Ebola, Tekmira Pharma, Highlight SF BIO Investor Forum Meeting

San Francisco, The Palace Hotel, BIO Investor Forum meeting, Tues. Oct. 7, 2014. The annual BIO Investor Forum opened its meeting at midday with welcome remarks and a program change that included new information about the urgent subject about healthcare developments in Ebola among other topics. The welcome remarks featured a short discussion with Tekmira Pharmaceuticals’ CEO, Dr. Mark Murray PhD about his firm’s involvement in this fast moving healthcare area. Dr. Murray touched on the fact that Tekmira is working on a promising early stage antiviral drug to treat patients infected by the ebola virus. More details would follow at his afternoon investor talk

Dr. Murray said in his afternoon investor talk that Tekmira Pharmaceuticals uses an RNA interference based therapeutic in their ebola drug development program.  RNA interference (RNAi) is a naturally occurring internal cellular process that shuts down the production of targeted proteins. Dr. Mark Murray also talked about Tekmira’s drug therapy developments in nine clinical programs underway.  He said that Tekmira can trigger RNAi, but needs a delivery technology that uses the LNP-RNAi trigger mechanism.  They are working on the TKM-PLK1, TKM-H8v, TKM-ebola drug programs.  The firm is using the FDA orphan drug rare disease designation for HTG, GSD4 and so on. Their Lipid NanoParticle (LNP) partner, is Anylum, using their ALN-TTR02 platform.

Tekmira has nine products in its clinical pipeline. Dr. Murray said that its lead products include two antiviral programs.  The TKM-HBV is being developed to treat Hepatitis B and is being readied for sometime in 2015. The TKM-Ebola program is in phase 1 clinical testing.  The FDA gave Tekmira a‘Fast track’ designation for the program.  Dr. Murray added that the product formulation gave a very high survival result in animal testing using monkeys.  Tekmira will work with the World Health Organization (WHO) in the West African region for its ebola drug human clinical testing program.

Oncology product programs. The TEK-PLK1 product acts on pololukekine-1, which is found in many tumor types, usually ones linked to poor outcomes.  The tumor types include GI neuroendochrine tumor and adenocortico cancer.

Rare disease program. Hyper trigliceridemia. The condition leads to pancreatitis.  GSD glycogen is a rare condition.

Financials. Tekmira Pharmaceuticals (TKMR) is a public stock company located in Toronto, Canada, is on the NASDAQ stock Exchange and has a $528Million market cap.

Drug Program Status.

  • 2014    PLK1 Phase I/II
  • 2015    Follow on of clinic activity.

Dr. Murray concluded his talk by saying that for further information go to the company website at ir@tekmira.com.

Several hundred investors and presenting company officials gathered at this year’s BIO Investor Forum meeting for one-on-one partnering meetings, 128 company presentations, plenary informational talks, workshops and networking.

 

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Emerging Changes Coming to the Drug Development Ecosystem

At last, the face of the Affordable Care Act (ACA) has entered the public arena.  Last October at the launch of the web marketplace of the ACA, the public became keenly aware that major changes in the US healthcare system were underway.  Despite its rocky beginning, by January several million customers had successfully signed up for their new healthcare insurance plans for 2014.  The ACA will have an impact on many stakeholder groups including patients, health care providers, hospitals, insurance payers, government agencies, drug developers, and others.  In particular, one can expect to see changes of the drug development ecosystem emerge over the next few years.

On January 14th at the Parc 55 Hotel in San Francisco, the Biotech Showcase presented a plenary luncheon presentation, The Changing Dynamic of the Drug Development Ecosystem.  A panel of experts shared their insights and opinions of what might play out in the industry over the next few years.  Moderator, Ellen Corenswet, Partner at Covington & Burling LLP, posed key questions to the panelists.

The panelists included:  Karen Bernstein – Co-Founder, Chairman and Editor-In-Chief, BioCentury; Anton Gopka – Managing Partner, RMI Partners; Dan Mendelson – CEO, Avalere Health; Dennis Purcell – Sr. Managing Director, Aisling Capital; Evonne Sepsis – Managing Director, ESC Advisors.

Karen Bernstein opened the initial discussion about patients, what drugs they want, how they pay for healthcare insurance and so on.  She spoke about the ACA (aka: ObamaCare) in relation to patients and how they interact with drug companies.  Dan Mendelson seemed to know many detail data points about what to expect from the ACA since his firm has done some studies that model the potential impacts of the law.  Dan said “more and more, healthcare costs are being pushed to consumers.”  He said that many of the plans offered on the Exchanges cause consumers that need Tier-4 drugs “to pay 50% of the market price of the drugs.”  Tier-4 drugs are expensive targeted cancer drugs.

Berstein said that drug companies have offered discount coupons to consumers for some expensive drugs.  Mendelson said that there is a contradiction between ObamaCare and Medicare.  For example, Medicare does not accept discount coupons.  But, ObamaCare does accept discount coupons.

Dennis Percell said “In Boston, there are three hospitals within three miles of each other that do heart transplants. In New York City, there are hospitals that repair hips. There is one that charges $15,000.  At another place it costs $60,000.”  He asked, “What’s going to happen in pricing five years from now to the hospitals that do the heart transplants and the ones that do the hip repairs?”

Dan Mendelson  said he has “seen that consolidation is already happening either through acquisition or through contracts among organizations.“  “In many areas there is significant over capacity such as from teaching hospitals and academic centers.”  He said that “a lot of the teaching hospitals are being excluded from the networks that are fielded under the exchanges.”  Dan said that the exchanges will get up to about 6 million people and will represent just two percent of the health care system.

He said that “small businesses are calling the insurance companies and asking them to design new insurance plans for them.” He expects that “over the next five years, the benefit designs for the ACA will eventually spill over to whole healthcare insurance market.”  This scenario will have an impact on biotech’s future drug development plans.

Evonne Sepsis said “Reimbursement needs to be considered at the beginning of drug development process. She said “historically, most drug development companies considered reimbursement later.”  But not now.

Bernstein noted that companies say that their partner’s drug R&D costs need to be recovered through higher prices. However, high new drug prices are not sustainable. Dennis Purcell pointed out that “the last ten of twelve new cancer drugs cost $100,000 or more” for a course of treatment.

Evonne added “A few years ago, ten years ago, we saw the orphan drug market emerge. It needed just a patient population of 1000-5000.”  But now “with smaller patient populations in personalized medicine it is similar to the orphan drug market.”

Ellen asked  “What about the role of international going forward?”

Anton Gopka said that international pharmas are doing clinical trials in Russia for proof of concept studies.  This business model might work.  After the trials they can commercialize the new drug in U.S. Dan Mendelson said “Well maybe not so, because most U.S. payers or regulators prefer drug trials to be done in U.S.”  Dennis Purcell said  “If it were a country, the U.S. healthcare system would be the 5th biggest country in world.”

The discussion turned toward disease foundations and patient groups.

Dennis Purcell said “I believe that we will see lot of disease foundations that will open a VC arm.  So VC groups should work together with them to bring their projects forward.  Dan Mendelson offered that disease groups would work as clients. That is. A diabetes group would test the glucose value of products.

Ellen asked how to engage with the patients.

Dan Mendelson said that we need to understand and look at the quality measures. “We can’t expect the payer to give you a guarantee. Its not possible.” “We need to show an advantage vs. other drug competitors.  We need payer buy-in — each payer wants something different.  Small companies need to be competitive.  This situation has ham-stringed the FDA — They are not up to speed with the leading technologies.”

Karen Bernstein wrapped up their discussion by saying that the FDA is good in certain areas.  They are the only government agency that is under funded.  She noted that Janet Woodcock is expected to return soon, others, key people are expected to leave or retire by 2016.  She said “I see the next five years as tough for the FDA.”

Bio Investor Forum Day 2 — Biotech IPOs

–San Francisco, the Palace Hotel, Bio Investor Forum Day 2, October 9, 2013. The meeting wrapped up with its Closing Plenary: Early Stage Venture Financing — Will Current Trends Continue in 2014? The Plenary was structured as a panel discussion that included moderator Luke Timmerman — Xconomy, Srini Akkaragu — Sofinova Ventures, Brian Atwood — Versant Ventures, Alexis Borisy — 3rd Rock Ventures, Maria Chavez — AbbVie Biotech Ventures, Andrew Schwab — 5AM Ventures.  LukeTimmerman opened the discussion by saying that the big story of  2013 is the boom in biotech IPOs.  He said that in the last few years many VCs have dropped out – about half of the VCs became vampires.

The discussion opened with comments from the panel about the string of biotech IPOs that emerged in 2013. They seemed pleased that there were IPOs and wondered if the situation was sustainable into 2014 or beyond. Others commented that a biotech IPO is at an early part of a long series of steps to make a drug and that they have seen this process over and over.

Some commented about the apparent high quality of the recent crop of companies, saying that a lot of the areas in biology have a lot of unknowns and is really risky.  Companies that are able to pick out the small pieces that are well known can go forward. The advances in biology amassed over the last twenty years has enabled many of the biotech companies to do IPOs.

As the discussion continued, the topics ranged the share of VC money invested in companies, to partnerships, syndication, and the short list of “go to” financial and VC companies.  They also spoke about crowd funding, YouTube, using big data for biomarkers.  They see change coming with Accountable Care Organizations, and reimbursement issues.

From what I could see, we can expect to see more biotech IPOs in 2014.

Spotlight on New Medtech Firms at the 12th BIO Investor Forum Meeting in SF

Palace Hotel, 12th Annual BIO Investor Forum meeting in San Francisco Oct 8-9, 2013.  According to David Thorcirus, the host of the opening meeting, this year’s BIO Investor Forum had about 700 attendees, 900 one-on-one partnering meetings and had a 30% increase in attendees compared to last year. The meeting focus is about small companies seeking funding or commercial partners. Of the 120 presenting companies, about 2/3 were private and about 1/3 were public stock firms.

Small Company Presentations Of Note.

  I found four new interesting medtech firms that were worth a first look.

1. Nano3D Biosciences (n3D) is new company run by Glonco Souza, the President and CSO.  The company is a spin-off of Rice University and the MD Anderson Cancer Center in Texas.  n3D’s mission is to develop the “Bio-Assembler” technology. They said it is a big paradigm shift in the developing of complex 3D tissue models.  They do this by levitating cells in dish. The Bio-Assembler (TM) is a nnao shuttle refill.  The product is covered by patent IP.

They get in-vivo -like results.  They claim to have the fastest 3D cell-based assay. It can produce results overnight vs. in 10 days. n3D uses Apple iPod Touch 4G mobile devices as computer controllers.

The “Magnetic Levitation Grows Realistic Lung Tissue…” in a headline in Science Magazine. The company uses ten Apple iPod Touch mobile devices for its compute platform.  Souza said that the limitation of existing 3D tools and assays for a small company. So far, n3D has raised $2.3 million.  Souza said that the investor exit strategy is to sell itself to a large company.  The firm is looking for customers, partners and investors.  Souza said that they currently need $600,000 in new funding.

2.Another new company, Nanofiber Solutions creates poly-nanofiber structures.  Ross Kayula, CEO, said that they place cells in fiber and look normal (cancer cells).  Their plates replace 2D plates. Their idea is similar to those of Nano 3D Biosciences.

The CEO said that their scaffold for implants prevents rejection and scarring in a trachea.  Their idea is a platform technology for organ regeneration — as implantable products.  Product status: Trachea in clinical trials; Other products are in pre-clinicals.

Ross said that IP is their largest cost and said that they need to raise a VC-backed seed-funding round of about $2 million.

3. iNanoBio is a new firm based in Tempe, Az. The company develops nanoscale sensors for combining nanoscale and diagnostics.  iNnaoBio seeks $7.5 million in a VC funding series.  The company is developing ultrafast next generation sequencing technology over the past nine months. The initial phase of their development is to make kinase activity high throughput screening. The CEO said that their technology is ultra fast an will sequence DNA in just fifteen minutes for about $200. They expect to target clinical applications using nanopore diagnostic technology. iNanoBio will make nanowire sensors attached to a nanopore to detect DNA in one pass at high speed. The firm is involved in an NIH program to develop their platform technology. The technology provides real-time detection of kinase proteins when compared to competing technologies from Thermo, Life Technologies, DiscoverX or others. The CEO said that their next step is to integrate microfluidics.  The manufacturing process is the same as in making semiconductor chips on a six-inch wafer. They can make a 1×3-inch slide with 10,000 wells to make an alpha-p53 assay. Their future n-MEDD product lines include: 1. Kinase chip assays, 2. Inhibitor discovery assay, 3. Target-ID assays for phenotypic screens. A key value is the real time kinetic results.  They are talking with Big Phama companies about their technology. iNanoBio plans to seek series A and B funding from VC firms.  The n-MEDD system development beta product is being shipped to customers.  They are developing a prototype genome sequencing device.

4. Metactive Medical is a medical device company run by CEO, Nicholas Franano MD.  He is the former founder of Proteon Therapeutics. The firm is developing two vascular repair products. Nicholas said that their first product involves a device for treating cereberal aneurisms that have a narrow neck. He said that cereberal aneurisms impact about 4% of the population. A rupture of an aneurism produces a hemorragic stroke which is often fatal. Patients usually have very bad headache symptom prior to an aneurism occurring. If they can detect the aneurism in time, the Dr. uses a catheter to put a coil of wire into the ball of the aneurism. The wire coiling procedure is the standard of care for treating cerebral aneurisms. This is a $500 million market segment. Dr. Franano said that wire coiling procedure is delicate, difficult and takes about two hours to complete.  He said that doctors need about two years training to perform this procedure. Unfortunately, about 3-5% of the aneurisms are punctured by dosctors. Each coil costs about $1,000 and some aneurisms require up to twenty wire coils.

Metactive Medical is developing a better device, the Ball Stent which is attached to a microcatheter. The Ball Stent is guided up to and into the ball of the aneurism. When activated, the end of the stent expands and fills the ball of the aneurism. A wire seals off the bloodflow from the artery at the neck of the aneurism. The procedure takes about twenty minutes. The company tested the idea in a pilot study in dogs by testing an 8mm Ball Stent. The successful procedure delivers a permanent treatment. The FDA classify would the Ball Stent as Class-2 Device and would require a 510K filing application. The second product is vacular device to repair peripheral artery occlusion.  This is a $50 to $75 million market. The Firm’s device deploys a ballon that repairs the artery wall. Dr. Franano estinmated that the market for the Ball Stent is $1 billion and the peripheral artery occlusion device market is $100 million.  He said that the company would sell itself for $200-250 million to a buyer or develop its products further. I asked when might the Ball Stent likely reach the market and Dr. Franano said that, if developed, it could reach Europe by 2020.

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.”

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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