Looks like an exciting 2013 from the J.P. Morgan Healthcare Conference
The buzz at the J.P. Morgan Healthcare Conference in San Francisco this year was palpable at the Westin, emanating outward to the dozens of other hotels, restaurants, bars and outdoor venues where meetings between dealmakers, analysts, executives and many others were taking place. FierceMarkets sent a team of 9 to the conference this year, including 6 editors. Below find our impressions of the conference from the meetings we held. -- Jennifer Levin (email | Twitter) | John Carroll (email | Twitter) | Eric Palmer (email | Twitter) | Ryan McBride (email | Twitter) | Damian Garde (email | Twitter) | Mark Hollmer (email | Twitter)
FierceBiotech caught up with David Hung after the Bay Bio panel Monday morning, at which he touted reasons why the San Francisco Bay Area is particularly suited for life sciences growth. For example, Hung asserted that companies in the industry are broadening their approaches to treating disease, even looking at exploiting the properties of electricity and light to improve outcomes for patients. Here, there is an ingrained "high-tech" level of expertise ideally suited to this type of innovation. Hung also caught us up on the development of enzalutamide (Xtandi), approved last year by the FDA to treat late-stage prostate cancer. The company is now testing the drug for the prechemo market.
Acetylon Pharmaceuticals' strategy works due to both dedicated research and an extremely successful funding strategy. The company's CEO, Walter Ogier, told FierceBiotech that Acetylon's been fortunate in securing capital from what he calls "venture philanthropists"--wealthy individuals who want to invest in medicine. Acetylon is developing an HDAC inhibitor intended for use in patients with multiple myeloma and lymphoma. However, the compound could lead to other programs for neurodegenerative diseases, metabolic diseases, sickle cell disease and even malaria. Ogier is in San Francisco this week partly to look for potential partners to help advance the drug into later trials. Among those that would be well-suited are Takeda's Millennium, Celgene and Onyx Pharmaceuticals.
Philip Vickers, global head of R&D for Shire ($SHPG) Human Genetic Therapies, and group President Sylvie Gregoire touted the fact that their company is investing about 20% of its blockbuster rare-disease drugs business back into R&D. Hours later, Shire HGT announced its acquisition of the small biotech Lotus Tissue Repair for an undisclosed amount to gain a new therapy for a genetic skin disease. The deal went into the win category for Lotus investor Third Rock Ventures.
John McDonough, T2 Biosystems' president and CEO, came to this year's J.P. Morgan event to meet potential investors plus diagnostics companies that might want to selectively partner on new uses for T2's signature product--magnetic resonance imaging tech that can help speed up a diagnostic process by eliminating the need for cleaning up a sample for culturing. The 2012 Fierce 15 company will soon launch a clinical trial of a rapid diagnostic assay for Candida infections. But McDonough explained that T2's tech could also be used for various cancer diagnostics, or even to measure clotting time. McDonough, a 10-year veteran of the annual JPM conference, said attendees are showing "more optimism than I have seen in the last couple of years."
CEO Gonzague Issenmann says Stentys, a French stent company publicly traded in Europe, didn't come to JPM to raise money. (The maker of a self-apposing bare-metal stent to treat severe heart attacks just raised $45 million in the Euronext exchange.) Stentys' stent is also unique, designed in a way that negates the need for different sizes. Backed by a 2010 CE marking, Stentys just gained FDA approval to launch a pivotal U.S. trial beginning in April involving 880 patients. And so Issenmann's mission was to promote his young company as an innovative alternative to many of the larger players in the global stent industry. "We can play our own sheet of music because we have something no one else has," Issenmann told us.
Drugmakers face an uphill battle with payers for some meds. Dr. Deborah Dunsire, CEO of Millennium Pharmaceuticals, is taking seriously issues related to reimbursement on new drugs. "The thing that is foremost on my mind is that this industry has to get really serious about economic benefit to the system as well as innovation," Dunsire says. "We haven't really grasped and bitten on that yet. I think we've got really smart people in the industry who can make that happen."
Cempra ($CEMP) managed to break onto the public market with an IPO in February, with a pipeline of next-generation antibiotics that addresses the growing threat of resistance to existing antibacterial drugs. Prabhavathi Fernandes, Cempra's president and CEO, says she's optimistic about biotech IPOs this year. "I think the quality may be better this year," Fernandes said. "Last year, a lot of companies went public because they didn't have other funding options." Cempra excluded, of course.
Just a few days before JPM, Crescendo Bioscience pulled in $28 million in Series D financing to boost commercialization efforts for its new rheumatoid arthritis molecular diagnostic test--on the market since 2010. And so William Hagstrom, Crescendo's president and CEO, was there, in part, to get the word out about his company's signature diagnostic and autoimmune diseases in general. As well, he focused on expanding partnerships with pharmaceutical companies that could use the diagnostic for other indications. Also on the table: Expanded strategic relationships with payers that cover treatments for RA and other autoimmune diseases, many of which are hard to bring under control. "These are diseases where the degree of disease control is limited," he said, making better diagnostics crucial.
Clinigen pulled something off last year that no other U.K. pharma company has done in the last 5 years, a successful IPO, raising about £135 million ($217.7 million). Clinigen sources comparative meds for clinical trials, braves the regulations of 53 markets worldwide to sell unlicensed drugs, and also sells Foscavir, an anti-viral medication initially approved for HIV patients that is now prescribed 99% of the time for use in bone marrow transplantation. But it has been successful. In the two years leading up to the IPO, the company moved its revenue from about £22 million at 8% EBITDA to £82 million with 22% EBITDA. The company doesn't sell a lot of unlicensed drugs in each market but has developed the country-specific knowledge to pull that off, and Clinigen Group CEO Peter George says, "That is pretty good intellectual property to have. There are not going to be many competitors."
Avaxia Biologics, developer of orally administered, gut-targeted GI therapeutics, has in the last few months received IND clearance for its lead program, AVX-470, and closed a $6.4 million Series B round. The company's strategy and pipeline have been interesting to investors, CEO Barbara Fox told us, in part because the most effective drugs to treat GI diseases such as inflammatory bowel disease cause systemic immunosuppression over time. AVX-470 has the potential to be safer, as it's delivered right to the gut. The company is poised to begin its first clinical program, a 28-day dosing study.
Bahija Jallal figures China will soon be the world's largest market for pharmaceuticals, but navigating the country's fractured regional markets, byzantine regulatory processes and logistical roadblocks are a tall order for any multinational drugmaker. That's why her company, MedImmune, chose to partner with WuXi PharmaTech to develop biologics for the Chinese market, she said, leveraging parent company AstraZeneca's ($AZN) presence in the country to fast-track new therapies. In China, local expertise is priceless, Jallal said, and if the WuXi joint venture is a success, MedImmune will expand its efforts and market China-developed treatments across Asia.
Suzanne Bruhn joined Promedior in May and immediately moved from the Philadelphia area to Boston. Bruhn spent 13 years with Shire and served as the senior VP for strategic planning and program management before moving into her first CEO role at Promedior, which is focused on a pipeline of drugs for fibrosis. Fibrosis is a part of many diseases, including potential blockbuster areas such as lung fibrosis, but Promedior is currently focused on the rare fibrotic conditions myelofibrosis and idiopathic pulmonary fibrosis (IPF). The area of orphan diseases, Bruhn told us, speaks to her personally. "Making something incrementally better than the two drugs before it doesn't interest me," she said.
Protagonist Therapeutics has been focused in recent years on building up its ranks of partners for its unique platform for discovering peptide drugs, says CEO Dinesh Patel. He's succeeded in landing such deals with Ironwood Pharmaceuticals ($IRWD) in 2011 and extended in December and Zealand Pharma last year. The Menlo Park, CA-based biotech is thinking about building out its own pipeline, which has Patel out talking to investors about a Series B round. The company would like to focus on oral peptide drugs for irritable bowel disease as an internal program.
Biotech startups don't get far without doing something that's never been done before. For NovaDigm Therapeutics, the big first in the company's pipeline is a vaccine that could spur immunity against infections from both fungal Candida and bacterial Staphylococcus aureus, including the MRSA superbug. Tim Cooke, the company's CEO, is gearing up for a Phase II study in patients with vaginal Candida infections. Domain Associates has been its only venture investor to date and contributed $10 million, but Cooke is out talking to additional VCs this week about raising more money to bankroll development of an earlier-stage vaccine candidate. It's a good David vs. Goliath story, because some of its chief competitors include Pfizer ($PFE), GlaxoSmithKline ($GSK) and Novartis ($NVS).
Pharma giants might be disappointed if they treat an emerging market like a satellite U.S. territory with big growth prospects. Says Dr. Tachi Yamada, chief medical and scientific officer of Takeda Pharmaceutical: "In emerging markets there are issues that we must comprehend better in order to succeed. We can't just treat emerging markets like the U.S., the U.K. or Japan. We have to be part of the solution to their very pressing health problems as well as launching new innovative products in those countries. Because if we're not, we're not going to be around to sell our products. That's exactly what is happening in India."
Sucampo's lead drug, Amitza, was approved by the FDA for chronic idiopathic constipation in 2006 and irritable bowel syndrome and constipation in 2008. It has been prescribed to 6 million patients. Still the company flies under the radar for many analysts. This may be a breakout year for the Bethesda, MD, company, which has gotten approvals in Japan and the U.K. and is looking for a new indication in the U.S. While 2013 may be a challenge for the industry in general, Sucampo Pharma Americas President Stan Miele says, "All organizations are looking for novel ways to market, but in the end, if you have a product with a novel mechanism and are serving patients with unmet medical needs, there is always a place for a product to be successful."
Michael Whitman, president and CEO of Micro Interventional Devices, came to JPM celebrating major progress for his company, which makes minimally invasive surgical devices designed to help surgeons access the heart's left ventricle during transcatheter aortic valve replacement procedures (TAVR). Toward the end of the conference, the Pennsylvania startup launched in late 2010 announced that it had raised $3.5 million of an expected $5 million Series B round, with the rest expected to close within 90 days. The money will help the company continue a CE mark study, with expectations of a CE mark submission by the 2013 fourth quarter. In the U.S., meanwhile, early discussions are under way with potential CROs to handle domestic research and development work.
One of the topics of discussion at the healthcare conference this year has been the growing influence of payers on drug prices. Affymax ($AFFY) CEO John Orwin came to this year's conference with some experience that provides some insight. The company's anemia drug Omontys is the first and only once-monthly ESA medication available in the U.S. used for patients on dialysis. The government is now paying a fixed price for dialysis, and providers have to manage all aspects of that to make money, like the price they pay for drugs. He likes his company's position in this situation because Omontys is a once-a-month drug and provides the first competition to Amgen's ($AMGN) Epogen, which requires multiple doses. "I can't say what other therapeutic areas the government is looking at," he says, "but I think dialysis may be at the forefront of the new paradigm."
Byron Hewett, chairman and CEO of BioBDx, came to San Francisco this year to network with potential investors at JPM, with hopes to close a new $9 million funding round by the end of March. But there were also plenty of meetings with possible strategic partners that could help expand the reach of the company's diagnostic tool for attention deficit hyperactivity disorder, or ADHD. The 15-minute computer-based test gained 510(k) clearance in 2004, but BioBDx hopes to add a CE marking to its approvals by the end of January. That means the company plans to expand in Europe through 2013, and the extra funding will enable that to happen.
Michael Garufi, the Italian-born head of France's Nicox, came to JPM, in part, to broaden the company's ophthalmic diagnostic opportunities in the United States. The company, which also develops ophthalmic drugs, licenses and sells AdenoPlus, a diagnostic kit similar to a pregnancy test that swabs the eye to test for adenoviruses, which can cause a form of conjunctivitis that is highly contagious and does not respond to antibiotics. Garufi said he was on the lookout for outright acquisitions or licensing opportunities to broaden the company's portfolio. "There is some [opportunity] for new companies in the ophthalmic space for diagnostics, and we are trying to fill some of this space," he told FierceMedicalDevices of Nicox, a 40-employee company that is publicly traded in Europe.
Jonathan Allis, head of GE Healthcare's positron emission tomography business, sees the relationships between pharmaceuticals, diagnostics and therapeutics becoming ever closer. So the JPM experience for him amounted to this: "Talking to pharmaceutical companies from morning to night." GE has increasingly been talking to Big Pharma anyway regarding flutemetamol, the company's Alzheimer's imaging agent that regulators in the U.S. and Europe just accepted for review. But at JPM, Allis said, the conversations have become even more robust between the drug and diagnostics side of things. "We are seeing most pharmaceutical companies understanding that diagnostics are going to be much more important to them," he said.
Big Pharma first grew enamored with China for its arbitrage opportunities: Cheap labor, abundant resources and manageable regulations. Now, however, the country is churning out Ph.D.s faster than the U.S., and its incoming government wants to transform China into a knowledge-based economy. Peter Mueller, Vertex's executive vice president for R&D, said we're on the verge of a golden age in Chinese pharma innovation, and his company has gone from looking to the country for manufacturing to partnering with its universities, contractors and drugmakers to better develop treatments suited to its unique and diverse population.
Rib-X Pharmaceuticals is entering 2013 with a strong pipeline, a successful funding strategy, and a semivirtual model. President and CEO Mark Leuchtenberger is very optimistic about the company's antibiotics pipeline for several reasons. The GAIN act, signed into law in July, gives 10-year exclusivity to antibiotics, and Rib-X has the potential to deliver front-line, broad, potent treatments to the U.S. hospital market. The areas of unmet need here have been realized and "the environment has turned from complacency to aggression." And, Leuchtenberger said, antibiotics offer the same opportunity for aggressive pricing as rare-disease drugs. This year looks to be a "perfect storm of positive things" for the company.
Harald Stock, CEO of Grünenthal, a specialist in tamper-resistant pain drugs, sees the industry in 2013 through a prism that he believes falls out of the mainstream. First, he says, "I think Europe is still a great market and you can do good business there." Secondly, he dismisses skepticism around R&D. "Our reason to be in business is to innovate." He says perseverance and innovative products can succeed, even in difficult markets. The company invested 27% of its budget on R&D last year and even though it will lose the patent on its biggest brand this year, it will not see a sales decline. About half of the company's revenue comes from partnerships, like its relationship with Endo, and Stock was at J.P. Morgan looking to find some new ones, particularly in the U.S.
FierceBiotech met with three of the executives--John Knopf, founder and CEO, Tracey Murphy, senior director of corporate development, and Steven Ertel, the chief business officer--behind Acceleron's business strategy. The company targets epo-resistant anemias and does so through trials with a straightforward endpoint: counting red blood cells. There is a huge unmet need for anemic patients. Currently the only approved treatment is transfusions, which eventually leads to iron overload, which can be fatal. This is the first new treatment for anemia in 40 years, and the market potential is huge. Knopf told us that Acceleron is focused this year on more partnerships and collaborations--it already is partnered with Celgene, Shire (it is excited for the long-term potential of a program for DMD) and Alkermes--as it is solidly funded and has several promising products in its pipeline.
Robert Forrester, the COO of Verastem, was extremely optimistic and encouraged when speaking to FierceBiotech on Tuesday in the Four Seasons hotel. He told us to expect a huge year from the company, which develops small-molecule drugs to kill cancer stem cells. One of its lead programs is an FAK inhibitor to combat mesothelioma, a rare cancer caused by exposure to asbestos--the compound is entering a pivotal trial midyear. The trial will stratify patients based on Merlin status--a critical biomarker--and has an adaptive enrichment design. Forrester also advocated a prominent trend that emerged in many meetings during our time in SF--maintaining small in-office staffs (and in Verastem's case, Forrester assured us, a small office) and using the money available for drug development. The model "speaks to the mentality of our company," he said, "which is all about the science.
Jeff Raser has been on the frontlines of biotech innovation for years and is now involved on the ground floor of two new projects. He came to J.P. Morgan this year to meet with investors and develop strategy. Katama Pharmaceuticals, which Raser founded late last summer, will develop the compound tolperisone to deliver pain and muscle relief to patients suffering from muscular spasms. Raser was attracted to the drug in part because of the low-risk pathway. There is existing data on the drug, so the regulatory hurdles should be few, and Raser ultimately expects the drug to fit nicely into a number of pharma companies' pain drug franchises. Raser is also working as the COO of OrPro Therapeutics, which has an orphan drug in development for cystic fibrosis--which offers another potentially simplified approval process. Raser is confident the compound could treat other diseases, he told FierceBiotech.
Venture capital funding in the medical device world hasn't exactly been soaring since the 2008 downturn, but the crash and the tepid VC climate that ensued have taught startups a valuable lesson, Tryton Medical CEO Shawn McCarthy said: It's just as important to establish economic viability as clinical effectiveness. McCarthy's company closed a $24 million fundraising round this week, money that will take its novel stent all the way through the FDA process, he said. To woo investors, Tryton established the broad unmet need for the device, McCarthy said, because "all of the stakeholders need to see a benefit--patients, doctors, hospitals and, of course, payers."
Richard Pops was fired up during our lunch with him during the J.P. Morgan Healthcare Conference. Alkermes ($ALKS) has potential blockbuster psychiatric drugs in its pipeline, led by the Ireland-based company's long-acting version of Abilify, ALKS-9070, in late-stage development. Imagine an Alkermes where the handsome income stream from Johnson & Johnson's ($JNJ) Risperdal Consta seems quaint? Referencing his bigger Boston-area neighbors, Pops said: "We're going to build a Biogen or a Vertex."
FierceBiotech Editor-in-Chief John Carroll met with Steve Tregay, CEO of Forma Therapeutics, while in San Francisco.
James Sabry, the dealmaker for Genentech, was in town for partnering talks.
Adelene Perkins, CEO of Infinity Pharmaceuticals, was in San Francisco discussing the biotech's clinical development plans for PI3K inhibitors, which include IPI-145 and IPI-443, after a trial setback forced a restructuring last year.
"I think rumors of our death were highly overexaggerated," John Maraganore, CEO of Alnylam Pharmaceuticals, said this week during a meeting with us. But back in 2010, the future seemed grim for RNA interference and Alnylam ($ALNY). Swiss drug giant Roche ($RHHBY) pulled the plug on research in the field. Alnylam and other developers hadn't lived up to the hype about the gene-silencing drugs, which face delivery challenges to reach disease targets deep in the body. Yet in the last 12 months, the Cambridge, MA-based biotech's stock price has jumped 130%, and the company showed that its technology could produce potential medicines such as its lead candidate for familial amyloidotic polyneuropathy, ALN-TTR02, which could be in Phase III development later this year.
There's been quite a bit of consolidation in the CRO world over the past few years, and North Carolina's Clinipace is no stranger to M&A, expanding its capabilities with four acquisitions since 2009. That's a response to the market, CEO Jeff Williams said, as small CROs are having a harder time competing and sponsors are demanding diverse abilities from their contractors. That said, Clinipace's dealmaking has put it in a position to reach out to midmarket biotechs and offer both broader options than niche CROs and far more attention than inchoate companies get from the big names in outsourcing, said Chris Porter, president and general counsel. Now that funding is a little easier to come by than in years past, it's an exciting time to be in the midmarket segment, Williams said.
Jean-Jacques Bienaime, CEO of BioMarin, was in San Francisco to talk about the company's rare-disease strategy.
Jeff Jonas, president of Shire's ($SHPG) regenerative medicine division, said he's "optimistic, hopeful and enthusiastic" about prospects for the life sciences industry this year, and particularly his own business unit, which Shire created in 2011 after acquiring Advanced BioHealing. Part of that optimism stems from a focus on expanding the indications for Dermagraft--a skin substitute that obtained PMA from the FDA in 2001 to treat diabetic foot ulcers. Shire now wants to use Dermagraft to treat epidermolysis bullosa, a rare disease/skin defect where skin can become weak and fall off, leaving gaping wounds that require treatment. Shire just initiated a Phase III trial for this orphan disease indication in both the U.S. and Europe. Beyond Dermagraft, Jonas said Shire Regenerative Medicine "will be looking for early and late-stage opportunities beyond cell-based therapies" that aren't necessarily stem cell focused.
Warp Drive Bio CEO Alexis Borisy, left, and GlaxoSmithKline Senior Vice President Lon Cardon discuss how Big Data can be used to generate hypotheses in drug discovery.
Executive Editor Ryan McBride hosted a Big Data Biopharma Forum on Wednesday morning at the Hotel Nikko. The panel of drug-development luminaries was comprised of GlaxoSmithKline ($GSK) Senior Vice President Lon Cardon, Warp Drive Bio CEO Alexis Borisy, AstraZeneca ($AZN) R&D Information Vice President John Reynders and New Enterprise Associates General Partner Dave Mott.