Transcript What’s Needed for a Successful Biopharmaceutical Business?

VDDI Pharmaceuticals
“Rapidly developing novel drugs for cardiovascular and
infectious diseases”
William Porter
Senior Vice President Business Development, Asia-Pacific
VDDI Pharmaceuticals Inc.
Brentwood, TN USA
June 2003
Bangkok, Thailand
email: [email protected]
June 2003
+ 661 802-9244 (cell)
www.virtualdrugdevelopment.com
VDDI Pharmaceuticals (Asia Pacific)
CONFIDENTIAL
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The material and comments in this presentation
is confidential, proprietary and privileged,
including copyright. Statements made in this
presentation are based on information available
to VDDI, and are presented in the good faith
belief as to their accuracy, but VDDI does not
warrant their accuracy.
June 2003
VDDI Pharmaceuticals (Asia Pacific)
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VDDI
Virtual Drug Development Incorporated
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Chesapeake Business
Center
Suite # 106
1616 Westgate Circle
Brentwood, TN 370278019
Ann Arbor, MI; Kalamazoo, MI;
Huntsville, AL; RTP, NC;
Bangkok, Thailand; Dublin, IR
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Agenda
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Remarks and Assumptions
Business Model
Company Overview
Products in Development
• Medical Peptides
• NADs Inhibitors
• GP IIb/IIIa Inhibitor
Next Steps
Closing Comments
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The Codes for Global Success…
A T C G
Adenine
A
Thymine
T
Cytosine
C
Guanine
G
010101010101010
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VDDI’s Global Goal
To increase knowledge and
commercial value in novel drug
development for life-threatening
indications in the areas of
cardiovascular and infectious
diseases by:
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Using the in-licensing model to fill gaps
Increasing the depth in our portfolio
Out-licensing to maximize the value of
investments
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A Knowledge-driven Global
Economy
Pharmaceutical companies – playing the role
of change agents -- must prepare for the
future and adopt and support technology
– biopharmaceuticals, ICT and
nanotechnology. They must see
themselves as active partners, rather than
passive benefactors, with the stakeholders
they support. If they don’t, they will get a
lot poorer.*
*
Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington
University, Washington, DC
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A 21st Century Approach
VDDI’s focus is in
targeted drugs
(cardiovascular
and infectious
disease) with
effective
treatments aimed
at smaller sets of
patients.
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The Global Reality for
Biopharmaceutical Companies
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Global Biopharmaceutical Pains
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Expiring drug patents
Skyrocketing costs
High rate of clinical failures
Corruption/price-gouging
Product recalls
Litigation (USA & Europe)
Marketing scandals
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The Economic Realities
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Industry losing control of pricing
Generic drugs
Third-party payers – governments &
managed care – are demanding
more value with less expenditures
A trend emerging to shift a fraction
of drug cost to patients (USA) which,
generates a political will to confront
local/national lobby
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This Decade – 2002-2007…
Patents will expire on 35 drugs with
global sales of more than $73 billion.
But…
 Only 14 potential blockerbusters are
likely to be approved and launched
during this period.
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Source: Datamonitor, London & Fortune Biotech, David Stipp, May 27, 2003
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Big Pharma’s Efforts to Date Have
Been in Vain
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Tried substituting marketing muscle
for scientific success
• $1 billion to create “direct-to-consumer”
ads (US)
• Other dubious ploys to bolster sales
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Mergers & cost-cutting
• Temporary boost profits but doesn't
address the underlying problem:
productivity.
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VDDI Adopts an Effective Drug
Development Paradigm
VDDI and a few others in the industry
are blazing a new path out of this
mess by utilizing a different strategy
–business model.
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Adopt or Die
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The “Bottom-up” System
A "bottom-up" entrepreneurial system
exhibits many of the characteristics
associated with organic life:
• Organic systems provide large numbers of
small, redundant units to ensure the survival
of the larger whole.
• An organic business model allows companies
the freedom to innovate, while competitive
forces select the most successful ideas for
development & commercialization of
biopharmaceutical products.
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Contrasting Management Systems 1
1
Structure
Industrial
Age
Hierarchy
Culture
Conflict
Mission
Profit
Biotech/ICT
Age
Internal
Enterprise
Stakeholder
Collaboration
Profit, but also
science &
society
Jianming Li, National Cancer Institute, Washington, DC; William Halal, The George Washington University, Washington, DC
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Our Business Model
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In-license and develop pharmaceuticals for life
threatening indications :
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Cardiovascular
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Infectious diseases
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Out-license to marketing partners
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Strategic alliances (integrating regulatory, clinical &
marketing issues.)
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Establish interdisciplinary teams to seek out and help build
valuable business propositions.
• Understand how research gets commercialized
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Business Model
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(cont’d)
Adopting this business model allows
VDDI to:
• Put more resources into things that add
value, and
• Better manage risk associated with
biopharmaceutical development
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Company Overview
• Founded September 1999
• Headquartered Brentwood, TN USA: support offices in
Ann Arbor, Bangkok, Dublin, CT, and FL (administrative &
scientific)
• Experienced Management Team
• Represents the entrepreneurial model to drive success
• Aggressive in-licensing and outsourcing model
• Values new approaches and collaborations
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Overview
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(cont’d)
Company: VDDI Pharmaceuticals
Products: Antibiotics, Medical Peptides,
Cardiovascular
Markets: Global
Customers (current): Regulatory agencies
& U.S. Government
Capital Requirements: $5 M
Business Model: In licensing, technology
partnerships, and outsourcing model
Exit: Marketing Partners, IPO (Q4,2004)
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Management
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R. Stephen Porter, Pharm D, Chairman, CEO and President
• Therapeutic Antibodies; American Cyanamid
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Steve Sensoli, MBA, Chief Business Officer
• GeneWorks, GLY DERM, Leeco Diagnostics Inc
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Mark Fisher, Ph.D. - VP Manufacturing
• SmithKline; Johnson and Johnson; FDA consultant
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Kristen Flaharty, Pharm D. - Sr. VP Regulatory Affairs
• SmithKline, KKF Consulting, 10 NDA’s
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John Ferkany, PhD - VP Preclinical Development
• Oread, Oceanix, Nova
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Scientific Advisory Board
Cardiovascular
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Desmond Fitzgerald, PhD, MB, BAO, BCH
• Royal College of Surgeons, Dept of Clinical
Pharmacology; Adjunct Prof. Of Medicine Univ. of
Pennsylvania
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James Tcheng, MD
• Associate Professor of Medicine - Duke Clinical Research
Institute & University Health System
• Practicing Cardiologist; over 2500 angioplasties
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Scientific Advisory Board
Regulatory Affairs
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Raymond Lipicky, MD.
• Former Head of US Food and Drug
Administration Cardio-Renal Drugs
Division
Joyce Cavagnaro, Ph.D.
• BioAccess LLC
 Former VP Human Genome Sciences
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VDDI’s IP Portfolio
VDDI focuses on:
 Intellectual
Propperty (IP)
where general
proof-of-principle
has already been
established, and
 IP’s that are novel
or dominant.
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Strategic Advantages
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High Quality, Fast Track Development
• Lean Operation
• Innovation
• “Best of Breed” global partners/collaborators
• Pharmacology expertise
• Building a Global KM (knowledge management) model
for Clinical, Regulatory, and Product Development
Expertise
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Narrow Indication: Broad Application Compounds
• Seek fast track approval
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Innovation-based
VDDI is in the innovation–based
biopharmaceutical business. Our
success (as well as our partners)
involves cultivating a small number
of skilled scientists, business
executives, and organizations and
managing these ongoing networks of
biopharmaceutical partners to
achieve a “win-win” situation.
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Revenue Model
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Out-licensing Agreements:
• Up-front payments
• Milestone Payments
• Royalties
• Grants
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Strategic partnership payments
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But remember…
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Profitability comes down to:
• Good science
• Quality high-impact decisions
• Good risk management
Because..
“Ultimately the value of a drug comes
down to the degree of patient
benefit it offers – not the number of
people it’s prescribed for.”
Arthur Levinson, CEO, Genentech
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Medical Peptides
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Medical Peptides Pharmaceuticals
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Exclusive license for all medical
indications
$31B Antibiotic space using peptides
effectively
Technology produces STABILITY and
extended DURATION in the peptides
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Medical Peptides
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Amphibian derived (Ulster): Anti-fungal,
Antimicrobial
Combi-Chem (Queens): Sortase
Inhibitors, Biofilm Inhibitors (Gm-)
InterLink Technology produces STABILITY
and extended DURATION in the peptides
(REV4)
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Medical Peptide Summary
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Amphibiotic collaboration provides huge
library of novel compounds with massive
diversity
Reverse magainins, indolicidins and cecropins
of particular interest
Reversal of improved peptides; reduce
hemolytic potential and protease degradation
• Increases duration of action, lowers Cost of
Goods
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In animal trials
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NADs
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NADs Technology
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Nicotinamide Adenine Dinucleotide
synthetase (NADs) inhibitors
Enzyme that plays an essential role
in oxidation-reduction reactions in
bacteria
NADs inhibitor can stop growth and
be used as a prophylaxis against
infection
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NADs Compounds…promising
indications
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Prohibit hospital-based gram positive
infections
Refractory or resistant hospital
acquired fungal infections
Crop protection – antibiotic
fungicides can improve crop yields
and quality
Threats from Bioterrorism
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NADs Technology
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Novel class of small molecules, simple 4step synthesis = “low cost of goods”
Fast Track, Orphan designation, &
nontraditional accelerated development (US
FDA)
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Narrow indication/broad application
Segmented biologic spectrum (Gram +)
of activity
Three distinct and large market potentials
Intellectual property secure
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Ongoing Activities
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Serum stability
Protein binding
Mammalian cell cytotoxicity
Metabolic stability
Preliminary rodent PK
Gram quantity synthesis
Iterative chemistry optimization
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Cardiovascular
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A Global Problem and Costs
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CVD is the world’s leading cause of death – CVD
is truly a global problem.
CVD accounts for 20-50% of all deaths in most
countries.
Total estimated sales of CVD drugs in the world’s
12 largest markets : $40 billion (IMS Health, 1998)
It is estimated that direct and indirect costs to
treat CVD will total $118.2 billion (USA).
Nearly 70 percent of all patients who suffer a
coronary event will fail medical therapy and
require revascularization procedures in order to
survive.
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Current Lead Product
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Phase III cardiovascular drug
• Pharmacia donation to Western Michigan University with
exclusive license for a GP IIb/IIIa antagonist
• Controlling thrombotic events – “PCTR” (percutaneous
transluminal coronary revascularization.) or percutaneous
coronary intervention (PCI)
• Development program to be completed and Product to
Market ► in 2-3years
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Cardiovascular Product…. The
Market
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Annual worldwide market for product is
estimated to exceed $ 1 billion
Worldwide license for the technology with
estate of 161 patents (99 issued- 19 US)
Acute Coronary Syndromes (ACSs)-research data indicates that oral GP
IIb/IIIa inhibitor therapy merits a
prominent role in the initial management
of patients with ACSs.
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coronary stent and
angioplasty
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Next Steps….
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Establish a presence through collaboration
and marketing partners in Asia-Pacific.
Start funneling technology into strategic
partnerships, while keeping intellectual
property and value they create.
Find a smart way to get Asia-Pacific’s
smart money and people involved.
Establish global collaborative research to
create sustainable value and pipelines.
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Summary of VDDI’s Profile
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VDDI believes in Collaborative
Partnerships because:
through this diverse
blend of global
working
relationships, the
interests of all
stakeholders are
enhanced and risks
are better
managed.
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VDDI’s Culture
For VDDI to be successful in its global
ventures it will always:
• emphasize the value of its science and
technology,
• the importance of its research &
management personnel, and
• its ultimate goal of contributing to
medicine and human well-being.
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Belief in Convergence &
Acceleration…
VDDI armed with a newly emerging
paradigm that recognizes the
creativity of self-organizing systems
focused & supported in a
collaborative scientific & business
community, this new drug
development strategy for will lead
the company into an era of
unprecedented economic growth.
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The Future…
belongs to companies who
“…build empires of the mind.”
(paraphrased: a Winston Churchill quote)
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“As the Future Catches You”…
1
VDDI believes…
• That as new disciplines and technologies
emerge…
• You don’t win the game just producing a
lot of knowledge…
• You also have to protect it…
• And apply it!
1
Book title: Juan Enriquez, As the Future Catches You; © 2000, 2001, Crown Business, New York, NY
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The 21st Century Scenario
As traditional Big
Pharma’s structural
and resource
advantages decay and
more products and
services enter the
global competitive
arena, strategies and
collaborations formed
around knowledge can
change the game and
open up new paths of
profitability.
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A Final Thought…
“The great thing in this world is not so
much where we stand, as in what
direction we are moving.”
1
Oliver Wendell Holmes, Chief Justice, US Supreme Court
1
Juan Enriquez, As the Future Catches You; © 2000, 2001; Crown Business, New York, NY; p184
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“Rapidly developing novel drugs for
Cardiovascular and Infectious diseases”
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