march 2019 vol. 37 no. 03 pharma intelligence · david lee, partner at simon-kucher & partners,...

In Vivopharma intelligence ❚ informa

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vol. 37 ❚ no. 03

Building A Biotech: Industry Veteran Moroney Reflects

Market Access Roundtable: The Will, But Not The Way?

Lark’s Julia Hu On Virtual AI Nurses And Chronic Disease Management

THEINTERVIEW

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CONTENTS ❚invivo.pharm

aintelligence.informa.com

March 2019In Vivo

Pharma intelligence |

STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION-MAKERS

In VivoPharma intelligence |

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Innovations In Market Access: The Will, But Not The Way?WILLIAM LOONEY

In this In Vivo executive roundtable, an informal working group of biopharma leaders in market access reviews the current state of play with regulators, patients and payers. Contacts with the first two stakeholders are clear-eyed and surprisingly productive, but the payer remains the tie that grinds – an inscrutable partner of necessity in moving complex, costly innovations toward acceptance in the marketplace.

2 6

The Knowledge Within: An Interview With Merck KGaA’s R&D ChiefLUCIE ELLIS

Luciano Rossetti, head of global research and development at Merck KGaA, believes the mid-sized pharma is well on its way to becoming a global immuno-oncology specialist. He discusses in-house innovation, the company’s recent IO alliance with GSK and the next wave of success that is beginning to swell across the cancer drug development community.

3 0

IXICO Targets Go-To Status In Neuro Data Analytics SpaceASHLEY YEO

Neuroscience data specialist IXICO has broad ambitions to partner with pharmas large and small, helping them develop better-targeted clinical trials using imaging and digital biomarker data. A business review late last year by CEO Giulio Cerroni refined the company’s value proposition, while keeping the headline elements in place: scale the business and diversify within neuroscience.

3 4

Building A Biotech: Industry Veteran Moroney ReflectsJO SHORTHOUSE

Simon Moroney has led the German biotech MorphoSys since 1992. Having taken the decision to retire just as the firm is entering the next phase in its evolution, he explains to In Vivo why the time is right to step down.

2 2

ImmunoGen CEO: Solving Cancer’s Access Challenge With Data, Differentiation And A Big Dose Of BipartisanshipWILLIAM LOONEYImmunoGen CEO Mark Enyedy, a leading proponent of targeted ADC oncologics, explains how risk – and resilience – are both central to today’s challenging innovative landscape in cancer. Despite recent setbacks on the road to commercialization, science will continue to transform, bolstered by strong financing and revolutionary new data sources, validated by patient-centered outcomes – not forgetting that persistent human intangible called hope.

STRATEGIC INSIGHTS FOR LIFE SCIENCES DECISION-MAKERS

1 8

Virtual AI Nurses And The Future Of Chronic Disease ManagementDAVID LEE

David Lee, partner at Simon-Kucher & Partners, sits down for a fireside chat with serial entrepreneur Julia Hu to talk about virtual AI nurses and the future of chronic disease management. Hu founded Lark Health in 2011 with the goal of scaling personalized, digitally- driven health care to anyone in the world.

THE INTERVIEW ISSUE

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In VivoPharma intelligence | March 2019

At the close of the first quarter, following the re-porting by major biopharma and medtech firms of their full year results from 2018, In Vivo has spoken to various industry leaders about some of the key issues and developments affecting the life sciences sector. In this special interviews issue, In Vivo looks at artificial intelligence and virtual nursing, immuno-oncology advances and setbacks, as well as the evolving nature of value and cost for novel, breakthrough treatments.

Voices in this edition include that of Mathias Goy-en, GE Healthcare’s chief medical officer for Europe; ImmunoGen’s CEO Mark Enyedy, who talks about the drug developer’s recent setback in ovarian can-

cer, as well as the climate around oncology deal-making and R&D; Julia Hu, the founder of software company Lark Health, which is focused on virtual treatment management for chronic conditions and prevention of disease; Luciano Rossetti, head of global R&D at Merck KGaA, who spotlights the company’s novel, bifunc-tional fusion immuno-oncology assets; Simon Moroney, co-founder and CEO of Munich-based antibody technology company, MorphoSys, who is preparing to step away from the business after 27 years at the helm; and more.

Leading this special issue though, is a roundtable article, by William Looney, that focuses on the critical and opinion-dividing topic of market access and drug pricing. With the Boston Consulting Group (BCG) as convener, market ac-cess functional leads from 20 major R&D-based companies in the US, Europe and Japan discuss global-level challenges to drug access.

The group, which included among them market access heads from Novartis, Roche, Pfizer, Gilead Sciences and Boehringer-Ingelheim, answers some of the key questions around pricing, cost, benefit and value – as well as, technology and as-sessment approaches being developed. They share opinions on questions such as: • Are novel financing schemes, such as those being considered to support high

pricing for gene-based therapies, likely to gain traction, or is this still a theo-retical exercise?

• Do digital technologies and other advances in information processing and analytics offer new opportunities for market access procedures?

• And will market access survive as a strategic priority through the next decade?Last, but by no means least, In Vivo welcomes Harris Kaplan to its Editorial Advisory Board. Harris is managing director of the commercial strategy con-sultancy group Red Team Associates and CEO of Healogix.

❚ From The EditorDEPARTMENTS

AROUND THE INDUSTRY 4 GE Healthcare Sets Out Its

Software And AI Ambitions CATHERINE LONGWORTH

6 Paying for Pharmaceutical Value: The Problem Of A One-Size-Fits-All Definition ROGER LONGMAN

38 ON THE MOVERecent executive appointments in the life sciences industry REGINA PALESKI

42 DEAL-MAKINGDeals Shaping The Medical Industry, February 2019 THE STRATEGIC TRANSACTIONS TEAM

LUCIE ELLIS

❚ Patient-Specificity Meets Digital Ecosystems As Corin Acquires TKR Robotics Player Omni ASHLEY YEO

❚ Podcast: Medtech Pressure Points And Opportunities In 2019 ASHLEY YEO

❚ Device/Diagnostics Quarterly Dealmaking Statistics, Q4 2018 AMANDA MICKLUS AND MAUREEN RIORDAN

❚ Deals In Depth, January 2019 AMANDA MICKLUS

In Vivo: Always Online FirstRelevant and exclusive online-only content at your fingertips 24/7.

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All stock images in this publication courtesy of www.shutterstock.com unless otherwise stated. /invivo@invivo/invivo

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CONTENTS ❚invivo.pharm

aintelligence.informa.com“ The pathway to market access is inconsistent and unique

to the circumstances of each product. Despite the extensive

planning that accompanies a launch, the environment is

unpredictable,” says Christophe Segalini, head of global market

access and pricing at Gilead, during a roundtable discussion.

PAGE 10

❚ Up-Front❚ Up-Front SNAPSHOTS FROM MARCH’S CONTENT

Alzheimer’s

Huntington’s

Parkinson’s

MS

Schizophrenia

0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6Revenue (£m)

My idealistic dream is to provide anyone in the world

suffering from or at risk for a chronic condition

personal compassionate health care.

JULIA HUTALKS ABOUT LARK HEALTH’S AI NURSE TECHNOLOGY IN AN INTERVIEW WITH SIMON-KUCHER & PARTNERS' DAVID LEE.

PAGE 18

Every clinical trial poses a risk – that’s precisely why they are conducted …

We willingly took that risk.

MARK ENYEDYIMMUNOGEN CEO, TALKS ABOUT A RECENT SETBACK FOR THE COMPANY IN OVARIAN CANCER.

PAGE 22

“There was immediate alignment on

the philosophy and the principles of

how to develop this exciting novel

drug and bring it to patients.”

Luciano Rossetti

discusses Merck KGaA’s recent

oncology alliance with GSK. PAGE 26

IXICO’s Revenues By Disease Area, 2017-2018 PAGE 30

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❚ Around The Industry

GE Healthcare Sets Out Its Software And AI Ambitions Artificial intelligence (AI) was a hot topic at the recent annual European Congress of Radiology (ECR) and GE Healthcare was one of many industry partners that used the congress to showcase technology in the field.

The health care giant has made AI the centerpiece of its digital portfolio, last year launching Edison, an AI platform designed to connect data from millions of medical imaging devices. The integrated, digital platform can be used by clinicians with Edison applications and services, and by technology developers to combine diverse datasets from across modalities, vendors, health care networks and life sciences settings.

At ECR 2019, held in Vienna, GE Healthcare launched new applications built on Edison, including a CT scanner, X-Ray, MRI and ultrasound device that integrate AI tech with cloud connectivity and are designed to enable fast data processing.

Speaking to In Vivo at the congress, Mathias Goyen, GE Healthcare’s chief

medical officer, Europe, said AI was an opportunity for clinicians to make faster, more informed decisions that can improve patient outcomes. "We must embrace AI as a helping tool that will make our lives easier. We know it can get rid of the boring stuff and easy tasks. As a radiologist, I don’t want to see the normal cases, I want to see the cases where its most likely there is a tumor and I want AI to detect this for me and highlight out of a thousand images the 40 images where this diagnosis can be found," he said.

AI A GAME CHANGER FOR THE 'FOUR EYES PRINCIPLE'In countries where the 'four eyes principle' that two individuals approve some ac-tion before it can be taken, Goyen said AI could be the ultimate game changer. "In

Germany for example, every mammogram must be seen by two radiologists because the diagnosis is so important. Now, we are thinking, AI could be the second or first pair of eyes to evaluate the mammogram. So, the big question is, would it be enough to have me as a radiologist make the deci-sion, together with an AI algorithm?"

Although the medical and legal considerations of using AI in this way are still unclear and pose a level of risk, Goyen can foresee a time when patients could sue a hospital for not using AI. "It could be that in a couple of years, for certain indications, AI is the best way to go and patients could sue hospitals for not using the technology instead of the other way around. Everything right now is in flux, AI is developing and unfolding before our eyes and it’s an exciting time to be in health care."

However, while clinicians are still wary of AI and see it as a threat, Goyen insisted it will be a tremendous opportunity for the profession. "At the end of the day, care is about people. Radiologists do a lot more than just looking at cases, and for the foreseeable future, I can’t see an AI algorithm replacing an interventional radiologist or talking to patients. You don’t want to get your diagnosis from a computer, you want the human touch and to talk to a doctor. GE Healthcare’s theme is that AI frees up more time so a doctor in the future can do what they are trained to do – take care of the patient. So, we humanize or rehumanize healthcare by applying AI."

Last year, the company announced a major partnership with Roche Diagnostics to develop digital platforms for precision health in oncology and critical care. (Also see "GE And Roche Join Forces In First-Of-Its-Kind Tech Pact" - Medtech Insight, Jan-uary 8, 2018.) The oncology platform, will take in vivo data obtained directly from


AROUND THE INDUSTRY ❚invivo.pharm


the patient by radiological imaging and monitoring equipment and combine the results with in vitro data from laboratory tests to help clinicians form a diagnosis. The system will also integrate data from electronic medical records, medical best practices and research. Goyen said the partnership was ideal as both companies combined their respective expertise in imaging and in vitro diagnostics. Indeed, this marriage of specialties could be the future of the field, according to Goyen.

"I think in 10 years’ time there will not be a residency in radiology, but more like super diagnostics – including pathology and lab science. These specialties grow to-gether, in vivo and in vitro, so maybe there will be a specialty diagnostician role where everything is included to streamline the data and present it in a digestible format."

CODE OF ETHICS FOR AI?At present, AI technology is altering prac-tice at three levels for clinicians – first at the point of care, secondly at a depart-mental level to streamline workflow and reduce waiting times, and finally at a net-work level to streamline patient workflow. But while the potential of the technology is exciting, Goyen said there needs to be a conscious effort to implement a code of AI ethics and ensure it does not become uncontrollable. "In all our efforts in de-veloping AI algorithms, we must always keep in mind that AI doesn’t take over, so sometimes some good old-fashioned common sense is still needed,” he said.

"We need to ask is this really good for our patients or ourselves? It’s about artificial morality and ethics in AI."

GE Healthcare’s priorities in 2019 will be to form partnerships and elevate customer experience. "We need strong partners – whether that’s at the university level, private practice, industry partners or tech partners. We have valued partners working with us now and we need more – we cannot do it alone." And although the GE group recently announced the sale of its biopharma business to Danaher for $21.4bn, to help reduce debt burden, the health care division will continue to invest in R&D in the space. (Also see "GE Deals Biopharma Biz To Danaher For $21.4Bn; Planned Healthcare IPO Probably Won't Happen" - Medtech Insight, February 25, 2019.) "The entire contrast agent business that was part of GE’s Life Sciences business that we sold is now coming to GE Healthcare and we will make effort to develop more contrast agents for diagnosis," said Goyen.

"Of course, we are still a manufacturer of awesome equipment. But we are moving more and more towards being a software company and building a lot of things around our equipment." Whether build-in, pay-per-use models or cloud-based concept, Goyen says GE Healthcare is really transforming into a software company and embracing these new techniques.IV124236

CATHERINE LONGWORTH

“If AI is the best way

to go…patients could

sue hospitals for not

using the technology

instead of the other

way around.”

– Matthias Goyen

Chief Medical Officer,

GE Healthcare Europe

CitelinePharma intelligence |

Built by experts. Made for expertsAnalyze clinical trial intelligence your way with the next generation of Citeline.

To learn more visit:pharmaintelligence.informa.com/nextgeneration


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Paying for Pharmaceutical Value: The Problem Of A One-Size-Fits-All Definition

It is a world, at least the US corner of it, in which any common understanding of drug value is confused by opposing incentives – to opacity and transparency, to looking at benefit broadly or narrowly, long-term or short-term: value, in short, to whom?

Consider the evolution of three species within the pharmaceutical ecosystem:

1. the drug industry, where a blossoming of breakthrough technologies, and bil-lions from investors anxious to get in on the action, has created a flood of therapies for heretofore untreatable and sometimes virtually unknown diseases – at often very high prices;

2. industrialized purchasers and pur-chasing agents, transformed by massive consolidation and the inexorable push to risk-sharing economics, all trying to figure out how to drive efficiency and increased value in an environment riddled with con-flicting policy initiatives from the Federal and state governments;

3. patients, who are absorbing an ever-increasing share of the health care bill, either directly through cost sharing or subtracted from paychecks as higher premiums.

The industry has plenty of ways to define value. Thousands of academic and corporate health economists bus-ily grind out cost-effectiveness analyses. CMS has designated five “compendia” as guides for reimbursable value, despite bizarrely opaque decision-making behind the compendias’ choices. However, the best-known value definer is the Institute for Clinical and Economic Review (ICER), which, independent and not-for-profit, has done more than perhaps any other group to put drug value into the headlines.

ICER’s analyses have many supporters and many detractors. But in spite of a for-mally inclusive process – public meetings and votes with clinical, payer, and patient participants – ICER’s analyses, like virtu-ally all others, put a one-size-fits-all value snapshot on a diverse, dynamic market. Or maybe two sizes fit all – since ICER delivers

two assessments, one based on “value” and one on budget impact. But in either case, the analysis is based on an average.

In fairness, the task is not easy. For example: an anti-cholesterol PCSK9i drug is probably more valuable for a 50-year-old man with modestly high LDL-c and one previous heart attack than it is for a younger woman with perhaps even higher LDL but no previous cardiac event. He’s more likely to have a near-term heart at-tack than she is – something both he and the insurer who pays for him would like to avoid. Likewise, as more data comes out, about both the drug and the competitors, the value of the drug changes. Indeed, as the health care system evolves – say, to a longer coverage period for beneficiaries, to covering or not covering pre-existing conditions – the weight placed on each input to the value equation will change.

And there is a second problem: if value analyses are going to be used, like clinical trials, to define which drugs patients are going to get, then arguably they should be subject to at least similarly rigorous review – a process for defining the cer-tainty of conclusions. They are not – and given the cost of that review (for example, a whole FDA setup for cost-effectiveness), they are unlikely ever to be.

One solution is to admit the basic problem: no single valuation works. Instead, what’s required is a multi-dimensional value assessment tool, or more likely set of tools, that reflects the attributes of value important to different stakeholders and the different weight-ings they may put on those attributes. Its logic and calculations would have to be transparent. It would have to be con-tinually updated to match the changes in evidence. And it would require the willing participation of payers and patients (or pre-patient beneficiaries), who are now only half-heartedly involved (the latter two especially because they have no

control over the system which imposes a price on them).

The US economy is all about consumer choice. But choice, particularly in health care, is expensive – mitigating against the kind of volume purchasing which lowers costs. To help people decide what they need – not what they are told they may have at a specific price – requires a dif-ferent, customizable approach to value analysis.

THE ICER CHALLENGEICER has changed the conversation around value. It has inspired reams of discussion among policymakers and academics. Its analyses are the basis for a new formulary from CVS Health. On a few occasions phar-maceutical companies have based their prices around ICER recommendations – as Regeneron did with Dupixent (dupilumab), the first new therapy for atopic dermatitis.

However, ICER has not provided a com-plete solution, for a variety of reasons. The first has been mentioned: many pharma companies just do not believe that its methods are scientifically rigorous.

But there are three other related problems:

• Their analyses present a drug at a mo-ment in time, often before any actual real-world evidence is in. Yet decision-makers are in fact using the analyses to justify real-world reimbursement decisions.

• The analyses reflect a specific view of value that shines a brighter light on cer-tain attributes and shades others.

• Finally, payers follow ICER primarily when it serves their purposes.

On the first point, most of ICER’s re-ports analyze drugs shortly before or after FDA approval. That makes sense: people want to get an idea of a drug’s value when it first appears on the market. But without real-world evidence, it is difficult to justify yes/no coverage decisions. And yet that is exactly what has been done by the new




CVS formulary, which rejects any drug with an ICER-derived QALY (a statistical determination of value: quality adjusted life year) of greater than $100,000.

Second, ICER analyses reflect specific choices made by the reviewers – and thus a kind of “average” value (with a societal glaze). Take the three new anti-CGRP medicines for migraine prevention – the first new drugs for a condition that de-stroys quality of life for millions of people. ICER’s report, as is their custom, focuses on a societal view of the economics – ul-timately to a notion of affordability (will the use of the treatment increase drug expense by more than a set inflation amount). But there are two problems with migraine economics. In aggregate, they are largely hidden and in particular are different for different people. In an admittedly relatively old article in Value Health, Elisabeth Hazard and colleagues estimated that as much as 70% of the economic costs of the disease are indirect or related to productivity – in short, that there’s no obvious payer writing a check for an otherwise preventable expense (as there would be, for example, with a drug that prevented a hospitalization). One can define productivity costs – coming up with an average cost for presenteeism (at work but unproductive because of the migraine) and absenteeism (missing work entirely) – but they do not make it prominently into ICER’s report. And certainly it is not easy for an employer to figure this out.

Still, estimates of the impact are not unavailable; the costs they reveal are hardly negligible; and excluding them dramatically changes the value-for-money equation. For example, Richard Lipton of the Albert Einstein College of Medicine and colleagues estimate that excluding productivity costs cuts the value-based price of Novartis’s Aimovig (erenumab) by 16%. Likewise, in their study of Aimovig’s cost-effectiveness, Michael Sussman of Boston Health Economics and a group of colleagues conclude that the drug used for preventing episodic migraine likely offers less value for money unless the calcula-tion includes productivity costs.

Meanwhile, the costs are different for different people and different employers. A migraine drug that keeps a lawyer at the office, generating hourly fees, could be worth far more to her payer-employer

than it would be to the Medicare plan for keeping her mother out of bed – though in fact the drug might be worth the same to both women, crippled by pain.

And finally, ICER’s reviews – the clos-est the US has come to independent drug valuation – have, at best, baby teeth. Pay-ers tend to follow ICER recommendations only when they accord with their economic incentives. And because payers partici-pate in ICER’s reviews at best tepidly, they have no real commitment to them. They certainly do not want to give up any influence they have to a third-party pricing agent – particularly since payers, patients and pharmaceutical companies will rarely see eye-to-eye on payment terms.

STEP ONE TO A SOLUTIONA first step to solving the challenges of defining value for multiple stakehold-ers, and getting them to believe in and use it, is to admit the problem. Second, we need to fund and create a flexible, multi-dimensional value system, or set of systems (often called multi-criteria deci-sion analysis, or MCDA, tools) that can be modified for the intended stakeholder and whose assessments are updated regu-larly. Such tools exist, albeit in somewhat simplified form – for example, the Drug Abacus from Memorial Sloan Kettering and Real Endpoints, and the RxScorecard, also from Real Endpoints. The University of Colorado has just created an entire pro-gram around the idea, its Pharmaceutical Value (PValue) initiative.

What could improved valuation tools consider? Besides the basic safety, effi-cacy, price and cost-offset elements, they should include metrics around strength of evidence (for example, whether a trial was conducted against an active comparator or placebo), patient-centered evidence (in-cluding patient-reported outcomes), qual-ity of life, productivity and out-of-pocket costs for transportation and accommoda-tion, not to mention the economic impact on caregivers.

Darius Lakdawalla at the Schaeffer Center for Health Policy and Economics at the University of Southern California and a group of colleagues go further, argu-ing for including the value, among other elements, of reducing uncertainty, fear of contagion, the cost of physical and finan-cial risk protection, severity of disease and

BY THE NUMBERS

$50bnthe annual spend on cancer treatments in the US

80%of which is used on fewer than 10,000 patients

45the number of ongoing PD-1 and PD-L1 antibody development programs

$15bnin comparision, is the annual US spend on drugs for cardiovascular disease


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the increase in hope and scientific spill-overs. Payers – PBMs, national insurers, regional payers, and employer coalitions – would have to be an integral part of such a broader assessment process: they need to have bought in to the evidence presented, then use the tools to transparently justify their decision-making.

The tool(s) would allow each of these value elements to be weighted differ-ently by different stakeholders – but the weighting itself would be visible and thus so would be the underlying assumptions of that particular stakeholder about the value of each metric.

As these transparent tools become part of the assessment process, there should be two simultaneous changes in the way evidence is gathered and evaluated. First, payers would be increasingly pressured to use the systems, transparently justify-ing their choices for preferring one drug over another or their decisions to restrict their use. If the tools are available, and if payers have been part of the process of developing them, beneficiaries and employers (and governments, for that matter) could reasonably demand to see their evaluations.

Second, pharmaceutical companies would have to adjust their development programs to the metrics of the value-assessment system: any arguments for a quality-of-life advantage, for example, would have to be justified with trial or real-world evidence. If they argue for straightforward access, they would likely have to show superiority not to placebo but to standard of care. In the beginning, companies might have to run such trials after approval but the FDA could begin to work with value-assessment systems early on, as part of the initial approval process and to weigh in on the inclusion, measurement and possible integration of the novel elements of value.

A more customizable and transparent value assessment system will by no means

solve all problems when it comes to drug value. The fact is certain government regu-lations make value assessment irrelevant – in cancer for example. CMS in effect mandates coverage of oncology drugs – just so long as a drug’s use makes it into one of the five privately-owned compendia (and by and large commercial plans follow suit). The rule entrenches opacity: there is virtually nothing from the compendia or-ganizations themselves on how the drugs are chosen. And nothing about potential conflicts of interest – such as whether fi-nancial incentives influence the compendia in their choices of which drugs to include.

The result, spending on cancer drugs has ballooned. In the US spending has doubled in the last five years, according to IQVIA, to $50bn – significantly more than the $15bn spent on drugs for the higher-mortality problem of cardiovascu-lar disease. All this oncology spending is very tightly focused – 80% of the total, says IQVIA, on fewer than 10,000 patients. Research dollars have followed. According to Cello Health BioConsulting (formerly Defined Health), oncologics make up by far the biggest share of the industry pipeline – roughly eight times the share of cardiovasculars. Many of these oncology programs are barely differentiated from each other (for example, the 45 PD-1 and PD-L1 antibodies Cello has identified in development programs). But all of these oncologics – if the current situation per-sists and if granted approval – are likely to be generously reimbursed. There are consequences to the disproportionate oncology spend: to compensate for spending they cannot control, pharmacy directors clamp down on spending they can, such as spending on new therapies for COPD and heart disease, diseases no less deadly than cancer.

A second problem: while a flexible value assessment system can get us closer to an agreed-upon cost for any individual user, buyers and sellers in the largely

for-profit US reimbursement system will still disagree on value, around general or very specific populations. Patients will still want access to a drug that has some, but not yet all, the data required for regular reimbursement. Payers will not want to pay for this drug – expensive for them and an incentive for the manufacturer not to complete the studies in the first place (the FDA found this out in spades when it approved drugs with the recommendation that manufacturers do additional studies – which of course manufacturers by and large never did).

That is why, along with more flexible value assessment tools, we need the flexibility – now often prevented by payer infrastructure, habit and legal constraints – to create contracts between buyers and sellers that pay for value delivered, not just promised. Value-based contracts are often the necessary next step for defining value in the real world.

The first task is for all players to reach a common understanding that reducing value to a single analysis, let alone a single number, cannot reflect the reality of a diverse, constantly changing, scien-tifically uncertain health care world. It is equally true that the alternative we are arguing for – a toolkit for defining value differently for different stakeholders – will not solve all our problems with drug purchasing. It is absurd to think that any quantitative evaluation will perfectly resolve disputes in a world where deci-sions are often deeply personal. But combining a set of tailored, regularly updated value assessments with risk-sharing contracts that allows us to deal with evidentiary uncertainty by paying for what works will get us closer to a health care system that provides the choice Americans demand aligned to the value the choices provide. IV124228

ROGER LONGMAN

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With the Boston Consulting Group (BCG) as convener, market ac-cess functional leads from 20 major R&D-based companies in the US, Europe and Japan have joined to offer a forum for discussion of global-level challenges to drug access.

Over the past several years, the group has initiated specific proj-ects covering alternative drug financing options in Europe, a global policy framework for value assessment, and key functional competencies and performance metrics in market access. (Also see “Access To Medicines Innovation: Seven Points To A Sustainable System” - In Vivo, August 2017.)

So what? Payer calculations in valuing new medicines currently represent a 20th cen-tury approach to leading-edge, 21st century science. Patient access depends on payers too getting out front to work with industry and test what is possible in innovative pric-ing and reimbursement (P&R). The basic vanilla volume discount is behind the times.

In Vivo: Market access has established its importance as a key function in bio-pharma. But how it relates to an increasingly disruptive external environment remains a work in progress. To provide practical context to today’s discussion, what’s the one question that comes up most frequently in your day-to-day in-teractions on market access strategy with colleagues in the business or from stakeholders outside the company?

Martin Walter, VP, head global market access, Boehringer Ingelheim GMBH: The question that comes to me most frequently is how to address changes and disruptions in the market environment, such as the vertical integration of payers and pharmacy benefit managers (PBMs) in the US, while finding novel ways to demonstrate value

Innovations In Market Access: The Will, But Not The Way?

In this In Vivo executive roundtable, an informal working group of biopharma leaders in market access reviews the current state of play with regulators, patients and payers. Contacts with the first two stakeholders are clear-eyed and surprisingly productive, but the payer remains the tie that grinds – an inscrutable partner of necessity in moving complex, costly innovations toward acceptance in the marketplace.

BY WILLIAM LOONEY

Company participants identified six key challenges they encounter on a daily basis: changes in market dynamics; the impact of digital technology on evidence generation; balancing access against the imperative for strong price performance; executing around a matrixed cross-functional approach to the market access function; anticipating payer strategy and pain points; and the politics of building global access across vastly different geographies and health systems.

Investors see current industry messaging on value as esoteric and incoherent - market access needs a simpler narrative focused on the patient.

Transparency is the most formidable driver of change in pharma. Sunlight is the ultimate disinfectant.


MARKET ACCESS ❚invivo.pharm


to payers so that patients can access our products. Another is how digital technologies will impact evidence generation and advance our value proposition. Facing up to the challenge from online sellers like Amazon.com entering health care and improv-ing the customer experience is relevant to us as well. Combined, these trends raise larger strategic questions about changing our approach to developing and commercializing products and services that fight disease and advance health for patients. It is my task to help address and resolve those questions.

Peter Vanovertveld, senior VP, head global pricing and market access, Vifor Pharma Group: As a relatively small player in biopharma, Vifor Pharma is seeking to better access the patient population while improving our price performance. How to achieve that goal is the question I face every day. We want to transition from a singular focus on maximizing prices to a more integrated approach, one where market access is part of a broad customer-focused plan involving regular productive contact with patients, providers and policy makers. To lever-age our limited resources, we have adopted a cross-functional matrix structure on market access. We believe this is essential to compete with the big pharma leaders.

Sachin Kamal-Bahl, health services researcher and former VP and head, center for health systems innovation and lead-ership, Pfizer Inc.: I have a unique position, one where I can work on reforms at a very interesting time in the evolution of the health care ecosystem. As a thought leader in this space, and having just left a senior policy and practice role at Pfizer, I work with an increasing range of stakeholders on new options in financing the cost of novel medical treatments. I am also considering different ways value should be defined in the context of the major shifts taking place in the structure of health systems – that the two are interconnected is the premise by which I approach this important issue. Our internal colleagues in the business want innovative, forward-looking guidance on access solutions that help the pa-tients most likely to benefit from our medicines. My current efforts are largely aimed at working toward these solutions.

Jens Grueger, head, global access, Roche: Our global mis-sion at Roche transcends the notion of market access – we are all about patient access. Every outcome we project for our products is geared to increasing patient access first. In fact, one of the key questions I work on with colleagues at Roche is identifying the hurdles that restrict patient access to our medicines and to ad-dress them proactively with strategies to address affordability, demonstrate value and build support for medicines innovation at the societal level. The questions I receive most frequently are the future of the US pricing blueprint; the trends in health technology assessment in Europe (particularly the consequences of a more harmonized effectiveness review versus continued duplication among 27 separate processes, which obscures the overall posi-tive impact of our outcomes), and how to pursue access to our innovations globally, given the gaps in infrastructure that exist in Africa and other developing regions.

Christophe Segalini, head, global market and pricing, Gil-ead Sciences Inc.: The top-of-mind issue for my group is aligning perceptions of value in our contacts with an increasing number of stakeholders, in business and across geographies. Access to the patient is a never-ending quest. Just when you think you are about to seize the opportunity to bring in a new drug to fill an unmet medical need, the rules of engagement change, often in such way as to raise the bar on the value you must demonstrate to payers. This, combined with the fact that the P&R vetting process is not always transparent and creates uncertainty, adds to the risks inherent in a long and expensive pathway to market. Internally, we spend a lot of time persuading our colleagues in the business to see the market access function as an enterprise-wide responsibility. It’s a mindset – a shared cultural attribute – that cannot be delegated or deferred to others.

Indranil Bagchi, senior VP, global value and access, Novartis Oncology: My role focuses on oncology, where gen-erating data that establishes progression-free as well as overall survival, improving patient-reported outcomes and advancing the standard of care is critical to meeting the requirements of

❚ MARTIN WALTERBoehringer-Ingelheim

❚ SACHIN KAMAL-BAHLPfizer

❚ PETER VANOVERTVELDVifor Pharma

❚ JENS GRUEGERRoche

❚ SRIKANT VAIDYANATHAN

Boston Consulting Group

❚ LES FUNTLEYDERApplied Therapeutics

❚ CHRISTOPHE SEGALINIGilead Sciences

❚ INDRANIL BAGCHINovartis

❚ JESSICA MERRILLScrip

❚ WILLIAM LOONEYIn Vivo


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regulators and payers. Developing a clinical trial protocol that will anticipate their evidentiary needs, often years in advance of a decision on approval, is one of our biggest challenges. We have also helped to devise new payment models appropriate to the novel therapies Novartis is bringing to market. An additional item on our agenda is positioning oncology around the commit-ment our CEO has made to global access for all our medicines. How to make this work for complex, high-cost cancer therapies in resource-constrained settings is the kind of question that keeps us up at night.

Les Funtleyder, chief financial officer, Applied Thera-peutics Inc.: My work focuses on preparing the company for potential launch and approval of a number of drugs; each has a distinct therapeutic profile and thus variable implications for market access. Several address diabetic complications, where we must develop a value proposition centered on the fact that patients will likely have to take the drug as a treatment, not a cure, and most likely for the remainder of their life, in addition to other diabetes treatments. In my opinion, our most exciting asset is an orphan drug geared for pediatric use, and where the outcome will be demonstrable to payers very early on. As a company that is currently private, we intend to consider ethical aspects when determining a price. How to do this in a way that also supplies a return on the investment is the question that preoccupies us right now.

Travails Of A Decade

What has changed in the way you and your companies ap-proach market access? What external environmental factors require you to perform differently in your organization today, compared to when you first entered this space?

Grueger: In the past, market access was primarily a technical exercise, focused on health economics and policy, pricing and reimbursement. Today, we operate within a broader framework: securing patient access to new medicines. It’s a more strategic orientation, combining scientific expertise with stakeholder outreach and a sensitivity to competitive commercial realities. The approach is integrative and expansive as opposed to being narrow and academic.

Walter: A decade ago our efforts centered almost entirely on securing regulatory marketing authorization, which in most cas-es guaranteed entry to the market and access for patients. Today, there is no such assurance, requiring us to devote substantial resources to understanding what payers want from a product and from us, which in turn demands sophisticated evidence documenting how it will create health and economic value for the patient and the health system. There is a strong budgeting aspect to access that was significantly less pronounced before.

Bagchi: In the 1990s we were an “enabling” function. Today, market access has been institutionally transformed, with a key role in C-suite strategy and clinical candidate development. There is a clear awareness in companies today that all our ef-forts in developing and commercializing a medicine will not go anywhere unless, payers, policymakers and other stakeholders make our products accessible to patients who need them the most. This is why some of us here today created the Market

Access Roundtable with the Boston Consulting Group (BCG) to raise the profile of market access as a vital stand-alone activity in biopharma, and to educate our colleagues in the companies to recognize and accept the diverse capabilities that we bring to the table.

MARKET ACCESS: Meet Market Launch

It is well known that many new drug launches today fail to meet growth expectations. Are market access people expect-ed to take the lead in fixing problems in the launch cycle?

Vanovertveld: It depends. Many of the challenges in launch-ing a product today are systemic and cannot be attributed to a single set of actions. Reimbursement rules are extraordinarily complex and are revised frequently. It’s now common practice for my company, as well as others, to start devising a specific compound launch strategy early on. By the time you get to Phase III, there will be a carefully drafted blueprint designed to anticipate provider and patient behavior, attract new scrips and deflect the rearguard actions of competitors seeking to retain market share. There is no doubt that my group is part of the solution when a new product’s market performance falls below expectations.

Segalini: The pathway to market access is inconsistent and unique to the circumstances of each product. Despite the exten-sive planning that accompanies a launch, the environment is unpredictable and thus hard to anticipate. We now have a seat at the decision-making table with the commercial and clinical development teams, which gives us the opportunity to use our networks and extend the perspective necessary to cope with uncertainty on take-up of a new drug. However, it will take time for the market access function to achieve perfect vision in aligning to a new world of payers. This is partly because payers lack such vision themselves.

Grueger: Regarding the launch cycle, we succeed when we direct internal priorities toward access for the patient – the “market” is an abstract if no patients are getting the drug. Up-take of the product is what counts. Here, there are a growing number of barriers, ranging from fiscal and budget issues around affordability to gaps in delivery infrastructure. We can have in place an extensive distribution network, service “hubs” to help patients comply with treatment, and companion diagnostics to ensure patients are getting the right drug, at the right time, for the right condition – and still we cannot be sure every patient who can benefit has access. What we can do is convince the organization to focus on the only metric that matters: how many real patients are benefiting from our product today? The whole organization must come together to make this happen, with the market access team as the facilitator.

Kamal-Bahl: To keep launch plans on track, companies need to tighten the link between access and quality. An impediment to quality is the bureaucracy involved in insurers allowing a patient on therapy – what’s increasingly commonplace is a 20-plus page application, where the responsibility is most often placed on overworked physicians because the patient is incapable of making their own case. It’s a big drag on access. It can be an impediment causing new product launches to falter




unless there is irrefutable evidence that the product represents a big improvement against current standard of care.

FUNDING PATHWAYS: New Ways To Pay

Many biopharma companies are evaluating alternative financing arrangements like annuities or debt financing to support the high pricing for new gene-based therapies. Are any such novel financing schemes likely to gain traction, or is it still a theoretical exercise?

Kamal-Bahl: Premium pricing for products at launch combined with invoicing for the full net cost per patient upfront is clearly an issue for payers. The message that comes through loud and clear is the products are too expensive for the value they provide. And if the industry is replacing an incremental benefit from that regular 30-day supply of medicine with a quick, one-shot cure delivered by gene therapy, then criticism of the higher expense will grow more intense – ultimately, it’s unsustainable. If we don’t address such price escalation it could be read as a great disservice to the payer community, to providers and patients, and to the health system itself. Clearly, payers are now will-ing to experiment as more gene or cell-based therapies come on stream. The states of Louisiana and Oklahoma were last year granted waivers by the federal Centers for Medicare and Medicaid Services (CMS) to pilot prospective payment tools for these high-cost drugs. We will see more examples as the health care system grapples with these game-changing treatments in the next few years.

Bagchi: Novartis has introduced a novel payment model for Kymriah, our lead CAR-T cell therapy. For the pediatric and young adult B-cell acute lymphoblastic leukemia indication in the US, we offer a voluntary outcomes-based contract to certified treatment centers that provide Kymriah. If a treatment center opts in, the contract only allows for payment when patients re-spond to the drug. We now have extended various forms of this value-based model to other countries where Kymriah is avail-able and where we find payers and reimbursement authorities are interested in such an approach.

Segalini: The resources industry is putting on the table to support patient access are significant. It ought to be recognized, as we strive to meet the requirements of payers working within a much narrower budget window. It’s already evident the burden of proof will be raised higher in delivering value to patients. The surprising thing to me is that the health system – including payers – does not match the industry in coming up with new ideas to pay for our medicines. We tend to be the source of new thinking maybe 80% of the time. We present our calculations and suggest a few fresh options, and the response is too often “OK, let’s just find a classic volume-based discount agreement.” This creativity deficit is widely ignored yet it has implications for the future stability of the health system. If decision-makers lack the vision to change and just follow the familiar course of reducing their drug procurement overhead at 3% each year, then don’t expect anything further than that – certainly not more innova-tion for the patient. What is required is action by all parties in the biopharma business to break the mold and experiment with pilot programs that help move access and reimbursement to a

better place. To continue the progress of science over the past 20 years into the next decade, innovation in the P&R system is necessary too. Health systems must combat the uncertainty that comes from arbitrary cost containment goals imposed without consultation and for objectives that are non-transparent and unexplained. How do we calculate the long-term damage to the incentive to innovate as biopharma companies struggle on how react to payer policies they can’t plan for?

Walter: Another systemic problem that complicates medicines access is the drug payment models we have today ignore prob-lems that originate elsewhere in the health sector. My company is committed to demonstrating the broader value of our products, and to show payers that drugs can be cost-effective against other health interventions like hospital care. At present, gene therapy in isolation appears prohibitively costly, but with time those therapies will create ample rewards for patients and society in curing or preventing illness, disability or premature death. With the increasing vertical integration in the US, perhaps we will see bigger players in the health system embrace this broader perspective on the value of drugs. But the financial incentives to facilitate this change currently do not exist.

Envisioning Value

Can we foresee the various parts of the health system co-alescing around some basic methodological consensus on how to calculate or measure value? Is the quality adjusted life year (QALY) a way to re-position biopharma away from its current isolated state in a health system marked by per-vasive silo thinking?

Grueger: The QALY is a well-established methodology but ad-dresses a very small component of value, focused on the dura-tion and quality of functional life. It’s a lot like the Dow Jones stock index, in that it provides some basic understanding of what is meant by value but still leaves a lot out of the picture. QALY is often applied under a “willingness to pay” threshold

“ The surprising thing to me is that the health system – including payers – does not match the industry in coming up with new ideas to pay for our medicines. We tend to be the source of new thinking maybe 80% of the time. This creativity deficit is widely ignored yet it has implications for the future stability of the health system”

– Christophe Segalini


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for assessing value, usually in concert with fixed budgetary caps on drug spending. This interpretation of the QALY is endorsed in the UK, Australia and Canada. In the US, the Institute for Clinical and Economic Review (ICER), a non-profit NGO that conducts cost-effectiveness evaluations on drugs, uses QALY but incorporates additional measurements based on the perceived clinical experiences of different groups of patients. Finally, QALY can be misused in comparing a novel gene therapy with a generic that has been on the market for decades, with the price of the latter as the benchmark. Nor should it serve as a therapy straight jacket, where an Alzheimer’s treatment is evaluated solely on a theoretical patient experience, taking no account of the disease’s broader family or societal impact. You get an entirely different measure of value when you include this latter element in a QALY calculation. This explains why it’s difficult for biopharma companies to endorse QALY as the basis in de-termining a drug’s value.

Segalini: Bear in mind that health economics as a discipline applied to medicine is rooted in research developed more than two decades ago, when the possibilities for a secure life free of a disabling condition were not as prevalent as today. Yet it makes an enormous difference if a medicine gives 20 years of life back to someone who in a previous generation would have had no such option.

Walter: Finding the ultimate measure of value to satisfy everyone is difficult, if not impossible. The right course is to identify and then build a consensus on the factors that help define value around the perspective of the individual patient, their condition and course of treatment. With such a framework you can openly discuss which value factors will be considered by a certain stakeholder and which ones will not. Its critical all the key stakeholders in health care engage in this discussion, transparently.

Kamal-Bahl: Steve Pearson, the founder and president of ICER, agrees about the need to elevate the debate on how to measure pharmaceutical value. Despite that, ICER’s approach to measurement is constricted and not very transparent. I’ve looked at their model – and it’s hard to determine what underpins their assumptions, how to import the methodology to the product, and then replicate the numbers they come up with. The effort to incorporate a patient perspective in the evaluations has a pro forma, “check the box” aspect that only adds to the uncertainty. Another institutional player in this space is the Innovation and Value Initiative (IVI), which is looking at the medicines value question from a different angle. It has developed a measure-

ment model that, while following well-established economic principles, introduces criteria focused not only on the clinical benefit to patients but on the broader impacts on the family, care-givers, employers and society as well. The model is more flexible than QALY. Most important, it is fully transparent – the software, the assumptions, the mathematics, all the inputs to the model are out there for people to look at on the IVI website. IVI lacks the prominence of ICER, with its record of more than 20 detailed evaluative reports on big ticket therapies, but their model is worth examining. We believe it is in the industry’s best interest to have a diversity of options to work with on the value front.

Bagchi: Numerical calculations and thresholds geared to es-tablishing value within a single identifiable range are here – and they are not going away. As we are all aware, there are multiple different value frameworks available now to specifically address value assessments within oncology, including the ASCO, ESMO and NCCN frameworks. The proliferation of these highlight the current lack of consensus among stakeholders on how value assessments should be done.

Grueger: Economics and politics need to be clear in their incentives to industry when it comes to investing in a cure in-stead of a chronic care drug that alleviates symptoms or keeps the condition stable – the cure versus control dilemma. Under the current incentive system, the potential ROI from a cure is difficult to assess because affordability remains an opaque concept for stakeholders, with no clear pathway to consensus. And many payers, particularly commercial insurers here in the US, will never derive the reduction in liability exposure from the extended years of disease-free life that accompanies a cure. That’s because their numbers on covered lives fluctuate on a yearly basis – people come and go. We believe that cure is better than chronic treatment, but at the moment payers do not seem to be willing to reward the patient and recognize the societal benefit that a cure delivers, to the same extent that they do for chronic treatment.

THE NEW TECH: Impact on Market Access

Do digital technologies and other advances in information processing and analytics offer new opportunities to em-power your work on market access?

Kamal-Bahl: Artificial intelligence and other emerging technol-ogy tools show promise in making clinical trials more relevant to the requirements of regulators and improving the efficiency of trial recruitment and protocol design. This is also opening the door to acceptance of real-world evidence as a part of the regis-tration dossier. This trend is critical in improving on our basic value proposition beyond what we can furnish in the framework of the traditional randomized clinical trial.

Grueger: We need more regulatory guidance throughout the spectrum of evidence generation. Flexibility on the type of evidence we can provide in areas of high unmet medical need is important – there are examples like spinal muscular atrophy where you don’t need to run a control trial for the first time when data shows infants sitting up unaided after the administration of an investigational candidate drug. In such cases, speed to

Cure is better than chronic treatment, but payers do not seem to be willing to reward the patient and recognize the societal benefit that a cure delivers.




market – getting patients with no alternative options treated – is abetted when different strands of evidence are incorporated. We in market access roles should encourage this trend, extend-ing the reach of acceptable data into the real world without, of course, impinging on the integrity of the RCT gold standard.

Segalini: Data technology gives market access the possibility to shape decisions in three distinct areas: value communication, evidence generation and transaction confirmation and transpar-ency. In the latter case, the Netherlands and Switzerland are pursuing projects with the industry and providers using the blockchain to improve the safety and reliability of cash flow activity. Digital analytics are also being applied to assess disease states and monitor compliance, particularly for conditions like hemophilia and schizophrenia, with difficult to treat patient populations. It adds more to our value armamentarium, being available in real time for evaluation by the provider, pharmacist and other stakeholders. It creates a broader constituency of support for the treatment.

Bagchi: Care coordination through digital analytics is another big boost to market access. Technology that raises the efficiency of a health intervention will underscore what medicines do to reduce costs in other parts of the system. There is so much waste and low value activity in health care today. If data helps reveal this and leads to higher productivity gains elsewhere, it will free up more dollars for investment in the areas written into our professional DNA, like prevention, disease management and quality of life.

REGULATORS: The Search for Stasis

What is the current state of the relationship between the R&D industry and the major regulatory bodies like the FDA and EMA. Are initiatives like the EMA’s adaptive pathway pilots helping to make a better value case for the novel – and expensive – therapies that companies are bringing forward today?

Bagchi: In principle, much progress is being achieved through these programs. Whether it succeeds at the base line level is still a question, given the persistent challenge we have with oncology drugs in harvesting the hard-to-procure survival data regulators want as the condition for marketing approval and reimburse-ment. Even when companies obtain regulatory approval, there are requests for additional data for which they need access to ap-propriate patients. And finding these patients – the right patients – is hard. But the agencies are very willing to work with us to find common ground. They are aware that as the science of drug dis-covery moves into the complex specialty and gene therapy space, regulatory science has to change too. Those long and large Phase III trials for the new, precisely targeted therapies are increasingly difficult to pull off. Data requirements will simply have to evolve.

Kamal-Bahl: The precedents are being set in the context of progress – it’s a positive for the industry. A medium seems to have been established where you can conduct a small trial around a cohort of qualified patients, which does take time to arrange, and then follow that with an extended look at the full patient population further along, after a provisional acceptance.

Grueger: The European regulatory context involves a separa-

tion between evidence assessment and the ultimate agreement to reimburse. But I see an opportunity in the discussion of a harmonized European-level evidence review, combining a clini-cal scientific and relative effectiveness assessment. It a major political issue right now, particularly as a replacement for the country-specific process. We believe there is a case for change, given the complex new technologies coming to market: few countries in Europe have the resources and capabilities neces-sary to assess these.

PAYING FOR INNOVATION: A Transatlantic Free Lunch?

Europe also continues to experiment in different approach-es to P&R. Tendering and bulk procurement of drugs linked to volume purchasing appears to be an emerging theme.

Vanovertveld: Some countries are indeed experimenting in this area. The concept itself is not a red flag, and companies involved in the supply of goods to public institutions have a social obliga-tion to contribute to procurement. What is still not clear is how these systems will actually operate – the terms of engagement raise many questions. There is always the prospect that these systems will simply lead to a commoditization of the market.

Funtleyder: Here in the US, the Trump Administration has proposed an International Price Index (IPI) for selected high-cost drugs administered in the clinic and reimbursed under the Medicare Part B program. It is basically a framework for a reference price structure where prices will be pegged against those in several European countries, such as the Czech Repub-lic. If the price index is put in place, any tendering and bulk procurement scheme in Europe could lead to significantly lower prices for index-eligible medicines in the US, particularly if the concept is permanently embedded by a new, more progressive Administration after 2020.

Many of you here today represent companies based in Europe. Do you have a view on the current moves by the US Trump Administration to manage drug prices, reduce patient out of pocket costs and persuade your governments to bear a larger share of the global cost of R&D through increased incentives to innovate?

Grueger: European governments have less credibility today in discussions on rewarding innovation. They argue that drug makers are still making profits. We have to remind them that it is not sustainable to simply wait until a new innovation is approved in the US and then slowly pass it on to the European patient, years later and usually at a much lower price. Europe is completely silent on the fundamental question: what is the appropriate contribution of this region of advanced industrial countries to global health care innovation? Everyone knows the contribution of the US market to global biopharma innovation is disproportionately high. It follows that the US is entitled to consider how – or whether – it should embrace price regula-tion of drugs. But the implications of doing so can be counter-productive. At the ISPOR annual conference in Barcelona last November, a well-known US economist made what to me is an interesting observation: if the US decides to reference its domes-tic prices to prices in a European country, the consequence will


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be less access to medicines in Europe. This is turn will lead to more pressure to keep prices high in the US, to compensate for industry revenues foregone in Europe. The point is governments forget that we are a global industry. Companies will always act rationally to accommodate changes in one market with recipro-cal actions in another. The result is not always what government policy-makers expect.

Segalini: Europeans discount the ancillary benefits from supporting innovation. It’s not just big pharma that gains but vendors and CROs and the academic and research institutions that seed basic discoveries in a rich diversity of fields. The re-wards do not fall exclusively to us.

Kamal-Bahl: Governments like quick fixes, which sometimes don’t turn out in the manner intended. It’s important for industry to emphasize a long-term view, and to move the conversation back to the relationship between value and affordability. Getting the balance right requires more recognition of the contributions made by innovation. It’s a complex problem with no easy answer, especially because solving it is going to take time.

Grueger: More value messaging in Europe will not, in my view, shift the debate in favor of innovation. It’s still fundamental to ask directly what governments are willing to pay for. If they won’t pay for an innovation they should not be entitled to get it a steep discount, compared to the US.

Bagchi: Differential pricing between markets based on will-ingness and ability to pay maximizes the consumer surplus. However, the ability to price medicines differentially continues to be a challenge due to multiple cross-border phenomena such as reference pricing and joint procurement. In the end, mecha-nisms need to be in place for the industry to allow for differential pricing, leading to as broad access as possible for our medicines while at the same time ensuring continued reward for innovation in what is primarily an intellectual property-based industry.

Segalini: Likewise, we need to explain why companies are reluctant to launch new products across geographies. The proactive use of reference-based pricing in Europe has changed the revenue calculation entirely – fifteen years ago, we could take a conditional bet on profit expectations and move forward with multiple launches of the same product. Today, country “A“ will automatically reference country “B” and so on, resulting in a race toward the lowest price in Europe, minus an extra 10%. It’s a vicious circle with no exit. Can it be a surprise that certain countries don’t get access anymore?

Walter: An underlying theme that complicates dialogue between the industry and payers is that concerns about afford-ability tend to bias the value discussion. If budget are tight, the value and evidence base for the product will be challenged, even

if it is highly innovative from a medical and patient perspective. It is necessary to acknowledge these challenges for payers, to be very open about it and find ways to collaborate. We can’t push the problem away – it’s got to be a straight conversation with payers and policy makers, covering all sides.

Funtleyder: The public – the patient – has an easy grasp of the notion of affordability. Politicians respond to that. On value, the industry tends to get esoteric, even incoherent, with a vocabulary centered on things like QALY on which consumers and policy makers are not well versed. As an investor, I see the market access function as necessarily being tasked with com-municating value in a more accessible way. It’s long overdue.

Venovertveld: Smaller European countries such as Denmark are very explicit in funding system-wide solutions focusing on value for patients and the payer. It welcomes initiatives from pharma, diagnostics and device companies to show how their in-terventions support home care for patients with chronic disease, in particular where such care is cheaper than institutionalization while increasing clinical outcomes or quality of life.

New Influencers On Market Access

Outreach to external stakeholders is a key function of mar-ket access in biopharma. What is the state of the dialogue with this constituency? Have the terms of engagement changed? Are new players emerging with influence on how your products get to patients? And are patients still firmly in the mix?

Grueger: An important trend is that drug scientific advice is now commonplace in biopharma, which means that our contacts with major HTA bodies like the UK National Institute for Health and Care Excellence (NICE) have become institutionalized. Ten years ago this relationship did not exist but today we are in a mutu-ally reinforcing – and largely positive – dialogue of substance. At Roche, we are also seeing a major upgrade in our ties to the patient community. We are bringing the patient voice directly into our development teams and also leveraging the insights of all our work colleagues who are patients themselves, survivors or care-givers. Our clinical trials have benefited from the patient’s perspective; frankly, we have been surprised about how their input has shaped trial design and made the operation of the trials more relevant to the conditions we are seeking to treat.

Funtleyder: One emerging constituency that requires atten-tion is the impact investing community, many of whom are young millennials with means. Black Rock Inc., the world’s largest asset manager, with more than $6 trillion under management, is a major proponent of impact investing. This group is forcing the biopharma boardroom to embrace socially responsible behaviors, like keeping list price increases more in range with inflation. It will increasingly affect the internal climate in which the market access function promotes its agenda.

PAYING IT FORWARD: What To Wish For

As a concluding thought, what might you prioritize as a pol-icy or practice change to increase market access for patients and enhance your function’s effectiveness – externally and

Governments like quick fixes, which sometimes don’t turn out in the manner intended. It’s important for industry to emphasize a long-term view.




internally? Will market access survive as a strategic prior-ity through the next decade – or the next business model?

Walter: More consensus among stakeholders around a system on the measurement of patient-centric outcomes on health care. A clear standard and common objective of how all stakeholders must perform in improving health for patients. If we can ac-complish that, innovation in health care will accelerate, with additional momentum for policy and practice reforms over time.

Bagchi: The challenge for the biopharma market access prac-tice is to better align objectives, metrics and outcomes around what we do. The BCG Roundtable was founded for this purpose; many of its members are here today to underscore the point. On the external front, we have observed today that alignment is faring well between our R&D industry and the drug regulatory agencies. We are talking and exchanging ideas. But we have achieved little so far on alignment with the payer, HTA and care delivery communities. The gap in understanding between us and them is still huge. Nevertheless, more patient advocates are welcoming our support for a better health care system that works for patients. If we were able to engage in more dialogue with patients at the community level, that would be a significant step forward. It works in the rare disease space, where patients are concentrated and very active due to the lack of treatment al-ternatives.It provides an example of how the industry can better articulate the desire to put patients at the center of everything it does. Isn’t this why we come to work every day?

Kamal-Bahl: I would like to see the industry working col-lectively with other stakeholders on system-wide reforms to promote value-based health care. The current discussion is un-focused, piecemeal and perpetuates the view that biopharma is a silo, outside the mainstream. None of the frameworks in place

to evaluate the value of medicines looks at the process from a system-wide perspective. We need to contest that.

Segalini: Scientific research has advanced to the point that we have the knowledge to diagnose and treat virtually all patients with certain major diseases. I’d like to see more initiative on practice reforms to get us to that practical result, in the most economically advantageous way. That means one thing: the real innovators in the health system must be identified and rewarded. Change starts with a system-wide approach, one that targets the many wasteful, inefficient steps in care delivery and financing that erode the value proposition. The industry also needs to engage for the long haul rather than in episodic bursts. Three words – stability, creativity and visibility – should guide our journey through the disruptive change that characterizes health care today.

Vanovertveld: Transparency is the most formidable driver of change. Sunlight is the ultimate disinfectant. We need more openness in pricing and outcomes. Too little is going on to move us closer to this destination. Surprisingly, I think there is more activity in Europe to open up the system than in the US. Either way, it’s not enough. Transparency is no cure-all, but it’s one of those “force multipliers” that gradually adds to credibility and responsiveness at the institutional level. IV124218

Editor’s note: statements attributed to the participants are per-sonal and do not necessarily reflect the official positions of their companies.

Comments: Email the author: [email protected]

The balance of power behind the prescribing decision is changing: payers are ever more in charge. That means that insight into how payers make decisions – how they evaluate drugs, one against another – will be crucial to any successful drug launch.

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Julia Hu, founder of Lark Technologies, has become something of an expert on the digital health environment, the role of prevention in the US health system, having worked with large tech players such as Apple, Amazon, Google and Sam-sung, and gaining insights into the future trends and opportunities in this space

Lark’s AI Nurse is the first non-human technology to fully replace a live health care professional and be fully reimbursable with a CPT code. It is managing the equiva-lent caseload of 20,833 full time health care professionals. Lark works with health plans and providers to provide infinitely scalable health care.

Having managed her own chronic disease throughout her life, Hu felt the benefits of 24/7 compassionate care. Together with health experts and coaches from Stanford, Harvard and artificial intelligence technologists, she developed Lark – a 24/7 personal AI nurse that texts with people to help them manage and prevent chronic disease. Prior to founding Lark, Hu ran global incubator Clean Tech Open, a green buildings startup, and was an entrepreneur in residence (EIR) at Stanford’s StartX. Hu has also advised former US president Barack Obama, is a faculty member at Singularity University, and is on the board of the Council of Diabetes Prevention.

David Lee: When did you know that you wanted to be a health entrepreneur?

Julia Hu: I loved entrepreneurship ever since I discovered it when I was at Stanford. After starting two companies in cleantech, I jumped right into health care because of my own health issues. I’ve had a chronic disease all my life. It wasn’t diagnosed until I was in my 20s. My chronic condition was a pervasive part of my life as a kid. My dad looked for professionals and after 30 failed attempts with specialists, we ended up find-ing nutritionists. There were weekly meetings for over 12 years, which got rid of 95% of

Virtual AI Nurses And The Future Of Chronic Disease Management

David Lee, partner at Simon-Kucher & Partners, sits down for a fireside chat with serial entrepreneur Julia Hu to talk about virtual AI nurses and the future of chronic disease management. Hu founded Lark Health in 2011 with the goal of scaling personalized, digitally- driven health care to anyone in the world.

BY DAVID LEE

Lark Health’s AI Nurse is the first non-human technology to fully replace a live health care professional and be fully reimbursable with a CPT code.

In the US, 86% of all health care costs are in chronic conditions. Lark’s goal is to reduce that burden and cost.

Founder of the Palo Alto, California-based business, Julia Hu, talks about the company’s move from hardware to software and momentum in the chronic care market toward digital assistance technologies.

JULIA HU


DIGITAL HEALTH ❚invivo.pharm


my attacks. I completely changed my diet and how I managed my medication and exercise. It was a transformative experience. I was lucky to have this 24/7 personal health team helping me manage my chronic condition, but unfortunately most people don’t have access to this type of health care. I really wanted to see if we could scale this personalized compassionate health care to anyone in the world, especially those at high risk of or suffering from chronic conditions. So, that’s what started Lark, and we have been working at it for almost seven years. Today we work with major health plans and have close to two million members on our platform.

Lark has a clear focus in diabetes and hypertension. Could you speak about the focus around chronic disease and some of the market related choices you’ve made?

Our health care system is very good at addressing infectious diseases but structurally unable to fully support long term chronic conditions. That’s why we’re seeing that 86% of all health care costs are in chronic conditions. Our goal is to reduce that burden and cost, and that is why we focus on the most burdensome diseases of our generation – diabetes, prediabe-tes, hypertension, etc. We also work very closely with a lot of Harvard and Stanford behavior change experts and therapists to help people manage depression, and the emotional baggage that is a common comorbidity of these chronic conditions, with cognitive behavioral therapy. We focus on chronic conditions because it’s all about long term engagement and self-efficacy. There are a lot of behavioral and lifestyle changes that impact how you feel every day.

You mention the emphasis on making a meaningful impact for patients and we have read a lot about how you have worked to make your AI “compassionate.” What role do you think that has played in the success Lark has had, and what are your thoughts on how that can be brought more broadly into digital health, because there are so many solutions out there that leave people feeling cold?

It’s a huge part of our philosophy. When I was a kid I felt very alone. I couldn’t play on sports teams like my friends could. It felt unfair that I would have random attacks at night. I some-times felt frustrated and a bit scared, but I felt like so much of the love and support given to me made it feel fine to live with a chronic condition. We really think that the key to chronic con-ditions – even more than medical advice, which you might get from a doctor, such as “Lose some weight, exercise more, take your pills” – is truly a behavioral health and behavior change problem. So, if you can get to the heart of the problem, you can easily transform the situation.

In my mind, it is a bit ironic, but I think that the AI nurse is the only way to send the love and care of a nurse or doctor to everyone in the world in a manner that is unlimited and 24/7. I think that only an AI would be able to not provide judgment when you’re telling them about how hard it is to. It’s about us-ing the benefits and strengths of technology to show that we are seeing your efforts and that we are coaching you and training you to be better. We try to make sure that all the coaching is per-sonalized. We would never tell a marathon runner to go and try

to do 10,000 steps today nor would we ask a very obese diabetic to go run 2 miles if they never run. Really, it has to be personal-ized based on the continuous data that we are getting from all sorts of sources – from your phone, from the 75 health monitors that we link up with and directly get data from, from the blood pressure monitor to genetics data that we are pulling in. We are trying to create a behavioral model of each person, and then seeing their efforts and then coaching them to become better.

A virtual AI nurse is a bit of a radical concept. How do you work with the existing health care system and clinicians? What are some of the obstacles you’ve encountered and how have you overcome them?

Obviously, no one is going to disrupt the health care system in the ways that maybe less regulated and less complex indus-tries have been disrupted. So, we really try to stay within the workflows of the health care system. For example, our diabetes prevention program is CDC-recognized. It is fully medically reim-bursed as a program that anyone can use if they have the correct insurance companies. We went through the steps for CDC Full Recognition, of getting our own NPI number to be a provider, and to be medically reimbursable. We worked with a team of about 16 Harvard and Stanford faculty members who helped us translate the latest gold standard of care. As an example, we translated the American Diabetes Association guidelines into the coaching protocols for type 2 diabetes management and hypertension management. And we worked with the chief medical officer of the Joslin Diabetes Center, which is the largest diabetes center in the world run by Harvard, to make sure our AI Diabetes Care services focused on the key issues. We really try to make sure that the program both conforms to the latest gold standard of care but also is delivered in a way that is in conjunction with the health plans that we work with. For example, a nurse at a call center can in one minute onboard a patient with our AI nurse.

One of the things that came up fairly early for your company development was the decision to migrate from a device and software company to being a software-only company. Could you share a bit of your thinking around that and how this decision has shaped your approach going forward?

It was a difficult decision because we had achieved a couple million dollars in revenue, and the hardware and software busi-

❚ABOUT THE AUTHOR

David Lee leads the global sales practice within Simon-Kucher’s life sciences activities. His focus is on helping medical technology and pharmaceutical clients drive organic growth by advising on monetization strategy, sales force optimization, key account negotiation, and commercial ex-cellence programs. He is also a member of Simon-Kucher’s global medical technology practice, advising health care IT, digital health, diagnostics and medical device and equip-ment clients on sales, marketing and pricing initiatives.


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ness was really growing at that time as an industry. So, this was a personal decision. We felt like we wanted to be an AI coach, an AI nurse, on top of all devices – not just our own. We wanted to share that signal very strongly with the market to make sure that other hardware companies did not feel that we were competitive in any way. Because we wanted to be the layer on top of all this data. We made the difficult decision to step back from hardware, and undergo about another three years of R&D to try to link up to multiple devices. That’s why today we sit on top of 95% of the smart phones and sensors, we sit on top of 75% of health monitors, we sit on top of genetic data, and so forth.

To me, startups can’t do multiple things at once. We chose the AI coaching piece to focus on. We changed early in our company’s existence, within the first year. So, most of our life we’ve been in the world of software-only, but I think we also have a good sense of hardware and how to connect with sensors to pull data from them in an effective and efficient way so that we get real time behavioral models on every one of our 1.5 million patients.

You mention that decision to be the application layer on top of the data. When we talk about digital health, we inevitably come back to tech companies like Apple, Google, Amazon and Samsung and their ambitions in health care. Would you share some of your thoughts on partnering with large players? What are your key lessons learned?

We’ve had some exciting opportunities to work with many of those players closely. Health care is so complex and fragmented from a regulatory standpoint. The companies that can figure out how to localize and aggregate all of the health care and consumer health data into one unified data repository will unlock a lot of potential in health care. Claims data is great, and we should absolutely integrate that into one place, but a person’s life generates so much more consumer health data – where they go for meals, what pills they’re taking from their local pharmacy, how much exercise they do, what their daily glucose level is – all of that information. If someone has the ability to aggregate it into one place then I think there will be a lot of value. Apple’s Health Kit and consumer centric data approach is interesting. You’re also seeing that successful consumer-centric approach with Amazon and their recent acquisition of PillPack – which is a delightful consumer-centric pharmacy experience.

I am excited about some of the consolidations that are happen-ing in the tech and health tech space. Certainly, we believe that understanding a person’s context enables more personalized health care services. If you can gain the trust and engagement of a patient, they will share more information about themselves. That is a positive feedback loop and it is the basis of Lark’s AI engine. Our AI nurse has improved by close to 40% just within one year of launching our fully medically reimbursed DPP (diabetes prevention program). Now, within a year we are the second largest DPP program in the country. All of that data is really helping the AI nurse get smarter.

The CMS Innovation Center has named DPPs as one of two pilot programs to reduce cost, improve quality and outcomes. What do you think is primarily responsible for that? What about the program design or protocol makes it so effective?

It’s great that our health care system is looking at prevention so seriously now. DPP is the first fully medically-reimbursed program that focuses on prevention and not chronic disease management, and we’re excited to be one of the fastest grow-ing and second largest CDC-recognized diabetes prevention provider in the country. Prevention can be done so much more cheaply than management of a chronic condition. If you can prevent someone from being a type 2 diabetic that is $8,000 to $20,000 of cost per year for the rest of their life that is averted. The program is relatively inexpensive to distribute and serve. In my mind, if we can continue to focus on the root of the problem, which is helping people before they are suffering from chronic conditions, everyone wins.

The FDA just published a new strategic framework about the use of real-world data and real-world evidence in drug and biologics development. What role do you see for Lark as a partner to pharma and biotech companies as a source of patient recorded outcome tool, and real-world evidence generation?

There is a lot of benefit to society from this. Pharma and bio-tech companies can create much more impactful products by using data from larger populations than was previously available through clinical trials. You’re seeing 23andMe doing a lot of great

My idealistic dream is to provide anyone in the world suffering from or at risk for a chronic condition personal compassionate health care. It doesn’t matter if they are 500 miles away from a hospital or a good clinic, or can’t afford care.

– Julia Hu


DIGITAL HEALTH ❚invivo.pharm


work in sharing their huge databases to move science forward. Currently, we are focused on helping major health insurance

providers and self-insured employers manage their chronic pa-tient population or wellness population. However, our mission is to offer free 24/7 chronic condition care services to all members everywhere, so who knows where that will lead.

You recently announced a collaboration with 23andMe for the integration of genetic insights into new weight loss and diabetes prevention programs. Can you share some of your thoughts on the partnership and the role of genetics in Lark’s development going forward?

23andMe and Lark created a new genetics based chronic disease management platform together and we think it’s a breakthrough for personalized medicine. By taking 23andMe’s incredible insights about genetic variants and the impacts of genetics on certain lifestyle interventions, Lark is able to provide even more personalized real-time interventions for chronic pa-tients or those at high risk of chronic conditions. We’re so happy 23andMe chose Lark among all the larger potential partners in its efforts to create actionable meaning from genetics.

Let’s now pivot to some of the challenges of running a high-growth company. You mentioned earlier it’s hard for startups to do more than one thing well. How do you bal-ance doing that one thing well and keeping focused on the mission, but also leaving room for experimentation for new concepts that you are inevitably presented with?

Doing one thing well, in our case providing infinitely scalable compassionate chronic care for all, actually necessitates a lot of experimentation. We act more like a consumer product company in that respect. We do a lot of user testing and experimentation on which features are best, which recruitment philosophies are best. On the other hand, where we try to be very disciplined is to not chase after shiny projects that are not our core competency. We’ve been lucky enough to be regarded as one of the creators of the AI chatbot modality and get a lot of interest from chief information officers in other industries working on chatbots. We just see that as very flattering but something that we cannot proceed with at this moment. It’s more looking at your mission and your goals and seeing if you are the best person for the job and if it’s aligned. It’s always hard but we try to stay focused in chronic disease, in areas where there is self-efficacy involved, in areas where there is passive data involved. We are focused on a pipeline of new chronic diseases, where we think our technology is good for solving those problems.

When you think about the marketplace, what are the big-gest threats to your business? Is it more about changing the consumer mindset or fending off larger companies who are trying to co-opt some of your capabilities?

Neither of those really keep me up at night. Text messaging is mass market – we don’t need to train the consumer here. My 85-year-old aunt is better at texting in WeChat than I am. Alexa and Siri have proven that people feel comfortable with having conversations with AI. The problem for startups like us is com-peting against much more well-funded and larger companies

who market similarly. We are spending time building a clinical portfolio with rigor that conservative health plans and other health care players are comfortable with. We’re lucky because scaling to their millions of members is not an issue – it’s more the brand awareness and long sales cycle that keep me up at night.

Based on what you see in the marketplace today, what parts of consumer health engagement do you think are most ready for further disruption? What do you see as key white spaces and opportunities?

I still feel like chronic disease management is a huge play for technology, especially building on top of Internet of Things and the vast data that society is generating. The recent Propeller Health exit is a great example of an IoT connected device plus app service.

Other key white spaces I’m excited by are genomics and men-tal health. The next step of genomics is to field action rather than just be a cool study about yourself. While mental health startups are focusing on real-time need, I’m very excited that digital health has continued to be a hot early-stage venture bet even though you’re not seeing as much of the immediate unicorn deals. Health care in general has a much longer life cycle, but huge value is created in those areas.

As an entrepreneur, is there anything that you would be looking for from the government in terms of standards or interoperability that you think would accelerate the achievement of your mission?

I’m not a policy expert by any means, and I was not very involved in policy until I realized that changes in policy have huge ramifications. So, I joined a couple of boards to advocate for policies and leadership – Council for Diabetes Prevention and the Silicon Valley Leadership Group. The reimbursement of the CDC-recognized diabetes prevention program was a huge step in the right direction. I think it would be incredible to have CPT codes that start addressing diabetes and hypertension and other chronic conditions. There are some great advances in telemedicine codes. I think that if these codes can be extended to AI and digital counseling, that would drive real scale.

Looking at international expansion and other markets, have you given much thought to potentially extending Lark’s reach to other markets?

My idealistic dream is to provide anyone in the world suffering from or at risk for a chronic condition personal compassionate health care. It doesn’t matter if they are 500 miles away from a hospital or a good clinic, or can’t afford care. We have archi-tected our systems so that we can internationalize. We’ve been approached by a lot of partners and have been having great conversations with large health plan partners that are able to help us navigate the complex regulatory environment and busi-ness environment. IV124222

Comments: Email the editor: [email protected]


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In Vivo: ImmunoGen works on the frontier of drug development in oncology. What policy and practice issues have shaped industry prospects over the past 12 months?

Mark Enyedy, CEO of ImmunoGen: I cite three broad trends in the cancer space. First, at the macro level, you have the heady pace of industry science and innovation, evidenced by the record 59 novel drugs approved by the FDA last year. More than a third (18) of these were for oncology indications, with six cancer drugs approved in the last quarter of 2018 alone. Behind the numbers is the success we have had translating basic science into clinical candidates. That volume has been matched with velocity. Real gains have been made against current standard of care, which is the result that counts for patients. It means that all parts of the innovation ecosystem are performing above expectations.

The second is the impact of a highly collaborative stance from the FDA in advancing cancer drug candidates to approval. The American Cancer Society (ACS) looked at FDA cancer drug approvals from August 2017 through July 2018 and found that, of the 16 drugs approved during that period, 14 had been assigned an alternative regulatory pathway – such as accelerated approval, fast-track, breakthrough or priority review. These initiatives are getting products to patients much faster. Dr. Richard Pazdur, director of the FDA’s Oncology Center of Excellence, deserves recognition for developing what I perceive as a pragmatic, results-oriented approach to working with product sponsors in a way that fosters innovation.

Solving Cancer’s Access Challenge With Data, Differentiation And A Big Dose Of Bipartisanship

ImmunoGen CEO Mark Enyedy, a leading proponent of targeted ADC oncologics, explains how risk – and resilience – are both central to today’s challenging innovative landscape in cancer. Despite recent setbacks on the road to commercialization, science will continue to transform, bolstered by strong financing; revolutionary new data sources, validated by patient-centered outcomes; and that persistent human intangible called hope.

BY WILLIAM LOONEY

Access is a rising policy theme within the cancer community, a trend that is requiring innovators to focus more on drug tolerability and long-term safety signaling, on the clinical side, and post-treatment patient service and support, on the delivery side. ImmunoGen CEO Mark Enyedy is determined to make this effort impactful in helping burnish the industry’s credibility as a stakeholder in fighting cancer.

So what? With the pace of innovation in oncology the quickest it has ever been, industry has the opportunity to move forward with confidence in the debate on drug access, putting itself to the test by agreeing with payers and other stakeholders to a truly objective, bipartisan measure of value creation.

MARK ENYEDY, CEO IMMUNOGEN


C-SUITE SPEAKS ❚invivo.pharm


The third issue is the arrival of truly impactful data that promises to enhance the therapeutic efficacy of many cancer treatments. A standout for me was the Solo-I Phase III study on Astra Zeneca’s PARP inhibitor Lynparza (olaparib) as maintenance therapy for newly diagnosed patients with advanced ovarian cancer, released at the European Society for Medical Oncology (ESMO) annual meeting in October last year. It showed that, of 391 enrolled eligible patients with the BRAC mutation, 60% were progression-free of disease after three years, compared to 27% receiving placebo.

This was an extraordinary finding that underscored the validity of PARP inhibitors in reinforcing and prolonging the benefits for patients whom responded to initial standard treatment consisting of surgery or chemotherapy. In addition to building momentum for the use of PARP inhibitors as a maintenance therapy for many cancers, the study demonstrated the need for more targeted front-line therapies like antibody drug conjugates (ADC), in combination with chemotherapy. More important, the findings offered the opportunity for companies active in ADCs to reduce their toxicity and achieve a longer duration of response, both of which are good for patients.

Another, similar example is the TAILORx study released at the American Society for Clinical Oncology (ASCO) last year, which was the largest randomized adjuvant breast cancer treatment trial ever conducted, covering outcomes for 10,000 women with early-stage cancer over nine years. It found that 70% of enrollees derived little benefit from standard chemotherapy, whereas chemotherapy for the remaining 30% proved to be life-saving. Diagnostics used in the trial are now going to enable physicians to de-select patients whose treatment will not be advanced through chemotherapy while better targeting the therapy to those who will. Again, it shows how improved data collection and analysis are raising cancer outcomes by not exposing patients to the long-term side effects of chemo where it does not have an advantage. The findings are already being incorporated in breast cancer treatment guidelines – good news for thousands of cancer patients.

We’ve seen a setback on approval prospects for ImmunoGen’s lead registration candidate, mirvetuximab soravtansine, for the indication of FRA-positive platinum-resistant ovarian cancer. Specifically, the read-out of your FORWARD I Phase III trial on mirvetuximab showed the candidate failed to meet its primary endpoint in demonstrating a statistically significant improvement in progression-free survival, when compared to standard chemotherapy. Does this dampen your enthusiasm for the cancer space, given this latest evidence of the inherent risks in seeking drugs that actually work for patients with hard-to- treat malignancies? What’s the path forward for ImmunoGen?

Every clinical trial poses a risk – that’s precisely why they are conducted, to ensure that every approved drug will be effective and safely tolerated in the patients for which they are prescribed. We willingly took that risk. And we did so because patients with platinum-resistant ovarian cancer are in dire need of therapies that improve upon current standard-of-care chemotherapy. Consider the risk for them, as essentially right now the options

for these patients entail low response rates, short survival and significant toxicities. Of course, we are disappointed with the FORWARD I trial outcome, but our investigators did observe a consistent efficacy signal in the pre-specified high-folate receptor alpha subset of patients in the study; there was as well a favorable tolerability ratio for both of the mirvetuximab soravtansine patient groups.

Based upon these observations, we will be conducting additional analyses to further evaluate the FORWARD I data to determine potential next steps involving a monotherapy approach. In addition, we have generated encouraging data on additional mirvetuximab combination regimes and will evaluate these ongoing studies as an independent path forward to support a registration in ovarian cancer. I’d also point out ImmunoGen remains a global leader in targeted precision medicines for cancer, with a novel ADC platform developed here in-house, and which is the focus of a multi-candidate ADC partnering deal we recently struck with Jazz Pharmaceuticals. With our solid financial base, I am convinced we can prevail in making a mark with patients, and especially those with ovarian cancer, the fifth leading cause of cancer among women and where the five-year survival rate remains stubbornly below 50%. The unmet medical need is too great to do otherwise. And I still think its a good time to be in the cancer space.

You have a long record as an innovator in business development. What’s your take on the climate for deals and partnering in the oncology space?

Partnering and M&A activity had a fast start in the first quarter of 2018 but then tapered off. There are several reasons. Most important has been the ready availability of capital. Last year was a record year for biotech IPO’s. What this means in practice is that when biotech can count on a strong equity market to secure capital to drive business growth, partnering becomes an option rather than a necessity. And you have a ripple effect, since historically those partnerships often evolve into an M&A transaction. Another, more subtle trend is the impact of new management at the top, mostly in big pharma, where the emphasis has been on re-prioritization of the entire R&D portfolio. Some new leaders want to hit the ground running and do deals immediately, but overall the emphasis is to do the internal restructuring first. Added to this conservatism is the perception that the cash premium required to meet lofty asset valuations over the past few years is too high, especially when you factor in emerging macro-economic challenges like trade protectionism and political pressures on drug pricing.

Looking forward, however, I am an optimist. The M&A market will return. It always does, because the desire to deal is encoded into the DNA of our industry. The need to keep pace with science and comply with complex regulations requires even the most successful company to find additional sources of growth beyond what the in-house R&D team can provide. Portfolio optimization is a never-ending quest, centered on creating complementary adjacencies to core products and building scale to compete with proliferating rival therapies. These factors are multiplied when you apply it to the oncology space. Goldman Sachs recently provided me with new data that confirms this – over the past two


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years, deals focused on oncology have exceeded those in all other therapeutic categories combined. Over five-years, cancer accounts for more than half of all biopharma transactions. Hence, I think that as big pharma emerges with a clearer sense of how it wants to allocate its R&D resources, and as the biotech IPO market tames and pulls back, as is the case right now, the appeal of the deal will move back to center stage.

Is the concentration of industry resources in the oncology pipeline evidence of hubris – is it realistic to think that a multiplying array of new expensive therapies competing for the same bloc of cancer patients will obtain market acceptance at the nosebleed high prices required to sustain the business model?

It is a fair question. The issue really comes down to confidence that the industry will be able to produce those highly differentiated positive outcomes that raise the standard of care and allow payers to obtain savings from other parts of the care delivery chain. The fact is innovation has never been higher in oncology. We need to remind others that progress is the result of discoveries made 20 or more years ago, such as mapping of the human genome, which in turn allowed for the identification

of tumor targets that were subsequently translated into specific therapeutic interventions. Patient stratification in the context of precision medicine is now commonplace, resulting in better outcomes for cancer patients.

This legacy of substance is evident in ImmunoGen’s portfolio. Despite our current trial setback, our program exemplifies the trend to increasingly targeted therapies, focused on small populations identified as most likely to benefit from the drug, which is improving individual response rates and making overall survival a verifiable statistic measured in human l ives saved. When you look at the numbers, no one can say this industry is not creating value for payers too.

The physician community has also been a beneficiary o f innovation in cancer drug therapy. By and large, they have responded positively to the expansion of the biopharma armamentarium, particularly the arrival of companion diagnostics, where they are able to pair the right patient with the right therapy, resulting in a better outcome. The bottom line is every cancer physician wants to replace the no options conversation with one that offers hope. And the payer will take notice if our outcomes are validated by the possibility of disease management coupled with improved quality of life.

Taken together, these changes in perception, accompanied by more wellness innovations like anti-cancer screening and healthier lifestyles and backed by data showing that mortality rates are down for a large number of cancers, convinces me that the industry pricing model is sustainable. We have evidence now that combinations of drug therapies, like the PD-1 inhibitors and standard chemotherapy in lung cancer, will yield amazingly durable responses for a broad cross-section of the patient community. That’s why I see the access and pricing challenge is one we can weather – if we keep the engine of innovation humming.

Any wild cards you might cite that could reverse this rosy outlook?

The only one that comes to mind is the prospect for federal price regulation here in the US, particularly the Trump Administration’s proposal to lower Medicare Part B reimbursement for certain physician-administered infused drugs – many exclusively for cancer – and the creation of an International Price Index (IPI) to peg US government prices to a basket of 16 countries. This list would include low price countries like Greece. Part B reimbursement would not only cut compensation for physicians that administer the drugs in community clinic settings, it would also – more critically – reduce access for patients. This is because, as community practice physicians reduce their exposure to lower reimbursements, cancer patients will likely have to seek treatment in fewer places, like large academic medical centers that have waiting lists and require patients to travel longer distances. Relying on rocket-bottom prices in Greece, where many standard cancer therapies are just not available to patients, to determine prices in the place where the majority of new drugs originate, is a hugely disruptive assault on innovation. The US is the most productive nation on earth in bringing drug therapies to the market. It is simple: if you impair the profitability of that market, you will get less

The most striking development is the continued progress in precision medicine, with the arrival of targeted therapies that promise greater efficacy, fewer tolerability and side-effect issues, and better outcomes for the individual patient.


C-SUITE SPEAKS ❚invivo.pharm


innovation and lower productivity in the research enterprise overall. Europeans have tried squeezing innovation, using similar methods. The outcome is patient access to life-saving cancer drugs is lower than in the US. New ideas come forward, but they don’t get the capital and resources to turn those ideas into useful therapies.

I believe the biotech sector has been able to work productively with both sides of the political aisle. Here in Massachusetts, I can attest to the fact that our industry never had a better friend than the late Senator Edward Kennedy, who had personal exposure to the ravages of cancer. I had the opportunity to meet and work with him, and so I am an optimist that we will eventually get to a better understanding of value. We can help policy-makers integrate that awareness to achieve useful reforms in drug reimbursement that don’t kill innovation. We already see that with the work biotech is doing on pay-for-performance contracts with private payers. I say its fine to put our industry to the test in agreeing on truly objective measures of value creation. I know ImmunoGen and other innovators will be up to the task.

What about the impact of technology on cancer drug development? The claim is that artificial intelligence, machine learning and other advances in data aggregation will jump start the engine of commercialization for promising therapies. Is the prognosis real or hype?

I think this question relates to hope rather than hype. We are in the early stage of a revolution in the application of big data to solve basic problems on the biologic origins of disease. We have the means to enhance the accuracy of diagnostics, ultimately leading to more effective treatments and better outcomes for patients. What we are benefiting from right now is the movement to integrate disparate streams of cancer-linked data, such as the National Cancer Institute’s NCI) Genomic Data Commons initiative, a repository of studies on the genetic origins of many cancers that can be shared with researchers on an open access basis. The American Association for Cancer Research (AACR) Project GENIE is another, international consortia that is generating an evidence base by integrating clinical-grade cancer genomic data with outcomes data on tens of thousands of cancer patients treated at multiple institutions worldwide. So this is one area where our industry is seeing practical results. It’s also noteworthy that the FDA approved in 2017 the first digital device, IntelliSite, that uses machine learning to improve the speed and accuracy of pathology scans.

More of these technologies will come on stream in the next year or two, making the documentation and interpretation of data much more open and available for use in the active clinical setting. Industry has the obligation to contribute its data constructively, supporting, for example, those longitudinal studies valued by researchers and payers alike, and making this data available for public consumption. The large data processing capabilities offered by today’s technology will accelerate the research enterprise in cancer in the years ahead – there is no hype in stating that.

What should patients be most excited about in cancer research over the next three to five years?

The most striking development is the continued progress in precision medicine, with the arrival of targeted therapies that promise greater efficacy, fewer tolerability and side-effect issues, and better outcomes for the individual patient. ADCs form the centerpiece of this approach in cancer, and it happens to be a field where ImmunoGen has built a leadership position in research. The industry has four FDA-approved ADCs on the market, two within the last 18 months. There are also recent and impending label expansions involving the ADC Adcetris (brenuximab vedotin), from Seattle Genetics, and Kadcyla (adotrastuzumab emtansine), another ADC that originated here in our ImmunoGen lab but was subsequently licensed to Roche. Late last year, Roche reported data on Kadcyla where it improved disease- free survival in comparison to the drug Herceptin in early stage breast cancer patients with the HER2 mutation. Looking at the pipeline, Immunomedics Inc., has an ADC in registration, while we, Daiichi Sankyo Co. Ltd. and a half dozen other companies have late-stage assets, along with another 70-plus clinical candidates. Overall, the ADC field is proliferating, with many strong product candidates soon to arrive that will provide new options for physicians and patients in targeting specific, hard to treat cancers.

You recently became a northeast regional board member of the American Cancer Society (ACS), the largest single funder or cancer research outside the federal government. What is the ACS doing to increase access to quality cancer care, especially in tackling the disparities in care that exist in many communities?

The ACS is taking a proactive stance on access and disparity, noting that the scientific progress against cancer is irrelevant if patients face more barriers to treatment. Regional boards are critical to this effort because we can more effectively connect at the community level, closest to the actual patient experience of care.

The New England branch has emerged as a leader in mobilizing the many institutions that provide cancer services to increase access and address disparities in care. Initiatives center on basic things like finding volunteers to help cancer patients get to their physician offices and treatment centers. We also sponsor and fund a series of “Hope Lodges,” where patients facing a lengthy procedure like a bone marrow transplant can stay close to the hospital with a caregiver, free of charge. There is one here in Boston and more than 40 throughout the US. Finally, we work with corporate sponsors – like the National Football League (NFL) – to support grants to minority community health centers that provide important wellness measures like free colorectal cancer screenings and other preventive interventions, along with post-diagnosis and survivorship monitoring. I spend much of my time as the ACS regional board member seeking other corporate sponsors to fund the grants. It is one of the most impactful things I do right now. It is another way of being innovative, outside the lab. IV124225



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Merck KGaA’s Luciano Rossetti talks to In Vivo about the German pharma’s next wave of immuno-oncology products that are steadily moving through its pipeline, why GlaxoSmithKline PLC was an ideal IO partner in a very competitive cancer drug development arena and the company’s wider deal-making strategy when it comes to pipeline advancement.

In February 2019, Merck entered a global strategic alliance with GSK to jointly develop and commercialize its pipeline cancer therapy M7824 (bintrafusp alfa*). M7824 is an investigational bifunctional fusion protein immunotherapy that is currently in clinical development, including potential registrational studies, for multiple difficult-to-treat cancers. This includes a Phase II trial to investigate M7824 compared with Merck & Co. Inc.’s Keytruda (pembrolizumab) as a first-line treatment in patients with programmed cell death ligand-1 (PD-L1) expressing advanced non-small cell lung cancer (NSCLC).

Merck received an upfront payment of €300m ($340m) from GSK and is eligible for potential development milestone payments of up to €500m triggered by data from the M7824 lung cancer program. Merck will also be eligible for further payments upon successfully achieving future approval and commercial milestones of up to €2.9bn – resulting in a total potential deal value of up to €3.7bn.

“Among our pipeline assets, perhaps the most innovative with the greatest potential is M7824, a bifunctional fusion protein immunotherapy that acts in a single molecule,” said Rossetti, head of global research and development at Merck. The compound is de-signed to simultaneously target two immuno-suppressive pathways: transforming growth factor-ß (TGF-ß) and an anti-PD-L1. Bifunctional antibodies aim to increase efficacy above and beyond that achieved with individual therapies or combinations of individual therapies. In addition to use as a single agent, M7824 is also being considered for use

The Knowledge Within: An Interview With Merck KGaA’s R&D Chief

Luciano Rossetti, head of global research and development at Merck KGaA, believes the mid-sized pharma is well on its way to becoming a global immuno-oncology specialist. He discusses in-house innovation, the company’s recent IO alliance with GSK and the next wave of success that is beginning to swell across the cancer drug development community.

BY LUCIE ELLIS

Merck’s R&D chief Luciano Rossetti discusses the rationale behind the German pharma’s recent development deal with UK giant GlaxoSmithKline, which is centered on one of Merck’s pipeline assets in cancer.

Investors are intrigued by the investigational compound M7824, which GSK has paid a significant sum to access, because of the potential of its dual mechanism.

The Merck compound could potentially overcome some of the hurdles that limit the number of patients that respond to breakthrough immuno-oncology drugs, such as the PD-1/L1 checkpoint inhibitors.

LUCIANO ROSSETTI


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in combination with other assets from the pipelines of both Merck and GSK under their agreement. (Also see “GSK Makes I-O Move With Merck KGaA Deal Worth Up To €3.7bn” - Scrip, February 5, 2019.)

Despite Merck’s commitment to IO development, GSK initially appeared as an odd partner of choice. The UK big pharma is not a key player in the IO space and has spent recent months bulking out its cancer pipeline through acquisitions and deals. During GSK’s fourth quarter earnings call in February 2019, GSK’s CEO Emma Walmsley said its oncology pipe-line has doubled in size since July 2018 to include 16 assets in the clinic. As well as its deal with Merck, in December GSK acquired cancer development company Tesaro Inc.for $5.1bn. (Also see “GSK Embraces PARP Promise With Tesaro Buy” - Scrip, December 3, 2018.)

However, Rossetti said, “We wanted someone very committed to oncology that has a complimentary skillset, but also someone that doesn’t have a full commitment to any immuno-oncology lead compounds.”

He added that Merck still held discus-sions with some of the major IO players, but ultimately the company was concerned “in terms of having this new immunotherapy as an anchor for future combinations, for new therapies in certain fields like non-small cell lung cancer, it was not ideal to go for an established player who had already committed enormous resources to a mar-keted anti-PD-1 or anti-PD-L1, or something in very late-stage.” Instead, Merck’s main criteria when seeking a partner for M7824 was to have “someone that was truly heav-ily committed to growth and investment in oncology, but also to be a major player in terms of global reach.”

Rossetti said there was an immediate alignment with the GSK team at the high-est level. “There was immediate alignment on the philosophy and the principles on how to develop this exciting novel drug and bring it to the patients with difficult-to-treat cancers.” Investors are intrigued by the opportunity M7824 represents, because of the potential of its dual mecha-nism it could potentially overcome some of the hurdles that limit the number of patients that respond to PD-1/L1 treat-ment. The drug represents an enormous commercial opportunity in cancer.

Other Pipeline DevelopmentsMerck’s R&D chief also noted that the company has at least six clinical-stage compounds in development that are reaching critical steps in terms of regis-trational or late-stage trials. “Our clini-cal-stage pipeline over the last few years has developed very rapidly and with great success,” he noted, adding that this busy pipeline is what pushed Merck to seek a strategic partnership for M7824 “to maximize the value of this asset and to better balance the risk management of our extremely rich pipeline.”

Outside of oncology, Rossetti high-lighted evobrutinib as being at a critical development stage for Merck. The com-pound is expected to move into Phase III trials in the third quarter of this year for the treatment of multiple sclerosis (MS). The company is also awaiting Phase IIb data for evobrutinib in rheumatoid arthri-tis and lupus. Merck has also submitted a new drug application (NDA) for its oral drug Mavenclad (cladribine tablets) as a potential treatment for relapsing forms of MS, with a decision from the US Food and Drug Administration (FDA) expected in the second quarter.

Also, in its IO portfolio, Merck’s PD-L1 inhibitor, Bavencio (avelumab), which is partnered with Pfizer Inc., recently reported further trial results in renal cell carcinoma (RCC). And on February 11, the US Food and Drug Administration (FDA) accepted for priority review the supplemental biologics license applica-tion (sBLA) for Bavencio in combina-tion with Pfizer’s Inlyta (axitinib) for patients with advanced RCC. Inlyta, an oral therapy designed to inhibit tyrosine kinases, including vascular endothelial growth factor (VEGF) receptors 1, 2 and 3, is already approved in the US and Europe to treat RCC.

“It makes sense for us to find strategic partners to fully maximize some assets, particularly ones like M7824; which, if it hits and confirms some of the initial signals, will require a very rapid escala-tion of our planning soon,” Rossetti said.

IO Deal-MakingRossetti sees only more IO partnerships across the industry in the near-term. “There are some big players in oncology that have relatively dry internal pipe-

lines and they are heavily investing and looking for partnerships or for licensing deals,” he said. Merck, however is in the situation where it has an organic road ahead coming largely from products de-veloped in-house, but it needs partners to maximize the potential of certain compounds, he noted.

Rossetti expects a heavy level of activ-ity in the field of oncology in terms of the degree of collaborations, partnerships and acquisitions. “That’s what seems to be happening and it makes sense.”

“We’re just at the beginning of a new era in which we are basically able to reawaken the immune system and ac-tivate it to attack tumor cells,” Rossetti said, when considering the next moves for the IO drug development community. “We’re just scratching the surface,” he said. “Only a small minority of patients are dramatically benefitting from these great new therapies, while the potential exists to expand the number of patients as well as the durability of these responses. Looking back at the last couple of years, a lot of promise has been made in terms of immunotherapies, but there has also been a lot of disappointments relative to the enormous number of clinical trials that have been initiated all over the world to investigate these innovative therapies.”

Merck is familiar with setbacks in cancer drug development. In November 2018, Merck and Pfizer lost an opportunity to crack the ovarian cancer market early when Bavencio failed as a monotherapy and in combination with chemotherapy in the Phase III JAVELIN Ovarian 200 study of tough-to-treat platinum-resistant or refractory disease. The companies announced in a November 19, 2018, top-line release that the drug missed progression-free survival (PFS) and over-all (OS) endpoints when tested alone or with pegylated liposomal doxorubicin (PLD) chemotherapy against PLD alone in the three-arm study of 556 women with cancer resistant or refractory to platinum chemotherapy. Bavencio is one of the more advanced checkpoint inhibitors in devel-opment for ovarian cancer and the com-panies were hoping to be the first in the PD-1/L1 class approved for this indication. (Also see “Merck KGAA/Pfizer’s Anti-PD-L1 Bavencio Loses An Opportunity In Ovarian Cancer” - Scrip, November 19, 2018.)


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The Next WaveRossetti believes the industry is now ready for more data-driven decisions on what to take forward in pipelines. This earlier and better-informed decision making will spark another “wave of in-novation around immunotherapy,” he said. He expects M7824 to play a role in this next movement in cancer treatment.

“It’s an early product, with about 700 patients treated to date. In general, these are small cohorts but we have impressive signals that need to be fully confirmed during the next stages,” he highlighted. If the early signals are confirmed, M7824 could lead to transformational effects in non-small cell lung cancer, biliary tract cancer, HPV-associated tumors, and other areas, Rossetti said.

In the coming years, there will be “more and more demand to find the right patients for the right therapies or the right therapies for the right patients,” Rossetti said. “Immuno-oncology is particularly challenging. We do believe in PD-L1 as a good driver but cancer is tremendously complex and a number of patients do not respond to these therapies, or acquire resistance to them, leaving them with limited treatment options.”

“The next challenge is going to be ful-ly understanding the drivers for specific tumors, whether it be targeted oncology or immuno-oncology,” Rossetti said. “We need to be able to identify these drivers earlier and treat them with very specific biologics or small molecules. That’s where big investment is required to realize the full potential of precision medicine and that’s where we as a com-pany are focusing most for our future.”

When it comes to precision medicine, Merck wants to use more evidence and analysis derived from digital databases. “We’re putting some effort in digital pa-thology but also in gene sequencing and expression analysis, which is the most important genetic factor underpinning tumors, before we even start designing our first-in-human studies. Investments are prompt in some of those novel types of analyses in the clinic.”

In-House Versus AcquiredRossetti regularly promotes Merck’s in-house discoveries and developments. “For many years, we have been very strong in drug discovery with labora-tories producing extremely good ideas and promising approaches. But in many ways, we were not fully materializing our clinical pipeline,” he said.

However, the company is focused now on investing in translational medicine across its development program, in alignment with marketing colleagues. As such, there was a unifying intent to develop internal programs, he said. “We feel, in the last few years, that we have enhanced our productivity within the organization and in advancing innova-tive therapies. By having a very focused discovery strategy as well as a complete end-to-end organization, we can success-fully develop our products all the way through registration to launch.”

Rossetti added that to have a strategy based on how may acquisitions and licens-ing agreements can be done, a company must have substantial resources. “In the rare cases in which clinical-stage, well-val-idated or highly promising assets are avail-able, it takes a huge amount of resource to step in.” He said Merck has “more and more trust in the ability of our own internal lab to produce truly breakthrough innovation, and M7824 is an example of this.” Whereas externally feeding the pipeline would be “incredibly costly and highly competi-tive.” This was why Merck chose to focus on maximizing the output of its discovery units, Rossetti noted.

“I think we’re being clear that there’s still the possibility for us to do smaller deals for something to complement our pipeline, but the general philosophy is to stick with the internal and organic growth of the pipeline,” he said. To bal-ance that pipeline and manage where its R&D dollars go, Merck, in 2013-2014, nar-rowed its R&D focus to very specific core areas. “We focus on multiple sclerosis and leveraging immunology,” Rossetti highlighted, adding that one example of where Merck has pulled back its R&D efforts is in neuroscience. “We made the

decision that in terms of true innovation in the lab, we were less competitive in neuroscience, where there are specific scientific areas within oncology and im-munology where we believe we can be very competitive. In terms of disease areas we are prioritizing specific tumor types and are also very committed to multiple sclerosis.” He also noted that in autoimmune diseases, Merck has a par-ticular focus on systemic lupus erythema-tosus. “These are really narrow areas and a major focus of our scientific efforts.”

To be competitive in these areas, Merck is getting even more niche. “In terms of our scientific focus, even within immuno-oncology, we are creating a center of excellence in bispecific and bi-functional proteins to really leverage the ability of having a single molecule with more than one mechanism.” He added, “We also want to do more to direct these mechanisms to the antibody component of bispecific and bifunctional compounds as well as to specific areas within the tumor environment. This is one area that we have invested a lot in.”

Merck is also advancing its activities within DNA damage repair (DDR) research and development. “As we think long-term, there will be some synergies between in-hibiting the mechanism for DDR that we believe can amplify the efficacy of current therapies, in particular the autoimmune checkpoints,” Rossetti said.

“We have ambitious view about the pipeline,” Rossetti noted, adding that over the last 12 to 18 months the com-pany’s confidence in its R&D offering has grown. He cited M7824 and evobrutinib as prime examples that have made the company feel as though “we are on the right path.” What Rossetti seeks now is “to see big success in our launches and even more regulatory success to confirm this progress.” IV124233

*Bintrafusp alfa is the proposed Interna-tional Nonproprietary Name (INN) for the bifunctional immunotherapy M7824.



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The neuroscience data analytics company Ixico Ltd. is many things to many people, but it is not a start-up. CEO of two years Giulio Cerroni stresses that almost before we start. IXICO is also not an especially young company, formed some 14 years ago as a spin-out from several UK universities, it has been trading for 13 years, and in 2018 (year-end September 30) reported an

underlying revenue increase of 41% and a record-high revenue total of £5.4m ($7.02m). It has been AIM-listed since its 2013 reverse takeover of Phytopharm.

The company’s performance to date has been good, but it is not good enough for Cerroni. On assuming the chief executive role in 2017, he set about drafting a strategic review to take IXICO – Information eXtraction from Images Company – to another level, and to target its efforts more precisely. IXICO’s aim is to develop a strong position as a partner to pharma and biotech companies as well as contract research organizations, helping them to achieve better clinical trial and pipeline success by identifying imag-ing and digital markers. This is through use of its AI-driven data analytics, one of the key building blocks of personalized – and affordable – future medicine.

Given the failure of so many clinical trials in neurological diseases, better-targeted success has been an unmet need for some considerable time, Cerroni said in an inter-view with In Vivo. IXICO’s central London headquarters houses some 60, very-highly qualified staff. It has broad commercial ambitions, but in his November 2017 review, Cerroni observed that “we are trying to do too many things in a big, but fragmented market.” Early-phase work has been the company’s sweet spot, and specifically help-ing pharma and biotech companies design their clinical trials to decide what markers they are looking for.

But the market was not only too wide, but also crowded. “I was seeing a lot of grant-

IXICO Targets Go-To Status In Neuro Data Analytics Space

Neuroscience data specialist IXICO has broad ambitions to partner with pharmas large and small, helping them develop better-targeted clinical trials using imaging and digital biomarker data. A business review in late 2017 by CEO Giulio Cerroni refined the company’s value proposition, while keeping the headline elements in place: scale the business and diversify within neuroscience.

BY ASHLEY YEO

As IXICO moves forward in its role as a partner to the pharmaceutical research industry, it is evolving from a medical imaging expert into a data analytics company focused on providing tech services to the pharma industry – primarily in neuroscience.

Following an activity planning review by CEO Guilio Cerroni, the company has restructured its leadership in a move to encourage more partnerships, bring it to the “tipping point” and accelerate growth.

So what? IXICO is exploiting artificial intelligence (AI) and digital markers to provide a more complete service to a pharma industry that knows it needs better tools to crack some of society’s more persistent therapeutic challenges.


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funded European projects, and I wanted to slim down our approach to focus more on commercial client projects.” Initially, IXICO applied its AI algorithms to data from MRI and PET images. It has also been looking at the application of this digital technology to clinical health/clinical care, as well as to its core neuroscience remit, especially Alzheimer’s disease. The strategic review has slimmed IXICO’s focus to neuroscience, but within that, has widened it beyond Alzheimer’s to the extent that 70% of 2018 revenues came from other neurological therapeutic areas.

The review also identified that the busi-ness had not been growing fast enough. It had spent a lot on innovations, but revenues remained flat at £3-3.1m in 2016-2017, and the company was consuming a lot of cash. Cerroni’s remit on arrival at IXICO was to get the business into growth, and to scale up. A 35-year back-ground in life science businesses such as LGC and ThermoFisher Scientific quali-fied him to identify the path to growth at a smaller company like IXICO.

IXICO has a very good reputation with a number of large pharma companies – going back several years in some cases. The company has blue chip clients, and is a very international as a business, even though its footprint is overwhelmingly UK-based. That has since evolved under Cerroni, whose principal aim from day one was to shift to high-growth business, in the belief that after that, “everything else would follow.”

No Distractions From NeuroscienceThe five-point plan to emerge from Cerro-ni’s office set a range of targets to achieve sustained double-digit growth, and move into profitability: delivering scale and op-erational excellence, penetrating clinical trials markets faster and targeting more early-phase clinical trials, commercial-izing proprietary digital technologies to a wider group of clients, and embarking on selective M&A. And all the while staying focused on neuroscience and not getting distracted by oncology or cardiovascular, etc. His logic was that neuroscience is a £100m opportunity, with plenty of room for growth. “Let’s go after the £100m first, show we can demonstrate traction and win more business faster,” was his view at the time.

Historically, the company has not re-flected too deeply about the potential to leverage the value of its work done with one client to others. But its optimized solutions clearly have added value for the broader market, and so IXICO is now preparing to make more use of such pos-sibilities. Getting patients onto clinical studies is a cost, but once the MRI scan is done, the data is there to be potentially sliced and diced. “Over the past decade, the company has collected a lot of im-ages, but has not properly questioned the value of those as an asset for further use,” said Cerroni. Of course, this needs to be approached in the right way, but the CEO

is excited by the untapped potential of repurposing work done with past pharma clients, for instance. And now digital markers are being added to the mix.

Technology Platforms – Trial Tracker And LEAP Although staff are overwhelmingly UK based, 91% of 2018 revenues came from outside the UK. IXICO’s Trial Tracker technology platform allows the company to obtain images from all over the globe, to anonymize and standardize the data and to apply its proprietary software algo-rithms to do the analysis. The images can be uploaded from a variety of scanners and by operators with differing types of training from all over the world – and all without needing a local infrastructure.

The LEAP (Learning Embeddings for Atlas Propagation) algorithm platform, a licensed-in technology that uses AI to provide a customized anatomical atlas for a given MRI image, has already been used by IXICO to develop new algo-rithms for different parts of the brain. LEAP can measure brain volume both cross-sectionally and longitudinally. With these technologies, IXICO has done work on Huntington’s, Alzheimer’s and Parkinson’s disease, and progressive supranuclear palsy (PSP). In March 2019, it was chosen to provide data analytics and neuroimaging services in an ongo-ing, late-phase clinical research program in Huntington’s disease, an agreement that will generate £0.5m revenues for the company.

“We want to be the go-to people for neurological diseases,” said Cerroni. IXICO’s algorithms monitor for markers that measure the progression of those disease areas.

IXICO’s technology platform helps in:1. selecting the right sort of patient;2. identifying, when they are on a trial, if

a drug has efficacy or not; and 3. helping ensure patients are safe in the

clinical trials (i.e. that any drug safety issues are identified early and man-aged rapidly).MRI is the gold standard for that, and

IXICO has the ability to develop the best software algorithms with its understand-ing of disease contexts. IXICO’s Assessa PML online digital platform, piloted in 2014 together with Biogen Inc., provides

❚RAISING FUNDS

In May 2018, IXICO managed to raise £5.5m in capital. New investors were reacting to the confidence being shown by the company. It has now just delivered a second successive year of over 30% growth (+32% in 2018, to £5.4m), with underlying growth of 41%. Margins rose from 45% in 2016 to 59%in 2018. With op-erating expenses being comparable year-on-year, the productivity per headcount has “hugely improved”. It is striving to both improve the P&L – it is still loss-making – while also looking to build for the long term.

And with several two- to- seven-year contracts being won of late, and £15m of new business announced in 2018, IXICO has a good line of sight of future revenues. “We’re confident we can grow the business at a strong rate in the coming years.”


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neurologists with access to neuroradiol-ogy experts specialized in the differential diagnosis of suspect PML lesions from MRI.

Central Focus On Alzheimer’s Is ChangingSome four to five years ago, a significant proportion of IXICO’s revenues would have come from Alzheimer’s disease. This has proved a difficult area for the pharmaceutical industry, with lots of therapy failures in late stage clinical tri-als. So to reduce the risk to the business, Cerroni has encouraged the company to look at other neurological diseases, and as a result, IXICO’s revenues are much more diversified (see Exhibit 1).

Where it had been dependent on a few, large pharmas – and big pharma still has the lion’s share of IXICO’s revenues and R&D spend – it has latterly attracted a large number of smaller companies, especially biotechs.

Big pharma is likely to take a clinical trial into the next phase, “so if we can get in with the biotechs and show them that our methodology works, then in Phase III, we’d be the partner of choice.” Last September, a new contract for a Phase III trial followed that path. “My desire is to scale the business to do more early Phase I and II studies – basically to do twice as many – and also to be ready for Phase III trials as and when they happen,” said the IXICO chief.

Cerroni considers that IXICO’s momen-

tum has been quicker than he anticipated, and in December 2018, the CEO gave it a further boost by announcing a major restructuring of IXICO’s leadership – in operations, quality and on the commercial side. He has appointed a chief operations officer, Marcus Thornton (SVP of opera-tions) and a chief commercial officer, Ali-son Howe (SVP of sales and marketing). Together, with internal promotions for John Hall (SVP, corporate development) and Robin Wolz (SVP, science and innova-tion), the strengthened leadership team will keep the company growing, and on the look-out for strategic partnerships. A new chief financial officer, Grant Nash, joins IXICO from the UK Biobank, where he was finance director and oversaw the UK Biocentre, on April 29, 2019.

Bigger AmbitionsBut while revenue momentum is good, in three years’ time, even with comparable annual growth, it would still be quite a small company. “We have much bigger ambitions than that, and we recognize that we need to achieve them with part-nerships, in technology, and geographic access.” IXICO has no one on the ground in the US, for instance. But in driving a disciplined, cost-effective model, maybe it has been missing out on the greater opportunity, Cerroni freely admitted. Presenting at meetings and profiling research serves a purpose and is all very well, “but at some stage we have to be

there.” Equally, major opportunities are available in Europe. While Asia is “a couple of years away” yet.

The funds are there for making strate-gic investments for the long term. Both the £5.5 million fund raising (a condi-tional placing of 19.6 million ordinary shares) and the reverse into Phytopharm yielded funds, while the acquisition of Optimal Medicine (November 2015) in the US delivered IP in clinical health markets, but no revenues.

IXICO is interested in wearables too, and is agnostic as to type, as they can they be used in patients that suffer from neurological diseases. The only question that matters to Cerroni is, “Is the data collected useful in providing valuable insights to pharma companies in their clinical trials?”

Evidence At The Heart Of The MatterReal-world evidence (RWE) is becom-ing increasingly important. IXICO did a study with a French sleep clinic on digital markers, in areas such as monitoring sleep patterns. Sleep is a measure of disease progression or as a side effect, and is being increasingly recognised as very important – not just in neurologi-cal diseases. Another digital marker is movement and gait, e.g. in Parkinson’s disease. Wearables are a lot less invasive, and can be used in a person’s own home rather than them having to travel to a clinic. IXICO is now looking at how to play in that space, and how to supple-ment its MRI images with real-world data, and what RWE it can apply its data analytics to.

The regulations for these “emerging technologies” are not so well established, but that is not such a concern for IXICO, which has already been noticed as a “credible partner,” having previously worked in the space. “We’re not just a tech company that’s developed a soft-ware. We understand our clients, their regulatory environment, the regulators and the academic ecosystems, and we can develop software to provide clinically meaningful analytics,” said Cerroni. “It’s what makes us unique.”

The recent funding allows the company to explore collaborations with academics and clinicians to get access to contex-

Exhibit 1IXICO’s Revenues By Disease Area, 2017-2018

SOURCE: IXICO

Alzheimer’s

Huntington’s

Parkinson’s

MS

Schizophrenia

0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6Revenue (£m)


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tualized data and develop proprietary software algorithms for clients. It can design trials that can be done with bio-sensors, rather than sending people to a sleep clinic or other traditional methods.

“Our job is to help pharma and bio-techs develop more drugs, more cost effectively, safer and quicker. And to leverage technology in the insights they bring,“ said Cerroni. “Our real value is in seeing more than they can see, and seeing what it means.” Increasing vol-umes of data are being generated, but the question remains, is it the right data? It’s a question close to the heart of Carla Kriwet, of Philips Healthcare, on the medtech side. For IXICO, medtech is not on its immediate radar. “But our technologies could become interest-ing to the medtech industry.” (Also see “Data, Data, Everywhere, But How Much Of It Makes A Real Difference?” - Scrip, December 11, 2018.)

Adaptive Trials Are The Smart AnswerLooking back, Cerroni said he joined a specialist medical imaging company that provided outsourced services to the pharma industry. Now, IXICO is looking to establish itself as a data analytics company focused on providing technol-ogy services to the pharma, biotech and CRO industry. In another two years’ time, “if pharma wants data analytics in this area, IXICO wants to be the go-to place,” he added.

The company is also part of key consortia too, EPAD (the European Pre-vention of Alzheimer’s Dementia) and AMYPAD (Amyloid Imaging for Preven-tion of Alzheimer’s Dementia) projects, among others. Companies have been trying to succeed in these areas on their own, but this can be very difficult. They increasingly see the need to do adaptive trials, which source drugs from multiple companies if needed, rather than just the one. They aim to establish a more efficient clinical trial design. “We can all learn from each other,” said Cerroni. IXICO has been chosen as the partner to provide imaging services in these projects. “It gets us in front of these companies earlier.”

The adaptive answer is the smartest answer, believes Cerroni, because the pharma industry is very conservative,

historically. With no cures for MS or Al-zheimer’s yet available, there has been a growing realization that people need to do things differently, he said, and one of the key elements here is knowing how to put patients on clinical trials. For instance, at present, candidates would be those already with the disease, “but we need to pick up people who are not showing symptoms – maybe up to 20 years before the symptoms appear.”

So how objective are digital markers? “Very,” according to Cerroni. IXICO has been able to look at images and convert the information into a number. “With digital markers, pharmas are trying to determine if the measure is meaningful, and if there is potential for better mark-ers. You have got to know what you’re measuring; we want to be part of that.”

IXICO has had much success with Hun-tington’s disease, and has built the requi-site therapeutic expertise, which is very important from the pharma sponsor’s point of view. “They’ve got to know that you understand, e.g., MS or Parkinson’s.” And where IXICO has the advantage over digital companies is that the company has built long term relationships, has access to the pharma companies and understands the regulatory environment they operate in.

AI – Flavor Of The Month In Public Circles IXICO already automates a lot of its activ-ity, but there is still a lot of its areas of op-eration that could benefit from AI. “This year, externally, everybody seems to be talking about AI, including the govern-ment. We would argue we’ve been doing it for several years, and we probably take what we do for granted.” He reiterates that IXICO will be putting more resource into the development of software that is AI-based, with machine learning in it, to build new algorithms and extract more data from the data sets it has built over the past 10 years.

He also wants to do more appropri-ate communications of how IXICO uses AI. “It’s not just a fad.” In fact, going forward, given the drive to scale the business, Cerroni admitted that IXICO would have to start spending more on its marketing outreach, in a way that supports its strategy.

IXICO finds itself in a useful space. With pharma realizing that it cannot do everything itself, it is exploiting the contracted-out area. The big vendors are the major CROs, such as ICON and PPD, and IQVIA – which has rebranded as a data company. Rather than a CRO, IXICO sees itself as a potential accelerator – not a competitor. “We can provide them with proprietary technology that differentiates them from their competitors. And they can also be accelerators for us, as they have scale and market reach.”

IXICO has traditionally developed, sold and delivered everything itself, but there is a flaw in this approach. “Our model has been to do it all in-house – research, collaboration, development, the outreach messages … it takes a lot. But you can accelerate growth if you don’t think about doing everything yourself.” The tipping point will arrive for IXICO when it identifies the right partnerships. IXICO’s compound growth rate of 30% will see it get to £10m sales, but not, by itself, to £25m, which Cerroni called the “tipping point.”

A Service Model Based Around PeopleThe tools are now there with the new senior appointments of the past few months. “We need to be fleet of foot and have nimble processes to take advantage of first-mover positioning.” IXICO is de-scribed as a technology service business, not a product or manufacturing business, which means it relies on creating sustain-able technology-led differentiation from its highly-qualified staff. “With values of quality, expertise, innovation and in-tegrity, we have to be seen as the people who will come up with an answer.” In this space, the senior management must feel comfortable recruiting people who are smarter than they are – which is easier said than done, admitted Cerroni.

IXICO has ambitious plans, but along-side that, for 2019, it aims to continue to be a high-growth business that drives ef-ficiencies and increases margins. “We are masters of our own destiny and we want the outside world know we are making the right investments.” IV124234



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Simon Moroney, co-founder and CEO of Munich-based biotech MorphoSys AG has made clear his plans to retire by June 2020. He has been at the helm of MorphoSys since its inception 27 years ago, and believes that the company has now reached a turning point, becoming more competitive and controlling its own destiny, which creates an opportune point to hand the

reins to someone that can lead the company through its next stage of development.In an exclusive interview, New Zealand-born Moroney said he felt it was vital to

ensure the company was in great shape before he took the decision to leave. “It’s in a really strong position; its prospects have never been better. So it feels totally like the right time for me and for the company: from that perspective I feel very good about it.”

The past three years have seen the biotech make moves that will catalyze the next stage of its growth. MorphoSys licensee Janssen Biotech Inc. gained approval in the US and Europe for the plaque psoriasis drug Tremfya (guselkumab), to which MorphoSys will be entitled to royalties; it filed an IPO on the NASDAQ to garner US investment; and it received FDA breakthrough therapy designation for MOR208, its proprietary lymphoma antibody for relapsed or refractory diffuse large B cell lymphoma.

After years of partnering with big pharma such as Roche and Novartis AG, MorphoSys is to commercialize MOR208 itself, potentially from the middle of 2020. This, coupled with the appointment of David Trexler, ex SVP of EMD Serono Inc.’s US oncology com-mercial division, as the new president of the company’s recently founded US subsid-iary, MorphoSys US Inc., show a company gearing up to be commercially more assertive.

“We’d be in the market, up against much bigger companies than us, much more ex-perienced commercial companies, so we understand the magnitude of that challenge,” said Moroney. “We think we’re up for it. There are multiple examples of American

Building A Biotech: Industry Veteran Moroney Reflects

Simon Moroney has led the German antibody technology biotech MorphoSys since 1992. Having taken the decision to retire just as the firm is entering the next phase in its evolution, he explains to In Vivo why the time is right to step back from the business.

BY JO SHORTHOUSE

MorphoSys CEO Simon Moroney is stepping down from his leadership role in 2020, after 27 years at the helm.

After years of partnering with big pharmas such as Roche, Novartis, GSK and Pfizer, MorphoSys is ready to shift gears and commercialize its own asset, starting with cancer therapy MOR208.

The long-standing CEO’s departure represents the biggest shift in the company’s evolution to date, as it enters the world of product commercialization MorphoSys will have to toughen its shell to the highs and lows of a globally competitive industry.


BIOTECH LEADERSHIP ❚invivo.pharm


MORPHOSYS: BIRTH OF A BIOTECH1992

Company founded in Munich, Germany

1999IPO at the Frankfurt Stock Exchange

Start of an extensive partnership with Bayer AG

2001Start of a strategic partnership

with Schering AG

2004Start of a strategic partnership with Novartis

2006Acquisition of Serotec Group further

strengthens the research segment

HuCAL antibodies to combat Alzheimer’s disease are used in clinics

2009MorphoSys signs �rst infectious disease

alliance with Daiichi-Sankyo

2012MorphoSys announces positive

clinical data in rheumatoid arthritis andchronic lymphocytic leukemia

With gantenerumab from Roche,the �rst partnered antibody program

reaches late stage development

2014MorphoSys and Merck Serono enter

strategic immuno-oncology collaboration

MorphoSys and Emergent BioSolutionssign license agreement to co-develop and

commercialize prostate drug candidate

2017Tremfya is approved for plaque psoriasis

in the US, Europe and Canada

MorphoSys receives FDA breakthroughtherapy designation for its proprietary

lymphoma antibody for R/R DLBCL

2018MorphoSys IPO at Nasdaq

1997First commercial partnership with Pharmacia-Upjohn

2000Presentation of the HuCAL antibody library

First HuCAL patent granted

2003Start of a partnership with P�zer

HuCAL antibodies to combat Alzheimer’sproduce positive preclinical results

2005Acquisition of Biogenesis Group strengthens research segment

2007MorphoSys announces development of new antibody platform technology

MorphoSys and Novartis forge one of the industry’s largest pharma-biotech R&D collaborations

2011MOR202 enters clinical development

MorphoSys presents new antibody technology Ylanthia

2013MorphoSys signs license agreement with GlaxoSmithKline for MOR103 program

MorphoSys signs strategic alliance with Celgene for MOR202 program

MorphoSys collaborator Novartis starts pivotal study with bimagrumab

2016MorphoSys licensee Janssen submits an application seeking approval of guselkumab for the treatment of plaque psoriasis in the US and Europe

Cred

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ayle

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companies, mainly, that have done this themselves, so we’re not trying to do anything totally new here, but it will be a new step in the company’s development, there’s no question. We’re preparing for it very actively.”

There will be a rolling submission dur-ing the course of this year to the FDA for MOR208, which will complete by the end of 2019. MorphoSys is hoping for approval by around mid-2020.

Moroney will remain a shareholder and says he is “super excited about what’s coming along,” but concedes that he doesn’t need to be CEO for the next stage of the company’s evolution.

While the commercialization of MOR208 will potentially coincide with his departure, Moroney will retain a strong vested interest in the success of the drug, and the rest of the blossoming pipeline. The company currently has more than 100 programs in total, with 29 of those in clinical development.

“I’m not aware of any other single plat-form in the industry that has been so pro-ductive,” said Moroney. “We’re talking here about a single platform. It helps that we’re in an area – antibodies – which can be widely applied across multiple indications. I would never have imagined at the outset that we could have been so productive.”

A Burgeoning ConcernThe outset that Moroney refers back to was in 1992. He had been working in aca-demic positions at institutions including Cambridge University and Harvard Medi-cal School but had had a taste of industry with a stint at ImmunoGen Inc. working on the first generation of anticancer an-tibody conjugates.

Having realized that publishing and teaching did not hold his interest as they once had, and with the “challenge of building something significant” turn-ing his head, Moroney and his colleague Christian Schneider formed the idea to build a platform technology company.

The pair then approached Andreas Plückthun, an antibody engineer who had made several important breakthroughs in the field. With Plückthun on board, and his technology forming the nucleus of the com-pany, MorphoSys started out with €150,000

in venture capital funding and a pretty big challenge; to build a collection of over one billion different human antibodies as a basis for the development of new drugs.

“We started it as an absolutely trainee start-up with nothing and almost no money and so developing our own drugs to any extent was just not realistic at that time,” said Moroney. In the early 1990s, the platform technology business model was en vogue, he recalled. “At the time, it was frowned upon to try and develop drugs yourself. That sort of heritage is visible in our incredibly broad pipeline, which is so broad because we worked with so many different pharmaceutical companies in the early days.”

Today, the company’s partnership roster is an A-Z of the pharmaceutical industry. Names such as Pfizer Inc., Merck KGAA, GlaxoSmithKline PLC and Bayer AG all make an appearance, using Morpho-Sys proprietary platforms HuCAL and Ylan-thia to discover and develop antibodies.

In the past 27 years the company has changed organically. Essentially starting out as a services business it transformed into a development business which required a big change within the company, both in culture, personnel and in-house expertise, see timeline below. “Now we’re standing at the beginning of the next change,” said Moroney, adding that the company’s focus is on its proprietary programs.

With the long-standing CEO’s depar-ture the biggest shift in the company’s evolution to date, and by treading in commercialization territory, it will have to toughen its shell to the highs and lows of a globally competitive industry.

Recent SetbacksA fresh example is the January US court ruling against MorphoSys in its three-year patent dispute with Danish biotech Gen-mab AS and pharma giant Johnson & Johnson over Darzalex (daratumumab). (Also see “Shaken MorphoSys ‘Assessing Options’ After Losing US Darzalex Patent Ruling” - Scrip, January 28, 2019.) Mo-roney appears surprisingly relaxed when he comments on the patent decision. “Of course we invested in the protection of our IP, but in the end, a court case case is always a bit like a lottery ticket.”

“It was disappointing, obviously. We would have love to have prevailed; we would love to have a royalty on Darzalex. But it wasn’t to be and honestly, it doesn’t really matter for us. We still have patent protection on MOR202, which is the key protection we need.”

In the ruling three US patents were ruled invalid, those patents were only important to MorphoSys in that they may have covered Darzalex and therefore, earned the German biotech a royalty on the blood cancer blockbuster.

Moroney said the company was “caught out a little bit” by a “real tectonic shift in the way patent law is interpreted in the US,” which will affect other com-panies. “That was something that we couldn’t have expected at the time that we launched the suit and it just turned out that way; it’s unfortunate,” he said.

Onwards And UpwardsMoroney is undecided in his next move. He feels he could be helpful as an advisor to European biotechs, but has no solid plans, and will not be starting a new company.

Through his 27 years in the European biotech community Moroney has wit-nessed many a biotech boom and bust. The lack of ambition and belief within smaller European biotechs is sometimes a worry, he said, and he hopes that Mor-phoSys can inspire smaller companies to be competitive on a global scale. “I hope that MorphoSys has acted as a kind of bea-con, a lighthouse if you like, of what other European biotech companies can be like.”

Moroney’s message to inspire small European companies is to be confident: “You don’t have to give your product away early; you can go out and raise sizable amounts of money to do the develop-ment yourself, to hang onto the rights yourself.”

He regrets that there aren’t more large European biotechs, but cites the success of companies such as Galapagos NV, Genmab and Evotec AG as examples to smaller companies to develop drugs themselves, which “is the real way of creating value in this industry.” IV124230



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38 | In Vivo | March 2019

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❚ On the MoveRecent executive appointments in the life sciences industry

❚ RACHELLE JACQUES❚ ROBERT FRIESEN ❚ ELIZABETH VARKI JOBES

COMPANY CHANGES

❚ ROBERT BAIZER

EXECUTIVE TO COMPANY NEW ROLE FROM COMPANY PREVIOUS ROLE EFFECTIVE DATE

August Moretti 4D Molecular Therapeutics

Chief Financial Officer

Assertio Therapeutics

Senior Vice President and Chief Financial Officer

19-Feb-19

Fred Kamal 4D Molecular Therapeutics

Chief Technical Officer and Head, Regulatory and Quality

Avexis Senior Vice President, Quality and Regulatory CMC

19-Feb-19

Markus Dangl Achilles Therapeutics

Chief Scientific Officer

Medigene AG Senior Vice President, Research and Non-clinical Development

12-Feb-19

Raj Pudipeddi Align Technology Inc

Chief Marketing Officer and Senior Vice President

Bharti Airtel Ltd Chief Marketing Officer

11-Feb-19

Jeff Kmetz Ascentage Pharma

Chief Business Officer

Pulse Biosciences Chief Business Officer 14-Feb-19

Robert Greif Atox Bio Chief Commercial Officer

rEVO Biologics Lead, Commercial Operations

14-Feb-19

Peter B. Leone Bicycle Therapeutics Ltd

Chief Business Officer

Arrowhead Pharmaceuticals

Vice President, Strategic Business Initiatives

20-Feb-19

Robert Baizer Biogennix Chief Financial Officer

Veraison Capital Management LLC

Principal 5-Feb-19

Chip Baird bluebird bio Chief Financial Officer

Amicus Therapeutics Inc

Chief Financial Officer 11-Feb-19

Jodie Morrison Cadent Therapeutics

Chief Executive Officer

Keryx Biopharmaceuticals Inc

Interim Chief Executive Officer

14-Feb-19

Andrea DiFabio Codiak Biosciences

Chief Legal Officer Bioverativ Executive Vice President, Chief Legal Officer and Secretary

20-Feb-19

March 2019 | In Vivo | 39

ON THE MOVE ❚invivo.pharm


READ MORE ONLINE

Take an interactive look at recent executive-level company changes and promotions in the biopharma, medical device and diagnostics industries.Visit: invivo.pharmaintelligence.informa.com

COMPANY CHANGES

❚ ALAN KNOX ❚ RYAN LOCOCO ❚ DAVID TREXLER❚ JEFF KMETZ


Elizabeth Varki Jobes

EMD Serono Inc Chief Compliance Officer, North America and Senior Vice President

Spark Therapeutics Inc

Chief Compliance Officer and Legal Counsel

4-Feb-19

Phillip Williams Emergex Vaccines Ltd


Midatech Pharma Principal Scientist 18-Feb-19

Andy Watson Empire Genomics


Genturi Chief Executive Officer 19-Feb-19

Rachelle Jacques

Enzyvant Sciences Ltd


Alexion Senior Vice President, Global Franchise Head, Complement

21-Feb-19

Alexander Hardy Genentech Chief Executive Officer

Roche Head, Global Product Strategy

1-Mar-19

Michael J. Campbell

INVO Bioscience Chief Operating Officer and Vice President, Business Development

Cooper Surgical Inc Vice President, IVF Americas Business Unit

4-Feb-19

Grant Nash IXICO plc Chief Financial Officer

UK Biobank Finance Director 7-Feb-19

Robert Friesen Kiadis Pharma Chief Scientific Officer

Ablynx Chief Scientific Officer 1-Feb-19

Michael K. McGarrity

MDxHealth Chief Executive Officer

Sterilis Medical Chief Executive Officer 19-Feb-19

Roger J. Waltzman

Molecular Templates

Chief Medical Officer

Rgenix Chief Medical Officer 19-Feb-19

David R. Trexler MorphoSys US Inc

President and Director

EMD Serono Senior Vice President, US Oncology Commercial

6-Feb-19

David Henry Myomo Inc Chief Financial Officer

Eos Energy Storage Chief Financial Officer 18-Feb-19

40 | In Vivo | March 2019

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COMPANY CHANGES


Peter Tummino Nimbus Therapeutics


Johnson & Johnson Pharmaceuticals Group

Vice President, Global Head, Lead Discovery

14-Feb-19

Mark Platt Recombinetics Chief Executive Officer

Trane Inc Executive Sales Leader

11-Feb-19

Rick D. Scruggs RedHill Biopharma Ltd

Chief Operating Officer, US

Salix Pharmaceuticals Inc

Executive Vice President, Business Development

20-Feb-19

Patricia Malarkey

Royal DSM NV Chief Innovation Officer

Syngenta Head, Research and Development

15-Mar-19

Tom O’Neil Satsuma Pharmaceuticals Inc

Chief Financial Officer

Protagonist Therapeutics

Chief Financial Officer 20-Feb-19

EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE

Peter Francis 4D Molecular Therapeutics

Chief Medical Officer Vice President, Clinical and Translational R&D and Head, Ophthalmology

19-Feb-19

Theresa Janke 4D Molecular Therapeutics

Chief Operating Officer Senior Vice President, Business Operations and Alliance Management

19-Feb-19

Joao Siffert Abeona Therapeutics Inc

Chief Executive Officer, Chief Medical Officer, Head, Research and Development

Chief Medical Officer, Head, Research and Development

11-Feb-19

Brian R. DiDonato

Achillion Pharmaceuticals Inc

Chief Financial Officer and Senior Vice President

Vice President, Investor Relations and Corporate Communications

11-Feb-19

Anne Marie Law Alexion Pharmaceuticals Inc

Chief Patient and Employee Experience Officer

Executive Vice President, Chief Human Resources Officer

12-Feb-19

Aradhana Sarin Alexion Pharmaceuticals Inc

Chief Strategy and Business Officer

Senior Vice President, Business and Corporate Development

12-Feb-19

Adesh Kaul Basileas Pharmaceutica Ltd

Chief Financial Officer Chief Corporate Development Officer

10-Apr-19

Lee Kalowski Bicycle Therapeutics Ltd

President, US Chief Financial Officer 20-Feb-19

Jason F. Cole bluebird bio Chief Operating and Legal Officer

Chief Legal Officer 11-Feb-19

Jeffrey T. Walsh bluebird bio Chief Strategy Officer Chief Financial and Strategy Officer 11-Feb-19

Belinda Cowling Dynacure SAS Chief Scientific Officer Head, Research 12-Feb-19

Leen Thielemans

Dynacure SAS Chief Development Officer

Head, Development 12-Feb-19

Robert G. Kramer, Sr.

Emergent BioSolutions Inc

President and Chief Executive Officer

President and Chief Operating Officer

1-Apr-19

Fabian Raschke Grunenthal GmbH Chief Financial Officer Head, Group Controlling 1-Feb-19

Jay R. Campbell Immutep Ltd Chief Business Officer Vice President, Business Development and Investor Relations

1-Feb-19

PROMOTIONS

March 2019 | In Vivo | 41

ON THE MOVE ❚invivo.pharm


EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE

Ami Bhatt Caribou Biosciences Scientific Advisory Board Member 12-Feb-19

Cameron Turtle Caribou Biosciences Scientific Advisory Board Member 12-Feb-19

Dean A. Lee Caribou Biosciences Scientific Advisory Board Member 12-Feb-19

Emily Balskus Caribou Biosciences Scientific Advisory Board Member 12-Feb-19

Jeffrey Rathmell Caribou Biosciences Scientific Advisory Board Member 12-Feb-19

Noopur Raje Caribou Biosciences Scientific Advisory Board Member 12-Feb-19

Gerd Schnorrenberg Facio Therapies Scientific Advisory Board Member 11-Feb-19

James P. Allison Hummingbird Bioscience Scientific Advisory Board Member 18-Feb-19

Padmanee Sharma Hummingbird Bioscience Scientific Advisory Board Member 18-Feb-19

Lieping Chen NextCure Inc Chairman, Scientific Advisory Board 12-Feb-19

ADVISORS

PROMOTIONS

EXECUTIVE TO COMPANY NEW ROLE PREVIOUS ROLE EFFECTIVE DATE

Joris Vogels Cassini Technologies BV

Chief Executive Officer Chief Operating Officer 11-Feb-19

William A. Cavanagh

IsoRay Medical Inc Chief Research and Development Officer

Chief Operating Officer and Chief Scientific Officer

12-Feb-19

Ryan Lococo Melinta Therapeutics Inc

Chief Business Officer Vice President, Corporate Development and Strategy

4-Feb-19

Alan Knox Primex Pharmaceuticals Ltd

Chief Executive Officer Head, Global Marketing 5-Feb-19

Sheila Wilson Proteostasis Therapeutics Inc

Chief Operating Officer Vice President, Clinical Operations 5-Feb-19

Ameet Nathwani Sanofi Chief Digital Officer, Chief Medical Officer and Executive Vice President

Chief Medical Officer and Executive Vice President

12-Feb-19

Matthew Henn Seres Therapeutics Inc

Chief Scientific Officer Senior Vice President, Head, Drug Discovery and Bioinformatics

7-Feb-19

Timothy J. Arens Surmodics Inc Chief Financial Officer Interim Chief Financial Officer and Vice President, Corporate Development and Strategy

18-Feb-19

EXECUTIVE TO COMPANY NEW ROLE EFFECTIVE DATE

Robert J. Hugin Allergan plc Director 19-Feb-19

David T. Scadden Editas Medicine Inc Director and Member, Science and Technology Committee 16-Feb-19

Mary Ellen Coe Merck & Co Inc Director 18-Mar-19

Faheem Hasnain Mirati Therapeutics Inc Chairman 15-Feb-19

Alisa Lask Nephros Inc Director 11-Feb-19

Thomas F. Bumol Omeros Corp Director 12-Feb-19

Shuichi Takagi Otsuka Holdings Co Ltd Executive Director 28-Mar-19

Denise M. Morrison Quest Diagnostics Director 18-Feb-19

Vinod Thourani Z-Medica LLC Director 11-Feb-19

DIRECTORS


❚ DEAL-MAKINGin

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Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Deal-Making column is a survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, Pharmaceuticals, and Research, Analytical Equipment and Supplies – and then categorized by type – Acquisition, Alliance, or Financing.

Strategic Transactions is updated daily with in-depth deal analysis, structural and financial terms, and links to SEC-filed contracts.

For information about access please contact Customer Care at 888-670-8900 or [email protected]

�❚ Deal-MakingCovering deals made March 2019

❚ IN VITRO DIAGNOSTICSFinancingsPublic offering nets $7mm for Biocept

Co-Diagnostics nets $5.2mm via RDO

OncoCyte nets $37.5mm through public offering

Opko nets $193mm via convertible debt sale

❚ MEDICAL DEVICESMergers & AcquisitionsEthicon pays $3.4bn in cash for Auris Health

FinancingsCheck-Cap closes $6.96mm registered direct offering

Corindus Vascular Robotics nets $14.8mm via PIPE

❚ PHARMACEUTICALSMergers & AcquisitionsIpsen buys rare disease company Clementia for over $1bn cash plus CVRs

Merck acquires Immune Design for $283mm

Moberg divests OTC business to RoundTable/Signet for $155mm

Roche acquires key gene therapy player Spark Therapeutics for $4.8bn

AlliancesAscletis licenses NASH candidate from 3-V

3SBio enters immuno-oncology collaboration with Verseau Therapeutics

AbbVie gets rights to TeneoBio’s preclinical multiple myeloma compound

AbbVie, Voyager once again partner in CNS diseases

AbCellera signs multi-target mAb discovery agreement with Novartis

ABL develops immune checkpoint bispecifics in deal with WuXi Biologics

Abpro pens $4bn bispecific antibody deal with NJCTTQ

Almirall options European rights to Dermira’s lebrikizumab for up to $1.4bn

Halozyme pens Enhanze deal with argenx

Arrevus gets antibiotic from Melinta

Newly formed Arvelle licenses European rights to SK’s anti-epileptic cenobamate

Bausch & Lomb gets US rights to Eton’s Phase III ophthalmic candidate

Bayer gets exclusive European rights to Moberg’s onychomycosis treatment MOB015

Cullinan Oncology grows pipeline through deal with Taiho

Exicure teams up with Dermelix in potential $1bn rare skin disease deal

Emmaus grants Taiba Endari rights in MENA regions

Eton gets US marketing rights to two Sintetica candidates

Inovio spins out Geneos, grants immunotherapy rights

Merck KGAA partners M7824 immunotherapy with GSK; deal value could hit €3.7bn

Inexia licenses OptiNose’s nasal delivery technologies for neurological disease therapeutics

Accord Healthcare gets exclusive rights to Foresee’s late-stage leuprorelin depot candidate

Morphic, Janssen seek to develop oral integrin therapies

Torque and Merck enter solid tumor trial collaboration

Recordati gets Japanese rights to Aegerion’s Juxtapid

Imbrium, TetraGenetics enter R&D collaboration for biologic therapeutics for pain

Xencor and Genentech to work on IL-15 cytokine therapeutics

Heptares Therapeutics licenses narcolepsy candidates to Inexia

Orexia launched with orexin-positive modulator compounds from Heptares Therapeutics

FinancingsAchaogen nets $14.1mm via FOPO

ADMA Biologics secures up to $72.5mm loan facility from Perceptive Advisors

Public offering nets $56.4mm for Aeglea

Anchiano’s US IPO nets $28.4mm

BioCryst enters into $100mm loan facility with MidCap

BioLineRx nets $14.5mm via sale of ADSs

Catabasis nets $18.8mm via FOPO

EyePoint secures up to $60mm in debt financing

Genocea raises $15mm in first tranche of private placement; could get $24mm more

IPO nets $256.7mm for Gossamer Bio

Harpoon Therapeutics nets $70mm via initial public offering

Dermatology start-up Hoth Therapeutics nets $6.5mm in IPO

Inovio nets $63mm through senior notes offering

Leap Therapeutics nets $12.4mm in public offering

Public offering nets $103mm for MacroGenics

Moberg Pharma gets SEK46mm in financing to support MOB015 development

Ocular Therapeutix nets $37.1mm via convertible debt sale

invivo.pharmaintelligence.inform

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DEAL-MAKING ❚

❚ IN VITRO DIAGNOSTICS

FINANCINGS

BIOCEPT INC.Biocept Inc. (liquid biopsies for cancer) netted $7mm through the public sale of 6.25mm common shares at $1.20. Inves-tors also received five-year warrants to purchase an additional 6.25mm shares at $1.20. Funds will support continued operations and business expansion in-cluding commercial strategy initiatives, completion of a physician portal for a pathology partnership, and the launch of a pharma partnership strategy. (Feb.)Investment Banks/Advisors: Dawson James Securities Inc.; Maxim Group LLC

CO-DIAGNOSTICS INC.Co-Diagnostics Inc. netted $5.2mm through a registered direct offering of 3.9mm common shares at $1.40. The company will use some of the proceeds to continue growing its infectious disease testing and agrigenomics portfolios and further develop and commercialize ap-plications of its technology in the liquid biopsy and next-generation sequencing markets. (Feb.)Investment Banks/Advisors: HC Wain-wright & Co.

ONCOCYTE CORP.OncoCyte Inc. (noninvasive liquid biopsies for cancer) netted $37.5mm through a public offering of 10.7mm common shares (including the overallotment) at $3.75. Proceeds will support commercialization activities surrounding the company’s DetermaVu confirmatory lung cancer di-agnostic. (Feb.)Investment Banks/Advisors: Janney Mont-gomery Scott Inc.; Piper Jaffray & Co.

OPKO HEALTH INC.Diversified healthcare firm Opko Health Inc. netted $193mm (gross $200mm) through the sale of 4.5% convertible senior notes due 2025. The notes convert to common at 236.7424 shares per $1k principal amount, or $4.22 per share. (The company’s stock averaged $3.63 at the time of the placement.) Opko will use some of the proceeds for R&D and com-mercial activities of its pharmaceutical and diagnostics portfolio. (Feb.)

Investment Banks/Advisors: Jefferies & Co. Inc.

❚ MEDICAL DEVICES

MERGERS & ACQUISITIONS

JOHNSON & JOHNSONEthicon Inc.AURIS HEALTH INC.Johnson & Johnson’s Ethicon Inc. sub-sidiary is acquiring Auris Health Inc. for $3.4bn in cash and up to $2.35bn in earn-outs. (Feb.)Auris has developed the FDA-approved Monarch flexible robotic endoscope plat-form, which is indicated for the prevention and treatment of lung cancer lesions via endoscopy and bronchoscopy proce-dures. The company is also developing next-generation robotic interventional technologies. Post-transaction, Auris’ CEO Frederic Moll, MD, will continue employ-ment as part of J&J. Auris is backed by investors including Partner Fund Manage-ment, Wellington Management, D1 Capital Partners, Senator Investment Group, Mithril Capital, Lux Capital, and Viking Global Investors, and raised $733mm through five funding rounds. Its Series E financing three months ago generated $220mm, ranking sixth in In Vivo’s top financings of 2018. The deal allows J&J to accelerate its move into the robotics space and expand its digital surgery portfolio. Just one year ago J&J acquired Orthotaxy, a private French firm providing software-enabled technologies for use in surgical procedures (initially knee replacements).

FINANCINGS

CHECK-CAP LTD.Check-Cap Ltd. (capsule-based screen-ing method for colorectal cancer) netted $6.96mm through a registered direct offering to institutional investors. The company sold 1.88mm units at $2.58, a 20% discount (with each unit comprising one ordinary share and a five-year Series D warrant for 0.5 of an ordinary share exercisable at $2.58) for net proceeds of $4.5mm and also sold 1mm pre-funded units at $2.57 apiece (each containing one pre-funded ordinary share warrant and one Series D warrant) for net of $2.4mm.

Ovid nets $28.2mm in concurrent public offerings

Sienna brings in $18.8mm through FOPO

Stealth BioTherapeutics nets $72.5mm via IPO

Initial public offering nets $80.2mm for TCR2 Therapeutics

Trillium nets $14.1mm through public offering of common and preferred share units

Public offering nets $287.6mm for UltraGenyx

Xeris nets $55.3mm via FOPO

❚ RESEARCH, ANALYTICAL EQUIPMENT & SUPPLIES

Mergers & AcquisitionsDanaher acquires GE Life Sciences’ biopharma business for $21.4bn

FinancingsDanaher plans $2.7bn financings to fund concurrent buy of GE Healthcare Life Sciences’ biopharma business


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Proceeds will support continued develop-ment of the C-Scan low-dose X-ray capsule and associated software system. (Feb.)Investment Banks/Advisors: HC Wain-wright & Co.

CORINDUS VASCULAR ROBOTICS INC.Cardiovascular device maker Corindus Vascular Robotics Inc. netted $14.8mm via private placement of 10.87mm common shares at $1.3796 each (a 5% premium) to a large institutional investor. (Feb.)

❚ PHARMACEUTICALS


IPSENCLEMENTIA PHARMACEUTICALS INC.Ipsen will acquire rare disease drug de-veloper Clementia Pharmaceuticals Inc. for up to $1.3bn, or $1.04bn in cash ($25 per share in cash, a 43% discount) and $6 per share in contingent value rights (CVRs). (Feb.)The deal, Ipsen’s largest acquisition in the company’s history, brings it a late-stage rare disease candidate and helps Ipsen expand its portfolio of ultra-rare disease offerings. Clementia’s key asset palova-rotene is a retinoic acid receptor gamma (RORy) selective agonist in Phase III for fi-brodysplasia ossificans progressiva (FOP), Phase II for multiple osteochondromas (MO), and Phase I for dry eye disease. An NDA with the FDA is expected during the second half of this year for episodic flare-up of FOP, with a potential commercial launch sometime in 2020. CVRs for the acquisition are tied to the FDA’s accep-tance of an NDA for the MO indication on or prior to December 31, 2024. Clementia originally gained palovarotene in 2013 from Roche, which had been developing it for emphysema before shelving the proj-ect and handing it off to Clementia. Ipsen will finance the acquisition of Clementia with existing cash and lines of credit. Investment Banks/Advisors: Centerview Partners LLC (Ipsen); Morgan Stanley & Co. (Clementia Pharmaceuticals Inc.)

MERCK & CO. INC.IMMUNE DESIGN CORP.Merck & Co. Inc. will pay $283mm to ac-quire immunotherapy developer Immune Design Inc. The per share price of $5.85 is a 293% premium to Immune Design’s market average in the ten days prior to the announcement. (Feb.)Immune Design’s pipeline holds early- and mid-stage projects in immuno-oncology and infectious/allergic diseases, de-signed using the company’s GLAAS and ZVex discovery platforms. GLAAS (GLA adjuvant systems) is an intratumoral im-mune activation platform that works in

vivo and is based on the synthetic small molecule GLA (Glucopyranosyl Lipid A). GLA selectively binds to the TLR4 receptor, causing activation of dendritic cells. ZVex uses a first-in-class vector to generate candidates that create cytotoxic T cells in vivo. G100 is Immune Design’s lead GLAAS compound, designed to leverage neoanti-gens; Phase I/II studies are recruiting for follicular non-Hodgkin’s lymphoma. The candidate is the subject of a trial collabo-ration between the company and Merck from 2014, through which the partners agreed to evaluate G100 in combination with Merck’s Keytruda (pembrolizumab) for follicular NHL. The acquisition helps Merck strengthen its cancer vaccine of-ferings and for Immune Design, helps the company rebound from a couple of setbacks, one of which caused the firm’s stock price to fall by nearly half. In early fall of last year, the company’s synovial sarcoma vaccine candidate CMB305 was approaching Phase III trials when results of a separate study with the compound caused Immune Design to halt develop-ment, rocking investor confidence. And then in December, long-time partner Sanofi decided to end a partnership the two had signed in 2014 surrounding the GLAAS platform and potential peanut allergy vaccine development. That deal could have brought in up to $168mm in milestones to Immune Design, which then turned its focus to the development of G100. The acquisition by Merck should give Immune Design the resources needed to effectively focus on lead projects in its pipeline. Investment Banks/Advisors: Credit Suisse Group (Merck & Co. Inc.); Lazard LLC (Immune Design Corp.)

MOBERG PHARMA ABMoberg Pharma North America LLCPrivate investment firms RoundTable Healthcare Partners and Signet Health-care Partners agreed to acquire Moberg Pharma AB’s over-the-counter pharma-ceuticals business and all related assets and liabilities for SEK1.4bn ($155mm) in a transaction expected to close by the end of March 2019. Moberg will use the cash to redeem its outstanding SEK600mm in bonds (due 2021) and to distribute an SEK43–45 per ordinary share dividend to its shareholders. (Feb.)Moberg is establishing a special purpose vehicle named MPJ OTC AB (for ex-US assets), which, along with its US subsid-iary Moberg Pharma North America LLC, will hold the company’s entire global consumer health business sold both directly and through distributors. These OTC brands--which generated sales of SEK431mm--include Kerasal foot mois-turizer; Kerasal Nail and Emtrix/Zanmira (lactic acid/propylene glycol/urea) nail fungus (onychomycosis) treatments; New Skin (benzethonium chloride) liquid

bandages; DermoPlast (benzethonium chloride/benzocaine; acquired from Pres-tige in 2016) for pain and itching relief and infection prevention; and Domeboro (aluminum sulfate tetradecahydrate/cal-cium acetate) topical skin astringent for itching and minor irritations. In a concur-rent financing, the purchasers provided Moberg with SEK46mm (half though the purchase of Moberg newly issued Series B shares and the remaining SEK23mm through a four-year loan), which will sup-port ongoing development of Moberg’s MOB015, a topical formulation of terbin-afine based on OTC fingernail and toenail fungus products Kerasal Nail and Emtrix. MOB015 is currently under evaluation in two Phase III trials in onychomycosis. Pre-vious Phase II studies demonstrated the compound’s delivery of high microgram levels of terbinafine into the nail bed. Topline data for the US Phase III study are expected in late 2019, with corresponding results from the European Phase III trial anticipated in Q2 2020. (Moberg concur-rently signed a license agreement with Bayer, which will commercialize MOB015 in Europe.) Once approved, Moberg esti-mates annual worldwide peak sales for MOB015 to be in the $250-500mm range. Following the divestiture, Moberg Pharma will shift its operations from product sales to focus on R&D, regulatory activities, and business development, mostly related to MOB015, its main pipeline asset. Invest-ment Banks/Advisors: Sawaya Partners LLC (Moberg Pharma AB)

ROCHESPARK THERAPEUTICS INC.Roche acquired publicly traded gene therapy company Spark Therapeutics Inc. for $4.8bn, or $114.50 per share (a 128% premium), including $500mm of projected net cash at closing. Spark will continue to operate as an independent entity. (Feb.)Up until this point, Roche has largely stayed out of the gene therapy area, including CAR-T, with the exception of some smaller deals plus a relatively larger alliance--worth $1.4bn--with SQZ Biotech-nologies in 2018 (focused on engineered antigen-presenting cells). The current transaction puts Roche front and center in the growing field of gene therapies, and also builds on therapy areas such as oph-thalmology, hematology, and neurology, where the Big Pharma has been active. Spark was founded in 2013 around IP from Children’s Hospital of Philadelphia, and in its short history has transformed into a commercial-stage company that brought the first gene therapy for an inherited disease to the market. The FDA approved Luxturna (voretigene neparvovec), a one-time product, in December 2017 for confirmed biallelic RPE65 mutation-as-sociated retinal dystrophy, a rare form of blindness. Approval in the EU followed in

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2018; under a deal signed the same year, Novartis holds exclusive worldwide rights to Luxturna outside of the US. Beyond Luxturna, Spark has a pipeline of gene therapies covering other retinal diseases, as well as hemophilia, lysosomal storage disorders, and neurodegenerative dis-eases. Its next most-advanced candidates are fidanacogene elaparvovec (partnered with Pfizer) and SPK8011 for hemophilia B and A, respectively, both of which should complement Roche’s marketed hemophil-ia A bispecific antibody Hemlibra (Roche and Spark say the alliances with Novartis and Pfizer will be unaffected by the ac-quisition). Spark had $162mm cash on hand at the end of Q3 2018. For FYE 2017, the company reported $12mm in revenue and a net loss of $254mm. Investment Banks/Advisors: Citigroup Inc. (Roche); Centerview Partners LLC; Cowen & Co. LLC (Spark Therapeutics Inc.)

ALLIANCES

3-V BIOSCIENCES INC.ASCLETIS PHARMA INC.Ascletis Pharma Inc. licensed exclusive rights to develop, manufacture, and sell in Greater China 3-V Biosciences Inc.’s Phase II-ready fatty acid synthase inhibitor TVB2640 for nonalcoholic steatohepatitis (NASH). (Feb.)Under terms of the deal, 3-V is eligible for development and sales milestones, plus royalties. Concurrently, Ascletis led 3-V’s $18mm Series E round. TVB2640 (which Ascletis has renamed ASC40) is an orally bioavailable inhibitor of fatty acid synthase (FASN), an enzyme in the de novo lipogenesis pathway that catalyzes the biosynthesis of palmitate; dysregu-lation of FASN is found in multiple liver diseases as well as cancer. The deal is the second in-licensing for Ascletis this year. In January, it gained exclusive rights in China, Hong Kong, Macao, and Taiwan to Alphamab’s KN035 (renamed ASC22) for viral diseases including hepatitis B.

3SBIO INC.VERSEAU THERAPEUTICS INC.Verseau Therapeutics Inc. granted 3SBio Inc. exclusive rights to develop and sell monoclonal antibody immunotherapies for cancer based on Verseau’s macro-phage checkpoint modulator (MCM) drug discovery platform. (Feb.)The licensed rights cover all cancer indi-cations in mainland China, Taiwan, Hong Kong, and Macau. Verseau will lead dis-covery and optimization activities for all projects, and 3SBio will fund and carry out antibody development, GMP manufactur-ing, and commercialization. 3SBio agreed to purchase $15mm of Verseau’s Series B preferred shares, and both parties will be eligible for milestones and royalties. Verseau’s all-human translational system

identifies targets and develops treatments that shift macrophages between immune silencers and activators in disease. Spe-cific cancer targets for the current deal were not revealed. 3Bio’s oncology busi-ness contains treatments for solid and blood cancers including breast, lymphatic, renal, and skin cancers.

ABBVIE INC.TENEOBIO INC.TeneoBio Inc. licensed AbbVie Inc. exclu-sive global rights to develop and commer-cialize preclinical TNB383B for multiple myeloma. (Feb.)AbbVie will pay $90mm up front and Teneo-Bio will develop TNB383B through Phase I, after which AbbVie will take over further development and commercialization and can opt to buy TeneoBio’s TeneoOne sub-sidiary. Should AbbVie acquire TeneoOne, it would pay stockholders regulatory and sales milestones. TNB383B is a B-cell matu-ration antigen (BCMA) antagonist and CD3 agonist designed to direct the body’s own immune system to target and kill BCMA-expressing tumor cells. Clinical trials are expected to commence in H1 2019.

ABBVIE INC.VOYAGER THERAPEUTICS INC.AbbVie Inc. and Voyager Therapeutics Inc. are teaming up to develop vectorized anti-bodies for treating Parkinson’s disease and other conditions involving the abnormal accumulation of misfolded alpha-synuclein protein. (Feb.)Voyager is responsible for R&D activi-ties and preclinical studies on AbbVie-designated antibodies targeting alpha-synuclein. Following preclinical work, AbbVie can choose one or more candidates to move into further development. Voyager will conduct and fund IND-enabling stud-ies and Phase I trials, after which point AbbVie has an option to license exclusive global development and commercializa-tion rights. Voyager gets $65mm up front, $80mm for the first compound AbbVie opts to develop, $30mm each for up to three additional compounds, and $75mm upon AbbVie’s exercise of the license. Voyager is eligible for development and regula-tory milestones of up to $450mm for a Parkinson’s disease candidate, $185mm for a subsequent non-Parkinson’s indica-tion, and $92.5mm for a second indication other than PD. In addition, AbbVie can hand over up to $500mm in commercial milestones, plus tiered escalating sales royalties in the mid-single-digits. The delivery of therapeutic antibodies across the blood-brain barrier has proven chal-lenging. However Voyager has been able to sidestep the problem using its vectorized antibody platform and blood-brain barrier penetrant adeno-associated virus (AAV) capsids that can deliver via intravenous administration the genes that encode for

the production of therapeutic antibodies. This approach can potentially result in higher levels of therapeutic antibodies in the brain compared with current systemic administration. Exactly one year ago, Ab-bVie and Voyager entered into a potential $1.18bn agreement for the development of vectorized tau antibodies for treating neurodegenerative conditions including Alzheimer’s disease, progressive supranu-clear palsy, and frontotemporal dementia. Just last month Voyager penned a potential $1.9bn deal with Neurocrine Biosciences involving the development of up to four Voyager neurological disease candidates.

ABCELLERA BIOLOGICS INC.NOVARTIS AGUnder a multi-year collaboration, AbCelle-ra Biologics Inc. will apply its microfluidic single-cell antibody discovery technology to advance programs on up to ten undis-closed therapeutic targets selected by Novartis AG. (Feb.)Novartis will leverage AbCellera’s ex-pertise in antibody discovery and in exchange provide the biotech with tech-nology access fees, research funding, and future milestone payments, as well as royalties on net sales of any resulting products. The high-throughput single-B cell screening platform combines multiple technologies--including immunizations, microfluidics, high-throughput imaging, genomics, computation, and laboratory automation--enabling access to natural immune responses and rapid isolation of large and diverse panels of high-quality leads. In similar arrangements, AbCellera is using this platform to generate mAbs for other Big Pharma partners, including GSK, Pfizer, and Merck & Co.

ABL BIO CORP.WUXI PHARMATECH INC.WuXi BiologicsWuXi Biologics granted ABL Bio Corp. rights to use its WuXiBody and CD3 dis-covery platforms to research, develop, and commercialize bispecific antibodies target-ing immune checkpoint receptors. (Feb.)The deal is an extension of an exclusive development and clinical manufacturing agreement signed by the pair in late 2018. Under the current arrangement, WuXi gets undisclosed money up front plus up to $220mm in development, regulatory, and sales milestones, as well as royalties on sales of resulting products. WuXiBody enables most monoclonal antibody se-quence pairs to be assembled into bispe-cific constructs, saving 6-18 months of development time and reducing manufac-turing costs. The resulting bispecifics have low immunogenicity, long in vivo half-life, and are highly stable. The agreement will help ABL supplement its existing pipeline of projects in the immuno-oncology and neurology spaces.

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ABPROSINO BIOPHARMACEUTICAL LTD.Nanjing Chia Tai Tianqing

Pharmaceutical Co. Ltd.Abpro and Nanjing Chia Tai Tianqing Pharmaceutical Co. Ltd. (NJCTTQ; a divi-sion of Sino Biopharmaceutical’s Chia Tai Tianqing Pharmaceutical Group Co. Ltd.) will work together to discover and develop bispecific antibodies for cancer using Abpro’s DiversImmune platform. (Feb.)The deal’s $4bn price tag includes $60mm in near-term R&D funding and the remain-der as milestones payable to Abpro, plus royalties on sales of resulting products. NJCTTQ gets rights in China, while Abpro retains rights in the rest of the world outside of China and Thailand. DiversIm-mune is an antibody discovery platform that utilizes three steps--immunization, diversification, and optimization--to generate high-quality antibodies. Abpro and NJCTTQ will focus on bispecific an-tibodies in immuno-oncology, including T-cell engagers; specific targets were not disclosed. Abpro has used DiversIm-mune and its other antibody engineering platform MultiMab to develop a pipeline of drug candidates for solid and blood tumors, as well as a potential ophthalmol-ogy therapy.

ALMIRALL SADERMIRA INC.Almirall SA acquired an option to license exclusive European development and commercialization rights to Dermira Inc.’s interleukin 13 (IL-13) antagonist lebriki-zumab for atopic dermatitis and potential indications in other diseases involving the IL-13 pathway. (Feb.)Lebrikizumab inhibits signaling of the IL-13 cytokine, which is known to play a role in various aspects of the pathophysiology of atopic dermatitis, including the promo-tion of inflammation and mediating the symptoms of the disease on tissue. The mAb was originally licensed to Dermira under a 2017 deal from Roche, which was developing it for respiratory conditions, but discontinued studies after mixed results from a Phase III asthma trial. The candidate is currently in a Phase IIb dose-ranging trial initiated in early 2018 to evaluate three different dosing regimens for moderate-to-severe atopic dermatitis. Almirall will provide a $30mm up-front option fee and a $50mm payment should it decide to exercise the option, which Almirall is eligible to do up to 45 days after receiving topline data from the ongoing Phase IIb study, for which efficacy and safety results are anticipated by April 2019. After the option exercise, Almirall could pay up to $30mm in development milestones (related to the initiation of certain Phase III studies); up to $40mm upon the achievement of regulatory

milestones; up to $45mm upon the first commercial sale of lebrikizumab in the EU; up to $1.25bn in milestones based on the achievement of sales thresholds ranging from $86mm-$3bn within the territory; plus, tiered net sales royalties in the low double-digits to low-twenties (Strategic Transactions assumes 10-23%). Last year Almirall bought Allergan’s US dermatology portfolio for up to $650mm, gaining mostly topical acne, psoriasis, and dermatoses medicines; the current deal boosts Almirall’s pipeline, giving it a potential systemic product.

ARGENX SEHALOZYME THERAPEUTICS INC.Halozyme Therapeutics Inc. has granted argenx SE exclusive access to its Enhanze drug delivery technology to develop multiple subcutaneous formulations for current or future argenx candidates. (Feb.)Argenx will use Enhanze for compounds targeting the human neonatal Fc receptor FcRn, including its lead program efgartigi-mod (ARGX113) plus up to two additional targets. For the access, argenx will pay Halozyme $30mm up front, $10mm per future target, up to $160mm in develop-ment, regulatory, and sales milestones per selected target, plus mid-single-digit sales royalties (Strategic Transactions assumes 4-6%). Enhanze uses a recom-binant human hyaluronidase enzyme to temporarily degrade hyaluronan and help disperse injectable drugs more evenly into the body. The technology improves upon delivery and absorption of subcu-taneously delivered therapies, and can help shorten drug administration time. Efgartigimod is in Phase II for myasthenia gravis and idiopathic thrombocytopenic purpura. Including this deal, Halozyme has nine collaborations for its Enhanze platform, the last partner being Alexion in late 2017.

ARREVUS INC.MELINTA THERAPEUTICS INC.Arrevus Inc. has acquired the oral antibi-otic, fusidic acid, from Melinta Therapeu-tics Inc. (Feb.)Fusidic acid (Taksta, ARV1801) originated at Cempra and got into the hands of Melinta when the two firms merged in 2017. Fusidic acid is effective against gram-positive bacteria, including meth-icillin-resistant Staphylococcus aureus strains (MRSA). Cempra had successfully completed a Phase III trial for acute bac-terial skin and skin structure infections (ABSSSI). Fusidic acid is also in Phase III for refractory bone and joint infection. It has orphan drug status for prosthetic joint infection and also received QIDP designation.

ARVELLE THERAPEUTICS GMBHSK BIOPHARMACEUTICALS CO. LTD.Newly formed Arvelle Therapeutics GmbH licensed exclusive European develop-ment and commercialization rights to SK Biopharmaceuticals Co. Ltd.’s cenobam-ate (YKP3089), a small-molecule anti-epileptic compound. (Feb.)Arvelle will provide $100mm up front, up to $430mm in regulatory and commercial milestones, plus royalties on net sales within the licensed region. SK also has the option to obtain a significant equity stake in Arvelle, which was concurrently spun off from Axovant Sciences, enabling the latter to offload small-molecule programs that had failed in the clinic and shift its focus to a pipeline of gene therapy candidates. (At the time of the spin-off, Arvelle also received commitments from a syndicate of biotechnology investors for a $100mm initial capital raise.) Through the current alliance, Arvelle will take over ongoing development of cenobamate, which is believed to have a dual mechanism of action (positive modulation of GABA-A receptors and inhibition of persistent sodium channels) as an anticonvulsant to both enhance inhibitory currents and decrease excitatory currents. SK’s NDA for cenobamate (filed in November 2018) was accepted by the FDA earlier this month, with a PDUFA date of November 21, 2019. In December 2018, SK announced top-line results of a Phase III, multicenter, open-label safety study of the compound in focal (partial-onset) seizures. (Its Biomed-tracker likelihood of approval rating is 89% (6% above average).) Arvelle plans to file for European approval following the release of data from SK’s global clinical trial program.

BAUSCH HEALTH COMPANIES INC.Bausch & Lomb Inc.ETON PHARMACEUTICALS INC.Bausch Health Companies Inc.’s Bausch & Lomb Inc. acquired US rights to Eton Pharmaceuticals Inc.’s EM100, a Phase III eye drop formulation for allergic con-junctivitis. (Feb.)Bausch paid $500k up front and will shell out up to $2.5mm in commercial mile-stones. Eton is also eligible for a royalty in the low-double-digits (Strategic Trans-actions estimates 10-29%) for ten years following the first sale of EM100 in the US. The royalty rate will be reduced upon certain circumstances. EM100 has been submitted to the FDA for review and, if ap-proved, would be the first available over-the-counter preservative-free eye drop for ocular itching associated with allergic conjunctivitis. Eton chose to partner the candidate with Bausch & Lomb because of its expertise in the ophthalmic space.

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BAYER AGBayer Consumer CareMoberg Pharma AB licensed Bayer Con-sumer Care exclusive European rights to develop and sell its Phase III candidate MOB015 for onychomycosis, a fungal nail infection. (Feb.)Moberg gets €1.5mm ($1.7mm) up front, up to €48.5mm in development, regula-tory and commercialization milestones (weighted in majority on sales targets), plus supply fees including sales royal-ties. The company is responsible for completing the ongoing Phase III trials in the North America and Europe (topline results expected in Q4 2019 and 2020, respectively), European regulatory regis-tration, and suppling the product to Bayer. MOB015 is a topical formulation of the squalene epoxidase inhibitor and steroid sulfatase inhibitor terbinafine. Moberg forecasts that peak annual global sales could reach $250-500mm. Cipher holds Canadian rights under a September 2018 deal. This is not the first time Bayer and Moberg have partnered, however the last time they were in opposite roles. In 2013, Bayer sold three OTC products--Dome-boro, Vanquish, and Fergon--for $5mm. However, since 2015, Moberg has been divesting various OTC assets as it plans to focus on prescription pharmaceuticals.

CULLINAN ONCOLOGY LLCCullinan PearlOTSUKA HOLDINGS CO. LTD.Taiho Pharmaceutical Co. Ltd.Taiho Pharmaceutical Co. Ltd. granted Cullinan Oncology LLC exclusive global rights (excluding Japan) to develop and sell TAS6417 for non-small cell lung can-cer. (Feb.)The candidate will be housed under a new Cullinan division, Cullinan Pearl, which will receive an equity investment from Taiho when Pearl completes its Series A round. Under terms of the deal, Taiho gets money up front, regulatory and sales milestones, and royalties. TAS6417, an orally available tyrosine kinase inhibitor, targets activating mutations in EGFR and was designed by Taiho to inhibit EGFR variants with exon 20 insertion mutations without affecting wild-type EGFR protein. The deal is the second for Cullinan this year; in January it licensed a candidate for EBV-associated cancers from the Wistar Institute. That project will be developed under the Cullinan Apollo unit.

DERMELIX BIOTHERAPEUTICSEXICURE INC.Exicure Inc. and Dermelix Biotherapeu-tics have agreed to collaborate on the discovery and development of a target for Netherton Syndrome (NS) using Exicure’s Spherical Nucleic Acid (SNA) constructs technology. (Feb.)

Dermelix has exclusive worldwide rights to research, develop, and commercialize a targeted therapy for NS (which it has named DMX102) as well as an option to develop five other undisclosed gene regulatory and immunotherapeutic drug targets for rare skin disease indications, using the SNA platform. Exicure gets an up-front pay-ment of $1mm and another $1mm upon the exercise of each of the five options granted to Dermelix. Exicure will conduct early-stage development for each indication up to IND-enabling toxicology studies, after which Dermelix will assume development and commercialization. Exicure is eligible to receive potential payments following the achievement of certain clinical, regulatory, and commercial milestones of approxi-mately $166 million per indication in each of six indications. In addition, Exicure will receive low double-digit royalties (Strategic Transactions assumes 10-29%) on annual net sales for SNA therapeutics developed. A rare autosomal recessive disorder characterized by severely inflamed, red, scaled, itchy skin, NS is caused by muta-tions in the SPINK5 gene, which encodes the serine protease inhibitor LEKTI (plays a role in skin barrier function). Offering an immunomodulatory and antisense gene regulation approach, Exicure’s nanoscale SNAs are constructed in a densely packed, radially oriented arrangement designed to be overly potent and highly targeted for safe and effective delivery into a wide range of cells and tissues. Dermelix was recently funded with a sole focus on rare genetic dermatological conditions; the current deal is intended to build its pipeline within this therapeutic area.

EMMAUS LIFE SCIENCES INC.TAIBA HEALTHCAREEmmaus Life Sciences Inc. granted Taiba Healthcare exclusive rights to market Endari (L-glutamine powder) in certain Middle East and North Africa (MENA) regions. (Feb.)Emmaus is eligible for undisclosed mile-stones and high double-digit royalties on sales in the licensed regions. (Taiba will cover all of its own costs.) Endari is approved for the reduction of acute complications associated with sickle cell disease (SCD) for patients ages five years and older. Emmaus notes that the MENA region is an especially strong market for sickle cell disease therapies, making Taiba an ideal marketing partner.

ETON PHARMACEUTICALS INC.SINTETICA SASintetica SA licensed Eton Pharmaceu-ticals Inc. exclusive rights to market two injectables--ET202 and ET203--in the US hospital setting. (Feb.)For ET202, Eton paid $2mm up front and will shell out another $750k upon FDA approval; the NDA was submitted

in December 2018 and a PDUFA date is expected in Q4 2019. For ET203, Eton paid $1mm up front and will pay another $750k upon FDA approval; the NDA is expected to be submitted by Q3 2019. Sintetica is responsible for all development, manu-facturing, and regulatory activities, and Eton will conduct marketing activities. Sintetica will supply ET202 and ET203 at its direct costs. Eton will retain 5% of net sales as a marketing fee and Sintetica is entitled to receive the first $500k profits for each product. Additional profits will be split on a 50/50 basis. The agreement term is ten years from the first commer-cial sale. Both candidates are ready-to-use injectable formulations that can be immediately administered in patients, thus eliminating the need for additional dilution steps. ET202 and ET203 are for undisclosed indications and Eton believes that they have potential to be two of the highest-volume compounded products in the hospital setting.

GENEOS THERAPEUTICSINOVIO PHARMACEUTICALS INC.Inovio Pharmaceuticals Inc. spun out Geneos Therapeutics and granted the start-up exclusive rights to use its DNA-based immunotherapy platform in the development of neoantigen-targeted cancer treatments. (Feb.)Concurrent with the licensing, Inovio and Sante Ventures funded Geneos with a $10.5mm Series A round, which Geneos will use to establish its operations and complete IND-enabling studies leading to first-in-human trials of an initial tumor spe-cific neoantigen-targeted (TSNA-targeted) personalized immunotherapy. Inovio will continue using its platform to develop and commercialize non-personalized (popula-tion-based) cancer immunotherapies and infectious disease vaccines.

GLAXOSMITHKLINE PLCMERCK KGAAGlaxoSmithKline PLC partnered with Merck KGaA to help develop and com-mercialize Merck’s cancer immunotherapy M7824. The deal could be worth up to €3.7bn ($4.2bn). (Feb.)M7824 (bintrafusp alfa) is a bifunctional fusion protein that simultaneously targets two immuno-suppressive pathways--transforming growth factor-ß (TGF-ß) trap and an anti-programmed cell death ligand-1 (PD-L1)--and is in Phase II for hard-to-treat cancers including non-small cell lung. Eight high-priority studies with the candidate will be underway during 2019. The companies will jointly develop and sell the therapy and have also agreed to share costs and profits equally. Under terms of the deal, GSK pays €300mm up front, development milestones of up to €500mm (triggered by lung cancer trial data), and up to €2.9bn in approval


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and sales milestones. The collaboration further enhances GSK’s cancer offerings, and closely follows its $5.1bn acquisition of Tesaro in December of last year. M7824 has strong potential as a combination therapy, and candidates in Tesaro’s pipe-line could provide GSK and Merck with effective combo opportunities.

INEXIA LTD.OPTINOSE INC.Inexia Ltd. licensed certain rights to Opti-Nose Inc.’s exhalation delivery systems (EDS) and other related intellectual proper-ty for use in its discovery and development of orexin-positive modulator therapies for neurological diseases. (Feb.)Inexia will be responsible for and cover costs of all identification, development, and commercialization activities. For any products resulting, OptiNose receives up to $8mm in development milestones, up to $37mm in sales milestones, plus tiered, low-to-mid-single-digit royalties (Strategic Transactions estimates 1-6%) on net sales. OptiNose’s EDS platform (including delivery devices for both liquid and powder formulations) is designed to enable broad, consistent, bi-directional drug delivery deep in the nasal passages to provide reliable self-dosing with im-proved administration to targeted mucosal surfaces. Recently formed Inexia was spun out of Sosei Heptares to develop intranasal orexin-positive modulators. It concurrently in-licensed from Sosei’s Heptares Thera-peutics subsidiary two orexin-positive modulator compounds (OX1 and OX2), which it is developing for narcolepsy, a rare neurological condition that affects regula-tion of the sleep-wake cycle.

INTAS PHARMACEUTICALS LTD.Accord Healthcare Ltd.FORESEE PHARMACEUTICALS CO. LTD.Foresee Pharmaceuticals Co. Ltd. granted Accord Healthcare Ltd. exclusive rights to sell its leuprorelin depot program FP001 worldwide excluding the US, mainland China, Japan, Taiwan, and already-partnered territories of Israel (where Megapharm has rights) and Turkey and the Middle East (TRPharm). (Feb.)Foresee is eligible for a total of up to $86mm under terms of the deal, including an up-front payment and regulatory/com-mercialization milestones. Accord will also pay royalties and cover commercialization costs in the licensed territory. FP001 is a ready-to-use leuprolide mesylate inject-able suspension in subcutaneous depot formulation, and is in Phase III studies for prostate cancer.

JOHNSON & JOHNSONJanssen Biotech Inc.MORPHIC THERAPEUTIC INC.Morphic Therapeutic Inc. and Janssen Biotech Inc. are teaming up to identify and develop integrin therapeutics for patients having conditions that are not effectively treated with already available

medicines. (Feb.)Both firms will collaborate on development through preclinical studies. Upon comple-tion of IND-enabling studies, Janssen can exercise its option to license exclusive global rights to further develop and com-mercialize the compounds. Janssen will make an undisclosed up-front payment and fund R&D activities. Morphic also stands to receive up to $725mm in development and commercial milestones plus sales royal-ties. The deal will explore the development of oral integrin inhibitors and activators. Pharma companies have successfully created injectable integrin inhibitors, but oral formulations have proven to be more challenging. Just four months ago Morphic teamed up with AbbVie to develop oral integrin candidates for fibrosis-related indications including NASH.

MERCK & CO. INC.TORQUE THERAPEUTICS INC.Torque Therapeutics Inc. and Merck & Co. Inc. entered a trial collaboration agreement to evaluate the combination of Torque’s T-cell therapy TRQ1501 with Merck’s Keytruda (pembrolizumab) for multiple cancers. (Feb.)TRQ1501 was designed with Torque’s Deep-Primed T-cell therapeutics plat-form which uses advanced cell process engineering to prime and activate T cells to target multiple antigens and tether immunostimulatory drugs to the surface of T cells to direct immune activation in the tumor microenvironment. TRQ1501, a Deep IL-15 primed therapy, is in Phase I for solid and blood cancers. Merck’s Keytruda, a PD-1 antagonist, is marketed for a variety of solid and liquid tumors including melanoma, NSCLC, head and neck, lymphoma, Merkel cell carcinoma, colorectal, and other cancers; it is also in almost two dozen trials for additional cancer indications. The partners will run a Phase I/II trial with TRQ1501 and Keytruda to evaluate safety, tolerability, and overall response rates two groups of patients: those with melanoma, NSCLC, bladder cancer, renal cell carcinoma, and head and neck cancers who are relapsed or refractory to checkpoint inhibitors, and advanced or metastatic sarcoma or ovar-ian cancer patients who are relapsed or refractory to stand-of-care options.

NOVELION THERAPEUTICS INC.Aegerion Pharmaceuticals Inc.RECORDATI INDUSTRIA CHIMICA &

FARMACEUTICA SPANovelion Therapeutics Inc.’s subsidiary Aegerion Pharmaceuticals Inc. licensed Recordati Industria Chimica & Farmaceu-tica SPA exclusive rights to commercial-ize its microsomal triglyceride transfer protein inhibitor Juxtapid (lomitapide) in Japan for homozygous familial hypercho-lesterolemia (HFH). (Feb.)

Recordati also has the exclusive right of first negotiation to commercialize Juxtapid in Japan for any new indications developed by Aegerion. Recordati will pay Aegerion $25mm up front, $5mm upon receipt of the Juxtapid Japanese market-ing authorization, and up to $80mm in commercial milestones (payable in increments starting at the end of the first quarter in which net sales in Japan reach $70mm and continuing for each increase in sales of $70mm thereafter, until reaching $700mm). On a quarterly basis, Aegerion will also receive a 22.5% sales royalty. Juxtapid received Japanese approval in September for HFH, a rare genetic disorder that hinders the function of the receptor responsible for removing bad cholesterol from the blood. The drug generated $10.8mm in sales in Japan for 2018. Investment Banks/Advisors: Moelis & Co. (Aegerion Pharmaceuticals Inc.)

PURDUE PHARMA LPImbrium Therapeutics LPTETRAGENETICS INC.Newly created Purdue Pharma LP sub-sidiary Imbrium Therapeutics LP and TetraGenetics Inc. agreed to collaborate on the development of non-opioid biologic therapies for chronic pain, including long-acting therapeutics for a variety of pain conditions. (Feb.)Imbrium will use TetraGenetics’ TetraEx-press antibody discovery technology to speed development of mAbs that target specific ion channels that play a role in pain sensation modulation. Based on the Tetrahymena thermophila protist and its ability to produce unparalleled levels of properly folded and functional recom-binant ion channels, the TetraExpress platform enables high-yield production of recombinant human ion channel pro-teins, with capabilities in both biologics discovery and structure-based design of small molecules. The goal of the partner-ship is to bring new mAb pain candidates to IND-readiness, after which point it ap-pears Imbrium has the option to advance them through clinical trials. In return, TetraGenetics gets $25mm in up-front license fees and FTE payments, milestones up to $248mm, plus royalties. Imbrium was founded as an operating subsidiary of Purdue earlier this year and has a pipeline of four clinical-stage candidates in oncology and insomnia, as well as five preclinical compounds specifically in pain indications, including chronic low back, neuropathic, chemotherapy-induced neuropathic, and bladder.

ROCHEGenentech Inc.XENCOR INC.Xencor Inc. and Roche’s Genentech Inc. agreed to co-develop IL-15 bispecific cytokine therapeutics, a class of immune


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signaling proteins, to which Genentech will hold exclusive worldwide commercial-ization rights. (Feb.)The partners will share development costs as well as profits (at a 45% Xencor/55% Genentech split), with Genentech respon-sible for all launch costs, and Xencor hold-ing a US co-promotion option (Xencor also may opt to convert the profit/cost share to a royalty under certain circumstances). The deal includes Xencor’s preclinical XmAb24306, an IL-15/IL-15Ralpha cyto-kine complex, which was designed using the company’s bispecific Fc domain and Xtend Fc technology. In addition, over a two-year period, Xencor and Genentech plan to research and discover new IL-15 programs developed from Xencor’s cytokine and bispecific Fc technologies and targeting specific immune cell popu-lations. Xencor gets $120mm up front, $160mm in development milestones for XmAb24306, and $180mm in milestones for additional IL-15 candidates ($20mm for each that advance into Phase I). The goal of XmAb technology is to enable full-length antibody properties in a bispecific antibody, while Xtend extends antibody half-life and stability and improves the properties of Fc domains, including rapid antigen clearance, antibody stability, and multiple-antigen specificity (Alexion and Janssen Biotech also have licenses to Xtend). The licensed IL-15 candidates may be combined with Genentech’s immuno-oncology portfolio, possibly their marketed PD-L1 antagonist Tecentriq (Xencor has the rights to conduct clinical studies of combination agents). Xencor and Genentech have been partners since 2004, when Genentech received a license to Xencor’s XmAb technology to develop and market cancer and autoimmune anti-bodies targeting CD20 and Her2.

SOSEI HEPTARES Heptares Therapeutics Ltd.INEXIA LTD.Inexia Ltd. (one of two companies just spun-out of Sosei Heptares) licensed orexin-positive modulator compounds OX1 and OX2 (and a portfolio of related patents) from Sosei subsidiary Heptares Therapeutics. (Feb.)Heptares Therapeutics--which takes an equity stake in Inexia--will receive R&D and pre-defined milestone payments. The deal leverages Heptares Therapeutics’ GPCR structure-based drug design plat-form and GPCR-targeted StaR technology. Inexia will focus on developing OX1 and OX2 as intranasally administered thera-pies using exhalation delivery systems concurrently in-licensed from OptiNose. The first planned indication is narcolepsy, a rare neurological condition that affects the normal sleep-wake cycle caused by depletion of orexin neurons (known to regulate wakefulness and sleep). An orexin-positive modulator is designed to restore orexin levels in the brain and im-prove symptoms. The other Sosei spin-out company, Orexia, also has a license agree-ment with Heptares Therapeutics for OX1 and OX2 and plans to develop oral orexin positive modulator therapies.

SOSEI HEPTARES Heptares Therapeutics Ltd.OREXIA LTD.Sosei Heptares subsidiary Heptares Therapeutics Ltd. licensed orexin-positive modulator compounds OX1 and OX2 (and a portfolio of related patents) to recently launched Orexia Ltd. (one of two new Sosei spin-off companies). (Feb.)Heptares Therapeutics gets an equity stake in Orexia and will also receive R&D and pre-defined milestone payments. Orexia also benefits from Heptares’ GPCR structure-based drug design platform and

GPCR-targeted StaR technology. Orexia aims to develop OX1 and OX2 as orally administered therapies for CNS diseases, including narcolepsy, a rare neurological condition that affects the ability to control the sleep-wake cycle, linked to the loss of orexin neurons, which regulate that cycle. An orexin-positive modulator helps restore orexin levels in the brain thus im-proving narcolepsy symptoms. The other Sosei spin-out company, Inexia, also has a license agreement with Heptares Therapeutics for OX1 and OX2 and plans to develop intranasally administered orexin-positive modulator therapies.

FINANCINGS

ACHAOGEN INC.Achaogen Inc. (antibacterials aimed at multi-drug resistant gram-negative infec-tions) netted $14.1mm through the follow-on offering of 15mm common shares at $1 each. The company also issued one-year Series A warrants to purchase up to 15mm common shares at an exercise price of $1, and five-year Series B warrants to buy 15mm shares exercisable at $1.15 each. Achaogen will use the funds to com-mercialize Zemdri (plazomicin) in the US for adults with complicated urinary tract infections (cUTIs), to gain approval for plazomicin in Europe, and for ongoing development of the early-stage antibiotic C-Scape for cUTIs. (Feb.)Investment Banks/Advisors: HC Wain-wright & Co.

ADMA BIOLOGICS INC.ADMA Biologics Inc. (plasma-based bio-logics for treating primary immune defi-ciency and infectious diseases) secured a two-tranche senior secured term loan facility from Perceptive Advisors for up to $72.5mm. The first tranche of $45mm will be used to prepay a former senior se-

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cured credit facility. The second $27.5mm tranche is contingent upon FDA of either the Bivigam prior approval supplement or the RI002 BLA (both are for immuno-deficiencies) and is available at ADMA’s election through June 30, 2020, with a minimum draw down of $10mm. The loan bears interest at a rate of 7.5% per annum plus the greater of one-month LIBOR and 3.5% and has an interest-only term with a maturity date of March 1, 2022. ADMA also issued Perceptive Advisors a ten-year warrant to purchase 1.36mm common shares. The funds will help ADMA with manufacturing activities and to prepare to commercialize Bivigam and RI002 later this year. (Feb.)

AEGLEA BIOTHERAPEUTICS INC.Aeglea BioTherapeutics Inc. (developing engineered human enzyme therapies for rare diseases and cancer) netted $56.4mm through its latest public offering. The company sold 3.5mm common shares at $8 and pre-funded warrants to purchase 4mm common at $7.9999. Proceeds will support advancement of lead candidate pegzilarginase (AEB1102) through Phase III pivotal and extension trials in arginase 1 deficiency, plus an ongoing combination trial for cancer. (Feb.)Investment Banks/Advisors: Evercore Partners; HC Wainwright & Co.; JP Morgan Chase & Co.

ANCHIANO THERAPEUTICS INC.Anchiano Therapeutics Inc. (develop-ing gene therapies for cancer) netted $28.4mm through an initial public offer-ing of its American Depositary Shares in the US. The company sold 2.65mm ADSs (representing 13mm ordinary shares) at $11.50 per ADS. (Feb.)Investment Banks/Advisors: Ladenburg Thalmann & Co. Inc.; LifeSci Capital LLC; Oppenheimer & Co. Inc.

BIOCRYST PHARMACEUTICALS INC.BioCryst Pharmaceuticals Inc. (develop-ing oral small-molecule therapies that block key enzymes involved in rare diseas-es) entered into a $100mm secured loan facility with MidCap Financial Trust. The fa-cility bears a variable interest rate (LIBOR + 8%) with a LIBOR floor of 0.5%, has an interest-only payment period through June 2020, and includes straight-line principal payments for 30 months commencing on July 1, 2020. The agreement replaces an existing $30mm secured loan facility with MidCap, provides $20mm of immediate additional non-dilutive capital, and Bio-Cryst can draw down $50mm at its option ($30mm following positive data from the APeX-2 trial for BCX7353 in hereditary an-gioedema, and $20mm upon FDA approval of the therapy). BioCryst plans to file an NDA for BCX7353 by the end of 2019. (Feb.)

BIOLINERX LTD.Cancer-focused BioLineRx Ltd. netted $14.5mm through the public sale of 28mm American Depositary Shares (each ADS represents one ordinary share) at $0.55. The company also issued five-year war-rants to buy another 28mm ADSs exercis-able at $0.75 each. (Feb.)Investment Banks/Advisors: Maxim Group LLC; Oppenheimer & Co. Inc.

CATABASIS PHARMACEUTICALS INC.Catabasis Pharmaceuticals Inc. (lead program is Phase III edasalonexent for Duchenne muscular dystrophy) netted $18.8mm through the follow-on public offering of 4mm units at $5. Each unit consists of one common share and 0.5 of a five-year warrant to purchase one share at an exercise price of $6.25 per share. The company will use some of the proceeds for R&D and manufacturing activities. (Feb.)Investment Banks/Advisors: Oppen-heimer & Co. Inc.

EYEPOINT PHARMACEUTICALS INC.EyePoint Pharmaceuticals Inc. secured a $60mm five-year interest-only debt facility with CR Group. EyePoint drew $35mm up front. It can borrow another $15mm prior to June 30, 2019, and $10mm on or before March 31, 2020 upon attaining sales mile-stones from its Yutiq for non-infectious posterior segment uveitis and Dexycu for cataracts and ocular inflammation. Eye-Point will use $23mm to repay principal, prepayment fees, and other costs associ-ated with the secured term loan obtained from SWK Funding in connection with the March 2018 merger of pSivida and Icon Biosciences to create EyePoint. Additional money will support the launches of Yutiq and Dexycu. (Feb.)

GENOCEA BIOSCIENCES INC.Genocea Biosciences Inc. (targeted cancer vaccines and immunotherapies) com-menced a private placement that could reach $39mm. In the first tranche, the company sold 25.6mm common shares at $0.5026 (a 7% discount) and issued five-year warrants to buy 7.46mm common at $0.5656 for gross proceeds of $12.8mm. One investor in the financing also bought a pre-funded warrant to purchase 4.25mm common shares at the offering price, along with the accompanying common stock warrants, for gross proceeds of $2.1mm. (Feb.)Investment Banks/Advisors: Cantor Fitzger-ald & Co.; HC Wainwright & Co.; Needham & Co. Inc.; Robert W. Baird & Co. Inc.

GOSSAMER BIO INC.Gossamer Bio Inc. (developing therapies for immune diseases, inflammation, and cancer) netted $256.7mm through its initial public offering of 17.25mm common shares at $16. The company had originally

intended to sell 14mm shares. (Feb.)Investment Banks/Advisors: Bank of America Merrill Lynch; Barclays Bank PLC; Evercore Partners; Leerink Partners LLC

HARPOON THERAPEUTICS INC.Harpoon Therapeutics Inc. (cancer immu-notherapies) completed its initial public offering, netted $70mm through the sale of 5.4mm common shares at $14 (the mid-point of its intended $13-15 range). (Feb.)Investment Banks/Advisors: Canaccord Genuity Inc.; Citigroup Inc.; Leerink Part-ners LLC; Wedbush PacGrow Life Sciences

HOTH THERAPEUTICS INC.Hoth Therapeutics Inc. (technology that creates a topical agent from existing therapeutics to treat skin diseases) net-ted $6.5mm in an initial public offering of 1.25mm shares at $5.60. The company had planned to offer 1.75mm shares at a $5.50-6.50 range. (Feb.)Investment Banks/Advisors: Benchmark Co. LLC; Laidlaw & Co.

INOVIO PHARMACEUTICALS INC.Inovio Pharmaceuticals Inc. (immuno-therapies for cancer and infectious dis-eases) netted $63mm through a private offering of $65mm principal amount of its 6.5% senior notes. The notes convert to common at 185.8045 shares per $1k principal amount, or $5.38 per share. (The company’s stock was averaging $4.78 at the time.) Proceeds will support trial and R&D expenses, and working capital. (Feb.)

LEAP THERAPEUTICS INC.Leap Therapeutics Inc. (immuno-oncolo-gy) netted $12.4mm through a public of-fering of 7.5mm common shares (including the overallotment) at $1.75. Investors also received seven-year warrants to purchase another 6.57mm shares at $1.95. Money will support general corporate needs including new trials for DKN01 (gastro-esophageal, hepatobiliary, gynecologic, and prostate cancers) and TRX518 (solid tumors). (Feb.)Investment Banks/Advisors: Ladenburg Thalmann & Co. Inc.; Raymond James & Associates Inc.

MACROGENICS INC.MacroGenics Inc. (antibody-based thera-pies for autoimmune and infectious diseases and cancer) netted $103.4mm through a public offering of 5.5mm common shares at $20. Proceeds will support activities leading to the US regulatory approval and commercializa-tion of margetuximab, in Phase III for metastatic breast cancer (also in Phase II for advanced gastric cancer); late-stage development of enoblituzumab for B7-H3 positive cancers, including head and neck and NSCLC; and other development initiatives. (Feb.)


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Investment Banks/Advisors: BTIG LLC; Credit Suisse Group; Evercore Partners; HC Wainwright & Co.; Leerink Partners LLC; Nomura Securities International Inc.; Stifel Nicolaus & Co. Inc.; SunTrust Banks Inc.

MOBERG PHARMA ABConcurrent with Moberg Pharma AB’s divestiture of its over-the-counter phar-maceuticals business to private invest-ment firms RoundTable Healthcare Partners and Signet Healthcare Partners, the company received from RoundTable and Signet an investment of SEK46mm ($5mm): half through the purchase of Moberg newly issued Series B shares at SEK35.16 apiece (a 30% discount), plus 659k warrants at a subscription price of SEK35.16 per ordinary share, and the remaining SEK46mm through a four-year loan that will accrue PIK interest at a rate of three months LIBOR + 5.50%. If Moberg receives from existing partners milestone, royalty, or any other payments exceeding SEK92mm prior to loan maturity, it will put those excess funds toward repaying the loan. The financing will support ongoing development of Moberg’s MOB015, a topi-cal formulation of terbinafine in Phase III for onychomycosis. Following the selling off of the OTC unit, Moberg is now focused on R&D and pipeline development. (Feb.)

OCULAR THERAPEUTIX INC.Ocular Therapeutix Inc. (developer of the first-of-its-kind ReSure sealant for sealing clear corneal incisions following cataract surgery) netted $37.1mm (gross $37.5mm) through the sale of 6% subordinated con-vertible notes due 2026. The initial conver-sion rate will be 153.8462 Ocular common shares per $1k principal amount of notes, or $6.50 per share. (The company’s stock averaged $3.64 at the time of sale.) Ocular will use the proceeds to advance its late-stage candidates and launch Dextenza for pain following ophthalmic surgery. (Feb.)Investment Banks/Advisors: Piper Jaffray & Co.

OVID THERAPEUTICS INC.Rare neurological disease-focused Ovid Therapeutics Inc. netted an aggregate $28.2mm though a public offering of 12.5mm common shares at $2.00 ($23.5mm net) and a concurrent public offering of 2.5k Series A preferred shares at $2k ($4.7mm net). Each share of Se-ries A preferred stock is convertible into 1k shares of common at $2k apiece. The company will use the proceeds to advance lead candidate OV101, a selective delta GABA A agonist for Angelman and Fragile X syndromes, into Phase III and support further development of OV935--a CH24H inhibitor in development with Takeda for rare developmental and epileptic encephalopathies, including Dravet and

Lennox-Gastaut syndromes--for which Ovid late last year reported positive safety and tolerability results following a Phase Ib/IIa trial. (Feb.)Investment Banks/Advisors: Cowen & Co. LLC; JMP Securities LLC; Ladenburg Thalmann & Co. Inc.; William Blair & Co.

SIENNA BIOPHARMACEUTICALS INC.In a follow-on offering, Sienna Biophar-maceuticals Inc. (targeted topical delivery technology for aesthetic- and dermatology indications) netted $18.8mm through the sale of 8mm shares at $2.50. The company, which went public in 2017, reported late last year top line results from a Phase IIb study in psoriasis (with pruritus as a second-ary endpoint) for lead candidate SNA120 (pegcantratinib), a topical TrkA inhibitor. The proceeds from the offering will help fund a Phase III trial of SNA120 in psoriasis anticipated to begin in 2H 2019. (Feb.)Investment Banks/Advisors: BMO Finan-cial Group; Cowen & Co. LLC

STEALTH BIOTHERAPEUTICS CORP.Stealth BioTherapeutics Corp. (devel-oping therapies for diseases involving mitochondrial dysfunction) netted $72.5mm through the initial public of-fering of 6.5mm American Depositary Shares (each ADS represents 12 ordinary shares) at $12 each. (Feb.)Investment Banks/Advisors: BMO Finan-cial Group; Evercore Partners; Jefferies & Co. Inc.; Nomura Securities Interna-tional Inc.

TCR2 THERAPEUTICS INC.Immuno-oncology firm TCR2 Therapeutics Inc. netted $80.2mm through its initial public offering of 5.75mm common shares (including the overallotment) at $15, the mid-point of the company’s $14-16 in-tended range. (Feb.)Investment Banks/Advisors: BMO Finan-cial Group; China Renaissance; Jefferies & Co. Inc.; Leerink Partners LLC; Wedbush PacGrow Life Sciences

TRILLIUM THERAPEUTICS INC.Trillium Therapeutics Inc. (immuno-on-cology) netted $14.1mm through a public offering of its common and preferred shares. The company sold 6.5mm common share units at $0.80 (each unit consisted of one common share and a five-year com-mon share purchase warrant exercisable at $0.96), and also sold 12.2mm Series II non-voting convertible first preferred share units (each containing one Series II non-voting convertible first preferred share and a five-year warrant for one Series II first preferred share at $0.96). A portion of the proceeds will support on-going development of the SIRPaFc fusion protein program including lead candidate TTI621, in Phase I for blood and solid cancers. (Feb.)

ULTRAGENYX PHARMACEUTICAL INC.UltraGenyx Pharmaceutical Inc. netted $287.6mm through a public offering of 5.1mm common shares at $60. Proceeds will support R&D, launch preparation, and commercialization of the company’s pipeline of gene therapies for rare and ultra-rare genetic diseases including tumor-induced osteomalacia, long-chain fatty acid oxidation disorders, ornithine transcarbamylase deficiency, and glyco-gen storage disease type 1a. (Feb.)Investment Banks/Advisors: Bank of America Merrill Lynch; Cowen & Co. LLC; Goldman Sachs & Co.; JP Morgan Chase & Co.

XERIS PHARMACEUTICALS INC.In its first financing since going public last year, drug delivery firm Xeris Phar-maceuticals Inc. netted $55.3mm through a follow-on public offering of 5.88mm common shares at $10 each. The company will use some of the proceeds to fund com-mercial activities for its Gvoke HypoPen, which delivers ready-to-use glucagon via an auto-injector to treat hypoglycemia; Phase III trials of the glucagon HypoPen for Europe in post-bariatric hypoglycemia and congenital hyperinsulinism; Phase II trials in hypoglycemia-associated autonomic failure and exercise-induced hypoglycemia; and preclinical and clinical studies for ready-to-use diazepam and pramlintide-insulin. (Feb.)Investment Banks/Advisors: Jefferies & Co. Inc.; Mizuho Bank Ltd.; RBC Capital Markets; SVB Financial Group

❚ RESEARCH, ANALYTICAL EQUIPMENT & SUPPLIES


DANAHER CORP.GENERAL ELECTRIC CO.GE Healthcare Life SciencesDanaher Corp. agreed to acquire the bio-pharma business (instruments, consum-ables, and software supporting research, discovery, process development, and manufacturing workflows of biopharma-ceutical drugs, vaccines, and cell thera-pies) of GE Healthcare’s GE Healthcare Life Sciences division for $21.4bn ($21bn in cash and $400mm for the assumption of pension liabilities), or about 17 times the biopharma unit’s expected 2019 EBITDA. (Feb.)The transaction is projected to close dur-ing Q4 2019 and Danaher expects to real-ize a cost savings of $100mm-plus by year three. The divested biopharma business line--which had 2018 revenues of $3bn, around 15% of GE Healthcare’s total rev-enue, and is expected to generate $3.2bn in revenue this year--mostly includes pro-

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cess chromatography hardware and con-sumables, cell culture media, single-use technologies, development instrumenta-tion and consumables, and services. (The second business line of the Life Sciences segment, the pharmaceutical diagnostics business, consisting of contrast media, molecular imaging agents, and related consumables, is excluded from the deal and will remain under the GE Healthcare umbrella.) Danaher will fund the purchase through a combination of concurrent public offerings of an aggregate $2.7bn ($1.35bn of shares of common stock and $1.35 billion of shares of Series A manda-tory convertible preferred stock); cash (as of December 31, 2018, it had $788mm in cash on hand); and the issuance of new debt and/or credit facilities. The biopharma line will provide technologies and solutions, applications, products, and services (as well as an experienced team) complementary to current offerings in Da-naher’s own life sciences unit. In addition, the biopharma unit gives Danaher a cell therapy and analysis portfolio including an end-to-end (from development through commercialization) bioprocessing and manufacturing platform. Danaher will establish the GE biopharma business as a stand-alone company within its existing life sciences segment, which includes pre-viously acquired IDT (2018), Phenomenex (2016), Pall (2015), Beckman Coulter Life Sciences (2011), SCIEX/Molecular Devices (2009), and Leica Microsystems. Per its new CEO H. Lawrence Culp (previously chief at Danaher, who took the GE helm in October 2018), GE had reiterated its plans announced in June 2018 to spin off GE Healthcare as an independent com-pany via an IPO, but in light of the current deal--which will enable GE to reduce debt and focus its portfolio to maximize share-holder value--it appears GE may now likely rethink its former strategy. Investment Banks/Advisors: Citigroup Inc.; Goldman Sachs & Co.; JP Morgan & Co.; PJT Partners (General Electric Co.)

FINANCINGS

DANAHER CORP.To support its simultaneous proposed acquisition of GE Healthcare Life Sciences’ biopharma business for $21.4bn, Danaher Corp. is planning concurrent public offer-ings for an aggregate $2.7bn ($1.35bn in shares of common stock and $1.35bn in shares of Series A mandatory convertible preferred stock (each share of which is expected to have a liquidation preference of $1k). (Feb.)Investment Banks/Advisors: Barclays Bank PLC; Credit Suisse Group; Goldman Sachs & Co.; HSBC

march 2019 vol. 37 no. 03 pharma intelligence · david lee, partner at simon-kucher & partners,...

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