Pullan's Pieces #137                                     
Pullan's Pieces #137
May 2018
BD News and Analysis for  Biotech and Pharma
Dear --FNAME--,
It is time for BIO in Boston, but meantime we are busy with outreach and negotiations! 


 1. What does the future look like for pharma?

  2.   Patent expirations in 2018

  3.  ADCs at ASCO and in Phase 1

  4.  Trevor:   Fallout of IDO Failure

What does the future look like for pharma?
Xconomy had a great interview with Bob Nelson of Arch Ventures.  

"They should fire the first CEO—and the board—of a pharma that buys another pharma. Fire ‘em all, that day. March them out of the office. Because the innovation is not in pharma, with a few exceptions, it is in biotechs and universities. 
There’s so much interesting innovation [in those places] now, and so much incremental shit in the pharma pipeline. It’s just unbelievable how much cool stuff we’re seeing. It’s going to totally change the business.

If this early detection stuff, which we’re seeing in the data, works, and you’re an entire pharmaceutical and biotech industry that’s selling later-stage drugs, you should think about that one for a second. Because if there ain’t no later-stage disease, then how are you going to make any money? And if it’s early-stage disease, how are you going to treat it? What’s the business model look like? So pharmaceutical companies are going to have to become insurance companies. The insurance companies might become the pharmaceutical companies."

Bob's interview inspired me to have some fun thinking of transformative changes in our industry! 
  • Gene therapy, if it gets cheaper and more efficient, might make some current drug markets go away as patients are cured rather than treated chronically (displacing, for example, Roche's new hemophilia drug). 
  • Early detection of things like lung cancer and ovarian cancer might mean those short survival trials in stage III or IV patients are no more.  Trials in earlier stage patients are longer, bigger.  Safety matters more in less sick patients. 
  • Manufacturing biologics become cheaper to make with continuous perfusion and pods.  Maybe generics no longer have shortages because manufacturing aseptically becomes faster and cheaper. 
  • Modeling and AI, already making early compound screening easier and faster, makes more of development more efficient.  

What are your visions of what is coming? 
Patent expirations in 2018
Drugs with 2016 sales over $1B but facing patent expiration in 2018 include the world's biggest selling drug, Humira from Abbvie.  Just the list below is forecast to lose $24B in sales by 2024.  The biggest losses are for Roche's Avastin and Rituxan and Pfizer's Lyrica.  

    Interestingly some drugs, including Humira have bigger sales forecast for 2024 than 2016, despite patent expiration.   
These drugs average 17 years since approval, ranging from 9 to 30!   This long time for patent life after approval is presumably partly due the selection of big sellers.   

These big sellers with patent expiration in 2018 are heavy with asthma meds.  Cancer and HIV each account for 3 drugs.  Rheumatoid arthritis has 2 drugs on this list.  
ADCs at ASCO and in Phase 1
Evaluate Pharma did a lovely table of ADCs reporting data at the upcoming ASCO. http://www.evaluategroup.com/Universal/View.aspx?type=Story&id=789710&isEPVantage=yes 
What surprised me is how many of the ADCs are targeting Her2!  So I went back to look at the targets for ADCs in Phase 1.  

Surprisingly, Her2 is still the most popular target of the 58 ADC drugs in Phase 1 (GlobalData).   

But what really surprised me is that 11 of the ADCs are using radioisotopes as the payload.  Cytotoxic small molecules such as MMAE, DM4 etc are the most common payload but no single cytotoxic is as common as radioisotopes.  

Oncology, not surprisingly, dominates the therapeutic areas being pursued but there is 1 ADC for NASH (targeting DGAT2 and other enzymes), 1 for Rheumatoid arthritis (delivering a steroid), and 1 for staph infection (targeting staph). Cheers for innovation!      
Trevor:  The Fallout of a Failure

Incyte – down 23%

NewLink – down 42%

Hope for patients in IDO inhibitor trials – down incalculably

The headlines are bad.  NewLink Genetics/Genentech and now Incyte/Merck have failed in big Phase 3 cancer trials of IDO inhibitors combined with PD1 or PDL1 inhibitors.  BMS has an ongoing trial of its IDO inhibitor with its PD1 inhibitor.

We work in a highly competitive industry, where the term “first-in-class” can potentially mean years of market exclusivity.  Then comes the onslaught of “best-in-class” candidates, enabled by the learnings from the trail blazed in the development of the first-in-class.  In the biosimilars game or in the 505(b)(2) pathway, one company’s misfortune in clinical development is likely to have many participants ready and able to replace the loss in relatively short order.  It can be easy to get lost and think that this is a zero-sum game where any sale we don’t ultimately generate for ourselves goes directly to a competitor.

But out on the bleeding edge of innovation, where new hope is offered to patients through novel targets and mechanisms, failure is especially difficult for patients when the promise of a new class of drugs which might deliver cures for some and longer lives for others disintegrates seemingly overnight.  It is a stark reminder of our mutual need – that for patients it is important our closest competitors do well.  ). 

In the coming months, I hope to be able to find and share information on the sum total of investment that has gone into the IDO inhibitor space.  That’s a worthy story to be told as it demonstrates the tremendous risk our industry is willing to take in the face of failure.  In any case, it seems way too early to label the IDO pathway a failure as it’s hard to think that an industry as creative, perceptive and determined as ours won’t discover how the pathway can be utilized for clinical benefit.  Indeed, several companies are already in development of targets downstream from IDO/TDO and the biology will only continue to reveal itself over time and through these efforts.  (Picking the right target matters, Pullan’s Pieces #132  https://app.robly.com/archive?id=c3ea4306106909b4129acceb89d57b49&v=true). The overall effect might be positive on investment in the space as the idea undergoes a ‘recapitalization’ of sorts – premiums come out of deals, valuations drop to manageable levels and new science can emerge that builds on the foundation established over the last many years.

But for now, the 32 companies and 5 academic institutions who have had IDO/TDO inhibitor programs (according to GlobalData) are busy dusting themselves off and we offer our gratitude, support and encouragement.

But for now, the 32 companies and 5 academic institutions who have had IDO/TDO inhibitor programs (according to GlobalData) are busy dusting themselves off and we offer our gratitude, support and encouragement.
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