Healthcare Newsletter – December 2017
Gene Therapy Approval Heralds in Era Of Next Generation Therapies
2017 has undeniably been a landmark year in making regenerative cell and gene therapies a tangible healthcare reality, just like 2016 was for biosimilar drugs. Beginning with Lonza’s acquisition of Pharmacell and Gilead’s acquisition of Kite Pharma, the industry has exploded with activity in racing to markets in frontier fields of medicine. The year has also marked commercialization success of regenerative medicine, and beginning with the soaring approval of Novartis’s Kymriah cell therapy, companies have kept FDA on its toes in approvals and regulatory updates. The year has come to a positive close with Spark Therapeutics bagging the first FDA approval for gene therapy. The company’s flagship product LUXTURNA™ is positioned as a one time treatment for confirmed biallelic RPE65-mediated inherited retinal disease, a rare disease in pediatric population. This is an applaudable development that offers significant promise from alternative therapies to address previously unsolved medical mysteries. As we celebrate this milestone in human medicine, we would like to bring out collective attention to the question of price and access. While we pursue next generation therapies, we have to proactively address concerns of pricing per treatment ranging between USD 500K to USD 1 million per patient. This calls for rethinking development and commercialization models to ensure sustainability in the new era and such therapies becoming mainstay in the future.
First Herceptin Biosimilar sails through FDA Approval
Ogivri™, the first biosimilar for trastuzumab, from Mylan and Biocon has secured FDA approval this month. The product is the first out of six target biosimilars planned as part of the Biocon-Mylan partnership. Currently under regulatory review in Australia, Canada, Europe and several other geographies, Ogivri is the first biosimilar to Roche’s blockbuster Herceptin®, which generated a whopping USD 6.75 billion in global sales in 2016. The drug has bagged approval for all the originator indications including HER2 overexpressing breast cancer; HER2 over expressing metastatic gastric or gastroesophageal junction adenocarcinoma. With burgeoning incidence of breast cancer across the globe, a quarter of which tend to be HER2 positive, this approval comes as a ray of hope, allaying affordability concerns for a crucial drug. This approval also signals the transitioning of Indian pharma industry from small molecule generics, strategically stepping into segments of growth to maintain continued dominance in the regulated markets. While projections indicate 8 out of 10 drug approvals will be large molecule biologics by 2020, the industry need for affordable generic versions is clear, and with increasing FDA opennness, the market is now ripe for continued success of biosimilars.
Hong Kong Overhauls Listing Rules to Attract Innovation-Led Start-ups
With the stock exchanges of New York, Shanghai, London and Singapore leading as IPO hubs for raising equity capital for young ventures, Hong Kong has so far stayed out of the race, content with most listed companies being large industrial or financial ventures. When the Chinese online retail giant Alibaba chose New York over its home base for its stock offer, it sent off a wake up call for the Hong Kong exchange to realise the need to repeal its listing procedures. The city exchange is now jumping on the bandwagon to attract younger ventures by developing more favorable listing policies, that are set to be effective in mid-2018. The new rules have brought in significant changes favoring technology-led companies, such as waiving revenue track record in the city for lower valued companies, and allowing companies valued over HK$10 billion, already listed in other stock exchanges a secondary listing in Hong Kong, to name a few. Considering the high criticality of access to capital for late stage validation and market entry of young ventures, this is a favorable move that deserves emulation in other emerging economies, to rapidly propel innovations from labs to markets.
Opportunistic M&A, a Mainstream Strategy in Pharma Business
With the ever growing race to markets amid intensifying cut-throat competition on one side, and escalating regulatory scrutiny and legal battles on the other, the global pharma industry grapples with high pressures from all directions. Several small and medium firms continue to fall through the cracks, failing to fight one or more of these market forces, only to be grabbed by bigger giants. Case in point is Allergan’s acquisition of Repros, an ailing reproductive health company based out of Texas, suffering from continuous regulatory crackdowns on its 2 pipeline assets. While the late stage male fertility drug for treating low testosterone levels caused by hypogonadism has been struggling for a few years due to safety concerns, the novel candidate Proellex®for uterine fibroids has also faced safety issues. The oral version of Proellex®is on clinical holds, as approvers demand data from bigger trials due to elevated levels of liver damage observed. Allergan, with its efforts to augment R&D efforts in women’s health, grabbed the advantage in acquiring Repros for a modest $ 26 million, at an offer price of 67 cents a share. A similar event is unfolding in Indian pharma space, as leading players race to acquire the bankrupt Orchid Pharma, a once glorious regulated market player in injectables and pharmaceutial APIs. We step into 2018 with continued focus on opportunistic M&A and earmarked budgets for inorganic growth – an active year of transactions could be ahead of us.
Tough luck for Vaccines following two glorious months of pipeline developments
On the heel of two glorious months where we celebrated successful clinical developments of several Indian and global vaccine players, December has proved to be a tough month for the industry, with a double hit on Sanofi, a market leader in the space. While the company’s Dengue vaccine Dengvaxia already suffers from poor efficacy, new findings from long term clinical data has brought to light disturbing information that, in patients that has not suffered a prior dengue infection, vaccination can result in more severe presentation of the disease in subsequent infections. This has pushed Sanofi to seek restrictive labeling, thus calling for urgent attention to the under-comprehended complexities of the deadly disease and the dire need for more efficacious vaccines. Soon thereafter, there has been a second setback with shelving of the vaccine candidate for Clostridium difficile infection. A hospital acquired infection caused by the antibiotic resistant pathogen, there is a critical need for a vaccine candidate. Yet lack of promising interim results from Phase III clinical trials has led Sanofi to take the plunge and terminate the project. Considering vaccines remain the cornerstone of global health and the first step in proactive healthcare, we hope for better outcomes in 2018.
Regulatory Clarity on 3D Printed Medical Devices
Thanks to unfettered industry growth, 3D printed medical devices have become an ahead-of-time market reality, with more than 100 3D printed devices spanning customized implants, personalized prosthetics, bionics and orthotics, already in the global market. As the industry prepares for the next generation of technologies in the field, the timing is just right for FDA’s guidance that could bring more regulatory clarity in this high growth sector. This comes as a welcome follow up regulatory milestone to the agency’s approval of the first 3D printed drug, SPRITAM®, for epilepsy, in March last year. The guidance details the design, manufacturing and testing considerations of 3D printed medical devices for fulfilling Quality System (QS) requirements. As 3D printing developments transitions beyond medical models for surgical and educational use into mainstream medical device and implants, a complementary evolution in the regulatory landscape is a critical prerequisite for market access and commercial success. Coming closely behind last month’s comprehensive FDA guidance for regenerative medicine, and the regulator’s approval of the first sensor enabled drug, we are excited to step in to this new era where paths to markets for frontier technologies are clearer than ever before, making commercial success more tangible for innovative ventures.
SATHGURU IN THE NEWS
Quoted in Nature publication on “India’s commitment to science begins to pay off”
Quoted in article on “Indian biotech boom triggers surge in research startups”
Patent to Pfizer could delay Indian vaccines for pneumonia
GST Impact on different Healthcare Sectors
Medical Buyer: Orthopedic Devices Market – At a Turning Point
Meet us at CII Biotech Conclave, Delhi (December 22, 2017)
JP Morgan Healthcare Conference, San Francisco (January 08-12, 2018)
- Critical care medical device – Opportunity assessment & India market entry strategy
- Sell side mandate – portfolio of complex generics
- Transaction Advisory – Series A investment in drug discovery venture from Swiss investment group
- Series A VC fund raising – Artificial Intelligence based digital health venture
- Specialty ophthalmic medical device – business plan for India operations
- Global strategic partnerships and exit – CE marked India developed critical care device
- Cold Chain Technologies: Transforming Food Supply Chains
- Embracing Innovation, Driving Growth Across Healthcare Continuum – “Making in India”
- The Make in India Imperative – Position Paper on Regulatory and Policy Changes required for Sustained Competitiveness of the Indian Vaccine Industry
- Indian Orthopedic Devices Market A $2.4 Bn Opportunity
- Biosimilars – How can we realize the $ 240 Bn Opportunity