More Global Health Business News (No. 6)

Auritec Pharmaceuticals is a very-low-profile drug delivery company in Pasadena, CA, and is part of a group of academic institutions that recently received a $20 million NIH grant to develop a vaginal ring for microbicide and anti-viral drug delivery (FierceDrugDelivery article). Auritec did not issue a press release on the grant, to be given over five years, but it is co-located with the grant’s lead institution, the Oak Crest Institute of Science, whose press release noted the program will test the delivery of up to five drugs in combination, an important goal for achieving compliance-independent HIV control and treatment (Oak Crest press release).

As I noted in a previous newsletter, GlaxoSmithKline (GSK) is leading a crash program to develop an Ebola vaccine.   Earlier this month, GSK published the results of a study in primates that showed the candidate vaccine was effective in preventing infection but that a booster shot was needed for longer (greater than ten months) protection (FierceVaccines article). It is expected that the NIH will start trials of the experimental vaccine, acquired by GSK when it purchased the biotech company, Okairos, for $325 million, this month.

Also on the Ebola front, the Bill and Melinda Gates Foundation is putting $50 million into immediate efforts to control the outbreak and into grants for drug, vaccine, and diagnostic development. The Foundation’s press release noted that $12 million was being distributed to the WHO, CDC, and UNICEF and the remainder was to-be-granted.

In the “still-not-getting-any-good-press” category, Gilead Sciences, Inc., reported completion of the licensing of rights to manufacture and sell its blockbuster anti-hepatitis C drug, Solvadi (sofosbuvir), to seven Indian generic drug manufacturers (Gilead press release in FiercePharma).   Gilead anticipates these agreements will bring low-cost sofosbuvir to 100 million patients (54% of the world’s total) in 91 countries (Gilead HCV Fact Sheet). As I noted in my blog posts, Gilead’s generic licensing program could be an effective model for other pharma companies wanting (needing) to increase access to their products.

I first wrote about Vaxxas, a Cambridge, MA-based vaccine delivery company, when it started back in November 2012 (“Vax Patch”) and have occasionally checked for progress, of which there has been none, at least made public. That changed last week when the company announced it had received funding from WHO for a pre-clinical and pre-manufacturing project aimed at applying its Nanopatch delivery technology to the polio vaccine (Vaxxas press release). Vaxxas has one commercial partner, Merck, and I expect/hope its BD team’s efforts pay off soon.

Also, I wrote about the Japanese Global Health Innovative Technology Fund in May 2013 (“GHIT Ready”) and posited that its award criteria were biased against smaller, more innovative companies, its awards were too small to have a real impact, and its bureaucracy extensive and inexperienced in product development. The Fund announced its second round of grants last week; $15+ million will go to seven preclinical or early clinical projects for drugs or vaccines for dengue, malaria, or Chagas. The recipients were the usual suspects- established academic and research groups with the occasional corporate partner- but no innovative, low-overhead, and hungry start-ups.

 

Global Health Business Weekly (No. 5)

What does it cost in time and money to run a crash vaccine program against a deadly but infrequent disease that occurs in uninsured and underserved people outside the US? The disease, of course, is Ebola, and the program was announced two weeks ago (GSK press release in FierceVaccines). The program’s goal is to complete safety and efficacy tests in about three months, and its costs will be met in part by a $4 million grant from private and government (UK) sources, GSK, and the US NIH. GSK will also receive funding to manufacture 10,000 doses of the candidate vaccine in parallel to be deployed by WHO if the trials are successful. Such success will not only save lives but may provide a model for crash vaccine development programs against other infectious diseases in the rest of the world which have no or limited vaccines like hepatitis C, malaria, and TB.

An effective drug for treating Ebola is also needed, and recently the US Biomedical Advanced Research and Development Authority announced commitment of up to $42 million (10x what is going into the vaccine program) to tiny Mapp Biopharmaceuticals, Inc. for further testing and manufacture of its candidate drug, ZMapp (FierceBiotech article).

At the other end of the funding spectrum, OncoSynergy, Inc. recently announced the start of a crowd-funding campaign to raise $5,000 to test an antibody it is developing to treat cancer against Ebola (FierceBiotech article FierceBiotech article, OncoSynergy press release, and Experiment.com funding page ). My skeptical side says “PR stunt” but I hope I’m wrong and the company has positive results in its in vitro demo.

In the “Nature doesn’t take a day off” category, FierceVaccines reported that an academic study of the polio virus associated with a 2010 outbreak in central Africa found a new, mutated form (FierceVaccines article). The scary part is that the mutated form was not neutralized in vitro by antibodies generated by the current vaccine. Even more scary was that the outbreak had a 50% mortality rate and it was estimated that half of those affected had been vaccinated. Of course, everyone knows that polio was common in the US with 35,000 cases per year in the 1950s and about 1% resulting in limb paralysis until almost universal vaccination was introduced (CDC Polio FAQ).

In the “lost in the noise” category, Gilead mentioned last week that it is in discussion with six generic drug companies about licensing its anti-hepatitis-C drug, Sovaldi (FiercePharma article and Bloomberg article). According to Gilead’s EVP Gregg Alton, the agreements will bring the drug to about 80 developing countries, and the licensing is in addition to Gilead’s plans to sell Sovaldi in India and other countries for $900 per treatment course. The noise, of course, is that Gilead has priced the same treatment in the US at $84,000 which has generated approbation by some payers and members of Congress. Alton noted, however, that this price is the same as that paid by the payers for the older, less effective regime. So I guess the payers are upset not by the cost of treating (and curing) a patient but by the potential demand for the drug. So the overall cost of the drug is the fault of patients and their doctors.

In the “emerging start-up opportunity” category, MIT reported that researchers of the Singapore-MIT Alliance for Research and Technology had built an MRI-like prototype device for detecting the malaria waste product, hemozoin, in blood (Fierce Diagnostics article and MIT press release). The team is starting a company to develop and test a cheaper, portable version that may be faster and more reliable than the current microscopy-based detection. Not mentioned was another diagnostics company founded by an MIT alum, Disease Diagnostics Group, that is using a simpler technology to detect hemozoin and that its prototype is in field testing (Boston Globe article).

Bio-simulation Replay

With the FDA staff now scrutinizing applications for the first two biosimilar drugs seeking approval for sale in the US (Zarzio by Sandoz/Novartis and Remsima by Celltrion/Hospira, see FiercePharma article , I thought I would replay my take on the potential of biosimilars as ROW (rest-of-world) products from September 2013.

Regular readers (Retronymers? just made that up) will know that I think that biosimilar drugs (that is, generic versions of biologically-derived therapeutics like antibodies and growth factors) are one of the few product opportunities on which to base a viable global health business (others being vaccines and some diagnostics, and medical devices). The value of these drugs is that they address difficult-to-treat, often-chronic diseases (like cancer, diabetes, and arthritis) and, if generic, could be affordable to the world’s growing middle class, and, with subsidy, to many of the world’s poor, especially if non-injectable versions were available. My not-too-distant-future scenario is that the major generics companies, like Sandoz, Teva, Mylan, and Hospira, in addition to fighting for shares of the markets in the US and EU, will also sell into the ROW (rest-of-world) markets and competition will drive prices as low as possible. (I should note that a few companies, like India-based Cipla, already have an explicit ROW strategy.) My scenario hit a speed bump in July though when Teva, the world’s largest generic pharma, and Lonza, a Swiss-based biomanufacturing company, formally dissolved their 2009 partnership to develop biosimilars, citing a reassessment of the costs of clinical testing and getting approval in the US (FierceBiotech article). Although Teva stated it will take on biosimilars in a “highly selective approach,” it and Lonza apparently concluded that the USFDA, as indicated by its ongoing biosimilar regulation drafting, will require almost the same level of clinical evidence and manufacturing scrutiny on follow-on biologics as for the original drugs. And higher costs mean lower profit margins in the usually high-margin US market.

In contrast to Teva’s and Lonza’s redirection, other companies are continuing their pursuit of biosimilars. In June, two companies received recommendations for approval from the European Medicines Agency for drugs similar to Johnson and Johnson’s antibody drug, Remicade: Remsima made by South Korean biotech Celltrion and US company Hospira’s Inflectra (another FierceBiotech article). In August, Biocon, India’s largest biotech company, announced that it expects its copy of Roche’s anticancer drug, Herceptin, to be available next March (FiercePharma article). Roche has already reduced the price of Herceptin in India by a third so it looks like it plans to compete with Biocon on price. Last June, Sandoz, the generics subsidiary of Novartis, started a Phase III trial of its version of arthritis drug, Enbrel (formerly made by Wyeth now Pfizer), one of five biosimilars it has in development (yet another FierceBiotech article). And in April, Cipla launched its version of Embrel in India (another FiercePharma article). As for Samsung Biologics, a new venture of the electronics giant launched last year that I had theorized the company would be a major player (“Discount Drugs”), the company seems to be off to a slow, quiet start.

Interestingly, there are two startup companies based in the US with the explicit business plan of bringing low-cost biosimilar generic drugs to the ROW markets. Epirus Biopharmaceuticals, a Boston-based company that I wrote about in July (“Soup to Nuts”), has an approach, which it has branded, to “combine new technologies and strategies to address macroeconomic trends in emerging environments in order to deliver biosimilar products to patients” (Epirus Approach). Last week, the company released results from a comparative Phase III trial of BOW-015, its version of Remicade, that showed a slightly better response rate than the original drug (Epirus press release). The company also said it planned to submit filings for regulatory approval in “targeted emerging markets” over the next year.   The second company is Coherus Biosciences, Inc. (Coherus) that is “focused on delivering high quality biosimilar therapeutics that will expand the access of important medicines to patients worldwide.” Started in 2010 in the San Francisco area by Amgen and Genentech veterans, the company has raised about $30 million from VCs including Helix and Lily Ventures and has licensed in two biosimilar products from Daiichi-Sankyo of Japan for unspecified Asian markets. Last week, the company struck its first big corporate deal with Baxter International, a mega health care product company, which agreed to $30 million upfront payment and $216 million in contingent milestones for an etanercept/Enbrel biosimilar for Europe, Brazil, Canada, and other markets (Coherus press release).

A question still to be answered is what will be the regulatory strategy of companies developing biosimilars for global markets. One strategy may be just to pay the price for US approval and bear the costs of US regulator scrutiny of their manufacturing. Another may be to skip the US and get approval in the EU that requires human equivalency trials but may be more lenient on the extent of preclinical and manufacturing data than the US. Going directly to ROW countries is problematic since some require approval by the US or EU first, have no biosimilar approval path (Russia), or are still developing their own regulations (like India and China). Brazil and South Korea are the exceptions with their own biosimilar regulatory process (for a nice write-up see Cliff Mintz post at Lifescienceleader.com). Needless to say patchwork regulation is expensive and a barrier.

I suggested my own modest solution, especially relevant for the lower-income countries, in two previous posts (“Bottleneckrophobia” and “Trick not Treat”). I proposed beefing up a WHO-based program, the Prequalification of Medicines Programme (PQP). The PQP evaluates generic drugs for the “big three” global diseases for purchase by international agencies like UNICEF, and it also inspects manufacturers and clinical trial companies and certifies national quality control laboratories (PQP Fact Sheet). In 2011, in addition to approving 35 products, the PQP conducted 90 inspections in 18 countries, ran 32 training courses, and certified six labs, all with a budget of about $10 million per year provided by UNITAID, the global health drug purchase financing group (UNITAID Programs). In my posts I suggested strengthening the PQP approval process with donated expertise from wealthy nations’ regulatory agencies, like the FDA, and the multi-national pharma companies, and generating revenue through “user fees,” like the FDA does, to paid by companies seeking to avoid the expense of country-by-country registration in that with the PQP-approved products would be eligible for purchase by PQP-approved buyers, which would be any government or group able to commit to negotiated volumes and prices. Clearly, substantial funding and political will are needed to strengthen the PQP, but WHO has been successful in setting up a similar system for the pre-approval of vaccines for UN supply (WHO vaccine program). My guess is that if companies realize a global generics approval system will improve their profit potential, they will motivate, and maybe fund, the authorities.

More Bits and Bytes (No. 2)

Continuing the theme I started last week, here are a few stories I noted relating to the global health business and my comments.

Unlike the subtle pressure being put on drug prices in the US by insurers that I mentioned last week, the National Pharmaceutical Pricing Authority of India announced recently that it was reducing the allowed retail price of 50 generic cardiovascular and diabetes drugs so no brand is priced at more than 25% above the average price of that category (FiercePharma article and Wall Street Journal blog). The immediate effect was a decrease in the share price of foreign and domestic pharma companies, and the longer term effect may be an increase of Indian companies increasing efforts to sell outside of India, especially in countries with third-party payers (the US and Europe) and growing middle classes (developing world).

Speaking of which, the Indian pharma company, Glenmark, will be selecting a site for a new factory in Canada or Mexico to serve the North American generic drug market. The company, which already has more that a dozen non-Indian plants, said it is planning a $100 million investment over five years (FiercePharmaManufacturing article). I’m glad to see a company intending to help bring US health care costs down.

In big news for ROW vaccines, GlaxoSmithKline (GSK) submitted its malaria vaccine (called “RTS,S”) for approval by the European Medicines Agency last week (FierceVaccines article). GSK noted in a press release that it has expended $350 million and expects to spend another $260 million to complete development and that the Bill & Melinda Gates Foundation, through the PATH Malaria Vaccine Initiative, kicked in $200 million (GSK press release). GSK also stated it that “the eventual price of RTS,S will cover the cost of manufacturing the vaccine together with a small return of around 5 per cent that will be reinvested in research and development for second-generation malaria vaccines, or vaccines against other neglected tropical diseases.” I am hoping that buyers, primarily health ministers in Sub-Saharan African countries subsidized by the Global Fund, will find this acceptable.

And in other vaccine news, PanVax, a California-based company that I have posted on previously (“Knick-Knacks”), obtained an additional $50 million in debt financing and $12 million in a Series B venture funding and will use the funds to complete acquisition of an approved oral typhoid vaccine (Crucell’s Vivotif) and for its ongoing Phase III study of a cholera vaccine candidate (PanVax press release).   PanVax’s mission: “We are committed to providing both attractive financial returns and social returns, without a significant trade-off between the two. As a double bottom line business, we will measure our financial success in terms of return on equity and we will assess our social returns by access to our vaccines globally, particularly to the poor and otherwise disenfranchised. We strive to develop and deliver vaccines that are affordable and deliverable anywhere in the world regardless of the state of medical infrastructure or supply chains.” (PanVax About).

Soup to Nuts Replay

Almost one year ago, I wrote about Epirus Biopharmaceuticals, Inc., a Boston-based start-up, that is developing a line of biosimilar drugs, the first being a biosimilar for Remicade™, an anti-inflammatory antibody sold by Janssen. Here’s that post from July 4, 2013, with an update at the end.

Although there’s a little voice inside my head telling me to get a life, I thought I would peck out another blog posting about a business model for bringing affordable pharmaceuticals profitably (or at least with a positive cash flow) to underserved markets. The model I have doodled about in previous posts involves a company providing a high-value, but non-novel/off-patent biopharmaceutical drug (or vaccine) that is manufactured in a relatively low-cost manner and sold in volume with a modest mark-up, possibly to public sector buyers (e.g. government health agencies) and/or subsidized by multinational donors. In the post, “Generics Play” (September 2011), I noted the Indian generic companies like the mid-tier pharma, Cipla, and the biotech, Biocon, are developing such “biosimilar” drugs and building manufacturing capacity. In a follow-up the next week (“Biosimilar Fever”), I wrote about the multi-national pharmaceutical companies’ interest and investment in developing biosimilars for the major markets of the US/EU/Japan and that, thanks to industry lobbying, the US FDA proposed a challenging approval path, making the EU market a better target for the biosimilar makers since the European Medicines Agency (EMA) has based its approval on the less-rigorous concept of proving “interchangeability.”

As for the manufacturing factors in the model, in “More Grease on the COGs” (December 2011), I noted that GE Healthcare, a multi-billion dollar division of GE, and the M+W Group, a multi-billion dollar German engineering and construction firm, announced that they had formed “a strategic alliance aimed at overcoming the lack of key biopharmaceuticals, especially in emerging nations … [and] will assist countries worldwide to become self-sufficient in the manufacture of vital biopharmaceuticals such as vaccines, insulin and biosimilars.” To me, this alliance indicated the partners had concluded that middle-income countries are serious about becoming pharmaceutically independent and were willing to commit multi-hundreds of millions of dollars. I also noted in a posting after BIO 2012 (“See Change”) that GE Healthcare seemed to be complementing its super-scale factory option by buying a local (Marlborough, MA) company, Xcellerex, for its flexible, modular, and relatively inexpensive biomanufacturing system. Finally, in my post, “Discount Drugs” (May 2012), I wrote about the $2 billion launch of Samsung Biologics (by a company better known for its consumer electronics) and wondered if the company will apply biomanufacturing efficiencies analogous to those that allow $50 smart phones and also where it may find those new process efficiencies.

All of the above activity is evidence for big corporations (except for Biocon, which is India’s largest biotech) adopting a non-major market biosimilar business model, but none of these players has made a product and gotten it approved, let alone generated revenue, in a non-major market. So I’ve been on the lookout for validation in the form of a venture-capital-backed start-up with an explicit mission statement of developing biosimilars for the non-US/EU/Japan, rest-of-world markets, and recently found one: Epirus Biopharmaceuticals, Inc. (Epirus).

Epirus was apparently in stealth mode as “fourteen22, Inc.” and based in San Francisco in 2011-12 and now is located in an office in the Prudential Building here in Boston. Epirus’s approach, which it has nicely branded as In Market, For Market™, is to “combine new technologies and strategies to address macroeconomic trends in emerging environments in order to deliver biosimilar products to patients” (Approach). The new technologies are the single-use, disposable techniques and equipment that enable lower-cost, customizable biomanufacturing (branded as SCALEÔ), and the new strategies are to contract with local/regional pharma companies, with the encouragement and possibly financial support of local governments, to enable testing, regulatory approval, and sale of biosimilars in regional markets. As described in the company fact sheet (Fact Sheet), the company “is focusing on a range of emerging markets, including, Brazil, Turkey, Russia, MENA [Middle East, North Africa], and the ASEAN [ten countries of southeast Asia] markets,” but notably not India and China. The financial rationale behind this soup-to-nuts approach with partners (product candidate through manufacture, testing, and approval) is that it sidesteps the regulatory and launch hurdles of the major market countries, shares the cost/risk with the partners who know the local markets (and regulators), and results in opportunities for selling multiple, regional contracts/licenses and for governmental subsidy. For the company customers, the upside is increasing their manufacturing capability, product development experience, and eventually revenues in a regional market.

Epirus has an impressive management team and investment (unspecified amount) from three top notch firms: 5AM Ventures, Montreux Equity Partners, and TPG (Texas Pacific Group) Biotech. The seven senior managers have had roles in multiple biotech/pharma companies each with lots of manufacturing and product development experience (I may know one, Mark Melville, who was with Wyeth Biopharma/Andover when I did business development for that group). The board member representing TGP Biotech is Geoff Duyk (our paths intersected when he was an assistant professor at Harvard Medical School and I did tech transfer there) who has also been involved in another start-up for emerging market pharmaceuticals, moksha8. The company has also made impressive progress on its lead product, a biosimilar for RemicadeÒ, an anti-inflammatory antibody sold by Janssen, that is in a Phase III trial, announcing in January the successful completion of a Phase I bioequivalency trial in the UK (News). The company expects to launch this product and another unnamed protein therapeutic in 2014 and has four preclinical products (Capabilities). Although the company has no partners for any of its products, it claims it is “in active discussions for regional partnerships in certain markets.”

I wondered how Epirus, a virtual company, had sufficient personnel to manage its own product development and market those products and its biomanufacturing platform globally (and wondered about the source of its product candidate and platform). Epirus lists five corporations as “technology partners” who “help us deliver the EPIRUS Biopharmaceuticals solution to market. Our partners have expertise in product development, infrastructure design and manufacturing,” although the nature of the relationships is not clear, i.e., who is paying whom. One of the partners is GE Healthcare, probably the source of the manufacturing platform via its Xcellerex acquisition. I am assuming that these partners have granted Epirus agency (a right to represent), but the idea of negotiating a geographically-specific, product/platform, technology support and transfer deal with multiple parties one of which may be an autocratic government and satisfying multiple suppliers makes my head spin. Clearly, deal-making in emerging markets can be complicated (see the recent product and tech transfer agreement between Protalix and the Brazilian Ministry of Health, Protalix press release), so I look forward to Epirus’s first deal.

Update: since the start of 2014, Epirus has:

  •  signed a deal with Ranbaxy, the India-based division of the Japanese pharma, Daiichi Sankyo, for commercial rights to BOW015 (its lead product) for a “broad range of territories including India, selected South East Asian market, North Africa, and several other markets” (January 8 press release);
  • raised an additional $36 million and brought in new investors and announced it plans to go public through a merger with a Nasdaq-listed company, Zalicus (to be completed this summer) (April 16 press release);
  • announced Phase III results for BOW015 that showed similar, if not slightly superior, efficacy in comparison to Remicade (June 11 press release); and
  • apparently is no longer presenting on its website the approach I cited above, to wit, to “combine new technologies and strategies to address macroeconomic trends in emerging environments in order to deliver biosimilar products to patients”. My guess is that the management thought that this theme will be difficult for public investors to understand and buy into.

 

(Not So) Wayback Machine

Readers of a certain age (“old”) will note my reference to a machine imagined by one of the most creative minds in animation, that of Jay Ward.  For those of more tender years, there is Wikipedia.  Since this is a good week to spend time with friends and loved ones which I hope you are doing as I am, I pulled out my version of the Way Back Machine to check up on the subjects of a few of my posts from the past year.  Here are my updates in reverse chronological order.

Epirus Biopharmaceuticals is a VC-backed company based in Boston with an explicit business plan for developing biosimilars (generic versions of successful biological therapeutics) made by proprietary manufacturing technology for the non-US/EU/Japan, rest-of-world markets (“Soup to Nuts” in July 2013).  The company had noted that is was in discussions for a deal on its lead product, a biosimilar for the anti-inflammatory drug, Remicade, and I posited that their model, that requires packaging products and services from technology suppliers, may make deal-making hard.  It was nice to see last month that Epirus closed its first big deal with Orygen Biotecnologica, a new Brazilian joint venture, to seek approval and then to manufacture the drug for Brazil to be followed by other Epirus products.  Orygen will build a new facility utilizing Epirus’s system and will pay the company, if all goes well, up to $275 million in milestone, royalty, and service fees (Epirus press release).  Orygen is a unique joint venture with partners being three Brazilian pharmas (Biolab Farmaceutica, Eurofarma, and Cristália) and encouragement from the government to build biologics manufacturing capacity in Brazil (Orygen BIO 2013 profile).

Back in June, I posted on Emory University’s new spin-out company called Drug Innovation Ventures at Emory (DRIVE) that was “to provide global solutions to address worldwide drug development and commercialization needs” (“Model or Muddle?”).  At the time I wrote my post, details were few and my concerns were several:  the source of molecules/lead candidates for DRIVE’s development program, whether it had the substantial funding needed for development, who will be liable for resulting products’ performance (the company or Emory), how involved Emory will be in the management, and whether the company could attract experienced management.  Recently, I noted that DRIVE has a better website although still lacking pertinent info (DRIVE) and that it had appointed Abel De La Rosa as CSO (DRIVE press release).  I noted previously Dr. De La Rosa’s experience is more in business and not science, and I am still muddled.

The Global Health Innovative Technology Fund (GHIT) was launched in May of this year by the Japanese government, the Gates Foundation, and several big Japanese pharmas, and I wondered about its impact on its stated goal of developing treatments, diagnostics, and vaccines for neglected infectious disease (“GHIT Ready”).  I posited that the program seemed to favor large companies and institutions, had too much bureaucracy, and may not award any one project sufficient funds to make a difference.  Earlier this month, GHIT announced its first awards that by design needed to be collaborations between a Japanese and a non-Japanese organization or company (FierceBiotechResearch article).  A total of $5.7 million was awarded to six groups, the largest (more than $3 million) going to two projects of the Takeda/Medicines for Malaria Venture team to fund pre- and clinical study of two new anti-malarial compounds.  It was nice to see awards also went to teams with smaller partners (three biotechs in US and Japan) and that about $500K will go to a project between Eisai, a Japanese drug company, and the Broad Institute, a research affiliate of MIT and Harvard.  The Broad has a substantial capability for identifying lead compounds unlike most academic institutions (Broad Therapeutics Platform) and is currently running about 50 screens including more than ten on global disease targets (Probe Pipeline).  I did not see in the GHIT announcement that projects will be funded for multiple years, but they should be.

About a year ago I reported on a new company in our local biotech community, Vaxxas, a start-up that is developing a nano-needle patch for vaccine delivery based on technology from an Australian researcher (“Vax Patch”).  Unfortunately, I found no news of note, and Merck remains the company’s only strategic partner.  My (free) advice is for Vaxxas to maintain its PR buzz with regular bits of news and to up its partnering effort.

Also last year (January), I reported on the take-over of the “non-profit pharmaceutical company” One World Health (OWH) by PATH, the Gates-backed global health product development program (PDP) (“Too Big to Flail”).  My rap against One World, and to a certain extent PATH, is that it had a large and expensive administration, spent too much on fund-raising, and had no clear path to commerce for its few products in development and no accountability to its backers (including me due to its tax-exempt status).  While OWH has a new website (OHW website) and a “A New Model of Drug Development” (really the standard PDP model in which commercialization [real use] is left to imagined company licensees), I did not see my concerns addressed.  On the plus side, I noted the recent announcement of practical project to develop an injectible form of an anti-viral drug for HIV prophylaxis with a potential commercial partner, Janssen (the pharma division of Johnson and Johnson) (OWH press release 1) and that it hired Ullrich Schwertschlag as CMO, an experienced drug developer and former colleague of mine at Wyeth (OWH press release 2).

Happy Thanksgiving, y’all.

Bio-simulation

Regular readers (Retronymers?  just made that up) will know that I think that biosimilar drugs (that is, generic versions of biologically-derived therapeutics like antibodies and growth factors) are one of the few product opportunities on which to base a viable global health business (others being vaccines and some diagnostics, and medical devices).  The value of these drugs is that they address difficult-to-treat, often-chronic diseases (like cancer, diabetes, and arthritis) and, if generic, could be affordable to the world’s growing middle class, and, with subsidy, to many of the world’s poor, especially if non-injectable versions were available.  My not-too-distant-future scenario is that the major generics companies, like Sandoz, Teva, Mylan, and Hospira, in addition to fighting for shares of the markets in the US and EU, will also sell into the ROW (rest-of-world) markets and competition will drive prices as low as possible.  (I should note that a few companies, like India-based Cipla, already have an explicit ROW strategy.)  My scenario hit a speed bump in July though when Teva, the world’s largest generic pharma, and Lonza, a Swiss-based biomanufacturing company, formally dissolved their 2009 partnership to develop biosimilars, citing a reassessment of the costs of clinical testing and getting approval in the US (FierceBiotech article).  Although Teva stated it will take on biosimilars in a “highly selective approach,” it and Lonza  apparently concluded that the USFDA, as indicated by its ongoing biosimilar regulation drafting, will require almost the same level of clinical evidence and manufacturing scrutiny on follow-on biologics as for the original drugs.  And higher costs mean lower profit margins in the usually high-margin US market.

In contrast to Teva’s and Lonza’s redirection, other companies are continuing their pursuit of biosimilars.  In June, two companies received recommendations for approval from the European Medicines Agency for drugs similar to Johnson and Johnson’s antibody drug, Remicade:  Remsima made by South Korean biotech Celltrion and US company Hospira’s Inflectra (another FierceBiotech article).  In August, Biocon, India’s largest biotech company, announced that it expects its copy of Roche’s anticancer drug, Herceptin, to be available next March (FiercePharma article).  Roche has already reduced the price of Herceptin in India by a third so it looks like it plans to compete with Biocon on price.  Last June, Sandoz, the generics subsidiary of Novartis, started a Phase III trial of its version of arthritis drug, Enbrel (formerly made by Wyeth now Pfizer), one of five biosimilars it has in development (yet another FierceBiotech article).  And in April, Cipla launched its version of Embrel in India (another FiercePharma article).  As for Samsung Biologics, a new venture of the electronics giant launched last year that I had theorized the company would be a major player (“Discount Drugs”), the company seems to be off to a slow, quiet start.

Interestingly, there are two startup companies based in the US with the explicit business plan of bringing low-cost biosimilar generic drugs to the ROW markets.  Epirus Biopharmaceuticals, a Boston-based company that I wrote about in July (“Soup to Nuts”), has an approach, which it has branded, to “combine new technologies and strategies to address macroeconomic trends in emerging environments in order to deliver biosimilar products to patients” (Epirus Approach).  Last week, the company released results from a comparative Phase III trial of BOW-015, its version of Remicade, that showed a slightly better response rate than the original drug (Epirus press release).  The company also said it planned to submit filings for regulatory approval in “targeted emerging markets” over the next year.   The second company is Coherus Biosciences, Inc. (Coherus) that is “focused on delivering high quality biosimilar therapeutics that will expand the access of important medicines to patients worldwide.”  Started in 2010 in the San Francisco area by Amgen and Genentech veterans, the company has raised about $30 million from VCs including Helix and Lily Ventures and has licensed in two biosimilar products from Daiichi-Sankyo of Japan for unspecified Asian markets.  Last week, the company struck its first big corporate deal with Baxter International, a mega health care product company, which agreed to $30 million upfront payment and $216 million in contingent milestones for an etanercept/Enbrel biosimilar for Europe, Brazil, Canada, and other markets (Coherus press release).

A question still to be answered is what will be the regulatory strategy of companies developing biosimilars for global markets.  One strategy may be just to pay the price for US approval and bear the costs of US regulator scrutiny of their manufacturing.  Another may be to skip the US and get approval in the EU that requires human equivalency trials but may be more lenient on the extent of preclinical and manufacturing data than the US.  Going directly to ROW countries is problematic since some require approval by the US or EU first, have no biosimilar approval path (Russia), or are still developing their own regulations (like India and China).  Brazil and South Korea are the exceptions with their own biosimilar regulatory process (for a nice write-up see Cliff Mintz post at Lifescienceleader.com).  Needless to say patchwork regulation is expensive and a barrier.

I suggested my own modest solution, especially relevant for the lower-income countries, in two previous posts (“Bottleneckrophobia” and “Trick or Treat”).  I proposed beefing up a WHO-based program, the Prequalification of Medicines Programme (PQP).  The PQP evaluates generic drugs for the “big three” global diseases for purchase by international agencies like UNICEF, and it also inspects manufacturers and clinical trial companies and certifies national quality control laboratories (PQP Fact Sheet).  In 2011, in addition to approving 35 products, the PQP conducted 90 inspections in 18 countries, ran 32 training courses, and certified six labs, all with a budget of about $10 million per year provided by UNITAID, the global health drug purchase financing group (UNITAID Programs).  In my posts I suggested strengthening the PQP approval process with donated expertise from wealthy nations’ regulatory agencies, like the FDA, and the multi-national pharma companies, and generating revenue through “user fees,” like the FDA does, to paid by companies seeking to avoid the expense of country-by-country registration in that with the PQP-approved products would be eligible for purchase by PQP-approved buyers, which would be any government or group able to commit to negotiated volumes and prices.  Clearly, substantial funding and political will are needed to strengthen the PQP, but WHO has been successful in setting up a similar system for the pre-approval of vaccines for UN supply (WHO vaccine program).  My guess is that if companies realize a global generics approval system will improve their profit potential, they will motivate, and maybe fund, the authorities.