More Toes in the Water

Last week I wrote a post about GlaxoSmithKline’s lead over its fellow multi-national pharma companies (MNPC) in entering the rest-of-world markets where health care is primarily paid for by the patient and her/his family with a bit of help from public (government) and private (NGO) sources (“GSK Splashes Away”).  This seems a rational business strategy to me as “first world” pharma markets become increasingly constrained by the continuing increase in health care costs (of which drug costs are a minor, but visible, part at about 10% of total) and the payers (you, me, our employers, and insurers) expect new drug prices to be justified by superior benefit.  Last week, another MNPC, Takeda Pharmaceutical Company Ltd., ranked about 15th its by annual revenue of $16 billion, followed GSK into the new territory and positioned itself for entry into the global public health market by acquiring the Colorado-based vaccine developer, Inviragen (Joint press release).  Inviragen (Inviragen) may be known to some through Dan Stinchcomb, its co-founder and CEO, who has been a regular speaker and attendee of the past Global Health Partnering Forums and the BIO annual conference’s global health-related sessions (I last saw him at BIO 2012 here in Boston).

Since its founding in 2005, Inviragen has focused on developing global vaccines, that is, those for diseases more common outside the US and Europe.  Its most advanced candidate is DENvax, a dengue fever vaccine that moved into Phase IIb trials earlier this year.  In the pipeline are vaccines for the mosquito-borne diseases, Japanese encephalitis and Chikungunya, and for Hand, Foot, and Mouth disease, a typically non-lethal viral infection endemic throughout the world that can be fatal in children (WHO Fact Sheet).  Inviragen has been funded in part by private equity, raising $15 million from venture firms including Bio*One Capital, a subsidiary of Singapore-based EDB Investments, and by $30 million in US government grants and contracts.  Takeda paid the owners $35 million upfront with an additional $215 million tied to unspecified commercial milestones, a decent but not outstanding deal (a 6x multiple assuming one-fourth of the milestones are paid).   I did not see a mention of Dan’s plans.

The acquisition is a relatively safe move by Takeda in that Inviragen’s vaccines have both first and ROW markets (e.g., it is possible that dengue may be come more prevalent in northern climes due to climate change, see my post, “Climatic Change-Up” ).  The acquisition also fits with Takeda’s new as of last year Vaccine Business Division (the company has a strong domestic vaccine business) which is headquartered in Deerfield, IL, and headed by the former Director of Vaccine Delivery of the Gates Foundation’s Global Health Program, Rajeev Venkayya.  Takeda also purchased another privately-held vaccine company in 2012, Montana-based Ligocyte (Takeda press release ) that has developed-world vaccines in development and proprietary technology for making VLP (virus-like particle) vaccines.  These are refreshingly proactive moves for Takeda, a company in a conservative business and based in a conservative country and having a long tradition to uphold (it was founded in 1781, the same year the Continental army and the French gave the Brits a drubbing at Yorktown).  I got to know the company when I was its liaison at MIT and then at Boston Children’s Hospital over 5-6 years in the late 1980s, and it was struggling with innovation then.

Of course, Takeda, like its brethren, is trying to fill its early-stage pipeline with hopefully successful product candidates, and its key person to do so is Tadataka Yamada, Chief Medical and Scientific Officer and a company director who came on board in 2011 after leaving his position as president of Global Health Program at the Gates Foundation (is also a former Chairman for R and D at GlaxoSmithKline).  In a recent interview, Dr. Yamada noted his intent to re-energize Takeda’s drug discovery program, acquire new drug candidates by purchasing companies, and tap into emerging science through a New Frontier Science Group (FierceBiotech interview).  This group, according to it head, Gordon Wong, is “to find and support scientists conceiving ground-breaking life science technologies and nurture their translation from concept to reality. We are focused on emerging innovative scientists in academic medical centers, research institutions, incubators and nascent companies around the world.  Our mission is to work closely with innovators and provide guidance, resources and financing to advance their vision from conception through key proof of concept experiments” (Takeda Research Messages).  I have known Gordon from our days at Wyeth but have not yet asked him if the “ground-breaking life science technologies” will include those leading to treatments of the less lucrative diseases.  I know he has a tough job, having been in the technology and product acquisition business where opportunities abound and finding the real and most promising is a challenge.

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