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THE 2010 GUIDE TO EMERGING MARKETS AND TECHNOLOGY From the publishers of BioWorld® Today BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE The Future of Biotech: The 2010 Guide to Emerging Markets and Technology Copyright 2009BioWorld®AHC Media LLC3525 Piedmont RoadBuilding Six, Suite 400Atlanta, GA 30305 U.S.A.
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Phone: 404-262-5439Fax: 404-262-5510E-mail: [email protected]: www.bioworld.com BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE TABLE OF CONTENTS FOREWORD
The Future of Biotech.7
CHAPTER 1
DEFINING THE BIOTECH INDUSTRY
We Need Uniforms to Tell Who Is Who in the Changing Biotech World.9
CHAPTER 2
FINANCING: BIOTECH AND FUNDING MODELS
How Hedge Funds and New Research Models Are Changing the Rules.14
Are Biotechs Built to Prosper or Are They Built to be Sold?.17
How Biotech Can Make Even Cash Look Bad.19
Investments in Biofuels Take Dive in 2007, Greentech Grows.21
CHAPTER 3
PERSPECTIVES: INSIGHTS ON THE TOP ISSUES
Abigail Ruling Shows Feds More Concerned with Procedure than Progress.25
This Century's First Civil Rights Bill: The Privatization of Personalized
Pharma: Seven Steps To 2020.29Immigration, Education and Respect for Science: Where Is the Biotechnology in Africa: Why the Controversy?.36 CHAPTER 4
FROM THE BENCH: SCIENTIFIC BREAKTHROUGHS AND MARKET IMPACT
New Mechanisms of Action Promising for Type II Diabetes.40
Combination Drug Approach Aimed at Cancer's Network.43
Discovery of Toxic Element in AD Forces Paradigm Shift.46
Antibiotics for Resistant Bugs Possible in Two Years' Time.48
Enormous New Gene Holds Out Hope as Therapy for Eye Disease.49
BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE CHAPTER 5
NEWCO NEWS: COMPANIES TO WATCH
ACT's Business Model Aims for Steady Stream of Cancer Drugs.53
Q Therapeutics Seeks to Repair Rather than Replace Neurons.55
Dicerna Offers New Generation of RNAi Therapy: DsiRNA.56
Zafgen Shrinks Fat by Inhibiting Angiogenesis in Adipose Cells.58
CHAPTER 6
PARTNERING IN BIOTECH AND PHARMA
The Impact of Big Pharma on the BioPartnering Industry.61
Partnering Execs Give Perspective on Current and Future Trends.63
SPECIAL BONUS SECTION
The Top 25 Biotech Drugs.69
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Donald R. JohnstonSenior Vice President/Group Publisher BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE We Need Uniforms to Tell Who Is Who in the Changing Biotech World At BioWorld's daily news meetings, as we peruse the latest developments in the life
sciences field, from new financings to clinical results to regulatory developments, a
common question our staff raises about these companies is, "Are they one of ours?"
people. Not that we have anything against phar- BioWorld Today Managing Editor maceutical companies. If you browse through ourarchives you'll find thousands of articles where There was a time not long ago when the players they've been mentioned, quoted, and even fea- in the life sciences game didn't need uniforms. We tured. But to us, biotech is our first true love.
all knew that big pharma wore the suits and went At our daily news meetings, as we peruse the lat- to work in giant towers of steel and glass, or mas- est developments in the life sciences field, from sive campuses with lawns manicured nicer than new financings to clinical results to regulatory the elite golf courses to which they belonged.
developments, a common question our staff raises And we instantly recognized the biotechnology about these companies is, "Are they one of ours?" bunch. They didn't dress as well, and their offices Sometimes the debate centers around whether a were down a rung or two, maybe just down the street company is a biotech or a specialty pharma or a from a great little Thai restaurant, and not too far tools company carving out a market niche and from one of those dry cleaner/Nails ‘R' Us/Dollar influencing the field. The verdict from our news Store shopping centers. Or maybe they worked in crew usually leans toward inclusion, but perhaps the far corner of a 1950s university lab with old dou- not with the enthusiasm we might display for a ble-hung windows and a creaky ceiling fan.
true bio company that actually does the splicing At least that was our romantic view of the biotech- and dicing. In honesty, we have the same discus- nology industry. Despite the popular image of sions about tools companies. Are they biotech, journalists as a hardened, cynical lot, we all have a pharma, or do they cross that divide? romantic streak running through us.
Obviously, this is because we've carved out our So many in the bio business have hung onto the own niche in the biotech space. But we've also romantic notion that biotech, for the most part, is grown up with the industry. As BioWorld neared made up of the little guys with the Avis complex — its 1990 launch date, Amgen Inc. had product rev- they're smaller, but they try harder. They're the ones enues of $400 million — not an unimpressive with the brains who take the gambles, splicing and accomplishment, even today. But for just the third dicing molecules and proteins on their way to discov- quarter of 2008 it reported product sales of $3.78 ering things that heal and save lives. Even their fail- ures can be applauded because they advance the As biotech has grown up quickly, and continues to overall cause, often leading to success down the road.
grow, our internal discussion of what's important Biotechs Still ‘Our' People
to our readers gets more complicated. Dried uppipelines of pharmaceutical companies have natu- Here at BioWorld, they were, and still are, "our" rally led them to the doorstep of biotech compa- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE nies. Checkbook in hand, they're paying tremen- you — how you would define biotech and if there dous prices for compounds that might deliver to is a difference between the biotech and big phar- them the next Lipitor. As the low-hanging fruit ma sectors. You answered, and provided some gets picked first, the interest spreads to less great responses.
advanced products. In a survey that accompanied the article, we Gradually, some of our old bio favorites, both queried you about how you define biotechnology products and entire companies, are being swal- today, and the differences between biotech and lowed by big pharma.
the pharmaceutical industry. Your input mostly fellinto four areas that we'll call "Science," "Size The pharmaceutical industry also is catching onto Matters," "Difference, What Difference?" and the fact that biologics don't face the same gener- ics problems as the Lipitors of the world. The off-patent generics threat — which may cause Pfizer Many of the "Science" answers were wonderful Inc. annualized losses of more than $19 billion by textbook material, seemingly from those well root- 2014 —apparently isn't nearly as scary, even with ed in science. They were clear, to the point, objec- a Democratic Congress nudging the FDA in the tive, and unencumbered by emotion. I envision direction of bioequivalents.
these as coming from the R&D crowd. Someexamples from this group on how to define Blurring Biotech and Pharma
biotechnology today: Thus, the line between biotech and big pharma • "The discovery and application of innovations blurs. Aside from mergers and acquisitions, phar- to problems involving biology." maceutical companies are starting their own initia-tives. Pfizer pledged to spend $50 million for a • "Engineering biologically active molecules that San Diego incubator; Lilly spent $560 million to are not obtainable by standard organic chemistry expand its biotech operation; and Roche in late (e.g., small chemical molecules)." 2007 announced it would plow $255 million into • "Work at the genomic level, i.e., DNA, protein." expanding its biotech research and development(noting proudly that already 45 percent of rev- • "The use of the tools of molecular biology to enues of its pharma division come from bio drugs).
develop a view of the molecular basis of disease as In the interest of advancing the cause of biotech- well as to create therapeutic or diagnostic products nology, that's wonderful. The cash infusion is to aid in the diagnosis or amelioration of disease." something the field obviously needs. But the prob- • "The use of molecular techniques to under- lem is, how does anyone with an interest in the stand biologic processes to discover and develop biotech field keep track of what's becoming an new pharmaceutical agents." overwhelming array of development efforts? TheBiotechnology Industry Organization counted Size Matters
more than 1,400 biotech companies as of 2005.
So it's pure science, a matter of small molecules Add in the pharmaceutical companies that are vs. large molecules? It's big vs. small alright, said making moves in biotech and the total grows the "Size Matters" group, but they're talking about exponentially. "Our" companies are now becom- company size. Here are some of their thoughts: ing "their" companies.
• "I think it's no longer a technology distinction.
Defining Who Is Who in Biotech
People seem to think of smaller, more entrepre- In a BioWorld Perspectives column in early neurial companies as ‘biotech' whether they're 2008, we asked the real experts — readers like actually biotech or pharma, and vice versa." BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE • "Still a size difference. Will I ever consider some important ways better. Their comments: Genentech or Amgen [as] a pharma? Probably not.
• "Even though both parties practice the other's But more because of their history than true differ- game (Pfizer funds Goodman's biotech institute; ences from pharma (which are getting smaller all Genentech or Amgen compete in the large phar- the time as both sides move towards each other)." ma world), biotech connotes a nimble, data-driven • "The bulk of biotech [companies] are smaller and perhaps less risk averse organization than and devote more effort to novel solutions — and pharma — often because biotech is carrying less they make less money." ‘fixed costs and baggage.'" • "[The difference is] as much a function of a • "I think that too many people in pharma don't company's size, management structure and how it understand the biological, physiological and med- is funded. ‘Biotechnology' is often short-hand for ical implications of most disorders. Pharma is pop- either VC or small post-IPO loss, making R&D ulated by medicinal chemists. They can beat a companies that have no revenues or rely on a big problem to death, but don't know what the prob- pharma partner to market their product(s)." lems are. Most management positions are medici-nal chemists." But there also was a substantial contingent whosaw little if any difference between big pharma • "Pharma companies have too many manage- and biotech. Witness comments from the rial levels, no entrepreneur spirit and biotech "Difference, What Difference?" group: companies are just the opposite: innovative andproductive." • "Excepting the fact that some biotech compa- nies are still looking for mergers and money, the • "Biotech companies take more calculated risks differences disappear and it seems that only a few and develop more novel therapies or drug delivery original biotech companies remain on the market.
systems than most pharmaceutical companies." Many of them will just disappear without leaving a • "Biotech companies retain a spirit which allows fingerprint and many others will be acquired by them to work on the more complex problems of the big pharma players where biotech is ‘only' a molecular medicine." Differences or not, I suppose both sides can agree • "Biotechnology still to me means ‘biologically with one writer: "Eventually they serve the same pur- derived drugs' rather than what it mainly encom- pose — improve human life with artificial designs." passes — start-up or ‘small' pharma companies,using ‘biology' to get small molecules or develop Emerging Markets for Biotech
platform technologies, etc. I think the descriptorbecame blurred about 15 years ago, driven by fin- BioWorld readers also provided insight into which anciers. Many (most) companies bridge all areas; countries and regions outside the U.S. will most e.g., you can have a drug discovery company affect the biotech industry in the next five years.
which uses RNA biological assays to discover small India was the winner, followed closely by China.
molecules! So at one end biotech is just biologicals Other notables getting votes included Brazil, (or applications of it), at the other biotech is just Singapore, South Korea and Japan. The reasons? another word for small pharma." Most readers said the booms would be due to thelower costs in those countries.
Nimble, Less Risk Averse
Trends Driving the Market
And finally come the "Culturalists," those whodespite the realities of modern business needs hold We also asked you to provide input on what trends on to the idea that biotech is different, and in will drive the biotech market through the next 10 BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE years. The front-runner was, hands-down, person- scribers, called the BioWorld Today Midday alized medicine, including combination diagnostic- Report. It's a daily e-mail sent to BioWorld Today therapeutic products. The next biggest trend was subscribers every afternoon featuring a preview of expected to be consolidation, in particular, more the articles currently being worked on by our busi- mergers between biotechs and big pharma.
ness and science reporters worldwide, focusing onthe companies — including your partners and Affordable health care and making biopharmaceu- competitors — making headlines today. It's the ticals competitive so that health insurance compa- perfect "tip-off" identifying which news is about to nies can afford them also are on readers' radars.
break big and what you should pay attention to Rounding up the most important issues were: pro- tein therapeutics, biosimilars, stem cells, aging, • Biofuels – BioWorld recently published its sec- biofuels and bioplastics.
ond report on the biofuels industry, Biofuels What You Asked for
Report 2008: Economics of a Driven Market.
This report provides you with an in-depth under- The last question on the survey asked about the standing of the emerging biofuels industry which types of biotech news you would find most useful.
has quickly placed itself at the forefront of many You said you were looking for more coverage of government initiatives and spans across many ver- Europe and Asia-Pacific, science news, biofuels, tical markets: biotechnology, auto, oil and energy. deals and financial information, and weekly sum- • BioWorld Financial Watch – Delivered every maries of key news. We are taking those requests Monday morning, this e-newspaper provides to heart when discussing new product ideas and details on collaborations, public and private ways to expand BioWorld Today and our other financings, clinical trials and FDA submissions, newspapers and products. Until then, check out stock market activity, and underwriter and venture these BioWorld products for more of the news and capital portfolio performances, with an analysis by information you're looking for. And visit BioWorld writers. www.bioworld.com for a free trial of the entire • Weekly summaries of key news are available in BioWorld website to look at more of these publi- BioWorld Week, the chronicle of biotech news as cations in-depth.
reported in BioWorld Today. This abridged intel- • BioWorld International – a weekly newspaper ligence service comes out every Monday morning (delivered every Wednesday) that brings you news and includes news summaries of the biggest sto- about international strategic deals, worldwide ries, News from the Lab, and Market Watch, a investment opportunities, country-by-country reg- three-month overview of industry averages from ulatory issues, product development and insight the CBOE and AMEX biotech indices. on emerging biotech companies. • Email updates – At the beginning of 2008, BioWorld Today started a new service for sub- published in BioWorld Today BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE When Did Biotech Investors Get so Sophisticated? How Hedge Funds and New Research Models Are Changing the Rules There's a fundamental shift underway in the biotechnology investment world,
particularly for highly specialized fields such as pharmaceuticals and genetic
research. Investors, it seems, are getting educated.
cover and invest in high-potential companies and BioWorld Contributing Writer sectors, those investors respond by gettingsmarter. This is the classic story of investors On a recent earnings call, the CEO of a mid-size searching for an edge. In this case, hedge funds pharmaceutical company was fielding all the usual are changing the game by tapping directly into the questions about the firm: earnings projections, industry's experts, either by hiring them outright R&D spending, sales efforts, etc. Then came a to join their investment teams or — more cost- question about an experimental drug that was mov- effectively — by using primary research firms to ing through the FDA approval process. The ques- assemble expert panels.
tion was based on one of the more esoteric assump- To better understand this shift, it's helpful to con- tions about the new drug's efficacy. The CEO was sider how hedge funds are changing the biotech stumped. He had heard some murmurings about investment landscape. Looking back just 10 or 15 recent research on the topic, but he hadn't pre- years, most holders of large-cap biotech compa- pared for the question and was clearly rattled.
nies were mutual funds — relatively passive invest- It's easy to understand how this happened. CEOs ment vehicles that buy and hold stocks over a long are paid to handle such matters without flinching, time horizon and typically track to an index.
but this CEO had never — in years of investor calls Mutual funds are usually characterized by low fee — gotten a question like this. In the past, a quick structures and modestly paid investment managers briefing with his direct reports was more than (relatively speaking) who work within fairly narrow enough preparation for an investor call.
There's a fundamental shift underway in the Over the past several years, however, hedge funds biotechnology investment world, particularly for have become more and more of a force in highly specialized fields such as pharmaceuticals biotech, as well as in several other sectors.
and genetic research. The MDs and PhDs who run McKinsey estimated in October 2007 that total biotech companies are no longer de facto more hedge fund assets under management were informed than their investors, nor do they have a around $1.7 trillion, more than triple the total in monopoly on access to information. Investors, it 2000.1 (Although not a perfect apples-to-apples seems, are getting educated.
comparison, the Investment Company Instituteestimated net assets in stock-based mutual funds Why Is This Shift Taking Place Now?
to be about $6.7 trillion as of the beginning of There are several factors prompting these 2007.2) Unlike mutual funds, hedge funds aggres- changes, but overall it's about a fairly simple idea: sively reward their managers for outperformance.
As competition increases among investors to dis- Hedge funds typically use some permutation of BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE the "2 and 20" formula in which the fund pockets investor would need the insight of a research sci- 2 percent of all assets under management, then entist capable of interpreting the test results, a reg- an additional 20 percent of any profits.
ulator who understands the hurdles the treatmentmight face, an investment analyst who under- To get a sense of how this plays out, consider the stands the sector and perhaps an economist to case of a mutual fund and a hedge fund that each give insight into the near- and mid-term outlook take a $100 million stake in a biotech company.
for companies that require continuous cash infu- The mutual fund might book fees of 1 percent of sions for R&D. It's very rare that any individual total assets under management, or $1 million; if would be able to provide that level of perspective, the stock price appreciates by 5 percent, investors and most investors would not have the necessary do not owe a cut of their earnings back to the contacts to assemble this knowledge. With pri- fund. The hedge fund, on the other hand, with a mary research, hedge funds are assembling these "2 and 20" structure, would get a $2 million man- types of panels and getting deeper insights agement fee as well as another $1 million for the through multiple expert perspectives.
5 percent appreciation. Both funds made thesame bet, but the hedge fund manager gets three The drive for an edge in research is ultimately times the take. Investors are willing to pay that about hedge funds' fiduciary responsibilities to premium with the assumption that the hedge fund their limited partners. It's an arms race of sorts will consistently make better investments.
among biotech investors: If a hedge fund is losingmoney to other funds that are quicker to the Hedge Funds' Competitive Edge
punch because they understand the science better, Hedge funds, in turn, use that extra fee income to then it is incumbent on that hedge fund to step up maintain a competitive edge over the competition.
its own level of expertise by hiring more industry- These days they're accomplishing that primarily in savvy people and using better tools.
two ways, both of which directly tap the expertise How Should Biotech Companies React to
of the biotech industry.
First, no longer content with having the best Biotech executives who want to stay in step with MBAs money can buy, hedge funds are filling out their investors need to rethink how to monitor and their research teams with PhDs and MDs from then effectively communicate with the investment leading schools and medical institutions. As a community. Those who are able to do both will be result, the analysts covering biotech companies best able to understand what information investors now often have the same level of understanding are looking for and then answer that call.
and sophistication as the scientists at the compa-nies, raising the bar of investor understanding. In The first part of this equation, monitoring the fact, hedge funds and biotech companies now investment community, is a classic exercise in compete for talent.
gathering strategic intelligence, and it forms thefoundation of any good investor relations pro- Second, hedge funds are investing in expert-panelprimary research as a more efficient means of get- gram. All firms participate in this exercise, with ting direct access to top opinion leaders. As an varying levels of formality — sometimes the exec- example, consider a hedge fund that is analyzing a utive team just knows the investment community; pharmaceutical company with a drug in FDA test- other times it hires outside firms to help it under- ing; the hedge fund would need a great deal of stand what investors are looking for. Nowadays, as diverse expert information to make a true evalua- institutional investors are turning the due-diligence tion of whether the company's shares are under- process on its head by using biotech tools to priced, overpriced or properly valued. The research biotech companies, those same compa- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE nies should consider similar moves. A panel of need to accommodate both audiences, and any experts can provide invaluable information to an forum in which company executives interact with investor, and — similarly — an expert panel can the investment community will also be reshaped.
help companies understand where they meet, and These changes, considered all at once, are likely where they fall short on, investor expectations.
fear-inducing for biotech executives and their IR Once these firms understand how their investors officers, but they are ultimately positive develop- perceive them, they can then start working to fill ments for the industry. As the knowledge gap in gaps, recast messages, better explain strategy, between investor and executive narrows, strong and so forth. The process could even result in companies with complex products and services changing business practices, as expert panels can will be better understood, valued and funded.
bring a fresh perspective to companies that aren't realizing their full potential.
1. McKinsey Global Institute. The New Power On top of this, basic investor relations assump- Brokers: How Oil, Asia, Hedge Funds, and tions need to be reconsidered. As the knowledge Private Equity Are Shaping Global Capital gap between investors and biotech firms continues Markets. October 2007.
to narrow, companies need to begin stepping uptheir level of discourse. This doesn't involve scrap- 2. Investment Company Institute. Trends in ping current IR approaches and starting fresh.
Mutual Fund Investing. Indeed, many non-science-trained analysts will stillbe out there reviewing companies, and thus willstill want the science simplified. But, alongside of Published in BioWorld Perspectives those analysts are new investors with a moresophisticated understanding of the science. Any Will Febbo is the CEO of Panel Intelligence LLC information that is pushed out to investors will BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Are Biotechs Built to Prosper or Are They Built to be Sold? The NVCA data shows a pretty interesting picture going back over the past 17 years.
M&As have pretty steadily gained ground as the exit of choice over the past two decades.
harder to reach commercialization on the other, BioWorld Today Columnist what hope does the industry really have? The firststeps to dealing with a crisis are to determine what It was a difficult year for the biotech industry in has happened, why, and how to improve things. 2008, and end-of-the-year economic news did lit- First of all, let's note that there were quite a few tle to relax furrowed brows. Just think: With non-venture-backed IPOs in 2008. The most Roche trying buying out the rest of Genentech, noteworthy one of the year, Visa, produced some the industry's push to become profitable in aggre- pretty handsome returns, even in a very tough gate — a milestone it missed by just a scant cou- market. And more IPOs, both venture-backed and ple hundred million dollars in 2007 — was dealt a otherwise, are stacked up in the wings, judging the serious setback. public mood with a finger in the air. So the crisis And the list of woes continues: The FDA is miss- is most acute for desperate VCs looking for an exit ing more PDUFA dates and threatening to make on their investments. everything from diabetes drugs to cancer treat- How about the quality of their product? Four of ments harder to green light. Legislators are haul- those five venture-backed IPOs — all but IPC — ing drug executives up to Capitol Hill to receive were in early July among the worst performers of public abuse. Support for follow-on biologics is the year. Things have improved dramatically, but gaining steam. Yikes! these companies didn't put forth the kind of per- You may have noted one other troubling bit of formance that gets investors excited about further recent news: The National Venture Capital new issues. Bioheart, which originally filed for a Association (NVCA) declared nothing less than a $35 million IPO, was shoved out of the nest at a "capital markets crisis." After 2008's extremely pathetic $5.8 million. slow first quarter, in which only five venture- Indeed, one has to wonder: Were these compa- backed companies in any industry went public, the nies built to prosper, or were they built to be sold? second quarter had zero venture-backed IPOs.
A less widely disseminated statistic from NVCA's That's the first time such a thing has happened survey shows that the venture-backed M&A mar- since the grim days of 1978, according to NVCA. ket, though slow, is still steadily churning out deals If attendance counts, medical/biotech represented — 120 in the first half, which if taken as a run rate pretty well in what was a lousy year. Of those five would put this year about 32 percent below a very IPOs, four — CardioNet, IPC The Hospitalist active 2007. That's a big drop — hardly surpris- Company, MAKO Surgical, and Bioheart — are ing in the current tight-credit climate — but cer- involved in the life sciences. (The other, ArcSight, tainly a lot better than approximately 88 percent makes security software). decline in IPOs in the first half. But that's still a concerning trend. After all, if com- In fact, the NVCA data shows a pretty interesting panies are denied money on one end and find it picture going back over the past 17 years. In BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE 1991, M&As accounted for just under 10 percent Even the most successful IPO of 2006, Acorda of venture-backed exit events. The vast majority Therapeutics, was nevertheless an extremely risky were IPOs. By 2007, a pretty healthy year with company at its debut that, unlike the vast majority 86 IPOs, M&As nevertheless accounted for 80 of its colleagues, had the dice roll its way. This percent of the exit events. In the first half of 2008, doesn't exactly inspire investors. M&As represent 96 percent of exit events. M&As But where do VCs point the finger? According to have pretty steadily gained ground as the exit of NVCA, 77 percent blame the current IPO drought choice over the past two decades. on "skittish investors." This is a tautological expla- Looking back at the IPO class of 2006-2007, at nation, like blaming high prices on the fact that least in the life sciences, it's easy to conclude that things cost so much. Of course investors are skit- VCs were building companies without independ- tish — just look at what's happened over the past ence or the long haul in mind. Even the companies three years! Sixty-four percent of VCs blame the that took the traditional IPO route skewed toward credit crunch. And — I love this — 57 percent specialty pharma companies with little or no inter- blame Sarbannes-Oxley. That implies companies nal research capabilities, all competing with one simply don't want to go public because of onerous another over scarce in-licensing opportunities. regulations, which does little to explain why somany companies have withdrawn IPOs due to Little wonder that companies like Jazz adverse market conditions. Just 15 percent Pharmaceuticals, Cadence Pharmaceuticals, thought "poor IPO candidates" even ranked in the Novacea, and Vanda Pharmaceuticals have disap- top three reasons for the IPO drought. pointed investors. It is notable that some of themost successful companies to follow this strategy Wake up and read the stock charts. Yes, some of — like Speedel, Pharmion and Aspreva — were these companies will bounce back as the market acquired, which maybe was the better model all turns. Yes, any group of IPOs is going to have its failures. But at the risk of getting downrightcrotchety, just look back a decade to the class of Or look at the bloodbath that other members of 1996, which included Affymetrix, Alexion, Cubist the class of 2006 handed to investors: Achillion Pharmaceuticals, Millennium Pharmaceuticals, Pharmaceuticals, Artes Medical, Trubion Neurocrine Biosciences, Onyx Pharmaceuticals, Pharmaceuticals, Altus Pharmaceuticals, Transkaryotic Therapies (acquired by Shire for Northstar Neuroscience, Catalyst Pharmaceutical $1.6 billion in 2005), Sirna Therapeutics (original- Partners, Replidyne and Threshold ly Ribozyme, acquired by Merck for $1.1 billion in Pharmaceuticals. Many were victims of failed Hail 2006) and many others. It's tough to imagine the Mary attempts to reach commercialization quickly recent crop of IPOs producing so many prominent with too little to fall back on. names a decade hence. How do investors value them now? Replidyne, as The IPO drought will end, as it always does, and of March 31, 2008, had $78 million in cash and improvements in the banking industry will have a investments, no debt, yet a market cap of only lot to do with the timing. But the most important $37 million. That's an enterprise value of negative ingredient for a healthy IPO market is vibrant $41 million. Investors see even this company's companies that offer a long-term growth at a com- money in the bank as a bad risk, since in this envi- pelling risk-reward ratio. VCs looking to broker ronment it will be near impossible to replace after more than M&As should keep that in mind. it's spent. Indeed, a similar situation with anotherlousy 2006 IPO, SGX Pharma, led to an oppor-tunistic buyout by Eli Lilly and Co. published in BioWorld Today BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE How Biotech Can Make Even Cash Look Bad CEOs who throw up their hands and wonder how the markets could put such low
valuations on their companies should take note: Investors' memories are not that
short. There's reason to think that some companies willing to let themselves
be acquired near cash value did their shareholders a favor in the long run.
industry like biotech, where so much value is BioWorld Today Columnist wrapped up in intangible assets like patents,know-how and personnel, one hardly expects a Is your company on life support? company to be worth less than its cash in thebank.
On Oct. 15, 2008, Eun Yang, an analyst with theinvestment bank Jeffries & Co., put out a report But if you're wondering how we got to such a titled "Cash Is King: Where Biotech Stands." It place, just remember that we've been here before consists primarily of what might be termed death- . . and not even all that long ago. watch lists — charts tracking where more than Look today at Vanda Pharmaceuticals, with $63 300 public biotech companies stand in terms of million in cash as of the end of the second quarter cash reserves, debt, burn rate and of course the 2008, no debt and a market cap of $22 million.
product of those figures, time left until lights out. That sounds like a two-thirds-off sale on cash, It's not a terribly encouraging report. Out of 248 right? Surely investors should pile in, knowing that non-profitable biotechs examined, about half have the company must be worth at least its cash bal- less than a year's worth of cash remaining. ance to an acquirer, even if all other assets aredeemed worthless. It's free money, right?! Needless to say, this isn't a great time to be on theprowl for capital. Stock prices are depressed, pub- History would say, no. Why? Because it's a lic markets aren't terribly interested in secondar- biotech company, and the management of most ies, and even private investors don't want to part biotechs will never throw in the towel if they can with their cash. help it. They're far more likely to throw goodmoney after bad and slowly drive the company About $3.2 billion was raised in 2008, as of into the ground. November, in any form — secondaries, PIPEs,credit facilities. This is down about 62 percent Vanda and companies in similar situations like from the prior year, according to Yang's data. QLT Inc., Adolor Corp., SuperGen Inc. and YMBiosciences Inc. follow in a grim tradition estab- Yet one of the most interesting bits of information lished earlier this century by one-time industry stal- in the report is that 55 percent of public biotech warts such as Human Genome Sciences, Celera, companies with market caps under $200 million Incyte and CuraGen Corp. Human Genome are trading beneath their cash value. Sciences, for instance, trades at more than its cash That might be expected to prick up the ears of value today, certainly. But those investors who savvy investors. After all, these are companies that saw it as worth less than its cash five years ago? theoretically could liquidate their assets and distrib- They were absolutely right. ute a dividend higher than the stock price. In an Let's step down memory lane, shall we? BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Human Genome Sciences ended 2003 with cash million. In late 2008 Caliper had $10.6 million and short-term, long-term and restricted invest- (with $14.9 million in debt from a credit facility ments of $1.29 billion, against $503 million in due next year). Little Bear's February 2003 offer debt. In the five intervening years, total debt (long- of $4.50 per share probably looks pretty sweet to term debt and its capital leases) climbed to $755 Caliper investors now. million. Its cash and investments — even granting To be fair, there have been exceptions.
the company full value of long-term and restricted Transkaryotic Technologies, acquired by Shire assets that may be fairly illiquid — has sunk to Pharmaceuticals in 2005 for $1.6 billion, turned $542.7 million. Book value was almost $7 per out to be a fantastic bargain when it traded under share at the end of 2003; now it is negative. cash value. Those bold enough to gamble on SGX The company stock is near an all-time low (only a Pharma earlier this year got a nice payoff when brief period in 1995 saw lower levels). Human Lilly stepped in as a white knight to take over the Genome Sciences, it turns out, was worth less distressed company. But as an investor, I find a lot than its cash in 2003, because it just continued to more to fear in biotechs trading under cash value spend. Those investments, in the eyes of the mar- than I do to lick my chops over. ket, have produced little of value. So CEOs who throw up their hands and wonder Celera, another company that once traded under how the markets could put such low valuations on its cash balance (shortly after trading at roughly their companies should take note: Investors' mem- the GDP of Iceland), had $802 million in cash and ories are not that short. And though we can't short-term investments in June 2003. As of June know for sure, there's reason to think that some 2008, that was down to just $352 million. The companies that were willing to let themselves be stock price remains virtually unchanged since then, acquired near cash value — Corvas going to which means the enterprise value of Celera has Dendreon or Genomica to Exelixis back in 2003, actually risen substantially over the past half for instance — did their shareholders a favor in the decade. It just hasn't done a thing for shareholders. The company can at least brag that investors now Certainly we're going to be entering a tumultuous see more in Celera than its declining book value.
and interesting period in the industry. But you also can say that every dollar manage- Just as 2003 saw some mergers and acquisitions ment has invested in the business over the past at fire sale prices, we're likely to see a new round five years has produced zero return. It's hardly an of takeovers, desperate financings and outright argument that Celera at under cash levels was a failures. It's going to be disruptive. It's going to be upsetting. But it is probably going to strengthen And those were big, well-capitalized companies.
some companies in the industry that can selective- Other companies that went for less than their cash ly shop for distressed assets. And that's a good several years ago — CuraGen, for instance — still go for less than their cash value. It's just that Those companies on the short end of the stick, there's a lot less cash now, so the stock price has however, shouldn't expect their cash in the bank declined steadily. to prop up valuations. Or there's Caliper Life Sciences, which in 2003angrily turned down repeated offers from LittleBear Capital to buy out the company for just published in BioWorld Today under its cash balance, which was then at $154 BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Investments in Biofuels Take Dive in 2007, Greentech Grows "There's a higher profit potential, frankly, in industrial chemicals than in biofuels,
but the biofuels are, of course, the big market that captures people's attention . ."
Draper Fisher Jurvetson Managing Director Steve Jurvetson told BioWorld Today.
"Every consumer understands the price of gas."
those markets," Draper Fisher Jurvetson Managing BioWorld Perspectives Managing Editor Director Steve Jurvetson told BioWorld Today.
"Every consumer understands the price of gas." Investment in biofuels declined in 2007, but the Interest Grows in Other Renewable Energy
market is growing rapidly. In 2006, biofuels was the highest funded clean- After the biofuels boom in 2006, much of the tech sector, receiving $462 million, according to attention started to be showered upon other seg- the MoneyTree Report ments of renewable energy. In 2007, solar took houseCoopers and the National Venture Capital the lead, receiving $600 million in investments.
Association (NVCA). In 2007, however, several Wind energy came in with $115 million, a signifi- firms report that VC investment in biofuels cant increase over $10 million the previous year.
dropped to about $295 million. The amount of The pollution and recycling sector (including waste VC investment is still an improvement, however, treatment) increased from $137 million in invest- when compared to the less than $1 million in ment in 2006 to $203 million in 2007, according 2004 and $20.5 million in 2005 that went into to the MoneyTree Report. biofuels. Most VC funding went to second-genera-tion fuel technologies rather than ethanol, accord- "A mixture of solar, wind, biofuels, conservation ing to "Global Trends in Sustainable Energy and a series of other technologies coming together Investment," a report prepared by New Energy as a package are going to be required" for the ener- Finance for the United Nations Environmental gy solution, Juan Enriquez, chairman and CEO of Programme (UNEP). Boston-based Biotechonomy LLC, a life sciencesresearch and investment firm that has invested in Combined private equity and VC investment in Synthetic Genomics Inc., told BioWorld Today.
biofuels worldwide fell nearly one-third, to $2.1 "But I think biofuels are a part of that package." billion in 2007 from $2.9 billion in 2006, accord-ing to the UNEP report. According to the report, Venture capital investments in cleantech in 2007 much of the decline was due to the end of the jumped to $2.2 billion in the U.S., an increase of push to build ethanol facilities. In addition, "pri- 45 percent over the previous year, according to vate equity expansion capital investment in US the MoneyTree Report. In fact, the 7.4 percent of biofuels did not dry up altogether, but its focus venture investment that cleantech captured in switched from ethanol to biodiesel." 2007 put the industrial/energy sector in fourth "There's a higher profit potential, frankly, in indus- place among industry sectors (coming in behind trial chemicals than in biofuels, but the biofuels are, software, biotech and medical devices). PWC and of course, the big market that captures people's the NVCA call cleantech the fastest-growing VC attention because we all can understand the size of investment sector. BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Clean Edge puts the number even higher.
Virgin Group, best known for airlines, phones and According to the research firm, more than 9 per- records, established the Virgin Green Fund to cent of VC activity in the U.S. was in the clean- invest in companies working in renewable energy energy sector ($2.7 billion). This is an increase of and resource efficiency. Its portfolio includes Gevo more than 70 percent over 2006. In 2000, U.S.
Inc., which is developing butanol, isobutanol and VC investments in energy technologies were just other advanced biofuels. under $600 million. The Virgin Fuels investments include Cilion Inc., Globally, the numbers are much higher. Funding Ethanol Grain Processors LLC and Indiana Bio- for the sustainable energy sector was up 60 per- cent in 2007, to $148 billion globally, according Goldman Sachs & Co. became the first major Wall to the UNEP report. Most of that investment went Street firm to make a commitment to cellulose to Europe, followed by the U.S., China, India and ethanol in 2006, according to Iogen Corp. The New York-based firm invested C$30 million in "In a way the planet is really benefitting by the Iogen's cellulose ethanol technology. high oil prices we're suffering through day-to-day, In May 2008, Kleiner Perkins Caufield & Byers by the fact that entrepreneurs everywhere have a (KPCB) announced the launch of the $500 mil- huge price umbrella under which they can bring lion Green Growth Fund. The same day, the new products to market," said Jurvetson. "It's Menlo Park, Calif.-based venture capital firm much easier to cost-justify a project when oil is at announced the formation of the $700 million the current prices than when oil was where it was KPCB XIII, a fund that will invest in greentech, a couple years ago." life sciences and information technology. KPCB Firms Starting Green Funds, Stepping up
got into greentech in 2002, when it formed the Renewable Investments
KPCB Greentech Innovation Network (GIN). Itsgoal is to form partnerships and build a map for Over the past five years, numerous firms have the evaluation of technologies required for inno- formed that invest only in greentech. In addition, vation in greentech. the biggest investors are making renewable ener-gy investments, if not forming clean energy funds The Future of Biofuels Investments
Despite the drop in investment funds, the biofuels Vinod Khosla, founder of Santa Clara, Calif.- industry is literally chugging away. According to based Sun Microsystems Inc., founded Menlo the Renewable Fuels Association's Ethanol Park, Calif.-based Khosla Ventures in 2004. At Industry Outlook 2008, bioethanol production the beginning of 2007, the company's portfolio increased 32 percent from 2006 to 2007 (4.9 bil- included cellulosic ethanol companies like lion gallons to 6.5 billion gallons). In addition, the Mascoma Corp., Coskata Inc., KiOR Inc. and number of U.S. biorefineries increased from 110 Verenium Corp.; corn ethanol companies like in 2006 to 139 in 2007. There were 34 biofuels AltraBiofuels Inc. and Cilion Inc.; and synthetic deals in 2007, as compared to 22 the previous biology firms Gevo Inc., Amyris Biotechnologies year, reports PWC and the NVCA. According to Inc., Codon Devices Inc. and Draths Corp. Clean Energy Trends 2008, it is estimated thatmore than 45 billion gallons of biofuels will be pro- In April 2005, Bill Gates jumped into the biofuels business with a big commitment when CascadeInvestment LLC, his venture fund, invested $84 In looking to the future, it's best to go to the deci- million in Pacific Ethanol Inc. sion makers. That's just what the NVCA did in its BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE 2008 Predictions Survey. Of the 170 VCs who tion biofuels companies — companies developing responded to the survey, 80 percent said they biofuels from algae or through synthetic biology believed the cleantech sector will continue to applications, as well as the more traditional cellu- According to Clean Energy Trends 2008, the "There are perhaps a few venture capitalists who global biofuels market is set to grow from $25.4 are investing in projects that would be looking at billion in 2007 to $81.1 billion in 2017. corn ethanol or things of this sort, but it's sopatently obvious in retrospect that those are just And while investment in biofuels were reported to broken and bankrupt ideas in many cases, in be down last year, one thing is certain: The renew- terms of long-term viability," said Jurvetson. "I able energy field is here to stay. According to think it's pretty well understood that those are not PWC's 11th Annual Global CEO Survey, 64 per- the way you want to go when there are much cent of CEOs are "concerned about rising energy more reasonable feedstocks to look at, everything costs" and 39 percent are "concerned about from waste to CO2 itself." increased carbon emission regulations." BioWorld predicts that VC investment in biofuelsin the future will be concentrated on next-genera- published in BioWorld Today BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Abigail Ruling Shows Feds More Concerned with Procedure than Progress At what point does the biotech industry have an obligation to stand up and
say that dying patients matter more than blindly following the rules?
bureaucracy trumps compassion. After Phase I BioWorld Contributing Writer testing in 1998, the medical community consid-ered the drug to be safe and effective, so the If the biotech industry had any doubt that the fed- alliance requested access for patients with chronic eral government is more concerned with following myelogenous leukemia in June 2001. The FDA a complex array of rules and procedures than with said no, and by the time the Novartis AG drug was actually advancing medical improvements — and fully approved in 2002, about 3,600 patients had really, did anyone in the industry think otherwise? been denied access. Many of them died while wait- — the recent ruling by the D.C. Court of Appeals ing for their last best hope to get the government proves that dying patients are only a minor con- stamp of approval. The Abigail Alliance estimates cern when there is still a government form to be that 1 million people may have died prematurely in recent years because the government deniedthem access to cancer drugs. The list of denied The D.C. Court of Appeals recently reversed an drugs is long: Eloxatin (Sanofi-Aventis), Erbitux, earlier decision by its own three-judge panel and Revlimid (Celgene Corp.), Nexavar (Onyx ruled 8-2 against allowing dying patients to take Pharmaceuticals Inc., Bayer Pharmaceuticals potentially life-saving drugs that have not yet been Corp.), and on and on.
approved by the FDA. The case had been filed in2003 by the Abigail Alliance for Better Access to It's easy for professionals working every day in the Developmental Drugs, along with the Washington biotech industry to get swept up in the "normalcy" Legal Foundation. The Abigail Alliance is named of a system that is fundamentally wrong when for Abigail Burroughs, a 21-year-old college stu- applied to some desperate individuals. The biotech dent who died of cancer in 2001 after being manufacturers are not at fault here, or at least they denied access to Erbitux, the then investigational didn't come up with the system that gets in the drug from ImClone Systems Inc. that early trials way of people getting the help they need.
indicated might have helped her.
Manufacturers and researchers are only playing by Over the past five years, the alliance has pushed the very strict and complex rules imposed upon for access to 12 drugs that had cleared at least them by the FDA. When that bureaucracy is Phase I testing. Some had completed Phase II or imposed on you and your work, you have no Phase III testing and were considered extremely choice but to play along if you want to eventually promising. All of them have been subsequently have your drugs approved. The system becomes approved by the FDA, and patients benefit from the norm, the way things are done.
them every day. The patients who died before the But at what point does the industry have an obli- FDA approval also could have benefited, if only gation to stand up and say that dying patients mat- the government had allowed tightly controlled ter more than blindly following the rules? Perhaps access before full approval.
that time has come, now that the D.C. Court of Gleevec is perhaps the best example of how Appeals ruling indicates there is little hope the BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE feds are going to alter their bureaucratic require- Industry leaders should stand side-by-side with the ments on their own. The industry clearly has not Abigail Alliance and others advocating for a more done enough to advocate for its true end users, compassionate, reasonable system that doesn't sick and dying Americans.
leave dying patients waiting for bureaucrats to sat-isfy themselves that all formalities have been met Caution vs. Paralysis
before releasing a medication that everyone To be sure, the biotech industry has its own interests knows is safe and effective. After all, we're talking to protect here. No one wants to be the one who is about life-saving drugs here, not a new cure for a voice so counter to the norm that future relation- baldness. If the potential benefit is negligible, then ships with the FDA are jeopardized, and handing out it can make sense to follow all possible protocols unapproved drugs with little control would be reck- to make sure there is no harm. When the patient less — both for the safety of patients and for the is already dying, how can that insistence on per- financial security of the company. Fear of lawsuits fection be seen as anything but callous and cruel? and the possibility that a poor outcome could jeop- Biotech leaders should make sure they're standing ardize the future of a drug that otherwise might have on the humanitarian side of this life and death received FDA approval are valid concerns. With mil- issue. No matter how much it can feel otherwise lions and years invested, manufacturers and when dealing with the bureaucracy day in and day researchers are entirely justified in being cautious.
out, these business leaders should not forget that But there is a difference between caution and they're supposed to be serving sick Americans, paralysis. The feds can't find the distinction, but not the FDA.
private enterprise should be able to exert morecommon sense and find the point at whichpatients with no other hope for recovery can be published in BioWorld Perspectives granted access to drugs that have shown promisein early trials.
BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE This Century's First Civil Rights Bill: The Privatization of Personalized Medicine The Genetic Information Nondiscrimination Act is a good start to giving Americans
access to the maximum benefits that personalized medicine has to offer today.
By Ilene Schneider crimination in the workplace. Critics argued that BioWorld Contributing Writer the law would expose employers to "frivolous"civil rights lawsuits regarding disputes over medical Thanks to a new law, no American will have to coverage and believe that GINA's confidentiality fear the insurance and employment consequences rules place too many recordkeeping requirements of undergoing genetic tests. Specifically, no one on employers. The U.S. Chamber of Commerce will have to choose between obtaining health opposed the final version of the bill, claiming that information and being employed or insured.
the fines were too high and that limitations on col-lection of medical information on patients would After 13 years of debate, the Genetic Information hinder some medical practices.
Nondiscrimination Act (GINA) finally became a fed-eral law in May 2008. The law defines "genetic Still, GINA appears to provide a winning combi- information" as an individual's own genetic tests, the nation of protecting the rights of employees and genetic tests of family members, and the manifesta- consumers while fostering good science and med- tion of a disease or disorder in family members.
icine. It promotes advances in biotechnology andhealth care, while providing a safe avenue for GINA makes it illegal for health insurers to deny people to play a role in the clinical trials that coverage or charge a higher rate or premium to enable the discovery and cure of genetic diseases.
an otherwise healthy individual found to have a By so doing, it can ultimately save lives and even potential genetic condition or genetic predisposi- tion toward a disease or disorder. GINA alsomakes it illegal for employers to use an employ- GINA is the first major new civil rights bill of the ee's genetic information when making hiring, fir- new century, Sen. Edward Kennedy (D-Mass.), a ing, placement or promotion decisions. Employers cosponsor of GINA in the Senate, said in a press who violate the new law could be fined as much as release. While some related federal and state laws $300,000 per incident. The group health insur- existed before GINA, the new law will strengthen ance provisions will take effect in May 2009, and those safeguards by limiting insurers' ability to use provisions that involve employment will take effect genetic information to raise rates for an entire in November 2009.
group, by extending protections to individual GINA: Opposition and Accolades
health insurance plans, and by establishing anationwide level of protection.
Some GINA opponents said that the legislationwas "a solution in search of a problem," because "This bill unlocks the great promise of the Human there is little evidence of actual employment dis- Genome Project by alleviating the most common crimination on the basis of genetic information. In fear about genetic testing," Rep. Judy Biggert (R- addition, they added that there have been few, if Ill.), who cosponsored GINA in the House with its any, actions brought against employers in the 34 leading proponent, Rep. Louise Slaughter (D- states that currently have laws banning genetic dis- N.Y.), said in a press release. "It will accelerate BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE research . . and allow Americans to finally real- efit genetic research as well as individuals. Now ize the benefits and health care savings offered by that the bill has been signed into law, patients will gene-based medicine." be more likely to participate in research studiesthat involve the collection of genetic information.
Genetic Testing and the Promise of
Scientists can assure clinical trial participants that neither their participation in a research study nor When the first attempt at federal legislation to pre- their genetic information legally can be used vent the misuse of genetic information was intro- against them by their employers or health insur- duced in 1995, only about 300 genetic tests were ers. As scientists make advances in genetic available. Most were for rare diseases and were usu- research and technology, clinicians will be able to ally performed in research settings. With the map- begin customizing treatments according to an indi- ping of the human genome and the rapid discovery vidual's genetic profile. All of the above will have of genetic variants that contribute to risk of com- positive effects on the fields of biotechnology, clin- mon diseases such as breast cancer, colon cancer, ical research and health care delivery.
diabetes, heart disease and depression, the number A Good Start in a Long List of Legislation
of people who might benefit from learning whatrisks lurk in their genes is growing exponentially.
What lies ahead for GINA, to make sure it proper-ly serves Americans? According to the article Today, genetic testing exists for more than 1,200 "Keeping Pace with the Times — The Genetic conditions. Some tests can be performed in the Information Nondiscrimination Act of 2008" in the clinic, and individuals soon can take advantage of New England Journal of Medicine, federal agen- the promise of personalized medicine, knowing cies must write the implementing regulations that that they will not have to worry about discrimina- will provide the detailed guidance for health insurers tion if genetic markers — the indicators of risk for and employers about how to comply with the new genetic disease — are found. Genetic tests can law. Health care professionals and patients need to help diagnose genetic conditions and guide treat- understand the new protections, and clinical ment decisions, help predict the risk of future dis- researchers, research administrators, institutional ease, enable reproductive decision-making, and review boards and research participants must facilitate medication selection or dosing.
understand the new law and its implications.
Benefits and Elimination
Genetic tests must be safe, reliable and marketed in of the ‘Fear Factor'
a clear and truthful manner. Finally, we need to ana-lyze the other areas of society that potentially Those who choose not to be tested will lose the involve genetic information, including life , disabili- opportunity to seek monitoring and preventive care ty and long-term care insurance.
to avoid conditions for which they are at heightenedrisk. On the other hand, an increase in genetic test- Clearly, GINA is a good start for Americans to gain ing makes it more likely that researchers will come access to the maximum benefits that personalized up with early, lifesaving therapies for a wide range medicine has to offer today, so long as the proper of diseases with hereditary links. Genetic testing will regulations and safeguards can be provided. As new help doctors catch problems early, perhaps leading opportunities in science present themselves, new to preventive treatment and lower lifetime costs.
legislation may be needed to take the potential of There also could be cost savings for health insurers biotechnology a quantum leap further. Next time, (who must pay more to treat conditions that are not let's hope Congress can do it in less than 13 years.
prevented or caught early) and employers (who bearthe economic costs if employees require more sickdays and medical leave).
published in BioWorld Perspectives By eliminating the "fear factor," GINA should ben- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Pharma: Seven Steps To 2020 The choices for pharma companies are two: Change now and control your
destiny, or pursue business as usual and allow your fate to be controlled by
others. Executives and board members at pharmaceutical companies need
to ask themselves: Which path will we take?
development costs, more demanding regulatory BioWorld Contributing Writer reviews and growing dependence on massive salesforces.
The global pharmaceutical industry is facing an Technology changes and consumer demands for unprecedented opportunity. Over the next more specialized medicines will force pharma decade, the market for pharmaceutical products companies to reduce their reliance on mass mar- will nearly double in size, reaching $1.3 trillion by ket blockbuster drugs by developing products in 2020 to meet the medical needs of the aging glob- new therapeutic areas and creating more person- al population and a surge in demand from emerg- alized solutions. They also must look to smaller, ing countries. Yet some pharma companies willnever capture a share of this enormous market smarter and less-costly sales teams that do not because they continue to bank the future of their simply sell pills, but also generate revenue by sell- business on a model that will no longer exist.
ing related, added-value services.
Anticipating and adapting to the changing dynam- Increase R&D Productivity
ics in health care is the great challenge for the Scientific breakthroughs in pharmaceuticals are pharmaceutical industry. It is becoming abundant- harder to come by, with much of the low-hanging ly clear that maintaining the current course is no fruit having been picked. The regulatory approval longer an option. Pharmaceutical companies are process also has become more demanding.
fast approaching a fork in the road, and they must Consequently, the cost of research and develop- choose a path: Will they focus on innovation and ment continues to soar.
offer value in the form of more targeted drugs, withproven outcomes and a suite of value-added servic- Pharma leaders must rethink how the industry es around them? Or will they go after the commodi- approaches R&D. Research must be guided by tized mass market, driving revenue with volume? medical requirements rather than sales potential: Along the way, there will be winners and there will Instead of copycat medicines, pharma companies be losers. The winners will be those who have the need to address unmet clinical needs.
courage to pick the right path and begin making Pharmaceutical companies also need to expand changes in their business models now.
their pool of basic research sources beyond aca- Here are seven major steps that Price- demic centers and niche biotech companies. In waterhouseCoopers LLP believes that pharma com- particular, they can draw upon the emerging talent panies can take in the years leading up to 2020.
in Asia, either by establishing a much stronger Look Beyond the Blockbuster Model
footprint in Asia or forging close links with leadingcenters of scientific excellence in the area.
The sales model of placing big bets on a handfulof heavily marketed breakthrough products has Finally, researchers frequently narrow their focus become far less effective, due to rising product early in a product's life, which often leads them on BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE the wrong track. They need to focus more on the peers in establishing a truly global regulatory big picture, understanding a disease's pathophysi- process that can reduce redundant processes, ology, before making decisions about a full pro- move products to market faster and reduce com- gram of experimentation.
pliance costs.
Focus on Prevention, Not Just Treatment
Personalize the Distribution Chain
Pharma companies historically have focused on Increasingly sophisticated direct-to-consumer dis- the development of treatments for disease, but it is tribution channels are emerging. The develop- far less expensive to prevent illness than to cure it.
ment of new technologies enables automated dis- As consumer-directed health care and cost control pensing of medicines direct to consumers. More grow in importance, pharma companies should primary-care medication prescriptions will be ful- increase their focus on the prevention of disease filled automatically, with doctors writing prescrip- through expanded vaccination and medicines with tions, checking insurance criteria and sending the preventive properties. Companies may be forced prescription to online pharmacies. Using web- by payers, patients and other key stakeholders to based biometric devices, pharmacies will be able actively pursue this strategy as societal changes to check patient identity and ship the medication influence the world of health care.
to their homes overnight.
Since failure to take prescribed products as direct- With increased direct-to-consumer distribution, the ed is a leading cause of illness, pharma companies use of wholesalers likely will decrease. Pharma need to expand their work in patient compliance companies will be able to distribute products with- by developing personalized monitoring technolo- out middlemen, creating closer relationships, gies and techniques to ensure that patients take enabling the sale of additional services and a their medicine as directed, improving both results source of competitive differentiation. This possibil- and safety while creating a market with the poten- ity opens new opportunities for wholesalers tial for $30 billion in additional annual sales.
around data management and prescription com-pliance services.
Make the Regulatory Process More
Flexible
Go Global
The current all-or-nothing regulatory process The worldwide pharmaceutical market will more means that most new projects are an enormous than double by 2020, but much of the growth will gamble for pharma companies: They may spend come from outside North America and Europe.
hundreds of millions of dollars developing prod- The so-called "E7" emerging economies — Brazil, ucts that are never approved for sale. Instead, China, India, Indonesia, Mexico, Russia and the industry needs to work with regulators to Turkey — could generate up to a fifth of global advance a more progressive system of in-life test- pharmaceutical sales by 2020, up by 60 percent ing and "live licenses," using greater collabora- from 2004. As these countries become more tion and data-sharing between pharma compa- prosperous, their people will adopt Western nies and regulators. These licenses will allow a health profiles, eating richer foods, working drug's approved uses and distribution to expand sedentary jobs, and driving instead of walking or over time, based on its performance in extended Pharma companies need to enter these markets Moreover, as international markets become aggressively, but they need to do so intelligently.
more important, the industry needs to encourage Not only do they need to establish culturally sensi- U.S. regulators to work more closely with their tive local sales and distribution infrastructures, but BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE they also need to tailor therapies to respond to new technologies and new business models.
variations in the nature and incidence of disease Although these changes need to be implemented that can be caused by differences in ethnic origin, over a period of years, companies must start now.
diet and environmental factors.
Changes in the traditional ways of making and Choose a Path
selling medicines could upend the entire industry,resulting in impacts very different from the merg- The enormous costs of producing and distributing ers and acquisitions that occurred a few years ago.
innovative medicines mean that the pharma indus- Rather than taking the customary approach of try increasingly will split into one of two models.
fully integrating an acquisition, a buyer could Some companies will become niche players, devel- break it up, retaining some assets and selling the oping fewer, more targeted new drugs; others will rest. For example, private equity firms, which go the generic route, focusing on volume, with have reshaped other industries, are gaining the sales of mass-produced drugs generating revenue.
buying power to enter the pharma sector.
Companies can succeed either way, but will have The choices for pharma companies are two: to choose which model they will pursue, forming Change now and control your destiny, or pursue strategic partnerships with other pharma compa- business as usual and allow your fate to be con- nies, biotech firms or other industry players to fill trolled by others. Executives and board members in gaps. Those that choose to participate with the at pharmaceutical companies need to ask them- other health care players will stand an increased selves: Which path will we take? chance of success, as the demand-driven model ofsocietal needs and expectations begins to take agrip on the future health care agenda.
published in BioWorld Perspectives If pharmaceutical companies undertake these Simon Friend is the Global Pharmaceutical steps, they will be better positioned to manage the and Life Sciences Industry Leader, seismic shifts that not only pharma but all of the PricewaterhouseCoopers LLP. "Pharma 2020: health industries will undergo by 2020. The The Vision – Which Path Will You Take?" is changes will enable them to benefit from the available at www.pwc.com/pharma.
opportunities that will emerge from globalization, BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Immigration, Education and Respect for Science: Where Is the Biotechnology Community? When our industry, which has brought untold benefits to humanity, is
attacked as corrupt and greedy, or even as a conspiracy to poison
people in poor countries, too many people believe it.
be that NOT taking on those issues relegates us to BioWorld Contributing Writer nuisance status. We then end up letting the wrongpeople define the terms of debate, on matters both Most of us in the business world are used to keep- large and small. So let's be honest: It isn't working ing our heads down where politics are concerned.
for us. Look at what has happened with stock Our lobbies carefully sprinkle their enticements option expensing (a failure for which we share cul- around in a relatively bipartisan way. We only make pability with the National Venture Capital noise about matters we perceive as being of imme- Association and the IT community). By denying diate consequence to us. In the case of the biotech- there was a problem to be solved, we ended up with nology community, the topics that make the cut are the worst of several possible "solutions." limited to arcane matters such as Small Business Assuming that most of us are motivated at least in Administration funding thresholds, capital gains tax part by self-interest, the heart of the problem is that treatment and stock option expensing. How many we define self-interest too narrowly. Unfortunately, people outside our industry even know such issues the public notices. So when our industry, which has exist? Not many, and we seem to like it that way.
brought untold benefits to humanity, is attacked as Meanwhile, there are bigger social and political corrupt and greedy, or even as a conspiracy to poi- debates that also affect us profoundly, though we son people in poor countries, too many people seem content to pretend otherwise. However, if we believe it. Sending a talking head to debunk The go on pretending, we will do the next generation of Constant Gardener on CNN is too little, too late.
biotech entrepreneurs two major disservices: We We will only forestall such blatantly dishonest will bequeath them the consequences of our inac- attacks by showing people that we actually care tion on the big topics, and we will hobble their abil- about issues beyond this quarter's bottom line. And, ity to win on even the narrow, more technical in the long run, caring is good for our business.
debates. Now, one might ask: Why are these twoproblems linked? The question is whether we have the courage andforesight to stand up and insist on an honest debate Looking Like a ‘Special Interest' in the
about some of the larger forces threatening the Worst Sense
future of our enterprise. We all know what some of One obvious reason is that when we ignore the big these forces are: America's retreat from science, themes that most people care about, we don't build our growing xenophobia and the gutting of our edu- any broad political capital. When we show up later, cational system. Too daunting? Well, when have the demanding special treatment on some obscure mat- big issues been easy? ter of accounting or securities law, we look like a Education and Immigration
"special interest" in the worst sense of the word.
Contrary to the routine assumption that taking on To start with the hardest one: What can be done bigger issues is risking our political standing, it may to reverse Americans' abandonment of science? BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE American kids are opting out of science at every flawed, but at least they were a start. Those bills stage in school, and the percentage of American have died an ugly death because the voices of hys- college students choosing science majors has teria drowned out the voices of reason.
declined monotonically for the past 30 years.
Throughout this process, our industry was invisi- The most immediate concern is that recruiting ble. We are letting the wrong people, both on the for our companies has become daunting. There left and the right, set policy that is indisputably are not enough homegrown talents to populate critical to our future. Shouldn't we as a communi- the companies we start. Perhaps more impor- ty break our silence and take a stand in favor of tant, in the long run, support for our enterprise enlightened immigration policy? We might make is jeopardized as fewer and fewer voters are sci- some enemies in doing so, but is that really too high a price to pay for doing the right thing, forourselves and for our national competitiveness? The recruiting problem brings us right up against Besides, who will hate us for it? The same people the second threat: the backlash against immi- who already hate us for doing stem cell research? grants. We survive, and thrive, on the influx of for- What's to lose? If we, with all our education and eign students and graduates eager to apply them- awareness, don't lead, who will? selves. With more than half of California's gradu-ate-degreed biotechnology employees being non- Science Getting Less and Less Cool
U.S.-born (other regions are approaching these Immigration is a tough equation to solve.
numbers) and with the aforementioned shortage Reversing a cultural trend like loss of interest in of homegrown talent, we are extremely vulnerable science is tougher. We don't want to emulate to even short declines in immigration, and we're Singapore — where government policy forces blind if we don't realize it.
people into fields deemed strategic; it is against Policies (such as the H-1B visa) that favor people our notion of free choice to do that. However, we with special skills have barely made a dent in the are doing worse than nothing! Knowledge indus- problem. Whether the H-1B is even a constructive tries thrive on a foundation of intellectual inquiry solution is not clear; it certainly ignores the reality and scientific rigor. How is that foundation being that it is not just the skilled who are needed here.
affected by the attempts of religious fundamental- In the Bay Area, as in many other booming tech- ists to undermine it, and by the open rejection of nology centers, unskilled immigrants play an science by our president and many of the leading essential role in keeping the local economy func- candidates to succeed him? How can we remain tional and affordable, allowing young scientists to competitive with developing countries that are work for modest wages in the hope of a future teaching real science in their schools? Why is our payoff. What is going to happen if a third of these people have to leave, even under the "touchback" There have been calls by science educators, scien- policies currently being debated in Washington? tists and even some politicians, like Al Gore, for a As for the skilled, they are being scared off by the PR program to convince young people that sci- widespread global coverage of America's broad ence is cool. Oh boy! We can only hope they are and bipartisan embrace of xenophobia. If you not serious. Does anyone really think our target don't believe that, spend a week in China or India audience is that easily manipulated? They can see and ask the young scientists there how they feel for themselves the standing of scientists and tech- today about coming to America.
nologists in society. That standing is low and erod- The recent, panicked movement in Washington to ing. Despite the huge fortunes made by some resolve the immigration issue produced congres- high-profile Silicon Valley entrepreneurs, science sional bills that everyone admits were deeply is getting less and less cool. Why not? Our leaders BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE have shown the most profound disrespect for sci- we can do better — if not through BIO, then as ence, and kids learn by example.
individuals — through our campaign contributionsand our voices.
It would be nice to appear nonpartisan at all times,but unfortunately, on this issue, there is clearly Public Education — Not Someone Else's
one party which is complicit in the war on science education. For this writer — a registered member Finally, regarding the crisis in public education: of that party — the alliance with religious conser- Our leaders are guilty of under-funding, and in fact vatives for the sake of winning votes is a cynical actively undermining, our public school system.
and Faustian bargain. Isn't it time we challenge This is a bipartisan failing at all levels from Capitol our leaders to stand up to the forces of ignorance? Hill to the small town. We are caught between the Do we need those votes so badly that we willingly radical public school de-funding lobby on the right, trash American leadership in science and technol- and the teachers' unions on the left, who are man- ogy as part of the bargain? ning the barricades to protect job security at the Everyone in our industry owes his or her livelihood expense of quality. The National Venture Capital to the principles of open-minded inquiry that Association has, at long last, undertaken a project defined the Enlightenment. It seems unthinkable (MAGNET USA, Maximizing America's Growth to stand cynically by and let those principles be for the Nation's Entrepreneurs and Technologists), dismissed as "just another belief system," and an which addresses, in part, this issue. Yet it is far too "immoral" one at that. Yet, that is what we have little, and too incremental. Meanwhile, our indus- done. Why, other than fear or greed, is there any- try has punted.
one in BIO or PhRMA who is not withholding his Broad public education is essential to the ecosys- or her votes and money from politicians who tem in which our industries thrive. Is there anyone reject the Enlightenment? Why have Sens. Sam who sincerely disputes that? Along with immigra- Brownback (R-Kan.) and Jim Inhofe (R-Okla.) and tion, mass education was the fuel that gave this former senator Rick Santorum, among others, country uncontested scientific supremacy in the received a penny of our money? They hate every- late 20th century. It is now the basis on which thing that makes our industry possible! developing nations like India and China are rapid- Unprecedented Hostility to Science
ly overtaking us. If our schools remain unable topick up the slack, we are going to see our preem- Unfortunately, our leaders' disrespect for science inence in knowledge industries evaporate. It has extends beyond the classroom. The administra- already happened in areas such as computers and tion's unprecedented hostility to science-based pharmaceutical chemistry. We should be demand- policy-making, from stem cells to the environ- ing enormous increases in public education spend- ment, is not only dangerous, it has been deeply ing, in exchange for concessions from the teach- demoralizing to the scientific community on whom ers' unions on issues like tenure (make them earn we rely for direction on such matters. It further it), credentialing (end their monopoly on the contributes to the disdain our young people have process) and merit pay (long overdue). This for careers in science and technology and has requires confronting the partisans on both sides of explicitly frightened off talented young scientists in the so-called "debate." other countries who might have come here towork. Even on an issue as obvious as stem cell We in the biotech industry tend to view education research, which is OUR issue, we have been as someone else's problem. It should be obvious shamefully timid, leaving a vacuum that state ini- how self-destructive that is. Tax policies impact tiatives like California's cannot properly fill. Surely how much we keep of today's harvest, but if we BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE don't pay attention to planting for the next sea- We are not shy about taking on the political son, what will there be to harvest then? Our com- establishment over issues that look purely instru- patriots at IT companies like Hewlett-Packard rec- mental, such as tax and regulatory policy. Our ognize this and are making huge investments in mistake now would be to think that matters such public education and training in the information as education, science-based policy and immigra- sciences. What does HP see that we don't? tion are somehow less instrumental, and thusnot worth the same investment of political capi- Where the Danger Lies
tal. Mark these words: If our community defaults These are all issues on which it behooves our com- on those larger issues, then in the future we may munity, individually and collectively, to take an not receive, and certainly won't deserve, any active stance. In some cases, it would seem we further consideration when it comes to taxes must risk our political neutrality. Would that really and regulation.
be so unprecedented? Besides, we might actuallygain standing with groups that have never paid usany attention before. Over the years, we have vig- published in BioWorld Perspectives orously rebutted such critics and enemies as theanimal-rights terrorists and the corporate conspir- Dr. Charles Hsu is a veteran life sciences acy theorists, but let's face it, their impact is mar- venture investor and entrepreneur. ginal at best. In other words, PETA may be a littlenutty, but it also is irrelevant. We have to be hon-est about where the danger lies today.
BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Biotechnology in Africa: Why the Controversy? What Africa needs most at this time of intense European-American debate on
developments and use of GIOs is the creation of widespread public and policymaker
awareness and education on all facets of biotechnology and biosafety.
By Elseborn Mwangi developed. These are needed to augment yields BioWorld Contributing Writer and reduce losses while conserving the naturalresources base.
This is a time of intense discussions about Africa's Beginnings of Biotech in Africa
agricultural and economic performance, and thepotential impact of biotechnology on the economy The debate on biotechnology in Africa must be and the welfare of the continent. The two issues considered within the context of the continent's dominating the debate are the persistent poor per- need for more food and the survival of its people.
formance of agriculture with associated wide- Biotechnology-derived solutions for biotic and spread poverty, and the ability of biotechnology to abiotic stresses, if built into genotypes of plants resolve Africa's food crisis (taking into account its and animals, could reduce the need for, and the potential and perceived effects on the continent's high cost of, agrochemicals and water. New solu- enormous biological diversity).
tions also could reduce the deleterious effects ofdiseases and weeds, thus promoting sustainable Socioeconomics Set the Scene
agriculture production in Africa. Several coun- Thirty years ago, Africa's population was about tries, especially South Africa, Kenya, Zimbabwe 200 million. Today it is 520 million, and it is pro- and Egypt, are putting in place structures and jected to increase to 1.3 billion in the next 25 capacities for biotech R&D. Improvements in years. The continent has the highest population productivity are beginning to emerge from the growth rate in the world.
applications of conventional and modernbiotechnology.
Subsequently, the situation may not necessarily beone of food scarcity but rather the scarcity of For example, to address the problems of soil fer- income or purchasing power. Millions of people in tility and fertilizer application, a number of coun- Africa live on less than US$1 per day.
tries have started to use Rhizobium inoculant inthe production of grain legumes. In several coun- Agriculture Is at the Heart of Challenges
tries it is now commonplace to apply tissue culture to address farmers' availability constraints of ade- Most people in Africa earn their living by produc- quate disease-free planting materials and rapid ing food. Employment and income earning oppor- improvement in crop production.
tunities are closely linked to productive agriculture.
In Kenya, for example, tissue culture technology Africa faces a number of agricultural challenges, has been initiated in different crops and has result- such as a shortage of arable land, inadequate ed in increased production of banana, pyrethrum, rainfall, soil fertility, pests and diseases. In addi- potato, cassava, sugar cane and flowers, most of tion, Africa lacks a technological base whereby which have become commercial enterprises. The new intensive production techniques can be demand for such materials is demonstrably high, BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE and the changes in the household income levels of gy to enhance food production and to alter the growers are becoming increasingly noticeable.
course of widespread poverty, hunger and starva-tion. Industrial countries, on the other hand, are The use of DNA-based molecular markets is now driven by market and profit. These distinctions applied in various forms to construct linkage maps must be understood and appreciated at the nation- of different species. This helps locate particular al, regional and global levels.
genes of relevance to the rapid improvement ofcrop and livestock breeding. Mapped markets are The ongoing debate about biotech in Africa has useful in speeding up the selection of traits for use created fear, mistrust and general confusion to the in conventional cross-breeding procedures. These public. It also has failed to seek the views of techniques are applicable to many African crop African policymakers and stakeholders. The improvement programs such as those seeking to debate about biotechnology for Africa should not enhance disease resistance.
be whether or not the continent needs biotechnol-ogy, but how biotechnology can be promoted, Biotech's Challenges in Africa
supported and applied in safe and sustainable Although there are many initiatives that create the ways that contribute to improved agriculture and structures and mechanisms necessary for the to the social and economic welfare of the people development of biotechnology in Africa, major dif- of Africa. The need for biotechnology in Africa is ferences exist between countries in relation to the very clear, and should not be confused with the level of application.
marketing/food surplus-driven forces of the indus-trial countries.
Countries face challenges in making decisionsabout what their level of involvement in biotech Collective Considerations for Biotech
should be. These challenges include: Many countries in Africa face severe reductions in • the development of a knowledge base appro- agricultural research funding. Because most priate to decision-making in the use of biotechno- biotech R&D is more expensive than convention- logical approaches; al research, it should be focused on solving priori-ty national or regional problems where it has a • priority setting for biotechnology aimed at solv- comparative advantage. This means that African ing specific problems of national importance; countries must develop appropriate policies for • the establishment of policy and regulatory biotechnology, and mount efforts to identify key structures for biosafety and intellectual property national priorities for biotechnology, bearing in mind the needs of the resource-poor who dependon agriculture for their livelihood. This approach • capacity development for enhancement of the should take into account national development poli- above issues; and cies, private sector interests, market possibilities, technology diffusion mechanisms and linkages.
establishment of cooperative mechanisms for biotech development, its transfer, and sustainable The question today should not be whether or not applications in Africa. Africa requires biotechnology, but rather howcountries in Africa can be assisted in harnessing Why the Controversy?
and safely applying biotechnology to support There is overwhelming evidence that the needs development. Egypt, Kenya, South Africa, and drive for biotechnology in Africa are quite dif- Zimbabwe, Botswana, Malawi, Mauritius, ferent from those of industrial countries. Africa's Cameroon and Zambia either have, or are in the agenda is based on the urgent need for technolo- process of adopting, explicit biosafety regulations BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE and guidelines, and some are involved in negotia- greatest effort is still focused on tissue culture tions for an international biosafety protocol.
application. The private sector is dominant in Biosafety frameworks should be accommodative biotechnology development in industrial counties, and promotional, rather than prohibitive, advocat- but in Africa more than 85 percent of biotechnol- ing the establishment of adequate and sound ogy R&D in the region is in the public sector, with biosafety regulations, risk assessment and man- universities and agricultural research institutions agement regimes, and instruments for monitoring taking on most of the responsibilities. Except for use compliance.
South Africa, local private sector engagement inbiotechnology is limited.
African countries face a compelling need to devel-op long-term policies on biotechnology that: What Africa needs most at this time of intenseEuropean-American debate on developments and • promote national biotechnology needs assess- use of GIOs is the creation of widespread public ment and targeted research; and policymaker awareness and education on all • provide incentives for the creation and financ- facets of biotechnology and biosafety. This will ing of local private biotechnology enterprises; enable the countries to make judicious decisionson the path to biotechnology use.
• promote local public R&D of foreign industry partnerships; and • improve and enhance scientific capacities and published in BioWorld Perspectives technology risk management into existing envi-ronmental, health and agricultural regimes. Elseborn Mwangi is an award-winning writer with the People Daily newspaper in Nairobi, Biotechnology R&D in Africa is presently focused Kenya, and a frequent commentator on on improving agriculture, with only very few initia- various health and science issues, with special tives targeting the ecological impact of genetically reference to eastern and southern Africa.
improved organism (GIO) development. The BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE AND MARKET IMPACT BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE New Mechanisms of Action Promising for Type II Diabetes While the market opportunity is "huge" for firms developing drugs to treat
Type II diabetes, the problems that have arisen with glitazones and Byetta
have created a hypersensitive environment,
cells in the pancreas and their inability to secrete BioWorld Today Washington Editor insulin to the way the body uses insulin, he said. A decade ago, the hope for treating Type II dia- One of the greatest strains on the nation's finan- betes centered on thiazolidinediones, also called cial stability is the increasing cost of health care.
glitazones, which act through the activation of a And in recent years, the focus has centered on the nuclear hormone receptor known as peroxisome burden of obesity-related diseases, such as Type II proliferator-activated receptors (PPAR) gamma. diabetes, which has been described by the Centersfor Disease Control and Prevention as "a growing But not long after the drugs were introduced onto the market, patients began reporting adverse reac-tions, specifically with Parke-Davis/Warner- About 24 million people in the U.S. have diabetes Lambert's Rezulin (troglitazone), which was found and about 90 percent have Type II, according to to be highly toxic to the liver, Kolbert noted. the American Diabetes Association (ADA).
Another 57 million Americans have prediabetes That drug was withdrawn from the market in — a condition in which blood glucose levels are higher than normal but not yet high enough to bediagnosed as diabetes. Diabetes cost the nation The FDA in 2007 called for black-box warnings $174 billion in 2007, according to ADA. on the other approved glitazones — Actos (piogli-tazone, Takeda Pharmaceutical Co. Ltd.) and Even during election season, the U.S. presidential Avandia (rosiglitazone, GlaxoSmithKline plc) — candidates talked about the financial burden to the alerting that the drugs may cause or exacerbate nation caused by obesity-related diseases and the heart failure. The labeling for Avandia was revised personal responsibility of Americans to decrease again later to warn about an increased risk of those costs, said analyst Jason Kolbert, of myocardial ischemia. Susquehanna Financial Group LLLP. Now under scrutiny are the glucagon-like peptide- The reality of that burden, he said, makes it even 1 diabetes drugs, such as Amylin Pharmaceutical more evident that new therapeutics urgently are Inc.'s Byetta (exenatide). The FDA has received at needed to treat Type II diabetes, a condition in least six reports of deaths from acute pancreatitis which the body either does not produce enough in patients taking Byetta. insulin or the cells ignore the insulin. While the market opportunity is "huge" for firms The traditional idea of replacing insulin in the developing drugs to treat Type II diabetes, the body, Kolbert said, "is now really a last resort to problems that have arisen with glitazones and treating diabetes." Byetta have created a hypersensitive environment, Newer therapies are looking at the disease from resulting in the clinical burden being set much various aspects, from the malfunction of insulin higher for new therapies, Kolbert said. BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Moving forward, he said, the drugs must have that are still making insulin will still die off, and good safety track records and demonstrate that they are left with a dead pancreas that cannot they create no additional problems when they are make insulin anymore, and they have to go on combined with other therapeutics, given that mul- shots of insulin like the Type I diabetics need." tiple agents are used to treat Type II diabetes. And XOMA's approach, Solinger said, is to target the with the costs to develop newer drugs expected to pathology that is causing the damage and stop the rise sharply due to the FDA now calling for larger cell death. The company's investigational drug, clinical trials of longer duration, early stage firms XOMA 052, is designed to block the activation of will be more reliant on big pharma to get their the IL-1 receptor, thereby preventing the cellular products to market, Kolbert said. signaling events that produce inflammation, he Nonetheless, he added, there currently is a "scien- explained. Blocking IL-1 beta also may minimize tific renaissance" taking place in diabetes treat- cardiovascular risks, Solinger added. ment discovery, with many early stage companies XOMA 052, which also has shown signs of cell now focused on the underlying nature of the dis- regeneration activity, is in Phase I/II testing, ease as an inflammatory condition. Solinger said, describing the current status of the XOMA's IL-1 Beta Approach
studies as the "multiple-dose and dose-findingparts of our trials." One such firm, Berkeley, Calif.-based XOMALtd., has focused its efforts on the role that the The firm expects to have a dataset from the two interleukin-1 (IL-1) pathway plays in diabetes trials ready by the end of the second quarter of 2009 and to have formal Phase II studies underway before the second half of next year. Much of the damage done in patients with Type IIdiabetes is done by the death of islet cells — the Targeting the NF-kappa B Pathway
cells that make insulin in the pancreas — second- San Diego-based Hollis-Eden Pharmaceuticals Inc.
ary to the elevation of blood glucose, explained came to Type II diabetes drug discovery from a dif- Alan Solinger, XOMA's vice president of clinical ferent anti-inflammatory approach, said CEO "Originally, it was thought this was all damage "We came at this fundamentally, chemically and directly from the high glucose, but they found out biologically, and we believe that by following those recently that the high glucose levels present in dia- processes we are going to be able to produce a betics actually increases the inflammatory signals better pharmaceutical to treat Type II diabetes, within the islet cells, causes release of IL-1 beta, because it is all within the system's biology," he which then feeds back on the cells and slows down explained. "It's all within endocrinology chemical the metabolism, and ultimately leads to the death messaging with hormones that is regulating this of the islet cells," he told BioWorld Financial biology that goes awry in Type II diabetes." Hollis-Eden is developing small-molecule com- The current therapy dogma in diabetes is either to pounds that are natural metabolites or synthetic replace the insulin that is missing in diabetics or to analogues of steroid hormones produced by the make the tissues that need insulin more sensitive adrenal glands, specifically focusing on dehy- to the circulating levels, Solinger said. Even droepiandrosterone. though patients might seem to be well controlledon current agents, ultimately, he said, "their pan- The firm's investigational compound, Triolex creases will poop out, and the remaining islet cells (HE3286), is an insulin sensitizer that acts by mod- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE ulating the nuclear factor kappa B pathway and Boyd, Array's senior director of medicinal other proinflammatory pathways, Hollis said. "Triolex works by down-regulating those precise Looking for molecules that increase the activity of an pathways that are causing insulin resistance," he enzyme, as opposed to inhibiting an enzyme, is an explained. "If we can mitigate the inflammatory "unusual approach" to drug discovery, he declared. signals that disrupt insulin signaling, we can pro- "This is one of the few examples that you can vide a clearer pathway for the insulin signaling to point to that actually changes the activity of an reach its receptor and to do its job, and that is to enzyme," Boyd said about Array's glucokinase improve insulin sensitivity and control blood glu- activator (GK), ARRY-403. cose levels to normal levels in the body." Preclinical results showed that ARRY-403 demon- Interim results of the firm's Phase I/IIa study strated potent, highly glucose-blood-level depend- showed that Triolex 5 mg and 10 mg in obese ent control of both fasting and non-fasting glucose insulin-resistant patients, or prediabetics, signifi- concentrations, he said. The firm plans to initiate cantly improved insulin sensitivity and lowered fast- a Phase Ib study of ARRY-403 in the first half of ing-blood glucose and insulin levels compared with 2009, and Boyd said Array intends to partner placebo, said Jaime Riveros-Flores, the company's with a larger firm for its Phase II program. vice president of endocrinology and metabolism. Array is developing the compound as a monother- Notably, he said, the data showed that insulin- apy and as a drug that can be used in combination resistant patients displayed a significantly exacer- with other treatments, said James Trevillyan, prin- bated inflammatory response characterized by cipal research investigator of translational biology. higher levels of the proinflammatory cytokines,such as monocyte chemoattractant protein-1, "There's clearly an unmet need for additional tumor necrosis factor-alpha, IL-6 and IL-1 beta mechanisms to help control glucose, and we think produced in lipopolysaccharide-stimulated periph- that GK activators will add to that armamentarium eral blood mononuclear cells from the patients. with current drugs to help diabetics meet that The study data showed a positive trend toward low- ering those inflammatory cytokines in patients who While firms like OSI Pharmaceuticals Inc. and received Triolex, which in turn was accompanied by Roche AG have more advanced GK activators in signs of glucose lowering, Riveros-Flores explained. development, that class of drugs still is in the early Hollis-Eden is enrolling patients with Type II dia- stages. "So it's still an open game," said analyst betes in a Phase IIb study. The firm anticipates Howard Liang, of Leerink Swann LLC. having interim data from the 90-patient study by Activating PPAR-delta Proteins
the end of 2008 or early 2009. While PPAR has gotten a bad rap recently, John Regulating Glucose via Glucokinase
Didsbury, president of Raleigh, N.C.-based DARA Activators
BioSciences Inc., said his firm is taking a new Boulder, Colo.-based Array BioPharma Inc.'s approach with its insulin sensitizer, DB959, which approach to Type II diabetes drug discovery tar- is designed to activate the PPAR-delta protein, an gets glucokinase, the enzyme that senses glu- enzyme that instructs cells to burn off fat and gen- cose in the pancreatic beta cells, stimulating erates high levels of muscle fibers needed for insulin release in a glucose-dependent manner.
endurance. The compound also uses PPAR- Glucokinase also regulates glucose uptake and gamma activity to help control high blood sugar, glucose production in the liver, said Steven BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE The firm believes that approach can be beneficial Hollis-Eden all still are in the very early stages of in treating cholesterol and lipoprotein abnormali- development, said Susquehanna's Kolbert, their ties in diabetics, he explained. products' new mechanisms of action hold greatpromise for patients with Type II diabetes in a DB959, which is expected to enter Phase I testing growing market. "With the stakes so high, we are in early 2009, has demonstrated a significant going to see a lot of continuing work in Type II reduction in weight gain of about 70 percent com- diabetes," he said. "Obviously, the demand for pared with Avandia, and preclinical testing therapies to treat this disease is only rising." showed synergistic effects on insulin sensitivityarising from both PPAR-delta and PPAR-gammaactivity, Didsbury said. published in BioWorld Financial Watch Although firms like DARA, Array, XOMA and Combination Drug Approach Aimed at Cancer's Network Despite advancements in developing targeted cancer therapies, success to date has
been modest at best. "It's difficult to go to ASCO and see people get excited about a
20 percent response [rate]," said Jason Kantor, an analyst at RBC Capital Markets.
By Jennifer Boggs inhibitors, histone deacetylase (HDAC) inhibitors BioWorld Today Assistant Managing Editor and proteosome inhibitors. But, despite advancements in developing targeted Over the last several years — really starting with therapies, success to date has been modest at best. the 1998 approval of Herceptin as the first suc-cessful targeted therapy to hit the market — can- "It's difficult to go to ASCO and see people get cer has become a more treatable disease. Even so, excited about a 20 percent response [rate]," most of the achievements have come in the form Kantor said, referring to the annual American of small disease progression-free increments and Society of Clinical Oncology meeting. He asked limited response rates. panelists during a therapeutic session on oncology There's been a "massive proliferation of targets," targets, "When are we going to see an 80 percent said Jason Kantor, an analyst at RBC Capital Markets, who led a discussion on cancer drug tar- The answer to that might come with a better gets and approaches at the 2008 BIO Investor understanding of the disease — or rather, dis- Forum in late October. "We're seeing an ava- eases, since different cancers are able to grow and lanche of data," he added, ticking off some of the mutate via different pathways. latest drug types that have gained traction in theoncology space: heat-shock protein 90 (Hsp90) "We should be looking at cancer at a molecular level, BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE as opposed to tissue area," said Daniel R. Passeri, Francisco-based Genentech Inc. on its own combi- president and CEO of Cambridge, Mass.-based nation study. In May 2008, Genentech initiated a Curis Inc. The goal is to "shut down the network." Phase II trial to test approved vascular endothelialgrowth factor (VEGF) inhibitor Avastin (beva- He offered Tarceva (erlotinib) as an example of a cizumab) with GDC-0449, a small-molecule drug that is successful by market standards, but, Hedgehog antagonist, in metastatic colorectal "from a clinical standpoint, has limited efficacy." cancer. That trial is designed to randomize 150 Tarceva, from Genentech Inc. and OSI patients to receive FOLFOX or FOLFIRI Pharmaceuticals Inc., works by targeting a well- chemotherapy in combination with Avastin, plus established cancer pathway, the epidermal growth either GDC-0449 or placebo, with progression- factor receptor (EGFR), and is approved in non- free survival as the primary endpoint. small-cell lung cancer (NSCLC) and pancreaticcancer. The aim is to "look at network disruption," Passerisaid. "Avastin hits one [target], Hedgehog hits But a number of cells "have adapted to bypass that (EGFR) pathway," Passeri said. Pamela Munster, a clinician at the University of And, in that way, cancer is much like HIV in its California in San Francisco, with experience run- ability to mutate and become resistant to treat- ning breast cancer trials, agreed that single-path- ment. In HIV, the first approved antiretroviral ther- way inhibitors "are not going to work," and the apy, AZT, was efficacious at first, but AZT-resist- aim in cancer drug development should focus on ance soon prompted drug developers and clini- "getting rid of single-agent trials." cians to seek combination, or cocktail, therapies. But, she added, that becomes a "major issue" Similarly, Novartis AG's Gleevec (imatinib) met when dealing with two or more development- with success when it gained approval as a target- ed therapy for chronic myelogenous leukemia, butmutations in the Bcr-Abl protein in CML patients Attempting a clinical study involving more than have led to problems of drug resistance. A combi- one unapproved therapy carries a whole host of nation approach might counteract that resistance, regulatory risks — if the combination fails, how and several companies are working in that area, will researchers know which therapy fell short, for such as GPC Biotech AG, of Martinsried, example — not to mention possible legal entan- Germany, which recently presented preclinical glements in trials involving two companies' drugs.
data showing that its multitargeted protein kinase So ongoing combination studies are restricted to inhibitor, RGB-286638, demonstrated strong designs involving either two approved products or activity in animal models of CML that are Gleevec- an approved product plus an unapproved drug. resistant. Phase I testing is anticipated to begin Ongoing late-stage trials include a Phase III study later this year. testing of Avastin plus Torisel (temsirolimus), an "We're really at the beginning of understanding" mTOR inhibitor from Madison, N.J.-based Wyeth, the combination approach in treating cancer, compared to Avastin plus interferon-alpha in Passeri said. "They key is to understand which advanced renal-cell carcinoma patients. The pri- patients are amenable" to certain disease pathway mary endpoints include tumor measurements and disruption, and, as with HIV treatment, combina- survival, and the trial is expected to conclude in tions might have to be changed or adjusted "as molecular characteristics change." Another Phase III trial is evaluating the effect of Curis is working with partner South San Avastin added to chemotherapy and Herceptin in BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE HER2-positive breast cancer patients. Disease- oral dosages of 150 mg of Tarceva added to free survival is the primary endpoint, and data are Avastin infused at 15 kg/mg every three weeks expected in 2012. failed to improve overall survival in NSCLCpatients whose disease had progressed following Multiple Phase II studies are testing Avastin in platinum-based chemotherapy. That combination, combination with other targeted therapies. Those however, did exceed the median survival of 6.7 include: Avastin plus RAD001 (everolimus, months reported from an earlier Tarceva study. Novartis), an mTOR inhibitor, in advanced low- orintermediate-grade neuroendocrine carcinoma; Even though it missed the primary endpoint, data Avastin plus Erbitux (cetuximab, ImClone Systems from that study will "give us a big clue," Thomas Inc.) plus irinotecan in trials involving second-line Lynch, chief of hematology and oncology and colorectal cancer patients and recurrent or director of the Center of Thoracic Cancers at metastatic head and neck cancer patients; and Massachusetts General Hospital, said during a Avastin plus Velcade (bortezomib, Takeda) in separate panel on the lung cancer space. recurrent malignant glioma. That clue, it seems, is the importance of biomark- Herceptin is being tested in a Phase II trials in ers and molecular profiling. For example, data combination mTOR inhibitors Sirolimus (rapa- emerging from this year's ASCO meeting indicat- mune, Wyeth) and deforolimus (Ariad ed that colorectal cancer patients with a mutated Pharmaceuticals Inc.) in breast cancer patients. A KRAS gene were unlikely to benefit from treat- separate Phase II trial is examining Herceptin plus ment with ImClone's Erbitux. Therefore, testing Tykerb (lapatinib), a kinase inhibitor from London- for that biomarker would help predict which based GlaxoSmithKline plc. Whether any of those patients would respond best to Erbitux treatment. combinations will yield superior results compared Molecular profiling is key for reaching a better to single agent treatment still remains to be seen. response rate, agreed Curis' Passeri. There already have been a couple of disappoint- "It's exciting that we're seeing biological respons- ments with the combination targeted therapy es" in clinical studies, he said. "Now we have to approach. In March 2007, Thousand Oaks, Calif.- based Amgen Inc. reported results from a PhaseIIIb trial that added its approved Vectibix (panitu- Despite the setback with the Avastin/Tarceva mumab), an anti-EGFR antibody, to Avastin plus combination trial in NSCLC patients, additional chemotherapy, which showed a lower progres- studies are ongoing to test the combination of sion-free survival rate in colorectal cancer patients those targeted therapies in mesothelioma, liver compared to those receiving only Avastin and cancer, locally advanced rectal cancer and as first- line consolidation chemotherapy after carboplatin,paclitaxel and Avastin induction therapy in Another disappointment, a pilot Phase II study of advanced ovarian, Fallopian tube and primary Avastin plus Erbitux, with or without gemcitabine, peritoneal cancer and papillary serous mullerian in pancreatic cancer was terminated due to a lack tumors. All those studies are in Phase II. of efficacy in both study arms. And last month, Genentech and Melville, N.Y.-based OSI reported that the combination of daily published in BioWorld Financial Watch BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Discovery of Toxic Element in AD Forces Paradigm Shift "This work is important because it will advise how drug intervention is best directed," said
Ciaran Regan, professor of neuropharmacology at the School of Biomolecular and Biomedical
Science, University College Dublin. "If you can reduce or stop the production of amyloid-beta
as opposed to reducing the amyloid plaque load, treatment might be more effective."
By Sharon Kingman The Irish-American team of researchers isolated BioWorld International Correspondent amyloid-beta monomers, dimers and trimers fromthe brains of several subjects who had died with A new study suggested that drugs to treat Alzheimer's disease. Alzheimer's disease (AD) should target the proteins Because they knew that the severity of the demen- that comprise the plaques that form in the brain in tia in Alzheimer's disease correlated strongly with that condition, rather than the plaques themselves. the abundance of amyloid-beta in the brains of suf- Ciaran Regan, professor of neuropharmacology ferers, the researchers then set out to characterize at the School of Biomolecular and Biomedical the physiological effects of the material they had Science, University College Dublin, in Ireland, told BioWorld International: "The results of our work They focused particularly on soluble oligomers have caused a paradigm shift in how we think that are the first to form once amyloid-beta about the plaques present in Alzheimer's disease.
monomers are made. It seems that it is not necessarily the plaques thatare causing the damage, but rather the intermedi- In a series of experiments, the researchers showed ates that are forming those plaques." that long-term potentiation — a long-lastingincrease in communication between neurons that An account of the research appeared in the June results from stimulating neurons and what is 22, 2008, issue of Nature Medicine, in a paper thought to be a model of learning and memory — titled: "Amyloid-beta protein dimers isolated directly from Alzheimer's brains impair synapticplasticity and memory." They also found that the converse was true. Long-term depression — the process by which neuronal The first author is Ganesh Shankar of Brigham synapses become weaker, a model of forgetting — and Women's Hospital and Harvard Medical was enhanced with the soluble amyloid-beta. School in Boston. The researchers also trained rats to avoid a cham- In Alzheimer's disease, a protein found in the ber in their environment. membranes of neurons called amyloid precursorprotein (APP) is broken down, forming amyloid They then injected the soluble amyloid-beta oligomer into the animals' brains and tested theirsubsequent memory for avoiding the chamber. The latter molecules stick to each other, formingdimers, trimers and other oligomers. Ultimately, Animals that were injected three hours after train- these oligomers form the large aggregates known ing — at about the time that, according to other research, the synapses become remodeled follow- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE ing memory training — entered the chamber Regan said scientists had understood that amyloid- again significantly faster than those injected with a beta fragments contribute to the plaques, but the control substance. That result suggested that the direct and toxic role of the molecules had not been treated animals had an impaired ability to retain fully appreciated. the learned behavior. While research already has shown how amyloid- Further experiments showed that the insoluble beta can influence the connections between nerve cores of plaques from Alzheimer's brains did not cells and synapses, future studies will attempt to affect long-term potentiation, but that this process demonstrate how this synaptotoxicity manifests was impaired when the plaque cores were modi- itself in live animals. fied to produce soluble amyloid-beta dimers. "In addition, we want to know whether exposing Writing in Nature Medicine, the authors concluded nerve cells and their synapses to amyloid-beta during that "plaque cores are largely inactive, but sequester the learning process actually reduces the number of amyloid-beta dimers that are synaptotoxic. synapses that form with learning," Regan added. "We conclude that soluble amyloid-beta oligomers "We also want to know when neurodegeneration extracted from Alzheimer's disease brains potent- occurs: Does this happen immediately, or is it ly impair synapse structure and function and that dimers are the smallest synaptotoxic species," "Thirdly, we want to find out whether the amyloid- beta oligomers themselves influence the way in "This work is important because it will advise how which amyloid precursor protein is processed in drug intervention is best directed," Regan said. "For the brain," Regan noted. example, if you can reduce or stop the productionof amyloid-beta as opposed to reducing the amyloidplaque load, treatment might be more effective." published in BioWorld International BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Antibiotics for Resistant Bugs Possible in Two Years' Time Scientists at Prolysis in Oxford, UK, have shown that members of a new class
of drugs are effective in a lethal infection model that uses S. aureus.
By Sharon Kingman Prolysis was founded with the aim of discovering BioWorld International Correspondent new antibacterial drugs using the guidance andinsights of the bacterial cell biologist, Jeff Errington.
A completely new class of antibiotics that works Errington, who is now the director of the Institute for Cell and Molecular Biosciences at the University aureus (MRSA) could enter clinical trials within the of Newcastle, UK, predicted that it should be possi- next couple of years. The new drugs work by ble to identify and develop novel compounds that inhibiting bacterial cell division. would inhibit bacterial cell division. While bacterial resistance to all antibiotics is In bacteria, cell division involves a large number of inevitable, researchers predict that, because none conserved and essential proteins. Loss of any of of the antibiotics in current use attack the same these proteins causes bacteria to die. Importantly, target as this new class of drugs, there should be the bacterial cell division process is different from no pre-existing resistance to the new antibiotics. that of mammalian cells, so any drug developedthat targets bacterial cell division should not cause Scientists at Prolysis Ltd. in Oxford, UK, have side effects in human or mammalian cells. shown that members of the new class of drugs,one of which is called PC190723, are effective in Bacterial cell division starts with the formation of a a lethal infection model that uses S. aureus. ring by a protein called FtsZ. The FtsZ ring recruitsother key proteins to form a complex that organizes Steve Ruston, CEO of Prolysis, told BioWorld the synthesis of the new cell wall, by forming a sep- International, "PC190723 is an important tum between the two daughter cells. Once the sep- landmark compound that already has many tum is complete, the daughter cells can separate.
attributes that you would want to see in a human PC190723 works by binding to and inhibiting FtsZ medicine. There are other attributes that we are activity. FtsZ is related to the mammalian protein planning to optimize in order to create a com- beta-tubulin, which is the target for anticancer drugs pound with a very good chance of going through such as Taxol. Taxol binds to a site in beta-tubulin that the remaining preclinical development hurdles, is analogous to the PC190723 binding site in FtsZ. and gaining regulatory approval to begin humanclinical evaluation." Researchers from Prolysis, led by LloydCzaplewski, director of research, reported in That process will, he predicted, take almost two Science that PC190723 had potent antibacterial years. Prolysis then plans to find a licensing part- activity against all strains and species of staphylo- ner to assist with larger clinical evaluations, prod- cocci that were tested. Those included an MRSA uct registration and launch of the new product. A strain and a multi-drug resistant strain of S. aureus report on PC190723 appears in the Sept. 19, (MDRSA) that is resistant to many of the major 2008, issue of Science, in a paper titled "An classes of antibiotics. The researchers also tested Inhibitor of FtsZ with Potent and Selective Anti- the drug in an infection model of staphylococcal Staphylococcal Activity." septicemia, with very good results. Ruston said, BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE "The pharmaceutical industry has brought rial anaerobic respiration. Hiratsuka et al. have through very few new classes of antibiotics over called it the futalosine pathway. the past 20 or 30 years, and the fact that this is a Writing in the same issue of Science, David Payne novel class of drugs means that it should have clin- of GlaxoSmithKline plc, of London, concluded, ical utility for an extended period of time before "The lack of this pathway in humans and its pres- resistance develops." ence in bacteria such as Chlamydia . .
In the same issue of Science, Tomoshige Helicobacter pylori . . Campylobacter jejuni . .
Hiratsuka, of the Toyama Prefectural University in and Spirochaetes . . could make it an attractive Japan, and colleagues reported finding a group of antibacterial drug target for these specific previously unrecognized bacterial proteins that could provide targets for new antibiotics. The pro-teins belong to a new pathway for the biosynthe-sis of menaquinone, a molecule needed for bacte- published in BioWorld International Enormous New Gene Holds Out Hope as Therapy for Eye Disease In total, 1 in 3,000 people are affected by retinitis pigmentosa. In about half
of the cases, the disease is inherited in an autosomal recessive fashion. Researchers
have identified about 20 different genes that appear to play a role in between
1 percent and 5 percent of autosomal recessive cases of retinitis pigmentosa.
By Sharon Kingman vision in humans, including how the photorecep- BioWorld International Correspondent tor cells of the retina work. Intriguingly, EYS is notpresent in the mouse retina, nor in the retinas of The discovery of a new gene that, when mutated, certain insects, such as bees. appears to be responsible for many cases of the Shomi Bhattacharya, professor of experimental human eye disease, autosomal recessive retinitis ophthalmology at the Institute of Ophthalmology, pigmentosa, eventually could lead to new gene University College London, told BioWorld therapies for this condition. International, "There is no way of curing this dis- The gene, which the researchers have called EYS, ease until we understand the genetic basis for it.
is the largest gene yet identified that is specifically Now that we know the gene, and once we have expressed only in the eye. The protein encoded by worked out the biochemical basis for the disease, EYS probably has a role in maintaining the integri- then it should be possible to treat patients for such ty of the photoreceptor cells of the retina. conditions in the future using gene therapy." Physiologists hope that EYS will allow them to Bhattacharya, together with his collaborators led gain a better understanding of the process of by Guillermo Antinolo of the Hospitales BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Universitarios Virgen del Rocio in Seville, Spain, screened the genomes of affected individuals for gave an account of their research in the Oct. 5, deletions, using the technique known as array 2008, issue of Nature Genetics, in a paper titled comparative genomic hybridization. That strategy "EYS, encoding an ortholog of Drosophila space- helped them to identify a 100-kilobase section of maker, is mutated in autosomal recessive retinitis the genome that was deleted in all affected mem- bers of one of the original families studied. An earlier study by researchers at the Institute of That segment contained six of the predicted genes, Ophthalmology proved that gene therapy for reti- so the team then began to screen those genes for nal degeneration could work in principle, mutations. That approach allowed them to focus Bhattacharya said. In that study, published in the on two of those predicted genes, which were also May 22, 2008, issue of the New England in the same location as the 100-kilobase deletion.
Journal of Medicine, four young adults with Further investigation showed that the two genes Leber's congenital amaurosis (LCA) were given a were, in fact, part of a much larger gene consisting treatment to replace the retinal gene that they of 2 million base pairs of DNA, which now is called lacked. The therapy involved delivering the gene, the EYS gene. EYS has 43 exons. using an adenoviral vector, to the retina. One of Using the polymerase chain reaction to amplify the three patients showed an improvement in visu- messenger RNA derived from EYS, the team was al function following the treatment. able to show that a gene transcript of the expect- In total, 1 in 3,000 people in the general popula- ed size could be obtained from the retina, but not tion are affected by retinitis pigmentosa. In about from other tissues, as well as from a cell line of half of the cases, the disease is inherited in an photoreceptor-like cells. Additional work showed autosomal recessive fashion. Researchers have that six separate mutations were present in five of identified about 20 different genes that appear to the affected families studied. Four of those muta- play a role in between 1 percent and 5 percent of tions involved deletions and two involved non- autosomal recessive cases of retinitis pigmentosa.
sense substitutions; however, all six resulted in the EYS represents a breakthrough because it proba- creation of premature stop codons. bly accounts for a higher percentage (about 10 Because it has been shown that mRNA containing percent) of cases of autosomal recessive retinitis premature stop codons undergoes immediate decay, the authors speculated that the disease The trawling by Bhattacharya and Antinolo for mechanism in the affected families may be due to additional genes responsible for retinitis pigmen- a complete absence of a functional EYS protein. tosa had begun with the mapping of the RP25 Tests on 200 control individuals showed that locus to chromosome 6 in Spanish families, by none had any of the mutations identified in the Antinolo group. The linkage region was patients with disease. quite large and contained in excess of 110genes as potential candidates for RP25. After Initial examination of the protein encoded by the eliminating 15 candidate genes whose functions EYS gene suggested that it is a large protein of already were known and systematically screen- more than 3,000 amino acids, and that it includes ing a further 45 genes, the research team were at least 21 domains that resemble epidermal helped by a study that mapped the RP25 locus growth factors. Its highly unusual structure resem- in five additional families, greatly narrowing the bles that seen in the Drosophila spacemaker area of interest. In parallel, Bhattacharya and his colleagues also Drosophila spam protein is expressed in the eye BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE of many species of insects, including fruitflies form a single communication channel with the (Drosophila melanogaster) and houseflies (Musca domestica Linnaeus), where the photoreceptor Bhattacharya predicted that biologists will be very cells of each ommatidium of the compound eye interested to explore the meaning of these differ- are separate from each other. In this type of ences, and how the EYS protein plays a role in insect eye, each photoreceptor cell has a direct modulating retinal architecture and in vision. connection with the brain. In other species ofinsect, such as the mosquito (Anopheles gambi-ae) and the honey bee (Apis mellifera), spam is published in BioWorld International not expressed in the eye and the photoreceptorcells of each ommatidium have fused together to BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE ACT's Business Model Aims for Steady Stream of Cancer Drugs Big pharma is "spending more money than ever [on research and development],
yet the number of new chemical entities continues to decline," said Advanced
Cancer Therapeutics President and CEO Randall Riggs.
By Jennifer Boggs cious at that point, the company will advance the BioWorld Today Assistant Managing Editor candidates into Phase I. And at the end of Phase I, ACT likely will look at Hoping to bridge the gap between the lab and big options for licensing or selling the compound to a pharma's sparse pipelines, 2007 start-up large pharma firm that has the resources and Advanced Cancer Therapeutics is working to rap- expertise to take it deeper into clinical develop- idly develop the most promising early stage can- ment and potential commercialization. cer compounds emerging from work at the JamesGraham Brown Cancer Center at the University Big pharma is "spending more money than ever of Louisville in Louisville, Ky. [on research and development], yet the number ofnew chemical entities continues to decline," Riggs The firm, which was founded in January 2007 told BioWorld Today. "So we have to start think- though it officially started operations in October ing outside the box." 2008, is not the typical university spinout firm.
Under its agreement with the University of At ACT, "we have a very nice engine" for discov- Louisville, ACT has access to the 20-plus poten- ery and development, he added, describing the tial compounds in development in labs at the relationship with the James Graham Brown cen- James Graham Brown center — as well as ter as a "quid pro quo effort." access to the roughly 50 scientists at the center— which spends about $20 million to $25 mil- "We bring in the compounds without having topay for them," Riggs said. ACT then aims to facil- lion each year on drug discovery and preclinical itate the rapid advancement of the most promis- ing candidates — weeding out the less effective In return, the university holds a 30 percent stake ones before they can rack up too much in devel- in ACT, which would allow it to share in any rev- opment costs — into the hands of a larger com- enue generated from its research. pany for late-stage work. "It's a different model," said President and CEO In addition to the university's stake in future rev- Randall Riggs, adding that it took founders and enue, Riggs said the deal allows the university sci- local venture capitalists Dale J. Boden and Ty entists to "do what they do best" by focusing on Wilburn "two years to negotiate this business their research without becoming entangled in the structure with the university." process of trying to translate their discoveries intocommercial operations. The strategy is simple enough. ACT is permittedfirst right to refusal on compounds emerging from It's a business model encouraged by Donald the cancer center and will focus on taking the Miller, who was named director of the James chosen compounds rapidly through preclinical Graham Brown Cancer Center in 1999, Riggs testing and toxicology. If the data still look effica- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Miller previously founded Aptamera Inc. in 2001, that's OK because we have other products to go with a single product — aptamer drug AGRO100 for cancer. Louisville-based Aptamera had moved More than 20 compounds are in early develop- the drug into Phase I in pancreatic cancer when it ment at the James Graham Brown center, most of was acquired in 2005 by Antisoma plc, of them small molecules, and "we're watching close- London, for $21.5 million. ly," he added. "We're looking at compounds at the With ACT, "we wanted to continue that success, preclinical/animal testing phase to see whether except this time, we'd create a company with a they clearly illustrate in vivo activity." portfolio of products, which diffuses the risk and To date, ACT has raised a little more than $2 mil- creates more value," Riggs said. lion, and Riggs said the firm is "hoping for about So far, ACT has in-licensed two product candi- $8 million more," with the aim of getting two dates. One is a macrophage migration inhibitor investigational new drug applications filed before factor small-molecule compound aimed at block- the beginning of 2010. ing angiogenesis in tumor cells, and the other is a The company only has two employees, relying small molecule designed to starve cancer cells by heavily on the scientists at the cancer center. blocking their uptake of glucose. But whetherthose two become the first clinical compounds As part of ACT's arrangement with the university, advanced to the clinic by ACT still remains any- it also has access to a group of six medicinal chemists, who are responsible for optimizing theselected molecules for further testing. "I always emphasize that we want to find theAchilles' heel [in each product] quickly, so wecan move on and avoid spending lots of money published in BioWorld Today on something that won't be effective," Riggssaid. "So many products we pick might fall, but BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Q Therapeutics Seeks to Repair Rather than Replace Neurons The name Q-Cells refers to the cells' ability to follow endogenous cues. The
cells are harvested from donor tissue; isolated, purified and frozen; and then
injected into the brain or spinal cord near the point of injury. From there,
the cells migrate to the lesion and start their repair work.
By Trista Morrison Farrar, a founder of Myriad Genetics Inc. and BioWorld Today Staff Writer Q Therapeutics raised about $5 million in a Series Deborah Eppstein, president and CEO of Q A financing in May 2004. Earlier this year, the Therapeutics Inc., acknowledges that developing Salt Lake City-based company got another $8 mil- stem cell therapies to replace damaged organs is a lion in the first close of its Series B round. Its investors include vSpring Capital, Invitrogen That's why her company uses glial progenitor cells Corp., Epic Ventures, Toucan Capital, University to repair rather than replace neurons, an of Utah Research Foundation, Salt Lake Life approach she anticipates may be applicable in Science Angels and Q management. treating a host of neurodegenerative diseases. Eppstein said Q Therapeutics hopes to raise The company's Q-Cells are "technically not stem between $7 million and $12 million in the second cells," Eppstein explained. They are lineage- tranche of its Series B round, set to close in the first restricted glial progenitor cells that differentiate quarter of 2009. That money will allow the compa- into oligodendrocytes, which produce the myelin ny to get its first clinical data, which Eppstein noted sheaths that insulate neurons, and astrocytes, will include both safety and initial efficacy findings. which make growth factors and support the health Q Therapeutics plans to conduct a dose-ranging Phase I/IIa trial at Johns Hopkins University to The name Q-Cells refers to the cells' ability to fol- evaluate a single dose of Q-Cells in patients with low endogenous cues. "We don't have to direct transverse myelitis, a severe form of multiple scle- them," Eppstein said, adding that the cells are har- rosis in which patients are wheelchair-bound.
vested from donor tissue; isolated, purified and Preclinical studies are under way, and data pub- frozen; and then injected into the brain or spinal lished in the June 2008 issue of Cell Stem Cell cord near the point of injury. From there, the cells showed that Q-Cells remylinated neurons in mice migrate to the lesion and start their repair work, and improved survival in what otherwise would be which includes remyelination as well as supporting a lethal murine model. neuronal health. No abnormal affects have been observed in pre- The Q-Cells were identified by Q Therapeutics' clinical studies to date. The company expects to co-founder Mahendra Rao through research con- file its investigational new drug application in ducted at the University of Utah and the National 2009 and start the trial shortly after. Institutes of Health, where he headed stem cellwork for the National Institute of Aging. Rao start- Eppstein said the company has talked with sever- ed the company in 2004 with help from Dennis al pharmaceutical companies that are "very inter- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE ested in working with us" if the Q-Cells can create orphan diseases, Eppstein said Q Therapeutics myelin in humans the way they have in mice. may be able to conduct truncated clinical pro-grams consisting of Phase I/IIa and Phase IIb/III In addition to demyelinating diseases such as mul- studies. She doesn't anticipate needing to enroll tiple sclerosis, Q-Cells may be applicable in cere- large numbers of patients but said the company bral palsy, spinal cord injuries, white matter has a Q-Cell source sufficient to address multibil- stroke, amyotrophic lateral sclerosis (ALS), lion-dollar markets. Parkinson's disease and Alzheimer's disease. Thecompany has grants supporting early research in In the interim, Q Therapeutics is developing drug ALS and spinal cord injury, and Eppstein said the discovery research tools based on its cells.
team plans to seek additional grants to comple- Eppstein projected the tools could be on the mar- ment its venture capital investment. ket and starting to generate revenue within a year. Q Therapeutics also has a collaboration with the Q Therapeutics has 10 full-time employees. Buck Institute for Age Research to study Q-Cells inParkinson's disease. published in BioWorld Today Because many of its intended indications are Dicerna Offers New Generation of RNAi Therapy: DsiRNA Dicerna plans on administrating the DsiRNA-nanoparticles combination intravenously.
The longer duration of action allows DsiRNA to be administrated every few weeks,
similar to the "dosing paradigm . . currently used for monoclonal antibody therapy."
By Daria Theodora the current RNAi therapy method that employs BioWorld Today Staff Writer synthetic 21-mer small interfering RNA (siRNA).
The difference is that the dicer-substrate small The already-crowded RNA interference (RNAi) siRNA (DsiRNA) "enters the pathway further therapeutic playground is welcoming Cambridge, upstream much like microRNA would," CEO and Mass.-based Dicerna Pharmaceuticals, which co-founder James Jenson explained. enters the space through "a second doorway." DsiRNA bind to an enzyme called dicer, which dice This new kid on the block brings in a second gen- the substrates into shorter fragments, before being eration of RNAi technology, which the company incorporated into RISC (RNA-induced silencing said is an improvement over the current method complex), triggering the interference of gene trans- and at a more upstream level. lation. The current synthetic 21-mer siRNA passthe dicer enzyme and directly enter RISC. The so-called dicer substrate technology employedby Dicerna works through the same pathway with Advantages of the longer 27-mer DsiRNA over BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE the conventional siRNA therapy, according to "You can attach either a peptide or an aptamer or Jenson, include increased potency, longer dura- antibody fragment that will target a specific recep- tion of action and the ability to attach targeting tor on the cell surface," Jenson said, explaining moieties for specificity. that the attached moieties will be clipped by dicerinside the cell and be degraded naturally. "One can attain . . five- to tenfold greater poten-cy [in knocking] down a specific target than a 21- The process recently has been shown in a study by mer targeting the same sequence," Jenson said, John Rossi, professor of molecular biology and then quickly added that increased property is a dean of the graduate school of biological science tremendous advantage "in a field which delivery is in Beckman Research Institute of the City of Hope still optimized." in Duarte, Calif., and also Dicerna scientific co-founder. It was published in the August 2008 issue Dicerna, founded in 2007, currently is pursuing of Molecular Therapy. three programs internally: solid tumors/oncology,although the specific target molecules are not yet The study itself was an approach for human public; diabetes, specifically gluconeogenesis; and immunodeficiency virus-1 (HIV-1) therapy, which hepatitis C virus. For those, Dicerna plans to part- Jenson mentioned that Dicerna is not pursuing, ner with other companies that already have the but is opened to partnering. FDA-approved delivery methods. The intellectual property for the DsiRNA, which "We consider this to be the most efficient way to was invented by Rossi and Mark Behlke, "covers a begin our drug development program: a well-vali- range of 25- to 35-nucleotide (nt) long" and dated target that is suitable for dicer substrate and according to Jenson, that, plus the fact that the combine them with nanoparticle technology that dicer-substrates have enhanced biological proper- exists today," Jenson said. ties, provides Dicerna with a strong IP position"that is separate from the Tuschl I intellectual Dicerna plans on administrating the DsiRNA- property estate that covers the 21-mers." nanoparticles combination intravenously. Thelonger duration of action, which Jenson said is Jenson noted that City of Hope also provided another advantage of DsiRNA and of a great inter- MDRNA Inc. (formerly Nastech), of Bothell, est to potential pharma partners, allows DsiRNA Wash., with the right to dicer-substrate technolo- to be administrated every few weeks, similar to the gy, but no other companies have access to that IP "dosing paradigm . . currently used for mono- now. Jenson added that DsiRNA IP will not inter- clonal antibody therapy." fere with Tuschl II as well. AlnylamPharmaceuticals Inc., also of Cambridge, Mass., There are several partnering discussions under-way, he noted, and Dicerna is going to license currently holds exclusive rights to the Tuschl II existing technologies on a target-by-target basis. patent on a worldwide basis, and has a license tothe Tuschl I IP. Both patents are keys to conven- Dicerna also is developing the second-generation tional siRNA methods. approach for its products — targeted moieties,which Jenson said will be "very much a part of the Dicerna aims to have its first investigational new future of RNAi therapeutics: more targeted . .
drug application (IND) package by the end of RNAi drugs, as opposed to the current approach 2009 and to file in early 2010. involving nanoparticle encapsulation." Roberto Guerciolini, Dicerna senior vice president That can be achieved by utilizing the unique of pharmaceutical development, was previously advantage of dicer-substrates: the ability to attach chief medical officer and senior vice president of targeting moieties to target specific tissue or cells.
development at Sirna Therapeutics Inc., now part BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE of Merck & Co. Inc., and was part of the team anything that fits in our agreed-upon workplan." that developed the first IND for chemically modi- Investors of Dicerna include Oxford Bioscience fied siRNA then, Jenson said. Partners' Doug Fambrough, previously the direc- The company closed a Series A financing round tor of investors at Sirna; Skyline Ventures' July 15 for $21.4 million, and Jenson said he Stephen Hoffman, previously involved with both expected that would get Dicerna to the IND Alnylam and Sirna; and new partner Abingworth. "Alnylam is an Abingworth portfolio company," The company plans to employ about 30 people in Jenson noted, "we have three investor groups house, and currently is halfway there, and they will who are very familiar with the RNAi space. .
work out the in vivo biology. Integrated DNA We think that's another validation of [dicer-sub- Technology Inc., of Coralville, Iowa, is its "chem- strate] technology . . and the validation of the istry department," Jenson added. Behlke, who is independence of IP doorway." also Dicerna's co-founder, is currently the vicepresident of molecular genetics and biophysicsand chief scientific officer there. Jenson said IDT, published in BioWorld Today a supplier of oligonucleotides, "will make for us Zafgen Shrinks Fat by Inhibiting Angiogenesis in Adipose Cells An obesity drug that is both efficacious and well tolerated easily could become
a blockbuster. The overall U.S. market for weight-loss remedies and diet products
was more than $50 billion in 2006, but prescription pharmaceutical products
account for less than 1 percent of the total market.
By Trista Morrison sive blood vessel growth in wet age-related macu- BioWorld Today Staff Writer lar degeneration. Yet Zafgen CEO Thomas Hughes said the compa- Zafgen Inc. is developing small-molecule angio- ny is "not aware that anyone else" has thought of genesis inhibitors that target adipose cells, essen- applying angiogenesis inhibition in obesity. tially shrinking fat. "It's very interesting; it's very unique; it's why I'm The concept certainly seems logical: Angiogenesis here," said Hughes, who made his public debut as inhibitors like Avastin (bevacizumab, Genentech head of the Cambridge, Mass.-based start-up this Inc.) have established that stopping blood vessel week. He previously served as vice president and formation in cancer cells can shrink tumors, and global head of cardiovascular and metabolism dis- the success of Lucentis (ranibizumab, Genentech ease at the Novartis Institutes for BioMedical Inc.) proves the same mechanism can stop exces- BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Credit for Zafgen's approach goes to co-founder capsules C-IV) deliver only modest efficacy and Maria Rupnick, whose research at Boston suffer from high discontinuation rates due to side Children's Hospital established that the ability of fatty tissue to expand depends on blood vessel for- Several new obesity drugs are in late-stage clinical mation. In 2002, she published a study in the trials, and most work on targets in the brain to Proceedings of the National Academy of regulate hunger and metabolism. For example, Sciences demonstrating that treatment of obese Arena Pharmaceuticals Inc.'s lorcaserin agonizes mice with various angiogenesis inhibitors led to the 5-HT2c serotonin receptor, Orexigen significant weight loss that restored the mice to Therapeutics Inc.'s Contrave combines anti-addic- near normal weights. tion and depression drugs, and Vivus Inc.'s Qnexa The antiangiogenesis treatments also resulted in combines appetite and metabolism regulators with decreased endothelial cell proliferation and a drug that increases feelings of fullness. increased apoptosis, as well as decreased appetite Hughes said Zafgen's approach should be com- and increased metabolic rate. patible with drugs seeking to regulate food intake Zafgen's orally available small molecules specifical- or metabolism. The company expects to begin ly inhibit angiogenesis in adipose cells, the blood clinical trials next year, although details regarding vessels of which are "inherently different" from the clinical pathway — which could involve those found elsewhere in the body, Hughes said.
monotherapy or combination therapy for obesity While he declined to discuss specific targets, he or for a subset of patients such as obese diabetics said Zafgen's approach is "more of a process tar- — have not been solidified. geting" than tissue-targeting approach and seeks Founded in 2005, Zafgen raised $2 million in a to manipulate the close relationship between Series A round in 2006 and $20 million in a adipocytes and the endothelial cells in capillaries. Series B round in October 2007. Investors include Preclinical studies have yet to be published, but Atlas Venture, Third Rock Ventures and Great Hughes said the data indicated "absolutely pro- found" efficacy in several "gold-standard models" Hughes said the money should last about 18 of obesity. And while he noted that it is "very early months given the company's "capital efficient" days" and that "real safety studies" haven't yet been done, that efficacy has occurred "in theabsence of any tolerability issues." Potential partners already have "identified them-selves as being interested" in Zafgen's technology, An obesity drug that is both efficacious and well tol- Hughes said, although it would be "premature" to erated easily could become a blockbuster.
discuss any partnering plans this early in the According to a report from JPMorgan Securities game. For now, Zafgen intends to focus on com- Inc., the overall U.S. market for weight-loss reme- pleting preclinical work and getting into the clinic, dies and diet products was more than $50 billion in but Hughes said the company is "not naive — we 2006, but prescription pharmaceutical products don't think for a moment that we will carry this account for less than 1 percent of the total market. through to registration on our own." That's because available weight-loss drugs like F.
Hoffmann-La Roche Ltd.'s Xenical (orlistat) andAbbott's Meridia (sibutramine HCl monohydrate published in BioWorld Today BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE The Impact of Big Pharma on the BioPartnering Industry Not a week seems to go by that doesn't bear news of a big pharma
company announcing plans to "become more biotech-like" in its operations or
making moves to partner with biotechs or to otherwise exploit the benefits of
biologics technology to revitalize its own vegetating pipelines.
By Michael Harris motivated to mingle on the level that we are now BioWorld Executive Editor If pharma's slew of patent expirations were ear- Big pharma is not in as dire straits as everyone is marked for 2015 to 2020 or if its pipelines were proclaiming. Pharma's plight, specifically regard- stocked with imminently marketable candidates, I ing the lack of impending internally produced don't think the biopartnering trend would be any drugs, is serious, but the companies have the more dynamic than it was a decade ago. During money and infrastructure to survive. Those two that time, pharmaceutical companies either pri- dynamics are relevant, however, only because they marily chose only Phase III about-to-become ther- can be used to grab the lifeline that the availability apeutics for partnering deals or they selectively of biotech talent and innovation offer.
acquired only companies that had such widely The State of Big Pharma, Today and
regarded late-stage favorites and/or already-mar- keted products.
Relative to pharma, the current activity level in the I believe pharma's innovative era is arguably gone biopartnering trend is a move that should've been for good and that the creative epoch resides with made five to 10 years ago. If big pharma had biotechnology through the next century.
invested in admittedly riskier biotech projects such Medicine, like disease, evolves, and thankfully, we as RNAi, cancer, anemia or literally anything have a therapeutics technology that has the prod- genomics-related, many of the cutting-edge thera- uct track record, as well as the potential, to paral- peutics involved in the current biopartnering deals lel the escalating prevalence of disease and take could've been that much closer to, or in, the mar- up the mantle that pharma originated and shoul- ketplace. Although it is a late move, it is still being dered almost exclusively for more than 100 years.
done in time enough to qualify as a proactive Biotech Leading Therapeutics into the
move. Big pharma profits have slowed, but not 21st Century
even the totally unproductive weight at the bottomof the pharma sector has stopped the decades- I think even most pharmas would agree with me long collective industry annual growth streak.
— perhaps not publicly — that biotechnology ispoised to assume the leadership role in drug devel- Big pharma sent out an SOS, and then summari- opment for the 21st century. Actions, neverthe- ly answered it to save its own soul through M&A less, speak just as loud as words. Not a week with the biotechnology market. Biotech has seems to go by that doesn't bear news of a big always been there as a source of investment and pharma company announcing plans to "become partnering for pharma, but it was not until big more biotech-like" in its operations or making pharma's back was against the wall that it was moves to partner with biotechs or to otherwise BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE exploit the benefits of biologics technology to revi- Biotech vs. Big Pharma: Not Coming out
talize its own vegetating pipelines.
For example, in July 2008, Eli Lilly and Co., The lack of contentiousness in what could have Merck & Co. Inc. and Pfizer Inc. joined forces to been a hostile environment distinguishes this rela- create Boston-based Enlight Biosciences LLC.
tionship from similar ones in other industries.
The company already is making headway in bridg- Even Biofuels vs. Big Oil has had some public ing the gap between innovation and industry that clashes in the news and some personal wars-of- has been evidenced by the uptick in biotech acqui- words at a few conferences. One would think sitions by pharmaceutical firms. these two drug development industries hadmerged a long time ago, as they have been And when Roche announced its bid to acquire the observed co-existing at industry events, forging remaining shares of Genentech Inc., Roche deals together for decades and even fighting it out Chairman Franz Humer said in a conference call in litigation with much less malice than Coke vs.
that his company will do "everything that's neces- sary" to maintain Genentech's entrepreneurialspirit and unique science-driven culture. This These two industries have always seemed to have includes preserving the company as an independ- essentially what the other needed in spades. What ent unit within Roche and providing plenty of pharma has is tangible (money, resources) and operational and creative freedom, according to what biotech has is academic (innovation). It's the confluence of a rich history and a bright future.
Without the R&D that has rendered biological Would you rather be rich or smart? It doesn't mat- therapeutics such as Avastin, Herceptin, Lantus, ter right now in this trend, as both are giving the Truvada and many other first-of-a-kind (in concept other what they each need, while doing no harm.
and efficacy) drugs that address society's most We'll see how they interact as they merge closer to debilitating and prevalent indications such as can- being one industry (biopharma) that makes more of cer, diabetes and HIV, we presume that relative the same products (biotherapeutics), but I don't fatality rates would be at least 25 percent higher foresee either side jeopardizing what is proving to than they are presently.
be the win-win factor for the ages.
Prior to the commercialization of these drugs, A New Driver in Big Pharma and Biotech
comparative pharmaceutical treatment consisted of almost equally debilitating treatments such aschemotherapy, aggressive painful injection sched- The predominant new driving factor would be the ules and pain-management morphine-level appli- imminent reality of gene therapy technologies and drugs on the market. The impact from that factorwill likely turn the biopartnering trend into a per- I'm not predicting pharma will be going out of manent drug development market core dynamic, business, but it will transform into something else.
considering the large number of stalled clinical At the very least, and most likely, it will use its applications that could stand to be jumpstarted by resources to integrate the best of both industries the cellular manipulation capabilities that RNAi and and re-emerge as the new and improved "biophar- other genomics-based technologies have shown in maceutical" market. A corrective period will thin lab and, increasingly, in clinical programs.
out the number of companies, inasmuch as someof the smaller companies do not have the capital Gene therapy cannot proceed without a prolific or the regarded candidates necessary to survive level of biopartnering business activity, as the tech- the inevitable market shake-out.
nology is the exclusive derivative property of BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE biotech, but its advancement cannot be facilitated ber and a reliable flow of relative products avail- any better than by big pharma's corporeal forte of able to consumers.
cash and clout assets, as well as its need. The two For more insight into biopartnering, check out industries are perfectly suited to merge brainpow- one of BioWorld's latest market reports, The er and pocket power to produce marketability.
BioWorld BioPartnering Report 2009: Strategies The fact that most gene therapy candidates are and Paradigms of the Deal. Visit in early-stage development assures a protracted www.bioworld.com for more information. run for the trend, easily as much as five moreyears of substantial biopartnering transactions,before the trend would peak with a sizeable num- published in BioWorld Perspectives Partnering Execs Give Perspective on Current and Future Trends "Everybody knows that there are a number of big pharmaceutical companies looking
to partnering to bolster their portfolio and to counter lost sales through patent expiries.
As a result it's become a much more competitive market," said Warwick Bedwell,
Roche's vice president, global head of business development, pharma partnering.
BioWorld conducted numerous interviews with BioWorld Perspectives Managing Editor industry experts about partnering in the biotechindustry as part of this year's research for the The end of 2008 brought job cuts, a financial cri- recently released BioWorld BioPartnering sis and much worry and speculation about the Report 2009: Strategies and Paradigms of the future. Biotech IPOs were almost nonexistent in Deal. We asked big pharma companies what they 2008. Venture funding was down compared to look for in a licensing candidate, how to best pres- the previous year. Cutting costs often resulted in ent non-confidential data, what not to do when cutting jobs. But one segment of biotech has con- entering partnering discussions, and how to make tinued to move forward, further securing its role as the partnering process run more smoothly. Also a necessary component of the industry.
included in the report is detailed contact informa- Partnerships still offer promise.
tion for licensing contacts at big pharma and bigbiotech companies. For more information about The total number of biotech deals fell slightly in 2006, the report, visit www.bioworld.com.
then rose in 2007, according to BioWorld research.
In 2008 there were fewer biotech-biotech M&As, but Below are a few excerpts from the "Industry more pharma-biotech M&As, as compared to last Interviews" chapter of the report. We asked the year. Preclinical to Phase II deals are on the rise, and following experts for their perspectives on the one of the fastest growing areas is biotech collabora- current and future trends in the biopartnering tions with universities and nonprofits. BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE • Greg Wiederrecht is the vice president and
BioWorld: What trends in biotech/pharma
head of the External Scientific Affairs depart- partnering have you noticed over the past
ment of the Merck Research Laboratories divi- few years?
sion of Whitehouse Station, N.J.-based Merck & Greg Wiederrecht (Merck): Some of the trends
Co. Inc. The External Scientific Affairs depart- are that now, more than ever, biotechs want to be ment is responsible for the scientific assessment sold, so there is an increasing number of outright of all licensing and partnering opportunities for acquisitions. It's also quite accurate to say that the the company. Wiederrecht manages a group of deals are getting increasingly expensive, and that 73 scientists and administrators, divided by vari- is simply because of supply and demand. The late- ous therapeutic and platform areas, who identi- stage opportunities are well-picked over; there is fy and assess opportunities outside of Merck's no low-hanging fruit left.
Alliances are in many cases getting to be the only • Warwick Bedwell is the vice president,
significantly expanding source of biotech funding.
global head of business development, pharma The public markets are not providing the needed partnering, for Basel, Switzerland-based Roche.
capital, and the IPOs are way down. . And equi- Pharma partnering is the department responsi- ty financing is not providing sufficient funding.
ble for identifying, accessing, evaluating andpursuing opportunities with external partners.
Another trend is that deal-making is going up and Roche's business development group works up. I don't see any end to that trend. None of the closely with the licensing and alliance manage- large pharmas can feed the beast, and by the ment groups to optimize deal negotiations, con- beast I mean the pipeline, on their own.
tracting and the creation of successful relation- Another trend is that there are more regional ships with Roche's partners. deals being done, and more deals done on biolog- • Bob Little is the vice president and chief com-
icals. And by regional deals I mean, historically,most companies would take a worldwide license; if mercial officer at Halozyme Therapeutics Inc., of you licensed from biotech you'd want a worldwide license, or sometimes you might get a worldwide • Safi Bahcall is the president, CEO and co-
license ex-Asia, or a worldwide license ex-Japan, founder of Lexington, Mass.-based Synta or a worldwide license ex-Europe. Especially in the Pharmaceuticals Corp. Asia territories, there are lots of compounds thathave been licensed out that are not accounted for • Todd Davis and Gregory Brown are co-
in certain regions, so we're seeing increasing num- founders and managing directors of Cowen bers of deals where the license is for China only or Healthcare Royalty Partners. Davis previously the license is for Eastern Europe only.
was a partner at Paul Capital Partners, where hefocused on making royalty-related investments Merck prefers the rights not being split up. But for for the Paul Royalty Funds and was responsible those compounds that historically have not been for U.S. sourcing. Brown also previously was a accounted for in all markets, the rest of the partner at Paul Capital Partners, where he was regions are becoming of increasing interest, par- responsible for global sourcing for the Paul ticularly for those that are successful.
Royalty Funds, as well as the execution and Warwick Bedwell (Roche): Everybody knows
management of more than $235 million in roy- that there are a number of big pharmaceutical alty-related investments. companies looking to partnering to bolster theirportfolio and to counter lost sales through patent BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE expiries. As a result, it's become a much more out to in-license earlier and earlier stage com- competitive market. What we're seeing is that pounds. But there are only so many available late- deals are being made for assets much earlier on stage programs and so the supply vs. demand than perhaps they were a few years ago. There conundrum is creating higher values for earlier are more deals completed for Phase I and Phase II stage products. Even preclinical terms now have assets and there are certainly fewer high quality become pretty significant. That's the one trend Phase III opportunities available.
we've obviously seen in the past several years, andit's continuing to escalate.
We're also seeing, in general, increases in up-frontpayments. Perhaps the up-front payments for a A trend in the past year, especially with the Phase III opportunity a few years ago are now depressed market cap of small to medium being mirrored in the deals for a Phase I/Phase II.
biotechs, is the straight acquisition of a company That's just a result of supply and demand and the rather than entry into an expensive collaboration number of compound opportunities that are out or license. You're also seeing more and more acquisitions that are being kept as stand-alones sothat big pharma companies themselves are trying What's also interesting is that due to the credit to emulate biotech by having their own stand- squeeze that's been occurring within capital mar- alone biotech companies within the larger compa- kets, more biotech companies are turning to ny umbrella, therefore hopefully allowing them to M&As rather than in-licensing, which was the case maintain the benefits of a fast-moving biotech cul- a few years ago. A number of companies now ture and attain greater research productivity. So may start off with an in-licensing approach, but far, however, the problem has been retention of then as discussions continue, that turns to a dis- key talent who would rather not work under the cussion on an M&A.
big company umbrella, but prefer to move to the Finally, we're seeing the emergence of new next entrepreneurial opportunity. Those are a biotech markets. The biotech industry started ear- couple of the trends that I've seen that are the lier in the U.S. than in the EU and rest of the most obvious ones in the past couple of years.
world. While there are still 20 to 30 percent more Safi Bahcall (Synta):
biotech companies in the U.S. than in the EU, thedisparity in numbers and the stage of the compa- • Improved experience on all sides, based on nies is reaching more of an equilibrium. There is growing list of comparable deals, can speed up an emerging biotech industry in Canada, negotiation and deal process. Australia, Korea, Israel and China among others— which will also be increasingly important • Greater range of structures and scenarios being sources for opportunities in the future.
Bob Little (Halozyme): The obvious one is that
• Greater value of deals. the amounts paid in license deals are getting much Gregory Brown (Cowen): We find there's a lot
larger even for quite early-stage programs. We of activity in later-stage investing and many of currently have a situation where many of the big those opportunities lie with companies that are company research pipelines are drying up and acquiring products, acquiring divisions or divesting have been unproductive for some time. They are products. The trading of products back and forth also being hit with generic competition as the is a market we've actually seen accelerate.
patents for blockbusters expire. They are spendingmore money on infrastructure and processes and We see two main drivers for this increase.
less on productive research, so they're reaching Biotechs have realized that it takes longer for BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE products to get approved, so they're seeking earlier Little: We are seeing more and more big pharma
commercialization opportunities. In some cases it companies creating their own biotech clusters, could be a company that wants to develop some pres- such as Pfizer and Novartis, for example.
ence in the market so they need capital to finance a From a biotech standpoint, the other profound sales force channel. By establishing this channel, change that you're going to start to see, and I biotechs can form relationships with physicians who think we already are seeing it, is the advent of are going to prescribe their innovator product, but biosimilars. As legislation changes in Europe and also potentially their later-stage products.
potentially could change here in the U.S., two Many pharmaceutical companies will also divest trends are happening. One is, big pharma compa- their slower-growth products as they try to make nies are saying they're interested in entering into room in their sales force channel for their innova- the biosimilar field. In addition, you're also going tor products. As a result, there's a very robust to see heightened awareness of lifecycle manage- market of products that are marketed, may have ment of major biologics compounds as patents plateaued or be tailing off in sales but that are still start to expire to try to offset the impact of the generating significant amounts of revenue.
market entry of biosimilars. This will create moreand different partnering opportunities as both big BioWorld: In what ways do you think the
pharma and established biosimilars players create partnering industry will change in the
pipelines of compounds. This is where, for exam- ple, Halozyme's recombinant hyaluronidase tech- Wiederrecht: With the low-hanging fruit gone,
nology is really at the forefront of this trend in there will be increased early-stage partnering, terms of providing differentiation from biosimilars which happens to be our sweet spot. We're seeing for innovators.
an increase in big pharma to big pharma partner- Our technology, in general, allows biologics play- ing. We're seeing a big increase in competition ers to take enzymes such as our Enhanze from the big Japan companies. They're going to Technology platform and create an interesting be more competitive. Companies like Takeda and value proposition, such as the ability to go from Eisai and Daiichi Sankyo are going to be compet- I.V. to subcutaneous infusion with additional itive with the traditional leading health care com- patent exclusivity that allows differentiation from panies in going after deals.
the biosimilar that uses the original dosing format.
Besides the Japanese companies competing with I think the other issue is that as you see companies leading health care companies, the biotech com- adapting lifecycle management technologies, such panies are going to have competition frombiotechs coming out of places like Korea and as our Enhanze Technology platform, prior to Japan and Australia and Singapore, so the patent expiration. It is a much lower risk and lower American and European biotechs will have that cost program than developing a whole new molec- competition. A lot of the fee-for-service-based ular entity. It is actually a very cost-efficient way deals will probably, because of the lower costs, be for pharma companies to differentiate themselves moving to the Asia-Pacific.
from the biosimilars. Especially as the technologymoves forward and as the legislation changes here Bedwell: There are a lot of very good, earlier
in the U.S., most likely in the next few years, I stage opportunities in development around the think you'll see this become ever more important.
world. Good science is everywhere. At this partic-ular point, there seems to be fewer quality Phase Todd Davis (Cowen): We have seen a tremen-
III opportunities available to partner, but that dous increase in the number of later-stage product should change over time.
opportunities.This has been driven a lot by private BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE equity and venture capital firms who have poured ket's efficiency were big drivers for the increase in a significant amount of capital into the sector over private capital funding over the past five to seven the past five to seven years — especially in the years. As a result, there are more companies and specialty pharmaceutical area.
more later-stage products available today.
This is a shift from the early 1990s when these The complete interviews are available in the types of companies were funded not necessarily BioWorld BioPartnering Report 2009: Strategies by venture capital and private equity firms but by and Paradigms of the Deal. To learn more about corporate spin-outs. Companies like Jones the report, visit www.bioworld.com. Pharmaceuticals were acquiring products at one totwo times sales, and they were trading at five to sixtimes sales. These returns coupled with the mar- published in BioWorld Perspectives BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE special bonus section BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE The Billion-Plus Blockbusters: The Top 25 Biotech Drugs Biotechnology drugs are a real market, generating billions of dollars and pushing
the industry toward overall profitability. And that trend shows signs of longevity.
By Michael Harris, Amanda Lyle 2007, there were 21 biotech drug approvals, & Kathleen Kite-Powell compared to 17 in 2006 and 19 the year before.
BioWorld Today Staff Writers (See page 72 for a chart of Biotech DrugApprovals, 1982 to 2007.) By the end of this decade, the biotechnology mar- Each of the seven biotech companies with $1 bil- ket will have advanced to the $100 billion level. Its lion-plus in revenue in 2007 increased its total rev- list of drugs has been the lure that continues to enue from 2006 and experienced first quarter attract interest from an array of market-facilitating 2008 sales that have put the companies on track to surpass 2007 year-end totals.
A Growing Industry
A lot of the confidence the biotechnology market Biotherapeutics account for 7.5 percent of all attracts from investors, whether traditional venture drugs on the market, comprise approximately 10 capitalists or unconventional pharma financiers, percent of the total expenditure for marketed comes from its unique, effective and profitable drugs, and their use is growing at more than 20 drugs, led by the products in this Top 25 lineup.
percent per year. Biotechnology drug candidates Innovative concepts and perpetually potential constitute 32 percent of all pipeline research pro- breakthroughs without any tangible product can only go so far in attracting investment, recruiting In addition, biological drugs are administered in talent, assuaging stockholders or making money.
life-saving or end-stage applications 74 percent But biotechnology drugs are a real market, gener- more than chemically derived pharmaceuticals.
ating billions of dollars and pushing the industrytoward overall profitability. And that trend shows Globally, the 25 top-selling biotechnology drugs signs of longevity.
accounted for $67.3 billion, or 81 percent, oftotal biotech drug revenue in 2007, leading a mar- Many biotechnology-derived drugs are often indicat- ket that was valued at $83 billion; however, that ed to treat long-term diseases such as diabetes, can- top-heaviness in market revenue proportion does cer, chronic kidney failure and multiple sclerosis.
not necessarily indicate a lack of industry-wide The dosing schedule for biopharmaceutical drugs innovation. It tends to signify the vital applications can last, at high expense, for years or often as long of biotech drugs in indications of unmet, or drasti- as patients' lifetimes. These drugs typically cost cally underserved, patient needs.
much more per patient than conventional pharma- The biotechnology drug development market ceuticals and are increasingly attracting venture emits signs of growth, as various indicators point attention in stages as early as academic research.
upward. There were 17 biotechnology product The Top Biotech Drugs
approvals in 2008 through mid-April, comparedto 9 in the first quarter of 2007. For the full year Every year, BioWorld's Top 25 Biotechnology BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE REVENUE OF THE TOP 50 BIOTECH DRUGS IN 2007
Drug name (maker)
Revenue
for 2007
Non-Hodgkin's lymphoma, rheuma- $5,467Mtoid arthritis Rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, plaque psoriasis Colorectal cancer, non-small-cell Crohn's disease, ankylosing spondy- $3,327Mlitis, arthritis, ulcerative colitis, rheumatoid arthritis, plaque psoriasis Types I and II diabetes Rheumatoid arthritis, psoriatic Chronic myelogenous leukemia, gastro-intestinal stromal tumors Infection associated with chemo- Breast cancer, non-small-cell lung cancer, prostate cancer, gastric can-cer, squamous cell carcinoma of the head and neck Prevention of diseases caused by S. $2,439Mpneumoniae Rebif (Merck Serono)
Multiple sclerosis Avonex (Biogen Idec)
Multiple sclerosis Multiple sclerosis Hepatitis B and C Truvada (Gilead Sciences)
Multiple sclerosis Humalog (Eli Lilly)
Erbitux (ImClone Systems)
Colorectal cancer, head and neck Chemotherapy-induced neutropenia $1,277M SOURCE: BioWorld research from company press releases and SEC filings.
BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Drugs Report profiles the leading drugs in the of women will develop breast cancer. The disease field, and provides insight into the markets for usually is considered more aggressive when these $1 billion-plus blockbusters. (See the preced- tumors produce excess amounts of a protein ing page for a table of the Revenue of the Top 25 called human epidermal growth factor receptor-2 Biotech Drugs in 2007.) (HER2). About 25 percent of breast cancerpatients have high amounts of HER2 on the sur- The following are excerpts from the profiles of the face of tumor cells, as found by testing of breast top 10 biotech drugs for 2007. Revenue for each tissue biopsies. If a woman has a HER2-positive drug was obtained from company websites and tumor, she has a higher chance of recurrence and SEC documents. In addition, revenue figures are therefore, a decreased chance of survival.
for worldwide sales, sometimes a result of figuresfrom two companies that market a product.
If a patient's tumor is found to be HER2 positive,she is a candidate for Herceptin therapy. Even 1. Rituxan
though the drug is only useful to a subgroup of Rituxan is a biotechnology therapeutics heavy- patients, Herceptin proves that pharmacoge- weight that is excelling in fighting to extend its rel- nomics drugs (genetically personalized drugs with evance, as it encounters R&D obstacles in second- a limited patient pool) can bring in as much rev- ary indication trials and looming biosimilars com- enue as drugs made to treat all persons having a petition in the near future. more common disease.
The CD20 antigen that the drug targets is present 4. Avastin
in more than 90 percent of NHLs. Like Avastin is the first anti-angiogenesis drug Remicade, Rituxan is a chimeric monoclonal anti- approved for the treatment of cancer. The drug body, meaning that it uses both human and mouse inhibits new blood vessel formation and growth components. It sells for about $18,000 per year from pre-existing vessels, angiogenic growth that wholesale, per patient.
is known to increase the supply of nutrients and 2. Enbrel
oxygen to growing solid tumors. Therefore, inhibi-tion of angiogenesis helps slow or stop tumor Immunex Corp. developed Enbrel and marketed it into a $750 million product before the companywas acquired by Amgen Inc. for $10.3 billion in Avastin is a therapeutic agent in the form of a July 2002. At the time, Amgen estimated Enbrel's monoclonal antibody that acts by binding to sales to reach $3 billion in 2005. It surpassed that VEGF, blocking activity of this vascular endothelial mark by far in 2007. Amgen, which markets the growth factor, thereby blocking angiogenesis and product in the U.S. and Canada, reported $3.23 denying nutrients to cancer cells and severely billion in sales, and Wyeth reported Enbrel sales of impeding tumor growth. Avastin fills a niche in the $2.045 billion outside of the U.S. and Canada.
treatment of advanced cancers that gives the drugnot only great therapeutic value to patients and Enbrel has been a billion-dollar product since their families, but financial worth to the company 2002 and has increased its revenue by more than that produces it.
250 percent since. It is currently marketed by both 5. Aranesp
Amgen and Wyeth. Immunex, now a subsidiary ofAmgen, manufactures the drug.
Amgen Inc.'s erythropoiesis-stimulating agent(ESA) Aranesp is the result of what could have 3. Herceptin
been a huge loss in the anemia market. Amgen's During their lifetime, about 8 percent to 9 percent epoetin alpha is licensed to Ortho Biotech BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE Products LP, except for one indication in the U.S.
6. Remicade
Outside of the U.S., Ortho Biotech markets it as Remicade is a TNF inhibitor that treats a variety of Eprex for all approved indications; inside the U.S., immune-mediated inflammatory diseases (IMIDs) the drug is marketed as Procrit for indicationsother than kidney dialysis. Amgen's Epogen, the that constitute a more than $5 billion market. TNF only indication the company retained rights to in inhibitors such as Remicade and its biggest com- the country, is indicated in the U.S. for the treat- peting drug, Enbrel, owe a lot of their value to the ment of anemia in patients with ESRD. Its block- broad applications associated with their use: buster Aranesp is a longer-lasting formulation of Enbrel is approved in rheumatoid arthritis, psoriat- ic arthritis, ankylosing spondylitis (AS) and psoria-sis, while Remicade can claim all of those, as well As a recombinant erythropoietic protein, the drug as Crohn's disease, its initial commercial indica- is similar to epoetin alpha, except that it contains tion, and ulcerative colitis.
two additional sialic acid-containing carbohydratechains, which result in increased activity, making Remicade was developed by Centocor Inc., a darbepoetin alpha a longer-acting form of EPO, Johnson & Johnson company. As a chimeric or second-generation Epogen. monoclonal antibody, Remicade uses both mouse BIOTECH DRUG APPROVALS, 1982 TO 2007
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 SOURCE: BioWorld Snapshots: Biotechnology Products On The Market Since 1982. NOTE: The above chart refers only to the first approval of a biotech drug. Approvals for additional indicationsare omitted, but would increase the total number of approvals by 106 if included. BIOWORLD'S FUTURE OF BIOTECH: THE 2010 GUIDE and human components. It was discovered in the (CML) in the late 1990s. Dr. Brian J. Druker with Department of Microbiology at the New York the Oregon Health and Science University worked University School of Medicine.
with Novartis to develop it.
7. Lantus
A drug that functions by directly turning off thesignal of a protein associated with cancer, Gleevec Lantus, for the third consecutive year, produces is a 2-phenylaminopyrimidine derivative that the most revenue of all the drugs that address the specifically inhibits a number of tyrosine kinase globally expansive and expanding market that enzymes. In the case of CML and GISTs, Gleevec treats diabetes. Lantus has increased its 2007 rev- blocks abnormal tyrosine kinase enzymes that are enue by 30 percent, tallying $3.16 billion, com- characteristic of those cancers.
pared to $2.17 billion in 2006.
10. Neulasta
Lantus, an insulin application therapeutic, was thefirst drug that offered patients a reliable and effec- Neulasta is used to decrease the prevalence of tive alternative to the high-maintenance and intru- infection brought about by neutropenia in patients sive insulin pump. Lantus' precise dosing delivery with non-myeloid malignancies receiving myelo- dispenses reliable therapy and stable in vivo insulin suppressive anti-cancer drugs associated with a levels and activity on a daily schedule for the clinically significant incidence of febrile neutrope- majority of its patients. nia. More specifically, Neulasta is a man-madeform of the natural granulocyte colony-stimulating 8. Humira
factor (G-CSF) that promotes an increase in neu- Humira's revenue has been increasing rapidly over trophils, a white blood cell (WBC) type essential the years, more than doubling in sales from 2005 for the body's resistance to infection. to 2007. In 2006, Humira's first full year on the Neulasta is made using the bacteria Escherichia market in its secondary indication of psoriatic coli to manufacture the drug, after which it is col- arthritis, its revenue increased enough to go over lected and purified. The molecule is chemically the $2 billion mark, up from its $1.4 billion total conjugated with monomethoxypolyethylene glycol in 2005. The year 2007 brought it over the $3 (PEG) to extend the drug's half-life. The mecha- billion mark. Abbott's 2007 10-K estimates world- nism of action of the drug involves binding to cell wide Humira sales to be $4 billion in 2008.
surface receptors of neutrophil precursors to Cambridge, UK-based biotechnology company change cell behavior through signaling, ultimately Cambridge Antibody Technology Group plc (CAT) inducing more infection-fighting neutrophils to be developed the technology for Humira and initiated produced. Neulasta's efficacy is tracked by noting the research program. In 1995, it signed an improvement in patients' WBC counts. agreement with Knoll Aktiengesellschaft, which This special bonus section was compiled from was acquired by Abbott in March 2001.
BioWorld's recently released Top 25 9. Gleevec
Biotechnology Drugs Report 2008. For moreinformation or to order a copy of the report, In Europe and Australia, imatinib mesylate is mar- please visit www.bioworld.com. keted as Glivec. In the U.S., the drug is Gleevec.
Gleevec was first identified as a potential agent forthe treatment of chronic myelogenous leukemia published in BioWorld Today

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