At the 2013 BIO World Congress on Industrial Biotechnology in Montreal next month you’ll be able to see a Campion boat on the exhibit show floor. “What will a boat be doing on the show floor of an industrial biotech conference?” you may ask. Well, this isn’t just any boat. Two companies, Ashland and Campion, have teamed up to build better boats with bio-resins. Ashland is a specialty chemicals company that believes in the power of chemistry to help their customers create innovative better products for today and sustainable solutions for tomorrow. Ashland believes in making everything they touch better whether it’s stronger and safer building materials made with polyester and vinyl ester resins, environmentally friendly thickeners for paints that brighten homes, or one of the many other applications for their specialty chemicals. Campion is Canada’s largest independent boat builder and has been building high-performance sport boats and cruisers for 36 years. Ashland developed Envirez resin – the first resin formulated using a substantial amount of soybean oil and corn-derived ethanol. Back in 2008, they chose Campion to test it culminating in the world’s first bio-based resin boats being built. Customers can now enjoy better environmental performance. According to Ashland, research shows the use of Envirez by Campion will eliminate more than 100,000 pounds of carbon dioxide from entering the atmosphere. Now that is industrial biotechnology in action improving the world. Check out the boat for yourself June 16-19, at the Palais des congrès de Montréal at BIO’s World Congress, the world’s largest industrial biotech event for business leaders, investors, and policy makers in biofuels, biobased products and renewable chemicals.

Of the 286 biotech companies trading on public exchanges today, 241 focus on drug development, a slight drop in numbers from last year.* Of these 241 in the biopharmaceutical space, only 28 (12%) had both a product on the market and positive net income for FY 2012. This is about the same as the 13% reported last year, but different companies populate the list.  Unlike our last report (May 2012), when acquisitions of profitable companies had an impact on the numbers, the more recent buy-outs were mainly of pre-profit companies. However, this year we saw a few companies removed from the list due to a need to increase SG&A or R&D lines to support new marketing efforts or Phase III trials. For example, mid caps Regeneron and Vertex dipped into the red for 2012 net income.

The table above lists the 28 profitable companies. Just like last year, four companies reported over $1 billion in net income. Eight companies had between $100M-$1B in net income. 57% of those in the green had less than $100M in net income. To look at this another way, only 12/241 companies make over $100M – only 5%.**

*The slight drop in the total number of public companies from last year means that bankruptcy and acquisitions have outpaced the 22 IPOs we had since Jan 2012.

**Data for net income was generated using Factset.

As many as 49,000 people die from the flu annually, depending on the season, and children and the elderly are the most vulnerable. Among the 138 children who died from the flu during the 2012-2013 season, the Centers for Disease Control and Prevention (CDC) reports that 90 percent were not vaccinated.  In addition, more than 200,000 people are hospitalized, with the most vulnerable being infants, young children, older adults, and people of all ages who have underlying conditions such as heart or lung disease. But remember, it is not only the youngest, oldest, or sickest who die: Every year, flu kills people who were otherwise healthy.

Furthermore, flu has a significant economic impact. Each year, the direct medical cost of flu infection in the U.S. is estimated to be $10 billion due to increased doctors’ visits, hospitalizations, and premature deaths. [Molinari NA, et al. Vaccine 2007; 25:5086-5096] Sick children can also cause parents to lose time from work.

Annual vaccination remains the best way to protect the people you love from the flu. Disease prevention is key to public health. It is always better to prevent a disease than to treat it. Vaccines can protect both the people who receive them and those with whom they come in contact.

In 2012, the Food and Drug Administration (FDA) approved the use of two 4-strain flu vaccines, which offer broader protection against the seasonal flu. Dr. Karen Midthun, Director of FDA’s Center for Biologics Evaluation and Research has said, ‘illness caused by influenza B virus affects children, particularly young and school-aged, more than any other population. A vaccine containing the four virus strains most likely to spread and cause illness during the influenza season offers an additional option to aid in influenza prevention efforts.’

It is critical that the American people are able to take advantage of the new vaccines to protect public health. As such, the National Vaccine Injury Compensation Program (VICP) must be updated to cover the new 4-strain flu vaccines.

Through the VICP, which was created more than a quarter-century ago, Congress addressed concerns about vaccine safety and litigation that threatened to drive vaccine manufacturers out of the market. The principle behind the VICP is that while there is a public interest in making sure that immunization rates are high, there are rare, but sometimes serious, risks associated with immunizations. Therefore, people who are injured from vaccines should be compensated quickly and predictably.

The VICP is a “no-fault” compensation program where awards are provided to those determined to be injured by a vaccine included in the VICP.  This program is funded by an excise tax on covered vaccines. This is the way it has been done since the program was created, and the program has been an overwhelming success. However, the excise tax is currently limited to 3-strain flu vaccines and cannot be levied on the new 4-strain flu vaccines.

Representatives Richard Neal (D-MA) and Jim Gerlach (R-PA) have introduced legislation (H.R. 475) which would ensure these new vaccines are covered by the VICP.  This legislation will be considered by the Congress next week, and we want to urge policymakers to pass it in order to prepare for the upcoming flu season and protect public health.

Litjen Tan, MS, PhD, is the Chief Strategy Officer with the Immunization Action Coalition.

About IAC
The Immunization Action Coalition (IAC) works throughout the year to increase immunization rates and prevent disease by creating and distributing educational materials for health professionals and the public that enhance the delivery of safe and effective immunization services. The Coalition also facilitates communication about the safety, efficacy, and use of vaccines within the broad immunization community of patients, parents, health care organizations, and government health agencies.

One of the outcomes of the 2012 Food and Drug Administration Safety and Innovation Act (FDASIA) was the creation of the “Breakthrough Therapy” designation.  The new law allows FDA to grant a Breakthrough Therapy designation to drugs showing early clinical promise for serious or life-threatening conditions, thereby expediting both the development and the review of these drugs. As of today, 13 designations have been granted according to a search of the BioMedTracker database (see table below).

At the start of 2013, Vertex was the first company to receive the new designation. In fact, Vertex received it for two different Cystic Fibrosis compounds: one for Kalydeco, originally developed for G551D CF patients, and one for VX-809 (listed above as “Lumacraftor”) designed to treat F509del CF patients.

Vertex is one of three biotechs on the above list, the other two being Pharmacyclics and Scioderm. Pharmacyclics has 3 indications listed for the same molecule, Ibrutunib.  Ibrutunib is in Phase III development for various lymphomas, and each indication has been reviewed separately for the designation. Scioderm’s SD-101 for inherited Epidermolysis bullosa, a rare genetic disease, made it to the list soon after Scioderm’s IND filing.

Scioderm’s designation for SD-101 was based on clinical data from a previously conducted Phase II study in a different type of Epidermolysis bullosa. Note that to qualify for the Breakthrough Therapy designation the drug must have preliminary clinical evidence showing substantial improvement on at least one endpoint over available therapy. This may be a high hurdle for some compounds, as 12 applications for the designation have already been rejected.

The other five companies on the list are Big Pharma companies: Abbvie, J&J, Merck, Novartis, and Pfizer. Four of the five Big Pharma companies have Breakthrough Therapies in cancer. That is not too surprising given that more than 50% of the designations are for cancers.

What to expect?

The new designation conveys all of the “fast track” FDA program features, as well as more intensive FDA guidance on development efficiency. Based on Section 902 of FDASIA, we should expect to see the following for the 13 drug programs listed above:

1)      Interactive communication: FDA providing “timely advice” regarding the clinical development and data collection and helping ensure that the “design of the clinical trials is as efficient as practicable”.

2)      Review efficiency: FDA will assign a “cross-disciplinary project lead for the FDA review team”. This person will serve as a scientific liaison between the cross-discipline members of the review team. This review will incorporate senior managers and experienced review staff for the designated drug.

For more on the Breakthrough Therapy designation, here are a couple of useful FDA websites:

Fact sheet

FAQ

For tracking new designations, here is the BioMedTracker website [subscription required]:

http://www.biomedtracker.com/

David Kappos, former Director, US Patent and Trade Office and current Partner Cravath, Swaine and Moore, LLP discusses the Canadian Utility Requirement.

In a speech last week at Cornell University on anti-GMO conspiracy theory, Mark Lynas told audiences “millions, possibly billions, of people have come to believe what is essentially a conspiracy theory, generating fear and misunderstanding about a whole class of technologies on an unprecedentedly global scale.”

Formerly a devout anti-GMO activist himself, Lynas said his activism, “which I wrongly thought of at the time as being ‘environmental’, has done real damage in the world… I am now convinced that many people have died unnecessarily because of mistakes that we in the environmental movement collectively made in promoting anti-GMO fear. With that on your conscience, saying sorry and then moving on is not enough. Some restitution is in order.”

Lynas admitted that after his January speech at the Oxford Farming Conference that he has been “subject to a coordinated campaign of intimidation and hate, mostly via the internet.”

Still, Lynas says, “I believe the time has now come for everyone with a commitment to the primacy of the scientific method and evidence-based policy-making to decisively reject the anti-GMO conspiracy theory and to work together to begin to undo the damage that it has caused over the last decade and a half.”

The Lynas speech is posted in its entirety, along with hundreds of online comments, on his website at www.marklynas.org.

During the 2013 BIO International Convention, the Massachusetts Life Sciences Center (MLSC) and regions from four other countries launched the new International Collaborative Industry Program (ICIP).

The MLSC will partner with Victoria, Australia; the Wallonia region of Belgium; Quebec, Canada; and Alsace in France to award funding to projects promoting innovative and collaborative research and development (R&D) between companies in Massachusetts and in the partnering regions. The program’s goal is to develop long-term collaborations to advance late-stage R&D projects in biotechnology, pharmaceuticals, medical devices, diagnostics and bioinformatics, while promoting economic development in Massachusetts and the partner regions.

“No one country or region can solve the challenge of developing the next generation of  drugs and medical devices on its own,” said Susan Windham-Bannister, Ph.D., President & CEO of the MLSC, the agency charged with implementing Massachusetts Governor Deval Patrick’s 10-year, $1 billion Life Sciences Initiative. “The breakthroughs of tomorrow will only be possible through collaboration like that which we are fostering between Massachusetts and these partner geographies.”

Watch Lynnea Olivarez of the MLSC and Diane Gosselin of CQDM, Quebec talk about the new program:

For more information about ICIP, visit www.masslifesciences.com/icip or email icip@masslifesciences.com.

Inside Health Policy’s Alaina Busch wrote a story today on confusion that has been spreading recently related to vaccines excise legislation. Vaccines protect people from seasonal flu, and new strains have recently been approved to further protect public health. As such, the vaccine excise tax must in turn be updated to include recent approvals. S. 391 and H.R. 475 update the existing excise tax to cover the newest seasonal influenza vaccines. The legislation does not increase taxes on flu vaccines. It does not increase taxes at all. Even with the additional flu strain, the tax on the flu shot will be 75 cents, the same as last flu season. Updating the vaccine excise tax to bring it into alignment with the newest developments in the vaccine market is critical to addressing the upcoming influenza season. This is an extremely important public health matter.

Read the article (Subscription Required)

A few weeks ago, the  FDA announced that they would not allow generic versions of older versions of OxyContin. The original formulation of OxyContin goes off patent today. The original formulation did not have “tamper-resistant qualities” that prevent people from “crushing, breaking, and dissolution using a variety of tools and solvents.”  The article reports that the decision will keep Teva Pharmaceuticals and Impax Laboratories from making the older version which the FDA has determined is too dangerous for public health.

This article represents one of many examples where further innovation – derogatorily called “evergreening” by certain anti-patent groups – serves critical public health goals. Whether that innovation addresses heat stability, safety, bioavailability or other laudable public health goals, an incentive is required to induce companies to take the original formulation and improve it. Patents serve as that incentive.

Without the patents, companies will have little incentive to improve their – or other’s – existing products.  Policy efforts and laws found in India, the Philippines, and Argentina aimed at prohibiting such secondary innovation are thus quite detrimental to the public health.  There are many original molecules whose benefits can be made more available to those in need by further innovation, such as changes that make use of the products easier for those countries with minimal health care infrastructure. Policy makers should think twice before supporting the anti-patent evergreening movement.

As biopharmaceutical manufacturers consider the new reality of accountable care organizations (ACOs) and the impact on their businesses, they must be ready to demonstrate the value of their products in ways that recognize the fine balance of cost and quality that ACO and ACO-like models seek to achieve. According to panelists speaking at the 2013 BIO International Convention session entitled, “Accountable Care Organization (ACO) Framework for Biopharmaceuticals,” there are three primary considerations when it comes to the role of biopharmaceuticals in an ACO model. The first is the type of episode – is the therapeutic treating an acute or a chronic condition? The type of episode is important because it will determine the financing of that care – for example, through a fixed or bundled payment mechanism.

The second consideration is the availability of quality measures related to the condition and whether the use of biopharmaceuticals can play a role in achieving these measures. If there are no existing measures, manufacturers should actively engage in the creation of such measures, suggest the panelists. For example, panelist Dr. Jerry Penso, Chief Medical and Quality Officer of the Medical Group Management Association recommends working with specialty societies, many of which are on the forefront of quality measurement and have experience working with different quality organizations. As a note of caution, however, Dr. Penso points out, “whenever you are going to pay on that measure, it better be a reliable measure,” emphasizing his point that quality measurement is a largely scientific exercise.

Finally, the third consideration is the role biopharmaceuticals currently play in treating the condition – more specifically, how common is it to use pharmacologic therapy to treat the condition as opposed to other types of treatment; what portion of the overall disease cost does pharmacologic therapy represent; and are there opportunities to offset other medical costs through the use of pharmacologic therapy? While there are some conditions, such as heart failure, where the evidence clearly shows that pharmacologic therapy produces cost offsets, there are many conditions where this link may not be as clear. Manufacturers must be equipped with this data, according to panelists.

Overall, as ACOs work to achieve the cost-quality equilibrium, biopharmaceutical manufacturers should consider building both elements into their clinical development programs, especially as ACOs and ACO-like models come to represent a larger portion of the market.