The Life Sciences in New York State

Biotechnology Business Development - Book Available Now

I'm honored to have made a small contribution to this excellent collection of articles and essays on biotech business development. Do check it out and let me know if it is helpful.

Best Practices in Biotechnology Business Development

Experts from a wide range of disciplines have composed best practices
based on their experiences and expertise, creating a vital toolbox
covering a broad spectrum of topics. These best practices will enable
you develop a better understanding of the key elements in these
operations and empower you to better manage their implementation.

Pfizer suddenly discovers biotech

Normally a story like this would be greeted with a yawn. However, with Pfizer, they have suffered the double whammy of Lipitor's impending genericization and the failure of torcetrapib. So to make Wall Street happy, they announce their new willingness to be more of a biotech company.

I've never bought into this argument that pharma and biotech - which I define as parenteral peptides and proteins - are so different. Yes we're talking about different ways to manufacture and deliver these drugs. But at the end of the day, it's about having an organization that can develop and commercialize an innovative product.

Lipitor was the fifth statin to market, with a marginally better efficacy profile versus competitors. Yet Lipitor is a $9 billion product. Compare this with Exubera, which is by all accounts a flop. My point here is that if Pfizer gets their hands (likely through major acquisition) on an innovative "biotech" product, they will likely succeed with it. Hence, the last sentence in the quote below is key.

I wouldn't be surprised if there were an army of analysts at Pfizer HQ on 42nd Street analyzing M&A opportunities. Pfizer will acquire the successful developer, then use their proven skills to successfully commercialize any "biotech" product they acquire.



Pfizer's future rests with biotech

Pfizer has already announced a plan to invest $10 million a year for the next five years to help start-up biotechs in San Diego. Expect to see Pfizer snapping up biologics from smaller drug developers and investing more money in biotech companies in the months and years to come.

Failure is about to become an option in China

I find it quite interesting that Chinese legislators are now beginning to recognize the inherent value in failure. I've had more than one scientist tell me that there is no such thing as "failure" in the scientific method. Every experiment, whether successful or not, is an opportunity to learn something new.


Chinese scientists given freedom to fail

Research, especially within the pharmaceutical industry, is as dependent on failure as it is on success. Far more potential drugs fail than succeed and for each one that is left by the wayside, lessons can be learned to improve the chances of another molecule making it to market.

However, there is currently a great deal of pressure on Chinese scientists to only report successes and the science and technology minister, Wan Gang, is said to have told lawmakers that this is hampering innovation by preventing researchers taking risks.

"It's difficult to make achievements in independent innovation if the scientific research departments and scientists don't tolerate failure," Bai Chunli, vice president of the Chinese Academy of Sciences (CAS), was quoted as saying.

There have also been several cases where scientists have falsified or stolen results - something academics blame on the highly pressurised research environment.

Generic epo about to hit the market in Europe

Novartis wins the race to bet a generic version of epo approved in Europe. Truly a watershed day in biotech, in my view. Will we ever see generic epo in the US? That's the question...

Bloomberg.com: Germany

Novartis is first in a race among generic companies including Germany's Stada Arzneimittel AG to enter the $7 billion market dominated by Johnson & Johnson and Amgen Inc's branded versions of the drug. Sandoz sued U.S. regulators last year to win approval to copy the human growth hormone.

Zingo approved

If you've ever had a child who needed an IV, you would appreciate the value of a product like this.

Anesiva Receives FDA Approval for Zingo

Zingo is a ready-to-use, single-use, needle-free system that delivers sterile lidocaine powder into the epidermis of the skin and provides topical, local analgesia in one to three minutes after administration. This rapid onset, which may be especially useful in pediatric populations and busy emergency room settings, means the product can be incorporated into a medical procedure allowing uninterrupted care, an important advantage over current options.

Massive gift for Cornell

A significant chunk of this will go to Ithaca. Great!!

Unprecedented $450 million gift

The largest portion of the gifts to Weill Cornell is $250 million from Joan and Sanford I. Weill, chairman of WCMC's Board of Overseers. Of that amount, $25 million will fund the Ithaca-based Joan and Sanford I. Weill Institute for Cell and Molecular Biology and its interdisciplinary research collaborations between WCMC and Cornell in Ithaca. The Weills also are giving an additional $50 million to help fund the Life Sciences Technology Building, currently under construction on the Ithaca campus. In recognition of their generosity, the building will be named Weill Hall. Taken together, the $300 million from the Weills is the largest gift Cornell University has ever received.

More biotech partnerships expected

This has certainly been the case over the past 4-5 years. But with patents expiring and late-stage pipelines being what they are, the trend should continue.

More biotech partnerships expected

"We expect this trend to continue, as big pharma and established biotechs seek to add new technology platforms and supplement their clinical pipelines,"

The most recent announcement coming out of Merck supports this.

PE in Biotech: If it were only this simple

Nice idea, but it's challenging to find the right opportunity for this model. Once you start risk-adjusting developmental projects, the value that you obtain for them may not provide much cash in order to service the debt in the short term.

Where I do see opportunities to execute LBOs in biotech are with CROs and other service companies who have a blend of service revenue and a pipeline with substantial upside. If you sell the pipeline, the cash can be used to build the service side by acquiring low-cost infrastructure in India, Asia, Russia, and Eastern Europe. Once the new assets are in place, cash flow will increase in order to service the debt over the long term.

Private-equity firms not making splash in biotech

Seasoned biotech companies should be prime candidates for private-equity firms, which could strip out less profitable projects and sell them to drug giants or through initial public offerings.

Now that's an LBO...

What I find interesting about the Mylan/Merck KGcA deal is that it's being described in a private equity/LBO context. You don't see/hear that very often in an industry known for its "merger of equals".

24/7 Wall St.: Mylan's Shareholders Act As LBO Lenders

It isn't just the fact that there will be dilution, it's the fact that the leverage today and tomorrow is going to be a large burden for years ahead. This also just took away almost any shot that Mylan Labs could ever be considered a potential takeover target itself.

Still not exuberant about Exubera

Other than the medical, economic, practical, and legal concerns, this is a fine product...

To be clear, I truly think this is a fine product, and is a good option for many diabetics. What I've objected to is the persistent labelling of this product as a "blockbuster." Clearly, it was never going to be one.

And so here we are...

Pfizer Drug for Diabetes Is Lagging

But Pfizer’s marketing may not be enough to overcome the medical, economic, practical and legal concerns that have hurt Exubera. In theory, the drug’s biggest advantage over standard injectable insulin is that it is more convenient and does not require needle pricks. In reality, though, the Exubera inhaler is bulky and can be hard to use, doctors say. The device is nearly as large as a tennis ball can when it is open, and must be repeatedly pumped before the insulin can be inhaled. Making matters worse, Exubera doses differ from those for standard insulin, and converting doses can be complicated, the doctors say. Also, insurers have been reluctant to pay for Exubera, which costs about $5 a day, compared with $2 to $3 a day for injectable insulin.