We are looking for biotech humanitarians for our annual Biotech Humanitarian Award. The award recognizes an everyday hero who has helped to heal, fuel or feed the planet through their work in biotechnology. Know someone that you feel should be recognized for their good works? Nominate someone at www.iambiotech.org/award through January 31, 2010.

2009 Biotech Humanitarian Dr. Jay Keasling, was nominated by a colleague at the University of California at Berkley. Just think, you or your colleague could be the next honoree.

The Biotech Humanitarian Award and the $10,000 prize will be bestowed on the Honoree during the 2010 BIO International Convention in Chicago, Illinois, May 3-6, 2010.

The vaccine market is booming – and biotech companies are just one of the beneficiaries.  A recent Associated Press Article explains that an increase in government support and newer, better technologies are just a part of it.  Patients look to benefit from new vaccinations on the horizon for diseases such as Alzheimer’s, herpes, malaria, and perhaps even a universal flu vaccine.

It was just last month at the BIO Investor Forum’s H1N1 panel that panelists discussed the rise in vaccine manufacturing and the potential that market holds for growth.  While the H1N1 pandemic has certainly pushed many manufacturers to look into new techniques and processes to manufacture vaccines more quickly and in greater quantities, an increase in support and innovation could provide some new opportunities to biotech and pharmaceutical companies looking to expand into this growing field. For more, check out BioWorld Insights’ October 26 article by Randy Osborne, “Vaccine Flu Cash Flying Around: Picking Winners in H1N1 Tricky.”

Biotechnology is a global enterprise.  The United States continues to play the dominant role but European and Asian nations are continually expanding their capabilities. 

In preparation for BIO’s first ever partnering meeting in India in September 2010, I am travelling the subcontinent to promote the event and to assess the country’s biotech capabilities and needs.

On November 4th in Mumbai, I visited Reliance Life Sciences which represents a huge investment in biotech from one of India’s largest and most well known companies.  While reflective of India’s current and future strength in manufacturing generics, pharmaceutical ingredients and biosimilars, Reliance intends to become a leader in innovation in drug discovery, agricultural biotech and biofuels. 

Next it was on to Piramal Lifesciences which is focused on four therapeutic areas – cancer, diabetes, inflammation and infectious diseases.  The company has a pipeline of fourteen compounds, including four in clinical trials, and has drug discovery and developments agreements with Eli Lilly and Merck. 

I then met with the Organisation of Pharmaceutical Producers of India which includes several BIO members. Several representatives suggested that BIO encourage the U.S. Food and Drug Administration to work with its Indian equivalent to provide training to improve the country’s drug approval process.  That evening BIO hosted a reception and dinner for India’s biotech community.
 
On November 5th, I gave a keynote address at India’s BioInvest Forum which was hosted by the Association of Biotechnology Led Enterprises, our co-host for next year’s partnering meeting.  Later, I discussed investment opportunities with Orbimed and Fidelity, two investors involved in the Indian biotech landscape.
 
On November 6th, I visited Genzyme’s Delhi office and later had meetings with the Indian Secretary for Pharmaceuticals and with the Minister of Science and Technology.  Both were highly supportive of our partnering meeting plans and offered sage advice as to how to maximize our success.
 
Monday, November 9th, was a whirlwind of activity with meetings in Bombay at the National Center of Biological Sciences, Strand Life Sciences, Monsanto, Avesthagen, Metahelix and the hugely successful Biocon which has major biologics manufacturing facilities producing biosimilar cancer products, fermentors cranking out statins and a new drug discovery collaboration facility with Bristol-Myers Squibb.  Monsanto’s Bollguard cotton seed has achieved wide acceptance in India and has significantly raised farmers’ yields and income.  The first biotech eggplant is now awaiting government approval.
 
India has made significant progress in improving its intellectual property protection, but needs to go further still if it wants to become a significant biotech contributor.  Its strengths have historically been more in chemistry than in biology, which accounts for its greater skills in making follow-on products than in innovating its own. 

The country is an amazing blend of primitive and modern cultures.  Driving the streets of Mumbai, Delhi or Bangalore is a harrowing experience of pure chaos.  Modern Toyotas, lumbering trucks, buses in varying states of disrepair, swarms of motorcycles, three wheeled taxis called tok toks, bicycles, push carts, pedestrians and carts pulled by bulls, donkeys, water buffalo and an occasional camel clog the roads.  Despite the incessant horn honking, lane switching, and passing, traffic can often move no faster than the most basic means of transportation.
 
As India grows its biotechnology capacity, part of its challenge will be to figure out how its brightest scientists and entrepreneurs can keep pace with the rest of the world as it simultaneously grapples with building its educational, transportation, and public utility capacities.

Some speculation is coming back into the sector but most movement in public markets is specialist driven, not generalist driven. What will it take to get the generalist investors in? Unfortunately, most IPO stocks since 2005 have underperformed and have left a bad taste in the mouths of generalists. This has left generalists believing they cannot just come into the sector and purchase a basket of young biotechs.

Example of a successful IPO: Targacept filed an S-1 in 2004 after late stage VC rounds, then went on roadshow in 2005 and made a deal with AZ. Only after that ramp up did they go public. Like plowing the fields before planting the seeds, a biotech must develop relationships with future investors before the IPO. To this point, it helps having an analyst on board that can position your company at the forefront of the numerous other micro caps biotechs. The analyst provides the necessary attention that will be required beyond the initial pricing.

 
The effect of the IPO drought: The loss of competition of IPO vs M&A has made it a buyers market. Thus, Pharma is making some cheap proposals knowing that the exit for investors and employees is in their hands. The competition is reduced to a handful of big Pharmas and they are all thinking that they can get assets at a steep discount.

Funding the private companies: Many VCs are adapting a “dumbell” approach by investing in either seed stage or late stage companies. The early stage is high risk but requires low capital and the late stage offers visibility and somewhat lower risk but at a cheaper level than in the past. Companies in the middle may be left out.

When the opportunity arises: The IPO is not always the best option for a company due to timing of the company’s development programs. The bankers will pitch the rewards of an early exit today, but CEOs must consider the road a few years out as a public company that is expected to deliver on a conistent basis. Private company CEOs may underestimate the demands put on them once they cross into public hands. In addition, they should make sure the balance sheet is just as ready for the years ahead as the clinical data. And on a human level, make sure you CEO can handle the psychological demands that come with volatile stock price that may be down for extended periods.

Is using a bulge bracket bank important? Some would yes because you need to be with a group that interacts with volume on the buy side. A small boutique may not have those broad links to the funds. Again, this goes with getting a good analyst coverage. Furthermore, the bank may have resources to purchase a decent amount of shares and in effect become an active investor supporting the price. Having said all that, some boutiques have been able to integrate these benefits.
 
Why not just do a reverse merger? Most are messy and not palatable to the shell investors.

4Q09 projection: We should see many more S-1 filing in 4Q.

Positives for the industry (and why IPO interest may return):

Lots of cash at big biotechs to fund smaller companies
Lots of good science and people in these companies
Still many unmet needs and money to be made
Drugs for global diseases and for emerging markets are starting to be addressed
FDA is getting better
There will be another Gilead created

Negatives:
Timing – the buyside is still largely on the sidelines regarding risk
Failure rate of companies is still high, productivity low
Volatility remains

Panelists in the “Making it Personal” session discussed the clinical utility, comparative effectiveness implications and reimbursement for personalized medicine.

Tod Klinger, PhD of XDx, Inc. asserted that we are still in the early stages of personalized medicine since there is a need to determine how to link measurements with relevant clinical information for the patient to enable decision making.

Furthermore, there are many other questions that still need to be considered. Ellen Sheets, MD, of Predictive Biosciences, pointed out that it is generally assumed that patients want to know potential health problems that they may be confronted with in the future. And Pamela Munster, MD of the University of California at San Francisco added that insurers must reimburse for personalized medicine technologies, or they won’t be used anyways.

Alessandra Cesano, MD, PhD of Nodality, asserted that another challenge is that there is not a lot of data on the clinical utility of personalized medicine.

The session was moderated by Ronald Lennox, DPhil, of CHL Medical Partners.

 

Panelists at this morning’s Therapeutic Workshop, “Predicting a Frontrunner in the Race Against Pandemic Flu” had many valuable insights into this year’s flu pandemic, how it has compared to past pandemics, and how it will shape vaccine manufacturing in the years to come.

According to Dr. Tomás Aragón, Executive Director at the Center for Infectious Disease & Emergency Readiness, “Virulence [of H1N1] is no worse than the regular flu, but a larger risk pool, consisting of pregnant women and younger people, means that there’s higher levels of infection.”

Additionally, Dr. Joseph Miller of the CDC remarked that “the amount of flu we have seen in October is equal to the levels we typically see at the peak of the flu season in the winter.”

Why the hold-up on vaccine delivery?  One big problem has been manufacturing and distribution difficulties.  George Kemble, PhD, with MedImmune remarked,

“There is room for new vaccines, but it’s not easy.  There is a lot of room for the market to grow.”

What does the future look like?  According to Kemble, one option is to move out of the 40 year old technology of using eggs as a means of producing vaccines, which limits not only the amount of vaccine that can be produced but the population which can receive it, and into the use of cell culture production.

Another option is a universal vaccine, which as describe by panelist J. Joseph Kim of Inovio Biomedical Corporation, “would combine the various dominant strains of past flu infections into one vaccine that could be used for multiple years, allowing physicians to stock up on doses each year.”  Such vaccines are currently in pre-clinical trials.

Logical Therapeutics, Inc. announced positive results of a Phase I/II clinical trial evaluating the gastrointestinal (GI) safety of its investigational drug LT-NS001, the first of a new class of bio-activated prodrugs being developed for the chronic treatment of arthritic conditions.  

Read the release.