The Cross-Border Biotech Blog

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

Monthly Archives: June 2009

Monday Deal Review: June 29, 2009

B&W_BigNickelThis week’s Monday Deal Review has a full set of equity deals from shelf to launch to close, one new U.S. registration and one deregistration to match, and some ideas for what to do with your debt (!), all after the jump…

REMS and Generics — Like Oil and Water

A great post from Michael McCaughan at the In Vivo Blog walks through the very complicated interaction between the world of REMS — the FDA’s Risk Evaluation and Mitigation Strategies that impose tight controls on the distribution channels for certain drugs — and the world of generics.

Under the FDA Amendments Act, which started the whole REMS business, REMS programs aren’t supposed to block or delay generic competition; but it’s not clear the legislators thought this through.  Says Michael:

does FDA really want to make it simple for dozens of sponsors to launch versions of drugs like thalidomide, when the agency has already determined that the risks of inappropriate use are high enough to merit costly, burdensome post-marketing restrictions?

We’ll find out soon… The generics maker Dr. Reddy’s has been unable to obtain any of Celgene’s anti-cancer drug Revlimid to use as a comparator in bioequivalence trials, so they’ve filed a citizen petition with the FDA.  Dr. Reddy’s is proposing mandated access to REMS-covered drugs at market prices for FDA-authorized generics manufacturers.

His bottom line:

Our hunch: products covered by restricted distribution programs will end up looking more like biotech therapies facing follow-on competition than they will like conventional generic drugs.

My bottom line:

If that hunch is right, we’ll know soon enough because innovator pharmas will all be planning REMS generics to go along with their biosimilar plays.

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Promotion

Our esteemed CMO and Editor has agreed to contribute posts on case law relevant to the cross-border biotech community.  Oh look, there’s one now.

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Brain Dump: Vacation Edition

A bit of catching up from the last few days:

Finally, a video that will brighten your day, even though it’s an ad:

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PhRMA and BIO in the U.S. Supreme Court: False Claims Act Whistleblowers Beware

As PhRMA and BIO hoped it would, the U.S. Supreme Court has agreed to hear the appeal of a False Claims Act (FCA) case that could determine how easy it is to bring a whistleblower suit under the statute.  Noting the prevalence of healthcare fraud cases brought under the FCA, PhRMA and BIO filed a brief as amici curiae, urging the Supreme Court to take the case and to limit whistleblower suits.

Whistleblowers can’t sue under the FCA if their suit is based on information in publicly disclosed federal reports or audits (see 31 U.S.C. §3730(e)(4)(A) if you’re so inclined) since the federal government has access to that information without a whistleblower’s help.  The Fourth Circuit case that’s being appealed holds that only federal reports and audits operate to bar a whistleblower suit, not state or local government reports or audits.  This decision puts the Fourth Circuit in line with the Third Circuit, but at odds with the Eighth, Ninth, and Eleventh Circuits.

In their amicus brief, PhRMA and BIO argued that allowing whistleblower suits based on allegations in state and local reports or audits would open a floodgate of opportunistic FCA litigation aimed at their members, increasing the costs to pharma and biotech companies and diverting resources from R&D efforts.

We will continue to follow the case (Graham County Soil & Water Conservation District v. United States ex rel. Wilson, 08-304).  Stay tuned…

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SBIR Reauthorization Likely: Uncertain Improvements for VC-Backed Companies

SBIR bannerThe SBIR program in the U.S. looks to be heading toward reauthorization with increased funding amounts — up to $250,000 in Phase One (up from $100,000) and up to $2,000,000 in Phase Two (up from $750,000). 

VC-backed companies are not eligible under the current program, but that should change.  The Senate version of the bill allows some funding to VC-backed companies, but caps the percentage of grants that can go to VC-backed firms at 8%.  The House version doesn’t cap the amount, but implements some other restrictions to prevent abuse: no SBIR funding to companies with over 500 employees, or that are majority-owned by one venture firm, or that have too large a stake held by “corporate-owned venture firms.”

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Gone Fishin’

Gone Fishin'I will have only occasional access to WordPress (which I use to publish the blog) over the next week.  I hope to keep up some posts, but full/regular posting will resume July 2.  The best way to know when I’m back (and to keep up with the blog in general) is to subscribe to the RSS feed.

This is a great time to check out the archives (on the right) or work back through the Trends in 2009 features.

If you see anything tremendously exciting that you want to pass along, check the About the Authors page and shoot me an email.

Pic from D. Bjorn on Flickr.

Ogilvy is #1

Monday Deal Review: June 22, 2009

B&W_BigNickelA whole gaggle of securities deals, a cluster of licenses and a flock of M&A all migrate back to Canada for summer in this week’s Monday Deal Review.  Plus, a deal that may improve the medical isotope shortage.   after the jump…

Weekend Science Review: Abba Edition

Pinky and the BrainTake a Chance on Rats:  Fiona Zeeb in Catharine Winstanley’s lab at UBC has created a rat experimental model for gambling that attracted some news coverage.  Unlike previous rat gambling experiments, this model responds to human physiological moderators of gambling behaviour, like serotonergic and dopaminergic agents, suggesting that it will be a useful system for future investigations.  Here’s the (free) full paper from this week’s Neuropsychopharmacology.

Thank You for the GWAS: A study led by Katherine Siminovich (cross-appointed (at least) at U of T, Mount Sinai and the Liver Center at Toronto Western Hospital) was published in The New England Journal of Medicine this week identifying 13 loci across the HLA class II region that were associated with primary biliary cirrhosis.

Does Your Mother Know (there’s no obvious link between fibrinolytic defects and the risk of ovarian cancer):  A PLoS One paper authored by Yaakov Bentov in Robert Casper’s lab at the Lunenfeld dismantles one widely speculated etiology of ovarian cancer.  The hypothesis — “that the inefficient removal of the blood clots and fibrin products which are deposited in the vicinity of the ovary by retrograde menstruation might be associated with an increased risk of ovarian cancer” — was not disproven, but none of the functional variants in the fibrinolytic sytem examined by Bentov et al. showed any significant association with risk of ovarian cancer.

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Trends Update — Comparative Effectiveness and Personalized Medicine: Patient-Centered Outcomes Research Act of 2009 Increases Personalized Medicine Focus

story on GenomeWeb yesterday takes a close look at the Baucus-Conrad Comparative Effectiveness Bill and notes that the influence of personalized medicine that we’ve flagged as a trend in 2009 has shown up in this year’s verison of the bill as

language specifying research approaches such as “molecularly informed trials” and “genetic and molecular sub-typing.”

This year’s version of the bill also

includes more emphasis on involvement with the diagnostics community and calls for an expert in genomics to serve on a methodology committee.

In addition to a focus on personalized medicine, the changes to Baucus’ bill incorporate another idea from Sen. Kyl’s amendment in April — adding some hurdles before CER results could be used (by CMS) for coverage decisions. 

Even so, the bill continues to meet procedural impediments and substantive objections, resisting Baucus’ efforts to re-brand the concept.

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Ontario Emerging Technologies Fund: Q&A From MRI Briefing

Ontario LogoThe questions and answers from last Friday’s MRI information session have been posted on MERX.  Here’s the link to the whole thing (if you have MERX access), but I’ll save you some time:

  • There are two parts to the bid — one for evaluating Qualified Investors and one for evaluating Qualified Investments.  The same bidder might be selected for both; but there will be a maximum of one bidder selected for each Part.
  • Avoiding conflicts of interest means …  still can’t tell, actually.  The only thing we can tell for sure is that if you win the bid, you can’t be a Qualified Investor or bring in a Qualified Investment.  Which leaves who, exactly?
  • Lots of “no”s for the bidders: no indemnification, no inflation-indexed fees, no upside participation…
  • Foreign funds can be Qualified Investors.
  • Investee companies will be required to have and maintain an “Ontario footprint.”  Shoe size TBD.

Here’s an interesting one:

Q105. How would the ministry deal with exit events that may go against Ontario’s interests? What triggers the assessment?
A105. As an investor, Ontario will decide on how to deal with exit events taking into consideration the recommendation of the Proponent, the interest of Ontario and the interest of all other stakeholders.

In other words, we have no idea.  Let’s cross that bridge when we come to it.  Cheers!

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Relocation, Relocation, Relocation: Biotech Incentives and Economic Development

Despite the skepticism expressed in the New York Times article last week, the efforts by various jurisdictions to attract biotech business continues apace.

For one, the Mayor of Jerusalem announced a $25 million program to build infrastructure and human resources for a biomedical research park at Hebrew University School of Medicine.  Of course, they’ll have to do it without Rafi.

And at least one jursidiction — Wisconsin — seems to have been having some recent successes:

Stay tuned to the money=jobs post on our Biotech Bailout page for more.

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Ontario Venture Capital Fund Does Direct Investments Too, But Still No Biotech

A press release today about I Love Rewards’ $8.7 million B round serves to remind everyone that the Ontario Venture Capital Fund has 20% of its $205 million allocable to direct co-investments.  Well, it did, at least.  Now it has $1.8 million less.

Other investors in ILR’s B round were GrandBanks Capital, out of Boston, and prior investors JLA Ventures and Laurence Capital.

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Jeremy Grushcow Quoted in Nature Biotechnology

Ontario Emerging Technologies Fund RFP: Excerpts from MRI Presentation

A couple of weeks ago, Ontario’s Ministry of Research and Innovation put out an RFP for the new $250 million Emerging Technologies Fund, looking for a third party to evaluate co-investor and investment applications, and to administer and monitor investments for the fund.

Last Friday, they held a briefing for interested parties where they presented an overview of the ETF and of the RFP.  Here are the interesting bits:

Also, note that the deadline for addenda was extended. MRI can now publish addenda until June 18th, but bids are still due the 24th.

In order for your bid not to be disqualified, you have to get the RFP and apply through the tender system, MERX. It’s a ton of fun, plus you get access to the whole RFP and further updates, and can check out who’s been checking it out, too.

Trends Update — Nonprofits Funding Commercialization: TB Alliance Splits Development Costs With J&J Sub for TB Drug

Mycobacterium_tuberculosisOne of the trends in 2009 we have been following is the increasing willingness of non-profits and disease advocacy groups to fund commercial product development by for-profit companies. 

Today, the nonprofit Global Alliance for TB Drug Development announced that it will share the development costs for J&J subsidiary Tibotec’s drug TMC207, and that the TB Alliance and Tibotec will collaborate on future pipeline products.

This is not the TB Alliance’s first foray into commercial development.  In May, they announced four other drug development collaborations, including 3 with academic institutions, and one with Anacor Pharmaceuticals.  Under the Anacor collaboration, Anacor gets unspecified “support” from the TB Alliance, and the TB Alliance gets a non-exclusive, royalty-free worldwide license for TB.

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New Funding for BDC Says Venture Capital in Canada “Tastes Great!”; Kedorsky Says “Less Filling!”

Horse's MouthYesterday Tony Clement announced an additional $450 million in funding to BDC:* $100 million in credit guarantees, $260 million for follow-on investments in companies where BDC is already a direct investor, and $90 million to invest in venture funds.  The follow-on money and the LP money will be spent over 3 years. (On purpose. (Ha.))

All the more topical, then, that in a recent WSJ VC Blog post on Canada’s venture capital industry Paul Kedorsky is quoted as saying that Canada’s industry won’t be helped by “government want[ing] to goose things.”  Paul, who used to be at Ventures West, authored a Kauffman foundation report saying the U.S. VC industry needs to shrink (check!), and thinks the industry on both sides of the border needs “a kind of restart.”

Personally, I vote “don’t look a gift horse in the mouth.”

*H/T Mark Macleod and @chrisarsenault.  Pic from thelivingdead531.

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Trends Update — Electronic Medical Records: GE’s First Healthymagination Project Aims to Speed EMR Adoption, May Also Help GE Sell Stuff

floppy-disk1GE has put $100 million — the first installment of a promised $6 billion commitment to its “healthymagination” goals — into funding zero-interest loans to physicians’ offices, hospitals, clinics, etc. to support the purchase of (GE’s own) electronic medical records (EMR) systems.

The program is called “Stimulus Simplicity” and it has a couple of very smart features:

  1. 1.    The interest-free period extends through 2012, a year after the U.S. stimulus funding will give credits to EMR purchasers; and
  2. GE will include a “certification warranty” that will ensure the systems qualify for the stimulus funding.

Highly Ymaginitive, GE!

[A side note for the lawyers in the audience: GE says Stimulus Simplicity contracts feature “extremely simple language.”  Truly plain language contracts … that could be a $6 billion benefit right off the bat.]

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Monday Deal Review: June 15, 2009

B&W_BigNickelAnother active week for Canadian deals, headed by Merck’s new deal with Xenon, along with some new funding, some new collaborations, and some new products coming to, and going from, Canadian companies all for your easy-reading pleasure after the jump…

Xenon In, Neuromed Out: Merck Nets Zero Canadian Collaborations This Week

Revolving_Door_SignYesterday, Merck signed a deal with Vancouver-based Xenon Pharmaceuticals.  Merck will fund the R&D and in return gets an option on the output — small molecule cardiovascular drugs (if at first you don’t succeed…).  Xenon describes the deal as generating

option exercise fees, research, development and regulatory milestone payments of up to US$94.5million for the first target and up to US$89.5 million for each subsequent target selected for drug discovery.

While noting that the milestones, for biobucks, “aren’t sky-high,” the In Vivo Blog described the deal as “a big step forward for Xenon.”

No sooner was the Xenon press release out, though, than Neuromed (also based in Vancouver) announced that Merck was pulling out of their 3-year collaboration looking for NCE’s targeting N-type calcium channels.  According to Dr. Christopher Gallen, President & CEO of Neuromed:

“[t]he molecules generated in our collaboration, while effective in disease models, did not demonstrate the profile needed to enter the next phase of testing, including human clinical trials.”

Neuromed is still working on its lead drug candidate — an XR formulation EXALGO™ (hydromorphone HCl) — and a development program for oral drug candidates to block T-type calcium channels for pain, epilepsy and hypertension indications.

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Ontario H1N1 Swine Flu Update June 11: 1,562 Total Cases, 10 in Hospital. Oh, and It’s a Pandemic.

B&W_AntigenicShift_HiResCropOntario’s update yesterday brought the total number of cases in the province to 1,562 with two deaths, both fatalities having been people with underlying medical conditions.  The number of people hospitalized has increased from 6 to 10 since our last update (no word on the turn-over in that number), some of whom do and some of whom do not have underlying medical conditions.

Notably, the World Health Organization finally gave up the ghost today and declared Swine Flu to be a Phase 6 pandemic (duh), but made sure to note that it’s not severe:

“At this early stage, the pandemic can be characterized globally as being moderate in severity,” WHO said in the statement. A spokesman added that the term pandemic was “measure of the spread of the virus, not the severity of the virus.”

So we have a historic, but not too scary, announcement.  I guess the delay allowed some desensitization to the idea of a Phase 6 pandemic declaration.  Meanwhile, lest you slip from panicked straight to complacent, here are the Ontario stats:

Ontario Swine Flu cases total June 10

Some leveling-off on new cases, maybe:

Ontario Swine Flu cases average June 10

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Health IT in Ontario: Electronic Medical Records, eHealth Procurement Need Help; Online Resources Make Progress

floppy-disk1The Ontario Health Quality Council’s (OHQC) 2009 Annual Report On Ontario’s Health System was released earlier this week, and it notes that Ontario lags when it comes to EMR adoption:

25 percent of family-practice doctors in Ontario had electronic medical records, compared to 50 percent in Alberta, 98 percent in the Netherlands and 89 percent in the United Kingdom.

Of course, eHealth Ontario is focused on other priorities: wait times, diabetes management, medication management…  and crisis management.  Ontario’s EMR target for full adoption is 2015, but the Ontario Medical Association and the Ontario Hospital Association both issued releases supporting the OHQC Report’s call for more EMR adoption.

Meanwhile, the Pew Research Centre has a new report out today about how consumers use the internet to find and interact with sources of health information that shows a pretty high level of engagement — according to the WSJ Health Blog’s interview with a co-author of the report:

Nearly 60% [of internet users] said they have consulted blog comments, hospital reviews and doctor reviews, listened to podcasts about health care and signed up to receive updates about health or medical issues. And 20% have posted comments, reviews, photos, audio or video online related to health care, such as participating in an online group forum.

On this front, Ontario is doing pretty well.   The Canadian Medical Association launched an online diabetes tool for family physicians with chronic disease patients at mydoctor.ca which:

allows patients to share important diabetes-related information – such as blood sugar, weight and exercise results – with their doctor in a secure, online environment.

Also, the Ontario Hospital Association’s myhospitalcare.ca website, which started off pretty thin, has gotten an information upgrade this week.

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FTC Weighs In: Favors Compromise on Biosimilars Exclusivity, Disfavors Pay-For-Delay

The FTC released a report today that explores the economics of biosimilars’ market entry and competition.  It predicts that biosimilars will be priced only 10 to 30% under their corresponding pioneer biologics; and that pioneer biologics will retain 70-90% of their market share subsequent to biosimilar market entry. 

Based on these predictions, the FTC concludes that the proposed 12-14 year exclusivity period (here’s looking at you, Eshoo-Barton) is “too long.”  I’m sticking with my guess that we see a compromise from Waxman on the exclusivity period, landing around 8-10 years.

The report also reiterates the FTC’s opposition to pay-for-delay deals and corresponding support for H.R. 1706.

P.S. The InVivo blog says there’s convergence on “biosimilars” over  “generic biologics” and “follow-on biologics” as the nomenclature of choice (presumably “subsequent-entry biologics” loses too), so I’m running with it.

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Totally Worth 3:57 of Your Time. Totally.

Making the rounds (har) with the HealthIT blogging crowd:

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Monday Deal Review: June 8, 2009

B&W_BigNickelWell, it’s a day late, but no dollars short.  Here is an action-packed Deal Review.  Read on for some debt settlement, some creditor un-settlment (a BIA filing), and all kinds of M&A related rejigging…

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Chalk River Reactor Isotope Shortage Gets Timing Update, International Attention, Local Solution

683px-Schematicky_atomThe shut-down of Ontario’s Chalk River reactor, one of the few sources of medical isotopes for imaging in the world, is now predicted to last at least three months, and the resulting isotope shortage has been noted by the WSJ’s Health Blog as likely to get “a whole lot worse.”

Meanwhile, in Quebec, Sherbrooke University Hospital is substituting a sodium fluoride isotope for bone scans (about 20-40% of the scans done in a day). It’s a 40-year-old technology that they make in-house using a cyclotron. Cyclotrons, you may have noticed, are much easier to come by than nuclear reactors.

Friday Science Review: Studying for the Bar Edition

ErlenmeyersWhile I am studying for the Ontario Bar exams over the next few weeks (a jurisdictional hat trick if I pull it off), I will try to keep up with the blog by cutting down on the analysis and commentary and putting you a bit closer to the primary source material than usual.  For the science review, click on and get the full, uncolo(u)red PubMed results to see what Canadians have been up to this week…

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The Economist on White Biotechnology (aka Green Chemistry, Industrial Biotechnology)

800px-Sugarcane_harvesting_equipmentA good piece in The Economist sums up the science and policy of industrial biotechnology.  Among other kernels of information (har), they cite a McKinsey consultant for the proposition that “[s]ales of industrial-biotechnology products were about $140 billion in 2007, and 6% of all chemicals sales were generated with the help of biotechnology.”

Interested? Montréal is hosting the 6th annual World Congress on Industrial Biotechnology & Bioprocessing on July 19-22, and is expecting over 1,000 participants.  Canada has world-class resources to compete in the field: plenty of arable and marginal land, and plenty of Ag-Bio know-how and innovation.

Novel Deal Structures Becoming More Common

Outside the BoxAt the RIC/OCETA talk I participated in last month, one of the trends in deal-making that I mentioned was novel structures.  At the time, examples included option deals and new ways to split rights and territories. 

More recently, we’ve seen GSK and Pfizer form a joint venture to develop HIV treatments, and two more interesting ideas came up this week:

  1. Index Ventures, a VC firm, is forming a joint venture with Amunix Inc., a biotech company.  The idea is, according to the WSJ Venture Capital Dispatch blog, to focus entirely on drug development, not research, and advance three candidates quickly through Phase I proof-of-concept.
  2. AstraZeneca and Merck are teaming up for what FierceBiotech calls an “unusual, early-stage clinical program” where each company is contributing an experimental cancer drug candidate that, in combination, should attack complementary pathways.  From the joint press release:

    Under the terms of the agreement, AstraZeneca and Merck will work together to evaluate co-administration of the compounds in a Phase I clinical trial for the treatment of solid cancer tumors. All development costs will be shared jointly. Following the Phase I trial, the companies will consider opportunities for further clinical development.

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