the future for generics business models factors for...

www.plg-uk.comIssue 21 | August 2014

The Future for Generics Business Models

Factors for Success in the OTC Market

Non-Patent Exclusivities in Major Markets

Faster Market Access for Precision & More Personalised Medicines

Sink or Swim in Europe: the Role of Business Development7th European Pharma Licensing Symposium

23rd & 24th September 2014 Prague, Czech Republic

Following the forma on of the new PLG CEE group, the EPLS mee ng travels to Eastern Europe this year for its 7th event. This two day mee ng will include presenta ons, talking tables and plenty of networking opportuni es both formal and informal. There will be an online delegate contact system open to all registered delegates, with a dedicated one to one mee ng area available to all delegates throughout the mee ng.

Presenta ons will include:

Overview of Growth Opportuni es in Europe Are Emerging Markets Paying Their Way? The Role of HTA in Assessing BD Opportuni es and Deals Building By Acquisi on New Business Models with Pharma De Risking Rare Disease Projects Launch Strategies in Europe

‘Talking Tables’With deals becoming increasingly complex, the interac ve Talking Tables format will enable a range of hot topics to be debated in small groups. The ndings from each debate will then be presented to the group followed by a panel discussion based on delegate feedback. Issues to be debated will include:

Termina on Issues in Agreements IP Aspects Including SPCs Performance Issues in Agreements Current Deal Trends Consensus Market Forecas ng Co Branding Due Diligence and Regulatory Issues

Venue Marrio PragueThe hotel is centrally located close to Prague Old Town. For those arriving on Monday evening, the informal networking will begin with a drinks recep on held at the hotel from 7pm. Tuesday is a full day mee ng with plenary presenta ons followed by Talking Tables that will focus on a range of deal issues with real examples. The delegate fee includes a endance at the drinks recep on on Monday evening, mee ng on Tuesday and Wednesday, all catering throughout the event, including the gala dinner on Tuesday evening. Discounted accommoda on rates have been put in place at the Marrio Budapest and are available to book from our website, www.plgeurope.com/Prague_2014.

Issue 21 | August 2014 3www.plg-uk.com

WelcomeAs we move into the summer of 2014, several high headline deals have been reshaping the industry, most notably the strategic shifts made by some of the major companies including Merck & Co, Novartis, Lilly, GSK and Bayer where there has been a refocusing into certain areas of operation – vaccines, animal health, oncology and OTC. In keeping with this, in this issue we have included articles which look into the generics world and also at the OTC markets.

However the deal activity has not been confi ned to the key strategic areas, with major takeovers being discussed and agreed. So far, AstraZeneca has eluded Pfi zer but the acquisition of Shire by AbbVie appears to be going ahead. It will be interesting to see how this will pan out in the implementation stage, whether Shire will remain an individual operating unit or be absorbed into the main company. One of the key drivers behind the strategic alignments is the fact that profi t margins in different parts of the business vary signifi cantly and to date the smaller companies have arguably been more successful in the orphan space. As an exemplar of this, we have an article from Sobi (Swedish Orphan BioVitrum) reviewing its business model.

Behind the big headline deals there is the day-to-day BD activity and keeping you up to date on developments there are articles on adaptive licensing and the value of non-patent exclusivity – an increasingly important area, as many products do not benefi t from patent cover.

It is good to see that the individual national PLGs are also going from strength to strength, with the UK group reaching its 30th anniversary and the inaugural meeting of the PLG CEE being held in Warsaw, Poland. This autumn, we are looking forward to an exciting programme for the European joint PLG meeting in Prague, Czech Republic. In the meantime, I hope that this issue will make for some interesting summer reading!

Sharon FinchEditor, Business Development & Licensing Journal

The Business Development & Licensing Journal is available free to PLG members. If you would like to join the PLG please visit the website at www.plgeurope.com.

Contents4 Generics – Is the Commodity

Business Model Sustainable? By Guy Clark, Chief Strategy Offi cer, AMCo

8 A Review of Changes & Factors for Success in the OTC Market

By Tim Brady, Director of Business Development, Thornton & Ross; and Ros Munday, OTC Consultant Ltd

12 Channeling Niche Pharma Products to the European Market

By Stefan Fraenkel, SVP Corporate Development; and Anders Edvell, VP Head of Partner Products, both of Sobi (Swedish Orphan Biovitrum)

18 Overview of Non-Patent Exclusivities in Major Pharmaceutical Markets

By Roxanne P Spencer, RPS IP Management; and Nicholas Adams, Consultant

24 Connectivity, Adaptive Pathways & Deal Structuring

By Helen Cline, Legal Director, Pinsent Masons; Paul Ranson, Partner, Pinsent Masons; Prof Sarah Garner, Associate Fellow & Adaptive Licensing Project Director CASMi; and Christian Hill, Director, MAP BioPharma and MAP MedTech

30 Book Review: Transforming Big Pharma, by John Ansell

By Roger Davies

32 Deal Watch

By Sharon Finch

Publisher’s note: The views expressed in the Business Development & Licensing Journal are those of the authors alone and not necessarily those of the PLG. No responsibility for loss occasioned to any person acting or refraining from action as a result of the material in this publication can be accepted by the Publisher. While every effort has been made to ensure that the information, advice and commentary are correct at the time of publication, the Publisher does not accept any responsibility for any errors or omissions. The right of the author of each article to be identifi ed as the author of the work has been asserted by the author in accordance with the Copyright, Designs and Patents Act 1988.

Sharon FinchEditor

Neil L BrownFrance

Riccardo Carbucicchio Switzerland

Roger CoxPlexus Ventures, Benelux

Pamela DemainMerck & Co, USA

Jonathan FreemanMerck Serono, Switzerland

Jürgen LanghärigBavarian Nordic A/S, Denmark

Irina Staatz GranzerStaatz Business Development & Strategy, Germany

Enric TurmoEsteve, Spain

Joan ChypyhaAlto Pharma, Canada

Sharon FinchT: +44 (0) 20 8654 6040E: [email protected]

Advertising Enquiries

Adam CollinsT: +44 (0) 1737 356 391E: [email protected]

Business Development & Licensing Journal is published by:The Pharmaceutical Licensing Group (PLG) LtdThe Red HouseKingswood ParkBonsor DriveKingswoodSurrey KT20 6AY

www.plgeurope.com

Editorial board Editorial Enquiries

4 Business Development & Licensing Journal www.plg-uk.com

About the AuthorGuy Clark, Chief Strategy Offi cer, AMCo, is

responsible for developing and implementing

AMCo’s strategic plan, with direct

responsibility for execution of the company’s

growth through M&A, new product

development and international expansion.

E: [email protected]

Many of the pharmaceutical companies that have become major players in the generics

industry have, in recent years, diversifi ed away from low-price, high-volume “commodity” generics by acquiring companies with branded products, and supplemented the pipeline by developing or licensing-in innovative medicines.

For example, Teva, although it is known as one of the leading generic companies in the world, has had Copaxone (glatiramer acetate injection for relapsing multiple sclerosis), a speciality medicine, in its portfolio for more than a decade. Whereas in 2001 speciality product sales at Teva were less than 20% of the total of US$2bn, in 2013 they were 50% of $20bn. This refl ects a company strategy to acquire speciality product companies such as Cephalon in 2011, with its range of branded speciality medicines including Provigil (modafi nil), Nuvigil (armodafonil), Fentora and Actiq (fentanyl) and Treanda (bendamustine). Similarly, in 2013, Actavis acquired Warner Chilcott, a company specialising in women’s health branded products, and then in 2014 it also acquired the US company Forest for $25bn.

AMCo is another case in point. It was formed by the merger of two companies owned by the private equity company, Cinven. In August 2012 Cinven purchased Mercury, a company operating in the fi eld of off-patent medicines, for £465m. In October 2012, Cinven also acquired Amdipharm, another off-patent branded pharmaceutical company, for

£367m. The two companies were merged in January 2013 and AMCo is now pursuing a strategy both to acquire more marketed branded medicines and establish specialist-led sales forces in countries around the world.

The diversifi cation strategies of generic companies raise the question whether these companies believe the “commodity” generic model is sustainable in the future.

Drivers for Generic MedicinesSeveral recent presentations provide some clues. Alan Sheppard, Principal, Thought Leadership, Global Generics, at IMS Health, explains that the driver of generic medicines in developed markets is the containment of the drugs bill by either regulated or market-force reductions in product prices following loss of exclusivity. Nevertheless in Europe there are still marked differences between countries. According to IMS data, the volume share of generics in the prescription-bound, unprotected, retail market is more than 80% in Germany but less than 50% in Italy, Belgium and Austria. Apart from these latter countries where generics may increase market share, there is little opportunity for signifi cant sales growth of generics in Europe over the next fi ve years as the number of blockbuster products coming off patent reduces and governments and competition continue to drive down prices.

In the emerging markets, the main driver of generics is to ensure the provision of affordable medicines for the local

Generics - Is the Commodity Business Model Sustainable?Recent diversifi cation behaviour amongst generic companies raises questions as to whether they believe commodity generics have a future. Whilst strong drivers for generics still apply in both developed and emerging countries, diversifi cation strategies such as entering the speciality medicine market, developing biosimilars and breaking into the OTC sector, are increasingly common.

By Guy Clark, Chief Strategy Offi cer, AMCo


>>

population and to bolster the local generic manufacturing industry that also competes in a global market. The recent granting of compulsory licences for on-patent medicines to local generic companies in India demonstrates the point. Hence the emerging markets are likely to have high growth in sales volumes of generics but it is likely to be a fi eld in which it is diffi cult for Western generic companies to be successful, with their higher costs, quality and compliance standards, and without the market knowledge that gives local companies such an advantage.

One consequence of this is that Western generic companies are buying local companies in emerging countries, with their knowledgeable local management teams, in their quest to become the lowest-cost producer for particular types of generic products. For example, in December 2013, Mylan announced the acquisition of the Agila generic injectables business from the Indian company, Strides Arcolab, for $1.6bn, and has owned Matrix Labs in the same country for several years. Recent announcements by Teva also underpin the focus to expand in emerging markets.

The Need for Diversifi cationAnother diversifi cation model adopted by some generic companies is to develop biosimilars. For example, Actavis describes biosimilars as “one of the pillars of Actavis’ strategy to drive long-term growth”. To this end it has established collaborations with Amgen in 2011 and Synthon in 2012

covering Herceptin, Avastin, Rituxan and Erbitux. Mylan was even earlier signing a deal with the Indian company Biocon to develop biosimilars in 2009, and Sandoz and Teva have had success launching new biosimilars in Europe. Due to the cost and complexity of product development, biosimilars is not an area where the little guys can easily compete, and so this is very much a “playground for the rich”.

Yet another diversifi cation trend is to enter the OTC market. This is a popular strategy with many companies that are tired of having their selling prices regulated, mostly downwards, and having to deal with declining margins. In August 2013 Stada acquired the UK OTC company, Thornton and Ross (T&R) for $345m. T&R has the second ranked cough brand and is the market leader in head lice products in the UK. Since then Stada has acquired the Russian Aqualor brand for treatment of sinusitis and sore throat for around $180m and, in June 2014, it acquired the Claire Fisher natural cosmetics brand in Germany.

A further perspective on the future of generic companies is provided by Claudio Albrecht, the former CEO of Actavis and now CEO of Albrecht and Prock. Claudio’s point is that “generics should be essentially similar but nowadays the industry wants to be essentially different”.

The pipeline of the generics industry is patent expired products. In 2013, ten of the top 15 products ranked by sales were biologicals and other “hard-to-make” products such as asthma drugs in inhalers.

Biosimilars is not an area where the little guys can easily compete, and so this is very much a ‘playground for the rich’.

Western generic companies are buying local companies in emerging countries, with their knowledgeable local management teams, in their quest to become the lowest-cost producer for particular types of generic products.


Table 1 shows the top 15 products by sales according to PMLIVE (April 2014).

This trend is likely to accelerate. As such the number of top-selling, oral, small-molecule products reaching patent expiry will diminish and that is one reason why generic companies either need to develop their businesses in emerging markets, or need to diversify.

Claudio describes the emerging market hypothesis as “hype” because of the number of challenges in these markets,

such as pricing, protection of local industry, compliance and political and economic volatility. As a result, he believes the traditional approach to generics will not work. His view is that generic companies need to diversify into biosimilars or large speciality brands, rather than focus on emerging markets.

Generics Pricing and Micro-EconomicsThe argument that generic companies need to diversify to grow and to remain profi table brings us back to the question, is the commodity business sustainable? Micro-economic theory provides some pointers. In the developed countries, including the US and many countries of the EU, a high proportion of prescription-bound, unprotected sales volume is from generic products (e.g. over 80% in Germany). The generic products with the same active ingredient have to be identical and as such can be considered “commodities”, although they may be sold under a different trademark. The demand for long-established pharmaceutical products where patients have been stabilised on a particular drug is mostly price inelastic. As a result, micro-economic theory explains that in countries where generic prices are set by market forces, for example in the UK, as

Rank Product 2013 Sales $bn Growth % Molecule Patent Expiry*

1 Humira 11.5 20 Biopharmaceutical

2 Remicade 9.9 9 Biopharmaceutical

3 Enbrel 8.9 4 Biopharmaceutical

4 Seretide / Advair 8.4 5 Small molecule inhaled

5 Abilify 8.0 -3 Small molecule oral 2015

6 Mabthera / Rituxan 7.4 4 Biopharmaceutical

7 Lantus 7.3 15 Biopharmaceutical

8 Crestor 6.9 -9 Small molecule oral 2013

9 Avastin 6.7 8 Biopharmaceutical

10 Herceptin 6.5 3 Biopharmaceutical

11 Cymbalta 5.2 2 Small molecule oral 2013

12 Spiriva 4.9 8 Small molecule inhaled

13 Lyrica 4.8 11 Small molecule oral 2016/18

14 Glivec 4.7 0 Small molecule oral 2015/19

15 Neulasta 4.4 7 Biopharmaceutical

Table 1: Top 15 products by sales in 2013

* Patent expiry only shown for oral small molecules.

p1

p4

p3

q1 q4 q3

Pric

e

Quantity

COGs

S1

S4

S3

Inelastic Demand Rational behaviour

D

Figure 1: The eff ect of inelastic demand on generic pricing

>>


the volume of supply increases, the price falls by a greater percentage. This soon leads to a situation where some suppliers incur losses as the price falls below the supplier’s cost of goods.

This is what has happened in the UK with a number of generic products as illustrated in Figure 1. Two decades ago, this market was attractive for new entrants, and there were several outward supply shifts (i.e. an increased number of suppliers, moving the supply curve to the right), ranging from UK start-ups and other European players and then from further afi eld, in particular from India.

This increase in supply quantity (S3) led to a market where goods were sometimes being sold at a loss (equilibrium point p3-q3). Since then, many suppliers have left the market and other companies have consolidated, thus enabling the price, linked to a basket of supplier prices, to rise to more rational levels for products in general (move from S3 to S4). Micro-economic theory teachers often make an assumption that buyers are rational, whereas practice often shows differently. There have been periods where buying has clearly not been rational in the UK, and other developed markets.

In other countries where generic prices are determined by government regulation, for example, where each supplier has to launch at a lower price than the last generic, the effect is to deter third or fourth entrants unless they are a lower-cost producer then the earlier entrants. However, given the time it takes for

products to get regulatory approval, it can still lead to a position where multiple players co-exist and additional incentives are used to sell competing products, such as bonus stocks.

The conclusion is that whether generic product prices are set by competitive forces or by government, the prospects for the “commodity” generics in developed countries are bleak. Volume growth is generally stable and price is constantly under pressure, and sometimes at a 90% discount or more within days of loss of exclusivity. The result, shown in Table 2, has been companies exiting the market, consolidation of suppliers and price rationalisation.

The generic industry is adapting to the new “commodity” environment in the developed countries. One approach has been M&A to offset declining margins. By M&A the acquiring companies seek to increase market share and reduce costs by economies of scale and by moving manufacture to low-cost countries. The top four generic companies that have been active in M&A – Teva, Sandoz, Actavis and Mylan – now have sales between $5bn and $10bn, signifi cantly higher than the followers such as Aspen, Stada and Dr Reddys, all with sales of less than $3bn. There are still a large number of small generic companies so there is plenty of scope for further M&A.

The second approach to dealing with the “commodity” environment has been for smaller companies to focus on niche generics. Here the barriers to entry are

higher, the sales levels are too small for the larger companies, and the niche players with specialised generics can build relationships with the relevant payers.

ConclusionsSo in answer to the question “Is the Commodity Business Model Sustainable?” ….. “Yes, but not in the same format”. The new format will be further consolidation of larger companies and survival of smaller companies by focusing on niche generics. This will provide opportunities for creative companies that can apply fl exible manufacturing and commercial strategies. Such companies can be adaptable across multiple markets, without trying to apply a one-size-fi ts-all approach, by embracing the strength of local knowledge along with supporting central resources as appropriate.

Recent TrendsUSA Consolidation

Canda Consolidation Rational pricing

UK Consolidation Exit market Rational pricing

Germany Consolidation Exit market

Scandinavia Exit market Rational pricing

Netherland Consolidation Exit market

France? Consolidation Exit market

Portugal? Exit market

Table 2: Recent trends amongst companies in “commodity” generics


About the AuthorsTim Brady is Director of Business Development

at Thornton & Ross (a subsidiary of STADA),

where he is involved in acquisitions of both

consumer and Rx branded medicines, as well

as larger transactions. In recent years Tim

has specialised in building new subsidiaries

of European pharmaceutical companies in

the UK.


Ros Munday is a specialist OTC Consultant.

She has a sales and marketing background

and prior to becoming a consultant in 2011,

she worked for a multinational pharma

company managing its UK portfolio of

P & GSL OTC medicines.


In the UK last year STADA acquired Thornton and Ross for £221m. STADA has since completed two more OTC

deals and is on the hunt for more. There have also been signifi cant changes in the retail and wholesale sector with the acquisition of Celesio (owner of Lloyds Pharmacy group) by the US company McKesson for $8.6bn and the acquisition of a 45% stake in Alliance Boots by US-based Walgreen for $6.7bn. Walgreen is said to be considering whether to purchase the remaining 55% partly to benefi t from a lower tax rate.

According to the CEO of Reckitt Benckiser, the OTC industry is still very fragmented with no single company having more than 5% market share and consolidation is expected to continue. According to IMS OTC Global Analysis data published by OTC Toolbox, the 2013 worldwide top ten companies (pre-2014 consolidation) in terms of non-prescription sales were as shown in Table 1. Following the recent M&A activity it is expected that GSK/Novartis will move to number one, and that Bayer will be close behind in number two position.

The Global MarketAccording to IMS, the global OTC market sales (at manufacturer prices) in 2013 increased by 6% compared with the Rx market growth of 1.5%. There has been higher growth in the OTC market for six years driven by price reductions in the Rx sector caused by patent expiries, generic competition and governments’ and

insurers’ pressure on prices. As a result, the OTC share of total pharma sales has increased from 11% to 12%. The fastest market growth is in the emerging markets.

The European MarketIn Western Europe the major OTC markets are in Germany, France and Italy where growth in 2013 was 4% or less. In the EEA the country with the highest per capita spend on OTC medicines is Switzerland followed by Belgium, Germany, Finland, France and Italy. The countries with the lowest per capita spend, at less than 40% of the level in Germany, are the UK, Greece and Spain.

The UK MarketLooking at the UK market, there has been very little growth over the past ten years in spite of government encouragement of self-medication by consumers including the switch of classifi cation of some medicines from “prescription-only” to “pharmacy” (POM to P), where a product can be recommended and sold by a pharmacist without a prescription. According to IRI, the compound annual growth rate over this period was 1.8%. In 2013, the UK’s OTC market grew by 2.2% mainly driven by growth in sales of smoking cessation products. The cough/cold sector declined because of the lower incidence of colds and fl u this last winter.

When POM to P products were fi rst introduced, the OTC companies believed it would generate signifi cant growth in the UK market. This was based on

A Review of Changes & Factors for Success in the OTC Market The last two years have seen signifi cant changes in the OTC sector as companies restructure and consolidate. This year there has been the acquisition by Bayer of Merck & Co’s OTC business for $14bn, the 63.5%/36.5% joint venture between GSK and Novartis with combined sales of $10.9bn, the acquisition of the Chinese company Dihon by Bayer, and Reckitt Benckiser has bought the KY brands from J&J.

By Tim Brady, Director of Business Development, Thornton & Ross; and Ros Munday, OTC Consultant Ltd


>>

encouragement of patient self-care by government and a supportive regulatory agency (MHRA). Since 2001, 19 active ingredients have been switched. Some examples of switches are shown in Table 2 and there are many more.

Sales of some of these switch products, such as Boehringer Ingelheim’s Flomax (tamsulosin) for treatment of benign prostatic hyperplasia (BPH), have been disappointing. The reason is twofold: fi rstly the now “time-poor” pharmacist has to follow a complex protocol involving completion of a detailed questionnaire with the patient before dispensing the product; and secondly, a patient receiving the product from the pharmacist has to pay for it whereas by visiting the doctor and receiving a prescription, he can get the product free (see Table 3). This is a particular barrier to sales when the target audience is, as in the case of BPH, likely to fall into the category qualifying by age for free prescriptions.

Each individual switch candidate will have various, maybe specifi c reasons for success or failure, not least in some cases

the pharmacist’s caution in recommending treatment for a previously undiagnosed condition. Consumer embarrassment may also be a factor depending on the nature of the condition itself. It seems that products to treat more serious diseases such as BPH are less successful as “P” medicines than less serious diseases such as hay fever.

One of the approaches being considered by some companies to expand the availability of existing brands is to try and get “P” medicines re-classifi ed as general sales list (GSL) in the UK. However, outside the UK, the scope for growth by POM to P switches is currently limited because of the more cautious approach of local regulators, different medicine classifi cation and reimbursement systems and regulations in each country.

We should maybe also consider how many remaining therapeutic categories there are which are likely to be considered safe for self-medication. In addition, the very restricted marketing exclusivity period permitted for a newly switched molecule seriously limits the opportunity to recover

Rank Company OTC Market Share

Sales Growth

1 J&J 3.7% +1.7%

2 Novartis 3.7% +6.4%

3 Bayer 3.6% +3.9%

4 Sanofi 3.5% +5.5%

5 Pfi zer 2.5% +2.0%

6 PGT Healthcare (P&G +Teva JV) 2.4% +7.7%

7 GSK 2.3% -1.2%

8 Boehringer Ingelheim 2.2% +3.8%

9 Reckitt Benckiser 1.9% +12.3%

10 Takeda 1.5% +8.9%

Table 1: Top ten companies by non-prescription sales in 2013

Ingredient IndicationSimvastatin High cholesterol

NorgestrelEmergency hormonal contraception

ChloramphenicolAcute bacterial conjunctivitis

Diclofenac Symptomatic pain relief

Aciclovir ointment Herpes simplex

TamsulosinBenign prostatic hyperplasia

Azithromycin Chlamydia

Sumatriptan Migraine

Naproxen Period pain

Table 2: Examples of POM to P product switches in the UK

Classifi cation Dispensed By

Payment By Available From

Prescription-only (POM) Pharmacist NHS / Private Pharmacy

Pharmacy (P) Pharmacist Patient Pharmacy

General sales list (GSL) Anyone Patient Anywhere

Table 3: Product pathways to the patient in the UK

The OTC industry is still very fragmented with no single company having more than 5% market share and consolidation is expected to continue.


the associated costs of switching and launching a new product.

So if POM to P is not the driver for growth what is? According to audit data in the UK, new products account for only a small part of growth except where there is a new treatment such as e-cigarettes. Most manufacturers rely on line-extensions to grow brands. For example at Thornton and Ross, the growth of Covonia, the second ranked cough medicine in the UK, has been driven to a large extent by new product development (NPD) where new formulations and new combinations are marketed under an umbrella brand (Figure 1).

Covonia uses one trademark with the line-extensions, usually containing additional ingredients, where the different packs are distinguished by a sub-title under the trademark such as “Night Time Formula” or “Dry Tickly Cough”. Another approach is to use one trademark with additional text. For example, Reckitt Benckiser’s OTC ibuprofen range is marketed under 11 different variations of the trademark, ranging from the original “Nurofen” to “Nurofen Plus” (ibuprofen + codeine) to “Nurofen Tension Headache” (342mg strength tablets).

Aside from POM to P switching, consumer health companies use existing medical device technology to bring new products to market. The time required to get products registered as medical devices, with a CE mark, is a few months compared with years for a medicine, and the cost is 10-100 times lower. The

products can be promoted using samples and health professional endorsement and medical claims can be made for the product. In addition, in the UK, these products can be sold in consumer self-selection environments, such as a supermarket or convenience store where there is no requirement for a pharmacist to be present when the product is sold. For existing well-known brands, the medical device route for NPD makes sense but new brands have still often struggled to win signifi cant market share. An exception to this is the e-cigarette boom, none of which are currently controlled by marketing authorisation or medical device regulations.

One of the possible reasons why new brands fail to make headway in the UK market may be because of the high fees and margins demanded by the dominant multiple retail and wholesale groups to sell new brands, plus the high cost of consumer advertising. In the UK, where there is no restriction on ownership of pharmacies, there is a high concentration of pharmacy outlets amongst large multiple retailers and supermarkets. For example, Boots plus the multiples account for around 90% of the total OTC sales. Boots alone can account for between 30% to 50% of the market.

In contrast, in Germany, France and Italy, there is legislation restricting the number of pharmacies owned by one company. In Germany a pharmacy must be owned by a pharmacist and no pharmacist can own more than four pharmacies,

which must be in the same area. There is also a restriction on retail companies owning pharmacies.

These regulations caused Celesio to come unstuck following its acquisition of a German online pharmacy DocMorris in 2007 for €200m. When Celesio tried to open a pharmacy store in Germany it was sued by the German pharmacists. In May 2009, the European Court of Justice (ECJ) ruled that the pharmacy ownership regulations in Germany and elsewhere were not in breach of European Union law. Each member state can decide how to regulate pharmacy ownership. In October 2012, Celesio sold DocMorris for €25m, a loss of €175m versus the original purchase price. The question for Walgreen, who may buy the remaining 55% of Alliance Boots, is whether the “inversion” tax benefi t offsets the potential lack of growth in some of the major OTC markets in Europe.

In summary, the UK OTC market has been a low-growth market but there are opportunities to grow established brands by line extensions and use of medical device classifi cation. However, making a success of new brands is diffi cult because of the high cost of entry in terms of distribution and marketing.

In 2011, NPD since 2002 accounted for 79% of Covonia's sales

Sales

2002 2003 2004 2005 2006 2007 2008 2009 2010

MucusLozengesDry & TicklyCatarrhCold & FluChesty NPDVapour Drops2002 Range

2011 2012Plan

Figure 1: The importance of NPD in Covonia’s growth since 2002

>>

PLG EVENTS

www.plgeurope.com

PLG UK Masterclass Wednesday 10th September to Thursday 11th September 2014

(London, UK)

7th European Pharma Licensing Symposium Tuesday 23rd September to Wednesday 24th September 2014

(Prague, Czech Republic)

PLGS XIV General Assembly Thursday 16th October to Friday 17th October 2014

(Girona, Spain)

NPLG etworking inner Wednesday 29th October 2014

(Copenhagen)

PLG UK Introductory Training Course (ITC) Monday 17th November to Wednesday 19th November 2014

(Marriott Lingfield Park, UK)

PLG MSc Winterschool Wednesday 3rd December to Thursday 4th December 2014

(London, UK)

PLG UK Networking Reception Thursday 4th December 2014

(London, UK)

PLCD Autumn Meeting Thursday 4th December to Friday 5th December 2014

(Berlin, Germany)

PLCD Advanced Seminar Monday 15th December to Wednesday 17th December 2014

(Berlin, Germany)


About the AuthorsDr Stefan Fraenkel MBA, PhD, Ass Prof, is

Senior Vice-President and Head of Corporate

Development at Sobi. Dr Fraenkel has broad

experience from the pharmaceutical and

biotech industry where he has held a number

of international commercial and business

development positions. Dr Fraenkel has a

background as a management consultant.


Dr. Anders Edvell, MD, MBA, PhD, is

Vice-President and Head of Sobi Partner

Products. Dr Edvell has held a number of

medical and commercial positions and has

broad international experience from the

pharmaceutical and biotech industry. In

addition Dr Edvell has clinical and medical

experience from his time being a

practising physician.


The European Challenge: Diversity and Complexity

Europe is often perceived from a distance as a homogenous marketplace, particularly when

viewed from the US or Japan. Nothing could be further from the truth: Europe is a diverse and complex marketplace made up of more than 40 distinct country-centred markets, where each such market may in turn contain several regional market-layers. The European Union (EU) offers a certain degree of harmonisation; however this is only with regard to the co-ordination of drug approval: when a drug is approved, it is valid for all countries within the EU – and that’s it.

Commercialisation of a drug in Europe involves dealing with each country’s reimbursement system as well as non-reimbursement based commercialisation, which is often multi-layered with regional differences, sometimes down to the hospital level. Across Europe there are also different practices for supply chains; differences in patient demands, health care traditions and medical standards; as well as the more obvious differences in languages, culture and currencies, and fi nancial practices. In addition, it has been increasingly diffi cult for pharmaceutical

companies to gain access to customers with new regulations in place in many countries regulating the interactions between industry and healthcare practitioners.

To be sure, diversity is not the only challenge: there is also complexity inherent in European markets. This stems from the fact that the various European markets frequently inter-relate and change. The inter-relationship is both explicit and formal and more subtle and informal.

The pricing systems crucial for any commercial success in Europe provide an example. Many European countries typically utilise reference-systems for assigning a price tag to a submitted drug. This means that a set of other countries are used as a reference for the price for that drug, and a specifi c formula is employed to obtain the price for a given market. However, these pricing systems are not only designed differently in each market, they also change over time, typically with regard to which reference markets are included. As a consequence, the pricing sequence for how a specifi c drug is introduced into each European market may mean the difference between success and failure.

To make this even more challenging, some markets, for example the Italian

Channeling Niche Pharma Products to the European MarketIf you are in a position where your fi rm is to commercialise a niche drug in Europe, you might typically have considered two conventional options; to build up your own commercial platform or to make a deal with a large pharmaceutical company or multiple regional or territorial distribution partners. The fi rst approach requires signifi cant time and resources while the second leaves you locked without strategic options for your product and a sub-optimal fi nancial return. The recent emergence of the European Partner Commercialisation Platform business model may offer a new alternative by providing commercial solutions customised for your product, superior fi nancial returns, and a full range of strategic options for the future of your product. An additional benefi t of a European Partner Commercialisation Platform approach is that it may speed up access to innovative niche medicinal products for patients across Europe.

By Stefan Fraenkel, SVP Corporate Development; and Anders Edvell, VP Head of Partner Products, both of Sobi (Swedish Orphan Biovitrum)


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market, employ several layers of pricing: national, regional and local, which requires dedicated capabilities at each level. Clearly, to succeed in such an environment there is a need for capabilities that can not only understand each local practice, but can also understand the relations between local and national, and then between the various national markets. To obtain such knowledge it is necessary to establish excellent relationships with representatives for these various bodies. These diversities and complexities suggest that there is a need for a commercialisation platform that can deal both with the local differences and with their inter-dependencies: commercial practices that are decentralised yet with pan-European harmonisation.

Going Alone in Europe: The Strategic ChallengeAn increasing number of companies now possess commercial rights for a single, niche drug that meets specifi c market needs. Typically these fi rms are focused on their domestic market, and their eventual approach to Europe presents several challenges. Europe is, as described above, a complex marketplace made up of numerous heterogeneous markets, each with their own logic and timelines for reimbursement. Building a successful European infrastructure requires both time and critical mass, factors which are increasingly diffi cult to justify in the context of a single niche product. There is a risk that small companies may signifi cantly delay or sub-optimise their support behind the product for European patients.

The Conventional Partnering Approach Historically the only alternative to going alone was to adopt a partnering strategy. This could be with either a large pharmaceutical company with established pan-European commercial presence, or a series of Europe-based distribution partners each focusing on a number of local markets. Such an approach usually leads to a structure in which the licensor receives an upfront payment followed by royalties on sales. However, there are several limitations to such an arrangement depending on the partnering approach used, including: • The royalty revenues represent only

a minor part of the total revenues generated.

• If the in-licensed product does not represent a large commercial opportunity (which is almost never the case with a niche product in relation to larger blockbuster products), most larger partners will not allocate suffi cient dedicated resources to optimise product commercialisation. As such resources are outcompeted by the major proprietary products promoted by the large pharmaceutical partner (i.e. opportunity cost).

• Loss of strategic freedom - once the product is out-licensed, the partner will typically possess all commercial rights for the given markets for a long period. In the event of unforeseen strategic situations and when the

Europe is often perceived from a distance as a homogenous marketplace, particularly when viewed from the US or Japan. Nothing could be further from the truth.


return of rights would be benefi cial, this may not be possible. Such situations may emerge where you have acquired other products, whether niche or larger, which together with the out-licensed product would make it possible for you to establish your own commercial presence in Europe. In another situation, you may be approached by a third company wishing to buy your product to fi t its portfolio, or indeed your company, and offering you a signifi cant payment.

• Where a multi-partner strategy in Europe is adopted, for example with businesses in one or a few local markets, while these fi rms can offer local expertise, this approach fails to address all the challenges and opportunities arising from the required pan-European co-ordination of commercial operations. As such a multi-partner approach requires considerable internal co-ordination and administrative burden.

In summary, adopting a conventional partnering strategy may result in a sub-optimal return on revenues and no strategic manoeuvrability, while at the same time forcing you to maintain costly obligations, such as those related to manufacturing.

Until recently there was no viable alternative either to building up your own commercial capabilities in Europe or making a deal with a large pharmaceutical company or multiple parties. However, now there

is an attractive alternative: the European Partner Commercialisation Platform (“PCP”), offered by a few companies as a way to commercialise niche products in Europe.

The European Partner Commercialisation PlatformThe text below describes an approach to niche drug commercialisation in the European markets that has emerged as a practice over the last two decades or so. Our defi nition of a niche pharmaceutical product consists of two main features:

1. It is absolutely critical that the product is indicated for a certain AND well defi ned smaller patient population. However, this population might be larger than defi ned by the traditional orphan drug criteria. Products where sales could be leveraged by visiting GPs would not be considered as niche products.

2. A further aspect relates to the complexity of the clinical environment in which the product is used and the degree of clinical value the product brings. In our defi nition, a product indicated for a small population where there are already several other compounds is more of a commodity product and less of a niche product.

There are still only a few companies today operating some variant of the European PCP, which should not be confused with the many local businesses

offering commercialisation partnerships to one or a few local markets as mentioned above. In short, the European PCP may be understood as a specifi c company that engages in partnerships with fi rms that only have one or a few niche products, and conducts pan-European drug commercialisation in a manner that is synchronised across the various European markets. The PCP company is usually assuming full responsibility for the regional strategy, implementation and execution together with its partner. An example of such a company is Sobi (Swedish Orphan Biovitrum) or, more specifi cally, its Partner Product business unit.

The key capabilities of a PCP company include:- Partnership engagement, contracting

and management- Supply chain management- Pricing, including tendering - Managing Named Patient Requests- Sales management and operations- Marketing management and

operations- Medical and safety support- Regulatory support- Financial handling- Launch sequencing- Customised cross-disciplinary

leadership

Now, this may look like any pharmaceutical company, so what is unique about a European PCP? In short,

Box 1: Case study

Assuming commercialisation responsibility in Europe and beyond:

• A company was handed back the ex-US rights for its product from a large pharmaceutical company. The large pharmaceutical partner had moderate success with this niche product and the assumption is that it decided to abandon the partnership because the product could not make suffi cient return within its full portfolio.

• The licensor company has no infrastructure in Europe and does not have a strategic intent to build one. It decided to utilise a company operating a European PCP model and set up a long term partnership covering the pan-European and Middle East territories.

• Within six months of entering the partnership, and following a joint and collaborative effort from both parties to reintroduce the product into the market, the product’s trajectory had already improved signifi cantly.

>>


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its key features may be summarised in terms of:- Customised partnership seeking

mutual benefi ts- Flexibility and adaptability- Scalability and synergy- Learning that generates unique

commercialisation capabilities

Customised and Flexible Partnerships

Firstly and most importantly, any PCP company is dependent upon the partners seeking to commercialise their niche products in Europe. Therefore, the PCP company’s managers are keen to fi nd a specifi c commercialisation set up that fi ts each of its partners’ particular situations, rather than offering a standard fi t-for-all solution. The initial dialogue between the PCP company and its new partner is crucial as its outcome not only governs the commercial conditions between the two but also the very specifi c confi guration of PCP capabilities aimed at successful commercialisation.

Examples of the questions that need to be answered early in the partnership set-up discussions include: What is the long-term intention pursued by the partner and its product? What are the commercial objectives? What are the key factors that will enable fulfi lment of these objectives? And what specifi c confi guration of commercial capabilities must be utilised to that end? The relationship is tailored to address the partner’s needs. This may range from full commercialisation

support to partial engagements, such as sales and marketing only for approved drugs or Named Patient Usage and early access management with a regional or pan-European scope. Contracts can be short-term or long-term, with fi xed and predicable fees. The PCP company typically proposes a monthly service-fee together with a shared revenue level, that may be non-linear, or any combination of these.

As part of this customised approach, the PCP company is able to provide dynamic deals, for example where an initial full service contract is gradually transformed into a distribution and/or in-licensing deal only, in cases when a partner has decided not to build up its own capabilities at all in the region. It is also possible to adopt a different service mix for different parts of Europe; all this to make sure that the partner’s short-term and strategic intentions are supported. Example case studies of different and tailored partnerships set up by a PCP company are illustrated in Boxes 1 and 2.

In addition to the fl exibility that can be built into such partnerships for the commercialisation of niche products in Europe, there are at least two other factors that make the PCP model unique. One arises from economic and commercialisation synergies due to handling a portfolio of niche drugs rather than a mix of major drugs with one or two niche products only. The second stems from operational synergies; the synergies are inter-related.

Box 2: Case study

Utilising a European PCP company for early market entry while maintaining strategic options:

• A company waiting for approval of its fi rst product in Europe decided to partner with a PCP company. The market potential of the product’s fi rst indication was smaller than that of the second indication, which was at phase 3 stage. As such the fi rst indication did not fi nancially motivate the company to handle the product itself in territories outside the US. The approval of a second larger indication might be a more attractive basis to start expanding its own business into new regions outside the US.

• In order to keep all strategic options open for the future so that its fi nal ex-US strategy could be decided when the second and larger indication’s outcome was known,

the company set up an initial three-year partnership with a European PCP company. The European PCP company was utilised to handle both initial Named Patient Usage distribution and later, after market approval, a full launch.

• A little later, the company also decided to utilise the same platform for distribution in all markets ex-US. The partnership set-up made sure that the important product could reach patients globally without delay. At the same time the company could continue to create its business strategy without being locked out of potential future strategic options.

Until recently there was no viable alternative either to building up your own commercial capabilities in Europe or making a deal with a large pharma company or multiple parties. However, now there is an attractive alternative.


Benefi ts of Niche Product FocusA business platform that is dedicated to commercialising a portfolio of niche products in the European markets offers unique resource and knowledge-sharing opportunities where the various capabilities – sales, marketing, medical, regulatory supply, pricing and leadership – are all set up for niche products only, with their inherent logic, compared with major drugs. Furthermore, therapeutic-area synergies may also emerge, where several products can be channelled towards the same target groups.

All this implies that the commercialisation costs may be shared across a set of products, to offer the most cost-effi cient solution to the various product-holders. It is also of the greatest importance to ensure patient access, since utilisation of existing infrastructure and resources will make it possible for the company (via the PCP) to charge a price for its innovative product that is acceptable and sustainable for payers in various European markets. This in turn would mean that the drug can be made available for patients with niche diseases.

However, while cost-effi ciency is central to profi t it is not the only advantage provided by the PCP model; it also enables the emergence of unique capabilities that cannot be offered by other models.

Unique Experience Generation and SharingClearly, a company that operates with several niche products in the

market conducts the various local commercial activities on a daily basis, such as tendering, price negotiations, reimbursement negotiations, sales activities and supply, across the whole of Europe. In contrast, a larger pharmaceutical company that commercialises only one or two niche products will not be even close to the volume of niche product-related activities conducted and thus the local experience and insights obtained.

The experience and insights generated by a PCP company’s operations constitute a core foundation for the continuous re-building and updating of commercial capabilities customised for niche products in Europe thereby ensuring maximum effi ciency. As the European markets are highly dynamic, changing frequently and sometimes in a unpredictable manner, a PCP company’s ability to keep updated constantly at the local level enables the provision of unique knowledge and understanding on how best to co-ordinate critical pan-European commercial activities.

In summary, the PCP model provides a range of commercial solutions that are customised for niche products on a case-by-case basis. This approach offers the potential for a significantly better financial outcome with a full range of strategic options for the future of a product. Also, this option is likely to speed up the access of innovative niche medicinal products for patients across Europe.

A European PCP may be understood as a specifi c company that engages in partnerships with fi rms that only have one or a few niche products, and conducts pan-European drug commercialisation in a manner that is synchronised across the various European markets.

The PCP model provides a range of commercial solutions that are customised for niche products on a case-by-case basis. This approach off ers the potential for a signifi cantly better fi nancial outcome with a full range of strategic options for the future of a product.

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About the AuthorsRoxanne Spencer is an intellectual

property strategist, and founder of RPS IP

Management. With a particular focus on

pharma, she provides intellectual property

consulting services including due diligence,

landscaping, and patent portfolio assessment

and management.


T: +1.609.712.0418

Nicholas Adams is a business development

professional with considerable experience

leading a range of international deal types

(including in- and out-licensing, divestments,

royalty buy-outs and M&A). Nick is currently

consulting for several European and US

biotech/pharma companies.


When assessing a product’s commercial aspects, it is important to understand all

potential exclusivity available. Market and data exclusivities are in addition to, and concurrent with, any patent protection covering the therapeutic or its use.

Whilst other articles provide specifi cs either for a particular exclusivity1 or a single country, we review the non-patent data protection available for pharmaceutical products in the US, Europe, and the BRIC and other countries; these represent approximately 80% of the global market by 2011 spending,2 and are key countries in any global licensing deal.

1. Data & Market ExclusivityMost countries with established pharmaceutical markets provide periods of data exclusivity (DE) for both novel small-molecule and biological therapeutic products to delay generic competitors (Figure 1). The combination of DE (which prevents a generic applicant from referencing an innovator’s data) and market exclusivity (which prevents approval of a generic application) can provide from fi ve to ten years of market protection for brand name drugs.

DE is evolving in the BRIC countries.3 While China and Russia have enacted statutory protections, India has consistently stated that it will not implement any DE provisions.4 Brazil has data protection laws to prevent unfair commercial use but there is no formal DE for human

pharmaceuticals; it appears that if a product has no patent protection, a generic may be approved.5

2. Paediatric ExclusivityTo improve the understanding of pharmaceuticals in paediatric populations, the US, EU, Japan, and Canada provide additional exclusivity periods to manufacturers who conduct certain clinical studies.6 Generally, paediatric patients are considered to be younger than 18 or 21 years, with the precise defi nition and subgroups varying between countries.

Notably, paediatric exclusivity (PE) may be attached to all exclusivity periods in the US and to Orphan Drug Exclusivity in the EU (see Figures 1 and 2).

3. Orphan Drug ExclusivityWhile many countries have incentives for developing medications for orphan indications, not all offer market exclusivity to orphan drugs. Orphan Drug Exclusivity (ODE) (see Box 1) is available in the US, EU, Japan, and South Korea, and China is establishing a framework for orphan drugs (Figure 2).7

United StatesData ExclusivityDifferent periods are available for small-molecule drug products approved under a New Drug Application (NDA) per Section 505 of the Federal Food, Drug, and Cosmetic Act (FD&C Act) 10 and for biologics approved under a Biologics

Overview of Non-Patent Exclusivities in Major Pharmaceutical MarketsPatent protection is the mainstay of exclusivity for new pharmaceutical products. However, the 7-12 years necessary to bring a pharmaceutical product to market consume a substantial portion of the 20-year patent term, and some promising products may have limited or no patent protection available. Health authorities have therefore introduced several non-patent exclusivities unique to pharmaceuticals to encourage the development of products for children and rare diseases, and to compensate for regulatory delays.

By Roxanne P Spencer, RPS IP Management; and Nicholas Adams, Consultant


License Application (BLA) per the Public Health Service Act.11

Small molecules which represent the fi rst approval of the active moiety are considered New Chemical Entities (NCEs) (see Box 2). NCE exclusivity prevents the US FDA from accepting an application for use of the same active moiety in any indication that relies upon the innovator’s preclinical and clinical data, but does not prevent FDA from accepting an NDA with another applicant’s own data.

Abbreviated New Drug Applications (ANDA, 505(j) applications), and 505(b)(2) applications, can be fi led after only four years, and before expiration of the fi ve-year NCE exclusivity period, with a paragraph IV certifi cation that any Orange Book-listed patents are either invalid or not infringed. Otherwise, such applications cannot be submitted until the end of the NCE term.

If additional clinical data are required to demonstrate effi cacy of a new use or formulation of an approved active moiety, a three-year period of New Clinical Investigation (NCI) exclusivity is possible. NCI exclusivity prevents the approval of a generic application that relies upon the innovator’s data for the approved indication or formulation with exclusivity, though FDA may accept an NDA with another applicant’s own preclinical and clinical data. Products approved under the 505(b)(2) pathway or new esters of previously approved active ingredients may themselves be eligible for a period of NCI exclusivity, and multiple NCI periods are

Num

ber o

f Yea

rs

USA0

4

8

Paediatric exclusivity

NCE

RussiaAustraliaCanadaS. KoreaChinaJapanEurope

Figure 1: Data protection periods available for New Chemical Entities

Num

ber o

f Yea

rs

Paediatric exclusivity

ODE

USA S. KoreaChinaJapanEurope0

4

8

12

16

20

Figure 2: Data protection periods available for orphan drugs

Box 1: What is an “orphan indication”?Orphan indications have country-specifi c defi nitions. • US: a disease which affects fewer than 200,000 persons in the US (or more than

200,000 individuals if “there is no reasonable expectation that costs of research and development of the drug for the indication can be recovered by sales of the drug in the US”) 8

• EU: a disease which affects fewer than 5 of 10,000 individuals 25

• Japan: a disease with fewer than 50,000 cases in Japan and for which there are no other treatments 7

• Korea: a disease which affects fewer than 20,000 people in Korea.

Box 2: What is an “NCE” in the US?The statutory defi nition of an active moiety – the molecule responsible for the physiological or pharmacological activity – excludes portions that make it a salt, ester, or a non-covalent derivative (e.g., complex, chelate, or clathrate).9 Thus, while covalent derivatives, such as amides, were considered NCEs, new salts or esters of previously approved NCEs were not eligible for additional NCE exclusivity without showing that the ester was critical for the physiological or pharmacological action of the drug. In 2012, FDA issued two decisions which changed this interpretation: the withdrawal of NCE status for Torisel (an ester of the approved moiety sirolimus, Rapamune) and the fi nding that Veramyst (an ester form of fl uticasone propionate) would not be considered an NCE.26

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possible for a single product (e.g. multiple indications or formulations).

A pathway for similar biologic products was established in the Biologics Price Competition and Innovation Act (BPCI Act), but FDA is still developing industry guidance for the approval of biosimiliars. The BPCI Act provides DE periods for reference biologic drugs which would prevent FDA from accepting any follow-on application for any indication for four years, or granting marketing approval for any such application for 12 years.12

Paediatric ExclusivityNDA holders of small-molecule drug products who complete clinical investigations in paediatric populations in response to FDA’s “written request” are eligible for PE.13 Sponsors may propose studies to FDA to form the basis of the written request. The studies do not need to be successful in order to receive the exclusivity benefi t.

PE can only be awarded if there at least nine months of at least one exclusivity period (data or patent) remaining, and as FDA has 180 days to review the study report, studies should be submitted at least 15 months before expiration of exclusivity. PE is not available for products without DE or an Orange Book-listed patent, nor for biological products approved under a BLA.

Upon completion of the paediatric studies, six months is attached to all relevant DE periods and patent exclusivities listed in the Orange Book (see Figures 1 and 2 on previous page). These extend the period for which FDA cannot approve an ANDA or 505(b)(2) application. Notably, the extension applies to all dosage forms, formulations, and indications of applicant’s products which contain the active moiety.

Orphan Drug ExclusivityOrphan drug designation must be requested prior to submission of a marketing application, and more than one sponsor may have orphan designation for the same active moiety and condition. However, ODE is only granted to the fi rst to receive approval. During the ODE period, an abbreviated application for the same product and indication cannot be approved; a product with the same active moiety that is shown to be clinically superior in terms of effi cacy, safety, or contribution to patient care can be approved.

ODE applies only to the approved indication (which may be narrower than the initial orphan designation), though a product can receive multiple ODE periods with concurrent or overlapping terms.

Examples of products that have benefi ted from these exclusivities in the US are illustrated in Table 1 and Box 3.

European UnionData ExclusivityIn the EU, small molecules and biologic medicinal products – defi ned as any substance or combination which can be used to treat or prevent disease in humans – are eligible for the same exclusivity periods.14 New medicinal products can receive eight years of DE coupled with two years of market exclusivity, and a potential one-year extension (known as “8+2+1”) for a potential of 11 years exclusivity. An authorisation for one or more new therapeutic indications that demonstrate “signifi cant clinical benefi t in comparison with existing therapies” must be received during the initial eight-year period to obtain the extension.14

Under the centralised procedure, abridged applications referencing the innovator’s data cannot be fi led until expiry of the eight-year DE term, and cannot be approved until the end of the two-year market exclusivity term (or the additional one year extension). Applications for generic medicinal products under Article 10 (1) of Directive 2004/27/EC are similar to the US ANDA, and the products must demonstrate bioequivalence to the reference product. Applications for hybrid medicinal products under Article 10(3) of Directive 2004/27/EC are likewise similar to the US 505(b)(2) pathway.

Product Company PE ODE Indication (Year of Approval)

Gleevec (imatinib mesylate)

Novartis Yes Yes

Chronic myelogenous leukaemia (2001)b; dermatofi brosarcoma protuberans (2006); aggressive mastocytosis (2006); chronic eosinophilic leukaemia (2006); myelodysplastic & myeloproliferative diseases (2006); gastrointestinal stromal tumours (2008); Philadelphia-positive acute lymphoblastic leukaemia (2013)

Viread (tenofovir disoproxil fumarate)

Gilead Yes Yes HIV-1 infection (2001)b,c; paediatric HIV infection (2010)

Soliris (eculizumab) Alexion Noa YesParoxysmal nocturnal haemoglobinuria (2007)b; atypical haemolytic uraemic syndrome (2011)

Torisel (temsirolimus) Pfi zer Yes Yes Renal cell carcinoma (2007)b

Sabril (vigabatrin) Lundbeck Yes Yes Infantile spasms (2009)b

Istodax (romidepsin) Celgene No Yes Cutaneous T-cell lymphoma (2009)b; peripheral T-cell lymphoma (2011)

Ampyra (dalfampridine) Acorda No Yes Symptoms of multiple sclerosis (2010)b

Imbruvica (ibrutinib) Pharmacylics, Janssen No Yes Mantle cell leukaemia (2013)b; chronic lymphocytic leukaemia (2014)

Table 1: Selected products that benefi t/ benefi ted from PE and ODE in the US

Notes: aApproved under a BLA.

bInitial approved indication. cNon-orphan indication

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Paediatric ExclusivityAs part of the centralised marketing authorisation, manufacturers must either agree with the European Medicines Agency (EMA) upon a Paediatric Investigation Plan (PIP) before submission of a Marketing Authorisation Application (MAA), or seek a waiver; the paediatric population is defi ned as between birth and 18 years.15

PE is awarded following completion of the PIP, and inclusion of the results in the product information. As in the US, studies do not need to be successful, and PE extends the term of a supplementary protection certifi cate (SPC) by six months for non-orphan drugs. Orphan drugs can receive an extension of ODE (though no drug appears to have yet benefi ted from this extension).16

A Paediatric-Use Marketing Authorisation (PUMA) which provides ten years of market exclusivity may be sought for non-patented medicinal products that are exclusively developed for children in accordance with a PIP.

Orphan Drug ExclusivityAn application for orphan drug designation must be made prior to fi ling the MAA

through the centralised procedure. Upon fi ling the MAA, it is necessary to demonstrate that the designation criteria for the indication are still valid and that the medicinal product provides a signifi cant benefi t to patients.

Following marketing authorisation, ODE provides ten years of market exclusivity which prevents approval of an application for the same drug for the same indication. All approved orphan drugs undergo a review after fi ve years, and the exclusivity may be reduced to six years if the drug no longer satisfi es the original designation criteria.17 The ODE period may be extended following compliance with a PIP as described above.

JapanFormally, Japan does not have DE per se, but rather re-examination periods to collect additional information on a drug’s safety and effi cacy.18 During the re-examination periods, a generic drug manufacturer cannot fi le equivalency data and reference the innovator’s safety and effi cacy data. It appears that small-molecule and biological products are subject to the same re-examination periods.

A re-examination period of eight years is provided for drugs containing a new active ingredient. There is a re-examination period of six years for new combination drugs or drugs with a new route of administration which required new clinical investigations for approval, while drugs with new indications or new dosages have a re-examination period of between four to six years.19 It appears that “signifi cant changes” compared with the existing product are likely to provide six years, while other changes only provide four years. At the end of the re-examination period, the innovator must fi le the results of post-marketing surveillance to confi rm safety and effi cacy.

Clinical trials in a paediatric population to collect safety or effi cacy information may extend the re-examination period to ten years.18,19

Generally, orphan designation is sought during development, and provides a re-examination period of up to ten years.

ChinaChina characterises drugs as new (a drug that has not been previously marketed within China), generic, or import (which

Box 3: Example of exclusivities in the US - Treanda

Treanda (bendamustine HCl) for Injection was approved by FDA in 2008, fi rst for the treatment of chronic lymphocytic leukaemia (CLL) and then for use in treating indolent B-cell non-Hodgkin lymphoma (iNHL). As an NCE, Treanda was awarded fi ve years of DE as well as two separate periods of ODE for treatment of CLL and iNHL. All of these periods were extended by six months of PE. Several patents are listed in the Orange Book, including composition of matter coverage (COM on diagram) which runs to September 2029.

02010Number of Years

NCE + PE expiredSept 2013

1st Approved for CLLin March 2008

COM + PE expiresSept 2029

Approved for iNHL in Oct2008; ODE + PE expires

May 2016

COM NCE ODE PE

CLL ODE + PE expiresSept 2015

COMgranted May

2013

>>


generally have a marketing authorisation in the exporting country). Domestic applicants can fi le marketing applications for either new or generic drugs while import drugs are manufactured abroad and imported into China by non-Chinese companies.20,21

Any drugs which contain an NCE 20 receive six years of DE, which prevents a generic manufacturer from fi ling an abridged application which relies on the innovator’s data. An application may be fi led if it contains a second manufacturer’s own data.20

For a new drug manufactured in China, an observation or monitoring period of no more than fi ve years can be established, which prevents the State Food and Drug Administration (SFDA) from accepting applications for the registration of a generic or an import drug.

South KoreaSimilar to Japan, South Korea has a re-examination process. New drugs have a six-year re-examination period, new routes of administration have a six-year re-examination period, and new indications have a four-year re-examination period.1 An abridged application showing bioequivalence to a reference drug cannot be fi led during the re-examination period.

CanadaCanada offers DE only for new medicinal ingredients, and not for new dosage forms or indications.22 Innovative drugs can qualify for a combined market and

DE period, which prevents the fi ling of an abridged application for six years and its approval for eight years.

In addition, data from clinical trials of the use of the drug in paediatric patients submitted within the fi rst fi ve years of the DE period results in a six-month extension of exclusivity.22 This additional PE is awarded for completing the studies even if they indicate that a contraindication or warning statement should be added to the labelling.

AustraliaAustralia provides DE only for medicinal products with “new active components” (defi ned as a substance or substances that are primarily responsible for the biological effect).23 Generic applications that establish bioequivalence with a reference product and that rely upon data submitted by an innovator cannot be fi led until the expiry of the fi ve-year DE period.

There is no mechanism for PE, and orphan drug designation provides priority review and a waiver of registration fees, but no additional market exclusivity.7

RussiaIn August 2012, Russia enacted a six-year period of data protection for pharmaceuticals to prevent a generic applicant from relying on an innovator’s data.24 There do not appear to be any provisions for any additional exclusivity.

ConclusionThere will always be, and needs to be, a balance between encouraging

the innovation of effective and safe pharmaceutical products and the cost to society in paying for medication. With a lengthy development process, ever-increasing costs and high attrition rate, it is important that pharmaceutical/biotech companies are able to recoup their development costs, and the provision of market exclusivity is essential to the development of innovative products.

Ideally, patents would provide suffi cient exclusivity. However, this is not always the case and the provision of data/ market, orphan drug and paediatric exclusivities provide valuable protection to products that might not otherwise be developed.

The most comprehensive set of exclusivities is in the US, EU and Japan. However, South Korea and more recently China and Russia have introduced non-patent protection, though India is notably absent in providing non-patent protection.

From a licensing perspective, non-patent exclusivities are important to consider for the development of products with exciting effi cacy and safety data but a poor patent position. It can make the difference between a product being a commercially viable licensing opportunity, or not.

References1. International Federation of

Pharmaceutical Manufacturers &

Associations (Geneva) 2011. “DE:

Encouraging development of new

medicines”. Available at: www.ifpma.

With a lengthy development process, ever-increasing costs and high attrition rate, it is important that pharmaceutical/biotech companies are able to recoup their development costs, and the provision of market exclusivity is essential to the development of innovative products.

>>


org. [A review of national laws relevant

to data protection.]

2. IMS Institute for Healthcare Informatics

(Parsippany, NJ, US), July 2012. “The

Global Use of Medicines: Outlook

Through 2016”. Available at: www.

imshealth.com

3. Vashisth S, Singh G, Nanda A, “A

comparative study of regulatory trends

of pharmaceuticals in Brazil, Russia,

India and China (BRIC) countries”. J

Generic Med Bus, J Generic Med Sect,

2012;9(3):128-143

4. Barpujari I, Nanda N, “Weak IPRs as

Impediments to Technology Transfer -

Findings from Select Asian Countries”.

J Intellect Prop Rights, 2013;18

(September):399-409

5. Valente V, “Generics in Latin

America: An analysis of the Brazilian

experience”. J Generic Med,

2006;4(1):30-36

6. Walters S, “Report to WHO concerning

international guidelines for paediatric

medicines”. Paediatric Regulators

Network Meeting (February 2010).

Available at: http://www.who.int/

childmedicines/paediatric_regulators/

meetings/en/index.html

7. Song P, Gao J, Inagaki Y, Kokudo N,

Tang W, “Rare diseases, orphan drugs,

and their regulation in Asia: Current

status and future perspectives”.

Intractable Rare Dis Res, 2012;1(1):3-9

8. 21 CFR § 316.21 “Verifi cation of

orphan-drug status”

9. 21 CFR 314.108 “New drug product

exclusivity”

10. 21 U.S.C. § 355, “New drugs”

11. 42 U.S.C. § 262, “Regulation of

biological products”

12. 42 USC § 262(k), “Licensure of

biological products as biosimilar or

interchangeable“

13. FDA Guidance for industry, qualifying

for paediatric exclusivity under section

505A of the Federal Food, Drug,

and Cosmetic Act, Revised . FDA.

September, 1999

14. Directive 2004/27/EC of the European

Parliament and of the Council of

31 March 2004 amending Directive

2001/83/EC on the Community code

relating to medicinal products for

human use

15. Regulation (EC) No.1901/2006 of

the European Parliament and of

the Council of 12 December 2006

on medical products for paediatric

use and amending Regulation (EEC)

No 1768/92, Directive 2001/20/EC,

Directive 2001/83/ EC and Regulation

(EC) No 726/2004

16. European Commission, “General report

on experience acquired as a result of

the application of Regulation (EC) No

1901/2006 on medicinal products for

paediatric use (June 2013)”. Available

at http://ec.europa.eu/health/fi les/

paediatrics/2013_com443/paediatric_

report-com(2013)443_en.pdf

17. Article 8, Regulation (EC) No 141/2000

Of the European Parliament And of

the Council of 16 December 1999 on

orphan medicinal products

18. English Regulatory Information

Task Force, Japan Pharmaceutical

Manufacturers Association. (March

2013) “Information in English on Japan

Regulatory Affairs”. Available at http://

www.jpma.or.jp/english/parj/1303.html

19. Masuda S, “The market exclusivity

period for new drugs in Japan:

Overview of intellectual property

protection and related regulations”. J

Generic Med, 2007;5(2):121-130

20. State Food and Drug Administration,

Provisions for drug registration. SFDA

Order No. 28, 2007. http://eng.sfda.

gov.cn/WS03/CL0768/61645.html

21. Zheng X, “Regulation of medicines in

China”. WHO Drug Inf. 2012;26(1):3-14

22. Health Canada (2011), “Guidance

Document: Data Protection under

C.08.004.1 of the Food and Drug

Regulations”.

23. Therapeutic Goods Act 1989

24. Mueller L. (July 31, 2013) “DE in

Russia – One Year Later”. Available

at: http://bricwallblog.wordpress.

com/2013/07/31/data-exclusivity-in-

russia-one-year-later/, accessed 30

October 2013.

25. Butlen-Ducuing F, Rivière F, Aarum

S, Garcia J-L, “European Medicines

Agency Support Mechanisms Fostering

Orphan Drug Development”. Drug

News Perspect, Vol 23(1), Jan/Feb 2010

26. Hogan Lovells, “FDA denies 5-year

exclusivity to “stable esters” and

confi rms structure-based approach

to exclusivity”. Pharmaceutical &

Biotechnology Alert, October 4, 2012.

Available at http://hoganlovells.com

The most comprehensive set of exclusivities is in the US, EU and Japan. However, South Korea and more recently China and Russia have introduced non-patent protection, though India is notably absent in providing non-patent protection.


T he full development process for an innovative medicinal product can take up to 12-15 years and a typical fi nancial

investment of over £1 billion. Companies at all stages of the drug development pathway will make these large investments only when they have suffi cient certainty about the science, regulatory predictability, market size, market access, intellectual property and regulatory data protection.

Globally, healthcare systems are changing as governments implement policies to ensure healthcare costs are sustainable. The business climate for the industry is also going through a transition as we move from the dream of a blockbuster to a more stratifi ed – personalised – approach to medicines. In addition, patent expiries, declining research and development productivity, pipelines of more high-risk molecules often with smaller potential markets and market pressures, in particular the requirements to demonstrate value compared with existing treatment options, are all pushing drug companies to reassess their drug development models.

Historically, challenges faced by companies wanting to accelerate patient access to medicines have included the historic lack of a co-ordinated approach to evidence gathering by the regulatory and health technology assessment bodies. This is changing with public-private partnership collaborations, such as the UK Dementia Research Platform (UKDP), the increased willingness of patients to share their data and the digitalisation of healthcare, allowing patient self-reporting in real-time.

We look in more detail at these drivers for change below.

The Drivers for ChangeData MiningIn the current business climate, there is a push for BioPharma organisations to capitalise on the growing patient and health system data available and increasingly sophisticated data analytics techniques, as the industry looks for ways to accelerate medicines development and improve its competitiveness. Mining of genomic data, clinical data, and data from third party sources, such as patient electronic health records, medical images, biobanks and other data platforms, may provide new insights and a better understanding of disease mechanisms and therapeutic targets improving the success rates of target compounds. These tools are seen as having the potential to increase productivity at all stages of the drug discovery, development and delivery process. Such data driven approaches are also seen as a possible way to improve effi ciency by enabling drug candidates to fail faster.

Digital HealthMedical equipment and technology, monitoring everything from heart rate to blood chemistry, are now being networked and connected to electronic patient records, personal health records, and other healthcare systems with the potential for real-time analysis of these data streams. In addition, advances in communication technologies, such as mobile medical

Digital technologies, along with advancements in data analytics, genomic and diagnostic technologies, and access to real-world patient data, are making “adaptive” fast-track access for precision and more personalised medicines a real possibility. For companies holding the rights to potential breakthrough drugs, these new, more interactive and fl exible approval and reimbursement frameworks could create increased value earlier in the development phase.

By Helen Cline, Legal Director, Pinsent Masons; Paul Ranson, Partner, Pinsent Masons; Prof Sarah Garner, Associate Fellow & Adaptive Licensing Project Director CASMi; and Christian Hill, Director, MAP BioPharma and MAP MedTech

Connectivity, Adaptive Pathways & Deal Structuring

About the AuthorsHelen Cine is a legal director in the IP and Life

Sciences groups at Pinsent Mason LLP. She has

experience in all areas of intellectual property

law with a particular focus on patent and

regulatory law as it applies in the life

sciences sector.

T: +44 (0)20 7418 8240


Paul Ranson is a partner in the IP and Life

Sciences groups at Pinsent Mason LLP. Paul is

a specialist in the regulatory and commercial

needs of the pharmaceutical, biotechnology

and medical devices sectors.

T: +44 (0)20 7418 8274


Sarah Garner is a pharmacist based at CASMi

(http://casmi.org.uk), the Centre for the

Advancement of Sustainable Medical. Sarah is

also the Associate Director for R&D at NICE and

an honorary professor at UCL.


Christian Hill is Director of Market Access and

Government Affairs at MAP BioPharma and MAP

MedTech. This group offers consultancy services

that help medtech and biopharma clients

achieve optimal market access in Europe.



applications, are supporting active patient engagement in their own healthcare – allowing patients to communicate in real-time about their experiences with particular drugs and treatment regimes – facilitating the shift to more adaptive and fl exible approaches to clinical trials, drug approval and reimbursement.

New Levels of Transparency, Openness & CollaborationExtracting value from healthcare data for all its benefi ciaries (including clinicians, clinical researchers, pharmaceutical companies and healthcare policy-makers) will require new ways of working and, most importantly, new levels of transparency and openness.

Global transparency policies being developed aim to facilitate wider access to clinical data, making data mining possible. Many companies that have traditionally been intensely protective of their intellectual property are devising policies to share drug trial data and other data. In addition, the new Clinical Trials Regulation and the European Medicines Agency (EMA) proposed new policies will ensure that clinical trial data are more publicly available. Open source models for research are also becoming more prevalent. Recently, GlaxoSmithKline (GSK) and Novartis have deposited data on compounds active against the malaria parasite with the European Bioinformatics Institute. How this open source model will fi t within the traditional protected IP business model remains to be seen.

New Models for Clinical TrialsTraditionally, clinical trials have been designed to demonstrate how an experimental treatment affects the symptoms of a condition or disease over time in a large, representative patient population compared to a placebo or other alternative. However, based on the advances that have been made in stratifi ed medicine and health information technology, including the use of real-world data, the randomised, double-blind, placebo-controlled model may no longer be the best approach in all cases. The data do not typically demonstrate how medicines perform in a normal clinical setting; this can make it diffi cult for decision makers to determine accurately a medicine’s possible value and may subsequently restrict patient access.

New clinical trial models have been proposed to improve understanding of how a treatment will work in practice. It is suggested that if these new trial models were embedded in the adaptive approach to drug licensing, the approval and reimbursement status may be more certain and it may be possible to secure market access for drugs that provide a benefi t for subgroups of patients but do not pass the traditional evidentiary thresholds for approval and reimbursement.

Interestingly, Cancer Research UK has recently announced a revolutionary adaptive approach to clinical trials that aims to advance lung cancer treatment – the “National Lung Cancer Matrix” trial (see Box 1). As proposed, the trial model >>

Box 1: The ‘National Lung Matrix’ trial

This groundbreaking clinical trials collaborative project, in which patients with non-small cell lung cancer will be given specifi c drugs according to the genetics of their tumour, has been recently launched in the UK. The trials are scheduled to open later this year at a number of centres across the UK. Researchers will be given access to libraries of drugs developed by AstraZeneca and Pfi zer, 12 from AstraZeneca and two from Pfi zer – allowing several drugs to be tested at the same time, within one trial. Patients will be enrolled into the trial arm offering the drug that best matches their genetic profi le.

www.cancerresearchuk.org

Digitalisation is recasting the entire healthcare system allowing patient self reporting in real-time which could potentially have a quantum eff ect on drug development pathways, allowing patients to have a bigger voice and enabling them to communicate what is of benefi t to them.


recognises that every patient’s cancer is unique and adopts a more personalised approach, targeting particular genetic abnormalities in each patient’s tumour. The trial is a collaboration between Cancer Research UK, the UK National Health Service (NHS), and two drug companies, AstraZeneca and Pfi zer.

In another innovative ongoing project, a shared interest in the evidence base between regulators and payers has led to a range of work to explore how each can meet their own responsibilities with mutual benefi ts to both. The Salford Lung Study is an example of an ongoing real-world study in the UK to access the

benefi ts of a drug before it has been licensed (Box 2). The study is exploring the real-world benefi ts of a late-stage GSK investigational respiratory medicine alongside currently available treatments and is a collaboration between the biopharma industry, academia, medical informatics organisations and healthcare providers.

Creating Regulatory & Funding Predictability Medicines – with a few exceptions – require a marketing authorisation before they can be promoted for specifi c indications. Balancing the need for access to new drugs, particularly in life-threatening circumstances, with the need to ensure a positive benefi t/ risk profi le so as not to compromise patient safety, is an ever-present dilemma. Since thalidomide, and as a result of methodological advances, medicines regulators have been progressively more explicit about the evidence requirements for product authorisation in an effort to ensure safety and demonstrate effi cacy. However, some see current regulatory systems as being overly concerned with safety and a barrier to early patient access to new medicines. Whilst many patients expect drugs to be safe and look for recourse in the event of adverse events, others with serious life-threatening conditions may be less risk averse.

Although there are existing legal mechanisms in Europe and internationally that expedite access to both unlicensed

Box 2: The Salford Lung Study

The Salford Lung Study is an example of a new real-world study and is the fi rst attempt to carry out a pragmatic randomised clinical trial prior to registration of a new treatment. The study is exploring the real-world benefi ts of GSK’s BreoEllipta, a once-daily combination of vilanterol + fl uticasone furoate in a new dry-powder inhaler (DPI), for the treatment of chronic obstructive pulmonary disease (COPD), alongside currently available treatments. It represents a unique collaboration between the biotech and pharmaceutical industry, academia, medical informatics organisations and healthcare

providers. Importantly, joint scientifi c advice was requested and obtained from the UK MHRA and the UK National Institute for Health & Care Excellence (NICE) before the project commenced. It is utilising a linked database system including Salford’s e-Health records infrastructure and real-time and other integrated data collected from a variety of sources. Evidence generated from the study will complement GSK’s clinical trial programme.

http://thorax.bmj.com/content/early/2014/03/06/thoraxjnl-2014-205259.full

Data are now more regularly required to demonstrate that the product not only works clinically and provides some measurable benefi t relative to the standard of care, but that it also potentially off ers some economic advantages in terms of impacting on the overall cost of therapy.

>>


and licensed medicines, the current approach to the regulation of medicines poses particular challenges in the era of “stratifi ed medicines”. This involves looking at smaller groups of patients to try to fi nd ways of predicting which treatments are particularly suitable for different subgroups of patients, for example, those with specifi c genetic markers. There are practical challenges in building the clinical evidence base necessary for approval under current regulatory mechanisms where patient populations are very small.

There have been a suite of recent initiatives to update the regulatory system and facilitate drugs getting onto the market earlier without unduly compromising patient safety. For example, the EMA recently announced a pilot scheme for its adaptive licensing pathway (Box 3), in the UK the MHRA announced a new Early Access to Medicines Scheme (EAMS) (Box 4), and also worth mentioning is The Medical Innovation Bill, a legislative proposal in the UK to defi ne more clearly clinicians’ liability for prescribing unlicensed medicines in order to encourage the use of new innovative drugs (the so-called “Saatchi Bill”).

As to funding, pricing and reimbursement, the adaptive licensing scheme will, as indicated above and in the boxed texts, bring all stakeholders to the table earlier so that their respective priorities are clear at the onset and so the data package required will refl ect both licensing and reimbursement requirements.

It is envisaged that these new adaptive pathways will be a comprehensive route for new drugs, not only from a regulatory perspective, but also incorporating reimbursement and health technology assessment (HTA) elements.

It is however vital that companies and HTA agencies agree a fl exible approach to the pricing and reimbursement of such products. A possible solution may be managed-entry agreements or risk-sharing agreements under which a manufacturer and a payer or provider would establish specifi c conditions for reimbursement of a medicine. This may possibly be a useful stepping-stone towards the development of new pricing and reimbursement models.

In the UK the 2014 Pharmaceutical Price Regulation Scheme (PPRS) states that companies may request value-based appraisal of their new medicines (with such requests not to be unreasonably refused) and also that the launch price proposed to the UK Government’s Department of Health should be set at a level that is close to their expected value as assessed by NICE. Through the PPRS negotiations, fl exible pricing was introduced in 2009 and reaffi rmed in the 2014 scheme. This allows a scheme member to apply for an increase or decrease to a product’s original list price in light of new evidence or a different indication being developed. It may be that this approach is the most logical solution to the evidence base changing through adaptive licensing, in that it may justify a >>

Box 3: EMA adaptive licensing pathway

Adaptive licensing is a fl exible pathway for the approval of innovative medicines to treat unmet medical needs as understood in the current EU legislation. A staggered approach to market access is envisaged in which, after a multi-stakeholder planning phase in a “safe harbour”, a product is allowed earlier market access in a defi ned group of patients and under carefully controlled conditions; the licensing indications – and its price and reimbursement status – are progressively modifi ed in the light of greater knowledge from wider use.

It is anticipated that adaptive licensing will build on existing regulatory processes and extend the use of elements that are already in place, including scientifi c advice, centralised compassionate use,

the conditional marketing authorisation mechanism (for medicines addressing life-threatening conditions), patients’ registries and pharmacovigilance tools that allow collection of real-life data and the development of risk management plans.

A framework to guide discussions of individual pilot studies has been published and the EMA has advised that 20 companies have already applied and two medicines in development have already been selected to progress to the next stage. These successful companies will now be invited, with other stakeholders (e.g. payers and patients) to take part in an informal discussion without risk. The formal approval process will only commence after this stage.

Box 4: UK – Early Access to Medicines Scheme

The UK Government launched the EAMS scheme on April 7, 2014 for medicines that are in the licensing process but have not yet received a licence. The proposed scheme is unfunded and will coexist alongside the existing early access and early licensing European framework and is intended to support development and patient access in the UK to medicines being developed for life threatening or seriously debilitating conditions without adequate treatment options.

Under the EAMS, drug companies will have the chance to follow a three-stage, fast-track process for bringing their products to the market. They will be able to obtain a “Promising Innovative Medicine” (PIM) designation from the MHRA to signify, during the development stage of a new drug, the potential of that product for treating patients with life threatening or seriously debilitating conditions for which there is either no cure or where existing treatments are unsatisfactory. The companies could also obtain a scientifi c opinion which would allow doctors to prescribe the drug and can also be considered for a new licensing and rapid commissioning process being created by NICE and NHS England, called “commissioning through evaluation”.


higher price over time and for different indications. Obviously this may have an impact on royalty payments negotiated under partnering agreements and these adaptive approaches will need to be considered during negotiations – will the licensor want to, or be able to retain a right to, be at the table when price is being negotiated?

Impact on Deal StructuringThe drug development and delivery process is uncertain and the parties to partnering negotiations need to take a view on the importance and value of a new medicine when it is still in the early stages of development. We are seeing an increasing focus on market access and reimbursement issues. Companies seeking a cash-rich partner need to be prepared to differentiate their pipeline products; investors and collaborators are asking will it work, and if so, will it matter to patients, payers and healthcare systems? Data are now more regularly required to demonstrate that the product not only works clinically and provides some measurable benefi t relative to the standard of care, but that it also potentially offers some economic advantages in terms of impacting on the overall cost of therapy. As part of the due diligence exercise, companies are now often looking for signs of early engagement with the key opinion leaders, such as regulatory authorities, HTA bodies, payers, patients, and clinicians, to establish and gather data on the

real value of the product. Therefore, for companies seeking partners for new, early-stage products, it is critical to open early lines of communication with the key stakeholders and obtain input on what products will and what will not be of value. As discussed above, regulatory bodies, such as the EMA and the MHRA and HTA bodies, are becoming increasingly willing to work with companies to develop more effective clinical development programmes.

The most signifi cant leverage a licensor company can bring to the negotiating table is solid data to alleviate risk.The key to adaptive licensing will be the harnessing of real-world evidence to monitor the approved cohort with new digital tools and strategies. Adaptive clinical trial designs could provide valuable knowledge and information as to which patients respond to a particular therapy and why. Larger companies and public investors may value the early-stage proof-of-concept data if they feel more confi dent about the development and approval process for these drugs and have more confi dence in the predictability of the outcome. It is envisaged that the regulatory process under these new frameworks will be more interactive, fl exible and refl ective of the disease and patient being treated.

As past deals have shown, bidding wars can erupt when the data appear. AiCuris invested in collecting more data when its phase 2 results were not enough to attract good offers. The additional phase 2 data led to approaches by a number of

>>

These new fl exible pathways may also impact on the timing of deals and on the fi nancials.

It is envisaged that these new adaptive pathways will be a comprehensive route for new drugs, not only from a regulatory perspective, but also incorporating reimbursement and health technology assessmentelements.


potential partners and AiCuris secured a €110m upfront payment from Merck & Co for exclusive global rights to develop and commercialise candidates in its human cytomegalovirus portfolio, including letermovir, its lead compound which had fast-track status in the US.1

These new fl exible pathways may also impact on the timing of deals and on the fi nancials. Perhaps companies may be more reluctant to partner at early phase 2 and products that are accepted onto these new access pathways may command bigger upfront payments. Companies may also need to learn to partner with new players such as bioinformatics companies who, as discussed above, will have a crucial role in the more accurate profi ling of candidates.

Eroding IP & Regulatory Data ProtectionAccelerated access may impact on intellectual property and regulatory data protection and have commercial implications. Under EU legislation, newly authorised medicinal products may benefi t from an eight-year period of data protection and a ten-year period of marketing protection. The period of data and market exclusivity starts from the date of the granting of the marketing authorisation. There is no specifi c guidance, as far as we are aware, on when the period of data and market exclusivity will start for authorisations granted under EU procedures for earlier approval, but it is arguable that it

commences on the grant of the earlier approval and not on full approval.

Earlier approvals, under the adaptive pathway will initially focus on a narrowly defi ned indication with few patients and research will generally continue into broader indications. During this period of further research the regulatory data protection period may gradually be eroded. In addition, as interpreted by recent case law, an accelerated approval, in this case a conditional marketing authorisation, is considered to start the timer for supplementary protection certifi cate protection.2 The date of the early approval is the point from which the possible fi ve-year supplementary extension to the patent term is to be calculated. The legal position, as it currently stands, on these issues could have commercial implications and these should be considered as part of any decision to pursue an earlier approval route.

ConclusionAlthough funding and commissioning of new innovative medicines may remain a concern, there are opportunities for companies to help shape the new access pathways to patients in Europe. The one-size-fi ts-all model for medicines is no longer appropriate. Digitalisation is recasting the entire healthcare system allowing patient self reporting in real-time which could potentially have a quantum effect on drug development pathways, allowing patients to have a bigger voice and enabling them to communicate

what is of benefi t to them. For drug companies, regulators and payers, having access to real-time data will be the game changer. Cross sector collaborations, convergence of technologies and adaptive approaches to clinical trials, licensing and reimbursement will help in getting new medicines to patients faster and in optimising patient outcomes. This may well include a re-appreciation of development risk by potential investors and licensees in life sciences technology where they can see earlier marketing potential.

In addition to an increased willingness to invest, these accelerated access routes may lead to changes in milestone and royalty structures and in the parties’ respective roles and responsibilities in development agreements, and similar collaborations, in terms of managing the development process. However, these new accelerated access pathways are as yet untested so there is uncertainty; the patent, regulatory and reimbursement position is potentially complex and expert advice is recommended.

REFERENCES

1. Press Release, AiCuris, October 15th,

2012 (http://www.aicuris.com/index.

php/fuseaction/download/lrn_fi le/2012-

10-15-aicuris-and-merck-enter-

exclusive-worldwide.pdf)

2. AstraZeneca AB v Comptroller General

of Patents, UK High Court of Justice

(England & Wales), Chancery Division

(Patents Court) Case Number: C-617/12.

The key to adaptive licensing will be the harnessing of real-world evidence to monitor the approved cohort with new digital tools and strategies. Adaptive clinical trial designs could provide valuable knowledge and information as to which patients respond to a particular therapy and why.


Transforming Big Pharma

By John Ansell

Published by Gower, September 2013

ISBN: 978-1-4094-4827-3

(E-book version: 978-1-4094-4828-0)

265 pages Hardback

Publisher website price: £63

About the Review AuthorRoger Davies works with Medius as a

consultant in licensing and business

development. Having personally completed

more than 100 pharmaceutical deals he

specialises in valuations, deal structuring

and negotiating licensing and acquisition

deals. He is the former Chairman of the

UK Pharmaceutical Licensing Group, the

professional association of licensing and

business development executives and is

the Finance module leader for the Business

Development MSc at the University of

Manchester. Roger has a Master’s degree

in Economics.

Concepts, Misconceptions & ProspectsTransforming Big Pharma is written “to propose how, in the current state of fl ux, Big Pharma can best pilot its way through the crisis and transform its prospects”. Ansell is well equipped to do this based on his experience in Big Pharma companies and as a consultant advising companies and writing on industry matters.

ConceptsThe initial chapters of the book explain how the pharmaceutical industry is different from many others. For example, the high percentage of sales invested in R&D, lengthy timescales and risk for development of new products, and where the defi nition of a customer is uncertain (a patient, a doctor or a payer or any combination of these). As a result, traditional management concepts often promoted by management “gurus” fail to take account of the distinctiveness of the industry and peddle concepts that are neither use nor ornament.

According to the author, three of the following seven management concepts are of little or no use in the pharmaceutical industry: SWOT, Benchmarking, Market Access, Product Life Cycle Management, Strategic Alliances, Boston Matrix and Core Competences. Which ones do you think they are? The answers are at the end of this article.

The author is not the fi rst commentator to criticise management gurus for peddling inappropriate concepts. An October 2009

Economist article summarised three habits of management consultants: presenting stale ideas as breakthroughs; naming model fi rms; and the sale of management tools off the back of numbered lists or facile principles. Needless to say these bad habits were identifi ed by… a management consultant, Stephen Covey… eager to sell his latest book! The Economist article concluded that the most irritating thing about management gurus is that their failures only serve to stoke demand for their services!

MisconceptionsMisconceptions arise because the distinctiveness of the pharmaceutical industry is not well understood both inside and outside of the industry. For example, the estimates of times to market for new technologies such as gene therapy, stem cells, genomics and personalised medicine were, and maybe still are, far too optimistic. As a result of misconceptions about the industry, various large non-pharma companies (such a Proctor & Gamble) have tried to enter the market, and then pulled out. In addition, many Big Pharma companies within the industry also suffer from misconceptions or a lack of understanding regarding technologies and markets. These companies have adopted a number of strategies to try to improve their prospects, such as M&A and diversifi cation.

The mega mergers have resulted in cost savings but have not dealt with the fundamental issue of R&D productivity. Similarly, a number of Big Pharma

Book Review: Transforming Big Pharma

Big Pharma is facing a crisis. R&D productivity is going downhill and blockbuster products are falling off the patent cliff. Investors have little confi dence in the future success of the companies as refl ected in share prices underperforming compared to the market. This is the “half-empty” view of Big Pharma’s future. In contrast, John Ansell takes the “half-full” view in his book, Transforming Big Pharma.

By Roger Davies


companies that sought to diversify into generics came unstuck, e.g. Sanofi and GSK, so by 2007 the only survivor of this strategy was Novartis with Sandoz. However, in recent years Big Pharma companies have re-entered generics partly to get established in developing countries, e.g. Abbott’s $2.9bn acquisition of CFR Pharma, a branded generics company based in Chile. The author believes that this re-entry into the generics market will “again prove to be a poor strategy”.

The diversifi cation into OTC is also not easy given the lack of new products and the lower margins than prescription speciality brands. Biosimilars also present a huge challenge given the regulatory requirements. On the other hand, orphan products represent an opportunity. Whether or not diversifi cation into emerging markets such as China and India will provide any signifi cant long-term growth in profi t remains to be seen, especially in the light of recent events targeting Big Pharma companies with corruption enquiries and compulsory patent licences.

Prospects So what are the prospects for Big Pharma companies given that many of the strategies they have adopted maybe found wanting? The lifeblood of the industry is new products. But there is a long term trend in the decline in the number of new molecules being launched. On the other hand the number of new R&D projects according to industry data has been increasing so, apart from a minor effect of increased reporting of projects, the failure rate / attrition rate of new products has been increasing. For example, the US FDA found that the percentage of new products in phase 3 development that failed to reach the market increased from 20% in the 1990s to 50% by 2005. The author identifi es the reasons for this decline as: higher regulatory barriers driven

by the Vioxx affair; new technologies such as high throughput screening generate many product opportunities but are poor predictors of success; the entry of companies into higher risk therapeutic areas such as Alzheimers; and greater commercial ruthlessness.

However, the attrition rate seems to have stopped as there was an increase in 2012 of new molecules approved in the US, perhaps refl ecting a slightly less cautious regulatory approach by the FDA. In the context of an increase in the number of new products at each phase of development, this suggests that the number of approvals in the short term will recover from the low levels of prior years. The more populous pipeline means that Big Pharma will have the opportunity to acquire or license suffi cient new products. This, combined with steady or improved attrition rates and a view that the commercial potential of the new approved molecules will be at least the same or higher than in the past, leads the author to his optimistic view that the prospects for Big Pharma are good, subject to Big Pharma adopting appropriate strategies. The most important strategy is the need for Big Pharma companies to step-up activity to acquire and develop new products (including the use of alliances) as this is the only strategy with the transformative power to ensure the survival and success of Big Pharma companies.

ConclusionThis is an easily readable, well-argued book that draws on a wide range of sources and careful analysis of industry information to separate out the facts from the misconceptions relating to the industry and Big Pharm in particular. There is a lot of interesting data in the book ranging from probabilities of product development failure to persistent under forecasting of peak sales. The down-to-earth approach

to identify and analyse key trends and strategies is much more understandable and relevant to industry executives than the blue-sky, theoretical and more academic analysis of the future of the industry by Brian Smith in his book The Future of Pharma (Reviewed in the BD&L Journal, Issue 19, July 2013).

Some of the author’s conclusions in Transforming Big Pharma are open to further analysis or questioning. For example, this reviewer is sceptical that the commercial potential (profi tability) of new products in aggregate will be similar to or higher than old ones. If the author is right that more new products will be approved and the commercial potential of each will be at least the same or higher than in the past, then the overall drugs bill will skyrocket. As a consequence, governments will seek to reduce the prices of new products thereby limiting their commercial potential. Just look at the situation in Germany with AMNOG.

Transforming Big Pharma is a particularly interesting book as it provides a comprehensive overview of the issues being faced by Big Pharma and expresses an opinion about the likelihood of success of each of the strategies being pursued. It is refreshing to see the vital importance of new product development (and for business development executives the need for successful alliances) coming back into the spotlight after years of mega mergers and diversifi cation that have failed to deliver transformative performance for Big Pharma companies. As such the book must be of interest to all Big Pharma companies as a sounding board for their strategic analysis and future direction.

Answer (from paragraph three): the three strategies of little or no use in the pharmaceutical industry are Benchmarking, Product Life Cycle Management and Boston Matrix.

Traditional management concepts often promoted by management “gurus” fail to take account of the distinctiveness of the industry and peddle concepts that are neither use nor ornament.


About the AuthorSharon Finch is one of the regular

contributors to the monthly Deal Watch from

the Medius team providing analysis and

insight into the industry’s deals.

T: +44 (0) 20 8654 6040


Deal Values Hotting Up…

Acquisitions lead the way and topping the table at US$42.9bn was the acquisition of Covidien

(based in Dublin) by Medtronic. Already a major contender in medical devices, this deal – the largest in the medical device fi eld – means the combined company is a serious competitor to the market leader, J&J. An interesting aspect of the deal is the base of the company being in Ireland, a clear tax benefi t which was a key feature in the previous month’s bid by Pfi zer to acquire AstraZeneca (AZ) to take advantage of the lower tax rate in the UK compared with that in the US.

It was a busy month for Medtronic as it also announced the signature of a memorandum of understanding with Sanofi to enter into a global strategic alliance in diabetes. It is intended to base the alliance on an open innovation model with Sanofi bringing its extensive insulin portfolio and Medtronic contributing its insulin pumps and glucose monitoring expertise. No fi nancial terms have been disclosed.

Next in the top headlines was the $3.9bn acquisition of Idenix by Merck & Co, representing $24.50 per share in cash and a 239% premium over the share price on the Friday before the announcement. The juggernaut which is the hepatitis C deal machine rolls on with this deal keeping the cost-of-entry price tag up. The Merck & Co acquisition brings three oral hepatitis C compounds which are in clinical development and offers the promise of a triple therapy which could prove effective

in all genotypes. With its own products in development, this clearly signals Merck’s long term investment and determination in this fi eld. Table 1 shows the rather expensive range of deals closed in this intensely competitive fi eld over the last few years. The acquisitions are not without risk as BMS found when, seven months after paying $2.5bn, it had to discontinue development of Inhibitex product INX-189 in phase 2 because of safety issues.

Key to any deal price tag of course is the product valuation. Idenix’s negotiation position will have been helped no end by the price and recent US sales of Gilead’s Sovaldi (sofosbuvir); the US price is $84,000 (for a 12-week course) with sales of $2.27bn in the fi rst quarter of this year. It was inevitable that such a high price would attract attention from the regulators, although the UK price is lower than that in the US (the UK list price is £35,983 for a 12-week course), NICE is now questioning Gilead’s data, stating that evidence is lacking in some subgroups and indicating that there are uncertainties in the evidence base. So the jury is out until October when a decision is expected.

Although not commanding quite such a high headline, this month OraSure granted AbbVie exclusive promotion rights to its OraQuick HCV test in the US for $75m. This deal shows Sanofi is clearly not alone in taking a broad approach to franchise management!

A Midsummer Night’s Dream Now formally off the table and staying unrequited was the acquisition bid made

Welcome to the June Deal Watch, our monthly analysis of the top pharma deals. In line with our customary practice, this review focuses predominantly on those deals where fi nancial terms are disclosed during June. So, as we move into the summer of 2014, what’s hot and happening in terms of deals this month?

Deal Watch


by Pfi zer for AZ, the failure of which was attributed by Pfi zer’s CFO to the sole issue of price.

Clearly not deterred by this, AZ has moved on to build on its respiratory franchise by in-licensing Synairgen’s inhaled beta interferon, SNG001. This product is in development as an immuno-modulatory therapy for viral respiratory tract infections in patients with severe asthma. The deal carries a headline value of $232.25m which includes a $7.25m upfront fee. Seeing some success from its partnering, AZ also marked the start of a clinical trial with the antisense drug ISIS-ARRx, in patients with metastatic castrate-resistant prostate cancer, by paying partner Isis Pharmaceuticals a $15m milestone.

Staying in the hostile M&A arena, Allergan declined Valeant’s second takeover bid, so this story still rumbles on but Valeant is not yet giving up. The company announced that an exchange offer for Allergan’s common stock would go ahead taking its May 30 proposal directly to the shareholders; so watch this space!

Hot Gossip Rumours were abroad from no less a source than the UK Financial Times that Shire was about to make a $5bn bid for NPS Pharmaceuticals. So strong were the rumours that this led to NPS issuing an offi cial denial. Next up was the comment that Allergan was on the cusp of making a bid for Shire, but of course it was pipped at the post by AbbVie, which eventually clinched the deal in mid-July for $54bn in cash and shares.

During June, Shire remained busy focusing on the day-to-day business with a move into specialised patient populations targeting the pre-school market via a new clinical study with Vyvanse. Success in this endeavour could secure a six-month data exclusivity. Also building on its R&D collaboration with arGEN-X, Shire entered into a long-term alliance paying an upfront of $20.4m (cash and equity) for access to therapeutic antibodies in cancer and autoimmune diseases.

Streamlining is evident at Teva with the company undertaking a major cost-cutting exercise. But it is also looking to build on its pain franchise as noted with its purchase of Labrys Biologics for up to $825m. This brings access to Labrys’ monoclonal antibody drug LBR-101, which is under development for the prevention of chronic and episodic migraine and will clearly complement Copaxone.

Oncology Focus & Immuno-Oncology is Still Growing!Still keeping its place in the headlines and following its recent licence with Nogra Pharma with the notable $710m upfront payment, Celgene closed a deal with NanoString Technologies for the development of a companion diagnostic assay to support the development of Revlimid for treatment of Diffuse Large B-Cell Lymphoma at a more modest headline of $45m.

Of course the growth area within oncology is the immunological approach, and GSK closed a $350m co-development

and option deal with Adaptimmune. Adaptimmune develops TCR engineered T-cells and the agreement focuses on co-development around the cancer testis antigen NY-ESO-1, to which GSK has an option on the programme though to clinical proof-of-concept.

Similarly, Pfi zer signed up with the French company Cellectis for its CAR-T platform which uses chimeric antigen receptors to re-programme T-cells to target cancers. Under the terms of the agreement, Pfi zer secured exclusive development and marketing rights for 15 targets selected by Pfi zer. Cellectis has reserved 12 other targets and Pfi zer will provide preclinical development assistance for four of these. Deal terms include an $80m upfront payment, R&D funding and up to $185m in milestones for each candidate, giving an estimated headline value of $2.8bn. In addition, Pfi zer has agreed to make a 10% equity investment stake purchasing new shares at €9.25 ($12.63) each, representing an estimated $28m. Instead of arriving at a personalised solution by harvesting individual patient’s T-cells, Cellectis is using allogenic CAR-Ts to provide a treatment which should be manufactured and standardised more easily. Cellectis plans to open a research site in the US to work more closely with Pfi zer.

Joining the checkpoint modulator fray, Merck Serono formed a partnership with Morphosys to discover and develop antibodies against certain immune checkpoints using the Morphosys

Licensor Acquired /Licensee Acquirer

Product Status at Deal/ Date

Deal Type/SharePrice Premium

Headline Value US$m

Idenix/ Merck & CoSamtasvir (NS5A inhibitor) + other HCV therapies

Phase 2June 2014

Acquisition (announced), 239% premium

3,900

Pharmasset/ Gilead Solvadi / PSI-7977 Phase 3 Nov 2011

Acquisition, 89% premium 10,800

Inhibitex/ BMS INX-189 / BMS-986094 Phase 2 Jan 2012

Acquisition, 163% premium

2,500

Alios BioPharma/ VertexALS-2200/ALS-2158 (HCV polymerase inhibitors)

Preclinical June 2012 Global licence1,525(60 upfront)

Enanta/ Novartis EDP-239 (NS5A inhibitor) Preclinical Feb 2012Exclusive global licence, US co-promotion

440

Table 1: Major hepatitis C deals

>>


Ylanthia platform. Financial terms were not disclosed but include milestone and royalties.

Staying with the mid-caps and turning to prostate cancer, Bayer and Orion entered into a joint development deal for ODM-201. This phase 3-ready, androgen receptor inhibitor therapy will supplement Bayer’s oncology pipeline. The phase 2 results showed a decline in PSA levels of more than 50% in the study of 124 patients. Bayer paid €50m ($68m) upfront with further milestones in return for global rights which should complement Xofi go (from the acquisition of Algeta). The companies will jointly fund the phase 3 trials. Orion will retain co-promotion rights in Europe.

Facing the Music Not all of the deals announced this month are related to innovations and acquisitions. Refl ecting some of the news fl ow, we saw Pfi zer make a settlement of $325m for the alleged improper marketing of Neurontin. Pfi zer is not the only major pharma in this position; also this month GSK settled US claims of irregular marketing activities in asthma and antidepressants at a reported $105m.

So the deals keep fl owing as we move into the summertime. It will be interesting to see how the major acquisitions play out, following the closure of the Pfi zer-AZ saga. Could this be the summer of unrequited proposals?

Licensor Acquired / Licensee Acquirer

Product / Technology Deal Type Headline ($m)

Covidien/ Medtronic Medical device company adding US critical mass Company acquisition 42,900

Idenix Pharmaceuticals/ Merck & CoHepatitis C assets include IDX21437 (p1/2 nucleotide inhibitor) to combine with Merck HCV drugs

Company acquisition 3,850

Labrys Biologics/ Teva Includes Labrys’ p2b anti-CGRP mAb for treatment of episodic migraine Company acquisition 825

Chelsea Therapeutics/ LundbeckIncludes Northera (droxidopa) for neurogenic orthostatic hypotension (approved)

Company acquisition 658

OAO Veropharm/ Abbott Laboratories Russian based manufacturing company Company acquisition 630

DAVA Pharmaceuticals/ Endo International

Generics business including generic doxycycline and cefdinir Company acquisition 575

Bionomics/ Merck & Co BNC 375 in Alzheimer’s disease (preclinical)Exclusive research and licence agreement

526

Adaptimmune/ GSKTCR engineered T-cells which target NY-ESO-1 and other targets in oncology (p1/2)

Co-development and option

350

Genia Technologies/ RocheSingle molecule, semiconductor, DNA sequencing using nanopore technology

Company acquisition 350

Medreich/ Meiji Seika Indian based manufacturing company Company acquisition 290

Cellectis/ Pfi zerChimeric Antigen Receptor T-cell (CAR-T) immunotherapies directed at multiple selected oncology targets (platform)

Collaboration265*+ $28m equity

Dimension Therapeutics/ Bayer Gene therapy for the treatment of haemophilia A (preclinical) Licence 252

Synairgen/ AstraZeneca SNG001 inhaled beta interferon (p2) Exclusive licence 232

Ligand Pharmaceuticals/ TG Therapeutics

Development, commercialisation of Interleukin-1 Receptor Associated Kinase-4 (IRAK-4) inhibitors (preclinical)

Exclusive licence 208

Pregenen/ bluebird bio Gene editing technology platform Company acquisition 156

OraSure Technologies/ AbbVie OraQuick HCV rapid test in US Co-promotion** 75

Orion/ Bayer ODM-201, an investigational novel oral androgen receptor inhibitor (p2)Co-development, option to co-promote in Europe

68

Sorrento Therapeutics / MorphotekTo generate chemotherapeutic antibody drug conjugates (ADCs) (platform)

Research and option agreement

50

NanoString Technologies/ Celgene Development of a companion diagnostic assay Development 45

ECR Pharmaceuticals / Valeant Akorn subsidiary with branded generics business Company acquisition 41

All deals are worldwide unless otherwise noted.* Deal terms included up to $185m milestones per product; estimated headline could be approximately $2.8bn if all products are successful.

**US only

Deal Watch – June 2014

>>

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