Pullan Consulting
Biotech Business Development Consulting
www.pullanconsulting.com and www.lindapullan.com
email: lpullan@msn.com 805-558-0361
Issue #25
Pullan's Pieces
Commentary on Science & Business of Drug Development
For Business Development & Others
_____________________________________________
VC’s are still raising money.
Fundraising by U.S. venture capital firms increased 15 percent over the same period last year, with 72 firms raising $11.5 billion in the first half of 2008. (Investment by VCs in the 1st quarter was down 7% from a year ago, www.fis.dowjones.com/1Q08USFinPR.pdf) U.S. private equity firms raised $132.7 billion across 185 funds, 3 percent below the $137.2 billion raised by 199 funds during the first half of 2007. (http://www.masshightech.com/stories/2008/07/07/daily14-Report:-VC-fundraising-climbs-while-overall-PE-is-down.html )
_______________________________________
But exits for VCs are harder.
For the first time since 1987, not a single venture-backed company went public via an IPO on the US market in the 2nd quarter of 2008. There were only 5 venture-backed IPOs in the first quarter. In the first half of 2007, there were 43 venture-backed IPOs. 81% of venture capitalists surveyed do not see the IPO window opening in 2008.
Acquisition is an alternative exit for the VCs, but the number of M&A deals is down 28% from a year ago. In the 2nd quarter of 2008, there were 50 venture-backed M& deals, with an average value of $171 million, but only 3 of these M&A deals were life science companies, with 1 deal with a disclosed value of $53 million. (July 1st press release from http://www.nvca.org/ ).
_______________________________________
Drug partnering continues in the 2nd quarter of 2008
According to Burrill, partnering in the 2nd quarter of 2008 was up after a slow 1st quarter, bringing in over $4.1 billion for US biotech companies. (http://www.burrillandco.com/news-290-Biotech_remains_upbeat_in_wake_of_market_turmoil_.html).
My sense from consulting is that weak financing puts small companies in a weaker bargaining position than in recent years. However, deals are getting done, with most deals continuing to be at early stages. My informal count of 40 press releases in the 2nd quarter (searching “license agreement” or “deal” in www.pipelinereview.com) identified:
· 13 drug discovery deals (with disclosed terms for 4 deals, leading to averages of $24 million upfront, and $233 million in milestones),
· 14 deals for preclinical compounds (with terms for 5 deals, leading to averages of $1.8 million upfront and $51 million in milestones),
· 2 deals at Phase 1,
· 10 deals at Phase 2, (with terms for 7 deals, leading to averages of $41 million upfront, and $238 million in milestones).
· and 1 deal at Phase 3.
_______________________________________
Different scale of manufacturing for approved biologic requires a new BLA, but Insmed pushing for a path for a biologic follow-on.
Genzyme was recently told by the FDA that they needed a new BLA for approval of the biologic Myozyme manufactured at a 2000L scale, despite FDA approval in 2006 of Myozyme made at 160L scale. Marketing of the drug from the larger batches has been approved in about 40 countries. Myozyme at the larger manufacturing scale will need a new regulatory submission with clinical demonstration of efficacy, because of differences in the carbohydrates compared to the original approved product. The variation in the carbohydrate structures of the two scales of manufacturing highlights the lack of reproducibility of production of proteins by living cells under different conditions, even with the same company doing the work.
The requirement for additional clinical data may be indicative of the likely requirements for follow-on biologics. (Nature Reviews, Drug Discovery, p.466, June 2008). Under the Hatch-Waxman Act of 1984, small molecule generics need only demonstrate “bioequivalence” without clinical trials for safety or efficacy, but there is no US regulatory path established for approval of follow-on biologics (also called biosimilars).
Meanwhile Insmed announced bioequivalence data for a follow-on biologic to Amgen’s Neupogen (G-CSF). Concentration profiles and a response measure, absolute neutrophil counts, were the same for dosing with the Insmed molecule as with Neupogen. Insmed intends to request a meeting with the FDA for a Phase III trial (Insmed press release July 10th), but it seems unlikely the FDA will move quickly.
________________________________________
Pullan Consulting
Linda M. Pullan, Ph.D.
Biotech Business Development
www.pullanconsulting.com and www.lindapullan.com
e-mail: lpullan@msn.com
805-558-0361
This newsletter is a free service of Pullan Consulting. Please add it to your safe sender list to avoid it being treated as junk. To unsubscribe, just send me an email.