Preview — BIO and Scientific American’s Regional Bio-Innovation Scorecard

The BIO 2011 conference is just around the corner, and Washington DC prepares for some 15,000 delegates from 65 different countries to descend upon its limits, which means it’s almost time for this year’s Worldview Regional Bio-Innovation Scorecard. This morning, the Biotechnology Industry Organization (BIO) hosted a press conference in DC to provide some highlights on the upcoming conference and to leak a few details of what this year’s scorecard would capture.

Over the last three years, Scientific American has partnered with BIO to produce a global ranking of countries in several areas related to innovation in the biotechnology sector (find a link to the 2009 results here). Jeremy Abbate, Director of Global Media Publishing at Scientific American, explained that as certain countries around the world are catching up to the US in terms of their production of innovative products, the biotechnology sector is becoming exceedingly global, and that a publication like Scientific American Worldview: A Global Perspective is needed to broadly document new trends and developments.

The essence of Worldview is to promote dialogue on what elements drive innovation, and to answer some pertinent questions: what characteristics or attributes make a country innovative? what makes a person innovative? Another goal is to identify individuals that are forces within the sector — those influential characters that are making the difference — the so called “heroes of science and finance”. Abbate iterated that although Worldview does not have all of the answers yet, it has collected massive quantities of data on the biotech sector in pursuit of them, and the scorecard is its “pièce de résistance”.

So what can you expect to see in 2011’s Worldview Regional Bio-Innovation Scorecard?

Emerging Markets

Last year’s separated the hype from the hope with a focus on China. This year China will be under the spotlight again, but this time along with the first three of the BRICs countries, including Brazil, Russia, and India. The scorecard will look closely at what these countries have to offer in terms of their capacity to innovate, their scientific output, and what capital they have available for investment. A special emphasis will be placed on the bio-innovation workforce they have to deploy across the biotechnology, medical device, and pharmaceutical industries.

The 2011 scorecard will point to the world’s fastest growing drug markets, take a deep dive on Africa and Australia, and present some analysis on innovative products, what countries pay to produce them, and how price has been affecting output. Russia’s Pharma 2020 initiative also comes into play. Will Russia be the manufacturing powerhouse that some hope it will be? During the briefing, Nikolay Savchuck, passed industry representative to the Russian government’s Pharma 2020 initiative, joked with the press that, unlike China, Russia has been all hope and no hype; perhaps it is Russia’s turn to deliver.

Biotech Movers

Making its debut to the scorecard will be the “Worldview Biotech Movers”. This section will highlight three game changers in the biotech sector and what they are doing to lubricate the cogs of innovation. This year expect to become a little more familiar with India’s Kiran Shaw of Biocon, China’s Ge Li of WuXi AppTech, and one other influential individual from Brazil. Although not always “friendly” to innovation on a global scale, these people march to their own drum and thrive on a regional basis.

The movers section of the scorecard touches on Abbate’s question — what makes a person innovative? Unlike definable elements that contribute to a country’s capacity to innovate, like intellectual property, a sound regulatory environment, science-minded policy, R&D investment, and so forth, the qualities of a great human innovator are much more nebulous. Ultimately, a country’s capacity to innovate may rely to a large degree on people. The work behind Worldview may in time bring some tangibility to this subject.

Snapshot from Canada

Cate McCready, VP of External Relations at BIOTECanada, spoke to the press and provided a snapshot of the Canadian biotechnology sector. In 2008, the Canadian government began an industrial analysis of biotechnology in the country which indicates the sector is contributing in the realm of $86 billion annually to Canada’s GDP. Although this figure is primarily driven by healthcare, McCready notes that there has recently been a divergence to other biotechnology industries, namely agricultural biotechnology, which is growing rapidly. Canada currently has 600 biotechnology companies operating within its borders, from “coast-to-coast-to-coast”, as McCready puts it. Be sure to check out Canada Cafe at the conference later this month.

A Few Highlights

So which countries will win accolades? The scorecard preview didn’t give up many hard stats, and leaves much to the imagination, so you’ll have to wait until it’s unveiled at BIO on June 29th.

Officially in, however, Denmark will take no. 1 for biotech patenting, while New Zealand proves to have the greatest number of PhD candidates per capita.

Supreme Court Hears Oral Arguments in False Claims Act Whistleblower Case

The United States Supreme Court heard oral arguments today in a case we noted in June in which amici curiae PhRMA and BIO urged the Supreme Court to limit whistleblower suits under the False Claims Act (FCA). Feel like you were really there by reading the full transcript of the oral argument (pdf). Out loud. In your best Supreme Court Justice Voice.

Post-Vacation Brain Dump: Deal Developments

Some exciting deal news from the week:

• Neuromed, which licensed U.S. rights to its lead candidate Exalgo to Mallinckrodt after Merck dropped out, entered into an interesting stock-for-stock merger deal with Cambridge, MA-based CombinatoRx that we’ll discuss further in this coming Monday’s deal review.
• Paladin Labs made a deal with Wyeth for a bundle of products that are marketed in Canada with annual sales of about $4 million.
• Biovail is picking up additional bundles of rights to Huntington’s chorea drug Xenazine.
• Elan, the subject of rumors at least since April, announced a $1 billion deal with J&J for Elan’s Alzheimer’s program.

And some interesting company news:

• London, ON-based Sumagen got some positive coverage from CBC of its HIV vaccine candidate.
• FierceBiotech announced this year’s Fierce 15 (no Canadians, but an interesting list).
• Roche, post-Genentech acquisition, is dropping its PhRMA membership to focus on working with BIO.

PhRMA and BIO in the U.S. Supreme Court: False Claims Act Whistleblowers Beware

As PhRMA and BIO hoped it would, the U.S. Supreme Court has agreed to hear the appeal of a False Claims Act (FCA) case that could determine how easy it is to bring a whistleblower suit under the statute.  Noting the prevalence of healthcare fraud cases brought under the FCA, PhRMA and BIO filed a brief as amici curiae, urging the Supreme Court to take the case and to limit whistleblower suits.

Whistleblowers can’t sue under the FCA if their suit is based on information in publicly disclosed federal reports or audits (see 31 U.S.C. §3730(e)(4)(A) if you’re so inclined) since the federal government has access to that information without a whistleblower’s help.  The Fourth Circuit case that’s being appealed holds that only federal reports and audits operate to bar a whistleblower suit, not state or local government reports or audits.  This decision puts the Fourth Circuit in line with the Third Circuit, but at odds with the Eighth, Ninth, and Eleventh Circuits.

In their amicus brief, PhRMA and BIO argued that allowing whistleblower suits based on allegations in state and local reports or audits would open a floodgate of opportunistic FCA litigation aimed at their members, increasing the costs to pharma and biotech companies and diverting resources from R&D efforts.

We will continue to follow the case (Graham County Soil & Water Conservation District v. United States ex rel. Wilson, 08-304).  Stay tuned…

Trends in 2009: Shifting IP Constituencies as Innovator Pharma Buys Generics and Asia Turns to Innovation

Growing industrial and geopolitical realignment of economic interests has the potential to re-define intellectual property constituencies in 2009.

1.  Industrial realignment: the entry of innovator pharma companies into the generics business.

This year has already seen Merck get into follow-on biologics by buying Insimed and Pfizer build its generics business with its Aurobindo deal.  As traditional innovator pharma companies become more invested in follow-on biologics and small molecule generics, they will have a greater (self-)interest in a functioning subsequent entry pathway. 

Watch how this is playing out in the follow-on biologics arena as two competing FOB bills make their way through Congress.  Right now, the 12-year exclusivity period in the Eshoo-Barton FOB bill and the 5-year exclusivity period in Waxman’s FOB bill are duking it out, and we’re already seeing increased industry flexibility.  Innovator pharma has historically insisted on a 14-year exclusivity period to accompany follow-on biologics legislation, but BIO has already indicated some willingness to support Eshoo-Barton, as has PhRMA. 

Dani’s the expert, but my layman’s guess is that we get a FOB pathway this time around, and that the exclusivity number lands somewhere in the 8-10 year range.  This is consistent with a Teva-promoted analysis and it’s easy to see that it covers the arithmetic middle ground.

2.  Geopolitical realignment: increasing innovative activity in Asia, which has historically focused more on generics.

In China, a recent deal between Lotus Pharmaceuticals, Inc. (OTCBB: LTUS) and Beijing Yipuan Bio-Medical Technology Co., Ltd. (“Yipuan”) to acquire the drug Yipubishan points to China’s interest in promoting innovation.  Yipubishan, which is used to treat the symptoms of gastric ulcers and hemorrhages of the upper digestive tract, was partly funded through the use of grants from the Innovation Fund for Small – Medium Technology Based Firms of the Ministry of Science and Technology of the PRC.  Yipubishan became the first prescription drug of its kind developed in China to be included in the National Torch Project, which recognizes and promotes commercialization of high-tech discoveries and encourages companies to use high technology.  The Torch Project is one of a series of PRC Science and Technology initiatives.

In India, Wockhardt’s pioneering efforts in biotechnology are among many signs of increasing innovative activity, and have attracted interest from Pfizer and Sanofi.  Wockhardt has set up a global-scale biopharmaceuticals manufacturing powerhouse, the Wockhardt Biotech Park, in Aurangabad, India. This state-of-the-art complex comprises six dedicated, manufacturing facilities, and is designed according to US FDA and EMEA standards. It will also house new biotechnology products that are currently in various stages of development. The complex has the capacity to cater to 10-15% of global demand for major biopharmaceuticals.

India and China are in the 3rd quintile of countries in the 2009 IPRI Report, with India ranking 46/115 and China ranking 68/115 but they are steadily increasing their innovative activity. 

Within a short span, I would expect them to rank more like Israel, which has a world-class innovative industry as well as a strong generics industry (Teva), or Taiwan, which recently announced an initiative to boost cleantech and biotech.  Both Israel and Taiwan are ranked 29/115 in the 2009 IPRI Report. 

Waxman Drives Hard Bargain on FOBs Market Exclusivity

Representatives Waxman (D-CA), Pallone (D-NJ) and Deal (R-GA) released the Promoting Innovation and Access to Life Saving Medicine Act today, a.k.a. Follow-On Biologics legislation. The legislation provides a five-year initial exclusivity for products with a unique molecular structure. The Biotechnology Industry Organization is not too happy. In the past BIO has called for a 14-year data exclusivity. 

Perhaps actions South of the Border will move the ball forward at Health Canada on its regulatory pathway for biosimilars? It has been almost exactly a year since Health Canada’s draft guidance on biosimilars was published. Health Canada subsequently published a summary of its Consultation on the Regulatory Framework for Subsequent Entry Biologics following a stakeholder meeting in June.

Bailout Bonanza!!

With every industry under the sun seeking bailout money, Biotech is not about to be left out. And with a record number of biotech companies with less than 6 months’ cash in the bank, there is good reason to fear that promising ideas could be lost before the credit markets thaw. There are, however, an abundance of views on what form help for the industry should take.