Big Idea 2015: Haute Apothicaire

There are medicines & then there is Haute Apothicaire

From what’s written on the wall, 2015 could well be the year when good old medicine finally goes designer chic. Even if not for the masses just yet, a privileged few could soon have their meds custom made to match their genes - well, just as soon as the fitting trials are done & the master says aye!

For those who didn't quite get my pun, I am indeed talking about personalized medicine going mainstream in 2015 - From Novartis making the first move to bring protocol to patient through its series of #SIGNATURE trials & JnJ opening up its clinical data vaults to Yale for open research to #Google #Calico aiming to tackleageing through big data & bigger collaborations, it's clear there's this huge trend of big pharma going all guns blazing after the alluring promise of personalized medicine.

This alliance with big data is in some way an existential manoeuvre by big pharma poised precariously on the patent-cliff & thus most initial approvals of designer drugs would be those that have been pulled up from the gorges of failed/failing PII/ PIII trials. Either which way, there is no doubt that the best use of cutting-edge drug design capability is only when it is coupled with the invaluable human genomic & proteomic data decoded in the past decade and using the #bigdata analytics to throw up the statistically best therapeutic match for an individual patient.

If one goes by the regularity with which FDA has been approving companion diagnostics and genetic tests over past few years; the apparent merit they see in the label of an approved drug referencing the genomic biomarker(s) & the pragmatic use of conditional approvals such as the recent one for Translarna by the EMA, it appears the regulators too are in sync with this new reality & have been gearing upto deal with the potential multitudes of personalized therapeutic applications & evolve an approval mechanism that's applicable despite the indication not being orphan enough.

Even as connoisseurs may not quite like it, high fashion attains scale only when it goes mainstream & by analogy the designer drugs too would find their way to the masses eventually, I only hope sooner & safer.

#BigIdeas2015 #Google #Calico #Bigdata

Les Propheties Pharmaceuticale : Prophesying on where the pharmaceutical outsourcing is headed

It is either an after-effect of all that powwow with the old-worldly Chippewa (the ‘real-Indians’, who aren’t Indian really ;-)) in the round house OR, it’s the paradoxical audacity stemming from my ironic inability to predict my own future!! - Either way…….,

......I have this compelling urge to play an oracle for once & mouth some prophecies!

My prophesying though is limited to pharmaceutical manufacture, outsourcing & is inspired by what’s going on right now all around in the pharmaceutical industry. While on first-look most of the recent happenings appear to be standalone in nature, there is a tangible pattern that isn’t too tough to decipher. My attempt is merely to speculate on what this pattern means for pharmaceutical manufacturing scenario, a few years from now, albeit a little prophetically.

Listed below are a some of my observations, statements & surmises (not still prophecies....), in no particular order, based on a handful but trend-indicative news alerts that I received over the past two weeks;

• Big pharma shutting-down small molecule manufacturing sites but investing in Biologics facilities - Merck, Pfizer, Novartis, AstraZeneca etc in shutting-down mode & Roche, Genzyme (Sanofi) et al in investment spree

• CMOs & Pharma companies scramble to strengthen ADC manufacturing capabilities in an apparent response to the visible thrust by drug developers to biologify (sic) unsuccessful small molecule candidates as ADCs & reposition them as targeted therapy candidates - SAFC, Lonza & Roche strengthening ADC capacities

• Indications that compulsory license issuance in developing countries is driven more by ‘access to cost-effective first-line therapies’ than ‘access to later-generation therapies’  - Indian Patent office Upholding CL for Imatinib & rejecting CL application for Dasatinib

• Federal complicity (vis-à-vis’ regulatory) with the innovator belief that biosimilar is an Oxymoron – The recent passage of SB-598 bill constraining use of biosimilars by State of California

• Regulators mellowing, but playing-safe with approval of biosimilars? - The first ever biosimilar approval by EMEA is for Remicade (infliximab) indicated in the ‘relatively non-fatal” auto-immune disorders

• Geographical re-alignment and consolidation of biosimilar manufacturing assets - Dr. Reddy’s  signing a deal for getting it’s biosimilars manufactured & marketed within the USA by Merck-Serono; Lonza’s scrapping of biosimilar venture with Teva and it’s going slow on India expansion; DSM launching a large-scale biosimilar facility in Australia et al

• The increased focus of Big-pharma on having a lean & integrated supply chain for their off-patent assets – As indicated by the on-going race of backward-integration by formulation CMOs & forward integration by API CMOs

• Drug Discovery & Development (primarily chemistry, biology & clinical) service providers progressively getting consolidated within NA, EU with clinical development centers in low-cost countries – As indicated by the flurry of activity each passing day

• Clinical API synthesis tending to be retained within the shores by the partly to de-risk late-stage regulatory risks & mostly to engage residual in-house R&D facilities – As indicated by the outsourcing strategy adopted by most Big & Mid-sized pharma

• Spurred-on by increasing regulatory wariness, high focus by the outsourcer' on ensuring supply chain integrity for key Intermediates and starting material for both marketed as well as developmental drugs – As indicated by the uncharacteristically massive press-coverage of  WuXi successfully facing a FDA pre-approval inspection for the ‘Intermediate’ of a new drug under review for approval

While the observations tell a story of their own, here’s my promised prophecy in the form of three quatrains, which very unlike the good old Nos’, I went about decoding myself – so much for my quest to be understood in my lifetime!

Quatrain 1

Decoded:

The Indian &/or Chinese CMO/ CDMO/ CROs will see the outsourcing getting limited to;

·        Manufacture of generic, low-tech (applicable to DP) small molecule, high volume & predominantly disease-maintenance/ management therapeutics (as against curative therapeutics)

·        Manufacture of (ideally integrated) potent, cytotoxic therapeutics    

·        Non-GMP/ GMP manufacture of key intermediates requiring large capacities/ ~ economies of scale of both patent-case & generic APIs for big/ mid-sized pharma

·        Large-scale manufacture of OTCs & Medicinal Products (components of med devices)

·        Early development (preclinical through PIII) of investigational drugs belonging to small/ mid & big-pharma (since this stage demands a lean-cost model)

·        Late-stage development (leading to NDA) of investigational drugs for small/ virtual biotechs

Quatrain 2

Decoded:

The North American, European CMO/ CDMO/ CROs will see the consolidation of the following opportunities in their favor;

·        Manufacture of Biologics, Biosimilars(authorized?)  

·        Manufacture of high-tech, specialty small-molecule APIs (ADCs, PDCs et al); formulations & devices

·        Late-stage development (leading to NDA) of investigational drugs for Mid & Large-sized pharma

·        Integrated Drug-discovery, development for Big pharma

Quatrain 3

Decoded:

Finally & a tad controversially – the Indian pharmaceutical players (& probably Chinese too) in general will aggressively pursue;

·        Compulsory licensing opportunities for the first-line therapies of small-molecule drugs for the NON-orphan disease segments

·        Biosimilar/ biogeneric development (for potential global alliances) and for eventual direct commercialization (with likely alliances again..) within India – with emphasis on curative biologics for non-fatal disease segments not addressed by small-molecule therapeutics    

As is evident, this list of predictions is by no means exhaustive & is only a brief compilation based on some core-opportunity types focused on within the outsourcing domain.

I know Nostradamus has more detractors than believers, so go ahead and flame me, I’m all game! ............ Only, make sure your rebuttals are in Quatrains too…., Just kidding :-)

    

Isn't re-coding the organizational DNA viable only for smaller set-ups?

Bruce Booth makes some really radical suggestions to altering the way a big-pharma R&D set-up could work, primarily by way of re-coding the organizational DNA - the optimist in me loves the game-changing propositions, but the cynic in me fears a big-pharma is way too big to present itself to re-coding..... 

My comment:

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However long-term, I feel the inversion of periphery into core is something that sounds too Utopian for any block-buster-strapped-big-pharma-headed-by-a-recently-appointed-turnaround-artiste to consider doing - Laying off scientists & shutting down sites, though a lot messier, is much quicker and in corporate speak, efficient!

Having said that, I do believe this inversion is indeed happening in some fashion as the disruptive model of shutting down big-pharma R&D sites does release hell a lot of under-utilized scientific talent that in many cases ends-up getting far more productive by reinventing themselves as 'Out-sourced drug developer' and/ or 'Spin-off Biotech' each class of enterprise working in synergy with the other.

Just as genetically engineering a large mammal vis-a-vis' a single cell organism is a completely different devil, re-coding organizational DNA works only for smaller set-ups and hence the only way innovation has to change in big-pharma is through a disruptive shake-up that allows cloistered talent-islands to drift-apart and reassemble in mutually cohesive clusters.

Finally, it's surprising just how long its taking pharma to make that elusive paradigm shift in its approach to innovation.... here's a link wherein a lot of heated discussion happened way back in 2008 & nothing much is still different as on date.

What could VCs learn from the recent pharma deals involving biotechs with very early-assets?

My response on the blog post "Preclinical Biotech Structured Deals: Reflections on 2013′s Solid Start" by Bruce Booth - posted on 01/Mar/2013
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The news of structured-deals/ buy-outs of ‘tight/ single-EARLY-asset’ biotechs both pleases & scares me… pleases, as I feel this will trigger a healthy change in the way start-ups choose their programs & scary because I (CRO/ CMO) will now start losing clients/ programs much before the conventional PIIA - read-on…..

While I totally agree with the points you’ve raised & the surmises made, I’d like to add the following;

• This in some fashion is an endorsement of the importance of early venture seeding by the very same stakeholders that typically enable the high value exits for VCs, viz., the mid-sized/ big pharma companies.
• As you say, there seems to be a promise of reward for innovative organizations that know their science – however I’m not sure if there’s any message about preference for a single asset/ tight set of assets, It is rather a niche focus/ platform & this aspect I’d think always mattered to the investors.
• Do I also see some de-risking in the form of going in for companies who’s lead/ pipeline candidates are inherently safer (recombinant proteins; antimicrobials et al) & hence highly likely to breeze through Phase-I
• Interestingly, though the indications are rare/ orphan, the therapies themselves seem to be more maintenance than curative & hence more attractive to the investing company
• This lure of an early alliance/ deal may now encourage the new enterprises to come up with more compelling technologies rather than me-toos… & thus help put drug discovery enterprise model on a correction course
• Is this the emerging new avatar of the CVC? - CVC 2.0? (Perdona, Baron.... :-))

Now, having seen a lot of my clients getting lapped up by mid/ big pharma & their programs either killed, shelved in favour of the larger companies competing pipeline, I would be a little cynical till I see the next instalment is released/ option executed.

Finally I would like to ask if there is a message in here for the VCs? – towards an opportunity, a need to structure the initial funding deals differently so that they could still keep an option to enhance their share whenever such early alliances crop-up eliminating  avenue of series-B funding?

Post Thought:

Quite a coincidence that I was just reading an article in HBR (Mar 2013) titled “How Competition Strengthens Start-ups” by Andrew Burke and Stephanie Hussels of Cranfield University.  The authors postulate that exposure to competition in the early stages of a firm’s life increases its long-term survival prospects – competition in this context including competing against a lean-funding scenario & hence learning to stay creative, efficient & productive – Since for all four companies here the early pressure is almost eliminated of by the reasonable/ comfortable funds received (upfront instalment OR buy-out), I was wondering if that makes these companies less long-term in light of the above study.

Of course I do understand that it’d be foolhardy to apply an academic study arbitrarily to any context, particularly in life sciences, where the author’s themselves have made a provision indirectly through their statement “Of course, early competition has a downside: Some new businesses fail before they have time to build up the immunity we describe” which sure sounds like the business of designing drugs.

Is the LP bias against investment into life-sciences contra-logical?

17 January 2013

Early Stage Biotech Showing Positive Signs of Scaling Its Wall of Worry by Bruce Booth on Forbes

http://www.forbes.com/sites/brucebooth/2013/01/15/early-stage-biotech-showing-positive-signs-of-scaling-its-wall-of-worry/ goback=%2Egmr_38263%2Eamf_38263_16107339%2Egde_38263_member_205146678

Despite the apparent consensus opinion at JPM that innovative new start-ups are continuing to attract capital, I wonder if in reality the venture funding, particularly from big-pharma CVCs, is mostly channeled into development/ acquisition of potential clinical candidates - THIS anomaly of an 'uncharacteristic aversion of domain biggies themselves towards investing into early innovation that'd feed their own pipelines' is WHAT I feel is the primary reason for a strong bias in the LP universe against investment into Life Sciences......