#BIO2017: A Peek at Partnering | SPARK

Breaking Buzz is BIO’s newest blog series that reaches across the globe to bring you an insider’s preview into the hottest international and partnering trends coming to San Diego for the BIO International Convention.

Perfecting Translation

Stanford’s translational research program, SPARK, is only 11 years old yet already has funded and supported 148 past and current projects, helped launch 24 start-ups and has had over 30 patents licensed. Spark lays claim to a 62% success rate; measured when a project enters into human clinical trials, or is licensed to a start-up or existing company.

With those kind of stats it’s no wonder Mahima Agochiya, Business Development and Program Manager for SPARK was besieged with meeting requests at last year’s BIO International Convention within BIO’s One-on-One Partnering™ system.

SPARK’s remarkable program – a partnership between Stanford and volunteers from the biotechnology, pharmaceutical, and healthcare investment industries – offers support to an average of 12-15 new projects each year.

Mahima Agochiya PhD, MBA
Business Development and Program Manager
SPARK Translational Research Program at Stanford University School of Medicine

Breaking Buzz sat down with Mahima to chat about the 69 meetings she and her colleagues attended in three days during the BIO International Convention in San Francisco, and asked about her strategy for partnering success.

We know SPARK is a Translational Medicine Program based out of Stanford School of Medicine that seeks partnerships with industry to help translate its projects, and is entering into its second year attending BIO. What kind of partner are you looking for this year?

SPARK is agnostic to indication so we are not limited to specific areas of therapeutics. We generally look for companies that are interested in early stage start-up funding or licensing; or both. The assets/ projects that we are looking to partner with this year are novel, address an unmet clinical need, and are at a stage where they ready for the next step.

There are thousands of companies in the BIO’s One-on-One ™ system representing tens of thousands of assets. How did you narrow it down to 69 meetings?

The first thing I do is add filters. We are mostly interested in companies that license at early-stage since our projects are preclinical at the most, so my go-to filters are “licensing” and “early-stage” for example. I then send out a lot of meeting requests. Perhaps it was because last year was only the first year that SPARK attended BIO, and my first year too, but I was very surprised by the number of invitations we got from other companies. It helps a lot to belong to a university that has a great reputation scientifically and I think people were curious about us, given our success rate.

Can you tell us about that success rate?

SPARK has a 62% success rate on all projects we take in. So far we’ve spun out 24 start-ups; eight licenses to biopharma; four tech transfers without license, and 31 clinical trials – 10 without license. To date we have provided education, mentorship and funding to 148 projects and hundreds of students.

Last year SPARK had 35 projects (assets) that you presented during partnering meetings at the Convention. Did any of those materialize into a licensing opportunity?

Yes! Last year resulted in at least one successful partnership that I will be able to talk about at the Convention this June, and we have ongoing negotiations with other companies we met, most of whom we’ll meet with again in San Diego. BIO provides a great opportunity to get to know new companies and share experiences with them. I think it might be hard to walk away with nothing.

What’s your advice to people new to the Partnering system?

Don’t have a script ready. Instead, open with a clear and concise statement saying exactly what you’re looking for. A half-hour isn’t long enough to delve into details, but rather to quickly ascertain if there is a viable partnering opportunity; so keep the conversation direct at opening, then very flexible. Also, provide all of your materials on a USB. SPARK’s assets are detailed, each on a single page, in one file given on a single USB drive.

Besides partnering meetings, what else is on your Convention calendar?

On Monday from 11:30 – 4:30, SPARK will team up with partners from Massachusetts, Quebec, Philadelphia, San Francisco Bay Area, Oslo, UK Golden Triangle, Catalonia, and the Paris Region to present cutting edge innovations in oncology at the 6th International Cancer Cluster Showcase. Each cluster will present their oncology pipelines in compact 20-minute presentations, so it’s the perfect opportunity to learn about the latest innovations and a great precursor for partnering meetings on Tuesday, Wednesday, and Thursday.

Why did you get an MBA eight years after getting a PhD in cancer research?

The two degrees are actually a perfect combination. After finishing my PhD I did about eight years of basic science which was very rewarding, but also a little heartbreaking because I never saw the work translated. That’s what made me do the MBA – now I get to see all the cool science and get to see them translate – at Stanford University no less. How perfect is that?

California’s Transparency Bill Misses the Mark

Under a pending bill in California, drug companies would be required to disclose confidential and sensitive business records and detailed data about drug development costs. This bill represents a degree of government intrusion into a free market industry that is without precedent.

Senate Bill 17 purports to address the legitimate concerns of many Californians about the affordability of prescription drugs, but in truth does nothing to tackle that problem. Instead, it creates a new one – a public policy environment hostile to drug investment.

The failing of this bill is that it does not recognize the well-established fact that profits from a handful of approved drugs must subsidize thousands of research failures. Ninety percent of all new drugs in development do not gain government approval. That is to say, the investment of time and money into a particular drug almost always comes to a dead end. Today, more than 70% of clinical trials are being conducted by small companies. Most of these cases do not have a product on the market and rely on investment to fund their research.

Proponents of this bill falsely claims that drug companies spend more on marketing than on R&D. These cherry-picked claims have been discredited. As whole, the pharmaceutical industry spent more on R&D than on all combined promotional marketing activities. It’s also an overlooked fact that this industry has the highest rate of R&D reinvestment of any sector, at 21.3%.

The biopharmaceutical industry welcomes an honest dialogue about the true costs of health care. Unfortunately, SB 17 causes more problems than it solves. Its passage would mean less innovation, less economic growth and less investment in our world-leading bioscience sector. It’s just bad medicine.

#BIO2017: A Peek at Partnering | UC Berkeley

Breaking Buzz is BIO’s newest blog series that reaches across the globe to bring you an insider’s preview into the hottest international and partnering trends coming to San Diego for the BIO International Convention.

A Day in the Life of a Partnering Powerhouse

UC Berkeley has had a whopping 600+ products commercialized from its research since it started counting in the 1980s. Its success stories range from mega blockbusters like CRISPR/CAS 9 to some of the early research and development of iplimumab. No matter how large or small, each of the hundreds of products is worthy of fulfilling the Berkeley School of Public Health’s mission: to improve population health, especially for the most vulnerable.

One big obstacle, however, is that as a non-profit, Berkeley is unable to commercialize the cool technologies being developed on campus, so they have to look at things differently than many of their research and development counterparts. Top of the list: they must find industry partners to license their IP. This takes time, instinctive focus and without a doubt, stamina.

Akash Bakshi, Berkeley’s resident IP and industry research authority, knows all about trusting his instincts and building stamina. He singularly held 59 BIO One-on-One Partnering™ meetings last year at the BIO International Convention in San Francisco; with a remarkable 75% follow-up return – an accomplishment he says required first and foremost, persistence.

Breaking Buzz talks with the persistent partnering Phenom in a recent interview:

AKASH:  Be persistent because companies are busy. Don’t leave it to them to sort though and find your invitation. If you haven’t heard back and your gut tells you there’s a good reason to connect, persist!

BB: There are thousands of companies within the partnering system. How do you know who to pursue?

AKASH: I look for companies that overlap with our research strengths – whether in biomedical engineering, immunology, or molecular and cellular biology, companies who seek new insight in the life sciences. Those are the ones that always make great partners!

BB: Can you tell us more about what happened after the 59 meetings in San Francisco last year?

AKASH: Almost 75% of the meetings we set up last year resulted in further discussions about UC Berkeley’s Innovation Ecosystem, IP licensing, and even employment for our students. I attribute the high return rate on Berkeley’s breadth and research strengths. People understand we are a powerhouse for early-stage R&D. Industry knows we have the intellectual capital to do amazing stuff.

BB: How do you characterize a successful Partnering experience?

AKASH: Some folks might assess their success at BIO as the number of transactions that were completed; our view is that this is more about relationships. Success comes anytime we can collaborate to improve or validate early-stage findings and licensing IP; when we get feedback on potential technologies, investments and funding for our startups, and the hiring of our graduates.

The other side of the story is that we get good insight from industry about why they were NOT currently interested in the ideas we presented – it might be because regulatory hurdles are too high, or the project is too small. Regardless, it’s allowed me to give feedback to the faculty member to rethink the original applications.

BB: Who is on your radar as we approach the BIO International Convention in San Diego?

AKASH:  There are updates that I’m eager to share with some of the people I met with last year in San Francisco. But I’m just as excited about finding new partners this June in San Diego; companies that share our quest for innovation in the life sciences.

BB: Sounds like you’ll have another very busy BIO experience. How do you do it?

AKASH: This year there will be two of us, so my record of 59 meetings will hopefully double. But ultimately, I focus on the satisfaction I get from finding and developing ongoing relationships within an industry I love.

Well that, and a steady stream of Venti Caffe Lattes!


FDA allows 23andMe to reintroduce 10 genetic health risk reports for Parkinson’s, Alzheimer’s, and more

Some 3 1/2 years after having its hand slapped, 23andMe has received a green light from the FDA to market 10 direct-to-consumer genetic health risk reports for conditions such as Parkinson’s, late-onset Alzheimer’s, and celiac disease.

U of Miami Health System, Syapse join forces for cancer care

Precision medicine.

The phrase doesn’t fall on unfamiliar ears in the healthcare world. But now it’s getting an extra bit of attention with the launch of a new partnership.

Sylvester Comprehensive Cancer Center, which is part of the University of Miami Health System, and Syapse, a Palo Alto, California-based software company, have teamed up to create a precision medicine initiative specifically focused on cancer care.


Physicians at Sylvester will be able to use Syapse’s platform to give patients more personalized care based on their clinical and molecular information.

“We bring all the data together for the physicians so they can understand what’s going on with the patient,” Jonathan Hirsch, president and founder of Syapse, told MedCity in a phone interview. “We have a decision support framework and a quality improvement framework so we can track the patient’s outcomes.”

With all the buzz surrounding precision medicine, now seemed like a better time than ever to launch the partnership.

Dr. Jonathan Trent, associate director of clinical research at Sylvester and professor of medicine at the University of Miami Miller School of Medicine, expressed a similar sentiment. “Matching a cancer patient with a certain treatment based on the cancer’s molecular profile is among the most promising treatment options in this age of personalized medicine,” he said in a statement.

Hirsch also pointed to a number of trends that are impacting the growth of precision medicine. For one, today’s science and medicine and advanced enough to target treatment more specifically.

Additionally, although the physicians are recognizing the effectiveness of precision medicine technology, they don’t always have the correct training to use it.

Patients are also taking note of precision medicine. “Patients are becoming increasingly aware, especially in cancer, of the different options that are out there,” Hirsch said. “They’re becoming very educated and are going to shop for care.”

A final cause of the momentum stems from a value-based care perspective. “A lot of health systems are looking to gain control over the most complex specialty areas,” Hirsch said. “They’re getting more sophisticated about care that necessitates a precision medicine approach.”

Moving forward, Hirsch said the partnership success will be based on cost containment, patients living longer with a higher quality of life and ensuring all patients are receiving the same level of care regardless of their location.

In early 2016, Syapse raised $25 million in Series C funding. It has partnerships with other organizations such as Intermountain Healthcare and Cancer Treatment Centers of America.

Photo: mathisworks via Getty Images

With $25M fundraise, Amino launches price transparency services for employers, providers

About 16 months ago, Amino became the first for-profit company to gain access to the Centers for Medicare and Medicaid Services‘ vast database of Medicare claims. Now it’s not only expanding its price transparency services to self-insured employers and healthcare providers but also giving these groups access to this data.

The company raised a $25 million Series C round to support the launch of Amino Plus for EmployersAmino for Providers, and make its data platform available, according to a blog post about the fundraise. The physician search and appointment booking service allows consumers to search for physicians and gain information on prices based on individual conditions, service needs, health insurance coverage and personal preferences. One goal is to help hospitals improve their consumer/patient experience, particularly to find physicians in their network and make more informed decisions about their care. Another is to help self-insured employers reduce their healthcare costs.

Highland Capital Management led the round. Other investors that took included Accel, Aspect Ventures, Charles River Ventures, Northwestern Mutual Future Ventures, and Pilot Wall Group, among others.

“This phase of financing is about building the full ecosystem around Amino,” said David Vivero, Amino CEO, in a phone interview. “Through these services. we can make sure users get access to realtime deductibles, view their plan designs and [contact details].”

Vivero and his team have taken a number of steps to try to set Amino’s approach apart from other companies. Aside from the Medicare database access, it doesn’t allow physicians to pay for exclusion. Users can see whether a doctor’s rate for a given procedure is higher than, lower than, or similar to other doctors nearby. The search engine uses statistical adjustments to account for differences in the types of people doctors treat, so a doctor with healthy patients isn’t unfairly compared to a doctor who treats sicker patients. Last year, it became a Medicare consensus-based entity, a status that means Amino gets support from CMS to create healthcare quality measures that become available to other groups with the same status.

“This is a very big next step for us,” Vivero said. “In the history of American healthcare, everyone has had their own facts and that’s left consumers with conflicting data.”

Photo: Hong Li, Getty Images

All things new: Gritstone Oncology unveils its cancer vaccine roadmap at AACR

Gritstone Oncology splashed onto the scene in late-2015, with a $102 million Series A that hinted at some lofty goals for cancer immunotherapy.

Some 18-months later, the team is presenting the first of its data in a poster session at the American Association for Cancer Research (AACR) annual meeting, which kicked off in Washington, D.C., on Saturday.

It’s the company’s first big reveal. So what have they got?

Enough to shoot for an IND filing and human trials in the middle of next year, said Cofounder, President, and CEO Andrew Allen.

The poster outlines three concepts, each with supporting data. Combined, Allen said they close the loop on what the company is trying to achieve: A model for predicting tumor-specific neoantigens that can be used to trigger a robust T-cell immunotherapy response. The initial target is lung cancer.

What does that all mean?

Like Neon Therapeutics and The Parker Institute for Cancer Immunotherapy, Gritstone is targeting neoantigens. These are mutations that arise “de novo” in a given cancer — they’re not otherwise found in the human genome.

As an immunotherapy target, they offer two major benefits: They’re foreign to the immune system and they’re not found in healthy tissue.

By comparison, traditional lung cancer targets such as ALK or EGFR have been present in the body since early development. They may be overexpressed in cancer cells, but the immune system has over time learned to tolerate them as “self.” That’s not a good platform for triggering a T-cell attack. Conversely, if the immune system was activated against those receptors, some healthy tissue would be hit.

Neoantigens are next-level personalized medicine, with next-level logistical challenges.

Predicting cancer neoantigens

Given the recurrent failures in cancer vaccine development, Gritstone is taking a two-pronged approach that verifies that specific neoantigens are truly being expressed on cancer cells.

“For success here, you’ve got to do two things well,” Allen said. “You’ve got to predict neoantigens well because that’s a big part of the problem. And then you’ve got to deliver them in a way that is going to drive large numbers of highly active T-cells.”

The first half of the puzzle is being pieced together by a team of around twenty, working in a facility in Cambridge, Massachusetts. The resulting data also make up the first findings in Gritstone’s AACR poster. The company asked whether the predictive modeling can be out-sourced.

Lung cancer has a high mutational burden, Allen explained — there are on average around 300 genomic changes. Of those, only around 1 percent will be truly novel neoantigens. It’s a drop in the ocean that is easily missed when a generalized approach to tumor profiling is deployed. Third-party labs that look for standard receptor targets typically omit between 20-25 percent of the mutations, Allen said. In some patients, 50-60 percent of the mutations are lost. Scientists need better data to build a cancer vaccine that works.

Zooming in on lung cancer, the Cambridge crew have extensively characterized hundreds of real tumor samples using DNA and RNA sequencing, mass spectrometry and deep learning.

Deep learning fast-tracks the process and removes the limitations of current thinking, Allen explained. It’s pure mathematics: it doesn’t apply the researcher’s biases and hypothesis and it’s not limited by our imagination.

“You’re saying, let me look for associations in a completely unconstrained way,” he said.

Those associations are then iteratively tested, to be rejected or strengthened. It eventually leads to a model that can predict from the sequence alone, which of those mutations will create peptides or antigens that will be presented on the tumor cell surface.

Andrew Allen, cofounder, president and CEO of Gritstone Oncology

Andrew Allen, cofounder, president and CEO of Gritstone Oncology

“Our estimate, when we test ourselves on fresh data, is that we’re operating at something like ten-fold better than the public domain approach that many of our competitors are using,” Allen said.

Therein lies the second segment of findings in the AACR poster, which asked if Gritstone’s in-house approach is effective. It seems it is. In the future, its scientists can sequence fresh tumor biopsies to accurately predict what mutated peptides could be targeted.

Rallying the immune response

The second challenge with cancer vaccines is learning how to weaponize the neoantigens to ensure the immune response doesn’t fall flat.

“Our model doesn’t necessarily predict antigens, it predicts whether a peptide will be presented by an HLA class 1 molecule on the cell surface,” Allen noted. “To be an antigen, you also have to stimulate a T-cell response.”

A West Coast team of around 30 is working on this problem in Gritstone’s headquarters in Emeryville, California.

Lessons on how to make a successful cancer vaccine, Allen said, could not be found in the cancer vaccine field. Not a lot has worked. Instead, Gritstone looked to the field of infectious diseases. Certain viruses, such as Malaria, are able to bury themselves deep within cells, he said. That necessitates a robust CD8 T-cell response — the kind Gritstone is hoping to produce.

“What was striking to us was that so many people were using viruses as a vector for delivering the antigens, in order to get these really effective T-cell responses. And so that’s the path that we’ve pursued,” he explained. 

It led to the third component of the poster. The company took the isolated peptides and some HLA-matched T-cells and asked; can they prime a T-cell response to a given neoantigen in vitro. Can they show that it does register an immune response?

They could.

“So that’s really closing the loop and obviously suggesting that, were this to be a patient that we were predicting and making a vaccine,” Allen said. “We have identified an antigen that should in principle be able to make good T-cells in response to the vaccine that may have the potential to kill the tumor.”

The company can connect a DNA mutation to an altered protein and show that it is processed and presented as an altered peptide. Gritstone may be the first to connect those dots in lung cancer, he said.

An eventual vaccine would be given in combination with an immune modulator, such as a PD-1 inhibitor , setting the immune system up for an optimal anti-tumor response.

It’s all theory for now, but Gritstone’s integrated use of deep learning and bioinformatics is broadening the basic theories the human mind can generate.

Photo: Esben_H, Getty Images

New Bos Sci acquisition raises question: Will the Lotus (valve) ever blossom?

Boston Scientific has long expected to be the third wheel to Medtronic and Edwards Lifesciences in the U.S. transcatheter aortic valve replacement (TAVR) marketplace.

It has sung the praises of it Lotus TAVR valve but the product line stands pulled from Europe because of device malfunctions. and has suffered delays in its regulatory pathway in the U.S. And now, while senior management of the company argue that Lotus valve’s introduction in the U.S. is still on track for mid 2018, a transaction announced last week may allow the company to introduce a wholly different TAVR device to the marketplace.

On Thursday, Marlborough, Massachusetts-based Boston Scientific shelled out $435 million in cash to purchase structural heart company Symetis. The Swiss company makes the Accurate and  Accurate neo/TF valve systems for patients suffering from severe and symptomatic aortic valve stenosis and those who have a high-risk of undergoing open-heart surgery.

“The steps we are taking reflect our commitment to being a leader in TAVI and structural heart technologies now and over the long-term, as we broaden our portfolio and pipeline to address the needs of our global health care providers and their patients,” said Ian Meredith, M.D., executive vice president and global chief medical officer, Boston Scientific in a news release. “The ACURATE family of valve products is strongly complementary to our cornerstone Lotus valve platform, and this compelling combination of technologies will allow us to provide interventional cardiologists and cardiac surgeons with multiple TAVI offerings for varying patient pathologies and anatomy.” [TAVR is termed transcatheter aortic valve implantation (TAVI) inEurope]

Some analysts did not fully buy the line on Lotus being the cornerstone TAVR product

“… with Lotus being delayed multiple times, taken off the market in Europe, and with BSX yet to launch all five sizes, one has to wonder if this is a backup plan and if Lotus may not be as ready to go as the company hopes,” wrote Sean Lavin, an analyst with BTIG, in a research note on Thursday. “While BSX paid a hefty multiple and this deal may indicate Lotus isn’t quite ready at this point, we see having a backup option as a positive in this multibillion dollar growth market.”

Boston Scientific paid 12 times the 2016 revenue of Symetis, which was $38.2 million last year.

Another analyst — Danielle Antalffy of Leerink Partners —said that the purchase will provide “air cover” for the six-plus months that the Lotus valve is expected to be off of the market. Still, most analysts viewed the deal positively.

The transcatheter aortic valve space is dominated by Medtronic and Edwards Lifesciences in the U.S. though in Europe the two heavyweights have smaller rivals. It is also a place that has seen numerous legal fights over patent infringement.

Edwards Lifesciences prevailed over Medtronic in 2014 in its long battle and the saga ended with the Irish medtech company agreeing to pay royalty payments of at least $750 million to Edwards Lifesciences.

Meanwhile Boston Scientific and Edwards are in the midst of their own legal battle over TAVR. In Nov. 2015, the Massachusetts company slapped a  lawsuit against Edwards in Germany related to its European patents pertaining to outer seals of transcatheter heart valves. Edwards countersued, alleging patent infringement by the Lotus valve.

On March 3, a U.K court ruled that the Lotus valve did infringe on one of Edwards’ patents surrounding its TAVR valves but not the other. It also noted that the Sapien 3 valve from Edwards infringes two of Boston Scientific’s patents for outer seals of transcatheter heart valves. A German patent court issued a similar ruling days later. Edwards has promised to appeal.

In other words, the ” TAVI space is fluid and litigious,” wrote Lavin in the research note and he concluded that “With all the various IP issues, manufacturing issues, doctor preference, and different valves offering different benefits, the reasons for buying Symetis could be multifactorial.”

Photo: Ian Fung Koo / EyeEm, Getty Images

Same name, different company: Arena’s new CEO cuts the fat

It’s easy to see how Arena Pharmaceuticals grew to be a fragmented and strained biopharma company.

Founded in 1997, the San Diego, California startup was dedicated to the research and development of drugs targeting G-protein-coupled receptors (GPCRs).

Out of its preclinical research came a number of promising candidates. Among them; lorcaserin, a potential weight loss therapy. How could that not sell in a world battling an obesity epidemic?

Money was raised and resources were pumped into advancing lorcaserin — later sold as Belviq. Meanwhile, the R&D engine kept churning to produce more GPCRs.

As Arena struggled to balance its early-stage and late-stage assets, the clinical pipeline in the middle was being ignored, said new CEO Amit Munshi.

“The company essentially became, if you could imagine, a barbell,” Munshi said in a phone interview. “On one side you had this fantastic g-coupled-protein receptor platform and on the other side you had the build-out around Belviq.”

It was too much for the team to balance. By 2012, however, an end to the resource strain was in sight.

After a long battle with the FDA, lorcaserin was provisionally approved for sale in the United States. It was a major milestone, but as Arena’s five-year stock price demonstrates, the drug fell well short of sales expectations.

Instead of funding the preclinical and clinical pipelines, lorcaserin was costing Arena and its commercialization partner money.

Source: Seeking Alpha (03/31/2017)

Source: Seeking Alpha (03/31/2017)

Under an earlier agreement, Eisai had taken ownership of Belviq’s marketing and sales. It was required to pay Arena over 30 percent in royalties in return — enough to dash Eisai’s hopes of turning a profit, but not enough to help Arena offset the cost of its obligations, which included an $80 million Phase 4 cardiac outcomes trial.

Belviq was dragging the organization down, money was hemorrhaging from the preclinical research arm and its clinical assets were going nowhere.

Trimming the fat

That’s the situation Munshi signed up for when he took over as CEO in May 2016.

“The company was really in no man’s land 12 months ago,” he recalled. “It was a discovery research company without the capital to do discovery research. It had a bunch of products in the clinical development portfolio but without the capital or the manpower to progress those products forward. And it had Belviq on the other side, which was relatively flat in terms of sales, but we had substantial obligations.”

The more he looked at it, the more he realized the company couldn’t be everything to everybody. His job was to strip back the clutter to identify the real potential.

It wasn’t Belviq.

“We focused on three sets of activities,” Munshi said.

The first step was divesting the research discovery platform, which was burning around $25 million in cash each year. Munshi held on to a few economic assets and spun the rest into a separate entity called Beacon Discovery, headed by Arena cofounder Dominic Behan.

The second major task was to stem the financial bleed from Belviq.

Two other weight loss drugs, Orexigen’s Contrave and Vivus’ Qysmia, were approved around the same time. All three have struggled with sales. Munshi’s solution was not to reinvigorate the franchise; he worked with the company’s board to formally step back.

“I’ve spent very little time thinking about what went wrong because it’s largely irrelevant to our story going forward,” Munshi said. 

Arena’s team began working with Eisai towards a more mutually beneficial argeement. The resulting deal allowed Arena to step back into a passive role, forfeiting its clinical obligations in return for a significant reduction in royalties, to between 9.5 and 18 percent.

Resetting the bar for royalties took some of the upfront pressure off Eisai as it struggled to find its feet. Arena, meanwhile, stood to save up to $100 million in expenses.

Starting fresh

The final piece of the puzzle was the company’s clinical pipeline. It had been neglected, but according to Munshi, held huge potential.

A new clinical development architecture needed to be built, to progress the drug candidates and to serve as the basis for a reimagined Arena Pharmaceuticals.

Arena Pharmaceuticals CEO Amit Munshi

Arena Pharmaceuticals CEO Amit Munshi

“A big part of my job is being able to convince a really strong executive team to join Arena. As soon as people see what we’re doing, see the pipeline and what’s ahead. It really turns a lot of heads,” Munshi said.

About half of the company is now dedicated to product development, compared to just a handful of people a year ago. He added a medical affairs team, pricing experts, and more clinical expertise. There was only one physician when he joined, now there’s six.

Arena’s pipeline centers around what they hope are better versions of existing drugs. The pathways, mechanisms and market potential are all well characterized and proven. With better chemistry and pharmacokinetics, Munshi believes his company has an edge.

The most advanced candidate is ralinepag (APD811), an oral therapy that selectively binds certain prostacyclin (IP) receptors. It works to widen blood vessels (vasodilation) for patients with pulmonary arterial hypertension (PAH).

Ralinepag, Mushi said, compares to Actelion’s Selexipag, an IP receptor that entered the U.S. market in January 2016. Its sales totaled 245 million Swiss francs (US$245 million) that year.

“We believe we’ve got the next generation molecule. We’ve got better pharmacokinetics and better potency that Selexipag,” he said.

A Phase 2 data readout for ralinepag is expected mid-year.

Next in line is etrasimod (APD334), an oral, next-generation therapy for autoimmune diseases, including ulcerative colitis. It works by selectively targeting S1P receptor subtypes.

“We believe etrasimod is an improved version of a drug called ozanimod,” Munshi stated, adding that the latter drug was the cornerstone of Celgene’s $7.3 billion acquisition of Receptos.

As with ozanimod, etrasimod has the potential to treat multiple indications. Arena is working on four right now. Data from several of those is expected in Q4 of 2017.

The third key compound is APD371, which binds cannabinoid 2 (CB2) receptors. It has a Phase 2 readout slated for the fourth quarter of this year in pain associated with Crohn’s disease.

“It’s important to remember that Arena really hasn’t had efficacy data on any compound in the last five-to-seven years,” Munshi explained. “And this year we expect somewhere between three and five clinical data readouts.”

That could lead to new financing and more evidence of a fresh start. Arena is slowly but surely changing the conversation.

The culture is changing too. Around 90 percent of the management team and over 50 percent of the wider crew joined after the new CEO, most in the last 180 days.

All of that begs the question: Did the team consider a name change?

“Yes, we did. It’s something I would have liked to do,” Munshi said ruefully. “However, name changes cost a lot of money and they are operationally distracting.”

It’s not just the name and ticker symbol. The company markets two products in some 25-odd countries, he noted, which would have made it a large undertaking. So they settled on a refresh of the logo and the website, for now.

“I want to focus on a few things and really do them well,” he said.

In a nutshell, that’s the new Arena.

Photo: erhui1979, Getty Images

How two California startups are preparing pharma companies for blockchain

Blockchain is coming to healthcare and medical fields, and being readied for the potential ways in which an innovative technology might turn the old ways of doing business on its head. Entrepreneurs and researchers have already begun considering different use cases. Blockchain for electronic medical records. Blockchain for Medicaid applicants. Blockchain for payments.

But perhaps the best suited medical application for blockchain, the underlying technology of Bitcoin and other crypto-currencies, is also the one being upended by federal legislation passed in 2013: tracking and tracing the movement of prescription drugs from manufacturer to the pharmacy to prevent counterfeit or dangerous drugs from entering the supply line.

To meet the challenge, two California-based companies have recently joined forces to build an electronic, interoperable pilot system to track the movement of prescription drugs throughout the U.S.


The Link Lab and Chronicled, a blockchain startup that recently raised $6.25 million, are currently partnering to develop such a system based on blockchain, a networking system known for its security. In the blockchain, records of transactions are linked, meaning it’s easy to detect tampering, if any, by a bad actor. Come this fall, at least one global pharmaceutical company — which the two companies declined to name — will be plugged into this pilot application that’s currently under construction, and using it to verify prescription drugs.

“Our vision is a system where everyone would register a serial number, and you could develop technology so that every time a drug changes hands, the technology automatically verifies the authenticity of the drug,” said Susanne Somerville, co-founder of the Link Lab, a life sciences consulting firm.

But the bigger idea is that all of the players in the prescription drug supply chain — not only pharmaceutical companies, but also drug wholesalers, drug distributors, hospitals, and pharmacies — would be able to use blockchain for drug tracking and tracing.

“Everyone says it’s a no-brainer,” Somerville said in a call with MedCity News. “There’s a law that requires the serialization of any drug product, and then the ability to verify drugs as they move on to dispensing.”

What Somerville refers to is the Drug Supply Chain Security Act (DSCSA). Passed into law in 2013, the act says that by 2023 pharma companies should be able to track the production of drugs from raw materials all the way to dispensing to ensure safety and legitimacy, and that they should be able to do so in an interoperable, electronic way. The law is being slowly phased in, which gives startups like Chronicled the chance to experiment with what the best way will be for tracking drugs using serial numbers.

Blockchain technology, according to Chronicled CEO Ryan Orr, allows for the posting of such serial number data unidirectionally, creating an unbroken chain where the many players of the drug supply line can verify the drugs they are receiving are arriving from the correct source.

“The regulation requires the logging of serial numbers,” Orr said in a phone call. “We’re logging and tracking serial numbers through movement in the supply chain. Blockchain can log it automatically.”

What’s more, blockchain technology provides for an easy framework to create an electronic, interoperable mechanism — another requirement of the DSCSA — by which players in the prescription drug supply chain can track those serial numbers.

Where potential hangups exist in applying blockchain tech for this area of the healthcare industry is in widespread adoption.

“The pharmaceutical industry is super conservative. How do you explain the improved inherent security of a blockchain solution to somebody who doesn’t understand it?” Somerville said.

Jim Lebret, an assistant professor of medicine and clinical innovation at the NYU School of Medicine and a digital health consultant, said that infrastructure is the biggest challenge when it comes to bringing the prescription drug industry over to blockchain.

“I don’t have a lot of hope for a sudden, mass, industry-wide adoption of blockchain, unless there was some payment restructuring that required it,” he said. “It’s a culture-change question. It’s also a compliance question.”

Now until the end of 2017, Chronicled and the Link Lab will test its pilot system with a number of players on that drug supply chain. Their goal isn’t to build an enterprise-level blockchain for the medical industry, but rather explore two things: How to incorporate blockchain technology into the world of drug-tracking, and then the potential organizational structure for a public, prescription drug blockchain that, presumably, every player in the worldwide pharmaceutical industry would plug into. It’s a tall order for an industry that’s expected to be larger than $1.12 billion by 2022.

“We’ve spent the most time thinking about the model of organization to incorporate this technology as a back-end in an industry as large and as substantial as the pharmaceutical industry,” said Orr.

Chronicled and the Link Lab have already signed up one large pharmaceutical company to participate. At the time of their pilot project announcement this month, the plan was to sign up several other participants — drug wholesalers and distributors — to begin sussing out what the protocol and structure should be for posting drug records with blockchain.

Orr hopes to enlist one player at each stage of the supply chain, then build out the technology needed to have them use blockchain for logging serial numbers in a way that ensures they meet compliance with their specific regulations. If their pilot project proves successful, then a small startup will have blazed a trail for larger enterprise companies to follow in creating a large-scale blockchain for the pharmaceutical industry.

“Technologically, the problem we’re trying to solve is not a complex one. It’s more about aligning expectations around the configuration of this approach,” said Orr. “But we’re very hopeful and excited about where this can go.”

Photo: Pixtum, Getty Images