More on the Business of Global Health (No. 4)

Here are a few items I spotted over the past two weeks.

FierceDiagnostics reported on the clinical test of a concept for a new diagnostic to identify patients with arteminesin-resistant malaria (Fierce article). Almost all the patients studied (about 1200) had parasites with a unique gene, meaning that the quick test could be used to improve treatment (a longer course of arteminesin or combinations of drugs) or to monitor a population being treated prophylaticly (so-called mass drug administration or MDA). MDA is a controversial approach since it may generate stronger resistance (WHO 2011 report on MDA for malaria).

The ever-inventive research group at Harvard University led by George Whitesides is working on a new approach to portable diagnostics using electrochemical analyses. As reported in FierceMedicalDevices (another Fierce article) and published in the Proceedings of the National Academy of Sciences (Nemiroski et al. 2014), the team demonstrated the device’s function using four tests: the detection of blood glucose, trace heavy metals in water for environmental monitoring, sodium in urine for clinical analysis, and a malarial antigen in blood. Fierce also noted that the team wrote software that allows data transmission via basic, not-smart, cell phones and that the whole system is being tested in India. No word on whether Prof. Whitesides, on whose technology the company, Diagnostics for All, is based, has plans for commercial development.

The product development organization, the Global Alliance for TB Drug Development, and Novartis announced the licensing of all the assets of Novartis’s TB therapeutic development program to the Alliance (TB Alliance press release). The assets included a class of promising drug candidates called indolcarboxamides that the Alliance stated it will continue to study. Not addressed in the press release was why Novartis was giving up on TB therapeutics and whether the Alliance tried to get some cash from Novartis to support its work.

One may hope that the Ebola crisis in western Africa may increase the public’s awareness of the lack of foresight and investment by our global society in the development of treatments for neglected diseases, medical infrastructure in Africa, and international health organizations’ ability to response to infectious disease epidemics. And maybe awareness will result in change. A blog post by Julia Fan Li (Li blog post) and a follow up table of the Ebola product pipeline (Bioentrepreneur table) in Nature’s Bioentrepreneur provided concise and cogent statements of the problem and status of developing treatments for Ebola.

Scott Kirsner, the innovation economy correspondent for the Boston Globe, wrote a column recently entitled the “Losing strategy in Mass. on education and health care” (Kirsner column). His point is a valid one: “Where are the voices talking about expanding access to education and health care, and driving costs down? In Massachusetts, they’re scarce. And that’s a losing strategy.” It is a losing strategy for the long-term health of our local economy which is widely viewed as an exemplar for the future of the US economy. As some readers may remember, I have tooted my horn on the potential for profit in providing low-cost, affordable health care (e.g., my post “Missing the Boat”) and I thank Mr. Kirsner for adding his push.

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Bytes from the Info-stream (No. 1)

Although I haven’t taken the time necessary for any original thinking recently, I have been tapping the info-stream for items relevant to the business of global health. Here is a brief summary of several stories I have noted over the past few weeks (mostly from the Fierce newsletters) and a bit of commentary.

In early July, FierceBiotech reported that Newton, MA-based AesRx was purchased by the health care giant, Baxter, for an undisclosed amount (FB AesRx story). AesRx is developing a molecule to prevent the sickleling of red blood cells and mitigate the effects of the genetically-caused sickle cell disease, which, as I noted my post, Still Neglected, is a major contributor to childhood mortality in Africa, possibly great than HIV. The good news is that apparently Baxter will continue the candidate drug’s development, but, given that Baxter seems to have little to no interest in emerging markets, it is not clear if the company will market the drug, if approved, in Africa.

Various concerned parties in the US are now waking up to a health care challenge that is common is the rest of the world: drugs, especially new ones, are priced beyond the ability of a society to pay for them (see my post, The Price is Right). Recently a Senate committee sent a letter to the CEO of Gilead requesting justification for the pricing of its new HCV drug, Sovaldi, and noted the potential for conflict of interest by physicians who were both writing treatment guidelines and consulting for Gilead (FP Sovaldi story). Also recently, Fierce reported that the managers of the Arkansas Medicaid program may be restricting access to Vertex’s cystic fibrosis drug, Kalydeco, in part due to its cost ($300k per year for treatment, FP Kalydeco story). FB provided this quote from the original Wall Street Journal article: “We have this public health mentality that all people have to be cured no matter what the cost, and also let the innovators charge whatever they want,” Matt Salo, executive director of the National Association of Medicaid Directors, told the WSJ. “Those are fine theories independently, but when you combine them together in a finite budget environment, it’s not sustainable.” As stated by an executive of CVS Caremark, major pharmacy chain, in a recent JAMA editorial, it is time to price drugs appropriately: “Effective approaches to control costs for high-priced medications need to be developed and evaluated to ensure broad, equitable, and appropriate use of these new interventions in an already stressed health care system.”

A new report on the market for biosimilar drugs (generic biological drugs) noted that it may top $35 million in the year 2020, growing at a CAGR of 60.8% from 2014 to 2020, in part, driven by sales in the developing world, especially China and India (FB press release and author summary). As I have noted in several posts (e.g., Biosimilar Fever) this growing market is a major opportunity for companies, both US and rest-of-the world.

Finally, some good news on the development of drugs for neglected diseases. The Global TB Alliance, a NYC-based product development program, reported that a new combination of three already-approved drugs (two antibacterials and pyrazinamide, a standard first-line treatment) yielded a 72% cure rate in TB-infected AIDS patients in a Phase II trial (FB TB story).   The combo is compatible with standard HIV therapies, works more quickly than current therapy (important for decreasing the chance of the development of resistance), and will likely be one-tenth the cost of current therapy. For more on TB drug development, see my post, Mix and Match.

Vakzine Projekt Replay

Vaccines are important in global health and I’ve written a number of posts on the development of new, possibly game-changing vaccines. Here is a post I wrote in August 2013 on TB vaccine candidate VPM1002, now licensed to the Serum Institute of India (SII). I checked clinicaltrials.gov and SII for an update of the Phase II trial, but no results have been released.

A major goal in achieving better global health is the development of a vaccine for tuberculosis, a latent bacterial infection found in about 27% of the world’s population. When the infection becomes active, e.g., when one’s immune system is weak (currently about 20% of all cases) and if it is untreated with antibiotics, it is fatal and about 1.4 million people die of TB annually (Global Health Primer TB). A vaccine is needed to replace the current, partially effective vaccine, called bacille Calmette-Guérin or BCG, that was invented in the early 1900s and of which more than 100 million doses are now administered each year, primarily in countries where TB is endemic like India, Pakistan, Russia, and Brazil. While BCG will prevent TB infection of infants, but with an efficacy of 50-80% (Wikipedia article), it does not prevent primary infection or conversion from the latent to active state in adolescents and adults. In addition, immune-compromised patients (e.g., as in HIV/AIDS) do not respond well to treatment with antibiotics and strains of TB resistant to some or all antibiotics are emerging (WHO TB Fact Sheet).

The global health community, academic institutions, and the biotech/pharma industry have responded to this need over the past years and in 2001 a modest $100 million was spent to develop a new vaccine (the total TB R and D spending was about $500 million, WHO TB background paper). This effort has resulted in about two dozen vaccine candidates in the pipeline with one in Phase III and seven in Phase II trials that are aimed at either preventing infection, stopping conversion, or eliminating infection (Global Health Primer TB). One candidate, VPM1002, achieved a major business milestone in its development last week when it was licensed to the Serum Institute of India (SII), a major manufacturer of vaccines for the developing/emerging market countries (Fiercevaccines press release). VPM1002 is based on an approach invented at the Max Planck Institute for Infection Biology of Berlin, in which the BCG vaccine (which is actually a weakened form of a mycobacteria related to the TB bug that infects cows) is made more effective by the addition of two genetic modifications to make the vaccine more “visible” to the immune system (for more on the technology, see Velmurugan t al. 2013).

The deal was clearly a major commitment by SII which will still need to scale up and get approved a GMP manufacturing process in parallel with conducting several Phase III-level trials, at a cost tens of millions of dollars at least. SII may also need to secure country-by-country regulatory approval for adult use. SII is a WHO prequalified vendor for sale to the WHO’s Expanded Programme on Immunization which promotes and subsidizes childhood vaccinations and already is a supplier of its version of BCG called Tubervac. The parties did not provide any information on the terms of the deal, so it is not clear what SII’s upfront financial commitment was. Nor it is clear how SII valued the candidate; the Phase II study was completed last October, but the results have not been reported according to the NIH trial tracking system (VPM1002 status). SII must have ranked VPM1002 highly since five of the other candidate vaccines at Phase II/III have no major manufacturing partners. One detail of the license was suggested in that the licensor’s CEO implied that SII is committed to the accessibility and affordability of the final product: “Only an experienced and specialized developer and global player like Serum is able to ensure that the vaccine will be made available to people everywhere at a fair price.”

I was also interested in how VPM1002 progressed to Phase II since the preclinical and early clinical studies likely required millions of dollars and substantial product development experience. According to the press release, Vakzine Projekt Management GmbH, a private company in Hannover, Germany (VPM) granted the license to SII after having obtained the rights from the Max Plank Institute’s tech transfer group. But my poking about the VPM website and the web did not yield useful information. VPM, founded in 2002 as a spin-out from another German research institute, the Helmholtz Centre for Infection Research, calls itself a fee-for-service consultancy and a speculative product developer: “VPM offers tailor-made consultancy and services based on in-depth experience in development of biopharmaceutical candidates. In addition, VPM acquires promising candidates from academic research and develops them in cooperation with a pool of partners to products with a high value potential” (VPM Company), but I wondered how the cash flow from the former could support the latter and doubted that the customers or licensees provided substantial capital. Three “shareholders” are listed by VPM, one a tech transfer company for German academic life sciences institutions, one the donor group for the Helmholtz Center, and the last, an individual. It is possible that VPM funds itself through license fees, and it claims that three of its five products have been licensed, but I could find substantiation for only one. The “CMV dense body technology project” was licensed to small German company earlier this year (Cvec press release). I suspected VPM receives a government or foundation subsidy, but found none. I was also mystified by VPM’s relative lack of product development experience; other than the CEO, none of the management seemed to have taken a product through to launch. But perhaps if I had kept up my study of German, I could be better informed. In any case, congrats to VPM and I look forward to learning more about their business model and the progress of VPM1002.

Readers with good memories may recall that I wrote a post on my favored TB vaccine candidate in June, 2010 (“Una Sorpresa Prometedora”). RUTI, a therapeutic vaccine being developed by Archivel Farma of Spain, has the potential to reduce the time of therapy from months to days and had completed a Phase I trial in 2010. Since then, however, news has been sparse. According to Clinicaltrials.gov, the Phase II trial was completed in January, 2012, but no results were reported (RUTI status). In general, no news on a candidate’s progress is not good news.

 

RTPCR for All

Real-time polymerase chain reaction (RTPCR or sometimes qPCR with “q” for quantitative) is shorthand for a sensitive, specific, and rapid analytical method for identifying genetic sequences of interest (and hence the microbes possessing those sequences) in environmental or biological samples.  While the details of RTPCR overwhelm me, my simple understanding is that the sample DNA is labeled with a probe of the known sequence (e.g., a sequence specific to the organism one is looking for) and amplified by copying until it can be detected and measured (for more, see a Wikipedia article).  The technique has been widely used in research for more than 20 years and is slowly finding commercial applications in areas such as forensics, clinical diagnostics, surveillance for biological threats, and food and water testing (e.g., Biofire Diagnostics Products ).  In the global health world, RTPCR is attractive because it is highly specific and sensitive and doesn’t require time-consuming culturing to increase the number of microbes to be detected, but its expense, complexity, and need for trained personnel and consistent utilities are barriers to its use in low-resource, high-disease-burden countries.

That being said, RTPCR diagnostics, and other DNA-based tests, are being developed for global diseases, most notably for one of the Big Three diseases, tuberculosis (TB), where early detection and differentiation of drug-resistant strains are sorely needed.  In the 2013 TB Diagnostics Pipeline Report (2013 Pipeline Report), twelve of the 21 tests listed as under development or in testing for wider use are DNA/PCR-based.  In two of my previous posts (“ReDux” and “ReDux Part II”), I wrote about the deployment of one RTPCR test, the Xpert MTB/RF assay, developed by the US company, Cepheid, with help from the Gates Foundation and the National Institute for Allergy and Infectious Disease.  Endorsed by WHO in 2010, the test is slowly being adopted in high-TB-burden countries for confirmatory testing (not initial diagnosis), in part due to its cost which is about $15,000 per machine and $17 per test although several organizations now provide subsidies that bring down the per test cost to less than $10 (Cepheid press release).  The impact of the Xpert assay on TB care is still in question; the authors of recent study of the use of the test concluded “clinical and programmatic effects and cost-effectiveness remain to be defined” and a point-of-care, initial assay was still “urgently needed” (Lawn et al. 2013).  This got me wondering what efforts there may be to develop a RTPCR assay system that could be cheap, robust, and easily-used and -deployed for global health.

An RTPCR assay has two parts.  First, a kit of reagents to prepare the sample and label the unique sequences is needed.  Coincidently, I know of a company that is doing that, Co-Diagnostics HBDC (for high-burden developing countries; Co-Dx HBDC) which is a division of Cooperative Diagnostics, a company started in 2007 by Brent Satterfield whom I met in 2008.  Co-Dx HBDC has a TB kit on sale and is working on others for HIV, HCV, and malaria (Co-Dx Products).  I haven’t spoken with Brent in years so I don’t know the price of kits or how sales are going.  The second RTPCR part is a box to amplify the DNA and read the resulting products.  I found a four PCR machines that I presume are useable for RTPCR and will fit any budget:

  • The Gene Machine is a cheap, do-it-yourself (DIY) PCR designed and built by Russell Durrett using PVC pipes, a 150-watt light bulb, a computer fan, and a Arduino Uno microcontroller (Popular Science article).  If you don’t have space at your kitchen table to build your Gene Machine and live near Boston, you can undertake a similar project at Boston’s Open Source Science Laboratory (BOSSLAB project).
  • Another DIY PCR was developed at ATX Hackerspace and is said to cost $85 in parts and a few hours in time according to a nice description at Instructables (DYI PCR).  I’m not sure if the PBR can in the first photo is a required or optional part.
  • The OpenPCR is for those who would rather build from a kit.  It is priced at $649 and has a nice wood housing with DNA-inspired decoration (OpenPCR).
  • The Palm PCR is a hand-held PCR by the Korean company, Ahram Bio, that debuted in 2010 as I noted in my post “BIO-Bits”.  The company came out with a low-end model that is available in white only from Zymogen Life Sciences (India) for introductory price of $3500 (to fit any budget Palm PCR).  I’m not sure if this device is RTPCR-ready but it sure is cute.

I also found two academic projects that have resulted in prototypes designed to be inexpensive to buy and operate.  A team at the Stanford School of Medicine recently published results of an epidemiological study in which their RTPCR system using inexpensive non-fluorescent probes identified toxic strains of E. coli (GenomeWeb article).  Even more interesting is the RTPCR system brought to prototype stage by a group at Cal Tech consisting of professors Axel Scherer and David Baltimore (he of the Nobel Prize and my MIT undergrad advisor) and senior scientist, George Maltezos.  According to a February 2013 CalTech News article, the project was funded by two Gates grants and the device is “small enough to stow in a backpack and is as simple to operate as a DVD player.”  What is not mentioned is that the team formed a company called s2a Molecular, Inc. (“From sample to answer”) this year.  Unfortunately, the s2a website is under development.  I wonder if the company has data on human samples, has done any field tests, and has lined up any corporate partners?

 

I don’t often correct my posts (because I don’t fact check and no one catches me) but I wrote last week that the two biosimilars were recommended for European approval.  Actually, it was one.  Celltrion’s Remsima will be sold as by Hospira as Inflectra (FierceBiotech article).

 

Vakzine Projekt

A major goal in achieving better global health is the development of a vaccine for tuberculosis, a latent bacterial infection found in about 27% of the world’s population.  When the infection becomes active, e.g., when one’s immune system is weak (currently about 20% of all cases) and if it is untreated with antibiotics, it is fatal and about 1.4 million people die of TB annually (Global Health Primer TB).  A vaccine is needed to replace the current, partially effective vaccine, called bacille Calmette-Guérin or BCG, that was invented in the early 1900s and of which more than 100 million doses are now administered each year, primarily in countries where TB is endemic like India, Pakistan, Russia, and Brazil.  While BCG will prevent TB infection of infants, but with an efficacy of 50-80% (Wikipedia article), it does not prevent primary infection or conversion from the latent to active state in adolescents and adults.  In addition, immune-compromised patients (e.g., as in HIV/AIDS) do not respond well to treatment with antibiotics and strains of TB resistant to some or all antibiotics are emerging (WHO TB Fact Sheet).

The global health community, academic institutions, and the biotech/pharma industry have responded to this need over the past years and in 2001 a modest $100 million was spent to develop a new vaccine (the total TB R and D spending was about $500 million, WHO TB background paper).  This effort has resulted in about two dozen vaccine candidates in the pipeline with one in Phase III and seven in Phase II trials that are aimed at either preventing infection, stopping conversion, or eliminating infection (Global Health Primer TB).  One candidate, VPM1002, achieved a major business milestone in its development last week when it was licensed to the Serum Institute of India (SII), a major manufacturer of vaccines for the developing/emerging market countries (Fiercevaccines press release).  VPM1002 is based on an approach invented at the Max Planck Institute for Infection Biology of Berlin, in which the BCG vaccine (which is actually a weakened form of a mycobacteria related to the TB bug that infects cows) is made more effective by the addition of two genetic modifications to make the vaccine more “visible” to the immune system (for more on the technology, see Velmurugan t al. 2013).

The deal was clearly a major commitment by SII which will still need to scale up and get approved a GMP manufacturing process in parallel with conducting several Phase III-level trials, at a cost tens of millions of dollars at least.  SII may also need to secure country-by-country regulatory approval for adult use.  SII is a WHO prequalified vendor for sale to the WHO’s Expanded Programme on Immunization which promotes and subsidizes childhood vaccinations and already is a supplier of its version of BCG called Tubervac.  The parties did not provide any information on the terms of the deal, so it is not clear what SII’s upfront financial commitment was.  Nor it is clear how SII valued the candidate; the Phase II study was completed last October, but the results have not been reported according to the NIH trial tracking system (VPM1002 status).  SII must have ranked VPM1002 highly since five of the other candidate vaccines at Phase II/III have no major manufacturing partners.  One detail of the license was suggested in that the licensor’s CEO implied that SII is committed to the accessibility and affordability of the final product: “Only an experienced and specialized developer and global player like Serum is able to ensure that the vaccine will be made available to people everywhere at a fair price.”

I was also interested in how VPM1002 progressed to Phase II since the preclinical and early clinical studies likely required millions of dollars and substantial product development experience.  According to the press release, Vakzine Projekt Management GmbH, a private company in Hannover, Germany (VPM) granted the license to SII after having obtained the rights from the Max Plank Institute’s tech transfer group.  But my poking about the VPM website and the web did not yield useful information.  VPM, founded in 2002 as a spin-out from another German research institute, the Helmholtz Centre for Infection Research, calls itself a fee-for-service consultancy and a speculative product developer:  “VPM offers tailor-made consultancy and services based on in-depth experience in development of biopharmaceutical candidates.  In addition, VPM acquires promising candidates from academic research and develops them in cooperation with a pool of partners to products with a high value potential” (VPM Company), but I wondered how the cash flow from the former could support the latter and doubted that the customers or licensees provided substantial capital.  Three “shareholders” are listed by VPM, one a tech transfer company for German academic life sciences institutions, one the donor group for the Helmholtz Center, and the last, an individual.  It is possible that VPM funds itself through license fees, and it claims that three of its five products have been licensed, but I could find substantiation for only one.  The “CMV dense body technology project” was licensed to small German company earlier this year (Cvec press release).  I suspected VPM receives a government or foundation subsidy, but found none.  I was also mystified by VPM’s relative lack of product development experience; other than the CEO, none of the management seemed to have taken a product through to launch.  But perhaps if I had kept up my study of German, I could be better informed.  In any case, congrats to VPM and I look forward to learning more about their business model and the progress of VPM1002.

Readers with good memories may recall that I wrote a post on my favored TB vaccine candidate in June, 2010 (“Una Sorpresa Prometedora”).  RUTI, a therapeutic vaccine being developed by Archivel Farma of Spain, has the potential to reduce the time of therapy from months to days and had completed a Phase I trial in 2010.  Since then, however, news has been sparse.  According to Clinicaltrials.gov, the Phase II trial was completed in January, 2012, but no results were reported (RUTI status).  In general, no news on a candidate’s progress is not good news.

 

Reality Check

[4/16/13:  I have revised last week’s post to reflect its review by my interviewee, Manish Bhardwaj whose notes appear in brackets below.]

I had a reality check last week when I had a Starbucks’ sit-down with Manish Bhardwaj, PhD, founder and current CEO of Innovators in Health (IIH).  Mannish came to my attention in February 2010 when I noted he was giving a talk at MIT entitled “Technology X will save the world and other myths of social entrepreneurship,” which, according to the description, was about the need for tech/social entrepreneurs to understand the market place and the customer/client as a critical element for success.  I missed the talk but contacted him recently (three years later) and asked for some of his time.  When we met and after giving him my brief bio, I listened for the next hour plus as he shared his experience in tech-based social entrepreneurship, his heart-felt passion for improving lives of the less fortunate, and his “grand unified theory” for reconciling the inequities of the world.

His credentials as a technology entrepreneur are solid, having earned a bachelor’s degree at the Nanyang Technological University, Singapore, and master’s and doctoral degrees in electrical engineering/computer science at MIT and then co-founding a wireless chip design firm, Engim, whose IP was acquired by a Canadian company around about 2005 (IIH People).  While working on his doctorate, he apparently got the technology-X-will-save-the-world bug and, in 2007,  initiated or joined a team, IIH, formed to enter MIT’s 100K Entrepreneurship Competition with the aim of developing technologies to improve the delivery and use of the standard drug therapy for tuberculosis.  IIH won a prize for their pitch (and also that year a grant from a national innovation association and an international development award at MIT), but more importantly gained enough backing and momentum to prototype and pilot study in India several parts of an integrated TB drug delivery program (for details, see IIH Solutions).

IIH has local community partners in the two places it is testing its solutions in India (Bihar state and the city of Delhi), and Manish is a primary connector, facilitator, and promoter of the myriad relationships needed.  [Note from Manish: The Delhi deployment is mostly the work of Microsoft Research, where my close friend and IIH co-founder, Bill Thies, went to work. The only credit we can take is to have gotten that project off the start and then handed over to Microsoft Research.]  He spent months talking and living with many of the principals from the TB patients and their families to government TB program administrators to community health workers to representatives of foundations and private aid organizations.  And while IIH’s technological solution improved the care of about 400 patients over the past three years, his experience in trying to implement this approach changed him and the direction of IIH.  [Note from Manish: We did not deploy any technology in our treatment program in Bihar (we briefly tested it in 2008 to study viability.) So the 400 patients have gotten better due to our investments in training people, not any technology.]

He learned first hand of the pernicious connection between poverty and  health where the cost of accessing care is too high because a patient cannot earn that day’s subsistence income while traveling to a clinic, illiteracy and lack of trust in public hospitals need to be overcome, and malnourished patients have the adverse side effects from the drugs they are given.  And, moreover, how intractable to remedy is this poverty/health connection.  So he is now focused on improving what he has concluded is a critical part of the health care delivery system, the community health care workers, who are primarily women who travel to villages and through slums to find and refer patients to clinics and sometimes monitor their treatment.  He and his partner organizations are working to improve the training, pay, and status of the workers with the goal of serving a “catchment” population of hundreds of thousands and treating 10,000 in the next two years.  [Note from Manish: We started in 2010 with the goal of treating 10,000 patients in two years, which I abandoned pretty swiftly after learning of the challenges. We did just 400 in 3 years!]

I also learned Manish is interested in and working on other three other aspects of his unified theory of how to make the world better by addressing:

  • the failure of social entrepreneurs and NGOs (nongovernmental organizations) in general to appreciate and attend to the need and difficulty of scaling their particular solutions to the point of making a difference;
  • the failure of governments and their bureaucrats to be motivated and guided by ethics, knowing and doing the right thing; and similarly
  • the reliance of entrepreneurs of the developed world on technological solutions and failure to be guided by aspirations.

[Note from Manish: I think as far as my “unified theory” of making the world better, I think institutions universally have failed us in instilling a sense of civic virtue, in training us to deal with the ethical dimensions of large problems like poverty, climate change, etc., and guiding young people in not just how to do things but also what is worth doing.]

Hence, in addition to doing for-profit work so he can pay his bills and support IIH and Indian projects, Manish is a fellow at the Dalai Lama Center for Ethics and Transformative Values at MIT (Technology Review article).

I appreciated the opportunity to meet Manish and get a reality check on my aspirations in global health.  My work is far removed from people living in and dealing with poverty, and it is good for me to get a first-hand account of the hard work that is needed, to put the role of technology in perspective, and to meet someone so clearly dedicated to making a difference.

Dx Rock Stars

The market for new point-of-care diagnostic tools for global health (POC Dx) got a major boost last week when it was announced that Alere, a mega-diagnostics and health management company based in nearby Waltham, MA, was receiving more than $40 million in funding from the Bill & Melinda Gates Foundation (Fierce Med Devices article and Alere press release).  My spin is that, by accepting the funding, Alere is acknowledging the profit potential in diagnostics for global health (albeit initially for two of the Big Three diseases- HIV/AIDS and tuberculosis) and value in investing in the R and D needed to adapt its products for sale in resource-constrained settings.  Given my interest in POC Dx as a potent tool in improving health care delivery (see my posts tagged diagnostics), I thought it would be interesting to take a closer look at the deal and at a competing company.

Alere is a up-and-coming company with a core strategy to provide relatively simple, non-lab-based tests to patients and health care providers along with systems to monitor, inform, and ultimately improve health while lowering costs (Alere and Investor presentation 2012).  And it is doing well.  It is publicly-owned with a $2 billion market capitalization, 14000 employees, and 2012 annual revenues of $2.8 billion which are up 16% over 2011 (Boston Business Journal article 1).  Alere has grown through acquisition, buying six companies since late 2011, boosting revenue but also taking on a big debt of $3.4 billion (Boston Business Journal article 2).  The Gates funding has two parts:  a $21.6 million grant for R and D for incorporation of a TB test into the Alere Q platform (said to be “a compact, portable, and robust device intended for molecular testing”), and a $20.6 million loan for expanding the capacity of a German-based factory for the manufacturing of Alere’s POC TB Nucleic Acid Test and POC HIV Viral Load Test which are currently in the final stages of development.  The press release implies the latter is to reduce the cost and improve the supply of the tests via automation.   Apparently the money comes with the typical Gates strings.  According to the press release, “The Gates Foundation will provide these loans in exchange for commitments from Alere to make these diagnostics available at an affordable price to people in need in developing countries.”  I have yet to read one of these global access agreements but imagine each includes a large amount of wiggle room in terms of how, when, and at what price the products will be made available.  For its TB Dx, Alere may learn from how Cepheid is selling its GeneXpert system, a expensive and non-POC machine whose development was also partly funded by the Gates (my post, “TB Dx:  Getting There”).

Interestingly, the underlying technology for the Alere Q platform came from one of the recently acquired companies, Ionian Technologies, that also was a Gates grantee.  In 2009, the company got a $665K grant to develop its “NEAR POC” for TB (Gates press release).  Ionian began as a startup in 2000 out of the Keck Graduate Institute, one of the Claremont Colleges and therefore a sister institution to Pomona College, an outstanding liberal arts college near to my heart and wallet.  So when (if) the Alere Q/TB test gets to market, it will be more than 13 years in development, so don’t let anyone (like me) tell you that Dx product development is faster than therapeutics development.  As for the $21.6 million for the TB test development, I think this is a generous amount and assume that some of the grant will be used to incorporate other tests for bad bugs into the platform since the ultimate value of POC Dx will be a box that can differentiate between the many possible infections afflicting those with limited access to medical care.

In contrast to the multi-year and multi-million dollar saga of Alere’s POC TB test is the story of QuantuMDx, a UK-based company started in 2008 that has an express mission to develop Dx for “third and first world nations” (QuantuMDx).  According to the company, its most advanced product is the Q-POC, a hand-held device for diagnosis of tuberculosis, HIV/AIDS, and sexually transmitted infections and their drug-resistant strains.  The device will deliver results in less than 20 minutes at a fraction of the cost of lab-based tests and will be launched this year (Q-POC).  The company is using a number of technologies in its products (QuantuMDx Technology):

  • DNA extraction from raw samples via simple flow-through (invented by the founder when the company was garage-mode);
  • Nanowire biosensors for analyte detection (licensed from NanoSys, a Harvard start-up [GEN article]);
  • Single or multiple step PCR; and
  • Mobile apps for Dx support.

The funding of the company is less than clear.  The company has no corporate sponsors or licensees and in 2012 received shares of two UK government grants (which totaled about $7 million) that were  for cancer and malaria Dx R and D.  That seems a bit thin to support a 35-person company but then one founder is a “Biotech Rockstar” (O’Halloran blog) so maybe the company self-funded.  It is also not clear what data have been obtained using the platform; I could find no reported test results, published or unpublished.  Be that as it may, if the company is able to market a device capable of quickly profiling a range of infectious organisms, bacterial and viral, with minimal sample preparation, it will be in a good position to offer a competing product to the Alere Q, and competition is good for the public health buyers.  Presumably, the company has talked with the Gates Foundation, the Wellcome Trust, PATH, Alere, and other major diagnostics companies about funding the testing and approval and manufacturing development and building phases.  If not, there is no time like the present.