A Tale of Two Companies

In a previous post, I wrote about Medicine in Need (MEND), a Cambridge, MA-based, not-for-profit, primarily because their mission, to apply “emerging and advanced delivery and manufacturing technologies to drug and vaccine candidates for diseases of poverty,” may yield inhaleable dry powder products, a promising route for low-cost, large-scale drug and vaccine delivery.  But MEND appears to be stuck in low gear.  Founded in 2003 and a licensee of “nanoparticle” technology from the David Edwards laboratory of Harvard University, MEND has been supported by grants and donations including about $11 million from the Gates Foundation to create dry-powder versions of a TB vaccine and other products (MEND PR), but, although the TB trials were to start in 2009 (Genome Web article), I found no progress reported on the vaccine or other products.  The most recent news at MEND’s website is from 2010 when the company was named a World Economic Forum “Technology Pioneer,” and my on-line search for more recent news found only a January 2011 press release from the Wellcome Trust, a global health foundation, that reported MEND is participating in a project with the Hilleman Laboratories (New Delhi, India) to test the feasibility of its technology in a rotavirus vaccine (Wellcome press release).  So MEND seems to be making little progress in fulfilling its mission which is disappointing since, when I met the MEND CEO, Andrew Schiermeier, several years ago, I thought he had the right experience, e.g., as a biotech company CEO (AS Bio), to get products to market.

Astute readers, or those immersed in the multi-media stream, will recognize that MEND is not the only venture where Dr. Edwards is applying his technology and promotional skills.  The good doctor, in addition to being the founder of the ArtScience Labs at Harvard and the Paris-based LaboGroup, helped start the company, Breathable Foods, Inc. (BFI), in late 2010.  According to Dr. Edwards’s personal website, the idea behind the company is “to bring the aesthetic experience of aerosol cuisine to commercial markets for delivery of natural nutrients with special healthcare benefits,” and “The new Cambridge (USA)-based company led by CEO Tom Hadfield spun out of ArtScience Labs and the Paris-based LaboGroup.  In August 2011, the company raised 8.5 million dollars in a series A financing led by Flagship Venture Partners and Polaris Venture Partners.”  And BFI took less than a year to get its first product, AeroShot, to market.  As was widely publicized, AeroShot is a dry-powder mix of carefully-sized particles that includes 100 mg of caffeine (about one large coffee’s worth), B vitamins, and flavoring in a handy cylindrical delivery device.  The product’s web page is nicely-laid out (AeroShots) with links to all the current social marketing tools (Facebook page, Twitter feed, YouTube videos, Tumblr) and a snappy tagline, “giving you the energy you need to go forth and conquer.”  A description on the website of Flagship Ventures implies that BFI may also have pharmaceutical products in the queue:   “Additionally, Breathable Foods’ novel nutritional delivery platform can be utilized for delivery of nutrients or pharmaceuticals directly to the mouth for ingestion, thus avoiding common safety concerns of delivering active molecules to the lungs” (Flagship).  AeroShot’s launch made a big media splash last October and caught the attention NY Senator Charles Schumer who got the attention of the FDA’s Office of Compliance which issued the company a “warning letter” last month.  The letter expressed concern that AeroShot may be mislabeled because the company does make clear whether AeroShot delivers its jolt by inhalation or ingestion, the former being a route requiring testing and approval and the latter qualifying the product as a dietary supplement and therefore not needing FDA approval (FDA letter).  The letter also expressed concern about BFI implying that the product is safe without addressing its use by minors, use with alcohol, or accidental inhalation.

This tale of two companies led me to wonder what may account for the difference in the speed in delivering (or not delivering) the companies’ products (“TBVacShot” and AeroShot) to market.  Clearly, for BFI, the using a new technology for a consumer product is less technically challenging than for a pharma product, and BFI has an easier, non-regulated path to market (once BFI gets its marketing message straight anyway).  MEND’s vaccine requires years of expensive preclinical and clinical testing although other dry powder vaccines are making progress in development (see my post, “A Holy Grail Horse Race” 10/7/10).  But I’ll posit the difference the companies’ product development efforts is due to accountability and engagement.  BFI’s founders, managers, and backers understand the need to market products quickly to generate revenue and interest in the company by potential acquirers so they will get a return on their investment.  The investors in BFI have skin in the game (money at risk) and are therefore are engaged in the management of the company.  The Gates Foundation doles out billions of dollars to many groups but has no mechanism for engagement or accountability for a grantee like MEND that receives a mere millions of dollars.  Dr. Edwards, as a founder of both MEND and BFI, may derive personal satisfaction from his engagement in MEND but has no personal stake in its success, while it is likely he is a share-holder in BFI and therefore has a potential financial gain, hence the several interviews available on-line in which he promotes the company.  MEND has no board of advisors as far as I can tell, so it has no independent but interested overseers to expect and encourage progress.  A party that could or should be engaged and concerned about accountability is Harvard University.  Harvard licensed the Edwards’ technology to MEND and presumably included in the license an obligation of diligence in product development.  I say presumably because Harvard is a signatory to the “Nine Points” statement, which is a policy guidance document to help universities use “strategies that might facilitate the delivery of health-enhancing discoveries to neglected patient populations around the world, such as in developing countries,” and includes the use of licenses with “affirmative obligations of diligence, with license reduction, conversion (i.e., to non-exclusivity) or termination as the penalty for default” (Harvard and Nine Points statement).  However in my experience, university technology licensing offices typically track licensees’ financial obligations like repaying patent expense reimbursements or royalties on sales, and not diligence in product development.  So it looks to me as if Harvard, like the Gates foundation, Dr. Edwards, and MEND’s management, is not holding MEND accountable for its product development efforts over the past nine years.  As for the millions of people suffering the consequences of living in countries with a high-burden of TB, they aren’t in a position to hold anyone accountable.


3 thoughts on “A Tale of Two Companies

  1. The Statement of Principles and Strategies for Equitable Dissemination of Medical Technologies (SPS), championed and endorsed by Harvard in 2009, includes the following strategy: “Affirmative obligations of diligence, with license reduction, conversion (i.e., to non-exclusivity) or termination as the penalty for default.” The MEND license had already been negotiated at this point. For licenses executed after 2009, however, the SPS provides a written imperative to enforce due diligence.

    • Hi, Karolina: thanks for pointing out my error in presuming that the MEND license reflected the diligence “encouraged” by the SPS. On the other hand, every license I wrote in my 8 years in tech transfer, including 2 years at the Harvard Medical School office, had some obligation of diligence in product development. Do you agree with my main point- that MEND would benefit from more oversight?

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