In the latest Company Snapshot for the 2012 BIO CEO & Investor Conference in New York City, we’re profiling ImmunoGen, Inc. which will be presenting at the event.

We spoke with ImmunoGen, Inc. CEO Daniel Junius and he outlined his organization’s priorities and challenges as well as how his company differentiates themselves from the competition.

Company Snapshot

What are the short-term and long-term priorities for your company?
Our highest priority today is building and advancing our pipeline of wholly owned product candidates. At this time, ImmunoGen is better known for our contribution to Roche’s T-DM1 (trastuzumab emtansine) than for our development of novel anticancer agents. A key priority for us over the longer term is the successful transition from being an early stage, research-focused company to one that also has strong later-stage capabilities.

How does your company go about differentiating yourselves from the competition?
We’re in the fortunate position of being in a field – antibody-drug conjugates (ADCs) – that has limited competition today. Virtually all of the ADC compounds now in the clinic are made with either our technology or that of one other company, and there are far more ADC compounds with published clinical data using our technology than any other. As more large players enter the field, our challenge is to maintain our technological lead. We do this by continuing to invest in our technology, developing additional linkers and cell-killing agents to further expand the breadth of cancers that can be treated using our technology. For example, we’ve developed a linker that has been shown in preclinical testing to counteract the multi-drug resistance that many cancers develop.

What is the most challenging part of raising money and seeking collaborations?
The nature of our technology has enabled us to implement a balanced business model: use our technology with our own antibodies to develop ImmunoGen product candidates and out-license it for other companies to use with their antibodies to help fund our product programs. This approach has helped us keep a strong balance sheet, which is a powerful asset both at those times when we do raise money and when negotiating with potential partners.

Tell us something about your company that investors might not know.
While ImmunoGen is known for our Targeted Antibody Payload (TAP) technology – which our partners use with their antibodies – we also have strong antibody capabilities of our own. One implication of this is that we can create product candidates for targets that are highly challenging, enhancing product differentiation. Another is that we are able to go beyond the traditional approach of developing and advancing an antibody based just on its properties (e.g., binding affinity, avidity) to identifying and advancing the antibody that is best for use with our technology.

By Hans Sauer, Deputy General Counsel for Intellectual Property, Biotechnology Industry Organization

Question from a Reader:

Heather: Whether Jonas Salk believed in patenting research or not isn’t important, at least not to me. What I do find important, and hadn’t realized until reading this article, is that the polio vaccine was extremely successful despite the fact that it wasn’t patented. That sounds like an interesting story because it goes against the current dogma of ‘we won’t invest in it if it’s not patent protected’. I’m curious to know if there have been other vaccines/drugs that have bucked the patent system but remain successful.

Response:

Heather, thank you for your interest in this important issue.

Unfortunately, it’s not so much a question of bucking the patent system as it is a question of who steps up to the plate if there are no incentives to invest. Usually, nobody does. There are literally hundreds (if not thousands) of examples of promising drug molecules which are not being developed because they are owned by no one. The polio vaccine is actually a good, and unusual, example of a tremendously important product that, for various reasons, lacked commercial incentives for it to be developed by private companies – maybe the absence of patent protection had something to do with that. Ultimately, developing the polio vaccine required such a big societal effort, requiring field trials on millions of children, that it would have been impossible for a single company to handle (and so expensive that it would have amounted to corporate suicide). Instead, the development of the vaccine required an unusual, coordinated effort by charitable foundations, the U.S. government, and many other entities.

Penicillin is another example. It was discovered in the 1920s and languished for many years in the public domain. The molecule wasn’t owned by anyone, and there was no commercial incentive to invest in its development. It was only during World War II that penicillin became strategically important to the U.S. and British governments. It was developed through a process of compulsory government contracting, as part of the wartime effort. Notably, while penicillin itself was not patentable because it had already been known for a long time, the government contract lab did obtain a patent on the method for mass-producing it.

These two success stories are neither typical nor a realistic model for the development of new medicines. It is true that sometimes a government and charitable foundations must step up and support the development of exceptionally important drugs for which there is no other commercial incentive. The drug molecule may be long-known and unpatented. Or it may be useful only for a medical condition that is so rare that a drug company could not recoup its investment. When the government or charitable foundations fund the development of such drugs, they often do so in partnership with drug companies – think of it as the public sector “splitting the risk” with private companies. But it is rare indeed for a drug to be developed by a government alone, absent a commercial incentive for private investment. For one, governments are not particularly good at developing drugs. We know this from experience with former socialist countries, which produced Nobel Prize-winning chemists and physiologists but no drugs. Even our own government-funded researchers prefer to do what they do best: studying the molecular basis of diseases and understanding the biological mechanisms and interactions that keep us healthy or make us sick. Biotech companies, on the other hand, are good at the tedious and lengthy task of developing medicines. Think of it as two sides of an equation, where public research often provides the “science” and the private sector contributes the “engineering.” So the typical situation today in the U.S. is that generous public funding is used to support basic biological research at government laboratories and research universities, and that private companies shoulder the task, at staggering cost, of translating these basic discoveries into real-world solutions for disease.

According to the Tufts Center for the Study of Drug Development, the total capitalized cost of developing the average biopharmaceutical requires nearly a decade of work and an investment of $ 1.2 billion. Patents can provide some assurance to the investors who are considering whether to invest in a biotech company to help it fund the lengthy and expensive drug development process necessary to produce a new life-enhancing, and in some cases life-saving, medical therapy. Without a patent, there is limited opportunity for a return on that significant investment.

It is important to remember that patents are granted for a fixed period of time.  During that time, the patent owner has exclusive rights to the patented invention (that he or she has the option to license to others). After the patent expires, the invention is in the public domain and everyone can access it. In the biopharmaceutical world, this is often when generic drugs become available.

By Jill E. Sackman, D.V.M., Ph.D., Senior Consultant, and Matt Levy, J.D., Business Analyst, at Numerof & Associates, Inc. (NAI)

The pharmaceutical industry has entered a critical period of transition. Business models that have proven remarkably successful over the past 20 years are now encountering major challenges. As biotech companies grapple with the leading symptoms of these challenges – pricing pressures, pipeline productivity concerns, a growing public distrust, and greater political and regulatory scrutiny – it is becoming increasingly clear that a profound shift is underway in what it takes to be successful in this environment.

Biotech business strategy has tended to emphasize market size above all else. This has been translated into a focus on blockbuster drugs and mega mergers, passing on “singles” and “doubles” in the quest for “home run” opportunities. Heavy reliance on such home runs raises the inherent risks, costs, and time involved in clinical development, especially in an environment of heightened regulatory scrutiny. At the same time, the pharmaceutical industry’s increasing reliance on external sources of novel compounds has bid up the price of the compounds, further exacerbating the cost and risk of drug development — and as a result, the public backlash over rising drug costs.

The natural dynamics of maturing markets have become increasingly problematic. With a tradition of reliance on patent protection, brand-focused pharmaceutical companies cannot avoid competing with their own past success. Once generic equivalents are available, the economic attractiveness of other, new branded drugs for a given disease declines rapidly, particularly drugs in the same class. While new drugs typically offer some important advantages over existing therapies, these advantages must offset massive price differentials when compared to generics.

With the management of healthcare costs reaching crisis proportions, payers are raising the bar … insisting on hard evidence of clinical and economic value in comparison to therapies that already exist. In practice, the FDA has also begun factoring unofficial requirements for superior clinical value into the approval process. In this environment, innovation and differentiation play a more significant role than ever before.

Many biotech companies have implemented changes to their R&D process and capabilities. Most haven’t gone far enough. Sustainable leadership in this market requires a radically different development engine. The key requirement is to build a scientific foundation for highly differentiated and sustainable franchises around selected disease states — based on integrated diagnostic and therapeutic capability, extensive product portfolios that address needs over a disease continuum, strategic market insight, and in-depth preclinical and clinical expertise.

While excellent science must be a given, it is not enough by itself.  Biotech companies will also need to master several critical building blocks:

• Build critical supporting infrastructure and core competencies in strategic marketing, economic and clinical value, and portfolio management. Most development programs have appropriate focus on the pathway for regulatory approval of new products. In the current market environment, it is equally important to make optimal decisions on which compounds to move forward, which indications to pursue and in what order, how to position products competitively based on relative economic and clinical value, and what evidence needs to be generated in support of the value proposition.  Most companies do not currently have the capabilities in place at a sufficiently sophisticated level to do this work well.

• Integrate development programs more effectively to improve the risk/return profile of the pipeline.  Without constant diligence, R&D practices easily devolve in ways that run counter to effective program management.  One common example is the evolution of organizational silos that limit effective engagement across critical boundaries, such as the division of preclinical and clinical research.  Companies must thoughtfully redesign processes, redefine roles, and ensure competencies are in place to capture the benefits of integration.

• Reduce clinical development costs through integrated global programs, comprehensive outsourcing strategies, and improved program management capabilities. In addition to making wise portfolio management decisions, companies must find ways to take cost and risk out of their product development process.  Most of the easy savings have already been found. The next steps will require more sophisticated program management capabilities at a strategic and operational level to streamline programs, access lower-cost resources, and leverage global synergies while remaining responsive to local market needs.

Realistic implementation of any major organizational transformation also needs to limit the risks of disrupting the current business. Fortunately, you don’t need to execute a monolithic solution all at once.  Instead, you can select one or two “lead” therapeutic areas to build true franchise capabilities in alignment with your commercial strategy.  Because a siloed organization will not be able to execute such an integrated approach, you must break down barriers across the company and build new, cross-cutting capabilities around your franchise focus.

Leaders throughout the biotech industry need to be proactive in their preparation for a market where new winners and losers will be determined based on their ability to create a new product development infrastructure — one that delivers new products with differentiated economic and clinical value propositions … with lower risks and costs.

Jill E. Sackman, D.V.M., Ph.D. is a Senior Consultant, and Matt Levy, J.D., is a Business Analyst at Numerof & Associates, Inc. (NAI). NAI is a strategic management consulting firm focused on organizations in dynamic, rapidly changing industries. We bring a unique cross-disciplinary approach to a broad range of engagements designed to sharpen strategic focus, increase revenues, reduce costs, and enhance customer value. For more information, visit our website at www.nai-consulting.com. Dr. Sackman and Mr. Levy can be reached via email at info@nai-consulting.com or by phone 314-997-1587.

Bill Gates has a terse response to criticism that the high-tech solutions he advocates for world hunger are too expensive or bad for the environment:  Countries can embrace modern seed technology and genetic modification or their citizens will starve.

When he was in high school in the 1960s, people worried there wouldn’t be enough food to feed the world, Gates recalled in his fourth annual letter, which was published online on January 24 and reported on by the AP in the Huffington Post. But the “green revolution,” which transformed agriculture with high-yield crop varieties and other innovations, warded off famine.

Gates is among those who believe another, similar revolution is needed now. The Bill & Melinda Gates Foundation has spent about $2 billion in the past five years to fight poverty and hunger in Africa and Asia, and much of that money has gone toward improving agricultural productivity.

Gates doesn’t apologize for his endorsement of modern agriculture or sidestep criticism of genetic modification. He told the Associated Press that he finds it ironic that most people who oppose genetic engineering in plant breeding live in rich nations that he believes are responsible for global climate change that will lead to more starvation and malnutrition for the poor.

In his 24-page letter, the Microsoft Corp. chairman lamented that more money isn’t spent on agriculture research and noted that of the $3 billion spent each year on work on the seven most important crops, only 10 percent focuses on problems in poor countries.

“Given the central role that food plays in human welfare and national stability, it is shocking – not to mention short-sighted and potentially dangerous – how little money is spent on agricultural research,” he wrote in his letter, calling for wealthier nations to step up.

A guest writer in a recent article in the Wall Street Journal repeated the oft quoted Jonas Salk statement about his Polio vaccine: “There is no patent.  Could you patent the sun?”  Many use this statement as the moral impetus for refusing patents on medically important innovations (see Michael Moore’s Capitalism: A Love Story).  Unfortunately, Jonas Salk created a myth that day by leaving out several crucial details.

As pointed out by Robert Cook-Deegan at Duke University, “When Jonas Salk asked rhetorically “Would you patent the sun?” during his famous television interview with Edward R. Murrow, he did not mention that the lawyers from the National Foundation for Infantile Paralysis had looked into patenting the Salk Vaccine and concluded that it could not be patented because of prior art – that it would not be considered a patentable invention by standards of the day. Salk implied that the decision was a moral one, but Jane Smith, in her history of the Salk Vaccine, Patenting the Sun, notes that whether or not Salk himself believed what he said to Murrow, the idea of patenting the vaccine had been directly analyzed and the decision was made not to apply for a patent mainly because it would not result in one. We will never know whether the National Foundation on Infantile Paralysis or the University of Pittsburgh would have patented the vaccine if they could, but the simple moral interpretation often applied to this case is simply wrong.”

While the debate on whether patents are the best way to incentivize medical innovation and commercialization continues, that debate should proceed without reliance on this myth regarding the history of the Polio vaccine.

The 2011 BIO International Convention brought together over 15,000 leaders from industry, government and academia who are working to solve some of the sector’s biggest challenges. Last year’s event was a highly successful meeting with representation from all fifty states and 65 nations involved in innovation and manufacturing of life science technologies for the marketplace. We were honored to host governors from 11 U.S. states as they promote their bioscience economic development endeavors.

Here’s a little video we put together featuring Governors’ participation at the 2011 convention:

Governors at the 2011 BIO International Convention:

• Maryland Governor Martin O’Malley
• Virginia Governor Robert F. McDonnell
• Kansas Governor Sam Brownback
• North Carolina Governor Bev Perdue
• Oklahoma Governor Mary Fallin
• Massachusetts Governor Deval Patrick
• Kentucky Governor Steve Beshear
• Florida Governor Rick Scott
• Illinois Governor Pat Quinn
• South Dakota Governor Dennis Daugaard

Read the press release

‎Not surprisingly, President Obama’s vision for “an economy built to last,” as outlined in this week’s State of the Union address, makes job creation a cornerstone:

“I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that – openings at a time when millions of Americans are looking for work.”

The president’s comments get to the heat of looming crisis. High-tech industries need a well-trained workforce. You would think that with over 8% unemployment, companies would have their pick of candidates. Regrettably, that is not the case.

The fact is, there are far too few available programs in this country geared towards producing qualified recruits for advanced manufacturing jobs. If America is to remain competitive in tech-focused and innovative industries, such as the biosciences, we need more 21st century workforce training programs.

In the last week, I came across two news stories that offer hope this crisis is being addressed.

First, Massachusetts Governor Deval Patrick made the following statement during his annual State of the Commonwealth address earlier this week:

“We have a skills gap. We can do something about that. We can help people get back to work. And our community colleges should be at the very center of it.’’

He went on to outline a plan to overhaul the Massachusetts community college system, with a focus on preparing students for technical jobs.

The other piece of promising news relates to a soon-to-be-open high school in Virginia, Monticello High School’s Health and Medical Sciences Academy. As described by the school’s website, the program will “provide students a foundation for post-secondary education or workforce readiness in certified health related professions. Students will explore core content with technology through integrated projects, case studies, and focused learning experiences.” The school opens next fall and applications are being accepted now.

Virginia Governor Bob McDonnell, a notable advocate for workforce training initiatives, recently unveiled an economic development package as a means of increasing the number of high-paying bioscience jobs in the commonwealth. The Governor’s proposal contains funding for planning and implementing grants that support the establishment of Health Science Academies in the state.

Update: Read Jim Greenwood’s statement following this week’s
State of the Union speech

Have you heard of other new tech-focused worker training programs? If so, please post a comment below!

In Albemarle County, Virginia, the public school division is debuting a Health and Medical Sciences Academy this fall. Public high school students throughout the county will apply for a four-year program with a curricular concentration on skill sets that will serve state and national needs in the healthcare, pharmaceutical and research industries.

Dr. Pamela R. Moran, Superintendent of Albemarle County Public Schools, Photo courtesy of Jen Fariello

In the following guest blog post, Dr. Pamela R. Moran, Superintendent of Albemarle County Public Schools, discusses this innovative program and offers insight as to why it is such an important model other counties and states should copy:

There will continue to be tremendous growth in the healthcare and pharmaceutical fields over the next several years. Virginia’s employment commission projects that between 2008 and 2018, more than 12,000 jobs will have been created in healthcare technical and support operations and among practitioners. Employment in the state’s bioscience industry is growing at four times the rate of all other industries combined.

The Albemarle academy will be unique in its academic approach—beginning with an integrated core curriculum developed around areas of study with a health and medical science concentration. Latin, for instance, will be required as the foreign language course, while history, science, and other core subjects will incorporate concepts linked to the study of medicine. Specialized content, such as biomedical innovations, will be added in junior and senior years.

In our Mission Statement, we emphasize relationships, relevance and rigor, and at the top of our list of strategic goals is preparing students to excel in the global community and in a global economy. This Academy will require quality relationships in its reliance upon a broad community of expert advisors, relevance in its incorporation of private sector priorities and rigor in its academic standards.

To ensure agility and alignment with the private sector, the academy will be influenced by an external advisory board, create job shadowing and internship opportunities and use case studies to advance student competencies in real-time critical and strategic analysis.

Monticello High School (Charlottesville, VA), future home of the Health and Medical Sciences Academy

The Health and Medical Sciences Academy will include three career pathways: allied health technicians, to include a range of industry certification programs; bio-engineering, to include Genetic Engineering and laboratory research and science and medical practitioners to include M.D., D.D.S., RN and LPN.

This fall, the first entering class will consist of 50 students and each year 50 students will be added until the academy reaches its full complement of 200 students. Modeled after the county’s highly acclaimed Math and Science Academy (MESA) at Albemarle High School, teachers and counselors will identify and nurture potential student applicants as early as in elementary school.

The drug class of 2011 was larger than the past few graduating classes. We count over 30 new “innovative” drugs found among the list of FDA approvals last year. This is in contrast to the 20-something range of the past few years. On the list are some clear breakthrough treatments and a few glimpses of “the future of biotech”. The specific drugs are listed further below, but first a big picture view:

Ten of the approvals were for biologics, six of which came through CDER. Of these six, three were antibodies, two were recombinant fusions, and one was a PEG linked enzyme. The other four biologics came through CBER. The CBER approvals contain blood or serum derived therapies such as the first blood cord stem cell therapy (Hemacord), a mixture of horse derived antibody fab domains for scorpion venom (Anascorp), and an autologous cell therapy for wrinkles (LaViv). One recombinant blood protein was approved by CBER, rFactor XIII (Corifact).

A range of disease areas were addressed by the the approved therapies. Cancer, being the most prevalent with eight approvals. Two of the small molecule new molecular entities (NMEs) are kinase inhibitors for cancers that were approved along side companion diagnostics. We expect to see more of this in the future, as patient identification and responder selection gains more traction in the industry, and regulators welcome the concept. News this week from Biogen, regarding Tysabri, underscores the importance using diagnostics for patient stratification even for approved drugs. News that Roche has bid ~$6B for Illumina also illustrates the imperative for drug developers. Examples of companion diagnostic for negative/positive responder identification, as well as safety profiling, will likely become a major theme in biotech in coming years.

The drugs slated for fast review and decision accounted for over 50% of the approvals. Orphan designated drugs made up a fifth of these approvals, and over a third were priority approvals.

Counting approvals that are new and “innovative”, is not as straight forward as copying and pasting from fda.gov. First, we only include drugs that are being approved for the first time, for a first indication. Second, we do not include imaging agents in our list, like the FDA did in their fiscal year list back in November (note we use a calendar year here). Third, unlike lists published elsewhere online that only count CDER BLA approvals, we include certain BLAs approved via CBER. Fourth, we exclude new formulations, and combinations. However, we do include chemically modified forms of exisiting drugs, such as this year’s addition of PEG to arginase in Erwinase (chemically like what Amgen did for Neulasta or Celltech did for Cimzia). As another example, two drugs with Gabapentin were approved in 2011, but only one was chemically unique (the prodrug Horizant) and made it on our list. The other, Gralise is a once daily reformulation.

Below is the 2011 list of new drugs. The colors denote biologics: Antibody (green), fusion or native protein (blue), blood fraction or cell therapy (orange).

2012 BIO International Convention to Highlight Breakthroughs in Healing, Fueling, and Feeding the World

The BIO International Convention Program Committee recently selected 125 thought-provoking and timely sessions among 13 educational tracks. The 2012 tracks include: Achieving Regulatory Approval and Compliance; Biofuels and Biobased Chemicals; Biotech Patenting and Tech Transfer; Business Development; Drug Discovery and Development; Finance; Food and Agriculture; Global Innovation and Markets; Health Policy and Reimbursement; Innovations in Vaccines; International Case Studies; Manufacturing of Biologics and Drugs; and Personalized Medicine and Diagnostics.

The tracks are designed to help attendees stay up to date on industry developments, trends and policies, improve upon your day-to-day operations and make informed decisions. Breakthroughs in medicine, diagnostics, the environment, energy production, business operations, financing partnerships, policy issues and much more will be highlighted in this year’s program.

Due to the opening of the BIO Exhibition on Monday, June 18, select programming, including breakout sessions, will be offered beginning Monday morning. The additional morning of programming will now include four full days of programming.

Monday events include:

• Biotechnology Entrepreneurship Boot Camp
• Product Delivery Workshop: Understanding the Path to Commercialization
• Leadership Summit
• Biotech Primer: Understanding Biotech in the News
• Translation Research Forum
• Diversity Summit
• BIO Career Fair
• One-on-One Partnering

Another exciting addition to this year’s event is the late-breaking breakout session slot in most tracks. Session Organizers interested in submitting a late-breaking session must submit a proposal containing new information that was not yet known or fully available by the original Call for Sessions. Proposals for the late-breaking session will be accepted February 20^th – March 5, 2012. Late-breaking applicants can apply at convention.bio.org.

Attendees can expect to hear from not one but two Keynote Speakers at this year’s Convention. Tuesday, June 19^th and Wednesday, June 20^th will feature dynamic presentations from exciting industry thought leaders. For a complete schedule at a glance, visit here.

Don’t miss out on the exciting extra day of programming! Make plans now to attend Monday’s special programs with some of the biggest names in biotech. As an added bonus, most of these special sessions are FREE with Full Convention or Convention Access registration. Check back often for Convention and program updates.