A Long Strange Trip Continued

Back in November 2011, I wrote a post about the approval of a new drug for malaria by Ranbaxy Laboratories, an India-based generic drug maker and, since 2008, a division of the Japanese pharma company, Daiichi Sankyo Co. Ltd. (“A Long Strange Trip”). My point was that story of the drug, now called Synriam™, was an example of a mix of players cooperating for global health drug development: US academic medicinal chemistry researchers, a grant-supported product development organization (Medicines for Malaria Venture or MMV), a persistent big pharma willing to take a risk on a low-priced product (Ranbaxy), and a government agency willing to support a public health drug (the Indian government’s Department of Science and Technology). The trip continues, so here is an update with some clarifications of my original post.

In my first post, I missed the point that the approval granted Ranbaxy by the Indian government was conditional; an inspection of a Chinese ingredient supplier was needed. So it was not until last October that Ranbaxy announced receiving unconditional approval for India and that it was pursuing approvals in African, Asian, and South American markets with applications filed in several African countries (Ranbaxy press release). I also missed that Synriam is a “fixed dose combination” (FDC) drug being a combination of the novel, US-invented anti-malaria chemical, arterolane, and a known anti-malaria drug first developed in China in the 1950s, piperaquine. I have not found an explanation for Ranbaxy choosing to develop an FDC rather than a single active ingredient drug, but there could be several reasons, for example:

  • In its collaboration of with MMV, Ranbaxy found that arterolane alone did not provide as-good-as-expected clinical results;
  • The malaria-causing parasites are known to develop resistance to anti-malarial drugs and Ranbaxy wanted to reduce this risk by using two drugs with different mechanisms of action at the same time;
  • Ranbaxy wanted to develop a drug that was effective against both the major parasites, Plasmodium falciparum (causes 60% of cases worldwide) and Plasmodium vivax (causing 40% world wide but 50% in India), and this combination of drugs worked; and/or
  • Ranbaxy needed a stronger intellectual property position and patenting an FDC may help.

This last point did not occur to me until I read a posting at a website devoted to intellectual property issues in India (SpicyIP article). The writer, Prashant Reddy, noted that Ranbaxy’s license to arterolane is non-exclusive and therefore MMV could license competitors or may not enforce its patent rights. My guess is that Ranbaxy filed for patents on its FDC so that it had IP rights independent of those granted by the MMV license.

Since getting approval for marketing in India, Ranbaxy has been promoting the drug. The company has a website for it (Synriam) and a presentation for download (2013 Ranbaxy presentation). From these I learned that the drug has a number of attractive features:

  • Two mechanisms of action: arterolane kills parasites in the blood, providing fast relief of malarial symptoms, and piperaquine kills residual parasites, preventing disease recurrence;
  • Compliance-friendly dosing: one pill taken each of three consecutive days (compared to 6 to 24 for the drugs);
  • Kid friendly: a pediatric formulation and dose is being tested in Phase II trials;
  • Completely synthetic unlike the artemisinin-based, mainline drugs that are made from a wormwood extract;
  • Works well: 97.9% in uncomplicated falciparum malaria;
  • As fast-acting and safe as standard mainline drug, Coartum; and
  • Low price: it is sold for 130 Rs ($2.21) per 3-day course in India where there are 1.3 million cases per year.

Given these features, I imagined that the many not-for-profit, anti-malaria groups would be pleased that Ranbaxy had put in the $50 million or so to develop Synriam. But to my surprise, my review of the websites of the following found no mention of the drug and its approval:

I’m not sure why the lack of comment or interest. Is it because the drug has some fatal flaw that I am unaware of? Or it is because these organizations are invested in fighting malaria their way and Synriam doesn’t fit? I found an editorial published this week in the New Telegraph of Nigeria (“Towards Curbing the Malaria Menace”) that gives the perspective of a writer in a malaria endemic country and excerpted the following:

  • -Nearly all Nigerians (97 per cent) are at risk of at least one malaria attack per year.”
  • “… a princely N480 billion [about US$3 billion] is expended annually on antimalaria campaigns even when the impact is not altogether appreciable in the fight against the scourge.”
  • “Compared to other diseases, malaria is one of the most marketable diseases that shares a large funding pool by international donor agencies.”
  • “Thus for it to still remain a major killer disease in the country 14 years after a concerted campaign was launched in 2000 by African leaders, is an indication that perhaps, the various strategies adopted to eradicate the scourge are inadequate.”
  • “We strongly recommend that governments and corporate bodies take keen interest in research and adequately fund relevant institutions in the country to embark on manufacturing effective anti-malarial drugs.”

According to my math, Nigeria could treat its 100 million annual cases with Synriam at a cost of $212 million, and I think Ranbaxy would not be adverse to manufacturing Synriam in Nigeria. What am I missing?

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GUD Knight

About a month ago, the US FDA announced that it had granted a Canadian company, Paladin Therapeutics, approval to sell a drug called Impavido® to treat leishmaniasis, a nasty, protozoan infection that occurs annually in about 1.3 million, mostly poor, people and causes 20-30,000 deaths (WHO Fact Sheet). The press release in FierceBiotech also stated that Paladin received a Tropical Disease Priority Review Voucher (PRV), only the third one granted. The PRV process is intended to encourage development of drugs for neglected diseases, and the FDA will expedite review of a drug submitted by the holder of a PRV, and the company has sales sooner as a result. And since it is transferable, the holder can also sell it, although none have been sold (or used) to date. I found it interesting that the FDA would make the announcement and not the company and was more perplexed when I found that Paladin was no longer in business, having been purchased in 2013. But before untangling that web, I looked up background on Impavido.

Impavido is the name trade-marked by the Æterna Zentaris Inc., a German company, for a drug with the generic name of miltefosine. Miltefosine was designed and developed in the 1980s as an anti-cancer drug, was found to be a broad spectrum antimicrobial, and developed as the first (and only) oral treatment for chronic leishmaniasis by ASTA Medica (later Zentaris GmbH), the WHO Special Tropical Diseases Programme, and the government of India in the 1990s. Subsequently, Zentaris got approvals for Impavido in Germany, India, and Central and South America (the last through licensees), and miltefosine is made by at least one Indian generics company for the domestic market (nicely summarized by Dr. Anthony Crasto in his blog, New Drug Approvals, and at docguide.com). So why isn’t Impavido/miltefosine being widely used to treat leishmaniasis (which has three forms- visceral, also known as kala-azar and the most serious form; cutaneous, the most common; and mucocutaneous)? I looked at the Drugs for Neglected Diseases Institute’s (DNDi) website since this grant-supported, not-for-profit has a major program to develop visceral and cutaneous leishmaniasis drugs (DNDi Strategy), but could not find a clear reason. My read is that DNDi believes that the drug’s course of treatment (28 days) and immediate improvement may result in poor patient adherence and development of resistance, the drug’s potential fetal toxicity makes it unsafe for reproductive-age women, and its cost is too high for monotherapy (about $80 per course at the current WHO-negotiated preferential price). Dorlo et al. had a more positive assessment in their 2012 review, concluding that, as a well-tolerated and oral drug, miltefosine should be a viable option for many patients.

What about Impavido’s use as a treatment? All rights to the drug were bought by Paladin, a successful, Montreal-based specialty pharma retailer founded by Jonathan Goodman, from Zentaris in 2009 (PRNewswire release). Paladin apparently continued Zentaris’s commitments to its licensees and WHO purchasers, selling about $2.5 million worth out of total annual sales of $200 million. In November, 2013, Endo Health Solutions, Inc., a US-based specialty pharma company, bought Paladin for about $2 billion in cash and stock (Reuters article), in part to extend its product line and in part to reduce its US corporate tax liability. Since the acquisition was done through an Irish holding company, some analysts call the deal an end-run around the IRS (e.g., Zerohedge.com blog), interesting but not relevant. What is relevant is that Mr. Goodman negotiated retaining Impavido ownership as one of the assets for his new company, Knight Therapeutics, which he founded just after the Paladin sale. Knight is off to a good start with $60 million invested by Mr. Goodman, another $180 million from other investors (Cantech Letter), and an IPO on the Toronto Stock Exchange in March (Waterhouse article). Why did Mr. Goodman keep Impavido as the company’s first product? It’s not clear to me. According the two above-cited sources, Knight licensed Impavido’s non-US rights to Endo so will get about $500K in annual royalties (peanuts for a company with a market capitalization of about $140 million), and Knight has the drug’s PRV (value to be determined). According to the company website (Knight Products), it is developing a commercialization plan for the drug for the US market, although leishmaniasis is very rare so revenues are likely to be small.

Mr. Goodman is clearly an experienced and successful entrepreneur, building Paladin from a start-up to a public company, and is wealthy from the Endo deal (he owned one-third of Paladin’s stock as reported in a Globe and Mail article). He also has a different perspective on life after an almost fatal bicycle accident in 2011 that I, as a road biker and commuter, can relate to. Two weeks ago, Mr. Goodman posted a note called To Define Success in which he wrote “Success is defined by the good we do for others.” He ended with:

The more you practice the cycle of giving, the easier and more rewarding it becomes – it is now my new addiction (I gave my bicycle to my cousin). Anyone can repair our world. Anyone can make a difference. Any currency can be used, whether it is money, knowledge or your time. Knight’s stock ticker is GUD, not derived from Goodman, but for the hope we all do good.

My humble suggestion is that Mr. Goodman use his money, knowledge, and time to get Impavido used to treat as many of the 12 million people with leishmaniasis as possible.

Soft Sell

Last week I revisited my student days and participated in MIT’s Independent Activities Period, a one-month intersession in which students, faculty, and affiliates offer and take classes and activities ranging from the fun (as in “Build your Own Electric Guitar”) to the thoughtful (“The Cost of Cosmic Real Estate:  Galaxy Evolution in Dense Environments”).  I took a four-hour “Sales Boot Camp” given by two fellow VMS mentors who are also successful salespeople and entrepreneurs (Camp Description), and it was quite worthwhile.  My corporate experience has been in business development which has much in common with sales, the former having a less-frequent but bigger pay off and presumes having a business (with revenue) to develop.  Because the instructors oriented their presentation toward sales for start-ups, what I learned will be useful to me in my volunteer mentoring.  I should note that the course focused on sales of technical products or services to sophisticated customers, so called business-to-business (B2B) sales, not selling to consumers.

The instructors emphasized several main themes.  The first was making sales are very important to an early-stage company, not only to generate revenue to offset expenses but also to market test and validate the product; in fact, the process of selling provides critical feed back to the company as it is developing its product and marketing materials.  In investor-backed companies, making the first sale also helps the founders manage and calibrate investor expectations.  And the first sales should be aimed at obtaining an anchor or reference customer that will be recognizable to other potential customers.  An important caution, often over-looked by start-ups, is that the sales plan and the cost of selling need to be in line with the product price; it’s possible to make lots of sales and still be unprofitable.

The second theme was that companies need to develop a sales culture.  Since the success of the company is tied to successful sales, all the employees need to recognize their roles in supporting the sales function.  In a start-up, while the founders are the lead sellers, the entire team, including the engineers developing the product, should contribute ideas and effort toward selling.  To build this culture, the instructors recommended that the lead salesperson hold weekly meetings to describe his/her progress, provide ideas from interactions with potential customers, and solicit input from the rest of the company.

Another theme was that sales is a process that needs to be managed.  The process starts with qualification and solicitation of potential customers, advances to educating and building trust, and ends with securing a purchasing decision.  It is non-linear, personality-dependent (both the sales person and the customers), and “failure-driven” in that one in one hundred contacts will lead to a sale with the other ninety-nine proving helpful feedback and new leads.  An important first step is the profiling of potential customer businesses, followed by profiling the potential buyers within the businesses (individuals responsible for a purchasing decision) and by building a rationale for a purchase for each business.  And the salesperson needs to do all this in a time-efficient way while operating with incomplete information.  It was not a surprise that the instructors described the personality traits needed for a successful salesperson as being knowledgeable of the product and industry, highly organized, methodical, competitive, a team-player, empathetic, resiliency, integrity, and having good people and listening skills.  Of course, also emphasized was the need to provide good customer support after a sale to build a relationship that may lead to up selling (selling follow-on products) or cross selling (selling to other groups within the customer organization).

The instructors also covered the differences between B2B sales and sales to government agencies.  In the latter, there are a multitude of procurement processes and each is highly bureaucratic (no surprise).  Also there are barriers to entry including the process for being qualified to bid and providers who have a built-in advantage, having the internal staff to support the bidding process and name-recognition among the purchasing agents who tend to be cautious buyers.  On the plus side is that government agencies are explicit about their needs (spelled out in requests for proposals [RFPs]) and relatively transparent in their decision-making.  The instructors also noted that a successful tactic in government selling is to include training in a proposal, to offer the agency at route to independence from the contractor (at least for that product and service).

Of course, I am not doing justice to the depth and breadth of the course.  For example, the instructors gave some time to describing the sales tool kit and its components (marketing materials, prototype/demo, customer relations management (CRM) applications, internet resources, etc.).  They also provided a number of case studies and took questions from the participants.  Overall, quite worthwhile and I recommend it to anyone contemplating starting or currently building an early-stage company.

So what were the take-home lessons for entrepreneurs starting up a technology-based global health product or service company?  The first is that it is never too early to think about sales, to develop a sales plan and run it past advisors.  Such a plan has more depth than that found in a business plan and is invaluable in helping the founders understand (or design) a path to revenue, that, although it may seem to be in the distant future, is key to a viable and sustainable business.  Such a plan also helps the founders identify key issues that need to be addressed sooner rather than later, e.g., if the plan is to sell to government agencies, what is required to qualify and if this is too challenging, what are the options for sales through intermediaries (“channel sales,” see my post, “S and M”).  Identifying potential purchasers also will help sharpen up the product specifications and features to differentiate it against alternatives and competitors.  A second take-home is that the founders should agree among themselves who will be taking the lead on building and implementing the sales function, again, even if distant, not having this as an explicit role risks missing connections and relationships that will be important in the future.  A third is that a global health start-up may need to recast its product to include a service, e.g., adapting the product to a customer’s needs or offering its (newly-gained) knowledge of its product’s market segment to customers looking for new markets.  Lastly, a sales emphasis early on pushes the founders to map a route out of a overly-long and grant-supported product development process and into the world of commerce.

The Price is Right

When a pharmaceutical company puts a price tag on a new drug it will sell in the US, it employs more art than science.  Its launch team considers the prices of competing products, the acceptability of the price to reimbursers like Medicare, the perception of value by the prescribing physicians, and other factors with the goal of maximizing revenues during the period of patent exclusivity.  This is a sound strategy since those revenues, with the revenues of a handful of other drugs the company sells, need to cover the substantial cost of R and D, manufacturing, regulatory compliance, lobbying, shareholder dividends, and fat salaries of its senior managers.  In the EU countries, national health care agencies evaluate the cost and benefit of new drugs before approving use so a company needs to provide more objective measures of the value of its product.  Apparently, the more objective approach results in lower prices; according to a 2011 European Parliament study cited by a recent Reuters article, prices of drugs in the EU are about half of those in the US.  Outside the US and EU, companies typically employ “tiered pricing,” setting lower prices in low- and middle-income countries that generally reflect the ability of (some) patients or national health agencies to pay.  Needless to say, not everyone who needs drugs can afford them.  I recently found two studies of the pricing of drugs for these rest-of-world markets that offered interesting conclusions and alternatives to tiered pricing aimed at improving accessibility to medicines.

In the first (Moon et al. 2011), the authors studied drug prices and the effect of entry of generic competing drugs for five cases:  HIV antiretrovirals, artemisinin combination therapies for malaria, drug-resistant tuberculosis drugs, liposomal amphotericin B for visceral leishmaniasis, and pneumococcal vaccines.  While acknowledging the difficulty of comparing complex situations, the authors found that “when markets were sizeable and multiple sources of production were available, tiered pricing performed poorly compared to competitive production in generating reliable and sustained price reductions.”  They also noted that tiered pricing contributed to short term, improved access “when markets were small, highly uncertain, where production capacity was limited, or there was a time delay to overcoming barriers to competition.”  To achieve long term equitable or affordable pricing, the authors recommended that governments of low- and middle-income countries encourage the growth of a domestic pharmaceutical industry, make public sector purchases at negotiated prices, and set reimbursement policies based on public health benefit and overall cost savings.  To increase competition, they also advocated governments issuing compulsory licensing of patented products and that companies license their products more widely, participate in patent pools, and scale back patent coverage and enforcement in ROW countries.  However, they also noted “such a system will only work in the long term if markets are large enough and alternate solutions for financing R&D can be implemented.”  Unfortunately, with the biotech/pharmaceutical industry under pressure to increase R and D productivity and justify prices to skeptical reimbursers, its interest in and support for alternatives is limited.

In the second article (Dow and Mora 2012), the authors used publicly available data to estimate the economic burden of viral disease, dengue fever, and the maximum potential market for a new dengue drug and, building on their findings, propose an alternative to the tiered pricing approach.  Dengue is a mosquito-borne viral disease that infects approximately 100 million persons annually in the endemic tropical and subtropical countries, one-quarter of whom suffer debilitating symptoms and need medical attention and 3-6% advance to the deadly hemorrhagic shock syndrome.  There is no specific drug therapy but several vaccines are in development (CDC Dengue).  Utilizing data on the costs of treating dengue fever patients in eight countries collected by others (Suaya et al. 2009) and adjusting for unreported cases, the authors calculated a global cost of $1.7 billion and a per case cost of about $300.  Then, after accounting for the introduction of a dengue vaccine and subsequent reduction in cases beginning in 2020, the authors proposed an alternative in which, during a temporary period of market exclusivity for a new dengue drug, individual countries would agree to pay 50% of the per-case equivalent of economic costs saved through its use.  Depending on drug effectiveness and cost of medical and indirect costs and lost productivity in specific countries, the prices for treating a case would be $13–$239, and the maximum potential market for a such a drug would be about US $338 million annually.  To me, this analysis presented a sound economic rationale for countries to use a new drug, for a company and its investors to expect an attractive return on investment, and for an approach to fair pricing based on economic burden and drug effectiveness.  Of course, two unknown potential torpedoes to this approach are the cost of developing a dengue drug and how countries will pay for the drug.  For the former, I posit that if the exclusivity period is five years and the desired ROI is five times cost, then the cost may be around $300 million which is not unrealistic.  The latter is part of the continuing struggle to provide basic worldwide health care. 

Interestingly, the estimates of Dow and Mora may be under-estimates; researchers reported in a recent letter to the journal Nature that the incidence of dengue is closer to 390 million per year, further increasing the market potential of a drug (Bhatt et al. 2013).  Also interestingly, Dow is the CEO of 60° Pharmaceuticals LLC, a company founded in 2010 with a “mission to discover, develop and distribute new medicines for neglected tropical diseases … while also providing an economic return.”  The company has a preclinical dengue drug program (60 Degrees) and I hope to learn more.

What is needed to advance the Dow-Mora approach?  More data on the economic burden of diseases are needed, and I suggest the Global Disease Burden program of the University of Washington’s Institute for Health Metrics and Evaluation add the cost of care to their data collection and evaluation (GBD).  Then regulatory agencies need to encourage the marketing groups of the multi-national pharmaceutical companies to use the data to justify the prices of their new drugs, first in the high-income countries and then in the rest of the world.

Uni-versal

August is a slow news month (and I’ve got other things to do) so I am updating past blogs.  Last October, I wrote about Gradian Health Systems (GHS), a non-profit enterprise that is trying to deploy its “universal anesthesia machine” to improve the safety of surgery in low-resourced parts of the world.  For some background, here is an excerpt from my post, “Universal”:

GHS was started in 2010, is based in New York City, and is funded, possibly solely, by a grant from the Simons Foundation, a philanthropy that funds basic science and mathematics research (Simons).  GHS’s lead product is a “universal anesthesia machine” (UAM) that was designed by the company’s scientific founder, Paul Fenton, is fully-engineered and manufactured, and has earned a CE mark (a European Union medical device approval process based on a safety demonstration and intended use; see Medcitynews for a comparison to the USFDA approval process [Medcitynews article]).  To learn more about the commercialization of the UAM, I watched a December 2011 TED (Technology, Entertainment, Design) talk by Erica Frenkel, GHS’s Director of Business Strategy, (UAM talk) which has had about 250,000 views (congrats!).  Ms. Frenkel spoke mostly about the need for safe anesthesia (“35 million annual surgeries without safe anesthesia”), some about the machine’s unique features (has a backup battery and can use room oxygen), a bit about its current use (some number are in 13 hospitals, donated or sold?), but, unfortunately, nothing about affordability/pricing, distribution, partnering, funding, revenue projection, or other bits of a business strategy.

I expect that the management of GHS has worked out a commercialization strategy since the CEO, a consultant, and one board member have medical device company start-up experience (GHS Team).  To me, such a strategy is key for convincing founders, whether grantors or investors, that GHS can effectively address the need.  Whatever plan exists though, it apparently needs additional details since the company is advertising for a Director of Product Management (GHS Blog) among whose responsibilities are: develop a marketing plan; liaise with the manufacturer for production, R and D, and introduction; find distribution partners in target countries; and create training programs for use and maintenance along with eleven others.

I am clearly an amateur in the medical device field and not knowledgeable about surgical anesthesia, but my quick search indicates that there is some research that GHS can draw on to build its marketing plan.  A study by Hodges et al. gathered data that defined the problems in anesthesia delivery in Uganda (Hodges et al. 2007) and Jochberger et al. gathered similar data for Zambia (Jochberger et al. 2008).  I also found that the World Ananesthia Society (WAS) is dedicated to supporting anesthesiology in the developing world including through training, so may be helpful in assessing UAM adoption and use.  GHS could also contract with consultants for specific parts of its plan to get a handle on pricing, adoption rate, and customer preferences and ability to pay, but the consultants would need to understand emerging world markets which may be a rarity.  While GHS as done an amazing job of building and testing its UAM, it still needs to leap over the commercialization valley-of-death.

Recently I checked the GHS website and found the company has not made much (any?) progress in explaining its marketing strategy or designing and implementing its marketing plan.  As indicated by a blog posting last November (GHS Nov post), it is still looking for director of product management and may still be working out a strategy because it hired a “Business Strategy Associate” in March of this year.  The new associate seems to be a nice, capable person with an MIT business degree but has no medtech operational or practical marketing experience (GHS Mar post).  I also found on the site an article written by students in Stanford University’s School of Business Program in Healthcare Innovation dated August 2012, “Marketing to Multiple Stakeholders in a Complicated Field” (PHI article).  In it, Ms. Frenkel describes GHS’s general strategy consisting of six parts:

  • publish meaningful results [this helps but should be limited to a few otherwise conducting multiple “pilot studies” is a distraction from finding potential buyers];
  • build a network of key opinion leaders [these are known in the biz as KOLs and are a standard practice; again a few is better than putting effort into getting many];
  • connect with potential users through conferences [again, standard in the biz and should be coupled with on-going information gathering on potential customers and decision-makers];
  • develop audience-specific talking points [goes without saying];
  • bid on contracts (Ms. Frenkel noted that GHS hired a consultant to help but perhaps one for each type of contract, NGO, government, private, is needed); and
  • create a database of donor organizations that buy and distribute medical equipment [I surprised this hadn’t already been done; a basic question of any company with a product is who is going to buy it].

The parts are sound, but a strategy needs to include more stuff like distribution channels and partners, comparative products, differentiation from competition, pricing, service offerings, identification of decision-makers, and closing sales.  As Ms. Frenkel said in the article, “We’re working on it.”  I’d suggest she tap into local medtech expertise, starting with NYC Tech Connect, an entrepreneur support group that has an “executives-in-residence” program with one exec, Jerry Korten, who looks to have the right experience (NYC Tech Connect EIR).  GHS is facing all of the challenges of starting a business plus selling into an under-resourced market and may as well draw on and adapt the experience of other medtech start-ups.

 

Mundo Sano

Recently, I noted the announcement of the successful completion of a Phase II trial of a cancer vaccine called racotumomab (with the more-easily-pronounced product name of Vaxira) in which the number of advanced non-small cell lung cancer patients reaching two years’ survival was tripled from 8 to 24% (FierceVaccines article).  The idea of using a vaccine to amplify the immune system and slow the progression of cancer seems sound to me, given my amateur understanding that some small fraction of the trillions of cells that make up an average human body are deviating into abnormal, precancerous growth all the time and the most likely it is the immune system that keeps us from having cancer all the time by identifying and removing the bad actors (however the scientific jury is still out, e.g., Swann and Smyth 2007).  A number of companies have been developing products based on this theory, but as was reported by FB Vaccines from the June American Society for Clinical Oncology annual meeting, progress has been slow and (another FierceVaccines article).

What caught my attention was that Vaxira resulted from an Argentina-based international collaboration of public institutions and private companies called Investigacion Desarrollo Innovacion (IDI ) and that the origin of the product, eighteen years ago, was the Molecular Immunology Center in Havana, Cuba (Financial Times article).  Here’s what else I found out:

Target:  non-small cell lung cancer is catch-all category for most types of lung cancers (about three-fourths of all lung cancer diagnoses), has a high mortality rate (86%), and is the cause of death for some 1.4 million people worldwide (WHO 2008 cancer facts ).

Technology:  the vaccine is based on a unique “anti-idiotype” approach.  Unlike most vaccines in which the target itself is administered to stimulate the immune response, the antigen in this approach is a monoclonal antibody mimic of the target.  For Vaxira, the target is a part of a cell membrane component (a ganglioside) that is unique to several human tumors.  It is injected to mice to produce an antibody which is put into other mice to yield an antibody to an anti-body (and anti-idiotypic antibody).  It is this second antibody that is used as the vaccine and the resulting human immune response is theoretically highly specific to the tumor antigen (for more on the science, see Vazquez et al. 2013 and the diagram at Recombio Products).  It is not clear to me how the immune response stops the cancer; Vazquez et al. implied the tumor cells are the target, but a quote by the scentific director of IDI indicated it stops new blood vessel formation (IDI).  I’m also not sure how the vaccine is produced at scale, possibly it is via a standard monoclonal production method (e.g., Li et al. 2010).

Funding of development:  according to the Financial Times article, the funding for developing the product cost about $100 million of which 60% was from Grupo Insud, a family-run Argentinean conglomerate of agri- and bio-businesses (Insud), and the remainder given “in kind” (non-cash assistance) by the Cuban government.  More costs are to come since a Phase III trial is underway according to IDI.

Commercialization:  IDI has licensed the rights to Vaxira geographically to a number of companies:  Elea Laboratories (Argentina and a Insud company), Eurofarma (exclusive license in Brazil and semi-exclusive rights for the rest of the continent), Innogene Kalbiotech (Korea, Taiwan, India, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and the Philippines), and Recombio (Europe and the rest of the American and Asian countries).  The therapy will be priced at $20,000 per course (Financial Times article) which is substantial, but low relative to US pricing of similar immunotherapies for cancer (Dendreon’s Provenge for prostate cancer is priced at $90,000).  From this price and a use that requires a hospital setting (15 doses over twelve months in conjunction with standard therapy), I surmise the initial market will be self-pay/insured patients at the best-equipped hospitals.  The vaccine has been approved in Argentina and Cuba and soon will be approved in Mexico, Brazil, Uruguay and Turkey (IDI).  It’s not said if US approval will be sought, and that may require an exemption from the Treasury Department since Cuban products are embargoed.

Global health perspective:  I found no indication of a commitment by IDI or its licensees to making Vaxira accessible or affordable to non-self-pay or well-insured patients.  Interestingly, Insud is the backer of one of the most prominent public/global health foundations in South America, Mundo Sano (“Healthy World”), but the foundation’s focus is mostly on research into neglected, communicable diseases like Chagas, malaria, and dengue, and not the neglected, non-communicable diseases like cancer (Mundo Sano).  However, the foundation has been involved in at least one program for improving access to essential medicines.  Over the past several years, it worked with two Argentinean pharma companies and the government to start commercial production of the main drug used to treat Chagas, which afflicts about 11 million poor in the Americas, and the companies are now the world’s only source of the drug (Mundo Sano 2012 Symposium).  According to a Smartplanet blog, Insud’s CEO expects the vaccine’s development costs to be recouped in five years.  Whether IDI, Insud, and the licensees have a plan for making the vaccine more widely available, e.g., through tiered pricing or subsidy, after covering their costs remains to be seen.

 

Model or Muddle?

When I read last week that Emory University was putting part of its royalty income into a new company to accelerate the development of drugs for global diseases, I was hopeful that it had launched a new model for university technology transfer (FierceBiotech article).  The new LLC (limited liability corporation), called Drug Innovation Ventures at Emory (DRIVE), is “expected to provide global solutions to address worldwide drug development and commercialization needs,” according the University press release (Emory PR).  DRIVE “will provide the financial, business, project management and regulatory expertise to effectively move drugs through lead optimization and pre-clinical testing — a stage of drug development often termed the “Valley of Death” — and into proof-of-concept clinical trials,” and it will be the “industrial partner” for the University’s in-house Institute for Drug Development (EIDD), headed by one of the better-known academic drug discovers, Dennis Liotta.  Among other activities, EIDD is also the custodian of the Global Health Primer, a catalog of drugs in development for global diseases (GHP) which was transferred last spring from the late advocacy group, BIOVentures for Global Health (see my post, “Downsize or Downhill?”).

 

I looked for more information on DRIVE and its plans, but what I found was not encouraging.  DRIVE has a website (DRIVE), but it is sparse.  I found a presentation Dr. Liotta gave at the Atlanta Clinical and Translational Science Institute in February 2013 (Liotta presentation) which provided some details but raised questions, too.  First, DRIVE’s will work only on antiviral drugs for diseases which are caused by RNA viruses, many of which are of global concern like measles, influenza, Chikungunya, hepatitis C, dengue, and yellow fever.  Second, it appears DRIVE will be operating as a virtual company working primary through contracts and those contracts appear to be primarily at EIDD.   Also it is noted on slide 5 that DRIVE will use Emory’s administrative system for HR, finance, and grants/contracts, although I’m not sure how Emory can negotiate a contract with itself.  Third, DRIVE will depend heavily on three principals; the organization chart on slide 6 lists four employees (and one to be hired) and the rest to be contractors.  Two of the principals have substantial biotech/pharma drug development experience- George Painter, CEO, and Abel de la Rosa, CSO (although his experience is more in business and not science)- and the third- David Perryman, COO- is an attorney with negotiation but not operational experience (slides 7-10).  Fourth, it is not clear where DRIVE will get its “therapeutic opportunities” (slide 13).   The Emory press release stated that DRIVE will be the “industrial partner” for EIDD, but although the EIDD has a list of eight project areas, but none seemed to be ready to move into the preclinical, let alone clinical, studies needed to generate sufficient data to attract licensees, either established companies or venture-backed start-ups (and none of the projects list current [later than 2010] publications) (EIDD Projects).  Planning and conducting clinical trials is challenging, and from the presentation it looked like DRIVE will be using the Emory’s Winship Phase I Clinical Unit, which was started in 2009 to conduct cancer trials.

 

Not clear at all was the funding of DRIVE. The press release stated the initial funding will be $10 million from the royalties received through Emory’s license for the HIV drug, emtricitabine.  Emtricitabine was discovered by Drs. Liotta, Schanazi, and Choi at Emory (although the discovery was disputed, see IP Advocate Case Study) and licensed to Triangle Pharmaceuticals in 1996.  Triangle Pharmaceuticals was acquired by Gilead Sciences in 2003.  Gilead completed its development and sells the drug as Emtriva (Wikipedia article), and it is included in Gilead’s combo HIV drug, Truvada (approved in 2004), and Bristol-Meyers Squibb’s drug, Atripla (2006).  Will the $10 million be upfront funding or over time?  Did Emory purchase equity or give it as a grant?  Ten million dollars is a good start but few drug development companies, even virtual ones, can make progress on multiple products for that amount.

 

Also not clear is who is in charge (and liable).  The press release said DRIVE will be wholly-owned by, but separate from, Emory; the presentation (slide 4) stated DRIVE’s agreement with Emory allows it “independence to run like a biotechnology business.”  I don’t know enough about LLCs to say if Emory is liable for injury that may occur during trials.  And the University and the principals may not have the same motivation for forming DRIVE.  In the release, the Emory president stated, “This financially self-sustaining public-private enterprise fits within Emory’s vision of working collaboratively for positive transformation in the world through discoveries that are of global benefit.”  One of the principals, David Perryman, may have a different view.  To quote a Medcity news article (Medcity article):

 

In an interview with David Perryman, one of the leaders of DRIVE, he said the reason for the company is to create a way to steer clear of the entangled bureaucracy that can threaten the advancement of technology at any university.  It’s also to ensure that leadership can tap their own real world experience to ensure the technology gets to the appropriate group to commercialize it.  “A lot of universities are getting into technology transfer and by and large, they don’t know how to do it,” Perryman told MedCity News in a phone interview.

 

In my experience, new ventures succeed when they have a well-thought out plan that is executed well by managers with the right skills and experience and are backed by patient investors with aligned interests.  I am not sure about DRIVE.