The Business of Global Health No. 24

High Tech Cold Chain  Sanaria, a Maryland-based company that has been plugging away at a malaria vaccine for more than ten years, recently brought attention to its collaboration to develop a “robust” cold-chain distribution system for Africa. In a press release, the company noted a collaboration with Cryoport, a CA company that makes liquid nitrogen dry vapor shipping containers which maintain a constant below -150°C temperature. Sanaria’s vaccine, called PfSPZ, is soon to enter field trials in Mali and will require refrigerated storage and distribution. The cost and feasibility of such a distribution system was not mentioned.

Dx Automat  Thyrocare Technologies, Inc., is an Indian company that may be a model for drastically reducing the cost of diagnostics testing. According to its website, the company offers a menu of almost 200 tests and runs more than 30,000 samples overnight in an automated facility in Navi Mumbai. It services 200 clients in 2000 cities and towns, uses an IT-enabled air cargo system for sample delivery, and plans to go public this year (story in FierceMedicalDevices).

Made in China  In a first for a drug being developed by a Taiwanese company, the FDA granted a “breakthrough therapy designation” for a novel HIV-entry inhibitor called TMB-355 (ibalizumab) to TaiMed Biologics. As described in a FiercePharmaAsia story, the drug has been under development for about a decade and is being manufactured for clinical studies by WuXi PharmaTech, an international and NYSE-listed CRO based in Shanghai. The designation is intended to accelerate the regulatory approval of needed and novel meds.

IP Theft versus Deals  A recent academic study published in Health Affairs, Beall et al. 2015, compared the prices of antiretroviral drugs resulting from compulsory licensing (in which a country’s government allows an in-country manufacturer to make a drug it would otherwise be required to obtain a license for from the drug originator company) to prices available through an international procurement program. Compulsory licensing has been promoted by global health “advocates” as a method for decreasing the cost of needed drugs in developing countries. The authors looked at 30 compulsory license cases and 673 procurements made by the WHO and Global Fund and found the compulsory license prices exceeded the procurement price median in 19, often with a difference of more than 25 percent. Application of these findings by governments, international agencies, and pharma companies may result in improving access to medicines in low-income countries.

BMGF Ventures Again  The Bill and Melinda Gates Foundation recently placed a substantial bet when it invested $52 million in the German company, CureVac (press release in FierceBiotech). The Foundation evidently liked the company’s unique mRNA-based technology and its potential low-cost and thermostable vaccines since this equity buy and additional undisclosed project-specific funding is many times any of the Foundation’s few previously-made investments. According to CurVac’s website, the company has more than six RNA vaccines in development, several of which (rotavirus, HIV, and tuberculosis) have large developing-world demand. CureVac has two major pharma partners and long-time backing by Dievini, a leading European venture capital firm founded by IT billionaire, Dietmar Hopp, which also made an additional $24 million investment (story in FierceBiotech).

The Business of Global Health No. 23

Candidate No. 4  A fourth Ebola vaccine candidate has advanced to human trials. Last week, Novavax announced that it was recruiting 230 subjects in Australia for a Phase I study of its Ebola GP Vaccine (FierceVaccines press release). The candidate, comprising a Ebola glycoprotein and a proprietary adjuvant called Matrix-M™, is the first vaccine to employ an Ebola subunit rather than the entire virus and was designed, animal tested, and manufactured at scale in an amazingly short six months. As reported by a FierceVaccines story, although the Novavax candidate is starting behind three others (by GlaxoSmithKline, Merck, and Johnson & Johnson), due to its subunit design, it is closely matched to the epidemic strain and may be more effective. The candidate is also unique in that it is made using Novavax’s pioneering insect-cell-based and single-use (disposable) manufacturing that can generate large quantities of protein at lower costs than traditional approaches.

Fast Track  As for getting an Ebola vaccine tested and approved, the track has been a bit murky because each country in which a vaccine is tested for efficacy or approved for use needs to have a strong regulatory authority and/or trust a national (like the USFDA), regional (none), or international (like WHO’s Prequalification Program) review agency. An expert panel convened by UK’s Wellcome Trust and the University of Minnesota’s Center for Infectious Disease Research and Policy examined this question and others and recently published guidelines for accelerating vaccines against Ebola and other emerging infectious diseases (Wellcome press release). The Recommendations all make sense (e.g., streamlining manufacturing, working with afflicted countries’ public health officials, and stockpiling vaccine for the future) but, to me, are too non-specific to be helpful. For example, at the country level I’d like to know who is responsible in the afflicted countries for approving trials, who will be responsible for post-marketing monitoring, and who will provide liability coverage. Also disappointing was the lack of interest in defining the role of the private sector. Instead the panel noted a (incorrect) “fundamental conflict between public health and profit as a driver for developing new vaccines” and the assumption that “price transparency” is needed to assure vaccine supply. I found it surprising that the panel did not even acknowledge that many companies are making substantial and risky financial commitments and the least it can do is make realistic, specific recommendations to reduce that risk to increase the likelihood that an effective vaccine is developed soon.

More Water in the Pool  The UN-backed organization, Medicines Patent Pool (MPP) announced completion of a license agreement with Merck & Co. for use of its antiretroviral drug, raltegravir, a key medicine approved for children living with HIV, in pediatric formulations (MPP press release). Under the terms of the license, the MPP may offer sublicenses to generic drug makers at no or low royalty cost for formulations to be sold in 92 low- and middle-income countries, the intent being stimulation of wider access and the invention of regionally-tailored versions (MPP did a similar deal with AbbVie for two antivirals last December). Since its founding in 2010, MPP has closed agreements with five companies and the NIH for 11 antiretrovirals and one medicine and has sublicensed 10 manufacturers who are “actively distributing low-cost medicines in developing countries or pursuing development plans for future introduction.” While I think this is a valid and potentially fruitful approach to providing needed global meds, if done aggressively and widely (for a bit more see my post, “Checking the Pool’s Temperature”), I favor business-to-business deals with technology transfer as Gilead Sciences has done for its antivirals and more recently for anti-hepatitis C drugs. In this B2B approach, the originator company engages the strongest and most committed partners and has a stake in their success.

 

The Business of Global Health No. 22

Get Smart  As reported in a story in FierceMedicalDevices, researchers led by Samuel Sia of Columbia University published results from a field study of a prototype point-of-care diagnostic device for HIV and syphilis infections that plugs into a smart phone. The device is about the size of a deck of cards, uses disposable plastic cassettes preloaded with reagents, and analyzes blood from a single finger prick. The results are displayed on a smart phone or iPod screen that also serves as a power source. In the study, Laksanasopin et al. 2015, the device correctly identified infections in 96 patients in Rwanda 90-100% of the time with a specificity of 79% to 100%, and results were provided in 15 minutes. In a story by Columbia University, Prof. Sia estimated the device can be manufactured for $34 and said “We are really excited about the next steps in bringing this product to the market in developing countries and we are equally excited about exploring how this technology can benefit patients and consumers back home.”

Patient Patients  Containment of the Ebola outbreak will be enhanced by methods to diagnosis and monitor suspected cases, to implement treatment sooner and reduce transmission. The Scripps Translational Science Institute recently announced it had received a grant from the Fighting Ebola program of USAID to develop such a mobile system (press release in FierceMedicalDevices). As described in a FierceMedicalDevices story, the system will use “Band Aid-type” sensors to monitor an individual’s vital signs and the data will be transmitted through two wireless monitors to a laptop-based analysis program. Then a “personalized physiology analytics” platform will use advanced machine learning algorithms to detect subtle changes in the individual’s physiology, changes that indicate an advancing infection. Technology for the system will be provided by three collaborating companies. No estimate for the time to a prototype was given.

Needless Needles  Vaxxas, a Cambridge-MA start-up with global ambitions, closed a second tranche of funding recently, a $20 million round that brought its total VC input to $33 million (press release in FierceVaccines). Vaxxas is developing a needle-free vaccination device called a NanopatchÔ, an ultra-high density array of projections that are dry-coated with vaccine which is quickly and painlessly delivered just below the skin. The system offers advantages in administration, packaging, and transport (no refrigeration needed). The company has a collaboration with Merck and last fall received funding from WHO to conduct preclinical studies on a version to administer a polio vaccine. For background, see my post, “Vax Patch”.

Eyes on the Prize  According to its website, ayzh (pronounced “eyes”) is a “for-profit social venture providing health and livelihood solutions to impoverished women worldwide through development of low-cost, appropriate technology designed to meet the unique needs of women in resource-poor settings.” The company’s lead product is a four-piece clean birth kit to enable safer and healthier births in low-resource hospital settings (see PATH one-pager). According to an MIT story, the kit has a retail price of about $2 and has been used in more than 100,000 births in countries including Afghanistan, Ghana, Haiti, Honduras, India, Kenya, Malawi, Tanzania, and Uganda. The company is registered in both India, where it does its manufacturing and is focusing B2B sales, and the US, where it has a business office in Ft. Collins, CO.

The Business of Global Health No. 21

SII May Do it Again  The Serum Institute of India (SII) is a leading for-profit provider of vaccines to global public health programs and has a corporate policy of quality and low price. Already known for venturing where the big pharma vaccine companies fear to tread (e.g., making the Africa-specific meningitis vaccine, MenAfriVac, and developing a low-cost ten-valent pneumococcal vaccine), SII recently announced it was on track to launch a low-price human papilloma virus vaccine to compete against Merck’s Gardasil and Glaxo’s Cervarix. As reported in FierceVaccines, an SII exec said the price may be one-third the current UNICEF/GAVI price of Gardasil which is $4.50 per dose and thought to be a barrier to its use in public health programs.

Sanofi Invests in India  The Paris-based multi-national drug company, Sanofi, announced significant investments in reaching diabetes patients in India, estimated to number 65 million. As reported in FiercePharmaManufacturing, the company will buy into a chain of 26 diabetes clinics run by India’s Apollo Hospitals for $14.5 million and build a $74 million facility to make its version of human insulin in Hyderabad, the only one outside Germany.

BMGF Ventures Again  Although I have criticized the lackadaisical approach to investing in early-stage companies by the Bill and Melinda Gates Foundation (see my post, “Nothing Ventured”), I am glad to see its venture group continues to grind forward. Last week, , Sera Prognostics, Inc. said in a press release that the BMGF added $5 million to a recent B Series funding round, bringing the total to $25 million. The company is using proteomics to identify markers in blood associated with complications of pregnancy. The new funding will be used in part “to advance the development of a new tool that can be effectively and economically deployed in underserved developing countries to identify women’s risk of preterm birth,” the leading cause of newborn mortality.

Ebola Update  While an acute public health failure, the Ebola outbreak in Western Africa continues to provide an example of how quickly public and private resources can be applied in global health, if there is the will. Here are updates on vaccines, a drug, and a diagnostic.

Jumping a step in standard product development, the NIH will soon initiate a Phase III trial of vaccine candidates from GlaxoSmithKline and Merck/NewLink. According to a story in FierceVaccines, either one of the candidates or a placebo will be administered to 30,000 people in Liberia.

As reported in FierceBiotech, researchers from the French Institute for Health and Medical Research (Inserm) will soon publish results of a Phase I study of favipiravir, an anti-viral drug developed by Toyama Chemical, a division of Fujifilm, on 80 Ebola patients in Guinea. The study found that the drug, which is marketed in Japan for treating influenza, decreased mortality by half for patients in early stages of the disease, but was not nearly as effective in treating those with high viral levels.

The German company, Stada Pharma, announced that it will begin selling a rapid diagnostic assay for Ebola developed by the German start-up, Senova (FierceMedicalDevices story). The test detects an antigen using a lateral-flow format and centrifuged body fluid samples, so requires battery power but otherwise is good for field use.

Running on Empty?  From an article in the Boston Globe, I learned of a study that found the revenues of recently developed drugs have not exceeded their development costs. Berndt et al. 2015 analyzed the economic returns for four groups of new prescription drugs launched in the US in 1991–94, 1995–99, 2000–04, and 2005–09 and found lifetime net economic returns were positive and reached a peak with the 1995–99 and 2000–04 groups, but that “returns have fallen sharply since then, with those for the 2005–09 cohort being very slightly negative and, on average, failing to recoup research and development and other costs.” Perhaps pharmaceutical companies should try developing drugs that could be sold at low margins to billions of people outside the US.

Teapot Tempest

Médecins Sans Frontières (MSF, or Doctors Without Borders) is likely the world’s most well-know and effective humanitarian health care organization. In many large-scale, nature- and human-made disasters, MSF is the first-responder, for example, treating patients in the Ebola outbreak before the WHO had even issued a press release. But in the hoopla surrounding the recent release of its report on vaccines, the MSF’s bashing of Big Pharma may have obscured a more positive message.

The sound bites that accompanied the report, called “The Right Shot: Bringing Down Barriers To Affordable and Adapted Vaccines” (Report), were “Glaxo, Pfizer Blamed for High Vaccine Prices in Poor Countries” (Bloomberg) and “MSF Slams Expensive Vaccines” (Reuters) and may have been a result of the combative phrasing of the Report’s executive summary: “the challenges we face in purchasing vaccines at an affordable price have become acute. In addition, countries that are unable to afford these high prices are increasingly voicing their frustration at the inability to protect their children against life-threatening—but preventable—diseases.” My reading of the Report is that it does a good job in reviewing the complications, and success, of the current global immunization effort and makes several good recommendations. I address some of these points below, but first some background. Not surprisingly, MSF is a not a major provider of vaccination; it notes delivering 6.7 million doses of vaccines and “immunological products” (I’m not sure what is meant) in 2013 while, in comparison, the national programs subsidized by GAVI, the global alliance for vaccination, immunized 145 million children with multiple doses in same year. Also, as noted the Report, MSF has been in five-year negotiations with GlaxoSmithKline and Pfizer, the two pharma companies that developed the most recent childhood vaccine (Pneumococcal Conjugate Vaccine or PCV), to obtain the vaccine at the GAVI price ($3-3.50 per dose), but to no avail. Both companies have been willing to donate the vaccine, and MSF resisted, citing concern about limitations on use, but decided to accept for the near-term (Report, page 12).

MSF’s main points in the Report are as follows.

-Price is a barrier to immunization. Well, yes and no. Not for immunization to the nine childhood diseases as recommended by WHO and covered by GAVI (tuberculosis, measles, rubella, diphtheria, tetanus, pertussis, hepatitis B, Haemophilus influenzae type b, poliomyelitis; under $10 per child per year, Report, page 7). MSF estimates that adding in the three most recently developed vaccines (for pneumococcal diseases, rotavirus and, for adolescent girls, human papillomavirus) may increase the total to $40, a substantial increase, but, as MSF acknowledges, a price that may be reduced by competition from other vaccine makers. MSF also expresses justified concern that some countries, especially those countries now no longer eligible for GAVI subsidy and middle-income countries, will not be able to afford these costs. But the authors also note that “a GAVI-commissioned fiscal space analysis generated a model predicting that GAVI-graduating countries would need to allocate only 0.6% of health budgets to independently support the full cost of vaccines.” (Report, page 8). So it is the cost of the vaccines or a country’s allocation of health funding that is the problem? Also it is not clear to me, and not given in the Report, what proportion of the overall cost of vaccination (e.g., including “human resources, transportation, cold chain, infrastructure, wastage, other immunisation supplies, waste management, etc.” Report, page 106) is the per-dose cost. Further, according the Bloomberg story, Glaxo and Pfizer have already agreed to offer their PVC vaccines to the graduate countries at the GAVI price.

-Vaccine prices are not readily available, i.e., the market is not transparent. This is true (although MSF was able to assemble lots of price data for Annex A of the Report), but this is really a minor factor in the negotiation between a likely purchaser and seller. More important factors to the seller are the volume and period of the purchase. As MSF points out, countries have and are creating procurement pools to better their negotiating position (Report page 23). Also in 2011, WHO started the Vaccine Product, Price and Procurement (V3P) project to gather and disseminate price information (V3P). I also should point out that manufacturers have a difficult time predicting their production costs and therefore need to be cautious in negotiation for a product yet-to-be-made (MSF points out the PCV takes two years to make).

-New vaccines that are better adapted for under-resourced environments are needed. This is true. Longer shelf-life, ease of delivery, and fewer doses are improvements that many companies and research groups are working on with some success. MSF says there have been 30 such improvements but few have been implemented (Report, page 29), and rightly points out that for vaccine makers, “Without clarity on market uptake, developing a business case for adapted vaccines remains challenging.” MSF’s answer is that purchasers, especially the largest like UNICEF, need to use their procurements to drive innovation. I agree and add that the advance purchase contracts could be used to fund late-stage technology development. I should also note that last spring Glaxo announced that it is developing vaccines and other products specific to the health needs of Africans (FierceVaccines story).

-Competition does and will bring down prices. “Efforts to accelerate real competition in the vaccines market will deliver the most sustainable price reductions” (Report, page 4). Amen. That’s how business works.

Of course, Pfizer execs tune in to the media, too, and announced, at the annual GAVI Pledging Conference and six days after the MSF report release, that the company was decreasing the GAVI PCV price by 6% to $3.10 per dose (and extending the price to former GAVI countries) (press release in FierceVaccines). Not good enough, responded MSF, the price should be $1.67 per dose, as reported by FierceVaccines. Why? According to MSF, because Pfizer sold about $4 billion of PCV in 2013 (of which about $500 million were GAVI sales) (relevant?) and the Serum Institute of India, a leading generic vaccine-maker, plans to sell a PCV at $2 per doses (relevant?). Bill Gates, also at the GAVI meeting, added to the tempest, noting in an interview in the Guardian that the PCV price is very cost-effective in comparison to other health costs and that its manufacture is complicated and therefore the price can’t be zero. His ire may have been raised because, as reported by the Guardian, at the meeting “MSF organised a stunt featuring supporters dressed as Merkel, David Cameron, Barack Obama and others spinning “Pharma’s wheel of fortune”, claiming that whichever way the wheel was spun, the drug companies always won.”

The good news is that the GAVI announced at the Pledging Conference that it had received $7.5 billion in new pledges and that with the $2 billion in hand it will be able to meet its immunization program goals for the next five years (GAVI press release). And MSF released a report with lots of solid data and recommendations for improving global immunization. The not-so-good news is that the pledges and the report may have been overshadowed by hyperbole and stunts from MSF’s public relations group.

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.