The Cross-Border Biotech Blog

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

Monthly Archives: June 2011

Monday Biotech Deal Review: June 27, 2011

Welcome to your Monday Biotech Deal Review for June 27, 2011.  There were a number of financings announced and closed in the previous week, as well as some M&A activity involving Cynapsus acquiring the shares of Adagio Pharmaceuticals.  Read on to learn more.  Read more of this post

Friday Science Review: June 24, 2011

New Drug Targets in the Ubiquitin-Proteasome System?

Mount Sinai Hospital ♦ University of Montreal ♦ Structural Genomics Consortium ♦ Celgene Signal Research Division ♦ Wellcome Trust Centre for Cell Biology ♦ University of Toronto

Published in Cell, June 24, 2011

Proteins within the ubiquitin-proteasome system are responsible for modulating the stability and cellular localizations of a plethora of proteins in the human body. Usually it is the E2 enzymes that pass ubiquitin along to a variety of substrates to alter their stability. Researchers have discovered a small molecule, being coined C60651, that latches into a cryptic sight on the E2 enzyme hCdc34, changing it structural conformation and ability to transfer molecules of ubiquitin to receptor lysine residues on target substrates. Further investigation with C60651 showed that it could stunt the growth of human cancer cell lines. Presumably, the small molecule broadly affects protein stability and interferes with essential cellular processes. Thus, it could be worth investigating the deactivation of E2 enzymes as a therapeutic paradigm for cancer.

JAK2 at the Heart of Chuvash Polycythemia

University of Toronto ♦ University of North Carolina ♦ University of Pennsylvania ♦ UC San Diego ♦ Hospital for Sick Children

Published in Nature Medicine, June 19, 2011

Chuvash Polycythemia is a rare congenital disorder characterized by an increase in the total number of red blood cells. It results primarily from genetics defects in erythroid progenitors that make them either hypersensitive or insensitive to stimulation by erythropoietin. This recent study illustrates that regulation of JAK2 could be at the centre of the disease. Typically, homozygous mutations in the R200W and/or H191D genes located in the von Hippel-Lindau (VHL) gene cause the disease. Researchers show that under normal circumstances the VHL gene product binds to suppressor of cytokine signaling 1 (SOCS1) to form a dimeric ligase that marks JAK2 for ubiquitin-mediated degradation. However, after analyzing the VHL gene product in Chuvash Polycythemia, it was found that the mutant version fails to form a complex with SOCS1 and hence fails to elicit the destruction of JAK2. To substantiate their findings, investigators treated knock-in mice homozygous for the R200W mutation with a JAK2 inhibitor and showed that the disease phenotype could be reversed.

Valuation and other biotech mysteries – Part 5: More strategy and structure for Phase 3 clinical trials

[Ed. This is the fifth part in Wayne’s series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.]

In the previous case study, we looked back at Theratechnologies and theFDA approval of EGRIFTA™ (tesamorelin for injection). Now let’s look at a product still in Phase 3, REOLYSIN®, a formulation of the reovirus being developed for the treatment of cancer by Oncolytics Biotech (TSX:ONC)(NASDAQ:ONCY). Read more of this post

Canadian Drug Pricing and Reimbursement Conference Report

Earlier this week, the Canadian Institute held its 5th annual Drug Pricing and Reimbursement Conference in Toronto. The conference highlighted a number of key issues including market access for pharmaceutical companies, Federal and Provincial regulatory and reimbursement policies, and global trends that may affect Canada’s pharmaceutical landscape. Attendees included both innovative and generic drug manufacturers, public and private payers, policy makers and lawyers.  One recurring theme at the meeting was a focus on patients as the target/end-users of the regulatory and pricing initiatives being discussed.

Of particular interest was the Patented Medicine Prices Review Board’s (“PMPRB”) session, one year after the new guidelines were released. Michelle Boudreau, Executive Director of the PMPRB, gave an update in light of the impact of the guidelines and touched on the future directions of the board. She focused on the issue of transparency in drug pricing including access to public information and open hearings for the PMPRB. In terms of moving forward, she commented on the Board’s new direction in trying to become more aligned with our international counterparts. In the coming months, the PMPRB’s transparency initiative will be exemplified through ongoing monitoring and evaluation, and increased public information made available on their web site. A consolidated version of the guidelines was promised to be available on the website by the end of June. A pdf of the presentation is available here.

Special thanks to the Canadian Institute for the conference pass and to Norton Rose summer student Karen Sie for this report.

Monday Biotech Deal Review: June 20, 2011

Welcome to your Monday Biotech Deal Review for June 20, 2011.  Notable transactions from the previous week included the public offering of units by Resverlogix, as well as investments by HTX and the Business Development Bank of Canada in each of Milestone Pharmaceuticals  and Profound Medical Inc.  Read on to learn more. Read more of this post

Friday Science Review: June 17, 2011

New Players in Interleukin-17 Response to Bacterial Pathogens

University of Toronto ♦ St. Michael’s Hospital ♦ Published in Nature Medicine, June 12, 2011

Interleukin-17 (IL-17) is a well established chemical messenger that modulates antimicrobial immune response in the stomach and intestine in the presence of various bacterial pathogens, including Pseudomonas, HelicobacterCitrobacter, and Salmonella; this has been known for some time, but the mechanism stimulating IL-17 release was until now a mystery. Researchers recently discovered that in the presence of such pathogens, CD4+ T helper cells interact with TGF-β and IL-6 to differentiate into T helper type 17 (Th17) cells that are characterized by the secretion of IL-17 and IL-22. Furthermore, they found that Th17 cells are regulated by the Nod-like receptors, Nod-1 and Nod-2. Researchers termed the cells “innate” T helper type 17 cells due to their early induction and regulation by Nod receptors, unlike adaptive-phase Th17 cells that arise at late stages of exposure. As a result of their involvement in regulating inflammation and antimicrobial response, it is believed that the Nod receptors may play a role in inflammatory bowel disease.

Treating Atherosclerosis: Shipping the Cholesterol Out of Foam Cells

University of Ottawa Heart Institute ♦ Published in Cell Metabolism, June 8, 2011

Macrophage foam cells contain large quantities of cholesterol inside an organelle known as a lipid droplet. Macrophages rich in cholesterol are problematic, as they tend to build up in atherosclerotic lesions causing plaque build-up in the arteries. An interesting paradigm for the treatment of atherosclerosis has been reverse cholesterol transport; the process wherein cholesterol hidden away within lipid droplets is hydrolyzed and removed from the peripheral tissues to the liver, where it can be excreted via bile. Over the years researchers have been investigating how cholesterol hydrolysis actually occurs to assess whether it can be leveraged to treat atherosclerosis. The dominant theory has been that all hydrolysis is driven by neutral cholesterol hydrolases, but new findings show that another mechanism also contributes to the process. Researchers found that lipid droplets in the cytoplasm of foam cells are transported to another organelle, known as a lysosome, where they are absorbed and broken down by lysosomal acid lipase. Lipid droplets are delivered to lysosomes while additional cholesterol is being loaded into the cytoplasm of macrophages from the blood, suggesting that lysosomal degradation serves as a reverse cholesterol transport mechanism.

Preview — BIO and Scientific American’s Regional Bio-Innovation Scorecard

The BIO 2011 conference is just around the corner, and Washington DC prepares for some 15,000 delegates from 65 different countries to descend upon its limits, which means it’s almost time for this year’s Worldview Regional Bio-Innovation Scorecard. This morning, the Biotechnology Industry Organization (BIO) hosted a press conference in DC to provide some highlights on the upcoming conference and to leak a few details of what this year’s scorecard would capture.

Over the last three years, Scientific American has partnered with BIO to produce a global ranking of countries in several areas related to innovation in the biotechnology sector (find a link to the 2009 results here). Jeremy Abbate, Director of Global Media Publishing at Scientific American, explained that as certain countries around the world are catching up to the US in terms of their production of innovative products, the biotechnology sector is becoming exceedingly global, and that a publication like Scientific American Worldview: A Global Perspective is needed to broadly document new trends and developments.

The essence of Worldview is to promote dialogue on what elements drive innovation, and to answer some pertinent questions: what characteristics or attributes make a country innovative? what makes a person innovative? Another goal is to identify individuals that are forces within the sector — those influential characters that are making the difference — the so called “heroes of science and finance”. Abbate iterated that although Worldview does not have all of the answers yet, it has collected massive quantities of data on the biotech sector in pursuit of them, and the scorecard is its “pièce de résistance”.

So what can you expect to see in 2011’s Worldview Regional Bio-Innovation Scorecard?

Emerging Markets

Last year’s separated the hype from the hope with a focus on China. This year China will be under the spotlight again, but this time along with the first three of the BRICs countries, including Brazil, Russia, and India. The scorecard will look closely at what these countries have to offer in terms of their capacity to innovate, their scientific output, and what capital they have available for investment. A special emphasis will be placed on the bio-innovation workforce they have to deploy across the biotechnology, medical device, and pharmaceutical industries.

The 2011 scorecard will point to the world’s fastest growing drug markets, take a deep dive on Africa and Australia, and present some analysis on innovative products, what countries pay to produce them, and how price has been affecting output. Russia’s Pharma 2020 initiative also comes into play. Will Russia be the manufacturing powerhouse that some hope it will be? During the briefing, Nikolay Savchuck, passed industry representative to the Russian government’s Pharma 2020 initiative, joked with the press that, unlike China, Russia has been all hope and no hype; perhaps it is Russia’s turn to deliver.

Biotech Movers

Making its debut to the scorecard will be the “Worldview Biotech Movers”. This section will highlight three game changers in the biotech sector and what they are doing to lubricate the cogs of innovation. This year expect to become a little more familiar with India’s Kiran Shaw of Biocon, China’s Ge Li of WuXi AppTech, and one other influential individual from Brazil. Although not always “friendly” to innovation on a global scale, these people march to their own drum and thrive on a regional basis.

The movers section of the scorecard touches on Abbate’s question — what makes a person innovative? Unlike definable elements that contribute to a country’s capacity to innovate, like intellectual property, a sound regulatory environment, science-minded policy, R&D investment, and so forth, the qualities of a great human innovator are much more nebulous. Ultimately, a country’s capacity to innovate may rely to a large degree on people. The work behind Worldview may in time bring some tangibility to this subject.

Snapshot from Canada

Cate McCready, VP of External Relations at BIOTECanada, spoke to the press and provided a snapshot of the Canadian biotechnology sector. In 2008, the Canadian government began an industrial analysis of biotechnology in the country which indicates the sector is contributing in the realm of $86 billion annually to Canada’s GDP. Although this figure is primarily driven by healthcare, McCready notes that there has recently been a divergence to other biotechnology industries, namely agricultural biotechnology, which is growing rapidly. Canada currently has 600 biotechnology companies operating within its borders, from “coast-to-coast-to-coast”, as McCready puts it. Be sure to check out Canada Cafe at the conference later this month.

A Few Highlights

So which countries will win accolades? The scorecard preview didn’t give up many hard stats, and leaves much to the imagination, so you’ll have to wait until it’s unveiled at BIO on June 29th.

Officially in, however, Denmark will take no. 1 for biotech patenting, while New Zealand proves to have the greatest number of PhD candidates per capita.

Monday Biotech Deal Review: June 13, 2011

Welcome to your Monday Biotech Deal Review for June 13, 2011.  Notable stories include the completion of GeneNews’ early warrant exercise program and debenture conversion opportunity, resulting in gross proceeds of nearly $3M to the Company.  As well, Somaxon and Paladin Labs have teamed up for the commercialization of Selinor in Canada, South America and Africa.  Read on to learn more.  Read more of this post

Friday Science Review: June 10, 2011

Silence is Golden

University of British Columbia ♦ BC Cancer Agency ♦ Institute for Virus Research ♦ Kyoto University

Published in Cell Stem Cell, June 3, 2011

Researchers analyzing the genome wide repression of genes and other repetitive elements, like endogenous retroviruses (ERVs), have come upon some findings that illustrate how epigenetic silencing occurs in mouse embryonic stem cells (mESCs). Epigenetic silencing of genes typically serves to repress the expression of very specific portions of DNA, and it has also been known to repress snippits of viral DNA found in the long winding portions of DNA between genes. To analyze what would happen in the absence of epigenetic silencing, researchers genetically modified mESCs to be null for DNA methyltransferase and the H3K9 methyltransferase Setdb1 — two enzymes that are very active in gene silencing via the deposition of methyl groups to DNA (preventing transcription of genes). Interestingly, as opposed to observing an overlap in the genetic elements that were activated in the absence of these enzymes, researchers found that two very distinct sets of genes were activated. About 15% of the genes activated in the absence of Setdb1 were activated by the promoter of an endogenous retrovirus. In as much as half of these cases, viral transcripts were fused to regular gene transcripts producing chimeric transcripts. These findings provide a role for the methyltransferase Setdb1 in silencing retro-elements and repressing aberrant transcriptional events that could lead to potentially harmful proteins downstream.

Inflammation, Innate Immunity, and the Intestine

McGill University ♦ Published in Nature, June 2, 2011

A key mechanism by which the intestine protects itself from the threat of foreign-invaders, the likes of pathogens and other microbes, is through the nucleotide-binding and oligomerization domain (NOD) proteins located in the interior of intestinal cells. These pattern recognition receptors have been highly conserved throughout the evolution of the innate immune system due to their importance in sensing infection and other dangerous signals. NOD proteins have the ability to sense proteins on the extremity of microorganisms and in response elicit a signaling cascade leading to the release of chemical messengers known as cytokines that drive an immune response and inflammation. Until recently , the exact nature of the signaling mechanisms controlling this process were unknown but as a result of some work with RNAi on the genome scale we have a much better understanding. Researchers at McGill conducted a small interfering RNA screen of 7170 human “druggable” genes to identify candidate genes that modulate the NOD inflammatory response. In doing so they identified the protein BID as an activator of NOD signaling. Macrophages from mice lacking the BID gene are highly defective in cytokine production while the mice themselves are unresponsive to local or systemic exposure to molecules that activate NOD signaling. Interestingly BID has a key role in programmed cell death, strengthening the already existing theory that programmed cell death and immunity are linked on some level.

Pharma / Biotech R&D Budgets – A Proposal For Measuring Performance

During the BioFinance 2011 conference held in Toronto last week, one presenter showed a slide that outlined the number of new chemical entities (NCEs) approved by the FDA over a number of years. Since this slide was used in the context of the increase in global industry R&D budgets, it was meant to show that the huge increase in R&D budgets had not produced an appropriate increase in NCEs approved at the FDA. Is this the correct way in which R&D performance should be measured?

Read more of this post

Monday Biotech Deal Review: June 6, 2011

Welcome to your Monday Biotech Deal Review for June 6, 2011.  This week’s deal review is brought to you by Norton Rose OR LLP summer student Steven Zuccarelli who, before entering law school at Osgoode Hall Law School, obtained his B.Sc and M.Sc at McMaster University in Biochemistry and Health Sciences, respectively, where he was involved in researching peptide vaccine models.  Steven will be assisting over the summer months with the Monday Deal Review, and it’s great to have him aboard. 

Aside from some interesting commercial deals, as well as CardioComm’s related-party announcement of a $788k asset purchase, things were fairly slow last week.  Read on to learn more. 

Read more of this post

Valuation and other biotech mysteries – Part 4: Strategy and structure for Phase 3 clinical trials

[Ed. This is the fourth part in Wayne’s series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.]

Very few independent Canadian biotech companies have successfully completed the development of a novel drug – so my first comment is congratulations to Theratechnologies. Now, let’s study what they did so we can learn how to assess other companies attempting the same feat. To repeat, my approach is to start at the end – regulatory approval – and study the pathway to that endpoint.

The FDA approval states that EGRIFTA™ (tesamorelin for injection) is indicated for the reduction of excess abdominal fat in HIV-infected patients with lipodystrophy. This approval is based primarily on proof of safety and efficacy from the Phase 3 trials. In order to determine their Phase 3 clinical strategy, Theratechnologies ran Phase 2 trials for a variety of indications, including COPD, sleep disorders, HIV-lipodystrophy, hip fractures, type 2 diabetes and flu vaccinations. They chose HIV-lipodystrophy as the best entry point for the commercialization of tesamorelin and may have considered the following factors in choosing this strategy.

  • Relative strength of the Phase 2 data for the various indications
  • Probability of success in Phase 3
  • Ability to recruit patients for the Phase 3 trials
  • Easily defined and measured clinical endpoints
  • Market potential for each indication
  • Interest of potential commercial partners for each indication

These are typical strategy and structure questions which help assess the risks and rewards about any pending or ongoing Phase 3 clinical trial program. We will look at quantifying potential rewards and more complete assessment of risks later in the series.

Here is a list of some clinical and regulatory events which occurred during the Phase 3 trials and subsequent regulatory review of tesamorelin (pulled from various AIFs in about 20 minutes).






Announced Phase 3 clinical strategy



FDA approval to start first Phase 3 trial


First patient enrolled in first Phase 3 trial



Patient enrolment completed in first Phase 3 trial


SPA for second Phase 3 trial


Last patient in first trial completed 3 months of treatment


Positive 3-month data from first Phase 3 trial



Started patient enrolment in second Phase 3 trial


52-week treatment completed in last patient in first Phase 1 trial


Completed enrolment in second Phase 3 trial


Positive 52-week data from first Phase 3 trial



26-week treatment completed in last patient in second Phase 3 trial


Positive 26-week data from second Phase 3 trial


EMD Serono licensed U.S. rights to tesamorelin


Positive 52-week data from second Phase 3 trial



Filed New Drug Application (NDA)


Announced that the FDA will schedule an advisory committee meeting



Announced that FDA will reschedule advisory committee meeting due to administrative delay at FDA

May 25

Briefing documents for advisory committee released

May 27

Advisory committee meeting; 16 – 0 vote in favour of recommending FDA approve tesamorelin


EGRIFTA (tesamorelin for injection) approved by the FDA for the treatment of HIV-lipodystrophy

By looking at this list, we can create a general list of Phase 3 questions. It is unlikely that any company will answer all or even most of these questions, so other sources such as analyst reports are useful.

  • How many Phase 3 clinical trials will be needed?
  • How many patients will have to be enrolled in these trials?
  • Will the trials be run concurrently or consecutively?
  • How long do you expect patient enrolment to take?
  • What is the timing of the interim analyses at which an independent board will assess continuance of the trials?
  • How long do you have to treat and follow the final patient before you can compile the final data?
  • What delay do you expect from the time top-line final data is released until an NDA (or BLA) can be filed?
  • Will the NDA be subject to accelerated or standard review timelines?
  • What will the cost of these clinical trials be, exclusive of ongoing corporate expenses?

The most complete outline of the clinical trial structure is contained in the Investigators Brochure and Clinical Trial Protocol but these are confidential company documents. The best current disclosure on trial structure is usually found at This searchable database can be used to find the structure of a specific clinical trial, all clinical trials for specific medical conditions, the drugs being tested in those trials (competition information) and much more.

For the biotech investor, run a historic price chart for TSX:TH, plot all of the events in the table above and see what effect, if any, there was on the share price. If you did this for several companies that took products through Phase 3, whether successful or not, you may be able to spot some trends on what events you think impact share prices. Remember that share prices will also be impacted by other factors including company financings, announcements from competitors, sector trends and global financial events.

Friday Science Review: June 3, 2011

Horizontal Gene Transfer: Bacterial Adaptation

McGill University ♦ Fudan University, China ♦ Published in PLoS ONE, May 20, 2011

The bacterium S. aureus can cause a host of problems in humans, companion animals, and cattle. Its ability to adapt and circumvent the effects of antibiotics allow it to persist, while virulence factors, acquired via horizontal gene transfer (HGT) with surrounding microflora, give S. aureus the capacity to cause disease relatively easily. The mobile genetic elements that allow for HGT to occur can come in different fashions, including viruses, plasmids, and other elements that may be self-transmissible or piggy-back with mobile viruses and plasmids. By comparing the genetic content of different strains of S. aureus researchers were able to evaluate sequence diversities from different sources to measure the extent that HGT contributes to genetic diversity. Comparative genomic analyses of strains derived from cows, sheep, chickens, and humans revealed that they are all highly associated with one another. Although the Serine-Aspartate Repeat (Sdr) family proteins in S. aureus are of unknown function, they have previously been correlated with human disease. Researchers were able to type S. aureus with regional differences in sdr gene distribution and make associations between specific distributions and clinical samples. At least one new insertion sequence observed was responsible for the HGT that allowed the sdrC gene to migrate between strains.

Eggs from Skin

University of Guelph ♦ University of Western Ontario ♦ Queen’s University

Published in PLoS ONE, May 19, 2011

A group that previously isolated stem cells from fetal pig skin has isolated multipotent stem cells from mouse skin and shown that they can differentiate into oocyte-like cells in vitro and in vivo. Researchers used a flourescent marker linked to the gene OCT-4 under the control of a germ cell-specific DNA enhancer element to see if germ cells would arise from mouse stem cells upon differentiation in culture. After cells were allowed to differentiate, a small fraction were GFP+, indicating that germ cells were indeed forming. Germ cells were greatly enlarged reaching diameters of up to 45 microns and expressed oocyte-specific markers. In terms of their visual appearance the similarity was striking; both natural oocytes and oocytes derived from stem cells were identical in size and exhibited zona pellucida-like structures. The in vivo germ cell potential of skin-derived stem cells was assessed by mixing them with newborn ovarian cells and transplanting them into the mouse. Dissection revealed that GFP+ cells also appeared in vivo. This study establishes a new model for studying oogenesis and germ cell formation in vitro.

Valuation and other biotech mysteries – Part 3: What are you valuing?

[Ed. This is the third part in Wayne’s series. You can access the whole thing by clicking here. Please leave comments or questions on the blog and Wayne will address them in future posts in this series.]

Most likely you will be valuing a company, a product or a technology. The valuation of the stream of expenses and revenues for the development and commercialization of a product or a service is the simplest situation. If you are valuing a company, you are valuing its portfolio of products and technologies. In most cases, the current and potential future value of a single product, which is usually the lead product, probably accounts for the majority of the value of a biotech company.

Valuing a technology can be more difficult. Many companies claim to have a platform technology, which can be used to develop multiple products, potentially with multiple partners in multiple therapeutic areas. When a technology has a portfolio of products and partners, there is diversification and reduction of risk. If you want to take a simple and conservative approach to the valuation of a technology, do a valuation of the most important product in that portfolio, which is often the most advanced product. There are situations where technologies get ‘hot’ and valuation of only the lead product is not a useful valuation tool – we will look at ‘hot’ technologies later on in this series.

Therefore, you are probably valuing a product and I am going to assume it is a novel drug. In order to generate substantial revenues, that drug will have to be approved by the U.S. regulatory agency (Food and Drug Administration or FDA) since the U.S. is still the largest single pharma market. The U.S. and EU markets still account for about 75% of worldwide pharma sales.

The approval will be for one or more specific therapeutic uses of the drug, each specific therapeutic use being defined by the disease and the patient population. When you start the valuation of a product, two of the first questions will be ‘What specific therapeutic uses will be approved by the FDA’ and ‘What is the pathway to that regulatory approval’.

For those blog readers who have not looked at these questions before, one of the best teaching tools is a case study. The first case study will be Theratechnologies (TSX:TH) and the recent FDA approval of its lead drug EGRIFTA™ (tesamorelin for injection). At this point, I want to highlight two important sources of information (remember – get information and ask questions).


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