Healthcare Newsletter – August 2017

Sustaining Big Pharma Momentum in Biosimilars, Technology-driven Ventures Remain in the Race
Interests Spike With easing regulatory roadblocks in biosimilars, big pharma companies have managed to keep the regulatory agencies busy with back to back biosimilar approvals in the recent past. This month is no exception, with Boehringer Ingelheim and Samsung Bioepis’s Humira (adalimumab) biosimilars approved by US FDA and European Medicines Agency respectively. While market access in US is restrained by ongoing patent litigations, the approval clearly signifies continuing regulatory openness towards biosimilars, which is an encouraging development to expand affordable access to valuable biologic drugs. While big pharma focus persists in biosimilars, technology-driven companies that rely on product strengths are seen to be in close pursuit, as evident from Coherus’ successful $ 150 million fund raise from Temasek to advance its biosimilar pipeline. Coherus is one of the few standalone younger ventures in biosimilars, that exhibits promising and well-timed pipeline strength, with biosimilar candidates of adalimumab and ranibizumab. While FDA slammed down their pegfilgrastim biosimilar earlier this year, the funding could be a new ray of hope that could help the company spring back into action. This stands to prove that timing and technical knowhow remains crucial to incite investment interest in biosimilars and ventures with such strengths sans the financial muscle of big pharma, also have a place in the booming industry .
Populist Price Control Approach Prevails in Healthcare Access for Medical Devices
AffordabilityNot long after the Indian medical device industry started dealing with the bleak aftermath of price control in cardiac stents, the National Price Control Authority (NPPA) has delivered the next blow with price control on orthopedic knee implants. Standard knee implantsare capped at Rs 54,720, slashed by 65% and price control extends to all categories of knee implants. Overuse of such blanket price control as a healthcare access mechanism is concerning as it negates reward for innovation and threatens access to quality care and contemporary innovation in the long term. If the attempt by cardiac stent manufacturers to pull-back high end products from India is any indication, a similar response in this situation from manufacturers would be no surprise.While price control could be a fair approach for grandfather drugs and devices that are highly genericized, it cannot in any scenario be justified for innovation-led products. It is highly myopic to view cost of such products as purely limited to cost of manufacturing. The long regulatory pathway to market calls for significant investment prior to commercial launch and the innovation pyramid implies that cost of development of the product includes cost of several other pipeline products that did not reach the market. It is encouraging to note that Indian Government is also pursuing alternate pharmacy channels ‘Jan Aushadi’ as a means to expand access to affordable drugs and devices. This further questions the need for duality in mechanism as a continuing focus on blanket price control severely shrinks market, deters market development and access to innovation in the long run.
Robust M&A Landscape Prevails in Pharma Contract Services
Private Vaccines Market in India In the continuing consolidation boom in pharma contract services, Labcorp has acquired Chiltern at a deal value of $1.2 billion. Chiltern is a highly complementary addition to the company’s Covance Drug Development arm, accrued through a hefty deal back in 2015 and helps Labcorp strengthen its presence in emerging markets. With escalating global drug development costs, pharma companies increasingly see merit in early stage engagement and end-to-end solutions from contract service providers in order to fast-track time to markets. Such market need has seen contract service providers rapidly consolidate businesses to scale up resources as well as to cross-leverage customer relationships in different geographies. This deal marks the second development in CRO consolidation activity this year, post the strong merger of INC Research with inVentiv Health that created a CRO powerhouse with invincible scale.With outsourcing remaining a critical cornerstone in the pharma business to minimize market access time and maximize profits, we perceive such active M&A landscape to persist in the contract services segment as it continues to expand and consolidate globally.
Gilead Jumps on Oncology Bandwagon Post Anti-infectives Success
Home-Health Gilead Sciences has penned a whopping $11.9 billion deal to acquire Kite Pharma, a clinical stage oncology-focused biopharmaceutical company with an impressive cell therapy platform,. In line with the trend where big pharma continues to seek inorganic growth to break new grounds, this deal comes as a much anticicpated next move of Gilead post its Sovaldi blockbuster success in anti-infective therapy.Kite Pharma’s promising clinical portfolio with its Chimeric Antigen Receptor (CAR) T-Cell Therapy platformwell-complements Gilead’s focus on breakthrough therapies and also promptly places the company as contender in the popular big pharma pursuit for oncology success. With Kite Pharma’s lead candidate Axicabtagene Ciloleucel for non-Hodgkin lymphoma currently under priority review in the US and expedited review in the EU, Gilead gains a significant early-mover advantage in next-generation cell therapy realm.This marks the second deal this year depicting big pharma’s focus on futuristic medicines of cell and gene therapy, with Lonza’s acquisition of Pharmacell BV being the first. However, with the role model in anti-infectives jumping on the oncology bandwagon, it raises questions about level of investment & interest from larger pharma companies in oncology and rare diseases.
Celebration Month for USFDA Medical Device Approvals
Home-Health August has proven to be a victory month for medical devices, as Abbott and CR Bard bag big USFDA approvals for their LVAD and drug-coated balloon catheter devices respectively. Abbott’s Heartmate 3 system has taken left ventricular assist device (LVAD) therapy to a new level, by decreasing the device size for less invasive placement, and by using a novel full magnetic levitation technology that improves blood flow and minimizes distress to the blood passing through the device. On the other end, CR Bard’s LUTONIX®035, earlier approved for femoropopliteal occlusive disease, has scored approval for a new indication and becomes the first device to be approved for stenotic lesions in end stage renal disease patients. While the global medical device industry is making leaps in innovation, the question of access to innovation, pricing and reimbursemnts looms large in several markets including India. Will price-capping prevent already lagging India from riding this innovation wave in medical devices?
Funding Issues Prevail in the Under-appraised Anti-Infectives Market
Home-HealthUS based Amplyx Pharmaceuticals has secured Series C funding of $67 million for clinically advancing its lead anti-fungal small molecule candidate, APX001,for lethal fungal infections such as invasive aspergillosis and invasive candidiasis. The drug is a novel therapy that targets a fungal enzyme, has secured orphan designation from US FDA, and gone through successful Phase I trials. Amplyx’s fund-raise milestone comes as a welcome respite in the context of anti-infectives continuing to be a globally under-rated therapeutic area, where financing models remain primitive and funding appetite remains low. While few companies such as Gilead remain role models, market access and financing clinical advancements still remain a lofty target for ventures in anti-infectives, considering the difficulty in demonstrating a viable business case. In light of looming global burden from infectious diseases and the ever-expanding unmet healthcare needs in the area, it is quintessential to rethink funding mechanisms and find ways to incentivize innovation in this globally undeserved therapeutic category.


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GST Impact on different Healthcare Sectors

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Orthopedic Devices Market – At a Turning Point

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    2. Embracing Innovation, Driving Growth Across Healthcare Continuum – “Making in India”
    3. The Make in India Imperative – Position Paper on Regulatory and Policy Changes required for Sustained Competitiveness of the Indian Vaccine Industry
    4. Indian Orthopedic Devices Market A $2.4 Bn Opportunity
    5. Biosimilars – How can we realize the $ 240 Bn Opportunity

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