center ah Kaulfuss, manager, Deloitte When Alexandria Venture In- to anticipate and enable this ex- Consulting, told Pharm Exec. vestments was selected to con- pansion,” says Thornberry, add- “This is a high-risk industry, es- struct New York City’s fi rst life ing that Kallyope has grown from pecially at the early stages, so science campus in 2005, it took a a startup of six people to a small hubs need suffi cient talent mobil- big gamble in shifting its focus company of nearly 50 employees. ity for people to fi nd a new job if from acquiring single assets to “The Alexandria Center also has their venture fails.” pursuing an urban cluster campus an on-site vivarium, which is crit- New York City has an advan- strategy. When Alexandria Cen- ical for the research conducted at tage when it comes to attracting ter’s East Tower opened in 2010, Kallyope and other biotechs,” talent, says Thornberry. the investment group was at the notes Thornberry. “The founders of Kallyope are very early stages of New York For a C-suite leader, it’s more from Columbia University, and City’s biotech scene. than just the physical space. the desire to have them remain “Creating successful urban “Being in a place like the Alex- deeply involved with the company innovation clusters takes time,” andria Center has been particu- was a key consideration in the says Marcus. “For example, in the larly important to me as a new decision to stay in NYC,” she ex- New York City cluster, we are CEO, and because we are in plains. “Proximity to several now eight years into what is about NYC, where the biotech scene is world-class research and transla- a 20-to-25-year process to build a just starting to emerge,” says tional institutions was another world-class innovation cluster.” Thornberry. “Having access to important factor. Finally, al- Because it sees itself as more other CEOs in the center, and though I’m not sure this was fully than a real estate company and meeting others in NYC biotech appreciated at the time of launch, has expanded interests to refl ect during their networking events, NYC has a signifi cant edge over that, Alexandria Venture Invest- has been helpful in identifying other biotech hubs from a recruit- ments is very intuitive about what people, core facilities, potential ing perspective. It is a relatively its tenants will need at different partners and investors, and other untapped talent pool and there stages, and in a place like New resources that we need to tap into are outstanding scientists from York City where space is at a pre- to advance the company.” NYC and beyond who are inter- AUGUST 2018 PHARMACEUTICAL EXECUTIVE Emerging Biopharma 17 WWW.PHARMEXEC.COM

ested in living in NYC and work- talent in scientifi c discovery, but “The biotech industry in ing in biotech.” one of the biggest challenges we New York City is constantly Thornberry notes as well that see as a city is developing space evolving,” says Williams. “From the city can be attractive to expe- for that talent to be able to devel- companies working on innova- rienced drug discovery scientists op their innovations.” tive medicines like Kallyope, from the New Jersey pharma cor- The Alexandria Center for Life who is working on the gut-brain ridor who are interested in mak- Science was one of the fi rst major axis, to Lodo Therapeutics de- ing the transition from pharma to contributions to helping combat veloping drug discoveries biotech. Having incredible sci- this problem. According to Wil- through the power of nature, to ence, beautiful spaces, extensive liams, by the end of 2018, Bio- Epibone growing bones through talent, and funding is not always Labs, JLABS, and LaunchLabs tissue engineering for skeletal enough, however. A silent but crit- will all be open, creating a total of repair. We believe New York ical driving force to innovation 100,000-square-feet of wet lab City will continue to be on the hub success is economic support. “We have a tremendous eco- “Hubs need suffi cient talent mobility for system here, but it didn’t happen overnight,” said Massachusetts people to fi nd a new job if their venture fails.” Gov. Charlie Baker during a speech at the June BIO Interna- incubators in the city to help ad- cutting edge of scientifi c discov- tional Convention in Boston. “If dress this spatial issue. eries in the years to come.” you create two great research in- In December 2016, New York Thornberry shares the same stitutions and wait 200 years, City Mayor Bill de Blasio an- belief. “There is clearly good mo- good things happen.” nounced a $500 million initiative, mentum in building a biotech Although his humorous re- LifeSci NYC, with the goal to spur presence in NYC,” she says. mark resulted in loud eruption of an estimated 16,000 new, “Space has historically been a sig- belly laughs from the thousands good-paying jobs, and establish nifi cant barrier, but the commit- in attendance, Baker followed it New York City as a global leader ment of the state and local gov- up with a laundry list of public in life science research and inno- ernments to this issue is clear, and and private investments the gov- vation. Through a portfolio of 10 I’m optimistic that affordable ernment has made over a number initiatives, LifeSci NYC is expect- space will be available for new of years to make Boston and the ed to generate a critical mass of companies going forward. Access state a premier innovation hub for activity by enabling the organic to C-suite talent has been high- biopharma. growth of top-tier R&D compa- lighted as another issue; however, Massachusetts’s success was nies and attracting established I believe there is a relatively large not lost on leaders in New York R&D organizations that can ac- pool of biotech CEOs and CSOs City, who knew they had a dou- celerate a cycle of growth for who could be recruited to NYC ble-edged sword when it came to NYC’s life sciences industry. for the right opportunity, and to- the life sciences. And with continual funding of gether with the proximity to “Through in-depth research the ecosystem, the hope is that it pharma talent, this challenge can and interviews with stakeholders, will expand and grow. The city be addressed. we determined that many young, committed $10 million toward “NYC has a substantial edge promising life sciences companies developing affordable wet lab in- over other biotech hubs in recruit- eventually leave the city and move cubator space, with the fi rst $5 ing scientists for their new compa- elsewhere primarily because of million grant awarded to Bio- nies. What remains is for the ven- the diffi culties associated with Labs@NYULangone in 2017. Lo- ture investor community to fi nding affordable, suitable space cated in SoHo, it will open its continue to work with local entre- for long-term expansion,” says doors later this year. Additionally, preneurs and academic tech trans- MICHELLE MASKALY is Shavone Williams, assistant vice JLABS @ NYC, also located in fer offices to identify exciting Pharm Exec’s Senior Ed- president, public affairs for the SoHo, opened its facility in June translational opportunities to at- itor. She can be reached NYC Economic Development and received $17 million in fund- tract key talent and money and at michelle.maskaly@ Corporation. “New York has al- ing from New York State’s Life fuel continued growth in biotech ubm.com and on Twitter ways had an incredible pool of Sciences Initiative. in NYC.” at @mmaskaly 18 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

Innovation, Location, and Inspiration Examining the rise and reach of biopharma in the Northeast Corridor

By Lisa Henderson traditional pharma presence, has ues to be an amazing magnet for hat does biopharmaceu- seen a revolving door of leavers talent, companies, and serial en- tical innovation look like replaced with comers bringing trepreneurs; success breeding W in the Northeast Corri- new biopharmaceutical life back success.” dor? For regions such as Boston, to the state. Lonnie Moulder, CEO of on- New York, Philadelphia, and cology-focused biotech Tesaro, New Jersey, the unique history, Boston located in the Boston suburb of culture, academia, science, and Kevin Slatkavitz, president and Waltham, chose Boston to start money all play their part in the founder of Boston-based consult- the company in corridor’s biopharma evolution. ing company ThinkQuality, 2010. Moulder During the interviews con- LLC, and member of MassBio, says the decision ducted for this article, it was re- says of understanding the roots to locate in the marked more than once that “bio- of the current Boston and grow- city was easy; he technology” isn’t what the ing Massachussetts biotech scene: had already company is anymore; it is the “It has very much been the per- been in Lexing- business model—what it is before fect storm recently in terms of ton, MA, with Lonnie Moulder it pivots to commercialization (see having all the right elements. another company, but says, “We article on page 27). While the his- Typically, you’d follow the sci- chose Boston for the support and tory of pharma and biotech are ence. But research universities the talent. For our compelling separate paths, with the known like Harvard, the Massachusetts business strategy, we needed ac- delineation of small molecule vs. Institute of Technology (MIT), cess to the talent.” biologic, those lines are quickly and Tufts have been around for- Similarly, Chris Garabedian, blurring in the world of genomics, ever. So have the major medical chairman and CEO of Xontoge- personalized medicine, and rap- centers here. And the emergence ny, stayed in the Cambridge area idly evolving and success of local companies when he launched the company areas of scien- like Genzyme, Millennium, and in June 2016. Garabedian previ- tifi c and medi- others are not new.” ously served as president and cal discoveries, The biotech boom in Boston CEO of Sarepta Therapeutics including gene has, more so, taken shape within from 2011 to 2015. therapy, cell the last fi ve to 10 years, according Prior to Sarepta’s name therapy, and to Slatkavitz. “MassBio has been change, which Garabedian initi- Kevin Slatkavitz gene editing. key, as have investors like Third- ated along with its move to Cam- Many large pharma now have a Rock, Flagship, Polaris Partners, bridge, the company was known presence in innovation centers in Atlas Venture, and others,” he as Avi, founded in Oregon and Boston/Cambridge, along with says. “But I suspect that the oth- located in Bothell, WA. Garabe- their historically biologic breth- er necessary ingredient was then- dian needed to choose between ren. Philadelphia, which saw cen- Gov. Deval Patrick’s 10-year, $1 Seattle and Cambridge for the tury-old traditional chemical billion investment in Massachu- new location and vision, and ul- companies such as DuPont evolve setts life sciences and the creation timately chose Cambridge/Boston into big pharma, which then mor- of the Massachusetts Life Scienc- because of the talent. He posted phed again through acquisitions es Center, with Gov. Charlie Bak- available jobs in both locations and consolidations, is now seeing er’s recent legislation that contin- but said “nine out of 10 either in- a rejuvenation from the cell-based ues that program another five dicated they would move to Bos- research of University of Pennsyl- years and about $500 million. ton or already were in Boston.” vania (UofP) and Children’s Hos- Much like understanding many Dr. Blaine McKee has been pital of Philadelphia (CHOP) of stories, this one is also about fol- chief business offi cer for Immu- the past 30 years come to frui- lowing the money. And all of this noGen, also in Waltham, for tion. And New Jersey, with its infrastructure collectively contin- about two months. Like Garabe- You’re carrying quite a load. Let us help. Tired of being small peanuts to your large, Facing substantial sales expectations? Massive product blue-chip agency? As an independent agency, launch? We’ll shoulder the tasks. Since 1985, we’ve helped we challenge the idea of “bigger is better” by over 200 healthcare brands like yours succeed. answering to clients, not shareholders. Looking for creative that’s impossible to ignore? Get rid of your heavy load. We’ll help your brand get noticed. Our work has Call Anshal at 312-935-5040 or email us accumulated over 150 prestigious awards over the years. at [email protected] purohitnavigation.com 20 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

dian, he comes to his new com- Philadelphia addition, he noted there are more pany with a wealth of experience If you traveled to the J.P. Morgan than 60 academic institution labs specifi cally in Healthcare Conference in San in Philadelphia focused specifi - medical devic- Francisco, CPhI in Philadelphia, cally in cell and gene therapies. es, along with or to BIO in Boston this year, you Moreover, 75% of the vectors small and would have seen the marketing being used in cell and immuno- large biotech. handiwork of Life Sciences PA in therapy research were identifi ed McKee also is action. The Cellicon Valley cam- at Penn. Broadly, $450 million is no stranger to paign—including signs in the already invested in cell and gene Blaine McKee Boston—he airport, billboards, and taxi men- therapy in the area, and each lab received his PhD in Organic tions—builds on a strategic plan employs, on average, 13 research- Chemistry from MIT, and an started in the early ’90s at UofP ers and technicians. MBA in Finance from the MIT by then-head of Penn Medicine, If success breeds success, then Sloan School of Management. Bill Kelley, that ultimately led to Spark may win the award for McKee said that both the tal- it becoming a leader in cell and launching biopharma renewal in ent and potential opportunities gene therapy. University City. Steve Rush, vice in the Boston area are unparal- Chris Molineaux, president president of leasing for Brandy- leled in regard to the proximity and CEO of Life Sciences PA, wine Realty Trust in Philadel- to science, as well as the ability says the scientists hired into Penn phia, said interest from startup to partner with academia, medi- 30 years ago and fanned out biotechs has increased since cine, and industry. However, he across the region, have turned the Spark signed on to be a tenant in did note one challenge. “The job area into a veritable family tree Brandywine’s Schuylkill Yards, a market for sciences is very in- of cell and gene new 20-year, $3.5 billion mixed- tense and it’s very much in de- therapy. This is use development on a 14-acre site mand,” says McKee. “It’s quite evidenced by in the midst of existing buildings important that you stand apart the FDA ap- and surface lots adjacent to 30th from other companies in order to provals in 2017 Street Station. That location is attract and retain talent. It’s not of Kymriah, the home to Amtrak and the region- always about the money; you CAR-T therapy al SEPTA lines, NJ Transit, the Chris Molineaux can’t underestimate culture and begun by Carl subway, trolley, and four bus the importance of a cutting-edge June at Penn and completed with lines, as well as very close prox- science.” Novartis, and Luxturna, a gene imity to Drexel University, UofP, McKee says that the innova- therapy for a genetic form of and CHOP. tive science or breakthrough sci- blindness started by Jean Ben- John Furey, chief operating ence is critical, but in the end, it nett, Al Maguire, and Kathy officer of Spark Therapeutics, is more important to bring that High at CHOP and developed by says the company currently occu- science forward to help people. Spark Therapeutics. Cellicon Val- pies space in three buildings in “Financially, sure, it’s important, ley built on these successes to University City area. It will add but what really motivates them is infl uence biotech and life scienc- additional space in that same area the promise,” he says. es development in the Philadel- by the end of 2018. He said of the Besides government support, phia area. Philadelphia location: “All of the the venture capital climate in the Molineaux says the develop- regional features of Boston equal- Boston area cannot be underes- ment work of these academics ly apply here.” timated, as 80% of all life sci- and industry has attracted con- Rush echoes similar senti- ences venture capital is currently tract research organizations ments. “There is a massive funneled into the area. McKee (CROs) and contract manufac- amount of young, talented, edu- noted that the venture capital of turing organizations (CMOs) cated people in this area that be- the mid-1990’s that made San into the area, including Absorp- come potential employees for Francisco the leader in biotech tion Systems, WuXi App Tec, and these companies,” he says. “What has now underscored Boston and others, that has formed an eco- is also of great benefi t is the op- Cambridge as the unambiguous system that has been quietly portunity for corporate partner- leader. growing for the past decade. In ships with the universities on AUGUST 2018 PHARMACEUTICAL EXECUTIVE Emerging Biopharma 21 WWW.PHARMEXEC.COM

technology, research, and student toward biologics, though they additional jobs, establishments, co-ops or internships. weren’t rolling in blockbusters. venture funding, and collabora- This fall, Schuylkill Yards will The revolution of biology—not tion opportunities—is a testa- open a public park called Drexel that chemistry isn’t important— ment to the strength of the state’s Square, which is located at the and the new era of gene therapy innovation ecosystem. Our com- center of the development at 30th and research into the mechanism panies and research universities and Market Streets. The park will of action for underlying disease, continue to deliver unprecedented be fl anked by retail shops and traditional pharma didn’t have medical innovation to patients restaurants, and will be the home that infrastructure,” explains around the globe, with nearly to hosted events. Besides the at- Cola. Prior to regional pharma 50% of all new 2017 drug ap- tractiveness of the park, Rush downsizing, there were about provals coming from companies explains, “Philadelphia has put in 90,000 pharma employees within with a footprint in New Jersey.” various economic incentives for a 1.5-hour radius of Philadelphia. For example, Fort Lee, NJ, is this location, which is in a Key- he notes, emphasizing that that the recently announced new lo- stone Opportunity Zone, which talent base is largely still here. cation for Korea-based Enzychem abates taxes here for 10 years.” Cola believes the city offers Lifesciences, a global biopharma The near-west Philadelphia fertile ground to grow and nur- company founded in 1999. In a suburbs of Wayne, Pa., is home ture young and emerging biotech recent Pharm Exec article (view: to Aevi Genomic Medicine, for- companies. “There is certainly https://bit.ly/2Lk426U), Ki- merly known as Medgenics. Aevi room to bolster the growth of our Young Sohn, chairman and CEO is developing therapies for chil- industry in Philadelphia, primar- of Enzychem, cited the reasons dren and adults with pediatric ily through increased alignment for choosing Fort Lee: “There are onset life-altering diseases, in- between several key players—the many big pharma and biopharma cluding ADHD, Crohn’s, and local and federal government and companies headquartered in the autism. The drug candidates investors, to name a few. We have New York and New Jersey area. leverage an internal genomics all the right ingredients in place Plus, the proximity to New York, platform and a collaboration within our city limits.” which is the center of fi nance.” with the Center for Applied Ge- Hart says the 2012 exit of nomics (CAG) at CHOP. New Jersey Roche from Clifton and Nutley, Aevi President and CEO Mike It’s diffi cult to have a conversa- which marked the end of the Cola previously served as presi- tion that includes New York City three-year transition of the Ge- dent of specialty pharmaceuticals and Philadelphia without dis- nentech-Roche merger, was a at Shire, as cussing New Jersey—something huge blow to the Garden State. In well as senior that people as far back as Benja- 2009, 1,500 jobs were lost or positions in min Franklin have observed, moved to South San Francisco, product devel- when he allegedly said that New and another 1,000 when the com- opment and Jersey was the barrel between the pany made the decision to close commercial- two cities. Also, we couldn’t pin- and raze its 116-acre campus. Ul- ization at As- point one specifi c city to single timately, it saved fi ve buildings on Mike Cola tra Merck and out the most in New Jersey be- the campus, one of which was AstraZeneca. Cola received his cause the state renovated to become—six years BA from Ursinus College and MS itself is seeing later—the Hackensack Meridian from Drexel. With his back- life sciences re- School of Medicine at Seton Hall ground, Cola has a unique under- newal in multi- University. It opened to its fi rst standing of the area’s biopharma ple regions. But class of 55 students on July 9. history. no matter where The former Roche campus “Philadelphia is based in the that renewal is development, called ON3, is sim- chemical industry, which is very occurring, Deb- Debbie Hart ilar in vision to Schuylkill Yards. risk averse, which evolved into the bie Hart, founding president and It will feature a mix of offi ces, small-molecule pharma compa- CEO of BioNJ, says, “The R&D, residential, and retail, nies, which is also conservative,” growth of New Jersey’s biophar- along with potential lodging and he says. “They were slow to move maceutical industry—including entertainment concepts. 22 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

A 35-mile drive south of the Cambridge. Though not just for Pharm Exec editors learned inter- new medical school is Celgene, biomedical research, the viewing and researching the arti- which earlier this year opened its 31,000-square-foot hub includes cles for this section, we developed Thomas O. Daniel Research In- fully equipped work spaces for our own list of key success factors cubator and Collaboration Cen- biology, chemistry, and engineer- for regionally-oriented biophar- Keys to ter on its campus in Summit. ing companies, with 68 lab ma innovation hubs (see sidebar). Success Forty miles south of Celgene benches, private offices, and Number one, not on our list, is the intended redevelopment site shared desks for more than 200 is affordability. For the Cam- » Research/ of “The Hub,” in downtown scientists and entrepreneurs. bridge/Boston area, the growing hospitals/health systems New Brunswick, a recent project When full, the hub will house 25 presence of big pharma has re- announced by NJ Gov. Phil Mur- or more small companies, most sulted in increased rental rates for » Discovery/ academia/ phy and Rutgers University. The with only a handful of employees. offi ce and lab space. “But that’s universities site, approved for up to four mil- According to Hart, Princeton balanced with the sheer opportu- (tech transfer) lion square feet of commercial BioLabs and the Rutgers involve- nity to get different experiences,” » Students/ development, is adjacent to the ment in the New Brunswick ini- says Moulder. “Many small bio- scientists New Brunswick train station, tiative are just a few examples of tech depend on pharma for col- » Number of and close to existing corporate, recent activity by NJ-based uni- laborations and deals.” biotechs medical, and academic research versities, which have reexamined Cola says the cost of starting » Transportation activity and public transporta- their internal tolerance for tech- up a company in Boston or New » Economic tion. In a recent New Jersey Busi- nology transfer, no longer insu- York City is expensive. And then investment from ness article (view: https://bit. lating themselves but opening up where does the workforce live? In state or local ly/2LIyrb8), Alex Gorsky, chair- to the possibilities for research both cities, access to the less ex- government man and CEO of Johnson & collaboration. The state recently pensive suburbs via public trans- » Key FDA Johnson, said it is “a natural lo- launched Research with NJ, a portation is key. But a number of approvals/pivot for commercialization cation for this innovation hub” database aimed at boosting col- experts also mentioned living in because, again, it is near “the laborations and relationships in the Philadelphia area, and com- world’s financial capital,” top STEM fi elds at fi ve universities, muting to Boston via Amtrak or companies, research universities, including New Jersey Institute of plane. “There is a lot of conve- and leading medical centers. The Technology, Princeton, Rowan nience in Philadelphia,” says development plan is just starting, University, Rutgers, and Stevens Cola. “The cost of the market is so no timelines are yet available. Institute of Technology. less, it’s between NYC for the Another 30 miles southwest fi nancial piece, and DC for the from the New Brunswick loca- Is there a secret sauce? access to the FDA.” LISA HENDERSON tion is the recently opened Princ- “What has happened in Cam- Hence, we tabled rents and is Pharm Exec’s eton Innovation Center BioLabs, bridge is truly extraordinary,” affordability from our list in lieu Editor-in-Chief. She formed by Princeton University says Hart. “But there is room for of the proximity to good trans- can be reached at lisa. and BioLabs, a professional lab a lot of different models and dif- portation options as a factor for [email protected] management company based in ferent players.” Based on what success.

Innovation Hubs: Incubators totaling $255 million » Trains: Amtrak, NJ Transit At a Glance » New Jersey has four biopharma » Between 2010 and 2015, NJ received » Buses: Public and private transit incubators 186 Small Business Innovation (Sources: https://bionj.org/wp-content/up- Research (SBIR) awards, totaling $89 » Plans for three more in the near future loads/2018/02/BioNJ-Stat-Sheet.pdf; https://bionj. NEW JERSEY million org/wp-content/uploads/2018/02/BioNJ-Full- Economic impact White-Paper-012918.pdf; http://assets.njspotlight. Life sciences establishments Employment com/assets/17/0718/1940) » The estimated annual economic » 3,280 life sciences entities » Over 120,000 life sciences workers BOSTON/CAMBRIDGE impact of the life sciences industry in (of which 65,000 are biopharma) » Approximately 1,000 pharma and NJ is $47.5 billion Life sciences establishments biotech companies Transportation Funding » 250+ biotech companies in Boston- Academic institutions » Local: NJ Transit trains and buses Cambridge » NJ institutions received $240 million » 63 academic institutions in NIH funding in 2016 » Airports: Newark Liberty International » 225+ biotech companies in the areas Airport, Atlantic City International right outside of Boston (Worcester/ » 20,000 life sciences graduates each » From 2014-2016, 19 NJ deals received Airport, Trenton-Mercer Airport 1-495; Northeast, 128/Suburbs) year venture capital funding investments, AUGUST 2018 PHARMACEUTICAL EXECUTIVE Emerging Biopharma 23 WWW.PHARMEXEC.COM

Biotech Investment: Reigning in Spain Over the last decade, Spain has seen a signifi cant growth in venture-capital investment in the life sciences. We look at the effect on the country’s evolving biotech sector

By Julian Upton following its difficult journey Mairet, told Pharm Exec: “Great n March 2017, Labiotech. through the global fi nancial crisis, science has been here for decades; eu reporter Clara Rodríguez Spain has emerged as a region that we have top hospitals, centers of I Fernández wrote that she no- has been quietly pressing ahead excellence, and high-quality re- ticed there was “far less biotech with a privately-fi nanced agenda search. But it’s only now that this news” coming from her home of investment in innovation, with research is being translated to country, Spain, than from the UK, a growing number of success sto- industry, and venture capital is France, or Germany. She tapped ries under its belt. behind this.” three of the country’s biotech Following this lead, Pharm Founded in 2008, Ysios Capi- leaders for a check-up on the sec- Exec caught up with some of the tal’s rise was helped by some for- tor’s health, and was heartened key players in Spain’s evolving tuitous timing—the company that they all agreed that “the biotech ecosystem to explore closed its fi rst fund three weeks country is at an infl ection point their contributions and opinions, before the collapse of Lehman for growth and international rec- and to gauge how much this new Brothers. “If we had aimed to ognition.” Concluding that Spain sense of optimism is warranted. close just a couple of weeks later, is overcoming the challenges of it would have been a different sto- the past and starting to catch up Infl ux of capital ry,” says Jean-Mairet. However, with other European countries, The big catalyst for the increasing the biotech sector has been rela- Rodríguez Fernández said it was vitality of Spain’s biotech sector, tively immune to the financial “clear that we’ll start hearing particularly in the Catalonia re- crisis in Spain “because equity VC more and more about Spain’s gion, has been an infl ux of ven- fi nancing allows biotech compa- biotech in coming years.” ture capital. Catalonia now has nies developing products to fi- The Labiotech report es- 29 local investment bodies invest- nance themselves. Other fi nancing chewed some of the issues that still ing in life sciences; the fi ve key options, such as debt fi nancing, restrict the country’s biotech sec- fi rms specializing in the sector are not possible because such com- tor from stealing a march on some are Caixa Capital Risc, Inver- panies obviously do not have any of its European neighbors, and it eady, Healthequity, Alta Life Sci- cash fl ows,” Jean-Mairet explains. did not dwell on the conspicuous- ences, and, particularly, Ysios Moreover, M&A activity between ness of Barcelona’s towering lead Capital, the biggest biotech VC large pharmas and biotech com- over the other Spanish biotech in Spain. Ysios’s co-founder and panies has been relatively stable hubs. But it shone a light on how, managing partner, Joël Jean- “because large pharmas are con-

Academic institutions » Venture investment in MA biopharma D.C.), Lake Shore Limited (to and from » 4 NCI-designed cancer centers was $2.9 billion in 2016. Other MA life Chicago), Downeaster (to and from » 48 colleges » 10 medical centers sciences companies raised $430 million Portland, Maine) Incubators and Accelerators in venture capital in 2016 Academic institutions » Buses: Greyhound, Megabus » 28+ » Cambridge based companies received » 90+ colleges and universities » Waterway: Port of Boston, passenger 59% of all biotech venture investment Economic impact boat services » 13 university-industry partnerships in the state focused on life sciences » $13.4 billion in wages in 2016 (Sources: http://fi les.massbio.org/fi le/MassBio-In- Transportation dustry-Snapshot-2017.pdf; https://masstech.org/ » 6 medical schools Employment why-massachusetts/other-technology-resources/ » Local: MBTA Bus, MBTA rail subway incubators-and-accelerators; http://www.masslife- » 400,000 students » 66,414 employees (nicknamed “T”) sciences.com/wp-content/uploads MLSC2018-Im- pact-Report.pdf) Economic impact Funding » Airport: Logan International Airport GREATER PHILADELPHIA » The industry generated a total (direct » Massachusetts received $2.6 billion » Trains: Amtrak: Acela Express, and indirect) state economic output of in NIH funding per capita in 2016 Northeast Regional (Northeast Corridor Life sciences establishments to and from NYC and Washington, » 1,659 entities cont’d, next page 24 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

stantly seeking disruptive product ue, investing huge amounts in cause if you don’t have a local candidates and are cash rich.” R&D. It was really challenging lead, raising money in other ge- Over the past 10 years, from to raise money outside Spain un- ographies is more diffi cult for investment funds totaling close to til Ysios made its move. Now we biotech companies.” €200 million, Ysios has invested can talk about these things with Perelló notes that after Ysios in some of the major biotechs in specialized investors.” decided to lead its last fi nancing Spain, including Sanifi t, Minoryx Prior to Ysios, Jean-Mairet round, Sanifi t was able to attract Therapeutics, Aelix, STAT-Diag- was all too aware of dealing with “a very powerful syndicate of in- nostica (STAT-Dx), and Cellerix, venture investors when he was ternational investors, including which reverse-merged with the “on the other side of the table” in Baxter Ventures Belgian company TiGenix. his role as founder of a biotech and the Lund- STAT-Dx, which develops multi- developing a leukemia treatment beckfonden.” plex diagnostics for molecular (a company he later sold to Hoff- As Perelló told analysis of common syndromes, man-La Roche). “I didn’t like it Labiotech.eu was fi nanced by Ysios and other when a VC took three months to (March 14, international VCs, with over €40 reply to my emails,” says Jean- 2017), “If you Joan Perelló million, and sold to QIAGEN Mairet. The experience urged are a biotech in earlier this year for $191 million. him to push Ysios to speed up its Spain looking for international (“From scratch to exit was just own process when he saw it was investors, everyone wants to six years,” says Jean-Mairet.) Ti- starting to take more time to get know Ysios’s opinion.” Genix, which exploits the anti-in- back to proposals. “I said ‘We fl ammatory properties of stem can’t have this’, so we instigated Homage to Catalonia cells to develop novel therapies a process whereby every week we As mentioned, Ysios and Spain’s for serious medical conditions, screen for things that we should other key specialist VC compa- was acquired by Takeda this year look at. We may end up telling a nies are all for €520 million. company ‘Thanks, but no based in Barce- The importance of the special- thanks,’ but we communicate lona. The Cata- ized VCs for the Spanish life sci- that to the company very rapidly; lonia region ences sector cannot be underesti- we don’t take three months.” also is home to mated. Before the arrival of fi rms VCs such as Ysios have given some of Spain’s such as Ysios, as Sanifi t’s Joan Spanish companies “more visibil- biggest pharma Perelló explains, talking to gen- ity to the outside world,” says companies, in- Joël Jean-Mairet eral investors was like “speaking Jean-Mairet. “There have been cluding Almirall, Ferrer, Grífols, another language.” He says: sizeable international rounds in Bioibèrica, Reig Jofré and Uriach, “They talked about sales, reve- the last couple of years; quite a and is the Spanish base for mul- nues, short-term ROIs, break- few corporate venture funds— tinationals like Amgen, Novartis, evens, etc. I’m not saying those Novartis, Roche, and Lundbeck, Sanofi , Roche, Bayer, Boehringer are not important concepts, but among others—have invested in Ingelheim, and Lundbeck. biotech stories are different sto- Spanish companies. This was in Among the biotech success sto- ries. They are about building val- part thanks to Ysios Capital, be- ries from the region are Orzon

(cont’d from previous page) Transportation NEW YORK CITY Transportation $88.5 billion, comprised of a direct » Local: SEPTA buses, rapid transit, Life sciences establishments » Local: Subway, taxi cabs, MTA buses economic impact of $48.8 billion and commuter rail, trolleys » 3,514 companies » Airports: LaGuardia Airport, JFK , an indirect of $39.6 billion in PA » Philadelphia International Airport Newark Liberty International Airport Employment Employment » Trains: Amtrak (11 intercity routes), » Trains: Pennsylvania Station, Grand » 78,872 employees in 2016 » 53,594 employees SEPTA Regional Rail (access to 13 Central Terminal, Amtrak, Metro-North routes from main rail station) Funding Railroad, NJ Transit, Staten Island Funding Railway, Long Island Rail Road, Port (Sources: Pennsylvania Life Sciences Industry » $2.4 billion in FY 2017—in VC » $913.5 million in NIH funding report; Greater Philadelphia Region Life Sciences Authority Trans-Hudson (PATH) Report; An evolving industry: Today’s clusters investments and in patent activities » $389.3 million in VC creating tomorrow’s breakthroughs; all supplied » Buses: Port Authority, mix of public by PhillyBio) and private buses AUGUST 2018 PHARMACEUTICAL EXECUTIVE Emerging Biopharma 25 WWW.PHARMEXEC.COM

Genomics, Aelix Therapeutics, shutterstock.com/ basiczto AB Biotics, and the aforemen- tioned STAT-Dx. According to Biocat—whose mission is to promote innovation in the Calatan system by collabo- rating with university/research institute technology transfer offi - cers and connecting the best proj- ects with investors and pharma companies—the Catalonia BioRe- gion hosts 259 biotechnology companies. In Europe, Catalonia ranks third for biotech companies per capita (just behind Sweden and Switzerland); since 2010, on Sagrada familia skyline at dusk in Barcelona. average, one new company per Catalonia’s pharma and bio- People make the jump from aca- week is set up in the region. Be- tech space has a developed entre- demia and set up companies. You tween 2015 and 2017, biotech preneurial culture, says Jean- can also see this in the region’s companies in Catalonia attracted Mairet. Barcelona’s hospitals, other sectors, such as digital and more than €165 million ($193 business schools, centers of excel- e-commerce.” He adds: “We have million) in investment, 55% high- lence, and research tradition have been living in a startup ecosys- er than 2013–2015. What’s more, seen the industry fl ourish there tem, but now the ecosystem is Catalonia boasts 41 research cen- more than the rest of Spain. For scaling up, which brings in more ters and 780 research groups in Biocat Strategy Director Jordi investment and more talent.” healthcare and life sciences; 18 Naval, in addition to the signifi - Perelló, however, is keen to university hospitals; three large cant economic growth in recent widen the focus outside Barcelona science facilities (ALBA Synchro- years, the presence in Barcelona and Catalonia. “If we look at tron, the Barcelona Supercomput- of major companies like Almirall what happened 20 years ago in the ing Center, and the Centro Nacio- and Grífols “have created a US, I think it’s the same here. Peo- nal de Análisis Genómico); seven source of talent and professionals, ple tended to concentrate in spe- technology centers; and 14 science who know the pharma business, cifi c areas—Boston, San Francis- and technology parks with activ- and a whole ecosystem of provid- co, San Diego, Chicago—because ity in life sciences. Across all sec- ers, from quality assurance to it was more effi cient for investors, tors, 21% of Spain’s researchers chemistry, manufacturing, and for companies, and for tech trans- work in Catalonia. control (CMC) to regulatory af- fers,” he says. “In Spain, you have This begs the question: when fairs. This talent pool has been Barcelona, for sure, but you also we talk about Spanish biotech, are vital to the region’s development.” have Madrid and the Basque we talking mainly about Catalo- Naval reiterates that “there is Country. Sanifi t is based on the nia and Barcelona specifi cally? a healthy entrepreneurial spirit. Balearic Islands (Mallorca), which

» Ferries: Staten Island Ferry, New Academic institutions Funding » Trains: Media distancia Renfe York Water Taxi, ferries from NJ to (regional rail) » 780 research groups working in 41 » More than €$100 million in 2017. In Manhattan research institutes 10 years, the number of international » Trams: Trambaix, Trambesos, and (Source: https://www.bio.org/sites/default/fi les/ investors participating in life sciences Tramvia Blau » 12 universities offering biosciences NY-BIO2018%20-%20state%20profi le.pdf) companies based in the BioRegion of degrees » Buses in Barcelona Catalonia has grown from zero to 43, BARCELONA, CATALONIA Employment almost doubling in the last two years (Sources: Highlights of Barcelona and theBioRegion of Catelonia; Study on investment in the biomedical Life sciences establishments » One in fi ve researchers in Spain Transportation industry in Catalonia 2018; Achievements and work in Catalonia. More than 5,600 future challenges) » 1,100 startups » Local: Barcelona Metro, Rodalies researchers work in Catalan hospitals Barcelona (commuter rail) » 14 science and technology parks and research centers » Airport: Barcelona Airport — Christen Harm » 104 hospitals » 10,000+ employees from startups 26 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

is a rare situation, but in 2015 we tive European and international Perelló points out, R&D expen- closed the largest private fi nancing projects, which means added val- diture at the country level is 1% round ever in the Spanish biotech ue for investors.” He also points of GDP. “It is diffi cult to reach sector (€36.6 million).” to the country’s high concentra- critical mass with those levels of Perelló started Sanifi t in 2004 tion of projects, international investment,” he says. “Projects with the vision of becoming the airports, and good climate as come from universities, from hos- leading company in the fi eld of other advantages. “It is an attrac- pitals, from tech transfers, and calcifi cation diseases. “We now tive hub for everyone,” says you have to feed all these institu- have a Phase III-ready clinical Perelló. For Waller, who moved tions, not to create more quality asset, which we hope will be our to Spain from the UK in 2006, but a higher quantity of quality. first marketed drug,” he told the country “is a great place to We have some success stories now, Pharm Exec, “and we are push- live and do business. There’s but we need more.” It has been ing to diversify the pipeline to something in the Spanish psyche difficult, Perelló adds, for re- attack other disorders.” Sanifi t is about fi ghting through adversity, searchers from universities, hospi- now “keeping a close eye on po- and this spills over into business.” tals, and research centers to create tential IPO opportunities in the Most biotech activity, howev- their own com- mid-term,” says Perelló. er, remains focused in Barcelona, panies. Howev- Nathan Waller, managing di- which Naval sees as continuing to er, there have rector, EMEA, of health technolo- grow much faster than Spain’s been recent im- gy company Medrio, points to other regions. “We are already on provements in fi rms in Madrid that are breaking the path to where investing in the system with through with pioneering treat- Barcelona is as easy and straight- regard to tech Jordi Naval ments. Cellerix, now TiGenix, forward as investing in Amster- transfers to pri- which uses stem cell technology to dam, Brussels, or Berlin,” he says. vate companies. Pointing to the treat perianal fi stula, regenerating “Once you start bringing in J&J Spanish BioIndustry Association’s the skin and closing the wound, is or Roche, for example, they see (ASEBIO) road map for the edu- one of Madrid’s success stories. that all the elements are in place cation and training of profession- Medical device company Medlu- here: the lawyers, the experts, the als in the new employment niches mics, developing a fi rst-in-class, clinical expertise.” Naval adds created by the bioeconomy, optically guided heart catheter that the region’s main hospitals Perelló says, “While the situation with a built-in suturing device, is are very collaborative in conduct- is still not optimal, we now have another. Madrid is also home to ing clinical trials and the recruit- a framework.” Spain’s largest public biotech, Phar- ment capacity in the main indica- Naval agrees that, even in the maMar, founded in 1986. Back tions is high. “If you have the Barcelona region, “there still is an then, according to the company’s company, the investors, and the opportunity gap between the sci- oncology business unit head, Luis CMC all in the same place, and entifi c potential and the number of Mora, the Spanish biotech sector are able to conduct the clinical startups that have begun opera- “was not known by the public or trials in the same region, it makes tions.” But, he emphasizes, “smart even by the authorities” (Labio- life much easier from a startup or investors are seizing the opportu- tech.eu, March 14, 2017). Phar- biotech point of view,” he says. nity and it is gaining momentum.” maMar, which “takes inspiration And with its dynamic cultural For his part, Jean-Mairet pre- from the sea to discover molecules offerings, climate, and quality of dicts more consolidation over the with antitumor activity,” was the life, Barcelona is an attractive des- next two to three years. “I think fi rst company in Spain to launch a tination for C-suite talent from the we will see more transactions, Phase I trial (in 2001). Today, it has US, the UK, and the rest of Europe. more international rounds, and a market cap of over $400 million. “We have the advantage that tal- hopefully more exits,” he says. Spain as a whole, says Perelló, ented and innovative people really “The ingredients are there now JULIAN UPTON is Pharm offers “good science, good proj- want to move here,” says Naval. for Spain’s biotech activities to Exec’s European and ects, and the profi le of the entre- have more international appeal Online Editor. He can preneurs is very special. It is very Maintaining momentum for investors. We have the talent, be reached at julian. cost effi cient and has been able to There is, of course, plenty of room the science, the infrastructure, [email protected] raise public funds from competi- for development in Spain. As and we have the capital.” AUGUST 2018 PHARMACEUTICAL EXECUTIVE Emerging Biopharma 27 WWW.PHARMEXEC.COM

Face It. You’re Not a Biotech Anymore The growing need for a commercial mindset in scientifi c discovery

By Lisa Henderson third-tier innovation hubs, and, “There is a fragmentation of all it the commercialization overall, small biotech are rife in PA sources of innovation…75% of pivot. There comes a time and NJ. Besides the access to talent new molecular entities approved C when a biotech—which has and other factors, FDA approval is by the FDA originated outside of 90% of its fi nancial value in one the fi nal key factor for regional in- the top 30 pharma companies last candidate, has been vested in one novation hub success. Garabedian year.” Moran elaborates that big indication, knows the science of noted that what separates the sec- pharma largely missed the early that compound inside and out, ond-tier markets from the top ones days of biologics, “and we aren’t and is singularly focused on that is the commercial breakout. “You going to miss that again.” scientifi c execution—has to take need a commercial success to form He says that NIBR scientists are the next steps and execute on the backbone of the innovative “pure of heart and mission,” and clinical development, regulatory, hub,” he say. For Boston, the suc- are directly tied to Phase I, II, and and then, potentially, commer- cesses were Genzyme and Millen- III clinical trials—or as Moran calls cialization. nium. For Philadelphia, Spark it, “the reality of medicine.” He Chris Garabedian, chairman Therapeutics can take home the says it’s still hard to make deci- and CEO of Xontogeny, noted one trophy for a recent FDA win. For sions, because of the key pieces missing for much NYC, Synergy Pharmaceuticals re- scientifi c discov- of biotech is access to the right cently gained an indication expan- ery isn’t linear. people to make drug development sion approval for its drug Trulance. “Finding the bal- decisions. And that’s not just a ance between plug for Xontogeny, which offers Discovery access scientific and exactly those services. Ninety per- To ensure their access to and abil- market decisions Stephen Moran cent of all biotechs fail, but Gar- ity to foster success in promising is a constant abedian doesn’t believe that they therapies is the reason behind struggle of knowing what to prior- all fail because of technology risks; many large pharma establishing itize and stop,” says Moran. Com- they fail because of the design, innovation or incubation centers mercially, he explained, maybe the chosen endpoints, or short cuts in globally and in the US. thought is to discontinue a pro- science. “There are three key chal- The fi rst to land in the Boston/ gram, but then a breakthrough is lenges that have emerged in bio- Cambridge area was Novartis, made. Or the breakthrough leads tech,” he says. “There is a lack of which established its Novartis In- to a very small market for the drug, suffi cient drug development talent stitutes for Biomedical Research so then decisions around getting across biotech; there is a huge pile (NIBR or “nibber”) there in the into a larger market come into play. of intellectual property that needs early 2000s. Dr. Stephen Moran, As Dr. Chandra Ramanathan, to be developed and incubators global head of strategy for Novar- vice president and head of the East create more and more IP, but there tis, says, “It was a bold move to Coast Innovation Center at Bayer is no increase in turning that IP take R&D out of Switzerland. and member of the Pharm Exec into a company.” Cambridge wasn’t the big hub it is Editorial Advisory Board, noted: When Aevi Genomic Medi- today, but [former CEO Daniel] “Innovation becomes meaningless cine’s President and CEO Mike Vasella had a vision and a philos- if you can’t translate it to patient Cola refers to the large number of ophy.” Moran says NIBR’s fi t in needs.” talent still located in the PA-NJ the current Novartis strategy is At the Bayer innovation center, area, he is specifi cally talking about multi-faceted. With the explosion Ramanathan says they have a laser those professionals with the knowl- of scientifi c developments, such as focus on identifying and cultivat- edge of regulatory affairs, clinical gene therapy and CRISPR; plat- ing partners that can address pa- development, GCP, market access, form technology for cell therapy tient needs. From discovery, to sales, and commercialization. and T-protein presentation, and development, to commercial, as Those same skills that Garabedian additional therapeutic areas, com- long as the patient is at the center says are elusive in second- or panies need diversity of science. of the decisions, success will al- 28 Emerging Biopharma PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

ways come back to the patient, he to scale on three fronts—knowl- launches from 2007–2016 shows believes. “In evaluating new col- edge, platforms, and capabilities— 40% were from top 25 pharma, laboration opportunities, you have to network across the ecosystem. 30% from medium, and 30% to ask, could the biology potential- That Cambridge ecosystem, from emerging biopharma com- ly translate into addressing unmet says Gary Nabel, chief scientifi c panies based on those who com- patient needs? If companies hav- officer and head of the North mercialized the product, not de- en’t thought about that question, America R&D hub for Sanofi , is veloped it. However, optimizing then they really need to rethink one that people could take for fi rst-year sales presents challenges. their strategy,” says Ramanathan. granted. Nabel, whose college, Average fi rst-year sales growth for The Bayer executive started his medical school, and post-doctoral large pharma was $114 million, career as a genomic scientist doing work were all conducted in Cam- $42 million for medium, and $28 research, then moved over to the bridge, says, “It’s like a garden. million for emerging. This com- commercial side, and is now lever- You have trees, fl owers, bushes, pares to the fi rst-year promotion- aging the best of both experiences animals, water, sun. But take one al spend of $53 million, $36 mil- to guide companies to bring the thing away, say bees, and the lion, and $17 million, respectively. next innovations to fruition. He whole thing would collapse. With Further IQVIA data showed says, “I love it. I went to the dark Cambridge, you don’t have to that emerging biopharma that part- side and came back with better worry about sustaining the eco- nered for larger investment appears appreciation of customer insights. system.” to have little advantage from a rev- enue perspective. However, because of large pharma’s experience with “Finding the balance between scientifi c access and payers, partnering does and market decisions is a constant struggle appear to positively affect market acceptance. When partnering with of knowing what to prioritize and stop.” large pharma, prescription fi ll rates for the emerging biopharma in- creased 8% vs. going it alone. Pro- I help start-ups apply those in- Like Novartis and Bayer, Sano- motional spend for emerging bio- sights—how to best leverage the fi had begun to launch global in- pharma partnering vs. going it biology to deliver the most value novation hubs in the mid-2000s, alone features a $32 million gap. to the patients.” but Nabel says the Genzyme acqui- Out of 181 emerging biophar- Moran and Ramanathan note sition really established the com- ma launches examined by IQVIA, that being a part of a large pharma pany as a leader and it is the num- 8% were characterized by a high in a biotech-centered location can ber one life sciences employer in market need with a high product be challenging.“We want to be the Massachusetts. Nabel, though, is differentiation. Of those, 79% partner of choice,” says Moran. To very proud of the science that has chose a go-it-alone strategy. IQVIA that end, Novartis has many col- come out of the Sanofi /Genzyme experts theorized that those com- laborations, including academ- breakthrough labs. “I’m proud of panies knew the value and science ic-based with the University of our company partnering and look- of their drug, thus their decision. Penn and Harvard, and digital col- ing for external partners. We get While all product launches have laborations with Pear Therapeutics behind innovative approaches and challenges, IQVIA noted that the and Google. Recently, NIBR has take them across the fi nish line.” quality of pre-launch preparation— added its own partnering organiza- resources, alignment and process- tion to extend the reach of those The pivot es—is a key factor for post-launch collaborations and facilitate In a recent webcast sponsored by success. Therefore, they stress for growth. A sign of the times, as Mo- IQVIA (register for free on-de- the emerging biopharma, the need ran explains, “Previously, we were mand, http://bit.ly/2zBl9LV) ti- to hire the right people (or lean on a bit guarded. But we realized we tled “A Framework for Successful vendor partners), have cross-func- need to open that up and make it a Biopharma Launches,” experts tional visibility, and management more formal part of our strategy.” delved into the launch profi les and and start preparation early. Moran notes these partnerships insights for emerging biopharma. John Furey, chief operating of- and collaborations enable Novartis For example, IQVIA data of 605 fi cer of Spark Therapeutics, and AUGUST 2018 PHARMACEUTICAL EXECUTIVE Emerging Biopharma 29 WWW.PHARMEXEC.COM

Pharm Exec Editorial Advisory Clinical design, regulatory, and ing it alone in commercial or part- Board member, joined the compa- commercialization.” Spark has a nering. Biotech, itself, has many ny from Baxalta (now part of go-it-alone strategy for the US but exit strategies, of which FDA ap- Shire), prior to the approval of the has entered into a licensing agree- proval is but one, says Nabel. “The gene therapy Luxterna, specifi cally ment with Novartis to leverage its biotech model vs. the pharma to ready Spark for that pivotal step. regulatory and commercial exper- model is that biotech has exits at He says, “The benefi t of emerging tise non-US, when and if Luxterna any given stage to increase the biotech companies like Spark Ther- is approved globally. overall value of the company, apeutics is that you can be nimble Nabel says, “The market forces without ever having sold a prod- and act quickly as a cross-function- in industry are ruthless. You have uct, “ he says. “Now, pharmaceu- al team to have a big impact. We to pay attention to scientifi c rigor ticals companies get very little leveraged every minute pre-launch and market discipline. It forces you credit and are only rewarded when to prepare for a historic and unique to create value for all the stakehold- a product gets into the market. launch—the FDA approval and ers. It has to be meaningful for “I think it’s great that phar- launch of the fi rst gene therapy for patients and regulators, the costs to ma—of all people—are taking up a genetic disease in the US.” manufacture, as well as the payers.” all the leads from academia and Furey adds, “What are the core That complexity clearly drives biotech and pulling it altogether competencies of large pharma? some of the decisions around go- for success.”

‘Emerging’ Product Launch Strategies It’s tempting for commercial leaders at emerg- If an emerging pharma company is launching a ing biopharma companies to simply replicate the fi rst-of-its-kind product, it may not have any historical approach adopted by their big pharma counterparts market data. But that doesn’t mean it has to operate in when launching products. However, established and the blind. The commercial team should reference data emerging companies face vastly different situations on patient comorbidities and use its knowledge of the at launch. For one, specialty and startup biopharmas patient journey to identify potential analog products have the opportunity to build their commercial strat- and markers of potential. Finally, it’s crucial to refresh egies from scratch. Second, they often must launch data just prior to a product launch. For example, the with fewer resources than larger companies. commercial team should refresh market data six to As they formulate and lay out their launch roadmap, eight weeks prior to product launch to make sure the emerging biopharma commercial leaders should company’s deployment, forecasting, and targeting consider several key strategies. align with current market conditions. Prioritize data. Without robust and organized data, Focus on fl exibility. Commercial teams should plan for it’s diffi cult for a product launch to get off the ground. a variety of “what-if” scenarios prior to launch. For ex- With the right customer and market data on hand, a ample, what if a sales territory or team over- or under- company can create a comprehensive data infra- performs dramatically? How will that impact payouts for structure from which it can pull valuable insights that the fi eld sales representatives and total company expo- help it make accurate sales projections, design sales sure? If a company analyzes various possible outcomes territories effectively, and thoughtfully segment the tar- before launch, it can adjust its commercial tactics and get universe. But collecting, organizing, and analyzing parameters to avert disasters like a demotivated sales data requires thorough planning. force or fi nancially ruinous compensation plan. An emerging pharma company should start by col- An emerging pharma company also needs to en- lecting data selectively. It may be tempting to purchase sure the technology solutions it implements to help or- every available type of data—claims, procedural, patient ganize and analyze large amounts of data can facilitate counts, electronic medical records, etc. However, this a fl exible approach to launch. Many startup commer- requires a signifi cant investment that emerging pharma cial leaders make a mistake by buying big-name solu- companies with smaller budgets often can’t afford. tions that do much more than their company needs. Further, a company rarely needs all these data sources. These solutions, while robust and comprehensive, can Instead, emerging pharmas should scrutinize their require signifi cant effort to implement and maintain. needs and purchase the data that will best help them Therefore, they aren’t always the best fi t for emerging address those needs. They should also look to supple- pharma companies, which typically need more con- ment syndicated data with publicly available data, such fi gurable solutions that allow for quick customizations as open payments or census data, when appropriate. and changes. The data required for launch will vary depending on therapy area, but the approach will be the same. — Erik Cruz is a Manager at Beghou Consulting 30 Globalization PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

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The State of Cross-Border Funding in the Life Sciences Record capital fl ows across global public and private markets has opened up new channels of investment in early-stage and novel science

By James Leech panies (see Figure 1 on page 32). However, there he biotechnology ecosystem has seen con- has been a considerable increase in cross-border siderable investment over the last few years funding activity as globalization continues at a from a multitude of sources within both the macro level and regional interest in novel drug and T private and public markets. Traditional lega- device development to address both economic and cy investment funds are continuing to invest heav- social needs and broad recognition of the scientif- ily in the sector, with multiple well-known venture ic breakthroughs occurring all over the world in- and growth equity fi rms raising new funds well creases. beyond their target size and many new fi rst-time The private fi nancing market is the lifeblood of fund entrants joining the mix. Beyond these tradi- the life sciences sector. In 2018, the market has tional early-stage investor types, multiple promi- already seen a record number of private venture nent asset managers (i.e., Baillie Gifford, crossover fi nancings, with US life science companies securing funds, hedge funds, and sovereign wealth funds) a staggering $4.7 billion in funding in the fi rst have been lured into the life sciences ecosystem as three months alone. This level of funding is almost a means of generating alpha after observing high four times the average amount raised in the same profi le exits from the sidelines for many years. period during 2012 and 2013. We believe this is The US is fertile territory for identifying invest- occurring for reasons beyond merely the high num- able opportunities within the life sciences and a ber of promising life science companies that con- prominent target capital source for emerging com- tinue to emerge.

32 Globalization PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

science companies in the EU. 2. EU-based companies are considerably more capital effi- cient, often approaching fi nancing through drip feeding rather than the buffered capital approach. 3. EU-based companies take a more pragmatic and risk-averse approach to drug development (i.e., generating proof of concept in one to two target indications versus pursuing fi ve to 10 at once). Figure 1. The amount, in billions, raised in US life science venture rounds Life science transaction advi- (2014 to 2018 annualized). sors widely believe that truly in- novative and high-quality compa- nies will always find a way to attract the capital needed to fur- ther their R&D ambitions. In rec- ognition of the signifi cant region- al funding gap highlighted, several EU companies are now looking to US private funding sources as a means of increasing their capital base. Additionally, EU government organizations and venture syndicates are urging sources of capital from non-EU Figure 2. The amount, in billions, raised in funding rounds involving regions to fund their companies. Chinese Investors. This cross-border funding ambi- tion for US venture dollars ex- Over the last year, we observed capital flows into US biotech tends in both directions. several new investor-type entrants from China will continue at a As record-breaking life sci- to the early-stage life sciences record pace. Chinese healthcare ence focused venture funds were fi eld, with public crossover inves- VC and PE funds raised $40 bil- raised within the US, there are a tors, non-US venture funds, sov- lion last year, but invested just high amount of dollars compet- ereign wealth funds, and high net $12 billion domestically, accord- ing for high-quality US invest- worth (HNW) family offi ces eye- ing to ChinaBio. ment opportunities. This dynam- ing a piece of opportunities for the There is a signifi cant disparity ic has lowered the cost of capital fi rst time that may turn out to lead in the amount of venture funding to those seeking funding and, in to highly lucrative exits. raised by companies depending turn, has led to an increase in China-based VCs and HNWs on their region of origin. In 2015, valuations during these funding have put a record amount of cap- there were roughly an equivalent rounds (i.e., venture investors are ital to work for US-based life number of life science organiza- paying more money for owner- science companies. Chinese VC tions raising capital in the US vs. ship stakes than before). investment into US biotech com- the EU. However, the US fi nanc- The US has historically been panies in the fi rst half of the year ings outpaced the EU fi nancings regarded as the most attractive surpassed the record set for the six to one when considering dol- target for life science companies whole of 2017, with these funds lars raised (see Figure 3 on page seeking to raise capital via the participating in investment 49). This is a function of a num- public equity markets. Over the rounds in US biotech companies ber of factors, including: last four and a half years, 225 life worth $5.1 billion so far (see 1. There is less institutional Figure 2). We believe that these capital available to emerging life Continued on Page 49 AUGUST 2018 PHARMACEUTICAL EXECUTIVE Dealmaking 33 WWW.PHARMEXEC.COM

The Pulse of Biopharma M&A

Promise, cautions in life sciences and renal assets. The top-fi ve areas for licensing dealmaking spotlighted include immuno-oncology, CAR-T cell therapy, CRISPR/Cas9, microbiome, and cancer vaccines. By Michelle Maskaly Red fl ags &A-driven dealmaking in 2018 across the There are some trends that Patel says leaders do need biopharmaceutical industry is on track to to be cautious about. “In addition to the greater sur- becoming the second highest of the decade. plus in oncology assets, we also saw that it is becom- M “There’s been a signifi cant increase in ing much harder to close deals,” he says. “The over- private fi nancing, principally driven by Series A fi - all deal conversion rate fell to 1.9% in 2017 from the nancing, which tells us that new company formation more typical 5% range. This was especially the case has accelerated in the last four to fi ve years,” says at later stages of the deal, after progression to CDA, Neel Patel, managing director, commercial strategy with lower conversions to term sheet—a warning to and planning, at Syneos Health Consulting, and sellers to be vigilant and responsive until the deal is co-author of the 2018 Dealmakers’ Intention Study. actually signed.” The report also showed a greater Released in June at the BIO International Convention parity in the discount rate between buyer and sell- in Boston, the study, now in its 10th year, showed a er—both at 17% compared to the 4% that was seen mostly healthy landscape for prospective buyers and in 2017. “This could suggest an increase in partner- sellers, with Patel noting, “dealmaking in the life ships as opposed to outright acquisitions—again, an sciences is continuing an unprecedented run.” indication that buyers are looking to structure deals “Licensing and M&A will likely experience a where the sellers participate in some of the risk, and signifi cant increase in activity as US tax reform will that sellers are assigning high valuations to their increase the amount of capital buyers have available assets compared to 2017,” explains Patel. for assets/partnerships,” he says. “Private fi nancing’s bull-run will continue as life science investors have The IPO question recently closed new funds for investments and many The IPO outlook appears mixed. “The year-to-date are out actively fundraising now.” pace of IPOs indicate that 2018 fi nancing raised in the IPO market to be around the average of the fi ve- Hot spots year trend, with expected volume of just over $2.5 Oncology remains the top therapeutic area of interest billion—a relatively strong environment compared for buyers and sellers, and the supply surplus in this to historical standards,” says Patel. However, he did segment stood out in this year’s report. “Compared add, “we are also seeing a large increase in Series D+ to 2017, oncology has become a much more attrac- fi nancing, indicating that many companies are opt- tive, opportunistic market for buyers, suggesting that ing to stay private longer to avoid an IPO and devel- premiums could start seeing a potential decline in the op their pipeline to meaningful value infl ection coming year for products that are not highly differ- points or commercialize themselves.” entiated,” says Patel. He explains that larger companies have narrowed Retrospective their focus, and fewer are fully focused on oncology. With 10 years of data to look back on, Patel is able to “For sellers, this means they have to be very mindful take an extensive look at the dealmaking landscape about differentiating their asset and making sure the and draw some solid conclusions. “One of the most core mechanics of commercial success are being con- interesting changes we’ve seen in the study over time sidered—things like patient population targeting, has been the increased fragmentation in the industry, MICHELLE MASKALY making sure you can demonstrate that stakeholders’ with more and more smaller companies holding onto is Pharm Exec’s Senior most important unmet needs are being addressed assets longer or even ‘going it alone’ to commercialize Editor. She can be with the data you are generating and that you’re not assets themselves,” he says. “In large part, this is reached at michelle. just another “me too” in the marketplace,” says Patel. thanks to the robust fi nancing environment and the [email protected] and According to the report, other areas of high de- exponential increase in fi nancing options available to on Twitter at mand include hematology, respiratory/pulmonary, emerging companies.” @mmaskaly

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PHARMA FOOTS THE BILL

While Portugal exited its bailout programme in May 2014 without the need for a new fi nancial package, government austerity measures curbed pharmaceutical reimbursement, and pharmaceutical companies made a display of solidarity. The executive director of APIFARMA, the Portuguese indus- try association for innovative medicine companies, Heitor Costa, explains how pharmaceutical companies collaborated Adalberto Campos Fernandes, minister of health; Manuel Heitor, with the government by agreeing to a market cap, and they minister of science, technology and higher education; Heitor Costa, executive director, Apifarma now intend to regain their former position: “Following the crisis, Troika’s restrictions sought to downsize the market. However, since Portugal exited Troika, we no longer battle MNCs have effectively withdrawn from Portugal to establish with these measures. The testament to our long history of co- Iberian headquarters across the border in Madrid, Spain. Nel- operation with government and stakeholders was made clear son Pires, general manager for Portugal, the UK, and Ireland at in 2016, upon signing on an agreement that no longer fea- Jaba Recordati, explains “the ‘Iberianization’ of Portugal is a tures a cap. The agreement established rational market devel- serious risk which undermines the relevance of the Portuguese opments, and as such, we pay a contribution to the system’s market for European affi liates.” Salvador Lopez, general man- sustainability – similar to a tax – and for the past two years, ager of Mundipharma, comments that “In 2014, Mundipharma we have seen steady growth.” confronted a challenging market that had been heavily impacted Nonetheless, following the crisis, several companies found by the Troika economic crisis; the healthcare system, in particu- managing an affi liate in Lisbon a Sisyphean task in the face of lar, faced many constraints.” the government’s decision to cut pharmaceutical costs. Of the Numerous commentators agree that Portugal’s economic Top 100 pharmaceutical companies in Portugal, over 15 pharma revival is yet to impact the pharmaceutical industry. Antonio

S3 August 2018 I PHARMABOARDROOM.COM SPECIAL SPONSORED SECTION HEALTHCARE & LIFE SCIENCES REVIEW PORTUGAL

Leão, general manager for Lilly, acknowledges that although the outlook is promising, there is still much to be done. “The total market is worth roughly EUR 2.9 billion (USD 3.4 billion), and if we look back to the crisis period, the retail market was severely hit and lost approximately a third of its total value. Only now is it starting to regain some of what has been lost.”

THE TROIKA EFFECT Nelson Pires, general manager, Jaba Recordati; Antonio Leão, country manager, Lilly; Antonio Cabral, general manager, Medicinalia Cormedica The brunt of this economic impact was not confi ned to the pharmaceutical sphere; from medical devices to contract re- search organizations (CROs), the Troika intervention sparked back-seat role. As we exit the crisis, the physicians’ gaze will a chain reaction of challenges across healthcare. Antonio once again turn to the importance of translational research Cabral, general manager of Medicinalia Cormedica, one of and clinical trials.” the most signifi cant Portuguese medical devices company, José Aranda da Silva, a key opinion leader and the fi rst notes that “We have excellent doctors, nurses and healthcare president of INFARMED in 1993 offers a balanced view: professionals but sometimes we lag behind in the delivery of “The crisis had a huge impact on the healthcare sector, and sophisticated medical devices, which is exacerbated by our re- between 2009 and 2015 Portugal experienced cuts of around cent exit from the economic diffi culties.” Maria Queiroz, CEO 30 percent. However, the country is now recovering strongly, of Eurotrials, a Portuguese homegrown CRO, comments that and the healthcare budget is beginning to grow. Unfortunate- “During the crisis, the national healthcare system and physi- ly, this success is not enough, and there is a consensus among cians felt the pressure to be 300 percent focused on patients many politicians who believe that the amount of money allo- and patient evaluations, and naturally, research efforts took a cated to healthcare needs to increase.” The debate continues

PHARMABOARDROOM.COM I August 2018 S4 HEALTHCARE & LIFE SCIENCES REVIEW PORTUGAL SPECIAL SPONSORED SECTION

While Portugal experiences a revival, challenges to the phar- maceutical industry take on many forms, from a chronically underfunded healthcare system to a rise in generic penetration, to tackling more market access hurdles than many other Medi- terranean countries could handle. As Filipa Costa, country man- ager from Janssen comments, “ If we consider the portfolio, the European medicines are generally made available in Portugal, although sadly there is a considerable delay in market access rel- José Aranda da Silva, president, health and national health ative to other European countries. The time taken from EMA service foundation; Antonio Portela, CEO, Bial; Filipa Costa, general manager, Janssen approval to access in Portugal, (granted by INFARMED), to hospitals (which have their autonomous procedures), is closer to the two-year mark than the legislated 200 days.” as pharmaceutical companies wait with baited breath to reap the rewards of their collaborative efforts from 2011 to 2015. GENERICS TO THE RESCUE Although an economic revival is underway, there is a long way to go before the pharmaceutical landscape will realize the ben- The healthcare market dynamics have shifted away from a efi t. In the meantime, Antonio Portela, the third generation of brand-oriented market, whereby healthcare professionals pre- the Portela family to manage Portugal’s leading pharmaceuti- scribed more originator drugs, leading to an increase in gener- cal company, Bial, argues that the onus is on pharmaceutical ic consumption. The share of generics has risen from 45 to 49 companies to take the initiative and drive change: “We, as an percent penetration in the past three years, and the trend looks industry, must attract venture capitalists to consider Portugal, to continue. Paulo Lilaia, the President of APOGEN, the Portu- but they will only do that if market conditions are attractive: guese Generic and Biosimilar Association and CEO for Generis, if prices, timelines, and payments are competitive on the Eu- a local generics company acquired by Aurobindo in 2017 con- ropean standing.” veys, “The generics and biosimilars role in the healthcare system

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S5 August 2018 I PHARMABOARDROOM.COM SPECIAL SPONSORED SECTION HEALTHCARE & LIFE SCIENCES REVIEW PORTUGAL is vital: if we want to treat more patients with better value-added medicines, we have to economize in other areas. Generics create the necessary room to have money for investments in new and innovative products.” João Madeira, the experienced country manager for My- lan, comments “Portugal lacks the resources to treat as many patients as needed in the right timeframe and with the right product, so we need to make more effi cient use of the avail- able resources.” In essence, prioritizing the generic medicine Paulo Lilaia, CEO, Generis; João Madeira, country manager, over the innovator following patent expiration saves money Mylan; Mario Madeira, general manager, Teva for the healthcare system. Mario Madeira, from a rival gener- ic-innovator hybrid company, Teva, agrees that “The generics Now with almost 50 percent market share, generics are one strategy paves the way for access to affordable medicines for of the cornerstones of the Portuguese pharmaceutical market’s healthcare professionals and patients.” The strategy for rising development. According to APIFARMA’s Costa, given the na- generic penetration must stay the course, however, because as ture of the healthcare system, “The more generics present in the Madeira continues: “If we open room for doubt, we will never market; the more innovations have room to develop,” especially eradicate the stigma that still purveys in some regions of the because greater generic medicine usage frees up resources to be market that says that ‘generics are not as good as branded spent on reimbursement. There is one important caveat: “The medicines.’ Although the mindset has evolved, and it is far golden rule with regards to generics is that we must respect pat- away from a total misunderstanding, today Portuguese people ents and intellectual property; this is a non-negotiable red line embrace generics, and the uptake is faster than it used to be. for APIFARMA. If intellectual property rights are respected, Today, we can confi dently say that most Portuguese patients then we allow room for innovation which is crucial to the health- are treated with a generic medicine.” care system’s success.”

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FREEING UP FUNDING biosimilars require signifi cant amounts FOR INNOVATION? of investment, they are a crucial part of generic pharmaceutical companies’ busi- For Jaba Recordati’s Pires, the solution is to “have a foot in both ness given the potential they represent.” camps; generics and innovatives, then we can represent a com- Mylan’s Madeira mirrors this view, “The plete solution to patients that requires more than just the mono- biosimilar business brings value to the therapy.” RJ Lasek, former country manager for Takeda, (now national health system so that, with the vice-president, commercial planning, and pricing) outlines his same budget, it can treat more patients ideal strategy in the face of a rising generic tide: “As a govern- RJ Lasek, country and at an earlier stage of the diseases.” head, Takeda ment partner, we want them to be able to manage the category José Aranda da Silva paints a detailed better and improve patient outcomes. Consequently, we insisted picture of the generic landscape in Portu- that the innovation we offer is priced in a way that will enhance gal: “In the beginning, it was not easy for the system and for com- the government’s overall cost per outcome. The trick is to strike panies to adapt to this change in market dynamics. Nonetheless, a balance between innovation, biosimilars (or generics), and col- most of the international companies have since entered the gener- laborate with the government. The government is open to this ics market, for example, Novartis and Pfi zer; and we should see kind of debate, and there is room for innovation.” more companies like this entering Portugal. Generics will continue The introduction of biosimilars to the market from com- to grow.” Overall, the increase in generic consumption and the panies including Mylan, Amgen, Mundipharma and Teva will arrival of biosimilars have granted the authorities the necessary reinforce efforts to allocate more resources to value-added breathing space to improve drug access, better target non-commu- medicines. APOGEN’s Lilai continues adding that “Although nicable diseases, and balance healthcare expenditure.

The Portuguese Flagbearers For local companies, the trick is to keep things simple in the face of numerous challenges and at times, high levels of bureaucracy. At Basi laboratories, a lo- cal success story led by Joaquim Matos Chaves, he often jokes that “I spend half my time insisting that people do not Sérgio Luciano, complicate procedures in Europe; if we CEO, Quilaban keep things simple and focus on the vi- sion of the product, then success is far Basi Laboratories New Facilities more likely.” Basi Laboratories recently received a EUR 40 million (USD 47 mil- Bial exemplifi es the need for Portuguese companies to lion) investment as part of Horizon 2020, create scale. Portela has “in the past fi ve years, switched which looks to “increase production turnover from 70 percent domestic, 30 percent international output from four million units to roughly to 70 percent worldwide, 30 percent Portugal.” Bluepharma, 100 million. For a small company, this is a rival manufacturing company based in Coimbra, (Portugal’s a vast increase in production.” Indeed, third city after Lisbon and Porto), also has plans to expand, Paulo Barradas Matos Chaves’s ambitious vision is “to as Paulo Barradas Rebelo, CEO looks to invest 15 million into Rebelo, CEO, bring product manufacturing in line with a new industrial unit. “Our business in Portugal is small but Bluepharma prices in Indo-China.” Intrinsic to this important because this is where we see our portfolio app and vision is an internationalization trajecto- fl ow and where we can train and learn new businesses before ry that expands from PALOPs countries (the group of Portu- exporting to larger markets.” There are opportunities to be guese-speaking African countries), to as far afi eld as “the had in Portugal, but the critical mark of a local company’s CIS, the Middle East, and French-speaking African coun- success is international expansion. tries.” Sérgio Luciano, CEO for local diagnostics company, For Basi, who has just received “the most signifi cant in- Quilaban, explains the usual route for ambitious Portuguese vestment that the pharmaceutical industry in Portugal has companies “our international expansion started by the Afri- seen in recent years, and we are the fi rst mid-cap sized Por- can Portuguese speaking countries, namely into Angola and tuguese company to receive funding from EIB,” international later on into Mozambique, Cape Verde and Guinea Bissau, expansion and “being one of the reference manufacturers of given the convenience of shared language.” choice in Europe,” is an attainable goal.

S7 August 2018 I PHARMABOARDROOM.COM ENSURING ACCESS TO In order to give access to the LIFE-SAVING MEDICATION 10 Million of Portuguese with WORLDWIDE high quality medicines, Mylan covers the most important therapeutic areas, For more than 55 years, our mission is to give access to high such as Cardiovascular, quality medicine. Our mission is Central Nervous System, grounded in our belief that every Respiratory, Infections, person in this world matters and that access to better health should Cancer, Diabetes, HIV/AIDS, be a right, not a privilege. among others.

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THE MARKET ACCESS MAZE highlights, “the authorities are always open to identifying effi cien- cy areas where costs can be optimized so that we can provide bet- In light of an increased generic market share, one would as- ter offers for unmet needs.” Madeira echoes comments made by sume that innovative companies across Portugal are reaping the Alicia Folgueira López, country manager for Portugal and Spain rewards, undoubtedly enjoying the allocation of more resourc- for up and coming rare diseases company Alnylam, “the govern- es while relishing faster approval times. In the period between ment is open to discussion and willing to implement ideas put 2016 and 2017, the Ministry of Health approved more than forward by the industry.” From the other side of the equation, the 120 innovative drugs in areas including oncology, HIV, and minister of health points out that “the government has an excel- rare diseases. Costa from APIFARMA puts this statistic into lent strategic relationship with pharmaceutical companies.” context, “the government has approved more innovative med- icines in the past two years than the combined total reached LITTLE RESPITE FOR THE WEARY during the period from 2010-2015; 60 in 2017 and 51 in 2016.” Moreover, new regulation put for- Nevertheless, as the old Portuguese adage goes, “Vai muito do ward by INFARMED – Portugal’s med- dizer ao fazer” - “There’s a long way from saying to doing.” De- icines regulator – has drastically de- spite excellent dialogue and young reforms teeing up a promise creased approval times for drugs. Under of faster approval times for medication, industry players are the direction of Maria do Ceu Mach- tentative in their reception of market access reforms for two ado, INFARMED president, SiNATS principal reasons. One, Portugal is historically a slow market (the national evaluation system for access country; and two, the timelines for the new evaluation health technologies – Portugal’s Health are not yet complete. Bial’s Portela succinctly explains, “in Por- Technology Assesement (HTA) organi- tugal, one of the consequences of the crisis is that processes Maria do Céu zation), now approves generic medica- are slow, in some cases approvals and pricing can take around Machado, president, Infarmed tions within 30 days and prescription 300 days. We as a country are improving, and I hope that this innovation within 90. Machado com- can allow patients to access medicines earlier on.” Nelson Pires ments that INFARMED is dedicated from Jaba Recordati agrees that “The new president has in- to improving Portugal’s poor reimbursement reputation and creased the number of approvals for new drugs, but we cannot seeks to bring down the 300-day average, “SiNATS was re- forget that we are still one of the slowest countries in Europe— viewed in September 2017, and the new evaluation deadlines we recently saw that the only country that is slower than Por- were established: generics would follow a 30-day deadline, tugal is Bulgaria.” Lilly’s Leão chimes in, “The new law states and new molecules would be brought to market in less than that drugs must be evaluated in 180 days, plus 30 business days 180 days.” It would appear that the authorities have respond- for contract negotiation. All in all, this adds up to a stipulated ed to the industry’s valiant displays of collaborative assistance approval period of roughly eight months. It remains to be seen and support during the crisis. the real impact of these changes” given that the reform’s im- Indeed, the dialogue is productive and welcome by both inter- plementation took place in late 2017 and features a six-month locutors, the industry, and the authorities. As Mylan’s Madeira evaluation deadline.

It begins with a promise to discover medicines that make life better.

Since 1876, we have worked tirelessly to discover medicines that make life better, finding ways to come through no matter the odds. From the development of insulin to the discovery of new treatments for mental illness, we have pioneered breakthroughs against some of the most stubborn and devastating diseases. We bring this same determination to our work today, uniting our expertise with the creativity of research partners across the globe to keep finding ways to make life better.

To find out more about our promise, visit www.lilly.pt ©2018, Eli Lilly and Company. ALL RIGHTS RESERVED.

Lilly Portugal - Produtos Farmacêuticos, Lda. Torre Ocidente, Rua Galileu Galilei, n.º 2, Piso 7, Fração A/D, 1500-392 Lisboa. Matriculada na Conservatória do Registo Comercial de Cascais, sob

o número único de matrícula e de pessoa coletiva 500165602, com o capital social de €5.134.893,07. PP-MG-PT-0005/JUL2018

S9 August 2018 I PHARMABOARDROOM.COM SPECIAL SPONSORED SECTION HEALTHCARE & LIFE SCIENCES REVIEW PORTUGAL

From specialists in diabetes to phar- allows us to learn from other markets maceutical market leaders, despite rela- and tailor our educational efforts to tive improvements and much discussion these learnings. This includes patient on the subject, no one can escape the de- identifi cation, side effect management, lays. Janssen’s Filipa Costa sheds light on and patient counseling, among others.” the depth of the situation: “sadly there For a multinational company, observing is a considerable delay in market access the approval route for faster neighboring relative to other European countries. companies for a drug can speed up pro- The time taken from EMA approval cesses for the medication post approval Salvador Lopez Orland, general manager, to access in Portugal, (granted by IN- in Portugal. Still, Ibe understands that Mundipharma; Florian Ibe, managing director, Bayer FARMED), to hospitals (which have “it is diffi cult to have less predictability their autonomous procedures), is closer on drug spend, but we argue in favor of to the two-year mark than the legislat- changing the way we think about and slow,” and for INFARMED’s Machado, ed 200 days. INFARMED’s analysis of discuss fi nancing of drugs.” “The system is incredibly complex.” new medicines is thorough, complete For those sat around the table during and provides a sound understanding of NOT ALL FADO the industry and authorities’ discussion innovative treatments. The issue is the on market access, the implementation of lack of transparency and agility on offer There are more pockets of optimism to transparency, agility and a long-term vi- during the process. The new president be found on the Westernmost European sion appear to be the logical solution. Cos- of INFARMED has made a positive im- coast. Recordati’s Pires points out: “IN- ta’s Jansenn suggests that “conversations pact in increasing transparency, however FARMED recently carried out an excel- are more accessible than email exchanges, changing a public institution does not lent inquiry that projects long-term into and dialogue catalyzes effi ciency.” More- happen overnight.” Mundipharma’s Sal- understanding the pharmaceutical in- over, Lilly’s Leão infers the result of these vador Lopez concurs; “we see fantastic dustry. It sought to understand the new improvements, “Eliminating barriers and progress in facilitating access, although molecules that will be brought into the increasing transparency would mean that we still face an uphill climb in ensuring market until 2020. Therefore, the author- our patients receive innovation at the same that more drugs are reimbursed effi cient- ities can comprehend the risk of future time as our neighboring countries across ly. The time constraints hinder progres- costs; a smart move! We welcome this Europe.” Moreover, it is, in fact, the prox- sion and stifl e innovation.” approach, as opposed to focusing on year imity of the industry to the authorities that For many pharmaceutical compa- by year solutions in healthcare.” Never- help drive forward discussion and inspire nies, delays are a source of complaint; theless, the global consensus is clear; gov- action. “The advantage in Portugal is that curiously, however, Florian Ibe, general ernment and industry agree that progress you can get to grips with the problem and manager at Bayer, explains that these and decision-making are slow. For Take- get to the root of the matter more effi cient- delays can also offer learning opportu- da’s Lasek, “The Ministry commits to ly, and new GMs, for instance, are in clos- nities: “On the positive side, the delay improving innovation, but the process is er contact with KoLs, stakeholders, and

We are a company dedicated to people. At the heart of every decision we make, we seek to improve the lives of those who need our medicines the most, with the firm purpose of leaving behind, a better health system for future generations

PHARMABOARDROOM.COM I August 2018 S10 HEALTHCARE & LIFE SCIENCES REVIEW PORTUGAL SPECIAL SPONSORED SECTION

city might not try to connect with an- more to shorten the time to the patient other city.” Antonio Cabral, from Me- of innovative drugs as they have proven dicinalia Cormedica explains further, the benefi ts for patients and the sustain- “The route to market in Portugal is ability of the health system.” quick and the population is small. One Filipe Assoreira, President, and José Al- limitation we fi nd is the diffi culty we buquerque, secretary general of P-Bio, the sometimes have to explain the cultural Biotechnology Industry Organization, have needs and particularities we face in our the last word on the matter, “in compari- Rui Ferreira Dos Santos, country manager, Almirall; João Norte, CEO, HMR Portuguese market.” son to our neighboring countries, there is a Requests for increased transparency message of hope! Despite the fi nancial crisis comes from both parties, however, as we have had all over Europe, we continue managers across the country,” observes INFARMED articulates that “the issue to have the same positive pattern showing Rui Santos, general manager for Almirall. we confront on a daily basis is the lack that this sector is moving forward.” Recor- Conversely for research operations, of visibility on pharmaceutical compa- dati’s Pires is equally optimistic, “Despite the tight-knitted and cliquey nature of nies’ pipelines before they submit their market access diffi culties, price squeezing the pharmaceutical market can create dossiers. If we had eyes on these strate- and the increase in generics, we can still diffi culties sprouting from regionalism. gies, we would be able to better prepare bring added value to the market through João Norte, CEO for HMR, a budding for the arrival of these drugs. We must our high-quality products.” With market homegrown market research special- strive for collaboration between com- access reforms soon to bear fruit, produc- ist articulates, “minor regionalism is a panies and governments.” Moving for- tive debate around the table and a strong small geographical barrier, and Portu- ward, Mundipharma’s Lopez underlines sense of collaboration following years of gal is so centralized that at times, the the need for collaboration: “We – au- solidarity, the Portuguese pharmaceutical excellent research located in one specifi c thorities and industry – should partner landscape is turning the page.

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PILOT PORTUGAL

Traditionally, Portugal has a reputation for being an inno- vator and a worldwide fi rst mover. One of the fi rst Western European countries to make e-prescriptions mandatory in 2011, the second country worldwide after Canada to intro- duce an HTA (SiNATS), and in 2001, in the face of a heroin crisis, Portugal became the fi rst country worldwide to treat possession of small quantities of drugs as a public health is- Filipe Assoreira, president, P-bio; José Albuquerque, secretary sue, as opposed to a criminal matter. This creative and out- general, P-bio; Ana Teresa Lehmann, secretary of state for industry of-the-box thinking nature manifests itself in the life sciences, where Portugal is the benchmark for healthcare digitalization in Southern Europe, and both the talent pool and the infra- Big Pharma must foster safe practices and welcome the right structure combine to create an attractive setting for the trial innovation, “The Portuguese population is eager for innova- of new ideas in a controlled, well-prepared environment, that tion, and as part of the European Union, and given our size has adequate tools and fl exibility to fi nd solutions. and expertise in science, we are a safe environment for new The industry and government alike have cottoned onto Por- practices and innovation.” Baxter’s Paias notes that “the Por- tugal’s potential to be Europe’s laboratory, as Ana Teresa Leh- tuguese have built up a reputation for being a country where man, secretary of state for health explains: “We are a small fading ideas are given new life.” country, but we are highly-developed and ready for new tech- Not only are pharmaceutical multinationals alert to Por- nology; indeed, we are a fertile ground for experimentation and tugal’s potential to become the yardstick for operations else- a test-bed for tomorrow’s technology. Our crucial policy is to where, but market research and digital health IT companies prioritize innovation through experimentation which will drive confi rm the concept. HMR’s João Norte comments that “As growth across the industry.” Moreover, for Novartis country we are exposed to more and more countries in Europe, we president, Cristina Campos, “Novartis has the right ecosystem in Portugal for trying new models and approaches.” A fellow fi rst-time country manager Alnylam’s López points out that “In Portugal, the system is incredibly centralized where- as Spain is renowned for its decentralized processes. Portugal is an exciting country to develop commercially because it is well organized in reference centers.” Janssen’s Costa justifi es that “more and more companies begin to see the value of testing out new and digital ideas because of the mitigated risk associated with our relative size and expertise in complex fi elds,” and fi nal- ly, Filipe Paias, general manager for Baxter agrees, “Portugal is a fantastic pilot country. The way that we overcome these chal- lenges can be the benchmark for bigger countries. We can there- fore test and mitigate part of the solution in Portugal, a smaller market, before translation to larger economies.” HANDLE WITH CARE

Despite this situation, for Mylan’s Madeira it is this idea of mitigating the risk that could be harmful to Portugal’s future. “There are two schools of thought pertaining to Portugal’s perception as a testbed or pilot country. The wrong one is to consider and insinuate that we can test anything in Portu- gal at low risk because the patient pool and mechanisms in place in Portugal allow for fewer patients to suffer. We must avoid treating or thinking of Portugal as a crash test dummy because Portugal is one of the fastest growing economies in the mature European marketplace.” Filipe Novais, country manager for Astellas, bolsters the argument explaining that

PHARMABOARDROOM.COM I August 2018 S12 HEALTHCARE & LIFE SCIENCES REVIEW PORTUGAL SPECIAL SPONSORED SECTION

become more aware that Portugal has an excellent base for the translation of Introducing Alnylam: A rare diseases authority ideas. We have a unique national health- care system that is universal, free and Alnylam, pioneers in the RNA interfer- ence fi eld, seek to bring their revolu- crucially, heavily digitalized.” tionary medicine across Europe, and in GOING DIGITAL particular, Portugal before 2020. The affi liate is only a year old, how has the Filipe Paias, Similar to many Western Economies, global vision trickled down into Portugal? general manager, Portugal is attempting to embrace dig- I was the fi rst Iberian employee for Baxter Alicia Folgueira Spain and Portugal, and we began from italization in healthcare, but unlike Eu- López, country scratch – without an offi ce or employees— rope’s Big Five which struggle due to huge manager, Alnylam it was an adventure, and it continues to be populations and decentralized systems, so. We now have nine employees with at thanks to Portugal’s size and tech-savvy least double fi gures by the end of 2018. population, industry players and author- ities have found success in implementing What is the signifi cance of Portugal for Alnylam? nationwide digital projects. Portugal will be at the center of the strategy globally— Portugal is making a noble effort to the eye of the hurricane—because it is the most common country worldwide for ADD disease. There are fi ve times the remove paper, effectively entirely digi- number of patients in Spain for the same condition. tizing the healthcare system. As many Filipe Novais, as 92 percent of patients leave a med- How does Alnylam observe the environment for diagnosis? country manager, Astellas ical appointment without a paper pre- Diagnosis is always a challenge, and as a stakeholder scription, and as HMR’s João Norte in the rare diseases community we must improve the diag- goes on to say: “we benefi t from a high nostic process and reduce the time to diagnosis. The most important day in the life of a registered patient is the day that the patient fi nally understands what disease he or she suffers from.

level of digitalization in the country; we can be a hub for Europe to create real-world evidence.” The Ministry of Health employs a dedicated team to roll- out tech services in healthcare. Henrique Martins, CEO of SPMS, (the Ministry of Health’s Shared Services organiza- tion), explains “Portugal is unique in Europe as it has elec- tronic health records designed by the government in primary care and hospitals. The software hospitals use for most func- tions (admitting a patient, documentation, discharge) are pro- duced by SPMS’s team.” Joaquim Cunha, executive director for Health Cluster Portugal, a private, non-profi t organization dedicated to the consolidation of Portugal’s healthcare industry, says that “the intelligent use of ICT is one of the most powerful and effi cient answers to some of the major challenges we have ahead in health research, management, and treatment.” LEADING BY E-XAMPLE

Portugal has hosted the international Web Summit since 2016, a technology conference attended by 60,000 CEOs, founders of tech startups and stakeholders working in the global technol- ogy and related industries. And in 2018, Lisbon’s Altice Are- na also hosted the second eHealth summit, focusing on digital

S13 August 2018 I PHARMABOARDROOM.COM SPECIAL SPONSORED SECTION HEALTHCARE & LIFE SCIENCES REVIEW PORTUGAL transformation in healthcare. Direct consequences of interna- tional infl uence in tech ventures are easy to spot; the country is teeming with healthcare startups and has seen the number of life sciences startups triple between 2008 to 2015 according to Labiotech’s calucations. The minister of health comments that “we are now living in an age where digitalization, Big Data, the democratization of in- formation and instant access offers enormous opportunities in healthcare, whether it be in patient safety, scientifi c activity or Henrique Martins, CEO, SPMS; Joaquim Cunha, executive director, Health Cluster; Maria João Queiroz, global CEO, in innovation.” The minister for science, technology and higher Eurotrials education equally features digitalization as a priority, “we seek to promote digital skills. In all areas of the economy and society, and especially within the health sector, we have launched a na- SOURCING TALENT: tional initiative to foster digital skills, INCoDe2030.” ROUND PEGS IN ROUND HOLES Private industry will both benefi t and improve upon gains in the digital health world. For Cerner’s Jorge Sequeira, Por- Not only are the Portuguese future-focused, embracing digi- tugal is the perfect place to introduce the “next generation tal technology across the nation, but they are well-prepared, of EMR (electronic medical records), to the market.” Plus, well-qualifi ed, “and as an added value, the Portuguese speak “From clinical stakeholders to software engineers, we observe fl uent English” says Eurotrials’ Queiroz. Foreign general a strong will to make progress, and a trend for high adoption managers are keen to highlight the Portuguese work ethic, rates of new technology from the Portuguese population. In- RJ Lasek from Takeda comments that the Portuguese “are deed, the Portuguese are renowned for being tech-focused, for ‘buttoned-up’ in that they are focused, professional, and example, if we consider the new generation of nursing where- committed. They see the importance of their job and the by professionals seek fast adoption of technology.” earnest responsibility it entails.”

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Local Portuguese pharmaceutical executives comment lapse, and qualifi ed unemployment will on the strength of human prowess in their affi liates: No- start to rise.” The Minister of Science vartis’ Campos comments that: “Novartis Portugal is also and Technology gives credence to this seen globally as a talent machine; we export many talents idea that Portugal needs more invest- and even the talents and capabilities that are not exported ment to create work: “We need (more) often contribute to projects beyond Portugal.” Lilly’s Leão, serious science-based business activities a fellow Portuguese, confi rms the Portuguese prowess “We which create the necessary institutional may not have as much money as the big fi ve, but when you context so that our people do not per- consider (the people’s) fl exibility, resilience, creativity, and Cristina Campos, form hard work in low-value jobs, and CPO Head and overall capabilities, the Portuguese affi liate is an attractive Country President, instead, they combine their hard-work and growth-oriented affi liate.” Novartis with value-added activities.” The challenge in managing such a qualifi ed talent pool in Fortunately, the pharmaceutical a low salaried country is unavoidable. Health Cluster Portu- companies, many of which are based in gal’s Cunha comments that “There are 600+ graduates every the Lagoas Park Business Center in Western Lisbon act as a year with a PhD in areas related to health and life sciences, magnet for young professionals. They regularly win awards, which is a signifi cant amount when you look at the small pop- and offer extra perks, development opportunities, fl exi- ulation of Portugal,” there is a sincere need to attract talent ble working hours and locations to name but a few reasons among pharmaceutical companies and mitigate the risk of why they dominate the ‘Best Workplaces in Portugal, 2018’. a brain drain. He continues “if we do not fi nd occupations Lopez’s Mundipharma affi liate took the Number One spot for these graduates in the companies (traditionally they were leading the national ranking among all categories, and nine oriented to the public sector), then the R&D system will col- healthcare and life sciences companies featured in the rank- ing, higher than any other industry. Playground for GMs THE NEXT CHAPTER… In light of challenges centered around market access hur- Jaba Recordati’s Pires joins the dots on Portugal’s current offer- dles, bureaucracy, delays and underfunding, Portugal acts ing: “We have excellent human resources coming through, and as a captivating career destination for pharmaceutical exec- the new generation is quite prepared. I read recently that we have utives looking to carve out their country managing career. Rui the second country in Europe with MOST PhDs in Europe. We Santos, an experienced, Portuguese manager for Almirall, have great fi scal policies for investors looking to move to Portu- explains that “exposure to these challenges is a fantastic gal. We are one of the most developed IT societies in Europe.” learning platform for a new GM, as although the structure is Combined with Mylan’s Madeira claim that “we are people that refl ective of big countries, one can familiarize oneself more are happy to challenge the status quo,” Portugal has turned its easily, get to know the ropes and develop, nurturing skills to small size into its strength – as the ideal benchmark for pharma- further one’s career in perhaps a bigger market.” For Bayer’s Florian Ibe who relishes the challenge in Por- ceutical processes and a creative testing ground, as Baxter’s Paias tugal, “The size and relative importance of the country is points out, “the Portuguese have built up a reputation for being perfect for a fi rst-time general manager to embark on their the country where fading ideas are given new life.” career,” and for Janssen’s Filipa Costa, “the scale and scope The country has turned its extreme location on the West- of the Portuguese market make the country attractive to try ernmost border of Europe into an international developmen- new ideas, especially for fi rst time general managers. Portu- tal advantage, Portugal has leveraged an increase in generic gal offers tremendous market access challenges which act penetration to prioritize the better provision of innovation as a learning curve for career development. As mentioned, medicine, and it has channeled its tradition of curiosity, the market is tricky to navigate but that can be a strength audacity and human resources capacity into digital trans- for developing one’s career and one’s resilience.” Indeed, formation. The one remaining challenge in achieving its po- for fi rst time general managers, Portugal’s market access tential is “an acute need to tone down the levels of bureau- environment can be the perfect learning platform. Jaba Recordati’s Pires jokes that “If you can succeed in cracy and embrace a more practical, streamlined system,” in Portugal, you have proved that you can manage the unex- healthcare, according to Mundipharma’s Lopez. Nonethe- pected and therefore can succeed anywhere!” Santos takes less, “the market in Portugal offers tremendous potential for it one step further demonstrating that “Starting a career in rapid and sustainable growth. The affi liate in Portugal is one Portugal is a faster learning curve,” but because being a gen- of the fastest growing in Europe.’ Janssen’s Costa concludes, eral manager in Portugal involves “living in a warm country “The country has the capability, the workforce and the in- with excellent food, wine and a fantastic quality of life, I must frastructure to excel. However, the country is certainly not warn that these new managers may fi nd it hard to leave!” capturing its full potential.”

S15 August 2018 I PHARMABOARDROOM.COM AUGUST 2018 PHARMACEUTICAL EXECUTIVE Globalization 49 WWW.PHARMEXEC.COM

Continued from Page 32 science fi rms have executed suc- cessful initial public offerings (IPOs) on the two major US ex- changes, NASDAQ and NYSE (see Figure 4). We are experiencing a record number of life science IPOs, with 13 completed, raising an aggregate of $3.8 billion in capital in June alone and an addi- tional eight actively in the queue. Outside the US, exchanges Figure 3. In 2015, the number of companies and dollars raised involving life are less attractive for emerging sciences private fi nancings. life science companies, with few- er active investors and a less liq- uid market available to support these high-risk companies. Con- sidering this, it has not been un- common for high-quality non- US-based companies to target a US listing. From 2014 through July 2018, 37 or 16% of all US IPOs have involved companies based outside of the US. The inverse of the trend above (i.e., US companies seek- ing a listing on non-US ex- changes) is by and large non-existent. From 2014 to July 2018, just six of the 166 Figure 4. US life science IPOs by company region of origin (2014 to 2018). life science IPOs that took place on non-US exchanges in- 21 life science IPOs completed additional four companies al- volved US-based companies. Of on the exchange over the last ready eyeing the exchange. these, four of the listings tar- four and a half years. Recently, Momentum and migration Outside the US, exchanges are less It is an exciting time for the life sciences industry, with record attractive for emerging life science capital fl ows across private and companies, with fewer active investors public markets attributed to a myriad of attractive, novel com- and a less liquid market available panies and the migration of alter- native sources of capital into the geted the London Stock Ex- however, the Hong Kong Stock field. We expect that recent change (LSE), another highly Exchange has lifted its strin- cross-border funding trends, par- regarded stock exchange that gent IPO listing requirements ticularly China investments in US in 2014 was predicted to have in an effort to attract more biotech, will continue to experi- a renaissance of biotech IPO companies and open access to ence positive momentum as sci- listings after Circassia, a UK- the vast amounts of capital in entifi c breakthroughs continue to JAMES LEECH is a based allergy company, raised Asia. This change in policy has take place on a global scale and Senior Associate and $330 million in an IPO on the already created results, with investors seek to participate in Transaction Advisory exchange. These predictions Ascletis achieving a successful their potential success, regardless Expert at Back Bay Life have gone unfulfi lled, with just listing. There are reports of an of their origin. Science Advisors 50 Back Page PHARMACEUTICAL EXECUTIVE AUGUST 2018 WWW.PHARMEXEC.COM

Fixing the fl awed Traditional Scientifi c search process The ineffi ciencies of today’s search processes limit the ability of life Search is Broken science organizations to increase Using AI to revolutionize research ineffi ciency productivity, speed product time to market, or fi nd hidden nuggets of ccording to market re- tured formats that are diffi cult to valuable data. These companies search fi rm IDC, knowl- search and analyze using tradi- could hire or train new informa- edge workers spend tional manual methods. By lever- tion experts, though it’s an expen- A almost nine hours each aging artifi cial intelligence (AI)- sive and time-consuming option. week searching for information based technologies such as Alternatively, organizations could needed for their work. This in- natural language processing empower end-users and equip cludes scientists searching for (NLP), users can more easily them with more effective self-ser- knowledge to advance the de- search through unstructured text vice AI-powered search tools that velopment of new drugs, or help sources and fi nd high value, rele- deliver quick and reliable answers identify life-preserving gene ther- vant results. to their searches. An intuitive inter- apies, or ensure compliance with face that provides access to power- the latest regulatory rules. While Technical experts vs. ful NLP algorithms and results some scientists may have strate- self-service queries would allow end-users to use on- gies to manage wading through Typically, NLP searches require tologies and fi nd, for example, the mountains of documents to fi nd the expertise of technical users to key relationships in text that are relevant insights, imagine how build the queries and extract data critical to differentiating between much more productive they insights. While this method can a search for drugs that treat hyper- could be if their searches were yield excellent results, the techni- tension versus drugs that cause less time-consuming, more effi - cal experts within many organi- hypertension. The technical experts cient, and cost-effective. zations are stretched very thin would then have more time to con- Over the past few decades, the and unable to quickly address the centrate on developing the more amount of available life science needs of end-users. This means complex, time-consuming searches. and healthcare information has end-users have to resort to their To make the most positive im- grown dramatically, paralleling own searches using standard pact, self-service AI-based search the vast proliferation of search engines. applications must be intuitive and high-throughput biology, digital Basic search engines, however, easy to use and have the ability to technologies, and online journals. are not well-suited for scientifi c query unstructured text from a Both life sciences and healthcare searches. Many lack comprehen- broad set of knowledge resources. sectors encourage the sharing of sive ontologies for key domain The tools must also deliver an- scientifi c knowledge and collabo- concepts, and don’t offer NLP- swers—and not just documents— ration among researchers. Every based pattern matching capabil- and provide deep insights from a year, millions of new documents ities to effectively surface key single search. are published in the form of aca- relationships between scientifi c The use of AI technologies in demic research, patent applica- concepts. Users often end up with end-user applications is growing tions, clinical trial fi ndings, and results that fail to provide direct in retail, banking, travel, and oth- more. The sheer volume of avail- answers to specifi c questions. In- er sectors. But until now, life sci- able data can be overwhelming, stead they receive long lists of ences organizations have lacked even for scientists with very nar- hyperlinks to full documents adequate self-service AI-tools to row fi elds of study. with few details about what each facilitate effective searches more Scientists often struggle to document provides in terms of broadly across their research fi nd the answers they need, de- relevant content. Scientists must teams. By addressing this gap, life spite the vast amount of available spend additional hours reading science companies have the oppor- JANE Z. REED is Head data. Part of the challenge is the through pages and pages of doc- tunity to spend less time searching of Life Science Strategy, fact that as much as 80% of in- uments that may or may not pro- and more time advancing their Linguamatics formation is stored in unstruc- vide the answers they’re seeking. organizational goals. PharmExec.com

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It isn’t in our nature to seek the limelight or to sing our own praises. But when you turn 50, well, that’s something pretty special. We don’t want to celebrate alone though, because we know the real power comes from pioneering together. To all of those who share our passion for protecting people and are inspired by science and medical discovery, a heart felt thank you for joining us on our first 50 years of pioneering together!

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