GSK's Witty Knighted For Services To UK Economy

With the New Year in the UK comes the Honours List, recognizing outstanding achievements and service across the country. Amid a flurry of awards and medal ceremonies -- including In Vivo Blog's own highly-esteemed Deals of the Year Awards -- (voting time is now down to only a few hours, so please cast if you haven't already), joining the Honours List bestows individuals with a certain cachet that few other accolades can provide.

Henceforth, then, we'll be requesting interviews with Sir Andrew, aka GSK chief Andrew Witty, upon whom the Queen bestowed a knighthood for services to the UK economy as well as services to the pharmaceutical industry. Smith & Nephew's chairman John Buchanan also became a 'Sir', and, not forgetting R&D, Her Maj. bestowed awards on a couple of well-known biotech researchers.

Cynics may be suspicious of the timing of this flurry of biopharma-focused decorations. They came only a couple of weeks after the UK government outlined its new Life Sciences Strategy, in which much hope was placed on the sector helping to pull the UK economy out of the doldrums. Surely, though, courting the sector with awards doesn't spell a lack of confidence in the success of the goverment's apparently more solid set of support programs?

Either way, no one wants the UK to have to swallow another Pfizer Sandwich (aka the huge R&D facility that was shut down in Kent).

Sir Andrew's distinction, although fine, probably underlines the hours spent in UK Prime Minister David Cameron's Business Advisory Group. (Ouch. We don't mean that.) Sir Andrew also has a European string to his bow, as the current president of the European Federation of Pharmaceutical Industries and Associations (EFPIA), but obviously Cameron didn't hold that against him.

Still, Sir Andrew's award may have a bitter tang to some of those R&D chiefs that may have seen their Drug Performance Units culled as part of GSK's high-profile three-year review cycle (results expected to be made public in February).

The timing of Sir John's award came just prior to the latest in series of acquisitions and divestments that he has overseen since 2006 at the artificial hip and knee maker. Smith & Nephew on Jan. 4 announced it was spinning off its biologics business into a US-based JV with private equity firm Essex Woodlands.

Other knights of 2012: obesity expert Prof. Steve Bloom of Imperial College London, who co-founded the UK biotech Thiakis Ltd in 2004, to research the therapeutic potential of gut peptide hormones in controlling appetite. Thiakis was acquired by Wyeth (now Pfizer) in 2008. Prof. Mark Pepys, formerly of University College London, also becomes a Sir. He co-founded Pentraxin Therapeutics, a UCL-spin out with a focus on the rare disease, amyloidosis. Pentraxin entered into a research collaboration with GSK in 2009.

Order of the British Empire Awards (OBEs) were awarded to Richard Barker, who retired as director general of the UK trade association, the ABPI, in the middle of 2011, and Dr John Stageman, currently vice-president of UK science affairs at AstraZeneca. Stageman was closely involved in developing AZ's biotech strategy, including the acquisition of Cambridge Antibody Technology and the US company, MedImmune Inc.

image courtesy of flickrer sincerelyhiten

How Do Drug Firms Get New Pills In Front of Doctors?

How indeed? The U.K NHS has never been the fastest at adopting new medicines and technologies, and the emergence of new, regional-level gatekeepers looks set to make things worse.

As U.K health care reforms grant commissioning powers and budgetary levers to local groups of community doctors, with similar decentralization in other European countries, including Spain and Italy, a big question for drug firms is how to get their new pills in front of those community doctors. They no longer have battalions of sales reps. Nor, we're told, can they rely on the use of key opinion leaders (KOLs), since they're mainly hospital-based specialists, while adoption decisions are being made by a mix of advisors, managers and local doctors, many of them new to the process.

"Through no fault of their own, many of these people don't have the necessary experience or skills to understand what is being put in front of them, or to make informed decisions on new technologies," says Sally Chisholm, head of a small group of NHS planners, called the NHS Technology Adoption Centre (NTAC).

NTAC is attempting to accelerate adoption of new drugs and technologies in the U.K, having spent the past four years looking at the widespread, numerous and often unexpected barriers to uptake.

It appears that some basic skills are lacking when it comes to exchanging the old for the new. Quite often, Chisholm reports, no-one knows the steps that need to be taken to adopt a particular technology, how to measure the change that it causes, or how to halt or decommission traditional practices. "It really is quite tricky," Chisholm said.

NTAC's still tiny -- just 12 researchers -- and it has remained largely under-the-radar since its 2007 inception. But the group has intimate knowledge of procurement, budget setting and process management within the NHS, and is now starting to come up with structured procedures that can be followed by industry and doctors to speed the adoption of new technologies. For example, it has shown how barriers could be overcome to adopting a lymph node assay to check, during an operation, if breast cancer has spread. The barriers to adoption include its effects on operating theatre use, and nurse rotas, in addition to the actual cost of the assay.

Small wonder, then, that NTAC is beginning to attract interest from drug firms keen to explore its expertise to help them overcome adoption barriers. They may even be willing to fund its work.

NTAC wants to avoid any accusation of being an industry mouthpiece, although Chisholm says she is not averse to industry commissioning its work. A similar NHS organization, the National Institute for Health and Clinical Excellence (NICE), has in the past piloted the provision of advice, for a fee, to other organizations and companies.

Thus far, NTAC has produced an online tool called "generic adoption process" to help NHS organizations, and has pulled together some detailed analyses of approved technologies it believes the NHS should take on.

NTAC doesn't endorse the use of products in the same way that NICE does. It just provides a roadmap of how a new technology could be adopted, after it has been granted approval. As the route to new tecnology and drug adoption gets more complicated, NTAC's roadmaps could yet emerge as an increasingly important tool for drug firms seeking to get their products introduced into clinical practice.

Financings of the Fortnight Hops Across the Pond

The United Kingdom isn't really Europe, as any Euroskeptic worth his warm pint would tell you. But we were still surprised to see a flurry of financing news coming from the Isles in August, when, famously, everyone across the pond and beyond is supposed to be off catching a few rays.

Biotech doesn't take a summer holiday, apparently. Still, three newly-minted UK firms announcing Series A fundraisings within the same week at the end of August is reason enough for a double-take. Life-science venture in Europe (and yes, we include the UK) has been weak-kneed, as our London-based colleagues wrote a few days ago. That's not surprising, with the austerity measures in the UK and a continent-wide debt crisis adding to an investment attitude already more cautious than what's found in the US. Nearly half the 27 fundraisings by private European biotech companies so far this year have been for sums totaling $10 million or less, a "drip-feed" mentality that some argue can be counter-productive as start-up managers constantly scramble for the next meager slice of humble pie. (Then again, some say hungry executives are the best kind.)

Whatever your views on human motivation, there's no denying this year's frugality, which becomes more pronounced if we weed out the two massive rounds at the start of the year that went to Danish firm Symphogen for €100 million ($131 million) and Circassia for £60 million ($98 million).

One bright spot has been Series A financings, which in Europe have averaged just over $12 million each this year, thanks in part to the debuts of several Swiss firms firms such as Shield Therapeutics. (See here and here for more.) Duly noted that Switzerland, while smack-dab in the middle of Europe, doesn't play in the euro-zone and, thus, isn't subject to the same economic vicissitudes.

Economic Darwinians like to talk about creative destruction: tear down an old structure to give breathing room to new ones. The UK has historically been dominated by large drug firms, so the crumbling of these monoliths around the edges -- such as the recent shuttering of Pfizer's Sandwich labs, though nothing to cheer about when announced this past February -- might eventually generate start-ups.

But such gestation needs time. Take for example Autifony Therapeutics. It's the second newco born from the dissolution of GlaxoSmithKline's neuroscience division, which the London-based Big Pharma announced in February 2010. Autifony is the first of the week's trifecta of UK start-ups that caught our attention, and unlike the first GSK neuro-spinout, last year's Convergence Pharmaceuticals, Autifony is still preclinical, with a pipeline of small molecules targeting voltage-gated ion channels to address hearing loss. GSK still holds about 25% of the company. SV Life Sciences and Imperial Innovations, the tech-transfer-plus arm of London's Imperial College, are each in for up to £5 million. (Read more about Imperial's new fund and aggressive investment plans here.) Only a £3 million tranche is currently in play, however -- drip, drip, drip -- until the firm can complete a toxicity package in about a year, its co-founder told our Pink Sheet colleagues. If the full £10 million goes in, GSK's current stake would drop to 13.2%, and GSK has no future rights to any of Autifony's programs.

The other two brand-new UK startups, KalVista Pharmaceuticals and Mission Therapeutics, are detailed below in our roundup. There were venture fundings in other parts of the world, too: Ardelyx in California, highlighted below, Affinium Pharmaceuticals in Texas and Toronto, and Spinifex Pharmaceuticals down under.

Alas, we can only choose four. As experienced globetrotters, we know the importance of traveling light. Take just the essentials: Pepto-Bismol, a featherweight rain slicker, a hidden wad of $20 bills to bribe the border guards, and of course...



Mission Therapeutics: Spun out of labs at the University of Cambridge, Mission's ubiquitin-based research is still in early days, prompting acting CEO Niall Martin to call the £6 million ($10 million) Series A funding "a bold move by our investors to take on a company like ours." Announced Aug. 25, the round was led by Sofinnova Partners and included corporate venture from GlaxoSmithKline's SROne and the Roche Venture Fund, as well as £1.3 million from Imperial Innovations. It's Imperial's first bet on a Cambridge spin-out and more evidence, along with the Autifony deal described above, that its new mandate to invest beyond the alumni of Imperial College is no window dressing. Mission is focused on cancer, but beyond that, it's too early to talk about indications of interest. They're quite specific about their targets, however: ubiquitin enzymes E2, E3 and de-ubiquitylating enzymes (DUBs) involved in the DNA Damage Repair (DDR) signaling pathway, which cells use to monitor their genomes for damage. The Series A funds should last two-and-a-half to three years, according to Martin, enough to get the new company to, or close to, pre-clinical validation with one or two of its main target/protein areas. Mission joins start-ups such as CellCentric and ProGenra in the race to target the ubiquitin pathway. -- Melanie Senior

KalVista Pharmaceuticals: Big Pharma isn't the only storehouse of compounds worth mining as sources for new companies. To create KalVista, SV Life Sciences and Novo A/S have spun out a basket of potential eye disease treatments from a small specialty shop in their portfolios. Each investor has put £4 million into KalVista, which now holds small molecule kallikrein inhibitors targeting the eye disease diabetic macular edema (DME). KalVista got the assets from Vantia Therapeutics, a urology specialty firm that itself was spun out of Ferring Pharmaceuticals in 2008. Crockett says KalVista's compounds could be useful for DME patients who don't respond to Roche/Genentech's Lucentis (ranibizumab), especially if the firm is ultimately successful developing an oral formulation. For now, though, it's pushing an injectable that could reach the clinic by the end of 2012. DME is becoming a competitive space, and KalVista will likely need some differentiation. Through its acquisition of Fovea Pharmaceuticals in 2009, Sanofi is working on both a plasma kallikrein inhibitor for retinal-vein-occlusion induced macular edema and a DME-specific compound. For a therapeutic area nearly abandoned by Big Pharma in the previous decade, eye disease is driving a lot of deal flow. SV Life Sciences wants to do with KalVista what it did with Swiss biotech ESBATech, reorganizing it around ophthalmology and selling it to Alcon in 2009 for up to $590 million, with the non-ophtho assets spun out into yet another newco, Delenex Therapeutics. -- M.S.

OrbiMed Advisors: As promised, the prominent New York-based health care investment firm is moving into royalties. It already has venture capital funds, hedge funds, and mutual funds under its auspices. In the spring of 2010, it closed a $550 million fund, dubbed Caduceus IV, that was slightly larger than its predecessor but aimed for roughly the same allocation mix: 60% biopharma, 25% devices, and the rest diagnostics. At that time, its partners told our friends at START-UP that the royalty fund was in the works but wouldn't discuss potential fund size. Now we know: The $600 million "Royalty Opportunities" fund will be domiciled in Luxembourg and follows established firms such as Paul Capital, Royalty Pharma, and Cowen Healthcare Royalty Partners into the arena. (OrbiMed also turned to those firms to find some of its new royalty team.) Royalty deals can be quite nuanced with complex structures, but two frequent templates are upfront payouts to drug makers in exchange for all future rights to downstream sales royalties; and debt structures that use royalties as collateral. Orbimed says it'll lean heavily toward the latter. It has pursued royalty-related deals from its other funds, with about 25 already on the books, but wanted to create a dedicated fund to give its limited partners an avenue to lower but less risky returns, targeting 2x over five to seven years instead of the minimum threshold of 3x of typical venture funds, said OrbiMed partner Carter Neild. -- Paul Bonanos and Alex Lash

Ardelyx: In another showing of corporate venture backing this fortnight, Amgen Ventures has joined the investor syndicate for Ardelyx, which completed a $30 million Series B preferred stock financing on August 31. The cash will help complete a Phase II trial of its lead compound, RDX5791, for constipation-predominant irritable bowel syndrome. The funding is a significant jump from the $22.3 million Ardelyx reported as the total for the round in this July Form D filing. Existing shareholders New Enterprise Associates, CMEA Capital, and individuals were also involved. The 2007 start-up focuses on mineral metabolism imbalance and metabolic disorders says it now expects to finish a Phase II trial by early next year and provide the first efficacy data for RDX5791, an NHE3 sodium transport inhibitor. At a different dose or regimen, RDX5791 also has potential in preventing excess dietary sodium absorption to help control hypertension, the company said. Its other two agents are in preclinical testing: RDX002 (an NaP2b phosphate transport inhibitor for chronic kidney disease) and RDX009 (TGR5 agonist for Type II diabetes). All three molecules have restricted systemic absorption and primarily target transporters and receptors in the intestines to affect only cardio-renal, metabolic, and gastrointestinal functions. Because of their minimal systemic nature, Ardelyx believes its drugs will avoid the side effects and thus be safer than current systemic treatments on the market. -- Amanda Micklus

Many thanks to Melanie Senior for her help this week.

Photo of the world's most adorable frog is courtesy flickr user Benimoto via a Creative Commons license.

Going Early Into Humans Doesn't Always Work

It all looked so good in theory. When UK biotech Renovo started out in 1999, hunting for treatments to prevent scarring, the idea was to test the company's drugs in humans very early on, allowing more informed decisions as to whether to proceed with expensive Phase III trials.

Back then, this wasn't called translational medicine, it was called experimental medicine. And this, Renovo's founder and CEO Prof. Mark Ferguson told START-UP back then, was Renovo's hallmark.

Pity it didn't pay off: Renovo on Feb. 11 announced that Phase III trials of its lead scar reduction treatment, Juvista (human TGF-beta3) had definitively failed. Failed on its primary endpoint (assessment of the scars by independent experts) and on its secondary endpoint (assessment by the patients themselves).

It's more bad news for UK biotech, as if we needed any, after Antisoma's latest crash-and-burn. Juvista is dead, so is the company, says one analyst. Bye-bye to the £100 million odd that Renovo had raised since inception (a figure that excludes the $75 million in up-front cash that Shire paid in 2007 for marketing rights to Juvista). Let's just hope e-therapeutics, with its contrasting in silico approach to quantifying the likelihood of successful drug discovery, lives up to e-xpectations.

U.K. biotech lamenting aside, there's more so say about Juvista. This was a compound that, in Phase II 'within-patient' trials (that's to say, among healthy volunteers who had two cuts made, one on each arm, with one receiving placebo treatment and the other Juvista) had shown outstanding results. Thus apart from being "shocking", both to Ferguson and the small posse of perplexed analysts following the beleaguered stock, the Phase III failure in scar revision surgery calls into question Renovo's entire portfolio. "The other products they have for scar revision are all being developed using this control system," says Samir Devani at Nomura Code in London. The problem is that the Phase II model doesn't appear to be representative of clinical situations.

That's hardly groundbreaking news on a sector level: if good Phase IIIs always followed good Phase IIs, Big Pharma wouldn't be buying toothpaste and cough-medicine businesses and biotech wouldn't have lost most of its investors. But in the case of a treatment like Juvista, applied intra-dermally to scars, one might have expected Phase III results to more closely replicate Phase II -- particularly since some of the outstanding Phase II results were in the exact same indication as the Phase III studies, so it wasn't just about the Phase III scars being larger, and not a result of a planned incision.

What went wrong, then? Several analysts on the call announcing the news sounded desperate to identify some data collection mishap that would explain the results so as to make their bullish predictions look less...well, wrong. But Ferguson didn't mince his words: "This was not a near miss, it was a clear failure." He's adamant that there were no technical or executional problems with the trials, either, which involved 350 patients worldwide.

The company now is trying figure out why in some patients, the half of the scar treated with placebo seemed to heal better than the Juvista-treated half. Ferguson doesn't think the treatment's making it worse (how could it?!) but that there's unexplained variation in the scar "where we wouldn't expect any."

That's science for you. Unpredictable. As for Renovo's future: perhaps predictably short. The company is 'considering all options', including winding the company up and returning (some of) the £44 million cash to shareholders.

Pfizer's UK Sandwich Has Wrong Kind of Filling

Pfizer's decision to close down its UK-based R&D site in Sandwich, Kent, is one the government could have done without. It means 2,400 fewer jobs in the UK, hits tax revenues and comes at a time when the politicians in power are still reeling from worse-than-expected economic figures for the country from the fourth quarter of 2010.

Pfizer says the move isn't a reflection of its views on the UK as a location for pharmaceutical research. Instead it's part of a broader, global cost-cutting plan that's been going on for a couple of years; Groton, Connecticut was hit in the latest slashings too (25% of the 4,500-strong workforce there is going).

The problem is that the Sandwich site at Kent is focused on areas that Pfizer's pulling out of: allergy/respiratory, internal medicine, urology, virology etc. Viagra's hey-day is over (at least for the manufacturer), leaving Sandwich with...well, the wrong kind of filling.

That said, some of the choiciest parts of the filling, notably pain research, will be moved to the drug giant's Cambridge, UK site, but we're not talking big numbers; R&D president Mikael Dolsten instead used the vocabulary long familiar to many of his colleagues, that of the biotech-like unit. "We're creating more of a biotech pain unit" in Cambridge, he said.

There's no doubt that this is still a snub to the UK (and Groton). CEO Ian Read outlined in the company's Feb. 1 results announcement key steps in the increasing-innovation-and-productivity process to include "a realigned global R&D footprint to increase our presence in key biomedical innovation hubs."


So we didn't need Read to tell us that Kent isn't a key biomedical innovation hub. Still, the closure -- which will occur over the next 18-24 months -- has triggered a flurry of activity among politicians to try to carve out a plan as to how to maintain R&D activities at the site. No doubt they're thinking of star-child GlaxoSmithKline (a UK-headquartered firm, incidentally), which is putting about £11 million, or a third of total funding, into a new bioscience innovation park near its current site in Stevenage, north of London, and which in November 2010 announced its plan to invest £500 million in local R&D and production, including adding manufacturing capacity at its Hertfordshire site for respiratory disease.

UK governments moves to try to attract and retain R&D-focused companies to Britain include a "patent box" offering lower tax on income generated from IP discovered in the UK, an innovation investment fund to help fill the empty VC coffers and thereby kick-start investment in biotech, and ongoing attempts to try to make conducting clinical trials easier, cheaper and less bureaucratic.

None of these are going to influence where the Pfizer behemoth does or doesn't choose to have a footprint. Meanwhile, moves to curb drug prices -- including the UK's plan to introduce value-based pricing, essentially putting an end to free (ish) upfront pricing -- aren't exactly compelling reasons to stick around in a market which, after all, is only worth about 3% of the total.

Update: 3pm (UK time): Alternative Fillings for the Pfizer Sandwich
Pfizer's biotherapeutics chief JC Gutierrez-Ramos told The In Vivo Blog this afternoon that "there's a lot of work ongoing to explore alternative parterships at the Sandwich facility," and that nothing's off-bounds. Multiple ideas, multiple discussions with partners of all types....CROs, investors, companies and academia. "Hopefully we'll see some results" of those discussions over the coming months, says JC.

Meanwhile, he's busy rolling out the company's ambitious plan to create biomedical research engines (or Centers for Therapeutic Innovation) in a handful of cities across the globe...which will one day include London, but, we understand, not Sandwich.