ImmunoCellular Therapeutics Presented at Biotech Showcase 2013

SAN FRANCISCO, January 9, 2013 – Biotech Showcase 2013, at the Parc 55 Wyndham Union Square Hotel, offered many opportunities for small and medium-sized biotech public or private firms the opportunity present their information to potential investors or partners.  I watched presentations from several companies.  The following summary highlights the activities of ImmunoCellular Therapeutics.

Director of Business Development and former scientist, Peter Ho talked about his firm, ImmunoCellular Therapeutics, Ltd. (IMUC:NYSE Amex). Peter said that the company’s technology is a next generation cancer immunotherapy that combines targeting of cancer stem cells (CSCs) with strong immunotherapy to effectively eradicate cancer cells. He said that their technology overcomes the failures of previous cancer vaccines. By killing CSCs, the cancer cells will not grow back.  Ho said that T cells kill cancer cells, have high specificity, targets several antigens, offers a level of safety and can distinguish between cancer stem cells and normal stem cells.

He discussed the product pipeline and clinical development status.  Peter said that the company is creating immunotherapies that treat multiple cancer indications.  The firm has three near term immunotherapies including ICT-107 (GBM), ICT-140 (Ovarian), and ICT-121 (recurrant GBM and CD133 marker).

Peter said that ICT-107 is a dendritic cell vaccine used against glioblastoma (GBM) antigens and CSCs (brain cancer).  This product is in a Phase 2 study with results planned for late 2013.  He said that ICT-140 targets ovarian cancer antigens and CSCs.  The firm did an IND filing in Q4/2012.  Their ICT-121 is a dendritic cell vaccine initially for recurrent GBM and targets the CD133 biomarker.  He said that the CD133 biomarker is a common biomarker in several cancers including brain, NSCLC, melanoma, pancreatic and breast cancer. The IND is approved and clinical enrollment started in 4Q/2012.

Peter said that their lead product candidate, ICT-107, has a significantly lower cost of goods (COGs) advantage over Dendreon’s Provenge. ICT-107 is 5-10% of COGs vs. Provenge 70% of COGs.

He concluded his talk by saying that the company has 28 patents, has an experienced management team, and raised $20 million in October 2012.  The firm recently hired Andrew Gengos as the new CEO in December 2012 to lead their commercialization efforts. ImmunoCellular Therapeutics, Ltd. is based in Woodland Hills, California.

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Cegedim SA and Simcere Pharmaceutical Group Presented at 2013 J.P. Morgan Healthcare Meeting

SAN FRANCISCO, January 8, 2013 – Several emerging international healthcare firms presented their information to investors and potential partners at the 31st Annual J.P. Morgan Healthcare Conference held at the Westin St. Francis Hotel near Union Square in San Francisco.

Most of the smaller firms presented their talks at the conference’s smaller rooms.  This is where I found the Cegedim SA presentaiton.

Emerging European Firm

Jan Eryk Umiastowski, Chief Investment Officer gave a talk about his firm Cegedim SA, a private company that is located in France. He said that the company is a market research firm for pharmaceutical market development companies.  The company competes with companies like IMS Health.

He said that Cegedim collects prescribing information from pharmacies and doctors of what pharmaceuticals are being used by patients.  He said that they capture data that includes drug product name, quantity and so on to create databases.

Jan said that the company provides an IT application for claims transaction management.

He showed a bright green, credit card-like, card. He said that the patient goes to the pharmacy and presents the special green charge card, swipes the card and the IT application completes the transaction overnight.  Cegedim receives its revenues from pharmaceutical firms, doctors, doctors office groups, and others.

Jan said that the business model is subscription-based and there is a high switching cost to its business clients.  Jan said that the Cegedim works with Walgreens and is Number One in the countries that they operate in.  Their IT application runs on Windows 8. Their main clients are pharmaceutical companies in North America, Europe, and emerging countries.  In the future, the firm is looking for a 20% margin.  2012/Q3 was the first time that they were receiving pharmaceutical company business.

Emerging Chinese Firm

I learned that another group of emerging international firms was part of the Asia and China Forums. These meetings were located in the Victor’s room on the 32nd floor. The China meeting hosted fifteen or so presentations from China-based healthcare companies such as Simcere Pharmaceutical Group.

A woman executive gave the presentation about Simcere Pharmaceutical Group (NYSE: SCR).  The firm is located in Nanjing, China.  This young pharmaceutical firm started life as a pharmaceutical distributor.  The firm later became a fully integrated pharmaceutical company and currently has about 4,000 employees. The company recently changed its CEO and its business strategy.  Its disease focus is in oncology, strokes, cardiovascular disease, infectious diseases and pain.

According to the executive, the firm is doing cost cutting of its SG&A, and plans to grow its R&D operations.  She said that the company has partnerships with Merck and Bristol Myers Squibb.  Its pharmaceutical portfolio includes Endostar and others including branded generics.

She highlighted the financial performance and said that 2012/Q3 revenues were RMB 526 million and the first nine months revenues were RMB 1,543 million.  R&D investment has grown RMB 2009 to 2012Q1-Q3 as listed in this table:

Table: R&D Investment

Year 2009 2010 2011 2012/Q1-Q3
R&D SpendingRMB, millions 133 126 199 168

The executive said that market uptake of pharmaceuticals in China is gradual.  The company has eleven drug candidates in the pipeline.

Simcere Pharmaceuticals has several partnerships including:

  1. Merck J-V, Signed in 2011, 630 sales reps sell six products.
  2. Bristol Myers Squibb, Dev. metatinib, IND 09/2012
  3. Apexigen, antibody deal, BD0801 IND, 10/2012

Simcere Pharmaceuticals is looking for manufacturing partnerships to expand its manufacturing base. The company’s listing status in the US is part of its strategy to play in the US-based style of business to attract more US partners

OvaScience, Seattle Genetics, and Qiagen Present at 31st J.P. Morgan Heathcare Event

This year’s 2013 J.P. Morgan Healthcare Conference at the Westin St. Francis in San Francisco (January 7  to 10) had around 8400 attendees and around 400 company presentations.  Navigating through the hallways to the numerous presentations was a challenge.  These are three of the many company presentations I attended.

OvaScience’s CEO Michelle Dipp gave a very interesting presentation about new infertility treatment options. The U.S. fertility market is over $4 billion and it is seeing rapid worldwide growth, said Dipp.  Some other interesting statistics included that every year there are 7.3 million childbearing women that are infertile and 1.2 million women seeking treatment.  There are over 400 IVF clinics in the U.S.  Most of them are in the East and West Coast.  Unfortunately, most IVF treatments fail because many women are delaying childbirth. Apparently, energy in eggs decreases with age.

OvaScience has discovered that adding mitochondria to human eggs increases IVF success. The company’s new approach to infertility is called the Egg Precursor Cell (EggPC).  The discovery of these EggPCs (germline stem cells) that mature into eggs offers new fertility treatment options, said Dipp.

The company has two product candidates that include Augment and OvaTure.  There is a study underway for the firm’s first product, Augment.  Augment uses EggPC mitochondria to rejuvenate eggs.  The company’s second product OvaTure involves fresh, young, healthy eggs matured in the lab from EggPCs.  The OvaTure program is currently being designed.  According to Dipp, the goal is to improve the IVF success rate for older women while reducing the number of embryos that need to be transferred to the uterus thus decreasing the number of multiple births.  That would be great news for the many infertile women who could benefit from this treatment and not have to worry about the potential of multiple births.

Seattle Genetics’ President and CEO Clay Siegall began his presentation with the company’s key value drivers.  They include building the Adcetris franchise, advancing the antibody-drug conjugate (ADC) pipeline and technology along with its strong financial position and collaborations to fund a very robust research.  Adcetris targets the CD30 cell membrane protein, which is expressed on the surface of certain types of lymphoma cells.  Adcetris is FDA approved for relapsed Hodgkin lymphoma and systemic anaplastic large cell lymphoma.

The firm also received EU approval for Adcetris in October 2012.  Seattle Genetics has 20 internal and collaborator ongoing clinical programs for Hodgkin lymphoma and other cancers.  The company has collaborations with Millennium/Takeda, Genentech, Celldex, Bayer, and Abbott just to name a few.  According to Siegall, “ADC collaborations have generated over $200 million to date with the potential for around $3.8 billion in future milestones plus royalties.”  Net product sales of Adcetris since launch in August 2011 are over $145 million.  Siegall said they are “making strong progress towards a fully global brand.”

Peer Schatz, President and CEO at QIAGEN N.V., began by saying that “2012 was a very important and successful year.”  He said that QIAsymphony is the company’s fastest growing product in molecular diagnostic placements with Europe being the biggest at 40 percent and the U.S. coming in at 35 percent.  Another of its products is the Therascreen KRAS test, a companion diagnostic for metastatic colon cancer to help guide doctors in the use of Erbitux.  “The U.S. KRAS market conversion is progressing well.  Doctors are demanding the Therascreen test,” said Schatz.

Over the next 2 years, the firm will be developing several new molecular diagnostic assays.  Qiagen is also developing new biomarkers with the potential as companion diagnostics.  One of the company’s goals is to “expand NGS from research to routine clinical use.”  Qiagen is preparing the launch of its first NGS workflows in 2013, which includes a broad range of its products such as the QIAsymphony NGS version.  In closing, Schatz said the company will be “executing on its 2013 initiatives to drive growth and innovation at a faster pace.”

J.P. Morgan Healthcare Conference, Kaiser Permanente Aims for “Total Health”

SAN FRANCISCO, Westin St Francis Hotel, January 7, 2013. The Alexandra’s room at the 32nd floor was filled with attendees. Many people were standing around the seating area and out into the hall to hear speakers from Kaiser Permanente (KP) give their talk.

President and COO, Bernard Tyson opened the KP presentation with basic details about the big health care company.  He said that the not-for-profit HMO is in nine states and has 37 hospitals.  Its facilities occupy some six million square feet.  He said that the firm generated about $50 billion in revenues in 2012.  The firm has 17,300 doctors.  Their mission is to provide the highest quality care to the most patients possible.  Bernard said “This is the same mission created by Henry J. Kaiser when KP was founded.”  KP is active in prepaid care, is technology enabled and stands for “Total Health.”  He said that the future of it care focus has three parts: Quality, Accessibility, and Affordability.  Referring to J.D. Power member quality studies, Bernard said “Quality is rated as #1 with 5 stars.  Seven out of eight regions are rated at 5-stars.  Northern Calif. is rated at 5-stars.”

Tyson went on to say that they have made improvements in care delivery.   KP uses the EPIC information technology system that helps KP deliver healthcare.  He said that quality is an increasing trend and that variation in practices is going down, which is a good thing. With its race-based data system, KP doctors can to look at all ethnicities, which helps to build good data.

Tyson said going forward KP would mainly focus on:

1. Staffed beds (in-hospitals)

2. Face to face meetings (in doctor’s offices)

3. In-home care (in patient’s home)

4. Technology/ virtual care.  (email and mobile apps)

Bernard said that in 2012 KP had 20 million e-visits to doctors and expects the see this activity grow to 25.3 million in the next few years.  He said that in 2012, KP had about 40 million face-to-face visits to doctors.  He is excited about the future.

He introduced Kathy Lancaster, Executive VP and CFO.  Kathy provided some color on the financial details.  She said that quality drives affordability, so investments help the KP regions to achieve NCQA (National Committee for Quality Assurance) goals that ultimately drive better financials. She mentioned that KP received the J.D. Power quality award (2012 national member health plan quality survey).  She said that the investment in quality dramatically drives down affordability costs. The “over-65” (population) group is growing at 3X the rate of the “under-65” group.

She spoke of EBITA data and said that cash is at 3.3X of debt. Managing cash internal to its business is the reason for KP to come to the capital markets.  KP supports about nine million members. Twenty percent of KP’s capital investment goes into IT.  KP developed a $38 billion capital plan.  She said that KP rebuilt 15 of its hospitals in California for seismic repair, etc.  She said that KP is getting ready for Obama Care and its new patients.

Kathy wrapped up her remarks by saying that “Total Health” is staying healthy, returning to health, and healthy aging.  The “80/20 rule” says that patients with most illness cost 80% of the overall healthcare expense.  The “over-65” group is the fastest growing group.

Financing Trend Expands for Young Biotechs in 2013

There were around 1,600 attendees this year at Biotech Showcase 2013 held at the Parc 55 Hotel in San Francisco.  One of the luncheons I attended was a panel discussion.  The topic was “The View from the Street: Looking Forward.” Here is some of what was discussed by the panel. Each of the panelists gave their view of this topic.

Robert Hazlett, Senior Research Analyst at Roth Capital said that he is “bullish for the biotech and pharma industry.”  He also predicts 38 drug approvals a year.  Hazlett said there has been beneficial advancement in biology and he is enthusiastic about advancements in oncology.  He thinks there has been modest progress on the regulatory side.

Evan McCullough, Portfolio Manager at Franklin Templeton, gave his perspective as a buy side guy.  He said Gilead started a rally by buying Pharmacet.  McCullough said that the IPO window is open, payers are tough, high deductible plans are coming so think about how that effects reimbursement of drugs.  He is also frustrated that there isn’t more M&As.  If a company wants to go IPO, they need proof of concept and solid Phase 2 data, McCullough added.  He said that for companies that want to have an IPO, there are ways to do it.  Companies spend too much time on the lead compound.  They need other compounds in case the lead compound fails.

Evonne Sepsis, Managing Director at ESC Advisors said, “Companies are looking for $2 million initially and that’s difficult.”  Private companies need a great management team, great technology, and safety is becoming very important, she added.  Also important are pricing, reimbursement, and commercialization.

Also on the panel was Greg Simon, CEO at Poliwogg.com.  Poliwogg is an internet-based broker/dealer/crowd funding portal/asset manager.  Simon pointed out that there are lots of people going into there 30’s.  They will be investing.  With crowd funding, a non-accredited investor can invest $1 million in a company.  Accredited investors can invest over $1 million.  The new JOBS Act law lets people like Simon for example invest only $100,000 in a company.  He said,  “You can now get a crowd of people to invest in you.”  The JOBS Act lowers the threshold of investment.  People typically start investing at age 35.  VC’s are making room for a whole new crowd to move in.

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