The Cross-Border Biotech Blog

Biotechnology, Health and Business in Canada, the United States and Worldwide

Monthly Archives: May 2009

Trends Update — Personalized Medicine: DxS’ Latest Companion Diagnostics Deal

B&W_DNA_sequenceAs personalized medicine inches toward becoming the standard of care for cancer, the question of who pays for the genotyping becomes more important.  A deal announced Friday between DxS, a molecular diagnostics company, and Boehringer Ingelheim suggests that pharma companies will end up footing at least part of the bill by paying for the development (and marketing?) of companion diagnostics.

As noted by IVB in their Deals of the Week this week, the Boehringer Ingelheim deal is only one of several that DxS has done recently:

Last December, DxS signed a US-centered deal with Amgen to provide a companion diagnostic for the Big Biotech’s colorectal therapeutic Vectibix. The test maker’s so-called TheraScreen K-RAS test is already on the market in the EU and is used to help doctors determine which patients are unlikely to respond well to anti-EGFR therapies such as Bristol-Myers Squibb/ImClone’s Erbitux (cetuximab) and Amgen’s Vectibix. Moreover, DxS and Amgen have collaborated since last year on selling TheraScreen K-RAS alongside Vectibix in Europe, where the drug is cleared for patients with refractory metastatic colorectal cancer in which there is no K-RAS mutation.

Also notable: this statement in the press release attributed to Dr. Manfred Haehl, Corporate Senior Vice President Medicine of Boehringer Ingelheim…

As this year’s theme at ASCO highlights, it is very likely that personalised medicine will play an important role in selecting the most effective treatment for patients with cancer.

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Trends Update — IP Constituencies: Rumors about GSK-Shantha Biotech

B&W_BlankMap-World-nobordersSince we’ve been following innovative activity in India and China as part of our Trends in 2009 series, we had noted a report at the end of March that GlaxoSmithKline and Sanofi-Aventis were each in talks to buy a majority stake in the Indian company Shantha Biotech from France’s Merieux Alliance, which owns 80 percent of the company.

A report in India’s Economic Times today, picked up by FierceBiotech, says that Sanofi had dropped out and that the deal with GSK has “[o]nly a few matters relating to the valuation” remaining.  This is a bit like saying Israel and the Palestinians are close to a peace accord with only a few matters related to borders remaining.  Hopefully GSK and Shantha/Merieux are closer (and friendlier) than that, but valuation is obviously a big issue, so I wouldn’t be counting any biosimilars before they hatch.

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Flow-Through Shares for Cleantech and Biotech in Canada

800px-SieveRick Sutin, a partner at Ogilvy Renault (my home-away-from-home), has a post up at Cleantech in Canada singing the praises of flow-through shares.

So far, the flow-through program in Canada has been available (mainly) to resource exploration and development companies, but we have been arguing for a while that the program would be ideal for Cleantech and Biotech as well.

Why? See if any of these points sound familiar to a Biotech audience:

  1. Success comes from discovery and development programs, and relies on large amounts of high risk venture capital where revenues are uncertain and remote; flow-through shares filled the gap for resource exploration by providing venture capital at premium valuations through the public markets.
  2. Flow-through shares have made Canada’s capital markets the recognized global leader in resource finance and home to more resource companies than any other country in the world. The Canadian industry now develops and attracts the top resource management talent in the world.
  3. Government participates not by picking potential winners, but by giving private sector investors a tax incentive to make those choices and take those risks.

Here’s how flow-through shares work:

A company that issues flow-through shares must spend the proceeds on qualifying expenditures in Canada.  The expenditures are then renounced by the issuer to its investors, who can treat the expenditures as if they made them themselves.

How does it look from government’s perspective?

The government incurs an expense by foregoing tax that would otherwise be paid by the investors. However, the government recoups tax revenues from the recipients of the expenditures that would otherwise not have been made without this program and on the subsequent sale of shares, as the tax cost of shares is reduced to zero in the hands of the investors.

This is one of the few government programs that has successfully run for 20 years, contributing to Canada’s dominance in a significant sector without any problems or abuse.

A good deal all around.

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IVB’s Great Take on the GSK-Pfizer HIV Joint Venture

The In Vivo Blog has a really interesting post by Roger Longman discussing what they view as the groundbreaking and innovative aspects of GSK and Pfizer’s HIV joint venture, announced just over a month ago

The gist is:

  1. The venture allows flexibility and accountability in an R&D operation with pharma-scale resources; and
  2. The JV has its own equity that it can use to reward employees directly and to raise new funds.

IVB’s bottom line: “whether it works or not, the drug industry should be paying close attention to this deal.” 

My bottom line:  I certainly hope it works, because it seems like it would be a bear to unwind.

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IIROC and FINRA Sitting in a Tree, W-h-i-s-t-l-e-b-l-o-w-i-n-g!

WhistlesThe Investment Industry Regulatory Organization of Canada (IIROC) established a new Whistleblower Service that was open for business as of yesterday.  According to IIROC President and CEO Susan Wolburgh Jenah:

“This service will ensure that individuals who believe that they have significant information to convey deal directly with IIROC senior staff who will ensure that each tip is properly evaluated and promptly dealt with.”

The IIROC announcement follows, with uncanny precision, in the footsteps of FINRA’s March 5 announcement of its whistleblower service, described by FINRA’s Interim CEO Stephen Luparello as follows:

“This new initiative will ensure that individuals with significant information will reach senior staff, who can quickly assess the level of risk involved and make sure that each tip is properly evaluated. Those tips warranting additional review and investigation will be subject to an expedited regulatory response.”

Well, you know what they say: Great self-regulatory organizations think alike!

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Genome BC and PROOF Launch Phase Two of Biomarkers in Transplantation

RecycleMeGenome British Columbia and the Prevention of Organ Failure (PROOF) Centre of Excellence at UBC announced the launch of the second phase of the “Biomarkers in Transplantation” project, which aims to use a simple blood test to identify patients who are rejecting a transplanted organ.

The current test for rejection is a biopsy — which costs somewhere between $5-10 thousand dollars — and the average heart transplant recipient will need between 14 and 16 biopsies in the first year alone.

The new test is a biomarker test that has been “validated … in one group of patients” and is now being readied for the Health Canada and FDA approval process.

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Patheon and JLL Head (Back) to Court

Hockey_fightIf you’ve been following the Canadian takeover saga that is JLL Partners’ bid for Patheon, you’ll be not at all surprised to learn that litigation is now pending.  Read all the gory details from today’s announcement by Patheon’s Special Committee of Independent Directors after the jump…

Ontario Swine Flu Update May 26: First Death, 352 Total Cases

antigenicshift_hirescrop1Ontario reported yesterday that:

A 44-year old Toronto man with a chronic pre-existing medical condition passed away on May 23rd. On May 24th laboratory testing confirmed a positive test for H1N1 in this individual. It is not clear what role the H1N1 virus played in the fatality which is now under investigation by the Office of the Chief Coroner.

Also, there were 58 new cases since the previous report on May 22, bringing the total to 352.  Here’s how things have looked so far in Ontario, where we appear to be averaging about 15-18 new infections per day:

Average number of Ontario Swine Flu cases May 25

Also, the cumulative total:

Ontario Swine Flu total cases thru May 25

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More New Canadian Tech VC Funding

BDC LogoThe Business Development Bank of Canada (BDC) is putting $75 million, allocated in the Federal 2008 budget, into the new Tandem Expansion Fund. The Fund expects a first close of $300 million this summer, and will invest in “Canadian technology growth companies.” At the helm are Charles Sirois and Brent Belzberg. 

More details about the team and the fund after the jump…

Opposites Are Majorly (Histo) Compatible

Love_heartNotch another study backing up the old adage. Opposites do attract. Work by Maria da Graca Bicalho and her colleagues at the University of Parana in Brazil compared major histocompatibility complex (MHC) sequences in 90 married couples and found significantly more divergence than among 152 randomly-generated pairs.

Congratulations to them for:

  1. Showing that the initial MHC-correlated attraction — noted in 2005 by Claus Wedekind, a researcher at the University of Bern, in Switzerland — actually correlates through to marriage; and
  2. Doing it without the old smelly shirts used by Wedekind in the original work.

Don’t trust your nose?  You can always try Scientificmatch.com and let a sequencer do the sniffing.

Bonus: Check in first with a patent-pending saliva test for halitosis, called OkayToKiss, which “turns blue if it senses high quantities of certain bug enzymes.” Get the full scoop from ScienceNOW.

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Monday Deal Review: May 25, 2009

bignickel1This week’s deal review has a couple of new placements, a couple of new plants, a very interesting claim asserted in Boston, and many, many updates on deals we have previously covered.  Check out the full review after the jump…

Friday Science Review: Timing Is Everything Edition

ErlenmeyersSome interesting clinical studies in the New England Journal and in JAMA this week from Canadian researchers show the importance of timing interventions and medications properly. Read on after the jump…

Data.gov — Empiricists, Start Your Engines

Fed-budget-2000-chartNotwithstanding BIO 2009, and apparently easily outshining Wolfram Alpha, this has got to be the coolest thing I’ve seen all week since sliced bread — data.gov

According to OMB Director Peter Orszag’s post on the White House Blog:

Data.gov will open up the workings of government by making economic, healthcare, environmental, and other government information available on a single website, allowing the public to access raw data and transform it in innovative ways.

As the blog post points out, and as I and almost anyone else can attest, goverment data is often buried a zillion levels deep in agency websites, and is often in pdf format.  The implementation of data.gov would make data access immeasurably better, but thanks to data.gov it will probably be measurably better (har).

The site now has a limited dataset, although it already contains interesting things like:

and the existence of XML, KML/KMZ and ESRI in addition to CSV/Text suggests lots of powerful features to come.

Anyway, for more info, check out the Open Government Initiative Innovation Gallery, and/or watch this video of Chief Information Officer Vivek Kundra describing the site:

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Scientific American and BIO worldVIEW Scorecard: A Global Biotechnology Ranking

world_map_2002Scientific American gathered and crunched a large amount of data to try to generate an objective, empirical ranking of 36 different countries’ biotechnology output and potential.

Here’s the special issue homepage, and here’s the scorecard page; but there are several interesting accompanying articles, particularly for those who have been following our Trends in 2009. See if either of these ring a bell:

I encourage you to check out the whole thing; but for all the Canadians out there who don’t want to read it for the articles, here’s the centerpiece:

Good news:

Canada ranks in the top 10 globally in IP Protection and ranks 5th globally in Intensity (a measure designed to give proper weight to “small countries with strong biotechnology activities”).

Bad news:

Canada misses the top 10 globally in Enterprise Support, Education/Workforce [really?], and Foundations.

Canada misses the overall top 10 by a hair as well, scoring an overall 2.9 versus a tie of 3.0 for Australia, Finland, New Zealand and Switzerland.

I am off to their presentation to “discuss” Canada’s failure to crack the top 10 ;-)

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BIO 2009: Wednesday Keynote Lunch Panel on Health Reform Live-ish Blog Part 2

BIO 2009More from panelists Tom Daschle, Bill Frist, Karl Rove and Howard Dean, and moderator health journalist Susan Dentzer (Editor-in-Chief, Health Affairs). Click here for part 1.

Next topic: process. Regular legislative process or reconciliation?

TD – No reconciliation needed as long as current process (esp. Senate Finance Committee) continues to work well in a bipartisan manner.

BF – shouldn’t need to resort to reconciliation.

TD – reconciliation/filibuster go together.

SD says Michael Steele spoke yesterday about taking on the President head on – does that apply?

KR throws Steele under the bus, saying something to the effect that Steele’s statement was about Steele as Chair of the party, not about this debate.

Next: Biosimilars. Will we see a 10-12 year period?

The panel is afraid of tomatoes (or shoes) because both HD (quite explicitly) and TD (less so) get universal nods of assent (and applause) for long exclusivity periods, everyone having temporarily forgotten about the last 45 minutes of universal nods of assent for cost containment. Yay innovation!

SD Wrapping up: looking forward, what can we expect?

BF – A big plan will pass, but not until next year. $1.5 trillion, universal coverage.

HD – This year, public plan.

KR – Congress will not pass a public plan with any Republican support. Totally supportive of a plan that costs no new money and relies entirely on private sector solutions. Can’t fight something with nothing, though, so look for substantive alternatives from Republican participants. Oh, and HD is an “ignorant twit”. Ha ha, he’s just kidding though. The end.

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BIO 2009: Wednesday Keynote Lunch Panel on Health Reform Live-ish Blog

BIO 2009The panelists today are Tom Daschle, Bill Frist, Karl Rove and Howard Dean, and the moderator is health journalist Susan Dentzer (Editor-in-Chief, Health Affairs).

First topic: Harry and Louise (Susan calls them The Two Horsepeople of the Healthcare Apocalypse). Where are they today?

TD – Want to get something done, concerned about costs of healthcare.

BF – Cost. Is a changed system going to be more expensive for them.

HD – Need a public option (not replacement).

KR – Cost, portability, relationship with doctor. 70% with insurance view their current healthcare as good or excellent.

Second topic: current plans on the legislative table.

BF – Responsibility to insure uninsured (a number he puts at 15-18 million). Mirrors a point KR made in response to HD – the risk of “crowd-out”, i.e., people being “dumped” from private plans and other market-distorting effects of having a public plan.

SD – Public plan in House bill, not clear in Senate. Outcome?

HD won’t prognosticate. Comes back to putting both options on the table.

KR – Don’t need public plan to provide choice, cf Medicare drug plan.

Panel drinking game: take a shot every time someone cites a poll with obviously biased question language. Seriously, people, room full of empiricists here.

Third topic: how to pay?

BF – wins for working “taxes” and “spending” into a single sentence.

HD – Gas tax at 10 cents a gallon would pay the whole thing.

TD – Will lose the debate if people believe the reforms won’t create savings overall.

HD and KR fight about whose deficit is bigger, and I’ll move the rest to a new post.

 Click here for Part 2…

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Canada’s Clean Energy Fund Gets Some Details Detailed

The new Canadian federal $1-billion Clean Energy Fund announced in January’s budget will be spent over five years, according to Natural Resources Minister Lisa Raitt who spoke about the Fund on Tuesday:

  • $650 million will be for carbon capture and storage projects;
  • $200 million will be for smaller renewable and alternative energy demonstration projects; and
  • the remaining $150 million will be for R&D for new types of renewable and clean energy, plus technology to deal with tailings ponds and water use in the oilsands.

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Medical Isotope Shortage Looms as Canada’s Chalk River Reactor Shuts Down

683px-Schematicky_atomAccording to a CBC News report today, Canada’s Chalk River nuclear reactor was shut down for a power outage last Thursday, and Friday inspectors noticed a heavy water leak at the base of the reactor.  The month-long shut down that will be needed for repairs means that only one reactor in the world, the HSR reactor in the Netherlands, will be producing medical isotopes.  The Netherlands reactor can only service about one-third of global demand, and much of its output is committed outside of North America under existing supply contracts.

Because the isotopes have a short half-life, they cannot be stockpiled and the shortage will begin to affect diagnostic capacity by this weekend.  Reactors in Belgium, France and South Africa are currently shut down as well.

A long-term solution may be available, if a joint effort by Canada’s TRIUMF accelerator lab and Ottawa-based medical isotope supplier MDS Nordion succeeds in trying to make the primary isotope (molybdenum–99) in a linear accelerator instead of in nuclear reactors. However, construction on the project doesn’t start until next year, and the first tests would not be until 2013.

An apparently similar effort is underway in a recently-announced collaboration between an Idaho company and Idaho State University.

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Trends Update — Electronic Medical Records: Your eHealth Future from CNET News

floppy-disk1CNET News has been taking a look at electronic medical records over the last few days in a feature called “Your eHealth Future” (hat tip to the WSJ Health Blog).  They are covering health care reform from the IT side, presented in six articles, all accessible through this link:

  1. 1.   Dragging health records into the Digital Age;
  2. Microsoft, Google in healthy competition;
  3. What you need to know about e-health records faq;
  4. Politicos prep for another health care showdown; 
  5. Why are doctors such Luddites? and
  6. Taking your health record with you.

 

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BIO 2009: Ontario Premier’s Breakfast

BIO 2009The speeches (s-peach-es?) just finished this morning at the Ontario Premier’s breakfast.

Minister of Research and Innovation John Wilkinson announced that Ontario has recently completed 2 new BIP investments:

Ontario’s Premier — Dalton McGuinty, winner of BIO’s second annual International Leadership Award — spoke next, highlighting the Ontario Innovation Agenda, including BIP, business tax reductions and recent funding in the Emerging Technologies Fund and the new $100 million for genomics research.

Dr. Nagy also spoke, emphasizing the $100 million of new funding and the value of a peer group of 95 P.I.’s in Ontario working on stem cells and regenerative medicine. Current work focuses on cell type switching without regression to pluripotency.

On to the omelet…

P.S.  First time here at the Cross-Border Biotech Blog?  Welcome! Check out who we are, check out our Trends in 2009 series, or hit the search and navigation tools on your right and see if you see anything interesting.

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BIO 2009: Monday Technology Transfer Breakfast

BIO 2009I was at breakfast yesterday morning with university and company members of the BIO Technology Transfer Committee.  Some interesting tidbits, colo(u)red by my preception and commentary and not to be attributed to any other attendees:

P.S. First time here at the Cross-Border Biotech Blog? Welcome! Check out who we are, check out our Trends in 2009 series, or hit the search and navigation tools on your right and see if you see anything interesting.

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Monday Deal Review: May 18, 2009

bignickel1A fairly quiet week on the deal front, but if Becton Dickinson can sell $750 million of 10- and 30-year notes just for the heck of it, things in the market can’t be too bad, right?  Here’s what I saw on the wires this week…

Read more of this post

The Cross-Border Biotech Blog at BIO 2009

BIO 2009I have arrived in Atlanta for BIO 2009! Stay tuned for updates on Ontario, Canadian and international developments.

Tonight’s developments: the Canada reception was at Dailey’s, in the cigar bar, and was very smoky. Canada’s Minister of Industry, Tony Clement spoke, but no-one I met heard a word he said (bad sound system). I’m sure we’ll hear more from him over the next couple of days, but if anyone in his office is reading this, I would love a transcript.

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Friday Science Review: Sunday Edition

ErlenmeyersHello, loyal readers.  Welcome to the Sunday Edition of the Friday Science Review.  Sorry for the delay … turns out my day job is sometimes a day and night and next day and next night job.  Anyway, this one’s worth the wait.  Lots of cool science on a cool Spring weekend here in Canada after the jump…

Hearings on the Medical Device Safety Act of 2009

Reps. Waxman and Pallone introduced legislation in March, with a parallel effort by Sens. Kennedy and Leahy, to moot the Supreme Court’s decision in Reigel v. Medtronic and reinstate (har) state tort liability for PMA-approved medical devices.

This week, they held a hearing on the bill – H.R. 1346, the Medical Device Safety Act of 2009. 

The witnesses were (click for their statements):

There is also video of the hearings available.

Opening Statements:

Panel Testimony:

Panel Questions:

More to come when I get a chance to dig in…

Human Swine Flu Ontario Update May 14: Tracking the Ontario Numbers Plus Vaccine Updates

Ontario reported 36 new cases of Swine Flu today.  All cases are still considered mild, although one patient was hospitalized for unrelated reasons. 

I thought this would be a good time to look back at the Ontario press releases and plot the number of new cases reported since Ontario started releasing numbers on April 28th.  When I did that, the plot was very erratic, so I took a 3-day rolling average.  Here it is:

Ontario Swine Flu cases

We’ll see where this goes over the next few days.

Meanwhile:

Trends Update — IP Constituencies: China Moves to Boost Biotechnology

world_map_2002An announcement by the State Council in China that was picked up by Fierce Biotech yesterday touted $9.2 billion in technology spending that will include biotech and genetically modified products (as well as large-scale aircraft, broadband wireless technology and new oil, gas and coalbed methane exploration).  The cabinet also reportedly approved new policies with the goal of creating large internationally competitive biotech companies as well as fostering the formation of smaller biotechs.

Check out the Trends in 2009 page for our other posts on increasing innovative activity in China and India and the effect on global IP policy.

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FDA Has It In for Double Vowels: Cheerios, Google Ads Targeted

Cheerios picThe FDA, you may have heard, has told General Mills that the statement “clinically proven to help reduce cholesterol” on Cheerios boxes “cause[s] it to be a drug” and, therefore, that Cheerios “may not be legally marketed with the above claims in the United States without an approved new drug application.”  Ouch.

This follows a crackdown by the FDA on Google search advertisements bought by pharma companies, which do not contain the mandated risk information.  Since the risk info would never fit within the 95-character limit of the ads, the ads link to the product websites, which do provide the required risk disclosures. “Immediately cease,” says the FDA.

Chris Morrison at the In Vivo Blog has an interesting theory explaining why this is good news for the industries regulated by the FDA:

[T]he more the public views the head of the agency as a tough, anti-industry regulator, the more ambitious the agency can be in taking on initiatives that benefit the regulated industries.

Chris draws a parallel to the actions of former FDA commissioner David Kessler, appointed in 1990, who seized a huge quantity of Citrus Hill orange juice from Procter & Gamble, claiming that the “fresh” appellation could not be applied to juice from concentrate, which Chris says,

set the tenure for Kessler’s term and gave him a platform and reputation of [a] decisive regulator from which to undertake a range of initiatives at FDA – including getting user fees for drug approvals and speeding approvals of AIDS drugs.

I agree that “[t]he publicity [from the Cheerios letter] can re-establish FDA in the public’s eye as a force that is willing to take on big commercial products,” but I’m not sure it’s a tactical move.  It may just be the more aggressive regulatory instincts of the Democratic appointees.

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What is the State of Canada’s Biotechnology Industry?

There have been a lot of opinions over the last couple of weeks, with little consensus.

On the pessimistic side:

  1. E&Y’s annual biotechnology report was released a week ago, and the reported taglines ranged from “time of reckoning” to “biotech business model crumbles“. 
  2. The first report from Canada’s Science, Technology and Innovation Research Council said that Canadian businesses are stingy in funding research and development.

On the other hand:

  1. The BIO SmartBrief story on E&Y’s report noted the E&Y data showing that mergers and acquisitions had a near-record year in 2008, amounting to $28.5 billion in the U.S. alone.
  2. And, Rx&D’s response to the STIC report notes that pharma R&D investment, MaRS and Montreal’s biotech/pharmaceutical cluster are all highlights of the report.
  3. Finally, BIO President and CEO James C. Greenwood said that most biotech firms likely will survive the financial crisis despite a shortage in cash assets and the lack of investments brought about by the deep freeze in initial public offerings.

My take?

E&Y’s 2008 data is consistent with the PwC-BIOTECanada report and likely reflects extra pessimism because it cuts off before the latest stimulus investments, including over $1 billion in Ontario and Québec.  As that money, plus the Ontario Venture Capital Fund, gets deployed, I think Greenwood is likely to be right and things will start to look up. 

Although Q1′s venture capital and private equity numbers still look grim, the Monday Deal Review is showing increasing activity the last few weeks and even a few offerings by public companies.

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