Deals of the Week Gets Disruptive

One needs to look no further than today’s pharma industry to prove that “necessity is the mother of invention.” Acute challenges swamping the sector are forcing previously insular players to abandon their silo thinking and engage customers, employees, payers, providers, and even suppliers and competitors to make strategic leaps.

That seemingly inevitable evolution was the theme at the 5th INSEAD Healthcare Alumni Summit held in late October in Zurich, Switzerland. Participants discussed these kinds of disruptive collaborations, examining how co-operation can help overcome insularity in health care, and what structural and cultural factors characterize successful collaborations.

A keynote interview session put two pharma CEOs on the spot: to sustain healthy businesses, what approaches and deal-making strategies were they considering today that were unavailable or unappealing to them only a decade ago?

Roberto Gradnik, CEO of Stallergenes SA, is attempting to launch his France-based company – which develops treatments for allergy-related respiratory diseases – out of its regional European orbit and take it global. The group currently devotes around 20% of its annual gross sales – which in 2012 totaled €240 million ($323 million) – to R&D, a large proportion for a company Stallergenes’ size.

Gradnik told the INSEAD conference that it’s crucial to change a small-to-mid-sized company’s mindset to be successful at expansion – a process that’s clearly disruptive and necessitates big change on the inside and often demands untried approaches. “Sure, if I don’t go down this path then I would avoid a cultural clash – but I would also not be able to build a successful company,” he told the conference. “At the same time, we need to find new commercial and development models, and be increasingly creative in our partnering ideas,” he added.

Riccardo Braglia heads his family’s Swiss drug and device business, Helsinn Group, which began life in his grandfather’s garage in the late 1940s but today operates in 90 countries with 63 partners using a core business model of what he terms “integrated in-licensing” of late-stage pharmaceutical compounds, medical devices and nutritional supplement products. He told the conference that Helsinn’s business model is based on three pillars: in-licensing, developing products and obtaining marketing authorization on international markets, and out-licensing products through a network of partners worldwide. Its main business areas are cancer supportive care, pain and inflammation, and gastroenterology.

Braglia, who has been at the helm of Helsinn for a decade, recounted a recent cultural challenge he faced when Helsinn took over U.S. biotech Sapphire Therapeutics in 2009, to expand the group’s pipeline in therapeutic areas, notably in cancer care, and give it a foothold in the U.S. But the takeover quickly presented problems that he hadn’t foreseen and which took him more than two years to put right.

“We figured, ‘well, they speak English there so what’s the problem?’ But oh boy, it was a nightmare to implement our culture, that of a family-business, our strategy, our products, and reconciling their biotech culture within the pharma industry. It was really tough, partly because I didn’t want to have any expats running the show there, because I always want to work with local people, because the culture of a country is very important. So what I did was spend half of every month in the United States to make it work – and it eventually did.”

Braglia said his integrated in-licensing business model means his company is essentially a virtual corporate entity with limited infrastructure. “It also means that half of my 500 employees are not in the office but rather in airplanes on business trips.” He said that in the last decade, Helsinn was focused increasingly on licensing alliances, manufacturing alliances, scientific alliances and commercial alliances. An example is an injectable manufacturing joint venture using a plant owned by Pierre Fabre Group of France but paid for by Helsinn.

Gradnik’s company has just secured a U.S. partner – Greer Laboratories Inc. – for its key grass allergy vaccine Oralair, which he hopes to launch there in early 2014, pending FDA approval. Under the deal, announced Oct. 31, Greer will lead the sales and marketing of Oralair, a grass pollen sublingual immunotherapy tablet that includes five grasses -- sweet vernal grass, orchard grass, perennial rye grass, timothy grass, and Kentucky bluegrass -- while Stallergenes will be responsible for manufacturing and supply. Stallergenes will receive regulatory and commercial milestone payments totaling up to $120 million, plus royalties. Oralair will be reviewed by FDA’s Allergenic Products Advisory Committee Dec. 11.

Both Braglia and Gradnik said CEOs of small to mid-sized biopharma companies need to be involved in such collaborations.

“I need to know that the other CEO shares the same philosophy and vision,” Helsinn’s Braglia said.

Gradnik said it should also be the chief executive’s role to know when collaboration has gone sour and take remedial action. “It’s best to cut your losses and end it. I have one like that currently going but will refrain from saying who that’s with,” Stallergenes’ CEO told the conference.

Perhaps a topic for a future “No Deal of the Week.” Until then, enjoy our takes on the not-yet-sour ...

Helsinn/Chugai: In its latest partnership, Helsinn has chosen Chugai Pharmaceutical Co.'s U.K.-based European marketing subsidiary to help sell its ghrelin receptor agonist anamorelin in Europe.
Under the deal announced on Nov. 12, Chugai will get rights in certain major European markets to commercialize the oral drug for anorexia-cachexia syndrome related to advanced non-small lung cancer. Financial details were not disclosed. The pact follows Helsinn's agreement in January with Mexican pharmaceuticals company Especificos Stendhal SA de CV for anamorelin's development in selected Latin American markets. Anamorelin is a first-in-class, once-daily drug previously studied in around 500 patients, including four completed Phase II trials. It is currently being tested in two Phase III studies, ROMANA 1 and ROMANA 2, for the treatment of anorexia-cachexia syndrome in patients with advanced NSCLC.
Chugai will distribute and commercialize the product in Germany, France, the U.K., Ireland, Belgium, the Netherlands and Luxembourg. Chugai's European subsidiary already has direct operations in the U.K., France and Germany, marketing products there from Chugai or Swiss parent Roche. Helsinn retains responsibility for all product development activities including clinical trials and regulatory affairs and will supply the drug to Chugai, which will carry out all work related to commercialization. Phase II results of the drug presented to this year's European Cancer Congress in Amsterdam showed a significant rise in body weight from baseline in patients receiving the medicine compared with placebo, and a favorable overall safety/tolerability profile. Cancer-associated anorexia-cachexia is a muscle wasting and weight loss condition that occurs in around a third to half of cancer sufferers. There are as yet no approved therapies for the condition. Ghrelin, also known as the "hunger hormone", is secreted by the stomach and is targeted by anamorelin to stimulate multiple pathways involved in regulating body weight, appetite and metabolism. -- Sten Stovall

Roche/immatics: People have begun to sit up and take notice of immatics biotechnologies GMBH after the company announced on Nov. 13 a cancer vaccine collaboration with Roche that could lead to the German immunotherapeutics biotech receiving research and milestone payments of up to $1 billion, in addition to a relatively modest up-front payment of $17 million. The high “biobucks” figure takes into account the multiple products and indications likely to be explored in the collaboration, the second announced by Roche in the immunotherapy field in the past two months. Immatics, a Tubingen-based firm with strong backing from local German entrepreneurs and VCs, has developed a technology, XPRESIDENT, to identify cancer antigens recognized by T lymphocytes, and has a tumor-associated peptide (TUMAP)-based cancer vaccine targeting renal cell carcinoma, IMA910, already in a Phase III study. Roche is keen to evaluate preclinical TUMAP vaccines alone and combined with checkpoint inhibitors and other modulators of the immune response, specifically in the areas of gastric, prostate and non-small cell lung cancer. Immatics' Phase I-ready gastric cancer vaccine candidate, IMA942, is the most advanced product covered by the agreement, and Roche will be responsible for clinical development and commercialization of this and other immunotherapies generated in the research collaboration.-- John Davis

Oncodesign/UCB: French drug discovery and pharmacology services firm Oncodesign SA is to collaborate with European mid-sized biopharma UCB SA on identifying selective kinase inhibitors with potential in the treatment of neurodegenerative diseases, in a deal announced Nov. 13. Oncodesign’s Nanocyclix technology generates potent and highly selective kinase inhibitors based on macrocyclization of small molecules, and the two companies will collaborate on identifying such inhibitors that cross the blood-brain barrier and interact with a UCB-selected kinase target. UCB will have an exclusive option to license the joint program, with worldwide development and commercialization rights, upon successfully reaching certain discovery milestones. Oncodesign will, in turn, get research funding, and upon exercise of the license option, research, regulatory and commercial milestones involving the development of molecules in two or more indications, and tiered royalties on net sales. Dijon-based Oncodesign was set up in 1995 and has previously forged collaborations with several other pharmaceutical companies including Sanofi and Ipsen to apply its drug discovery technology in various therapeutic areas, including tissue repair and Parkinson’s. -- John Davis

Novartis/Immunogen: ImmunoGen Inc. announced on Nov. 11 that Novartis AG has taken its third license to use the biotech’s antibody-drug conjugate technology on an undisclosed cancer target. It is the fifth license around Immunogen’s ADC targeted antibody payload (TAP) technology this year by a major drug company.
The Novartis license dates back to a 2010 deal in which the Swiss Pharma licensed exclusive rights to use Immunogen’s TAP technology to develop antibodies against a predetermined number of oncology targets.
For each license, Immunogen receives an up-front payment and is entitled to receive milestone payments potentially totaling some $200 million plus royalties on the sales of any resulting products. Novartis is responsible for the development, manufacturing and marketing of any products resulting from the license. Immunogen’s pipeline consists of four wholly owned ADC programs and eight partnered ADCs in 10 different cancer indications. The best known partnered ADC is Roche’s Kadcyla (ado-trastuzumab emtansine), which was approved by FDA in February as a second-line option after Herceptin (trastuzumab) and a taxane, but labeling left a window for broader use in some first-line patients. A safety signal in a Phase II trial of the biotech’s lead asset, IMGN901 for NSCLC, was disclosed last April, followed by its discontinuation on Nov. 5 on the recommendation of the trial's independent Data Monitoring Committee. -- Mike Goodman

Merck KGaA/BeiGene: Big pharma is increasingly in-licensing compounds from Chinese companies, and the biopharma arm of Merck KGAA, Merck Serono SA, inked a second global licensing, co-development and commercialization deal with BeiGene (Beijing) Co. Ltd. for oncology compound BeiGene-290.
BeiGene-290 is in preclinical development and is expected to enter the clinic in 2014. Under terms of the agreement, announced Nov. 13, BeiGene will be responsible for developing and commercializing the poly (ADP-ribose) polymerase (PARP) inhibitor in China first and Merck will be responsible for the development and commercialization of the compound for the rest of the world. In return, BeiGene will receive an undisclosed up-front payment and is eligible to receive further payments of up to €170 million ($232 million) for clinical development milestones and potential commercial milestones in both China and globally, as well as royalties on net sales. Specific indications for the oncology compound were not disclosed. Both deals, while global, have been structured to ensure BeiGene leads development in China, which should enable the companies to take advantage of regulatory consultations with China FDA as part of the agency’s accelerated approval pathway. The new agreement signals a milestone for biotech innovation in China, said BeiGene Co-founder Xiaodong Wang during the signing ceremony in Beijing. Wang is also the director and architect of China’s National Institute of Biological Science. -- Brian Yang

Shire/ViroPharma: The big M&A news this week was London-listed Shire PLC’s agreed takeover of ViroPharma Inc. for an eye-watering price of $4.2 billion cash, which would give the Ireland-based specialty drug maker access to the U.S. target’s C1 esterase inhibitor Cinryze for treating Hereditary Angioedema, a genetic immune disorder. The proposed acquisition may attract anti-competition resistance from regulators, given Shire’s possession of HAE treatment Firazyr (icatibant injection), but the acquirer says it is confident that these two products are in two different marketplaces. If allowed to proceed, Shire expects the marriage to generate annual cost synergies of around $150 million by 2015, over and above the improved operating leverage already being driven by the ongoing One Shire reorganization.-- STS

Cell Therapeutics/Baxter International: Beleaguered oncology company Cell Therapeutics Inc. has inked a deal for its Phase III mylefibrosis asset pacritinib that it sees as a vote of confidence. CTI announced Nov. 15 that it has signed an agreement with Baxter International Inc. for full commercialization rights outside the U.S., as well as joint commercialization rights in the U.S. The $60 million up-front payment will include a $30 million equity investment in the Seattle-based biotech company, which may also receive clinical and regulatory milestones up to $112 million, including $40 million in clinical milestones that are expected in 2014 and another $27 million expected in 2015. Baxter will handle 75% of costs through submission. CTI acquired pacritinib, an oral tyrosine kinase inhibitor that acts on the JAK2 and FLT3 pathways, in April 2012 from Asia’s SBIO Pte. Ltd. CTI paid $30 million upfront and is on the hook for a total of $132 million in regulatory and sales milestones. Prior to CTI getting the rights to pacritinib, the drug was licensed to Onyx Pharmaceuticals Inc., which opted not to development it in 2011. Pacritinib is CTI’s latest hope after two late-stage pipeline failures – first FDA shot-down non-Hodgkin’s lymphoma treatment Pixuvri (pixantrone), followed by a clinical hold for the blood cancer drug tosedostat. -- Lisa LaMotta

Invitation: Join PharmAsia News' Twitter Chat On China Pharma Issues

Over the last month China pharma issues have been on the front page as the government has launched a wide-ranging probe focused on compliance. The probe comes at a time when many players are already re-assessing business models in China to find new avenues for growth.

Opportunities still abound in China given huge unmet medical needs, demographic changes (e.g., an aging population, adoption of Western lifestyles), and China's health care reforms, which have extended basic medical insurance to virtually all of the country’s 1.3 billion citizens.

But challenges abound too. Sustaining growth will require new models and flexibility: smaller cities are now growing faster than Tier I cities; off-patent medications are under more severe pricing pressure, threatening the traditional business model of multinationals; and compliance has taken center stage.

While support for biopharma innovation is a major government goal, so is curbing health care costs. How can pharma companies collaborate and thrive in this environment?

To take a closer look, PharmAsia News' Twitter site, @PharmAsiaNews, will host a half-hour Twitter chat (hash tag #PAS13) Sept. 19 (3-3:30 pm EST) to discuss hot topics related to the China pharmaceutical industry. The chat will include special industry guests and PharmAsia News editors, and is sponsored by the PharmAsia Summit.

We invite you to join the discussion, ask a question, or just tune in and watch the chat live. It’s a great way to learn the latest on China pharma without leaving your laptop, tablet or smart phone.

For more information, please see below, or contact our editor Joshua Berlin via email or Twitter . We hope to see you there!

• Who: The chat is hosted by @PharmAsiaNews and includes China industry consultants @GeorgeBaeder and @DebraYuPharma , and PharmAsia News editors @TamraPharmAsia and @BioPharmaJosh.

• What: A half-hour Twitter chat to discuss the latest hot topics in the China pharma industry.

• When: Thursday, Sept. 19, 3-3:30 pm EST (for those who can’t attend the chat live, we will provide a link to the discussion at a later date). Go to @PharmAsiaNews at 3 pm to tune in or participate.

• Where: The chat is hosted on the Twitter page of @PharmAsiaNews. To follow the chat, join the discussion or ask a question, go to @PharmAsiaNews or follow hashtag #PAS13.

• Why: China represents the fastest-growing large pharma market, but new models are needed to succeed in a rapidly changing environment. Our Twitter chat is a great way to tune in for a half hour and learn the latest on China pharma.

• How: To join the discussion or ask a question, use hash tag #PAS13 and reference @PharmAsiaNews. Or reply to our ongoing discussion on @PharmAsiaNews using hash tag #PAS13.

Deals Of The Week: A Top Analyst Sees R&D Productivity Improving, Now Where’s The Value

Recently there’s been a more positive outlook on the industry from some sectors of Wall Street built on conviction that pharma has really improved its pipelines and, by implication, its R&D decision making capabilities, helped in part by its persistence in evolving new and more flexible business models. Opinions are still mixed on this score, but the sea-change in sentiment was underscored in a talk earlier this week by Citibank’s managing director of global healthcare, Andrew Baum.

Speaking at Elsevier’s Pharmaceutical Strategic Alliances conference on Sept. 19, Baum, who is not shy about criticizing the industry, said he is encouraged that it has successfully evolved to deliver value through each period of change and “this time will not be an exception.” Efforts in the past two to three years to down size and revamp its R&D organizations -- led by AstraZeneca and including rate-changing shut-downs such as Pfizer's Sandwich labs -- have in reality resulted in less spent on fixed-cost research and fewer research sites, in absolute terms. And that shrinkage is continuing. "Three-quarters of the global pharma industry is existing research and re-allocating capital to externalization," he added.

More than that, Baum argues that “the presence of research labs is a material driver of bad decision making and shareholder value destruction, as research labs kept drugs alive that should have been killed."

But improving R&D is straightforward compared to what Baum sees as the biggest challenge facing pharma in the next 10 years: the demonstration of value to payers. “That is where there are enumerable problems and that should be the major preoccupation of any CEO in pharma for next 10 years or so,” he said. Delivering affordable value will require a very different paradigm. “The impact of taking a 20% price reduction or anything that reduces profit by 20% kills the economic value of a molecule."

Ongoing changes in the U.S. and European healthcare landscape forcing value to the forefront include provider consolidation in the increasingly complex U.S. healthcare infrastructure, European pricing pressures, and the advent of more sophisticated IT systems, including electronic health records, that allow better methodologies for tracking value. In the U.S., where these changes coincide with the introduction of accountable care organizations -- admittedly still a small part of the overall infrastructure -- accurate identification of areas of under treatment or over treatment is possible and that has broad implications for pharma. That said, “it’s not entirely clear that this will be net positive or negative for the [pharma] industry,” he observed. “There is mixed evidence whether ACOs and capitated care will result in reduced costs, but there is the beginnings of evidence.” The opportunity to leverage data and capture patient information "has to be weighed against more rational implementation of existing care through use of pathways."

While R&D improvement is underway, other key factors influencing his optimism are improving regulatory climate, government incentives to support the industry -- notably around tax breaks -- and a modest improvement in relations between the industry and health technology assessment agencies, albeit from a very low base.

FDA’s appetite for risk is increasing, highlighted by its recent willingness to accept neoadjuvant data for the approval of a breast cancer drug that previously would have required a progression free survival endpoint. In taxes, a number of governments are compensating for rigid HTA views and very heavy price reductions by implementing ‘patent boxes’ which reduce the rate of corporation tax levied on profits derived from patents. European countries that have such programs include the U.K., Belgium, The Netherlands, and Spain, according to a report Baum’s group published in late 2011.

The industry's embrace of externalization is certainly evident in the plethora of deals announced this week, so without much ado, let's jump to ...

United Therapeutics/Ascendis Pharma: United Therapeutics has licensed exclusive rights to apply Ascendis Pharma’s TransCon technology platform to treprostinil, the active ingredient in its flagship product Remodulin. Treprostinil is a synthetic analog of prostacyclin. These rights will additionally extend to the development of prostacyclin, prostacyclin analog, and prostacyclin-related products for pulmonary arterial hypertension, and UT will hold worldwide commercial rights to products resulting from the collaboration. Financial terms were not disclosed. Ascendis’ TransCon technology is designed to release a drug in a precise, time-controlled way, enabling a longer-lasting therapeutic effect. A subcutaneous infusion formulation of Remodulin has been approved in the U.S. and EU. UT’s COO Roger Jeffs said  that a formulation of treprostinil using the TransCon technology may also eliminate injection site pain and reactions that frequently occur with continuously infused subcutaneous Remodulin.” This collaboration is Ascendis’ first since its 2010 deal struck with Sanofi. --Michael Goodman 

Baxter/Onconova: Privately held Onconova sold European rights to its promising Phase III cancer drug Estybon (rigosertib) to Baxter in a Sept. 19 deal. The drug is in late-stage trials for myelodysplastic syndromes, a group of disorders that often lead to acute myelogenous leukemia, as well as Phase II/III studies in pancreatic cancer. The alliance nets Onconova $50 million in upfront funding, plus $515 million in milestones that could pay out before the drug is even commercialized. Subsequent sales milestones and royalties could add more value to the deal. Baxter receives full rights to all indications of rigosertib in 32 countries, including the full European and adjoining territories such as Norway, Switzerland and Turkey. Deerfield, Ill.-based Baxter took a $50 million equity position in Onconova in a separate deal last month. Rigosertib targets both the PI3-K and PLK pathways, each of which is implicated in solid tumor and blood cancers. Baxter already has a hematological sales force, as well as modest holdings in cancer that include both marketed products and pipeline drugs. Onconova previously partnered rigosertib with Japan’s SymBio Pharmaceuticals in Japan and Korea. The Newtown, Penn.-based company expects to use some of the proceeds to support ongoing trials for lymphoma drug ON-013105 and Ex-RAD, a radioprotectant. –Paul Bonanos

Bionomics/Eclipse: Australian biotech firm Bionomics has acquired San Diego-based private biotechnology company Eclipse Therapeutics in a $10 million deal, from which Eclipse shareholders – including Biogen Idec – will emerge holding about 6.5% of Bionomics' issued capital. A spin-off of the Biogen Idec oncology franchise, Eclipse is developing drug candidates that target cancer stem cells (CSCs), thought by some to be the “seeds” at the root of cancer. Eclipse’s lead compound, ET101 – aimed at an undisclosed CSC target that is over-expressed on most solid tumors – is expected to move into human trials in 2014. "This acquisition elevates and expands Bionomics’ oncology pipeline beyond BNC105, our primary cancer drug candidate, which is now at advanced clinical stages,” said Bionomics CEO Deborah Rathjen. “It also establishes Bionomics as a global leader at the forefront of cancer stem cell therapeutics … and provides Bionomics with an important strategic base in the U.S.” Eclipse co-founders Jonathan Lim, Peter Chu and Chris Reyes all will take up roles with Bionomics, with Lim becoming a non-executive director, Chu the company’s VP of U.S. operations and cancer biology, and Reyes, VP, R&D biologics.—James Dunn

Dyax/Kadmon: Dyax and Kadmon signed a strategic licensing agreement Sept. 20 under which Kadmon has been granted an exclusive worldwide license for the development and commercialization of DX-2400, a fully human monoclonal antibody that inhibits matrix metalloproteinase 14. Specific deal terms were not disclosed, but Dyax will receive an upfront payment and can earn development and commercial milestones, as well as up to double-digit, tiered royalties on commercial sales. The deal follows a July 2011 agreement in which Kadmon obtained a non-exclusive license to Dyax’s antibody phage display libraries for drug-discovery work. Now, Kadmon is responsible for further development and commercialization of ‘2400, currently in IND-enabling studies. “This agreement expands on our longstanding relationship with Dyax and [its] antibody technology platform," Kadmon Chairman and CEO Samuel Waksal said. “We believe MMP-14 is an important piece of the puzzle for overcoming cancer’s growth, proliferation and resistance mechanisms. In particular, its role in tumors and ocular disease neovascularization represents a unique target opportunity that may be complementary to other anti-angiogenic therapies on the market and in development.” —Joseph Haas

MacroGenics/Servier: Expanding upon their December 2011 licensing deal around Phase I anti-cancer antibody MGA 271, MacroGenics and Servier have signed a territorial option agreement for the development and commercialization of three DART (Dual-Affinity Re-Targeting) antibody therapeutics aimed at undisclosed targets. MacroGenics will receive a $20 million upfront payment, and could earn option fees and preclinical milestones reaching up to $80 million under the deal. The deal also calls for clinical, regulatory and commercial milestones that could reach $1 billion, as well as tiered, double-digit royalties on product sales. The Rockville, Md.-based biotech retains full development and commercialization rights to the three programs in North America, Japan, Korea and India, while Servier, of Suresnes, France, acquires an option for an exclusive license covering the rest of the world for each program. The two firms will co-fund and conduct R&D activities leading up to Servier’s go/no-go decision points. Servier can exercise one of the options prior to IND submission, and the other two after initial Phase I trials are conducted for each. For each program Servier elects to option, the two companies will split clinical development costs.—J.A.H

Bristol-Myers Squibb/Vanderbilt University: Already partnered with Johnson & Johnson, Seaside Therapeutics and Karuna Pharmaceuticals on the development of allosteric modulators for neurological indications, the tech-transfer folks at Vanderbilt University are at it again. The school’s Center for Neuroscience Drug Discovery (VCNDD), headed by former Merck researcher Jeffrey Conn, signed an agreement Sept. 21 with Bristol-Myers Squibb to collaborate on the discovery, development and commercialization of positive allosteric modulators (PAMs) to treat Parkinson’s disease. VCNDD will receive an undisclosed upfront payment along with multi-year research funding for continuing discovery efforts. The collaboration will focus mainly on VCNDD identifying potential drug candidates that act on the metabotropic glutamate receptor 4 (mGluR4), and then turning them over to Bristol for development and potential commercialization. VCNDD will be eligible to earn development milestones and royalties on product sales under the collaboration. Previously VCNDD’s discovery efforts in Parkinson’s received funding support from the Michael J. Fox Foundation. The partnerships with J&J and Karuna focus on schizophrenia, while the Seaside tie-up works toward therapies for Fragile X syndrome, autism and other brain development disorders.—J.A.H

Novartis/Selexys: Selexys Pharmaceuticals of Oklahoma City announced a $23 million Series A round led by MPM Capital on Sept. 19 but also signed a side deal granting Novartis an option to acquire the biotech if Selexys’ lead compound, an anti P-selectin antibody called SelG1, succeeds in a Phase II trial against sickle-cell disease. With the cash infusion, the trial is slated to start next year and finish possibly in 2015. Several Selexys top managers, including President and CEO Scott Rollins, are veterans of the rare-disease firm Alexion. Novartis’ purchase option calls for up to $665 million in upfront payments and potential earn-outs. Founded in 2002 with technology exclusively licensed from the University of Oklahoma, Selexys is developing antibodies for acute and chronic inflammatory and thrombotic diseases. Specifically, the company is focusing on the adhesion of white blood cells – the first step in the inflammatory process – which involves the interaction of the P-selectin and PSGL-1 proteins. SelG1, a P-selectin antagonist, is a humanized monoclonal antibody which completed Phase I late last year for vaso-occlusive crisis, a painful complication in sickle-cell disease. The antibody was granted orphan drug status by the FDA in 2008. Selexys believes SelG1 will fill the void left by the one and only approved medication for sickle-cell disease, hydroxyurea, which only benefits half of the patients, and even they don’t respond completely to the drug.—Alex Lash and J.A.H

Covance/GNS: Cambridge, Ma.-based data analytics company GNS Healthcare has teamed up with contract research organization Covance to help pharmaceutical companies create more efficient drug development methods using GNS’s super computer-driven Reverse Engineering And Forward Simulation (REFS) data analytics platform. The collaboration will use data provided by Covance to create models that can better predict the success of a drug given certain patient characteristics. “Our collaboration with Covance combines our unique collective resources and capabilities to tackle what has previously been an intractable challenge—improving dismal clinical drug development success rates,” said Colin Hill, president and CEO of GNS. The companies are going to start with models for type II diabetes. Covance is hoping that the technology will help it offer its clients a forecasting option. Financial terms of the deal were not disclosed. The work is similar to that done by GNS for other clients including Huntington’s disease models for the CHDI Foundation and modeling work on inflammatory work for Bristol-Myers Squibb.--Lisa Lamotta

TransCelerate BioPharma: Unveiled Sept. 18, TransCelerate BioPharma Inc. will strive to identify and solve common drug-development challenges, improve clinical trial quality and ultimately bring new products to market more quickly. The non-profit organization is being staffed and funded by ten pharmaceutical companies (the charter members of TransCelerate are Abbott Laboratories Inc., AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly, GlaxoSmithKline, J&J, Pfizer, Sanofi, and Roche/Genentech Inc.). During the PSA conference on Sept 19, J&J CSO and pharma chairman Paul Stoffels said he expected the effort could cut development time – and development costs – by up to 5% for an average program. The outfit is led by acting CEO Garry Neil, former corporate VP, science & technology, at J&J, who said the primary issues TransCelerate can solve come down to a lack of standardization in drug development that results in needless repetition of effort, and with it, the draining of resources. Intended to be a virtual initiative, the firm will be headquartered in Philadelphia but have no staff at the start other than Neil. Instead, full-time equivalents from the 10 charter companies will work together on the goals. Each participating company is contributing an undisclosed amount of money to the effort, along with the FTEs, Neil said. Though not every big pharma is involved the door remains open, said Neil, for large, medium or small firms to join in. Also expected to play a role, Neil added, are academia, regulatory agencies, contract research organizations and patient advocacy groups. – J.A.H.

 

Take the PharmAsia China Survey, Get a Discount to PharmAsia Summit-Shanghai

Our colleagues at PharmAsia News are launching a survey on the China life sciences industry. We encourage all readers interested in China to participate. (Filling out the survey should take five minutes and in exchange you'll be eligible for a 15% discount on the PharmAsia Summit-Shanghai Sept. 24-26.)

The rise of emerging markets like China has provided life sciences companies with significant new growth opportunities, but also the challenge to achieve better health outcomes in regions struggling with affordability barriers and huge unmet medical needs.

China, in particular, is on the radar of most industry executives given its scale. China has risen to become the world’s third largest pharma market, according to data from IMS Health, and some analysts believe China is already the second largest market, trailing only the U.S.

To gain a better understanding of how industry is integrating China into their global strategies, Elsevier Business Intelligence (publisher of PAN, In Vivo, and "The Pink Sheet", among other titles) is teaming up with BayHelix, an organization of leaders of Chinese heritage in the global life sciences community, and the Monitor Group, a leading strategic consultancy, to launch a proprietary survey of PharmAsia News and EBI readers.

To start the survey, please click here.

Findings from the survey will be included in an exclusive report on innovation in China, to be released during the PharmAsia Summit-Shanghai (sponsored by EBI and BayHelix). In addition, selected findings will be covered in PharmAsia News during the weeks leading up to the Summit.

Please note that survey participants will remain anonymous. You will be issued a special code at the end of the survey to receive your 15% discount to the PharmAsia Summit-Shanghai.

Thank you for participating!

photo by Josh Berlin

Financings of the Fortnight Tells A Tale of Two Conferences

Investors gauging the market mood look for signs. We also spent two days this week at the BioInvestor Forum in San Francisco looking for signs that the current biotech climate is anything but a bummer.

No dice. Everyone we spoke with thought attendance felt light; the show runners at BIO countered that registration was up 5% over last year then blamed the first day's obvious loneliness on traffic snarls caused by President Obama's visit to San Francisco. Most of the company presentations we attended had fewer than 10 people in the room, and that included the company's PR rep and the guy or gal running the A/V gear. On the second day, organizers cut the main room in half to make the panel discussions feel more intimate.

The biggest sign of malaise was the title of the final panel: "Opportunities or Apocalypse? Prophecies for 2012." To even contemplate the A-word in what's supposed to be an industry-boosting event was a sign of how sour the mood is right now. Still, Matthew Perry of Biotechnology Value Fund, Bryan Roberts of Venrock, Kurt Von Emster of VenBio, and Ron Laufer of MedImmune Ventures did their level best to buck everyone up. Perry prophesied con mucho gusto that old-school biotech companies, built on groundbreaking science, will start going public in the next 12 to 18 months before even having late-stage clinical data.

While the word "apocalypse" literally hung over everyone's head the entire time on the projection screen, an exit sign glowed over Roberts' right shoulder. No one on stage seemed to notice. How's that for symbolism?

Another sign of the "new normal" of the decreased influence of traditional venture capital: big drug makers aren't just being more aggressive with their own in-house venture arms, they're also thinking hard about deploying capital as limited partners to back venture groups struggling to raise money during the Great Shakeout. Both Merck & Co. and Eli Lilly have taken steps to invest in early stage science via the LP route: Merck through its Merck Research Venture Fund, which our industrious colleagues were first to report here, and Lilly via its Mirror fund initiative, which has encountered some speed bumps.

On another panel, the topic was not building companies but asset financing -- moving drugs forward in the most efficient manner possible and into the hands of the strategic buyers who need to refill pipelines. While David Collier of CMEA Capital was on stage discussing his firm's asset-financing plans through a CMEA-funded vehicle called Velocity Development Corp., another venture firm across the country made good on a similar plan. Atlas Venture unveiled its first asset-based limited-liability corporation, Arteaus Therapeutics, which we detail below.

An antidote to the subdued investment scene was a short walk away (or a cable car ride, if you prefer). In a Nob Hill hotel conference room, the World ADC Summit brought a packed house of mainly scientists together for talks on antibody-drug conjugates, a field that needed three decades to produce an exciting commercial product: Seattle Genetics' Adcetris (brentuximab vedotin), which received FDA approval in August. We're not counting Mylotarg (gemtuzumab ozogamicin), which Wyeth had approved in 2000 but never caught on and was removed from the market in 2010 for safety concerns.

The mood at the ADC Summit was palpably different: an acknowledgment that the door is wide open to a vast array of technological advancements, some of which could be quite disruptive and are being driven by small venture-backed firms. One of those firms was Syntarga, with drug-and-linker technology, that agreed to be acquired in June by its Dutch neighbors Synthon; former Syntarga CEO Vincent de Groot, now a vice president at Synthon, told IN VIVO Blog that ADC innovation will come "from all angles," and what's now known is only the visible part of a technological iceberg. Seattle Genetics, Immunogen and Genentech will need to continue to innovate to ensure their tenure as ADC leaders isn't short-lived -- not that those companies are standing pat. (For more background on the rising ADC tide, have a look at our story from December.)

To be fair, BioInvestor also had a lively panel discussion dedicated to ADCs peopled with executives from some of those small firms. But the ADC Summit in particular was a reminder that there is plenty of enthusiasm to create biomedical innovation (yes, among the Big Pharma, too). The enthusiasm to open one's wallet to fund such innovation, however, is quite a different story.

A quick note: If there's a topic you'd like to see in this column, or you have specific feedback that you'd rather not put in Web comments for all to see, drop us a line at capitalmatters@elsevier.com or a.lash@elsevier.com. Make sure to include FOTF in the subject line. Your support helps nourish clinical development of subject-verb conjugation that addresses unmet syntactical need every two weeks in...



Arteaus Therapeutics: Earlier this year, Atlas Venture said it would explore a new asset-based funding model, yet another experiment by a venture firm in an effort to improve returns from early-stage products. Its first such investment appeared Oct. 19 with the launch of Arteaus Therapeutics, a company without employees created solely to house a Phase I migraine drug spun out of Eli Lilly & Co. Atlas and OrbiMed Advisors provided $18 million in Series A funding to Arteaus, a start-up designed to be even more virtual than most virtual companies. It will be structured as a limited liability corporation (LLC) and will be controlled primarily by Atlas Venture Development Corp., a stand-alone offshoot of Atlas intended to direct operations at several companies like Arteaus simultaneously. Atlas partner and acting Arteaus CEO Dave Grayzel said the cash will fund clinical trials to show proof of concept rapidly; if that’s achieved, Lilly holds an option to reacquire the asset at undisclosed pre-negotiated terms, and therefore deliver an exit for Atlas and OrbiMed. A bit of irony: Lilly has been working to build exactly this type of relationship with three venture funds in what it calls the"Mirror" portfolio. Those plans have not gone quite as expected, with at least one fund, CMEA Capital, not participating. (Lilly said in early 2011 that one of its venture partners had accepted two molecules, one from Lilly and one from a third party.) Atlas is not one of the Lilly "Mirror" funds. The molecule, an antibody being studied as a prophylaxis for migraines, binds with calcitonin gene-related peptide (CGRP); both Merck and Boehringer Ingelheim have halted development of CGRP antagonists designed to treat acute migraines. -- Paul Bonanos

Regeneron Pharmaceuticals: It's every little biotech's dream: sign several platform-validating licensing deals, save a few choice molecules (or regions, or indications) for itself, bring a drug to market that could put a lickin' to one of the big boys, then borrow a barrelful of non-dilutive cash for the commercial war chest. Regeneron hasn't yet shown that its wet age-related macular degeneration treatment Eylea (aflibercept) can beat Genentech/Roche's Lucentis; in fact, thanks to a three-month PDUFA delay, it must wait until Nov. 18 for approval. But it's got the cash for the battle. Regeneron announced October 18 it raised $400 million in convertible debt, payable over five years at 1.875%. As commercial chief Bob Terifay told IN VIVO this summer as part of an analysis of biotechs that manage to bring a first drug to market, the firm is shifting significant resources to the commercial side for the first time. Eylea would actually be Regeneron's second approved drug; its first, Arcalyst(rilonacept), treats a family of ultra-rare diseases and requires scant commercial outlay. Eylea sailed through its FDA advisory committee meeting and is still expected to win approval. If Regeneron can convince doctors and payors of Eylea's benefits (fewer injections, for example) it could take market share from Lucentis, the proper use and price of which has been thrown into question by the CATT study. Bayer HealthCare has rights to Eylea ex-U.S. -- Alex Lash

SAGE Therapeutics: Third RockVentures is one of the few VCs willing to make big bets on early stage science these days. With the announcement on October 18 of its solo staking of SAGE, a Boston start-up developing novel medicines for schizophrenia, depression, and other CNS conditions, the investment group makes its first major bet in neuroscience. It’s a move that’s been expected since October 2010 when Steven Paul, former EVP of Lilly Research Laboratories and a neuroscientist by training, joined Third Rock Ventures as a venture partner. Underpinning SAGE is a proprietary chemistry platform called PANAM, referring to the start-up's intent to develop positive and negative allosteric modulators of GABA and NMDA receptors. Both proteins are critical actors that respectively play a role in the transmission of the inhibitory and excitatory neurotransmitters, gamma-aminobutyric acid and glutamate. Third Rock has been incubating the company for more than a year, building its IP position and an advisory board of top-notch academics. "It will be hard for anyone else to mimic this approach given what we've consolidated over the last year," interim CEO Kevin Starr(and a Third Rock partner) told “ThePink Sheet” DAILY. Both Starr and Paul said the $35 million Series A, which may or may not be tranched, is enough to take four or five programs forward simultaneously. One of those seems likely to be a positive allosteric modulator for schizophrenia that has “encouraging” data, according to Paul. Interestingly,one family of targets SAGE won't be pursuing is the metabotropic glutamatereceptor (mGluR) family, among the hottest targets of interest inside many big pharmas and biotechs, including Lilly, Johnson&Johnson, and Addex Pharmaceuticals. –- Ellen Foster Licking

BIND Biosciences/Selecta Biosciences: These two Boston-area nano-medicine companies already have much in common: both were co-founded by Massachusetts Institute of Technology professor Robert Langer and Harvard Medical School professor Omid Farokhzad, and both feature Flagship Ventures as an original investor. But they're now connected in another way: simultaneous investments by Rusnano, the Russian state fund for nanotechnology run by former Russian politician Anatoly Chubais, who ran the privatization process under Boris Yeltsin. Announced Oct. 27, Rusnano is investing $25 million in each company, making it the largest investor in rounds totaling $47.5 million for each company, with new and existing investors filling out the slate. Both BIND and Selecta will open subsidiaries in Russia to tap into scientific talent as well as clinical trial populations. Both firms have advanced a lead candidate from their platforms. Selecta, with its Synthetic Vaccine Particle platform, is just now entering the clinic with its program for smoking cessation. BIND, whose Accurin platform aims to accumulate systemic cytotoxins in higher, more targeted concentrations, is in Phase I with its lead progam BIND-014, a reformulated version of the chemotherapy docetaxel, aimed at advanced or metastatic solid tumors. -- A.L.

No Glass Ceilings: Medtech Women Gather at Unique Industry Meet-Up

MedtechWOMEN co-founders Amy Belt and Deborah Kilpatrick

Something new happened in the medical device world two weeks ago. It wasn't a new technology or a big research discovery, nor was it a breakthrough treatment for heart disease, cancer or diabetes, though it could possibly lead to one of these.  

What happened was an unprecedented medical technology conference, featuring exclusively women speakers, panelists and attendees. The sold-out Medtech Vision conference in Menlo Park, Calif. on September 15 and 16 brought together more than 200 business executives, entrepreneurs, investors, physicians, inventors, providers, patient advocates, policymakers and regulators and generated an energy that attendees claimed – and I will vouch -- was not just palpable but electrifying.  

The idea was hatched a year ago when Covidien Ventures director Amy Belt got fed up with the typical medtech meeting scene. "I was looking up from the audience and realized that there were no women on the podium – again. I was frustrated not to see women on the podium, as well as on boards and executive teams, because I know the women experts are out there and I wanted to hear from them," Belt said. So she pulled together a like-minded group and set about, with major support from Covidien, Abbott Laboratories and law firm Fish & Richardson, to create something new.  

The invitation that landed in my inbox July 27 came from a new organization called MedtechWOMEN and promoted the conference as "the first ever to highlight women on the forefront of medical innovation." Intrigued, I anticipated speeches about glass ceilings and male dominated C-suites. Boy, was I wrong. Instead, the presentations and panel discussions proved true to the meeting's agenda: to identify solutions to today's big challenges in medtech: a jittery venture capital community, shifting models of care delivery and reimbursement, increasing regulatory demands, and laser-like attention to healthcare outcomes and costs.

Speakers set right to the task with pointed advice. On an investor panel, Versant Ventures managing director Beckie Robertson advised against entrepreneurs working on small projects. "The opportunity for a win-win is in meeting a huge unmet need and getting out before commercialization," she said. Johnson & Johnson worldwide VP of new business development Susan Morano agreed, highlighting spectacular exits in the last two years for companies that genuinely responded to unmet needs. 

Among big populations with unmet needs are women themselves, noted Lynn Westphal, director of women's health at Stanford University. Westphal named several common diseases and treatments that are inadequately studied in women, explaining that females often display symptoms and respond to therapy differently than males. Imagine the opportunities, she suggested, awaiting companies that break the mold and extensively enroll women in large trials for cardiovascular, cancer, diabetes and other diseases. 

Interventionalists and surgeons had their say, too. Surgical oncologist Shyamali Singhal explained that for new technology to be adopted, "it has to be faster, easier, and more doable than what I'm doing now in surgery." And the designers of those new technologies need to interact more with physician users, said Bonnie Weiner, a cardiovascular researcher, clinician and former president of the Society for Cardiovascular Angiography and Interventions. "Nobody ever asks us how we're going to use the device. Come to the cath lab and follow us around!" 

On a reimbursement panel, speakers agreed that the days of "build it and they will come" are over, and the way forward is to improve health outcomes or procedure workflow. "We look for clinically meaningful improvement in outcomes" backed by high-quality evidence, said Betsy Thompson, chief medical officer for the San Francisco regional office of the Centers for Medicare & Medicaid Services. Advancing patient safety is also a good bet, she said: "If a new product improves safety but not effectiveness, we would probably cover it." 

Liesl Cooper, VP of global healthcare economics, policy and reimbursement at Covidien, pointed out that with patients paying more for their care, industry also needs to think more about how to educate them. "We're not used to that," she said. "Shame on the medtech industry for not touting better outcomes such as a 24-hour stay compared to a six-day stay!"

So what difference did it make that the people talking were all women? Amy Belt put it this way in her opening speech: "Leadership doesn't have to wear a navy blue blazer. Women represent 51% of the population, 58% of the population over 65, spend two out of three healthcare dollars, are half of the graduating classes of physicians today and over 90% of all the registered nurses. Why would it make sense for women not to be significantly represented in leadership positions where key decisions are made about the delivery of care and investment in innovation when they represent half the population, control the healthcare dollar and provide the majority of healthcare services?"

Beyond Belt's introduction, though, the conference was not about advancing women, but about advancing medical technology and healthcare. MedtechWOMEN founder Deborah Kilpatrick, a senior VP at diagnostics firm CardioDx, was pleased it went that way. Women's place in the industry "was just not what we were there to discuss," Kilpatrick said. 

Nevertheless, the thousand-watt energy at Medtech Vision was a departure from the standard atmospherics of industry conferences. It reflected, I think, the pride of 200 women medtech leaders seeing themselves assembled in one place, listening closely to each other, making new connections, and realizing – unexpectedly, inspiringly – that solving the challenges ahead may suddenly have gotten a little bit easier. -- Mary Houghton

Podcast: How's Your Guanxi?

You may have heard of the Chinese business concept of guanxi, but do you really understand it? The term, loosely defined as "relationship," can be maligned in the West, but there's more to it than cronyism.

The Food and Drug Law Institute held its first conference in China June 13-14 in Beijing to try to tackle some of the persisting challenges of doing business in China. (See here for full info.) They gathered top-notch speakers from FDA, China's SFDA, and some of the leading regulatory and legal experts from companies operating in China (not to mention our own PharmAsia News – see our coverage here and here; or register for a free trial here).

In partnership with FDLI, we are happy to be able to share a podcast from one of the more interesting panels, featuring Robert Poole – vice president of China operations for the US-China Business Council – Covington and Burling partner Timothy Stratford, Cargill Investments China Director Omar Sadeque and Charlene Zhu, general counsel for GE Healthcare China.

The US-China Business Council polls its member companies every year for the most burdensome aspects of the Chinese business environment. Poole addresses challenges ranging from intellectual property protection to sharing a market with massive state-owned enterprises (SOEs). And as Stratford, a former assistant U.S. trade representative, points out, it's important to be careful when negotiating with SOEs, because the Department of Justice views SOE employees as government officials under the Foreign Corrupt Practices Act. Sadeque and Zhu share insight with on-the-ground perspective on navigating China's life sciences market, including the much-discussed – but misunderstood – concept of guanxi.

All four panelists can speak Mandarin, and yet only one of them grew up in China. How's that for a metaphor on the shift taking place in market priorities? Don't worry; they speak English for this podcast.

Editor’s note: The original post omitted that the panel was moderated by Becker & Associates Consulting CEO Ron Ginor.

-- Dan Poppy
image from flickr user Matt512 used under creative commons license

The JPMorgan Healthcare Conference: Where Optimism Is Its Own Catalyst

The annual January health care confab in San Francisco is ostensibly run by JPMorgan but long ago took on a life of its own and spread well beyond the hallways of the Westin St. Francis. (Yes, they are crowded; we think we can all get over it.) One tweeter dubbed it "spring break for old white dudes in suits" but (thankfully) we think it has moved beyond that in so many ways too.

However, what the broader JPMorgan conference ecosystem can't escape is the sureness with which it knows its importance. It's not necessarily unearned or mistaken, this sense of self-worth. As a barometer for sentiment in the health care world, and biopharma in particular, the meeting and its attendant parties, satellite conferences, and offsite deal-building are impossible to beat. It doesn't really matter whether that's by design or by accident of geography and calendar.

Every year at JPMorgan, the mood's the thing. And this year, the mood was unmistakably optimistic. Perhaps the best part of that mood, that vibe, that intuition, is that nobody we talked to could really put their finger on Why. There were no concrete reasons offered for the buoyancy carrying people from meeting to meeting and from reception to reception. It just was.

And so, this was the year biotech CEOs talked with straight faces about their potential 2011 IPOs. This was the year a tiny biotech boasted about its technology from the sides of Powell-Mason cable cars (yes, Adimab bought every available ad for the week). This was the year one of the industry's oldest precommercial biotechs talked about launching not one but two drugs in the next 12 months (Vertex's straws did the trick). And this was the year that Big Pharma shifted from talking about dealing with patent expiries to talking about bulging pipelines (and of course returning cash to shareholders).

Like last year's meeting (also tinged, if not quite as much, with a sense of optimism) there is of course a reality that doesn't quite live up to the good mood. In 2010 fewer biotechs received Series A cash than in any recent year, and the average haul in those rounds was also lower than any year in recent memory, as we'll report in the next issue of START-UP. Hours after talking about its industry leading pipeline, Merck got a $7 billion wake-up call, losing that much market cap in response to some fuzzy bad news coming out of its voraxapar Phase III program. Industry's experiments with R&D models have yet to prove themselves -- or excite investors -- and it will be a long time before the results of that restructuring can demonstrate any success. Regulators remain safety-focused, payers remain in the drivers' seat.

We left San Francisco with the sense there are of a lot of deals in the industry pipeline. Hey, even those crazy kids Sanofi-Aventis and Genzyme may make a go of it (you might have heard about that one). Pharma is still in its first steps of a long march toward externalization of R&D, so we don't doubt the deals will come.

But unlike the majority of those future deals, we suspect 2011's optimism is front-end loaded. A mood is just a mood, after all.

Notes from AASLD: Apples and Oranges and Null Responders

The liver disease community – if not the investment community – has largely moved on from the novelty of comparing Vertex Pharmaceuticals' telaprevir and Merck's boceprevir, the two direct-acting antivirals that together form the threshold to a new era in hepatitis treatments if the buzz at the American Association for the Study of Liver Diseases is any indication.

Instead, physicians are celebrating the fact that two therapies may soon be available that can help patients achieve success rates that handily best the current 50% success rate from the standard of care interferon and ribavirin therapy, which is described as 48 weeks of constant flu-like symptoms and PMS.

The sense of promise is palpable at AASLD, now under way in Boston, where many of the sessions are standing room only.

A lot of the excitement now is around the IL28b genetic marker and its implication for better cure rates, and the lure of a still-years-away all-oral therapeutic regimen.

But first, there will be protease inhibitors. Merck and Vertex, who are jockeying to be first-to-market with a direct-acting antiviral for hepatitis C, plan to complete FDA submissions by the end of the year, with approval possible in mid-2011.

Based on overall profile, the odds-on favorite for best-in-class in this initial class of two seems to be telaprevir, but boceprevir may find a top-rung niche in experienced patients.

However, comparisons can be tough. Vertex had no short-course option in the Phase III study of telaprevir in experienced patients, REALIZE. Final results in that study have not yet been reported, but top line data showed 65% of experienced patients treated with telaprevir achieved SVR compared to 17% in the control arm.

Meanwhile, Merck released data at AASLD showing their response-guided therapy plan, which shortens the treatment period for patients who respond early, can work in prior treatment failures.

Another question frequently asked of presenters this year at AASLD concerns the definition of null responder, that is, patients who have had the poorest results with standard of care.

The definition of null responder used by Merck in RESPOND-2 is those who achieved less than 1 log decrease in viral load after the four-week lead-in period with standard of care. According to the abstract on the trial presented at AASLD, 33% of null responders (15/46) in the response-guided arm achieved SVR, a statistically significant improvement over the control arm, in which none of 12 patients had a cure. Null responders in the 44-week triple therapy arm had a 34% cure rate (15/44), also statistically significant.

That null-responder definition, however, appears to be at odds with the FDA guidance. In the document, FDA describes that population as people with "less than a 2 log10 reduction in HCV RNA at week 12" of standard of care therapy, the point at which the therapy is typically dropped for futility.

A footnote in the draft indicates that "other definitions for null response have been proposed, such as less than 1 log decline in HCV RNA at week four of treatment. However, failure to achieve a greater than 2 log decline … at week 12 has typically been used as a treatment futility criterion," and use of the 1 log decline definition "causes a gap in classification for individuals with a viral load reduction" that falls between the two.

Vertex has used that definition in its REALIZE study in experienced patients. In an interview, Robert Kauffman, chief medical officer at Vertex, reasoned that using what he called the "standard definition" prospectively to identify patients at the time of enrollment, rather than "on treatment," ensured that all patients were in the appropriate group.

To test the difference in the two definitions, Vertex used a four-week induction arm in REALIZE, and looked at the correlations between less than a 1 log drop at week four of the delayed start and the standard definition, Kauffman explained.

The outcome of the analysis was "a clear difference," he said. The two groups had different responses to the triple therapy. In addition, he said, the trial showed that both groups can have a "very, very good response."

A subanalysis of REALIZE reported at AASLD showed that among combined partial responder and relapser patients in the lead-in arm, 18% (31/171) fit the less than 1 log reduction definition at the end of the lead-in with standard of care. Of those patients 58% (18/31) went on to achieve SVR compared to 31% (46/147) patients prospectively-defined as prior null responders using the "standard" definition.

– Shirley Haley

flickr image by e g g used under a creative commons license.