The Cross-Border Biotech Blog

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

Monthly Archives: September 2010

More OETF Investments Announced, Including NeurAxon

The Ontario Emerging Technologies Fund got off to a bit of a slow start on the life sciences front, but last month it added Lumira and CTI Life Sciences as qualified investors.

Now, CTI has taken advantage of that status with OETF participating in a $14 million round of convertible debentures issued by NeurAxon, along with Delphi Ventures, OrbiMed, Ventures West, H.I.G. Ventures, BDC, NeuroVentures Fund and Lawrence Bloch (NeurAxon’s CEO).

Other investments announced today were in Covarity (software for commercial loan portfolio management) and Shoplogix (real-time performance management solutions for manufacturers), meaning a full 1/3 was allocated to life sciences in this batch. Good news for CTI and for Ontario life sciences companies.

Hat tip to MRI on Twitter (@OntInnovation) for this announcement. Note CTI is an Ogilvy client.

Biotech Trends Update — IP Constituencies: Endo’s Qualitest Purchase Shows Full Integration of Innovator and Generic Strategies

Endo Pharmaceuticals (NASDAQ: ENDP) announced yesterday morning that it will spend $1.2 billion to buy U.S. generics company Qualitest Pharmaceuticals. Endo also has an active pipeline of “innovative” products in development, emphasizing the industry trend we’ve been following of a narrowing distinction between innovator and generics companies.

Endo began its modern existence after being spun out of DuPont Merck in 1997, where it had been that company’s generics division. Instead of continuing in as a pure generics company, though, Endo in-licensed Lidoderm in 1998 and since then has mixed generics and innovative programs with wanton disregard for the traditional industry divide. In fact, Endo’s planning seems to be focused more on product classes than on patent status. The Qualitest purchase, for example, was framed as an expansion of their pain franchise. Another example of Endo’s non-traditional aggregation is pairing the Bioniche license for Urocidin (an innovative bladder cancer product in Phase III) with their purchase of HealthTronics (a urology services and equipment company).

As companies like Endo look to replace revenue from expiring patents, don’t expect them to do it in traditional ways or by sticking to traditional silos. Check out other examples here, or point me to others in the comments.

Monday Biotech Deal Review: September 27, 2010

Welcome to your Monday Biotech Deal Review. I am very excited to be writing for The Cross-Border Biotech Blog after working with Jeremy behind the scenes over the past three years. [ed. welcome (back) aboard!] It was a busy week for Canadian biotech companies, so let’s get started. Read more of this post

This Week in the Twitterverse

Lots of great weekend reading from our Twitter stream on @crossborderbio, including a plane that flies like a bird, a $450 million licensing deal and links to several worthwhile upcoming events:

Cross-Border Biotech Blog News: Favourite Features Returning With New Authors

I’m excited to announce that the Monday Biotech Deal Review and the Friday Science Review will be back next week to restart your regular dosing of Canada’s Biotech inventions and transactions.

The Monday Deal Review will be authored by Jacob Cawker, who has worked with me on the blog in various capacities over the past three years. Jake recently joined Ogilvy Renault LLP as an associate in the Business Law group, and will be part of our Life Sciences transactional team.  He has an Honours Bachelor of Science from the University of Toronto at Mississauga with a specialist in Psychology and a particular interest in neuroscience, and he worked in a behaviour genetics lab at the University of Toronto before entering law school at Osgoode Hall University.

The Friday Science Review will be authored by Mark Curtis, who recently left scientific research to pursue various consulting positions in the biotechnology sector. He has frequently worked as a consultant to Bloom Burton & Co., a boutique investment bank in Toronto that focuses exclusively on the biotechnology and healthcare industries. Prior to this he carried out research at the Ontario Cancer Institute where he focused on cellular reprogramming of human cells. Mark completed a Master’s degree in Biotechnology, with a specialization in stem cell biology, at the University of New South Wales in Sydney, Australia.

Why Technology Transfer Offices Should Focus on Sponsored Research and Ignore Royalties: In Praise of UNC’s “Express License”

A story by Xconomy’s Sylvia Pagán Westphal yesterday highlights a new approach to technology transfer licensing being taken by UNC Chapel Hill’s Office of Technology Development: The Carolina Express License. At first glance, the agreement looks, as Westphal puts it, “not very sweet for the university.” UNC takes 0.75% of any exit transaction, but no equity, no milestones and only a 1% or 2% royalty. Here’s Westphal’s description of the UNC approach (including a witty juxtaposition of religious imagery):

“They call it the holy grail of tech transfer, though critics, I reckon, think of it more as heresy. Either way, it’s gutsy.”

Count me in the group that considers it tech transfer Nirvana Nirvana.

Why? Maximizing revenue from individual licenses is the wrong priority for University tech transfer. As UNC’s Cathy Innes says:

“Where we hope to gain is that if we get a lot of companies started, more of them will be successful and have more products on the market, so we’ll be more successful…”

The University of California tech transfer system calls this the “Home Run Model,” (pdf) recognizing that even with 420 companies founded and 800 products on the market, nearly half of all licensing revenue comes from the top 5 products and the top 25 accounted for 75.6% of all 2009 licensing revenue. If more companies are started, there’s a better chance one of them is the home run.

Here’s another reason: easier licensing negotiations mean more sponsored research, and sponsored research is way bigger than licensing. For example, the USC Stevens Institute for Innovation took in $7 million in licensing revenue in 2008; but nets $500 million annually in sponsored research. Even tech transfer powerhouse Stanford takes in almost 7 times more money from industry-sponsored research than it does from licensing (PowerPoint). A small increment in sponsored research would easily offset the marginal licensing revenue sacrificed in UNC’s template.

Since December when the Express License was introduced, it has been used to found 6 companies out of UNC. Whether these six succeed or fail, I bet every person involved — the P.I.s, the founders and the funders — will be more likely to work with UNC again than if they had negotiated an individualized license. Westphal quotes Lita Nelsen, director of the Technology Transfer Office at MIT as saying the University license “is not the hard part of the problem,” but the UNC model sounds vastly less painful than every tech transfer story I’ve heard or been involved in.

Bottom line: a better tech transfer experience = an easier start-up = more companies = more sponsored research = more tech transfer wins. Here’s hoping that UNC’s Express License goes forth and multiplies.

Twitter connection: hat tip to @ldtimmerman and @Michael_Gilman for links to the Xconomy story. Follow Sylvia Pagán Westphal on Twitter at @sylviawestphal or as part of my Twitter list of Biotech Pharma and Health personalities.

Biotech Trends Update — Biosimilars: FDA Meeting in November to Discuss BCPI Act Implementation

Adam Feuerstein at TheStreet.com reported this morning on a draft FDA notice for a planned November meeting on implementation of the Biologics Price Competition and Innovation Act, which was passed as part of the healthcare reform legislation.

The BPCI Act (42 U.S.C. 262(k)(8)) provides for the FDA to author guidance “with respect to the licensure of a biological product” — pretty broad, so we’ll have to stay tuned for the actual meeting notice. However, the legislation provides some hint in permitting “product class-specific guidance” specifying criteria that will be used to determine whether a biological product is highly similar to a reference product in such product class.

If the FDA decides to move ahead with product class guidance, it would likely specify the criteria that will be used to determine whether a biological product meets the standards for “interchangeability”.

In other cases, the FDA may determine that “the science and experience [to date] … with respect to a product or product class … does not allow approval of a [biosimilar] for such product or product class.”

Bottom line: following the FDA’s November meetings, biosimilars will be one step closer in the U.S.

P.S. Adam Feuerstein cites Alec Vachon (@HEALTH_NOTES) on Twitter for breaking the story Friday. Not sure why I haven’t found him before, but Alec is now added to my Biopharma-IT-Health Twitter list.

Flow-Through Shares for Biotech: Welcome to National Biotechnology Week in Canada

Tomorrow is the first day of National Biotechnology Week in Canada. The imagenation.ca website has lots of info, and you can follow @BIOTECanadaNBW on Twitter.

One of this year’s big policy initiatives is a push to expand Canada’s Flow-Through Shares program from mining and wind power to include biotech and other cleantech companies. I gave a short presentation today on what Flow-Through Shares are, how they work and why they’re a great idea for Canada’s biotech industry.* Enjoy:

Happy National Biotechnology Week, everyone!

*Modified from a presentation authored by Ogilvy’s Flow-Through Guru Rick Sutin.

Agricultural Biotechnology International Conference (ABIC) In Saskatoon This Week Highlights Canada’s Strength in Ag-Biotech

The ABIC conference in Saskatoon this week is highlighting Canada’s strength in the field (har). Canada has world-class resources to compete: plenty of arable and marginal land, and bushels (sorry) of know-how and innovation.

Two Canadian announcements of note at the conference:

  1. Saskatchewan’s Premier, Brad Wall, announced $5 million over 4 years for ag-bio projects. The funds will be provided through the Province’s Agriculture Development Fund, which takes applications annually in a March 1 to April 15 window.
  2. Linnaeus Plant Sciences announced “a licensing agreement with DuPont to use oil gene intellectual property, advanced gene technologies and biotechnology expertise developed by DuPont to accelerate development and commercialization of value-added Camelina oil” with the goal of developing “industrial applications for oil seeds for uses beyond fuels, including hydraulic fluids, greases and polymer production.”*

The recent moves toward FDA approval for AquaBounty’s genetically-enhanced salmon are another example of Canadian strength, though it’s outside the scope of ABIC.

The conference is not as new-media-savvy as I’d like; but for more news from ABIC 2010, keep an eye on the dead tree and online versions of the StarPhoenix, which has been reporting from the meeting.

* Disclosure: The CEO of Linnaeus, Jack Grushcow, is my uncle and Ogilvy Renault worked on this deal.
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