Pullan Consulting
Biotech Business Development Consulting
www.pullanconsulting.com and www.lindapullan.com
email: lpullan@msn.com 805-558-0361
Issue #29
Pullan's Pieces
Commentary on Science & Business of Drug Development
For Business Development & Others
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The economy and biotech
The Economy: The last few months have been dramatic, as housing prices declined and homes were foreclosed or walked away from. Wild gyrations in the stock market. Big brokerage firms and banks have failed or been swallowed. The giant hedge fund industry has lost $180 billion in 3 months, the Federal Government is spending $700 billion to try to stop the panic, and everyone is lobbying for their piece of the taxpayer dollars. What does it all mean for biotech?
Biotech funding: IPOs are non-existent (no biotech has had an IPO since November 2007, (Reuters, Nov. 2, 2008)). VCs, seeing that route to exit dry up, are investing less. The limited partners of the VCs are resisting the “call-downs” for more funds (In Vivo Blog, Oct 23rd). The VCs, seeing the challenges of biotechs raising more money, are reserving more of their capital to keep liquid the companies they have already invested in. And biotech companies are restructuring and slimming down. (Atherogenics declared bankruptcy, DeCode Genetics and Par Pharma restructured, In Vivo Blog, Oct 17th).
Big pharma: Big pharma is cutting staff (Merck laying off 7200), but committing to acquisitions (GSK, BMS and Amgen announce their intentions to do acquisitions) to build their pipelines. Acquisitions can be attractive if they contribute sales soon, or add new capabilities (a platform) or a stream of new products. Staff and infrastructure are generally an obstacle to acquisition. For early opportunities, licensing deals are more attractive and back-end loaded.
What is the right response? Preserve cash? Focus efforts on programs most likely to have a near-term valuation inflection, cutting research? Both of these are sensible. But I’d also say that in the survival of the fittest, the quality of your project is key. Money will compete for the best assets. Focus on making your project and story really solid, providing the evidence that the potential can be translated to the clinic and the market (that is my topic Monday morning at BioEurope). Consider whether you fit an acquisition (do you have a small infrastructure, offer a platform or near-term product candidates) or a license. Consider grants (Zenobia, the fragment based lead discovery company with CNS expertise, won a big Michael J Fox grant). And don’t stop telling your story. It may be more important than ever to get your value proposition out to partners with clarity.
I’d also like to see the big companies fortunate enough to have cash think about the efficiency and innovations that can come from their cash in the hands of the little guys. We all need the industry to keep up innovation rather than just pursue the next apparently most risk-free opportunity. Traditionally the decision to buy has been on a single opportunity at a time, with price only coming after a decision of interest on each opportunity. This might be a great time to really try the portfolio approach, making a number of investments and leaving them alone to mature for a while in the hands of the small companies. Fully a third of the 60 new medical entities approved between ’05 and ’07 were submitted by small companies (The RPM Report, http://therpmreport.com/Free/41d8d844-dc81-469b-becc-d17513b5e4f4.aspx?utm_source=RPMel).The prices might be right for the grand experiment.
What are your thoughts?
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The FDA vouchers for Priority Review
To get more treatments for tropical diseases, an amendment to the FDA revitalization act of 2007 allows the sponsor of a newly approved drug or vaccine for tropical diseases to receive at approval a transferable priority review voucher, which can be used for another treatment. This is similar to the program of transferrable credits for carbon pollution reduction. The FDA Guidance document came out this October (www.fda.gov/OHRMS/DOCKETS/98fr/FDA-2008-D-0530-gdl.pdf). The voucher can get an FDA review in 6 months or less applied to any treatment. The recipient of a voucher can use it for any treatment or can sell the priority review voucher to another company. Getting a new drug to the market sooner could be worth a lot, but there will be uncertainty as to the number of months for review without the voucher and the magnitude of sales that could be gained during the time gained. For big pharma companies, this incentive may not change behavior but for small biotech, the cash from a voucher sale could make a big difference. https://www.iavi.org/file.cfm?fid=47963
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Gene expression to characterize cancer of unknown primary origin
Metastatic cancer of unknown primary site (CUP) remains a major challenge to treat appropriately. Some 10% to 15% of cancer patients present with metastases, and the site of origin may not be initially apparent. In one third of these patients (approximately 4% of all cancers), even after extensive evaluation, no primary tumor is identified and they are designated as having CUP.
Now two studies have used RNA-based gene expression to try to assign the primary origins of cancers of unknown primary. Varadhachary et al15 evaluated the Veridex assay in 120 CUP patients and compared the expression profiles of the metastases with known clinicopathologic information and therapeutic response. Horlings et al16 evaluated the Agendia CupPrint assay in 84 known tumors and 38 CUPs and compared the results with known clinicopathologic information. In both cases, the results broadly correlated with existing clinicopathologic information.
One of the most interesting aspects was the correlation of the expression profiles with the therapeutic response. Patients with a lung or pancreas profile responded poorly to treatment (as expected for those types of tumors). In contrast, patients with a colon profile, usually on both Veridex assay and IHC, had a better outcome (sustained partial response) with colon cancer–specific therapy administered in the prospective cohort, than with the empiric platinum-/taxane-based CUP therapy administered in the retrospective cohort.
Although the studies are still relatively small, the results suggest that RNA profiling may lead to tailored treatment for these previously difficult to treat patients. (http://jco.ascopubs.org/cgi/content/full/26/27/4373 )
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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
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