The Business of Global Health No. 20

TB Dx  Unlike Ebola, tuberculosis is highly contagious, kills a million or so people annually, is global in occurrence, and is treatable by drugs but like Ebola, effective containment requires early-stage diagnosis, especially during the disease’s latent, but contagious, phase. A simple point-of-care test is needed to replace the current, and often inaccurate, lab test, and last week, Myriad Genetics announced that it and entered into a collaboration to adapt one of its diagnostic platforms for TB diagnosis (press release in FierceDiagnostics). The collaboration is with the Institut Pasteur and the South African Tuberculosis Vaccine Initiative and will test Myriad’s TruCulture® system in differentiating patients with active and latent tuberculosis. The program is funded through a grant to the Pasteur from the Gates Foundation that has supported other TB diagnostics product development, e.g., by Alere and Cepheid (see my post,  “On the Drawing Board,” https://cdippel.wordpress.com/2012/03/08/on-the-drawing-board/).

More EU Grants for Ebola Product Development  The European Commission recently announced the award of €215 million ($245 million) in grants to eight public-private partnerships for vaccine and diagnostics development (three each), vaccine manufacture, and vaccine compliance (press release in FierceDiagnostics and Project List). This amount is in addition to the €24.4 million already committed by the Commission to Ebola drug development.

International Pharma Business   Lexington, MA-based Curis and Aurigene Discovery Technologies, one of India’s biggest biotechs, announced an intercontinental collaboration to develop immuno-oncology drugs. Aurigene will conduct all preclinical work, and Curis will conduct clinical and commercial development and expects to file INDs on the first two compounds in this year. Curis must like the look of the current and future, potential candidates. The company is granting Aurigene 20% of its stock, worth about $24 million, and will pay up about $50 million in milestones and royalties on each successful product (press release in FierceBiotech). As noted in a FierceBiotech article, the $130 billion market projected for immuno-oncology drugs has attracted big pharma interest, with two drugs on the market and more in development.

Gilead Does It Again  Last June Gilead Sciences sublicensed its breakthrough hepatitis C drug, Sovaldi, to eight Indian companies with the intent of creating affordable and accessible generic versions for 91, mostly low-income, countries. This week the company said it is also offering those companies licenses to an improved hep C treatment, a combination drug still in trials that may treat all six genotypes rather than the two treated by Sovaldi (Bloomberg story). While Gilead’s generic licensing program has drawn praise from drug-accessibility advocates, it has also been criticized by them for not including middle income countries that also have large numbers of hep C patients (KEIonline blog).

A New Index  As was reported in a Capital New York article, the Global Health Impact Index is a new effort to rank pharmaceutical companies on the extent to which their drugs treat tuberculosis, HIV/AIDS, and malaria. Developed over six years by a team led by Nicole Hassoun, an associate professor of philosophy at Binghamton University, the index uses the need for a drug (measured in Disability Adjusted Life-Years or DALYs), its effectiveness, and its accessibility to rank a drug’s manufacturer. While to me the Index reinforces the clear need for more companies to develop more drugs for these three diseases (and for more countries to improve their use of existing drugs), it doesn’t say anything about which companies are spending what amounts on new treatments, i.e., investing in global health. For that, see the Access to Medicines Index.

 

The Business of Global Health No. 19

Medtech for All  In a story in the January issue of Technology Review, Antonio Regalado, a consistently good reporter on health science and business, writes about Butterfly Network, a low-profile start-up company that aims to decrease the size and cost of a diagnostic work horse, the ultrasound machine. The founder, serial entrepreneur Jonathan Rothberg, says the “first goal will to be market an imaging system cheap enough to be used even in the poorest corners of the world” and that the machine will cost a few hundred dollars and be launched in next 18 months.   The company’s website is relatively uninformative but includes the Device strategy statement, “democratizing imaging.” Butterfly is astoundingly well-funded, raising $80 million in November 2014 for a total of $100 million according to a Xconomy Boston story.

More MenAfriVac  As reported in FierceVaccines, WHO approved expanding the use of MenAfriVac to infants under the age of one year, an important segment of the population at risk in the fifteen African countries where meningitis A outbreaks were common. Five years of mass vaccination using the vaccine, first launched in 2010 and now given to more than 215 million people, has resulted in virtual elimination of the disease as described in a Reuters story. The vaccine is also unique in that it resulted from a collaboration of the NIH, Gates Foundation, and the Serum Institute of India, a for-profit vaccine maker; cost only about $50 million to develop; and costs 50 cents a shot (for background see my post, “Watch Out Big Pharma”).

In the Nick ‘o Time  As reported this week in FiercePharma, the FDA of China approved a new type of polio vaccine that was developed by the Institute of Medical Biology of the Academy of Medical Sciences with help from WHO and agencies of the US, Japan, and the EU. The vaccine is the world’s first Sabin-strain-inactivated vaccine and will be safer than the wild-type-strain-inactivated and the Sabin-strain-attenuated vaccines, both developed in the 1950s (WHO Polio Vaccines). The vaccine will be used in WHO’s polio eradication program which is in crisis due to an unprecedented resurgence of the disease in the developing world that WHO designated a pubic health emergency last May (WHO Statement). In a FierceVaccines story, a representative of GlaxoSmithKline, one of two manufacturers of the current vaccines, estimated that the program will require 1.5 billion doses.

Full Speed Ahead  As reported in FierceVaccines, a WHO assistant director said that the Ebola vaccines under development by Glaxo and Merck will enter late-stage trials in Africa in the next two months. This week it was also announced that the research consortium developing another Ebola vaccine and led by Johnson & Johnson (JnJ) will receive a grant of 100 million euros ($116 million) from the European Commission’s Innovative Medicines Initiative which will be added to the $200 million committed by JnJ (FierceBiotech story). The JnJ vaccine recently started Phase I trials.

Clarification Please  In my attempt at an editorial last week, I posited that the current astronomical valuations of biotech companies may be based on a soon-to-evaporate assumption of equally astronomical future revenues. While I stand by my positing, I should note that Gilead’s latest hepatitis C drug is called Harvoni, a combination pill that includes Solvadi and priced at $95,000 per course (Healthline.com News) and that Gilead is not nonexclusively licensing it. Also, even with competition among the hepatitis C drugs and resulting lower prices, because it is likely that hundreds of thousands of patients will be treated each year, Gilead (and other companies) will probably sell about $1 billion of its hep C drugs annually. And also, Gilead’s nonexclusive licensing of Solvadi puts the company’s profits at risk in countries wanting to reduce drug costs by importing generics.

Golden Age or Bubble?

It’s been a slow week for global health business news so I am digressing into an editorial to offer a contrast. As most pharma industry groupies know, this is the week for the year’s biggest investor confab- the 33rd Annual JP Morgan Healthcare Conference held in San Francisco. It’s a forum for biotech companies of all sizes to hawk their wares in hopes of lining up private funding, corporate deals, or even the big prize, a mega-IPO. In a FierceBiotech story yesterday, John Carroll, the newsletter’s editor-in-chief, characterized the mood at the meeting as “damn the biotech valuations and full speed ahead,” meaning that the big pharma companies will continue to pay huge prices for biotech’s product opportunities and venture capital firms will continue to fund the invention of those opportunities. All well and good until one asks what is supporting the valuations. Of course, it’s the bottom line, the likely revenue of those future products.

My view, as a rank amateur, is more skeptical. I see an industry focused on a narrow range of products (mostly in cancer treatment) for a single market (the US) and the assumption that society will pay any price for any drug. It’s been fairly easy for biotech executives to wave their hands and justify high prices for their products, still years from the market, since up to now payers, primarily the government-funded medical providers and the insurance companies, have paid any price. But the push back by payers on the pricing of the new anti-hepatitis C drugs has now succeeded and seems, to me anyway, to be just the beginning. As is well known, Gilead Sciences launched Solvadi with a list price of $84,000 per treatment course last spring (see my post, Blockbusting), a price less than the cost of the alternative cure, liver transplant and immuno-suppression. Perhaps less well known is that the launch of a competing drug (AbbVie’s Viekira Pak) has resulted in price war and successful negotiation of “substantial discounts” by at least one pharmacy benefit manager (PBM) as was reported this week by Bloomberg News. The story noted that a VP at the company said “he had never seen prices for a brand-name drug category plummet so quickly after a competing drug was introduced.” Further, two of the country’s largest PBMs, ExpressScripts and CVS Health, have also negotiated better-than-list prices for the new drugs and, according to stories in FiercePharma and Bloomberg Bloomberg this week, these companies intend to use the hep-C meds negotiations as a template for negotiations over the newest class of anti-cancer drugs and possibly other cancer drugs. As one biotech CEO was quoted: “We’re seeing payer activism for the first time … It’s changing all the dynamics.”

So will the next five years be the golden age for the industry as John Carroll quoted one exec at the JP Morgan meeting or a big deflation? Mr. Carroll ended his story, “Here’s hoping we don’t blow it,” and I am ending this story by noting, as I did in my BHG No. 6, that Gilead did not put all of its Solvadi eggs in the US market but has nonexclusively licensed it to Indian generic drug manufacturers, betting that availability and lower prices for the rest of the world will be good for its bottom line.

The Business of Global Health No. 18

Ebola Dx Advances  Containing the West African Ebola outbreak will be greatly aided by a rapid diagnostic test that can be used to diagnose suspected cases and initiate treatment as early as possible. And progress is being made. As reported in FierceDiagnostics, Roche, the Swiss big pharma, recently received emergency authorization from the USFDA for its diagnostic test that can analyze up to 96 samples in three hours. The authorization permits labs to use the test for a defined use (identification of the Zaire strain) and time. The test is PCR-based and therefore requires sophisticated lab equipment, as do two other tests by bioMerieux (also recently authorized) and Cepheid (under development). More low-resource-friendly, point-of-care diagnostics are also under development. Colorado-based Corgenix Cogenix received a $3 million NIH grant to advance its Ebola diagnostic, an antibody-based assay (ala a home pregnancy test) that may deliver results within minutes. Locally, the Massachusetts state Life Sciences Center kicked off an Ebola diagnostic development program with a $1 million grant to a consortium of academic labs and companies to be lead by the not-for-profit company, Diagnostics for All (DFA) (FierceDiagnostics story). The consortium’s goal is to raise an additional $4.5 million for development and testing of DFA’s paper-based, isothermal PCR test with a prototype ready for trials in six months.

SCD, A Global Disease  I was encouraged by learning that a biotech start-up, backed by a rock-star VC company no less, is intent on developing a treatment for sickle cell disease (SCD). As reported by FierceBiotech story and press release press release, SF-based Global Blood Therapeutics raised an additional $48 million to support clinical trials of its lead drug candidate, a small molecule designed to prevent the polymerization of hemoglobin, the base cause of the “sickling” of red blood cells and the painful and debilitating sequella. Although a rare disease in the US (100,000 patients), SCD is endemic in Western Africa where the genetic condition confers resistance to malaria but also likely contributes to the high rate of child mortality (see my post, “Still Neglected”). As quoted in the story, CEO Ted Love sees a global opportunity: “There are 25 million people in the world with this problem. It’s a huge, huge health problem globally. And we think this is a beautiful opportunity to do something dramatic.”

Revenge of the Microbes  For more than 20 years, the development of antibiotics to treat infectious disease has suffered “disinvestment” by the pharmaceutical industry, despite the clear need for drugs to treat new strains of drug-resistant microbes and new emerging diseases (see my posts, Revenge of the Microbes Replay and Microbes II). The tide may be turning though. Recently two biotech companies have had successful Phase III trials of new antibiotics. Based on those results, Tetraphase Pharmaceuticals is on track to get approval for a new drug to treat gram-negative (bacterial) pathogens (FierceBiotech story), and Cempra saw a 30% jump in its stock price after it announced results for a drug to treat community acquired bacterial pneumonia (another FierceBiotech story). And at least one big pharma, Merck & Co., is investing substantially in new antibiotics through its pending $9.5 billion purchase of Lexington-MA-based Cubist. Cubist sells $1 billion per year of an antibiotic, Cubicin, and recently received approval for a second drug, Zerbaxa, both of which Merck is likely to push globally (FiercePharma story).

Slow News Week  It has been a slow week for news but my BSP (blog service provider) generated some end-of-the-year statistics that I can share. In 2014, this blog was viewed 3,900 times with April 18th being the busiest with 94 views of the 2013 post, “(Not So) Way Back Machine”. Apparently, the most views are coming through newsle.com (whatever that is) and are from the US with the UK and India next with about 160 each (Mabuhay! to whomever did the 18 views from the Philippines). Who’da thunk it?

The Business of Global Health No. 17

Competition for Cholera Vax  Hilleman Laboratories Pvt. Ltd. of New Delhi, India, is an joint-venture between Merck & Co. and UK’s Wellcome Trust, with a mission to develop affordable vaccines and last month announced a step toward initiating human trials on its candidate vaccine for cholera. As described in a Lab press release, the Hillman formed a partnership with public health research organization, ICDDR,B and pharma company, Incepta Vaccine Ltd., both based in Bangladesh, to provide clinical trial and manufacturing expertise, respectively. The candidate vaccine was licensed from Gotovax AB of Sweden in June of this year and is made as a dry powder and reconstituted before administration so does not require costly and often unavailable refrigeration (FierceVaccines story, FierceVaccines story). The Hilleman product will compete against current vaccines by Sanofi and Crucell (Johnson & Johnson) that require refrigeration and an oral vaccine by PanVax that recently completed Phase III trials (see BGH No. 16).

A Deeper Pool  The Global Alliance for Vaccines and Immunisation (GAVI) and its financier, the International Finance Facility for Immunisation Co. (IFFIm), recently announced the issuance of a $500 million sukuk, a form of bonds acceptable under Islamic practices (such practices prohibit the accepting or charging of interest) (Reuters story). The IFFIm issuances are underwritten by pledges from nine countries (but not the US), offer competitive rates, and generate cash that GAVI uses to subsidize vaccine purchases by developing countries. Under the sukuk, investors are buying a share of an asset, in this case the approximately $8 billion in vaccines that GAVI purchases each year. GAVI has been a model for global health funding since its founding in 2000.

Ebola Dx Deal  Qiagen, a major diagnostics company based in the Netherlands, and altona Diagnostics GmbH of Germany announced a distribution agreement for the latter company’s RealStar® Ebolavirus RT-PCR Kit 1.0 (FierceDiagnostics story). The test recently received an emergency use authorization from the FDA that limits its use to detection of Ebola virus RNA in “CLIA High Complexity Laboratories” in the US and similarly qualified non-U.S. laboratories. More helpful would be a rapid, field-use diagnostic.

Ebola Vax Candidate Hiccup  As noted by a FierceBiotech story, the Phase I trial of the candidate Ebola vaccine, rVSV-EBOV, licensed recently by Merck from Newlink Genetics, was ended a week early due to the report of joint pain in four of 59 subjects. The Phase I will resume in January. The candidate has been “fast-tracked” by the NIH with the intent to start a Phase III trial in early 2015.

Creating a Market  Although there is a need for Ebola vaccines, there has been no market to date. GAVI, the international vaccine program (see above), changed that recently by announcing the commitment of up to $300 million to purchase an Ebola vaccine, if and when approved (GAVI press release). Specifically, GAVI said it will:

  • Spend up to $300 million to buy up to 12 million doses (about $25 per dose);
  • Spend up to $45 million to help countries deploy the vaccine;
  • Spend another $45 million on the rebuilding of health systems in the affected countries; and
  • Buy quantities of first- and second-generation Ebola vaccines for stockpiles for future outbreaks.

Previously, the financing of vaccine development and deployment had been discussed in an October meeting sponsored by the WHO, and, according to a Science Magazine story, the UK representatives offered to purchase vaccine needed for Sierra Leone and asked that the US and France to make a similar commitment for Liberia and Guinea, respectively.

Who is Liable  As Ebola vaccine candidates advance to efficacy trials in Africa, and if/when approved and used, the developers and manufacturers will need liability protection because no drug or vaccine is 100% effective and individuals, “advocacy” groups, and governments have sued pharma companies for damages alleged to be caused by their products. In the US, the problem was addressed by the Health and Human Services Department issuing a declaration of immunity under the Public Readiness and Emergency Preparedness (PREP) Act (FierceVaccines story and HHS press release). The declaration protects the developers of three vaccines (Merck, GlaxoSmithKline, and Johnson & Johnson) against legal claims related to their manufacturing, testing, distribution, and use, but only in the US. According to a November Bloomberg News story, the WHO has discussed a role for the World Bank, which is providing $1 billion in financing for the affected countries, in providing indemnification but no commitment was announced. The liability issue was discussed in an October meeting sponsored by WHO, according to a Science Magazine story, where it was pointed out by UK representatives that the governments of the affected counties had the primary responsibility for approving the development and use of vaccines.

The Business of Global Health No. 16

Reverse Silk Road  US biotech, medtech, and diagnostic companies face major challenges in developing and launching products for the large, and largely medically-underserved, markets of China and north Asia, one of which is the lack of in-country partners to license, get approved, and sell their products. One company, Beijing-based CANbridge Life Sciences Ltd. is addressing this need. Founded in 2012 by James Xue, a former Genzyme executive, and initially backed by angel investors, the company recently increased its leverage with a $10 million Series A from two Chinese venture firms (FierceBiotech story). CANbridge’s strategy is to license clinical stage products or those already approved in the US to commercialize for unmet medical needs in China, Korea, and Taiwan. To date it has deals with Azaya Therapeutics for a liposomal formulation of a cancer drug and Jazz Pharmaceuticals for an approved treatment of oral mucositis, a condition resulting from chemotherapy.

The Promise of Powder  The promise of vaccines delivered via inhalation as dry powders has multiple parts- easy and low-cost administration, stability during storage and transport, and cheaper manufacture and packaging. Since receiving $20 million in funding from the Gates Foundation in 2006, CO-based Aktiv-Dry LLC has been developing an inhalable version of the measles vaccine and recently reported, with their commercial collaborator, the Serum Institute of India, the results of a successful Phase I study (FierceVaccines story and press release). While at least two major vaccine companies have dabbled in dry powder vaccines (GlaxoSmithKline and Novartis), the Aktiv-Dry candidate is the most advanced in testing.

More Affordable But  The biologic anti-inflammatory drug, Humira, is a blockbuster for AbbVie (formerly Abbott Pharmaceuticals) with $11 billion in annual sales. Coming off patent in 2016, it is the target of more than three companies and its first generic competitor was launched in India this week. As reported in FiercePharma and Reuters Reuters, Cadila Pharmaceuticals Ltd. is now selling its version, Exemptia, in India for $200 per dose, one-fifth of Humira’s price, cheaper but still expensive for the majority of mostly uninsured patients. The company also noted it plans to seek approval in the US and EU where sales should provide a subsidy for Exemptia’s sale at more affordable prices in the 85 countries where Calida currently sells its other products.

PanVax Progresses  The CA-based, “socially responsible” vaccine company, PanVax reported it will be submitting an application to the USFDA in 2015 for approval of its cholera vaccine after successfully completing a Phase III trial in the US and Australia (FierceVaccine story). When approved, it will be the only US-approved and the only single-dose cholera vaccine. While the primary US market is for travelers and is considered a niche market, the vaccine has the potential for large-scale use in controlling outbreaks that occur due to inadequate sanitation and result in three to five million cases and 100,000 to 120,000 deaths per year according to the WHO.

Novel Anti-Malaria MOA  As reported in a press release and story story in FierceBiotechResearch, a collaboration led by St. Jude Children’s Research Hospital with the Medicines for Malaria Venture and the Eisai Co., a Japanese pharma, reported successful preclinical results for an anti-malaria drug candidate with a unique mechanism of action. The candidate drug inhibits a sodium pump in the parasite and results in changes in the malaria-infected red blood cells and their elimination by the immune system. The study in mice also suggested that a single dose may be effective in humans and that the potential for the development of resistance was low. A Phase I study is being planned.

Another Ebola Diagnostic  The Wellcome Trust, UK’s leading foundation for medical research and technology development, announced the field testing of a portable Ebola diagnostic system in Guinea (press release in FierceDiagnostics). The system uses dry reagents, solar power, and a laptop-sized reader to analyze a blood or salvia sample in 15 minutes. The trial will be led by researchers from the Pasteur Institute in Dakar, Senegal, and the project manager, Enhancing Learning & Research for Humanitarian Assistance (ELRHA News). The program is funded by the Trust and the UK’s Department for International Development.

The Business of Global Health No. 15

Startup Funding  As some readers may remember, one of my themes has been the lack of and need for sources of funding for early-stage companies wanting to develop global health products. I’ve written that corporate venture funds should wake up to the opportunities in global health, arguing that these funds are more patient (less interested in ROI) and more likely to invest in the later stages of product development than venture capital firms. So I am pleased to note that one large company with an explicit goal of selling affordable medicines to the rest of the world, Cipla Global Ltd., the Indian generic pharma company, has a venture-funding group. Cipla New Ventures is “to bring affordable medicines in areas of major unmet patient needs in a way that leverages Cipla’s formidable technology, device and development capabilities.” Although I could find the group’s funding capability or goals, I noted that it has invested in four companies since its initiation in 2014.

Funding Opportunity  Ideally, an angel investor wants to fund a company at an inflection point, when previous investment (preferably nondilutive like government grants) has reduced the risk and the new money is key to adding significant value to a product or prototype. A FierceDiagnostics story directed me to a Washington Post story about a multi-functional, tablet-based diagnostic machine being deployed in India. Designed by an Indian engineer/US returnee and funded by the Public Health Foundation of India, the Swasthya Slate allows 33 diagnostic tests, has been tested in 80 locations with more than 40,000 patients, and is a component of a health care IT system. It seems like a promising product, and it appeared to me that a plan for its commercialization has not been made.

Ebola Lesson Recently, Bina Venkataraman, Director of Global Policy Initiatives and Senior Science Policy Adviser at the Broad Institute here in Cambridge, MA (a new position?), wrote an informative column in the Boston Globe (Why We Were Not Better Prepared for an Ebola Outbreak, subscription required). She rightly points out that emerging infectious diseases pose a threat to global public health that has not been, and will not be, addressed by the market place and profit-based (i.e., self-sustaining) companies. Political will and leadership is needed, as are incentives for corporate R and D and greater collaboration among public health agencies, academia, and business. She wrote: “it requires deal-making with the industry” (see next). I hope her advice is heard by those who are looking for the Institute’s next Director of Business Development.

More Dx Capability for West Africa Speaking of the Broad Institute and deal-making, the Institute is one three parties in a program to increase the capacity of academic labs in Nigeria, Senegal, and Sierra Leone to perform genetic analyses including those needed to diagnose Ebola (press release in FierceMedicalDevices). Through the efforts of a senior member of the Broad, the Institute has trained in-country collaborators who will participate in the program, the USAID is apparently providing funding, and Illumina, a major CA-based diagnostic device maker, will provide equipment. I could not determine if Illumina was committed to the program long-term or to developing a market in Africa (a better deal for all).

Payday at the CF Foundation  Venture philanthropy, a not-so-good term for a foundation’s funding of a company’s product development in line with the foundation’s mission, got a boost last month. The Cystic Fibrosis Foundation announced that it had sold the royalty stream it is due by Boston-based Vertex Pharmaceuticals, for its funding of CF drug development for $3.3 billion (CF Foundation press release, NY Times story, and John Carroll’s FierceBiotech editorial). The Foundation has been way ahead of any other in venture funding, putting about $400 million into companies for more than 15 years ($150 million into Vertex). The Bill and Melinda Gates Foundation has announced an investment program of this scale for global health product development but has invested less than $40 million in companies to date (see my post, “Tossed from the Balcony”). Of course, one major difference between venturing in CF drugs and in global health meds is that CF patients have insurance companies to pay for them (e.g., the new Vertex CF drug costs $300K per year) or have access to support programs (e.g., Vertex Financial Assistance) and the many millions with diseases of poverty don’t. Would foundations (and venture capitalists) put money into global health product development companies if the world’s wealthy countries guaranteed a market? I think so.