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Kimberly Ha will be moderating a panel on Investment Trends in Biotechnology. She notes that many big pharma companies are partnering with academic institutions and oncology, followed by neurology are some of the hottest areas in acquisitions. This session will provide an overview of the big developments in the primary areas of biotechnology investing, including regenerative medicine, neurological disorders, oncology, vaccines and infectious diseases. This panel will also discuss which therapeutic areas of development will see most investment activity, as well as how to best position your company for a strategic exit -- as large pharma seeks to boost its pipeline by finding innovative new targets and compounds.
Please click below to hear audio followed by a full transcript.Brett Johnson: Welcome, this is Brett Johnson in New York City with OneMed Radio. Today, I am with Kimberly Ha. She is the global editor of BioPharm Insights, a business intelligence service, which is part of the Financial Times Group that's focuses on analysis and breaking news in the global healthcare sector. Thanks for joining us today, Kimberly. Kimberly Ha: Thank you, Brett, for having me here. BJ: So, I know you'll be moderating a panel for the OneMed Forum in San Francisco in January on the big issues shaping some of the growth companies in the biotechnology and specialty pharma space. Can you just give us sort of your view as we kind of close out 2011, what you see are some of the big trends that you're seeing in the emerging biotechs? KH: Sure. I think the recent news on the Gilead Sciences acquisition for Pharmasset, a company developing a novel hepatitis C therapeutic called PSI-7977 definitely is really exciting for the entire space. Because that signals a large pharma trend right now towards being actually more open to acquiring and making and taking these big bets on, you know, a compound that hasn't really even started phase 3 trials yet. You know, the results of the phase 2 trials is sort of what Gilead Sciences is banking on. If you look at the premium that they've offered for Pharmasset, I think that really speaks to the magnitude for how desperate companies are right now. I mean not just with the patent cliff, but just looking beyond that in the next four or five years really trying to anticipate getting ahead of the competition in terms of having a key asset that could potentially transform and revolutionize hepatitis C therapy by really cutting down the therapeutic timeframe to shortening the duration. BJ: So, Kimberly, a lot of the big pharmaceutical companies have increasingly been looking to make acquisitions from smaller companies in the biotech space as opposed to developing, you know, R&D internally. Is that a trend that is continuing and what's going on in terms of the acquisitions of companies? KH: I think right now, one of the trends we're definitely seeing is that large pharma is increasingly partnering, you know, not just with other startup biotech companies or pharmaceutical companies, but really looking to partner and sign collaborations with academic institutions. So that definitely is interesting. They're definitely looking earlier stage. Like one of the hottest areas right now in terms of the acquisitions continues to be oncology followed by neurology. I think areas where collaborations have really sort of dwindled or, you know, where we saw a partnership collaboration being cut really has been in the areas where the drugs require large scale sort of primary care sales forces. For example, in the areas of cardiovascular or in diabetes care, we've definitely seen a lot of partnership collaboration sort of terminate. And I think this really speaks as to how difficult drug development has been for compounds in development in areas such as diabetes and the cardiovascular area where, you know, there's already a lot of treatment options for patients, and it gets increasingly difficult to get these new therapies approved. You know, right now I guess in the current cost environment and even though your drug is approved, you still have to get through the reimbursement hurdle. So that's something that we've really seen affect, you know, the FDA approval and sort of what is the percentage of a particular drug getting approved and how that sort of affected M&A. So I think key examples would be a lupus drug that we've been covering on, a product Human Genome Sciences and GSK's lupus drug Benlysta that was launched I believe earlier in March of this year. And a lot of people, you know, before the launch said, well Human Genome Sciences, there hasn't been a new drug in lupus for the last 50 years, this is a prime acquisition candidate. Or other instances where we've covered companies like Dendreon with its novel cancer vaccine Provenge and I think at that time a lot of people a couple of years back or even last year said Dendreon that's a great takeover candidate for a lot of companies. But I think what we've seen with both these drugs Benlysta and Provenge is that it's really the companies have sort of reported lackluster sales. Which is really made companies on the buying side really sort of risk averse because now it's sort of okay, well do I really want to pay a premium for a drug that even though it's approved might not actually have that great of a launch after approval. So I think what we've seen in terms of the trend side, in terms of deal structures that companies are increasingly building in, I guess you could say into the deal areas where, you know, you would have to show (a) that your drug is approved and you'd have to meet certain milestones before you get an extra amount. So, yeah, that's definitely one area. And I think another interesting trend is that from the large pharma side, if you're the small biotech or if you're planning an exit, I think what I would say is if you're the CEO at a small biotech, you really want to try to start talking to large pharma or whoever you're trying to approach regarding either partnership or maybe even a strategic exit much earlier in the process. So maybe that potential buyer or that partner could start looking at, you know, the drug's development much earlier. For example in phase 2, whether or not these are the right clinical endpoints that the large pharma partner would want you to start taking a look at. Because then it gets more difficult if you're pitching your company to a potential buyer or a potential partner and they disagree with you on the clinical endpoints that you've chosen for your trial or maybe even the comparator drug that you've chosen for your clinical trial. So I think just talking to large pharmaceutical companies or potential partners earlier in the process, earlier in the drug development process will really help you as a startup biotech or even a small to midsized biotech company save cost and time. BJ: So Kimberly, I know you mentioned earlier that oncology and neurology are some of the hot areas. Can we talk first about what are some of the things you're seeing in the area of oncology? KH: Sure. I mean I think in the area of oncology right now one of the major scientific conferences coming up is the American Society of Hematology Conference next month, December actually where a number of companies will be presenting key data. I think most notably every year, everyone sort of looks out to Celgene to see what they'll be presenting. But there's definitely a lot of interest from, you know, smaller companies such as YM Biosciences, Insight, and also Seattle Genetics. I think a lot of people will be watching out for their data being presented there. In oncology right now, I think the key really is for a startup biotech or a company that is trying to get funding, you really need to start thinking about developing your lead candidate with a biomarker or some type of companion diagnostic because increasingly what we've seen is that it just helps with reimbursement. It really smooth out the FDA approval process if you as a company can really show the agency that your drug has a specific response in these particular group of patients, and the higher the response rate, the better basically. I think one of the key poster child I guess examples of this really is Pfizer's newly approved lung cancer drug crizotinib, which received FDA approval with a diagnostic by Abbot, which basically tests for this specific mutation on the ALK gene and currently only 4% of patients in lung cancer have this. So I guess on one side even though the response rates are higher, I guess from a company's standpoint, you'd really only be able to market this therapy to I guess a smaller percentage of patients of the overall market. But from a cost standpoint, you know, instead for going for an application and then having it get rejected and then refilling again, why not just develop it from the get go with a companion diagnostic or with a biomarker strategy much earlier on. And there are now a number of companies that will help you sort of find and identify potential markers for any of your oncology candidates. There's a private company I spoke with, Biovista that is actually a biomarker company and they have a novel platform and technology to actually help you identify particular markers. So that definitely is one trend that is very common right now. BJ: And I believe Biovista will be presenting at the OneMed Forum in San Francisco. KH: Oh, great. BJ: In the area of neurology, any thoughts on some big trends there? KH: Sure. In the areas of neurology, I think the hottest two sectors from an investment standpoint that I always hear about is really, you know, still in the area of Alzheimer's. There's still a lot of interest in Alzheimer's and increasingly a lot more interest in multiple sclerosis, companies developing novel multiple sclerosis therapies or second generation MS therapies to the newly approved drugs currently on the market. And I think this sort of explosion of interest in MS therapies really started with Novartis with Gilenya's approval, which is the first oral MS pill for the treatment of multiple sclerosis. And I think with that in terms if you look at the MS development right now, there are a number of companies developing new oral therapies in MS. But I think really the opportunity right now for neurology and sort of the billion dollar market really still has to be Alzheimer's disease. I think next year will be a pivotal year for companies developing therapies in Alzheimer's because next year at the Alzheimer's meeting ICAD, I believe it's mid next year, Wyeth I guess now Pfizer will be announcing pivotal results for their phase 3 trials from their Alzheimer's immunotherapy, sorry it's an antibody Bapineuzumab. I think with that, the industry will sort of see well, okay amyloid therapies, do these actually work or not. Because I guess giving you the background, a lot of drugs in Alzheimer's has historically been sort of I guess, it's been coined the term graveyard of failure, so the number of companies through the last five years that have really failed to develop their compounds further in phase 3. So I think just having that first disease-modifying therapy will be a huge jump for, you know, companies developing Alzheimer's drugs. But the deals are still happening despite this and there's still a lot of startup companies especially along the west coast area developing novel Alzheimer's therapies. BJ: Well hopefully, we'll see some of those companies at the OneMedForum, which is in San Francisco. I've been with Kimberly Ha who is the global editor for BioPharm Insight. She will be moderating the panel at the OneMed Forum on January 11th on emerging developments in companies in the biotechnology space. Thanks so much for joining us today, Kimberly. KH: Thank you, Brett. BJ: This is Brett Johnson from OneMedRadio signing off in New York. Good day.