In Vivo Vol. 34 April 2017

In Vivo vol. 35 ❚ no. 04

invivo.pharmamedtechbi.com APRIL 2017

pharma intelligence ❚ informa

NEW TRENDS IN R&D Biopharma’s Bet On The PARTNERING: US Veterans Administration

BY WILLIAM LOONEY

Regression To The Meanest: How Markets Value Pharma Stocks

Medical Devices Aren’t Luxury Goods, So Why Does Medtech Try To Sell Them That Way?

Managing Pharma’s Competing Challenges In The New Health Economy

New Trends In R&D Partnering:

Biopharma’s Bet On The US Veterans Administration The US Veterans Administration is attracting more interest from drugmakers seeking to grow their foothold in the lucrative – but scientifically challenging – market for CNS disorders. The allure comes from VA’s strong analytics and data crunching capabilities as well as its investigatory and trial management expertise in high-profile areas like traumatic brain injury, post-traumatic stress and major depression.

BY WILLIAM LOONEY

B

iopharma’s inherent shortage of new product leads means that finding a good external research partner has become a strategic imperative. It’s a task made harder by the fact that the dance card of the best players in science is full. So, as the search for that “partner of choice” widens, In Vivo offers up a closer look at the R&D arm of the country’s largest single provider of integrated patient care: the US Veterans Administration (VA).

The time is certainly right. The Office of Research and Development (ORD) has a new chief, Rachel Ramoni, ScD, DMD, who arrived in January with a mandate from President Donald Trump’s choice for Secretary of Veterans Affairs, David Shulkin, MD, to raise ORD’s profile with innovative drugmakers and seek new ways to cooperate, in the best interest of not only veterans but for the wider benefit of the society to which those veterans belong.

With nearly a century of exposure to the health issues of a diverse cross section of the US population, the VA has in-

house the attributes of what every commercial biopharma enterprise requires in a potential partner. The list includes basic research and therapeutic expertise in key areas of unmet medical need; extensive information assets, with more than two decades of EMR data covering the cumulative clinical experience of 20 million patients; and a fully networked set of field work capabilities ranging from the conduct of epidemiological and observational studies to management of complex, multicenter clinical trials. Such research is performed by the VA itself and in cooperation with other federal agencies, academic medicine and industry.

Strengths At The Bench All told, ORD manages some 2,000 active projects at more than 100 sites across the country, part of a larger network of 168 regional hospitals and more than 1,000 outpatient clinics run by the Veterans Health Administration (VHA). And because researchers operate within the VHA’s own integrated system of patient care, it can boast of a capability that few other organizations of equivalent size possess: to study,

©2017 Informa Business Information, Inc., an Informa company

evaluate and treat the course of a disease, from the bench right to the bedside. Nearly two-thirds of ORD researchers are also clinicians who treat patients, which means that scientific insights are tested daily in real-world settings.

Resources are substantial – and may increase under the new administration.

ORD funding supports roughly 3,500 professionals across the country with an annual budget of $673 million appropriated

by Congress. This figure is considerably enhanced by additional funding from federal and private grants awarded to ORD investigators, from the National Institutes of Health (NIH), US Department of Defense (DOD) and the Centers for Disease Control & Prevention, among others, as well as infrastructure support from VA medical centers, bringing total research spending to $1.8 billion.

Overall, the VA has emerged as an early favorite of a new president skeptical about the federal government bureaucracy. Nevertheless, one lasting point of contention for ORD is the difficulties expressed by biopharma companies in understanding the basics of how to do April 2017 | In Vivo | 11

invivo.pharmamedtechbi.com

BIOPHARMA DEAL-MAKING ❚

❚ BIOPHARMA DEAL-MAKING business with it – where is the relevant contact point for outsiders in a sprawling, decentralized organization? What procedural steps are required to do business with ORD on projects of mutual interest, and how can these interests best be identified? The basic problem, according to industry insiders, is a VA culture that historically tends to see biopharma companies not as innovators, but as vendors engaged in the business transaction of providing medicines as a covered benefit to the veteran population. Industry too shares this problem, due to the sensitivities that company managed market teams have in complicating their commercial relationship with VA formulary administrators, where government ethical and compliance challenges come to bear.

So what’s driving the optimism? Secretary Shulkin. As a past leader of the health care quality movement, his insistence on creating an internal culture of efficiency, accountability and responsiveness is a constant when industry is asked to assess the VA’s current potential as a research partner.

With nearly a century of exposure to the health issues of a diverse cross section of the US population, the VA has in-house the attributes of what every commercial biopharma enterprise requires in a potential partner.

invivo.pharmamedtechbi.com

Leadership’s New Tone Taking her cue from Shulkin, Chief Research and Development Officer Ramoni says collaboration on research and science is one of her first priorities. “We recognize the importance of the consultative process for external partnerships – it needs to be streamlined,” she said in an interview with In Vivo. “By that I mean having a clear, established entry point that any biotech or pharmaceutical company can rely on when they want to work with us.” She also acknowledges that widening the circle of players on research is vital if Shulkin is to meet his objective to raise the standard on health care for veterans against all the negative publicity in recent years concerning the quality of that care.

It’s true that the VA has been slow to emphasize its productive links between veterans, medical research and public health. In a record that extends back to the middle of the last century, VA researchers have notched some notable innovation milestones, including development of the nicotine patch; working jointly with Merck & Co. Inc.to demonstrate the efficacy of its shingles vaccine, 12 | In Vivo | April 2017

Zostovax; and conducting the first successful liver transplant. On the medtech front, ORD researchers are responsible for many of the decades-long advances on prosthetic limbs; ORD was also the driver behind the first implantable cardiac pacemaker. All told, its scientists and investigators have earned three Nobel prizes, seven Mary Lasker awards as well as compiled an extensive record of authorship in peer-reviewed professional journals.

Recently, VA research has emerged as the go-to source for the latest medical insights and evidence on traumatic brain injury; suicide treatment and prevention; and post- traumatic stress disorder (PTSD), which is itself becoming far more prevalent in the civilian population, at an estimated 3 million cases a year.

Judith Bentkover, PhD, adjunct professor at Brown University’s Department of Health Services, Policy and Practice, confirmed this in a December 2015 peer review paper published in the Harvard

Review of Psychiatry, which concluded that the VHA model of service delivery on PTSD “offers the best source for developing such capabilities outside the VHA, where a patient-centered research institute or work group devoted specifically to improving care for all PTSD patients is needed.”

It is estimated that as much as 30% of the 21 million US veterans suffer from some form of PTSD, where standard treatment like cognitive behavioral therapy and prolonged exposure therapy, while effective, are not sufficient for many patients. ORD’s partnership with the VA’s National Center for PTSD makes it the acknowledged global leader in research to manage and prevent PTSD, with seven VHA academic centers of excellence located across the country. Of particular interest to biopharma is the announcement in December 2016 of a new PTSD Psychopharmacology Initiative to work jointly with drug companies to identify and test promising candidate drugs to treat this condition.

As chief research and development officer, Ramoni sees her mandate as building on this dense science and clinical architecture to deliver better health outcomes for veterans. A graduate of the Harvard University School of Dental Medicine, Ramoni is also an epidemiologist and expert in bioinformatics, genomics and precision medicine. Prior to joining the VA, Ramoni founded and led from Harvard the Undiagnosed Diseases Network, which, with funding from NIH, coordinates efforts by independent clinical and research experts to identify rare, undiagnosed illnesses using advanced technologies. In addition, she was an early leader in government and private efforts to help health providers share information derived from EMR. Ramoni’s background makes her a key player in no less than five of Secretary Shulkin’s top 10 priorities for 2017 (see box), covering (1) accountability; (4) infrastructure improvements in the administration of veteran’s health care; (6) coordination of activities with the Department of Defense, where health research is an ongoing focus; (7) interoperability of EMR systems; and (8) prevention of suicide, a political hot button for the VA, which is presently conducting the largest invivo.pharmamedtechbi.com

clinical trial ever to test the effectiveness of lithium for preventing suicide. Said Ramoni, “Today, under Secretary Shulkin, every part of the VA is accountable for results. In that regard we have an initiative underway to assess the quality of all the research we are funding, especially as it relates to the end product: what is done with the research we produce?

How are we carrying it forward to yield a measurable improvement in veteran’s health? That’s why I am so interested in partnering with the biopharma industry.

It widens our horizons around interventions that work in the clinic.”

Alliances with external stakeholders are also a way to de-risk the research process. “The desire to bring forward results that are positive for veterans makes us more conservative about where and how we engage on our own – even if we fail honorably, which is an inevitable fact of life in medicine, it still falls on us to think carefully on how to translate the results to clinical practice. Industry, with its greater tolerance for risk, can help us do that. Our ultimate goal is spreading good ideas more quickly throughout the research community, and thence to the patient,” Ramoni added.

Data Density In Precision Medicine This year, ORD is placing a big bet on precision medicine, where it has been an early leader. The VA Million Veteran Program (MVP), launched back in 2011, is the world’s largest storehouse of genetic health, lifestyle and military exposure data within a closed health care system. It predates former President Obama’s crossagency Precision Medicine Initiative, and has a goal to understand how genes affect health by compiling blood samples, health and lifestyle questionnaires, and EMR data from the voluntary participation of one million veterans.

The program is a “living” entity, not just a collection of historical records, as participants’ health information is continuously updated through the EMR as well as through the survey record of lifestyle and behavior issues. “There are significant opportunities in population health, because of the access we have to this very accessible, defined group,” says David Atkins, MD, director of health services and development, ORD. “We are

❚ DAVID SHULKIN’S TOP 10 PRIORITIES FOR 2017

1. Employee accountability legislation.

2. Temporary extension to the Veterans Choice Program.

3. Redesign of the Choice Program.

4. Improving VA infrastructure.

5. Enhance VA foundational services.

6. Better collaboration between VA and the Defense Department.

7. Interoperable electronic health records and improvements to VA IT systems.

8. Suicide prevention programs.

9. Appeals modernization.

10. Improving performance at Veterans Benefits Administration.

not just collecting biological specimens, but other things going on in people’s lives, too. This interaction between genes and the lifestyle environment is likely to power some highly useful observational studies to support better and more efficient spending within the VA health system overall.”

A precision medicine study launching in the 2017 fiscal year, called PRIME (Precision Medicine in Mental Health Care), will test the clinical value of pharmacogenomic testing in mental health. Says Atkins, “There are genetic

©2017 Informa Business Information, Inc., an Informa company

tests on the market today that have some predictive value around the metabolism of certain SSRI drugs. The study could help clinicians in choosing a specific drug appropriate to the individual patient rather than working on the basis of trial and error, which is a common challenge with SSRI therapies.”

Late last year, MVP enrollment, distributed across 52 medical centers, passed the 500,000 mark. It is well on its way to reach the goal of a million participants by 2020. Some $30 million is allocated under the VA draft budget for FY 2017 to maintain the pace of enrollment. To expand the accessibility and range of the MVP data for use in research, ORD is in the final stages of creating a joint program with the Department of Energy (DoE) called MVP CHAMPION – Computational Health Analytics for Medical Precision to Improve Outcomes Now. CHAMPION will give researchers access to DoE’s advanced high-capacity computing networks to gain fresh insights from the MVP data pool. Prostate cancer has been proposed as the first target of this partnership.

Genetic sequencing with DNA information drawn from the samples is being applied to drive current and future research in a range of illnesses affecting the veteran population, including cancer, heart and kidney disease, and mental illnesses such as PTSD. VHA medical centers in San Diego and New Haven, CT, are using the platform to study possible genetic pathways to PTSD. The data should shed more light on the neurobiology behind PTSD, leading in turn to possible drug treatments involving behavior modification.

Another precision medicine initiative is the Applied Proteogenomics Organizational Learning and Outcomes consortium (APOLLO) partnership between ORD, the National Cancer Institute (NCI) and the DOD. It is the first federal system attempt to screen, on a routine basis, individual patient tumors for gene and protein information to define a customized plan of treatment. Data generated will also be applied to general clinical practice, including early detection of cancers, matching patients to clinical trials and the development of standard treatment guidelines. Launched last April 2017 | In Vivo | 13

invivo.pharmamedtechbi.com

BIOPHARMA DEAL-MAKING ❚

❚ BIOPHARMA DEAL-MAKING

❚ VA RESEARCH: CAN THE MILITARY HELP SCORE A MATCH WITH INDUSTRY?

What do you do to open a new front in industry efforts to engage the VA on novel, patient-friendly platforms in medicines research? Call in the generals. Another front for cooperation is a project commenced by the George W. Bush Institute’s Military Service Initiative, focused on improving the lives of the 3 million veterans who have served since 9/11. The project, the Warrior Wellness Alliance, launched in February, seeks action to confront the “invisible wounds of war”: specifically, PTSD and traumatic brain injury (TBI). One goal is to increase investment in research that leads to better diagnosis and treatment for these two conditions, which in the Institute’s view does require outreach to the innovative drug industry.

To that end, the Bush Institute and the VA organized a consultative meeting with biopharma companies and VA and ORD staff on January 12, 2017. The meeting was opened by Secretary Shulkin, still in his previous role as VA undersecretary for health. There were presentations by retired US Army Colonel Miguel Howe, director of the Military Service Initiative, and former US Army Vice-Chief of Staff, General Peter Chiarelli, who now serves as CEO of One Mind, a Seattle-based 501(c) nonprofit focused on partnerships to combat brain disorders. Industry was represented

by Shire PLC CEO Flemming Ornskov, MD, the Pharmaceutical Research and Manufacturers of America (PhRMA), and R&D staff from several other companies engaged in PTSD, brain trauma and mental health research.

The group agreed to pursue some initial “win-wins” focused on industry input on how to better communicate the progress of VA research against PTSD and TBI, including targeted implementation of VA-wide clinical practice guidelines; and improving clinical education and the effectiveness of physician interventions with patients against PTSD and TBI. This could lead to measures to better facilitate the role of industry in clinical trial work on these two conditions, by reducing red tape and other logistical barriers.

invivo.pharmamedtechbi.com

The plan is to make a formal announcement of a joint VA industry commitment to the pursuit of innovative solutions to these two mental health challenges at a CEO event chaired by President Bush later this year. Bob Jansen, CEO of Zensights LLC, a partnering advocate with links to senior retired members of the US military command, who is handling logistics for the project jointly with the Bush Institute, tells In Vivo that “Secretary Shulkin and former President Bush are committed to doing what is necessary to eliminate barriers to meaningful public/private partnerships to get more treatments to more veterans, more quickly than ever before. The health and social consequences of PTSD and TBI to veterans who have served, and to the broader civilian population, are too real to be ignored. And we cannot measure progress in silos – collaboration is essential to the cure.”

year, the project is focusing initially on patients with lung cancer at VHA and DOD medical centers.

“This is a partnership with real potential in giving clinicians the ability to find out which is the best drug to work for an individual patient,” Atkins told In Vivo.

“Each of our three entities is contributing intellectual capital and technical 14 | In Vivo | April 2017

services. The next step is figuring out how to fund the actual trials, and with whom – it could be an area of interest for the biopharma industry.”

In addition, ORD has inked a partnership with IBM Watson Health to use super-computing’s deep learning capacity to interpret the results of tumor sequencing to recommend therapies and

help place the right human subjects in clinical trials.

Veterans: A Cross Section Of Society In Vivo discussions with big pharma majors at a January 12 consultative meeting on partnering chaired by Secretary Shulkin with the President George W. Bush Institute revealed that a principal interest is the richness – the sheer heterogeneity – of all these data compiled

by ORD. The industry perception is reinforced by Christopher Bever, MD, a neurologist and director, ORD biomedical and laboratory research, who noted, “The rap on VA research is that veterans don’t resemble the general civilian population.

In fact, the opposite is true.” (See sidebar, “VA Research: Can The Military Help Score A Match With Industry?”)

His point is that veterans are actually a bit ahead of the latter on the demographic and health status curve. Veterans tend to express the same conditions as the rest of the population. They are aging, ethnically diverse, suffer from chronic care co-morbidities and often have some mental health issues. Minorities are slightly more represented here than in the general population, while women constitute a small but fast-growing cohort – about 6% of the total. “Our data base is also more concentrated on sick patients rather than the healthy, who by and large don’t need to be studied except as a comparator. So we can draw attention to that veteran with high blood pressure who also suffers from diabetes along with mild anxiety or depression. In terms of trial recruitment, our pool of veterans has the most numbers and depth in the experience of disease, compared with other systems and sources.”

Finally, the VHA, as an integrated health network that follows the patient from first diagnosis to cure, is able to cover data gaps that often prevent researchers from drawing richer insights beyond a baseline conclusion. Says Atkins, “We own the clinical care of those patients; it’s full-profile longitudinally.

Only Kaiser Permanente comes close to matching that. The major PBMs and insurers can’t, because of data churn due to the frequent turnover in covered lives.

We see it as an appealing credential for invivo.pharmamedtechbi.com

Exhibit 1

Clinical Trials Funded By The VA Office Of Research And Development Cooperative Studies Program CONDITION

STUDY TITLE

INTERVENTIONS

STATUS

Depressive bipolar disorder; suicide

Lithium for suicidal behavior in mood disorders

Drug: lithium against placebo

Recruiting

PTSD; depression

Ketamine infusions for PTSD and treatment resistant depression

Drug: ketamine

Recruiting

PTSD

CERV-PTSD: comparative effectiveness research in veterans with PTSD

Cognitive processing therapy; behavioral prolonged exposure

Recruiting

Spinal cord injury

Powered exoskeletons for spinal cord injury

Device: Rewalk 6.0

Recruiting

Colorectal cancer

Colonoscopy vs. fecal immunological testing to reduce mortality from colorectal cancer

Procedure: colonoscopy, FIT

Recruiting

Lung neoplasms

VA lung cancer surgery or stereotactic radiation therapy

Procedure: radiation

Pending, not yet recruiting

Major depressive disorder

VA augmentation and switching treatments for improving depression outcomes

Drug: antidepressant plus aripiprazole

Active, no longer recruiting

SOURCE: ORD

us when external stakeholders evaluate a potential research partner.”

Partnering: Search For Clarity Given the high expectations the VA now attaches to its research agenda, ORD is officially off the fence when it comes to working with private industry – “it’s an unambiguous yes,” says ORD chief Ramoni. Nevertheless, potential industry partners must navigate a series of steps to formalize the arrangement and meet departmental compliance rules designed to protect veterans. A drug company comes to ORD with a proposal for a trial project, based on scientific contacts with ORD investigators who share an interest in finding something out. Discussions to identify commitments from each party on topics like protocol development then take place under sponsorship of ORD’s Cooperative Studies Program, (CSP), which then leads to negotiation

of a formal Cooperative Research and Development Agreement (CRADA). If the project is financed from the ORD budget, then ORD is responsible for conducting an independent scientific peer review and managing the overall study. Funding is then provided to VA investigators managing the project; no money from a company changes hands.

If the CRADA involves a financial contribution by the industry partner, the company must work through a network of federally financed non-profit companies (NPC) that operate in ways similar to an independent foundation. The NPCs are located in proximity to clinical investigators at the major VHA medical centers.

“In both cases, it’s an arms-length financing arrangement that limits the possibility of conflicts of interest,” says Bever.

ORD acknowledges that the onus is on biopharma companies to take the initiative in seeking out a partnering deal

©2017 Informa Business Information, Inc., an Informa company

with the VA. In that regard, it’s often hard for executives to know where to start.

Another issue is negotiation of a CRADA for industry-sponsored trials is typically required for each trial location, which in effect means drafting multiple CRADAs to support a single multicenter investigation. The National Association of VA Research and Education Foundations, the VA Non-Profit Office and the VA General Counsel, working with private industry, have developed model agreements for basic scientific research, data collection, material transfer, exclusive and nonexclusive licensing agreements, PhaseIV clinical trials, principal investigator initiated research and investigational device studies. “In effect, it’s a group of master CRADAs covering all elements of a project. Standardizing this approach will pay a large dividend in terms of speed and efficiency,” Ramoni told In Vivo. “It’s another of my priorities for 2017.”

April 2017 | In Vivo | 15

invivo.pharmamedtechbi.com

BIOPHARMA DEAL-MAKING ❚

❚ BIOPHARMA DEAL-MAKING Her message to In Vivo readers is that partnering with industry is done for the best of reasons: to get emerging treatments to the patient, as quickly as possible.

Another outreach project is building a publicly accessible database covering the activities of ORD’s in-house and contracted researchers and their specific areas of expertise. “The goal is if industry or another external stakeholder is looking for an investigator with clinical trial experience in MS, then you could check the database and quickly find someone to reach out to,” Atkins said. The database project has been contracted out but has encountered some technical glitches that ORD is trying to work out. The hope is this tool will also be ready sometime this year.

invivo.pharmamedtechbi.com

2016 Industry Day: PTSD Is Tops Atkins says an easy way for biopharma to assess the VA partnering landscape is to participate in ORD’s annual “Industry Day.” The most recent, held in September 2016, brought nearly a dozen biopharma companies together with ORD senior staff to present their views on PTSD and review the current state of play, with the aim to determine how company participation might advance the development of more effective treatments. The discussions, which included the participation of executives from Janssen Pharmaceuticals Inc., Otsuka America Inc. and Shire PLC, helped drive the decision to launch the PTSD Psychopharmacology Initiative to conduct studies on new drugs to help veterans in coping with the condition, using data from the MVP and other clinical information sources in the ORD network.

(See sidebar,”Partnering With The VA: Otsuka’s Opt-In Agenda.”)

The first step is crafting a series of protocols to help structure the research partnering. A RFP document was tabled on December 20, 2016, calling for applications to initiate and/or participate in clinical studies, from industry as well as qualified VA investigators. Reviews are now underway. The potential of the anesthetic drug esketamine, now being tested separately for treatment of suicidal behavior during major depressive episodes, for application against PTSD as well, is but one of many opportunities being considered. “This kind of drug-related 16 | In Vivo | April 2017

❚ PARTNERING WITH THE VA: OTSUKA’S OPT-IN AGENDA To obtain a clear-eyed view of the current state of partnering between biopharma companies and the VA, In Vivo spoke with John Bardi, vice-president of government affairs for Otsuka America Pharmaceutical Inc. Otsuka, a key player in the CNS therapeutic space, is interested in the potential of tie-ups between its research operations and the VA’s ORD division. In doing so, the company emphasizes the importance of addressing two logistical factors close to the heart of every innovative drug developer: quality and speed.

In Vivo: What should the VA do to improve the scope and mutual value of a research partnering arrangement with the biopharmaceutical industry?

Bardi: The VA should consider evaluating its internal processes that have created longstanding hurdles in working with the R&D arms of the industry. Clinical trials are time-consuming and expensive, and failure rates are not uncommon. A re-tooled VA research ecosystem providing greater speed and efficiency in the following areas – agreement terms and conditions, institutional review board (IRB) policies, data and patient evaluation procedures, and clinical trial execution – would go a long way to improve the scope and mutual value of research collaborations with the industry. It also must be kept in mind that private sector companies must, for a variety of reasons, meet their planned action dates, financial targets and filing obligations. Quality and speed go hand in hand. That’s the perspective the VA should take into account in considering its partnering procedures.

What do VA and the biopharma companies bring to the table?

For certain, the VA brings an enormous patient population to support clinical trial design across myriad disease states. Otsuka, for example, is and will continue to be focused on neurological diseases and conditions as well as mental illness, and in doing so we recognize the behavioral health program in the VA system is itself very large. As a result, the VA is well positioned to support clinical trial efforts in areas like serious mental illness, post-traumatic stress syndrome and traumatic brain injury. From what I am beginning to better understand, the enormity and comprehensive nature of the VA clinical data sets would be of significant interest to the biopharma industry. It complements our own unmatched level of research and clinical development expertise as well as the financial and human capital resources that can be applied to address the unmet medical needs of the nation’s veterans.

research is a complement to the predictive tools we have developed separately, through big data applications, to identify veterans at highest risk of suicide. The tools are now being applied directly at the clinical level – another example of how we traverse the divide between research and practice,” Atkins said.

Overall, both the VA and many in industry are convinced the time is right for industry to reach out to the veteran community and its researchers to create new precedents in advancing mental health. The VA now has a high-profile in

that it’s seen as one area where bipartisan cooperation around policy is still possible. Shulkin, a recognized independent innovator in quality care delivery and Trump’s only cabinet-level holdover from the Obama era, can work both sides of the aisle in Congress – a good credential for biopharma’s own efforts to keep R&D in medicine focused on the patient, not politics.

IV005064 Comments: Email the author: William.Looney@Informa.com invivo.pharmamedtechbi.com

❚ BIOPHARMA MARKETS

Financial markets – the people and institutions that lend companies money and estimate their worth – see pharma companies as revenue-generating, profit-sharing black boxes. Growth earns companies a break from this simplistic view, but sooner or later market valuations of pharmas seem to regress to a mean based on revenue multiples. That mean is getting meaner.

BY JOHN HODGSON The markets ride pharma harder these days. Profits are 5% down as a percentage of revenue compared with 15 years ago.

And yet pharma pays investors back 13¢ on the dollar in dividends, and another 6¢ on the dollar in stock buybacks.

invivo.pharmamedtechbi.com

To maintain growth, pharma is borrowing more from the market – the industry’s long-term debt now is the same as its revenue, up from 20% at the turn of the millennium.

So what? While debt can accelerate growth, too much can catalyze collapse.

Markets tend to ignore debt until something goes wrong. Then they treat it as an encumbrance and start downgrading company valuations.

Valeant has fallen; who’s next?

24 | In Vivo | April 2017

F

or people close to it the pharmaceutical industry can appear rather complicated. Its arcane traditions and regulatory complexity woven with the mysteries of research and development and the black arts of marketplace survival create challenging intricacies in the mechanics of running a drug company. The products change, the markets change, the competition moves ahead, rule tweaks favor one company over another, developments falter and different leaders try to adjust the picture to the best of their ability.

Debt: Markets Giveth And Markets Taketh Away The financial markets – and the people who operate in them – represent one of pharma’s most important dependencies, one that has increased markedly in recent years. For a start, pharma has been borrowing a lot more money lately.

Long-term debt carried by pharmaceutical companies has increased significantly.

Consider the longstanding residents of pharma’s top tier, firms such as Pfizer Inc., Merck & Co. Inc., Sanofi, AstraZeneca PLC, Amgen Inc., Eli Lilly & Co. and BristolMyers Squibb Co., businesses that were in the pharma top 20 both now and back in 2000. In 2000, for every $1 of revenue these big pharma companies made, they were carrying about 13¢ in long-term debt; by 2016 that ratio was five times higher at 70¢ per $1 of revenue.

For emergent companies such as Teva Pharmaceutical Industries Ltd., Mylan NV, Endo International PLC, Allergan PLC, Valeant Pharmaceuticals International Inc. and Shire PLC, debt is an even more important mechanism in propelling growth: in 2016, the mean long-term debt for these six generic and specialty companies was nearly double their revenue levels ($1.95 debt for every $1 in revenue; range $1.4–$2.9). (See Exhibit 1). invivo.pharmamedtechbi.com

Shutterstock: vladwel

Regression To The Meanest: How Markets Value Pharma Stocks

The Market’s Model Of Pharma Is Simple For all the asset-by-asset net present valuation spreadsheets circulated by brokerage firms, the way in which traders attribute value to pharmaceutical companies is shockingly straightforward. Analysts may factor in launch programs and the impact of timing and competition, but those who invest in drug company stocks reckon there is a linear relationship between annual product revenue and the valuation (market capitalization).

In other words, despite flowery rhetoric, markets calculate pharma’s value by multiplying its revenues by a constant factor. (See Exhibit 2.)

The evidence for this is shown in Exhibit 2a, which for 18 different top-tier drug companies over a 16-year period shows the correlation between market capitalization and revenue. The strong linear relationship between the revenue and its market capitalization is clear.

The consistency of this relationship may be surprising to those in the industry given that the 18 companies covered take quite different approaches to their pharma businesses. (See sidebar,

Exhibit 1

Long-term Debt As A Percentage Of Big Pharma Revenue Has Risen Steadily Since 2000 LONG-TERM DEBT AS A PERCENTAGE OF REVENUE Generic & Specialty Pharma

220 200 180 Percentage Of Revenue

The markets have demanded a greater level of stringency in corporate performance. Among the big pharma companies, average operating profits have fallen from around 27% of revenue in 2000 to 21% of revenue in 2016, and net profits have fallen from 21% of revenue to 16%.

Even as profits have declined, however, the level of dividend paid out to shareholders has risen. For every dollar earned in revenue in 2014–16, established pharma companies on average paid 12.5¢ to shareholders in dividends, compared with 8¢ per revenue dollar back in 2000–02. They also handed over another 6¢ per dollar of revenue by buying back stock from existing shareholders.

Between 2011 and 2016, these seven firms collectively returned $270 billion to equity investors, equivalent to 20% of their combined revenues in that period.

Easing the flow of capital to and from the financial markets is increasingly important in the business of running pharmaceutical companies. So understanding how markets think about pharma is key for any management team.

160 140 120 100 80 60

Major Pharma

40 20 0 2000

2002

2004

2006

2008 Year

2010

2012

2014

2016

The green line shows aggregated figures for Pfizer, Merck & Co., Sanofi, AstraZeneca, Amgen, Eli Lilly and Bristol-Myers Squibb.

The red line shows aggregated figures for Teva, Mylan, Endo International, Allergan, Valeant and Shire.

SOURCE: Company reports

“Why We Examined These Companies.”)

Some focus on generic drugs, others on biopharmaceuticals; some have grown rapidly through acquisition or product development, others have shrunk from past glories; many are headquartered in the US, but many are European (either historically or for tax purposes).

Those operating in the financial markets may be cognizant of and sensitive to this variety of backgrounds, and they may understand that each pharma company is itself a complex web of interacting disciplines organized efficiently to transform new knowledge into clinically effective products in myriad indications. However, when they look holistically, it appears the financial markets see pharma as a cashin, cash-out black box.

Furthermore, the markets’ rough estimate of value for the black box is obtained by multiplying product revenues by a constant. For this set of companies over a period of 17 years, that constant is 3.5.

Having said that, an even better fit to the data emerges through two refine-

©2017 Informa Business Information, Inc., an Informa company

ments of this basic “value equals k times revenue” model.

The first refinement adjusts for “stock market sentiment,” the openness or otherwise of the financial markets that broadly influences stock price movement and market capitalization. The NYSE Arca Pharmaceutical Index (DRG) is a decent measure of pharma-specific sentiment and indexing for DRG takes much of the fluctuating “market sentiment” toward the pharma sector in general out of the equation. DRG-indexed market capitalization data plotted against revenue are shown in Exhibit 2b.

Two things are apparent from Exhibit 2b. First, the data are tighter: the correlation between sentiment-adjusted market capitalization and pharma revenue is stronger than in Exhibit 2a.

Second, the data split according to the time period involved. In 2007 or before (green circles), market capitalization valuations are more generous relative to revenue. With some exceptions, the green circles are above the line of best fit; the red circles representing postApril 2017 | In Vivo | 25

invivo.pharmamedtechbi.com

BIOPHARMA MARKETS ❚

❚ BIOPHARMA MARKETS Exhibit 2

Pharma Revenue Is The Major Determinant Of Market Value REVENUE MEANS MARKET CAP: ADJUST FOR MARKETS, ADJUST FOR 2007 C

Market Cap

Revenue

Market Cap/DRG

B Market Cap/DRG

A

Revenue ∙ All Years

∙ 2007 And Before

Adjusted Revenue ∙ 2008 And After

invivo.pharmamedtechbi.com

Data shown are based on annual average market capitalization and annual revenue figures for Pfizer, Merck & Co., Sanofi, AstraZeneca, Amgen, Eli Lilly, Bristol-Myers Squibb, Teva, Mylan, Endo International, Allergan, Valeant, Shire, Gilead, Biogen, CSL Behring, Novo and Celgene between 2000 and 2016.

In Panel A, Market Cap is plotted against Revenue; in Panel B, Market Cap is indexed against the Arca Pharmaceutical Index to adjust for general market fluctuations; in Panel C, Revenue is adjusted to reflect the apparent market’s reevaluation after 2007.

SOURCE: Company reports

recession valuations, on the other hand, tend to be below that line.

A second refinement, shown in Exhibit 2c, shows an even tighter fit of the revenue and valuation data. Exhibit 2c applies different values to the multiplier: up to 2007, the value of k in the “market cap = k times revenue” equation was around 5; after 2007, it was closer to 3.

That bifurcation of data suggests that the market view of the value of pharmaceutical company revenues flipped, or at least evolved, after 2007. (See Exhibit 2.)

This is still a very simple model of pharmaceutical company value.

What caused the financial markets to adjust their implicit formula is unclear.

It could have been the general economic turmoil that accompanied the global economic recession of 2008–09. Barack Obama’s presidency and the extended (and continuing) tussle over the Affordable Care Act may have caused investors to reassess the value of pharma revenue streams. The Pfizer-Wyeth and Merck-Schering-Plough megamergers may have highlighted the paucity of pipelines at big pharma and spooked investors. The impending loss-ofexclusivity of Pfizer’s Lipitor (atorvastatin) may have contributed, too.

The flip that occurred after 2007 illustrates that although the hand of the market may be invisible, its collective mind can change. Not only that, it is possible to measure the change. In this case, 26 | In Vivo | April 2017

the data suggest that until 2008, those in the financial markets considered a drug company’s valuation to be about five times its product revenue; after that, the multiplier fell to around three.

Established Pharma It turns out, perhaps surprisingly, that market views of individual company valuation also largely adhere to a simple revenue-multiple model. This is illus-

When pharma is not working properly, the markets want to look inside the black box.

They do not always like what they find.

trated in the following sections: valuations derived from revenues compare closely to actual market capitalization based on stock price across a range of drug companies.

What is also clear is that the market view of individual companies can also be inflated by indefatigable optimism about the future or spooked by apparently unexpected business factors, such as the accumulation of debt.

Why debt accumulation is an unexpected factor for financial markets is itself a mystery, given that the numbers are right there in the annual and quarterly reports, and that it is financial markets that do the money-lending.

The previous sections imply that to a first approximation the financial markets have a one-size-fits-all model for valuing companies in the pharmaceutical industry. In the following section, data from individual companies demonstrate that this claim holds largely true for wellestablished companies and fast-growing companies in generics. For specialty pharma and biotherapeutics firms, the markets make other adjustments.

Exhibit 3 looks at seven established top-tier pharma firms: Amgen, AstraZeneca, Bristol-Myers Squibb, Eli Lilly, Merck & Co., Pfizer and Sanofi.

There is a large degree of agreement between the actual and modeled data for all companies except Amgen. In other invivo.pharmamedtechbi.com

Exhibit 3

Exhibit 4

Market’s Model Fits Big Pharma

Debt Is A Factor For Generic But Not Specialty Companies

Major Pharma

A. Generics

Amgen

AstraZeneca

B. Specialty pharma

Endo

Allergan

Mylan

Shire

Teva

Valeant

BMS

Eli Lilly 2000

2016

2000

2008

2016

Each panel shows the fit between the multiple-of-revenue model of company valuation (green) and market capitalization based on stock price (red). The model used applies a 5x multiple of revenue until 2007 and a 3x multiple after that. Actual market capitalization is adjusted for general market fluctuations using the DRG Arca Pharmaceutical Index. In addition, a third orange line shows the multiple-of-revenue model adjusted for the level of long-term debt a company carries.

SOURCE: Company reports

Merck & Co

Pfizer

Sanofi

2000

2008

2008

2016

Each panel shows the fit between the multiple-of-revenue model of company valuation (green) and market capitalization based on stock price (red). The model used applies a 5x multiple of revenue until 2007 and a 3x multiple after that. Actual market capitalization is adjusted for general market fluctuations in the DRG Arca Pharmaceutical Index.

SOURCE: Company reports

words, if you take out the vicissitudes of general market sentiment, the markets’ assessment of the worth of these established pharma companies is based almost wholly on the value of drugs they sell.

Some temporary and company-specific departures are apparent. For instance, the unwinding of the Vioxx (rofecoxib) scandal in 2004 pushed Merck’s actual market value below that estimated from its sales. Similarly, the tide of rising Lipitor sales propelled Pfizer’s traded value upwards in the early 2000s.

But in general, a revenue-multiple model accounts for most of the variation in market capitalization values for big pharma.

In Amgen’s case, the financial markets remain generous in their assessment of the company’s value. Its market capitalization over the last decade approximates to a four-fold multiple of sales rather than the three-fold multiple that appears to

©2017 Informa Business Information, Inc., an Informa company

apply to other established firms, perhaps reflecting the more robust exclusivity of its biologics portfolio. Even a four-fold multiple is a significant drop from the eight- to 10-fold multiples the company attracted in the inflated post-genomic biotech bubble.

Generics And Specialty Pharma The relationship between indexed market capitalization and value calculated solely from revenues largely holds for the fastgrowing generics and specialty pharma companies in this sample. (See Exhibit 4.)

As with the established pharma companies, there is one exception.

Exhibit 4 shows similar data to Exhibit 3 but for three generics companies: Teva, Endo and Mylan (Exhibit 4a), and three specialist pharmaceutical companies: Allergan, Shire and Valeant Pharmaceuticals (Exhibit 4b).

For the generics companies, there is a reasonable fit between the actual market April 2017 | In Vivo | 27

invivo.pharmamedtechbi.com

BIOPHARMA MARKETS ❚

❚ BIOPHARMA MARKETS capitalization (adjusted for general market fluctuations – red line) and a value for market capitalization calculated from revenue alone (green line).

However, for the generics companies there is a better fit if the calculated value includes a downgrade for the level of debt that a company is carrying.

This is clearest for Mylan, where the gap between actual and calculated values is closed when debt is brought into the equation.

The improvement in fit when debt is accounted for is also apparent for Endo International: the market had inflated Endo’s value following its major acquisitions of Auxilium Pharmaceuticals Inc. and Par Pharmaceutical Inc. (in addition to acquisitions of a string of private companies), apparently happy to add the company’s gains in goodwill and intangible assets to its value and to ignore the concomitant uptick in its liabilities.

But when Endo warned of a drop in forecast revenue and profit in February 2016, investors quickly became more aware of both the very large level of debt that the company was carrying and the fragile value of the goodwill it had acquired. Its stock price fell from over $50 at the end of February to under $15 in May. Its price and market value have continued to fall in 2017.

For generics companies, the market seems to recognize (eventually) that debt can reduce value, even when accompanied by gains in assets, and especially so if those assets are as ephemeral as goodwill and intangibles.

Making adjustments for debt doesn’t seem to be an automatic process in making assessments of corporate value, even when debt is prominent on a company’s balance sheet. In fact, if you are a specialist pharma that has plied investors with a convincing growth-adds-value story, debt seems almost irrelevant to valuation. This is surprising, given what has happened to Valeant in the past year and a half.

invivo.pharmamedtechbi.com

The Valeant Example The descent of Valeant’s stock has been well documented – from a market cap of nearly $90 billion in the summer of 2015 to $9 billion less than a year later and now to under $4 billion. But the accumulation of debt began long before the market took note.

28 | In Vivo | April 2017

For fiscal year 2010, Valeant reported long-term debt of $3.7 billion in the context of revenues of $1.2 billion, a ratio of 3:1. No one seemed to mind. But in 2015, Valeant’s position of carrying $30 billion in debt against revenues of $10 billion suddenly became untenable. Lots of questions were asked even though the debt-to-revenue ratio was identical five years earlier. Perhaps scale matters.

As Exhibit 4b shows, accounting for debt would have attributed a value to Valeant of roughly zero from 2010 onward, a value that is much closer to the market’s current best estimate than the blinded optimism investors actually displayed throughout 2010–15.

Learning a lesson from the Valeant experience, investors could monitor closely the manner in which another specialty company, Shire Pharmaceuticals, handles its newly assumed debt. Since 2009, and even before then, Shire’s long-term debt has been relatively small – equivalent to a third or a quarter of its revenue. But to acquire Baxalta Inc., Shire assumed a debt level in 2016 equivalent to nearly twice its revenue.

Investors should be watching to ensure Shire manages to pay down that mountain.

As Exhibit 4b shows, the markets apparently continue to attribute value to Shire based solely on revenue. If Shire can tackle its debt burden, and if former-Baxalta revenues hold up in their new corporate surroundings, this may prove valid; if not, a correction for debt might be needed.

Allergan, too, is a company that investors may need to watch closely. Its market valuation has already fallen to two-thirds of its value at the point when a tax-propelled merger with Pfizer seemed likely.

But the market still values Allergan at a considerable premium to the formula it applies to pharma companies in general.

Allergan’s March 2017 market capitalization was around $80 billion, not 3 times its reported revenue for 2016, but 5.5 times. And the company still had nearly $33 billion in long-term debt.

The apparently optimistic outlook on Allergan may last if the company continue to pay off its debts.

Biopharmaceuticals And Biotechnology A simple revenue-multiple model of pharmaceutical company value appears to apply also for high-growth biophar-

Exhibit 5

The Sunny Side Of Biopharmaceuticals Biopharmaceutical Biogen

Celgene

CSL Behring

Gilead

Novo

2000

2008

2016

Each panel shows the fit between the multiple-of-revenue model of company valuation (green) and market capitalization based on stock price (red). The model used applies a 5x multiple of revenue until 2007 and a 3x multiple after that. Actual market capitalization is adjusted for general market fluctuations in the DRG Arca Pharmaceutical Index.

SOURCE: Company reports invivo.pharmamedtechbi.com

maceutical firms, although not at the multiples that apply to other companies.

Exhibit 5 shows the relationship between actual DRG-adjusted market capitalization (red) and a value calculated from revenue (using the same parameters as elsewhere in this article).

It seems that for companies such as Novo Nordisk AS, Gilead Sciences Inc., CSL Behring, Celgene Corp. and Biogen Inc. the market continues to apply a five-times multiplier to revenue (data not shown). The fit between the modeled and actual market capitalization data is reasonably good up to 2007, and then it breaks down after that. That may change, however, as the data for Gilead illustrate.

(See Exhibit 5.)

After Gilead’s revenues from its hepatitis C franchise peaked in 2015, the company’s market capitalization reverted to a three-times-revenue model (the actual and model data in Exhibit 5 are resynchronized).

For Novo Nordisk, it only took an announcement in August 2016 that the company’s dividend would be halved to cause stockholders to re-examine the firm. They reducing the company’s market capitalization from around $145 billion to about $85 billion by the end of the year (although that still implies a revenue multiplier of four).

And, as Exhibit 5 shows, the downturn

in Biogen’s market capitalization in 2015 and 2016 associated with the discussion of health care costs in the run-up to the US presidential election brought it much closer to a three-times-revenue value.

Take-home Lessons It seems that although investors may want to put their money to work in ways that are interesting and ethical, they care for the intricacies of pharmaceutical industry mechanistics only to the extent that they influence financial outcomes. For them, pharma is not an R&D machine that develops products that can be sold to health care systems to help patients, it is a black box that when working properly converts equity and debt investments into value creation and financial returns.

As long as the black box works properly, the financial markets take an unexciting but benign view that the value of a drugs company should reflect a multiple of its product sales.

When something is not working properly – signaled perhaps by profits or revenue warnings, or by an expectedly low dividend payment – the markets may want to look inside the black box. Sometimes they don’t like what they see.

IV005073 Comments: Email the author: John.Hodgson@Informa.com

❚ WHY WE EXAMINED THESE COMPANIES

Several groups of companies are included in this analysis: Pfizer, Merck & Co., Sanofi, AstraZeneca, Amgen, Eli Lilly and BristolMyers Squibb represent companies that have been among the top 20 firms in pharma by revenue from 2000 to 2017. Abbott Laboratories, Roche, Bayer, GlaxoSmithKline, Novartis and Johnson & Johnson were not included because their substantial diagnostic, medtech, ophthalmic, agriculture and consumer health activities complicate estimations of market capitalization. Takeda was not included because some historical data were not available.

Teva, Mylan, and Endo International were included as rapidly growing generic pharmaceutical companies.

Allergan, Valeant and Shire were included as rapidly growing specialist medicine companies.

Gilead, Biogen, CSL Behring, Novo and Celgene were included as rapidly growing biopharmaceutical firms.

LET’S GET

SOCIAL

We are tweeting, chatting, liking and sharing the latest industry insights and analysis from our global team of editors and analysts, join us!

In Vivo

Pharma intelligence |

©2017 Informa Business Information, Inc., an Informa company

@INVIVOnow April 2017 | In Vivo | 29

invivo.pharmamedtechbi.com

BIOPHARMA MARKETS ❚

❚ DEAL-MAKING

❚ Deal-making Covering deals made March 2017

Derived from Strategic Transactions, Informa’s premium source for tracking life sciences deal activity, the Deal-making column is a survey of recent health care transactions listed by relevant industry segment – In Vitro Diagnostics, Medical Devices, Pharmaceuticals, and Research, Analytical Equipment and Supplies – and then categorized by type – Acquisition, Alliance, or Financing.

Strategic Transactions is updated daily with in-depth deal analysis, structural and financial terms, and links to SEC-filed contracts.

For information about access please contact Customer Care at 800-332-2181 or ibislsales@informa.com

❚ IN VITRO DIAGNOSTICS Financings

Biocept nets $8.7mm through private stock sale CareDx enters new $25mm debt agreement

❚ MEDICAL DEVICES Mergers & Acquisitions

Fosun Pharma takes 80% stake in Breas from PBM Capital

Alliances

AFT gets exclusive rights to sell Novaliq’s NovaTears in Australasia

Financings

Public device firm Corindus raises $45mm privately Surgical device company Invuity enters into debt agreement for up to $50mm Medigus brings in $7.5mm via follow-on Merit Medical nets $137.4mm via FOPO Penumbra nets $93mm via FOPO Presbia grosses $10.8mm via rights offering Second Sight Medical nets $19.7mm via rights offering Tandem Diabetes Care nets $21mm via FOPO

IntelGenx scores exclusive rights to Lilly’s tadalafil dosing patent

Alliances

Nippon Shinyaku gains exclusive Defitelio, Vyxeos rights from Jazz

Alexion licenses Arbutus’ LNP technology for rare disease compound development

Mayne acquires US rights to Par’s generic fentanyl patch

Allergan gets option to CRISPR-based ocular programs from Editas

Takeda and partners form joint venture Scohia Pharma

AMO options RaNeDis’ rare disease candidate RND001

Menarini gets rights to Melinta’s delafloxacin in 68 countries

X-Chem signs drug discovery deal with Astellas

Menarini gains exclusive global rights to Selvita’s PIM/FLT3 inhibitor for cancer

Circassia gets US rights to AZ’s Tudorza, Duaklir BerGenBio and Merck enter trial collaboration for lung and breast cancers Biocodex licenses French rights to Neurim’s PedPRM Breath licenses Pari’s drug/device combo product Bruno to sell Orexigen’s Mysimba in Italy

Numab and Ono to develop multispecific immuno-oncology antibody OncBioMune agrees to acquire Mexican rights to norepinefrine from Teva Ono and X-Chem sign DEX deal; Ono options resulting oncology candidates Purdue start-up Resarci Therapeutics grants Xynomic Chinese rights to cancer therapy

NewLink/BlueLink take over rights to Cerulean’s conjugates as Cerulean merges with Dare

Mylan settles trastuzumab patent fight with Roche to pave way for biosimilar

Valeritas Holdings nets $49.6mm via follow-on

Exeltis licenses Spanish rights to Neurim’s PedPRM

Visioneering Technologies raises $25.4mm via IPO on Australian exchange

Daiichi, Heptares join forces to discover GPCR pain compounds

FOPO brings in $32.3mm for Viveve

Nippon Shinyaku licenses AML candidate from Delta-Fly Medison gets rights to sell Diurnal’s adrenal insufficiency drugs in Israel

BioLineRx expands immuno-oncology pipeline through Agalimmune buy

Fuji licenses Japanese, ASEAN rights to Mithra’s Donesta menopause candidate

Dare Bioscience acquires Cerulean in reverse merger

Pierre Fabre licenses Hill Dermaceuticals’ Tolak

44 | In Vivo | April 2017

PureTech creates resTORbio subsidiary to in-license Novartis aging-related programs

Oncolytics and Celgene study combination therapy for myeloma

Medical device company Titan Medical nets $5.2mm in overnight FOPO

Mergers & Acquisitions

Marathon divests DMD drug Emflaza to PTC

Brill to distribute Alimera’s Iluvien in Spain

Cerulean sells Dynamic Tumor Targeting platform to Novartis prior to acquisition by Dare

❚ PHARMACEUTICALS invivo.pharmamedtechbi.com

Luc Therapeutics acquires Ataxion for ion channel ataxia program

Vernalis and Servier’s next tie-up: two years, €2mm up front Supernus announces settlement with Teva’s Actavis Generics for marketing of generic Trokendi XR

Financings

Adaptimmune closes $56mm public ADS sale Now-public Aerpio Pharmaceuticals raises $40mm privately Anthera nets $14.1mm through public stock sale Aurinia nets $162.7mm through public offering Public offering nets $14mm for Aveo invivo.pharmamedtechbi.com

Axsome nets $13.2mm in FOPO Follow-on offering nets $64.9mm for Bellicum BeyondSpring completes $3.2mm IPO BeyondSpring nets $47mm through PIPE concurrent with IPO closing BioCryst nets $42.3mm via FOPO Blueprint Medicines follow-on offering nets $188mm Public offering nets $75.7mm for Calithera Capnia raises $9.6mm concurrent with closing Essentialis merger Cara Therapeutics nets $75.3mm in FOPO Cell therapy company Cesca Therapeutics enters into $5mm revolving line of credit with Boyalife Curis to pay off new loan with Erivedge royalties Dicerna secures $70mm in convertible stock financing Genome editing company Editas Medicine nets $84.6mm in FOPO Fibrocell nets $7.7mm through PIPE

❚ IN VITRO DIAGNOSTICS Financings BIOCEPT INC. Biocept Inc. (blood-based molecular diagnostics for solid tumors) netted $8.7mm through the sale of 4.3mm common shares at $2.15 (a slight discount) to institutional investors. The placement included fiveyear warrants to buy another 2.16mm shares at $2.50. Roth Capital Partners, WestPark Capital, and Chardan Capital were the placement agents. (Mar.) Investment Banks/Advisors: Chardan Capital Markets; Roth Capital Partners; WestPark Capital Inc. CAREDX INC. CareDx Inc. (noninvasive transplant diagnostics) entered into a $27.78mm (net $25mm) long-term convertible notes agreement with an undisclosed institutional investor, which provided the entire $25mm up front. The notes mature on February 28, 2020, carry an interest rate of 9.5% per year (payable annually), and convert into common at $4.56. (CareDx’s shares averaged $2.27 at the time of the transaction.) Craig-Hallum was the placement agent. (Mar.) Investment Banks/Advisors: Craig-Hallum Inc.

Heat Biologics nets $3.72 via FOPO Akcea files for IPO

❚ MEDICAL DEVICES

Kadmon raises $23mm in PIPE

Mergers & Acquisitions

Kite nets $347.9mm through public stock sale

FOSUN INTERNATIONAL LTD. Shanghai Fosun Pharmaceutical Group Co. Ltd. BREAS MEDICAL AB Shanghai Fosun Pharmaceutical Group Co. Ltd. paid PBM Capital $90mm for an 80% stake in Swedish device firm Breas Medical AB. (Mar.) Breas was founded in 1991 and provides a comprehensive suite of respiratory medical devices ranging from CPAP sleep apnea machines to homecare life support ventilation devices. Its products are sold in Europe and the US and Fosun now plans to bring them to the Chinese market.

Post-transaction, PBM Capital will remain a partner with Fosun and work together with management to expand Breas. PBM

Pharmaceutical company La Jolla nets $117.5mm in FOPO RDO nets Northwest Biotherapeutics $6.9mm Oryzon Genomics raises €18.2mm in common stock PIPE Prothena nets $150.5mm in FOPO TG Therapeutics nets $47mm through public stock sale Tonix brings in $7.4mm through FOPO Public offering nets $37.8mm for Vital Therapies

©2016 Informa Business Information, Inc., an Informa company

Capital Group acquired Breas from GE Healthcare in February 2014.

Alliances AFT PHARMACEUTICALS NOVALIQ GMBH Novaliq GMBH licensed AFT Pharmaceuticals exclusive rights to commercialize NovaTears in Australia and New Zealand.

(Mar.) AFT will pay Novaliq undisclosed money up front as well as sales royalties. Created using Novaliq’s EyeSol technology, NovaTears is a water- and preservativefree topical eye drop for evaporative dry eye disease. The droplet supports the lipid layer by forming a thin and smooth protecting film to prevent tear evaporation and relieve dry and irritated eyes.

The product is classified as a Class II medical device. Under an October 2015 deal, URSAPHARM sells the product in Europe under the name EvoTears.

Financings CORINDUS VASCULAR ROBOTICS INC. Cardiovascular device maker Corindus Vascular Robotics Inc. raised $45mm through the private placement of 68mm common shares at $0.66 per share (a 10% premium) to new investors Boston Scientific, BioStar Ventures, Consonance Capital, and Hudson Executive Capital, and returning shareholders HealthCor Partners Management and Royal Philips. The company will use some of the funds for the worldwide commercialization of its recently FDAapproved next-generation CorPath GRX robotic-assisted system for percutaneous coronary intervention. (Mar.) INVUITY INC. Invuity Inc. (minimally invasive surgical devices) entered into a new debt agreement with MidCap Financial for up to $50mm. (Mar.) MEDIGUS LTD. Medigus Ltd. (minimally invasive endosurgical devices) grossed $7.5mm through the public offering of 980k Class A units and 1.16mm Class B units at $3.50. Each Class A unit consists of one American Depositary Share and one five-year Series A warrant to purchase one ADS. Each Class April 2017 | In Vivo | 45

invivo.pharmamedtechbi.com

DEAL-MAKING ❚

❚ DEAL-MAKING B unit consists of one pre-funded warrant to purchase one ADS at an exercise price of $0.01 and one Series A warrant to purchase one ADS. Rodman & Renshaw was the placement agent. (Mar.) Investment Banks/Advisors: Rodman & Renshaw Capital Group Inc. MERIT MEDICAL SYSTEMS INC. Merit Medical Systems Inc. (disposable devices used in interventional, diagnostic, and therapeutic procedures) netted $137.4mm through a follow-on public offering of 5.18mm common shares (including the overallotment) at $28.25 each.

The company plans to use the proceeds to repay debt under its existing credit facility. Last month Merit Medical acquired assets from Catheter Connections and Argon Medical Devices. (Mar.) Investment Banks/Advisors: Bank of America Merrill Lynch; Canaccord Genuity Inc.; Piper Jaffray & Co.; Raymond James & Associates Inc.; SunTrust Banks Inc.; Wells Fargo Securities LLC PENUMBRA INC. Interventional therapies developer Penumbra Inc. netted $92.9mm through the follow-on public offering of 1.3mm common shares at $76 each. The company will use some of the proceeds for R&D activities and potential acquisitions. (Mar.) Investment Banks/Advisors: Bank of America Merrill Lynch; Canaccord Genuity Inc.; JP Morgan & Co.; Wells Fargo Securities LLC PRESBIA PLC Presbia PLC (developer of the Presbia Flexivue Microlens implant for presbyopia) grossed $10.8mm through a rights offering in which shareholders received 0.335297256 subscription rights for every share owned, for a total of 3.6mm shares distributed. (Mar.)

invivo.pharmamedtechbi.com

SECOND SIGHT MEDICAL PRODUCTS INC. Second Sight Medical Products Inc. (implantable visual prosthetics) netted $19.7mm through an oversubscribed rights offering which resulted in the issuance of 13.7mm units priced at $1.47.

Each unit consists of one common share and one five-year warrant to purchase a share at $1.47. The company will use some of the funds for ongoing development of its Argus II retinal prosthesis system for retinitis pigmentosa and dry age-related macular degeneration and for the Orion I visual prosthesis. (Mar.) TANDEM DIABETES CARE INC. Tandem Diabetes Care Inc. (insulin pumps) netted $21.15mm through a follow-on offering of 18mm common shares at $1.25. (Mar.) Investment Banks/Advisors: Oppenheimer & Co. Inc.; Piper Jaffray & Co.; 46 | In Vivo | April 2017

Wedbush PacGrow Life Sciences

❚ PHARMACEUTICALS

TITAN MEDICAL INC. Titan Medical Inc. (minimally invasive medical devices) netted $5.2mm through the sale of 21.467mm units at $Cdn0.35 ($0.26) in a best efforts overnight public offering (each unit consists of one common share and one-half of one common share purchase warrant; each whole warrant is exercisable for one common share at a strike price of $Cdn0.40 for two years). The company will use the offering proceeds to fund development of its SPORT robotic surgical system for minimally invasive surgery. (Mar.) Investment Banks/Advisors: Bloom Burton & Co.

Mergers & Acquisitions

VALERITAS HOLDINGS INC. Valeritas Holdings Inc. (devices for diabetes) netted $49.6mm through a follow-on public offering of 5.25mm common shares priced at $10. The company will use some of the proceeds for ongoing commercialization of its V-Go wearable insulin delivery device, to expand its sales and marketing infrastructure, and for R&D and manufacturing activities. (Mar.) Investment Banks/Advisors: B. Riley & Co. LLC; Cowen & Co. LLC; Roth Capital Partners; Wedbush PacGrow Life Sciences VISIONEERING TECHNOLOGIES INC. US-based ophthalmic firm Visioneering Technologies Inc. (VTI) raised $25.4mm (A$33.3mm) through its initial public offering on the Australian Securities Exchange. The company issued 79.4mm CHESS Depositary Interests, each representing one share of Class A common stock, at $0.32. (Mar.) VIVEVE MEDICAL INC. In a public offering of 8.625mm shares (including the overallotment) at $4, Viveve Medical Inc. (radiofrequency women’s health device) netted $32.3mm.

Viveve’s Geneveve noninvasive RF system is cleared in 48 countries for vaginal laxity or sexual function indications, but in three countries (including the US), it is approved only for use in general electrocoagulation and hemostasis surgical procedures. The company will use the proceeds to support R&D, including new RF consoles and cooling systems; clinical trial and regulatory costs for nextgeneration devices in development; and sales and marketing expenses related to commercialization of products in existing markets. (Mar.) Investment Banks/Advisors: Cowen & Co. LLC; Ladenburg Thalmann & Co. Inc.; Raymond James & Associates Inc.

BIOLINERX LTD. AGALIMMUNE LTD. BioLineRx Ltd. enhanced its immunooncology pipeline through the acquisition of privately held cancer drug development company Agalimmune Ltd. BioLineRx paid $3mm in cash and issued $3mm of its restricted American Depositary Shares; the deal also includes undisclosed earn-outs for development and sales achievements. (Mar.) UK-based Agalimmune was formed in 2013 and is developing its lead compound AGI134, which it in-licensed from UMass, for solid tumors. Based on the company’s Alphaject technology, AGI134 is a fully synthetic alpha-Gal glycolipid immunotherapy that is injected directly into a tumor and elicits an anti-tumor response specific to a patient’s own neo-antigens.

The treatment serves a dual purpose, killing off cancer cells immediately and launching an anti-metastatic response to protect against recurrence or cancer spread. BioLineRx, which is already developing its own Phase II cancer candidate BL8040 (alone and in combination with various immunotherapies under trial collaboration agreements), plans to have AGI134 in Phase I trials during the first half of 2018.

DARE BIOSCIENCE INC. CERULEAN PHARMA INC. Public biotech Cerulean Pharma Inc. (nanoparticle drug delivery) is reversemerging with private women’s health start-up Dare Bioscience Inc. to create a female reproductive health-focused company. (Mar.) Since earlier this year, Cerulean has cut its workforce and has been evaluating its strategic options to maximize stockholder value following a third quarter 2016 report that a Phase II trial of CRLX101 in combination with Genentech’s Avastin (bevacizumab) in third and fourth line metastatic renal cell carcinoma didn’t meet its endpoint (and prior to that failed a 2013 lung cancer study). Concurrent with this transaction with Dare, Cerulean sold off CRLX101 as well as CRLX301 (its other oncology asset) to NewLink Genetics’ subsidiary BlueLink Pharmaceuticals for $1.5mm.

Cerulean also divested its Dynamic Tumor Targeting nanoparticle drug delivery technology platform to Novartis for $6mm. The proceeds from these divestments will enable Cerulean to pay off existing debt owed to Hercules Capital.

The newly combined public company-which will be between 51-70% owned

by Dare shareholders; named Dare Bioinvivo.pharmamedtechbi.com

science; retain the start-up’s San Diego headquarters; led by Sabrina Martucci Johnson (Dare’s current CEO); and take over Cerulean’s listing on Nasdaq--will focus on the development and commercialization of products for women’s reproductive health. Dare is developing Ovaprene, a non-hormonal, intravaginal contraceptive ring designed to continuously release non-drug spermiostatic and spermicidal agents over a fourweek period. The silicone ring-based delivery system was previously under development by Poly-Med (bioresorbable polymer-based devices and delivery systems), which first filed a patent for it in 2004, and private women’s health company Ovatech, which reported a successful Phase II trial in 2010. Dare says the funding associated with the transaction will enable the advancement of Ovaprene through completion of a postcoital proof-of-concept study expected to begin later this year. Investment Banks/Advisors: Aquilo Partners Inc. (Cerulean Pharma Inc.) LUC THERAPEUTICS INC. ATAXION INC. Luc Therapeutics Inc. (formerly Mnemosyne Pharmaceuticals) acquired private orphan CNS disease start-up Ataxion Inc. (Mar.) Ataxion was seeded by Atlas Ventures in July 2013 and concurrently in-licensed all rights to ion channel discovery programs, including one for ataxia in the late lead-optimization stage, from Dutch company Saniona (previously known as Aniona). (Atlas was also a backer of Ataxion’s $17mm Series A round in early 2014, along with Biogen, which through its investment, acquired an option to buy the company. As a result of the current transaction with Luc, this option is no longer valid.) Ataxia is a rare neurodegenerative motor disorder characterized by dysfunction of the cerebellum. Ataxion’s ataxia platform, now in preclinical development, involves potassium channel modulators, which control the function of the cerebellum’s Purkinje cells, necessary for coordination of movement, balance, and speech. Following the merger, Ataxion and Saniona will continue their 2013 collaboration. Saniona will hold a 7.1% ownership in the merged company and maintain royalty rights to resulting marketed products from Ataxia’s program. With a focus on precision medicine for psychiatric and neurological indications, Luc will add the ataxia assets to the two existing candidates already in its pipeline. Luc has a preclinical subtypeselective NMDA receptor negative allosteric modulator for depression, which it’s developing with Novartis under a 2015 collaboration, and a research-stage schizophrenia compound.

Alliances ALEXION PHARMACEUTICALS INC. ARBUTUS BIOPHARMA CORP. Alexion Pharmaceuticals Inc. licensed Arbutus Biopharma Corp.’s lipid nanoparticle (LNP) technology for exclusive use in a single undisclosed Alexion messenger RNA (mRNA) rare disease program. (Mar.) Arbutus’ LNP platform is an RNA interference (RNAi) delivery technology that encapsulates mRNA drug compounds in tiny particles made of lipids called LNPs. Administered intravenously, the LNPs travel through the bloodstream and remain in circulation sufficiently to accumulate at targeted disease sites, where the LNPs are taken up by and migrated into the cell, undergo an interaction within the cell, and release trigger molecules that mediate RNAi. Under the agreement, Arbutus receives $7.5mm up front, $75mm in development, regulatory, and commercial milestones, and single-digit royalties.

Arbutus will provide technology development and manufacturing and regulatory support. Although the specific compound is undisclosed, Alexion’s rare disease pipeline--including complement inhibitors and metabolic and immune-oncology disease candidates--has 10 compounds in clinical development and 30 preclinical programs. Through a 2014 agreement with Moderna Therapeutics, Alexion has the option on up to ten candidates designed using Moderna’s messenger RNA Therapeutics technology.

ALIMERA SCIENCES INC. BRISTOL LABORATORIES LTD. Brill Pharma SL Alimera Sciences Inc. licensed Brill Pharma SL exclusive rights to distribute its sustained-release intravitreal implant Iluvien (fluocinolone) in Spain. (Mar.) Brill Pharma is responsible for promotion, marketing, and commercialization activities in the licensed territory. It will also negotiate on the appropriate confidential net price for reimbursement within the Spanish National Health System, as well as on a price to the public. Iluvien is indicated for diabetic macular edema and designed to gradually release fluocinolone into the back of the eye for up to three years. Alimera has Iluvien partnerships in place with Societa Industria Farmaceutica Italiana (Italy, San Marino, and Vatican City), Knight (Canada), and Specialised Therapeutics (Australia and New Zealand). Alimera originally got the product (formerly Medidur) from pSivida.

ALLERGAN PLC EDITAS MEDICINE INC. Editas Medicine Inc. granted Allergan PLC exclusive access and the option to license up to five of genome-editing ocular programs. (Mar.)

©2016 Informa Business Information, Inc., an Informa company

Included in the agreement is a preclinical candidate for Leber’s congenital amaurosis type 10 (LCA10). Allergan will pay $90mm up front, near-term milestones associated with the LCA10 program, additional development and commercial milestones for other compounds, and sales royalties on a per-program basis.

Should it take the option for the candidates, Allergan is responsible for development and commercialization; Editas has the right to co-develop and co-promote up to two optioned products in the US. In addition to the LCA10 compound, the deal covers early-stage programs Editas discovered with its CRISPR (clustered, regularly interspaced short palindromic repeats) platform, including CRISPR/ Cas9 and CRISPR/Cpf1. Using CRISPR, researchers are able to target nearly any genomic location and potentially repair broken genes. The technology uses a protein-RNA complex composed of either the protein Cas9 or Cpf1, each of which binds to a guide RNA molecule that has been designed to recognize a particular DNA sequence. In August 2016, Editas penned an ophthalmic genome editing deal with Adverum.

AMO PHARMA LTD. RANEDIS PHARMACEUTICALS Rare disease-focused biotech start-ups AMO Pharma Ltd. and RaNeDis Pharmaceuticals will together collaborate to advance the development of RaNeDis’ preclinical RND001 for rare genetic diseases. (Mar.) Developed with technology RaNeDis originally licensed from the University of Notre Dame, RND001 is an inhibitor of the transcriptional enzyme histone deacetylase (HDAC) combined with properties that improve the compound’s ability to remain in the bloodstream longer and enable its targeted delivery to the brain. Blocking HDAC, which is known to play a key role in role in some genetic disorders, can result in increased or decreased expression of mutated genes and deliver benefits related to transcriptional protein modulation. In a mouse model of lysosomal storage disease (LSD) Neimann-Pick Type C, RND001 demonstrated the ability to stimulate the brain’s gene transcription and protein expression activity. RaNeDis believes this formulation is applicable to other rare LSDs (such as Gaucher’s, GM-1 gangliosidosis, and Krabbe’s) and is assessing RND001 in additional disease models. In this collaboration, AMO and RaNeDis will research a range of applications (including certain LSDs and CNS diseases) within rare diseases and AMO gets an exclusive option to acquire global rights to RND001 during the term of the collaboration. Founded just two years ago, AMO’s pipeline already has in development two rare disease candidates, April 2017 | In Vivo | 47

invivo.pharmamedtechbi.com

DEAL-MAKING ❚

❚ DEAL-MAKING AMO02 (tideglusib), in Phase II for myotonic dystrophy and preclinical AMO01 for fragile X syndrome. The current alliance will enable AMO to expand this pipeline, to which it also hopes to add through future licensing partnerships other compounds for CNS disorders (including autism).

invivo.pharmamedtechbi.com

ASTELLAS PHARMA INC. X-CHEM INC. In a multi-year deal, X-Chem Inc. will use its DNA-Encoded X-Chem (DEX) platform to identify leads for complex drug targets of interest to Astellas Pharma Inc. (Mar.) X-Chem will receive a $16mm up front, research funding, and license and option fees. Astellas has the option to license any X-Chem generated compounds and would shell out more than $100mm in development and commercial milestones for each target, plus sales royalties. The DEX library contains over 120bn small molecules, each with a unique DNA barcode attached to it. The deal will involve hard-to-drug targets across various, yet undisclosed, therapy areas. X-Chem has similar partnerships in place with Big Pharmacos including Roche, Pfizer, Bayer, and most recently AbbVie. ASTRAZENECA PLC CIRCASSIA PHARMACEUTICALS PLC Circassia Pharmaceuticals PLC licensed US rights to develop and sell AstraZeneca PLC’s chronic obstructive pulmonary disease therapies Tudorza (aclidinium) and Duaklir (aclidinium/formoterol). (Mar.) Tudorza was launched in the US in 2012; Circassia will initially lead promotion there, with an option to expand to full commercial rights in the future. Duaklir is marketed in the UK, but awaiting approval in the US. Under terms of the deal, AZ took a minority stake in Circassia through the purchase of $50mm shares. AZ could also get $100mm when Duaklir is approved in the US or on June 30, 2019, whichever comes first. If Circassia exercises its option for full Tudorza commercialization rights, it will pay up to $80mm. It will also fund up to $62.5mm of any development costs related to the two therapies, share US profits with AZ equally, and pay tiered sales royalties. The deal helps Circassia maintain focus on its respiratory business and leverages the company’s sales infrastructure in the US, where it plans to double its sales force in an effort to more effectively promote the in-licensed products. Circassia has been attempting to rebound its share price and shareholder confidence following the failure last year of a key cat allergy project Cat-SPIRE, which was the company’s lead pipeline project before it missed the primary endpoint in a pivotal Phase III trial.

48 | In Vivo | April 2017

BERGENBIO ASA MERCK & CO. INC. BerGenBio ASA and Merck & Co. Inc. will together evaluate a combination of BerGenBio’s BGB324 with Merck’s Keytruda (pembrolizumab) for lung and breast cancers. (Mar.) BGB324 is an Axl receptor tyrosine kinase inhibitor in Phase II trials for non-small cell lung cancer, Phase I for acute myelogenous leukemia and myelodysplastic syndrome, and preclinical studies for pancreatic cancer. Keytruda, a PD-1 antagonist, is marketed for melanoma and NSCLC, approved for head and neck cancer, filed for approval for colorectal cancer, Hodgkin’s lymphoma, and bladder cancer, and in over two dozen more trials for various other solid and blood cancers. BerGenBio will conduct two international Phase II trials of the combination--one for patients with previously treated locally advanced or unresectable triple-negative breast cancer and the other for previously treated unresectable adenocarcinoma of the lung.

Rights to the study results will be shared between Merck and BerGenBio. BerGenBio will also conduct biomarker studies in an effort to develop companion diagnostics that can help identify patients who would benefit from the BGB324/Keytruda combo.

BIOCODEX NEURIM PHARMACEUTICALS LTD. Biocodex is again partnering with Neurim Pharmaceuticals Ltd., licensing exclusive marketing rights in France to the latter’s PedPRM (prolonged-release melatonin) insomnia candidate. (Mar.) PedPRM is a pediatric version of Neurim’s marketed insomnia drug Circadin (for patients aged 55 and older), which Biocodex already promotes in France under a 2013 agreement. Phase III PedPRM, intended for pediatric insomnia patients with autism spectrum disorder, is a controlled-delivery formulation that releases melatonin over an 8-10-hour period. Under agreements signed late last year, Kuhnil has South Korean rights and Aspen Pharmacare has a license in Australia and New Zealand.

The addition of PedPRM will boost Biocodex’s offerings in CNS, one of its areas of focus in addition to gastroenterology and otolaryngology. Within CNS, its portfolio includes anti-epileptic Diacomit (stiripentol), anticonvulsant Stresam (etifoxine), and Acupan (nefopam) and Otipax (lidocaine/ phenazone) for pain.

BREATH THERAPEUTICS HOLDING BV PARI PHARMA GMBH As part of its spin off from Pari Pharma GMBH, Breath Therapeutics Holding BV received a Phase III-ready program for bronchiolitis obliterans syndrome (BOS), a deadly respiratory disease which mostly affects lung transplant patients. (Mar.)

The combination product consists of an inhaled formulation of cyclosporine A and eFlow nebulizer for remote adherence monitoring. There is currently no effective therapy for BOS. With the spin-off, Breath raised $46mm in its Series A financing to support Phase III trials of the drug/device in the US and Europe, FDA and EMA regulatory activities, and pre-commercialization.

BRUNO FARMACEUTICI SPA OREXIGEN THERAPEUTICS INC. Orexigen Therapeutics Inc. licensed Bruno Farmaceutici SPA rights to distribute the obesity drug Mysimba (naltrexone HCl/bupropion HCl prolonged release) in Italy. (Mar.) Bruno will handle all commercialization activities and cover related expenses.

Orexigen will supply Mysimba to Bruno for a negotiated transfer price, an up-front payment, and sales milestones. Bruno anticipates launching in Italy in Q4 2017.

The drug is sold in other parts of the world as Contrave. Orexigen has partnerships for the obesity therapy with several firms including Valeant, Biologix FZCo., and Rovi.

CELGENE CORP. ONCOLYTICS BIOTECH INC. Celgene Corp. and Oncolytics Biotech Inc. announced a trial collaboration investigating the combination of Oncolytics’ oncolytic virus therapy Reolysin (pelareorep) together with Celgene’s Imnovid (pomalidomide) or Revlimid (lenalidomide) for relapsing myeloma patients. (Mar.) Reolysin, Oncolytics’ proprietary formulation of the human reovirus (respiratory enteric orphan virus) works by infecting and killing off cancer cells that have activated Ras pathways. The candidate is in Phase III studies for myeloma, and due to its dual modes of action (it is directly cytotoxic and activates immune effector cells to target cancer cells), its efficacy is enhanced when combined with immunomodulatory agents such as Celgene’s Imnovid or Revlimid.

Both of those angiogenesis inhibitors are already on the market for myeloma and in trials for additional blood cancer indications. The Phase Ib combination trial examining Reolysin with Imnovid or Revlimid will target patients who are already on one of the Celgene therapies but whose disease is continuing to progress. The study will recruit 44 patients in up to six Myeloma UK Clinical Trial Network centers in the UK. CERULEAN PHARMA INC. NEWLINK GENETICS CORP. Concurrent with a reverser merger with women’s health firm Dare Bioscience Inc., Cerulean Pharma Inc. divested its two remaining cancer projects to NewLink Genetics Corp. and its BlueLink Pharmaceuticals subsidiary, which paid $1.5mm for the assets. (Mar.) Both candidates were developed using invivo.pharmamedtechbi.com