Pullan Consulting
Biotech Business Development Consulting
lpullan@msn.com 805-558-0361
Issue #15
Pullan's Pieces
Commentary on Science & Business of Drug Development
For Business Development & Others
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Biotech tour: India
India’s large and growing population means the Indian pharmaceutical market may reach $20 billion by 2015 from $6.3 billion a decade earlier (http://www.bloomberg.com/apps/news?pid=20601202&sid=aeWUsj_4ne8w&refer=healthcare ). Biotechnology revenues are also growing at a rapid 28% and hit $2 billion during 2005-2006 (RNCOS Market Research, 2006). Generic drugs, contract manufacturing and clinical trials are the established foundations of the pharmaceutical and biotech industry in India. However, expansion of the innovative therapeutics industry is hampered by price controls, patent laws, and limited funds.
Price controls for drugs can be imposed for “public interest”. The National Pharmaceutical Pricing Authority (established in 1997) sets prices for a list of essential commonly used drugs. In addition, the Pricing Authority may fix prices of drugs not on the list, so-called non-scheduled drugs, if it is necessary for the public interest. Recently, notices were sent to 11 drug manufacturers to rein in costs of certain drugs (treating blood pressure, allergy, skin reactions and erectile dysfunction), citing the public interest of lower prices for consumers. Included in the notices were Cadila Pharmaceuticals, Deepti Care Health, Dr. Reddy's Laboratories, GlaxoSmithKline, Lupin Labs, Mepro Pharmaceuticals, Ranbaxy, UCB India, Wallace Laboratories, and Yash Pharma – chosen for price hikes of more than 20 percent in 2004-2005 for 11 non-scheduled drugs. (http://www.pharmasianews.com/2007/08/india-highlight.html)
Patent law remains a concern for innovators. Novartis said it is likely to pull future investment out of India, after the Indian Patent Office rejected coverage of the new chemical entity, Gleevec. The patent office applied a law that protects the generics business by denying patent protection to incremental improvements to existing patents (Financial Times, August 22, 2007).
Early stage funding, while growing, is still small in India. There are rare examples of big capital infusions from outside (as seen recently with Avasthagen getting $33.5 million, led by Fidelity Investments, and Shantha Biotechnics being acquired by the French Merieux Alliance). However, some Indian biotech companies (Shantha Biotechnics, Dr Reddy’s Laboratories, Transgene Biotek, and Bharat Serums and Vaccines) are forming subsidiaries abroad to help them access capital investment, transfer knowledge and expand. (Asia Times, June 19, 2007, http://www.atimes.com/atimes/South_Asia/IF19Df01.html) The majority of companies with drugs in clinical development are public and profitable from generic sales.
Companies with drugs in clinical trials according to PharmaProjects include:
Bharat Biotech – a private company with large manufacturing facilities, making vaccines for staph, rotavirus and rabies
Biocon – India’s largest biotech (public and profitable) has in development a combination of marketed drugs for Crohns, and insulin conjugated with peg (technology acquired with the purchase of Nobex) for oral delivery
Dabur Pharma – public and profitable with generics and NCEs focused on cancer, has a combination of synthetic neuropeptides for colon and breast cancer in development
Dr. Reddy’s – public and profitable, has in development an unspecified compound for atherosclerosis, a topoisomerase inhibitor for cancer, a PPAR glitazone for diabetes
Glenmark – public and profitable, has in development a vanilloid antagonist for pain, a dipeptidyl peptidase IV inhibitor for diabetes, and a PDE IV inhibitor for asthma
Lipicard Technologies -a private company focused on lipid management and cardiovascular diseases, has in development a stereospecific NSAID for pain, and an anti-platelet
Lupin -a public manufacturer, has in development a pyrole derivative for TB treatment, a plant derivative for psoriasis, and an intranasal plant derivative for migraine
Nicolas Piramol -public and profitable, has in development a plant-derived anti-dermatophyte, a CDK-4 and CDK-1 inhibitor for cancer, and a TNFalpha inhibitor for inflammation
Orchid Pharmaceuticals -private and profitable, with chemicals and pharmaceuticals, has in development an oral amino acid derivative for diabetes
Panacea Biotec -public and profitable, focused on vaccines, has in development a pentavalent vaccine for diphtheria, tetanus, pertussis, hepatitis-B and H. influenza type B
Perlecan Pharma -private, set up by Dr. Reddy’s for development of NCEs, has in development two PPAR agonists for obesity, diabetes and dyslipidemia, and an inhibitor of the perlecan heparin sulfate proteoglycan for atherosclerosis
Ranbaxy -India’s largest pharmaceutical company, has in development a muscarinic M3 antagonist for urinary incontinence, an oral synthetic analog of artemisinin for malaria, and a statin for dyslipidemia
Torrent Pharmaceuticals -public and profitable, has in development an anti-arrhythmic sodium channel modulator
Wockhardt -public and profitable, formerly a generic formulator, has in development a fluoroquinolone antibacterial
Zydus Cadila -public and profitable, has in development unspecified drugs for diabetes, obesity, dyslipidemia, and pain
A new kinase important in breast cancer.
30-40% of breast cancers have a mutated over-active I-kappa-B kinase epsilon (IKBKE). Researchers at the Broad Institute in Cambridge, Massachusetts looked at the ability of candidate enzymes to induce cancer in cultured normal breast cells, and then checked the cancer-inducing enzymes for elevated activity in tumors. Finally, they blocked the gene with RNAi to show the dependence of cancer growth on IKBE. IKBKE is normally active only in immune cells, where it helps trigger a response to invading viruses. I’m sure companies are screening their existing kinase inhibitors to see it they inhibit this target that is in such a large proportion of tumors. (Science News 171:371-372, 2007).
New US patent rules to hurt biotech?
August 21st, the US Patent Office issued new rules (in the Federal Register http://a257.g.akamaitech.net/7/257/2422) intended to reduce the backlog of around 750,000 patent cases, and streamline the process of patent review. The new rules will restrict the number of times patent applications can be re-evaluated and will also limit the number of claims contained in any one application. Inventors will be limited to two new continuing applications, through which they can add additional claims to the same patent, and only one request for a continued examination, which an inventor can file after the patent office has rejected his or her patent application. The rules, which will take effect Nov. 1, 2007, also restrict to 25 the number of claims in any single patent submission with a limit of 5 independent claims.
Biotech companies have been the biggest users of continuations according to FDA Legislative Watch (http://www.fdalegislativewatch.com/2007/08/new-patent-rule.html). Continuations have been frequently employed by universities and biotech companies when the full scope of their discoveries cannot be immediately established or when researchers seek to extend patent coverage from one or two new molecules to an entire class of compounds with new data over time. (http://www.the-scientist.com/news/home/53497/ August 21, 2007). According to the Patent Law Blog, Patently-O, important patents that have been litigated are more likely to have 25 claims or more. http://patentlaw.typepad.com/
Roche wins case against Arizona anti-takeover law in its hostile bid for Ventana Medical Systems.
Hostile takeovers are rare, in part because of anti-takeover provisions. In the case of Roche’s on-going attempt to buy up the publicly traded Tucson-based Ventana Medical Systems, Roche sued to overturn a 20 year old Arizona anti-takeover law, which prevented a hostile takeover by blocking the right of the newly owned shares to vote for three years, effectively blocking control. U.S. District Court Judge Mary Murguia ruled that the 1987 statute can’t be applied to Arizona-based Ventana because the company is incorporated in Delaware.
Formally declaring the law unenforceable can come only after a full-blown trial on the question. But the judge said the law "appears to run afoul of the Commerce Clause'' of the U.S. Constitution,
The most common anti-takeover provisions let existing shareholders acquire a large number of common or preferred shares, to immediately dilute the percentage owned by the acquirer, making the acquisition more expensive. In a separate lawsuit in Delaware, Roche is challenging the Ventana poison-pill bylaws that let existing shareholders buy more shares at a half price if an outsider buys up at least 20 percent of the shares of the company. (Arizona Daily Star, August 22, 2007, http://www.azstarnet.com/sn/printDS/197544 ).
Free Bonus: Licensing Executive Society newsletter see page 5 article on the neuroeconomics of decision making. http://www.usa-canada.les.org/publications/Viewpoints/Aug2007/LESView08.07.pdf
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Recent Consulting Projects have included:
An analysis of the attractions and barriers for entry to a new area of technology
Advice on the design of an “auction-like” process for out-licensing
Comments on proposed deal terms
Joining a diligence team
Negotiating with a university for capturing new IP
Pitching out-licensing opportunities
Etc., etc.
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Pullan Consulting
Linda M. Pullan, Ph.D.
Biotech Business Development
lpullan@msn.com
805-558-0361
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