Twenty-Third Annual General Assembly Creative Investments and - PowerPoint PPT Presentation

Twenty-Third Annual General Assembly Creative Investments and Partnerships to Stimulate Innovation Friday, December 7, 2012 3:00 – 5:30 pm

New York Pharma Forum 23 rd Annual General Assembly New York, NY December 7, 2012 James Greenwood President & CEO BIO 1

Creative Investments and Partnerships to Stimulate Innovation 2 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Is the traditional model broken? Academic/Discovery Biotech (VC/IPO) Pharma (Buys them) Late-Stage/Marketing/Sales Early-Stage Mid-/Late-Stage Traditional Model : Development of academic discovery financed by private sector (biotechs) and then handed over to Pharma 3 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Challenges to innovation Intellectual Property Regulatory Access Reimbursement to capital 4 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Annual VC funding 5 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON Source: NVCA/PwC, November 7th, 2012

U.S. venture investment in biotechnology – 1 st round deals 60 # First Round Deals 50 48 40 37 30 20 15 17 17 10 0 2002-1 2002-3 2003-1 2003-3 2004-1 2004-3 2005-1 2005-3 2006-1 2006-3 2007-1 2007-3 2008-1 2008-3 2009-1 2009-3 2010-1 2010-3 2011-1 2011-3 2012-1 2012-3 Source: NVCA/PwC, November 7th, 2012 6

Venture investment shifting away from Biopharma and Medical Devices 7 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Venture capital investment moving away from biotech innovation Past 3 Years Change in Biopharma Next 3 Years Expected Change in Investment Biopharma Investment % of Respondents % of Respondents 15% 14% Increased Increased 40% 41% Decreased Decreased 8 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Fewer VC firms investing in biotech 9

U.S. Biotech IPOs by year Source: E&Y 1 0

Less than 10% of pre-phase II candidates will ever reach market Estimated 35 to 40% of Proof of concept R&D cost is pre-phase II 350M 100M 170M 370M 70M 240M Discovery/ Phase I Phase II Phase III Approva l Other/ preclinical Phase IV Source: Pharmaceutical Research and Manufacturers of America 1 1 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

New drug approvals not keeping pace with R&D spending Pharma R&D Spending vs. NMEs Approved 1 2 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Regulatory issues Risk-averse FDA (and Congress) Longer drug development times Clinical trials – take longer – more complex – more expensive Lack of transparency, predictability Regulatory science has not kept up FDA funding – resources and staffing 1 3 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

A 21 st Century FDA (TREAT Act) Elevating FDA and Empowering Operational Excellence • FDA mission statement • Management Review Board Advancing Regulatory Science and Innovation • Chief Innovation Director • Enhancing access to external scientific and medical expertise Enabling Modernized Patient-Centric Clinical Development • Modernizing and expanding the Accelerated Approval pathway • Electronic health records and FDA Clinical Informatics Coordinator • Disclosure to drug sponsors of reasons for non-approval 1 4 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Clearing the path for investment in innovation R&D partnership structures Net operating loss reform Capital gains rate reform for small biotechs Faster cost recovery for intangible assets (accelerated amortization) Incentives for repatriated investments Expand Therapeutic Discovery Project program 1 5 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Reimbursement issues Governments want healthcare savings Industry-wide price cuts Mandatory pricing systems and rebates Imports of drugs from lower-cost countries Shifting patient burden with higher co-payments Generic substitution IPAB Comparative Effectiveness 1 6 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Drug industry is a target for deficit proposals Reduce payment to Prohibit patent Reduce exclusivity for physicians for Part B settlement practices innovator biologics drugs Require industry to Expand 340B drug Apply LCA policies to pay rebates on discount program Part B drugs Medicare Part D beneficiaries Allow the gov’t to Reclassify certain Part Restructure cost negotiate Part D Drug B drugs to sharing for low Prices Part D income Medicare beneficiaries 1 7 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Intellectual Property challenges US top court to rule if companies can patent genes WASHINGTON — The US Supreme Court said Friday it would examine whether companies should be able to patent human genes they have isolated and identified, a decision that could have far- reaching implications for genetic research. 1 8 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Creative collaboration(s) “The advantages of collaboration are greater network involvement in problem solving and testing, a reduction in transaction costs to acquire new knowledge, and a reduction in licensing costs when firms can access knowledge produced by the collaborative network at low or no cost.” The Bioeconomy to 2030: Designing a Policy Agenda OECD study

Co-opetition: a new model for R&D • Eli Lilly, Merck, and Pfizer form not-for-profit to focus on cancer research • Asian Cancer Research Group focuses on most commonly diagnosed cancers in Asia • Pooled resources to bring down the cost for innovative treatments 2 0

Creating value through R&D efficiency 10 pharma companies collaborate to solve common drug development challenges and increase R&D efficiency: 2 1

Academic discovery alliances 2 2

Filling funding gaps: private, philanthropy, patient advocacy Disease focused groups step in while VC funding moves to later stages. 2 3

Increased federal role in translational research Federal government takes larger role in early stage drug R&D NIH Programs – National Center for Advancing Translational Sciences (NCATS) – Cures Acceleration Network (CAN) 2 4 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Our panel Tadataka ( Tachi) Yam ada , M.D., Executive Vice President and Board Member, Chief Medical & Scientific Officer, Takeda Pharmaceuticals Alan Paau , CLP, MBA, PhD, Vice Provost, Cornell University President, Cornell Research Foundation, Inc.; Executive Director, Cornell Center for Technology Enterprise and Commercialization Ann Li , Executive VP, Business Development, New York City Economic Development Corporation Greg W iederrecht , Ph.D., Vice President & Head of External Scientific Affairs, Worldwide Licensing & Acquisitions, Merck & Co.,Inc. Jam es Greenw ood ( m oderator) , President & CEO, Biotechnology Industry Organization 2 5 BI OTECHNOLOGY I NDUSTRY ORGANI ZATI ON

Dr. Tadataka Yamada Executive Vice President and Board Member Chief Medical & Scientific Officer Takeda Pharmaceuticals